Document:

Exhibit 10.4

 

FORM OF REGISTRATION RIGHTS AGREEMENT

 

This REGISTRATION
RIGHTS AGREEMENT (this “Agreement”), dated as of ________ ___, 20__, is by and among Pacific Ethanol, Inc.,
a Delaware corporation with offices located at 400 Capitol Mall, Suite 2060, Sacramento, CA 95814 (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 December 19, 2012 (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 (i) senior unsecured notes of the Company (the "Notes"), and (ii) the
Warrants (as defined in the Securities Purchase Agreement) which will be exercisable to purchase Warrant Shares (as defined in
the Securities Purchase Agreement) in accordance with the terms of the Warrants.

 

B.The Notes are
entitled to interest, which, at the option of the Company and subject to certain conditions, may be paid in shares of the Company’s
common stock, $0.0001 par value per share (the “Common Stock”) that have been registered for resale (the "Interest
Shares") or in cash.

 

C.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.

 

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

 

(d)“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.

 

(e)“Investor”
means a Buyer or any transferee or assignee of any Registrable Securities, Notes 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,
Notes 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.

 

(f)“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.

 

(g)“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.

 

(h)“Registrable
Securities” means (i) any Interest Shares issued or issuable pursuant to the terms of the Notes, (ii) the Warrant Shares
and (iii) any capital stock of the Company issued or issuable with respect to the Interest Shares, the Warrant Shares the Notes
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 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 issuance of Common Stock pursuant to the terms of
the Notes or exercise of the Warrants.

 

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

 

(j)“Required
Holders” means the holders of at least a majority of the Registrable Securities (excluding any Registrable Securities
held by the Company or any of its Subsidiaries).

 

(k)“Required
Registration Amount” means (i) 7,369,714 Interest Shares issued and issuable pursuant to the terms of the Notes and
(ii) 25,630,286 Warrant Shares issued and issuable upon exercise of the Warrants, all subject to adjustment as provided in Section
2(c).

 

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(l)“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.

 

(m)“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.

 

(n)“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(b).
Such initial Registration Statement, and each other Registration Statement required to filed pursuant to the terms of this Agreement,
shall contain (except if otherwise directed by the Required Holders) the “Selling Security holders” and “Plan
of Distribution” sections in substantially the form attached hereto as Exhibit B. The Company shall use
its commercially reasonable best efforts to have such initial Registration Statement, and each other Registration Statement required
to filed pursuant to the terms of this Agreement, declared effective by the SEC as soon as practicable and, with respect to the
initial Registration Statement, within ninety (90) days after filing.

 

(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 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.

 

(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(f), 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 fifteen (15)
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 commercially reasonable 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.

 

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(d)Offering.
Notwithstanding anything to the contrary contained in this Agreement, 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 remove
from the Registration Statement such portion of the Registrable Securities (the “Cut Back 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 remove from the Registration Statement
the number of Registrable Securities 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) with such reduction being applied first with respect to the Interest
Shares (unless any Investor determines otherwise with respect to its pro rata share of Registrable Securities) unless the inclusion
of the Registrable Securities 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 Registrable Securities held by such Investor or set of
Investors shall be the only Registrable Securities 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 Registrable Securities by all such Investors). 
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).

 

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(e)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 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 fifteen (15) 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 all or any part of such Registrable Securities such Investor requests to be registered;
provided, however, that the Company shall not be required to register any Registrable Securities pursuant to this
Section 2(e) 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.

 

(f)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.

 

(g)No Inclusion
of Other Securities. In no event shall the Company include any securities other than Registrable Securities on any Registration
Statement without the prior written consent of the Required Holders.

 

 

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3.   Related
Obligations.

 

The Company shall use
its commercially reasonable 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 commercially reasonable best efforts to cause such Registration Statement
to become effective as soon as practicable after such filing. The Company shall use its commercially reasonable best efforts 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(e)) 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), (ii) the date on which the Investors shall have sold all of the Registrable Securities covered by such
Registration Statement, or (iii) the date on which all Warrants have expired or been exercised in accordance with the terms of
the Warrants (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 material information regarding the Company and its securities required
to be disclosed under the 1933 Act or the 1934 Act (as defined below). The Company shall submit to the SEC, within one (1) Business
Day after the date that 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), 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.

 

(b)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 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
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.

 

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(c)The Company
shall (A) permit legal counsel for each 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 any legal counsel for
any Investor reasonably objects. The Company shall promptly furnish to legal counsel for each 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 each 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,
(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.

 

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(e)The Company
shall use its commercially reasonable 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, that 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 for each 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.

 

(f)The Company
shall notify legal counsel for each 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,
includes 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
promptly prepare a supplement or amendment to such Registration Statement and such prospectus contained therein to correct such
untrue statement or omission and deliver ten (10) copies of such supplement or amendment to legal counsel for each Investor and
each Investor (or such other number of copies as legal counsel for each Investor or such Investor may reasonably request). The
Company shall also promptly notify legal counsel for each 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 for each 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.

 

(g)The Company
shall (i) use its commercially reasonable 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 for each 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.

 

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(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, that 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.

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(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 commercially reasonable 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 commercially reasonable
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 (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.

 

    	10

    	 

    
 

(n)The Company
shall use its commercially reasonable 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.

 

(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 commercially reasonable 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 in the form attached hereto as Exhibit A.

 

(r)The Company
shall use its commercially reasonable best efforts to maintain eligibility for use of Form S-3 (or any successor form thereto)
for the registration of the resale of all the Registrable Securities (provided that Form S-3 may be used for any such resales).

 

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

 

 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 complete the registration pursuant to this Agreement with respect
to the Registrable Securities of a particular Investor that such Investor shall 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 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.

    	11

    	 

    
 

 

(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 Section 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.

 

(d)Each Investor
covenants and agrees that it will comply with the prospectus delivery requirements of the 1933 Act as applicable to it in connection
with sales of Registrable Securities pursuant to a Registration Statement.

 

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. 

 

6.   Indemnification.

 

(a)In the
event any Registrable Securities are included in any Registration Statement under this Agreement, 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 party 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,
or 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 (the matters in the foregoing clauses (i) through (iii) 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): (x) 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, (y) shall not be
available to a particular Investor to the extent such Claim is based on a failure of such Investor to deliver or to cause to
be delivered the prospectus made available by the Company (to the extent applicable), including, without limitation, a
corrected prospectus, if such prospectus or corrected prospectus was timely made available by the Company pursuant to Section
3(d) and then only if, and to the extent that, following the receipt of the corrected prospectus no grounds for such
Claim would have existed, and (z) 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.

 

    	12

    	 

    
 

 

(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, that 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.

 

(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, that 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, that 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.

 

    	13

    	 

    
 

(d)No Person involved
in the sale of Registrable Securities who 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 indemnification from any Person involved in such sale of Registrable
Securities who is not guilty of fraudulent misrepresentation.

 

(e)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.

 

(f)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, that: (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, (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.

 

    	14

    	 

    
 

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 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, Notes 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, the Notes 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.

 

    	15

    	 

    
 

10.   Amendment
of Registration Rights.

 

Provisions of
this Agreement may be amended only with the written consent of the Company and the Required Holders. Any amendment 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 the holders of Registrable
Securities, (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) or (3) applies retroactively. 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 also is offered to all of the parties to this Agreement.

 

 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); (iii)
with respect to Section 3(c), by electronic mail (provided confirmation of transmission is electronically generated and
kept on file by the sending party); or (iv) 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 and
facsimile numbers for such communications shall be:

 

If to the Company:

 

Pacific Ethanol, Inc.

400 Capitol Mall

Suite 2060

Sacramento, CA 95814

Telephone: (916) 403-2130

Facsimile: (916) 403-3936

Attention: General Counsel

    	16

    	 

    
 

With a copy (for informational
purposes only) to:

 

Troutman Sanders LLP

5 Park Plaza, 14th Floor

Irvine, CA 92614

Telephone: (949) 622-2710

Facsimile: (949) 622-2739

Attention: Larry A. Cerutti, Esq.

 

If to the Transfer Agent:

 

American Stock Transfer & Trust Company

6201 15th Avenue, 2nd Floor

Brooklyn, NY 11219

Telephone: (718) 921-8360

Facsimile: (718) 921-8310

Attention: Marianela Patterson

 

If to an Investor, to its address and facsimile
number set forth on the Schedule of Investors attached to the Securities Purchase Agreement, with copies to such Investor’s
representatives as set forth on the Schedule of Investors, or to such other address and/or facsimile number 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. Written confirmation of receipt (A) given by the recipient of such notice, consent, waiver or other
communication, (B) mechanically or electronically generated by the sender’s facsimile machine or electronic mail transmission
containing the time, date, recipient facsimile number or electronic mail address and an image of the first page of such transmission
or (C) provided by a courier or overnight courier service shall be rebuttable evidence of personal service, receipt by facsimile
or receipt from a nationally recognized overnight delivery service in accordance with clause (i), (ii) or (iii) above, respectively.

 

(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.

 

    	17

    	 

    
 

(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. If any provision of this Agreement shall be invalid or unenforceable in any jurisdiction,
such invalidity or unenforceability shall not affect the validity or enforceability of the remainder of this Agreement in that
jurisdiction or the validity or enforceability of any provision of this Agreement in any other jurisdiction. 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)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, that 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.

 

(f)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.

 

(g)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.

 

    	18

    	 

    
 

(h)This Agreement
may be executed in two or more identical counterparts, 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 e-mail 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.

 

(i)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.

 

(j)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.

 

(k)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.

 

(l)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 pages follow]

    	19

    	 

    
 

IN WITNESS WHEREOF,
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: _____________________________

      Neil M.
Koehler, President and CEO

 

 

    	 

    	 

    
 

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.

 

BUYER:

 

CWD OC 522 MASTER
FUND, LTD.

 

By: Candlewood Investment
Group, as investment manager

 

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.

 

BUYER:

 

Credit
Suisse Loan Funding LLC

 

By: _____________________________

      Name:

      Title:

 

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.

 

BUYER:

 

CCVF PACETH
LLC

 

By: Credit Value Partners
LP, as investment manager

 

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.

 

BUYER:

 

CANDLEWOOF CREDIT
VALUE FUND II, LP

 

By: Credit Value Partners
LP, as investment manager

 

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.

 

BUYER:

 

CANDLEWOOD
SPECIAL SITUATIONS MASTER FUND, LTD.

 

By: Credit Value Partners
LP, as investment manager

 

By:
______________________________

      Name:

      Title:

 

    	 

    	 

    
 

 

 

EXHIBIT A

 

FORM OF NOTICE OF EFFECTIVENESS

OF REGISTRATION STATEMENT

 

______________________

______________________

______________________

Attention: _____________

 

Re:Pacific Ethanol, Inc.

 

Ladies and Gentlemen:

 

[We are][I am] counsel
to Pacific Ethanol, Inc., a Delaware corporation corporation (the “Company”), and have represented the Company
in connection with that certain Securities Purchase Agreement (the “Securities Purchase Agreement”) entered
into by and among the Company and the buyers named therein (collectively, the “Holders”) pursuant to which the
Company issued to the Holders certain senior unsecured notes (the “Notes”) and warrants (the “Warrants”)
exercisable for shares of the Company’s common stock, $0.001 par value per share (the “Common Stock”).
Pursuant to the Securities Purchase Agreement, the Company also has entered into a Registration Rights Agreement with the Holders
(the “Registration Rights Agreement”) pursuant to which the Company agreed, among other things, to register
the Registrable Securities (as defined in the Registration Rights Agreement), including the shares of Common Stock issuable pursuant
to the terms of the Notes and exercise of the Warrants, under the Securities Act of 1933, as amended (the “1933 Act”).
In connection with the Company’s obligations under the Registration Rights Agreement, on ____________ ___, 20__, the Company
filed a Registration Statement on Form [S-3] (File No. 333-_____________) (the “Registration Statement”) with
the Securities and Exchange Commission (the “SEC”) relating to the Registrable Securities which names each of
the Holders as a selling security holder thereunder.

 

In connection with the
foregoing, [we][I] advise you that a member of the SEC’s staff has advised [us][me] by telephone that the SEC has entered
an order declaring the Registration Statement effective under the 1933 Act at [ENTER TIME OF EFFECTIVENESS] on [ENTER DATE OF EFFECTIVENESS]
and [we][I] have no knowledge, after telephonic inquiry of a member of the SEC’s staff, that any stop order suspending its
effectiveness has been issued or that any proceedings for that purpose are pending before, or threatened by, the SEC and the Registrable
Securities are available for resale under the 1933 Act pursuant to the Registration Statement.

 

This letter shall serve
as our standing opinion to you that the shares of Common Stock underlying the Warrants and any shares of Common Stock issued as
Interest Shares pursuant to the Notes are freely transferable by the Holders pursuant to the Registration Statement. You need not
require further letters from us to effect any future legend-free issuance or reissuance of such shares of Common Stock to the Holders
as contemplated by the Company’s Irrevocable Transfer Agent Instructions dated _________ __, 20__.

 

Very truly yours,

 

[ISSUER’S COUNSEL]

 

By:_____________________

 

CC:

 

CANDLEWOOD SPECIAL SITUATIONS FUND, LP 

Credit Suisse Loan
Funding LLC

CANDLEWOOD CREDIT VALUE MASTER FUND II, LP 

 

    	 

    	 

    
 

EXHIBIT B

 

SELLING SECURITY HOLDERS

 

This prospectus covers
the sale by the selling security holders of up to an aggregate of [____________] shares of common stock, including an aggregate
of [____________] shares of our common stock issuable pursuant to the terms of the Notes and an aggregate of 25,630,286 shares
of our common stock underlying Warrants. We are registering the shares of common stock in order to permit the selling security
holders to offer the shares for resale from time to time. Except for the ownership of the Notes and the Warrants described below,
the selling security holders have not had any material relationship with us within the past three years except as disclosed under
the heading “Our Relationships with the Selling Security Holders” below.

 

The table below lists
the selling security holders and other information regarding the beneficial ownership of the shares of common stock held by each
of the selling security holders. The second column lists the number of shares of common stock beneficially owned by the selling
security holders, based on their respective ownership of shares of common stock and Warrants, as of ____________, 20__, assuming
exercise of the Warrants held by each selling security holder on that date and does not take into account of any limitations on
conversion and issuance of common stock and exercise contained in the Warrants. The number of shares of common stock issuable upon
exercise of the Warrants held by each selling security holder on ____________, 20__ is the maximum number of shares of common stock
issuable upon exercise of the Warrants on ____________, 20__.

 

The third column lists
the shares of common stock being offered by this prospectus by the selling security holders and does not take in account any limitations
on issuance of common stock pursuant to the terms of the Notes contained in the Notes or the limitations on issuance of common
stock upon exercise of the Warrants contained in the Warrants.

 

The fourth column assumes
the sale of all of the shares offered by the selling security holders under this prospectus and does not take into account any
limitations on issuance of common stock pursuant to the terms of the notes contained in the notes or the limitations on issuance
of common stock upon exercise of the Warrants contained in the Warrants.

 

Under the terms of
the Warrants, a selling security holder may not exercise the Warrants to the extent (but only to the extent) the selling security
holder or any of its affiliates would beneficially own a number of shares of our common stock which would exceed 4.99% of our outstanding
shares of common stock, or Blocker. The Blocker may be raised or lowered to any other percentage not in excess of 9.99%, except
that any increase will only be effective upon 61-days’ prior notice to us. The number of shares in the second column and
the fourth column does not reflect these limitations. The number of shares beneficially owned by each selling security holder taking
into account these limitations, if such number is less than the number of shares set forth in the table, is set forth in the footnotes
to the table below. The selling security holders may sell all, some or none of their shares in this offering. See “Plan of
Distribution.”

 

    	 

    	 

    
 

PLAN OF DISTRIBUTION

 

We are registering
the shares of common stock issuable pursuant to the terms of the Notes and exercise of the Warrants to permit the resale of these
shares of common stock by the holders of the Notes and 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 security holders 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 security
holders 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 security holders 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 the selling securityholders 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 security
holders 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 security holders may transfer the shares of common stock by other means
not described in this prospectus. If the selling security holders 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 security holders 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 security holders 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
security holders 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 security holders may also loan
or pledge shares of common stock to broker-dealers that in turn may sell such shares.

 

The selling security
holders may pledge or grant a security interest in some or all of the notes, 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 security holders to include the pledgee,
transferee or other successors in interest as selling security holders under this prospectus. The selling security holders 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 security holders 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 security holders and any discounts, commissions or concessions allowed or re-allowed
or paid to broker-dealers.

 

    	2

    	 

    
 

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 security holder 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 security
holders 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 security
holders 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, that a selling security holder will pay all underwriting discounts
and selling commissions, if any. We will indemnify the selling security holders against liabilities, including some liabilities
under the Securities Act in accordance with the registration rights agreements or the selling security holders will be entitled
to contribution. We may be indemnified by the selling security holders against civil liabilities, including liabilities under the
Securities Act that may arise from any written information furnished to us by the selling security holder 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.

 

 

    	3Exhibit 10.5 

 

FORM OF AGREEMENT FOR PURCHASE AND
SALE OF

UNITS IN NEW PE HOLDCO LLC

 

THIS AGREEMENT FOR
PURCHASE AND SALE OF UNITS IN NEW PE HOLDCO LLC, (“Agreement”) dated as of December 19, 2012, is made by
and among [INVESTOR], a [____________](“Seller”) and Pacific
Ethanol, Inc., a Delaware corporation (“Buyer”). Unless otherwise defined in this Agreement, capitalized
terms used in this Agreement are defined in Exhibit A.

 

W I T N E S S E T H

 

WHEREAS, Seller,
as a member of New PE Holdco LLC, a Delaware limited liability company (the “Company”), owns certain limited
liability company interests denominated as “Units” pursuant to the Limited Liability Company Agreement of New
PE Holdco LLC dated June 29, 2010 (the “LLC Agreement”);

 

WHEREAS, Seller
desires to sell to Buyer, and Buyer desires to purchase from Seller, [___________(__)] Units (the “Seller Units”).

 

NOW, THEREFORE,
in consideration of the agreements and mutual covenants and based upon the representations and warranties set forth herein, the
parties agree as follows:

 

1.                 
Purchase and Sale of Seller Units.

 

(a)              
Subject to the terms and conditions of this Agreement, Buyer agrees to purchase, and Seller agrees to sell, convey,
assign, transfer and deliver to Buyer, the Seller Units, free and clear of all Encumbrances, on the Closing Date.

 

(b)              
As consideration for the sale of the Seller Units to Buyer at the Closing, Buyer shall pay to Seller, in cash, a
total of $[__________](the “Cash Consideration”) by wire transfer to the account designed by Seller.

 

(c)               
The closing of the sale of the Seller Units to Buyer (the “Closing”) shall take place at the offices
of Buyer in Sacramento, California at 10:00 a.m. PST on the “Closing Date” as defined in the Securities Purchase Agreement,
dated as of December 19, 2012, among the Buyer and the investors party thereto (such agreement, the “Securities Purchase
Agreement”; such date, the “Closing Date”).

 

    	1

    	 

    

2.                 
Condition Precedent to Obligation to Close.

 

Buyer’s
obligation to purchase and Seller’s obligation to sell the Seller Units is subject to the substantially concurrent occurrence
of the “Closing Date” as defined in the Securities Purchase Agreement. If the Closing Date has not occurred by 5 p.m.
EST on the twentieth “Business Day” (as defined in the Securities Purchase Agreement) following the date hereof, then
this Agreement shall terminate and shall be of no further force or effect.

 

3.                 
Seller Representations. Seller represents and warrants to Buyer as follows:

 

(a)              
Organization. Seller is a [___________] duly organized, validly existing and in good standing under the laws
of the State of [_____].

 

(b)              
Due Authorization; Enforceability. The execution, delivery and performance of this Agreement have been duly
and validly authorized by Seller. Assuming the due authorization, execution and delivery of the same by Buyer, this Agreement and
all other agreements and instruments entered into pursuant hereto (collectively, the “Transaction Documents”)
constitute the legal, valid and binding obligation of Seller, enforceable against Seller in accordance with their respective terms
(except as may be limited by bankruptcy, insolvency, reorganization and other similar laws and equitable principles relating to
or limiting creditors’ rights generally).

 

(c)               
Non-Contravention; Consents. Seller need not give any notice to, make any filing with, or obtain any authorization,
consent, or approval of any government or governmental agency in order to consummate the purchase and sale of the Seller Units
(the “Transaction”). Neither the execution and delivery of this Agreement and the other Transaction Documents,
nor the consummation of the Transaction, will directly or indirectly (with or without notice or lapse of time): (i) conflict with
or result in a violation or breach of any of the terms, conditions or provisions of the Charter Documents of Seller; (ii) conflict
with or violate any statute, regulation, rule, injunction, judgment, order, decree, ruling, charge, or other restriction of any
government, governmental agency, or court to which Seller is subject; (iii) conflict with, result in a breach of, constitute a
default under, result in the acceleration of, create in any party the right to accelerate, terminate, modify or cancel, or require
any notice under any agreement, contract, lease, license, instrument or other arrangement to which Seller is a party or by which
either is bound; or (iv) result in the imposition or creation of an Encumbrance upon the Seller Units.

 

(d)              
Ownership of Seller Units. Seller is the unconditional and sole legal, beneficial, record and equitable owner
of the Seller Units and Seller has full power and authority to sell and transfer the Seller Units, free and clear of any restrictions
on transfer or any other Encumbrances. Seller has not ever sold, assigned transferred or otherwise disposed of all or any portion
of Seller Units. Seller is not a party to any option, warrant, purchase right, or other contract or commitment (other than this
Agreement) that could require Seller to sell, transfer, or otherwise dispose of any Seller Units, or any voting or economic right
therein, of the Company. Seller is not a party to any voting trust, proxy, or other agreement or understanding with respect to
the voting of any Seller Units.

 

    	2

    	 

    

 

(e)               
Distributions. Seller has no current outstanding obligation to return to the Company all or any portion of
any distribution previously received from the Company in respect of the Seller Units.

 

(f)               
LLC Agreement. Assuming the due authorization, execution and delivery of the same by each other Member of
the Company, the LLC Agreement is a valid and binding obligation of Seller, enforceable against Seller in accordance with its terms
(except as may be limited by bankruptcy, insolvency, reorganization and other similar laws and equitable principles relating to
or limiting creditors’ rights generally).

 

(g)              
Brokers. Seller has not agreed or become obligated to pay, or has taken any action that might result in any
person, entity or governmental body claiming to be entitled to receive, any brokerage commission, finder’s fee or similar
commission or fee in connection with the Transaction.

 

(h)              
Taxes, etc. Seller has no knowledge of any sales taxes, use taxes, transfer taxes, documentary charges, recording
fees or similar taxes, charges, fees or expenses that will become due and payable as a result of the consummation of the Transaction.

 

4.                 
Buyer Representations. Buyer represents and warrants to Seller as follows:

 

(a)              Organization. Buyer is a corporation duly organized, validly existing and in good standing under the laws
of the State of Delaware.

 

(b)              
Due Authorization; Enforceability. The execution, delivery and performance of this Agreement have been duly
and validly authorized by Buyer. Assuming the due authorization, execution and delivery of the same by Seller, this Agreement and
the other Transaction Documents hereto constitute the legal, valid and binding obligation of Buyer, enforceable against Buyer in
accordance with their respective terms (except as may be limited by bankruptcy, insolvency, reorganization and other similar laws
and equitable principles relating to or limiting creditors’ rights generally).

 

(c)               Non-Contravention;
Consents. Buyer need not give any notice to, make any filing with, or obtain any authorization, consent, or approval of
any government or governmental agency in order to consummate the Transaction. Neither the execution and delivery of this
Agreement and the other Transaction Documents, nor the consummation of the Transaction, will directly or indirectly (with or
without notice or lapse of time): (i) conflict with or result in a violation or breach of any of the terms, conditions or
provisions of the Charter Documents of Seller or, to the knowledge of Buyer, conflict with or result in a violation or breach
of Section 9 of the LLC Agreement; (ii) conflict with or violate any statute, regulation, rule, injunction, judgment, order,
decree, ruling, charge, or other restriction of any government, governmental agency, or court to which Buyer is subject; or
(iii) conflict with, result in a breach of, constitute a default under, result in the acceleration of, create in any party
the right to accelerate, terminate, modify or cancel, or require any notice under any agreement, contract, lease, license,
instrument or other arrangement to which Buyer is a party or by which it is bound.

 

    	3

    	 

    

 

(d)              
Investment Intent. Buyer is acquiring the Seller Units for its own account for investment purposes
only and not with a view to the distribution or resale thereof, in whole or in part.

 

(e)               Permitted Transfer.
Buyer is a Permitted Transferee as such term is defined in the LLC Agreement.

 

5.                 
Closing Deliverables by Seller. At the Closing, Seller shall deliver the
“New PE Holdco LLC Unit Assignment” attached as Exhibit B hereto.

 

6.                 
Closing Deliverables by Buyer. At the Closing, Buyer shall deliver the Cash
Consideration to Seller.

 

7.                 
Survival of Representations and Covenants. The covenants and agreements
of each Party shall survive the Closing for the periods specified in such covenants and agreements, or if no period is specified,
until the first anniversary of the Closing. The representations and warranties of each Party shall survive until the first anniversary
of the Closing.

 

8.                 
Indemnification by Seller. Seller shall hold harmless and indemnify each
of the Indemnified Parties from and against, and shall compensate and reimburse each of the Indemnified Parties for, any Losses
that are directly or indirectly suffered or incurred by any of the Indemnified Parties or to which any of the Indemnified Parties
may otherwise become subject at any time (regardless of whether or not such Losses relate to any third-party claim) and that arise
directly or indirectly from or as a direct or indirect result of, or are directly or indirectly connected with (except to the extent
incurred as a result of any breach by Buyer of any representation, warranty or covenant contained in this Agreement or any other
Transaction Document):

 

(a)              
any breach by Seller or of any representation or warranty of Seller contained in this Agreement, any other Transaction
Document or in any certificate delivered by pursuant to any provision of this Agreement or any other Transaction Document; or

 

(b)              
 any breach of any covenant or agreement of Seller contained in this Agreement or any other Transaction Document.

 

This Section 8 shall
not apply to, and Seller shall not indemnify any Indemnified Party from, any special, indirect, consequential or punitive damages
(whether or not the claim therefore is based on contract, tort, duty imposed by law or otherwise) that may arise directly or indirectly
or as a direct or indirect result of, or are directly or indirectly connected with the foregoing. Any amounts paid to the Indemnified
Parties in the aggregate hereunder shall be limited in all circumstances to the Cash Consideration.

 

    	4

    	 

    

 

9.                 
Additional Agreements.

 

(a)              
Further Assurances. Each Party agrees to execute and deliver such further documents and instruments and to
take such further actions after the Closing as may be necessary or desirable and reasonably requested by the other Party to give
effect to the Transaction.

 

(b)              
Expenses; Attorneys’ Fees. Each Party shall bear and pay all fees, costs and expenses that have been
incurred or that are in the future incurred by, on behalf of, such Party in connection with the negotiation, preparation and review
of this Agreement, the other Transaction Documents and all certificates and other instruments and documents delivered or to be
delivered in connection with the Transaction, and the consummation and performance of the Transaction. If a Party shall bring any
action, suit, counterclaim, appeal, arbitration, or mediation for any relief against the other Party, declaratory or otherwise,
to enforce the terms hereof or to declare rights hereunder (referred to herein as an “Action”), the non-prevailing
party in such Action shall pay to the prevailing party in such Action a reasonable sum for the prevailing party’s attorneys’
fees and expenses.

 

10.             
Miscellaneous.

 

(a)              
Notices. All notices, demands and other communications to be given or delivered under or by reason of the
provisions of this Agreement shall be in writing and shall be deemed to have been given when personally delivered, when mailed
by certified mail, return receipt requested, when sent by facsimile with confirmation of receipt received, or when delivered by
overnight courier with executed receipt. Notices, demands and communications to Seller or Buyer shall, unless another address is
specified in writing in accordance herewith, be sent to the address indicated below:

 

	 	Notices to Seller:	[	 
	 	 	 	 
	 	 	]	 
	 	 	 
	 	Notices to Buyer:	Pacific Ethanol, Inc.
	 	 	400 Capitol Mall
	 	 	Suite 2060
	 	 	Sacramento, CA  95814
	 	 	Attn: General Counsel
	 	 	Tel: (916) 403-2123
	 	 	Fax: (916) 403-2785

 

(b)              
Amendment. No change in or modification of this Agreement shall be valid unless the same shall be in writing
and signed by Seller and Buyer.

 

(c)               
Waiver. No failure or delay on the part of the parties or any of them in exercising any right, power or privilege
hereunder, nor any course of dealing between the parties or any of them shall operate as a waiver of any such right, power or privilege
nor shall any single or partial exercise of any such right, power or privilege preclude the simultaneous or later exercise of any
other right, power or privilege. The rights and remedies herein expressly provided are cumulative and are not exclusive of any
rights or remedies which the parties or any of them would otherwise have.

 

    	5

    	 

    

 

(d)              
Counterparts. This Agreement may be executed in any number of counterparts with the same effect as if all
of the parties hereto had signed the same document. All counterparts shall be construed together and shall constitute one agreement.
This Agreement and any amendments hereto, to the extent signed and delivered by means of a facsimile machine or electronic transmission
(including a PDF file), shall be treated in all manner and respects as an original Agreement and shall be considered to have the
same binding legal effect as if it were the original signed version thereof delivered in person. No party hereto shall raise the
use of a facsimile machine or electronic transmission to deliver a signature or the fact that any signature was transmitted or
communicated through the use of a facsimile machine or electronic transmission as a defense to the formation of a contract and
each such party forever waives any such defense.

 

(e)               
GOVERNING LAW. THE LAWS OF THE STATE OF DELAWARE SHALL GOVERN THE VALIDITY OF THIS AGREEMENT, THE CONSTRUCTION
OF ITS TERMS, AND THE INTERPRETATION OF THE RIGHTS AND DUTIES ARISING HEREUNDER, WITHOUT REGARD TO ITS CONFLICTS OF LAWS PROVISIONS.

 

(f)               
Submission to Jurisdiction; Waiver of Jury Trial and Venue.

 

(1)              
SUBMISSION TO JURISDICTION. EACH PARTY HERETO IRREVOCABLY AND UNCONDITIONALLY SUBMITS, FOR ITSELF AND ITS PROPERTY,
TO THE NON-EXCLUSIVE JURISDICTION OF THE COURTS OF THE STATE OF NEW YORK SITTING IN NEW YORK COUNTY AND OF THE UNITED STATES DISTRICT
COURT FOR THE SOUTHERN DISTRICT OF NEW YORK, AND ANY APPELLATE COURT FROM ANY THEREOF, IN ANY ACTION OR PROCEEDING ARISING OUT
OF OR RELATING TO THIS AGREEMENT, OR FOR RECOGNITION OR ENFORCEMENT OF ANY JUDGMENT, AND EACH OF THE PARTIES HERETO IRREVOCABLY
AND UNCONDITIONALLY AGREES THAT ALL CLAIMS IN RESPECT OF ANY SUCH ACTION OR PROCEEDING MAY BE HEARD AND DETERMINED IN SUCH NEW
YORK STATE COURT OR, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, IN SUCH FEDERAL COURT. EACH OF THE PARTIES HERETO AGREES
THAT A FINAL JUDGMENT IN ANY SUCH ACTION OR PROCEEDING SHALL BE CONCLUSIVE AND MAY BE ENFORCED IN OTHER JURISDICTIONS BY SUIT ON
THE JUDGMENT OR IN ANY OTHER MANNER PROVIDED BY LAW.

 

(2)              
WAIVER OF JURY TRIAL AND VENUE. EACH PARTY HERETO IRREVOCABLY AND UNCONDITIONALLY WAIVES, TO THE FULLEST EXTENT PERMITTED
BY APPLICABLE LAW, (i) ANY AND ALL RIGHTS SUCH PARTY MAY HAVE TO A JURY TRIAL WITH RESPECT TO ANY ACTION OR PROCEEDING ARISING
OUT OF OR RELATING TO THIS AGREEMENT OR AND (ii) ANY OBJECTION THAT SUCH PARTY MAY NOW OR HEREAFTER HAVE TO THE LAYING OF VENUE
OF ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT IN ANY COURT REFERRED TO ABOVE. EACH OF THE PARTIES HERETO
HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, THE DEFENSE OF AN INCONVENIENT FORUM TO THE MAINTENANCE
OF SUCH ACTION OR PROCEEDING IN ANY SUCH COURT.

 

    	6

    	 

    

 

(3)              
Service of Process. Each party hereto agrees that service of process may be effectuated by mailing a copy of the
summons and complaint, or other pleading, by certified mail, return receipt requested, in accordance with Section 10(a).

 

(g)              
Benefit and Binding Effect. Except as otherwise provided in this Agreement, no right under this Agreement
shall be assignable and any attempted assignment in violation of this provision shall be void. Every covenant, term, and provision
of this Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective executors, administrators,
heirs, successors, transferees, and assigns. It is understood and agreed among the parties that this Agreement and the covenants
made herein are made expressly and solely for the benefit of the parties hereto, and that no other Person, other than
as expressly set forth in this, shall be entitled or be deemed to be entitled to any benefits or rights hereunder, nor be
authorized or entitled to enforce any rights, claims or remedies hereunder or by reason hereof.

 

(h)              
Severability. Any provision of this Agreement which is prohibited, unenforceable or not authorized in any
jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition, unenforceability or nonauthorization
without invalidating the remaining provisions hereof or affecting the validity, enforceability or legality of such provision in
any other jurisdiction. The parties hereto agree to negotiate in good faith to replace any illegal, invalid or unenforceable provision
of this Agreement with a legal, valid and enforceable provision that, to the extent possible, will preserve the economic bargain
of this Agreement. If any time period set forth herein is held by a court of competent jurisdiction to be unenforceable, a different
time period that is determined by the court to be more reasonable shall replace the unenforceable time period.

 

(i)                
Headings; Construction. Section and other headings contained in this Agreement are for reference purposes
only and are not intended to describe, interpret, define, or limit the scope, extent, or intent of this Agreement or any provision
hereof. Every covenant, term, and provision of this Agreement shall be construed simply according to its fair meaning and not strictly
for or against any party. Every schedule and other addendum attached to this Agreement and referred to herein is incorporated in
this Agreement by reference unless this Agreement expressly otherwise provides. All terms and any variations thereof shall be deemed
to refer to masculine, feminine, or neuter, singular or plural, as the identity of the Person or Persons may require.

 

(j)                
Entire Agreement. This Agreement contains the entire understanding and agreement among the parties hereto
with respect to the subject matter hereof, and supersedes all prior agreements and all contemporaneous oral agreements.

 

    	7

    	 

    

 

IN WITNESS WHEREOF,
the parties hereto have executed this Agreement for Purchase And Sale of Units in New PE Holdco LLC as of the day and year first
above written.

 

	 	Buyer
	 	 	 
	 	Pacific Ethanol, Inc.
	 	 	 
	 	 	 
	 	By:	 
	 	Name:	 
	 	Title:	 
	 	 	 
	 	 	 
	 	 	 
	 	Seller
	 	 	 
	 	[SELLER]
	 	 	 
	 	 	 
	 	By:	 
	 	Name:	 
	 	Title:	 
	 	 	 
	 	 	 	 

 

 

    	8

    	 

    

 

Exhibit
A

 

Definitions

 

“Action” is defined in Section 9(b).

 

“Affiliate” means an
individual or entity that directly or indirectly, through one or more intermediaries, controls, or is controlled by, or is under
common control with, a specified individual or entity. For purposes of this definition, “control” shall include, without
limitation, the exertion of significant influence over an individual or entity and shall be conclusively presumed as to any fifty
percent (50%) or greater equity interest.

 

“Buyer” is defined in
the preamble hereof.

 

“Cash Consideration”
is defined in Section 1(b).

 

“Charter Documents”
shall mean, as applicable, the specified entity’s (i) certificate of incorporation or formation or other charter or organizational
documents, and (ii) bylaws or operating agreement, each as from time to time in effect.

 

“Closing” is defined
in Section 1(c).

 

“Closing Date” is defined
in Section 1(c).

 

“Company” is defined
in the recitals hereto.

 

“Encumbrance” means
any lien, pledge, hypothecation, charge, mortgage, security interest, encumbrance, equity, trust, equitable interest, claim, preference,
right of possession, lease, tenancy, license, encroachment, covenant, infringement, interference, Order, proxy, option, right of
first refusal, preemptive right, community property interest, legend, defect, impediment, exception, reservation, limitation, impairment,
imperfection of title, condition or restriction of any nature (including any restriction on the transfer of an asset, any restriction
on the receipt of any income derived from an asset, any restriction on the use of any asset and any restriction on the possession,
exercise or transfer of any other attribute of ownership of an asset).

 

“Indemnified Party”
means (a) Buyer, (b) Buyer’s current and future Affiliates; (c) the respective Representatives of the persons referred to
in clauses (a), and (b); and the respective successors and assigns of the persons referred to in clauses (a), (b), and (c) above.

 

“LLC Agreement”
is defined in the recitals hereto.

 

    	9

    	 

    

“Loss” shall include
any loss, damage, injury, decline in value, liability, claim, demand, settlement, judgment, award, fine, penalty, tax, fee (including
any legal fee, expert fee, accounting fee or advisory fee), charge, cost (including court costs and any cost of investigation)
or expense of any nature.

 

“Member” has the meaning
ascribed to such term in the LLC Agreement.

 

“Party” or “Parties”
means any of Seller and Buyer.

 

“Person” means any individual,
person, limited liability company, partnership, trust, unincorporated organization, corporation, association, joint stock company,
business, group, government, government agency or authority or other entity.

 

“Representatives” shall
mean officers, directors, employees, agents, attorneys, accountants, advisors and representatives.

 

“Seller” is defined
in the preamble hereof.

 

“Seller Units” is defined
in the preamble hereof.

 

“Transaction” is defined
in 3(c).

 

“Transaction Documents”
is defined in Section 3(b).

 

“Unit” is defined in the recitals hereto.

 

 

 

 

    	10

    	 

    

 

 

 

Exhibit
B

 

New
PE Holdco LLC

Unit
Assignment

 

[Attached
hereto.]

 

 

 

 

 

 

 

 

 

 

 

    	11

    	 

    
 

 

 

NEW PE HOLDCO LLC

 

UNIT ASSIGNMENT

 

FOR VALUE RECEIVED,
________________________ (“Transferor”) hereby sells, assigns and transfers unto ________________________ (“Transferee”),
__________ units (the “Transferred Units”) of limited liability company membership interests in New PE Holdco
LLC (the “Company”), and hereby appoints ________________________,
as attorney to transfer
said Transferred Units on the books of the Company with full power of substitution in the
premises. 

 

The
Transferee represents that its EIN is: ________________________

 

The Transferor and
Transferee hereby agree and acknowledge that, in accordance with the Limited Liability Company Agreement of New PE Holdco LLC,
dated June 29, 2010, as amended to date (the “LLC Agreement”), the transfer contemplated by this Unit Assignment
is effective upon the Company acknowledging such transfer, by its signature below.

 

Transferee hereby further
agrees that if the Company, directly or through its counsel, makes a reasonable request for (i) information for the Company to
determine the Transferee’s tax basis in the Transferred Units or (ii) any other information reasonably necessary to permit
the Company to file all required federal and state tax returns and other legally required information statements or returns, Transferee
shall promptly provide such information to the Company and/or its counsel. Except to the extent required for legitimate corporate
purposes with respect to the operation and management of the Company, including, without limitation, the filing of tax reports
and forms, the Company shall keep confidential any such information provided to it and to exercise the same degree of care to maintain
the confidentiality of such information as it would accord its own confidential information; provided further, that, if requested
by the Transferee, the Company hereby agrees to execute an additional confidentiality agreement consistent with the foregoing upon
request by Transferee.

 

The full legal name,
address, and primary contact information for the Transferee is as follows:

 

[Insert Transferee Name]

[Insert Transferee Address]

	Attention:	 	 
	Phone:	 	 
	Fax:	 	 
	Email:	 	 
	Dated: 	___________________ ___, 201_	 

 

 

    	12

    	 

    

 

 

 

 

	 	
        TRANSFEROR

         

        [Insert Transferor Name]
	 
	 	 	 	 
	 	By:	 	 
	 	Name: 	 	 
	 	Title: 	 	 
	 	 	 	 
	 	 	 	 

 

Affix Medallion Signature Guarantee by a financial institution
enrolled in an approved Medallion Program.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

    	13

    	 

    
 

 

 

	 	
        TRANSFEREE

         

        [Insert Transferee Name]
	 
	 	 	 	 
	 	By:	 	 
	 	Name: 	 	 
	 	Title: 	 	 
	 	 	 	 
	 	 	 	 

 

Affix Medallion Signature Guarantee by a financial institution
enrolled in an approved Medallion Program.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

    	14

    	 

    

 

 

 

Acknowledged and Accepted:

 

NEW PE HOLDCO LLC

 

 

	By:	 	 
	Name:	 	 
	Title:	 	 
	 	 	 
	Dated: 	___________________ ___, 20______	 

 

 

 

 

 

 

 

 

 

 

 

 

 

    	15

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