Document:

paceth_10q-ex1001.htm

    
      Exhibit 10.1

    

     

    
      
        

        

      

      CREDIT
AGREEMENT

       

      dated
as of February 27, 2007

    

     

    among

     

    PACIFIC
ETHANOL HOLDING CO. LLC,

    PACIFIC
ETHANOL MADERA LLC,

    PACIFIC
ETHANOL COLUMBIA, LLC,

    PACIFIC
ETHANOL STOCKTON, LLC,

    PACIFIC
ETHANOL IMPERIAL, LLC, and

    PACIFIC
ETHANOL MAGIC VALLEY, LLC,

    as
Borrowers,

     

    PACIFIC
ETHANOL HOLDING CO. LLC,

    as
Borrowers' 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,

     

    UNION
BANK OF CALIFORNIA, N.A.,

    as
Accounts Bank,

     

    WESTLB
AG, NEW YORK BRANCH,

    as
Lead Arranger and Sole Bookrunner,

     

    MIZUHO
CORPORATE BANK, LTD.,

    as
Lead Arranger and Co-Syndication Agent,

     

    CIT
SECURITIES LLC,

    as
Lead Arranger and Co-Syndication Agent,

     

    COÖPERATIEVE
CENTRALE RAIFFEISEN-BOERENLEENBANK B.A., 

    "RABOBANK
NEDERLAND", NEW YORK BRANCH,

    as
Lead Arranger and Co-Documentation Agent,

     

    and

     

    BANCO
SANTANDER CENTRAL HISPANO S.A, NEW YORK BRANCH,

    as
Lead Arranger and Co-Documentation Agent

     

    
      

      
        

        

      

       

      
        
          
          

        

        
          
          

          
          

        

        
          
          

        

      

      

      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	4
	 	 	 
	Section
      2.01	Construction
      Loans 	4
	Section
      2.02	Term
      Loans 	7
	Section
      2.03	Working
      Capital Loans 	8
	Section
      2.04	Letters
      of Credit 	8
	Section
      2.05	Notice
      of Fundings 	10
	
                  Section
      2.06

                	
                  Funding of Loans 

                	11
	
                  Section
      2.07

                	
                  Evidence
      of Indebtedness  

                	13
	
                  Section
      2.08

                	
                  Termination
      or Reduction of Commitments 

                	14
	
                  Section
      2.09

                	Tranche
      Reallocation 	15
	
                  Section
      2.10

                	
                  Additional
      Greenfield Plant 

                	16
	 	 	 
	
                  ARTICLE
      III

                	
                  REPAYMENTS,
      PREPAYMENTS, INTEREST AND FEES

                	16
	 	 	 
	
                  Section
      3.01

                	
                  Repayment
      of Construction Loan Fundings 

                	16
	
                  Section
      3.02

                	
                  Repayment
      of Term Loan Fundings 

                	16
	
                  Section
      3.03

                	
                  Repayment
      of Working Capital Loan Fundings 

                	17
	
                  Section
      3.04

                	
                  Interest
      Payment Dates 

                	17
	
                  Section
      3.05

                	
                  Interest
      Rates 

                	17
	
                  Section
      3.06

                	
                  Default
      Interest Rate 

                	18
	
                  Section
      3.07

                	
                  Interest
      Rate Determination 

                	19
	
                  Section
      3.08

                	Computation of
      Interest and Fees 	19
	
                  Section
      3.09

                	
                  Optional
      Prepayment 

                	19
	
                  Section
      3.10

                	
                  Mandatory
      Prepayment 

                	21
	
                  Section
      3.11

                	
                  Time
      and Place of Payments 

                	23
	
                  Section
      3.12

                	
                  Fundings
      and Payments Generally 

                	23
	
                  Section
      3.13

                	Fees 	24
	
                  Section
      3.14

                	
                  Pro
      Rata Treatment 

                	24
	
                  Section
      3.15

                	
                  Sharing
      of Payments 

                	25
	
                  Section
      3.16

                	
                  Termination
      of Interest Rate Protection Agreement in Connection with Any
      Prepayment 

                	26

        

         

        
          
            
            

          

          
            ii

            
              

            

          

          
            
            

          

        

         

        
          
            	
                    ARTICLE
      IV

                  	
                    EURODOLLAR
      RATE AND TAX PROVISIONS

                  	26
	 	 	 
	Section
      4.01	
                    Eurodollar
      Rate Lending Unlawful 

                  	26
	
                    Section
      4.02

                  	
                    Inability
      to Determine Eurodollar Rates 

                  	27
	
                    Section
      4.03

                  	
                    Increased
      Eurodollar Loan Costs 

                  	27
	
                    Section
      4.04

                  	
                    Obligation
      to Mitigate 

                  	28
	
                    Section
      4.05

                  	
                    Funding
      Losses 

                  	28
	
                    Section
      4.06

                  	
                    Increased
      Capital Costs 

                  	29
	
                    Section
      4.07

                  	Taxes 	29
	 	 	 
	
                    ARTICLE
      V

                  	
                    REPRESENTATIONS
      AND WARRANTIES

                  	31
	 	 	 
	
                    Section
      5.01

                  	
                    Organization;
      Power and Compliance with Law 

                  	31
	
                    Section
      5.02

                  	Due Authorization;
      Non-Contravention 	31
	
                    Section
      5.03

                  	
                    Governmental
      Approvals 

                  	32
	
                    Section
      5.04

                  	Investment Company
      Act 	34
	
                    Section
      5.05

                  	Validity of
      Financing Documents 	34
	
                    Section
      5.06

                  	Financial
      Information 	34
	
                    Section
      5.07

                  	No
      Material Adverse Effect 	34
	
                    Section
      5.08

                  	Project
      Compliance 	34
	
                    Section
      5.09

                  	Litigation 	35
	
                    Section
      5.10

                  	Sole Purpose Nature;
      Business 	35
	
                    Section
      5.11

                  	
                    Contracts 

                  	35
	
                    Section
      5.12

                  	
                    Collateral 

                  	37
	
                    Section
      5.13

                  	
                    Ownership
      of Properties 

                  	39
	
                    Section
      5.14

                  	
                    Taxes 

                  	40
	
                    Section
      5.15

                  	
                    Patents,
      Trademarks, Etc 

                  	40
	
                    Section
      5.16

                  	
                    ERISA
      Plans 

                  	40
	
                    Section
      5.17

                  	
                    Property
      Rights, Utilities, Supplies Etc 

                  	40
	
                    Section
      5.18

                  	
                    No
      Defaults 

                  	41
	
                    Section
      5.19

                  	
                    Environmental
      Warranties 

                  	41
	
                    Section
      5.20

                  	
                    Regulations T,
      U and X 

                  	42
	
                    Section
      5.21

                  	
                    Accuracy
      of Information 

                  	42
	
                    Section
      5.22

                  	
                    Indebtedness 

                  	43
	
                    Section
      5.23

                  	Separateness 	44
	
                    Section
      5.24

                  	
                    Required
      LLC Provisions 

                  	44
	
                    Section
      5.25

                  	
                    Subsidiaries 

                  	45
	
                    Section
      5.26

                  	
                    Foreign
      Assets Control Regulations, Etc 

                  	45
	
                    Section
      5.27

                  	
                    Employment
      Matters 

                  	45
	
                    Section
      5.28

                  	
                    Solvency 

                  	46
	
                    Section
      5.29

                  	
                    Legal
      Name and Place of Business 

                  	46
	
                    Section
      5.30

                  	
                    No
      Brokers 

                  	46
	
                    Section
      5.31

                  	
                    Insurance 

                  	46
	
                    Section
      5.32

                  	
                    Accounts 

                  	47

          

           

          
            
              
              

            

            
              iii

              
                

              

            

            
              
              

            

          

           

          
            
              	
                      ARTICLE
      VI

                    	
                      CONDITIONS
      PRECEDENT

                    	47
	 	 	 
	
                      Section
      6.01

                    	
                      Conditions
      to Closing 

                    	47
	
                      Section
      6.02

                    	
                      Conditions
      to Madera Funding 

                    	54
	
                      Section
      6.03

                    	
                      Conditions
      to Boardman Funding 

                    	57
	
                      Section
      6.04

                    	
                      Conditions
      to First Funding for Each Greenfield Plant 

                    	60
	
                      Section
      6.05

                    	Conditions to All
      Greenfield Plant Construction Loan Fundings 	67
	
                      Section
      6.06

                    	Conditions to
      Greenfield Plant Top-Up Funding 	69
	
                      Section
      6.07

                    	
                      Conditions
      to Term Loan Funding 

                    	70
	
                      Section
      6.08

                    	Conditions to All
      Fundings 	71
	 	 	 
	
                      ARTICLE
      VII

                    	
                      COVENANTS

                    	73
	 	 	 
	
                      Section
      7.01

                    	
                      Affirmative
      Covenants 

                    	73
	
                      Section
      7.02

                    	
                      Negative
      Covenants 

                    	82
	
                      Section
      7.03

                    	
                      Reporting
      Requirements 

                    	92
	
                      Section
      7.04

                    	
                      Release
      of Borrower 

                    	97
	 	 	 
	
                      ARTICLE
      VIII

                    	
                      PROJECT
      ACCOUNTS

                    	98
	 	 	 
	
                      Section
      8.01

                    	
                      Establishment
      of Project Accounts 

                    	98
	
                      Section
      8.02

                    	Deposits into and
      Withdrawals from Project Accounts 	100
	
                      Section
      8.03

                    	
                      Escrow
      Account 

                    	102
	
                      Section
      8.04

                    	
                      Construction
      Holding Account 

                    	102
	
                      Section
      8.05

                    	
                      Stockton
      Construction Account 

                    	103
	
                      Section
      8.06

                    	
                      Brawley
      Construction Account 

                    	105
	
                      Section
      8.07

                    	
                      Burley
      Construction Account 

                    	106
	
                      Section
      8.08

                    	
                      Revenue
      Account 

                    	108
	
                      Section
      8.09

                    	
                      Operating
      Account 

                    	113
	
                      Section
      8.10

                    	
                      Maintenance
      Capital Expense Account 

                    	114
	
                      Section
      8.11

                    	
                      Working
      Capital Reserve Account 

                    	114
	
                      Section
      8.12

                    	
                      Debt
      Service Reserve Account 

                    	116
	
                      Section
      8.13

                    	
                      Prepayment
      Holding Account 

                    	118
	
                      Section
      8.14

                    	
                      Insurance
      and Condemnation Proceeds Accounts 

                    	118
	
                      Section
      8.15

                    	
                      Extraordinary
      Proceeds Account 

                    	120
	
                      Section
      8.16

                    	
                      Warranty
      Accounts 

                    	122
	
                      Section
      8.17

                    	
                      Representations,
      Warranties and Covenants of Accounts Bank 

                    	122
	
                      Section
      8.18

                    	
                      Project
      Accounts 

                    	124
	
                      Section
      8.19

                    	
                      Project
      Accounts as Deposit Account 

                    	125
	
                      Section
      8.20

                    	
                      Duties
      of Accounts Bank 

                    	126
	
                      Section
      8.21

                    	
                      Subordination 

                    	126
	
                      Section
      8.22

                    	
                      Borrower
      Acknowledgments 

                    	127
	
                      Section
      8.23

                    	
                      Agreement
      to Hold In Trust 

                    	127
	
                      Section
      8.24

                    	
                      Interest
      and Investments 

                    	127
	
                      Section
      8.25

                    	
                      Accounts
      Bank Information 

                    	128
	
                      Section
      8.26

                    	
                      Notices
      of Suspension of Accounts 

                    	129

            

             

            
              
                
                

              

              
                iv

                
                  

                

              

              
                
                

              

            

             

            
              	
                      ARTICLE
      IX

                    	
                      DEFAULT
      AND ENFORCEMENT

                    	130
	 	 	 
	
                      Section
      9.01

                    	
                      Events
      of Default 

                    	130
	
                      Section
      9.02

                    	
                      Action
      Upon Bankruptcy 

                    	137
	
                      Section
      9.03

                    	
                      Action
      Upon Other Event of Default 

                    	137
	
                      Section
      9.04

                    	
                      Application
      of Proceeds 

                    	138
	 	 	 
	
                      ARTICLE
      X

                    	
                      THE
      AGENTS

                    	139
	 	 	 
	
                      Section
      10.01

                    	
                      Appointment
      and Authority 

                    	139
	
                      Section
      10.02

                    	
                      Rights
      as a Lender or Interest Rate Protection Provider 

                    	141
	
                      Section
      10.03

                    	
                      Exculpatory
      Provisions 

                    	141
	
                      Section
      10.04

                    	
                      Reliance
      by Agents 

                    	142
	
                      Section
      10.05

                    	
                      Delegation
      of Duties 

                    	142
	
                      Section
      10.06

                    	
                      Resignation
      or Removal of Agent 

                    	142
	
                      Section
      10.07

                    	
                      No
      Amendment to Duties of Agent Without Consent 

                    	143
	
                      Section
      10.08

                    	
                      Non-Reliance
      on Agent and Other Lenders 

                    	144
	
                      Section
      10.09

                    	
                      No
      Lead Arranger, Syndication Agent, Bookrunner Duties 

                    	144
	
                      Section
      10.10

                    	
                      Collateral
      Agent May File Proofs of Claim 

                    	144
	
                      Section
      10.11

                    	
                      Collateral
      Matters 

                    	145
	
                      Section
      10.12

                    	
                      Copies 

                    	145
	 	 	 
	
                      ARTICLE
      XI

                    	
                      MISCELLANEOUS
      PROVISIONS

                    	146
	 	 	 
	
                      Section
      11.01

                    	
                      Amendments,
      Etc 

                    	146
	
                      Section
      11.02

                    	
                      Applicable
      Law; Jurisdiction; Etc 

                    	147
	
                      Section
      11.03

                    	
                      Assignments 

                    	149
	
                      Section
      11.04

                    	
                      Benefits
      of Agreement 

                    	152
	
                      Section
      11.05

                    	
                      Borrowers'
      Agent 

                    	153
	
                      Section
      11.06

                    	
                      Consultants 

                    	153
	
                      Section
      11.07

                    	
                      Costs
      and Expenses 

                    	153
	
                      Section
      11.08

                    	
                      Counterparts;
      Effectiveness 

                    	154
	
                      Section
      11.09

                    	
                      Indemnification
      by the Borrowers 

                    	154
	
                      Section
      11.10

                    	
                      Interest
      Rate Limitation 

                    	155
	
                      Section
      11.11

                    	
                      No
      Waiver; Cumulative Remedies 

                    	155
	
                      Section
      11.12

                    	
                      Notices
      and Other Communications 

                    	155
	
                      Section
      11.13

                    	
                      Patriot
      Act Notice 

                    	159
	
                      Section
      11.14

                    	
                      Payments
      Set Aside 

                    	159
	
                      Section
      11.15

                    	
                      Right
      of Setoff 

                    	159
	
                      Section
      11.16

                    	
                      Severability 

                    	159
	
                      Section
      11.17

                    	
                      Survival 

                    	160
	
                      Section
      11.18

                    	
                      Treatment
      of Certain Information; Confidentiality 

                    	160
	
                      Section
      11.19

                    	Waiver of
      Consequential Damages, Etc 	161
	
                      Section
      11.20

                    	Waiver of Litigation
      Payments 	161

            

          

        

      

    

     

    
    

    
    

    
    

    
    

    
    

    
    

    
    

    
    

    
    

    
    

    
    

    
    

    
    

    
      
        
        

      

      
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    SCHEDULES

     

    Schedule
1.01(a) – Commitments

    Schedule
2.08(e) – Buy Down Calculation

    Schedule 2.09
Tranche Reallocation Eligible Lenders and Commitments

    Schedule
5.11 – Contracts

    Part A - First Funding
Contracts

    Part B - Deferred
Contracts

    Schedule
5.12 – UCC Filing Offices

    Schedule
5.13(a) - Site Descriptions

    Schedule
5.19(d)(iii) - Underground Storage Tanks

    Schedule
5.23 – Separateness Provisions

    Schedule
5.29 – Legal Names and Places of Business

    Schedule
5.30 - Broker Fees

    Schedule
6.01(g)(i) - Existing Liens

    Schedule
6.01(q) - Drawdown Schedules

    Schedule
6.02(e)(i) – Acceptable Project Parties

    Schedule
6.02(e)(iv) – Project Party Consents

    Schedule
7.01(h) – Insurance

    Schedule
7.01(k)-A - Performance Guarantee

    Schedule
7.01(k)-B - Approved Performance Test Protocols

    Schedule
7.02(f) - Storage Facilities

    Schedule
7.02(t) – Construction Budgets

    Schedule
8.08(c)(xiii) – Target Balance Amount

    Schedule
11.12 – Notice Information

     

    EXHIBITS

     

    Exhibit A
– Defined Terms

    Exhibit
2.04 – Issuance Request

    Exhibit
2.05-A – Form of Working Capital Funding Notice

    Exhibit
2.05-B – Form of Construction Funding Notice

    Exhibit
2.07 – Form of Note

    Exhibit 2.09
- Form of Tranche Conversion Notice

    Exhibit
3.05 – Form of Interest Period Notice

    Exhibit
4.07 – Form of Non-U.S. Lender Statement

    Exhibit
6.01(k) – Form of Insurance Consultant's Certificate

    Exhibit
6.01(v) – Financial Model

    Exhibit
6.02(a) – Form of Commercial Operation Date Certificate

    Exhibit
6.02(g) - Form of Title Endorsement

    Exhibit
6.04(g)-A- Form of Deed of Trust

    Exhibit
6.04(g)-B - Form of Pledge Agreement

    Exhibit
6.04(g)-C -Form of Security Agreement

    Exhibit
6.05(c) – Form of Independent Engineer's Certificate

    Exhibit
7.01(y) – Form of Final Completion Certificate

    Exhibit
7.02(i) – Form of Blocked Account Agreement

    Exhibit
7.02(s) – Form of Restricted Payment Certificate

    Exhibit
7.03(g) – Form of Monthly Progress Report

     

    
      
        
        

      

      
        vi

        
          

        

      

      
        
        

      

    

    Exhibit
7.03(n) – Form of Borrowing Base Certificate

    Exhibit
7.03(p) – Form of Operating Statement

    Exhibit
8.04 – Form of Construction Holding Withdrawal Certificate

    Exhibit
8.05 – Form of Construction Withdrawal Certificate

    Exhibit
8.08-A – Form of Revenue Account Withdrawal Certificate (Before Conversion
Date)

    Exhibit
8.08-B – Form of Revenue Account Withdrawal Certificate (After Conversion
Date)

    Exhibit
8.09 – Form of Operating Account Withdrawal Certificate

    Exhibit
8.11 – Form of Working Capital Transfer Certificate

    Exhibit
8.12 – Form of Debt Service Reserve Letter of Credit

    Exhibit
8.14 – Form of Insurance and Condemnation Proceeds Request
Certificate

    Exhibit
8.15 – Form of Extraordinary Proceeds Release Notice

    Exhibit
8.16 – Form of Warranty Proceeds Request Certificate

    Exhibit
11.03 – Form of Lender Assignment Agreement

     

    
      
        
        

      

      
        vii

        
          

        

      

      
        
        

      

    

     

    This
CREDIT AGREEMENT (this "Agreement"), dated as
of February 27, 2007, is by and among Pacific Ethanol Holding Co. LLC, a
Delaware limited liability company ("Pacific Holding"),
Pacific Ethanol Madera LLC, a Delaware limited liability company ("Madera"), Pacific
Ethanol Columbia, LLC, a Delaware limited liability company ("Boardman"), Pacific
Ethanol Stockton, LLC, a Delaware limited liability company ("Stockton"), Pacific
Ethanol Imperial, LLC, a Delaware limited liability company ("Brawley") and Pacific
Ethanol Magic Valley, LLC, a Delaware limited liability company ("Burley" and, together
with Pacific Holding, Madera, Boardman, Stockton, and Brawley, the "Borrowers"), Pacific
Holding, as Borrowers' 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,
UNION BANK OF CALIFORNIA, N.A., as accounts bank, WESTLB AG, NEW YORK BRANCH, as
lead arranger and sole bookrunner, MIZUHO CORPORATE BANK, LTD., as lead arranger
and co-syndication agent, CIT CAPITAL SECURITIES LLC as lead arranger and
co-syndication agent, COÖPERATIEVE CENTRALE RAIFFEISEN-BOERENLEENBANK B.A.,
"RABOBANK NEDERLAND", NEW YORK BRANCH, as lead arranger and co-documentation
agent, and BANCO SANTANDER CENTRAL HISPANO S.A, NEW YORK BRANCH, as lead
arranger and co-documentation agent.

     

    RECITALS

     

    WHEREAS,
the Borrowers have requested that the Lenders establish a credit facility the
proceeds of which are to be used to (a) finance the ownership and operation of
two (2) denatured ethanol production facilities located in or near Madera,
California and Boardman, Oregon, each of which is expected to produce
approximately forty (40) million gallons-per-year, and the ownership,
development, engineering, construction, testing and operation of three
(3) denatured ethanol production facilities to be located in or near
Stockton, California, Brawley, California and Burley, Idaho, each with a design
basis capacity of approximately fifty (50) million gallons-per-year, (b)
fund certain reserves and (c) pay certain fees and expenses associated with this
Agreement and the Loans, in each case as further described herein;
and

     

    WHEREAS,
the Lenders are willing to make such credit facility available to the Borrowers
upon and subject to the terms and conditions hereinafter set forth;

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    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 the Borrowers, and any other similar expressions,
shall mean knowledge of each of the Borrowers 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.

     

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

     

    (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.

     

    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.  (a)  Subject to Section 1.05(b),
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.

     

    (b) Each of
the Borrowers, the Administrative Agent and the Lenders hereby confirms that it
is the intention of all such Persons that this Agreement and the other Financing
Documents and the Obligations of each Borrower hereunder and thereunder not
constitute a fraudulent transfer or conveyance for purposes of any Debtor Relief
Laws, the Uniform Fraudulent Conveyance Act, the Uniform Fraudulent Transfer Act
or any similar foreign, federal or state law, to the extent applicable to this
Agreement or such other Financing Document and the Obligations of each Borrower
hereunder and thereunder.  To effectuate the foregoing intention, the
Administrative Agent, the Lenders and the Borrowers hereby irrevocably agree
that the Obligations of each Borrower at any time shall be limited to the
maximum amount as will result in the Obligations of such Borrower not
constituting a fraudulent transfer or conveyance.

     

    
      
        
        

      

      
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    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 Construction
Loans.  (a) Each Tranche B Lender agrees, severally
and not jointly, on the terms and conditions of this Agreement, to fund the full
amount of such Tranche B Lender's Tranche B Construction Loan
Commitment to the Escrow Account on or after the Closing Date and in accordance
with Section 2.01(s).

     

    (b) On the
terms and conditions of this Agreement, loans shall be released from the Escrow
Account (each such loan, an "In-Progress Plant 1
Construction Loan") to the Borrowers, once on the Funding Date for
In-Progress Plant 1, for transfer to the Construction Holding Account in an
aggregate principal amount not in excess of the In-Progress Plant 1 Aggregate
Construction Loan Commitment.

     

    (c) On the
terms and conditions of this Agreement, (i) loans shall be released from
the Escrow Account (each such loan, an "In-Progress Plant 2
Tranche B Construction Loan") to the Borrowers for transfer to the
Construction Holding Account and (ii) each Tranche A Lender agrees,
severally and not jointly, to make a loan (each such loan, an "In-Progress Plant 2 Tranche
A Construction Loan") to the Borrowers, once on the Funding Date for
In-Progress Plant 2, in an aggregate principal amount, when taken together, not
in excess of the In-Progress Plant 2 Aggregate Construction Loan
Commitment.

     

    (d) On the
terms and conditions of this Agreement, (i) loans shall be released from
the Escrow Account (each such loan, a "Greenfield Plant 1
Tranche B Construction Loan") to the Borrowers for transfer to the
Construction Account for Greenfield Plant 1 and (ii) and each Tranche
A Lender agrees, severally and not jointly, on the terms and conditions of this
Agreement, to make loans (each such loan, a "Greenfield Plant 1 Tranche A
Construction Loan") to the Borrowers in each such case for Project Costs
with respect to Greenfield Plant 1 or to make a Sponsor Support Reimbursement
Funding or Greenfield Plant Top-Up Funding, from time to time, but not more
frequently than once each calendar month (except for Loans made on the
Conversion Date), until the Construction Loan Maturity Date; provided, however, that
(i) the aggregate principal amount of the Greenfield Plant 1 Construction
Loans shall not exceed the Greenfield Plant 1 Aggregate Construction Loan
Commitment, (ii) the aggregate principal amount of Greenfield Plant 1
Construction Loans disbursed prior to the Commercial Operation Date of
Greenfield Plant 1 (taken together with the Working Capital Plant Commitment for
Greenfield Plant 1) shall not exceed the lesser of (x) forty percent
(40%) of budgeted Project Costs for Greenfield Plant 1 (as set forth in the
then-current Construction Budget for such Plant) and (y) forty-five million
Dollars ($45,000,000), (iii) the aggregate principal amount of all
Greenfield Plant 1 Construction Loans disbursed on or prior to the Conversion
Date (taken together with the Working Capital Plant Commitment for such Plant)
shall not exceed sixty-five percent (65%) of the aggregate actual and
documented Project Costs for Greenfield Plant 1 and (iv)  the aggregate
principal amount of Greenfield Plant 1 Construction Loans disbursed as
Greenfield Plant Top-Up Fundings shall not exceed the corresponding Excess
Construction Loan Commitment.

     

    
      
        
        

      

      
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    (e) Each
Tranche A Lender agrees, severally and not jointly, on the terms and conditions
of this Agreement, to make loans (each such loan, a "Greenfield Plant 2
Construction Loan") to the Borrowers for Project Costs with respect to
Greenfield Plant 2 or to make a Sponsor Support Reimbursement Funding or
Greenfield Plant Top-Up Funding, from time to time but not more frequently than
once each calendar month (except for Loans made on the Conversion Date), until
the Construction Loan Maturity Date; provided, however, that
(i) the aggregate principal amount of the Greenfield Plant 2 Construction
Loans shall not exceed the Greenfield Plant 2 Aggregate Construction Loan
Commitment, (ii) the aggregate principal amount of Greenfield Plant 2
Construction Loans disbursed prior to the Commercial Operation Date of such
Plant (taken together with the Working Capital Plant Commitment for such Plant)
shall not exceed the lesser of (x) forty percent (40%) of budgeted
Project Costs for Greenfield Plant 2 (as set forth in the then-current
Construction Budget for such Plant and (y) forty-five million Dollars
($45,000,000), (iii) the aggregate principal amount of all Greenfield Plant
2 Construction Loans disbursed on or prior to the Conversion Date (taken
together with the Working Capital Plant Commitment for such Plant) shall not
exceed sixty-five percent (65%) of the aggregate actual and documented
Project Costs for Greenfield Plant 2 and (iv) the aggregate principal
amount of Greenfield Plant 2 Construction Loans disbursed as Greenfield Plant
Top-Up Fundings shall not exceed the corresponding Excess Construction Loan
Commitment.

     

    (f) Each
Tranche A Lender agrees, severally and not jointly, on the terms and conditions
of this Agreement, to make loans (each such loan, a "Greenfield Plant 3
Construction Loan") to the Borrowers for Project Costs with respect to
Greenfield Plant 3 or to make a Sponsor Support Reimbursement Funding or
Greenfield Plant Top-Up Funding, from time to time but not more frequently than
once each calendar month (except for Loans made on the Conversion Date), until
the Construction Loan Maturity Date; provided, however, that
(i) the aggregate principal amount of the Greenfield Plant 3 Construction
Loans shall not exceed the Greenfield Plant 3 Aggregate Construction Loan
Commitment, (ii) the aggregate principal amount of Greenfield Plant 3
Construction Loans disbursed prior to the Commercial Operation Date of such
Plant (taken together with the Working Capital Plant Commitment for such Plant)
shall not exceed the lesser of (x) forty percent (40%) of budgeted
Project Costs for Greenfield Plant 3 (as set forth in the then-current
Construction Budget for such Plant) and (y) forty-five million Dollars
($45,000,000), (iii) the aggregate principal amount of all Greenfield Plant
3 Construction Loans disbursed prior to the Conversion Date (taken together with
the Working Capital Plant Commitment for such Plant) shall not exceed sixty-five
percent (65%) of the aggregate actual and documented Project Costs for
Greenfield Plant 3 and (iv) the aggregate principal amount of Greenfield
Plant 3 Construction Loans disbursed as Greenfield Plant Top-Up Fundings shall
not exceed the corresponding Excess Construction Loan Commitment.

     

    (g) The
aggregate principal amount of the Construction Loans shall not exceed the
Aggregate Construction Loan Commitment.  The aggregate principal
amount of the Construction Loans made by each Lender shall not exceed the
Construction Loan Commitment of such Lender.

     

    (h) There
shall be no more than one (1) Greenfield Plant Top-Up Funding for each
Greenfield Plant.

     

    
      
        
        

      

      
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    (i) Sponsor
Support Reimbursement Fundings may only be requested to the extent that payments
by Pacific Ethanol under the Sponsor Support Agreement are eligible for
reimbursement as described in Section 2.04(g) (Sponsor's Deficiency Funding
Obligation) of the Sponsor Support Agreement.

     

    (j) Proceeds
of each Tranche B Construction Loan shall be deposited into the Escrow
Account for further release and application in accordance with this
Agreement.

     

    (k) Proceeds
of each In-Progress Plant 1 Construction Loan and each In-Progress
Plant 2 Tranche B Construction Loan (if any) shall be released from the
Escrow Account and transferred to the Construction Holding Account to be applied
solely in accordance with this Agreement and shall be used solely for the
payment of Project Costs (including the partial funding of the Debt Service
Reserve Requirement).

     

    (l) Proceeds
of each In-Progress Plant 2 Tranche A Construction Loan (if any) shall
be deposited into the Construction Holding Account and applied solely in
accordance with this Agreement and shall be used solely for the payment of
Project Costs (including the partial funding of the Debt Service Reserve
Requirement).

     

    (m) Proceeds
of the Greenfield Plant 1 Tranche B Construction Loans (if any) shall be
released from the Escrow Account and applied solely in accordance with this
Agreement and shall be used solely for the payment of Project Costs for
Greenfield Plant 1 (including, if applicable, for reimbursement of Project Costs
pursuant to a Sponsor Support Reimbursement Funding).

     

    (n) Proceeds
of the Greenfield Plant 1 Tranche A Construction Loans shall be applied
solely in accordance with this Agreement and, other than in the case of
Greenfield Plant Top-Up Fundings or Sponsor Support Reimbursement Fundings,
shall be deposited into the Construction Account for Greenfield Plant 1 or
applied directly to the payment of Debt Service and shall be used solely for the
payment of Project Costs for Greenfield Plant 1.

     

    (o) Proceeds
of the Greenfield Plant 2 Construction Loans shall be applied solely in
accordance with this Agreement and, other than in the case of Greenfield Plant
Top-Up Fundings or Sponsor Support Reimbursement Fundings, shall be deposited
into the Construction Account for Greenfield Plant 2 or applied directly to the
payment of Debt Service and shall be used solely for the payment of Project
Costs for Greenfield Plant 2.

     

    (p) Proceeds
of the Greenfield Plant 3 Construction Loans shall be applied solely in
accordance with this Agreement and, other than in the case of Greenfield Plant
Top-Up Fundings or Sponsor Support Reimbursement Fundings, deposited into the
Construction Account for Greenfield Plant 3 or applied directly to the payment
of Debt Service and shall be used solely for the payment of Project Costs for
Greenfield Plant 3.

     

    
      
        
        

      

      
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    (q) Proceeds
of Greenfield Plant Top-Up Fundings shall be deposited into the Construction
Holding Account and shall be used and applied solely in accordance with this
Agreement.

     

    (r) Proceeds
of Sponsor Support Reimbursement Fundings may be paid directly to the Sponsor in
accordance with Section 2.04(g) (Sponsor's Deficiency Funding
Obligation) of the Sponsor Support Agreement.

     

    (s) Each of
the Tranche B Lenders shall fund their pro rata portion of the
Tranche B Escrow Disbursement on or before March 7,
2007.  Unless or until otherwise elected pursuant to a properly
delivered Interest Period Notice, the Tranche B Loans made pursuant to the
Tranche B Escrow Disbursement shall bear interest as Base Rate
Loans.

     

    (t) Construction
Loans repaid or prepaid may not be reborrowed.

     

    Section
2.02 Term
Loans.  (a)  Each Tranche A Lender agrees, severally
and not jointly, on the terms and conditions of this Agreement, to make loans
(each such loan, a "Tranche A Term Loan")
to the Borrowers for the repayment of the Tranche A Construction Loans, on
the Conversion Date, in an aggregate principal amount not in excess of such
Tranche A Lender's Tranche A Term Loan Commitment; provided, however, that the
aggregate principal amount of the Tranche A Term Loans shall not exceed the
Aggregate Tranche Commitment for Tranche A Term Loans or the aggregate
outstanding Tranche A Construction Loans (including all Tranche A Construction
Loans made on the Conversion Date).

     

    (b) Each
Tranche B Lender agrees, severally and not jointly, on the terms and
conditions of this Agreement, to make loans (each such loan, a "Tranche B Term
Loan") to the Borrowers for the repayment of the Tranche B
Construction Loans, on the Conversion Date, in an aggregate principal amount not
in excess of such Tranche B Lender's Tranche B Term Loan Commitment; provided, however, that the
aggregate principal amount of the Tranche B Term Loans shall not exceed the
Aggregate Tranche Commitment for the Tranche B Term Loans or the aggregate
outstanding Tranche B Construction Loans (including all Tranche B
Construction Loans made on the Conversion Date).

     

    (c) Proceeds
of the Tranche A Term Loans shall be used solely for the payment of amounts
due in respect of the Tranche A Construction Loans made by the
Tranche A Lenders (including all Tranche A Construction Loans made on the
Conversion Date).

     

    (d) Proceeds
of the Tranche B Term Loans shall be used solely for the payment of amounts due
in respect of the Tranche B Construction Loans made by the Tranche B Lenders
(including all Tranche B Construction Loans made on the Conversion
Date).

     

    (e) Term
Loans repaid or prepaid may not be reborrowed.

     

    
      
        
        

      

      
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    Section
2.03 Working Capital
Loans.  (a)  Each Working Capital Lender agrees,
severally and not jointly, on the terms and conditions of this Agreement, to
make loans (each such loan, a "Working Capital
Loan") to the Borrowers for Working Capital Expenses, from time to time
but not more frequently than two (2) times each calendar month, until the
Working Capital Maturity Date, in an aggregate principal amount from time to
time outstanding not in excess of the Working Capital Loan Commitment of such
Working Capital Lender; provided, however, that the
aggregate principal amount of the Working Capital Loans at any one time
outstanding, plus the aggregate Stated Amounts of all issued and outstanding
Letters of Credit, shall not exceed the Aggregate Working Capital Loan
Commitment or, subject to the grace period provided in Section 3.10(c)
(Mandatory
Prepayments), the
then-applicable Working Capital Loan Availability.

     

    (b) Each
Funding of Working Capital Loans shall be in the aggregate minimum amount of
five hundred thousand Dollars ($500,000) and in integral multiples of one
hundred thousand Dollars ($100,000) in excess thereof.

     

    (c) Proceeds
of each Working Capital Loan for (i) Project Costs relating to the initial
start-up and testing of a Plant shall be deposited into the Construction Account
specified in the relevant Funding Notice, (ii) Operation and Maintenance
Expense shall be deposited into the Operating Account, and
(iii) Maintenance Capital Expenses shall be deposited into the Maintenance
Capital Expense Account, and in each such case shall be applied solely in
accordance with this Agreement and shall be used solely for the payment of
Working Capital Expenses.  Fundings of Working Capital Loans for
Operation and Maintenance Expenses and for Maintenance Capital Expenses shall be
subject to the Permitted Operating Budget Deviation Levels.

     

    (d) Within
the limits set forth in Section 2.03(a),
the Borrowers may pay or prepay and reborrow Working Capital Loans.

     

    Section
2.04 Letters of
Credit.  (a) The Issuing Bank agrees at any time on or after
the First Escrow Release Date, and from time to time on the terms and conditions
of this Agreement, upon receipt from the Borrowers of an Issuance Request, to
issue a Letter of Credit on behalf of any Borrower on the date and in the amount
set forth in such Issuance Request; provided, that
(i) Letters of Credit may only be for issued Plants with respect to which
the initial Funding has been made (or will be made simultaneously with the
issuance of such Letter of Credit), (ii) the aggregate Stated Amounts of
all issued and outstanding Letters of Credit shall not exceed the LC Cap and
(iii) the aggregate Stated Amount of all issued and outstanding Letters of
Credit plus the aggregate outstanding principal amount of all Working Capital
Loans at any one time outstanding shall not exceed the Aggregate Working Capital
Loan Commitment or the then-applicable Working Capital Loan
Availability.

     

    (b) The
Borrower shall give the Administrative Agent at least five (5) Business
Days irrevocable prior written notice (such notice, in substantially the form of
Exhibit 2.04, an
"Issuance
Request") (effective upon receipt) specifying the date (which shall be a
day that is no later than thirty (30) days preceding the Working Capital
Maturity Date) a Letter of Credit is requested to be issued, describing in
reasonable detail the nature of the transactions or obligations proposed to be
supported thereby (which shall be of the nature described in Section 2.04(i)(iii))
and the Stated Amount of such Letter of Credit, which shall be no less than four
hundred thousand Dollars ($400,000)).  Upon receipt of an Issuance
Request, the Administrative Agent shall promptly advise the Issuing Bank of the
contents thereof.

     

    
      
        
        

      

      
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    (c) Each
Working Capital Lender (other than the Issuing Bank) agrees that, upon the
issuance of any Letter of Credit hereunder, it shall automatically acquire a
participation in the Issuing Bank's liability thereunder in an amount equal to
such Lender's Working Capital Loan Commitment Percentage of such liability, and
each Working Capital Lender (other than the Issuing Bank) thereby shall
absolutely, unconditionally and irrevocably assume, as primary obligor and not
as surety, and shall be unconditionally obligated to the Issuing Bank to pay and
discharge when due, its Working Capital Loan Commitment Percentage of the
Issuing Bank's liability under each Letter of Credit.

     

    (d) Upon
receipt from a beneficiary under a Letter of Credit of a demand for payment
thereunder, in proper form to accomplish a draw in accordance with the terms
thereof, the Issuing Bank (through the Administrative Agent) shall promptly
notify each other Working Capital Lender and the Borrowers of the amount to be
paid by the Issuing Bank as a result of such demand and the date on which
payment is to be made by the Issuing Bank to such beneficiary in respect of such
demand.  Immediately following such demand by a beneficiary of payment
under a Letter of Credit, the Administrative Agent shall give each Working
Capital Lender prompt notice of the amount of the actual demand for payment,
specifying such Lender's Working Capital Loan Commitment Percentage of the
amount of such demand.

     

    (e) Upon
receipt by the Issuing Bank of a demand as described in Section 2.04(d),
each Working Capital Lender (other than the Issuing Bank) shall pay to the
Administrative Agent for the account of the Issuing Bank in Dollars and in
immediately available funds the amount of such Lender's Working Capital Loan
Commitment Percentage of any payment under the Letter of Credit.  Each
Working Capital Lender's obligation to make such payments to the Administrative
Agent for account of the Issuing Bank under this Section 2.04(e),
and the Issuing Bank's right to receive the same, shall be absolute and
unconditional and shall not be affected by any circumstance whatsoever,
including (i) the failure of any other Working Capital Lender to make its
payment under this Section 2.04(e),
(ii) the financial condition of the Borrowers, (iii) the existence of
any Default or Event of Default or (iv) the termination of the
Commitments.  Each such payment to the Issuing Bank shall be made
without any offset, abatement, withholding or reduction whatsoever.

     

    (f) To the
extent that any Working Capital Lender fails to pay any amount required to be
paid pursuant to Section 2.04(e)
on the date such amounts are due to be paid, such Lender shall pay interest to
the Issuing Bank (through the Administrative Agent) on such amount from and
including such due date to but excluding the date such payment is made at a rate
per annum equal to 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 plus (in either such
case) two percent (2%).

     

    (g) Each
drawing honored by the Issuing Bank under a Letter of Credit shall reduce the
Maximum Available Amount under such Letter of Credit by the amount of such
drawing.

     

    
      
        
        

      

      
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    (h) Notwithstanding
anything herein to the contrary (including Section 6.08 (Conditions
to All Fundings)), any payments by
the Issuing Bank under any Letter of Credit shall automatically be considered to
be a Working Capital Loan to the Borrowers from the Issuing Bank and the other
Working Capital Lenders making payments to the Issuing Bank in accordance with
Section 2.04(e)
in an amount equal to such Issuing Bank's and such other Working Capital
Lenders' Working Capital Loan Commitment Percentage of the amount of the drawing
on the Letter of Credit.  All such Working Capital Loans shall be
repaid or prepaid by the Borrower in accordance with the provisions of Article III
(Repayments,
Prepayments, Interest and Fees).  Such
Working Capital Loan shall initially be made as a Base Rate Loan.

     

    (i) The
issuance of each Letter of Credit shall, in addition to the conditions precedent
set forth in Section 6.08
(Conditions
to All Fundings), be subject to the
conditions precedent that (i) the First Escrow Release Date shall have
occurred, (ii) such Letter of Credit shall be in such form and contain such
terms as shall be reasonably satisfactory to the Issuing Bank consistent with
its then-current practices and procedures with respect to letters of credit of
the same type, (iii) such Letter of Credit shall be issued to satisfy a
Borrower's obligation to provide a letter of credit under a Contractual
Obligation or Necessary Project Approval, and (iv) the term of each Letter
of Credit shall expire no later than the Working Capital Maturity
Date.

     

    Section
2.05 Notice of
Fundings.  (a) From time to time, but not more frequently than
once per calendar month (except for the Loans made on the Conversion Date), 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.  Each Funding Notice delivered pursuant to this Section 2.05
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),
(iii) the amount of such requested Funding, (iv) the Loan(s) with
respect to which such Funding is requested (and, in the case of the Conversion
Date Funding, shall include both Construction Loans and Term Loans), and
(v) if applicable, whether such requested Funding includes a Greenfield
Top-Up Funding or a Sponsor Support Reimbursement Funding; provided, that no
Funding Notice shall be required in connection with the Tranche B Escrow
Disbursement as provided in Section 2.01(s)
(Construction
Loans)

     

    (b) The
Administrative Agent shall promptly advise (i) each Construction/Term
Lender of any Construction Funding Notice (including the Conversion Date Funding
Notice) and (ii) each Working Capital Lender of any Working Capital Funding
Notice, in each case given pursuant to this Section 2.05,
and of each such Lender's portion of the requested Funding.

     

    
      
        
        

      

      
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    Section
2.06 Funding of
Loans.  (a)  Subject to Section 2.06(d)
and except as otherwise provided in Section 2.09
(Tranche
Reallocation), each Funding (or
the Tranche B Escrow Disbursement, as the case may be) shall consist of
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 2.05
(Notice
of Fundings) (or, with respect to the Tranche B Escrow Disbursement
as provided in Section 2.01(s)
(Construction
Loans));
provided, however, that the
failure of any Lender to make any 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
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 Loan in accordance with the terms of this Agreement and
the Notes) at its option fulfill its Commitment with respect to any such Loan by
causing any domestic or foreign branch or Affiliate of such Lender to make such
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.

     

    (c) Subject
to Section 2.06(d),
(i) each Tranche A Lender shall make a Loan in the amount of its applicable
Commitment Percentage of each Construction Loan Funding and Term Loan 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 in the case of (A) any
Construction Loans, deposit the amounts so received (except to the extent
applied directly to the payment of Debt Service as specified in the applicable
Funding Notice) into (1) in the case of the Greenfield Plant 1 Construction
Loans (other than Greenfield Plant Top-Up Fundings and Sponsor Support
Reimbursement Fundings), the Construction Account for such Plant, (2) in
the case of the Greenfield Plant 2 Construction Loans (other than Greenfield
Plant Top-Up Fundings and Sponsor Support Reimbursement Fundings), the
Construction Account for such Plant, (3) in the case of the Greenfield
Plant 3 Construction Loans (other than Greenfield Plant Top-Up Fundings and
Sponsor Support Reimbursement Fundings), the Construction Account for such
Plant, (4) in the case of any Greenfield Plant Top-Up Fundings, the
Construction Holding Account, (5) in the case of any Sponsor Support
Reimbursement Fundings, directly to the Sponsor as provided for in the Sponsor
Support Agreement, and (6) in the case of any In-Progress Plant 2
Tranche A Construction Loans, the Construction Holding Account, (B) in
the case of any Tranche A Term Loans, apply the proceeds of such
Tranche A Term Loan solely to repay outstanding Tranche A Construction
Loans (and the Tranche A Lenders shall not be obligated to pay the proceeds
of any Tranche A Term Loan to, or upon the direction of, any Borrower, and
the Borrowers shall not be entitled to receive such proceeds), (ii) each
Tranche B Lender shall make a Loan in the amount of its applicable
Commitment Percentage of the Aggregate Tranche Commitment for Tranche B
Construction Loans hereunder in accordance with Section 2.01(s)
(Construction
Loans)
(or, if later, on the Tranche 

     

    
      
        
        

      

      
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    Conversion
Date) and on the Conversion 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, (A) in the case of any Tranche B
Construction Loans, deposit the amounts so received into the Escrow Account and
(B) in the case of any Tranche B Term Loans, apply the proceeds of
such Tranche B Term Loan solely to repay outstanding Tranche B
Construction Loans (and the Tranche B Lenders shall not be obligated to pay
the proceeds of any Tranche B Term Loan to, or upon the direction of, the
Borrowers, and the Borrowers shall not be entitled to receive such proceeds),
and (iii) each Working Capital Lender shall make a Loan in the amount of
its applicable Commitment Percentage of each Working Capital Loan 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 (except as otherwise provided in Section 2.04
(Letters
of Credit) deposit the amounts
so received into the Account specified in the relevant Funding Notice; 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 (i) any Tranche A
Lender prior to a proposed Funding Date that such Tranche A Lender will not make
available to the Administrative Agent its portion of the Funding proposed to be
made on such date, (ii) any Tranche B Lender prior to the date set
forth in Section 2.01(s)
(Construction
Loans)
or the Conversion Date (as applicable) that such Tranche B Lender will not
make available to the Administrative Agent its portion of the Funding or the
Tranche B Escrow Disbursement or any Tranche B Conversion
Disbursement, as the case may be, proposed to be made on such date, or
(iii) any Working Capital Lender prior to a proposed Funding Date that such
Working Capital 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
Loan included in such Funding (or the Tranche B Escrow Disbursement or
Tranche B Conversion Disbursement, as the case may be).  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, subject to the rights of the other Senior Secured
Parties under the Security Documents and 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
or the Tranche B Escrow Disbursement or any Tranche B Conversion
Disbursement, as the case may be, hereunder.  A notice of the
Administrative Agent to any Lender or the Borrowers with respect to any amounts
owing under this Section 2.06(d)
shall be conclusive, absent manifest error.

     

    
      
        
        

      

      
        12

        
          

        

      

      
        
        

      

    

     

    (e) On the
Conversion Date, the Lenders shall, to the extent required to pay the amounts
specified below (and in accordance with the Conversion Date Funding Notice),
disburse any unused portion of the Aggregate Construction Loan Commitment, and
any amounts on deposit in or standing to the credit of the Construction Accounts
and the Escrow Account on the Conversion Date shall be applied, in the following
order of priority:

     

    
      
        	
              	
                (i) 

              	
                first, for
      deposit into the Debt Service Reserve Account in an amount which, when
      taken together with all other amounts then on deposit in or credited to
      the Debt Service Reserve Account, equals fifty percent (50%) of the
      then-current Debt Service Reserve
Requirement;

              

      

    

     

    
      
        	
              	
                (ii) 

              	
                second, to the
      Borrowers for the payment of any remaining Project
  Costs;

              

      

    

     

    
      
        	
              	
                (iii) 

              	
                third, to
      Pacific Ethanol, the amount of any Sponsor Support Reimbursement Funding
      requested to be made on the Conversion
Date;

              

      

    

     

    
      
        	
              	
                (iv) 

              	
                fourth, to
      Pacific Ethanol, an amount equal to the aggregate amount of (A) all
      Greenfield Plant Top-Up Fundings that have not been utilized to fund
      Required Equity Contributions or Project Costs plus
      (B) all undisbursed Excess Construction Loan Commitments; provided, that
      after giving effect to any Construction Loan Fundings made on the
      Conversion Date and any payments under this Section 2.06(e)(iii)
      the total aggregate amounts disbursed under the Construction Loans and the
      Aggregate Working Capital Loan Commitment does not exceed sixty-five
      percent (65%) of the aggregate actual and documented Project Costs
      for all Greenfield Plants that have achieved their respective Commercial
      Operation Dates and with respect to which any funding has been made;
      and

              

      

    

     

    
      
        	
              	
                (v) 

              	
                fifth,
      remaining amounts (if any) on deposit in or standing to the credit of any
      Construction Account, to the Revenue
Account.

              

      

    

     

    Section
2.07 Evidence of
Indebtedness.  (a) 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 and any other accounts and
records maintained pursuant to Section 2.07(a),
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), in the case of the
Construction Loans and the Working Capital Loans, and dated the Conversion Date
(or, if later, the date of any such request), in the case of the Term Loans,
payable to the order of such Lender in a principal amount equal to such Lender's
Tranche B Construction Loan Commitment, Tranche A Construction Loan Commitment,
Working Capital Loan Commitment, Tranche A Term Loan Commitment or
Tranche B Term 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.

     

    
      
        
        

      

      
        13

        
          

        

      

      
        
        

      

    

     

    Section
2.08 Termination or Reduction of
Commitments.  (a)  Any unused Construction Loan
Commitments shall be automatically and permanently terminated on the earlier to
occur of the Conversion Date and the Conversion Date Certain, in each case after
giving effect to all Construction Loans, if any, to be made on such
day.

     

    (b) Any
unused Term Loan Commitments shall be automatically and permanently terminated
on the earlier to occur of the Conversion Date and the Conversion Date Certain,
in each case after giving effect to all Term Loans, if any, to be made on such
day.

     

    (c) The
Construction Loan Commitments, the Term Loan Commitments and the Working Capital
Loan Commitments shall be automatically and permanently terminated in full, and
any amounts on deposit in or standing to the credit of the Escrow Account shall
be released and reimbursed to the Tranche B Lenders, if the First Escrow Release
Date has not occurred on or before December 31, 2007.

     

    (d) If each
of the In-Progress Plant 1 Construction Loan Funding Date and the
In-Progress Plant 2 Construction Loan Funding Date has not occurred on or
before December 31, 2007 or, if earlier, either of Boardman or Madera is
released pursuant to Section 7.04
(Release
of Borrower), all unused
Construction Loan Commitments, all Term Loan Commitments (other than an amount
of the Term Loan Commitments equal to any Construction Loans then outstanding)
and all unused Working Capital Loan Commitments (other than the Working Capital
Plant Commitment for any Plant whose Loans have been funded) shall be
automatically and permanently terminated in full and all funds on deposit in or
standing to the credit of the Escrow Account shall be released and reimbursed to
the Tranche B Lenders.

     

    (e) In the
event that any Plant achieves its Commercial Operation Date and fails to meet
such Plant's Performance Guarantee, both the Construction Loan Commitments for
such Plant and the Term Loan Commitments shall be automatically and permanently
reduced on the Commercial Operation Date for such Plant in the amounts required
in accordance with Schedule 2.08(e).

     

    (f) The
Working Capital Loan Commitments shall be automatically and permanently
terminated on the applicable Working Capital Maturity Date (with respect to each
applicable Working Capital Lender).

     

    (g) In the
event of any prepayment of the Construction Loans pursuant to Section 3.09
(Optional
Prepayment) or Section 3.10
(Mandatory
Prepayment), or any termination
of Construction Loan Commitments pursuant to Section 2.08(j),
the Term Loan Commitments shall be automatically and permanently reduced in an
amount equal to such prepayment.

     

    
      
        
        

      

      
        14

        
          

        

      

      
        
        

      

    

     

    (h) In the
event that all Construction Loan Commitments and Term Loan Commitments have been
cancelled or terminated in full and all outstanding Construction Loans and Term
Loans have been repaid in full, the Working Capital Loan Commitments of each
Working Capital Lender shall be automatically and permanently terminated in full
upon written notice of such Working Capital Lender delivered to the
Administrative Agent and the Borrowers' Agent within ninety (90) days following
such occurrence.

     

    (i) Any
unused Construction Loan Commitments, Term Loan Commitments and Working Capital
Loan Commitments shall be terminated, and any amounts on deposit in or standing
to the credit of the Escrow Account shall be released and reimbursed to the
Tranche B Lenders, upon the occurrence of an Event of Default if and to the
extent required pursuant to Section 9.02
(Action
upon Bankruptcy) or Section 9.03
(Action
Upon Other Event of Default) in accordance with
the terms thereof.

     

    (j) In the
event of a release of any Borrower in accordance with Section 7.04
(Release
of Borrower), all Construction
Loan Commitments with respect to such Borrower's Plant, and Working Capital Loan
Commitments in the amount equal to the Working Capital Plant Commitment for each
such Plant that has been released shall, on the date of such release, be
automatically and permanently terminated in full.

     

    (k) If, on
the Conversion Date, any amounts are released and reimbursed to the
Tranche B Lenders from the Escrow Account, the Tranche B Term Loan
Commitments shall be automatically and permanently reduced in an amount equal to
such reimbursement.

     

    Section
2.09 Tranche
Reallocation.  (a) At any time, and from time to time,
until the earlier to occur of (x) the date that is six (6) months from the date
of this Agreement and (y) the Business Day immediately following the date
of the Funding Notice for In-Progress Plant 2, any Tranche Reallocation Eligible
Lender may, by delivery of a Tranche Conversion Notice to the Administrative
Agent and the Borrowers' Agent, convert all or any of its Tranche Reallocation
Eligible Commitments that are Tranche A Commitments to Tranche B
Commitments.  Any conversion of Tranche Reallocation Eligible
Commitments made pursuant to this Section 2.09 shall be
in a minimum amount of two million five hundred thousand Dollars ($2,500,000)
(or, if less, the aggregate total amount of all Tranche Reallocation Eligible
Commitments of any single Tranche Reallocation Eligible Lender).

     

    (b) Any
conversion described in Section 2.09(a)
shall become effective on the date that is five (5) Business Days from such
notice (or, if earlier, the Funding Date for In-Progress Plant 2) (each
such date, a "Tranche
Conversion Date").

     

    (c) On the
Tranche Conversion Date (provided that no Default or Event of Default has
occurred and is continuing (and has not been waived by the Required Lenders)),
the applicable Tranche Reallocation Eligible Lender shall fund such converted
Loans to the Escrow Account in accordance with the funding procedures set forth
in Section 2.06
(Funding
of Loans).  If a
Default or Event of Default has occurred and is continuing (and has not been
waived by the Required Lenders) on such Tranche Conversion Date, the funding of
such converted Loans described in this Section 2.09(c)
shall occur on the fifth (5th)
Business Day following receipt by the applicable Tranche Reallocation Eligible
Lender of written notice confirming that no Default or Event of Default is then
continuing.

     

    
      
        
        

      

      
        15

        
          

        

      

      
        
        

      

    

     

    (d) Each
Tranche B Construction Loan funded pursuant to this Section 2.09 on
a Funding Date shall bear interest as a Eurodollar Loan or Base Rate Loan, and
have an initial Interest Period, in each such case as specified in the
applicable Funding Notice.  Each Tranche B Construction Loan
funded pursuant to this Section 2.09 on
a date that is not a Funding Date shall bear interest as a Eurodollar Loan or
Base Rate Loan, and have an initial Interest Period, in each such case as
specified in an Interest Period Notice delivered with respect to such
Tranche B Construction Loan in accordance with Section 3.05
(Interest
Periods)
or, if no such Interest Period Notice is delivered, shall bear interest as a
Base Rate Loan.

     

    (e) In the
event that any Tranche Reallocation Eligible Lender has previously received a
Note with respect to its Tranche Reallocation Eligible Commitment, on any
Tranche Conversion Date applicable to such Commitments, at the request of such
Lender, replacement Notes shall be issued reflecting such
conversion.

     

    Section
2.10 Additional Greenfield
Plant.  The Borrowers and the Lenders acknowledge that the
Borrowers may (but shall not be obligated to), in the future, request that the
Lenders consider making available an additional senior loan to finance the
construction of an additional ethanol facility to be owned and operated by a
wholly-owned Subsidiary of Pacific Holding subject to (a) the satisfaction
of all due diligence inquiries of each Lender, (b) the prior written
approval of all of the Lenders, and (c) the execution and delivery of all
amendments to the then-existing Financing Documents and all additional financing
documents as the Lenders may require.  The Borrowers acknowledge and
agree that this Section 2.10
does not constitute a commitment or obligation on the part of any Lender to
provide funding for any such additional ethanol facility.

     

    ARTICLE
III

     

    REPAYMENTS,
PREPAYMENTS, INTEREST AND FEES

     

    Section
3.01 Repayment of Construction
Loan Fundings.  The Construction Loans shall be repaid in full
on the Conversion Date with the proceeds of the Term Loans.

     

    Section
3.02 Repayment of Term Loan
Fundings.  (a)  The Borrowers unconditionally and
irrevocably promise to pay to the Administrative Agent for the ratable account
of each applicable Construction/Term Lender the aggregate outstanding principal
amount of the Term Loans on the Initial Quarterly Payment Date and on each
Quarterly Payment Date thereafter, in an amount equal to (i) in the case of
the Tranche A Term Loans, one and one-half percent (1.5%) of the aggregate
total amount of the Tranche A Term Loans made on the Conversion Date and
(ii) in the case of the Tranche B Term Loans, one and one-half percent
(1.5%) of the aggregate total amount of the Tranche B Term Loans made on
the Conversion Date (which amounts shall, in each such case, be reduced as a
result of any prepayments of the Term Loans made in accordance with Section 3.09
(Optional
Prepayment) or Section 3.10
(Mandatory
Prepayment) in accordance with
the terms set forth therein and shall be reduced as a result of any reduction in
the Term Loan Commitments pursuant to Section 2.08(b),
(i) or (k)(Termination
or Reduction of Commitments) on a pro rata
basis):

     

    (b) Notwithstanding
anything to the contrary set forth in Section 3.02(a),
the final principal repayment installment on the Final Maturity Date shall in
any event be in an amount equal to the aggregate principal amount of all Term
Loans outstanding on such date.

     

    
      
        
        

      

      
        16

        
          

        

      

      
        
        

      

    

     

    Section
3.03 Repayment of Working Capital
Loan Fundings.  The Borrowers unconditionally and irrevocably
promise to pay in full to the Administrative Agent, for the ratable account of
each Working Capital Lender, the aggregate outstanding principal amount of the
Working Capital Loans on the Working Capital Maturity Date.

     

    Section
3.04 Interest Payment
Dates.  (a) Interest accrued on each Loan shall be
payable, without duplication:

     

    
      
        	
              	
                (i) 

              	
                on
      the Maturity Date for such
Loan;

              

      

    

     

    
      
        	
              	
                (ii) 

              	
                with
      respect to Eurodollar Loans, the last day of each applicable Interest
      Period (and, if such Interest Period exceeds three months, on the day
      three months after such Eurodollar Loan is made or continued) 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 Quarterly 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 Loan, on any date when such Loan is prepaid
      hereunder.

              

      

    

     

    (b) 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 Quarterly
Payment Date, any Interest Payment Date, upon acceleration or otherwise) shall
be payable upon demand.

     

    (c) 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 pendancy of an
Insolvency Proceeding.

     

    Section
3.05 Interest
Rates.  (a) Pursuant to each properly delivered Funding
Notice and Interest Period 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 and (ii) each Base Rate Loan shall accrue interest at a
rate per annum during each Quarterly Period equal to the sum of the Base Rate
for such Quarterly Period plus the Applicable Margin.

     

    
      
        
        

      

      
        17

        
          

        

      

      
        
        

      

    

     

    (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 Quarterly
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 and setting forth the Borrowers' election with
respect to the duration of the next Interest Period applicable to such continued
or converted Eurodollar Loan, which Interest Period shall be one (1), two (2),
three (3) or six (6) months in length 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 3.05(b)
with respect to any Eurodollar Loan, such Eurodollar Loan shall automatically
continue as a Eurodollar Loan with an Interest Period of one
(1) month.

     

    (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 seven (7) separate Eurodollar Loans outstanding at any one time prior to
the Conversion Date or four (4) separate Eurodollar Loans outstanding at
any one time after the Conversion Date.  For purposes of the
foregoing, (i) Eurodollar Loans having different Interest Periods,
regardless of whether they commence on the same date, shall be considered
separate Eurodollar Loans and (ii)  all Eurodollar Loans having the same
Interest Period and commencing on the same date shall be considered to be a
single Eurodollar Loan.

     

    (f) All Base
Rate Loans shall bear interest from and including the first day of each
Quarterly Period (or the day on which Eurodollar Loans are converted to Base
Rate Loans as required under Section 3.05(b)
or under Article IV
(Eurodollar
Rate and Tax Provisions)) to (and including)
the next succeeding Quarterly Payment Date at the interest rate determined as
applicable to such Base Rate Loan.

     

    Section
3.06 Default Interest
Rate.  If all or a portion of (i) the principal amount of
any Loan is not paid when due (whether on the Maturity Date for such Loan, 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 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).

     

    
      
        
        

      

      
        18

        
          

        

      

      
        
        

      

    

     

    Section
3.07 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
3.08 Computation of Interest and
Fees.  (a)  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
3.09 Optional
Prepayment.  (a)  The Borrowers shall have the right
at any time, and from time to time, to prepay the Loans, in whole or in part,
upon not fewer than three (3) Business Days' prior written notice to the
Administrative Agent; provided, that any
optional prepayment prior to the Conversion Date shall be subject to receipt by
the Administrative Agent of satisfactory evidence, certified by the Borrowers
and confirmed by the Independent Engineer, that sufficient funds will be
available to achieve the Commercial Operation Date for each Plant with respect
to which Commitments remain outstanding.

     

    (b) Any
partial prepayment of the Loans shall be in a minimum amount of five hundred
thousand Dollars ($500,000) and in integral multiples of one hundred thousand
Dollars ($100,000) in excess thereof.

     

    (c) Each
notice of prepayment given by the Borrowers under this Section 3.09
shall specify the prepayment date, the portion of the principal amount of the
Loans to be prepaid and whether such prepayment shall be applied to Construction
Loans or Term Loans and/or Working Capital Loans.  All prepayments
under this Section 3.09
shall be made by the Borrowers to the Administrative Agent for the account of
the applicable 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).

     

    
      
        
        

      

      
        19

        
          

        

      

      
        
        

      

    

     

    (d) Amounts
of principal prepaid under this Section 3.09
shall:

     

    
      
        	
              	
                (i) 

              	
                in
      the case of prepayments on the Construction Loans, be allocated by the
      Administrative Agent pro rata between
      the Tranche A Loans and the Tranche B Loans based on their
      respective outstanding principal amounts on the date of such prepayment
      (and then pro rata between
      the In-Progress Plant 1 Construction Loans, In-Progress Plant 2
      Construction Loans, Greenfield Plant 1 Construction Loans, Greenfield
      Plant 2 Construction Loans and Greenfield Plant 3 Construction
      Loans of such Tranche then
outstanding);

              

      

    

     

    
      
        	
              	
                (ii) 

              	
                in
      the case of partial prepayments on the Term Loans, be applied by the
      Administrative Agent pro rata between
      the Tranche A Loans and the Tranche B Loans based on their
      respective outstanding principal amounts on the date of such prepayment
      (and then on a pro rata basis to
      the remaining outstanding installments of principal of the Term Loans of
      each such Tranche); and

              

      

    

     

    
      
        	
              	
                (iii) 

              	
                in
      the case of any prepayment of the Working Capital Loans, shall be applied
      (A) first, to repay
      outstanding amounts of the Working Capital Loans and (B) second, at the
      Borrowers' option, to reduce the Working Capital Loan Commitment by
      depositing an amount equal to such reduction in the Working Capital
      Reserve Account.

              

      

    

     

    (e) Any
optional prepayment of Tranche B Loans (i) on or prior to the first
anniversary of the Conversion Date shall be made at one hundred two percent
(102%) of the principal amount of the Tranche B Loans being prepaid at such
time; (ii) after the first anniversary of the Conversion Date and until the
second anniversary of the Conversion Date, shall be made at one hundred one
percent (101%) of the principal amount of the Tranche B Loans being prepaid
at such time; and (iii) thereafter, any optional prepayment of the
Tranche B Loans  shall be made without penalty or
premium.

     

    (f) Amounts
prepaid pursuant to this Section 3.09
(other than pursuant to Section 3.09(d)(iii)(A))
may not be reborrowed.

     

    
      
        
        

      

      
        20

        
          

        

      

      
        
        

      

    

     

    Section
3.10 Mandatory
Prepayment.  (a)  The Borrowers shall be required to
prepay the Loans:

     

    
      
        	
              	
                (i) 

              	
                upon
      receipt by any of the Borrowers of Insurance Proceeds, as required
      pursuant to Sections 8.14(d)(ii)
      and (e) (Insurance
      and Condemnation Proceeds
Accounts);

              

      

    

     

    
      
        	
              	
                (ii) 

              	
                upon
      receipt by any of the Borrowers of Condemnation Proceeds, as required
      pursuant to Sections 8.14(d)(ii)
      and (e) (Insurance
      and Condemnation Proceeds
Accounts);

              

      

    

     

    
      
        	
              	
                (iii) 

              	
                upon
      receipt of any Project Document Termination Payments, as required pursuant
      to Section 8.14(d)(ii)
      (Extraordinary
      Proceeds Account);
      and

              

      

    

     

    
      
        	
              	
                (iv) 

              	
                upon
      receipt of proceeds of any asset disposal (other than proceeds received
      from the sale of Products) that are not used for replacement in accordance
      with Section 7.02(f)
      (Negative
      Covenants - Asset Dispositions), as required pursuant to Section 8.14(c)(ii)
      (Extraordinary
      Proceeds Account).

              

      

    

     

    (b) The
Borrowers shall be required to prepay the Term Loans and the Working Capital
Loans:

     

    
      
        	
              	
                (i) 

              	
                on
      each Quarterly Payment Date, as required pursuant to Sections 8.08(c)(xi)
      and (xiii) (Revenue
      Account);
      provided,
      that such amounts will be applied first to the Tranche A Term Loans
      (until all amounts outstanding under the Tranche A Term Loans have
      been paid in full) and then to the Tranche B Term Loans;
      and

              

      

    

     

    
      
        	
              	
                (ii) 

              	
                on
      any Quarterly Payment Date, if the Historical Debt Service Coverage Ratio
      on such Quarterly Payment Date is less than 1.5:1, as required pursuant to
      Section 8.08(c)(xiv)
      (Revenue Account) and Section 8.13(b)(ii)
      (Prepayment
      Holding Account).

              

      

    

     

    
      
        
        

      

      
        21

        
          

        

      

      
        
        

      

    

     

    (c) If at any
time after any Plant has achieved its Commercial Operation Date a Borrowing Base
Certificate demonstrates that the then-outstanding principal amount of the
Working Capital Loans exceeds the then-effective Aggregate Working Capital
Commitment or the then-applicable Working Capital Loan Availability, then the
Borrowers shall, within three (3) Business Days following the delivery of such
Borrowing Base Certificate, prepay the Working Capital Loans in the amount of
such excess.

     

    (d) All
prepayments under this Section 3.10
shall be made by the Borrowers to the Administrative Agent for the account of
the applicable 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).

     

    (e) Amounts
of principal prepaid under this Section 3.10
(other than pursuant to Section 3.10(c))
shall be allocated by the Administrative Agent:

     

    
      
        	
              	
                (i) 

              	
                in
      the case only of prepayment made pursuant to Section 3.10(a)
      prior to the Conversion Date, first, pro rata between
      the Tranche A Loans and the Tranche B Loans based on their
      respective outstanding principal amounts on the date of such prepayment
      (and then pro rata between
      the In-Progress Plant 1 Construction Loans, the In-Progress
      Plant 2 Construction Loans, the Greenfield Plant 1 Construction
      Loans, the Greenfield Plant 2 Construction Loans and the Greenfield
      Plant 3 Construction Loans of each such Tranche then outstanding),
      second,
      in an amount equal to the Maximum Available Amounts under all Letters of
      Credit then outstanding, to a sub-account of the Working Capital Reserve
      Account as cash collateral to secure the repayment of any Working Capital
      Loans that may result from a draw on any such Letter of Credit, third, to the
      outstanding principal amount of the Working Capital Loans, and fourth, all
      remaining amounts shall be deposited into the Working Capital Reserve
      Account (up to an amount such that following such deposit, the Working
      Capital Reserve Account is fully funded to the then-current Working
      Capital Reserve Required Amount);
or

              

      

    

     

    
      
        	
              	
                (ii) 

              	
                in
      the case of a prepayment made after the Conversion Date, first, to the
      Term Loans (except as otherwise provided in Section 3.10(b)(i))
      pro rata between
      the Tranche A Loans and the Tranche B Loans based on their
      respective outstanding principal amounts on the date of such prepayment
      and, in the event of a partial prepayment of the Term Loans, to the
      remaining outstanding installments of principal of the Term Loans of each
      Tranche in inverse order of maturity, second, in an
      amount equal to the Maximum Available Amounts under all Letters of Credit
      then outstanding, to the Working Capital LC Collateral Sub-Account as cash
      collateral to secure the repayment of any Working Capital Loans that may
      result from a draw on any such Letter of Credit, third, to the
      outstanding principal amount of the Working Capital Loans, and fourth, all
      remaining amounts shall be deposited in the Working Capital Reserve
      Account (up to an amount such that following such deposit, the Working
      Capital Reserve Account is fully funded to the then-current Working
      Capital Reserve Required
Amount).

              

      

    

     

    
      
        
        

      

      
        22

        
          

        

      

      
        
        

      

    

     

    (f) Amounts
prepaid pursuant to this Section 3.10
(other than with respect to the Working Capital Loans) may not be
reborrowed.

     

    Section
3.11 Time and Place of
Payments.  (a)  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, 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.

     

    Section
3.12 Fundings and Payments
Generally.  (a) 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 3.12(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.

     

    (c) The
Borrowers hereby authorize each Lender, if and to the extent payment owed to
such Lender is not made when due under this Agreement or under the Notes held by
such Lender, to charge from time to time against any or all of any Borrower's
accounts with such Lender (other than, in the event that the Account Bank is
also a Lender, any Project Account) any amount so due.

     

    
      
        
        

      

      
        23

        
          

        

      

      
        
        

      

    

     

    Section
3.13 Fees.  (a)  From
and including the date hereof until the Construction Loan Maturity Date, the
Borrowers agree to pay to the Administrative Agent, for the account of the
applicable Lenders, on each Quarterly Payment Date, a commitment fee (a "Commitment Fee")
equal to one-half of one percent (0.50%) per annum on (i) the average
daily amount by which the Aggregate Tranche Commitment for Tranche A
Construction Loans exceeds the outstanding amount of the Tranche A
Construction Loans and (ii) the average daily amount by which the Aggregate
Working Capital Loan Commitment exceeds the sum of (x) the outstanding
amount of Working Capital Loans plus (y) the
Stated Amounts of all outstanding Letters of Credit, in each case, during the
calendar quarter or portion thereof then ended.  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 quarter, as
applicable.

     

    (b) Upon the
issuance of each Letter of Credit pursuant to Section 2.04
(Letters
of Credit) and until the termination, cancellation or expiration of such
Letter of Credit, the Borrowers agree to pay to the Administrative Agent, on
each Quarterly Payment Date and on the date on which such Letter of Credit
expires, is cancelled or terminates, (i) for the account of the Working
Capital Lenders, an availability fee (the "Letter of Credit
Availability Fee") at a rate per annum equal to the Working Capital
Applicable Margin for Eurodollar Loans on the average daily Maximum Available
Amount under such Letter of Credit during the calendar quarter or portion
thereof then ended and (ii) for the account of the Issuing Bank, a fronting
fee (the "Letter of
Credit Fronting Fee") equal to the greater of (x) fifteen hundred
Dollars ($1,500) or (y) an amount calculated at a rate per annum equal to
fifteen-hundredths of one percent (0.15%) of the average daily Maximum
Available Amount under such Letter of Credit during the calendar quarter or
portion thereof then ended.  All Letter of Credit Availability Fees
and Letter of Credit Fronting Fees shall be computed on the basis of the actual
number of days elapsed in a year of 360 days, as pro-rated for any partial
quarter, as applicable.

     

    (c) Each
Borrower agrees to pay to the Administrative Agent for the account of the Lead
Arrangers, the Lenders and the Agents, additional fees in the amounts and at the
times from time and time agreed to in writing by the Borrowers and the
Administrative Agent, including pursuant to the Fee Letters.

     

    (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
3.14 Pro Rata
Treatment.  (a) Except as otherwise expressly provided
herein (including Section 4.01
(Eurodollar
Rate Lending Unlawful), Section 2.08 (Termination
or Reduction of Commitments) and Section 2.09
(Tranche
Reallocation)), each Funding of Tranche A
Loans and Tranche B Loans, each Tranche B Escrow Disbursement and each reduction
of commitments of any type, shall be allocated by the Administrative Agent as
set forth below:

     

    
      
        	
              	
                (i) 

              	
                first,
      (A) in the case of any Funding or the Tranche B Escrow
      Disbursement, to the Tranche B Loans (until such amounts have been
      fully funded) and then to the Tranche A Loans or (B) in the case
      of any reduction, pro rata between
      the Tranche A Loans and the Tranche B Loans related to such reduction;
      and

              

      

    

     

    
      
        	
              	
                (ii) 

              	
                second, pro rata among the
      applicable Tranche A Lenders and Tranche B Lenders, as the case may be, in
      accordance with their respective applicable Commitment
      Percentages.

              

      

    

     

    
      
        
        

      

      
        24

        
          

        

      

      
        
        

      

    

     

    (b) Except as
required under Section 3.09
(Optional
Prepayment), Section 3.10
(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 and/or the Letters of
Credit 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 or the
Tranche B Escrow Disbursement or any Tranche B Conversion Disbursement
to be made hereunder, the Administrative Agent may, in its discretion, round
each Lender's percentage of such Funding or the Tranche B Escrow
Disbursement or Tranche B Conversion Disbursement, as the case may be, to
the next higher or lower whole Dollar amount.

     

    Section
3.15 Sharing of
Payments.  (a)  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 3.15 may, to
the fullest extent permitted by law, exercise all its rights of payment
(including pursuant to Section 11.15 (Rights
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 3.15 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 3.15 to share in the
benefits of any recovery on such secured claim.

     

    
      
        
        

      

      
        25

        
          

        

      

      
        
        

      

    

     

    Section
3.16 Termination of Interest Rate
Protection Agreement in Connection with Any Prepayment.  The
Borrowers shall, in connection with any prepayment made by the Borrowers
pursuant to Section 3.09
(Optional
Prepayment) or Section 3.10
(Mandatory
Prepayment), terminate an
aggregate notional amount under the Interest Rate Protection Agreements equal to
the amount (if any) by which the aggregate notional amount under the Interest
Rate Protection Agreements would exceed the aggregate outstanding principal
amount of the Construction Loans or Term Loans, as the case may be, immediately
after giving effect to such prepayment; and in each case, such termination shall
be made within five (5) Business Days of the date of such prepayment (or, to the
extent that the aggregate notional amount under the Interest Rate Protection
Agreements exceeds the aggregate outstanding principal of the Construction Loans
or the Term Loans, as applicable, by no more than ten percent (10%), within
thirty (30) days following such prepayment).  The amount of any Swap
Termination Value due in respect of the Interest Rate Protection Agreements
terminated in accordance with the immediately foregoing sentence shall be made
by the Borrowers from amounts available with which to make such
prepayment.

     

    ARTICLE
IV

     

    EURODOLLAR
RATE AND TAX PROVISIONS

     

    Section
4.01 Eurodollar Rate Lending
Unlawful.  (a) 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.

     

    
      
        
        

      

      
        26

        
          

        

      

      
        
        

      

    

     

    Section
4.02 Inability to Determine
Eurodollar Rates.  (a) 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 Quarterly Period in accordance with
this Agreement.

     

    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.

     

    
      
        
        

      

      
        27

        
          

        

      

      
        
        

      

    

     

    Section
4.04 Obligation to
Mitigate.  (a)  Each Lender agrees after it becomes
aware of the occurrence of an event that would entitle it to give notice
pursuant to Section 4.0l
(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 3.09
(Optional
Prepayment), 3.10 (Mandatory
Prepayment), 4.01(a) Eurodollar
Rate Lending Unlawful) or otherwise or (b) the Borrowers failing to
make a Funding or the Tranche B Escrow Disbursement 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.

     

    
      
        
        

      

      
        28

        
          

        

      

      
        
        

      

    

     

    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.

     

    
      
        
        

      

      
        29

        
          

        

      

      
        
        

      

    

     

    (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.

     

    (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).

     

    
      
        
        

      

      
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    ARTICLE
V

     

    REPRESENTATIONS
AND WARRANTIES

     

    In order
to induce each Agent, each Lender and each other party hereto (other than the
Borrowers and the Borrowers' Agent) 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
Issuance Request, on each Funding Date and on the Conversion 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)).

     

    Section
5.01 Organization; Power and
Compliance with Law.  Each of the Borrowers (a) is a
limited liability company duly formed, validly existing and in good standing
under the laws of the State of Delaware, (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 as a foreign limited liability company 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) has all
requisite limited liability company 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.  The execution, delivery and performance by
each of the Borrowers of each Transaction Document to which it is a party are
within such Borrower's limited liability company powers, have been duly
authorized by all necessary limited liability company action, and do
not:

     

    (a) contravene
such Borrower's Organic Documents (including its Borrower LLC
Agreement);

     

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

     

    (c) with
respect to Pacific Holding or any other Borrower with respect to whose Plant a
Funding has been made or is being requested, (i) in the case of any
Financing Document, contravene any Contractual Obligation binding on or
affecting such Borrower or (ii) in the case of any Project Document,
contravene any Contractual Obligation binding on or affecting such Borrower
(other than in the case of this Section 5.02(c)(ii)
any contravention which could not reasonably be expected to have a Material
Adverse Effect);

     

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

     

    
      
        
        

      

      
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    (e) with
respect to Pacific Holding or any other Borrower with respect to whose Plant a
Funding has been made or is being requested, 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 (and, in the case only
of the execution, delivery and performance of the Project Documents, any other
approvals or consents the failure of which to obtain could not reasonably be
expected to have a Material Adverse Effect); 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.  The representations and warranties made in this
Section 5.03
shall apply only on and after the Closing Date and then only with respect to
Pacific Holding and each other Borrower with respect to whose Plant a Funding
has been made or is being requested.

     

    (a) 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 Borrowers and the Pledgor of the Liens granted under the Security
Documents 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) As of the
initial Funding Date for each Plant:

     

    
      
        	
              	
                (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 the applicable Plant as contemplated by the Transaction
      Documents (together with the Governmental Approvals described in Section 5.03(a)
      the "Necessary
      Project Approvals"), are listed on the Governmental Approvals
      Update Schedule for such
Plant;

              

      

    

     

    
      
        	
              	
                (ii) 

              	
                the
      Necessary Project Approvals listed in Part A of each
      applicable Governmental Approvals Update Schedule have been obtained, are
      in full force and effect, are properly in the name of the appropriate
      Person, are final and
Non-Appealable;

              

      

    

     

    
      
        	
              	
                (iii) 

              	
                the
      Necessary Project Approvals listed on Part B of each
      applicable Governmental Approvals Update Schedule are not required under
      applicable Laws to be obtained prior to the initial Funding Date for such
      Plant (collectively, the "Deferred
      Approvals") and have not yet been
      obtained;  and

              

      

    

     

    
      
        
        

      

      
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                (iv) 

              	
                Part B of each
      applicable Governmental Approvals Update Schedule specifies the date by
      which, or stage of construction or operation for which, each Deferred
      Approval included therein is required to be
  obtained.

              

      

    

     

    (c) On each
Funding Date after the initial Funding Date of a Plant, (i) 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, and (ii) all Deferred
Approvals which as of such Funding Date are required to be obtained, have been
obtained, are in full force and effect, are properly in the name of the
appropriate Person, and are final and Non-Appealable (except as set forth on
Part C of
each applicable Governmental Approvals Update Schedule).

     

    (d) For the
avoidance of doubt, the Borrowers' right to provide Governmental Approvals
Update Schedules includes the right to update such schedules to correct any
reference to a Governmental Approval that has been replaced in accordance with
applicable Law.

     

    (e) 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 that has been obtained as of the date this
representation is made or deemed repeated 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
issuance or continued effectiveness of such Necessary Project Approval (except,
with respect to continued effectiveness, for Necessary Project Approvals that
are subject to a supplemental filing shown on Part B of any
applicable Governmental Approvals Update Schedule that has not yet been filed),
and none of the Borrowers has any knowledge of any event, act, condition or
state of facts inconsistent with such information (except, in each case, for
such inaccuracies and omissions as could not reasonably be expected to result in
a material delay to the issuance of any Necessary Project Approval or as could
not otherwise be expected to have a Material Adverse Effect with respect to the
relevant Plant).

     

    (f) The
Borrowers reasonably believe that each Necessary Project Approval that remains
to be obtained will be obtained in a final and Non-Appealable form in the
ordinary course without undue delay or material expense and without
unanticipated expensive or burdensome conditions prior to the time it is
required to be obtained under applicable Law.

     

    
      
        
        

      

      
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    Section
5.04 Investment Company
Act.  None of the Borrowers is, and after giving effect to the
Loans and the application of the proceeds of the Loans as described herein none
of the Borrowers 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, except as the
enforceability hereof or thereof may be limited by (a) bankruptcy,
insolvency, reorganization, or other similar laws affecting the enforcement of
creditors' rights generally and (b) general equitable principles (whether
considered in a proceeding in equity or at law).

     

    Section
5.06 Financial
Information.  Each of the financial statements of Pacific
Holding delivered pursuant to Section 6.01(h)
(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 No Material Adverse
Effect.  Since September 30, 2006 no Material Adverse
Effect has occurred and is continuing.

     

    Section
5.08 Project
Compliance.  (a) Each Plant with respect to which a Funding has
been made or is being requested is and will continue to be owned, developed,
constructed and maintained in material compliance with all applicable Laws and
the requirements of all Necessary Project Approvals.

     

    (b) Each
Plant with respect to which a Funding has been made or is being requested is and
will continue to be owned, developed, constructed 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 and the Borrower's right to replace Project
Documents as set forth in Section 9.01(j)
(Events
of Default - Project Document Defaults; Termination)) (except, 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).

     

    
      
        
        

      

      
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    Section
5.09 Litigation.  (a) No
action, suit, proceeding or investigation has been instituted or threatened
against any of Pacific Holding, the Pledgor, or any Plant or Borrower with
respect to whose Plant any Funding has been made or is being requested
(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 any Plant or Borrower; and

     

    (b) no
action, suit, proceeding or investigation has been instituted or threatened
against any Major Project Party that is party to any Project Document with
Pacific Holding or that relates to any Borrower or Plant with respect to which a
Funding has been made or is being requested that, individually or in the
aggregate, has had or could reasonably be expected to have a Material Adverse
Effect.

     

    Section
5.10 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
5.11 Contracts.  The
representations and warranties made in this Section 5.11
shall apply only on and after the Closing Date and then only with respect to
Pacific Holding and each other Borrower with respect to whose Plant a Funding
has been made or is being requested.  Each reference in this Section 5.11 to Schedule 5.11 shall
be deemed to be a reference to Schedule 5.11, as
updated from time to time by the delivery of any Contract Disclosure
Updates.

     

    (a) As of the
Closing Date, 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 and any Subordinated Debt Agreements
(including all documents amending, supplementing, interpreting or otherwise
modifying or clarifying such agreements and instruments) are listed in Schedule 5.11.

     

    
      
        
        

      

      
        35

        
          

        

      

      
        
        

      

    

     

    (b) As of the
initial Funding Date for each Plant:

     

    
      
        	
              	
                (i) 

              	
                all
      material contracts, agreements, instruments, letters, understandings, or
      other documentation that are required under to be obtained by any Borrower
      in connection with the construction and operation of the applicable Plant
      as contemplated by the Transaction Documents (collectively for all Plants,
      the "Necessary
      Project Contracts"), are listed in Schedule 5.11;

              

      

    

     

    
      
        	
              	
                (ii) 

              	
                the
      Necessary Project Contracts listed in Part A of Schedule 5.11
      have been obtained and are in full force and
  effect;

              

      

    

     

    
      
        	
              	
                (iii) 

              	
                the
      Necessary Project Contracts listed on Part B of Schedule 5.11
      are not required to be obtained prior to the initial Funding Date for such
      Plant (collectively, the "Deferred
      Contracts") and have not yet been
      obtained;  and

              

      

    

     

    
      
        	
              	
                (iv) 

              	
                Part B of Schedule 5.11
      specifies the date by which, or stage of construction or operation for
      which, each Deferred Contract included therein is required to be
      obtained.

              

      

    

     

    (c) On each
Funding Date after the initial Funding Date of a Plant, (i) all Necessary
Project Contracts are in full force and effect (other than any such failures
which are not material to such Plant), and (ii) all Deferred Contracts which as
of such Funding Date are required to be obtained, have been obtained and are in
full force and effect (other than any such failures which are not material to
such Plant).

     

    (d) Nothing
herein shall limit the Borrowers' right to replace or substitute contracts,
agreements, instruments, letters, understandings, or other documentation to the
extent permitted by this Agreement (and Schedule 5.11 shall
be automatically updated to reflect any such replacement or
substitution).

     

    
      
        
        

      

      
        36

        
          

        

      

      
        
        

      

    

     

    (e) The
following representations and warranties shall apply on and after the Closing
Date and only with respect to Pacific Holding and each other Borrower with
respect to whose Plant a Funding has been made or is being
requested:

     

    
      
        	
              	
                (i) 

              	
                To
      the knowledge of each Borrower, all representations, warranties and other
      factual statements made by each Project Party in each of the Project
      Documents to which such Project Party is a party are true and correct as
      of the date(s) made or deemed repeated (other than any such inaccuracies
      that could not reasonably be expected to have a Material Adverse Effect on
      the relevant Plant).

              

      

    

     

    
      
        	
              	
                (ii) 

              	
                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 5.11,
      and (iii) any other agreements permitted by this
      Agreement.

              

      

    

     

    
      
        	
              	
                (iii) 

              	
                There
      have been no Change Orders under any Construction Contract for any
      Greenfield Plant with respect to which a Funding has been made or is being
      requested, other than in accordance with Section 7.02(m)(ii)
      (Negative
      Covenants - Change Orders).

              

      

    

     

    
      
        	
              	
                (iv) 

              	
                All
      conditions precedent to the obligations of the respective parties under
      the Project Documents that have been executed as of the date this
      representation is made or deemed repeated have been satisfied or waived by
      the parties thereto except for such conditions precedent that do not and
      cannot be satisfied until a later stage of development of the relevant
      Plant, and each Borrower has no reason to believe that any such condition
      precedent (other than any condition precedent that can be waived by any
      Borrower without any material adverse result) cannot be satisfied on or
      prior to the commencement of the appropriate stage of development of such
      Plant.

              

      

    

     

    Section
5.12 Collateral.  (a)  On
and after the Closing Date, the Collateral includes all of the Equity Interests
in and all of the tangible and intangible assets of each of Pacific Holding,
Madera and Boardman (except, with respect to all assets, as otherwise provided
in the applicable Security Agreement).  On and after the date of the
initial Stockton Funding, the Collateral includes all of the Equity Interests in
and all of the tangible and intangible assets of Stockton (except, with respect
to all assets, as otherwise provided in the applicable Security
Agreement).  On and after the date of the initial Burley Funding, the
Collateral includes all of the Equity Interests in and all of the tangible and
intangible assets of Burley (except, with respect to all assets, as otherwise
provided in the applicable Security Agreement).  On and after the date
of the initial Brawley Funding, the Collateral includes all of the Equity
Interests in and all of the tangible and intangible assets of Brawley (except,
with respect to all assets, as otherwise provided in the applicable Security
Agreement).

     

    
      
        
        

      

      
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    (b) On and
after the Closing Date (or, with respect to Local Accounts, the initial Funding
Date), the respective Liens and security interests granted to the Collateral
Agent (for the benefit of the Senior Secured Parties) pursuant to the Security
Documents in effect on each date this representation is made or deemed repeated
(i) constitute, as to personal property included in the Collateral, a valid
first-priority security interest in such personal property and
(ii) constitute, as to the Mortgaged Property included in the Collateral, a
valid first-priority Lien of record in the Mortgaged Property, in each case
subject only to Permitted Liens.

     

    (c) The
security interest granted to the Collateral Agent (for the benefit of the Senior
Secured Parties) pursuant to the Security Documents relating to assets of or
equity in Pacific Holding or each other Borrower with respect to whose Plant a
Funding has been made or is being requested in the Collateral consisting of
personal property will be perfected (i) with respect to any property that
can be perfected by filing, upon the filing of UCC financing statements in the
filing offices identified in Schedule 5.12,
(ii) with respect to any Project Account or Local Account Collateral that
can be perfected solely by control, upon execution of this Agreement and the
Blocked Account Agreements and (iii) with respect to any property (if any)
that can be perfected solely by possession, upon the Collateral Agent receiving
possession thereof, and in each case such security interest will be, as to
Collateral perfected under the UCC or otherwise as aforesaid, superior and prior
to the rights of all third Persons now existing or hereafter arising whether by
way of mortgage, lien, security interests, encumbrance, assignment or otherwise,
in each case subject only to Permitted Liens.  On and after the
Closing Date (or, with respect to Local Accounts, the initial Funding Date), all
such action as is necessary has been taken to establish and perfect the
Collateral Agent's rights in and to the Collateral covered by the Security
Documents relating to assets of or equity in Pacific Holding or each other
Borrower with respect to whose Plant a Funding has been made or is being
requested in effect on the date this representation is made or deemed repeated
to the extent the Collateral Agent's security interest can be perfected by
filing, including any recordation, filing, registration, giving of notice or
other similar action.  No filing, recordation, re-filing or
re-recording other than those listed on Schedule 5.12
(as the same may be updated at the written request of the Borrowers' Agent, with
the written agreement of the Administrative Agent, following any change in
applicable law) is necessary to perfect (or maintain the perfection of) the
interest, title or Liens of the Security Documents (to the extent the Collateral
Agent's security interest can be perfected by filing or recording), and on and
as of each relevant date which this representation and warranty is made or
deemed repeated, all such filings or recordings have been made with respect to
each Security Document then in effect.  On and after the Closing Date,
the Borrowers and the Pledgor have properly delivered or caused to be delivered
to the Collateral Agent, or provided the Collateral Agent control of, all
Collateral relating to assets of or equity in Pacific Holding or each other
Borrower with respect to whose Plant a Funding has been made or is being
requested that requires perfection of the Liens and security interests described
above by possession or control.  On and after the Closing Date, all or
substantially all of the Collateral relating to assets of or equity in Pacific
Holding or each other Borrower with respect to whose Plant a Funding has been
made or is being requested (other than the Project Account Collateral, the Local
Account Collateral, certificates, securities, investments, chattel paper, books
and records and general intangibles), including the Mortgaged Property, is or
will (when acquired) be located on the Sites.

     

    
      
        
        

      

      
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    Section
5.13 Ownership of
Properties.  (a)  Madera has a good and valid fee
ownership interest in the Site for the Madera Plant (except as contemplated by
Section 7.02(f)
(Negative
Covenants - Asset Dispositions)).  Boardman
has a good and valid leasehold interest or valid fee ownership in the Site for
the Boardman Plant (except as contemplated by Section 7.02(f)).  On
and after the date of the initial Funding Notice for the Burley Plant, Burley
has a good and valid fee ownership interest in the Site for the Burley Plant
(except as contemplated by Section 7.02(f)).  On
and after the date of the initial Funding Notice for the Brawley Plant, Brawley
has a good and valid fee ownership interest in the Site for the Brawley Plant
(except as contemplated by Section 7.02(f)).  On
and after the date of the initial Funding Notice for the Stockton Plant,
Stockton has a good and valid leasehold interest or valid fee ownership in the
Site for the Stockton Plant (except as contemplated by Section 7.02(f)).

     

    (b) On and
after the Closing Date, (except as contemplated by Section 7.02(f)
(Negative
Covenants - Asset Dispositions)) the Borrowers have
a good and valid ownership interest, leasehold interest, license interest or
other right of use in all other property and assets (tangible and intangible)
included in the Collateral relating to assets of or equity in Pacific Holding
and each other Borrower with respect to whose Plant a Funding has been made or
is being requested (other than the collateral pledged pursuant to the Pacific
Holding Pledge Agreement) under each Security Document that has been executed as
of the date this representation is made or deemed repeated.  Such
ownership interests, leasehold interest, license interest or other rights of use
are and will be, together with any other assets or interests contemplated to be
acquired pursuant to the applicable Construction Budget, sufficient to permit
construction and operation of the Plants with respect to which a Funding has
been made or is being requested by the relevant Borrowers, substantially in
accordance with the Project Documents applicable to each such
Plant.  None of said properties or assets of or equity in Pacific
Holding or any other Borrower with respect to whose Plant a Funding has been
made or is being requested 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 5.09(c)
(Litigation).

     

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

     

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

     

    (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 (other
than any Borrower) and are readily distinguishable from one another (except to
the extent otherwise contemplated by the Transaction Documents).

     

    (f) None of
Pacific Holding or any other Borrower with respect to whose Plant a Funding has
been made or is being requested 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 with the prior written
approval of the Administrative Agent.

     

    
      
        
        

      

      
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    Section
5.14 Taxes.  (a)  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 5.14(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) None of
the Borrowers 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 (including the
Pledgor or any other Affiliate of any Borrower).

     

    Section
5.15 Patents, Trademarks,
Etc.  Pacific Holding and each other Borrower with respect to
whose Plant a Funding has been made or is being requested 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, construction, operation and
maintenance of the Project.

     

    Section
5.16 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
5.17 Property Rights, Utilities,
Supplies Etc.  (a) On and after the Closing Date, all
material property interests, utility services, means of transportation,
facilities and other materials necessary for the development, engineering,
construction, testing, start-up, use and operation of the Project (including, as
necessary, gas, roads, rail transport, electrical, water and sewage services and
facilities) are, or will be when needed, available to each Plant with respect to
which a Funding has been made or is being requested and arrangements in respect
thereof have been made.

     

    (b) There are
no material materials, supplies or equipment necessary for construction and,
from and after the Commercial Operation Date for the respective Plant, operation
or maintenance of each Plant with respect to which a Funding has been made or is
being requested that are not expected to be available at the relevant Site on
commercially reasonable terms consistent with the Construction Schedule and
the Construction Budget, or the Operating Budget, for the respective Plant, as
applicable.

     

    
      
        
        

      

      
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    Section
5.18 No
Defaults.  (a) No Funding Default has occurred and is
continuing.

     

    (b) None of
Pacific Holding or any other Borrower with respect to whose Plant a Funding has
been made or is being requested is in any breach of, or in any default under,
any of such Borrower's Contractual Obligations (other than the Project
Documents) that has had or could reasonably be expected to have a Material
Adverse Effect with respect to such Borrower or Plant).

     

    Section
5.19 Environmental
Warranties.  The following representations and warranties shall
apply on and after the Closing Date and only with respect to Pacific Holding,
each other Borrower with respect to whose Plant a Funding has been made or is
being requested and each such Plant:

     

    (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 (other than any
such communication that the Administrative Agent has agreed in writing is not
materially adverse) 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 against any Borrower.  No Environmental
Affiliate has taken any action or violated any Environmental Law that to the
knowledge of the Borrowers could reasonably be expected to result in an
Environmental Claim.

     

    (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 each
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) none of the Borrowers
knows of any underground storage tanks located or to be located on property
owned or leased by any Borrower except as identified on Schedule 5.19(d)(ii)
(as the same may be updated in writing by the Borrowers' 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.

     

    
      
        
        

      

      
        41

        
          

        

      

      
        
        

      

    

     

    (e) None of
the Borrowers has received any letter or request for information under
Section 104 of the CERCLA, or comparable state laws, and to the knowledge
of the Borrowers, none of the operations of the Borrowers 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
5.20 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 5.20
with such meanings.

     

    Section
5.21 Accuracy of
Information.  (a)  As of the Closing Date, all
factual information heretofore or contemporaneously furnished by or on behalf of
Pacific Holding or any other Borrower with respect to whose Plant a Funding has
been made or is being requested 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 that have been
prepared on a reasonable basis and in good faith by the Borrowers) 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.

     

    (b) As of the
date of the Madera Funding Notice and the Madera Funding Date, all factual
information furnished from and after the Closing Date (including any information
provided in connection with such Funding Notice) by or on behalf of the
Borrowers with respect to Madera or the Madera Plant, in any 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 that have been
prepared on a reasonable basis and in good faith by the Borrowers) 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.

     

    
      
        
        

      

      
        42

        
          

        

      

      
        
        

      

    

     

    (c) As of the
date of the Boardman Funding Notice and the Boardman Funding Date, all factual
information furnished from and after the Closing Date (including any information
provided in connection with such Funding Notice) by or on behalf of the
Borrowers with respect to Boardman or the Boardman Plant, in any 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 that have been
prepared on a reasonable basis and in good faith by the Borrowers) 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.

     

    (d) As of the
date of the initial Funding Notice for each Greenfield Plant and the initial
Funding Date for such Greenfield Plant, all factual information furnished from
and after the Closing Date (including any information provided in connection
with such Funding Notice) by or on behalf of the Borrowers with respect to such
Greenfield Plant or the Borrower that owns such Greenfield Plant, in any
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 that
have been prepared on a reasonable basis and in good faith by the Borrowers) 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.

     

    (e) The
assumptions constituting the basis on which the Borrowers prepared each
Construction Budget, Construction Schedule, Operating Budget and the Financial
Model 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 the Borrowers' best
judgment as of the date prepared as to the matters contained therein, based on
all information known to the Borrowers.

     

    (f) On and
after the Closing Date, the Borrowers reasonably believe that the Conversion
Date will occur on or before the Conversion Date Certain and that the cost to
complete the Project will not exceed the funds available to the Borrowers
(including funds available under this Agreement, the Required Equity
Contributions and any Subordinated Debt Agreements).

     

    (g) On and
after the Closing Date, the Borrowers reasonably believe that the development,
engineering, construction, testing, start-up, use, ownership, operation and
maintenance of the Project are economically feasible and technically
feasible.

     

    Section
5.22 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 rank at
least pari
passu with all
other Indebtedness of any Borrower.

     

    
      
        
        

      

      
        43

        
          

        

      

      
        
        

      

    

     

    Section
5.23 Separateness.  (a)  Each
Borrower maintains separate bank accounts and separate books of account from
each other Borrower and from the Pledgor (other than the Project Accounts
maintained in accordance with this Agreement).  The separate
liabilities of each Borrower are readily distinguishable from the liabilities of
each Affiliate of the Borrowers, including the Pledgor (except to the extent
otherwise contemplated by the Transaction Documents).

     

    (b) Each
Borrower conducts its business solely in its own name in a manner not misleading
to other Persons as to its identity.

     

    (c) Each
Borrower is in compliance with the provisions set forth on Schedule 5.23.

     

    Section
5.24 Required LLC
Provisions.  Each Borrower LLC Agreement includes each of the
following terms (collectively, the "Required LLC
Provisions"):

     

    (a) in the
case of Pacific Holding, requires that it have, at all times, one Independent
Member or Independent Manager;

     

    (b) in the
case of Pacific Holding, requires a one hundred percent (100%) affirmative
vote or written consent of one hundred percent (100%) of all members or
managers, as the case may be, including the Independent Member or the
Independent Manager, as applicable, in connection with any of the following
matters:  in order to authorize (i) the filing of any insolvency
or reorganization case or proceeding, instituting proceedings to have Pacific
Holding adjudicated bankrupt or insolvent, instituting proceedings under any
applicable insolvency Law, seeking any relief under any Law relating to relief
from debts or the protection of debtors, consenting to the filing or institution
of bankruptcy or insolvency proceedings against Pacific Holding, filing a
petition seeking or consenting to reorganization, liquidation or relief with
respect to Pacific Holding under any applicable federal or state law relating to
bankruptcy, reorganization or insolvency, seeking or consenting to the
appointment of a receiver, liquidator, assignee, trustee, sequestrator,
custodian, or any similar official for Pacific Holding or a substantial part of
its property, making any assignment for the benefit of creditors, admitting in
writing Pacific Holding's inability to pay its debts as they become due, or
taking action in furtherance of any of the foregoing, or (ii) merging,
consolidating or combining Pacific Holding or any subsidiary of Pacific Holding
with any other entity, dissolving or winding-up Pacific Holding, selling,
transferring or otherwise disposing of all or substantially all of Pacific
Holding's assets or approving any plan or agreement to engage in any of the
foregoing actions;

     

    (c) includes
a statement that the only Indebtedness such Borrower is allowed to incur is
Permitted Indebtedness;

     

    
      
        
        

      

      
        44

        
          

        

      

      
        
        

      

    

     

    (d) includes
a statement that all interests in such Borrower shall be securities governed by
Article 8 of the Uniform Commercial Code and shall be evidenced by
certificates.  The certificated interests shall be in registered form
within the meaning of Article 8 of the Uniform Commercial Code;
and

     

    (e) includes
each of the provisions set forth in Schedule 5.23.

     

    Section
5.25 Subsidiaries.  Madera,
Boardman, Stockton, Brawley and Burley have no Subsidiaries.  Pacific
Holding has no Subsidiaries other than Madera, Boardman, Stockton, Brawley and
Burley (or the owner of any Substitute Facility).

     

    Section
5.26 Foreign Assets Control
Regulations, Etc.  (a)  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) None of
the Borrowers:

     

    
      
        	
              	
                (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 none of the Borrowers engages in dealings
      or transactions with any such Persons or entities;
  or

              

      

    

     

    
      
        	
              	
                (ii) 

              	
                is
      in violation of the Patriot
Act.

              

      

    

     

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

     

    
      
        
        

      

      
        45

        
          

        

      

      
        
        

      

    

     

    Section
5.28 Solvency.  Each
of the Borrowers is and, upon the incurrence of any Obligations by the Borrowers
and after giving effect to the transactions contemplated hereby, will be,
Solvent.

     

    Section
5.29 Legal Name and Place of
Business.  (a) The exact legal name and jurisdiction of
formation of each Borrower is as set forth below, and none of the Borrowers has
had any other legal names in the previous five (5) years except as set
forth on Schedule 5.29:

     

    
      
        	
              	
                (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;

              

      

    

     

    
      
        	
              	
                (v) 

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

              

      

    

     

    
      
        	
              	
                (vi) 

              	
                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 5.29.

     

    The
information set forth in Sections 5.29(a) and
(b) and on Schedule 5.29
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 Borrowers' obligations hereunder to provide the Collateral
Agent with a perfected first-priority Lien on the Collateral (subject to
Permitted Liens).

     

    Section
5.30 No
Brokers.  None of the Borrowers has any obligation to pay any
finder's, advisory, brokers or investment banking fee, except for the fees
payable pursuant to Section 3.13
(Fees) and those
identified on Schedule 5.30.

     

    Section
5.31 Insurance.  All
insurance required to be obtained and maintained pursuant to the Transaction
Documents by Pacific Holding and each other Borrower with respect to whose Plant
a Funding has been made or is being requested 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 with respect to any Plant
with respect to which a Funding has been made or is being requested to protect,
directly or indirectly, against loss or liability to any Borrower, any Plant or
any Senior Secured Party (including in connection with construction obligations
of such Major Project Party), as of the date this representation is made or
deemed repeated, pursuant to any Project Document relating to any such Plant 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.

     

    
      
        
        

      

      
        46

        
          

        

      

      
        
        

      

    

     

    Section
5.32 Accounts.  On
and after the Closing Date (with respect to Pacific Holding) or the initial
Funding Date for its Plant (with respect to each other Borrower), no Borrower
has, nor is the beneficiary of, any bank account other than the Project Accounts
and any Local Account with respect to which a Blocked Account Agreement has been
duly executed and delivered.

     

    ARTICLE
VI

     

    CONDITIONS
PRECEDENT

     

    Section
6.01 Conditions to
Closing.  In addition to the conditions set forth in Section 6.08
(Conditions
to All Fundings), the occurrence of
the Closing Date is subject to the satisfaction of each of the following
conditions precedent.

     

    (a) Delivery of Financing
Documents.  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 (other than items
(xiii) and (xiv)) in form and substance reasonably satisfactory to
each Lender:

     

    
      
        	
              	
                (i) 

              	
                this
      Agreement;

              

      

    

     

    
      
        	
              	
                (ii) 

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

              

      

    

     

    
      
        	
              	
                (iii) 

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

              

      

    

     

    
      
        	
              	
                (iv) 

              	
                the
      Sponsor Support Agreement;

              

      

    

     

    
      
        	
              	
                (v) 

              	
                the
      Pacific Holding Security
Agreement;

              

      

    

     

    
      
        	
              	
                (vi) 

              	
                the
      Madera Security Agreement;

              

      

    

     

    
      
        
        

      

      
        47

        
          

        

      

      
        
        

      

    

     

    
      
        	
              	
                (vii) 

              	
                the
      Boardman Security Agreement;

              

      

    

     

    
      
        	
              	
                (viii) 

              	
                the
      Pacific Holding Pledge
Agreement;

              

      

    

     

    
      
        	
              	
                (ix) 

              	
                the
      Madera Pledge Agreement;

              

      

    

     

    
      
        	
              	
                (x) 

              	
                the
      Boardman Pledge Agreement;

              

      

    

     

    
      
        	
              	
                (xi) 

              	
                the
      Madera Deed of Trust;

              

      

    

     

    
      
        	
              	
                (xii) 

              	
                the
      Boardman Deed of Trust;

              

      

    

     

    
      
        	
              	
                (xiii) 

              	
                the
      Fee Letters; and

              

      

    

     

    
      
        	
              	
                (xiv) 

              	
                the
      Interest Rate Protection Agreement(s) in respect of the In-Progress
      Plant 1 Construction Loans and the In-Progress Plant 2
      Construction Loans.

              

      

    

     

    (b) Delivery of Project
Documents.  The Administrative Agent shall have received true,
correct and complete copies of (i) each Project Document in effect as of
the Closing Date, each of which shall be in form and substance reasonably
satisfactory to the Administrative Agent and the Independent Engineer and
(ii) each Subordinated Debt Agreement, if any, in effect as of the Closing
Date which, in the case of each of Sections 6.01(b)(i) and
(ii), has been duly authorized, executed and delivered by the parties
thereto and is in full force and effect, and (iii) a copy of each other
agreement identified on Schedule 5.11-A
reasonably requested by the Administrative Agent.

     

    (c) Officer's
Certificates.  The Administrative Agent shall have received the
following certificates, dated as of the Closing Date, upon which the
Administrative Agent and each Lender may conclusively rely:

     

    
      
        	
              	
                (i) 

              	
                a
      duly executed certificate of an Authorized Officer of the Borrowers' Agent
      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, the Pledgor or
      Pacific Ethanol in this Agreement and each other Financing Document to
      which any Borrower, the Pledgor or Pacific Ethanol is a party are true and
      correct in all material respects on and as of the Closing Date;
      and

              

      

    

     

    
      
        
        

      

      
        48

        
          

        

      

      
        
        

      

    

     

    
      
        	
              	
                (ii) 

              	
                a
      duly executed certificate of an Authorized Officer of the Borrowers' Agent
      certifying that (A) the copies of each document delivered pursuant to
      Section 6.01(b)
      are true, correct and complete copies of such documents, (B) such
      documents are in full force and effect and no term or condition of any
      such Project Document has been amended from the form thereof delivered to
      the Administrative Agent, (C) each of the conditions precedent set
      forth in each Project Document delivered pursuant to Section 6.01(b)(i)
      and (ii)
      (other than Project Documents relating to any of the Greenfield
      Facilities) that are required to be satisfied on or before the Closing
      Date have been satisfied or waived by the parties thereto and (D) no
      material breach, material default or material violation by any Borrower,
      or to the knowledge of each Borrower, any Project Party under any such
      Project Document (other than Project Documents relating to any of the
      Greenfield Facilities) has occurred and is
  continuing.

              

      

    

     

    (d) Resolutions, Incumbency, LLC
Agreements.  The Administrative Agent shall have received from
each of the Borrowers, the Pledgor and Pacific Ethanol 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 Transaction Document to which it is party
      and the consummation of the transactions contemplated therein (including,
      in the case of each Borrower, the appointment of the Borrowers'
      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, in the case of each Borrower, shall be
      in form and substance reasonably satisfactory to the Administrative Agent
      and shall include the Required LLC Provisions, 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.

              

      

    

     

    
      
        
        

      

      
        49

        
          

        

      

      
        
        

      

    

     

    (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:

     

    
      
        	
              	
                (i) 

              	
                each
      Borrower is duly authorized as a limited liability company to carry on its
      business, and is duly formed, validly existing and in good standing in
      each jurisdiction (including, in the case of Madera, Stockton and Brawley,
      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; and

              

      

    

     

    
      
        	
              	
                (ii) 

              	
                each
      of the Pledgor and Pacific Ethanol is duly authorized as a corporation to
      carry on its business, and is duly organized, validly existing and in good
      standing in each jurisdiction in which it is required to be so
      authorized.

              

      

    

     

    (f) Opinions of
Counsel.  The Administrative Agent shall have received the
following legal opinions, addressed to the Senior Secured Parties, and each in
form and substance reasonably satisfactory to the Administrative
Agent:

     

    
      
        	
              	
                (i) 

              	
                the
      opinion of Latham & Watkins LLP, New York and California counsel to
      the Loan Parties (and covering customary matters under Delaware law);
      and

              

      

    

     

    
      
        	
              	
                (ii) 

              	
                the
      opinion of Tonkon Torp LLP, Oregon counsel to
      the Loan Parties.

              

      

    

     

    (g) Lien Search; Perfection of
Security.  The Collateral Agent shall have been granted a first
priority perfected security interest in all Collateral relating to Pacific
Holding, Madera, Boardman, the Madera Plant and the Boardman Plant, and 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
Security:

     

    
      
        	
              	
                (i) 

              	
                completed
      requests for information or lien search reports, dated no more than eight
      (8) days (or such other time period reasonably acceptable to the
      Administrative Agent) before the Closing Date, listing all effective UCC
      financing statements, fixture filings or other filings evidencing a
      security interest filed in Delaware, California, Oregon, Idaho, and any
      other jurisdictions reasonably requested by the Administrative Agent that
      name any Borrower or the Pledgor as a debtor, together with copies of each
      such UCC financing statement, fixture filing or other filings, which shall
      show no Liens other than Permitted Liens and the Liens identified in Schedule
      6.01(g)(i), which (in the case of Liens identified on Schedule
      6.01(g)(i)) will be released and terminated on or before the
      initial Funding Date;

              

      

    

     

    
      
        
        

      

      
        50

        
          

        

      

      
        
        

      

    

     

    
      
        	
              	
                (ii) 

              	
                UCC
      financing statements and other filings and recordations (other than
      fixture filings or recordation of any Mortgage), in proper form for filing
      in all jurisdictions that the Administrative
      Agent may deem necessary or desirable in order to perfect and protect the
      first priority Liens and security interests created under the Security
      Documents covering the Collateral with respect to each of Madera,
      Boardman, Pacific Holding, the Madera Plant and the Boardman Plant, as
      described therein and each such UCC financing statement and other filing
      or recordation shall be duly filed on the Closing
  Date;

              

      

    

     

    
      
        	
              	
                (iii) 

              	
                the
      original certificates representing all Equity Interests in each of Madera,
      Boardman and Pacific Holding shall have been delivered to the Collateral
      Agent, in each case together with a duly executed transfer power in the
      form attached to the Pledge Agreement relating to such Equity Interests;
      and

              

      

    

     

    
      
        	
              	
                (iv) 

              	
                with
      respect to each of Madera, Boardman, Pacific Holding, the Madera Plant and
      the Boardman Plant, evidence of the making (which may be on the Closing
      Date) of all other actions, recordings and filings of or with respect to
      the Security Documents delivered pursuant to Section 6.01(a)
      (Conditions
      to Closing - Delivery of Financing Documents) that the
      Administrative Agent may deem necessary or desirable in order to perfect
      and protect the first-priority Liens created
  thereunder.

              

      

    

     

    (h) Financial
Statements.  The Administrative Agent shall have received
accurate and complete copies of the audited annual financial statements of
Pacific Ethanol for the most recent Fiscal Year then available and the unaudited
quarterly financial statements of Pacific Ethanol for September 30,
2006.  Such financial statements shall be on a consolidated
basis.

     

    (i) 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.

     

    (j) Establishment of Project
Accounts.  Each of the Project Accounts shall have been
established to the reasonable satisfaction of the Administrative
Agent.

     

    (k) Insurance.  The
Administrative Agent shall have received:

     

    
      
        	
              	
                (i) 

              	
                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 Insurance Consultant and
      the Borrowers' insurance broker (or insurance carrier) certifying that all
      such insurance policies are in full force and effect;
  and

              

      

    

     

    
      
        
        

      

      
        51

        
          

        

      

      
        
        

      

    

     

    
      
        	
              	
                (ii) 

              	
                a
      report of the Insurance Consultant in form and substance reasonably
      satisfactory to the Administrative Agent discussing, among other matters
      that the Administrative Agent may require, the adequacy of the insurance
      coverage for the Project, together with a duly executed certificate of the
      Insurance Consultant in the form of Exhibit 6.01(k),
      appropriately completed to the satisfaction of the Administrative
      Agent;

              

      

    

     

    provided, that with
respect to Sections
6.01(k)(i) and (ii) if, on the
Closing Date, the insurance coverage for any of the Plants does not satisfy the
requirements set forth on Schedule 7.01(h), any
such deficiencies shall be satisfactorily resolved, as certified by the
Insurance Consultant, as a condition precedent to the first Funding for such
Plant.

     

    (l) Independent Engineer's
Report.  The Administrative Agent shall have received the
report of the Independent Engineer, dated December 5, 2006.

     

    (m) Environmental Site
Assessments.  The
Administrative Agent shall have received an Environmental Site Assessment Report
with respect to each Site, accompanied by a corresponding reliance letter (to
the extent such report does not permit reliance thereon by the Lenders), each in
form and substance reasonably satisfactory to the Administrative
Agent.

     

    (n) Ethanol Market
Report.  The Administrative Agent shall have received the
report of the Ethanol Market Consultant, dated December 1,
2006.

     

    (o) Agricultural Market
Report.  The Administrative Agent shall have received the
report of the Agricultural Market Consultant, dated December 1,
2006.

     

    (p) Appraisal.  The
Administrative Agent shall have received an appraisal with respect to each of
the Madera Plant and the Boardman Plant, each in form and substance reasonably
satisfactory to the Administrative Agent.

     

    (q) Budgets and
Schedules.

     

    
      
        	
              	
                (i) 

              	
                The
      Administrative Agent shall have received the Construction Budget for each
      Plant (other than the Madera Plant), accompanied by a certificate of an
      Authorized Officer of the Borrowers' Agent, dated as of the Closing Date,
      certifying as to the reasonableness of the underlying assumptions and the
      conclusions on which each such Construction Budget is based, each in form
      and substance reasonably satisfactory to the Administrative Agent; provided, that
      any Construction Budget consistent with the Financial Model shall be
      deemed to be satisfactory.

              

      

    

     

     

    
      
        
        

      

      
        52

        
          

        

      

      
        
        

      

    

     

    
      
        	
              	
                (ii) 

              	
                The
      Administrative Agent shall have received a Drawdown Schedule for each
      Plant (other than the Madera Plant), each in form and substance reasonably
      satisfactory to the Administrative Agent; provided, that
      any Drawdown Schedule consistent with the Financial Model shall be deemed
      to be satisfactory.

              

      

    

     

    
      
        	
              	
                (iii) 

              	
                The
      Administrative Agent shall have a received an Operating Budget for the
      remaining months of the 2007 calendar year for the Madera Plant,
      accompanied by a certificate of an Authorized Officer of the Borrowers'
      Agent, dated as of the Closing Date, certifying as to the reasonableness
      of the underlying assumptions and the conclusions on which such Operating
      Budget is based, each in form and substance reasonably satisfactory to the
      Administrative Agent.

              

      

    

     

    (r) Title Insurance.

     

    
      
        	
              	
                (i) 

              	
                The
      Administrative Agent shall have received a paid policy or policies of
      mortgage title insurance (the "Title Insurance
      Policy") with respect to the Madera Site and the Boardman Site, in
      an aggregate amount equal to ninety-two million Dollars ($92,000,000) on a
      Form 1992 extended coverage lender's policy, containing such
      endorsements (including an endorsement deleting the creditor's rights
      exception) as the Administrative Agent may request and otherwise in form
      and substance reasonably satisfactory to the Administrative Agent, from
      the Title Insurance Company, containing no exception for mechanics'
      or materialmen's Liens and no other exceptions (printed or otherwise)
      other than those approved by the Administrative Agent (such approval not
      to be unreasonably withheld), and insuring that the Collateral Agent has a
      good, valid and enforceable first Lien of record on the corresponding
      Mortgaged Property free and clear of all defects and encumbrances (other
      than Permitted Liens); provided, that
      if the Title Insurance Policy with respect to either such Plant
      contains any survey exceptions, such exceptions shall be satisfactorily
      discharged as a condition to the first Funding for such
    Plant.

              

      

    

     

    
      
        	
              	
                (ii) 

              	
                The
      Title Insurance Policy shall confirm that (A) Madera has good,
      marketable title to the Madera Site subject to no Liens (other than Liens
      in favor of the Collateral Agent or other Permitted Liens) and
      (B) Boardman has a valid and subsisting leasehold estate in and to
      the Boardman Leased Premises subject to no Liens (other than Liens in
      favor of the Collateral Agent or other Permitted
  Liens).

              

      

    

     

    (s) Bank Regulatory
Requirements.  The Administrative Agent shall have received at
least five (5) Business Days prior to the Closing Date 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.

     

    
      
        
        

      

      
        53

        
          

        

      

      
        
        

      

    

     

    (t) Closing Fees;
Expenses.  The Administrative Agent shall have received for its
own account, or for the account of each Lender, Lead Arranger and Agent entitled
thereto, all fees due and payable pursuant to Section 3.13
(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.

     

    (u) Process
Agent.  The Administrative Agent shall have received, in form
and substance reasonably satisfactory to the Administrative Agent, acceptances
from the Process Agent for the Borrowers, the Pledgor and Pacific Ethanol
appointed under Section 11.02(d)
(Applicable
Law; Jurisdiction; Etc. – Appointment of Process Agent and Service of
Process) and as required under each other Financing Document in effect on
the Closing Date.

     

    (v) Financial
Model.  The Administrative Agent shall have received a
certificate of a Financial Officer of the Borrowers' Agent, dated as of the
Closing Date, certifying that the Financial Model attached to Exhibit 6.01(v)
has not been amended or modified (or, in the event of any amendment or
modification thereto, such amendments or modification shall not, in the
reasonable opinion of the Administrative Agent, reflect any adverse changes) and
certifying as to the reasonableness of the underlying assumptions and the
conclusions on which the Financial Model is based.

     

    (w) Loan
Pay-Off.  The Administrative Agent shall have received
satisfactory evidence of the termination of the United Capital Loan Facility and
the release of the Liens granted in connection therewith.

     

    (x) Equator
Principles.  The Administrative Agent shall have received all
documentation requested by the Administrative Agent that is necessary to
evidence compliance, and otherwise required in connection, with the Equator
Principles.

     

    Section
6.02 Conditions to Madera
Funding.  In addition to the conditions set forth in Section 6.08
(Conditions
to All Fundings), the release of any
Construction Loan funds deposited in or standing to the credit of the Escrow
Account for the Madera Plant for transfer to the Construction Holding Account
(which, in the event that the Madera Plant is In-Progress Plant 1, shall be
the In-Progress Plant 1 Construction Loans or, in the event that the Madera
Plant is In-Progress Plant 2, shall be the In-Progress Plant 2
Tranche B Construction Loans), and, in the event that the Madera Plant is
In-Progress Plant 2, the obligation of the Tranche A Lenders to make
available the Funding of the In-Progress Plant 2 Tranche A
Construction Loans, is subject to the satisfaction of each of the following
conditions precedent.

     

    (a) Madera Plant
Completion.  The Commercial Operation Date for the Madera Plant
shall have occurred on or before December 31, 2007.

     

    
      
        
        

      

      
        54

        
          

        

      

      
        
        

      

    

     

    (b) Lien
Searches.  The Administrative Agent shall have received
completed requests for information or lien search reports, dated no more than
eight (8) days (or such other time period reasonably acceptable to the
Administrative Agent) before the date of such Funding, listing all effective UCC
financing statements, fixture filings or other filings evidencing a security
interest filed in Delaware or California, and any other jurisdictions reasonably
requested by the Administrative Agent, that name Madera or the Pledgor as a
debtor, together with copies of each such UCC financing statement, fixture
filing or other filings, which shall show no Liens (other than Permitted Liens
(or Liens that were Permitted Liens on or before the date of the applicable
Funding Notice, in which case the Administrative Agent shall have received
satisfactory evidence of the release and termination of all such Liens prior to
the applicable Funding Date) and, in the event that the Madera Funding is the
first Construction Loan Funding, Liens identified in Schedule 6.01(g)(i)
and in such case the Administrative Agent shall have received satisfactory
evidence of the release and termination of all such Liens identified on Schedule
6.01(g)(i)).

     

    (c) Good
Standing.  The Administrative Agent shall have received
satisfactory certificates of good standing from the Secretaries of State of each
of Delaware and California, dated no more than eight (8) days (or such
other time period reasonably acceptable to the Administrative Agent) prior to
the requested Funding Date, with respect to Madera.

     

    (d) Madera
Survey.  The Administrative Agent shall have received a current
Survey of the Madera Site showing all real property rights for the Madera Plant
required hereunder, which shall be satisfactory to the Title Insurance Company
insuring the Collateral Agent's interest in the Madera Mortgaged Property (and
shall be sufficient to enable the Title Insurance Company to either
(i) remove any survey exceptions from the Madera Title Insurance Policy or
(ii) replace such survey exceptions with survey exceptions that do not
identify any matters other than Permitted Liens), shall not show any
encumbrances other than Permitted Liens, and shall be certified to the
Collateral Agent, the Administrative Agent, the Lenders and such Title Insurance
Company.

     

    (e) Madera Project Documents;
Contracts; Consents.

     

    
      
        	
              	
                (i) 

              	
                The
      Administrative Agent shall have received a copy of each Project Document,
      or amendment thereto, for the Madera Facility that has been entered into
      after the Closing Date (which shall include the Pacific Ethanol Guarantees
      for the applicable Madera Project Documents), each of which shall be in
      full force and effect and shall have been approved by the required Project
      Document Approval Level.

              

      

    

     

    
      
        	
              	
                (ii) 

              	
                The
      Administrative Agent shall have received a true, correct and complete copy
      (certified as such by Madera) of each agreement evidencing Contractual
      Obligations of Madera or otherwise relating to the Madera Plant reasonably
      requested by, and not previously delivered to, the Administrative
      Agent.

              

      

    

     

    
      
        
        

      

      
        55

        
          

        

      

      
        
        

      

    

     

    
      
        	
              	
                (iii) 

              	
                The
      Administrative Agent shall have received a duly executed certificate of an
      Authorized Officer of Madera certifying that (A) the copies of each
      document delivered pursuant to Section 6.02(e)(i) and
      (ii) are true, correct and complete copies of such documents,
      (B) such documents are in full force and effect and no term or
      condition of any such Project Document has been amended from the form
      thereof delivered to the Administrative Agent, (C) each of the
      conditions precedent set forth in each Project Document delivered pursuant
      to Section
      6.02(e)(i) that are required to be satisfied on or before the date
      of such requested Funding, if any, have been satisfied, or waived by the
      parties thereto, and (D) no material breach, material default or
      material violation by any Borrower, or to the knowledge of each Borrower,
      any Major Project Party under any such Project Document has occurred and
      is continuing.

              

      

    

     

    
      
        	
              	
                (iv) 

              	
                The
      Administrative Agent shall have received a Consent, in form and substance
      reasonably satisfactory to the Administrative Agent, with respect to each
      Madera Project Document identified on Schedule 6.02(e)(iv)
      (which, in the case of Consents from non-Affiliate Project Parties, may be
      delivered on or before the Funding
Date).

              

      

    

     

    (f) Opinions of
Counsel.  The Administrative Agent shall have received (on or
before the Madera Funding Date) the following legal opinions, addressed to the
Senior Secured Parties, and each in form and substance reasonably satisfactory
to the Administrative Agent:

     

    
      
        	
              	
                (i) 

              	
                the
      opinion of Latham & Watkins LLP, New York and California counsel to
      the Loan Parties (and covering customary matters under Delaware law and
      permitting matters relating to the Madera Plant) covering customary
      matters and matters reasonably requested by the Administrative Agent that
      in each such case were not addressed in the opinions delivered on the
      Closing Date; and

              

      

    

     

    
      
        	
              	
                (ii) 

              	
                if
      reasonably requested by the Administrative Agent, opinions of reasonably
      acceptable counsel to the Major Project Parties that are parties to the
      Madera Project Documents identified on Schedule 6.02(e)(iv)
      with respect to which a Consent has been
  delivered.

              

      

    

     

    
      
        
        

      

      
        56

        
          

        

      

      
        
        

      

       

    

    (g) Title Insurance.  The
Administrative Agent shall have received (on or before the Madera Funding Date)
an ALTA 122 Endorsement to the Title Insurance Policy with respect to the
Madera Site.

     

    (h) Independent Engineer's
Report.  The Administrative Agent shall have received a
supplemental report of the Independent Engineer, updating those matters relating
to the Madera Plant addressed in the report of the Independent Engineer dated
December 5, 2006 as the Administrative Agent may reasonably request, which
report shall be in form and substance reasonably satisfactory to the
Administrative Agent and the Required Lenders (provided that any Lender who does
not object to a request for approval of such report within fifteen (15) days
following receipt by such Lender of such written request and a copy of such
report shall be deemed to have approved such report).

     

    (i) Insurance.  Any
deficiencies with respect to the insurance for the Madera Plant identified in
the report delivered pursuant to Section 6.01(k)
(Conditions
to Closing - Insurance) shall have been
addressed in a manner reasonably satisfactory to the Administrative Agent and
the Insurance Consultant and the Administrative Agent shall have received a
reasonably satisfactorily completed certificate of the Insurance Consultant in
substantially the form of Exhibit 6.01(k)
confirming such matters.

     

    (j) Governmental
Approvals.  Madera shall have all Necessary Project Approvals
required as of the date of such requested Funding to operate the Madera Plant,
and the Administrative Agent shall have received a duly executed certificate of
an Authorized Officer of Madera certifying that (i) attached to such
certificate are true, correct and complete copies of each such Necessary Project
Approval, (ii) each such Necessary Project Approval is in full force and
effect and is final and Non-Appealable, (iii) all Necessary Project
Approvals required for the Madera Plant at a later date will be obtained in due
course prior to the time when needed, and (iv) each applicable Governmental
Approvals Update Schedule accurately identifies all Necessary Project Approvals
necessary for the Madera Plant.

     

    Section
6.03 Conditions to Boardman
Funding.  In addition to the conditions set forth in Section 6.08
(Conditions
to All Fundings), the release of any
Construction Loan funds deposited in or standing to the credit of the Escrow
Account for the Boardman Plant for transfer to the Construction Holding Account
(which, in the event that the Boardman Plant is In-Progress Plant 1, shall
be the In-Progress Plant 1 Construction Loans or, in the event that the
Boardman Plant is In-Progress Plant 2, shall be the In-Progress
Plant 2 Tranche B Construction Loans), and, in the event that the
Boardman Plant is In-Progress Plant 2, the obligation of the Tranche A
Lenders to make available the Funding of the In-Progress Plant 2
Tranche A Construction Loans, is subject to the satisfaction of each of the
following conditions precedent.

     

    
      
        
        

      

      
        57

        
          

        

      

      
        
        

      

    

     

    (a) Boardman
Completion.

     

    
      
        	
              	
                (i) 

              	
                On
      or before December 31, 2007, the Commercial Operation Date for the
      Boardman Plant shall have
occurred.

              

      

    

     

    
      
        	
              	
                (ii) 

              	
                The
      Administrative Agent shall have received an Operating Budget for the
      Boardman Plant for the remaining months of the 2007 calendar year, which
      budget shall be reasonably satisfactory to the Administrative Agent and
      the Independent Engineer.

              

      

    

     

    (b) Lien
Searches.  The Administrative Agent shall have received
completed requests for information or lien search reports, dated no more than
eight (8) days (or such other time period reasonably acceptable to the
Administrative Agent) before the date of such Funding, listing all effective UCC
financing statements, fixture filings or other filings evidencing a security
interest filed in Delaware or Oregon, and any other jurisdictions reasonably
requested by the Administrative Agent that name Boardman or the Pledgor as a
debtor, together with copies of each such UCC financing statement, fixture
filing or other filings, which shall show no Liens (other than Permitted Liens
(or Liens that were Permitted Liens prior to the date of the applicable Funding
Notice, in which case the Administrative Agent shall have received satisfactory
evidence of the release and termination of all such Liens on or before the
applicable Funding Date) and, in the event that the Boardman Funding is the
first Construction Loan Funding, other Liens identified in Schedule 6.01(g)(i)
and in such case the Administrative Agent shall have received satisfactory
evidence of the release and termination of all such Liens identified as Schedule
6.01(g)(i)).

     

    (c) Good
Standing.  The Administrative Agent shall have received
satisfactory certificates of good standing from the Secretaries of State of each
of Delaware and Oregon, dated no more than eight (8) days (or such other
time period reasonably acceptable to the Administrative Agent) prior to the
requested Funding Date, with respect to Boardman.

     

    (d) Boardman
Survey.  The Administrative Agent shall have received a current
Survey of the Boardman Site, which shall be satisfactory to the Title Insurance
Company insuring the Collateral Agent's interest in the Boardman Mortgaged
Property and shall not show any encumbrances other than Permitted Liens (and
shall be sufficient to enable the Title Insurance Company to either
(i) remove any survey exceptions from the Boardman Title Insurance Policy
or (ii) replace such survey exceptions with survey exceptions that do not
identify any matters other than Permitted Liens), and certified to the
Collateral Agent, the Administrative Agent, the Lenders and such Title Insurance
Company.

     

    (e) Boardman Project Documents;
Contracts; Consents.

     

    
      
        
          	
                	
                  (i) 

                	
                  The
      Administrative Agent shall have received a copy of each Project Document,
      or amendment thereto, for the Boardman Facility that has been entered into
      after the Closing Date (which shall include the Pacific Ethanol Guarantees
      for the applicable Boardman Project Documents), each of which shall be in
      full force and effect and shall have been approved by the required Project
      Document Approval
Level.

                

        

      

    

     

    
      
        
        

      

      
        58

        
          

        

      

      
        
        

      

    

     

    
      
        	
              	
                (ii) 

              	
                The
      Administrative Agent shall have received a true, correct and complete copy
      (certified as such by Boardman) of each agreement evidencing Contractual
      Obligations of Boardman or otherwise relating to the Boardman Plant
      reasonably requested by, and not previously delivered to, the
      Administrative Agent.

              

      

    

     

    
      
        	
              	
                (iii) 

              	
                The
      Administrative Agent shall have received a duly executed certificate of an
      Authorized Officer of Boardman certifying that (A) the copies of each
      document delivered pursuant to Section 6.03(e)(i) and
      (ii) are true, correct and complete copies of such documents,
      (B) 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, (C) each of the conditions precedent set forth
      in each Project Document delivered pursuant to Section
      6.03(e)(i) that are required to be satisfied on or before the date
      of such requested Funding, if any, have been satisfied, or waived by the
      parties thereto, and (D) no material breach, material default or
      material violation by any Borrower, or to the knowledge of each Borrower,
      any Major Project Party under any such Project Document has occurred and
      is continuing.

              

      

    

     

    
      
        	
              	
                (iv) 

              	
                The
      Administrative Agent shall have received a Consent, in form and substance
      reasonably satisfactory to the Administrative Agent, with respect to each
      Boardman Project Document identified on Schedule 6.02(e)(iv)
      (which, in the case of Consents from non-Affiliate Project Parties, may be
      delivered on or before the Funding
Date).

              

      

    

     

    (f) Opinions of
Counsel.  The Administrative Agent shall have
received (on or before the Boardman Funding Date) the following legal opinions,
addressed to the Senior Secured Parties, and each in form and substance
reasonably satisfactory to the Administrative Agent:

     

    
      
        	
              	
                (i) 

              	
                the
      opinion of Latham & Watkins LLP (or such other legal counsel
      reasonably acceptable to the Administrative Agent), as New York and
      California counsel to the Loan Parties (and covering customary matters
      under Delaware law) covering customary matters and matters reasonably
      requested by the Administrative Agent that in each such case were not
      addressed in the opinions delivered on the Closing
  Date;

              

      

    

     

    
      
        	
              	
                (ii) 

              	
                the
      opinion of Tonkon Torp LLP (or such other legal counsel reasonably
      acceptable to the Administrative Agent), as Oregon counsel to the Loan
      Parties, covering customary matters and matters reasonably requested by
      the Administrative Agent (including permitting matters relating to the
      Boardman Plant), that in each such case were not addressed in the opinions
      delivered on the Closing Date;
and

              

      

    

     

    
      
        	
              	
                (iii) 

              	
                if
      reasonably requested by the Administrative Agent, opinions of reasonably
      acceptable counsel to the Major Project Parties that are parties to the
      Boardman Project Documents identified on Schedule 6.02(e)(iv)
      with respect to which a Consent has been
  delivered.

              

      

    

     

    
      
        
        

      

      
        59

        
          

        

      

      
        
        

      

    

     

    (g) Title Insurance.  The
Administrative Agent shall have received an ALTA 122 Endorsement to the
Title Insurance Policy with respect to the Boardman Site.

     

    (h) Independent Engineer's
Report.  The Administrative Agent shall have received a
supplemental report of the Independent Engineer, updating those matters relating
to the Boardman Plant addressed in the report of the Independent Engineer dated
December 5, 2006 as the Administrative Agent may reasonably request, which
report shall be in form and substance reasonably satisfactory to the
Administrative Agent and the Required Lenders (provided that any Lender who does
not object to a request for approval of such report within fifteen (15) days
following receipt by such Lender of such written request and a copy of such
report shall be deemed to have approved such report).

     

    (i) Insurance.  Any
deficiencies with respect to the insurance for the Boardman Plant identified in
the report delivered pursuant to Section 6.01(k)
(Conditions
to Closing - Insurance) shall have been
addressed in a manner reasonably satisfactory to the Administrative Agent and
the Insurance Consultant and the Administrative Agent shall have received a
reasonably satisfactorily completed certificate of the Insurance Consultant in
substantially the form of Exhibit 6.01(k)
confirming such matters.

     

    (j) Governmental
Approvals.  Boardman shall have all Necessary Project Approvals
required as of the date of such requested Funding to operate the Boardman Plant,
and the Administrative Agent shall have received a duly executed certificate of
an Authorized Officer of Boardman certifying that (i) attached to such
certificate are true, correct and complete copies of each such Necessary
Governmental Project Approval, (ii) each such Necessary Project Approval is
in full force and effect and is final and Non-Appealable, (iii) all
Necessary Project Approvals required for the Boardman Plant at a later date will
be obtained in due course prior to the time when needed, and (iv) each
applicable Governmental Approvals Update Schedule accurately identifies all
Necessary Project Approvals necessary for the Boardman Plant.

     

    Section
6.04 Conditions to First Funding
for Each Greenfield Plant.  In addition to the conditions set
forth in Section 6.05
(Conditions
to All Greenfield Plant Construction Loan Fundings) and Section 6.08
(Conditions
to All Fundings), the obligation of
each Tranche A Lender to make available the first Funding of each of the
Greenfield Plant 1 Construction Loans, the Greenfield Plant 2
Construction Loans and the Greenfield Plant 3 Construction Loans, and the
initial release of any funds deposited in or standing to the credit of the
Escrow Account for transfer to the applicable Greenfield Plant Construction
Account, is subject to the satisfaction of each of the following conditions
precedent.

     

    (a) Equity.  The
Administrative Agent shall have received reasonably satisfactory evidence that
the relevant Required Equity Contributions have been made to Pacific Holding,
contributed to the Borrower with respect to whose Plant such Funding is
requested, and fully applied to pay Project Costs for such Plant (as verified by
the Independent Engineer).

     

    
      
        
        

      

      
        60

        
          

        

      

      
        
        

      

    

     

    (b) Lien
Searches.  The Administrative Agent shall have received
completed requests for information or lien search reports, dated no more than
eight (8) days (or such other time period reasonably acceptable to the
Administrative Agent) prior to the requested Funding Date, listing all effective
UCC financing statements, fixture filings or other filings evidencing a security
interest filed in Delaware or the jurisdiction where the Plant for which such
Funding is requested is located, and any other jurisdictions reasonably
requested by the Administrative Agent that name the relevant Borrower or the
Pledgor as a debtor, together with copies of each such UCC financing statement,
fixture filing or other filings, which shall show no Liens other than Permitted
Liens (or Liens that were Permitted Liens prior to the date of the applicable
Funding Notice, in which case the Administrative Agent shall have received
satisfactory evidence of the release and termination of all such Liens prior to
the applicable Funding Date).

     

    (c) Good
Standing.  The Administrative Agent shall have received
satisfactory certificates of good standing from the Secretaries of State of each
of Delaware and the state where the relevant Plant is located, dated no more
than eight (8) days (or such other time period reasonably acceptable to the
Administrative Agent) prior to the requested Funding Date, with respect to the
Borrower whose Plant is the subject of the requested Funding.

     

    (d) Resolutions.  The
Administrative Agent shall have received from the Borrower whose Plant is the
subject of such requested Funding (and, if required, from the Pledgor and
Pacific Ethanol) a certificate of an Authorized Officer dated as of the date of
such requested Funding, upon which the Administrative Agent and each Lender may
conclusively rely, as to 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 Transaction Document
to which it is party and the consummation of the transactions contemplated
therein to the extent that resolutions authorizing such Transaction Document or
such transactions were not provided pursuant to Section 6.01(d)
(Conditions
to Closing – Resolutions, Incumbency, LLC Agreements).

     

    (e) Survey.  The
Administrative Agent shall have received a current Survey of the Site for the
Plant with respect to which such Funding is being requested, which shall be
satisfactory to the Title Insurance Company insuring the Collateral Agent's
interest in the Mortgaged Property for such Plant and shall not show any
encumbrances other than Permitted Liens, and shall be certified to the
Collateral Agent, the Administrative Agent, the Lenders and such Title Insurance
Company.

     

    (f) Title Insurance.

     

    
      
        	
              	
                (i) 

              	
                The
      Administrative Agent shall have received (on or before the date of such
      requested Funding) a paid Title Insurance Policy with respect to the
      Site for the Plant with respect to which such Funding is requested, in an
      aggregate amount equal to sixty-nine million Dollars ($69,000,000) on a
      Form 1992 extended coverage lender's policy, containing such
      endorsements (including an endorsement deleting the creditor's rights
      exception) as the Administrative Agent may reasonably request and
      otherwise in form and substance reasonably satisfactory to the
      Administrative Agent from the Title Insurance Company, containing no
      exception for mechanics' or materialmen's Liens and no other exceptions
      (printed or otherwise) other than those approved by the Administrative
      Agent (such approval not to be unreasonably withheld), and insuring that
      the Collateral Agent has a good, valid and enforceable first Lien of
      record on the corresponding Mortgaged Property free and clear of all
      defects and encumbrances (other than Permitted
  Liens).

              

      

    

     

    
      
        
        

      

      
        61

        
          

        

      

      
        
        

      

    

     

    
      
        	
              	
                (ii) 

              	
                In
      the case of Brawley or Burley, the Title Insurance Policy shall
      confirm that Brawley or Burley, as the case may be, has good, marketable
      title to the Brawley Site or Burley Site subject to no Liens (other than
      Permitted Liens).

              

      

    

     

    
      
        	
              	
                (iii) 

              	
                In
      the case of Stockton, the Title Insurance Policy shall confirm that
      Stockton has a valid and subsisting leasehold estate in and to the
      Stockton Leased Premises subject to no Liens (other than Permitted
      Liens).

              

      

    

     

    (g) Collateral.

     

    
      
        	
              	
                (i) 

              	
                The
      Mortgage, Pledge Agreement and Security Agreement for the Plant (and
      related Borrower) with respect to which such Funding has been requested
      shall have been duly executed and delivered (or will be delivered on the
      requested Funding Date prior to or simultaneously with the requested
      Funding), and the Collateral Agent shall have been granted (prior to or
      simultaneously with the requested Funding) a first priority perfected
      security interest in the Collateral described
  therein.

              

      

    

     

    
      
        	
              	
                (ii) 

              	
                The
      Collateral Agent shall have been designated as the payee under (or shall
      have received a dual obligee rider with respect to) each Performance Bond
      and each Payment Bond issued under any Construction Contract for the Plant
      with respect to which such Funding has been requested with a value greater
      than one million Dollars
($1,000,000).

              

      

    

     

    
      
        	
              	
                (iii) 

              	
                The
      Administrative Agent shall have
received:

              

      

    

     

    
      	
              (A)  
        

            	
              UCC
      financing statements and other filings and recordations (other than
      fixture filings or recordation of any Mortgage), in proper form for filing
      in all jurisdictions that the Administrative
      Agent may deem necessary or desirable in order to perfect and protect the
      first priority Liens and security interests created under such Security
      Documents covering the Collateral described therein and each such UCC
      financing statement and other filing or recordation shall be duly filed on
      or before such Funding Date, prior to or simultaneously with the requested
      Construction Loan Funding;

            

    

     

    
      
        
        

      

      
        62

        
          

        

      

      
        
        

      

    

     

    
      	
              (B)   
        

            	
              the
      original certificates representing all Equity Interests in the Borrower
      whose Plant is the subject of such requested Funding shall have been
      delivered (prior to or simultaneously with the requested Funding) to the
      Collateral Agent, in each case together with a duly executed transfer
      power in the form attached to the Pledge Agreement relating to such Equity
      Interests; and

            

    

     

    
      	
              (C)   
        

            	
              satisfactory
      evidence of the making (which may be simultaneous with such Funding) of
      all other actions, recordings and filings of or with respect to the
      Security Documents for such Plant and such Borrower that the
      Administrative Agent may deem necessary or desirable in order to perfect
      and protect the first-priority Liens created
  thereunder.

            

    

     

    (h) Construction
Schedule and Updated Budget.

     

    
      
        	
              	
                (i) 

              	
                The
      Administrative Agent shall have received, for the Plant with respect to
      which such Funding is requested, a certificate of the Borrowers' Agent,
      together with a confirmation and approval in respect of thereof from the
      Independent Engineer, (A) that no changes need be made to the
      Construction Budget for such Plant delivered under Section 6.01(q)
      (Conditions
      to Closing –Budgets and Schedules) or
      (B) an updated Construction Budget for such Plant, certified as to
      the reasonableness of the underlying assumptions and the conclusions on
      which such budget is based by an Authorized Officer of the relevant
      Borrower and demonstrating aggregate Project Costs for such Plant equal to
      or less than the amount provided for in the Construction Budget for such
      Plant delivered under Section 6.01(q)
      (Conditions
      to Closing –Budgets and Schedules); provided, that
      if there was an increase in costs between the Construction Budget provided
      on the Closing Date and such updated Construction Budget, an amount
      adequate to cover all such increased costs shall have been deposited in
      the Construction Account or previously applied to pay Project Costs with
      respect to such Plant (from sources other than the Loans, Cash Flow or the
      Sponsor Support Agreement), as verified by the Independent
      Engineer.

              

      

    

     

    
      
        	
              	
                (ii) 

              	
                The
      Administrative Agent shall have received a Construction Schedule for such
      Plant, which shall have been reasonably approved by the Independent
      Engineer and the Administrative
Agent.

              

      

    

     

    
      
        
        

      

      
        63

        
          

        

      

      
        
        

      

    

     

    (i) Independent Engineer's
Report.

     

    
      
        	
              	
                (i) 

              	
                The
      Administrative Agent shall have received an updated report of the
      Independent Engineer, addressing the adequacy of utility arrangements and
      each of the other matters set forth below for the Plant with respect to
      which such Funding is being requested, identifying any material changes
      from the report of the Independent Engineer dated December 5, 2006 in
      costs, adequacy of contingency or other matters addressed therein, which
      updated report shall not include any materially adverse conclusions by the
      Independent Engineer, and a duly executed certificate of the Independent
      Engineer and shall be in form and substance reasonably satisfactory to the
      Administrative Agent and the Required Lenders (provided that any Lender
      who does not object to a request for approval of such report within
      fifteen (15) days following receipt by such Lender of such written request
      and a copy of such report shall be deemed to have approved such
      report).

              

      

    

     

    
      
        	
              	
                (ii) 

              	
                The
      Independent Engineer shall have certified to the Administrative Agent that
      the Independent Engineer believes that the Commercial Operation Date for
      the Plant with respect to which such Funding is requested will occur on or
      prior to the Conversion Date
Certain.

              

      

    

     

    (j) Insurance.  The
Administrative Agent shall have received binders or certificates evidencing the
commitment of insurers to provide the applicable insurance policies then
required under by Section 7.01(h)
(Affirmative
Covenants - Insurance) with respect to the
Borrowers for the Plant with respect to which such Funding is requested,
together with evidence of the payment of all premiums then due and payable in
respect of such insurance policies, a certificate of the Borrowers' insurance
broker (or insurance carrier) certifying that all such insurance policies are in
full force and effect and an updated report of the Insurance Consultant
confirming compliance with the insurance requirements for such Plant set forth
on Schedule 7.01(h)
and material insurance requirements set forth in the Project Documents for such
Plant (including the satisfaction of any deficiencies identified with respect to
such Plant on the Closing Date), accompanied by a duly executed certificate of
the Insurance Consultant in the form of Exhibit 6.01(k)
appropriately completed to the reasonable satisfaction of the Administrative
Agent.

     

    (k) Appraisal.  The
Administrative Agent shall have received an appraisal of the Site for the Plant
with respect to which such Funding has been requested, in form and substance
reasonably satisfactory to the Administrative Agent.

     

    (l) Opinions of
Counsel.  The Administrative Agent shall have received (on or
before the date of such requested Funding) the following legal opinions,
addressed to the Senior Secured Parties, and each in form and substance
reasonably satisfactory to the Administrative Agent, covering customary matters
and matters reasonably requested by the Administrative Agent that in each such
case were not addressed in the opinions delivered on the Closing
Date:

     

    
      
        	
              	
                (i) 

              	
                the
      opinion of Latham & Watkins LLP (or such other legal counsel
      reasonably acceptable to the Administrative Agent), as New York counsel to
      the Loan Parties (and covering customary matters under Delaware
      law);

              

      

    

     

    
      
        
        

      

      
        64

        
          

        

      

      
        
        

      

    

     

    
      
        	
              	
                (ii) 

              	
                in
      the case of the initial Funding of the Construction Loans for the Stockton
      Plant or the Brawley Plant, the opinion of Latham & Watkins LLP (or
      such other legal counsel reasonably acceptable to the Administrative
      Agent), as California counsel to the Borrowers (covering, among other
      matters, the applicable Mortgage and customary permitting opinions for the
      applicable Plant);

              

      

    

     

    
      
        	
              	
                (iii) 

              	
                in
      the case of the initial Funding of the Construction Loans for the Burley
      Plant, the opinion of Idaho counsel to the Loan Parties reasonably
      satisfactory to the Administrative Agent (covering, among other matters,
      the Burley Deed of Trust and customary permitting opinions for Burley);
      and

              

      

    

     

    
      
        	
              	
                (iv) 

              	
                if
      reasonably requested by the Administrative Agent, opinions of reasonably
      acceptable counsel to the Major Project Parties that are parties to the
      Project Documents identified on Schedule 6.02(e)(iv)
      relating to the Plant whose initial Funding has been requested and with
      respect to which a Consent has been
delivered.

              

      

    

     

    (m) Project Documents;
Contracts; Consents.

     

    
      
        	
              	
                (i) 

              	
                The
      Administrative Agent shall have received a copy of each Project Document,
      and each amendment thereto, for the Plant with respect to which such
      Funding is requested that has been entered into after the Closing Date
      (which shall include the Pacific Ethanol Guarantees for the applicable
      Project Documents for such Greenfield Plant), each of which shall be in
      full force and effect and shall have been approved by the required Project
      Document Approval Level.

              

      

    

     

    
      
        	
              	
                (ii) 

              	
                The
      Administrative Agent shall have received a true, correct and complete copy
      (certified as such by such Borrower) of each agreement evidencing
      Contractual Obligations of such Borrower or otherwise relating to such
      Plant reasonably requested by, and not previously delivered to, the
      Administrative Agent.

              

      

    

     

    
      
        
        

      

      
        65

        
          

        

      

      
        
        

      

    

     

    
      
        	
              	
                (iii) 

              	
                The
      Administrative Agent shall have received a duly executed certificate of an
      Authorized Officer of such Borrower certifying that (A) the copies of
      each document delivered pursuant to Section 6.04(m)(i) and
      (ii) are true, correct and complete copies of such documents,
      (B) such documents are in full force and effect and no term or
      condition of any such Project Document has been amended from the form
      thereof delivered to the Administrative Agent, (C) each of the
      conditions precedent set forth in each Project Document delivered pursuant
      to Section 6.04(m)(i),
      and each other Project Document then in effect and relating to the Plant
      with respect to which such Funding is requested, that are required to be
      satisfied on or before the date of such requested Funding, if any, have
      been satisfied, or waived by the parties thereto, and (D) no material
      breach, material default or material violation by any Borrower, or to the
      knowledge of each Borrower, any Major Project Party under any such Project
      Document described in clause (C) has occurred and is
      continuing.

              

      

    

     

    
      
        	
              	
                (iv) 

              	
                The
      Administrative Agent shall have received a Consent, in form and substance
      reasonably satisfactory to the Administrative Agent, with respect to each
      Project Document, for the Plant with respect to which such Funding is
      requested, identified on Schedule 6.02(e)(iv)
      (which, in the case of Consents from non-Affiliate Project Parties, may be
      delivered on or before the Funding
Date).

              

      

    

     

    (n) Construction Contract
Schedules.  The Administrative Agent shall have received
(i) a copy of each Work Schedule provided for in any Construction
Contract for the Plant with respect to which such Funding is requested and
(ii) a copy of each Schedule of Values provided for in any such
Construction Contract, in each such case in form and substance reasonably
satisfactory to the Independent Engineer and the Administrative Agent and
certified by an Authorized Officer of the Borrowers' Agent.

     

    (o) Option.  With
respect to the Brawley Site or the Burley Site, the Administrative Agent shall
have received satisfactory evidence from the Borrower whose Plant is the subject
of such requested Funding that the option under the Brawley Option Agreement
and/or the Burley Option Agreement, as the case may be, has been duly exercised
and the Borrower owns good and marketable title to the Brawley Site and/or the
Burley Site.

     

    
      
        
        

      

      
        66

        
          

        

      

      
        
        

      

    

     

    (p) Governmental
Approvals.  The Borrower whose Plant is the subject of such
requested Funding shall have all Necessary Project Approvals required as of the
date of such requested Funding for its Plant, and the Administrative Agent shall
have received a duly executed certificate of an Authorized Officer of such
Borrower certifying that (i) attached to such certificate are true, correct
and complete copies of each such Necessary Project Approval, (ii) each such
Necessary Project Approval is in full force and effect and is final and
Non-Appealable, (iii) all Necessary Project Approvals required for such
Plant at a later date will be obtained in due course prior to the time when
needed, and (iv) each applicable Governmental Approvals Update Schedule
accurately identifies all Necessary Project Approvals necessary for such
Plant.

     

    (q) Process
Agent.  The Administrative Agent shall have received, in form
and substance reasonably satisfactory to the Administrative Agent, acceptances
from the Process Agent appointed under each additional Financing Document
delivered as a condition to such requested Funding pursuant to which a Process
Agent is required to be appointed.

     

    (r) Burley Site
Assessment.  With respect to the first Funding for the Burley
Plant, the Administrative Agent shall have received an Environmental Site
Assessment Report for the Site for such Plant, accompanied by a corresponding
reliance letter (to the extent such report does not permit reliance thereon by
the Lenders), each in form and substance reasonably satisfactory to the
Administrative Agent and the Lenders (provided that any Lender who does not
object to a request for approval of such report and such reliance letter within
fifteen (15) days following receipt by such Lender of such written request for
approval and a copy of such report and such reliance letter shall be deemed to
have given its approval, and provided that such written request specifies that
any Lender who fails to respond within such time period shall be deemed to have
approved such request).

     

    Section
6.05 Conditions to All Greenfield
Plant Construction Loan Fundings.  In addition to the
conditions set forth in Section 6.08
(Conditions
to All Fundings), the obligation of
each Tranche A Lender to make available each Funding of its Construction
Loans for the Greenfield Plants, and the release of any Construction Loan funds
deposited in or standing to the credit of the Escrow Account for transfer to the
applicable Greenfield Plant Construction Account, shall be subject to the
fulfillment of the following conditions precedent.

     

    (a) Madera and Boardman
Fundings.  Each of the Madera Funding and the Boardman Funding
shall have occurred.

     

    (b) Funding
Notice.  The Administrative Agent shall have received a Funding
Notice, as required by and in accordance with Section 2.05
(Notice
of Fundings), together with each
of the documents described below (for each Plant with respect to which a Funding
is then being requested):

     

    
      
        
        

      

      
        67

        
          

        

      

      
        
        

      

    

     

    
      
        	
              	
                (i) 

              	
                to
      the extent requested by the Independent Engineer, all invoices for Project
      Costs with respect to which such Funding is requested, each of which shall
      be certified as true, correct and complete by the Borrowers' Agent and the
      relevant Construction Contractor and substantiated by the Independent
      Engineer;

              

      

    

     

    
      
        	
              	
                (ii) 

              	
                conditional
      sworn Lien waiver statements in form and substance reasonably satisfactory
      to the Administrative Agent and the Independent Engineer evidencing
      receipt of payment by each Construction Contractor, subcontractors, and
      all other Persons who were paid from the proceeds of the then-last
      preceding Funding for the relevant Plant (which may exclude Lien waiver
      statements for amounts less than one million Dollars ($1,000,000) on an
      aggregate basis); provided, that
      if there has been no such then-last preceding Funding, such Lien waiver
      statements shall evidence receipt of all payments made prior to the date
      thereof, or then due and payable, by the Borrowers to each Construction
      Contractor and all subcontractors and all other Persons (which may exclude
      Lien waiver statements for amounts less than one million Dollars
      ($1,000,000) on an aggregate basis).  Such Lien waiver
      statements shall (A) be dated on or about the date of the Funding
      Notice (or, if earlier, on or about the date that the relevant
      construction work was completed) and (B) cover all work done and all
      sums received through the date of the then-last preceding Funding for the
      relevant Plant (or if there has been no such then last preceding Funding
      to make payments to a particular Construction Contractor or other payee,
      the date hereof).  Each such Lien waiver statement shall be
      certified as true, correct and complete by the Borrowers' Agent and shall
      be verified by the Independent
Engineer;

              

      

    

     

    
      
        	
              	
                (iii) 

              	
                a
      list of all Change Orders for such Plant to the date of such Funding
      Notice identifying those Change Orders for such Plant, identifying those
      Change Orders that were not previously submitted to the Administrative
      Agent, together with a statement by the Borrowers' Agent that copies of
      the same have been submitted to the Independent Engineer prior to the date
      of such Funding Notice and a list of all contemplated Change Orders for
      such Plant that have not yet been entered into, together with confirmation
      that each such Change Order (other than any contemplated Change Order
      which has not been agreed to by the relevant Borrower) is in compliance
      with Section 7.02(m)(iii)
      (Negative
      Covenants – Project Documents);
      and

              

      

    

     

    
      
        
        

      

      
        68

        
          

        

      

      
        
        

      

    

     

    
      
        	
              	
                (iv) 

              	
                to
      the extent requested by the Independent Engineer or the Administrative
      Agent, evidence (which shall include the Lien waiver statements required
      under Section 6.05(b)(iii)
      and a detailed receipt for payments itemized by Line Item in the
      Construction Budget for such Plant) reasonably satisfactory to the
      Independent Engineer that the full amount of the proceeds of the then-last
      preceding Funding for such Plant has been paid out by the Borrowers or the
      Construction Contractors to the Persons with respect to whom such Funding
      proceeds were disbursed and otherwise in accordance with this Agreement;
      provided
      that if there has been no such then-last preceding Funding for such Plant,
      such evidence shall (if requested by the Administrative Agent or the
      Independent Engineer) confirm receipt of all payments due and payable with
      respect to such Plant by the Borrowers to the Construction Contractors,
      all subcontractors and all other Persons since the date
      hereof.

              

      

    

     

    (c) Independent Engineer's
Certification.  The Administrative Agent shall have received an
Independent Engineer's Certificate in respect of such Funding Notice, reasonably
satisfactorily completed and duly executed by the Independent Engineer, and
confirming that (i) the Commercial Operation Date for such Plant is capable
of being completed on or before the Conversion Date Certain and
(ii) sufficient funds remain available to the Borrowers, including under
this Agreement and under the Sponsor Support Agreement, to complete such Plant
in accordance with the applicable Construction Schedule and the Transaction
Documents, and any exceptions set forth on the Exhibits thereto shall be
reasonably satisfactory to the Required Lenders.

     

    (d) Title Insurance.  With
respect to such Plant, the Administrative Agent shall have received (on or
before the date of such requested Funding) an ALTA 122 Endorsement to the
Title Insurance Policy relating to such Plant.

     

    Section
6.06 Conditions to Greenfield
Plant Top-Up Funding.  In addition to the conditions set forth
in Section 6.08
(Conditions
to All Fundings), the obligation of
each Tranche A Lender to make available each Greenfield Plant Top-Up
Funding shall be subject to the fulfillment of the following conditions
precedent.

     

    (a) Commercial
Operations.  The Commercial Operation Date for the relevant
Plant shall have occurred.

     

    (b) Operating
Budget.  The Administrative Agent shall have received an
Operating Budget for the relevant Plant for the remaining months of the
then-current calendar year, which budget shall be reasonably satisfactory to the
Administrative Agent and the Independent Engineer.

     

    (c) Title Insurance.  With
respect to the Greenfield Plant whose Excess Construction Loan Commitments are
requested to be drawn, the Administrative Agent shall have received (on or
before the date of the requested Funding) an ALTA 122 Endorsement to the
Title Insurance Policy relating to such Plant.

     

    
      
        
        

      

      
        69

        
          

        

      

      
        
        

      

    

     

    Section
6.07 Conditions to Term Loan
Funding.  In addition to the conditions set forth in Section 6.08
(Conditions
to All Fundings), the obligation of
each Lender to make its Term Loans shall be subject to the fulfillment of the
following conditions precedent.

     

    (a) Term
Notes.  Each requesting Construction/Term Lender shall have
received a Term Note payable to such Lender in the amount of such Lender's Term
Loan Commitment, duly executed by each Borrower and otherwise complying with the
provisions of Section 2.07
(Evidence
of Indebtedness).

     

    (b) Construction Loan
Payoff.  All of the Construction Loans shall have been or shall
simultaneously be repaid with the proceeds of such Term Loans.

     

    (c) Commercial Operation
Date.  The Commercial Operation Date for each Plant whose owner
has not been released pursuant to Section 7.04
(Release
of Borrower) shall have
occurred.

     

    (d) Insurance.  The
Administrative Agent shall have received binders or certificates evidencing the
commitment of insurers to provide the insurance policies required by Section 7.01(h)
(Affirmative
Covenants - Insurance), together with
evidence of the payment of all premiums then due and payable 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, and the Administrative Agent shall have received a certificate of
the Insurance Consultant in substantially the form of Exhibit 6.01(k)
with respect thereto.

     

    (e) Title Insurance.  The
Administrative Agent shall have received (on or before the date of the requested
Funding) an ALTA 122 Endorsement to each Title Insurance
Policy.

     

    (f) Security.  The
Administrative Agent shall have received evidence that (i) the Collateral
Agent continues to have a perfected first priority security interest in all
right, title and interest of each Borrower and the Pledgor in and to the
Collateral prior to all other Liens thereon and subject only to Permitted Liens,
and (ii) all Governmental Approvals that are necessary or desirable in
order to establish, protect, preserve and perfect the Collateral Agent's Liens
have been duly made or taken and are in full force and effect.

     

    (g) Operating Budget and
Plan.  The Administrative Agent shall have received a copy of
the then-current Operating Budget for the Project, which shall include all
Plants which respect to which any Fundings have been disbursed, in form and
substance reasonably satisfactory to the Administrative Agent.

     

    (h) Project
Accounts.  The Project Accounts shall continue to be maintained
in accordance with this Agreement and shall contain all amounts, if any,
required to be deposited therein as of the Conversion Date, including the amount
on deposit in or standing to the credit of the Debt Service Reserve Account
which shall be at, or shall be funded on the Conversion Date up to, a level no
less than fifty percent (50%) of the Debt Service Reserve
Requirement.

     

    
      
        
        

      

      
        70

        
          

        

      

      
        
        

      

    

     

    (i) Legal
Opinions.  The Administrative Agent shall have received (on or
before the date of such requested Funding) legal opinions from counsel to the
Loan Parties, each in form and substance reasonably satisfactory to the
Administrative Agent, addressing those matters relating to the Project, the
Transaction Documents and the transactions contemplated therein, and the
Collateral as are customarily provided in connection with "term conversions" and
as the Administrative Agent may reasonably request.

     

    Section
6.08 Conditions to All
Fundings.  The obligation of each Lender to make available each
Funding of its Loans (including the release of any Tranche B Construction
Loan funds deposited into or standing to the credit of the Escrow Account for
transfer to any Construction Account), the occurrence of the Closing Date and
the issuance of any Letter of Credit, 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 (except in connection with the occurrence of the Closing
Date or the issuance of a Letter of Credit), as required by and in accordance
with Section 2.05
(Notice
of Fundings), which shall
certify that:

     

    
      
        	
              	
                (i) 

              	
                the
      Borrowers are in compliance with all conditions set forth in this Section 6.08,
      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 the Borrowers' delivery 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
      Funding Representations and Warranties made by each of the Borrowers, the
      Pledgor and Pacific Ethanol 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) 

              	
                since
      September 30, 2006, no Material Adverse Effect has occurred and is
      continuing.

              

      

    

     

    
      
        
        

      

      
        71

        
          

        

      

      
        
        

      

    

     

    (b) Government
Approvals.  Pacific Holding and each other Borrower with
respect to whose Plant a Funding is being requested shall have all Necessary
Project Approvals required as of the date of such requested Funding for such
Plant, and the Administrative Agent shall have received a duly executed
certificate of an Authorized Officer of the relevant Borrowers certifying that
(i) attached to such certificate are true, correct and complete copies of
each such Necessary Project Approval not previously delivered to the
Administrative Agent, (ii) each such Necessary Project Approval is in full
force and effect and is final and Non-Appealable, (iii) all Necessary
Project Approvals required for such Plant at a later date will be obtained in
due course prior to the time when needed, and (iv) each applicable
Governmental Approvals Update Schedule accurately identifies all Necessary
Project Approvals necessary for such Plant.

     

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

     

    (d) No
Litigation.

     

    
      
        	
              	
                (i) 

              	
                No
      action, suit, proceeding or investigation shall have been instituted or
      threatened against any of Pacific Holding, the Pledgor, or any Plant or
      Borrower with respect to whose Plant any Funding has been made or is being
      requested that, individually or in the aggregate, has had or could
      reasonably be expected to have a Material Adverse Effect;
    and

              

      

    

     

    
      
        	
              	
                (ii) 

              	
                no
      action, suit, proceeding or investigation shall have been instituted or
      threatened against any Project Party that is party to any Project Document
      with Pacific Holding or that relates to any Borrower or Plant with respect
      to which a Funding has been made or is being requested that, individually
      or in the aggregate, has had or could reasonably be expected to have a
      Material Adverse Effect.

              

      

    

     

    (e) 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 for which a
Funding is being requested, (ii) no Event of Taking relating to any Equity
Interests in Pacific Holding or any other Borrower with respect to which any
Funding is being requested shall have occurred and be continuing, or
(iii) no Event of Taking with respect to a material part of any Plant with
respect to which any Funding is being requested shall have
occurred.

     

    
      
        
        

      

      
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    (f) 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 3.13
(Fees), and all costs and
expenses (including reasonable and documented costs, fees and expenses of legal
counsel) for which invoices have been presented.

     

    (g) Working Capital Loan
Fundings.  With respect to the Funding of any Working Capital
Loan (other than those resulting from a draw on a Letter of
Credit):

     

    
      
        	
              	
                (i) 

              	
                The
      Administrative Agent shall have received a duly executed Funding Notice,
      as required by and in accordance with Section 2.05
      (Notice
      of Fundings), accompanied
      by certified evidence of the Working Capital Expenses with respect to
      which such Funding has been requested.  For the purposes of this
      Section 6.08(g),
      on and after the Conversion Date (or, if earlier, the Conversion Date
      Certain) any reference in this Section 6.08
      to (i) "each Plant with respect to which such Funding is requested"
      (or any similar reference) shall be deemed to be a reference to all Plants
      with respect to which any Funding has (since the date hereof) been made or
      is being requested, (ii) a "Funding Default" shall be deemed to be a
      reference to a "Default", and (iii) a "Funding Representation and
      Warranty" shall be deemed to be a reference to a "representation and
      warranty".

              

      

    

     

    
      
        	
              	
                (ii) 

              	
                From
      and after Commercial Operation Date for the relevant Plant, the
      Administrative Agent shall have received the most recent Borrowing Base
      Certificate required to be delivered pursuant to Section 7.03(n)
      (Reporting
      Requirements), executed by the Borrowers' Agent, together with
      supporting schedules, which certificate shall be in form and substance
      reasonably satisfactory to the Administrative
  Agent.

              

      

    

     

    ARTICLE
VII

     

    COVENANTS

     

    Section
7.01 Affirmative
Covenants.  Each Borrower agrees with each Agent and each
Lender that, until the Discharge Date, each of the Borrowers 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.

     

    
      
        
        

      

      
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    (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.  On and after the date of the initial Funding
Notice with respect to any Plant, the applicable Borrower shall own, construct,
operate and maintain (or cause to be operated and maintained) each such Plant in
all material respects in accordance with (i) the terms and provisions of
the Transaction Documents, (ii) all applicable Governmental Approvals and
Laws and (iii) Prudent Ethanol Operating Practice.

     

    (d) Construction and Completion
of Project; Maintenance of Properties.

     

    
      
        	
              	
                (i) 

              	
                On
      and after the date of the initial Funding Notice with respect to any
      Plant, the applicable 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 related to each such Plant that are
      necessary or useful in the proper conduct of its
  business.

              

      

    

     

    
      
        	
              	
                (ii) 

              	
                On
      and after the date of the initial Funding Notice with respect to each
      Plant, and except as required in connection with the construction of the
      Project, the Borrowers shall not permit any such 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) 

              	
                On
      and after the date of the initial Funding Notice, Pacific Holding and each
      other Borrower with respect to whose Plant a Funding has been made or is
      being requested shall do or cause to be done all things necessary to
      preserve and keep in full force and effect (A) its limited liability
      company existence and (B) its material patents, trademarks, trade names,
      copyrights, franchises and similar
rights.

              

      

    

     

    
      
        
        

      

      
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    (e) Payment of
Obligations.  Each Borrower shall pay and discharge as the same
shall become due and payable (i) all tax liabilities, assessments and
governmental charges or levies upon it or its properties or assets,
(A) unless the same are subject to a Contest or (B) other than 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, (ii) all of its obligations and liabilities under its Contractual
Obligations (other than any such failure that could not reasonably be expected
to have a Material Adverse Effect and that would not otherwise result in an
Event of Default) and (iii) all lawful claims that, if unpaid, would by law
become a Lien upon its properties (other than Permitted Liens), unless the same
are subject to a Contest.

     

    (f) Governmental
Approvals.  On and after the date of the initial Funding
Notice, Pacific Holding and each other Borrower with respect to whose Plant a
Funding has been made or is being requested shall maintain in full force and
effect, in the name of the relevant Borrower, all Necessary Project Approvals
and obtain all Deferred Approvals (all of which shall be reasonably satisfactory
to the Administrative Agent) prior to the time it is required to be obtained
hereunder, including as set forth on Part B of any
Governmental Approvals Update Schedule, but in any event no later than the date
required to be obtained under applicable Law (other than any such failure to
maintain or obtain that could not reasonably be expected to have a Material
Adverse Effect on the relevant Borrower or Plant).

     

    (g) Use of Proceeds and Cash
Flow.

     

    
      
        	
              	
                (i) 

              	
                Except
      in the case of Excess Construction Loan Commitments (A) all proceeds
      of the In-Progress Plant 1 Construction Loans and the In-Progress
      Plant 2 Construction Loans shall be applied to (1) fund that
      portion of the Debt Service Reserve Requirement required to be funded with
      such Loans (which amount shall be agreed upon by the Administrative Agent
      and the Borrowers' Agent, acting reasonably, prior to the Funding Date for
      such Plant and is intended to represent fifty percent (50%) of the Debt
      Service Reserve Requirement allocable to the Loans for such Plant
      following the Conversion Date) and (2) to Project Costs for the
      Greenfield Plants and (B) all proceeds of the Greenfield Plant
      Construction Loans shall be applied to Project Costs (or, in the case of
      Sponsor Support Reimbursement Fundings, for reimbursement of Project
      Costs) for the Greenfield Plant with respect to which such Funding was
      requested.  All Loans proceeds shall be applied in accordance
      with the Funding Notice pursuant to which such Loans were
      funded.

              

      

    

     

    
      
        	
              	
                (ii) 

              	
                All
      proceeds of the Greenfield Plant Top-Up Fundings shall be applied to
      Project Costs, Required Equity Contributions or otherwise as permitted
      under this Agreement.

              

      

    

     

    
      
        	
              	
                (iii) 

              	
                All
      proceeds of the Term Loans shall be applied to repay the Construction
      Loans.

              

      

    

     

    
      
        
        

      

      
        75

        
          

        

      

      
        
        

      

    

     

    
      
        	
              	
                (iv) 

              	
                All
      proceeds of Working Capital Loans (other than those resulting from a draw
      on a Letter of Credit) shall be applied to Working Capital
      Expenses.

              

      

    

     

    
      
        	
              	
                (v) 

              	
                All
      proceeds of the Required Equity Contributions shall be applied to Project
      Costs.

              

      

    

     

    
      
        	
              	
                (vi) 

              	
                The
      Borrowers shall cause all Cash Flow, Insurance Proceeds and Condemnation
      Proceeds to be applied in accordance with Article VIII
      (Project
      Accounts).

              

      

    

     

    (h) Insurance.  Without
cost to any Senior Secured Party, on and after the date of the initial Funding
Notice for each Plant, 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.  In the event 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 the
Borrowers) that accurately reflect all of its business affairs, transactions and
the documents and other instruments that underlie or authorize all of its
limited liability company actions.  On and after the date of the
initial Funding Notice (other than the Funding Notice requesting the
Tranche B Escrow Disbursement), Pacific Holding and each other Borrower
with respect to whose Plant a Funding has been made or is being requested 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 respective Plant), to examine its limited liability, 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 (provided that so long as no Default or Event of Default has
occurred and is continuing, such visits or inspections shall be at the expense
of the Borrowers only once per Quarterly Period for each such Person) and at
such reasonable times during normal business hours and as often as may be
reasonably desired, upon reasonable advance notice to such Borrower; provided that if a
Default or Event of Default has occurred and is continuing, any Agent, or
Consultant (or, in the case of any Event of Default, any Lender) (or any of
their respective officers or designated representatives) may do any of the
foregoing at the expense of the Borrowers at any time during normal business
hours and without advance notice.

     

    
      
        
        

      

      
        76

        
          

        

      

      
        
        

      

    

     

    (j) Operating
Budgets.

     

    
      
        	
              	
                (i) 

              	
                The
      Borrowers shall, not later than thirty (30) days before the
      Commercial Operation Date for any Plant, adopt an Operating Budget with
      respect to such Plant and an updated aggregate Operating Budget for the
      Project from such date to the conclusion of the calendar year immediately
      following the then-current calendar year and provide a copy of such
      operating plan and budget at such time to the Administrative
      Agent.

              

      

    

     

    
      
        	
              	
                (ii) 

              	
                No
      less than sixty (60) days in advance of the beginning of each
      calendar year with respect to each Plant that has achieved its Commercial
      Operation Date, the Borrowers shall similarly adopt an operating plan and
      a budget setting forth in reasonable detail the projected requirements for
      Operation and Maintenance Expenses and Maintenance Capital Expenses for
      the ensuing two (2) calendar years for each Plant that has achieved
      its Commercial Operation Date and an aggregate operating plan and budget
      for the Project and provide a copy of each such operating plan and budget
      at such time to the Administrative Agent.  (Each such operating
      plan and budget is herein called an "Operating
      Budget").

              

      

    

     

    
      
        	
              	
                (iii) 

              	
                Each
      Operating Budget shall include the same items and detail as provided in
      the Financial Model and be prepared in accordance with a form similar to
      the Madera Operating Budget delivered on the Closing Date (or a form
      otherwise approved by the Administrative Agent) and shall become effective
      upon approval of the Administrative Agent (acting in consultation with the
      Consultants if the Administrative Agent reasonably determines that such
      consultation is necessary or desirable).  The Administrative
      Agent's approval of such updated Operating Budgets shall not be
      unreasonably withheld or
delayed.

              

      

    

     

    
      
        	
              	
                (iv) 

              	
                If
      the Borrowers have not adopted an annual Operating Budget covering the
      applicable two-year period for each Plant that has achieved its Commercial
      Operation Date and for the Project before the beginning of any calendar
      year following the Madera Funding or any Operating Budget adopted by the
      Borrowers has not been accepted by the Administrative Agent before the
      beginning of any upcoming calendar year, the Operating Budget for each
      relevant Plant for the preceding calendar year shall, until the adoption
      of an annual Operating Budget by the Borrowers and acceptance of such
      Operating Budget by the Administrative Agent, be deemed to be in force and
      effective as the annual Operating Budget for such Plant for such upcoming
      calendar year; provided that
      if the initial Operating Budget for any Plant is not approved by the
      Administrative Agent, the Borrowers may use a budget for such Plant that
      is consistent with the Financial Model until an initial Operating Budget
      is approved, and the Borrowers shall work diligently to prepare an initial
      Operating Budget for each Plant that is acceptable to the Administrative
      Agent.

              

      

    

     

    
      
        
        

      

      
        77

        
          

        

      

      
        
        

      

    

     

    
      
        	
              	
                (v) 

              	
                If
      either the actual Operation and Maintenance Expenses or Maintenance
      Capital Expenses for any Fiscal Quarter is in excess of the applicable
      Permitted Operating Budget Deviation Levels, the Borrowers may deliver to
      the Administrative Agent and the Consultants a proposed updated Operating
      Budget(s), which shall be subject to approval by the Administrative
      Agent.  Such proposed updated Operating Budget(s) shall not
      become effective until approved by the Administrative
    Agent.

              

      

    

     

    
      
        	
              	
                (vi) 

              	
                Each
      Operating Budget delivered to the Administrative Agent pursuant to this
      Section 7.01(j)
      shall be accompanied by a memorandum addressing all material
      deviations from the Financial
Model.

              

      

    

     

    (k) Performance
Tests.

     

    
      
        	
              	
                (i) 

              	
                The
      Administrative Agent and the Independent Engineer have the right to
      witness and verify any Performance Tests.  The Borrowers shall
      give the Administrative Agent and the Independent Engineer notice
      regarding each proposed Performance Test no less than five (5) Business
      Days prior to any Performance Test.  If, upon completion of any
      Performance Tests, the Borrowers have decided to use such Performance
      Tests as the basis for declaring the Commercial Operation Date for any
      Plant, they shall so notify the Administrative Agent and the Independent
      Engineer and shall deliver a copy of all test results supporting the
      results of such Performance Test, accompanied by supporting data and
      calculations including a report that indicates the Borrowers' preliminary
      opinions as to results the Performance Tests (each a "Performance Test
      Report") and the Independent Engineer will, upon a thorough review
      of such Performance Test Report, certify in writing to the Administrative
      Agent, within five (5) Business Days of the receipt of such
      Performance Test Report, the results of the Performance Tests and
      confirming that such Performance Tests were performed in accordance with
      applicable ethanol industry standards or deliver a report to the
      Administrative Agent and the Borrowers' Agent setting forth in reasonable
      detail any objections of the Independent Engineer to such Performance Test
      Report.  If any such valid objections are made, then the
      Borrowers shall be permitted to address such objections to the reasonable
      satisfaction of the Independent Engineer or conduct additional Performance
      Tests in accordance with this Section
      7.01(k).

              

      

    

     

    
      
        	
              	
                (ii) 

              	
                Each
      Performance Test shall be conducted in accordance with the Approved
      Performance Test Protocols.

              

      

    

     

    
      
        
        

      

      
        78

        
          

        

      

      
        
        

      

    

     

    (l) Project
Documents.

     

    
      
        	
              	
                (i) 

              	
                On
      and after the Closing Date, Pacific Holding and each other Borrower with
      respect to whose Plant a Funding has been made or is being requested shall
      maintain in full force and effect, shall defend their material rights and
      shall exercise all material rights, discretion and remedies under each
      Project Document to which it is a party, if any, in accordance with its
      terms and in a manner consistent with (and subject to) such Borrower's
      obligations under the Financing Agreements; provided, that
      the relevant Borrower(s) shall not be required to undertake any
      enforcement actions against any Project Party pursuant to this Section 7.01(l)(i)
      that, in the Borrowers' reasonable business judgment, is not necessary or
      advisable, unless otherwise instructed by the Administrative Agent, acting
      reasonably.

              

      

    

     

    
      
        	
              	
                (ii) 

              	
                On
      and after the Closing Date, promptly upon execution of any Project
      Document by Pacific Holding or any other Borrower with respect to whose
      Plant a Funding has been made or is being requested, the Borrowers shall
      deliver to the Administrative Agent certified copies of such Project
      Document and, if reasonably requested by the Administrative Agent, any
      Ancillary Documents related
thereto.

              

      

    

     

    
      
        	
              	
                (iii) 

              	
                If,
      at any time, the Madera DG Offtake Agreement is scheduled to expire in
      accordance with its terms within ninety (90) days or less, the Borrower
      shall ensure that a replacement contract, on terms and conditions
      reasonably satisfactory to the Administrative Agent, is entered into with
      a counterparty reasonably acceptable to the Administrative Agent, no less
      than thirty (30) days prior to its expiration (it being acknowledged that
      an agreement with Pacific Ag Products on terms and conditions
      substantially similar to the DG Offtake Agreement for the Boardman
      Plant shall
      be deemed to be
satisfactory).

              

      

    

     

    
      
        	
              	
                (iv) 

              	
                No
      Borrower shall, without the prior approval of the Administrative Agent,
      agree to extend the period of time provided for pick-up and taking of (A)
      ethanol provided for in Section 2.2 of each Ethanol Offtake Agreement
      with Kinergy or (B) Distillers Grains provided for in Section 2.2 of each
      DG Offtake Agreement with Pacific Ag
Products.

              

      

    

     

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

     

    
      
        	
              	
                (i) 

              	
                The
      provisions of this Section 7.01(m)(i)
      shall apply to Pacific Holding and to each other Borrower with respect to
      whose Plant a Funding has been made or is being requested.  On
      and after the date of the initial Funding Notice (other than the Funding
      Notice requesting the Tranche B Escrow Disbursement), and subject to
      Section 7.02(f)(vii)
      (Negative
      Covenants – Asset Dispositions) with respect
      to the Storage Facilities, 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.  If any Borrower shall at any time
      acquire any real property or leasehold or other interest in real property
      (including, to the extent reasonably requested by the Administrative
      Agent, with respect to any material easement or right-of-way not covered
      by any Mortgage), such Borrower shall promptly upon such acquisition,
      execute, deliver and record a supplement to the relevant Mortgage,
      reasonably satisfactory in form and substance to the Administrative Agent,
      subjecting such real property or leasehold or other interest to the Lien
      and security interest created by such Mortgage.  If reasonably
      requested by the Administrative Agent, the Borrowers shall obtain an
      appropriate endorsement or supplement to, as applicable, the
      Title Insurance Policy insuring the Lien of the Security Documents in
      such additional property, subject only to Permitted
  Liens.

              

      

    

     

    
      
        
        

      

      
        79

        
          

        

      

      
        
        

      

    

     

    
      
        	
              	
                (ii)

              	
                Prior
      to the acquisition or lease of any such additional real property interests
      (other than easements that do not involve soil disturbance), the Borrowers
      shall deliver to the Administrative Agent an Environmental Site Assessment
      Report(s) with respect to such real property (if, in the reasonable
      determination of the Administrative Agent, acting in consultation with the
      Independent Engineer, such Environmental Site Assessment Report(s) with
      respect to such real property interests is warranted), in each case, along
      with a corresponding reliance letter from the consultant issuing such
      report(s) (to the extent such report(s) does not permit reliance thereon
      by the Lenders).  Each such environmental report shall be in
      form and substance reasonably satisfactory to the Administrative
      Agent.

              

      

    

     

    (n) Maintenance of Liens;
Creation of Liens on Newly Acquired Property.

     

    
      	
              (i)  

            	
              On
      and after the date of the initial Funding Notice (other than the Funding
      Notice requesting the Tranche B Escrow Disbursement), the applicable
      Borrowers shall take or cause to be taken all action necessary or
      desirable to maintain and preserve the Lien of the Security Documents that
      have been executed as of such date and the first-ranking priority
      thereof.

            

    

     

    
      	
              (ii)  

            	
              On
      and after the date of the initial Funding Notice for each Plant (or in the
      case of Pacific Holding, the initial Funding), the applicable Borrowers
      shall take all actions required to cause each Additional Project Document
      relating to such Plant (or to which Pacific Holding is a party) to be or
      become subject to the Lien of the Security Documents (whether by amendment
      to any Security Agreement or
otherwise).

            

    

     

    
      	
              (iii)  

            	
              Simultaneously
      with the making of any investment in Cash Equivalents, Pacific Holding
      (after the Closing Date) and each other Borrower (after the initial
      Funding Date for such Borrower's Plant) shall take or cause to be taken
      all actions to require such Cash Equivalent in the Project Accounts or any
      Local Account with respect to which a Blocked Account Agreement has been
      entered into to be or become subject to a first priority perfected the
      Lien in favor of the Senior Secured
Parties.

            

    

     

    (o) Certificate of
Formation.  Each Borrower shall observe in all material
respects all of the separateness and other provisions and procedures of its
certificate of formation and Borrower LLC Agreement.

     

    (p) Separateness.  Each
Borrower shall comply at all times with the separateness provisions set forth on
Schedule 5.23.

     

    
      
        
        

      

      
        80

        
          

        

      

      
        
        

      

    

     

    (q) Further
Assurances.  Upon written request of the Administrative Agent,
the Borrowers 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):

     

    
      
        	
              	
                (i) 

              	
                that
      are necessary or advisable for compliance with Section 7.01(n)(i)
      (Affirmative Covenants - Maintenance of Liens; Creation of Liens on Newly
      Acquired Property);

              

      

    

     

    
      
        	
              	
                (ii) 

              	
                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

              

      

    

     

    
      
        	
              	
                (iii) 

              	
                for
      the purposes of facilitating the proper exercise of rights and powers
      granted to the Lenders or the Agents under this Agreement or any other
      Financing Document.

              

      

    

     

    (r) First Priority
Ranking.  The Borrowers shall cause their payment obligations
with respect to the Loans to constitute direct senior secured obligations of
each Borrower and to rank no less than pari passu in priority of payment, in
right of security and in all other respects to all other Indebtedness (other
than as contemplated by Sections 8.08(b)
and (c) (Revenue
Account)
with respect to payment priorities) of the Borrowers.

     

    (s) Quarterly
Calculations.

     

    
      
        	
              	
                (i) 

              	
                Not
      more than three (3) Business Days prior to each Quarterly Payment
      Date, the Borrowers shall provide to the Administrative Agent a
      calculation of the Debt Service Reserve Requirement, certified by a
      Financial Officer of the Borrowers'
Agent.

              

      

    

     

    
      
        	
              	
                (ii) 

              	
                Not
      more than three (3) Business Days prior to each Quarterly Payment
      Date on which there are funds standing to the credit of the Prepayment
      Holding Account, the Borrowers shall calculate the Historical Debt Service
      Coverage Ratio and the Prospective Debt Service Coverage Ratio, and shall
      provide written evidence to the Accounts Bank of such calculations
      certified by a Financial Officer of the Borrowers' Agent.  Each
      such calculation shall be subject to review by the Administrative
      Agent.

              

      

    

     

    
      
        
        

      

      
        81

        
          

        

      

      
        
        

      

    

     

    (t) Interest Rate Protection
Agreement.  From the date of the initial Funding Notice for
each Plant (other than the Funding Notice requesting the Tranche B Escrow
Disbursement), the Borrowers shall have in place Interest Rate Protection
Agreements with respect to at least fifty percent (50%) of the aggregate
principal amount of all Loans projected to be outstanding with respect to each
such Plant (or, after the Conversion Date, with respect to the Term Loans) from
time to time; provided, that the
Borrowers may not enter into Interest Rate Protection Agreements for notional
amounts, in the aggregate at the time of the execution thereof, in excess of the
aggregate principal amount of the Construction Loans or Term Loans, as
applicable, outstanding on the date of such transaction.

     

    (u) Surveys.  The
Borrowers shall deliver to the Administrative Agent a reasonably satisfactory
as-built Survey for each Plant within ninety (90) days following Final
Completion for such Plant, which Survey shall show that such Plant has all real
property interests required by the Financing Documents and shall show no Liens
other than Permitted Liens.

     

    (v) Commodity Hedging
Programs.  On or before the Closing Date, the Administrative
Agent has received a master Commodity Risk Management Plan for the Project which
has been approved by the Administrative Agent.  The Borrowers may,
from time to time, amend such Commodity Risk Management Plant; provided that any
material changes thereto shall require the prior written approval of the
Administrative Agent.

     

    (w) Debt Service
Reserve.  The Borrowers shall ensure that the Debt Service
Reserve Account is fully funded to the required amount within one (1) year
following the Conversion Date.

     

    (x) The Commercial Operation
Date.  The Borrowers shall cause the Commercial Operation Date
for each Greenfield Plant with respect to which a Funding has been made to occur
on or before the Conversion Date Certain.

     

    (y) Final
Completion.  The Borrowers shall cause Final Completion for
each Plant with respect to which a Funding has been made to occur on or before
the date that is (i) in the case of the Madera Plant and the Boardman
Plant, one hundred twenty (120) days after such Plant has achieved its
Commercial Operation Date and (ii) in the case of each of the Greenfield
Plants, ninety (90) days after such Plant shall have achieved its
Commercial Operation Date.

     

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

     

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

     

    
      
        	
              	
                (i) 

              	
                the
      Obligations;

              

      

    

     

    
      
        
        

      

      
        82

        
          

        

      

      
        
        

      

    

     

    
      
        	
              	
                (ii) 

              	
                Indebtedness
      under the Permitted Commodity Hedging
  Arrangements;

              

      

    

     

    
      
        	
              	
                (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 two million Dollars ($2,000,000) at any
      one time outstanding;

              

      

    

     

    
      
        	
              	
                (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 or other cash management services 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 two million Dollars ($2,000,000) and, with respect to each Plant,
      in an aggregate amount not to exceed four hundred thousand Dollars
      ($400,000);

              

      

    

     

    
      
        	
              	
                (vi) 

              	
                Indebtedness
      in the nature of any Guaranty of any Borrower made on behalf of any other
      Borrower, to the extent the underlying guaranteed obligation is permitted
      under the Financing Documents;
and

              

      

    

     

    
      
        	
              	
                (vii) 

              	
                Project
      Company Subordinated Debt in an amount not to exceed, in the aggregate,
      fifty million Dollars ($50,000,000) and which shall, in all cases, be
      unsecured.

              

      

    

     

    (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 pursuant to the
      Security Documents;

              

      

    

     

    
      
        	
              	
                (ii) 

              	
                Liens
      for taxes, assessments and other governmental charges that are not yet due
      or the payment of which is the subject of a
  Contest;

              

      

    

     

    
      
        
        

      

      
        83

        
          

        

      

      
        
        

      

    

     

    
      
        	
              	
                (iii) 

              	
                Liens
      of carriers, warehousemen, mechanics and materialmen incurred in the
      ordinary course of business (A) for sums not yet due or the payment
      of which is the subject of a Contest, (B) with respect to any Plant with
      respect to which no Funding has been made or is being requested, with
      respect only to sums that are not past due more than sixty (60) days or
      (C) otherwise during the construction period for any Plant, in
      amounts not in excess of one million Dollars ($1,000,000) in the aggregate
      for sums that are not more than sixty (60) days past due; provided that
      the applicable Title Insurance Policies remain free from mechanics' liens
      exceptions as contemplated by the ALTA 122
  Endorsement;

              

      

    

     

    
      
        	
              	
                (iv) 

              	
                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 (including pursuant to the title commitment and survey conditions
      precedent set forth in Sections 6.01(r)
      (Conditions
      to Closing - Title Insurance) and 6.04(f) (Conditions
      to First Funding for Each Greenfield Plant - Title Insurance));

              

      

    

     

    
      
        	
              	
                (v) 

              	
                cash
      collateral for bonds permitted under Section 7.02(a)(iii)
      (Negative
      Covenants - Restrictions on Indebtedness of the Borrowers) or otherwise,
      but only to the extent that the amount of such cash collateral is below
      the minimum issuance amount for Letters of Credit as provided in Section 2.04(b)
      (Letters
      of Credit) and provided that
      such cash collateral does not exceed two million Dollars ($2,000,000) in
      the aggregate and, with respect to cash collateral other than in
      connection with such bonds, one million Dollars ($1,000,000) in the
      aggregate;

              

      

    

     

    
      
        	
              	
                (vi) 

              	
                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);

              

      

    

     

    
      
        
        

      

      
        84

        
          

        

      

      
        
        

      

    

     

    
      
        	
              	
                (vii) 

              	
                easements
      granted by any Borrower to any utility serving such Borrower's Plant as
      required for the construction or operation of such Plant; provided, that
      in each such case:

              

      

    

     

    
      	
              (A)  
        

            	
              such
      easement will not adversely affect the costs under any Construction
      Contract or any other Project
Costs;

            

    

     

    
      	
              (B)   
        

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

            

    

     

    
      	
              (C)   
        

            	
              such
      easement has been approved by the Independent
  Engineer;

            

    

     

    
      
        	
              	
                (viii) 

              	
                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 construction or operations of such Plant or its related
      transportation plans and facilities;
and

              

      

    

     

    
      
        	
              	
                (ix) 

              	
                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.

              

      

    

     

    (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 in (i) Cash Equivalents, (ii) investments received 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) in the case of Pacific Holding, investments in the
other Borrowers.

     

    (d) Change in
Business.  No Borrower shall (i) enter into or engage in
any business other than the ownership, operation, maintenance, development,
start-up, testing, 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 is contemplated as of the date
hereof.

     

    
      
        
        

      

      
        85

        
          

        

      

      
        
        

      

    

     

    (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
pursuant to the Pledge Agreements or, if necessary, a supplement thereto or a
pledge and security agreement in substantially the form of the Pledge
Agreements.

     

    (f) Asset
Dispositions.  Following the occurrence of the initial Funding
Date with respect to each Plant (or, in the case of Pacific Holding, the initial
Funding) the applicable Borrowers shall not sell, lease, assign, transfer or
otherwise dispose of assets of such Plant or Borrower (other than Products),
whether now owned or hereafter acquired, except:

     

    
      
        	
              	
                (i) 

              	
                disposal
      of assets that are promptly replaced in accordance with the then-current
      Operating Budgets;

              

      

    

     

    
      
        	
              	
                (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) 

              	
                the
      liquidation or use of Cash
Equivalents;

              

      

    

     

    
      
        	
              	
                (iv) 

              	
                sales
      or discounts, excluding any such sale or discount to any Affiliate of the
      Borrowers (under any Affiliated Project Document or otherwise), without
      recourse of accounts receivable arising in the ordinary course of business
      in connection with the compromise or collection
  thereof;

              

      

    

     

    
      
        	
              	
                (v) 

              	
                disposal
      of assets with a fair market value, or at a disposal price, of less than
      one million Dollars ($1,000,000) in the aggregate per Plant during any
      Fiscal Year; provided, that
      such disposal does not, and would not reasonably be expected to, adversely
      affect the construction, operation or maintenance of such
      Plant;

              

      

    

     

    
      
        	
              	
                (vi) 

              	
                with
      the prior written approval of the Independent Engineer, the disposal or
      loss of an immaterial portion of the Site for any Plant; provided, that
      such disposal or loss could not reasonably be expected to have any adverse
      impact on the construction or operations of such Plant or its related
      transportation plans and facilities;
or

              

      

    

     

    
      
        	
              	
                (vii) 

              	
                the
      Storage Facilities owned by the Borrowers may be transferred to an
      Affiliate of the Borrowers; provided, that
      each of the following conditions is
satisfied:

              

      

    

     

    
      	
              (A)   
       

            	
              such
      Affiliate is Solvent;

            

    

     

    
      
        
        

      

      
        86

        
          

        

      

      
        
        

      

    

     

    
      	
              (B)    
       

            	
              the
      relevant Borrower and such Affiliate shall have entered into a lease
      agreement with respect to such Storage Facility, in form and substance
      reasonably satisfactory to the Administrative Agent, the Collateral Agent
      and the Independent Engineer;

            

    

     

    
      	
              (C)    
       

            	
              the
      relevant Borrower shall have executed and delivered a leasehold mortgage
      for the benefit of the Collateral Agent, in form and substance reasonably
      satisfactory to the Collateral Agent and the Administrative
      Agent;

            

    

     

    
      	
              (D)    
       

            	
              the
      Administrative Agent shall have received: (1) completed requests for
      information or lien search reports, dated no more than eight (8) days
      (or such other period of time reasonably acceptable to the Administrative
      Agent) before the date of such leasehold mortgage, listing all effective
      UCC financing statements, fixture filings or other filings evidencing a
      security interest filed in Delaware, the location of such Storage Facility
      and any other jurisdictions reasonably requested by the Administrative
      Agent that name the relevant Borrower or the owner of such Storage
      Facility as a debtor, together with copies of each such UCC financing
      statement, fixture filing or other filings, which shall show no Liens
      other than Permitted Liens, (2) acknowledgement copies or stamped
      receipt copies of proper UCC financing statements (other than fixture
      filings or leasehold mortgage recordations), duly filed in all
      jurisdictions that the Administrative Agent may deem necessary or
      desirable in order to perfect and protect the first priority Liens and
      security interests created under such leasehold mortgage, and
      (3) evidence of the completion of all other actions, recordings and
      filings of or with respect to the leasehold mortgage that the
      Administrative Agent may deem necessary or desirable in order to perfect
      and protect the first priority lien created
  thereunder;

            

    

     

    
      	
              (E)    
       

            	
              the
      Administrative Agent shall have received a paid Title Insurance Policy or
      Policies with respect such leasehold mortgage, in the aggregate amount
      reasonably requested by the Administrative Agent, on a Form 1992 extended
      coverage lender's policy;

            

    

     

    
      	
              (F)    
       

            	
              the
      Administrative Agent shall have received a current Survey with respect to
      such leasehold mortgage for the Storage Facilities which shall be
      reasonably satisfactory to the Title Insurance
  Company;

            

    

     

    
      	
              (G)    
       

            	
              the
      Administrative Agent shall have received reasonably satisfactory evidence
      that such leased premises have been legally and satisfactorily partitioned
      in accordance with all applicable State and local Laws, including, in the
      case of any Plant in California, the California Subdivision Map Act, and,
      in the case of any Plant in any other jurisdiction, all comparable
      statutes or other applicable Laws;
and

            

    

     

    
      	
              (H)   
       

            	
              the
      Administrative Agent shall have received reasonably satisfactory evidence
      that all requisite insurance identified on Schedule 7.01(h)
      with respect to any such leased premises is in
  place.

            

    

     

    
      
        
        

      

      
        87

        
          

        

      

      
        
        

      

    

     

    (g) Consolidation,
Merger.  No Borrower will (i) directly or indirectly
liquidate, wind up, terminate, reorganize or dissolve itself (or suffer any
liquidation, winding up, termination, reorganization 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 any
Borrower unless such arrangement or contract (i) is fair and reasonable to
such Borrower and (ii) is an arrangement or contract that is on
arm's-length basis and contains terms no less favorable than those that would be
entered into by a prudent Person in the position of such Borrower with a Person
that is not one of its Affiliates (it being acknowledged that (1) each of the
Affiliate Project Documents are in compliance with this Section 7.02(h)
and (2) the transactions contemplated by the Sponsor Support Agreement and the
Security Documents are in compliance with this Section
7.02(h)).

     

    (i) Accounts.  (i) In
the case of Pacific Holding, from and after the Closing Date, and in the case of
each other Borrower, from and after the initial Funding Date for such Borrower's
Plant, 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 no more than five (5) Local
Accounts, each of which shall be subject to a Blocked Account Agreement
(provided that for any Local Account opened prior to the initial Funding Date,
such Blocked Account Agreement may be executed on or before the initial Funding
Date).  (ii) 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, Brawley or Burley (or the owner of any Substitute Facility) nor enter
into any partnership or joint venture.  Each of Madera, Boardman,
Stockton, Brawley 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)).

     

    (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.

     

    
      
        
        

      

      
        88

        
          

        

      

      
        
        

      

    

     

    (m) Project
Documents.

     

    
      
        	
              	
                (i) 

              	
                Subject
      to Section 7.02(m)(iii),
      on and after the date of the initial Funding Notice for the relevant Plant
      (or, in the case of Pacific Holding, the initial Funding), no Borrower
      shall direct or consent or agree to any amendment, modification,
      supplement, or waiver to or in respect of any provision of any Project
      Document to which it is a party (other than any Project Document that
      relates only to a Plant with respect to which no Funding has been made nor
      is being requested) without all applicable approvals at the relevant
      Project Document Approval
Level.

              

      

    

     

    
      
        	
              	
                (ii) 

              	
                On
      and after the date of the initial Funding Notice for the relevant Plant
      (or, in the case of Pacific Holding, the initial Funding), and except for
      collateral assignments under the Security Documents, no Borrower shall
      assign any of its rights under any Project Document to which it is a party
      (other than any Project Document that relates only to a Plant with respect
      to which no funding has been made nor is being requested) to any Person,
      or consent to the assignment of any obligations under any such Project
      Document by any other party
thereto.

              

      

    

     

    
      
        	
              	
                (iii) 

              	
                On
      and after the date of the initial Funding Notice for the relevant Plant,
      no Borrower shall enter into or approve any Change Orders for any such
      Plant without the approval of the Administrative Agent (acting in
      consultation with the Independent Engineer), such approval not to be
      unreasonably withheld or delayed, unless each of the following conditions
      is satisfied:

              

      

    

     

    
      	
              (A)  
        

            	
              the
      cost of such Change Order does not exceed one million Dollars ($1,000,000)
      or, when, taken together with all prior Change Orders for the same Plant
      that have not previously been approved by the Administrative Agent, does
      not exceed five million Dollars
($5,000,000);

            

    

     

    
      	
              (B)   
        

            	
              such
      Change Order would not reasonably be expected to prevent any Plant with
      respect to which a Funding has been made or is being requested from
      achieving its Commercial Operation Date on or before the Conversion Date
      Certain;

            

    

     

    
      	
              (C)   
        

            	
              such
      Change Order would not reasonably be expected to present a material risk
      of revocation or material modification of any Governmental
      Approval;

            

    

     

    
      	
              (D)   
        

            	
              such
      Change Order would not reasonably be expected to cause any Borrower or any
      Plant not to comply or lessen the ability of any Borrower or any Plant to
      comply in all material respects with any Law applicable to
    it;

            

    

     

    
      
        
        

      

      
        89

        
          

        

      

      
        
        

      

    

     

    
      	
              (E)   
        

            	
              such
      Change Order could not reasonably be expected to result in a Default or an
      Event of Default; and

            

    

     

    
      	
              (F)   
        

            	
              the
      Administrative Agent has received a certificate, duly executed by an
      Authorized Officer of the Borrowers' Agent, confirming that the proposed
      Change Order will comply with each of the conditions set forth in
      clauses (A)-(E) above .

            

    

     

    (n) Subordinated Debt
Agreements.  No Borrower shall enter into, except in connection
with Indebtedness of such Borrower permitted by Section 7.02(a)
(Negative
Covenants-Permitted Indebtedness), any Subordinated
Debt Agreement.

     

    (o) Additional Project
Documents.  None of Pacific Holding or any other Borrower with
respect to whose Plant a Funding has been made or is being requested shall enter
into any Additional Project Document except with the prior written approval of
the Administrative Agent.

     

    (p) Suspension or
Abandonment.  On and after the date of the initial Funding
Notice for the relevant Plant, the applicable Borrower shall not (i) permit
or suffer to exist an Event of Abandonment 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 Funding) and Section 7.01(g)
(Affirmative
Covenants - Use of Proceeds and Cash Flow).  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 that the following could not
reasonably be expected to result in an Environmental Claim (and provided that
the following are done only 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 leased by any Borrower.

     

    
      
        
        

      

      
        90

        
          

        

      

      
        
        

      

    

     

    (s) Restricted
Payments.  Except as otherwise permitted under Section 2.06(e)
(Funding
of Loans) the Borrowers shall not make any Restricted Payments unless
each of the conditions set forth below has been satisfied.

     

    
      
        	
              	
                (i) 

              	
                the
      Conversion Date shall have
occurred;

              

      

    

     

    
      
        	
              	
                (ii) 

              	
                such
      Restricted Payment is made on, or within thirty (30) days following,
      a Quarterly Payment Date (provided that such Restricted Payment is made
      only from funds on deposit in or standing to the credit of the Revenue
      Account or the Prepayment Holding Account, as the case may be, on such
      Quarterly Payment Date);

              

      

    

     

    
      
        	
              	
                (iii) 

              	
                no
      Default or Event of Default has occurred and is continuing or would occur
      as a result of such Restricted
Payment;

              

      

    

     

    
      
        	
              	
                (iv) 

              	
                each
      of the Debt Service Reserve Account and the Working Capital Reserve
      Account is fully funded to any applicable required
  level;

              

      

    

     

    
      
        	
              	
                (v) 

              	
                each
      of the Historical Debt Service Coverage Ratio and the Prospective Debt
      Service Coverage Ratio, calculated as of such Quarterly Payment Date, are
      greater than or equal
to 1.5:1;

              

      

    

     

    
      
        	
              	
                (vi) 

              	
                the
      most recent update of the Operating Budgets required pursuant to Section 7.01(j)
      (Affirmative
      Covenants - Operating Budget) shall have
      been approved by the Administrative Agent;
and

              

      

    

     

    
      
        	
              	
                (vii) 

              	
                the
      Administrative Agent has received a Restricted Payment Certificate, duly
      executed by an Authorized Officer of the Borrowers' Agent, confirming that
      each of the conditions set forth in clauses (i) through (vi) of
      this Section 7.02(s)
      have been satisfied on and as of the date such Restricted Payment is
      requested to be made, and setting forth a detailed calculation of each of
      the Historical Debt Service Coverage Ratio and Prospective Debt Service
      Coverage Ratio.

              

      

    

     

    
      
        
        

      

      
        91

        
          

        

      

      
        
        

      

    

     

    (t) Construction
Budget.  From and after the date of the initial Funding Notice
for each Plant, the Borrowers, without the prior written approval of the
Administrative Agent and the Independent Engineer, may not reallocate any
portion of any Line Item of the Construction Budget for such Plant except to
(i) reallocate the Contingency Line Item to pay for Change Orders permitted
under this Agreement, (ii) pay for fees and expenses of advisors and
consultants (including legal counsel) incurred in connection with the
transactions contemplated by the Transaction Documents in excess of the amounts
then budgeted, up to ten thousand Dollars ($10,000) in any calendar month or one
hundred thousand Dollars ($100,000) in any calendar year, (iii) apply
cost-savings from any completed Line Item (which completion has been confirmed
by the Independent Engineer) to one or more other Line Items, (iv) reflect
increased costs funded under the Sponsor Support Agreement or other documented
voluntary equity contributions made to the Borrowers to pay for such increased
costs, (v) reallocate no more than fifteen percent (15%) in the aggregate
of the total value of any Line Item to one or more other Line Items, or (vi) in
addition to the reallocation permitted pursuant to Sections 7.02(t)(i)-(v),
reallocate amounts from the Contingency Line Item to other Line Items with the
prior written consent of the Independent Engineer.

     

    (u) Commodity Hedging
Arrangements.  The Borrowers shall not enter into any Commodity
Hedging Arrangements that:

     

    
      
        	
              	
                (i) 

              	
                are
      not in accordance with the Commodity Risk Management Plans;
    or

              

      

    

     

    
      
        	
              	
                (ii) 

              	
                are
      for speculative purposes.

              

      

    

     

    (v) 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.

     

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

     

    (a) as soon
as available and in any event within forty-five (45) days after the end of
the first three Fiscal Quarters of each Fiscal Year, consolidated balance sheets
of Pacific Ethanol, consolidated and consolidating balance sheets of Pacific
Holding, consolidated statements of income and cash flows of Pacific Ethanol and
consolidated and consolidating statements of income and cash flows of Pacific
Holding for such Fiscal Quarter and for the period commencing at the end of the
previous Fiscal Year and ending with the end of such Fiscal
Quarter;

     

    
      
        
        

      

      
        92

        
          

        

      

      
        
        

      

    

     

    (b) as soon
as available and in any event within ninety (90) days after the end of each
Fiscal Year, a copy of the annual audit report for such Fiscal Year for each of
Pacific Ethanol and Pacific Holdings including therein balance sheets as of the
end of such Fiscal Year and statements of income and cash flows of each of
Pacific Ethanol (on a consolidated basis) and Pacific Holding (on a consolidated
and consolidating basis) for such Fiscal Year, and accompanied by an unqualified
opinion of the Auditors stating that all such financial statements present
fairly in all material respects the financial position of Pacific Ethanol or
each Borrower (as applicable) for the periods indicated in conformity with GAAP
applied on a basis consistent with prior periods (except as otherwise
contemplated by Section 7.02(v)
(Negative
Covenants - Accounting Changes)), which report and
opinion shall not be subject to any "going concern" or like
qualification or exception or any qualification or exception as to the scope of
such audit;

     

    (c) concurrently
with the delivery of the financial statements referred to in Sections 7.03(a)
and (b) a
certificate, executed by a Financial Officer of the applicable Loan Party
stating that:

     

    
      
        	
              	
                (i) 

              	
                such
      financial statements fairly present in all material respects the financial
      condition and results of operations of such Person on the dates and for
      the periods indicated in accordance with GAAP subject, in the case of
      interim financial statements, to the absence of notes and normally
      recurring year-end
adjustments;

              

      

    

     

    
      
        	
              	
                (ii) 

              	
                such
      Financial Officer has reviewed the terms of the Financing Documents and
      has made, or caused to be made under his or her supervision, a review in
      reasonable detail of the business and financial condition of such Person
      during the accounting period covered by such financial statements;
      and

              

      

    

     

    
      
        	
              	
                (iii) 

              	
                as
      a result of such review such Financial Officer has concluded that no
      Default or Event of Default has occurred during the period covered by such
      financial statements through and including the date of such certificate
      or, if any Default or Event of Default has occurred, specifying the nature
      and extent thereof and, if continuing, the action that the Borrowers have
      taken and propose to take in respect
thereof;

              

      

    

     

    (d) 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
Borrowers' 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;

     

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

     

    
      
        	
              	
                (i) 

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

              

      

    

     

    
      
        	
              	
                (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;

              

      

    

     

    
      
        
        

      

      
        93

        
          

        

      

      
        
        

      

    

     

    
      
        	
              	
                (iii) 

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

              

      

    

     

    
      
        	
              	
                (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 the Borrowers, result in increased costs of at least five
      hundred thousand Dollars ($500,000);
or

              

      

    

     

    
      
        	
              	
                (v) 

              	
                notification
      of any other change in circumstances that could reasonably be expected to
      result in an increase of more than one million Dollars ($1,000,000) in
      Project Costs for any Plant;

              

      

    

     

    (f) promptly
after delivery or receipt thereof, copies of all material notices or documents
given or received by Pacific Holding or, from and after the initial Funding for
such Borrower's Plant, each other Borrower, pursuant to any of the Project
Documents or any Subordinated Debt Agreement including:

     

    
      
        	
              	
                (i) 

              	
                any
      Change Orders or any written requests for Change Orders that are
      anticipated to be accepted by the applicable
  Borrower;

              

      

    

     

    
      
        	
              	
                (ii) 

              	
                any
      written notice alleging any breach or default thereunder;
    and

              

      

    

     

    
      
        	
              	
                (iii) 

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

              

      

    

     

    (g) within
five (5) days following the end of each calendar month until the Conversion
Date, the Borrowers shall deliver a Monthly Progress Report to the
Administrative Agent for each Plant with respect to which any Funding has been
made and that has not yet achieved its Commercial Operation Date;

     

    (h) within
three (3) days following receipt thereof, the Borrowers shall deliver to
the Administrative Agent any monthly or other periodic report provided to any
Borrower under any Construction Contract related to any Plant with respect to
which any Funding has been made, which shall be subject to review by the
Independent Engineer;

     

    (i) 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
Borrowers' 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;

              

      

    

     

    
      
        
        

      

      
        94

        
          

        

      

      
        
        

      

    

     

    
      
        	
              	
                (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;

              

      

    

     

    
      
        	
              	
                (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;

              

      

    

     

    (j) 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;

     

    
      
        
        

      

      
        95

        
          

        

      

      
        
        

      

       

    

    (k) 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 Borrowers' Agent specifying in detail the nature of such
condition and, if applicable, the Borrowers' proposed response
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;

              

      

    

     

    
      
        	
              	
                (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 Borrowers' properties or any other property
      or any notice, claim or other information that any of the Borrowers might
      be subject to an Environmental
Claim;

              

      

    

     

    (l) the
Borrowers will maintain and make available for inspection by the Administrative
Agent, the Consultants and, if an Event of Default has occurred and is
continuing, the Lenders, and each of their respective agents and employees, 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;

     

    (m) promptly
after receipt thereof, copies of each Deferred Approval obtained by any
Borrower, together with such documents relating thereto as any Lender may
request through the Administrative Agent, certified as true, complete and
correct by an Authorized Officer of the Borrowers' Agent;

     

    
      
        
        

      

      
        96

        
          

        

      

      
        
        

      

    

     

    (n) as soon
as available, but not later than fifteen (15) days after the end of each
calendar month, the Borrowers shall deliver to the Administrative Agent a
Borrowing Base Certificate as of the last Business Day of the immediately
preceding calendar month; and

     

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

     

    (p) Operating
Statements.  After the Commercial Operation Date for each
Plant, within forty-five (45) days after the end of each Fiscal Quarter,
the Borrowers shall furnish to the Administrative Agent an Operating Statement
regarding the operation and performance of each such Plant for each monthly,
quarterly and, in the case of the last quarterly Operating Statement for each
year, annual period.  Such Operating Statements shall contain
(i) line items corresponding to each Operating Budget Category of the
then-current Operating Budget for each Plant showing in reasonable detail by
Operating Budget Category all actual expenses related to the operation and
maintenance of each such Plant compared to the budgeted expenses for each such
Operating Budget Category for such period, (ii) information showing the
amount of ethanol and other Products produced by each such Plant during such
period and (iii) information showing (A) the amount of ethanol sold by
the Borrowers from each such Plant to pursuant to the Ethanol
Offtake Agreements, (B) the amount of Distillers Grains sold by the
Borrowers from each such 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.  The Operating Statements shall be
certified as complete and correct by an Authorized Officer of the Borrowers'
Agent.

     

    Section
7.04 Release of
Borrower.  (a) Upon the written request of the Borrowers'
Agent, any Borrower that owns a Plant with respect to which no Fundings have
been made may be released from its obligations under, and cease to be subject to
the terms of, this Agreement and the other Financing Documents (i) on the
Conversion Date or (ii) prior to the Conversion Date if the Administrative
Agent and the Borrowers have determined and agree, in good faith, that the
conditions to funding for such Plant will not be able to be
satisfied.  Notwithstanding anything to the contrary herein,
(A) on the  date of any such release, the Administrative Agent
and the Collateral Agent, at the expense of the Borrowers, shall execute and
deliver all acknowledgements, lien releases, amendments and other instruments
necessary to effectuate such release as the Borrowers may reasonably request,
(B) from and after the date of any such release, such released "Borrower"
shall no longer be a "Borrower" or a "Loan Party" under the Financing Documents,
(C) such released "Borrower's" Plant shall no longer be a Plant or part of
the Project under the Financing Documents, (D) all provisions (including any
representation, warranty, condition precedent, covenant and default) in any of
the Financing Documents relating to such released "Borrower" or "Plant" shall no
longer apply to such released "Borrower" or released "Plant", and (E) any
existing Defaults or Events of Default which solely relate to such released
"Borrower" or its "Plant" shall be deemed to be waived.

     

    (b) Following
the occurrence of the Commercial Operation Date for each Plant whose owner has
not been released as a Borrower pursuant to Section 7.04(a),
the Borrowers shall use their best commercially reasonable efforts to cause the
Conversion Date to occur as promptly as practicable thereafter.

     

    
      
        
        

      

      
        97

        
          

        

      

      
        
        

      

    

     

    ARTICLE
VIII

     

    PROJECT
ACCOUNTS

     

    Section
8.01 Establishment of Project
Accounts.  On or prior to the Closing Date, the Accounts Bank
shall establish and maintain, in the name of the Borrower's Agent and on the
books and records of the Accounts Bank's offices located in Monterey Park,
California the accounts set forth below:

     

    (a) a
special, segregated, Dollar-denominated account entitled "UBOC Control - Pacific
Ethanol Holding Co. LLC Escrow Account", Account
No. 4430003491 (the "Escrow
Account");

     

    (b) a
special, segregated, Dollar-denominated account entitled "UBOC Control - Pacific
Ethanol Holding Co. LLC Construction Holding Account", Account
No. 4430003211 (the "Construction Holding
Account");

     

    (c) a
special, segregated, Dollar-denominated account entitled "UBOC Control - Pacific
Ethanol Holding Co. LLC Stockton Construction Account", Account No. 4430003254 (the "Stockton Construction
Account");

     

    (d) a
special, segregated, Dollar-denominated account entitled "UBOC Control - Pacific
Ethanol Holding Co. LLC Brawley Construction Account", Account No. 4430003262 (the "Brawley Construction
Account");

     

    (e) a
special, segregated, Dollar-denominated account entitled "UBOC Control - Pacific
Ethanol Holding Co. LLC Burley Construction Account", Account
No. 4430003270 (the "Burley Construction
Account");

     

    (f) a
special, segregated, Dollar-denominated account entitled "UBOC Control - Pacific
Ethanol Holding Co. LLC Revenue Account", Account No. 4430003289 (the
"Revenue
Account");

     

    (g) a
special, segregated, Dollar-denominated account entitled "UBOC Control - Pacific
Ethanol Holding Co. LLC Operating Account", Account No. 4430003297 (the
"Operating
Account");

     

    
      
        
        

      

      
        98

        
          

        

      

      
        
        

      

    

     

    (h) a
special, segregated, Dollar-denominated account entitled "UBOC Control - Pacific
Ethanol Holding Co. LLC Maintenance Capital Expense Account", Account
No. 4430003300 (the "Maintenance Capital Expense
Account");

     

    (i) a
special, segregated, Dollar-denominated account entitled "UBOC Control - Pacific
Ethanol Holding Co. LLC Working Capital Reserve Account", Account No. 4430003319 (the "Working Capital Reserve
Account");

     

    (j) a
special, segregated, Dollar-denominated account entitled "UBOC Control - Pacific
Ethanol Holding Co. LLC Debt Service Reserve Account", Account
No. 4430003327 (the "Debt Service Reserve
Account");

     

    (k) a
special, segregated, Dollar-denominated account entitled "UBOC Control - Pacific
Ethanol Holding Co. LLC Prepayment Holding Account", Account No. 4430003335
(the "Prepayment
Holding Account");

     

    (l) a
special, segregated, Dollar-denominated account entitled "UBOC Control - Pacific
Ethanol Holding Co. LLC Madera Insurance and Condemnation Proceeds Account",
Account No. 4430003343 (the "Madera Insurance and
Condemnation Proceeds Account");

     

    (m) a
special, segregated, Dollar-denominated account entitled "UBOC Control - Pacific
Ethanol Holding Co. LLC Boardman Insurance and Condemnation Proceeds Account",
Account No. 4430003351 (the "Boardman Insurance and
Condemnation Proceeds Account");

     

    (n) a
special, segregated, Dollar-denominated account entitled "UBOC Control - Pacific
Ethanol Holding Co. LLC Stockton Insurance and Condemnation Proceeds Account",
Account No. 4430003408 (the "Stockton Insurance and
Condemnation Proceeds Account");

     

    (o) a
special, segregated, Dollar-denominated account entitled "UBOC Control - Pacific
Ethanol Holding Co. LLC Brawley Insurance and Condemnation Proceeds Account",
Account No. 4430003416 (the "Brawley Insurance and
Condemnation Proceeds Account");

     

    
      
        
        

      

      
        99

        
          

        

      

      
        
        

      

    

     

    (p) a
special, segregated, Dollar-denominated account entitled "UBOC Control - Pacific
Ethanol Holding Co. LLC Burley Insurance and Condemnation Proceeds Account",
Account No. 4430003424 (the "Burley Insurance and
Condemnation Proceeds Account");

     

    (q) a
special, segregated, Dollar-denominated account entitled "UBOC Control - Pacific
Ethanol Holding Co. LLC Extraordinary Proceeds Account", Account No. 4430003432 (the "Extraordinary Proceeds
Account");

     

    (r) a
special, segregated, Dollar-denominated account entitled "UBOC Control - Pacific
Ethanol Holding Co. LLC Madera Warranty Account", Account No. 4430003440
(the "Madera Warranty
Account");

     

    (s) a
special, segregated, Dollar-denominated account entitled "UBOC Control - Pacific
Ethanol Holding Co. LLC Boardman Warranty Account", Account No. 4430003459
(the "Boardman
Warranty Account");

     

    (t) a
special, segregated, Dollar-denominated account entitled "UBOC Control - Pacific
Ethanol Holding Co. LLC Stockton Warranty Account", Account No. 4430003467
(the "Stockton
Warranty Account");

     

    (u) a
special, segregated, Dollar-denominated account entitled "UBOC Control - Pacific
Ethanol Holding Co. LLC Brawley Warranty Account", Account No. 4430003475
(the "Brawley Warranty
Account"); and

     

    (v) a
special, segregated, Dollar-denominated account entitled "UBOC Control - Pacific
Ethanol Holding Co. LLC Burley Warranty Account", Account No. 4430003483
(the "Burley Warranty
Account").

     

    Section
8.02 Deposits into and
Withdrawals from Project Accounts.  (a) Amounts shall be
deposited into and withdrawn from the Project Accounts in strict accordance with
this Article VIII.

     

    (b) The
Accounts Bank will only be required to transfer funds hereunder on a "same day"
basis if it has received written notice of such proposed transfer, together with
all certificates, notices, directions and other documents required under this
Agreement to be delivered to the Accounts Bank relating thereto, not later
than 12:00 noon New York City time on the Business Day of such transfer
and, if such notice or any such related document is received by the Accounts
Bank after such time, such transfer will be undertaken prior to 12:00 noon
New York City time on the next Business Day succeeding the date of receipt by
Accounts Bank of all such documentation.

     

    
      
        
        

      

      
        100

        
          

        

      

      
        
        

      

    

     

    (c) If any
transfer, withdrawal, deposit, investment or payment of any funds by the
Accounts Bank or any other action to be taken by the Accounts Bank under this
Agreement is to be made or taken on a day other than a Business Day, such
transfer, withdrawal, deposit, investment, payment or other action will be made
or taken on the next succeeding Business Day.

     

    (d) Any
instruction, direction, notice, certificate, request or requisition given to the
Accounts Bank by any Borrower with respect to the transfer, withdrawal, deposit,
investment or payment of any funds under this Agreement or with respect to any
other obligations to be performed by the Accounts Bank under this Agreement
(i) must be in writing and signed by an Authorized Officer of the
Borrowers' Agent, (ii) in referencing any of the Project Accounts, must
refer to the specific Project Account name and number, (iii) shall
constitute a representation by the Borrowers that all conditions set forth in
this Agreement for such withdrawal have been satisfied, whether or not those
conditions are explicitly stated to be so satisfied and (iv) shall be
copied to the Administrative Agent and the Collateral
Agent.  Notwithstanding anything contained in this Agreement or any
other Financing Document to the contrary, the Accounts Bank may rely and shall
be protected in acting or refraining from acting upon any instruction,
direction, notice, certificate, request or requisition of Borrowers' Agent, the
Administrative Agent or the Collateral Agent.

     

    (e) None of
the Project Accounts shall go into overdraft, and the Accounts Bank shall not
comply with any request or direction to the extent that it would cause any of
the Project Accounts to do so.

     

    (f) Each
Borrower hereby acknowledges that it has (or will, prior to the initial Funding
for the applicable Plant) irrevocably instructed each Project Party, and agrees
that it shall so instruct each future Project Party, to make all payments due
and payable to any Borrower under any Project Document, directly to the Accounts
Bank for deposit in, or to be credited in the manner set forth in this Article VIII.  Each
Borrower further agrees that it shall (or will, prior to the initial funding for
the applicable Plant) irrevocably instruct each other Person from whom such
Borrower is entitled to receive Cash Flow, Insurance Proceeds and Condemnation
Proceeds, to make all payments due and payable to any Borrower from such Person
directly to the Accounts Bank for deposit, and to be credited, in the manner set
forth in this Article VIII.

     

    (g) The
Accounts Bank shall not be charged with knowledge of any Notice of Suspension,
Default or Event of Default unless the Accounts Bank has received such Notice of
Suspension or other written notice of such Default or Event of Default from the
Administrative Agent, the Collateral Agent or an Authorized Officer of the
Borrowers' Agent or any Borrower.  The Accounts Bank shall not be
charged with the knowledge that the Conversion Date has occurred unless it has
received written notice thereof from the Administrative Agent.

     

    (h) The
Accounts Bank shall not be charged with the knowledge that any transfer or
withdrawal from any Project Account would result in the occurrence of a Default
or Event of Default, unless it has received written notice thereof from the
Administrative Agent, the Collateral Agent or an Authorized Officer of the
Borrowers' Agent or any Borrower.

     

    
      
        
        

      

      
        101

        
          

        

      

      
        
        

      

    

     

    (i) Notwithstanding
anything contained in this Agreement or any other Financing Document to the
contrary, the Accounts Bank shall have no obligation to (i) make any
payment, transfer or withdrawal from any Project Account until it has received
written direction to make such payment, transfer or withdrawal from the
Collateral Agent, the Administrative Agent or, if this Agreement explicitly
provides that any such direction may be made by the Borrowers' Agent, the
Borrowers' Agent or (ii) determine whether any payment, transfer or
withdrawal from any Project Account made in accordance with any written
direction from the Collateral Agent, the Administrative Agent or the Borrowers'
Agent complies with the terms of this Agreement.  The Accounts Bank
shall have no liability for, nor any responsibility or obligation to confirm,
the use or application by any Borrower, Borrowers' Agent, Administrative Agent,
Collateral Agent or any other recipient of amounts withdrawn or transferred from
any Project Account.

     

    Section
8.03 Escrow
Account.  (a) On the date of the Tranche B Escrow
Disbursement and on any Tranche Conversion Date, the Administrative Agent shall
cause all proceeds of the Tranche B Construction Loans received by the
Administrative Agent from the Tranche B Lenders to be deposited in or
credited to the Escrow Account.

     

    (b) Unless a
Notice of Suspension is in effect or a Default or Event of Default would occur
after giving effect to any application of funds contemplated hereby, the
Administrative Agent shall, on each Funding Date and subject to the satisfaction
of the conditions set forth in Section 6.02 (Conditions
to Madera Funding), Section 6.03
(Conditions
to Boardman Funding), Section 6.04
(Conditions
to First Funding for Each Greenfield Plant), Section 6.05
(Conditions
to All Greenfield Plant Construction Loan Fundings) and Section 6.08
(Conditions
to All Fundings), as applicable,
instruct the Accounts Bank in writing to release from the Escrow Account and
transfer to the Debt Service Reserve Account, the Construction Holding Account
or any other Construction Account, as applicable, on such Funding Date, the
aggregate amount of Tranche B Construction Loans to be disbursed on such
Funding Date, as requested by the Borrowers in the relevant Funding Notice;
provided, that
in the case of any Funding of In-Progress Plant 2 Construction Loans or
Greenfield Plant 1 Construction Loans, all available amounts on deposit in
or standing to the credit of the Escrow Account shall be released from the
Escrow Account prior to any Funding of In-Progress Plant 2 Construction
Loans or Greenfield Plant 1 Construction Loans from Tranche A
Construction Loans.

     

    (c) If at any
time any outstanding Construction Loan Commitments and Term Loan Commitments are
terminated or reduced in accordance with any of Sections 2.08(c),
(d) , (i) or (k) (Termination
or Reduction of Commitments), the Administrative
Agent shall instruct the Accounts Bank in writing to release from the Escrow
Account the amount required to be so released in accordance with such Sections
to reimburse to the Tranche B Lenders such amounts pro rata in accordance with
their respective Commitment Percentages.

     

    (d) On the
Conversion Date, at the written instruction of the Administrative Agent, any
amounts on deposit in or standing to the credit of the Escrow Account shall be
released and reimbursed to the Tranche B Lenders pro rata in accordance
with their respective Commitment Percentages.

     

    Section
8.04 Construction Holding
Account.  (a) The Borrowers (or, with respect to Loan proceeds,
the Administrative Agent) shall cause the following amounts to be paid into the
Construction Holding Account:

     

    
      
        	
              	
                (i) 

              	
                all
      amounts required to be deposited into the Construction Holding Account
      pursuant to Section 8.03(b)
      (Escrow
      Account);

              

      

    

     

    
      
        
        

      

      
        102

        
          

        

      

      
        
        

      

    

     

    
      
        	
              	
                (ii) 

              	
                all
      proceeds of the Greenfield Plant Top-Up Fundings;
  and

              

      

    

     

    
      
        	
              	
                (iii) 

              	
                all
      amounts required to be deposited into the Construction Holding Account
      pursuant to Section 4.01 (Acceleration of Senior Debt
      Obligations) of the Sponsor Support
  Agreement.

              

      

    

     

    (b) Unless a
Notice of Suspension is in effect or a Default or Event of Default would occur
after giving effect to any application of funds contemplated hereby, the
Borrowers may direct the transfer or withdrawal of funds standing to the credit
of the Construction Holding Account to the Stockton Construction Account, the
Burley Construction Account and/or the Brawley Construction Account to be
applied towards Required Equity Contributions and/or to pay Project Costs that
are or will become due and payable during the immediately succeeding calendar
month strictly in accordance with the relevant Construction Budget by delivering
a Construction Holding Withdrawal Certificate to the Accounts Bank (with a copy
to the Administrative Agent and the Independent Engineer).

     

    (c) On the
Conversion Date, all amounts on deposit in or standing to the credit of the
Construction Holding Account shall be withdrawn at the written instruction of
the Borrowers' Agent or the Administrative Agent and applied by the
Administrative Agent in accordance with Section 2.06(e)
(Funding
of Loans) and the final
Construction Loan Funding Notice (a copy of which shall be delivered to the
Accounts Bank).

     

    Section
8.05 Stockton Construction
Account.  (a) From and after the initial Funding Date for
the Stockton Plant and until (and including) the Conversion Date, the Borrowers
(or, with respect to Loan proceeds, the Administrative Agent) shall cause the
following amounts to be paid into the Stockton Construction
Account:

     

    
      
        	
              	
                (i) 

              	
                all
      amounts required to be deposited into the Stockton Construction Account
      pursuant to Section 8.03(b)
      (Escrow
      Account);

              

      

    

     

    
      
        	
              	
                (ii) 

              	
                all
      amounts required to be deposited into the Stockton Construction Account
      pursuant to Section 8.04(b)
      (Construction
      Holding Account);

              

      

    

     

    
      
        	
              	
                (iii) 

              	
                all
      proceeds of the Construction Loans for the Stockton Plant (except for
      proceeds of Fundings of any Excess Construction Loan Commitment with
      respect to the Stockton Plant, any Sponsor Support Reimbursement Fundings,
      or any Fundings applied directly to the payment of Debt Service or as
      otherwise applied on the Conversion Date in accordance with Section 2.06(e)
      (Funding
      of Loans));

              

      

    

     

    
      
        	
              	
                (iv) 

              	
                all
      proceeds of Working Capital Loans for start-up costs for the Stockton
      Plant;

              

      

    

     

    
      
        	
              	
                (v) 

              	
                until
      the Conversion Date, all equity contributions received by Stockton
      (including the Required Equity Contribution for the Stockton
      Plant);

              

      

    

     

    
      
        
        

      

      
        103

        
          

        

      

      
        
        

      

    

     

    
      
        	
              	
                (vi) 

              	
                all
      proceeds of any Stockton Performance
Bond;

              

      

    

     

    
      
        	
              	
                (vii) 

              	
                all
      damages payable under any Stockton Construction Contract (other than
      performance liquidated damages permitted to be paid to Pacific Ethanol in
      accordance with Section 4.02(d)
      (Adjustments
      to Warranty Funding Cap and Sponsor Funding Cap) of the Sponsor
      Support Agreement or in connection with any Buy-Down L.D.
      Reimbursement);

              

      

    

     

    
      
        	
              	
                (viii) 

              	
                all
      amounts required to be deposited into the Stockton Construction Account
      pursuant to Section 8.08(b)(x)
      (Revenue
      Account);
      and

              

      

    

     

    
      
        	
              	
                (ix) 

              	
                all
      amounts required to be deposited into the Stockton Construction Account
      pursuant to Section 2.04 (Sponsor's Deficiency Funding
      Obligation) of the Sponsor Support
  Agreement.

              

      

    

     

    (b) Prior to
the date of the first Funding of Stockton Construction Loans, the Borrowers may
direct the transfer or withdrawal of funds standing to the credit of the
Stockton Construction Account to pay Stockton Project Costs by delivering a
Stockton Construction Withdrawal Certificate to the Accounts Bank (with a copy
to the Administrative Agent and the Independent Engineer).

     

    (c) From and
after the date of the first Funding of Stockton Construction Loans, unless a
Notice of Suspension is in effect or a Default or Event of Default would occur
after giving effect to any application of funds contemplated hereby, the
Borrowers may direct the transfer or withdrawal of funds standing to the credit
of the Stockton Construction Account to pay Stockton Project Costs then due and
owing strictly in accordance with the Stockton Construction Budget by delivering
a Stockton Construction Withdrawal Certificate to the Accounts Bank (with a copy
to the Administrative Agent and the Independent Engineer) which, in the case of
any Loan proceeds, shall be for application strictly in accordance with the
relevant Funding Notice.  All payments from the Stockton Construction
Account shall be made by the Accounts Bank pursuant to instructions set forth in
the relevant Stockton Construction Withdrawal Certificate directly to the
payee.  In the event that the Borrowers fail to deliver such a
Stockton Construction Withdrawal Certificate, the Administrative Agent is hereby
authorized to direct, in writing, the Accounts Bank to transfer or withdraw the
amounts necessary to pay Stockton Project Costs that are, from time to time, due
and payable.

     

    (d) On the
Conversion Date, all amounts on deposit in or standing to the credit of the
Stockton Construction Account shall be withdrawn and such account shall be
terminated and closed at the written instruction of the Borrowers' Agent or the
Administrative Agent and such amounts shall be applied by the Administrative
Agent in accordance with Section 2.06(e)
(Funding
of Loans) and the final
Construction Loan Funding Notice (a copy of which shall be delivered to the
Accounts Bank).

     

    
      
        
        

      

      
        104

        
          

        

      

      
        
        

      

    

     

    Section
8.06 Brawley Construction
Account.  (a)  From and after the initial Funding
Date for the Brawley Plant and until (and including) the Conversion Date, the
Borrowers shall cause the following amounts to be paid into the Brawley
Construction Account:

     

    
      
        	
              	
                (i) 

              	
                all
      amounts required to be deposited into the Brawley Construction Account
      pursuant to Section 8.03(b)
      (Escrow
      Account);

              

      

    

     

    
      
        	
              	
                (ii) 

              	
                all
      amounts required to be deposited into the Brawley Construction Account
      pursuant to Section 8.04(b)
      (Construction
      Holding Account);

              

      

    

     

    
      
        	
              	
                (iii) 

              	
                all
      proceeds of the Construction Loans for the Brawley Plant (except for
      proceeds of Fundings of any Excess Construction Loan Commitment with
      respect to the Brawley Plant, any Sponsor Support Reimbursement Fundings,
      any Fundings applied directly to the payment of Debt Service or as
      otherwise applied on the Conversion Date in accordance with Section 2.06(e)
      (Funding
      of Loans));

              

      

    

     

    
      
        	
              	
                (iv) 

              	
                all
      proceeds of Working Capital Loans for start-up costs for the Brawley
      Plant;

              

      

    

     

    
      
        	
              	
                (v) 

              	
                until
      the Conversion Date, all equity contributions received by Brawley
      (including the Required Equity Contribution for the Brawley
      Plant);

              

      

    

     

    
      
        	
              	
                (vi) 

              	
                all
      proceeds of any Brawley Performance
Bond;

              

      

    

     

    
      
        	
              	
                (vii) 

              	
                all
      damages payable under the Brawley Construction Contracts (other than
      performance liquidated damages permitted to be paid to Pacific Ethanol in
      accordance with Section 4.02(d)
      (Adjustments
      to Warranty Funding Cap and Sponsor Funding Cap) of the Sponsor
      Support Agreement or in connection with any Buy-Down L.D.
      Reimbursement);

              

      

    

     

    
      
        	
              	
                (viii) 

              	
                all
      amounts required to be deposited into the Brawley Construction Account
      pursuant to Section 8.08(b)(x)
      (Revenue
      Account);
      and

              

      

    

     

    
      
        	
              	
                (ix) 

              	
                all
      amounts required to be deposited into the Brawley Construction Account
      pursuant to Section 2.04 (Sponsor's Deficiency Funding
      Obligation) of the Sponsor
      Support Agreement.

              

      

    

     

    (b) Prior to
the date of the first Funding of Brawley Construction Loans, the Borrowers may
direct the transfer or withdrawal of funds standing to the credit of the Brawley
Construction Account to pay Brawley Project Costs by delivering a Brawley
Construction Withdrawal Certificate to the Accounts Bank (with a copy to the
Administrative Agent and the Independent Engineer).

     

    
      
        
        

      

      
        105

        
          

        

      

      
        
        

      

    

     

    (c) From and
after the date of the first Funding of Brawley Construction Loans, unless a
Notice of Suspension is in effect or a Default or Event of Default would occur
after giving effect to any application of funds contemplated hereby, the
Borrowers may direct the transfer or withdrawal of funds standing to the credit
of the Brawley Construction Account to pay Brawley Project Costs then due and
owing strictly in accordance with the Brawley Construction Budget by delivering
a Brawley Construction Withdrawal Certificate to the Accounts Bank (with a copy
to the Administrative Agent and the Independent Engineer) which, in the case of
any Loan proceeds, shall be for application strictly in accordance with the
relevant Funding Notice.  All payments from the Brawley Construction
Account shall be made by the Accounts Bank pursuant to instructions set forth in
the relevant Brawley Construction Withdrawal Certificate directly to the
payee.  In the event that the Borrowers fail to deliver such a Brawley
Construction Withdrawal Certificate, the Administrative Agent is hereby
authorized to direct, in writing, the Accounts Bank to transfer or withdraw the
amounts necessary to pay Brawley Project Costs that are, from time to time, due
and payable.

     

    (d) On the
Conversion Date, all amounts on deposit in or standing to the credit of the
Brawley Construction Account shall be withdrawn and such account shall be
terminated and closed at the written instruction of the Borrowers' Agent or the
Administrative Agent and such amounts shall be applied by the Administrative
Agent in accordance with Section 2.06(e)
(Funding
of Loans) and the final
Construction Loan Funding Notice (a copy of which shall be delivered to the
Accounts Bank).

     

    Section
8.07 Burley Construction
Account.  (a) From and after the initial Funding Date for
the Burley Plant and until (and including) the Conversion Date, the Borrowers
shall cause the following amounts to be paid into the Burley Construction
Account:

     

    
      
        	
              	
                (i) 

              	
                all
      amounts required to be deposited into the Burley Construction Account
      pursuant to Section 8.03(b)
      (Escrow
      Account);

              

      

    

     

    
      
        	
              	
                (ii) 

              	
                all
      amounts required to be deposited into the Burley Construction Account
      pursuant to Section 8.04(b)
      (Construction
      Holding Account);

              

      

    

     

    
      
        	
              	
                (iii) 

              	
                all
      proceeds of the Construction Loans for the Burley Plant (except for
      proceeds of Fundings of any Excess Construction Loan Commitment with
      respect to the Burley Plant, any Sponsor Support Reimbursement Fundings,
      any Fundings applied directly to the payment of Debt Service or as
      otherwise applied on the Conversion Date in accordance with Section 2.06(e)
      (Funding
      of Loans));

              

      

    

     

    
      
        	
              	
                (iv) 

              	
                all
      proceeds of Working Capital Loans for start-up costs for the Brawley
      Plant;

              

      

    

     

    
      
        	
              	
                (v) 

              	
                until
      the Conversion Date, all equity contributions received by Burley
      (including the Required Equity Contribution for the Burley
      Plant);

              

      

    

     

    
      
        
        

      

      
        106

        
          

        

      

      
        
        

      

    

     

    
      
        	
              	
                (vi) 

              	
                all
      proceeds of any Burley Performance
Bond;

              

      

    

     

    
      
        	
              	
                (vii) 

              	
                all
      damages payable under the Burley Construction Contracts (other than
      performance liquidated damages permitted to be paid to Pacific Ethanol in
      accordance with Section 4.02(d)
      (Adjustments
      to Warranty Funding Cap and Sponsor Funding Cap) of the Sponsor
      Support Agreement or in connection with any Buy-Down L.D.
      Reimbursement);

              

      

    

     

    
      
        	
              	
                (viii) 

              	
                all
      amounts required to be deposited into the Burley Construction Account
      pursuant to Section 8.08(b)(x)
      (Revenue
      Account);
      and

              

      

    

     

    
      
        	
              	
                (ix) 

              	
                all
      amounts required to be deposited into the Burley Construction Account
      pursuant to Section 2.04 (Sponsor's Deficiency Funding
      Obligation) of the Sponsor
      Support Agreement.

              

      

    

     

    (b) Prior to
the date of the first Funding of Burley Construction Loans, the Borrowers may
direct the transfer or withdrawal of funds standing to the credit of the Burley
Construction Account to pay Burley Project Costs by delivering a Burley
Construction Withdrawal Certificate to the Accounts Bank (with a copy to the
Administrative Agent and the Independent Engineer).

     

    (c) From and
after the date of the first Funding of Burley Construction Loans, unless a
Notice of Suspension is in effect or a Default or Event of Default would occur
after giving effect to any application of funds contemplated hereby, the
Borrowers may direct the transfer or withdrawal of funds standing to the credit
of the Burley Construction Account to pay Burley Project Costs then due and
owing strictly in accordance with the Burley Construction Budget by delivering a
Burley Construction Withdrawal Certificate to the Accounts Bank (with a copy to
the Administrative Agent and the Independent Engineer) which, in the case of any
Loan proceeds, shall be for application strictly in accordance with the relevant
Funding Notice.  All payments from the Burley Construction Account
shall be made by the Accounts Bank pursuant to instructions set forth in the
relevant Burley Construction Withdrawal Certificate directly to the
payee.  In the event that the Borrowers fail to deliver such a Burley
Construction Withdrawal Certificate, the Administrative Agent is hereby
authorized to direct, in writing, the Accounts Bank to transfer or withdraw the
amounts necessary to pay Burley Project Costs that are, from time to time, due
and payable (unless such Burley Project Costs are in dispute).

     

    
      
        
        

      

      
        107

        
          

        

      

      
        
        

      

    

     

    (d) On the
Conversion Date, all amounts on deposit in or standing to the credit of the
Burley Construction Account shall be withdrawn and such account shall be
terminated and closed at the written instruction of the Borrowers' Agent or the
Administrative Agent and such amounts shall be applied by the Administrative
Agent in accordance with Section 2.06(e)
(Funding
of Loans) and the final
Construction Loan Funding Notice.

     

    Section
8.08 Revenue
Account.  (a) From and after the initial Construction Loan
Funding Date, in the case of Pacific Holding and the Borrower whose Plant is
being funded (and for such Plant), and from and after the initial Funding Date
for each other Borrower and such Borrower's Plant, the applicable Borrower shall
cause the following amounts to be paid into the Revenue Account:

     

    
      
        	
              	
                (i) 

              	
                all
      Cash Flow;

              

      

    

     

    
      
        	
              	
                (ii) 

              	
                except
      as set forth in Section 8.15(a)(i)
      (Extraordinary
      Proceeds Account), all proceeds
      from the sale or disposition of any assets of any
  Borrower;

              

      

    

     

    
      
        	
              	
                (iii) 

              	
                any
      other income received by or on behalf of any Borrower that is not required
      to be deposited in or credited to another Project Account, or applied
      directly to the Obligations, in accordance with this Agreement;
      and

              

      

    

     

    
      
        	
              	
                (iv) 

              	
                amounts
      transferred to the Revenue Account pursuant to Section 2.06(e)
      (Funding
      of Loans), Section 8.11(c)
      (Working
      Capital Reserve Account), Section 8.12(d)
      (Debt
      Service Reserve Account) and Sections 8.15(b)(i)
      and (c)(i)
      (Extraordinary
      Proceeds Account).

              

      

    

     

    (b) Until the
Conversion Date, unless a Notice of Suspension is in effect or a Default or
Event of Default would occur after giving effect to any application of funds
contemplated hereby, upon receipt of a Revenue Account Withdrawal Certificate
duly executed by a Financial Officer of the Borrowers' Agent, the Accounts Bank
shall, in accordance with the directions set forth therein, cause funds held in
the Revenue Account to be withdrawn or transferred to pay the following amounts
on the dates and at the priorities indicated below:

     

    
      
        	
              	
                (i) 

              	
                first, on each Monthly
      Date, (A) to Pacific Ethanol as payment of any Sponsor Support
      Reimbursements then due and owing in accordance with the Sponsor Support
      Agreement and (B) to the Operating Account, the amount certified by the
      Borrowers' Agent in such Revenue Account Withdrawal Certificate as
      required to pay Operation and Maintenance Expenses that, in each such
      case, are or will become due and payable during the immediately succeeding
      calendar month; provided, that
      the amount of such transfer of funds pursuant to clause (B) (excluding any
      amounts transferred to the Operating Account to cover the cost of corn,
      natural gas, electricity, insurance premiums and Borrower Taxes) does not
      exceed the Permitted Operating Budget Deviation
  Levels;

              

      

    

     

    
      
        
        

      

      
        108

        
          

        

      

      
        
        

      

    

     

    
      
        	
              	
                (ii) 

              	
                second, on each Monthly
      Date, to the Maintenance Capital Expense Account, in the amount certified
      by the Borrowers' Agent in such Revenue Account Withdrawal Certificate as
      necessary to pay Maintenance Capital Expenses that, in each such case, are
      or will become due and payable during the immediately succeeding calendar
      month; provided, that
      the amount of such transfer of funds does not exceed the Permitted
      Operating Budget Deviation
Levels;

              

      

    

     

    
      
        	
              	
                (iii) 

              	
                third, on any date when
      due and payable, to the Administrative Agent, for the account of the
      Senior Secured Parties, in the amount certified by the Borrowers' Agent in
      such Revenue Account Withdrawal Certificate or otherwise instructed in
      writing to the Accounts Bank by the Administrative Agent as necessary to
      pay Fees, costs and expenses then due and payable under the Financing
      Documents;

              

      

    

     

    
      
        	
              	
                (iv) 

              	
                fourth, on any date
      when due and payable, to the Administrative Agent, for the account of the
      Senior Secured Parties, in the amount certified by the Borrowers' Agent in
      such Revenue Account Withdrawal Certificate or otherwise instructed in
      writing to the Accounts Bank by the Administrative Agent as necessary to
      pay any interest with then due and payable under the Financing Documents
      and any fees, expenses or Net Swap Payments owing to any Interest Rate
      Protection Provider;

              

      

    

     

    
      
        	
              	
                (v) 

              	
                fifth, on each Monthly
      Date when due and payable, to the Administrative Agent, for the account of
      the Interest Rate Protection Providers, on a pro rata basis, the
      amount certified by the Borrowers' Agent in such Revenue Account
      Withdrawal Certificate or otherwise instructed in writing to the Accounts
      Bank by the Administrative Agent as payments of Swap Termination Value
      then due and payable by the Borrowers with respect to any Interest Rate
      Protection Agreements;

              

      

    

     

    
      
        	
              	
                (vi) 

              	
                sixth, on each Monthly
      Date, to the Working Capital Reserve Account, in the amount certified by
      the Borrowers' Agent in such Revenue Account Withdrawal Certificate or
      otherwise instructed in writing to the Accounts Bank by the Administrative
      Agent as equal to the difference between (A) the Working Capital
      Reserve Required Amount and (B) the funds on deposit in or standing
      to the credit of the Working Capital Reserve Account on such Monthly
      Date;

              

      

    

     

    
      
        
        

      

      
        109

        
          

        

      

      
        
        

      

    

     

    
      
        	
              	
                (vii) 

              	
                seventh, on any date
      when required pursuant to Section 3.10(c)
      (Mandatory
      Prepayment), or otherwise
      at the option of the Borrowers, to the Administrative Agent in the amount
      certified by the Borrowers' Agent in such Revenue Account Withdrawal
      Certificate or otherwise instructed in writing to the Accounts Bank by the
      Administrative Agent, for application as a prepayment of the Working
      Capital Loans;

              

      

    

     

    
      
        	
              	
                (viii) 

              	
                eighth, provided that
      no Default or Event of Default has occurred and is continuing, on each
      Quarterly Payment Date, in the amount certified by an Authorized Officer
      of the Borrowers' Agent in such Revenue Account Withdrawal Certificate to
      the Persons or accounts specified in such Revenue Account Withdrawal
      Certificate, as Current Priority Subordinated Interest for the Quarterly
      Period ending on such Quarterly Payment Date in an amount not to exceed,
      on any such Quarterly Payment Date, one million Dollars
      ($1,000,000);

              

      

    

     

    
      
        	
              	
                (ix) 

              	
                ninth, provided that no
      Default or Event of Default has occurred and is continuing, on each
      Quarterly Payment Date, in an amount certified by the Borrowers' Agent in
      such Revenue Account Withdrawal Certificate, to the Persons or accounts
      specified in such Revenue Account Withdrawal Certificate (including, if
      required to be paid directly to any taxing authority, to such taxing
      authority), for payment of any Permitted Tax Distribution;
    and

              

      

    

     

    
      
        	
              	
                (x) 

              	
                tenth, on each Monthly
      Date, to any Construction Account, the amount certified by the Borrowers'
      Agent in such Revenue Account Withdrawal Certificate as required to pay
      Project Costs that, in each such case, are or will become due and payable
      during the immediately succeeding calendar month and with respect to which
      funds are not available in such Construction
  Account.

              

      

    

     

    (c) Commencing
on the Conversion Date, unless a Notice of Suspension is in effect or a Default
or Event of Default would occur after giving effect to any application of funds
contemplated hereby, upon receipt of a Revenue Account Withdrawal Certificate
duly executed by a Financial Officer of the Borrowers' Agent, the Accounts Bank
shall, in accordance with the directions set forth therein, cause funds held in
the Revenue Account to be withdrawn or transferred to pay the following amounts
on the dates and at the priorities indicated below:

     

    
      
        	
              	
                (i) 

              	
                first, on each Monthly
      Date, (A) to Pacific Ethanol, as payment of any Sponsor Support
      Reimbursements then due and owing in accordance with the Sponsor Support
      Agreement and (B) to the Operating Account, the amount certified by the
      Borrowers' Agent in such Revenue Account Withdrawal Certificate as
      required to pay Operation and Maintenance Expenses that, in each such
      case, are or will become due and payable during the immediately succeeding
      calendar month; provided, that
      the amount of such transfer of funds pursuant to clause (B) (excluding any
      amounts transferred to the Operating Account to cover the cost of corn,
      natural gas, electricity, insurance premiums and Borrower Taxes) does not
      exceed the Permitted Operating Budget Deviation
  Levels;

              

      

    

     

    
      
        
        

      

      
        110

        
          

        

      

      
        
        

      

    

     

    
      
        	
              	
                (ii) 

              	
                second, on each Monthly
      Date, to the Maintenance Capital Expense Account, in the amount certified
      by the Borrowers' Agent in such Revenue Account Withdrawal Certificate as
      necessary to pay Maintenance Capital Expenses that, in each such case, are
      or will become due and payable during the immediately succeeding calendar
      month; provided, that
      the amount of such transfer of funds does not exceed the Permitted
      Operating Budget Deviation
Levels;

              

      

    

     

    
      
        	
              	
                (iii) 

              	
                third, on any date when
      due and payable, to the Administrative Agent, for the account of the
      Senior Secured Parties, in the amount certified by the Borrowers' Agent in
      such Revenue Account Withdrawal Certificate or otherwise instructed in
      writing to the Accounts Bank by the Administrative Agent as necessary to
      pay Fees, costs and expenses then due and payable under the Financing
      Documents;

              

      

    

     

    
      
        	
              	
                (iv) 

              	
                fourth, on any date
      when due and payable, to the Administrative Agent, for the account of the
      Senior Secured Parties, in the amount certified by the Borrowers' Agent in
      such Revenue Account Withdrawal Certificate or otherwise instructed in
      writing to the Accounts Bank by the Administrative Agent as necessary to
      pay any interest then due and payable under the Financing Documents and
      any fees, expenses or Net Swap Payments owing to any Interest Rate
      Protection Provider;

              

      

    

     

    
      
        	
              	
                (v) 

              	
                fifth, on any date when
      required pursuant to Section 3.10(c)
      (Mandatory
      Prepayment), to the
      Administrative Agent in the amount certified by the Borrowers' Agent in
      such Revenue Account Withdrawal Certificate or otherwise instructed in
      writing to the Accounts Bank by the Administrative Agent, for application
      as a prepayment of the Working Capital
Loans;

              

      

    

     

    
      
        	
              	
                (vi) 

              	
                sixth, on each Monthly
      Date, to pay, to the Administrative Agent, for the account of the Senior
      Secured Parties, on a pro rata basis, the
      amount certified by the Borrowers' Agent in such Revenue Account
      Withdrawal Certificate or otherwise instructed in writing to the Accounts
      Bank by the Administrative Agent as (A) the principal amounts due and
      payable with respect to the Term Loans and (B) the payments of Swap
      Termination Value then due and payable by the Borrowers with respect to
      any Interest Rate Protection
Agreements;

              

      

    

     

    
      
        
        

      

      
        111

        
          

        

      

      
        
        

      

    

     

    
      
        	
              	
                (vii) 

              	
                seventh, on each
      Monthly Date, to the Working Capital Reserve Account, in the amount
      certified by the Borrowers' Agent in such Revenue Account Withdrawal
      Certificate or otherwise instructed in writing to the Accounts Bank by the
      Administrative Agent as equal to the difference between (A) the
      Working Capital Reserve Required Amount and (B) the funds on deposit
      in or standing to the credit of the Working Capital Reserve Account on
      such Monthly Date;

              

      

    

     

    
      
        	
              	
                (viii) 

              	
                eighth, on any Monthly
      Date and on the Working Capital Maturity Date, to pay to the
      Administrative Agent, for the account of the Working Capital Lenders, the
      amount certified by the Borrowers' Agent in such Revenue Account
      Withdrawal Certificate or otherwise instructed in writing to the Accounts
      Bank by the Administrative Agent as the aggregate principal amount due and
      payable with respect to the Working Capital Loans, or otherwise at the
      option of the Borrowers, to repay principal amounts with respect to the
      Working Capital Loans;

              

      

    

     

    
      
        	
              	
                (ix) 

              	
                ninth, on each Monthly
      Date, to the Debt Service Reserve Account, in the amount certified by the
      Borrowers' Agent in such Revenue Account Withdrawal Certificate or
      otherwise instructed in writing to the Accounts Bank by the Administrative
      Agent as equal to the difference between (A) the Debt Service Reserve
      Requirement and (B) the funds on deposit in or standing to the credit
      of the Debt Service Reserve Account (including the Stated Amount of any
      Debt Service Reserve Letter of Credit) on such Monthly
    Date;

              

      

    

     

    
      
        	
              	
                (x) 

              	
                tenth, provided that no
      Default or Event of Default has occurred and is continuing, on each
      Quarterly Payment Date, in the amount certified by an Authorized Officer
      of the Borrowers' Agent in such Revenue Account Withdrawal Certificate to
      the Persons or accounts specified in such Revenue Account Withdrawal
      Certificate, as Current Priority Subordinated Interest for the Quarterly
      Period ending on such Quarterly Payment Date in an amount not to exceed on
      any such Quarterly Payment Date, one million Dollars
      ($1,000,000);

              

      

    

     

    
      
        	
              	
                (xi) 

              	
                eleventh, on each
      Quarterly Payment Date, to the Administrative Agent in the amount
      certified by the Borrowers in such Revenue Account Withdrawal Certificate
      or otherwise instructed in writing to the Accounts Bank by the
      Administrative Agent, for application as a prepayment of the Term Loans in
      accordance with Section 3.10
      (Mandatory
      Prepayment) in an amount
      equal to fifty percent (50%) of the cash remaining in the Revenue
      Account after the transfer required pursuant to priority tenth, if
      any;

              

      

    

     

    
      
        	
              	
                (xii) 

              	
                twelfth, provided that
      no Default or Event of Default has occurred and is continuing, on each
      Quarterly Payment Date, in an amount certified by the Borrowers' Agent in
      such Revenue Account Withdrawal Certificate to the Persons or accounts
      specified in such Revenue Account Withdrawal Certificate (including, if
      required to be paid directly to any taxing authority, to such taxing
      authority) for payment of any Permitted Tax
  Distribution;

              

      

    

     

    
      
        
        

      

      
        112

        
          

        

      

      
        
        

      

    

     

    
      
        	
              	
                (xiii) 

              	
                thirteenth, on each
      Quarterly Payment Date, to the Administrative Agent, in the amount
      certified by the Borrowers in such Revenue Account Withdrawal Certificate
      or otherwise instructed in writing to the Accounts Bank by the
      Administrative Agent, for application as a prepayment of the Term Loans in
      accordance with Section 3.10
      (Mandatory
      Prepayment) in an amount
      equal to the greater of (x) an amount such that after such prepayment
      the then-outstanding principal amount of the Term Loans is equal to the
      Target Balance Amount for such Quarterly Payment Date and (y) on and
      after the second anniversary of the Conversion Date, twenty-five percent
      (25%) of the cash remaining in the Revenue Account after the transfer
      required pursuant to priority tenth, if any (in each
      case, to the extent funds are available at this priority thirteenth);

              

      

    

     

    
      
        	
              	
                (xiv) 

              	
                fourteenth, on each
      Quarterly Payment Date (A) if the Historical Debt Service Coverage
      Ratio as of such Quarterly Payment Date is less than 1.5:1, to the
      Administrative Agent, all amounts on deposit in or standing to the credit
      of the Revenue Account after the transfer required to be made pursuant to
      priority thirteenth, for
      application as a prepayment of the Term Loans in accordance with Section 3.10
      (Mandatory
      Prepayment) or
      (B) if the Historical Debt Service Coverage Ratio as of such
      Quarterly Payment Date is greater than or equal to 1.5:1 and the
      Prospective Debt Service Coverage Ratio as of such Quarterly Payment Date
      is less than 1.5:1, as certified by the Borrowers' Agent in such Revenue
      Account Withdrawal Certificate or instructed in writing to the Accounts
      Bank by the Administrative Agent, to the Prepayment Holding Account, all
      amounts on deposit in or standing to the credit of the Revenue Account
      after the transfer required pursuant to priority thirteenth;
      and

              

      

    

     

    
      
        	
              	
                (xv) 

              	
                fifteenth, subject to
      the satisfaction of the conditions set forth in Section 7.02(s)
      (Negative
      Covenants - Restricted Payments), (A) in
      the amount certified in the Restricted Payment Certificate by an
      Authorized Officer of the Borrowers' Agent, to the Persons or accounts
      specified in the Restricted Payment Certificate, for the payment of
      amounts then due and owing with respect to the Subordinated Loans and
      (B) thereafter, to the Pledgor in the amount certified by the
      Borrowers in a Restricted Payment Certificate by an Authorized Officer of
      the Borrowers' Agent and confirmed by the Administrative Agent in
      writing.

              

      

    

     

    Section
8.09 Operating
Account.  (a) Funds shall be deposited into the Operating
Account pursuant to Sections 8.08(b)(i) and
(c)(i) (Revenue
Account).

     

    (b) Unless a
Notice of Suspension is in effect or a Default or Event of Default would occur
after giving effect to any application of funds contemplated hereby, and so long
as adequate funds are then available in the Operating Account, the
Borrowers:

     

    
      
        	
              	
                (i) 

              	
                may,
      by written instruction to the Accounts Bank (with a copy to the Collateral
      Agent), withdraw or transfer funds from the Operating Account from time to
      time as may be necessary to pay directly any amounts owed by the Borrowers
      for Operation and Maintenance Expenses;
and

              

      

    

     

    
      
        
        

      

      
        113

        
          

        

      

      
        
        

      

    

     

    
      
        	
              	
                (ii) 

              	
                may
      direct the transfer of funds to the Local Accounts from time to time, by
      delivery of an Operating Account Withdrawal Certificate to the Accounts
      Bank; provided, that
      the funds on deposit in and standing to the credit of all Local Accounts
      with respect to which a Blocked Account Agreement has been executed and is
      in full force and effect do not exceed, in the aggregate at any one time,
      two hundred thousand Dollars ($200,000) for each Plant that has achieved
      its Commercial Operation Date, as certified by the Borrowers' Agent in
      such Operating Account Withdrawal
Certificate.

              

      

    

     

    Section
8.10 Maintenance Capital Expense
Account.  (a) Funds shall be deposited into the
Maintenance Capital Expense Account pursuant to Sections 8.08(b)(ii)
and (c)(ii) (Revenue
Account).

     

    (b) Unless a
Notice of Suspension is in effect or a Default or Event of Default would occur
after giving effect to any application of funds contemplated hereby, and so long
as adequate funds are then available in the Maintenance Capital Expense Account,
the Borrowers may, by written instruction to the Accounts Bank (with a copy to
the Collateral Agent), withdraw or transfer funds from the Maintenance Capital
Expense Account from time to time as may be necessary to pay directly any
amounts owed by the Borrowers for Maintenance Capital Expenses in accordance
with the most recent Revenue Account Withdrawal Certificate.

     

    Section
8.11 Working Capital Reserve
Account.  (a) Funds shall be deposited into the Working
Capital Reserve Account in accordance with Sections 8.08(b)(vi)
and (c)(viii) (Revenue
Account), Section 3.09(d)(iii)(B)
(Optional
Prepayments) and Section 3.10(e)
(Mandatory
Prepayments).  Amounts
deposited into the Working Capital Reserve Account pursuant to priority item
second of Sections 3.10(d)(e)(i)
and (ii) shall be deposited into a sub-account (the "Working Capital LC
Collateral Sub-Account").

     

    (b) Unless a
Notice of Suspension is in effect or a Default or Event of Default would occur
after giving effect to any application of funds contemplated hereby, the
Borrowers may direct, by delivery of a Working Capital Transfer Certificate to
the Accounts Bank (with a copy to the Administrative Agent), the transfer or
withdrawal of amounts standing to the credit of the Working Capital Reserve
Account (other than amounts standing to the credit of the Working Capital LC
Collateral Sub-Account) to pay directly:

     

    
      
        	
              	
                (i) 

              	
                amounts
      due and owing for Operation and Maintenance Expenses in accordance with
      the Operating Budget, but only to the extent that adequate funds are not
      available for the payment of such Operation and Maintenance Expenses in
      the Operating Account; provided, that
      the amount of such transfer of funds, when taken together with the amounts
      transferred to the Operating Account during such month pursuant to Section 8.08(b)(i)
      (Revenue
      Account) or Section 8.08(c)(i)
      (Revenue
      Account) (excluding
      any amounts transferred to the Operating Account to cover the cost of
      corn, natural gas, electricity, insurance premiums and Borrower Taxes),
      does not exceed the Permitted Operating Budget Deviation
      Levels;

              

      

    

     

    
      
        
        

      

      
        114

        
          

        

      

      
        
        

      

    

     

    
      
        	
              	
                (ii) 

              	
                amounts
      due and owing for Maintenance Capital Expenses in accordance with the
      Operating Budget, but only to the extent that adequate funds are not
      available for the payment of such Maintenance Capital Expenses in the
      Maintenance Capital Expense Account; provided, that
      the amount of such transfer of funds, when taken together with the amounts
      transferred to the Maintenance Capital Expense Account during such month
      pursuant to Section 8.08(b)(ii)
      (Revenue
      Account) or Section 8.08(c)(ii)
      (Revenue
      Account), does not
      exceed the Permitted Operating Budget Deviation Levels;
  and

              

      

    

     

    
      
        	
              	
                (iii) 

              	
                amounts
      due and owing for start-up costs with respect to the Greenfield
      Plants.

              

      

    

     

    (c) If, on
any Quarterly Payment Date, the funds on deposit in or standing to the credit of
the Working Capital Reserve Account (other than amounts standing to the credit
of the Working Capital LC Collateral Sub-Account) are in excess of the Working
Capital Reserve Required Amount, unless a Notice of Suspension is in effect or a
Default or Event of Default would occur after giving effect to such transfer,
the Borrowers may direct, by delivery of a Working Capital Transfer Certificate
to the Accounts Bank (with a copy to the Administrative Agent), the transfer to
the Revenue Account of an amount equal to the difference between (x) the
aggregate total amount of all funds on deposit in or standing to the credit of
the Working Capital Reserve Account and (y) the Working Capital Reserve
Required Amount, as certified by the Borrowers' Agent and confirmed by the
Administrative Agent in such Working Capital Transfer Certificate.

     

    (d) Following
the funding of the Working Capital LC Collateral Sub-Account, the Borrowers or
the Administrative Agent may direct in writing, in the case of the Borrowers by
delivery of a Working Capital Transfer Certificate to the Accounts Bank (with a
copy to the Administrative Agent), the transfer of amounts standing to the
credit of the Working Capital LC Collateral Sub-Account to pay to the
Administrative Agent, for the account of the Working Capital Lenders, the amount
of such Working Capital Loans then due and payable.

     

    (e) If at any
time the amounts standing to the credit of the Working Capital LC Collateral
Sub-Account are in excess of the aggregate Maximum Available Amounts under all
Letters of Credit then outstanding, the Borrowers may direct, by delivery of a
Working Capital Transfer Certificate to the Accounts Bank (with a copy to the
Administrative Agent), the transfer to the Working Capital Reserve Account of an
amount equal to the difference between (x) the aggregate total amount of
all funds on deposit in or standing to the credit of the Working Capital LC
Collateral Sub-Account and (y) the aggregate of all such Maximum Available
Amounts, as certified by the Borrowers' Agent.

     

    
      
        
        

      

      
        115

        
          

        

      

      
        
        

      

    

    Section
8.12 Debt Service Reserve
Account.  (a) Funds shall be deposited into the Debt
Service Reserve Account:

     

    
      
        	
              	
                (i) 

              	
                on
      the In-Progress Plant 1 Construction Loan Funding Date, from the Escrow
      Account as directed in writing pursuant to Section 8.03(b)
      (Escrow
      Account), in the amount required pursuant to Section 7.01(g)
      (Affirmative
      Covenants-Use of Proceeds) with respect
      to such Construction Loans to cover the required funding of fifty percent
      (50%) of the Debt Service Reserve
Requirement;

              

      

    

     

    
      
        	
              	
                (ii) 

              	
                on
      the In-Progress Plant 2 Construction Loan Funding Date, from the Escrow
      Account as directed in writing pursuant to Section 8.03(b)
      (Escrow
      Account), and the proceeds (if any) of In-Progress Plant 2 Tranche
      A Construction Loans, as applicable, in the amount required pursuant to
      Section 7.01(g)
      (Affirmative
      Covenants-Use of Proceeds) with respect
      to such Construction Loans to cover the required funding of fifty percent
      (50%) of the Debt Service Reserve
Requirement;

              

      

    

     

    
      
        	
              	
                (iii) 

              	
                on
      the Conversion Date, pursuant to disbursement priority first as set
      forth in Section 2.06(e)
      (Funding
      of Loans);
      and

              

      

    

     

    
      
        	
              	
                (iv) 

              	
                pursuant
      to Section 8.08(c)(ix)
      (Revenue
      Account);

              

      

    

     

    provided
that, notwithstanding the foregoing, in lieu of cash, the Borrowers may cause to
be delivered to the Accounts Bank one or more Debt Service Reserve Letters of
Credit (each of which shall be accompanied by a Debt Service LC Waiver Letter),
the Stated Amounts of which shall be credited to the Debt Service Reserve
Account.

     

    (b) On any
date when the amounts available at priorities third through sixth as set forth in Section 8.08(c)
(Revenue
Account)
are insufficient to pay Debt Service then due and owing, the Accounts Bank shall
(upon written notification from the Borrowers' Agent or the Administrative Agent
setting forth the amount of such shortfall) withdraw funds from the Debt Service
Reserve Account to pay to the Administrative Agent, for the account of the
Senior Secured Parties, the amount of such shortfall of the Debt Service then
due and payable, which funds shall be applied in the order of priority set forth
in priorities third
through sixth of Section 8.08(c)
(Revenue
Account).  The Accounts Bank shall promptly notify the
Administrative Agent and the Collateral Agent if, at any time, there are
insufficient funds (without taking into account any Debt Service Reserve Letters
of Credit) standing to the credit of the Debt Service Reserve Account to make
the payments required under this Section 8.12(b).

     

    
      
        
        

      

      
        116

        
          

        

      

      
        
        

      

       

    

    (c) Upon the
written instruction of the Administrative Agent, the Collateral Agent shall make
a demand in accordance with the provisions of each Debt Service Reserve Letter
of Credit, drawdown all or a portion of the Stated Amount of any Debt Service
Reserve Letter of Credit that has been delivered in accordance with this
Agreement, and deposit the funds received into the Debt Service Reserve
Account.  The Administrative Agent shall instruct Collateral Agent to
make such demand:

     

    
      
        	
              	
                (i) 

              	
                if
      amounts are required to be withdrawn from the Debt Service Reserve Account
      pursuant to Section 8.12(b),
      and the amounts to be so withdrawn exceed the funds, not including the
      aggregate Stated Amounts of the Debt Service Reserve Letters of Credit
      standing to the credit of the Debt Service Reserve Account, in the amount
      necessary to make the payments of Debt Service then due and
      payable;

              

      

    

     

    
      
        	
              	
                (ii) 

              	
                in
      full, if the commercial bank that issued such Debt Service Reserve Letter
      of Credit is no longer an Acceptable Bank;
or

              

      

    

     

    
      
        	
              	
                (iii) 

              	
                in
      full, if (A) no less than thirty (30) days prior to the expiry
      date of each such Debt Service Reserve Letter of Credit, the Collateral
      Agent has not received notice from the issuing bank that it will extend
      such expiry date or renew such Debt Service Reserve Letter of Credit and
      no substitute or replacement letter of credit satisfying the requirements
      of a "Debt Service Reserve Letter of Credit" has been delivered to the
      Collateral Agent to replace the Stated Amount of such expiring Debt
      Service Reserve Letter of Credit and (B) excluding the Stated Amount
      of such Debt Service Reserve Letter of Credit and the Stated Amount of any
      other Debt Service Reserve Letter of Credit that similarly could be
      drawndown, an amount equal to the Debt Service Reserve Requirement is not
      on deposit in or standing to the credit of the Debt Service Reserve
      Account on the date of such
drawdown.

              

      

    

     

    (d) If, on
any Quarterly Payment Date, the funds on deposit in or standing to the credit of
the Debt Service Reserve Account (taking into account the Stated Amounts of any
Debt Service Reserve Letters of Credit standing to the credit of the Debt
Service Reserve Account) are in excess of the Debt Service Reserve Requirement,
unless a Notice of Suspension is in effect or a Default or Event of Default
would occur after giving effect to such transfer, the Borrowers may direct, by
delivery of a Debt Service Reserve Release Certificate to the Accounts Bank
(with a copy to the Administrative Agent), the transfer to the Revenue Account
of an amount equal to the difference between (x) the aggregate total amount of
all funds on deposit in or standing to the credit of the Debt Service Reserve
Account (taking into account the Stated Amounts of any Debt Service Reserve
Letters of Credit standing to the credit of the Debt Service Reserve Account)
and (y) the Debt Service Reserve Requirement, as certified by the Borrowers'
Agent and confirmed by the Administrative Agent in such Debt Service Release
Certificate; provided, that if
such difference is positive due to the posting of a Debt Service Reserve Letter
of Credit to the Debt Service Reserve Account to replace or substitute for cash
then on deposit, such amount may be distributed directly to Pacific Ethanol or
such other Affiliate of the Borrowers who provided such Debt Service Reserve
Letter of Credit (and such distribution shall not be treated as a Restricted
Payment for purposes of this Agreement).

     

    
      
        
        

      

      
        117

        
          

        

      

      
        
        

      

    

     

    Section
8.13 Prepayment Holding
Account.  (a) Funds shall be deposited into the Prepayment
Holding Account pursuant to Section 8.08(c)(xiv)(B)
(Revenue
Account).

     

    (b) The
Accounts Bank shall withdraw funds from the Prepayment Holding Account upon
receipt of written instructions from the Borrowers' Agent or the Administrative
Agent in accordance with the terms set forth below.

     

    
      
        	
              	
                (i) 

              	
                If,
      on any such Quarterly Payment Date, each of the Historical Debt Service
      Coverage Ratio and the Prospective Debt Service Coverage Ratio are greater
      than or equal to 1.5:1 then, subject to the satisfaction of the conditions
      set forth in Section 7.02(s)
      (Negative
      Covenants - Restricted Payments), the
      Borrowers may submit a Restricted Payment Certificate to the Accounts Bank
      directing the transfer of amounts on deposit in and standing to the credit
      of the Prepayment Holding Account for Restricted Payments by the
      Borrowers.

              

      

    

     

    
      
        	
              	
                (ii) 

              	
                If,
      on any such Quarterly Payment Date, the Historical Debt Service Coverage
      Ratio is less than 1.5:1 then all amounts on deposit in and standing to
      the credit of the Prepayment Holding Account shall, upon the written
      instruction of the Borrowers' Agent or the Administrative Agent, be
      transferred to the Administrative Agent for application as a prepayment of
      the Term Loans in accordance with Section 3.10
      (Mandatory
      Prepayment).

              

      

    

     

    Section
8.14 Insurance and Condemnation
Proceeds Accounts.  (a) From and after the Closing Date,
in the case of Pacific Holding, and from and after the initial Funding Date for
each other Borrower and such Borrower's Plant, the applicable Borrowers shall
cause all Insurance Proceeds and all Condemnation Proceeds payable to each such
Borrower, or otherwise relating to the each Plant, to be deposited in or
credited to the Insurance and Condemnation Proceeds Account for such
Plant.

     

    (b) The
Borrowers shall not make, direct, or request the Accounts Bank to make, any
withdrawals from any Insurance and Condemnation Proceeds Account except as
permitted by this Section 8.14,
and provided that no Notice of Suspension has been delivered that has not been
withdrawn and no Default or Event of Default would occur as a result of such
transfer or withdrawal.

     

    (c) The
Borrowers may apply any Insurance Proceeds and Condemnation Proceeds deposited
into any Insurance and Condemnation Proceeds Account in amounts less than or
equal to two million five hundred thousand Dollars ($2,500,000) arising from any
one claim or any series of claims relating to the same occurrence with respect
to the same Plant directly for the replacement or repair of damaged assets to
which such Insurance Proceeds or Condemnation Proceeds. as the case may be,
relate; provided, that the
Borrowers deliver to the Administrative Agent and the Accounts Bank, no fewer
than three (3) Business Days in advance of any such proposed transfers or
withdrawals from such Insurance and Condemnation Proceeds Account, an Insurance
and Condemnation Proceeds Request Certificate setting forth proposed
instructions for such withdrawals or transfers.  A Financial Officer
of the Borrowers' Agent shall certify that each Insurance and Condemnation
Proceeds Request Certificate is being delivered, and the withdrawals specified
therein are being directed, in accordance with this Agreement and the other
Transaction Documents, and shall also certify that the directed withdrawals or
transfers will be used exclusively for repair or replacement of damaged assets
to which such Insurance Proceeds or Condemnation Proceeds, as the case may be,
relate.

     

    
      
        
        

      

      
        118

        
          

        

      

      
        
        

      

    

     

    (d) Any
Insurance Proceeds and Condemnation Proceeds deposited into any Insurance and
Condemnation Proceeds Account in amounts greater than two million five hundred
thousand Dollars ($2,500,000) but less than or equal to fifteen million Dollars ($15,000,000)
arising from any one claim or any series of claims relating to the same
occurrence with respect to the same Plant shall:

     

    
      
        	
              	
                (i) 

              	
                be
      applied for repair or replacement of damaged assets to which such
      Insurance Proceeds or Condemnation Proceeds, as the case may be, relate in
      accordance with the Borrowers' direction in an Insurance and Condemnation
      Proceeds Request Certificate delivered to the Administrative Agent and the
      Accounts Bank if, within sixty (60) days after the occurrence of the
      Casualty Event or Event of Taking giving rise to such proceeds, the
      Borrowers deliver a Restoration or Replacement Plan to the Administrative
      Agent and the Independent Engineer with respect to such Casualty Event or
      Event of Taking that is based upon, and accompanied by, each of the
      following:

              

      

    

     

    
      
        	
              	
                (A)

              	
                a
      description of the nature and extent of such Casualty Event or Event of
      Taking, as the case may be;

              

      

    

     

    
      	
              (B)    
       

            	
              a
      bona fide assessment (from a contractor reasonably acceptable to the
      Independent Engineer) of the estimated cost and time needed to restore or
      replace the relevant Plant to substantially the same value and general
      performance capability as prior to such
event;

            

    

     

    
      	
              (C)    
       

            	
              reasonably
      satisfactory evidence that such Insurance Proceeds or Condemnation
      Proceeds, as the case may be, are sufficient to make the necessary
      restorations or replacements;

            

    

     

    
      	
              (D)     
      

            	
              a
      certificate of a Financial Officer of the Borrowers' Agent certifying that
      (1) all work contemplated to be done under the Restoration or
      Replacement Plan can be done within the time periods, if any, required
      under any Project Document relating to the relevant Plant; (2) all
      Governmental Approvals necessary to perform the work have been obtained
      (or are reasonably expected to be obtained without undue delay); and
      (3) the relevant Plant once repaired/restored will continue to
      perform at the levels set forth in the then-current Operating Budget for
      such Plant with respect to production volume, yield and utility
      consumption (or other levels approved by the Required
      Lenders);

            

    

     

    
      	
              (E)     
      

            	
              the
      Casualty Event or Event of Taking , as the case may be (including the
      non-operation of such Plant during any period of repair or restoration)
      has not resulted or would not reasonably be expected to result in a
      default giving rise to a termination of, or a materially adverse
      modification of, one or more of the Governmental Approvals or Project
      Documents;

            

    

     

    
      
        
        

      

      
        119

        
          

        

      

      
        
        

      

    

     

    
      	
              (F)    
       

            	
              after
      taking into consideration the availability of such Insurance Proceeds or
      Condemnation Proceeds, as applicable, and Business Interruption Insurance
      Proceeds and any additional documented voluntary equity contributions for
      the purpose of covering such costs, there will be adequate amounts
      available to pay all ongoing expenses including Debt Service during the
      period of repair or restoration;

            

    

     

    
      	
              (G)    
       

            	
              construction
      contractors and vendors of recognized skill, reputation and
      creditworthiness and reasonably acceptable to the Administrative Agent
      have executed reconstruction contracts, purchase orders or similar
      arrangements for the repair, rebuilding or restoration on terms and
      conditions reasonably acceptable to the Administrative Agent;
      and

            

    

     

    
      	
              (H)     

            	
              a
      confirmation by the Independent Engineer of its agreement with the matters
      set forth in Section 8.14(d)(i)(A)-(G)
      and its approval of such Restoration or Replacement Plan;
    or

            

    

     

    
      
        	
              	
                (ii) 

              	
                if
      (A) the Borrowers do not deliver such Restoration or Replacement Plan
      and the accompanying deliveries referred to in Section 8.14(d)(i)
      within such sixty (60) day period or (B) after the completion of
      such Restoration or Replacement Plan, there are excess Insurance Proceeds
      or Condemnation Proceeds, as the case may be, on deposit in or standing to
      the credit of such Insurance and Condemnation Proceeds Account, the
      Accounts Bank shall on the next succeeding Quarterly Payment Date
      thereafter, upon the written instruction of the Borrowers' Agent or the
      Administrative Agent, transfer to the Administrative Agent, for the
      account of the Lenders, an amount equal to such Insurance Proceeds or
      Condemnation Proceeds, as the case may be, for mandatory prepayment of the
      Loans in accordance with Section 3.10
      (Mandatory
      Prepayments).

              

      

    

     

    (e) Any
Insurance Proceeds or Condemnation Proceeds deposited into any Insurance and
Condemnation Proceeds Account in amounts greater than fifteen million Dollars
($15,000,000) arising from any one claim or any series of claims relating to the
same occurrence with respect to the same Plant shall be applied, at the written
instruction of the Administrative Agent, to prepay the Loans or for repair or
replacement of damaged assets, as determined by the Required Lenders in their
sole discretion.

     

    Section
8.15 Extraordinary Proceeds
Account.  (a) From and after the Closing Date, in the case of
Pacific Holding, and from and after the initial Funding Date for each other
Borrower and such Borrower's Plant, the applicable Borrowers shall cause
(i) all proceeds of asset disposals (other than proceeds from the sale of
Products) that will not be used for replacement in accordance with Section 7.02(f)(i)
(Negative
Covenants - Asset Dispositions) and (ii) all Project Document
Termination Payments, in each such case relating to Pacific Holding or a Plant
or Borrower with respect to which a Funding has been made, to be deposited into
the Extraordinary Proceeds Account.

     

    
      
        
        

      

      
        120

        
          

        

      

      
        
        

      

    

     

    (b) If at any
time proceeds of an asset disposal are deposited into the Extraordinary Proceeds
Account, then on any Quarterly Payment Date:

     

    
      	
              (i)     
       

            	
              if
      such proceeds are in an amount in the aggregate of less than two million
      five hundred thousand Dollars ($2,500,000) (taken together with any other
      proceeds of asset disposals deposited in the Extraordinary Proceeds
      Account during the then-current Fiscal Year) the Borrowers may submit an
      Extraordinary Proceeds Release Notice to the Accounts Bank, certified by
      an Authorized Officer of the Borrowers' Agent, directing the transfer of
      such funds to the Revenue Account;
and

            

    

     

    
      	
              (ii)     
       

            	
              if
      such proceeds are in an amount equal to or greater than two million five
      hundred thousand Dollars ($2,500,000) (taken together with any other
      proceeds of asset disposals deposited in the Extraordinary Proceeds
      Account during the then-current Fiscal Year), such amounts shall be
      transferred, upon the written instruction of the Borrowers' Agent or the
      Administrative Agent, to the Administrative Agent for application as a
      prepayment of the Loans in accordance with Section 3.10
      (Mandatory
      Prepayment).

            

    

     

    (c) If at any
time Project Document Termination Payments are deposited into the Extraordinary
Proceeds Account, then on any Quarterly Payment Date:

     

    
      
        	
              	
                (i) 

              	
                if
      such Project Document Termination Payments are in an amount in the
      aggregate of less than five million Dollars ($5,000,000) (taken together
      with any other Project Document Termination Payments received during the
      then-current Fiscal Year), the Borrowers may submit an Extraordinary
      Proceeds Release Notice to the Accounts Bank, certified by an Authorized
      Officer of the Borrowers' Agent, directing the transfer of such Project
      Document Termination Payments to the Revenue Account;
  and

              

      

    

     

    
      
        	
              	
                (ii) 

              	
                if
      such Project Document Termination Payments are in an amount equal to or
      greater than five million Dollars ($5,000,000) (taken together with any
      other Project Document Termination Proceeds received during the
      then-current Fiscal Year), such amounts shall be transferred, upon the
      written instruction of the Borrowers' Agent or the Administrative Agent,
      to the Administrative Agent for application as a prepayment of the Loans
      in accordance with Section 3.10
      (Mandatory
      Prepayment).

              

      

    

     

    
      
        
        

      

      
        121

        
          

        

      

      
        
        

      

    

     

    Section
8.16 Warranty
Accounts.  (a)  The Borrowers shall cause all
Warranty Proceeds payable to each Borrower, or otherwise relating to each Plant,
to be deposited in the Warranty Account for such Plant.

     

    (b) Unless a
Notice of Suspension is in effect or a Default or Event of Default would occur
after giving effect to any application of funds contemplated hereby, the
Borrowers may direct the transfer or withdrawal of funds standing to the credit
of the Warranty Accounts to pay any amounts necessary to cover costs and
expenses incurred by the Borrowers in performing or causing to be performed any
Warranty Work with respect to the Plant to which such Warranty Proceeds relate,
by delivering a Warranty Proceeds Request Certificate to the Accounts Bank (with
a copy to the Administrative Agent and the Independent Engineer), which shall be
for application strictly in accordance with the relevant Warranty
Notice.  All payments from the Warranty Accounts shall be made by the
Accounts Bank pursuant to instructions set forth in the relevant Warranty
Proceeds Request Certificate.  In the event that the Borrowers fail to
deliver such a Warranty Proceeds Request Certificate, the Administrative Agent
is hereby authorized to direct, in writing to the Accounts Bank to transfer or
withdraw the funds necessary to pay any amounts necessary to cover costs and
expenses incurred by the Borrowers in performing or causing to be performed any
Warranty Work with respect to the Plant to which such Warranty Proceeds
relate.

     

    Section
8.17 Representations, Warranties
and Covenants of Accounts Bank.  The Accounts Bank hereby
represents and warrants, covenants and agrees with the Lenders, the Agents and
the Borrowers (and the other parties hereto agree, to the extent set forth
below) as follows:

     

    (a) it will
act as depositary agent, as "securities intermediary" (within the meaning of
Section 8-102(a)(14) of the UCC) with respect to each of the Project Accounts
that is a "securities account" (within the meaning of Section 8-501 of the UCC)
and the Financial Assets credited to such Project Accounts, and as "bank"
(within the meaning of 9-102(a)(8) of the UCC) with respect to each of the
Project Accounts as described in Section 8.19 (Project
Accounts as Deposit Accounts) and credit balances
not constituting Financial Assets credited thereto and to accept all cash,
payments, other amounts and Cash Equivalents to be delivered to or held by the
Accounts Bank pursuant to the terms of this Agreement.  The Borrowers,
the Senior Secured Parties and the Accounts Bank agree that, for purposes of
Articles 8 and 9 of the UCC, notwithstanding anything to the contrary
contained in any other agreement relating to the establishment and operation of
the Project Accounts, the jurisdiction of the Accounts Bank (in its capacity as
the securities intermediary and bank) is the State of New York;

     

    
      
        
        

      

      
        122

        
          

        

      

      
        
        

      

    

     

    (b) the
Accounts Bank hereby agrees and confirms that it has established and maintains
the Project Accounts as set forth and defined in this Agreement.  The
Accounts Bank agrees that (i) each such Project Account established by the
Accounts Bank is and will be maintained as a "securities account" (within the
meaning of Section 8­501 of the UCC); (ii) the Borrowers' Agent is the
"entitlement holder" (within the meaning of Section 8­102(a)(7) of the UCC)
in respect of the "financial assets" (within the meaning of Section
8­102(a)(9) of the UCC, the "Financial Assets")
credited to such Project Accounts that are "securities accounts"; (iii) all
Financial Assets in registered form or payable to or to the order of and
credited to any such Project Account shall be registered in the name of, payable
to or to the order of, or specially endorsed to, the Accounts Bank or in blank,
or credited to another securities account maintained in the name of the Accounts
Bank ; and (iv) in no case will any Financial Asset credited to any such Project
Account be registered in the name of, payable to or to the order of, or endorsed
to, the Borrowers' Agent, Pacific Holding or any other Borrower except to the
extent the foregoing have been subsequently endorsed by such Person to the
Accounts Bank or in blank.  Each item of property (including a
security, security entitlement, investment property, instrument or obligation,
share, participation, interest or other property whatsoever) credited to any
Project Account shall to the fullest extent permitted by law be treated as a
Financial Asset.  Until the Discharge Date, this Agreement is intended
to provide the Collateral Agent with "control" (within the meaning of Section
8­106(d)(2) or Section 9-104(a) (as applicable) of the UCC) of the Project
Accounts and each Borrower's "security entitlements" (within the meaning of
Section 8­102(a)(17) of the UCC) with respect to the Financial Assets
credited to the Project Accounts.  The Borrowers' Agent hereby
irrevocably directs, and the Accounts Bank (in its capacity as securities
intermediary) hereby agrees, that the Accounts Bank will comply with all
instructions and orders (including entitlement orders within the meaning of
Section 8-102(a)(8) of the UCC) regarding each Project Account and any Financial
Asset therein originated by the Collateral Agent without the further consent of
the Borrowers' Agent or any other Person.  In the case of a conflict
between any instruction or order originated by the Collateral Agent and any
instruction or order originated by the Borrowers' Agent or any other Person
other than a court of competent jurisdiction, the instruction or order
originated by the Collateral Agent shall prevail.  The Accounts Bank
shall not change the name or account number of any Project Account without the
prior written consent of the Collateral Agent and at least five (5) Business
Days' prior notice to the Borrowers' Agent, and shall not change the entitlement
holder;

     

    (c) it shall
promptly perform all duties imposed upon a securities intermediary and a bank
under the UCC and this Agreement.  In this regard, (i) if the
Accounts Bank has knowledge that an issuer of any Financial Asset is required to
make a payment or distribution in respect of such Financial Asset, the Accounts
Bank shall have fulfilled its duty under applicable Law to take action to obtain
such payment or distribution if (A) it credits such payment or distribution
to the Project Accounts in accordance with this Agreement if such payment or
distribution is made or (B) it notifies the Borrowers' Agent, the
Collateral Agent and the Administrative Agent that such payment or distribution
has not been made, and (ii) if the Accounts Bank is required by applicable
Law or this Agreement to credit to any Project Account any Financial Asset
purported to be transferred or credited to the Accounts Bank pursuant to
applicable Law, the Accounts Bank shall have fulfilled its duty to so credit any
Project Account if it credits as a security entitlement to the applicable party
whatever rights the Accounts Bank purportedly has, in its capacity as Accounts
Bank, in the Financial Asset transferred or credited to the Accounts Bank, in
its capacity as Accounts Bank, and the Accounts Bank shall have no duty to
ensure that applicable Law has been complied with in respect of the transfer of
the Financial Asset or to create a security interest in or Lien on any Financial
Asset purported to be transferred or credited to the Accounts Bank and
subsequently credited to any Project Account;

     

    
      
        
        

      

      
        123

        
          

        

      

      
        
        

      

    

     

    (d) all
Financial Assets acquired by or delivered to the Accounts Bank shall be held by
the Accounts Bank and credited by book entry to the relevant Project Account or
otherwise accepted by the Accounts Bank for credit to the relevant Project
Account;

     

    (e) each item
of property (including any cash, security, general intangible, document,
instrument or obligation, share, participation, interest or other property
whatsoever) deposited in or credited to any Project Account shall be treated as
a Financial Asset for the purposes of Section 8-102(a)(9)(iii) of the
UCC.  Notwithstanding any provision herein contained to the contrary,
any property contained in the Project Accounts that is not deemed to be a
Financial Asset under applicable Law, to the extent permitted by applicable Law,
will be deemed to be deposited in a deposit account and subject to Section 8.19
(Project
Accounts as Deposit Account);

     

    (f) The
Collateral Agent shall have control of the security entitlements carried in the
Project Accounts and of the Financial Assets carried in the Project Accounts,
and each Borrower hereby disclaims any entitlement to claim control of such
security entitlements;

     

    (g) all
property delivered to the Accounts Bank pursuant to this Agreement or the other
Financing Documents will be promptly deposited in or credited to a Project
Account by an appropriate entry in its records in accordance with this
Agreement;

     

    (h) if any
Person (other than Collateral Agent, on behalf and for the benefit of the Senior
Secured Parties) asserts any lien, encumbrance or adverse claim (including any
writ, garnishment, judgment, warrant of attachment, execution or similar
process) against any Project Account or in any Financial Asset or other property
deposited therein or credited thereto of which the Accounts Bank has actual
knowledge, the Accounts Bank will promptly notify the Collateral Agent, the
Administrative Agent and the Borrowers' Agent in writing thereof;
and

     

    (i) the
Accounts Bank has not entered into and will not enter into any agreement with
respect to the Project Accounts or any Financial Assets or other property
deposited in or credited to any Project Account other than this Agreement and
its Fee Letter.  The Accounts Bank has not entered into and will not
enter into any agreement with any Borrower or any other Person purporting to
limit or condition the obligation of the Accounts Bank to comply with
entitlement orders or any other order originated by the Collateral Agent in
accordance with Sections 8.17(b)(Representations,
Warranties and Covenants of Accounts Bank) or Sections 8.19(b)
or (c)(Project
Accounts as Deposit Account).

     

    Section
8.18 Project
Accounts.  (a) The Accounts Property will not constitute
repayment of the Obligations until so applied as payments in accordance with the
terms of this Agreement and the other Financing Documents.

     

    
      
        
        

      

      
        124

        
          

        

      

      
        
        

      

    

     

    (b) The
Accounts Bank shall not have title to the funds on deposit in the Project
Accounts, and shall credit the Project Accounts with all receipts of interest,
dividends and other income received on the property held in the Project
Accounts.  The Accounts Bank shall administer and manage the Project
Accounts in strict compliance with its duties with respect to the Project
Accounts pursuant to this Agreement, and shall be subject to and comply with all
of the obligations that the Accounts Bank owes to the Borrowers' Agent and the
Collateral Agent, on behalf of the Senior Secured Parties, with respect to the
Project Accounts, including all subordination obligations set forth in Section 8.21
(Subordination) with respect to the
Accounts Bank's right of set-off or recoupment or right to obtain a Lien,
pursuant to the terms of this Agreement.  The Accounts Bank hereby
agrees to comply with any and all instructions originated by the Collateral
Agent directing the disbursement, deposit and/or transfer of any funds and all
other property held in the Project Accounts without any further consent of any
Borrower or any other Person and to comply with any and all instructions
originated by the Borrowers' Agent directing the disbursement, deposit and/or
transfer of any funds and all other property held in the Project Accounts
subject to the terms of this Agreement.

     

    Section
8.19 Project Accounts as Deposit
Account.  (a)  To the extent that the Project
Accounts are not considered securities accounts, the Project Accounts shall be
deemed to be deposit accounts in respect of any property deposited in or
credited to the Project Accounts that is not deemed to be a Financial Asset
under applicable Law.  Such deposit accounts and such property shall
be maintained with the Accounts Bank acting not as a securities intermediary,
but as a bank.

     

    (b) The
Borrowers' Agent shall be deemed the customer of the Accounts Bank for purposes
of the Project Accounts and, as such, shall be entitled to all of the rights
that customers of banks have under applicable Law with respect to deposit
accounts, including the right to withdraw funds from, or close, the Project
Accounts, in each such case subject to, and in accordance with, the terms of
this Agreement.

     

    (c) The
parties hereto agree that, to the extent that the Project Accounts are not
considered "securities accounts" (within the meaning of Section 8-501(a) of the
UCC), the Project Accounts shall be deemed to be "deposit accounts" (as defined
in Section 9-102(a)(29) of the UCC) to the extent a security interest can be
granted and perfected under the UCC in the Project Accounts as deposit accounts,
which the Borrowers shall maintain with the Accounts Bank acting not as a
securities intermediary but as a "bank" (within the meaning of Section
9-102(a)(8) of the UCC).  The Accounts Bank shall not have title to
the funds on deposit in the Project Accounts, and shall credit the Project
Accounts with all receipts of interest, dividends and other income received on
the property held in the Project Accounts.  The Accounts Bank shall
administer and manage the Project Accounts in strict compliance with all the
terms applicable to the Project Accounts pursuant to this Agreement, and shall
be subject to and comply with all the obligations that the Accounts Bank owes to
the Collateral Agent with respect to the Project Accounts, including all
subordination obligations, pursuant to the terms of this
Agreement.  The Accounts Bank hereby agrees to comply with any and all
instructions originated by the Collateral Agent directing disposition of funds
and all other property in the Project Accounts without any further consent of
the Borrowers or any other Person and to comply with any and all instructions
originated by the Borrowers' Agent directing the disbursement, deposit and/or
transfer of any funds and all other property held in the Project Accounts, in
each such case subject to, and in accordance with, the terms of this
Agreement.

     

    
      
        
        

      

      
        125

        
          

        

      

      
        
        

      

    

     

    Section
8.20 Duties of Accounts
Bank.  (a) The Accounts Bank will also have those duties
and responsibilities expressly set forth in this Agreement, and no additional
duties, responsibilities, obligations or liabilities shall be inferred from the
provisions of this Agreement or imposed on the Accounts Bank.  The
Accounts Bank will act at the written direction of the Collateral Agent, the
Administrative Agent and, as expressly provided in this Agreement, Borrowers'
Agent, but will not be required to take any action that is contrary to this
Agreement or applicable Law or that, in its reasonable judgment, would involve
it in expense or liability, unless it has been furnished with adequate indemnity
against such expense or liability.  The Accounts Bank will have no
responsibility to ensure the performance by any other party of its duties and
obligations hereunder.  The Accounts Bank will use the same care with
respect to the safekeeping and handling of property held in the Project Accounts
as the Accounts Bank uses in respect of property held for its own sole
benefit.

     

    (b) In
performing its functions and duties under this Agreement, the Accounts Bank will
act solely as the depository agent and as securities intermediary or as a bank,
as the case may be, with respect to the Project Accounts.  None of the
Senior Secured Parties or any Borrower will have any rights against the Accounts
Bank hereunder, other than for the Accounts Bank's gross negligence or willful
misconduct as determined by a court of competent jurisdiction by final and
Non-Appealable judgment.  Except as otherwise expressly provided in
this Agreement, the Borrowers will not have any right to direct the Accounts
Bank to distribute or allocate any funds, instruments, securities, Financial
Assets or other assets in the Project Accounts or to withdraw or transfer any
funds, instruments, securities, Financial Assets or other assets from the
Project Accounts.  Except as otherwise expressly provided in this
Agreement, the Collateral Agent will have the sole right to issue directions and
instructions to the Accounts Bank, acting as securities intermediary or bank, as
the case may be, in accordance with this Agreement, and to issue entitlement
orders with respect to the Project Accounts.  It is expressly
understood and agreed that any investment made with funds held in the Project
Accounts may be made only in accordance with the express provisions of Section 8.24
(Interest
and Investments).  The
Accounts Bank shall not in any way whatsoever be liable for any loss or
depreciation in the value of the investments made pursuant to the terms of this
Agreement.

     

    Section
8.21 Subordination.  (a) The
Accounts Bank hereby acknowledges the security interest granted hereby to the
Collateral Agent, on behalf and for the benefit of the Senior Secured Parties,
by the Borrowers.  In the event that the Accounts Bank has or
subsequently obtains by agreement, operation of applicable Law or otherwise a
right of recoupment or set-off or any Lien in any of the Project Accounts or any
Financial Asset or other property deposited therein or credited thereto or any
security entitlement related thereto, the Accounts Bank hereby agrees that such
right of recoupment or set-off and/or any such Lien shall be subordinate to the
security interest of the Collateral Agent, on behalf of and for the benefit of
the Senior Secured Parties.  The Accounts Bank agrees that it shall
not assert or enforce any such right of recoupment or set-off and/or any Lien
until the Discharge Date.

     

    
      
        
        

      

      
        126

        
          

        

      

      
        
        

      

    

     

    (b) The
Financial Assets and other items deposited in or credited to the Project
Accounts and the Accounts Property will not be subject to deduction, set-off,
banker's lien or any other right in favor of any Person other than the
Collateral Agent, on behalf and for the benefit of the Senior Secured
Parties.

     

    Section
8.22 Borrower
Acknowledgments.  (a) Each Borrower acknowledges that neither
any insufficiency of funds in the Project Accounts (or any of them), nor any
inability to apply any funds in the Project Accounts (or any of them) against
any or all amounts owing under any Financing Document, shall at any time limit,
reduce or otherwise affect the Borrowers' obligations under any Financing
Document.

     

    (b) Each
party to this Agreement acknowledges that the Accounts Bank and the Collateral
Agent shall not incur any obligation or liability in circumstances where there
are insufficient funds deposited in or credited to any Project Account to make a
payment in full that would otherwise have been made pursuant to the terms of
this Agreement, except (i) in the case of the Accounts Bank to the extent
that the loss arises directly from the Accounts Bank's gross negligence or
willful misconduct as determined by a court of competent jurisdiction by final
and Non-Appealable judgment, and (ii) in the case of the Collateral Agent,
to the extent that the loss arises directly from the Collateral Agent's gross
negligence or willful misconduct as determined by a court of competent
jurisdiction by final and Non-Appealable judgment.

     

    Section
8.23 Agreement to Hold In
Trust.  All payments received directly by any Borrower that are
required to be deposited into the Project Accounts in accordance with the terms
of this Agreement or any other Financing Document shall be held by such Borrower
in trust for the Collateral Agent, on behalf and for the benefit of the Senior
Secured Parties, shall be segregated from other funds of such Borrower and
shall, forthwith upon receipt by such Borrower, be turned over to the Collateral
Agent or its designee in the same form as received by such Borrower (duly
endorsed by such Borrower to the Collateral Agent or the Accounts Bank, if
requested) for deposit and disbursement in accordance with this
Agreement.

     

    Section
8.24 Interest and
Investments.  (a) Each amount deposited in or credited to
a Project Account from time to time shall, from the time it is so deposited or
credited until the time it is withdrawn from that Project Account (whether for
the purpose of making an investment in Cash Equivalents or otherwise applied in
accordance with the terms of this Agreement), earn interest at such rates as may
be agreed from time to time by Pacific Holding and the Accounts
Bank.

     

    
      
        
        

      

      
        127

        
          

        

      

      
        
        

      

    

     

    (b) Prior to
the receipt by the Accounts Bank of a Notice of Suspension, any amounts held by
the Accounts Bank in the Project Accounts shall be invested by the Accounts Bank
from time to time, at the risk and expense of the Borrowers, solely in such Cash
Equivalents as the Borrowers' Agent shall direct in writing.  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 to be made from the Project Accounts on such day in accordance
with this Agreement, the other Financing Documents and the Project
Documents.  Upon delivery by the Collateral Agent to the Accounts Bank
of a Notice of Suspension and until written revocation of such Notice of
Suspension is delivered to the Accounts Bank by the Collateral Agent, any
amounts held by the Accounts Bank in the Project Accounts shall be invested by
the Accounts Bank from time to time, solely in such Cash Equivalents as the
Collateral Agent may direct.

     

    (c) In the
event that the cash balance in any of the Project Accounts is as of any day
insufficient to cover the transfers to be made from such Project Account on such
day, the Collateral Agent may direct the Accounts Bank to sell or liquidate the
Cash Equivalents standing to the credit of such Project Account (without regard
to maturity date) in such manner as the Collateral Agent may deem necessary in
order to obtain cash at least sufficient to make such transfers and to pay any
expenses and charges incurred in connection with effecting any such sale or
liquidation, which expenses and charges the Accounts Bank shall be authorized to
pay with cash on deposit in such Project Account.  Neither the
Accounts Bank nor any Senior Secured Party shall be liable to any Person for any
loss suffered because of any such sale or liquidation.

     

    (d) All
interest and other investment income earned from Cash Equivalents made from
amounts in any Project Account shall remain in such Project Account until
transferred from such Project Account in accordance with the terms of this Article VIII.

     

    (e) It is
acknowledged by the parties hereto that all investment income earned on amounts
on deposit in or credited to the Project Accounts for all Tax purposes shall be
attributed to and be income of Pacific Holding.  Pacific Holding shall
be responsible for determining any requirements for paying Taxes or reporting or
withholding any payments for Tax purposes hereunder.  Pacific Holding
shall prepare and file all Tax information required with respect to the Project
Accounts.  Each Borrower agrees to indemnify and hold each Senior
Secured Party harmless against all liability for Tax withholding and/or
reporting for any investment income earned on the Project Accounts and payments
in respect thereof.  Such indemnities shall survive the termination or
discharge of this Agreement or resignation of the Accounts Bank.  No
Senior Secured Party shall have any obligation with respect to the making of or
the reporting of any payments for Tax purposes.  From time to time,
and as reasonably requested by the Accounts Bank, Pacific Holding or any other
Borrower shall provide to the Accounts Bank a United States Department of the
Treasury Internal Revenue Service tax Form W-8 or W-8BEN or other
appropriate form required with respect to the withholding or exemption from
withholding of income tax on any investment income earned on the Project
Accounts.

     

    Section
8.25 Accounts Bank
Information.  (a) The Accounts Bank will:

     

    
      
        	
              	
                (i) 

              	
                within
      five (5) Business Days after the end of the month in which the first
      deposit is made into any Project Account and within five (5) Business
      Days after the end of each month thereafter, provide the Borrowers' Agent,
      the Collateral Agent and the Administrative Agent a report with respect to
      the Project Accounts, setting forth in reasonable detail all deposits to
      and disbursements from each of the Project Accounts during such month,
      including the date on which made, and the balances of and any investments
      in each of the Project Accounts at the end of such month, including
      information regarding categories, amounts, maturities and issuers of Cash
      Equivalents; and

              

      

    

     

    
      
        
        

      

      
        128

        
          

        

      

      
        
        

      

    

     

    
      
        	
              	
                (ii) 

              	
                within
      three (3) Business Days after receipt of any written request by the
      Borrowers' Agent, the Collateral Agent or the Administrative Agent,
      provide to the Borrowers' Agent, the Collateral Agent or the
      Administrative Agent, as the case may be, such other information as the
      Borrowers' Agent, the Collateral Agent or the Administrative Agent may
      specify regarding all Cash Equivalents and any other investments made by
      the Accounts Bank pursuant hereto and regarding amounts available in the
      Project Accounts.

              

      

    

     

    Notwithstanding
the foregoing, the Accounts Bank will provide the Borrowers' Agent, the
Collateral Agent and the Administrative Agent such additional information
regarding the Project Accounts and the balances and Cash Equivalents therein as
any of them may reasonably request from time to time.

     

    (b) The
Accounts Bank will maintain all of the Project Accounts and all books and
records with respect thereto as may be necessary to record properly all
transactions carried out by it under this Agreement.

     

    (c) If any
Cash Equivalent ceases to be a Cash Equivalent, the Accounts Bank will, as soon
as reasonably practicable after becoming aware of such cessation, notify the
Collateral Agent and the Borrowers' Agent in writing of such cessation and, upon
the written direction of the Borrowers' Agent or the Collateral Agent, as the
case may be, will cause the relevant investment to be replaced by a Cash
Equivalent or by cash; provided that this
Section 8.25(c)
will not oblige the Accounts Bank to liquidate any investment earlier than its
normal maturity date unless:

     

    
      
        	
              	
                (i) 

              	
                directed
      to do so under Section 8.24
      (Interest
      and Investments);
      or

              

      

    

     

    
      
        	
              	
                (ii) 

              	
                the
      maturity date of the relevant investment exceeds the maturity date that
      would enable it to continue to qualify as a Cash
    Equivalent.

              

      

    

     

    Section
8.26 Notices of Suspension of
Accounts.  (a) The Collateral Agent may, but shall not be
required to, suspend the right of the Accounts Bank and the Borrowers' Agent to
withdraw or otherwise deal with any funds deposited in or credited to the
Project Accounts at any time during the occurrence and continuance of an Event
of Default by delivering a notice to the Accounts Bank (with a copy to the
Borrowers' Agent and the Administrative Agent) (a "Notice of
Suspension").

     

    (b) Notwithstanding
any other provision of the Financing Documents, after the issuance by the
Collateral Agent of a Notice of Suspension in accordance with Section 8.26(a)
and until such time as the Collateral Agent advises the Accounts Bank and the
Borrowers' Agent (with a copy to the Administrative Agent) that it has withdrawn
such Notice of Suspension, (which it shall do if such Event of Default is no
longer continuing) no amount may be withdrawn by the Accounts Bank from any
Project Account, including for investment in Cash Equivalents, without the
express prior written consent of the Collateral Agent.

     

    
      
        
        

      

      
        129

        
          

        

      

      
        
        

      

    

     

    (c) Notwithstanding
any other provision of the Financing Documents (but without limitation of Sections 8.02(g) or
(h) (Deposits
into and Withdrawals from Project Accounts), without the
express prior written consent of the Required Lenders, no amount may be
withdrawn from any Project Account if a Default or Event of Default would occur
as a result of such withdrawal.

     

    (d) On the
date of each withdrawal by the Accounts Bank from a Project Account, the
Borrowers' Agent shall be deemed to represent and warrant that no Notice of
Suspension is in effect and that that no Default or Event of Default would occur
as a result of such withdrawal, unless the Required Lenders have previously
consented in writing to such withdrawal, notwithstanding that a Notice of
Suspension is in effect or that a Default or Event of Default would occur as a
result of such withdrawal.

     

    ARTICLE
IX

     

    DEFAULT
AND ENFORCEMENT

     

    Section
9.01 Events of
Default.  Each of the following events or occurrences described
in this Section 9.01
shall constitute an Event of Default.

     

    (a) Nonpayment.  (i) Any
Borrower fails to pay any amount of principal of any Loan when the same becomes
due and payable or (ii) any Borrower fails to pay 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 Loan Party or
any Major Project Party 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 Loan Party or Major Project Party, as the case may be, 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 Loan Party obtains, or should have
obtained, knowledge thereof, and (v) 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.

     

    
      
        
        

      

      
        130

        
          

        

      

      
        
        

      

    

     

    (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(d)(i),
(ii) and (iii)(A) (Affirmative
Covenants – Construction and Completion of Project; Maintenance of
Properties), 7.01(g) (Affirmative
Covenants – Use of Proceeds and Cash Flow), 7.01(h) (Affirmative
Covenants – Insurance), 7.01(r) (Affirmative
Covenants – First Priority Ranking), 7.01 (w) (Debt
Service Reserve), 7.02 (Negative
Covenants) and 7.03(e) (Reporting
Requirements) of this Agreement,
Sections 5.02 (Limitation of
Liens) or 5.06 (Name;
Jurisdiction of Organization) of any Security Agreement, or any Borrower
or the Pledgor defaults in the due performance and observance of any of its
obligations under Sections 5.02 (Limitation of Liens), 5.03
(No Sale of
Collateral), 5.04 (No
Impairment of Security), 5.05 (Filing of Bankruptcy
Proceedings) or 5.08 (Name; Jurisdiction of
Organization) of any Pledge Agreement, or Pacific Ethanol defaults in the
due performance and observance of any of its obligations under
Section 2.04(a) (Sponsor's Deficiency Funding
Obligation), Section 3.04(a) (Sponsor's Warranty Performance
Obligations), Section 3.05(a) (Sponsor's Warranty Funding
Obligation), Section 4.01(a) (Acceleration of Senior Debt
Obligations) or Sections 5.05(b) or (c) (Accounting Matters) of the
Sponsor Support Agreement.

     

    (d) Non-Performance of Other
Covenants and Obligations.  Any Loan Party or any Major Project
Party 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; provided, that any
such default by any Major Project Party shall only constitute an Event of
Default hereunder in the event that such default occurs on or after the date of
the initial Funding Notice for the Plant to which such Project Document relates
(or in the case of any Project Document that does not relate to a specific
Plant, the date of the initial Funding Notice).

     

    (e) Project
Completion.  The Commercial Operation Date for each Plant with
respect to which any Funding has been made does not occur on or before the
Conversion Date Certain.

     

    (f) Cross
Defaults.  Any one of the following occurs with respect to any
Borrower, the Pledgor, Pacific Ethanol, or any Major Project Party with respect
to Indebtedness (other than the Obligations) (provided that if any such event
has been cured in accordance with the terms of such Indebtedness, it shall serve
as a cure of this Event of Default):

     

    
      
        	
              	
                (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

              

      

    

     

     

    
      
        
        

      

      
        131

        
          

        

      

      
        
        

      

    

     

    
      
        	
              	
                (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;
      and

              

      

    

     

    
      	
              (A)  
        

            	
              in
      the case of the Borrowers, with respect to Indebtedness in an amount
      greater than or equal to two million Dollars ($2,000,000) in the
      aggregate;

            

    

     

    
      	
              (B)   
        

            	
              in
      the case of either of the Pledgor or Kinergy, with respect to Indebtedness
      in an amount greater than or equal to two million five hundred thousand
      Dollars ($2,500,000) in the
aggregate;

            

    

     

    
      	
              (C)   
        

            	
              in
      the case of Pacific Ethanol, with respect to Indebtedness in an amount in
      excess of five million Dollars ($5,000,000) in the aggregate;
      and

            

    

     

    
      	
              (D)   
        

            	
              in
      the case of any other Major Project Party only, has or could reasonably be
      expected to result in a Material Adverse
Effect;

            

    

     

    provided, that such
occurrence shall not constitute an Event of Default with respect to any Major
Project Party if an agreement replacing each Project Document to which such
Major Project Party is a party relating to each Plant with respect to which any
Funding has been made or is being requested (and each Project Document to which
such Major Project Party is a party that does not relate to a specific Plant),
in form and substance reasonably satisfactory subject to the applicable Project
Document Approval Level, is entered into (together will all applicable Ancillary
Documents) within forty-five (45) days thereof.

     

     

    
      
        
        

      

      
        132

        
          

        

      

      
        
        

      

    

     

    (g) Judgments.  (i)
Any judgment or order that has or could reasonably be expected to have a
Material Adverse Effect is rendered against any Loan Party or any Major Project
Party, or (ii) any judgment or order is rendered against (A) any or all of the
Borrowers, in an amount in excess of two million Dollars ($2,000,000) in the
aggregate, (B) either of the Pledgor or Kinergy in an amount in excess of two
million five hundred thousand Dollars ($2,500,000) in the aggregate or (C)
Pacific Ethanol in an amount in excess of five million Dollars ($5,000,000) in
the aggregate and, in any such case, (x) enforcement proceedings are commenced
by any creditor upon such judgment or order or (y) there is a period of sixty
(60) consecutive days during which a stay of enforcement of such judgment is not
in effect; provided, that such
occurrence shall not constitute an Event of Default with respect to any Major
Project Party if an agreement replacing each Project Document to which such
Major Project Party is a party relating to each Plant with respect to which any
Funding has been made or is being requested (and each Project Document to which
such Major Project Party is a party that does not relate to a specific Plant),
in form and substance reasonably satisfactory subject to the applicable Project
Document Approval Level, is entered into (together will all applicable Ancillary
Documents) within forty-five (45) days thereof.

     

    (h) 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.

     

    (i) Bankruptcy,
Insolvency.  Any Borrower, the Pledgor, Pacific Ethanol or any
Major Project Party:

     

    
      
        	
              	
                (i) 

              	
                generally
      fails to pay, or admits in writing its inability or unwillingness to pay,
      debts as they become due;

              

      

    

     

    
      
        
        

      

      
        133

        
          

        

      

      
        
        

      

    

     

    
      
        	
              	
                (ii) 

              	
                applies
      for, consents to, or acquiesces in, the appointment of a trustee,
      receiver, sequestrator or other custodian for such Person or a substantial
      portion of its property, or makes a general assignment for the benefit of
      creditors;

              

      

    

     

    
      
        	
              	
                (iii) 

              	
                in
      the absence of such application, consent or acquiescence, permits or
      suffers to exist the appointment of a trustee, receiver, sequestrator or
      other custodian for such Person or for a substantial part of its property,
      and such trustee, receiver, sequestrator or other custodian is not
      discharged within sixty (60) days; provided that
      nothing in the Financing Documents shall prohibit or restrict any right
      any Senior Secured Party may have under applicable Law to appear in any
      court conducting any relevant proceeding during such sixty (60) day
      period to preserve, protect and defend its rights under the Financing
      Documents (and such Person shall not object to any such
      appearance);

              

      

    

     

    
      
        	
              	
                (iv) 

              	
                permit
      or suffer to exist the commencement of any bankruptcy, reorganization,
      debt arrangement or other case or proceeding under any bankruptcy or
      insolvency law, or any dissolution, winding up or liquidation proceeding,
      in respect of such Person and, if any such case or proceeding is not
      commenced by such Person, such case or proceeding is be consented to or
      acquiesced in by such Person or results in the entry of an order for
      relief or remains for sixty (60) days undismissed; provided that
      nothing in the Financing Documents shall prohibit or restrict any right
      any Senior Secured Party may have under applicable Law to appear in any
      court conducting any such case or proceeding during such sixty
      (60) day period to preserve, protect and defend its rights under the
      Financing Documents (and such Person shall not object to any such
      appearance);

              

      

    

     

    
      	
              (v)  

            	
              takes
      any action authorizing, or in furtherance of, any of the foregoing;
      or

            

    

     

    
      	
              (vi)  

            	
              becomes
      insolvent;

            

    

     

    provided, that any
such event or occurrence with respect to a Major Project Party shall only
constitute an Event of Default hereunder on or after the date of the initial
Funding Notice for any Plant with respect to which such Major Project Party is
party to a Project Document (or in the case of a Project Document that does not
relate to a specific Plant, the date of the initial Funding Notice); provided, further, that such
occurrence (A) shall only constitute an Event of Default with respect to a Major
Project Party that is not an Affiliate of any Borrower if such occurrence has
had or could reasonably be expected to have a Material Adverse Effect and (B)
shall not constitute an Event of Default with respect to any Major Project Party
if an agreement replacing each Project Document to which such Major Project
Party is a party relating to each Plant with respect to which any Funding has
been made or is being requested (and each Project Document to which such Major
Project Party is a party that does not relate to a specific Plant), in form and
substance reasonably satisfactory subject to the applicable Project Document
Approval Level, is entered into (together will all applicable Ancillary
Documents) within forty-five (45) days thereof (or, if such bankruptcy or
insolvency could not reasonably be expected to result in a Material Adverse
Effect, sixty (60) days).

     

    
      
        
        

      

      
        134

        
          

        

      

      
        
        

      

    

     

    (j) 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 a
      Project Document relating exclusively to a Plant with respect to which no
      Funding has been made or is being requested) and such breach or default
      has continued beyond any applicable grace period expressly provided for in
      such Project Document (or, if no such cure period is provided, thirty
      (30) days), as the same may be extended pursuant to any Consent
      (which, in the case of any Major Project Party that is not an Affiliate of
      any Borrower (other than, prior to the Commercial Operation Date for the
      applicable Plant, any Construction Contractor) has had or could reasonably
      be expected to have a Material Adverse Effect with respect to such Plant
      or such Borrower); provided, that
      any such breach or default by any Major Project Party under any Project
      Document shall not constitute an Event of Default if an agreement
      replacing such Project Document, in form and substance reasonably
      satisfactory subject to the applicable Project Document Approval Level, is
      entered into (together will all applicable Ancillary Documents) within
      forty-five (45) days thereof (or, if such breach or default could not
      reasonably be expected to result in a Material Adverse Effect, sixty (60)
      days); provided, further, that
      if such material breach or material default on the part of such Major
      Project Party relates to the performance of Warranty Work that is being
      performed by Pacific Ethanol, or to a Project Completion Deficiency that
      is being funded by Pacific Ethanol, in either such case in accordance with
      the Sponsor Support Agreement, then such breach or default shall be deemed
      to be cured.

              

      

    

     

    
      
        	
              	
                (ii) 

              	
                Any
      Project Document (other than a Project Document relating exclusively to a
      Plant with respect to which no Funding has been made or is being
      requested) 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 Major Project Party
      thereto (which, in the case of any Major Project Party that is not an
      Affiliate of any Borrower (other than, prior to the Commercial Operation
      Date for the applicable Plant, any Construction Contractor) has had or
      could reasonably be expected to have a Material Adverse Effect with
      respect to such Plant or such Borrower); provided, that
      such occurrence shall not constitute an Event of Default with respect to
      any Project Document if an agreement replacing such Project Document, in
      form and substance reasonably satisfactory subject to the applicable
      Project Document Approval Level, is entered into (together will all
      applicable Ancillary Documents) within forty-five (45) days thereof
      (or, if such occurrence could not reasonably be expected to result in a
      Material Adverse Effect, sixty (60)
days).

              

      

    

     

    (k) 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.

     

    (l) 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;

              

      

    

     

    
      
        
        

      

      
        135

        
          

        

      

      
        
        

      

    

     

    
      
        	
              	
                (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;
  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 Loan Party, or any of the
      Security Documents ceases to provide the security intended to be created
      thereby with the priority purported to be created
  thereby.

              

      

    

     

    (m) Environmental
Matters.  This Section 9.01(m)
shall not apply to matters or occurrences related exclusively to a Plant with
respect to which no Funding has been made or is being requested.  (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 five hundred thousand Dollars
($500,000) for any single claim or one million Dollars ($1,000,000) for all such
claims during any twelve (12) month period or could otherwise reasonably be
expected to result in a Material Adverse Effect; provided that such
occurrence shall not constitute an Event of Default if (A) the estimated
liability associated therewith is reasonably expected to be less than five
million Dollars ($5,000,000) (net of any Insurance Proceeds that have actually
been paid to, and received by, the Borrowers or the Collateral Agent as loss
payee in connection therewith, or as reduced by taking into account any amounts
that the Borrowers demonstrate, to the reasonable satisfaction of the
Administrative Agent, within ten (10) Business Days following such occurrence,
will be available as and when needed, without conditions, from sources
(including Insurance Proceeds and documented voluntary equity contributions made
to the Borrowers for the purpose of covering such costs) other than Cash Flow or
Loan proceeds, to cover such costs) (and such occurrence could not otherwise
reasonably be expected to result in a Material Adverse Effect) and within ninety
(90) days of such occurrence, such liability is reduced below the threshold set
forth above this proviso from sources other than Cash Flow or Loan proceeds, (B)
there have been no more than two (2) occurrences of the nature described in this
Section 9.01(m)
during the immediately preceding twelve (12) month period and (C) during such
cure period, the Borrowers undertake any remedial or responsive actions then
required to be undertaken under applicable Law.

     

    (n) 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 (i) in accordance with Section 8.14(d)(i)
(Insurance
and Condemnation Proceeds Accounts), or
(ii) otherwise (provided that such approval is obtained within sixty (60)
days hereafter) with the approval of the Required Lenders, in consultation with
the Independent Engineer.

     

    
      
        
        

      

      
        136

        
          

        

      

      
        
        

      

    

     

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

     

    (p) Taking or Total
Loss.  An Event of Taking with respect to all or a material
portion of any Plant or any Equity Interests in any Borrower occurs, or an Event
of Total Loss occurs.

     

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

     

    Section
9.02 Action Upon
Bankruptcy.  If any Event of Default described in Section 9.01(i)
(Events
of Default - Bankruptcy; Insolvency) occurs with respect
to any Borrower, any outstanding Construction Loan Commitments, Term Loan
Commitments or Working Capital Loan Commitments (if not theretofore terminated)
shall automatically terminate, and any amounts on deposit in or standing to the
credit of the Escrow Account shall be released and reimbursed to the
Tranche B Lenders.  The outstanding principal amount of the
outstanding Loans and all other Obligations shall automatically be and become
immediately due and payable, without notice, demand or further act of the
Administrative Agent, the Collateral Agent or any other Senior Secured
Party.

     

    Section
9.03 Action Upon Other Event of
Default.  (a)  If any other Event of Default occurs
and is continuing for any reason, whether voluntary or involuntary, and is
continuing, the Administrative Agent may, or upon the direction of the Required
Lenders shall, by written notice to the Borrowers declare all or any portion of
the outstanding principal amount of the Loans and other Obligations to be due
and payable and/or any outstanding Construction Loan Commitments, Term Loan
Commitments or Working Capital Loan Commitments (if not theretofore terminated)
to be terminated, whereupon the full unpaid amount of such Loans and other
Obligations that has been declared due and payable shall be and become
immediately due and payable, without further notice, demand or presentment
and/or, as the case may be, any outstanding Construction Loan Commitments, Term
Loan Commitments or Working Capital Loan Commitments shall terminate, and any
amounts on deposit in or standing to the credit of the Escrow Account shall be
released and reimbursed to the Tranche B Lenders.  During the
continuance of an Event of Default, the Administrative Agent may, or upon the
direction of the Required Lenders shall, instruct the Collateral Agent to
exercise any or all remedies provided for under this Agreement or the other
Financing Documents.

     

    (b) Any
declaration made pursuant to Section 9.03(a)
may, should the Required Lenders in their sole and absolute discretion so elect,
be rescinded by written notice to the Borrowers at any time after the principal
of the Loans has become due and payable, but before any judgment or decree for
the payment of the monies so due, or any part thereof, has been entered; provided that no such
rescission or annulment shall extend to or affect any subsequent Event of
Default or impair any right consequent thereon.

     

    
      
        
        

      

      
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    Section
9.04 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 as Collateral and/or, at the direction of the
Administrative Agent, may be applied in full or in part by the Collateral Agent
against the Obligations in the following order of priority (but without
prejudice to the right of the Collateral Agent to recover any shortfall from the
Borrower):

     

    (a) first, to payment of
that portion of the Obligations constituting fees, costs, expenses (and interest
owing thereon (if any)) and any other amounts (including fees, costs and
expenses of counsel and amounts payable under Article IV
(Eurodollar
Rate and Tax Provisions)) payable to the
Agents in their capacities as such ratably among them in proportion to the
amounts described in this clause first;

     

    (b) second, to payment of
that portion of the Obligations constituting fees, costs, expenses (and interest
owing thereon (if any)) and any other amounts (including fees, costs and
expenses of counsel and amounts payable under Article IV
(Eurodollar
Rate and Tax Provisions)) but excluding
principal of and accrued interest on the Loans or any Interest Rate Protection
Agreement payable to the Lenders and the Interest Rate Protection Providers,
ratably among the Lenders and the Interest Rate Protection Providers in
proportion to the amounts described in this clause second payable to
them;

     

    (c) third, to payment of
the portion of the Obligations constituting accrued and unpaid interest
(including default interest) with respect to the Loans and Interest Rate
Protection Agreement (other than any payments of Swap Termination Value),
ratably among the Lenders and the Interest Rate Protection Providers in
proportion to the respective amounts described in this clause third payable to
them;

     

    (d) fourth, to the
principal amount of the Loans and any Primary Swap Obligations payable by the
Borrower to the Lenders and Interest Rate Protection Providers, ratably among
the Lenders and the Interest Rate Protection Providers in proportion to the
respective amounts described in this clause fourth held by them;
and

     

    (e) last, the balance, if
any, after all of the Obligations have been indefeasibly paid in full, to the
Borrowers or as otherwise required by Applicable Law.

     

    
      
        
        

      

      
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    ARTICLE
X

     

    THE
AGENTS

     

    Section
10.01 Appointment and
Authority.  (a) Each of the Lenders (in its capacity as
Lender and on behalf of itself and its Affiliates as a potential Interest Rate
Protection Provider) 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 (in its capacity as Lender and on behalf of itself and its Affiliates as
a potential Interest Rate Protection Provider) 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 Senior Secured Parties 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 of the Borrowers or the Pledgor 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) granted
under the Security Documents, 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 or
Interest Rate Protection Provider.  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 or Interest Rate Protection Provider, as
the case may be, as any other Lender or Interest Rate Protection Provider, as
the case may be, 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, any other Agent or the Interest Rate Protection
Provider.

     

    Section
10.03 Exculpatory
Provisions.  (a) 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 created
or purported to be created by any Security Document, 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 the Borrowers), 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.  (a)  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.  The Accounts Bank may be removed by the
Administrative Agent within six (6) months of the date hereof if the Accounts
Bank is not also a Lender under this Agreement (provided, that any successor
Accounts Bank appointed following a removal of the Accounts Bank pursuant to
this sentence shall be appointed by the Administrative Agent in consultation
with the Borrowers' Agent (so long as no Default or Event of Default has
occurred and is continuing)).  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 by the Required Lenders 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, and provided that no
Default or Event of Default has occurred and is continuing, the Borrowers may
appoint a replacement Agent (who shall be a commercial bank having a combined
capital and surplus of at least two hundred fifty million Dollars
($250,000,000)) within the immediately succeeding fifteen (15)
days.

     

    (d) If no
successor Agent has been appointed within forty-five (45) days (or, if a Default
or Event of Default has occurred and is continuing, 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.

     

    (e) 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.

     

    (f) 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.

     

    (g) 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 No Lead Arranger,
Syndication Agent, Bookrunner Duties.  Anything herein to the
contrary notwithstanding, no Lead Arranger, Syndication Agent or Sole Lead
Bookrunner shall have any powers, duties or responsibilities under this
Agreement or any of the other Financing Documents, except in its capacity, as
applicable, as an Agent or a Lender hereunder.

     

    Section
10.10 Collateral Agent
May File Proofs of Claim.  (a) In case of the
pendency of any bankruptcy or insolvency proceeding relative to any Borrower or
the Pledgor (including any event described in Section 9.01(i)
(Events
of Default - Bankruptcy; Insolvency), 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 3.13
      (Fees), 11.07 (Costs
      and Expenses) and 11.09 (Indemnification
      by the Borrowers)) allowed in
      such judicial proceeding;

              

      

    

     

    
      
        	
              	
                (ii) 

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

              

      

    

     

    
      
        	
              	
                (iii) 

              	
                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 3.13
      (Fees), 11.07 (Costs
      and Expenses) and 11.09 (Indemnification
      by the Borrowers).

              

      

    

     

    
      
        
        

      

      
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    (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.

     

    Section
10.11 Collateral
Matters.  (a)  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) and 7.04 (Release
of Borrowers)).

     

    (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 10.11.  In
each case as specified in this Section 10.11,
the Collateral Agent will, at the Borrowers' expense, execute and deliver to the
applicable Borrower or the Pledgor, as the case may be, such documents as such
Person may reasonably request to evidence the release of such item of Collateral
from the assignment and security interest granted under the Security Documents
in accordance with the terms of the Financing Documents and this Section 10.11.

     

    Section
10.12 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 (other than instructions
for the transfer of funds from Project Accounts pursuant to Article VIII (Project
Accounts) or if otherwise
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.

     

    
      
        
        

      

      
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    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, Borrowers' Agent or any other Loan Party 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, Borrowers' Agent or, as the case may be, the applicable Loan Party,
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) extend or
increase the Commitment of any Lender (or reinstate any Commitment terminated
pursuant to Section 9.03(a)
(Action
Upon Other Event of Default) without the prior written consent of such
Lender (other than any Non-Voting Lender);

     

    (b) postpone
any date scheduled for any payment of principal or interest under Section 3.01
(Repayment
of Construction Loan Fundings), 3.02 (Repayment
of Term Loan Fundings),3.03 (Repayment
of Working Capital Loan Fundings) or 3.04 (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);

     

    (c) reduce
the principal of, or the rate of interest specified herein on, any Loan, or any
Fees or other amounts (including the Required Cash Sweep or any other mandatory
prepayments under Section 3.10
(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;

     

    (d) 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 2.08
(Termination
or Reduction of Commitment), Section 3.09
(Optional
Prepayment) or 3.10 (Mandatory
Prepayment), respectively, in any manner without the prior written
consent of each Lender affected thereby (other than any Non-Voting
Lender);

     

    (e) 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

     

    
      
        
        

      

      
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    (f) other
than in accordance with Section 7.04 (Release
of Borrower), 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 Borrowers' 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; (iii) to make, complete or confirm any grant
of Collateral permitted or required by this Agreement or any of the Security
Documents or any release of any Collateral that is otherwise permitted under the
terms of this Agreement and the Security Documents; or (iv) to update the
Schedules in connection with the initial Funding for each Plant.

     

    Section
11.02 Applicable Law;
Jurisdiction; Etc.  (a) GOVERNING
LAW.  THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK, UNITED STATES OF AMERICA,
WITHOUT REFERENCE TO CONFLICTS OF LAWS (OTHER THAN SECTION 5-1401 OF THE NEW
YORK GENERAL OBLIGATIONS LAW).

     

    (b) SUBMISSION TO
JURISDICTION.  EACH BORROWER AND THE BORROWERS' AGENT
IRREVOCABLY AND UNCONDITIONALLY SUBMITS, FOR ITSELF AND ITS PROPERTY, TO THE
NON-EXCLUSIVE JURISDICTION OF THE COURTS OF THE STATE OF NEW YORK SITTING IN NEW
YORK COUNTY AND OF THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF
NEW YORK, AND ANY APPELLATE COURT FROM ANY THEREOF, IN ANY ACTION OR PROCEEDING
ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY OTHER FINANCING DOCUMENT, OR
FOR RECOGNITION OR ENFORCEMENT OF ANY JUDGMENT, AND EACH OF THE PARTIES HERETO
IRREVOCABLY AND UNCONDITIONALLY AGREES THAT ALL CLAIMS IN RESPECT OF ANY SUCH
ACTION OR PROCEEDING MAY BE HEARD AND DETERMINED IN SUCH NEW YORK STATE COURT
OR, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, IN SUCH FEDERAL
COURT.  EACH OF THE PARTIES HERETO AGREES THAT A FINAL JUDGMENT IN ANY
SUCH ACTION OR PROCEEDING SHALL BE CONCLUSIVE AND MAY BE ENFORCED IN OTHER
JURISDICTIONS BY SUIT ON THE JUDGMENT OR IN ANY OTHER MANNER PROVIDED BY
LAW.  NOTHING IN THIS AGREEMENT OR IN ANY OTHER FINANCING DOCUMENT
SHALL AFFECT ANY RIGHT THAT ANY SENIOR SECURED PARTY MAY OTHERWISE HAVE TO BRING
ANY ACTION OR PROCEEDING RELATING TO THIS AGREEMENT OR ANY OTHER FINANCING
DOCUMENT AGAINST ANY BORROWER OR ITS PROPERTIES IN THE COURTS OF ANY
JURISDICTION.

     

    
      
        
        

      

      
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    (c) WAIVER OF
VENUE.  EACH BORROWER AND THE BORROWERS' 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.

     

    (d) Appointment of Process Agent
and Service of Process.  Each of the Borrowers and the
Borrowers' Agent hereby irrevocably appoints CT Corporation System with an
office on the date hereof at 111 Eighth Avenue, New York, New York 10011, as its
agent to receive on behalf of itself services of copies of the summons and
complaint and any other process that may be served in any such action or
proceeding in the State of New York.  If for any reason the Process
Agent shall cease to act as such for any Person, such Person hereby agrees to
designate a new agent in New York City on the terms and for the purposes of this
Section 11.02
reasonably satisfactory to the Administrative Agent.  Such service may
be made by mailing or delivering a copy of such process to such Person in care
of the Process Agent at the Process Agent's above address, and each of the
Borrowers and the Borrowers' Agent hereby irrevocably authorizes and directs the
Process Agent to accept such service on its behalf.  As an alternative
method of service, each of the Borrowers and the Borrowers' Agent also
irrevocably consents to the service of any and all process in any such action or
proceeding by the air mailing of copies of such process to such Person at its
then effective notice addresses pursuant to Section 11.12
(Notices
and Other Communications).  Nothing
in this Agreement shall affect any right that any party may otherwise have to
bring any action or proceeding relating to this Agreement or any other Financing
Document in the courts of any jurisdiction.

     

    (e) Immunity.  To
the extent that any Borrower or the Borrowers' 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 of the Borrowers and the Borrowers' 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.

     

    
      
        
        

      

      
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    Section
11.03 Assignments.  (a) 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 Borrowers' 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.

     

    (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 three million Dollars ($3,000,000) and in integral
multiples of one million Dollars ($1,000,000) in excess thereof, 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 Borrowers'
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).

     

    
      
        
        

      

      
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    (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.

     

    (d) Any
Lender may at any time, without the consent of, or notice to, the Borrowers, the
Borrowers' 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
Borrowers' 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 3.15
(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 Borrowers'
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.

     

    
      
        
        

      

      
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    (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.

     

    (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 3.15
(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.

     

    
      
        
        

      

      
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    (i) Following
the occurrence of a Successful Syndication, the Borrowers will be permitted,
with the approval of the Administrative Agent and the Issuing Bank, to replace
(with one or more replacement Lenders) any Lender that (x) fails to approve
a Substitute Facility upon the Borrowers' written request for such approval,
(y) provides notice under Section 4.01(a)
(Eurodollar
Rate Lending Unlawful) that it is unable
to make, maintain or fund any Loan as a Eurodollar Loan or requests
reimbursement for, or is otherwise entitled to, amounts owing pursuant to Section 4.03 (Increased
Eurodollar Loan Costs), Section 4.06 (Increased
Capital Costs) or Section 4.07(c)
(Taxes-Indemnification by Borrowers) or (z) fails to approve any
request for a consent or waiver requested of the Lenders in writing by the
Borrowers; provided, that
(i) such replacement does not conflict with any Law or any determination of
an arbitrator or a court or other Governmental Authority, in each case
applicable to any Borrower or such Lender or to which any Borrower or such
Lender or any of their respective property is subject, (ii) no Default or
Event of Default shall have occurred and be continuing at the time of such
replacement, (iii) the replacement Lender shall purchase, at par, the Loans
and all other amounts owing to such replaced Lender prior to the date of
replacement, (iv) the Borrowers shall be liable to such replaced Lender
under Section 4.05
(Funding
Losses)
if any Eurodollar Loan owing to such replaced Lender is be prepaid (or
purchased) other than on the last day of the Interest Period relating thereto,
(v) until such time as such replacement is consummated, the Borrowers shall
pay all additional amounts (if any) required pursuant to Section 4.03 (Increased
Eurodollar Loan Costs), Section 4.06 (Increased
Capital Costs) or Section 4.07(c) (Taxes-Indemnification
by Borrowers), as the case may be, (vi)the replacement Lender is an
Eligible Assignee, (vii) such replacement is made in accordance with the
provisions of Section 11.03(b)
(provided, that
the Borrower shall be obligated to pay the registration and processing fee),
(viii) any such replacement shall not be deemed to be a waiver of any
rights that the Borrower, any Agent or any other Lender may have against the
replaced Lender, and (ix) prior to any such replacement, (A) in the
case of any replacement of a Lender that fails to approve a Substitute Facility,
the Lender to be replaced shall have delivered a written notice indicating that
it will not approve such request for a Substitute Facility, (B) in the case
of any replacement of a Lender that has claimed increased costs, the Lender to
be replaced shall not have delivered a notice to the Borrowers under Section 4.01(b)
(Eurodollar
Rate Lending Unlawful) that it is no
longer unable to make, maintain or fund any Loan as a Eurodollar Loan and shall
have taken no action under Section 4.04 (Obligation
To Mitigate) so as to eliminate
the need for payment of amounts owing pursuant to Section 4.03 (Increased
Eurodollar Loan Costs), Section 4.06 (Increased
Capital Costs) or Section 4.07(c) (Taxes-Indemnification
by Borrowers), as the case may be or (C) in the case of any
replacement of a Lender that fails to provide a consent or waiver requested by
the Borrowers, the Lender to be replaced shall have delivered a written notice
indicating that it will not grant such request.

     

    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.

     

    
      
        
        

      

      
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    Section
11.05 Borrowers'
Agent.  Each Borrower hereby appoints and authorizes Pacific
Holding, and Pacific Holding hereby accepts such appointment, as such Borrower's
Borrowers' 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 Borrowers'
Agent.  Each Borrower hereby acknowledges and agrees that it will be
bound by any action or inaction taken by the Borrowers' Agent as if such action
or inaction had been taken by such Borrower.

     

    Section
11.06 Consultants.  (a) 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 Borrowers' 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 Lead Arrangers and the Agents
(including all reasonable fees, costs and expenses of counsel for any Agent), in
connection with 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); (b) all
reasonable and documented out-of-pocket expenses incurred by the Agents
(including all reasonable fees, costs and expenses of counsel for any Agent), in
connection with any amendments, modifications or waivers of the provisions of
this Agreement and the other Financing Documents (whether or not the
transactions contemplated hereby or thereby are consummated); (c) all
reasonable and documented out-of-pocket expenses incurred by the Agents
(including all reasonable fees, costs and expenses of counsel for any Agent), in
connection with the administration of this Agreement and the other Financing
Documents (whether or not the transactions contemplated hereby or thereby are
consummated); and (d) 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.

     

    
      
        
        

      

      
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    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.

     

    Section
11.09 Indemnification by the
Borrowers.  (a) 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 such Borrower's 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 the Borrowers, 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.

     

    
      
        
        

      

      
        154

        
          

        

      

      
        
        

      

    

     

    (b) To the
extent that any of the Borrowers 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 2.06(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.

     

    Section
11.12 Notices and Other
Communications.  (a)  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 the Borrowers, the Borrowers' Agent or any Agent, to the address,
      telecopier number, electronic mail address or telephone number specified
      for such Person on Schedule
      11.12;

                

        

      

    

     

    
      
        
        

      

      
        155

        
          

        

      

      
        
        

      

    

     

    
      
        	
              	
                (ii) 

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

              

      

    

     

    
      
        	
              	
                (iii) 

              	
                if
      to any Interest Rate Protection Provider, to the address, telecopier,
      number, electronic mail address or telephone number specified on Schedule 11.12.

              

      

    

     

    (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 Borrowers' Agent shall be deemed to have been given to all
Borrowers.

     

    (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 the Borrowers 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 of
the Borrowers, the Borrowers' 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 and Interest Rate
Protection Provider may change its address, telecopier or telephone number for
notices and other communications hereunder by notice to the Borrowers, the
Borrowers' Agent and each Agent.

     

    
      
        
        

      

      
        156

        
          

        

      

      
        
        

      

    

     

    (f) The
Senior Secured Parties shall be entitled to rely and act upon any written
notices purportedly given by or on behalf of the Borrowers or the Borrowers'
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.  The Borrowers 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 the Borrowers or the
Borrowers' Agent (or any one of the Borrowers).  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 Borrowers' 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 Agreements, 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 Borrowers'
Agent agrees to continue to provide the Communications to the Administrative
Agent in the manner specified in the Financing Agreements but only to the extent
requested by the Administrative Agent.

     

    (h) So long
as WestLB is the Administrative Agent, each Borrower and the Borrowers' 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").

     

    
      
        
        

      

      
        157

        
          

        

      

      
        
        

      

    

     

    (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 BORROWERS' 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 BORROWERS' AGENTS' 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.

     

    (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 Agreements.  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
Agreements.  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.

     

    
      
        
        

      

      
        158

        
          

        

      

      
        
        

      

    

     

    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 Payments Set
Aside.  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.

     

    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 the Borrowers 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 Borrowers' 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.

     

    
      
        
        

      

      
        159

        
          

        

      

      
        
        

      

    

     

    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.

     

    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 obligations of the Borrowers 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 the Borrowers;
(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 the Borrowers 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 the Borrowers 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.

     

    
      
        
        

      

      
        160

        
          

        

      

      
        
        

      

    

     

    Section
11.19 Waiver of Consequential
Damages, Etc.  Except as otherwise provided in Section 11.09 (Indemnification by 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 against any Indemnitee, 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 Borrowers'
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.

     

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

     

     

    
      
        
        

      

      
        161

        
          

        

      

      
        
        

      

    

     

    IN
WITNESS WHEREOF, the parties hereto have caused this 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/ JEFFREY
      MANTERNACH           
      

            
	 	
              Name:
      Jeffrey Manternach

            
	 	
              Title:  Vice
      President Finance

            
	 	 
	 	 
	 	PACIFIC ETHANOL MADERA
      LLC,
	 	as
      Borrower 
	 	 
	 	
              By:  /s/ JEFFREY
      MANTERNACH            

            
	 	
              Name:
      Jeffrey Manternach  

            
	 	
              Title:  Vice
      President Finance  

            
	 	 
	 	 
	 	PACIFIC ETHANOL COLUMBIA,
      LLC,
	 	as
      Borrower 
	 	 
	 	
              By:  /s/ JEFFREY
      MANTERNACH              

            
	 	
              Name:
      Jeffrey Manternach   

            
	 	
              Title:  Vice
      President Finance   

            
	 	 
	 	 
	 	PACIFIC ETHANOL STOCKTON,
      LLC,
	 	as
      Borrower 
	 	 
	 	
              By:  /s/ JEFFREY
      MANTERNACH               

            
	 	
              Name:
      Jeffrey Manternach    

            
	 	
              Title:  Vice
      President Finance    

            
	 	 
	 	 
	 	PACIFIC ETHANOL IMPERIAL,
      LLC,
	 	as
      Borrower 
	 	 
	 	By:  /s/ JEFFREY
      MANTERNACH            
	 	
              Name:
      Jeffrey Manternach     

            
	 	Title:  Vice
      President Finance 

       

      
        
          
          

        

        
          162

          
            

          

        

        
          
          

        

      

       

      
        	 	PACIFIC ETHANOL MAGIC VALLEY,
      LLC,
	 	as
      Borrower 
	 	 
	 	By:  /s/ JEFFREY
      MANTERNACH            
	 	
                Name:
      Jeffrey Manternach      

              
	 	Title:  Vice
      President Finance  
	 	 
	 	 
	 	
                PACIFIC
      ETHANOL HOLDING CO. LLC,

              
	 	as
      Borrowers' Agent
	 	 
	 	By:  /s/ JEFFREY
      MANTERNACH              
	 	
                Name:
      Jeffrey
    Manternach       

              
	 	Title:  Vice
      President Finance   

         

        
          
            
            

          

          
            163

            
              

            

          

          
            
            

          

        

         

        
          	 	WESTLB AG, NEW YORK
      BRANCH,
	 	as
      Lead Arranger and Sole Bookrunner 
	 	 
	 	
                  By:  /s/ PAUL
      VASTOLA                        
      

                
	 	
                  Name:  Paul
      Vastola

                
	 	
                  Title:    Director

                
	 	 
	 	 
	 	
                  By: 
       /s/ JAMES
      R.
      ANDERSON             
      

                
	 	
                  Name:  James
      R. Anderson

                
	 	
                  Title:   Associate
      Director

                
	 	 
	 	 
	 	WESTLB AG, NEW YORK
      BRANCH, 
	 	as
      Administrative Agent 
	 	 
	 	
                  By:  /s/ PAUL
      VASTOLA                           

                
	 	
                  Name:  Paul
      Vastola

                
	 	
                  Title:    Director  

                
	 	 
	 	 
	 	
                  By: 
       /s/ JAMES
      R.
      ANDERSON                

                
	 	
                  Name:  James
      R. Anderson

                
	 	
                  Title:   Associate
      Director  

                

        

      

    

     

     

    
      
        
        

      

      
        164

        
          

        

      

      
        
        

      

    

     

    
       

      
        
          	 	WESTLB AG, NEW YORK
      BRANCH,
	 	as
      Lender
	 	 
	 	
                  By:  /s/ PAUL
      VASTOLA                        
      

                
	 	
                  Name:  Paul
      Vastola

                
	 	
                  Title:    Director

                
	 	 
	 	 
	 	
                  By: 
       /s/ JAMES
      R.
      ANDERSON             
      

                
	 	
                  Name:  James
      R. Anderson

                
	 	
                  Title:   Associate
      Director

                
	 	 
	 	 
	 	WESTLB AG, NEW YORK
      BRANCH,
	 	as
      Collateral Agent
	 	 
	 	
                  By:  /s/ PAUL
      VASTOLA                           

                
	 	
                  Name:  Paul
      Vastola

                
	 	
                  Title:    Director  

                
	 	 
	 	 
	 	
                  By: 
       /s/ JAMES
      R.
      ANDERSON                

                
	 	
                  Name:  James
      R. Anderson

                
	 	
                  Title:   Associate
      Director  

                

        

         

        
          
            
            

          

          
            165

            
              

            

          

          
            
            

          

        

         

        
          	 	
                  MIZUHO
      CORPORATE BANK, LTD.,

                
	 	
                  as
      Lead Arranger and Co-Syndication Agent

                
	 	 
	 	
                  By:  /s/ AKIRA
      TAZUKA                      
      

                
	 	
                  Name:  Akira
      Tazuka

                
	 	
                  Title:  General
      Manager

                
	 	 
	 	 
	 	MIZUHO CORPORATE BANK,
      LTD.,
	 	as
      Lender 
	 	 
	 	
                  By:  /s/ AKIRA
      TAZUKA                         

                
	 	
                  Name:  Akira
      Tazuka  

                
	 	
                  Title:  General
      Manager  

                

           

           

           

          
            
              
              

            

            
              166

              
                

              

            

            
              
              

            

          

           

          
            	 	CIT CAPITAL SECURITIES
      LLC,
	 	as
      Lead Arranger and Co-Syndication Agent 
	 	 
	 	
                    By:
       /s/ ROBERT
      W.
      SEXTON                      
      

                  
	 	
                    Name:  Robert
      W. Sexton

                  
	 	
                    Title:  SVP

                  
	 	 
	 	 
	 	CIT CAPITAL USA
      INC.,
	 	as
      Lender 
	 	 
	 	
                    By:
       /s/ ROBERT
      W.
      SEXTON                         

                  
	 	
                    Name:  Robert
      W. Sexton  

                  
	 	
                    Title:  Managing
      Director

                  

             

             

             

            
              
                
                

              

              
                167

                
                  

                

              

              
                
                

              

            

             

            
              
                	 	
                        COÖPERATIEVE CENTRALE
      RAIFFEISEN-

                        BOERENLEENBANK B.A.,
      "RABOBANK

                        NEDERLAND", NEW YORK
      BRANCH,

                      
	 	as
      Lead Arranger and Co-Documentation Agent 
	 	 
	 	
                        By:  /s/ JEFF
      BLISS                              
      

                      
	 	
                        Name:  Jeff
      Bliss

                      
	 	
                        Title:  Vice
      President

                      
	 	 
	 	 
	 	
                        By:   /s/ NICK
      BAIKIE                          
      

                      
	 	
                        Name:  Nick
      Baikie

                      
	 	
                        Title:  Attorney-in-fact

                      
	 	 
	 	 
	 	
                        COÖPERATIEVE CENTRALE
      RAIFFEISEN-

                        BOERENLEENBANK B.A., "RABOBANK
      

                        NEDERLAND", NEW YORK
      BRANCH,

                      
	 	as
      Lender 
	 	 
	 	
                        By:  /s/ JEFF
      BLISS                                 

                      
	 	
                        Name:  Jeff
      Bliss  

                      
	 	
                        Title:  Vice
      President  

                      
	 	 
	 	 
	 	
                        By:   /s/ NICK
      BAIKIE                             

                      
	 	
                        Name:  Nick
      Baikie  

                      
	 	
                        Title:  Attorney-in-fact  

                      

              

               

               

              
                
                  
                  

                

                
                  168

                  
                    

                  

                

                
                  
                  

                

              

               

              
                
                  	 	
                          BANCO SANTANDER CENTRAL HISPANO
      S.A, 

                          NEW YORK
      BRANCH,

                        
	 	as
      Lead Arranger and Co-Documentation Agent 
	 	 
	 	
                          By:  /s/ J. RUBEN
      PEREZ-ROMO                          
      

                        
	 	
                          Name:  J.
      Ruben Perez-Romo

                        
	 	
                          Title:  
      Vice President

                        
	 	Global Corporate
      Banking 
	 	 
	 	 
	 	
                          By:  /s/ JOSE
      CASTELLO                                       
      

                        
	 	
                          Name:  Jose
      Castello

                        
	 	
                          Title:  
      Managing Director

                        
	 	
                          Head
      of U.S. Global Corporate Banking

                        
	 	 
	 	 
	 	
                          BANCO SANTANDER CENTRAL HISPANO
      S.A, 

                          NEW YORK
      BRANCH,

                        
	 	as
      Lender 
	 	 
	 	
                          By:  /s/ J. RUBEN
      PEREZ-ROMO                             

                        
	 	
                          Name:  J.
      Ruben Perez-Romo  

                        
	 	
                          Title:  
      Vice President  

                        
	 	Global Corporate
      Banking  
	 	 
	 	 
	 	
                          By:  /s/ JOSE
      CASTELLO                                          

                        
	 	
                          Name:  Jose
      Castello  

                        
	 	
                          Title:  
      Managing Director  

                        
	 	
                          Head
      of U.S. Global Corporate
Banking  

                        

                

                 

                 

                
                  
                    
                    

                  

                  
                    169

                    
                      

                    

                  

                  
                    
                    

                  

                

                 

                
                  	 	UNION BANK OF CALIFORNIA,
      N.A.,
	 	as
      Accounts Bank 
	 	 
	 	
                          By: /s/ JESUS
      SERRANO                             
      

                        
	 	
                          Name:  Jesus
      Serrano

                        
	 	
                          Title:  VP

                        

                   

                   

                   

                   

                  
                    
                      
                      

                    

                    
                      170

                      
                        

                      

                    

                    
                      
                      

                    

                  

                   

                  
                    	 	
                            NORTHWEST FARM CREDIT SERVICE,
      FLCA,

                          
	 	
                            as
      Lender

                          
	 	 
	 	
                            By:  /s/ CASEY
      KINSER                                   
      

                          
	 	
                            Name:  Casey
      Kinser

                          
	 	
                            Title:  Account
      Manager

                          

                     

                     

                     

                     

                     

                     

                     

                    
                      
                        
                        

                      

                      
                        171

                        
                          

                        

                      

                      
                        
                        

                      

                    

                     

                    
                      
                        	 	
                                NORDKAP
      BANK AG,

                              
	 	
                                as
      Lender

                              
	 	 
	 	
                                By:  /s/ J.
      OGRIG                                   
      

                              
	 	
                                Name:  J.
      Ogrig

                              
	 	
                                Title:

                              
	 	 
	 	 
	 	
                                By:  /s/ B.
      GADOLA                              
      

                              
	 	
                                Name:  B.
      Gadola

                              
	 	
                                Title:

                              

                      

                       

                       

                       

                       

                       

                       

                      
                        
                          
                          

                        

                        
                          172

                          
                            

                          

                        

                        
                          
                          

                        

                      

                       

                      
                        	 	
                                GREENSTONE FARM CREDIT
      SERVICES,

                                ACA/FLCA,

                              
	 	as
      Lender 
	 	 
	 	
                                By:  /s/ BEN
      MAHLICH                         
      

                              
	 	
                                Name:  Ben
      Mahlich

                              
	 	
                                Title:  Assistant
      Vice President/Lending Officer

                              

                         

                         

                         

                         

                         

                         

                         

                         

                         

                        
                          
                            
                            

                          

                          
                            173

                            
                              

                            

                          

                          
                            
                            

                          

                        

                         

                        
                          	 	
                                  SHOREBANK
      PACIFIC,

                                
	 	
                                  as
      Lender

                                
	 	 
	 	
                                  By:  /s/ RANDELL
      LEACH                          
      

                                
	 	
                                  Name:  Randell
      Leach

                                
	 	
                                  Title:  Chief
      Credit Officer

                                

                           

                           

                           

                           

                           

                           

                           

                           

                           

                          
                            
                              
                              

                            

                            
                              174

                              
                                

                              

                            

                            
                              
                              

                            

                          

                           

                          
                            	 	
                                    NORDDEUTSCHE
      LANDESBANK 

                                    GIROZENTRALE
      NEW YORK BRANCH,

                                  
	 	
                                    as
      Lender

                                  
	 	 
	 	
                                    By:  /s/ BRUNO
      MEJEAN                                    
      

                                  
	 	
                                    Name:  Bruno
      Mejean

                                  
	 	
                                    Title:  Senior
      Vice President

                                  
	 	 
	 	 
	 	
                                    By:  /s/ MARCO
      BURMESTER                           
      

                                  
	 	
                                    Name:  Marco
      Burmester

                                  
	 	
                                    Title:  Analyst

                                  

                             

                            
                              
                                
                                

                              

                              
                                175

                                
                                  

                                

                              

                              
                                
                                

                              

                            

                             

                             

                            
                              	 	
                                      METROPOLITAN
      LIFE INSURANCE COMPANY,

                                    
	 	
                                      as
      Lender

                                    
	 	 
	 	
                                      By:  /s/ JUDITH A.
      GULOTTA                         
      

                                    
	 	
                                      Name:  Judith
      A. Gulotta

                                    
	 	
                                      Title:  Director

                                    

                            

                          

                        

                      

                    

                  

                

              

            

          

        

         

      

    

     

     

     

     

     

     

     

     

     

     

    
      
        
        

      

      
        176

        
          

        

      

       

    

     

    
      Exhibit
A

       

      "Acceptable Bank"
means a bank whose long-term unsecured and unguaranteed debt is rated at least
"A-" (or the then-equivalent rating) by S&P or at least "A3" (or the
then-equivalent rating) by Moody's.

       

      "Account Debtor" means
the Person who is obligated on or under any Account owing to any
Borrower.

       

      "Accounts" means all
"accounts" as that term is defined in Section 9-102 of the UCC, now or
hereafter owned by any Borrower.

       

      "Accounts Bank" means
Union Bank of California, N.A., 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 Pacific Holding or any Borrower with respect to whose Plant
a Funding has been made or is being requested becomes a party after the date
hereof, other than any document under which any Borrower (or, in the case of an
agreement to which two or more Borrowers are party, such Borrowers on an
aggregate basis) (a) would not reasonably be expected to have obligations or
liabilities in the aggregate in excess of two million Dollars ($2,000,000), or
be entitled to receive revenues in the aggregate in excess of three million
Dollars ($3,000,000), in either case in value in any twelve (12) month
period and (b) a termination of which would not reasonably be expected to result
in a Material Adverse Effect; 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.

       

      
        
          
          

        

        
          Exhibit A
- 1

          
            

          

        

        
          
          

        

      

       

      "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.

       

      "Affiliated Project
Documents" means those Project Documents listed in Schedule 5.11
and identified as Affiliate agreements.

       

      "Agents" means,
collectively, the Administrative Agent, the Collateral Agent, and the Accounts
Bank.

       

      "Aggregate Construction Loan
Commitment" means, collectively, the aggregate of the In-Progress
Plant 1 Aggregate Construction Loan Commitment, the In-Progress
Plant 2 Aggregate Construction Loan Commitment, the Greenfield Plant 1
Aggregate Construction Loan Commitment, the Greenfield Plant 2 Aggregate
Construction Loan Commitment, and the Greenfield Plant 3 Aggregate Construction
Loan Commitment.

       

      "Aggregate Term Loan
Commitment" means three hundred million Dollars ($300,000,000), as the
same may be reduced in accordance with Section 2.08
(Termination
or Reduction of Commitments).

       

      "Aggregate Tranche
Commitment" means, (a) with respect to Tranche B Lenders,
 fifty million Dollars ($50,000,000) (as the same may be increased or
reduced in accordance with Section 2.08
(Termination
or Reduction of Commitments) and Section 2.09
(Tranche
Reallocation)) and (b) with
respect to Tranche A Lenders, two hundred fifty million Dollars
($250,000,000) (as the same may be reduced in accordance with Section 2.08
(Termination
or Reduction of Commitments) and Section 2.09
(Tranche
Reallocation).

       

      "Aggregate Working Capital
Loan Commitment" means, as of any date of determination, the lesser of
(a) the sum of the Borrowing Bases for each Plant (or, prior to the
Commercial Operation Date of any Plant, five million Dollars ($5,000,000)) as of
such date of determination, and (b) twenty-five million Dollars
($25,000,000), as the same may be reduced in accordance with Section 2.08
(Termination
or Reduction of Commitments).

       

      
        
          
          

        

        
          Exhibit A
- 2

          
            

          

        

        
          
          

        

      

       

      "Agreement" has the
meaning set forth in the Preamble.

       

      "Agricultural Market
Consultant" means Muse, Stancil & Co., or any replacement
agricultural market consultant appointed by the Administrative Agent and, so
long as no Default or Event of Default has occurred and is continuing,
reasonably acceptable to the Borrower's Agent (which acceptance shall not be
unreasonably withheld or delayed).

       

      "ALTA 122 Endorsement"
means an endorsement in substantially the form of Exhibit 6.02(g).

       

      "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, each
      applicable Security Document and Lien 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 thereto, 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(s) 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
- 3

          
            

          

        

        
          
          

        

      

       

      
        
          	
                	
                  (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 (i) with respect to the Tranche A Loans, the Tranche A Applicable Margin,
(ii) with respect to the Tranche B Loans, the Tranche B Applicable Margin, and
(iii) with respect to the Working Capital Loans, the Working Capital Loan
Applicable Margin, as the context requires.

       

      "Appraiser" means
Natwick & Associates or any replacement appraiser appointed by the
Administrative Agent and, so long as no Default or Event of Default has occurred
and is continuing, reasonably acceptable to the Borrowers' Agent (which
acceptance shall not be unreasonably withheld or delayed).

       

      "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 Performance Test
Protocols" means the protocols for conducting Performance Tests set forth
in Schedule 7.01(k)-B
as the same may be updated or amended with the prior written consent of the
Independent Engineer and Administrative Agent.

       

      "Auditors" means those
nationally recognized independent auditors selected by the Borrowers (including
Hein & Associates) and approved by the Administrative Agent, acting
reasonably; provided, that
approval of the Administrative Agent shall not be required for the appointment
of any United States domiciled accounting firm that (i) ranks among the top
sixty-seven (67) accounting firms in the United States by size and (ii) has
total revenues of at least thirty million Dollars ($30,000,000), of which at
least fifty percent (50%) of such revenues are derived from conducting audit
work (in which case the Borrowers' Agent shall provide a written notice to the
Administrative Agent of any such change in the Auditors).

       

      "Authorized Officer"
means (i) with respect to any Person that is a corporation, the president,
any vice president, the treasurer or the chief financial 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 or the chief financial officer of such Person, or an
Authorized Officer 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.

       

      
        
          
          

        

        
          Exhibit A
- 4

          
            

          

        

        
          
          

        

      

       

      "Bankruptcy Code"
means Title 11 of the United States Code entitled "Bankruptcy" or any
successor statute, and all rules promulgated thereunder.

       

      "Base Rate" means, for
any day, a fluctuating rate per annum equal to the higher
of (i) the Federal Funds Effective Rate plus one-half of one percent
(0.50%) and (ii) the rate of interest in effect for such day as
publicly announced from time to time by WestLB as its "prime
rate."  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.

       

      "Base Rate Loan" means
any Loan bearing interest at a rate determined by reference to the Base Rate and
the provisions of Article II
(Commitments
and Funding).

       

      "Blocked Account
Agreement" means an agreement, in substantially the form attached hereto
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.

       

      "Boardman" has the
meaning set forth in the Preamble.

       

      "Boardman Deed of
Trust" means the Leasehold Trust Deed, Security Agreement, Financing
Agreement, Fixture Filing and Assignment of Leases, Rents and Security Deposits,
in form and substance reasonably satisfactory to the Lenders and the Collateral
Agent, dated on or about the date hereof, be made by Boardman to Stewart Title
Guaranty Company, as trustee, for the benefit of the Collateral Agent, as
beneficiary.

       

      "Boardman Insurance and
Condemnation Proceeds Account" has the meaning provided in Section 8.01(m)
(Establishment
of Project Accounts).

       

      "Boardman Lease" means
the lease dated April 20, 2006 between the Port of Morrow and
Boardman.

       

      
        
          
          

        

        
          Exhibit A
- 5

          
            

          

        

        
          
          

        

      

       

      
        "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, in form and substance
reasonably satisfactory to the Lenders and the Collateral Agent, dated on or
about the date hereof, among Pacific Holding, Boardman and the Collateral Agent,
pursuant to which Pacific Holding pledges one hundred percent (100%) of the
Equity Interests in Boardman to the Collateral Agent.

         

        "Boardman Security
Agreement" means the Assignment and Security Agreement, in form and
substance reasonably satisfactory to the Lenders and the Collateral Agent, dated
on or about the date hereof, made by Boardman in favor of the Collateral
Agent.

         

        "Boardman Warranty
Account" has the meaning provided in Section 8.01(s)
(Establishment
of Accounts).

         

        "Borrower LLC
Agreements" means, collectively, the Pacific Holding LLC Agreement, the
Madera LLC Agreement, the Boardman LLC Agreement, the Stockton LLC Agreement,
the Brawley LLC Agreement, and the Burley LLC Agreement.

         

        "Borrowers" has the
meaning set forth in the Preamble.

         

        "Borrowers' Agent"
means Pacific Holding, in its capacity as agent for the Borrowers in accordance
with Section 11.05
(Borrowers'
Agent).

         

        "Borrowing Base"
means, on any given date and with respect to each Borrower whose Plant has
achieved its Commercial Operation Date, an amount equal to, eighty percent (80%)
of the sum of, without duplication:

         

        
          
            	
                  	
                    (i) 

                  	
                    the
      face amount (less reserves, maximum discounts, credits and allowances that
      may be taken by or granted to the Account Debtor thereof in connection
      therewith) of all Eligible Accounts for such Plant that are set forth in
      the Borrowing Base Certificate then most recently delivered by the
      Borrowers' Agent to the Administrative Agent;
  and

                  

          

        

         

        
          
            
            

          

          
            Exhibit A
- 6

            
              

            

          

          
            
            

          

        

         

        
          
            	
                  	
                    (ii) 

                  	
                    the
      Value of no more than sixty (60) days' Eligible Inventory for such Plant
      (less reserves, maximum discounts, credits and allowances that may be
      taken by or granted to the Account Debtor thereof in connection therewith)
      as set forth in the Borrowing Base Certificate then most recently
      delivered by the Borrowers' Agent to the Administrative
    Agent.

                  

          

        

         

        "Borrowing Base
Certificate" means a certificate setting forth the Borrowing Base of each
Borrower as of the date of such certificate, substantially in the form of Exhibit 7.03(n).

         

        "Brawley" has the
meaning set forth in the Preamble.

         

        "Brawley Construction
Account" has the meaning provided in Section 8.01(d)
(Establishment
of Project Accounts).

         

        "Brawley Construction
Budget" means the budget attached hereto as Schedule 7.02(t)
that sets forth all categories of costs and expenses required in connection with
the development, construction, start-up, and testing of the Brawley Plant,
including all construction costs and non-construction costs, all costs under the
Brawley Construction Contracts, all interest, taxes and other carrying costs
related to the Construction Loans for the Brawley Plant, and costs related to
the construction of the facilities described under the Project Documents
relating to the Brawley Plant, as updated from time to time in accordance with
Section 6.04(h)
(Conditions
to First Funding for Each Greenfield Plant –Construction Schedule and Updated
Budget) and Section 7.02(t)
(Negative
Covenants - Construction Budget).

         

        "Brawley Construction
Withdrawal Certificate" means a certificate in substantially the form of
Exhibit 8.05,
duly executed by an Authorized Officer of the Borrowers' Agent, directing the
transfer or withdrawal of funds from the Brawley Construction
Account.

         

        "Brawley 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
(or with changes agreed to by the Borrowers, the Administrative Agent and the
Collateral Agent, in each case acting reasonably), to be made by Brawley to
Stewart Title Guaranty Company, as trustee, for the benefit of the Collateral
Agent, as beneficiary.

         

        
          
            
            

          

          
            Exhibit A
- 7

            
              

            

          

          
            
            

          

        

         

        "Brawley Equity
Contributions" means the aggregate total amount of (i) the Brawley
Required Equity Contribution (following the contribution of such amounts to
Brawley and their application to Brawley Project Costs) and (ii) all other
equity contributed to Brawley and applied to Brawley Project Costs.

         

        "Brawley Insurance and
Condemnation Proceeds Account" has the meaning provided in Section 8.01(o)
(Establishment
of Project Accounts).

         

        "Brawley Option
Agreement" means that certain option agreement dated August 22,
2005, between Pacific Ethanol and American Grain, LLC for approximately sixty
(60) acres in Imperial, California (which shall be assigned by Pacific Ethanol
to Brawley prior to the initial Funding Date for the Brawley
Plant).

         

        "Brawley Plant" means
the ethanol production facility located at Brawley, 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.

         

        "Brawley Pledge
Agreement" means the Pledge and Security Agreement, in substantially the
form of Exhibit
6.04(g)-B (or with changes agreed to by the Borrowers, the Administrative
Agent and the Collateral Agent, in each case acting reasonably), to be entered
into among Pacific Holding, Brawley and the Collateral Agent, pursuant to which
Pacific Holding will pledge one hundred percent (100%) of the Equity
Interests in Brawley to the Collateral Agent.

         

        "Brawley Project
Costs" means the following costs and expenses incurred by the Borrowers
in connection with the Brawley Plant prior to the Commercial Operation Date for
the Brawley Plant and set forth in the then-current Brawley Construction Budget
or otherwise approved in writing by the Administrative Agent (in consultation
with the Independent Engineer):

         

        
          
            	
                  	
                    (i) 

                  	
                    costs
      incurred by the Borrowers under the Brawley Construction Contracts, and
      other costs directly related to the acquisition, site preparation, design,
      engineering, construction, installation, start-up, and testing of the
      Brawley Plant;

                  

          

        

         

        
          
            	
                  	
                    (ii) 

                  	
                    fees
      and expenses incurred by or on behalf of the Borrowers and allocated to
      the Brawley Plant in connection with the development of the Project and
      the consummation of the transactions contemplated by this Agreement,
      including financial, accounting, legal, surveying and consulting fees, and
      the costs of preliminary
engineering;

                  

          

        

         

        
          
            
            

          

          
            Exhibit A
- 8

            
              

            

          

          
            
            

          

        

         

        
          
            	
                  	
                    (iii) 

                  	
                    interest
      and Fees on the Construction Loans for the Brawley
  Plant;

                  

          

        

         

        
          
            	
                  	
                    (iv) 

                  	
                    financing
      fees and expenses in connection with the Loans and the fees, costs and
      expenses of the Agents' counsel, any Interest Rate Protection Provider's
      counsel and the Consultants that are allocated to the Brawley
      Plant;

                  

          

        

         

        
          
            	
                  	
                    (v) 

                  	
                    insurance
      premiums with respect to the Title Insurance Policy for the Brawley Plant
      and the insurance for the Brawley Plant required pursuant to Section 7.01(h)
      (Affirmative
      Covenants - Insurance);

                  

          

        

         

        
          
            	
                  	
                    (vi) 

                  	
                    costs
      of corn and natural gas utilized for commissioning, Performance Tests for,
      and operation of, the Brawley Plant prior to its Commercial Operation
      Date; and

                  

          

        

         

        
          
            	
                  	
                    (vii) 

                  	
                    all
      other costs and expenses included in the then-current Brawley Construction
      Budget.

                  

          

        

         

        "Brawley Required Equity
Contribution" means, as of the initial Funding Date for the Brawley
Plant, an amount equal to the aggregate total amount of Project Costs in the
Construction Budget for the Brawley Plant approved pursuant to Section 6.04(h)(i)
(Conditions
to First Funding for Each Greenfield Plant - Construction Schedule and Updated
Budget)
minus
(x) five million Dollars ($5,000,000) and (y) the lesser of
(A) forty-five million Dollars ($45,000,000) or (B) an amount equal to
forty percent (40%) of such aggregate Project Costs.

         

        "Brawley Security
Agreement" means the Assignment and Security Agreement, substantially the
form of Exhibit 6.04(g)-C
(or with changes agreed to by the Borrowers, the Administrative Agent and the
Collateral Agent, in each case acting reasonably), to be made by Brawley in
favor of the Collateral Agent.

         

        "Brawley Warranty
Account" has the meaning provided in Section 8.01(u)
(Establishment
of Project Accounts).

         

        "Burley" has the
meaning set forth in the Preamble.

         

        "Burley Construction
Account" has the meaning provided in Section 8.01(e)
(Establishment
of Project Accounts).

         

        
          
            
            

          

          
            Exhibit A
- 9

            
              

            

          

          
            
            

          

        

         

        "Burley Construction
Budget" means the budget attached hereto as Schedule 7.02(t)
that sets forth all categories of costs and expenses required in connection with
the development, construction, start-up, and testing of the Burley Plant,
including all construction costs and non-construction costs, all costs under the
Burley Construction Contract, all interest, taxes and other carrying costs
related to the Construction Loans for the Burley Plant, and costs related to the
construction of the facilities described under the Project Documents relating to
the Burley Plant, as updated from time to time in accordance with Section 6.04(h)
(Conditions
to First Funding for Each Greenfield Plant –Construction Schedule and Updated
Budget) and
Section 7.02(t)
(Negative
Covenants - Construction Budget).

         

        "Burley Construction
Withdrawal Certificate" means a certificate in substantially the form of
Exhibit 8.05,
duly executed by an Authorized Officer of the Borrowers' Agent, directing the
transfer or withdrawal of funds from the Burley Construction
Account.

         

        "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 (or with changes agreed to by the Borrowers, the Administrative
Agent and the Collateral Agent, in each case acting reasonably), to be made by
Burley to the Collateral Agent.

         

        "Burley Equity
Contributions" means the aggregate total amount of (i) the Burley
Required Equity Contribution (following the contribution of such amounts to
Burley and their application to Burley Project Costs) and (ii) all other equity
contributed to Burley and applied to Burley Project Costs.

         

        "Burley Insurance and
Condemnation Proceeds Account" has the meaning provided in Section 8.01(p)
(Establishment
of Project Accounts).

         

        "Burley Option
Agreement" means that certain option agreement dated July 17, 2006
between Pacific Ethanol and Glen Larson and Carol Larson, as amended by first
amendment dated September 15, 2006, for approximately one hundred sixty
(160) acres in Cassia County, Idaho (which shall be assigned by Pacific Ethanol
to Burley prior to the initial Funding Date for the Burley Plant).

         

        "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.

         

        
          
            
            

          

          
            Exhibit A
- 10

            
              

            

          

          
            
            

          

        

         

        "Burley Pledge
Agreement" means the Pledge and Security Agreement, in substantially the
form of Exhibit
6.04(g)-B (or with changes agreed to by the Borrowers, the Administrative
Agent and the Collateral Agent, in each case acting reasonably), to be entered
into among Pacific Holding, Burley and the Collateral Agent, pursuant to which
Pacific Holding will pledge one hundred percent (100%) of the Equity
Interests in Burley to the Collateral Agent.

         

        "Burley Project Costs"
means the following costs and expenses incurred by the Borrowers in connection
with the Burley Plant prior to the Commercial Operation Date for the Burley
Plant and set forth in the then-current Burley Construction Budget or otherwise
approved in writing by the Administrative Agent (in consultation with the
Independent Engineer):

         

        
          
            	
                  	
                    (i) 

                  	
                    costs
      incurred by the Borrowers under the Burley Construction Contracts, and
      other costs directly related to the acquisition, site preparation, design,
      engineering, construction, installation, start-up, and testing of the
      Burley Plant;

                  

          

        

         

        
          
            	
                  	
                    (ii) 

                  	
                    fees
      and expenses incurred by or on behalf of the Borrowers and allocated to
      the Burley Plant in connection with the development of the Project and the
      consummation of the transactions contemplated by this Agreement, including
      financial, accounting, legal, surveying and consulting fees, and the costs
      of preliminary engineering;

                  

          

        

         

        
          
            	
                  	
                    (iii) 

                  	
                    interest
      and Fees on the Construction Loans for the Burley
  Plant;

                  

          

        

         

        
          
            	
                  	
                    (iv) 

                  	
                    financing
      fees and expenses in connection with the Loans and the fees, costs and
      expenses of the Agents' counsel, any Interest Rate Protection Provider's
      counsel and the Consultants that are allocated to the Burley
      Plant;

                  

          

        

         

        
          
            	
                  	
                    (v) 

                  	
                    insurance
      premiums with respect to the Title Insurance Policy for the Burley Plant
      and the insurance for the Burley Plant required pursuant to Section 7.01(h)
      (Affirmative
      Covenants - Insurance);

                  

          

        

         

        
          
            	
                  	
                    (vi) 

                  	
                    costs
      of corn and natural gas utilized for commissioning, Performance Tests for,
      and operation of, the Burley Plant prior to its Commercial Operation Date;
      and

                  

          

        

         

        
          
            
            

          

          
            Exhibit A
- 11

            
              

            

          

          
            
            

          

        

         

        
          
            	
                  	
                    (vii) 

                  	
                    all
      other costs and expenses included in the then-current Burley Construction
      Budget.

                  

          

        

         

        "Burley Required Equity
Contribution" means, as of the initial Funding Date for the Burley Plant,
an amount equal to the aggregate total amount of Project Costs in the
Construction Budget for the Burley Plant approved pursuant to Section 6.04(h)(i)
(Conditions
to First Funding for Each Greenfield Plant - Construction Schedule and Updated
Budget)
minus
(x) five million Dollars ($5,000,000) and (y) the lesser of
(A) forty-five million Dollars ($45,000,000) or (B) an amount equal to
forty percent (40%) of such aggregate Project Costs.

         

        "Burley Security
Agreement" means the Assignment and Security Agreement, in substantially
the form of Exhibit
6.04(g)-C (or with changes agreed to by the Borrowers, the Administrative
Agent and the Collateral Agent, in each case acting reasonably), to be made by
Burley in favor of the Collateral Agent.

         

        "Burley Warranty
Account" has the meaning provided in Section 8.01(v)
(Establishment
of Project Accounts).

         

        "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.

         

        "Buy-Down L.D.
Reimbursement" means, in the event that the Commitments for any Plant are
reduced on such Plant's Commercial Operation Date in accordance with Section 2.08(e)
(Termination
or Reduction of Commitments), any performance
liquidated damages paid or payable to the Borrowers (up to, and not in excess
of, any such reduction) with respect to such Plant may be paid or distributed to
Pacific Ethanol.

         

        
          
            
            

          

          
            Exhibit A
- 12

            
              

            

          

          
            
            

          

        

         

        "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.

         

        "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.

         

        
          
            
            

          

          
            Exhibit A
- 13

            
              

            

          

          
            
            

          

        

         

        "Cash Flow" means, for
any period, the sum (without duplication) of the
following:  (i) all cash paid to the Borrowers during such period
in connection with the Ethanol Offtake Agreements, DG Offtake Agreements and any
other sales of Products, (ii) all interest and investment earnings paid to
the Borrowers or the Project Accounts during such period on amounts on deposit
in the Project Accounts, (iii) all cash paid to the Borrowers during such
period as Business Interruption Insurance Proceeds or liability insurance
proceeds (but only to the extent that such liability insurance proceeds
represent reimbursement of third party claims already paid by the Borrowers) and
(iv) all other cash paid to the Borrowers during such period; provided, however, that Cash
Flow shall not include any proceeds of the Loans or any other Indebtedness
incurred by any Borrower (other than payments (excluding payments of Swap
Termination Value) made to any Borrower pursuant to any Permitted Commodity
Hedging Arrangements); Insurance Proceeds; Condemnation Proceeds; Required
Equity Contributions; Required Subordinated Debt Disbursements; any amounts paid
pursuant to the Sponsor Support Agreement; any amounts drawn under, or paid
pursuant to, any Debt Service Reserve Letter of Credit; proceeds from any
disposition of assets of any Plant or any Borrower (other than Products); tax
refunds; amounts received, whether by way of a capital contribution or
otherwise, from any holders of Equity Interests of any Borrower (other than
payments made under the Affiliated Project Documents when due and payable in
accordance with the terms thereof and the terms of the Financing Documents); and
any other extraordinary or non-cash income or receipt of any Borrower under
GAAP; provided,
further, that
any proceeds of Permitted Commodity Hedging Arrangements that are treated as
Cash Flow shall be calculated on a net basis taking into account any related
payments required to be made by the Borrowers.

         

        "Cash Flow Available for Debt
Service" means, for any period, an amount equal to the amount of Cash
Flow deposited in the Revenue Account during such period minus all amounts
paid during such period (i) prior to the Conversion Date, pursuant to
priorities first and
second of Section 8.08(b)
(Revenue
Account) and (ii) on and after the Conversion Date, pursuant to
priorities first and
second of Section 8.08(c)
(Revenue
Account).

         

        "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) the result of which is that (i) Pacific Holding fails to
maintain, directly, legally or beneficially, one hundred percent (100%) of
the Equity Interests of any of Madera, Boardman, Stockton, Brawley, or Burley,
(ii) the Pledgor  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, 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.

         

        
          
            
            

          

          
            Exhibit A
- 14

            
              

            

          

          
            
            

          

        

         

        "Change Order" means
each "Change Order" (if any) as described in any Construction
Contract.

         

        "Closing Date" means
the date on which all the conditions set forth in Section 6.01
(Conditions
to Closing) have been satisfied
or waived.

         

        "Code" means the
Internal Revenue Code of 1986, as amended.

         

        "Collateral" means all
assets of and Equity Interests in the Borrowers, whether now owned or
hereinafter acquired, upon which a Lien is purported to be created by any
Security Document then in effect or contemplated to be in effect.

         

        "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).

         

        "Commercial Operation
Date" means with respect to any Plant, the date (which for each Plant
shall occur on or before the Conversion Date Certain) on which the following
conditions have been satisfied for such Plant, as certified by the Borrowers'
Agent and confirmed in writing by the Independent Engineer in a Commercial
Operation Date Certificate completed to the reasonable satisfaction of the
Administrative Agent:

         

        
          
            	
                  	
                    (i) 

                  	
                    construction
      of such Plant shall have been completed (other than punch list items) and
      such Plant shall be ready to grind corn and begin operation for its
      intended use as an ethanol production facility at its design basis
      capacity;

                  

          

        

         

        
          
            	
                  	
                    (ii) 

                  	
                    the
      Performance Test, in accordance with the Approved Performance Test
      Protocols shall have been completed and shall have demonstrated that such
      Plant has achieved the Minimum Performance Criteria, while meeting air
      emissions requirements;

                  

          

        

         

        
          
            	
                  	
                    (iii) 

                  	
                    training
      shall have been completed for all required Plant personnel in a manner
      that is reasonably satisfactory to the Independent
    Engineer;

                  

          

        

         

        
          
            
            

          

          
            Exhibit A
- 15

            
              

            

          

          
            
            

          

        

         

        
          
            	
                  	
                    (iv) 

                  	
                    the
      Borrowers shall have received a plant operation manual and plant
      maintenance manual, associated documents, training manuals, final safety
      plans, and all materials and documents provided by the Construction
      Contractors and other manufacturers, suppliers and vendors for such Plant,
      and in each case, shall have been reviewed by the Independent
      Engineer;

                  

          

        

         

        
          
            	
                  	
                    (v) 

                  	
                    the
      Borrowers shall have received preliminary construction drawings for such
      Plant;

                  

          

        

         

        
          
            	
                  	
                    (vi) 

                  	
                    all
      construction costs for such Plant, except in an aggregate amount not to
      exceed five million Dollars ($5,000,000) and with respect to which the
      full amount of such costs has been reserved, shall have been fully paid
      (other than amounts that are subject to a Contest) and the Administrative
      Agent shall have received reasonably satisfactory evidence (for example,
      an ALTA 122 Endorsement to the applicable Title Policy) that there are no
      mechanic's, workmen's, materialmen's or other similar Liens or other
      claims on any part of such Plant, Site, or other assets relating to the
      work or services of such Plant provided by the Construction Contractors or
      any of their subcontractors (other than Liens that are subject to a
      Contest);

                  

          

        

         

        
          
            	
                  	
                    (vii) 

                  	
                    each
      Construction Contractor and each subcontractor for such Plant shall have
      provided all satisfactory Lien waivers, other than with respect to punch
      list items and work done by the Construction Contractor and
      subcontractors, taken as a whole, with respect to which payments do not
      exceed, in the aggregate, one million Dollars ($1,000,000) (other than
      Liens that are subject to a Contest);
and

                  

          

        

         

        
          
            	
                  	
                    (viii) 

                  	
                    all
      Necessary Project Approvals required to be obtained at such time with
      respect to such Plant shall have been
obtained.

                  

          

        

         

        
          
            
            

          

          
            Exhibit A
- 16

            
              

            

          

          
            
            

          

        

         

        "Commercial Operation Date
Certificate" means a certificate of the Independent Engineer and the
Borrowers' Agent, in substantially the form of Exhibit 6.02(a),
confirming that the Commercial Operation Date has occurred.

         

        "Commitment Fee" has
the meaning provided in Section 3.13(a)
(Fees).

         

        "Commitment
Percentage" means, as to any Lender at any time, such Lender's
Construction Loan Commitment Percentage, Term Loan Commitment Percentage, or
Working Capital Loan Commitment Percentage, as the context may
require.

         

        "Commitments" means,
with respect to each Lender, as applicable, such Lender's Construction Loan
Commitment, Term Loan Commitment or Working Capital Loan Commitment, as the
context may require.

         

        "Commodity Hedging
Arrangements" means any arrangement to hedge the price of corn purchases,
ethanol sales, Distillers Grains sales or natural gas purchases.

         

        "Commodity Risk Management
Plans" means risk management plans prepared by the Borrowers and approved
by the Administrative Agent pursuant to Section 7.01(w)
(Affirmative
Covenants - Commodity Hedging Programs) setting forth terms
and conditions relating to any Commodity Hedging Arrangements from time to time
proposed to be entered into by the Borrowers, including any updates made to such
risk management plans with the approval of the Administrative
Agent.

         

        "Condemnation
Proceeds" means any amounts and proceeds of any kind (including
instruments) payable in respect of any Event of Taking.

         

        "Confidential Information
Memorandum" means the information memorandum, dated December 2006,
together with any updates related thereto, describing the Project.

         

        "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
Accounts" means, collectively, the Construction Holding Account, the
Stockton Construction Account, the Brawley Construction Account and the Burley
Construction Account.

         

        
          
            
            

          

          
            Exhibit A
- 17

            
              

            

          

          
            
            

          

        

         

        "Construction Budgets"
means, collectively, the Stockton Construction Budget, the Brawley Construction
Budget and the Burley Construction Budget.

         

        "Construction
Contractors" means each party, other than the Borrowers, to each
Construction Contract.

         

        "Construction
Contracts" means collectively, (i) the construction contracts
identified on Schedule 5.11 to
which any of Parsons and Delta-T are parties, (ii) each CMSA,
(iii) all material contracts relating to construction of each of the
Greenfield Plants that, individually or in the aggregate, address the same scope
of construction requirements as the Boardman Plant construction contracts
described in clause (i) of this definition, (iv) any additional
contracts relating to the construction of any Greenfield Plant addressing
matters that are critical to the construction of such Greenfield Plant and
(v) any Additional Project Document related to construction
matters.

         

        "Construction Holding
Account" has the meaning set forth in Section 8.01(b)
(Establishment
of Project Accounts).

         

        "Construction Holding
Withdrawal Certificate" means a certificate in substantially the form of
Exhibit 8.04,
duly executed by an Authorized Officer of the Borrowers' Agent, directing the
transfer or withdrawal of funds from the Construction Holding
Account.

         

        "Construction Loan
Commitment" means, with respect to each Construction/Term Lender, such
Lender's Tranche A Construction Loan Commitment and/or Tranche B
Construction Loan Commitment, as applicable.

         

        "Construction Loan Commitment
Percentage" means, as to any Lender at any time, the percentage that such
Lender's Construction Loan Commitment then constitutes of the Aggregate
Construction Loan Commitment.

         

        "Construction Loan Maturity
Date" means the earlier of (a) the Conversion Date and (b) the
Conversion Date Certain.

         

        "Construction Loans"
means, collectively, the In-Progress Plant 1 Construction Loans, the
In-Progress Plant 2 Construction Loans, the Greenfield Plant 1 Construction
Loans, the Greenfield Plant 2 Construction Loans, and the Greenfield
Plant 3 Construction Loans.

         

        "Construction Manager"
means the Pledgor or any successor pursuant to a CMSA (or any replacement
thereof).

         

        
          
            
            

          

          
            Exhibit A
- 18

            
              

            

          

          
            
            

          

        

         

        "CMSA" means each
Construction Management Services Agreement between any Borrower and the
Construction Manager.

         

        "Construction Notes"
means the promissory notes of each Borrower, substantially in the form of Exhibit 2.07,
evidencing Construction Loans.

         

        "Construction
Schedule" means, with respect to each Greenfield Plant, the schedule for
construction of such Plant, approved in writing by the Administrative Agent and
the Independent Engineer in accordance with Section 6.04(h)
(Conditions
to First Funding for Each Greenfield Plant - Construction Schedule and Updated
Budget), as the same may be amended from time to time with the prior
written approval of the Administrative Agent and the Independent
Engineer.

         

        "Construction/Term
Lenders" means, collectively, the Tranche A Lenders and the Tranche B
Lenders.

         

        "Construction Withdrawal
Certificate" means a Construction Holding Withdrawal Certificate,
Stockton Construction Withdrawal Certificate, Brawley Construction Withdrawal
Certificate, and/or Burley Construction Withdrawal Certificate, as the case may
be.

         

        "Consultants" means
the Independent Engineer, the Insurance Consultant, the Ethanol Market
Consultant, and the Agricultural Market Consultant.

         

        "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 (or, prior to
the Commercial Operation Date for any Plant with respect to which a Funding has
been made, the Borrowers have demonstrated to the reasonable satisfaction of the
Administrative Agent that adequate Loan proceeds will be available to cover such
claim relating to such Plant); (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
- 19

            
              

            

          

          
            
            

          

        

         

        "Contingency Line
Item" means the Line Item in each Construction Budget identified as
"contingency" that is intended to cover the eventuality of unforeseen Project
Costs for the relevant Plant.

         

        "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.

         

        "Contract Disclosure
Update" means a written notice delivered by the Borrowers' Agent to the
Administrative Agent, providing any updates to Schedule 5.11
with respect to any material contracts, agreements, instruments or other
documents (other than the Financing Documents) to which any Borrower has become
a party after the date hereof.

         

        "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.

         

        "Conversion Date"
means, the Business Day upon which all the conditions precedent set forth in
Section 6.07
(Conditions
to Term Loan Funding) shall have been
satisfied (or waived in accordance with the terms of this Agreement) and the
Construction Loans are converted to Term Loans.

         

        "Conversion Date
Certain" means the date that is twenty (20) months from the date
hereof.

         

        "Corn Supplier" means
Pacific Ag Products or any other counterparty to a Grain Supply
Agreement.

         

        
          
            
            

          

          
            Exhibit A
- 20

            
              

            

          

          
            
            

          

        

         

        "Current Priority
Subordinated Interest" means, with respect to any Quarterly Period,
interest that has accrued, and is due and payable, on the Priority Subordinated
Loans during such Quarterly Period, but expressly excluding any such interest
that accrued on the Priority Subordinated Loans in any previous Quarterly
Period.

         

        "DDG" means dried
distillers grains (if any) produced by the Borrowers at the
Project.

         

        "Debt Service" means,
for any period, the sum of (i) all fees (including Fees) scheduled to
become due and payable during such period to the Senior Secured Parties,
(ii) interest on the Loans (taking into account any payments received under
Interest Rate Protection Agreements) scheduled to become due and payable during
such period to the Senior Secured Parties, (iii) principal payments of the
Loans (excluding the Required Cash Sweep and any other mandatory prepayments)
scheduled to become due and payable during such period to the Senior Secured
Parties and (iv) all payments due by the Borrowers pursuant to Section 4.03
(Increased
Eurodollar Loan Costs) and Section 4.07(a)
(Taxes) with respect to
such scheduled principal, interest and fees.

         

        "Debt Service LC Waiver
Letter" means, with respect to any Debt Service Reserve Letter of Credit,
a waiver letter from the issuer thereof in substantially the form of Annex E to
Exhibit
8.12.

         

        "Debt Service Reserve
Account" has the meaning set forth in Section 8.01(j)
(Establishment
of Project Accounts).

         

        "Debt Service Reserve Letter
of Credit" means an irrevocable, standby letter of credit in
substantially the form of Exhibit 8.12,
accompanied by a Debt Service LC Waiver Letter, issued by an Acceptable Bank in
favor of the Collateral Agent which has the following minimum
terms:

         

        
          
            	
                  	
                    (i) 

                  	
                    a
      term of not less than three hundred sixty-four (364) days (or, if the
      Final Maturity Date is less than three hundred sixty four (364) days from
      the date such Debt Service Reserve Letter of Credit is issued, a term
      ending no earlier than the date that is five (5) Business Days
      following the Final Maturity
Date);

                  

          

        

         

        
          
            	
                  	
                    (ii) 

                  	
                    allows
      the Collateral Agent to make a drawdown of the Stated Amount in each of
      the circumstances described in Section 8.12(c)
      (Debt
      Service Reserve Account);
      and

                  

          

        

         

        
          
            
            

          

          
            Exhibit A
- 21

            
              

            

          

          
            
            

          

        

         

        
          
            	
                  	
                    (iii) 

                  	
                    the
      reimbursement and other payment obligations with respect to such letter of
      credit are not for the account of any Borrower, any Plant or the
      Project.

                  

          

        

         

        "Debt Service Reserve
Requirement" means, as of any date, the amount equal to the projected
scheduled Debt Service payable in respect of the succeeding six
(6) months.

         

        "Debtor Relief Laws"
means the Bankruptcy Code and all other liquidation, conservatorship,
bankruptcy, assignment for the benefit of creditors, moratorium, rearrangement,
receivership, insolvency, reorganization, or similar debtor relief laws of the
United States or other applicable jurisdictions from time to time in effect and
affecting the rights of creditors generally.

         

        "Default" means any
condition, occurrence or event that, after notice or passage of time or both,
would be an Event of Default.

         

        "Default Rate" has the
meaning set forth in Section 3.06(b)
(Post-Maturity
Interest Rates; Default Interest Rates).

         

        "Deferred Approvals"
has the meaning set forth in Section 5.03(a)
(Governmental
Approvals).

         

        "Deferred Contracts"
has the meaning provided in Section 5.11(b)(iii)
(Contracts).

         

        "Delta-T" Delta-T
Corporation, a Virginia corporation.

         

        "DG Offtake
Agreements" means any agreement relating to the sale or Distillers Grains
by any Borrower with a scheduled term in excess of one year and with payments
thereunder expected to be in excess of three million Dollars ($3,000,000),
including the Madera DG Agreement and each agreement between any Borrower and
Pacific Ag Products relating to the sale or marketing of Distillers
Grains.

         

        "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).

         

        "Distillers Grains"
means DDG, WDG, and any other form of distillers grain products (including
syrup) marketed by any Borrower from time to time.

         

        
          
            
            

          

          
            Exhibit A
- 22

            
              

            

          

          
            
            

          

        

         

        "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(a)
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
Borrowers' Agent and the Administrative Agent.

         

        "Drawdown Schedule"
means, with respect to each of the Construction Loans for the Madera Plant, the
Construction Loans for the Boardman Plant, the Construction Loans for the
Stockton Plant, the Construction Loans for the Brawley Plant, and the
Construction Loans for the Burley Plant, the schedule set forth on Schedule 6.01(q),
as the same may be amended from time to time with the approval of the
Administrative Agent and the Independent Engineer.

         

        "Eligible Accounts"
means, with respect to each Borrower, all Accounts of such Borrower that meet
each of the following requirements:

         

        
          
            	
                  	
                    (i) 

                  	
                    it
      arises from either (i) the delivery of Products or grain storage and
      unloading services performed by such Borrower, which services have been
      fully performed and, if applicable, acknowledged and/or accepted by the
      Account Debtor with respect thereto or (ii) the sale or lease of
      goods by such Borrower, and if it arises from the sale of goods, such
      goods have been shipped or delivered to the Account Debtor
      thereof;

                  

          

        

         

        
          
            	
                  	
                    (ii) 

                  	
                    it
      is a valid, legally enforceable obligation of the Account Debtor
      thereunder, and is not subject to any reserve, discount, credit, allowance
      (except any reserve, discount, credit or allowance that has been deducted
      in computing the net amount thereof), offset, counterclaim or other
      defense on such Account Debtor's part or to any claim on such Account
      Debtor's part denying liability thereunder in whole or in
      part;

                  

          

        

         

        
          
            	
                  	
                    (iii) 

                  	
                    it
      is subject to a perfected Lien in the Collateral Agent's favor, for the
      benefit of the Senior Secured Parties, and is not subject to any other
      Lien, except for Permitted
Liens;

                  

          

        

         

        
          
            
            

          

          
            Exhibit A
- 23

            
              

            

          

          
            
            

          

        

         

        
          
            	
                  	
                    (iv) 

                  	
                    it
      is evidenced by an invoice (dated no later than the date of shipment to
      the Account Debtor or performance and having a due date not more than
      sixty (60) days after the date of such invoice) rendered to such Account
      Debtor, and is not evidenced by any instrument or chattel
      paper;

                  

          

        

         

        
          
            	
                  	
                    (v) 

                  	
                    it
      is payable in Dollars;

                  

          

        

         

        
          
            	
                  	
                    (vi) 

                  	
                    it
      is not owing by any Governmental
Authority;

                  

          

        

         

        
          
            	
                  	
                    (vii) 

                  	
                    it
      is not owing by any Account Debtor residing, located or having its
      principal activities or place of business outside the United States,
      unless the sale of goods giving rise to such Account is credit enhanced by
      means of a letter of credit, bankers' acceptance or other credit support
      that is satisfactory to the Administrative Agent and, if required by the
      Administrative Agent, has been delivered to the Administrative Agent and
      is directly drawable by the Administrative
  Agent;

                  

          

        

         

        
          
            	
                  	
                    (viii) 

                  	
                    it
      is not owing by any Account Debtor involved in any Insolvency Proceeding
      or with respect to which any Borrower has received notice of an imminent
      Insolvency Proceeding or a material impairment of the financial condition
      of such Account Debtor;

                  

          

        

         

        
          
            	
                  	
                    (ix) 

                  	
                    it
      is not owing by any Affiliate of such Borrower, other than pursuant to an
      Affiliated Project Document;

                  

          

        

         

        
          
            	
                  	
                    (x) 

                  	
                    it
      is not unpaid more than sixty (60) days after the invoice
      date;

                  

          

        

         

        
          
            	
                  	
                    (xi) 

                  	
                    it
      is not owing by an Account Debtor that has amounts outstanding more than
      sixty (60) days after the due date of any
  invoice;

                  

          

        

         

        
          
            	
                  	
                    (xii) 

                  	
                    it
      is not an Account arising in a transaction where goods are sold on
      consignment or are sold pursuant to a sale on approval, a bill and hold,
      or any other terms by reason of which the payment by the Account Debtor
      may be conditional; and

                  

          

        

         

        
          
            
            

          

          
            Exhibit A
- 24

            
              

            

          

          
            
            

          

        

         

        
          
            	
                  	
                    (xiii) 

                  	
                    it
      is not an Account as to which the Administrative Agent, at any time or
      times hereafter, determines, in its reasonable judgment and in good faith,
      that the prospect of payment or performance by the Account Debtor thereof
      is or will be impaired in any material
respect.

                  

          

        

         

        An
Account of such Borrower that is at any time an Eligible Account, but which
subsequently fails to meet any of the foregoing requirements, shall immediately
cease to be an Eligible Account; provided, that if
such an ineligible Account subsequently meets all of the foregoing requirements,
it shall again be deemed an Eligible Account.

         

        "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 and, so long as no Default or Event of
Default has occurred and is continuing (and any with respect only to Tranche A
Lenders or Working Capital Lenders, in either such case following the occurrence
of a Successful Syndication) the Borrower's Agent (each such approval not to be
unreasonably withheld or delayed).

         

        "Eligible Inventory"
means, with respect to each Borrower, the Inventory of such Borrower that meets
each of the following requirements:

         

        
          
            	
                  	
                    (i) 

                  	
                    in
      the case of Inventory consisting of corn or other grain feedstock, or
      denaturant, such corn, other grain feedstock or denaturant that is readily
      usable for the operation of the relevant Plant in the ordinary course of
      business;

                  

          

        

         

        
          
            	
                  	
                    (ii) 

                  	
                    in
      the case of Inventory consisting of Products, such Products that are
      readily marketable by the relevant Plant in the ordinary course of
      business;

                  

          

        

         

        
          
            	
                  	
                    (iii) 

                  	
                    in
      the case of goods held for sale, the value thereof is adjusted to its
      then-current market value;

                  

          

        

         

        
          
            	
                  	
                    (iv) 

                  	
                    it
      is owned by the relevant Borrower and is subject to a perfected Lien in
      the Collateral Agent's favor, for the benefit of the Senior Secured
      Parties, and is not subject to any other Lien, except for Permitted
      Liens;

                  

          

        

         

        
          
            	
                  	
                    (v) 

                  	
                    it
      is not consigned Inventory;

                  

          

        

         

        
          
            	
                  	
                    (vi) 

                  	
                    it
      is located only at one of the Sites or at such other location as is
      approved in writing by the Administrative Agent;
  and

                  

          

        

         

        
          
            
            

          

          
            Exhibit A
- 25

            
              

            

          

          
            
            

          

        

         

        
          
            	
                  	
                    (vii) 

                  	
                    the
      Administrative Agent, in its reasonable judgment and in good faith, has
      not determined that it is unacceptable or should be price-adjusted in any
      material respect due to age, type, quality, category and/or
      quantity.

                  

          

        

         

        Any of
the Inventory of such Borrower that is at any time Eligible Inventory, but which
subsequently fails to meet any of the foregoing requirements, shall immediately
cease to be Eligible Inventory; provided, that if
such ineligible Inventory subsequently meets all of the foregoing requirements,
it shall again be deemed Eligible Inventory.

         

        "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 of
the Borrowers 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) on or prior to the Conversion Date, a material adverse effect
on Pacific Holding or any other Borrower or Plant with respect to which a
Funding has been made or is being requested, or (B) after the Conversion
Date, 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.

         

        "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.

         

        
          
            
            

          

          
            Exhibit A
- 26

            
              

            

          

          
            
            

          

        

         

        "Environmental Site
Assessment Report" means, with respect to each Plant, a Phase I
environmental site assessment report prepared by an environmental consulting
firm reasonably acceptable to the Administrative Agent, which report shall
comply with ASTM standard 1527-05 (with such modifications thereto as may
reasonably be requested by the Borrowers and are reasonably acceptable to the
Administrative Agent), and a Phase II environmental site assessment reasonably
acceptable to the Administrative Agent, addressing any recognized environmental
conditions or other areas of concern identified in the relevant Phase I report
if in the reasonable determination of the Administrative Agent, acting in
consultation with the Independent Engineer, a Phase II assessment is
warranted.

         

        "Equator Principles"
means The Equator Principles – An Industry Framework for Financial Institutions
to Manage Environmental and Social Issues in Project Financing (commonly
referred to as "The Equator Principles").

         

        "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.

         

        
          
            
            

          

          
            Exhibit A
- 27

            
              

            

          

          
            
            

          

        

         

        "Escrow Account" has
the meaning set forth in Section 8.01(a)
(Establishment
of Project Accounts).

         

        "Ethanol Market
Consultant" means Muse, Stancil & Co., or any replacement ethanol
market consultant appointed by the Administrative Agent and, so long as no
Default or Event of Default has occurred and is continuing, reasonably
acceptable to the Borrower's Agent (which acceptance shall not be unreasonably
withheld or delayed).

         

        "Ethanol Offtake
Agreements" means any agreement relating to the sale of ethanol by any
Borrower with a scheduled term in excess of one year and with payments
thereunder expected to be in excess of three million Dollars ($3,000,000),
including each agreement between any Borrower and Kinergy relating to the sale
or marketing of ethanol.

         

        "Eurodollar Loan"
means any Loan bearing interest at a rate determined by reference to the
Eurodollar Rate and the provisions of Article II
(Commitments
and Funding) 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(a)
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 Borrowers' 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.

         

        "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.

         

        
          
            
            

          

          
            Exhibit A
- 28

            
              

            

          

          
            
            

          

        

         

        "Event of Abandonment"
means with respect to any Plant with respect to which any Funding has been made
or is being requested, any of the following shall have occurred: (i) the
abandonment by the applicable Borrower of the development, construction,
operation or maintenance of any such Plant for a period of more than sixty
(60) 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 any such Plant, other than as
the result of a force majeure, Event of Taking  or Casualty Event, for
a period of more than sixty (60) consecutive days, or (iii) any
written acknowledgement by any Borrower of a final decision to take any of the
foregoing actions.

         

        "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 with respect
to which any Funding has been made or is being requested, the Project, any
Equity Interests of Pacific Holding or any Borrower that is the owner of a Plant
with respect to which any Funding has been made or is being requested, or any
other assets thereof.

         

        "Event of Total Loss"
means the occurrence of a Casualty Event affecting all or substantially all of
any Plant with respect to which any Funding has been made or is being requested,
the Project or the assets of Pacific Holding or any Borrower that is the owner
of a Plant with respect to which any Funding has been made or is being
requested.

         

        "Excess Construction Loan
Commitment" means, after the Commercial Operation Date for any Greenfield
Plant, with respect to any such Greenfield Plant, the amount equal to
(x) the Greenfield Plant 1 Aggregate Construction Loan Commitment, the
Greenfield Plant 2 Aggregate Construction Loan Commitment or the Greenfield
Plant 3 Aggregate Construction Loan Commitment, as applicable, minus (y) the
aggregate Construction Loans disbursed for such Greenfield Plant on or prior to
such Commercial Operation Date and minus (z) the
amount set forth in the Construction Budget for such Greenfield Plant to cover
the required funding of fifty percent (50%) of the Debt Service Reserve
Requirement on the Conversion Date.

         

        "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 of the Borrowers
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
- 29

            
              

            

          

          
            
            

          

        

         

        "Extraordinary Proceeds
Account" has the meaning provided in Section 8.01(q)
(Establishment
of Project Accounts).

         

        "Extraordinary Proceeds
Release Notice" means a certificate in substantially the form of Exhibit 8.15,
duly executed by an Authorized Officer of the Borrowers' Agent.

         

        "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.

         

        "Fee Letters" means
(i) that Fee Letter among the Administrative Agent, the Collateral Agent
and the Borrowers, (ii) that Fee Letter among the Administrative Agent, the
Accounts Bank and the Borrowers, and (iii) that Fee Letter among the
Administrative Agent, WestLB and Mizuho Corporate Bank, Ltd., as lead arrangers
and underwriters, and the Borrowers, each dated as of the date hereof, setting
forth certain fees that will, from time to time, become due and payable with
respect to the Loans and to the Agents.

         

        "Fees" means,
collectively, each of the fees payable by the Borrowers for the account of any
Lender or Agent pursuant to Section 3.13
(Fees).

         

        "Final Completion"
means, with respect to each Plant, that each of the following conditions has
been achieved as certified by the Borrowers' Agent and confirmed in writing by
the Independent Engineer in a Final Completion Certificate completed to the
reasonable satisfaction of the Administrative Agent:

         

        
          
            	
                  	
                    (i) 

                  	
                    the
      Commercial Operation Date for such Plant shall have
    occurred;

                  

          

        

         

        
          
            
            

          

          
            Exhibit A
- 30

            
              

            

          

          
            
            

          

        

         

        
          
            	
                  	
                    (ii) 

                  	
                    the
      Independent Engineer shall have confirmed that the final air emissions
      test for such Plant has been satisfactorily
  completed;

                  

          

        

         

        
          
            	
                  	
                    (iii) 

                  	
                    insurance
      required pursuant to Schedule 7.01(h)
      and, with respect to the Borrowers, any Project Document shall be in
      place, as confirmed by the Insurance Consultant;
  and

                  

          

        

         

        
          
            	
                  	
                    (iv) 

                  	
                    all
      construction costs for such Plant shall have been fully paid (other than
      amounts that are subject to a
Contest).

                  

          

        

         

        "Final Completion
Certificate" means a certificate of the Independent Engineer and the
Borrowers' Agent, in substantially the form of Exhibit 7.01(y),
confirming that Final Completion has occurred.

         

        "Final Completion
Date" means, with respect to each Plant, the date on which such Plant has
achieved Final Completion, as certified by the Borrowers' Agent and the
Independent Engineer.

         

        "Final Maturity Date"
means, with respect to the Term Loans the date that occurs eighty-four
(84) months after the Conversion Date.

         

        "Financial Asset" has
the meaning provided in Section 8.17(b) (Representations,
Warranties and Covenants of the Accounts Bank).

         

        "Financial Model"
means the pro forma financial statements and projections of revenue and expenses
and cash flows with respect to the Borrowers and the Project for each of the
calendar years 2007 through 2022, attached hereto as Exhibit 6.01(v),
as the same may be updated by the Borrowers with the prior written approval of
the Administrative Agent.

         

        "Financial Officer"
means, with respect to any Person, the controller, treasurer or chief financial
officer of such Person.

         

        
          
            
            

          

          
            Exhibit A
- 31

            
              

            

          

          
            
            

          

        

         

        "Financing Documents"
means:

         

        
          
            	
                  	
                    (i) 

                  	
                    this
      Agreement;

                  

          

        

         

        
          
            	
                  	
                    (ii) 

                  	
                    the
      Notes;

                  

          

        

         

        
          
            	
                  	
                    (iii) 

                  	
                    the
      Sponsor Support Agreement;

                  

          

        

         

        
          
            	
                  	
                    (iv) 

                  	
                    the
      Security Documents;

                  

          

        

         

        
          
            	
                  	
                    (v) 

                  	
                    the
      Interest Rate Protection
Agreement;

                  

          

        

         

        
          
            	
                  	
                    (vi) 

                  	
                    the
      Fee Letters;

                  

          

        

         

        
          
            	
                  	
                    (vii) 

                  	
                    each
      Blocked Account Agreement;

                  

          

        

         

        
          
            	
                  	
                    (viii) 

                  	
                    the
      other financing and security agreements, documents and instruments
      delivered in connection with this Agreement;
and

                  

          

        

         

        
          
            	
                  	
                    (ix) 

                  	
                    each
      other document designated as a Financing Document by the Borrowers' Agent
      and the Administrative Agent.

                  

          

        

         

        "First Escrow Release
Date" means the date on which the first Funding of Tranche B Construction
Loans is made from the Escrow Account.

         

        "Fiscal Quarter" means
any quarter of a Fiscal Year.

         

        "Fiscal Year" means
any period of twelve (12) consecutive calendar months ending on
December 31.

         

        "Funding" means (a)
with respect to the Tranche A Loans, the incurrence of each Tranche A Loan made
by the Tranche A Lenders on a single date, (b) with respect to the Tranche B
Loans, (i) the release to any Construction Account of Tranche B Construction
Loan funds deposited into or standing to the credit of the Escrow Account on a
single date and (ii) the incurrence of the Tranche B Term Loans on the
Conversion Date, and (c) with respect to the Working Capital Loans, the
incurrence of each Working Capital Loan made by the Working Capital Lenders on a
single date, in each case, as the context may require.  For the
avoidance of doubt, this term Funding does not include the Tranche B Escrow
Disbursement or any other disbursement of Tranche B Loans directly to the
Escrow Account.

         

        
          
            
            

          

          
            Exhibit A
- 32

            
              

            

          

          
            
            

          

        

         

        
          "Funding Date" means,
with respect to each Funding, the date on which (a) with respect to the Tranche
A Construction Loans, funds are disbursed by the Administrative Agent, on behalf
of the Tranche A Lenders, to the Borrowers in accordance with Section 2.06
(Funding
of Loans), (b)
with respect to the Tranche B Construction Loans, funds are released to the
Borrowers from the Escrow Account, on behalf of the Tranche B Lenders, in
accordance with Section 2.06
(Funding
of Loans), (c)
with respect to the Working Capital Loans, funds are disbursed by the
Administrative Agent, on behalf of the Working Capital Lenders, to the Borrower
in accordance with Section 2.06
(Funding
of Loans), and
(d) with respect to the Term Loans, the Term Loans are disbursed in
accordance with Section 2.06
(Funding
of Loans) in each case, as the
context may require.

           

          "Funding Defaults"
means, collectively, any Default related solely to Pacific Holding (and not, for
the avoidance of doubt, in connection with any "Plant" or "Project" with respect
to which no Funding has been made or is being requested) or related to any
Borrower (or its Equity Interests or assets) or any Plant (or any Project
Document or Project Party related to such Plant) with respect to which a Funding
has been made or is being requested, and any Default pursuant to any of Sections 9.01(a)
(Events
of Default - Nonpayment), 9.01(e) (Events
of Default - Project Completion), 9.01(h) (Events
of Default - ERISA Events), 9.01(i) (Events
of Default - Bankruptcy - Insolvency) (other than with
respect to Major Project Parties that are not parties to any Project Document to
which Pacific Holding or any Borrower with respect to whose Plant a Funding has
been made or is being requested (or otherwise related to any such Plant)), 9.01(l) (Events
of Default - Unenforceability of Documentation) and 9.01(q) (Events
of Default - Change of Control).

           

          "Funding Representation and
Warranties" means, collectively, any representation and
warranty (i) related solely to Pacific Holding (and not, for the avoidance
of doubt, in connection with any "Plant" or "Project" with respect to which no
Funding has been made or is being requested), (ii) related to any Borrower
(or its equity interests or assets) or any Plant with respect to which a
Funding, or any issuance of a Letter of Credit, is requested, and (iii) any
representation and warranty made pursuant to any of Sections 5.01
(Organization;
Power and Compliance with Law), 5.02 (Due
Authorization; Non-Contravention), 5.04 (Investment
Company Act), 5.05 (Validity
of Financing Documents), 5.06 (Financial
Information), 5.10 (Sole
Purpose Nature; Business), 5.12 (Collateral), 5.14 (Taxes), 5.16 (ERISA
Plans),
5.18(a) (No
Defaults), 5.20 (Regulations
T, U and X), 5.21 (Accuracy
of Information), 5.22 (Indebtedness), 5.23 (Separateness), 5.24 (Required
LLC Provisions), 5.25 (Subsidiaries), 5.26 (Foreign
Assets Control Regulations, Etc), 5.27 (Employment
Matters), 5.28 (Solvency), 5.29 (Legal
Name and Place of Business), and 5.30 (No
Brokers).

           

          "Funding Notice" means
each request for Funding in the form of Exhibit 2.05-A
or Exhibit 2.05-B,
as applicable, delivered in accordance with Section 2.05
(Notice
of Fundings).

           

          
            
              
              

            

            
              Exhibit A
- 33

              
                

              

            

            
              
              

            

          

           

          "GAAP" means generally
accepted accounting principles in effect from time to time in the United States,
applied on a consistent basis.

           

          "Governmental
Approval" means any authorization, consent, approval, license, lease,
ruling, permit, certification, exemption, filing for registration by or with any
Governmental Authority.

           

          "Governmental Approvals
Update Schedule" means a written notice delivered by the Borrowers' Agent
to the Administrative Agent and the Independent Engineer, and accepted and
agreed to in writing by the Administrative Agent and the Independent Engineer,
setting forth all Necessary Project Approvals applicable to the Borrower or the
Plant identified therein.  Each Governmental Approvals Update Schedule
may include a Part A (for current approvals), a Part B (for deferred approvals)
and a Part C (for exceptions).

           

          "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 one year and with
payments thereunder expected to be in excess of two million Dollars
($2,000,000), including the Corn Procurement and Handling Agreement between
Pacific Holding and Pacific Ag Products, dated on or about the date
hereof.

           

          "Granting Lender" has
the meaning provided in Section 11.03(h)
(Assignments).

           

          "Greenfield Plants"
means, collectively, the Stockton Plant, the Brawley Plant and the Burley Plant
(or, if approved by the Lenders in accordance with the terms hereof, any
Substitute Facility).

           

          "Greenfield Plant 1"
means the first Greenfield Plant with respect to which a Construction Loan
Funding is made.

           

          "Greenfield Plant 1 Aggregate
Construction Loan Commitment" means sixty-nine million two hundred thirty
thousand seven hundred sixty-nine Dollars ($69,230,769.00), as the same may be
reduced in accordance with Section 2.08
(Termination
or Reduction of Commitments).

           

          "Greenfield Plant 1
Construction Loans" means, together, the Greenfield Plant 1
Tranche A Construction Loans and the Greenfield Plant 1 Tranche B
Construction Loans.

           

          "Greenfield Plant 1
Tranche A Construction Loan" has the meaning provided in Section 2.01(d)
(Construction
Loans).

           

          
            
              
              

            

            
              Exhibit A
- 34

              
                

              

            

            
              
              

            

          

           

          "Greenfield Plant 1
Tranche B Construction Loan" has the meaning provided in Section 2.01(d)
(Construction
Loans).

           

          "Greenfield Plant 2"
means the second Greenfield Plant with respect to which a Construction Loan
Funding is made.

           

          "Greenfield Plant 2 Aggregate
Construction Loan Commitment" means sixty-nine million two hundred thirty
thousand seven hundred sixty-nine Dollars ($69,230,769.00), as the same may be
reduced in accordance with Section 2.08
(Termination
or Reduction of Commitments).

           

          "Greenfield Plant 2
Construction Loan" has the meaning provided in Section 2.01(e)
(Construction
Loans).

           

          "Greenfield Plant 3"
means the third Greenfield Plant with respect to which a Construction Loan
Funding is made.

           

          "Greenfield Plant 3 Aggregate
Construction Loan Commitment" means sixty-nine million two hundred thirty
thousand seven hundred sixty-nine Dollars ($69,230,769.00), as the same may be
reduced in accordance with Section 2.08
(Termination
or Reduction of Commitments).

           

          "Greenfield Plant 3
Construction Loan" has the meaning provided in Section 2.01(f)
(Construction
Loans).

           

          "Greenfield Plant Top-Up
Funding" means, with respect to any Greenfield Plant that has achieved
its Commercial Operation Date, a single Construction Loan Funding for such
Greenfield Plant in an aggregate amount not to exceed the Excess Construction
Loan Commitment for such Plant.

           

          "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).

           

          
            
              
              

            

            
              Exhibit A
- 35

              
                

              

            

            
              
              

            

          

           

          "Historical Debt Service
Coverage Ratio" means, as of any Quarterly Payment Date, for the four
(4) Fiscal Quarters immediately preceding (and not including the
then-current Fiscal Quarter) such Quarterly Payment Date (or, if less than four
(4) Fiscal Quarters have elapsed since the Conversion Date, for such number
of full Fiscal Quarters that has elapsed since the Conversion Date), the ratio
of (i) Cash Flow Available for Debt Service during such period to
(ii) Debt Service during such period.

           

          "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);

           

          (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;

           

          
            
              
              

            

            
              Exhibit A
- 36

              
                

              

            

            
              
              

            

          

           

          (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).

           

          "Independent Engineer"
means Luminate, LLC, or any replacement independent engineer appointed by the
Administrative Agent and, so long as no Default or Event of Default has occurred
and is continuing, reasonably acceptable to the Borrower's Agent (which
acceptance shall not be unreasonably withheld or delayed).

           

          "Independent Engineer's
Certificate" means a certificate of the Independent Engineer in
substantially the form of Exhibit 6.05(c).

           

          
            "Independent Manager"
or "Independent
Member" means a Person, who is not at the time of initial appointment as
the Independent Manager or Independent Member or at any time while serving as
the Independent Manager or Independent Member and has not been at any time
during the five (5) years preceding such initial appointment:

             

            
              
                	
                      	
                        (i) 

                      	
                        a
      direct or indirect owner of any Equity Interest in, member (with the
      exception of serving as the Independent Member), officer, employee,
      partner, director, manager (with the exception of serving as the
      Independent Manager) or contractor, bankruptcy trustee, attorney or
      counsel of any member of any Borrower, any Borrower or any Affiliate of
      any of them;

                      

              

            

             

            
              
                
                

              

              
                Exhibit A
- 37

                
                  

                

              

              
                
                

              

            

             

            
              
                	
                      	
                        (ii) 

                      	
                        a
      creditor, customer, supplier, or other person (including each Project
      Party) who derives any of its purchases or revenues from its activities
      with any Borrower, any member of any Borrower or any Affiliate of any of
      them;

                      

              

            

             

            
              
                	
                      	
                        (iii) 

                      	
                        a
      Person controlling or under common control with any Borrower, any member
      of any Borrower or any Affiliate of any of them or any Person excluded
      from serving as Independent Manager or Independent Member under
      clause (i) or (ii) of this
definition;

                      

              

            

             

            
              
                	
                      	
                        (iv) 

                      	
                        a
      member of the immediate family by blood or marriage of any Person excluded
      from being an Independent Manager or Independent Member under
      clause (i) or (ii) of this definition;
  or

                      

              

            

             

            
              
                	
                      	
                        (v) 

                      	
                        a
      Person who received, or a member or employee of a firm or business that
      received, fees or other income from any Borrower or any Affiliate thereof
      in the aggregate in excess of five percent (5%) of the gross income,
      for any applicable year, of such
Person.

                      

              

            

             

            "Information" has the
meaning provided in Section 11.18
(Treatment
of Certain Information; Confidentiality).

             

            "Initial Quarterly Payment
Date" means the first Quarterly Payment Date following the Conversion
Date.

             

            
              "In-Progress Plant 1"
means the first In-Progress Plant with respect to which a Construction Loan
Funding is made.

               

              "In-Progress Plant 1
Aggregate Construction Loan Commitment" means forty-six million one
hundred fifty-three thousand eight hundred forty-six Dollars ($46,153,846.00),
as the same may be reduced in accordance with Section 2.08
(Termination
or Reduction of Commitments).

               

              "In-Progress Plant 1
Construction Loan" has the meaning provided in Section 2.01(b)
(Construction
Loans).

               

              
                
                  
                  

                

                
                  Exhibit A
- 38

                  
                    

                  

                

                
                  
                  

                

              

               

              "In-Progress Plant 2"
means the second In-Progress Plant with respect to which a Construction Loan
Funding is made.

               

              "In-Progress Plant 2
Aggregate Construction Loan Commitment" means forty-six million one
hundred fifty-three thousand eight hundred forty-six Dollars ($46,153,846.00),
as the same may be reduced in accordance with Section 2.08
(Termination
or Reduction of Commitments).

               

              "In-Progress Plant 2
Construction Loans" means, together, the In-Progress Plant 2 Tranche
A Construction Loans and the In-Progress Plant 2 Tranche B
Construction Loans.

               

              "In-Progress Plant 2
Tranche A Construction Loan" has the meaning provided in Section 2.01(c)
(Construction
Loans).

               

              "In-Progress Plant 2
Tranche B Construction Loan" has the meaning provided in Section 2.01(c)
(Construction
Loans).

               

              "In-Progress Plants"
means, collectively, the Madera Plant and the Boardman Plant.

               

              "Insolvency
Proceeding" has the meaning provided in the Intercreditor
Agreement.

               

              "Insurance Consultant"
means Moore-McNeil, LLC, or any replacement insurance consultant appointed by
the Administrative Agent and, so long as no Default or Event of Default has
occurred and is continuing, reasonably acceptable to the Borrower's Agent (which
acceptance shall not be unreasonably withheld or delayed).

               

              "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
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).

               

              "Insurance and Casualty
Proceeds Accounts" means, collectively, the Madera Insurance and Casualty
Proceeds Account, the Boardman Insurance and Casualty Proceeds Account,
the  Stockton Insurance and Casualty Proceeds Account, the Brawley
Insurance and Casualty Proceeds Account, and the Burley Insurance and Casualty
Proceeds Account.

               

              "Insurance and Condemnation
Proceeds Request Certificate" means a certificate, in substantially the
form of Exhibit 8.14,
executed by an Authorized Officer of the Borrowers' Agent and setting forth
proposed instructions for the transfer or withdrawal of Insurance Proceeds or
Condemnation Proceeds, as the case may be, from an Insurance and Condemnation
Proceeds Account.

               

              
                
                  
                  

                

                
                  Exhibit A
- 39

                  
                    

                  

                

                
                  
                  

                

              

               

              "Interest Payment
Date" means, with respect to any Loan without duplication, the last day
of each Interest Period applicable to each Funding of which such Loan is a
part.

               

              "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 2.06
(Funding
of Loans) or the date on which
each successive interest period for each such Eurodollar Loan is determined
pursuant to Section 3.05
(Interest
Rates)
and ending on (and including) the day that numerically corresponds to such date
one (1), two (2), three (3)  or six (6) months thereafter, in either case
as the Borrowers may select in the relevant Funding Notice or Interest Period
Notice; 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) the Borrowers may not select any
Interest Period that ends after any Quarterly Payment Date unless, after giving
effect to such selection, the aggregate outstanding principal amount of
Eurodollar Loans having Interest Periods which end on or prior to such Quarterly
Payment Date shall be at least equal to the aggregate principal amount of
Eurodollar Loans due and payable on or prior to such Quarterly 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 3.05,
executed by an Authorized Officer of the Borrowers' Agent.

               

              
                "Interest Rate Protection
Agreement" means each interest rate swap, collar, put, or cap, or other
interest rate protection arrangement, with a Qualified Counterparty, in each
such case that is reasonably satisfactory to the Administrative Agent and is
entered into in accordance with Section 7.01(u)
(Affirmative
Covenants - Interest Rate Protection Agreement).

                 

                "Interest Rate Protection
Provider" means a Qualified Counterparty that is party to an Interest
Rate Protection Agreement.

                 

                "Inventory" means
"inventory", as that term is defined in the UCC, now or hereafter owned by any
Borrower, including all products, goods, materials and supplies produced,
purchased or acquired by the such Borrower for the purpose of sale or use in
such Borrower's operations in the ordinary course of business.

                 

                "Issuance Request"
means has the meaning provided in Section 2.04(b)
(Letters
of Credit).

                 

                "Issuing Bank" means
WestLB.

                 

                "Kinergy" means
Kinergy Marketing, LLC, an Oregon limited liability company.

                 

                
                  
                    
                    

                  

                  
                    Exhibit A
- 40

                    
                      

                    

                  

                  
                    
                    

                  

                

                 

                "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.

                 

                "LC Cap" means, with
respect to each Plant, two million Dollars ($2,000,000).

                 

                "Lead Arrangers"
means, collectively, WestLB in its capacity as sole lead bookrunner and lead
arranger, Mizuho Corporate Bank, Ltd. in its capacity as co-syndication agent
and lead arranger, CIT Capital USA Inc., in its capacity as co-syndication agent
and lead arranger, Cooperatieve Centrale Raiffeisen-Boerenleenbank BA.,
"Rabobank Nederland", New York Branch, in its capacity as co-documentation agent
and lead arranger, and Banco Santander Central Hispano S.A, New York Branch, in
its capacity as co-documentation agent and lead arranger.

                 

                
                  "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).

                   

                  "Letter of Credit"
means each letter of credit issued by the Issuing Bank pursuant to Section 2.04
(Letters
of Credit).

                   

                  "Letter of Credit
Availability Fee" has the meaning provided in Section 3.13(b)
(Fees).

                   

                  "Letter of Credit Fronting
Fee" has the meaning provided in Section 3.13(b)
(Fees).

                   

                  
                    
                      
                      

                    

                    
                      Exhibit A
- 41

                      
                        

                      

                    

                    
                      
                      

                    

                  

                   

                  "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.

                   

                  "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.

                   

                  
                    "Line Item" means a
line item of cost or expense set forth in any Construction Budget.

                     

                    
                      "Loan Parties" means,
collectively, each Borrower, Pledgor, Pacific Ethanol (until the termination of
the Sponsor Support Agreement), and each and any Affiliates thereof that are
party to any Financing Document.

                       

                      "Loans" means,
collectively, the Construction Loans, the Term Loans and the Working Capital
Loans.

                       

                      
                        
                          
                          

                        

                        
                          Exhibit A
- 42

                          
                            

                          

                        

                        
                          
                          

                        

                      

                       

                      "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, in form and substance
reasonably satisfactory to the Lenders and the Collateral Agent, 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.

                       

                      "Madera DG Agreement"
the WDG Marketing and Services Agreement, dated March 4, 2005, among Madera,
Phoenix Bio Industries and Western Milling, LLC.

                       

                      "Madera Insurance and
Condemnation Proceeds Account" has the meaning provided in Section 8.01(l)
(Establishment
of Project Accounts).

                       

                      "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, in form and substance
reasonably satisfactory to the Lenders and the Collateral Agent, dated on or
about the date hereof, among, Pacific Holding, Madera and the Collateral Agent,
pursuant to which Pacific Holding pledges one hundred percent (100%) of the
Equity Interests in Madera to the Collateral Agent.

                       

                      "Madera Security
Agreement" means the Assignment and Security Agreement, in form and
substance reasonably satisfactory to the Lenders and the Collateral Agent, dated
on or about the date hereof, made by Madera in favor of the Collateral
Agent.

                       

                      "Madera Warranty
Account" has the meaning provided in Section 8.01(r)
(Establishment
of Project Accounts).

                       

                      
                        
                          
                          

                        

                        
                          Exhibit A
- 43

                          
                            

                          

                        

                        
                          
                          

                        

                      

                       

                      "Maintenance Capital Expense
Account" has the meaning set forth in Section 8.01(h)
(Establishment
of Project Accounts).

                       

                      "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, with respect to any Plant with respect to which a Funding has been made
or is being requested, each of Parsons (until the Conversion Date), the
Construction Manager (until the Conversion Date), Delta-T, each Offtaker, each
Corn Supplier, the Operator, the landlord under each Lease, the guarantor under
any Project Document Guarantee 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 Borrowers' Agent.

                       

                      "Mandatory Prepayment"
means a prepayment in accordance with Section 3.10
(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 on (i) the
business, assets, property, condition (financial or otherwise), or construction
or operations (as applicable) of the Borrowers or the Project, taken as a whole,
(ii) the ability of Pacific Holding or any Borrower that is the owner of a
Plant with respect to which any Funding has been made or is being requested, or
any other Loan Party or any Project Party to perform its material obligations
under any Transaction Document (other than Project Documents relating to Plants
with respect to which no Funding has been made and no Funding is being
requested) 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 pursuant to the Security Documents or (iv) the
rights or remedies of any Senior Secured Party under any Financing
Document.  For the avoidance of doubt, any reference to a Material
Adverse Effect with respect to a Borrower or a Plant shall, with respect to
clause (i) or (ii) of this definition, as the case may be, be deemed to refer to
such Borrower or Plant on an individual basis (and not to the Borrowers or the
Project, taken as a whole or to any other Borrower or Plant on an individual
basis).

                       

                      
                        
                          
                          

                        

                        
                          Exhibit A
- 44

                          
                            

                          

                        

                        
                          
                          

                        

                      

                       

                      "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,
as the context may require, (a) with respect to the Construction Loans, the
Construction Loan Maturity Date, (b) with respect to the Term Loans, the
Final Maturity Date, and (c) with respect to the Working Capital Loans, the
Working Capital Maturity Date.

                       

                      "Maximum Available
Amount" means, with respect to any Letter of Credit at any time, the
maximum amount the beneficiary of such Letter of Credit may draw thereunder at
such time, as such amount may be reduced from time to time pursuant to the terms
of such Letter of Credit.

                       

                      "Maximum Rate" has the
meaning provided in Section 11.10
(Interest
Rate Limitation).

                       

                      "Minimum Performance
Criteria" means, with respect to each Plant, that such Plant achieved the
following performance levels (as demonstrated in a Performance Test, completed
in accordance with the Approved Performance Test Protocols, while meeting the
permitted air emissions requirements as specified in the Approved Performance
Test Protocols):

                       

                      (a)
denatured fuel ethanol production rate of (i) in the case of each of the Madera
Plant and the Boardman Plant,  at least 35 million gallons per year
and (ii) in the case of each Greenfield Plant, at least 50 million gallons per
year, in each case based on 351 days of operation per year and on ethanol
quality specifications set forth in the Approved Performance Test
Protocols;

                       

                      (b)
undenatured fuel ethanol yield, process electrical consumption rate and process
natural gas consumption rate that would result in an aggregate reduction (if
any) of the Term Loan Commitment for such Plant pursuant to Section 2.08(e)
(Termination
or Reduction of Commitments) solely due to such
performance levels of not more than (i) in the case of the Madera Plant, three
million seven hundred fourteen thousand two hundred ninety-eight Dollars
($3,714,298), (ii) in the case of the Boardman Plant, three million seven
hundred seventy-nine thousand twenty-six Dollars ($3,779,026), (iii) in the case
of the Stockton Plant, six million six hundred sixty-eight thousand six hundred
eight Dollars ($6,668,608), (iv) in the case of the Brawley Plant, six million
six hundred eighty-eight thousand eight hundred ninety-nine Dollars ($6,688,899)
and (v) in the case of the Burley Plant, five million six hundred thirty-two
thousand seven hundred twenty-nine Dollars ($5,632,729).

                       

                      
                        
                          
                          

                        

                        
                          Exhibit A
- 45

                          
                            

                          

                        

                        
                          
                          

                        

                      

                       

                      "Monthly Date" means
the last Business Day of each calendar month.

                       

                      "Monthly Progress
Report" means, with respect to each Plant, a monthly report for such
Plant in substantially the form of Exhibit
7.03(g).

                       

                      "Moody's" means
Moody's Investors Service Inc., and any successor thereto that is a nationally
recognized rating agency.

                       

                      "Mortgaged Property"
means all real property right, title and interest of each Borrower that is
subject to the relevant 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 (when entered into), the Brawley Deed of Trust (when entered
into), and the Burley Deed of Trust (when entered into).

                       

                      "Multiemployer Plan"
means a Plan that is a "multiemployer plan" as defined in
Section 4001(a)(3) of ERISA.

                       

                      "Necessary Project
Approvals" has the meaning set forth in Section 5.03(a)
(Governmental
Approvals).

                       

                      "Net Swap Payment"
means, with respect to any Interest Rate Protection Agreement and for any
period, all scheduled Obligations due and payable by any Borrower under such
Interest Rate Protection Agreement during such period, after giving effect to
any netting applicable thereto.

                       

                      "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 also a Loan Party, a Project Party or any
Affiliate or Subsidiary thereof or (b) has sold a participation in the Loan
held by it to any such Person.

                       

                      
                        
                          
                          

                        

                        
                          Exhibit A
- 46

                          
                            

                          

                        

                        
                          
                          

                        

                      

                       

                      "Non-U.S. Lender"
has the meaning set forth in Section 4.07(e) (Taxes -
Foreign Lenders).

                       

                      "Notes" means the
Construction Notes, the Term Notes and the Working Capital 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 2.07, as
they may be amended, restated, supplemented or otherwise modified from time to
time.

                       

                      "Notice of Suspension"
has the meaning provided in Section 8.26
(Notices
of Suspension of Accounts).

                       

                      "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, 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 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 Account"
has the meaning provided in Section 8.01(g)
(Establishment
of Project Accounts).

                       

                      "Operating Account Withdrawal
Certificate" means a certificate in substantially the form of Exhibit 8.09,
duly executed by an Authorized Officer of the Borrowers' Agent, directing the
transfer or withdrawal of funds from the Operating Account.

                       

                      "Operating Budget" has
the meaning set forth in Section 7.01(j)
(Affirmative
Covenants - Operating Budgets).

                       

                      "Operating Budget
Category" means, at any time with respect to each Operating Budget, each
line item set forth in such Operating Budget in effect at such
time.

                       

                      
                        
                          
                          

                        

                        
                          Exhibit A
- 47

                          
                            

                          

                        

                        
                          
                          

                        

                         

                      

                      "Operating Statement"
means an operating statement with respect to each Plant that has achieved its
Commercial Operation Date, in substantially the form of Exhibit 7.03(p).

                       

                      "Operation and Maintenance
Expenses" means (with respect to each Plant that has achieved its
Commercial Operation Date), for any period on or after the Commercial Operation
Date for each such Plant, the sum without duplication of all (i) reasonable
and necessary expenses of administering, managing and operating, and generating
Products for sale from, the Project and maintaining it in good repair and
operating condition, (ii)  costs associated with the supply and
transportation of all corn, natural gas, electricity and other supplies and raw
materials to the Project and distribution and sale of Products from the Project
that any Borrower is obligated to pay, (iii) all reasonable and necessary
insurance costs (other than insurance premiums that are paid as Project Costs),
(iv) property, sales and franchise taxes to the extent that any Borrower is
liable to pay such taxes to the taxing authority (other than taxes imposed on or
measured by income or receipts) to which the Project, may be subject (or payment
in lieu of such taxes to which the Project may be subject), (v) reasonable
and necessary costs and fees incurred in connection with obtaining and
maintaining in effect Necessary Project Approvals for each Plant on or after the
Commercial Operation Date for such Plant, (vi) reasonable and arm's-length
legal, accounting and other professional fees attendant to any of the foregoing
items during such period, (vii) the reasonable costs of administration and
enforcement of the Transaction Documents, (viii) costs incurred pursuant to
the Permitted Commodity Hedging Arrangements, and (ix) all other costs and
expenses included in the then-current Operating Budget for such
Plant.  In no event shall Project Costs or Maintenance Capital
Expenses be considered Operation and Maintenance Expenses.

                       

                      "Operator" means the
Pledgor or any successor pursuant to an O&M Agreement (or any replacement
thereof).

                       

                      "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.

                       

                      "Pacific Ag Products"
means Pacific Ag Products LLC, a California limited liability
company.

                       

                      "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.

                       

                      
                        
                          
                          

                        

                        
                          Exhibit A
- 48

                          
                            

                          

                        

                        
                          
                          

                        

                      

                       

                      "Pacific Holding" has
the meaning set forth in the Preamble.

                       

                      "Pacific Holding Pledge
Agreement" means the Pledge and Security Agreement, in form and substance
reasonably satisfactory to the Lenders and the Collateral Agent, dated on or
about the date hereof, among Pacific Holding, Pledgor and the Collateral Agent,
pursuant to which Pledgor pledges one hundred percent (100%) of the Equity
Interests in Pacific Holding to the Collateral Agent.

                       

                      "Pacific Holding Security
Agreement" means the Assignment and Security Agreement, in form and
substance reasonably satisfactory to the Lenders and the Collateral Agent, dated
on or about the date hereof, made by Pacific Holding in favor of the Collateral
Agent.

                       

                      "Parsons" means
Parsons RCIE Inc., a corporation organized under the laws of the State of
Washington.

                       

                      "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.

                       

                      "Payment Bond" means
any payment bond provided for the benefit of any Borrower under any Construction
Contract.

                       

                      "PBGC" means the
Pension Benefit Guaranty Corporation and any entity succeeding to any or all of
its functions under ERISA.

                       

                      "Performance Bond"
means any performance bond provided for the benefit of any Borrower under any
Construction Contract.

                       

                      "Performance
Guarantee" means the guaranteed performance levels set forth on Schedule 7.01(k)-A.

                       

                      "Performance Test"
means, with respect to each Plant, any performance test conducted by the
Borrowers to determine satisfaction of the Minimum Performance Criteria and the
Performance Guarantees.

                       

                      
                        
                          
                          

                        

                        
                          Exhibit A
- 49

                          
                            

                          

                        

                        
                          
                          

                        

                      

                       

                      "Performance Test
Report" has the meaning provided in Section 7.01(k)
(Affirmative
Covenants - Performance Tests).

                       

                      "Permitted Commodity Hedging
Arrangements" means those Commodity Hedging Arrangements entered into by
the Borrowers in accordance with Section 7.02(u)
(Negative
Covenants - Commodity Hedging Arrangements).

                       

                      "Permitted
Indebtedness" means Indebtedness identified in Section 7.02(a)
(Negative
Covenants - Restrictions on Indebtedness of the Borrowers).

                       

                      "Permitted Liens"
means Liens identified in Section 7.02(b)
(Negative
Covenants - Liens).

                       

                      "Permitted Operating Budget
Deviation Levels" means, with respect to Operation and Maintenance
Expenses (other than Operation and Maintenance Expenses for the cost of corn,
natural gas, electricity, insurance premiums and Borrower Taxes) and with
respect to Maintenance Capital Expenses, (a) (i) with respect to each
Plant, fifteen percent (15%) of the amount projected for such expenses in the
then-current Operating Budget for such Plant and (ii) for the Project, ten
percent (10%) the amount projected for such expenses in the then-current
Operating Budget for the Project; provided, that in the
case of this clause (a),
Operating Budget line items for annual expenses that are paid periodically (for
example, insurance premiums) shall be treated on an annualized basis for the
purposes of determining the amount of such permitted deviation);
(b) increased costs that are paid for with documented voluntary equity
contributions made to the Borrowers for the purpose of paying such increased
costs, which may be paid without regard to any other restrictions in this
definition of Permitted Operating Budget Deviation Levels; and (c) in the
event that ethanol production levels for any Fiscal Quarter for any Plant or the
Project, as reported in an Operating Statement delivered pursuant to Section 7.03(p)
(Reporting
Requirements - Operating Statements), exceed the amounts projected in the
then-current Operating Budgets for such Plant or the Project, as the case may
be, for such Fiscal Quarter, by a variation greater than three percent (3%),
then the permitted deviations for the immediately succeeding Fiscal Quarter
shall be increased or decreased, as the case may be, in a percentage equal to
the percentage increase in such ethanol production levels.

                       

                      "Permitted Tax
Distribution" means, with respect to any distributee that is required to
pay tax as a result of its direct or indirect ownership of the Borrowers, an
amount equal to (a) the Effective Tax Rate at such time multiplied by (b) such
distributee's estimated share of the taxable income of Pacific Holding and the
other Borrowers (after netting or otherwise taking account of a distributee's
shares of the income, loss, deduction and credit associated with the
distributee's interest in the Borrowers) that the distributee is reasonably
expected to have to report for income tax purposes for the Fiscal Quarter
distributed to the extent necessary to fund a distributee's timely payment to a
Governmental Authority of tax liability (including estimated payments thereof)
and subject to correction as described below.  "Effective Tax Rate"
means, as of any date of calculation, a percentage equal to the sum of (x) such
distributee's then-current federal marginal income tax rate plus (y) such
distributee's then-current applicable state marginal income tax rate, but only
to the extent of the blended rate that would have applied to such income if each
state in which a Borrower was located had imposed its income tax on the taxable
earnings of that Borrower.  Permitted Tax Distributions as estimated
for purposes of a Quarterly Payment Date shall be subject to later correction to
reflect amounts as actually reported on an income tax return by a distributee
for federal and state income tax purposes.  Thus, on any Quarterly
Payment Date, the Permitted Tax Distribution means the amount calculated as the
product of (a) and (b), above, adjusted by the difference, if any, between the
Permitted Tax Distribution for the preceding Quarterly Payment Date as estimated
for such date and the Permitted Tax Distribution for that preceding Quarterly
Payment Date as finally determined.

                       

                      
                        
                          
                          

                        

                        
                          Exhibit A
- 50

                          
                            

                          

                        

                        
                          
                          

                        

                      

                       

                      "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.

                       

                      "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 and the Greenfield
Plants.

                       

                      "Pledge Agreements"
means, collectively, the Madera Pledge Agreement, the Boardman Pledge Agreement,
the Stockton Pledge Agreement (when entered into), the Brawley Pledge Agreement
(when entered into), the Burley Pledge Agreement (when entered into) and the
Pacific Holding Pledge Agreement.

                       

                      "Pledgor" means
Pacific Ethanol California, Inc. a California corporation.

                       

                      "Prepayment Holding
Account" has the meaning set forth in Section 8.01(k)
(Establishment
of Project Accounts).

                       

                      "Primary Swap
Obligations" means, with respect to any Interest Rate Protection
Agreement, all scheduled obligations due and payable by any Person party to such
Interest Rate Protection Agreement (after giving effect to any netting
applicable thereto) and all payments of Swap Termination Value due and payable
by any Person party to such Interest Rate Protection Agreement, but excluding
any amounts owed in respect of Taxes, expenses and indemnification obligation
which do not constitute payments of Swap Termination Value.

                       

                      "Priority Subordinated
Loans" means Subordinated Loans up to an initial aggregate principal
amount of fifty million Dollars ($50,000,000).

                       

                      "Process Agent" means
any Person appointed as agent by any Borrower or any Project Party, as required
under the Financing Documents, to receive on behalf of itself and its property
services of copies of summons and complaint or any other process which may be
served in connection with any action or proceeding before any court arising out
of or relating to this Agreement or any other Financing Document to which it is
a party, including CT Corporation System.

                       

                      "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.

                       

                      
                        
                          
                          

                        

                        
                          Exhibit A
- 51

                          
                            

                          

                        

                        
                          
                          

                        

                         

                      

                      "Project" means, at
all times, each Plant with respect to which a Funding has been made or is being
requested 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"
means the Escrow Account, the Construction Accounts, Revenue Account, Operating
Account, Prepayment Holding Account, Working Capital Reserve Account,
Maintenance Capital Expense Account, Debt Service Reserve Account, Insurance and
Condemnation Proceeds Accounts, Extraordinary Proceeds Account,
and  Warranty Accounts, including any sub-account within such
accounts.

                       

                      "Project Company Subordinated
Debt" means unsecured subordinated Indebtedness incurred or to be
incurred by any of the Borrowers on terms and conditions satisfactory to the
Administrative Agent in its sole discretion, or otherwise reasonably
satisfactory to the Required Lenders, and in any such case subject to the
maximum amount set forth in Section 7.02(a)(vii)
(Negative
Covenants - Restrictions on Indebtedness of the Borrowers).

                       

                      "Project Completion
Deficiency" has the meaning provided in the Sponsor Support
Agreement.

                       

                      "Project Costs" means,
collectively, the Stockton Project Costs, the Brawley Project Costs, and the
Burley Project Costs.

                       

                      "Project Document Approval
Level" means (i) in the case of any Project Document entered into on
or before the Closing Date and delivered pursuant to Section 6.01(b)(i)
(Conditions
to Closing - Delivery of Project Documents) and any other
Project Document entered into after the Closing Date in the form of a comparable
existing Project Document (in each such case together with any amendment or
modification thereto that is in the form of a comparable existing Project
Document), such Project Document, amendment or modification (and, in any event,
any immaterial amendment or modification to any Project Document) shall be
deemed to be approved, (ii) in the case of any Project Document or
amendment or modification thereto entered into after the Closing Date that
deviates from the form of a comparable existing Project Document, any material
deviations (or, if no such comparable Project Document exists, the agreement
itself) will require the approval of the Administrative Agent (in consultation
with the Independent Engineer) and (iii) in the case of any Project
Document entered into after the Closing Date with a counterparty other than an
existing Project Party on the Closing Date, such counterparty shall (A) be
subject to the approval requirements of Schedule 6.02(e)(i)
or (B) otherwise be approved by the Required Lenders.

                       

                      
                        
                          
                          

                        

                        
                          Exhibit A
- 52

                          
                            

                          

                        

                        
                          
                          

                        

                      

                       

                      "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 Documents"
means:

                       

                      
                        
                          	
                                	
                                  (i) 

                                	
                                  the
      Construction Contracts;

                                

                        

                      

                       

                      
                        
                          	
                                	
                                  (ii) 

                                	
                                  the
      Leases;

                                

                        

                      

                       

                      
                        
                          	
                                	
                                  (iii) 

                                	
                                  the
      Grain Supply Agreements;

                                

                        

                      

                       

                      
                        
                          	
                                	
                                  (iv) 

                                	
                                  the
      Ethanol Offtake Agreements;

                                

                        

                      

                       

                      
                        
                          	
                                	
                                  (v) 

                                	
                                  the
      DG Offtake Agreements;

                                

                        

                      

                       

                      
                        
                          	
                                	
                                  (vi) 

                                	
                                  the
      O&M Agreements;

                                

                        

                      

                       

                      
                        
                          	
                                	
                                  (vii) 

                                	
                                  the
      Borrower LLC Agreements;

                                

                        

                      

                       

                      
                        
                          	
                                	
                                  (viii) 

                                	
                                  the
      Project Document Guarantees;

                                

                        

                      

                       

                      
                        
                          	
                                	
                                  (ix) 

                                	
                                  any
      other documents designated as a Project Document by the Borrowers' Agent
      and the Administrative Agent;

                                

                        

                      

                       

                      
                        
                          	
                                	
                                  (x) 

                                	
                                  each
      Additional Project Document;
and

                                

                        

                      

                       

                      
                        
                          	
                                	
                                  (xi) 

                                	
                                  any
      replacement agreement for any of such
  agreements.

                                

                        

                      

                       

                      "Project Document Termination
Payments" means all 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.

                       

                      "Project Party" means
each Person (other than the Borrowers) who is a party to a Project
Document.

                       

                      
                        
                          
                          

                        

                        
                          Exhibit A
- 53

                          
                            

                          

                        

                        
                          
                          

                        

                      

                       

                      "Prospective Debt Service
Coverage Ratio" means, for any Quarterly Payment Date, for the Fiscal
Quarter including such Quarterly Payment Date and the three (3) Fiscal Quarters
immediately following such Quarterly Payment Date, the ratio of (i) Cash
Flow Available for Debt Service projected for such period to (ii) Debt
Service projected for such period, in each case based on the then-current
Operating Budget approved in accordance with Section 7.01(j)
(Affirmative
Covenants - Operating Budget), as the same has
been updated (if necessary) to reflect the then-current projections for
commodity prices, and approved by the Administrative Agent, acting
reasonably.

                       

                      "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.

                       

                      "Qualified
Counterparty" means any of the following:  (i) any Person
who is a Lender, the Administrative Agent, or the Collateral Agent on the date
the relevant Interest Rate Protection Agreement is entered into or (ii) any
Affiliate of any Person listed in clause (i).

                       

                      "Quarterly Payment
Date" means each of March 31, June 30, September 30 and
December 31.

                       

                      "Quarterly Period"
means each three (3) month period beginning on (and including) the day
immediately following a Quarterly Payment Date and ending on (and including) the
next Quarterly Payment Date.

                       

                      "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.

                       

                      "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.

                       

                      
                        
                          
                          

                        

                        
                          Exhibit A
- 54

                          
                            

                          

                        

                        
                          
                          

                        

                      

                       

                      "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.

                       

                      "Required Cash Sweep"
means each mandatory prepayment of the Loans made pursuant to Section 3.10(b)(i)
(Mandatory
Prepayment).

                       

                      "Required Equity
Contributions" means, collectively, the Stockton Required Equity
Contribution, the Brawley Required Equity Contribution and the Burley Required
Equity Contribution.

                       

                      "Required Lenders"
means (a) at any time prior to the Conversion Date, Lenders (excluding all
Non-Voting Lenders) holding in excess of fifty percent (50.00%) of the
Construction Loan Commitments and the Working Capital Loan Commitments
(excluding the Construction Loan Commitments and the Working Capital Loan
Commitments of all Non-Voting Lenders) and (b) at any time after the
Conversion Date, 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 Working Capital Loan Commitment (excluding the principal
amounts of any Loans made by, and any Working Capital Loan Commitments
of,  any Non-Voting Lenders).

                       

                      "Required LLC
Provisions" has the meaning provided in Section 5.24
(Required
LLC Provisions).

                       

                      "Restoration or Replacement
Plan" means a plan and time schedule, reasonably satisfactory to the
Administrative Agent (in the case of amounts less than or equal to five million
Dollars ($5,000,000) arising from any one claim or any series of claims relating
to the same occurrence with respect to the same Plant) or the Required Lenders
(in the case of amounts greater than five million Dollars ($5,000,000) arising
from any one claim or any series of claims relating to the same occurrence with
respect to the same Plant), and in either such case reasonably satisfactory to
the Independent Engineer, for the application of Insurance Proceeds or
Condemnation Proceeds arising from any Casualty Event or Event of Taking, as the
case may be, and any other funds available to the Borrowers with which to
restore or replace any Plant (or any portion thereof) affected by such Casualty
Event or Event of Taking, as the case may be.

                       

                      
                        
                          
                          

                        

                        
                          Exhibit A
- 55

                          
                            

                          

                        

                        
                          
                          

                        

                      

                       

                      "Restricted Payment
Certificate" means a certificate in substantially the form of Exhibit 7.02(s),
duly executed by an Authorized Officer of the Borrowers' Agent.

                       

                      "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, (b) any payment in respect to
Subordinated Debt Obligations (other than the Current Priority Subordinated
Interest), and (c) 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 (provided that (i) payments made under the Affiliated
Project Documents when due and payable in accordance with the terms thereof and
the terms of the Financing Documents, (ii) any Permitted Tax Distributions,
(iii) any payment made to Pacific Ethanol pursuant to Section 3.01(c)
(Sponsor's Warranty
Undertaking) or 4.02 (Adjustments to Warranty Funding Cap
and Sponsor Funding Cap) of the Sponsor Support Agreement and
(iv) any Sponsor Support Reimbursement Funding, any Sponsor Support
Reimbursement, or any Buy-Down L.D. Reimbursement, shall each not constitute
Restricted Payments).

                       

                      "Revenue Account" has
the meaning set forth in Section 8.01(f)
(Establishment
of Project Accounts).

                       

                      "Revenue Account Withdrawal
Certificate" means a certificate in substantially the form of Exhibit 8.08-A
(prior to the Conversion Date) or Exhibit 8.08-B
(on and after the Conversion Date), in each such case duly executed by an
Authorized Officer of the Borrowers' Agent, directing the transfer or withdrawal
of funds from the Revenue Account.

                       

                      "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.

                       

                      "Schedule of Values"
means, with respect to each Plant, any "schedule of values" provided in any
Construction Contract for such Plant.

                       

                      "Security" means the
security created in favor of the Collateral Agent pursuant to the Security
Documents.

                       

                      "Security Agreements"
means, collectively, the Madera Security Agreement, the Boardman Security
Agreement, the Stockton Security Agreement (when entered into), the Brawley
Security Agreement (when entered into), the Burley Security Agreement (when
entered into) and the Pacific Holding Security Agreement.

                       

                      
                        
                          
                          

                        

                        
                          Exhibit A
- 56

                          
                            

                          

                        

                        
                          
                          

                        

                      

                       

                      "Security Documents"
means:

                       

                      
                        
                          	
                                	
                                  (i) 

                                	
                                  each
      Mortgage;

                                

                        

                      

                       

                      
                        
                          	
                                	
                                  (ii) 

                                	
                                  this
      Agreement (to the extent that it relates to the Project
      Accounts);

                                

                        

                      

                       

                      
                        
                          	
                                	
                                  (iii) 

                                	
                                  the
      Consents;

                                

                        

                      

                       

                      
                        
                          	
                                	
                                  (iv) 

                                	
                                  the
      Pledge Agreements;

                                

                        

                      

                       

                      
                        
                          	
                                	
                                  (v) 

                                	
                                  the
      Security Agreements;

                                

                        

                      

                       

                      
                        
                          	
                                	
                                  (vi) 

                                	
                                  any
      other document designated as a Security Document by the Borrowers' Agent
      and the Administrative Agent;
and

                                

                        

                      

                       

                      
                        
                          	
                                	
                                  (vii) 

                                	
                                  any
      fixture filings, financing statements, notices, authorization letters, or
      other certificates filed, recorded or delivered in connection with the
      foregoing.

                                

                        

                      

                       

                      "Senior Secured
Parties" means the Lenders, the Agents, any Interest Rate Protection
Provider, 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)
with respect to such Plant (as such Schedule may be updated with the prior
written approval of the Administrative Agent).

                       

                      "Solvent" means, with
respect to any Person, that as of the date of determination both (i)
(A) the then fair saleable value of the property of such Person is
(y) greater than the total amount of liabilities (including Contingent
Liabilities but excluding amounts payable under intercompany loans or promissory
notes) of such Person and (z) not less than the amount that will be
required to pay the probable liabilities on such Person's then existing debts as
they become absolute and matured considering all financing alternatives and
potential asset sales reasonably available to such Person; (B) such
Person's capital is not unreasonably small in relation to its business or any
contemplated or undertaken transaction; and (C) such Person does not intend
to incur, or reasonably believe that it will incur, debts beyond its ability to
pay such debts as they become due; and (ii) such Person is "solvent" within
the meaning given that term and similar terms under applicable Laws relating to
fraudulent transfers and conveyances.  For purposes of this
definition, the amount of any Contingent Liability at any time shall be computed
as the amount that, in light of all of the facts and circumstances existing at
such time, represents the amount that can reasonably be expected to become an
actual or matured liability.

                       

                      
                        
                          
                          

                        

                        
                          Exhibit A
- 57

                          
                            

                          

                        

                        
                          
                          

                        

                      

                       

                      "Sponsor Support
Agreement" means the Sponsor Support Agreement, dated on or about the
date hereof, in form and substance reasonably satisfactory to the Lenders,
pursuant to which Pacific Ethanol agrees to provide support for the Project on
the terms and conditions set forth therein.

                       

                      "Sponsor Support
Reimbursement Funding" means any Funding of Construction Loans for a
Greenfield Plant that is applied to reimburse Pacific Ethanol for payments made
under the Sponsor Support Agreement, as contemplated by Section 2.04(g)
(Sponsor's
Deficiency Funding Obligation) of the Sponsor
Support Agreement.

                       

                      "Sponsor Support
Reimbursements" means any reimbursements for Sponsor Deficiency Payments
and/or Sponsor Warranty Payments (each as defined in the Sponsor Support
Agreement) that Pacific Ethanol is entitled to receive pursuant to Section 2.04(g)
(Sponsor's
Deficiency Funding Obligation), Section 4.02 (Adjustments
to Warranty Funding Cap and Sponsor Funding Cap) and Section 3.01(c)
(Sponsor's
Warranty Undertaking) of the Sponsor
Support Agreement.

                       

                      "SPV" has the meaning
provided in Section 11.03(h)
(Assignments).

                       

                      "Stated Amount" has
the meaning specified for such term in any Letter of Credit or Debt Service
Reserve Letter of Credit, as the case may be.

                       

                      "Stockton" has the
meaning set forth in the Preamble.

                       

                      "Stockton Construction
Account" has the meaning set forth in Section 8.01(c)
(Establishment
of Project Accounts).

                       

                      "Stockton Construction
Budget" means the budget attached hereto as Schedule 7.02(t)
that sets forth all categories of costs and expenses required in connection with
the development, construction, start-up, and testing of the Stockton Plant,
including all construction costs and non-construction costs, all costs under the
Stockton Construction Contract, all interest, taxes and other carrying costs
related to the Construction Loans for the Stockton Plant, and costs related to
the construction of the facilities described under the Project Documents
relating to the Stockton Plant, as updated from time to time in accordance with
Section 6.04(h)
(Conditions
to First Funding for Each Greenfield Plant –Construction Schedule and Updated
Budget) and
Section 7.02(t) (Negative
Covenants - Construction Budget).

                       

                      
                        
                          
                          

                        

                        
                          Exhibit A
- 58

                          
                            

                          

                        

                        
                          
                          

                        

                      

                       

                      "Stockton Construction
Withdrawal Certificate" means a certificate in substantially the form of
Exhibit 8.05,
duly executed by an Authorized Officer of the Borrowers' Agent, directing the
transfer or withdrawal of funds from the Stockton Construction
Account.

                       

                      "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 (or
with changes agreed to by the Borrowers, the Administrative Agent and the
Collateral Agent, in each case acting reasonably), to be made by Stockton to
Stewart Title Guaranty Company, as trustee, for the benefit of the Collateral
Agent, as the beneficiary.

                       

                      "Stockton Equity
Contributions" means the aggregate total amount of (i) the Stockton
Required Equity Contribution (following the contribution of such amounts to
Stockton and their application to Stockton Project Costs) and (ii) all other
equity contributed to Stockton and applied to Stockton Project
Costs.

                       

                      "Stockton Insurance and
Condemnation Proceeds Account" has the meaning provided in Section 8.01(n)
(Establishment
of Project Accounts).

                       

                      "Stockton Lease" means
the lease to be entered into 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 (or with changes agreed to by the Borrowers, the Administrative
Agent and the Collateral Agent, in each case acting reasonably), to be entered
into among Pacific Holding, Stockton and the Collateral Agent, pursuant to which
Pacific Holding will pledge one hundred percent (100%) of the Equity
Interests in Stockton to the Collateral Agent.

                       

                      "Stockton Project
Costs" means the following costs and expenses incurred by the Borrowers
in connection with the Stockton Plant prior to the Commercial Operation Date for
the Stockton Plant and set forth in the then-current Stockton Construction
Budget or otherwise approved in writing by the Administrative Agent (in
consultation with the Independent Engineer):

                       

                      
                        
                          
                          

                        

                        
                          Exhibit A
- 59

                          
                            

                          

                        

                        
                          
                          

                        

                      

                       

                      
                        
                          	
                                	
                                  (i) 

                                	
                                  costs
      incurred by the Borrowers under the Stockton Construction Contracts, and
      other costs directly related to the acquisition, site preparation, design,
      engineering, construction, installation, start-up, and testing of the
      Stockton Plant;

                                

                        

                      

                       

                      
                        
                          	
                                	
                                  (ii) 

                                	
                                  fees
      and expenses incurred by or on behalf of the Borrowers and allocated to
      the Stockton Plant in connection with the development of the Project and
      the consummation of the transactions contemplated by this Agreement,
      including financial, accounting, legal, surveying and consulting fees, and
      the costs of preliminary
engineering;

                                

                        

                      

                       

                      
                        
                          	
                                	
                                  (iii) 

                                	
                                  interest
      and Fees on the Construction Loans for the Stockton
  Plant;

                                

                        

                      

                       

                      
                        
                          	
                                	
                                  (iv) 

                                	
                                  financing
      fees and expenses in connection with the Loans and the fees, costs and
      expenses of the Agents' counsel, any Interest Rate Protection Provider's
      counsel and the Consultants that are allocated to the Stockton
      Plant;

                                

                        

                      

                       

                      
                        
                          	
                                	
                                  (v) 

                                	
                                  insurance
      premiums with respect to the Title Insurance Policy for the Stockton Plant
      and the insurance for the Stockton Plant required pursuant to Section 7.01(h)
      (Affirmative
      Covenants - Insurance);

                                

                        

                      

                       

                      
                        
                          	
                                	
                                  (vi) 

                                	
                                  costs
      of corn and natural gas utilized for commissioning, Performance Tests for,
      and operation of, the Stockton Plant prior to its Commercial Operation
      Date; and

                                

                        

                      

                       

                      
                        
                          	
                                	
                                  (vii) 

                                	
                                  all
      other costs and expenses included in the then-current Stockton
      Construction Budget.

                                

                        

                      

                       

                      "Stockton Required Equity
Contribution" means, as of the initial Funding Date for the Stockton
Plant, an amount equal to the aggregate total amount of Project Costs in the
Construction Budget for the Stockton Plant approved pursuant to Section 6.04(h)(i)
(Conditions
to First Funding for Each Greenfield Plant - Construction Schedule and Updated
Budget)
minus
(x) five million Dollars ($5,000,000) and (y) the lesser of
(A) forty-five million Dollars ($45,000,000) or (B) an amount equal to
forty percent (40%) of such aggregate Project Costs.

                       

                      "Stockton Security
Agreement" means the Assignment and Security Agreement, in substantially
the form of Exhibit
6.04(g)-C (or with changes agreed to by the Borrowers, the Administrative
Agent and the Collateral Agent, in each case acting reasonably), to be made by
Stockton in favor of the Collateral Agent.

                       

                      
                        
                          
                          

                        

                        
                          Exhibit A
- 60

                          
                            

                          

                        

                        
                          
                          

                        

                      

                       

                      "Stockton Warranty
Account" has the meaning provided in Section 8.01(t)
(Establishment
of Project Accounts).

                       

                      "Storage Facilities"
means the facilities described on Schedule 7.02(f).

                       

                      "Subordinated Debt
Agreements" means each agreement with respect to Project Company
Subordinated Debt or Indebtedness of Affiliates of the Borrowers the proceeds of
which will be used exclusively for the payment of Project Costs and transaction
costs associated therewith, each of which shall be in form and substance
satisfactory to the Administrative Agent in its sole discretion or otherwise
reasonably satisfactory to the Required Lenders.

                       

                      "Subordinated Lenders"
means any lenders providing financing under any Subordinated Debt
Agreement.

                       

                      "Subordinated Loans"
means each loan (or similar funding) made pursuant to any Subordinated Debt
Agreement.

                       

                      "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.

                       

                      "Substitute Facility"
means, upon the written request of the Borrowers and approval by all of the
Lenders (which approval shall be based on customary due diligence, and subject
to execution and delivery of mutually satisfactory amendments to the Financing
Documents and additional security documents) an ethanol production facility in
development by a subsidiary of Pacific Holding that is substituted for one of
the Greenfield Facilities (and related Borrowers); provided that if such
proposed replacement facility is an ethanol facility to be located at Plymouth,
Washington with a design basis capacity of approximately fifty (50) million
gallons per year of denatured ethanol, together with wet and dried distiller's
grains and carbon dioxide as described to the Lead Arrangers prior to the date
hereof, the consent of Lenders holding eighty percent (80%) or more of the
Commitments will be required for such approval.

                       

                      "Successful
Syndication" has the meaning provided in the Commitment Letter among
WestLB, Mizuho Corporate Bank, Ltd. and Pacific Ethanol, dated as of
January 10, 2007.

                       

                      
                        
                          
                          

                        

                        
                          Exhibit A
- 61

                          
                            

                          

                        

                        
                          
                          

                        

                      

                       

                      "Survey" means, with
respect to any Site, a survey conforming with the ALTA/ACSM 2005 survey
standards, including Table A items 6, 8, 10 and 11(a).

                       

                      "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, includes the Permitted Commodity Hedging Arrangements and any Interest
Rate Protection Agreements and excludes any contract for the physical sale or
purchase of any commodity.

                       

                      "Swap Termination
Value" means, in respect of any one or more Swap Contracts (including any
Permitted Commodity Hedging Arrangements or any Interest Rate Protection
Agreements), 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).

                       

                      "Target Balance
Amount" means the aggregate of all principal payable under the Loans
projected to be outstanding on each Quarterly Payment Date, as set forth on
Schedule 8.08(c)(xiii).

                       

                      "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.

                       

                      
                        
                          
                          

                        

                        
                          Exhibit A
- 62

                          
                            

                          

                        

                        
                          
                          

                        

                      

                       

                      "Term Loan Commitment"
means the Tranche A Term Loan Commitment and the Tranche B Term Loan Commitment,
as the context requires.

                       

                      "Term Loan Commitment
Percentage" means, as to any Lender at any time, the percentage that such
Lender's Term Loan Commitment then constitutes of the Aggregate Term Loan
Commitment.

                       

                      "Term Loans" means,
collectively, the Tranche A Term Loans and the Tranche B Term
Loans.

                       

                      "Term Notes" means the
promissory notes of each Borrower, substantially in the form of Exhibit 2.07,
evidencing Term Loans.

                       

                      "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.

                       

                      "Title Insurance
Company" means Stewart Title Guaranty Company or such other title
insurance company or companies reasonably satisfactory to the Administrative
Agent.

                       

                      "Title Insurance
Policy" has the meaning provided in Section 6.01(q)
(Conditions
to Closing - Title Insurance).

                       

                      "Tranche" means, as
the case may be, the Tranche A Construction Loans, the Tranche A Term Loans, the
Tranche B Construction Loans or the Tranche B Term Loans.

                       

                      "Tranche A Applicable
Margin" means (a) with respect to the Eurodollar Loans
(i) prior to the Conversion Date, three and three-quarters percent (3.75%),
and (ii) on and after the Conversion Date, three and one-quarter percent
(3.25%), and (b) with respect to the Base Rate Loans (i) prior to the
Conversion Date, two and three-quarters percent (2.75%), and (ii) on and
after the Conversion Date, two and one-quarter percent (2.25%).

                       

                      
                        
                          
                          

                        

                        
                          Exhibit A
- 63

                          
                            

                          

                        

                        
                          
                          

                        

                      

                       

                      "Tranche A Construction Loan
Commitment" means, with respect to each Tranche A Lender, the commitment
of such Tranche A Lender to make Tranche A  Construction Loans, as set
forth opposite the name of such Tranche A Lender in Schedule 1.01(a),
as the same may be reduced in accordance with Section 2.08
(Termination
or Reduction of Commitments) and Section 2.09 (Tranche
Reallocation).

                       

                      "Tranche A Construction
Loans" means, collectively, the In-Progress Plant 2 Tranche A
Construction Loans, the Greenfield Plant 1 Tranche A Construction Loans,
the Greenfield Plant 2 Construction Loans and the Greenfield Plant 3
Construction Loans.

                       

                      "Tranche A Lenders"
means those Lenders of Tranche A Loans, as identified on Schedule 1.01(a)
and each other Person that acquires the rights and obligations of any such
Lender pursuant to Section 11.03
(Assignments).

                       

                      "Tranche A Loans"
means, collectively, the Tranche A Construction Loans and the Tranche A Term
Loans.

                       

                      "Tranche A Term Loan
Commitment" means, with respect to each Tranche A Lender, the commitment
of such Tranche A Lender to make Tranche A Term Loans, as set forth opposite the
name of such Tranche A Lender in Schedule 1.01(a),
as the same may be reduced in accordance with Section 2.08
(Termination
or Reduction of Commitments) and Section 2.09 (Tranche
Reallocation).

                       

                      "Tranche A Term Loans"
has the meaning provided in Section 2.02(a)
(Term
Loans).

                       

                      "Tranche B Applicable
Margin" means (a) with respect to the Eurodollar Loans, four and
thirty-five hundredths percent (4.35%), and (b) with respect to the Base
Rate Loans, three and thirty-five hundredths percent (3.35%).

                       

                      "Tranche B Construction Loan
Commitment" means, with respect to each Tranche B Lender, the commitment
of such Tranche B Lender to make Tranche B Construction Loans, as set forth
opposite the name of such Tranche B Lender in Schedule 1.01(a),
as the same may be reduced or increased in accordance with Section 2.08
(Termination
or Reduction of Commitments) and Section 2.09 (Tranche
Reallocation).

                       

                      
                        
                          
                          

                        

                        
                          Exhibit A
- 64

                          
                            

                          

                        

                        
                          
                          

                        

                      

                       

                      "Tranche B Construction
Loans" means, collectively, the In-Progress Plant 1 Construction
Loans, the In-Progress Plant 2 Tranche B Construction Loans and the
Greenfield Plant 1 Tranche B Construction Loans.

                       

                      "Tranche B Conversion
Disbursement" means any funding of Tranche B Loans in accordance
with Section 2.09(c)
(Tranche
Reallocation).

                       

                      "Tranche B Escrow
Disbursement" means the disbursement of the Tranche B Construction Loans
to the Escrow Account following the occurrence of the Closing Date.

                       

                      "Tranche B Lenders"
means those Lenders of Tranche B Loans, as identified on Schedule 1.01(a)
and each other Person that acquires the rights and obligations of any such
Lender pursuant to Section 11.03
(Assignments).

                       

                      "Tranche B Loans"
means, collectively, the Tranche B Construction Loans and the Tranche B Term
Loans.

                       

                      "Tranche B Term Loan
Commitment" means, with respect to each Tranche B Lender, the commitment
of such Tranche B Lender to make Tranche B Term Loans, as set forth opposite the
name of such Tranche B Lender in Schedule 1.01(a),
as the same may be reduced or increased in accordance with Section 2.08
(Termination or
Reduction of
Commitments)
Section 2.09
(Tranche
Reallocation).

                       

                      "Tranche B Term Loans"
has the meaning provided in Section 2.02(b)
(Term
Loans).

                       

                      "Tranche Commitment
Percentage" means, as to any Lender at any time, the percentage that such
Lender's Tranche B Construction Loan Commitment, Tranche B Term Loan
Commitment, Tranche A Construction Loan Commitment or Tranche A Term
Loan Commitment then constitutes of the Aggregate Tranche Commitment for the
applicable Tranche.

                       

                      "Tranche Conversion
Date" has the meaning provided in Section 2.09
(Tranche
Reallocation).

                       

                      "Tranche Conversion
Notice" means a notice from a Tranche Reallocation Eligible Lender in
substantially the form of Exhibit 2.09.

                       

                      "Tranche Reallocation
Eligible Commitments" means the Commitments of the Tranche Reallocation
Eligible Lenders identified on Schedule 2.09,
as the same may be increased or reduced in accordance with Section 2.08
(Termination
or Reduction of Commitments) and Section 2.09
(Tranche
Reallocation).

                       

                      
                        
                          
                          

                        

                        
                          Exhibit A
- 65

                          
                            

                          

                        

                        
                          
                          

                        

                      

                       

                      "Tranche Reallocation
Eligible Lenders" means the Lead Arrangers identified on Schedule 2.09,
or any transferee or assignee of such Lead Arrangers (in their capacity as
Lenders).

                       

                      "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.

                       

                      "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 Capital Loan
Facility" means the Construction and Term Loan Agreement, dated as of
April 10, 2006, among Madera, the lenders party thereto from time to time,
TD BankNorth, N.A., as administrative agent, and the other parties thereto, and
all agreements related thereto and all Indebtedness incurred by Madera
thereunder.

                       

                      "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.

                       

                      "Value" means, with
respect to any inventory or other goods, the cost thereof to any Borrower,
calculated on a first-in-first-out basis in accordance with GAAP.

                       

                      "Warranty Accounts"
means, collectively, the Madera Warranty Account, the Boardman Warranty Account,
the Stockton Warranty Account, the Brawley Warranty Account, and the Burley
Warranty Account.

                       

                      
                        
                          
                          

                        

                        
                          Exhibit A
- 66

                          
                            

                          

                        

                        
                          
                          

                        

                      

                       

                      "Warranty Notice" has
the meaning set forth in the Sponsor Support Agreement.

                       

                      "Warranty Proceeds"
means all amounts required to be paid by Pacific Ethanol pursuant to
Section 3.05(a) (Sponsor's Warranty Funding
Obligations) of the Sponsor Support Agreement.

                       

                      "Warranty Proceeds Request
Certificate" means a certificate in substantially the form of Exhibit 8.16,
duly executed by an Authorized Officer of the Borrowers' Agent and setting forth
proposed instructions for the transfer or withdrawal of Warranty Proceeds from a
Warranty Account.

                       

                      "Warranty Work" has
the meaning set forth in the Sponsor Support Agreement.

                       

                      "WDG" means wet
distillers grains produced by the Borrowers at the Plants.

                       

                      "WestLB" means WestLB
AG, New York Branch.

                       

                      "Working Capital Applicable
Margin" means (a) with respect to the Eurodollar Loans
(i) prior to the Conversion Date, three and three-quarters percent (3.75%),
and (ii) on and after the Conversion Date, three and one-quarter percent
(3.25%), and (b) with respect to the Base Rate Loans (i) prior to the
Conversion Date, two and three-quarters percent (2.75%), and (ii) on and
after the Conversion Date, two and one-quarter percent (2.25%).

                       

                      "Working Capital
Expenses" means, collectively, Project Costs relating to initial start-up
and testing of a Plant, Operation and Maintenance Expenses and Maintenance
Capital Expenses.

                       

                      "Working Capital Funding
Notice" means each request for Funding of Working Capital Loans in the
form of Exhibit 2.05-A
delivered in accordance with Section 2.05
(Notice
of Fundings).

                       

                      "Working Capital LC
Collateral Sub-Account" has the meaning provided in Section 8.11(a)
(Working
Capital Reserve Account).

                       

                      "Working Capital
Lenders" means those Lenders of Working Capital Loans, as identified on
Schedule 1.01(a),
and each other Person that acquires the rights and obligations of any such
Lender pursuant to Section 11.03
(Assignments).

                       

                      "Working Capital Loan"
has the meaning provided in Section 2.03
(Working
Capital Loans).

                       

                      
                        
                          
                          

                        

                        
                          Exhibit A
- 67

                          
                            

                          

                        

                        
                          
                          

                        

                      

                       

                      "Working Capital Loan
Availability" means, on a cumulative basis:

                       

                      
                        
                          	
                                	
                                  (i) 

                                	
                                  on
      or after the Funding of the In-Progress Plant 1 Construction Loans,
      up to five million Dollars
($5,000,000);

                                

                        

                      

                       

                      
                        
                          	
                                	
                                  (ii) 

                                	
                                  on
      or after the Funding of the In-Progress Plant 2 Construction Loans,
      up to five million Dollars ($5,000,000);
and

                                

                        

                      

                       

                      
                        
                          	
                                	
                                  (iii) 

                                	
                                  on
      or after the Commercial Operation Date for each Greenfield Plant (or,
      prior to the Conversion Date, if needed for approved start-up costs
      following the initial Funding of Construction Loans for such Plant), up to
      an additional five million Dollars ($5,000,000) per each Greenfield
      Plant;

                                

                        

                      

                       

                      provided, that, on
and after the initial Commercial Operation Date, the Working Capital Loan
Availability shall at no time exceed the Borrowing Base for the Project, as
certified from time to time by the Borrowers' Agent.

                       

                      "Working Capital Loan
Commitment" means, with respect to each Working Capital Lender, the
commitment of such Working Capital Lender to make Working Capital Loans, as set
forth opposite the name of such Working Capital Lender in Schedule 1.01(a),
as the same may be reduced in accordance with Section 2.08
(Termination
or Reduction of Commitments).

                       

                      "Working Capital Loan
Commitment Percentage" means, as to any Working Capital Lender at any
time, the percentage that such Working Capital Lender's Working Capital Loan
Commitment then constitutes of the Aggregate Working Capital Loan
Commitment.

                       

                      "Working Capital Maturity
Date" means (i) the date that occurs twelve (12) months after
the Conversion Date, or (ii) to the extent that some or all of the Working
Capital Lenders decide to extend or renew the Working Capital Loan Commitment,
such date as shall be determined by such Working Capital
Lenders. 

                       

                      "Working Capital
Notes" means the promissory notes of the Borrower, substantially in the
form of Exhibit 2.07,
evidencing Working Capital Loans.

                       

                      
                        
                          
                          

                        

                        
                          Exhibit A
- 68

                          
                            

                          

                        

                        
                          
                          

                        

                      

                       

                      "Working Capital Plant
Commitment" means, with respect to each Plant, five million Dollars
($5,000,000).

                       

                      "Working Capital Reserve
Account" has the meaning set forth in Section 8.01(i)
(Establishment
of Project Accounts).

                       

                      "Working Capital Reserve
Required Amount" means, following any termination or reduction in the
Working Capital Loan Commitment in accordance with Section 2.08
(Termination
or Reduction of Commitments), an aggregate
amount equal to all such terminations or reductions.

                       

                      "Working Capital Transfer
Certificate" means a certificate in substantially the form of Exhibit 8.11,
duly executed by an Authorized Officer of the Borrowers' Agent.

                       

                      "Work Schedule" means,
with respect to each Plant, any "work schedule" identified in any Construction
Contract for such Plant.

                       

                     

                  

                   

                   

                   

                   

                  
                    
                      
                      

                    

                    
                      Exhibit A
- 69

                      
                        

                      

                    

                     

                  

                

              

            

          

        

      

      
        EXHIBIT
2.04

         to Credit
Agreement

         

        [FORM
OF]

        ISSUANCE
REQUEST

         

        This
issuance request notice (this "Issuance Request"),
dated as of [_____], 200[__],
is delivered to WESTLB AG, NEW YORK BRANCH, as administrative agent for the
Lenders (the "Administrative
Agent") and as the Issuing Bank, pursuant to Section 2.04 of the Credit
Agreement, dated as of February __, 2007 (as amended, restated,
supplemented or otherwise modified from time to time, the "Credit Agreement"), by and
among Pacific Ethanol Holding Co. LLC, a Delaware limited liability company
("Pacific
Holding"), Pacific Ethanol Madera LLC, a Delaware limited liability
company ("Madera"), Pacific Ethanol Columbia, LLC, a Delaware limited liability
company ("Boardman"), Pacific
Ethanol Stockton, LLC, a Delaware limited liability company ("Stockton"), Pacific
Ethanol Imperial, LLC, a Delaware limited liability company ("Brawley") and
Pacific Ethanol Magic Valley, LLC, a Delaware limited liability company ("Burley" and,
together with Pacific Holding, Madera, Boardman, Stockton, and Brawley, the
"Borrowers"),
Pacific Holding, as Borrowers' 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, UNION BANK OF CALIFORNIA, N.A., as Accounts Bank, WESTLB AG, NEW YORK
BRANCH, as Lead Arranger and Sole Bookrunner, MIZUHO CORPORATE BANK, LTD., as
Lead Arranger and Co-Syndication Agent, CIT CAPITAL SECURITIES LLC, as Lead
Arranger and Co-Syndication Agent, COOPERATIEVE CENTRALE
RAIFFEISEN­BOERENLEENBANK B.A., "RABOBANK NEDERLAND", NEW YORK BRANCH, as
Lead Arranger and Co-Documentation Agent, and BANCO SANTANDER CENTRAL HISPANO
S.A, NEW YORK BRANCH, as Lead Arranger and Co-Documentation Agent. Capitalized
terms used herein but not otherwise defined herein shall have the respective
meanings set forth in the Credit Agreement.

         

        WHEREAS,
the Borrowers wish to request the issuance of a Letter of Credit under the
Credit Agreement in accordance with Section 2.04 of the Credit Agreement and on
the terms and conditions set forth therein and herein.

         

        WHEREAS,
to induce the Issuing Bank to provide Letters of Credit under the Credit
Agreement, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the Borrowers hereby agree as
follows:

         

         

        
          
            
            

          

          
            2.04-1

            
              

            

          

          
            
            

          

        

         

        Section 1. Credit Issuance
Request. (i) The Borrowers hereby irrevocably request the issuance of a
Letter of Credit (the "Proposed Letter of
Credit") in the amount of [____] Dollars ($[____]) for the benefit of [Pacific Holding]
[Madera] [Boardman]
[Stockton] [Brawley] [Burley] with respect to the [Madera] [Boardman] [Stockton]
[Brawley] [Burley] Plant and the initial Funding for such Plant has been made
(or will be made simultaneously with the issuance of such Proposed Letter of
Credit).

         

        (ii) The
Issuance Date proposed for such Proposed Letter of Credit is [______],
200[_] (the "Proposed
Letter of Credit Issuance Date"). The Borrowers hereby
certify that this Issuance Request is being delivered to the Administrative
Agent not later than five (5) Business Days prior to the Proposed Letter of
Credit Issuance Date, and that the Proposed Letter of Credit Issuance Date is a
day that is no later than thirty (30) days preceding the Working Capital
Maturity Date.

         

        (iii) The term
of the Proposed Letter of Credit will expire on [_____],
200[_] (which date is prior to the Working Capital Maturity Date).

         

        (iv) Attached
hereto as Annex
A is a proposed form for the Proposed Letter of Credit, which includes
the draw conditions for the Proposed Letter of Credit (which shall be subject to
approval of the Issuing Bank pursuant to Section 2.04(i) of
the Credit Agreement).

         

        Section 2.
Certifications. The Borrowers certify that on the date hereof, and as of
the Proposed Letter of Credit Issuance Date:

         

        (i) the First
Escrow Release Date has occurred or will occur simultaneously with the issuance
of the Proposed Letter of Credit;

         

        (ii) each of
the conditions to the issuance of the Proposed Letter of Credit set forth in
Article VI of the Credit Agreement has been satisfied (or waived in accordance
with the terms thereof) and the Borrowers are in compliance with each such
condition, before and after giving effect to the issuance of such Proposed
Letter of Credit and to the application of the proceeds therefrom;

         

        [(iii)
each of the Funding Representations and Warranties made by each of the
Borrowers, Pledgor and Pacific Ethanol 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 Letter of Credit;] [To be included prior to the
Conversion Date.]

         

        [(iii)
each of the representations and warranties made by each of the Borrowers,
Pledgor and Pacific Ethanol in the Financing Documents is true and correct in
all material respects (except with respect to representations and warranties
that expressly

         

         

        
          
            
            

          

          
            2.04-2

            
              

            

          

          
            
            

          

        

         

         

        refer to
an earlier date), before and after giving effect to the Proposed Letter of
Credit;] [To be included after
the Conversion Date.]

         

        [(iv) no
Funding Default or Event of Default has occurred and is continuing or would
occur as a result of the issuance of the Proposed Letter of Credit;] [To be included prior to the
Conversion Date.]

         

        [(iv) no
Default or Event of Default has occurred and is continuing or would occur as a
result of the issuance of the Proposed Letter of Credit;] [To be included after the Conversion
Date.]

         

        (v) since
September 30, 2006, no Material Adverse Effect has occurred and is
continuing;

         

        (vi) the
Proposed Letter of Credit is being requested to satisfy [Pacific Holding]
[Madera] [Boardman] [Stockton] [Brawley] [Burley] obligation to provide a letter
of credit under Section [_____] of the [insert name of Contractual Obligation or
Governmental
Approval] relating to the [Madera] [Boardman] 'Stockton] [Brawley] [Burley]
Plant;

         

        (vii) upon the
issuance of the Proposed Letter of Credit, the aggregate Stated Amounts of all
issued and outstanding Letters of Credit shall not exceed the LC
Cap;

         

        (viii) upon the
issuance of the Proposed Letter of Credit, the aggregate Stated Amounts of all
issued and outstanding Letters of Credit plus the aggregate
outstanding principal amount of all Working Capital Loans shall not exceed the
Aggregate Working Capital Loan Commitment or the current Working Capital Loan
Availability; and

         

        (ix) all and
each of the statements contained in this Issuance Request are true and
correct.

         

        Section 3. Governing
Law. This Issuance Request shall be governed by and construed in
accordance with, the laws of the State of New York.

         

        Section 4. Execution in
Counterparts. This Issuance Request 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 officers are executing this Issuance Request not in their individual
capacities but in their capacities as Authorized Officers of the
Borrowers.

         

         

        
          
            
            

          

          
            2.04-3

            
              

            

          

          
            
            

          

        

         

         

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

         

         

        
          
            	 
      	
                    PACIFIC ETHANOL HOLDING CO. LLC,
      

                    as
      Borrower

                  
	 	 
	 	 
	 
      	
                    By:
      _______________________________

                  
	 
      	
                    Name:

                  
	 
      	
                    Title:

                  
	 	 
	 	 
	 	 
	 
      	
                    PACIFIC ETHANOL MADERA LLC, 

                    as
      Borrower

                  
	 	 
	 	 
	 
      	
                    By:
      _______________________________

                  
	 
      	
                    Name:

                  
	 
      	
                    Title:

                  
	 	 
	 	 
	 
      	
                    PACIFIC ETHANOL COLUMBIA, LLC,
      

                    as
      Borrower

                  
	 	 
	 	 
	 
      	
                    By:
      _______________________________

                  
	 
      	
                    Name:

                  
	 
      	
                    Title:

                  
	 	 
	 	 
	 
      	
                    PACIFIC ETHANOL STOCKTON, LLC,
      

                    as
      Borrower

                  
	 	 
	 	 
	 
      	
                    By:
      _______________________________

                  
	 
      	
                    Name:

                  
	 
      	
                    Title:

                  

          

        

         

         

        
          
            
            

          

          
            2.04-4

            
              

            

          

          
            
            

          

        

         

         

         

        
          
            	 
      	
                    PACIFIC ETHANOL IMPERIAL, LLC,
      

                    as
      Borrower

                  
	 	 
	 	 
	 
      	
                    By:
      _______________________________

                  
	 
      	
                    Name:

                  
	 
      	
                    Title:

                  
	 	 
	 	 
	 	 
	 
      	
                    PACIFIC ETHANOL MAGIC VALLEY, LLC,
      

                    as
      Borrower

                  
	 	 
	 	 
	 
      	
                    By:
      _______________________________

                  
	 
      	
                    Name:

                  
	 
      	
                    Title:

                  
	 	 
	 	 

          

        

         

         

         

         

         

        
          
            
            

          

          
            2.04-5

            
              

            

          

          
            
            

          

        

         

        Annex A to

        Exhibit 2.04

        FORM FOR PROPOSED LETTER OF
CREDIT

         

         

         

         

         

         

         

         

         

         

         

         

         

         

         

         

         

        
          
            
            

          

          
            2.04 -
Annex A

            
              

            

          

          
            
            

          

        

         

         

        
          EXHIBIT
2.05-A

          to Credit
Agreement

           

          [FORM
OF]

          WORKING CAPITAL FUNDING
NOTICE

           

          This
Working Capital funding notice (this "Working Capital Funding
Notice"), dated as of [________], 200[_], is delivered to WESTLB AG, NEW
YORK BRANCH, as administrative agent (the "Administrative
Agent"), pursuant to Section 2.05 of the Credit Agreement, dated as of
February __,
2007 (as amended, restated, supplemented or otherwise modified from time to
time, the "Credit  Agreement"), 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, PACIFIC ETHANOL IMPERIAL, 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 Borrowers'
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, UNION BANK OF CALIFORNIA, N.A.
as Accounts Bank, WESTLB AG, NEW YORK BRANCH, as Lead Arranger and Sole
Bookrunner, MIZUHO CORPORATE BANK, LTD., as Lead Arranger and Co-Syndication
Agent, CIT CAPITAL SECURITIES LLC, as Lead Arranger and Co-Syndication Agent,
COOPERATIEVE CENTRALE RAIFFEISEN­BOERENLEENBANK B.A., "RABOBANK NEDERLAND",
NEW YORK BRANCH, as Lead Arranger and Co-Documentation Agent, and BANCO
SANTANDER CENTRAL HISPANO S.A, NEW YORK BRANCH, as Lead Arranger and
Co-Documentation Agent. This Working Capital Funding Notice sets forth certain
undertakings of the Borrowers with respect to the transactions contemplated by
the Credit Agreement. Capitalized terms used herein but not otherwise defined
herein shall have the respective meanings set forth in the Credit
Agreement.

           

          WHEREAS,
the Borrowers wish to propose a Working Capital Funding under the Credit
Agreement in accordance with Section 2.05 of the Credit Agreement and on the
terms and conditions set forth therein and herein.

           

          WHEREAS,
to induce the Lenders to extend credit under the Credit Agreement, and for other
good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the Borrowers hereby agree as follows:

           

           

          
            
              
              

            

            
              2.05-A -
1

              
                

              

            

            
              
              

            

          

           

           

           

          Section 1. Funding
Request. The Borrowers hereby irrevocably propose a Working Capital
Funding (the "Proposed
Working Capital Funding") under each of the Loans set forth below in the
amounts set forth below: [Note:
each Working Capital Funding Notice should only include
those provisions applicable to the requested Funding.]

           

          (a) [___]
Dollars ($[______]) requested to be funded as [Eurodollar Loans] [and [____]
Dollars ($[____]) requested to be funded as] [Base Rate Loans] for [Madera]
[Boardman] [Stockton] [Brawley] [Burley] Project Costs relating to initial
start-up and testing for such Plant;

           

          (b) [____]
Dollars ($[_____] requested to be funded as [Eurodollar Loans] [and [____]
Dollars ($[____]) requested to be funded as] [Base Rate Loans] for [Madera]
[Boardman] [Stockton] [Brawley] [Burley] Operation and Maintenance
Expenses;

           

          (c) [____]
Dollars ($[_____]) requested to be funded as [Eurodollar Loans] [and [____]
Dollars ($[_____]) requested to be funded as] [Base Rate Loans] for [Madera]
[Boardman] [Stockton] [Brawley] [Burley] Maintenance Capital
Expenses.

           

          The
Funding Date proposed for such Proposed Working Capital Funding is [_____],
200[_] (the "Proposed
Working Capital Funding Date"). The Borrowers hereby certify that this
Working Capital 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 Working Capital Funding Date, and that the Proposed Working Capital
Funding Date is a Business Day.

           

          [The
duration of the initial Interest Period for the Eurodollar Loans requested as
[part of] the Proposed Working Capital Funding is [_____] ([_____])
months.]

           

          The
Borrowers hereby request that on the Proposed Working Capital Funding Date the
Administrative Agent deliver by wire transfer, in immediately available funds,
the proceeds of such Proposed Working Capital Funding in the following amounts,
which are subject to the limits set forth in Section 2.03(a) and Section 2.03(b)
of the Credit Agreement, as specified below:

           

          (a) [____]
Dollars ($[____]) to the [Madera]
[Boardman] [Stockton] [Brawley] [Burley] Construction Account, Account No.
[_______________];

           

          (b) [____]
Dollars ($[____]) to the Operating Account, Account No. [_____];
and

           

           

          
            
              
              

            

            
              2.05-A -
2

              
                

              

            

            
              
              

            

          

           

           

           

          (c)
[_____] Dollars ($[____]) to the Maintenance Capital Expense Account,
Account No. [_____].

           

          Section
3. Certifications. The Borrowers certify that as of the Proposed Working
Capital Funding Date:

           

          (i) each of
the conditions to the Proposed Funding set forth in Article VI of the Credit
Agreement have been satisfied;

           

          (ii) the
Borrowers are in compliance with all applicable conditions set forth in Article
VI of the Credit Agreement, on and as of the Proposed Working Capital Funding
Date, before and after giving effect to such Proposed Working Capital Funding
and to the application of the proceeds therefrom;

           

          (iii) [each of
the Funding Representations and Warranties made by each of the Borrowers, the
Pledgor and Pacific Ethanol 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 Working Capital Funding and to the application of the proceeds of such
Proposed Working Capital Funding]; [Applicable for Funding Notices
delivered prior to the
Conversion Date or Conversation Date Certain.]

           

          (iv) [each of
the representations and warranties made by each of the Borrowers, the Pledgor
and Pacific Ethanol 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 Working Capital Funding and to the application of the proceeds of such
Proposed Working Capital Funding]; [Applicable to Funding Notices
delivered after the Conversion Date or Conversation Date
Certain.]

           

          (v) the
Borrowers have delivered to the Administrative Agent the most recent Borrowing
Base Certificate required to be delivered pursuant to Section 7.03(n)
(Reporting
Requirements) on [insert date];

           

          (vi) [no
Funding Default or Event of Default has occurred and is continuing or would
occur as a result of the Proposed Working Capital Funding]; [Applicable for Funding Notices
delivered prior to the Conversion Date or Conversation Date
Certain.]

           

          (vii) [no
Default or Event of Default has occurred and is continuing or would occur as a
result of the Proposed Working Capital Funding; [Applicable to Funding Notices delivered after the
Conversion Date or Conversation Date Certain.]

           

           

          
            
              
              

            

            
              2.05-A -
3

              
                

              

            

            
              
              

            

          

           

           

          (viii) since
September 30, 2006, no Material Adverse Effect has occurred and is
continuing;

           

          (ix) the
Working Capital Loans requested pursuant to paragraph [( )] above will be used
to pay to Project Costs that are due and owing for start-up costs with respect
to the [Stockton] [Brawley] [Brawley] Plant;

           

          (x) the
Working Capital Loans requested pursuant to paragraph [( )] above are equal to
amounts due and owing for Operation and Maintenance Expenses in accordance with
the Operating Budget; it being hereby certified that adequate funds are not
available for the payment of such Operation and Maintenance Expenses in the
Operating Account and the amount of such Working Capital Loans, taken together
with all amounts transferred to the Operating Account for the current calendar
month, pursuant to Section 18.08(b)(i)] 18.08(c)(i)] and Section 8.11(b)(i) of
the Credit Agreement (excluding any amounts so transferred to cover the cost of
corn, natural gas, electricity, insurance premiums and Borrower Taxes), does not
exceed the Permitted Operating Budget Deviation Levels;

           

          (xi) the
Working Capital Loans requested pursuant to paragraph [( )] above are equal to
amounts due and owing for Maintenance Capital Expenses in accordance with the
Operating Budget; it being hereby certified that adequate funds are not
available for the payment of such Maintenance Capital Expenses in the
Maintenance Capital Expense Account and the amount of such Working Capital
Loans, taken together with all amounts transferred to the Maintenance Capital
Expense Account for the current calendar month pursuant to Section [8.08(b)(ii)]
[8.08(c)(ii)] and Section 8.08(b)(ii) of the Credit Agreement, does not exceed
the Permitted Operating Budget Deviation Levels;

           

          (xii) after
giving effect to the Working Capital Loans requested hereunder, the aggregate
principal amount of the Working Capital Loans, plus the aggregate Stated Amounts
of all issued and outstanding Letters of Credit, will not exceed either (A) the
Aggregate Working Capital Loan Commitment or (B) the Working Capital
Availability as of the Proposed Working Capital Funding Date; and

           

          (xiii) all and
each of the statements contained in this Working Capital Funding Notice are true
and correct.

           

          Section 4.
Governing Law. This Working Capital 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 5.
Execution in Counterparts. This Working Capital Funding Notice may be
executed by the parties hereto in counterparts (and by different
parties

           

           

          
            
              
              

            

            
              2.05-A -
4

              
                

              

            

            
              
              

            

          

           

           

           

          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 Working Capital 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.]

           

           

           

           

           

           

           

           

           

           

           

          
            
              
              

            

            
              2.05-A -
5

              
                

              

            

            
              
              

            

          

           

           

          IN WITNESS WHEREOF, the
undersigned have caused this Working Capital Funding Notice to be duly executed
and delivered as of the day and year first written above.

           

          
             

             

            
              
                	 
      	
                        PACIFIC ETHANOL HOLDING CO.
      LLC

                      
	 	 
	 	 
	 
      	
                        By:
      _______________________________

                      
	 
      	
                        Name:

                      
	 
      	
                        Title:

                      
	 	 
	 	 
	 	 
	 
      	
                        PACIFIC ETHANOL MADERA
    LLC

                      
	 	 
	 	 
	 
      	
                        By:
      _______________________________

                      
	 
      	
                        Name:

                      
	 
      	
                        Title:

                      
	 	 
	 	 
	 
      	
                        PACIFIC ETHANOL COLUMBIA,
      LLC

                      
	 	 
	 	 
	 
      	
                        By:
      _______________________________

                      
	 
      	
                        Name:

                      
	 
      	
                        Title:

                      
	 	 
	 	 
	 
      	
                        PACIFIC ETHANOL STOCKTON,
      LLC

                      
	 	 
	 	 
	 
      	
                        By:
      _______________________________

                      
	 
      	
                        Name:

                      
	 
      	
                        Title:

                      

              

            

             

             

            
              
                
                

              

              
                2.05-A -
6

                
                  

                

              

              
                
                

              

            

          

           

           

          
             

             

            
              
                	 
      	
                        PACIFIC ETHANOL IMPERIAL,
      LLC

                      
	 	 
	 	 
	 
      	
                        By:
      _______________________________

                      
	 
      	
                        Name:

                      
	 
      	
                        Title:

                      
	 	 
	 	 
	 	 
	 
      	
                        PACIFIC ETHANOL MAGIC
      VALLEY, LLC

                      
	 	 
	 	 
	 
      	
                        By:
      _______________________________

                      
	 
      	
                        Name:

                      
	 
      	
                        Title:

                      
	 	 
	 	 

              

            

             

          

           

           

           

           

           

           

           

           

           

           

           

           

          
            
              
              

            

            
              2.05-A -
7

              
                

              

            

            
              
              

            

          

           

          
            EXHIBIT
2.05-B

            to Credit
Agreement

             

            [FORM
OF]

            CONSTRUCTION FUNDING
NOTICE

             

            This
construction funding notice (this "Construction Funding
Notice"), dated as of [______], 200[_],
is delivered to WESTLB AG, NEW YORK BRANCH, as
administrative agent (the "Administrative
Agent"), pursuant to Section 2.05 of the Credit
Agreement, dated as of February __, 2007 (as amended, restated, supplemented or
otherwise modified from time to time, the "Credit Agreement"),
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, PACIFIC ETHANOL IMPERIAL, 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 Borrowers' 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, UNION BANK
OF CALIFORNIA, N.A., as Accounts Bank, WESTLB AG, NEW YORK BRANCH, as Lead
Arranger and Sole Bookrunner, MIZUHO CORPORATE BANK, LTD., as Lead Arranger and
Co-Syndication Agent, CIT CAPITAL SECURITIES LLC, as Lead Arranger and
Co-Syndication Agent, COOPERATIEVE CENTRALE RAIFFEISEN-BOERENLEENBANK B.A.,
"RABOBANK NEDERLAND", NEW YORK BRANCH, as Lead Arranger and Co-Documentation
Agent, and BANCO SANTANDER CENTRAL HISPANO S.A, NEW YORK BRANCH, as Lead
Arranger and Co-Documentation Agent. This Construction Funding Notice sets forth
certain undertakings of the Borrowers with respect to the transactions
contemplated by the Credit Agreement. Capitalized terms used herein but not
otherwise defined herein shall have the respective meanings set forth in the
Credit Agreement.

             

            WHEREAS,
the Borrowers wish to propose a Construction Funding under the Credit Agreement
in accordance with Section 2.05 of the Credit Agreement and on the terms and
conditions set forth therein and herein;

             

            [WHEREAS
the [Stockton] [Brawley] [Burley] Plant is [Greenfield Plant I] [Greenfield
Plant 2] [Greenfield Plant 3];] [To be included when
applicable]

             

             

            
              
                
                

              

              
                2.05-B -
1

                
                  

                

              

              
                
                

              

            

             

             

             

            [WHEREAS
the [Madera] [Boardman] Plant is [In Progress Plant 1] [In Progress Plant 2];]
[To be included when
applicable] and

             

            WHEREAS,
to induce the Lenders to extend credit under the 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. [Note: each
Construction Funding Notice should only include those provisions
applicable to the requested Funding.]

             

            The
Borrowers hereby irrevocably propose a Construction Funding (the "Proposed Construction
Funding") under each of the Loans set forth below in the amounts set
forth below:

             

            (a) [____] Dollars ($([____]), requested to be funded as [Eurodollar Loans] [and [____] Dollars ($[____]) requested to be funded as] [Base Rate Loans]
under the In-Progress Plant 1 Construction Loans;

             

            (b) [____]
Dollars ($[____]), requested to be funded as [Eurodollar Loans]
[and [____] Dollars ($[____]) requested to be funded as] [Base Rate Loans]
under the
In-Progress Plant 2 Construction Loans;

             

            (c) [____]
Dollars ($[____]), requested to be funded as [Eurodollar Loans]
[and [____] Dollars
($[____]) requested to be funded as] [Base Rate Loans] under the
Greenfield Plant 1 Construction Loans [for Stockton Project Costs] [for a
Sponsor Support Reimbursement Funding] [for a Greenfield Top-up Funding, which
amount is less than or equal to the Excess Construction Loan Commitment for the
Stockton Plant] [on the Conversion Date for application in accordance with
Section
2.06(e) of the Credit Agreement];

             

            (d) [____]
Dollars ($[____]),
requested to be funded as [Eurodollar Loans]
[and [____] Dollars ($[____]) requested to be funded as] [Base Rate Loans]
under the
Greenfield Plant 2 Construction Loans [for Brawley Project Costs] [for a Sponsor
Support Reimbursement Funding] [for a Greenfield Top-up Funding, which amount is
less than or equal to the Excess Construction Loan Commitment for the Brawley
Plant] [on the Conversion Date for application in accordance with Section
2.06(e) of the Credit Agreement]; and

             

            (e)
[____] Dollars
($[____]), requested to be funded as [Eurodollar Loans]
[and [____] Dollars ($[____]) requested to be funded as] [Base Rate Loans]
under the
Greenfield Plant 3 Construction Loans [for Burley Project Costs] [for a Sponsor
Support Reimbursement Funding] [for a Greenfield Top-up Funding, which amount
less than or is equal to the Excess Construction Loan Commitment for the Brawley
Plant] [on the Conversion Date for application in accordance with Section
2.06(e) of the Credit Agreement].

             

             

            
              
                
                

              

              
                2.05-B -
2

                
                  

                

              

              
                
                

              

            

             

             

             

             

            The
funding date proposed for such Proposed Construction Funding is
[____], 200[_]
[(the "Proposed
Construction Funding Date"). The Borrowers hereby certify
that this Construction 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 Construction Funding Date, and that the Proposed Construction
Funding Date is a Business Day.

             

            [The
duration of the initial Interest Period for the Eurodollar Loans requested as
[part of] the Proposed Construction Funding is [____] ([__])
months.]

             

            The
Borrowers hereby request that on the Proposed Construction Funding Date the
Administrative Agent deliver by wire transfer, in immediately available funds,
the proceeds of such Proposed Construction Funding in the following amounts as
specified below:

             

            [The
Proposed Construction Funding Date is a date other than the Conversion Date, and
the proceeds of the Proposed Construction Funding are requested to be disbursed
in the manner set forth below:

             

            (a)
[____]Dollars ($[____]) to the Stockton Construction Account, Account No
[____];

             

            
              (b)
[____]Dollars ($[____]) to the Brawley Construction Account, Account No
[____];

               

              
                (c)
[____]Dollars ($[____]) to the Burley Construction Account, Account No
[____];

                 

                
                  (d)
[____]Dollars ($[____]) to the Construction Holding Account, Account No
[____];

                   

                  
                    (e)
[____]Dollars ($[____]) to the Administrative Agent, for the account of the
Lenders, for the payment of interest and Fees due and owing on the
Loans;

                     

                    (f)
[____] Dollars ($[____]) to Pacific Ethanol as a Sponsor Support Reimbursement
Funding to pay amounts due and payable to Pacific Ethanol pursuant to Section
2.04(g) of the Sponsor Support Agreement;

                     

                    (g)
[____] Dollars ($[____]) to the Debt Service Reserve Account for funding of the
Debt Service Reserve Requirement.]

                     

                    [The
Proposed Construction Funding Date is the Conversion Date, and the proceeds of
the Proposed Construction Funding are requested to be disbursed in the manner
set forth in Section 2 (Use of Proceeds)
below.]

                     

                    Section
2. Use of Proceeds. [The
Proposed Construction Funding Date is a date other than the Conversion Date and
the Borrowers shall use the proceeds of the Proposed Construction Funding as set
forth below:

                     

                     

                    
                      
                        
                        

                      

                      
                        2.05-B -
3

                        
                          

                        

                      

                      
                        
                        

                      

                    

                  

                

              

            

             

             

            
              (a)
[____] Dollars ($[____]), for the payment of Stockton Project Costs payable
under invoices attached hereto as Exhibit A1;

               

              (b)
[____] Dollars ($[____]), for the payment of Brawley Project Costs payable under
invoices attached hereto as Exhibit A1;

               

              (a)
[____] Dollars ($[____]), for the payment of Burley Project Costs payable under
invoices attached hereto as Exhibit A1;

               

              (d)
[____] Dollars ($[____]), for the payment of Fees due and owing on the
Loans;

               

              (e)
[____] Dollars ($[____]), for the payment of interest due and owing on the
Loans;

               

              (f)
[____] Dollars ($[____]), to the Construction Holding Account;

               

              (g)
[____] Dollars ($[____]), to Pacific Ethanol as a Sponsor Support Funding for
payment in accordance with the Sponsor Support Agreement;

               

              (h)
[____] Dollars ($[____]), to the Debt Service Reserve Account for funding of the
Debt Service Reserve Requirement; and

               

              (i)
[____] Dollars ($[____]), for the payment of the additional Project Costs set
forth below in the amounts set forth below:

            

             

            [insert
description of Project Costs (other than interest and Fees on the Loans) that
are not included in the attached invoices and that will be paid with proceeds of
the Proposed Construction Funding.]

             

            [The
Proposed Construction Fundings are requested to be made on the Conversion Date
and shall be applied (together with any amount on deposit it or standing to the
credit of the Construction Accounts on the Conversion Date) in the manner set
forth below:

             

            first, [____] Dollars ($[____]) for
deposit into the Debt Service Reserve Account,
which amount, when taken together with all other amounts then on deposit in or
credited to the Debt Service Reserve Account, equals fifty percent (50%) of the
Debt Service Reserve Requirement as of the Conversion Date;

             

            _______________

            1
To be included if invoices are requested by the Independent
Engineer.

             

             

            
              
                
                

              

              
                2.05-B -
4

                
                  

                

              

              
                
                

              

            

             

             

            second,
(i) [____] Dollars ($[____]) to ] for the payment of remaining
Stockton Project Costs, (ii) [____] Dollars ($[____]) to [____]
for the payment
of remaining Brawley Project Costs and (iii) [____] Dollars ($[____]) to
[____] for the
payment of remaining Burley Project Costs;

             

            third,
[____] Dollars ($[____]) to Pacific Ethanol, which amount is equal to
all Sponsor Support Reimbursement Fundings requested to be made on the
Conversion Date;

             

            fourth,
[____] Dollars ($[____]) to Pacific Ethanol, which amount is equal to
the aggregate amount of (A) all Greenfield Plant Top-Up Fundings that have not
been utilized to fund Required Equity Contributions or Project Costs plus
(B) all undisbursed Excess Construction Loan Commitments; and

             

            fifth,
[____] Dollars ($[____]), to the Revenue Account.

             

            Section
3. Certifications.
The Borrowers certify that on the date hereof, and as of the Proposed
Construction Funding Date: [Note: each Construction Funding
Notice should only
include those provisions applicable to the requested
Funding.]

             

            (a) the
aggregate principal amount of Greenfield Plant 1 Construction Loans disbursed
prior to the Commercial Operation Date of Greenfield Plant 1 (taken together
with the Working Capital Plant Commitment for Greenfield Plant 1), after giving
effect to any Greenfield Plant 1 Fundings requested hereunder, does not exceed
the lesser of (x) forty percent (40%) of budgeted Project Costs for Greenfield
Plant 1 (as set forth in the current Construction Budget for such Plant) and (y)
forty-five million Dollars ($45,000,000);

             

            (b) the
aggregate principal amount of all Greenfield Plant 1 Construction
Loans disbursed on or prior to the Conversion Date (taken together with the
Working Capital Plant Commitment for such Plant), after giving effect to any
Greenfield Plant 1 Fundings requested hereunder, does not exceed sixty-five
percent (65%) of the aggregate actual and documented Project Costs for
Greenfield Plant 1;

             

            (c) the
Proposed Construction Funding is the Greenfield Plant Top-Up Funding
for Greenfield Plant 1 (and Greenfield Plant 1 has achieved its Commercial
Operation Date), the amount of such Proposed Construction Funding is less than
or equal to the Excess Construction Loan Commitment for such Plant, and no
Top-Up Funding has previously been requested for such Plant;

             

            (d) the
aggregate principal amount of Greenfield Plant 2 Construction Loans
disbursed prior to the Commercial Operation Date of such Plant (taken together
with the Working Capital Plant Commitment for such Plant), after giving effect
to any

             

             

            
              
                
                

              

              
                2.05-B -
5

                
                  

                

              

              
                
                

              

            

             

             

             

            Greenfield
Plant 2 Fundings requested hereunder, does not exceed the lesser of (x) forty
percent (40%) of budgeted Project Costs for Greenfield Plant 2 (as set forth in
the current Construction Budget for such Plant and (y) forty-five million
Dollars ($45,000,000);

             

            (e) the
aggregate principal amount of all Greenfield Plant 2 Construction Loans
disbursed on or prior to the Conversion Date (taken together with the Working
Capital Plant Commitment for such Plant), after giving effect to any Greenfield
Plant 2 Fundings requested hereunder, does not exceed sixty-five percent (65%)
of the aggregate actual and documented Project Costs for Greenfield Plant
2;

             

            (f) the
Proposed Construction Funding is the Greenfield Plant Top-Up Funding for
Greenfield Plant 2 (and Greenfield Plant 2 has achieved its Commercial Operation
Date), the amount of such Proposed Construction Funding is less than or equal to
the Excess Construction Loan Commitment for such Plant, and no Top-Up Funding
has previously been requested for such Plant;

             

            (g) the
aggregate principal amount of Greenfield Plant 3 Construction Loans disbursed
prior to the Commercial Operation Date of such Plant (taken together with the
Working Capital Plant Commitment for such Plant), after giving effect to any
Greenfield Plant 3 Fundings requested hereunder, does not exceed the lesser of
(x) forty percent (40%) of budgeted Project Costs for Greenfield Plant 3 (as set
forth in the current Construction Budget for such Plant) and (y) forty-five
million Dollars ($45,000,000);

             

            (h) the
aggregate principal amount of all Greenfield Plant 3 Construction Loans
disbursed on or prior to the Conversion Date (taken together with the Working
Capital Plant Commitment for such Plant), after giving effect to any Greenfield
Plant 3 Fundings requested hereunder, does not exceed sixty-five percent (65%)
of the aggregate actual and documented Project Costs for Greenfield Plant
3;

             

            (i) the
Proposed Construction Funding is the Greenfield Plant Top-Up Funding for
Greenfield Plant 3 (and Greenfield Plant 3 has achieved its Commercial Operation
Date), the amount of such Proposed Construction Funding is less than or equal to
the Excess Construction Loan Commitment for such Plant, and no Top-Up Funding
has previously been requested for such Plant;

             

            (j) assuming
that the Agents and Lead Arrangers are satisfied with or have approved each of
the matters, documents and other deliverables that, in accordance with Article
VI of the Credit Agreement are required to be satisfactory to such Agent or Lead
Arranger, each of the conditions to the Proposed Construction Funding set forth
in Article VI of the Credit Agreement have been satisfied (other than on the
date of this notice those conditions that may be satisfied on the Proposed
Construction Funding Date, which the Borrowers hereby confirm will be satisfied
prior to the Proposed Construction

             

             

            
              
                
                

              

              
                2.05-B -
6

                
                  

                

              

              
                
                

              

            

             

             

             

            Funding
[; provided,
that [(i) the deliverables required to satisfy the conditions set forth in
Sections [insert relevant
section references] of the Credit Agreement are being delivered to the
Administrative Agent on the date hereof to hold in escrow pending automatic
release and delivery on the Funding Date for the Proposed Construction Funding
and (ii) in the case of the approval of the Independent Engineer's updated
report required pursuant to Section 6.04(i)(i) of the Credit Agreement, such
updated report has been delivered to the Lenders at least ten (10) days prior to
the date hereof and, as of the date hereof, the Borrowers have not received
objections to such report from fifty percent (50%) or more of the
Lenders];

             

            (k) the
Borrowers are in compliance with all applicable conditions set forth in
Article VI of the Credit Agreement that are required to be satisfied as of the
date of this representation, on and as of the Proposed Construction Funding
Date, before and after giving effect to such Proposed Construction Funding and
to the application of the proceeds therefrom;

             

            (l)
each of
the Funding Representations and Warranties made by each of the
Borrowers, the Pledgor and Pacific Ethanol in each of the Financing Documents to
which it is a party 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 Construction Funding and
to the application of the proceeds of such Proposed Construction
Funding;

             

            (m) [after
giving effect to any Construction Loan Fundings requested to be made on the
Conversion Date and any payments under Section 2.06(e)(iii) of the Credit
Agreement, the total aggregate amounts disbursed under the Construction Loans
taken together with the Aggregate Working Capital Loan Commitment do not exceed
sixty-five percent (65%) of the aggregate actual and documented Project Costs
for all Greenfield Plants that have achieved their respective Commercial
Operation Dates and with respect to which any funding has been made;]2

             

            (n) no
Funding Default or Event of Default has occurred and is continuing or would
occur as a result of the Construction Funding;

             

            _____________

            2
To be included only for Fundings requested on the Conversion Date.

             

             

            
              
                
                

              

              
                2.05-B -
7

                
                  

                

              

              
                
                

              

            

             

             

            (o) since
September 30, 2006, no Material Adverse Effect has occurred and is
continuing;

             

            (p) [the
amounts of all previous Construction Fundings for the [____] Plant
have been (or will be) applied to approved Project Costs for such Plant
in a
manner consistent with the relevant Construction Funding Notice(s);]3

             

            (q) [each of
the Madera Funding and the Boardman Funding has occurred];4

             

            (r)
all and
each of the statements contained in this Construction Funding Notice are true
and correct.

             

            Section
4. Delivery of Additional Documents.5
On the date hereof, together with this Construction Funding Notice, the
Borrowers are delivering to the Administrative Agent the following documents as
additional conditions precedent to the Proposed Construction
Funding:

             

            (a) [attached
hereto as Exhibit
A, invoices requested by the Independent Engineer for all Project Costs
(other than interest and Fees on the Loans) requested by the Independent
Engineer and that are proposed to be paid with proceeds of the Proposed
Construction Funding, each of which has been certified as true and correct in
all material respects by the Borrowers' Agent and the relevant Construction
Contractor;] [To be included if
requested by the Independent Engineer.]

             

            (b) attached
hereto as Exhibit
B, conditional sworn Lien waiver statements evidencing receipt of payment
by the Construction Contractors, all subcontractors, and all other Persons [who
were paid from the proceeds of the last preceding Construction Loan Funding]
[with respect to all payments due and payable by

             

             

            _______

            3
To be included only for Greenfield Plant Fundings prior to the Commercial
Operation Date for each Plant.

             

            4
To be included with respect to each Greenfield Plant Funding.

             

            5
These
documents are required to be delivered only in connection with Construction
Fundings (other than for Sponsor Support Reimbursement Fundings) for Greenfield
Plants prior to their Commercial Operation Date.

             

             

            
              
                
                

              

              
                2.05-B -
8

                
                  

                

              

              
                
                

              

            

             

             

             

             

            the
Borrowers since the date of the Credit Agreement to any Person to be paid with
the proceeds of the Proposed Construction Funding], [(excluding Lien waiver
statements for amounts less than one million Dollars ($1,000,000) on an
aggregate basis)] in each such case for the Plant with respect to which such
Proposed Construction Funding is being requested. Each such Lien waiver
statement (i) is dated on or about the date of this Construction Funding Notice
(or, in the case of Lien Waivers relating to work done at an earlier date, may
be dated on or about the date that such work was completed), and (ii)
covers all work done and all sums received by such contractor through the date
[of the last preceding Construction Loan Funding for such Plant] [the Credit
Agreement], each of which is hereby certified as true and correct and complete
by the Borrowers' Agent and has been verified by the Independent
Engineer;

             

            (c) attached
hereto as Exhibit
C, a list, for each Plant with respect to which
such Proposed Construction Funding is being requested, of (i) all Change Orders
that have not previously been submitted to the Administrative Agent, copies of
which have been submitted to the Independent Engineer prior to the date of this
Construction Funding Notice, (ii) all Change Orders to the date of this
Construction Funding Notice, and (iii) all contemplated Change Orders, each of
which is (other than contemplated Change Orders that have not yet been agreed to
by the relevant Borrower) in compliance with Section 7.02(m)(iii) of the Credit
Agreement;

             

            (d) [attached
hereto as Exhibit
D, for each Plant with respect to which such Proposed Construction
Funding is being requested, a detailed receipt for payment itemized by Line Item
in such Plant's Construction Budget evidencing [that the full amount of the
proceeds of the last preceding Construction Funding has been paid out by the
Borrowers or the Construction Contractors to the Persons with respect to whom
such Construction Loan proceeds were disbursed and otherwise in accordance with
the Credit Agreement] [receipt of all payments due and payable by the Borrowers
to the Construction Contractors, all subcontractors, and all other Persons since
the date of the Credit Agreement] .]6

             

            Section
5.Governing
Law. This Construction Funding Notice shall be
governed by, and construed in accordance with, the laws of the State of New
York, United States of America.

             

            ______

            6
To be included if such evidence has been requested by the Administrative Agent
or the Independent Engineer.

             

             

            
              
                
                

              

              
                2.05-B -
9

                
                  

                

              

              
                
                

              

            

             

             

            Section
6.Execution in
Counterparts. This Construction 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 Construction 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.]

             

             

             

             

             

             

             

             

             

             

             

            
              
                
                

              

              
                2.05-B -
10

                
                  

                

              

              
                
                

              

            

             

            
               

               

              IN WITNESS WHEREOF, the
undersigned have caused this Construction Funding Notice to be duly executed and
delivered as of the day and year first written above.

               

              
                 

                 

                
                  
                    	 
      	
                            PACIFIC ETHANOL HOLDING CO.
      LLC

                          
	 	 
	 	 
	 
      	
                            By:
      _______________________________

                          
	 
      	
                            Name:

                          
	 
      	
                            Title:

                          
	 	 
	 	 
	 	 
	 
      	
                            PACIFIC ETHANOL MADERA
  LLC

                          
	 	 
	 	 
	 
      	
                            By:
      _______________________________

                          
	 
      	
                            Name:

                          
	 
      	
                            Title:

                          
	 	 
	 	 
	 
      	
                            PACIFIC ETHANOL COLUMBIA,
    LLC

                          
	 	 
	 	 
	 
      	
                            By:
      _______________________________

                          
	 
      	
                            Name:

                          
	 
      	
                            Title:

                          
	 	 
	 	 
	 
      	
                            PACIFIC ETHANOL STOCKTON,
    LLC

                          
	 	 
	 	 
	 
      	
                            By:
      _______________________________

                          
	 
      	
                            Name:

                          
	 
      	
                            Title:

                          

                  

                

                 

                 

                
                  
                    
                    

                  

                  
                    2.05-B -
11

                    
                      

                    

                  

                  
                    
                    

                  

                

              

               

               

              
                 

                 

                
                  
                    	 
      	
                            PACIFIC ETHANOL IMPERIAL,
    LLC

                          
	 	 
	 	 
	 
      	
                            By:
      _______________________________

                          
	 
      	
                            Name:

                          
	 
      	
                            Title:

                          
	 	 
	 	 
	 	 
	 
      	
                            PACIFIC ETHANOL MAGIC
      VALLEY, LLC

                          
	 	 
	 	 
	 
      	
                            By:
      _______________________________

                          
	 
      	
                            Name:

                          
	 
      	
                            Title:

                          
	 	 
	 	 

                  

                

                 

              

               

               

               

               

               

               

               

               

               

               

              
                
                  
                  

                

                
                  2.05-B -
12

                  
                    

                  

                

                
                  
                  

                

              

               

            

             

            Exhibit
A

            to Construction Funding
Notice

             

            INVOICES FOR ADDITIONAL
PAYMENTS

            [If requested]

             

             

             

             

             

             

             

             

             

             

             

             

             

             

             

            
              
                
                

              

              
                2.05-B -
Exhibit

                
                  

                

              

              
                
                

              

            

             

            Exhibit
B

            to Construction Funding
Notice

             

            LIEN WAIVER
STATEMENTS

             

             

             

             

             

             

             

             

             

             

             

             

             

             

            
              
                
                

              

              
                2.05-B - Exhibit

                
                  

                

              

              
                
                

              

            

             

             

            Exhibit
C

            to Construction Funding
Notice

             

            CHANGE
ORDERS

             

             

             

             

             

             

             

             

             

             

             

             

             

             

             

             

             

             

             

            
              
                
                

              

              
                2.05-B - Exhibit

                
                  

                

              

              
                
                

              

            

             

            Exhibit
D

            to Construction Funding
Notice

             

            RECEIPTS OF
PAYMENT

             

             

            [If
requested]

             

             

             

             

             

             

             

             

             

             

             

             

             

             

             

             

             

             

             

             

            
              
                
                

              

              
                2.05-B - Exhibit

                
                  

                

              

              
                
                

              

            

             

             

            
              EXHIBIT
2.07

              to Credit
Agreement

               

              [FORM
OF NOTE]

               

              [Tranche
A Construction] [Tranche B Construction] [Working Capital] 

              [Tranche
A Term]
[Tranche B Term] Note

               

              
                	
                        $[____]

                      	 
      	
                        [________]

                        [____].
      [__]

                      

              

               

               

              FOR VALUE
RECEIVED, PACIFIC ETHANOL HOLDING CO. LLC, PACIFIC ETHANOL MADERA LLC, PACIFIC
ETHANOL COLUMBIA, LLC, PACIFIC ETHANOL STOCKTON, LLC, PACIFIC ETHANOL IMPERIAL,
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 [Tranche A Construction] [Tranche B
Construction] [Working Capital] [Tranche A Term] [Tranche B Term] Loans made by
the Lender to
the Borrowers under the Credit Agreement, dated as of February __, 2007
(as
amended, restated, supplemented or otherwise modified from time to time, the
"Credit Agreement") among the Borrowers, jointly and severally, Pacific Holding,
as Borrowers' 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, UNION BANK OF
CALIFORNIA, N.A., as Accounts Bank, WESTLB AG, NEW YORK BRANCH, as Lead Arranger
and Sole Bookrunner, MIZUHO CORPORATE BANK, LTD., as Lead Arranger and
Co-Syndication Agent, CIT CAPITAL SECURITIES LLC, as Lead Arranger and
Co-Syndication Agent, COOPERATIEVE CENTRALE RAIFFEISEN­BOERENLEENBANK B.A.,
"RABOBANK NEDERLAND", NEW YORK BRANCH, as Lead Arranger and Co-Documentation
Agent, and BANCO SANTANDER CENTRAL HISPANO S.A, NEW YORK BRANCH, as Lead
Arranger and Co-Documentation Agent. Capitalized terms used herein but not
otherwise defined herein shall have the respective meanings set forth in the
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 Credit Agreement and (ii) fees at such times and at
such rates and amounts as specified in the Credit Agreement.

               

               

               

              
                
                  
                  

                

                
                  2.07 - 1

                  
                    

                  

                

                
                  
                  

                

              

               

               

               

              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 Credit Agreement.

               

              This
[Tranche A Construction] ]Tranche B Construction] [Working Capital] [Tranche A
Term] [Tranche B Term] Note is entitled to the benefits and is

              subject
to the terms and conditions of the Credit Agreement, and is entitled to the
benefits of the security provided under the Security Documents. As provided in
the Credit Agreement, this [Tranche A Construction] [Tranche B Construction]
[Working

               

              Capital]
[Tranche A Term] [Tranche B Term] 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 Credit Agreement.

               

              The
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
[Tranche A Construction] [Tranche B Construction] [Working Capital] [Tranche A
Term] [Tranche B Term] Note and made a part hereof) an appropriate notation
evidencing the date and amount of the [Tranche A Construction] [Tranche B
Construction] [Working Capital]
[Tranche A Term] [Tranche B Term] Loans evidenced hereby and the date and amount
of each principal payment in respect thereof, or (ii) to record such [Tranche A
Construction] [Tranche B Construction] [Working Capital] [Tranche A Term]
[Tranche B Term] 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 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 [Tranche A Construction] [Tranche B
Construction] [Working Capital] [Tranche A Term] [Tranche B Term] Note. All
amounts payable under this [Tranche A Construction] [Tranche B Construction]
[Working Capital]
[Tranche A Term] [Tranche B Term] 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 [Tranche A Construction] [Tranche B
Construction] [Working

               

               

              
                
                  
                  

                

                
                  2.07 - 2

                  
                    

                  

                

                
                  
                  

                

              

               

               

              Capital]
[Tranche A Term] [Tranche B Term] Note, in accordance with and to the extent
provided by the Credit Agreement.

               

               

               

               

               

               

               

               

               

               

               

               

               

               

               

               

               

               

               

              
                
                  
                  

                

                
                  2.07 - 3

                  
                    

                  

                

                
                  
                  

                

              

               

               

               

              THIS
[TRANCHE A CONSTRUCTION] [TRANCHE B CONSTRUCTION] [WORKING CAPITAL] [TRANCHE A
TERM] [TRANCHE B TERM] 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: ___________________________

              Name:

              Title:

               

               

              PACIFIC ETHANOL MADERA LLC,

              a
Delaware limited liability company

               

              By: ___________________________

              Name:

              Title:

               

               

               

              PACIFIC ETHANOL COLUMBIA, LLC,

              a
Delaware limited liability company

               

              By: ___________________________

              Name:

              Title:

               

               

               

               

              
                
                  
                  

                

                
                  2.07 - 4

                  
                    

                  

                

                
                  
                  

                

              

               

               

              PACIFIC ETHANOL STOCKTON, LLC,

              a
Delaware limited liability company

               

              By: ___________________________

              Name:

              Title:

               

               

              PACIFIC ETHANOL IMPERIAL, LLC,

              a
Delaware limited liability company

               

              By: ___________________________

              Name:

              Title:

               

               

              PACIFIC ETHANOL MAGIC VALLEY, LLC,

              a
Delaware limited liability company

               

              By: ___________________________

              Name:

              Title:

               

               

               

              
                
                  
                  

                

                
                  2.07 - 5

                  
                    

                  

                

                
                  
                  

                

              

               

               

              Schedule
to

              [Tranche A Construction]
[Tranche B Construction] [Working Capital] [Tranche A

              Term] [Tranche B Term]
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

                      
	 
      	 
      	 
      	 
      	 
      	 
      

              

              

               

               

               

               

               

               

               

               

               

               

               

               

               

               

               

               

               

               

               

              
                
                  
                  

                

                
                  2.07 - 6

                  
                    

                  

                

                
                  
                  

                

              

               

              
                EXHIBIT
2.09-B 

                to Credit
Agreement

                 

                [FORM
OF]

                TRANCHE CONVERSION
NOTICE

                 

                Date:
[____ __, ____]

                 

                [ADMINISTRATIVE
AGENT] 

                [ADDRESS]

                 

                [BORROWERS'
AGENT] 

                [ADDRESS]

                 

                This
notice (this "Tranche Conversion Notice") is
being delivered by [_____], a lender (a "Tranche Reallocation Eligible
Lender") pursuant to Section 2.09 of
the Credit Agreement (as amended, modified or otherwise supplemented from time
to time in accordance with its terms, the "Credit Agreement"), dated as of
February [_], 2007, 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,
PACIFIC ETHANOL IMPERIAL, 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 Borrowers' 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, UNION BANK OF CALIFORNIA, N.A., as Accounts Bank, WESTLB AG,
NEW YORK BRANCH, as Lead Arranger and Sole Bookrunner, MIZUHO CORPORATE BANK,
LTD., as Lead Arranger and Co-Syndication Agent, CIT CAPITAL SECURITIES LLC, as
Lead Arranger and Co-Syndication Agent, C(EPERATIEVE CENTRALE
RAIFFEISEN­BOERENLEENBANK B.A., "RABOBANK NEDERLAND", NEW YORK BRANCH, as
Lead Arranger and Co-Documentation Agent, and BANCO SANTANDER CENTRAL HISPANO
S.A, NEW YORK BRANCH, as Lead Arranger and Co-Documentation Agent. Capitalized
terms used herein but not otherwise defined herein shall have the respective
meanings set forth in the Credit Agreement.

                 

                 

                 

                
                  
                    
                    

                  

                  
                    2.09 - 1

                    
                      

                    

                  

                  
                    
                    

                  

                

                 

                 

                 

                As of the
date of this Tranche Conversion Notice (the "Tranche Conversion Notice
Date"), the undersigned hereby provides notice that1:

                 

                1. it is
exercising its right to convert the amount of its Tranche Reallocation Eligible
Commitments set forth in Annex A hereto;

                 

                2. such
conversion shall become effective on [insert date that is five (5) Business
Days from the Tranche Conversion Notice Date] [the Funding Date for In-Progress
Plant 2, which, as set forth in the most recent Funding Notice, is expected to
be [____], which
date is less than five (5) Business Days after the date hereof,] (the
"Tranche
Conversion Date");

                 

                3. the
Tranche Reallocation Eligible Lender will fund such converted Tranche B Loans to
the Escrow Account as required pursuant to Section 2.09(c) of
the Credit Agreement and in accordance with the funding procedures set forth in
Section 2.06
(Funding
of Loans) of the Credit Agreement; and

                 

                4. [the
Tranche Reallocation Eligible Lender has previously received a Note with respect
to its Tranche Reallocation Eligible Commitment and hereby requests that, on the
Tranche Conversion Date, a replacement Note be issued reflecting the conversion
to be made hereunder.]

                 

                [The
remainder of this page is intentionally blank. The next page is the signature
page.]

                 

                 

                 

                _______

                1 The conversions
contemplated by this Tranche Conversion Notice may take place no later than the
earlier to occur of (x) the date that is six (6) months from the date of the
Credit Agreement and (y) the Business Day immediately following the date of the
Funding Notice for In-Progress Plant 2.

                 

                 

                 

                
                  
                    
                    

                  

                  
                    2.09 - 2

                    
                      

                    

                  

                  
                    
                    

                  

                

                 

                Annex
A

                to Tranche Conversion
Notice

                 

                Tranche Reallocation
Eligible Commitments

                 

                
                  	
                          Loan

                        	
                          Undisbursed

                          Tranche
      A

                          Commitments

                        	
                          Undisbursed

                          Tranche
      B

                          Commitments

                        
	
                          Pre-
      Conversion

                        	
                          $

                        	
                          $

                        
	
                          Post-
      Conversion

                        	
                          $

                        	
                          $

                        

                

                

                 

                 

                 

                 

                 

                 

                 

                 

                 

                 

                 

                
                  
                    
                    

                  

                  
                    2.09 - 3

                    
                      

                    

                  

                  
                    
                    

                  

                

              

            

          

        

      

    

     

     

    
      EXHIBIT
3.05

      to 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_agency services@westlb.com

       

      
        	
                Re:

              	
                PACIFIC
      ETHANOL HOLDING CO. LLC, PACIFIC ETHANOL MADERA LLC, PACIFIC ETHANOL
      COLUMBIA, LLC, PACIFIC ETHANOL STOCKTON, LLC, PACIFIC ETHANOL IMPERIAL,
      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, PACIFIC ETHANOL
IMPERIAL, LLC, and PACIFIC ETHANOL MAGIC VALLEY, LLC (collectively, the "Borrowers"), refer to the
Credit Agreement, dated as of February __, 2007 (as amended, restated,
supplemented or otherwise modified from time to time, the "Credit
Agreement") among the Borrowers, PACIFIC ETHANOL HOLDING CO. LLC,
as Borrowers' 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, UNION BANK OF
CALIFORNIA, N.A., as Accounts Bank, WESTLB AG, NEW YORK BRANCH, as Lead Arranger
and Sole Bookrunner, MIZUHO CORPORATE BANK, LTD., as Lead Arranger and
Co-Syndication Agent, CIT CAPITAL SECURITIES LLC, as Lead Arranger and
Co-Syndication Agent, COOPERATIEVE CENTRALE RAIFFEISEN­BOERENLEENBANK B.A.,
"RABOBANK NEDERLAND", NEW YORK BRANCH, as Lead Arranger and Co-Documentation
Agent, and BANCO SANTANDER CENTRAL HISPANO S.A, NEW YORK BRANCH, as Lead
Arranger and Co-Documentation Agent. Capitalized terms used herein but not
otherwise defined herein shall have the respective meanings set forth in the
Credit Agreement.

       

       

       

       

      
        
          
          

        

        
          3.05 - 1

          
            

          

        

        
          
          

        

      

       

       

       

      The
Borrowers hereby deliver to the Administrative Agent this irrevocable notice
pursuant to Section 3.05 of the 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 Quarterly
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 this Interest Period Notice is being delivered
[prior to the Conversion Date and, after giving effect to the immediately
succeeding Interest Periods set forth on Schedule
1, there will be no more than seven (7) separate Eurodollar Loans
outstanding] [on and after the Conversion Date and, after giving effect to the
immediately succeeding Interest Periods set forth on Schedule
1, there will be no more than four (4) 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.]

       

       

       

       

       

       

      
        
          
          

        

        
          3.05 - 2

          
            

          

        

        
          
          

        

      

       

       

       

      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: ________________________

      Name:

      Title:

       

       

      PACIFIC
ETHANOL MADERA, LLC

       

      By: ________________________

      Name:

      Title:

       

       

      PACIFIC
ETHANOL COLUMBIA, LLC

       

      By: ________________________

      Name:

      Title:

       

       

      PACIFIC
ETHANOL STOCKTON, LLC

      By: ________________________

      Name:

      Title:

       

       

       

       

       

       

      
        
          
          

        

        
          3.05 - 3

          
            

          

        

        
          
          

        

      

       

       

      PACIFIC
ETHANOL IMPERIAL, LLC

       

      By: ________________________

      Name:

      Title:

       

       

      PACIFIC
ETHANOL MAGIC VALLEY, LLC

       

      By: ________________________

      Name:

      Title:

       

       

       

       

       

       

       

       

       

      
        
          
          

        

        
          3.05 - 4

          
            

          

        

        
          
          

        

      

       

       

      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

                QUARETERLY

                PERIOD
      ENDS

                ON

              	
                DURATION
      OF

                IMMEDIATELY

                SUCCEEDING

                INTEREST

                PERIOD'

                (for
      Eurodollar

                Loans
      only)

              
	 
      	
                $

              	 
      	 
      	 
      
	 
      	
                $

              	 
      	 
      	 
      

      

      

       

       

       

       

       

       

       

       

      ________

      1
At
the Borrowers' election, the duration of such Interest Period shall be either
one (1), two (2), three (3) or six (6) months.

       

       

       

      
        
          
          

        

        
          3.05 - 5

          
            

          

        

        
          
          

        

      

       

       

      
        EXHIBIT
4.07 

        to Credit
Agreement

         

        FORM
OF NON-U.S. LENDER STATEMENT

         

        Reference
is made to the Credit Agreement (as amended, modified or otherwise supplemented
from time to time in accordance with its terms, the "Credit  Agreement"), dated as of
February [__],
2007, 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, PACIFIC
ETHANOL IMPERIAL, 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 Borrowers' 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, UNION BANK OF CALIFORNIA, N.A., as Accounts Bank, WESTLB AG, NEW YORK
BRANCH, as Lead Arranger and Sole Bookrunner, MIZUHO CORPORATE BANK, LTD., as
Lead Arranger and Co-Syndication Agent, CIT CAPITAL SECURITIES LLC, as Lead
Arranger and Co-Syndication Agent, COOPERATIEVE CENTRALE
RAIFFEISEN-BOERENLEENBANK B.A., "RABOBANK NEDERLAND", NEW YORK BRANCH, as Lead
Arranger and Co-Documentation Agent, and BANCO SANTANDER CENTRAL HISPANO S.A,
NEW YORK BRANCH, as Lead Arranger and Co-Documentation Agent. Capitalized terms
used herein but not otherwise defined herein shall have the respective meanings
set forth in the 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.

         

         

         

         

         

        
          
            
            

          

          
            4.07 - 1

            
              

            

          

          
            
            

          

        

         

         

         

        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 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:
________________________

         

        Print
Name: 

        Title:

        Date:

         

         

         

         

         

         

         

         

         

         

        
          
            
            

          

          
            4.07 - 2

            
              

            

          

          
            
            

          

        

         

        
          
            EXHIBIT
6.01(k) 

            to Credit
Agreement

          

           

          INSURANCE CONSULTANT'S
CERTIFICATE

           

           

          Moore

          McNeil

           

          [DATE]

           

          WestLB
AG, New York Branch,

          as
Administrative Agent for the Lenders

          1211 Ave
of Americas 

          New York,
NY 10036 

          Attention:
Yolette Salnave / Andrea Bailey

          Facsimile:
212-302-7946

          Email:
ny_agency services@westlb.com

           

          
            	
                                 
      Re:

                  	
                    PACIFIC
      ETHANOL HOLDING CO. LLC, PACIFIC ETHANOL MADERA LLC, PACIFIC ETHANOL
      COLUMBIA, LLC, PACIFIC ETHANOL STOCKTON, LLC, PACIFIC ETHANOL IMPERIAL,
      LLC, AND PACIFIC ETHANOL MAGIC VALLEY,
LLC

                  

          

           

           

          Ladies
and Gentlemen:

           

          The
undersigned has acted as Insurance Consultant for the Lenders with respect to
PACIFIC ETHANOL HOLDING CO. LLC ("Pacific Holding"), a Delaware
limited liability company, PACIFIC ETHANOL MADERA LLC ("Madera"), a Delaware
limited liability company, PACIFIC ETHANOL COLUMBIA, LLC ("Boardman"), a Delaware limited
liability company, PACIFIC ETHANOL STOCKTON, LLC ("Stockton"), a Delaware limited
liability company, PACIFIC ETHANOL IMPERIAL, LLC ("Brawley"), a Delaware limited
liability company and PACIFIC ETHANOL MAGIC VALLEY, LLC ("Burley"), a Delaware limited liability
company (together, the "Borrowers") in connection with that
certain Credit Agreement (as amended, supplemented or otherwise modified from
time to time, the  "Credit
Agreement") ,dated as of February __, 2007, by and among the Borrowers,
PACIFIC ETHANOL HOLDING
CO. LLC, as Borrowers' 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, UNION BANK OF
CALIFORNIA, N.A., as Accounts Bank, WESTLB AG, NEW YORK BRANCH, as
Lead

           

           

           

          
            
              
              

            

            
              6.01(k) - 1

              
                

              

            

            
              
              

            

          

           

           

          Arranger
and Sole Bookrunner, MIZUHO CORPORATE BANK, LTD., as Lead Arranger and
Co-Syndication Agent, CIT CAPITAL SECURITIES LLC, as Lead Arranger and
Co-Syndication Agent, COOPERATIEVE CENTRALE RAIFFEISEN-BOERENLEENBANK B.A.,
"RABOBANK NEDERLAND", NEW YORK BRANCH, as Lead Arranger and Co-Documentation
Agent, and BANCO SANTANDER CENTRAL HISPANO S.A, NEW YORK BRANCH, as Lead
Arranger and Co-Documentation Agent. Capitalized terms used herein but not
defined herein shall have the respective meanings assigned to such terms in the
Credit Agreement.

           

          The
Insurance Consultant acknowledges that pursuant to the Credit Agreement, the
Lenders will be providing financing to the Borrowers for the construction of the
Project and in so doing will be relying on this certificate and the Insurance
Consultant's report dated [___________]. The
Insurance Consultant certifies that attached hereto as Exhibit A is a true,
correct and complete copy of such report, and that such report represents the
Insurance Consultant's professional opinion as of the date thereof. Further,
since the date of the aforementioned Insurance Consultant's report, nothing has
come to our attention that would cause us to change that report.

           

          The
Insurance Consultant hereby further certifies to the Administrative Agent
that:

           

          
            	
                  	
                    (i)

                  	
                    [except
      as set forth in Exhibit B
      attached hereto,1 [the
      Borrowers have]] [[Madera] [Boardman/ [Stockton] [Brawley] [Burley]
      [has]]2
      evidenced all insurance binders required pursuant to and in accordance
      with Section
      7.01(h) of the Credit Agreement, and its [insurance broker] [insurance
      carrier] has executed a letter confirming that all such insurance policies
      are in full force and effect;

                  

          

           

          
            
              	
                    	
                      (ii) 

                    	
                      [the
      deficiencies with respect to the insurance for the [Madera] [Boardman]
      [Stockton] [Brawley] [Burley] Plant identified in the Insurance
      Consultant's report delivered on the Closing Date have been satisfactorily
      addressed;] 3
      and

                    

            

          

           

          
            
              	
                    	
                      (iii) 

                    	
                      each
      such insurance policy is placed with insurance carriers with an AM Best, A
      "X" or equivalent credit rating or are otherwise acceptable to the
      Insurance Consultant;

                    

            

          

           

           

          __________

          1 To be
included (if applicable) only at closing.

           

          2
For the first Funding for each Plant, only the applicable Plant will be
covered.

           

          3
Only applicable for the first Funding for that Plant.

           

           

           

          
            
              
              

            

            
              6.01(k) - 2

              
                

              

            

            
              
              

            

          

           

          The
Borrowers' [insurance broker] [insurance carrier] has evidenced binders and has
confirmed that:

           

          
            	
                    ·    
        

                  	
                    each
      such insurance policy has been endorsed with the Administrative Agent and
      the Senior Secured Parties as Additional Insured and First Loss Payee
      (where applicable);

                  

          

           

          
            	
                    ·    
        

                  	
                    each
      such insurance policy permits a waiver of subrogation for the benefit of
      the Senior Secured Parties;

                  

          

           

          
            	
                    ·    
        

                  	
                    each
      such insurance policy is primary (without contribution from any other
      policies the Senior Secured Parties may
hold);

                  

          

           

          
            	
                    ·    
        

                  	
                    each
      such insurance policy (where legally allowed) contains non-vitiation
      language to ensure such insurance policy will remain in full force and
      effect for the benefit of the Senior Secured
  Parties;

                  

          

           

          
            	
                    ·    
        

                  	
                    each
      such insurance policy contains a non-invalidation endorsement that
      provides the ability (but not the obligation) for the Senior Secured
      Parties to pay premium and continue coverage in the event that any
      Borrower fails to make premium payments;
and

                  

          

           

          
            	
                    ·    
        

                  	
                    each
      such insurance policy provides a minimum of 30-days' written notice of
      cancellation to Administrative Agent, except for cancellation based on
      non­payment of premium which provides for 10 days' prior written
      notice.

                  

          

           

          It is our
opinion that on the basis of the binders and information evidenced to us by the
Borrowers and its [insurance broker] [insurance carrier], the insurance
evidenced is in compliance with the material insurance requirements of the
Project Documents and with the requirements of the Credit Agreement [other than
as noted on Exhibit
B hereto].

           

          A copy of
the Borrowers' [insurance broker's] [insurance carrier's] certificate confirming
the matters set forth above is attached hereto as Exhibit
C.

           

          [The
remainder of this page is intentionally blank. The next page is the signature
page.]

           

           

           

           

          
            
              
              

            

            
              6.01(k) - 3

              
                

              

            

            
              
              

            

          

           

          IN
WITNESS WHEREOF, the undersigned has caused this Insurance Consultant's
Certificate to be duly executed by an authorized officer as of the date first
above written.

           

           

           

          MOORE-MCNEIL,
LLC

           

           

           

          By: ____________________________

          Name:

          Title:

           

           

           

           

           

           

           

           

           

           

           

          
            
              
              

            

            
              6.01(k) - 4

              
                

              

            

            
              
              

            

          

           

          EXHIBIT
A

          to
Insurance Consultant's Certificate

           

          INSURANCE CONSULTANT'S
REPORT

           

           

           

           

           

           

           

           

           

           

           

           

           

           

           

           

           

           

          
            
              
              

            

            
              6.01(k) - 5

              
                

              

            

            
              
              

            

          

           

          EXHIBIT
B

          to Insurance Consultant's
Certificate

           

           

           

           

          INSURANCE
DEFICIENCIES

           

           

           

           

           

           

           

           

           

           

           

           

           

           

           

           

           

           

          
            
              
              

            

            
              6.01(k) -
6

              
                

              

            

            
              
              

            

          

          EXHIBIT
C

          to Insurance Consultant's
Certificate

           

          CERTIFICATE
OF BORROWERS' [INSURANCE BROKER] [INSURANCE CARRIER]

           

           

          To: [Insurance
Consultant]

           

          WestLB
AG, New York Branch,

          as
Administrative Agent for the Lenders 

          1211 Ave
of Americas

          New York,
NY 10036

          Attention:
Yolette Salnave / Andrea Bailey 

          Facsimile:
212-302-7946

          Email:
ny_agency services@westlb.com

           

          The
undersigned has acted as [insurance broker] [insurance carrier] for PACIFIC
ETHANOL HOLDING CO. LLC ("Pacific Holding"), a Delaware
limited liability company, PACIFIC ETHANOL MADERA LLC ("Madera"), a Delaware limited liability
company, PACIFIC ETHANOL COLUMBIA, LLC ("Boardman"), a Delaware limited liability company, PACIFIC
ETHANOL STOCKTON, LLC ("Stockton"), a Delaware limited
liability company, PACIFIC ETHANOL IMPERIAL, LLC ("Brawley"), a Delaware limited
liability company and PACIFIC ETHANOL MAGIC VALLEY, LLC ("Burley"), a Delaware limited liability
company (together, the "Borrowers") in connection with
that certain Credit Agreement (as amended, supplemented or otherwise modified
from time to time, the "Credit Agreement"), dated as of
February __, 2007, by and among the Borrowers, PACIFIC ETHANOL HOLDING CO. LLC,
as
Borrowers' 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, UNION BANK OF
CALIFORNIA, N.A.,, as Accounts Bank, WESTLB AG, NEW YORK BRANCH, as Lead
Arranger and Sole Bookrunner, MIZUHO CORPORATE BANK, LTD., as Lead Arranger and
Co-Syndication Agent, CIT CAPITAL SECURITIES LLC, as Lead Arranger and
Co-Syndication Agent, COOPERATIEVE CENTRALE RAIFFEISEN-BOERENLEENBANK B.A.,
"RABOBANK NEDERLAND", NEW YORK BRANCH, as Lead Arranger and Co-Documentation
Agent, and BANCO SANTANDER CENTRAL HISPANO S.A, NEW YORK BRANCH, as Lead
Arranger and Co-Documentation Agent. Capitalized terms used herein but not
defined herein shall have the respective meanings assigned to such terms in the
Credit Agreement.

           

           

           

           

           

           

           

           

          
            
              
              

            

            
              6.01(k) - 7

              
                

              

            

            
              
              

            

          

           

           

          [OPTION A:]4
[The undersigned confirms that:

           

          
            
              	
                      (i) 

                    	
                      [except
      as set forth in Exhibit B
      attached hereto, the Borrowers have]5 [[Madera]
      [Boardman] [Stockton] [Brawley] [Burley] [has]16
      evidenced all insurance binders required pursuant to and in accordance
      with Section 7.01(h) of the Credit
Agreement;

                    

            

          

           

          
            
              
                	
                        (ii)

                      	
                        all
      premiums due and payable with respect to each such insurance policy
      have
      been paid or that Borrowers are not in arrears on any such premium
      due;

                      

              

            

          

           

          
            
              	
                      (iii) 

                    	
                      each
      such insurance policy is placed with insurance carriers with an
      AM
      Best,
      A "X" or equivalent credit rating or as otherwise set forth on Annex A
      hereto;

                    

            

          

           

          
            
              	
                      (iv) 

                    	
                      each
      such insurance policy has been endorsed with the Administrative Agent and
      the Senior Secured Parties as Additional Insured and First Loss Payee
      (where applicable);

                    

            

          

           

          
            
              	
                      (v) 

                    	
                      each
      such insurance policy permits a waiver of subrogation for the benefit of
      the Senior Secured Parties;

                    

            

          

           

          
            
              	
                      (vi) 

                    	
                      each
      such insurance policy is primary (without contribution from any other
      policies the Senior Secured Parties may
hold);

                    

            

          

           

          
            
              	
                      (vii) 

                    	
                      each
      such insurance policy (where legally allowed) contains non-vitiation
      language to ensure such insurance policy will remain in full force and
      effect for the benefit of the Senior Secured
  Parties;

                    

            

          

           

          
            
              	
                      (viii) 

                    	
                      each
      such insurance policy contains a non-invalidation endorsement that
      provides the ability (but not the obligation) for the Senior Secured
      Parties to pay premium and continue coverage in the event that any
      Borrower fails to make premium payments;
and

                    

            

          

           

          
            
              	
                      (ix) 

                    	
                      each
      such insurance policy provides a minimum of 30-days' written notice of
      cancellation to Administrative Agent, except for cancellation based on
      non-payment of premium which provides for 10 days' prior written
      notice.]

                    

            

          

           

           

          ____________

           

          4
Insurance Broker/Insurance Carrier to select either Option A or Option B. If
multiple Insurance Carriers submit certificates, then each may limit their
certifications to the types of coverages they provide so long as the sum of such
certifications satisfies the requirements of Schedule 7.01(h), in the
determination of the Insurance Consultant.

           

          5
To be included (if applicable) only at closing.

           

          6 For
the first Funding for each Plant, only the applicable Plant will be
covered.

           

           

           

           

           

           

          
            
              
              

            

            
              6.01(k) - 8

              
                

              

            

            
              
              

            

          

           

          
             

          

           

          [OPTION B:] [The undersigned
hereby confirms that the attached [description of policy] insurance policy
maintained by [the applicable Borrowers] as of the date hereof satisfies the
requirements set forth on Schedule 7.01(h) of
the Credit Agreement (with respect to [description of coverage]) and is in full
force and effect.]

           

          [The
remainder of this page is intentionally blank. The next page is the signature
page.]

           

           

           

           

           

           

           

           

           

           

           

           

           

           

           

          
            
              
              

            

            
              6.01(k) - 9

              
                

              

            

            
              
              

            

          

           

          
             

          

           

          IN
WITNESS WHEREOF, the undersigned has caused this Certificate of Borrowers'
[Insurance Broker] [Insurance Carrier] to be duly executed by an authorized
officer as of the date first above written.

           

           

           

          [Insurance
Broker] [Insurance Carrier]

           

           

          By: ____________________________

          Name:

          Title:

           

           

           

           

           

           

           

           

           

          
            
              
              

            

            
              6.01(k) - 10

              
                

              

            

            
              
              

            

          

           

           

          ANNEX
A

          to Exhibit C to Insurance
Consultant's Certificate

           

          [INSURANCE
CARRIERS' SPECIFICATIONS]7

           

           

           

           

           

           

           

           

           

           

           

           

           

           

           

          _________________

          7 Only
if applicable.

           

           

           

           

          
            
              
              

            

            
              6.01(k) - 11

              
                

              

            

            
              
              

            

          

        

      

    

     

    EXHIBIT 6.01(q)

    to
Credit Agreement

     

     

     

     

     

     

    DRAWDOWN
SCHEDULES

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

    
      
        
        

      

      
        6.01(q) -
1

        
          

        

      

      
        
        

      

    

     

    
      Pacific
Ethanol, Inc.

      Projected
Senor Debt Drawdown Schedule

      

    

     

     

    
      
        	
                Month/Year

              	 	
                Madera

              	 	 	
                Boardman

              	 	 	
                Burley

              	 	 	
                Stockton

              	 	 	
                Brawley

              	 	 	
                Total

              	 
	 
      	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	
                Mar-07

              	 	$	51,153,846	 	 	$	-	 	 	$	-	 	 	$	-	 	 	$	-	 	 	$	51,153,846	 
	
                Apr-07

              	 	 	-	 	 	 	-	 	 	 	-	 	 	 	-	 	 	 	-	 	 	 	-	 
	
                May-07

              	 	 	-	 	 	 	-	 	 	 	-	 	 	 	-	 	 	 	-	 	 	 	-	 
	
                Jun-07

              	 	 	-	 	 	 	-	 	 	 	-	 	 	 	-	 	 	 	-	 	 	 	-	 
	
                Jul-07

              	 	 	-	 	 	 	-	 	 	 	-	 	 	 	-	 	 	 	-	 	 	 	-	 
	
                Aug-07

              	 	 	-	 	 	 	51,153,846	 	 	 	-	 	 	 	-	 	 	 	-	 	 	 	51,153,846	 
	
                Sep-07

              	 	 	-	 	 	 	-	 	 	 	9,000,000	 	 	 	-	 	 	 	-	 	 	 	9,000,000	 
	
                Oct-07

              	 	 	-	 	 	 	-	 	 	 	9,000,000	 	 	 	9,000,000	 	 	 	10,350,000	 	 	 	28,350,000	 
	
                Nov-07

              	 	 	-	 	 	 	-	 	 	 	9,000,000	 	 	 	9,900,000	 	 	 	10,800,000	 	 	 	29,700,000	 
	
                Dec-07

              	 	 	-	 	 	 	-	 	 	 	9,000,000	 	 	 	9,000,000	 	 	 	9,450,000	 	 	 	27,450,000	 
	
                Jan-08

              	 	 	-	 	 	 	-	 	 	 	9,000,000	 	 	 	8,100,000	 	 	 	8,100,000	 	 	 	25,200,000	 
	
                Feb-08

              	 	 	-	 	 	 	-	 	 	 	-	 	 	 	9,000,000	 	 	 	6,300,000	 	 	 	15,300,000	 
	
                Mar-08

              	 	 	-	 	 	 	-	 	 	 	29,230,769	 	 	 	-	 	 	 	-	 	 	 	29,230,769	 
	
                Apr-08

              	 	 	-	 	 	 	-	 	 	 	-	 	 	 	-	 	 	 	-	 	 	 	-	 
	
                May-08

              	 	 	-	 	 	 	-	 	 	 	-	 	 	 	29,230,769	 	 	 	-	 	 	 	29,230,769	 
	
                Jun-08

              	 	 	-	 	 	 	-	 	 	 	-	 	 	 	-	 	 	 	29,230,769	 	 	 	29,230,769	 
	
                Jul-08

              	 	 	-	 	 	 	-	 	 	 	-	 	 	 	-	 	 	 	-	 	 	 	-	 
	
                Aug-08

              	 	 	-	 	 	 	-	 	 	 	-	 	 	 	-	 	 	 	-	 	 	 	-	 
	
                Sep-08

              	 	 	-	 	 	 	-	 	 	 	-	 	 	 	-	 	 	 	-	 	 	 	-	 
	
                Oct-08

              	 	 	-	 	 	 	-	 	 	 	-	 	 	 	-	 	 	 	-	 	 	 	-	 
	
                Total
      draws

              	 	$	51,153,846	 	 	$	51,153,846	 	 	$	74,230,769	 	 	$	74,230,769	 	 	$	74,230,769	 	 	$	325,000,000	 

      

    

     

     

     

    
      
        
        

      

      
        6.01(q) -
2

        
          

        

      

      
        
        

      

    

    EXHIBIT 6.01(v)

    to
Credit Agreement

     

     

     

     

    FINANCIAL
MODEL

     

     

     

     

    Delivered under separate cover.

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

    
      
        
        

      

      
        6.01(v) - 1

        
          

        

      

      
        
        

      

    

     

     

    
      EXHIBIT
6.02(a)

       to Credit
Agreement

       

      [FORM
OF]

      COMMERCIAL OPERATION DATE
CERTIFICATE

       

       

      To:
WESTLB AG, NEW YORK BRANCH,

      as
Administrative Agent under the Credit Agreement 

      referred
to below

       

      Date:
[______________]

       

       

      Re: [Madera] [Boardman]
[Stockton] [Brawley] (Burley] Plant

       

      Reference
is made to the Credit Agreement dated as of February __, 2007 (as amended,
restated, supplemented or otherwise modified from time to time, the "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, PACIFIC ETHANOL IMPERIAL, 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 Borrowers' 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, UNION BANK
OF CALIFORNIA, N.A. as Accounts Bank, WESTLB AG, NEW YORK BRANCH, as Lead
Arranger and Sole Bookrunner, MIZUHO CORPORATE BANK, LTD., as Lead Arranger and
Co-Syndication Agent, CIT CAPITAL SECURITIES LLC, as Lead Arranger and
Co-Syndication Agent, COOPERATIEVE CENTRALE RAIFFEISEN­BOERENLEENBANK B.A.,
"RABOBANK NEDERLAND", NEW YORK BRANCH, as Lead Arranger and Co-Documentation
Agent, and BANCO SANTANDER CENTRAL HISPANO S.A, NEW YORK BRANCH, as Lead
Arranger and Co-Documentation Agent. Capitalized terms used herein but not
otherwise defined herein shall have the respective meanings set forth in the
Credit Agreement.

       

       

       

       

       

       

       

       

       

      
        
          
          

        

        
          6.02(a) - 1

          
            

          

        

        
          
          

        

      

       

       

       

      This
Commercial Operation Date Certificate is the Commercial Operation Date
Certificate for the [Madera] [Boardman] [Stockton] [Brawley] [Burley] Plant, and
is delivered to the Administrative Agent pursuant to the Credit
Agreement.

       

      The
undersigned, on behalf of the Borrowers' Agent, hereby represents and certifies
as follows:

       

      1. the
individual executing this Commercial Operation Date Certificate on behalf of the
Borrowers' Agent is a duly Authorized Officer of the Borrowers'
Agent;

       

      2. construction
of such Plant has been completed (other than punch list items) and such Plant is
ready to grind corn and begin operation for its intended use as an ethanol
production facility at its design basis capacity;

       

      3. the
Performance Test for such Plant has been completed in accordance with the
Approved Performance Test Protocols, and has demonstrated that such Plant has
achieved the Minimum Performance Criteria, while meeting air emissions
requirements;

       

      4. training
has been completed for all required personnel of such Plant;

       

      5. the
Borrowers have received a plant operation manual and plant maintenance manual,
associated documents, training manuals, final safety plans, and all materials
and documents provided by the Construction Contractors and other manufacturers,
suppliers and vendors for such Plant;

       

      6. the
Borrowers shall have received preliminary construction drawings for such
Plant;

       

      7. all
construction costs for such Plant have been fully paid other than amounts that
are subject to a Contest and the costs identified on Annex 1 hereto, which
amounts are not in excess of five million Dollars ($5,000,000) and with respect
to which full reserves have been established;

       

      8. attached
hereto as Annex
2 is evidence (which may include an ALTA 122 Endorsement to the
applicable Title Insurance Policy) that there are no mechanic's, workmen's,
materialmen's or other similar Liens or other claims on any part of such Plant,
the Site for such Plant, or other assets relating to the work or services of
such Plant (other than Liens that are subject to a Contest);

       

      9. attached
hereto as Annex
3 are Lien waivers from each Construction Contractor and each
subcontractor for such Plant, other than with respect to (a) punch list items
and work identified on Annex 4, which
constitutes work done by the Construction Contractors and subcontractors with
respect to which payments do not exceed, in the

       

       

       

       

      
        
          
          

        

        
          6.02(a) - 2

          
            

          

        

        
          
          

        

      

       

       

      aggregate,
one million Dollars ($1,000,000) and (b) Liens that are subject to a Contest;
and

       

      10. all
Necessary Project Approvals required to be obtained as of the date hereof
with respect to such Plant have been obtained.

       

      The
undersigned, on behalf of the Independent Engineer, hereby represents and
certifies as follows:

       

      1. the
individual executing this Commercial Operation Date Certificate on behalf of the
Independent Engineer is a duly authorized representative of the Independent
Engineer;

       

      2. based on
the Independent Engineer's diligence in accordance with the scope of the
Independent Engineer's professional services agreement with the Secured Parties,
it is the professional opinion of the Independent Engineer that construction of
such Plant has been completed (other than punch list items) and such Plant is
ready to grind corn and begin operation for its intended use as an ethanol
production facility at its design basis capacity;

       

      3. based on
information provided by the Borrowers, third-party air emissions test results,
and the Independent Engineer's visit to the Site for such Plant and observation
of the Performance Test, the Performance Test has been completed in accordance
with the Approved Performance Test Protocols; provided that the
entire Performance Test was conducted in accordance with the protocol witnessed
during the Independent Engineer's site visit, and has demonstrated that such
Plant has achieved the Minimum Performance Criteria, while meeting tested air
emissions requirements;

       

      4. to the
reasonable satisfaction of the Independent Engineer, based on its best
knowledge, training has been completed for all required personnel of such
Plant;

       

      5. the
Independent Engineer has reviewed, in accordance with the scope of the
Independent Engineer's professional services agreement with the Secured Parties,
the plant operation manuals and plant maintenance manuals, associated documents,
training manuals, final safety plans, and all materials and documents provided
to the Borrowers by the Construction Contractors and other manufacturers,
suppliers and vendors for such Plant;

       

      6. based on
documentation requested by the Independent Engineer and received from the
Borrowers, all construction costs for such Plant payable to the Construction
Contractors, and for all other material construction work with respect to which
the Independent Engineer has requested evidence of payment, have been fully
paid

       

       

       

       

       

       

      
        
          
          

        

        
          6.02(a) - 3

          
            

          

        

        
          
          

        

      

       

       

       

      other
than (a) amounts that (based on documentation received from the Borrowers) are
subject to a Contest and (b) the costs identified on Annex 1 hereto, which
amounts are not in excess of five million Dollars ($5,000,000) and with respect
to which full reserves have been established;

       

      7. attached
hereto as Annex
2 is evidence (which may include an ALTA 122 Endorsement to the
applicable Title Insurance Policy) that there are no mechanic's, workmen's,
materialmen's or other similar Liens or other claims on any part of such Plant,
the Site for such Plant, or other assets relating to the work or services of
such Plant (other than Liens that (based on documentation received from the
Borrowers) are subject to a Contest);

       

      8. attached
hereto as Annex
3 are Lien waivers from each Construction Contractor and each
subcontractor for such Plant, other than with respect to (a) punch list items
and work identified on Annex 4, which
constitutes work done by the Construction Contractors and subcontractors with
respect to which payments do not exceed, in the aggregate, one million Dollars
($1,000,000) and (b) Liens that (based on documentation received from the
Borrowers) are subject to a Contest; and

       

      9. all key
Necessary Project Approvals required to be obtained for the operation of such
Plant as of the date hereof have been obtained.

       

      [The
remainder of this page is intentionally blank. The next page is the signature
page.]

       

       

       

       

       

       

       

       

       

       

       

       

       

       

       

       

       

      
        
          
          

        

        
          6.02(a) - 4

          
            

          

        

        
          
          

        

      

       

       

      IN
WITNESS WHEREOF, the undersigned have caused this Commercial Operation Date
Certificate to be duly executed as of the date first above written.

       

       

       

      PACIFIC ETHANOL HOLDING CO. LLC,

      as
Borrowers' Agent

       

       

      By: _____________________________

      Name:

      Title:

       

       

       

      [_____________]

      as
Independent Engineer

       

       

      By:
_____________________________

      Name:

      Title:

       

       

       

       

       

       

       

      
        
          
          

        

        
          6.02(a) - 5

          
            

          

        

        
          
          

        

      

       

       

      Annex 1

      to Commercial Operation Date
Certificate

       

      UNPAID CONSTRUCTION
COSTS

       

       

       

       

       

       

       

       

       

       

       

       

       

       

       

       

       

       

       

      
        
          
          

        

        
          6.02(a) - Annex 1

          
            

          

        

        
          
          

        

      

       

       

      Annex
2

      to Commercial Operation Date
Certificate

       

      EVIDENCE OF
NO

      MECHANIC'S, WORKMEN'S,
MATERIALMEN'S LIENS

       

       

       

       

       

       

       

       

       

       

       

       

       

       

       

       

       

       

       

       

       

       

      
        
          
          

        

        
          6.02(a) - Annex 2

          
            

          

        

        
          
          

        

      

       

       

      Annex
3

      to Commercial Operation Date
Certificate

       

      LIEN
WAIVERS

       

       

       

       

       

       

       

       

       

       

       

       

       

       

       

       

       

       

       

       

       

       

       

       

      
        
          
          

        

        
          6.02(a) - Annex 3

          
            

          

        

        
          
          

        

      

       

      Annex
4

      to Commercial Operation Date
Certificate

       

      WORK DONE FOR WHICH LIEN
WAIVERS ARE NOT PROVIDED

       

       

       

       

       

       

       

       

       

       

       

       

       

       

       

       

       

       

       

       

       

       

       

      
        
          
          

        

        
          6.02(a) - Annex 4

          
            

          

        

        
          
          

        

      

       

      
        Exhibit
6.02(g) 

        to the Credit
Agreement

         

        [FORM
OF]

         

        TITLE
ENDORSEMENT

         

        Endorsement
122

         

        ENDORSEMENT

         

        Attached
to Policy No.

         

        Issued
by

         

        STEWART
TITLE GUARANTY COMPANY

         

        HEREIN
CALLED THE COMPANY

         

        Provided
an advance is made by the insured pursuant to the Credit Agreement described in
the insured mortgage to or for the benefit of [insert applicable project entity]
in the sum of $________________ , which is a portion of
the indebtedness evidenced by the
"Financing Documents" (as defined in the Credit Agreement), the Company hereby
insures the owner of the indebtedness secured by the insured mortgage against
loss or damage which the insured shall sustain by reason of:

         

         

        (1) The
Company's assurance that, except as otherwise expressly provided herein, there
are no liens, encumbrances or other matters shown by the public records
affecting the estate or interest referred to in Schedule A, other than those
shown in said policy, except:

         

        (2) The
existence of any subsisting tax or governmental assessment lien which is prior
to the insured mortgage, except the following described subsisting tax or
governmental assessment lien(s) to the extent that same have priority over the
insured mortgage by operation of law:

         

        (3) Title to
the estate or interest referred to in Schedule A being vested other than as
shown in Schedule A according to
the public records;

         

         

         

        
          
            
            

          

          
            6.02(g) -
1

            
              

            

          

          
            
            

          

        

         

        (4) The
failure of the advance identified above to be secured by the insured
mortgage;

         

        (5) Lack of
priority of the insured mortgage with respect to such advance, over any
liens,
encumbrances or other matters shown by the public records, affecting the estate
or interest referred to in Schedule A, other than those shown in Schedule B
as prior to the insured mortgage and in paragraph (2) herein,
and/or

         

        (6) Lack of
priority of the lien of the insured mortgage over any statutory lien for
services,
labor or material arising out of the work or improvement under construction or
completed at the date hereof.

         

        This
endorsement is made a part of the policy and is subject to all of the terms and
provisions thereof and of any prior endorsements thereto. Except to the extent
expressly stated, it neither modifies any of the terms and provisions of the
policy and any prior endorsements, nor does it extend the effective date of the
policy and any prior endorsements, nor does it increase the face amount
thereof.

         

         

         

        STEWART
TITLE GUARANTY COMPANY

         

         

         

        By: _____________________________________

         

         

         

         

         

        
          
            
            

          

          
            6.02(g) -
2

            
              

            

          

          
            
            

          

        

         

        
          EXHIBIT
6.04(g)-A

          to Credit
Agreement

           

          [FORM
OF DEED OF TRUST]

           

          Upon
recording return to:

          Chadbourne
& Parke LLP

          30
Rockefeller Plaza

          New York,
NY 10112

          Attn:
Thomas E. Charbonneau, Esq.

           

          The tax
account number of the property 

          subject
to the Lien or in which the interest 

          is
created is [__________].

           

           

            
              

            

          

          Space
above this line for Recorder

           

          LEASEHOLD
TRUST DEED, LINE OF CREDIT INSTRUMENT, SECURITY AGREEMENT,
FINANCING STATEMENT, FIXTURE FILING AND ASSIGNMENT OF LEASES,
RENTS AND
SECURITY DEPOSITS

           

          Dated as
of February , 2007

           

          by

           

          PACIFIC
ETHANOL COLUMBIA, LLC

          Grantor

           

          to

           

          STEWART
TITLE GUARANTY COMPANY, as Trustee

           

          for the
benefit of

           

           

          [_______________________________],
as Collateral Agent, as Beneficiary [This is
a Construction Mortgage, as defined in the Uniform Commercial
Code.]

           

           

          MAXIMUM AMOUNT TO BE ADVANCED PURSUANT
TO THE CREDIT AGREEMENT
(as defined in ORS 86.155): $[_____________]

           

          TERM OR MATURITY DATE OF CREDIT
AGREEMENT (as defined in ORS 86.155):
[_______________]

           

           

          
            
              
              

            

            
              6.04(g)-A
-1 

              
                

              

            

            
              
              

            

          

           

          TABLE OF
CONTENTS

           

           

          
            
              	
                      ARTICLE
      I DEFINITIONS

                    	
                      7

                    
	 	 
	
                      1.1
      DEFINITIONS

                    	
                      7

                    
	
                      1.2
      PRINCIPLES OF CONSTRUCTION

                    	
                      13

                    
	 	 
	
                      ARTICLE
      II GENERAL RIGHTS OF BENEFICIARY

                    	
                      14

                    
	 	 
	
                      ARTICLE
      III LEASED PREMISES

                    	
                      14

                    
	 	 
	
                      3.1
      THE PORT LEASE

                    	
                       14

                    
	
                      3.2
      NEW LEASE WITH BENEFICIARY

                    	
                       17

                    
	
                      3.3
      No MERGER OF FEE AND LEASEHOLD ESTATES

                    	
                       18

                    
	 	 
	
                      ARTICLE
      IV ABSOLUTE ASSIGNMENT OF LEASES AND RENTS

                    	
                      18

                    
	 	 
	
                      4.1
      ABSOLUTE ASSIGNMENT OF LEASES AND RENTS

                    	
                      18

                    
	 	 
	
                      ARTICLE
      V SECURITY AGREEMENT

                    	
                      22

                    
	 	 
	
                      5.1
      RIGHTS TO UCC COLLATERAL UNDER THE UNIFORM COMMERCIAL CODE

                    	 
      22
	
                      5.2
      FIXTURE FILING FINANCING STATEMENTS

                    	
                      22

                    
	 	 
	
                      ARTICLE
      VI REPRESENTATIONS OF GRANTOR

                    	
                      23

                    
	 	 
	
                      6.1
      REPRESENTATIONS AND WARRANTIES

                    	
                      23

                    
	 	 
	
                      ARTICLE
      VII DEFAULT AND FORECLOSURE

                    	
                      23

                    
	 	 
	
                      7.1
      REMEDIES

                    	
                      23

                    
	
                      7.2
      RESCISSION OF NOTICE OF EVENT OF DEFAULT

                    	
                      28

                    
	
                      7.3
      APPLICATION OF PROCEEDS

                    	
                      28

                    
	
                      7.4
      ADDITIONAL SECURITY

                    	
                      29

                    
	
                      7.5
      REMEDIES CUMULATIVE

                    	
                      29

                    
	
                      7.6
      ATTORNEY-IN-FACT

                    	
                      30

                    
	
                      7.7
      WAIVER OF NOTICE

                    	
                      30

                    
	
                      7.8
      PAYMENT OF COSTS AND EXPENSES

                    	
                      30

                    
	
                      7.9
      GRANTOR'S WAIVERS

                    	
                      30

                    
	 	 
	
                      ARTICLE
      VIII MISCELLANEOUS

                    	
                      32

                    
	 	 
	
                      8.1
      PERFORMANCE AT GRANTOR'S EXPENSE

                    	
                      32

                    
	
                      8.2
      BENEFICIARY'S RIGHT TO PERFORM THE OBLIGATIONS

                    	
                      32

                    
	
                      8.3
      SURVIVAL OF OBLIGATIONS

                    	
                      33

                    
	
                      8.4
      NOTICES

                    	
                      33

                    
	
                      8.5
      DELAY NOT A WAIVER

                    	
                      34

                    
	
                      8.6
      COVENANTS RUNNING WITH THE LAND

                    	
                      34

                    
	
                      8.7
      INTENTIONALLY OMITTED

                    	
                      34

                    
	
                      8.8
      SEVERABILITY

                    	
                      34

                    
	
                      8.9
      ENTIRE AGREEMENT AND MODIFICATION

                    	
                      34

                    

            

          

           

           

          
            
              
              

            

            
              6.04(g)-A
-2 

              
                

              

            

            
              
              

            

          

           

           

          
            
              	
                      8.10
      GOVERNING LAW

                    	
                      35

                    
	
                      8.11
      LIMITATION ON BENEFICIARY'S RESPONSIBILITY

                    	
                      35

                    
	
                      8.12
      HEADINGS

                    	
                      35

                    
	
                      8.13
      MARSHALLING

                    	
                      35

                    
	
                      8.14
      WAIVER OF JURY TRIAL AND CONSENT TO JURISDICTION

                    	
                      36

                    
	
                      8.15
      MAXIMUM INDEBTEDNESS AND FUTURE ADVANCES

                    	
                      36

                    
	
                      8.16
      LIEN ABSOLUTE; MULTIPLE COLLATERAL TRANSACTION

                    	
                      37

                    
	
                      8.17
      DISCHARGE OF TRUST DEED

                    	
                      37

                    
	
                      8.18
      RENEWAL OR EXTENSION OF NOTES; SUBSTITUTE NOTES

                    	
                      38

                    
	
                      8.19
      CONFLICTS

                    	
                      38

                    
	
                      8.20
      ASSUMPTION NOT A NOVATION

                    	
                      38

                    
	
                      8.21
      ACKNOWLEDGMENT OF RECEIPT OF COPIES OF DEBT INSTRUMENT

                    	
                      38

                    
	
                      8.22
      INSURANCE WARNING

                    	
                      38

                    
	
                      8.23
      USE NOTICE

                    	
                      39

                    
	
                      8.24
      STATUTE OF FRAUDS NOTICE

                    	
                      39

                    

            

          

           

           

          
            
              
              

            

            
              6.04(g)-A
-3 

              
                

              

            

            
              
              

            

          

          LEASEHOLD
TRUST DEED, LINE OF CREDIT INSTRUMENT, SECURITY

          AGREEMENT,
FINANCING STATEMENT, FIXTURE FILING AND ASSIGNMENT

          OF
LEASES, RENTS

          AND
SECURITY DEPOSITS

           

          THIS
Leasehold Trust Deed, Line of Credit Instrument, Security Agreement, Financing
Statement, Fixture Filing and Assignment of Leases, Rents and Security Deposits,
dated as of February ____, 2007 (as amended, restated, replaced, supplemented
or otherwise modified from time to time, this "Trust
Deed"), encumbers both real and personal property, contains an
after-acquired property clause and secures present and future loans and
advances.

           

          THIS
Trust Deed is executed by PACIFIC ETHANOL COLUMBIA, LLC, a Delaware limited
liability company, as Grantor ("Grantor"), to STEWART TITLE
GUARANTY COMANY, as trustee ("Trustee") for the
benefit of [_________________________], having an address
at [___________________], as Collateral Agent
for the Senior Secured Parties as described under the Credit Agreement referred
to below, as beneficiary (together with its successors and assigns, "Beneficiary").

          WITNESSETH:

           

          WHEREAS,
Grantor has a leasehold estate in certain real property in Morrow County, Oregon
more particularly described on Exhibit A annexed
hereto (the "Leased
Premises") created by
the Lease dated April 20, 2006 between Port of Morrow, as lessor, and Grantor,
as lessee (as amended, modified and in effect from time to time, the "Port Lease"), a
memorandum of which has been recorded October 5, 2006, as Microfilm
No. 2006-17758, Morrow County Microfilm Records.

           

          WHEREAS,
Grantor has entered or will enter into certain Financing Documents providing
for, among other things, the ownership, financing, development, engineering,
construction, testing and operation of the Project as hereinafter
defined.

           

          WHEREAS,
Grantor has requested that the Lenders extend loans to the Grantor and the other
Borrowers referenced in the Credit Agreement in the aggregate principal amount
not to exceed at any one time the sum of [___________________________]
($_______________________) (the
"Loans") the
proceeds
of which are to be used to finance the ownership, development, engineering,
construction, testing and operation of the Project near Boardman, Oregon and the
other Projects as further described in and pursuant to that certain Credit
Agreement (as amended, restated, supplemented or otherwise modified from time to
time, the " Credit  Agreement"), dated as
of the date hereof among Grantor and the other Borrowers, the

           

           

          
            
              
              

            

            
              6.04(g)-A
-4 

              
                

              

            

            
              
              

            

          

           

          Lenders
party thereto (the "Lenders"),
Beneficiary, as Collateral Agent for the Senior Secured Parties, WESTLB AG, NEW
YORK BRANCH, as lead arranger and sole lead bookrunner, IVIIZUHO CORPORATE BANK,
LTD., as lead arranger and co-syndication agent, CIT CAPITAL SECURITIES LLC, as
lead arranger and co-syndication agent, COOPERATIEVE CENTRALE
RAIFFEISEN-BOERENLEENBANK B.A., "RABOBANK NEDERLAND", NEW YORK BRANCH, as lead
arranger and co-documentation agent, and BANCO SANTANDER CENTRAL HISPANO S.A,
NEW YORK BRANCH, as lead arranger and co-documentation agent.

           

          WHEREAS,
this Trust Deed is given pursuant to the Credit Agreement, and payment,
fulfillment, and performance by Grantor of its obligations thereunder and under
the other Financing Documents to which it is a party are secured hereby, and
each and every term and provision of the Credit Agreement, including the rights,
remedies, obligations, covenants, conditions, agreements, indemnities,
representations and warranties of the parties therein, is hereby incorporated by
reference herein as though set forth in full and shall be considered a part of
this Trust Deed;

           

          WHEREAS,
all of the obligations of Grantor under the Credit Agreement and the Financing
Documents shall become due and payable in any event no later than the Discharge
Date;

           

          WHEREAS,
the Credit Agreement contemplates the execution, delivery and implementation of
this Trust Deed and it is a condition precedent to the making of the Loans under
the Credit Agreement that Grantor shall have executed and delivered this Trust
Deed to Beneficiary on behalf of the Senior Secured Parties;

           

          WHEREAS,
the Grantor has duly authorized the execution, delivery and performance of this
Trust Deed; and

           

          WHEREAS,
except as otherwise expressly provided herein, capitalized terms used in this
Trust Deed shall have the meanings given thereto in Section 1.01 of the
Credit Agreement. Except as otherwise expressly provided herein, the rules of
interpretation set forth in Section 1.02 of the
Credit Agreement shall apply to this Trust Deed.

           

          NOW,
THEREFORE, with reference to the foregoing Recitals, and for good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged and
intending to be legally bound hereby:

           

          Grantor
does hereby irrevocably grant, bargain, sell, convey, confirm, release, warrant,
assign and transfer to Trustee, IN TRUST, WITH POWER OF SALE, for the benefit
and security of Beneficiary, as Collateral Agent on behalf of the Senior
Secured

           

           

          
            
              
              

            

            
              6.04(g)-A
-5 

              
                

              

            

            
              
              

            

          

           

           

          Parties,
the following property, whether now owned or hereafter acquired by Grantor
(collectively, the ""Trust Property") for
the purpose of securing the payment and performance of the Obligations (as
hereinafter defined):

           

          
            	
                    (i)  

                  	
                    
                      all
      of Grantor's right, title and interest in and to the Leased Premises, and
      any rights, privileges and appurtenances thereunto belonging or in
      any way pertaining thereto, all reversions, remainders, dower and right of
      dower, curtesy and right of curtesy, and all of Grantor's right, title and
      interest in and to all transferable development rights arising therefrom
      or transferred thereto, and, to the extent assignable, all appurtenances
      to such property, including any now or hereafter belonging or in any way
      appertaining thereto, and all claims or demands of Grantor, either at law
      or in equity, in possession or expectancy, now or hereafter acquired, of,
      in or to the same;

                    

                  

          

           

          
            	
                    (ii)  

                  	
                    all
      of Grantor's right, title and interest in and to the Port Lease and the
      leasehold estate created thereunder and all modifications, extensions and
      renewals of the Port Lease and all credits, deposits, options, purchase
      options, privileges and rights of the Grantor under the Port Lease ,
      including but not limited to, the right, if any, to renew or extend the
      Port Lease for a succeeding term or terms, or to acquire fee title to or
      other interest in all or any portion of the Leased
    Premises;

                  

          

           

          
            	
                    (iii)  

                  	
                    all
      of Grantor's right, title and interest in and to the Improvements,
      including any alterations thereto or replacements thereof, now or
      hereafter erected upon the Leased
Premises;

                  

          

           

          
            	
                    (iv)  

                  	
                    all
      of Grantor's right, title and interest in and to all Fixtures now or at
      any time hereafter affixed to, attached to, placed upon or used in any way
      in connection with the use, occupancy, enjoyment, development, operation
      or ownership of the Leased Premises or the Improvements, together with any
      and all replacements thereof and additions
  thereto;

                  

          

           

          
            	
                    (v)  

                  	
                    all
      of Grantor's right, title and interest in and to all Equipment and
      Personalty now or at any time hereafter located at the Leased Premises or
      the Improvements, together with any and all replacements thereof and
      additions thereto;

                  

          

           

          
            	
                    (vi)  

                  	
                    all
      of Grantor's right, title and interest in and to all extensions,
      improvements, betterments, renewals, substitutes and replacements of, and
      all additions and appurtenances to, the Real Property and the Equipment,
      hereafter acquired by or released to Grantor or constructed, assembled
      or

                  

          

           

           

           

           

          
            
              
              

            

            
              6.04(g)-A
-6 

              
                

              

            

            
              
              

            

          

           

           

           

          placed by
Grantor on the Real Property, and all conversions of the security constituted
thereby; immediately upon such acquisition, release, construction, assembling,
placement or conversion, as the case may be, and in each such case, without any
further mortgage, conveyance, assignment or other act by Grantor, any of such
extensions, improvements, betterments, renewals, substitutes and replacements
shall become subject to the lien of this Trust Deed as fully and completely, and
with the same effect, as though now owned by Grantor and specifically described
herein;

           

          
            	
                    (vii)  

                  	
                    all
      of Grantor's right, title and interest in and to all easements (including
      all easements entered into pursuant to the Port Lease), streets, roads,
      alleys, passages, rights of way, air rights, lateral support, drainage
      rights, options to purchase, water rights (whether riparian,
      appropriative, or otherwise), utility rights, privileges, franchises,
      servitudes, easements, tenements, hereditaments, and appurtenances now or
      hereafter belonging or appertaining to any of the foregoing or to the
      Leased Premises all mineral, mining, gravel, oil, gas, hydrocarbon
      substances and other rights to produce or share in the production of
      anything related to such property, all drainage, crop, timber,
      agricultural, and horticultural rights with respect to such property, and
      all of Grantor's right, title and interest in and to any streets, ways,
      alleys, roadbeds, inclines, tunnels, culverts, strips or gores of land
      adjoining or serving the Leased Premises or any part thereof, whether now
      owned or hereafter acquired by
Grantor;

                  

          

           

          
            	
                    (viii)  

                  	
                    all
      of Grantor's right, title and interest in and to all of the real estate
      and personal property tax refunds or rebates or charges in lieu of Taxes
      now or hereafter assessed or levied against the Real Property or any other
      part of the Trust Property, including interest thereon, and the right to
      receive the same, whether such refunds or rebates relate to fiscal periods
      before or during the term of this Trust Deed, payable to Grantor with
      respect to the Leased Premises or the Improvements, and refunds, credits
      or reimbursements payable with respect to bonds, escrow accounts or other
      sums payable in connection with the use, occupation, enjoyment,
      development, or operation of the Leased Premises or
      Improvements;

                  

          

           

          
            	
                    (ix)  

                  	
                    all
      of Grantor's right, title and interest in and to all Leases affecting the
      use of the Leased Premises now or hereafter entered into and
      Rents;

                  

          

           

          
            	
                    (x)  

                  	
                    all
      of Grantor's right, title and interest in and to all insurance policies
      and the proceeds thereof, now or hereafter in effect with respect to the
      Real Property or the UCC Collateral, including any and all title and
      property insurance proceeds, and all unearned premiums and premium
      refunds,

                  

          

           

           

           

          
            
              
              

            

            
              6.04(g)-A
-7 

              
                

              

            

            
              
              

            

          

           

           

           

           

          accrued,
accruing or to accrue under such insurance policies, and all of Grantor's right,
title and interest in and to all proceeds, judgments, claims, compensation,
awards or payments made for any taking of or damage to all or any part of the
Real Property or the UCC Collateral by eminent domain or condemnation, or by any
purchase in lieu thereof, and all awards resulting from a change of grade of
streets or for severance damages, and all other proceeds of the conversion,
voluntary or involuntary, of any of the Trust Property into cash or other
liquidated claims,
and all judgments, damages, awards, settlements and compensation
(including interest thereon) heretofore or hereafter made to the present and all
subsequent owners of the Trust Property or any part thereof for any injury to or
decrease in the value thereof for any reason;

           

          
            	
                    (xi)  

                  	
                    to
      the extent assignable, and with respect to contracts and agreements,
      excluding those which by their terms or by operation of Law prohibit or do
      not allow assignment or which would become void or terminable by the
      counterparty thereto solely by virtue of the grant made herein (the "Excluded
      Contracts"), all of Grantor's right, title and interest in and to
      all abstracts of title, plans, specifications, operating manuals, computer
      programs, computer data, maps, surveys, studies, reports, permits and
      licenses, records, plans, designs, drawings, surveys, title insurance
      policies, agreements, contract rights, approvals (but excluding any
      Governmental Approval which by its terms or by operation of Law would
      become void, voidable, terminable or revocable if mortgaged, pledged or
      assigned hereunder or if a security interest therein was granted hereunder
      is expressly excepted and excluded from the Lien and terms of this Trust
      Deed to the extent necessary so as to avoid such voidness, avoidability,
      terminability or revocability), actions, appraisals, architectural,
      engineering and construction contracts, books of account, insurance
      policies and other documents, of whatever kind or character, relating to
      the Real Property;

                  

          

           

          
            	
                    (xii)  

                  	
                    all
      of Grantor's right, title and interest in and to all present and future
      Leases, Property Agreements, Contracts (in each case other than Excluded
      Contracts), including all Contracts entered into pursuant to the Port
      Lease, and all Proceeds and Receivables, the proceeds from the sale,
      transfer, disposition, conveyance or refinancing of all or any portion of
      the Trust Property and other benefits paid or payable and to become due or
      payable to Grantor in respect of the use, occupancy, license or possession
      of any portion or portions of the Trust
  Property;

                  

          

           

           

           

           

          
            
              
              

            

            
              6.04(g)-A
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                    (xiii)  

                  	
                    all
      of Grantor's right, as and to the extent set forth in the Credit
      Agreement, in the name and on behalf of Grantor, to appear in and defend
      any action or proceeding brought with respect to the Trust Property, and
      to commence any action or proceeding to protect the interest of Grantor in
      the Trust Property;

                  

          

           

          
            	
                    (xiv)  

                  	
                    rights,
      titles, interests, estates or other claims, both in law and in equity,
      which Grantor now has or may hereafter acquire in the Real Property or in
      and to any greater estate in the Real Property or in and to any greater
      estate in the Trust Property;

                  

          

           

          
            	
                    (xv)  

                  	
                    all
      of Grantor's right, title and interest in and to all property hereafter
      acquired or constructed by Grantor located at or used in connection with
      the Leased Premises of the type described in the foregoing granting
      clauses which shall forthwith, upon acquisition or construction thereof by
      Grantor and without any act or deed by Grantor or Beneficiary, become
      subject to the lien of this Trust Deed as if such property were now owned
      by Grantor and were specifically described in this Trust Deed and were
      specifically conveyed or encumbered
hereby;

                  

          

           

          
            	
                    (xvi)  

                  	
                    all
      of Grantor's right, title and interest in and to accessions, additions or
      attachments to, and all receipts, issues, profits, proceeds and products
      arising from, any of the foregoing and any and all proceeds of the
      conversion, voluntary or involuntary, of any of the foregoing into cash or
      liquidated claims;

                  

          

           

          
            	
                    (xvii)  

                  	
                    all
      of Grantor's right, title and interest in and to all Inventory now or at
      any time hereafter located at the Leased Premises or the Improvements or
      used in any way in connection with the use, occupancy, enjoyment,
      development or operation of the Leased Premises or the Improvements,
      together with any and all replacements thereof and additions thereto,
      together with all of Grantor's right, title and interest in and to all
      Accounts; and

                  

          

           

          
            	
                    (xviii)  

                  	
                    Grantor's
      interest, if any, in and to all pipelines and pipeline gathering systems
      used in connection with the Project lying on, in or across lands or any
      part thereof located in Morrow County, Oregon, together with all
      equipment, fittings, fixtures, pipe, machinery, pumps, appliances, valves,
      meters, tanks and other personal or real property appertaining to said
      pipeline gathering systems and all tenements, hereditaments and
      appurtenances now owned or hereafter acquired in connection
      therewith

                  

          

           

           

          
            
              
              

            

            
              6.04(g)-A
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          together
with all rights of way, servitudes, easements and permits for said pipeline
gathering systems.

           

          "Trust Property,"
including each component thereof, shall be expressly interpreted as meaning all
or, where the context permits or requires, any portion of the above, and all or,
where the context permits or requires, any interest of Grantor
therein.

           

          AND
without limiting any of the other provisions of this Trust Deed, Grantor
expressly grants to Beneficiary, as secured party for itself and for the ratable
benefit of the Senior Secured Parties, a security interest in the portion of the
Trust Property which is or may be subject to the provisions of the Uniform
Commercial Code as in effect from time to time in the state in which the Leased
Premises is located (as the same may have been or may hereafter be amended, the
"Uniform Commercial
Code"") which are applicable to secured transactions; it being understood
and agreed that the Improvements and Fixtures are part and parcel of the Real
Property and appropriated to the use thereof and, whether affixed or annexed to
the Real Property or not, shall for the purposes of this Trust Deed be deemed
conclusively to be real estate and conveyed hereby.

           

          TO HAVE
AND TO HOLD as provided herein, the above granted and described Trust Property
unto and to the Trustee for the proper use and benefit of Beneficiary, and the
successors and assigns of the Beneficiary, forever, for itself and for the
ratable benefit of the Senior Secured Parties and their respective assigns and
successors forever, in each case subject to the provisions of Section 8.17
hereof

           

          AND TO
PROTECT THE SECURITY OF THIS TRUST DEED, Grantor hereby agrees as
follows:

           

          ARTICLE
I

           

          DEFINITIONS

           

          1.1 Definitions.
Capitalized terms used herein without definition shall have the respective
meanings ascribed to them in the Credit Agreement. As used herein, the following
terms shall have the following meanings:

           

          "Accounts" shall mean
all Grantor's accounts whether now existing or hereafter arising and resulting
from the sale or other disposition of Inventory or from the services performed
at the Project or any other accounts however arising and all chattel paper,
documents and instruments relating to the Accounts or constituting the proceeds
thereof

           

          "Administrative
Agent" shall have the meaning set forth in the Credit
Agreement.

           

           

          
            
              
              

            

            
              6.04(g)-A
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          "Trust Property"
shall have the meaning set forth in the granting clauses of this Trust
Deed.

           

          "Business Day" shall
have the meaning set forth in the Credit Agreement. "Collateral" shall
have the meaning set forth in the Credit Agreement.

           

          "Collateral Agent"
shall have the meaning set forth in the Credit Agreement. "Contest" shall have
the meaning set forth in the Credit Agreement.

           

          "Contracts" means all
contracts to which the Grantor now is, or hereafter will be, bound, or a party,
beneficiary or assignee, including exhibits thereto, and all other instruments,
agreements and documents executed and delivered with respect to such contracts,
all consents, and all revenues, rentals, Proceeds and other sums of money due
and to become due from any of the foregoing, as the same may be modified,
supplemented or amended from time to time in accordance with their
terms.

           

          "Default" shall have
the meaning set forth in the Credit Agreement.

           

          "Default Rate" shall
mean the interest rate described in Section 3.06 of the
Credit Agreement.

           

          "Discharge Date"
shall have the meaning set forth in the Credit Agreement. "Distiller's Grains"
shall have the meaning set forth in the Credit Agreement.

           

          "Equipment" means all
"equipment," as such term is defined in Article 9 of the Uniform Commercial
Code, now owned or hereafter acquired by Grantor, which is used at or in
connection with the Improvements or the Leased Premises or is located thereon or
therein (including all machinery, appliances, apparatus, fittings, materials,
equipment, pipes, pipelines (including meters, connections, values and
associated equipment), tanks, mains, lines, pumps, cables, lines, wires,
conduits, poles and related equipment, loading and unloading equipment, motors,
switchboards, cleaning, fire prevention, fire extinguishing, cooling and
ventilation equipment, furnishings, and electronic data-processing and other
office equipment now owned or hereafter acquired by Grantor and any and all
additions, substitutions and replacements of any of the foregoing), together
with all attachments, components, parts, equipment and accessories installed
thereon or affixed thereto. Notwithstanding the foregoing, Equipment shall not
include any property belonging to tenants under leases except to the extent that
Grantor shall have any right or interest therein.

           

          "Event of Default"
shall have the meaning set forth in the Credit Agreement.

           

           

           

          
            
              
              

            

            
              6.04(g)-A
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          "Financing Documents"
shall have the meaning set forth in the Credit Agreement.

           

          "Fixtures" means all
Equipment now owned, or the ownership of which is hereafter acquired, by Grantor
which is so related to the Leased Premises or the Improvements forming part of
the Trust Property that it is deemed fixtures or real property under the law of
the state in which the Leased Premises is located, including all building or
construction materials intended for construction, reconstruction, alteration or
repair of or installation on the Trust Property, construction equipment,
appliances, machinery, plant equipment, fittings, apparatuses, fixtures and
other items now or hereafter attached to, installed in or used in connection
with (temporarily or permanently) any of the Improvements or the Leased
Premises, including engines, devices for the operation of pumps, pipes,
plumbing, cleaning, call and sprinkler systems, fire extinguishing apparatuses
and equipment, heating, ventilating, plumbing, laundry, incinerating,
electrical, air conditioning and air cooling equipment and systems, gas and
electric machinery, appurtenances and equipment, pollution control equipment,
security systems, disposals, cables, wires, pipelines (including meters,
connections, valves and other associated equipment), conduits, mains, lines,
ducts, fences, lighting fixtures, recreational equipment and facilities of all
kinds, and water, gas, electrical, storm and sanitary sewer facilities, utility
lines and electric transmission equipment (whether owned individually or jointly
with others, and, if owned jointly, to the extent of Grantor's interest therein)
and all other utilities whether or not situated in easements, all water tanks,
water supply, water power sites, fuel stations, fuel tanks, fuel supply, and all
other structures, together with all accessions, appurtenances, additions,
replacements, betterments and substitutions for any of the foregoing and the
proceeds thereof.

           

          "Governmental
Approvals" shall have the meaning set forth in the Credit
Agreement.

           

          "Governmental
Authority" shall have the meaning set forth in the Credit
Agreement.

           

          "Impositions" means
all taxes (including, without limitation, all ad valorem, sales (including those
imposed on lease rentals), use, gross receipts, value added, intangible
transaction, privilege or license or similar taxes; and excluding mortgage
recording taxes, transfer taxes, transfer gains taxes, gift and inheritance
taxes, franchise taxes and analogous taxes on non-corporate entities, and income
taxes), assessments (including, without limitation, all assessments for public
improvements or benefits, whether or not commenced or completed prior to the
date hereof and whether or not commenced or completed within the term of this
Trust Deed), water, sewer or other rents and charges, excises, levies, fees
(including, without limitation, license, permit, inspection, authorization and
similar fees), and all other governmental charges, in each case whether general
or special, ordinary or extraordinary, or foreseen or unforeseen, of
every

           

           

           

          
            
              
              

            

            
              6.04(g)-A
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          character
in respect of the Trust Property and/or any Rents (including all interest and
penalties thereon), which at any time prior to, during or in respect of the term
hereof shall be assessed or imposed on or in respect of or be a lien upon (a)
Grantor that are in the nature of a real estate tax, whether in addition to, or
in lieu of, real estate taxes, (b) the Trust Property, or any other collateral
delivered or pledged to Beneficiary under the Security Documents, or any part
thereof, or any Rents therefrom or any estate, right, title or interest therein,
or (c) any occupancy, operation, use or possession of, or sales from, or
activity conducted on, or in connection with the Trust Property or the leasing
or use of all or any part thereof.

           

          "Improvements" means
any and all buildings, structures, foundations, storage and other tanks, utility
sheds, workrooms, towers, retention basins, generating units, pump stations,
transformers, retaining walls, pipes, cables, landscaping, irrigation and
drainage pipes and facilities, open parking areas, and all other structures,
improvements and fixtures of every kind whatsoever, whether above or below the
land surface, and whether permanent or temporary, and any and all additions,
alterations, betterments or appurtenances thereto, and all renewals,
substitutions or replacements now or at any time owned, or hereafter acquired by
Grantor and situated, placed or constructed on, over or under the Leased
Premises or any part thereof.

           

          "Inventory" means all
of Grantor's inventory of ethanol, Distiller's Grains, carbon dioxide and any
other co-product or by-product in connection with the production of ethanol;
feedstock, including but not limited to corn, denaturants, enzymes, natural gas,
natural lime, plant consumables, and other Products.

           

          "Law" shall have the meaning set forth
in the Credit Agreement.

           

          "Leases" means,
collectively, any lease or ground lease (other than the Port Lease), or, to the
extent of the interest therein of Grantor, any sublease or subsublease, license,
concession or other agreement (whether written or oral and whether now or
hereafter in effect) pursuant to which Grantor holds the interest of lessor,
sublessor, subsublessor or licensor, as the case may be, and pursuant to which
any Person is granted a possessory interest in, or right to use or occupy all or
any portion of the Trust Property, and every modification, amendment or other
agreement relating to such lease, ground lease, sublease, subsublease, license,
concession or other agreement entered into in connection therewith, and every
guarantee of the performance and observance of the covenants, conditions and
agreements to be performed and observed by the other party or parties
thereto.

           

          "Lenders" shall have
the meaning set forth in the Credit Agreement. "Loans" shall have
the meaning set forth in the Credit Agreement.

           

           

           

          
            
              
              

            

            
              6.04(g)-A
-13 

              
                

              

            

            
              
              

            

          

           

           

           

           

          "Notes" shall have
the meaning set forth in the Credit Agreement. "Obligations" shall
have the meaning set forth in the Credit Agreement.

           

          "Permitted Liens"
shall have the meaning set forth in the Credit Agreement. "Person" shall have
the meaning set forth in the Credit Agreement.

           

          "Personalty" means
all furniture, furnishings, machinery, goods, inventory, tools, supplies,
appliances, general intangibles, contract rights, accounts (including, without
limitation, the Accounts), accounts receivable, franchises, reserve accounts,
escrows, documents, instruments, chattel paper, claims, deposits, licenses,
trade names, trademarks, symbols, service marks, books, records, business names,
company names, trade secrets, certificates and permits, and all other personal
property of any kind or character whatsoever (as defined in and subject to the
provisions of the Uniform Commercial Code), which are now or hereafter owned by
Grantor and which are related to the Real Property, together with all
accessories, replacements and substitutions thereto or therefor and the proceeds
thereof.

           

          "Proceeds" means
"proceeds" as such term is defined in the Uniform Commercial Code as in effect
in any relevant jurisdiction or under other relevant law and, in any event,
shall include, but shall not be limited to, (i) any and all proceeds of any
insurance, indemnity, warranty or guaranty payable to Grantor from time to time,
and claims for insurance, indemnity, warranty or guaranty effected or held for
the benefit of Grantor, with respect to any of the Collateral, (ii) any and all
payments (in any form whatsoever) made or due and payable to Grantor from time
to time in connection with any requisition, confiscation, condemnation, seizure
or forfeiture of all or any part of the Collateral by any Governmental Authority
(or any person acting under color of Governmental Authority) and (iii) any and
all other amounts from time to time paid or payable under or in connection with
any of the Collateral.

           

          "Products" means
ethanol, dried distiller's grains, wet distiller's grains, and any other form of
distiller's grain products marketed by the Grantor and/or refined therefrom and
from time to time located in storage or transportation facilities in or near the
Leased Premises or in railroad cars, tank trucks or other facilities owned,
operated or used by Grantor in connection with the Trust Property.

           

          "Project" shall have the meaning set
forth in the Credit Agreement.

           

          "Property Agreements"
means all material option agreements, purchase and sale agreements, construction
contracts, architect contracts, engineering contracts, service contracts,
utility contracts, equipment leases, equipment maintenance contracts
and

           

           

          
            
              
              

            

            
              6.04(g)-A
-14 

              
                

              

            

            
              
              

            

          

           

           

           

          equipment
warranties, purchase contracts, purchase orders and similar agreements and all
amendments thereto now or hereafter relating to any portion of the Trust
Property and entered into or assumed by or on behalf of Grantor.

           

          "Real
Property" means, collectively the Leased Premises, the Improvements and
the Fixtures.

           

          "Receivables"
means any "account" as such term is defined in the Uniform Commercial Code and
in any event shall include, but not be limited to, all of the Grantor's rights
to payment for goods sold or leased, or services performed, by the Grantor,
whether now in existence or arising from time to time hereafter, including,
without limitation, rights evidenced by an account, note, contract, contract
rights (including any and all rights to liquidated damage payments), security
agreement, chattel paper, or other evidence of indebtedness or security,
together with (i) all security pledged, assigned, hypothecated or granted to the
Grantor to secure the foregoing, (ii) all the Grantor's right, title and
interest in and to any goods, the sale of which gave rise thereto, (iii) all
guarantees, warranties, endorsements, indemnifications or collateral on, or of,
any of the foregoing, (iv) all powers of attorney for the execution of any
evidence of indebtedness or security or other writing in connection therewith,
(v) all books, correspondence, credit files, records, ledger cards, invoices,
and other papers relating thereto, including without limitation all similar
information stored on a magnetic medium or other
similar storage device and other papers and documents in the possession or under
the control of the Grantor or any computer bureau from time to time acting for
the Grantor, (vi) all evidences of the filing of financing statements and other
statements and the registration of other instruments in connection therewith and
amendments thereto, notices to other creditors or Secured Parties, and
certificates from filing or other registration officers, (vii) all credit
information, reports and memoranda relating thereto, and (viii) all other
writings related in any way to the foregoing.

           

          "Rents"
means all rents, issues, revenues, income, proceeds, profits, royalties,
security (including all oil and gas or other hydrocarbon substances, earnings,
receipts, revenues, accounts, accounts receivable, security deposits and other
deposits (subject to the prior right of the tenants making such deposits)) and
income, including fixed, additional and percentage rents, operating expense
reimbursements, reimbursements for increases in Taxes, sums paid by tenants to
Grantor to reimburse Grantor for amounts originally paid or to be paid by
Grantor or Grantor's agents or affiliates for which such tenants were liable,
as, for example, tenant improvements costs in excess of any work letter, lease
takeover costs, moving expenses and tax and operating expense pass-throughs for
which a tenant is solely liable, parking, maintenance, common area, tax,
insurance, utility and service charges and contributions, deficiency rents and
liquidated damages, and other benefits now or hereafter derived from any portion
of the Real Property or the use, enjoyment, development, operation, ownership or
occupancy

           

           

           

          
            
              
              

            

            
              6.04(g)-A
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          thereof
and all cash or security deposits, advance rentals, and all deposits or payments
of a similar nature relating thereto, now or hereafter, including during any
period of redemption, derived from the Real Property or any other portion of the
Trust Property, in each case pursuant to the Leases, and all proceeds from the
cancellation, surrender, sale or other disposition of the Leases and other
benefits paid or payable and to become due or payable to Grantor in respect of
the use, occupation, enjoyment, development, operation or ownership of any
portion or portions of the Trust Property pursuant to the Leases.

           

          "Security Agreement"
shall have the meaning set forth in the Credit Agreement.

           

          "Senior Secured
Parties" shall have the meaning set forth in the Credit
Agreement.

           

          "Security Documents"
shall have the meaning set forth in the Credit Agreement. "Taxes" shall have
the meaning set forth in Section 2.1(h)
hereof.

           

          "Transfer" shall have
the meaning set forth in Section 2.1(i)
hereof.

           

          "Trust Deed" means
this Leasehold Trust Deed, Line of Credit Instrument, Security Agreement,
Financing Statement, Fixture Filing and Assignment of Leases, Rents and Security
Deposits, as the same may be amended, restated, replaced, supplemented or
otherwise modified from time to time.

           

          "UCC Collateral"
shall have the meaning set forth in Section 5.1
hereof.

           

          "Uniform Commercial
Code" shall have the meaning set forth in the Granting Clauses
hereof.

           

          1.2 Principles of
Construction. All references to sections, schedules and exhibits are
to
sections, schedules and exhibits in or to this Trust Deed unless otherwise
specified. Unless otherwise specified, the words "hereof," "herein" and
"hereunder" and words of similar import when used in this Trust Deed shall refer
to this Trust Deed as a whole and not to any particular provision of this Trust
Deed. The words and phrases "including," "shall include," "inclusive of and
words and phrases of similar import shall be deemed to be followed by "without
limitation" or "but not limited to." Unless otherwise specified, all meanings
attributed to defined terms herein shall be equally applicable to both the
singular and plural forms of the terms so defined. All persons stated in the
masculine, feminine or neuter gender shall include other genders as
appropriate.

           

           

           

          
            
              
              

            

            
              6.04(g)-A
-16 

              
                

              

            

            
              
              

            

          

           

           

          ARTICLE
II

           

          GENERAL
RIGHTS OF BENEFICIARY

           

          Grantor
hereby agrees with Beneficiary that Beneficiary may at any time and from time to
time, without liability therefor, without notice and without affecting the
liability of any person, including, without limitation, Grantor, for the payment
or performance of any indebtedness secured by this Trust Deed, or the lien of
this Trust Deed on the Trust Property or any portion thereof: (i) release any
person liable for the payment of any Obligations, extend the time or otherwise
alter the terms of payment of any Obligations and make compositions or other
arrangements with any debtor in relation thereto, alter, substitute, or release
any portion of the Trust Property or any other collateral securing any
Obligations, and grant such other indulgences as Beneficiary may determine in
its sole discretion; and (ii) consent to the making of any map or plat of the
Real Property, join in granting any easements or creating any restrictions on
the Real Property and join in any extension agreement or any agreement
subordinating the lien or charge of this Trust Deed.

           

          ARTICLE
III

           

          LEASED
PREMISES

           

           

          3.1
The
Port Lease.

           

          (a) The
Grantor shall: (i) pay all rents, additional rents and other sums required
to be paid by the Grantor as lessee under and pursuant to the provisions of the
Port Lease, (ii) diligently perform and observe all of the material terms,
covenants and conditions of the Port Lease on the part of the Grantor, as lessee
thereunder, to be performed and observed, unless such performance or observance
shall be waived in writing or not required in writing by the lessor under the
Port Lease, to the end that all things shall be done which are necessary to keep
unimpaired the rights of the Grantor, as lessee, under the Port Lease, (iii)
promptly notify the Beneficiary in writing of any default
by the Grantor or lessor under the Port Lease in the performance or observance
of any of the material terms, covenants or conditions on the part of,
respectively, the Grantor
or lessor to be performed or observed under the Port Lease, (iv) promptly notify
the Beneficiary of the giving of any notice by the lessor under the Port Lease
to the Grantor (other than notices customarily sent on a regular basis or
notices concerning matters of an immaterial nature) and of any notice noting or
claiming any default by the Grantor in the performance or observance of any of
the material terms, covenants or conditions of the Port Lease on the part of the
Grantor, as lessee thereunder, to be performed or observed and deliver to the
Beneficiary a true copy of each such notice, (v) promptly notify the Beneficiary
in writing of any request made by either party to the

           

           

          
            
              
              

            

            
              6.04(g)-A
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          Port
Lease for arbitration proceedings pursuant to the Port Lease and of the
institution of any arbitration proceedings, as well as of all proceedings
thereunder, and promptly deliver
to the Beneficiary a copy of the determination of the arbitrators in each such
arbitration proceeding, it being acknowledged and agreed that the Beneficiary
shall have the right to participate in such arbitration proceedings in
association with the Grantor or on its own behalf as an interested party, (vi)
furnish to the Beneficiary, within ten (10) days after demand, proof of payment
of all items which are required to be paid by the Grantor pursuant to the Port
Lease, and (vii) not consent to the subordination of the Port
Lease to any mortgage of the fee interest of the lessor in the Trust Property
except such as agreed to by the Beneficiary.

           

          (b) The
Grantor shall not, without the prior written consent of the Beneficiary,
surrender the leasehold estate created by the Port Lease or terminate or cancel
the Port Lease or modify, change, supplement, alter or amend the Port Lease, in
any material respect, either orally or in writing, and the Grantor hereby
assigns to the Beneficiary, as further security for the payment of the
Obligations and for the performance and observance of the terms, covenants and
conditions of this Trust Deed, all of the rights, privileges and prerogatives of
the Grantor, as lessee under the Port Lease, to surrender the leasehold estate
created by the Port Lease or to terminate, cancel, modify, change, supplement,
alter or amend the Port Lease in any material respect, and any such surrender of
the leasehold estate created by the Port Lease or termination, cancellation,
modification, change, supplement, alteration or amendment of the Port Lease in
any material respect without the prior written consent of the Beneficiary shall
be void and of no force and effect.

           

          (c) Supplementing
the provisions of subparagraph (b) above, it is understood and agreed that the
Grantor shall not, without the Beneficiary's prior written consent, elect to
treat the Port Lease as terminated under Section 365(h)(1) of the Bankruptcy
Code. Any such election made without the Beneficiary's prior written consent
shall be void. The Grantor hereby unconditionally assigns, transfers and sets
over to the Beneficiary all of the Grantor's claims and rights to the payment of
damages arising under the Bankruptcy Code from any rejection by the lessor under
the Port Lease. The Beneficiary shall have the right to proceed in its own name
or in the name of the Grantor in respect of any claim, suit, action or
proceeding relating to the rejection of the Port Lease, including, without
limitation, the right to file and prosecute, to the exclusion of the Grantor,
any proofs of claim, complaints, motions, applications, notices and other
documents, in any case in respect of such lessor under the Bankruptcy Code. This
assignment constitutes a present, irrevocable and unconditional assignment of
the foregoing claims, rights and remedies, and shall continue in effect until
all of the indebtedness and obligations secured by this Trust Deed shall have
been satisfied and discharged in full. Any amounts received by the Beneficiary
as damages arising out of the rejection of the Port Lease as aforesaid shall be
applied first to all reasonable costs

           

           

           

          
            
              
              

            

            
              6.04(g)-A
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          and
expenses of the Beneficiary (including, without limitation, reasonable
attorneys' fees) incurred in connection with the exercise of any of its rights
or remedies under this paragraph and then shall be applied against the
Obligations in such order, priority and proportion as the Beneficiary shall
determine. If any action, motion or notice shall be commenced or filed in
respect of the Grantor, as lessee under the Port Lease, or all or any portion of
the Trust Property in connection with any case under the Bankruptcy Code, the
Grantor shall give the Beneficiary prompt written notice thereof and the
Beneficiary shall have the option, to the exclusion of the Grantor, exercisable
upon notice from the Beneficiary to the Grantor, to conduct and control any such
litigation with counsel of the Beneficiary's choice. The Beneficiary may proceed
in its own name or in the name of the Grantor in connection with any such
litigation, and the Grantor agrees to execute any and all powers,
authorizations, consents and other documents required by the Beneficiary in
connection therewith. The Grantor shall, upon demand, pay to the Beneficiary all
costs and expenses (including attorneys' fees) paid or incurred by the
Beneficiary in connection with the prosecution or conduct of any such
proceedings. Any such costs or expenses not paid by the Grantor as aforesaid
shall be secured by the lien of this Trust Deed and shall be added to the
Obligations. The Grantor shall not commence any action, suit, proceeding or
case, or file any application or make any motion, in respect of the Port Lease
in any such case under the Bankruptcy Code without the prior written consent of
the Beneficiary. The Grantor shall, immediately after obtaining knowledge
thereof, notify the Beneficiary, by telecopy to the numbers set forth in Section 8.4, of any
filing by or against the lessor under the Port Lease of a petition under the
Bankruptcy.
Code. The Grantor shall thereafter forthwith give written notice of such
filing to the Beneficiary, setting forth the date of such filing, the court in
which the petition was filed and the relief sought therein. The Grantor shall
promptly deliver to the Beneficiary, following receipt, any and all notices,
summonses, pleadings, applications and other documents received by the Grantor
in connection with any such petition and any proceedings relating
thereto.

           

          (d) If
the Grantor shall default in the performance or observance of any material
term, covenant or condition of the Port Lease on the part of the Grantor, as
lessee thereunder, to be performed or observed, then, without limiting the
generality of the other provisions of this Trust Deed and without waiving or
releasing the Grantor from any of its obligations hereunder, the Beneficiary
shall have the right, but shall be under no obligation, to pay any sums and to
perform any act or take any action as may be appropriate to cause all of the
terms, covenants and conditions of the Port Lease on the part of the Grantor, as
lessee thereunder, to be performed or observed on behalf of the Grantor, to the
end that the rights of the Grantor in, to and under the Port Lease shall be kept
unimpaired and free from default. If the Beneficiary shall make any payment or
perform any act or take action in accordance with the preceding sentence, the
Beneficiary will notify the Grantor of the making of any such payment, the
performance of any such

           

           

          
            
              
              

            

            
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          act, or
the taking of any such action. All sums so paid by the Beneficiary and all costs
and expenses incurred by the Beneficiary in connection with the performance of
any such act shall be paid by the Grantor to the Beneficiary upon demand with
interest at the Default Rate from the date of the payment or incurrence thereof,
and the same shall be deemed to be secured by this Trust Deed and shall be a
lien on the Trust Property prior to any right, title to, interest in or claim
upon the Trust Property attaching subsequent to the lien of this Mortgage. In
any such event, subject to the rights, if any, of lessees and other occupants
under the Leases, the Beneficiary and any person designated by the Beneficiary
shall have, and are hereby granted, the right to enter upon the Trust Property
at any time and from time to time for the purpose of taking any such action. If
the lessor under the Port Lease shall deliver to the Beneficiary a copy of any
notice of default sent by said lessor to the Grantor, as lessee under the Port
Lease, such notice shall constitute full protection to the Beneficiary for any
action taken or omitted to be taken by the Beneficiary, in good faith, in
reliance thereon.

           

          (e) Upon
the occurrence and during the continuation of an Event of Default, the
Grantor hereby irrevocably appoints the Beneficiary its true and lawful
attorney-in-­fact in its name or otherwise to do any and all acts and to
execute any and all documents which in the reasonable opinion of the Beneficiary
may be necessary or desirable to preserve any rights of the Grantor in, to or
under the Port Lease, or any occupancy lease, license or concession, including,
without limitation, the right (but not the obligation) to cure any defaults of
the Grantor as lessee under the Port Lease, preserve any rights of the Grantor
whatsoever in respect of any part of the Trust Property or to execute an
extension or renewal of the Port Lease as hereinafter set forth. The Grantor
shall, within twenty (20) days of request by the Beneficiary, use its
commercially reasonable efforts to obtain from the lessor under the Port Lease
such certificates of estoppel with respect to compliance by the Grantor with the
terms of the Port Lease as may be requested by the Beneficiary. The Grantor
shall exercise each individual option, if any, to extend or renew the term of
the Port Lease upon demand by the Beneficiary made at any time at least six (6)
months prior to the last day upon which any such option may be
exercised.

           

          (f) The
generality of the provisions of this paragraph relating to the Port Lease shall
not be limited by other provisions of this Trust Deed, or any other agreement
between the Beneficiary and the Grantor, setting forth particular obligations of
the Grantor which are also required of the Grantor as tenant under the Port
Lease.

           

           

          3.2 New Lease with
Beneficiary. If the Port Lease shall be terminated prior to the
natural
expiration of its term due to an event of default thereunder, and if pursuant to
any provision of the Port Lease, the Beneficiary or its designee shall acquire
from the lessor under the Port Lease a new lease of the Leased Premises, the
Grantor shall have no right, title or interest in or to such new lease or the
leasehold estate created thereby, or renewal privileges therein
contained.

           

           

           

          
            
              
              

            

            
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          3.3 No Merger of Fee and
Leasehold Estates. So long as any portion of the Obligations
shall remain unpaid, and unless the Beneficiary shall otherwise consent, the fee
title to the Leased Premises and the leasehold estate therein created pursuant
to the provisions of the Port Lease shall not merge, but shall always be kept
separate and distinct, notwithstanding the union of such estates in the Grantor
or in any other person, by purchase, operation of law or otherwise. If the
Beneficiary shall acquire the fee title to the Leased Premises and the leasehold
estate therein created pursuant to the provisions of the Port Lease, by
foreclosure of this Trust Deed or otherwise, such estates shall not merge as a
result of such acquisition and shall remain separate and distinct for all
purposes after such acquisition unless and until the Beneficiary shall elect to
merge such estates. Without limitation or derogation of the foregoing, if the
Grantor acquires the fee interest (including any reversionary interest) in the
Leased Premises or any portion thereof (including, without limitation, pursuant
to a conveyance of such fee interest pursuant to the Port Lease), or any other
interest in the Premises or any portion thereof, the lien of this Trust Deed
shall, ipso facto, without the necessity of any further assignment, mortgage or
conveyance, simultaneously with such acquisition, be spread to cover said fee or
other interest and, as so spread, shall be prior to the lien of any mortgage
placed on said fee or other interest subsequent to the date of this Trust Deed.
Without limitation or derogation of the foregoing sentence, the Grantor
nevertheless agrees to execute all instruments and documents which the
Beneficiary may reasonably require to ratify, confirm and further evidence the
Beneficiary's lien on the fee interest.

           

          ARTICLE
IV

           

          ABSOLUTE
ASSIGNMENT OF LEASES AND RENTS

           

           

          4.1 Absolute Assignment of
Leases and Rents. Grantor absolutely and unconditionally
assigns, transfers and sets over to Beneficiary all right, title and interest in
and to all Rents and all other right, title and interest of Grantor created
under or by virtue of any and all Leases and, with respect to the
foregoing:

           

          (a) Beneficiary
grants to Grantor a license to collect, subject to the provisions herein, all
Rents as they respectively become due, but not more than thirty (30) days in
advance, and to enforce the agreements of the Leases, so long as an Event of
Default has not occurred and is continuing;

           

          (b) This
absolute and present assignment shall be fully operative without any further
action on the part of Grantor or Beneficiary and, specifically, Beneficiary
shall be entitled, at its sole option, to all Rents whether or not Beneficiary
takes possession of the Trust Property, including, without limitation, all Rents
in Grantor's possession or control. Upon the occurrence and during the
continuation of an Event of Default and whether before or after the institution
of legal proceedings to foreclose this Trust Deed by action

           

           

           

          
            
              
              

            

            
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          in any
court or by exercise of the power of sale herein contained or before or after
sale thereunder or during any period of redemption, Beneficiary, without regard
to waste, adequacy of the security for the Obligations secured by this Trust
Deed or the solvency of Grantor, may revoke the license granted Grantor
hereunder to collect the Rents, and may, at its option, without notice and with
or without taking possession of or entering the Trust Property, either: (i) in
person or by agent, with or without any action or proceeding, (A) enter
upon, take possession of, manage and operate the Trust Property or any part
thereof, in its own name or in the name of Grantor (provided, however,
such entering upon and taking possession of the Trust Property shall not be a
condition precedent or limitation of Beneficiary's right to collect the Rents);
(B) give, or require Grantor to give, notice to any or all tenants under any
Leases authorizing and directing the tenants to pay such Rents to Beneficiary;
(C) sue for or otherwise collect all of the Rents (including those past due and
unpaid or which are in Grantor's possession or control at the time of such Event
of Default) and apply the Rents as hereinafter provided; (D) enforce the payment
of the Rents and exercise all of the rights of the landlord under the Leases and
all of the rights of Beneficiary hereunder; (E) cancel, enforce or modify the
Leases, and fix or modify Rents; (F) do any acts which Beneficiary deems proper
to protect the security; (G) take all steps which may be desirable in
Beneficiary's judgment to complete any unfinished construction, and to operate
and manage the Trust Property; and (H)
perform such other reasonable acts or repairs or protections as may be
reasonably necessary or proper in Beneficiary's sole judgment to conserve the
value thereof; or (ii) apply for the appointment of a receiver in accordance
with applicable Law, which receivership
Grantor hereby consents to, who shall collect the Rents, and all other income of
any kind; manage the Trust Property so to prevent waste; execute Leases within
or beyond the period of receivership, perform any of the other activities set
forth in Section 4.1(b)(i)
above and perform the other terms and conditions contained in this Trust Deed,
the other Financing Documents and apply the Rents as hereinafter provided. The
entering upon and taking of possession of the Trust Property, the appointment of
a receiver, and/or the collection and application of the Rents shall not cure or
waive any Event of Default or notice of default hereunder or invalidate any act
done pursuant to such notice. The purchaser at any foreclosure sale, including
Beneficiary, shall have the right, at any time and without limitation as
provided to advance money to any receiver appointed hereunder to pay any part or
all of the items which the receiver would otherwise be authorized to pay if cash
were available from the Trust Property and the sum so
advanced, with interest at the Default Rate, shall be a part of the sum required
to be paid to redeem from any judicial foreclosure sale, in each case to the
fullest extent permitted by applicable Law. The rights hereunder shall in no way
be dependent upon and shall apply without regard to whether the Trust Property
is in danger of being lost, materially injured or damaged or whether the Trust
Property is adequate to discharge the Obligations secured by this Trust
Deed.

           

           

           

          
            
              
              

            

            
              6.04(g)-A
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          (c) Any
Rents collected pursuant to the terms of Section 4.1(b) above
shall be applied
in the following order: (i) to payment of all fees of any receiver appointed
hereunder; (ii) to payment when due of prior or current real estate taxes or
special assessments with respect to the Trust Property or, if this Trust Deed so
requires, to the periodic escrow for payment of real estate taxes or special
assessments then due; (iii) to payment when due of insurance premiums of the
type required by this Trust Deed or, if this Trust Deed so requires, to the
periodic escrow for the payment of insurance premiums then due; and (iv) to
payment of all expenses for normal maintenance of the Trust Property. Any Rents
remaining after application of the above items shall be applied to the
Obligations secured by this Trust Deed on a monthly basis. If the Trust Property
shall be foreclosed and sold pursuant to a judicial or non-judicial foreclosure
sale, then in such event, the Rents, after application first to the items set
forth in Section
4.1(c)(i) through (iv) above shall be applied, to the fullest extent
permitted by Law, as follows:

           

          (A) if
Beneficiary is the purchaser at the foreclosure sale, the Rents shall be paid to
Beneficiary to be applied to the extent of any deficiency remaining after the
sale, the balance to be retained by Beneficiary, and if the Trust Property be
redeemed by Grantor or any other party entitled to redeem, to be applied as a
credit against the redemption price with any remaining excess Rents to be paid
to Grantor, provided, that if the Trust Property shall not be redeemed, all
Rents shall belong to Beneficiary, whether or not a deficiency exists;
or

           

          (B) if
Beneficiary is not the purchaser at the foreclosure sale, the Rents shall be
paid to Beneficiary to be applied first, to the extent of any deficiency
remaining after the sale, the balance to be retained by the purchaser, and if
the Trust Property be redeemed by Grantor or any other party entitled to redeem,
the Rents shall be applied as a credit against the redemption price with any
remaining excess Rents to be paid to Grantor; provided, that if the Trust
Property shall not be redeemed, any remaining excess Rents shall be paid first,
to the purchaser at the foreclosure sale in an amount equal to the interest
accrued upon the sale price pursuant to Oregon law (if any), then to Beneficiary
to the extent of any deficiency remaining unpaid and the remainder to the
purchaser.

           

           

           

           

          
            
              
              

            

            
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          (d) Notwithstanding
the right to collect the Rents, following the occurrence and
during the continuation of an Event of Default, Grantor agrees that Beneficiary,
and not Grantor, shall be and be deemed to be the creditor of each tenant with
respect to assignments for the benefit of creditors and bankruptcy, arrangement,
reorganization, insolvency, dissolution or receivership proceedings affecting
such tenant, but without obligation on the part of Beneficiary, however, to file
or make timely filings of claims in such proceedings or otherwise to pursue
creditor's rights therein.

           

          (e) Grantor
irrevocably consents that the tenant(s) under the Leases, upon demand and notice
from Beneficiary to such tenant(s) of an Event of Default, shall pay all Rents
under the Leases to Beneficiary without liability of the tenant(s) for the
determination of the actual existence of any Event of Default claimed by
Beneficiary. Grantor hereby irrevocably authorizes and directs the tenant(s),
upon receipt of any notice of Beneficiary stating that an Event of Default
exists, to pay to Beneficiary the Rents due and to become due under the Leases.
Grantor agrees that the tenant(s) shall have the right to rely upon any such
notices of Beneficiary and that tenant(s) shall pay such Rents to Beneficiary,
without any obligation or without any right to inquire whether such Event of
Default actually exists and notwithstanding any claim of or notice by Grantor to
the contrary. Grantor shall have no claim against tenant(s) for any Rents paid
by such tenant(s) to Beneficiary;

           

          (f) Beneficiary
shall have the right to assign Beneficiary's right, title and interest in the
Leases to any subsequent holder of this Trust Deed and to any person acquiring
title to any of the Real Property through foreclosure or otherwise. After
Grantor shall have been barred and foreclosed of all right, title, interest in
the Leased Premises, no assignee of Grantor's interest in the Leases shall be
liable to account to Grantor for the Rents thereafter accruing;

           

          (g) Nothing
herein contained shall be construed to bind Beneficiary to the performance of
any of the terms or provisions contained in the Leases, or otherwise to impose
any obligation on Beneficiary whatsoever. Prior to actual entry and taking
possession of the Real Property by Beneficiary, this assignment shall not
operate to make Beneficiary a "mortgagee-in-possession" or to place any
responsibility for the control, care, management, or repair of the Real Property
upon Beneficiary;

           

          (h) The
Leases shall remain in full force and effect irrespective of any merger of the
interest of the lessor and any tenant thereunder. Grantor shall, at the request
of Beneficiary, execute such further assignments to Beneficiary of all Leases
and Rents, as Beneficiary shall reasonably require, and provide to Beneficiary
true and correct copies of all Leases and documents and instruments, executed in
connection therewith; and

           

          (i) It is
the expressed intention of Grantor and Beneficiary that this

           

           

          
            
              
              

            

            
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          Section 4.1 establish
an absolute transfer and assignment of the Leases and Rents, and is not intended
or given as additional security for the Obligations.

           

          ARTICLE
V

           

          SECURITY
AGREEMENT

           

          5.1 Rights to UCC Collateral
under the Uniform Commercial Code. This Trust Deed is both a
real property deed of trust and a "security agreement" within the meaning of the
Uniform Commercial Code. The Trust Property includes both real, leased and
personal property and all other rights and interests, whether tangible or
intangible in nature, of Grantor in the Trust Property. Grantor, by executing
and delivering this Trust Deed, has granted and does hereby grant to Beneficiary
as security for the Obligations, a continuing first priority security interest
in the Trust Property to the full extent that the Trust Property may be subject
to the Uniform Commercial Code (said portion of the Trust Property so subject to
the Uniform Commercial Code, the "UCC Collateral"). If
an Event of Default shall occur and be continuing, Beneficiary, in addition to
any other rights and remedies which it may have, shall have, and may exercise
immediately and without demand, any and all rights and remedies granted to a
secured party under the Uniform Commercial Code, including the right to take
possession of the UCC Collateral or any part thereof, and to take such other
measures as Beneficiary may deem necessary for the care, protection and
preservation of the UCC Collateral. Upon request or demand of Beneficiary,
Grantor shall, at its expense, assemble the UCC Collateral and make it available
to Beneficiary at a convenient place acceptable to Beneficiary. Grantor shall
pay to Beneficiary on demand any and all expenses, including legal expenses and
attorneys' fees, incurred or paid by Beneficiary in protecting its interest in
and to the UCC Collateral and in enforcing its rights hereunder with respect to
the UCC Collateral. Any notice of sale, disposition or other intended action by
Beneficiary with respect to the UCC Collateral sent to Grantor in accordance
with the provisions hereof at least fifteen (15) Business Days prior to such
action, shall, except as otherwise provided by applicable Law, constitute
reasonable notice to Grantor. The proceeds of any disposition of the UCC
Collateral, or any part thereof, may, except as otherwise required by applicable
Law, be applied by Beneficiary to the payment of the Obligations in such
priority and proportions set forth in the Credit Agreement. Grantor's (the
debtor's) address and principal place of business and the address of Beneficiary
(the secured party) are as set forth in Section 8.4
hereof.

           

          5.2 Fixture Filing Financing
Statements. Portions of the Trust Property are goods that are or
are to become fixtures. The address of Grantor (the debtor) and the address of
Beneficiary (the secured party) are as set forth in Section 8.4 hereof.
Port of Morrow is the record owner of the Leased Premises. Information
concerning the security interest created by this Trust Deed may be obtained from
the Beneficiary, as secured party, at its

           

           

          
            
              
              

            

            
              6.04(g)-A
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          address
set forth in Section
8.4 hereof. The organizational number of Grantor is DE4114340. This
document covers goods that are or are to become fixtures.

           

          ARTICLE
VI

           

          REPRESENTATIONS
OF GRANTOR

           

          6.1 Representations and
Warranties. Grantor represents, covenants and warrants that:

           

          (a) all
Improvements now or hereafter located on the Trust Property are, or will be,
located entirely within the boundaries of the Trust Property or on property in
which Grantor now or hereafter possesses a valid interest;

           

          (b) no
portion of the Trust Property is being used or occupied as the personal
residence of Grantor and no residential units are located on the Trust Property;
and

           

          (c)  Grantor
is not using the Trust Property for farming operations. 

           

          ARTICLE VII

           

          DEFAULT
AND FORECLOSURE

           

          7.1 Remedies. Following
the occurrence and during the continuation of an Event of Default,
Trustee and/or Beneficiary may, at Beneficiary's election, take such action
permitted at law or in equity, without notice or demand, as it deems advisable
to protect and enforce its rights and the rights of the other Senior Secured
Parties against Grantor and in and to the Trust Property, in accordance with the
requirements of applicable Law. Without limitation of the foregoing, Beneficiary
may take any one or more of the following actions, each of which may be pursued
concurrently or otherwise, at such time and in such order as Beneficiary may
determine in its sole discretion, without impairing or otherwise affecting the
other rights and remedies of Beneficiary and without impairing any notice of
default or election to cause the Trust Property to be sold or any sale
proceeding predicated thereon:

           

          (a) demand,
collect or realize upon all or any part of the Trust Property and assemble or
require Grantor to assemble all or any part of the Trust Property;

           

          (b) commence,
appear in or defend any action or proceeding purporting to affect all or any
part of the Trust Property or the interests, rights, powers or duties of any
Senior Secured Party therein, whether brought by or against Grantor, Beneficiary
or any Senior Secured Party;

           

          (c) pay,
purchase, contest or compromise any claim, debt, lien, charge or

           

           

           

          
            
              
              

            

            
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          encumbrance
which in the reasonable judgment of Beneficiary may adversely affect the Trust
Property or the interest, rights, powers or duties of any Senior Secured Party
therein;

           

          (d) in such
manner and to such extent as Beneficiary may deem necessary to protect the Trust
Property or the interests, rights, powers or duties of any Senior Secured Party
therein, Beneficiary may by itself, its agents or attorneys, enter into and upon
the Trust Property or any part thereof or any other property at which the Trust
Property may be located without being deemed a "mortgagee-in-possession" and
take and hold exclusive possession of all or any part of the Trust Property
(which Grantor agrees to surrender) and exclude Grantor from the Trust Property,
and with or without the appointment of a receiver, whether appointed pursuant to
Section 7.1(j)
hereof or otherwise, (i) operate and manage the Trust Property or any part
thereof either itself or by other Persons, (ii) rent and lease the same, (iii)
perform such acts of repair or protection as may be necessary or proper to
conserve the value of the Trust Property, (iv) make such useful additions,
alterations, betterments and improvements to the Trust Property as Beneficiary
may deem advisable, (v) collect any and all income, Rents, issues, profits and
proceeds from the Trust Property, the same being hereby assigned and transferred
to Beneficiary, and (vi) from time to time apply or accumulate such income,
Rents, issues, profits and proceeds in such order and manner as Beneficiary
shall determine, it being understood that the collection or receipt of income,
Rents, issues, profits or proceeds from the Trust Property after an Event of
Default and election to cause the Trust Property to be sold under and pursuant
to the terms of this Trust Deed shall not affect or impair any Event of Default
or election to cause the Trust Property to be sold or any sale proceedings
predicated thereon, but such proceedings may be conducted and sale effected
notwithstanding the collection or receipt of any such income, Rents, issues,
profits and proceeds;

           

          (e) proceed
by suit or suits at law or in equity or by any other appropriate proceedings or
remedy to enforce payment of the Obligations or the performance of any other
term hereof or any other right and the Grantor hereby authorizes and fully
empowers the Beneficiary to request the Trustee to foreclose this Trust Deed by
action in any court or by exercise of the power of sale contained herein or by
advertisement with full authority and power to sell the Trust Property at public
auction and convey the same to the purchaser in fee simple, either in one parcel
or separate lots and parcels, all in accordance with and in the manner
prescribed by applicable Law, and out of the proceeds arising from sale and
foreclosure to retain the principal and interest due on the Loans and the other
Obligations together with all such sums of money as the Trustee or Beneficiary
shall have expended or advanced pursuant to this Trust Deed or pursuant to
statute together with interest thereon as herein provided and all costs and
expenses of such non-judicial or judicial foreclosure, including lawful
attorneys' fees, with the balance, if any, to be paid to the persons entitled
thereto by law. In the event of any non-judicial or

           

           

          
            
              
              

            

            
              6.04(g)-A
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          judicial
foreclosure sale by Beneficiary, Grantor shall be deemed a tenant holding over
and shall forthwith deliver possession to the purchaser or purchasers at such
sale or be summarily dispossessed according to provisions of Law applicable to
tenants holding over.

           

          Without
limiting the foregoing, Trustee may and upon the request of Beneficiary shall,
elect to cause the Trust Property or any part thereof to be sold as
follows:

           

          (i) In
connection with any sale or sales hereunder, Trustee shall be entitled to elect
to treat any of the Trust Property which consists of a right in action or which
is property that can be severed from the Real Property covered hereby or any
Improvements without causing structural damage thereto as if the same were
personal property, and dispose of the same in accordance with applicable Law,
separate and apart from the sale of Real Property. Where the Trust Property
consists of Real Property and Personalty, whether or not such Personalty is
located on or within the Real Property, Trustee shall be entitled to elect to
exercise rights and remedies against any or all of the Real Property and
Personalty in such order, at such times and in such manner as is now or
hereafter permitted by applicable Law;

           

          (ii) Trustee
shall be entitled to elect to proceed against any or all of the Real Property or
Personalty in any manner permitted under applicable Law; and if Trustee so
elects pursuant to applicable Law, the power of sale herein granted shall be
exercisable with respect to all or any of the Real Property and Personalty, as
designated by Trustee, and Trustee is hereby authorized and empowered to conduct
any such sale of any Real Property and Personalty in accordance with the
procedures applicable to Real Property;

           

          (iii) If the
Trust Property consists of several lots, parcels or items of property, Trustee,
subject to applicable Law, may and upon the request of Beneficiary shall, (A)
designate the order in which such lots, parcels or items shall be offered for
sale or sold, or (B) elect to sell such lots, parcels or items through a single
sale, or through two or more successive sales, or in any other manner Trustee
designates. Any person, including Grantor or Beneficiary, but excluding Trustee,
may purchase at any sale hereunder. Should Trustee desire that more than one
sale or other disposition of the Trust Property be conducted, Trustee shall,
subject to applicable Law, cause such sales or dispositions to be conducted
simultaneously, or successively, on the same day, or at such different days or
times and in such order as Trustee may designate, and no such sale shall
terminate or otherwise affect the lien and security title of this Trust Deed on
any part of the Trust Property not sold until all the Obligations have been paid
in full. In the event Trustee elects to dispose of the Trust Property through
more than one

           

           

           

          
            
              
              

            

            
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          sale,
Grantor agrees to pay the costs and expenses of each such sale and of any
judicial or non-judicial proceedings wherein such sale may be made;

           

          (iv) Trustee
may and upon the request of Beneficiary shall, from time to time postpone or
adjourn any sale by it to be made under or by virtue of this Trust Deed by
announcement at the time and place appointed for such sale or for such adjourned
sale or sales; and, except as otherwise provided by any applicable provision of
Law, Trustee may and upon the request of Beneficiary shall, without further
notice or publication, make such sale at the time and place to which the same
shall be so adjourned, or the Trustee may and upon the request of Beneficiary
shall, give a new notice of sale;

           

          (v) Upon any
sale made under or by virtue of this Section
7.1(e)  (whether made under the power of sale herein granted or
under or by virtue of judicial proceedings or of a judgment or decree of
foreclosure and sale), Beneficiary may bid for and acquire the Trust Property or
any part thereof and in lieu of paying cash therefor may make settlement for the
purchase price by crediting upon the Obligations the net sales price after
deducting therefrom the expenses of the sale and the costs of the action and any
other sums which Beneficiary is authorized to deduct under this Trust Deed, or
other Financing Document;

           

          (vi) No
recovery of any judgment by Beneficiary and no levy of an execution under any
judgment upon the Trust Property or upon any other property of Grantor shall
affect in any manner or to any extent, the Lien of this Trust Deed upon the
Trust Property or any part thereof, or any Liens, titles, rights, powers or
remedies of Trustee and/or Beneficiary hereunder, under any other Financing
Document, but such Liens, titles, rights, powers and remedies of Trustee and/or
Beneficiary shall continue unimpaired as before;

           

          (vii) Grantor
agrees, to the fullest extent permitted by Law, that upon the occurrence and
during the continuation of an Event of Default, neither Grantor nor anyone
claiming through or under Grantor shall or will set up, claim or seek to take
advantage of any appraisement, valuation, stay, extension, homestead, exemption
or redemption laws now or hereafter in force, in order to prevent or hinder the
enforcement or judicial or non-judicial foreclosure of this Trust Deed, or the
absolute sale of the Trust Property, or the final and absolute putting into
possession thereof, immediately after such sale, of the purchasers thereat, and
Grantor, for itself and all who may at any time claim through or under it,
hereby waives to the fullest extent that it may lawfully so do, the benefit of
all such laws, and any and all right to have the assets comprised in the
security intended to be created hereby marshaled upon any judicial or
non-judicial foreclosure of the Lien

           

           

           

          
            
              
              

            

            
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          hereof;
and

           

          (viii)
Trustee may with and upon the request of Beneficiary shall, foreclose, this
Trust Deed subject to the rights of any tenants of the Trust Property, and the
failure to make any such tenants parties to any such foreclosure proceedings and
to foreclose such tenants' rights will not be, nor be asserted to be by Grantor,
a defense to any proceedings instituted by Trustee and/or Beneficiary to collect
the sums secured hereby.

           

          (f) take over
and direct collection of the Rents, the Proceeds and the Receivables that are
included in the Trust Property and the proceeds thereof, give notice of the lien
of this Trust Deed upon the Rents, the Proceeds and the Receivables and the
proceeds thereof to any or all Persons obligated to Grantor thereon, direct such
Persons to make payment of all moneys paid or payable thereon directly to
Beneficiary (and, at the request of Beneficiary, Grantor shall indicate on all
billings that payments thereon are to be made to Beneficiary) and give any
Person so notified and directed the receipt of Beneficiary for any such payment
as full release for the amount so paid;

           

          (g) take
control of any and all of the Rents, Proceeds and Receivables, accounts,
contractual and other rights that are included in the Trust Property and
proceeds arising from any such contractual and other rights, and enforce
collection, either in the name of Beneficiary or in the name of Grantor, of any
or all of the Rents, Proceeds and Receivables, accounts, contractual and other
rights that are included in the Trust Property and proceeds thereof by suit or
otherwise, and receive, surrender, release or exchange all or any part thereof
or compromise, settle, extend or renew (whether or not longer than the original
period) any indebtedness thereunder;

           

          (h) endorse
in the name of Grantor any instrument, howsoever received by Beneficiary,
representing Trust Property, or proceeds of any of the Trust
Property;

           

          (i)
subject to the provisions of Article V hereof,
exercise all the rights and remedies
granted to a secured party under Article 9 of the Uniform Commercial Code in
effect in the jurisdiction where the Trust Property is located and all other
rights and remedies given to Beneficiary by this Trust Deed or any other
Financing Document otherwise available at law or in equity; and

           

          (j) to
the fullest extent permitted by applicable Law, without further notice to
Grantor,
as a matter of right without notice and without giving bond and without regard
to the solvency or insolvency of Grantor, whether waste has occurred or is
occurring to the Trust Property, value of the Trust Property or adequacy of the
security of the Trust Property, to apply to any court having jurisdiction for
the appointment of a receiver or receivers for the Trust Property, and Grantor
does hereby irrevocably consent to such

           

           

          
            
              
              

            

            
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          appointment.
Notwithstanding the foregoing, Grantor hereby waives any right to require
appointment of a receiver.

           

          Trustee
and/or Beneficiary shall not be under any obligation to make any of the payments
or do any of the acts referred to in this Section
7.1 and, except as otherwise required by law, any of the actions referred
to in this Section
7.1 may be taken irrespective of whether any election to sell has been
given hereunder and without regard to the adequacy of the security for the
Obligations. To the fullest extent permitted by applicable Law, Grantor hereby
expressly waives any and all rights of redemption from sale under any order or
judgment of judicial foreclosure of the Lien of this Trust Deed on behalf of
Grantor and each and every person acquiring any interest in or title to the
Trust Property subsequent to the
date of this Trust Deed and on behalf of any other Persons. The reasonable costs
and expenses (including reasonable attorneys' fees and disbursements) of Trustee
and/or Beneficiary incurred in connection with the preservation, collection and
enforcement of this Trust Deed or of the Lien granted hereby, including any
amounts advanced by Beneficiary to protect or preserve the Trust Property, shall
be secured by this Trust Deed, and Grantor covenants and agrees to pay them to
the order of Trustee and/or Beneficiary promptly upon demand.

           

          7.2 Rescission
of Notice of Event of Default. Beneficiary, at any time before any sale
pursuant
to Section
7.1, may rescind, or direct Trustee to rescind, any notice of an Event of
Default and/or of election to cause any portion of the Trust Property to be
sold. The exercise by Beneficiary of such right of rescission shall not (unless
otherwise expressly provided by the terms of such rescission) constitute a
waiver of any Event of Default then existing or subsequently occurring, shall
not impair the right of Beneficiary to cause any portion of the Trust Property
to be sold thereafter and shall not otherwise affect any provision, agreement,
covenant or condition of this Trust Deed, the Credit Agreement or any other
Financing Document or the rights, obligations or remedies of the parties
hereunder or thereunder.

           

          7.3 Application of
Proceeds.

           

          (a) To the
fullest extent permitted by applicable Law, all proceeds received by Beneficiary
from the sale or other disposition of any portion of the Trust Property pursuant
to this Trust Deed shall be applied by Beneficiary in accordance with the
provisions of Section
8.08 of the Credit Agreement.

           

          (b) If
Beneficiary shall be ordered, in connection with any bankruptcy, insolvency or
reorganization of Grantor, to restore or repay to or for the account of Grantor
or its creditors any amount theretofore received under this Section
7.3, the amount of such restoration or repayment shall be deemed to be an
Obligation so as to place Beneficiary in the position it would have been in had
such amount never been

           

           

           

          
            
              
              

            

            
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          received
by Beneficiary.

           

          7.4 Additional Security.
Subject to the provisions of the Credit Agreement, if Beneficiary
at any time shall have a security interest securing any Obligation in addition
to the lien created hereby on the Trust Property, Beneficiary may enforce the
terms of the Security Documents or otherwise realize upon the Trust Property, at
its option, either before or concurrently with the exercise of remedies as to
such other security or after a sale is made of such other security, and may
apply the proceeds to the Obligations without affecting the status of or waiving
any right to exhaust all or any other security, including the Trust Property,
and without waiving any breach or Event of Default or any right or power whether
exercised under the Financing Documents contained in the Financing Documents or
provided for in respect of any such other security.

           

          7.5 Remedies Cumulative.
The rights, powers and remedies of Beneficiary under this Trust
Deed, or any other security agreement, or any other Financing Document shall be
cumulative and not exclusive of any other right, power or remedy which
Beneficiary may have against Grantor pursuant to this Trust Deed or the other
Financing Documents or existing at law or in equity or otherwise. Beneficiary's
rights, powers and remedies shall be cumulative and concurrent and may be
pursued independently, singly, successively, together or otherwise, at such time
and in such order as Beneficiary may determine to the fullest extent permitted
by law, without impairing or otherwise affecting the other rights and remedies
of Beneficiary permitted by law, equity or contract or as set forth herein or in
the other Financing Documents. No delay or omission to exercise any remedy,
right or power accruing upon an Event of Default shall impair any such remedy,
right or power or shall be construed as a waiver thereof, but any such remedy,
right or power may be exercised from time to time and as often as may be deemed
expedient. A waiver of one Default or Event of Default shall not be construed to
be a waiver of any subsequent Default or Event of Default or to impair any
remedy, right or power consequent thereon. The obtaining of a judgment or decree
on any of the Notes shall not in any manner affect the Lien of this Trust Deed
upon the Trust Property, and any judgment or decree so obtained shall be secured
hereby to the same extent as the Notes are now secured. In case Beneficiary
shall have proceeded to enforce any right or remedy under this Trust Deed by
receiver, entry or otherwise, and such proceeding shall have been discontinued
or abandoned for any reason or shall have been determined adversely to
Beneficiary, then and in every such case, but subject to applicable Law, Grantor
and Beneficiary shall be restored to their former positions and rights
hereunder, and all rights, powers and remedies of Beneficiary shall continue as
if no such proceeding had been taken. In the event of any foreclosure sale
hereunder, all net proceeds shall be available for application to the
Obligations whether or not such proceeds exceed the value of the Trust Property
for
recordation, tax, insurance or other purposes. The only limitation upon the
foregoing agreements as to the exercise of Beneficiary's remedies is that there
shall be but one full and complete satisfaction of the Obligations.

           

           

           

          
            
              
              

            

            
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          7.6 Attorney-in-Fact.
Upon the occurrence and during the continuation of an Event of
Default, Grantor hereby appoints Beneficiary attorney-in-fact of Grantor for the
purpose of carrying out the provisions of this Trust Deed and taking any action
and executing any instrument that Beneficiary may deem reasonably necessary or
advisable to accomplish the purposes hereof, at Grantor's expense, which
appointment is coupled with an interest and cannot be revoked.

           

          7.7 Waiver of Notice. TO
THE MAXIMUM EXTENT PERMITTED BY LAW, GRANTOR HEREBY WAIVES ANY RIGHT GRANTOR MAY
HAVE UNDER THE LAWS OF THE STATE OF IN WHICH THE LEASED PREMISES IS LOCATED OR
THE LAWS OF THE UNITED STATES OF AMERICA TO NOTICE, OTHER THAN EXPRESSLY
PROVIDED FOR IN THIS TRUST DEED, THE CREDIT AGREEMENT OR THE OTHER FINANCING
DOCUMENTS, OR TO A JUDICIAL HEARING PRIOR TO THE EXERCISE OF ANY RIGHT OR REMEDY
PROVIDED BY THIS TRUST DEED TO BENEFICIARY, AND GRANTOR WAIVES GRANTOR'S RIGHTS,
IF ANY, TO SET ASIDE OR INVALIDATE ANY SALE DULY CONSUMMATED IN ACCORDANCE WITH
THE PROVISIONS OF THIS TRUST. DEED ON THE GROUNDS (IF SUCH BE THE CASE) THAT THE
SALE WAS CONSUMMATED WITHOUT A PRIOR JUDICIAL HEARING. GRANTOR FURTHER
UNDERSTANDS THAT UPON THE OCCURRENCE AND DURING THE CONTINUATION OF AN EVENT OF
DEFAULT, BENEFICIARY MAY ALSO ELECT ITS RIGHTS UNDER THE UNIFORM COMMERCIAL CODE
AND TAKE POSSESSION OF THE COLLATERAL AND DISPOSE OF THE SAME BY SALE OR
OTHERWISE IN ONE OR MORE PARCELS PROVIDED THAT AT LEAST FIFTEEN (15) BUSINESS
DAYS' PRIOR NOTICE OF SUCH DISPOSITION MUST BE GIVEN, ALL AS PROVIDED FOR BY THE
UNIFORM COMMERCIAL CODE, AS HEREAFTER AMENDED OR BY ANY SIMILAR OR REPLACEMENT
STATUTE HEREAFTER ENACTED. ALL WAIVERS BY GRANTOR IN THIS PARAGRAPH HAVE BEEN
MADE VOLUNTARILY, INTELLIGENTLY AND KNOWINGLY, AFTER GRANTOR HAS BY GRANTOR'S
ATTORNEY BEEN FIRST APPRISED OF AND COUNSELED WITH RESPECT TO GRANTOR'S POSSIBLE
ALTERNATIVE RIGHTS.

           

          7.8 Payment of Costs and
Expenses. Grantor shall promptly reimburse Beneficiary and the
other Senior Secured Parties for reasonable costs and expenses incurred under
this Trust Deed in accordance with the provisions of the Credit
Agreement.

           

          7.9 Grantor's
Waivers.

           

          (a)
Grantor has read and hereby approves the Credit Agreement, the other
Financing
Documents, and all other agreements and documents relating thereto. Grantor
acknowledges that it has been represented by counsel of its choice to review
this Trust

           

           

          
            
              
              

            

            
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          Deed, the
Financing Documents, and all other documents relating thereto and said counsel
has explained and Grantor understands the provisions thereof.

           

          (b) To the
fullest extent permitted by applicable Law, Grantor hereby expressly waives
diligence, demand, presentment, protest and notice of every kind and nature
whatsoever (unless as otherwise required under this Trust Deed) and waives any
right to require Beneficiary or any other Senior Secured Party to enforce any
remedy against any guarantor, endorser or other person whatsoever prior to the
exercise of its rights and remedies hereunder or otherwise. To the fullest
extent permitted by applicable Law, Grantor waives any right to require Trustee,
Beneficiary or any other Senior Secured Party to: (i) proceed or exhaust any
collateral security given or held by Beneficiary or any other Senior Secured
Party in connection with the Obligations; or (ii) pursue any other remedy in
Trustee's, Beneficiary's or any other Senior Secured Party's power
whatsoever.

           

          (c) To the
fullest extent permitted by applicable Law, until all Obligations shall have
been paid in full, Grantor: (i) shall not have any right of subrogation to any
of the rights of Beneficiary or any other Senior Secured Party against any
guarantor, maker or endorser; (ii) waives any right to enforce any remedy which
Trustee, Beneficiary or other Senior Secured Party now has or may hereafter have
against any other guarantor, maker or endorser; and (iii) waives any benefit of,
and any other right to participate in, any collateral security for the
Obligations or any guaranty of the Obligations now or hereafter held by
Beneficiary or any other Senior Secured Party.

           

          (d) Subject
to any applicable provisions of the Credit Agreement, Grantor hereby authorizes
and empowers Beneficiary in its sole discretion, without any notice (except as
expressly otherwise provided herein) or demand and without affecting the lien
and charge of this Trust Deed, to exercise any right or remedy which Beneficiary
or any other Senior Secured Party may have available to it, including, but not
limited to, judicial foreclosure, or exercise of rights of power of sale without
judicial action as to any collateral security for the obligations, whether real,
personal or intangible property.

           

          (e) To the
fullest extent permitted by applicable Law, the Grantor waives all rights and
defenses arising out of an election of remedies by the creditor, even though
that election of remedies, such as nonjudicial foreclosure with respect to
security for a guaranteed obligation, has destroyed the Grantor's rights of
subrogation and reimbursement against the principal by the operation of the laws
and court rules of the State in which the Leased Premises is
located.

           

          (f) To the
full extent permitted by Law, Grantor hereby covenants and agrees that it shall
not at any time insist upon or plead, or in any manner whatsoever claim or take
any advantage of, any stay, exemption or extension law or any
so-called

           

           

           

          
            
              
              

            

            
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          "moratorium
law" now or at any time hereafter in force, nor claim, take or insist upon any
benefit or advantage of or from any law now or hereafter in force providing for
the valuation or appraisement of the Trust Property, or any part thereof, prior
to any sale or sales thereof to be made pursuant to any provisions herein
contained, or to any decree, judgment or order of any court of competent
jurisdiction; or after such sale or sales claim or exercise any rights under any
statute now or hereafter in force to redeem the property so sold, or any part
thereof, to the extent such covenant and agreement is permitted by applicable
Law, or relating to the marshaling thereof, upon foreclosure sale or other
enforcement hereof. To the full extent permitted by Law, Grantor hereby
expressly waives any and all rights it may have to require that the Trust
Property be sold as separate tracts or units in the event of foreclosure. To the
full extent permitted by Law, Grantor hereby expressly waives any and all rights
of redemption after sale under any order or decree of foreclosure of this Trust
Deed, on its own behalf, on behalf of all Persons claiming or having an interest
(direct or indirect) by, through or under Grantor and on behalf of each and
every Person acquiring any interest in or title to the Real Property subsequent
to the date hereof, it being the intent hereof that any and all such rights of
redemption of Grantor and of all other Persons, are and shall be deemed to be
hereby waived to the full extent permitted by applicable Law. To the full extent
permitted by law, Grantor agrees that it shall not, by invoking or utilizing any
applicable Law or laws or otherwise, hinder, delay or impede the exercise of any
right, power or remedy herein or otherwise granted or delegated to Beneficiary
or any other Senior Secured Party, but shall suffer and permit the exercise of
every such right, power and remedy as though no such law or laws have been or
will have been made or enacted.

           

          ARTICLE
VIII

           

          MISCELLANEOUS

           

          8.1 Performance at Grantor's
Expense. Except as expressly provided herein or in the other
Financing Documents to the contrary, no portion of the cost and expense of
performing or complying with any of the obligations imposed on Grantor by this
Trust Deed shall be borne by Trustee, Beneficiary or any other Senior Secured
Party, and no portion of such cost and expense shall be, in any way or to any
extent, credited against the aggregate amounts payable by Grantor pursuant to
the Credit Agreement or any other Financing Document.

           

          8.2 Beneficiary's Right to
Perform the Obligations. If Grantor shall fail, refuse or neglect
to make any payment or to perform any act required of it by this Trust Deed, or
any other Financing Document, then at any time after the occurrence of any Event
of Default or as otherwise expressly permitted by the terms of the Credit
Agreement, or any other Financing Document, without waiving or releasing any
other right, remedy or recourse Beneficiary may have because of same,
Beneficiary may (but shall not be

           

           

          
            
              
              

            

            
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          obligated
to) make such payment or perform such act for the account of and at the expense
of Grantor. All sums paid by Beneficiary pursuant to this Section 8.2 and all
other sums expended by Beneficiary in respect of which it shall be entitled to
indemnity, together with interest thereon from the date of such payment or
expenditure, shall constitute additions to the Obligations, and shall be secured
by this Trust Deed, and Grantor covenants and agrees to pay them to the order of
Beneficiary upon demand.

           

          8.3 Survival of
Obligations. Except as otherwise provided in the Credit Agreement,
all and
every portion of the Obligations shall survive the execution and delivery of
this Trust Deed and the other Financing Documents, the foreclosure or other
exercise of remedies hereunder and the consummation of the transactions called
for therein and herein until the Obligations shall be satisfied in full. This
Trust Deed secures, and until the Obligations shall be paid and satisfied in
full, shall secure the entire amount of the Obligations. The total amount of the
indebtedness secured by this Trust Deed may increase or decrease from time to
time.

           

          8.4 Notices. Notices and
other communications provided for herein shall be in writing
and shall be delivered by hand or overnight courier service, mailed or sent by
facsimile as follows:

           

          (a)  
if to Grantor,

           

          Pacific
Ethanol Columbia, LLC

          _______________________

          _______________________

           

          Attn: __________________

          Fax No.:
________________

           

           

          (b)  
if to
Trustee,

          Stewart
Title Guaranty Company 

          100 Pine
Street, Suite 450

          San
Francisco, California 94111 

          Attn:
Shelley Norman

          Fax No.:
415-986-5973

           

          (c)  
if to
Beneficiary,

           

          [________________________________________]

           

           

           

           

          
            
              
              

            

            
              6.04(g)-A
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          Attn:

          Fax
No.:

           

          All
notices and other communications given to any party hereto in accordance with
the provisions of this Trust Deed shall be deemed to have been given on the date
of receipt if delivered by hand or overnight courier service or sent by
facsimile, or on the date five (5)
Business Days after dispatch by certified or registered mail if mailed, in each
case delivered, sent or mailed (properly addressed) to such party as provided in
this Section 8.4 or in
accordance with the latest unrevoked direction from such party given in
accordance with this Section
8.4.

           

          8.5 Delay not a Waiver.
Neither any failure nor any delay on the part of Beneficiary in
insisting upon strict performance of any term, condition, covenant or agreement,
or exercising any right, power, remedy or privilege hereunder, or under the
Notes, or under any other Financing Document, or any other instrument given as
security therefor, shall operate as or constitute a waiver thereof, nor shall a
single or partial exercise thereof preclude any other future exercise, or the
exercise of any other right, power, remedy or privilege. In particular, and not
by way of limitation, by accepting payment after the due date of any amount
payable under this Trust Deed, the Notes, or any other Financing Document,
Beneficiary shall not be deemed to have waived any right either to require
prompt payment when due of all other amounts due under this Trust Deed, the
Notes, or the other Financing Documents, or to declare a default for failure to
effect prompt payment of any such other amount.

           

          8.6 Covenants Running with the
Land. The Obligations and all obligations hereunder are
intended by the parties to be, and shall be construed as, covenants running with
the Real Property until such Real Property has been released from the Lien of
this Trust Deed.

           

          8.7 Intentionally
Omitted.

           

          8.8 Severability. If any
provision of this Trust Deed or the application thereof to any Person or
circumstance, for any reason and to any extent, becomes invalid or
unenforceable, then neither the remainder of this Trust Deed nor the application
of such provision to other Persons or circumstances nor the other instruments
referred to hereinabove shall be affected thereby, but rather shall be enforced
to the greatest extent permitted by applicable Law.

           

          8.9 Entire Agreement and
Modification. This Trust Deed and the other Financing Documents
contain the entire agreement of the parties hereto and thereto in respect of the
transactions contemplated hereby and thereby, and all prior agreements among
or

           

           

          
            
              
              

            

            
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          between
such parties, whether oral or written, are superseded by the terms of this Trust
Deed and the other Financing Documents.

           

          8.10
Governing Law.
This Trust Deed shall be governed, construed, applied and enforced in accordance
with the laws of the State of Oregon and applicable laws of the United States of
America.

           

          8.11
Limitation on
Beneficiary's Responsibility. No provision of this Trust Deed shall
operate to place any obligation or liability for the control, care, management
or repair of the Trust Property upon Trustee, Beneficiary or any other Senior
Secured Party, nor shall it operate to make Trustee, Beneficiary or any other
Senior Secured Party responsible or liable for any waste committed on the Trust
Property by the tenants or any other Person, or for any dangerous or defective
condition of the Trust Property, or for any negligence of any
other Person in the management, upkeep, repair or control of the Trust Property
resulting in loss or injury or death to any tenant, licensee, employee or
stranger. Nothing herein contained shall be construed as constituting
Beneficiary or any other Senior Secured Party "mortgagee in
possession."

           

          8.12
Headings. The
Article and/or Section headings and the Table of Contents herein are included
for convenience of reference only and shall not constitute a part of this Trust
Deed for any other purpose.

           

          8.13
Marshalling.
Notwithstanding anything herein to the contrary, Grantor will not: (a) at any
time insist upon, or plead, or in any manner whatever claim or take any benefit
or advantage of any stay or extension or moratorium law, any exemption from
execution or sale of the Trust Property or any part thereof, whenever or
wherever enacted, which may affect the covenants and terms of performance of
this Trust Deed; (b) claim, take or insist upon any benefit or advantage of any
law now or hereafter in force providing for the valuation or appraisal of the
Trust Property, or any part thereof, prior to any sale or sales thereof which
may be made pursuant to any provision herein, or pursuant to the decree,
judgment or order of any court of competent jurisdiction; or (c) after any such
sale or sales, claim or exercise any right under any statute heretofore or
hereafter enacted to reinstate the Trust Deed or to redeem the property so sold
or any part thereof. Additionally,
Grantor hereby expressly waives all benefit or advantage of any such law or
laws. Grantor, for itself and all who may claim under it, waives, to the extent
that it lawfully may, all right to have the Trust Property marshaled upon any
foreclosure hereof. Beneficiary shall have the right to determine the order in
which any or all portions of the Obligations are satisfied from the proceeds
realized upon the exercise of the remedies provided herein. Grantor, any party
who consents to this Trust Deed and any party who now or hereafter acquires a
lien or security interest in any of the Trust Property and who has actual or
constructive notice hereof hereby waives any and all right to require
the

           

           

          
            
              
              

            

            
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          marshalling
of assets in connection with the exercise of any of the remedies permitted by
applicable Law or provided herein.

           

          8.14
Waiver of Jury Trial
and Consent to Jurisdiction. GRANTOR 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 TRUST DEED, ANY OTHER FINANCING DOCUMENT, OR THE TRANSACTIONS
CONTEMPLATED HEREBY OR THEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER
THEORY). GRANTOR (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 TRUST DEED AND THE
OTHER FINANCING DOCUMENTS BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND
CERTIFICATIONS IN THIS SECTION 8.14. In the
event of litigation, this Trust Deed may be filed as a written consent to a
trial by the court. Grantor hereby irrevocably submits to the jurisdiction of
any court of competent jurisdiction located in the state in which any portion of
the Trust Property is located in connection with any proceeding arising out of
or relating to this Trust Deed involving such portion of the Trust
Property.

           

          8.15
Maximum Indebtedness
and Future Advances. This Trust Deed shall secure not only existing
Obligations, but also such future advances, whether such advances are obligatory
or are to be made at the option of Beneficiary or the Senior Secured Parties or
otherwise related to or in connection with the Credit Agreement, or the other
Financing Documents, as are made by Beneficiary and/or the Senior Secured
Parties to Grantor to the same extent as if such future advances were made on
the date of the execution of this Trust Deed, including (a) any and all
additional advances made by Beneficiary or the Senior Secured Parties to protect
or preserve the Trust Property or the Lien hereof on the Trust Property, or to
pay taxes, to pay premiums on insurance on the Trust Property (whether or not
the original Grantor remains the owner of the Trust Property at the time of such
advances and whether or not the original Beneficiary remains the Collateral
Agent); (b) any and all expenses incident to the collection of the Obligations
and the foreclosure hereof by action in any court or by exercise of the power of
sale herein contained; (c) any and all amounts now owing or which may hereafter
be owing by Grantor to Beneficiary, and/or the Senior Secured Parties pursuant
to the Financing Documents, however and whenever incurred or evidenced, whether
direct or indirect, absolute or contingent, due or to become due, together with
any and all renewal or renewals and extension or extensions of the Obligations;
and (d) the full and prompt payment and performance of any and all obligations
or covenants of Grantor to

           

           

          
            
              
              

            

            
              6.04(g)-A
-39 

              
                

              

            

            
              
              

            

          

           

           

           

           

          Beneficiary
and/or the Senior Secured Parties under the terms of any other agreements,
assignments or other instruments now or hereafter evidencing, securing or
otherwise relating to the Obligations, including the Financing
Documents.

           

          8.16
Lien Absolute;
Multiple Collateral Transaction. Grantor acknowledges that this Trust
Deed, the other Financing Documents, and those documents required by the
Financing Documents together secure the Obligations. Grantor agrees that the
Lien of this Trust Deed and all Obligations shall be absolute and unconditional
and shall not in any manner be affected or impaired by any lack of validity or
enforceability of the Credit Agreement or any other Financing Document, any
agreement with respect to any of the Obligations or any other agreement or
instrument relating to any of the foregoing, and the lien hereof shall not be
impaired by any acceptance by Beneficiary of any security for or guarantees of
any of the Obligations, or by any failure, neglect or omission on the part of
Beneficiary to realize upon or protect any of the Obligations or any collateral
security therefor, including the Financing Documents, or due to any other
circumstance which might otherwise constitute a defense available to, or a
discharge of Grantor in respect of the Obligations or this Trust Deed (other
than the indefeasible payment in full of all the Obligations). The lien hereof
shall not in any manner be impaired or affected by any change in the time,
manner or place of payment of, or in any other term of, all or any of the
Obligations or by any release (except as to the property released), sale,
pledge, surrender, compromise, settlement, nonperfection, renewal, extension,
indulgence, alteration, exchange, modification or disposition of any of the
Obligations or of any of the collateral security therefor, or any amendment or
waiver of or any consent to any departure from the Credit Agreement, or any
other Financing Document or of any guaranty thereof, if any, and Beneficiary
may, in Beneficiary's discretion, foreclose, exercise any power of sale, or
exercise any other remedy available under any or all of the Financing Documents
without first exercising or enforcing any other rights and remedies hereunder.
Such exercise of rights and remedies under any or all of the Financing Documents
shall not in any manner impair the Obligations or the Lien of this Trust Deed,
and any exercise of any rights or remedies hereunder shall not impair the Lien
of any of the other Financing Documents or any rights and remedies of any Senior
Secured Party thereunder. Grantor specifically consents and agrees that
Beneficiary may exercise any rights and remedies hereunder and under the other
Financing Documents separately or concurrently and in any order that Beneficiary
may deem appropriate.

           

          8.17
Discharge of Trust
Deed. Upon written request of Grantor and upon payment in full and
performance of all of the Obligations, and upon payment in full to Beneficiary
of its fees, costs and expenses incurred or to be incurred thereby, this Trust
Deed shall be discharged and satisfied or, at Grantor's option, assigned to
Grantor or to any other person at Grantor's direction, without warranty,
representation by, or recourse to, Beneficiary (except that Beneficiary shall be
deemed to have represented that Beneficiary has not assigned or encumbered this
Trust Deed). Concurrently with such release and

           

           

          
            
              
              

            

            
              6.04(g)-A
-40 

              
                

              

            

            
              
              

            

          

           

           

           

           

          satisfaction
or assignment of this Trust Deed, Beneficiary, on the written request and at the
expense of Grantor, will execute and deliver such instruments of conveyance,
assignment and release (including appropriate UCC-3 terminations) prepared by
Grantor and as may reasonably be requested by Grantor to evidence such release
and satisfaction, or assignment.

           

          8.18
Renewal or Extension
of Notes; Substitute Notes. This Trust Deed and all other instruments
evidencing or securing the Notes shall likewise secure any extension,
modification, renewal, substitution or replacement of the Notes and any term
note or term notes which may be executed and delivered in substitution or
replacement for the Notes. The lien of this Trust Deed shall in no manner be
affected by any such extension, modification, renewal, substitution or
replacement.

           

          8.19
Conflicts. In
the event of any conflict or inconsistency between the terms of this Trust Deed
and those of the Credit Agreement, the terms of the Credit Agreement shall
control. Grantor hereby acknowledges that it was represented by counsel in
connection with the negotiation and drafting of this Trust Deed and that this
Trust Deed and the other Financing Documents shall not be subject to the
principle of construing their meaning against the party which drafted the
same.

           

          8.20
Assumption Not a
Novation. Beneficiary's acceptance of an assumption of the obligations of
this Trust Deed and the Notes, and the release of Grantor hereof, shall not
constitute a novation.

           

          8.21
Acknowledgment of
Receipt of Copies of Debt Instrument. Grantor hereby acknowledges the
receipt of a copy of this Trust Deed and the Credit Agreement, together with a
copy of each other agreement, document or instrument executed in connection with
this Trust Deed.

           

          8.22
INSURANCE
WARNING. UNLESS YOU (GRANTOR) PROVIDE US (BENEFICIARY) WITH EVIDENCE OF
THE INSURANCE COVERAGE AS REQUIRED BY OUR CONTRACT OR LOAN AGREEMENT, WE MAY
PURCHASE INSURANCE AT YOUR EXPENSE TO PROTECT OUR INTEREST. THIS INSURANCE MAY,
BUT NEED NOT, ALSO PROTECT YOUR INTEREST. IF THE COLLATERAL BECOMES DAMAGED, THE
COVERAGE WE PURCHASE MAY NOT PAY ANY CLAIM YOU MAKE OR ANY CLAIM MADE AGAINST
YOU. YOU MAY LATER CANCEL THIS COVERAGE BY PROVIDING EVIDENCE THAT YOU HAVE
OBTAINED PROPERTY COVERAGE ELSEWHERE.

           

          YOU ARE
RESPONSIBLE FOR THE COST OF ANY INSURANCE PURCHASED BY US. THE COST OF THIS
INSURANCE MAY BE ADDED TO YOUR CONTRACT OR LOAN BALANCE. IF THE COST IS ADDED TO
YOUR

           

           

          
            
              
              

            

            
              6.04(g)-A
-41 

              
                

              

            

            
              
              

            

          

           

           

           

           

          CONTRACT
OR LOAN BALANCE, THE INTEREST RATE ON THE UNDERLYING CONTRACT OR LOAN WILL APPLY
TO THIS ADDED AMOUNT. THE EFFECTIVE DATE OF COVERAGE MAY BE THE DATE YOUR PRIOR
COVERAGE LAPSED OR THE DATE YOU FAILED TO PROVIDE PROOF OF
COVERAGE.

           

          THIS
COVERAGE WE PURCHASE MAY BE CONSIDERABLY MORE EXPENSIVE THAN INSURANCE YOU CAN
OBTAIN ON YOUR OWN AND MAY NOT SATISFY ANY NEED FOR PROPERTY DAMAGE COVERAGE OR
ANY MANDATORY LIABILITY INSURANCE REQUIREMENTS IMPOSED BY APPLICABLE
LAW.

           

          8.23
USE NOTICE.
BEFORE SIGNING OR ACCEPTING THIS INSTRUMENT, THE PERSON TRANSFERRING FEE TITLE
SHOULD INQUIRE ABOUT THE PERSON'S RIGHTS, IF ANY, UNDER ORS 197.352. THIS
INSTRUMENT DOES NOT ALLOW USE OF THE PROPERTY DESCRIBED IN THIS INSTRUMENT IN
VIOLATION OF APPLICABLE LAND USE LAWS AND REGULATIONS. BEFORE SIGNING OR
ACCEPTING THIS INSTRUMENT, THE PERSON ACQUIRING FEE TITLE TO THE PROPERTY SHOULD
CHECK WITH THE APPROPRIATE CITY OR COUNTY PLANNING DEPARTMENT TO VERIFY APPROVED
USES, TO DETERMINE ANY LIMITS ON LAWSUITS AGAINST FARMING OR FOREST PRACTICES AS
DEFINED IN ORS 30.930, AND TO INQUIRE ABOUT THE RIGHTS OF NEIGHBORING PROPERTY
OWNERS, IF ANY, UNDER ORS 197.352.

           

          8.24
STATUTE OF FRAUDS
NOTICE. UNDER OREGON LAW, MOST AGREEMENTS, PROMISES AND COMMITMENTS MADE
BY US (BENEFICIARY) CONCERNING LOANS AND OTHER CREDIT EXTENSIONS WHICH ARE NOT
FOR PERSONAL, FAMILY OR HOUSEHOLD PURPOSES OR SECURED SOLELY BY THE BORROWER'S
RESIDENCE MUST BE IN WRITING, EXPRESS CONSIDERATION AND BE SIGNED BY US TO BE
ENFORCEABLE.

           

          IN
WITNESS WHEREOF, Grantor has caused this Trust Deed to be signed by Grantor's
duly authorized representative as of the day and year first above
written.

           

          GRANTOR:

           

          PACIFIC
ETHANOL COLUMBIA, LLC 

           

           

          By:
______________________________

          Name:

          Title:

           

           

          
            
              
              

            

            
              6.04(g)-A
-42 

              
                

              

            

            
              
              

            

          

           

           

          STATE
OF ________________   )

                                                                      
:     ss.:

          COUNTY
OF ______________   )

           

           

          On this
____ day of ______, 2007, before me, a Notary Public in and for the
aforesaid County
and State, personally appeared ________________, to me personally known,
who being
by me duly sworn, did say that he is the _______________ of
[___________________], the said limited liability company; that said instrument
was signed on behalf of [________________] by authority of its managers,
and that the said ________________________________ of
[____________________], acknowledged
the execution of said instrument to be the voluntary act and deed of said
limited liability company, by it and by him voluntarily executed.

           

           

          _____________________________________

          Notary
Public in and for said County and State

           

          Printed
Name: ___________________________

           

          My
Commission Expires: ___________________

           

           

           

           

          
            
              
              

            

            
              6.04(g)-A
-43 

              
                

              

            

            
              
              

            

          

           

           

          EXHIBIT
A

           

          LEASED
PREMISES

           

           

           

           

           

          
            
              
              

            

            
              6.04(g)-A
-44 

              
                

              

            

            
              
              

            

          

        

      

       

      
        EXHIBIT
6.04(g)-B

        
          to Credit Agreement

           

           

          [FORM OF PLEDGE
AGREEMENT]

        

         

        
          

        

         

        
          PLEDGE
AND SECURITY AGREEMENT

        

         

         

        
          among

        

         

        
        

         

        [__________________],

        as
Pledgor

         

         

         

        [__________________],

        as
Company

         

         

        and

         

         

        [__________________],

        as
Collateral Agent

         

         

         

        Dated
as of [______], 2007

         

         

          
            

          

        

        This draft document is not a
contract or an offer to enter into a contract. Only the document as executed by the
parties hereto will contain the terms that bind them. Until the document is executed by each
of the parties hereto, none of them intends to be bound hereby.

         

        
          
            
            

          

          
            6.04(g)-B
- 1

            
              

            

          

          
            
            

          

        

         

        TABLE
OF CONTENTS

         

        
          	 	 	Page
	 	 	 
	ARTICLE
      I   	DEFINITIONS  	2
	 	 	 
	Section
    1.01	Defined
    Terms	2
	Section
    1.02	Credit Agreement and
      UCC Definitions	2
	Section
    1.03	Rules of
      Interpretation	2
	 	 	 
	ARTICLE
      II  	PLEDGE AND GRANT OF
      SECURITY INTEREST  	2
	 	 	 
	Section
      2.01 	Granting
      Clause  	2
	Section
      2.02 	Delivery of
      Collateral  	3
	Section
      2.03 	Retention of Certain
      Rights 	4
	Section
      2.04 	Obligations
      Unconditional  	4
	Section
      2.05 	Waiver  	5
	 	 	 
	ARTICLE
      III 	EVENTS OF
      DEFAULT  	6
	 	 	 
	Section
    3.01	Events of
      Default  	6
	 	 	 
	ARTICLE
      IV 	REPRESENTATIONS AND
      WARRANTIES  	6
	 	 	 
	Section
    4.01	Organization; Power;
      Compliance with Law and Contractual Obligations 	7
	Section
    4.02	Due Authorization;
      Non-Contravention  	7
	Section
    4.03	Validity  	7
	Section
    4.04	Beneficial
      Ownership; Pledged Equity Interests	7
	Section
    4.05	Name	7
	Section
      4.06  	Organizational
      Number 	7
	Section
      4.07 	Capital Adequacy;
      Etc  	8
	 	 	 
	ARTICLE
      V 	COVENANTS OF
      PLEDGOR  	8
	 	 	 
	Section
      5.01 	Defense of
      Collateral  	8
	Section
      5.02  	Limitation of
      Liens 	8
	Section
      5.03  	No Sale of
      Collateral 	8
	Section
      5.04 	No Impairment of
      Security 	8
	Section
      5.05 	Filing of Bankruptcy
      Proceedings  	8
	Section
      5.06  	Distributions 	9
	Section
      5.07 	Maintenance of
      Records	9
	Section
      5.08 	Name; Jurisdiction
      of Organization	9
	Section
      5.09 	Amendments to
      Organizational Documents  	9
	Section
    5.10	Perfection  	9
	Section
    5.11	Information
      Concerning Collateral 	10
	Section
    5.12	Payment of
      Taxes  	10
	 	 	 
	ARTICLE
      VI  	REMEDIES UPON AN
      EVENT OF DEFAULT  	10
	 	 	 
	Section
    6.01	Remedies Upon an
      Event of Default  	10
	Section
    6.02	Minimum Notice
      Period 	11
	Section
    6.03	Sale of
      Collateral  	12

           

          
            
              
              

            

            
              6.04(g)-B
- 2

              
                

              

            

            
              
              

            

          

           

          
            	 Section
      6.04	 Actions Taken
      by Collateral Agent	 12
	 Section
      6.05	 Private
      Sales	 12
	 Section
      6.06	 Compliance
      With Limitations and Restrictions	 13
	 Section
      6.07	 No Impairment
      of Remedies	13
	 	 	 
	ARTICLE
      VII 	FURTHER
      ASSURANCES  	 13
	 	 	 
	 Section
      7.01	Attorney-in-Fact 	 13
	 Section
      7.02	Delivery of
      Collateral; Proxy  	 14
	 Section
      7.03	Place of Business;
      Location of Records  	 14
	 Section
      7.04	Waiver of Transfer
      Restrictions  	 14
	 Section 7.05
      	The Company's
      Consent and Covenant	 14
	 Section
      7.06	Foreclosure	14
	 Section
      7.07	Waiver of Rights of
      Subrogation 	 15
	 Section
      7.08	Application of
      Proceeds  	 15
	 Section
      7.09	Collateral Agent May
      Perform 	15
	 Section
      7.10	Limitation
      on Duty of Collateral Agent with Respect to the
Collateral	 15
	 Section
      7.11	Termination of
      Security Interest	 15
	 	 	 
	ARTICLE
      VIII  	MISCELLANEOUS  	 16
	 	 	 
	Section
    8.01	Amendments,
      Etc 	 16
	Section
    8.02	Applicable Law;
      Jurisdiction; Etc 	 16
	Section
    8.03	Counterparts;
      Effectiveness	 18
	Section
    8.04	Delay Not Waiver;
      Separate Causes of Action 	 18
	Section
    8.05	Entire
      Agreement  	 18
	Section
    8.06	Expenses	18
	Section
    8.07	Headings
      Descriptive 	 18
	Section
    8.08	Interest  	 18
	Section
    8.09	Notices  	 18
	Section
    8.10	No Waiver;
      Cumulative Remedies  	 19
	Section
    8.11	Reinstatement	 19
	Section
    8.12	Remedies
      Cumulative  	 20
	Section
    8.13	Rights of Collateral
      Agent  	 20
	Section
    8.14	Severability  	 20
	Section
      8.15 	Successions and
      Assignments 	 20
	Section
      8.16 	Survival of
      Provisions 	20
	Section
      8.17  	Third Party
      Rights  	 21
	Section
      8.18 	Time	 21
	Section
      8.19  	Waiver of
      Consequential Damages, Etc 	 21
	Section
      8.20 	Waiver of Litigation
      Payments	21
	Section
      8.21  	[Scope of
      Liability] 	21

          

        

         

        
          
            
            

          

          
            6.04(g)-B
- 3

            
              

            

          

          
            
            

          

        

         

        EXHIBITS

         

        Exhibit
A        -   
    Irrevocable Proxy

        Exhibit
B        
-       Transfer Document

        Exhibit
C        
-       Schedule of Security Filings

        Schedule
I      -      
Description of Pledged Equity Interests

         

         

        
          
            
            

          

          
            6.04(g)-B
- 4

            
              

            

          

          
            
            

          

        

         

        PLEDGE AND SECURITY
AGREEMENT

         

        This
PLEDGE AND SECURITY AGREEMENT, dated as of [___________], 2007
(this "Agreement") is
entered into by and among [___________], a
[limited liability company] organized and existing under the Laws of
the State
of [Delaware] (the "Pledgor"),
[___________], a limited liability company organized
and existing under the Laws of the State of Delaware, (the "Company"), and
[___________], in its
capacity as collateral agent (together with its successors, designees
and assigns in such capacity, the "Collateral Agent")
for the Senior Secured Parties.

         

        RECITALS

         

        WHEREAS,
the Company has entered into that certain Credit Agreement, dated as of
[___________], 2007 (as amended, amended and restated, restated, supplemented or
otherwise
modified from time to time, the "Credit Agreement")
among the Pledgor, [___________], a
Delaware limited liability company ("[___________]"), [___________],
a Delaware limited liability company ("[___________]"), [___________],
a
Delaware limited liability company ("[___________]"), [___________],
a Delaware limited liability company ("[___________]"), [___________],
a
Delaware limited liability company ("[___________]"), and,
together with [___________], [the Pledgor], [___________], [___________],
and [___________],
the "Borrowers"), Pacific
Holding as the Borrowers' Agent, each of the Lenders from time to time party
thereto, the Administrative Agent, as collateral agent for the Lenders,
[___________], as
accounts bank, WESTLB AG, NEW YORK BRANCH, as lead arranger
and sole lead bookrunner, MIZUHO CORPORATE BANK, LTD., as lead arranger and
co-syndication agent, CIT CAPITAL SECURITIES LLC, as lead arranger and
co-syndication agent, COOPERATIEVE CENTRALE RAIFFEISEN-BOERENLEENBANK BA.,
"RABOBANK NEDERLAND", NEW YORK BRANCH, as lead arranger and co-documentation
agent, and BANCO SANTANDER CENTRAL HISPANO S.A, NEW YORK BRANCH, as lead
arranger and
co-documentation agent, pursuant to which, among other things, the Lenders have
[made] [agreed to make] loans to, and for the benefit of, the
Borrowers;

         

        WHEREAS,
certain Lenders or their affiliates may, from time to time, enter into interest
rate hedging agreements with the Company as permitted under the Credit
Agreement; and

         

        WHEREAS,
as of the date hereof, the Pledgor is the sole member and owns one hundred
(100%) of the Equity Interests of the Company and will obtain benefits as a
result of the Loans, and it is a requirement under the Credit Agreement that the
Pledgor execute and deliver this Agreement;

         

        AGREEMENT

         

        NOW,
THEREFORE, in consideration of the promises contained herein, and to induce the
Lenders to enter into the Credit Agreement and to make the advances of credit to
the Borrowers contemplated thereby, and to induce the Interest Rate Protection
Providers to enter into the
Interest Rate Protection Agreements and to provide the interest rate hedges
contemplated thereby, and for other good and valuable consideration, the receipt
and adequacy of which are hereby acknowledged, intending to be legally bound,
the Company and the Pledgor hereby agree with the Collateral Agent, for the
benefit of the Senior Secured Parties, as follows:

         

        
          
            
            

          

          
            6.04(g)-B
- 5

            
              

            

          

          
            
            

          

        

         

        ARTICLE
I

         

        DEFINITIONS

         

        Section
1.01 Defined
Terms. The following terms (whether or not underscored) when used in this
Agreement, including its preamble and recitals, shall have the following
meanings:

         

        "Collateral
Agent" has the meaning
given in the preamble to this Agreement. "Collateral" has the meaning given in Section
2.01 (Granting
Clause).

         

        "Company" has the
meaning given in the preamble to this
Agreement.

         

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

         

        "Non-Recourse Party"
has the meaning given in Section 8.21 (Scope
of Liability). 

         

        "Pledged Equity
Interests" has the meaning given in Section 2.01 (Granting
Clause). 

         

        "Pledgor" has the
meaning given in the preamble to this
Agreement.

         

        Section
1.02 Credit Agreement
and UCC Definitions. Unless otherwise defined herein or unless the
context otherwise requires, terms used in this Agreement, including its preamble
and recitals, have the meanings provided in the Credit Agreement or, if not
defined therein, the UCC.

         

        Section
1.03 Rules of
Interpretation. The rules of interpretation set forth in Section 1.02 (Principles
of Interpretation) of the Credit Agreement shall apply to this Agreement,
including its preamble and recitals.

         

        ARTICLE
II

         

        PLEDGE
AND GRANT OF SECURITY INTEREST

         

        Section
2.01 Granting
Clause. To secure the timely payment in full when due (whether at stated
maturity, by acceleration or otherwise) in cash and performance in full of the
Obligations, the Pledgor hereby collaterally assigns, grants and pledges to the
Collateral Agent, for the benefit of the Senior Secured Parties, a continuing
security interest and Lien in all the estate, right, title and interest of the
Pledgor, now owned or hereafter existing or acquired, and howsoever its interest
therein may arise or appear (whether by ownership, security interest, Lien,
claim or otherwise), including all the estate, right, title and interest of the
Pledgor in, to and under the following (the "Collateral"):

         

        
          
            
            

          

          
            6.04(g)-B
- 6

            
              

            

          

          
            
            

          

        

         

        (a) Any
and all of the Pledgor's right(s), title(s) and interest(s), whether now
owned or
hereafter existing or acquired, in the Company, and all of the Equity Interests
of the Company related thereto, whether or not evidenced or represented by any
certificated security or other instrument, (the "Pledged
Equity Interests"), including the membership interests described on Schedule
I hereto and the Pledgor's share of

         

        
          
            	
                  	
                    (i) 

                  	
                    all
      rights to receive income, gain, profit, dividends and other distributions
      allocated or distributed to the Pledgor in respect of or in exchange for
      all or any portion of the Pledged Equity
  Interests;

                  

          

        

         

        
          
            	
                  	
                    (ii) 

                  	
                    all
      of the Pledgor's capital or ownership interest or other Equity Interest,
      including capital accounts, in the
Company;

                  

          

        

         

        
          
            	
                  	
                    (iii) 

                  	
                    all
      of the Pledgor's voting rights in or rights to control or direct the
      affairs of the Company;

                  

          

        

         

        
          
            	
                  	
                    (iv) 

                  	
                    all
      other rights, title and interest in or to the Company derived from the
      Pledged Equity Interests;

                  

          

        

         

        
          
            	
                  	
                    (v) 

                  	
                    all
      indebtedness or other obligations of the Company owed to the
      Pledgor;

                  

          

        

         

        
          
            	
                  	
                    (vi) 

                  	
                    all
      claims of the Pledgor for damages arising out of, or for any breach or
      default relating to, the Pledged Equity
  Interests;

                  

          

        

         

        
          
            	
                  	
                    (vii) 

                  	
                    all
      securities, notes, certificates and other instruments representing or
      evidencing any of the foregoing rights and interests or the ownership
      thereof and any interest of the Pledgor reflected in the books of any
      financial intermediary pertaining to such rights and
      interests;

                  

          

        

         

        
          
            	
                  	
                    (viii) 

                  	
                    all
      distributions, non-cash dividends, cash, options, warrants, stock splits,
      reclassifications, rights, instruments or other investment property and
      other property or proceeds from time to time received, receivable or
      otherwise distributed in respect of or in exchange for any or all of such
      rights and interests; and

                  

          

        

         

        
          
            	
                  	
                    (ix) 

                  	
                    all
      security entitlements of the Pledgor in any and all of the foregoing;
      and

                  

          

        

         

        (b) all
proceeds (including proceeds of proceeds) of the foregoing Collateral,
whether
cash or non-cash; provided,
however, that "Collateral" shall not include any cash or other property
distributed to the Pledgor following a distribution made in accordance with
Section
7.02(s) (Negative
Covenants — Restricted Payments) of the Credit Agreement.

         

        Section 2.02 Delivery of
Collateral.

         

        (a) All
certificates, notes and other instruments representing or evidencing any
Collateral
shall be delivered to and held by or on behalf of, and, in the case of notes,
endorsed to the order
of, the Collateral Agent, or its designee pursuant hereto, in the manner set
forth in Section 7.02
(Delivery
of Collateral: Proxy).

         

        
          
            
            

          

          
            6.04(g)-B
- 7

            
              

            

          

          
            
            

          

        

         

        (b) If
any Collateral consists of security entitlements, the Pledgor shall transfer
such
security entitlements to the Collateral Agent (or its custodian, nominee or
other designee) or cause the applicable securities intermediary to agree that it
will comply with entitlement orders by the Collateral Agent without further
consent by the Pledgor.

         

        Section
2.03 Retention of
Certain Rights. So long as the Collateral Agent has not elected to
exercise remedies under this Agreement in connection with an Event of Default
that has occurred and is continuing, the Pledgor reserves the right to exercise
all voting and other rights, title and interest with respect to the Collateral
(except as limited by the Financing Documents) and, to the extent permitted
under the Credit Agreement, to receive all income, gains, profits, dividends and
other distributions from the Collateral whether non-cash dividends, cash,
options, warrants, stock splits, reclassifications, rights, instruments or other
investment property or other property or proceeds from time to time received,
receivable or otherwise distributed in respect of or in exchange for any or all
of such rights and interests.

         

        Section
2.04 Obligations
Unconditional. The obligations of the Pledgor in this Agreement shall be
continuing, irrevocable, primary, absolute and unconditional irrespective of the
value, genuineness, validity, regularity or enforceability of any Financing
Document or any other agreement or instrument referred to therein, or any
substitution, release or exchange of any guarantee of or security for any of the
Obligations and, to the fullest extent permitted by applicable Law, irrespective
of any other circumstance whatsoever that might otherwise constitute a legal or
equitable discharge or defense of a surety or guarantor, other than the
occurrence of the Discharge Date and other than any defense that the underlying
obligation has been satisfied in accordance with the terms of the Financing
Documents, it being the intent of this Section 2.04 that the
obligations of the Pledgor hereunder shall be absolute and unconditional under
any and all circumstances. Without limiting the generality of the foregoing, it
is agreed that the occurrence of any one or more of the following shall not
alter or impair the liability of the Pledgor hereunder, which shall remain
absolute and unconditional as described above without regard to and not be
released, discharged or in any way affected (whether in full or in part)
by:

         

        (a) at any
time or from time to time, without notice to the Pledgor, the time for any
performance of or compliance with any of the Obligations is extended, or such
performance or compliance is waived;

         

        (b) any
Financing Document is amended or modified or there is a departure from, or
waiver of, any of the terms of any Financing Document;

         

        (c) the
maturity of any of the Obligations is accelerated, or any of the Obligations is
modified, supplemented and/or amended in any respect, or any right under any
Financing Document or any other agreement or instrument referred to therein is
waived or any guarantee of any of the Obligations or any security therefore is
released or exchanged in whole or in part or otherwise dealt with;

         

        
          
            
            

          

          
            6.04(g)-B
- 8

            
              

            

          

          
            
            

          

        

         

        (d) any lien
granted to, or in favor of, the Collateral Agent as security for any of the
Obligations fails to be perfected; or

         

        (e) any
proceeding, voluntary or involuntary, involving the bankruptcy, insolvency,
receivership, reorganization, liquidation or arrangement of the Pledgor or by
any defense which the Pledgor may have by reason of the order, decree or
decision of any court or administrative body resulting from any such proceeding.
The Pledgor acknowledges and agrees that the Obligations include interest on the
Obligations at the applicable rate therefor under the Financing Documents which
accrues after the commencement of any such proceeding (or, if interest on any
portion of the Obligations ceases to accrue by operation of Law by reason of the
commencement of said proceeding, such Obligations include the interest which
would have accrued on such portion of the Obligations if said proceedings had
not been commenced), since it is the intention of the parties that the amount of
the Obligations secured pursuant to this Agreement should be determined without
regard to any rule of Law or order which may relieve the Pledgor of any portion
of the Obligations. The Pledgor will permit any trustee in bankruptcy, receiver,
debtor in possession, assignee for the benefit of creditors or similar person to
pay the Collateral Agent, or allow the claim of the Collateral Agent in respect
of, interest which would have accrued after the date on which such proceeding is
commenced.

         

        Section
2.05 Waiver.
The enforceability and effectiveness of this Agreement and the liability of the
Pledgor, and the rights, remedies, powers and privileges of the Collateral
Agent, under this Agreement shall not be affected, limited, reduced, discharged
or terminated, and the Pledgor hereby expressly waives, to the extent permitted
by applicable Laws, to the fullest extent permitted by Law any defense now or in
the future arising, by reason of:

         

        (a) the
illegality, invalidity or unenforceability of all or any part of the
Obligations, any Financing Document or any agreement, security document,
guarantee or other instrument relating to all or any part of the
Obligations;

         

        (b) the
illegality, invalidity or unenforceability of any security or guarantee for all
or any part of the Obligations or the lack of perfection or continuing
perfection or failure of the priority of any lien or encumbrance on any
collateral for all or any part of the Obligations;

         

        (c) the
cessation, for any cause whatsoever, of the liability of any Person that is a
guarantor of all or any part of the Obligations (other than by the occurrence of
the Discharge Date);

         

        (d) any
judicial or nonjudicial foreclosure or sale of, or other election of remedies
with respect to, any interest in real property or other Collateral serving as
security for all or any part of the Obligations, even though such foreclosure,
sale or election of remedies may impair the subrogation rights of either the
other Borrowers, or the Pledgor or may preclude the other Borrowers or the
Pledgor from obtaining reimbursement, contribution, indemnification or other
recovery from the other Borrowers or any other Person and even though the other
Borrowers or the Pledgor may not, as a result of such foreclosure, sale or
election of remedies, be liable for any deficiency;

         

        
          
            
            

          

          
            6.04(g)-B
- 9

            
              

            

          

          
            
            

          

        

         

        (e) any act
or omission of the Collateral Agent or any other Person that directly or
indirectly results in or aids the discharge or release of the Pledgor or any
part of the Obligations or any security or guarantee (including any letter of
credit) for all or any part of the Obligations by operation of Law or otherwise
(other than the occurrence of the Discharge Date);

         

        (f) any Law
which provides that the obligation of a surety or the Pledgor must neither be
larger in amount nor in other respects more burdensome than that of the
principal or which reduces a surety's or the Pledgor's obligation in proportion
to the principal obligation;

         

        (g) any
bankruptcy, insolvency, reorganization, arrangement, readjustment of debt,
liquidation or dissolution proceeding commenced by or against any Person,
including any discharge of, or bar or stay against collecting, all or any part
of the Obligations (or any interest on all or any part of the Obligations) in or
as a result of any such proceeding, any failure of the Collateral Agent to file
a claim in any such proceeding, or the occurrence of any of the following: (i)
the election by the Collateral Agent, in any bankruptcy proceeding of any
Person, of the application or non-application of Section 1111(b)(2) of the
Bankruptcy Code, (ii) any extension of credit or the grant of any lien or
encumbrance under Section 364 of the Bankruptcy Code, (iii) any use of cash
collateral under Section 363 of the Bankruptcy Code, or (iv) any agreement or
stipulation with respect to the provision of adequate protection in any
bankruptcy proceeding of any Person; or

         

        (h) any
action taken by the Collateral Agent that is authorized by this Section 2.05 or
otherwise in this Agreement or by any other provision of any Financing Document
or any omission to take any such action.

         

        ARTICLE
III

         

        EVENTS OF
DEFAULT

         

        Section
3.01 Events of
Default. The occurrence of an Event of Default, whatever the reason for
such Event of Default and whether it is voluntary or involuntary or is effected
by operation of Law or pursuant to any judgment, decree or order of any court or
any order, rule or regulation of any Governmental Authority, shall constitute a
default hereunder. Any such Event of Default shall be considered cured or waived
for the purposes of this Agreement when it has been cured or waived in
accordance with the Credit Agreement.

         

        ARTICLE
IV

         

        REPRESENTATIONS
AND WARRANTIES

         

        The
Pledgor represents and warrants to and in favor of the Collateral Agent and the
Senior Secured Parties, as of the date hereof, as of the Closing Date and as of
each Funding Date, as of the date of each Funding Notice, as of the date of each
Issuance Request, and as of the Conversion Date, as follows:

         

        
          
            
            

          

          
            6.04(g)-B
- 10

            
              

            

          

          
            
            

          

        

         

        Section
4.01 Organization;
Power; Compliance with Law and Contractual Obligations. The
Pledgor (a) is a [limited liability company] validly organized and existing and
in good
standing under the Laws of the State of [Delaware], (b) is duly qualified to do
business as is now
being conducted and as is proposed to be conducted and is in good standing as a
[limited liability company] 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) has all requisite [limited liability company]
power and authority and holds all Governmental Approvals required as of the date
of this representation is made or deemed repeated to enter into and perform its
obligations under this Agreement.

         

        Section
4.02 Due
Authorization; Non-Contravention.

         

        (a) The
execution, delivery and performance by the Pledgor of this Agreement are within
the Pledgor's [limited liability company powers], have been duly authorized by
all necessary [limited liability company] action, and do not contravene in any
material respect (i) the Pledgor's Organic Documents, or (ii) any applicable Law
or any Contractual Obligation binding on or affecting the Pledgor.

         

        (b) The
exercise by the Collateral Agent of any of its rights and remedies with respect
to the Collateral in accordance with the terms of this Agreement will not
contravene in any material respect any applicable Law or any Contractual
Obligation binding on or affecting the Pledgor or any of the properties of the
Pledgor and will not result in or require the creation of any Lien (other than
Permitted Liens) upon or with respect to any of the Collateral other than
pursuant to this Agreement.

         

        Section
4.03 Validity.
This Agreement constitutes the legal, valid and binding obligations of the
Pledgor enforceable in accordance with its terms, except as the enforceability
hereof may be limited by (a) bankruptcy, insolvency, reorganization, or other
similar Laws affecting the enforcement of creditors' rights generally and (b)
general equitable principles (whether considered in a proceeding in equity or at
Law).

         

        Section
4.04 Beneficial
Ownership; Pledged Equity Interests. The Pledgor is the lawful and
beneficial owner of and has full right, title and interest in, to and under all
rights and interests comprising the Collateral, subject to no Liens, no prior
assignments, no effective UCC financing statements, no security agreements and
no other instruments similar in effect (other than this Agreement, the Liens
created hereunder and other Permitted Liens). The Pledged Equity Interests (a)
have been duly authorized and validly issued, (b) are fully paid and
non-assessable and (c) constitute one hundred percent (100%) of the outstanding
Equity Interests of the Company.

         

        Section
4.05 Name. The
name of the Pledgor is [________], as indicated in the public
records of the State of [Delaware], and it has not had any other names within
the past five (5) years [other than [________]].

         

        Section
4.06 Organizational
Number. The Pledgor's federal employee identification number is
[________] and Pledgor's organizational number is [________].

         

        
          
            
            

          

          
            6.04(g)-B
- 11

            
              

            

          

          
            
            

          

        

         

        Section
4.07 Capital Adequacy;
Etc.

         

        (a) The
Pledgor is, and after giving effect to the transactions contemplated hereby
will be,
Solvent.

         

        (b) The
Pledgor is not executing this Agreement with any intention to hinder, delay or
defraud any present or future creditor or creditors of the Pledgor.

         

        ARTICLE
V

         

        COVENANTS
OF PLEDGOR

         

        The
Pledgor covenants to and in favor of the Collateral Agent and the Senior Secured
Parties as follows:

         

        Section
5.01 Defense of
Collateral. The Pledgor shall, until the Discharge Date, defend its title
to the Collateral and the interest of the Collateral Agent (for the benefit of
itself and the other Senior Secured Parties) in the Collateral pledged hereunder
against the claims and demands of all other Persons, provided that nothing in
this Section
5.01 shall limit the Pledgor's right to dispose of the Collateral in
accordance with the Financing Documents.

         

        Section
5.02 Limitation of
Liens. The Pledgor shall not create, incur, assume or suffer to exist any
Liens (including authorizing the filing of any financing statements under the
UCC or any like statement relating to the Collateral) on or with respect to all
or any part of the Collateral (other than Permitted Liens). The Pledgor shall at
its own cost and expense promptly take such action as may be necessary to
discharge any such Liens (other than Permitted Liens).

         

        Section
5.03 No Sale of
Collateral. Except as permitted by the terms of the Financing Documents,
the Pledgor shall not cause, suffer or permit the sale, assignment, conveyance,
pledge or other transfer of all or any portion of the Pledgor's Equity Interest
in the Company or any other portion of the Collateral.

         

        Section
5.04 No Impairment of
Security. The Pledgor shall not take any action that, or fail to take any
action if such failure would, impair in any manner the enforceability of the
Collateral Agent's security interest in and Lien on any Collateral.

         

        Section
5.05 Filing of
Bankruptcy Proceedings. To the extent it may do so under applicable Law,
the Pledgor, for itself, its successors and assigns, shall not cast any vote as
an owner in the Company or otherwise (a) in favor of the commencement of a
voluntary case or other proceeding seeking liquidation, reorganization,
rehabilitation or other relief with respect to the Company or its debts under
any bankruptcy, insolvency or other similar Law now or hereafter in effect in
any jurisdiction or seeking the appointment of a trustee, receiver, liquidator,
custodian or other similar official of the owners of the Company or any
substantial part of the Company's property, (b) to authorize the Company to
consent to any such aforesaid relief or to the appointment of or taking
possession by any such aforesaid official in an involuntary case or other
proceeding commenced against the Company or (c) to authorize the Company to make
a general assignment for the benefit of creditors.

         

        
          
            
            

          

          
            6.04(g)-B
- 12

            
              

            

          

          
            
            

          

        

         

        Section
5.06 Distributions. If the
Pledgor in its capacity as an owner of the Company receives any income, dividend
or other distribution of money or property of any kind from the
Company (other than in accordance with the Financing Documents), the Pledgor
shall hold such income or distribution as trustee for and shall promptly deliver
the same to the Collateral Agent in the exact form received by the Pledgor (or
duly endorsed by the Pledgor to the Collateral Agent, if required). To the
extent that any such income, dividend or other distribution is made in
compliance with the terms of the Financing Documents, then the further
distribution or payment of such monies shall not give rise to any claims or
cause of action on the part of any of the Senior Secured Parties against the
Company or the Pledgor seeking the return or disgorgement of any such
distributions or other payments unless the distributions or payments involve or
result from the fraud or willful misconduct of the Company or the
Pledgor.

         

        Section
5.07 Maintenance of
Records. The Pledgor shall, at all times, keep accurate and complete
records of the Collateral. The Pledgor shall permit officers and designated
representatives of the Collateral Agent to examine the Pledgor's books and
records pertaining to the Collateral, and make copies thereof or abstracts
therefrom, all at the expense of the Pledgor and at such reasonable times during
normal business hours and as often as may be reasonably desired, upon reasonable
advance notice to the Pledgor; provided, that if a
Default or an Event of Default has occurred and is continuing, the Collateral
Agent (or any of its officers or designated representatives) may do any of the
foregoing at any time during normal business hours and without advance notice.
Upon the occurrence and during the continuation of any Event of Default, at the
Collateral Agent's request, the Pledgor shall promptly deliver to the Collateral
Agent copies of any and all of the records mentioned above.

         

        Section
5.08 Name;
Jurisdiction of Organization. The Pledgor shall not change its name, its
jurisdiction of organization, the location of its principal place of business or
its organization identification number without written notice to the Collateral
Agent at least thirty (30) days prior to such change. In the event of such
change, the Pledgor shall (at its expense) execute and deliver such instruments
and documents as may be required by the Collateral Agent or applicable Law to
maintain a first priority perfected security interest in the
Collateral.

         

        Section
5.09 Amendments to
Organizational Documents. Except as expressly permitted by this Agreement
or the other Financing Documents, the Pledgor shall not (a)
terminate or cancel the Organic Documents of the Company or (b) in any material
respect, amend, supplement or otherwise modify the Organic Documents of the
Company.

         

        Section
5.10 Perfection.

         

        (a)The
Pledgor agrees that from time to time, at the expense of the Pledgor, the
Pledgor
shall promptly execute and deliver all further instruments and documents, and
take all further action, that may be reasonably necessary or desirable in order
to perfect, to ensure the continued perfection of, and to protect the assignment
and security interest granted or intended to be granted hereby or to enable the
Collateral Agent to exercise and enforce its rights and remedies hereunder with
respect to any Collateral. Without limiting the generality of the foregoing, the
Pledgor shall (i) deliver any of the Collateral represented by a certificate or
other instrument to the Collateral Agent, accompanied by such duly executed
instruments of transfer or assignment as the Collateral Agent may reasonably
request, and (ii) authorize, execute and file such financing or continuation
statements, or amendments thereto, and such other instruments, endorsements
or notices, as may be reasonably necessary or desirable in order to perfect and
preserve the assignments and security interests granted or purported to be
granted hereby.

         

        
          
            
            

          

          
            6.04(g)-B
- 13

            
              

            

          

          
            
            

          

        

         

        (b)The
Pledgor hereby authorizes the filing of any financing statements or continuation
statements, and amendments to financing statements, or any similar document in
any jurisdictions and with any filing offices as the Collateral Agent may
reasonably determine are necessary or advisable to perfect the security interest
granted to the Collateral Agent, for the benefit of the Senior Secured Parties,
herein. Such financing statements may describe the Collateral in the same or
similar and consistent manner as described herein.

         

        Section
5.11 Information
Concerning Collateral. The Pledgor shall, promptly upon request and at
its own expense, provide to the Collateral Agent all information and evidence
the Collateral Agent may reasonably request concerning the Collateral to enable
the Collateral Agent to enforce the provisions of this Agreement.

         

        Section
5.12 Payment of
Taxes. The Pledgor shall pay or cause to be paid, before any fine,
penalty, interest or cost attaches thereto, all Taxes and other non-governmental
charges or levies (other than those Taxes or levies that are subject to a
Contest and 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)) now or hereafter assessed or levied against the Collateral pledged by it
hereunder and shall retain copies of and, upon request, permit the Collateral
Agent or any Senior Secured Party to examine receipts showing payment of any of
the foregoing.

         

        ARTICLE
VI

         

        REMEDIES
UPON AN EVENT OF DEFAULT

         

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

         

        (a) vote or
exercise any and all of the Pledgor's rights or powers incident to its ownership
of the Pledged Equity Interests, including any rights or powers to manage or
control the Company and receive dividends or distributions;

         

        (b) demand,
sue for, collect or receive any money or property at any time payable to or
receivable by the Pledgor on account of or in exchange for all or any part of
the Collateral;

         

        (c) cause any
action at Law or suit in equity or other proceeding to be instituted and
prosecuted to collect or enforce any obligation or exercise any right hereunder
or included in the Collateral, including specific enforcement of any covenant or
agreement contained herein, or to foreclose or enforce the security interest in
all or any part of the Collateral granted herein, or to enforce any other legal
or equitable right vested in it by this Agreement or by applicable
Law;

         

        (d) amend,
terminate, supplement or modify all or any of the Company's Organic
Documents;

         

        
          
            
            

          

          
            6.04(g)-B
- 14

            
              

            

          

          
            
            

          

        

         

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

         

        (f)
perform any obligation of the Pledgor hereunder;

         

        (g) 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 the
principal sum of the Obligations, 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 this Agreement 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;

         

        (h) transfer
the Collateral, or any part thereof, to the name of the Collateral Agent or to
the name of any nominee of the Collateral Agent;

         

        (i) 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;

         

        (j) take any
other lawful action that the Collateral Agent deems necessary or desirable to
protect or realize upon its security interest in the Collateral or any part
thereof; and/or

         

        (k) 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.

         

        Section
6.02 Minimum
Notice Period. If, pursuant to applicable Law requirements, prior notice
of any action described in Section
6.01 (Remedies
Upon an Event of Default)), including the sale of the Collateral pursuant
to Section
6.03 (Sale of
Collateral), is required to be given to the Pledgor or the Company, the
Pledgor and the Company hereby acknowledge and agree that the minimum time
required by such applicable Law, or if no minimum time is specified, ten (10)
days, shall be deemed a reasonable notice period under such applicable
Law.

         

        
          
            
            

          

          
            6.04(g)-B
- 15

            
              

            

          

          
            
            

          

        

         

        Section
6.03 Sale of
Collateral. In addition to exercising the foregoing rights, the
Collateral Agent may, to the extent permitted by applicable Law, arrange for and
conduct a 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 Pledgor any item of the 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 Credit Agreement or the
other Financing Documents or any other agreement related hereto or thereto. The
Pledgor, 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. The Pledgor also waives its right to challenge the
reasonableness of any disclaimer of warranties, title and the like made by the
Collateral Agent in connection with a sale of the Collateral. Each successor of
the Pledgor under the Financing Documents shall be deemed to have agreed, by
virtue of its succession thereto, that it shall be bound by the above waiver, to
the same extent as if such successor gave such waiver itself The Pledgor also
hereby waives, to the full extent it may lawfully do so, the benefit of all Laws
providing for rights of appraisal, valuation, stay or extension or of redemption
after foreclosure now or hereafter in force. If the Collateral Agent sells any
of the Collateral upon credit, the Pledgor 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 Pledgor shall be credited with the proceeds of any
such sales or resales only 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 the 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. The Pledgor 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.

         

        Section
6.04 Actions Taken by
Collateral Agent. Any action or proceeding to enforce this Agreement may
be taken by the Collateral Agent either in the Pledgor's name or in the
Collateral Agent's name, as the Collateral Agent may deem
necessary.

         

        Section
6.05 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 the Collateral Agent pursuant to this Article VI conducted
in a commercially reasonable manner and in accordance with the requirements of
applicable Laws. The Pledgor hereby waives any claims against the Collateral
Agent and the 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.

         

        
          
            
            

          

          
            6.04(g)-B
- 16

            
              

            

          

          
            
            

          

        

         

        Section
6.06 Compliance With
Limitations and Restrictions. The Pledgor 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 the Collateral Agent may be advised
by counsel is necessary in order to avoid any violation of applicable Law, or in
order to obtain any required approval of the sale or of the purchaser
by any Governmental Authority or official, and the Pledgor 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 the Pledgor for any discount allowed by reason
of the fact that such Collateral is sold in compliance with any such limitation
or restriction.

         

        Section
6.07 No Impairment of
Remedies. If, in the exercise of any of its rights and remedies under
this Agreement, the Collateral Agent forfeits any of its rights or remedies,
including any right to enter a deficiency judgment against the Pledgor or any
other Person, whether because of any applicable Law pertaining to "election of
remedies" or otherwise, the Pledgor 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 that the Pledgor might otherwise have had but for such action
by the Collateral Agent or the terms herein. Any election of remedies that
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 Law, impair the
Pledgor's obligations hereunder.

         

        ARTICLE
VII

         

        FURTHER
ASSURANCES 

         

        Section
7.01
Attorney-in-Fact.

         

        (a) The
Pledgor hereby constitutes and appoints the Collateral Agent, acting for
and on
behalf of itself and the Senior Secured Parties and each successor or permitted
assign of the Collateral Agent and the Senior Secured Parties, the true and
lawful attorney-in-fact of the Pledgor, with full power and authority in the
place and stead of the Pledgor and in the name of the Pledgor, the Collateral
Agent or otherwise, to enforce all rights, interests and remedies of the Pledgor
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
Article VI
(Remedies  Upon an
Event of Default)); provided, however,
that the 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 the Financing Documents. This power of
attorney is a power coupled with an interest and shall be irrevocable; provided, however,
that nothing in this Agreement shall prevent the Pledgor from, prior to the
exercise by the Collateral Agent of any of the aforementioned rights,
undertaking the Pledgor's operations in the ordinary course of business with
respect to the Collateral, in accordance with the Financing
Documents.

         

        (b) In
addition to the provisions of Section 7.01(a), if
the Pledgor fails to perform any agreement or obligation contained herein to
protect or preserve the Collateral, and such failure continues for ten (10) days
following delivery of written notice by the Collateral Agent to the Pledgor, 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 the Pledgor and shall be secured by the
Collateral.

         

        
          
            
            

          

          
            6.04(g)-B
- 17

            
              

            

          

          
            
            

          

        

         

        Section
7.02 Delivery of
Collateral; Proxy. All certificates or instruments representing or
evidencing the Collateral shall be delivered to and held by or on behalf of the
Collateral Agent pursuant hereto. All such certificates or instruments shall be
in suitable form for transfer by delivery, or shall be accompanied by duly
executed instruments of transfer or assignment in blank, all in form and
substance reasonably acceptable to the Collateral Agent. The Collateral Agent
shall have the right, at any time in its discretion and without prior notice to
the
Pledgor or the Company, following the occurrence and during the continuation of
an Event of Default, to transfer to or to register in the name of the Collateral
Agent or any of its nominees any or
all of the Collateral and to exchange certificates or instruments representing
or evidencing the Collateral for certificates or instruments of smaller or
larger denominations. In furtherance of the foregoing, the Pledgor shall further
execute and deliver to the Collateral Agent a proxy in the form of Exhibit
A and an irrevocable power in the form of Exhibit
B with respect to the ownership interests of the Company owned by the
Pledgor.

         

        Section
7.03 Place of
Business; Location of Records. Unless the Pledgor provides notice to the
Collateral Agent in accordance with Section
5.08 (Name;
Jurisdiction of Organization),
the chief executive office and principal place of business of the Pledgor is,
and all records of the Pledgor concerning the Collateral are and will be,
located at the address set forth in Section
8.09 (Notices).

         

        Section
7.04 Waiver of
Transfer Restrictions. Notwithstanding anything to the contrary contained
in the Company's Organic Documents, the Pledgor hereby waives any requirement
contained in the Company's Organic Documents that it consent to a transfer of
any Equity Interest in the Company in connection with a foreclosure on such
Equity Interest under the Financing Documents.

         

        Section
7.05 The
Company's Consent and Covenant. The Company hereby consents to the
assignment of and grant of a security interest in the Collateral to the
Collateral Agent (for the benefit of the Senior Secured Parties) and to the
exercise by the Collateral Agent of all rights and powers assigned or delegated
to the Collateral Agent by the Pledgor hereunder, including the rights upon and
during the continuation of an Event of Default to exercise the Pledgor's voting
rights and other rights to manage or control the Company, all in accordance with
the Financing Documents.

         

        Section
7.06 Foreclosure.
The Pledgor agrees that upon the occurrence and during the continuation of an
Event of Default, the Collateral Agent may elect to non judicially or judicially
foreclose against any real or personal property security it holds for the
Obligations or any part thereof, or to exercise any other remedy against the
Company or any other Person, any security or any guarantor, even if the effect
of that action is to deprive the Pledgor of the right to collect reimbursement
from the Company or any other Person for any sums paid by the Pledgor to the
Collateral Agent or any Senior Secured Party.

         

        
          
            
            

          

          
            6.04(g)-B
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        Section
7.07 Waiver of
Rights of Subrogation. Until the Discharge Date, (a) the Pledgor shall
not exercise any right of subrogation and shall not enforce any remedy that the
Senior Secured Parties now have or may hereafter have against the Company, and
waives the benefit of, and all rights to participate in, any security now or
hereafter held by the Collateral Agent or any Senior Secured Party from the
Company and (b) the Pledgor agrees not to exercise any
claim, right or remedy that the Pledgor may now have or hereafter acquire
against the Company that arises hereunder and/or from the performance by the
Pledgor hereunder, including any claim, remedy or right of subrogation,
reimbursement, exoneration, contribution, indemnification, or participation in
any claim, right or remedy of the Senior Secured Parties against the Company, or
any security that the Senior Secured Parties now have or hereafter acquire,
whether or not such claim, right or remedy arises in equity, under contract, by
statute, under common Law or otherwise. Any amount paid to the Pledgor on
account of any such subrogation rights prior to the Discharge Date shall be held
in trust for the benefit of the Collateral Agent and shall immediately
thereafter be paid to the Collateral Agent, for the benefit of the Senior
Secured Parties.

         

        Section
7.08 Application of
Proceeds. Upon the occurrence and during the continuation of an Event of
Default, the proceeds of any sale of or other realization upon all or any part
of the Collateral shall be applied in accordance with Section 9.04 (Application
of Proceeds) of the Credit Agreement.

         

        Section
7.09 Collateral Agent
May Perform. Upon the occurrence and during the continuance of an Event
of Default, if the Pledgor fails to perform any agreement contained herein, the
Collateral Agent may itself perform, or cause performance of, such agreement,
and the reasonable expenses of the Collateral Agent incurred in connection
therewith shall be part of the Obligations.

         

        Section
7.10 Limitation on
Duty of Collateral Agent with Respect to the Collateral. The powers
conferred on the Collateral Agent hereunder are solely to protect its interest
and the interests of the Senior Secured Parties in the Collateral and shall not
impose any duty on the Collateral Agent or any of its designated agents to
exercise any such powers. Except for (a) the safe custody of any Collateral in
its possession, (b) the accounting for monies actually received by it hereunder,
(c) the exercise of reasonable care in the custody and preservation of the
Collateral in its possession, and (d) any duty expressly imposed on the
Collateral Agent by applicable Law with respect to any Collateral that has not
been waived hereunder, the Collateral Agent shall have no duty with respect to
any Collateral and no implied duties or obligations shall be read into this
Agreement against the Collateral Agent. The Collateral Agent shall be deemed to
have exercised reasonable care in the custody and preservation of the Collateral
in its possession if the Collateral is accorded treatment that is substantially
equivalent to that which the Collateral Agent accords its own property, it being
expressly agreed, to the maximum extent permitted by applicable Law, that the
Collateral Agent shall have no responsibility for (i) taking any necessary steps
to preserve rights against any parties with respect to any Collateral, or
(ii)
taking any action to protect against any diminution in value of the Collateral,
but in each case, the Collateral Agent may do so and all expenses reasonably
incurred in connection therewith shall be part of the Obligations.

         

        Section
7.11 Termination of
Security Interest. Upon the Discharge Date, this Agreement and the
security interest and all other rights granted hereby shall terminate and all
rights to the Collateral shall revert to the Pledgor. Upon any such termination,
the Collateral Agent will, at the Pledgor's sole expense and upon its written
direction, promptly return all certificates and other instruments previously
delivered to the Collateral Agent representing the Pledged Equity Interests or
any other Collateral and, execute and, subject to Section
8.11 (Reinstatement),
deliver to the Pledgor such documents (including UCC-3 termination statements)
as the Company or the Pledgor shall reasonably request to evidence such
termination, to release all security interest on the Collateral and to return
such Collateral to the Pledgor.

         

        
          
            
            

          

          
            6.04(g)-B
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        ARTICLE
VIII

         

        MISCELLANEOUS

         

        Section
8.01 Amendments,
Etc. This Agreement may not be amended, modified or supplemented, except
in a writing signed by each of the parties hereto and otherwise in accordance
with the provisions of Section
11.01 (Amendments,
Etc.) of the Credit Agreement.

         

        Section 8.02 Applicable Law;
Jurisdiction; Etc.

         

        (a)            GOVERNING
LAW. THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE
WITH, THE LAWS OF THE STATE OF NEW YORK, UNITED STATES OF AMERICA WITHOUT
REFERENCE TO CONFLICTS OF LAWS (OTHER THAN SECTION 5-1401 OF THE NEW YORK
GENERAL OBLIGATIONS LAW).

         

        (b)            SUBMISSION
TO JURISDICTION. EACH OF THE PLEDGOR AND THE COMPANY IRREVOCABLY AND
UNCONDITIONALLY SUBMITS, FOR ITSELF AND ITS PROPERTY, TO THE NON-EXCLUSIVE
JURISDICTION OF THE COURTS OF THE STATE OF NEW YORK SITTING IN NEW YORK COUNTY
AND OF THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK,
AND ANY APPELLATE COURT FROM ANY THEREOF, IN ANY ACTION OR PROCEEDING ARISING
OUT OF OR RELATING TO THIS AGREEMENT OR ANY OTHER FINANCING DOCUMENT, OR FOR
RECOGNITION OR ENFORCEMENT OF ANY JUDGMENT, AND EACH OF THE PARTIES HERETO
IRREVOCABLY AND UNCONDITIONALLY AGREES THAT ALL CLAIMS IN RESPECT OF ANY SUCH
ACTION OR PROCEEDING MAY BE HEARD AND DETERMINED IN SUCH NEW YORK STATE COURT
OR, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, IN SUCH FEDERAL COURT.
EACH OF THE PARTIES HERETO AGREES THAT A FINAL JUDGMENT IN ANY SUCH ACTION OR
PROCEEDING SHALL BE CONCLUSIVE AND MAY BE ENFORCED IN OTHER JURISDICTIONS BY
SUIT ON THE JUDGMENT OR IN ANY OTHER MANNER PROVIDED BY LAW. NOTHING IN THIS
AGREEMENT OR IN ANY OTHER FINANCING DOCUMENT SHALL AFFECT ANY RIGHT THAT THE
COLLATERAL AGENT OR ANY OTHER SENIOR SECURED PARTY MAY OTHERWISE HAVE TO BRING
ANY ACTION OR PROCEEDING RELATING TO THIS AGREEMENT OR ANY OTHER FINANCING
DOCUMENT AGAINST THE PLEDGOR, THE COMPANY OR ANY OTHER LOAN PARTY OR ITS
PROPERTIES IN THE COURTS OF ANY JURISDICTION.

         

        (c)            WAIVER OF
VENUE. EACH OF THE PLEDGOR AND THE COMPANY 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 8.02(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.

         

        
          
            
            

          

          
            6.04(g)-B
- 20

            
              

            

          

          
            
            

          

        

         

        (d)            Appointment
of Process Agent and Service of Process. Each of the Pledgor and the Company hereby irrevocably
appoints CT Corporation System with an office on the date hereof at 111 Eighth Avenue, New York,
New York 10011, as its agent to receive on behalf of itself and its property services of
copies of the summons and complaint and any other process that may be served in any such action
or proceeding in the State of New York. If for any reason the Process Agent shall cease to act as
such for either of the Pledgor or the Company, the Pledgor or the Company, as the case may
be, hereby agrees to designate a new agent in New York City on the terms and for the
purposes of this Section
8.02 reasonably
satisfactory to the Collateral Agent. Such service may be
made by mailing or delivering a copy of such process to the Pledgor or the Company, as the case
may be, in care of the Process Agent at the Process Agent's above address, and each of the
Pledgor and the Company hereby irrevocably authorizes and directs the Process
Agent to accept such service on its behalf. As an alternative method of service,
each of the Pledgor and the Company also irrevocably consents to the service of
any and all process in any such action or proceeding by the air mailing of
copies of such process to the Pledgor or the Company, as the case may
be, at its then effective notice addresses pursuant to Section
8.09 (Noticed.

         

        (e)            Immunity. To the
extent that either the Pledgor or the Company has or hereafter may acquire any
immunity from jurisdiction of any court or from any legal process (whether
through service or notice, attachment prior to judgment, attachment in aid of
execution, execution or otherwise) with respect to itself or its property, each
of the Pledger and the Company 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
8.02(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 THE
TRANSACTIONS CONTEMPLATED HEREBY (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 PARTY 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
8.02(f).

         

        
          
            
            

          

          
            6.04(g)-B
- 21

            
              

            

          

          
            
            

          

        

         

        Section
8.03 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 Collateral Agent and
when the
Collateral Agent has received counterparts hereof that bear the signatures of
the each of the Pledgor and the Company. Delivery of an executed counterpart of
a signature page of this Agreement by telecopy or portable document format
("pdf') shall be effective as delivery of a manually executed counterpart of
this Agreement.

         

        Section
8.04 Delay Not Waiver;
Separate Causes of Action. No delay or omission to exercise any right,
power or remedy accruing to the Collateral Agent upon the occurrence of any
Event of Default shall impair any such right, power or remedy of the Collateral
Agent, nor shall it be
construed to be a waiver of any such Event of Default, or an acquiescence
therein, or of or in any other breach or default thereafter occurring, nor shall
any waiver of any other breach or default under this Agreement or any other
Financing Document be deemed a waiver of any other breach or default theretofore
or thereafter occurring. Any waiver, permit, consent or approval of any kind or
character on the part of the Collateral Agent of any breach or default under
this Agreement, or any waiver on the part of the Senior Secured Parties or the
Collateral Agent of any provision or condition of this Agreement, must be in
writing and shall be effective only to the extent specifically set forth in such
writing. Each and every default by the Pledgor or the Company in payment
hereunder shall give rise to a separate cause of action hereunder, and separate
suits may be brought hereunder as each cause of action arises.

         

        Section
8.05 Entire
Agreement. This Agreement, together with the other Financing Documents,
is intended by the parties as a final expression of their agreement and is
intended as a complete and exclusive statement of the terms and conditions
thereof.

         

        Section
8.06 Expenses.
Each of the Pledgor and the Company agrees to pay on demand to the Collateral
Agent all costs and expenses incurred by the Collateral Agent (including fees,
expenses and disbursements of counsel) incident to its enforcement, exercise,
protection or preservation of any of its rights, remedies or claims (or the
rights or claims of any Senior Secured Party) under this Agreement.

         

        Section
8.07 Headings
Descriptive. Article and Section headings have been inserted in this
Agreement as a matter of convenience for reference only and it is agreed that
such article and section headings are not a part of this Agreement and shall not
be used in the interpretation of any provision of this Agreement.

         

        Section
8.08 Interest.
Any amount required to be paid by the Pledgor or the Company pursuant to the
terms hereof that is not paid when due shall bear interest at the Default Rate
or the maximum rate permitted by Law, whichever is less, from the date due until
paid in full in cash.

         

        Section
8.09 Notices.

         

        (a) All
notices, requests, demands or other communications provided for herein
(including,
without limitation, any modifications of, or waivers or consents under, this
Agreement)
shall be given or made in writing in the manner set out in Section 11.12 (Notices
and Other Communications) of the Credit Agreement and to the addresses
set forth below:

         

        
          
            
            

          

          
            6.04(g)-B
- 22

            
              

            

          

          
            
            

          

        

         

        If to the
Pledgor: 

         

        [ADDRESS]

         

        
          	
                	
                  Attention: 

                	
                  [________]

                

        

        
          	
                	
                  Telephone: 

                	
                  [________]

                

        

        
          	
                	
                  Facsimile: 

                	
                  [________]

                

        

        
          	
                	
                  E-mail: 

                	
                  [________]

                

        

         

        If to the
Company: 

         

        [ADDRESS]

         

        
          
            	
                  	
                    Attention: 

                  	
                    [________]

                  

          

          
            	
                  	
                    Telephone: 

                  	
                    [________]

                  

          

          
            	
                  	
                    Facsimile: 

                  	
                    [________]

                  

          

          
            	
                  	
                    E-mail: 

                  	
                    [________]

                  

          

        

         

        If to the
Collateral Agent: 

         

        [ADDRESS]

         

        
          
            	
                  	
                    Attention: 

                  	
                    [________]

                  

          

          
            	
                  	
                    Telephone: 

                  	
                    [________]

                  

          

          
            	
                  	
                    Facsimile: 

                  	
                    [________]

                  

          

          
            	
                  	
                    E-mail: 

                  	
                    [________]

                  

          

           

        

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

         

        Section
8.10 No
Waiver., Cumulative
Remedies. No failure by the Collateral Agent to exercise, and no delay by
the Collateral Agent in exercising, any right, remedy, power or privilege
hereunder shall operate as a waiver thereof; nor shall any single or partial
exercise of any right, remedy, power or privilege hereunder preclude any other
or further exercise thereof or the exercise of any other right, remedy, power or
privilege.

         

        Section
8.11 Reinstatement. This
Agreement and the obligations of the Pledgor and the Company hereunder shall
automatically be reinstated if and to the extent that for any reason any payment
made pursuant to this Agreement is rescinded or must otherwise be restored or
returned, whether as a result of any proceedings in bankruptcy or reorganization
or otherwise with respect to the Pledgor, the Company or any other Person or as
a result of any settlement or compromise with any Person (including the Pledgor
or the Company) in respect of such payment, and the Pledgor or the Company shall
pay the Collateral Agent on demand all of its reasonable
costs and expenses (including reasonable fees, expenses and disbursements of
counsel) incurred by the Collateral Agent in connection with such rescission or
restoration.

         

        
          
            
            

          

          
            6.04(g)-B
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        Section
8.12 Remedies
Cumulative. No right, power or remedy herein conferred upon or reserved
to the Collateral Agent hereunder is intended to be exclusive of any other
right, power or remedy, and every such right, power and remedy shall, to the
extent permitted by applicable Law, be cumulative and in addition to every other
right, power and remedy given hereunder or under any other Financing Document
now or hereafter existing at Law or in equity or otherwise. The assertion or
employment of any right or remedy hereunder, or otherwise, shall not prevent the
concurrent assertion or employment of any other appropriate right or remedy.
Resort to any or all security now or hereafter held by the Collateral Agent or
any other Senior Secured Party, may be taken concurrently or successively and in
one or several consolidated or independent judicial actions or lawfully taken
nonjudicial proceedings, or both.

         

        Section
8.13 Rights of
Collateral Agent. The Collateral Agent shall be entitled to the rights,
protections, immunities and indemnities set forth in the Credit Agreement as if
specifically set forth herein. With respect to the duties, obligations and
rights of the Collateral Agent, if any conflict between the terms of this
Agreement and the terms of the Credit Agreement arises, the terms of the Credit
Agreement shall govern and control.

         

        Section
8.14 Severability. If any
provision of this Agreement is held to be illegal, invalid or unenforceable, (a)
the legality, validity and enforceability of the remaining provisions of this
Agreement 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
8.15 Successions and
Assignments. This Agreement shall create a continuing pledge and
assignment of and security interest in the Collateral and shall (a) remain in
full force and effect until the Discharge Date and as otherwise provided in
Section 8.16 (Survival
of Provisions); (b) be binding upon the Company, the Pledgor, and their
respective successors and assigns; and (c) inure, together with the rights and
remedies of the Collateral Agent, to the benefit of the Collateral Agent, the
Senior Secured Parties and their respective successors and permitted assigns.
The release of the security interest in any of the Collateral, the taking or
acceptance of additional security, or the resort by the Collateral Agent to any
security it may have in any order it may deem appropriate, shall not affect the
liability of any Person on the indebtedness secured hereby, except for release
of the Collateral upon the Discharge Date. The Pledgor is not entitled to assign
its obligations hereunder to any other Person without the written consent of the
Collateral Agent, and any purported assignment in violation of this provision
shall be void.

         

        Section
8.16 Survival of
Provisions. All agreements, representations and warranties made herein
shall survive the execution and delivery of this Agreement and the Financing
Documents and the making of the Loans and extensions of credit under the Credit
Agreement. Notwithstanding anything in this Agreement or implied by Law to the
contrary, the agreements of each of the Pledgor and the Company set forth herein
shall terminate at the same time as the security
interest and other rights granted hereunder shall terminate pursuant to Section 7.11 (Termination
of Security Interest).

         

        
          
            
            

          

          
            6.04(g)-B
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        Section
8.17 Third Party
Rights. Nothing in this Agreement, expressed or implied, is intended or
shall be construed to confer upon, or give to any Person, other than the
Pledgor, the Collateral Agent and the Senior Secured Parties, any security,
rights, remedies or claims, legal or equitable, under or by reason hereof, or
any covenant or condition hereof; and this Agreement and the covenants and
agreements herein contained are and shall be held to be for the sole and
exclusive benefit of the Pledgor, the Collateral Agent and the Senior Secured
Parties.

         

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

         

        Section
8.19 Waiver of
Consequential Damages, Etc. To the fullest extent permitted by applicable
Law, neither the Pledgor or the Company shall assert, and each of the Pledgor
and the Company hereby waives, any claim against any Indemnitee, 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
8.20 Waiver of
Litigation Payments. To the extent that the Pledgor or the Company may,
in any action, suit or proceeding brought in any of the courts referred to in
Section 8.02
(Applicable
Law; Jurisdiction: Etc.) 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 the Collateral Agent
or any Senior Secured Party in such action, suit or proceeding to post security
for the costs of such Pledgor or Company or to post a bond or to take similar
action, each of the Pledgor and the Company 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
8.21 [Scope of
Liability]. ['Except as provided herein and in any other Transaction
Document to which any Non-Recourse Party is a party, there shall be no recourse
against the Pledgor or any of its Affiliates (except the Borrowers), or the
stockholders or other owners, officers, directors or employees of any of them
(each, a "Non-Recourse
Party"), for any liability to the Lenders arising in connection with any
breach or default under this Agreement, and the Lenders shall look solely to the
Borrowers (but not to any Non-Recourse Party or to any distribution received by
any Non-Recourse Party in compliance with the terms of the Financing Documents),
the Collateral and the rents, issues, profits, proceeds and products of the
Collateral, in enforcing rights and obligations under and in connection with the
Financing Documents; provided that (a) the
foregoing provisions of this Section 8.21 shall
not constitute a waiver,

         

        __________________

        1 The provisions
of this Section 8.21
(Scope
of Liability) only apply to Pacific Ethanol California, Inc.

         

        
          
            
            

          

          
            6.04(g)-B
- 25

            
              

            

          

          
            
            

          

        

         

        release
or discharge of any of the indebtedness, or of any of the terms, covenants,
conditions, or provisions of this Agreement, the Notes, any Security Document or
any other Financing Document (but without personal liability to the Non-Recourse
Parties except as provided herein and therein), and the same shall continue
until the Discharge Date; (b) the foregoing provisions of this Section 8.21 shall
not limit or restrict the right of any Senior Secured Party to name any Borrower
or any other Person (including any Non-Recourse Party) as a defendant in any
action or suit for a judicial foreclosure or for the exercise of any other
remedy under or with respect to this Agreement, any Security Document or any
other Financing Document, or otherwise, or for injunction or specific
performance, so long as (subject to the last sentence of this Section 8.21) no
judgment in the nature of a deficiency judgment shall be enforced against any
Non-Recourse Party out of any property, assets or funds other than the
Collateral and the rents, issues, profits, proceeds or products of the
Collateral, and any other property or assets of any Borrower; (c) the foregoing
provisions of this Section 8.21
(including this proviso) shall not affect or diminish or constitute a waiver,
release or discharge of any specific written obligation, covenant, or agreement
made by any of the Non-Recourse Parties or any security granted by any of the
Non-Recourse Parties in support of the obligations of such Persons under any
guarantee or similar undertaking or as security for the obligations of any
Borrower; and (d) the foregoing provisions of this Section 8.21 shall
not constitute a waiver of any of the terms, covenants, conditions, or
provisions of any Project Document (but without personal liability to the
Non-Recourse Parties except as provided herein and therein), and shall not limit
or restrict the right of any Senior Secured Party under any Project Document, to
the extent provided therein or in any other Transaction Document, to name any
Borrower or any other Person (including any Non-Recourse Party) party to such
Project Document as a defendant in any action or suit for the exercise of
remedies under or with respect to any such Project Document, or for injunction
or specific performance thereunder. Notwithstanding the foregoing, it is
expressly understood and agreed that nothing contained in this Section 8.21 shall be
deemed to (i) limit or restrict any right or remedy of the Senior Secured
Parties (or any assignee or beneficiary thereof or successor thereto) with
respect to (and the Pledgor and all of the Non-Recourse Parties and other
Persons described above shall remain fully liable to the extent that such Person
would otherwise be liable for its own actions with respect to) any breach,
default, fraud or willful misconduct by the Pledgor, any Non-Recourse Party or
any Borrower; or (ii) limit in any respect the enforceability against the
Pledgor, any Non-Recourse Party or any Borrower of any Transaction Document to
which such Person is a party in accordance with its terms (including, with
respect to the Pledgor, this Agreement) (provided, that the liability of any
Non-Recourse Party under any Project Document to which it is a party shall be
subject to any limitations on liability expressly set forth in such Project
Document)]

         

        [The
remainder of this page is intentionally blank. The next page is the signature
page.]

         

         

        
          
            
            

          

          
            6.04(g)-B
- 26

            
              

            

          

          
            
            

          

           

        

        IN
WITNESS WHEREOF, the parties hereto, by their officers duly authorized,
intending to be legally bound, have caused this Pledge and Security Agreement to
be duly executed and delivered as of the date first above written.

         

        
          	 	[_________________________________],
	 	as
      Pledgor 
	 	 
	 	 
	 	
                  By:_______________________________

                
	 	Name: 
	 	Title: 
	 	 
	 	 
	 	[_________________________________], 
	 	as
      Company 
	 	 
	 	 
	 	
                  By:_______________________________

                
	 	Name:  
	 	Title:  
	 	 
	 	 
	 	[_________________________________], 
	 	as Collateral
      Agent 
	 	 
	 	 
	 	By:_______________________________ 
	 	Name:   
	 	Title:   

        

         

        
          
            
            

          

          
            6.04(g)-B
- 27

            
              

            

          

          
            
            

          

        

         

        EXHIBIT
A

        IRREVOCABLE
PROXY

         

        The
undersigned hereby appoints [________], not in its individual capacity but
solely as
"Collateral Agent" under the Credit Agreement (the "Collateral Agent"), as Proxy
with full power of substitution, and hereby authorizes the Collateral Agent to
represent and vote all of the membership interests of [________], a limited
liability company organized and existing under the Laws of
the State of Delaware, owned by the undersigned on the date of exercise hereof
during the continuance of an Event of Default under, and as defined in, the
Pledge and Security Agreement,
dated as of [________], 2007 among [________], [________], and the Collateral
Agent at any
meeting or at any other time chosen by the Collateral Agent in its sole
discretion.

         

        
          	Date: 
      _________________________________________            
      [________]	 
	 	 
	 	By: 
      _________________________________
	 	Name: 
	 	Title: 

        

         

         

         

         

         

         

         

        
          
            
            

          

          
            6.04(g)-B
- 28

            
              

            

          

          
            
            

          

           

          EXHIBIT
B

          TRANSFER
DOCUMENT

           

          FOR VALUE
RECEIVED, [________] I hereby sells, assigns and transfers unto
__________________ all of
its ownership interests in [________], a limited liability company
organized and existing under the Laws of the State of Delaware, standing in its
name on the
books of [________], represented by the following
certificate(s): ___________, and irrevocably
appoints _____________ as attorney to transfer the ownership interests
with full
power of substitution in the premises.

        

         

        
          
            	Date: 
      _________________________________________            
      [________]	 
	 	 
	 	By: 
      _________________________________
	 	Name: 
	 	Title: 
	 	 
	 	 
	
                    In the
      presence of:

                     

                    ____________________ 

                  	 

          

           

        

         

         

         

         

        
          
            
            

          

          
            6.04(g)-B
- 29

            
              

            

          

          
            
            

          

        

        
EXHIBIT
C

        SCHEDULE
OF SECURITY FILINGS

         

        
          	
                  1. 
      

                	
                  UCC-1
      financing statement naming the Pledgor as debtor and the Collateral Agent
      as the secured party, against the Pledged Equity Interests of the Pledgor
      in the Company, to be filed with the [Delaware] Secretary of
      State.

                

        

         

        
           

           

           

           

           

           

           

          
            
              
              

            

            
              6.04(g)-B
- 30

              
                

              

            

            
              
              

            

             

            SCHEDULE
I

            DESCRIPTION
OF PLEDGED EQUITY INTERESTS

          

        

         

         

        
          	
                  Description: 

                   

                
	
                  100% of the
      membership interests of [_____________________], represented by
      Certificate No. [________]

                   

                

        

         

         

        
          

        

         

        
           

           

           

           

           

          
            
              
              

            

            
              6.04(g)-B
- 31

              
                

              

            

             

          

        

         

        
          EXHIBIT
6.04(g)-C

          to
Credit Agreement

           

          [FORM
OF SECURITY AGREEMENT]

           

           

           

           

          
            

          

           

           

           

           

          ASSIGNMENT
AND SECURITY AGREEMENT

           

          between

           

          [____________________],

          as
Grantor

           

          and

           

          [____________________],

          as
Collateral Agent

           

           

          Dated
as of [____________], 2007

           

           

            
              

            

          

           

          This draft document is not a
contract or an offer to enter into a contract. Only  the document as executed by
the parties hereto will contain the terms that bind them. Until the document is
executed by each of the parties hereto, none of them intends to be
bound  hereby.

           

          
            
              
              

            

            
              6.04(g)-C
- 1

              
                

              

            

            
              
              

            

             

            TABLE
OF CONTENTS

          

          
          

           

          
            
              	 	 	 	Page
	 	 	 	 
	ARTICLE I  DEFINITIONS	2
	 	 	 	 
	 	Section
    1.01	Defined
    Terms	2
	 	Section
    1.02	Credit Agreement and
      UCC Definitions	2
	 	Section
    1.03	Rules of
      Interpretation	2
	 	 	 	 
	ARTICLE II  PLEDGE AND GRANT OF
      SECURITY INTEREST	2
	 	 	 	 
	 	Section
    2.01	Granting
      Clause	2
	 	Section
    2.02	Delivery of and
      Performance under Assigned Agreements	5
	 	Section
    2.03	Continuing Liability
      under Assigned Agreements and Governmental
      Approvals	6
	 	Section
    2.04	Defaults under
      Assigned Agreements; Cure Rights	6
	 	Section
    2.05	Destruction of
      Collateral	6
	 	Section
    2.06	Intellectual
      Property	6
	 	Section
    2.07	Obligations
      Unconditional	7
	 	Section
    2.08	Waiver	8
	 	 	 	 
	ARTICLE III  EVENTS OF
      DEFAULT	9
	 	 	 	 
	 	Section
    3.01	Events of
      Default	9
	 	 	 	 
	ARTICLE IV  REPRESENTATIONS AND
      WARRANTIES	9
	 	 	 	 
	 	Section
    4.01	Representations and
      Warranties	9
	 	 	 	 
	ARTICLE V  COVENANTS OF
      GRANTOR	10
	 	 	 	 
	 	Section
    5.01	Defense of
      Collateral	10
	 	Section
    5.02	Limitation of
      Liens	10
	 	Section
    5.03	No Sale of
      Collateral	10
	 	Section
    5.04	No Impairment of
      Security	10
	 	Section
    5.05	Maintenance of
      Records	10
	 	Section
    5.06	Name; Jurisdiction
      of Organization	10
	 	Section
    5.07	Perfection	11
	 	Section
    5.08	Notices;
      Information	11
	 	Section
    5.09	Security
      Entitlements	11
	 	 	 	 
	ARTICLE VI  REMEDIES UPON AN
      EVENT OF DEFAULT	11
	 	 	 	 
	 	Section
    6.01	Remedies Upon an
      Event of Default	11
	 	Section
    6.02	Minimum Notice
      Period	14
	 	Section
    6.03	Sale of
      Collateral	14
	 	Section
    6.04	Actions Taken by
      Collateral Agent	14
	 	Section
    6.05	Private
    Sales	15
	 	Section
    6.06	Access to
    Land	15
	 	Section
    6.07	Compliance With
      Limitations and Restrictions	15
	 	Section
    6.08	No Impairment of
      Remedies	15

            

             

            
              
                
                

              

              
                6.04(g)-C
- 2

                
                  

                

              

              
                
                

              

            

             

            
              	ARTICLE VII  FURTHER
      ASSURANCES	16
	 	 	 	 
	 	Section
    7.01	Attorney-in-Fact	16
	 	Section
    7.02	Filing of Financing
      and Continuation Statements	16
	 	Section
    7.03	Termination of
      Security Interest	16
	 	Section
    7.04	Limitation on Duty
      of Collateral Agent with Respect to the Collateral	17
	 	Section
    7.05	Rights of Collateral
      Agent	17
	 	Section
    7.06	Application of
      Proceeds	17
	 	Section
    7.07	Collateral Agent May
      Perform	17
	 	 	 	 
	ARTICLE VIII  MISCELLANEOUS	17
	 	 	 	 
	 	Section
    8.01	Amendments;
      Etc	17
	 	Section
    8.02	Applicable Law;
      Jurisdiction; Etc	17
	 	Section
    8.03	Counterparts;
      Effectiveness	17
	 	Section
    8.04	Delay Not Waiver;
      Separate Causes of Action	19
	 	Section
    8.05	Entire
      Agreement	19
	 	Section
    8.06	Expenses	20
	 	Section
    8.07	Headings
      Descriptive	20
	 	Section
    8.08	Interest	20
	 	Section
    8.09	Notices	20
	 	Section
    8.10	No Waiver;
      Cumulative Remedies	20
	 	Section
    8.11	Reinstatement	21
	 	Section
    8.12	Remedies
      Cumulative	21
	 	Section
    8.13	Rights of Collateral
      Agent	21
	 	Section
    8.14	Severability	21
	 	Section
    8.15	Successions and
      Assignments	22
	 	Section
    8.16	Survival of
      Provisions	22
	 	Section
    8.17	Third Party
      Rights	22
	 	Section
    8.18	Time	22
	 	Section
    8.19	Waiver of
      Consequential Damages, Etc	22
	 	Section
    8.20	Waiver of Litigation
      Payments	22

            

          

           

          
            
              
              

            

            
              6.04(g)-C
- 3

              
                

              

            

            
              
              

            

          

           

          SCHEDULES

           

          Schedule
2.01 - Assigned Agreements

           

          
            
              
              

            

            
              6.04(g)-C
- 4

              
                

              

            

            
              
              

            

          

           

          ASSIGNMENT AND SECURITY
AGREEMENT

           

           

          THIS
ASSIGNMENT AND SECURITY AGREEMENT, dated as of [_____________], 2007 (as
amended, amended and restated, supplemented or otherwise modified from time to
time, this "Agreement"), is entered into by
and among, [_____________], a limited liability company
organized and existing under the Laws of the State of Delaware, (the "Grantor"), and [_______],
a [_______]
banking corporation, in its capacity as collateral agent (together with its
successors,
designees and assigns in such capacity, the "Collateral Agent") for the
Senior Secured Parties.

           

          RECITALS

           

          WHEREAS,
the Grantor has entered into that certain Credit Agreement, dated as of
[_____________], 2007
(as amended, amended and restated, restated, supplemented or otherwise
modified
from time to time, the "Credit Agreement") among the
Grantor, [_____________], a
Delaware limited liability company ("[_____________]"), [_____________], a
Delaware limited
liability company ("[_____________]"), [_____________], a Delaware limited
liability
company ("[_____________]"), [_____________], a Delaware limited liability
company ("[_____________]"), [_____________],
a Delaware limited liability company ("[_____________]"
and, together with [_____________], the Grantor, [_____________],
[_____________] and
[_____________], the "Borrowers"), Pacific Holding as
the Borrowers' Agent, each of the Lenders
from time to time party thereto, the Administrative Agent, as collateral agent
for the Lenders,
[_____________], as accounts bank, WESTLB AG, NEW YORK BRANCH, as lead
arranger
and sole lead bookrunner, MIZUHO CORPORATE BANK, LTD., as lead arranger and
co-syndication agent, CIT CAPITAL SECURITIES LLC, as lead arranger and
co-syndication agent, COOPERATIEVE CENTRALE RAIFFEISEN-BOERENLEENBANK BA.,
"RABOBANK NEDERLAND", NEW YORK BRANCH, as lead arranger and co-documentation
agent, and BANCO SANTANDER CENTRAL HISPANO S.A, NEW YORK BRANCH, as lead
arranger and
co-documentation agent, pursuant to which, among other things, the Lenders have
[made] [agreed to make] loans to, and for the benefit of, the
Borrowers;

           

          WHEREAS,
certain Lenders or their affiliates may, from time to time, enter into interest
rate hedging agreements with the Grantor as permitted under the Credit
Agreement; and

           

          WHEREAS,
the Grantor will obtain benefits as a result of the Loans, and it is a
requirement under the Credit Agreement that the Grantor execute and deliver this
Agreement.

           

          AGREEMENT

           

          NOW,
THEREFORE, in consideration of the promises contained herein, and to induce the
Lenders to enter into the Credit Agreement and to make the advances of credit to
the Grantor and the other Borrowers contemplated thereby, and to induce the
Interest Rate Protection Providers to enter into the Interest Rate Protection
Agreements and to provide the interest rate hedges contemplated thereby, and for
other good and valuable consideration, the receipt and adequacy
of which are hereby acknowledged, and intending to be legally bound, the Grantor
hereby agrees with the Collateral Agent, for the benefit of the Senior Secured
Parties, as follows:

           

          
            
              
              

            

            
              6.04(g)-C
- 5

              
                

              

            

            
              
              

            

          

           

          ARTICLE
I

          DEFINITIONS

           

          Section
1.01 Defined
Terms. The following terms (whether or not underscored) when used in this
Agreement, including its preamble and recitals, shall have the following
meanings:

           

          "Agreement" has the meaning
given in the preamble.

           

          "Assigned
Agreement" and "Assigned Agreements" have the
meaning given in Section 2.01(a).

           

          "Collateral" has the meaning
given in Section
2.01.

           

          "Collateral
Agent" has the meaning given in the preamble to this
Agreement.

           

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

           

          "Grantor" has the meaning given
in the preamble
to this Agreement.

           

          "UCC" means the Uniform
Commercial Code as the same may, from time to time, be in effect 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 the
provisions hereof relating to such perfection or priority and for purposes of
definitions related to such provisions.

           

          Section
1.02 Credit Agreement
and UCC Definitions. Unless otherwise defined herein or unless the
context otherwise requires, terms used in this Agreement, including its preamble
and recitals, have the meanings provided in the Credit Agreement or, if not
defined therein, the UCC.

           

          Section
1.03 Rules of
Interpretation. The rules of interpretation set forth in Section 1.02 (Principles
of Interpretation) of the Credit Agreement shall apply to this Agreement,
including its preamble and recitals.

           

          ARTICLE
II

          PLEDGE
AND GRANT OF SECURITY INTEREST

           

          Section
2.01 Granting
Clause. To secure the timely payment in full when due (whether at stated
maturity, by acceleration or otherwise) in cash and performance in full of the
Obligations, the Grantor does hereby collaterally assign, grant and pledge to
the Collateral Agent, for the benefit of the Collateral Agent and each other
Senior Secured Party, a continuing security interest and Lien in all the
Grantor's estate, right, title and interest in, to and under all assets of
the Grantor, whether now owned or hereafter existing or acquired, and howsoever
its interest therein may arise or appear (whether by ownership, security
interest, Lien, claim or otherwise), including all the estate, right, title and
interest of the Grantor in, to and under the following (collectively, the "Collateral"):

           

          
            
              
              

            

            
              6.04(g)-C
- 6

              
                

              

            

            
              
              

            

          

           

          (a)  all
contracts, agreements and documents (individually, an "Assigned
Agreement" and collectively,
the "Assigned Agreements"),
including the Project Documents listed on Schedule 2.01 hereto,
as amended, amended and restated, supplemented or otherwise modified from time
to time, and all of the Grantor's rights thereunder, and all other agreements,
including Additional Project Documents, other Project Documents, easement
agreements, lease and sublease agreements, vendor warranties and guaranties,
running to the Grantor or assigned to the Grantor, relating to the leasing, use,
maintenance, improvement, operation or acquisition of the Projects or any part
or parts thereof, or transport of material, equipment and other parts of the
Projects or any part or parts thereof, and any replacement agreement for any of
such agreements;

           

          (b)  to the
extent permitted by Law and the terms of the Grantor's Governmental Approvals,
all of the Grantor's Governmental Approvals;

           

          (c)  the
insurance policies maintained by the Grantor, including any such policies
insuring
against loss of revenues by reason of interruption of the operation of the
[_____________] Plant or the
Project or any part or parts thereof and all proceeds and other amounts payable
to the Grantor thereunder, and all eminent domain proceeds;

           

          (d)  all
rents, profits, income, royalties and revenues derived in any other manner
by the
Grantor as a result of its leasing or ownership of the [_____________]
Plant, the Project or any part
thereof and the use or operation of the [_____________] Plant, the Project
or any part thereof, including
all Cash Flow;

           

          (e)  all other
personal property and fixtures, wherever located and whenever acquired, whether
or not of a type that may be subject to a security interest under the UCC,
including all machinery, tools, engines, appliances, mechanical and electrical
systems, wells, elevators, lighting, alarm systems, fire control systems,
furnishings, furniture, service equipment, motor vehicles, building or
maintenance equipment, building or maintenance materials, supplies, goods and
property covered by any warehouse receipts or bills of lading or other such
documents, spare parts, maps, plans, specifications, architectural, engineering,
construction or shop drawings, manuals or similar documents, copyrights,
patents, trademarks, trade names and other intellectual property of any kind,
and all good will associated with the foregoing, and any replacements, renewals
or substitutions for any of the foregoing or additional tangible or intangible
personal property hereafter acquired by the Grantor;

           

          (f)  all goods
(including inventory, equipment and any accessions thereto), money, instruments
(including promissory notes), securities and all other investment property,
security entitlements, financial assets, accounts (including
health-care-insurance receivables), contract rights, documents, deposit
accounts, chattel paper (whether tangible or electronic), letter-of-credit
rights (whether or not the letter of credit is evidenced by a writing),
commercial tort claims and supporting obligations;

           

          
            
              
              

            

            
              6.04(g)-C
- 7

              
                

              

            

            
              
              

            

          

           

          (g)  all
general intangibles, including, to the extent assignable, all construction,
service, engineering, consulting, architectural and other similar contracts
concerning the design, construction, operation, occupancy, maintenance and/or
use of the [_____________] Plant or the Project, all
architectural drawings, plans, specifications, soil tests, appraisals, route
surveys, engineering reports and similar materials relating to all or any
portion of the [_____________] Plant or the Project and all
payment and performance bonds or warranties or guarantees relating to
the [_____________] Plant or
the Project, all rights under and in patents, patent licenses, rights in
intellectual property, trademarks, trade names, corporate names, company names,
business names, fictitious business names, trade styles, trade secrets, service
marks, logos, other source and business identifiers, trademark registrations and
applications for registration used exclusively at or relating exclusively to any
part of the Grantor's business, all good will associated with the foregoing, all
renewals, extensions and continuations-in-part of the items referred to above,
any written agreements granting to the Grantor any right to use any trademark or
trademark registration at or in
connection with the Grantor's business, and the right of the Grantor to sue for
past, present and future infringements of the foregoing, and the right in the
name and on behalf of the Grantor to appear in and defend any action or
proceeding brought with respect to any part of the Grantor's real or personal
property and to commence any action or proceeding to protect the interest of the
Grantor in such Collateral;

           

          (h)  all
books, records, writings, design documents, computer programs, printouts and
other computer materials and records, data bases, software, information and
other property relating to, used or useful in connection with, the Grantor's
business;

           

          (i)  each of
the Project Accounts including any sub-accounts within such Project Accounts and
including all Cash Equivalents at any time held in, required to be held in or
credited to any of the Project Accounts, and all interest, dividends and other
income derived from any such Cash Equivalents;

           

          (j)  the
Accounts Property;

           

          (k)  all
statements, certificates, instruments and investment property representing or
evidencing any Project Account and all Cash Equivalents and other property from
time to time received, receivable or otherwise distributed in respect of such
Cash Equivalents and held in or credited to any Project Account;

           

          (1)  all Local Accounts in the
name, or for the benefit of, the Grantor, and all interest
and other income derived from any such Local Accounts;

           

          (m)  all
statements, certificates, instruments and investment property representing or
evidencing any such Local Account; and

           

          (n)  the
proceeds (including proceeds of proceeds) of all of the foregoing collateral,
whether cash or non-cash, including (i) all rights of the Grantor to receive
moneys due and to become due under or pursuant to the Collateral, (ii) all
rights of the Grantor to receive return of any premiums for or proceeds of any
insurance, indemnity, warranty or guaranty with respect to the Collateral or to
receive condemnation proceeds, (iii) all claims of the Grantor for damages
arising out of or for breach of or default under the Assigned Agreements or any
other Collateral,
(iv) all rights of the Grantor to terminate, amend, supplement, modify or waive
performance under the Assigned Agreements, to perform thereunder 

           

          
            
              
              

            

            
              6.04(g)-C
- 8

              
                

              

            

            
              
              

            

          

           

          and to
compel performance and otherwise exercise all remedies thereunder, (v) all
rights of the Grantor under each such contract or agreement to make
determinations, to exercise any election (including the election of remedies) or
option or to give or receive any notice, consent, waiver, or approval, together
with full power and authority with respect to any contract or agreement to
demand, receive, enforce, collect or provide receipt for any of the foregoing
rights or any property the subject of any of the contracts or agreements, to
enforce or execute any checks, or other instruments or orders, to file any
claims and to take any action that may be reasonably necessary or advisable in
connection with any of the foregoing, (vi) all rights of the Grantor to payment
for Products or other goods or other property sold or leased or services
performed by the Grantor, (vii) to the extent not included in the foregoing, all
proceeds receivable or received when any and all of the foregoing Collateral is
sold, collected, exchanged or otherwise disposed of, whether voluntarily or
involuntarily, and (viii) any and all additions and accessions to the
Collateral, and all proceeds thereof, including proceeds of the conversion,
voluntary or involuntary, of any of the foregoing into cash or liquidated
claims, including all awards, all insurance proceeds, including any unearned
premiums or refunds of premiums on any insurance policies covering all or any
part of the Collateral and the right to receive and apply the proceeds of any
insurance, or of any judgments or settlements made in lieu thereof for damage to
or diminution of the Collateral; provided, however,
that "Collateral" shall not include any property that has been sold or disposed
of in accordance with Section 7.02(f) (Negative Covenants
- Asset Dispositions) of the Credit Agreement, any Restricted Payments
that have been made in compliance with Sections 7.02(s) (Negative Covenants
- Restricted Payments) and 8.08(c)(xv) (Revenue Account)
of the Credit Agreement, or any Permitted Tax Distributions or Sponsor
Support Reimbursements made in accordance with the Financing
Documents.

           

          It being
understood, however, that in no event shall the security interest granted under
this Section
2.01 attach to any lease, license, contract, property rights or agreement
to which the Grantor is a party or any other part of the Collateral (or to any
of its rights or interests thereunder) if the grant of such security interest
would constitute or result in a breach or termination pursuant to the terms of,
or a default under, any such lease, license, contract, property rights or
agreement (other than, to the extent that any such term would be rendered
ineffective pursuant to Sections 9-406, 9-407, 9-408 or 9-409 of the UCC); provided, that such
security interest shall automatically attach upon the granting of consent to
such security interest by the counterparty to any such lease, license, contract,
property rights or agreement or the occurrence of any other event that would
permit the granting of such security interest.

           

          Section
2.02 Delivery of and
Performance under Assigned Agreements. The Grantor shall deliver to the
Collateral Agent a copy of an executed counterpart of each Additional Project
Document, and any amendments and supplements to the foregoing or to any other
Project Document, as they are entered into by the Grantor promptly upon the
execution thereof So long as the Collateral Agent has not elected to exercise
remedies under this Agreement in connection with an Event of Default that has
occurred and is continuing, the Grantor may exercise all rights, interests and
benefits under the Assigned Agreements in any manner consistent with the terms
of the Financing Documents.

           

          
            
              
              

            

            
              6.04(g)-C
- 9

              
                

              

            

            
              
              

            

          

           

          Section
2.03 Continuing
Liability under Assigned Agreements and Governmental Approvals. Except as
otherwise expressly permitted under the Financing Documents, the Grantor shall
remain liable under each of the Assigned Agreements to which it is a party and
its Governmental Approvals, and shall perform in all material respects all of
the obligations undertaken by it thereunder, all in accordance with and pursuant
to the terms and provisions thereof, and the Collateral Agent shall have no
obligation or liability under any of such Assigned Agreements or Governmental
Approvals by reason of or arising out of this Agreement or any other document
related thereto (except as expressly provided for in any applicable Consent),
nor shall the Collateral Agent be required or obligated in any manner to perform
or fulfill any obligations of the Grantor thereunder or to make any payment, or
to make any inquiry as to the nature or sufficiency of any payment received by
it, or present or file any claim, or take any action to collect or enforce the
payment of any amounts that may have been assigned to it or to that it may be
entitled at any time or times.

           

          Section
2.04 Defaults under
Assigned Agreements; Cure Rights. Unless prohibited by the terms of any
Assigned Agreement (taking into account any Consent relating to such Assigned
Agreement), if any default by the Grantor under any of the Assigned Agreements
occurs and is continuing, the Collateral Agent may, at its option (but shall not
be obligated to), remedy any such default, in which event it shall give written
notice of its intent to do so to the Grantor and to the parties to each Assigned
Agreement under which the Grantor is in default. Any curing by the Collateral
Agent of any such default shall not be construed as an assumption by the
Collateral Agent or any other Senior Secured Party of any obligations, covenants
or agreements of the Grantor under such Assigned Agreements, and the Collateral
Agent shall not incur any liability to the Grantor or any other Person as a
result of any actions undertaken by the Collateral Agent in curing or attempting
to cure any such default. This Agreement shall not be deemed to release or to
affect in any way the obligations of the Grantor under the Assigned
Agreements.

           

          Section
2.05 Destruction of
Collateral. No injury to, or loss or destruction of, the Collateral or
any part thereof shall relieve the Grantor of any of its obligations hereunder
or any of its obligations under any other Financing Documents.

           

          Section
2.06 Intellectual
Property. For the purpose of enabling the Collateral Agent to exercise
its rights, remedies, powers and privileges under Article VI (Remedies
Upon an Event of
Default) at such time or times as the Collateral Agent is lawfully
entitled to exercise those rights, remedies, powers and privileges, and for no
other purpose, the Grantor hereby grants to the Collateral Agent, to the extent
assignable or licensable, an irrevocable, nonexclusive license (exercisable
without payment of royalty or other compensation to the Grantor) to use, assign,
license or sublicense any of the Grantor's general intangibles collaterally
assigned, granted and pledged to the Collateral Agent, for the benefit of the
Collateral Agent and each other Senior Secured Parties, under Section 2.01(g) (Granting
Clause), together with reasonable access to all media in which any of the
licensed items may be recorded or stored and to all computer programs
used for the compilation or printout of those items.

           

          
            
              
              

            

            
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          Section
2.07 Obligations
Unconditional. The obligations of the Grantor in this Agreement shall be
continuing, irrevocable, primary, absolute and unconditional irrespective of the
value, genuineness, validity, regularity or enforceability of any Financing
Document or any other
agreement or instrument referred to therein, or any substitution, release or
exchange of any guarantee of or security for any of the Obligations and, to the
fullest extent permitted by applicable Law, irrespective of any other
circumstance whatsoever that might otherwise constitute a legal or equitable
discharge or defense of a surety or guarantor, other than the occurrence of the
Discharge Date and other than any defense that the underlying obligation has
been satisfied in accordance with the terms of the Financing Documents, it being
the intent of this Section 2.07 that the
obligations of the Grantor hereunder shall be absolute and unconditional under
any and all circumstances. Without limiting the generality of the foregoing, it
is agreed that the occurrence of any one or more of the following shall not
alter or impair the liability of the Grantor hereunder, which shall remain
absolute and unconditional as described above without regard to and not be
released, discharged or in any way affected (whether in full or in part)
by:

           

          (a)  at any
time or from time to time, without notice to the Grantor, the time for any
performance of or compliance with any of the Obligations is extended, or such
performance or compliance is waived;

           

          (b)  any
Financing Document is amended or modified or there is a departure from, or
waiver of, any of the terms of any Financing Document;

           

          (c)  the
maturity of any of the Obligations is accelerated, or any of the Obligations is
modified, supplemented and/or amended in any respect, or any right under any
Financing Document or any other agreement or instrument referred to therein is
waived or any guarantee of any of the Obligations or any security therefore is
released or exchanged in whole or in part or otherwise dealt with;

           

          (d)  any lien
granted to, or in favor of, the Collateral Agent as security for any of the
Obligations fails to be perfected; or

           

          (e)  any
proceeding, voluntary or involuntary, involving the bankruptcy, insolvency,
receivership, reorganization, liquidation or arrangement of the Grantor or by
any defense which the Grantor may have by reason of the order, decree or
decision of any court or administrative body resulting from any such proceeding.
The Grantor acknowledges and agrees that the Obligations include interest on the
Obligations at the applicable rate therefor under the Financing Documents which
accrues after the commencement of any such proceeding (or, if interest on any
portion of the Obligations ceases to accrue by operation of Law by reason of the
commencement of said proceeding, such Obligations include the interest which
would have accrued on such portion of the Obligations if said proceedings had
not been commenced), since it is the intention of the parties that the amount of
the Obligations secured pursuant to this Agreement should be determined without
regard to any rule of Law or order which may relieve the Grantor of any portion
of the Obligations. The Grantor will permit any trustee in bankruptcy, receiver,
debtor in possession, assignee for the benefit of creditors or similar person to
pay the Collateral Agent, or allow the claim of the Collateral Agent in respect
of, interest which would have accrued after the date on which such proceeding is
commenced. Notwithstanding the above, so long as any Obligation remains
outstanding, the Grantor shall not, without the prior written consent of the
Collateral Agent, commence or join with any other Person in commencing any
bankruptcy, reorganization or insolvency proceedings of or against any of the
Borrowers.

           

          
            
              
              

            

            
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          Section
2.08 Waiver.
The enforceability and effectiveness of this Agreement and the liability of the
Grantor, and the rights, remedies, powers and privileges of the Collateral
Agent, under this Agreement shall not be affected, limited, reduced, discharged
or terminated, and the Grantor hereby expressly waives, to the extent permitted
by applicable Laws, to the fullest extent permitted by Law any defense now or in
the future arising, by reason of:

           

          (a)  the
illegality, invalidity or unenforceability of all or any part of the
Obligations, any Financing Document or any agreement, security document,
guarantee or other instrument relating to all or any part of the
Obligations;

           

          (b)  the
illegality, invalidity or unenforceability of any security or guarantee for all
or any part of the Obligations or the lack of perfection or continuing
perfection or failure of the priority of any lien or encumbrance on any
collateral for all or any part of the Obligations;

           

          (c)  the
cessation, for any cause whatsoever, of the liability of any Person that is a
guarantor of all or any part of the Obligations (other than by the occurrence of
the Discharge Date);

           

          (d)  any
judicial or nonjudicial foreclosure or sale of, or other election of remedies
with respect to, any interest in real property or other Collateral serving as
security for all or any part of the Obligations, even though such foreclosure,
sale or election of remedies may impair the subrogation rights of either the
other Borrowers, or the Grantor or may preclude the other Borrowers or the
Grantor from obtaining reimbursement, contribution, indemnification or other
recovery from the other Borrowers or any other Person and even though the other
Borrowers or the Grantor may not, as a result of such foreclosure, sale or
election of remedies, be liable for any deficiency;

           

          (e)  any act
or omission of the Collateral Agent or any other Person that directly or
indirectly results in or aids the discharge or release of the Grantor or any
part of the Obligations or any security or guarantee (including any letter of
credit) for all or any part of the Obligations by operation of Law or otherwise
(other than the occurrence of the Discharge Date);

           

          (f)  any Law which provides
that the obligation of a surety or the Grantor must neither
be larger in amount nor in other respects more burdensome than that of the
principal or which reduces a surety's or the Grantor's obligation in proportion
to the principal obligation;

           

          (g)  any bankruptcy,
insolvency, reorganization, arrangement, readjustment of debt,
liquidation or dissolution proceeding commenced by or against any Person,
including any discharge of, or bar or stay against collecting, all or any part
of the Obligations (or any interest on all or any part of the Obligations) in or
as a result of any such proceeding, any failure of the Collateral Agent to file
a claim in any such proceeding, or the occurrence of any of the following:
(i) the election by the Collateral Agent, in any bankruptcy proceeding of any
Person, of the application or non-application of Section 1111(b)(2) of the
Bankruptcy Code, (ii) any extension of credit or the grant of any lien or
encumbrance under Section 364 of the Bankruptcy Code, (iii) any use of cash
collateral under Section 363 of the Bankruptcy Code, or (iv) any agreement or
stipulation with respect to the provision of adequate protection in any
bankruptcy proceeding of any Person; or

           

          
            
              
              

            

            
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          (h)  any action taken by the
Collateral Agent that is authorized by this Section 2.08 or
otherwise in this Agreement or by any other provision of any Financing Document
or any omission to take any such action.

           

          ARTICLE
III

          EVENTS OF
DEFAULT

           

          Section
3.01 Events of
Default. The occurrence of an Event of Default, whatever the reason for
such Event of Default and whether it is voluntary or involuntary or is effected
by operation of Law or pursuant to any judgment, decree or order of any court or
any order, rule or regulation of any Governmental Authority, shall constitute a
default hereunder. Any such Event of Default shall be considered cured or waived
for the purposes of this Agreement when it has been cured or waived in
accordance with the Credit Agreement.

           

          ARTICLE
IV

          REPRESENTATIONS
AND WARRANTIES

           

          Section
4.01 Representations
and Warranties. The Grantor hereby makes each and every representation
and warranty made by it in Article V (Representations
and Warranties) of the Credit Agreement to the same extent as if each
such representation and warranty had been set forth in full herein, and each
such representation and warranty is hereby incorporated fully by reference in
this Agreement. The Grantor also hereby represents and warrants as of the date
hereof and as of each Funding Date, as of the date of each Funding Notice, as of
the date of each Issuance Request, and as of the Conversion Date, as
follows:

           

          (a)  this
Agreement constitutes the legal, valid and binding obligations of the Grantor
enforceable in accordance with its respective terms, except as the
enforceability hereof or thereof may be limited by (i) bankruptcy, insolvency,
reorganization, or other similar Laws affecting the enforcement of creditors'
rights generally and (ii) general equitable principles (whether considered in a
proceeding in equity or at Law);

           

          (b)  the
exercise by the Collateral Agent of any of its rights and remedies with respect
to the Collateral in accordance with the terms of this Agreement will not
contravene any Contractual Obligation binding on or affecting the Grantor or any
of the properties of the Grantor and will not result in or require the creation
of any Lien (other than Permitted Liens) upon or with respect to any of the
Collateral other than as pursuant to this Agreement;

           

          (c)  its name
is [_____________], as indicated in the public records of the State of
Delaware,
and it has not had any other names within the past five (5) years [other than
[_____________]];

           

          (d)  its
federal employee identification number is [_____________] and its
organizational
number is [_____________];

           

          (e)  its chief
executive office and the place where the Grantor's records concerning
the
Collateral are kept is: [_____________];

           

          
            
              
              

            

            
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          (f)  the
Grantor is, and after giving effect to the transactions contemplated hereby will
be, Solvent; and

           

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

           

          ARTICLE
V

          COVENANTS
OF GRANTOR

           

          The
Grantor covenants to and in favor of the Collateral Agent and the other Senior
Secured Parties as follows:

           

          Section
5.01 Defense of
Collateral. The Grantor shall, until the Discharge Date, defend its title
to the Collateral and the interest of the Collateral Agent (for the benefit of
itself and the other Senior Secured Parties) in the Collateral pledged hereunder
against the claims and demands of all other Persons, provided that nothing in
this Section
5.01 shall limit the Grantor's right to dispose of the Collateral in
accordance with the Financing Documents.

           

          Section
5.02 Limitation
of Liens. The Grantor shall not create, incur, assume or suffer to exist
any Liens (including authorizing the filing of any financing statements under
the UCC or any like statement relating to the Collateral) on or with respect to
all or any part of the Collateral (other than Permitted Liens). The Grantor
shall at its own cost and expense promptly take such action as may be necessary
to discharge any such Liens (other than Permitted Liens).

           

          Section
5.03 No Sale of
Collateral. Except as permitted by the terms of the Financing Documents,
the Grantor shall not cause, suffer or permit the sale, assignment, conveyance,
pledge or other transfer of all or any portion of the Collateral.

           

          Section
5.04 No
Impairment of Security. The Grantor shall not take any action that, or
fail to take any action if such failure would, impair in any manner the
enforceability of the Collateral Agent's security interest in and Lien on any
Collateral.

           

          Section
5.05 Maintenance
of Records. The Grantor shall, at all times, keep accurate and complete
records of the Collateral. The Grantor shall permit officers and designated
representatives of the Collateral Agent to examine the Grantor's books and
records pertaining to the Collateral, and make copies thereof or abstracts
therefrom, all at the expense of the Grantor and at such reasonable times during
normal business hours and as often as may be reasonably desired, upon reasonable
advance notice to the Grantor; provided,
that if a Default or an Event of Default has occurred and is continuing, the
Collateral Agent (or any of its officers or designated representatives) may do
any of the foregoing at any time during normal business hours and without
advance notice to the Grantor. Upon the occurrence and during the continuation
of any Event of Default, at the Collateral Agent's request, the Grantor shall
promptly deliver to the Collateral Agent copies of any and all of the records
mentioned above.

           

          Section
5.06 Name;
Jurisdiction of Organization. The Grantor shall not change its name, its
jurisdiction of organization, the location of its principal place of business or
its organization identification number without written notice to the Collateral
Agent at least thirty (30) days prior to such change. In the event of such
change, the Grantor shall (at its expense) execute
and deliver such instruments and documents as may be required by the Collateral
Agent or applicable Law to maintain a first priority perfected security interest
in the Collateral.

           

          
            
              
              

            

            
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          Section
5.07 Perfection. Whether
with respect to the Collateral as of the date of this Agreement or any
Collateral in which the Grantor acquires rights in the future, from time to time
and at the expense of the Grantor, the Grantor shall promptly execute and
deliver all further instruments and documents, and take all further action, that
may be reasonably necessary (including under applicable Law and, in any event,
under Section 9-106 of the UCC), or that the Collateral Agent may reasonably
request, in order to create, perfect, establish and preserve the validity,
perfection and priority of the liens granted by this Agreement in any and all of
the Collateral, protect the assignment and security interest granted or intended
to be granted hereby, or to enable the Collateral Agent to exercise and enforce
its rights, powers, privileges and remedies hereunder with respect to any
Collateral. Without limiting the generality of the foregoing, the Grantor shall:
(a) if any Collateral is evidenced by a promissory note or other instrument,
deliver and pledge to the Collateral Agent such note or instrument duly endorsed
(without recourse) and accompanied by duly executed instruments of transfer or
assignment, all in form and substance reasonably satisfactory to the Collateral
Agent; and (b) authorize, execute and file such UCC financing statements or
continuation statements, or amendments thereto, and such other instruments,
endorsements or notices, as may be reasonably necessary or desirable, or as the
Collateral Agent may reasonably request or as required by applicable Law, in
order to perfect and preserve the assignments and security interests granted or
purported to be granted hereby. If the Grantor at any time acquires a commercial
tort claim, as defined in the UCC, with a fair market value in excess of five
hundred thousand Dollars ($500,000), the Grantor shall promptly notify the
Collateral Agent and Administrative Agent, in a writing signed by an Authorized
Officer of the Grantor, of the brief details thereof and grant to the Collateral
Agent in such writing a security interest therein and in the proceeds thereof,
all upon the terms of this Agreement, with such writing to be in form and
substance reasonably satisfactory to the Collateral Agent.

           

          Section
5.08 Notices;
Information. The Grantor shall, promptly upon request and at its own
expense, provide to the Collateral Agent all information and evidence the
Collateral Agent may reasonably request concerning the Collateral to enable the
Collateral Agent to enforce the provisions of this Agreement.

           

          Section
5.09 Security
Entitlements. If any Collateral consists of security entitlements, the
Grantor shall transfer such security entitlements to the Collateral Agent (or
its custodian, nominee or other designee) or cause the applicable securities
intermediary to agree that it will comply with entitlement orders by the
Collateral Agent without further consent by the Grantor.

           

          ARTICLE
VI

          REMEDIES
UPON AN EVENT OF DEFAULT

           

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

           

          
            
              
              

            

            
              6.04(g)-C
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          (a)  proceed
to protect and enforce the rights vested in it by this Agreement and under the
UCC;

           

          (b)  cause all
revenues hereby pledged as security and all other moneys and other property
pledged hereunder to be paid and/or delivered directly to it, and demand, sue
for, collect and receive any such moneys and property;

           

          (c)  cause any
action at Law in equity or other proceeding to be instituted and prosecuted to
collect or enforce any of the Obligations, or exercise any rights hereunder or
included in the Collateral, or for specific enforcement of any covenant or
agreement contained herein or in any of the Assigned Agreements, 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;

           

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

           

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

           

          (f)  perform
any obligation of the Grantor hereunder or under any other Financing Document or
Assigned Agreement, submit renewal notices or exercise any purchase options, 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;

           

          (g)  take
possession of the Collateral (and of any and all books of account and records of
the Grantor 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 Grantor and all Persons claiming access through the Grantor 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 [_____________] Plant, 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 the Grantor's obligations hereunder or under
any of the Financing Documents, and apply the balance to the Obligations as
provided for in the Credit Agreement and any remaining excess balance to
whomsoever is legally entitled thereto;

           

          (h)  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;

           

          (i)  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 the principal sum of the
Obligations, 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 this Agreement
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;

           

          
            
              
              

            

            
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          (j)  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;

           

          (k)  transfer
the Collateral, or any part thereof, to the name of the Collateral Agent or to
the name of any nominee of the Collateral Agent;

           

          (1)  take possession of and
endorse in the name of the Grantor or in the name of the
Collateral Agent, for the account of the Grantor, 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;

           

          (m)  appoint
another (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;

           

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

           

          (o)  require
the Grantor 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 Collateral Agent;

           

          (p)  make
formal application for the transfer of all or any of the Grantor's Governmental
Approvals 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; and/or

           

          (q)  take any
other lawful action that the Collateral Agent deems necessary or desirable to
protect or realize upon its security interest in the Collateral or any part
thereof, or 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.

           

          
            
              
              

            

            
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          Section
6.02 Minimum Notice
Period. If, pursuant to applicable Law requirements, prior notice of any
action described in Section 6.01 (Remedies
Upon an Event of Default), including the sale of the Collateral pursuant
to Section 6.03
(Sale of
Collateral), is required to be given to the Grantor, the Grantor hereby
acknowledges and agrees that the minimum time required by such applicable Law,
or, if no minimum time is specified, ten (10) days shall be deemed a reasonable
notice period under such applicable Law.

           

          Section
6.03 Sale of
Collateral. In addition to exercising the foregoing rights, the
Collateral Agent may, to the extent permitted by applicable Law, arrange for and
conduct a 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 Grantor any item of the 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 Credit Agreement, the other Financing Documents or any other
agreement related hereto or thereto. The Grantor, 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. The Grantor
also waives its right to challenge the reasonableness of any disclaimer of
warranties, title and the like made by the Collateral Agent in connection with a
sale of the Collateral. Each successor of the Grantor under the Financing
Documents shall be deemed to have agreed, by virtue of its succession thereto,
that it shall be bound by the above waiver, to the same extent as if such
successor gave such waiver itself. The Grantor also hereby waives, to the full
extent it may lawfully do so, the benefit of all Laws providing for rights of
appraisal, valuation, stay, or extension or of redemption after foreclosure now
or hereafter in force. If the Collateral Agent sells any of the Collateral upon
credit, the Grantor 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 Grantor shall be credited with the proceeds of any such sales or resales
only 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 the
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. The
Grantor 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.

           

          Section
6.04 Actions Taken by
Collateral Agent. Any action or proceeding to enforce this Agreement or
any Assigned Agreement may be taken by the Collateral Agent either in the
Grantor's name or in the Collateral Agent's name, as the Collateral Agent may
deem necessary.

           

          
            
              
              

            

            
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          Section
6.05 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 the Collateral Agent pursuant to this Article VI conducted
in a commercially reasonable manner and in accordance with the requirements of
applicable Laws. The Grantor hereby waives any claims against the Collateral
Agent and the 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
6.06 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, 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, to the
fullest extent permitted by Law, may enter upon any land owned or leased by the
Grantor without being guilty of trespass or any wrongdoing, and without
liability to the Grantor for damages thereby occasioned.

           

          Section
6.07 Compliance With
Limitations and Restrictions. The Grantor 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 the Collateral Agent 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 the Grantor 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 the Grantor for any discount allowed by reason of the
fact that such Collateral is sold in compliance with any such limitation or
restriction.

           

          Section
6.08 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 the Grantor or any
other Person, whether because of any applicable Law pertaining to "election of
remedies" or otherwise, the Grantor 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 that the Grantor might otherwise have had but for such action
by the Collateral Agent or the terms herein. Any election of remedies that
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 Law, impair the
Grantor's obligations hereunder.

           

          
            
              
              

            

            
              6.04(g)-C
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          ARTICLE
VII

          FURTHER
ASSURANCES

           

          Section
7.01 Attorney-in-Fact.
(a) The Grantor hereby constitutes and appoints the Collateral Agent, acting for
and on behalf of itself and the Senior Secured Parties and each successor or
permitted assign of the Collateral Agent and the Senior Secured Parties, the
true and lawful attorney-in-fact of the Grantor, with full power and authority
in the place and stead of the Grantor and in the name of the Grantor, the
Collateral Agent or otherwise to enforce all rights, interests and remedies of
the Grantor 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 Article VI
(Remedies
Upon an Event of Default); provided,
however, that the 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 the Financing Documents.
This power of attorney is a power coupled with an interest and shall be
irrevocable; provided,
however,
that nothing in this Agreement shall prevent the Grantor from, prior to the
exercise by the Collateral Agent of any of the aforementioned rights,
undertaking the Grantor's operations in the ordinary course of business with
respect to the Collateral, in accordance with the Collateral and the Financing
Documents.

           

          (b)  In addition to the
provisions of Section
7.01(a), if the Grantor fails to perform any
agreement or obligation contained herein to protect or preserve the Collateral,
and such failure continues for ten (10) days following delivery of written
notice by the Collateral Agent to the Grantor, 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 the Grantor and shall be secured by the
Collateral.

           

          Section
7.02 Filing of
Financing and Continuation Statements. The Grantor hereby authorizes the
filing of any financing statements or continuation statements, and amendments to
financing statements, or any similar document in any jurisdictions and with any
filing offices as the Collateral Agent or any Senior Secured Party may
determine, in its sole discretion, are necessary
or advisable to perfect, or preserve the validity, perfection or priority of,
the security interest granted to the Collateral Agent, for the benefit of the
Senior Secured Parties, herein. Such financing statements may describe the
Collateral in the same manner as described herein or may contain an indication
or description of the Collateral that describes such property in any other
manner as the Collateral Agent may determine, in its sole discretion, is
necessary, advisable or prudent to ensure the perfection of the security
interest in the Collateral granted to the Collateral Agent herein, including
describing such property as "all assets" or "all personal property", whether now
owned or hereafter acquired.

           

          Section
7.03 Termination
of Security Interest. Upon the Discharge Date, this Agreement and the
security interest and all other rights granted hereby shall terminate on the
Discharge Date and all rights to the Collateral shall revert to the Grantor.
Upon any such termination, the Collateral Agent shall, at the Grantor's expense
and upon its written direction, promptly return all instruments previously
delivered to the Collateral Agent representing any Collateral and execute and,
subject to Section
8.11 (Reinstatement),
deliver to the Grantor such documents (including UCC-3 termination statements)
as the Grantor shall reasonably request to evidence
such termination, to release all security interest on the Collateral and to
return such Collateral to the Grantor.

           

          
            
              
              

            

            
              6.04(g)-C
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          Section
7.04 Limitation on
Duty of Collateral Agent with Respect to the Collateral. The powers
conferred on the Collateral Agent hereunder are solely to protect its interest
and the interests of the Senior Secured Parties in the Collateral and shall not
impose any duty on the Collateral Agent or any of its designated agents to
exercise any such powers. Except for (a) the safe custody of any Collateral in
its possession, (b) the accounting for monies actually received by it hereunder,
(c) the exercise of reasonable care in the custody and preservation of the
Collateral in its possession, and (d) any duty expressly imposed on the
Collateral Agent by applicable Law with respect to any Collateral that has not
been waived by the Grantor hereunder, the Collateral Agent shall have no duty
with respect to any Collateral and no implied duties or obligations shall be
read into this Agreement against the Collateral Agent. The Collateral Agent
shall be deemed to have exercised reasonable care in the custody and
preservation of the Collateral in its possession if the Collateral is accorded
treatment that is substantially equivalent to that which the Collateral Agent
accords its own property, it being expressly agreed, to the maximum extent
permitted by applicable Law, that the Collateral Agent shall have no
responsibility for (i) taking any necessary steps to preserve rights against any
parties with respect to any Collateral or (ii) taking any action to protect
against any diminution in value of the Collateral, but, in each case, the
Collateral Agent may do so and all expenses reasonably incurred in connection
therewith shall be part of the Obligations.

           

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

           

          Section
7.06 Application of
Proceeds. Upon the occurrence and during the continuation of an Event of
Default, the proceeds of any sale of, or other realization upon, all or any part
of the Collateral shall be applied in accordance with Section 9.04 (Application
of Proceeds) of the Credit Agreement. The Grantor shall remain liable for
any deficiency in accordance with the respective Financing Documents to which it
is a party.

           

          Section
7.07 Collateral Agent
May Perform. Upon the occurrence and during the continuance of an Event
of Default, if the Grantor fails to perform any agreement contained herein, the
Collateral Agent may itself perform, or cause performance of, such agreement,
and the reasonable expenses of the Collateral Agent incurred in connection
therewith shall be part of the Obligations.

           

          ARTICLE
VIII

          MISCELLANEOUS

           

          Section
8.01 Amendments;
Etc. This Agreement may not be amended, modified or supplemented, except
in a writing signed by each of the parties hereto and otherwise in accordance
with the provisions of Section 11.01 (Amendments,
Etc.) of the Credit Agreement.

           

          Section
8.02 Applicable Law;
Jurisdiction; Etc. (a) GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE
LAWS OF THE STATE OF NEW YORK, UNITED STATES OF AMERICA WITHOUT REFERENCE TO
CONFLICTS OF LAWS (OTHER THAN SECTION 5-1401 OF THE NEW YORK GENERAL OBLIGATIONS
LAW).

           

          
            
              
              

            

            
              6.04(g)-C
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          (b)  SUBMISSION TO
JURISDICTION. THE GRANTOR IRREVOCABLY AND UNCONDITIONALLY SUBMITS, FOR
ITSELF AND ITS PROPERTY, TO THE NON­EXCLUSIVE JURISDICTION OF THE COURTS OF
THE STATE OF NEW YORK SITTING IN NEW YORK COUNTY AND OF THE UNITED STATES
DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK, AND ANY APPELLATE COURT
FROM ANY THEREOF, IN ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS
AGREEMENT OR ANY OTHER FINANCING DOCUMENT, OR FOR RECOGNITION
OR ENFORCEMENT OF ANY JUDGMENT, AND EACH OF THE PARTIES HERETO IRREVOCABLY AND
UNCONDITIONALLY AGREES THAT ALL CLAIMS IN RESPECT OF ANY SUCH ACTION OR
PROCEEDING MAY BE HEARD AND DETERMINED IN SUCH NEW YORK STATE COURT OR, TO THE
FULLEST EXTENT PERMITTED BY APPLICABLE LAW, IN SUCH FEDERAL COURT. EACH OF THE
PARTIES HERETO AGREES THAT A FINAL JUDGMENT IN ANY SUCH ACTION OR PROCEEDING
SHALL BE CONCLUSIVE AND MAY BE ENFORCED IN OTHER JURISDICTIONS BY SUIT ON THE
JUDGMENT OR IN ANY OTHER MANNER PROVIDED BY LAW. NOTHING IN THIS AGREEMENT OR IN
ANY OTHER FINANCING DOCUMENT SHALL AFFECT ANY RIGHT THAT THE COLLATERAL AGENT OR
ANY OTHER SENIOR SECURED PARTY MAY OTHERWISE HAVE TO BRING ANY ACTION OR
PROCEEDING RELATING TO THIS AGREEMENT OR ANY OTHER FINANCING DOCUMENT AGAINST
THE GRANTOR OR ITS PROPERTIES IN THE COURTS OF ANY JURISDICTION.

           

          (c)  WAIVER OF VENUE. THE
GRANTOR 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 8.02(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.

           

          (d)  Appointment of Process Agent
and Service of Process. Appointment of Process Agent and Service of
Process. The Grantor hereby irrevocably appoints CT Corporation System
with an office on the date hereof at 111 Eighth Avenue, New York, New York
10011, as its agent to receive on behalf of itself and its property services of
copies of the summons and complaint and any other process that may be served in
any such action or proceeding in the State of New York. If for any reason the
Process Agent shall cease to act as such for the Grantor, the Grantor hereby
agrees to designate a new agent in New York City on the terms and for the
purposes of this Section 8.02
reasonably satisfactory to the Collateral Agent. Such service may be made by
mailing or delivering a copy of such process to the Grantor, in care of the
Process Agent at the Process Agent's above address, and the Grantor hereby
irrevocably authorizes and directs the Process Agent to accept such service on
its behalf. As an alternative method of service, the Grantor also irrevocably
consents to the service of any and all process in any such action or proceeding by the air mailing
of copies of such process to the Grantor, at its then effective notice addresses
pursuant to Section
8.09 (Notices).

           

          
            
              
              

            

            
              6.04(g)-C
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          (e)  Immunity. To the
extent that the Grantor 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, the Grantor 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 8.02(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 THE
TRANSACTIONS CONTEMPLATED HEREBY (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 PARTY 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
8.02(f).

           

          Section
8.03 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 Collateral Agent and when the Collateral Agent has received counterparts
hereof that bear the signature of the Grantor. Delivery of an executed
counterpart of a signature page of this Agreement by telecopy or portable
document format ("pdf') shall be effective as delivery of a manually executed
counterpart of this Agreement.

           

          Section
8.04 Delay Not Waiver;
Separate Causes of Action. No delay or omission to exercise any right,
power or remedy accruing to the Collateral Agent upon the occurrence of any
Event of Default shall impair any such right, power or remedy of the Collateral
Agent, nor shall it be construed to be a waiver of any such Event of Default, or
an acquiescence therein, or of or in any other breach or default thereafter
occurring, nor shall any waiver of any other breach or default under this
Agreement or any other Financing Document be deemed a waiver of any other breach
or default theretofore or thereafter occurring. Any waiver, permit, consent or
approval of any kind or character on the part of the Collateral Agent of any
breach or default under this Agreement, or any waiver on the part of the Senior
Secured Parties or the Collateral Agent of any provision or condition of this
Agreement, must be in writing and shall be effective only to the extent
specifically set forth in such writing. Each and every default by the Grantor in
payment
hereunder shall give rise to a separate cause of action hereunder, and separate
suits may be brought hereunder as each cause of action arises.

           

          
            
              
              

            

            
              6.04(g)-C
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          Section
8.05 Entire
Agreement. This Agreement, together with the other Financing Documents,
is intended by the parties as a final expression of their agreement and is
intended as a complete and exclusive statement of the terms and conditions
thereof.

           

          Section
8.06 Expenses.
The Grantor agrees to pay on demand to the Collateral Agent all costs and
expenses incurred by the Collateral Agent (including fees, expenses and
disbursements of counsel) incident to its enforcement, exercise, protection or
preservation of any of its rights, remedies or claims (or the rights or claims
of any Senior Secured Party) under this Agreement.

           

          Section
8.07 Headings
Descriptive. Article and Section headings have been inserted in this
Agreement as a matter of convenience for reference only and it is agreed that
such article and section headings are not a part of this Agreement and shall not
be used in the interpretation of any provision of this Agreement.

           

          Section
8.08 Interest.
Any amount required to be paid by the Grantor pursuant to the terms hereof that
is not paid when due shall bear interest at the Default Rate or the maximum rate
permitted by Law, whichever is less, from the date due until paid in full in
cash.

           

          Section
8.09 Notices.
(a) All notices, requests, demands or other communications provided for herein
(including, without limitation, any modifications of or waivers or consents
under, this Agreement) shall be given or made in writing in the manner set out
in Section 11.12 (Notices
and Other Communications) of the Credit Agreement and to the addresses
set forth below:

           

          If to the
Grantor:

           

          [ADDRESS]

          
          

           

          
            	 	Attention:	[_____________]
	 	Telephone:	[_____________]
	 	Facsimile:	[_____________]
	 	E-mail:	[_____________]

          

           

          If to the
Collateral Agent: [ADDRESS]

          
             

            
              	 	Attention:	[_____________]
	 	Telephone:	[_____________]
	 	Facsimile:	[_____________]
	 	E-mail:	[_____________]

            

             

            
              
                
                

              

              
                6.04(g)-C
- 24

                
                  

                

              

              
                
                

              

            

             

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

             

            Section
8.10 No Waiver;
Cumulative Remedies. No failure by the Collateral Agent to exercise, and
no delay by the Collateral Agent in exercising, any right, remedy, power or
privilege hereunder shall operate as a waiver thereof; nor shall any single or
partial exercise of any right, remedy, power or privilege hereunder preclude any
other or further exercise thereof or the exercise of any other right, remedy,
power or privilege.

             

            Section
8.11 Reinstatement. This
Agreement and the obligations of the Grantor hereunder
shall automatically be reinstated if and to the extent that for any reason any
payment made pursuant to this Agreement is rescinded or must otherwise be
restored or returned, whether as a result of any proceedings in bankruptcy or
reorganization or otherwise with respect to the Grantor or any other Person or
as a result of any settlement or compromise with any Person (including the
Grantor) in respect of such payment, and the Grantor shall pay the Collateral
Agent on demand all of its reasonable costs and expenses (including reasonable
fees, expenses and disbursements of counsel) incurred by the Collateral Agent in
connection with such rescission or restoration.

             

            Section
8.12 Remedies
Cumulative. No right, power or remedy herein conferred upon or reserved
to the Collateral Agent hereunder is intended to be exclusive of any other
right, power or remedy, and every such right, power and remedy shall, to the
extent permitted by applicable Law, be cumulative and in addition to every other
right, power and remedy given hereunder or under any other Financing Document
now or hereafter existing at Law or in equity or otherwise. The assertion or
employment of any right or remedy hereunder, or otherwise, shall not prevent the
concurrent assertion or employment of any other appropriate right or remedy.
Resort to any or all security now or hereafter held by the Collateral Agent or
any other Senior Secured Party, may be taken concurrently or successively and in
one or several consolidated or independent judicial actions or lawfully taken
nonjudicial proceedings, or both.

             

            Section
8.13 Rights of
Collateral Agent. The Collateral Agent shall be entitled to the rights,
protections, immunities and indemnities set forth in the Credit Agreement as if
specifically set forth herein. With respect to the duties, obligations and
rights of the Collateral Agent, if any conflict between the terms of this
Agreement and the terms of the Credit Agreement arises, the terms of the Credit
Agreement shall govern and control.

             

            Section
8.14 Severability. If any
provision of this Agreement is held to be illegal, invalid or unenforceable, (a)
the legality, validity and enforceability of the remaining provisions of this
Agreement 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.

             

            
              
                
                

              

              
                6.04(g)-C
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            Section
8.15 Successions and
Assignments. This Agreement shall create a continuing
pledge and assignment of and security interest in the Collateral and shall (a)
remain in full
force and effect until the Discharge Date and as otherwise provided in Section 8.16 (Survival
of Provisions); (b) be binding upon the Grantor and its successors and
assigns; and (c) inure, together with the rights and remedies of the Collateral
Agent, to the benefit of the Collateral Agent, the Senior Secured Parties and
their respective successors and permitted assigns. The release of the security
interest in any of the Collateral, the taking or acceptance of additional
security, or the resort by the Collateral Agent to any security it may have in
any order it may deem appropriate, shall not affect the liability of any Person
on the indebtedness secured hereby, except for release of Collateral upon the
Discharge Date. The Grantor is not entitled to assign its obligations hereunder
to any other Person without the written consent of the Collateral Agent, and any
purported assignment in violation of this provision shall be void.

             

            Section
8.16 Survival of
Provisions. All agreements, representations and warranties made herein
shall survive the execution and delivery of this Agreement and the Financing
Documents and the making of the Loans and extensions of credit under the Credit
Agreement. Notwithstanding anything in this Agreement or implied by Law to the
contrary, the agreements of the Grantor set forth herein shall terminate at the
same time as the security interest and other rights granted hereunder shall
terminate pursuant to Section 7.03 (Termination
of Security Interest).

             

            Section
8.17 Third Party
Rights. Nothing in this Agreement, expressed or implied, is intended or
shall be construed to confer upon, or give to any Person, other than the
Grantor, the Collateral Agent and the Senior Secured Parties, and each of their
successors and permitted assigns under this Agreement or any other Financing
Document, any security, rights, remedies or claims, legal or equitable, under or
by reason hereof, or any covenant or condition hereof; and this Agreement and
the covenants and agreements herein contained are and shall be held to be for
the sole and exclusive benefit of the Grantor, the Collateral Agent and the
Senior Secured Parties, and each of their successors and permitted assigns under
this Agreement or any other Financing Document.

             

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

             

            Section
8.19 Waiver of
Consequential Damages, Etc. To the fullest extent permitted by applicable
Law, the Grantor shall not assert, and the Grantor hereby waives, any claim
against any Indemnitee, 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
8.20 Waiver of
Litigation Payments. To the extent that the Grantor may, in any action,
suit or proceeding brought in any of the courts referred to in Section 8.02 (Applicable
Law;
Jurisdiction; Etc.) 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 the Collateral Agent or any Senior Secured Party in such action, suit
or proceeding to post security for the costs of such Grantor or to post a bond
or to take similar action, the Grantor 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.

          

           

          [The
remainder of this page is intentionally blank. The next page is the signature
page.]

           

          
            
              
              

            

            
              6.04(g)-C
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          IN
WITNESS WHEREOF, the parties hereto, by their officers duly authorized,
intending to be legally bound, have caused this Assignment and Security
Agreement to be duly executed and delivered as of the date first above
written.

           

          
          

           

          
            	 	
                    [____________________________________],

                    as
      Grantor

                  
	 	 
	 	 	 
	 	By:	______________________________ 
	 	 	Name:
	 	 	Title:
	 	 	 
	 	 	 
	 	 	 
	 	 	 
	 	
                    [____________________________________],

                    as Collateral Agent

                  
	 	 	 
	 	 	 
	 	By:	______________________________ 
	 	 	Name:
	 	 	Title:

          

           

          
            
              
              

            

            
              6.04(g)-C
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          Schedule
2.01

          to the Assignment and
Security Agreement

           

          ASSIGNED
AGREEMENTS

           

          [To be
provided]

           

           

           

           

           

           

          
            
              
              

            

            
              6.04(g)-C
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              EXHIBIT
6.05(c) 

              to Credit
Agreement

               

              [FORM
OF]

              INDEPENDENT ENGINEER'S
CERTIFICATE

               

              [Letterhead
of Independent Engineer]

              

              [DATE]

              

              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_agency services@westlb.com

              

              
                
                  	
                        	
                          Re:

                        	
                          [PACIFIC
      ETHANOL STOCKTON, LLC] [PACIFIC ETHANOL IMPERIAL, LLC] 

                          [PACIFIC
      ETHANOL MAGIC VALLEY, LLC]

                        

                

              

              
 

              Ladies
and Gentlemen:

              

              The
undersigned, a duly authorized representative of [__________] (the "Independent
Engineer"), hereby provides
this letter to you in accordance with Section 6.05(c) of that certain Credit
Agreement (as amended, supplemented or otherwise modified from time to time, the
"Credit
Agreement"), dated as of February __, 2007, 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, PACIFIC ETHANOL IMPERIAL, 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 Borrowers'
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, UNION BANK OF CALIFORNIA, as
Accounts Bank, WESTLB AG, NEW YORK BRANCH, as Lead Arranger and Sole Bookrunner,
MIZUHO CORPORATE BANK, LTD., as Lead Arranger and Co-Syndication Agent, CIT
CAPITAL SECURITIES LLC, as Lead Arranger and Co-Syndication Agent, COOPERATIEVE
CENTRALE RAIFFEISEN-BOERENLEENBANK B.A., "RABOBANK NEDERLAND", NEW YORK BRANCH,
as Lead Arranger and Co-Documentation Agent, and BANCO SANTANDER CENTRAL HISPANO
S.A, NEW YORK BRANCH, as Lead Arranger and Co-Documentation
Agent. Capitalized terms used herein but not otherwise defined herein shall have
the respective meanings set forth in the Credit Agreement.

               

              
                
                  
                  

                

                
                  6.05(c) – 1

                  
                    

                  

                

                
                  
                  

                

              

               

              The
Independent Engineer acknowledges that pursuant to the Credit Agreement, the
Lenders will be providing financing to the Borrowers for the construction of the
Project and in so doing will be relying on this certificate and the Independent
Engineer's report dated [________]. [This Independent Engineer's Certificate is
being delivered as a condition to the initial Funding for the [Stockton]
[Brawley] [Burley] Plant and the Independent Engineer's report attached hereto
as Exhibit A
represents the Independent Engineer's professional opinion based on the
documentation provided by the Borrowers. The Independent Engineer certifies that
(i) the copy of the Independent Engineer's report attached hereto as Exhibit A is true,
correct and complete, (ii) such report represents the Independent Engineer's
professional opinion as of the date thereof and (iii) since the date of such
report, nothing has come to our attention that would cause us to change such
report.]1

               

              The
Independent Engineer certifies that it has reviewed the Funding Notice dated
[_______, 200[_]] (the "Current Funding Notice") and
the reports and documents attached thereto and other material relating to the
Project as it believes are necessary to establish the accuracy of this
certificate. The Independent Engineer's review and observations were performed
within the scope of our professional service agreement with the Administrative
Agent and in accordance with generally accepted technical consulting practice,
including such investigations, observations and review as we in our professional
capacity deemed necessary under the circumstances. Based on the foregoing review
and review procedures and on the understanding and assumption that we have been
provided true, correct, and complete information from the Borrowers (including
all information provided by contractors or subcontractors and attached to the
Current Funding Notice) as to the matters covered by the Current Funding Notice,
as of the date of the Current Funding Notice, we are providing the
certifications and opinions herein.

               

              The
Independent Engineer further certifies that:

               

              (i)  the Independent
Engineer believes that the Commercial Operation Date for the [Stockton]
[Brawley] [Burley] Plant will occur on or prior to the Conversion Date
Certain;

               

              (ii)  it is the
opinion of the Independent Engineer that sufficient funds remain available to
the Borrowers, including under this Agreement and under the Sponsor Support
Agreement, to complete such Plant in accordance with the applicable Construction
Schedule and the Transaction Documents', except as set forth in Exhibit B
hereto];

               

              (iii)  it is the
opinion of the Independent Engineer, based on our best knowledge, that the
statements contained in the Current Funding Notice are true and correct[, except
as set forth on Exhibit B hereto];

               

              _______________________________________

               

              1 Note:
to be included only for the initial Funding Notice with respect to each
Greenfield Plant.

              

              

              
                
                  
                  

                

                
                  6.05(c) – 2

                  
                    

                  

                

                
                  
                  

                

              

               

              [(iv)  [it is the
opinion of the Independent Engineer that as of the date hereof, no changes are
required to the Construction Budget for the [Stockton] [Brawley] [Burley] Plant
delivered pursuant to Section 6.01(q) (Conditions to Closing —Budgets and
Schedules) of the Credit Agreement;] [it is the opinion of the
Independent Engineer that the increase in costs between the Construction Budget
delivered pursuant to such Section 6.01(q) of the Credit Agreement and the
updated Construction Budget delivered pursuant to such Section 6.04(h) of the
Credit Agreement is equal to [___________] Dollars
($[_________]) and, to
the best of the Independent Engineer's knowledge, such amount has been deposited
into the Construction Account for such Plant or has previously been applied to
pay Project Costs for such Plant (in each case, from sources other than the
Loans, Cash Flow or the Sponsor Support Agreement);]] [Note: Select
one.]

               

              [(v)  the Independent
Engineer has received a copy of (a) each Work Schedule provided for in any
Construction Contract for the [Stockton] [Brawley] [Burley] Plant and (b) each
Schedule of Values provided for in any such Construction Contract, each of which
is in form and substance reasonably satisfactory to the Independent
Engineer;]1 [Note: if applicable]
and

               

              (vi)  in
addition, the Independent Engineer further certifies that, except as set forth
in Exhibit B
hereto, it has no knowledge of any event of force majeure under any Project
Document nor of any Funding Default or Event of Default that has occurred and is
continuing.

               

               

              [The
remainder of this page is intentionally blank. The next page is the signature
page.]

              

              

               

              
                
                  
                  

                

                
                  6.05(c) – 3

                  
                    

                  

                

                
                  
                  

                

              

              

              IN
WITNESS WHEREOF, the undersigned has caused this Independent Engineer's
Certificate to be duly executed by an authorized offer as of the date first
above written.

               

               

              
                	 	[___________], 
	 	 
	 	 
	 	By: 
      _____________________________________ 
	 	Name: 
	 	Title: 

              

               

              

              

               

              

              

               

              
                
                  
                  

                

                
                  6.05(c) – 4

                  
                    

                  

                

                
                  
                  

                

              

              

              EXHIBIT
A

              to Independent Engineer's
Certificate

              

              

              INDEPENDENT
ENGINEER'S REPORT

              

              [Note: to
be included only with respect to the initial Funding for each Greenfield
Plant.]

              

              

              

               

               

               

              
                
                  
                  

                

                
                  6.05(c) - Exhibit A

                  
                    

                  

                

                
                  
                  

                

              

              

              EXHIBIT
B

              to Independent Engineer's
Certificate

               

              [EXCEPTIONS]

              

              

              

              

               

              
 

               

              
                 

                
                  
                    
                    

                  

                  
                    
                      6.05(c) -
Exhibit B

                    

                    
                      

                    

                  

                  
                    
                    

                  

                   

                

                EXHIBIT
7.01(y) 

                to Credit
Agreement

                 

                [FORM
OF]

                
                  FINAL COMPLETION
CERTIFICATE

                  

                  
                    	
                            To:

                          	
                            WESTLB
      AG, NEW YORK BRANCH,

                            as Administrative Agent under the Credit Agreement 

                            referred to below

                          

                  

                   

                  

                  Date:
[_________]

                  

                  
                    	
                            Re:

                          	
                            [Madera] [Boardman] [
      Stockton] [Brawley] [Burley]
Plant

                          

                  

                  

                  Reference
is hereby made to the Credit Agreement (as amended, supplemented or otherwise
modified from time to time, the "Credit Agreement"), dated as of
February __, 2007 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,
PACIFIC ETHANOL IMPERIAL, 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 Borrowers' 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, UNION BANK OF CALIFORNIA, N.A. as Accounts Bank, WESTLB AG, NEW
YORK BRANCH, as Lead Arranger and Sole Bookrunner, MIZUHO CORPORATE BANK, LTD.,
as Lead Arranger and Co-Syndication Agent, CIT CAPITAL SECURITIES LLC, as Lead
Arranger and Co-Syndication Agent, COOPERATIEVE CENTRALE
RAIFFEISEN­BOERENLEENBANK B.A., "RABOBANK NEDERLAND", NEW YORK BRANCH, as
Lead Arranger and Co-Documentation Agent, and BANCO SANTANDER CENTRAL HISPANO
S.A, NEW YORK BRANCH, as Lead Arranger and Co-Documentation Agent. Capitalized
terms used herein but not otherwise defined herein shall have the respective
meanings set forth in the Credit Agreement.

                  

                   

                  
                    
                      
                      

                    

                    
                      7.01(y) – 1

                      
                        

                      

                    

                    
                      
                      

                    

                  

                  

                  This
Final Completion Certificate is the Final Completion Certificate for the
[Madera] [Boardman] [Stockton] [Brawley] [Burley] Plant, and is delivered to the
Administrative Agent pursuant to Section 7.01(y) of the Credit
Agreement.

                   

                  The
undersigned, on behalf of the Borrowers' Agent, hereby represents and certifies
as follows:

                   

                  1.  the individual
executing this Final Completion Certificate on behalf of the Borrowers' Agent is
an Authorized Officer of the Borrowers' Agent;

                   

                  2.  the Commercial
Operation Date for such Plant occurred on [insert date];

                   

                  3.  the final air
emissions test for such Plant has been satisfactorily completed;

                   

                  4.  the insurance
required pursuant to Schedule 7.01(h) with
respect to such Plant, and required of the Borrowers under any Project Document
relating to such Plant, is in place, as confirmed by the Insurance Consultant;
and

                   

                  5.  all construction
costs for such Plant have been fully paid (other than amounts that are subject
to a Contest).

                   

                  The
undersigned, on behalf of the Independent Engineer, hereby represents and
certifies as follows:

                   

                  1.  the individual
executing this Final Completion Certificate on behalf of the Independent
Engineer is an authorized representative of the Independent
Engineer;

                   

                  2.  the Independent
Engineer has previously executed the Commercial Operation Date Certificate for
such Plant, which certificate was dated as of [insert date];

                   

                  3.  based on
information provided by the Borrowers and third-party air emissions test results
reviewed by the Independent Engineer, it is the opinion of the Independent
Engineer that the final air emissions test for such Plant has been completed in
a manner satisfactory to the Independent Engineer; and

                   

                  4.  based on
documentation requested by the Independent Engineer and received from the
Borrowers, all construction costs for such Plant payable to the Construction
Contractors, and all other material construction work with respect to which the
Independent Engineer has requested evidence of payment, have been fully paid
other than amounts that (based on documentation received from the Borrowers) are
subject to a Contest.

                   

                   

                  
                    
                      
                      

                    

                    
                      7.01(y) – 2

                      
                        

                      

                    

                    
                      
                      

                    

                  

                   

                  Each
undersigned person is executing this Final Completion Certificate not in an
individual capacity but in its capacity as an Authorized Officer of the
Borrowers' Agent or as an authorized representative of the Independent Engineer,
as applicable.

                  

                   

                  [The
remainder of this page is intentionally blank. The next page is the signature
page.]

                  

                  

                  

                   

                  
                    
                      
                      

                    

                    
                      7.01(y) – 3

                      
                        

                      

                    

                    
                      
                      

                    

                  

                  

                  IN
WITNESS WHEREOF, the undersigned have caused this Final Completion Certificate
to be duly executed as of the date first above written.

                   

                   

                  
                    	 	
                            PACIFIC
      ETHANOL HOLDING CO. LLC, 

                            as
      Borrowers' Agent

                            

                            By: 
      __________________________________

                            Name:

                            Title:

                            

                            [_________________]

                            as
      Independent Engineer

                             

                            
                              By: 
      __________________________________

                              Name:

                              Title:

                            

                          

                  

                   

                  

                  

                  

                  
                     

                   

                  
                    
                      
                      

                    

                    
                      7.01(y) – 4

                      
                        

                      

                    

                    
                      
                      

                    

                  

                   

                  Exhibit
7.02(i) 

                  to the Credit
Agreement

                   

                  SPECIAL
DEPOSIT ACCOUNT CONTROL AGREEMENT

                  (Security
Interest in Deposit Account-Contingency)

                  
                    

                    
                      	
                              To:

                            	
                              [Insert
      Name and Address of Local Bank]

                            

                    

                    

                    
                      	
                              Re:

                            	
                              Borrower:[______________]

                            

                    

                    

                    Secured
Party: WestLB AG, New York Branch, as Collateral Agent for the Senior Secured
Parties

                    

                    Account
Numbers: [Insert Account Numbers]

                    

                    Dear
[__________]:

                    

                    1.  Security Interest in Special Deposit
Account. This shall serve as notice to [_________] ("Bank") that
the Borrowers named above (jointly and severally, the "Borrower") has assigned
and granted to the Secured Party named above ("Secured Party") a security
interest in certain assets of Borrower, including among other things, all
checks, drafts, and other instruments deposited in the accounts (collectively
and individually, the "Special Deposit Account") designated above maintained by
Borrower with Bank, and any and all future deposits thereto, and any and all
proceeds thereof, including any interest earned thereon.

                     

                    2.  Bank Acknowledgment. Bank
acknowledges that Bank has received notice of Secured Party's security interest
in the Special Deposit Account. For so long as this Agreement remains in effect,
Bank subordinates its rights of chargeback, setoff and/or banker's lien against
the Special Deposit Account, provided, however, that nothing herein constitutes
a subordination or waiver of, and Bank expressly reserves all of, its present
and future rights (whether described as rights of setoff, banker's lien,
chargeback or otherwise and whether available to Bank at law, in equity, under
the Commercial Code, under any other agreement between Bank and Borrower
concerning the Special Deposit Account or otherwise) with respect to (a) Items
(as defined in section 6 of this Agreement) deposited to the Special Deposit
Account that are returned unpaid, whether for insufficient funds or for any
other reason; (b) claims of breach of any of the warranties set forth in
Sections 3416, 3417, 4207, 4208 or 4209 of the California Commercial Code; (c)
overdrafts in the Special Deposit Account; (d) Bank's usual and customary
charges for services rendered in connection with the Special Deposit Account;
and (e) obligations and liabilities arising out of any cash management or
deposit services provided by Bank or third party vendors in connection with the
Special Deposit Account including, but not limited to, Automated Clearing House
transactions ("ACH"), payroll services, and controlled disbursement services.
Secured Party acknowledges and agrees that its security interest in the Special
Deposit Account is subordinate to the rights reserved by Bank in this
paragraph.

                     

                    
                      
                        
                        

                      

                      
                        7.02(i) – 1

                        
                          

                        

                      

                      
                        
                        

                      

                    

                     

                    3.  Returned Items and Fees. Bank
will charge the Special Deposit Account for Items deposited to the Special
Deposit Account that are returned unpaid or returned for any reason and for
Bank's fees and charges relating to the Special Deposit Account. Bank reserves
the right to place a hold on funds deposited to the Special Deposit Account to
the extent permitted by Federal Reserve Regulation CC. Following Bank's receipt
of a written Notice of Control (as defined in Section 4 of this Agreement),
Secured Party agrees to reimburse Bank upon demand for Bank's fees, charges, and
returned Items if there are insufficient funds in the Special Deposit Account to
cover such fees, charges, and returned Items.

                     

                    4.  Control of Special Deposit Account by Secured
Party. Bank, Secured Party and Borrower agree that Bank will
comply with written instructions ("Orders")
originated by Secured Party for the disposition of funds in the Special Deposit
Account without further consent from Borrower and without regard to any
inconsistent or conflicting Orders given by Borrower to Bank. Notwithstanding
the foregoing, unless and until Secured Party delivers to the Banking Office
Orders directing Bank not to act on Borrower's Orders ("Notice of Control"), and
until such time as the Secured Party revokes in writing such Notice of Control
(which the Secured Party shall promptly do once the applicable Event of Default
ceases to exist under the Credit Agreement, dated as of February , 2007 (the
"Credit Agreement"), among the Borrowers, the Secured Party and the other
parties thereto)), Bank may continue to comply with Orders originated by
Borrower. Secured Party may only deliver such Notice of Control during the
continuance of an Event of Default (as defined in the Credit Agreement). Bank
shall have no liability in the event Borrower breaches this covenant to Secured
Party.

                     

                    5.  Release of Security Interest; Termination of
Agreement. This Agreement shall remain in full force and effect
until Bank receives at the Banking Office Secured Party's written notice of
release of its interest in, or assignment to Borrower of, the Special Deposit
Account ("Secured Party's Release") (which the Secured Party agrees to deliver
upon the occurrence of the Discharge Date). Notwithstanding the foregoing, any
of Secured Party, Borrower or Bank may terminate this Agreement by giving 30
days' written notice to the other parties. However, in the event that the
Special Deposit Account is not handled in a satisfactory manner by any Borrower
or Secured Party, Bank reserves the right to terminate the Agreement upon 10
day's prior written notice to Borrower and Secured Party. Following such
termination Bank shall pay any balance of funds in the Special Deposit Account
to the Revenue Account (as defined in the Credit Agreement), or as otherwise
directed by, or with the approval of, Secured Party. Termination shall not
affect the duties or responsibilities of any party hereto arising out of
transactions occurring prior to termination.

                     

                    6.  Deposits by Borrower or Secured
Party. For so long as this Agreement remains in force, Bank may
accept for deposit into the Special Deposit Account, any checks, electronic or
paper
drafts, electronic payment orders and credits or other instruments for the
payment of money (as used in this Agreement, each an "Item" and collectively
"Items") payable or endorsed to Borrower, to Secured Party, to both of them, or
to cash or bearer, whether endorsed or unendorsed.

                     

                    
                      
                        
                        

                      

                      
                        7.02(i) – 2

                        
                          

                        

                      

                      
                        
                        

                      

                    

                     

                    7.  Wire
Transfers. Upon Bank's receipt of a written Notice of Control,
unless Secured Party directs Bank in writing to the contrary, Borrower, Secured
Party and Bank hereby agree Bank will wire, on each business day, collected
balances in the Special Deposit Account to the Revenue Account (as defined in
the Credit Agreement), or as otherwise designated in writing by the Secured
Party to Bank.

                     

                    Secured
Party and Borrower acknowledge notice that under the California Commercial Code
division 11-207(c)(2) if a beneficiary of a funds transfer is designated by both
name and account number the payment may be made according to the account number
even if the name and account number are inconsistent and identify different
parties.

                     

                    8.  Documentation. Secured Party
agrees that before it attempts to give Bank any orders or instructions
concerning withdrawals or transfers from the Special Deposit Account, Secured
Party shall deliver to the Banking Office such documentation as the Bank may
reasonably require to evidence the authority of persons acting on behalf of
Secured Party to give such instructions.

                     

                    9.  Bank's
Disclaimers; Scope. Secured Party and Borrower acknowledge and
agree that; (a) Bank makes no representations or warranties, express or implied,
concerning the validity, perfection, or priority of Secured Party's security
interest in the Special Deposit Account; and (b) this Agreement applies only to
the Special Deposit Account designated above, but not to any other deposit
account, securities, bills, bonds or investment which Borrower may now or
hereafter maintain with Bank.

                     

                    10.  Indemnification
of Bank by Borrower. Borrower agrees to defend, indemnify and hold
Bank, its directors, officers, employees, attorneys, successors and assigns,
harmless from and against any and all loss, liability, cost, damage and expense,
including, without limitation, legal and accounting fees and expenses, arising
in any manner whatsoever out of (a) the acts, errors or omissions of Borrower or
Secured Party or the agent of either; and (b) Bank's acting in accordance with
the provisions of this Agreement, excepting only liability occasioned solely by
Bank's gross negligence or willful misconduct. In no event shall any party
hereto be liable for any consequential, indirect, punitive, or special damage
relating to its performance of its duties under this Agreement.

                     

                    11.  Indemnification
of Bank by Secured Party. Secured Party agrees to indemnify,
release, and hold Bank, its directors, officers, employees, attorneys,
successors and assigns, harmless from and against any and all loss, liability,
cost, damage and expense including, without
limitation, legal and accounting fees and expenses, arising in any manner
whatsoever out of Bank's acting on any notice, orders or instructions concerning
the Special Deposit Account given to Bank by Secured Party.

                     

                     

                    
                      
                        
                        

                      

                      
                        7.02(i) – 3

                        
                          

                        

                      

                      
                        
                        

                      

                    

                     

                    12.  Bankruptcy;
Legal Process. In the event that Borrower becomes subject to
voluntary or involuntary proceedings under the U.S. Bankruptcy Code, or if the
Bank is served with legal process which the Bank in good faith believes affects
the Special Deposit Account, Bank shall have the right to place a hold on funds
deposited to the Special Deposit Account until such time as the Bank receives an
appropriate court order or other assurances satisfactory to Bank establishing
that the funds may be disbursed according to the provisions of this Agreement.
Bank shall immediately provide Borrower and Secured Party notice of any hold
placed by Bank under this paragraph.

                     

                    13.  Notices. Any notice given by
any party under this Agreement shall be effective only if (a) given in writing
and (b) personally delivered, sent by United States mail, postage prepaid, or
sent by telecopier or other authenticated message, charges prepaid and addressed
to the address set forth herein or in Bank's records for Borrower and Secured
Party, respectively. If notice is sent by telecopier, an originally executed
notice will be sent by overnight courier as a follow-up. Either Secured Party,
Borrower, or Bank may change the place to which notices, requests, and other
communications are to be sent by giving written notice of such change to the
others.

                     

                    Notwithstanding
the foregoing, Bank shall have no obligation to act upon any Orders, Notice of
Control, Secured Party's Release, or other notices or instructions given to Bank
hereunder until received in writing at the Banking Office address
below.

                     

                    [Insert
Notice Addresses]

                     

                    14.  Successors and Assigns; No
Third Party Rights; Entire Agreement; Amendments; California Law; Counterparts;
Captions; Non-Waiver; Rights Cumulative;
Corporate/Partnership  Authority. The provisions of this Agreement shall be
binding upon and inure to the benefit of Bank, Secured Party and Borrower and
their respective successors and assigns and to no other person, firm or entity;
provided, however, that no party hereto may assign any of its rights hereunder
without the other parties' prior written consent (except that a successor to
Secured Party as Collateral Agent under the Credit Agreement shall automatically
succeed to Secured Party's rights hereunder). This Agreement constitutes the
entire agreement between Bank, on the one hand, and Secured Party and Borrower
on the other hand, concerning the subject matter hereof. Except to the extent
inconsistent herewith, all other agreements between Bank and Secured Party or
Borrower concerning the Special Deposit Account shall remain in full force and
effect. This Agreement shall be construed and interpreted in accordance with
California law. This Agreement may be executed in counterparts, each of which
shall be an original, and all of which shall constitute but one and the same
instrument. Each person signing on behalf of a party hereto
warrants that such party has performed all corporate or partnership actions
necessary to make this Agreement a binding obligation, enforceable in accordance
with its terms. No modification, amendment or alteration of this Agreement will
be effective against any party hereto unless specifically agreed upon in a
writing signed by that party.

                     

                     

                    
                      
                        
                        

                      

                      
                        7.02(i) – 4

                        
                          

                        

                      

                      
                        
                        

                      

                    

                     

                    15.  Disputes. To the extent
permitted by law, in connection with any claim, cause of action, proceeding or
other dispute concerning the Special Deposit Account (each a "Claim"), the
parties to this Agreement, expressly, intentionally, and deliberately waive any
right each may otherwise have to trial by jury. In the event the waiver of jury
trial set forth in the previous sentence is not enforceable under the law
applicable to this Agreement, the parties to this Agreement agree that any
Claim, including any question of law or fact relating thereto, shall, at the
written request of any party, be determined by Judicial Reference pursuant to
the state law applicable to this Agreement ("Reference"). The parties shall
select a single neutral referee, who shall be a retired state or federal judge.
In the event that the parties cannot agree upon a referee, the court shall
appoint the referee. The referee shall report a statement of decision to the
court. Nothing in this paragraph shall limit the right of any party at any time
to exercise self-help remedies, foreclose against collateral or obtain
provisional remedies. The parties shall bear the fees and expenses of the
referee equally, unless the referee orders otherwise. The referee shall also
determine all issues relating to the applicability, interpretation, and
enforceability of this paragraph. The parties acknowledge that if a referee is
selected to determine the Claims, then the Claims will not be decided by
jury.

                     

                    16.  Termination. Unless
earlier terminated pursuant to Section 5 above, this Agreement will continue in
full force and effect until the Discharge Date (as defined in the Credit
Agreement). Termination shall not affect the duties or responsibilities of any
party hereto arising out of transactions occurring prior to
termination.

                    

                    

                    [Remainder
of this page intentionally left blank.]

                    

                    

                    

                    

                    

                    
                      
                        
                        

                      

                      
                        7.02(i) – 5

                        
                          

                        

                      

                      
                        
                        

                      

                    

                     

                    The
foregoing is hereby acknowledged and agreed to, effective this ___ day of
_________.

                     

                    
                      	
                              WestLB
      AG, New York Branch,

                            	
                              WestLB
      AG, New York Branch,

                            
	
                              as
      Collateral Agent for the Senior Secured Parties

                            	
                              as
      Collateral Agent for the Senior Secured Parties

                            
	
                              (SECURED
      PARTY)

                            	
                              (SECURED
      PARTY)

                            
	 
      	 
      
	
                              
                                By: _________________________

                              

                            	
                              
                                
                                  By:
      _______________________

                                

                              

                            
	
                              Name:

                            	
                              Name:

                            
	
                              Title:

                            	
                              Title:

                            
	
                              Date:
      _______________________

                            	
                              
                                Date:
      _____________________

                              

                            
	 
      	 
      
	 
      	 
      
	
                              [________________________]

                            	 
      
	
                              (BORROWER)

                            	 
      
	 
      	 
      
	
                              
                                By: _________________________

                              

                            	 
      
	
                              Name:

                            	 
      
	
                              Title:

                            	 
      
	
                              Date:
      _______________________

                            	 
      
	 
      	 
      
	 
      	 
      
	
                              [INSERT
      NAME OF LOCAL BANK] 

                              (BANK)

                            	
                              [INSERT
      NAME OF LOCAL BANK] 

                              (BANK)

                            
	 
      	 
      
	
                              
                                By:
      _________________________

                              

                            	
                              
                                By: _______________________

                              

                            
	
                              Name:

                            	
                              Name:

                            
	
                              Title:

                            	
                              Title:

                            
	
                              
                                Date:
      _______________________

                              

                            	
                              
                                
                                  Date:
      ______________________

                                

                              

                            

                    

                    

                    

                     

                    
                      
                        
                        

                      

                      
                        7.02(i) – 6

                        
                          

                        

                      

                      
                        
                        

                      

                    

                     

                    
                      EXHIBIT
7.02(s)

                      to Credit
Agreement

                      

                      [FORM
OF]

                      RESTRICTED PAYMENT
CERTIFICATE

                      

                      Date:
[_____  __, ____]

                      

                      [ACCOUNTS
BANK]

                      

                      [ADDRESS]

                       

                      Reference
is made to Section 7.02(s) and [8.08(c)] [8.13(b)] of the Credit Agreement (as
amended, supplemented or otherwise modified from time to time, the "Credit
Agreement"), dated as of February [__], 2007, 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, PACIFIC ETHANOL IMPERIAL, 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 Borrowers'
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, UNION BANK OF CALIFORNIA, N.A.,
as Accounts Bank, WESTLB AG, NEW YORK BRANCH, as Lead Arranger and Sole
Bookrunner, MIZUHO CORPORATE BANK, LTD., as Lead Arranger and Co-Syndication
Agent, CIT CAPITAL SECURITIES LLC, as Lead Arranger and Co-Syndication Agent,
COOPERATIEVE CENTRALE RAIFFEISEN­BOERENLEENBANK B.A., "RABOBANK NEDERLAND",
NEW YORK BRANCH, as Lead Arranger and Co-Documentation Agent, and BANCO
SANTANDER CENTRAL HISPANO S.A, NEW YORK BRANCH, as Lead Arranger and
Co-Documentation Agent.

                       

                      Capitalized
terms used herein but not otherwise defined herein shall have the respective
meaning set forth in the Credit Agreement.

                      

                      The
Borrowers hereby direct the Accounts Bank to withdraw and pay from the account
entitled [____], No. [____] [(the "Revenue Account")] [(the "Prepayment
Holding Account")], on [_____], 20[__]
(the "Restricted Payment Date"), the
amounts and to the payees, in each case as set forth on Schedule 1 attached
hereto.

                       

                      In
support of such direction, the undersigned, on behalf of the Borrowers, hereby
represents and certifies, as of the date hereof and as of the Restricted Payment
Date, as follows:

                       

                      (a)  The undersigned
is an Authorized Officer of the Borrowers' Agent.

                       

                      (b)  The Conversion
Date has occurred.

                       

                      
                        
                          
                          

                        

                        
                          
                            7.02(s) -
1

                          

                          
                            

                          

                        

                        
                          
                          

                        

                      

                       

                      (c)  This Restricted
Payment Certificate is being delivered to the Accounts Bank with a copy to the
Administrative Agent not later than 12:00 noon New York City time on the
Restricted Payment Date, and the Restricted Payment Date is a Quarterly Payment
Date or another Business Day that is within thirty (30) days following a
Quarterly Payment Date.

                       

                      (d)  All conditions
set forth in the Credit Agreement (including Section 7.02(s)) for the
withdrawal(s) requested hereby have been satisfied.

                       

                      (e)  No Notice of
Suspension is in effect and no Default or Event of Default has occurred and is
continuing or would occur as a result of the Restricted Payment(s) to be made
with the proceeds of the withdrawals requested hereby.

                       

                      (f)  The
Debt Service Reserve Account is fully funded in the amount of the Debt
Service Reserve Requirement. The Working Capital Reserve Account is fully funded
in the amount of the Working Capital Reserve Required Amount, if
any.

                       

                      (g)  Each of the
Historical Debt Service Coverage Ratio and the Prospective Debt Service Coverage
Ratio, calculated as of the current Quarterly Payment Date, is greater than or
equal to 1.5:1, and a detailed calculation of such Historical Debt Service
Coverage Ratio and such Prospective Debt Service Coverage Ratio is set forth in
Schedule 2
attached hereto.

                       

                      (h)  The most recent
update of the Operating Budgets required pursuant to Section 7.01(j) (Affirmative
Covenants - Operating Budget) of the Credit Agreement has been approved
by the Administrative Agent.

                       

                      [(i)  All
of the transfers and payments set forth in priorities first through fourteenth of Section 8.08(c)
of the Credit Agreement have been made, or will be made, before the consummation
of the withdrawals requested hereby and in accordance with the terms of each
Revenue Account Withdrawal Certificate issued or to be issued as of the
Restricted Payment Date.]1

                       

                      The
undersigned officer is executing this Restricted Payment Certificate not in an
individual capacity but in its capacity as an Authorized Officer of the
Borrower's Agent.

                       

                      [The
remainder of this page is intentionally blank. The next page is the signature
page.]

                       

                      CC:
ADMINISTRATIVE AGENT

                      

                      _____________________________________

                       

                      1 To be
included only in certificates issued in connection with transfers pursuant to
Section 8.08(c)(xv) of the Credit Agreement.

                      

                      

                      
                        
                          
                          

                        

                        
                          7.02(s) -
2

                          
                            

                          

                        

                        
                          
                          

                        

                      

                      

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

                      

                       

                      
                        	 	PACIFIC
      ETHANOL HOLDING CO. LLC, 

                                as
      Borrowers' Agent

                                

                                By: 
      _________________________________

                                Name:

                                Title:

                              

                      

                       

                       

                    

                     

                    
                      

                      
                        
                          
                          

                        

                        
                          7.02(s) -
3

                          
                            

                          

                        

                        
                          
                          

                        

                      

                      

                      Schedule
1 to

                      Restricted Payment
Certificate

                       

                      WITHDRAWALS [REVENUE
ACCOUNT] [PREPAYMENT HOLDING ACCOUNT]

                      

                      [details
to be attached]

                      
 

                      I.  Withdrawals
from [Revenue Account] [Prepayment Holding Account] for the making of
Restricted
Payments.

                      

                      

                      
                        	
                                Payee

                              	
                                Amount

                              	
                                Wire Instructions

                              	 
	 	 	 	 
	 
      	
                                $

                              	 
      	 

                      

                      

                       

                       

                      
                        
                          
                          

                        

                        
                          7.02(s) -
Schedule 1

                          
                            

                          

                        

                        
                          
                          

                        

                      

                      
Schedule
2 to

                      Restricted Payment
Certificate

                       

                      HISTORICAL DEBT SERVICE
COVERAGE RATIO AND PROSPECTIVE

                      DEBT SERVICE COVERAGE RATIO
CALCULATIONS

                      

                      

                      

                      

                  
                    
                      
                      

                    

                    
                      7.02(s) - Schedule 2

                      
                        

                      

                    

                    
                      
                      

                    

                  

                

              

               

              
                EXHIBIT
7.03(g)

                to Credit
Agreement

                 

                 

                FORM
OF MONTHLY

                PROGRESS
REPORT

                 

                 

                Monthly
Progress Report

                with
respect to the

                [Stockton]
[Brawley] [Burley]

                Ethanol
Plant,

                 

                Delivered
to

                WESTLB AG, NEW YORK
BRANCH,

                as Administrative Agent for
the Lenders

                 

                and

                 

                [______________]

                as
Independent Engineer for the Lenders

                 

                 

                [Date]

                

                

                

                

                 

                
                  
                    
                    

                  

                  
                    7.03(g) – 1

                    
                      

                    

                  

                  
                    
                    

                  

                

                

                Section
1.  GENERAL
PROVISIONS

                

                Reference
is made to Section 7.03(g) of the Credit Agreement (as amended, supplemented or
otherwise modified from time to time, the "Credit Agreement"), dated as of
February [__], 2007, 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,
PACIFIC ETHANOL IMPERIAL, 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 Borrowers' 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, UNION BANK OF CALIFORNIA, N.A., as Accounts Bank, WESTLB AG,
NEW YORK BRANCH, as Lead Arranger and Sole Bookrunner, MIZUHO CORPORATE BANK,
LTD., as Lead Arranger and Co-Syndication agent, CIT CAPITAL SECURITIES LLC, as
Lead Arranger and Co-Syndication Agent, COOPERATIEVE CENTRALE
RAIFFEISEN­BOERENLEENBANK B.A., "RABOBANK NEDERLAND", NEW YORK BRANCH, as
Lead Arranger and Co-Documentation Agent, and BANCO SANTANDER CENTRAL HISPANO
S.A, NEW YORK BRANCH, as Lead Arranger and co-documentation agent. Capitalized
terms used herein but not otherwise defined herein shall have the respective
meanings set forth in the Credit Agreement.

                 

                Pursuant
to Section 7.03(g) of the Credit Agreement, within five (5) days following the
end of each calendar month until the Conversion Date, the Borrowers are required
to deliver a Monthly Progress Report to the Administrative Agent for each
Greenfield Plant with respect to which any Funding has been made.

                 

                The
Borrowers have reviewed the status of each significant aspect of construction
and development for the [Stockton] [Brawley] [Burley] Plant as of the date of
this report. The Borrowers have [not identified any matters that could
reasonably be expected to adversely affect the Construction Schedule for such
Plant, or the ability of such Plant to achieve its Commercial Operation Date on
or before the Conversion Date Certain] [identified the following matters which,
in the Borrowers' reasonable judgment, are expected to adversely affect the
Construction Schedule for such Plant, or the ability of such Plant to achieve
its Commercial Operation Date on or before the Conversion Date
Certain:].

                

                

                 

                
                  
                    
                    

                  

                  
                    7.03(g) – 2

                    
                      

                    

                  

                  
                    
                    

                  

                

                

                SECTION
2.  CONSTRUCTION
OVERVIEW

                

                2.1.
Major activities to be performed for each aspect of the Project during the
current calendar month.

                

                Please
provide a brief summary of the Major1
activities to be performed for each of the following aspects of the [Stockton]
[Brawley] [ Burley] during the current calendar month:

                

                2.1.1
Design

                

                2.1.2
Property Acquisition

                

                2.1.3
Engineering

                

                2.1.4
Major Equipment procurement

                

                2.1.5
Construction

                

                2.1.6.
Utility Interconnections

                

                2.1.7.
Permitting (See Section 3.0 below)

                

                2.1.8.
O&M Mobilization

                

                2.1.9.
Startup Testing and Commissioning

                

                2.1.10.
Miscellaneous

                

                2.2.
Major activities scheduled to be performed in the previous calendar month but
not completed as scheduled.

                 

                ________________________________

                 

                1    For Purposes
of this report, "Major" shall mean any activity, event, or occurrence which may
have a
material adverse effect on the construction of the [Stockton] [Brawley] [Burley]
Plant or completion of the Project on a timely basis if such activity, event, or
occurrence occurs or if such activity, event, or occurrence fails to occur as
anticipated or scheduled, which material adverse effect includes, but is not
limited to, the inability to achieve the Commercial Operation Date on or before
the Conversion Date Certain.

                

                

                 

                
                  
                    
                    

                  

                  
                    7.03(g) – 3

                    
                      

                    

                  

                  
                    
                    

                  

                

                

                Please
provide a brief summary of the Major activities that were scheduled to be
performed in the previous calendar month and their status, including those
activities that were not completed as scheduled:

                

                2.2.1
Design

                

                2.2.2
Property Acquisition

                

                2.2.3
Engineering

                

                2.2.4
Major Equipment procurement

                

                2.2.5
Construction

                

                2.2.6
Utility Interconnections

                

                2.2.7
Permitting

                

                2.2.8
O&M Mobilization

                

                2.2.9
Startup Testing and Commissioning

                

                2.2.10
Miscellaneous

                

                2.3.  Critical
Path Items.

                

                Please
provide a detailed list of all critical path construction work for the current
calendar month, including a comparison of the current construction progress as
compared against the baseline Construction Schedule.

                

                [___________________________]

                

                2.3.  Construction
Schedule.

                 

                Please
provide a detailed schedule for construction work for the current calendar
month.

                

                [______________________]

                 

                SECTION
3.  PERMITTING

                 

                The
following describes each of the Necessary Project Approvals required for the
construction of the [Stockton] [Brawley] [Burley] Plant and the status
thereof

                

                

                
                  
                    
                    

                  

                  
                    7.03(g) – 4

                    
                      

                    

                  

                  
                    
                    

                  

                

                

                 

                
                  	
                          GOVERNMENTAL
      APPROVALS

                        	
                          STATUS

                        
	 
      	 
      
	 
      	 
      
	 
      	 
      
	 
      	 
      
	 
      	 
      
	 
      	 
      
	 
      	 
      

                

                

                 

                SECTION
4.  SAFETY AND HEALTH
REPORTS

                

                4.1.
 Please list all
accidents from the previous calendar month:

                

                4.2.  Please
list any work stoppage from the previous calendar month:

                

                Please
described any impact on construction of the [Stockton] [Brawley] [Burley] Plant
resulting from any such accidents or work stoppage.

                 

                 

                [The
remainder of this page is intentionally blank. The next page is the signature
page.]

                

                

                 

                
                  
                    
                    

                  

                  
                    7.03(g) – 5

                    
                      

                    

                  

                  
                    
                    

                  

                

                

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

                 

                 

                
                  	 	
                          PACIFIC
      ETHANOL HOLDING CO. LLC,

                          as
      Borrowers' Agent

                          

                          By: 
      ___________________________________

                          Name:

                          Title:

                        

                

                 

                

                

                

                 

                
                  
                    
                    

                  

                  
                    7.03(g) – 6

                    
                      

                    

                  

                  
                    
                    

                  

                

                

                  EXHIBIT
7.03(n)

                   to Credit
Agreement

                   

                  [FORM
OF]

                  BORROWING BASE
CERTIFICATE

                  

                  [DATE]

                  

                  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_agency services@westlb.com

                  

                  This
Borrowing Base Certificate is furnished pursuant to Section 7.03(n) of the
Credit Agreement dated as of February ____________, 2007 (as amended, restated,
supplemented or otherwise modified from time to time, the "Credit
Agreement"), by and among Pacific Ethanol Holding Co. LLC, a
Delaware limited liability company ("Pacific Holding"), Pacific
Ethanol Madera LLC, a Delaware limited liability company ("Madera"), Pacific
Ethanol Columbia, LLC, a Delaware limited liability company ("Boardman"), Pacific Ethanol
Stockton, LLC, a Delaware limited liability company ("Stockton"), Pacific Ethanol
Imperial, LLC, a Delaware limited liability company ("Brawley") and Pacific Ethanol
Magic Valley, LLC, a Delaware limited liability company ("Burley" and, together with
Pacific Holding, Madera, Boardman, Stockton, and Brawley, the "Borrowers"), Pacific Holding,
as Borrowers' 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, UNION BANK OF
CALIFORNIA, N.A., as Accounts Bank, WESTLB AG, NEW YORK BRANCH, as Lead Arranger
and Sole Bookrunner, MIZUHO CORPORATE BANK, LTD., as Lead Arranger and
Co-Syndication Agent, CIT CAPITAL SECURITIES LLC, as Lead Arranger and
Co-Syndication Agent, COOPERATIEVE CENTRALE RAIFFEISEN-BOERENLEENBANK B.A.,
"RABOBANK NEDERLAND", NEW YORK BRANCH, as Lead Arranger and Co-Documentation
Agent, and BANCO SANTANDER CENTRAL HISPANO S.A, NEW YORK BRANCH, as Lead
Arranger and Co-Documentation Agent.

                   

                   

                  
                    
                      
                      

                    

                    
                      7.03(n) – 1

                      
                        

                      

                    

                    
                      
                      

                    

                  

                   

                  Capitalized
terms used herein but not otherwise defined herein shall have the respective
meanings set forth in the Credit Agreement.

                   

                  This
Borrowing Base Certificate sets forth the Borrowing Base for [Madera] [Boardman]
[Stockton] [Brawley] [Burley] as of the date hereof.

                   

                  ACCOUNTS
FOR [insert name of relevant Plant]:1

                  

                  
                    	
                            1.    All
      Eligible Accounts

                          	
                            $__________

                          
	 	 
	
                            2.    Less:
      ineligible accounts

                          	 
      
	 	 
	
                            a)    reserves

                          	
                            $__________

                          
	 	 
	
                            b)    maximum
      discounts

                          	
                            $__________

                          
	 	 
	
                            c)    credits

                          	
                            $__________

                          
	 	 
	
                            d)    allowances

                          	
                            $__________

                          
	 
      	 
      
	
                            3.   Total ineligible accounts (sum of
      line 2a through 2d)

                          	
                            $__________

                          
	 	 
	
                            4.   Total Eligible Accounts (line 1 —
      line 3)

                          	
                            $__________

                          

                  

                   

                  INVESTORY
FOR [Insert Name of Relevant Plant]:1

                  

                  
                    	
                            5.    All
      Eligible Inventory

                          	
                            $__________

                          
	 	 
	
                            6.   Less: ineligible
      inventory

                          	 
      
	 	 
	
                            a)    reserves

                          	
                            $__________

                          
	 	 
	
                            b)    maximum
      discounts

                          	
                            $__________

                          
	 	 
	
                            c)    credits

                          	
                            $__________

                          
	 	 
	
                            d)    allowances

                          	
                            $__________

                          
	 	 
	
                            7.   Total ineligible inventory (sum
      of line 6a through 6d)

                          	
                            $__________

                          
	 	 
	
                            8.   Total Eligible Inventory (line 5
      — line 7)

                          	
                            $__________

                          

                  

                  

                  _________________________

                  1
Calculations herein to be made separately for each relevant Plant.

                  

                  

                  
                    
                      
                      

                    

                    
                      7.03(n) – 2

                      
                        

                      

                    

                    
                      
                      

                    

                  

                   

                  TOTAL
BORROWING BASE FOR [Insert Name of Relevant Plant]:1

                  

                  
                    	
                            80%
      x (line 4 + line 8)

                          	
                            $__________

                          

                  

                   

                   

                  
                    	
                            AGGREGATE
      TOTAL BORROWING BASE FOR ALL PLANTS

                          	
                            $__________

                          

                  

                   

                  The
undersigned hereby represent, warrant and certify to the Administrative Agent
that the information set forth above is true and correct.

                   

                  The
undersigned officers are executing this Borrowing Base Certificate not in their
individual capacities but in their capacities as Authorized Officers of the
Borrowers.

                   

                  
                  

                   

                  
                    	 	
                            PACIFIC ETHANOL HOLDING CO.
      LLC, 

                            as
      Borrowers' Agent

                            

                            By: 
      _________________________________

                            Name:

                            Title:

                            

                            [Insert Name of
      Borrower2], 

                            as
      Borrower

                            

                            By: 
      _________________________________

                            Name:

                            Title:

                          

                  

                   

                  
_________________________
2  "Borrower"
refers to the Borrower whose Borrowing Base is being calculated
herein.

                  

                   

                  
                    
                      
                      

                    

                    
                      7.03(n) – 3

                      
                        

                      

                    

                    
                      
                      

                    

                  

                   

                  EXHIBIT
7.03(p)

                  to Credit
Agreement

                   

                   

                  [FORM
OF]

                  OPERATING
STATEMENT

                  
                     

                    WestLB
AG, New York Branch,

                    as
Administrative Agent for the Lenders

                    1211 Ave
of Americas

                    NY, New
York 10036

                    Attention:
Yolette Salnave / Andrea Bailey

                    Facsimile:
212-302-7946

                    Email:
ny_agency services@westlb.com

                     

                    Date:
[____________________]

                     

                    Reference
is hereby made to the Credit Agreement, dated as of February_____, 2007 (as
amended, restated, supplemented or otherwise modified from time to
time, the "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, PACIFIC ETHANOL IMPERIAL,
LLC, a Delaware limited liability company and PACIFIC ETHANOL MAGIC VALLEY, LLC,
a Delaware limited liability company (the "Borrowers"), PACIFIC ETHANOL
HOLDING CO. LLC, as Borrowers' 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, UNION BANK OF CALIFORNIA, as Accounts Bank, WESTLB AG, NEW YORK BRANCH,
as Lead Arranger and Sole Bookrunner, MIZUHO CORPORATE BANK, LTD., as Lead
Arranger and Co-Syndication Agent, CIT CAPITAL SECURITIES LLC, as Lead Arranger
and Co-Syndication Agent, COOPERATIEVE CENTRALE RAIFFEISEN-BOERENLEENBANK B.A.,
"RABOBANK NEDERLAND",
NEW YORK BRANCH, as Lead Arranger and Co-Documentation Agent, and BANCO
SANTANDER CENTRAL HISPANO S.A, NEW YORK BRANCH, as Lead Arranger and
Co-Documentation Agent. Capitalized terms used herein but not defined herein
shall have the respective meanings assigned to such terms in the Credit
Agreement.

                     

                    The
Borrowers hereby represent and certify as follows:

                     

                    
                      
                        
                        

                      

                      
                        7.03(p) -
1

                        
                          

                        

                      

                      
                        
                        

                      

                    

                     

                    1.    This
Operating Statement is the Operating Statement described in the
Credit Agreement, and it is delivered to the Administrative Agent pursuant to
Section 7.03(p) of the Credit Agreement.

                     

                    2.    The
individual executing this Operating Statement is an Authorized
Officer of the Borrowers' Agent.

                     

                    3.    This
Operating Statement is being delivered to the Administrative Agent
within forty-five (45) days after the end of the Fiscal Quarter ending on
[_____], 20[__].

                     

                    4.    The ethanol,
Distillers Grains, and other products produced and sold [[by
each Plant] by [Madera] [Boardman] [Stockton] [Brawley] [Burley]] during the
periods noted below are as follows:

                     

                    
                      
                        
                        

                      

                      
                        7.03(p) -
2

                        
                          

                        

                      

                      
                        
                        

                      

                       

                    

                    
                      	 
      	
                              Most
      Recent

                              Fiscal
      Quarter

                            	
                              Month
      1 of

                              Most
      Recent

                              Fiscal
      Quarter

                            	
                              Month
      2 of

                              Most
      Recent

                              Fiscal
      Quarter

                            	
                              Month
      3 of

                              Most
      Recent

                              Fiscal
      Quarter

                            	
                              Year-to-Date

                              [Note: only
      for

                              year-end
      statements]

                            	 
      
	 
      	
                              Actual

                            	
                              Budget

                            	
                              Actual

                            	
                              Budget

                            	
                              Actual

                            	
                              Budget

                            	
                              Actual

                            	
                              Budget

                            	
                              Actual

                            	
                              Budget

                            	
                              Variance

                            
	
                              AMOUNT
      OF ETHANOL PRODUCED BY:

                            	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	
                              MADERA

                            	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	
                              BOARDMAN

                            	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	
                              STOCKTON

                            	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	
                              BRAWLEY

                            	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	
                              BURLEY

                            	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	AMOUNT
      OF DISTILLERS GRAINS PRODUCED:	 	 	 	 	 	 	 	 	 	 	 
	       
      MADERA 	 	 	 	 	 	 	 	 	 	 	 
	      
       BOARDMAN	 	 	 	 	 	 	 	 	 	 	 
	      
       STOCKTON	 	 	 	 	 	 	 	 	 	 	 
	        BRAWLEY	 	 	 	 	 	 	 	 	 	 	 
	       
      BURLEY	 	 	 	 	 	 	 	 	 	 	 
	
                              AMOUNT
      OF OTHER PRODUCTS
      PRODUCED BY:

                            	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	
                              MADERA

                            	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	
                              BOARDMAN

                            	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	
                              STOCKTON

                            	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	
                              BRAWLEY

                            	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	
                              BURLEY

                            	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	
                              AMOUNT
      OF ETHANOL

                            	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      

                    

                    

                    
                      
                        
                        

                      

                      
                        7.03(p) -
3

                        
                          

                        

                      

                      
                        
                        

                      

                       

                    

                    
                      	 
      	
                              Most
      Recent

                              Fiscal
      Quarter

                            	
                              Month
      1 of

                              Most
      Recent

                              Fiscal
      Quarter

                            	
                              Month
      2 of

                              Most
      Recent

                              Fiscal
      Quarter

                            	
                              Month
      3 of

                              Most
      Recent

                              Fiscal
      Quarter

                            	
                              Year-to-Date

                              [Note:
      only for

                              year-end
      statements]

                            	 
      
	 
      	
                              Actual

                            	
                              Budget

                            	
                              Actual

                            	
                              Budget

                            	
                              Actual

                            	
                              Budget

                            	
                              Actual

                            	
                              Budget

                            	
                              Actual

                            	
                              Budget

                            	
                              Variance

                            
	
                              SOLD
      BY:

                            	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	
                                  MADERA

                              Pursuant
      to Ethanol Offtake Agreements

                            	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	
                                  BOARDMAN

                              Pursuant
      to Ethanol Offtake Agreements

                            	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	
                                  STOCKTON

                              Pursuant
      to Ethanol Of take Agreements

                            	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	
                                  BRAWLEY

                              Pursuant
      to Ethanol Offtake Agreements

                            	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	
                                  BURLEY

                              Pursuant
      to Ethanol Offtake Agreements

                            	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	
                              AMOUNT
      OF DISTILLERS GRAINS SOLD BY:

                            	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	
                                  MADERA

                            	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      

                    

                    

                    
                      
                        
                        

                      

                      
                        7.03(p) -
4

                        
                          

                        

                      

                      
                        
                        

                      

                       

                    

                    
                      	 
      	
                              Most
      Recent

                              Fiscal
      Quarter

                            	
                              Month
      1 of

                              Most
      Recent

                              Fiscal
      Quarter

                            	
                              Month
      2 of

                              Most
      Recent

                              Fiscal
      Quarter

                            	
                              Month
      3 of

                              Most
      Recent

                              Fiscal
      Quarter

                            	
                              Year-to-Date

                              [Note:
      only for

                              year-end
      statements]

                            	 
      
	 
      	
                              Actual

                            	
                              Budget

                            	
                              Actual

                            	
                              Budget

                            	
                              Actual

                            	
                              Budget

                            	
                              Actual

                            	
                              Budget

                            	
                              Actual

                            	
                              Budget

                            	
                              Variance

                            
	
                              Pursuant
      to DG Offtake Agreements

                            	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	
                                  BOARDMAN

                              Pursuant
      to DG Offtake Agreements

                            	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	
                                  STOCKTON

                              Pursuant to DG Offtake
      Agreements

                            	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	
                                  BRAWLEY

                              Pursuant to DG Offtake
      Agreements

                            	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	
                                  BURLEY

                              Pursuant
      to DG Offtake Agreements

                            	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	
                              THE
      AMOUNT, IF ANY, OF OTHER SALES OF ETHANOL AND/OR DISTILLERS GRAINS
      BY:

                            	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	
                                  MADERA

                            	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	
                                  BOARDMAN

                            	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      

                    

                     

                    
                      
                        
                        

                      

                      
                        7.03(p) -
5

                        
                          

                        

                      

                      
                        
                        

                      

                    

                     

                    
                      	 
      	
                              Most
      Recent

                              Fiscal
      Quarter

                            	
                              Month
      1 of

                              Most
      Recent

                              Fiscal
      Quarter

                            	
                              Month
      2 of

                              Most
      Recent

                              Fiscal
      Quarter

                            	
                              Month
      3 of

                              Most
      Recent

                              Fiscal
      Quarter

                            	
                              Year-to-Date

                              [Note: only
      for

                              year-end
      statements]

                            	 
      
	 
      	
                              Actual

                            	
                              Budget

                            	
                              Actual

                            	
                              Budget

                            	
                              Actual

                            	
                              Budget

                            	
                              Actual

                            	
                              Budget

                            	
                              Actual

                            	
                              Budget

                            	
                              Variance

                            
	
                              STOCKTON

                            	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	
                              BRAWLEY

                            	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	
                              BURLEY

                            	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	
                              THE
      AMOUNT, IF ANY, OF SALES OF OTHER PRODUCTS BY:

                            	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	
                              MADERA

                            	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	
                              BOARDMAN

                            	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	
                              STOCKTON

                            	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	
                              BRAWLEY

                            	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	
                              BURLEY

                            	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      

                    

                    

                    
                      
                        
                        

                      

                      
                        7.03(p) -
6

                        
                          

                        

                      

                      
                        
                        

                      

                    

                     

                    5.    The actual
expenses reflected in the chart below for each month, quarter and (if
applicable) the year to date do not
exceed the provision for such period contained in the Operating Budget currently
in effect [if this
certification cannot be made, Borrowers' Agent to provide detailed
explanation].

                     

                    [Note:
the categories set forth in the chart below are by way of example only, and will
be updated or revised when this Operating Statement is delivered from time to
time to conform to the then-effective Operating Budget]

                     

                    
                      	 
      	
                              Most
      Recent

                              Fiscal
      Quarter

                            	
                              Month
      1 of

                              Most
      Recent

                              Fiscal
      Quarter

                            	
                              Month
      2 of

                              Most
      Recent

                              Fiscal
      Quarter

                            	
                              Month
      3 of

                              Most
      Recent

                              Fiscal
      Quarter

                            	
                              Year-to-Date

                              [Note: only
      for

                              year-end
      statements]

                            	 
      
	 
      	
                              Actual

                            	
                              Budget

                            	
                              Actual

                            	
                              Budget

                            	
                              Actual

                            	
                              Budget

                            	
                              Actual

                            	
                              Budget

                            	
                              Actual

                            	
                              Budget

                            	
                              Variance

                            
	
                              OPERATION
      AND MAINTENANCE EXPENSES FOR THE PLANTS

                            	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	
                              MADERA

                            	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	
                              BOARDMAN

                            	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	
                              STOCKTON

                            	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	
                              BRAWLEY

                            	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	
                              BURLEY

                            	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	
                              Expenses
      of administering, managing and operating the Plants

                            	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	
                              MADERA

                            	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	
                              BOARDMAN

                            	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	
                              STOCKTON

                            	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	
                              BRAWLEY

                            	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	
                              BURLEY

                            	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      

                    

                    

                    
                      
                        
                        

                      

                      
                        7.03(p) -
7

                        
                          

                        

                      

                      
                        
                        

                      

                    

                     

                    
                      	 
      	
                              Most
      Recent

                              Fiscal
      Quarter

                            	
                              Month
      1 of

                              Most
      Recent

                              Fiscal
      Quarter

                            	
                              Month
      2 of

                              Most
      Recent

                              Fiscal
      Quarter

                            	
                              Month
      3 of

                              Most
      Recent

                              Fiscal
      Quarter

                            	
                              Year-to-Date

                              [Note: only
      for

                              year-end
      statements]

                            	 
      
	 
      	
                              Actual

                            	
                              Budget

                            	
                              Actual

                            	
                              Budget

                            	
                              Actual

                            	
                              Budget

                            	
                              Actual

                            	
                              Budget

                            	
                              Actual

                            	
                              Budget

                            	
                              Variance

                            
	
                              BURLEY

                            	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	
                              Expenses
      for maintaining the Plants in good repair and operating
      condition

                            	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	
                              MADERA

                            	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	
                              BOARDMAN

                            	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	
                              STOCKTON

                            	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	
                              BRAWLEY

                            	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	
                              BURLEY

                            	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	
                              Costs
      associated with supply and transportation of all supplies and raw
      materials to the Plants

                            	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	
                              MADERA

                            	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	
                              BOARDMAN

                            	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	
                              STOCKTON

                            	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	
                              BRAWLEY

                            	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	
                              BURLEY

                            	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	
                              Costs
      associated with supply and transportation of all supplies and raw
      materials to the Plants

                            	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	
                              MADERA

                            	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	
                              BOARDMAN

                            	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	
                              STOCKTON

                            	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	
                              BRAWLEY

                            	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	
                              BURLEY

                            	 	 	 	 	 	 	 	 	 	 	 

                    

                     

                    
                      
                        
                        

                      

                      
                        7.03(p) -
8

                        
                          

                        

                      

                      
                        
                        

                      

                    

                    

                    
                      	 
      	
                              Most
      Recent

                              Fiscal
      Quarter

                            	
                              Month
      1 of

                              Most
      Recent

                              Fiscal
      Quarter

                            	
                              Month
      2 of

                              Most
      Recent

                              Fiscal
      Quarter

                            	
                              Month
      3 of

                              Most
      Recent

                              Fiscal
      Quarter

                            	
                              Year-to-Date

                              [Note:
      only for

                              year-end
      statements]

                            	 
      
	 
      	
                              Actual

                            	
                              Budget

                            	
                              Actual

                            	
                              Budget

                            	
                              Actual

                            	
                              Budget

                            	
                              Actual

                            	
                              Budget

                            	
                              Actual

                            	
                              Budget

                            	
                              Variance

                            
	
                              Insurance
      Costs [(other than insurance premiums that are paid as Project
      Costs)]

                            	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	
                              MADERA

                            	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	
                              BOARDMAN

                            	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	
                              STOCKTON

                            	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	
                              BRAWLEY

                            	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	
                              BURLEY

                            	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	
                              Property,
      sales and franchise taxes (other than taxes imposed on or measured by
      income or receipts) or payment in lieu of such taxes
      with respect to the Plants

                            	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	
                              MADERA

                            	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	
                              BOARDMAN

                            	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	
                              STOCKTON

                            	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	
                              BRAWLEY

                            	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	
                              BURLEY

                            	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	
                              Costs
      and fees regarding Necessary Project Approvals incurred on or after the
      Closing Date for all Plants

                            	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      

                    

                    

                    
                      
                        
                        

                      

                      
                        7.03(p) -
9

                        
                          

                        

                      

                      
                        
                        

                      

                    

                     

                    
                      	 
      	
                              Most
      Recent

                              Fiscal
      Quarter

                            	
                              Month
      1 of

                              Most
      Recent

                              Fiscal
      Quarter

                            	
                              Month
      2 of

                              Most
      Recent

                              Fiscal
      Quarter

                            	
                              Month
      3 of

                              Most
      Recent

                              Fiscal
      Quarter

                            	
                              Year-to-Date

                              [Note:
      only for

                              year-end
      statements]

                            	 
      
	 
      	
                              Actual

                            	
                              Budget

                            	
                              Actual

                            	
                              Budget

                            	
                              Actual

                            	
                              Budget

                            	
                              Actual

                            	
                              Budget

                            	
                              Actual

                            	
                              Budget

                            	
                              Variane

                            
	
                              MADERA

                            	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	
                              BOARDMAN

                            	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	
                              STOCKTON

                            	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	
                              BRAWLEY

                            	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	
                              BURLEY

                            	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	
                              Legal,
      accounting and other professional fees attendant to any of the foregoing
      items

                            	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	
                              MADERA

                            	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	
                              BOARDMAN

                            	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	
                              STOCKTON

                            	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	
                              BRAWLEY

                            	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	
                              BURLEY

                            	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	
                              Costs
      incurred pursuant to Swap Contracts

                            	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	
                              MADERA

                            	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	
                              BOARDMAN

                            	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	
                              STOCKTON

                            	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	
                              BRAWLEY

                            	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	
                              BURLEY

                            	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	
                              Other
      costs and expenses included in the Operating Budget

                            	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	
                              MADERA

                            	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	
                              BOARDMAN

                            	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      

                    

                    

                    
                      
                        
                        

                      

                      
                        7.03(p) -
10

                        
                          

                        

                      

                      
                        
                        

                      

                    

                     

                    
                      	 
      	
                              Most
      Recent

                              Fiscal
      Quarter

                            	
                              Month
      1 of

                              Most
      Recent

                              Fiscal
      Quarter

                            	
                              Month
      2 of

                              Most
      Recent

                              Fiscal
      Quarter

                            	
                              Month
      3 of

                              Most
      Recent

                              Fiscal
      Quarter

                            	
                              Year-to-Date

                              [Note: only
      for year-end statements]

                            	 
      
	 
      	
                              Actual

                            	
                              Budget

                            	
                              Actual

                            	
                              Budget

                            	
                              Actual

                            	
                              Budget

                            	
                              Actual

                            	
                              Budget

                            	
                              Actual

                            	
                              Budget

                            	
                              Variance

                            
	
                              STOCKTON

                            	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	
                              BRAWLEY

                            	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	
                              BURLEY

                            	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	
                              MAINTENANCE
      CAPITAL EXPENSES

                            	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	
                              MADERA

                            	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	
                              BOARDMAN

                            	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	
                              STOCKTON

                            	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	
                              BRAWLEY

                            	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	
                              BURLEY

                            	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	
                              REVENUE

                            	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	
                              MADERA

                            	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	
                              BOARDMAN

                            	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	
                              STOCKTON

                            	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	
                              BRAWLEY

                            	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	
                              BURLEY

                            	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	
                              Total
      Revenue

                            	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	
                              MADERA

                            	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	
                              BOARDMAN

                            	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	
                              STOCKTON

                            	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	
                              BRAWLEY

                            	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	
                              BURLEY

                            	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      

                    

                    

                    
                      
                        
                        

                      

                      
                        7.03(p) -
11

                        
                          

                        

                      

                      
                        
                        

                      

                    

                     

                    
                      
                        
                          	 
      	
                                  Most
      Recent

                                  Fiscal
      Quarter

                                	
                                  Month
      1 of

                                  Most
      Recent

                                  Fiscal
      Quarter

                                	
                                  Month
      2 of

                                  Most
      Recent

                                  Fiscal
      Quarter

                                	
                                  Month
      3 of

                                  Most
      Recent

                                  Fiscal
      Quarter

                                	
                                  Year-to-Date

                                  [Note: only
      for

                                  year-end
      statements]

                                	 
      
	 
      	
                                  Actual

                                	
                                  Budget

                                	
                                  Actual

                                	
                                  Budget

                                	
                                  Actual

                                	
                                  Budget

                                	
                                  Actual

                                	
                                  Budget

                                	
                                  Actual

                                	
                                  Budget

                                	
                                  Variance

                                
	
                                  COST
      OF GOODS SOLD

                                	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	
                                  MADERA

                                	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	
                                  BOARDMAN

                                	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	
                                  STOCKTON

                                	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	
                                  BRAWLEY

                                	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	
                                  BURLEY

                                	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	
                                  Inputs

                                	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	
                                  MADERA

                                	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	
                                  BOARDMAN

                                	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	
                                  STOCKTON

                                	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	
                                  BRAWLEY

                                	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	
                                  BURLEY

                                	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	
                                  Total
      [       ] Cost

                                	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	
                                  MADERA

                                	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	
                                  BOARDMAN

                                	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	
                                  STOCKTON

                                	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	
                                  BRAWLEY

                                	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	
                                  BURLEY

                                	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	
                                  Total
      Other Inputs

                                	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	
                                  MADERA

                                	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      

                        

                        
                          
                             

                          

                          
                            7.03(p) -
12

                            
                              

                            

                          

                          
                             

                          

                        

                      

                       

                      
                        	 
      	
                                Most
      Recent

                                Fiscal
      Quarter

                              	
                                Month
      2 of

                                Most
      Recent

                                Fiscal
      Quarter

                              	
                                Month
      2 of

                                Most
      Recent

                                Fiscal
      Quarter

                              	
                                Month
      3 of

                                Most Recent

                                Fiscal
      Quarter

                              	
                                Year-to-Date

                                [Note:
      only for

                                year-end
      statements]

                              	 
      
	 
      	
                                Actual

                              	
                                Budget

                              	
                                Actual

                              	
                                Budget

                              	
                                Actual

                              	
                                Budget

                              	
                                Actual

                              	
                                Budget

                              	
                                Actual

                              	
                                Budget

                              	
                                Variance

                              
	
                                BOARDMAN

                              	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	
                                STOCKTON

                              	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	
                                BRAWLEY

                              	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	
                                BURLEY

                              	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	
                                Change
      in Inventory

                              	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	
                                MADERA

                              	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	
                                BOARDMAN

                              	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	
                                STOCKTON

                              	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	
                                BRAWLEY

                              	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	
                                BURLEY

                              	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	
                                Total
      Inputs

                              	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	
                                MADERA

                              	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	
                                BOARDMAN

                              	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	
                                STOCKTON

                              	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	
                                BRAWLEY

                              	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	
                                BURLEY

                              	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	
                                Labor

                              	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	
                                MADERA

                              	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	
                                BOARDMAN

                              	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	
                                STOCKTON

                              	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	
                                BRAWLEY

                              	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      

                      

                      

                      
                        
                           

                        

                        
                          7.03(p) -
13

                          
                            

                          

                        

                        
                           

                        

                      

                       

                      
                        	 
      	
                                Most
      Recent

                                Fiscal Quarter

                              	
                                Month
      1 of

                                Most
      Recent

                                Fiscal
      Quarter

                              	
                                Month
      2 of

                                Most
      Recent

                                Fiscal
      Quarter

                              	
                                Month
      3 of

                                Most
      Recent

                                Fiscal
      Quarter

                              	
                                Year-to-Date

                                [Note: only
      for

                                year-end
      statements]

                              	 
      
	 
      	
                                Actual

                              	
                                Budget

                              	
                                Actual

                              	
                                Budget

                              	
                                Actual

                              	
                                Budget

                              	
                                Actual

                              	
                                Budget

                              	
                                Actual

                              	
                                Budget

                              	
                                Variance

                              
	
                                BURLEY

                              	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	
                                Process/Tech
      Labor

                              	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	
                                MADERA

                              	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	
                                BOARDMAN

                              	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	
                                STOCKTON

                              	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	
                                BRAWLEY

                              	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	
                                BURLEY

                              	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	
                                Maintenance
      Labor

                              	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	
                                MADERA

                              	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	
                                BOARDMAN

                              	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	
                                STOCKTON

                              	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	
                                BRAWLEY

                              	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	
                                BURLEY

                              	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	
                                Total
      Labor

                              	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	
                                MADERA

                              	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	
                                BOARDMAN

                              	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	
                                STOCKTON

                              	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	
                                BRAWLEY

                              	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	
                                BURLEY

                              	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	
                                Other
      Project Overhead

                              	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	
                                MADERA

                              	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	
                                BOARDMAN

                              	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	
                                STOCKTON

                              	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	
                                BRAWLEY

                              	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      

                      

                      

                        
                          
                             

                          

                          
                            7.03(p) -
14

                            
                              

                            

                          

                          
                             

                          

                        

                      

                       

                      
                        	 
      	
                                Most
      Recent

                                Fiscal
      Quarter

                              	
                                Month
      1 of

                                Most
      Recent

                                Fiscal
      Quarter

                              	
                                Month
      2 of

                                Most
      Recent

                                Fiscal
      Quarter

                              	
                                Month
      3 of

                                Most
      Recent

                                Fiscal
      Quarter

                              	
                                Year-to-Date

                                [Note: only
      for

                                year-end
      statements]

                              	 
      
	 
      	
                                Actual

                              	
                                Budget

                              	
                                Actual

                              	
                                Budget

                              	
                                Actual

                              	
                                Budget

                              	
                                Actual

                              	
                                Budget

                              	
                                Actual

                              	
                                Budget

                              	
                                Variance

                              
	
                                BURLEY

                              	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	
                                Maintenance
      Parts and Supplies

                              	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	
                                MADERA

                              	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	
                                BOARDMAN

                              	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	
                                STOCKTON

                              	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	
                                BRAWLEY

                              	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	
                                BURLEY

                              	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	
                                Safety
      Supplies

                              	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	
                                MADERA

                              	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	
                                BOARDMAN

                              	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	
                                STOCKTON

                              	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	
                                BRAWLEY

                              	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	
                                BURLEY

                              	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	
                                Other
      Operating Supplies

                              	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	
                                MADERA

                              	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	
                                BOARDMAN

                              	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	
                                STOCKTON

                              	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	
                                BRAWLEY

                              	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	
                                BURLEY

                              	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	
                                Contract
      Labor

                              	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	
                                MADERA

                              	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	
                                BOARDMAN

                              	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	
                                STOCKTON

                              	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      

                      

                      

                        
                          
                             

                          

                          
                            7.03(p) -
15

                            
                              

                            

                          

                          
                             

                          

                        

                      

                       

                      
                        	 
      	
                                Most
      Recent

                                Fiscal
      Quarter

                              	
                                Month
      1 of

                                Most
      Recent

                                Fiscal
      Quarter

                              	
                                Month
      2 of

                                Most
      Recent

                                Fiscal
      Quarter

                              	
                                Month
      3 of

                                Most Recent

                                Fiscal
      Quarter

                              	
                                Year-to-Date

                                [Note: only
      for

                                year-end
      statements]

                              	 
      
	 
      	
                                Actual

                              	
                                Budget

                              	
                                Actual

                              	
                                Budget

                              	
                                Actual

                              	
                                Budget

                              	
                                Actual

                              	
                                Budget

                              	
                                Actual

                              	
                                Budget

                              	
                                Variance

                              
	
                                BRAWLEY

                              	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	
                                BURLEY

                              	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	
                                Plant
      Management and Administration Labor

                              	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	
                                MADERA

                              	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	
                                BOARDMAN

                              	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	
                                STOCKTON

                              	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	
                                BRAWLEY

                              	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	
                                BURLEY

                              	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	
                                Office
      Supplies

                              	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	
                                MADERA

                              	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	
                                BOARDMAN

                              	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	
                                STOCKTON

                              	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	
                                BRAWLEY

                              	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	
                                BURLEY

                              	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	
                                Communication
      Expense

                              	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	
                                MADERA

                              	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	
                                BOARDMAN

                              	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	
                                STOCKTON

                              	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	
                                BRAWLEY

                              	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	
                                BURLEY

                              	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	
                                Travel

                              	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	
                                MADERA

                              	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	
                                BOARDMAN

                              	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	
                                STOCKTON

                              	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      

                      

                      

                        
                          
                             

                          

                          
                            7.03(p) -
16

                            
                              

                            

                          

                          
                             

                          

                        

                      

                       

                      
                        	 
      	
                                Most
      Recent

                                Fiscal
      Quarter

                              	
                                Month
      1 of

                                Most
      Recent

                                Fiscal
      Quarter

                              	
                                Month
      2 of

                                Most
      Recent

                                Fiscal
      Quarter

                              	
                                Month
      3 of

                                Most
      Recent

                                Fiscal
      Quarter

                              	
                                Year-to-Date

                                [Note: only
      for

                                year-end
      statements]

                              	 
      
	 
      	
                                Actual

                              	
                                Budget

                              	
                                Actual

                              	
                                Budget

                              	
                                Actual

                              	
                                Budget

                              	
                                Actual

                              	
                                Budget

                              	
                                Actual

                              	
                                Budget

                              	
                                Variance

                              
	
                                BRAWLEY

                              	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	
                                BURLEY

                              	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	
                                Training
      & Other

                              	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	
                                MADERA

                              	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	
                                BOARDMAN

                              	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	
                                STOCKTON

                              	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	
                                BRAWLEY

                              	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	
                                BURLEY

                              	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	
                                Fuel

                              	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	
                                MADERA

                              	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	
                                BOARDMAN

                              	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	
                                STOCKTON

                              	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	
                                BRAWLEY

                              	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	
                                BURLEY

                              	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	
                                Rental
      Equipment

                              	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	
                                MADERA

                              	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	
                                BOARDMAN

                              	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	
                                STOCKTON

                              	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	
                                BRAWLEY

                              	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	
                                BURLEY

                              	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	
                                Environmental
      Testing

                              	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	
                                MADERA

                              	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	
                                BOARDMAN

                              	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	
                                STOCKTON

                              	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	
                                BRAWLEY

                              	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      

                      

                      

                        
                          
                             

                          

                          
                            7.03(p) -
17

                            
                              

                            

                          

                          
                             

                          

                        

                      

                       

                      
                        	 
      	
                                Most
      Recent

                                Fiscal
      Quarter

                              	
                                Month
      1 of

                                Most
      Recent

                                Fiscal
      Quarter

                              	
                                Month
      2 of

                                Most
      Recent

                                Fiscal
      Quarter

                              	
                                Month
      3 of

                                Most
      Recent

                                Fiscal
      Quarter

                              	
                                Year-to-Date

                                [Note: only
      for

                                year-end
      statements]

                              	 
      
	 
      	
                                Actual

                              	
                                Budget

                              	
                                Actual

                              	
                                Budget

                              	
                                Actual

                              	
                                Budget

                              	
                                Actual

                              	
                                Budget

                              	
                                Actual

                              	
                                Budget

                              	
                                Variance

                              
	
                                BURLEY

                              	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	
                                Plant
      Level Consultants

                              	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	
                                MADERA

                              	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	
                                BOARDMAN

                              	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	
                                STOCKTON

                              	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	
                                BRAWLEY

                              	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	
                                BURLEY

                              	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	
                                Total
      Other Project Overhead

                              	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	
                                MADERA

                              	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	
                                BOARDMAN

                              	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	
                                STOCKTON

                              	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	
                                BRAWLEY

                              	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	
                                BURLEY

                              	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	
                                Total
      Cost of Goods Sold

                              	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	
                                MADERA

                              	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	
                                BOARDMAN

                              	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	
                                STOCKTON

                              	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	
                                BRAWLEY

                              	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	
                                BURLEY

                              	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	
                                Sales
      Expenses

                              	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	
                                MADERA

                              	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	
                                BOARDMAN

                              	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      

                      

                      

                        
                          
                             

                          

                          
                            7.03(p) -
18

                            
                              

                            

                          

                          
                             

                          

                        

                      

                       

                      
                        	 
      	
                                Most
      Recent 

                                Fiscal
      Quarter

                              	
                                Month
      1 of

                                Most
      Recent

                                Fiscal
      Quarter

                              	
                                Month
      2 of

                                Most
      Recent

                                Fiscal
      Quarter

                              	
                                Month
      3 of 

                                Most
      Recent

                                Fiscal
      Quarter

                              	
                                Year-to-Date

                                [Note: only
      for

                                year-end
      statements]

                              	 
      
	 
      	
                                Actual

                              	
                                Budget

                              	
                                Actual

                              	
                                Budget

                              	
                                Actual

                              	
                                Budget

                              	
                                Actual

                              	
                                Budget

                              	
                                Actual

                              	
                                Budget

                              	
                                Variance

                              
	
                                STOCKTON

                              	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	
                                BRAWLEY

                              	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	
                                BURLEY

                              	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	
                                Marketing
      Fees (Including Discounts)

                              	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	
                                MADERA

                              	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	
                                BOARDMAN

                              	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	
                                STOCKTON

                              	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	
                                BRAWLEY

                              	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	
                                BURLEY

                              	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	
                                Cost
      of Goods Sold

                              	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	
                                MADERA

                              	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	
                                BOARDMAN

                              	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	
                                STOCKTON

                              	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	
                                BRAWLEY

                              	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	
                                BURLEY

                              	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	
                                Total
      Sales Expenses

                              	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	
                                MADERA

                              	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	
                                BOARDMAN

                              	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	
                                STOCKTON

                              	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	
                                BRAWLEY

                              	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	
                                BURLEY

                              	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      

                      

                      

                        
                          
                             

                          

                          
                            7.03(p) -
19

                            
                              

                            

                          

                          
                             

                          

                        

                      

                       

                      
                        	 
      	
                                Most
      Recent

                                Fiscal
      Quarter

                              	
                                Month
      1 of

                                Most
      Recent

                                Fiscal
      Quarter

                              	
                                Month
      2 of

                                Most Recent

                                Fiscal
      Quarter

                              	
                                Month
      3 of

                                Most
      Recent

                                Fiscal
      Quarter

                              	
                                Year-to-Date

                                [Note: only
      for

                                year-end
      statements]

                              	 
      
	 
      	
                                Actual

                              	
                                Budget

                              	
                                Actual

                              	
                                Budget

                              	
                                Actual

                              	
                                Budget

                              	
                                Actual

                              	
                                Budget

                              	
                                Actual

                              	
                                Budget

                              	
                                Variance

                              
	
                                SG&A

                              	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	
                                MADERA

                              	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	
                                BOARDMAN

                              	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	
                                STOCKTON

                              	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	
                                BRAWLEY

                              	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	
                                BURLEY

                              	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	
                                Corporate
      Salaries

                              	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	
                                MADERA

                              	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	
                                BOARDMAN

                              	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	
                                STOCKTON

                              	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	
                                BRAWLEY

                              	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	
                                BURLEY

                              	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	
                                Corporate
      (Plant Level) - Salaries

                              	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	
                                MADERA

                              	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	
                                BOARDMAN

                              	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	
                                STOCKTON

                              	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	
                                BRAWLEY

                              	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	
                                BURLEY

                              	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	
                                Corporate
      Expense

                              	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	
                                MADERA

                              	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	
                                BOARDMAN

                              	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	
                                STOCKTON

                              	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      

                      

                      

                        
                          
                             

                          

                          
                            7.03(p) -
20

                            
                              

                            

                          

                          
                             

                          

                        

                      

                       

                      
                        	 
      	
                                Most
      Recent

                                Fiscal
      Quarter

                              	
                                Month
      1 of

                                Most Recent

                                Fiscal
      Quarter

                              	
                                Month
      2 of

                                Most Recent

                                Fiscal
      Quarter

                              	
                                Month
      3 of

                                Most
      Recent

                                Fiscal
      Quarter

                              	
                                Year-to-Date

                                [Note: only
      for

                                year-end
      statements]

                              	 
      
	 
      	
                                Actual

                              	
                                Budget

                              	
                                Actual

                              	
                                Budget

                              	
                                Actual

                              	
                                Budget

                              	
                                Actual

                              	
                                Budget

                              	
                                Actual

                              	
                                Budget

                              	
                                Variance

                              
	
                                BRAWLEY

                              	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	
                                BURLEY

                              	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	
                                Plant
      Mgmt Expense (PECA)

                              	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	
                                MADERA

                              	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	
                                BOARDMAN

                              	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	
                                STOCKTON

                              	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	
                                BRAWLEY

                              	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	
                                BURLEY

                              	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	
                                Mgmt
      Fees

                              	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	
                                MADERA

                              	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	
                                BOARDMAN

                              	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	
                                STOCKTON

                              	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	
                                BRAWLEY

                              	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	
                                BURLEY

                              	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	
                                Prop
      Taxes

                              	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	
                                MADERA

                              	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	
                                BOARDMAN

                              	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	
                                STOCKTON

                              	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	
                                BRAWLEY

                              	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	
                                BURLEY

                              	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	
                                Total
      SG&A

                              	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	
                                MADERA

                              	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	
                                BOARDMAN

                              	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	
                                STOCKTON

                              	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	
                                BRAWLEY

                              	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      

                      

                      

                        
                          
                             

                          

                          
                            7.03(p) -
21

                            
                              

                            

                          

                          
                             

                          

                        

                      

                       

                      
                        	 
      	
                                Most
      Recent

                                Fiscal Quarter

                              	
                                Month
      1 of

                                Most Recent

                                Fiscal
      Quarter

                              	
                                Month
      2 of

                                Most Recent

                                Fiscal
      Quarter

                              	
                                Month
      3 of

                                Most
      Recent

                                Fiscal
      Quarter

                              	
                                Year-to-Date

                                [Note: only
      for

                                year-end
      statements]

                              	 
      
	 
      	
                                Actual

                              	
                                Budget

                              	
                                Actual

                              	
                                Budget

                              	
                                Actual

                              	
                                Budget

                              	
                                Actual

                              	
                                Budget

                              	
                                Actual

                              	
                                Budget

                              	
                                Variance

                              
	
                                BURLEY

                              	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	
                                Interest
      and Depreciation

                              	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	
                                MADERA

                              	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	
                                BOARDMAN

                              	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	
                                STOCKTON

                              	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	
                                BRAWLEY

                              	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	
                                BURLEY

                              	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	
                                Interest
      Expense

                              	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	
                                MADERA

                              	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	
                                BOARDMAN

                              	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	
                                STOCKTON

                              	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	
                                BRAWLEY

                              	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	
                                BURLEY

                              	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	
                                Depreciation
      & Amortization

                              	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	
                                MADERA

                              	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	
                                BOARDMAN

                              	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	
                                STOCKTON

                              	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	
                                BRAWLEY

                              	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	
                                BURLEY

                              	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      

                      

                      

                       

                      

                      

                        
                          
                             

                          

                          
                            7.03(p) -
22

                            
                              

                            

                          

                          
                             

                          

                        

                      IN
WITNESS WHEREOF, the undersigned has caused this Operating Statement to be duly
executed as of the date first above written.

                       

                      
                         

                        
                          	 	
                                  PACIFIC
      ETHANOL HOLDING CO. LLC as Borrowers' Agent

                                   

                                  By:                                                           

                                  Name:

                                  Title:

                                

                        

                         

                      

                       

                      

                       

                      

                       

                      

                       

                       

                       

                      
                        
                           

                        

                        
                          7.03(p) -
23

                          
                            

                          

                        

                        
                           

                        

                      

                    

                  

                   

                   

                  

                    EXHIBIT
8.04

                     to Credit
Agreement

                     

                    [FORM
OF]

                    CONSTRUCTION HOLDING
WITHDRAWAL CERTIFICATE

                     

                    
                      	
                              Date:
      [________ __, ____]

                            

                    

                    

                     

                    [ACCOUNTS
BANK]

                     

                     [ADDRESS]

                     

                    Reference
is made to Section 8.04(b) of the Credit Agreement dated as of February
__, 2007 (as amended, restated, supplemented or otherwise modified from
time to time, the
"Credit
Agreement"), by and among Pacific Ethanol Holding Co. LLC, a
Delaware limited liability company ("Pacific Holding"), Pacific
Ethanol Madera LLC, a Delaware limited liability company ("Madera"), Pacific Ethanol Columbia,
LLC, a Delaware limited liability company ("Boardman"), Pacific Ethanol
Stockton, LLC, a Delaware limited liability company ("Stockton"), Pacific Ethanol
Imperial, LLC, a Delaware limited liability company ("Brawley") and Pacific Ethanol
Magic Valley, LLC, a Delaware limited liability company ("Burley" and, together with
Pacific Holding, Madera, Boardman, Stockton, and Brawley, the "Borrowers"), Pacific Holding,
as Borrowers' 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, UNION BANK OF
CALIFORNIA, N.A., as Accounts Bank, WESTLB AG, NEW YORK BRANCH, as Lead Arranger
and Sole Bookrunner, MIZUHO CORPORATE BANK, LTD., as Lead Arranger and
Co-Syndication Agent, CIT CAPITAL SECURITIES LLC, as Lead Arranger and Co-
Syndication Agent, COOPERATIEVE CENTRALE RAIFFEISEN-BOERENLEENBANK B.A.,
"RABOBANK NEDERLAND", NEW YORK BRANCH, as Lead Arranger and Co- Documentation
Agent, and BANCO SANTANDER CENTRAL HISPANO S.A, NEW YORK BRANCH, as Lead
Arranger and Co-Documentation Agent.

                     

                    Capitalized
terms used herein but not otherwise defined herein shall have the respective
meanings set forth in the Credit Agreement.

                     

                    The Borrowers hereby direct the
Accounts Bank to withdraw and transfer from the account entitled
[_______], No.
[_____] (the "Construction Holding
Account"), on [______],
200[_]
(the "Construction Account Withdrawal
Date"), amounts and to the accounts entitled [____],
No. [_________] (the "[Stockton] [Brawley] [Burley] Construction
Account") to be applied towards
[Stockton] [Brawley] [Burley] Required Equity Contributions (as set forth on
Part A of Schedule 1 attached hereto) and/or to pay [Stockton] [Brawley]
[Burley] Project Costs (as set forth on Part B of Schedule 1 attached
hereto).

                     

                    
                      
                         

                      

                      
                        8.04 -
1

                        
                          

                        

                      

                      
                         

                      

                    

                    In
support of such direction, the undersigned, on behalf of the Borrowers, hereby
represents and certifies, as of the date hereof and as of the Construction
Account Withdrawal Date, as follows:

                     

                    (a) The
undersigned is an Authorized Officer of the Borrowers' Agent.

                     

                    (b) This
Construction Withdrawal Certificate is being delivered to the Accounts Bank with
a copy to the Administrative Agent and the Independent Engineer not later than
12:00 noon. New York City time on the Construction Account Withdrawal Date, and
the Construction Account Withdrawal Date is a Business Day.

                     

                    (c) All
conditions set forth in the Credit Agreement for the withdrawal requested hereby
have been satisfied.

                     

                    [(d) The
funds to be withdrawn from the Construction Holding Account pursuant to this
Construction Withdrawal Certificate will be applied to pay [Stockton] [Brawley]
[Burley] Project Costs that will become due and payable during the immediately
succeeding calendar month strictly in accordance with the
[Stockton][Brawley][Burley] Construction Budget.1]

                     

                    (e) No
Notice of Suspension is in effect and no Default or Event of Default would occur
after giving effect to the application of funds contemplated
hereby.

                     

                    The
undersigned officer is executing this Construction Holding Withdrawal
Certificate not in an individual capacity but in its capacity as an Authorized
Officer of the Borrower's Agent.

                     

                    [The
remainder of this page is intentionally blank. The next page is the signature
page.]

                     

                    
                      
                        	
                                CC:

                              	
                                ADMINISTRATIVE
      AGENT

                                 

                                INDEPENDENT
      ENGINEER

                              

                      

                    

                     

                    _____________________

                    1
To be included only for a transfer described in Part B of Schedule
1.

                     

                    
                      
                         

                      

                      
                        8.04 -
2

                        
                          

                        

                      

                      
                         

                      

                    

                    IN
WITNESS WHEREOF, the undersigned has caused this Construction Holding Withdrawal
Certificate to be executed and delivered as of the day and year first above
written.

                     

                    
                    

                     

                    
                      	 	
                              PACIFIC ETHANOL HOLDING CO.
      LLC, as Borrowers' Agent

                               

                              By:                                                    

                              Name:

                              Title:

                            

                    

                     

                    
                    

                     

                     

                     

                     

                     

                     

                     

                     

                     

                     

                    
 

                    
                      
                         

                      

                      
                        8.04 -
3

                        
                          

                        

                      

                      
                         

                      

                    

                    Schedule
1 to

                    Construction Holding
Withdrawal Certificate

                     

                    WITHDRAWALS
FROM CONSTRUCTION HOLDING ACCOUNT

                     

                    [details
to be attached]

                     

                    Part A.

                     

                    [Withdrawals
from Construction Holding Account to apply towards [Stockton] [Brawley] [Burley]
Required Equity Contributions].

                     

                     

                    
                      	
                              Beneficiary

                            	
                              Amount

                            
	
                              [Stockton]
      [Brawley] [Burley]

                            	
                              $

                            

                    

                     

                    Part B.

                     

                    [Withdrawals
from Construction Holding Account for payment of [Stockton] [Brawley] [Burley]
Project Costs].

                     

                    Amount

                     

                    $

                     

                    
                      
                         

                      

                      
                        8.04 -
4

                        
                          

                        

                      

                      
                         

                      

                    

                    

 

                    EXHIBIT
8.05 

                    to Credit
Agreement

                     

                    [FORM
OF]

                    [STOCKTON] [BRAWLEY]
IBURLEY]

                    CONSTRUCTION WITHDRAWAL
CERTIFICATE

                     

                    Date:
[  __________ __, ____ ]

                    

                     

                    [ACCOUNTS
BANK] 

                     

                    [ADDRESS]

                     

                    Reference
is made to Section [8.05[(b)][(c)j [8.06[(b)][(c)] [8.07[(b)][(c)]] of the
Credit Agreement dated as of February___,  2007 (as amended, restated,
supplemented or otherwise modified from time to time, the "Credit
Agreement"), by and among Pacific Ethanol Holding Co. LLC, a
Delaware limited liability company ("Pacific Holding"), Pacific
Ethanol Madera LLC, a Delaware limited liability company ("Madera"), Pacific
Ethanol Columbia, LLC, a Delaware limited liability company ("Boardman"), Pacific Ethanol
Stockton, LLC, a Delaware limited liability company ("Stockton"), Pacific Ethanol
Imperial, LLC, a Delaware limited liability company ("Brawley") and Pacific Ethanol
Magic Valley, LLC, a Delaware limited liability company ("Burley" and, together with
Pacific Holding, Madera, Boardman, Stockton, and Brawley, the "Borrowers"), Pacific Holding, as Borrowers' 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, UNION BANK OF CALIFORNIA, N.A., as
Accounts Bank, WESTLB AG, NEW YORK BRANCH, as Lead Arranger and Sole Bookrunner,
MIZUHO CORPORATE BANK, LTD., as Lead Arranger and Co-Syndication Agent, CIT
CAPITAL SECURITIES LLC, as Lead Arranger and Co-Syndication Agent, COOPERATIEVE
CENTRALE RAIFFEISEN­BOERENLEENBANK B.A., "RABOBANK NEDERLAND", NEW YORK
BRANCH, as Lead Arranger and Co-Documentation Agent, and BANCO SANTANDER CENTRAL
HISPANO S.A, NEW YORK BRANCH, as Lead Arranger and Co-Documentation
Agent.

                     

                    Capitalized
terms used herein but not otherwise defined herein shall have the respective
meanings set forth in the Credit Agreement.

                     

                    The
Borrowers hereby direct the Accounts Bank to withdraw and transfer from the
account entitled [_____], No. [____]
(the "[Stockton] [Brawley] [Burley] [Construction Account"), on [__], 20011 (the "Construction
Account Withdrawal Date"), the amounts and to the payees set forth
on Schedule I attached hereto.

                    

                    
                      
                        
                           

                        

                        
                          8.05 -
1

                          
                            

                          

                        

                        
                           

                        

                      

                    

                    

                    

                    In
support of such direction, the undersigned, on behalf of the Borrowers, hereby
represents and certifies, as of the date hereof and as of the Construction
Account Withdrawal Date, as follows:

                     

                    (a)      The
undersigned is an Authorized Officer of the Borrowers' Agent.

                     

                    (b)      This
Construction Withdrawal Certificate is being delivered to the Accounts Bank with
a copy to the Administrative Agent and the Independent Engineer not later than
12:00 noon New York City time on the Construction Account Withdrawal Date, and
the Construction Account Withdrawal Date is a Business Day.

                     

                    [(c)        All
conditions set forth in the Credit Agreement for the withdrawal requested hereby
have been satisfied.] [To be
included for all withdrawals after the date of the initial Funding Notice for the relevant
Plant.]

                     

                    [(d)        The
funds to be withdrawn from the [Stockton] [Brawley] [Burley] Construction
Account pursuant to this Construction Withdrawal Certificate will be applied to
pay Project Costs due and owing. [To be included for withdrawals prior
to the date of the initial Funding Notice for the relevant
Plant.]

                     

                    [(e)        The
funds to be withdrawn from the [Stockton] [Brawley] [Burley] Construction
Account pursuant to this Construction Withdrawal Certificate will be applied to
pay Project Costs due and owing strictly in accordance with the [Stockton]
[Brawley] [Burley] Construction Budget and in the case of Loan proceeds, the
most recent Funding Notice for the [Stockton] [Brawley] [Burley] Construction
Loan, which Funding Notice is dated as of [insert date]] [To be included for all
withdrawals after the date of the initial Funding Notice for the relevant
Plant.]

                     

                    [(f)       No
Notice of Suspension is in effect and no Default or Event of Default would occur
after giving effect to the application of funds contemplated hereby.] [To be included for all withdrawals after
the date of the initial Funding Notice for the relevant Plant.]

                     

                    The
undersigned officer is executing this Construction Withdrawal Certificate not in
an individual capacity but in its capacity as an Authorized Officer of the
Borrower's Agent.

                     

                    [The
remainder of this page is intentionally blank. The next page is the signature
page.]

                     

                    
                      
                        	
                                CC:

                              	
                                ADMINISTRATIVE
      AGENT

                                 

                                INDEPENDENT
      ENGINEER

                              

                      

                    

                     

                    

                    
                      
                        
                           

                        

                        
                          8.05 -
2

                          
                            

                          

                        

                        
                           

                        

                      

                    

                    

                     

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

                     

                     

                    
                    

                     

                    
                      	 	
                              PACIFIC ETHANOL HOLDING CO.
      LLC, as Borrowers' Agent

                               

                              By:                                                    

                              Name:

                              Title:

                            

                    

                     

                     

                     

                     

                     

                     

                     

                     

                     

                     

                     

                     

                     

                     

                    

                    
                      
                        
                           

                        

                        
                          8.05 -
3

                          
                            

                          

                        

                        
                           

                        

                      

                    

                    

                    Schedule
1 to

                    [Stockton] [Brawley]
[Burley)

                    Construction Withdrawal
Certificate

                     

                    WITHDRAWALS
FROM [STOCKTON] [BRAWLEY] [BURLEY]

                    CONSTRUCTION
ACCOUNT

                     

                    [details
to be attached]

                     

                    Withdrawals
from [Stockton] [Brawley] [Burley] Construction Account for direct payment of
[Stockton) [Brawley] [Burley] Project Costs.

                     

                    
                      	
                              Payee

                            	
                              Amount

                            	
                              Wire
      Instructions

                            
	 
      	
                              $

                            	 
      

                    

                     

                    

                     

                     

                     

                     

                     

                     

                    

                    
                      
                        
                           

                        

                        
                          8.05 -
4

                          
                            

                          

                        

                        
                           

                        

                      

                    

                    
EXHIBIT 8.08-A

                     to Credit
Agreement

                     

                    [FORM
OF]

                    PRE-CONVERSION
DATE

                    REVENUE ACCOUNT WITHDRAWAL
CERTIFICATE

                     

                    
                      	
                              Date:
      [________ __, ____]

                            

                    

                    

                     

                    [ACCOUNTS
BANK] 

                     

                    [ADDRESS]

                     

                    Reference
is made to Section 8.08(b) of the Credit Agreement (as amended, supplemented or
otherwise modified from time to time, the "Credit Agreement"), dated as of
February _____, 2007, 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,
PACIFIC ETHANOL IMPERIAL, 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 Borrowers' 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, UNION BANK OF CALIFORNIA, N.A., as Accounts Bank, WESTLB AG,
NEW YORK BRANCH, as Lead Arranger and Sole Bookrunner, MIZUHO CORPORATE BANK,
LTD., as Lead Arranger and Co-Syndication Agent, CIT CAPITAL SECURITIES LLC, as
Lead Arranger and Co-Syndication Agent, COOPERATIEVE CENTRALE
RAIFFEISEN­BOERENLEENBANK B.A., "RABOBANK NEDERLAND", NEW YORK BRANCH, as
Lead Arranger and Co-Documentation Agent, and BANCO SANTANDER CENTRAL HISPANO
S.A, NEW YORK BRANCH, as Lead Arranger and Co-Documentation Agent. Capitalized
terms used herein but not otherwise defined herein shall have the respective
meanings set forth in the Credit Agreement.

                     

                    The
Borrowers hereby direct the Accounts Bank to withdraw and transfer, from the
account entitled [_____] No. [_____] (the "Revenue Account"), on [_____],
20[__] (the "Revenue Account Withdrawal
Date"), the
following amounts: [Note: each
Revenue Account Withdrawal Certificate should only
include those priorities relevant on the given withdrawal date.]

                    

                    
                      
                        
                           

                        

                        
                          8.08-A -
1

                          
                            

                          

                        

                        
                           

                        

                      

                    

                    

                     

                    

                     

                    (i) in
accordance with Section 8.08(b)(i) of the Credit Agreement, (A) [_______]
Dollars ($[_____]) to Pacific Ethanol for payment of Sponsor Support
Reimbursements
due and owing, and (B) [_______]  Dollars ($[____])
to the Operating Account; 1

                     

                    (ii) in
accordance with Section 8.08(b)(ii) of the Credit Agreement, [__________]
 Dollars ($[______]) to the Maintenance Capital Expense Account; 1

                     

                    (iii) in
accordance with Section 8.08(b)(iii) of the Credit Agreement, [__________]
 Dollars ($[______]) to the Administrative Agent, for the account of
the Senior Secured Parties, for payment of Fees, costs and expenses due and
payable under the Financing Documents; 2

                     

                    (iv) in
accordance with Section 8.08(b)(iv) of the Credit Agreement, to the
Administrative Agent, for the account of the Senior Secured Parties,
(A) [__________]  Dollars ($[______])  for payment of interest
due and payable under the Financing Documents and (B) [_____] Dollars ($[_____]
for payment of fees, expenses and Net Swap Payments owing to the Interest Rate
Protection Providers;2

                     

                    (v) in
accordance with Section 8.08(b)(v) of the Credit Agreement, [__________]
 Dollars ($[______]) to the Administrative Agent, for the account of the
Interest Rate Providers, for payment of Swap Termination Value due and payable
with respect to the Interest Rate Protection Agreements;3

                     

                    (vi) in
accordance with Section 8.08(b)(vi) of the Credit Agreement, [__________]
 Dollars ($[______]) ) to the Working Capital Reserve Account;3

                     

                    (vii) in
accordance with Section 8.08(b)(vii) of the Credit Agreement, [__________]
 Dollars ($[______]) to the Administrative Agent, for the account of the
Working Capital Lenders, as a prepayment of the Working Capital Loans [in an
amount equal to a Mandatory Prepayment of the Working Capital Loans required to
be made pursuant to Section 3.10(c) of the Credit Agreement] [in an amount equal
to a prepayment on the Working Capital Loans being made at the option of the
Borrowers pursuant to Section 3.09 of the Credit Agreement];

                     

                    (viii) in
accordance with Section 8.08(b)(viii) of the Credit Agreement, [__________]
 Dollars ($[______])  to
[__________________]  for payment of Current Priority Subordinated
Interest;5

                     

                    ___________________________

                     

                    1 To be included
in certificates for each Monthly Date.

                    2 To be
included in certificates for any date on which such amounts are due and
payable.

                    3 To be
included in certificates for each Monthly Date when applicable.

                    4 To be
inserted in certificates on any date when required pursuant to Section 3.10(c) (Mandatory
Prepayment) of the Credit Agreement, or otherwise at the option of the
Borrowers.

                    5 May
be inserted in certificates on each Quarterly Payment Date, when no Default or
Event of Default has occurred and is continuing.

                     

                    

                    
                      
                        
                           

                        

                        
                          8.08-A -
2

                          
                            

                          

                        

                        
                           

                        

                      

                    

                    

                    (ix) in
accordance with Section 8.08(b)(ix) of the Credit Agreement,[__________]
 Dollars ($[______]) 
to [insert name of relevant taxing
authority(ies) or Affiliate(s)] for payment of a
Permitted Tax Distribution;5
and

                     

                    (x) in
accordance with Section 8.08(b)(x) of the Credit Agreement,  (A)
[__________]  Dollars ($[______]) 
to the Stockton Construction Account, (B) [__________]  Dollars
($[______]) 
to the
Brawley Construction Account, (C)  [__________]  Dollars
($[______])  
to the Burley  Construction
Account for payment of Project Costs due and payable. 1

                     

                    In
support of such direction, the undersigned, on behalf of the Borrowers, hereby
represents and certifies, as of the date hereof and as of the Revenue Account
Withdrawal Date, as follows:

                     

                    (a) the
undersigned is a Financial Officer of the Borrowers' Agent;

                     

                    (b) this
Revenue Account Withdrawal Certificate is being delivered to the Accounts
Bank not later than 12:00 Noon New York City time on the Revenue Account
Withdrawal Date, and the Revenue Account Withdrawal Date is a [Business Day]
[Monthly Date] [Quarterly Payment Date];

                     

                    (c) all
conditions set forth in the Credit Agreement for the withdrawals 
requested
hereby have been satisfied; and

                     

                    (d) no Notice
of Suspension is in effect and no Default or Event of Default would
occur after giving effect to any application of funds contemplated
hereby.

                     

                    The
undersigned is executing this Revenue Account Withdrawal Certificate not in an
individual capacity but in its capacity as an Authorized Officer of the
Borrowers' Agent.

                     

                    [The
remainder of this page is intentionally blank. The next page is the signature
page.]

                     

                    CC:         
ADMINISTRATIVE AGENT

                     

                    

                    
                      
                        
                           

                        

                        
                          8.08-A -
3

                          
                            

                          

                        

                        
                           

                        

                      

                    

                    

                    IN
WITNESS WHEREOF, the undersigned has caused this Revenue Account Withdrawal
Certificate to be executed and delivered as of the day and year first above
written.

                     

                     

                    
                       

                      
                        	 	
                                PACIFIC
      ETHANOL HOLDING CO. LLC, as Borrowers' Agent

                                 

                                By:                                                    

                                Name:

                                Title:

                              

                      

                       

                    

                    
                    

                    

                    
                      
                        
                           

                        

                        
                          8.08-A -
4

                          
                            

                          

                        

                        
                           

                        

                      

                    

                    
EXHIBIT 8.08-B 

                    to Credit
Agreement

                     

                    [FORM
OF]

                    POST-CONVERSION
DATE

                    REVENUE ACCOUNT WITHDRAWAL
CERTIFICATE

                     

                    
                      	
                              Date:
      [________ __, ____]

                            

                    

                    

                     

                    [ACCOUNTS
BANK] 

                     

                    [ADDRESS]

                     

                    Reference
is made to Section 8.08(c) of the Credit Agreement (as amended, supplemented or
otherwise modified from time to time, the "Credit
Agreement"), dated
as of February __, 2007, 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, PACIFIC ETHANOL IMPERIAL, 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 Borrowers' 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, UNION BANK OF CALIFORNIA, N.A., as
Accounts Bank, WESTLB AG, NEW YORK BRANCH, as Lead Arranger and Sole Bookrunner,
MIZUHO CORPORATE BANK, LTD., as Lead Arranger and Co-Syndication Agent, CIT
CAPITAL SECURITIES LLC, as Lead Arranger and Co-Syndication Agent, COOPERATIEVE
CENTRALE RAIFFEISEN­BOERENLEENBANK B.A., "RABOBANK NEDERLAND", NEW YORK
BRANCH, as Lead Arranger and Co-Documentation Agent, and BANCO SANTANDER CENTRAL
HISPANO S.A, NEW YORK BRANCH, as Lead Arranger and Co-Documentation Agent.
Capitalized terms used herein but not otherwise defined herein shall have the
respective meanings set forth in the Credit Agreement.

                     

                    The
Borrowers hereby direct the Accounts Bank to withdraw and transfer, from the
account entitled [____], No. ____ (the "Revenue
Account"), on
[____], 20[__] (the "Revenue
Account Withdrawal Date"), the following amounts: [Note: each Revenue Account
Withdrawal Certificate
should only include those priorities relevant on the given withdrawal date.]

                    

                    
                      
                        
                           

                        

                        
                          8.08-B -
1

                          
                            

                          

                        

                        
                           

                        

                      

                    

                    

                     

                    

                     

                    (i)   in
accordance with Section 8.08(c)(i) of the Credit Agreement, (A) [_____] [Dollars
($[_____]) to Pacific Ethanol for payment of Sponsor Support Reimbursements due
and owing, and (B)
[_______] Dollars
($[_____]) to the Operating Account ; 1

                     

                    (ii) 
 in accordance with Section 8.08(c)(ii) of the Credit Agreement, [
_________] Dollars ($[_____ ]) to the Maintenance Capital Expense Account;
1

                     

                    (iii) in
accordance with Section 8.08(c)(iii) of the Credit Agreement, [______] Dollars
($[_____]) to the Administrative Agent, for the account of the Senior Secured
Parties, for payment of Fees, costs and expenses due and payable under the
Financing Documents, 2

                     

                    (iv) in accordance with Section 8.08(c)(iv)
of the Credit Agreement, to the Administrative Agent, for the account
of the Senior Secured Parties, (A) [_____] Dollars ($[_____]) for payment of interest due and
payable under the Financing Documents and (B) [_____] Dollars ($[_____]) for payment of fees, expenses or Net
Swap Payments owing to the Interest Rate Protection
Providers;2

                     

                    (v) 
in accordance with Section 8.08(c)(v) of the Credit Agreement, [_____] Dollars
($[_______]) to the Administrative Agent, for the account of the Working Capital
Lenders, as a prepayment of the Working Capital Loans pursuant to Section
3.10(c) of the Credit Agreement, 2

                     

                    (vi) 
 in accordance with Section 8.08(c)(vi) of the Credit Agreement, [_____]
Dollars ($[ _______]) to the Administrative Agent (A) for the account of the
Construction/Term Lenders, for payment of principal due and payable with respect
to the Term Loans and (B) for the account of the
Interest Rate Providers, for payment of Swap Termination Value due and payable
with respect to the Interest Rate Protection Agreements;3

                     

                    (vii) 
in accordance with Section 8.08(c)(vii) of the Credit Agreement, [ Dollars
($[_______]) to the Working Capital Reserve Account;3

                     

                    (viii) in accordance with Section
8.08(c)(viii) of the Credit Agreement, [_____ Dollars ($[_____]) to the Administrative Agent, for the
account of the Working Capital Lenders, as a prepayment of the Working Capital
Loans in an amount equal to [all outstanding principal amounts of Working Capital Loans on the
Working Capital Maturity Date] [a prepayment on the Working Capital Loans being made at the
option of the Borrowers pursuant to Section 3.09 of the Credit Agreement] ;4

                     

                     

                    ______________________

                     

                    1 To be included
in certificates for each Monthly Date.

                    2
To be included in certificates for any date on which such amounts are due and
payable.

                    3
To be included in certificates for each Monthly Date when
applicable.

                    4
To be included on the Working Capital Maturity Date and on any Monthly Date at
the option of the Borrowers.

                    

                    
                      
                        
                           

                        

                        
                          8.08-B -
2

                          
                            

                          

                        

                        
                           

                        

                      

                    

                    

                    (ix)  in accordance with Section 8.08(c)(ix) of the Credit
Agreement [_____] Dollars ($[_____]) to [_____] to Debt Service Reserve Account;
3

                     

                    (x)
 in accordance with Section 8.08(c)(x) of the Credit Agreement [_____]
Dollars ($[_____]) to [_____] for payment of Current Priority Subordinated
Interest; 5

                     

                    (xi) 
in accordance with Section 8.08(c)(xi) of the Credit Agreement, [_____] Dollars
($[_____]) to the Administrative Agent, for the account of the Term Lenders, for
a Mandatory Prepayment of the Term Loans in an amount equal to fifty percent
(50%) of the cash remaining in the Revenue Account after the transfer, if any,
required pursuant to priority tenth of
Section 8.08(c) of the Credit Agreement; 6

                     

                    (xii) in
accordance with Section 8.08(c)(xii) of the Credit Agreement, [_____] Dollars
($[_____]) to [insert name of
relevant taxing authority(ies) or Affiliate(s)] for payment of a
Permitted Tax Distribution; 5

                     

                    (xiii)
 in accordance with Section 8.08(c)(xiii) of the Credit Agreement, [_____]
Dollars ($[_____]) to the Administrative Agent, for the account of the Lenders,
as a Mandatory Prepayment in an amount [such that, after giving effect to such
prepayment, the outstanding principal amount of the Term Loans is equal to the
Target Balance Amount for the Revenue Account Withdrawal Date] [equal to the
greater of (x) an amount such that, after giving effect to such prepayment, the
outstanding principal amount of the Term Loans is equal to the Target Balance
Amount for the Revenue Account Withdrawal Date, and (y) twenty-five percent
(25%) of the cash remaining in the Revenue Account after the transfer required
pursuant to priority tenth of
Section 8.08(c) of the Credit Agreement]; 7
and

                     

                    (xiv) in
accordance with Section 8.08(c)(xiv) of the Credit Agreement, [_____] Dollars
($[_____]) [to the Administrative Agent as a Mandatory Prepayment of the Term
Loans] [to the Prepayment Holding Account].8

                     

                    In
support of such direction, the undersigned, on behalf of the Borrowers, hereby
represents and certifies, as of the date hereof and as of the Revenue Account
Withdrawal Date, as follows:

                     

                    (a)    
the undersigned is a Financial Officer of the Borrowers' Agent;

                     

                     

                    5
May be inserted in certificates on each Quarterly Payment Date, when no Default
or Event of Default has occurred and is continuing.

                    6 To be
inserted in certificates on each Quarterly Payment Date.

                    7 To be
inserted in certificates on each Quarterly Payment Date. The first option for
clause (xiii) of this form to be included prior to the second anniversary of the
Conversion Date. The second option for clause (xiii) of this form to be included
on and after the second anniversary of the Conversion Date.

                    8
To be inserted in certificates on each Quarterly Payment Date when
applicable. The first option for clause (xiv) of this form to be included if the
Historical Debt Service Coverage Ratio as of the Revenue Account Withdrawal Date
is less than 1.5:1. The second option for clause (xiv) of this form to be
included if the Historical Debt Service Coverage Ratio as of the Revenue Account
Withdrawal Date is greater than or equal to 1.5:1 and the Prospective Debt
Service Coverage Ratio as of the Revenue Account Withdrawal Date is less than
1.5:1.

                     

                    

                    
                      
                        
                           

                        

                        
                          8.08-B -
3

                          
                            

                          

                        

                        
                           

                        

                      

                    

                    

                     (b) 
this Revenue Account Withdrawal Certificate is being delivered to the
Accounts
Bank not later than 12:00 Noon New York City time on the Revenue Account
Withdrawal Date, and the Revenue Account Withdrawal Date is a [Business Day]
[Monthly Date] [Quarterly Payment Date];

                     

                    (c)
 all conditions set forth in the Credit Agreement for the withdrawals
requested hereby have been satisfied; and

                     

                    (d) 
on the date hereof, the Conversion Date has occurred, no Notice of Suspension is
in effect and no Default or Event of Default would occur after giving effect to
any application of funds contemplated hereby.

                     

                    The
undersigned is executing this Revenue Account Withdrawal Certificate not in an
individual capacity but in its capacity as an Authorized Officer of the
Borrowers' Agent.

                     

                    [The
remainder of this page is intentionally blank. The next page is the signature
page.]

                     

                    CC:      
ADMINISTRATIVE AGENT

                     

                    

                    
                      
                        
                           

                        

                        
                          8.08-B -
4

                          
                            

                          

                        

                        
                           

                        

                      

                    

                     

                     

                     

                     

                    IN
WITNESS WHEREOF, the undersigned has caused this Revenue Account Withdrawal
Certificate to be executed and delivered as of the day and year first above
written.

                     

                     

                    
                       

                      
                        	 	
                                PACIFIC
      ETHANOL HOLDING CO. LLC, as Borrowers' Agent

                                 

                                By:                                                    

                                Name:

                                Title:

                              

                      

                       

                    

                    
                    

                     

                     

                     

                     

                     

                     

                     

                     

                     

                     

                    

                    
                      
                        
                           

                        

                        
                          8.08-B -
5

                          
                            

                          

                        

                        
                           

                        

                      

                    

                    
 

                    

                    
                      
                        
                           

                        

                        
                           

                          
                            

                          

                        

                        
                           

                        

                      

                    

                    

                    EXHIBIT
8.09

                     to Credit
Agreement

                     

                    [FORM
OF]

                    OPERATING ACCOUNT WITHDRAWAL
CERTIFICATE

                     

                    
                      	
                              Date:
      [________ __, ____]

                            

                    

                    

                     

                    [ACCOUNTS
BANK]

                     

                    [ADDRESS]

                     

                    Reference
is made to Section 8.09(b)(ii) of the Credit Agreement (as amended, supplemented
or otherwise modified from time to time, the "Credit
Agreement"), dated
as of [__________], 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,
PACIFIC ETHANOL IMPERIAL, 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 Borrowers' 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, UNION BANK OF CALIFORNIA, N.A., as Accounts Bank, WESTLB AG,
NEW YORK BRANCH, as Lead Arranger and Sole Bookrunner, MIZUHO CORPORATE BANK,
LTD., as Lead Arranger and Co-Syndication Agent, CIT CAPITAL SECURITIES LLC, as
Lead Arranger and Co-Syndication Agent, COOPERATIEVE CENTRALE
RAIFFEISEN­BOERENLEENBANK B.A., "RABOBANK NEDERLAND", NEW YORK BRANCH, as
Lead Arranger and Co-Documentation Agent, and BANCO SANTANDER CENTRAL HISPANO
S.A, NEW YORK BRANCH, as Lead Arranger and Co-Documentation Agent.

                     

                    Capitalized
terms used herein but not otherwise defined herein shall have the respective
meanings set forth in the Credit Agreement.

                     

                    The
Borrowers hereby direct the Accounts Bank to withdraw and transfer from the
account entitled [_____], No. [____] (the "Operating
Account"), on
[____], 20[___]
(the "Operating
Account Withdrawal Date"), the amounts and to the
account's', in each case as set forth on Schedule
1
attached hereto.

                     

                    In
support of such direction, the undersigned, on behalf of the Borrowers, hereby
represents and certifies, as of the date hereof and as of the Operating Account
Withdrawal Date, as follows:

                     

                    (a) The
undersigned is an Authorized Officer of the Borrowers' Agent.

                     

                    

                    
                      
                        
                           

                        

                        
                          8.09 -
1

                          
                            

                          

                        

                        
                           

                        

                      

                    

                    

                     

                     (b) 
This Operating Account Withdrawal Certificate is being delivered to the Accounts
Bank not later than 12:00 noon New York City time on the Operating Account
Withdrawal Date, and the Operating Account Withdrawal Date is a Business
Day.

                     

                     

                    (c) 
All conditions set forth in the Credit Agreement for the withdrawal requested
hereby have been satisfied.

                     

                    (d) 
The funds to be withdrawn from the Operating Account pursuant to this Operating
Account Withdrawal Certificate will be transferred to the Local Account(s)
identified on Schedule
1 hereto, for further application to the payment of amounts due and owing
by the Borrowers for Operation and Maintenance Expenses.

                     

                    (e) 
A Blocked Account Agreement with respect to each Local Account identified on
Schedule
1 hereto has been executed and delivered and is in full force and
effect.

                     

                    (f) 
After giving effect to the transfers requested hereby, the amounts on deposit in
and standing to the credit of all Local Accounts permitted pursuant to Section
7.02(i) of the Credit Agreement will not exceed, in the aggregate, two hundred
thousand Dollars ($200,000) for each Plant that has achieved its Commercial
Operation Date.

                     

                    (g) 
No Notice of Suspension is in effect and no Default or Event of Default would
occur after giving effect to the application of funds contemplated
hereby.

                     

                    The
undersigned officer is executing this Operating Account Withdrawal Certificate
not in an individual capacity but in its capacity as an Authorized Officer of
the Borrower's Agent.

                     

                    [The
remainder of this page is intentionally blank. The next page is the signature
page.]

                     

                    CC:      
ADMINISTRATIVE AGENT

                     

                    

                    
                      
                        
                           

                        

                        
                          8.09 -
2

                          
                            

                          

                        

                        
                           

                        

                      

                    

                    

                    IN
WITNESS WHEREOF, the undersigned has caused this Operating Account Withdrawal
Certificate to be executed and delivered as of the day and year first above
written.

                     

                    
                       

                      
                        	 	
                                PACIFIC
      ETHANOL HOLDING CO. LLC, as Borrowers' Agent

                                 

                                By:                                                    

                                Name:

                                Title:

                              

                      

                       

                    

                     

                    
                    

                     

                     

                     

                     

                     

                     

                     

                    
                      
                        
                           

                        

                        
                          8.09 -
3

                          
                            

                          

                        

                        
                           

                        

                      

                    

                    

                    Schedule
1 to

                    Operating
Account

                    Withdrawal
Certificate

                     

                    WITHDRAWALS
FROM OPERATING ACCOUNT

                     

                    [details
to be attached]

                     

                    I.         
Withdrawals from Operating Account to permitted Local Account(s).

                     

                    Local
Account:                                                   Amount         
Wire
Instructions

                     

                      
$

                     

                     

                     

                     

                     

                     

                     

                     

                     

                     

                     

                    
 

                    
                      
                        
                           

                        

                        
                          8.09 -
4

                          
                            

                          

                        

                        
                           

                        

                      

                    

                    
EXHIBIT
8.11

                    to Credit
Agreement

                     

                    [FORM
OF]

                    WORKING CAPITAL TRANSFER
CERTIFICATE

                     

                    Date:
[______ __, ____]

                    

                     

                    [ACCOUNTS
BANK] 

                     

                    [ADDRESS]

                     

                    Reference
is made to Section 8.111(b)11(c)1[(d)][(e)] of the Credit Agreement (as amended,
supplemented or otherwise modified from time to time, the "Credit Agreement"),
dated as of February __, 2007, 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, PACIFIC ETHANOL IMPERIAL, 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 Borrowers' 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, UNION BANK OF CALIFORNIA, N.A., as
Accounts Bank, WESTLB AG, NEW YORK BRANCH, as Lead Arranger and Sole Bookrunner,
MIZUHO CORPORATE BANK, LTD., as Lead Arranger and Co-Syndication Agent, CIT
CAPITAL SECURITIES LLC, as Lead Arranger and Co-Syndication Agent, COOPERATIEVE
CENTRALE RAIFFEISEN­BOERENLEENBANK B.A., "RABOBANK NEDERLAND", NEW YORK
BRANCH, as Lead Arranger and Co-Documentation Agent, and BANCO SANTANDER CENTRAL
HISPANO S.A, NEW YORK BRANCH, as Lead Arranger and Co-Documentation Agent.
Capitalized terms used herein but not otherwise defined herein shall have the
respective meanings set forth in the Credit Agreement.

                     

                    The
Borrowers hereby direct the Accounts Bank to withdraw and transfer, from the
account entitled [_____],
No. [____] (the "Working Capital Reserve
Account"), on [_____], 20[_]
(the "Working Capital
Withdrawal Date"):

                     

                    (i)       In
accordance with Section 8.I1(b)(i) of the Credit Agreement, [_____] Dollars
($[_____ ])
to the payees as set forth on Schedule 1 attached
hereto for the payment of amounts due and owing with respect to Operation and
Maintenance Expenses;

                     

                    (ii)     In
accordance with Section 8.11(b)(ii) of the Credit Agreement, [_____] Dollars
($[_____]) to the payees as set forth on Schedule l attached
hereto for the payment of amounts due and owing with respect to Maintenance
Capital Expenses;

                    

                    
                      
                        
                           

                        

                        
                          8.11 -
1

                          
                            

                          

                        

                        
                           

                        

                      

                    

                    

                    (iii) In
accordance with Section 8.11(b)(iii) of the Credit Agreement; [_____] Dollars
($[_____]]) to the payees as set forth on Schedule 1 attached hereto for the
payment of amounts due and owing for start-up costs with respect to the
[Stockton] [Brawley] [Brawley] Plant; 1

                     

                    (iii)  In
accordance with Section 8.11(c) of the Credit Agreement, [_____] Dollars
($[_____]) for deposit into the Revenue Account;2

                     

                    (iv) In
accordance with Section 8.11(d) of the Credit Agreement, [_____] Dollars
($[_____]) from the Working Capital LC Collateral Sub-Account to the
Administrative Agent, for the account of the Working Capital
Lenders;

                     

                    (v) 
In accordance with Section 8.11(e) of the Credit Agreement, [____] Dollars
($[_____]) from the Working Capital LC Collateral Sub-Account to the Working
Capital Reserve Account.

                     

                    In
support of such direction, the undersigned, on behalf of the Borrowers, hereby
represents and certifies, as of the date hereof and as of the Working Capital
Withdrawal Date, as follows:

                     

                    (a)            The
undersigned is an Authorized Officer of the Borrowers' Agent.

                     

                    (b)            This
Working Capital Transfer Certificate is being delivered to the Accounts
Bank with a copy to the Administrative Agent not later than 12:00 Noon New York
City time on the Working Capital Withdrawal Date, and the Working Capital
Withdrawal Date is a Business Day.

                     

                    (c)            All
conditions set forth in the Credit Agreement for the withdrawals requested
hereby have been satisfied.

                     

                    (d)            The
funds to be withdrawn from the Working Capital Reserve Account pursuant
to this Working Capital Transfer Certificate will:

                     

                    [(i)    
in the case of transfers requested pursuant to Section 8.11(b)(i) of
the
Credit Agreement, be applied directly to the payment of amounts due and owing
for Operation and Maintenance Expenses in accordance with the Operating Budget;
it being hereby certified that adequate funds are not available for the payment
of such Operation and Maintenance Expenses in the Operating Account and the
amount of such transfer of funds, when taken together with the amounts
transferred to the Operating Account for the current calendar month pursuant to
Section 18.08(b)(i)] [8.08(c)(i)] of the Credit Agreement and any other
transfers pursuant to Section 8.11(b)(i) of the Credit Agreement during the
current calendar month (excluding any amounts so transferred to cover the cost
of corn, natural gas, electricity, insurance premiums and Borrower Taxes), does
not exceed the Permitted Operating Budget Deviation Levels.]

                     

                    [(ii)  
 in the case of transfers requested pursuant to Section 8.11(b)(ii) of the
Credit Agreement, be applied directly to the payment of amounts due and owing
for Maintenance Capital Expenses in accordance with the Operating Budget; it
being hereby certified that adequate funds are not available for the payment of
such Maintenance Capital Expenses in the Maintenance Capital Expense Account and
the amount of such transfer of funds, when taken together with the amounts
transferred to the Maintenance Capital Expense Account for the current calendar
month pursuant to Section [8.08(b)(01[8.08(c)(ii)] of the Credit Agreement and
any other transfers pursuant to Section 8.11(b)(ii) of the Credit Agreement
during the current calendar month, does not exceed the Permitted Operating
Budget Deviation Levels.]

                    

                    _____________

                     

                    1
Certificate may provide for transfers to pay start-up costs for
multiple Greenfield Plants.

                    2
May only be requested on a Quarterly Payment Date.

                    
                      
                        
                           

                        

                        
                          8.11 -
2

                          
                            

                          

                        

                        
                           

                        

                      

                    

                     

                     

                    [(iii)   
in the case of transfers requested pursuant to Section 8.11(b)(iii) of the
Credit Agreement, be applied directly to the payment of amounts due and owing
for start-up costs with respect to the to [Stockton][Brawley][Brawley]
Plant.]

                     

                    [(iv)    
The funds to be withdrawn from the Working Capital Reserve Account in accordance
with Section 8.11(c) of the Credit Agreement, will be transferred to the Revenue
Account; it being hereby certified that as of the Working Capital Withdrawal
Date (A) the Working Capital Reserve Required Amount is [_____] Dollars ($[_____]),
(B) the funds on deposit in or standing to the credit of the Working Capital
Reserve Account (other than amounts standing to the credit of the Working
Capital LC Collateral Sub-Account) are [_____] Dollars ($[_____]), and (C) the
amount set forth in (B) is greater than (A) and the amount to be so transferred
to the Revenue Account is equal to the positive difference of (A) minus
(B).

                     

                    [(e) 
The funds to be withdrawn from the Working Capital LC Collateral Sub- Account in
accordance with Section 8.11(d) of the Credit Agreement will be paid to the
Administrative Agent, for the account of the Working Capital Lenders, in an
amount equal to the Working Capital Loans made as a result of a draw under a
Letter of Credit that are then due and payable.]

                     

                    [(f) 
The funds to be withdrawn from the Working Capital LC Collateral
Sub-

                    Account
in accordance with Section 8.11(e) of the Credit Agreement will be transferred
to the Working Capital Reserve Account; it being hereby certified that the
amounts standing to the credit of the Working Capital LC Collateral Sub-Account
are in excess of the aggregate Maximum Available Amounts under all current
Letters of Credit, and such Maximum Available Amounts are set forth on Annex A attached
hereto.]

                     

                    [(h) 
No Notice of Suspension is in effect and no Default or Event of Default has
occurred and is continuing or would occur as a result of the withdrawals
requested hereby.)

                     

                    The
undersigned officer is executing this Working Capital Transfer Certificate not
in its individual capacity but in its capacity as an Authorized Officer of the
Borrowers' Agent.

                     

                    [The
remainder of this page is intentionally blank. The next page is the signature
page.]

                     

                    CC:     
ADMINISTRATIVE AGENT

                     

                    _________________________

                    3 
This certification does not need to be made for transfers requested pursuant to
Sections 8.11(d) and (e) of the Credit Agreement.

                    

                    
                      
                        
                           

                        

                        
                          8.11 -
3

                          
                            

                          

                        

                        
                           

                        

                      

                    

                    

                    IN
WITNESS WHEREOF, the undersigned has caused this Working Capital Transfer
Certificate to be executed and delivered as of the day and year first above
written.

                     

                     

                    
                       

                      
                        	 	
                                PACIFIC
      ETHANOL HOLDING CO. LLC, as Borrowers' Agent

                                 

                                By:___________________________

                                Name:
      

                                Title:

                              

                      

                       

                    

                     

                  

                  
                    
                      
                      

                    

                    
                      
                      

                      
                        

                      

                    

                    
                      
                      

                    

                  

                  
                    
                      
                      

                    

                    
                      
                      

                      
                        

                      

                    

                    
                      
                      

                    

                  

                  
                    
                      
                      

                    

                    
                      
                      

                      
                        

                      

                    

                    
                      
                      

                    

                  

                   

                   

                   

                   

                  
                    

                    
                      
                        
                           

                        

                        
                          8.11 -
4

                          
                            

                          

                        

                        
                           

                        

                      

                    

                    

                    Schedule
1 to Working Capital Transfer
Certificate

                     

                    TRANSFERS
FROM WORKING CAPITAL ACCOUNT

                     

                    [details
to be attached]

                     

                    I.         
Transfers from
the Working Capital Account for the direct payment of Operation and Maintenance
expenses due and owing.

                     

                    Payee                                          AmountWire
Instructions

                     

                    $

                     

                    ILTransfers from the Working
Capital Account for the direct payment of

                    Maintenance Capital Expenses
due and owing.

                     

                    
                      Payee                                          AmountWire
Instructions

                       

                      $

                       

                    

                     

                    III.        
Transfers from the Working Capital Account for the direct payment of
start­up
costs due and owing with respect to
IStocktonliBrawleylIBurlevl.

                     

                    Payee                                         AmountWire
Instructions

                     

                    $

                     

                    

                     

                    

                    
                      
                        
                           

                        

                        
                          8.11 -
5

                          
                            

                          

                        

                        
                           

                        

                      

                    

                    

                    Annex
A

                    to
Working Capital

                    Transfer
Certificate

                     

                    
                       
MAXIMUM AVAILABLE AMOUNTS
UNDER OUTSTANDING LETTERS OF
CREDIT

                    

                    (details to be
attached]

                     

                     

                     

                     

                     

                     

                     

                     

                     

                     

                     

                     

                     

                     

                     

                     

                     

                     

                     

                     

                     

                    
 

                    
                      
                        
                           

                        

                        
                          8.11 -
6

                          
                            

                          

                        

                        
                           

                        

                      

                    

                    
 

                    
                      EXHIBIT
8.12

                      to Credit
Agreement

                       

                      [FORM
OF]

                      DEBT SERVICE RESERVE LETTER
OF CREDIT

                       

                      [INSERT
NAME OF BANK]

                      [INSERT
ADDRESS OF BANK]

                       

                      IRREVOCABLE
STANDBY LETTER OF CREDIT

                       

                      No.
__________

                       

                       

                      [Issuance
Date]

                       

                      WestLB
AG, New York Branch,

                      as
Collateral Agent

                      1211 Ave
of Americas

                      New York,
New York 10036

                      Attention:
Richard Garbarino

                      Tel.:
212-597-1307

                      Fax:
212-597-1490

                      Email:
Richard_Garbarino@westlb.com

                       

                      Ladies
and Gentlemen:

                       

                      At the
request and for the account of [(the "Account Party"), we hereby
establish this
Irrevocable and Transferable Standby Letter of Credit (this "Letter of
Credit") for the Stated Amount (as defined below) in your favor as
Collateral Agent (the "Collateral Agent")
under the Credit Agreement (as amended, modified or otherwise supplemented from
time to time in accordance with its terms, the "Credit
Agreement"), dated as of February , 2007, by and among Pacific
Ethanol Holding Co. LLC, a Delaware limited liability company ("Pacific
Holding"), Pacific Ethanol Madera LLC, a Delaware limited
liability company ("Madera"),
Pacific Ethanol Columbia, LLC, a Delaware limited liability company ("Boardman"), Pacific Ethanol
Stockton, LLC, a Delaware limited liability company ("Stockton"), Pacific Ethanol
Imperial, LLC, a Delaware limited liability company ("Brawley") and Pacific Ethanol
Magic Valley, LLC, a Delaware limited liability company ("Burley" and, together with
Pacific Holding, Madera, Boardman, Stockton, and Brawley, the "Borrowers"), Pacific Holding,
as Borrowers' 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, UNION BANK OF CALIFORNIA, N.A., as Accounts Bank, WESTLB AG,
NEW YORK BRANCH, as Lead Arranger and Sole Bookrunner, MIZUHO CORPORATE BANK,
LTD., as Lead Arranger and Co-Syndication Agent, CIT CAPITAL SECURITIES LLC, as
Lead Arranger and Co-Syndication Agent, COOPERATIEVE CENTRALE
RAIFFEISEN­BOERENLEENBANK B.A., "RABOBANK NEDERLAND", NEW YORK BRANCH, as
Lead Arranger and Co-Documentation Agent, and BANCO SANTANDER CENTRAL HISPANO
S.A, NEW YORK BRANCH, as Lead Arranger and Co-Documentation Agent. Capitalized
terms used herein but not otherwise defined herein shall have the respective
meanings set forth in the Credit Agreement.

                       

                      
                        
                          
                          

                        

                        
                          8.12 -
1

                          
                            

                          

                        

                        
                          
                          

                        

                      

                       

                      As used
in this Letter of Credit, "Dollars" and "$" mean the lawful currency of the
United States of America.

                       

                      "Stated
Amount" means, as of any date, (a) [__________] Dollars
($[________]) less (b)
the sum of
(i) any amounts paid by us to the Collateral Agent under this Letter of Credit
prior to such date and (ii) the aggregate amount of all Reduction Amounts (as
defined below) set forth in all Reduction Notices (as defined below) received by
us prior to such date.

                       

                      This
Letter of Credit is valid and effective immediately and, on and after the date
hereof, drawings hereunder may be made by you from time to time by presentation
to us in [New York, New York] in the manner described below at [INSERT NAME OF
ISSUING BANK], [INSERT ADDRESS OF ISSUING BANK], [New York, NY] of your
certificate in the form of Annex A or Annex B hereto, in
each case appropriately completed and signed by one of your authorized officers.
We shall not be obligated to confirm the authenticity of such signature. Our
only obligation with regard to a drawing under this Letter of Credit shall be to
examine the certificate presented and to pay in accordance therewith, and we
shall not be obligated to make any inquiry in connection with the presentation
of such certificate.

                       

                      Drawings
hereunder may be made by you from time to time prior to the expiration hereof at
any time during our business hours at the aforementioned address in [New York,
New York], on any Business Day (as defined below). If a drawing hereunder is
presented by you (a) at or prior to [11:00] AM (New York time) on any Business
Day, we hereby agree to honor each such drawing on or before [3:001 PM (New York
time) on the same day and (b) after [11:00] AM (New York time) on any Business
Day, we hereby agree to honor each such drawing on or before [10:00] AM (New
York time) on the next succeeding Business Day; provided that, in the case of
clauses (a) and (b) above, such drawing is made in accordance with the foregoing
sentence and the documents presented in connection therewith conform to the
terms and conditions of this Letter of Credit. "Business
Day" means any day that is neither a Saturday or Sunday nor a day
on which commercial banks are authorized or required to be closed in New York,
New York.

                       

                      
                        
                          
                          

                        

                        
                          8.12 -
2

                          
                            

                          

                        

                        
                          
                          

                        

                      

                       

                      If a
demand for payment made by you hereunder does not, in any instance, conform to
the terms and conditions of this Letter of Credit, we shall give you notice
promptly (but in any event no later than one (1) Business Day after such demand)
that the demand for payment was not effected in accordance with the terms and
conditions of this Letter of Credit, stating the reasons
therefor and that we will upon your instructions hold any documents at your
disposal or return the same to you. Upon being notified that the demand for
payment was not effected in conformity with this Letter of Credit, you may
attempt to correct any such non-conforming demand prior to 12:00 PM (New York
time) on the Expiration Date (as defined below).

                       

                      All
payments to be made by us under this Letter of Credit shall be made with our own
funds (and not, directly or indirectly, with any funds or collateral deposited
or pledged with us, or for our account, in each case, by any Borrower), in
immediately available funds, by wire transfer to the account specified by you in
the applicable certificate in the form of Annex A or Annex B hereto (as
the case may be), free and clear of, and without deduction for, any taxes,
duties, fees, liens, set-offs or other deductions of any kind and regardless of
any objection of any third party (including, without limitation, the Account
Party).

                       

                      The
Stated Amount shall be permanently reduced as provided in the third paragraph of
this Letter of Credit upon our receipt of a notice from you, in the form of
Annex C
attached hereto (a "Reduction Notice"), by the
Dollar amount set forth in each such notice (each such amount being a "Reduction
Amount").

                       

                      Only you
may make drawings under this Letter of Credit. Multiple drawings may be made
under this Letter of Credit. Upon payment of any such drawing, the Stated Amount
shall be reduced by the amount of such drawing. Upon any drawing in the amount
of the full Stated Amount pursuant to a certificate in the form of Annex A or Annex B signed by one
of your authorized officers, the Stated Amount shall be reduced to zero and
shall not be reinstated. No drawing hereunder shall exceed the then-applicable
Stated Amount. The failure to make a drawing for any payment required by the
Credit Agreement shall not result in this Letter of Credit ceasing to be
available for future such drawings.

                       

                      Unless
extended by us in our sole and absolute discretion, this Letter of Credit shall
expire at our close of business on [______________] (the "Expiration
Date") and shall be promptly surrendered
to us upon such expiration.

                       

                      Communications
with respect to this Letter of Credit, including, without limitation, the
delivery of any Reduction Notice, shall be made in writing and shall be
addressed to us at [INSERT NAME OF ISSUING BANK], [INSERT ADDRESS OF ISSUING
BANK], New York, New York, Attn: _________________, fax number: ___________, and
presented to us by
facsimile or physical delivery at such address or, if to you, at the address set
forth above, and shall, in either case, specifically refer to the number of this
Letter of Credit.

                       

                      
                        
                          
                          

                        

                        
                          8.12 -
3

                          
                            

                          

                        

                        
                          
                          

                        

                      

                       

                      This
Letter of Credit sets forth in full the terms of our undertaking, and this
undertaking shall not in any way be modified, amended, amplified or limited by
reference to any document, instrument or agreement referred to or to which this
Letter of Credit relates, except for the Annexes attached hereto; and any such
reference shall not be deemed to incorporate hereby by reference any such
document, instrument or agreement except for such Annexes.

                       

                      This
Letter of Credit is transferable in its entirety (but not in part) to any
transferee that has succeeded you as Collateral Agent under the Credit Agreement
and the other Financing Documents (as defined in the Credit Agreement) and may
be successively transferred to subsequent successor Collateral Agents under the
Credit Agreement and the other Financing Documents (as defined in the Credit
Agreement). Transfers of this Letter of Credit to any such transferee shall be
accompanied by a certificate substantially in the form of Annex D hereto, but
you shall not be required to pay any bank charges in connection with any such
transfer.

                       

                      This
Letter of Credit shall be subject to the provisions (to the extent that such
provisions are not inconsistent with this Letter of Credit) of the Uniform
Customs and Practice for Documentary Credits, 1993 Revision, International
Chamber of Commerce Publication No. 500 and, to the extent not inconsistent
therewith, the laws of the State of New York, including, without limitation, the
Uniform Commercial Code as in effect in the State of New York.

                       

                      
                         

                        
                          
                            	 	
                                    Very
      truly yours,

                                     

                                    [NAME OF ISSUING BANK]

                                  	 
	 	 	 	 
	
                                     

                                  	
                                    By:
      

                                  	 	 
	 	 	Name:	 
	 	 	Title:	 
	 	 	
                                     

                                    Address:

                                  	 

                          

                        

                         

                        
                          
                            
                            

                          

                          
                            8.12 -
4

                            
                              

                            

                          

                          
                            
                            

                          

                        

                         

                      

                      ANNEX
A

                      to Debt Service Reserve
Letter of Credit

                       

                      CERTIFICATE
FOR DRAWING IN CONNECTION

                       

                      WITH
A SHORTFALL OF DEBT SERVICE RESERVE AMOUNTS

                       

                      [DATE]

                       

                      [INSERT
NAME OF ISSUING BANK]

                      [INSERT
ADDRESS OF ISSUING BANK]

                       

                      Irrevocable
Standby Letter of Credit

                      No.
__________

                       

                      WESTLB
AG, NEW YORK BRANCH, as Collateral Agent for the Senior Secured Parties (the
"Collateral Agent") under the
Credit Agreement (as amended, modified or otherwise supplemented from time to
time in accordance with its terms, the "Credit Agreement"), dated as of
February , 2007, by and among PACIFIC ETHANOL HOLDING CO. LLC, a Delaware
limited liability company ("Pacific Holding"), PACIFIC
ETHANOL MADERA LLC, a Delaware limited liability company ("Madera"), PACIFIC ETHANOL COLUMBIA,
LLC, a Delaware limited liability company ("Boardman"), PACIFIC ETHANOL
STOCKTON, LLC, a Delaware limited liability company ("Stockton"), PACIFIC ETHANOL
IMPERIAL, LLC, a Delaware limited liability company ("Brawley") and PACIFIC ETHANOL
MAGIC VALLEY, LLC, a Delaware limited liability company ("Burley" and, together with
Pacific Holding, Madera, Boardman, Stockton, and Brawley, the "Borrowers"), Pacific Holding,
as Borrowers' 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, UNION BANK OF CALIFORNIA, N.A., as Accounts
Bank, WESTLB AG, NEW YORK BRANCH, as Lead Arranger and Sole Bookrunner, MIZUHO
CORPORATE BANK, LTD., as Lead Arranger and Co-Syndication Agent, CIT CAPITAL
SECURITIES LLC, as Lead Arranger and Co-Syndication Agent, COOPERATIEVE CENTRALE
RAIFFEISEN­BOERENLEENBANK B.A., "RABOBANK NEDERLAND", NEW YORK BRANCH, as
Lead Arranger and Co-Documentation Agent, and BANCO SANTANDER CENTRAL HISPANO
S.A, NEW YORK BRANCH, as Lead Arranger and Co-Documentation Agent. Capitalized
terms used herein but not otherwise defined herein shall have the respective
meanings set forth in the Credit Agreement, hereby certifies to [INSERT NAME OF
ISSUING BANK], with reference to the Irrevocable Standby Letter of Credit No.
[_____] (the "Letter of Credit"),
that:

                       

                      
                        
                          
                          

                        

                        
                          8.12 -
5

                          
                            

                          

                        

                        
                          
                          

                        

                      

                       

                      1.   The
Collateral Agent is the "Collateral Agent" under and as defined in the Credit
Agreement.

                       

                      2.   The
undersigned is duly authorized to execute and deliver this certificate on
behalf of
the Collateral Agent.

                       

                      3.    The
Collateral Agent is making a drawing under the Letter of Credit in the
amount of
[________] Dollars ($[_______]) pursuant to Section 8.12(c)(i) of the Credit
Agreement. Such drawing does not exceed the Stated Amount (as defined in the
Letter of Credit).

                       

                      You are
hereby directed to make payment of the requested drawing to [_______], as
Collateral
Agent at [____________________] ABA No. [__________] for further credit
to
Account No. [____________] Re: [_______________] Attention: [___________] (the
"Debt Service Reserve
Account").

                       

                       

                       

                      [The
remainder of this page is intentionally blank. The next page is the signature
page.]

                       

                      
                        
                          
                          

                        

                        
                          8.12 -
6

                          
                            

                          

                        

                        
                          
                          

                        

                         

                        IN
WITNESS WHEREOF, the Collateral Agent has executed and delivered this
certificate as of the ___ day of ____________, 20___.

                      

                       

                      
                         

                        
                          
                            	 	
                                    WESTLB AG, NEW YORK BRANCH,

                                    as Collateral Agent

                                  	 
	 	 	 	 
	
                                     

                                  	
                                    By:
      

                                  	 	 
	 	 	Name:	 
	 	 	Title:	 
	 	 	
                                     

                                  	 

                          

                        

                         

                        
                          
                            
                            

                          

                          
                            8.12 -
7

                            
                              

                            

                          

                          
                            
                            

                          

                        

                      

                       

                      ANNEX
B

                      to Debt Service Reserve
Letter of Credit

                       

                      CERTIFICATE
FOR DRAWING

                       

                      UPON
EXPIRATION OF LETTER OF CREDIT/CESSATION OF ISSUER AS

                      ACCEPTABLE
BANK

                       

                      [DATE]

                       

                      [INSERT
NAME OF ISSUING BANK]

                      [INSERT
ADDRESS OF ISSUING BANK]

                       

                      Irrevocable
Standby Letter of Credit

                      No.
__________

                       

                      WESTLB
AG, NEW YORK BRANCH, as Collateral Agent for the Senior Secured Parties (the
"Collateral Agent") under the
Credit Agreement (as amended, modified or otherwise supplemented from time to
time in accordance with its terms, the "Credit Agreement"), dated as of
February , 2007, by and among PACIFIC ETHANOL HOLDING CO. LLC, a Delaware
limited liability company ("Pacific Holding"), PACIFIC
ETHANOL MADERA LLC, a Delaware limited liability company ("Madera"), PACIFIC ETHANOL COLUMBIA,
LLC, a Delaware limited liability company ("Boardman"), PACIFIC ETHANOL
STOCKTON, LLC, a Delaware limited liability company ("Stockton"), PACIFIC ETHANOL
IMPERIAL, LLC, a Delaware limited liability company ("Brawley") and PACIFIC ETHANOL
MAGIC VALLEY, LLC, a Delaware limited liability company ("Burley" and, together with
Pacific Holding, Madera, Boardman, Stockton, and Brawley, the "Borrowers"), Pacific Holding,
as Borrowers' 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, UNION BANK OF CALIFORNIA, N.A., as Accounts
Bank, WESTLB AG, NEW YORK BRANCH, as Lead Arranger and Sole Bookrunner, MIZUHO
CORPORATE BANK, LTD., as Lead Arranger and Co-Syndication Agent, CIT CAPITAL
SECURITIES LLC, as Lead Arranger and Co-Syndication Agent, COOPERATIEVE CENTRALE
RAIFFEISEN­BOERENLEENBANK B.A., "RABOBANK NEDERLAND", NEW YORK BRANCH, as
Lead Arranger and Co-Documentation Agent, and BANCO SANTANDER CENTRAL HISPANO
S.A, NEW YORK BRANCH, as Lead Arranger and Co-Documentation Agent. Capitalized
terms used herein but not otherwise defined herein shall have the respective
meanings set forth in the Credit Agreement., hereby certifies to [INSERT NAME OF
ISSUING BANK], with reference to the Irrevocable Standby Letter of Credit No.
[_____] (the "Letter of Credit"), that:

                       

                      
                        
                          
                          

                        

                        
                          8.12 -
8

                          
                            

                          

                        

                        
                          
                          

                        

                      

                       

                      1.   The
Collateral Agent is the "Collateral Agent "under and as defined in the
Credit Agreement.

                       

                      2.   The
undersigned is duly authorized to execute and deliver this certificate on
behalf of
the Collateral Agent.

                       

                      3    The
Collateral Agent is making a drawing under the Letter of Credit in the
amount of
[_________] Dollars ($[_________]) pursuant to Section 8.12(c)[(ii)][(iii)] of
the Credit
Agreement. The drawing made hereunder is equal to the Stated
Amount.

                       

                      You are
hereby directed to make payment of the requested drawing to [_________], as
Collateral
Agent at [_____________________] ABA No. [____________] for further credit
to Account No. [____________]
Re: [____________]
Attention: [____________] (the "Debt Service Reserve
Account").

                       

                       

                      [The
remainder of this page is intentionally blank. The next page is the signature
page.]

                       

                      
                        
                          
                          

                        

                        
                          8.12 -
9

                          
                            

                          

                        

                        
                          
                          

                        

                         

                        IN
WITNESS WHEREOF, the Collateral Agent has executed and delivered this
certificate as of the ___ day of ___________, 20___.

                      

                       

                      
                        
                           

                          
                            
                              	 	
                                      WESTLB
      AG, NEW YORK BRANCH,

                                      as
      Collateral Agent

                                    	 
	 	 	 	 
	
                                       

                                    	
                                      By:
      

                                    	 	 
	 	 	Name:	 
	 	 	Title:
      	 
	 	 	 	 

                            

                            
                               

                              
                                
                                  	 	
                                           

                                        	 
	 	 	 	 
	
                                           

                                        	
                                          By:
      

                                        	 	 
	 	 	Name:	 
	 	 	Title:
      	 

                                

                              

                            

                          

                        

                         

                        
                          
                            
                            

                          

                          
                            8.12 -
10

                            
                              

                            

                          

                          
                            
                            

                          

                        

                      

                       

                      ANNEX
C

                      to Debt Service Reserve
Letter of Credit

                       

                      REDUCTION
NOTICE

                       

                      [DATE]

                       

                      [INSERT
NAME OF ISSUING BANK]

                      [INSERT
ADDRESS OF ISSUING BANK]

                       

                      Irrevocable
Standby Letter of Credit

                      No.
__________

                       

                      WESTLB
AG, NEW YORK BRANCH, as Collateral Agent for the Senior Secured Parties (the
"Collateral Agent") under the
Credit Agreement (as amended, modified or otherwise supplemented from time to
time in accordance with its terms, the "Credit Agreement"), dated as of
February , 2007, by and among PACIFIC ETHANOL HOLDING CO. LLC, a Delaware
limited liability company ("Pacific Holding"), PACIFIC
ETHANOL MADERA LLC, a Delaware limited liability company ("Madera"), PACIFIC ETHANOL COLUMBIA,
LLC, a Delaware limited liability company ("Boardman"), PACIFIC ETHANOL
STOCKTON, LLC, a Delaware limited liability company ("Stockton"), PACIFIC ETHANOL
IMPERIAL, LLC, a Delaware limited liability company ("Brawley") and PACIFIC ETHANOL
MAGIC VALLEY, LLC, a Delaware limited liability company ("Burley" and, together with
Pacific Holding, Madera, Boardman, Stockton, and Brawley, the "Borrowers"), Pacific Holding,
as Borrowers' 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, UNION BANK OF CALIFORNIA, N.A., as Accounts
Bank, WESTLB AG, NEW YORK BRANCH, as Lead Arranger and Sole Bookrunner, MIZUHO
CORPORATE BANK, LTD., as Lead Arranger and Co-Syndication Agent, CIT CAPITAL
SECURITIES LLC, as Lead Arranger and Co-Syndication Agent, COOPERATIEVE CENTRALE
RAIFFEISEN­BOERENLEENBANK B.A., "RABOBANK NEDERLAND", NEW YORK BRANCH, as
Lead Arranger and Co-Documentation Agent, and BANCO SANTANDER CENTRAL HISPANO
S.A, NEW YORK BRANCH, as Lead Arranger and Co-Documentation Agent. Capitalized
terms used herein but not otherwise defined herein shall have the respective
meanings set forth in the Credit Agreement, hereby certifies to [INSERT NAME OF
ISSUING BANK], with reference to the Irrevocable Standby Letter of Credit No.
[______] (the "Letter of Credit"),
that:

                       

                      1.    The
Collateral Agent is the "Collateral Agent" under and as defined in the Credit
Agreement.

                       

                      
                        
                          
                          

                        

                        
                          8.12 -
11

                          
                            

                          

                        

                        
                          
                          

                        

                      

                       

                      2.   The
undersigned is duly authorized to execute and deliver this certificate on
behalf of
the Collateral Agent.

                       

                      3.   As of the
date of this certificate and prior to giving effect to any reduction in the
Stated
Amount (as defined in the Letter of Credit) pursuant to this certificate, the
balance in the Debt Service Reserve Account (as defined in the Credit Agreement)
exceeds the current Debt Service Reserve Requirement (as defined in the Credit
Agreement) for such date by an amount equal to [__________] Dollars
($[_____]).

                       

                      4.    With effect
from the date of this certificate, the Stated Amount is reduced by [__________]
Dollars ($[_____]), which
amount set forth in this paragraph 4 is equal to or less than the
amount set forth in paragraph 3 of this certificate.

                       

                       

                      [The
remainder of this page is intentionally blank. The next page is the signature
page.]

                       

                      
                        
                          
                          

                        

                        
                          8.12 -
12

                          
                            

                          

                        

                        
                          
                          

                        

                      

                       

                      IN
WITNESS WHEREOF, the Collateral Agent has executed and delivered this
certificate as of the ___ day of __________, 20__.

                       

                      
                        
                           

                          
                            
                              	 	
                                      WESTLB
      AG, NEW YORK BRANCH,

                                      as
      Collateral Agent

                                    	 
	 	 	 	 
	
                                       

                                    	
                                      By:
      

                                    	 	 
	 	 	Name:	 
	 	 	Title:
      	 
	 	 	 	 

                            

                            
                               

                              
                                
                                  	 	
                                           

                                        	 
	 	 	 	 
	
                                           

                                        	
                                          By:
      

                                        	 	 
	 	 	Name:	 
	 	 	Title:
      	 

                                

                              

                            

                          

                        

                         

                        
                          
                            
                            

                          

                          
                            8.12 -
13

                            
                              

                            

                          

                          
                            
                            

                          

                        

                      

                       

                      ANNEX
D

                      to Debt Service Reserve
Letter of Credit

                       

                      TRANSFER
CERTIFICATE

                       

                      [INSERT
NAME OF ISSUING BANK]

                      [INSERT
ADDRESS OF ISSUING BANK]

                       

                      Irrevocable
and Standby Letter of Credit

                      No.
__________

                       

                      The
undersigned, a duly authorized officer of the undersigned beneficiary of the
Irrevocable Standby Letter of Credit No. [____] (the "Letter of Credit"), irrevocably
instructs [INSERT
NAME OF ISSUING BANK], as issuer of the Letter of Credit, as
follows:

                       

                      1.   For value
received, the undersigned beneficiary hereby irrevocably transfers
to:

                       

                      [NAME OF
TRANSFEREE]

                      [ADDRESS
OF TRANSFEREE]

                       

                      all
rights of the undersigned beneficiary to draw under the Letter of Credit in its
entirety. The transferee has succeeded the undersigned as Collateral Agent under
the Credit Agreement (as defined in the Letter of Credit).

                       

                      2.   By this
transfer, all rights of the undersigned beneficiary in the Letter of Credit
are
transferred to the transferee and the transferee shall have the sole rights as
beneficiary thereof.

                       

                      3.    The Letter of
Credit is returned with this certificate and, in accordance with the
Letter of
Credit, the undersigned requests that this transfer be effective and that you
transfer the Letter of Credit to the transferee or that, if so requested by the
transferee, you issue a new irrevocable letter of credit in favor of the
transferee in the form of the Letter of Credit.

                       

                      
                        
                          
                          

                        

                        
                          8.12 -
14

                          
                            

                          

                        

                        
                          
                          

                        

                      

                       

                      
                        
                          
                            
                              	 	
                                      Very
      truly yours,

                                       

                                      WESTLB
      AG, NEW YORK BRANCH,

                                      as
      Collateral Agent

                                    	 
	 	 	 	 
	
                                       

                                    	
                                      By:
      

                                    	 	 
	 	 	Name:	 
	 	 	Title:
      	 
	 	 	 	 

                            

                            
                               

                              
                                
                                  	 	
                                           

                                        	 
	 	 	 	 
	
                                           

                                        	
                                          By:
      

                                        	 	 
	 	 	Name:	 
	 	 	Title:
      	 

                                

                                 

                                
                                  
                                    
                                    

                                  

                                  
                                    8.12 -
15

                                    
                                      

                                    

                                  

                                  
                                    
                                    

                                  

                                

                                 

                                ANNEX
E

                                to Debt Service Reserve
Letter of Credit

                              

                            

                          

                        

                      

                       

                      FORM
OF WAIVER LETTER (LETTER OF CREDIT)

                       

                      To [NAME
OF ISSUING BANK]

                      [ADDRESS
OF ISSUING BANK]

                       

                      Ladies
and Gentlemen:

                       

                      We refer
to (a) the Letter of Credit, No. _________ (the "Letter of
Credit"), issued by [INSERT
NAME OF ISSUING BANK] (the "Issuing Bank") in favor of
[_____] as Collateral Agent,
and for the account of [_____] (the "Account Party"), dated as of
[_____]; and (b) the [_____] letter of
credit reimbursement agreement[s] listed on Schedule I hereto (the "Reimbursement
Agreement[s]") executed by the Account Party.

                       

                      The
undersigned, each of them Delaware limited liability companies [which are
majority owned, directly or indirectly, by the Account Party], have entered into
a Credit Agreement (as amended, modified or otherwise supplemented from time to
time in accordance with its terms, the "Credit Agreement"), dated as of
February ____, 2007, with PACIFIC ETHANOL HOLDING CO. LLC, as Borrowers' 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, UNION BANK OF CALIFORNIA, N.A., as Accounts Bank, WESTLB AG,
NEW YORK BRANCH, as Lead Arranger and Sole Bookrunner, MIZUHO CORPORATE BANK,
LTD., as Lead Arranger and Co-Syndication Agent, CIT CAPITAL SECURITIES LLC, as
Lead Arranger and Co-Syndication Agent, COOPERATIEVE CENTRALE
RAIFFEISEN-BOERENLEENBANK B.A., "RABOBANK NEDERLAND", NEW YORK BRANCH, as Lead
Arranger and Co-Documentation Agent, and BANCO SANTANDER CENTRAL HISPANO S.A,
NEW YORK BRANCH, as Lead Arranger and Co- Documentation Agent. Capitalized terms
used herein but not otherwise defined herein shall have the respective meanings
set forth in the Credit Agreement.

                       

                      As a
condition to the provision or maintenance of the financing contemplated under
the Credit Agreement, the undersigned are required to obtain from the Issuing
Bank a waiver of any and all rights, powers and remedies against the undersigned
and all of their respective property and assets (whether now or hereinafter
owned or acquired) in connection with (a) the Letter of Credit, (b) the
obligation of the Account Party under the Reimbursement Agreement's], or
(c)
otherwise, including any and all rights of the Issuing Bank pursuant to Section
5-117 of the Uniform Commercial Code as in effect in the State of New York ("NYUCC") or, if the NYUCC is
revised, any successor provision thereto. We hereby request that you waive any
and all such rights,
powers and remedies by signing below in order to permit us to complete the
transactions contemplated by the Credit Agreement.

                       

                      
                        
                          
                          

                        

                        
                          8.12 -
16

                          
                            

                          

                        

                        
                          
                          

                        

                      

                       

                      This
Waiver Letter (the "Waiver Letter") shall become
effective as of the date first above written when, and only when, the Issuing
Bank has countersigned this Waiver Letter .

                       

                      The
execution, delivery and effectiveness of this Waiver Letter shall not operate as
a waiver of any right, power or remedy of the Issuing Bank against the Account
Party under the Reimbursement Agreement's].

                       

                      If you
agree to the terms and provisions of this Waiver Letter , please evidence such
agreement by executing and returning at least [_____(__)]counterparts of
this Waiver Letter .

                       

                      This
Waiver Letter may be executed in any number of counterparts and by the different
parties hereto in separate counterparts, each of which when so executed and
delivered shall be an original, but all the counterparts together shall
constitute one and the same instrument. Delivery of an executed counterpart of a
signature page to this Waiver Letter by telecopy or portable document format
("pdf') shall be effective as delivery of a manually executed counterpart of
this Waiver Letter .

                       

                      This
Waiver Letter shall be governed by, and construed in accordance with, the laws
of the State of New York.

                       

                      
                        
                          
                            
                              
                                	 	
                                        Very
      truly yours,

                                         

                                        PACIFIC ETHANOL HOLDING CO.
      LLC,

                                      	 
	 	 	 	 
	
                                         

                                      	
                                        By:
      

                                      	 	 
	 	 	Name:	 
	 	 	Title:
      	 
	 	 	 	 

                              

                              
                                 

                                 

                                
                                  
                                    	 	
                                            PACIFIC ETHANOL MADERA
      LLC,

                                          	 
	 	 	 	 
	
                                             

                                          	
                                            By:
      

                                          	 	 
	 	 	Name:	 
	 	 	Title:
      	 

                                  

                                  
                                    
                                       

                                       

                                      
                                        
                                          	 	
                                                  PACIFIC ETHANOL COLUMBIA,
      LLC,

                                                	 
	 	 	 	 
	
                                                   

                                                	
                                                  By:
      

                                                	 	 
	 	 	Name:	 
	 	 	Title:
      	 

                                        

                                         

                                        
                                          
                                            
                                            

                                          

                                          
                                            8.12 -
17

                                            
                                              

                                            

                                          

                                          
                                            
                                            

                                          

                                        

                                      

                                    

                                  

                                

                              

                            

                          

                        

                      

                      
                         

                        
                          
                            	 	
                                    PACIFIC ETHANOL STOCKTON,
      LLC,

                                  	 
	 	 	 	 
	
                                     

                                  	
                                    By:
      

                                  	 	 
	 	 	Name:	 
	 	 	Title:
      	 

                          

                          
                            
                               

                               

                              
                                
                                  	 	
                                          PACIFIC ETHANOL IMPERIAL,
      LLC,

                                        	 
	 	 	 	 
	
                                           

                                        	
                                          By:
      

                                        	 	 
	 	 	Name:	 
	 	 	Title:
      	 

                                

                                
                                   

                                   

                                  
                                    
                                      	 	
                                              PACIFIC ETHANOL MAGIC VALLEY,
      LLC,

                                            	 
	 	 	 	 
	
                                               

                                            	
                                              By:
      

                                            	 	 
	 	 	Name:	 
	 	 	Title:
      	 

                                    

                                    
                                       

                                      
                                        
                                          
                                          

                                        

                                        
                                          8.12 -
18

                                          
                                            

                                          

                                        

                                        
                                          
                                          

                                        

                                      

                                       

                                    

                                  

                                

                              

                            

                          

                        

                      

                      Agreed as
of the date first above written:

                       

                      [NAME OF
ISSUING BANK]

                       

                       

                      By:
______________________________

                       

                      Name:

                      Title:

                       

                      Attachment
— Schedule I Reimbursement Agreement[s]

                       

                      
                        
                          
                          

                        

                        
                          8.12 -
19

                          
                            

                          

                        

                        
                          
                          

                        

                      

                       

                      Schedule
1 to

                      Waiver Letter (Letter of
Credit)

                       

                      REIMBURSEMENT
AGREEMENT[S]

                       

                       

                      
                        
                          
                          

                        

                        
                          8.12 -
Schedule 1

                          
                            

                          

                        

                        
                          
                          

                        

                      

                       

                      EXHIBIT
8.14

                      to Credit
Agreement

                       

                      [FORM
OF]

                      INSURANCE AND CONDEMNATION
PROCEEDS REQUEST CERTIFICATE

                       

                      
                         

                        
                          	 	 	 	Date:
      [___________  __, ____ ]

                        

                         

                      

                       

                      [ACCOUNTS
BANK]

                       

                      [ADDRESS]

                       

                      WestLB
AG, New York Branch,

                      as
Administrative Agent for the Lenders

                      1211 Ave
of Americas

                      New York,
NY 10036

                      Attention:
Yolette Salnave / Andrea Bailey

                      Facsimile:
212-302-7946

                      Email:
ny_agency services@westlb.com

                       

                       

                      Reference
is made to Section 8.14[(c)] [(d)] of the Credit Agreement (as amended,
supplemented or otherwise modified from time to time, the "Credit Agreement"), dated as of
February _________, 2007, 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, PACIFIC
ETHANOL IMPERIAL, 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 Borrowers' 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, UNION BANK OF CALIFORNIA, N.A., as Accounts Bank, WESTLB AG, NEW YORK
BRANCH, as Lead Arranger and Sole Bookrunner, MIZUHO CORPORATE BANK, LTD., as
Lead Arranger and Co-Syndication Agent, CIT CAPITAL SECURITIES LLC, as Lead
Arranger and Co-Syndication Agent, COOPERATIEVE CENTRALE
RAIFFEISEN­BOERENLEENBANK B.A., "RABOBANK NEDERLAND", NEW YORK BRANCH, as
Lead Arranger and Co-Documentation Agent, and BANCO SANTANDER CENTRAL HISPANO
S.A, NEW YORK BRANCH, as Lead Arranger and Co-Documentation Agent.

                       

                      Capitalized
terms used herein but not otherwise defined herein shall have the respective
meanings set forth in the Credit Agreement.

                       

                      
                        
                          
                          

                        

                        
                          8.14
-1

                          
                            

                          

                        

                        
                          
                          

                        

                      

                       

                      The
Borrowers hereby direct the Accounts Bank to withdraw and pay from the account
entitled [______], No. [______] (the "[Madera] [Boardman] [Stockton] [Brawley]
[Burley] Insurance and
Condemnation Proceeds Account"), on [__________], 20[___] (the
"Insurance and
Condemnation Proceeds
Withdrawal Date"), the amounts and to the payees, in each case as set
forth on Schedule
1 attached hereto.

                       

                      In
support of such direction, the undersigned, on behalf of the Borrowers, hereby
represents and certifies, as of the date hereof and as of the Insurance and
Condemnation Proceeds Withdrawal Date, as follows:

                       

                      (a)   the
undersigned is a Financial Officer of the Borrowers' Agent;

                       

                      (b)   this
Insurance and Condemnation Proceeds Request Certificate is being delivered
to the Accounts Bank and the Administrative Agent [in connection with a transfer
or withdrawal of funds pursuant to Section 8.14(c) of the Credit Agreement, no
fewer than three (3) Business Days in advance of] [in connection with a transfer
or withdrawal of funds pursuant to Section 8.14(d) of the Credit Agreement not
later than 12:00 Noon New York City time on] the Insurance and Condemnation
Proceeds Withdrawal Date and the Insurance and Condemnation Proceeds Withdrawal
Date is a Business Day;

                       

                      (c)   all
conditions set forth in the Credit Agreement for the withdrawals requested
hereby have been satisfied;

                       

                      (d)   the funds
to be withdrawn from the [Madera] [Boardman] [Stockton] [Brawley]
[Burley] Insurance and Condemnation Proceeds Account pursuant to this Insurance
and Condemnation Proceeds Request Certificate will be applied directly for the
replacement or repair of damaged assets relating to the [Madera] [Boardman]
[Stockton] [Brawley] [Burley] Plant to which such [Insurance Proceeds]
[Condemnation Proceeds] relate, in accordance with [Section 8.14(c) of the
Credit Agreement] [Section 8.14(d) of the Credit Agreement and the Restoration
or Replacement Plan attached hereto, which has been approved by [the
Administrative Agent (in the case of amounts less than or equal to fifteen
million Dollars ($15,000,000) arising from any one claim or any series of claims
relating to the same occurrence with respect to the same Plant)] [the Required
Lenders (in the case of amounts greater than fifteen million Dollars
($15,000,000) arising from any one claim or any series of claims relating to the
same occurrence with respect to the same Plant)] and by the Independent Engineer
in accordance with Section 8.14(d)(i) of the Credit Agreement];

                       

                      (e)   no
withdrawal has been made from any other Project Account to pay the amounts
requested hereby;

                       

                      (f)   this
Insurance and Condemnation Proceeds Request Certificate is being delivered,
and the withdrawals specified herein are being requested, in accordance with the
Credit Agreement and the other Transaction Documents; and

                       

                      (g)    no Notice of
Suspension has been delivered that has not been withdrawn and no
Default or Event of Default would occur as a result of the transfers or
withdrawals requested hereby.

                       

                      The
undersigned officer is executing this Insurance Proceeds Request Certificate not
in a individual capacity but in its capacity as an Authorized Officer of the
Borrowers' Agent.

                       

                      
                        
                          
                          

                        

                        
                          8.14
-2

                          
                            

                          

                        

                        
                          
                          

                        

                      

                      [The
remainder of this page is intentionally blank. The next page is the signature
page.]

                       

                      
                        
                          
                          

                        

                        
                          8.14
-3

                          
                            

                          

                        

                        
                          
                          

                        

                      

                       

                      IN
WITNESS WHEREOF, the undersigned has caused this Insurance and Condemnation
Proceeds Request Certificate to be executed and delivered as of the day and year
first above written.

                       

                       

                      
                        
                          	 	
                                  PACIFIC
      ETHANOL HOLDING CO. LLC,

                                  as
      Borrowers' Agent

                                	 
	 	 	 	 
	
                                   

                                	
                                  By:
      

                                	 	 
	 	 	Name:	 
	 	 	Title:
      Financial Officer	 
	 	 	 	 

                        

                      

                       

                      
                        
                          
                          

                        

                        
                          8.14
-4

                          
                            

                          

                        

                        
                          
                          

                        

                      

                       

                      Schedule
1 to

                      Insurance and Condemnation
Proceeds Request Certificate

                       

                      WITHDRAWALS FROM IMADERA1
[BOARDMAN] [STOCKTON]

                      IBRAWLEYI
[BURLEY'

                       

                      INSURANCE AND CONDEMNATION
PROCEEDS ACCOUNT

                       

                      [details
to be attached]

                       

                      I.    Withdrawals
from [Madera] [Boardman] [Stockton] [Brawley] [Burley] Insurance and
Condemnation Proceeds Account for the replacement or repair of damaged
assets.

                       

                      
                      

                       

                      
                        	Payee                                         	Amount	Wire
      Instructions
	 	$	 

                      

                       

                      
                        
                          
                          

                        

                        
                          8.14 -
Schedule 1

                          
                            

                          

                        

                        
                          
                          

                        

                      

                       

                      EXHIBIT
8.15

                      to Credit
Agreement

                      
                         

                        [FORM
OF]

                        EXTRAORDINARY PROCEEDS
RELEASE NOTICE

                         

                        
                          
                             

                            
                              	 	 	 	Date:
      [___________  __, ____ ]

                            

                             

                          

                        

                         

                        [ACCOUNTS
BANK]

                         

                        [ADDRESS]

                         

                         

                        Reference
is made to Section 8.15[(b)][(c)](i) of the Credit Agreement (as amended,
supplemented or otherwise modified from time to time, the "Credit
Agreement"), dated as of [___________________________], 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,
PACIFIC ETHANOL IMPERIAL, 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 Borrowers' 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, UNION BANK OF CALIFORNIA, N.A., as Accounts Bank, WESTLB AG,
NEW YORK BRANCH, as Lead Arranger and Sole Bookrunner, MIZUHO CORPORATE BANK,
LTD., as Lead Arranger and Co-Syndication Agent, CIT CAPITAL SECURITIES LLC, as
Lead Arranger and Co-Syndication Agent, COOPERATIEVE CENTRALE
RAIFFEISEN­BOERENLEENBANK B.A., "RABOBANK NEDERLAND", NEW YORK BRANCH, as
Lead Arranger and Co-Documentation Agent, and BANCO SANTANDER CENTRAL HISPANO
S.A, NEW YORK BRANCH, as Lead Arranger and Co-Documentation Agent.

                         

                        Capitalized
terms used herein but not otherwise defined herein shall have the respective
meanings set forth in the Credit Agreement.

                         

                        The
Borrowers hereby direct the Accounts Bank to withdraw and transfer, from the
account entitled [______], No. [______] (the "Extraordinary
Proceeds Account"), on [__________],
20[___]  (the
"Extraordinary Proceeds Release
Date"), [______] Dollars ([$______]) for deposit into the
Revenue Account.

                         

                        In
support of such direction, the undersigned, on behalf of the Borrowers, hereby
represents and certifies, as of the date hereof and as of the Extraordinary
Proceeds Release Date, as follows:

                         

                        (a)    The
undersigned is an Authorized Officer of the Borrowers' Agent.

                         

                        
                          
                            
                            

                          

                          
                            8.15 -
1

                            
                              

                            

                          

                          
                            
                            

                          

                        

                         

                        (b)   This
Extraordinary Proceeds Release Notice is being delivered to the Accounts Bank
not later than 12:00 Noon New York City time on the Extraordinary Proceeds
Release Date, and the Extraordinary Proceeds Release Date is a Business
Day.

                         

                        (c)   All
conditions set forth in the Credit Agreement for the transfer requested hereby
have been satisfied.

                         

                        [(d)    In the case
of transfers requested pursuant to Section 8.15(b)(i) of the Credit Agreement,
the aggregate total amount of all proceeds of asset disposals deposited in or
credited to the Extraordinary Proceeds Account during the Fiscal Year in which
this request is being made is less than two million five hundred thousand
Dollars ($2,500,000) (including any amounts previously withdrawn from the
Extraordinary Proceeds Account during this Fiscal Year in accordance with
Section 8.15(b)(i) of the Credit Agreement pursuant to any previous
Extraordinary Proceeds Release Notice).]

                         

                        [(d)    In the case
of transfers requested pursuant to Section 8.15(c)(i) of the Credit Agreement,
the aggregate total amount of all Project Document Termination Payments
deposited in or credited to the Extraordinary Proceeds Account during the Fiscal
Year in which this request is being made is less than five million Dollars
($5,000,000) (including any amounts previously withdrawn from the Extraordinary
Proceeds Account during this Fiscal Year in accordance with Section 8.15(c)(i)
of the Credit Agreement pursuant to any previous Extraordinary Proceeds Release
Notice).]

                         

                        (e)    No Notice of
Suspension is in effect and no Default or Event of Default would occur after
giving effect to any application of funds contemplated hereby.

                         

                        The
undersigned officer is executing this Extraordinary Proceeds Release Notice not
in an individual capacity but in its capacity as an Authorized Officer of the
Borrower's Agent.

                         

                        [The
remainder of this page is intentionally blank. The next page is the signature
page.]

                         

                        CC:    ADMINISTRATIVE
AGENT

                         

                        
                          
                            
                            

                          

                          
                            8.15 -
2

                            
                              

                            

                          

                          
                            
                            

                          

                        

                         

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

                         

                         

                        
                          
                            	 	
                                    PACIFIC
      ETHANOL HOLDING CO. LLC,

                                    as
      Borrowers' Agent

                                  	 
	 	 	 	 
	
                                     

                                  	
                                    By:
      

                                  	 	 
	 	 	Name:	 
	 	 	Title:	 
	 	 	 	 

                          

                           

                          
                            
                              
                              

                            

                            
                              8.15 -
3

                              
                                

                              

                            

                            
                              
                              

                            

                          

                        

                      

                       

                      EXHIBIT
8.16

                      to Credit
Agreement

                      
                         

                        [FORM
OF]

                        WARRANTY PROCEEDS REOUEST
CERTIFICATE

                        
                          
                             

                            
                              	 	 	 	Date:
      [___________  __, ____ ]

                            

                             

                             

                            [ACCOUNTS
BANK]

                             

                            [ADDRESS]

                          

                        

                         

                         

                        Reference
is made to Section 8.16(b) of the Credit Agreement (as amended, supplemented or
otherwise modified from time to time, the "Credit Agreement"), dated as of
[___________________________], 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,
PACIFIC ETHANOL IMPERIAL, 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 Borrowers' 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, UNION BANK OF CALIFORNIA, N.A., as Accounts Bank, WESTLB AG,
NEW YORK BRANCH, as Lead Arranger and Sole Bookrunner, MIZUHO CORPORATE BANK,
LTD., as Lead Arranger and Co-Syndication Agent, CIT CAPITAL SECURITIES LLC, as
Lead Arranger and Co-Syndication Agent, COOPERATIEVE CENTRALE
RAIFFEISEN­BOERENLEENBANK B.A., "RABOBANK NEDERLAND", NEW YORK BRANCH, as
Lead Arranger and Co-Documentation Agent, and BANCO SANTANDER CENTRAL HISPANO
S.A, NEW YORK BRANCH, as Lead Arranger and Co-Documentation Agent.

                         

                        Capitalized
terms used herein but not otherwise defined herein shall have the respective
meanings set forth in the Credit Agreement.

                         

                        The
Borrowers hereby direct the Accounts Bank to withdraw and pay from the account
entitled [______], No. [______] (the "[Madera] [Boardman] [Stockton]
[Brawley] [Burley] Warranty
Account"), on [__________], 20[___]  (the "Warranty
Proceeds Withdrawal Date"), the amounts
and to the payees, in each case as set forth on Schedule 1 attached
hereto.

                         

                        In
support of such direction, the undersigned, on behalf of the Borrowers, hereby
represents and certifies, as of the date hereof and as of the Warranty Proceeds
Withdrawal Date, as follows:

                         

                        
                          
                            
                            

                          

                          
                            8.16 -
1

                            
                              

                            

                          

                          
                            
                            

                          

                        

                         

                        (a)   This
Warranty Proceeds Request Certificate is being delivered to the Accounts
Bank not later than 12:00 noon New York City time on the Warranty Proceeds
Withdrawal Date, and the Warranty Proceeds Withdrawal Date is a Business
Day.

                         

                        (b)   The
undersigned is an Authorized Officer of the Borrowers' Agent.

                         

                        (c)   All
conditions set forth in the Credit Agreement for the withdrawals requested
hereby have been satisfied.

                         

                        (d)   The funds
to be withdrawn from the [Madera] [Boardman] [Stockton] [Brawley]
[Burley] Warranty Account pursuant to this Warranty Proceeds Request Certificate
will be applied directly to costs and expenses due and owing with respect to
Warranty Work to which such Warranty Proceeds relate that has been performed by
or on behalf of the Borrowers with respect to the [Madera] [Boardman] [Stockton]
[Brawley] [Burley] Plant, and the nature of such Warranty Work is described on
Schedule
2 hereto.

                         

                        (e)   No
withdrawal has been made from any other Project Account to pay the amounts
requested hereby.

                         

                        (f)   No Notice
of Suspension is in Effect and no Default or Event of Default has
occurred and is continuing or would occur as a result of the withdrawals
requested hereby.

                         

                        
                          CC:        
Administrative Agent

                           

                          Independent
Engineer

                           

                           

                          [The
remainder of this page is intentionally blank. The next page is the signature
page.]

                           

                          
                            
                              
                              

                            

                            
                              8.16 -
2

                              
                                

                              

                            

                            
                              
                              

                            

                          

                        

                         

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

                         

                        
                           

                          
                            
                              	 	
                                      PACIFIC
      ETHANOL HOLDING CO. LLC,

                                      as
      Borrowers' Agent

                                    	 
	 	 	 	 
	
                                       

                                    	
                                      By:
      

                                    	 	 
	 	 	Name:	 
	 	 	Title:
      Financial Officer	 
	 	 	 	 

                            

                             

                            
                              
                                
                                

                              

                              
                                8.16 -
3

                                
                                  

                                

                              

                              
                                
                                

                              

                            

                             

                            Schedule
1 to

                            Warranty Proceeds Request
Certificate

                          

                        

                         

                        WITHDRAWALS FROM [MADERA]
[BOARDMAN] [STOCKTON]

                         

                        [BRAWLEY]
[BURLEY]

                         

                        WARRANTY
ACCOUNT

                         

                        [details
to be attached]

                         

                        I.    Withdrawals
from [Madera] [Boardman] [Stockton] [Brawley] [Burley] Warranty

                         

                        Proceeds
Account for the payment of amounts due and owing for warranty work.

                        
                           

                          
                          

                           

                          
                            	Payee                                         	Amount	Wire
      Instructions
	 	$	 

                          

                           

                          
                            
                              
                              

                            

                            
                              8.16 -
4

                              
                                

                              

                            

                            
                              
                              

                            

                          

                        

                         

                        Schedule
2 to

                        Warranty Proceeds Request
Certificate

                         

                        DESCRIPTION
OF WARRANTY WORK

                         

                        [Details
to be attached]

                         

                         

                        
                          
                            
                            

                          

                          
                            8.16 -
5

                            
                              

                            

                          

                          
                            
                            

                          

                        

                      

                       

                      EXHIBIT
11.03

                      to 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 Credit Agreement (as amended, restated,
supplemented or otherwise modified from time to time, the "Credit Agreement"),
dated as of February ______, 2007, 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,
PACIFIC ETHANOL IMPERIAL, 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 Borrowers' 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, UNION BANK OF CALIFORNIA, N.A., as Accounts Bank, WESTLB AG,
NEW YORK BRANCH, as Lead Arranger and Sole Bookrunner, MIZUHO CORPORATE BANK,
LTD., as Lead Arranger and Co-Syndication Agent, CIT CAPITAL SECURITIES LLC, as
Lead Arranger and Co-Syndication Agent, COOPERATIEVE CENTRALE
RAIFFEISEN­BOERENLEENBANK B.A., "RABOBANK NEDERLAND", NEW YORK BRANCH, as
Lead Arranger and Co-Documentation Agent, and BANCO SANTANDER CENTRAL HISPANO
S.A, NEW YORK BRANCH, as Lead Arranger and Co- Documentation Agent;

                         

                        WHEREAS,
Assignor desires to assign certain of its interests under the Credit Agreement
to Assignee in accordance with Section 11.03(b) thereof;

                         

                        WHEREAS,
as provided under the Credit Agreement, Assignor is a Lender of [Tranche A
Construction Loans] [Tranche B Construction Loans] [Working Capital Loans]
[Tranche A Term Loans] [Tranche B Term 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;

                         

                        
                          
                            
                            

                          

                          
                            11.03 -
1

                            
                              

                            

                          

                          
                            
                            

                          

                        

                         

                        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
Credit Agreement and the other Financing Documents (which includes the
outstanding Loans disbursed by and owing to, and the undisbursed Commitments of,
Assignor and Assignor's participation in the Issuing Bank's liability under each
outstanding Letter of Credit), 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:

                         

                        Section
1. Definitions.
All capitalized terms not otherwise defined herein shall have the respective
meanings set forth in the 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 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 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 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 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.

                         

                        
                          
                            
                            

                          

                          
                            11.03 -
2

                            
                              

                            

                          

                          
                            
                            

                          

                        

                         

                        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.]

                         

                        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 Credit Agreement
or the other Financing Documents or the execution, legality, validity,
enforceability or genuineness, or sufficiency of value of the 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, any other Loan Party or any Project Party or the performance or
observance by any Borrower or any other Person of any of its obligations under
the 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
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 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 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 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 Credit Agreement, such
actions have and will be made without recourse to, or representation or
warranty, by any Senior Secured Party.

                         

                        
                          
                            
                            

                          

                          
                            11.03 -
3

                            
                              

                            

                          

                          
                            
                            

                          

                        

                         

                        (c)    The Assignee
further agrees to furnish the tax form required by Section 4.07(e) (if so
required) of the 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 Credit Agreement [, and (vi)
consent by the Borrowers' Agent to this Agreement and the assignment
contemplated hereby]1.

                         

                        (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:

                         

                         

                          
                            

                          

                        

                        1 The
Acknowledgment of this Agreement by the Borrowers' Agent is required only if the
Assignor transfers or assigns its rights or obligations under any Tranche A Loan
or any Working Capital Loan, and such transfer or assignment follows a
Successful Syndication, provided no Default or Event of Default has occurred and
is continuing.

                         

                        
                          
                            
                            

                          

                          
                            11.03 -
4

                            
                              

                            

                          

                          
                            
                            

                          

                        

                         

                        "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 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 Credit Agreement, and shall have all the rights and obligations of a
"Lender" under the 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 Credit Agreement) and be released from its obligations under the 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 -
5

                            
                              

                            

                          

                          
                            
                            

                          

                        

                         

                        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 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 -
6

                            
                              

                            

                          

                          
                            
                            

                          

                        

                         

                        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 [and the Borrowers' Agent]]
[___________, 20[___]
(the "Trade Date")].

                         

                        
                           

                          
                            
                              	 	
                                      [ASSIGNOR]

                                    	 
	 	 	 	 
	
                                       

                                    	
                                      By:
      

                                    	 	 
	 	 	Name:	 
	 	 	Title:
      	 
	 	 	 	 

                            

                            
                               

                              
                                
                                  	 	
                                          [ASSIGNEE]

                                        	 
	 	 	 	 
	
                                           

                                        	
                                          By:
      

                                        	 	 
	 	 	Name:	 
	 	 	Title:
      	 
	 	 	 	 

                                

                              

                            

                          

                        

                         

                         

                        Accepted
and Acknowledged

                        this
___ day of _______, 20___

                         

                         

                        WESTLB
AG, NEW YORK BRANCH,

                        as
Administrative Agent

                         

                        By: ______________________________

                        Name:

                        Title:

                         

                        By:
______________________________

                        Name:

                        Title:

                         

                        
                          
                            
                            

                          

                          
                            11.03 -
7

                            
                              

                            

                          

                          
                            
                            

                          

                           

                          [(If
Applicable)

                        

                         

                        PACIFIC
ETHANOL HOLDING CO. LLC,

                        as
Borrowers' Agent

                         

                        By:
______________________________

                        Name:

                        Title:]

                         

                        
                          
                            
                            

                          

                          
                            11.03 -
8

                            
                              

                            

                          

                          
                            
                            

                          

                        

                         

                        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*

                                
	
                                  Tranche
      A Construction Loans

                                	
                                  $

                                	
                                  $

                                	
                                  %

                                	
                                  $

                                	
                                  $

                                	
                                  $

                                	
                                  $

                                
	
                                  Tranche
      B Construction Loans

                                	
                                  $

                                	
                                  $

                                	
                                  %

                                	
                                  $

                                	
                                  $

                                	
                                  $

                                	
                                  $

                                
	
                                  Working
      Capital Loans

                                	
                                  $

                                	
                                  $

                                	
                                  %

                                	
                                  $

                                	
                                  $

                                	
                                  $

                                	
                                  $

                                
	
                                  Tranche
      A Term Loans

                                	
                                  $

                                	
                                  $

                                	
                                  %

                                	
                                  $

                                	
                                  $

                                	
                                  $

                                	
                                  $

                                
	
                                  Tranche
      B Term 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.

                         

                        
                          
                            
                            

                          

                          
                            11.03 -
9

                            
                              

                            

                          

                           

                           

                          

                            SCHEDULE 1.01(a) 

                            to Credit
Agreement

                             

                            LENDERS,
LOAN COMMITMENTS AND OFFICES

                             

                             I. TRANCHE
A LOANS

                             

                            
                              	
                                      TRANCHE
      A

                                      LENDER

                                    	
                                      TRANCHE
      A

                                      CONSTRUCTION

                                      LOAN
      COMMITMENT

                                    	
                                      TRANCHE
      A

                                      TERM
      LOAN COMMITMENT

                                    	
                                      DOMESTIC OFFICE

                                    	
                                      EURODOLLAR

                                      OFFICE

                                       

                                    
	
                                      WestLB
      AG, New York Branch

                                    	
                                      $33,128,000.00

                                    	
                                      $33,128,000.00

                                    	
                                      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

                                    
	
                                      Mizuho
      Corporate Bank, Ltd.

                                    	
                                      $33,128,000.00

                                    	
                                      $33,128,000.00

                                    	
                                      Mizuho
      Corporate Bank, Ltd.

                                      1251
      Avenue of the Americas

                                      New
      York, NY 10020

                                    	
                                      Mizuho
      Corporate Bank, Ltd.

                                      1251
      Avenue of the Americas

                                      New
      York, NY 10020

                                    
	
                                      Banco
      Santander Central
      Hispano, S.A.

                                    	
                                      $33,128,000.00

                                    	
                                      $33,128,000.00

                                    	
                                      Banco
      Santander Central Hispano, S.A.

                                      45
      East 53rd St.

                                      New
      York, NY 10022

                                      Attention:
      Ligia Castro

                                      Telephone:
      212-350-3677

                                      Facsimile:
      212-350-3647

                                    	
                                      Banco
      Santander Central Hispano, S.A.

                                      45
      East 53rd
      St.

                                      New
      York, NY 10022

                                      Attention:
      Ligia Castro

                                      Telephone:
      212-350-3677

                                      Facsimile:
      212-350-3647

                                    

                            

                            

                             

                             

                             

                            
                              
                                
                                

                              

                              
                                1.01(a)-1

                                
                                  

                                

                              

                              
                                
                                

                              

                            

                             

                             

                            
 

                            
                              	
                                      TRANCHE
      A

                                      LENDER

                                    	
                                      
                                        TRANCHE
      A

                                        CONSTRUCTION

                                        LOAN
      COMMITMENT

                                      

                                    	
                                      
                                        TRANCHE
      A

                                        TERM
      LOAN COMMITMENT

                                      

                                    	
                                      
                                        DOMESTIC OFFICE

                                      

                                       

                                    	
                                      
                                        EURODOLLAR

                                        OFFICE

                                      

                                    
	
                                      CIT
      Capital USA Inc.

                                    	
                                      $33,128,000.00

                                    	
                                      $33,128,000.00

                                    	
                                      CIT
      Capital USA Inc.

                                      505
      Fifth Ave., 10th
      Floor

                                      New
      York, NY 10017

                                      Attention:
      Robert Sexton,

                                      Managing
      Director

                                      Telephone:
      212-771-6006

                                      Facsimile:
      212-771-6023

                                    	
                                      CIT
      Capital USA Inc.

                                      505
      Fifth Ave., 10th
      Floor

                                      New
      York, NY 10017

                                      Attention:
      Robert Sexton,

                                      Managing
      Director

                                      Telephone:
      212-771-600

                                       Facsimile:
      212-771-6023

                                    
	
                                      Cooperatieve
      Centrale Raiffeisen-

                                      Boerenleenbank
      B.A., "Rabobank

                                      Nederland,"
      New York Branch

                                    	
                                      $23,128,000.00

                                    	
                                      $23,128,000.00

                                    	
                                      Cooperatieve
      Centrale Raiffeisen-

                                      Boerenleenbank
      B.A., "Rabobank Nederland," New York Branch

                                      123
      North Wacker Drive, Ste. 2100

                                      Chicago,
      IL 60606

                                      Attention:
      Brad Peterson

                                      Telephone:
      312-408-8222

                                      Facsimile:
      312-408-8240

                                    	
                                      Cooperatieve
      Centrale Raiffeisen-

                                      Boerenleenbank
      B.A., "Rabobank Nederland," New York Branch

                                      123
      North Wacker Drive, Ste. 2100

                                      Chicago,
      IL 60606

                                      Attention:
      Brad Peterson

                                      Telephone:
      312-408-8222

                                      Facsimile:
      312-408-8240

                                    
	
                                      Metropolitan
      Life Insurance Company

                                    	
                                      $27,270,000.00

                                    	
                                      $27,270,000.00

                                    	
                                      JPMorgan
      Chase Bank

                                      4
      New York Plaza

                                      New
      York, NY 10005

                                      Attention:
      Michael T. Foresta

                                      Telephone:
      212-552-2845

                                      Facsimile:
      212-552-0422

                                    	
                                      n/a

                                    
	
                                      Norddeutsche
      Landesbank

                                      Girozentrale
      New York Branch and/or Cayman Island Branch

                                    	
                                      $27,270,000.00

                                    	
                                      $27,270,000.00

                                    	
                                      Nord/LB
      New York Branch

                                      1114
      Avenue of the Americas,

                                      37th
      Floor

                                      New
      York, NY 10036

                                    	
                                      Nord/LB
      Cayman Island Branch

                                      114
      Ave. of the Americas, 

                                      37th

                                      New
      York, NY 10036

                                    

                            

                            

                             

                             

                            
                              
                                
                                

                              

                              
                                1.01(a)-2

                                
                                  

                                

                              

                              
                                
                                

                              

                            

                             

                             

                            
                              	
                                      
                                        TRANCHE
      A

                                        LENDER

                                      

                                    	
                                      
                                        
                                          TRANCHE
      A

                                          CONSTRUCTION

                                          LOAN
      COMMITMENT

                                        

                                      

                                    	
                                      
                                        
                                          TRANCHE
      A

                                          TERM
      LOAN COMMITMENT

                                        

                                      

                                    	
                                      DOMESTIC
      OFFICE

                                       

                                    	
                                      
                                        EURODOLLAR
      OFFICE

                                      

                                    
	
                                      GreenStone
      Farm Credit Services, ACA/FLCA

                                    	
                                      $9,090,000.00

                                    	
                                      $9,090,000.00

                                    	
                                      GreenStone
      Farm Credit Services, ACA/FLCA

                                      1760
      Abbey Road, Ste. 320

                                      East
      Lansing, MI 48823

                                      Attention:
      Ben Mahlich

                                      Telephone:
      517-318-4110

                                      Facsimile:
      517-318-4148

                                    	
                                      GreenStone
      Farm Credit Services, ACA/FLCA 

                                      1760
      Abbey Road, Ste. 320

                                      East
      Lansing, MI 48823

                                      Attention:
      Ben Mahlich

                                      Telephone:
      517-318-4110

                                      Facsimile:
      517-318-4148

                                    
	
                                      Nordkap
      Bank AG

                                    	
                                      $9,090,000.00

                                    	
                                      $9,090,000.00

                                    	
                                      n/a

                                    	
                                      Nordkap
      Bank AG Thurgauerstrasse 54

                                      8050
      Zurich, Switzerland- CH

                                      Attention:
      Batchimeg Gadola

                                      Telephone:
      41-44-306­4920

                                      Facsimile:
      41-44-306-

                                      4911

                                    
	
                                      Northwest
      Farm Credit Services, FLCA

                                    	
                                      $9,090,000.00

                                    	
                                      $9,090,000.00

                                    	
                                      Northwest
      Farm Credit Services, FLCA

                                      1700
      South Assembly

                                      St.
      Spokane, WA 99224 

                                      Attention:
      Jim Allen

                                      Telephone:
      509-340-5555

                                      Facsimile
      509-340-5503

                                    	
                                      Northwest
      Farm Credit Services, FLCA

                                      1700
      South Assembly

                                      St.
      Spokane, WA 99224 

                                      Attention:
      Jim Allen

                                      Telephone:
      509-340-5555

                                      Facsimile
      509-340-5503

                                    
	
                                      ShoreBank
      Pacific

                                    	
                                      $2,550,000.00

                                    	
                                      $2,550,000.00

                                    	
                                      ShoreBank
      Pacific

                                      203
      Howerton Way SE,

                                      PO
      Box 400

                                      Ilwaco,
      WA 98631

                                      Attention:
      Randell Leach

                                      Telephone:
      503-916-1552

                                      Facsimile:
      503-493-9604

                                    	
                                      n/a

                                    

                            

                            

                             

                             

                            
                              
                                 

                              

                              
                                1.01(a)-3

                                
                                  

                                

                              

                              
                                 

                              

                            

                            II.
TRANCHE B LOANS

                             

                            
                            

                             

                            
                              	
                                      
                                        
                                          TRANCHE
      B

                                          LENDER

                                        

                                      

                                    	
                                      
                                        
                                          TRANCHE
      B

                                          CONSTRUCTION

                                          LOAN
      COMMITMENT

                                        

                                      

                                    	
                                      
                                        
                                          TRANCHE
      B

                                          TERM
      LOAN COMMITMENT

                                        

                                      

                                    	
                                      DOMESTIC
      OFFICE

                                       

                                    	
                                      EURODOLLAR
      OFFICE

                                    
	
                                      WestLB
      AG, New York Branch

                                    	
                                      $50,000,000.00

                                    	
                                      $50,000,000.00

                                    	
                                      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

                                    
	
                                      Cooperatieve
      Centrale Raiffeisen-

                                      Boerenleenbank B.A., "Rabobank Nederland,"
      New York
      Branch

                                    	
                                      $10,000,000.00

                                    	
                                      $10,000,000.00

                                    	
                                      Cooperatieve
      Centrale Raiffeisen-

                                      Boerenleenbank
      B.A., "Rabobank Nederland," New York Branch

                                      123
      North Wacker Drive, Ste. 2100

                                      Chicago,
      IL 60606

                                      Attention:
      Brad Peterson

                                      Telephone:
      312-408-8222

                                      Facsimile:
      312-408-8240

                                    	
                                      Cooperatieve
      Centrale Raiffeisen-

                                      Boerenleenbank
      B.A., "Rabobank Nederland," New York Branch

                                      123
      North Wacker Drive, Ste. 2100

                                      Chicago,
      IL 60606

                                      Attention:
      Brad Peterson

                                      Telephone:
      312-408-8222

                                      Facsimile:
      312-408-8240

                                    

                            

                            

                             

                             

                            
                              
                                 

                              

                              
                                1.01(a)-4

                                
                                  

                                

                              

                              
                                 

                              

                            

                            III.
WORKING CAPITAL LOANS

                             

                            
                              	
                                      WORKING
      CAPITAL

                                      LENDER

                                    	
                                      WORKING
      CAPITAL

                                      CONSTRUCTION
      

                                      LOAN
      COMMITMENT

                                    	
                                      DOMESTIC
      OFFICE

                                    	
                                      EURODOLLAR
      OFFICE

                                    
	
                                      WestLB
      AG, New York Branch

                                    	
                                      $3,312,000.00

                                    	
                                      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

                                    
	
                                      Mizuho
      Corporate Bank, Ltd.

                                    	
                                      $3,312,000.00

                                    	
                                      Mizuho
      Corporate Bank, Ltd.

                                      1251
      Ave. of the Americas

                                      New
      York, NY 10020

                                    	
                                      Mizuho
      Corporate Bank, Ltd.

                                      1251
      Ave. of the Americas

                                      New
      York, NY 10020

                                    
	
                                      Banco
      Santander Central Hispano, S.A.

                                    	
                                      $3,312,000.00

                                    	
                                      Banco
      Santander Central Hispano, S.A.

                                      45
      East 53rd
      St.

                                      New
      York, NY 10022

                                      Attention:
      Ligia Castro

                                      Telephone:
      212-350-3677 Facsimile: 212-350-3647

                                    	
                                      Banco
      Santander Central Hispano, S.A. 45 East 53rd
      St.

                                      New
      York, NY 10022

                                      Attention:
      Ligia Castro

                                      Telephone:
      212-350-3677

                                      Facsimile:
      212-350-3647

                                    
	
                                      CIT
      Capital USA Inc.

                                    	
                                      $3,312,000.00

                                    	
                                      C1T
      Capital USA Inc.

                                      505
      Fifth Ave., 10th

                                      Floor
      New York, NY 10017

                                      Attention:
      Robert Sexton,

                                      Managing
      Director

                                      Telephone:
      212-771-6006

                                      Facsimile:
      212-771-6023

                                    	
                                      C1T
      Capital USA Inc.

                                      505
      Fifth Ave., 10th
      Floor

                                      New
      York, NY 10017

                                      Attention:
      Robert Sexton, Managing Director

                                      Telephone:
      212-771-6006

                                      Facsimile:
      212-771-6023

                                    
	
                                      Cooperatieve
      Centrale Raiffeisen-

                                      Boerenleenbank
      B.A., "Rabobank Nederland," New York Branch

                                    	
                                      $3,312,000.00

                                    	
                                      Cooperatieve
      Centrale Raiffeisen- Boerenleenbank B.A., "Rabobank Nederland," New York
      Branch

                                      123
      North Wacker Drive, Ste. 2100

                                      Chicago,
      IL 60606

                                      Attention:
      Brad Peterson

                                      Telephone:
      312-408-8222

                                      Facsimile:
      312-408-8240

                                    	
                                      CoOperatieve
      Centrale Raiffeisen­Boerenleenbank B.A., "Rabobank Nederland," New
      York Branch

                                      123
      North Wacker Drive, Ste. 2100 Chicago, IL 60606

                                      Attention:
      Brad Peterson

                                      Telephone:
      312-408-8222

                                      Facsimile:
      312-408-8240

                                    

                            

                            

                             

                             

                            
                              
                                 

                              

                              
                                1.01(a)-5

                                
                                  

                                

                              

                              
                                 

                              

                            

                            

                             

                            

                            
                              	
                                      WORKING
      CAPITAL

                                      LENDER

                                    	
                                      WORKING
      CAPITAL

                                      CONSTRUCTIO

                                       LOAN
      COMMITMENT

                                    	
                                      DOMESTIC
      OFFICE

                                    	
                                      EURODOLLAR
      OFFICE

                                    
	
                                      Metropolitan
      Life Insurance Company

                                    	
                                      $2,730,000.00

                                    	
                                      JPMorgan
      Chase Bank

                                      4
      New York Plaza

                                      New
      York, NY 10005

                                      Attention:
      Michael T. Foresta

                                      Telephone:
      212-552-2845

                                      Facsimile:
      212-552-0422

                                    	
                                      n/a

                                    
	
                                      Norddeutsche

                                      Landesbank

                                      Girozentrale
      New York Branch and/or Cayman Island Branch

                                    	
                                      $2,730,000.00

                                    	
                                      Nord/LB
      New York Branch

                                      1114 Ave. of the Americas, 37th
      Floor

                                      New
      York, NY 10036

                                    	
                                      Nord/LB
      Cayman Island Branch

                                      1114
      Ave. of the Americas, 37th
      Floor

                                      New
      York, NY 10036

                                    
	
                                      GreenStone
      Farm Credit Services, ACA/FLCA

                                    	
                                      $910,000.00

                                    	
                                      GreenStone
      Farm Credit Services, ACA/FLCA

                                      1760
      Abbey Road, Suite 320

                                      East
      Lansing, MI 48823

                                      Attention:
      Ben Mahlich

                                      Telephone:
      517-318-4110

                                      Facsimile:
      517-318-4148

                                    	
                                      GreenStone
      Farm Credit Services, ACA/FLCA

                                      1760
      Abbey Road, Suite 320

                                      East
      Lansing, M1 48823

                                      Attention:
      Ben Mahlich

                                      Telephone:
      517-318-4110

                                      Facsimile:
      517-318-4148

                                    
	
                                      Nordkap
      Bank AG

                                    	
                                      $910,000.00

                                    	
                                      n/a

                                    	
                                      Nordkap
      Bank AG

                                      Thurgauerstrasse
      54

                                      8050
      Zurich, Switzerland-CH

                                      Attention:
      Batchimeg Gadola

                                      Telephone:
      41-44-306-4920

                                      Facsimile:
      41-44-306-4911

                                    
	
                                      Northwest
      Farm Credit Services, FLCA

                                    	
                                      $910,000.00

                                    	
                                      Northwest
      Farm Credit Services, FLCA 1700 South Assembly St.

                                      Spokane,
      WA 99224

                                      Attention:
      Jim Allen

                                      Telephone:
      509-340-5555

                                      Facsimile
      509-340-5503

                                    	
                                      Northwest
      Farm Credit Services, FLCA

                                      1700
      South Assembly St.

                                      Spokane,
      WA 99224

                                      Attention:
      Jim Allen

                                      Telephone:
      509-340-5555

                                      Facsimile
      509-340-5503

                                    

                            

                            

                             

                             

                            
                              
                                 

                              

                              
                                1.01(a)-6

                                
                                  

                                

                              

                              
                                 

                              

                            

                             

                            

                             

                            
                              	
                                      WORKING
      CAPITALLENDER

                                    	
                                      WORKING
      CAPITAL

                                      CONSTRUCTION

                                      LOAN
      COMMITMENT

                                    	
                                      DOMESTIC
      OFFICE

                                    	
                                      EURODOLLAR
      OFFICE

                                    
	
                                      ShoreBank
      Pacific

                                       

                                    	
                                      $250,000.00

                                    	
                                      ShoreBank
      Pacific

                                      203
      Howerton Way SE, PO Box 400

                                       Ilwaco,
      WA 98631

                                      Attention:
      Randell Leach

                                      Telephone:
      503-916-1552

                                       Facsimile:
      5 03 -493-9604

                                       

                                    	
                                      n/a

                                    

                            

                            

                             

                            
                              
                                 

                              

                              
                                1.01(a)-7

                                
                                  

                                

                              

                              
                                 

                              

                            

                            
SCHEDULE
2.08(e)

                             

                            1. Ethanol Production
Capacity. In the event that any Plant achieves its Commercial Operation
Date and fails to meet such Plant's Performance Guarantee for ethanol production
capacity, then both the Construction Loan Commitments for such Plant and the
Term Loan Commitments shall be automatically and permanently reduced on the
Commercial Operation Date for such Plant by $1.15384615 for each denatured
gallon (or which equals $1.21153846 for each undenatured gallon) per year of
deviation below the Performance Guarantee for ethanol production capacity for
such Plant.

                             

                            2. Other Performance
Criteria. In the event that any Plant achieves its Commercial Operation
Date and fails to meet such Plant's Performance Guarantees for corn yield,
electricity consumption or natural gas consumption, both the Construction Loan
Commitments for such Plant and the Term Loan Commitments shall be automatically
and permanently reduced on the Commercial Operation Date for such Plant in the
manner set forth below.

                             

                            The
impact of deviations from each Plant's Performance Guarantees for corn yield,
electricity consumption or natural gas consumption shall be calculated on an
aggregate basis for such Plant, and the impact of performance better than the
level of such Performance Guarantees shall be set off against the impact of
performance lower than the level of such Performance Guarantees; provided, however, in
no event shall this result in an increase in either the Construction Loan
Commitments for such Plant or the Term Loan Commitments.

                             

                            A.
Madera Plant

                             

                            
                              	
                                      Performance
      Criteria

                                    	
                                      Impact
      on Commitment

                                    
	 
      	 
      
	
                                      Corn
      Yield

                                    	
                                      $225,908
      per 0.01 undenatured gallon/bushel of deviation from the Performance
      Guarantee for corn yield for the Madera Plant

                                    
	
                                      Electricity
      Consumption

                                    	
                                      $64,214
      per 0.01 kWh/undenatured gallon of deviation from the Performance
      Guarantee for electricity consumption for the Madera
  Plant

                                    
	
                                      Natural
      Gas Consumption

                                    	
                                      $61,035
      per 100 natural gas BTUs/undenatured gallon of deviation from the
      Performance Guarantee for natural
      gas consumption for the Madera Plant

                                    

                            

                             

                             

                            

                            
                              
                                
                                

                              

                              
                                2.08(e)-1

                                
                                  

                                

                              

                              
                                
                                

                              

                            

                             

                             

                            B.      Boardman
Plant

                             

                            
                              	
                                      Performance
      Criteria

                                    	
                                      Impact
      on Commitment

                                    
	 
      	 
      
	
                                      Corn
      Yield

                                    	
                                      $226,319
      per 0.01 undenatured gallon/bushel of deviation from the Performance
      Guarantee for corn yield for the Boardman Plant

                                    
	
                                      Electricity
      Consumption

                                    	
                                      $39,452
      per 0.01 kWh/undenatured gallon of deviation from the Performance
      Guarantee for electricity consumption for the Boardman
    Plant

                                    
	
                                      Natural
      Gas Consumption

                                    	
                                      $58,592
      per 100 natural gas BTUs/undenatured gallon of deviation from the
      Performance Guarantee for natural gas consumption for the Boardman
      Plant

                                    

                            

                            

                             

                            C.       Stockton
Plant

                             

                            
                              	
                                      Performance
      Criteria

                                    	
                                      Impact
      on Commitment

                                    
	 
      	 
      
	
                                      Corn
      Yield

                                    	
                                      $406,449
      per 0.01 undenatured gallon/bushel of deviation from the Performance
      Guarantee for corn yield for the Stockton Plant

                                    
	
                                      Electricity
      Consumption

                                    	
                                      $108,778
      per 0.01 kWh/undenatured gallon of deviation from the Performance
      Guarantee for electricity consumption for the Stockton
    Plant

                                    
	
                                      Natural
      Gas Consumption

                                    	
                                      $108,835
      per 100 natural gas BTUs/undenatured
      gallon of deviation from the Performance Guarantee for natural gas
      consumption for the Stockton
Plant

                                    

                            

                            

                             

                             

                            

                            
                              
                                
                                   

                                

                                
                                  2.08(e)-2

                                  
                                    

                                  

                                

                                
                                   

                                

                              

                            

                            

                             

                            D.
Brawley Plant

                             

                            
                              	
                                      Performance
      Criteria

                                    	
                                      Impact
      on Commitment

                                    
	 
      	 
      
	
                                      Corn
      Yield

                                    	
                                      $413,714
      per 0.01 undenatured gallon/bushel of deviation from the Performance
      Guarantee for corn yield for the Brawley Plant

                                    
	
                                      Electricity
      Consumption

                                    	
                                      $104,089
      per 0.01 kWh/undenatured gallon of deviation from the Performance
      Guarantee for electricity consumption for the Brawley
  Plant

                                    
	
                                      Natural
      Gas Consumption

                                    	
                                      $109,929
      per 100 natural gas BTUs/undenatured gallon of deviation from the
      Performance Guarantee for natural gas consumption for the Brawley
      Plant

                                    

                            

                            

                             

                             

                            

                            
                              
                                
                                   

                                

                                
                                  2.08(e)-3

                                  
                                    

                                  

                                

                                
                                   

                                

                              

                            

                            

                            E.
Burley Plant

                             

                            
                              	
                                      Corn
      Yield

                                    	
                                      $344,122
      per 0.01 undenatured gallon/bushel of deviation from the Performance
      Guarantee for corn yield for the Burley Plant

                                    
	
                                      Electricity
      Consumption

                                    	
                                      $42,739
      per 0.01 kWh/undenatured gallon of deviation from the

                                      Performance
      Guarantee for electricity consumption for the Burley
  Plant

                                    
	
                                      Natural
      Gas Consumption

                                    	
                                      $92,480
      per 100 natural gas BTUs/undenatured gallon of deviation from the
      Performance Guarantee for natural gas consumption for the Burley
      Plant

                                    

                            

                            

                             

                             

                             

                            

                            
                              
                                
                                   

                                

                                
                                  2.08(e)-4

                                  
                                    

                                  

                                

                                
                                   

                                

                              

                            

                            

                              SCHEDULE
2.09

                               to Credit
Agreement

                               

                              TRANCHE REALLOCATION
ELIGIBLE

                               

                               

                              LENDERS AND
COMMITMENTS

                               

                              
                                	
                                        TRANCHE
      REALLOCATION ELIGIBLE LENDER

                                      	TRANCHE REALLOCATION - ELIGIBLE
      COMMITMENTS
	
                                        WestLB
      AG, New York Branch

                                      	
                                        $10,000,000.00

                                      
	
                                        Mizuho
      Corporate Bank, Ltd.

                                      	
                                        $10,000,000.00

                                      
	
                                        Banco
      Santander Central Hispano, S.A.

                                      	
                                        $10,000,000.00

                                      
	
                                        CIT
      Capital USA Inc.

                                      	
                                        $10,000,000.00

                                      

                              

                              

                               

                               

                               

                              
                                
                                   

                                

                                
                                  2.09-1

                                  
                                    

                                  

                                

                                
                                   

                                

                              

SCHEDULE
5.11

                            
                               to Credit
Agreement

                               

                              CONTRACTS

                               

                              PART
A

                               

                              I.
Pacific Ethanol Madera LLC Project Documents

                               

                              
                                	
                                        1.

                                      	
                                        Amended
      and Restated Phase 1 Design-Build Agreement, dated November 2, 2005,
      between Pacific Ethanol Madera LLC and W.M. Lyles
  Co.

                                      

                              

                               

                              
                                	
                                        2.

                                      	
                                        Phase
      2 Design-Build Agreement, dated November 2, 2005, between Pacific Ethanol
      Madera LLC and W.M. Lyles Co.

                                      

                              

                               

                              
                                	
                                        3.

                                      	
                                        Second
      Amended and Restated Ethanol Marketing Agreement (Madera Project), dated
      the Closing Date, between Pacific Ethanol Madera LLC and Kinergy
      Marketing, LLC *

                                      

                              

                               

                              
                                	
                                        4.

                                      	
                                        WDG
      Marketing and Services Agreement, dated March 4, 2005, among Pacific
      Ethanol, Inc., Phoenix Bio Industries and Western Milling
    LLC

                                      

                              

                               

                              
                                	
                                        5.

                                      	
                                        Second
      Amended and Restated Operation and Maintenance Agreement (Madera), dated
      the Closing Date, between Pacific Ethanol Madera LLC and Pacific Ethanol
      California, Inc. *

                                      

                              

                               

                              
                                	
                                        6.

                                      	
                                        License
      of Technology, dated November 3, 2005, between Pacific Ethanol Madera LLC
      and Delta-T Corporation

                                      

                              

                               

                              
                                	
                                        7.

                                      	
                                        Payoff
      Letter, dated the Closing Date, among Pacific Ethanol Madera LLC, Hudson
      United Capital, a Division of TD Banknorth, N.A. and Comerica
      Bank

                                      

                              

                               

                              
                                	
                                        8.

                                      	
                                        Each
      of the contracts, agreements, instruments, letters, understandings, or
      other documentation to which Pacific Ethanol Madera LLC is a party or by
      which it or any of its properties is bound which are listed on the Title
      Insurance Policy for the Madera Site delivered on the Closing Date
      pursuant to Section 6.01(r) of the Credit
  Agreement.

                                      

                              

                               

                              II.
Pacific Ethanol Columbia, LLC Project Documents

                               

                              
                                	
                                        1.

                                      	
                                        Construction
      Agreement for the Boardman Project, dated August 28, 2006, between Pacific
      Ethanol Columbia, LLC and Parsons RCIE
Inc.

                                      

                              

                               

                              
                                	
                                        2.

                                      	
                                        Engineering,
      Procurement and Technology License Agreement, dated September 6, 2006,
      between Pacific Ethanol Columbia, LLC and Delta-T
    Corporation

                                      

                              

                               

                              
                                
                                   

                                

                                
                                  5.11-1

                                  
                                    

                                  

                                

                                
                                   

                                

                              

                              
                                	
                                        3.

                                      	
                                        Construction
      Management Agreement (Boardman Project), dated the Closing Date, between
      Pacific Ethanol Columbia, LLC and Pacific Ethanol California, Inc.
      *

                                      

                              

                               

                              
                                	
                                        4.

                                      	
                                        Construction
      Contract (Boardman Grain Facilities), dated June 9, 2006, between Pacific
      Ethanol Columbia, LLC and the Ken Bratney
  Company

                                      

                              

                               

                              
                                	
                                        5.

                                      	
                                        Construction
      Contract, dated May 18, 2006, between Pacific Ethanol Columbia, LLC and
      Swaggart Brothers, Inc.

                                      

                              

                               

                              
                                	
                                        6.

                                      	
                                        Ethanol
      Marketing Agreement (Boardman Project), dated the Closing Date, between
      Pacific Ethanol Columbia, LLC and Kinergy Marketing, LLC
  *

                                      

                              

                               

                              
                                	
                                        7.

                                      	
                                        Distillers
      Grains Marketing Agreement (Boardman Project), dated the Closing Date,
      between Pacific Ethanol Columbia, LLC and Pacific Ag. Products, LLC
      *

                                      

                              

                               

                              
                                	
                                        8.

                                      	
                                        Port
      of Morrow Lease, dated April 20, 2006, between Pacific Ethanol Columbia,
      LLC and the Port of Morrow

                                      

                              

                               

                              
                                	
                                        9.

                                      	
                                        Operation
      and Maintenance Agreement (Boardman Project), dated the Closing Date,
      between Pacific Ethanol Columbia, LLC and Pacific Ethanol California, Inc.
      *

                                      

                              

                               

                              
                                
                                  	
                                          10.

                                        	
                                          Transportation
      and Dock Services Agreement, dated February 15, 2007, among Pacific
      Ethanol Columbia, LLC, Tidewater Terminal Co. and Tidewater Barge Lines,
      Inc.

                                        

                                

                              

                               

                              
                                
                                  	
                                          11.

                                        	
                                          Deposit
      Escrow Agreement, dated February 15, 2007, among Pacific Ethanol Columbia,
      LLC, U.S. Bank National Association, Tidewater Terminal Co. and Tidewater
      Barge Lines, Inc.

                                        

                                

                              

                               

                              
                                	
                                        12.

                                      	
                                        Each
      of the contracts, agreements, instruments, letters, understandings, or
      other documentation to which Pacific Ethanol Columbia, LLC is a party or
      by which it or any of its properties is bound which are listed on the
      Title Insurance Policy for the Boardman Plant delivered on the Closing
      Date pursuant to Section 6.01(r) of the Credit
  Agreement.

                                      

                              

                               

                              HI.
Pacific Ethanol Stockton, LLC Project Documents

                               

                              
                                
                                  	
                                          1.

                                        	
                                          Construction
      Management Agreement (Stockton Project), dated the Closing Date, between
      Pacific Ethanol Stockton, LLC and Pacific Ethanol California,
      Inc.*

                                        

                                

                              

                               

                              
                                
                                  	
                                          2.

                                        	
                                          Ethanol
      Marketing Agreement (Stockton Project), dated the Closing Date, between
      Pacific Ethanol Stockton, LLC and Kinergy Marketing, LLC
  *

                                        

                                

                              

                               

                              
                                	
                                        3.

                                      	
                                        Distillers
      Grains Marketing Agreement (Stockton Project), dated the
      ClosingDate,
      between Pacific Ethanol Stockton, LLC and Pacific Ag. Products, LLC
      *

                                      

                              

                               

                              
                                
                                   

                                

                                
                                  5.11-2

                                  
                                    

                                  

                                

                                
                                   

                                

                              

                              
                                	
                                        4.

                                      	
                                        Operation
      and Maintenance Agreement (Stockton Project), dated the Closing Date,
      between Pacific Ethanol Stockton, LLC and Pacific Ethanol California,
      Inc.*

                                      

                              

                               

                              
                                	
                                        5.

                                      	
                                        Engineering,
      Procurement and Technology License Agreement, General Conditions (Plant
      No. 3), dated September 6, 2006, between Pacific Ethanol Stockton, LLC (as
      assignee of Pacific Ethanol, Inc.) and Delta-T
  Corporation

                                      

                              

                               

                              IV.
Pacific Ethanol Imperial, LLC Project Documents

                               

                              
                                	
                                        1.

                                      	
                                        Construction
      Management Agreement (Brawley Project), dated the Closing Date, between
      Pacific Ethanol Imperial, LLC and Pacific Ethanol California, Inc.
      *

                                      

                              

                               

                              
                                	
                                        2.

                                      	
                                        Ethanol
      Marketing Agreement (Brawley Project), dated the Closing Date, between
      Pacific Ethanol Imperial, LLC and Kinergy Marketing, LLC
  *

                                      

                              

                               

                              
                                	
                                        3.

                                      	
                                        Distillers
      Grains Marketing Agreement (Brawley Project), dated the Closing Date,
      between Pacific Ethanol Imperial, LLC and Pacific Ag. Products, LLC
      *

                                      

                              

                               

                              
                                	
                                        4.

                                      	
                                        Operation
      and Maintenance Agreement (Brawley Project), dated the Closing Date,
      between Pacific Ethanol Imperial, LLC and Pacific Ethanol California,
      Inc.*

                                      

                              

                               

                              
                                
                                  	
                                          5.

                                        	
                                          Engineering,
      Procurement and Technology License Agreement, General Conditions (Plant
      No. 5), dated September 6, 2006, between Pacific Ethanol Imperial, LLC (as
      assignee of Pacific Ethanol, Inc.) and Delta-T
  Corporation

                                        

                                

                              

                               

                               

                              V.
Pacific Ethanol Magic Valley, LLC Project Documents

                               

                              
                                	
                                        1.

                                      	
                                        Construction
      Management Agreement (Burley Project), dated the Closing Date, between
      Pacific Ethanol Magic Valley, LLC and Pacific Ethanol California, Inc.
      *

                                      

                              

                               

                              
                                	
                                        2.

                                      	
                                        Ethanol
      Marketing Agreement (Burley Project), dated the Closing Date, between
      Pacific Ethanol Magic Valley, LLC and Kinergy Marketing, LLC
    *

                                      

                              

                               

                              
                                	
                                        3.

                                      	
                                        Distillers
      Grains Marketing Agreement (Burley Project), dated the Closing Date,
      between Pacific Ethanol Magic Valley, LLC and Pacific Ag. Products, LLC
      *

                                      

                              

                               

                              
                                	
                                        4.

                                      	
                                        Operation
      and Maintenance Agreement (Burley Project), dated the Closing Date,
      between Pacific Ethanol Magic Valley, LLC and Pacific Ethanol California,
      Inc. *

                                      

                              

                               

                              
                                
                                  	
                                          5.

                                        	
                                          Engineering,
      Procurement and Technology License Agreement, General Conditions (Plant
      No. 4), dated September 6, 2006, between Pacific Ethanol Magic Valley, LLC
      (as assignee of Pacific Ethanol, Inc.) and Delta-T
    Corporation

                                        

                                

                              

                               

                              

                              VI.
Pacific Ethanol Holding Co. LLC Project Documents

                               

                              
                                
                                   

                                

                                
                                  5.11-3

                                  
                                    

                                  

                                

                                
                                   

                                

                              

                              
                                	
                                        1.

                                      	
                                        Indemnity
      and Fee Agreement, dated the Closing Date, among Pacific Ethanol Holding
      Co. LLC, Michael C. Doyle and Stewart Management
  Company

                                      

                              

                               

                              
                                	
                                        2.

                                      	
                                        Corn
      Procurement and Handling Agreement, dated the Closing Date, between
      Pacific Ethanol Holding Co. LLC and Pacific Ag. Products, LLC
      *

                                      

                              

                               

                               

                              PART
B

                               

                              Not
applicable.

                               

                              * All
agreements marked with an * are Affiliate agreements.

                               

                               

                              
                                
                                   

                                

                                
                                  5.11-4

                                  
                                    

                                  

                                

                                
                                   

                                

                              

                              SCHEDULE
5.12

                               to Credit
Agreement

                               

                              UCC FILING
OFFICES

                               

                              UCC
Filing Offices

                               

                              Pacific Ethanol California,
Inc.

                              Office of
the Secretary of State of the State of California

                               

                              Pacific Ethanol Holding Co.
LLC

                              Office of
the Secretary of State of the State of Delaware

                               

                              Pacific Ethanol Madera
LLC

                              Office of
the Secretary of State of the State of Delaware

                               

                              Pacific Ethanol Columbia,
LLC

                              Office of
the Secretary of State of the State of Delaware

                               

                              Pacific Ethanol Stockton,
LLC

                              Office of
the Secretary of the State of the State of Delaware, on the date of initial
Funding for the Stockton Plant

                               

                              Pacific Ethanol Imperial,
LLC

                              Office of
the Secretary of the State of the State of Delaware, on the date of initial
Funding for the Brawley Plant

                               

                              Pacific Ethanol Magic
Valley, LLC

                               

                              Office of
the Secretary of the State of the State of Delaware, on the date of initial
Funding for the Burley Plant

                               

                              Mortgage
Recording Offices

                               

                              Pacific Ethanol Madera
LLC

                              County
Recorder's Office for the County of Madera (California)

                               

                              Pacific Ethanol Columbia,
LLC

                              Morrow
County Recorder's Office (Oregon)

                               

                              Pacific Ethanol Stockton,
LLC

                              County of
San Joaquin Office of the Assessor-Recorder-County Clerk
(California)

                               

                              Pacific Ethanol Imperial,
LLC

                              Imperial
County Recorder's Office (California)

                               

                               

                               

                              
                                
                                   

                                

                                
                                  5.12-1

                                  
                                    

                                  

                                

                                
                                   

                                

                              

                              Pacific Ethanol Magic
Valley, LLC  

                              Cassia
County Recorder's Office (Idaho)

                               

                              **With
respect to the filings to be made in the Office of the Secretary of State of the
State of Delaware and in the Office of the Secretary of State of the State of
California, pursuant to Section 9-515 of the Uniform Commercial Code as now in
effect in the State of Delaware and the State of California, respectively, the
effectiveness of a filed financing statement lapses on the expiration of the
date that is five years after the date of filing, unless before the lapse a
continuation statement is filed in accordance with Section 9-515(d) within the
six-month period prior to the expiration of the applicable five-year
period.

                               

                               

                               

                               

                               

                               

                               

                              
                                
                                   

                                

                                
                                  5.12-2

                                  
                                    

                                  

                                

                                
                                   

                                

                              

                            

                              SCHEDULE
5.13(a)

                              to Credit
Agreement

                               

                              SITE
DESCRIPTIONS

                               

                              MADERA

                              PARCEL
A:

                               

                              A PARCEL
OF LAND LYING IN THE NORTH 'A OF SECTION 2, TOWNSHIP 12 SOUTH, RANGE 18 EAST,
MOUNT DIABLO BASE AND MERIDIAN ACCORDING TO THE OFFICIAL PLAT THEREOF, BEING
ALSO A PORTION OF PARCEL 1 OF PARCEL MAP NO. 1121, RECORDED IN BOOK 23 OF MAPS,
AT PAGE 11, MADERA
COUNTY RECORDS, MORE PARTICULARLY DESCRIBED AS FOLLOWS:

                               

                              BEGINNING
AT THE SOUTHWEST CORNER OF SAID PARCEL I; THENCE NORTH 00° 31' 16" EAST ALONG
THE WEST LINE OF SAID PARCEL 1 A DISTANCE OF 2,412.82 FEET TO THE NORTHWEST
CORNER OF SAID PARCEL 1; THENCE SOUTH 89° 16' 26" EAST ALONG THE NORTH LINE OF
SAID PARCEL I A DISTANCE OF 874.08 FEET TO A POINT ON THE SOUTHWESTERLY LINE OF
THE ATCHESON TOPEKA AND SANTA FE RAILROAD COMPANY'S RIGHT-OF-WAY; THENCE SOUTH
35° 19' 16" EAST ALONG SAID RAILROAD RIGHT-OF-WAY LINE A DISTANCE OF 2,457.39
FEET; THENCE SOUTH 89° 55' 38" WEST AND PARALLEL WITH THE SOUTH LINE OF SAID
PARCEL 1 A DISTANCE OF 855.09 FEET; THENCE SOUTH 00° 27' 17" WEST A DISTANCE OF
393.68 FEET TO A POINT ON THE SOUTH LINE OF SAID PARCEL 1, SAID POINT BEING ALSO THE
NORTHWEST CORNER OF PARCEL 1 OF PARCEL MAP NO. 2031, RECORDED IN BOOK 27 OF
MAPS, AT PAGE 140, MADERA COUNTY RECORDS; THENCE SOUTH 89° 55' 38" WEST ALONG
THE SOUTH LINE OF PARCEL 1 OF SAID PARCEL MAP NO. 1121 A DISTANCE OF 643.46 FEET
TO THE CENTER OF SAID SECTION 2; THENCE CONTINUING SOUTH 89° 55' 38" WEST ALONG
THE SOUTH LINE OF LAST SAID PARCEL 1 A DISTANCE OF 815.04 FEET TO THE POINT OF
BEGINNING.

                               

                              APN:
047-130-020 (PORTION)

                               

                              PARCEL B:

                               

                              A PARCEL
OF LAND IN SECTION 2, TOWNSHIP 12 SOUTH, RANGE 18 EAST, MOUNT DIABLO BASE AND
MERIDIAN ACCORDING TO THE OFFICIAL PLAT THEREOF, MORE PARTICULARLY DESCRIBED AS
FOLLOWS:

                              
                                
                                   

                                

                                
                                  5.13(a)-1

                                  
                                    

                                  

                                

                                
                                   

                                

                              

                               

                              BEGINNING
AT THE NORTHWEST CORNER OF PARCEL I OF PARCEL MAP NO. 2031, RECORDED IN BOOK 27
OF MAPS AT PAGE 140, MADERA COUNTY RECORDS; THENCE SOUTH 89° 55' 38" WEST ALONG
THE NORTHERLY BOUNDARY LINE OF PARCEL 2 OF SAID PARCEL MAP NO. 2031 A DISTANCE
OF 643.46 FEET TO THE CENTER OF SAID SECTION 2; THENCE CONTINUING SOUTH 89° 55'
38" WEST A DISTANCE OF 815.04 FEET; THENCE SOUTH 0° 31' 16" WEST A DISTANCE OF
653.00 FEET; THENCE NORTH 89° 55' 38" EAST A DISTANCE OF 1459.26 FEET TO A POINT
ON THE WEST LINE OF SAID PARCEL 1; THENCE CONTINUING NORTH 89° 55' 38" EAST,
PARALLEL TO THE NORTH LINE OF SAID PARCEL I A DISTANCE OF 1343.48 FEET TO A
POINT ON THE EAST LINE OF SAID PARCEL 1; THENCE NORTH 0° 28' 16" EAST ALONG THE
EAST LINE OF SAID PARCEL 1 A DISTANCE OF 365.46 FEET TO A POINT ON THE
SOUTHWESTERLY LINE ON THE ATCHESON, TOPEKA AND SANTA FE RAILROAD COMPANY'S
RIGHT-OF-WAY; THENCE NORTH 35° 25' 56" WEST ALONG SAID RAILROAD RIGHT-OF-WAY
LINE A DISTANCE OF 352.56 FEET TO THE NORTHEASTERLY CORNER OF SAID PARCEL I;
THENCE NORTH 35° 19' 16" WEST CONTINUING ALONG SAID RAILROAD RIGHT-OF-WAY LINE A
DISTANCE OF 482.04 FEET; THENCE SOUTH 89° 55' 38" WEST, PARALLEL TO THE NORTH
LINE OF SAID PARCEL I A DISTANCE OF 855.09 FEET TO A POINT ON THE NORTHERLY
EXTENSION OF THIS WEST LINE OF SAID PARCEL 1; THENCE SOUTH 0° 27' 17" WEST, A
DISTANCE OF 393.68 FEET, TO THE POINT OF BEGINNING.

                               

                              APN:
047-130-020 (PORTION)

                               

                              BOARDMAN

                               

                              A
LEASEHOLD ESTATE, FOR THE TERM AND UPON THE TERMS, CONDITIONS AND PROVISIONS AS
CONTAINED IN THAT CERTAIN MEMORANDUM OF GROUND LEASE, INCLUDING THE TERMS AND
PROVISIONS THEREOF, BY AND BETWEEN THE PORT OF MORROW, A MUNICIPAL CORPORATION
OF THE STATE OF OREGON, AS LESSOR, AND PACIFIC ETHANOL COLUMBIA, LLC, A DELAWARE
LIMITED LIABILITY COMPANY, AS LESSEE, REOCRDED OCTOBER 5, 2006 AS 2006-17758,
MORROW COUNTY MIRCOFILM RECORDS, ON THE FOLLOWING DESCRIBED
PROPERTY:

                               

                              A PARCEL
OF LAND LOCATED IN SECTION 2, TOWNSHIP 4 NORTH, RANGE 25 EAST OF THE WILLAMETTE
MERIDIAN, IN THE COUNTY OF MORROW, STATE OF OREGON, DESCRIBED AS
FOLLOWS:

                               

                              BEGINNING
AT A POINT ON THE NORTH RIGHT 0 WAY LINE OF CENTER LOOP DRIVE BEING NORTH
04°45'10" WEST A DISTANCE OF 1,666.80 FEET FROM THE SOUTH QUARTER CORNER OF
SECTION 2, IN TOWNSHIP 4 NORTH, RANGE 25 EWM; THENCE NORTHWESTERLY ALONG THE
NORTH RIGHT OF WAY OF SAID CENTER LOOP DRIVE, ALONG A 530.26 FOOT CURVE TO THE
LEFT, SAID CURVE HAVING A RADIUS OF 470.00 FEET, AN INTERNAL ANGLE OF 64°38'29"
AND A CHORD WHICH BEARS NORTH 80°21'18" WEST A DISTANCE OF 502.58 FEET; THENCE
CONTINUING ALONG THE NORTH RIGHT OF WAY LINE OF CENTER LOOP DRIVE SOUTH
67°19'28" WEST A DISTANCE OF 80.00 FEET; THENCE NORTH 22°40'32" WEST A DISTANCE
OF 10.00 FEET; THENCE NORTHWESTERLY ALONG A 419.11 FOOT CURVE TO THE LEFT, SAID
CURVE HAVING A RADIUS OF 595.00 FEET, AN INTERNAL ANGLE OF 40°21'29" AND A CHORD
WHICH BEARS NORTH 42°51'17" WEST A DISTANCE OF 410.50 FEET; THENCE NORTH
38°56'09" EAST A DISTANCE OF 1,258.00 FEET; THENCE SOUTH 51°03'51" EAST A
DISTANCE OF 970.00 FEET; THENCE SOUTH 43°24'17" WEST A DISTANCE OF 1,008.18 FEET
TO THE NORTH RIGHT OF WAY LINE OF CENTER LOOP DRIVE AND THE POINT OF
BEGINNING.

                              
                                
                                   

                                

                                
                                  5.13(a)-2

                                  
                                    

                                  

                                

                                
                                   

                                

                              

                               

                              STOCKTON

                               

                              With
respect to the Stockton Site, the real property interests to be set forth in the
Title Insurance Policy to be provided upon the initial Funding with respect to
the Stockton Plant or as otherwise reasonably satisfactory to the Administrative
Agent.

                               

                              BRAWLEY

                               

                              With
respect to the Brawley Site, the real property interests to be set forth in the
Title Insurance Policy to be provided upon the initial Funding with respect to
the Brawley Plant or as otherwise reasonably satisfactory to the Administrative
Agent.

                               

                              BURLEY

                               

                              With
respect to the Burley Site, the real property interests to be set forth in the
Title Insurance Policy to be provided upon the initial Funding with respect to
the Burley Plant or as otherwise reasonably satisfactory to the Administrative
Agent.

                               

                              
                                
                                   

                                

                                
                                  5.13(a)-3

                                  
                                    

                                  

                                

                                
                                   

                                

                              

                               

                              SCHEDULE
5.19(d)(iii)

                              to Credit
Agreement

                              UNDERGROUND STORAGE TANKS

                               

                              Under
Ground Storage Tanks at the Madera Plant

                               

                              Nine
underground storage tanks ("USTs") have been used at Madera. Two USTs of
undetermined volume were filled with cement and abandoned in place. Three USTs
of undetermined volume were filled with sand and abandoned in place. Four USTs
were removed from the site approximately 20 years ago. Inspection records and
soil sample analyses did not indicate fuel releases into soil at the UST
locations. The Madera County Environmental Health Department has granted closure
for the USTs.

                               

                              Under
Ground Storage Tanks at the Burley Plant

                               

                              Three
USTs have been used at Burley. One 300-gallon gasoline UST and one 500-gallon
diesel UST were removed from the site approximately 10 years ago. The tanks were
in good condition and did not show any signs of corrosion or leaks at the time
of removal. One 500-gallon heating oil UST remains on the property, located near
the back door of the on-site residence. The heating system in the residence was
converted to natural gas approximately three years ago.

                               

                               

                              
                                
                                   

                                

                                
                                  5.19(d)(iii)-1

                                  
                                    

                                  

                                

                                
                                   

                                

                              

SCHEDULE
5.23

                            
                              to Credit
Agreement

                               

                              SEPARATENESS PROVISIONS

                               

                              In the
case of Pacific Holding:

                               

                              (1)      
The board of directors and
each entity holding membership interests in Pacific Holding (other than the
Independent Member) (the "Pacific Holding
Member") shall
cause Pacific Holding to do or cause to be done all things necessary to preserve
and keep in full force and
effect its existence, rights (charter and statutory) and franchises;
provided, however, that
Pacific Holding shall not be required to preserve any such right or franchise if the board of directors
shall determine that the preservation thereof is no longer desirable for the conduct of its
business and that the loss thereof is not disadvantageous in any material respect
to Pacific Holding. For so long as any Obligation remains outstanding, the
board of directors also shall cause Pacific Holding to:

                               

                              (a) maintain
its own separate books and records and bank accounts (other than the Project
Accounts);

                               

                              (b) at all
times conduct its business solely in its own name in a manner not misleading to
other Persons as to its identity;

                               

                              (c) have a
board of directors separate from that or those of the Pacific Holding Member(s)
and any other Person;

                               

                              (d) file its
own tax returns, if any, as may be required under applicable law, to the extent
(1) not part of a consolidated group filing a consolidated return or returns or
(2) not treated as a division for tax purposes of another taxpayer, and pay any
taxes so required to be paid under applicable law;

                               

                              (e) 
not commingle its assets with assets of any other Persons and hold all of its
assets in its own name (except to the extent otherwise provided in the Financing
Documents);

                               

                              (f)
strictly comply with all organizational formalities to maintain its separate
existence;

                               

                              (g)
maintain separate financial statements, showing its assets and liabilities
separate and apart from those of any other Person (other than any of Pacific
Holding's subsidiaries), and not have its assets listed on any financial
statement of any other Person; provided, however, that Pacific Holding's assets
may be included in consolidated financial statements of one of its Affiliates,
provided that for financial statements covering fiscal quarters ending on and
after March 31, 2007 (i) appropriate disclosure within the consolidated
financial statements or footnotes thereto shall be made to indicate the
separateness of Pacific Holding from such Affiliate and to indicate that Pacific
Holding's assets and credit are not available to satisfy the debts and other
obligations of such Affiliate or any other Person and (ii) such assets shall
also be listed on Pacific Holding's own separate balance sheet; provided,
further that nothing herein shall be construed to require that such separate
balance sheet be disclosed in public reports filed with the Securities and
Exchange Commission;

                              
                                
                                   

                                

                                
                                  5.23-1

                                  
                                    

                                  

                                

                                
                                   

                                

                              

                               

                              

                               

                              (h) pay its
own liabilities only out of its own funds or from the Project Accounts,
provided, however, the foregoing shall not require any member of Pacific Holding
to make any additional capital contributions to Pacific Holding;

                               

                              (i) maintain
an arm's-length relationship with its Affiliates and the member of Pacific
Holding and enter into transactions with Affiliates and any such member only on
a commercially reasonable basis and on terms similar to those of an arm's-length
transaction (except to the extent it may (i) guarantee the obligations of
another Borrower as permitted under the Financing Documents or (ii) enter into
any contract or any other Affiliate transaction permitted under the Credit
Agreement);

                               

                              (j) correct
any known misunderstanding regarding its separate identity and not identify
itself as a division of any other Person;

                               

                              (k) maintain
adequate capital in light of its contemplated business purpose, transactions and
liabilities; provided, however, the foregoing shall not require any member of
Pacific Holding to make any additional capital contributions to Pacific Holding;
and

                               

                              (l) cause
the directors, officers, agents and other representatives of Pacific Holding to
act at all times with respect to Pacific Holding consistently and in furtherance
of the foregoing and in the best interests of Pacific Holding.

                               

                              B.               
In the case of each other Borrower:

                               

                              (1)       
Such
Borrower shall maintain separate bank accounts and separate
books   of account from each other Borrower and the Pledgor
(other than the Project Accounts maintained in accordance with the Credit
Agreement). The separate liabilities of such Borrower shall be readily
distinguishable from the liabilities of each of its Affiliates, including the
Pledgor (except to the extent otherwise contemplated by the Transaction
Documents). Such Borrower shall conduct its business solely in its own name in a
manner not misleading to other Persons as to its identity.

                               

                              (2)       
Such
Borrower shall not, so long as any Obligation is outstanding and to the extent
restricted by the Financing Documents, amend, alter or change the terms of its
limited liability company agreements in any material respect unless the
Administrative Agent consents.

                               

                              
                                
                                   

                                

                                
                                  5.23-2

                                  
                                    

                                  

                                

                                
                                   

                                

                              

                              (3)       
For so long as any Obligation remains outstanding, the board of directors shall
cause such Borrower to:

                               

                              (a) maintain
its own separate books and records and bank accounts (other than the Project
Accounts);

                               

                              (b) have a
board of directors separate from that or those of each entity holding membership
interests in such Borrower and any other Person;

                               

                              (c) file its
own tax returns, if any, as may be required under applicable law, to the extent
(1) not part of a consolidated group filing a consolidated return or returns or
(2) not treated as a division for tax purposes of another taxpayer, and pay any
taxes so required to be paid under applicable law;

                               

                              (d) not
commingle its assets with assets of any other Persons and hold all of its assets
in its own name (except to the extent otherwise provided in the Financing
Documents);

                               

                              (e) strictly
comply with all organizational formalities to maintain its separate
existence;

                               

                              (f) pay its
own liabilities only out of its own funds or from the Project Accounts,
provided, however, the foregoing shall not require the member of such Borrower
to make any additional capital contributions to such Borrower;

                               

                              (g) maintain
an arm's-length relationship with its Affiliates and the member of such Borrower
and enter into transactions with Affiliates and the member of such Borrower only
on a commercially reasonable basis and on terms similar to those of an
arm's-length transaction (except to the extent it may (1) guarantee the
obligations of another Borrower as permitted under the Financing Documents or
(2) enter into any contract or any other Affiliate transaction permitted under
the Credit Agreement);

                               

                              (h) correct
any known misunderstanding regarding its separate identity and not identify
itself as a division of any other Person;

                               

                              (i)
maintain adequate capital in light of its contemplated business purpose,
transactions and liabilities; provided, however, the foregoing shall not require
the member of such Borrower to make any additional capital contributions to such
Borrower; and

                               

                              (j) cause
the directors, officers, agents and other representatives of such Borrower to
act at all times with respect to such Borrower consistently and in furtherance
of the foregoing and in the best interests of such Borrower.

                              
                                
                                   

                                

                                
                                  5.23-3

                                  
                                    

                                  

                                

                                
                                   

                                

                              

                            
                              SCHEDULE
5.29

                               to 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.

                               

                              Stockton:
Pacific Ethanol Stockton, LLC, a Delaware limited liability
company.

                               

                              Brawley:
Pacific Ethanol Imperial, LLC, a Delaware limited liability
company.

                               

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

                               

                              Sole
Place of Business and Chief Executive Office of Each Borrower

                               

                              5711 N.
West Avenue

                              Fresno,
California 93711

                               

                              The Chief
Executive Office may change (subject to Section 5.29 of the Credit Agreement)
to:

                               

                              4060
Capital Mall, Suite 2060

                              Sacramento,
California 95814

                               

                              
                                
                                   

                                

                                
                                  5.29-1

                                  
                                    

                                  

                                

                                
                                   

                                

                              

                            
                              SCHEDULE
5.30 

                              to Credit
Agreement

                               

                              BROKER
FEES

                               

                              None.

                               

                               

                               

                               

                               

                               

                               

                               

                               

                               

                               

                               

                              
                                
                                  
                                  

                                

                                
                                  5.30-1

                                  
                                    

                                  

                                

                                
                                  
                                  

                                

                              

                            

                             

                             

                            
                              SCHEDULE
6.01(g)(i)

                               to Credit
Agreement

                            

                             

                             

                            EXISTING
LIENS

                            
                               

                               

                              
                                	
                                        1.

                                      	
                                        Lien
      granted by Pacific Ethanol Holding Co. LLC in favor of Hudson United
      Capital, a division of TD Banknorth, N.A., pursuant to that certain Member
      Interest Pledge Agreement, dated as of April 10, 2006, between Pacific
      Ethanol Madera LLC and Hudson United Capital, a division of TD Banknorth,
      N.A., which Lien will be released and terminated on the Closing
      Date.

                                      

                              

                               

                              
                                	
                                        2.

                                      	
                                        Lien
      granted by Pacific Ethanol Madera LLC in favor of Hudson United Capital, a
      division of TD Banknorth, N.A., pursuant to that certain Assignment and
      Security Agreement, dated as of April 10, 2006, between Pacific Ethanol
      Madera LLC and Hudson United Capital, a division of TD Banknorth, N.A.,
      which Lien will be released and terminated on the Closing
      Date.

                                      

                              

                               

                               

                               

                               

                               

                               

                               

                               

                               

                               

                               

                              
                                
                                  
                                  

                                

                                
                                  6.01(g)(i)-1

                                  
                                    

                                  

                                

                                
                                  
                                  

                                

                              

                            

                             

                             

                             

                            
                              Schedule
6.01(q)

                              to
Credit Agreement

                               

                              DRAWDOWN
SCHEDULES

                               

                               

                               

                               

                               

                               

                               

                               

                               

                               

                               

                               

                               

                               

                               

                               

                               

                               

                               

                               

                              
                                
                                  
                                  

                                

                                
                                  6.01(q)-1

                                  
                                    

                                  

                                

                                
                                  
                                  

                                

                              

                            

                             

                             

                             

                             

                             

                             

                            
                              
                                
                                

                              

                              
                                6.01(q) -
2

                                
                                  

                                

                              

                              
                                
                                

                              

                            

                            
                              Schedule
6.02(e)(i)

                               to the Credit
Agreement

                               

                              Acceptable Project
Parties

                               

                              Any
Person, other than a process technology provider, (a) having (i) industry-
specific experience and positive reputation reasonably acceptable to the
Administrative Agent (which shall be deemed to be acceptable if such experience
and positive reputation are equal to or greater than the experience and
reputation of a Project Party party to any comparable Project Document (whether
such agreement is then or was previously in effect) on the date such Project
Document was approved hereunder) and (ii) credit, or credit support (which may
include a Project Document Guarantee), reasonably acceptable to the
Administrative Agent (which shall be deemed to be acceptable if such credit or
credit support are equal to or greater than the credit or credit support of a
Project Party party to any comparable Project Document (whether such agreement
is then or was previously in effect) on the date such Project Document was
approved hereunder) or (b) with
respect to any counterparty that is not a Major Project Party, that is otherwise
reasonably acceptable to the Administrative Agent.

                               

                              For the
avoidance of doubt, if the process technology provider for any Plant is a Person
other than Delta-T, such Project Party will be subject to approval by the
Required Lenders.

                               

                              The
parties hereto acknowledge and agree that (i) the Stockton Port District, as
landlord under the Stockton Lease, shall be an acceptable Project Party and (ii)
W.M. Lyles Co. and its Affiliates shall each be an acceptable Project Party as a
Construction Contractor so long as such party provides credit or credit support
(which may include a Project Document Guarantee or payment and performance
bonds) reasonably acceptable to the Administrative Agent (which shall be deemed
to be acceptable if such credit or credit support is equal to or greater than
the credit or credit support of a Project Party party to a comparable
Construction Contract on the date such Construction Contract was approved
hereunder).

                               

                               

                               

                               

                               

                               

                               

                               

                               

                               

                               

                              
                                
                                  
                                  

                                

                                
                                  6.02(e)(i)-1

                                  
                                    

                                  

                                

                                
                                  
                                  

                                

                              

                            

                             

                             

                            
                              Schedule 6.02(e)(iv)

                              to the Credit
Agreement

                               

                              Project Party
Consents

                               

                              As a
condition to the first Funding for each Plant, Consents are required with
respect to each Project Document related to such Plant to which a Major Project
Party is a party (other than the following, with respect to which no Consent
shall be required: (1) the Construction Contract with Parsons relating to the
Boardman Plant, (ii) the Madera DG Agreement, (iii) the Borrower LLC Agreements
and (iv) any lease that contains provisions for the benefit and protection of a
mortgagee (including the Collateral Agent) (whether in such lease or leasehold
mortgage, nondisturbance agreement, estoppel certificate, or similar document
executed in connection therewith in favor of the Collateral Agent, for the
benefit of the Senior Secured Parties) in form and substance reasonably
satisfactory to the Administrative Agent and the Collateral Agent).

                               

                               

                               

                               

                               

                               

                               

                               

                               

                               

                               

                               

                              
                                
                                  
                                  

                                

                                
                                  6.02(e)(iv)-1

                                  
                                    

                                  

                                

                                
                                  
                                  

                                

                              

                            

                             

                             

                            
SCHEDULE
7.01(h) 

                            
                              to 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, with respect to any Plant
that has
not achieved its Commercial Operation Date, the Construction Budget for
such Plant. 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 including the Builders Risk, Delay in Start
Up, Marine and inland Transit and Delay in Start Up, Property All Risk and
Business Interruption, Leasehold Interest Property All Risk and Business
Interruption (where such Leasehold insurance exists) hereof 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);

                              
                                
                                   

                                

                                
                                  7.01(h)-1

                                  
                                    

                                  

                                

                                
                                   

                                

                              

                               

                               

                              (a)           The
insurance policies provided by the Borrowers shall allow that the interest 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 Builders Risk,
Delay in Start Up, Transit, Property, Business Interruption, Leasehold Property
and Business Interruption and other applicable first 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 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.

                               

                              
                                
                                   

                                

                                
                                  7.01(h)-2

                                  
                                    

                                  

                                

                                
                                   

                                

                              

                              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 relevant Insurance Proceeds
Account or the Revenue Account as required pursuant to Article VIII (Project
Accounts) 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.

                                      	
                                        CONSTRUCTION
      PERIOD INSURANCE

                                      

                              

                               

                              2.1.     
Coverage. The
following coverages shall be maintained as required below.

                               

                              (a)            Commercial
General Liability.

                               

                              Commercial
general liability insurance for each Plant, written on "occurrence" policy
forms, including coverage for premises/operations, products/completed
operations, broad form property damage, blanket contractual liability,
independent contractor's and personal injury, with no exclusions for explosion,
or collapse and underground perils, with primary coverage limits of no less than
one million Dollars ($1,000,000) for injuries or death to one or more persons or
damage to property resulting from any one occurrence and a two million Dollar
($2,000,000) annual aggregate limit. 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
(acting in consultation with the Insurance Consultant). This policy shall also
be endorsed to include fire legal liability and (where the exposure exists) rail
road protective with limits no less than replacement cost of the value of any
real property covered under any rail agreement entered into by any
Borrower.

                               

                              (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.

                              
                                
                                   

                                

                                
                                  7.01(h)-3

                                  
                                    

                                  

                                

                                
                                   

                                

                              

                               

                              (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 and such other forms of insurance that any Borrower or the
Construction Contractor is required by law to provide during construction of any
Plant or the Project, providing statutory benefits and covering loss resulting
from injury, sickness, disability or death of the employees of any Borrower,
Construction Contractor and subcontractors who are working on such Plant or the
Project.

                               

                              (d)           Umbrella
or Excess Liability.

                               

                              Umbrella
or excess liability insurance of not less than twenty million Dollars
($20,000,000) per occurrence and in the aggregate in respect of products and
completed operations liability which may be satisfied during the construction
period through a combination of the Construction Contractor, and the Borrowers'
insurance policies. Such coverages shall be on a per occurrence basis and
inclusive of coverage provided by the policies described in Sections 2.1(a) and (b) of
this Schedule
7.01(h) and, with respect to employer's liability, Section 2.1(c) of
this Schedule
7.01(h), the limits on which shall apply toward the limit set forth in
this section. If the policy or policies provided under this Section 2.1(d)
contain(s) aggregate limits applying to other operations of the Borrowers, other
than the relevant Plant, 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, the
Borrowers shall, within five (5) Business Days after obtaining knowledge of such
event, 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(d).

                               

                              (e)            Aircraft
Liability.

                               

                              Aircraft
liability insurance, 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 construction of the
Project.

                               

                              (f)            Builder's
Risk.

                               

                              The
Borrowers are to evidence the following insurance for each Plant prior to the
date of the initial Funding Notice for the Construction Loans for such Plant
(the "Builder's Risk  Effective
Date").

                              
                                
                                   

                                

                                
                                  7.01(h)-4

                                  
                                    

                                  

                                

                                
                                   

                                

                              

                               

                              From the
Builder's Risk Effective Date until such time as coverage is replaced under
permanent cover as set forth in Section 3.1(d) of
this Schedule 7.01(h), builder risk insurance, as such term is used in the
common practice of the insurance industry, on a replacement cost basis with
windstorm, flood and earthquake (including sinkhole and subsidence) and
providing coverage for each Plant including land transit, removal of debris,
insuring the buildings, structures, machinery (including resultant damage from
design, workmanship or material defect with coverage restrictions not more
onerous than LEG2/DE4 or the equivalent), equipment, facilities, fixtures and
other properties constituting a part of each Plant in a minimum amount not less
one hundred percent (100%) of the full replacement cost of such Plant. Such
coverage will include strike, vandalism, and malicious mischief to the extent it
is commercially and reasonably available. Sub limits are permitted as respects
the perils of professional fees ($250,000), debris removal (the greater of
$5,000,000 or 25% of loss), inland and (if applicable) marine transit (in an
amount sufficient to satisfy replacement cost values of any shipment in
conveyance), offsite storage ($5,000,000 per storage area), extra and/or
expediting expense ($5,000,000 per occurrence), earthquake (25% of the
replacement cost of the asset), flood (25% of the replacement cost of the asset)
and local authorities regulations ($1,000,000). The Builder's Risk policy shall
contain coverage for operational testing and startup and, to the extent
applicable, full replacement cover for machinery breakdown and electrical
injury. All such policies may have deductibles of not greater than two hundred
fifty thousand Dollars ($250,000) per loss for physical damage and five hundred
thousand Dollars ($500,000) for machinery breakdown, including for hot testing,
commissioning, defects and maintenance, windstorm, flood and lightening with a
maximum deductible of five hundred thousand Dollars ($500,000), or two percent
(2%) of values at risk for earthquake (5% for California earthquake). This
coverage shall not include any annual or term aggregate limits of liability or
any clause requiring the payment of additional premium to reinstate the limits
after loss except as regards the insurance applicable to the perils of flood,
windstorm and earth movement.

                               

                              (g)            Delay
in Startup.

                               

                              From the
date of the initial Funding Notice, delay in startup insurance, on an "all
risks" basis (as such term is used in common practice of the insurance industry
on the date of this Agreement) including operational testing, and startup
(machinery breakdown and electrical injury) coverage, during the construction
period with limits of no less than twelve (12) months of projected scheduled
debt service requirements and continuing expenses with the twelve (12) month
indemnification period being exclusive of the deductible waiting period. The
deductible or waiting period shall not exceed thirty (30) days from the planned
Final Completion Date. This coverage shall not include any annual or term
aggregate limits of liability or clause requiring the payment of additional
premium to reinstate the limits after loss except with regards to the insurance
applicable to the perils of flood and earth movement.

                               

                              (h)            Marine
Cargo (to the extent exposure exists).

                               

                              At least
thirty (30) days prior to the shipment of equipment manufactured outside the
United States, ocean cargo coverage shall be secured in an amount not less than
the full replacement costs of equipment shipped with certificates of insurance
being evidenced to the Administrative Agent. Such coverage shall apply to all
equipment destined for the Project that is valued in excess of two hundred fifty
thousand Dollars ($250,000) and/or that is considered critical and has a lead
time to replace exceeding one (1) month. The ocean cargo policy shall attach
coverage at the point of loading for departure from the premises of the
manufacturer and shall continue in force until the shipment arrives at the
relevant Plant including sixty (60) days storage, or until it is insured under
the erection all risk policy. Delay in opening shall be insured in an amount
equivalent to twelve (12) months indemnity of continuing expenses and Debt
Service subject to a deductible of thirty (30) days commencing from the
scheduled completion date as defined in the policy. Deductibles applying to
marine cargo shall not exceed one hundred thousand Dollars
($100,000).

                               

                              (i)            
Pollution Legal Liability.

                              
                                
                                   

                                

                                
                                  7.01(h)-5

                                  
                                    

                                  

                                

                                
                                   

                                

                              

                               

                              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 construction 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.

                               

                              (j)            
Contractors and Subcontractors.

                               

                              All
contractors and subcontractors shall, to the extent not included in any
Borrower-controlled insurance program, prior to performing work for any Plant,
supply proper evidence of the types of insurance as set forth in their
respective contracts and will include, where applicable, Professional Liability
and Pollution Liability insurance. Such insurance supplied by the parties shall,
with the exception of workers compensation, where contractually
able:

                               

                              
                                	
                                      	
                                        (i) 

                                      	
                                        add
      Borrowers, Administrative Agent, Collateral Agent and the other Senior
      Secured Parties as additional
insured;

                                      

                              

                               

                              
                                	
                                      	
                                        (ii) 

                                      	
                                        be
      primary as respects insurance provided Borrowers, Administrative Agent,
      Collateral Agent and the other Senior Secured Parties as additional
      insured;

                                      

                              

                               

                              
                                	
                                      	
                                        (iii) 

                                      	
                                        waive
      rights of subrogation against Borrowers, Administrative Agent, Collateral
      Agent and the other Senior Secured Parties as additional insured;
      and

                                      

                              

                               

                              
                                	
                                      	
                                        (iv) 

                                      	
                                        continue
      in force until obligations of contractor and subcontractor are
      fulfilled.

                                      

                              

                               

                              
                                	
                                        3.

                                      	
                                        OPERATING
      PERIOD INSURANCE

                                      

                              

                               

                              3.1.      
Coverage. The following
coverages shall be placed into effect for the benefit of each Plant, including
grain elevators at the earlier of the expiry of the Builders Risk insurance
policy for such Plant or the Commercial Operation Date for such Plant 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)-6

                                  
                                    

                                  

                                

                                
                                   

                                

                              

                               

                              (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.

                               

                              Prior to
or at expiry date of the Builders Risk Policy and ensuring no gap in coverage
through the testing and commissioning period and not later than the Commercial
Operations Date for each Plant, 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.

                               

                              
                                
                                   

                                

                                
                                  7.01(h)-7

                                  
                                    

                                  

                                

                                
                                   

                                

                              

                              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.

                               

                              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 3.1(f). If
the policy or policies provided under this Section
3.1(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
3.1(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)-8

                                  
                                    

                                  

                                

                                
                                   

                                

                              

                              
                                	
                                        4.

                                      	
                                        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).

                               

                              
                                	
                                        5. 

                                      	
                                        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.

                               

                              
                                	
                                        6.

                                      	
                                        GENERAL
      CONDITIONS APPLYING TO ALL
INSURANCE

                                      

                              

                               

                              6.1.     
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).

                               

                              6.2.      
All policies of insurance required to be maintained pursuant to Sections
2.1(f), (g) and (h) and 3.1(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 he
accomplished by the use of the Lender Loss Payable Endorsement 438BFU required
above).

                               

                              6.3.     
A loss under any insurance required to be carried under Sections
2.1(f), (g) and (h) and 3.1(d) and () 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).

                               

                              6.4.      
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)-9

                                  
                                    

                                  

                                

                                
                                   

                                

                              

                              7.           REPORT

                               

                              7.1.  
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 7.0104 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).

                               

                              8.           "CLAIMS
MADE" POLICIES FOR CERTAIN TYPES OF INSURANCE

                               

                              8.1.  
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 date on which construction is commenced or the Commercial
Operations Date for the relevant Plant (as applicable).

                               

                              (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.

                               

                              9.             
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
9.1, insurance will be considered "not 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.

                               

                              
                                
                                   

                                

                                
                                  7.01(h)-10

                                  
                                    

                                  

                                

                                
                                   

                                

                              

                               

                               

                              
                                	
                                        10.

                                      	
                                        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)-11

                                    
                                      

                                    

                                  

                                  
                                     

                                  

                                

                              

                               

                              
                                 

                                Schedule 7.01(k) -
A

                                to Credit
Agreement

                              

                               

                               

                              
                                PERFORMANCE
GUARANTEE

                                 

                                Anhydrous
Undenatured Ethanol Production Specification

                                 

                              

                              
                                	
                                        Anhydrous
      Fuel Ethanol Production Rate

                                      	
                                        Minimum
      4,522.23 (Madera and Boardman)  or 6,783.34 (Stockton, Brawley and
      Burley) US undenatured gallons per hour (average over the seven day test,
      see below) based on a minimum feedstock specification of 56 lb/bushel test
      weight corn containing a maximum of 14.5% moisture (by weight), a minimum
      of 72% dry fermentable starch (by weight) and a maximum of 1% foreign
      material (by weight).

                                         

                                        Undenatured
      ethanol will meet specifications per ASTM
  D4806-06c.

                                      

                              

                               

                               

                               

                              
                                
                                  	
                                          40MGY1

                                        	
                                          60MGY2

                                        	
                                          Unit

                                        
	
                                          4,522.23

                                        	
                                          6,783.34

                                        	
                                          ugal/hr

                                        
	
                                          24

                                        	
                                          24

                                        	
                                          hrs/day

                                        
	
                                          108,533

                                        	
                                          162,800

                                        	
                                          ugal/day

                                        
	
                                          351

                                        	
                                          351

                                        	
                                          days/yr

                                        
	
                                          38,095,238
      

                                        	 
      57,142,857 	 
      ugal/yr
	
                                          5.00%

                                        	
                                          5.00%

                                        	
                                          denaturant
      %

                                        
	
                                          1,904,762

                                        	
                                          2,857,143

                                        	
                                           denaturant/yr

                                        
	
                                          40,000,000

                                        	
                                          60,000,000

                                        	
                                          dgal/yr

                                        
	
                                           

                                          Notes

                                          1.     Madera
      and Boardman plants

                                          2.     Stockton,
      Burley and Brawley plants
 	 

                                

                              

                            

                             

                            
                            

                             

                            
                              	
                                      Anhydrous

                                      Fuel
      Ethanol Yield:

                                    	
                                      Minimum
      2.68 gallons undenatured ethanol per bushel of corn feed based on a
      minimum feedstock specification of 56 lb/bushel test weight No. 2 Yellow
      Dent corn containing a maximum of 14.5%
      moisture (wgt), minimum 72% dry, trash-free starch, maximum 1%
      (wgt) foreign material.

                                    

                            

                             

                             

                             

                            
                              
                                
                                

                              

                              
                                7.01(k)-A-1

                                
                                  

                                

                              

                              
                                
                                

                              

                            

                             

                             

                            
                              Utility Consumption
Specification

                               

                              
                                	
                                        Process
      Electrical

                                        
                                          Consumption:

                                        

                                      	
                                        Maximum
      0.80 kWh per gallon (average) of undenatured fuel
      ethanol produced when operating at the nameplate capacity. This number
      includes process equipment components in mash preparation, liquefaction
      and cook, yeast mix and propagation, fermentation, distillation,
      dehydration and acid reduction, evaporation, separation and stillage,
      process condensate, chemical storage, CO, scrubbing,
      compressed air, closed seal water system, WDGS transfer and handling,
      ethanol storage and loadout, cooling tower and chiller including cooling
      and chilled water circulation, condensate return, process sumps, and heat
      tracing, regenerative thermal oxidizer, cold lime water softening,
      boilers, and CO2 recovery equipment installed at PLANT
      (minor equipment related only to transfer of CO2). The
      indicated consumption does not include grain receiving, . grain storage,
      grain milling, CO2 processing, CO2 pressurizing, or CO2 liquification. .
      This guarantee is based on the use of extra high efficiency motors in all
      applications and 4160 volt motors for applications over 200
      HP.

                                      
	
                                        Process
      Natural Gas 

                                          Consumption:

                                        

                                      	
                                        Maximum
      27,059 actual natural gas BTUs per gallon (average)
      of undenatured fuel ethanol produced (as calculated in Section 2.5 of
      Schedule 7.01(k)-B to the Credit
      Agreement). This number includes the natural gas to all process components
      except grain receiving, grain storage and grain
milling.

                                      
	
                                         

                                      	
                                         

                                      

                              

                            

                             

                             

                             

                            
                              
                                
                                

                              

                              
                                7.01(k)-A-2

                                
                                  

                                

                              

                              
                                
                                

                              

                            

                             

                             

                            Schedule
7.01(k) - B

                            to Credit
Agreement

                             

                            APPROVED PERFORMANCE TEST
PROTOCOLS

                            

                            1.      
   Performance Test
Protocols

                            

                            1.1      
Pre-Test
Preparation

                            

                            1.1.1 -
Before commencement of PERFORMANCE TEST, OWNER shall notify INDEPENDENT ENGINEER
in writing at least seven (7) days prior to planned commencement of the
PERFORMANCE TEST that all pre-test conditions have been satisfied, including the
following:

                            

                             

                            
                              	
                                       
      

                                    	
                                      ·

                                    	
                                      Adequate
      and competent supervision, personnel and resources for effective
      operation, maintenance and performance analysis of the PLANT, including
      laboratory analysis, temporary meters or other measuring devices and
      instrumentation specified as to accuracy and reproducibility by OWNER in
      advance of the PERFORMANCE TEST required to conduct and evaluate the
      PERFORMANCE TEST shall have been furnished. The PLANT shall be operated
      and maintained in accordance with the technical advice and instruction
      from the Operations Manual and otherwise within generally accepted
      practices within the fuel ethanol
industry.

                                    

                            

                             

                            
                              	
                                       
      

                                    	
                                      ·

                                    	
                                      The
      PLANT, its machinery, equipment, instrumentation and piping, shall all be
      clean lubricated where appropriate, leak tight, and ready to operate
      according to design specifications. All systems and appropriate checkouts
      and calibrations shall have been completed and documented by responsible
      PLANT technicians, contractors, and/or vendors. Analytical and any special
      test equipment and reagents will have been calibrated and made
      accurate.

                                    

                            

                             

                            
                              	
                                       
      

                                    	
                                      ·

                                    	
                                      Cleaning
      (CIP) of the process equipment has been accomplished seven (7) days or
      less before the PERFORMANCE TEST and standard procedures set out in the
      Operations Manual. All ingredients and supplies required to complete the
      test are on hand. This includes, but is not limited to, feedstock of corn
      (meeting specifications listed in Annex A, Section
      1.2.1) supplied in stable quantities sufficient to support PLANT
      operation at a rate up to 125% of the design-basis fuel ethanol production
      rate, as well as sufficient steam and other utilities, enzymes, chemicals,
      and other ingredients of the type specified by in the Operations Manual
      and supplies to support PLANT operation at a rate up to 125% of the
      design-basis fuel ethanol production
rate.

                                    

                            

                             

                            
                              	
                                       
      

                                    	
                                      ·

                                    	
                                      Adequate
      operation, analytical, and maintenance support shall be scheduled for the
      test period.

                                    

                            

                             

                            
 

                            
                              
                                
                                   

                                

                                
                                  7.01(k)-B-1

                                  
                                    

                                  

                                

                                
                                   

                                

                              

                            

                            

                            1.2      
Coordination

                             

                            

                            1.2.1 -
 OWNER shall coordinate, direct and supervise the Performance Test during
the 24 hour/day seven day PERFORMANCE TEST period.

                            

                            1.2.2 -
OWNER shall supply, or cause to be supplied, all feedstock, utilities and other
supplies and services required to conduct the PERFORMANCE TEST, as specified
under Section 1.1.1 above, throughout the entire PLANT during all PERFORMANCE
TESTS.

                             

                            1.3       
Conducting the
Test

                            

                            1.3.1 -
At the scheduled start time of the PERFORMANCE TEST, the OWNER will signal that
the test has formally begun and will direct operators to take the initial test
measurements. The test will be conducted over a seven-day (168 hour) period of
operation. OWNER'S personnel shall operate the PLANT in compliance with
manufacturers' recommendations, the Operations Manual, including, without
limitation, adjustments in temperatures, pressures, feedstock rates, steam flow,
and other process control inputs, provided these adjustments do not result in
unsafe operating conditions. PLANT operators will monitor and record operating
data according to standard procedures and in addition will record the
supplemental data specified in this protocol on data sheets. Records will be
developed from permanent plant equipment that is calibrated immediately prior to
test. If the Performance Guarantees have been met, then OWNER shall, within five
(5) days of completion of the PERFORMANCE TESTS, issue a notice to the
INDEPENDENT ENGINEER to such effect. OWNER will also provide the air emissions
test data to INDEPENDENT ENGINEER as quickly as possible. If the PERFORMANCE
TESTS have not been met, then OWNER shall issue a written notice to the
INDEPENDENT ENGINEER within five (5) days of completion of the PERFORMANCE TESTS
indicating in what manner such PERFORMANCE TESTS have not been successfully
completed.

                            

                            1.3.2 -
If the 168-hour test period is interrupted for any reason within the OWNER'S
control, a new 168-hour test period will resume after the cause for the
interruption has been corrected and the PLANT has achieved an acceptable
operating capacity at substantially the same rate immediately prior to the
interruption. If the 168-hour test period is interrupted for any reason outside
of the OWNER'S control, such as any earthquake, fire, flood, hurricane, storm,
tornado or other act of God, war (declared or not), terrorism, hostilities,
blockade, revolution, strike (of a general or national nature), insurrection,
riot, disruption of service by the electric energy supplier and/or disruption of
service by natural gas supplier, the seven-day test period will resume after the
cause for the interruption has been corrected and the PLANT has achieved an
acceptable operating capacity at substantially the same rate immediately prior
to the interruption. If it becomes obvious that the PERFORMANCE TEST cannot be
carried out to a satisfactory conclusion in the current attempt, OWNER shall
stop the PERFORMANCE TEST if it becomes obvious that it cannot be carried to a
satisfactory conclusion in the current attempt.

                            

                            1.3.3 -
OWNER shall conduct the PERFORMANCE TEST described herein in such a manner so
that at all times during such PERFORMANCE TEST the PLANT is operating in
compliance with its air permits.

                            

                            

                            
                              
                                
                                   

                                

                                
                                  7.01(k)-B-2

                                  
                                    

                                  

                                

                                
                                   

                                

                              

                            

                            

                            1.3.4 -
The PERFORMANCE TEST is to be run with a normal complement of PLANT employees
and under normal operating conditions with essential equipment in automatic
control. No automatic controls or safety protections may be temporarily bypassed
nor may any temporary equipment or procedures be used during the PERFORMANCE
TEST. Permanently installed plant instruments are to be utilized as applicable
for performance testing and data is to be accessed through the DCS. Instruments
are to be calibrated by OWNER.

                             

                            2.         
Analytical/Calculation
Protocols

                             

                            2.1       
Undenatured
Fuel Ethanol Quality

                             

                            
                              	
                                      METHOD:
      

                                    	
                                      Analyze
      samples according to OWNER provided procedures. The last test result
      before emptying day tank into main storage tank shall determine the
      quality for the batch. The average of all batch test results over the test
      period shall be used in determining the quality for the PERFORMANCE
      TEST.

                                       

                                      If the fuel ethanol in the day tank does
      not meet the quality specifications of Annex A, Section 1.2.1,
      OWNER has the discretion to send it on to the main storage tank on the
      theory that the blended product in the main storage tank will meet the
      quality specifications. The average of all batch test results shall be
      used to establish the blended quality. If the blended fuel ethanol does
      not meet quality specifications as a result of below quality product
      measured in one or more day tank batches the volume of the batch(s) shall
      not be included in ethanol production "rate" quantities used in
      calculating liquidated damages.

                                    

                            

                             

                             

                             

                            
                              	
                                      SAMPLE
      POINT:

                                    	
                                      Undenatured
      Fuel Ethanol Day Tank Storage

                                    
	
                                      SAMPLE
      SIZE:

                                    	
                                      250
      mls.

                                    
	
                                      SAMPLE
      CONTAINER:

                                    	
                                      Nalgene

                                    
	
                                      FREQUENCY:

                                    	
                                      Once
      per three (3) hours

                                    
	
                                      SAMPLES
      RETAINED:

                                    	
                                      All

                                    
	
                                      PREPARATION:

                                    	
                                      Standardize
      test reagents. Clean glassware and sample containers. Assure that reagents
      are of sufficient quality.

                                    
	
                                      DOCUMENTATION:

                                    	
                                      Log
      results on a PERFORMANCE TEST Data Sheet (Annex
  B).

                                    

                            

                             

                            2.2       
Undenatured
Fuel Ethanol Production Rate

                             

                            
                              
                                
                                   

                                

                                
                                  7.01(k)-B-3

                                  
                                    

                                  

                                

                                
                                   

                                

                              

                            

                            

                            
                              	
                                      METHOD:

                                    	
                                      The
      day tank will be manually measured every three (3) hours to serve as the
      principal method of measurement of production volume, along with a final
      measurement of the day tank before, the contents are sent to the main
      storage tank(s). In addition, flow totalizer readings will be taken from
      product meter or other measuring device by OWNER at regular intervals as
      backup verification of the manual measurements. The total volume from the
      test meters will be adjusted to a volume equivalent 99.50wt% ethanol at
      60°F. Divide by the total number of test hours to determine the average
      rate over the test period.

                                    

                            

                             

                             

                            
                              	SAMPLE
      POINT:	Product
      volumetric totalizing meter (with computer monitoring) after Product
      Receiver.
	
                                      SAMPLE
      SIZE:

                                    	
                                      N/A

                                    
	
                                      SAMPLE
      CONTAINER:

                                    	
                                      N/A

                                    
	
                                      FREQUENCY:

                                    	
                                      Once
      per three (3) hours and at the end of each Day Tank
  batch.

                                    
	
                                      SAMPLES
      RETAINED:

                                    	
                                      N/A

                                    
	
                                      PREPARATION:

                                    	
                                      Certify
      that the flow meter is properly calibrated.

                                    
	
                                      DOCUMENTATION:

                                    	
                                      Log
      results on a PERFORMANCE TEST Data Sheet (Annex
  B).

                                    

                            

                             

                            2.3       
Undenatured
Fuel Ethanol Yield

                             

                            
                              	
                                      BASIS:

                                    	
                                      56
      lb. per bushel corn containing 14.5% moisture and 72% dry fermentable
      starch and
      a maximum of I% foreign material (by
weight).

                                    

                            

                             

                            
                              	
                                      METHOD: 

                                    	
                                      Record
      Bliss rotary valve readings to measure the accumulated meal weight.
      Measure the sample moisture. Convert total undenatured ethanol volume from
      the Rate Test to weight at 60°F. Divide the calculated mass quantity of
      undenatured ethanol by the calculated corn mass quantity of total starch
      fed over the time period to determine yield. In addition, this Bliss
      rotary valve total should be cross checked by totaling all corn receipts
      and taking into account the current corn bin volumes. Starch content will
      be tested at the Front Range Energy, LLC ethanol production facility and
      one sample will be taken every twelve
hours.

                                    

                            

                             

                             

                            
                              	
                                      TEST
      POINT:

                                    	
                                      Bliss
      rotary valve

                                    
	
                                      FREQUENCY:

                                    	
                                      Once
      per three (3) hours (weight, moisture), Once per twelve (12) hours (starch
      content)

                                    

                            

                            

                            
                              
                                
                                   

                                

                                
                                  7.01(k)-B-4

                                  
                                    

                                  

                                

                                
                                   

                                

                              

                            

                             

                            
                              	
                                      PREPARATION:

                                    	
                                      Certify
      that the Bliss rotary valve is properly calibrated

                                    
	
                                      DOCUMENTATION:

                                    	
                                      Log
      results on "PERFORMANCE. TEST Data Sheet" (Annex
  B)

                                    

                            

                             

                            2.4        Process Electrical
Consumption

                             

                            
                              	
                                       METHOD:
      

                                    	
                                      Record
      electric meter readings at beginning of test and at the required frequency
      thereafter. Divide total kWh for test period by total volume of
      undenatured ethanol produced to determine average kWh per gallon. Average
      results of all calculations for test periods to determine the process
      electrical power consumption value for PERFORMANCE
  TEST.

                                    

                            

                             

                            
                              	
                                      TEST
      POINT:

                                    	
                                      Electric
      power meter types and locations as established by OWNER, and as necessary
      to isolate process consumption. Note that electricity consumption from
      grain receiving, grain storage, and grain milling will not be included in
      PLANT electricity consumption. Electricity consumption from the boilers,
      regenerative thermal oxidizer, and cold lime water softening system will
      be included in PLANT usage, and the calculations for such usage will be
      reported isolated and removed for ethanol plant kWh usage, though both the
      total and net readings will be provided.

                                    
	 
      	 
      
	
                                      FREQUENCY:

                                    	
                                      Once
      per three (3) hours

                                    
	
                                      PREPARATION:

                                    	
                                      Isolate
      process electrical consumption activities during test
    period.

                                    
	
                                      DOCUMENTATION:

                                    	
                                      Log
      results on a PERFORMANCE TEST Data Sheet (Annex
  B)

                                    

                            

                             

                            2.5        Process Natural Gas
Consumption

                             

                            
                              	
                                       
      

                                    	
                                      METHOD:
      Record natural gas flowrate from the flowmeter to the Process consumption
      points. Divide the natural gas/hr value by the average gal/hr undenatured
      ethanol produced during the test period to determine mmbtu of natural gas
      per gallon of undenatured ethanol production. Average results of all
      calculations for test period to determine natural gas consumption value
      for PERFORMANCE TEST.

                                    

                            

                             

                            

                            
                              
                                
                                   

                                

                                
                                  7.01(k)-B-5

                                  
                                    

                                  

                                

                                
                                   

                                

                              

                            

                             

                             

                            
                              
                                	
                                        TEST
      POINT:

                                      	
                                        Natural
      gas supply flow meter(s) and locations as established by OWNER, and as
      necessary to isolate process consumption.

                                      
	 
      	 
      
	
                                        FREQUENCY:

                                      	
                                        Once
      per three (3) hours

                                      
	 
      	 
      
	
                                        PREPARATION:

                                      	
                                        Certify
      natural gas flowmeter, and any other measuring devices are properly
      calibrated and suspend all non- process use of natural gas. Note that
      grain receiving, grain storage and grain milling will be isolated and
      removed for ethanol plant natural gas usage. Total plant usage and usage
      net of regenerative thermal oxidizer will be measured. If necessary, an
      mmbtu/cubic foot correction may be made.

                                      
	 
      	 
      
	
                                        DOCUMENTATION:

                                      	
                                        Log
      results on a "Performance Test Data Sheet" (Annex B)

                                      
	 
      	 
      

                              

                               

                            

                             

                            2.6       
CALCULATION PROTOCOL

                             

                            All
calculations will be based on actual measured data taken during the test period.
For any given sample period, the average value during that period will be
determined by the average of the measured data points

                             

                             

                             

                             

                             

                             

                            
 

                            
                              
                                
                                   

                                

                                
                                  7.01(k)-B-6

                                  
                                    

                                  

                                

                                
                                   

                                

                              

                            

                            

                             

                            Annex
A

                            to
Approved Performance

                            Test
Protocols

                             

                             

                            Specifications

                             

                            1.2.1    
Anhydrous Undenatured Ethanol Production Specification

                             

                            
                              Anhydrous
Undenatured Ethanol Production Specification

                               

                              
                                	
                                        Anhydrous
      Fuel Ethanol Production Rate

                                      	
                                        Minimum
      4,522.23 (Madera and Boardman)  or 6,783.34 (Stockton, Brawley and
      Burley) US undenatured gallons per hour (average over the seven day test,
      see below) based on a minimum feedstock specification of 56 lb/bushel test
      weight corn containing a maximum of 14.5% moisture (by weight), a minimum
      of 72% dry fermentable starch (by weight) and a maximum of 1% foreign
      material (by weight).

                                         

                                        Undenatured
      ethanol will meet specifications per ASTM
  D4806-06c.

                                      

                              

                               

                               

                               

                              
                                
                                  	
                                          40MGY1

                                        	
                                          60MGY2

                                        	
                                          Unit

                                        
	
                                          4,522.23

                                        	
                                          6,783.34

                                        	
                                          ugal/hr

                                        
	
                                          24

                                        	
                                          24

                                        	
                                          hrs/day

                                        
	
                                          108,533

                                        	
                                          162,800

                                        	
                                          ugal/day

                                        
	
                                          351

                                        	
                                          351

                                        	
                                          days/yr

                                        
	
                                          38,095,238
      

                                        	 
      57,142,857 	 
      ugal/yr
	
                                          5.00%

                                        	
                                          5.00%

                                        	
                                          denaturant
      %

                                        
	
                                          1,904,762

                                        	
                                          2,857,143

                                        	
                                           denaturant/yr

                                        
	
                                          40,000,000

                                        	
                                          60,000,000

                                        	
                                          dgal/yr

                                        
	
                                           

                                          Notes

                                          1.     Madera
      and Boardman plants

                                          2.     Stockton,
      Burley and Brawley plants
 	 

                                

                              

                               

                              
                              

                               

                              
                                	
                                        Anhydrous

                                        Fuel
      Ethanol Yield:

                                      	
                                        Minimum
      2.68 gallons undenatured ethanol per bushel of corn feed based on a
      minimum feedstock specification of 56 lb/bushel test weight No. 2 Yellow
      Dent corn containing a maximum of 14.5%
      moisture (wgt), minimum 72% dry, trash-free starch, maximum 1%
      (wgt) foreign material.

                                      

                              

                               

                               

                            

                            

                             

                             

                            

                            
                              
                                
                                   

                                

                                
                                  7.01(k)-B-7

                                  
                                    

                                  

                                

                                
                                   

                                

                              

                            

                            

                            

                              1.2.2    
Utility Consumption Specification

                               

                              
                                	
                                        Process
      Electrical Consumption:

                                      	 
      	
                                        Maximum
      0.80 kWh per gallon (average) of undenatured fuel ethanol produced when
      operating at the nameplate capacity. This number includes process
      equipment components in mash preparation,
      liquefaction and cook,

                                        
                                          Yeast
      mix and propagation,   fermentation, distillation, dehydration
      and acid reduction, evaporation, separation and stillage,
      processcondensate, chemical storage, CO2scrubbing, compressed air, closed
      seal water system, WDGS transfer and handling, ethanol storage and
      loadout, cooling tower and chiller including cooling and chilled water
      circulation, condensate return, process sumps, and heat tracing,
      regenerative thermal oxidizer, cold lime water softening, boilers, and CO2
      recovery equipment installed at PLANT (minor equipment related only to
      transfer of CO2). The indicated consumption does not include grain
      receiving, grain storage, grain milling, CO2 processing, CO2 pressurizing,
      or CO2 liquification. . This guarantee is based on the use of extra high
      efficiency motors in all applications and 4160 volt motors for
      applications over 200
HP.

                                        

                                      

                              

                            

                            
                              	 
      	
                                       

                                    
	
                                      Process
      Natural Gas Consumption:

                                    	
                                      Maximum
      27,059 actual natural gasBTUs per gallon (average)
      of undenatured fuel ethanol produced (as calculated in Section 2.5 of the
      Approved Performance Test Protocols). This number includes the natural gas
      to all process components except grain receiving, grain storage and grain
      milling.

                                    

                            

                            

                             

                            
                              
                                
                                   

                                

                                
                                  7.01(k)-B-8

                                  
                                    

                                  

                                

                                
                                   

                                

                              

                            

                            

                            Annex
B

                            to
Approved Performance

                            Test
Protocols

                            Friday, 2/16/07

                            

                            
                              	
                                      0600

                                    	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	
                                      0900

                                    	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	
                                      1200

                                    	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	
                                      1500

                                    	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	
                                      1800

                                    	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	
                                      1200

                                    	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      

                            

                            

                             

                            

                            

                            

                            
                              
                                
                                   

                                

                                
                                  7.01(k)-B-9

                                  
                                    

                                  

                                

                                
                                   

                                

                              

                            

                            

                            Annex
C

                            to
Approved Performance

                            Test
Protocols

                             

                            Additional
Measurements

                             

                            Water
Consumption (once per day)

                            Syrup
production (once per day)

                            Beginning
inventory of WDG

                            Ending
inventory of WDG

                            Amount of
WDG shipped (per weight certificates) during testing period

                            Beginning
corn inventory (by silo)

                            Ending
corn inventory (by silo)

                            Beginning
ethanol inventory (by tank)

                            Ending
ethanol inventory (by tank)

                            Denatured
ethanol (once per day)

                             

                            

                             

                            

                            

                            
                              
                                
                                   

                                

                                
                                  7.01(k)-B-10

                                  
                                    

                                  

                                

                                
                                   

                                

                              

                            

                            

                            Annex
D

                            to
Approved Performance

                            
 

                            Test
Protocols

                             

                            Additional
Deliverables to Independent Engineer

                            Air
emissions test protocol (NRG coordinating Avogadro labs running
tests)

                            Copy of
letter to State of California (or appropriate Agency thereof) notifying of
emissions test Details of 2/8/07 shutdown (CIP, etc)

                            Details
of testing equipment calibration

                            List of
personnel running and overseeing plant, roles

                            Corn
starch sample 2x per day, send to FRE

                            Send FRE
corn starch sampling SOP

                            Adjust
financial model for non-scope elec, nat gas, if necessary

                            Elec
consumption readings on CLS, RTO — adjust .77 kWh up in financial model,
guarantee

                             

                            

                            
                              
                                
                                   

                                

                                
                                  7.01(k)-B-11

                                  
                                    

                                  

                                

                                
                                   

                                

                              

                            

                            

                              SCHEDULE
7.02(f) 

                              to Credit
Agreement

                               

                              STORAGE
FACILITIES

                               

                              Madera
Grain Mill

                               

                              The grain
mill and associated storage facilities at the Madera Site, consisting of three
grain rolling mills, each capable of producing approximately 35 tons per hour of
rolled grain, eight associated silos, three interstices (spaces between the
silos) with a combined storage capacity of approximately 50,000 tons of grain,
and several outbuildings at the Madera Site, including a large pole barn for
transloading of commodities that are deemed part of the grain milling
operations.

                               

                              Proposed
Stockton Ethanol Tank Farm

                               

                              PECA
plans to construct a tank farm at or adjacent to the Stockton Site at the Port
of Stockton. The five million gallon tank farm is expected to have associated
rail and truck unloading facilities capable of unloading a unit train of
ethanol. A portion of the Stockton Plant's output is expected to be pipelined
directly to the tank farm.

                               

                              Proposed
Burley Grain Milling Facilities

                               

                              PECA may
construct grain storage and grain milling facilities adjacent to the Burley
Site. Any such facilities would be in excess of that required for normal
operation of the Burley Plant. PECA may also construct facilities to mix the
distillers grains from the Burley Plant with rolled or ground grain from the
proposed grain mill.

                               

                               

                               

                              
                                
                                  
                                  

                                

                                
                                  7.02(f)-1

                                  
                                    

                                  

                                

                                
                                  
                                  

                                

                              

                            

                             

                            
                              Schedule
7.02(t)

                              to Credit
Agreement

                               

                              CONSTRUCTION
BUDGETS

                               

                               

                               

                               

                               

                               

                               

                               

                               

                               

                               

                               

                               

                               

                               

                               

                               

                               

                               

                               

                               

                              
                                
                                  
                                  

                                

                                
                                  7.02(t)-1

                                  
                                    

                                  

                                

                                
                                  
                                  

                                

                              

                            

                             

                             

                            
                              Pacific
Ethanol Columbia, LLC (Boardman, Oregon)

                              Summary
Construction and Project Cost Budget

                               

                              
                                	
                                        Construction
      Costs:

                                      	 	 	 
	
                                        Engineering
      / Procurement / Land & Sitework

                                      	 	$	6,555,948	 
	
                                        Site
      Utilities I Buildings / Other Improvements

                                      	 	 	4,645,616	 
	
                                        Grain
      Systems & Rail Infrastruacture

                                      	 	 	6,088,000	 
	
                                        Concrete
      Earthwork / Foundations

                                      	 	 	5,560,215	 
	
                                        Structural
      Steel I Piping Materials

                                      	 	 	7,759,049	 
	
                                        Pipe
      Installation / Valves

                                      	 	 	6,660,880	 
	
                                        Equipment
      & Installation

                                      	 	 	8,798,917	 
	
                                        Field
      & Shop Fabricated Tanks

                                      	 	 	8,938,947	 
	
                                        Evaporators
      / Véssels / Columns

                                      	 	 	5,125,286	 
	
                                        Electrical
      / Control Systems / Instrumentation

                                      	 	 	4,627,370	 
	
                                        Final
      Product Handling / Fire Safety / Other

                                      	 	 	7,303,500	 
	
                                        Total
      construction cost

                                      	 	 	72,063,728	 
	 	 	 	 	 
	
                                        Inventory:

                                      	 	 	 	 
	
                                        Corn

                                      	 	 	2,915,400	 
	
                                        Ethanol

                                      	 	 	880,116	 
	
                                        WDGs

                                      	 	 	72,561	 
	
                                        Denaturant

                                      	 	 	149,451	 
	
                                        Chemicals/enzymes/yeast

                                      	 	 	241,709	 
	
                                        Spare
      parts

                                      	 	 	550,000	 
	
                                        Total
      inventory

                                      	 	 	4,809,237	 
	 	 	 	 	 
	
                                        Financing:

                                      	 	 	 	 
	
                                        Capitalized
      interest

                                      	 	 	310,000	 
	
                                        Capitalized
      fees

                                      	 	 	2,125,000	 
	
                                        Debt
      service reserve account

                                      	 	 	1,679,000	 
	
                                        Interest
      income offset

                                      	 	 	- 	 
	
                                        Total
      financing

                                      	 	 	4,114,000	 
	 	 	 	 	 
	
                                        Other
      Capital Costs:

                                      	 	 	 	 
	
                                        Other
      working capital (AIR - NP)

                                      	 	 	1,329,574	 
	
                                        Operating
      expenses

                                      	 	 	1,744,401	 
	
                                        Contingency

                                      	 	 	7,892,440	 
	
                                        Total
      other capital costs

                                      	 	 	10,966,415	 
	 	 	 	 	 
	
                                        Total
      Project Cost

                                      	 	$	91,953,380	 

                              

                            

                             

                             

                             

                            
                              
                                
                                

                              

                              
                                7.02(t)-2

                                
                                  

                                

                              

                              
                                
                                

                              

                            

                             

                             

                            
                              Pacific
Ethanol Imperial, LW (Brawley, California)

                              Summary
Construction and Project Cost Budget

                               

                              
                                	
                                        Construction
      Costs:

                                      	 	 	 
	
                                        Engineering
      / Procurement / Land & Sitework

                                      	 	$	12,124,440	 
	
                                        Site
      Utilities I Buildings / Other Improvements

                                      	 	 	11,820,000	 
	
                                        Grain
      Systems & Rail Infrastruacture

                                      	 	 	6,000,000	 
	
                                        Concrete
      Earthwork / Foundations

                                      	 	 	6,650,000	 
	
                                        Structural
      Steel I Piping Materials

                                      	 	 	10,000,000	 
	
                                        Pipe
      Installation / Valves

                                      	 	 	9,750,000	 
	
                                        Equipment
      & Installation

                                      	 	 	14,529,000	 
	
                                        Field
      & Shop Fabricated Tanks

                                      	 	 	10,520,000	 
	
                                        Evaporators
      / Vessels / Columns

                                      	 	 	7,425,000	 
	
                                        Electrical
      / Control Systems / Instrumentation

                                      	 	 	8,150,000	 
	
                                        Final
      Product Handling I Fire Safety / Other

                                      	 	 	7,707,000	 
	
                                        Total
      construction cost

                                      	 	 	104,675,440	 
	 	 	 	 	 
	
                                        Inventory:

                                      	 	 	 	 
	
                                        Corn

                                      	 	 	2,942,552	 
	
                                        Ethanol

                                      	 	 	1,329,592	 
	
                                        WDGs

                                      	 	 	109,385	 
	
                                        Denaturant

                                      	 	 	224,176	 
	
                                        Chemicals/enzymes/yeast

                                      	 	 	241,709	 
	
                                        Spare
      parts

                                      	 	 	650,000	 
	
                                        Total
      inventory

                                      	 	 	5,497,414	 
	 	 	 	 	 
	
                                        Financing:

                                      	 	 	 	 
	
                                        Capitalized
      interest

                                      	 	 	2,399,900	 
	
                                        Capitalized
      fees

                                      	 	 	2,655,000	 
	
                                        Debt
      service reserve account

                                      	 	 	2,002,500	 
	
                                        Interest
      income offset

                                      	 	 	 	 
	
                                        Total
      financing

                                      	 	 	7,057,400	 
	 	 	 	 	 
	
                                        Other
      Capital Costs:

                                      	 	 	 	 
	
                                        Other
      working capital (A/R - A/P)

                                      	 	 	1,770,872	 
	
                                        Operating
      expenses

                                      	 	 	2,402,994	 
	
                                        Contingency

                                      	 	 	11,836,804	 
	
                                        Total
      other capital costs

                                      	 	 	16,010,671	 
	
                                        Total
      Project Cost

                                      	 	$	133,240,925	 

                              

                            

                             

                             

                             

                            
                              
                                
                                

                              

                              
                                7.02(t)-3

                                
                                  

                                

                              

                              
                                
                                

                              

                            

                             

                            
                              Pacific
Ethanol Magic Valley, LLC (Burley, Idaho)

                              Summary
Construction and Project Cost Budget

                               

                              
                                	
                                        Construction
      Costs:

                                      	 	 	 
	
                                        Engineering
      / Procurement I Land & Sitework

                                      	 	$	9,382,440	 
	
                                        Site
      Utilities / Buildings / Other Improvements

                                      	 	 	8,920,000	 
	
                                        Grain
      Systems & Rail Infrastruacture

                                      	 	 	8,700,000	 
	
                                        Concrete
      Earthwork / Foundations

                                      	 	 	6,650,000	 
	
                                        Structural
      Steel / Piping Materials

                                      	 	 	10,200,000	 
	
                                        Pipe
      Installation / Valves

                                      	 	 	9,750,000	 
	
                                        Equipment
      & Installation

                                      	 	 	10,829,000	 
	
                                        Field
      & Shop Fabricated Tanks

                                      	 	 	10,520,000	 
	
                                        Evaporators
      / Vessels / Columns

                                      	 	 	7,425,000	 
	
                                        Electrical
      / Control Systems / Instrumentation

                                      	 	 	8,150,000	 
	
                                        Final
      Product Handling / Fire Safety / Other

                                      	 	 	7,907,000	 
	
                                        Total
      construction cost

                                      	 	 	98,433,440	 
	 	 	 	 	 
	
                                        Inventory:

                                      	 	 	 	 
	
                                        Corn

                                      	 	 	2,831,994	 
	
                                        Ethanol

                                      	 	 	1,299,618	 
	
                                        WDGs

                                      	 	 	99,554	 
	
                                        Denaturant

                                      	 	 	228,659	 
	
                                        Chemicals/enzymes/yeast

                                      	 	 	244,126	 
	
                                        Spare
      parts

                                      	 	 	650,000	 
	
                                        Total
      inventory

                                      	 	 	5,353,951	 
	 	 	 	 	 
	
                                        Financing:

                                      	 	 	 	 
	
                                        Capitalized
      interest

                                      	 	 	1,539,083	 
	
                                        Capitalized
      fees

                                      	 	 	2,815,000	 
	
                                        Debt
      service reserve account

                                      	 	 	2,002,500	 
	
                                        Interest
      income offset

                                      	 	 	 	 
	
                                        Total
      financing

                                      	 	 	6,356,583	 
	 	 	 	 	 
	
                                        Other
      Capital Costs:

                                      	 	 	 	 
	
                                        Other
      working capital (A/R - NP)

                                      	 	 	1,940,409	 
	
                                        Operating
      expenses

                                      	 	 	1,793,384	 
	
                                        Contingency

                                      	 	 	11,158,702	 
	
                                        Total
      other capital costs

                                      	 	 	14,892,494	 
	 	 	 	 	 
	
                                        Total
      Project Cost

                                      	 	$	125 036,469	 

                              

                               

                              

                              
                                
                                  
                                  

                                

                                
                                  7.02(t)-4

                                  
                                    

                                  

                                

                                
                                  
                                  

                                

                              

                               

                              
                                Pacific
Ethanol Stockton, LLC (Stockton, California) Summary Construction and Project
Cost Budget

                                 

                                
                                  	
                                          Construction
      Costs:

                                        	 	 	 
	
                                          Engineering
      I Procurement / Land & Sitework

                                        	 	$	14,252,440	 
	
                                          Site
      Utilities / Buildings / Other Improvements

                                        	 	 	9,520,000	 
	
                                          Grain
      Systems & Rail Infrastruacture

                                        	 	 	12,150,000	 
	
                                          Concrete
      Earthwork / Foundations

                                        	 	 	6,650,000	 
	
                                          Structural
      Steel / Piping Materials

                                        	 	 	10,200,000	 
	
                                          Pipe
      Installation / Valves

                                        	 	 	9,750,000	 
	
                                          Equipment
      & Installation

                                        	 	 	10,829,000	 
	
                                          Field
      & Shop Fabricated Tanks

                                        	 	 	10,520,000	 
	
                                          Evaporators
      / Vessels / Columns

                                        	 	 	7,425,000	 
	
                                          Electrical
      / Control Systems / Instrumentation

                                        	 	 	8,150,000	 
	
                                          Final
      Product Handling / Fire Safety / Other

                                        	 	 	7,307,000	 
	
                                          Total
      construction cost

                                        	 	 	106,753,440	 
	 
      	 	 	 	 
	
                                          Inventory:

                                        	 	 	 	 
	
                                          Corn

                                        	 	 	3,019,093	 
	
                                          Ethanol

                                        	 	 	1,322,641	 
	
                                          WDGs

                                        	 	 	116,689	 
	
                                          Denaturant

                                        	 	 	224,176	 
	
                                          Chemicals/enzymes/yeast

                                        	 	 	241,709	 
	
                                          Spare
      parts

                                        	 	 	650,000	 
	
                                          Total
      inventory

                                        	 	 	5,574,308	 
	 	 	 	 	 
	
                                          Financing:

                                        	 	 	 	 
	
                                          Capitalized
      interest

                                        	 	 	1,927,233	 
	
                                          Capitalized
      fees

                                        	 	 	2,655,000	 
	
                                          Debt
      service reserve account

                                        	 	 	2,002,500	 
	
                                          Interest
      income offset

                                        	 	 	- 	 
	
                                          Total
      financing

                                        	 	 	6,584,733	 
	 	 	 	 	 
	
                                          Other
      Capital Costs:

                                        	 	 	 	 
	
                                          Other
      working capital (A/R - NP)

                                        	 	 	1,755,365	 
	
                                          Operating
      expenses

                                        	 	 	2,481,126	 
	
                                          Contingency

                                        	 	 	12,053,548	 
	
                                          Total
      other capital costs

                                        	 	 	16,290,039	 
	 	 	 	 	 
	
                                          Total
      Project Cost

                                        	 	$	135,202,520	 

                                

                                 

                                

                                 

                                
                                  
                                    
                                    

                                  

                                  
                                    7.02(t)-5

                                    
                                      

                                    

                                  

                                  
                                    
                                    

                                  

                                

                              

                            

                             

                             

                            
                              Schedule
8.08(c)(xiii) 

                              to the Credit
Agreement

                               

                              Target Balance
Amounts

                               

                              On the
Conversion Date, the Target Balance Amount shall be an amount equal to the
aggregate principal amount of Term Loans disbursed on the Conversion Date and,
on each Quarterly Payment Date after the Conversion Date, the Target Balance
Amount shall be reduced by an amount equal to one twentieth (1/20) of the
aggregate principal amount of the Term Loans disbursed on the Conversion
Date.

                               

                              If an
Event of Total Loss with respect to any Plant or an Event of Taking with respect
to all or substantially all of any Plant or a sale, transfer or other
disposition with respect to all or substantially all of any Plant occurs, then
the Target Balance Amount for each Quarterly Payment Date will be reduced by an
amount equal to a ratio equal to the number of Plants affected by such
occurrence to the number of Plants with respect to which a Funding has been
made.

                               

                               

                               

                               

                               

                               

                              
                                
                                  
                                  

                                

                                
                                  8.08(c)(xiii)-1

                                  
                                    

                                  

                                

                                
                                  
                                  

                                

                              

                            

                             

                             

                            
                              SCHEDULE
11.12 

                              to Credit
Agreement

                               

                               

                              NOTICE
INFORMATION

                              
                                	
                                        I. 

                                      	
                                        BORROWERS

                                         

                                        
                                          PACIFIC
      ETHANOL HOLDING CO. LLC

                                           c/o Pacific
      Ethanol, Inc.

                                          5711
      N. West Avenue Fresno, California 93711

                                          Attn:
      Jeff Manternach

                                          Telephone:
      (559) 435-1771

                                          Facsimile:
      (559) 435-1478

                                           

                                          with
      a copy to:

                                           

                                          Pacific
      Ethanol Holding Co. LLC

                                          c/o
      Pacific Ethanol, Inc.

                                          400
      Capital Mall, Suite 2060

                                          Sacramento,
      CA 95814

                                          Attn:
      General Counsel

                                          Telephone:
      (916) 403-2130

                                          Facsimile:
      (916) 446-3937

                                           

                                          PACIFIC
      ETHANOL MADERA LLC

                                          c/o
      Pacific Ethanol, Inc.

                                          5711
      N. West Avenue

                                          Fresno,
      California 9371 1

                                          Attn:
      Jeff Manternach

                                          Telephone:
      (559) 435-1771

                                          Facsimile:
      (559) 435-1478

                                           

                                          with
      a copy to:

                                           

                                          Pacific
      Ethanol Madera LLC

                                          c/o
      Pacific Ethanol, Inc.

                                          400
      Capital Mall, Suite 2060

                                          Sacramento,
      CA 95814

                                          Attn:
      General Counsel

                                          Telephone:
      (916) 403-2130

                                          Facsimile:
      (916) 446-3937

                                        

                                      

                              

                               

                            

                             

                            
                              
                                
                                

                              

                              
                                11.12-1

                                
                                  

                                

                              

                              
                                
                                

                              

                            

                            
                               

                               

                              
                                	
                                        I. 

                                      	
                                        
                                          PACIFIC
      ETHANOL COLUMBIA, LLC

                                          c/o
      Pacific Ethanol, Inc.

                                          5711
      N. West Avenue

                                          Fresno,
      California 93711

                                          Attn:
      Jeff Manternach

                                          Telephone:
      (559) 435-1771

                                          Facsimile:
      (559) 435-1478

                                           

                                          with
      a copy to:

                                           

                                          Pacific
      Ethanol Columbia, LLC

                                          c/o
      Pacific Ethanol, Inc.

                                          400
      Capital Mall, Suite 2060

                                          Sacramento,
      CA 95814

                                          Attn:
      General Counsel

                                          Telephone:
      (916) 403-2130

                                          Facsimile:
      (916) 446-3937

                                           

                                          PACIFIC
      ETHANOL STOCKTON, LLC

                                          c/o
      Pacific Ethanol, Inc.

                                          5711
      N. West Avenue

                                          Fresno,
      California 93711

                                          Attn:
      Jeff Manternach

                                          Telephone:
      (559) 435-1771

                                          Facsimile:
      (559) 435-1478

                                           

                                          with
      a copy to:

                                           

                                          Pacific
      Ethanol Stockton, LL

                                          c/o
      Pacific Ethanol, Inc.

                                          400
      Capital Mall, Suite 2060

                                          Sacramento,
      CA 95814

                                          Attn:
      General Counsel

                                          Telephone:
      (916) 403-2130

                                          Facsimile:
      (916) 446-3937

                                        

                                      

                              

                              
 

                               

                              
                                
                                  
                                  

                                

                                
                                  11.12-2

                                  
                                    

                                  

                                

                                
                                  
                                  

                                

                              

                               

                              
                                	
                                        I. 

                                      	
                                        
                                          PACIFIC
      ETHANOL IMPERIAL, LLC

                                          
                                            c/o
      Pacific Ethanol, Inc. 5711 N. West Avenue

                                            Fresno,
      California 93711

                                            Attn:
      Jeff Manternach

                                            Telephone:
      (559) 435-1771

                                            Facsimile:
      (559) 435-1478

                                             

                                            with
      a copy to:

                                             

                                            Pacific
      Ethanol Imperial, LLC

                                            c/o
      Pacific Ethanol, Inc.

                                            400
      Capital Mall, Suite 2060

                                            Sacramento,
      CA 95814

                                            Attn:
      General Counsel

                                            Telephone:
      (916) 403-2130

                                            Facsimile:
      (916) 446-3937

                                             

                                            PACIFIC
      ETHANOL MAGIC VALLEY, LLC

                                            c/o
      Pacific Ethanol, Inc.

                                            5711
      N. West Avenue

                                            Fresno,
      California 93711

                                            Attn:
      Jeff Manternach

                                            Telephone:
      (559) 435-1771

                                            Facsimile:
      (559) 435-1478

                                             

                                            with
      a copy to:

                                             

                                            Pacific
      Ethanol Magic Valley, LL

                                             c/o
      Pacific Ethanol, Inc.

                                            400
      Capital Mall, Suite 2060

                                            Sacramento,
      CA 95814

                                            Attn:
      General Counsel

                                            Telephone:
      (916) 403-2130

                                            Facsimile:
      (916) 446-3937

                                          

                                        

                                      

                              

                               

                               

                               

                              
                                
                                  
                                  

                                

                                
                                  11.12-3

                                  
                                    

                                  

                                

                                
                                  
                                  

                                

                              

                               

                               

                              
                                
                                  	
                                          II. 

                                        	
                                          BORROWERS'
      AGENT

                                           

                                          PACIFIC
      ETHANOL HOLDING CO. LLC

                                          
                                            400
      Capitol Mall, Suite 2060

                                            Sacramento,
      CA 95814

                                            Attention:
      General Counsel

                                            Telephone:
      (559) 435-1771

                                            Facsimile:
      (559) 435-1478

                                          

                                        

                                

                              

                               

                               

                               

                              
                                	
                                        III. 

                                      	
                                        ADMINISTRATIVE
      AGENT, LEAD ARRANGER AND SOLE BOOKRUNNER

                                         

                                        
                                          WESTLB
      AG, NEW YORK BRANCH

                                          1211
      Avenue of the Americas

                                          New
      York, NY 10036

                                          Attention:
      Yolette Salnave / Andrea Bailey

                                          Phone:
      212-852-5994 / 212-597-1158

                                          Facsimile:
      212-302-7946

                                          E-mail
      Address: NYC_Agency_Services@WestLB.com

                                        

                                      

                              

                               

                               

                              
                                	
                                        IV. 

                                      	
                                        COLLATERAL
      AGENT

                                         

                                        
                                          WESTLB AG, NEW YORK BRANCH
      

                                          1211
      Avenue of the Americas,

                                          New
      York, New York 10036

                                          Attention:
      Richard Garbarino

                                          Telephone:
      212 852-5994

                                          Facsimile:
      (212) 597-1490

                                        

                                      

                              

                               

                               

                              
                                	
                                        V. 

                                      	
                                        ACCOUNTS
      BANK

                                         

                                        
                                          UNION BANK OF CALIFORNIA, N.A.
      

                                          Power
      & Utilities Group

                                          445
      S. Figueroa Street, 15th Floor

                                          Los
      Angeles, CA 90071

                                           

                                           

                                            Attention:
      Jesus Serrano, VP 

                                            Telephone:
      (213) 236-4194

                                            Facsimile:
      (213) 236-4096

                                          

                                        

                                      

                              

                               

                               

                               

                              
                                
                                  
                                  

                                

                                
                                  11.12-4

                                  
                                    

                                  

                                

                                
                                  
                                  

                                

                              

                               

                              
                                	
                                         

                                      	
                                        
                                          Attention:
      Susan Johnson, VP

                                          Telephone:
      (213) 236-4125

                                          Facsimile:
      (213) 236-409

                                        

                                      

                              

                               

                               

                              
                                	
                                        VI. 

                                      	
                                        LEAD
      ARRANGERS AND CO-SYNDICATION AGENTS

                                         

                                        
                                          MIZUHO CORPORATE BANK,
      LTD

                                          1251
      Ave. of the Americas

                                          New
      York, NY 10020

                                           

                                          
                                            CIT
      CAPITAL SECURTIES LLC

                                            c/o
      CIT ENERGY

                                            505
      Fifth Avenue, 10th Floor

                                            New
      York, NY 10017

                                            Attn:
      Thomas Scifo, Assistant Vice President

                                            Telephone:
      212-771-1756

                                            Facsimile:
      212-771-9675

                                          

                                        

                                      

                              

                               

                               

                               

                              
                                	
                                        VII. 

                                      	
                                        LEAD
      ARRANGERS AND CO-DOCUMENTATION AGENTS

                                         

                                        
                                          COOOPERATIVE
      CENTRALE RAIFFEISEN­BOERENLEENBANK BA., "RABOBANK NEDERLAND", NEW YORK
      BRACH

                                          U.S.
      Counsel

                                          245
      Park Avenue

                                          New
      York, NY 10167

                                          Attn:
      Andrew Sherman

                                          Telephone:
      212-808-2513

                                          Facsimile:
      212-916-7880

                                           

                                          with
      a copy to:

                                           

                                          Executive
      Director

                                          123
      North Wacker Drive, Ste. 2100 Chicago, IL 60606

                                          Attn:
      Brad Peterson

                                          Telephone:
      312-408-8222

                                          Facsimile:
      312-408-8240

                                        

                                      

                              

                               

                               

                              
                                
                                  
                                  

                                

                                
                                  11.12-5

                                  
                                    

                                  

                                

                                
                                  
                                  

                                

                              

                               

                              
                                	
                                         

                                      	
                                        
                                          BANCO
      SANTANDER CENTRAL HISPANO S.A., NEW YORK BRANCH

                                          45
      East 53rd Street

                                          New
      York, NY 1022

                                          Attn:
      Felipe Gonzalez

                                          Telephone:
      212-407-0997

                                          Facsimile:
      212-350-0740

                                        

                                      

                              

                               

                              
                                 

                              

                              
                                	
                                        IX.

                                      	
                                        INTEREST
      RATE PROTECTION PROVIDER

                                         

                                        
                                          WESTLB
      AG, NEW YORK BRANCH

                                          1211
      Avenue of the Americas New York, NY 10036

                                          Attention:
      Lawrence Vassallo Phone: 212-597-8500

                                          Facsimile:
      212-597-3977

                                          E-mail
      Address: lawrence_vassallo@westlb.com

                                        

                                      

                              

                               

                               

                               

                               

                               

                               

                               

                               

                               

                               

                               

                               

                               

                               

                              
                                
                                  
                                  

                                

                                
                                  11.12-6paceth_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.

     

     

    
      
        
        

      

      
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    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.

     

    
      
        
        

      

      
        11

        
          

        

      

      
        
        

      

    

     

     

    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.

     

     

    
      
        
        

      

      
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    (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.

     

    

    
      
        
        

      

      
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    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.

     

     

    
      
        
        

      

      
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    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.

     

     

    
      
        
        

      

      
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    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.

     

     

    
      
        
        

      

      
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    (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.

     

     

    
      
        
        

      

      
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    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.

     

    

    
      
        
        

      

      
        50

        
          

        

      

      
        
        

      

    

     

     

    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

            

    

     

     

    
      
        
        

      

      
        54

        
          

        

      

      
        
        

      

    

     

     

    
      	
               
      

            	
              (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;

     

     

    
      
        
        

      

      
        58

        
          

        

      

      
        
        

      

    

     

     

    (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;

     

     

    
      
        
        

      

      
        59

        
          

        

      

      
        
        

      

    

     

     

    (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.

     

     

    
      
        
        

      

      
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    (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.

     

     

    
      
        
        

      

      
        81

        
          

        

      

      
        
        

      

    

     

     

    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.

     

     

    
      
        
        

      

      
        82

        
          

        

      

      
        
        

      

    

     

     

    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.

     

     

    
      
        
        

      

      
        83

        
          

        

      

      
        
        

      

    

     

     

    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.]

     

     

     

     

     

    
      
         

      

      
        84

        
          

        

      

      
         

      

    

     

    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.

            

    

    

    

    
      
        
           

        

        
          2.01 -
1

          
            

          

        

        
           

        

      

    

    

    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

     

    

    
      
        
           

        

        
          2.01 -
2

          
            

          

        

        
           

        

      

    

    

    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;

     

    

    
      
        
           

        

        
          2.01 -
3

          
            

          

        

        
           

        

      

    

     

     

    (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

         

         

        
          
            
               

            

            
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        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

         

         

        

        
          
            
               

            

            
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        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

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