Exhibit 10.8


 


Execution Version


 


ALL LIENS AND SECURITY INTERESTS EVIDENCED
BY THIS AGREEMENT SHALL AT ALL TIMES BE SUBORDINATE AND JUNIOR TO THE LIENS AND SECURITY INTERESTS GRANTED TO
CoBank, ACB, a federally-chartered instrumentality of the United States, PURSUANT TO that certain Security Agreement dated as of
March 20, 2019 (AS AMENDED FROM TIME TO TIME) MADE BY gRANTORS (dEFINED BELOW) IN FAVOR OF SENIOR AGENT (DEFINED BELOW) AND
SUBJECT TO THE TERMS OF THAT CERTAIN INTERCREDITOR AGREEMENT EVEN DATED HEREWITH (AS AMENDED
FROM TIME TO TIME) BY AND AMONG SENIOR AGENT, GRANTORS, AGENT (DEFINED BELOW), AND THE OTHER PARTIES PARTY THERETO.


 


PLEDGE AGREEMENT


 


THIS PLEDGE AGREEMENT
(as amended, supplemented or otherwise modified from time to time in accordance with the provisions hereof, this “Agreement”)
is made on March 20, 2020 by and among PACIFIC ETHANOL CENTRAL, LLC, a limited liability company organized under the laws of Delaware
(“Pledgor”), PACIFIC AURORA, LLC, a limited liability company organized under the laws of Delaware (“Aurora”),
and CORTLAND PRODUCTS CORP., as collateral agent for the benefit of the Noteholders (in such capacity, together with its successors
and assigns in such capacity, the “Agent”; together with the Noteholders, the “Secured Parties”).


 


RECITALS:


 


WHEREAS, Pacific Ethanol,
Inc., a Delaware corporation (“PEI”), issued certain secured promissory notes in the aggregate original principal
amount of $55,000,000 on December 15, 2016 (the “Initial Notes”) pursuant to a Note Purchase Agreement dated
as of December 12, 2016 by and among PEI and the Investors identified therein (as amended, restated, supplemented or otherwise
modified from time to time, including amendments and restatements thereof in its entirety, the “Initial Purchase Agreement”);


 


WHEREAS, PEI and certain
Investors identified therein are parties to a Note Purchase Agreement dated as of June 26, 2017 (as amended, restated, supplemented
or otherwise modified from time to time, including amendments and restatements thereof in its entirety, the “Additional
Purchase Agreement”), pursuant to which PEI issued $13,948,078 in aggregate original principal amount of senior secured
notes due December 15, 2019 (as amended, restated, supplemented or otherwise modified from time to time, the “Additional
Notes”).


 


WHEREAS, the Noteholders
are holders of the Initial Notes, the Additional Notes and certain other secured promissory notes issued by PEI on December 16,
2019 (the “Existing Notes”);


 


WHEREAS, pursuant to
that certain Senior Secured Note Amendment Agreement dated as of December 22, 2019 between the Noteholders defined therein and
PEI (as amended, restated, supplemented or otherwise modified from time to time, including amendments and restatements thereof
in its entirety, the “Amendment Agreement”), the Existing Notes were amended and restated in their entirety
(the “Amended Notes,” and together with the Amendment Agreement and the Transaction Documents (as defined in
the Initial Noteholder Security Agreement (as defined below)), the “Notes Amendment Documents”);


 




     


     


    

  


WHEREAS, Cortland Products
Corp. has been appointed by the Noteholders to act as collateral agent under the Notes Amendment Documents (and as successor to
Cortland Capital Market Services LLC in such capacity) pursuant to the Initial Noteholder Security Agreement;


 


WHEREAS, Pledgor,
Aurora and CoBank, ACB, a federally-chartered instrumentality of the United States (“Senior Agent”), are party
to that certain Pledge Agreement dated as of March 20, 2019 (“Senior Agent Pledge Agreement”), wherein Pledgor
granted to Senior Agent a senior security interest in the Pledged Collateral, securing the payment and performance when due of
the Secured Obligations (as defined in the Senior Agent Pledge Agreement);


 


WHEREAS, the Lien
granted herein shall be junior in priority to the Lien granted to Senior Agent, as set forth in that certain Intercreditor Agreement
dated as of the date hereof (as amended, restated, supplemented or otherwise modified from time to time, “Intercreditor
Agreement”) by and among Senior Agent, Agent, PEI and the Grantors party thereto; and


 


WHEREAS, to secure
the obligations of PEI under the Notes Amendment Documents, pursuant to the Notes Amendment Documents, the Pledgor is required
to enter into this Agreement.


 


1. Definitions.
Each capitalized term used herein, unless otherwise defined herein, shall have the meaning ascribed to such term in the Amendment
Agreement or the Initial Noteholder Security Agreement, as applicable. As used herein, the following terms shall have the following
meanings:


 


“Companies”
shall mean each of the entities identified as an “Issuer” on Annex A hereto, and each such entity individually
is referred to herein as a “Company”.


 


“Equity
Interests” shall mean all shares of capital stock (whether denominated as common stock or preferred stock), equity interests,
beneficial partnership or membership interests, joint venture interests, units, limited liability company interests, participations
or other ownership or profit interests in or equivalents (regardless of how designated) of or in a Person (other than an individual),
whether voting or non-voting.


 


“Existing
Notes” has the meaning set forth in the Recitals.


 


“Initial
Noteholder Security Agreement” means that certain Security Agreement, dated as of December 15, 2016, by and among the
Company, the Noteholders party thereto, and the Agent, as amended by that certain First Amendment to Security Agreement, dated
June 30, 2017, by and among the Company, the Noteholders party thereto, and the Agent, that certain Second Amendment to Security
Agreement, dated December 22, 2019, by and among the Company, the Noteholders party thereto, and the Agent, and that certain Third
Amendment to Security Agreement, dated as of the date hereof, by and among the Company, the Noteholders party thereto, and the
Agent, as the same may be further amended, restated, supplemented or otherwise modified from time to time.


 




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“Noteholders”
means (x) each Person that is (i) a signatory to the Amendment Agreement and identified as a “Noteholder” on Exhibit
A to the Amendment Agreement, (ii) a holder of any of the Notes (as defined in the Amendment Agreement), and (iii) a “Secured
Party” party to the Initial Noteholder Security Agreement and (y) any other Person that becomes (i) a holder of any of the
Notes pursuant to any permitted assignment or transfer and (ii) a “Secured Party” under the Initial Noteholder Security
Agreement pursuant to a Security Agreement Joinder, other than any such Person that ceases to be a party to such agreement pursuant
to an assignment of all of its Notes and its rights and obligations under the Transaction Documents (as defined in the Initial
Security Agreement).


 


“Operating
Agreement” means that certain Amended and Restated Limited Liability Company Agreement of Pacific Aurora, LLC, dated
December __, 2016 (the “Operating Agreement”) by and among Pledgor and Aurora Cooperative Elevator Company, a Nebraska
cooperative corporation.


 


“Pledged
Collateral” shall have the meaning ascribed to it in Section 2 hereof.


 


“Power”
shall have the meaning ascribed to it in Section 2 hereof.


 


“Secured
Obligations” shall mean all obligations of PEI to the Noteholders now or hereafter existing under the Notes Amendment
Documents.


 


2. Pledge; Agent’s
Duties; Intercreditor Agreement.


 


(a) Pledgor hereby pledges,
assigns, transfers, sets over and delivers to Agent, and hereby grants to Agent, for the benefit of the Secured Parties, a security
interest in, all of the Equity Interests of the Companies now or hereafter held by Pledgor, including the Equity Interests more
particularly described on Annex A hereto and all of Pledgor’s options, if any, for the purchase of any Equity Interests
of any of the Companies, herewith delivered to Agent, and where certificated, accompanied by powers (“Powers”)
duly executed in blank, and all proceeds thereof including, without limitation, all proceeds from the sale of any such Equity Interests
and all dividends and distributions at any time payable in connection such Equity Interests (said Equity Interests, Powers, options,
and proceeds hereinafter collectively called the “Pledged Collateral”) as security for the due and punctual
payment and performance of the Secured Obligations.


 


(b) Agent shall have
no duty with respect to any part or all of the Pledged Collateral of any nature or kind other than the duty to use reasonable care
in the safe custody of any tangible items of the Pledged Collateral in its possession (it being agreed that Agent shall be deemed
to have exercised reasonable care in the custody and preservation of the Pledged Collateral in its possession if the Pledged Collateral
is accorded treatment substantially equal to that which it accords its own property). Without limiting the generality of the foregoing,
Agent shall be under no obligation to sell any of the Pledged Collateral or otherwise to take any steps necessary to preserve the
value of any of the Pledged Collateral or to preserve rights in the Pledged Collateral against any other Persons, but may do so
at its option upon an Event of Default, and all expenses incurred in connection therewith shall be for the sole account of Pledgor.


 




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(c) For the avoidance
of doubt, all obligations of Pledgor, and all rights of Agent, hereunder shall be subject to the obligations of the Pledgor and
the subordinated rights of Agent under the Intercreditor Agreement.


 


3. Voting Rights.
During the term of this Agreement, and so long as no Event of Default shall have occurred, Pledgor shall have the right to vote
all or any portion of the Equity Interests owned by such Pledgor on all corporate and other company questions for all purposes
not inconsistent with the terms of this Agreement or any of the other Notes Amendment Documents. To that end, if Agent transfers
all or any portion of the Pledged Collateral into its name or the name of its nominee, to the extent authorized to do so under
this Agreement or any of the other Notes Amendment Documents, Agent shall, upon the request of a Pledgor, unless an Event of Default
shall have occurred, execute and deliver or cause to be executed and delivered to Pledgor, proxies with respect to the applicable
portion of the Pledged Collateral. Pledgor hereby grants to Agent, effective upon or after the occurrence of an Event of Default
and pursuant to the terms of the Intercreditor Agreement, an IRREVOCABLE PROXY pursuant to which Agent shall be entitled
(but shall not be obligated) to exercise all voting powers pertaining to the Pledged Collateral, including to call and attend all
meetings of the shareholders, members or partners of the Companies to be held from time to time with full power to act and vote
in the name, place and stead of Pledgor (whether or not the Equity Interests shall have been transferred into its name or the name
of its nominee or nominees), give all consents, waivers and ratifications in respect of the Pledged Collateral and otherwise act
with respect thereto as though it were the outright owner thereof, and any and all proxies theretofore executed by Pledgor shall
terminate and thereafter be null and void and of no effect whatsoever.


 


4. Collection
of Dividend Payments. During the term of this Agreement, and so long as there no Event of Default shall exist, Pledgor
shall have the right to receive and retain any and all dividends and other distributions payable by any Company to Pledgor on account
of any of the Pledged Collateral except as otherwise provided in the Notes Amendment Documents. Upon or after the occurrence of
any Event of Default and pursuant to the terms of the Intercreditor Agreement, all dividends and other distributions payable by
any Company on account of any of the Pledged Collateral shall be paid to Agent and any such sum received by Pledgor shall be deemed
to be held by Pledgor in trust for the benefit of Agent and the other Secured Parties and shall be forthwith turned over to Agent
for application by Agent to the Secured Obligations in the manner authorized by the Notes Amendment Documents.


 




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5. Representations
and Warranties of Pledgor. Pledgor hereby represents and warrants to Agent and the other Secured Parties as follows (which
representations and warranties shall be deemed continuing): (a) Pledgor is the legal and beneficial owner of the Pledged Collateral
identified on Annex A; (b) all of the Equity Interests have been duly and validly issued, are fully paid and nonassessable,
and are owned by Pledgor free of any Liens except for Agent’s security interest hereunder and the Permitted Liens; (c) the
Pledged Collateral constitutes the percentage of the issued and outstanding Equity Interests of each of the Companies identified
on Annex A hereto; (d) except as provided in Article 3 of the Operating Agreement, there are no contractual or charter restrictions
upon the voting rights or upon the transfer of any of the Pledged Collateral; (e) except as required under the Intercreditor Agreement,
Pledgor has the right to vote, pledge and grant a security interest in or otherwise transfer the Pledged Collateral without the
consent of any other Person and free of any Liens and applicable restrictions imposed by any governmental authority, and without
any restriction under the organizational documents of Pledgor or any Company or any agreement among Pledgor’s or any Company’s
shareholders, partners or members; (f) this Agreement has been duly authorized, executed and delivered by Pledgor and constitutes
a legal, valid and binding obligation of Pledgor, enforceable in accordance with its terms except to the extent that the enforceability
thereof may be limited by bankruptcy, insolvency or other similar laws of general application affecting the enforcement of creditors’
rights; (g) the execution, delivery and performance by Pledgor of this Agreement and the exercise by Agent of its rights and remedies
hereunder do not and will not result in the violation of any of the organizational documents of Pledgor, any agreement, indenture,
instrument or law by which Pledgor or any Company is bound or to which Pledgor or any Company is subject (except that Pledgor makes
no representation or warranty with respect to Agent’s prospective compliance with any federal or state laws or regulations
governing the sale or exchange of securities); (h) no consent, filing, approval, registration or recording is required (1) for
the pledge by Pledgor of its respective portion of the Pledged Collateral pursuant to this Agreement or (2) except for the filing
of an appropriate UCC financing statement, to perfect the Lien created by this Agreement (to the extent that a Lien created by
this Agreement can be perfected by filing a financing statement); (i) none of the Pledged Collateral is held or maintained in the
form of a securities entitlement or credited to any securities account; and (j) if the Pledged Collateral is certificated, Pledgor
shall cause such certificates or other documents evidencing or representing such Pledged Collateral, accompanied by Powers, all
in form and substance satisfactory to Agent and Required Holders to be delivered to Agent.


 


6. Affirmative
Covenants of Pledgor. Until all of the Secured Obligations are paid in full, Pledgor covenants that it will: (a) warrant
and defend at its own expense Agent’s right, title and security interest in and to the Pledged Collateral against the claims
of any Person; (b) promptly deliver to Agent all written notices with respect to the Pledged Collateral, and promptly give written
notice to Agent of any other notices received by Pledgor with respect to the Pledged Collateral; (c) promptly deliver to Agent
to hold under this Agreement any Equity Interests of any Company subsequently acquired by Pledgor, whether acquired by Pledgor
by virtue of the exercise of any options included within the Pledged Collateral or otherwise (which Equity Interests, whether or
not delivered, shall be deemed to be a part of the Pledged Collateral); (d) if any of the Pledged Collateral constituting membership
interests in a limited liability company or general or limited partnership interests in a limited partnership or limited liability
partnership is hereafter designated by the relevant Company as a “security” under (and as defined in) Article 8 of
the UCC, cause such Pledged Collateral to be certificated and deliver to Agent all certificates evidencing such Pledged Collateral,
accompanied by Powers, all in form and substance satisfactory to Agent and Required Holders; and (e) if at any time hereafter any
of the Pledged Collateral that is not currently certificated becomes certificated, deliver all certificates or other documents
evidencing or representing the Pledged Collateral to Agent, accompanied by Powers, all in form and substance satisfactory to Agent
and Required Holders.


 




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7. Negative Covenants
of Pledgor. Until the Secured Obligations are paid in full, Pledgor covenants that it will not, without the prior written
consent of Agent and Required Holders, (a) sell, convey or otherwise dispose of any of the Pledged Collateral or any interest therein
other than as permitted under the Notes Amendment Documents; (b) grant or permit to exist any Lien whatsoever upon or with respect
to any of the Pledged Collateral or the proceeds thereof, other than the security interest created hereby; (c) consent to the issuance
by any Company of any new Equity Interests; (d) consent to any merger or other consolidation of any Company with or into any corporation
or other entity other than as permitted under the Notes Amendment Documents; (e) cause any Pledged Collateral to be held or maintained
in the form of a security entitlement or credited to any securities account; (f) designate, or cause any Company to designate,
any of the Pledged Collateral constituting membership interests in a limited liability company or general or limited partnership
interests in a limited partnership or limited liability partnership as a “security” under Article 8 of the UCC, unless
such Company has caused such Pledged Collateral to become certificated and has complied with the requirements of Section 6(e)
hereof with respect to such Pledged Collateral; (g) evidence, or permit any Company to evidence, any of the Pledged Collateral
that is not currently certificated, with any certificates, instruments or other writings, unless such Company has complied with
the provisions of Section 6(e) of this Agreement; or (h) consent to or permit any amendment of the organizational documents
of any Company that would restrict Pledgor’s right to vote, pledge or grant a security interest in or otherwise transfer
its respective portion of the Pledged Collateral.


 


8. Irrevocable
Authorization and Instruction to Companies. To the extent that any portion of the Pledged Collateral might now or hereafter
consist of uncertificated securities within the meaning of Article 8 of the UCC, Pledgor irrevocably authorizes and instructs each
Company to comply with any instruction received by such Company from Agent with respect to such Pledged Collateral without any
other or further instructions from or consent of Pledgor, and Pledgor agrees that each Company shall be fully protected in so complying;
provided, however, that Agent agrees that Agent will not issue or deliver any such instructions to any Company except
upon or after the occurrence of an Event of Default.


 


9. Subsequent
Changes Affecting Pledged Collateral. Pledgor hereby represents to Agent that Pledgor has made its own arrangements for
keeping informed of changes or potential changes affecting the Pledged Collateral (including rights to convert, rights to subscribe,
payment of dividends and distributions, reorganization or other exchanges, tender offers and voting rights), and Pledgor hereby
agrees that Agent shall have no responsibility or liability for informing Pledgor of any such changes or potential changes or for
taking any action or omitting to take any action with respect thereto. Agent may, at any time that an Event of Default exists,
at its option and without notice to Pledgor, transfer or register the Pledged Collateral or any portion thereof into its or its
nominee’s name with or without any indication that such Pledged Collateral is subject to the security interest hereunder.


 


10. Equity Interest
Adjustments. If during the term of this Agreement any dividend, reclassification, readjustment or other change is declared
or made in the capital structure of any of the Companies, or any option included within the Pledged Collateral is exercised, or
both, all new, substituted and additional Equity Interests or other securities issued by reason of any such change or exercise
shall, if received by Pledgor, be held in trust for the Secured Parties’ benefit and shall be promptly delivered to and held
by Agent under the terms of this Agreement in the same manner as the Pledged Collateral originally pledged hereunder.


 


11. Warrants,
Options and Rights. If during the term of this Agreement subscription warrants or any other rights or options are issued
or exercised by Pledgor in connection with the Pledged Collateral, then such warrants, rights and options shall be promptly assigned
by Pledgor to Agent and all certificates evidencing new Equity Interests or other securities so acquired by Pledgor shall be promptly
delivered to Agent to be held under the terms of this Agreement in the same manner as the Pledged Collateral originally pledged
hereunder.


 




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12. Registration.
If Agent determines that it is required to register under or otherwise comply in any way with the Securities Act of 1933, as amended
from time to time (the “Securities Act”) or any similar federal or state law with respect to the securities,
if any, included in the Pledged Collateral prior to sale thereof by Agent, then upon or after the occurrence of any Event of Default,
Pledgor will use its best efforts to cause any such registration to be effectively made, at no expense to Agent, and to continue
such registration effective for such time as may be necessary in the reasonable opinion of Agent and Required Holders, and will
reimburse Agent for any out-of-pocket expense incurred by Agent, including reasonable attorneys’ fees and accountants’
fees and expenses, in connection therewith.


 


13. Consent.
Pledgor hereby consents that from time to time, before or after the occurrence or existence of any default or Event of Default,
with or without notice to or assent from Pledgor, any other security at any time held by or available to Agent for any of the Secured
Obligations may be exchanged, surrendered, or released, and any of the Secured Obligations may be changed, altered, renewed, extended,
continued, surrendered, compromised, waived or released, in whole or in part, as Agent may see fit, and Pledgor shall remain bound
under this Agreement and under the other Notes Amendment Documents notwithstanding any such exchange, surrender, release, alteration,
renewal, extension, continuance, compromise, waiver or inaction, extension of further credit or other dealing.


 




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14. Remedies
Upon Default. Upon or after the occurrence of any Event of Default and subject to the terms of the Intercreditor Agreement,
(i) Agent shall have, in addition to any other rights given by law or the rights given hereunder or under each of the other Notes
Amendment Documents, all of the rights and remedies with respect to the Pledged Collateral of a secured party under the UCC and
(ii) Agent may cause all or any part of the Equity Interests held by it to be transferred into its name or the name of its nominee
or nominees. In addition, upon or at any time after the occurrence of an Event of Default, Agent may sell or cause the Pledged
Collateral, or any part thereof, which shall then be or shall thereafter come into Agent’s possession or custody, to be sold
at any broker’s board or at public or private sale, in one or more sales or lots, at such price as Agent may deem best, and
for cash or on credit or for future delivery, and the purchaser of any or all of the Pledged Collateral so sold shall thereafter
hold the same absolutely, free from any claim, encumbrance or right of any kind whatsoever of Pledgor or arising through Pledgor.
If any of the Pledged Collateral is sold by Agent upon credit or for future delivery, Agent shall not be liable for the failure
of the purchaser to pay the same and in such event Agent may resell such Pledged Collateral. Unless the Pledged Collateral threatens
to decline speedily in value or is or becomes of a type sold on a recognized market, Agent will give the applicable Pledgor reasonable
notice of the time and place of any public sale thereof, or of the time after which any private sale or other intended disposition
is to be made. Any sale of the Pledged Collateral conducted in conformity with reasonable commercial practices of banks, insurance
companies or other financial institutions disposing of property similar to the Pledged Collateral shall be deemed to be commercially
reasonable. Any requirements of reasonable notice shall be met if such notice is mailed to the applicable Pledgor, as provided
in Section 22 below, at least ten (10) days before the time of the sale or disposition. Any other requirement of notice,
demand or advertisement for sale is, to the fullest extent permitted by applicable law, waived. Agent may, in its own name, or
in the name of a designee or nominee, buy at any public sale of the Pledged Collateral and, if permitted by applicable law, buy
at any private sale thereof. Pledgor will pay to Agent on demand all expenses (including court costs and reasonable attorneys’
fees and expenses) of, or incident to, the enforcement of any of the provisions hereof and all other charges due against the Pledged
Collateral, including taxes, assessments or Liens upon the Pledged Collateral and any expenses, including transfer or other taxes,
arising in connection with any sale, transfer or other disposition of Pledged Collateral. In connection with any sale of Pledged
Collateral by Agent, Agent shall have the right to execute any document or form, in its name or in the name of Pledgor, that may
be necessary or desirable in connection with such sale, including Form 144 promulgated by the Securities and Exchange Commission.
In view of the fact that federal and state securities laws may impose certain restrictions on the method by which a sale of the
Pledged Collateral may be effected after an Event of Default, Pledgor agrees that Agent may, from time to time, attempt to sell
all or any part of the Pledged Collateral by means of a private placement restricting the bidders and prospective purchasers to
those who will represent and agree that they are purchasing for investment only and not for distribution. Pledgor agrees that any
such private sales may be at prices and other terms less favorable to the seller than if sold at public sales and that such private
sales shall not by reason thereof be deemed not to have been made in a commercially reasonable manner. Agent shall be under no
obligation to delay a sale of any of the Pledged Collateral for the period of time necessary to permit the issuer of such securities
to register such securities for public sale under the Securities Act even if the issuer would agree to do so. Agent shall apply
the cash proceeds actually received from any sale or other disposition to the reasonable expenses of retaking, holding, preparing
for sale, selling and the like, to reasonable attorneys’ fees, and all legal expenses, travel and other expenses that might
be incurred by Agent in attempting to collect the Secured Obligations or to enforce this Agreement or in the prosecution or defense
of any action or proceeding related to the subject matter of this Agreement; and then to the Secured Obligations in the manner
authorized by the Notes Amendment Documents.


 


15. Redemption;
Marshaling. Pledgor hereby waives and releases to the fullest extent permitted by applicable law any right or equity of
redemption with respect to the Pledged Collateral before or after a sale conducted pursuant to Section 14 hereof. Pledgor
agrees that Agent shall not be required to marshal any present or future security (including this Agreement and the Pledged Collateral
pledged hereunder) for, or guaranties of, the Secured Obligations or any of them, or to resort to such security or guaranties in
any particular order; and all of Agent’s rights hereunder and in respect of such security and guaranties shall be cumulative
and in addition to all other rights, however existing or arising. To the fullest extent that it lawfully may, Pledgor hereby agrees
that it will not invoke any law relating to the marshaling of collateral that might cause delay in or impede the enforcement of
Agent’s rights under this Agreement or under any other instrument evidencing any of the Secured Obligations or under which
any of the Secured Obligations is outstanding or by which any of the Secured Obligations is secured or guaranteed, and to the fullest
extent that it lawfully may, Pledgor hereby irrevocably waives the benefits of all such laws.


 


16. Term.
This Agreement shall become effective only when accepted by Agent and, when so accepted, shall constitute a continuing agreement
and shall remain in full force and effect until the Secured Obligations are paid in full, at which time this Agreement shall terminate
and Agent shall deliver to the Pledgor, at Pledgor’s expense, such of the Pledged Collateral as shall not have been sold
or otherwise applied pursuant to this Agreement. Notwithstanding the foregoing, in no event shall any termination of this Agreement
terminate any indemnity set forth in this Agreement or any of the other Notes Amendment Documents, all of which indemnities shall
survive any termination of this Agreement or any of the other Notes Amendment Documents.


 




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17. Rules and
Construction. The singular shall include the plural and vice versa, and any gender shall include any other gender as the
text shall indicate. All references to “including” shall mean “including, without limitation.” Each reference
in this Agreement to a “corporation” shall also be deemed to include a reference to a limited liability company, limited
partnership or limited liability partnership and vice versa, each reference to “shareholders” of a Person shall also
be deemed to include a reference to members or partners and vice versa and each reference to “certificate of incorporation”
or “articles of incorporation” or “bylaws” shall also be deemed to include a reference to “certificate
of formation” or “certificate of limited partnership” and “limited liability company operating agreement”
or “limited partnership agreement” or other organizational documents of a limited liability company, limited partnership
or limited liability partnership and vice versa.


 


18. Successors
and Assigns. This Agreement shall be binding upon Pledgor and its respective successors and assigns, and shall inure to
the benefit of Agent and the other Secured Parties and their respective successors and assigns. This Agreement is fully assignable
by any Secured Party without the consent of Pledgor or Aurora; provided that this Agreement may not be assigned by Pledgor or Aurora
without the prior written consent of the Agent.


 


19. Construction
and Applicable Law. Whenever possible, each provision of this Agreement shall be interpreted in such manner as to be effective
and valid under applicable law, but, if any provision of this Agreement shall be held to be prohibited or invalid under any applicable
law, such provision shall be ineffective only to the extent of such prohibition or invalidity, without invalidating the remainder
of such provision or the remaining provisions of this Agreement. This Agreement shall be governed by and the rights and liabilities
of the parties hereto determined and construed in accordance with the internal laws of the State of New York without regard to
its conflicts of law provisions. This Agreement is intended to take effect as a document executed and delivered under seal.


 


20. Cooperation
and Further Assurances. Pledgor agrees that it will cooperate with Agent and will, upon Agent’s request, execute
and deliver, or cause to be executed and delivered, all such other powers, instruments, financing statements, certificates, legal
opinions and other documents, and will take all such other action as Agent and Required Holders request from time to time, in order
to carry out the provisions and purposes hereof, including delivering to Agent, if requested by Agent, irrevocable proxies with
respect to the Equity Interests in form satisfactory to Agent and Required Holders. Until receipt thereof, this Agreement shall
constitute Pledgor’s proxy to Agent or its nominee to vote all shares of the Equity Interests then registered in Pledgor’s
name (subject to Pledgor’s voting rights under Section 3 hereof) upon or after the occurrence of an Event of Default.


 


21. Agent’s
Exoneration. Under no circumstances shall Agent be deemed to assume any responsibility for or obligation or duty with respect
to any part or all of the Pledged Collateral of any nature or kind, other than the physical custody thereof, or any matter or proceedings
arising out of or relating thereto. Agent shall not be required to take any action of any kind to collect, preserve or protect
its or Pledgor’s rights in the Pledged Collateral or against other parties thereto. Agent’s prior recourse to any part
or all of the Pledged Collateral shall not constitute a condition of any demand, suit or proceeding for payment or collection of
the Secured Obligations.


 




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22. Notices.
All notices, requests and demands to or upon any party hereto shall be given in the manner and become effective as stipulated in
the Amendment Agreement. Regardless of the manner in which notice is provided, notices may be sent to Agent and Pledgor pursuant
to the notice information set forth in the signature pages hereof or to such other address or telephone number as any party may
give to the other for such purpose in accordance with this paragraph.


 


23. Pledgor’s
Obligations Not Affected. The obligations of Pledgor hereunder shall remain in full force and effect without regard to,
and shall not be impaired by (a) any bankruptcy, insolvency, reorganization, arrangement, readjustment, composition, liquidation
or the like of Pledgor; (b) any exercise or nonexercise, or any waiver, by Agent of any right, remedy, power or privilege under
or in respect of any of the Secured Obligations or any security thereof (including this Agreement); (c) any amendment to or modification
of the Amendment Agreement, the other Notes Amendment Documents or any of the Secured Obligations; (d) any amendment to or modification
of any instrument (other than this Agreement) securing any of the Secured Obligations; or (e) the taking of additional security
for, or any guaranty of, any of the Secured Obligations or the release or discharge or termination of any security or guaranty
for any of the Secured Obligations, regardless of whether or not Pledgor shall have notice or knowledge of any of the foregoing.


 


24. No Waiver,
Etc. No act, failure or delay by Agent shall constitute a waiver of any of its rights and remedies hereunder or
otherwise. No single or partial waiver by Agent of any default or Event of Default or right or remedy that Agent might have shall
operate as a waiver of any other default, Event of Default, right or remedy or of the same default, Event of Default, right or
remedy on a future occasion. Pledgor hereby waives presentment, notice of dishonor and protest of all instruments included in or
evidencing any of the Secured Obligations or the Pledged Collateral, and any and all other notices and demands whatsoever (except
as expressly provided herein).


 


25. Section Headings.
The section headings herein are for convenience of reference only, and shall not affect in any way the interpretation of any of
the provisions hereof.


 


26. Agent Appointed
Attorney-In-Fact. Upon and after the occurrence of an Event of Default, Agent shall be deemed to be Pledgor’s attorney-in-fact,
with full power of substitution, for the purpose of carrying out the provisions of this Agreement and taking any action and executing
any instrument that Agent reasonably deems necessary or advisable to accomplish the purposes hereof, which appointment is coupled
with an interest and is irrevocable. Without limiting the generality of the foregoing, Agent shall have the power to arrange for
the transfer, upon or at any time after the occurrence of an Event of Default, of any of the Pledged Collateral on the books of
any or all of the Companies to the name of Agent or Agent’s nominee. Pledgor agrees to indemnify and save Agent harmless
from and against any liability or damage that Agent might suffer or incur, in the exercise or performance of any of Agent’s
powers and duties specifically set forth herein, except to the extent that such liability or damage arises from Agent’s gross
negligence or willful misconduct.


 




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27. Use of Proceeds.
Pledgor hereby represents and warrants to Agent that none of the proceeds heretofore and hereafter received by it under the Amendment
Agreement are for the purpose of purchasing any “margin stock” as that term is defined in either Regulation U promulgated
by the Board of Governors of the Federal Reserve System, or refinancing any indebtedness originally incurred to purchase any such
“margin stock.”


 


28. Waiver of
Subrogation and Other Claims. Pledgor recognizes that Agent, in exercising its rights and remedies with respect to the
Pledged Collateral, may likely be unable to find one or more purchasers thereof if, after the sale of the Pledged Collateral, the
Company were, because of any claim based on subrogation or any other theory, liable to Pledgor on account of the sale by Agent
of the Pledged Collateral in full or partial satisfaction of the Secured Obligations or liable to Pledgor on account of any indebtedness
owing to Pledgor that is subordinated to any or all of the Secured Obligations. Pledgor hereby agrees, therefore, that if Agent
sells any of the Pledged Collateral in full or partial satisfaction of the Secured Obligations, Pledgor shall in such case have
no right or claim against any Company on account of any such subordinated indebtedness or on the theory that Pledgor has become
subrogated to any claim or right of Agent against such Company or on any basis whatsoever, and Pledgor hereby expressly waives
and relinquishes, to the fullest extent permitted by applicable law, all such rights and claims against Companies.


 


29. Execution
in 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 counterparts taken
together shall constitute but one and the same instrument. In proving this Agreement in any judicial proceeding, it shall not be
necessary to produce or account for more than one such counterpart signed by the party against whom such enforcement is sought.
Any manually-executed signature page delivered by a party by facsimile or other electronic transmission shall be deemed to be an
original signature page hereto.


 


30. WAIVERS.
PLEDGOR HEREBY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW: NOTICE OF AGENT’S ACCEPTANCE OF THIS AGREEMENT;
NOTICE OF EXTENSIONS OF CREDIT, NOTICES ISSUANCES, LOANS, ADVANCES OR OTHER FINANCIAL ASSISTANCE BY SECURED PARTIES TO PLEDGOR;
THE RIGHT TO TRIAL BY JURY (WHICH AGENT ALSO WAIVES) IN ANY ACTION, SUIT, PROCEEDING OR COUNTERCLAIM CONCERNING THIS AGREEMENT
OR ANY OF THE PLEDGED COLLATERAL; PRESENTMENT AND DEMAND FOR PAYMENT OF ANY OF THE SECURED OBLIGATIONS; PROTEST AND NOTICE OF DISHONOR
OR DEFAULT WITH RESPECT TO ANY OF THE SECURED OBLIGATIONS; AND ALL OTHER NOTICES TO WHICH PLEDGOR MIGHT OTHERWISE BE ENTITLED EXCEPT
AS HEREIN OTHERWISE EXPRESSLY PROVIDED.


 


31. Governing
Law; Jurisdiction; Etc.


 


(a) The laws of the
State of New York will govern this Agreement and any claim, controversy, dispute or cause of action (whether in contract or tort
or otherwise) based upon, arising out of or relating to this Agreement and the transactions contemplated hereby and thereby.


 




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(b) Pledgor irrevocably
and unconditionally agrees that it will not commence any action, litigation or proceeding of any kind whatsoever, whether in law
or equity, or whether in contract or tort or otherwise, against any Secured Party in any way relating to this Agreement or the
transactions contemplated hereby, in any forum other than the courts of the State of New York sitting in the city of New York,
borough of Manhattan, and of the United States District Court of the Southern District of New York, and any appellate court from
any thereof, and each of the parties hereto irrevocably and unconditionally submits to the jurisdiction of such courts and agrees
that any such action, litigation or proceeding may be brought in any 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, litigation
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 herein shall affect any right that each Secured Party may otherwise have to bring any action or proceeding relating
to this Agreement against Pledgor or its properties in the courts of any jurisdiction.


 


(c) Pledgor 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 in any such court referred to in
Section 31(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) Pledgor irrevocably
consents to the service of process in the manner provided for notices in Section 22 and agrees that nothing herein will affect
the right of any party hereto to serve process in any other manner permitted by applicable law.


 


32. 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 RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY
OR THEREBY WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY. EACH PARTY HERETO (A) CERTIFIES THAT NO AGENT, ATTORNEY, REPRESENTATIVE
OR ANY OTHER PERSON HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PERSON WOULD NOT SEEK TO ENFORCE THE FOREGOING WAIVER
IN THE EVENT OF LITIGATION, AND (B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT
AND THE OTHER NOTES AMENDMENT DOCUMENTS BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION


 


33. Incorporation
of Recitals.  Each of the Recitals set forth above are true and correct and are incorporated herein and made a part of this
Agreement.


 


34. Inconsistency
with Intercreditor Agreement. In the event of any conflict between the terms of this Agreement and the Intercreditor Agreement,
the Intercreditor Agreement shall control.


 




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35. Rights Subject
to Operating Agreement. Notwithstanding any other term to the contrary, the rights and remedies of the Agent and the Secured
Parties hereunder are subject to the terms, conditions and restrictions set forth in the Operating Agreement, including, but not
limited to, Section 3.6 thereof.


 


[Remainder of page
intentionally left blank; signatures begin on following page.] 


 




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IN WITNESS WHEREOF,
Pledgor has caused this Agreement to be signed, sealed and delivered by its duly authorized representative on the day and year
first above written.


 


	 	PLEDGOR:
	 	 
	 	PACIFIC ETHANOL CENTRAL, LLC
	 	 	 
	 	By:	/s/ Neil M. Koehler
	 	Name: 	Neil M. Koehler
	 	Title:	President and Chief Executive Officer
	 	 	 
	 	c/o Pacific Ethanol, Inc. 
	 	400 Capital Mall, Suite 2060
	 	Sacramento, California 95814
	 	 	 
	 	Accepted:
	 	 
	 	AGENT:
	 	 
	 	CORTLAND PRODUCTS CORP.
	 	 	 
	 	By:	/s/ Matthew Trybula
	 	Name:	Matthew Trybula
	 	Title:	Associate Counsel
	 	 	 
	 	225 W Washington Street, 9th Floor
	 	Chicago, IL 60606


 


Signature page to
Noteholder Pledge Agreement (Aurora) 


 




     


     


    

 


ANNEX A


 


to Pledge Agreement


 


	Pledgor	 	Issuer	 	Type and Class of Equity Interests	 	Number of Pledged Shares	 	Certificate Number	 	Percentage of Outstanding Equity Interests
	Pacific Ethanol Central, LLC	 	Pacific Aurora, LLC	 	Membership Interest	 	
        88.15

        units
	 	N/A	 	88.15%


  




     


     


    

 


ACKNOWLEDGMENT AND AGREEMENT OF ISSUER


 


The undersigned (“Issuer”)
hereby acknowledges, represents and agrees that: (i) such Issuer has received a true and correct copy of the within and foregoing
Pledge Agreement (the “Agreement”) by and among PACIFIC ETHANOL CENTRAL, LLC, a limited liability company organized
under the laws of Delaware (“Pledgor”), PACIFIC AURORA, LLC, a limited liability company organized under the
laws of Delaware (“Aurora”), and CORTLAND CAPITAL MARKET SERVICES LLC, as collateral agent for the benefit of
the Noteholders (in such capacity, together with its successors and assigns in such capacity, the “Agent”; together
with the Noteholders, the “Secured Parties”); (ii) the Agreement has been duly recorded and noted on the books
and records of Issuer and will be maintained as part of such books and records; (iii) the Agreement does not violate any term,
condition or covenant of the organizational documents of Issuer, or of any other agreement to which Issuer is a party; (iv) subject
to the terms of the Operating Agreement, Issuer will comply with written instructions originated by Agent without further consent
of Pledgor as the registered owner of Pledgor’s respective portion of the Pledged Collateral; (v) Issuer consents to the
execution of the Agreement and to the assignment, transfer and pledge of the Pledged Collateral effected thereby; and (vi) upon
and after the occurrence of an Event of Default, subject to the terms of the Operating Agreement, Issuer consents to a public or
private sale or sales of all or any part of the Pledged Collateral by Agent in accordance with the terms of the Agreement and consents
to each purchaser of all or any part of the Pledged Collateral at such sale or sales becoming a shareholder, member, partner or
other owner, as applicable, of Issuer thereby entitled to the same rights and privileges and subject to the same duties as the
owner of the applicable Pledged Collateral under the organizational documents of Issuer.


 


Each capitalized term
used herein, unless otherwise defined herein, shall have the meaning ascribed to such term in the Agreement. Any manually-executed
signature page delivered by a party by facsimile or other electronic transmission shall be deemed to be an original signature page
hereto.


 


[Remainder of page
intentionally left blank; signature appears on the following page.]


 




     


     


    

 


IN WITNESS WHEREOF,
Issuer has executed this Acknowledgment and Agreement of Issuer under seal as of the date of the Agreement referenced above.


 


	 	ISSUER:
	 	 
	 	PACIFIC AURORA, LLC
	 	 	 
	 	By:	/s/ Neil M. Koehler
	 	Name: 	Neil M. Koehler
	 	Title:	President and Chief Executive Officer


 


[Acknowledgment and Agreement of Issuer]