Exhibit 10.2


 


REGISTRATION RIGHTS AGREEMENT


 


This REGISTRATION
RIGHTS AGREEMENT (this “Agreement”), dated as of October __, 2020, is by and among Pacific Ethanol, Inc.,
a Delaware corporation, with offices located at 400 Capitol Mall, Suite 2060, Sacramento, California (the “Company”),
and the undersigned buyers (each, a “Buyer,” and collectively, the “Buyers”).


 


RECITALS


 


A. In
connection with the Securities Purchase Agreement by and among the parties hereto, dated as of the date hereof (the “Securities
Purchase Agreement”), the Company has agreed, upon the terms and subject to the conditions of the Securities Purchase
Agreement, to issue and sell to each Buyer the Warrants (as defined in the Securities Purchase Agreement) which will be exercisable
into Warrant Shares (as defined in the Securities Purchase Agreement) in accordance with the terms of the Warrants.


 


B. To
induce the Buyers to consummate the transactions contemplated by the Securities Purchase Agreement, the Company has agreed to provide
certain registration rights under the Securities Act of 1933, as amended, and the rules and regulations thereunder, or any similar
successor statute (collectively, the “1933 Act”), and applicable state securities laws.


 


AGREEMENT


 


NOW, THEREFORE,
in consideration of the premises and the mutual covenants contained herein and for other good and valuable consideration, the receipt
and sufficiency of which are hereby acknowledged, the Company and each of the Buyers hereby agree as follows:


 


1. 
Definitions.


 


Capitalized terms used
herein and not otherwise defined herein shall have the respective meanings set forth in the Securities Purchase Agreement. As used
in this Agreement, the following terms shall have the following meanings:


 


(a) “Business
Day” means any day other than Saturday, Sunday or any other day on which commercial banks in New York, New York are authorized
or required by law to remain closed.


 


(b) “Closing
Date” shall have the meaning set forth in the Securities Purchase Agreement.


 


(c) “Effective
Date” means the date that the applicable Registration Statement has been declared effective by the SEC.


 


(d) “Effectiveness
Deadline” means (i) with respect to the initial Registration Statement required to be filed pursuant to Section 2(a),
the earlier of the (A) 60th calendar day after the Closing Date (or the 90th calendar day after the Closing
Date if such Registration Statement is subject to a full review by the SEC) and (B) 2nd Business Day after the date the Company
is notified (orally or in writing, whichever is earlier) by the SEC that such Registration Statement will not be reviewed or will
not be subject to further review, and effectiveness may be immediately accelerated and (ii) with respect to any additional Registration
Statements that may be required to be filed by the Company pursuant to this Agreement, the earlier of the (A) 60th calendar
day following the date on which the Company was required to file such additional Registration Statement (or the 90th
calendar day following the date on which the Company was required to file such additional Registration Statement if such additional
Registration Statement is subject to a full review by the SEC) and (B) 2nd Business Day after the date the Company is
notified (orally or in writing, whichever is earlier) by the SEC that such Registration Statement will not be reviewed or will
not be subject to further review, and effectiveness may be immediately accelerated.


 


(e) “Filing
Deadline” means (i) with respect to the initial Registration Statement required to be filed pursuant to Section 2(a),
the 30th calendar day after the Closing Date and (ii) with respect to any additional Registration Statements that
may be required to be filed by the Company pursuant to this Agreement, the date on which the Company was required to file such
additional Registration Statement pursuant to the terms of this Agreement.


 






    


     


    

 


(f) “Investor”
means a Buyer or any transferee or assignee of any Registrable Securities or Warrants, as applicable, to whom a Buyer assigns its
rights under this Agreement and who agrees to become bound by the provisions of this Agreement in accordance with Section 9
and any transferee or assignee thereof to whom a transferee or assignee of any Registrable Securities or Warrants, as applicable,
assigns its rights under this Agreement and who agrees to become bound by the provisions of this Agreement in accordance with Section 9.


 


(g) “Person”
means an individual, a limited liability company, a partnership, a joint venture, a corporation, a trust, an unincorporated organization
or a government or any department or agency thereof.


 


(h) “register,”
“registered,” and “registration” refer to a registration effected by preparing and filing
one or more Registration Statements in compliance with the 1933 Act and pursuant to Rule 415 and the declaration of effectiveness
of such Registration Statement(s) by the SEC.


 


(i) “Registrable
Securities” means (i) the Warrant Shares, and (ii) any capital stock of the Company issued or issuable with respect to
the Warrant Shares or the Warrants, including, without limitation, (1) as a result of any stock split, stock dividend, recapitalization,
exchange or similar event or otherwise and (2) shares of capital stock of the Company into which the shares of Common Stock (as
defined in the Warrants) are converted or exchanged and shares of capital stock of a Successor Entity (as defined in the Warrants)
into which the shares of Common Stock are converted or exchanged, in each case, without regard to any limitations on exercise of
the Warrants.


 


(j) “Registration
Statement” means a registration statement or registration statements of the Company filed under the 1933 Act covering
Registrable Securities.


 


(k) “Required
Holders” means, as of any given time, the holders of a majority of the Registrable Securities as of such time (excluding
any Registrable Securities held by the Company or any of its Subsidiaries as of such time).


 


(l) “Required
Registration Amount” means 100% of the maximum number of Warrant Shares issuable upon exercise of the Warrants.


 


(m) “Rule
144” means Rule 144 promulgated by the SEC under the 1933 Act, as such rule may be amended from time to time, or any
other similar or successor rule or regulation of the SEC that may at any time permit the Investors to sell securities of the Company
to the public without registration.


 


(n) “Rule
415” means Rule 415 promulgated by the SEC under the 1933 Act, as such rule may be amended from time to time, or any
other similar or successor rule or regulation of the SEC providing for offering securities on a continuous or delayed basis.


 


(o) “SEC”
means the United States Securities and Exchange Commission or any successor thereto.


 


2. 
Registration.


 


(a) 
Mandatory Registration. The Company shall prepare and, as soon as practicable, but in no event later than the Filing
Deadline, file with the SEC an initial Registration Statement on Form S-3 covering the resale of all of the Registrable Securities,
provided that such initial Registration Statement shall register for resale at least the number of shares of Common Stock equal
to the Required Registration Amount as of the date such Registration Statement is initially filed with the SEC; provided further
that if Form S-3 is unavailable for such a registration, the Company shall use such other form as is required by Section 2(c).
Such initial Registration Statement, and each other Registration Statement required to be filed pursuant to the terms of this Agreement,
shall contain (except if otherwise directed by the Required Holders or as required by applicable law, rule or regulation) the “Selling
Stockholders” and “Plan of Distribution” sections in substantially the forms attached hereto as Exhibit
A. The Company shall use its best efforts to have such initial Registration Statement, and each other Registration Statement
required to be filed pursuant to the terms of this Agreement, declared effective by the SEC as soon as practicable, but in no event
later than the applicable Effectiveness Deadline for such Registration Statement.


 






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(b) 
Ineligibility to Use Form S-3. In the event that Form S-3 is not available for the registration of the resale of
Registrable Securities hereunder, the Company shall (i) register the resale of the Registrable Securities on Form S-1 or another
appropriate form reasonably acceptable to the Required Holders and (ii) undertake to register the resale of the Registrable Securities
on Form S-3 as soon as such form is available, provided that the Company shall maintain the effectiveness of all Registration
Statements then in effect until such time as a Registration Statement on Form S-3 covering the resale of all the Registrable Securities
has been declared effective by the SEC and the prospectus contained therein is available for use.


 


(c) 
Sufficient Number of Shares Registered. In the event the number of shares available under any Registration Statement
is insufficient to cover all of the Registrable Securities required to be covered by such Registration Statement or an Investor’s
allocated portion of the Registrable Securities pursuant to Section 2(h), the Company shall amend such Registration Statement
(if permissible), or file with the SEC a new Registration Statement (on the short form available therefor, if applicable), or both,
so as to cover at least the Required Registration Amount as of the Trading Day immediately preceding the date of the filing of
such amendment or new Registration Statement, in each case, as soon as practicable, but in any event not later than thirty (30)
days after the necessity therefor arises (but taking account of any Staff position with respect to the date on which the Staff
will permit such amendment to the Registration Statement and/or such new Registration Statement (as the case may be) to be filed
with the SEC). The Company shall use its best efforts to cause such amendment to such Registration Statement and/or such new Registration
Statement (as the case may be) to become effective as soon as practicable following the filing thereof with the SEC, but in no
event later than the applicable Effectiveness Deadline for such Registration Statement.


 


(d) 
Effect of Failure to Maintain Effectiveness of any Registration Statement. If the Company shall fail to satisfy any
condition set forth in Rule 144(i)(2) (a “Current Public Information Failure”) as a result of which any of the
Investors are unable to sell Registrable Securities without restriction under Rule 144 (including, without limitation, volume
restrictions), then, as partial relief for the damages to any holder by reason of any such delay in, or reduction of, its ability
to sell the underlying shares of Common Stock (which remedy shall not be exclusive of any other remedies available at law or in
equity, including, without limitation, specific performance), the Company shall pay to each holder of Registrable Securities relating
to such Registration Statement an amount in cash equal to two percent (2%) of the amount, if any, by which the closing price of
the Common Stock of the Company on the Principal Market or any successor market exceeds such Investor’s exercise price under
such Investor’s Warrant, multiplied by the Warrant Shares then underlying such Investor’s Warrant (1) on the date of
such Current Public Information Failure, as applicable, and (2) on every thirty (30) day anniversary of a Current Public Information
Failure until the earlier of (i) the date such Current Public Information Failure is cured and (ii) such time that such public
information is no longer required pursuant to Rule 144 (in each case, pro rated for periods totaling less than thirty (30)
days). The payments to which a holder of Registrable Securities shall be entitled pursuant to this Section 2(e) are referred
to herein as “Registration Delay Payments.” Following the initial Registration Delay Payment for any particular
event or failure (which shall be paid on the date of such event or failure, as set forth above), without limiting the foregoing,
if an event or failure giving rise to the Registration Delay Payments is cured prior to any thirty (30) day anniversary of such
event or failure, then such Registration Delay Payment shall be made on the third (3rd) Business Day after such cure.
In the event the Company fails to make Registration Delay Payments in a timely manner in accordance with the foregoing, such Registration
Delay Payments shall bear interest at the rate of one percent (1%) per month (prorated for partial months) until paid in full.
Notwithstanding the foregoing, no Registration Delay Payments shall be owed to an Investor (with respect to any period during which
all of such Investor’s Registrable Securities may be sold by such Investor without restriction under Rule 144 (including,
without limitation, volume restrictions) and without the need for current public information required by Rule 144(c)(1) (or Rule
144(i)(2), if applicable). Notwithstanding anything herein to the contrary, no Investor shall receive both a Registration Delay
Payment and payment under Section 7(e) of the Securities Purchase Agreement as to any Notice Failure or Delivery Failure (as
such terms are defined in the Securities Purchase Agreement) or in respect of the circumstances thereof.


 






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(e) 
Offering. Notwithstanding anything to the contrary contained in this Agreement, but subject to the payment of the
Registration Delay Payments pursuant to Section 2(d), in the event the staff of the SEC (the “Staff”) or
the SEC seeks to characterize any offering pursuant to a Registration Statement filed pursuant to this Agreement as constituting
an offering of securities by, or on behalf of, the Company, or in any other manner, such that the Staff or the SEC
do not permit such Registration Statement to become effective and used for resales in a manner that does not constitute such
an offering and that permits the continuous resale at the market by the Investors participating therein (or as otherwise
may be acceptable to each Investor) without being named therein as an “underwriter,” then the Company shall reduce
the number of shares to be included in such Registration Statement by all Investors until such time as the Staff and the SEC
shall so permit such Registration Statement to become effective as aforesaid. In making such reduction, the Company shall reduce
the number of shares to be included by all Investors on a pro rata basis (based upon the number of Registrable Securities otherwise
required to be included for each Investor) unless the inclusion of shares by a particular Investor or a particular set of Investors
are resulting in the Staff or the SEC’s “by or on behalf of the Company” offering position, in which event the
shares held by such Investor or set of Investors shall be the only shares subject to reduction (and if by a set of Investors on
a pro rata basis by such Investors or on such other basis as would result in the exclusion of the least number of shares by all
such Investors); provided, that, with respect to such pro rata portion allocated to any Investor, such Investor may elect the allocation
of such pro rata portion among the Registrable Securities of such Investor. In addition, in the event that the Staff or the SEC
requires any Investor seeking to sell securities under a Registration Statement filed pursuant to this Agreement to be
specifically identified as an “underwriter” in order to permit such Registration Statement to become effective, and
such Investor does not consent to being so named as an underwriter in such Registration Statement, then, in each such case,
the Company shall reduce the total number of Registrable Securities to be registered on behalf of such Investor, until
such time as the Staff or the SEC does not require such identification or until such Investor accepts such identification and the
manner thereof. Any reduction pursuant to this paragraph will first reduce all Registrable Securities other than those issued
pursuant to the Securities Purchase Agreement. In the event of any reduction in Registrable Securities pursuant to this
paragraph, an affected Investor shall have the right to require, upon delivery of a written request to the Company signed
by such Investor, the Company to file a registration statement within thirty (30) days of such request (subject to any restrictions
imposed by Rule 415 or required by the Staff or the SEC) for resale by such Investor in a manner acceptable to such Investor,
and the Company shall following such request cause to be and keep effective such registration statement in the same manner
as otherwise contemplated in this Agreement for registration statements hereunder, in each case until such time as: (i)
all Registrable Securities held by such Investor have been registered and sold pursuant to an effective Registration Statement
in a manner acceptable to such Investor or (ii) all Registrable Securities may be resold by such Investor without restriction
(including, without limitation, volume limitations) pursuant to Rule 144 (taking account of any Staff position with respect to
“affiliate” status) and without the need for current public information required by Rule 144(c)(1) (or Rule 144(i)(2),
if applicable) or (iii) such Investor agrees to be named as an underwriter in any such Registration Statement in a manner acceptable
to such Investor as to all Registrable Securities held by such Investor and that have not theretofore been included in a Registration
Statement under this Agreement (it being understood that the special demand right under this sentence may be exercised by an Investor
multiple times and with respect to limited amounts of Registrable Securities in order to permit the resale thereof by such Investor
as contemplated above).


 


(f) 
Piggyback Registrations. Without limiting any obligation of the Company hereunder or under the Securities Purchase
Agreement, if there is not an effective Registration Statement covering all of the Registrable Securities or the prospectus contained
therein is not available for use and the Company shall determine to prepare and file with the SEC a registration statement or offering
statement relating to an offering for its own account or the account of others under the 1933 Act of any of its equity securities
(other than on Form S-4 or Form S-8 (each as promulgated under the 1933 Act) or their then equivalents relating to equity securities
to be issued solely in connection with any acquisition of any entity or business or equity securities issuable in connection with
the Company’s stock option or other employee benefit plans), then the Company shall deliver to each Investor a written notice
of such determination and, if within five (5) days after the date of the delivery of such notice, any such Investor shall so request
in writing, the Company shall include in such registration statement or offering statement all or any part of such Registrable
Securities such Investor requests to be registered; provided, however, the Company shall not be required to register any Registrable
Securities pursuant to this Section 2(g) that are eligible for resale pursuant to Rule 144 without restriction (including,
without limitation, volume restrictions) and without the need for current public information required by Rule 144(c)(1) (or Rule 144(i)(2),
if applicable) or that are the subject of a then-effective Registration Statement.


 






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(g) 
Allocation of Registrable Securities. The initial number of Registrable Securities included in any Registration Statement
and any increase in the number of Registrable Securities included therein shall be allocated pro rata among the Investors based
on the number of Registrable Securities held by each Investor at the time such Registration Statement covering such initial number
of Registrable Securities or increase thereof is declared effective by the SEC. In the event that an Investor sells or otherwise
transfers any of such Investor’s Registrable Securities, each transferee or assignee (as the case may be) that becomes an
Investor shall be allocated a pro rata portion of the then-remaining number of Registrable Securities included in such Registration
Statement for such transferor or assignee (as the case may be). Any shares of Common Stock included in a Registration Statement
and which remain allocated to any Person which ceases to hold any Registrable Securities covered by such Registration Statement
shall be allocated to the remaining Investors, pro rata based on the number of Registrable Securities then held by such Investors
which are covered by such Registration Statement.


 


(h) 
No Inclusion of Other Securities. The Company shall in no event include any securities other than Registrable Securities
on any Registration Statement filed in accordance herewith (except as contemplated in Section 2(f)) without the prior written consent
of the Required Holders. Until the Applicable Date (as defined in the Securities Purchase Agreement), the Company shall not file
any Registration Statement except with respect to the Registrable Securities, and except as otherwise permitted under the Securities
Purchase Agreement.


 


3. 
Related Obligations.


 


The Company shall use
its best efforts to effect the registration of the Registrable Securities in accordance with the intended method of disposition
thereof, and, pursuant thereto, the Company shall have the following obligations:


 


(a) 
The Company shall promptly prepare and file with the SEC a Registration Statement with respect to all the Registrable Securities
(but in no event later than the applicable Filing Deadline) and use its best efforts to cause such Registration Statement to become
effective as soon as practicable after such filing (but in no event later than the Effectiveness Deadline). Subject to Allowable
Grace Periods, the Company shall keep each Registration Statement effective (and the prospectus contained therein available for
use) pursuant to Rule 415 for resales by the Investors on a delayed or continuous basis at then-prevailing market prices (and not
fixed prices) at all times until the earlier of (i) the date as of which all of the Investors may sell all of the Registrable Securities
required to be covered by such Registration Statement (disregarding any reduction pursuant to Section 2(f)) without restriction
pursuant to Rule 144 (including, without limitation, volume restrictions) and without the need for current public information required
by Rule 144(c)(1) (or Rule 144(i)(2), if applicable) or (ii) the date on which the Investors shall have sold all of the Registrable
Securities covered by such Registration Statement (the “Registration Period”). Notwithstanding anything to the
contrary contained in this Agreement, the Company shall ensure that, when filed and at all times while effective, each Registration
Statement (including, without limitation, all amendments and supplements thereto) and the prospectus (including, without limitation,
all amendments and supplements thereto) used in connection with such Registration Statement (1) shall not contain any 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
(in the case of prospectuses, in the light of the circumstances in which they were made) not misleading and (2) will disclose (whether
directly or through incorporation by reference to other SEC filings to the extent permitted) all information required to be disclosed
regarding the Company and its securities. The Company shall submit to the SEC, within one (1) Business Day after the later of the
date that (i) the Company learns that no review of a particular Registration Statement will be made by the Staff or that the Staff
has no further comments on a particular Registration Statement (as the case may be) and (ii) the consent of Legal Counsel is obtained
pursuant to Section 3(c) (which consent shall be immediately sought), a request for acceleration of effectiveness of such
Registration Statement to a time and date not later than twenty-four (24) hours after the submission of such request. The
Company shall respond in writing to comments made by the SEC in respect of a Registration Statement as soon as practicable, but
in no event later than fifteen (15) Business Days after the receipt of comments by or notice from the SEC that an amendment is
required in order for a Registration Statement to be declared effective.


 






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(b) 
Subject to Section 3(r) of this Agreement, the Company shall prepare and file with the SEC such amendments (including,
without limitation, post-effective amendments) and supplements to each Registration Statement and the prospectus used in connection
with each such Registration Statement, which prospectus is to be filed pursuant to Rule 424 promulgated under the 1933 Act, as
may be necessary to keep each such Registration Statement effective at all times during the Registration Period for such Registration
Statement, and, during such period, comply with the provisions of the 1933 Act with respect to the disposition of all Registrable
Securities of the Company required to be covered by such Registration Statement until such time as all of such Registrable Securities
shall have been disposed of in accordance with the intended methods of disposition by the seller or sellers thereof as set forth
in such Registration Statement; provided, however, by 8:30 a.m. (New York time) on the Business Day immediately following each
Effective Date, the Company shall file with the SEC in accordance with Rule 424(b) under the 1933 Act the final prospectus to be
used in connection with sales pursuant to the applicable Registration Statement (whether or not such a prospectus is technically
required by such rule). In the case of amendments and supplements to any Registration Statement which are required to be filed
pursuant to this Agreement (including, without limitation, pursuant to this Section 3(b)) by reason of the Company filing
a report on Form 8-K, Form 10-Q or Form 10-K or any analogous report under the Securities Exchange Act of 1934, as amended (the
“1934 Act”), the Company shall, if permitted under the applicable rules and regulations of the SEC, have incorporated
such report by reference into such Registration Statement, if applicable, or shall file such amendments or supplements with the
SEC on the same day on which the 1934 Act report is filed which created the requirement for the Company to amend or supplement
such Registration Statement.


 


(c) 
The Company shall (A) permit Legal Counsel and legal counsel for each other Investor to review and comment upon (i) each
Registration Statement at least five (5) Business Days prior to its filing with the SEC and (ii) all amendments and supplements
to each Registration Statement (including, without limitation, the prospectus contained therein) (except for Annual Reports on
Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, and any similar or successor reports) within a reasonable
number of days prior to their filing with the SEC, and (B) not file any Registration Statement or amendment or supplement thereto
in a form to which Legal Counsel or any legal counsel for any other Investor reasonably objects. The Company shall not submit a
request for acceleration of the effectiveness of a Registration Statement or any amendment or supplement thereto or to any prospectus
contained therein without the prior consent of Legal Counsel, which consent shall not be unreasonably withheld. The Company shall
promptly furnish to Legal Counsel and legal counsel for each other Investor, without charge, (i) copies of any correspondence from
the SEC or the Staff to the Company or its representatives relating to each Registration Statement, provided that such correspondence
shall not contain any material, non-public information regarding the Company or any of its Subsidiaries (as defined in the Securities
Purchase Agreement), (ii) after the same is prepared and filed with the SEC, one (1) copy of each Registration Statement and
any amendment(s) and supplement(s) thereto, including, without limitation, financial statements and schedules, all documents incorporated
therein by reference, if requested by an Investor, and all exhibits and (iii) upon the effectiveness of each Registration
Statement, one (1) copy of the prospectus included in such Registration Statement and all amendments and supplements thereto. The
Company shall reasonably cooperate with legal counsel for the Investor in performing the Company’s obligations pursuant to
this Section 3.


 


(d) 
The Company shall promptly furnish to each Investor whose Registrable Securities are included in any Registration Statement,
without charge and promptly at the Investor’s request, (i) after the same is prepared and filed with the SEC, at least one
(1) copy of each Registration Statement and any amendment(s) and supplement(s) thereto, including, without limitation, financial
statements and schedules, all documents incorporated therein by reference, if requested by an Investor, all exhibits and each preliminary
prospectus, (ii) upon the effectiveness of each Registration Statement, ten (10) copies of the prospectus included in such
Registration Statement and all amendments and supplements thereto (or such other number of copies as such Investor may reasonably
request from time to time) and (iii) such other documents, including, without limitation, copies of any preliminary or final prospectus,
as such Investor may reasonably request from time to time in order to facilitate the disposition of the Registrable Securities
owned by such Investor.


 


(e) 
The Company shall use its best efforts to (i) register and qualify, unless an exemption from registration and qualification
applies, the resale by Investors of the Registrable Securities covered by a Registration Statement under such other securities
or “blue sky” laws of all applicable jurisdictions in the United States, (ii) prepare and file in those jurisdictions,
such amendments (including, without limitation, post-effective amendments) and supplements to such registrations and qualifications
as may be necessary to maintain the effectiveness thereof during the Registration Period, (iii) take such other actions as may
be necessary to maintain such registrations and qualifications in effect at all times during the Registration Period, and (iv)
take all other actions reasonably necessary or advisable to qualify the Registrable Securities for sale in such jurisdictions;
provided, however, the Company shall not be required in connection therewith or as a condition thereto to (x) qualify to do business
in any jurisdiction where it would not otherwise be required to qualify but for this Section 3(e), (y) subject itself to general
taxation in any such jurisdiction, or (z) file a general consent to service of process in any such jurisdiction. The Company shall
promptly notify Legal Counsel, legal counsel for each other Investor and each Investor who holds Registrable Securities of the
receipt by the Company of any notification with respect to the suspension of the registration or qualification of any of the Registrable
Securities for sale under the securities or “blue sky” laws of any jurisdiction in the United States or its receipt
of actual notice of the initiation or threatening of any proceeding for such purpose.


 






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(f) 
The Company shall notify Legal Counsel, legal counsel for each other Investor and each Investor in writing of the happening
of any event, as promptly as practicable after becoming aware of such event, as a result of which the prospectus included in a
Registration Statement, as then in effect, may include an untrue statement of a material fact or omission to state a 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 (provided that in no event shall such notice contain any material, non-public information regarding the Company
or any of its Subsidiaries), and, subject to Section 3(r), promptly prepare a supplement or amendment to such Registration
Statement and such prospectus contained therein to correct such untrue statement or omission and upon request deliver ten (10)
copies of such supplement or amendment to Legal Counsel, legal counsel for each other Investor and each Investor (or such other
number of copies as Legal Counsel, legal counsel for each other Investor or such Investor may reasonably request). The Company
shall also promptly notify Legal Counsel, legal counsel for each other Investor and each Investor in writing (i) when a prospectus
or any prospectus supplement or post-effective amendment has been filed, when a Registration Statement or any post-effective amendment
has become effective (notification of such effectiveness shall be delivered to Legal Counsel, legal counsel for each other Investor
and each Investor by facsimile or e-mail on the same day of such effectiveness and by overnight mail), and when the Company receives
written notice from the SEC that a Registration Statement or any post-effective amendment will be reviewed by the SEC, (ii) of
any request by the SEC for amendments or supplements to a Registration Statement or related prospectus or related information,
(iii) of the Company’s reasonable determination that a post-effective amendment to a Registration Statement would be appropriate;
and (iv) of the receipt of any request by the SEC or any other federal or state governmental authority for any additional information
relating to the Registration Statement or any amendment or supplement thereto or any related prospectus. The Company shall respond
as promptly as practicable to any comments received from the SEC with respect to each Registration Statement or any amendment thereto
(it being understood and agreed that the Company’s response to any such comments shall be delivered to the SEC no later than
fifteen (15) Business Days after the receipt thereof).


 


(g) 
The Company shall (i) use its best efforts to prevent the issuance of any stop order or other suspension of effectiveness
of each Registration Statement or the use of any prospectus contained therein, or the suspension of the qualification, or the loss
of an exemption from qualification, of any of the Registrable Securities for sale in any jurisdiction and, if such an order or
suspension is issued, to obtain the withdrawal of such order or suspension at the earliest possible moment and (ii) notify Legal
Counsel, legal counsel for each other Investor and each Investor who holds Registrable Securities of the issuance of such order
and the resolution thereof or its receipt of actual notice of the initiation or threat of any proceeding for such purpose.


 


(h) 
If any Investor may be required under applicable securities law to be described in any Registration Statement as an underwriter
and such Investor consents to so being named an underwriter, at the request of any Investor, the Company shall furnish to such
Investor, on the date of the effectiveness of such Registration Statement and thereafter from time to time on such dates as an
Investor may reasonably request (i) a letter, dated such date, from the Company’s independent certified public accountants
in form and substance as is customarily given by independent certified public accountants to underwriters in an underwritten public
offering, addressed to the Investors, and (ii) an opinion, dated as of such date, of counsel representing the Company for purposes
of such Registration Statement, in form, scope and substance as is customarily given in an underwritten public offering, addressed
to the Investors.


 


(i) 
If any Investor may be required under applicable securities law to be described in any Registration Statement as an underwriter
and such Investor consents to so being named an underwriter, upon the written request of such Investor, the Company shall make
available for inspection by (i) such Investor, (ii) legal counsel for such Investor and (iii) one (1) firm of accountants or other
agents retained by such Investor (collectively, the “Inspectors”), all pertinent financial and other records,
and pertinent corporate documents and properties of the Company (collectively, the “Records”), as shall be reasonably
deemed necessary by each Inspector, and cause the Company’s officers, directors and employees to supply all information which
any Inspector may reasonably request; provided, however, each Inspector shall agree in writing to hold in strict confidence and
not to make any disclosure (except to such Investor) or use of any Record or other information which the Company’s board
of directors determines in good faith to be confidential, and of which determination the Inspectors are so notified, unless (1)
the disclosure of such Records is necessary to avoid or correct a misstatement or omission in any Registration Statement or is
otherwise required under the 1933 Act, (2) the release of such Records is ordered pursuant to a final, non-appealable subpoena
or order from a court or government body of competent jurisdiction, or (3) the information in such Records has been made generally
available to the public other than by disclosure in violation of this Agreement or any other Transaction Document (as defined in
the Securities Purchase Agreement). Such Investor agrees that it shall, upon learning that disclosure of such Records is sought
in or by a court or governmental body of competent jurisdiction or through other means, give prompt notice to the Company and allow
the Company, at its expense, to undertake appropriate action to prevent disclosure of, or to obtain a protective order for, the
Records deemed confidential. Nothing herein (or in any other confidentiality agreement between the Company and such Investor, if
any) shall be deemed to limit any Investor’s ability to sell Registrable Securities in a manner which is otherwise consistent
with applicable laws and regulations.


 






    7


     


    

 


(j) 
The Company shall hold in confidence and not make any disclosure of information concerning an Investor provided to the Company
unless (i) disclosure of such information is necessary to comply with federal or state securities laws, (ii) the disclosure of
such information is necessary to avoid or correct a misstatement or omission in any Registration Statement or is otherwise required
to be disclosed in such Registration Statement pursuant to the 1933 Act, (iii) the release of such information is ordered pursuant
to a subpoena or other final, non-appealable order from a court or governmental body of competent jurisdiction, or (iv) such information
has been made generally available to the public other than by disclosure in violation of this Agreement or any other Transaction
Document. The Company agrees that it shall, upon learning that disclosure of such information concerning an Investor is sought
in or by a court or governmental body of competent jurisdiction or through other means, give prompt written notice to such Investor
and allow such Investor, at such Investor’s expense, to undertake appropriate action to prevent disclosure of, or to obtain
a protective order for, such information.


 


(k) 
Without limiting any obligation of the Company under the Securities Purchase Agreement, the Company shall use its best efforts
either to (i) cause all of the Registrable Securities covered by each Registration Statement to be listed on each securities exchange
on which securities of the same class or series issued by the Company are then listed, if any, if the listing of such Registrable
Securities is then permitted under the rules of such exchange, (ii) secure designation and quotation of all of the Registrable
Securities covered by each Registration Statement on an Eligible Market (as defined in the Securities Purchase Agreement), or (iii)
if, despite the Company’s best efforts to satisfy the preceding clauses (i) or (ii) the Company is unsuccessful in satisfying
the preceding clauses (i) or (ii), without limiting the generality of the foregoing, to use its best efforts to arrange for at
least two market makers to register with the Financial Industry Regulatory Authority (“FINRA”) as such with
respect to such Registrable Securities. In addition, the Company shall cooperate with each Investor and any broker or dealer through
which any such Investor proposes to sell its Registrable Securities in effecting a filing with FINRA pursuant to FINRA Rule 5110
as requested by such Investor. The Company shall pay all fees and expenses in connection with satisfying its obligations under
this Section 3(k).


 


(l) 
The Company shall cooperate with the Investors who hold Registrable Securities being offered and, to the extent applicable,
facilitate the timely preparation and delivery of certificates (not bearing any restrictive legend) representing the Registrable
Securities to be offered pursuant to a Registration Statement and enable such certificates to be in such denominations or amounts
(as the case may be) as the Investors may reasonably request from time to time and registered in such names as the Investors may
request.


 


(m) 
If requested by an Investor, the Company shall as soon as practicable after receipt of notice from such Investor and subject
to Section 3(r) hereof, (i) incorporate in a prospectus supplement or post-effective amendment such information as an Investor
reasonably requests to be included therein relating to the sale and distribution of Registrable Securities, including, without
limitation, information with respect to the number of Registrable Securities being offered or sold, the purchase price being paid
therefor and any other terms of the offering of the Registrable Securities to be sold in such offering; (ii) make all required
filings of such prospectus supplement or post-effective amendment after being notified of the matters to be incorporated in such
prospectus supplement or post-effective amendment; and (iii) supplement or make amendments to any Registration Statement or prospectus
contained therein if reasonably requested by an Investor holding any Registrable Securities.


 


(n) 
The Company shall use its best efforts to cause the Registrable Securities covered by a Registration Statement to be registered
with or approved by such other governmental agencies or authorities as may be necessary to consummate the disposition of such Registrable
Securities.


 






    8


     


    

 


(o) 
The Company shall make generally available to its security holders as soon as practical, but not later than ninety (90)
days after the close of the period covered thereby, an earnings statement (in form complying with, and in the manner provided by,
the provisions of Rule 158 under the 1933 Act) covering a twelve-month period beginning not later than the first day of the
Company’s fiscal quarter next following the applicable Effective Date of each Registration Statement.


 


(p) 
The Company shall otherwise use its best efforts to comply with all applicable rules and regulations of the SEC in connection
with any registration hereunder.


 


(q) 
Within one (1) Business Day after a Registration Statement which covers Registrable Securities is declared effective by
the SEC, the Company shall deliver, and shall cause legal counsel for the Company to deliver, to the transfer agent for such Registrable
Securities (with copies to the Investors whose Registrable Securities are included in such Registration Statement) confirmation
that such Registration Statement has been declared effective by the SEC.


 


(r) 
Notwithstanding anything to the contrary herein (but subject to the last sentence of this Section 3(r)), at any time
after the Effective Date of a particular Registration Statement, the Company may delay the disclosure of material, non-public information
concerning the Company or any of its Subsidiaries the disclosure of which at the time is not, in the good faith opinion of the
board of directors of the Company, in the best interest of the Company and, in the opinion of counsel to the Company, otherwise
required (a “Grace Period”), provided that the Company shall promptly notify the Investors in writing of the
(i) existence of material, non-public information giving rise to a Grace Period (provided that in each such notice the Company
shall not disclose the content of such material, non-public information to any of the Investors) and the date on which such Grace
Period will begin and (ii) date on which such Grace Period ends, provided further that (I) no Grace Period shall exceed ten
(10) consecutive days and during any three hundred sixty five (365) day period all such Grace Periods shall not exceed an aggregate
of thirty (30) days, (II) the first day of any Grace Period must be at least five (5) Trading Days after the last day of any
prior Grace Period and (III) no Grace Period may exist during the sixty (60) Trading Day period immediately following the Effective
Date of such Registration Statement (provided that such sixty (60) Trading Day period shall be extended by the number of Trading
Days during such period and any extension thereof contemplated by this proviso during which such Registration Statement is not
effective or the prospectus contained therein is not available for use) (each, an “Allowable Grace Period”).
For purposes of determining the length of a Grace Period above, such Grace Period shall begin on and include the date the Investors
receive the notice referred to in clause (i) above and shall end on and include the later of the date the Investors receive the
notice referred to in clause (ii) above and the date referred to in such notice. The provisions of Section 3(g) hereof shall
not be applicable during the period of any Allowable Grace Period. Upon expiration of each Grace Period, the Company shall again
be bound by the first sentence of Section 3(f) with respect to the information giving rise thereto unless such material, non-public
information is no longer applicable. Notwithstanding anything to the contrary contained in this Section 3(r), the Company
shall cause its transfer agent to deliver unlegended shares of Common Stock to a transferee of an Investor in accordance with the
terms of the Securities Purchase Agreement in connection with any sale of Registrable Securities with respect to which such Investor
has entered into a contract for sale, and delivered a copy of the prospectus included as part of the particular Registration Statement
to the extent applicable, prior to such Investor’s receipt of the notice of a Grace Period and for which the Investor has
not yet settled.


 


(s) 
The Company shall take all other reasonable actions necessary to expedite and facilitate disposition by each Investors of
its Registrable Securities pursuant to each Registration Statement.


 


(t) 
Neither the Company nor any Subsidiary or affiliate thereof shall identify any Investor as an underwriter in any public
disclosure or filing with the SEC, the Principal Market or any Eligible Market without the Investor’s consent and any Investor
being deemed an underwriter by the SEC shall not relieve the Company of any obligations it has under this Agreement or any other
Transaction Document (as defined in the Securities Purchase Agreement), except to the extent the Investor fails to so consent;
provided, however, that the foregoing shall not prohibit the Company from including the disclosure found in the "Plan of Distribution"
section attached hereto as Exhibit B in the Registration Statement.


 


(u) 
Neither the Company nor any of its Subsidiaries has entered, as of the date hereof, nor shall the Company or any of its
Subsidiaries, on or after the date of this Agreement, enter into any agreement with respect to its securities, that would have
the effect of impairing the rights granted to the Investors in this Agreement or otherwise conflicts with the provisions hereof.


 






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4. 
Obligations of the Investors.


 


(a) 
At least five (5) Business Days prior to the first anticipated filing date of each Registration Statement, the Company shall
notify each Investor in writing of the information the Company requires from each such Investor with respect to such Registration
Statement. It shall be a condition precedent to the obligations of the Company to timely complete the registration pursuant to
this Agreement with respect to the Registrable Securities of a particular Investor that such Investor shall promptly furnish to
the Company such information regarding itself, the Registrable Securities held by it and the intended method of disposition of
the Registrable Securities held by it, as shall be reasonably required to effect and maintain the effectiveness of the registration
of such Registrable Securities and shall promptly execute such documents in connection with such registration as the Company may
reasonably request.


 


(b) 
Each Investor, by such Investor’s acceptance of the Registrable Securities, agrees to cooperate with the Company as
reasonably requested by the Company in connection with the preparation and filing of each Registration Statement hereunder, unless
such Investor has notified the Company in writing of such Investor’s election to exclude all of such Investor’s Registrable
Securities from such Registration Statement.


 


(c) 
Each Investor agrees that, upon receipt of any notice from the Company of the happening of any event of the kind described
in Section 3(g) or the first sentence of 3(f), such Investor will immediately discontinue disposition of Registrable Securities
pursuant to any Registration Statement(s) covering such Registrable Securities until such Investor’s receipt of the copies
of the supplemented or amended prospectus contemplated by Section 3(g) or the first sentence of Section 3(f) or receipt
of notice that no supplement or amendment is required. Notwithstanding anything to the contrary in this Section 4(c), the
Company shall cause its transfer agent to deliver unlegended shares of Common Stock to a transferee of an Investor in accordance
with the terms of the Securities Purchase Agreement in connection with any sale of Registrable Securities with respect to which
such Investor has entered into a contract for sale prior to the Investor’s receipt of a notice from the Company of the happening
of any event of the kind described in Section 3(g) or the first sentence of Section 3(f) and for which such Investor
has not yet settled.


 


5. 
Expenses of Registration.


 


All reasonable expenses,
other than underwriting discounts and commissions, incurred in connection with registrations, filings or qualifications pursuant
to Sections 2 and 3, including, without limitation, all registration, listing and qualifications fees, printers and accounting
fees, FINRA filing fees (if any) and fees and disbursements of counsel for the Company shall be paid by the Company. The Company
shall reimburse Legal Counsel for its reasonable fees and disbursements in connection with registration and filing or qualification
pursuant to Sections 2 and 3 of this Agreement which amount shall be limited to $10,000 for each such registration and filing
or qualification.


 






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6. 
Indemnification.


 


(a) 
To the fullest extent permitted by law, the Company will, and hereby does, indemnify, hold harmless and defend each Investor
and each of its directors, officers, shareholders, members, partners, employees, agents, advisors, representatives (and any other
Persons with a functionally equivalent role of a Person holding such titles notwithstanding the lack of such title or any other
title) and each Person, if any, who controls such Investor within the meaning of the 1933 Act or the 1934 Act and each of the directors,
officers, shareholders, members, partners, employees, agents, advisors, representatives (and any other Persons with a functionally
equivalent role of a Person holding such titles notwithstanding the lack of such title or any other title) of such controlling
Persons (each, an “Indemnified Person”), against any losses, obligations, claims, damages, liabilities, contingencies,
judgments, fines, penalties, charges, costs (including, without limitation, court costs, reasonable attorneys’ fees and costs
of defense and investigation), amounts paid in settlement or expenses, joint or several, (collectively, “Claims”)
incurred in investigating, preparing or defending any action, claim, suit, inquiry, proceeding, investigation or appeal taken from
the foregoing by or before any court or governmental, administrative or other regulatory agency, body or the SEC, whether pending
or threatened, whether or not an Indemnified Person is or may be a party thereto (“Indemnified Damages”), to
which any of them may become subject insofar as such Claims (or actions or proceedings, whether commenced or threatened, in respect
thereof) arise out of or are based upon: (i) any untrue statement or alleged untrue statement of a material fact in a Registration
Statement or any post-effective amendment thereto or in any filing made in connection with the qualification of the offering under
the securities or other “blue sky” laws of any jurisdiction in which Registrable Securities are offered (“Blue
Sky Filing”), or the omission or alleged omission to state a material fact required to be stated therein or necessary
to make the statements therein not misleading, (ii) any untrue statement or alleged untrue statement of a material fact contained
in any preliminary prospectus if used prior to the effective date of such Registration Statement and contained in the final prospectus
(as amended or supplemented, if the Company files any amendment thereof or supplement thereto with the SEC) or the omission or
alleged omission to state therein any material fact necessary to make the statements made therein, in light of the circumstances
under which the statements therein were made, not misleading or (iii) any violation or alleged violation by the Company of the
1933 Act, the 1934 Act, any other law, including, without limitation, any state securities law, or any rule or regulation thereunder
relating to the offer or sale of the Registrable Securities pursuant to a Registration Statement or (iv) any violation of this
Agreement (the matters in the foregoing clauses (i) through (iv) being, collectively, “Violations”). Subject
to Section 6(c), the Company shall reimburse the Indemnified Persons, promptly as such expenses are incurred and are due and
payable, for any legal fees or other reasonable expenses incurred by them in connection with investigating or defending any such
Claim. Notwithstanding anything to the contrary contained herein, the indemnification agreement contained in this Section 6(a):
(i) shall not apply to a Claim by an Indemnified Person arising out of or based upon a Violation which occurs in reliance upon
and in conformity with information furnished in writing to the Company by such Indemnified Person for such Indemnified Person expressly
for use in connection with the preparation of such Registration Statement or any such amendment thereof or supplement thereto,
if such prospectus was timely made available by the Company pursuant to Section 3(d); and (ii) shall not apply to amounts paid
in settlement of any Claim if such settlement is effected without the prior written consent of the Company, which consent shall
not be unreasonably withheld or delayed. Such indemnity shall remain in full force and effect regardless of any investigation made
by or on behalf of the Indemnified Person and shall survive the transfer of any of the Registrable Securities by any of the Investors
pursuant to Section 9.


 


(b) 
In connection with any Registration Statement in which an Investor is participating, such Investor agrees to severally and
not jointly indemnify, hold harmless and defend, to the same extent and in the same manner as is set forth in Section 6(a),
the Company, each of its directors, each of its officers who signs the Registration Statement and each Person, if any, who controls
the Company within the meaning of the 1933 Act or the 1934 Act (each, an “Indemnified Party”), against any Claim
or Indemnified Damages to which any of them may become subject, under the 1933 Act, the 1934 Act or otherwise, insofar as such
Claim or Indemnified Damages arise out of or are based upon any Violation, in each case, to the extent, and only to the extent,
that such Violation occurs in reliance upon and in conformity with written information furnished to the Company by such Investor
expressly for use in connection with such Registration Statement; and, subject to Section 6(c) and the below provisos in this
Section 6(b), such Investor will reimburse an Indemnified Party any legal or other expenses reasonably incurred by such Indemnified
Party in connection with investigating or defending any such Claim; provided, however, the indemnity agreement contained in this
Section 6(b) and the agreement with respect to contribution contained in Section 7 shall not apply to amounts paid in
settlement of any Claim if such settlement is effected without the prior written consent of such Investor, which consent shall
not be unreasonably withheld or delayed, provided further that such Investor shall be liable under this Section 6(b) for only
that amount of a Claim or Indemnified Damages as does not exceed the net proceeds to such Investor as a result of the applicable
sale of Registrable Securities pursuant to such Registration Statement. Such indemnity shall remain in full force and effect regardless
of any investigation made by or on behalf of such Indemnified Party and shall survive the transfer of any of the Registrable Securities
by any of the Investors pursuant to Section 9.


 






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(c) 
Promptly after receipt by an Indemnified Person or Indemnified Party (as the case may be) under this Section 6 of notice
of the commencement of any action or proceeding (including, without limitation, any governmental action or proceeding) involving
a Claim, such Indemnified Person or Indemnified Party (as the case may be) shall, if a Claim in respect thereof is to be made against
any indemnifying party under this Section 6, deliver to the indemnifying party a written notice of the commencement thereof,
and the indemnifying party shall have the right to participate in, and, to the extent the indemnifying party so desires, jointly
with any other indemnifying party similarly noticed, to assume control of the defense thereof with counsel mutually satisfactory
to the indemnifying party and the Indemnified Person or the Indemnified Party (as the case may be); provided, however, an Indemnified
Person or Indemnified Party (as the case may be) shall have the right to retain its own counsel with the fees and expenses of such
counsel to be paid by the indemnifying party if: (i) the indemnifying party has agreed in writing to pay such fees and expenses;
(ii) the indemnifying party shall have failed promptly to assume the defense of such Claim and to employ counsel reasonably satisfactory
to such Indemnified Person or Indemnified Party (as the case may be) in any such Claim; or (iii) the named parties to any such
Claim (including, without limitation, any impleaded parties) include both such Indemnified Person or Indemnified Party (as the
case may be) and the indemnifying party, and such Indemnified Person or such Indemnified Party (as the case may be) shall have
been advised by counsel that a conflict of interest is likely to exist if the same counsel were to represent such Indemnified Person
or such Indemnified Party and the indemnifying party (in which case, if such Indemnified Person or such Indemnified Party (as the
case may be) notifies the indemnifying party in writing that it elects to employ separate counsel at the expense of the indemnifying
party, then the indemnifying party shall not have the right to assume the defense thereof and such counsel shall be at the expense
of the indemnifying party, provided further that in the case of clause (iii) above the indemnifying party shall not be responsible
for the reasonable fees and expenses of more than one (1) separate legal counsel for such Indemnified Person or Indemnified Party
(as the case may be). The Indemnified Party or Indemnified Person (as the case may be) shall reasonably cooperate with the indemnifying
party in connection with any negotiation or defense of any such action or Claim by the indemnifying party and shall furnish to
the indemnifying party all information reasonably available to the Indemnified Party or Indemnified Person (as the case may be)
which relates to such action or Claim. The indemnifying party shall keep the Indemnified Party or Indemnified Person (as the case
may be) reasonably apprised at all times as to the status of the defense or any settlement negotiations with respect thereto. No
indemnifying party shall be liable for any settlement of any action, claim or proceeding effected without its prior written consent;
provided, however, the indemnifying party shall not unreasonably withhold, delay or condition its consent. No indemnifying party
shall, without the prior written consent of the Indemnified Party or Indemnified Person (as the case may be), consent to entry
of any judgment or enter into any settlement or other compromise which does not include as an unconditional term thereof the giving
by the claimant or plaintiff to such Indemnified Party or Indemnified Person (as the case may be) of a release from all liability
in respect to such Claim or litigation, and such settlement shall not include any admission as to fault on the part of the Indemnified
Party. Following indemnification as provided for hereunder, the indemnifying party shall be subrogated to all rights of the Indemnified
Party or Indemnified Person (as the case may be) with respect to all third parties, firms or corporations relating to the matter
for which indemnification has been made. The failure to deliver written notice to the indemnifying party within a reasonable time
of the commencement of any such action shall not relieve such indemnifying party of any liability to the Indemnified Person or
Indemnified Party (as the case may be) under this Section 6, except to the extent that the indemnifying party is materially
and adversely prejudiced in its ability to defend such action.


 


(d) 
The indemnification required by this Section 6 shall be made by periodic payments of the amount thereof during the
course of the investigation or defense, as and when bills are received or Indemnified Damages are incurred.


 


(e) 
The indemnity and contribution agreements contained herein shall be in addition to (i) any cause of action or similar right
of the Indemnified Party or Indemnified Person against the indemnifying party or others, and (ii) any liabilities the indemnifying
party may be subject to pursuant to the law.


 


7. 
Contribution.


 


To the extent any indemnification
by an indemnifying party is prohibited or limited by law, the indemnifying party agrees to make the maximum contribution with respect
to any amounts for which it would otherwise be liable under Section 6 to the fullest extent permitted by law; provided, however:
(i) no contribution shall be made under circumstances where the maker would not have been liable for indemnification under the
fault standards set forth in Section 6 of this Agreement, (ii) no Person involved in the sale of Registrable Securities which
Person is guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the 1933 Act) in connection with such
sale shall be entitled to contribution from any Person involved in such sale of Registrable Securities who was not guilty of fraudulent
misrepresentation; and (iii) contribution by any seller of Registrable Securities shall be limited in amount to the amount
of net proceeds received by such seller from the applicable sale of such Registrable Securities pursuant to such Registration Statement.
Notwithstanding the provisions of this Section 7, no Investor shall be required to contribute, in the aggregate, any amount
in excess of the amount by which the net proceeds actually received by such Investor from the applicable sale of the Registrable
Securities subject to the Claim exceeds the amount of any damages that such Investor has otherwise been required to pay, or would
otherwise be required to pay under Section 6(b), by reason of such untrue or alleged untrue statement or omission or alleged
omission.


 






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8. 
Reports Under the 1934 Act.


 


With a view to making
available to the Investors the benefits of Rule 144, the Company agrees to:


 


(a) 
make and keep public information available, as those terms are understood and defined in Rule 144;


 


(b) 
file with the SEC in a timely manner all reports and other documents required of the Company under the 1933 Act and the
1934 Act so long as the Company remains subject to such requirements (it being understood and agreed that nothing herein shall
limit any obligations of the Company under the Securities Purchase Agreement) and the filing of such reports and other documents
is required for the applicable provisions of Rule 144; and


 


(c) 
furnish to each Investor so long as such Investor owns Registrable Securities, promptly upon request, (i) a written statement
by the Company, if true, that it has complied with the reporting, submission and posting requirements of Rule 144, the 1933 Act
and the 1934 Act, (ii) a copy of the most recent annual or quarterly report of the Company and such other reports and documents
so filed by the Company with the SEC if such reports are not publicly available via EDGAR, and (iii) such other information
as may be reasonably requested to permit the Investors to sell such securities pursuant to Rule 144 without registration.


 


9. 
Assignment of Registration Rights.


 


All or any portion
of the rights under this Agreement shall be automatically assignable by each Investor to any transferee or assignee (as the case
may be) of all or any portion of such Investor’s Registrable Securities or Warrants if: (i) such Investor agrees in writing
with such transferee or assignee (as the case may be) to assign all or any portion of such rights, and a copy of such agreement
is furnished to the Company within a reasonable time after such transfer or assignment (as the case may be); (ii) the Company is,
within a reasonable time after such transfer or assignment (as the case may be), furnished with written notice of (a) the name
and address of such transferee or assignee (as the case may be), and (b) the securities with respect to which such registration
rights are being transferred or assigned (as the case may be); (iii) immediately following such transfer or assignment (as
the case may be) the further disposition of such securities by such transferee or assignee (as the case may be) is restricted under
the 1933 Act or applicable state securities laws if so required; (iv) at or before the time the Company receives the written notice
contemplated by clause (ii) of this sentence such transferee or assignee (as the case may be) agrees in writing with the Company
to be bound by all of the provisions contained herein; (v) such transfer or assignment (as the case may be) shall have been made
in accordance with the applicable requirements of the Securities Purchase Agreement and the Warrants (as the case may be); and
(vi) such transfer or assignment (as the case may be) shall have been conducted in accordance with all applicable federal and state
securities laws.


 


10. 
Amendment of Registration Rights.


 


Provisions
of this Agreement may be amended and the observance thereof may be waived (either generally or in a particular instance and either
retroactively or prospectively), only with the written consent of the Company and the Required Holders; provided that any such
amendment or waiver that complies with the foregoing, but that disproportionately, materially and adversely affects the rights
and obligations of any Investor relative to the comparable rights and obligations of the other Investors shall require the prior
written consent of such adversely affected Investor. Any amendment or waiver effected in accordance with this Section 10 shall
be binding upon each Investor and the Company, provided that no such amendment shall be effective to the extent that it (1) applies
to less than all of the holders of Registrable Securities or (2) imposes any obligation or liability on any Investor without such
Investor’s prior written consent (which may be granted or withheld in such Investor’s sole discretion). No waiver shall
be effective unless it is in writing and signed by an authorized representative of the waiving party. No consideration shall be
offered or paid to any Person to amend or consent to a waiver or modification of any provision of this Agreement unless the same
consideration (other than the reimbursement of legal fees) also is offered to all of the parties to this Agreement.


 






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11. 
Miscellaneous.


 


(a) 
Solely for purposes of this Agreement, a Person is deemed to be a holder of Registrable Securities whenever such Person
owns, or is deemed to own, of record such Registrable Securities. If the Company receives conflicting instructions, notices or
elections from two or more Persons with respect to the same Registrable Securities, the Company shall act upon the basis of instructions,
notice or election received from such record owner of such Registrable Securities.


 


(b) 
Any notices, consents, waivers or other communications required or permitted to be given under the terms of this Agreement
must be in writing and will be deemed to have been delivered: (i) upon receipt, when delivered personally; (ii) upon receipt, when
sent by facsimile (provided confirmation of transmission is mechanically or electronically generated and kept on file by the sending
party) or electronic mail (provided that such sent email is kept on file (whether electronically or otherwise) by the sending party
and the sending party does not receive an automatically generated message from the recipient's email server that such e-mail could
not be delivered to such recipient); or (iii) one (1) Business Day after deposit with a nationally recognized overnight delivery
service with next day delivery specified, in each case, properly addressed to the party to receive the same. The addresses, facsimile
numbers and email addresses for such communications shall be:


 


If to the Company:


 


Pacific Ethanol, Inc..

400 Capitol Mall, Suite 2060

Sacramento, California 95814

Telephone: (916) 403-2123

Attention: Chief Executive OfficerWith a copy (for informational purposes only) to:


 


Troutman Pepper Hamilton Sanders LLP

5 Park Plaza, Suite 1400

Irvine, California 92614

Telephone: (949) 622-2700

Attention: Larry A. Cerutti, Esq.

Email: Larry.Cerutti@Troutman.com


 


If to the Transfer Agent:


 


American Stock Transfer & Trust Company,
LLC

6201 15th Avenue

Brooklyn, New York 11219

Telephone: (212) 936-5100

Facsimile: (718) 765-8719


Attention: Felix Orihuela and William TorreIf to a Buyer, to its address, facsimile number and/or email address set forth on the
Schedule of Buyers attached to the Securities Purchase Agreement, with copies to such Buyer’s representatives as set forth
on the Schedule of Buyers, or to such other address, facsimile number, and/or email address and/or to the attention of such other
Person as the recipient party has specified by written notice given to each other party five (5) days prior to the effectiveness
of such change


  


(c) 
Failure of any party to exercise any right or remedy under this Agreement or otherwise, or delay by a party in exercising
such right or remedy, shall not operate as a waiver thereof. The Company and each Investor acknowledge and agree that irreparable
damage would occur in the event that any of the provisions of this Agreement were not performed in accordance with their specific
terms or were otherwise breached. It is accordingly agreed that each party hereto shall be entitled to an injunction or injunctions
to prevent or cure breaches of the provisions of this Agreement by any other party hereto and to enforce specifically the terms
and provisions hereof (without the necessity of showing economic loss and without any bond or other security being required), this
being in addition to any other remedy to which any party may be entitled by law or equity.


 






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(d) 
All questions concerning the construction, validity, enforcement and interpretation of this Agreement shall be governed
by the internal laws of the State of New York, without giving effect to any choice of law or conflict of law provision or rule
(whether of the State of New York or any other jurisdictions) that would cause the application of the laws of any jurisdictions
other than the State of New York. Each party hereby irrevocably submits to the 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 herewith
or with any transaction contemplated hereby or discussed herein, 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 to such party at the address for such 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. EACH PARTY HEREBY IRREVOCABLY WAIVES ANY RIGHT IT MAY HAVE TO,
AND AGREES NOT TO REQUEST, A JURY TRIAL FOR THE ADJUDICATION OF ANY DISPUTE HEREUNDER OR IN CONNECTION HEREWITH OR ARISING OUT
OF THIS AGREEMENT OR ANY TRANSACTION CONTEMPLATED HEREBY.


 


(e) 
If any provision of this Agreement is prohibited by law or otherwise determined to be invalid or unenforceable by a court
of competent jurisdiction, the provision that would otherwise be prohibited, invalid or unenforceable shall be deemed amended to
apply to the broadest extent that it would be valid and enforceable, and the invalidity or unenforceability of such provision shall
not affect the validity of the remaining provisions of this Agreement so long as this Agreement as so modified continues to express,
without material change, the original intentions of the parties as to the subject matter hereof and the prohibited nature, invalidity
or unenforceability of the provision(s) in question does not substantially impair the respective expectations or reciprocal obligations
of the parties or the practical realization of the benefits that would otherwise be conferred upon the parties. The parties will
endeavor in good faith negotiations to replace the prohibited, invalid or unenforceable provision(s) with a valid provision(s),
the effect of which comes as close as possible to that of the prohibited, invalid or unenforceable provision(s).


 


(f) 
This Agreement, the other Transaction Documents, the schedules and exhibits attached hereto and thereto and the instruments
referenced herein and therein constitute the entire agreement among the parties hereto and thereto solely with respect to the subject
matter hereof and thereof. There are no restrictions, promises, warranties or undertakings, other than those set forth or referred
to herein and therein. This Agreement, the other Transaction Documents, the schedules and exhibits attached hereto and thereto
and the instruments referenced herein and therein supersede all prior agreements and understandings among the parties hereto solely
with respect to the subject matter hereof and thereof; provided, however, nothing contained in this Agreement or any other Transaction
Document shall (or shall be deemed to) (i) have any effect on any agreements any Investor has entered into with the Company or
any of its Subsidiaries prior to the date hereof with respect to any prior investment made by such Investor in the Company, (ii)
waive, alter, modify or amend in any respect any obligations of the Company or any of its Subsidiaries or any rights of or benefits
to any Investor or any other Person in any agreement entered into prior to the date hereof between or among the Company and/or
any of its Subsidiaries and any Investor and all such agreements shall continue in full force and effect or (iii) limit any obligations
of the Company under any of the other Transaction Documents.


 


(g) 
Subject to compliance with Section 9 (if applicable), this Agreement shall inure to the benefit of and be binding upon
the permitted successors and assigns of each of the parties hereto. This Agreement is not for the benefit of, nor may any provision
hereof be enforced by, any Person, other than the parties hereto, their respective permitted successors and assigns and the Persons
referred to in Sections 6 and 7 hereof.


 


(h) 
The headings in this Agreement are for convenience of reference only and shall not limit or otherwise affect the meaning
hereof. Unless the context clearly indicates otherwise, each pronoun herein shall be deemed to include the masculine, feminine,
neuter, singular and plural forms thereof. The terms “including,” “includes,” “include” and
words of like import shall be construed broadly as if followed by the words “without limitation.” The terms “herein,”
“hereunder,” “hereof” and words of like import refer to this entire Agreement instead of just the provision
in which they are found.


 






    15


     


    

 


(i) 
This Agreement may be executed in two or more identical counterparts, each of which shall be deemed an original, but all
of which shall be considered one and the same agreement and shall become effective when counterparts have been signed by each party
and delivered to the other party. In the event that any signature is delivered by facsimile transmission or by an email which contains
a portable document format (.pdf) file of an executed signature page, such signature page shall create a valid and binding obligation
of the party executing (or on whose behalf such signature is executed) with the same force and effect as if such signature page
were an original thereof.


 


(j) 
Each party shall do and perform, or cause to be done and performed, all such further acts and things, and shall execute
and deliver all such other agreements, certificates, instruments and documents as any other party may reasonably request in order
to carry out the intent and accomplish the purposes of this Agreement and the consummation of the transactions contemplated hereby.


 


(k) 
The language used in this Agreement will be deemed to be the language chosen by the parties to express their mutual intent
and no rules of strict construction will be applied against any party. Notwithstanding anything to the contrary set forth in Section
10, terms used in this Agreement but defined in the other Transaction Documents shall have the meanings ascribed to such terms
on the Closing Date in such other Transaction Documents unless otherwise consented to in writing by each Investor.


 


(l) 
All consents and other determinations required to be made by the Investors pursuant to this Agreement shall be made, unless
otherwise specified in this Agreement, by the Required Holders, determined as if all of the outstanding Warrants then held by the
Investors have been converted for Registrable Securities without regard to any limitations on redemption, amortization and/or Warrant
of the Warrants then held by Investors.


 


(m) 
This Agreement is intended for the benefit of the parties hereto and their respective permitted successors and assigns,
and is not for the benefit of, nor may any provision hereof be enforced by, any other Person.


 


(n) 
The obligations of each Investor under this Agreement and the other Transaction Documents are several and not joint with
the obligations of any other Investor, and no Investor shall be responsible in any way for the performance of the obligations of
any other Investor under this Agreement or any other Transaction Document. Nothing contained herein or in any other Transaction
Document, and no action taken by any Investor pursuant hereto or thereto, shall be deemed to constitute the Investors as, and the
Company acknowledges that the Investors do not so constitute, a partnership, an association, a joint venture or any other kind
of group or entity, or create a presumption that the Investors are in any way acting in concert or as a group or entity with respect
to such obligations or the transactions contemplated by the Transaction Documents or any matters, and the Company acknowledges
that the Investors are not acting in concert or as a group, and the Company shall not assert any such claim, with respect to such
obligations or the transactions contemplated by this Agreement or any of the other the Transaction Documents. Each Investor shall
be entitled to independently protect and enforce its rights, including, without limitation, the rights arising out of this Agreement
or out of any other Transaction Documents, and it shall not be necessary for any other Investor to be joined as an additional party
in any proceeding for such purpose. The use of a single agreement with respect to the obligations of the Company contained herein
was solely in the control of the Company, not the action or decision of any Investor, and was done solely for the convenience of
the Company and not because it was required or requested to do so by any Investor. It is expressly understood and agreed that each
provision contained in this Agreement and in each other Transaction Document is between the Company and an Investor, solely, and
not between the Company and the Investors collectively and not between and among Investors.


 


[signature page follows]


 




    16


     


    

 





IN WITNESS WHEREOF, each Buyer and
the Company have caused their respective signature page to this Registration Rights Agreement to be duly executed as of the date
first written above.


  


	 	COMPANY:
	 	 
	 	PACIFIC ETHANOL, INC.
	 	 	 
	 	By:	 
	 	 	Name:
	 	 	Title:


  




    


     


    

 


IN WITNESS WHEREOF, each Buyer and
the Company have caused their respective signature page to this Registration Rights Agreement to be duly executed as of the date
first written above.


 


	 	BUYERS:
	 	 
	 	CVI Investments, Inc.
	 	 	 
	 	By:	 
	 	 	Name:
	 	 	Title:


 




    


     


    

 


EXHIBIT A


 


SELLING STOCKHOLDERS


 


The shares of common
stock being offered by the selling stockholders are those issuable to the selling stockholders upon exercise of the Warrants. For
additional information regarding the issuance of the Warrants, see “Private Placement of Warrants” above. We are registering
the shares of common stock in order to permit the selling stockholders to offer the shares for resale from time to time. Except
for the ownership of the Warrants issued pursuant to the Securities Purchase Agreement [and a related offering], the selling stockholders
have not had any material relationship with us within the past three years.


 


The table below lists
the selling stockholders and other information regarding the beneficial ownership (as determined under Section 13(d) of the Securities
Exchange Act of 1934, as amended, and the rules and regulations thereunder) of the shares of common stock held by each of the selling
stockholders. The second column lists the number of shares of common stock beneficially owned by the selling stockholders, based
on their respective ownership of shares of common stock, as of ________, 2020, assuming exercise of the Warrants held by each such
selling stockholder on that date but taking account of any limitations on exercise set forth therein.


 


The third column lists
the shares of common stock being offered by this prospectus by the selling stockholders and does not take in account any limitations
on exercise of the Warrants set forth therein.


 


In accordance with
the terms of a registration rights agreement with the holders of the Warrants, this prospectus generally covers the resale of 100%
of the maximum number of shares of common stock issued or issuable pursuant to the Warrants, determined as if the outstanding Warrants
were exercised in full (without regard to any limitations on exercise contained therein solely for the purpose of such calculation).
The fourth column assumes the sale of all of the shares offered by the selling stockholders pursuant to this prospectus.


 


Under the terms of
the Warrants, a selling stockholder may not convert the Warrants to the extent (but only to the extent) such selling stockholder
or any of its affiliates would beneficially own a number of shares of our common stock which would exceed [4.99/9.99]% of the outstanding
shares of the Company. The number of shares in the second column reflects these limitations. The selling stockholders may sell
all, some or none of their shares in this offering. See “Plan of Distribution.”


 


	Name of Selling Stockholder	 	Number of Shares of Common Stock Owned Prior to Offering	 	Maximum Number of Shares of Common Stock to be Sold Pursuant to this Prospectus	 	Number of Shares of Common Stock of Owned After Offering
	CVI Investments, Inc. (1)	 	 	 	 	 	 
	 	 	 	 	 	 	 



 


		(1)	[              ]



  




    


     


    

 


PLAN OF DISTRIBUTION


 


We are registering
the shares of common stock issuable upon Warrant of the Warrants to permit the resale of these shares of common stock by the holders
of the Warrants from time to time after the date of this prospectus. We will not receive any of the proceeds from the sale by the
selling stockholders of the shares of common stock. We will bear all fees and expenses incident to our obligation to register the
shares of common stock.


 


The selling stockholders
may sell all or a portion of the shares of common stock held by them and offered hereby from time to time directly or through one
or more underwriters, broker-dealers or agents. If the shares of common stock are sold through underwriters or broker-dealers,
the selling stockholders will be responsible for underwriting discounts or commissions or agent’s commissions. The shares
of common stock may be sold in one or more transactions at fixed prices, at prevailing market prices at the time of the sale, at
varying prices determined at the time of sale or at negotiated prices. These sales may be effected in transactions, which may involve
crosses or block transactions, pursuant to one or more of the following methods:


 


		·	on any national securities exchange or quotation service on which the securities may be listed
or quoted at the time of sale;



 


		·	in the over-the-counter market;



 


		·	in transactions otherwise than on these exchanges or systems or in the over-the-counter market;



 


		·	through the writing or settlement of options, whether such options are listed on an options exchange
or otherwise;



 


		·	ordinary brokerage transactions and transactions in which the broker-dealer solicits purchasers;



 


		·	block trades in which the broker-dealer will attempt to sell the shares as agent but may position
and resell a portion of the block as principal to facilitate the transaction;



 


		·	purchases by a broker-dealer as principal and resale by the broker-dealer for its account;



 


		·	an exchange distribution in accordance with the rules of the applicable exchange;



 


		·	privately negotiated transactions;



 


		·	short sales made after the date the Registration Statement is declared effective by the SEC;



 


		·	broker-dealers may agree with a selling security holder to sell a specified number of such shares
at a stipulated price per share;



 


		·	a combination of any such methods of sale; and



 


		·	any other method permitted pursuant to applicable law.



  


The selling stockholders
may also sell shares of common stock under Rule 144 promulgated under the Securities Act of 1933, as amended, if available,
rather than under this prospectus. In addition, the selling stockholders may transfer the shares of common stock by other means
not described in this prospectus. If the selling stockholders effect such transactions by selling shares of common stock to or
through underwriters, broker-dealers or agents, such underwriters, broker-dealers or agents may receive commissions in the form
of discounts, concessions or commissions from the selling stockholders or commissions from purchasers of the shares of common stock
for whom they may act as agent or to whom they may sell as principal (which discounts, concessions or commissions as to particular
underwriters, broker-dealers or agents may be in excess of those customary in the types of transactions involved). In connection
with sales of the shares of common stock or otherwise, the selling stockholders may enter into hedging transactions with broker-dealers,
which may in turn engage in short sales of the shares of common stock in the course of hedging in positions they assume. The selling
stockholders may also sell shares of common stock short and deliver shares of common stock covered by this prospectus to close
out short positions and to return borrowed shares in connection with such short sales. The selling stockholders may also loan or
pledge shares of common stock to broker-dealers that in turn may sell such shares.


 






    


     


    

 


The selling stockholders
may pledge or grant a security interest in some or all of the Warrants or shares of common stock owned by them and, if they default
in the performance of their secured obligations, the pledgees or secured parties may offer and sell the shares of common stock
from time to time pursuant to this prospectus or any amendment to this prospectus under Rule 424(b)(3) or other applicable provision
of the Securities Act amending, if necessary, the list of selling stockholders to include the pledgee, transferee or other successors
in interest as selling stockholders under this prospectus. The selling stockholders also may transfer and donate the shares of
common stock in other circumstances in which case the transferees, donees, pledgees or other successors in interest will be the
selling beneficial owners for purposes of this prospectus.


 


To the extent required
by the Securities Act and the rules and regulations thereunder, the selling stockholders and any broker-dealer participating in
the distribution of the shares of common stock may be deemed to be “underwriters” within the meaning of the Securities
Act, and any commission paid, or any discounts or concessions allowed to, any such broker-dealer may be deemed to be underwriting
commissions or discounts under the Securities Act. At the time a particular offering of the shares of common stock is made, a prospectus
supplement, if required, will be distributed, which will set forth the aggregate amount of shares of common stock being offered
and the terms of the offering, including the name or names of any broker-dealers or agents, any discounts, commissions and other
terms constituting compensation from the selling stockholders and any discounts, commissions or concessions allowed or re-allowed
or paid to broker-dealers.


 


Under the securities
laws of some states, the shares of common stock may be sold in such states only through registered or licensed brokers or dealers.
In addition, in some states the shares of common stock may not be sold unless such shares have been registered or qualified for
sale in such state or an exemption from registration or qualification is available and is complied with.


 


There can be no assurance
that any selling stockholder will sell any or all of the shares of common stock registered pursuant to the registration statement,
of which this prospectus forms a part.


 


The selling stockholders
and any other person participating in such distribution will be subject to applicable provisions of the Securities Exchange Act
of 1934, as amended, and the rules and regulations thereunder, including, without limitation, to the extent applicable, Regulation M
of the Exchange Act, which may limit the timing of purchases and sales of any of the shares of common stock by the selling stockholders
and any other participating person. To the extent applicable, Regulation M may also restrict the ability of any person engaged
in the distribution of the shares of common stock to engage in market-making activities with respect to the shares of common stock.
All of the foregoing may affect the marketability of the shares of common stock and the ability of any person or entity to engage
in market-making activities with respect to the shares of common stock.


 


We will pay all expenses
of the registration of the shares of common stock pursuant to the registration rights agreement, estimated to be $[     ]
in total, including, without limitation, Securities and Exchange Commission filing fees and expenses of compliance with state securities
or “blue sky” laws; provided, however, a selling stockholder will pay all underwriting discounts and selling commissions,
if any. We will indemnify the selling stockholders against liabilities, including some liabilities under the Securities Act in
accordance with the registration rights agreements or the selling stockholders will be entitled to contribution. We may be indemnified
by the selling stockholders against civil liabilities, including liabilities under the Securities Act that may arise from any written
information furnished to us by the selling stockholder specifically for use in this prospectus, in accordance with the related
registration rights agreements or we may be entitled to contribution.


 


Once sold under the
registration statement, of which this prospectus forms a part, the shares of common stock will be freely tradable in the hands
of persons other than our affiliates.