<SEC-DOCUMENT>0001019687-13-004830.txt : 20131216
<SEC-HEADER>0001019687-13-004830.hdr.sgml : 20131216
<ACCEPTANCE-DATETIME>20131216090225
ACCESSION NUMBER:		0001019687-13-004830
CONFORMED SUBMISSION TYPE:	8-K
PUBLIC DOCUMENT COUNT:		4
CONFORMED PERIOD OF REPORT:	20131216
ITEM INFORMATION:		Entry into a Material Definitive Agreement
ITEM INFORMATION:		Other Events
ITEM INFORMATION:		Financial Statements and Exhibits
FILED AS OF DATE:		20131216
DATE AS OF CHANGE:		20131216

FILER:

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			Pacific Ethanol, Inc.
		CENTRAL INDEX KEY:			0000778164
		STANDARD INDUSTRIAL CLASSIFICATION:	INDUSTRIAL ORGANIC CHEMICALS [2860]
		IRS NUMBER:				412170618
		STATE OF INCORPORATION:			DE
		FISCAL YEAR END:			1231

	FILING VALUES:
		FORM TYPE:		8-K
		SEC ACT:		1934 Act
		SEC FILE NUMBER:	000-21467
		FILM NUMBER:		131277941

	BUSINESS ADDRESS:	
		STREET 1:		400 CAPITOL MALL, SUITE 2060
		CITY:			SACRAMENTO
		STATE:			CA
		ZIP:			95814
		BUSINESS PHONE:		916-403-2123

	MAIL ADDRESS:	
		STREET 1:		400 CAPITOL MALL, SUITE 2060
		CITY:			SACRAMENTO
		STATE:			CA
		ZIP:			95814

	FORMER COMPANY:	
		FORMER CONFORMED NAME:	ACCESSITY CORP
		DATE OF NAME CHANGE:	20030627

	FORMER COMPANY:	
		FORMER CONFORMED NAME:	DRIVERSSHIELD COM CORP
		DATE OF NAME CHANGE:	20001115

	FORMER COMPANY:	
		FORMER CONFORMED NAME:	FIRST PRIORITY GROUP INC
		DATE OF NAME CHANGE:	19920703
</SEC-HEADER>
<DOCUMENT>
<TYPE>8-K
<SEQUENCE>1
<FILENAME>paceth_8k.htm
<DESCRIPTION>FORM 8-K
<TEXT>
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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>SECURITIES AND EXCHANGE COMMISSION</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>Washington, D.C. 20549</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>FORM 8-K</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>CURRENT REPORT</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>PURSUANT TO SECTION 13 OR 15(d) OF</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>THE SECURITIES EXCHANGE ACT OF 1934</B></P>

<P STYLE="margin-top: 0; margin-bottom: 0">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%">
<tr style="vertical-align: top">
    <TD STYLE="width: 50%; font-size: 10pt; text-align: center"><font style="font-size: 10pt">Date of Report (Date of earliest event reported)</font></td>
    <TD STYLE="width: 50%; border-bottom: Black 1pt solid; font-size: 10pt; text-align: center"><font style="font-size: 10pt"><b>December 16, 2013</b></font></td></tr>
</TABLE>

<P STYLE="margin: 0">&nbsp;</P>

<P STYLE="text-align: center; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt">&nbsp; &nbsp;</P>


<table cellspacing="0" cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
<tr style="vertical-align: top">
    <TD STYLE="width: 100%; border-bottom: Black 1pt solid; font-size: 10pt; text-align: center"><font style="font-size: 10pt"><b>PACIFIC ETHANOL, INC.</b></font></td></tr>
<tr style="vertical-align: top">
    <td style="font-size: 10pt; text-align: center"><font style="font-size: 10pt">(Exact name of registrant as specified in its charter)</font></td></tr>
</table>

<P STYLE="margin-top: 0; margin-bottom: 0">&nbsp;</P>
<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%">
<tr style="vertical-align: top">
    <TD STYLE="width: 32%; border-bottom: Black 1pt solid; font-size: 10pt; text-align: center"><font style="font-size: 10pt"><b>Delaware</b></font></td>
    <TD STYLE="width: 2%; padding-bottom: 1.5pt">&nbsp;</td>
    <TD STYLE="width: 32%; border-bottom: Black 1pt solid; font-size: 10pt; text-align: center"><font style="font-size: 10pt"><b>000-21467</b></font></td>
    <TD STYLE="width: 2%; padding-bottom: 1.5pt">&nbsp;</td>
    <TD STYLE="width: 32%; border-bottom: Black 1pt solid; font-size: 10pt; text-align: center"><font style="font-size: 10pt"><b>41-2170618</b></font></td></tr>
<tr style="vertical-align: top">
    <TD>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">(State or other jurisdiction</P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">of incorporation)</P></td>
    <TD>&nbsp;</td>
    <TD STYLE="font-size: 10pt; text-align: center"><font style="font-size: 10pt">(Commission File Number)</font></td>
    <TD>&nbsp;</td>
    <TD>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">(IRS Employer</P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">Identification No.)</P></td></tr>
<tr style="vertical-align: top">
    <td colspan="5">&nbsp;</td></tr>
</table>
<table cellspacing="0" cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
<tr style="vertical-align: top">
    <TD STYLE="width: 53%; font-size: 10pt; text-align: center; border-bottom: Black 1pt solid"><font style="font-size: 10pt"><b>400 Capitol Mall, Suite 2060, Sacramento, CA</b></font></td>
    <TD STYLE="width: 47%; border-bottom: Black 1pt solid; font-size: 10pt; text-align: center"><font style="font-size: 10pt"><b>95814</b></font></td></tr>
<tr style="vertical-align: top">
    <td style="font-size: 10pt; text-align: center"><font style="font-size: 10pt">(Address of principal executive offices)</font></td>
    <td style="font-size: 10pt; text-align: center"><font style="font-size: 10pt">(Zip Code)</font></td></tr>
</table>

<P STYLE="margin-top: 0; margin-bottom: 0">&nbsp;</P>
<table cellspacing="0" cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
<tr style="vertical-align: bottom">
    <td style="width: 53%; font-size: 10pt"><font style="font-size: 10pt">Registrant&rsquo;s telephone number, including area code:</font></td>
    <TD STYLE="width: 47%; border-bottom: Black 1pt solid; font-size: 10pt; text-align: center"><font style="font-size: 10pt"><b>(916) 403-2123</b></font></td></tr>
<tr style="vertical-align: top">
    <TD COLSPAN="2" STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: center"><P STYLE="margin-top: 0; margin-bottom: 0">&nbsp;</P>
                                                                                <P STYLE="margin-top: 0; margin-bottom: 0">&nbsp;</P></td></tr>
<tr style="vertical-align: top">
    <td colspan="2" style="font-size: 10pt; text-align: center"><font style="font-size: 10pt">(Former name or former address, if changed since last report)</font></td></tr>
</table>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.25in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.25in">Check the appropriate box below if the
Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions
(<I>see </I>General Instruction A.2. below):</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.25in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.25in"><FONT STYLE="font-family: Wingdings">o</FONT>&#9;Written
communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.25in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.25in"><FONT STYLE="font-family: Wingdings">o</FONT>&#9;Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.25in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.25in"><FONT STYLE="font-family: Wingdings">o</FONT>&#9;Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.25in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.25in"><FONT STYLE="font-family: Wingdings">o</FONT>&#9;Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.25in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.25in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.25in"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.25in">&nbsp;</P>







<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><FONT STYLE="font-size: 10pt"><B>Item 1.01.</B></FONT> <FONT STYLE="font-size: 10pt"><B>Entry into a Material Definitive Agreement.</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></P>


<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">On December 16, 2013, Pacific Ethanol, Inc.
(the &ldquo;Company&rdquo;) entered into a letter agreement (the &ldquo;Letter Agreement&rdquo;) with the holders of the Company&rsquo;s
Senior Unsecured Notes dated January 11, 2013 (&ldquo;Senior Notes&rdquo;), pursuant to which the Company agreed to pay to certain
of the holders of the Company&rsquo;s Senior Notes an aggregate of $2,000,000<B> </B>as a prepayment of a portion of the outstanding
principal amount of the Senior Notes through the issuance of an aggregate of 500,000 shares (the &ldquo;Shares&rdquo;) of the Company&rsquo;s
common stock. Under the terms of the Letter Agreement, (i) the holder of the Senior Notes that elected not to receive any prepayment
of the principal amount of the Senior Note held by such holder has consented to the prepayments being made to the other holders
of the Company&rsquo;s Senior Notes and has waived the requirement contained in the Senior Notes that any prepayment must be applied
pro rata to all outstanding Senior Notes, and (ii) the Company agreed to issue to those holders of Senior Notes that elected to
receive a prepayment of a portion of the principal amount of the Senior Notes held by such holders the number of shares of the
Company&rsquo;s common stock equal to the quotient obtained by dividing (a) the prepayment amount allocated to such holder, by
(b) $4.00. The Shares were offered pursuant to an effective registration statement on Form S-3 (Registration No.&nbsp;333-180731,
as supplemented to date, the &ldquo;Registration Statement&rdquo;).</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">The forgoing description is intended to
provide a summary of the material terms of the Letter Agreement. This summary is qualified in its entirety by reference to the
Letter Agreement which is filed as Exhibit 10.1 to this Current Report on Form 8-K.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><FONT STYLE="font-size: 10pt"><B>Item 8.01.</B></FONT> <FONT STYLE="font-size: 10pt"><B>Other Events.</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></P>


<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">In connection with the offering discussed
in Item 1.01, the legal opinion letter of Troutman Sanders LLP, counsel to the Company, regarding the validity of the Shares is
filed as Exhibit&nbsp;5.1 to this Current Report on Form&nbsp;8-K.&nbsp; The legal opinion letter is also filed with reference
to, and is hereby incorporated by reference into, the Registration Statement.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><FONT STYLE="font-size: 10pt"><B>Item 9.01.</B></FONT> <FONT STYLE="font-size: 10pt"><B>Financial Statements and Exhibits.</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><FONT STYLE="font-size: 10pt"><B>&nbsp;</B></FONT></P>


<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in">(a)</TD><TD><U>Financial statements of businesses acquired</U>.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in">Not applicable.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in">(b)</TD><TD><U>Pro forma financial information</U>.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in">Not applicable.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in">(c)</TD><TD><U>Shell company transactions</U>.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in">Not applicable.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in">(d)</TD><TD><U>Exhibits</U>.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0pt"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0pt"></TD><TD STYLE="width: 66pt; text-align: left"><FONT STYLE="font-size: 10pt"><U>Number</U></FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt"><U>Description</U></FONT></TD>
</TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0pt"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0pt"></TD><TD STYLE="width: 66pt; text-align: left">5.1</TD><TD STYLE="text-align: justify">Opinion of Troutman Sanders LLP (*)</TD>
</TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0pt"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0pt"></TD><TD STYLE="width: 66pt; text-align: left">10.1</TD><TD STYLE="text-align: justify">Letter Agreement, dated December 16, 2013, by and among
the Company and the holders of the Company&rsquo;s Senior Unsecured Notes dated January 11, 2013 (*)(**)</TD>
</TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt">__________________</P>

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<TD STYLE="width: 0pt"></TD><TD STYLE="width: 22pt; text-align: left">(*)</TD><TD STYLE="text-align: justify">Filed herewith.</TD>
</TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0pt"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0pt"></TD><TD STYLE="width: 22pt; text-align: left">(**)</TD><TD STYLE="text-align: justify">The agreement filed as an exhibit to this report contains
representations and warranties made by the parties thereto. The assertions embodied in such representations and warranties are
not necessarily assertions of fact, but a mechanism for the parties to allocate risk.&nbsp;&nbsp;Accordingly, investors should
not rely on the representations and warranties as characterizations of the actual state of facts or for any other purpose at the
time they were made or otherwise.</TD>
</TR></TABLE>



<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>SIGNATURES</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">Pursuant to the requirements of the Securities
Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<table cellspacing="0" cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
<tr style="vertical-align: top">
    <td style="width: 50%; padding-top: 12pt; font-size: 10pt"><font style="font-size: 10pt">Date:&nbsp;&nbsp;December 16, 2013</font></td>
    <td style="width: 50%; padding-top: 12pt; font-size: 10pt"><font style="font-size: 10pt">PACIFIC ETHANOL, INC.</font></td></tr>
<tr style="vertical-align: top">
    <td style="font-size: 10pt">&nbsp;</td>
    <td style="font-size: 10pt">&nbsp;</td></tr>
<tr style="vertical-align: top">
    <td style="font-size: 10pt">&nbsp;</td>
    <td style="font-size: 10pt"><font style="font-size: 10pt">By: <u>/S/ CHRISTOPHER W. WRIGHT&#9;</u></font></td></tr>
<tr style="vertical-align: top">
    <td style="font-size: 10pt">&nbsp;</td>
    <td style="font-size: 10pt"><font style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Christopher W. Wright</font></td></tr>
<tr style="vertical-align: top">
    <td style="font-size: 10pt">&nbsp;</td>
    <td style="font-size: 10pt"><font style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Vice President, General Counsel &amp; Secretary</font></td></tr>
</table>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>EXHIBITS FILED WITH THIS REPORT</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"></P>

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<TD STYLE="width: 0pt"></TD><TD STYLE="width: 66pt; text-align: left"><FONT STYLE="font-size: 10pt"><U>Number</U></FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt"><U>Description</U></FONT></TD>
</TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0pt"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0pt"></TD><TD STYLE="width: 66pt; text-align: left">5.1</TD><TD STYLE="text-align: justify">Opinion of Troutman Sanders LLP (*)</TD>
</TR></TABLE>

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<TD STYLE="width: 0pt"></TD><TD STYLE="width: 66pt; text-align: left">10.1</TD><TD STYLE="text-align: justify">Letter Agreement, dated December 16, 2013, by and among
the Company and the holders of the Company&rsquo;s Senior Unsecured Notes dated January 11, 2013 (*)(**)</TD>
</TR></TABLE>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt">&nbsp;</P>

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<DOCUMENT>
<TYPE>EX-5.1
<SEQUENCE>2
<FILENAME>paceth_8k-ex0501.htm
<DESCRIPTION>OPINION
<TEXT>
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<P STYLE="margin: 0">Exhibit 5.1</P>

<P STYLE="margin: 0">&nbsp;</P>

<P STYLE="margin: 0"></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; font: 10pt Times New Roman, Times, Serif; width: 100%">
<TR STYLE="vertical-align: top; text-align: left">
    <TD STYLE="width: 33%">&nbsp;</TD>
    <TD STYLE="width: 34%; text-align: center">&nbsp;<IMG SRC="troutman_logo.jpg" ALT=""></TD>
    <TD STYLE="width: 33%; text-align: right"><FONT STYLE="font-size: 8pt">TROUTMAN SANDERS LLP<BR>
    Attorneys at Law<BR>
    5 Park Plaza, Suite 1400<BR>
    Irvine, CA 92614-2545<BR>
    949.622.2700 telephone<BR>
    troutmansanders.com</FONT></TD></TR>
</TABLE>

<P STYLE="margin: 0">&nbsp;</P>

<P STYLE="margin: 0">&nbsp;</P>

<P STYLE="margin: 0"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">December 16, 2013</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Pacific Ethanol, Inc.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">400 Capital Mall, Suite 2060</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Sacramento, California 95814</P>

<table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
<tr>
    <td></td></tr>
</table>
<P STYLE="margin: 0pt 0">&nbsp;</P>

<P STYLE="margin: 0pt 0">Re:&#9;<U>Registration Statement on Form S-3</U></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Ladies and Gentlemen:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">We have acted as counsel to Pacific Ethanol,
Inc., a Delaware corporation (the &ldquo;Company&rdquo;), in connection with the proposed offer and sale by the Company of 500,000
shares (the &ldquo;Shares&rdquo;) of the Company&rsquo;s common stock, par value $0.001 per share (the &ldquo;Common Stock&rdquo;),
pursuant to a letter agreement dated December 16, 2013 among the Company and the holders of the Company&rsquo;s Senior Unsecured
Notes dated January 11, 2013 (the &ldquo;Letter Agreement&rdquo;) as described in the Company&rsquo;s Registration Statement on
Form S-3 (File No. 333-180731) filed with the Securities and Exchange Commission (the &ldquo;Commission&rdquo;) under the Securities
Act of 1933, as amended (the &ldquo;Securities Act&rdquo;) (as amended and supplemented through and including the date hereof,
including by the prospectus supplement (the &ldquo;Prospectus&rdquo;) dated December 16, 2013 (the &ldquo;Registration Statement&rdquo;)).</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">This opinion letter is being furnished in
connection with the requirements of Item 601(b)(5) of Regulation S-K under the Securities Act, and no opinion is expressed herein
as to any matter pertaining to the contents of the Registration Statement, other than as expressly stated herein with respect to
the issuance of the Shares.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">As such counsel and for purposes of our
opinions set forth herein, we have examined and relied upon the original or copies, certified or otherwise identified to our satisfaction,
of such documents, resolutions, certificates and instruments of the Company, and have reviewed certificates of public officials,
statutes, records and such other instruments and documents and have made such investigations of law as we have considered necessary
or appropriate as a basis for the opinions set forth in this opinion letter. In such examination, we have assumed (i) the genuineness
of all signatures on all agreements, instruments and other documents submitted to us; (ii) the legal capacity and authority of
all persons or entities executing all agreements, instruments and other documents submitted to us; (iii) the authenticity and completeness
of all agreements, instruments, corporate records, certificates and other documents submitted to us as originals; (iv) that all
agreements, instruments, corporate records, certificates and other documents submitted to us as certified, electronic, facsimile,
conformed, photostatic or other copies conform to authentic originals thereof, and that such originals are authentic and complete;
(v) the due authorization, execution and delivery of all agreements, instruments and other documents by all parties thereto; (vi)
that no documents submitted to us have been amended or terminated orally or in writing except as has been disclosed to us; (vii)
that the statements contained in the certificates and comparable documents of public officials, officers and representatives of
the Company and other persons on which we have relied for the purposes of this opinion letter are true and correct; and (viii)
that each of the officers and directors of the Company has properly exercised his or her fiduciary duties. As to all questions
of fact material to this opinion letter and as to the materiality of any fact or other matter referred to herein, we have relied
(without independent investigation) upon certificates or comparable documents of officers and representatives of the Company. In
addition, with your consent, we have assumed that all choice of law provisions are legally enforceable.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">Subject to the foregoing and the other matters
set forth herein, it is our opinion that, as of the date hereof, the Shares have been duly authorized by the Company and, when
and to the extent issued and sold in accordance with the terms of, and in the manner contemplated by, the Letter Agreement, including
payment in full to the Company of all consideration required therefor, and as described in the Registration Statement, the Shares
will be validly issued, fully paid and non-assessable.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">Our opinions are subject to (i) the effect
of any bankruptcy, insolvency, reorganization, moratorium or similar laws and principles affecting creditors&rsquo; rights generally
(including, without limitation, fraudulent transfer or fraudulent conveyance laws); and (ii) the effect of general principles of
equity (including, without limitation, concepts of materiality, reasonableness, good faith and fair dealing) and the availability
of equitable remedies (including, without limitation, specific performance and equitable relief), regardless of whether considered
in a proceeding in equity or at law.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">We express no opinion with regard to the
applicability or effect of the law of any jurisdiction other than the General Corporation Law of the State of Delaware as in effect
on the date hereof.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">This opinion letter is prepared for your
use in connection with the Registration Statement and may be relied upon by you and by persons entitled to rely upon it pursuant
to the applicable provisions of the Securities Act solely for such purpose. We hereby consent to the filing of this opinion as
an exhibit to the Company&rsquo;s Current Report on Form 8-K dated December 16, 2013, the incorporation of this opinion by reference
in the Registration Statement and to the use of our name under the caption &ldquo;Legal Matters&rdquo; in the Prospectus and Registration
Statement.&nbsp; In giving this consent, we do not hereby admit that we come within the category of persons whose consent is required
under Section&nbsp;7 of the Securities Act, or the rules or regulations of the Commission promulgated thereunder.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 3.25in">Very truly yours,</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 3.25in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 3.25in">/s/ Troutman Sanders LLP</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

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<DOCUMENT>
<TYPE>EX-10.1
<SEQUENCE>3
<FILENAME>paceth_8k-ex1001.htm
<DESCRIPTION>LETTER AGREEMEN
<TEXT>
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<P STYLE="margin: 0">Exhibit 10.1</P>

<P STYLE="margin: 0">&nbsp;</P>

<P STYLE="margin: 0"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>Pacific Ethanol, Inc.</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>400 Capitol Mall, Suite 2060</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>Sacramento, CA 95814</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">December 16, 2013</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Holders of the Company&rsquo;s<BR>
Senior Unsecured Notes</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Dated January 11, 2013</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Identified on <U>Schedule 1</U> hereto</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.5in">Re:</TD><TD STYLE="text-align: justify"><U>Payments in Kind</U></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Gentlemen:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in">This letter agreement
(the <B>&ldquo;Letter Agreement&rdquo;</B>) is entered into as of December 16, 2013 among the undersigned holders (collectively,
the <B>&ldquo;Holders&rdquo;</B>) of Senior Unsecured Notes dated January 11, 2013 (the <B>&ldquo;Notes&rdquo;</B>), and Pacific
Ethanol, Inc. (the <B>&ldquo;Company&rdquo;</B>). Capitalized terms not otherwise defined herein shall have the meanings given
them in the Notes.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in">The Company intends to
make a prepayment to Candlewood Special Situations Master Fund, Ltd. (&ldquo;CSSM&rdquo;) and CWD OC 522 Master Fund Ltd. (&ldquo;CWD
OC 522&rdquo;) in the aggregate amount of $2,000,000, and CSSM and CWD OC 522 (together, the &ldquo;Funds&rdquo;) desire to receive
such prepayment in kind, in the form of shares of the Company&rsquo;s common stock (the <B>&ldquo;Common Stock&rdquo;</B>), all
with the consent of all Holders as provided below.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in">In consideration of the
mutual covenants herein contained, and for other valuable consideration the receipt and sufficiency of which is hereby acknowledged,
the parties hereby agree as follows:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in">1.<FONT STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT><B><U>Prepayment of Notes; Delivery of Shares</U></B>. The Company shall pay to each Fund the sum set opposite such Fund&rsquo;s
name on the signature page hereto (the <B>&ldquo;Payments&rdquo;</B>) by issuing and delivering to such Fund the number of shares
(collectively, the <B>&ldquo;Shares&rdquo;</B>) of the Company&rsquo;s Common Stock equal to the quotient obtained by dividing
(a) such Fund&rsquo;s Payment, by (b) $4.00. The Payments shall be applied to the outstanding principal balance of the Notes. The
offering and issuance of the Shares (the &ldquo;<B>Offering</B>&rdquo;) are being made pursuant to (a) an effective Registration
Statement on Form S-3 (File No. 333-180731) (including the prospectus contained therein), filed by the Company with the Securities
and Exchange Commission (the &ldquo;<B>Commission</B>&rdquo;), and (b) a prospectus supplement containing certain supplemental
information regarding the terms of the Offering of the Shares, that will be filed with the Commission on the date hereof and delivered
to each Holder (or may available to each Holder by the filing by the Company of an electronic version thereof with the Commission).
On the day that is the third Trading Day after the date hereof, the Company shall deliver to each Holder that number of Shares
set forth opposite such Holder&rsquo;s name on the signature page hereto through the facilities of the Depository Trust Company&rsquo;s
DWAC system. For purposes hereof, the term &ldquo;<B>Trading Day</B>&rdquo; shall mean any day on which the Common Stock is traded
on the principal securities exchange or securities market on which the Common Stock is then traded.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in">2.<FONT STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT><B><U>Consent to Non-Pro Rata Prepayment</U></B>. The Holders each hereby consent to the Payments to the Funds and waive
the requirements of Section 1.2 of the Notes which provides that &ldquo;any [prepayment] shall be applied pro rata to the Note
and the Other Notes in accordance with the respective Principal amounts thereof.&rdquo; Notwithstanding any provision of the Notes
to the contrary, the Holders agree that the consummation of the transactions contemplated hereby shall be deemed to conform to
the requirements of the Notes in all respects. The consent and waiver in this Letter Agreement is strictly limited to the one prepayment
contemplated by this Letter Agreement, and nothing in this Letter Agreement shall be (i) deemed to constitute a waiver of compliance
by the Company with respect to any other term, provision or condition of the Notes, or (ii) prejudice any right or remedy that
any Holder may have under or in connection with the Notes.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">3.<FONT STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT><B><U>Effect of Letter Agreement</U></B>. The Payments do not constitute a payment in full of the Notes. Except as expressly
set forth in this Letter Agreement, all of the terms and provisions of the Notes shall remain in full force and effect.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in">4.<FONT STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT><B><U>Entire Agreement</U></B>. This Letter Agreement constitutes the entire agreement between the parties with respect
to the subject matter hereof and supersedes any prior understandings, agreements or representations by or between the parties,
written or oral, to the extent they relate in any way to the subject matter hereof.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in">5.<FONT STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT><B><U>Amendments</U></B>. This Letter Agreement may not be amended or modified, and no provisions hereof may be waived,
without the written consent of the Company and all of the Holders.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in">6.<FONT STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT><B><U>Governing Law</U></B>. This Letter Agreement shall be construed and enforced in accordance with, and all questions
concerning the construction, validity, interpretation and performance of this Note shall be governed by, the internal laws of the
State of New York, without giving effect to any choice of law or conflict of law provision or rule (whether of the State of New
York or any other jurisdictions) that would cause the application of the laws of any jurisdictions other than the State of New
York.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in">7.<FONT STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT><B><U>Counterparts</U></B>. This Letter Agreement may be executed, including by facsimile signature, in one or more counterparts,
each of which shall be deemed an original but all of which together will constitute one and the same instrument.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; text-indent: 0in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; text-indent: 0in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; text-indent: 0in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; text-indent: 0in"><I>[Signatures Follow.]</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; text-indent: 0in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; text-indent: 0in"></P>

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    <DIV STYLE="page-break-before: always; margin-top: 6pt; margin-bottom: 12pt"><TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif"><TR><TD STYLE="text-align: center; width: 100%">&nbsp;</TD></TR></TABLE></DIV>
    <!-- Field: /Page -->

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; text-indent: 0in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">In witness whereof,
the parties have executed this Letter Agreement as of the first date set forth above.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 3in"><B>PACIFIC ETHANOL, INC.</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 3in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 3in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 3in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 3in">By:<U> /s/ Neil M. Koehler&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 22pt; text-indent: 3in">Neil M. Koehler, Chief Executive Officer</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD COLSPAN="2" STYLE="padding-right: 5.4pt; padding-left: 5.4pt"><B>HOLDERS:</B></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt"></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt"><B>PAYMENT AMOUNT:</B></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; width: 9%">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; width: 41%">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; width: 10%">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; width: 40%">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD COLSPAN="2" STYLE="padding-right: 5.4pt; padding-bottom: 12pt; padding-left: 5.4pt"><B>CWD OC 522 MASTER FUND LTD.</B></TD>
    <TD STYLE="padding-right: 5.4pt; padding-bottom: 12pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-bottom: 12pt; padding-left: 5.4pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD COLSPAN="2" STYLE="padding-right: 5.4pt; padding-left: 5.4pt">By: Candlewood Investment Group,</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD COLSPAN="2" STYLE="padding-right: 5.4pt; padding-bottom: 12pt; padding-left: 5.4pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;as investment manager</TD>
    <TD STYLE="padding-right: 5.4pt; padding-bottom: 12pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-bottom: 12pt; padding-left: 5.4pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt">By:</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; border-bottom: Black 1pt solid">/s/ David Koenig</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt">$&nbsp;&nbsp;664,523</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt">Name: </TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt">David Koenig</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt">Title: </TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt">Authorized Signatory</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: 5.4pt; padding-bottom: 12pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-bottom: 12pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-bottom: 12pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-bottom: 12pt; padding-left: 5.4pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD COLSPAN="2" STYLE="padding-right: 5.4pt; padding-bottom: 12pt; padding-left: 5.4pt"><B>CANDLEWOOD SPECIAL SITUATIONS MASTER FUND, LTD.</B></TD>
    <TD STYLE="padding-right: 5.4pt; padding-bottom: 12pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-bottom: 12pt; padding-left: 5.4pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD COLSPAN="2" STYLE="padding-right: 5.4pt; padding-left: 5.4pt">By: Candlewood Investment Group,</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD COLSPAN="2" STYLE="padding-right: 5.4pt; padding-bottom: 12pt; padding-left: 5.4pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;as investment manager</TD>
    <TD STYLE="padding-right: 5.4pt; padding-bottom: 12pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-bottom: 12pt; padding-left: 5.4pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt">By:</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; border-bottom: Black 1pt solid">/s/ David Koenig</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt">$1,335,477</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt">Name: </TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt">David Koenig</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt">Title: </TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt">Authorized Signatory</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: 5.4pt; padding-bottom: 12pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-bottom: 12pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-bottom: 12pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-bottom: 12pt; padding-left: 5.4pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD COLSPAN="2" STYLE="padding-right: 5.4pt; padding-bottom: 12pt; padding-left: 5.4pt"><FONT STYLE="text-transform: uppercase"><B>Credit Suisse Loan Funding LLC</B></FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-bottom: 12pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-bottom: 12pt; padding-left: 5.4pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt">By:</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; border-bottom: Black 1pt solid">/s/ Robert Healey</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt">Name: </TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt">Robert Healey</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt">Title: </TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt">Authorized Signatory</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt">By</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; border-bottom: Black 1pt solid">/s/ Michael Wotanowski</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt">Name: </TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt">Michael Wotanowski</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt">Title:</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt">Authorized Signatory</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD></TR>
</TABLE>


<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="font-variant: small-caps"><B><U>Schedule
1</U></B></FONT></P>



<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><U>Holders of Notes</U></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">CWD OC 522 Master Fund Ltd.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">c/o Candlewood Investment Group</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">777 Third Ave, Suite 19B, NY NY 10017</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Attention: Peter Dowling</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Candlewood Special Situations Master Fund, Ltd.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">c/o Candlewood Investment Group</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">777 Third Ave, Suite 19B, NY NY 10017</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Attention: Peter Dowling</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Credit Suisse Loan Funding LLC</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Eleven Madison Avenue, 5th Floor</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Attn: Jonothan Satran</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">New York, NY 10010-3629</P>



<P STYLE="margin: 0">&nbsp;</P>

<P STYLE="margin: 0">&nbsp;</P>

<P STYLE="margin: 0"></P>

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`
end
</TEXT>
</DOCUMENT>
</SEC-DOCUMENT>
