Document:

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)]Exhibit 10.6

 

Execution Version

 

ASSIGNMENT
OF Notes and Deeds of trust

 

THIS ASSIGNMENT OF
NOTES AND DEEDS OF TRUST (this “Assignment”) is made and entered into as April 15, 2020, by and among PACIFIC
ETHANOL CENTRAL, LLC , a Delaware limited liability company (“PEC”), PACIFIC AURORA, LLC, a Delaware limited
liability company (“PAL”), and COBANK, ACB, a federally-chartered instrumentality of the United States, as administrative
agent (in such capacity, “Administrative Agent”) for the Pekin Lenders (defined below) and the ICP Lender (defined
below).

 

R E C I
T A L S:

 

A. WHEREAS, PACIFIC
ETHANOL PEKIN, LLC, a Delaware limited liability company (“Pekin”), COMPEER FINANCIAL, PCA, a federally-chartered
instrumentality of the United States, successor by merger to 1st Farm Credit Services, PCA, as a Lender, and COBANK, ACB, a federally-chartered
instrumentality of the United States, as Agent, are parties to a Credit Agreement dated as of December 15, 2016, (as amended, restated,
supplemented or otherwise modified from time to time, the “Pekin Credit Agreement”) pursuant to which the Pekin
Lenders have made and may make advances and extend other financial accommodations to Pekin (the “Pekin Loan”).
The lenders from time to time as parties to the Pekin Credit Agreement are referred to herein as the “Pekin Lenders.”

 

B. WHEREAS, ILLINOIS
CORN PROCESSING, LLC, a Delaware limited liability company (“ICP” and together with Pekin collectively, the
“Borrowers”), COMPEER FINANCIAL, PCA, a federally-chartered instrumentality of the United States, as a Lender,
and COBANK, ACB, a federally-chartered instrumentality of the United States, as Cash Management Provider and Agent, are parties
to a Credit Agreement dated as of September 15, 2017 (as amended, restated, supplemented or otherwise modified from time to time,
including as of the date hereof, the “ICP Credit Agreement” and together with the Pekin Credit Agreement, the
“Credit Agreements”) pursuant to which the ICP Lenders have made and may make advances and extend other financial
accommodations to ICP (the “ICP Loan” and together with the Pekin Loan, the “Loans”). The
lenders from time to time as parties to the ICP Credit Agreement are referred to herein as the “ICP Lenders,”
and the Pekin Lenders and the ICP Lenders are sometime referred to herein as the “Lenders.”

 

C. WHEREAS, to secure
the satisfaction of the Borrowers’ obligations under the Credit Agreements, PEC pledged to the Administrative Agent, for
the benefit of the Lenders, the entirety of its issued and outstanding membership interests (the “Pledged Equity”)
in Pacific Aurora, LLC, a Delaware limited liability company (“PAL”)

 

D. WHEREAS, in connection
with that certain Membership Interest Purchase Agreement dated as of February 28, 2020 (as amended, restated, supplemented or otherwise
modified from time to time, “Purchase Agreement”), PEC agreed to sell the entirety of the Pledged Equity to
Aurora Cooperative Elevator Company, a Nebraska cooperative company.

 

E. WHEREAS, $16,500,000
of the purchase price under the Purchase Agreement is in the form of two promissory notes: (i) in the amount of $7,920,000 (the
“Non-Negotiable Note,” a copy of which is attached here to as Exhibit A) and (ii) in the amount of $8,580,000
(the “Negotiable Note” a copy of which is attached here to as Exhibit B. collectively, the “Notes”).

 

F. WHEREAS, as security
for payment of the Notes, PAL has granted a lien on the real property of PAL in the form of two Deeds of Trust (the “Deeds
of Trust”).

 

     

     

    

 

G. WHEREAS, a condition
precedent to Administrative Agent’s agreement to release its security interest in the Pledged Equity,

 

(i) PEC is
required to execute and deliver this Assignment which (a) assigns to the Administrative Agent, for the benefit of the Lenders,
all of PEC’s rights under the Notes and the Deeds of Trust, and (a) directs PAL to make payments due under the Notes directly
to the Administrative Agent, for the benefit of the Lenders, and

 

(ii) PAL
is required to execute and deliver (a) this Assignment, acknowledging such assignment and payment direction, and (b) each of the
collateral assignments of the Deeds of Trust in the forms attached hereto as Exhibit C and Exhibit D (together, the
“Deeds of Trust Collateral Assignments”).

 

NOW, THEREFORE, in
consideration of the Administrative Agent agreeing to release its security interests in the Pledged Equity and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:

 

1. Definitions.
Capitalized terms used herein but not otherwise defined shall have the meanings given to such terms in the Credit Agreements. Notwithstanding
the foregoing, the term “Event of Default” shall mean and Event of Default under either of the Credit Agreements (as
such term is defined therein) or any failure of PEC or PAL to satisfy its respective obligations hereunder.

 

2. Assignment
and Direction of Payment.

 

(a) PEC
hereby assigns, sells, conveys, sets over and otherwise transfers to Administrative Agent, for the benefit of the Lenders, the
Notes and the Deeds of Trust, including without limitation, all of PEC’s rights in and to the principal and interest payments
payable thereunder, subject to the terms and provisions hereof. This Assignment is and for all purposes shall be a present assignment
vesting in Administrative Agent all of PEC’s right, title and interest in, to and under the Notes and the Deeds of Trust,
upon and subject to the terms and provisions hereof. 

 

(b) PEC
hereby directs, and PAL hereby acknowledges, that all payments due to PEC under the Notes and the Deeds of Trust, whether scheduled
or due upon maturity or acceleration, shall be paid directly to the Administrative Agent. The Administrative Agent shall apply
eighty percent (80%) of each payment under the Notes (whether principal, interest or otherwise) as repayment of the Loans, and
so long as no Event of Default has occurred and is continuing, the Administrative Agent shall transfer the remaining twenty percent
(20%) of each such payment to PEC . PAL specifically acknowledges and agrees that if it makes any payment, directly or indirectly,
to PEC pursuant to either of the Notes or the Deeds of Trust in violation of this Agreement, PAL shall continue to be liable to
PEC for such payment unless and until PEC transfers such payment to Administrative Agent. 

 

(c) Upon
repayment in full of the Paydown Amount, or upon the earlier payment in full by PAL of the outstanding principal of the Notes and
all accrued but unpaid interest thereon, Administrative Agent shall reassign (the “Reassignment”) to PEC the
Notes and the Deeds of Trust assigned to Administrative Agent hereby; provided, however, that all reasonable out-of-pocket costs
and expenses incurred by Administrative Agent in the ordinary course of business as a result of or in connection with the Reassignment
shall be reimbursed to Administrative Agent by PEC; and further provided that the Reassignment shall be made without recourse,
warranty or any other obligation to or liability incurred by Administrative Agent, other than to the extent of gross negligence
or willful misconduct on the part of the Administrative Agent as such is determined by a final, non-appealable judgment by a court
of competent jurisdiction . The Reassignment shall be effectuated by execution of documents reasonably acceptable to Administrative
Agent and PEC in both form and substance.

 

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3. Delivery
of Notes. As a condition to effectiveness of this Assignment, within three (3) Business Days following the date hereof, the
executed original Notes shall be delivered to Administrative Agent and endorsed to Administrative Agent in a manner reasonably
acceptable to Administrative Agent. Concurrently with the Reassignment, the Note shall be returned to PEC with an endorsement by
Administrative Agent to PEC without recourse, other than to the extent of gross negligence or willful misconduct on the part of
the Administrative Agent as such is determined by a final, non-appealable judgment by a court of competent jurisdiction; provided,
however, that Administrative Agent shall not be responsible for returning the Note if Administrative Agent has transferred such
Note to a third party pursuant to Administrative Agent’s remedies hereunder following an Event of Default.

 

4. Delivery
of Collateral Assignment. As a condition to effectiveness of this Assignment, within three (3) Business Days following the
date hereof, the executed and notarized original Deeds of Trust Collateral Assignments shall be delivered to Administrative Agent.
PEC and PAL hereby authorize, instruct and direct the Administrative Agent to record each of the Deeds of Trust Collateral Assignments
with the office of the recorder of deeds for Hamilton County, Nebraska, or such other recording office as the Administrative Agent
shall deem appropriate and to take such other action as is necessary to perfect the security interest in the Deeds of Trust in
favor of the Administrative Agent. 

 

5. Representations
and Warranties. 

 

(a) PEC
hereby represents and warrants to Administrative Agent that:

 

(i) The
assignment of the Note made hereby is valid and enforceable and does not violate any provision of any mortgage, deed of trust,
security agreement, loan agreement or any other document or instrument of any kind executed by PEC, Pekin or ICP.

 

(ii) The
Notes and the Deeds of Trust are genuine, valid and legally enforceable in accordance with their terms. To PEC’s knowledge,
other than as set forth in the Purchase Agreement with respect to the Non-Negotiable Note, PAL does not have any claim, counterclaim,
right of offset, defense (including, without limitation, usury) or any other similar right with respect to or in connection with
any of their respective obligations under said Notes or the Deeds of Trust.

 

(iii) No
default exists by any party under the Notes or the Deeds of Trust nor does any circumstance exist that with the passage of time
or the giving of notice or both could become such a default.

 

(iv) PEC
owns and holds all right, title and interest in and to the Notes and the Deeds of Trust free and clear of any liens, security interest
or other encumbrances, other than a security interest in favor of Cortland Products Corp., as collateral agent, which security
interest is subordinated in favor of the Administrative Agent, and PEC has the absolute right and power to assign and transfer
such right, title and interest.

 

(v) The
Notes and the Deeds of Trust are in compliance with all applicable state laws, rules, regulations and other governmental requirements.

 

(b) PAL
hereby represents and warrants to Administrative Agent that:

 

(i) The
assignment of the Note made hereby is valid and enforceable. The Notes and the Deeds of Trust are genuine, valid and legally enforceable
in accordance with their terms. No default exists by PAL under the Notes or the Deeds of Trust nor does any circumstance exist
that with the passage of time or the giving of notice or both could become such a default. To PAL’s knowledge, no default
exists by PEC under the Notes or the Deeds of Trust nor does any circumstance exist that with the passage of time or the giving
of notice or both could become such a default.

 

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(ii) Other
than as set forth in the Purchase Agreement with respect to the Non-Negotiable Note PAL does not have any claim, counterclaim,
right of offset, defense (including, without limitation, usury) or any other similar right with respect to or in connection with
any of their respective obligations under said Notes or the Deeds of Trust.

 

6. Covenants.
PEC covenants and agrees, that so long as this Assignment is in effect:

 

(a) shall
use its best efforts to cause PAL to observe and perform all of the covenants, terms, conditions and agreements contained in the
Notes and the Deeds of Trust. Other than in connection with (i) the repayment in full of the Notes or (ii) the satisfaction of
the Paydown Amount, without the express written consent of Administrative Agent, PEC shall not release or excuse the liability
of any of the obligations under the Notes and the Deeds of Trust; 

 

(b) other
than a security interest in favor of Cortland Products Corp., as collateral agent, which security interest is subordinated in favor
of the Administrative Agent, has not and shall not make any other assignment of all or any part of their interest in, to or under
the Notes or the Deeds of Trust;

 

(c) other
than as set forth in Section 7(a) below, shall not alter, modify or change the terms and provisions of the Notes or the Deeds of
Trust, or give any consent or approval required or permitted under the Notes or the Deeds of Trust without the prior written consent
of Administrative Agent;

 

(d) shall
enforce the Notes and the Deeds of Trust and all rights and remedies thereunder in case of default thereunder; provided, however,
that PEC shall not exercise any of its rights and remedies under the Notes or the Deeds of Trust without first obtaining the prior
written consent of Administrative Agent;

 

(e) shall,
at its sole cost and expense, appear in and prosecute or defend, as the case may be, any and all actions and proceedings arising
under, relating to or in any manner connected with the Notes or the Deeds of Trust or its rights thereunder, and shall pay all
costs and expenses of Administrative Agent, including court costs and reasonable attorneys’ fees, in any such action or proceeding
in which Administrative Agent may appear;

 

(f) shall
give prompt notice to Administrative Agent of any notice of any default under or with respect to the Note;

 

(g) shall
provide written notice to the Administrative Agent promptly upon any change in the principal amount of the Non-Negotiable Note,
together with an explanation, calculation and appropriate documentation justifying the basis of such change.

 

    4

     

    

 

7. Provisions
Specific to Non-Negotiable Note. Administrative Agent acknowledges and agrees that:

 

(a) the
Non-Negotiable Note and the unpaid principal amount outstanding thereunder shall be subject to reduction from time to time in accordance
with the terms of Sections 2.5(c) and 10.2(e) of the Purchase Agreement, which are incorporated herein by this reference.

 

(b) the
Non-Negotiable Note is non-negotiable such that (A) other than to Administrative Agent as provided hereunder PEC may not assign
or otherwise transfer Non-Negotiable Note without the consent of PAL and (B) in the event that Administrative Agent exercises its
remedies hereunder or otherwise under the Credit Agreements and forecloses on the Non-Negotiable Note Administrative Agent may
not assign or otherwise transfer the Non-Negotiable Note without the consent of PAL. 

 

8. Remedies.
If an Event of Default occurs hereunder, Administrative Agent, at Administrative Agent’s option and sole discretion, may
(subject in all respects to the terms of Section 7 above) take any and all of the following actions:

 

(a) Exercise
any and all rights of collection, conversion or exchange, and any and all other rights, remedies, privileges and powers pertaining
or relating to the Notes or the Deeds of Trust which are available to PEC or Administrative Agent under this Assignment, under
the Notes, the Deeds of Trust or otherwise provided by law. 

 

(b) Negotiate
and retain the proceeds from the Notes or the Deeds of Trust and/or sell, assign and deliver the whole or, from time to time, any
part thereof at any broker’s board or at any private sale or public auction, with or without demand or advertisement of the
time or place of sale or adjournment thereof or otherwise, for cash, credit or other property, for such price and on such terms
as Administrative Agent, in its sole discretion, may determine, free from any right of equity or redemption on the part of PEC
(all said rights hereby being waived and released). Administrative Agent, without notice or publication, may (i) adjourn any
such sale or cause the same to be so adjourned from time to time, and (ii) make such sale or cause such sale to be made at
any time or place to which the same may be so adjourned.

 

(c) Exercise
any and all rights and remedies afforded to a secured party under the Uniform Commercial Code and any and all other applicable
provisions of law.

 

(d) Exercise
any and all rights and remedies afforded to Administrative Agent under the Credit Agreements.

 

Administrative Agent shall not incur any
liability as a result of the sale or negotiation of the Notes, the Deeds of Trust, or any part thereof, at any private, public
or other sale. PEC hereby waives any claims against Administrative Agent arising by reason of the fact that the price at which
any Note is sold at such a private sale may be less than the aggregate amount of the obligations, even if Administrative Agent
accepts the first offer received and does not offer the Notes or the Deeds of Trust to more than one possible purchaser. The net
proceeds of any amounts collected by virtue of the exercise by Administrative Agent of the remedies set forth hereunder may be
applied by Administrative Agent to the payment of the obligations under the Loans in any order thereof that Administrative Agent
may elect, with the balance, if any, returned to PEC.

 

9. Rights
and Remedies. The rights and remedies of Administrative Agent hereunder and under the Credit Agreements shall be cumulative
and concurrent and may be pursued separately, successively or together, at the sole discretion of Administrative Agent, and may
be exercised as often as the occasion therefor may arise. The failure to exercise any such right or remedy shall in no event be
construed as a waiver or release thereof. 

 

    5

     

    

 

10. Stay
or Extension Laws. PEC covenants that it will not at any time claim, take, insist upon or invoke the benefit or advantage of
or from any law now or hereafter in force providing for the valuation or appraisement of the Notes or the Deeds of Trust prior
to any sale or sales thereof to be made pursuant to the provisions hereof or pursuant to the decree, judgment, or order of any
court of competent jurisdiction; nor, after such sale or sales, shall PEC claim or exercise any right under any statute now or
hereafter enacted by any state to redeem the property so sold or any part thereof, and PEC hereby expressly waives, on behalf of
itself and each and every person claiming by, through or under PEC, all benefit and advantage of any such law or laws, and PEC
covenants that it will not invoke or utilize any such law or laws or otherwise hinder, delay or impede the execution of any power,
right or remedy herein or hereby granted to Administrative Agent, but will authorize, allow and permit the execution of every such
power, right and remedy as though no such law or laws had been made or enacted.

 

11. Partial
Invalidity. The unenforceability or invalidity of any portion of any provision or provisions of this Assignment shall not render
any other portion of such provision or provisions herein contained unenforceable or invalid.

 

12. Successors
and Assigns. This Assignment shall be binding upon and shall inure to the benefit of PEC and Administrative Agent and their
respective successors, assigns and legal representatives.

 

13. Miscellaneous.

 

(a) Recitals.
The recitals set forth above are true and correct, and each recital is hereby incorporated into this Assignment by reference.

 

(b) Notices.
Except as otherwise specified herein, any notice, consent, request or other communication required or permitted to be given hereunder
shall be in writing, addressed to the other party as set forth below such party’s signature to this Assignment or below for
the Lender Parties (or to such other address or person as either party or person entitled to notice may by notice to the other
party specify), and shall be: (a) personally delivered; (b) delivered by Federal Express or other comparable overnight delivery
service; or (c) transmitted by United States certified mail, return receipt requested with postage prepaid.

 

	If to Administrative Agent:	CoBank, ACB
	 	6340 S. Fiddlers Green Grove
	 	Greenwood Village, Colorado 80111-1914
	 	Attention: Credit Information Services
	 	 
	 	With a copy to:
	 	Bryan Cave Leighton Paisner LLP
	 	161 North Clark, Suite 4300
	 	Chicago, IL 60601
	 	Attention: Eric S. Prezant, Esq.

 

    6

     

    

 

	If to the PEC:	Pacific Ethanol Central, LLC
	 	c/o Pacific Ethanol, Inc.
	 	400 Capitol Mall, Suite 2060
	 	Sacramento, California 95814
	 	Attn: Christopher W. Wright
	 	 
	 	With a copy to:
	 	Troutman Sanders
	 	5 Park Plaza, Suite 1400
	 	Irvine, CA 92614
	 	Attn: Larry Cerutti
	 	 
	If to the PAL:	Aurora Cooperative Elevator Company
	 	225 Q Street
	 	Aurora, NE 68818
	 	Attention: Kara J. Ronnau, Executive General Counsel
	 	 
	 	With a copy to:
	 	Kutak Rock LLP
	 	1650 Farnam Street
	 	Omaha, NE 68102
	 	Attention: Joel Wiegert and Lisa Peters

 

All such notices and
communications shall have been duly given and shall be effective: (i) when delivered; (ii) the Business Day following the day on
which the same has been delivered prepaid (or pursuant to an invoice arrangement) to Federal Express or other comparable overnight
delivery service; or (iii) the third Business Day following the day on which the same is sent by certified mail, postage prepaid.

 

(c) No
Oral Amendments. This Assignment may not be modified, amended, waived, extended, changed, discharged, revoked or terminated
orally or by any act or failure to act on the part of any party, but only by an agreement in writing signed by the party against
whom enforcement of any modification, amendment, waiver, extension, change, discharge, revocation or termination is sought.

 

(d) Counterparts;
Integration; Effectiveness. This Assignment and any amendments, waivers, consents or supplements 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 an original, but all of which counterparts together shall constitute but one agreement. This Assignment and the Deeds
of Trust Collateral Assignment constitute the entire contract among the parties with respect to the subject matter hereof and supersede
all previous agreements and understandings, oral or written, with respect thereto. Delivery of an executed counterpart of a signature
page to this Assignment by facsimile or in electronic (i.e., “pdf” or “tif”) format shall be effective
as delivery of a manually executed counterpart signature page.

 

    7

     

    

 

(e) Governing
Law; Jurisdiction; Etc.

 

(i) Governing
Law. The laws of the State of Colorado will govern this Assignment 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 Assignment and the transactions contemplated hereby
and thereby.

 

(ii) Submission
to Jurisdiction. Each of the parties hereto 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, in any way relating
to this Assignment or the transactions contemplated hereby, in any forum other than the courts of the State of Colorado sitting
in Denver County, and of the United States District Court of Colorado, 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 Colorado 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 will be conclusive
and may be enforced in other jurisdictions by suit on the judgment or in any other manner provided by law. 

 

(iii) Waiver
of Venue. Each of the parties hereto irrevocably and unconditionally waive, 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 Assignment in any such court referred to in Section 12 hereof. 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.

 

(iv) Service
of Process. Each of the parties hereto irrevocably consents to the service of process in the manner provided for notices in
Section 12 hereof and agrees that nothing herein will affect the right of any party hereto to serve process in any other manner
permitted by applicable law.

 

(v) Waiver
of Jury Trial. EACH OF THE PARTIES HERETO HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVES ANY RIGHT IT MAY HAVE TO A
TRIAL BY JURY IN RESPECT OF ANY LITIGATION BASED ON OR ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS ASSIGNMENT. THIS PROVISION
IS A MATERIAL INDUCEMENT FOR THE ADMINISTRATIVE AGENT ENTERING INTO THIS ASSIGNMENT.

 

14. Further
Assurances. PEC and PAL each for itself agree, upon Administrative Agent’s request from time to time, to execute and
deliver to Administrative Agent or any other party designated by Administrative Agent, any other agreements, notices or other documents
or instruments that Administrative Agent deems are reasonably necessary or appropriate to confirm unto Administrative Agent the
assignment hereunder of the Notes, the Deeds of Trust or to enable Administrative Agent to exercise the rights and remedies provided
herein or otherwise; provided that any such actions on the part of PAL shall be at the sole cost and expense of PEC.

 

[Signature Pages Follow]

 

    8

     

    

 

IN WITNESS WHEREOF,
the undersigned have executed this Assignment as of the date first written above.

 

	 	PACIFIC ETHANOL CENTRAL, LLC
	 	 	 
	 	By:	/s/ Bryon T. McGregor
	 	Name:	Bryon T. McGregor
	 	Title:	Chief Financial Officer
	 	 	 
	 	PACIFIC AURORA, LLC
	 	 	 
	 	By:	/s/ Carl R. Smith
	 	Name:	Carl Smith
	 	Title:	Chief Financial Officer
	 	 	 
	 	COBANK, ACB
	 	 	 
	 	By:	/s/ Janet Downs
	 	Name:	Janet Downs
	 	Title:	Vice President

 

Signature page to Assignment of Notes and
Deeds of Trust

  

     

     

    

 

Exhibit A

 

Non-Negotiable Note

 

     

     

    

 

Exhibit B

 

Negotiable Note

 

     

     

    

 

Exhibit C

 

Collateral Assignment of Deed of Trust

(Non-Negotiable Note)

 

     

     

    

 

Exhibit D

 

Collateral Assignment of Deed of Trust

(Negotiable Note)

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