Document:

Exhibit 10.4

 

SECURITY AGREEMENT

 

THIS SECURITY AGREEMENT
is made and entered into as of December 28, 2018, by and between APPLIANCESMART CONTRACTING INC., a Nevada corporation ("Debtor")
and APPLIANCE RECYCLING CENTERS OF AMERICA, INC., a Minnesota corporation ("Secured Party") whose addresses are
set forth below.

 

RECITALS

 

A.       APPLIANCESMART
HOLDINGS LLC, a Nevada limited liability company ("Holdings"), is indebted to Secured Party pursuant to the terms
of that certain Amended and Restated Secured Promissory Note dated as of December 26, 2018 issued by Holdings in favor of Secured
Party ("Note"). Debtor guaranteed the repayment of Holdings' obligations under the Note pursuant to that certain
Agreement and Guaranty by Debtor in favor of Secured Party dated as of December 28, 2018 (the "Guaranty"). Debtor
is a wholly-owned subsidiary of Holdings.

 

B.       Debtor
has agreed to grant Secured Party a security interest in certain assets to secure, among other things, Debtor's obligations under
the Guaranty.

 

NOW, THEREFORE,
in consideration of the credit extended under the Note and for the purpose of securing Debtor's obligations to Secured Party under
the Guaranty, the parties agree as follows:

 

1.       Grant
of Security Interest:  Collateral.  To secure the Secured Obligations described in Section 2, the
Debtor hereby grants to the Secured Party a security interest ("Security Interest") in the property described
on Exhibit A attached hereto ("Collateral").

 

2.       Secured
Obligations.  The following obligations are secured by this Agreement (collectively referred to as the "Secured
Obligations"):

 

(a)       All
obligations of Holdings under the Note and all obligations of Debtor to Secured Party under the Guaranty;

 

(b)       Any
and all sums advanced by the Secured Party in order to preserve the Collateral or to perfect its security interest in the Collateral;
and

 

(c)       Upon
the occurrence and during the continuation of an Event of Default (as defined below), all reasonable expenses, including attorneys'
fees and court costs, incurred by the Secured Party in (i) any proceeding to enforce the collection of the Secured Obligations,
(ii) retaking, holding or otherwise disposing of or realizing on the Collateral, or (iii) the exercise of any of its rights under
this Agreement or applicable law.

 

3.       Debtor's
Representations, Warranties and Covenants. Debtor represents, warrants and covenants that:

 

(a)       Debtor
has title to the Collateral, free of all liens and encumbrances, except the Security Interest created hereby, as the same may hereafter
be amended from time to time. Debtor has full corporate power and authority to execute this Security Agreement, to perform Debtor's
obligations hereunder and to subject the Collateral to the Security Interest created hereby.

 

 

 

 

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(b)       Debtor
will, at any time or times hereafter, execute such financing statements and other instruments and perform such other acts as the
Secured Party may reasonably request in order to establish, maintain, perfect and enforce Secured Party's valid and perfected Security
Interest in the Collateral and its rights under this Agreement.

 

(c)       Except
in the ordinary course of Debtor's business, Debtor will not sell, transfer, lease, hypothecate, pledge or otherwise dispose of
any of its rights or interests in the Collateral without the prior written consent of the Secured Party.

 

(d)       Debtor
will keep the Collateral in good condition, ordinary wear and tear excepted, and insured against such risks and in such amounts
consistent with Debtor's past practice, with Secured Party to be named loss payee on all insurance on the Collateral. From time
to time Debtor shall furnish to Secured Party, upon request, appropriate evidence of the carrying of such insurance.

 

(e)       Debtor
will use the Collateral in a lawful manner consistent with this agreement and with the terms and conditions of any policy of insurance
thereon.

 

(f)       Following
the occurrence of an Event of Default, the Secured Party, in the name of the Debtor, shall have the authority but shall not be
obligated to take any action which the Secured Party may deem necessary or desirable in order to realize on the Collateral.

 

(g)       Debtor
will forward directly to the Secured Party any and all written material notices, agreements or documents of any kind or nature
received by Debtor on account of any of the Collateral.

 

4.       Events of
Default.The occurrence of any of the following events shall constitute an "Event of Default" under this
Security Agreement:

 

(a)       The
occurrence of an event of default under the terms of any of the Secured Obligations, including, without limitation, nonpayment
of any of the Secured Obligations when due, whether by acceleration or otherwise;

 

(b)       The
nonperformance of any covenant, or material breach of any representation or warranty, made by Debtor in the Note or this Agreement;

 

(c)       Except
in the ordinary course of Debtor's business, the sale, lease or other disposition of Debtor's interests or rights in the Collateral;

 

(d)       Without
the prior consent of Secured Party, the creation of any encumbrance upon the Collateral or the making of any levy, judicial seizure
or attachment thereof or thereon; or

 

(e)       The
appointment of a receiver for any part of the property of Debtor, the making by Debtor of an assignment for the benefit of creditors
or the initiation by or against Debtor of any proceeding under the Federal Bankruptcy Code or any state insolvency law.

 

 

 

 

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5.       Remedies
Upon Event of Default.  Upon the occurrence of an Event of Default for so long as such Event of Default is continuing,
in addition to all the rights and remedies provided under applicable law, the Secured Party may at its option and without demand
and upon written notice to Debtor, declare all or any part of the unmatured Secured Obligations immediately due and payable, and
the Secured Party may exercise, in addition to the rights and remedies granted hereby, all rights and remedies of a secured party
under the Uniform Commercial Code or any other applicable law. The Secured Party may, at its option, dispose of the Collateral
by public or private sale if Secured Party has given notice to Debtor of the intended disposition in accordance with the provisions
of Section 6 hereof and the Uniform Commercial Code and other applicable law. The Debtor agrees, upon Secured Party's request,
to use commercially reasonable efforts to cooperate with the Secured Party and do all things reasonably necessary to enable Secured
Party to sell the Collateral in compliance with all applicable laws and regulations. Debtor shall pay to Secured Party any deficiency
remaining after such application and any excess proceeds of such sale shall be paid over by Secured Party to Debtor. The bringing
of an action or an entry of judgment against the Debtor shall not bar the Secured Party's right to repossess any or all of the
Collateral.

 

6.       Miscellaneous.
This Agreement can be waived, modified, amended, terminated or discharged, and the Security Interest can be released, only explicitly
in a writing signed by Secured Party. A waiver signed by Secured Party shall be effective only in the specific instance and for
the specific purpose given. Mere delay or failure to act shall not preclude the exercise or enforcement of any of Secured Party's
rights or remedies. All rights and remedies of Secured Party shall be cumulative and may be exercised singularly or concurrently,
at Secured Party's option, and the exercise or enforcement of any one such right or remedy shall neither be a condition to nor
bar the exercise or enforcement of any other. All notices to be given to Debtor shall be deemed sufficiently given if delivered
or mailed by registered or certified mail, postage prepaid, or, except to the extent required by applicable law, sent by facsimile
or electronic mail, to Debtor at its address set forth below or at the most recent address shown on Secured Party's records. Notices
sent by facsimile shall be deemed to have been given when sent, and notices and other communications sent to an e-mail address
shall be deemed received upon the sender’s receipt of an acknowledgement from the intended recipient. All required notices
to Debtor pertaining to any intended disposition of Collateral or other actions shall be deemed timely if given 10 days prior to
the action described in the notice. Secured Party's duty of care with respect to Collateral in its possession (as imposed by law)
shall be deemed fulfilled if Secured Party exercises reasonable care in physically safekeeping such Collateral. Debtor will reimburse
Secured Party for all expenses (including reasonable attorneys' fees and legal expenses) incurred by Secured Party in the protection,
defense, or enforcement of the Security Interest, including expenses incurred in any litigation or bankruptcy or insolvency proceedings.
This Agreement shall be binding upon and inure to the benefit of Debtor and Secured Party and their respective heirs, representatives,
successors and assigns and shall take effect when signed by Debtor and delivered to Secured Party. Except to the extent otherwise
required by law, this Agreement shall be governed by the internal laws of Minnesota and, unless the context otherwise requires,
all terms used herein which are defined in the Uniform Commercial Code, as in effect in Minnesota, shall have the meanings therein
stated. If any provision or application of this Agreement is held unlawful or unenforceable in any respect, such illegality or
unenforceability shall not affect other provisions or applications which can be given effect, and this Agreement shall be construed
as if the unlawful or unenforceable provision or application had never been contained herein or prescribed hereby. All representations
and warranties contained in this Agreement shall survive the execution, delivery and performance of this Agreement and the creation
and payment of the Secured Obligations.

 

[Signatures on following page]

 

 

 

 

 

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	ADDRESSES:	 	DEBTOR:
	 	 	 
	325 E. Warm Springs Road	 	APPLIANCESMART CONTRACTING INC., 
	Suite 102	 	a Nevada corporation
	Las Vegas, NV 89119	 	 
	Attention: Jon Isaac	 	By: /s/ Virland A. Johnson
	 	 	Name: Virland A. Johnson
	 	 	Title: CFO
	with a copy to:	 	 
	 	 	 
	Live Ventures Incorporated	 	 
	325 E. Warm Springs Road, Suite 102	 	 
	Las Vegas, NV 89119	 	 
	Attn: Michael J. Stein, Esq.	 	 
	Email: mstein@liveventures.com	 	 
	 	 	 
	 	 	SECURED PARTY:
	175 Jackson Avenue North	 	 
	Suite 102	 	APPLIANCE RECYCLING CENTERS OF AMERICA, INC.,
	Minneapolis, MN 55343	 	a Minnesota corporation
	Attention: Tony Isaac	 	 
	 	 	By: /s/ Tony Isaac
	 	 	Name: Tony Isaac
	 	 	Title: Chief Executive Officer
	 	 	 

 

 

 

 

 

 

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Exhibit A

 

Description of Collateral

 

All of the personal
property and Fixtures of the Debtor, including without limitation the following, whether now owned or hereafter arising or acquired:

 

(a)               
Accounts, including all other rights and interests (including all liens and security interests) that the Debtor may at any
time have by law or agreement against any Account Debtor or other obligor obligated to make any such payment or against any of
the property of such Account Debtor or other obligor;

 

(b)               
Equipment and Fixtures, including all accessories, parts and other property at any time affixed thereto or used in connection
therewith and all substitutions and replacements thereof;

 

(c)               
Inventory, including goods that are returned, repossessed, stopped in transit or which otherwise come into the possession
of the Debtor;

 

(d)               
General Intangibles, including payment intangibles, inventions, designs, patents, patent applications, design patents, design
patent applications, trademarks, trademark applications, trade names, trade secrets, goodwill, copyrights, registrations, licenses,
franchises, customer lists, tax refund claims, rights to indemnification, rights under warranties, all domain names, together with
all contracts, agreements, licenses and registrations relating to such domain names, and Commercial Tort Claims, if any;

 

(e)               
Chattel Paper, Instruments and Documents;

 

(f)                
Investment Property;

 

(g)               
Deposit Accounts;

 

(h)               
Letter-of-Credit rights;

 

(i)                
Supporting Obligations;

 

(j)                
Intellectual Property Collateral;

 

(k)               
books, correspondence, credit files, records, invoices, manuals, service records and programs, other papers and documents,
computer records, runs, software, systems, procedures, disks, tapes and other storage media relating to any of the Collateral,
including any of the foregoing in the possession or control of any service, consultant, or outside vendor; and

 

(l)                
Proceeds, including all policies, claims to payment under, and proceeds of any and all insurance policies payable to the
Debtor, or on behalf of the Debtor's property, whether or not such policies are issued to or owned by the Debtor and whether or
not the Bank is named as loss payee or additional insured, including any credit insurance.

 

 

    	 	5WELLS FARGO & COMPANY 8-K

 

Exhibit 4.1

 

[Face of Note]

 

Unless this certificate
is presented by an authorized representative of The Depository Trust Company, a New York corporation (“DTC”),
to the Company or its agent for registration of transfer, exchange or payment, and any certificate issued is registered in the
name of Cede & Co. or in such other name as requested by an authorized representative of DTC (and any payment is
made to Cede & Co. or such other entity as is requested by an authorized representative of DTC), ANY TRANSFER, PLEDGE
OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL inasmuch as the registered owner hereof, Cede &
Co., has an interest herein.

	CUSIP NO. 95001BBM5	FACE AMOUNT:  $____________
	REGISTERED NO. ___	 

 

 

WELLS FARGO & COMPANY

 

MEDIUM-TERM NOTE, SERIES S

 

Due Nine Months or More From Date of Issue

 

Principal at Risk Securities Linked to the
Lowest Performing of the

S&P 500® Index and the Russell 2000® Index due December 31, 2020

 

 

WELLS FARGO &
COMPANY, a corporation duly organized and existing under the laws of the State of Delaware (hereinafter called the “Company,”
which term includes any successor corporation under the Indenture hereinafter referred to), for value received, hereby promises
to pay to CEDE & Co., or registered assigns, an amount equal to the Maturity Payment Amount (as defined below) on the
Stated Maturity Date (as defined below), unless this Security is automatically called prior to the Stated Maturity Date as provided
below under “Automatic Call,” and to pay Contingent Coupon Payments (as defined below) on the Face Amount of this Security
to the extent provided herein on the Contingent Coupon Payment Dates specified herein at the Variable Coupon Rate (as defined below)
until the earlier of the Stated Maturity Date and the Call Settlement Date (as defined below), if any. The “Initial Stated
Maturity Date” shall be December 31, 2020. If the Final Observation Day (as defined below) is not postponed, the
Initial Stated Maturity Date will be the “Stated Maturity Date.” If the Final Observation Day is postponed,
the “Stated Maturity Date” shall be the later of (i) the Initial Stated Maturity Date and (ii) three
Business Days (as defined below) after the last Final Observation Day as postponed.

“Face Amount”
shall mean, when used with respect to this Security, the amount set forth on the face of this Security as its “Face Amount.”

Automatic Call

If the Closing Level
(as defined below) of the Lowest Performing Index (as defined below) on any of the monthly Observation Period End-Dates (as defined
below) from June 2019 to

    	 	 	 

    	 

    

November 2020, inclusive, is greater
than or equal to its Starting Level (as defined below), this Security will be automatically called by the Company, and on the related
Call Settlement Date the Holder hereof will receive the Call Price (as defined below) plus a final Contingent Coupon Payment. Unless
the Company defaults in the payment of the Call Price plus the final Contingent Coupon Payment, this Security will cease to be
outstanding on such Call Settlement Date, no additional Contingent Coupon Payments will be payable on this Security and the Holder
hereof will have no further rights under this Security after such Call Settlement Date. The Holder hereof will not receive any
notice from the Company in the event this Security is automatically called pursuant to the terms hereof. The “Call Price”
is equal to the Face Amount of this Security. The “Call Settlement Date” for an Observation Period End-Date
shall be three Business Days after such Observation Period End-Date, as such Observation Period End-Date may be postponed as provided
herein. If an Observation Period End-Date is postponed with respect to one or both Indices, the related Call Settlement Date will
be three Business Days after the last Observation Period End-Date as postponed.

Payment of Contingent Coupon Payments,
the Maturity Payment Amount and the Call Price

On each monthly
Contingent Coupon Payment Date, the Company shall pay a Contingent Coupon Payment, if any, at a per annum rate equal to the Variable
Coupon Rate applicable to the Observation Period (as defined below) immediately preceding such Contingent Coupon Payment Date.
A “Contingent Coupon Payment,” if payable as provided herein, shall be equal to the (i) product of the
Face Amount of this Security and the Variable Coupon Rate, divided by (ii) 12. The “Contingent Coupon Payment
Dates” shall be the third Business Day following each Observation Period End-Date, as each such Observation Period End-Date
may be postponed as herein provided, provided that the Contingent Coupon Payment Date with respect to the final Observation Period
will be the Stated Maturity Date. If an Observation Period End-Date is postponed with respect to one or both Indices, the related
Contingent Coupon Payment Date will be three Business Days after the last Observation Period End-Date as postponed. If a Contingent
Coupon Payment Date is postponed as the result of the occurrence of a non-Trading Day (as defined below) or a Market Disruption
Event (as defined below) on the immediately preceding scheduled Observation Period End-Date, the Contingent Coupon Payment, if
any, due on that Contingent Coupon Payment Date will be made on that Contingent Coupon Payment Date as so postponed with the same
force and effect as if it had been made on the originally scheduled Contingent Coupon Payment Date, with no additional amount accruing
or payable as a result of the postponement. Any Contingent Coupon Payments will be rounded to the nearest cent, with one-half cent
rounded upward.

Any Contingent Coupon
Payment so payable, and punctually paid or duly provided for, on any Contingent Coupon Payment Date will, as provided in the Indenture,
be paid to the Person in whose name this Security (or one or more Predecessor Securities) is registered at the close of business
on the Regular Record Date for such Contingent Coupon Payment next preceding such Contingent Coupon Payment Date. The Regular Record
Date for a Contingent Coupon Payment Date shall be the date one Business Day prior to such Contingent Coupon Payment Date.

Any Contingent Coupon
Payment not punctually paid or duly provided for will forthwith cease to be payable to the Holder on such Regular Record Date and
may either be paid to the Person

    	 	2	 

    	 

    

in whose name this Security (or one
or more Predecessor Securities) is registered at the close of business on a Special Record Date for the payment of such Defaulted
Interest to be fixed by the Trustee, notice whereof shall be given to Holders of Securities of this series not less than 10 days
prior to such Special Record Date, or be paid at any time in any other lawful manner not inconsistent with the requirements of
any securities exchange on which the Securities of this series may be listed, and upon such notice as may be required by such exchange,
all as more fully provided in the Indenture.

Payment of any Contingent
Coupon Payment on this Security will be made in immediately available funds at the office or agency of the Company maintained for
that purpose in the City of Minneapolis, Minnesota; provided, however, that, at the option of the Company, payment of any Contingent
Coupon Payment may be paid by check mailed to the Person entitled thereto at such Person’s last address as it appears in
the Security Register or by wire transfer to such account as may have been designated by such Person. Payments of any Contingent
Coupon Payment and the Maturity Payment Amount or the Call Price, as applicable, on this Security at Maturity will be made against
presentation of this Security at the office or agency of the Company maintained for that purpose in the City of Minneapolis, Minnesota
and at any other office or agency maintained by the Company for such purpose. Notwithstanding the foregoing, for so long as this
Security is a Global Security registered in the name of the Depositary, any payments on this Security will be made to the Depositary
by wire transfer of immediately available funds.

Payment of the Maturity
Payment Amount or the Call Price, as applicable, and any Contingent Coupon Payments on this Security will be made in such coin
or currency of the United States of America as at the time of payment is legal tender for payment of public and private debts.

Definitions Relating to Maturity
Payment Amount, the Call Price and Contingent Coupon Payments

If this Security
is not automatically called prior to the Stated Maturity Date as provided above under “Automatic Call,” the “Maturity
Payment Amount” of this Security will equal:

		•	if the Ending Level of the Lowest Performing Index on the Final Observation Day is greater than or equal to its Threshold Level:
the Face Amount; or

 

		•	if the Ending Level of the Lowest Performing Index on the Final Observation Day is less than its Threshold Level:

 

	Face Amount  x	 	
        Performance Factor of the Lowest Performing

        Index on the Final Observation Day
	+ Buffer Amount	

 

All calculations with respect to the
Maturity Payment Amount will be rounded to the nearest one hundred-thousandth, with five one-millionths rounded upward (e.g., 0.000005
would be rounded to 0.00001); and the Maturity Payment Amount will be rounded to the nearest cent, with one-half cent rounded upward.

“Index”
shall mean each of the S&P 500 Index and the Russell 2000 Index.

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The “Pricing
Date” shall mean December 27, 2018.

The “Lowest
Performing Index” for any Observation Day will be the Index with the lowest Performance Factor on that Observation Day
(as such Observation Day may be postponed for one or both Indices as provided herein).

The “Performance
Factor” with respect to an Index on any Observation Day is its Closing Level on such Observation Day divided by its Starting
Level (expressed as a percentage).

The “Starting
Level” with respect to the S&P 500 Index is 2488.83, its Closing Level on the Pricing Date, and with respect to the
Russell 2000 Index is 1331.817, its Closing Level on the Pricing Date.

The “Ending
Level” of an Index will be its Closing Level on the Final Observation Day.

The “Threshold
Level” with respect to the S&P 500 Index is 2115.5055, which is equal to 85% of its Starting Level, and with respect
to the Russell 2000 Index is 1132.04445, which is equal to 85% of its Starting Level.

The “Buffer
Amount” is 15%.

The “Closing
Level” with respect to each Index on any Trading Day means the official closing level of that Index reported by the relevant
Index Sponsor on such Trading Day, as obtained by the Calculation Agent on such Trading Day from the licensed third-party market
data vendor contracted by the Calculation Agent at such time; in particular, taking into account the decimal precision and/or rounding
convention employed by such licensed third-party market data vendor on such date, subject to the provisions set forth below under
“—Market Disruption Events,” “—Adjustments to an Index” and “—Discontinuance of
an Index.”

The “Variable
Coupon Rate” applicable to an Observation Period will be determined as follows:

	Maximum Coupon Rate  x	 	
        Number of Accrual Days During such
        Observation Period

        Number of Observation Days during such
        Observation Period

	 	 	 

An “Accrual
Day” is an Observation Day on which the Closing Level of the Lowest Performing Index on such Observation Day is greater
than or equal to its Threshold Level.

The “Maximum
Coupon Rate” is 6.80% per annum.

An “Observation
Period” will consist of the Observation Days from but excluding a scheduled Observation Period End-Date to and including
the following scheduled Observation Period End-Date; provided that the first Observation Period will consist of the Observation
Days from but excluding the Pricing Date to and including the first scheduled Observation Period End-Date. An “Observation
Day” is a day in an Observation Period that is a Trading Day for each Index. Each Observation Day for an Index during
an Observation Period is subject to postponement due to Market Disruption Events with respect to such Index as described under

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“Market Disruption Events”
herein. For the avoidance of doubt, an Observation Period End-Date for an Index and the corresponding Contingent Coupon Payment
Date will be postponed due to a non-Trading Day with respect to either Index or a Market Disruption Event with respect to such
Index on such Observation Period End-Date as described herein; however, the subsequent Observation Period will commence on such
originally scheduled Observation Period End-Date (that is, the postponement of an Observation Period End-Date for an Index at the
end of one Observation Period due to the occurrence or continuation of a Market Disruption Event for such Index or non-Trading
Day will not change the commencement date of the succeeding Observation Period for either Index). In addition, if a Market Disruption
Event occurs and is continuing with respect to an Index on successive Observation Days, and, as a result, more than one Observation
Day for such disrupted Index is deemed to occur on a single Trading Day, the level of such Index on that single Trading Day will
be used for each such postponed Observation Day and the number of Observation Days in the applicable Observation Period will not
be adjusted for purposes of calculating the Variable Coupon Rate.

The “Observation
Period End-Dates” shall be the 28th day of each month commencing January 2019 and ending December 2020. The
“Final Observation Day” is December 28, 2020. If any Observation Period End-Date is not a Trading Day with
respect to either Index, such Observation Period End-Date for each Index will be postponed to the next succeeding day that is a
Trading Day with respect to each Index. An Observation Period End-Date for an Index is also subject to postponement due to the
occurrence of a Market Disruption Event with respect to such Index on such Observation Period End-Date as provided under “Market
Disruption Events.”

“Index
Sponsor” shall mean the sponsor or publisher of an Index.

“Business
Day” shall mean a day, other than a Saturday or Sunday, that is neither a legal holiday nor a day on which banking institutions
are authorized or required by law or regulation to close in New York, New York.

“Calculation
Agent Agreement” shall mean the Calculation Agent Agreement dated as of January 24, 2018 between the Company and
the Calculation Agent, as amended from time to time.

“Calculation
Agent” shall mean the Person that has entered into the Calculation Agent Agreement with the Company providing for, among
other things, the determination of whether this Security will be automatically called prior to stated maturity and whether a Contingent
Coupon Payment will be made, the Call Price, if any, and the Maturity Payment Amount, if any, which term shall, unless the context
otherwise requires, include its successors under such Calculation Agent Agreement. The initial Calculation Agent shall be Wells
Fargo Securities, LLC. Pursuant to the Calculation Agent Agreement, the Company may appoint a different Calculation Agent from
time to time after the initial issuance of this Security without the consent of the Holder of this Security and without notifying
the Holder of this Security.

Certain Definitions 

A “Trading
Day” with respect to an Index means a day, as determined by the Calculation Agent, on which (i) the Relevant Stock
Exchanges with respect to each security underlying such

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Index are scheduled to be open for trading
for their respective regular trading sessions and (ii) each Related Futures or Options Exchange with respect to such Index
is scheduled to be open for trading for its regular trading session.

The “Relevant
Stock Exchange” for any security underlying an Index means the primary exchange or quotation system on which such security
is traded, as determined by the Calculation Agent.

The “Related
Futures or Options Exchange” for an Index means an exchange or quotation system where trading has a material effect (as
determined by the Calculation Agent) on the overall market for futures or options contracts relating to such Index.

Adjustments to an Index

If at any time the
method of calculating an Index or a Successor Equity Index, or the closing level thereof, is changed in a material respect, or
if an Index or a Successor Equity Index is in any other way modified so that such index does not, in the opinion of the Calculation
Agent, fairly represent the level of such index had those changes or modifications not been made, then the Calculation Agent will,
at the close of business in New York, New York, on each date that the closing level of such index is to be calculated, make such
calculations and adjustments as, in the good faith judgment of the Calculation Agent, may be necessary in order to arrive at a
level of an index comparable to such Index or Successor Equity Index as if those changes or modifications had not been made, and
the Calculation Agent will calculate the closing level of such Index or Successor Equity Index with reference to such index, as
so adjusted. Accordingly, if the method of calculating an Index or Successor Equity Index is modified so that the level of such
index is a fraction or a multiple of what it would have been if it had not been modified (e.g., due to a split or reverse
split in such equity index), then the Calculation Agent will adjust such Index or Successor Equity Index in order to arrive at
a level of such index as if it had not been modified (e.g., as if the split or reverse split had not occurred).

Discontinuance of an Index

If an Index Sponsor
discontinues publication of an Index, and such Index Sponsor or another entity publishes a successor or substitute equity index
that the Calculation Agent determines, in its sole discretion, to be comparable to such Index (a “Successor Equity Index”),
then, upon the Calculation Agent’s notification of that determination to the Trustee and the Company, the Calculation Agent
will substitute the Successor Equity Index as calculated by the relevant Index Sponsor or any other entity for purposes of calculating
the Closing Level of such Index on any date of determination. Upon any selection by the Calculation Agent of a Successor Equity
Index, the Company will cause notice to be given to the Holder of this Security.

In the event that
an Index Sponsor discontinues publication of an Index prior to the Final Observation Day, and the Calculation Agent determines
that no Successor Equity Index is available on any Observation Day, the Calculation Agent will calculate a substitute Closing Level
for such Index for each such Observation Day in accordance with the formula for and method of calculating such Index last in effect
prior to the discontinuance, but using only those securities that comprised such Index immediately prior to that discontinuance.
If a Successor

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Equity Index is selected or the Calculation
Agent calculates a level as a substitute for such Index, the Successor Equity Index or level will be used as a substitute for such
Index for all purposes, including the purpose of determining whether a Market Disruption Event exists.

If on an Observation
Day an Index Sponsor fails to calculate and announce the level of an Index, the Calculation Agent will calculate a substitute Closing
Level of such Index in accordance with the formula for and method of calculating such Index last in effect prior to the failure,
but using only those securities that comprised such Index immediately prior to that failure; provided that, if a Market
Disruption Event occurs or is continuing on such day with respect to such Index, then the provisions set forth above under “Market
Disruption Events” shall apply in lieu of the foregoing.

Market
Disruption Events 

A “Market
Disruption Event” with respect to an Index means any of the following events as determined by the Calculation Agent in
its sole discretion:

		(A)	The occurrence or existence of a material suspension of or limitation imposed on trading by the
Relevant Stock Exchanges or otherwise relating to securities which then comprise 20% or more of the level of such Index or any
Successor Equity Index at any time during the one-hour period that ends at the Close of Trading on that day, whether by reason
of movements in price exceeding limits permitted by those Relevant Stock Exchanges or otherwise.

 

		(B)	The occurrence or existence of a material suspension of or limitation imposed on trading by any
Related Futures or Options Exchange or otherwise in futures or options contracts relating to such Index or any Successor Equity
Index on any Related Futures or Options Exchange at any time during the one-hour period that ends at the Close of Trading on that
day, whether by reason of movements in price exceeding limits permitted by the Related Futures or Options Exchange or otherwise.

 

		(C)	The occurrence or existence of any event, other than an early closure, that materially disrupts
or impairs the ability of market participants in general to effect transactions in, or obtain market values for, securities that
then comprise 20% or more of the level of such Index or any Successor Equity Index on their Relevant Stock Exchanges at any time
during the one-hour period that ends at the Close of Trading on that day.

 

		(D)	The occurrence or existence of any event, other than an early closure, that materially disrupts
or impairs the ability of market participants in general to effect transactions in, or obtain market values for, futures or options
contracts relating to such Index or any Successor Equity Index on any Related Futures or Options Exchange at any time during the
one-hour period that ends at the Close of Trading on that day.

 

    	 	7	 

    	 

    

		(E)	The closure on any Exchange Business Day of the Relevant Stock Exchanges on which securities that
then comprise 20% or more of the level of such Index or any Successor Equity Index are traded or any Related Futures or Options
Exchange with respect to such Index or any Successor Equity Index prior to its Scheduled Closing Time unless the earlier closing
time is announced by the Relevant Stock Exchange or Related Futures or Options Exchange, as applicable, at least one hour prior
to the earlier of (1) the actual closing time for the regular trading session on such Relevant Stock Exchange or Related Futures
or Options Exchange, as applicable, and (2) the submission deadline for orders to be entered into the Relevant Stock Exchange or
Related Futures or Options Exchange, as applicable, system for execution at such actual closing time on that day.

 

		(F)	The Relevant Stock Exchange for any security underlying such Index or Successor Equity Index or
any Related Futures or Options Exchange with respect to such Index or Successor Equity Index fails to open for trading during its
regular trading session.

 

For purposes of determining
whether a Market Disruption Event has occurred with respect to an Index:

 

		(1)	the relevant percentage contribution of a security to the level of such Index or any Successor
Equity Index will be based on a comparison of (x) the portion of the level of such index attributable to that security and
(y) the overall level of such Index or Successor Equity Index, in each case immediately before the occurrence of the Market
Disruption Event;

 

		(2)	the “Close of Trading” on any Trading Day for such Index or any Successor Equity
Index means the Scheduled Closing Time of the Relevant Stock Exchanges with respect to the securities underlying such Index or
Successor Equity Index on such Trading Day; provided that, if the actual closing time of the regular trading session of any such
Relevant Stock Exchange is earlier than its Scheduled Closing Time on such Trading Day, then (x) for purposes of clauses (A)
and (C) of the definition of “Market Disruption Event” above, with respect to any security underlying such Index or
Successor Equity Index for which such Relevant Stock Exchange is its Relevant Stock Exchange, the “Close of Trading”
means such actual closing time and (y) for purposes of clauses (B) and (D) of the definition of “Market Disruption
Event” above, with respect to any futures or options contract relating to such Index or Successor Equity Index, the “Close
of Trading” means the latest actual closing time of the regular trading session of any of the Relevant Stock Exchanges, but
in no event later than the Scheduled Closing Time of the Relevant Stock Exchanges;

 

		(3)	the “Scheduled Closing Time” of any Relevant Stock Exchange or Related Futures
or Options Exchange on any Trading Day for such Index or any Successor Equity Index means the scheduled weekday closing time of
such Relevant Stock Exchange or Related Futures or Options Exchange on such Trading Day, without regard to after hours or any other
trading outside the regular trading session hours; and

 

    	 	8	 

    	 

    

		(4)	an “Exchange Business Day” means any Trading Day for such Index or any Successor
Equity Index on which each Relevant Stock Exchange for the securities underlying such Index or any Successor Equity Index and each
Related Futures or Options Exchange with respect to such Index or any Successor Equity Index are open for trading during their
respective regular trading sessions, notwithstanding any such Relevant Stock Exchange or Related Futures or Options Exchange closing
prior to its Scheduled Closing Time.

 

If a Market Disruption
Event occurs or is continuing with respect to an Index on any Observation Day, such Observation Day for such Index will be postponed
to the first succeeding Trading Day for such Index on which a Market Disruption Event for such Index has not occurred and is not
continuing. If a Market Disruption Event with respect to an Index occurs on a single Observation Day or occurs and is continuing
on more than one consecutive Observation Day, that single Observation Day or the first such Observation Day is referred to herein
as the “Original Disrupted Day” for such Index, and, in the case of a Market Disruption Event with respect to
an Index occurring or continuing on more than one consecutive Observation Day, each succeeding Observation Day is referred to herein
as a “Succeeding Disrupted Day” for such Index.

		•	If a Market Disruption Event occurs or is continuing with respect to an Index on fewer than eight
consecutive Observation Days, then the first succeeding Trading Day on which a Market Disruption Event for such Index has not occurred
or is not continuing will be deemed to be the Observation Day with respect to such Index for (i) the Observation Day scheduled
to occur on such first succeeding Trading Day, (ii) the Original Disrupted Day for such Index, and (iii) the Succeeding
Disrupted Day(s) for such Index, if any. As a result, if a Market Disruption Event occurs and is continuing with respect to an
Index on fewer than eight consecutive Observation Days, and, as a result, more than one Observation Day for such disrupted Index
is deemed to occur on a single Trading Day, the level of such Index on that single Trading Day will be used for each such postponed
Observation Day and the number of Observation Days in the applicable Observation Period will not be adjusted for purposes of calculating
the Variable Coupon Rate.

		•	If an originally scheduled Observation Day for an Index has been postponed eight Trading Days and
a Market Disruption Event occurs or is continuing with respect to such Index on such eighth Trading Day, then such eighth Trading
Day will be deemed to be the Observation Day for such Index only for the originally scheduled Observation Day that has been postponed
to such eighth Trading Day. In such circumstances, the Calculation Agent will determine the Closing Level of the disrupted Index
on such eighth Trading Day in accordance with the formula for and method of calculating the Closing Level of such Index last in
effect prior to commencement of the Market Disruption Event, using the closing price (or, with respect to any relevant security,
if a Market Disruption Event has occurred with respect to such security, its good faith estimate of the value of such security
at the Scheduled Closing Time of the Relevant Stock Exchange for such security or, if earlier, the actual closing time of the regular
trading session of such Relevant Stock Exchange) on that day of each security included in such Index. As used herein, “closing
price” means, with respect to any security on any date, the Relevant Stock Exchange traded or quoted price of such security
as of the Scheduled Closing Time

    	 	9	 

    	 

    

of the Relevant Stock Exchange
for such security or, if earlier, the actual closing time of the regular trading session of such Relevant Stock Exchange.

For the avoidance of doubt, an Observation
Period End-Date for an Index and the corresponding Contingent Coupon Payment Date will be postponed due to a non-Trading Day with
respect to either Index or a Market Disruption Event with respect to such Index on such Observation Period End-Date as described
herein; however, the subsequent Observation Period will commence on such originally scheduled Observation Period End-Date (that
is, the postponement of an Observation Period End-Date for an Index at the end of one Observation Period due to the occurrence
or continuation of a Market Disruption Event for such Index or non-Trading Day will not change the commencement date of the succeeding
Observation Period for either Index). If any Observation Day subject to postponement as described in the preceding paragraph is
also the Final Observation Day, for purposes of calculating the Maturity Payment Amount, the Final Observation Day will be so postponed.

Calculation
Agent

The
Calculation Agent will determine whether this Security will be automatically called prior to stated maturity and whether a Contingent
Coupon Payment will be made, the Call Price, if any, and the Maturity Payment Amount, if any. In addition, the Calculation Agent
will (i) determine if adjustments are required to the Closing Level of an Index under the circumstances described in this
Security, (ii) if publication of an Index is discontinued, select a Successor Equity Index or, if no Successor Equity Index
is available, determine the Closing Level of such Index under the circumstances described in this Security, and (iii) determine
whether a Market Disruption Event or non-Trading Day has occurred. 

The
Company covenants that, so long as this Security is Outstanding, there shall at all times be a Calculation Agent (which shall be
a broker-dealer, bank or other financial institution) with respect to this Security.

All
determinations made by the Calculation Agent with respect to this Security will be at the sole discretion of the Calculation Agent
and, in the absence of manifest error, will be conclusive for all purposes and binding on the Company and the Holder of this Security.

Redemption and Repayment

This
Security is not subject to repayment at the option of the Holder hereof prior to December 31, 2020. Except as set forth above
under “Automatic Call,” this Security is not subject to redemption prior to December 31, 2020. This Security is
not entitled to any sinking fund.

Acceleration

If an Event of Default,
as defined in the Indenture, with respect to this Security shall occur and be continuing, the Maturity Payment Amount (calculated
as set forth in the next two sentences) of this Security may be declared due and payable in the manner and with the effect provided
in the Indenture. The amount payable to the Holder hereof upon any acceleration permitted under the Indenture will be equal to
the Maturity Payment Amount hereof calculated as provided herein, plus a portion of a final Contingent Coupon Payment, if any.
The Maturity Payment Amount

    	 	10	 

    	 

    

and any final Contingent Coupon Payment
will be calculated as though the date of acceleration were the Final Observation Day and an Observation Period End-Date.

__________________

Reference
is hereby made to the further provisions of this Security set forth on the reverse hereof, which further provisions shall for all
purposes have the same effect as if set forth at this place.

Unless the certificate
of authentication hereon has been executed by the Trustee referred to on the reverse hereof by manual signature or its duly authorized
agent under the Indenture referred to on the reverse hereof by manual signature, this Security shall not be entitled to any benefit
under the Indenture or be valid or obligatory for any purpose.

 

 

[The remainder of this page has
been left intentionally blank]

 

    	 	11	 

    	 

    

IN
WITNESS WHEREOF, the Company has caused this instrument to be duly executed.

	

DATED:

	 	 

 

	 	WELLS FARGO & COMPANY
	 	 	 
	 	By:	 
	 	 	 
	 	 	 
	 	 	Its:	 
	 	 	 
	 	Attest:	 
	 	 	 
	 	 	 
	 	 	
	 	 	

 

TRUSTEE’S
CERTIFICATE OF

AUTHENTICATION

This
is one of the Securities of the 

series
designated therein described

in
the within-mentioned Indenture.

 

 

	CITIBANK, N.A.,	 
	 	as Trustee	 
	 	 	 
	By:	 	 
	 	Authorized Signature	 
	 	 	 
	OR	 
	 	 	 
	WELLS FARGO BANK, N.A.,	 
	 	as Authenticating Agent for the Trustee	 
	 	 	 
	By:	 	 
	 	Authorized Signature	 

 

 

 

 

    	 	12	 

    	 

    

[Reverse of Note]

 

 

WELLS FARGO & COMPANY

 

MEDIUM-TERM NOTE, SERIES S

 

Due Nine Months or More From Date of Issue

 

Principal at Risk Securities Linked to the
Lowest Performing of the

S&P 500® Index and the Russell 2000® Index due December 31, 2020

 

This Security is
one of a duly authorized issue of securities of the Company (herein called the “Securities”), issued and to
be issued in one or more series under an indenture dated as of February 21, 2017, as amended or supplemented from time to
time (herein called the “Indenture”), between the Company and Citibank, N.A., as Trustee (herein called the
“Trustee,” which term includes any successor trustee under the Indenture), to which Indenture and all indentures
supplemental thereto reference is hereby made for a statement of the respective rights, limitations of rights, duties and immunities
thereunder of the Company, the Trustee and the Holders of the Securities, and of the terms upon which the Securities are, and are
to be, authenticated and delivered. This Security is one of the series of the Securities designated as Medium-Term Notes, Series S,
of the Company. The amount payable on the Securities of this series may be determined by reference to the performance of one or
more equity-, commodity- or currency-based indices, exchange traded funds, securities, commodities, currencies, statistical measures
of economic or financial performance, or a basket comprised of two or more of the foregoing, or any other market measure or may
bear interest at a fixed rate or a floating rate. The Securities of this series may mature at different times, be redeemable at
different times or not at all, be repayable at the option of the Holder at different times or not at all and be denominated in
different currencies.

The Securities are
issuable only in registered form without coupons and will be either (a) book-entry securities represented by one or more
Global Securities recorded in the book-entry system maintained by the Depositary or (b) certificated securities issued to and
registered in the names of, the beneficial owners or their nominees.

The Company agrees,
to the extent permitted by law, not to voluntarily claim the benefits of any laws concerning usurious rates of interest against
a Holder of this Security.

Modification and Waivers 

The Indenture permits,
with certain exceptions as therein provided, the amendment thereof and the modification of the rights and obligations of the Company
and the rights of the Holders of the Securities of each series to be affected under the Indenture at any time by the Company and
the Trustee with the consent of the Holders of a majority in principal amount of the Securities at the time Outstanding of all
series to be affected, acting together as a class. The Indenture also contains provisions permitting the Holders of a majority
in principal amount of the Securities of all series at the time Outstanding affected by certain provisions of the Indenture, acting
together as a class, on

    	 	13	 

    	 

    

behalf of the Holders of all Securities
of such series, to waive compliance by the Company with those provisions of the Indenture. Certain past defaults under the Indenture
and their consequences may be waived under the Indenture by the Holders of a majority in principal amount of the Securities of
each series at the time Outstanding, on behalf of the Holders of all Securities of such series. Solely for the purpose of determining
whether any consent, waiver, notice or other action or Act to be taken or given by the Holders of Securities pursuant to the Indenture
has been given or taken by the Holders of Outstanding Securities in the requisite aggregate principal amount, the principal amount
of this Security will be deemed to be equal to the amount set forth on the face hereof as the “Face Amount” hereof.
Any such consent or waiver by the Holder of this Security shall be conclusive and binding upon such Holder and upon all future
Holders of this Security and of any Security issued upon the registration of transfer hereof or in exchange herefor or in lieu
hereof, whether or not notation of such consent or waiver is made upon this Security.

Defeasance

Section 403
and Article Fifteen of the Indenture and the provisions of clause (ii) of Section 401(1)(B) of the Indenture, relating
to defeasance at any time of (a) the entire indebtedness on this Security and (b) certain restrictive covenants, upon
compliance by the Company with certain conditions set forth therein, shall not apply to this Security. The remaining provisions
of Section 401 of the Indenture shall apply to this Security.

Authorized Denominations

This Security is
issuable only in registered form without coupons in denominations of $1,000 or any amount in excess thereof which is an integral
multiple of $1,000.

Registration of Transfer

Upon due presentment
for registration of transfer of this Security at the office or agency of the Company in the City of Minneapolis, Minnesota, a new
Security or Securities of this series, with the same terms as this Security, in authorized denominations for an equal aggregate
Face Amount will be issued to the transferee in exchange herefor, as provided in the Indenture and subject to the limitations provided
therein and to the limitations described below, without charge except for any tax or other governmental charge imposed in connection
therewith.

This Security is
exchangeable for definitive Securities in registered form only if (x) the Depositary notifies the Company that it is unwilling
or unable to continue as Depositary for this Security or if at any time the Depositary ceases to be a clearing agency registered
under the Securities Exchange Act of 1934, as amended, and a successor depositary is not appointed within 90 days after the
Company receives such notice or becomes aware of such ineligibility, (y) the Company in its sole discretion determines that
this Security shall be exchangeable for definitive Securities in registered form and notifies the Trustee thereof or (z) an Event
of Default with respect to the Securities represented hereby has occurred and is continuing. If this Security is exchangeable pursuant
to the preceding sentence, it shall be exchangeable for definitive Securities in registered form, bearing interest at the same
rate, having the same date of issuance, Stated Maturity Date and other terms and of authorized denominations aggregating a like
amount.

    	 	14	 

    	 

    

This Security may
not be transferred except as a whole by the Depositary to a nominee of the Depositary or by a nominee of the Depositary to the
Depositary or another nominee of the Depositary or by the Depositary or any such nominee to a successor of the Depositary or a
nominee of such successor. Except as provided above, owners of beneficial interests in this Global Security will not be entitled
to receive physical delivery of Securities in definitive form and will not be considered the Holders hereof for any purpose under
the Indenture.

Prior to due presentment
of this Security for registration of transfer, the Company, the Trustee and any agent of the Company or the Trustee may treat the
Person in whose name this Security is registered as the owner hereof for all purposes, whether or not this Security be overdue,
and neither the Company, the Trustee nor any such agent shall be affected by notice to the contrary.

Obligation of the Company Absolute

No reference herein
to the Indenture and no provision of this Security or the Indenture shall alter or impair the obligation of the Company, which
is absolute and unconditional, to pay the Contingent Coupon Payments, if any, and the Maturity Payment Amount or the Call Price,
as applicable, on this Security at the times, place and rate, and in the coin or currency, herein prescribed, except as otherwise
provided in this Security.

No Personal Recourse

No recourse shall
be had for the payment of any Contingent Coupon Payments or the Maturity Payment Amount or the Call Price, as applicable, on this
Security or for any claim based hereon, or otherwise in respect hereof, or based on or in respect of the Indenture or any indenture
supplemental thereto, against any incorporator, stockholder, officer or director, as such, past, present or future, of the Company
or any successor corporation, whether by virtue of any constitution, statute or rule of law, or by the enforcement of any assessment
or penalty or otherwise, all such liability being, by the acceptance hereof and as part of the consideration for the issuance hereof,
expressly waived and released.

Defined Terms

All terms used in
this Security which are defined in the Indenture shall have the meanings assigned to them in the Indenture unless otherwise defined
in this Security.

Governing Law

This Security shall
be governed by and construed in accordance with the law of the State of New York, without regard to principles of conflicts of
laws.

    	 	15	 

    	 

    

ABBREVIATIONS 

 

The
following abbreviations, when used in the inscription on the face of this instrument, shall be construed as though they were written
out in full according to applicable laws or regulations:

 

	TEN COM	--	as tenants in common
	 	 	 
	TEN ENT	--	as tenants by the entireties
	 	 	 
	JT TEN	--	as joint tenants with right
	 	 	of survivorship and not
	 	 	as tenants in common

 

	UNIF GIFT MIN ACT --	 	 Custodian 	 
	 	(Cust)	 	(Minor)

 

	Under Uniform Gifts to Minors Act	 
	 	 
	 	 
	(State)	 

 

Additional abbreviations
may also be used though not in the above list.

 

 

FOR VALUE RECEIVED,
the undersigned hereby sell(s) and transfer(s) unto

 

	Please Insert Social Security or	 
	Other Identifying Number of Assignee
	 	 
	 	 

 

 

	 
	 
	 

(Please
print or type name and address including postal zip code of Assignee)

 

 

    	 	16	 

    	 

    

the within Security of WELLS FARGO & COMPANY
and does hereby irrevocably constitute and appoint __________________ attorney to transfer the said Security on the books of the
Company, with full power of substitution in the premises.

 

 

Dated: _________________________

 

	 	 
	 	 
	 	 
	 	 

 

 

 

NOTICE: The signature to this assignment must
correspond with the name as written upon the face of the within instrument in every particular, without alteration or enlargement
or any change whatever.

 

 

 

    	 	17

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