Document:

bnft-ex45_258.htm

Exhibit 4.5

 

DESCRIPTION OF THE REGISTRANT’S SECURITIES

REGISTERED PURSUANT TO SECTION 12 OF THE

SECURITIES EXCHANGE ACT OF 1934

Our authorized capital stock consists of 50,000,000 shares of common stock, $0.001 par value per share, and 5,000,000 shares of undesignated preferred stock, par value $0.001 per share. The following description summarizes the material terms of our capital stock. Because it is only a summary, it does not contain all the information that may be important to you. For a complete description of our capital stock, you should refer to our restated certificate of incorporation, or our “restated certificate”, and our amended and restated bylaws, or our “restated bylaws”, which are included as exhibits to this Annual Report on Form 10-K, and to the provisions of applicable Delaware law.

Common Stock

As of December 31, 2019, there were 32,788,980 shares of our common stock outstanding and held by approximately 39 stockholders of record. Holders of our common stock are entitled to the following rights.

	
 
	
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Dividend Rights. Subject to preferences that may apply to any shares of preferred stock outstanding at the time, the holders of outstanding shares of our common stock are entitled to receive dividends out of funds legally available at the times and in the amounts that our board of directors may determine. All dividends are non-cumulative.

	
 
	
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Voting Rights. The holders of our common stock are entitled to one vote for each share of common stock held on all matters submitted to a vote of the stockholders, including the election of directors. Our restated certificate and restated bylaws do not provide for cumulative voting rights.

	
 
	
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No Preemptive or Similar Rights. The holders of our common stock have no preemptive, conversion, or subscription rights, and there are no redemption or sinking fund provisions applicable to our common stock.

	
 
	
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Right to Receive Liquidation Distributions. Upon our liquidation, dissolution or winding-up, the assets legally available for distribution to our stockholders would be distributable ratably among the holders of our common stock and any participating preferred stock outstanding at that time after payment of liquidation preferences, if any, on any outstanding shares of preferred stock and payment of other claims of creditors.

	
 
	
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Fully Paid and Non-Assessable. All of the outstanding shares of our common stock are, and the shares of our common stock that may be issued pursuant to an offering under this registration statement will be, fully paid and non-assessable. 

	
 
	
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Potential Adverse Effect of Future Preferred Stock. The rights, preferences and privileges of the holders of common stock are subject to, and might be adversely affected by, the rights of the holders of shares of any series of our preferred stock that we may designate and issue in the future.

 

 

Preferred Stock

Our board of directors is authorized, subject to limitations prescribed by Delaware law, to issue up to 5,000,000 shares of preferred stock in one or more series, to establish from time to time the number of shares to be included in each series, and to fix the designation, powers, preferences and rights of the shares of each series and any of its qualifications, limitations or restrictions, in each case without further action by our stockholders. Our board can also increase or decrease the number of shares of any series of preferred stock, but not below the number of shares of that series then outstanding unless approved by the affirmative vote of the holders of a majority of our capital stock entitled to vote, or such other vote as may be required by the certificate of designation establishing the series. Our board may authorize the issuance of preferred stock with voting or conversion rights that could adversely affect the voting power or other rights of the holders of our common stock. The issuance of preferred stock, while providing flexibility in connection with possible acquisitions and other corporate purposes, could, among other things, have the effect of delaying, deferring, or preventing a change in our control or the removal of management and might adversely affect the market price of our common stock and the voting and other rights of the holders of our common stock. As of December 31, 2019, no shares of our preferred stock were outstanding.

Stock Awards Available For Issuance

As of December 31, 2019, we had options and restricted stock units outstanding with respect to 2,177,002 shares of common stock, including restricted stock units with time-based vesting criteria and performance-based vesting criteria.

As of December 31, 2019, total stock awards, including restricted stock units and performance restricted stock units, to exchange or purchase a total of 3,301,461, shares of common stock remain available for future issuance under our stock plans.

Registration Rights

As of December 31, 2019, stockholders holding approximately 3,189,756 shares of our common stock had the right, subject to various conditions and limitations, to include their shares in registration statements relating to our securities. In connection with our IPO, we entered into a Second Amended and Restated Investors’ Rights Agreement, or the “Investor Rights Agreement”, with the Holders (as defined therein), which we subsequently amended in February 2015.  

Pursuant to the Investor Rights Agreement, as amended, certain Holders have the right, subject to various conditions and limitations, to include their shares in registration statements relating to our securities. The holders of at least 66 2/3% of the then outstanding shares subject to these registration rights have the right to demand that we register such shares under the Securities Act of 1933, as amended, or the “Securities Act”, with respect to shares having an aggregate offering price of at least $5,000,000, and subject to other limitations. In addition, these holders are entitled to piggyback registration rights with respect to the registration under the Securities Act of shares of common stock. In the event that we propose to register any shares of common stock under the Securities Act either for our account or for the account of other security holders, the holders of shares having piggyback registration rights are entitled to receive notice of such registration and to include shares in any such registration, subject to limitations. Further, at any time after we become eligible to file a registration statement on Form S-3, the holders of at least 5% of the shares subject to these registration rights may require us to file registration statements under the Securities Act on Form S-3 with respect to shares of common stock having an aggregate offering price, net of selling expenses, of at least $5,000,000. To the extent that we qualify as a well-known seasoned issuer at the time a requisite number of holders demand the registration of shares subject to these registration rights, we will file an automatic shelf registration statement covering the shares for which registration is demanded if so requested by the holders of such shares. These registration rights are subject to conditions and limitations, among them the right of the 

 

 

underwriters of an offering to limit the number of shares of common stock held by such security holders to be included in such registration. We are generally required to bear all of the expenses of such registrations, including reasonable fees of a single counsel acting on behalf of all selling Holders, except underwriting discounts, selling commissions and stock transfer taxes applicable to the sale.

Convertible Notes

In December 2018, we issued $240.0 million in aggregate principal amount of 1.25% Convertible Senior Notes due in 2023, or the “Notes”. The Notes are senior unsecured obligations of our Company.

In connection with the issuance of the Notes, we entered into an indenture, dated December 27, 2018, or the “Indenture”, with U.S. Bank National Association, as trustee. The Indenture includes customary covenants and sets forth certain events of default after which the Notes may be declared immediately due and payable and sets forth certain types of bankruptcy or insolvency events of default involving our Company after which the Notes become automatically due and payable. The Indenture does not restrict our ability to incur additional indebtedness.

The Notes will mature on December 15, 2023, unless earlier converted, redeemed or repurchased in accordance with their terms. The Notes will bear interest from December 27, 2018 at a rate of 1.25% per year payable semi-annually in arrears on June 15 and December 15 of each year, beginning on June 15, 2019. The Notes will be convertible at the option of the holders at any time prior to the close of business on September 14, 2023, only under the following circumstances:

	
 
	
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during any calendar quarter commencing after the calendar quarter ending on March 31, 2019 (and only during such calendar quarter), if the last reported sale price of our common stock for at least 20 trading days (whether or not consecutive) during a period of 30 consecutive trading days ending on, and including, the last trading day of the immediately preceding calendar quarter is greater than or equal to 130% of the conversion price on each applicable trading day;

	
 
	
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during the five business day period after any five consecutive trading day period, or the “Measurement Period”, in which the Trading Price (as defined in the Indenture) per $1,000 principal amount of Notes for each trading day of the Measurement Period was less than 98% of the product of the last reported sale price of our common stock and the conversion rate in effect on each such trading day;

	
 
	
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if we call any or all of the Notes for redemption, at any time prior to the close of business on September 14, 2023; or

	
 
	
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upon the occurrence of specified corporate events.

On or after September 15, 2023, until the close of business on the second scheduled trading day immediately preceding the maturity date, holders may convert all or any portion of their Notes, in multiples of $1,000 principal amount, at the option of the holder regardless of the foregoing circumstances.

Upon conversion, we may satisfy its conversion obligation by paying or delivering, as the case may be, cash, shares of our common stock or a combination of cash and shares of our common stock, at our election, in the manner and subject to the terms and conditions provided in the Indenture. The initial conversion rate for the Notes will be 18.8076 shares of our common stock per $1,000 principal amount of Notes, which is equivalent to an initial conversion price of approximately $53.17 per share of our common stock. The conversion rate is subject to adjustment under certain circumstances in accordance with the terms of the Indenture.

We may not redeem the Notes prior to December 20, 2021. We may redeem for cash all or any portion of the Notes, at our option, on or after December 20, 2021, if the last reported sale price of our common stock has been at least 130% of the conversion price then in effect for at least 20 trading days (whether or not consecutive) during any 30 consecutive trading day period (including the last trading day of such 

 

 

period) ending on, and including, the trading day immediately preceding the date on which we provides notice of redemption at a redemption price equal to 100% of the principal amount of the Notes to be redeemed, plus accrued and unpaid interest to, but excluding, the redemption date. No sinking fund is provided for the Notes.

If we undergo a Fundamental Change (as defined in the Indenture), subject to certain conditions, holders may require us to repurchase for cash all or any portion of their Notes in principal amounts of $1,000 or an integral multiple thereof, at a fundamental change repurchase price equal to 100% of the principal amount of the Notes to be repurchased, plus accrued and unpaid interest to, but excluding, the fundamental change repurchase date.

In connection with the offering of the Notes, we entered into privately negotiated capped call transactions with certain counterparties affiliated with the initial purchasers and others. The capped call transactions are expected generally to reduce the potential dilution to our common stock upon any conversion of the Notes and/or offset any cash payments we are required to make in excess of the principal amount of converted Notes, as the case may be, with such reduction and/or offset subject to a cap based on the cap price. The cap price of the capped call transactions is initially $89.98 per share and is subject to certain adjustments under the terms of the capped call transactions.

CERTAIN PROVISIONS OF DELAWARE LAW, 

OUR RESTATED CERTIFICATE AND RESTATED BYLAWS

The provisions of Delaware law, our restated certificate, and our restated bylaws may have the effect of delaying, deferring, or discouraging another person from acquiring control of our Company.

Delaware Law. We are governed by the provisions of Section 203 of the Delaware General Corporation Law. In general, Section 203 prohibits a public Delaware corporation from engaging in a “business combination” with an “interested stockholder” for a period of three years after the date of the transaction in which the person became an interested stockholder unless:

	
 
	
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prior to such time, the board of directors approved either the business combination or the transaction which resulted in the stockholder becoming an interested stockholder;

	
 
	
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upon consummation of the transaction that resulted in the stockholder becoming an interested stockholder, the interested stockholder owned at least 85% of the voting stock of the corporation outstanding at the time the transaction commenced, excluding shares owned by persons who are directors and also officers and by specified employee stock plans; or

	
 
	
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at or subsequent to the date of the transaction, the business combination is approved by the board of directors and authorized at an annual or special meeting of stockholders by the affirmative vote of at least 66 2/3% of the outstanding voting stock which is not owned by the interested stockholder.

A “business combination” includes mergers, asset sales or other transactions resulting in a financial benefit to the stockholder. In general, an “interested stockholder” is a person who, together with affiliates and associates, owns, or within three years did own, 15% or more of the corporation’s outstanding voting stock. These provisions may have the effect of delaying, deferring, or preventing a change in our control. Because the Goldman Funds beneficially held more than 15% of our shares at the time we became subject to Delaware law, our restated certificate exempts the Goldman Funds and their affiliates from being an “interested stockholder” within the meaning of Section 203.

Restated Certificate and Restated Bylaw Provisions. Various provisions of our restated certificate and restated bylaws could deter hostile takeovers or delay or prevent changes in control of our management team, including the following: 

 

 

	
 
	
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Board of Directors Vacancies. Our restated certificate and restated bylaws authorize only our board or the stockholders at a duly called meeting for that purpose to fill vacant directorships. In addition, the number of directors constituting our board is permitted to be set only by a resolution adopted by a majority of our board. These provisions would prevent a stockholder from increasing the size of our board and then gaining control of our board by filling the resulting vacancies with its own nominees.

	
 
	
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Classified Board. Our restated bylaws provide that our board is classified into three classes of directors. This could delay a successful tender offeror from obtaining majority control of our board of directors, and the prospect of that delay might deter a potential offeror.

	
 
	
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Stockholder Action; Special Meeting of Stockholders. Under our restated bylaws, our stockholders may no longer take action by written consent, and may only take action at annual or special meetings of our stockholders. Our restated bylaws further provide that special meetings of our stockholders may be called only by a majority of our board, the chairman of our board, by such other person the board expressly authorizes to call a special meeting, or by stockholders representing at least 35% of the votes entitled to be cast on any issue proposed to be considered at such special meeting.

	
 
	
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Advance Notice Requirements for Stockholder Proposals and Director Nominations. Our restated bylaws provide advance notice procedures for stockholders seeking to bring business before our annual meeting of stockholders, or to nominate candidates for election as directors at our annual meeting of stockholders. To be timely, a stockholder’s notice must be delivered to, or mailed and received at, our principal executive offices not less than 90 days nor more than 120 days prior to the first anniversary of the date of our notice of annual meeting provided with respect to the previous year’s annual meeting of stockholders; provided, that if no annual meeting of stockholders was held in the previous year or the date of the annual meeting of stockholders has been changed to be more than 30 calendar days earlier or 60 days later than such anniversary, notice by the stockholder, to be timely, must be received not earlier than the 120th day nor later to the 90th day prior to the date of such annual meeting or, if later, the 10th day following the date we publicly disclose the date of the annual meeting. Our restated bylaws also specify certain requirements regarding the form and content of a stockholder’s notice. These provisions might preclude our stockholders from bringing matters before our annual meeting of stockholders or from making nominations for directors at our annual meeting of stockholders.

	
 
	
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Issuance of Undesignated Preferred Stock. Our board of directors has the authority, without further action by our stockholders, to issue up to 5,000,000 shares of undesignated preferred stock with rights and preferences, including voting rights, designated from time to time by our board. Our board may utilize these shares for a variety of corporate purposes, including future public offerings to raise additional capital, corporate acquisitions and employee benefits plans. The existence of authorized but unissued shares of preferred stock would enable our board to render more difficult or to discourage an attempt to obtain control of us by means of a merger, tender offer, proxy contest or other means. If we issue such shares without stockholder approval and in violation of limitations imposed by any stock exchange on which our stock may then be trading, our stock could be delisted.

Transfer Agent and Registrar

The transfer agent and registrar for our common stock is Broadridge Corporate Issuer Solutions, Inc.

Stock Exchange Listing

Our common stock is listed on the Nasdaq Global Market under the symbol “BNFT”.Exhibit
10.1

 

EXECUTION
COPY

 

CONFIDENTIAL

 

 

 

MEMBERSHIP
INTEREST PURCHASE AGREEMENT

 

by
and among

 

PACIFIC
ETHANOL CENTRAL, LLC,

 

PACIFIC
AURORA, LLC,

 

and

 

AURORA
COOPERATIVE ELEVATOR COMPANY

 

Dated
as of February 28, 2020

 

     

     

    

 

TABLE
OF CONTENTS

 

	Article
    1	DEFINITIONS	1
	Article
    2	PURCHASE
    AND SALE OF THE COMPANY Interests	15
	2.1	Purchase
    and Sale of the Company Interests	15
	2.2	Closing	15
	2.3	Consideration	15
	2.4	Estimated
    Closing Date Statement	15
	2.5	Post-Closing
    Adjustment	16
	2.6	Required
    Withholdings	18
	Article
    3	REPRESENTATIONS
    AND WARRANTIES OF SELLER	18
	3.1	Title
to Company Interests	18
	3.2	Organization;
    Good Standing	19
	3.3	Power
    and Authority	19
	3.4	Consents
and Approvals; No Violation	19
	3.5	Litigation	19
	3.6	Brokers’
    Fees	20
	Article
    4	REPRESENTATIONS
    AND WARRANTIES REGARDING THE COMPANY	20
	4.1	Consents
    and Approvals; No Violation	20
	4.2	Capitalization;
Subsidiaries	21
	4.3	Real
    Property	21
	4.4	Financial
    Statements	22
	4.5	Assets
Used in Business	24
	4.6	Absence
    of Certain Changes	24
	4.7	Compliance
    with Law; Permits	26
	4.8	Environmental
    Matters	27
	4.9	Tax
    Matters	27
	4.10	Intellectual
Property	28
	4.11	Contracts	29
	4.12	Employment
    and Labor Matters	31
	4.13	Employee
Benefits Plans	31
	4.14	Affiliate
    Transactions	32
	4.15	Litigation	32
	4.16	Bank
    Accounts and Managers	32
	4.17	Books
    and Records	32
	4.18	Undisclosed
    Liabilities	32
	4.19	Insurance	33

 

    i

     

    

 

	Article
    5	REPRESENTATIONS
    AND WARRANTIES OF BUYER	33
	5.1	Organization;
    Good Standing	33
	5.2	Power
    and Authority	33
	5.3	Consents
    and Approvals	33
	5.4	Litigation	33
	5.5	Brokers’
    Fees	34
	5.6	Investment
    Representation	34
	5.7	Buyer’s
    Due Diligence	34
	Article
    6	PRE-CLOSING
    COVENANTS	34
	6.1	Conduct
    of the Business	34
	6.2	Appropriate
    Actions	37
	6.3	Consents;
    Further Assurances	38
	6.4	Confidentiality	39
	6.5	Public
    Announcements	39
	6.6	Due
    Diligence Access	39
	6.7	Contact
    with Business Relations	40
	6.8	Transferred
    Employees	40
	6.9	Reduction
    of Railcar Fleet	41
	6.10	Financing
    Assistance	41
	6.11	Exclusivity
    and ROFO Notice	42
	6.12	Transition
    Services	42
	6.13	Real
    Estate Diligence	42
	6.14	Carbon
    Score	43
	6.15	Non-Compliant
    Ethanol	43
	Article
    7	CLOSING
    DELIVERABLES	43
	7.1	Closing
    Deliverables of Seller	43
	7.2	Closing
    Deliverables of Buyer	45

 

    ii

     

    

 

	Article
    8	CONDITIONS
    TO CLOSING	45
	8.1	Conditions
    to Obligations of Buyer and Seller	45
	8.2	Additional
    Conditions to Obligations of Buyer	45
	8.3	Additional
    Conditions to Obligations of Seller	46
	Article
    9	GENERAL
    COVENANTS	47
	9.1	Books
    and Records; Access	47
	Article
    10	Survival;
    INDEMNIFICATION	47
	10.1	Survival
    of Representations, Warranties and Covenants	47
	10.2	Indemnification
    Provisions for Benefit of Buyer	48
	10.3	Indemnification
    Provisions for Benefit of Seller	49
	10.4	Matters
    Involving Third Parties	49
	10.5	Direct
    Claims	50
	10.6	Certain
    Limitations	50
	10.7	Exclusive
    Remedy	51
	10.8	Effect
    of Investigation	51
	Article
    11	TAX
    MATTERS	51
	11.1	Cooperation
    on Tax Matters	51
	Article
    12	TERMINATION	53
	12.1	Termination
    of the Agreement	53
	12.2	Effect
    of Termination	54
	Article
    13	MISCELLANEOUS	54
	13.1	No
    Third-Party Beneficiaries	54
	13.2	Entire
    Agreement	54
	13.3	Succession
    and Assignment	55
	13.4	Counterparts	55
	13.5	Headings;
    Interpretation	55
	13.6	Notices	55
	13.7	Governing
    Law	56
	13.8	Submission
    To Jurisdiction; Waiver of Jury Trial.	57
	13.9	Amendments	57
	13.10	Extension;
    Waiver	57
	13.11	Severability	58
	13.12	Expenses	58
	13.13	Construction	58
	13.14	Incorporation
    of Exhibits and Schedules	58
	13.15	Specific
    Performance	58
	13.16	Release	59

 

	Exhibit
    A	Accounting
    Policies
	Exhibit
    B	Net
    Working Capital Illustration
	Exhibit
    C	Ethanol
    Specifications
	Exhibit
    D	Seller
    Deed of Trust Collateral
	Exhibit
    E	Purchase
    Price Allocation Methodology

 

    iii

     

    

 

MEMBERSHIP
INTEREST PURCHASE AGREEMENT

 

This
MEMBERSHIP INTEREST PURCHASE AGREEMENT (this “Agreement”), dated as of February 28, 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,
Seller and Buyer are collectively the owners of all of the issued and outstanding membership interests of the Company, with Seller
owning 73.93 membership interests (or units) of the Company and Buyer owning 26.07 membership interests (or units) of the Company;

 

WHEREAS,
upon the terms and subject to the conditions of this Agreement, Buyer desires to purchase from Seller, and Seller desire to sell
to Buyer, all of the issued and outstanding membership interests (or units) of the Company owned by Seller (the “Company
Interests”).

 

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:

 

Article
1

DEFINITIONS

 

As
used in this Agreement, the following terms shall have the following meanings:

 

“2018
Financial Statements” has the meaning set forth in Section 4.4(a)(i).

 

“Accounting
Policies” means the accounting procedures, policies and methodologies with respect to calculation of Net Working Capital,
including defined terms in the definition of Net Working Capital, attached as Exhibit A to this Agreement.

 

“Acquisition
Proposal” means any offer or proposal for, or indication of interest in, a merger, consolidation, business combination,
reorganization, recapitalization, liquidation, dissolution or other similar transaction involving the acquisition of any of the
Company Interests, any other Equity Interests of the Company or any Company Subsidiary, or any of the assets of Company or any
Company Subsidiary outside of the Ordinary Course, in each case other than the transactions contemplated by this Agreement. Without
limitation of the foregoing, the term “Acquisition Proposal” shall include any proposed transaction, or any action
or occurrence with respect to any such transaction, for which a Party would be required to deliver a ROFO Notice pursuant to the
terms of the Company Operating Agreement.

 

    1

     

    

 

“Action”
means any action, audit, claim, demand, lawsuit, litigation (at law or in equity), petition, mediation, arbitration, complaint,
investigation or proceeding (whether civil, criminal, administrative, judicial or investigative, whether formal or informal, whether
public or private) commenced, brought, conducted or heard by or before any Governmental Authority, or any notice of non-compliance
or violation, consent order or consent agreement by or before a Governmental Authority.

 

“Adjusted
Purchase Price” means an amount equal to (a) the Base Purchase Price; plus (b) the Net Working Capital Adjustment
Amount, plus (c) any Seller Intercompany Payable, minus (d) any Seller Intercompany Receivable.

 

“Affiliate”
of any particular Person means any other Person controlling, controlled by or under common control with such particular Person.
For purposes of this definition, “control” (including with correlative meanings, the terms “controlling,”
“controlled by” and under “common control with”) means the possession, directly or indirectly, of the
power to direct the management and policies of a Person, whether through the ownership of voting securities, by contract or otherwise.
Affiliates of Seller shall include, but not be limited to, Kinergy, Pacific Ag. Products, LLC and Parent. Prior to the Closing,
Buyer is not an Affiliate of the Company.

 

“Affiliate
Agreements” means (a) the Co-Product Marketing Agreement, (b) the Ethanol Marketing Agreement, (c) the Grain Procurement
and Marketing Agreement, (d) the Asset Management Agreement and (e) the Company Operating Agreement.

 

“Affiliated
Group” means any affiliated group within the meaning of Section 1504(a) of the Code or any similar group defined under
a similar provision of state, local or foreign Tax Law.

 

“Agreement”
has the meaning set forth in the preamble to this Agreement.

 

“Allocation
Schedule” has the meaning set forth in Section 11.1(e).

 

“Ancillary
Agreements” has the meaning set forth in Section 3.3.

 

“Asset
Management Agreement” means the Asset Management Agreement, dated as of December 15, 2016, between the Company
and Parent, as amended, supplemented or modified from time to time.

 

“Assigned
Employee” has the meaning set forth in Section 4.12(b).

 

“Aurora
East Restart Credit” means $625,000.00.

 

“Aurora
Facility” the site and facilities located in Aurora, Nebraska owned or operated, at any time, by the Company or any
Company Subsidiary, comprising (i) two ethanol production facilities, (b) grain storage facilities (including two elevators, two
storage bins and associated grain handling facilities), (c) interconnected private railroad tracks (including a double rail loop,
ladder tracks and spur lines), (d) the storage space for ethanol and distillers grains, (e) administrative offices and building
structures, (f) site improvements including roads, loading and unloading facilities, and fencing, and (g) piping, structures and
equipment for delivery of ethanol and grains and for delivery of water, fuel, waste water discharge and other Consumables required
for facility operation and maintenance.

 

    2

     

    

 

“Aurora
Facility’s Production Capacity” means, solely for purposes of calculating the Base Purchase Price, an aggregate
annual ethanol production capacity of the Aurora Facility in the amount of 144,500,000 gallons.

 

“Balance
Sheet Date” has the meaning set forth in Section 4.4(a)(ii).

 

“Base
Purchase Price” has the meaning set forth in Section 2.3(a).

 

“Business”
means the business of owning, operating and managing the Aurora Facility and any other business of the Company and the Company
Subsidiaries as conducted as of the date of this Agreement.

 

“Business
Day” means any day that is not a Saturday, Sunday or other day on which commercial banks are required or permitted to
be closed in the State of Nebraska.

 

“Business
Permits” has the meaning set forth in Section 4.7(b).

 

“Buyer”
has the meaning set forth in the preamble to this Agreement.

 

“Buyer
Indemnitees” has the meaning set forth in Section 10.2(a).

 

“Buyer
Intercompany Financing” means any portion of the Financing Buyer elects, in its sole discretion, to provide to the Company
on the Closing Date.

 

“Buyer
Released Claims” has the meaning set forth in Section 13.16(b).

 

“Buyer
Required Government Approvals” has the meaning set forth in Section 5.3.

 

“Carbon
Score” means the carbon index score assigned by the California Air Resources Board (CARB) for the Business.

 

“Cash
and Cash Equivalents” means: (a) cash and cash equivalents of the Company and the Company Subsidiaries, specifically
including (i) marketable securities and (ii) short-term investments, in each case as determined in accordance with GAAP; (b) restricted
cash (including all cash posted to support letters of credit, performance bonds or other similar obligations); and (c) deposits
with third parties (including deposits with landlords, whether categorized as prepaid expenses or otherwise), in each case as
of the Closing Date. Cash and Cash Equivalents shall be calculated net of issued but uncleared checks and drafts and shall include
checks, other wire transfers and drafts deposited for the account of the Company or a Company Subsidiary.

 

“Cash
Payment Amount” means an amount equal to (a) the Adjusted Purchase Price, minus (b) any Indebtedness of the Company
or any Company Subsidiary as of the Closing Date, minus (c) any Transaction Expenses, minus (d) the principal amount of the Seller
Notes.

 

“Cash
Payment Decrease” has the meaning set forth in Section 2.5(c)(ii).

 

“Cash
Payment Increase” has the meaning set forth in Section 2.5(c)(i).

 

    3

     

    

 

“Cleanup”
means all actions required to: (a) clean up, remove, treat or remediate Hazardous Materials in the environment; (b) address or
prevent the Release of Hazardous Materials so that they do not migrate, endanger or threaten to endanger public health or welfare
or the environment; (c) perform pre-remedial studies and investigations and post-remedial monitoring and care; or (d) respond
to any Order relating to the cleanup, removal, treatment or remediation or potential cleanup, removal, treatment or remediation
of Hazardous Materials in the environment.

 

“Closing”
has the meaning set forth in Section 2.2.

 

“Closing
Cash Payment Amount” has the meaning set forth in Section 2.4.

 

“Closing
Date” has the meaning set forth in Section 2.2.

 

“Closing
Date Statement” has the meaning set forth in Section 2.5(a).

 

“Co-Product
Marketing Agreement” means the Co-Product Marketing Agreement, dated December 2016, between the Company and Pacific
Ag. Products, LLC.

 

“Code”
means the United States Internal Revenue Code of 1986, as amended.

 

“Commodity
Hedging Arrangement” means any arrangement, including any commodity account, contract or option to hedge the price of
corn purchases, ethanol sales, distillers grains sales or natural gas purchases.

 

“Company”
has the meaning set forth in the preamble to this Agreement.

 

“Company
Interests” has the meaning set forth in the recitals to this Agreement.

 

“Company
Operating Agreement” means that certain Amended and Restated Limited Liability Company Agreement, dated as of December
15, 2016, by and among the Company, Seller and Buyer, as amended from time to time.

 

“Company
Required Governmental Approvals” has the meaning set forth in Section 4.1(a).

 

“Company
Subsidiary” means Pacific Ethanol Aurora East, LLC or Pacific Ethanol Aurora West, LLC, each a Delaware limited liability
company.

 

“Consumables”
means all items consumed, or needing regular, period replacement or replenishment in the performance of services pursuant to the
Asset Management Agreement, including, but not limited to, chemicals, hand tools, catalysts, lubricants, rags, oils, filter media,
ammonia, additives, anti-corrosion devices, gases (CO2, O2, halon, etc.) and other expendable materials.

 

“Contract”
means any contract, agreement, indenture, mortgage, lease, instrument or other legally binding agreement, arrangement, understanding,
undertaking, commitment or obligation.

 

    4

     

    

 

“Current
Assets” means Cash and Cash Equivalents, accounts receivable (including any Intercompany Receivable), inventory and
prepaid expenses, but excluding (a) the portion of any prepaid expense of which Buyer will not receive the benefit following the
Closing, and (b) any other assets as determined in accordance with the Accounting Policies mutually agreed to by Buyer and Seller
identified in Exhibit B attached to this Agreement; provided, however, excluding all current and deferred
Tax assets.

 

“Current
Liabilities” means accounts payable (including any Intercompany Payable and outstanding balances on any credit cards),
and accrued expenses; provided, however, excluding (a) current obligations under Specified Leases, (b) all current
and deferred Tax liabilities and (c) such other liabilities as may be mutually agreed to by Buyer and Seller and identified
in Exhibit B attached hereto, in each case, as determined in accordance with the Accounting Policies.

 

“Deductible”
has the meaning set forth in Section 10.2(b).

 

“Designated
Buyer Officer” means each of Chris Vincent (Chief Executive Officer), Chris Decker (Chief Operating Officer), Carl Smith
(Chief Financial Officer) and Kara Ronnau (Executive General Counsel).

 

“Designated
Seller Officer or Employee” means each of Neil M. Koehler (Chief Executive Officer), Bryon T. McGregor (Chief Financial
Officer, Vice President and Assistant Secretary), Michael D. Kandris (Chief Operating Officer), Christopher W. Wright (General
Counsel, Vice President and Secretary), James Sneed (Vice President), Paul P. Koehler (Vice President), Robert Olander (Vice President),
Michael Kramer (Vice President), and Ed Baker (Vice President).

 

“Disclosure
Schedules” has the meaning set forth in Article 3.

 

“Dispute
Notice” has the meaning set forth in Section 2.5(b)(i).

 

“Employee
Benefit Plan” means each “employee benefit plan” (as defined in Section 3(3) of ERISA) and each other benefit
or compensation plan, program, agreement or arrangement that is maintained, sponsored, contributed or required to be contributed
to by (i) the Company or any ERISA Affiliate or with respect to which the Company or any ERISA Affiliate has any Liability and
(ii) Seller or any ERISA Affiliate with respect to any Assigned Employees or their spouses, dependents or beneficiaries.

 

“Environmental
Action” means any Action or Loss arising out of or relating to any Environmental Law or the presence of, Release of,
or threat of Release of any Hazardous Materials at any location, whether or not owned, leased or operated by the Company or any
Company Subsidiary.

 

“Environmental
Laws” means all Laws and Orders governing pollution or protection of the environment, natural resources, wildlife, or
human health and safety, including the Comprehensive Environmental Response, Compensation and Liability Act, 42 U.S.C. §
9601 et seq.; the Resource Conservation and Recovery Act, 42 U.S.C. § 6901 et seq.; the Federal Water Pollution Control Act,
33 U.S.C. § 1251 et seq.; the Clean Air Act, 42 U.S.C. § 7401 et seq.; the Toxic Substances Control Act, 15 U.S.C. §§
2601 through 2629; the Oil Pollution Act, 33 U.S.C. § 2701 et seq.; the Occupational Safety and Health Act, U.S.C. §
651 et seq; the Emergency Planning and Community Right-to-Know Act, 42 U.S.C. § 11001 et seq.; and the Safe Drinking Water
Act, 42 U.S.C. §§ 300f through 300j, as each of the same is amended, modified or supplemented from time to time.

 

    5

     

    

 

“Equity
Interest” means any share, capital stock, partnership interest, limited liability company interest, membership interest,
joint venture interest or similar interest in any Person, and any option, warrant, right or security (including debt securities)
convertible, exchangeable or exercisable therefor.

 

“ERISA”
means the Employee Retirement Income Security Act of 1974, as amended.

 

“ERISA
Affiliate” means any Person at any relevant time considered a single employer with the Company, a Company Subsidiary
or any Affiliate of the Company or any Company Subsidiary under Section 414 of the Code.

 

“Estimated
Closing Date Statement” has the meaning set forth in Section 2.4.

 

“Ethanol
Marketing Agreement” means the Ethanol Marketing Agreement, dated December 2016, between the Company and Kinergy.

 

“Existing
ROFO Notice” means the ROFO Notice dated December 31, 2019 by Seller to Buyer.

 

“Evaluation
Material” means the Material Contracts and other information relating to the Business, in each case, provided by Seller
or its Affiliates, representatives or agents.

 

“Facility
Agreements” mean (a) the Co-Product Marketing Agreement, (b) the Ethanol Marketing Agreement, (c) the Grain Procurement
and Marketing Agreement and (d) any other ethanol, distillers grain or co-product marketing agreement and any other procurement
agreement for grain, natural gas or other raw materials relating to the Business, in each case pursuant to this clause (d), involving
consideration in excess of $25,000 during any calendar year or $50,000 in the aggregate.

 

“Fair
Market Value” means the value of any specified interest or property, which shall not in any event be less than zero,
that would be obtained in an arm’s-length transaction for cash between an informed and willing buyer and an informed and
willing seller, neither of whom is an Affiliate of the other or under any compulsion to purchase or sell, respectively, and without
regard to the particular circumstances of the buyer or seller.

 

“Final
Cash Payment Amount” has the meaning set forth in Section 2.5(b)(ii).

 

“Financial
Statements” has the meaning set forth in Section 4.4(a)(ii).

 

“Financing”
means any the financing to be obtained by Buyer or any Affiliate of Buyer in order to fund any expenses incurred by Buyer in connection
with the transactions contemplated by this Agreement, the Purchase Price, and to provide adequate working capital and liquidity
for the operation of the Business and the Company following the Closing.

 

“Fundamental
Representations” has the meaning set forth in Section 10.1(b).

 

    6

     

    

 

“GAAP”
means United States generally accepted accounting principles as in effect from time to time, consistently applied in accordance
with the past custom and practices of the Company.

 

“General
Principles of Law, Equity and Public Policy” means, with reference to the enforceability of any Contract, that enforceability
may be limited by (a) general principles of law, equity and public policy, including principles regarding the enforceability of
covenants not to compete and similar restrictive covenants; principles regarding the availability of specific performance, injunctive
relief, or other equitable remedies; principles requiring good faith and fair dealing in the performance and enforcement of a
Contract by the party seeking its enforcement; principles requiring reasonableness in the performance and enforcement of a Contract
by the party seeking its enforcement; principles requiring consideration of the materiality of a breach and the consequences of
the breach to the party seeking enforcement; and principles requiring consideration of the impracticability or impossibility of
performance at the time of attempted enforcement; or (b) bankruptcy, insolvency, reorganization, receivership, moratorium, and
other similar Laws affecting the rights of debtors and creditors generally.

 

“Governmental
Authority” means any federal, state, local or foreign governmental, quasi-governmental, regulatory or administrative
body, instrumentality, department, commission or agency, or any federal, state, local or foreign court, tribunal, arbitration
panel, commission or other similar dispute-resolving panel or body.

 

“Grain
Procurement and Marketing Agreement” means the Amended and Restated Grain Procurement and Marketing Agreement, dated
June 1, 2017 between the Company and Buyer.

 

“Hazardous
Material” means each substance designated as a hazardous waste, hazardous substance, hazardous material, dangerous substance,
pollutant, contaminant, chemical or toxic substance under any Environmental Law, any petroleum or petroleum products, gasoline,
diesel fuel, or other petroleum hydrocarbons including refined oil, crude oil and fractions thereof, natural gas, synthetic gas
and any mixtures, polychlorinated biphenyls or materials or fluids containing the same, asbestos and/or asbestos-containing materials,
urea-formaldehyde insulation, infectious materials, radioactivity, nitrogen oxides, carbon dioxide, carbon monoxide, volatile
organic compounds, sulfur dioxide, particulate matter, ammonia, any substance or chemical defined and regulated under requirements
promulgated, respectively, by the U.S. Environmental Protection Agency at 40 C.F.R. part 355, by the U.S. Department of Transportation
at 49 C.F.R. parts 100-180, by the U.S. Occupational Safety and Health Administration at 29 C.F.R. § 1910.1200 and any other
substances that are regulated pursuant to or could give rise to liability under any Environmental Law or Law.

 

“Indebtedness”
means, with respect to any Person as of any date of determination, without duplication, determined on an aggregate basis, the
(i) outstanding principal amount of, accrued and unpaid interest on, and other payment obligations (including any prepayment premiums
and penalties payable as a result of the consummation of the transactions contemplated by this Agreement) arising under any (A)
indebtedness for borrowed money of such Person and (B) revolving line of credit and other extensions of credit (including
credit cards), (ii) long or short-term obligations evidenced by notes, bonds, debentures or other similar instruments, and (iii) guarantees
made by such Person on behalf of any third party in respect of obligations of the kind referred to in the foregoing clauses (i)
and (ii).

 

    7

     

    

 

“Indemnified
Party” has the meaning set forth in Section 10.4(a).

 

“Indemnifying
Party” has the meaning set forth in Section 10.4(a).

 

“Indemnity
Cap” has the meaning set forth in Section 10.2(c).

 

“Independent
Accountant” means Lutz & Company, P.C., or if Lutz & Company, P.C. is unable or unwilling to serve, an impartial
regional certified public accounting firm mutually agreeable to Buyer and Seller.

 

“Intellectual
Property” means all of the following in any jurisdiction throughout the world: (a) all inventions (whether patentable
or unpatentable and whether or not reduced to practice), all improvements thereto, and all patents, patent applications (including
provisional patents), and patent disclosures, together with all reissuances, continuations, continuations-in-part, revisions,
divisional, extensions, and reexaminations thereof; (b) all trademarks, service marks, trade dress, logos, slogans, trade names,
and Internet domain names, together with all translations, adaptations and combinations thereof, all applications, registrations,
and renewals in connection therewith, and all goodwill associated with any of the foregoing; (c) all copyrights and other works
of authorship, and all applications, registrations, and renewals in connection therewith; (d) all trade secrets and other confidential
business information (including ideas, research and development, know-how, formulas, compositions, manufacturing and production
processes and techniques, technical data, designs, drawings, specifications, customer and supplier lists, pricing and cost information,
and business and marketing plans and proposals); and (e) all computer software (including source code, executable code, data,
databases, and related documentation).

 

“Intercompany
Payable” means a loan or payable of the Company or a Company Subsidiary to either Seller or an Affiliate of Seller (other
than the Company or a Company Subsidiary) or Buyer or an Affiliate of Buyer (other than the Company or a Company Subsidiary).

 

“Intercompany
Receivable” means an account receivable of the Company or a Company Subsidiary owing and payable from either Seller
or an Affiliate of Seller (other than the Company or a Company Subsidiary) or Buyer or an Affiliate of Buyer (other than the Company
or a Company Subsidiary).

 

“Interim
Financial Statements” has the meaning set forth in Section 4.4(a)(ii).

 

“Interim
Period” has the meaning set forth in Section 6.1(a).

 

“Inventory”
has the meaning set forth in Section 4.4(d).

 

“Kinergy”
means Kinergy Marketing LLC, an Oregon limited liability company.

 

    8

     

    

 

“Knowledge
of Buyer” or “Buyer’s Knowledge” means the actual knowledge by a Designated Buyer Officer of
a particular fact or other matter in question, and such additional knowledge of such fact or other matter in question as such
Designated Buyer Officer would obtain following a reasonable or due inquiry into the matter.

 

“Knowledge
of Seller” or “Seller’s Knowledge” means the actual knowledge by a Designated Seller Officer
or Employee of a particular fact or other matter in question, and such additional knowledge of such fact or other matter in question
as such Designated Seller Officer or Employee would obtain following a reasonable or due inquiry into the matter.

 

“Law”
means any law, statute, treaty, code, rule, regulation or ordinance of a Governmental Authority or other requirement having the
force of law.

 

“Lease”
means any written lease, sublease, license, right of use, concession or other agreement, including all amendments, extensions,
renewals, guaranties and other agreements with respect thereto, pursuant to which the Company or any Company Subsidiary holds
any Leased Real Property, including the right to all security deposits and other amounts and instruments deposited by or on behalf
of the Company or any Company Subsidiary thereunder.

 

“Leased
Real Property” means all leasehold or subleasehold estates and other rights to use or occupy any land, buildings, structures,
improvements, fixtures, and other interest in real property held by the Company or any Company Subsidiary.

 

“Liability”
means any liability or obligation of whatever kind or nature (whether known or unknown, whether asserted or unasserted, whether
absolute or contingent, whether accrued or unaccrued, whether liquidated or unliquidated, and whether due or to become due).

 

“Licensed
Intellectual Property” means all Intellectual Property that is licensed to the Company or any Company Subsidiary.

 

“Licenses”
means all Contracts granting licenses of Licensed Intellectual Property to the Company or any Company Subsidiary.

 

“Lien”
means, with respect to any property or asset, any mortgage, pledge, lien, encumbrance or other security interest in respect of
such property or asset; provided, however, (a) the license or other grant of rights with respect to Intellectual
Property, in and of itself, shall not be deemed to be a Lien, and (b) transfer restrictions under applicable federal and state
securities Laws shall not be deemed to be a Lien.

 

“Losses”
means any and all claims, losses, damages, Liabilities, deficiencies, Actions, judgments, interest, awards, penalties, fines,
costs or expenses of whatever kind, including reasonable attorneys’ fees, the fees and costs of any other experts (including,
without limitation, accountants’ fees) incurred in connection with investigating, preparing, defending, avoiding or settling
any claim, and the cost of enforcing any right to indemnification hereunder and the cost of pursuing any insurance providers.

 

    9

     

    

 

 

“Material
Adverse Effect” means any change, effect, event, occurrence, facts or development that, individually or in the aggregate,
has, or would reasonably be expected to have, a material adverse effect on the assets, financial condition or results of operations
of the Business or the Company and the Company Subsidiaries, taken as a whole, or the ability of Seller or the Company to consummate
the transactions contemplated hereby; provided, however, that a “Material Adverse Effect” shall not
include any change, effect, event, occurrence, state of facts or development resulting from: (a) general economic or business
conditions generally affection the industries, markets or geographical areas in which Company or any Company Subsidiary conducts
its Business; (b) financial, banking or securities markets of the U.S. in general (including any disruption thereof and any decline
in the price of any security or any market index); (c) acts of God or other disasters, national or international political or
social conditions, including the engagement and/or escalation by the U.S. in hostilities, whether or not pursuant to the declaration
of a national emergency or war, or the occurrence of any military or terrorist attack upon the U.S. or any of its territories,
possessions or diplomatic or consular offices or upon any military installation, equipment or personnel of the United States;
(d) changes in applicable Laws or the interpretation thereof; or (e) any change in GAAP or other accounting requirements or principles,
except, in each case of the foregoing clauses (a) through (e) to the extent such change, effect, event, occurrence, fact or development
has a disproportionate impact on the Company or any Company Subsidiary relative to other businesses that operate in the industry
in which the Company or any Company Subsidiary operates or that are competitive to the Company or any Company Subsidiary.

 

“Material
Contract” has the meaning set forth in Section 4.11(a).

 

“Net
Working Capital” means the amount (which may be a positive or negative number), without duplication, as of the Closing
Date equal to (a) the Current Assets of the Company and the Company Subsidiaries, minus (b) the Current Liabilities of
the Company and the Company Subsidiaries, calculated in accordance with the Accounting Policies. An illustrative calculation of
the Net Working Capital is attached hereto as Exhibit B. In the event of an inconsistency between the illustrative calculation
and the Accounting Policies, the Accounting Policies shall control.

 

“Net
Working Capital Adjustment Amount” means an amount equal to the product of (X) times (Y), where (X) is the Pro
Rata Share, and (Y) is the Net Working Capital.

 

“Non-Compliant
Ethanol” means all ethanol produced by the Company or any Company Subsidiary that does not meet the specifications set
forth on Exhibit C.

 

“Non-Compliant
Ethanol Purchase Price” has the meaning set forth in Section 6.15.

 

“Off-Premises
Property” has the meaning set forth in Section 4.5(d).

 

“Order”
means any order, writ, injunction, decree, stipulation, judgment, award, determination, direction or demand of a Governmental
Authority.

 

“Ordinary
Course” means the ordinary course of business consistent with past custom and practice (including with respect to quantity
and frequency).

 

“Organizational
Documents” means, for any entity, its constituent or organizational documents including (a) in the case of a corporation,
its articles or certificate of incorporation and its bylaws (if any); and (b) in the case of a limited liability company, its
articles of organization and its operating or limited liability company agreement (if any).

 

“Outside
Date” has the meaning set forth in Section 12.1(b).

 

    10

     

    

 

“Owned
Real Property” has the meaning set forth in Section 4.3(a).

 

“Parent”
means Pacific Ethanol, Inc., a Delaware corporation.

 

“Party”
and “Parties” have the respective meanings set forth in the preamble to this Agreement.

 

“Permit”
means all permits, licenses, authorizations, registrations, franchises, approvals, consents, certificates (including industry
association certifications), variances and similar rights granted by or obtained from any Governmental Authority.

 

“Permitted
Liens” means: (a) Liens for Taxes or other governmental charges which are not yet due and payable or the amount or validity
of which is being contested in good faith by appropriate proceedings by the Company; (b) mechanics’, carriers’, workers’,
repairers’ and similar Liens arising or incurred in the Ordinary Course that are not delinquent; (c) statutory Liens for
landlords for amounts which are not yet due and payable; (d) easements, covenants, conditions, restrictions and other similar
matters of record affecting title to the Leased Real Property which do not or would not materially impair the use or occupancy
of the Leased Real Property in connection with the operation of the Business conducted thereon and which are not violated by the
current or intended use or operation of the Leased Real Property; (e) Liens incurred or deposits made in the Ordinary Course in
connection with worker’s compensation, unemployment insurance, social security retirement or similar programs; (f) Liens
on goods in transit incurred pursuant to commercial letters of credit; (g) licenses of Intellectual Property; (h) transfer restrictions
under applicable federal and state securities Laws; (i) as of the Closing Date, Liens which are disclosed on any Survey and/or
Title Commitment obtained by or delivered to Buyer prior to Closing, and, but without duplication, the 2018 Liens (as defined
below) that remain in existence on the Closing Date; (j) as of the date hereof, any other exceptions to title that are described
on Schedule B to the Owner’s Policy of Title Insurance issued by Fidelity National Title Insurance Company, Policy Number
L20174135, to the Company (excluding those described in paragraphs 3, 4, 11, 12, 18 and 19) and which existed as of February 28,
2018 (collectively, the “2018 Liens”); and (k) any other Liens identified on Schedule 1.1; provided,
however, that notwithstanding anything to the contrary herein, “Permitted Liens” shall not include any Liens
(a) arising out of any payment obligation (other than Indebtedness), to the extent delinquent (beyond all applicable notice and
cure periods) or (b) securing Indebtedness.

 

“Person”
means an individual, a partnership, a corporation, a limited liability company, an association, a joint stock company, a trust,
a joint venture, an unincorporated organization, any other business entity, or a Governmental Authority.

 

“Phase
I Survey” has the meaning set forth in Section 6.13(a).

 

“Post-Closing
Tax Period” means any Tax period beginning on the day after the Closing Date, and the portion of any Straddle Period
beginning on the day after the Closing Date.

 

“Pre-Closing
Tax Period” means any Tax period ending on or before the Closing Date, and the portion of any Straddle Period ending
on the Closing Date.

 

“Pre-Closing
Tax Returns” has the meaning set forth in Section 11.1(a).

 

    11

     

    

 

“Pro
Rata Share” means, with respect to Seller, such Seller’s total percentage ownership of the Company’s outstanding
Equity Interests as of the Closing Date and prior to giving effect to the Closing.

 

“Railcar
Fleet” has the meaning set forth in Section 4.5(c).

 

“Real
Property Leases” has the meaning set forth in Section 4.3(b).

 

“Receivables”
has the meaning set forth in Section 4.4(c).

 

“Release”
or “Released” means any release, spill, emission, migration, leaking, pumping, injection, deposit, disposal
or discharge of any Hazardous Materials.

 

“Required
Government Approvals” means the Buyer Required Government Approvals, the Company Required Government Approvals and the
Seller Required Government Approvals.

 

“Review
Period” has the meaning set forth in Section 2.5(b)(i).

 

“ROFO
Notice” has the meaning assigned to such term in the Company Operating Agreement.

 

“Schedule”
has the meaning set forth in Article 3.

 

“Securities
Act” means the Securities Act of 1933, as amended.

 

“Seller”
has the meaning set forth in the preamble to this Agreement.

 

“Seller
Deeds of Trust” means the Seller Deed of Trust (Negotiable Note) and the Seller Deed of Trust (Non-Negotiable Note).
The Liens of the Seller Deeds of Trust shall be subordinate to only those Permitted Liens existing as of the Closing Date. For
the avoidance of doubt, the Liens of the Seller Deeds of Trust shall be senior to any Liens granted to any Person in connection
with any Buyer Intercompany Financing.

 

“Seller
Deed of Trust (Negotiable Note)” means that certain deed of trust or mortgage in form and substance satisfactory to
the Parties which shall be executed at the Closing by the Company in favor of Seller to be recorded against the Seller Deeds of
Trust Collateral, which deed of trust secures the obligations of Buyer under the Seller Negotiable Note.

 

“Seller
Deed of Trust (Non-Negotiable Note)” means that certain deed of trust or mortgage in form and substance satisfactory
to the Parties which shall be executed at the Closing by the Company in favor of Seller and recorded against the Seller Deeds
of Trust Collateral, which deed of trust secures the obligations of Buyer under the Seller Negotiable Note.

 

“Seller
Deeds of Trust Collateral” means the real property, the legal description of which is attached hereto as Exhibit
D, together with all improvements thereon, any leases thereat and any fixtures located therein, whether presently existing
or in future erected, added or installed. The Seller Deeds of Trust Collateral shall not include Lots 1, 3 and 5 of the Pacific
Aurora Subdivision, Hamilton County, Nebraska.

 

    12

     

    

 

“Seller
Indemnitees” has the meaning set forth in Section 10.3.

 

“Seller
Intercompany Payable” means the Intercompany Payables owed to Seller or an Affiliate of Seller.

 

“Seller
Intercompany Receivable” means the Intercompany Receivables owed from Seller or an Affiliate of Seller.

 

“Seller
Notes” means the Seller Negotiable Note and the Seller Non-Negotiable Note.

 

“Seller
Negotiable Note” means the negotiable promissory note of Buyer payable to Seller in the amount of $8,580,000.00, in
form and substance satisfactory to the Parties which shall be executed at the Closing, the material terms of which include (a)
7.5% interest rate per annum payable, in arrears, commencing on the first Business Day of the first full calendar quarter after
the Closing Date, (b) quarterly principal payments of $429,000.00 beginning after the first (1st) anniversary
from the Closing Date with a balloon payment of $1,716,000.00 due on the maturity date and (c) a maturity date five (5) years
from the Closing Date, and which is secured by the Seller Deed of Trust (Negotiable Note).

 

“Seller
Non-Negotiable Note” means the non-negotiable promissory note of Buyer payable to Seller in the amount of $7,920,000.00,
in form and substance satisfactory to the Parties which shall be executed at the Closing, the material terms of which include
(a) 7.5% interest rate per annum payable, in arrears, commencing on the first Business Day of the first full calendar quarter
after the Closing Date, (b) quarterly principal payments of $396,000.00 beginning on the first Business Day of the first calendar
quarter after the Setoff Period with a balloon payment of $2,376,000.00 due on the maturity date and (c) a maturity date five
(5) years from the Closing Date, which is (i) subject to reduction in accordance with Section 2.5(c) and recoupment
for indemnification claims in accordance with Article 10, and (ii) secured by the Seller Deed of Trust (Non-Negotiable
Note).

 

“Seller
Released Claims” has the meaning set forth in Section 13.16(a).

 

“Seller
Required Government Approvals” has the meaning set forth in Section 3.4(a).

 

“Setoff
Period” has the meaning set forth in Section 10.1(a).

 

“Specified
Leases” means the current portion of operating lease liability of Company.

 

“Straddle
Period” means any Tax period that begins before and ends after the Closing Date.

 

“Survey”
has the meaning set forth in Section 6.13(c).

 

“Syngenta
Indemnity” has the meaning set forth in Section 10.2(a).

 

“Syngenta
Payment Demand” means the payment demand issued by Syngenta to the Company in the amount of $1,800,000.

 

    13

     

    

 

“Target
Closing Date” has the meaning set forth in Section 12.1(b).

 

“Tax”
or “Taxes” means any federal, state, local, or non-U.S. income, gross receipts, license, payroll, employment,
excise, severance, stamp, occupation, premium, windfall profits, environmental, customs duties, capital stock, franchise, profits,
withholding, social security (or similar), unemployment, disability, real property, personal property, sales, use, transfer, registration,
value added, alternative or add-on minimum, estimated, or other tax of a similar kind imposed by a Governmental Authority.

 

“Tax
Return” means any return, declaration, report, claim for refund or information return or statement relating to Taxes
filed or required to be filed with a Governmental Authority, including any schedule or attachment thereto, and including any amendment
thereof.

 

“Third
Party Claim” has the meaning set forth in Section 10.4(a).

 

“Third
Party Consents” has the meaning set forth in Section 4.1(b).

 

“Title
Commitment” has the meaning set forth in Section 6.13(b).

 

“Title
Company” has the meaning set forth in Section 6.13(b).

 

“Title
Policy” has the meaning set forth in Section 6.13(b).

 

“Transaction
Expenses” means an amount equal to 73.93% of the aggregate of (a) all unpaid fees and expenses payable by the Company
or any Company Subsidiary to professional advisors in connection with the transactions contemplated by this Agreement and (b)
any termination payment, severance payment, change-in-control payment, and any bonus or other form of compensation that (1) is
payable or will become payable by the Company or any Company Subsidiary upon the Closing or (2) would become payable by the Company
or any Company Subsidiary after the Closing following a separation from service, or upon the replacement or termination of a Material
Contract relating to, resulting from or arising out of the Closing or expiration of the Transition Services Agreement.

 

“Transfer
Taxes” has the meaning set forth in ‎Section 11.1(b).

 

“Transferred
Employees” has the meaning set forth in Section 6.8(a).

 

“Transition
Services” means those certain services that are provided by Seller or an Affiliate (including Parent) for the benefit
of the Business, Company and the Company Subsidiaries prior to the Closing and which will continue to be needed by Buyer for a
transitional period following the Closing, including plant management services, network and information technology services, accounting,
legal and regulatory compliance, consulting and engineering services, and any other services provided pursuant to the Asset Management
Agreement.

 

“Transition
Services Agreement” means that certain Transition Services Agreement in the form of Exhibit D between Parent,
Seller and Buyer pursuant to which Parent or an Affiliate will provide Transition Services.

 

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Article
2

PURCHASE AND SALE OF THE COMPANY Interests

 

2.1 Purchase
and Sale of the Company Interests. Upon the terms and subject to the conditions set forth in this Agreement, at the Closing,
Buyer shall purchase from Seller, and Seller shall sell, convey, assign, transfer, and deliver to Buyer, the Company Interests,
free and clear of any Liens.

 

2.2 Closing.
Subject to the satisfaction or waiver of the conditions precedent specified in Article 8, the closing of the transactions
contemplated by this Agreement (collectively, the “Closing”) will take place electronically, as soon as practicable
on or after the execution and delivery of this Agreement, but in any event no later than five (5) Business Days following the
satisfaction or waiver of the conditions precedent specified in Article 8, or at such other time, date and place as the
Parties may mutually agree in writing. The date on which the Closing occurs is hereinafter referred to as the “Closing
Date”. The Parties mutually agree that the Closing may take place by the electronic exchange of executed counterpart
documents and the electronic transfer of funds.

 

2.3 Consideration.

 

(a) Base
Purchase Price. The purchase price for the Company Interests shall be an amount equal to Fifty-Two Million Seven Hundred Eighty-Nine
Thousand Four Hundred Twenty-Five Dollars ($52,789,425) (the “Base Purchase Price”), which is calculated as
Fifty Cents ($0.50) times the Aurora Facility’s Production Capacity, times the Pro Rata Share, minus
the Aurora East Restart Credit.

 

(b) Payments
at Closing. At the Closing, Buyer shall remit the Adjusted Purchase Price as follows: (i) paying, or causing to be paid, by
wire transfer of immediately available funds to Seller, an amount in cash equal to the Closing Cash Payment Amount to the account
designated by Seller in a statement provided to Buyer on or before the Closing Date; (ii) executing and delivering the Seller
Notes to Seller; and (iii) paying, or causing to be paid, on behalf, and at the direction, of Seller and the Company, any Indebtedness
of the Company and any Company Subsidiary and any Transaction Expenses as set forth in the Estimated Closing Date Statement.

 

(c) Fair
Market Value. The Parties acknowledge and agree that the Base Purchase Price and other consideration to be received by Seller
hereunder for the Company Interests is not less than the Fair Market Value of the Company Interests.

 

2.4 Estimated
Closing Date Statement. Not less than five (5) Business Days prior to the Closing Date, Seller shall deliver to Buyer a statement
(the “Estimated Closing Date Statement”) containing a good faith estimate (in reasonable detail), together
with reasonably detailed supporting documentation, of the Adjusted Purchase Price and Closing Cash Payment Amount and all elements
thereof calculated as of the Closing Date, including the Indebtedness of the Company and any Company Subsidiary, all Transaction
Expenses, each Seller Intercompany Payable, each Seller Intercompany Receivable, Net Working Capital and the resulting Net Working
Capital Adjustment Amount derived therefrom. The Estimated Closing Date Statement will be prepared in accordance with the Accounting
Policies. Buyer may until two (2) Business Days prior to the Closing Date provide Seller with comments to the Estimated Closing
Date Statement and Seller shall consider in good faith Buyer’s reasonable comments. The Cash Payment Amount, as determined
by Seller pursuant to this Section 2.4, shall be referred to herein as the “Closing Cash Payment Amount.”

 

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2.5 Post-Closing
Adjustment.

 

(a) Closing
Date Statement. Within sixty (60) days after the Closing Date, Buyer shall prepare and deliver, or cause to be prepared and
delivered, to Seller a statement (the “Closing Date Statement”) setting forth in reasonable detail Buyer’s
calculation of the Adjusted Purchase Price and the Cash Payment Amount and all elements thereof, including the Indebtedness of
the Company and any Company Subsidiary, any Transaction Expenses, each Seller Intercompany Payable, each Seller Intercompany Receivable,
Net Working Capital, and the resulting Net Working Capital Adjustment Amount derived therefrom. Together with the Closing Date
Statement, Buyer shall provide Seller with reasonable supporting documentation of such calculation. The Closing Date Statement
will be prepared in accordance with the Accounting Policies.

 

(b) Disputes.

 

(i) If
Seller objects to Buyer’s calculation of the Cash Payment Amount (or the Adjusted Purchase Price used therein) as set forth
in the Closing Date Statement, then, within fifteen (15) days after the delivery to Seller of the Closing Date Statement (the
“Review Period”), Seller shall deliver to Buyer a written notice (a “Dispute Notice”) describing
in reasonable detail Seller’s objections to Buyer’s calculation of the amounts set forth in such Closing Date Statement
and containing a statement setting forth the calculation of Net Working Capital (including Cash and Cash Equivalents, Current
Assets, Current Liabilities and each of the other components thereof) as of the Closing Date, the resulting Net Working Capital
Adjustment Amount, Transaction Expenses and the Cash Payment Amount, in each case determined by Seller to be correct. Seller shall
be deemed to have agreed with the calculation of all amounts not specifically referenced in the Dispute Notice, and such calculations
shall be binding and conclusive on the Parties and shall not be subject to review in accordance with Section 2.5(b)(ii).
If Seller does not deliver a Dispute Notice to Buyer during the Review Period, then Buyer’s calculation of the amounts set
forth in the Closing Date Statement shall be binding and conclusive on the Parties.

 

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(ii) During
the fifteen (15) day period following delivery of a Dispute Notice by Seller to Buyer, Buyer and Seller shall use all reasonable
efforts to resolve in writing any differences that they may have with respect to the disputed portions of the Closing Date Statement
as specified in such Dispute Notice. Any disputed items resolved in writing between Buyer and Seller within such fifteen (15)
day period shall be binding and conclusive on the Parties. If Buyer and Seller have not resolved all such differences by the end
of such fifteen (15) day period (or any mutually agreed extension thereof), then Buyer and Seller shall jointly engage the Independent
Accountant to resolve any items remaining in dispute (and only such items). Within ten (10) days after the Independent Accountant
is appointed, Buyer shall forward a copy of the Closing Date Statement to the Independent Accountant, and Seller shall forward
a copy of the Dispute Notice to the Independent Accountant, together with, in each case, all relevant supporting documentation.
The Independent Accountant’s role shall be limited to resolving such objections and determining the correct calculations
to be used on only the disputed portions of the Closing Date Statement (including any dispute with respect to the timeliness of
delivery or receipt of any Dispute Notice), and the Independent Accountant shall not make any other determination, including any
determination as to whether any other items on the Closing Date Statement are correct. The Independent Accountant shall not assign
a value to any item greater than the greatest value for such item claimed by Seller or Buyer or less than the smallest value for
such item claimed by Seller or Buyer and shall be limited to the selection of either Seller’s or Buyer’s position
on a disputed item (or a position in between the positions of Seller or Buyer) based solely on presentations and supporting material
provided by the Parties and not pursuant to any independent review. In resolving such objections, the Independent Accountant shall
apply the provisions of this Agreement concerning determination of the amounts set forth in the Closing Date Statement, including
the definitions of Adjusted Purchase Price, Transaction Expenses, Indebtedness, Seller Intercompany Payable, Seller Intercompany
Receivable, Net Working Capital, Net Working Capital Adjustment Amount, and Cash Payment Amount contained herein (and the definitions
of the defined terms contained therein, including Cash and Cash Equivalents, Current Assets, and Current Liabilities). The Independent
Accountant shall be instructed to use its best efforts to the extent commercially reasonable to deliver to Seller and Buyer a
written determination (such determination to include a work sheet setting forth all material calculations used in arriving at
such determination and to be based solely on information provided to the Independent Accountant by Seller and Buyer) of the disputed
items submitted to the Independent Accountant within forty-five (45) days of receipt of such disputed items. The determination
by the Independent Accountant of the disputed amounts, the Adjusted Purchase Price and the Cash Payment Amount shall be conclusive
and binding on the Parties, absent manifest error. The fees and expenses of the Independent Accountant for such determination
shall be borne by Seller, on the one hand, and Buyer, on the other hand, in inverse proportion to the manner in which such Person
or Persons prevails on the items resolved by the Independent Accountant, which proportionate allocation shall be calculated on
an aggregate basis based on the relative dollar values of the amounts in dispute and shall be computed by the Independent Accountant
at the time its determination of the items in dispute is rendered. For example, should the items in dispute total in amount to
$1,000 and the Independent Accountant awards $600 in favor of Seller’s position, 60% of the costs and expenses of the Independent
Accountant would be borne by Buyer and 40% would be borne by Seller. The Cash Payment Amount, as finally determined pursuant to
this Section 2.5(b), including due to any changes in the Adjusted Purchase Price, shall be referred to herein as the “Final
Cash Payment Amount”.

 

(c) Payment
of Post-Closing Adjustment.

 

(i) If
the Final Cash Payment Amount exceeds the Closing Cash Payment Amount (such excess, a “Cash Payment Increase”),
then, at Buyer’s election, within two (2) Business Days following the final determination of the Final Cash Payment Amount,
either (i) Buyer shall pay to Seller an amount equal to the Cash Payment Increase, by wire transfer of immediately available
funds to an account designated by Seller in writing prior to such payment date, or (ii) Seller and Buyer shall execute an amendment
or supplement to the Seller Non-Negotiable Note to increase the principal amount of the Seller Non-Negotiable Note by an amount
equal to the Cash Payment Increase. Buyer agrees to take no action inconsistent with Seller’s treatment of such payment
as a deferred payment under Section 453 of the Code if it is made in the calendar year following the calendar year in which the
Closing occurs.

 

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(ii) If
the Closing Cash Payment Amount exceeds the Final Cash Payment Amount (such excess, a “Cash Payment Decrease”),
then, at Buyer’s election, within two (2) Business Days following the final determination of the Final Cash Payment Amount,
either (i) Seller shall pay to Buyer an amount equal to the Cash Payment Decrease, by wire transfer of immediately available
funds to an account (or accounts) designated by Buyer in writing prior to such payment date, or (ii) Seller and Buyer shall execute
an amendment or supplement to the Seller Non-Negotiable Note to decrease the principal amount of the Seller Non-Negotiable Note
by an amount equal to the Cash Payment Decrease.

 

(d) Cooperation.
For purposes of complying with the terms set forth in Sections 2.5(c) and 2.5(d), each of Buyer and Seller shall
cooperate with each other and make available to the other Party or Parties, the other Party’s representatives and the Independent
Accountant all information, records, data and working papers, and shall permit access to its facilities and personnel, as may
be reasonably required in connection with the resolution of any disputes thereunder.

 

2.6 Required
Withholdings. Notwithstanding anything to the contrary set forth in this Agreement, Buyer shall be entitled to deduct and
withhold from the consideration otherwise payable pursuant to this Agreement to Seller such amounts as are required under the
Code or any provision of state, local or foreign Tax Law. To the extent that amounts are so withheld by Buyer, such withheld amounts
will be treated for all purposes of this Agreement as having been paid to Seller.

 

Article
3

REPRESENTATIONS AND WARRANTIES OF SELLER

 

Except
as set forth in the correspondingly numbered Section of the schedules accompanying this Agreement (each a “Schedule”
and, collectively, the “Disclosure Schedules”), Seller represents and warrants to Buyer as follows:

 

3.1 Title
to Company Interests.

 

(a) Seller
is the sole record and beneficial owner of the Company Interests, free and clear of all Liens. Seller has good and marketable
title to the Company Interests and has the full power and authority to sell, transfer, assign and deliver the Company Interests
to Buyer upon the terms and subject to the conditions set forth in this Agreement.

 

(b) Other
than as set forth in the Company Operating Agreement, Seller is not a party to any option, warrant, purchase right, right of first
refusal, right of first offer or any Contract relating to the voting of, or requiring the issuance, transfer or sale of, any Equity
Interests of the Company or any Company Subsidiary.

 

(c) Upon
assignment of and payment for the Company Interests, Buyer will acquire good, valid, and marketable title to and record and beneficial
ownership of the Company Interests, free and clear of any Lien other than any Liens created by Buyer.

 

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3.2 Organization;
Good Standing. Seller is duly organized, validly existing and in good standing under the Laws of the jurisdiction of its organization.
The Organizational Documents of Seller are in full force and effect, and Seller is not in material violation of any of the provisions
of its Organizational Documents.

 

3.3 Power
and Authority. Seller has all requisite power, capacity and authority to execute and deliver this Agreement and each other
agreement, document, instrument and/or certificate contemplated by this Agreement to be executed in connection with the transactions
contemplated hereby (collectively, the “Ancillary Agreements”) to which it is a party and to perform its obligations
hereunder and thereunder and to consummate the transactions contemplated hereby and thereby. The execution and delivery by Seller
of this Agreement and each Ancillary Agreement, and the consummation of the transactions contemplated hereby and thereby, have
been duly and validly authorized by all necessary action on the part of Seller, and no other or further action or proceeding on
the part of Seller is necessary to authorize the execution and delivery by Seller of this Agreement and the consummation by Seller
of the transactions contemplated hereby. This Agreement has been duly and validly executed and delivered by Seller and, assuming
the due and valid authorization, execution and delivery of this Agreement by Buyer, constitutes a valid and binding obligation
of Seller, enforceable against him in accordance with its terms and conditions, subject to General Principles of Law, Equity and
Public Policy. No votes, approvals, consents or proceedings of the holders of the Equity Interests of Seller are necessary in
connection with execution and delivery of, or the performance by Seller of its obligations under, this Agreement and the Ancillary
Agreements or the consummation by Seller of the transactions contemplated hereby or thereby, other than any such votes, approvals,
consents or proceedings obtained on or prior to the date of this Agreement.

 

3.4 Consents
and Approvals; No Violation.

 

(a) Except
for the consents, approvals or notices set forth on Schedule 3.4(a) (the “Seller Required Government Approvals”),
Seller is not required to give any notice to, make any filing with, or obtain any authorization, consent, or approval of, any
Governmental Authority in connection with the execution, delivery and performance by Seller or Company of this Agreement or any
of the Ancillary Agreements to which it is a party or the consummation of the transactions contemplated hereby and thereby, other
than such notices, filings, authorizations, consents or approvals that, if not given, made or obtained, will not or would not
reasonably be expected to result in a Material Adverse Effect.

 

(b) The
execution, delivery and performance by Seller of this Agreement and the Ancillary Agreements, and the consummation of the transactions
contemplated hereby and thereby, does not violate any Law or Order to which Seller is subject and will not constitute a violation
of, or be in conflict with, or constitute or create a default under, or give rise to a loss or create or trigger any payment obligation
for the account of the Company under the Organizational Documents of Seller or any Contract to which Seller is a party.

 

3.5 Litigation.
There is no Action, hearing or investigation pending or, to the Knowledge of Seller, threatened against Seller (i) pertaining
to the Company Interests, the Company or the Business, or (ii) that challenges, or will have the effect of preventing, materially
delaying, making illegal, or otherwise materially interfering with, the execution of this Agreement or the consummation of the
transactions contemplated hereby. Seller is not subject to any outstanding Order that would prevent, delay, make illegal or otherwise
interfere with, the execution of this Agreement or the consummation of the transactions contemplated hereby.

 

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3.6 Brokers’
Fees. Except as set forth on Schedule 3.6 of the Disclosure Schedules, none of Seller, Parent, Company or any Company
Subsidiary has any Liability to pay any fees or commissions to any broker, finder, investment banker, agent or intermediary with
respect to the transactions contemplated by this Agreement.

 

Article
4

REPRESENTATIONS AND WARRANTIES REGARDING THE COMPANY

 

Except
as set forth in the correspondingly numbered Section of the Disclosure Schedules, Seller represents and warrants to Buyer as follows:

 

4.1 Consents
and Approvals; No Violation.

 

(a) Except
as set forth on Schedule 4.1(a) (the “Company Required Governmental Approvals”), neither the Company
nor any Company Subsidiary is required to give any notice to, make any filing with, or obtain any authorization, consent, or approval
of any Governmental Authority in connection with the execution, delivery and performance by the Company of this Agreement or any
of the Ancillary Agreements to which it is a party or the consummation of the transactions contemplated hereby and thereby, other
than such notices, filings, authorizations, consents or approvals that, if not given, made or obtained, will not or would not
reasonably be expected to (i) result in the termination, cancellation, modification or acceleration (whether after the filing
of notice or the lapse of time or both) of any material right or obligation of the Company or any Company Subsidiary pursuant
to any Material Contract or Permit or (ii) result in a Material Adverse Effect.

 

(b) Except
as set forth on Schedule 4.1(b), the execution, delivery and performance by the Company of this Agreement and the Ancillary
Agreements, and the consummation of the transactions contemplated hereby and thereby, does not: (i) violate any provision of the
Organizational Documents of the Company or any Company Subsidiary; (ii) violate any Law or Order to which the Company or
any Company Subsidiary is subject; (iii) violate, or result in a material breach of, constitute a material default under,
or result in the termination, cancellation, modification or acceleration (whether after the filing of notice or the lapse of time
or both) of any material right or obligation of the Company or any Company Subsidiary under any Contract or result in the creation
of a Lien upon any material asset of the Company or any Company Subsidiary, or (iv) result in any obligation by the Company or
any Company Subsidiary to provide or obtain any notice, authorization, consent or approval by any Person pursuant to any Contract
(“Third Party Consents”), except, in the case of clauses (ii), (iii) and (iv), as would reasonably be expected
to have a Material Adverse Effect.

 

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4.2 Capitalization;
Subsidiaries.

 

(a) Schedule
4.2(a) sets forth the capitalization of each Company Subsidiary. The Company is the legal and beneficial owner of all of the
Equity Interests of each of the Company Subsidiaries, free and clear of Liens, and has good and marketable title to all of the
Equity Interests of each of the Company Subsidiaries. The Company does not, either directly or indirectly, own of record or beneficially
any Equity Interests in any Person other than the Company Subsidiaries, and each Company Subsidiary does not, either directly
or indirectly, own of record or beneficially any Equity Interests in any Person.

 

(b) All
of the Company Interests and the issued and outstanding Equity Interests of each Company Subsidiary have been duly authorized,
and are validly issued, fully paid and nonassessable. There are no outstanding equity appreciation rights, profit participation
or other similar rights with respect to the Company Interests or the Equity Interests of any Company Subsidiary. There are no
outstanding obligations of the Company or any Company Subsidiary to repurchase, redeem or otherwise acquire any Equity Interests
of the Company or a Company Subsidiary.

 

(c) Other
than as set forth in the Company Operating Agreement, neither the Company nor any Company Subsidiary is a party to any option,
warrant, purchase right, right of first refusal, right of first offer or any Contract relating to the voting of, or requiring
the issuance, transfer or sale of, any Equity Interests of the Company or any Company Subsidiary.

 

4.3 Real
Property.

 

(a) Owned
Real Property.

 

(i) Schedule
4.3(a) lists all real property owned by the Company or any Company Subsidiary (the “Owned Real Property”),
with a description of each property and identification of the record owner of such property. Except as set forth on Schedule 4.3(b),
neither the Company nor any Company Subsidiary owns or has any interest in any real property other than the Owned Real Property.

 

(ii) With
respect to each parcel of Owned Real Property:

 

(A) the
Company or a Company Subsidiary has good, marketable and insurable fee title, free and clear of all Liens except for Permitted
Liens;

 

(B) neither
the Company, Seller nor any Affiliate of the Company has granted to any Person the right to use or occupy, possess or operate
such Owned Real Property or any portion thereof, except those in favor of Buyer; and

 

(C) there
are no outstanding options, rights of first refusal, rights of first offer, or other rights to purchase such Owned Real Property
or any portion thereof or interest therein, except those in favor of Buyer.

 

(iii) none
of the improvements to the Owned Real Property encroaches on any land that is not included in the Owned Real Property or on any
easement affecting the Owned Real Property, or violates any building lines or set-back lines, and there are no encroachments onto
such Owned Real Property, or any portion thereof, that, in each case, could reasonably be expected to materially interfere with
the use or occupancy of such Owned Real Property or the operation of the Business or materially and adversely affect the value
of the Owned Real Property or the Business.

 

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(b) Leased
Real Property. Schedule 4.3(b) sets forth a description of each Leased Real Property, and a true and complete list
of all Leases for each such Leased Real Property, as amended and modified to date (the “Real Property Leases”).
Except as set forth on Schedule 4.3(b), with respect to each of the Real Property Leases: (i) the Company or a Company
Subsidiary enjoys peaceful and undisturbed possession under such Real Property Leases; (ii) all rent payable under such Real Property
Leases has been paid on or before its due date; (iii) neither the Company nor any Company Subsidiary is subleasing, licensing,
or otherwise granting to any Person the right to use, possess or operate such Leased Real Property or any portion thereof; and
(iv) neither the Company nor any Company Subsidiary is in default under any Real Property Leases and no written notice has been
given that with the passage of time would constitute a default under any of the Real Property Leases. Assuming that the Real Property
Leases are a valid and binding obligation of the other parties thereto, the Real Property Leases constitute valid and binding
obligations of the Company or a Company Subsidiary, as applicable, enforceable in accordance with their terms, subject to General
Principles of Law, Equity and Public Policy.

 

(c) Except
for the Owned Real Property and Leased Real Property, there is no other real property (including easements and rights-of-way,
and buildings, wires, pipes, structures and other improvements and fixtures) that is material to or necessary in any material
respect for the operations of the Business.

 

(d) There
is no condemnation, expropriation or other proceeding in eminent domain, pending or, to Seller’s Knowledge, threatened,
affecting any Owned Real Property, Leased Real Property, or any portion thereof or interest therein. The use or occupancy by the
Company or any Company Subsidiary of the Owned Real Property and Leased Real Property or any portion thereof, and the operation
of the Business thereon, is in compliance in all material respects with land use Laws applicable to such real property.

 

(e) All
utility services or systems for the Owned Real Property and the Leased Real Property are installed, connected, operational and
sufficient for the operations of the Business, including, without limitation, connection with and the right to discharge sanitary
waste into the collector system of the appropriate sewer authority. All charges for such utility services and systems are paid
in full including, without limitation, charges and fees for usage, operation, installation and connection.

 

4.4 Financial
Statements.

 

(a) True,
correct and complete copies of the following financial statements have been delivered or made available to Buyer prior to the
date hereof:

 

(i) the
consolidated audited balance sheet of the Company and the Company Subsidiaries as of December 31, 2018 and the related consolidated
statements of income, cash flows and changes in members’ equity of the Company and the Company Subsidiaries for the year
then ended (the “2018 Financial Statements”); and

 

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(ii) the
consolidated unaudited balance sheet of the Company and the Company Subsidiaries as of December 31, 2019 (the “Balance
Sheet Date”) and the related consolidated statements of income, cash flows and changes in members’ equity for
the period then ended (the “Interim Financial Statements” and, together with the 2018 Financial Statements,
the “Financial Statements”).

 

(b) The
Financial Statements present fairly in all material respects the financial condition and results of operations of the Business
and the Company and the Company Subsidiaries, taken as a whole, as of the dates thereof and for the periods covered thereby. The
Financial Statements have been prepared in accordance with GAAP, except that the Interim Financial Statements do not reflect year-end
adjustments (including, without limitation, a significant impairment of the value of the Company’s fixed assets) and do
not contain footnote disclosures and other presentation items.

 

(c) All
accounts receivable of the Company and Company Subsidiaries that are reflected on the Interim Financial Statements and thereafter
acquired through the Closing and reflected on the Estimated Closing Date Statement (collectively, the “Receivables”)
constitute bona fide receivables resulting from the sale of goods or services actually performed for Persons other than the Company
or the Company Subsidiaries. The Receivables (including the Intercompany Receivables) constitute only valid, undisputed claims
of the Company or a Company Subsidiary not subject to claims of set-off or other defenses or counterclaims other than normal reserves
accrued in the Ordinary Course and in accordance with the Accounting Policies. The reserve allowance for doubtful accounts shown
on the Interim Financial Statements, if any, has been recorded in accordance with the Accounting Policies and is reasonable in
amount based upon the Company’s and the Company Subsidiaries’ collection histories and facts known to the Company
and Seller with respect to current Receivables. All Seller Intercompany Receivables (in excess of the reserve for accounts receivables
shown on the Estimated Closing Date Statement) are and shall be collectible in their recorded amounts in accordance with GAAP
and the Ordinary Course.

 

(d) Except
as provided in Section 4.4(e), all inventory of the Company and the Company Subsidiaries that is reflected on the Interim
Financial Statements and thereafter acquired through the Closing and reflected on the Estimated Closing Date Statement (collectively,
the “Inventory”): (i) does not and will not include any items below standard quality, damaged or spoiled, obsolete
or of a quality or quantity not usable or saleable in the in the Ordinary Course, subject only to the reserve for inventory writedown
reflected or reserved against in the Interim Financial Statements as adjusted for operations and transactions through the Closing
Date, (ii) has been priced at the lower of cost or net realizable value, with cost being determined on a first-in, first-out basis,
and (iii) does not and will not consist of any items held or sold on consignment. The Company and the Company Subsidiaries are
not under any material obligation or liability, whether individually or in the aggregate, with respect to accepting returns of
items of inventory or merchandise in the possession of customers. All Inventory is stored on site at the Aurora Facility.

 

(e) Except
as set forth on Schedule 4.4(e),

 

(i) All
ethanol inventory of the Company and the Company Subsidiaries meets the specifications set forth in Exhibit E;

 

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(ii) All
ethanol inventory acquired by Kinergy pursuant to the Ethanol Marketing Agreement meets the specifications set forth in Exhibit
E; and

 

(f) The
Aurora Facility’s Production Capacity is no less than 144.5 million gallons per year.

 

4.5 Assets
Used in Business.

 

(a) Except
as set forth on Schedule 4.5(a) and subject to representations and warranty qualifications set forth in Section 4.3,

 

(i) The
Company and the Company Subsidiaries have good and valid title to, or valid leasehold interests in, all material tangible personal
property used in the Business, free and clear of all Liens other than Permitted Liens.

 

(ii) The
assets used in the operation of the Business, including the Aurora Facility, (A) are in good repair, order and operating condition,
subject to normal wear and tear, have no material deferred maintenance obligation and (B) have been installed, constructed, inspected
and maintained in (1) accordance with customary practices and standards in the industry in which the Business operates, and (2)
material compliance with all applicable Laws and warranties.

 

(b) Except
as set forth on Schedule 4.5(b), the buildings, facilities, structures, equipment, Contracts, products, real property,
Intellectual Property, and other assets owned or leased by the Company or a Company Subsidiary constitute all assets and property,
real and personal, tangible and intangible, used by the Company with respect to the Business and are sufficient in all material
respects for the continued conduct of the Business after the Closing in the substantially the same manner as conducted prior to
the Closing.

 

(c) Schedule
4.5(c) lists the railroad cars used in connection with the Business (the “Railcar Fleet”) including the
type of railroad car (including whether such railroad car is a J car), the owner (or if not owned, the lessee) of the railroad
car, and the lessor (if applicable) of the railroad car.

 

(d) Except
as set forth on Schedule 4.5(d), neither Seller nor any of its Affiliates has custody, possession or control of any personal
property located off the premises of the Aurora Facility belonging to Buyer, any of Buyer’s Affiliates, Company or any Company
Subsidiary (“Off-Premises Property”).

 

4.6 Absence
of Certain Changes. Except as expressly contemplated or permitted by this Agreement, since the Balance Sheet Date:

 

(a) to
Seller’s Knowledge, there has not occurred any change or event that has resulted in a Material Adverse Effect;

 

(b) no
material portion of its assets or property (tangible or intangible) of the Company or any Company Subsidiary has been sold, transferred,
leased, mortgaged, pledged or otherwise subjected to any Lien (other than Permitted Liens);

 

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(c) neither
the Company nor any Company Subsidiary has entered into any Contract or other enforceable obligation to make an acquisition (whether
by merger, acquisition of Equity Interests or assets, or otherwise) of any business or line of business;

 

(d) there
has not been any change in the Organizational Documents of the Company or any Company Subsidiary;

 

(e) no
election has been made or action taken to change the status of the Company or any Company Subsidiary for federal, state or local
income Tax purposes;

 

(f) there
has not been any damage, destruction or loss, whether or not covered by insurance, with respect to the property and assets of
the Company or any Company Subsidiary having a replacement cost of $25,000 in the aggregate;

 

(g) neither
the Company nor any Company Subsidiary has (i) entered into, adopted, amended or terminated any Contract relating to the compensation
or severance of any employee, independent contractors or consultants,
(ii) increased or agreed to increase the salary payable or to become payable by it to any of the Company’s or Company
Subsidiary’s employees, independent contractors or consultants
or agreed to materially increase the coverage or benefits available under any severance pay, termination pay, deferred
compensation, bonus or other incentive compensation plan or arrangement, (iii) made, granted, announced any material change to,
amended, adopted or terminated any Employee Benefit Plan that is sponsored or adopted by the Company or any Company Subsidiary
or (iv) made any commitment or incurred any Liability to any labor organization;

 

(h) neither
the Company nor any Company Subsidiary has (i) made any material change in its accounting or Tax reporting methods, principles
or policies including with respect to the payment of accounts payable or the collection of accounts receivable, (ii) settled or
compromised any material Tax liability, (iii) made, changed or rescinded any material Tax election or accounting method, (iv)
surrendered any material right in respect of Taxes, (v) filed an amended Tax Return, (vi) entered into any closing agreement with
respect to Taxes, (vii) incurred any material liability for Taxes outside the ordinary course of business, (viii) failed to pay
any material Tax that became due and payable (including any estimated tax payments), (ix) prepared or filed any Tax Return in
a manner inconsistent with past practice or (x) consented to any extension or waiver of the limitation period applicable to any
claim or assessment in respect of Taxes;

 

(i) neither
the Company nor any Company Subsidiary has declared, set aside or paid any dividend or made any distribution with respect to its
Equity Interests (whether in cash or in kind) or redeemed, purchased, or otherwise acquired any of its Equity Interests;

 

(j) neither
the Company nor any Company Subsidiary has issued, delivered or sold any Equity Interests of the Company or any Company Subsidiary
(whether by merger, consolidation or otherwise);

 

(k) neither
the Company nor any Company Subsidiary has made any loans, advances or capital contributions to, or investments in, any other
Person;

 

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(l) (i)
neither the Company nor any Company Subsidiary is in default or violation under any of the Permits and no event has occurred that,
with or without notice or lapse of time or both, would reasonably be expected to result in the revocation, suspension, lapse or
limitation of any Permit and (ii) there are no actions, suits or proceedings pending or, to Seller’s Knowledge, threatened
in writing relating to the suspension or revocation of any of the Permits;

 

(m) neither
the Company nor any Company Subsidiary has materially altered the manner in which it maintains its minute books and membership
interest record books;

 

(n) neither
the Company nor any Company Subsidiary has, except in the Ordinary Course (i) engaged in any activity that would reasonably be
expected to result in a material reduction, temporary or otherwise, in the demand for, or an increase in the cancellation of services
offered by the Company following the Closing Date, including sales on terms or at prices outside the Ordinary Course, (ii) accelerated
the receipt of accounts receivable or engaged in any other activity with customers that would reasonably be expected to have the
material effect of accelerating to pre-Closing periods accounts receivable that would otherwise be collected in post-Closing periods,
(iii) operated inconsistent with its historical cash management practices (including with respect to collection of accounts receivable,
payment of accounts payable and accrued expenses, pricing and credit practices and operation of cash management practices generally),
or (iv) except as set forth on Schedule 4.5(a), materially delayed, postponed or cancelled any planned, budgeted or routine
capital expenditures;

 

(o) neither
the Company nor any Company Subsidiary has made any material changes to its operations that is reasonably likely to materially
increase the Company’s or any Company Subsidiary’s risk of potential third party claims; and

 

(p) neither
the Company nor any Company Subsidiary has committed to do any of the foregoing.

 

4.7 Compliance
with Law; Permits.

 

(a) Except
as set forth on Schedule 4.7(a), the Company and each Company Subsidiary has been and is in compliance in all material
respects with all applicable Laws and Orders. No Action alleging any failure to comply with any applicable Law or Order is pending
or, to the Knowledge of Seller, threatened against the Company or any Company Subsidiary.

 

(b) Schedule
4.7(b) sets forth all Permits (including the name of the holder, issuing authority, effective date and expiration date) which
are required in connection with the conduct of the Business (the “Business Permits”). Each such Permit is in
full force and effect, the holder of such Permit is in compliance in all material respects with the terms and conditions of all
such Permits, and there is no pending proceeding by or before any Governmental Authority to suspend, revoke, or cancel any Permit,
or any judicial review of a decision by any Governmental Authority with respect thereto.

 

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4.8 Environmental
Matters. Except as disclosed on (i) Schedule 4.8, (ii) the Phase I survey prepared for Buyer by Geotechnical Services,
Inc. dated January 13, 2006, (iii) the Phase I survey prepared for Buyer by Geotechnical Services, Inc. dated May 16, 2012, (iv)
the two Phase I surveys prepared for Pacific Ethanol, Inc. by Pinnacle Engineering Inc. dated January 30, 2015; and (v) any another
other Phase I Survey and/or environmental reports, assessments or audits obtained by Buyer prior to Closing, including any Phase
I Survey:

 

(a) Since
July 1, 2015, neither the Company nor any Company Subsidiary, nor Seller or any of Seller’s Affiliates with respect to the
operation of the Business, has received any notice of any Environmental Action alleging any material violation of, or material
liability under, any Environmental Laws, which allegations remain unresolved;

 

(b) The
Company and the Company Subsidiaries and Seller, and any of Seller’s Affiliates with respect to the operation of the Business,
are and have been since July 1, 2015, in compliance with all Environmental Laws in all material respects, and to Seller’s
Knowledge, there are no events, conditions or Environmental Actions, that would reasonably be expected to result in a Material
Adverse Effect;

 

(c) Since
July 1, 2015, the Company and the Company Subsidiaries, and Seller and any of Seller’s Affiliates with respect to the operation
of the Business, have been and are, in compliance with, all Permits required under Environmental Laws for the establishment and
operation of the Business, except where the failure to have or be in compliance with such Permits would not, individually or in
the aggregate, reasonably be expected to result in a Material Adverse Effect;

 

(d) Since
July 1, 2015, (i) any Hazardous Material transported, stored, used, handled, treated, or disposed of by the Company or the Company
Subsidiaries, or Seller or any of Seller’s Affiliates with respect to the operation of the Business has been done in accordance
with all Environmental Laws, and (ii) no Hazardous Material has been Released or disposed of by any Person at or about the Owned
Real Property or Leased Real Property, in each case, that would result in a material breach or Liability pursuant to any Environmental
Law; and

 

(e) Since
July 1, 2015, neither the Company nor any Company Subsidiary, nor Seller or any of Seller’s Affiliates with respect to the
operation of the Business, has entered into any consent decree or other agreement with any Governmental Authority under any Environmental
Law. To Seller’s Knowledge, neither the Company nor any Company Subsidiary is the named subject of any Environmental Action
relating to any uncured non-compliance with Environmental Law or to Hazardous Materials.

 

4.9 Tax
Matters.

 

(a) All
Tax Returns required to have been filed by or in respect of the Company and the Company Subsidiaries (as any deadlines for filing
may have been extended by duly filed applications for extension) have been timely filed. All such Tax Returns were true, correct
and complete in all respects, and Seller has delivered to Buyer true, correct and complete copies of all Tax Returns filed since
the organization of the Company and the Company Subsidiaries. All Taxes reported on such Tax Returns as due and owing by the Company
or a Company Subsidiary have been paid or are properly reserved against and reflected in the Financial Statements. There are no
Liens for Taxes upon any of the assets of the Company or any Company Subsidiary. The Company or a Company Subsidiary has timely
withheld and paid to the appropriate Governmental Authority all Taxes required to have been withheld and paid by it in connection
with amounts paid or owing to any employee, independent contractor, creditor, or other third party, and all Forms W-2 and 1099
and other applicable forms required with respect thereto have been properly completed and timely filed.

 

    27

     

    

 

(b) There
is no pending, and to the Knowledge of Seller there is no threatened, assessment by any Governmental Authority of any additional
Taxes with respect to the Company or any Company Subsidiary for any period for which Tax Returns have been filed that has not
been finally settled or otherwise resolved. There is no Tax audit, administrative or judicial Tax proceeding pending with respect
to the Company or any Company Subsidiary that has not been finally settled or otherwise resolved. Neither the Company nor any
Company Subsidiary has received from any Governmental Authority any written notice indicating an intent to investigate or open
an audit or other review of any Tax or Tax Return of the Company or any Company Subsidiary that has not been finally settled or
otherwise resolved.

 

(c) Neither
the Company nor any Company Subsidiary has waived any statute of limitations in respect of Taxes or agreed to any extension of
time with respect to a Tax assessment or deficiency which waiver or agreement is still in effect (except for filing extensions
in the ordinary course). No written claim has been made by a jurisdiction in which the Company or any Company Subsidiary does
not file Tax Returns that the Company or any Company Subsidiary is or may be required to file Tax Returns or pay Taxes in such
jurisdiction that has not been finally settled or otherwise resolved.

 

(d) Neither
the Company nor any Company Subsidiary has been a member of an Affiliated Group filing a consolidated federal Tax Return. Neither
the Company nor any Company Subsidiary has any actual or potential liability for the Taxes of any other Person under Treas. Reg.
Section 1.1502-6 (or any similar provision of state, local or foreign Law).

 

(e) Neither
the Company nor any Company Subsidiary is, and neither the Company nor any Company Subsidiary has been a party to, any “reportable
transaction” (as defined in Section 6707A(c)(1) of the Code and Treasury Regulation § 1.6011-4(b)).

 

(f) Neither
the Company nor any Company Subsidiary has been required to include any item of income in, or exclude any item of deduction from,
taxable income for any period beginning prior to the Closing Date as a result of any: (A) change in method of accounting for a
taxable period ending or prior to the Closing Date; (B) “Closing Agreement” as described in Code Section 7121
(or any corresponding or similar provision of state, local, provincial or foreign income Tax Law) executed on or before the Closing
Date; (C) installment sales or open transaction disposition made on or prior to the Closing Date; (D) prepaid amount received
on or before the Closing Date; (E); any prepaid amounts received or paid on or prior to the Closing Date or deferred revenue realized
or received on or prior to the Closing Date; or (F) election under Code § 108(i).

 

4.10 Intellectual
Property.

 

(a) The
Company owns no Intellectual Property. To Seller’s Knowledge, the conduct of the Business as currently conducted does not
infringe on the Intellectual Property rights of any third-party.

 

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(b) To
the Knowledge of Seller, except as set forth on Schedule 4.10(b), the Company or a Company Subsidiary owns or possesses,
free and clear of all Liens (other than Permitted Liens), all right, title and interest in and to each License that is material
to the conduct of the Business, other than: (i) Licenses governing open source software or (ii) Licenses for generally commercially
available “off-the-shelf” software obtained from a third party on general commercial terms. None of the Company, or,
to Seller’s Knowledge, any other party thereto, is in default under any License, and each License is in full force and effect
as to the Company, and to the Seller’s Knowledge, as to each other party thereto, except for such defaults and failures
to be so in full force and effect as would not, individually or in the aggregate, reasonably be expected to result in a Material
Adverse Effect.

 

4.11 Contracts.

 

(a) Schedule
4.11(a) lists the following Contracts to which Company or a Company Subsidiary is a party, or which Seller or a Seller Affiliate
is a party and which Contract provides rights or benefits used in the conduct or operation of the Business (each, a “Material
Contract”):

 

(i) the
Asset Management Agreement;

 

(ii) each
Facility Agreement;

 

(iii) any
Real Property Lease;

 

(iv) any
lease or other Contract with respect to any railroad car in the Railcar Fleet;

 

(v) each
Contract evidencing an Intercompany Payable or an Intercompany Receivable;

 

(vi) any
Contract that (A) involves or may result in payment obligations by Company or any Company Subsidiary in an amount in excess of
$25,000 during any calendar year or $50,000 over the remaining term of the Contract, (B) constitutes Indebtedness of Company or
any Company Subsidiary in an amount in excess of $25,000 or (C) is otherwise reasonably necessary for the operation of the Aurora
Facility;

 

(vii) any
Contract that involves any partnership, strategic alliance, joint venture or sharing of profits by the Company or a Company Subsidiary
with any other Person;

 

(viii) any
Contract that (A) has an unexpired term of more than two years (including renewals), (B) cannot be terminated by the Company without
penalty upon less than 30 days’ notice, (C) would result in the termination of, or gives any other party thereto the right
to terminate, such Contract upon consummation of the transactions contemplated hereby, or (D) the termination of which or under
which the loss of rights, would have a Material Adverse Effect on the Company, any Company Subsidiary or the Business;

 

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(ix) any
employment agreement, severance agreement, change-in-control agreement and Contracts with independent contractors or consultants
(or similar arrangements) to which the Company or a Company Subsidiary is a party, other than any such Contract that is terminable
without penalty, liability or premium “at will” or upon notice of ninety (90) days or less;

 

(x) any
Contract with any Governmental Authority or any prime contractor or subcontractor to a Governmental Authority to which the Company
is a party;

 

(xi) any
Contract obligating the Company or a Company Subsidiary: (A) to refrain from competing with any business, (B) to refrain
from conducting business in any particular jurisdiction, or (C) to refrain from conducting any business with certain parties;

 

(xii) any
Contract that provides for an exclusive arrangement with a third party vendor;

 

(xiii) any
Contract that provides for the indemnification of any Person or the payment of any earn-out or other contingent obligations by
the Company or the assumption of any Tax, environmental or other Liability of any Person by the Company or a Company Subsidiary;

 

(xiv) any
Contract that relates to the acquisition or disposition of any business, a material amount of stock or assets of any other Person
or any real property (whether by merger, sale of stock, sale of assets or otherwise);

 

(xv) any
Contract that (A) contains a right of first refusal, first offer or first negotiation with respect to any asset owned by the Company
or a Company Subsidiary that is material to the Company or a Company Subsidiary or (B) contains any “most favored nation”
or similar provision

 

(xvi) any
Contract relating to the construction, operation or maintenance of the Aurora Facility and any access agreement, easement, use
agreement with respect to any portion of the Owned Real Property or Leased Real Property;

 

(xvii) any
Commodity Hedging Arrangement; and

 

(xviii) any
Contract to which the Company or any Company Subsidiary is a party relating to any Cleanup or Environmental Action.

 

(b) Seller
has delivered or made available to Buyer a true, correct and complete copy of each Material Contract. With respect to each such
Material Contract: (i) such Material Contract is in full force and effect and constitutes a legal, valid and binding obligation
of the Company or a Company Subsidiary, enforceable in accordance with its terms and conditions, subject to General Principles
of Law, Equity and Public Policy; (ii) neither the Company nor any Company Subsidiary is in breach or default in any material
respect under such Material Contract; and (iii) to the Knowledge of Seller, no event has occurred since January 1, 2018 or
circumstance exists which, with notice or lapse of time or both, would constitute such a breach or default, or permit termination,
modification, or acceleration, under such Material Contract.

 

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4.12 Employment
and Labor Matters.

 

(a) Neither
the Company nor any Company Subsidiary has any employees, including, but not limited to, leased employees as defined in Section
414(n) of the Code.

 

(b) Schedule
4.12(b) sets forth all employees of Seller or its Affiliates who are assigned to the conduct and operation of the Business
(the “Assigned Employees”) with the following information for each employee: name of employee, name of employer,
current title or position, work location, original hire date, current rate of compensation, rate type (hourly or salaried), scheduled
hours per week assigned to the Business, target cash bonus opportunity (if any), and any other incentive compensation opportunity.

 

(c) With
respect to the Company, each Company Subsidiary, the Business and all Assigned Employees: (i) there is no collective bargaining
agreement or relationship; (ii) there is no unfair labor practice charge or complaint pending or, to the Knowledge of Seller,
threatened before the National Labor Relations Board or any other Governmental Authority; (ii) there is not currently any labor
strike, lockout, work stoppage or other material concerted labor dispute or formal complaint and, to the Knowledge of Seller,
no such dispute or complaint is threatened; (iii) to the Knowledge of Seller, no union organization campaign is currently
in progress; and (iv) the Company, each Company Subsidiary and the employer for each Assigned Employee is in compliance in all
material respects with all applicable Laws respecting employment and employment practices, terms and conditions of employment,
wages, hours of work, and occupational safety and health.

 

4.13 Employee
Benefits Plans.

 

(a) Neither
Company nor any Company Subsidiary has, or could reasonably be expected to have, any liability under any Employee Benefit Plan.

 

(b) With
respect to each Employee Benefit Plan, all payments, premiums, contributions, and reimbursements for all periods ending prior
to or as of the Closing Date have been made. There are no Actions (other than routine claims for benefits in the Ordinary Course)
pending or, to the Knowledge of the Seller, threatened with respect to any Employee Benefit Plan.

 

(c) Neither
the Company nor any of its ERISA Affiliates maintains, sponsors, contributes to, has any obligation to contribute to, or has any
Liability under or with respect to a “defined benefit plan,” as defined in Section 3(35) of ERISA, a pension
plan subject to the minimum funding standards of Section 302 of ERISA or Section 412 of the Code, or a “multiemployer
plan,” as defined in Section 3(37) of ERISA. No other trade or business is treated, together with the Company or any
of its ERISA Affiliates, as a single employer under Section 414 of the Code or Section 4001 of ERISA and none of the Company or
any of its ERISA Affiliates has incurred any Liability to or with respect to an Employee Benefit Plan (other than with respect
to contributions not yet due) or to the Pension Benefit Guaranty Corporation (other than for the payment of premiums not yet due).
None of the Company or any of its ERISA Affiliates has incurred or is contingently liable for any withdrawal liability to any
“multiemployer plan” under Section 4021 of ERISA.

 

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4.14 
Affiliate Transactions. Other than this Agreement or the Ancillary Agreements, neither Seller nor any of its Affiliates
(other than the Company or any Company Subsidiary), (i) directly or indirectly owns, or otherwise has any right, title or interest
in, to or under, any material property or right, tangible or intangible, that is used by the Company or any Company Subsidiary
(other than Company Interests) or (ii) licenses Intellectual Property (either to or from the Company or any Company Subsidiary).

 

4.15 Litigation.
Except as set forth on Schedule 4.15, there is no Action pending or, to the Knowledge of Seller, threatened against Company
or any Company Subsidiary, or against Seller or any Affiliate with respect to the Business, or against any members, managers,
officers, directors or employees of Company or any Company Subsidiary, or of Seller or any Affiliate with respect to the Business,
acting in such capacity. Neither Company nor any Company Subsidiary is subject to any outstanding Order that relates specifically
to the Company or any Company Subsidiary and neither Seller nor any Seller Affiliate is subject to any outstanding Order as it
relates to the Business.

 

4.16 Bank
Accounts and Managers. Schedule 4.16(a) sets forth a true and complete list of the names and locations of banks, trust
companies and other financial institutions at which Company or any Company Subsidiary maintains bank accounts, safe deposit boxes
or other custodial arrangements and the account number of each bank account, safe deposit box or other custodial arrangement,
and the names of all persons authorized to draw thereon, make withdrawals therefrom or have access thereto. Schedule 4.16(b)
contains a correct and complete list of the managers, directors and officers of the Company and each Company Subsidiary.

 

4.17 Books
and Records. Upon the Closing, the books and records (including all Contracts and any and all title (including the original
copy of the certificate evidencing the Company’s ownership of 100% of the Equity Interests of each Company Subsidiary),
Tax, financial, technical, engineering, environmental, health and safety records and information) of or pertaining to the Business,
the Company or any Company Subsidiary in Seller’s or any of its Affiliates’ (other than the Company and the Company
Subsidiaries) possession will be delivered to Buyer or in the possession of the Company. The minute books and other similar records
of each of the Company and Company Subsidiary, as made available to Buyer prior to the execution of this Agreement, contain a
true and complete record, in all material respects, of all action taken at all meetings and by all written consents in lieu of
meetings of the members, managers, or board of directors, as applicable, of the Company and each Company Subsidiary.

 

4.18 Undisclosed
Liabilities. The Company does not have any Liabilities except (i) for Liabilities reflected or reserved against in the Financial
Statements and (ii) current Liabilities incurred by the Company in the Ordinary Course since the Balance Sheet Date and which
are not, individually or in the aggregate, material in amount.

 

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4.19 Insurance.
Schedule 4.19 sets forth a true, complete and correct list of all policies of insurance for the Company or any Company
Subsidiary. True and correct copies of all such insurance policies have been provided to Buyer. With respect to each such insurance
policy listed on Schedule 4.19: (a) the policy is in full force and effect and (b) neither the Company nor any Company
Subsidiary is in material breach or default (including with respect to the payment of premiums) thereunder. As of the date hereof,
neither the Company nor any Company Subsidiary has received any written notice of cancellation or non-renewal of any insurance
policy nor has the termination of any insurance policy been threatened since December 31, 2018. There is no Action pending under
any insurance policy as to which coverage has been denied by the underwriters of such policies.

 

Article
5

REPRESENTATIONS AND WARRANTIES OF BUYER

 

Except
as set forth in the correspondingly numbered Section of the Disclosure Schedules, Buyer hereby represents and warrants to Seller
as follows:

 

5.1 Organization;
Good Standing. Buyer is a corporation duly organized, validly existing and in good standing under the Laws of the State of
Nebraska. The Organizational Documents of Buyer are in full force and effect, and Buyer is not in material violation of any of
the provisions of its Organizational Documents.

 

5.2 Power
and Authority. Buyer has all requisite power and authority to execute and deliver this Agreement and each of the Ancillary
Agreements to which it is a party and to perform its obligations hereunder and thereunder and to consummate the transactions contemplated
hereby and thereby. The execution and delivery by Buyer of this Agreement and each of the Ancillary Agreements to which it is
a party, and the consummation of the transactions contemplated hereby and thereby, have been duly and validly authorized by all
necessary action on the part of Buyer, and no other or further action or proceeding on the part of Buyer or its equity holders
is necessary to authorize the execution and delivery by Buyer of this Agreement or any of the Ancillary Agreements to which it
is a party and the consummation by Buyer of the transactions contemplated hereby and thereby. This Agreement has been duly and
validly executed and delivered by Buyer and, assuming the due and valid authorization, execution and delivery of this Agreement
by Company and Seller, constitutes a valid and binding obligation of Buyer, enforceable against it in accordance with its terms
and conditions, subject to General Principles of Law, Equity and Public Policy.

 

5.3 Consents
and Approvals. Except for the consents, approvals or notices set forth on Schedule 5.3(a) (the “Buyer Required
Government Approvals”), Buyer is not required to give any notice to, make any filing with, or obtain any authorization,
consent, or approval of any Governmental Authority or other Person in connection with the execution, delivery and performance
by Buyer of this Agreement or any of the Ancillary Agreements to which it is a party or the consummation of the transactions contemplated
hereby and thereby, other than such notices, filings, authorizations, consents or approvals that, if not given, made or obtained,
would not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect.

 

5.4 Litigation.
There is no Action, hearing or investigation pending or, to Buyer’s Knowledge, threatened against Buyer or any of its properties
or assets that challenges, or will have the effect of preventing, materially delaying, making illegal, or otherwise materially
interfering with, the execution of this Agreement or the consummation of the transactions contemplated hereby. Buyer is not subject
to any outstanding Order that would prevent, delay, make illegal or otherwise interfere with, the execution of this Agreement
or the consummation of the transactions contemplated hereby.

 

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5.5 Brokers’
Fees. Buyer does not have any Liability to pay any fees or commissions to any broker, finder, investment banker, agent or
intermediary with respect to the transactions contemplated by this Agreement.

 

5.6 Investment
Representation. Buyer is acquiring the Company Interests for its own account with the present intention of holding such securities
for investment purposes and not with a view to, or for sale in connection with, any distribution of such securities in violation
of any federal or state securities Laws. Buyer is an “accredited investor” as defined in Regulation D promulgated
by the Securities and Exchange Commission under the Securities Act. Buyer acknowledges that it is informed as to the risks of
the transactions contemplated hereby and of ownership of the Company Interests. Buyer acknowledges that the Company Interests
have not been registered under the Securities Act or any state or foreign securities Laws and that the Company Interests may not
be sold, transferred, offered for sale, pledged, hypothecated or otherwise disposed of unless such transfer, sale, assignment,
pledge, hypothecation or other disposition is pursuant to the terms of an effective registration statement under the Securities
Act and the Company Interests are registered under any applicable state or foreign securities Laws or sold pursuant to an exemption
from registration under the Securities Act and any applicable state or foreign securities Laws.

 

5.7 Buyer’s
Due Diligence. Buyer hereby acknowledges that, in addition to the representations and warranties of Seller expressly set forth
in Article 3 and Article 4, Buyer is relying on its own investigation and analysis in entering into this Agreement
and consummating the transactions contemplated hereby. Buyer has participated in the management of Company and is an informed
and sophisticated participant in the transactions contemplated by this Agreement and has undertaken such investigation, and has
been provided with and has evaluated such Evaluation Material, as it has deemed necessary in connection with the execution, delivery
and performance of this Agreement and the consummation of the transactions contemplated hereby.

 

Article
6

PRE-CLOSING COVENANTS

 

6.1 Conduct
of the Business.

 

(a) During
the period from the date of this Agreement to the earlier of the Closing and the date this Agreement is terminated in accordance
with Section 12.1 (the “Interim Period”), except as expressly contemplated or permitted under this Agreement,
as required by Law, with the written consent of Buyer (which consent shall not be unreasonably conditioned, withheld or delayed),
Buyer and Seller shall cause the Company to (i) conduct the Business, in all material respects, only in the Ordinary Course, including
without limitation, performing all routine maintenance and testing of the Aurora Facility, (ii) use commercially reasonable efforts
to maintain satisfactory relationships with, and keep available the services of, their present officers and other Assigned Employees,
(iii) use commercially reasonable efforts to preserve existing relationships with material customers, lenders, consultants, agent,
vendors, suppliers, distributors and others having material business relationships with the Company and (iv) maintain cash balances
sufficient to pay operating expenses of the Company as may be incurred in the Ordinary Course.

 

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(b) During
the Interim Period, except as contemplated or permitted under this Agreement, as required by Law, with the written consent of
Buyer (which consent shall not be unreasonably conditioned, withheld or delayed), the Company shall not and Seller shall not permit
the Company (or any Seller Affiliate with respect to the Company, a Company Subsidiary or the Business) to do any of the following:

 

(i) amend
the Organizational Documents of the Company or any Company Subsidiary;

 

(ii) split,
combine, subdivide or reclassify any Equity Interests of the Company or any Company Subsidiary;

 

(iii) authorize,
declare, set aside or pay any dividend or distribution (whether payable in cash, stock, membership interest, other ownership interest
or other securities or property) with respect to the Company Interests or any other Equity Interests of the Company or any Company
Subsidiary;

 

(iv) issue,
sell or grant any additional interests of, or securities convertible or exchangeable for, or options, warrants, calls, commitments
or rights of any kind to acquire, any Equity Interests of the Company or any Company Subsidiary;

 

(v) transfer,
lease, license, sell, mortgage, pledge, dispose of, abandon, fail to maintain or encumber any of its material assets, rights or
properties other than (A) sales or nonexclusive licenses in the Ordinary Course and (B) dispositions of equipment and property
no longer used in, or material to, the operation of the Business;

 

(vi) repurchase,
redeem or otherwise acquire, or offer to repurchase, redeem or otherwise acquire any Equity Interests in the Company or any Company
Subsidiary or any securities of the Company or any Company Subsidiary convertible into or exchangeable or exercisable for Equity
Interests in the Company or any Company Subsidiary, or any warrants, calls, options or other rights to acquire any such Equity
Interests;

 

(vii) incur,
assume, issue, modify, renew, guarantee, prepay, refinance or otherwise become liable for any long-term or short-term Indebtedness,
or enter into any swap, cap, floor, collar, futures contract, forward contract, option or any other derivative financial instrument,
or hedging or off balance sheet financing arrangements, or assume, guarantee, endorse or otherwise become liable or responsible
(whether directly, contingently or otherwise) for the Indebtedness of any other Person;

 

(viii) adopt
or establish any plan, agreement, policy or program that would constitute an Employee Benefit Plan sponsored or maintained by
the Company or any Company Subsidiary;

 

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(ix) enter
into any Material Contract, amend or modify in any material respect or terminate any such Material Contract (other than permitting
expiration of such Material Contract in accordance with its terms) or otherwise waive, release or assign any material rights,
claims, benefits or obligations of the other party thereunder, in each case, other than in the Ordinary Course;

 

(x) change
any of its methods, principles or practices of accounting or accounting practices in any material respect, except as may be required
by applicable Laws or GAAP;

 

(xi) change
its fiscal year or make or change any material Tax election (except for elections in the Ordinary Course) or settle or compromise
any material Tax liability, claim or assessment or agree to an extension or waiver of the limitation period to any material Tax
claim or assessment (except for such actions related thereto which do not require the approval of any officer of the Company)
or grant any power of attorney with respect to material Taxes or enter into any closing agreement with respect to any material
Tax or surrender any right to claim a material Tax refund;

 

(xii) make,
or agree or commit to make, any capital expenditure other than in the Ordinary Course;

 

(xiii) (A)
grant to any Assigned Employee or any current or former member, manager, director, employee, contractor or consultant of the Company
any increase in compensation, bonus or fringe or other benefits or grant any type of compensation or benefit to any such person
not previously receiving or entitled to receive such compensation, (B) grant to any person any severance, retention, change in
control or termination compensation or benefits or any increase therein, or (C) amend, change or modify the terms of any existing
compensation, bonus, or fringe or other benefits;

 

(xiv) enter
into or make any loans to any Assigned Employee or any member, manager, officer, director, employee, contractor or consultant
(other than business expense advances in the Ordinary Course) or make any change in its existing borrowing or lending arrangements
for or on behalf of any of such persons, except as required by the terms of any Employee Benefit Plan;

 

(xv) acquire
any Equity Interests in any Person or, other than purchases and sales of inventory and supplies in the Ordinary Course, (A) acquire
or agree to acquire any tangible properties or assets or (B) sell, lease (as lessor), license, mortgage, sell and leaseback or
otherwise dispose of any tangible properties or assets or any interests therein other than pursuant to the Facility Agreements
in the Ordinary Course;

 

(xvi) except
as necessary in the Ordinary Course, grant or acquire, agree to grant to or acquire from any Person, or dispose of or permit to
lapse any rights to any Intellectual Property material to the conduct of the Business as currently conducted, or disclose to any
Person, other than representatives of Buyer, any material trade secrets;

 

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(xvii) take
any action inconsistent with the cash management policies of the Company other than in the Ordinary Course, including any acceleration
or deferment of any receivables or payables or making of any investment, in each case other than in the Ordinary Course;

 

(xviii) hire
any Person to be an employee of the Company;

 

(xix) enter
into any new line of business;

 

(xx) settle,
compromise, dismiss, discharge or otherwise dispose of any Action or carrier dispute other than those that (A) do not involve
the payment by the Company of monetary damages in excess of $25,000 in any individual instance, or $50,000 in the aggregate, plus
applicable reserves and any applicable insurance coverage and do not involve any material injunctive or other non-monetary relief
or impose material restrictions on the business or operations of the Company, and (B) provide for a complete release of the Company,
the Company Subsidiaries and their successors from all claims and do not provide for any admission of liability by the Company
or any Company Subsidiary; provided, however, that notwithstanding anything in clauses (A) or (B) to the contrary,
the written consent of Buyer shall be required in order for the Company to settle, compromise, dismiss, discharge or otherwise
dispose of any Action arising from, based upon or challenging the validity of this Agreement or the consummation of the transactions
contemplated hereby or seeking to prevent the consummation of the transactions contemplated hereby; or

 

(xxi) enter
into an agreement to take any of the foregoing actions.

 

(c) During
the Interim Period, the Parties acknowledge that (i) the west ethanol production facilities at the Aurora Facility will be shut
down temporarily for routine maintenance and testing on March 29, 2020 and is expected to restart production on or about April
2, 2020 or April 3, 2020 and (ii) the east ethanol production facility is and will remain in cold shutdown.

 

(d) During
the Interim Period, the Parties agree to cooperate in the return to Buyer or Company, as the case may be, of any Off-Premises
Property.

 

(e) During
the Interim Period, Seller shall cause Parent to cause Kinergy to (i) provide terms consistent with the prevailing market
rate at the destination Kinergy Terminal (as defined in the Ethanol Marketing Agreement) for each shipment of ethanol as of the
applicable date of such sale, and (ii) confer in good faith with Buyer regarding such terms and provide supporting information
evidencing that such terms are consistent with the requirements of the foregoing subclause (i).

 

6.2 Appropriate
Actions.

 

(a) General.
Each of the Parties shall use commercially reasonable best efforts to take all action necessary to consummate the transactions
contemplated by this Agreement as soon as possible after the execution of this Agreement, including taking all actions necessary
to comply promptly with all applicable Laws that may be imposed on it or any of its Affiliates with respect to the Closing.

 

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(b) Notice
of Adverse Developments. During the Interim Period, Buyer, on one hand, and Seller, on the other hand, shall give prompt notice
to the other of the discovery by such Party of: (i) any material inaccuracy in any representation or warranty of the other Party
of which they become aware; (ii) any material failure by the other Party to comply with any of such Party’s covenants contained
in this Agreement; or (iii) the occurrence of any event or the existence of any circumstances that would make satisfaction of
any of the conditions set forth in Article 8 impossible or unlikely.

 

6.3 Consents;
Further Assurances.

 

(a) Consents
and Approvals. Each of the Parties shall use commercially reasonable best efforts to obtain, as soon as possible after the
execution of this Agreement, all Required Governmental Approvals and Third Party Consents and any and all other consents, approvals
and authorizations of other Persons required in order to consummate the transactions contemplated by this Agreement, and each
Party shall cooperate with the other Parties to this Agreement in obtaining all such consents, approvals and authorizations. Without
limiting the generality of the foregoing, the Parties shall promptly make and effect, or cause to be made and effected, all notifications
and applications required under applicable Law and any applicable Orders. Without limiting the generality of the foregoing, each
of the Parties each agrees to use its respective commercially reasonable best efforts to (i) identify all Business Permits which
can be transferred to Buyer (or its designee, including the Company) without the requirement to obtain a Required Government Approval
other than by delivery of notice to a Government Authority and (ii) promptly (but in any event within fifteen (15) days after
the date hereof) provide all notifications required by and file all applications with respect to the Required Government Approvals.
All fees and costs required to be paid as a condition to or in connection with receiving such Required Government Approvals or
Third Party Consents will be borne by (i) Seller, with respect to any Seller Required Government Approvals, Company Required Government
Approvals or Third Party Consents required to be obtained with respect to Seller or Company and (ii) Buyer, with respect to any
Buyer Required Government Approvals or Third Party Consents required to be obtained with respect to Buyer.

 

(b) Further
Assurances. If any further action is necessary or desirable to carry out the purposes of this Agreement, each Party, upon
request of the other Party and from time to time, will take such further action (including the execution and delivery of such
further instruments and documents) as the other Party reasonably may request and deem necessary or desirable to consummate the
transactions contemplated by this Agreement, all at the sole cost and expense of the requesting Party. If either Buyer, Seller
or any of their Affiliates becomes aware that any of the assets necessary to the operation of the Business have not been transferred
to Buyer, such Party shall promptly notify the other and the Parties shall, as soon as reasonably practicable, ensure that such
property is transferred, with any necessary prior Third Party consent or notice, to Buyer. If Seller receives any payment after
the Closing arising out of or relating to the Business, Seller agrees to promptly remit such funds to Buyer.

 

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6.4 Confidentiality.
Each Party and its Affiliates shall treat as confidential (a) the terms and conditions of this Agreement and each of the Ancillary
Agreements (including all drafts thereof) and the information being exchanged in connection with the transactions described herein;
and (b) all other data and information (including, but not limited to, operating data and information) in their possession regarding
the Aurora Facility, the Business, the other Party or any Affiliate of any other Party, unless: (i) the applicable other Party
agrees in writing to the release of such terms, conditions, data or information; (ii) such terms, conditions, data or information
becomes publicly available other than through the wrongful actions of the disclosing Party or the disclosing Party’s Affiliate;
(iii) such terms, conditions, data or information was in the possession of the receiving Party or the receiving Party’s
Affiliate prior to receipt thereof from the disclosing Party with no corresponding confidentiality obligation; or (iv) such terms,
conditions, data or information is required by Law to be disclosed. Notwithstanding the generality of the foregoing, any Party
may disclose such terms, conditions, data and information to (A) the officers, directors, managers, partners, members, employees
and Affiliates of such Party, (B) any successors in interest and permitted assigns of such Party, (C) any actual or potential
financing parties or actual or potential lenders to such Party, and (D) any potential equity investors in such Party; provided,
however, that any Person who receives the confidential terms, conditions, data and information pursuant to an exception
contained in clauses (B) – (D) of this Section 6.4 agrees to similar confidentiality provisions. Additionally, for a period
of two (2) years commencing on the Closing Date, Seller and its Affiliates shall not directly or indirectly, hire, solicit, or
employ any Transferred Employee during such period, or encourage any such employee to leave such employment or hire any such employee
who has left such employment with Buyer or its Affiliate; provided, however, that the foregoing restrictions on
solicitation shall not be breached by a general solicitation which is not directed specifically to any such Transferred Employee.
The terms of this Section 6.4 shall survive any Closing or termination of this Agreement, as applicable.

 

6.5 Public
Announcements. No press release or public announcement related to this Agreement or the transactions contemplated hereby or,
prior to the Closing, any other announcement or communication to the employees, customers, suppliers, distributors, licensors
or licensees of the Company, shall be issued or made by any Party without the joint written approval of Buyer and Seller, unless
required by: (a) applicable Law; (b) the rules and regulations of, or pursuant to any agreement of, a stock exchange or trading
system or the U.S. Securities and Exchange Commission; (c) by Order of a Governmental Authority; or (d) by subpoena, summons or
legal process; provided, however, that in each such case Seller and Buyer shall have the right to review such press
release, announcement or communication prior to issuance, distribution or publication. Notwithstanding the foregoing, the Parties
shall be allowed to disclose the terms of this Agreement and the transactions contemplated hereby: (i) to authorized representatives
and employees of such Party or their respective Affiliates; or (ii) to any of their respective Affiliates, auditors, attorneys,
financial consultants, investment bankers, financing sources, limited partners, potential investors or other agents; provided,
however, that in the case of disclosures made pursuant to clauses (i) and (ii), the recipient is informed of the confidential
nature of such information.

 

6.6 Due
Diligence Access.

 

(a) During
the Interim Period, upon reasonable advance notice from Buyer, Seller shall, and shall cause the Company and any Company Subsidiary,
and to afford Buyer, its officers, employees and authorized representatives reasonable access, during regular business hours,
to the executive personnel, offices, properties, books and records of the Company and any Company Subsidiary, and in order for
Buyer to have the opportunity to make such investigation as it shall reasonably desire to make of the affairs of the Company;
provided, however, that such access shall not unreasonably interfere with the conduct of the business of the Company.
Buyer acknowledges and agrees that all information it obtains as a result of access under this Section 6.6(a) shall be
subject to the confidentiality provisions of Section 6.4.

 

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(b) Subject
to the terms of Section 6.6(a) and compliance with applicable Law, the Company and Seller shall cooperate and participate,
in each case, as reasonably requested by Buyer from time to time, in Buyer’s efforts to plan the integration of the Company’s
and Buyer’s operations in connection with, and taking effect upon the Closing, including providing such reports on operational
matters and participating on such integration planning teams and committees as Buyer may reasonably request.

 

6.7 Contact
with Business Relations. During the Interim Period, Buyer and its representatives may contact and communicate with the employees,
customers, suppliers, distributors, lessees, lessors, licensees, licensors and other material business relations of the Company
in connection with the transactions contemplated hereby only after prior consultation with Seller.

 

6.8 Transferred
Employees.

 

(a) Effective
as of the Closing Date, Seller will cause Parent (or its applicable Affiliate) to terminate the employment of, and Buyer (or an
Affiliate designated by Buyer) will offer employment on an at-will basis to, the Assigned Employees whom Buyer has notified Seller,
not less than thirty (30) days prior to the Closing Date, that Buyer desires to employ for the Business after the Closing. Such
offers of employment shall be contingent upon the occurrence of the Closing, satisfactory background checks (including review
of driving records of Assigned Employees who regularly drive vehicles in the normal course and scope of their employment duties),
satisfactory drug screening results and other hiring policies of Buyer or its Affiliate. Each such Assigned Employee who accepts
Buyer’s (or such Affiliate’s) offer of employment and who commences active employment with Buyer (or such Affiliate)
effective as of the Closing is referred to in this Agreement as a “Transferred Employee”. Notwithstanding the
foregoing, Seller shall have no obligation to terminate the employment of, and Buyer (or an Affiliate of Buyer) shall have no
obligation to offer employment to or employ, an Assigned Employee who is on leave as of the Closing Date. Buyer and its Affiliates
shall have no obligation to employ or retain any Transferred Employees after the Closing, to continue after the Closing any particular
terms of employment of a Transferred Employee, and nothing contained herein shall be deemed to create such a right or obligation.

 

(b) Seller
will make the Assigned Employees available to Buyer or its Affiliate prior to the Closing to discuss employment offers and terms
of employment or for a reasonable amount of onboarding meetings at a mutually agreed upon time and location. From the date hereof
through the Closing Date, the parties shall cooperate in good faith regarding any broadly distributed communication to Assigned
Employees relating to (i) the transactions contemplated by this Agreement or (ii) employment, benefits and compensation following
the Closing.

 

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(c) Following
the Closing, Buyer shall use commercially reasonable efforts to (i) ensure that no waiting periods, or exclusions or limitations
with respect to any pre-existing conditions, are applicable to any Transferred Employees or their dependents or beneficiaries
under any welfare benefit plans maintained by Buyer or its Affiliates in which such employees or their dependents or beneficiaries
may be eligible to participate following the Closing; and (ii) provide or cause to be provided that any costs or expenses incurred
previously by Transferred Employees (and their dependents or beneficiaries) during the plan year in which Closing occurs under
Seller’s welfare plans shall be taken into account for purposes of satisfying applicable deductible, co-payment, coinsurance,
maximum out-of- pocket provisions and like adjustments or limitations on coverage under any such similar welfare benefit plans
maintained by Buyer or its Affiliates for which participation commences during any such plan year. Seller and its Affiliates solely
shall be liable for all responsibilities and obligations for continuation coverage under COBRA under their group health plans
with respect to qualifying events that occur prior to, on or after the Closing Date, and Buyer and its Affiliates shall have no
responsibility, obligation or liability therefor.

 

(d) For
the purposes of federal employment taxes with respect to the Transferred Employees who are employed by Buyer or its Affiliate,
as a new employer, within the same calendar year as the Closing, the parties agree to comply with the employment tax reporting
procedures described in Section 4 of the Standard Procedure for Predecessors and Successors in Internal Revenue Service Revenue
Procedure 2004-53.

 

(e) Nothing
in this Section 6.8 or elsewhere in this Agreement will be deemed to make any Assigned Employee, or any other employee
of Seller or any Affiliate of Seller, or any other Person, a third party beneficiary of this Agreement.

 

6.9 Reduction
of Railcar Fleet. During the Interim Period, 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 prior to Closing.

 

6.10 Financing
Assistance. Prior to the Closing, each of Seller and Company agrees to use its commercially reasonable efforts to provide,
and shall direct its representatives to use their respective commercially reasonable efforts to provide, all customary cooperation
in connection with the arrangement of the Financing as may be reasonably requested by Buyer, including, with respect to Company
and each Company Subsidiary, executing and delivering any customary credit agreements, indentures and pledge and security documents
and otherwise reasonably facilitating the granting of a security interest (and perfection thereof) in collateral, guarantees,
other definitive financing documents or other certificates, customary closing certificates and documents as may be reasonably
requested by Buyer and assisting in the negotiation of any such agreements and other documents; provided, that any obligations
contained in all such agreements and documents shall be subject to the occurrence of the Closing and effective no earlier than
the Closing. Seller and Buyer acknowledge and agree that the obligations of the Company with respect to the Buyer Intercompany
Financing shall be secured by liens on the Seller Deeds of Trust Collateral pursuant to that certain deed of trust or mortgage
in form and substance satisfactory to Buyer which shall be executed at the Closing by the Company in favor of Buyer and recorded
against such Seller Deeds of Trust Collateral. The foregoing liens shall be subordinate to only those Permitted Liens existing
as of the Closing Date and the Seller Deeds of Trust.

 

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6.11 Exclusivity
and ROFO Notice.

 

(a) Each
of Seller, Company and Buyer agrees that during the Interim Period they shall not, and each of them shall cause its Affiliates
not to, directly or indirectly solicit, initiate, facilitate or encourage (including by providing any confidential information)
the submission of any Acquisition Proposal or enter into any agreement with respect to any Acquisition Proposal. Each of Seller,
Company and Buyer will immediately (and will cause each of their respective Affiliates to) cease any and all existing activities,
discussions or negotiations with any parties conducted heretofore with respect to any Acquisition Proposal, shall request the
return or destruction of all confidential information of Company previously furnished to any such parties (to the extent permitted
by and in accordance with the applicable confidentiality agreement with such party) and immediately terminate all physical and
electronic data room access previously granted to such parties. Each of Seller, Company and Buyer shall promptly (and in any event
within two (2) Business Days after receipt thereof by such Person, an Affiliate or their representatives) advise the other parties
hereto orally and in writing of any Acquisition Proposal, any request for information with respect to any Acquisition Proposal,
or any inquiry with respect to or which would reasonably be expected to result in an Acquisition Proposal.

 

(b) Notwithstanding
anything to the contrary contained in the Existing ROFO Notice or the Company Operating Agreement, each of Seller, Company and
Buyer hereby acknowledge and agree that the Exercise Period (as defined in the Company Operating Agreement) with respect to the
Existing ROFO Notice is extended until the Outside Date.

 

6.12 Transition
Services. During the Interim Period, Seller will cooperate with Buyer and use commercially reasonable efforts to assist Buyer
to identify Transition Services that will be needed by Buyer following the Closing and to allow Buyer to procure replacement services
and capabilities prior to Closing in order to minimize the scope and nature of Transition Services to be required by Buyer following
the Closing. Prior to March 17, 2020, the Parties will finalize the terms of the Transition Services Agreement.

 

6.13 Real
Estate Diligence.

 

(a) If
desired by Buyer, at Buyer’s expense, Buyer may engage an environmental consultant to perform a Phase I environmental survey
of the Owned Real Property (the “Phase I Survey”). In the event Buyer determines that additional environmental
assessment activities are necessary or advisable, Seller agrees to provide Buyer and its officers, employees, counsel, accountants,
and other Representatives (including any environmental consultant) reasonable access to the Owned Real Property to perform such
additional environmental assessment activities. All reports issued by any environmental consultant and all supporting materials
shall remain strictly confidential under the terms of this Agreement except to the extent otherwise required by Legal Requirements.

 

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(b) If
desired by Buyer, at Buyer’s expense, Buyer may obtain an irrevocable commitment (the “Title Commitment”)
and unconditional agreement to issue Buyer an ALTA policy of title insurance in accordance with Buyer’s approved pro forma
title insurance policy, including any endorsements Buyer may require for the Owned Real Property and Leased Property (“Title
Policy”), and any such additional affidavits, documents and undertakings as may be reasonably required by the title
company issuing such Title Policy (the “Title Company”).

 

(c) If
desired by Buyer, at Buyer’s expense, Buyer may obtain an ALTA survey of the land, improvements, and appurtenances constituting
all or a portion of the Owned Real Property and Leased Property (the “Survey”).

 

6.14 Carbon
Score. Seller will continue to use its commercially reasonable best efforts to prepare and submit a provisional pathway for
a reduced Carbon Score to the California Air Resources Board.

 

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 complete the purchase of all Non-Compliant Ethanol remaining on the
Closing Date by (i) remitting payment therefor on the Closing Date at a price per gallon equal to the then market price per gallon
of ethanol meeting the specifications set forth in Exhibit C FOB the Aurora Facility (the “Non-Compliant Ethanol
Purchase Price”), and (ii) taking possession of all such Non-Compliant Ethanol and shipping such ethanol to a destination
specified by Kinergy, at Kinergy’s sole cost and expense.

 

Article
7

CLOSING DELIVERABLES

 

7.1 Closing
Deliverables of Seller. At the Closing, Seller shall deliver, or cause to be delivered, to Buyer or any other Person designated
by Buyer, the following documents or other items, in each case duly executed or otherwise in proper form:

 

(a) A
statement or certification of Seller’s non-foreign status as set forth in Treasury Regulation 1.1445-2(b), signed under
penalty of perjury or in accordance with Treasury Regulation 1.1445-2(c)(3)(i), a copy of a statement, issued to the Company pursuant
to Treasury Regulation 1.897-2(h), certifying that the Company is not a U.S. real property holding corporation;

 

(b) a
copy of the authorizing resolutions of Company’s Management Committee certified by the secretary (or equivalent officer)
of Company, and authorizing resolutions of Seller’s sole member certified by the secretary (or equivalent officer) of Seller,
as having been duly and validly adopted and being in full force and effect, authorizing the execution and delivery of this Agreement
and the Ancillary Agreements to which Company or Seller, as applicable, is a party and the consummation of the transactions contemplated
hereby and thereby;

 

(c) any
membership interest certificates representing the Company Interests endorsed in blank and accompanied by stock powers executed
in blank, free and clear of all Liens;

 

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(d) evidence
of termination of the Asset Management Agreement, the Ethanol Marketing Agreement, and the Co-Product Marketing Agreement, in
a form and on terms reasonably satisfactory to Buyer;

 

(e) an
executed copy of the Transition Services Agreement in a form and on terms reasonably satisfactory to Buyer;

 

(f) executed
copies of the Seller Notes and any Ancillary Agreements to which Seller or Company is a party, signed by Seller and/or a duly
authorized representative of Company, as applicable;

 

(g) a
certificate signed by an executive officer of Company certifying the Company’s Organizational Documents;

 

(h) payoff
letters from the holders of the Indebtedness (if any) of Company that reflect the amounts required in order to pay in full such
Indebtedness and provide that, upon payment of the amount(s) indicated, all Liens securing such Indebtedness shall be terminated
and released in full;

 

(i) evidence
of amendments to the leases or other Contracts for the Railcar Fleet, if any, and related Third Party Consents contemplated by
Section 6.9 to reduce the number of railroad cars in the Railcar Fleet to no more than 200 cars, consisting of all J cars
available from the Railcar Fleet prior to Closing;

 

(j) letters
of resignation of each of the PEC Committee Members (as defined in the Company Operating Agreement) and each of the officers of
the Company effective upon Closing;

 

(k) the
certificate contemplated by Section 8.2(c);

 

(l) a
good standing certificate (or its equivalent) for Company and each Company Subsidiary from the secretary of state or similar Governmental
Authority of the jurisdiction under the Laws in which Company and each Company Subsidiary is organized;

 

(m) copies
of all Company Required Governmental Approvals and Third Party Consents;

 

(n) at
least five (5) Business Days prior to the Closing, the Estimated Closing Date Statement;

 

(o) any
Off-Premises Property;

 

(p) such
intercreditor agreements as may be required by the lenders of Buyer or Company in connection with the Financing and relating to
the relative rights and priorities in respect of the Financing, the Seller Notes and the Seller Deed of Trust, in each case, duly
executed on behalf of Seller; and

 

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(q) the
Non-Compliant Ethanol Purchase Price, if any, by wire transfer of immediately available funds.

 

7.2 Closing
Deliverables of Buyer. At or prior to the Closing, Buyer shall deliver to Seller or other Persons, as applicable, the following:

 

(a) Payment
in cash by wire transfer of immediately available funds in the amounts required by Section 2.3;

 

(b) a
copy of the authorizing resolutions of Buyer’s board of directors, certified by the secretary of Buyer as having been duly
and validly adopted and being in full force and effect, authorizing the execution and delivery of this Agreement and the Ancillary
Agreements to which Buyer is a party and the consummation of the transactions contemplated hereby and thereby;

 

(c) executed
copies of the Seller Notes, the Seller Deed of Trust and any Ancillary Agreements to which Buyer is a party, signed by a duly
authorized representative of Buyer (provided that at the instruction of Seller, Buyer shall deliver the fully executed and notarized
Seller Deeds of Trust to the designated agent of Seller for recording immediately upon Closing, and prior to any other Liens being
recorded at Closing which secure any Buyer Intercompany Financing);

 

(d) the
certificate contemplated by Section 8.2(c); and

 

(e) a
good standing certificate (or its equivalent) from the secretary of state or similar Governmental Authority of the jurisdiction
under the Laws in which Buyer is organized.

 

Article
8

CONDITIONS TO CLOSING

 

8.1 Conditions
to Obligations of Buyer and Seller. The respective obligations of Buyer and Seller to consummate the transactions contemplated
by this Agreement are subject to the satisfaction or waiver at or prior to the Closing of the following conditions:

 

(a) No
Order. There shall not be in effect on the Closing Date any Order restraining, enjoining or otherwise making illegal the consummation
of any of the transactions contemplated by this Agreement.

 

(b) Required
Government Approvals. The Required Government Approvals that must be obtained prior to Closing under applicable Law shall
have been obtained from, or in the case of any Required Government Approvals that only require notification to a Governmental
Authority, made to, the applicable Governmental Authority, and any conditions thereof shall have been satisfied and such Governmental
Authority shall be in full force and effect, unless waived by Buyer.

 

(c) Form
of Seller Notes and Seller Deeds of Trust. At least three (3) Business Days prior to Closing, the Parties shall agree upon
the forms of the Seller Notes and Seller Deeds of Trust and shall cooperate with each other and use commercially reasonable efforts
to satisfy this Section 8.1(c).

 

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8.2 Additional
Conditions to Obligations of Buyer. The obligations of Buyer to consummate the transactions contemplated by this Agreement
shall be subject to the satisfaction or waiver at or prior to the Closing of the following additional conditions:

 

(a) Seller’s
Representations and Warranties. (i) The representations and warranties of Seller set forth in this Agreement (other than those
representations and warranties that address matters as of any particular date) shall be true and correct as of the date hereof
and as of the Closing Date as though then made, and (ii) the representations and warranties of Seller set forth in this Agreement
that address matters as of any particular date shall be true and correct as of such date, except where the failure of such representations
and warranties referenced in the immediately preceding clauses (i) and (ii) to be so true and correct would not, in the aggregate,
have a Material Adverse Effect.

 

(b) Performance
by Seller. Seller shall have performed and complied in all material respects with all of its covenants, obligations and agreements
required by this Agreement to be performed or complied with by it prior to or as of the Closing.

 

(c) Bring-Down
Certificate. Buyer shall have received a certificate dated as of the Closing Date and executed by an executive officer of
Seller certifying that the conditions set forth in Sections 8.2(a) and 8.2(b) have been satisfied.

 

(d) No
Material Adverse Effect. Since the date of this Agreement, Company has not experienced any Material Adverse Effect.

 

(e) Third
Party Consents; Required Governmental Approvals. All Third Party Consents and Required Governmental Approvals shall have been
obtained on terms and conditions satisfactory to Buyer in its sole and absolute discretion.

 

(f) Financing.
Buyer shall have obtained all Financing other than the Buyer Intercompany Financing on terms and conditions acceptable and in
form satisfactory to Buyer in its sole and absolute discretion.

 

(g) Due
Diligence. Buyer shall have completed its due diligence investigation of Company and the Company Subsidiaries (including but
not limited to its review of any Phase I Survey, Title Commitment, Title Policy and any Survey, in each case, to the extent Buyer
has elected to obtain the same), and shall, in its sole and absolute discretion, be satisfied with the results of such due diligence
investigation.

 

(h) Closing
Deliveries. The items to be delivered by Seller or the Company pursuant to Section 7.1 shall have been delivered (or
tendered subject only to Closing) to Buyer.

 

8.3 Additional
Conditions to Obligations of Seller. The obligations of Seller to consummate the transactions contemplated by this Agreement
shall be subject to the satisfaction or waiver at or prior to the Closing of the following additional conditions:

 

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(a) Buyer’s
Representations and Warranties. The representations and warranties of Buyer set forth in this Agreement shall be true and
correct as of the date hereof and as of the Closing Date as though then made (without giving effect to any materiality or similar
qualification in the representations and warranties), except where the failure of such representations and warranties to be so
true and correct would not reasonably be expected to have a Material Adverse Effect.

 

(b) Performance
by Buyer. Buyer shall have performed and complied in all material respects with all of its covenants, obligations and agreements
required by this Agreement to be performed or complied with by it prior to or as of the Closing.

 

(c) Bring-Down
Certificate. Seller shall have received a certificate dated as of the Closing Date and executed by an executive officer of
Buyer certifying that the conditions set forth in Sections 8.3(a) and 8.3(b) have been satisfied.

 

(d) Closing
Deliveries. The items to be delivered by Buyer pursuant to Section 7.2 shall have been delivered (or tendered
subject only to Closing) to Seller.

 

If
the Closing occurs, all closing conditions set forth in this Article 8 which have not been fully satisfied as of the Closing
shall be deemed to have been waived by Seller and/or Buyer, as the case may be.

 

Article
9

GENERAL COVENANTS

 

9.1 Books
and Records; Access. From and after the Closing, the Company shall be entitled to possession of all documents, books, records,
agreements, and financial data of any sort relating to the Business and/or the Company or any Company Subsidiary. Following the
Closing, Buyer shall, and shall cause each of its subsidiaries to, provide Seller and its representatives with reasonable access
to and/or copies of such books and records for any bona fide business or legal purpose during normal business hours and upon reasonable
prior notice. Unless otherwise consented to in writing by Seller, Buyer shall not, and shall cause the Company not to, for a period
of five (5) years following the Closing Date, destroy, alter or otherwise dispose of any of the books and records of the Company
(relating to the Business) for any period prior to the Closing Date without first giving reasonable prior written notice to Seller
and offering to surrender to Seller such books and records or any portion thereof which Buyer or any of its subsidiaries may intend
to destroy, alter or dispose of.

 

Article
10

Survival; INDEMNIFICATION

 

10.1 Survival
of Representations, Warranties and Covenants. It being the intent of the Parties to modify the applicable statutes of limitation,
the representations, warranties and covenants contained in this Agreement shall survive the Closing as follows:

 

(a) all
post-closing covenants contained in this Agreement shall survive the Closing until fully-performed and all pre-Closing covenants
shall survive the Closing in accordance with the terms of such covenant or agreement, and claims with respect thereto shall survive
for a period of eighteen (18) months after the Closing Date (such period, the “Setoff Period”);

 

    47

     

    

 

(b) the
representations and warranties contained in Sections 3.1 (Title to Company Interests), 3.3 (Power and Authority), 3.4 (Consents
and Approvals; No Violation), 3.6 (Brokers’ Fees), 4.1 (Consents and Approvals; No Violation), 4.9 (Tax Matters), 5.2 (Power
and Authority) and 5.5 (Brokers’ Fees) (collectively, the “Fundamental Representations”) shall terminate
and be of no further force and effect on the expiration of the applicable statute of limitations plus sixty (60) days; and

 

(c) all
other representations and warranties contained in this Agreement shall terminate and be of no further force and effect after the
Setoff Period.

 

No
claim may be made for indemnification hereunder for breach of any representations, warranties or covenants after the expiration
of the survival period applicable to such representation, warranty and covenant set forth above; provided, however,
that if Buyer or Seller, as applicable, delivers written notice to the other party of an indemnification claim for a breach of
the representations, warranties and covenants (stating in reasonable detail the nature of, and factual and legal basis for, any
such claim for indemnification) within the applicable time periods set forth above, such claim shall survive until resolved or
judicially determined.

 

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, 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, (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 and (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”).

 

(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) the Syngenta Indemnity 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.

 

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(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.

 

10.3 Indemnification
Provisions for Benefit of Seller. Subject to the terms and conditions of this Article 10, Buyer will indemnify and
hold harmless Seller and its successors and assigns (the “Seller Indemnitees”) from and against any Losses
that any Seller Indemnitee may incur (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 Buyer in Article 5 or (B) any breach of any covenant or agreement of Buyer
in this Agreement.

 

10.4 Matters
Involving Third Parties.

 

(a) If
any third party shall notify any Party (the “Indemnified Party”) with respect to any matter (a “Third
Party Claim”) which may give rise to a claim for indemnification against any other Party (the “Indemnifying
Party”) under this Article 10, then the Indemnified Party shall promptly (and in any event within five (5) Business
Days after receiving notice of the Third Party Claim) notify each Indemnifying Party thereof in writing, describing the claim,
the amount thereof (if known and quantifiable) and the basis of the claim; provided, that the failure of the Indemnified
Party to provide such notice shall not relieve the Indemnifying Party of its obligations hereunder, except to the extent that
such failure to give notice shall prejudice any defense or claim available to the Indemnifying Party.

 

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(b) Any
Indemnifying Party shall be entitled to participate in the defense of such Third Party Claim at such Indemnifying Party’s
expense, and at its option will have the right at any time to assume and thereafter conduct the defense of the Third Party Claim
with counsel of its choice reasonably satisfactory to the Indemnified Party; provided, however, that the Indemnifying
Party will not consent to the entry of any judgment or enter into any settlement with respect to the Third Party Claim without
the prior written consent of the Indemnified Party (not to be unreasonably withheld, delayed or conditioned) unless the judgment
or proposed settlement involves only the payment of money damages and does not impose an injunction or other equitable relief
upon the Indemnified Party, in which case no consent will be required; provided, further, that the Indemnified Party
may retain separate co-counsel at its sole cost and expense and participate in the defense of the Third Party Claim (it being
understood, however, that the Indemnifying Party shall control such defense and shall be liable solely for the costs and expenses
of counsel of its choice reasonable satisfactory to the Indemnified Party). Notwithstanding the foregoing, the Indemnifying Party
will not have the right to assume and conduct the defense of a Third Party Claim, and shall pay the fees and expenses of counsel
retained by the Indemnified Party in connection therewith, if (i) such Third Party Claim seeks as its primary remedy a material
injunction or other material equitable relief against the Indemnified Party, (ii) the Indemnified Party shall have been advised
by outside counsel that there is a conflict of interests between the Indemnified Party and the Indemnifying Party, (iii) such
Third Party Claim relates to or arises in connection with a criminal action, (iv) the Indemnifying Party failed or is failing
to use commercially reasonable efforts to defend such Third Party Claim, or (v) such Third Party Claim has a reasonable likelihood
of resulting in Losses that would exceed the amount of Losses that are indemnifiable by the Indemnifying Party hereunder. Notwithstanding
the foregoing, the Indemnified Party may retain separate co-counsel at its sole cost and expense and participate in the defense
of the Third Party Claim (it being understood, however, that the Indemnifying Party shall be liable solely for the costs and expenses
of counsel of its choice reasonable satisfactory to the Indemnified Party). If the Indemnifying Party assumes the defense of any
Third Party Claim, then such assumption shall not prejudice the Indemnifying Party’s right to thereafter contest the Indemnified
Party’s right to indemnification for the claims asserted therein. An Indemnified Party shall not settle or compromise any
Third Party Claim without the prior written consent of the Indemnifying Party. The Indemnified Party will cooperate with the Indemnifying
Party and its counsel in the review, investigation and defense of any such claim, shall make available its personnel, and shall
provide such testimony and access to its books and records as is reasonably requested by the Indemnifying Party in connection
therewith.

 

10.5 Direct
Claims. In the event any Indemnified Party should have a claim under this Article 10 against any Indemnifying Party
that does not involve a Third-Party Claim, the Indemnified Party shall promptly deliver a written notification to the Indemnifying
Party specifying the nature of and basis for such claim, together with the amount or, if not then reasonably determinable, the
estimated amount, determined in good faith, of the Losses arising from such claim.

 

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10.6 Certain
Limitations. The indemnification provided for in this Article 10 shall be subject to the following limitations:

 

(a) Payments
by Indemnifying Parties shall be limited to the amount of any Loss that remains after deducting therefrom any insurance proceeds
and any indemnity, contribution or other similar payment received or reasonably expected to be received by the Indemnified Party
in respect of any such Loss. The Indemnified Party shall use its commercially reasonable efforts to recover under insurance policies
or indemnity, contribution or similar agreements for any Losses.

 

(b) Payments
by Indemnifying Parties pursuant to this Article 10 in respect of any Loss shall be reduced by an amount equal to any Tax
benefit realized or reasonably expected to be realized as a result of such Loss by the Indemnified Party.

 

(c) Each
Indemnified Party shall take, and cause its Affiliates to take, all reasonable steps to mitigate any Loss upon becoming aware
of any event or circumstance that would be reasonably expected to, or does, give rise thereto.

 

(d) Notwithstanding
anything to the contrary contained in this Agreement (including this Article 10), no Indemnifying Party shall be liable
to any Indemnified Party, whether in contract, tort (including negligence and strict liability) or otherwise, at law or in equity,
and Losses under this Article 10 shall not include, consequential, indirect, exemplary, special or punitive damages.

 

10.7 Exclusive
Remedy. Buyer and Seller acknowledge and agree that, after the Closing, the indemnification provisions in this Article
10 and in Section 11.1(e) shall be the sole and exclusive remedy of Buyer and Seller with respect to the transactions
contemplated by this Agreement, except for fraud. Nothing in this Section 10.7 shall prevent or prohibit a Party from seeking
or obtaining specific performance in accordance with Section 13.15.

 

10.8 Effect
of Investigation. The representations, warranties and covenants of the Indemnifying Party, and the Indemnified Party’s
right to indemnification with respect thereto, shall not be affected or deemed waived by reason of any investigation made by or
on behalf of the Indemnified Party (including by any of its Representatives) or by reason of the fact that the Indemnified Party
or any of its Representatives knew or should have known that any such representation or warranty is, was or might be inaccurate
or by reason of the Indemnified Party’s waiver of any condition set forth in Sections 8.2 and 8.3, as the case may
be.

 

Article
11

TAX MATTERS

 

11.1 Cooperation
on Tax Matters

 

(a) Tax
Returns. Buyer shall file, or cause to be filed, all Tax Returns required to be filed by, or with respect to, the Company
or any Company Subsidiary to the extent such Tax Returns relate to a Pre-Closing Tax Period, Straddle Period or Post-Closing Tax
Period. All such Tax Returns with respect to Pre-Closing Tax Periods and Straddle Periods (“Pre-Closing Tax Returns”)
shall be prepared in a manner consistent with past practices, methods, and elections of the Company and applicable Company Subsidiary
and consistent with applicable Law. Buyer shall provide to Seller copies of such Pre-Closing Tax Returns for its review 20 days
prior to the applicable filing date. All expenses relating to the calculation, preparation, execution and filing of Pre-Closing
Tax Returns shall be borne by Buyer and Seller pro rata pursuant to the Company Operating Agreement (as in effect immediately
prior to the Closing).

 

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(b) Payment
of Taxes. Seller shall pay or cause to be paid all Taxes required to be paid by, or with respect to, the Company or any Company
Subsidiary to the extent such Taxes related to a Pre-Closing Tax Period. Buyer shall pay or cause to be paid all Taxes required
to be paid by, or with respect to, the Company or any Company Subsidiary to the extent such Taxes related to a Post-Closing Tax
Period. Notwithstanding the foregoing, all federal, state, local, non-U.S. excise, sales, use, ad valorem, value added, registration,
stamp, recording, documentary, conveyance, franchise, property, transfer, gains and similar Taxes, levies, charges and fees incurred
in connection with the sale of the Company, as contemplated by this Agreement or any other transaction contemplated by this Agreement
and all related interest and penalties (collectively, “Transfer Taxes”) shall be borne one-half (1/2) by Buyer
and one-half (1/2) by Seller and paid when due, and Buyer shall file or cause to be filed any Tax Return or other document with
respect to such Taxes or fees (and Seller shall cooperate with respect thereto as necessary). Buyer and Seller shall provide certificates
or forms, and timely execute any Tax Returns, that are necessary or appropriate to establish an exemption for (or reduction in)
any Transfer Tax.

 

(c) Cooperation
on Tax Matters. Buyer and Seller shall cooperate as and to the extent reasonably requested by the other Party, in connection
with the preparation and filing of Tax Returns pursuant to this Article 11 or otherwise, and any audit, litigation or other
action with respect to Taxes. Such cooperation shall include the retention (consistent with applicable Laws with respect thereto)
and (upon the other Party’s request) the provision of records and information that are reasonably relevant to any such audit,
litigation or other action and making employees or agents available on a mutually convenient basis to provide additional information
and explanation of any material provided under this Article 11.

 

(d) Tax
Treatment. For United States federal income Tax purposes, Buyer and Seller acknowledge and agree that the transactions contemplated
by this Agreement are treated for United States federal income Tax purposes (and any applicable state or local income Tax purposes),
in a manner consistent with the principles set forth in Revenue Ruling 99-6, 1999-1 C.B. 432 (Situation 1), (i) to Seller, as
a taxable sale of all the Company Interests to Buyer in exchange for the Purchase Price, and (ii) to Buyer, as a purchase of all
of Sellers interests in the assets of the Company for the Purchase Price. Neither Buyer nor Seller shall file any Tax Return or
otherwise take any position for Tax purposes that is inconsistent with or contrary to the treatment described in the preceding
sentence unless required to do so by applicable Law. Pursuant to Revenue Ruling 99-6, 1991-1 C.B. 432, the taxable year of the
Company shall end on the Closing Date for federal income Tax purposes.

 

(e) Purchase
Price Allocation. Buyer and Seller agree that the Purchase Price (as finally determined in accordance with Article 2) and
the liabilities of the Company (plus other relevant items for income Tax purposes) shall be allocated among the assets of the
Company for all income Tax purposes in accordance with the methodology provided in the Allocation Methodologies Schedule attached
hereto as Exhibit G, which was prepared consistent with Code Section 1060 and the Treasury Regulations promulgated thereunder.
Within thirty (30) days following the final determination of the Closing Date Statement in accordance with Section 2.5, Buyer
shall provide Seller with a schedule allocating all such amounts as provided herein (the “Allocation Schedule”),
for the Seller’s review and comment. If Seller has any comments, then Seller and Buyer agree to work together in good faith
to resolve any disputed items related to such draft Allocation Schedule so that it becomes final. Buyer and Seller shall, to the
extent necessary, work together in good faith to revise the final Allocation Schedule to reflect any post-Closing payment made
pursuant to or in connection with this Agreement, all such revisions to be made consistently with the Allocation Methodologies
and, to the extent not included therein, Code Section 1060 and the Treasury Regulations promulgated thereunder. Buyer and Seller
and their Affiliates shall report, act and file all Tax Returns (including, but not limited to Internal Revenue Service Form 8594)
in all respects and for all purposes consistent with such final Allocation Schedule as determined pursuant to this Section
11.1(e). Neither Buyer nor Seller shall take any Tax position (whether in audits, tax returns or otherwise) that is inconsistent
with such final Allocation Schedule unless required to do so by applicable law.

 

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(f) Tax
Indemnification. Seller shall indemnify Buyer and the Company and hold them harmless from and against any Losses attributable
to its pro rata share, without duplication of any other amounts payable pursuant to this Agreement, (as determined pursuant to
the terms of the Company Operating Agreement (as in effect immediately prior to the Closing)) (i) Taxes (or the non-payment thereof)
due and payable by the Company or any Company Subsidiary for all Pre-Closing Tax Periods, and (ii) Taxes of any person imposed
on and due and payable by the Company or any Company Subsidiary as a transferee or successor, by contract or pursuant to any law,
rule or regulation, which Taxes relate to an event or transaction occurring before the Closing.

 

Article
12

TERMINATION

 

12.1 Termination
of the Agreement. Notwithstanding anything to the contrary in this Agreement, this Agreement may be terminated and the transactions
contemplated hereby abandoned at any time prior to the Closing as follows:

 

(a) by
the mutual written agreement of Buyer and Seller;

 

(b) by
Seller or Buyer, if the Closing does not occur by March 17, 2020 (the “Target Closing Date”); provided,
however, that (i) the Target Closing Date shall be extended to a date no later than April 15, 2020 (the “Outside
Date”) by written agreement of Seller and Buyer in the event (A) any Required Government Approvals or Third Party Consents
have not yet been obtained or any conditions thereof have not been satisfied, despite Seller’s and Buyer’s commercially
reasonable efforts to obtain such Required Governmental Approvals or Third Party Consents, (B) any lender providing Financing,
other than Buyer, is not prepared to close such Financing and provide the requisite funds at Closing, and (C) Buyer has not received
its due diligence investigation materials (including but not limited to any Phase I Survey, Title Commitment, Title Policy, and
Survey, to the extent Buyer elects to obtain the same), despite Buyer’s commercially reasonable efforts to obtain such materials;
provided, further, that the Outside Date may be extended by written agreement of Seller and Buyer, and (ii) the
right to terminate this Agreement pursuant to this Section 12.1(b) shall not be available to any Party that is in material
breach of any of its covenants, obligations or agreements set forth in this Agreement if such material breach shall have been
the cause of, or resulted in, the failure of the transactions contemplated by this Agreement to be consummated by the Outside
Date;

 

    53

     

    

 

(c) by
Buyer or Seller, if a Governmental Authority of competent jurisdiction has issued an Order permanently enjoining or otherwise
prohibiting the consummation of the transactions contemplated by this Agreement, and such Order has become final and non-appealable;

 

(d) by
Seller, if: (i) Buyer has breached or failed to perform any of its covenants or other agreements contained in this Agreement such
that the closing condition set forth in Section 8.3(b) would not be satisfied; or (ii) there exists a breach of any
representation or warranty of Buyer contained in this Agreement such that the closing condition set forth in Section 8.3(a)
would not be satisfied and, in the case of each of clauses (i) and (ii) above, such breach or failure to perform has not been
waived in writing by Seller or cured by Buyer within thirty (30) days after receipt of written notice thereof or is incapable
of being cured by Buyer by the Outside Date; provided, however, that the right to terminate this Agreement pursuant
to this Section 12.1(d) shall not be available to Seller if Seller is in material breach of any of its covenants, obligations
or agreements set forth in this Agreement and if such material breach would result in the failure of any of the closing conditions
set forth in Section 8.2; or

 

(e) by
Buyer, if: (i) Seller has breached or failed to perform any of its covenants or other agreements contained in this Agreement such
that the closing condition set forth in Section 8.2(b) would not be satisfied; or (ii) there exists a breach of any representation
or warranty of Seller contained in this Agreement such that the closing condition set forth in Section 8.2(a) would not
be satisfied and, in the case of each of clauses (i) and (ii) above, such breach or failure to perform has not been waived in
writing by Buyer or cured by Seller within thirty (30) days after receipt of written notice thereof or is incapable of being cured
by Seller by the Outside Date; provided, however, that the right to terminate this Agreement pursuant to this Section
12.1(e) shall not be available to Buyer if Buyer is in material breach of any of its covenants, obligations or agreements
set forth in this Agreement and if such material breach would result in the failure of any of the closing conditions set forth
in Section 8.3.

 

12.2 Effect
of Termination. In the event of a termination of this Agreement pursuant to Section 12.1 by Seller or Buyer, this Agreement
will become void and have no effect, without any Liability or obligation on the part of Seller or Buyer or any of their respective
officers, directors, stockholders, members, managers or partners, and all rights and obligations of any Party shall cease, provided,
that the termination of this Agreement shall in no way limit any claim by a Party that another Party breached the terms of this
Agreement prior to or in connection with such termination, including by failing to consummate the transactions contemplated by
this Agreement, nor shall such termination limit the right of such non-breaching Party to seek specific performance and all other
remedies available at law or equity. Notwithstanding the foregoing, the provisions of Sections 6.4 and 6.5, 6.11(b),
6.16, this Section 12.2 and Article 13 shall survive any termination of this Agreement.

 

Article
13

MISCELLANEOUS

 

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

 

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13.2 Entire
Agreement. This Agreement (including the documents and the instruments referred to herein) constitutes the entire agreement
among the Parties and supersedes 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.

 

13.3 Succession
and Assignment. Neither this Agreement nor any of the rights, interests or obligations hereunder may be assigned by any of
the Parties, in whole or in part (whether by operation of law or otherwise), without the prior written consent of the other Parties.
Subject to the preceding sentence, this Agreement shall be binding upon, inure to the benefit of and be enforceable by the Parties
and their respective successors and permitted assigns. Any purported assignment in violation of the provisions of this Agreement
shall be null and void ab initio.

 

13.4 Counterparts.
This Agreement 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 Agreement 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.

 

13.5 Headings;
Interpretation. The title of and the section and paragraph headings contained in this Agreement 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 Agreement. The term
“this Agreement” means this Membership Interest Purchase Agreement together with all Schedules and Exhibits hereto,
as the same may from time to time be amended, modified, supplemented or restated in accordance with the terms hereof. The use
in this Agreement of the term “including” or any variation thereof means “including, without limitation.”
The words “herein,” “hereof,” “hereunder” and other words of similar import refer to this
Agreement as a whole, including the Schedules and Exhibits hereto, and not to any particular section, subsection, paragraph, subparagraph
or clause contained in this Agreement. The use herein of the masculine, feminine or neuter forms shall also denote the other forms,
as in each case the context may require or permit. Where specific language is used to clarify by example a general statement contained
herein, such specific language shall not be deemed to modify, limit or restrict in any manner the construction of the general
statement to which it relates.

 

13.6 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 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 Seller or the Company (prior to the Closing):

 

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

 

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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

 

If
to Buyer or the Company (after the Closing):

 

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 or service of process) to:

 

Kutak
Rock LLP

1650
Farnam Street

Omaha,
NE 68102

Attention:     Joel
Wiegert and Lisa Peters

Telephone:    402-346-6000

 

13.7 Governing
Law. This Agreement 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. Each Party agrees and acknowledges that the application of the Laws of the State of Nebraska
is reasonable and appropriate based upon the Parties’ respective interests and contacts with the State of Nebraska. Each
of the Parties 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 Party’s state Law claim, controversy or dispute which
in any way arises out of or relates to this Agreement or the transactions contemplated hereby.

 

    56

     

    

 

13.8 Submission
To Jurisdiction; Waiver of Jury Trial.

 

(a) Each
Party irrevocably agrees that any Action arising out of or relating to this Agreement or any of the transactions contemplated
hereby shall be brought and determined in the courts in Douglas County, Nebraska (and each such Party shall not bring any Action
arising out of or relating to this Agreement or any of the transactions contemplated hereby in any court other than the aforesaid
courts), and each Party hereby irrevocably submits with regard to any such Action for itself and in respect to its property, generally
and unconditionally, to the exclusive jurisdiction of the aforesaid courts. Each Party hereby irrevocably waives, and agrees not
to assert, by way of motion, as a defense, counterclaim or otherwise, in any such Action: (i) any claim that it is not personally
subject to the jurisdiction of the above-named courts for any reason other than the failure to lawfully serve process; (ii) that
it or its property is exempt or immune from jurisdiction of such courts or from any legal process commenced in such courts (whether
through service of notice, attachment prior to judgment, attachment in aid of execution of judgment, execution of judgment or
otherwise); and (iii) that (A) such Action in any such court is brought in an inconvenient forum; (B) the venue of such Action
is improper; and (C) this Agreement, the transactions contemplated hereby or the subject matter hereof or thereof, may not be
enforced in or by such courts. Each Party agrees that delivery of notice to such Party as provided in Section 13.6
shall be deemed effective service of process on such Party; provided, however, the foregoing service of process
will only be deemed effective if all copy party(ies) designated in Section 13.6 for the Party being served also receive
such notice.

 

(b) EACH
PARTY ACKNOWLEDGES AND AGREES THAT ANY CONTROVERSY WHICH MAY ARISE UNDER THIS AGREEMENT 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 AGREEMENT 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 AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION 13.8(b).

 

13.9 Amendments.
Subject to applicable Law, this Agreement may not be amended, modified or supplemented except by an instrument in writing signed
by the Parties.

 

13.10 Extension;
Waiver. At any time prior to the Closing, the Parties may: (a) extend the time for the performance of any of the obligations
or other acts of any Party; (b) waive any inaccuracies in the representations and warranties contained in this Agreement
or in any document delivered pursuant to this Agreement; and (c) waive compliance with any of the agreements or conditions contained
in this Agreement or in any document delivered pursuant to this Agreement. Any agreement on the part of a Party to any such extension
or waiver 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 Agreement to assert any of its rights under this Agreement 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.

 

    57

     

    

 

13.11 Severability.
If any term, provision, covenant or restriction of this Agreement 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 Agreement 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 Agreement 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 Agreement are consummated
as originally contemplated to the greatest extent possible.

 

13.12 Expenses.
Except as otherwise expressly set forth in this Agreement, all fees, costs and expenses, including fees and disbursements of counsel,
financial advisors, brokers, finders, investment bankers and accountants, incurred in connection with this Agreement and the transactions
contemplated hereby shall be paid by the Party incurring such fees, costs and expenses. To the extent not paid at or before Closing,
Seller shall be responsible for the Transaction Expenses.

 

13.13 Construction.
The Parties have participated jointly in the negotiation and drafting of this Agreement. In the event an ambiguity or question
of intent or interpretation arises, this Agreement 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
Agreement.

 

13.14 Incorporation
of Exhibits and Schedules. The Exhibits and Schedules identified in this Agreement are incorporated herein by reference and
made a part hereof.

 

13.15 Specific
Performance. The Parties agree that, if any of the provisions of this Agreement were not to be performed as required by their
specific terms or were to be otherwise breached, irreparable damage will occur to the other Parties, no adequate remedy at law
would exist and damages would be difficult to determine. It is accordingly agreed that Buyer, on the one hand, and Seller, on
the other hand, shall be entitled to an injunction or injunctions to prevent or restrain breaches of this Agreement by the other
(as applicable) and to enforce specifically the terms and provisions of this Agreement. No Party shall oppose, argue, contend
or otherwise be permitted to raise as a defense that an adequate remedy at law exists or that specific performance or equitable
or injunctive relief is unenforceable, invalid, contrary to law or inequitable for any reason with respect to any breach of this
Agreement. Each of the Parties hereby waives: (a) any defenses in any action for specific performance, including the defense that
a remedy at law would be adequate; and (b) any requirement under any Law to post a bond or other security as a prerequisite to
obtaining equitable relief.

 

    58

     

    

 

13.16 
Release.

 

(a) If
and only if the Closing occurs, Seller (on its own behalf and on behalf of each of its Affiliates) hereby forever fully and irrevocably
release and discharge the Company, each of the Company Subsidiaries, and Buyer (and any of Buyer’s Affiliates) from any
and all actions, suits, claims, demands, debts, agreements, obligations, promises, judgments, or liabilities of any kind whatsoever
in law or equity and causes of action of every kind and nature, or otherwise arising out of or related to events, facts, conditions
or circumstances existing or arising prior to the Closing Date, which Seller (or any of its Affiliates) can, shall or may have
against the Company, any of the Company Subsidiaries, or Buyer (or any of Buyer’s Affiliates) whether known or unknown,
suspected or unsuspected, unanticipated as well as anticipated (including all Seller payables and Seller receivables) but specifically
excluding any claims relating to fraud or willful misconduct (collectively, the “Seller Released Claims”).
Notwithstanding the preceding sentence, “Seller Released Claims” does not include, and the provisions of this Section 13.16(a)
shall not release or otherwise diminish the obligations of any Party set forth in or arising under any provisions of this
Agreement or the Ancillary Agreements.

 

(b) If
and only if the Closing occurs, Buyer and the Company (and any of their respective Affiliates) hereby forever fully and irrevocably
release and discharge Seller (and any of its Affiliates) from any and all actions, suits, claims, demands, debts, agreements,
obligations, promises, judgments, or liabilities of any kind whatsoever in law or equity and causes of action of every kind and
nature, or otherwise arising out of or related to events, facts, conditions or circumstances existing or arising prior to the
Closing Date, which Buyer or the Company (or any of their respective Affiliates) can, shall or may have against Seller (or any
of its Affiliates), whether known or unknown, suspected or unsuspected, unanticipated as well as anticipated but specifically
excluding any claims relating to fraud or willful misconduct (collectively, the “Buyer Released Claims”). Notwithstanding
the preceding sentence, “Buyer Released Claims” does not include, and the provisions of this Section 13.16(b)
shall not release or otherwise diminish the obligations of any Party set forth in or arising under any provisions of this Agreement
or the Ancillary Agreements.

 

[Signature
Page Follows]

 

    59

     

    

 

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

 

	 	SELLER:
	 	 
	 	Pacific
Ethanol Central, LLC,

	 	a Delaware limited liability company

	 	 
	 	By:	/s/
    Neil M. Koehler
	 	Name: 	Neil
    M. Koehler
	 	Title:	Chief
    Executive Officer
	 	 	 
	 	COMPANY:
	 	 
	 	PACIFIC
    AURORA, LLC,
 a Delaware limited liability company
	 	 
	 	By:	/s/
    Neil M. Koehler
	 	Name:	Neil
    M. Koehler
	 	Title:	Chief
    Executive Officer
	 	 	 
	 	BUYER:
	 	 
	 	AURORA
    COOPERATIVE ELEVATOR COMPANY,
 a Nebraska cooperative corporation
	 	 
	 	By:	/s/
    Christopher Vincent
	 	Name:	Christopher
    Vincent
	 	Title:	Chief
    Executive Officer

 

Signature
Page to Membership Interest
Purchase Agreement

  

    

     

    

 

Exhibit A

 

Accounting Policies

 

[Attached Hereto]

 

     

     

    

 

 

    A-1

     

    

 

  

    A-2

     

    

 

Exhibit B

 

Net Working Capital Illustration

 

[Attached Hereto]

 

     

     

    

 

  

    B-1

     

    

 

Exhibit
C

 

Ethanol
Specifications

 

Fuel
Ethanol meets the ASTM D4806-99 “Standard Specification for Denatured Fuel Ethanol for Blending with Gasoline for Use as
Automotive Spark-Ignition Engine Fuel.” The ASTM specification is as follows:

 

	Ethanol,
    volume %, min	 	92.1	 	ASTM
    D5501
	 	 	 	 	 
	Methanol,
    volume %, max	 	0.5	 	 
	 	 	 	 	 
	Existent
    Gum, (solvent washed) mg/100ml., max	 	5.0	 	ASTM
    D381
	 	 	 	 	 
	Water
    Content, volume %, max	 	1.0	 	ASTM
    D203
	 	 	 	 	 
	Denaturant
    content, volume %,                    min	 	1.96	 	 
	                                                                      max	 	4.96	 	 
	 	 	 	 	 
	Chloride
    Ion Content, mass ppm, max	 	40	 	ASTM
    D512
	 	 	 	 	 
	Copper
    Content, mg/kg, max	 	0.1	 	ASTM
    D1688
	 	 	 	 	 
	Acidity
    (as acetic acid), mass %, max	 	0.007	 	ASTM
    D 6423
	 	 	 	 	 
	pHe	 	6.5 to 9.0 	 	ASTM D6423
	 	 	 	 	 
	Appearance	 	Visibly
                                         free of suspended or precipitated contaminants, clear and bright
	 	 	 
	Existent
sulfate (mg/kg)	 	4
                                         max ASTM D7319

 

Additional
CA Specifications (to comply with California Air Resources Board specs): 

 

	Sulfur,
    ppm, max	 	10	 	ASTM
    D5453
	 	 	 	 	 
	Benzene,
    volume %, max	 	0.06	 	ASTM
    D5580
	 	 	 	 	 
	Aromatics,
    volume %, max	 	1.7	 	ASTM
    D5580
	 	 	 	 	 
	Olefins,
    volume %, max	 	0.5	 	ASTM
    D319

 

    C-1

     

    

 

Exhibit
D

 

Seller
Deed of Trust Collateral

 

Lot
4 and Outlots 1 and 2, of Pacific Aurora Subdivision, in the City of Aurora, Hamilton County, Nebraska;

 

AND

 

Lots
2 and 6, of Pacific Aurora Subdivision, City of Aurora, Hamilton County, Nebraska, EXCEPT all buildings and improvements located
on the land and any rights thereto, but TOGETHER WITH all railroad tracks, rails, switches and appurtenances thereto.

 

Access
Easement over Lot 4 shown on the plat of AURORA WEST SUBDIVISION REPLAT, recorded September 5, 2007 in Volume 3 of Book 3, Page
386, as to Lot 1 of the Pacific Aurora Subdivision only, but only to the extent such easement benefits the above-described Lots.

 

Railroad
Easement 80 feet in width located under a portion of Harvest Drive, as shown on the plat of AURORA WEST SUBDIVISION REPLAT, recorded
September 5, 2007 in Volume 3 of Book 3, Page 386, but only to the extent such easement benefits the above-described Lots.

 

Underground
utility easement as set forth more fully in Easement (Utility and Right to Enter) dated March 7, 2007, recorded March 21, 2007
as Inst. No. 2007-00488, in Misc. Book 46, Page 146.

 

Underground
utility easement as set forth more fully in Easement (Utility and Right to Enter) dated March 6, 2007, recorded March 21, 2007
as Inst. No. 2007-00519, in Misc. Book 46, Page 150.

 

Underground
utility easement as set forth more fully in Easement (Utility and Right to Enter) dated February 22, 2007, recorded March 21,
2007 as Inst. No. 2007-00520, in Misc. Book 46, Page 151.

 

Underground
utility easement as set forth more fully in Easement (Utility and Right to Enter) dated May 21, 2007, recorded May 31, 2007 as
Inst. No. 2007-01052, in Misc. Book 46, Page 189.

 

Railroad
Easement 80 feet in width located under a portion of Harvest Drive, as shown on the plat of AURORA WEST SUBDIVISION REPLAT, recorded
September 5, 2007 in Plat Book 3, Plat Cabinet C, Page 287 as to Lot 9 and Outlot 1, but only to the extent such easement benefits
the above-described Lots.

 

    D-1

     

    

 

Exhibit
E

 

Purchase
Price Allocation Methodology

 

Pursuant
to Section 11.1(e) of this Agreement, Seller and Buyer agree that the Purchase Price and the liabilities of the Company
(plus other relevant items for income Tax purposes) shall be allocated among the assets of the Company for all Tax purposes, and
the Allocation Schedule shall be prepared in a manner consistent with the methodology set forth in the chart below:

 

	Asset
    Class	Asset
    Description	Methodology
	I	Cash
    and Cash Equivalents	Net
    Book Value
	II	Actively
    Traded Personal Property	Net
    Book Value
	III	Mark-to-Market
    Assets and Accounts Receivable	Net
    Book Value
	IV	Inventory	Net
    Book Value
	V	Other
    Assets	Net
    Book Value
	VI	Section
    197 intangibles (other than Goodwill and Going Concern Value)	Net
    Book Value
	VII	Goodwill
    and Going Concern Value	Residual

 

For
purposes of this Allocation Schedule, the “Net Book Value” amounts set forth above shall be determined on an
accrual basis in accordance with GAAP.

 

 

E-1

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