EXHIBIT
10.6
PROMISSORY NOTE
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$1,000,000
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Sacramento, California
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FOR VALUE
RECEIVED, the undersigned, PACIFIC ETHANOL, INC., a Delaware
corporation (“ Borrower ”), hereby promises to
pay to NEIL M. KOEHLER or his assigns (“ Lender
”), the principal sum of One Million Dollars ($1,000,000) (or
such lesser amount as shall equal the aggregate unpaid principal
amount loaned hereunder by Lender) together with interest thereon
as hereinafter provided until this Note is paid in full.
1.
Loans. Borrower
may from time to time request in writing, and thereafter Lender
shall make, by the next business day following such written
request, loans hereunder in an aggregate amount of up to One
Dollars ($1,000,000). The aggregate principal amount of the loans
made at any time under this Note shall never exceed the face amount
of this Note.
2.
Principal and Interest Payments . Interest on
the unpaid principal amount hereof shall accrue at a rate per annum
equal to eight percent (8.0%). All principal and accrued and unpaid
interest then owing under this Note shall be due and payable on the
first (1 st
) anniversary of the date first set
forth above (the “ Maturity Date ”) unless the
obligations hereunder are earlier accelerated or satisfied in
accordance with the provisions of this Note. All payments by
Borrower hereunder shall first apply to accrued and unpaid interest
and then to the remaining principal balance under this
Note.
3.
Prepayment . Borrower shall have the right to
prepay all or any part of the remaining balance of this Note at any
time, without premium or penalty.
4.
Payments and Computations . All payments on
account of indebtedness evidenced by this Note shall be made not
later than 5:00 p.m., California time, on the day when due in
lawful money of the United States. Payments are to be made at such
place as Lender may, from time to time, in writing appoint, and in
the absence of such appointment, then at the principal place of
business of Lender as set forth in Paragraph 7
below.
5.
Events of Default . The occurrence of
any of the following shall constitute an “Event of
Default” under this Note:
(a)
Failure to Pay . Borrower shall fail to pay (i) when due any
principal payment on the date due hereunder, or (ii) any interest
or other payment required under the terms of this Note on the date
due, and any such payment shall not have been made within five (5)
days of Borrower’s receipt of Lender’s written notice
to Borrower of such failure to pay; or
(b)
Breach of Note . Borrower, or any direct or indirect
subsidiary of Borrower, shall fail to comply with any material
provision as to which it is obligated under this Note and any such
failure to comply shall not have been cured within ten (10) days of
Borrower’s receipt of Lender’s written notice to
Borrower of such failure to comply.
(c)
Voluntary Bankruptcy or Insolvency Proceedings . Borrower
shall (i) apply for or consent to the appointment of a receiver,
trustee, liquidator or custodian of itself or of all or a
substantial part of its property, (ii) make a general assignment
for the benefit of its creditors, (iii) be dissolved or liquidated,
(iv) commence a voluntary case or other proceeding seeking
liquidation, reorganization or other relief with respect to itself
or its debts under any bankruptcy, insolvency or other similar law
now or hereafter in effect or consent to any such relief or to the
appointment of or taking possession of its property by any official
in an involuntary case or other proceeding commenced against it, or
(v) take any action for the purpose of effecting any of the
foregoing; or
(d) Involuntary Bankruptcy
or Insolvency Proceedings . Proceedings for the appointment of
a receiver, trustee, liquidator or custodian of Borrower or of all
or a substantial part of the property thereof, or an involuntary
case or other proceedings seeking liquidation, reorganization or
other relief with respect to Borrower or the debts thereof under
any bankruptcy, insolvency or other similar law now or hereafter in
effect shall be commenced and an order for relief entered or such
proceeding shall not be dismissed or discharged within sixty (60)
days of commencement.
6.
Rights of Lender upon Default . Upon the
occurrence or existence of any Event of Defa
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