Exhibit 10.5


 





SECURED PROMISSORY NOTE


(Non- Negotiable)


 





	$7,920,000.00	April 15, 2020










 


FOR VALUE RECEIVED,
PACIFIC AURORA, LLC, a Delaware limited liability company (“Borrower”) hereby irrevocably and unconditionally
promises to pay to the order of PACIFIC ETHANOL CENTRAL, LLC, a Delaware limited liability company (“PEC” and
collectively with any subsequent holder hereof by assignment, succession or transfer, “Lender”), the principal
amount of Seven Million, Nine Hundred Twenty Thousand and 00/100 Dollars ($7,920,000.00) (the “Loan”), together
with accrued interest thereon, plus all other fees, costs, expenses and charges and on the terms and conditions set forth below
(the “Note”). Borrower and Lender are sometimes referred to individually as “Party” and collectively,
“Parties”.


 


1. Loan
Purpose. The purpose of the Loan is to finance in part Aurora Cooperative Elevator Company’s (“ACEC”)
acquisition of PEC’s membership interests in Borrower pursuant to that certain Membership Interest Purchase Agreement dated
as of February 28, 2020 (as amended, the “Purchase Agreement”) by and among PEC, ACEC and Borrower. Notwithstanding
anything to the contrary set forth elsewhere in this Note, the Loan is not a revolving loan and no amounts which have been advanced
and subsequently repaid may be re-borrowed.


 


2. Interest;
Repayment Terms.


 


(a) Interest
Rate. Interest will accrue on the outstanding principal balance of the Loan at a rate per annum equal to 4.50% (the “Interest
Rate”). Interest will be calculated on the basis of a 365-day year and shall be computed for the actual number of days
elapsed in the period for which interest is charged.


 


(b) Payments.



 


(i) Quarterly
Interest Payments. Commencing on June 1, 2020 and continuing until the Maturity Date, Borrower shall make quarterly payments
of interest to Lender on the first day of each calendar quarter, with the amount of each such quarterly payment being equal to
all accrued and unpaid interest through the last day of the immediately preceding calendar quarter.


 


(ii) Scheduled
Principal Payments. In addition to the interest payments required to be made pursuant to Section 2(c)(i), commencing on January
3, 2022 (being the first Business Day of the first calendar quarter after the Setoff Period, as that term is defined in the Purchase
Agreement) and continuing until the Maturity Date, Borrower shall make quarterly principal payments to Lender on the first day
of each calendar quarter, with the amount of each such quarterly payment being equal to $396,000.00.


 


(iii) Reductions
Pursuant to Purchase Agreement. This Note and the unpaid principal amount outstanding hereunder shall be subject to further
reduction from time to time in accordance with the terms of Sections 2.5(c) and 10.2(e) of the Purchase
Agreement (collectively, the “Reduction and Offset Rights”), which are incorporated herein by this reference.


 






     


     


    

 


(c) Maturity
Date. The unpaid principal balance hereof, together with all unpaid interest accrued thereon, and all other amounts payable
by Borrower under the terms set forth below, shall be due and payable in full on the earliest of (i) April 15, 2025 or (ii) that
date upon which any Acceleration Event pursuant to Section 3 below or an Event of Default under Section 4 below has occurred (hereinafter,
the "Maturity Date").


 


(d) Place
of Payment; Application. All payments required under this Note shall be paid to Lender at the address designated by Lender
in writing from time to time and shall be applied by Lender first, to accrued, unpaid interest, and second, to the outstanding
principal balance of the Note; provided however, after an Event of Default, Lender may apply any amounts paid by Borrower first
to costs of collection. All amounts payable hereunder are payable in lawful money of the United States of America.


 


(e) Timing
of Payments. Notwithstanding anything to the contrary set forth elsewhere herein, if any payment date falls on a day that
is not a business day, payment must be made on the next succeeding business day and, as to any principal payment, such extension
of time will be included in computing any interest in respect of such payment. All payments of principal and interest due hereunder
must be made without deduction of any present and future taxes, levies, imposts, deductions, charges or withholdings, which amounts
must be paid by Borrower, except for income taxes, franchise taxes, branch profit taxes or other taxes based upon the income of
Lender, which shall be paid by Lender.


 


(f) Prepayments.
Borrower may prepay this Note, in full or in part, at any time without additional fee or penalty. All prepayments shall be applied
as directed by Borrower.


 


3. Secured
Obligation; Acceleration of Maturity Date. This Note and the obligations of Borrower hereunder are secured by that certain
DEED OF TRUST, ASSIGNMENT OF LEASES AND RENTS, FIXTURE FILING AND SECURITY AGREEMENT (Non-Negotiable Note) dated as of as of even
date herewith executed by Borrower as the grantor thereunder in favor of Fidelity National Title Company, as the trustee thereunder
for the benefit of Lender as the beneficiary thereunder (the “Deed of Trust”). In the event of (a) any transfer
or assignment by Borrower which is prohibited by this Note or the Deed of Trust, or (b) the creation of any Lien which does not
constitute a Permitted Encumbrance under the Deed of Trust and the failure of Borrower to release or cause the release of such
Lien within thirty (30) days after written notice from Lender of such Lien, the obligations of Borrower hereunder shall automatically
and without any further notice, become immediately due and payable in full, with the Maturity Date being deemed to have occurred
(each an “Acceleration Event”).


 


4. Event
of Default; Remedies and Costs of Collection. The (a) failure by Borrower to pay any principal, interest or any other amounts
as and when due in accordance with this Note, and the continuance of such failure for a period of ten (10) calendar days after
Borrower’s receipt of written notice from Lender specifying such failure (provided however, no such notice shall be required
at maturity); (b) occurrence of an Acceleration Event, or (c) occurrence of any Event of Default as defined in the Deed of Trust
shall, automatically and without further notice, constitute an immediate event of default (each an “Event of Default”)
hereunder and this Note, shall become immediately due and payable in full, with the Maturity Date being deemed to have occurred.
Upon the occurrence of an Event of Default, Lender may exercise any and all rights and remedies it may have hereunder, under the
Deed of Trust, and/or under any applicable law or in equity. No delay or omission on the part of Lender in exercising any right
or remedy under this Note or the Deed of Trust will operate as a waiver of such right or remedy. If this Note is not paid when
due or if any Event of Default occurs, Borrower promises to pay all reasonable out-of-pocket costs of enforcement and collection,
including, without limitation, reasonable attorneys’ fees and costs of Lender, whether or not any action or proceeding is
brought to enforce the provisions hereof.


 






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5. General
Provisions.


 


(a) Notices.
Any and all notices or other communications or deliveries required or permitted to be provided hereunder shall be in writing and
shall be deemed to have been duly given and effective: (a) when received, if sent by nationally recognized overnight courier service;
or (b) upon actual receipt, if personally delivered, by the Party to whom such notice is required or permitted to be given. The
address for such notices and communications (unless changed by the applicable Party by like notice) shall be as follows:


 


If to Borrower:


 


Aurora Cooperative Elevator Company


2225 Q Street


Aurora, NE 68818


Attention: Kara J. Ronnau, Executive General Counsel


Telephone: (402) 694-7617


 


with a copy (which shall not constitute notice) to:


 


Kutak Rock LLP


1650 Farnam Street


Omaha, NE 68102


Attention: Joel Wiegert and Lisa Peters


Telephone: (402)
346-6000


 


If to Lender:


 


Pacific Ethanol Central, LLC


c/o Pacific Ethanol, Inc.


400 Capital Mall, Suite 2060


Sacramento, CA 95814


Attention: Christopher W. Wright, General Counsel


Telephone: (916) 403-2130


 


with copies (which shall not constitute notice) to:


 


Troutman Sanders LLP


4 Park Plaza, 14th Floor


Irvine, CA 92614


Attention: Larry A. Cerutti


Telephone: (949)
622-2710


 






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(b) Successors
and Assigns. The provisions of this Note shall be binding upon and inure to the benefit of the Parties hereto. Notwithstanding
anything to the contrary elsewhere herein or in the Deed of Trust, (i) Borrower may not assign or otherwise transfer any of its
rights or obligations hereunder without the prior written consent of Lender (and any attempted assignment or transfer by Borrower
without such consent shall be null and void and shall constitute an immediate Event of Default) and (ii) this Note is non-negotiable,
and Lender may not assign or otherwise transfer this Note without the consent of Borrower; provided that Borrower specifically
consents to the collateral assignment of this Note pursuant to that certain Assignment of Notes and Deeds of Trust dated of even
date herewith. Upon any permitted assignment or transfer of this Note by Lender, such assignee or transferee shall be the Lender
hereunder and the Lender under the Deed of Trust and all references to Lender herein or as Lender under the Deed of Trust shall
be deemed to mean such transferee or assignee. Nothing in this Note, expressed or implied, shall be construed to confer upon any
person (other than the parties hereto, and any permitted successors and assigns) any legal or equitable right, remedy or claim
under or by reason of this Note.


 


(c) Borrower
Representations. Borrower hereby represents and warrants to Lender that (i) the execution, delivery and performance of
this Note and the Deed of Trust shall not conflict with any laws, orders, judgments, decrees, agreements, indentures or other obligations
and duties of Borrower, and (ii) Borrower is represented by separate counsel and, prior to its execution of this Note, Borrower
has read this Note, has reviewed this Note with its counsel and has a full understanding of each of the terms, conditions and obligations
set forth herein.


 


(d) Waiver.
Borrower hereby waives diligence, presentment, protest and demand, notice of protest, dishonor and nonpayment of this Note.


 


(e) Severability.
Every provision of this Note is intended to be severable. If any term or provision hereof is declared by a court of competent jurisdiction
to be illegal or invalid for any reason whatsoever, such illegality or invalidity will not affect the balance of the terms and
provisions hereof, which terms and provisions will remain binding and enforceable.


 


(f) Usury
Savings Clause. It is the intent of Borrower and Lender (by its acceptance of this Note and as the holder thereof) in the
execution of this Note and all other instruments securing this Note that the loan evidenced hereby be exempt from the restrictions
of any applicable usury laws, whether local, state or federal, including, without limitation, the laws of the State of Nebraska.
In the event that, for any reason, it should be determined that any usury law is applicable to the Loan, Lender and Borrower stipulate
and agree that none of the terms and provisions contained herein shall ever be construed to create a contract for the use, forbearance
or detention of money requiring payment of interest at a rate in excess of the maximum interest rate permitted to be charged by
any such applicable usury law. In such event, if any holder of this Note collects monies which are deemed to constitute interest
which would otherwise increase the effective interest rate on this Note to a rate in excess of the maximum rate permitted to be
charged by such applicable usury law, all such sums deemed to constitute interest in excess of such maximum rate will, at the option
of Lender, be credited to the payment of the sums due hereunder or returned to Borrower without penalty, interest or charge.


 


(g) Independent;
Integration; Controlling Document; No Offset. This Note, the Deed of Trust and the Purchase Agreement (solely with respect
to the Reduction and Offset Rights) contain the complete understanding and agreement of the Parties with respect to the Loan and
supersede all prior representations, warranties, agreements, arrangements, understandings, and negotiations with respect to the
Loan. In the event of any inconsistencies between any terms of this Note and any terms of the Deed of Trust, the terms of this
Note shall govern and prevail. In the event of any inconsistencies between any terms of this Note and the terms of the Purchase
Agreement relating to the Reduction and Offset Rights, the terms of the Purchase Agreement shall govern and prevail.


 






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(h) Amendment.
This Note and the Deed of Trust may be amended or modified in whole or in part only by an agreement in writing that is signed by
each Party.


 


(i) Further
Documents. Borrower agrees to reasonably cooperate with Lender and to execute further documents as required to further
the objectives of this Note and the Deed of Trust.


 


(j) Time
is of the Essence. Time is of the essence of this Note and the Deed of Trust.


 


(k) Execution.
This Note may be delivered by personal delivery, overnight mail, electronically or some combination thereof, whether in the form
of a photocopy, facsimile, or scanned document, each of which shall have the same legal force and effect as delivery of an original.


 


(l) Governing
Law. This Note, and the Deed of Trust to the fullest extent permitted by applicable law, shall be governed by and construed
in accordance with the laws of the State of Nebraska (including in respect of the statute of limitations or other limitations period
applicable to any state law claim, controversy or dispute) that apply to agreements made and performed entirely within the State
of Nebraska, without regard to the conflicts of law provisions thereof or of any other jurisdiction. In furtherance thereof, each
Party hereby (i) agrees and acknowledges that the application of the laws of the State of Nebraska is reasonable and appropriate
based upon each of their respective interests and contacts with the State of Nebraska, (ii) waives any right or interest in having
the laws of any other state, including specifically, state law regarding the statute of limitation or other limitations period,
apply to any state law claim, controversy or dispute which in any way arises out of or relates to this Note or the transactions
contemplated hereby.


 


(m) Submission
To Jurisdiction; Waiver of Jury Trial. 


 


(1) The
Parties hereby agree that any action seeking to enforce any provision of, or based on any matter arising out of or in connection
with this Note and, to the fullest extent permitted by applicable law, the Deed of Trust, or the transactions contemplated hereby
or thereby shall be exclusively brought in the courts in Douglas County, Nebraska, or, in the event (but only in the event) that
such court does not have subject matter jurisdiction over such action, the United States District Court of the District of Nebraska,
and that any cause of action arising out of this Note or, to the fullest extent permitted by applicable law, the Deed of Trust,
shall be deemed to have arisen from a transaction of business in the State of Nebraska, and each of the Parties hereby irrevocably
consents to the exclusive jurisdiction of such courts (and of the appropriate appellate courts therefrom) in any such action and
irrevocably waives, to the fullest extent permitted by law, any objection that it may now or hereafter have to the laying of the
venue of any such action in any such court or that any such action which is brought in any such court has been brought in an inconvenient
forum, and the Parties irrevocably agree that all claims with respect to such action shall be heard and determined exclusively
in such court. Process in any such action may be served on any Party anywhere in the world, whether within or without the jurisdiction
of such court. Without limiting the foregoing, each Party agrees that delivery of notice to such Party as provided in Section 5(a)
shall be deemed effective service of process on such Party; provided, however, notwithstanding anything contained
herein, the foregoing service of process will only be deemed effective if all copy party(ies) designated in Section 5(a) for the
Party being served also receive such notice.


 






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(2) EACH
PARTY ACKNOWLEDGES AND AGREES THAT ANY CONTROVERSY WHICH MAY ARISE UNDER THIS NOTE AND THE DEED OF TRUST IS LIKELY TO INVOLVE COMPLICATED
AND DIFFICULT ISSUES AND, THEREFORE, EACH PARTY IRREVOCABLY AND UNCONDITIONALLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE
LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY ACTION ARISING OUT OF OR RELATING TO THIS NOTE AND/OR THE DEED
OF TRUST OR ANY OF THE TRANSACTIONS CONTEMPLATED HEREBY. EACH PARTY CERTIFIES AND ACKNOWLEDGES THAT: (I) NO REPRESENTATIVE OF ANY
OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT SEEK TO ENFORCE THE FOREGOING WAIVER IN THE
EVENT OF ANY SUCH ACTION; (II) SUCH PARTY HAS CONSIDERED THE IMPLICATIONS OF THIS WAIVER; (III) SUCH PARTY MAKES THIS WAIVER VOLUNTARILY;
AND (IV) SUCH PARTY HAS BEEN INDUCED TO ENTER INTO THIS NOTE AND THE DEED OF TRUST BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND
CERTIFICATIONS IN THIS SECTION.


 


A CREDIT AGREEMENT MUST
BE IN WRITING TO BE ENFORCEABLE UNDER NEBRASKA LAW. TO PROTECT YOU AND US FROM ANY MISUNDERSTANDINGS OR DISAPPOINTMENTS, ANY CONTRACT,
PROMISE, UNDERTAKING, OR OFFER TO FOREBEAR REPAYMENT OF MONEY OR TO MAKE ANY OTHER FINANCIAL ACCOMMODATION IN CONNECTION WITH THIS
LOAN OF MONEY OR GRANT OR EXTENSION OF CREDIT, OR ANY AMENDMENT OF, CANCELLATION OF, WAIVER OF, OR SUBSTITUTION FOR ANY OR ALL
OF THE TERMS OR PROVISIONS OF ANY INSTRUMENT OR DOCUMENT EXECUTED IN CONNECTION WITH THIS LOAN OF MONEY OR GRANT OR EXTENSION OF
CREDIT, MUST BE IN WRITING TO BE EFFECTIVE.


 


[Execution Page Follows]


 






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IN WITNESS WHEREOF,
Borrower has signed this Note in favor of Lender as of the date first written above.


 


	BORROWER:	PACIFIC AURORA, LLC, 
	 	a Delaware limited liability company


 


	 	By:	/s/ Carl Smith
	 	Name: 	Carl Smith
	 	Title:	Chief Financial Officer


 


 


[Execution Page of $7,920,000 Secured Promissory Note (Non-Negotiable)]