Exhibit 10.8








 


Execution Version


 


PARTIAL RELEASE OF COLLATERAL LETTER


 


Pacific Ethanol, Inc.

400 Capitol Mall, Suite 2060

Sacramento, CA 95814






Aurora Cooperative Elevator Company


2225 Q Street


Aurora, NE 68818


 


April 15, 2020


 


Re: The Senior Secured Note Amendment Agreement
dated as of December 22, 2019 (as amended, supplemented or otherwise modified from time to time, the “Amendment Agreement”),
by and among Pacific Ethanol, Inc., a Delaware corporation (the “Company”) and the Noteholders defined therein
(the “Noteholders”), the Amended Notes issued pursuant to the Amendment Agreement (the “Amended Notes”),
the Pledge Agreement dated as of March 20, 2020 (as amended, supplemented or otherwise modified from time to time, the “Pledge
Agreement”) by and among Pacific Ethanol Central, LLC, a Delaware limited liability company (“Pledgor”),
Pacific Aurora, LLC, a Delaware limited liability company (“Aurora”) and Cortland Products Corp., as collateral
agent for the benefit of the Noteholders (in such capacity, the “Agent”), the Security Agreement dated as of
March 20, 2020 by and between the Pledgor and the Agent (as amended, supplemented or otherwise modified from time to time, the
“PEC Security Agreement”), the Security Agreement dated as of December 15, 2016 (as amended, supplemented or
otherwise modified from time to time, the “Initial Security Agreement”) by and among the Company, Agent and
Noteholders, and the Intercreditor Agreement dated March 20, 2020 (as amended, supplemented or otherwise modified from time to
time, the “Intercreditor Agreement”; together with the Amendment Agreement, Amended Notes, Pledge Agreement,
PEC Security Agreement and Initial Security Agreement, the “Documents”) by and among the Company, Agent, and
CoBank, ACB, a federally-chartered instrumentality of the United States (“Senior Agent”).


 


Ladies and Gentlemen:


 


Capitalized terms used and not otherwise
defined in this letter agreement shall have the respective meanings given to them in the Documents, as applicable.


 


By their signatures below, each of the
Company and the Pledgor hereby certify that the Pledgor is selling the released property set forth on Annex A (the “Released
Property”) in accordance with that certain Membership Interest Purchase Agreement, dated as of February 28, 2020, by
and among the Pledgor, Aurora and Aurora Cooperative Elevator Company, a Nebraska cooperative company (“Buyer”)
(as amended, the “Purchase Agreement”) for $52,789,425, which amount is comprised of $16,500,000 in Seller Notes
(as defined in the Purchase Agreement) and $36,289,425 in cash, subject to adjustment in accordance with the terms of the Purchase
Agreement. Pursuant to the Purchase Agreement, the Buyer has requested that the Agent, on behalf of the Secured Parties, release
all liens on and security interest in the Released Property held by Agent, including, without limitation, the liens and security
interests granted under (i) the Pledge Agreement and (ii) the PEC Security Agreement (such liens and security interests, collectively,
the “Agent Lien”).


 






     


     


    

 





In connection therewith, and for other
good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Company, the Pledgor, the Buyer,
the other Grantors party hereto, each Noteholder, in its capacity as a Secured Party under the Transaction Documents, and the Agent
agree as follows:


 


Upon receipt by:


 


(a) the Senior
Agent, of $14,799,189.62, representing 80 percent of the net cash sale proceeds to be paid under the Purchase Agreement on
the closing date (the “Senior Agent Paydown”) in accordance with the terms of the Partial Release of Collateral
Letter by and among the Senior Agent, the Pledgor and the other parties thereto (the “Senior Agent Release Letter”);


 


(b) the Agent,
of


 


(i) a fully
executed copy of the Purchase Agreement, together with evidence of the consummation of sale of the Released Property pursuant thereto;


 


(ii) a fully
executed copy of the Senior Agent Release Letter releasing its lien on the Released Property automatically or effective upon substantially
similar terms as set forth herein;


 


(iii) a fully
executed counterpart of this letter agreement signed by the Company, the Pledgor and the other grantors under the Collateral Documents;


 


(c)
Morrison & Foerster LLP of a wire transfer of immediately available funds of $127,000.00 to the account set forth on
Annex B; and


 


(d)
Arnold & Porter LLP of a wire transfer of immediately available funds of $2,992.00 to the account set forth on Annex
C;


 


the Agent Lien and security interest created
under the Pledge Agreement and the PEC Security Agreement in favor of the Agent, on behalf of the Secured Parties, in all of the
Pledgor’s rights, title and interests in, to or under any and all of the Released Property is released; provided, however,
that this letter agreement shall not, other than with respect to the Released Property, waive, release, modify or terminate any
other Collateral or provisions of the PEC Security Agreement or any obligations of the Pledgor under the PEC Security Agreement
or the Pledge Agreement that are contingent reimbursement or indemnity or similar obligations or obligations that by their terms
survive the termination thereof or release of Agent’s Lien and security interest on the Released Property.


 


The parties hereto agree that the Agent
shall be entitled to conclusively assume that the Senior Agent Paydown contemplated to be made on April 15, 2020 has been made
as of such date.


 


The Company and the Pledgor acknowledge
and agree that the Agent Lien granted under the Pledge Agreement and the PEC Security Agreement shall be reinstated with full force
and effect if, at any time on or after the date hereof, all or any portion of the sale of the Released Property is voided or rescinded
or otherwise undone upon the insolvency, bankruptcy or reorganization of the Company, the Pledgor or any other subsidiary of the
Company party to the Collateral Documents or otherwise, all as though such payment had not been made.


 


The Agent agrees to procure, deliver or
execute and deliver to the Company, from time to time, all further releases, termination statements, certificates, instruments
and documents, each in form and substance reasonably satisfactory to the Company, the Agent and the Required Holders, and take
any other actions, as may be reasonably requested by the Company or which are required to evidence the consummation of the release
contemplated hereby, in each case, at the sole cost and expense of the Company (including attorneys’ fees and expenses).


 


The Agent hereby authorizes the Buyer,
the Company or the Pledgor, or any other party on behalf of the Company or the Pledgor, to file the UCC-3 financing statement amendment
attached hereto as Exhibit I to effect the foregoing releases in the appropriate recording and filing offices.


 


Within fifteen (15) days after the date
hereof (or such later date as agreed to by the Required Holders in their discretion via electronic mail), the Company and Pledgor
shall deliver to the Agent fully executed and, as applicable, notarized copies of the following documents, substantially in the
form delivered to the Senior Agent and subordinated to the assignments to and lien of Senior Agent pursuant to the terms of the
Intercreditor Agreement, and otherwise satisfactory in form and substance to the Agent and the Required Holders: (a) an Assignment
of Notes and Deeds of Trust covering the Seller Notes and the Seller Deeds of Trust (as defined in the Purchase Agreement); and
(b) Collateral Assignment of Deed of Trust, Assignment of Leases And Rents, Fixture Filing And Security Agreement with respect
to each of the Seller Deeds of Trust (as defined in the Purchase Agreement).


 






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It is expressly agreed and understood that
this is a partial release and that it shall in no manner release, affect or impair the liens and security interests in favor of
the Secured Parties, under the Initial Security Agreement or otherwise, against any Collateral other than the Released Property.
Except as expressly set forth herein, all terms and conditions of each Document shall remain in full force and effect. The Company
and each other grantor under the Collateral Documents hereby ratify and affirm the Collateral Documents.


 


To the extent that any offsets, defenses
or claims that may exist arising out of or relating to this letter agreement, the Documents, or the other Transaction Documents
and the transactions contemplated hereby or thereby against the Agent, any Noteholder or any of their respective subsidiaries,
affiliates, officers, directors, employees, agents, attorneys, predecessors, successors or assigns, both present and former (collectively,
the “Released Parties”) whether asserted or unasserted, by execution of this letter agreement, the Company,
for itself and its subsidiaries and affiliates and each of their respective successors, assigns, affiliates, subsidiaries, predecessors,
employees, heirs and executors, as applicable (collectively, “Releasors”), jointly and severally, release and
forever discharge each of the Released Parties of and from any and all manner of actions, causes of action, torts, suits, debts,
controversies, damages, judgments, executions, claims and demands whatsoever, asserted or unasserted, in law or in equity, that
exist or have occurred on or prior to the date of this letter agreement, arising out of or relating to this letter agreement, the
Documents or any of the other Transaction Documents which any of the Releasors ever had or now have against any of the Released
Parties, including, without limitation, any presently existing claim whether or not presently suspected, contemplated or anticipated.


 


This letter agreement (a) shall be governed
by and construed in accordance with the laws of the State of New York, (b) may be executed electronically in one or more counterparts,
each of which shall be an original and all of which, taken together, shall constitute one and the same instrument, (c) sets forth
the entire agreement among the parties relating to the subject matter pertaining hereto, and no term or provision hereof may be
amended, changed, waived, discharged or terminated orally or otherwise, except in writing signed by each such party, and (d) shall
be binding and inure to the benefit of the parties hereto and their respective successors and assigns. Buyer is an express third-party
beneficiary of this letter and shall be entitled to rely upon the terms hereof.


 


By their signatures below, the Noteholders
party hereto, constituting all of the Holders party to the Initial Security Agreement, hereby (i) expressly authorize and direct
the Agent to execute and deliver this letter agreement and the documents contemplated hereby and (ii) acknowledge and agree that
the direction in this paragraph constitute a direction from all Holders under the provisions of Section 17 of the Initial Security
Agreement, and (ii) Section 17(i) of the Initial Security Agreement shall apply to any and all actions taken by the Agent in accordance
with such directions.


 


[signature page
follows]


  




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IN WITNESS WHEREOF, the parties hereto have
executed this letter agreement as of the date set out above.


 


	CORTLAND PRODUCTS CORP.	 
	 	 	 
	By:	/s/ Matthew Trybula	 
	Name:	Matthew Trybula	 
	Title:	Associate Counsel	 
	 	 	 
	ACKNOWLEDGED AND CONSENTED TO BY:	 
	 	 
	PACIFIC ETHANOL, INC.	 
	 	 	 
	By:	/s/ Bryon T. McGregor	 
	Name:	Bryon T. McGregor	 
	Title:	Chief Financial Officer	 
	 	 	 
	PACIFIC ETHANOL CENTRAL, LLC	 
	 	 	 
	By:	/s/ Bryon T. McGregor	 
	Name:	Bryon T. McGregor	 
	Title:	Chief Financial Officer	 
	 	 	 
	ILLINOIS CORN PROCESSING, LLC	 
	 	 	 
	By:	/s/ Bryon T. McGregor	 
	Name:	Bryon T. McGregor	 
	Title:	Chief Financial Officer	 
	 	 	 
	PACIFIC ETHANOL PEKIN, LLC	 
	 	 	 
	By:	/s/ Bryon T. McGregor	 
	Name:	Bryon T. McGregor	 
	Title:	Chief Financial Officer	 
	 	 	 
	PACIFIC ETHANOL WEST, LLC	 
	 	 	 
	By:	/s/ Bryon T. McGregor	 
	Name:	Bryon T. McGregor	 
	Title:	Chief Financial Officer	 
	 	 	 
	PE OP CO.	 
	 	 	 
	By:	/s/ Bryon T. McGregor	 
	Name:	Bryon T. McGregor	 
	Title:	Chief Financial Officer	 


 


[Signature Page to Partial Release of Collateral
Letter]


 




     


     


    

 


	PACIFIC ETHANOL CENTRAL, LLC	 
	 	 	 
	By:	/s/ Bryon T. McGregor	 
	Name:	Bryon T. McGregor	 
	Title:	Chief Financial Officer	 
	 	 	 
	PACIFIC ETHANOL MADERA LLC	 
	 	 	 
	By:	/s/ Bryon T. McGregor	 
	Name:	Bryon T. McGregor	 
	Title:	Chief Financial Officer	 
	 	 	 
	PACIFIC ETHANOL CENTRAL, LLC	 
	 	 	 
	By:	/s/ Bryon T. McGregor	 
	Name:	Bryon T. McGregor	 
	Title:	Chief Financial Officer	 
	 	 	 
	PACIFIC ETHANOL MAGIC VALLEY, LLC	 
	 	 	 
	By:	/s/ Bryon T. McGregor	 
	Name:	Bryon T. McGregor	 
	Title:	Chief Financial Officer	 
	 	 	 
	PACIFIC ETHANOL STOCKTON LLC	 
	 	 	 
	By:	/s/ Bryon T. McGregor	 
	Name:	Bryon T. McGregor	 
	Title:	Chief Financial Officer	 
	 	 	 
	PACIFIC ETHANOL COLUMBIA, LLC	 
	 	 	 
	By:	/s/ Bryon T. McGregor	 
	Name:	Bryon T. McGregor	 
	Title:	Chief Financial Officer	 


 


[Signature Page to Partial Release of Collateral
Letter]


  




     


     


    

 


	ACCEPTED AND AGREED:	 
	 	 
	NOTEHOLDERS:	 
	 	 
	CKP SOUTH LLC	 
	 	 	 
	By:	/s/ Philip DeSantis	 
	Name:	Philip DeSantis	 
	Title:	 	 


 


[Signature Page to Partial Release of Collateral
Letter]


 


 




     


     


    

 


	CIF-INCOME PARTNERS (A), LLC	 
	 	 
	By:  BlackRock Financial Management, Inc.,	 
	its investment manager	 
	 	 	 
	By:	/s/ Stephen Kavulich	 
	Name:	Stephen Kavulich	 
	Title:	Director	 


  


[Signature Page to Partial Release of Collateral
Letter]


  




     


     


    

 


	ORANGE 2015 DISLOCREDIT FUND, L.P.	 
	 	 	 
	By:  BlackRock Financial Management, Inc.,	 
	its investment manager	 
	 	 	 
	By:	/s/ Stephen Kavulich	 
	Name:	Stephen Kavulich	 
	Title:	Director	 


  


[Signature Page to Partial Release of Collateral
Letter]


 






     


     


    




 





	
        

        Sainsbury’s
Credit Opportunities Fund, Ltd.

         
	 
	By: BlackRock Financial Management, Inc.,	 
	its investment manager	 
	 	 	 
	By:	/s/ Stephen Kavulich	 
	Name:	Stephen Kavulich	 
	Title:	Director	 


  


[Signature Page to Partial Release of Collateral
Letter]


  




     


     


    

 


	Co-Investment Income Fund, L.P. - US Taxable Series	 
	 	 	 
	By: BlackRock Financial Management, Inc.,	 
	its investment manager	 
	 	 	 
	By:	/s/ Stephen Kavulich	 
	Name:	Stephen Kavulich	 
	Title:	Director	 





 


[Signature Page to Partial Release of Collateral
Letter]





 




     


     


    

 


	Co-Investment Income Fund, L.P. - US Tax-EXEMPT Series	 
	 	 	 
	By: BlackRock Financial Management, Inc.,	 
	its investment manager	 
	 	 	 
	By:	/s/ Stephen Kavulich	 
	Name:	Stephen Kavulich	 
	Title:	Director	 





 


[Signature Page to Partial Release of Collateral
Letter]





 




     


     


    

 


	ALFRED J. DE LEO	 
	 	 
	/s/ Alfred J. De Leo	 





 


[Signature Page to Partial Release of Collateral
Letter]


 




     


     


    

 


 


	CORRUM CAPITAL ALTERNATIVE INCOME FUND LP	 
	 	 	 
	By:	/s/ Jonathan R. Mandle	 
	Name:	Jonathan R. Mandle	 
	Title:	Manager	 


  


[Signature Page to Partial Release of Collateral
Letter]


  




     


     


    

  


	CORRUM CAPITAL GLOBAL CREDIT OPPORTUNITIES CO INVESTMENT FUND I LP	 
	 	 	 
	By:	/s/ Jonathan R. Mandle	 
	Name:	Jonathan R. Mandle	 
	Title:	Manager	 


 


[Signature Page to Partial Release of Collateral
Letter]


  




     


     


    

 


	CORRUM CAPITAL GLOBAL CREDIT OPPORTUNITIES FUND LP	 
	 	 	 
	By:	/s/ Jonathan R. Mandle	 
	Name:	Jonathan R. Mandle	 
	Title:	Manager	 


  


[Signature Page to Partial Release of Collateral
Letter]


  




     


     


    

 


	DAVID KOENIG	 
	 	 
	/s/ David Koenig	 





 


[Signature Page to Partial Release of Collateral
Letter]





 




     


     


    

 


	JONATHAN W. WEISS	 
	 	 
	/s/ Jonathan W. Weiss	 


  


[Signature Page to Partial Release of Collateral
Letter]


  




     


     


    

 


	JUSTIN S. WOHLER	 
	 	 
	/s/ Justin S. Wohler	 





 


[Signature Page to Partial Release of Collateral
Letter]


  




     


     


    

 


	PHILIP DESANTIS	 
	 	 
	/s/ Phillip DeSantis	 


   


[Signature Page to Partial Release of Collateral
Letter]


 




     


     


    

 


Annex A


 


All Equity Interests (as hereafter defined)
owned by Pledgor in the Issuer described in the chart below, together with all products and proceeds thereof (except to the extent
such proceeds constitute proceeds of the sale under the Purchase Agreement, including without limitation any Seller Notes (as defined
in the Purchase Agreement), and such proceeds of the sale and Seller Notes shall not constitute Released Property):


 


“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.


 


	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	 	73.93 units	 	N/A	 	 	73.93	%



  




     


     


    

 


ANNEX B


 




     


     


    

 


ANNEX C


 




     


     


    

 


EXHIBIT
I


 








UCC-3 FINANCING STATEMENT AMENDMENT


 


[See attached]