Document:

Exhibit 10.3

 

EXECUTION COPY

 

CONFIDENTIAL

 

THIRD AMENDMENT TO MEMBERSHIP INTEREST
PURCHASE AGREEMENT

 

This THIRD AMENDMENT
TO MEMBERSHIP INTEREST PURCHASE AGREEMENT (this “Amendment”), dated as of April 15, 2020, is made and entered
into by and among PACIFIC ETHANOL CENTRAL, LLC, a Delaware limited liability company (the “Seller”), PACIFIC
AURORA, LLC, a Delaware limited liability company (the “Company”), and AURORA COOPERATIVE ELEVATOR COMPANY,
a Nebraska cooperative company (“Buyer”). Seller, the Company and Buyer are sometimes referred to herein, individually,
as a “Party” and, collectively, as the “Parties”.

 

RECITALS

 

WHEREAS, the Parties
entered into that certain Membership Interest Purchase Agreement dated as of February 28, 2020, that certain First Amendment to
Membership Interest Purchase Agreement dated as of March 17, 2020, and that certain Second Amendment to Membership Interest Purchase
Agreement dated as of March 31, 2020 (as amended, the “Agreement”), pursuant to which Buyer will purchase from
Seller, and Seller will sell to Buyer, all of the Company Interests, subject to and in accordance with the terms of the Agreement;
and

 

WHEREAS, the Parties
now desire to amend the Agreement with respect to the Closing.

 

NOW THEREFORE, in consideration
of the premises and the mutual promises herein made, and in consideration of the representations, warranties, and covenants herein
contained, the Parties hereby agree as follows:

 

1. Definitions.
Except as otherwise expressly provided herein, all capitalized terms used in this Amendment and not defined herein shall have the
respective meanings ascribed thereto in the Agreement.

 

2. Amendment to
Agreement. The Agreement is hereby amended as follows:

 

(A) Amendments
to Article I (Definitions) – New Definitions. Article I of the Agreement is amended by adding in the appropriate alphabetical
order the following definitions in their entirety to read as follows:

 

“‘Environmental
Indemnity’ has the meaning set forth in Section 10.2(a).

 

“‘ERI’
means ERI Solutions, LLC.

 

“‘ERI
SOWs’ means (a) that certain Statement of Work to the Master Agreement for Services dated April 15, 2020 by and between
Buyer and ERI with respect to the west ethanol production facilities at the Aurora Facilities; and (b) that certain Statement of
Work to the Master Agreement for Services dated April 15, 2020 by and between Buyer and ERI with respect to the east ethanol production
facilities at the Aurora Facilities.

 

“‘FCC’
means the United States Federal Communications Commission.”

 

     

     

    

 

“‘FCC
Indemnity’ has the meaning set forth in Section 10.2(a).

 

“‘FCC
Violations’ has the meaning set forth in Section 10.2(a).

 

“‘Pekin
Facility’ has the meaning set forth in Section 6.15.

 

“‘Reference
Price’ has the meaning set forth in Section 6.15.

 

“‘Repair
Indemnity’ has meaning set forth in Section 10.2(a).

 

“‘Phase
II Report’ means that certain draft Phase II Environmental Site Assessment dated April 10, 2020, prepared by Pinnacle
Engineering, Inc. as Pinnacle Project EM20202009.

 

“‘Special
Indemnities’ means the (a) FCC Indemnity, (b) Environmental Indemnity, (c) Repair Indemnity, (d) Syngenta Indemnity,
and (e) Title Indemnity.”

 

“‘Title
Indemnity’ has meaning set forth in Section 10.2(a).

 

(B) Amendments
to Article I (Definitions) – Amended Definitions. Article I of the Agreement is further amended as follows:

 

(1) Seller
Negotiable Note. The definition of “Seller Negotiable Note” is hereby amended by deleting “7.5%” and
replacing “5.0%” in substitution therefor.

 

(2) Seller
Non-Negotiable Note. The definition of “Seller Non-Negotiable Note” is hereby amended by deleting “7.5%”
and replacing “4.5%” in substitution therefor.

 

(C) Section
6.9 (Reduction of Railcar Fleet). Section 6.9 of the Agreement is hereby amended and restated in its entirety to read as follows:

 

“6.9
Reduction of Railcar Fleet. During the Interim Period and after Closing, the Parties agree to use commercially reasonable
efforts to enter into amendments to the leases or other Contracts for the Railcar Fleet to reduce the number of railroad cars in
the Railcar Fleet to no more than 200 cars, which shall include all 100 J cars available from the Railcar Fleet, and obtain any
necessary Third Party Consents with respect to such amendments and any required assignment of such leases or other Contract to
Company after Closing.”

 

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(D) Section
6.15 (Non-Compliant Ethanol). Section 6.15 of the Agreement is hereby amended and restated in its entirety to read as follows:

 

“6.15
Non-Compliant Ethanol. Seller shall (a) not permit, and shall cause Parent to not permit, Kinergy to (i) exercise any put-back,
offset or repurchase rights with respect to any Non-Compliant Ethanol acquired by Kinergy pursuant to the Ethanol Marketing Agreement
prior to the date of this Agreement, or (ii) otherwise cause any such Non-Compliant Ethanol to be transferred to the Company
or any Company Subsidiary, and (b) cause Parent to cause Kinergy to purchase all Non-Compliant Ethanol not previously paid for
by Kinergy prior to the date hereof, at the Reference Price (as defined below) determined as of the Business Day prior to the Closing
Date (the “Non-Compliant Ethanol Purchase Price”). Payment for the Non-Compliant Ethanol so purchased shall
be reflected in the Closing Cash Payment Amount. The portion of Non-Compliant Ethanol stored in certain of the Railcar Fleet located
at the Aurora Facility and Parent’s ethanol facility located in Pekin, Illinois (the “Pekin Facility”)
and purchased by Kinergy pursuant to the foregoing may remain stored such railcars at the Aurora Facility or the Pekin Facility,
as the case may be, at no cost or expense to Kinergy; provided, however, Kingery shall remove such Non-Compliant
Ethanol from the Aurora Facility no later than thirty (30) days after written notice from the Company directing such removal, and
return all railcars being used to store the Non-Compliant Ethanol to the Company promptly thereafter. Further, no portion of the
Non-Compliant Ethanol may be blended at the Aurora Facility at any time unless Company and its Subsidiaries, in their sole and
absolute discretion, provide written consent to permit such blending to occur. At any time that Kinergy removes any Non-Compliant
Ethanol from the Aurora Facility or the Pekin Facility (whether stored in the Railcar Fleet or the storage tank(s) at the Pekin
Facility), if the Reference Price determined as of the Business Day prior to such removal is higher than the Non-Compliant Ethanol
Purchase Price, then Parent shall cause Kinergy to remit to the Company, within five (5) Business Days after such removal an amount
equal to 50% of the product of (A x B), where A is equal to such Reference Price minus the Non-Compliant Purchase
Price, and B is equal to the total number of gallons of Non-Compliant Ethanol removed from the Aurora Facility or the Pekin Facility.
For purposes of the foregoing, the term “Reference Price” means the greater of (y) the OPIS NE ethanol posting
for ethanol meeting the specifications set forth in Exhibit C FOB the Aurora Facility, and (z) the average of the OPIS NE
ethanol posting for ethanol meeting the specifications set forth in Exhibit C FOB the Aurora Facility for the ten (10)
prior Business Days.”

 

(E) Section
7.1(i) (Closing Deliverables of Seller). Section 7.1(i) of the Agreement is hereby amended and restated in its entirety to
read as follows:

 

“Intentionally
omitted.”

 

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(F) Section
10.2 (Indemnification Provisions for Benefit of Buyer). Section 10.2 of the Agreement is hereby amended and restated in its
entirety to read as follows:

 

“10.2
Indemnification Provisions for Benefit of Buyer.

 

(a) Subject to
the terms and conditions of this Article 10, from and after the Closing, Seller will indemnify and hold harmless Buyer,
Company, each Company Subsidiary and their respective successors and assigns (the “Buyer Indemnitees”) from
and against (i) any Losses that any Buyer Indemnitee incurs (provided that an indemnification claim with respect to such Losses
is made pursuant to this Article 10 prior to the end of any applicable survival period) resulting from or caused by (A)
any breach or inaccuracy of any representation or warranty made by Seller in Article 3 or Article 4 or in any exhibits
attached hereto, and (B) any breach of any covenant or agreement of Seller in this Agreement or any pre-Closing covenant or agreement
of the Company, (ii) any Transaction Expenses to the extent not paid in full on or prior to the Closing Date; (iii) 73.93% of any
amount paid by the Company to Syngenta in excess of $900,000 up to a maximum of $1,800,000 with respect to the Syngenta Payment
Demand (the “Syngenta Indemnity”); (iv) without limiting Seller’s obligations under Section 10.2(a)(i)(A)
but notwithstanding anything to the contrary in this Agreement, any Losses that any Buyer Indemnitee incurs resulting from any
violation existing at Closing of applicable Laws governing or relating to any radio license issued by the FCC and held by the Company
or any Company Subsidiary or used in connection with the operation of the Business (the “FCC Violations”), including
without limitation, (A) all out-of-pocket costs and expenses and (B) fines, penalties or other monetary assessments imposed by
the FCC on any Buyer Indemnitee as a result of any and all FCC Violations (the “FCC Indemnity”); (v) without
limiting Seller’s obligations under Section 10.2(a)(i)(A) but notwithstanding anything to the contrary in this Agreement,
any Losses that any Buyer Indemnitee incurs relating to the (A) remediation of the soil contamination and neutralization of stormwater
pond described in the Phase II Report and (B) restoration of the affected soil and stormwater pond located on the Owned Real Property
to their uncontaminated condition, including without limitation, (1) all out-of-pocket costs and expenses and (2) any fines, penalties
or other monetary assessments imposed upon any Buyer Indemnitee in connection therewith (the “Environmental Indemnity”);
(vi) without limiting Seller’s obligations under Section 10.2(a)(i)(A) but notwithstanding anything to the contrary
in this Agreement, any Losses that any Buyer Indemnitee incurs in connection with performing or causing to be performed all tank,
vessel and pipe inspections and repairs set forth in the ERI SOWs relating solely to the matters described in Items 5, 6, 7 and
8 of Schedule 4.7(a) (the “Repair Indemnity”); and (vii) without limiting Seller’s obligations
under Section 10.2(a)(i)(A) but notwithstanding anything to the contrary in this Agreement, any Losses that any Buyer Indemnitee
incurs resulting from any Lien filed or recorded against the Owned Real Property or Leased Real Property at any time after March
11, 2020 (even if such filing or recording occurs after Closing) that relates to actions or inactions of, or are otherwise caused
by, the Company or any Company Subsidiary prior to Closing (the “Gap Liens”), including without limitation,
any out-of-pockets costs and expenses incurred by any Buyer Indemnitee (A) to remove or cause the removal of such Gap Lien(s) or
(B) under any indemnity obligations relating to such Gap Liens(s) owing by any Buyer Indemnitee to any title company insuring all
or a portion of the Owned Real Property or the Leased Real Property (the “Title Indemnity”).

 

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(b) With respect
to the matters described in Section 10.2(a), Seller will have no liability with respect to such matters until Buyer Indemnitees
have incurred aggregate Losses by reason of all such breaches in excess of $250,000 (the “Deductible”), after
which point Seller will be obligated to indemnify Buyer Indemnitees from and against all indemnifiable Losses exceeding the Deductible;
provided, however, that the foregoing limitation shall not apply to any indemnifiable Losses resulting from (i) breaches
of the Fundamental Representations made by Company or Seller, (ii) any of the Special Indemnities, or (iii) for fraud or willful
misconduct.

 

(c) The aggregate
maximum liability of Seller with respect to the matters described in Sections 10.2(a) shall in no event exceed $7,920,000.00
(the “Indemnity Cap”); provided, however, that any indemnifiable Losses resulting from breaches
of the Fundamental Representations or for fraud or willful misconduct shall not be subject to the Indemnity Cap.

 

(d) For purposes
of this Article 10, Losses shall be determined without regard to any materiality, Material Adverse Effect or other similar
qualification contained in or otherwise applicable to the representations or warranties in this Agreement. The inaccuracy or breach
of any representation or warranty in this Agreement (as opposed to the calculation of Losses) shall be determined with regard to
all materiality, Material Adverse Effect and other similar qualification contained in or otherwise applicable to such representation
or warranty. In no event shall (i) Seller be liable for any Losses in respect of any inaccuracy or breach of any representation
or warranty hereunder to the extent such inaccuracy or breach is attributable to (A) fraud, gross negligence or willful misconduct
on the part of Buyer, (B) a violation of Law by Buyer or (C) any breach or misrepresentation by Buyer under any Affiliate Agreement,
or (ii) Buyer be liable for any Losses in respect of any inaccuracy or breach of any representation or warranty hereunder to the
extent such inaccuracy or breach is attributable to (A) fraud, gross negligence or willful misconduct on the part of Seller, (B)
a violation of Law by Seller or (C) any breach or misrepresentation by Seller under the Company Operating Agreement or by Seller
or Company under any Affiliate Agreement.

 

(e) Notwithstanding
anything contained in this Agreement to the contrary, for any indemnification to which Buyer is entitled under this Agreement,
Buyer’s sole and exclusive remedy for the recoupment of all or any portion of its indemnifiable Losses it may suffer shall
be through a reduction in the principal amount outstanding under the Seller Non-Negotiable Note; provided, however,
that any indemnifiable Losses resulting from breaches of the Fundamental Representations or for fraud or willful misconduct shall
not be subject to the limitations of this Section 10.2(e). The reduction of the principal amount of the Seller Non-Negotiable
Note shall affect the timing and amount of payments required under the Seller Non-Negotiable Note in the same manner as if Buyer
had made a permitted prepayment (without premium, interest or penalty) thereunder. In the event of a reduction in the principal
amount of the Seller Non-Negotiable Note as a result of this Section 10.2(e), Seller and Buyer shall execute an amendment
or supplement to the Seller Non-Negotiable Note to decrease the principal amount thereof; provided, however, no failure
of Seller to deliver such amendment or supplement shall affect the validity of the reduction resulting from Buyer’s exercise
of its recoupment rights.”

 

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(G) Amended
and Restated Disclosure Schedules. The Agreement is amended by deleting in its entirety the Disclosure Schedules attached thereto
and replacing the same with the Amended and Restated Disclosure Schedules attached hereto.

 

3. FCC Violations.
Notwithstanding anything to the contrary in the Agreement or this Amendment, Seller shall take any and all actions necessary to
remedy all FCC Violations, including without limitation, (a) submitting all required applications to transfer control of the underlying
radio licenses issued by the FCC and held by the Company or any Company Subsidiary or used in connection with the operation of
the Business, (b) filing all required waiver requests with respect to the FCC Violations, and (c) filing all required notifications
with respect to the (i) consummation of the transactions giving rise to the FCC Violations; and (ii) Company Subsidiaries’
prior name changes. The foregoing actions shall be taken as soon as reasonably practicable and Seller shall (x) provide drafts
of all such applications, requests, notifications and other documents to be submitted to the FCC in connection therewith to Buyer
prior to such submission, (y) obtain Buyer’s approval thereof, and (z) provide copies of all such applications, requests,
notifications and other documents submitted to the FCC to Buyer immediately upon submission thereof.

 

4. Seller’s
Obligation to Cooperate and Assist. Notwithstanding anything to the contrary in the Agreement or this Amendment, Seller shall,
upon request by any Buyer Indemnitee, cooperate with and assist, at Seller’s sole cost and expense, all Buyer Indemnitees
and such parties’ agents, employees, officers, consultants, attorneys and other professionals with respect to all actions
necessary to (a) remedy the FCC Violations, (b) remediate the contamination of the soil and neutralize the stormwater pond located
on the Owned Real Property, as described in the Phase II Report, and restore the conditions thereof, and (c) remove the Gap Liens
from the Owned Real Property or Leased Real Property.

 

5. References to
Agreement and Disclosure Schedules.

 

(a) All references
in the Agreement to “this Agreement” shall be deemed to refer to the Agreement as amended hereby, and any and all references
in any of the Ancillary Agreements to the Agreement shall be deemed to refer to the Agreement as amended hereby; provided,
however, references to “the date of this Agreement”, “the date hereof” and similar references shall
continue to refer to the original date of the Agreement and not to the date of this Amendment.

 

(b) All references
in the Agreement to “Schedule” and “Disclosure Schedules” shall be deemed to refer to the Amended and Restated
Disclosure Schedules attached to this Amendment.

 

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6. Ratification;
Continuing Effect of the Agreement. This Amendment shall only amend and modify the Agreement to the extent specifically provided
herein. In all other respects, the Agreement is hereby ratified and confirmed and remains in full force and effect and shall not
be altered by any provisions herein contained. In the event of any conflict or inconsistency between the provisions of the Agreement
and the provisions of this Amendment, the provisions of this Amendment shall control.

 

7. Representations
and Warranties. Each Party hereto represents and warrants that (a) it is duly organized, validly existing and in good standing
under the laws of the jurisdiction of its organization; (b) it has full power and authority to enter into this Amendment and to
perform its obligations hereunder; (c) the execution and delivery of this Amendment by it and the performance by it of its obligations
hereunder have been duly and validly authorized by all necessary action; and (d) it has not relied on any representation, warranty,
covenant, understanding, agreement, written or oral, discussions, or negotiation not expressly contained herein or in the Agreement
in entering into this Amendment.

 

8. No Third-Party
Beneficiaries. Except as expressly provided herein, this Amendment shall not confer any rights or remedies upon any Person
other than the Parties and their respective successors and permitted assigns.

 

9. Entire Agreement.
This Amendment and the Agreement (including the documents and the instruments referred to therein and attached thereto) shall together
constitutes the entire agreement among the Parties and shall supersede any prior understandings, agreements, or representations
by or among the Parties, written or oral, to the extent they relate in any way to the subject matter hereof.

 

10. Successors and
Assigns. Subject to Section 13.3 of the Agreement, this Amendment shall be binding upon, inure to the benefit of and be enforceable
by the Parties and their respective successors and permitted assigns.

 

11. Counterparts.
This Amendment may be executed in any number of counterparts, and by the different Parties in separate counterparts, each of which
when executed shall be deemed an original, but all of which shall be considered one and the same agreement, and shall become effective
when each Party has received counterparts signed by each of the other Parties, it being understood and agreed that delivery of
a signed counterpart signature page to this Amendment by facsimile transmission, by electronic mail in portable document format
(“.pdf”) form, or by any other electronic means intended to preserve the original graphic and pictorial appearance
of a document shall constitute valid and sufficient delivery thereof.

 

12. Headings.
The title of and the section and paragraph headings contained in this Amendment are inserted for convenience only and shall not
affect in any way the meaning or interpretation of any of the terms or provisions of this Amendment.

 

13. Further Amendments;
Waiver. Subject to applicable Law, this Amendment may not be amended, modified or supplemented except by an instrument in writing
signed by the Parties. Any agreement on the part of a Party to any waiver of any of the provisions of this Amendment shall be valid
only if set forth in an instrument in writing signed on behalf of such Party. The failure of any Party to this Amendment to assert
any of its rights under this Amendment or otherwise shall not constitute a waiver of such rights, nor shall any single or partial
exercise of any such rights preclude any other or further exercise thereof.

 

14. Severability.
If any term, provision, covenant or restriction of this Amendment is held by a court of competent jurisdiction or other authority
to be invalid, void, unenforceable or against its regulatory policy, the remainder of the terms, provisions, covenants and restrictions
of this Amendment shall nevertheless remain in full force and effect and shall in no way be affected, impaired or invalidated.
Upon such determination that any term, provision, covenant or restriction is invalid, illegal, void, unenforceable or against regulatory
policy, the Parties shall negotiate in good faith to modify this Amendment so as to effect the original intent of the Parties as
closely as possible in an acceptable manner in order that the transactions contemplated by this Amendment are consummated as originally
contemplated to the greatest extent possible.

 

15. Construction.
The Parties have participated jointly in the negotiation and drafting of this Amendment. In the event an ambiguity or question
of intent or interpretation arises, this Amendment shall be construed as if drafted jointly by the Parties and no presumption or
burden of proof shall arise favoring or disfavoring any Party by virtue of the authorship of any of the provisions of this Amendment.

 

[Signature Page Follows]

 

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IN WITNESS WHEREOF,
the Parties have executed this Third Amendment to Membership Interest Purchase Agreement on the date first above written.

 

	 	SELLER:
	 	 
	 	PACIFIC ETHANOL CENTRAL, LLC,
	 	a Delaware limited liability company
	 	 	 
	 	By:	/s/ Bryon T. McGregor
	 	Name:	Bryon T. McGregor
	 	Title	Chief Financial Officer
	 	 	 
	 	COMPANY:
	 	 
	 	PACIFIC AURORA, LLC,
	 	a Delaware limited liability company
	 	 	 
	 	By:	/s/ Bryon T. McGregor
	 	Name:	Bryon T. McGregor
	 	Title	Chief Financial Officer
	 	 	 
	 	BUYER:
	 	 
	 	AURORA COOPERATIVE ELEVATOR COMPANY, a Nebraska cooperative corporation
	 	 	 
	 	By:	/s/ Christopher J. Vincent
	 	Name:	Christopher J. Vincent
	 	Title:	Chief Executive Officer

 

Signature
Page To Third Amendment To Membership Interest Purchase AgreementExhibit 10.4

 

SECURED PROMISSORY NOTE

(Negotiable)

 

	$8,580,000.00	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 Eight Million, Five Hundred Eighty Thousand and 00/100 Dollars ($8,580,000.00) (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; Negotiable Instrument. 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. It is the express intent and agreement of the Parties
that this Note constitutes a negotiable instrument under applicable law, including Section 3-106(a) of the Uniform Commercial Code
as adopted by the State of Nebraska.

 

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 5.00% (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 June
1, 2021 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 $429,000.00.

 

(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 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

 

(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) Lender may assign or otherwise
transfer this Note, and its rights or obligations hereunder, at any time without notice to or the consent of Borrower (other than
to a Prohibited Person (as defined below)) and, upon any such assignment or transfer, 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. “Prohibited Person” means any of the following: (a) a person or entity owned or controlled,
directly or indirectly, by a person or entity with whom a citizen of the United States is prohibited from engaging in transactions
by any trade embargo, economic sanction, or other prohibition of U.S. law, regulation, or executive order; or (b) any person or
entity (i) owning, directly or indirectly, more than 10% of the voting securities or other ownership interests in, or (ii) having,
directly or indirectly, the power to direct or cause the direction of the management and policies of, whether through the ownership
of voting securities, by contract, or otherwise, any ethanol plant or agricultural cooperative.

 

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(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 and the Deed of Trust 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. It is the intent of the Parties hereto that this Note, once
issued in favor of Lender and the Deed of Trust once recorded, constitute separate and independent obligations of Borrower without
regard to the Purchase Agreement and this Note and the Deed of Trust shall be enforceable against Borrower in accordance with their
respective terms and shall not be subject to any claims or defenses by Borrower arising out of or relating to the Purchase Agreement,
including any claims or defenses of offset, credit or reduction liability based on any breach by PEC under the Purchase Agreements.

 

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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 $8,580,000 Secured Promissory Note (Negotiable)]

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