Pacific Ethanol has entered into agreements to raise up to $14.0M in two installments by issuing $6.0M in subordinated convertible Series A notes, together with Series A Warrants and Series B Warrants and, subject to stockholder approval, an additional $8.0M in subordinated convertible Series B notes. The company has also entered into agreements to, among other things, purchase certain outstanding debt currently due in June, retire debt due in June 2016 and prepay a portion of its senior unsecured notes. Both the Tranche A and B notes will mature one year from the issuance of the Tranche A notes and will accrue interest at 5.00% per annum from their respective dates of issuance. Estimated net proceeds of $5.6M from Tranche A notes are expected to be used to (1) purchase approximately $2.6M of June Debt and an aggregate 3% additional ownership interest in the Pacific Ethanol Plants from existing Plant lenders, for a total purchase price of $2.1M; and (2) purchase and retire approximately $3.5M of 2016 Debt from existing Plant lenders at par. The company will also amend the purchased June Debt to extend the debt's maturity date from June 25 to June 30, 2016. Estimated net proceeds of $6.5M from the Tranche B notes are expected to be used to (1) purchase the remaining $4.0M of June Debt from existing Plant lenders at a price to be negotiated; (2) fund $2.0M in reserves at the parent; and (3) repay a portion of the Senior Notes.