Exhibit 10.1


 


PACIFIC ETHANOL, INC.


 


Common Stock


(par value $0.001 per share)


 


At Market Issuance Sales Agreement


 


August 13, 2020


 


H.C. Wainwright & Co., LLC

430 Park Avenue

New York, NY 10022


 


Ladies and Gentlemen:


 


Pacific Ethanol, Inc.,
a Delaware corporation (the “Company”), confirms its agreement (this “Agreement”) with H.C.
Wainwright & Co., LLC (“HCW”) as follows:


 


1. Issuance and
Sale of Shares. The Company agrees that, from time to time during the term of this Agreement, on the terms and subject to the
conditions set forth herein, it may issue and sell through HCW, shares (the “Placement Shares”) of the Company’s
common stock, par value $0.001 per share (the “Common Stock”); provided, however, that in no event shall
the Company issue or sell through HCW such number of Placement Shares that (a) exceeds the number of shares or dollar amount of
Common Stock registered on the effective Registration Statement (as defined below) pursuant to which the offering is being made,
(b) exceeds the number of shares or dollar amount registered on the Prospectus (as defined below) or (c) would cause the Company
or the offering of the Placement Shares to not satisfy the eligibility and transaction requirements for use of Form S-3, including,
if applicable, General Instruction I.B.6 of Form S-3 (the lesser of (a), (b) or (c), the “Maximum Amount”).
Notwithstanding anything to the contrary contained herein, the parties hereto agree that compliance with the limitations set forth
in this Section 1 on the number of Placement Shares issued and sold under this Agreement shall be the sole responsibility
of the Company and that HCW shall have no obligation in connection with such compliance. The issuance and sale of Placement Shares
through HCW will be effected pursuant to the Registration Statement (as defined below), although nothing in this Agreement shall
be construed as requiring the Company to use the Registration Statement to issue any Placement Shares.


 






    	 		 



     


    

 


The Company has filed,
in accordance with the provisions of the Securities Act of 1933, as amended, and the rules and regulations thereunder (the “Securities
Act”), with the Securities and Exchange Commission (the “Commission”), a registration statement on
Form S-3 (File No. 333-238939), including a base prospectus, relating to certain securities to be issued from time to time by the
Company, and which incorporates by reference documents that the Company has filed or will file in accordance with the provisions
of the Securities Exchange Act of 1934, as amended, and the rules and regulations thereunder (the “Exchange Act”).
The Company has prepared a prospectus supplement specifically relating to the Placement Shares (the “Prospectus Supplement”)
to the base prospectus included as part of such registration statement. The Company will furnish to HCW, for use by HCW, copies
of the prospectus included as part of such registration statement, as supplemented by the Prospectus Supplement relating to the
Placement Shares. Except where the context otherwise requires, such registration statement, and any post-effective amendment thereto,
including all documents filed as part thereof or incorporated by reference therein, and including any information contained in
a Prospectus (as defined below) subsequently filed with the Commission pursuant to Rule 424(b) under the Securities Act or deemed
to be a part of such registration statement pursuant to Rule 430B of the Securities Act, is herein called the “Registration
Statement.” The base prospectus, including all documents incorporated or deemed incorporated therein by reference to
the extent such information has not been superseded or modified in accordance with Rule 412 under the Securities Act (as qualified
by Rule 430B(g) of the Securities Act), included in the Registration Statement, as it may be supplemented by the Prospectus Supplement,
in the form in which such prospectus and/or Prospectus Supplement have most recently been filed by the Company with the Commission
pursuant to Rule 424(b) under the Securities Act, is herein called the “Prospectus.” Any reference herein to
the Registration Statement, the Prospectus or any amendment or supplement thereto shall be deemed to refer to and include the documents
incorporated by reference therein, and any reference herein to the terms “amend,” “amendment” or “supplement”
with respect to the Registration Statement or the Prospectus shall be deemed to refer to and include the filing after the execution
hereof of any document with the Commission incorporated by reference therein (the “Incorporated Documents”).


 


For purposes of this
Agreement, all references to the Registration Statement, the Prospectus or to any amendment or supplement thereto shall be deemed
to include the most recent copy filed with the Commission pursuant to its Electronic Data Gathering Analysis and Retrieval System,
or if applicable, the Interactive Data Electronic Application system when used by the Commission (collectively, “EDGAR”).


 


2. Placements.
Each time that the Company wishes to issue and sell Placement Shares hereunder (each, a “Placement”), it will
notify HCW by electronic mail (or other method mutually agreed to in writing by the parties) of the number of Placement Shares,
the time period during which sales are requested to be made, any limitation on the number of Placement Shares that may be sold
in any one day and any minimum price below which sales may not be made (a “Placement Notice”), the form of which
is attached hereto as Schedule 1. The Placement Notice shall originate from any of the individuals from the Company set
forth on Schedule 3 (with a copy to each of the other individuals from the Company listed on such schedule), and shall be
addressed to each of the individuals from HCW set forth on Schedule 3, as such Schedule 3 may be amended from time
to time. The Placement Notice shall be effective immediately upon receipt by HCW unless and until (i) HCW declines in writing to
accept the terms contained therein for any reason, in its sole discretion, (ii) the entire amount of the Placement Shares thereunder
has been sold, (iii) the Company suspends or terminates the Placement Notice, which suspension and termination rights may be exercised
by the Company in its sole discretion, or (iv) this Agreement has been terminated under the provisions of Section 13. The
amount of any discount, commission or other compensation to be paid by the Company to HCW in connection with the sale of the Placement
Shares shall be calculated in accordance with the terms set forth in Schedule 2. It is expressly acknowledged and agreed
that neither the Company nor HCW will have any obligation whatsoever with respect to a Placement or any Placement Shares unless
and until the Company delivers a Placement Notice to HCW and HCW does not decline such Placement Notice pursuant to the terms set
forth above, and then only upon the terms specified therein and herein. In the event of a conflict between the terms of Sections
2 or 3 of this Agreement and the terms of a Placement Notice, the terms of the Placement Notice will control.


 






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3. Sale of Placement
Shares by HCW. Subject to the terms and conditions of this Agreement, for the period specified in a Placement Notice, HCW will
use its commercially reasonable efforts consistent with its normal trading and sales practices and applicable state and federal
laws, rules and regulations and the rules of the NASDAQ Capital Market (the “Exchange”), to sell the Placement
Shares up to the amount specified in, and otherwise in accordance with the terms of, such Placement Notice. HCW will provide written
confirmation to the Company no later than the opening of the Trading Day (as defined below) immediately following the Trading Day
on which it has made sales of Placement Shares hereunder setting forth the number of Placement Shares sold on such day, the compensation
payable by the Company to HCW pursuant to Section 2 with respect to such sales, and the Net Proceeds (as defined below)
payable to the Company, with an itemization of the deductions made by HCW (as set forth in Section 5(b)) from the gross
proceeds that it receives from such sales. Subject to the terms of a Placement Notice, HCW may sell Placement Shares by any method
permitted by law deemed to be an “at the market offering” as defined in Rule 415 of the Securities Act. “Trading
Day” means any day on which shares of Common Stock are purchased and sold on the Exchange.


 


4. Suspension of
Sales. The Company or HCW may, upon notice to the other party in writing (including by email correspondence to each of the
individuals of the other party set forth on Schedule 3, if receipt of such correspondence is actually acknowledged by any
of the individuals to whom the notice is sent, other than via auto-reply) or by telephone (confirmed immediately by verifiable
facsimile transmission or email correspondence to each of the individuals of the other party set forth on Schedule 3), suspend
any sale of Placement Shares (a “Suspension”); provided, however, that such Suspension shall not affect
or impair any party’s obligations with respect to any Placement Shares sold hereunder prior to the receipt of such notice.
While a Suspension is in effect, any obligation under Sections 7(l), 7(m), and 7(n) with respect to the delivery
of certificates, opinions, or comfort letters to HCW, shall be waived. Each of the parties agrees that no such notice under this
Section 4 shall be effective against any other party unless it is made to one of the individuals named on Schedule 3
hereto, as such Schedule may be amended from time to time.


 


5. Sale and Delivery
to HCW; Settlement.


 


a. Sale of Placement
Shares. On the basis of the representations and warranties herein contained and subject to the terms and conditions herein
set forth, upon HCW’s acceptance of the terms of a Placement Notice, and unless the sale of the Placement Shares described
therein has been declined, suspended, or otherwise terminated in accordance with the terms of this Agreement, HCW, for the period
specified in the Placement Notice, will use its commercially reasonable efforts consistent with its normal trading and sales practices
and applicable state and federal laws, rules and regulations and the rules of the Exchange to sell such Placement Shares up to
the amount specified in, and otherwise in accordance with the terms of, such Placement Notice. The Company acknowledges and agrees
that (i) there can be no assurance that HCW will be successful in selling Placement Shares, (ii) HCW will incur no liability or
obligation to the Company or any other person or entity if it does not sell Placement Shares for any reason other than a failure
by HCW to use its commercially reasonable efforts consistent with its normal trading and sales practices and applicable state and
federal laws, rules and regulations and the rules of the Exchange to sell such Placement Shares as required under this Agreement
and (iii) HCW shall be under no obligation to purchase Placement Shares on a principal basis pursuant to this Agreement, except
as otherwise agreed by HCW and the Company.


 






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b. Settlement of Placement
Shares. Unless otherwise specified in the applicable Placement Notice, settlement for sales of Placement Shares will occur
at 10:00 a.m. (New York City time) on the second (2nd) Trading Day (or such earlier day as is industry practice for
regular-way trading) following the date on which such sales are made (each, a “Settlement Date”). HCW shall
notify the Company of each sale of Placement Shares no later than opening of trading the day following the Trading Day that HCW
sold Placement Shares. The amount of proceeds to be delivered to the Company on a Settlement Date against receipt of the Placement
Shares sold (the “Net Proceeds”) will be equal to the aggregate sales price received by HCW, after deduction
for (i) HCW’s commission, discount or other compensation for such sales payable by the Company pursuant to Section 2
hereof, and (ii) any transaction fees imposed by any clearing firm, execution broker, governmental or self-regulatory organization
in respect of such sales.


 


c. Delivery of Placement
Shares. On or before each Settlement Date, the Company will, or will cause its transfer agent to, electronically transfer the
Placement Shares being sold by crediting HCW’s or its designee’s account (provided HCW shall have given the Company
written notice of such designee and such designee’s account information at least two Trading Days prior to the Settlement
Date) at The Depository Trust Company through its Deposit and Withdrawal at Custodian System or by such other means of delivery
as may be mutually agreed upon by the parties hereto which in all cases shall be freely tradable, transferable, registered shares
in good deliverable form. On each Settlement Date, HCW will deliver the related Net Proceeds in same day funds to an account designated
by the Company on, or prior to, the Settlement Date. The Company agrees that if the Company, or its transfer agent (if applicable),
defaults in its obligation to deliver Placement Shares on a Settlement Date through no fault of HCW, then in addition to and in
no way limiting the rights and obligations set forth in Section 11(a) hereto, it will (i) hold HCW harmless against any
loss, claim, damage, or reasonable, documented expense (including reasonable and documented legal fees and expenses), as incurred,
arising out of or in connection with such default by the Company or its transfer agent (if applicable) and (ii) pay to HCW (without
duplication) any commission, discount, or other compensation to which it would otherwise have been entitled absent such default.


 


d. Limitations on
Offering Size. Under no circumstances shall the Company cause or request the offer or sale of any Placement Shares if, after
giving effect to the sale of such Placement Shares, the aggregate number of Placement Shares sold pursuant to this Agreement would
exceed the lesser of (A) together with all sales of Placement Shares under this Agreement, the Maximum Amount, (B) the amount available
for offer and sale under the currently effective Registration Statement and (C) the amount authorized from time to time to be issued
and sold under this Agreement by the Company’s board of directors, a duly authorized committee thereof or a duly authorized
executive committee, and notified to HCW in writing. Under no circumstances shall the Company cause or request the offer or sale
of any Placement Shares pursuant to this Agreement at a price lower than the minimum price authorized from time to time by the
Company’s board of directors, a duly authorized committee thereof or a duly authorized executive committee, and notified
to HCW in writing. Further, under no circumstances shall the Company cause or permit the aggregate offering amount of Placement
Shares sold pursuant to this Agreement to exceed the Maximum Amount.


 






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6. Representations
and Warranties of the Company. Except as disclosed in the Registration Statement or Prospectus (including the Incorporated
Documents), the Company represents and warrants to, and agrees with HCW that as of the date of this Agreement and as of each Applicable
Time (as defined in Section 25 below), unless such representation, warranty or agreement specifies a different date or time:


 


a. Registration Statement
and Prospectus. The Company and the transactions contemplated by this Agreement meet the requirements for and comply with the
conditions for the use of Form S-3 under the Securities Act. The Registration Statement has been filed with the Commission and
has been declared effective under the Securities Act. The Prospectus will name HCW as the agent in the section entitled “Plan
of Distribution.” The Company has not received, and has no notice of, any order of the Commission preventing or suspending
the use of the Registration Statement, or threatening or instituting proceedings for that purpose. The Registration Statement and
the offer and sale of Placement Shares as contemplated hereby meet the requirements of Rule 415 under the Securities Act and comply
in all material respects with said Rule. Any statutes, regulations, contracts or other documents that are required to be described
in the Registration Statement or the Prospectus or to be filed as exhibits to the Registration Statement have been so described
or filed, as applicable. Copies of the Registration Statement, the Prospectus, and any such amendments or supplements and all documents
incorporated by reference therein that were filed with the Commission on or prior to the date of this Agreement have been delivered,
or are available through EDGAR, to HCW and its counsel. The Company has not distributed and, prior to the later to occur of each
Settlement Date and completion of the distribution of the Placement Shares, will not distribute any offering material in connection
with the offering or sale of the Placement Shares other than the Registration Statement and the Prospectus and any Issuer Free
Writing Prospectus (as defined below) to which HCW has consented, which consent will not be unreasonably withheld or delayed, or
that is required by applicable law or the listing maintenance requirements of the Exchange. The Common Stock is currently quoted
on the Exchange under the trading symbol “PEIX.” Except for the Company’s failure to meet the minimum bid price
requirement under Nasdaq Listing Rule 5550(a)(2), to the Company’s knowledge, it is in compliance with all listing and maintenance
requirements of the Exchange. Notwithstanding anything to the contrary contained in this Agreement, the representations and warranties
set forth in the first four (4) sentences of this Section 6(a) shall not be made by the Company as of the date of this Agreement.


 






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b. No Misstatement
or Omission. At each Settlement Date, the Registration Statement and the Prospectus, as of such date, will conform in all material
respects with the requirements of the Securities Act. The Registration Statement, when it became or becomes effective, did not,
and will not, contain an untrue statement of a material fact or omit to state a material fact required to be stated therein or
necessary to make the statements therein not misleading. The Prospectus and any amendment and supplement thereto, on the date thereof
and at each Applicable Time (defined below), did not or will not include an untrue statement of a material fact or omit to state
a material fact necessary to make the statements therein, in light of the circumstances under which they were made, not misleading.
The documents incorporated by reference in the Prospectus or any Prospectus Supplement did not, and any further documents filed
and incorporated by reference therein will not, when filed with the Commission, contain an untrue statement of a material fact
or omit to state a material fact required to be stated in such document or necessary to make the statements in such document, in
light of the circumstances under which they were made, not misleading. The foregoing shall not apply to statements in, or omissions
from, any such document made in reliance upon, and in conformity with, information furnished to the Company by HCW specifically
for use in the preparation thereof. Notwithstanding anything to the contrary contained in this Agreement, the representations and
warranties set forth in this Section 6(b) shall not be made by the Company as of the date of this Agreement.


 


c. Conformity with
Securities Act and Exchange Act. The Registration Statement, the Prospectus, any Issuer Free Writing Prospectus or any amendment
or supplement thereto, and the Incorporated Documents, when such documents were or are filed with the Commission under the Securities
Act or the Exchange Act or became or become effective under the Securities Act, as the case may be, conformed or will conform in
all material respects with the requirements of the Securities Act and the Exchange Act, as applicable.


 


d. Financial Information.
The consolidated financial statements of the Company included or incorporated by reference in the Registration Statement and the
Prospectus, together with the related notes and schedules, present fairly, in all material respects, the consolidated financial
position of the Company and the Subsidiaries (as defined below) as of the dates indicated and the consolidated results of operations,
cash flows and changes in stockholders’ equity of the Company and the Subsidiaries for the periods specified (subject, in
the case of unaudited statements, to normal year-end audit adjustments which will not be material, either individually or in the
aggregate) and have been prepared in compliance with the published requirements of the Securities Act and Exchange Act, as applicable,
and in conformity with generally accepted accounting principles in the United States (“GAAP”) applied on a consistent
basis (except (i) for such adjustments to accounting standards and practices as are noted therein and (ii) in the case of unaudited
interim statements, to the extent they may exclude footnotes or may be condensed or summary statements) during the periods involved;
the other financial and statistical data with respect to the Company and the Subsidiaries contained or incorporated by reference
in the Registration Statement and the Prospectus, are accurately and fairly presented and prepared on a basis consistent with the
financial statements and books and records of the Company; there are no financial statements (historical or pro forma) that are
required to be included or incorporated by reference in the Registration Statement, or the Prospectus that are not included or
incorporated by reference as required; the Company and the Subsidiaries do not have any material liabilities or obligations, direct
or contingent (including any off balance sheet obligations), not described in the Registration Statement, and the Prospectus which
are required to be described in the Registration Statement or Prospectus; and all disclosures contained or incorporated by reference
in the Registration Statement and the Prospectus, if any, regarding “non-GAAP financial measures” (as such term is
defined by the rules and regulations of the Commission) comply in all material respects with Regulation G of the Exchange Act and
Item 10 of Regulation S-K under the Securities Act, to the extent applicable.


 






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e. Conformity with
EDGAR Filing. The Prospectus delivered to HCW for use in connection with the sale of the Placement Shares pursuant to this
Agreement will be identical to the versions of the Prospectus created to be transmitted to the Commission for filing via EDGAR,
except to the extent permitted by Regulation S-T.


 


f. Organization.
The Company and any subsidiary that is a significant subsidiary (as such term is defined in Rule 1-02 of Regulation S-X promulgated
by the Commission) (each, a “Subsidiary,” collectively, the “Subsidiaries”), are, and will
be, duly organized, validly existing as a corporation or limited liability company, as the case may be, and in good standing under
the laws of their respective jurisdictions of organization. The Company and the Subsidiaries are duly licensed or qualified as
a foreign corporation or limited liability company for transaction of business and in good standing under the laws of each other
jurisdiction in which their respective ownership or lease of property or the conduct of their respective businesses requires such
license or qualification, and have all corporate or limited liability company power and authority necessary to own or hold their
respective properties and to conduct their respective businesses as described in the Registration Statement and the Prospectus,
except where the failure to be so qualified or in good standing or have such power or authority would not, individually or in the
aggregate, have a material adverse effect on the assets, business, operations, earnings, properties, condition (financial or otherwise),
prospects, stockholders’ equity or results of operations of the Company and the Subsidiaries taken as a whole, or prevent
the consummation of the transactions contemplated hereby (a “Material Adverse Effect”).


 


g. Subsidiaries.
As of the date hereof, the Company’s only Subsidiaries are set forth on Schedule 6(g). The Company owns directly or
indirectly, all of the equity interests of the Subsidiaries (except as set forth on Schedule 6(g)) free and clear of any lien,
charge, security interest, encumbrance, right of first refusal or other restriction, and all the equity interests of the Subsidiaries
are validly issued and are fully paid, nonassessable and free of preemptive and similar rights.


 


h. No Violation or
Default. Neither the Company nor any Subsidiary is (i) in violation of its charter or by-laws or similar organizational documents;
(ii) in default, and no event has occurred that, with notice or lapse of time or both, would constitute such a default, in the
due performance or observance of any term, covenant or condition contained in any indenture, mortgage, deed of trust, loan agreement
or other similar agreement or instrument to which the Company or any Subsidiary is a party or by which the Company or any Subsidiary
is bound or to which any of the property or assets of the Company or any Subsidiary is subject; or (iii) in violation of any law
or statute or any judgment, order, rule or regulation of any court or arbitrator or governmental or regulatory authority, except,
in the case of each of clauses (ii) and (iii) above, for any such violation or default that would not, individually or in the aggregate,
have a Material Adverse Effect. To the Company’s knowledge, no other party under any material contract or other agreement
to which it or any Subsidiary is a party is in default in any respect thereunder where such default would have a Material Adverse
Effect.


 






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i. No Material Adverse
Effect. Since the date of the most recent financial statements of the Company included or incorporated by reference in the
Registration Statement and Prospectus, there has not been (i) any Material Adverse Effect, or any development that would result
in a Material Adverse Effect, (ii) any transaction which is material to the Company and the Subsidiaries taken as a whole, (iii)
any obligation or liability, direct or contingent (including any off-balance sheet obligations), incurred by the Company or the
Subsidiaries, which is material to the Company and the Subsidiaries taken as a whole, (iv) any material change in the capital stock
(other than (A) the grant of additional options under the Company’s existing stock option plans, (B) changes in the number
of outstanding Common Stock of the Company due to the issuance of shares upon the exercise or conversion of securities exercisable
for, or convertible into, Common Stock outstanding on the date hereof, (C) as a result of the issuance of Placement Shares, (D)
any repurchases of capital stock of the Company, (E) as described in a proxy statement filed on Schedule 14A or a Registration
Statement on Form S-4, or (F) otherwise publicly announced) or outstanding long-term indebtedness of the Company or the Subsidiaries
or (v) any dividend or distribution of any kind declared, paid or made on the capital stock of the Company or any Subsidiary, other
than in each case above in the ordinary course of business or as otherwise disclosed in the Registration Statement or Prospectus
(including any document incorporated by reference therein).


 


j. Capitalization.
The issued and outstanding shares of capital stock of the Company have been validly issued, are fully paid and non-assessable and,
other than as disclosed in the Registration Statement or the Prospectus, are not subject to any preemptive rights, rights of first
refusal or similar rights. The Company has an authorized, issued and outstanding capitalization as set forth in the Registration
Statement and the Prospectus as of the dates referred to therein (other than (i) the grant of additional options under the Company’s
existing stock option plans, (ii) changes in the number of outstanding Common Stock of the Company due to the issuance of shares
upon the exercise or conversion of securities exercisable for, or convertible into, Common Stock outstanding on the date hereof,
(iii) as a result of the issuance of Placement Shares, or (iv) any repurchases of capital stock of the Company) and such authorized
capital stock conforms to the description thereof set forth in the Registration Statement and the Prospectus. The description of
the Common Stock in the Registration Statement and the Prospectus is complete and accurate in all material respects. Except as
disclosed in or contemplated by the Registration Statement or the Prospectus, the Company did not have outstanding any options
to purchase, or any rights or warrants to subscribe for, or any securities or obligations convertible into, or exchangeable for,
or any contracts or commitments to issue or sell, any shares of capital stock or other securities.


 


k. S-3 Eligibility.
(i) At the time of filing the Registration Statement and (ii) at the time of the most recent amendment thereto for the purposes
of complying with Section 10(a)(3) of the Securities Act (whether such amendment was by post-effective amendment, incorporated
report filed pursuant to Section 13 or 15(d) of the Exchange Act or form of prospectus), the Company met the then applicable requirements
for use of Form S-3 under the Securities Act, including compliance with General Instruction I.B.1 of Form S-3, as applicable. The
Company is not a shell company (as defined in Rule 405 under the Securities Act) and has not been a shell company for at least
12 calendar months previously and if it has been a shell company at any time previously, has filed current Form 10 information
(as defined in General Instruction I.B.6 of Form S-3) with the Commission at least 12 calendar months previously reflecting its
status as an entity that is not a shell company.


 






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l. Authorization;
Enforceability. The Company has full legal right, power and authority to enter into this Agreement and perform the transactions
contemplated hereby. This Agreement has been duly authorized, executed and delivered by the Company and is a legal, valid and binding
agreement of the Company enforceable against the Company in accordance with its terms, except to the extent that (i) enforceability
may be limited by bankruptcy, insolvency, reorganization, moratorium or similar laws affecting creditors’ rights generally
and by general equitable principles and (ii) the indemnification and contribution provisions of Section 11 hereof may be
limited by federal or state securities laws and public policy considerations in respect thereof.


 


m. Authorization of
Placement Shares. The Placement Shares, when issued and delivered pursuant to the terms approved by the board of directors
of the Company or a duly authorized committee thereof, or a duly authorized executive committee, against payment therefor as provided
herein, will be duly and validly authorized and issued and fully paid and nonassessable, free and clear of any pledge, lien, encumbrance,
security interest or other claim (other than any pledge, lien, encumbrance, security interest or other claim arising from an act
or omission of HCW or a purchaser), including any statutory or contractual preemptive rights, resale rights, rights of first refusal
or other similar rights, and will be registered pursuant to Section 12 of the Exchange Act. The Placement Shares, when issued,
will conform in all material respects to the description thereof set forth in or incorporated into the Prospectus.


 


n. No Consents Required.
No consent, approval, authorization, order, registration or qualification of or with any court or arbitrator or any governmental
or regulatory authority is required for the execution, delivery and performance by the Company of this Agreement, and the issuance
and sale by the Company of the Placement Shares as contemplated hereby, except for such consents, approvals, authorizations, orders
and registrations or qualifications (i) as may be required under applicable state securities laws or by the by-laws and rules of
the Financial Industry Regulatory Authority (“FINRA”) or the Exchange, including any notices that may be required
by the Exchange, in connection with the sale of the Placement Shares by HCW, (ii) as may be required under the Securities Act and
(iii) as have been previously obtained by the Company.


 


o. No Preferential
Rights. (i) No person, as such term is defined in Rule 1-02 of Regulation S-X promulgated under the Securities Act (each, a
“Person”), has the right, contractual or otherwise, to cause the Company to issue or sell to such Person any
Common Stock or shares of any other capital stock or other securities of the Company (other than upon the exercise of options or
warrants to purchase Common Stock or upon the exercise of options that may be granted from time to time under the Company’s
stock option plan), (ii) no Person has any preemptive rights, rights of first refusal, or any other rights (whether pursuant to
a “poison pill” provision or otherwise) to purchase any Common Stock or shares of any other capital stock or other
securities of the Company from the Company which have not been duly waived with respect to the offering contemplated hereby, (iii)
as of the date hereof, no Person has the right to act as an underwriter or as a financial advisor to the Company in connection
with the offer and sale of the Common Stock, and (iv) no Person has the right, contractual or otherwise, to require the Company
to include any shares of Common Stock or other securities in the Registration Statement or the offering contemplated hereby, whether
as a result of the filing or effectiveness of the Registration Statement or the sale of the Placement Shares as contemplated thereby,
except in each case for such rights as have been waived on or prior to the date hereof.


 






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p. Independent Public
Accountant. RSM US LLP (the “Accountant”), whose report on the consolidated financial statements of the
Company is filed with the Commission as part of the Company’s most recent Annual Report on Form 10-K filed with the Commission
and incorporated into the Registration Statement, are and, during the periods covered by their report, were independent public
accountants within the meaning of the Securities Act and the Public Company Accounting Oversight Board (United States). To the
Company’s knowledge, the Accountant is not in violation of the auditor independence requirements of the Sarbanes-Oxley Act
of 2002 (the “Sarbanes-Oxley Act”) with respect to the Company.


 


q. Enforceability
of Agreements. All agreements between the Company and third parties expressly referenced in the Prospectus, other than such
agreements that have expired by their terms or whose termination is disclosed in documents filed by the Company on EDGAR, are legal,
valid and binding obligations of the Company and, to the Company’s knowledge, enforceable in accordance with their respective
terms, except to the extent that (i) enforceability may be limited by bankruptcy, insolvency, reorganization, moratorium or similar
laws affecting creditors’ rights generally and by general equitable principles and (ii) the indemnification provisions of
certain agreements may be limited by federal or state securities laws or public policy considerations in respect thereof, and except
for any unenforceability that, individually or in the aggregate, would not have a Material Adverse Effect.


 


r. No Litigation.
There are no legal or governmental proceedings pending or threatened to which the Company or any Subsidiary is a party or to which
any of the properties of the Company or any Subsidiary is subject (i) other than proceedings accurately described in all material
respects in the Prospectus and proceedings that would not have a Material Adverse Effect on the Company and its subsidiaries, taken
as a whole, or on the power or ability of the Company to perform its obligations under this Agreement or to consummate the transactions
contemplated by the Prospectus or (ii) that are required to be described in the Registration Statement or the Prospectus and are
not so described; and there are no statutes, regulations, contracts or other documents that are required to be described in the
Registration Statement or the Prospectus or to be filed as exhibits to the Registration Statement that are not described or filed
as required.


 


s. Licenses and Permits.
The Company and the Subsidiaries possess or have obtained, all licenses, certificates, consents, orders, approvals, permits and
other authorizations issued by, and have made all declarations and filings with, the appropriate federal, state, local or foreign
governmental or regulatory authorities that are necessary for the ownership or lease of their respective properties or the conduct
of their respective businesses as currently conducted, as described in the Registration Statement and the Prospectus (the “Permits”),
except where the failure to possess, obtain or make the same would not, individually or in the aggregate, have a Material Adverse
Effect. Neither the Company nor any Subsidiary has received written notice of any proceeding relating to revocation or modification
of any such Permit or has any reason to believe that such Permit will not be renewed in the ordinary course, except where the failure
to obtain any such renewal would not, individually or in the aggregate, have a Material Adverse Effect.


 






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t. No Material Defaults.
Neither the Company nor any Subsidiary has defaulted on any installment on indebtedness for borrowed money or on any rental on
one or more long-term leases, which defaults, individually or in the aggregate, would have a Material Adverse Effect. The Company
has not filed a report pursuant to Section 13(a) or 15(d) of the Exchange Act since the filing of its last Annual Report on Form
10-K, indicating that it (i) has failed to pay any dividend or sinking fund installment on preferred stock or (ii) has defaulted
on any installment on indebtedness for borrowed money or on any rental on one or more long-term leases, which defaults, individually
or in the aggregate, would have a Material Adverse Effect.


 


u. Certain Market
Activities. Neither the Company, nor any Subsidiary, nor, to the knowledge of the Company, any of their respective directors,
officers or controlling persons has taken, directly or indirectly, any action designed, or that has constituted or would cause
or result in, under the Exchange Act or otherwise, the stabilization or manipulation of the price of any security of the Company
to facilitate the sale or resale of the Placement Shares.


 


v. Broker/Dealer Relationships.
Neither the Company nor any Subsidiary or any related entities (i) is required to register as a “broker” or “dealer”
in accordance with the provisions of the Exchange Act or (ii) directly or indirectly through one or more intermediaries, controls
or is a “person associated with a member” or “associated person of a member” (within the meaning set forth
in the FINRA Manual).


 


w. No Reliance.
The Company has not relied upon HCW or legal counsel for HCW for any legal, tax or accounting advice in connection with the offering
and sale of the Placement Shares.


 


x. Taxes. The
Company and the Subsidiaries have filed all federal, state, local and foreign tax returns which have been required to be filed
and paid all taxes shown thereon through the date hereof, to the extent that such taxes have become due and are not being contested
in good faith, except where the failure to do so would not have a Material Adverse Effect. Except as otherwise disclosed in or
contemplated by the Registration Statement or the Prospectus, no tax deficiency has been determined adversely to the Company or
any Subsidiary which has had, or would have, individually or in the aggregate, a Material Adverse Effect. The Company has no knowledge
of any federal, state or other governmental tax deficiency, penalty or assessment which has been or might be asserted or threatened
against it which would have a Material Adverse Effect.


 






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y. Title to Real and
Personal Property. The Company and the Subsidiaries have good and valid title in fee simple to all items of real property and
good and valid title to all personal property described in the Registration Statement or Prospectus as being owned by them that
are material to the businesses of the Company or such Subsidiary, in each case free and clear of all liens, encumbrances and claims,
except those that (i) do not materially interfere with the use made and proposed to be made of such property by the Company and
the Subsidiaries or (ii) would not, individually or in the aggregate, have a Material Adverse Effect. Any real property described
in the Registration Statement or Prospectus as being leased by the Company and the Subsidiaries is held by them under valid, existing
and enforceable leases, except those that (A) do not materially interfere with the use made or proposed to be made of such property
by the Company or the Subsidiaries or (B) would not, individually or in the aggregate, have a Material Adverse Effect.


 


z. Intellectual Property.
The Company and the Subsidiaries own or possess adequate enforceable rights to use all patents, patent applications, trademarks
(both registered and unregistered), service marks, trade names, trademark registrations, service mark registrations, copyrights,
licenses and know-how (including trade secrets and other unpatented and/or unpatentable proprietary or confidential information,
systems or procedures) (collectively, the “Intellectual Property”), necessary for the conduct of their respective
businesses as conducted as of the date hereof, except to the extent that the failure to own or possess adequate rights to use such
Intellectual Property would not, individually or in the aggregate, have a Material Adverse Effect; the Company and the Subsidiaries
have not received any written notice of any claim of infringement or conflict with asserted Intellectual Property rights of others,
which infringement or conflict, if the subject of an unfavorable decision, result in a Material Adverse Effect; there are no pending,
or to the Company’s knowledge, threatened judicial proceedings or interference proceedings against the Company or its Subsidiaries
challenging the Company’s or any of its Subsidiary’s rights in or to or the validity of the scope of any of the Company’s
or any Subsidiary’s patents, patent applications or proprietary information, except for such right or claim that would not,
individually or in the aggregate, reasonably be expected to result in a Material Adverse Effect; to the Company’s knowledge,
no other entity or individual has any right or claim in any of the Company’s or any of its Subsidiary’s patents, patent
applications or any patent to be issued therefrom by virtue of any contract, license or other agreement entered into between such
entity or individual and the Company or any Subsidiary or by any non-contractual obligation, other than by written licenses granted
by the Company or any Subsidiary, except for such right or claim that would not, individually or in the aggregate, have a Material
Adverse Effect; the Company and the Subsidiaries have not received any written notice of any claim challenging the rights of the
Company or its Subsidiaries in or to any Intellectual Property owned, licensed or optioned by the Company or any Subsidiary which
claim, if the subject of an unfavorable decision would result in a Material Adverse Effect.


 


aa. Environmental
Laws. The Company and the Subsidiaries (i) are in compliance with any and all applicable federal, state, local and foreign
laws, rules, regulations, decisions and orders relating to the protection of human health and safety, the environment or hazardous
or toxic substances or wastes, pollutants or contaminants (collectively, “Environmental Laws”); (ii) have received
and are in compliance with all permits, licenses or other approvals required of them under applicable Environmental Laws to conduct
their respective businesses as described in the Registration Statement and the Prospectus; and (iii) have not received notice of
any actual or potential liability for the investigation or remediation of any disposal or release of hazardous or toxic substances
or wastes, pollutants or contaminants, except, in the case of any of clauses (i), (ii) or (iii) above, for any such failure to
comply or failure to receive required permits, licenses, other approvals or liability as would not, individually or in the aggregate,
have a Material Adverse Effect.


 






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bb. Disclosure Controls.
The Company maintains a system of internal accounting controls sufficient to provide reasonable assurance that (i) transactions
are executed in accordance with management’s general or specific authorizations; (ii) transactions are recorded as necessary
to permit preparation of financial statements in conformity with GAAP and to maintain asset accountability; (iii) access to assets
is permitted only in accordance with management’s general or specific authorization; and (iv) the recorded accountability
for assets is compared with the existing assets at reasonable intervals and appropriate action is taken with respect to any differences.
The Company is not aware of any material weaknesses in its internal control over financial reporting (other than as set forth in
the Registration Statement or the Prospectus). Since the date of the latest audited financial statements of the Company included
in the Prospectus, there has been no change in the Company’s internal control over financial reporting that has materially
affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting (other than
as set forth in the Registration Statement or the Prospectus). The Company has established disclosure controls and procedures (as
defined in Exchange Act Rules 13a-15 and 15d-15) that comply with the requirements of the Exchange Act. The Company’s certifying
officers have evaluated the effectiveness of the Company’s controls and procedures as of a date within 90 days prior to the
filing date of the Form 10-K for the fiscal year most recently ended (such date, the “Evaluation Date”). The
Company presented in its Form 10-K for the fiscal year most recently ended the conclusions of the certifying officers about the
effectiveness of the disclosure controls and procedures based on their evaluations as of the most recent Evaluation Date, and the
“disclosure controls and procedures” are effective.


 


cc. Sarbanes-Oxley
Act. There is and has been no failure on the part of the Company or, to the knowledge of the Company, any of the Company’s
directors or officers, in their capacities as such, to comply in all material respects with any applicable provisions of the Sarbanes-Oxley
Act and the rules and regulations promulgated thereunder. Each of the principal executive officer and the principal financial officer
of the Company (or each former principal executive officer of the Company and each former principal financial officer of the Company
as applicable) has made all certifications required by Sections 302 and 906 of the Sarbanes-Oxley Act with respect to all reports,
schedules, forms, statements and other documents required to be filed by it or furnished by it to the Commission during the past
12 months. For purposes of the preceding sentence, “principal executive officer” and “principal financial officer”
shall have the meanings given to such terms in the Exchange Act Rules 13a-15 and 15d-15.


 


dd. Finder’s
Fees. Neither the Company nor any Subsidiary has incurred any liability for any finder’s fees, brokerage commissions
or similar payments in connection with the transactions herein contemplated, except as may otherwise exist with respect to HCW
pursuant to this Agreement.


 






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ee. Labor Disputes.
No labor disturbance by or dispute with employees of the Company or any Subsidiary exists or, to the knowledge of the Company,
is threatened which would result in a Material Adverse Effect.


 


ff. Investment Company
Act. Neither the Company nor any Subsidiary is or, after giving effect to the offering and sale of the Placement Shares, will
be required to register as an “investment company” or an entity “controlled” by an “investment company,”
as such terms are defined in the Investment Company Act of 1940, as amended (the “Investment Company Act”).


 


gg. Operations.
The operations of the Company and the Subsidiaries are and have been conducted at all times in compliance with applicable financial
record keeping and reporting requirements of the Currency and Foreign Transactions Reporting Act of 1970, as amended, the money
laundering statutes of all jurisdictions to which the Company or the Subsidiaries are subject, the rules and regulations thereunder
and any related or similar rules, regulations or guidelines, issued, administered or enforced by any governmental agency having
jurisdiction over the Company (collectively, the “Money Laundering Laws”), except where the failure to be in
such compliance would not result in a Material Adverse Effect; and no action, suit or proceeding by or before any court or governmental
agency, authority or body or any arbitrator involving the Company or any Subsidiary with respect to the Money Laundering Laws is
pending or, to the knowledge of the Company, threatened.


 


hh. Off-Balance Sheet
Arrangements. There are no transactions, arrangements and other relationships between and/or among the Company, and/or, to
the knowledge of the Company, any of its affiliates and any unconsolidated entity, including, but not limited to, any structured
finance, special purpose or limited purpose entity (each, an “Off Balance Sheet Transaction”) that would affect
materially the Company’s liquidity or the availability of or requirements for its capital resources, including those Off
Balance Sheet Transactions described in the Commission’s Statement about Management’s Discussion and Analysis of Financial
Conditions and Results of Operations (Release Nos. 33-8056; 34-45321; FR-61), required to be described in the Registration Statement
or the Prospectus which have not been described as required.


 


ii. Underwriter Agreements.
The Company is not a party to any agreement with an agent or underwriter for any other “at the market” or continuous
equity transaction.


 


jj. ERISA. To
the knowledge of the Company, (i) each material employee benefit plan, within the meaning of Section 3(3) of the Employee Retirement
Income Security Act of 1974, as amended (“ERISA”) that is maintained, administered or contributed to by the
Company or any of its affiliates for employees or former employees of the Company and the Subsidiaries has been maintained in material
compliance with its terms and the requirements of any applicable statutes, orders, rules and regulations, including but not limited
to ERISA and the Internal Revenue Code of 1986, as amended (the “Code”); (ii) no prohibited transaction, within
the meaning of Section 406 of ERISA or Section 4975 of the Code, has occurred which would result in a material liability to the
Company with respect to any such plan excluding transactions effected pursuant to a statutory or administrative exemption; and
(iii) for each such plan that is subject to the funding rules of Section 412 of the Code or Section 302 of ERISA, no “accumulated
funding deficiency” as defined in Section 412 of the Code has been incurred, whether or not waived, and the fair market value
of the assets of each such plan (excluding for these purposes accrued but unpaid contributions) equals or exceeds the present value
of all benefits accrued under such plan determined using reasonable actuarial assumptions, other than, in the case of (i), (ii)
and (iii) above, as would not have a Material Adverse Effect.


 






    	 	14	 



     


    

 


kk. Forward-Looking
Statements. No forward-looking statement (within the meaning of Section 27A of the Securities Act and Section 21E of the Exchange
Act) (a “Forward-Looking Statement”) contained in the Registration Statement and the Prospectus has been made
or reaffirmed without a reasonable basis or has been disclosed other than in good faith.


 


ll. Margin Rules.
Neither the issuance, sale and delivery of the Placement Shares nor the application of the proceeds thereof by the Company as described
in the Registration Statement and the Prospectus will violate Regulation T, U or X of the Board of Governors of the Federal Reserve
System.


 


mm. Insurance.
The Company and the Subsidiaries carry, or are covered by, insurance in such amounts and covering such risks as the Company and
the Subsidiaries reasonably believe are adequate for the conduct of their business.


 


nn. No Improper Practices.
(i) Neither the Company nor, to the Company’s knowledge, the Subsidiaries, nor to the Company’s knowledge, any of their
respective executive officers has, in the past five years, made any unlawful contributions to any candidate for any political office
(or failed fully to disclose any contribution in violation of law) or made any contribution or other payment to any official of,
or candidate for, any federal, state, municipal, or foreign office or other person charged with similar public or quasi-public
duty in violation of any law or of the character required to be disclosed in the Prospectus; (ii) no relationship, direct or indirect,
exists between or among the Company or, to the Company’s knowledge, the Subsidiaries or any affiliate of any of them, on
the one hand, and the directors, officers and stockholders of the Company or, to the Company’s knowledge, the Subsidiaries,
on the other hand, that is required by the Securities Act to be described in the Registration Statement and the Prospectus that
is not so described; (iii) no relationship, direct or indirect, exists between or among the Company or the Subsidiaries or any
affiliate of them, on the one hand, and the directors, officers, stockholders or directors of the Company or, to the Company’s
knowledge, the Subsidiaries, on the other hand, that is required by the rules of FINRA to be described in the Registration Statement
and the Prospectus that is not so described; (iv) there are no material outstanding loans or advances or material guarantees of
indebtedness by the Company or, to the Company’s knowledge, the Subsidiaries to or for the benefit of any of their respective
officers or directors or any of the members of the families of any of them; and (v) the Company has not offered, or caused any
placement agent to offer, Common Stock to any person with the intent to influence unlawfully (A) a customer or supplier of the
Company or the Subsidiaries to alter the customer’s or supplier’s level or type of business with the Company or the
Subsidiaries or (B) a trade journalist or publication to write or publish favorable information about the Company or the Subsidiaries
or any of their respective products or services, and, (vi) neither the Company nor the Subsidiaries nor, to the Company’s
knowledge, any employee or agent of the Company or the Subsidiaries has made any payment of funds of the Company or the Subsidiaries
or received or retained any funds in violation of any law, rule or regulation (including, without limitation, the Foreign Corrupt
Practices Act of 1977), which payment, receipt or retention of funds is of a character required to be disclosed in the Registration
Statement or the Prospectus.


 






    	 	15	 



     


    

 


oo. Status Under the
Securities Act. The Company was not and is not an ineligible issuer as defined in Rule 405 under the Securities Act at the
times specified in Rules 164 and 433 under the Securities Act in connection with the offering of the Placement Shares.


 


pp. No Misstatement
or Omission in an Issuer Free Writing Prospectus. Each Issuer Free Writing Prospectus, as of its issue date and as of each
Applicable Time (as defined in Section 25 below), did not, does not and will not, through the completion of the Placement
or Placements for which such Issuer Free Writing Prospectus is issued, include any information that conflicted, conflicts or will
conflict with the information contained in the Registration Statement or the Prospectus, including any incorporated document deemed
to be a part thereof that has not been superseded or modified. The foregoing sentence does not apply to statements in or omissions
from any Issuer Free Writing Prospectus based upon and in conformity with written information furnished to the Company by HCW specifically
for use therein.


 


qq. No Conflicts.
Neither the execution of this Agreement, nor the issuance, offering or sale of the Placement Shares, nor the consummation of any
of the transactions contemplated herein and therein, nor the compliance by the Company with the terms and provisions hereof and
thereof will conflict with, or will result in a breach of, any of the terms and provisions of, or has constituted or will constitute
a default under, or has resulted in or will result in the creation or imposition of any lien, charge or encumbrance upon any property
or assets of the Company pursuant to the terms of any contract or other agreement to which the Company may be bound or to which
any of the property or assets of the Company is subject, except (i) such conflicts, breaches or defaults as may have been waived
and (ii) such conflicts, breaches and defaults that would not have a Material Adverse Effect; nor will such action result (x) in
any violation of the provisions of the organizational or governing documents of the Company, or (y) in any material violation of
the provisions of any statute or any order, rule or regulation applicable to the Company or of any court or of any federal, state
or other regulatory authority or other government body having jurisdiction over the Company, except where such violation would
not have a Material Adverse Effect.


 


rr. OFAC.


 


(i) Neither the Company
nor any Subsidiary (collectively, the “Entity”) nor, to the Company’s knowledge, any director, officer,
employee, agent, affiliate or representative of the Entity, is a government, individual, or entity (in this paragraph (rr), “Person”)
that is, or is owned or controlled by a Person that is:


 


(a) the subject
of any sanctions administered or enforced by the U.S. Department of Treasury’s Office of Foreign Assets Control (“OFAC”),
the United Nations Security Council (“UNSC”), the European Union (“EU”), Her Majesty’s
Treasury (“HMT”), or other relevant sanctions authority (collectively, “Sanctions”), nor


 






    	 	16	 



     


    

 


(b) located,
organized or resident in a country or territory that is the subject of Sanctions.


 


(ii) The Entity will
not, directly or indirectly, knowingly use the proceeds of the offering, or lend, contribute or otherwise make available such proceeds
to any subsidiary, joint venture partner or other Person:


 


(a) to fund
or facilitate any activities or business of or with any Person or in any country or territory that, at the time of such funding
or facilitation, is the subject of Sanctions; or


 


(b) in any
other manner that will result in a violation of Sanctions by any Person (including any Person participating in the offering, whether
as underwriter, advisor, investor or otherwise).


 


(iii) The Entity represents
and covenants that, except as detailed in the Registration Statement and the Prospectus, for the past 5 years, it has not knowingly
engaged in and is not now knowingly engaged in any dealing or transactions with any Person, or in any country or territory, that
at the time of the dealing or transaction is or was the subject of Sanctions.


 


ss. Stock Transfer
Taxes. On each Settlement Date, all material stock transfer or other taxes (other than income taxes) which are required to
be paid in connection with the sale and transfer of the Placement Shares to be sold hereunder will be, or will have been, fully
paid or provided for by the Company and all laws imposing such taxes will be or will have been fully complied with by the Company
in all material respects.


 


Any certificate signed
by an officer of the Company and delivered to HCW or to counsel for HCW pursuant to or in connection with this Agreement shall
be deemed to be a representation and warranty by the Company, as applicable, to HCW as to the matters set forth therein.


 






    	 	17	 



     


    

 


7. Covenants of
the Company. The Company covenants and agrees with HCW that:


 


a. Registration Statement
Amendments. After the date of this Agreement and during any period in which a prospectus relating to any Placement Shares is
required to be delivered by HCW under the Securities Act (including in circumstances where such requirement may be satisfied pursuant
to Rule 172 under the Securities Act) (the “Prospectus Delivery Period”) (i) the Company will notify HCW promptly
of the time when any subsequent amendment to the Registration Statement, other than documents incorporated by reference or amendments
not related to any Placement, has been filed with the Commission and/or has become effective or any subsequent supplement to the
Prospectus has been filed and of any request by the Commission for any amendment or supplement to the Registration Statement or
Prospectus related to the Placement or for additional information related to the Placement, (ii) the Company will prepare and file
with the Commission, promptly upon HCW’s request, any amendments or supplements to the Registration Statement or Prospectus
that, upon the advice of the Company’s legal counsel, may be necessary or advisable in connection with the distribution of
the Placement Shares by HCW (provided, however, that the failure of HCW to make such request shall not relieve the Company
of any obligation or liability hereunder, or affect HCW’s right to rely on the representations and warranties made by the
Company in this Agreement and provided, further, that the only remedy HCW shall have with respect to the failure to make such filing
shall be to cease making sales under this Agreement until such amendment or supplement is filed); (iii) the Company will not file
any amendment or supplement to the Registration Statement or Prospectus relating to the Placement Shares or a security convertible
into the Placement Shares (other than an Incorporated Document) unless a copy thereof has been submitted to HCW within a reasonable
period of time before the filing and HCW has not reasonably objected thereto (provided, however, that (A) the failure of
HCW to make such objection shall not relieve the Company of any obligation or liability hereunder, or affect HCW’s right
to rely on the representations and warranties made by the Company in this Agreement and (B) the Company has no obligation to provide
HCW any advance copy of such filing or to provide HCW an opportunity to object to such filing if the filing does not name HCW or
does not relate to the transaction herein provided; and provided, further, that the only remedy HCW shall have with respect to
the failure by the Company to obtain such consent shall be to cease making sales under this Agreement) and the Company will furnish
to HCW at the time of filing thereof a copy of any document that upon filing is deemed to be incorporated by reference into the
Registration Statement or Prospectus, except for those documents available via EDGAR; and (iv) the Company will cause each amendment
or supplement to the Prospectus to be filed with the Commission as required pursuant to the applicable paragraph of Rule 424(b)
of the Securities Act or, in the case of any document to be incorporated therein by reference, to be filed with the Commission
as required pursuant to the Exchange Act, within the time period prescribed (the determination to file or not file any amendment
or supplement with the Commission under this Section 7(a), based on the Company’s reasonable opinion or reasonable
objections, shall be made exclusively by the Company).


 


b. Notice of Commission
Stop Orders. The Company will advise HCW, promptly after it receives notice or obtains knowledge thereof, of the issuance or
threatened issuance by the Commission of any stop order suspending the effectiveness of the Registration Statement, of the suspension
of the qualification of the Placement Shares for offering or sale in any jurisdiction, or of the initiation or threatening of any
proceeding for any such purpose; and it will use its commercially reasonable efforts to prevent the issuance of any stop order
or to obtain its withdrawal if such a stop order should be issued. The Company will advise HCW promptly after it receives any request
by the Commission for any amendments to the Registration Statement or any amendment or supplements to the Prospectus or any Issuer
Free Writing Prospectus or for additional information related to the offering of the Placement Shares or for additional information
related to the Registration Statement, the Prospectus or any Issuer Free Writing Prospectus.


 






    	 	18	 



     


    

 


c. Delivery of Prospectus;
Subsequent Changes. During the Prospectus Delivery Period, the Company will comply with all requirements imposed upon it by
the Securities Act, as from time to time in force, and to file on or before their respective due dates all reports and any definitive
proxy or information statements required to be filed by the Company with the Commission pursuant to Sections 13(a), 13(c), 14,
15(d) or any other provision of or under the Exchange Act. If the Company has omitted any information from the Registration Statement
pursuant to Rule 430A under the Securities Act, it will use its commercially reasonable efforts to comply with the provisions of
and make all requisite filings with the Commission pursuant to said Rule 430A and to notify HCW promptly of all such filings. If
during the Prospectus Delivery Period any event occurs as a result of which the Prospectus as then amended or supplemented would
include an untrue statement of a material fact or omit to state a material fact necessary to make the statements therein, in the
light of the circumstances then existing, not misleading, or if during such Prospectus Delivery Period it is necessary to amend
or supplement the Registration Statement or Prospectus to comply with the Securities Act, the Company will promptly notify HCW
to suspend the offering of Placement Shares during such period and the Company will promptly amend or supplement the Registration
Statement or Prospectus (at the expense of the Company) so as to correct such statement or omission or effect such compliance;
provided, however, that the Company may delay the filing of any amendment or supplement, if in the judgment of the Company,
it is in the best interest of the Company.


 


d. Listing of Placement
Shares. During the Prospectus Delivery Period, the Company will use its commercially reasonable efforts to cause the Placement
Shares to be listed on the Exchange and to qualify the Placement Shares for sale under the securities laws of such jurisdictions
in the United States as HCW reasonably designates and to continue such qualifications in effect so long as required for the distribution
of the Placement Shares; provided, however, that the Company shall not be required in connection therewith to qualify as
a foreign corporation or dealer in securities, file a general consent to service of process, or subject itself to taxation in any
jurisdiction if it is not otherwise so subject.


 


e. Delivery of Registration
Statement and Prospectus. The Company will furnish to HCW and its counsel (at the reasonable expense of the Company) copies
of the Registration Statement, the Prospectus (including all documents incorporated by reference therein) and all amendments and
supplements to the Registration Statement or Prospectus that are filed with the Commission during the Prospectus Delivery Period
(including all documents filed with the Commission during such period that are deemed to be incorporated by reference therein),
in each case as soon as reasonably practicable and in such quantities as HCW may from time to time reasonably request and, at HCW’s
request, will also furnish copies of the Prospectus to each exchange or market on which sales of the Placement Shares may be made;
provided, however, that the Company shall not be required to furnish any document (other than the Prospectus) to HCW to
the extent such document is available on EDGAR.


 


f. Earnings Statement.
The Company will make generally available to its security holders as soon as practicable, but in any event not later than 15 months
after the end of the Company’s current fiscal quarter, an earnings statement covering a 12-month period that satisfies the
provisions of Section 11(a) and Rule 158 of the Securities Act.


 


g. Use of Proceeds.
The Company will use the Net Proceeds as described in the Prospectus in the section entitled “Use of Proceeds.”


 






    	 	19	 



     


    

 


h. Notice of Other
Sales. Without the prior written consent of HCW, the Company will not, directly or indirectly, offer to sell, sell, contract
to sell, grant any option to sell or otherwise dispose of any Common Stock (other than the Placement Shares offered pursuant to
this Agreement) or securities convertible into or exchangeable for Common Stock, warrants or any rights to purchase or acquire,
Common Stock during the period beginning on the date on which any Placement Notice is delivered to HCW hereunder and ending on
the third (3rd) Trading Day immediately following the final Settlement Date with respect to Placement Shares sold pursuant to such
Placement Notice (or, if the Placement Notice has been terminated or suspended prior to the sale of all Placement Shares covered
by a Placement Notice, the date of such suspension or termination); and will not directly or indirectly in any other “at
the market” or continuous equity transaction offer to sell, sell, contract to sell, grant any option to sell or otherwise
dispose of any Common Stock (other than the Placement Shares offered pursuant to this Agreement) or securities convertible into
or exchangeable for Common Stock, warrants or any rights to purchase or acquire, Common Stock prior to the termination of this
Agreement; provided, however, that such restrictions will not apply in connection with the Company’s issuance or sale
of (i) Common Stock, options to purchase Common Stock or Common Stock issuable upon the exercise of options, pursuant to any stock
option, or benefits plan, stock ownership plan or dividend reinvestment plan (but not Common Stock subject to a waiver to exceed
plan limits in its dividend reinvestment plan) of the Company whether now in effect or hereafter implemented; (ii) Common Stock
issuable upon conversion of securities or the exercise of warrants, options or other rights in effect or outstanding, and disclosed
in filings by the Company available on EDGAR or otherwise in writing to HCW, (iii) Common Stock, or securities convertible into
or exercisable for Common Stock, offered and sold in a privately negotiated transaction to vendors, customers, strategic partners
or potential strategic partners or other investors conducted in a manner so as not to be integrated with the offering of Common
Stock hereby and (iv) Common Stock in connection with any acquisition, strategic investment or other similar transaction (including
any joint venture, strategic alliance or partnership).


 


i. Change of Circumstances.
The Company will, at any time during the pendency of a Placement Notice advise HCW promptly after it shall have received notice
or obtained knowledge thereof, of any information or fact that would alter or affect in any material respect any opinion, certificate,
letter or other document required to be provided to HCW pursuant to this Agreement.


 


j. Due Diligence Cooperation.
During the term of this Agreement, the Company will cooperate with any reasonable due diligence review conducted by HCW or its
representatives in connection with the transactions contemplated hereby, including, without limitation, providing information and
making available documents and senior corporate officers, during regular business hours and at the Company’s principal offices,
as HCW may reasonably request.


 


k. Required Filings
Relating to Placement of Placement Shares. The Company agrees that on such dates as the Securities Act shall require, the Company
will (i) file a prospectus supplement with the Commission under the applicable paragraph of Rule 424(b) under the Securities Act
(each and every date a filing under Rule 424(b) is made, a “Filing Date”), which prospectus supplement will
set forth, within the relevant period, the amount of Placement Shares sold through HCW, the Net Proceeds to the Company and the
compensation payable by the Company to HCW with respect to such Placement Shares, and (ii) deliver such number of copies of each
such prospectus supplement to each exchange or market on which such sales were effected as may be required by the rules or regulations
of such exchange or market.


 






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l. Representation
Dates; Certificate. Each time during the term of this Agreement that the Company:


 


(i) amends or supplements
(other than a prospectus supplement relating solely to an offering of securities other than the Placement Shares) the Registration
Statement or the Prospectus relating to the Placement Shares by means of a post-effective amendment, sticker, or supplement but
not by means of incorporation of documents by reference into the Registration Statement or the Prospectus relating to the Placement
Shares;


 


(ii) files an annual
report on Form 10-K under the Exchange Act (including any Form 10-K/A containing amended audited financial information or a material
amendment to the previously filed Form 10-K);


 


(iii) files its quarterly
reports on Form 10-Q under the Exchange Act; or


 


(iv) files a current
report on Form 8-K containing amended financial information (other than information “furnished” pursuant to Items 2.02
or 7.01 of Form 8-K or to provide disclosure pursuant to Item 8.01 of Form 8-K relating to the reclassification of certain properties
as discontinued operations in accordance with Statement of Financial Accounting Standards No. 144) under the Exchange Act;


 


(Each date of filing of one or more of
the documents referred to in clauses (i) through (iv) shall be a “Representation Date.”)


 


the Company shall furnish HCW (but in the
case of clause (iv) above only if HCW reasonably determines that the information contained in such Form 8-K is material) with a
certificate, in the form attached hereto as Exhibit 7(1). The requirement to provide a certificate under this Section
7(1) shall be waived for any Representation Date occurring at a time at which no Placement Notice is pending, which waiver
shall continue until the earlier to occur of the date the Company delivers a Placement Notice hereunder (which for such calendar
quarter shall be considered a Representation Date) and the next occurring Representation Date on which the Company files its annual
report on Form 10-K. Notwithstanding the foregoing, (i) upon the delivery of the first Placement Notice hereunder and (ii) if the
Company subsequently decides to sell Placement Shares following a Representation Date when the Company relied on such waiver and
did not provide HCW with a certificate under this Section 7(l), then before HCW sells any Placement Shares, the Company
shall provide HCW with a certificate, in the form attached hereto as Exhibit 7(l), dated the date of the Placement Notice.


 






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m. Legal Opinion.
On or prior to the date of the first Placement Notice given hereunder the Company shall cause to be furnished to HCW a written
opinion and a negative assurance letter of Troutman Sanders LLP (“Company Counsel”), or other counsel reasonably
satisfactory to HCW, each in form and substance reasonably satisfactory to HCW. Thereafter, within five (5) Trading Days of each
Representation Date with respect to which the Company is obligated to deliver a certificate in the form attached hereto as Exhibit
7(l) for which no waiver is applicable, and not more than once per calendar quarter, the Company shall cause to be furnished
to HCW a negative assurance letter of Company Counsel in form and substance reasonably satisfactory to HCW; provided that, in lieu
of such negative assurance for subsequent periodic filings under the Exchange Act, counsel may furnish HCW with a letter (a “Reliance
Letter”) to the effect that HCW may rely on the negative assurance letter previously delivered under this Section 7(m)
to the same extent as if it were dated the date of such letter (except that statements in such prior letter shall be deemed to
relate to the Registration Statement and the Prospectus as amended or supplemented as of the date of the Reliance Letter).


 


n. Comfort Letter.
On or prior to the date of the first Placement Notice given hereunder and within five (5) Trading Days after each subsequent Representation
Date, other than pursuant to Section 7(l)(iii), the Company shall cause its independent accountants to furnish HCW letters
(the “Comfort Letters”), dated the date the Comfort Letter is delivered, which shall meet the requirements set
forth in this Section 7(n). The Comfort Letter from the Company’s independent accountants shall be in a form and substance
reasonably satisfactory to HCW, (i) confirming that they are an independent public accounting firm within the meaning of the Securities
Act and the PCAOB, (ii) stating, as of such date, the conclusions and findings of such firm with respect to the financial information
and other matters ordinarily covered by accountants’ “comfort letters” to underwriters in connection with registered
public offerings (the first such letter, the “Initial Comfort Letter”) and (iii) updating the Initial Comfort
Letter with any information that would have been included in the Initial Comfort Letter had it been given on such date and modified
as necessary to relate to the Registration Statement and the Prospectus, as amended and supplemented to the date of such letter.


 


o. Due Diligence Session.
Upon commencement of the offering of the Placement Shares under this Agreement (and upon the recommencement of the offering of
the Placement Shares under this Agreement following the termination of a suspension of sales hereunder lasting more than 30 Trading
Days), and at each Representation Date, the Company will conduct a due diligence session, in form and substance, reasonably satisfactory
to HCW, which shall include representatives of management and the Accountant. The Company shall cooperate timely with any reasonable
due diligence request from or review conducted by HCW or its agents from time to time in connection with the transactions contemplated
by this Agreement, including, without limitation, providing information and available documents and access to appropriate corporate
officers and the Company’s agents during regular business hours, and timely furnishing or causing to be furnished such certificates,
letters and opinions from the Company, its officers and its agents, as HCW may reasonably request. The Company shall reimburse
HCW for HCW’s counsel’s time in each such due diligence update session, up to a maximum of $2,500 per update, plus
any incidental expense incurred by HCW in connection therewith.


 


p. Market Activities.
The Company will not, directly or indirectly, (i) take any action designed to cause or result in, or that constitutes or would
constitute, the stabilization or manipulation of the price of any security of the Company to facilitate the sale or resale of Common
Stock or (ii) sell, bid for, or purchase Common Stock in violation of Regulation M, or pay anyone any compensation for soliciting
purchases of the Placement Shares other than HCW.


 






    	 	22	 



     


    

 


q. Investment Company
Act. The Company will conduct its affairs in such a manner so as to reasonably ensure that neither it nor the Subsidiaries
will be or become, at any time prior to the termination of this Agreement, an “investment company,” as such term is
defined in the Investment Company Act.


 


r. No Offer to Sell.
Other than an Issuer Free Writing Prospectus approved in advance by the Company and HCW in its capacity as agent hereunder pursuant
to Section 23, neither of HCW nor the Company (including its agents and representatives, other than HCW in its capacity
as such) will make, use, prepare, authorize, approve or refer to any written communication (as defined in Rule 405), required to
be filed with the Commission, that constitutes an offer to sell or solicitation of an offer to buy Placement Shares hereunder.


 


s. Sarbanes-Oxley
Act. The Company will maintain and keep accurate books and records reflecting its assets and maintain internal accounting controls
in a manner designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial
statements for external purposes in accordance with GAAP and including those policies and procedures that (i) pertain to the maintenance
of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of the assets of the Company,
(ii) provide reasonable assurance that transactions are recorded as necessary to permit the preparation of the Company’s
consolidated financial statements in accordance with GAAP, (iii) that receipts and expenditures of the Company are being made only
in accordance with management’s and the Company’s directors’ authorization, and (iv) provide reasonable assurance
regarding prevention or timely detection of unauthorized acquisition, use or disposition of the Company’s assets that could
have a material effect on its financial statements. The Company will maintain disclosure controls and procedures that comply with
the requirements of the Exchange Act.


 


t. Termination of
the Existing At Market Issuance Sales Agreement. Reference is made to the At Market Issuance Sales Agreement, dated as of September
19, 2019, between the Company and HCW (the “Existing ATM Agreement”). The Company and HCW hereby agree that
the Existing ATM Agreement shall be terminated by mutual agreement of the parties pursuant to Section 13(d) of the Existing ATM
Agreement upon the execution of this Agreement.


 


8. Representations
and Covenants of HCW. HCW represents and warrants that it is duly registered as a broker-dealer under FINRA, the Exchange Act
and the applicable statutes and regulations of each state in which the Placement Shares will be offered and sold, except such states
in which HCW is exempt from registration or such registration is not otherwise required. HCW shall continue, for the term of this
Agreement, to be duly registered as a broker-dealer under FINRA, the Exchange Act and the applicable statutes and regulations of
each state in which the Placement Shares will be offered and sold, except such states in which it is exempt from registration or
such registration is not otherwise required, during the term of this Agreement. HCW shall comply with all applicable law and regulations
in connection with the transactions contemplated by this Agreement, including the issuance and sale through HCW of the Placement
Shares.


 






    	 	23	 



     


    

 


9. Payment of Expenses.
The Company will pay all expenses incident to the performance of its obligations under this Agreement, including (i) the preparation,
filing, including any fees required by the Commission, and printing of the Registration Statement (including financial statements
and exhibits) as originally filed and of each amendment and supplement thereto and each Free Writing Prospectus, in such number
as HCW shall deem reasonably necessary, (ii) the printing and delivery to HCW of this Agreement and such other documents as may
be required in connection with the offering, purchase, sale, issuance or delivery of the Placement Shares, (iii) the preparation,
issuance and delivery of the certificates, if any, for the Placement Shares to HCW, including any stock or other transfer taxes
and any capital duties, stamp duties or other duties or taxes payable upon the sale, issuance or delivery of the Placement Shares
to HCW, (iv) the fees and disbursements of the counsel, accountants and other advisors to the Company, (v) the reasonable and documented
out-of-pocket fees and disbursements of counsel to HCW up to $50,000; (vi) the fees and expenses of the transfer agent and registrar
for the Common Stock, (vii) the filing fees incident to any review by FINRA of the terms of the sale of the Placement Shares, and
(viii) the fees and expenses incurred in connection with the listing of the Placement Shares on the Exchange.


 


10. Conditions to
HCW’s Obligations. The obligations of HCW hereunder with respect to a Placement will be subject to the continuing accuracy
and completeness of the representations and warranties made by the Company herein (other than those representations and warranties
made as of a specified date or time), to the due performance in all material respects by the Company of its obligations hereunder,
to the completion by HCW of a due diligence review satisfactory to it in its reasonable judgment, and to the continuing reasonable
satisfaction (or waiver by HCW in its sole discretion) of the following additional conditions:


 


a. Registration Statement
Effective. The Registration Statement shall remain effective and shall be available for the sale of all Placement Shares contemplated
to be issued by any Placement Notice.


 


b. No Material Notices.
None of the following events shall have occurred and be continuing: (i) receipt by the Company of any request for additional information
from the Commission or any other federal or state governmental authority during the period of effectiveness of the Registration
Statement, the response to which would require any post-effective amendments or supplements to the Registration Statement or the
Prospectus; (ii) the issuance by the Commission or any other federal or state governmental authority of any stop order suspending
the effectiveness of the Registration Statement or receipt by the Company of notification of the initiation of any proceedings
for that purpose; (iii) receipt by the Company of any notification with respect to the suspension of the qualification or exemption
from qualification of any of the Placement Shares for sale in any jurisdiction or receipt by the Company of notification of the
initiation of, or a threat to initiate, any proceeding for such purpose; or (iv) the occurrence of any event that makes any material
statement made in the Registration Statement or the Prospectus or any material Incorporated Document untrue in any material respect
or that requires the making of any changes in the Registration Statement, the Prospectus or any material Incorporated Document
so that, in the case of the Registration Statement, it will not contain any materially untrue statement of a material fact or omit
to state any material fact required to be stated therein or necessary to make the statements therein not misleading and, that in
the case of the Prospectus or any material Incorporated Document, it will not contain any materially untrue statement of a material
fact or omit to state any material fact required to be stated therein or necessary to make the statements therein, in the light
of the circumstances under which they were made, not misleading.


 






    	 	24	 



     


    

 


c. No Misstatement
or Material Omission. HCW shall not have advised the Company that the Registration Statement or Prospectus, or any amendment
or supplement thereto, contains an untrue statement of fact that in HCW’s reasonable opinion is material, or omits to state
a fact that in HCW’s reasonable opinion is material and is required to be stated therein or is necessary to make the statements
therein not misleading.


 


d. Material Changes.
Except as contemplated in the Prospectus, or disclosed in the Company’s reports filed with the Commission, there shall not
have been any Material Adverse Effect, or any development that would cause a Material Adverse Effect, or a downgrading in or withdrawal
of the rating assigned to any of the Company’s securities (other than asset backed securities) by any “nationally recognized
statistical rating organization,” as such term is defined by the Commission for purposes of Rule 436(g)(2) under the Securities
Act (a “Rating Organization”), or a public announcement by any Rating Organization that it has under surveillance
or review its rating of any of the Company’s securities (other than asset backed securities), the effect of which, in the
case of any such action by a Rating Organization described above, in the reasonable judgment of HCW (without relieving the Company
of any obligation or liability it may otherwise have), is so material as to make it impracticable or inadvisable to proceed with
the offering of the Placement Shares on the terms and in the manner contemplated in the Prospectus.


 


e. Legal Opinion.
HCW shall have received the opinion and negative assurance letter of Company Counsel required to be delivered pursuant to Section
7(m) on or before the date on which such delivery of such opinion and negative assurance letter are required pursuant to Section
7(m).


 


f. Comfort Letter.
HCW shall have received the Comfort Letter required to be delivered pursuant Section 7(n) on or before the date on which
such delivery of such letter is required pursuant to Section 7(n).


 


g. Representation
Certificate. HCW shall have received the certificate required to be delivered pursuant to Section 7(l) on or before
the date on which delivery of such certificate is required pursuant to Section 7(l).


 


h. Secretary’s
Certificate. On or prior to the first Representation Date, HCW shall have received a certificate, signed on behalf of the Company
by its corporate Secretary, in form and substance satisfactory to HCW and its counsel.


 






    	 	25	 



     


    

 


i. No Suspension.
Trading in the Common Stock shall not have been suspended on the Exchange and the Common Stock shall not have been delisted from
the Exchange.


 


j. Other Materials.
On each date on which the Company is required to deliver a certificate pursuant to Section 7(l), the Company shall have
furnished to HCW such appropriate further information, certificates and documents as HCW may reasonably request and which are usually
and customarily furnished by an issuer of securities in connection with a securities offering of the type contemplated hereby.
All such opinions, certificates, letters and other documents will be in compliance with the provisions hereof.


 


k. Securities Act
Filings Made. All filings with the Commission required by Rule 424 under the Securities Act to have been filed prior to the
issuance of any Placement Notice hereunder shall have been made within the applicable time period prescribed for such filing by
Rule 424.


 


l. Approval for Listing.
The Placement Shares shall either have been approved for listing on the Exchange, subject only to notice of issuance, or the Company
shall have filed an application for listing of the Placement Shares on the Exchange at, or prior to, the issuance of any Placement
Notice.


 


m. No Termination
Event. There shall not have occurred any event that would permit HCW to terminate this Agreement pursuant to Section 13(a).


 


11. Indemnification
and Contribution.


 


(a) Company Indemnification.
The Company agrees to indemnify and hold harmless HCW, its partners, members, directors, officers, employees and agents and each
person, if any, who controls HCW within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act as follows:


 


(i) against any and
all loss, liability, claim, damage and expense whatsoever, as incurred, joint or several, arising out of or based upon any untrue
statement or alleged untrue statement of a material fact contained in the Registration Statement (or any amendment thereto), or
the omission or alleged omission therefrom of a material fact required to be stated therein or necessary to make the statements
therein not misleading, or arising out of any untrue statement or alleged untrue statement of a material fact included in any related
Issuer Free Writing Prospectus or the Prospectus (or any amendment or supplement thereto), or the omission or alleged omission
therefrom of a material fact necessary in order to make the statements therein, in the light of the circumstances under which they
were made, not misleading;


 


(ii) against any and
all loss, liability, claim, damage and expense whatsoever, as incurred, joint or several, to the extent of the aggregate amount
paid in settlement of any litigation, or any investigation or proceeding by any governmental agency or body, commenced or threatened,
or of any claim whatsoever based upon any such untrue statement or omission, or any such alleged untrue statement or omission;
provided that (subject to Section 11(d) below) any such settlement is effected with the written consent of the Company,
which consent shall not unreasonably be delayed or withheld; and


 






    	 	26	 



     


    

 


(iii) against any and
all expense whatsoever, as incurred (including the reasonable and documented out-of-pocket fees and disbursements of counsel),
reasonably incurred in investigating, preparing or defending against any litigation, or any investigation or proceeding by any
governmental agency or body, commenced or threatened, or any claim whatsoever based upon any such untrue statement or omission,
or any such alleged untrue statement or omission, to the extent that any such expense is not paid under (i) or (ii) above, provided,
however, that this indemnity agreement shall not apply to any loss, liability, claim, damage or expense to the extent arising
out of any untrue statement or omission or alleged untrue statement or omission made solely in reliance upon and in conformity
with written information furnished to the Company by HCW expressly for use in the Registration Statement (or any amendment thereto),
or in any related Issuer Free Writing Prospectus or the Prospectus (or any amendment or supplement thereto).


 


(b) Indemnification
by HCW. HCW agrees to indemnify and hold harmless the Company and its directors and officers, and each person, if any, who
(i) controls the Company within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act or (ii) is controlled
by or is under common control with the Company against any and all loss, liability, claim, damage and expense described in the
indemnity contained in Section 11(a), as incurred, but only with respect to untrue statements or omissions, or alleged untrue
statements or omissions, made in the Registration Statement (or any amendments thereto) or in any related Issuer Free Writing Prospectus
or the Prospectus (or any amendment or supplement thereto) in reliance upon and in conformity with information relating to HCW
and furnished to the Company in writing by HCW expressly for use therein.


 






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(c) Procedure.
Any party that proposes to assert the right to be indemnified under this Section 11 will, promptly after receipt of notice
of commencement of any action against such party in respect of which a claim is to be made against an indemnifying party or parties
under this Section 11, notify each such indemnifying party of the commencement of such action, enclosing a copy of all papers
served, but the omission so to notify such indemnifying party will not relieve the indemnifying party from (i) any liability that
it might have to any indemnified party otherwise than under this Section 11 and (ii) any liability that it may have to any
indemnified party under the foregoing provisions of this Section 11 unless, and only to the extent that, such omission results
in the forfeiture of substantive rights or defenses by the indemnifying party. If any such action is brought against any indemnified
party and it notifies the indemnifying party of its commencement, the indemnifying party will be entitled to participate in and,
to the extent that it elects by delivering written notice to the indemnified party promptly after receiving notice of the commencement
of the action from the indemnified party, jointly with any other indemnifying party similarly notified, to assume the defense of
the action, with counsel reasonably satisfactory to the indemnified party, and after notice from the indemnifying party to the
indemnified party of its election to assume the defense, the indemnifying party will not be liable to the indemnified party for
any legal or other expenses except as provided below and except for the reasonable costs of investigation subsequently incurred
by the indemnified party in connection with the defense. The indemnified party will have the right to employ its own counsel in
any such action, but the fees, expenses and other charges of such counsel will be at the expense of such indemnified party unless
(1) the employment of counsel by the indemnified party has been authorized in writing by the indemnifying party, (2) the indemnified
party has reasonably concluded (based on advice of counsel) that there may be legal defenses available to it or other indemnified
parties that are different from or in addition to those available to the indemnifying party, (3) a conflict or potential conflict
of interest exists (based on advice of counsel to the indemnified party) between the indemnified party and the indemnifying party
(in which case the indemnifying party will not have the right to direct the defense of such action on behalf of the indemnified
party) or (4) the indemnifying party has not in fact employed counsel to assume the defense of such action within a reasonable
time after receiving notice of the commencement of the action, in each of which cases the reasonable and documented out-of-pocket
fees, disbursements and other charges of counsel will be at the expense of the indemnifying party or parties. It is understood
that the indemnifying party or parties shall not, in connection with any proceeding or related proceedings in the same jurisdiction,
be liable for the reasonable and documented out-of-pocket fees, disbursements and other charges of more than one separate firm
admitted to practice in such jurisdiction at any one time for all such indemnified party or parties. All such reasonable and documented
out-of-pocket fees, disbursements and other charges will be reimbursed by the indemnifying party promptly after the indemnifying
party receives a written invoice relating to fees, disbursements and other charges in reasonable detail. An indemnifying party
will not, in any event, be liable for any settlement of any action or claim effected without its written consent. No indemnifying
party shall, without the prior written consent of each indemnified party, settle or compromise or consent to the entry of any judgment
in any pending or threatened claim, action or proceeding relating to the matters contemplated by this Section 11 (whether
or not any indemnified party is a party thereto), unless such settlement, compromise or consent (1) includes an unconditional release
of each indemnified party from all liability arising out of such litigation, investigation, proceeding or claim and (2) does not
include a statement as to or an admission of fault, culpability or a failure to act by or on behalf of any indemnified party.


 






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(d) Contribution.
In order to provide for just and equitable contribution in circumstances in which the indemnification provided for in the foregoing
paragraphs of this Section 11 is applicable in accordance with its terms but for any reason is held to be unavailable from
the Company or HCW, the Company and HCW will contribute to the total losses, claims, liabilities, expenses and damages (including
any investigative, legal and other expenses reasonably incurred in connection with, and any amount paid in settlement of, any action,
suit or proceeding or any claim asserted, but after deducting any contribution received by the Company from persons other than
HCW, such as persons who control the Company within the meaning of the Securities Act or the Exchange Act, officers of the Company
who signed the Registration Statement and directors of the Company, who also may be liable for contribution) to which the Company
and HCW may be subject in such proportion as shall be appropriate to reflect the relative benefits received by the Company on the
one hand and HCW on the other hand. The relative benefits received by the Company on the one hand and HCW on the other hand shall
be deemed to be in the same proportion as the total Net Proceeds from the sale of the Placement Shares (before deducting expenses)
received by the Company bear to the total compensation received by HCW (before deducting expenses) from the sale of Placement Shares
on behalf of the Company. If, but only if, the allocation provided by the foregoing sentence is not permitted by applicable law,
the allocation of contribution shall be made in such proportion as is appropriate to reflect not only the relative benefits referred
to in the foregoing sentence but also the relative fault of the Company, on the one hand, and HCW, on the other hand, with respect
to the statements or omission that resulted in such loss, claim, liability, expense or damage, or action in respect thereof, as
well as any other relevant equitable considerations with respect to such offering. Such relative fault shall be determined by reference
to, among other things, whether the untrue or alleged untrue statement of a material fact or omission or alleged omission to state
a material fact relates to information supplied by the Company or HCW, the intent of the parties and their relative knowledge,
access to information and opportunity to correct or prevent such statement or omission. The Company and HCW agree that it would
not be just and equitable if contributions pursuant to this Section 11(d) were to be determined by pro rata allocation or
by any other method of allocation that does not take into account the equitable considerations referred to herein. The amount paid
or payable by an indemnified party as a result of the loss, claim, liability, expense, or damage, or action in respect thereof,
referred to above in this Section 11(d) shall be deemed to include, for the purpose of this Section 11(d), any legal
or other expenses reasonably incurred by such indemnified party in connection with investigating or defending any such action or
claim to the extent consistent with Section 11(c) hereof. Notwithstanding the foregoing provisions of this Section 11(d),
HCW shall not be required to contribute any amount in excess of the commissions received by it under this Agreement and no person
found guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) will be entitled to contribution
from any person who was not guilty of such fraudulent misrepresentation. For purposes of this Section 11(d), any person
who controls a party to this Agreement within the meaning of the Securities Act or the Exchange Act, and any officers, directors,
partners, employees or agents of HCW, will have the same rights to contribution as that party, and each officer who signed the
Registration Statement and director of the Company will have the same rights to contribution as the Company, subject in each case
to the provisions hereof. Any party entitled to contribution, promptly after receipt of notice of commencement of any action against
such party in respect of which a claim for contribution may be made under this Section 11(d), will notify any such party
or parties from whom contribution may be sought, but the omission to so notify will not relieve that party or parties from whom
contribution may be sought from any other obligation it or they may have under this Section 11(d) except to the extent that
the failure to so notify such other party materially prejudiced the substantive rights or defenses of the party from whom contribution
is sought. Except for a settlement entered into pursuant to the last sentence of Section 11(c) hereof, no party will be
liable for contribution with respect to any action or claim settled without its written consent if such consent is required pursuant
to Section 11(c) hereof.


 






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12. Representations
and Agreements to Survive Delivery. The indemnity and contribution agreements contained in Section 11 of this Agreement
and all representations and warranties of the Company herein or in certificates delivered pursuant hereto shall survive, as of
their respective dates, regardless of (i) any investigation made by or on behalf of HCW, any controlling persons, or the Company
(or any of their respective officers, directors or controlling persons), (ii) delivery and acceptance of the Placement Shares and
payment therefor or (iii) any termination of this Agreement.


 


13. Termination.


 


a. HCW may terminate
this Agreement, by notice to the Company, as hereinafter specified at any time (1) if there has been, since the time of execution
of this Agreement or since the date as of which information is given in the Prospectus, any Material Adverse Effect, or any development
that would have a Material Adverse Effect that, in the sole judgment of HCW, is material and adverse and makes it impractical or
inadvisable to market the Placement Shares or to enforce contracts for the sale of the Placement Shares, (2) if there has occurred
any material adverse change in the financial markets in the United States or the international financial markets, any outbreak
of hostilities or escalation thereof or other calamity or crisis or any change or development involving a prospective change in
national or international political, financial or economic conditions, in each case the effect of which is such as to make it,
in the judgment of HCW, impracticable or inadvisable to market the Placement Shares or to enforce contracts for the sale of the
Placement Shares, (3) if trading in the Common Stock has been suspended or limited by the Commission or the Exchange, or if trading
generally on the Exchange has been suspended or limited, or minimum prices for trading have been fixed on the Exchange, (4) if
any suspension of trading of any securities of the Company on any exchange or in the over-the-counter market shall have occurred
and be continuing, (5) if a major disruption of securities settlements or clearance services in the United States shall have occurred
and be continuing, or (6) if a banking moratorium has been declared by either U.S. Federal or New York authorities. Any such termination
shall be without liability of any party to any other party except that the provisions of Section 9 (Payment of Expenses),
Section 11 (Indemnification and Contribution), Section 12 (Representations and Agreements to Survive Delivery), Section
18 (Governing Law and Time; Waiver of Jury Trial) and Section 19 (Consent to Jurisdiction) hereof shall remain in full
force and effect notwithstanding such termination. If HCW elects to terminate this Agreement as provided in this Section 13(a),
HCW shall provide the required notice as specified in Section 14 (Notices).


 


b. The Company shall
have the right, by giving five (5) days’ notice as hereinafter specified to terminate this Agreement in its sole discretion
at any time after the date of this Agreement. Any such termination shall be without liability of any party to any other party except
that the provisions of Section 9 (Payment of Expenses), Section 11 (Indemnification and Contribution), Section
12 (Representations and Agreements to Survive Delivery), Section 18 (Governing Law and Time; Waiver of Jury Trial) and
Section 19 (Consent to Jurisdiction) hereof shall remain in full force and effect notwithstanding such termination.


 


c. HCW shall have the
right, by giving five (5) days’ notice as hereinafter specified to terminate this Agreement in its sole discretion at any
time after the date of this Agreement. Any such termination shall be without liability of any party to any other party except that
the provisions of Section 9 (Payment of Expenses), Section 11 (Indemnification and Contribution), Section 12
(Representations and Agreements to Survive Delivery), Section 18 (Governing Law and Time; Waiver of Jury Trial) and Section
19 (Consent to Jurisdiction) hereof shall remain in full force and effect notwithstanding such termination.


 






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d. Unless earlier terminated
pursuant to this Section 13, this Agreement shall automatically terminate upon the issuance and sale of all of the Placement
Shares through HCW on the terms and subject to the conditions set forth herein except that the provisions of Section 9 (Payment
of Expenses), Section 11 (Indemnification and Contribution), Section 12 (Representations and Agreements to Survive
Delivery), Section 18 (Governing Law and Time; Waiver of Jury Trial) and Section 19 (Consent to Jurisdiction) hereof
shall remain in full force and effect notwithstanding such termination.


 


e. This Agreement shall
remain in full force and effect unless terminated pursuant to Sections 13(a), (b), (c), or (d) above
or otherwise by mutual agreement of the parties; provided, however, that any such termination by mutual agreement shall
in all cases be deemed to provide that Section 9 (Payment of Expenses), Section 11 (Indemnification and Contribution),
Section 12 (Representations and Agreements to Survive Delivery), Section 18 (Governing Law and Time; Waiver of Jury
Trial) and Section 19 (Consent to Jurisdiction) shall remain in full force and effect. Upon termination of this Agreement,
the Company shall not have any liability to HCW for any discount, commission or other compensation with respect to any Placement
Shares not otherwise sold by HCW under this Agreement.


 


f. Any termination of
this Agreement shall be effective on the date specified in such notice of termination; provided, however, that such termination
shall not be effective until the close of business on the date of receipt of such notice by HCW or the Company, as the case may
be. If such termination shall occur prior to the Settlement Date for any sale of Placement Shares, such Placement Shares shall
settle in accordance with the provisions of this Agreement.


 


14. Notices.
All notices or other communications required or permitted to be given by any party to any other party pursuant to the terms of
this Agreement shall be in writing, unless otherwise specified, and if sent to HCW, shall be delivered to:


 


H.C. Wainwright & Co., LLC


430 Park Avenue

New York, NY 10022


Attention: Chief Executive Officer

Telephone: (212) 356-0500


Email: notices@hcwco.com


 


with a copy to:


 


Ellenoff Grossman & Schole LLP


1345 Avenue of the Americas, 11th Floor


New York, NY 10105


Attention: Robert Charron


Telephone: (212) 370-1300


Email: capmkts@egsllp.com


 






    	 	31	 



     


    

 


and if to the Company, shall be delivered to:


 


Pacific Ethanol, Inc.


400 Capitol Mall, Suite 2060,


Sacramento, California 95814

Attention: General Counsel

Telephone: (916) 403-2130


Email: cwright@pacificethanol.com


Fax: (916) 403-2785


 


with a copy to:


 


Troutman Pepper Hamilton Sanders LLP


5 Park Plaza, Suite 1400


Irvine, CA 92614-2545


Attention: Larry A. Cerutti

Telephone: (949) 622-2710


Email: larry.cerutti@troutman.com


Fax: (949) 622-2749


 


Each party to this Agreement may change
such address for notices by sending to the parties to this Agreement written notice of a new address for such purpose. Each such
notice or other communication shall be deemed given (i) when delivered personally, by email, or by verifiable facsimile transmission
on or before 4:30 p.m., New York City time, on a Business Day or, if such day is not a Business Day, on the next succeeding Business
Day, (ii) on the next Business Day after timely delivery to a nationally-recognized overnight courier and (iii) on the Business
Day actually received if deposited in the U.S. mail (certified or registered mail, return receipt requested, postage prepaid).
For purposes of this Agreement, “Business Day” shall mean any day on which the Exchange and commercial banks
in the City of New York are open for business, provided, however, for clarification, commercial banks shall not be
deemed to be authorized or required by law to remain closed due to “stay at home”, “shelter-in-place”,
“non-essential employee”  or any other similar orders or restrictions or the closure of any physical branch locations
at the direction of any governmental authority so long as the electronic funds transfer systems (including for wire transfers)
of commercial banks in The City of New York are generally are open for use by customers on such day.


 


15. Successors and
Assigns. This Agreement shall inure to the benefit of and be binding upon the Company and HCW and their respective successors
and the affiliates, controlling persons, officers and directors referred to in Section 11 hereof. References to any of the
parties contained in this Agreement shall be deemed to include the successors and permitted assigns of such party. Nothing in this
Agreement, express or implied, is intended to confer upon any party other than the parties hereto or their respective successors
and permitted assigns any rights, remedies, obligations or liabilities under or by reason of this Agreement, except as expressly
provided in this Agreement. Neither the Company nor HCW may assign its rights or obligations under this Agreement without the prior
written consent of the other party.


 


16. Adjustments
for Stock Splits. The parties acknowledge and agree that all share-related numbers contained in this Agreement shall be adjusted
to take into account any share consolidation, stock split, stock dividend, corporate domestication or similar event effected with
respect to the Placement Shares.


 






    	 	32	 



     


    

 


17. Entire Agreement;
Amendment; Severability. This Agreement (including all schedules and exhibits attached hereto and Placement Notices issued
pursuant hereto), together with that certain letter agreement between HCW and the Company dated as of the date hereof, constitutes
the entire agreement and supersedes all other prior and contemporaneous agreements and undertakings, both written and oral, among
the parties hereto with regard to the subject matter hereof. Neither this Agreement nor any term hereof may be amended except pursuant
to a written instrument executed by the Company and HCW. In the event that any one or more of the provisions contained herein,
or the application thereof in any circumstance, is held invalid, illegal or unenforceable as written by a court of competent jurisdiction,
then such provision shall be given full force and effect to the fullest possible extent that it is valid, legal and enforceable,
and the remainder of the terms and provisions herein shall be construed as if such invalid, illegal or unenforceable term or provision
was not contained herein, but only to the extent that giving effect to such provision and the remainder of the terms and provisions
hereof shall be in accordance with the intent of the parties as reflected in this Agreement.


 


18. GOVERNING LAW
AND TIME; WAIVER OF JURY TRIAL. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE
OF NEW YORK WITHOUT REGARD TO THE PRINCIPLES OF CONFLICTS OF LAWS. SPECIFIED TIMES OF DAY REFER TO NEW YORK CITY TIME. THE COMPANY
AND HCW EACH HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY AND ALL RIGHT TO TRIAL BY JURY IN
ANY LEGAL PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.


 


19. CONSENT TO JURISDICTION.
EACH PARTY HEREBY IRREVOCABLY SUBMITS TO THE NON-EXCLUSIVE JURISDICTION OF THE STATE AND FEDERAL COURTS SITTING IN THE CITY OF
NEW YORK, BOROUGH OF MANHATTAN, FOR THE ADJUDICATION OF ANY DISPUTE HEREUNDER OR IN CONNECTION WITH ANY TRANSACTION CONTEMPLATED
HEREBY, AND HEREBY IRREVOCABLY WAIVES, AND AGREES NOT TO ASSERT IN ANY SUIT, ACTION OR PROCEEDING, ANY CLAIM THAT IT IS NOT PERSONALLY
SUBJECT TO THE JURISDICTION OF ANY SUCH COURT, THAT SUCH SUIT, ACTION OR PROCEEDING IS BROUGHT IN AN INCONVENIENT FORUM OR THAT
THE VENUE OF SUCH SUIT, ACTION OR PROCEEDING IS IMPROPER. EACH PARTY HEREBY IRREVOCABLY WAIVES PERSONAL SERVICE OF PROCESS AND
CONSENTS TO PROCESS BEING SERVED IN ANY SUCH SUIT, ACTION OR PROCEEDING BY MAILING A COPY THEREOF (CERTIFIED OR REGISTERED MAIL,
RETURN RECEIPT REQUESTED) TO SUCH PARTY AT THE ADDRESS IN EFFECT FOR NOTICES TO IT UNDER THIS AGREEMENT AND AGREES THAT SUCH SERVICE
SHALL CONSTITUTE GOOD AND SUFFICIENT SERVICE OF PROCESS AND NOTICE THEREOF. NOTHING CONTAINED HEREIN SHALL BE DEEMED TO LIMIT IN
ANY WAY ANY RIGHT TO SERVE PROCESS IN ANY MANNER PERMITTED BY LAW.


 






    	 	33	 



     


    

 


20. Use of Information.
HCW may not use any information gained in connection with this Agreement and the transactions contemplated by this Agreement, including
due diligence, to advise any party with respect to transactions not expressly approved by the Company.


 


21. Counterparts.
This Agreement may be executed in two or more counterparts, each of which shall be deemed an original, but all of which together
shall constitute one and the same instrument. Delivery of an executed Agreement by one party to the other may be made by facsimile
transmission or email of a .pdf attachment.


 


22. Effect of Headings.
The section, Schedule and Exhibit headings herein are for convenience only and shall not affect the construction hereof.


 


23. Permitted Free
Writing Prospectuses. The Company represents, warrants and agrees that, unless it obtains the prior consent of HCW, and HCW
represents, warrants and agrees that, unless it obtains the prior consent of the Company, it has not made and will not make any
offer relating to the Placement Shares that would constitute an Issuer Free Writing Prospectus, or that would otherwise constitute
a “free writing prospectus,” as defined in Rule 405, required to be filed with the Commission. Any such free writing
prospectus consented to by HCW or by the Company, as the case may be, is hereinafter referred to as a “Permitted Free Writing
Prospectus.” The Company represents and warrants that it has treated and agrees that it will treat each Permitted Free Writing
Prospectus as an “issuer free writing prospectus,” as defined in Rule 433, and has complied and will comply with the
requirements of Rule 433 applicable to any Permitted Free Writing Prospectus, including timely filing with the Commission where
required, legending and record keeping. For the purposes of clarity, the parties hereto agree that all free writing prospectuses,
if any, listed in Exhibit 23 hereto are Permitted Free Writing Prospectuses.


 


24. Absence of Fiduciary
Relationship. The Company acknowledges and agrees that:


 


a. HCW is acting solely
as agent in connection with the public offering of the Placement Shares and in connection with each transaction contemplated by
this Agreement and the process leading to such transactions, and no fiduciary or advisory relationship between the Company or any
of its respective affiliates, stockholders (or other equity holders), creditors or employees or any other party, on the one hand,
and HCW, on the other hand, has been or will be created in respect of any of the transactions contemplated by this Agreement, irrespective
of whether or not HCW has advised or is advising the Company on other matters, and HCW has no obligation to the Company with respect
to the transactions contemplated by this Agreement except the obligations expressly set forth in this Agreement;


 


b. it is capable of evaluating
and understanding, and understands and accepts, the terms, risks and conditions of the transactions contemplated by this Agreement;


 


c. HCW has not provided
any legal, accounting, regulatory or tax advice with respect to the transactions contemplated by this Agreement and it has consulted
its own legal, accounting, regulatory and tax advisors to the extent it has deemed appropriate;


 






    	 	34	 



     


    

 


d. it is aware that HCW
and its affiliates are engaged in a broad range of transactions which may involve interests that differ from those of the Company
and HCW has no obligation to disclose such interests and transactions to the Company by virtue of any fiduciary, advisory or agency
relationship or otherwise; and


 


e. it waives, to the
fullest extent permitted by law, any claims it may have against HCW for breach of fiduciary duty or alleged breach of fiduciary
duty in connection with the sale of Placement Shares under this Agreement and agrees that HCW shall not have any liability (whether
direct or indirect, in contract, tort or otherwise) to it in respect of such a fiduciary duty claim or to any person asserting
a fiduciary duty claim on its behalf or in right of it or the Company, employees or creditors of Company, other than in respect
of HCW’s obligations under this Agreement and to keep information provided by the Company to HCW and its counsel confidential
to the extent not otherwise publicly-available.


 


25. Definitions.
As used in this Agreement, the following terms have the respective meanings set forth below:


 


“Applicable
Time” means (i) each Representation Date and (ii) the time of each sale of any Placement Shares pursuant to this Agreement.


 


“Issuer Free
Writing Prospectus” means any “issuer free writing prospectus,” as defined in Rule 433, relating to the Placement
Shares that (1) is required to be filed with the Commission by the Company, (2) is a “road show” that is a “written
communication” within the meaning of Rule 433(d)(8)(i) whether or not required to be filed with the Commission, or (3) is
exempt from filing pursuant to Rule 433(d)(5)(i) because it contains a description of the Placement Shares or of the offering that
does not reflect the final terms, in each case in the form filed or required to be filed with the Commission or, if not required
to be filed, in the form retained in the Company’s records pursuant to Rule 433(g) under the Securities Act.


 


“Rule 172,”
“Rule 405,” “Rule 415,” “Rule 424,” “Rule 424(b),”
“Rule 430B,” and “Rule 433” refer to such rules under the Securities Act.


 


All references in this
Agreement to financial statements and schedules and other information that is “contained,” “included” or
“stated” in the Registration Statement or the Prospectus (and all other references of like import) shall be deemed
to mean and include all such financial statements and schedules and other information that is incorporated by reference in the
Registration Statement or the Prospectus, as the case may be.


 


All references in this
Agreement to the Registration Statement, the Prospectus or any amendment or supplement to any of the foregoing shall be deemed
to include the copy filed with the Commission pursuant to EDGAR; all references in this Agreement to any Issuer Free Writing Prospectus
(other than any Issuer Free Writing Prospectuses that, pursuant to Rule 433, are not required to be filed with the Commission)
shall be deemed to include the copy thereof filed with the Commission pursuant to EDGAR; and all references in this Agreement to
“supplements” to the Prospectus shall include, without limitation, any supplements, “wrappers” or similar
materials prepared in connection with any offering, sale or private placement of any Placement Shares by HCW outside of the United
States.


 


[Remainder of the page intentionally left
blank]


 









    	 	35	 



     


    

 


If the foregoing correctly sets forth the
understanding between the Company and HCW, please so indicate in the space provided below for that purpose, whereupon this letter
shall constitute a binding agreement between the Company and HCW.


 


	 	Very truly yours,
	 	 	 
	 	PACIFIC ETHANOL, INC.
	 	 	 
	 	By:	/s/ Bryon McGregor
	 	 	Name: Bryon McGregor
	 	 	Title: Chief Financial Officer
	 	 	 
	 	ACCEPTED as of the date first-above written:
	 	 	 
	 	H.C. WAINWRIGHT & CO., LLC
	 	 	 
	 	By:	/s/ Edward D. Silvera
	 	 	Name: Edward D. Silvera
	 	 	Title: Chief Operating Officer



 






    	 	36	 



     


    

 


SCHEDULE 1


FORM OF PLACEMENT NOTICE


	 	From:	Pacific Ethanol, Inc.


 


	 	To:	H.C. Wainwright & Co., LLC


 


	 	Attention:	[●]


 


	 	Subject:	At Market Issuance--Placement Notice


 


Gentlemen:


 


Pursuant to the terms
and subject to the conditions contained in the At Market Issuance Sales Agreement between Pacific Ethanol, Inc., a Delaware corporation
(the “Company”), and H.C. Wainwright & Co., LLC (“HCW”), dated August [13], 2020, the
Company hereby requests that HCW sell up to $[____] of the Company’s Common Stock, par value $0.001 per share, at a minimum
market price of $___ per share, during the time period beginning [month, day, time] and ending [month, day, time].


 









    	 		 



     


    

 


 


SCHEDULE 2


Compensation


 


The Company shall pay
to HCW in cash, upon each sale of Placement Shares pursuant to this Agreement, an amount equal to up to 3.0% of the gross proceeds
from each sale of Placement Shares.


 






    	 		 



     


    

 


SCHEDULE 3


Notice Parties


 


The Company


 


	Mike Kandris	 	mkandris@pacificethanol.com
	 	 	 
	Bryon McGregor	 	bmcgregor@pacificethanol.com
	 	 	 
	Christopher Wright	 	cwright@pacificethanol.com



 


HCW


  


atm@hcwco.com


 









    	 		 



     


    

 


SCHEDULE 6(g)


Subsidiaries


 


	Company	 	Jurisdiction
	 	 	 
	Kinergy Marketing LLC	 	Oregon
	Pacific Ag. Products, LLC	 	California
	Pacific Ethanol Development, LLC	 	Delaware
	PE Op Co.	 	Delaware
	Pacific Ethanol West, LLC	 	Delaware
	Pacific Ethanol Columbia, LLC	 	Delaware
	Pacific Ethanol Madera LLC	 	Delaware
	Pacific Ethanol Magic Valley, LLC	 	Delaware
	Pacific Ethanol Stockton LLC	 	Delaware
	Pacific Ethanol Central, LLC	 	Delaware
	Pacific Ethanol Canton, LLC	 	Delaware
	Pacific Ethanol Pekin, LLC	 	Delaware
	Pacific Ethanol Aurora East, LLC(1)	 	Delaware
	Pacific Ethanol Aurora West, LLC(1)	 	Delaware
	Illinois Corn Processing, LLC	 	 Delaware


 






    	 		 



     


    

 


EXHIBIT 7(1)

Form of Representation Date Certificate


___________, 20___


 


This Representation
Date Certificate (this “Certificate”) is executed and delivered in connection with Section 7(1) of the
At Market Issuance Sales Agreement (the “Agreement”), dated August [13], 2020, and entered into between Pacific
Ethanol, Inc. (the “Company”) and H.C. Wainwright & Co., LLC. All capitalized terms used but not defined
herein shall have the meanings given to such terms in the Agreement.


 


The Company hereby
certifies as follows:


 


1. As of the date
of this Certificate (i) the Registration Statement does not contain any untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary in order to make the statements therein not misleading and (ii) neither
the Registration Statement nor the Prospectus contain any untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary in order to make the statements therein, in light of the circumstances under which they
were made, not misleading and (iii) no event has occurred as a result of which it is necessary to amend or supplement the Prospectus
in order to make the statements therein not untrue or misleading for this paragraph 1 to be true.


 


2. Each of the representations
and warranties of the Company contained in the Agreement were, when originally made, and are, as of the date of this Certificate,
true and correct in all material respects (other than representations and warranties made as of a specific date or time, in which
case such representations and warranties are true and correct in all material respects as of the time specified).


 


3. Except as waived
by HCW in writing, each of the covenants required to be performed by the Company in the Agreement on or prior to the date of the
Agreement, this Representation Date, and each such other date prior to the date hereof as set forth in the Agreement, has been
duly, timely and fully performed in all material respects and each condition required to be complied with by the Company on or
prior to the date of the Agreement, this Representation Date, and each such other date prior to the date hereof as set forth in
the Agreement has been duly, timely and fully complied with in all material respects.


 


4. Subsequent to the
date of the most recent financial statements in the Prospectus, and except as described in the Prospectus, including Incorporated
Documents, there has been no Material Adverse Effect.


 


5. No stop order suspending
the effectiveness of the Registration Statement or of any part thereof has been issued, and, to the Company’s knowledge,
no proceedings for that purpose have been instituted or are pending or threatened by any securities or other governmental authority
(including, without limitation, the Commission).


 



    	 		 



     


    

 


6. No order suspending
the effectiveness of the Registration Statement or the qualification or registration of the Placement Shares under the securities
or Blue Sky laws of any jurisdiction are in effect and, to the Company’s knowledge, no proceeding for such purpose is pending
before, or threatened by, any securities or other governmental authority (including, without limitation, the Commission).


 


The undersigned has
executed this Representation Date Certificate as of the date first written above.


 


	 	PACIFIC ETHANOL INC.
	 	 	 
	 	By:	      
	 	 	 
	 	Name:	 
	 	 	 
	 	Title:	 


 









    	 		 



     


    

 


EXHIBIT 23


Permitted Issuer Free Writing Prospectuses


None.