GUARANTEE
THIS GUARANTEE (“Guarantee”), dated
July 28, 2008, is by Pacific Ethanol, Inc., a Delaware corporation
(“Guarantor”), having an office at 400 Capital Mall,
Suite 2060, Sacramento, California 95814, in favor of
Wachovia Capital Finance Corporation (Western), a California
corporation, in its capacity as agent pursuant to the Loan
Agreement (as hereinafter defined) acting for and on behalf of the
parties thereto as lenders (in such capacity, “Agent”),
having an office at 251 South Lake Avenue, Pasadena, California
91101.
W I T N E S S E T H
:
WHEREAS, Agent and the parties to the Loan
Agreement as lenders (individually, each a “Lender” and
collectively, “Lenders”) have entered into financing
arrangements pursuant to which Lenders (or Agent on behalf of
Lenders) may make loans and advances and provide other financial
accommodations to Kinergy Marketing LLC, an Oregon limited
liability company (“Borrower”), as set forth in the
Loan and Security Agreement, dated of even date herewith, by and
among Borrower, Wachovia Bank, National Association, as Issuing
Bank, Agent and Lenders (as the same now exists or may hereafter be
amended, modified, supplemented, extended, renewed, restated or
replaced, the “Loan Agreement”), and the other
agreements, documents and instruments referred to
therein or at any time executed and/or delivered in connection
therewith or related thereto, including, but not limited to, this
Guarantee (all of the foregoing, together with the Loan Agreement,
as the same now exist or may hereafter be amended, modified,
supplemented, extended, renewed, restated or replaced, being
collectively referred to herein as the “Financing
Agreements”); and
WHEREAS, due to the close business and financial
relationships between Borrower and Guarantor, in consideration of
the benefits which will accrue to Guarantor and as an inducement
for and in consideration of Lenders (or Agent on behalf of Lenders)
making loans and advances and providing other financial
accommodations to Borrower pursuant to the Loan Agreement and the
other Financing Agreements;
NOW, THEREFORE, in consideration of the premises
and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, Guarantor hereby
agrees in favor of Agent and Lenders as follows:
1.
Guarantee .
(a) Guarantor
absolutely and unconditionally guarantees and agrees to be liable
for the full and indefeasible payment and performance when due of
the following (all of which are collectively referred to herein as
the “Guaranteed Obligations”): all
obligations, liabilities and indebtedness of any kind, nature and
description of Borrower to Agent and/or any Lender, including
principal, interest, charges, fees, costs and expenses, however
evidenced, whether as principal, surety, endorser, guarantor or
otherwise, arising under the Loan Agreement or any of the other
Financing Agreements, whether now existing or hereafter arising,
whether arising before, during or after the initial or any renewal
term of the Loan Agreement or after the commencement of any case
with respect to Borrower under the United States Bankruptcy Code or
any similar statute (including, without limitation, the payment of
interest and other amounts, which would accrue and become due but
for the commencement of such case, whether or not such amounts are
allowed or allowable in whole or in part in any such case and
including loans, interest, fees, charges and expenses related
thereto and all other obligations of Borrower or its successors to
Agent and any Lender arising after the commencement of such case),
whether direct or indirect, absolute or contingent, joint or
several, due or not due, primary or secondary, liquidated or
unliquidated, secured or unsecured, and however acquired by Agent
or any Lender.
(b) This
Guarantee is a guaranty of payment and not of
collection. Guarantor agrees that Agent and Lenders need
not attempt to collect any Guaranteed Obligations from Borrower or
any other Obligor (as hereinafter defined) or to realize upon any
collateral, but may require Guarantor to make immediate payment of
all of the Guaranteed Obligations to Agent when due, whether by
maturity, acceleration or otherwise, or at any time thereafter may
apply any amounts received in respect of the Guaranteed Obligations
to any of the Guaranteed Obligations, in whole or in part
(including attorneys’ fees and legal expenses incurred by
Agent or any Lender with respect thereto or otherwise chargeable to
Borrower or Guarantor).
(c) Payment
by Guarantor shall be made to Agent at the office of Agent from
time to time on demand as Guaranteed Obligations become
due. Guarantor shall make all payments to Agent on the
Guaranteed Obligations free and clear of, and without deduction or
withholding for or on account of, any setoff, counterclaim,
defense, duties, taxes, levies, imposts, fees, deductions,
withholding restrictions or conditions of any kind. One
or more successive or concurrent actions may be brought hereon
against Guarantor either in the same action in which Borrower or
any other Obligor is sued or in separate actions. In the
event any claim or action, or action on any judgment, based on this
Guarantee is brought against Guarantor, Guarantor agrees not to
deduct, set-off, or seek any counterclaim (other than compulsory
counterclaims) for or recoup any amounts which are or may be owed
by Agent or any Lender to Guarantor.
(d) Notwithstanding
anything to the contrary contained herein, the amount of the
obligations payable by Guarantor under this Guarantee shall be the
aggregate amount of the Guaranteed Obligations unless a court of
competent jurisdiction adjudicates Guarantor’s obligations to
be invalid, avoidable or unenforceable for any reason (including,
without limitation, because of any applicable state, federal or
other law relating to fraudulent conveyances or transfers), in
which case the amount of the Guaranteed Obligations payable by
Guarantor hereunder shall be limited to the maximum amount that
could be guaranteed by Guarantor without rendering
Guarantor’s Guaranteed Obligations under this Guarantee
invalid, avoidable or unenforceable under such applicable
law.
2.
Waivers and Consents .
(a) Notice
of acceptance of this Guarantee, the making of loans and advances
and providing other financial accommodations to Borrower and
presentment, demand, protest, notice of protest, notice of
nonpayment or default and all other notices to which Borrower or
Guarantor is entitled are hereby waived by
Guarantor. Guarantor also waives notice of and hereby
consents to, (i) any amendment, modification, supplement,
extension, renewal, or restatement of the Loan Agreement and any of
the other Financing Agreements, including, without limitation,
extensions of time of payment of or increase or decrease in the
amount of any of the Guaranteed Obligations, the interest rate,
fees, other charges, or any collateral, and the guarantee made
herein shall apply to the Loan Agreement and the other Financing
Agreements and the Guaranteed Obligations as so amended, modified,
supplemented, renewed, restated or extended, increased or
decreased, (ii) the taking, exchange, surrender and releasing of
collateral or guarantees now or at any time held by or available to
Agent for itself and the benefit of Lenders for the obligations of
Borrower or any other party at any time liable on or in respect of
the Guaranteed Obligations or who is the owner of any property
which is security for the Guaranteed Obligations (individually, an
“Obligor” and collectively, the
“Obligors”), (iii) the exercise of, or refraining from
the exercise of any rights against Borrower or any other Obligor or
any collateral, (iv) the settlement, compromise or release of, or
the waiver of any default with respect to, any of the Guaranteed
Obligations and (v) any financing by Agent and/or any Lender of
Borrower under Section 364 of the United States Bankruptcy Code or
consent to the use of cash collateral by Agent and/or Lenders under
Section 363 of the United States Bankruptcy
Code. Guarantor agrees that the amount of the Guaranteed
Obligations shall not be diminished and the liability of Guarantor
hereunder shall not be otherwise impaired or affected by any of the
foregoing.
(b) No
invalidity, irregularity or unenforceability of all or any part of
the Guaranteed Obligations shall affect, impair or be a defense to
this Guarantee, nor shall any other circumstance which might
otherwise constitute a defense available to or legal or equitable
discharge of Borrower in respect of any of the Guaranteed
Obligations, affect, impair or be a defense to this
Guarantee. Without limitation of the foregoing, the
liability of Guarantor hereunder shall not be discharged or
impaired in any respect by reason of any failure by Agent or any
Lender to perfect or continue perfection of any lien or security
interest in any collateral or any delay by Agent or any Lender in
perfecting any such lien or security interest. As to
interest, fees and expenses, whether arising before or after the
commencement of any case with respect to Borrower under the United
States Bankruptcy Code or any similar statute, Guarantor shall be
liable therefor, even if Borrower’s liability for such
amounts does not, or ceases to, exist by operation of
law. Guarantor acknowledges that Agent and Lenders have
not made any representations to Guarantor with respect to Borrower,
any other Obligor or otherwise in connection with the execution and
delivery by Guarantor of this Guarantee and Guarantor is not in any
respect relying upon Agent or any Lender or any statements by Agent
or any Lender in connection with this Guarantee.
(c) Unless
and until the indefeasible payment and satisfaction in full of all
of the Guaranteed Obligations in immediately available funds and
the termination of the financing arrangements of Agent and Lenders
with Borrower, Guarantor hereby irrevocably and unconditionally
waives and relinquishes (i) all statutory, contractual, common law,
equitable and all other claims against Borrower, any collateral for
the Guaranteed Obligations or other assets of Borrower or any other
Obligor, for subrogation, reimbursement, exoneration, contribution,
indemnification, setoff or other recourse in respect to sums paid
or payable to Agent or any Lender by Guarantor hereunder and (ii)
any and all other benefits which Guarantor might otherwise directly
or indirectly receive or be entitled to receive by reason of any
amoun
