Document:

Exhibit 10.3

 

[FORM OF SERIES [A][B]
WARRANT]

 

PACIFIC ETHANOL, INC.

 

Series
[A][B] Warrant To Purchase Common Stock

 

Series [A][B] Warrant No.: [A][B]-            

Date of Issuance: [           ], 2013 (“Issuance
Date”)

 

Pacific Ethanol, Inc.,
a Delaware corporation (the “Company”), hereby certifies that, for good and valuable consideration, the receipt
and sufficiency of which are hereby acknowledged, [CAPITAL VENTURES INTERNATIONAL][OTHER
BUYERS], the registered holder hereof or its permitted assigns (the “Holder”), is entitled, subject to the
terms set forth below, to purchase from the Company, at the Exercise Price (as defined below) then in effect, upon exercise of
this Warrant to Purchase Common Stock (including any Warrants to Purchase Common Stock issued in exchange, transfer or replacement
hereof, the “Warrant”), at any time or times on or after the first anniversary of the [INSERT IN SERIES A WARRANT:
Issuance Date][INSERT IN SERIES B WARRANT: Series B Closing Date (as defined in the Securities Purchase Agreement (as defined
below))] (the “Initial Exercisability Date”), but not after 11:59 p.m., New York time, on the Expiration Date
(as defined below), [______________]1 (subject to adjustment as provided herein) fully paid and nonassessable shares
of Common Stock (as defined below) (the “Warrant Shares”). Except as otherwise defined herein, capitalized
terms in this Warrant shall have the meanings set forth in Section 16. This Warrant is one of the Warrants to Purchase Common
Stock (the “SPA Warrants”) issued pursuant to (i) Section 1 of that certain Securities Purchase Agreement,
dated as of [ , 2013] (the “Subscription Date”), by and among the Company and the investors (the “Buyers”)
referred to therein, as amended from time to time (the “Securities Purchase Agreement”) and (ii) the
Company’s Registration Statement on Form S-3 (File number 333-180731) (the “Registration Statement”).

 

1.                 
EXERCISE OF WARRANT.

 

(a)               
Mechanics of Exercise. Subject to the terms and conditions hereof (including, without limitation, the limitations
set forth in Section 1(f)), this Warrant may be exercised by the Holder on any day on or after the Initial Exercisability
Date, in whole or in part, by delivery (whether via facsimile or otherwise) of a written notice, in the form attached hereto as
Exhibit A (the “Exercise Notice”), of the Holder’s election to exercise this Warrant. Within
one (1) Trading Day following an exercise of this Warrant as aforesaid, the Holder shall deliver payment to the Company of an amount
equal to the Exercise Price in effect on the date of such exercise multiplied by the number of Warrant Shares as to which this
Warrant was so exercised (the “Aggregate Exercise Price”) in cash or via wire transfer of immediately available
funds if the Holder did not notify the Company in such Exercise Notice that such exercise was made pursuant to a Cashless Exercise
(as defined in Section 1(d)). The Holder shall not be required to deliver the original of this Warrant in order to effect
an exercise hereunder. Execution and delivery of an Exercise Notice with respect to less than all of the Warrant Shares shall have
the same effect as cancellation of the original of this Warrant and issuance of a new Warrant evidencing the right to purchase
the remaining number of Warrant Shares. Execution and delivery of an Exercise Notice for all of the then-remaining Warrant Shares
shall have the same effect as cancellation of the original of this Warrant after delivery of the Warrant Shares in accordance with
the terms hereof. On or before the first (1st) Trading Day following the date on which the Company has received an Exercise
Notice, the Company shall transmit by facsimile an acknowledgment of confirmation of receipt of such Exercise Notice, in the form
attached hereto as Exhibit B, to the Holder and the Company’s transfer agent (the “Transfer Agent”).
On or before the third (3rd) Trading Day following the date on which the Company has received such Exercise Notice,
the Company shall (X) provided that the Transfer Agent is participating in The Depository Trust Company (“DTC”)
Fast Automated Securities Transfer Program, upon the request of the Holder, credit such aggregate number of shares of Common Stock
to which the Holder is entitled pursuant to such exercise to the Holder’s or its designee’s balance account with DTC
through its Deposit/Withdrawal at Custodian system, or (Y) if the Transfer Agent is not participating in the DTC Fast Automated
Securities Transfer Program, issue and deliver to the Holder or, at the Holder’s instruction pursuant to the Exercise Notice,
the Holder’s agent or designee, in each case, sent by reputable overnight courier to the address as specified in the applicable
Exercise Notice, a certificate, registered in the Company’s share register in the name of the Holder or its designee (as
indicated in the applicable Exercise Notice), for the number of shares of Common Stock to which the Holder is entitled pursuant
to such exercise. Upon delivery of an Exercise Notice, the Holder shall be deemed for all corporate purposes to have become the
holder of record of the Warrant Shares with respect to which this Warrant has been exercised, irrespective of the date such Warrant
Shares are credited to the Holder’s DTC account or the date of delivery of the certificates evidencing such Warrant Shares
(as the case may be). If this Warrant is submitted in connection with any exercise pursuant to this Section 1(a) and the number
of Warrant Shares represented by this Warrant submitted for exercise is greater than the number of Warrant Shares being acquired
upon an exercise, then, at the request of the Holder, the Company shall as soon as practicable and in no event later than three
(3) Business Days after any exercise and at its own expense, issue and deliver to the Holder (or its designee) a new Warrant (in
accordance with Section 7(d)) representing the right to purchase the number of Warrant Shares purchasable immediately prior
to such exercise under this Warrant, less the number of Warrant Shares with respect to which this Warrant is exercised. No fractional
shares of Common Stock are to be issued upon the exercise of this Warrant, but rather the number of shares of Common Stock to be
issued shall be rounded up to the nearest whole number. The Company shall pay any and all taxes and fees which may be payable with
respect to the issuance and delivery of Warrant Shares upon exercise of this Warrant. Notwithstanding the foregoing, except in
the case where an exercise of this Warrant is validly made pursuant to a Cashless Exercise (as defined in Section 1(d)), the
Company’s failure to deliver Warrant Shares to the Holder on or prior to the second (2nd) Trading Day after the Company’s
receipt of the Aggregate Exercise Price shall not be deemed to be a breach of this Warrant.

 

 

1 Insert pro-rata share of
amount equal to 75% of the quotient of (x) $[INSERT IN SERIES A WARANTS: 6][INSERT IN SERIES B WARRANTS: 8] million,
divided by (y) 110% of the Closing Bid Price as of the close of business immediately prior to the time of
execution of the Securities Purchase Agreement (as adjusted for any stock splits, stock dividends, recapitalizations
and similar events)

 

    	1

    	 

    

 

(b)              
Exercise Price. For purposes of this Warrant, “Exercise Price” means $0.52, subject to adjustment
as provided herein.

 

(c)               
Company’s Failure to Timely Deliver Securities. If the Company shall fail, for any reason or for no reason,
to issue to the Holder within the later of (i) three (3) Trading Days after receipt of the applicable Exercise Notice and (ii)
two (2) Trading Days after the Company’s receipt of the Aggregate Exercise Price (or valid notice of a Cashless Exercise)
(such later date, the “Share Delivery Deadline”), a certificate for the number of shares of Common Stock to
which the Holder is entitled and register such shares of Common Stock on the Company’s share register or to credit the Holder’s
balance account with DTC for such number of shares of Common Stock to which the Holder is entitled upon the Holder’s exercise
of this Warrant (as the case may be) (a “Delivery Failure”), and if on or after such Share Delivery Deadline
the Holder purchases (in an open market transaction or otherwise) shares of Common Stock to deliver in satisfaction of a sale by
the Holder of all or any portion of the number of shares of Common Stock, or a sale of a number of shares of Common Stock equal
to all or any portion of the number of shares of Common Stock, issuable upon such exercise that the Holder so anticipated receiving
from the Company, then, in addition to all other remedies available to the Holder, the Company shall, within three (3) Business
Days after the Holder’s request and in the Holder’s discretion, either (i) pay cash to the Holder in an amount equal
to the Holder’s total purchase price (including brokerage commissions and other out-of-pocket expenses, if any) for the shares
of Common Stock so purchased (including, without limitation, by any other Person in respect, or on behalf, of the Holder) (the
“Buy-In Price”), at which point the Company’s obligation to so issue and deliver such certificate or credit
the Holder’s balance account with DTC for the number of shares of Common Stock to which the Holder is entitled upon the Holder’s
exercise hereunder (as the case may be) (and to issue such shares of Common Stock) shall terminate, or (ii) promptly honor its
obligation to so issue and deliver to the Holder a certificate or certificates representing such shares of Common Stock or credit
the Holder’s balance account with DTC for the number of shares of Common Stock to which the Holder is entitled upon the Holder’s
exercise hereunder (as the case may be) and pay cash to the Holder in an amount equal to the excess (if any) of the Buy-In Price
over the product of (A) such number of shares of Common Stock multiplied by (B) the lowest Closing Sale Price of the Common Stock
on any Trading Day during the period commencing on the date of the applicable Exercise Notice and ending on the date immediately
preceding the date of such issuance and payment under this clause (ii).

 

(d)              
Cashless Exercise. Notwithstanding anything contained herein to the contrary (other than Section 1(f) below),
if at the time of exercise hereof a registration statement is not effective (or the prospectus contained therein is not available
for use) for the issuance by the Company to the Holder of all of the Warrant Shares, then the Holder may, in its sole discretion,
exercise this Warrant in whole or in part and, in lieu of making the cash payment otherwise contemplated to be made to the Company
upon such exercise in payment of the Aggregate Exercise Price, elect instead to receive upon such exercise the “Net Number”
of shares of Common Stock determined according to the following formula (a “Cashless Exercise”):

 

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Net Number = (A x B) - (A x C)

D

 

For purposes of the foregoing formula:

 

	 	A =	the total number of shares with respect to which this Warrant is then being exercised.
	 	 	 
	 	B =	the quotient of (x) the sum of the VWAP of the Common Stock of each of the ten (10) Trading Days ending at the close of business on the Principal Market immediately prior to the time of exercise as set forth in the applicable Exercise Notice, divided by (y) ten (10).
	 	 	 
	 	C =	the Exercise Price then in effect for the applicable Warrant Shares at the time of such exercise.
	 	 	 
	 	D =	the VWAP of the Common Stock at the close of business on the Principal Market on the date of the delivery of the applicable Exercise Notice.

 

(e)               
Disputes. In the case of a dispute as to the determination of the Exercise Price or the arithmetic calculation of
the number of Warrant Shares to be issued pursuant to the terms hereof, the Company shall promptly issue to the Holder the number
of Warrant Shares that are not disputed and resolve such dispute in accordance with Section 13.

 

(f)               
Limitations on Exercises.

 

(i)                
Beneficial Ownership. Notwithstanding anything to the contrary contained in this Warrant, this Warrant shall not
be exercisable by the Holder hereof to the extent (but only to the extent) that after giving effect to such exercise the Holder
(together with any of its affiliates) would beneficially own in excess of  9.99% (the “Maximum Percentage”)
of the Common Stock. To the extent the above limitation applies, the determination of whether this Warrant shall be exercisable
(vis-à-vis other convertible, exercisable or exchangeable securities owned by the Holder or any of its affiliates) and of
which such securities shall be convertible, exercisable or exchangeable (as the case may be, as among all such securities owned
by the Holder) shall, subject to such Maximum Percentage limitation, be determined on the basis of the first submission to the
Company for conversion, exercise or exchange (as the case may be). No prior inability to exercise this Warrant pursuant to this
paragraph shall have any effect on the applicability of the provisions of this paragraph with respect to any subsequent determination
of exercisability. For the purposes of this paragraph, beneficial ownership and all determinations and calculations (including,
without limitation, with respect to calculations of percentage ownership) shall be determined in accordance with Section 13(d)
of the 1934 Act (as defined in the Securities Purchase Agreement) and the rules and regulations promulgated thereunder. The provisions
of this paragraph shall be implemented in a manner otherwise than in strict conformity with the terms of this paragraph to correct
this paragraph (or any portion hereof) which may be defective or inconsistent with the intended Maximum Percentage beneficial ownership
limitation herein contained or to make changes or supplements necessary or desirable to properly give effect to such Maximum Percentage
limitation. The limitations contained in this paragraph shall apply to a successor Holder of this Warrant. The holders of Common
Stock shall be third party beneficiaries of this paragraph and the Company may not waive this paragraph without the consent of
holders of a majority of its Common Stock. For any reason at any time, upon the written or oral request of the Holder, the Company
shall within one (1) Business Day confirm orally and in writing to the Holder the number of shares of Common Stock then outstanding,
including by virtue of any prior conversion or exercise of convertible or exercisable securities into Common Stock, including,
without limitation, pursuant to this Warrant or securities issued pursuant to the Securities Purchase Agreement. By written notice
to the Company, any Holder may increase or decrease the Maximum Percentage to any other percentage not in excess of 9.99% specified
in such notice; provided that (i) any such increase will not be effective until the 61st day after such notice is delivered to
the Company, and (ii) any such increase or decrease will apply only to the Holder sending such notice and not to any other holder
of SPA Warrants.

 

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(ii)              
Principal Market Regulation. The Company shall not issue any shares of Common Stock upon the exercise of this Warrant
if the issuance of such shares of Common Stock (taken together with the issuance of such shares upon the exercise of the SPA Warrants
and the conversion of the Notes or otherwise pursuant to the terms of the Notes) would exceed the aggregate number of shares of
Common Stock which the Company may issue upon exercise or conversion (as the case may be) of the Warrants and the Notes without
breaching the Company’s obligations under the rules or regulations of the Principal Market (the number of shares which may
be issued without violating such rules and regulations, the “Exchange Cap”), except that such limitation shall
not apply in the event that the Company (A) obtains the approval of its stockholders as required by the applicable rules of the
Principal Market for issuances of shares of Common Stock in excess of such amount or (B) obtains a written opinion from outside
counsel to the Company that such approval is not required, which opinion shall be reasonably satisfactory to the Holder or (C)
obtain a waiver from the Principal Market of the applicable rules of such Principal Market for the issuance of shares of Common
Stock in excess of such amount. Until such approval or such written opinion is obtained, no Buyer shall be issued in the aggregate,
upon conversion or exercise (as the case may be) of any Notes or any of the Warrants, shares of Common Stock in an amount greater
than the product of (i) the Exchange Cap as of the Issuance Date multiplied by (ii) the quotient of (1) the original principal
amount of Notes issued to such Buyer pursuant to the Securities Purchase Agreement on the Series A Closing Date (as defined in
the Securities Purchase Agreement) divided by (2) the aggregate original principal amount of all Notes issued to the Buyers pursuant
to the Securities Purchase Agreement on the Series A Closing Date (with respect to each Buyer, the “Exchange Cap Allocation”).
In the event that any Buyer shall sell or otherwise transfer any of such Buyer’s Warrants, the transferee shall be allocated
a pro rata portion of such Buyer’s Exchange Cap Allocation with respect to such portion of such Warrants so transferred,
and the restrictions of the prior sentence shall apply to such transferee with respect to the portion of the Exchange Cap Allocation
so allocated to such transferee. Upon conversion and exercise in full of a holder’s Notes and Warrants, the difference
(if any) between such holder’s Exchange Cap Allocation and the number of shares of Common Stock actually issued to such holder
upon such holder's conversion in full of such Notes and such holder’s exercise in full of such Warrants shall be allocated
to the respective Exchange Cap Allocations of the remaining holders of Notes and Warrants on a pro rata basis in proportion to
the shares of Common Stock underlying the Notes and Warrants then held by each such holder. In the event that the Company is prohibited
from issuing any shares of Common Stock pursuant to this Section 1(f)(ii) (the “Exchange Cap Shares”), in lieu
of issuing and delivering such Exchange Cap Shares to the Holder, the Company shall pay cash to the Holder in exchange for the
cancellation of such portion of this Warrant exercisable into such Exchange Cap Shares at a price equal to the sum of (x) the product
of (A) such number of Exchange Cap Shares and (B) the greatest Closing Sale Price of the Common Stock on any Trading Day during
the period commencing on the date the Holder delivers the applicable Exercise Notice with respect to such Exchange Cap Shares to
the Company and ending on the date immediately preceding the date of such payment under this Section 1(f)(ii) and (y) to the extent
the Holder purchases (in an open market transaction or otherwise) shares of Common Stock to deliver in satisfaction of a sale by
the Holder of Exchange Cap Shares, any brokerage commissions and other out-of-pocket expenses, if any, of the Holder incurred in
connection therewith.

 

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(g)              
Insufficient Authorized Shares. From and after the Initial Exercisability Date, the Company shall at all times keep
reserved for issuance under this Warrant a number of shares of Common Stock at least equal to the maximum number of shares of Common
Stock as shall be necessary to satisfy the Company’s obligation to issue shares of Common Stock hereunder (without regard
to any limitation otherwise contained herein with respect to the number of shares of Common Stock that may be acquirable upon exercise
of this Warrant). From and after the Initial Exercisability Date, if, notwithstanding the foregoing, and not in limitation thereof,
at any time while any of the SPA Warrants remain outstanding the Company does not have a sufficient number of authorized and unreserved
shares of Common Stock to satisfy its obligation to reserve for issuance upon exercise of the SPA Warrants at least a number of
shares of Common Stock (the “Required Reserve Amount”) equal to the number of shares of Common Stock as shall
from time to time be necessary to effect the exercise of all of the SPA Warrants then outstanding (an “Authorized Share
Failure”), then the Company shall immediately take all action reasonably necessary to increase the Company’s authorized
shares of Common Stock to an amount sufficient to allow the Company to reserve the Required Reserve Amount for all the SPA Warrants
then outstanding. Without limiting the generality of the foregoing sentence, as soon as practicable after the date of the occurrence
of an Authorized Share Failure, but in no event later than ninety (90) days after the occurrence of such Authorized Share Failure,
the Company shall hold a meeting of its stockholders for the approval of an increase in the number of authorized shares of Common
Stock. In connection with such meeting, the Company shall provide each stockholder with a proxy statement and shall use its reasonable
best efforts to solicit its stockholders’ approval of such increase in authorized shares of Common Stock and to cause its
board of directors to recommend to the stockholders that they approve such proposal. In the event that the Company is prohibited
from issuing shares of Common Stock upon an exercise of this Warrant due to the failure by the Company to have sufficient shares
of Common Stock available out of the authorized but unissued shares of Common Stock (such unavailable number of shares of Common
Stock, the “Authorization Failure Shares”), in lieu of delivering such Authorization Failure Shares to the Holder,
the Company shall pay cash in exchange for the cancellation of such portion of this Warrant exercisable into such Authorized Failure
Shares at a price equal to the sum of (i) the product of (x) such number of Authorization Failure Shares and (y) the greatest Closing
Sale Price of the Common Stock on any Trading Day during the period commencing on the date the Holder delivers the applicable Exercise
Notice with respect to such Authorization Failure Shares to the Company and ending on the date immediately preceding the date of
such issuance and payment under this Section 1(g) and (ii) to the extent the Holder purchases (in an open market transaction or
otherwise) shares of Common Stock to deliver in satisfaction of a sale by the Holder of Authorization Failure Shares, any brokerage
commissions and other out-of-pocket expenses, if any, of the Holder incurred in connection therewith.

 

2.                 
ADJUSTMENT OF EXERCISE PRICE AND NUMBER OF WARRANT SHARES. The Exercise
Price and number of Warrant Shares issuable upon exercise of this Warrant are subject to adjustment from time to time as set forth
in this Section 2.

 

(a)               
Stock Dividends and Splits. Without limiting any provision of Section 2(b) or Section 4, if the Company,
at any time on or after the date of the Securities Purchase Agreement, (i) pays a stock dividend on one or more classes of its
then outstanding shares of Common Stock or otherwise makes a distribution on any class of capital stock that is payable in shares
of Common Stock, (ii) subdivides (by any stock split, stock dividend, recapitalization or otherwise) one or more classes of its
then outstanding shares of Common Stock into a larger number of shares or (iii) combines (by combination, reverse stock split or
otherwise) one or more classes of its then outstanding shares of Common Stock into a smaller number of shares, then in each such
case the Exercise Price shall be multiplied by a fraction of which the numerator shall be the number of shares of Common Stock
outstanding immediately before such event and of which the denominator shall be the number of shares of Common Stock outstanding
immediately after such event. Any adjustment made pursuant to clause (i) of this paragraph shall become effective immediately after
the record date for the determination of stockholders entitled to receive such dividend or distribution, and any adjustment pursuant
to clause (ii) or (iii) of this paragraph shall become effective immediately after the effective date of such subdivision or combination.
If any event requiring an adjustment under this paragraph occurs during the period that an Exercise Price is calculated hereunder,
then the calculation of such Exercise Price shall be adjusted appropriately to reflect such event.

 

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(b)              
Adjustment Upon Issuance of Shares of Common Stock. If and whenever on or after the date of the Securities Purchase
Agreement, the Company issues or sells, or in accordance with this Section 2 is deemed to have issued or sold, any shares
of Common Stock (including the issuance or sale of shares of Common Stock owned or held by or for the account of the Company, but
excluding any Excluded Securities issued or sold or deemed to have been issued or sold) for a consideration per share (the “New
Issuance Price”) less than a price equal to the Exercise Price in effect immediately prior to such issue or sale or deemed
issuance or sale (such Exercise Price then in effect is referred to as the “Applicable Price”) (the foregoing
a “Dilutive Issuance”), then immediately after such Dilutive Issuance, the Exercise Price then in effect shall
be reduced to an amount equal to the product of (A) the Exercise Price in effect immediately prior
to such Dilutive Issuance and (B) the quotient determined by dividing (1) the sum of (I) the product derived by multiplying
the Exercise Price in effect immediately prior to such Dilutive Issuance and the number of Common Stock Deemed Outstanding immediately
prior to such Dilutive Issuance plus (II) the net consideration, if any, received by the Company upon such Dilutive Issuance (as
determined and, if applicable, adjusted, pursuant to Section 2(b)(iv) below), by (2) the product derived by multiplying (I) the
Exercise Price in effect immediately prior to such Dilutive Issuance by (II) the sum of (x) the number of Common Stock Deemed
Outstanding immediately prior to such Dilutive Issuance and (y) the number of shares of Common Stock issued (or deemed issued in
such Dilutive Issuance pursuant to Sections 2(b)(i) and 2(b)(ii) below, regardless of whether such Options or Convertible Securities
are actually convertible or exercisable at such time, but excluding any shares of Common Stock issued (or deemed issued pursuant
to Sections 2(b)(i) and 2(b)(ii) below) under any Secondary Security (as defined below), if any). For all purposes of the
foregoing (including, without limitation, determining the adjusted Exercise Price and consideration per share under this Section 2(b)),
the following shall be applicable:

 

(i)                
Issuance of Options. If the Company in any manner grants or sells any Options and the lowest price per share for
which one share of Common Stock is issuable upon the exercise of any such Option or upon conversion, exercise or exchange of any
Convertible Securities issuable upon exercise of any such Option is less than the Applicable Price, then such share of Common Stock
shall be deemed to be outstanding and to have been issued and sold by the Company at the time of the granting or sale of such Option
for such price per share. For purposes of this Section 2(b)(i), the “lowest price per share for which one share of Common
Stock is issuable upon the exercise of any such Options or upon conversion, exercise or exchange of any Convertible Securities
issuable upon exercise of any such Option” shall be equal to (1) the lower of (x) the sum of the lowest amounts of consideration
(if any) received or receivable by the Company with respect to any one share of Common Stock upon the granting or sale of such
Option, upon exercise of such Option and upon conversion, exercise or exchange of any Convertible Security issuable upon exercise
of such Option and (y) the lowest exercise price set forth in such Option for which one share of Common Stock is issuable upon
the exercise of any such Options or upon conversion, exercise or exchange of any Convertible Securities issuable upon exercise
of any such Option minus (2) the sum of all amounts paid or payable to the holder of such Option (or any other Person) upon the
granting or sale of such Option, upon exercise of such Option and upon conversion, exercise or exchange of any Convertible Security
issuable upon exercise of such Option plus the value of any other consideration received or receivable by, or benefit conferred
on, the holder of such Option (or any other Person). Except as contemplated below, no further adjustment of the Exercise Price
shall be made upon the actual issuance of such shares of Common Stock or of such Convertible Securities upon the exercise of such
Options or upon the actual issuance of such shares of Common Stock upon conversion, exercise or exchange of such Convertible Securities.

 

(ii)              
Issuance of Convertible Securities. If the Company in any manner issues or sells any Convertible Securities and the
lowest price per share for which one share of Common Stock is issuable upon the conversion, exercise or exchange thereof is less
than the Applicable Price, then such share of Common Stock shall be deemed to be outstanding and to have been issued and sold by
the Company at the time of the issuance or sale of such Convertible Securities for such price per share. For the purposes of this
Section 2(b)(ii)2(b)(ii), the “lowest price per share for which one share of Common Stock is issuable upon the conversion,
exercise or exchange thereof” shall be equal to (1) the lower of (x) the sum of the lowest amounts of consideration (if any)
received or receivable by the Company with respect to one share of Common Stock upon the issuance or sale of the Convertible Security
and upon conversion, exercise or exchange of such Convertible Security and (y) the lowest conversion price set forth in such Convertible
Security for which one share of Common Stock is issuable upon conversion, exercise or exchange thereof minus (2) the sum of all
amounts paid or payable to the holder of such Convertible Security (or any other Person) upon the issuance or sale of such Convertible
Security plus the value of any other consideration received or receivable by, or benefit conferred on, the holder of such Convertible
Security (or any other Person). Except as contemplated below, no further adjustment of the Exercise Price shall be made upon the
actual issuance of such shares of Common Stock upon conversion, exercise or exchange of such Convertible Securities, and if any
such issue or sale of such Convertible Securities is made upon exercise of any Options for which adjustment of this Warrant has
been or is to be made pursuant to other provisions of this Section 2(b), except as contemplated below, no further adjustment
of the Exercise Price shall be made by reason of such issue or sale.

 

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(iii)            
Change in Option Price or Rate of Conversion. If the purchase or exercise price provided for in any Options, the
additional consideration, if any, payable upon the issue, conversion, exercise or exchange of any Convertible Securities, or the
rate at which any Convertible Securities are convertible into or exercisable or exchangeable for shares of Common Stock increases
or decreases at any time, the Exercise Price in effect at the time of such increase or decrease shall be adjusted to the Exercise
Price which would have been in effect at such time had such Options or Convertible Securities provided for such increased or decreased
purchase price, additional consideration or increased or decreased conversion rate, as the case may be, at the time initially granted,
issued or sold. For purposes of this Section 2(b)(iii), if the terms of any Option or Convertible Security that was outstanding
as of the date of issuance of this Warrant are increased or decreased in the manner described in the immediately preceding sentence,
then such Option or Convertible Security and the shares of Common Stock deemed issuable upon exercise, conversion or exchange thereof
shall be deemed to have been issued as of the date of such increase or decrease. No adjustment pursuant to this Section 2(b)
shall be made if such adjustment would result in an increase of the Exercise Price then in effect.

 

(iv)            
Calculation of Consideration Received. If any Option and/or Convertible Security and/or Adjustment Right is issued
in connection with the issuance or sale or deemed issuance or sale of any other securities of the Company (as reasonably determined
in good faith by the Holder, the “Primary Security”, and such Option, Convertible Security, and/or Adjustment
Right, each a “Secondary Security”), together comprising one integrated transaction, the Primary Security issued
or sold in such integrated transaction shall be deemed to have been issued for consideration equal to the difference of (A) the
aggregate consideration received by the Company to purchase such Primary Security and each such Option (as applicable) and/or Convertible
Security (as applicable) and/or Adjustment Right (as applicable), minus (B) the product of (x) the sum of the Black Scholes Consideration
Value of each such Option and/or Convertible Security (as applicable) and/or Adjustment Right (as applicable) on a per share basis
multiplied by (y) the aggregate number of shares of Common Stock issued or issuable pursuant to such Option and/or Convertible
Security (as applicable) and/or Adjustment Right (as applicable). If any shares of Common Stock, Options or Convertible Securities
are issued or sold or deemed to have been issued or sold for cash, the consideration received therefor (for the purpose of determining
the consideration paid for such Common Stock, Option or Convertible Security, but not for the purpose of the calculation of the
Black Scholes Consideration Value) will be deemed to be the net amount of consideration received by the Company therefor. If any
shares of Common Stock, Options or Convertible Securities are issued or sold for a consideration other than cash (for the purpose
of determining the consideration paid for such Common Stock, Option or Convertible Security, but not for the purpose of the calculation
of the Black Scholes Consideration Value), the amount of such consideration received by the Company will be the fair value of such
consideration, except where such consideration consists of publicly traded securities, in which case the amount of consideration
received by the Company for such securities will be the arithmetic average of the VWAPs of such security for each of the five (5)
Trading Days immediately preceding the date of receipt. If any shares of Common Stock, Options or Convertible Securities are issued
to the owners of the non-surviving entity in connection with any merger in which the Company is the surviving entity (for the purpose
of determining the consideration paid for such Common Stock, Option or Convertible Security, but not for the purpose of the calculation
of the Black Scholes Consideration Value), the amount of consideration therefor will be deemed to be the fair value of such portion
of the net assets and business of the non-surviving entity as is attributable to such shares of Common Stock, Options or Convertible
Securities, as the case may be. The fair value of any consideration other than cash or publicly traded securities (for the purpose
of determining the consideration paid for such Common Stock, Option or Convertible Security, but not for the purpose of the calculation
of the Black Scholes Consideration Value) will be determined jointly by the Company and the Holder. If such parties are unable
to reach agreement within ten (10) days after the occurrence of an event requiring valuation (the “Valuation Event”),
the fair value of such consideration will be determined within five (5) Trading Days after the tenth (10th) day following
such Valuation Event by an independent, reputable appraiser jointly selected by the Company and the Holder. The determination of
such appraiser shall be final and binding upon all parties absent manifest error and the fees and expenses of such appraiser shall
be borne by the Company.

 

    	7

    	 

    

 

(v)              
Record Date. If the Company takes a record of the holders of shares of Common Stock for the purpose of entitling
them (A) to receive a dividend or other distribution payable in shares of Common Stock, Options or in Convertible Securities
or (B) to subscribe for or purchase shares of Common Stock, Options or Convertible Securities, then such record date will
be deemed to be the date of the issue or sale of the shares of Common Stock deemed to have been issued or sold upon the declaration
of such dividend or the making of such other distribution or the date of the granting of such right of subscription or purchase
(as the case may be).

 

(c)               
Number of Warrant Shares. Simultaneously with any adjustment to the Exercise Price pursuant to paragraph (a)  of this Section 2, the number of Warrant Shares that may be purchased upon exercise of this Warrant shall be increased
or decreased proportionately, so that after such adjustment the aggregate Exercise Price payable hereunder for the adjusted number
of Warrant Shares shall be the same as the aggregate Exercise Price in effect immediately prior to such adjustment (without regard
to any limitations on exercise contained herein).

 

(d)              
Holder's Right of Alternative Exercise Price Following Issuance of Certain Options or Convertible Securities. In
addition to and not in limitation of the other provisions of this Section 2, if the Company in any manner issues or sells
any Options or Convertible Securities (other than the Notes) (any such securities, "Variable Price Securities")
after the Subscription Date that are convertible into or exchangeable or exercisable for shares of Common Stock at a price which
varies or may vary with the market price of the Common Shares, including by way of one or more reset(s) to a fixed price, but exclusive
of such formulations reflecting customary anti-dilution provisions (such as share splits, share combinations, share dividends and
similar transactions) (each of the formulations for such variable price being herein referred to as, the "Variable Price"),
the Company shall provide written notice thereof via facsimile and overnight courier to the Holder on the date of issuance of such
Convertible Securities or Options. From and after the date the Company issues any such Convertible Securities or Options with a
Variable Price, the Holder shall have the right, but not the obligation, in its sole discretion to substitute the Variable Price
for the Exercise Price upon exercise of this Warrant by designating in the Exercise Notice delivered upon any exercise of this
Warrant that solely for purposes of such exercise the Holder is relying on the Variable Price rather than the Exercise Price then
in effect. The Holder's election to rely on a Variable Price for a particular exercise of this Warrant shall not obligate the Holder
to rely on a Variable Price for any future exercises of this Warrant.

 

(e)               
Other Events. In the event that the Company (or any Subsidiary) shall take any action to which the provisions hereof
are not strictly applicable, or, if applicable, would not operate to protect the Holder from dilution or if any event occurs of
the type contemplated by the provisions of this Section 2 but not expressly provided for by such provisions (including, without
limitation, the granting of stock appreciation rights, phantom stock rights or other rights with equity features), then the Company’s
board of directors shall in good faith determine and implement an appropriate adjustment in the Exercise Price and the number of
Warrant Shares (if applicable) so as to protect the rights of the Holder, provided that no such adjustment pursuant to this Section 2(e)
will increase the Exercise Price or decrease the number of Warrant Shares as otherwise determined pursuant to this Section 2,
provided further that if the Holder does not accept such adjustments as appropriately protecting its interests hereunder against
such dilution, then the Company’s board of directors and the Holder shall agree, in good faith, upon an independent investment
bank of nationally recognized standing to make such appropriate adjustments, whose determination shall be final and binding and
whose fees and expenses shall be borne by the Company.

 

(f)               
Calculations. All calculations under this Section 2 shall be made by rounding to the nearest cent or the nearest
1/100th of a share, as applicable. The number of shares of Common Stock outstanding at any given time shall not include
shares owned or held by or for the account of the Company, and the disposition of any such shares shall be considered an issue
or sale of Common Stock.

 

    	8

    	 

    

 

(g)              
Adjustment. If immediately following the close of business on the Initial Exercisability Date (the “Adjustment
Time”), the Exercise Price then in effect exceeds the Adjusted Market Price (the “Adjusted Exercise Price”),
the Exercise Price hereunder shall be reset to the Adjusted Exercise Price as of the Adjustment Time.

 

3.                 
RIGHTS UPON DISTRIBUTION OF ASSETS.  In addition to any adjustments
pursuant to Section 2 above, if the Company shall declare or make any dividend or other distribution of its assets (or rights
to acquire its assets) to holders of shares of Common Stock, by way of return of capital or otherwise (including, without limitation,
any distribution of cash, stock or other securities, property or options by way of a dividend, spin off, reclassification, corporate
rearrangement, scheme of arrangement or other similar transaction) (a “Distribution”), at any time after the
issuance of this Warrant, then, in each such case, the Holder shall be entitled to participate in such Distribution to the same
extent that the Holder would have participated therein if the Holder had held the number of shares of Common Stock acquirable
upon complete exercise of this Warrant (without regard to any limitations on exercise hereof, including without limitation, the
Maximum Percentage) immediately before the date on which a record is taken for such Distribution, or, if no such record is taken,
the date as of which the record holders of shares of Common Stock are to be determined for the participation in such Distribution
(provided, however, to the extent that the Holder’s right to participate in any such Distributions would result in the Holder
exceeding the Maximum Percentage, then the Holder shall not be entitled to participate in such Distribution to such extent (or
the beneficial ownership of any such shares of Common Stock as a result of such Distribution to such extent) and such Distribution
to such extent shall be held in abeyance for the benefit of the Holder until such time, if ever, as its right thereto would not
result in the Holder exceeding the Maximum Percentage).

 

4.                 
PURCHASE RIGHTS; FUNDAMENTAL TRANSACTIONS.

 

(a)               
Purchase Rights. In addition to any adjustments pursuant to Section 2 above, if at any time the Company grants,
issues or sells any Options, Convertible Securities or rights to purchase stock, warrants, securities or other property pro rata
to the record holders of any class of shares of Common Stock (the “Purchase Rights”), then the Holder will be
entitled to acquire, upon the terms applicable to such Purchase Rights, the aggregate Purchase Rights which the Holder could have
acquired if the Holder had held the number of shares of Common Stock acquirable upon complete exercise of this Warrant (without
regard to any limitations on exercise hereof, including without limitation, the Maximum Percentage) immediately before the date
on which a record is taken for the grant, issuance or sale of such Purchase Rights, or, if no such record is taken, the date as
of which the record holders of shares of Common Stock are to be determined for the grant, issue or sale of such Purchase Rights
(provided, however, to the extent that the Holder’s right to participate in any such Purchase Right would result in the Holder
exceeding the Maximum Percentage, then the Holder shall not be entitled to participate in such Purchase Right to such extent (or
beneficial ownership of such shares of Common Stock as a result of such Purchase Right to such extent) and such Purchase Right
to such extent shall be held in abeyance for the Holder until such time, if ever, as its right thereto would not result in the
Holder exceeding the Maximum Percentage).

 

    	9

    	 

    

 

(b)              
Fundamental Transactions. The Company shall not enter into or be party to a Fundamental Transaction unless the Successor
Entity (if different than the Company) assumes in writing all of the obligations of the Company under this Warrant and the other
Transaction Documents (as defined in the Securities Purchase Agreement) in accordance with the provisions of this Section 4(b)
including agreements to deliver to the Holder in exchange for this Warrant a security of the Successor Entity evidenced by a written
instrument substantially similar in form and substance to this Warrant, including, without limitation, which is exercisable for
a corresponding number of shares of capital stock equivalent to the shares of Common Stock acquirable and receivable upon exercise
of this Warrant (without regard to any limitations on the exercise of this Warrant) prior to such Fundamental Transaction, and
with an exercise price which applies the exercise price hereunder to such shares of capital stock (but taking into account the
relative value of the shares of Common Stock pursuant to such Fundamental Transaction and the value of such shares of capital stock,
such adjustments to the number of shares of capital stock and such exercise price being for the purpose of protecting the economic
value of this Warrant immediately prior to the consummation of such Fundamental Transaction). Upon the consummation of each Fundamental
Transaction, the Successor Entity shall succeed to, and be substituted for (so that from and after the date of the applicable Fundamental
Transaction, the provisions of this Warrant and the other Transaction Documents referring to the “Company” shall refer
instead to the Successor Entity), and may exercise every right and power of the Company and shall assume all of the obligations
of the Company under this Warrant and the other Transaction Documents with the same effect as if such Successor Entity had been
named as the Company herein. Upon consummation of each Fundamental Transaction, the Successor Entity (if different from the Company)
shall deliver to the Holder confirmation that there shall be issued upon exercise of this Warrant at any time after the consummation
of the applicable Fundamental Transaction, in lieu of the shares of Common Stock (or other securities, cash, assets or other property
(except such items still issuable under Sections 3 and 4(a) above, which shall continue to be receivable thereafter)) issuable
upon the exercise of this Warrant prior to the applicable Fundamental Transaction, such shares of common stock (or its equivalent)
of the Successor Entity (including its Parent Entity) which the Holder would have been entitled to receive upon the happening of
the applicable Fundamental Transaction had this Warrant been exercised immediately prior to the applicable Fundamental Transaction
(without regard to any limitations on the exercise of this Warrant), as adjusted in accordance with the provisions of this Warrant.
Notwithstanding the foregoing, and without limiting Section 1(f) hereof, the Holder may elect, at its sole option, by delivery
of written notice to the Company to waive this Section 4(b) to permit the Fundamental Transaction without the assumption of
this Warrant. In addition to and not in substitution for any other rights hereunder, prior to the consummation of each Fundamental
Transaction pursuant to which holders of shares of Common Stock are entitled to receive securities or other assets with respect
to or in exchange for shares of Common Stock (a “Corporate Event”), the Company shall make appropriate provision
to insure that the Holder will thereafter have the right to receive upon an exercise of this Warrant at any time after the consummation
of the applicable Fundamental Transaction but prior to the Expiration Date, in lieu of the shares of the Common Stock (or other
securities, cash, assets or other property (except such items still issuable under Sections  3 and 4(a) above, which shall
continue to be receivable thereafter)) issuable upon the exercise of the Warrant prior to such Fundamental Transaction, such shares
of stock, securities, cash, assets or any other property whatsoever (including warrants or other purchase or subscription rights)
which the Holder would have been entitled to receive upon the happening of the applicable Fundamental Transaction had this Warrant
been exercised immediately prior to the applicable Fundamental Transaction (without regard to any limitations on the exercise of
this Warrant). Provision made pursuant to the preceding sentence shall be in a form and substance reasonably satisfactory to the
Holder.

 

    	10

    	 

    

 

(c)               
Black Scholes Redemption. Notwithstanding the foregoing and the provisions of Section 4(b) above, at the request
of the Holder delivered at any time commencing on the earliest to occur of (x) the public disclosure of any Change of Control,
(y) the consummation of any Change of Control and (z) the Holder first becoming aware of any Change of Control through the date
that is ninety (90) days after the public disclosure of the consummation of such Change of Control by the Company pursuant to a
Current Report on Form 8-K filed with the SEC, the Company or the Successor Entity (as the case may be) shall purchase
this Warrant from the Holder on the date of such request by paying to the Holder cash in an amount equal to the Black Scholes
Value.

 

(d)              
Application. The provisions of this Section 4 shall apply similarly and equally to successive Fundamental Transactions
and Corporate Events and shall be applied as if this Warrant (and any such subsequent warrants) were fully exercisable and without
regard to any limitations on the exercise of this Warrant (provided that the Holder shall continue to be entitled to the benefit
of the Maximum Percentage, applied however with respect to shares of capital stock registered under the 1934 Act and thereafter
receivable upon exercise of this Warrant (or any such other warrant)).

 

5.                 
NONCIRCUMVENTION. The Company hereby covenants and agrees that the
Company will not, by amendment of its Certificate of Incorporation (as defined in the Securities Purchase Agreement), Bylaws (as
defined in the Securities Purchase Agreement) or through any reorganization, transfer of assets, consolidation, merger, scheme
of arrangement, dissolution, issue or sale of securities, or any other voluntary action, avoid or seek to avoid the observance
or performance of any of the terms of this Warrant, and will at all times in good faith carry out all the provisions of this Warrant
and take all action as may be required to protect the rights of the Holder. Without limiting the generality of the foregoing,
the Company (i) shall not increase the par value of any shares of Common Stock receivable upon the exercise of this Warrant
above the Exercise Price then in effect, (ii) shall take all such actions as may be necessary or appropriate in order that
the Company may validly and legally issue fully paid and non-assessable shares of Common Stock upon the exercise of this Warrant,
and (iii) shall, so long as any of the SPA Warrants are outstanding, take all action necessary to reserve and keep available out
of its authorized and unissued shares of Common Stock, solely for the purpose of effecting the exercise of the SPA Warrants, the
maximum number of shares of Common Stock as shall from time to time be necessary to effect the exercise of the SPA Warrants then
outstanding (without regard to any limitations on exercise).

 

6.                 
WARRANT HOLDER NOT DEEMED A STOCKHOLDER. Except as otherwise specifically
provided herein, the Holder, solely in its capacity as a holder of this Warrant, shall not be entitled to vote or receive dividends
or be deemed the holder of share capital of the Company for any purpose, nor shall anything contained in this Warrant be construed
to confer upon the Holder, solely in its capacity as the Holder of this Warrant, any of the rights of a stockholder of the Company
or any right to vote, give or withhold consent to any corporate action (whether any reorganization, issue of stock, reclassification
of stock, consolidation, merger, conveyance or otherwise), receive notice of meetings, receive dividends or subscription rights,
or otherwise, prior to the issuance to the Holder of the Warrant Shares which it is then entitled to receive upon the due exercise
of this Warrant. In addition, nothing contained in this Warrant shall be construed as imposing any liabilities on the Holder to
purchase any securities (upon exercise of this Warrant or otherwise) or as a stockholder of the Company, whether such liabilities
are asserted by the Company or by creditors of the Company. Notwithstanding this Section 6, the Company shall provide the
Holder with copies of the same notices and other information given to the stockholders of the Company generally, contemporaneously
with the giving thereof to the stockholders.

 

 

    	11

    	 

    

 

7.                 
REISSUANCE OF WARRANTS.

 

(a)               
Transfer of Warrant. If this Warrant is to be transferred, the Holder shall surrender this Warrant to the Company,
whereupon the Company will forthwith issue and deliver upon the order of the Holder a new Warrant (in accordance with Section 7(d)),
registered as the Holder may request, representing the right to purchase the number of Warrant Shares being transferred by the
Holder and, if less than the total number of Warrant Shares then underlying this Warrant is being transferred, a new Warrant (in
accordance with Section 7(d)) to the Holder representing the right to purchase the number of Warrant Shares not being transferred.

 

(b)              
Lost, Stolen or Mutilated Warrant. Upon receipt by the Company of evidence reasonably satisfactory to the Company
of the loss, theft, destruction or mutilation of this Warrant (as to which a written certification and the indemnification contemplated
below shall suffice as such evidence), and, in the case of loss, theft or destruction, of any indemnification undertaking by the
Holder to the Company in customary and reasonable form and, in the case of mutilation, upon surrender and cancellation of this
Warrant, the Company shall execute and deliver to the Holder a new Warrant (in accordance with Section 7(d)) representing
the right to purchase the Warrant Shares then underlying this Warrant.

 

(c)               
Exchangeable for Multiple Warrants. This Warrant is exchangeable, upon the surrender hereof by the Holder at the
principal office of the Company, for a new Warrant or Warrants (in accordance with Section 7(d)) representing in the aggregate
the right to purchase the number of Warrant Shares then underlying this Warrant, and each such new Warrant will represent the right
to purchase such portion of such Warrant Shares as is designated by the Holder at the time of such surrender; provided, however,
no warrants for fractional shares of Common Stock shall be given.

 

(d)              
Issuance of New Warrants. Whenever the Company is required to issue a new Warrant pursuant to the terms of this Warrant,
such new Warrant (i) shall be of like tenor with this Warrant, (ii) shall represent, as indicated on the face of such new Warrant,
the right to purchase the Warrant Shares then underlying this Warrant (or in the case of a new Warrant being issued pursuant to
Section 7(a) or Section 7(c), the Warrant Shares designated by the Holder which, when added to the number of shares of Common
Stock underlying the other new Warrants issued in connection with such issuance, does not exceed the number of Warrant Shares then
underlying this Warrant), (iii) shall have an issuance date, as indicated on the face of such new Warrant which is the same as
the Issuance Date, and (iv) shall have the same rights and conditions as this Warrant.

 

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8.                 
NOTICES. Whenever notice is required to be given under this Warrant, unless otherwise provided herein, such
notice shall be given in accordance with Section 9(f) of the Securities Purchase Agreement. The Company shall provide the
Holder with prompt written notice of all actions taken pursuant to this Warrant, including in reasonable detail a description of
such action and the reason therefor. Without limiting the generality of the foregoing, the Company will give written notice to
the Holder (i) promptly upon each adjustment of the Exercise Price and the number of Warrant Shares, setting forth in reasonable
detail, and certifying, the calculation of such adjustment(s) and (ii) at least fifteen (15) days prior to the date on which the
Company closes its books or takes a record (A) with respect to any dividend or distribution upon the shares of Common Stock, (B)
with respect to any grants, issuances or sales of any Options, Convertible Securities or rights to purchase stock, warrants, securities
or other property to holders of shares of Common Stock or (C) for determining rights to vote with respect to any Fundamental Transaction,
dissolution or liquidation, provided in each case that such information shall be made known to the public prior to or in conjunction
with such notice being provided to the Holder and (iii) at least ten (10) Trading Days prior to the consummation of any Fundamental
Transaction. To the extent that any notice provided hereunder constitutes, or contains, material, non-public information regarding
the Company or any of its Subsidiaries, the Company shall simultaneously file such notice with the SEC (as defined in the Securities
Purchase Agreement) pursuant to a Current Report on Form 8-K. It is expressly understood and agreed that the time of execution
specified by the Holder in each Exercise Notice shall be definitive and may not be disputed or challenged by the Company.

 

9.                 
AMENDMENT AND WAIVER. Except as otherwise provided herein, the provisions of this Warrant (other than Section 1(f))
may be amended and the Company may take any action herein prohibited, or omit to perform any act herein required to be performed
by it, only if the Company has obtained the written consent of the Holder. No waiver shall be effective unless it is in writing
and signed by an authorized representative of the waiving party.

 

10.             
SEVERABILITY. If any provision of this Warrant is prohibited by law or otherwise determined to be invalid
or unenforceable by a court of competent jurisdiction, the provision that would otherwise be prohibited, invalid or unenforceable
shall be deemed amended to apply to the broadest extent that it would be valid and enforceable, and the invalidity or unenforceability
of such provision shall not affect the validity of the remaining provisions of this Warrant so long as this Warrant as so modified
continues to express, without material change, the original intentions of the parties as to the subject matter hereof and the prohibited
nature, invalidity or unenforceability of the provision(s) in question does not substantially impair the respective expectations
or reciprocal obligations of the parties or the practical realization of the benefits that would otherwise be conferred upon the
parties. The parties will endeavor in good faith negotiations to replace the prohibited, invalid or unenforceable provision(s)
with a valid provision(s), the effect of which comes as close as possible to that of the prohibited, invalid or unenforceable provision(s).

 

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11.             
GOVERNING LAW. This Warrant shall be governed by and construed and enforced in accordance with, and all questions
concerning the construction, validity, interpretation and performance of this Warrant 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. The Company 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. Nothing contained herein shall be deemed
to limit in any way any right to serve process in any manner permitted by law. Nothing contained herein shall be deemed or operate
to preclude the Holder from bringing suit or taking other legal action against the Company in any other jurisdiction to collect
on the Company’s obligations to the Holder or to enforce a judgment or other court ruling in favor of the Holder. THE
COMPANY 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 WITH OR ARISING OUT OF THIS WARRANT OR ANY TRANSACTION CONTEMPLATED HEREBY.

 

12.             
CONSTRUCTION; HEADINGS. This Warrant shall be deemed to be jointly drafted by the Company and the Holder and
shall not be construed against any Person as the drafter hereof. The headings of this Warrant are for convenience of reference
and shall not form part of, or affect the interpretation of, this Warrant. Terms used in this Warrant but defined in the other
Transaction Documents shall have the meanings ascribed to such terms on the Series A Closing Date in such other Transaction Documents
unless otherwise consented to in writing by the Holder.

 

13.             
DISPUTE RESOLUTION. In the case of a dispute as to the determination of the Exercise Price, the Closing Bid
Price, the Closing Sale Price or fair market value or the arithmetic calculation of the number of Warrant Shares (as the case may
be), the Company or the Holder (as the case may be) shall submit the disputed determinations or arithmetic calculations (as the
case may be) via facsimile (i) within two (2) Business Days after receipt of the applicable notice giving rise to such dispute
to the Company or the Holder (as the case may be) or (ii) if no notice gave rise to such dispute, at any time after the Holder
learned of the circumstances giving rise to such dispute (including, without limitation, as to whether any issuance or sale or
deemed issuance or sale was an issuance or sale or deemed issuance or sale of Excluded Securities). If the Holder and the Company
are unable to agree upon such determination or calculation (as the case may be) of the Exercise Price, the Closing Sale Price or
fair market value or the number of Warrant Shares (as the case may be) within three (3) Business Days of such disputed determination
or arithmetic calculation being submitted to the Company or the Holder (as the case may be), then the Company shall, within two
(2) Business Days submit via facsimile (a) the disputed determination of the Exercise Price, the Closing Bid Price, the Closing
Sale Price or fair market value (as the case may be) to an independent, reputable investment bank selected by the Company and approved
by the Holder or (b) the disputed arithmetic calculation of the number of Warrant Shares to the Company’s independent, outside
accountant. The Company shall cause at its expense the investment bank or the accountant (as the case may be) to perform the determinations
or calculations (as the case may be) and notify the Company and the Holder of the results no later than ten (10) Business Days
from the time it receives such disputed determinations or calculations (as the case may be). Such investment bank’s or accountant’s
determination or calculation (as the case may be) shall be binding upon all parties absent demonstrable error.

 

    	14

    	 

    

 

14.             
REMEDIES, CHARACTERIZATION, OTHER OBLIGATIONS, BREACHES AND INJUNCTIVE RELIEF. The remedies provided in this
Warrant shall be cumulative and in addition to all other remedies available under this Warrant and the other Transaction Documents,
at law or in equity (including a decree of specific performance and/or other injunctive relief), and nothing herein shall limit
the right of the Holder to pursue actual and consequential damages for any failure by the Company to comply with the terms of this
Warrant. The Company covenants to the Holder that there shall be no characterization concerning this instrument other than as expressly
provided herein. Amounts set forth or provided for herein with respect to payments, exercises and the like (and the computation
thereof) shall be the amounts to be received by the Holder and shall not, except as expressly provided herein, be subject to any
other obligation of the Company (or the performance thereof). The Company acknowledges that a breach by it of its obligations hereunder
will cause irreparable harm to the Holder and that the remedy at law for any such breach may be inadequate. The Company therefore
agrees that, in the event of any such breach or threatened breach, the holder of this Warrant shall be entitled, in addition to
all other available remedies, to an injunction restraining any breach, without the necessity of showing economic loss and without
any bond or other security being required. The Company shall provide all information and documentation to the Holder that is requested
by the Holder to enable the Holder to confirm the Company’s compliance with the terms and conditions of this Warrant (including,
without limitation, compliance with Section 2 hereof). The issuance of shares and certificates for shares as contemplated
hereby upon the exercise of this Warrant shall be made without charge to the Holder or such shares for any issuance tax or other
costs in respect thereof, provided that the Company shall not be required to pay any tax which may be payable in respect of any
transfer involved in the issuance and delivery of any certificate in a name other than the Holder or its agent on its behalf.

 

15.             
TRANSFER. This Warrant may be offered for sale, sold, transferred or assigned without the consent of the Company.

 

16.             
CERTAIN DEFINITIONS. For purposes of this Warrant, the following terms shall have the following meanings:

 

(a)               
“Adjusted Market Price” means 115% of the Market Price (as defined in the Notes) on the Initial Exercisability
Date.

 

(b)              
“Adjustment Right” means any right granted with respect to any securities issued in connection with,
or with respect to, any issuance or sale (or deemed issuance or sale in accordance with Section 2) of shares of Common Stock
(other than rights of the type described in Section 3 and 4 hereof) that could result in a decrease in the net consideration
received by the Company in connection with, or with respect to, such securities (including, without limitation, any cash settlement
rights, cash adjustment or other similar rights).

 

(c)               
“Approved Stock Plan” means any employee benefit plan (including the Company’s 2006 Stock Incentive
Plan) which has been approved by the board of directors of the Company prior to or subsequent to the date hereof pursuant to which
shares of Common Stock and standard options to purchase Common Stock may be issued to any employee, officer or director for services
provided to the Company in their capacity as such.

 

    	15

    	 

    

 

(d)              
“Black Scholes Consideration Value” means the value of the applicable Option, Convertible Security or
Adjustment Right (as the case may be) as of the date of issuance thereof calculated using the Black Scholes Option Pricing Model
obtained from the “OV” function on Bloomberg utilizing (i) an underlying price per share equal to the Closing Sale
Price of the Common Stock on the Trading Day immediately preceding the public announcement of the execution of definitive documents
with respect to the issuance of such Option or Convertible Security (as the case may be), (ii) a risk-free interest rate corresponding
to the U.S. Treasury rate for a period equal to the remaining term of such Option, Convertible Security or Adjustment Right (as
the case may be) as of the date of issuance of such Option, Convertible Security or Adjustment Right (as the case may be), (iii)
a zero cost of borrow and (iv) an expected volatility equal to the greater of 75% and the 30 day volatility obtained from the HVT
function on Bloomberg (determined utilizing a 365 day annualization factor) as of the Trading Day immediately following the
date of issuance of such Option, Convertible Security or Adjustment Right (as the case may be).

 

(e)               
“Black Scholes Value” means the value of the unexercised portion of this Warrant remaining on the date
of the Holder’s request pursuant to Section 4(c), which value is calculated using the Black Scholes Option Pricing Model
obtained from the “OV” function on Bloomberg utilizing (i) an underlying price per share equal to the sum of the price
per share being offered in cash in the applicable Change of Control (if any) plus the value of the non-cash consideration being
offered in the applicable Change of Control (if any), (ii) a strike price equal to the Exercise Price in effect on the date of
the Holder’s request pursuant to Section 4(c), (iii) a risk-free interest rate corresponding to the U.S. Treasury rate
for a period equal to the greater of (1) the remaining term of this Warrant as of the date of the Holder’s request pursuant
to Section 4(c) and (2) the remaining term of this Warrant as of the date of consummation of the applicable Change of Control
or as of the date of the Holder’s request pursuant to Section 4(c) if such request is prior to the date of the consummation
of the applicable Change of Control, (iv) a zero cost of borrow and (v) an expected volatility equal to the greater of 75% and
the 30 day volatility obtained from the HVT function on Bloomberg (determined utilizing a 365 day annualization factor) as of the
Trading Day immediately following the earliest to occur of (x) the public disclosure of the applicable Change of Control, (y) the
consummation of the applicable Change of Control and (z) the date on which the Holder first became aware of the applicable Change
of Control.

 

(f)               
“Bloomberg” means Bloomberg, L.P.

 

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

 

(h)              
“Change of Control” means any Fundamental Transaction other than (i) any merger of the Company or any
of its, direct or indirect, wholly-owned Subsidiaries with or into any of the foregoing Persons, (ii) any reorganization, recapitalization
or reclassification of the shares of Common Stock in which holders of the Company’s voting power immediately prior to such
reorganization, recapitalization or reclassification continue after such reorganization, recapitalization or reclassification to
hold publicly traded securities and, directly or indirectly, are, in all material respects, the holders of the voting power of
the surviving entity (or entities with the authority or voting power to elect the members of the board of directors (or their
equivalent if other than a corporation) of such entity or entities) after such reorganization, recapitalization or reclassification,
or (iii) pursuant to a migratory merger effected solely for the purpose of changing the jurisdiction of incorporation of the Company
or any of its Subsidiaries or (iv) the sale (whether by merger, asset sale or otherwise) of any one Plant (as defined in the Notes)
of the Company or any of its Subsidiaries.

 

    	16

    	 

    

 

(i)                
“Closing Bid Price” and “Closing Sale Price” means, for any security as of any date,
the last closing bid price and last closing trade price, respectively, for such security on the Principal Market, as reported by
Bloomberg, or, if the Principal Market begins to operate on an extended hours basis and does not designate the closing bid price
or the closing trade price (as the case may be) then the last bid price or last trade price, respectively, of such security prior
to 4:00:00 p.m., New York City time, as reported by Bloomberg, or, if the Principal Market is not the principal securities exchange
or trading market for such security, the last closing bid price or last trade price, respectively, of such security on the principal
securities exchange or trading market where such security is listed or traded as reported by Bloomberg, or if the foregoing do
not apply, the last closing bid price or last trade price, respectively, of such security in the over-the-counter market on the
electronic bulletin board for such security as reported by Bloomberg, or, if no closing bid price or last trade price, respectively,
is reported for such security by Bloomberg, the average of the bid prices, or the ask prices, respectively, of any market makers
for such security as reported in the “pink sheets” by OTC Markets Group Inc. (formerly Pink Sheets LLC). If the Closing
Bid Price or the Closing Sale Price cannot be calculated for a security on a particular date on any of the foregoing bases, the
Closing Bid Price or the Closing Sale Price (as the case may be) of such security on such date shall be the fair market value as
mutually determined by the Company and the Holder. If the Company and the Holder are unable to agree upon the fair market value
of such security, then such dispute shall be resolved in accordance with the procedures in Section 13. All such determinations
shall be appropriately adjusted for any stock dividend, stock split, stock combination or other similar transaction during such
period.

 

(j)                
“Common Stock” means (i) the Company’s shares of common stock, $0.001 par value per share,
and (ii) any capital stock into which such common stock shall have been changed or any share capital resulting from a reclassification
of such common stock.

 

(k)              
“Common Stock Deemed Outstanding” means, at any given time, the number of
shares of Common Stock actually outstanding at such time, but excluding any shares of Common Stock owned or held by or for the
account of the Company.

 

(l)                
“Convertible Securities” means any stock or other security (other than Options) that is at any time and
under any circumstances, directly or indirectly, convertible into, exercisable or exchangeable for, or which otherwise entitles
the holder thereof to acquire, any shares of Common Stock.

 

(m)            
“Eligible Market” means The New York Stock Exchange, the NYSE MKT, the Nasdaq Global Select Market, the
Nasdaq Global Market or the Principal Market.

 

    	17

    	 

    

 

(n)              
“Excluded Securities” means (i) shares of Common Stock or standard options to purchase Common Stock issued
to directors, officers or employees of the Company in their capacity as such pursuant to an Approved Stock Plan (as defined above),
provided that (A) all such issuances (taking into account the shares of Common Stock issuable upon exercise of such options) after
the date hereof pursuant to this clause (i) do not, in the aggregate, exceed more than 5% of the Common Stock issued and outstanding
immediately prior to the date hereof and (B) the exercise price of any such options is not lowered, none of such options are amended
to increase the number of shares issuable thereunder and none of the terms or conditions of any such options are otherwise materially
changed in any manner that adversely affects any of the Buyers; (ii) shares of Common Stock issued upon the conversion or exercise
of, or in satisfaction of interest or dividends accrued in accordance with the terms of, the Company’s Series B Cumulative
Convertible Preferred Stock or any other Convertible Securities (other than standard options to purchase Common Stock issued pursuant
to an Approved Stock Plan that are covered by clause (i) above) issued prior to the date hereof, provided that the conversion price
of any such Convertible Securities (other than standard options to purchase Common Stock issued pursuant to an Approved Stock Plan
that are covered by clause (i) above) is not lowered (except pursuant to terms in effect as of the Subscription Date), none of
such Convertible Securities (other than standard options to purchase Common Stock issued pursuant to an Approved Stock Plan that
are covered by clause (i) above) are amended to increase the number of shares issuable thereunder and none of the terms or conditions
of any such Convertible Securities (other than standard options to purchase Common Stock issued pursuant to an Approved Stock Plan
that are covered by clause (i) above) are otherwise materially changed in any manner that adversely affects any of the Buyers;
(iii) the issuance of the Notes, (iv) the issuance of the SPA Warrants, (v) the shares of Common Stock issuable upon conversion
of the Notes or otherwise pursuant to the terms of the Notes, and (vi) the shares of Common Stock issuable upon exercise of the
SPA Warrants.

 

(o)              
“Expiration Date” means the date that is [INSERT IN SERIES A WARRANT: the first anniversary of the Initial
Exercisability Date][INSERT IN SERIES B WARRANT: the earlier of (z) the Trading Day immediately following the Series B Closing
Expiration Date and (y) the first anniversary of the Initial Exercisability Date] or, if such date falls on a day other than a
Business Day or on which trading does not take place on the Principal Market (a “Holiday”), the next date that
is not a Holiday.

 

(p)              
“Fundamental Transaction” means that (i) the Company or any of its Subsidiaries shall, directly or indirectly,
in one or more related transactions, (1) consolidate or merge with or into (whether or not the Company or any of its Subsidiaries
is the surviving corporation) any other Person, or (2) sell, lease, license, assign, transfer, convey or otherwise dispose of all
or substantially all of its respective properties or assets to any other Person, or (3) allow any other Person to make a purchase,
tender or exchange offer that is accepted by the holders of more than 50% of the outstanding shares of Voting Stock of the Company
(not including any shares of Voting Stock of the Company held by the Person or Persons making or party to, or associated or affiliated
with the Persons making or party to, such purchase, tender or exchange offer), or (4) consummate a stock or share purchase agreement
or other business combination (including, without limitation, a reorganization, recapitalization, spin-off or scheme of arrangement)
with any other Person whereby such other Person acquires more than 50% of the outstanding shares of Voting Stock of the Company
(not including any shares of Voting Stock of the Company held by the other Person or other Persons making or party to, or associated
or affiliated with the other Persons making or party to, such stock or share purchase agreement or other business combination),
or (ii) any “person” or “group” (as these terms are used for purposes of Sections 13(d) and 14(d)
of the 1934 Act and the rules and regulations promulgated thereunder) is or shall become the “beneficial owner” (as
defined in Rule 13d-3 under the 1934 Act), directly or indirectly, of 50% of the aggregate ordinary voting power represented by
issued and outstanding Voting Stock of the Company.

 

    	18

    	 

    

 

(q)              
“Notes” has the meaning ascribed to such term in the Securities Purchase Agreement, and shall include
all notes issued in exchange therefor or replacement thereof.

 

(r)                
“Options” means any rights, warrants or options to subscribe for or purchase shares of Common Stock or
Convertible Securities.

 

(s)               
“Parent Entity” of a Person means an entity that, directly or indirectly, controls the applicable Person
and whose common stock or equivalent equity security is quoted or listed on an Eligible Market, or, if there is more than one such
Person or Parent Entity, the Person or Parent Entity with the largest public market capitalization as of the date of consummation
of the Fundamental Transaction.

 

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

 

(u)              
“Principal Market” means the Nasdaq Capital Market.

 

(v)              
“Subsidiary” means any Person in which the Company, directly or indirectly, (i) owns any of the outstanding
capital stock or holds any equity or similar interest of such Person or (ii) controls or operates all or any part of the business,
operations or administration of such Person, and all of the foregoing.

 

(w)            
“Successor Entity” means the Person (or, if so elected by the Holder, the Parent Entity) formed by, resulting
from or surviving any Fundamental Transaction or the Person (or, if so elected by the Holder, the Parent Entity) with which such
Fundamental Transaction shall have been entered into.

 

(x)              
“Trading Day” means any day on which the Common Stock is traded on the Principal Market, or, if the Principal
Market is not the principal trading market for the Common Stock, then on the principal securities exchange or securities market
on which the Common Stock is then traded, provided that “Trading Day” shall not include any day on which the Common
Stock is scheduled to trade on such exchange or market for less than 4.5 hours or any day that the Common Stock is suspended from
trading during the final hour of trading on such exchange or market (or if such exchange or market does not designate in advance
the closing time of trading on such exchange or market, then during the hour ending at 4:00:00 p.m., New York time) unless such
day is otherwise designated as a Trading Day in writing by the Holder.

 

    	19

    	 

    

 

(y)              
“Voting Stock” of a Person means capital stock of such Person of the class or classes pursuant to which
the holders thereof have the general voting power to elect, or the general power to appoint, at least a majority of the board of
directors, managers or trustees of such Person (irrespective of whether or not at the time capital stock of any other class or
classes shall have or might have voting power by reason of the happening of any contingency).

 

(z)               
“VWAP” means, for any security as of any date, the dollar volume-weighted average price for such security
on the Principal Market (or, if the Principal Market is not the principal trading market for such security, then on the principal
securities exchange or securities market on which such security is then traded) during the period beginning at 9:30:01 a.m., New
York time, and ending at 4:00:00 p.m., New York time, as reported by Bloomberg through its “Volume at Price” function
or, if the foregoing does not apply, the dollar volume-weighted average price of such security in the over-the-counter market on
the electronic bulletin board for such security during the period beginning at 9:30:01 a.m., New York time, and ending at 4:00:00
p.m., New York time, as reported by Bloomberg, or, if no dollar volume-weighted average price is reported for such security by
Bloomberg for such hours, the average of the highest closing bid price and the lowest closing ask price of any of the market makers
for such security as reported in the “pink sheets” by OTC Markets Group Inc. (formerly Pink Sheets LLC). If VWAP cannot
be calculated for such security on such date on any of the foregoing bases, the VWAP of such security on such date shall be the
fair market value as mutually determined by the Company and the Holder. If the Company and the Holder are unable to agree upon
the fair market value of such security, then such dispute shall be resolved in accordance with the procedures in Section 13.
All such determinations shall be appropriately adjusted for any stock dividend, stock split, stock combination or other similar
transaction during such period.

 

[signature page follows]

 

 

 

 

 

 

 

    	20

    	 

    

 

IN WITNESS WHEREOF,
the Company has caused this Warrant to Purchase Common Stock to be duly executed as of the Issuance Date set out above.

 

Pacific
Ethanol, Inc.

 

By:_________________________________

Name:

Title:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

    	21

    	 

    

 

EXHIBIT A

 

EXERCISE
NOTICE

 

TO
BE EXECUTED BY THE REGISTERED HOLDER TO EXERCISE THIS

WARRANT TO PURCHASE COMMON STOCK

 

PACIFIC
ETHANOL, INC.

 

The undersigned holder
hereby exercises the right to purchase _________________ of the shares of Common Stock (“Warrant Shares”) of
Pacific Ethanol, Inc., a Delaware corporation (the “Company”), evidenced by Warrant to Purchase Common Stock
No. _______ (the “Warrant”). Capitalized terms used herein and not otherwise defined shall have the respective
meanings set forth in the Warrant.

 

1.Form of Exercise
Price. The Holder intends that payment of the Exercise Price shall be made as:

 

		____________	a “Cash Exercise” with respect to _________________ Warrant Shares; and/or

 

		____________	a “Cashless Exercise” with respect to _______________ Warrant Shares.

 

In the event that the
Holder has elected a Cashless Exercise with respect to some or all of the Warrant Shares to be issued pursuant hereto, the Holder
hereby represents and warrants that (i) this Exercise Notice was executed by the Holder at __________ [a.m.][p.m.] on the date
set forth below and (ii) if applicable, the Bid Price as of such time of execution of this Exercise Notice was $________.

 

2.Payment
of Exercise Price. In the event that the Holder has elected a Cash Exercise with respect to some or all of the Warrant Shares
to be issued pursuant hereto, the Holder shall pay the Aggregate Exercise Price in the sum
of $___________________ to the Company in accordance with the terms of the Warrant.

 

3.Delivery
of Warrant Shares. The Company shall deliver to Holder, or its designee or agent as specified below, __________ Warrant
Shares in accordance with the terms of the Warrant. Delivery shall be made to Holder, or for its benefit, to the following address:

 

	
        ___________________________________

        ___________________________________

        ___________________________________

        ___________________________________

        

 

	
        Date: _____________ __, 

         

        ___________________________________

        Name of Registered Holder

         

	 
	By:_________________________________

Name: 

Title:

 

    	22

    	 

    

 

EXHIBIT B

 

ACKNOWLEDGMENT

 

The
Company hereby acknowledges this Exercise Notice and hereby directs ______________ to issue the above indicated
number of shares of Common Stock in accordance with the Transfer Agent Instructions dated _________, 20__, from the Company and
acknowledged and agreed to by _______________.

 

 

Pacific
Ethanol, Inc.

 

 By:_________________________________

Name:

Title:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

23Exhibit 10.4

 

 

 

PACIFIC ETHANOL, INC.

AND

U.S. BANK NATIONAL ASSOCIATION

Trustee

________________________

INDENTURE

DATED AS OF MARCH 28, 2013

________________________

CONVERTIBLE SUBORDINATED DEBT
SECURITIES

 

 

 

 

    	 

    	 

    

PACIFIC ETHANOL, INC.

RECONCILIATION AND TIE BETWEEN TRUST
INDENTURE ACT OF 1939, AS AMENDED,

AND INDENTURE, DATED AS OF MARCH 28,
2013 

 

	TRUST INDENTURE ACT SECTION	 	INDENTURE SECTION
	Section 310(a)(1)	 	6.9
	(a)(2)	 	6.9
	(a)(3)	 	Not Applicable
	(a)(4)	 	Not Applicable
	(a)(5)	 	6.9
	(b)	 	6.8
	Section 311	 	6.13
	Section 312(a)	 	7.1, 7.2(a)
	(b)	 	7.2(b)
	(c)	 	7.2(c)
	Section 313(a)	 	7.3
	(b)	 	*
	(c)	 	*
	(d)	 	7.3
	Section 314(a)	 	7.4
	(a)(4)	 	10.5
	(b)	 	Not Applicable
	(c)(1)	 	1.3
	(c)(2)	 	1.3
	(c)(3)	 	Not Applicable
	(d)	 	Not Applicable
	(e)	 	1.3
	Section 315(a)	 	6.1(a)
	(b)	 	6.2
	(c)	 	6.1(b)
	(d)	 	6.1(c)
	(d)(1)	 	6.1(a)(1)
	(d)(2)	 	6.1(c)(2)
	(d)(3)	 	6.1(c)(3)
	(e)	 	5.14
	Section 316(a)	 	1.1, 1.2
	(a)(1)(A)	 	5.2, 5.12
	(a)(1)(B)	 	5.13
	(a)(2)	 	Not Applicable
	(b)	 	5.8
	(c)	 	1.5(f)
	Section 317(a)(1)	 	5.3
	(a)(2)	 	5.4
	(b)	 	10.3
	Section 318(a)	 	1.8

 

NOTE: This reconciliation and tie shall not,
for any purpose, be deemed to be a part of the Indenture.

* Deemed included pursuant to Section 318(c)
of the Trust Indenture Act

 

 

    	 

    	 

    

TABLE OF CONTENTS

 

	 	 	Page
	ARTICLE ONE	DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION	1
	 	1.1	Definitions	1
	 	1.2	Incorporation by Reference of Trust Indenture Act	8
	 	1.3	Compliance Certificates and Opinions	9
	 	1.4	Form of Documents Delivered to Trustee	9
	 	1.5	Acts of Holders; Record Dates	10
	 	1.6	Notices, Etc., to Trustee and Company	11
	 	1.7	Notice to Holders; Waiver	12
	 	1.8	Conflict with Trust Indenture Act	12
	 	1.9	Effect of Headings and Table of Contents	12
	 	1.10	Successors and Assigns	12
	 	1.11	Separability Clause	12
	 	1.12	Benefits of Indenture	12
	 	1.13	Governing Law	13
	 	1.14	Legal Holidays	13
	 	1.15	Securities in a Composite Currency, Currency Unit or Foreign Currency	13
	 	1.16	Payment in Required Currency; Judgment Currency	14
	 	1.17	Language of Notices, Etc	14
	 	1.18	Incorporators, Shareholders, Officers and Directors of the Company Exempt from Individual Liability	14
	 	 	 
	ARTICLE TWO	SECURITY FORMS	14
	 	2.1	Forms Generally	14
	 	2.2	Form of Face of Security	15
	 	2.3	Form of Reverse of Security	18
	 	2.4	Global Securities	22
	 	2.5	Form of Trustee’s Certificate of Authentication	22
	 	 	 
	ARTICLE THREE	THE SECURITIES	23
	 	3.1	Amount Unlimited; Issuable in Series	23
	 	3.2	Denominations	25
	 	3.3	Execution, Authentication, Delivery and Dating	25
	 	3.4	Temporary Securities	27
	 	3.5	Registration, Registration of Transfer and Exchange	28
	 	3.6	Mutilated, Destroyed, Lost and Stolen Securities	30
	 	3.7	Payment of Interest; Interest Rights Preserved	31
	 	3.8	Persons Deemed Owners	32
	 	3.9	Cancellation	32
	 	3.10	Computation of Interest	32
	 	3.11	CUSIP or CINS Numbers	32

 

    	i

    	 

    

 

	ARTICLE FOUR	SATISFACTION AND DISCHARGE	33
	 	4.1	Satisfaction and Discharge of Indenture	33
	 	4.2	Application of Trust Money	34
	 	 	 
	ARTICLE FIVE	REMEDIES	34
	 	5.1	Events of Default	34
	 	5.2	Acceleration of Maturity; Rescission and Annulment	35
	 	5.3	Collection of Indebtedness and Suits for Enforcement by Trustee	36
	 	5.4	Trustee May File Proofs of Claim	37
	 	5.5	Trustee May Enforce Claims Without Possession of Securities	37
	 	5.6	Application of Money Collected	38
	 	5.7	Limitation on Suits	38
	 	5.8	Unconditional Right of Holders to Receive Principal, Premium and Interest	39
	 	5.9	Restoration of Rights and Remedies	39
	 	5.10	Rights and Remedies Cumulative	39
	 	5.11	Delay or Omission Not Waiver	39
	 	5.12	Control by Holders	39
	 	5.13	Waiver of Past Defaults	40
	 	5.14	Undertaking for Costs	40
	 	5.15	Waiver of Stay or Extension Laws	40
	 	 	 
	ARTICLE SIX	THE TRUSTEE	41
	 	6.1	Certain Duties and Responsibilities	41
	 	6.2	Notice of Defaults	42
	 	6.3	Certain Rights of Trustee	42
	 	6.4	Not Responsible for Recitals or Issuance of Securities	43
	 	6.5	May Hold Securities	44
	 	6.6	Money Held in Trust	44
	 	6.7	Compensation and Reimbursement	44
	 	6.8	Disqualification; Conflicting Interests	44
	 	6.9	Corporate Trustee Required; Eligibility	45
	 	6.10	Resignation and Removal; Appointment of Successor	45
	 	6.11	Acceptance of Appointment by Successor	46
	 	6.12	Merger, Conversion, Consolidation or Succession to Business	47
	 	6.13	Preferential Collection of Claims Against Company	48
	 	6.14	Appointment of Authenticating Agent	48
	 	 	 	 
	ARTICLE SEVEN	HOLDERS’ LISTS AND REPORTS BY TRUSTEE AND COMPANY	50
	 	7.1	Company to Furnish Trustee Names and Addresses of Holders	50
	 	7.2	Preservation of Information; Communications to Holders	50
	 	7.3	Reports by Trustee	51
	 	7.4	Reports by Company	51

 

    	ii

    	 

    

 

	ARTICLE EIGHT	CONSOLIDATION, AMALGAMATION, MERGER AND SALE	52
	 	8.1	Company May Consolidate, Etc., Only on Certain Terms	52
	 	8.2	Successor Substituted	52
	 	 	 
	ARTICLE NINE	AMENDMENT, SUPPLEMENT AND WAIVER	53
	 	9.1	Without Consent of Holders	53
	 	9.2	With Consent of Holders	55
	 	9.3	Execution of Supplemental Indentures	56
	 	9.4	Effect of Supplemental Indentures	56
	 	9.5	Conformity with Trust Indenture Act	57
	 	9.6	Reference in Securities to Supplemental Indentures	57
	 	 	 
	ARTICLE TEN	COVENANTS	57
	 	10.1	Payment of Principal, Premium and Interest	57
	 	10.2	Maintenance of Office or Agency	57
	 	10.3	Money for Securities Payments to be Held in Trust	58
	 	10.4	Existence	59
	 	10.5	Statement by Officers as to Default	59
	 	10.6	Additional Amounts	59
	 	 	 
	ARTICLE ELEVEN	REDEMPTION OF SECURITIES	60
	 	11.1	Applicability of Article	60
	 	11.2	Election to Redeem; Notice to Trustee	60
	 	11.3	Selection by Trustee of Securities to be Redeemed	60
	 	11.4	Notice of Redemption	61
	 	11.5	Deposit of Redemption Price	61
	 	11.6	Securities Payable on Redemption Date	61
	 	11.7	Securities Redeemed in Part	62
	 	 	 
	ARTICLE TWELVE	SINKING FUNDS	62
	 	12.1	Applicability of Article	62
	 	12.2	Satisfaction of Sinking Fund Payments with Securities	62
	 	12.3	Redemption of Securities for Sinking Fund	63
	 	 	 
	ARTICLE THIRTEEN  	DEFEASANCE	63
	 	13.1	Option to Effect Legal Defeasance or Covenant Defeasance	63
	 	13.2	Legal Defeasance and Discharge	63
	 	13.3	Covenant Defeasance	64
	 	13.4	Conditions to Legal or Covenant Defeasance	64
	 	13.5	Deposited Money and U.S. Government Obligations to be Held in Trust, Other Miscellaneous Provisions	66
	 	13.6	Repayment	66
	 	13.7	Reinstatement	66

 

    	iii

    	 

    

 

	ARTICLE FOURTEEN	SUBORDINATION OF SECURITIES	67
	 	14.1	Securities Subordinated to Senior Debt	67
	 	14.2	No Payment on Securities in Certain Circumstances	67
	 	14.3	Payment over Proceeds upon Dissolution, Etc	68
	 	14.4	Subrogation	70
	 	14.5	Obligations of Company Unconditional	70
	 	14.6	Notice to Trustee	71
	 	14.7	Reliance on Judicial Order or Certificate of Liquidating Agent	71
	 	14.8	Trustee’s Relation to Senior Debt	72
	 	14.9	Subordination Rights Not Impaired by Acts or Omissions of the Company or Holders of Senior Debt	72
	 	14.10	Holders Authorize Trustee to Effectuate Subordination of Securities	72
	 	14.11	Not to Prevent Events of Default	73
	 	14.12	Trustee’s Compensation Not Prejudiced	73
	 	14.13	No Waiver of Subordination Provisions	73
	 	14.14	Payments May Be Paid Prior to Dissolution	73
	 	14.15	Trust Moneys Not Subordinated	73

 

 

 

 

    	iv

    	 

    

INDENTURE

INDENTURE, dated
as of March 28, 2013, between PACIFIC ETHANOL, INC., a corporation duly organized and existing under the laws of the State of Delaware
(herein called the “Company”) and U.S BANK NATIONAL ASSOCIATION, a national banking association organized under
the laws of the United States, as trustee (the “Trustee”).

RECITALS

WHEREAS, the Company
has duly authorized the execution and delivery of this Indenture to provide for the issuance from time to time of its unsecured
subordinated debentures, notes or other evidences of indebtedness (herein called the “Securities”), to be issued
in one or more series as provided in this Indenture;

WHEREAS, all things
necessary to make this Indenture a valid agreement of the Company, in accordance with its terms, have been done; and

WHEREAS, this Indenture
is subject to the provisions of the Trust Indenture Act that are required to be a part of this Indenture and, to the extent applicable,
shall be governed by such provisions.

NOW, THEREFORE,
in consideration of the premises and the purchase of the Securities by the Holders thereof, it is mutually covenanted and agreed,
for the equal and proportionate benefit of all Holders of the Securities or of series thereof, as follows:

ARTICLE
One

DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION

1.1             Definitions.
For all purposes of this Indenture, except as otherwise expressly provided or unless the context otherwise requires:

(a)               
the terms defined in this Article have the meanings assigned to them in this Article and include the plural as well as the
singular;

(b)              
all terms used in this Indenture that are defined in the Trust Indenture Act, defined by a Trust Indenture Act reference
to another statute or defined by an SEC rule under the Trust Indenture Act have the meanings so assigned to them;

(c)               
all accounting terms not otherwise defined herein have the meanings assigned to them in accordance with GAAP;

(d)              
the words “herein,” “hereof” and “hereunder” and other words of
similar import refer to this Indenture as a whole and not to any particular Article, Section or other subdivision;

(e)               
the words “Article” and “Section” refer to an Article and Section, respectively, of
this Indenture; and

(f)               
the word “includes” and its derivatives means “includes, but is not limited to” and
corresponding derivative definitions.

 

    	1

    	 

    

Certain terms, used
principally in Article Six, are defined in that Article.

“Act,”
when used with respect to any Holder, has the meaning specified in Section 1.5.

“Additional
Defeasible Provision” means a covenant or other provision contained that is (a) made part of this Indenture pursuant
to a supplemental indenture hereto, a Board Resolution or an Officer’s Certificate delivered pursuant to Section 3.1,
and (b) pursuant to the terms set forth in such supplemental indenture, Board Resolution or Officer’s Certificate, made subject
to the provisions of Article Thirteen.

“Affiliate”
of any specified Person means any other Person directly or indirectly controlling or controlled by or under direct or indirect
common control with such specified Person. For purposes of this definition, “control,” as used with respect
to any Person, means the possession, directly or indirectly, of the power to direct or cause the direction of the management or
policies of such Person, whether through the ownership of voting securities, by agreement or otherwise. For purposes of this definition,
the terms “controlling,” “controlled by” and “under common control with”
have correlative meanings.

“Authenticating
Agent” means any Person authorized by the Trustee to act on behalf of the Trustee to authenticate Securities.

“Banking
Day” means, in respect of any city, any date on which commercial banks are open for business in that city.

“Bankruptcy
Law” means any applicable Federal or State bankruptcy, insolvency, reorganization or other similar law.

“Board
of Directors” means the board of directors of the Company or any duly authorized committee of that board to which the
powers of that board have been lawfully delegated.

“Board
Resolution” means a copy of a resolution certified by the Secretary or an Assistant Secretary of the Company, the principal
financial officer of the Company, any other authorized officer of the Company, or a person duly authorized by any of them, in each
case as applicable, to have been duly adopted by the Board of Directors and to be in full force and effect on the date of such
certification, and delivered to the Trustee. Where any provision of this Indenture refers to action to be taken pursuant to a Board
Resolution (including the establishment of any series of the Securities and the forms and terms thereof), such action may be taken
by any committee, officer or employee of the Company authorized to take such action by the Board of Directors as evidenced by a
Board Resolution.

“Business
Day,” when used with respect to any Place of Payment or other location, means, except as otherwise provided as contemplated
by Section 3.1 with respect to any series of Securities, each Monday, Tuesday, Wednesday, Thursday and Friday which
is not a day on which banking institutions in that Place of Payment or other location are authorized or obligated by law, executive
order or regulation to close.

 

    	2

    	 

    

“CINS”
means the CUSIP International Numbering System.

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

“Company”
means the Person named as the “Company” in the first paragraph of this instrument until a successor or resulting
corporation shall have become such pursuant to the applicable provisions of this Indenture, and thereafter “Company”
shall mean such successor or resulting corporation.

“Company
Request” or “Company Order” means, in the case of the Company, a written request or order signed in
the name of the Company by its Chairman of the Board, its Chief Executive Officer, its Chief Financial Officer, its Chief Operating
Officer, its President, any of its Vice Presidents or any other duly authorized officer of the Company or any person duly authorized
by any of them, and delivered to the Trustee.

“Corporate
Trust Office” means the office of the Trustee at its address specified in Section 1.6 or such other address
as to which the Trustee may give notice to the Company.

“corporation”
includes corporations, companies, associations, partnerships, limited partnerships, limited liability companies, joint-stock companies
and trusts.

“Covenant
Defeasance” has the meaning specified in Section 13.3.

“CUSIP”
means the Committee on Uniform Securities Identification Procedures.

“Custodian”
means any receiver, trustee, assignee, liquidator or similar official under any Bankruptcy Law.

“Debt”
means any obligation created or assumed by any Person for the repayment of money borrowed and any purchase money obligation created
or assumed by such Person and any guarantee of the foregoing.

“Default”
means, with respect to a series of Securities, any event that is, or after notice or lapse of time or both would be, an Event of
Default.

“Defaulted
Interest” has the meaning specified in Section 3.7.

“Definitive
Security” means a security other than a Global Security or a temporary Security.

“Depositary”
means, with respect to the Securities of any series issuable or issued in whole or in part in the form of one or more Global Securities,
a clearing agency registered under the Exchange Act that is designated to act as Depositary for such Securities as contemplated
by Section 3.1, until a successor Depositary shall have become such pursuant to the applicable provisions of this Indenture,
and thereafter shall mean or include each Person which is a Depositary hereunder, and if at any time there is more than one such
Person, shall be a collective reference to such Persons.

 

    	3

    	 

    

“Designated
Senior Debt” shall have the meaning given to such term in any Board Resolution or indenture supplemental hereto.

“Dollar”
or “$” means the coin or currency of the United States of America, which at the time of payment is legal tender
for the payment of public and private debts.

“Event
of Default” has the meaning specified in Section 5.1.

“Exchange
Act” means the Securities Exchange Act of 1934, as amended.

“Foreign
Currency” means a currency used by the government of a country other than the United States of America.

“GAAP”
means generally accepted accounting principles in the United States of America as in effect from time to time, including those
set forth in the opinions and pronouncements of the Accounting Principles Board of the American Institute of Certified Public Accountants
and statements and pronouncements of the Financial Accounting Standards Board or in such other statements by such other entity
as approved by a significant segment of the accounting profession. All ratios and computations based on GAAP contained in this
Indenture will be computed in conformity with GAAP.

“Global
Security” means a Security in global form that evidences all or part of a series of Securities and is authenticated and
delivered to, and registered in the name of, the Depositary for the Securities of such series or its nominee.

“Holder”
means a Person in whose name a Security is registered in the Security Register.

“Indenture”
means this instrument as originally executed or as it may from time to time be supplemented or amended by one or more indentures
supplemental hereto entered into pursuant to the applicable provisions hereof, including, for all purposes of this instrument,
and any such supplemental indenture, the provisions of the Trust Indenture Act that are deemed to be part of and govern this instrument
and any such supplemental indenture, respectively. The term “Indenture” also shall include the terms of particular
series of Securities established as contemplated by Section 3.1.

“interest,”
when used with respect to an Original Issue Discount Security which by its terms bears interest only after Maturity, means interest
payable after Maturity.

“Interest
Payment Date,” when used with respect to any Security, means the Stated Maturity of an installment of interest on such
Security.

“Judgment
Currency” has the meaning specified in Section 1.16.

“Legal
Defeasance” has the meaning specified in Section 13.2.

“mandatory
sinking fund payment” has the meaning specified in Section 12.1.

 

    	4

    	 

    

“Maturity,”
when used with respect to any Security, means the date on which the principal of such Security or an installment of principal becomes
due and payable as therein or herein provided, whether at the Stated Maturity or by declaration of acceleration, call for redemption
or otherwise.

“Notice
of Default” means a written notice of the kind specified in Section 5.1(d).

“Officer’s
Certificate” means, in the case of the Company, a certificate signed by the Chairman of the Board, the Chief Executive
Officer, the Chief Financial Officer, the Chief Operating Officer, the President, any Vice President or any other duly authorized
officer of the Company, or a person duly authorized by any of them, and delivered to the Trustee.

“Opinion
of Counsel” means a written opinion of counsel, who may be an employee of or counsel for the Company and who shall be
reasonably acceptable to the Trustee.

“optional
sinking fund payment” has the meaning specified in Section 12.1.

“Original
Issue Discount Security” means any Security which provides for an amount less than the principal amount thereof to be
due and payable upon a declaration of acceleration of the Maturity thereof pursuant to Section 5.2.

“Outstanding,”
when used with respect to Securities, means, as of the date of determination, all Securities theretofore authenticated and delivered
under this Indenture, except:

(a)Securities
theretofore canceled by the Trustee or delivered to the Trustee for cancellation;

(b)Securities
for whose payment or redemption money in the necessary amount has been theretofore deposited with the Trustee or any Paying Agent
(other than the Company) in trust or set aside and segregated in trust by the Company (if the Company shall act as its own Paying
Agent) for the Holders of such Securities; provided, however, that, if such Securities are to be redeemed, notice
of such redemption has been duly given pursuant to this Indenture or provision therefor satisfactory to the Trustee has been made;

(c)Securities
which have been paid pursuant to Section 3.6 or in exchange for or in lieu of which other Securities have been authenticated
and delivered pursuant to this Indenture, other than any such Securities in respect of which there shall have been presented to
the Trustee proof satisfactory to it that such Securities are held by a bona fide purchaser in whose hands such Securities are
valid obligations of the Company; and

(d)Securities,
except to the extent provided in Section 13.2 and Section 13.3, with respect to which the Company has effected
Legal Defeasance or Covenant Defeasance as provided in Article Thirteen, which Legal Defeasance or Covenant Defeasance then continues
in effect;

 

    	5

    	 

    

provided, however, that
in determining whether the Holders of the requisite principal amount of the Outstanding Securities have given any request, demand,
authorization, direction, notice, consent or waiver hereunder, (i) the principal amount of an Original Issue Discount Security
that shall be deemed to be Outstanding shall be the amount of the principal thereof that would be due and payable as of the date
of such determination upon acceleration of the Maturity thereof on such date pursuant to Section 5.2, (ii) the principal
amount of a Security denominated in one or more currencies or currency units other than U.S. dollars shall be the U.S. dollar equivalent
of such currencies or currency units, determined in the manner provided as contemplated by Section 3.1 on the date
of original issuance of such Security or by Section 1.15, if not otherwise so provided pursuant to Section 3.1,
of the principal amount (or, in the case of an Original Issue Discount Security, the U.S. dollar equivalent (as so determined)
on the date of original issuance of such Security of the amount determined as provided in clause (i) above) of such Security, and
(iii) Securities owned by the Company or any other obligor upon the Securities or any Affiliate of the Company or of such other
obligor shall be disregarded and deemed not to be Outstanding, except that, in determining whether the Trustee shall be protected
in relying upon any such request, demand, authorization, direction, notice, consent or waiver, only Securities which the Trustee
knows to be so owned shall be so disregarded. Securities so owned as described in clause (iii) of the immediately preceding sentence
which have been pledged in good faith may be regarded as Outstanding if the pledgee establishes to the satisfaction of the Trustee
the pledgee’s right to act with respect to such Securities and that the pledgee is not the Company or any other obligor upon
the Securities or any Affiliate of the Company or of such other obligor.

“Paying
Agent” means any Person authorized by the Company to pay the principal of and any premium or interest on any Securities
on behalf of the Company.

“Periodic
Offering” means an offering of Securities of a series from time to time, the specific terms of which Securities, including,
without limitation, the rate or rates of interest or formula for determining the rate or rates of interest thereon, if any, the
Stated Maturity or Stated Maturities thereof, the original issue date or dates thereof, the redemption provisions, if any, with
respect thereto, and any other terms specified as contemplated by Section 3.1 with respect thereto, are to be determined
by the Company upon the issuance of such Securities.

“Person”
means any individual, corporation, company, limited liability company, partnership, limited partnership, joint venture, association,
joint-stock company, trust, other entity, unincorporated organization or government or any agency or political subdivision thereof.

“Place
of Payment,” when used with respect to the Securities of any series, means, unless otherwise specifically provided for
with respect to such series as contemplated by Section 3.1, the office or agency of the Company in the City of St.
Paul, Minnesota and such other place or places where, subject to the provisions of Section 10.2, the principal of and
any premium and interest on the Securities of that series are payable as contemplated by Section 3.1.

“Predecessor
Security” of any particular Security means every previous Security evidencing all or a portion of the same debt as that
evidenced by such particular Security; and, for the purposes of this definition, any Security authenticated and delivered under
Section 3.6 in exchange for or in lieu of a mutilated, destroyed, lost or stolen Security shall be deemed to evidence
the same debt as the mutilated, destroyed, lost or stolen Security.

“Redemption
Date,” when used with respect to any Security to be redeemed, means the date fixed for such redemption by or pursuant
to this Indenture.

 

    	6

    	 

    

“Redemption
Price,” when used with respect to any Security to be redeemed, means the price at which it is to be redeemed pursuant
to this Indenture.

“Regular
Record Date” for the interest payable on any Interest Payment Date on the Securities of any series means the date specified
for that purpose as contemplated by Section 3.1.

“Required
Currency” has the meaning specified in Section 1.16.

“Responsible
Officer” when used with respect to the Trustee, means any officer within the Corporate Trust Administration of the Trustee
(or any successor group of the Trustee) or any other officer of the Trustee customarily performing functions similar to those performed
by any of the above designated officers and also means, with respect to a particular corporate trust matter, any other officer
to whom such matter is referred because of his knowledge of and familiarity with the particular subject.

“SEC”
means the Securities and Exchange Commission, as from time to time constituted, created under the Exchange Act, or, if at any time
after the execution of this instrument such commission is not existing and performing the duties now assigned to it under the Trust
Indenture Act, then the body performing such duties at such time.

“Securities”
has the meaning stated in the first recital of this Indenture and more particularly means any Securities authenticated and delivered
under this Indenture.

“Security
Register” and “Security Registrar” have the respective meanings specified in Section 3.5.

“Senior
Debt” means (a) all Debt of the Company, whether currently outstanding or hereafter issued, unless, by the terms of the
instrument creating or evidencing such Debt, it is provided that such Debt is not superior in right of payment to the Securities,
and (b) any modifications, refunding, deferrals, renewals or extensions of any such Debt or securities, notes or other evidence
of Debt issued in exchange for such Debt; provided that in no event shall “Senior Debt” include (i) Debt of
the Company owed or owing to any Subsidiary of the Company or any officer, director or employee of the Company or any Subsidiary
of the Company, (ii) Debt to trade creditors or (iii) any liability for taxes owned or owing by the Company.

“Significant
Subsidiary” means any Subsidiary that would be a “Significant Subsidiary” of the Company within the
meaning of Rule 1-02 under Regulation S-X promulgated by the SEC.

“Special
Record Date” for the payment of any Defaulted Interest means a date fixed by the Trustee pursuant to Section 3.7.

“Stated
Maturity,” when used with respect to any Security or any installment of principal thereof or interest thereon, means
the date specified in such Security as the fixed date on which the principal of such Security or such installment of principal
or interest is due and payable.

 

    	7

    	 

    

“Subsidiary”
means (a) a corporation more than 50% of the outstanding voting stock of which is owned, directly or indirectly, by the Company
or by one or more other Subsidiaries, or by the Company and one or more other Subsidiaries or (b) any partnership or similar business
organization more than 50% of the ownership interests having ordinary voting power of which shall at the time be so owned. For
the purposes of this definition, “voting stock” means capital stock or equity interests which ordinarily have
voting power for the election of directors, whether at all times or only so long as no senior class of stock has such voting power
by reason of any contingency.

 

“Trustee”
means the Person named as the “Trustee” in the first paragraph of this instrument until a successor Trustee
shall have become such pursuant to the applicable provisions of this Indenture, and thereafter “Trustee” shall
mean or include each Person who is then a Trustee hereunder, and if at any time there is more than one such Person, “Trustee”
as used with respect to the Securities of any series shall mean the Trustee with respect to Securities of that series.

“Trust
Indenture Act” means the Trust Indenture Act of 1939, as amended, as in force at the date as of which this instrument
was executed, except as provided in Section 9.5; provided, however, that if the Trust Indenture Act of
1939 is amended after such date, “Trust Indenture Act” means, to the extent required by any such amendment,
the Trust Indenture Act of 1939 as so amended.

“U.S. Person”
shall have the meaning assigned to such term in Section 7701(a)(30) of the Code.

“U.S. Government
Obligations” means securities which are (a) direct obligations of the United States for the payment of which its full
faith and credit is pledged, or (b) obligations of a Person controlled or supervised by and acting as an agency or instrumentality
of the United States, the payment of which is unconditionally guaranteed as a full faith and credit obligation by the United States,
each of which are not callable or redeemable at the option of the issuer thereof.

“Vice President,”
when used with respect to the Company or the Trustee, means any vice president, regardless of whether designated by a number or
a word or words added before or after the title “vice president.”

1.2            Incorporation by Reference of Trust Indenture Act. Whenever this Indenture refers to a provision of the Trust Indenture
Act, the provision is incorporated by reference in and made a part of this Indenture. The following Trust Indenture Act terms used
in this Indenture have the following meanings:

“commission”
means the SEC.

“indenture
securities” means the Securities.

“indenture
security holder” means a Holder.

“indenture
to be qualified” means this Indenture.

“indenture
trustee” or “institutional trustee” means the Trustee.

“obligor”
on the indenture securities means the Company or any other obligor on the indenture securities.

 

    	8

    	 

    

All terms used in
this Indenture that are defined by the Trust Indenture Act, defined by a Trust Indenture Act reference to another statute or defined
by an SEC rule under the Trust Indenture Act have the meanings so assigned to them.

1.3             Compliance Certificates and Opinions. Upon any application or request by the Company to the Trustee to take any action
under any provision of this Indenture, the Company shall furnish to the Trustee an Officer’s Certificate stating that all
conditions precedent, if any, provided for in this Indenture relating to the proposed action have been complied with and an Opinion
of Counsel stating that in the opinion of such counsel all such conditions precedent, if any, have been complied with, except that
in the case of any such application or request as to which the furnishing of such documents is specifically required by any provision
of this Indenture relating to such particular application or request, no additional certificate or opinion need be furnished except
as required under Section 314(c) of the Trust Indenture Act.

Every certificate
or opinion with respect to compliance with a condition or covenant provided for in this Indenture (except for certificates provided
for in Section 10.5) shall include:

(a)               
a statement that each individual signing such certificate or opinion has read such covenant or condition and the definitions
herein relating thereto;

(b)              
a brief statement as to the nature and scope of the examination or investigation upon which the statements or opinions contained
in such certificate or opinion are based;

(c)               
a statement that, in the opinion of each such individual, he has made such examination or investigation as is necessary
to enable him to express an informed opinion as to whether such covenant or condition has been complied with; and

(d)              
a statement as to whether, in the opinion of each such individual, such condition or covenant has been complied with.

1.4             Form of Documents Delivered to Trustee. In any case where several matters are required to be certified by, or covered
by an opinion of, any specified Person, it is not necessary that all such matters be certified by, or covered by the opinion of,
only one such Person, or that they be so certified or covered by only one document, but one such Person may certify or give an
opinion with respect to some matters and one or more other such Persons as to other matters, and any such Person may certify or
give an opinion as to such matters in one or several documents.

Any certificate
or opinion of an officer of the Company may be based, insofar as it relates to legal matters, upon a certificate or opinion of,
or representations by, counsel, unless such officer knows or, in the exercise of reasonable care, should know that the certificate
or opinion or representations with respect to the matters upon which his certificate or opinion is based are erroneous. Any such
certificate or opinion of counsel may be based, insofar as it relates to factual matters, upon a certificate or opinion of, or
representations by, an officer or officers of the Company stating that the information with respect to such factual matters is
in the possession of the Company unless such counsel knows that the certificate or opinion or representations with respect to such
matters are erroneous.

 

    	9

    	 

    

Where any Person
is required to make, give or execute two or more applications, requests, consents, certificates, statements, opinions or other
instruments under this Indenture, they may, but need not, be consolidated and form one instrument.

1.5             Acts of Holders; Record Dates.

(a)               
Any request, demand, authorization, direction, notice, consent, waiver or other action provided by this Indenture to be
given or taken by Holders may be embodied in and evidenced by one or more instruments of substantially similar tenor signed (either
physically or by means of a facsimile or an electronic transmission, provided that such electronic transmission is transmitted
through the facilities of a Depositary) by such Holders in person or by agent duly appointed in writing; and, except as herein
otherwise expressly provided, such action shall become effective when such instrument or instruments are delivered to the Trustee
and, where it is hereby expressly required, to the Company. Such instrument or instruments (and the action embodied therein and
evidenced thereby) are herein sometimes referred to as the “Act” of the Holders signing such instrument or instruments.
Proof of execution of any such instrument or of a writing appointing any such agent shall be sufficient for any purpose of this
Indenture and (subject to Section 315 of the Trust Indenture Act) conclusive in favor of the Trustee and the Company,
if made in the manner provided in this Section.

(b)              
The fact and date of the execution by any Person of any such instrument or writing may be proved by the affidavit of a witness
of such execution or by a certificate of a notary public or other officer authorized by law to take acknowledgments of deeds, certifying
that the individual signing such instrument or writing acknowledged to him the execution thereof. Where such execution is by a
signer acting in a capacity other than his individual capacity, such certificate or affidavit shall also constitute sufficient
proof of his authority. The fact and date of the execution of any such instrument or writing, or the authority of the Person executing
the same, may also be proved in any other manner which the Trustee deems sufficient.

(c)               
The ownership, principal amount and serial numbers of Securities held by any Person, and the date of commencement of such
Person’s holding of same, shall be proved by the Security Register.

(d)              
Any request, demand, authorization, direction, notice, consent, waiver or other Act of the Holder of any Security shall
bind every future Holder of the same Security and the Holder of every Security issued upon the registration of transfer thereof
or in exchange therefor or in lieu thereof in respect of anything done, omitted or suffered to be done by the Trustee or the Company
in reliance thereon, regardless of whether notation of such action is made upon such Security.

(e)               
Without limiting the foregoing, a Holder entitled to give or take any action hereunder with regard to any particular Security
may do so with regard to all or any part of the principal amount of such Security or by one or more duly appointed agents each
of which may do so pursuant to such appointment with regard to all or any different part of such principal amount.

 

    	10

    	 

    

(f)               
The Company may set any day as the record date for the purpose of determining the Holders of Outstanding Securities of any
series entitled to give or take any request, demand, authorization, direction, notice, consent, waiver or other Act provided or
permitted by this Indenture to be given or taken by Holders of Securities of such series, but the Company shall have no obligation
to do so. With regard to any record date set pursuant to this paragraph, the Holders of Outstanding Securities of the relevant
series on such record date (or their duly appointed agents), and only such Persons, shall be entitled to give or take the relevant
action, regardless of whether such Holders remain Holders after such record date.

1.6             
Notices, Etc., to Trustee and Company.

(a)               
Any notice or communication by the Company or the Trustee to the others is duly given if in writing and delivered in Person
or mailed by first class mail (registered or certified, return receipt requested), telecopier or overnight air courier guaranteeing
next day delivery, to the others’ address:

 

If to the Company:

 

Pacific Ethanol, Inc.

400 Capitol Mall, Suite 2060

Sacramento, CA 95035

Facsimile: (916) 446-3937

Attention: General Counsel

 

If to the Trustee:

 

U.S. Bank National Association, as
Trustee

Global Corporate Trust Services

One California Street, Suite 1000

San Francisco, CA 94111

Attn: A. Fung (Pacific Ethanol)

Facsimile: (415) 677-3769

(b)              
The Company or the Trustee, by notice to the others, may designate additional or different addresses for subsequent notices
or communications.

(c)               
All notices and communications (other than those sent to Holders) shall be deemed to have been duly given: at the time delivered
by hand, if personally delivered; three Business Days after being deposited in the mail, postage prepaid, if mailed; when receipt
acknowledged, if telecopied; and the next Business Day after timely delivery to the courier, if sent by overnight air courier guaranteeing
next day delivery.

 

    	11

    	 

    

1.7             
Notice to Holders; Waiver. Where this Indenture provides for notice to Holders of any event, such notice shall be
sufficiently given (unless otherwise herein expressly provided) if in writing and mailed, first-class postage prepaid, to each
Holder affected by such event, at his address as it appears in the Security Register, not later than the latest date, and not earlier
than the earliest date, prescribed for the giving of such notice. In any case where notice to Holders is given by mail, neither
the failure to mail such notice, nor any defect in any notice so mailed, to any particular Holder shall affect the sufficiency
of such notice with respect to other Holders. Any notice mailed to a Holder in the manner herein prescribed shall be conclusively
deemed to have been received by such Holder, regardless of whether such Holder actually receives such notice.

Where this Indenture
provides for notice in any manner, such notice may be waived in writing by the Person entitled to receive such notice, either before
or after the event, and such waiver shall be the equivalent of such notice. Waivers of notice by Holders shall be filed with the
Trustee, but such filing shall not be a condition precedent to the validity of any action taken in reliance upon such waiver.

In case by reason
of the suspension of regular mail service or by reason of any other cause it shall be impracticable to give such notice by mail,
then such notification as shall be made with the approval of the Trustee shall constitute a sufficient notification for every purpose
hereunder.

1.8             
Conflict with Trust Indenture Act. If any provision hereof limits, qualifies or conflicts with a provision of the
Trust Indenture Act that is required under such Act to be a part of and govern this Indenture, the latter provision shall control.
If any provision of this Indenture modifies or excludes any provision of the Trust Indenture Act that may be so modified or excluded,
the latter provision shall be deemed to apply to this Indenture as so modified or excluded, as the case may be.

1.9             
Effect of Headings and Table of Contents. The Article and Section headings herein and the Table of Contents are for
convenience only and shall not affect the construction hereof.

1.10           
Successors and Assigns. All covenants and agreements in this Indenture by the Company shall bind their respective
successors and assigns, whether so expressed or not.

1.11          
Separability Clause. In case any provision in this Indenture or in the Securities shall be invalid, illegal or unenforceable,
the validity, legality and enforceability of the remaining provisions shall not in any way be affected or impaired thereby.

1.12          
Benefits of Indenture. Nothing in this Indenture or in the Securities express or implied, shall give to any Person,
other than the parties hereto and their successors hereunder, the holders of Senior Debt and the Holders, any benefit or any legal
or equitable right, remedy or claim under this Indenture.

 

    	12

    	 

    

1.13          Governing Law. THIS INDENTURE AND THE SECURITIES SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF
THE STATE OF NEW YORK.

1.14         
Legal Holidays. In any case where any Interest Payment Date, Redemption Date or Stated Maturity of any Security shall
not be a Business Day at any Place of Payment, then (notwithstanding any other provision of this Indenture or of the Securities
(other than a provision of the Securities of any series that specifically states that such provision shall apply in lieu of this
Section 1.14)) payment of interest or principal and any premium need not be made at such Place of Payment on such date,
but may be made on the next succeeding Business Day at such Place of Payment with the same force and effect as if made on the Interest
Payment Date or Redemption Date, or at the Stated Maturity, provided that no interest shall accrue for the period from and after
such Interest Payment Date, Redemption Date or Stated Maturity, as the case may be.

1.15         
Securities in a Composite Currency, Currency Unit or Foreign Currency. Unless otherwise specified in an Officer’s
Certificate delivered pursuant to Section 3.1 of this Indenture with respect to a particular series of Securities,
whenever for purposes of this Indenture any action may be taken by the Holders of a specified percentage in aggregate principal
amount of Securities of all series or all series affected by a particular action at the time Outstanding and, at such time, there
are Outstanding Securities of any series which are denominated in a coin, currency or currencies other than Dollars (including,
but not limited to, any composite currency, currency units or Foreign Currency), then the principal amount of Securities of such
series which shall be deemed to be Outstanding for the purpose of taking such action shall be that amount of Dollars that could
be obtained for such amount at the Market Exchange Rate. For purposes of this Section 1.15, the term “Market
Exchange Rate” shall mean the noon Dollar buying rate in The City of New York for cable transfers of such currency or
currencies as published by the Federal Reserve Bank of New York, as of the most recent available date. If such Market Exchange
Rate is not so available for any reason with respect to such currency, the Trustee shall use, in its sole discretion and without
liability on its part, such quotation of the Federal Reserve Bank of New York as of the most recent available date, or quotations
or rates of exchange from one or more major banks in The City of New York or in the country of issue of the currency in question,
which for purposes of euros shall be Brussels, Belgium, or such other quotations or rates of exchange as the Trustee shall deem
appropriate. The provisions of this paragraph shall apply in determining the equivalent principal amount in respect of Securities
of a series denominated in a currency other than Dollars in connection with any action taken by Holders of Securities pursuant
to the terms of this Indenture.

All decisions and
determinations of the Trustee regarding the Market Exchange Rate or any alternative determination provided for in the preceding
paragraph shall be in its sole discretion and shall, in the absence of manifest error, be conclusive to the extent permitted by
law for all purposes and irrevocably binding upon the Issuer and all Holders.

 

    	13

    	 

    

1.16         
Payment in Required Currency; Judgment Currency. The Company agrees, to the fullest extent that it may effectively
do so under applicable law, that (a) if for the purpose of obtaining judgment in any court it is necessary to convert the sum due
in respect of the principal of or interest on the Securities of any series (the “Required Currency”) into a
currency in which a judgment will be rendered (the “Judgment Currency”), the rate of exchange used shall be
the rate at which in accordance with normal banking procedures the Trustee could purchase in The City of New York the Required
Currency with the Judgment Currency on the day on which final unappealable judgment is entered, unless such day is not a Banking
Day, then, to the extent permitted by applicable law, the rate of exchange used shall be the rate at which in accordance with normal
banking procedures the Trustee could purchase in The City of New York the Required Currency with the Judgment Currency on the Banking
Day next preceding the day on which final unappealable judgment is entered and (b) its obligations under this Indenture to make
payments in the Required Currency (i) shall not be discharged or satisfied by any tender, or any recovery pursuant to any judgment
(regardless of whether entered in accordance with subclause (a)), in any currency other than the Required Currency, except to the
extent that such tender or recovery shall result in the actual receipt, by the payee, of the full amount of the Required Currency
expressed to be payable in respect of such payments, (ii) shall be enforceable as an alternative or additional cause of action
for the purpose of recovering in the Required Currency the amount, if any, by which such actual receipt shall fall short of the
full amount of the Required Currency so expressed to be payable and (iii) shall not be affected by judgment being obtained for
any other sum due under this Indenture.

1.17         
Language of Notices, Etc. Any request, demand, authorization, direction, notice, consent, waiver or Act required
or permitted under this Indenture shall be in the English language, except that any published notice may be in an official language
of the country of publication.

1.18         
Incorporators, Shareholders, Officers and Directors of the Company Exempt from Individual Liability. No recourse
under or upon any obligation, covenant or agreement of or contained in this Indenture or of or contained in any Security or for
any claim based thereon or otherwise in respect thereof, or in any Security or because of the creation of any indebtedness represented
thereby, shall be had against any incorporator, stockholder, member, officer, manager or director, as such, past, present or future,
of the Company or any successor Person, either directly or through the Company or any successor Person, whether by virtue of any
constitution, statute or rule of law, or by the enforcement of any assessment or penalty or otherwise, it being expressly understood
that all such liability is hereby expressly waived and released as a condition of, and as a part of the consideration for, the
execution of this Indenture and the issue of the Securities.

ARTICLE
Two

SECURITY FORMS

2.1             Forms Generally. The Securities of each series shall be in substantially the form set forth in this Article Two,
or in such other form or forms as shall be established by or pursuant to a Board Resolution or in one or more indentures supplemental
hereto, in each case with such appropriate insertions, omissions, substitutions and other variations as are required or permitted
by this Indenture, and may have such letters, numbers or other marks of identification and such legends or endorsements placed
thereon as may be required to comply with the rules of any securities exchange or as may, consistently herewith, be determined
by the officers executing such Securities as evidenced by their execution thereof.

 

    	14

    	 

    

The definitive Securities
shall be printed, lithographed or engraved on steel engraved borders or may be produced in any other manner, all as determined
by the officers executing such Securities, as evidenced by their execution thereof. If the form of Securities of any series is
established by action taken pursuant to a Board Resolution, a copy of an appropriate record of such action shall be certified by
an authorized officer or other authorized person on behalf of the Company and delivered to the Trustee at or prior to the delivery
of the Company Order contemplated by Section 3.3 for the authentication and delivery of such Securities.

The forms of Global
Securities of any series shall have such provisions and legends as are customary for Securities of such series in global form,
including without limitation any legend required by the Depositary for the Securities of such series.

2.2             
Form of Face of Security. [If the Security is an Original Issue Discount Security, insert—FOR PURPOSES OF
SECTION 1275 OF THE UNITED STATES INTERNAL REVENUE CODE OF 1986, AS AMENDED, THE AMOUNT OF THE ORIGINAL ISSUE DISCOUNT IS _______________,
THE ISSUE DATE IS _______________, 20__ [AND] [_____,] THE YIELD TO MATURITY IS _______________ [_____,] [AND
THE ORIGINAL ISSUE DISCOUNT FOR THE SHORT ACCRUAL PERIOD IS _______________ AND THE METHOD USED TO DETERMINE THE YIELD THEREFOR
IS _______________]]

[Insert any other legend required
by the Code or the regulations thereunder.]

[If a Global Security,—insert
legend required by Section 2.4 of the Indenture] [If applicable, insert —UNLESS THIS SECURITY IS PRESENTED BY
AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION, TO THE COMPANY OR ITS AGENT FOR REGISTRATION
OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY SECURITY ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR SUCH OTHER NAME AS IS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY (AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO SUCH
OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY), ANY TRANSFER, PLEDGE OR OTHER USE
HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL SINCE THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST
HEREIN.]

 

 

    	15

    	 

    

PACIFIC ETHANOL, INC.

[TITLE OF SECURITY]

	No _______________	 	U.S. $__________

[CUSIP No. ________]

PACIFIC ETHANOL, INC., a company duly
incorporated under the laws of the State of Delaware (herein called the “Company,” which term includes any successor
or resulting Person under the Indenture hereinafter referred to), for value received, hereby promises to pay to _______________,
or registered assigns, the principal sum of _______________ United States Dollars on _______________. [If the Security is to
bear interest prior to Maturity, insert—, and to pay interest thereon from _______________ or from the most recent Interest
Payment Date to which interest has been paid or duly provided for, semi-annually on _______________ and _______________ in each
year, commencing _______________, at the rate of _____% per annum, until the principal hereof is paid or made available for payment
[if applicable, insert—, and at the rate of _____% per annum on any overdue principal and premium and on any installment
of interest (to the extent that the payment of such interest shall be legally enforceable)]. The interest so payable, and punctually
paid or duly provided for, on any Interest Payment Date will, as provided in such 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
interest, which shall be the _______________ or _______________ (regardless of whether a Business Day), as the case may be, next
preceding such Interest Payment Date. Any such interest not so 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 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 said Indenture].

[If the Security is not to bear interest
prior to Maturity, insert—The principal of this Security shall not bear interest except in the case of a default in payment
of principal upon acceleration, upon redemption or at Stated Maturity and in such case the overdue principal of this Security shall
bear interest at the rate of _____% per annum (to the extent that the payment of such interest shall be legally enforceable), which
shall accrue from the date of such default in payment to the date payment of such principal has been made or duly provided for.
Interest on any overdue principal shall be payable on demand. Any such interest on any overdue principal that is not so paid on
demand shall bear interest at the rate of _____% per annum (to the extent that the payment of such interest shall be legally enforceable),
which shall accrue from the date of such demand for payment to the date payment of such interest has been made or duly provided
for, and such interest shall also be payable on demand.]

 

    	16

    	 

    

[If a Global Security, insert—Payment
of the principal of (and premium, if any) and [if applicable, insert—any such] interest on this Security will be made
by transfer of immediately available funds to a bank account in _______________ designated by the Holder 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 [state other
currency].]

[If a Definitive Security, insert—Payment
of the principal of (and premium, if any) and [if applicable, insert—any such] interest on this Security will be made
at the office or agency of the Company maintained for that purpose in _______________, 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] [state other currency] [or
subject to any laws or regulations applicable thereto and to the right of the Company (as provided in the Indenture) to rescind
the designation of any such Paying Agent, at the [main] offices of _______________ in _______________, or at such other offices
or agencies as the Company may designate, by [United States Dollar] [state other currency] check drawn on, or transfer
to a [United States Dollar] account maintained by the payee with, a bank in The City of New York (so long as the applicable
Paying Agency has received proper transfer instructions in writing at least _____ days prior to the payment date)] [if applicable,
insert—; provided, however, that payment of interest may be made at the option of the Company by [United States
Dollar] [state other currency] check mailed to the addresses of the Persons entitled thereto as such addresses shall
appear in the Security Register] [or by transfer to a [United States Dollar] [state other currency] account maintained
by the payee with a bank in The City of New York [state other Place of Payment] (so long as the applicable Paying Agent
has received proper transfer instructions in writing by the record date prior to the applicable Interest Payment 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, this Security shall not be entitled
to any benefit under the Indenture or be valid or obligatory for any purpose.

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

	Date _______________________	PACIFIC ETHANOL, INC	 
	 	 	 	 
	 	By:	 	 
	 	 	 	 

 

    	17

    	 

    

 

2.3             
Form of Reverse of Security. This Security is one of a duly authorized issue of subordinated securities of the Company
(herein called the “Securities”), issued and to be issued in one or more series under an Indenture, dated as
of _______________, 20__ (herein called the “Indenture”), between the Company and [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. As provided in the Indenture, the Securities may be issued in one or more series, which different
series may be issued in various aggregate principal amounts, may mature at different times, may bear interest, if any, at different
rates, may be subject to different redemption provisions, if any, may be subject to different sinking, purchase or analogous funds,
if any, may be subject to different covenants and Events of Default and may otherwise vary as in the Indenture provided or permitted.
This Security is one of the series designated on the face hereof [, limited in aggregate principal amount to $_______________].

This security is
the general, unsecured, subordinated obligation of the Company.

[If applicable,
insert—The Securities of this series are subject to redemption upon not less than _____ days’ notice by mail, [if applicable,
insert, —(1) on _______________ in any year commencing with the year _____ and ending with the year _____ through operation
of the sinking fund for this series at a Redemption Price equal to 100% of the principal amount, and (2) ] at any time [on
or after _______________, 20__], as a whole or in part, at the election of the Company, at the following Redemption Prices
(expressed as percentages of the principal amount): If redeemed [on or before _______________, _____%, and if redeemed]
during the 12-month period beginning _______________ of the years indicated,

	Year	Redemption
    Price	Year	Redemption
    Price
	 	 	 	 
	 	 	 	 

and thereafter at a Redemption Price
equal to % of the principal amount, together in the case of any such redemption [if applicable, insert—(whether through
operation of the sinking fund or otherwise)] with accrued interest to the Redemption Date, but interest installments whose
Stated Maturity is on or prior to such Redemption Date will be payable to the Holders of such Securities, or one or more Predecessor
Securities, of record at the close of business on the relevant record dates referred to on the face hereof, all as provided in
the Indenture.]

[If applicable, insert—The
Securities of this series are subject to redemption upon not less than _____ nor more than _____ days’ notice by mail, (1)
on _______________ in any year commencing with the year and ending with the year _____ through operation of the sinking fund for
this series at the Redemption Prices for redemption through operation of the sinking fund (expressed as percentages of the principal
amount) set forth in the table below, and (2) at anytime [on or after _______________], as a whole or in part, at the election
of the Company, at the Redemption Prices for redemption otherwise than through operation of the sinking fund (expressed as percentages
of the principal amount) set forth in the table below: If redeemed during the 12-month period beginning _______________ of the
years indicated,

 

    	18

    	 

    

 

	Year	 	Redemption
    Price for Redemption Through 

    Operation of the Sinking Fund	 	Redemption
    Price for Redemption Otherwise Than Through Operation of the Sinking Fund
	 	 	 	 	 
	 	 	 	 	 

and thereafter at a Redemption Price
equal to _____% of the principal amount, together in the case of any such redemption (whether through operation of the sinking
fund or otherwise) with accrued interest to the Redemption Date, but interest installments whose Stated Maturity is on or prior
to such Redemption Date will be payable to the Holders of such Securities, or one or more Predecessor Securities, of record at
the close of business on the relevant record dates referred to on the face hereof, all as provided in the Indenture.]

[If applicable, insert—Notwithstanding
the foregoing, the Company may not, prior to _______________, redeem any Securities of this series as contemplated by [clause (2)
of] the preceding paragraph as a part of, or in anticipation of, any refunding operation by the application, directly or indirectly,
of moneys borrowed having an interest cost to the Company (calculated in accordance with generally accepted financial practice)
of less than _____% per annum.]

[If applicable, insert—The
sinking fund for this series provides for the redemption on _______________ in each year beginning with the year _____ and ending
with the year _____ of [not less than] $__________ [(“mandatory sinking fund”) and not more than
$__________] aggregate principal amount of Securities of this series. [Securities of this series acquired or redeemed by
the Company otherwise than through [mandatory] sinking fund payments may be credited against subsequent [mandatory]
sinking fund payments otherwise required to be made [If applicable, insert— in the inverse order in which they become
due].]

[If the Securities are subject to
redemption in part of any kind, insert—In the event of redemption of this Security in part only, a new Security or Securities
of this series and of like tenor for the unredeemed portion hereof will be issued in the name of the Holder hereof upon the cancellation
hereof.]

[If applicable, insert—The
Securities of this series are not redeemable prior to Stated Maturity.]

[If the Security is not an Original
Issue Discount Security, insert—If an Event of Default with respect to Securities of this series shall occur and be continuing,
the principal of the Securities of this series may be declared due and payable in the manner and with the effect provided in the
Indenture.]

[If the Security is an Original Issue
Discount Security, insert —If an Event of Default with respect to Securities of this series shall occur and be continuing,
an amount of principal of the Securities of this series may be declared due and payable in the manner and with the effect provided
in the Indenture. Such amount shall be equal to —insert formula for determining the amount. Upon payment (i) of the amount
of principal so declared due and payable and (ii) of interest on any overdue principal and overdue interest (in each case to the
extent that the payment of such interest shall be legally enforceable), all of the Company’s obligations in respect of the
payment of the principal of and interest, if any, on the Securities of this series shall terminate.]

 

    	19

    	 

    

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 each
series to be affected. The Indenture also contains provisions permitting the Holders of specified percentages in principal amount
of the Securities of each series at the time Outstanding, on behalf of the Holders of all Securities of such series, to waive compliance
by the Company with certain provisions of the Indenture and certain past defaults under the Indenture and their consequences. 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,
regardless of whether notation of such consent or waiver is made upon this Security.

No reference herein
to the Indenture and no provision of this Security or of the Indenture shall alter or impair the obligation of the Company, which
is absolute and unconditional, to pay the principal of (and premium, if any) and interest on this Security at the times, place(s)
and rate, and in the coin or currency, herein prescribed.

[If a Global Security, insert—This
Global Security or portion hereof may not be exchanged for Definitive Securities of this series except in the limited circumstances
provided in the Indenture. The holders of beneficial interests in this Global Security will not be entitled to receive physical
delivery of Definitive Securities except as described in the Indenture and will not be considered the Holders thereof for any purpose
under the Indenture.]

[If a Definitive Security, insert—As
provided in the Indenture and subject to certain limitations therein set forth, the transfer of this Security is registerable in
the Security Register, upon surrender of this Security for registration of transfer at the office or agency of the Company in [If
applicable, insert—any place where the principal of and any premium and interest on this Security are payable] [If
applicable, insert—The City of New York [, or, subject to any laws or regulations applicable thereto and to the right of
the Company (limited as provided in the Indenture) to rescind the designation of any such transfer agent, at the [main] offices
of _______________ in _______________ or at such other offices or agencies as the Company may designate]], duly endorsed by, or
accompanied by a written instrument of transfer in form satisfactory to the Company and the Security Registrar duly executed by,
the Holder hereof or his attorney duly authorized in writing, and thereupon one or more new Securities of this series and of like
tenor, of authorized denominations and for the same aggregate principal amount, will be issued to the designated transferee or
transferees.]

The Securities of
this series are issuable only in registered form without coupons in denominations of U.S. $      and any integral multiple thereof.
As provided in the Indenture and subject to certain limitations therein set forth, Securities of this series are exchangeable for
a like aggregate principal amount of Securities of this series and of like tenor of a different authorized denomination, as requested
by the Holder surrendering the same.

No service charge
shall be made for any such registration of transfer or exchange, but the Company may require payment of a sum sufficient to cover
any tax or other governmental charge payable in connection therewith.

 

    	20

    	 

    

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, regardless of whether this Security be overdue,
and none of the Company, the Trustee nor any such agent shall be affected by notice to the contrary.

This Security is
subordinated in right of payment to Senior Debt, to the extent and in the manner provided in the Indenture.

No recourse under
or upon any obligation, covenant or agreement of or contained in the Indenture or of or contained in any Security, or for any claim
based thereon or otherwise in respect thereof, or in any Security, or because of the creation of any indebtedness represented thereby,
shall be had against any incorporator, stockholder, member, officer, manager or director, as such, past, present or future, of
the Company or of any successor Person, either directly or through the Company or any successor Person, whether by virtue of any
constitution, statute or rule of law, or by the enforcement of any assessment, penalty or otherwise; it being expressly understood
that all such liability is hereby expressly waived and released by the acceptance hereof and as a condition of, and as part of
the consideration for, the Securities and the execution of the Indenture.

The Indenture provides
that the Company (a) will be discharged from any and all obligations in respect of the Securities (except for certain obligations
described in the Indenture), or (b) need not comply with certain restrictive covenants of the Indenture, in each case if the Company
deposits, in trust, with the Trustee money or U.S. Government Obligations (or a combination thereof) which through the payment
of interest thereon and principal thereof in accordance with their terms will provide money, in an amount sufficient to pay all
the principal of and interest on the Securities, but such money need not be segregated from other funds except to the extent required
by law.

Except as otherwise
defined herein, all terms used in this Security which are defined in the Indenture shall have the meanings assigned to them in
the Indenture.

[If a Definitive Security, insert
as a separate page—

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

(Please Print or Typewrite Name and
Address of Assignee)

the within instrument of PACIFIC
ETHANOL, INC. and does hereby irrevocably constitute and appoint _______________ Attorney to transfer said instrument on the books
of the within-named Company, with full power of substitution in the premises.

	Please Insert Social Security or Other Identifying Number of Assignee:	 

 

	Dated:___________________	 
	 	(Signature)

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.]

 

    	21

    	 

    

 

2.4             
Global Securities. Every Global Security authenticated and delivered hereunder shall bear a legend in substantially
the following form:

THIS SECURITY IS A GLOBAL SECURITY
WITHIN THE MEANING OF THE INDENTURE HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF A DEPOSITARY OR A NOMINEE THEREOF.
THIS SECURITY MAY NOT BE TRANSFERRED TO, OR REGISTERED OR EXCHANGED FOR SECURITIES REGISTERED IN THE NAME OF, ANY PERSON OTHER
THAN THE DEPOSITARY OR A NOMINEE THEREOF AND NO SUCH TRANSFER MAY BE REGISTERED, EXCEPT IN THE LIMITED CIRCUMSTANCES DESCRIBED
IN THE INDENTURE.

EVERY SECURITY AUTHENTICATED AND
DELIVERED UPON REGISTRATION OF TRANSFER OF, OR IN EXCHANGE FOR OR IN LIEU OF, THIS SECURITY SHALL BE A GLOBAL SECURITY SUBJECT
TO THE FOREGOING, EXCEPT IN SUCH LIMITED CIRCUMSTANCES.

If Securities of
a series are issuable in whole or in part in the form of one or more Global Securities, as specified as contemplated by Section 3.1,
then, notwithstanding clause (i) of Section 3.1 and the provisions of Section 3.2, any Global Security
shall represent such of the Outstanding Securities of such series as shall be specified therein and may provide that it shall represent
the aggregate amount of Outstanding Securities from time to time endorsed thereon and that the aggregate amount of Outstanding
Securities represented thereby may from time to time be reduced or increased, as the case may be, to reflect exchanges. Any endorsement
of a Global Security to reflect the amount, or any reduction or increase in the amount, of Outstanding Securities represented thereby
shall be made in such manner and upon instructions given by such Person or Persons as shall be specified therein or in a Company
Order. Subject to the provisions of Section 3.3, Section 3.4 and Section 3.5, the Trustee shall
deliver and redeliver any Global Security in the manner and upon instructions given by the Person or Persons specified therein
or in the applicable Company Order. Any instructions by the Company with respect to endorsement or delivery or redelivery of a
Global Security shall be in a Company Order (which need not comply with Section 1.3 and need not be accompanied by
an Opinion of Counsel).

The provisions of
the last sentence of Section 3.3 shall apply to any Security represented by a Global Security if such Security was
never issued and sold by the Company and the Company delivers to the Trustee the Global Security together with a Company Order
(which need not comply with Section 1.3 and need not be accompanied by an Opinion of Counsel) with regard to the reduction
or increase, as the case may be, in the principal amount of Securities represented thereby, together with the written statement
contemplated by the last sentence of Section 3.3.

2.5             
Form of Trustee’s Certificate of Authentication. The Trustee’s certificate(s) of authentication shall
be in substantially the following form:

This is one of the
Securities of the series designated [insert title of applicable series] referred to in the within-mentioned Indenture.

 

	 	 	as Trustee
	 	 	 
	 	By:	 
	 	 	Authorized Officer

    	22

    	 

    

ARTICLE
Three

THE SECURITIES

3.1             
Amount Unlimited; Issuable in Series. The aggregate principal amount of Securities which may be authenticated and
delivered under this Indenture is unlimited.

The Securities may
be issued in one or more series. There shall be established in or pursuant to a Board Resolution, and set forth, or determined
in the manner provided, in an Officer’s Certificate, or established in one or more indentures supplemental hereto, prior
to the issuance of Securities of any series,

(a)               
the title of the Securities of the series (which shall distinguish the Securities of the series from all other Securities
and which may be part of a series of Securities previously issued);

(b)              
any limit upon the aggregate principal amount of the Securities of the series which may be authenticated and delivered under
this Indenture (except for Securities authenticated and delivered upon registration of transfer of, or in exchange for, or in lieu
of, other Securities of the series pursuant to Section 3.4, Section 3.5, Section 3.6, Section 9.6
or Section 11.7 and except for any Securities which, pursuant to Section 3.3, are deemed never to have
been authenticated and delivered hereunder);

(c)               
the Person to whom any interest on a Security of the series shall be payable, if other than the Person in whose name that
Security (or one or more Predecessor Securities) is registered at the close of business on the Regular Record Date for such interest;

(d)               the date or dates on which the principal of the Securities of the series is payable or the method of determination thereof;

(e)               
the rate or rates at which the Securities of the series shall bear interest, if any, or the formula, method or provision
pursuant to which such rate or rates are determined, the date or dates from which such interest shall accrue or the method of determination
thereof, the Interest Payment Dates on which such interest shall be payable and the Regular Record Date for the interest payable
on any Interest Payment Date;

(f)               
the place or places where, subject to the provisions of Section 10.2, the principal of and any premium and interest
on Securities of the series shall be payable, Securities of the series may be surrendered for registration of transfer, Securities
of the series may be surrendered for exchange and notices, and demands to or upon the Company in respect of the Securities of the
series and this Indenture may be served;

(g)              
the period or periods within which, the price or prices at which and the terms and conditions upon which Securities of the
series may be redeemed, in whole or in part, at the option of the Company;

 

    	23

    	 

    

 

(h)              
the obligation, if any, of the Company to redeem or purchase Securities of the series pursuant to any sinking fund or analogous
provisions or at the option of a Holder thereof and the period or periods within which, the price or prices at which and the terms
and conditions upon which Securities of the series shall be redeemed or purchased, in whole or in part, pursuant to such obligation;

(i)                
if other than denominations of $1,000 and any integral multiple thereof, the denominations in which Securities of the series
shall be issuable;

(j)                
whether payment of principal of and premium, if any, and interest, if any, on the Securities of the series shall be without
deduction for taxes, assessments or governmental charges paid by Holders of the series;

(k)               
if other than the principal amount thereof, the portion of the principal amount of Securities of the series which shall
be payable upon declaration of acceleration of the Maturity thereof pursuant to Section 5.2;

(l)                
if the amount of payments of principal of and any premium or interest on the Securities of the series may be determined
with reference to an index, the manner in which such amounts shall be determined;

(m)              
if and as applicable, that the Securities of the series shall be issuable in whole or in part in the form of one or more
Global Securities and, in such case, the Depositary or Depositaries for such Global Security or Global Securities and any circumstances
other than those set forth in Section 3.5 in which any such Global Security may be transferred to, and registered and
exchanged for Securities registered in the name of, a Person other than the Depositary for such Global Security or a nominee thereof
and in which any such transfer may be registered;

(n)              
any deletions from, modifications of or additions to the Events of Default set forth in Section 5.1 or the covenants
of the Company set forth in Article Ten with respect to the Securities of such series;

(o)              
whether and under what circumstances the Company will pay additional amounts on the Securities of the series held by a Person
who is not a U.S. Person in respect of any tax, assessment or governmental charge withheld or deducted and, if so, whether the
Company will have the option to redeem the Securities of the series rather than pay such additional amounts;

(p)              
if the Securities of the series are to be issuable in definitive form (whether upon original issue or upon exchange of a
temporary Security of such series) only upon receipt of certain certificates or other documents or satisfaction of other conditions,
the form and terms of such certificates, documents or conditions;

(q)              
if the Securities of the series are to be convertible into or exchangeable for any other security or property of the Company,
including, without limitation, securities of another Person held by the Company or its Affiliates and, if so, the terms thereof;

 

    	24

    	 

    

 

(r)                
if other than as provided in Section 13.2 and Section 13.3, the means of Legal Defeasance or Covenant
Defeasance as may be specified for the Securities of the series;

(s)                if other than the Trustee, the identity of the initial Security Registrar and any initial Paying Agent; and

(t)                
any other terms of the series (which terms shall not be inconsistent with the provisions of this Indenture).

All Securities of
any one series shall be substantially identical except as to denomination and except as may otherwise be provided in or pursuant
to the Board Resolution referred to above and (subject to Section 3.3) set forth, or determined in the manner provided,
in the Officer’s Certificate referred to above or in any such indenture supplemental hereto.

All Securities of
any one series need not be issued at the same time and, unless otherwise provided, a series may be reopened, without the consent
of the Holders, for increases in the aggregate principal amount of such series of Securities and issuances of additional Securities
of such series or for the establishment of additional terms with respect to the Securities of such series.

If any of the terms
of the series are established by action taken by or pursuant to a Board Resolution, a copy of an appropriate record of such action
shall be certified by an authorized officer or other authorized person on behalf of the Company and delivered to the Trustee at
or prior to the delivery of the Officer’s Certificate setting forth, or providing the manner for determining, the terms of
the series.

With respect to
Securities of a series subject to a Periodic Offering, such Board Resolution or Officer’s Certificate may provide general
terms for Securities of such series and provide either that the specific terms of particular Securities of such series shall be
specified in a Company Order or that such terms shall be determined by the Company or one or more agents thereof designated in
an Officer’s Certificate, in accordance with a Company Order.

3.2             
Denominations. The Securities of each series shall be issuable in registered form without coupons in such denominations
as shall be specified as contemplated by Section 3.1. In the absence of any such provisions with respect to the Securities
of any series, the Securities of such series shall be issuable in denominations of $1,000 and any integral multiple thereof.

3.3             
Execution, Authentication, Delivery and Dating. The Securities shall be executed on behalf of the Company by its
Chairman of the Board, its Chief Executive Officer, its President, its Chief Financial Officer or any of its Vice Presidents and
need not be attested. The signature of any of these officers on the Securities may be manual or facsimile.

Securities bearing
the manual or facsimile signatures of individuals who were at any time the proper officers of the Company shall bind the Company
notwithstanding that such individuals or any of them have ceased to hold such offices prior to the authentication and delivery
of such Securities or did not hold such offices at the date of such Securities.

 

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At any time and
from time to time after the execution and delivery of this Indenture, the Company may deliver Securities of any series executed
by the Company to the Trustee for authentication, together with a Company Order for the authentication and delivery of such Securities,
and the Trustee in accordance with the Company Order shall authenticate and deliver such Securities; provided, however, that in
the case of Securities offered in a Periodic Offering, the Trustee shall authenticate and deliver such Securities from time to
time in accordance with such other procedures (including, without limitation, the receipt by the Trustee of oral or electronic
instructions from the Company or its duly authorized agents, thereafter promptly confirmed in writing) acceptable to the Trustee
as may be specified by or pursuant to a Company Order delivered to the Trustee prior to the time of the first authentication of
Securities of such series. If the forms or terms of the Securities of the series have been established in or pursuant to one or
more Board Resolutions as permitted by Section 2.1 and Section 3.1, in authenticating such Securities,
and accepting the additional responsibilities under this Indenture in relation to such Securities, the Trustee shall be entitled
to receive such documents as it may reasonably request. The Trustee shall also be entitled to receive, and (subject to Section 6.1)
shall be fully protected in relying upon, an Opinion of Counsel stating,

(a)               
if the form or forms of such Securities has been established in or pursuant to a Board Resolution as permitted by Section 2.1,
that each such form has been established in conformity with the provisions of this Indenture;

(b)              
if the terms of such Securities have been, or in the case of Securities of a series offered in a Periodic Offering will
be, established in or pursuant to a Board Resolution as permitted by Section 3.1, that such terms have been, or in
the case of Securities of a series offered in a Periodic Offering will be, established in conformity with the provisions of this
Indenture, subject, in the case of Securities of a series offered in a Periodic Offering, to any conditions specified in such Opinion
of Counsel; and

(c)               
that such Securities when authenticated and delivered by the Trustee and issued by the Company in the manner and subject
to any conditions and assumptions specified in such Opinion of Counsel, will constitute valid and legally binding obligations of
the Company enforceable in accordance with their terms, subject to the following limitations: (i) bankruptcy, insolvency, moratorium,
reorganization, liquidation, fraudulent conveyance or transfer and other similar laws of general applicability relating to or affecting
the enforcement of creditors’ rights, or to general equity principles, (ii) the availability of equitable remedies being
subject to the discretion of the court to which application therefor is made; and (iii) such other usual and customary matters
as shall be specified in such Opinion of Counsel.

If such form or
forms or terms have been so established, the Trustee shall not be required to authenticate such Securities if the issue of such
Securities pursuant to this Indenture will affect the Trustee’s own rights, duties or immunities under the Securities and
this Indenture or otherwise in a manner which is not reasonably acceptable to the Trustee.

 

    	26

    	 

    

 

Notwithstanding
the provisions of Section 3.1 and of the preceding paragraph, if all Securities of a series are not to be originally
issued at one time, it shall not be necessary to deliver the Officer’s Certificate otherwise required pursuant to Section 3.1
or the Company Order and Opinion of Counsel otherwise required pursuant to such preceding paragraph at or prior to the time
of authentication of each Security of such series if such documents are delivered at or prior to the authentication upon original
issuance of the first Security of such series to be issued.

With respect to
Securities of a series offered in a Periodic Offering, the Trustee may rely, as to the authorization by the Company of any of such
Securities, on the form or forms and terms thereof and the legality, validity, binding effect and enforceability thereof, upon
the Opinion of Counsel and the other documents delivered pursuant to Section 2.1 and Section 3.1 and this
Section, as applicable, in connection with the first authentication of Securities of such series.

Each Security shall
be dated the date of its authentication.

No Security shall
be entitled to any benefit under this Indenture or be valid or obligatory for any purpose unless there appears on such Security
a certificate of authentication substantially in the form provided for herein executed by the Trustee by manual signature of an
authorized officer, and such certificate upon any Security shall be conclusive evidence, and the only evidence, that such Security
has been duly authenticated and delivered hereunder and is entitled to the benefits of this Indenture. Notwithstanding the foregoing,
if any Security shall have been authenticated and delivered hereunder but never issued and sold by the Company, and the Company
shall deliver such Security to the Trustee for cancellation as provided in Section 3.9 for all purposes of this Indenture
such Security shall be deemed never to have been authenticated and delivered hereunder and shall never be entitled to the benefits
of this Indenture.

3.4             
Temporary Securities. Pending the preparation of Definitive Securities of any series, the Company may execute, and
upon Company Order the Trustee shall authenticate and deliver, temporary Securities which are printed, lithographed, typewritten,
mimeographed or otherwise produced, in any authorized denomination, substantially of the tenor of the Definitive Securities in
lieu of which they are issued and with such appropriate insertions, omissions, substitutions and other variations as the officers
executing such Securities may determine, as evidenced by their execution of such Securities.

If temporary Securities
of any series are issued, the Company will cause Definitive Securities of that series to be prepared without unreasonable delay.
After the preparation of Definitive Securities of such series, the temporary Securities of such series shall be exchangeable for
Definitive Securities of such series upon surrender of the temporary Securities of such series at the office or agency of the Company
in a Place of Payment for that series, without charge to the Holder. Upon surrender for cancellation of any one or more temporary
Securities of any series the Company shall execute and the Trustee shall authenticate and deliver in exchange therefor a like principal
amount of Definitive Securities of the same series and tenor of authorized denominations. Until so exchanged the temporary Securities
of any series shall in all respects be entitled to the same benefits under this Indenture as Definitive Securities of such series.

 

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3.5             
Registration, Registration of Transfer and Exchange. The Company shall cause to be kept at the office or agency of
the Company in St. Paul, Minnesota or in any other office or agency of the Company in a Place of Payment required by Section 10.2
a register (the register maintained in such office being herein sometimes referred to as the “Security Register”)
in which, subject to such reasonable regulations as it may prescribe, the Company shall provide for the registration of Securities
and of transfers of Securities. The Trustee is hereby appointed as the initial “Security Registrar” for the
purpose of registering Securities and transfers of Securities as herein provided, and its corporate trust office located at 60
Livingston Avenue, 3rd Floor, St. Paul, Minnesota 55107, is the initial office or agency where the Securities Register
will be maintained. The Company may at any time replace such Security Registrar, change such office or agency or act as its own
Security Registrar. The Company will give prompt written notice to the Trustee of any change of the Security Registrar or of the
location of such office or agency.

Upon surrender for
registration of transfer of any Security of any series at the office or agency maintained pursuant to Section 10.2
for such purpose, the Company shall execute, and the Trustee shall authenticate and deliver, in the name of the designated transferee
or transferees, one or more new Securities of the same series and tenor, of any authorized denominations and of a like aggregate
principal amount.

At the option of
the Holder, Securities of any series (except a Global Security) may be exchanged for other Securities of the same series and tenor,
of any authorized denominations and of a like aggregate principal amount, upon surrender of the Securities to be exchanged at such
office or agency. Whenever any Securities are so surrendered for exchange, the Company shall execute and the Trustee shall authenticate
and deliver the Securities, which the Holder making the exchange is entitled to receive.

All Securities issued
upon any registration of transfer or exchange of Securities shall be the valid obligations of the Company evidencing the same debt,
and entitled to the same benefits under this Indenture, as the Securities surrendered upon such registration of transfer or exchange.

Every Security presented
or surrendered for registration of transfer or for exchange shall (if so required by the Company or the Trustee) be duly endorsed,
or be accompanied by a written instrument of transfer in form satisfactory to the Company and the Security Registrar duly executed,
by the Holder thereof or his attorney duly authorized in writing.

No service charge
shall be made for any registration of transfer or exchange of Securities, but the Company may require payment of a sum sufficient
to cover any tax or other governmental charge that may be imposed in connection with any registration of transfer or exchange of
Securities, other than exchanges pursuant to Section 3.4, Section 9.6 or Section 11.7 not involving
any transfer.

The Company shall
not be required (a) to issue, register the transfer of or exchange Securities of any series during a period beginning at, the opening
of business 15 days before the day of the mailing of a notice of redemption of Securities of that series selected for redemption
under Section 11.3 and ending at the close of business on the day of such mailing, or (b) to register the transfer
of or exchange any Security so selected for redemption in whole or in part, except the unredeemed portion of any Security being
redeemed in part.

 

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Notwithstanding
any other provisions of this Indenture and except as otherwise specified with respect to any particular series of Securities as
contemplated by Section 3.1, a Global Security representing all or a portion of the Securities of a series may not
be transferred, except as a whole by the Depositary for such series to a nominee of such Depositary or by a nominee of such Depositary
to such Depositary or another nominee of such Depositary or by such Depositary or any such nominee to a successor Depositary for
such series or a nominee of such successor Depositary. Every Security authenticated and delivered upon registration of, transfer
of, or in exchange for or in lieu of, a Global Security shall be a Global Security except as provided in the two paragraphs immediately
following.

If at any time the
Depositary for any Securities of a series represented by one or more Global Securities notifies the Company that it is unwilling
or unable to continue as Depositary for such Securities or if at any time the Depositary for such Securities shall no longer be
eligible to continue as Depositary under Section 3.1 or ceases to be a clearing agency registered under the Exchange
Act, the Company shall appoint a successor Depositary with respect to such Securities. If a successor Depositary for such Securities
is not appointed by the Company within 90 days after the Company receives such notice or becomes aware of such ineligibility, the
Company’s election pursuant to Section 3.1 that such Securities be represented by one or more Global Securities
shall no longer be effective and the Company will execute and the Trustee, upon receipt of a Company Order for the authentication
and delivery of Definitive Securities of such series, will authenticate and deliver, Securities of such series in definitive registered
form without coupons, in any authorized denominations, in an aggregate principal amount equal to the principal amount of the Global
Security or Securities representing such Securities in exchange for such Global Security or Securities registered in the names
of such Persons as the Depositary shall direct.

The Company may
at any time and in its sole discretion determine that the Securities of any series issued in the form of one or more Global Securities
shall no longer be represented by a Global Security or Securities. In such event, the Company will execute and the Trustee, upon
receipt of a Company Order for the authentication and delivery of the Definitive Securities of such series, will authenticate and
deliver, Securities of such series in definitive registered form without coupons, in any authorized denominations, in an aggregate
principal amount equal to the principal amount of the Global Security or Securities representing such Securities in exchange for
such Global Security or Securities registered in the names of such Persons as the Depositary shall direct.

If specified by
the Company pursuant to Section 3.1 with respect to Securities represented by a Global Security, the Depositary for
such Global Security may surrender such Global Security in exchange in whole or in part for Securities of the same series and tenor
in definitive registered form on such terms as are acceptable to the Company, the Trustee and such Depositary. Thereupon, the Company
shall execute, and the Trustee, upon receipt of a Company Order for the authentication and delivery of Securities in definitive
registered form, shall authenticate and deliver, without service charge:

(a)               
to the Person specified by such Depositary a new Security or Securities of the same series and tenor, of any authorized
denominations as requested by such Person, in an aggregate principal amount equal to and in exchange for such Person’s beneficial
interest in the Global Security; and

 

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(b)              
to such Depositary a new Global Security in a denomination equal to the difference, if any, between the principal amount
of the surrendered Global Security and the aggregate principal amount of Securities authenticated and delivered pursuant to clause
(a) above.

Every Person who
takes or holds any beneficial interest in a Global Security agrees that:

(a)              the
Company and the Trustee may deal with the Depositary as sole owner of the Global Security and as the authorized representative
of such Person;

(b)              such
Person’s rights in the Global Security shall be exercised only through the Depositary and shall be limited to those established
by law and agreement between such Person and the Depositary and/or direct and indirect participants of the Depositary;

(c)              the
Depositary and its participants make book-entry transfers of beneficial ownership among, and receive and transmit distributions
of principal and interest on the Global Securities to, such Persons in accordance with their own procedures; and

(d)              none
of the Company, the Trustee, nor any agent of any of them will have any responsibility or liability for any aspect of the records
relating to or payments made on account of beneficial ownership interests of a Global Security or for maintaining, supervising
or reviewing any records relating to such beneficial ownership interests.

3.6             
Mutilated, Destroyed, Lost and Stolen Securities. If any mutilated Security is surrendered to the Trustee, together
with, in proper cases, such security or indemnity as may be required by the Company or the Trustee to save each of them and any
agent of any of them harmless, the Company shall execute and the Trustee shall authenticate and deliver in exchange therefor a
new Security of the same series and of like tenor and principal amount and bearing a number not contemporaneously outstanding.

If there shall be
delivered to the Company and the Trustee (a) evidence to their satisfaction of the destruction, loss or theft of any Security and
(b) such security or indemnity as may be required by them to save each of them and any agent of either of them harmless, then,
in the absence of notice to the Company or the Trustee that such Security has been acquired by a bona fide purchaser, the Company
shall execute and upon its request the Trustee shall authenticate and deliver, in lieu of any such destroyed, lost or stolen Security,
a new Security of the same series and of like tenor and principal amount and bearing a number not contemporaneously outstanding.

In case any such
mutilated, destroyed, lost or stolen Security has become or is about to become due and payable, the Company in its discretion may,
instead of issuing a new Security, pay such Security.

Upon the issuance
of any new Security under this Section, the Company may require the payment of a sum sufficient to cover any tax or other governmental
charge that may be imposed in relation thereto and any other expenses (including the fees and expenses of the Trustee) connected
therewith.

 

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Every new Security
of any series issued pursuant to this Section in lieu of any destroyed, lost or stolen Security shall constitute an original additional
contractual obligation of the Company regardless of whether the destroyed, lost or stolen Security shall be at any time enforceable
by anyone, and shall be entitled to all the benefits of this Indenture equally and proportionately with any and all other Securities
of that series duly issued hereunder.

The provisions of
this Section are exclusive and shall preclude (to the extent lawful) all other rights and remedies with respect to the replacement
or payment of mutilated, destroyed, lost or stolen Securities.

3.7             
Payment of Interest; Interest Rights Preserved. Except as otherwise provided as contemplated by Section 3.1
with respect to any series of Securities, interest on any Security which is payable, and is punctually paid or duly provided for,
on any Interest Payment Date shall be paid to the Person in whose name that Security (or one or more Predecessor Securities) is
registered at the close of business on the Regular Record Date for such interest.

Any interest on
any Security of any series which is payable, but is not punctually paid or duly provided for, on any Interest Payment Date (herein
called “Defaulted Interest”) shall forthwith cease to be payable to the Holder on the relevant Regular Record
Date by virtue of having been such Holder, and such Defaulted Interest may be paid by the Company, at its election in each case,
as provided in clause (a) or (b) below:

(a)               
The Company may elect to make payment of any Defaulted Interest to the Persons in whose names the Securities of such series
(or their respective Predecessor Securities) are registered at the close of business on a Special Record Date for the payment of
such Defaulted Interest, which shall be fixed in the following manner. The Company shall notify the Trustee in writing of the amount
of Defaulted Interest proposed to be paid on each Security of such series and the date of the proposed payment, and at the same
time the Company shall deposit with the Trustee an amount of money equal to the aggregate amount proposed to be paid in respect
of such Defaulted Interest or shall make arrangements satisfactory to the Trustee for such deposit prior to the date of the proposed
payment, such money when deposited to be held in trust for the benefit of the Persons entitled to such Defaulted Interest as in
this clause provided. Thereupon, the Trustee shall fix a Special Record Date for the payment of such Defaulted Interest which shall
be not more than 15 days and not less than 10 days prior to the date of the proposed payment and not less than 10 days after the
receipt by the Trustee of the notice of the proposed payment. The Trustee shall promptly notify the Company of such Special Record
Date and, in the name and at the expense of the Company, shall cause notice of the proposed payment of such Defaulted Interest
and the Special Record Date therefor to be mailed, first-class postage prepaid, to each Holder of Securities of such series at
his address as it appears in the Security Register, not less than 10 days prior to such Special Record Date. Notice of the proposed
payment of such Defaulted Interest and the Special Record Date therefor having been so mailed, such Defaulted Interest shall be
paid to the Persons in whose names the Securities of such series (or their respective Predecessor Securities) are registered at
the close of business on such Special Record Date and shall no longer be payable pursuant to the following clause (b).

 

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(b)              
The Company may make payment of any Defaulted Interest on the Securities of any series in any other lawful manner not inconsistent
with the requirements of any securities exchange on which such Securities may be listed, and upon such notice as may be required
by such exchange, if, after notice given by the Company to the Trustee of the proposed payment pursuant to this clause, such manner
of payment shall be deemed practicable by the Trustee.

Subject to the foregoing
provisions of this Section, each Security delivered under this Indenture upon registration of transfer of or in exchange for or
in lieu of any other Security shall carry the rights to interest accrued and unpaid, and to accrue, which were carried by such
other Security.

3.8             
Persons Deemed Owners. Except as otherwise provided as contemplated by Section 3.1 with respect to any
series of Securities, prior to due presentment of a Security for registration of transfer, the Company, the Trustee and any agent
thereof may treat the Person in whose name such Security is registered as the owner of such Security for the purpose of receiving
payment of principal of and any premium and (subject to Section 3.5 and Section 3.7) any interest on such
Security and for all other purposes whatsoever, regardless of whether such Security be overdue, and none of the Company, the Trustee
nor any agent of any of them shall be affected by notice to the contrary.

No holder of any
beneficial interest in any Global Security held on its behalf by a Depositary shall have any rights under this Indenture with respect
to such Global Security, and such Depositary may be treated by the Company, the Trustee and any agent thereof as the owner of such
Global Security for all purposes whatsoever.

3.9             
Cancellation. All Securities surrendered for payment, redemption, registration of transfer or exchange or for credit
against any sinking fund payment shall, if surrendered to any Person other than the Trustee, be delivered to the Trustee and shall
be promptly canceled by it. The Company may at any time deliver to the Trustee for cancellation any Securities previously authenticated
and delivered hereunder which the Company may have acquired in any manner whatsoever, and may deliver to the Trustee (or to any
other Person for delivery to the Trustee) for cancellation any Securities previously authenticated hereunder which the Company
has not issued and sold, and all Securities so delivered shall be promptly canceled by the Trustee. No Securities shall be authenticated
in lieu of or in exchange for any Securities canceled as provided in this Section, except as expressly permitted by this Indenture.
All canceled Securities held by the Trustee shall be disposed of in accordance with its customary practices, and the Trustee shall
thereafter deliver to the Company a certificate with respect to such disposition from time to time upon written request.

3.10         
Computation of Interest. Except as otherwise specified as contemplated by Section 3.1 for Securities
of any series, interest on the Securities of each series shall be computed on the basis of a year of twelve 30-day months.

3.11         
CUSIP or CINS Numbers. The Company in issuing the Securities may use “CUSIP” or “CINS”
numbers (if then generally in use, and in addition to the other identification numbers printed on the Securities), and, if so,
the Trustee shall use “CUSIP” or “CINS” numbers in notices of redemption as a convenience
to Holders; provided, however, that any such notice may state that no representation is made as to the correctness
of such “CUSIP” or “CINS” numbers either as printed on the Securities or as contained in
any notice of a redemption and that reliance may be placed only on the other identification numbers printed on the Securities,
and any such redemption shall not be affected by any defect in or omission of such “CUSIP” or “CINS”
numbers.

 

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ARTICLE
Four

SATISFACTION AND DISCHARGE

4.1             Satisfaction and Discharge of Indenture. This Indenture shall cease to be of further effect and will be discharged
with respect to the Securities of any series (except as to any surviving rights of registration of transfer or exchange of Securities
and certain rights of the Trustee, in each case, herein expressly provided for), and the Trustee, upon Company Request and at the
expense of the Company, shall execute proper instruments acknowledging satisfaction and discharge of this Indenture with respect
to such Securities, when:

(a)               either

(i)                
all such Securities theretofore authenticated and delivered (other than (A) such Securities which have been destroyed, lost
or stolen and which have been replaced or paid as provided in Section 3.6, and (B) such Securities for whose payment
money has theretofore been deposited in trust or segregated and held in trust by the Company and thereafter repaid to the Company
or discharged from such trust, as provided in Section 10.3) have been delivered to the Trustee for cancellation; or

(ii)              all such Securities not theretofore delivered to the Trustee for cancellation:

(A)            
have become due and payable, or

(B)             
will become due and payable at their Stated Maturity within one year, or

(C)             
are to be called for redemption within one year under arrangements satisfactory to the Trustee for the giving of notice
of redemption by the Trustee in the name, and at the expense, of the Company,

and the Company, in
the case of (A), (B) or (C) above, has deposited or caused to be deposited with the Trustee as trust funds in trust for such purpose
an amount sufficient to pay and discharge the entire indebtedness on such Securities not theretofore delivered to the Trustee for
cancellation, for principal (and premium, if any) and interest to the date of such deposit (in the case of Securities which have
become due and payable) or to the Stated Maturity or Redemption Date, as the case may be, together with instructions from the Company
irrevocably directing the Trustee to apply such funds to the payment thereof at maturity or redemption, as the case may be;

(b)              
the Company has paid or caused to be paid all other sums payable hereunder by the Company with respect to such Securities;
and

(c)               
the Company has delivered to the Trustee an Officer’s Certificate and an Opinion of Counsel, which, taken together,
state that all conditions precedent herein provided for relating to the satisfaction and discharge of this Indenture with respect
to such Securities have been complied with.

 

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Notwithstanding the satisfaction and
discharge of this Indenture with respect to the Securities of any series, (x) the obligations of the Company to the Trustee under
Section 6.7, the obligations of the Trustee to any Authenticating Agent under Section 6.14 and the right
of the Trustee to resign under Section 6.10 shall survive, and (y) if money shall have been deposited with the Trustee
pursuant to clause (a) of this Section, the obligations of the Company and the Trustee under Section 4.2, Section 6.6
and Section 10.2 and the last paragraph of Section 10.3 shall survive.

4.2             
Application of Trust Money. Subject to the provisions of the last paragraph of Section 10.3, all money
deposited with the Trustee pursuant to Section 4.1 shall be held in trust and applied by it, in accordance with the
provisions of the Securities and this Indenture, to the payment, either directly or through any Paying Agent (including the Company
acting as its own Paying Agent) as the Trustee may determine, to the Persons entitled thereto, of the principal and any premium
and interest for whose payment such money has been deposited with the Trustee.

ARTICLE
Five

REMEDIES

5.1             
Events of Default. “Event of Default,” wherever used herein with respect to Securities of any
series, means any one of the following events (whatever the reason for such Event of Default and whether it shall be voluntary
or involuntary or be effected by operation of law or pursuant to any judgment, decree or order of any court or any order, rule
or regulation of any administrative or governmental body):

(a)               default in the payment of any interest upon any Security of that series when it becomes due and payable, and continuance
of such default for a period of 30 days (regardless of whether such payment is prohibited by the provisions of Article Fourteen
hereof); or

(b)              
default in the payment of the principal of (or premium, if any, on) any Security of that series at its Maturity (regardless
of whether such payment is prohibited by the provisions of Article Fourteen hereof); or

(c)               
default in the performance, or breach, of the covenant set forth in Section 8.1; or

(d)              
default in the performance, or breach, of any covenant in this Indenture (other than the covenant in Section 8.1
or any other covenant a default in whose performance or whose breach is elsewhere in this Section specifically dealt with or which
has expressly been included in this Indenture solely for the benefit of a series of Securities other than that series), and continuance
of such default or breach for a period of 60 days after there has been given, by registered or certified mail, to the Company by
the Trustee or to the Company and the Trustee by the Holders of at least 25% in principal amount of the Outstanding Securities
of that series a written notice specifying such default or breach and requiring it to be remedied and stating that such notice
is a “Notice of Default” hereunder; or

 

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(e)               
the Company or any Significant Subsidiary pursuant to or within the meaning of any Bankruptcy Law (i) commences a voluntary
case or proceeding, (ii) consents to the entry of any decree or order for relief against it in an involuntary case or proceeding,
(iii) consents to the appointment of a Custodian of it or for all or substantially all of its property, (iv) makes a general assignment
for the benefit of its creditors, (v) consents to or acquiesces in the institution of a bankruptcy or an insolvency proceeding
against it, (vi) takes any corporate action to authorize or effect any of the foregoing, or (vii) takes any comparable action under
any foreign laws relating to insolvency; or

(f)               
a court of competent jurisdiction enters an order or decree under any Bankruptcy Law that (i) is for relief against the
Company or any Significant Subsidiary in an involuntary case, (ii) appoints a Custodian of the Company or any Significant Subsidiary
for all or substantially all of its property, or (iii) orders the liquidation or winding up of the Company or any Significant Subsidiary;
and the order or decree remains unstayed and in effect for 30 consecutive days; or

(g)              
default in the deposit of any sinking fund payment when due; or

(h)              
any other Event of Default provided with respect to Securities of that series in accordance with Section 3.1.

5.2             
Acceleration of Maturity; Rescission and Annulment. If an Event of Default with respect to Securities of any series
at the time Outstanding occurs and is continuing, then in every such case the Trustee or the Holders of at least 25% in aggregate
principal amount of the Outstanding Securities of that series may declare the principal amount (or, if the Securities of that series
are Original Issue Discount Securities, such portion of the principal amount as may be specified in the terms of that series),
together with any accrued and unpaid interest thereon, of all of the Securities of that series to be due and payable immediately,
by a notice in writing to the Company (and to the Trustee if given by Holders), and upon any such declaration such principal amount
(or specified amount), together with any accrued and unpaid interest thereon, shall become immediately due and payable. Notwithstanding
the foregoing, if an Event of Default specified in clause (e) or (f) of Section 5.1 occurs, the Securities of any series
at the time Outstanding shall be due and payable immediately without further action or notice.

At any time after
such a declaration of acceleration with respect to Securities of any series has been made and before a judgment or decree for payment
of the money due has been obtained by the Trustee as hereinafter in this Article Five provided, the Holders of a majority in principal
amount of the Outstanding Securities of that series, by written notice to the Company and the Trustee, may rescind and annul such
declaration and its consequences if:

 

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(a)               the Company has paid or deposited with the Trustee a sum sufficient to pay:

   (i)                
all overdue interest on all Securities of that series,

   (ii)              
the principal of (and premium, if any, on) any Securities of that series which have become due otherwise than by such declaration
of acceleration and any interest thereon at the rate or rates prescribed therefor in such Securities,

   (iii)            
to the extent that payment of such interest is lawful, interest upon overdue interest at the rate or rates prescribed therefor
in such Securities, and

   (iv)            
all sums paid or advanced by the Trustee hereunder and the reasonable compensation, expenses, disbursements and advances
of the Trustee, its agents and counsel; and

(b)              all
Events of Default with respect to Securities of that series, other than the non-payment of the principal of Securities of that
series which have become due solely by such declaration of acceleration, have been cured or waived as provided in Section 5.13.

No such rescission
shall affect any subsequent default or impair any right consequent thereon.

5.3           Collection of Indebtedness and Suits for Enforcement by Trustee. The Company covenants that if:

(a)               default
is made in the payment of any installment of interest on any Security when such interest becomes due and payable and such default
continues for a period of 30 days (regardless of whether such payment is prohibited by the provisions of Article Fourteen hereof),
or

(b)              default
is made in the payment of the principal of (or premium, if any, on) any Security at the Maturity thereof (regardless of whether
such payment is prohibited by the provisions of Article Fourteen hereof),

the Company will, upon demand of the
Trustee, pay to it, for the benefit of the Holders of such Securities, the whole amount then due and payable on such Securities
for principal and any premium and interest and, to the extent that payment of such interest shall be legally enforceable, interest
on any overdue principal and any premium and on any overdue interest, at the rate or rates prescribed therefor in such Securities,
and, in addition thereto, such further amount as shall be sufficient to cover the costs and expenses of collection, including the
reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and counsel.

If the Company fails
to pay such amounts forthwith upon such demand, the Trustee, in its own name and as trustee of an express trust, may institute
a judicial proceeding for the collection of the sums so due and unpaid, may prosecute such proceeding to judgment or final decree
and may enforce the same against the Company or any other obligor upon such Securities and collect the moneys adjudged or decreed
to be payable in the manner provided by law out of the property of the Company or any other obligor upon such Securities, wherever
situated.

 

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If an Event of Default
with respect to Securities of any series occurs and is continuing, the Trustee may in its discretion proceed to protect and enforce
its rights and the rights of the Holders of Securities of such series by such appropriate judicial proceedings as the Trustee shall
deem most effectual to protect and enforce any such rights, whether for the specific enforcement of any covenant or agreement in
this Indenture or in aid of the exercise of any power granted herein, or to enforce any other proper remedy.

5.4             Trustee May File Proofs of Claim. In case of the pendency of any receivership, insolvency, liquidation, bankruptcy,
reorganization, arrangement, adjustment, composition or other judicial proceeding relative to the Company or any other obligor
upon the Securities, their property or their creditors, the Trustee (irrespective of whether the principal of the Securities shall
then be due and payable as therein expressed or by declaration or otherwise and irrespective of whether the Trustee shall have
made any demand on the Company for the payment of overdue principal or interest) shall be entitled and empowered, by intervention
in such proceeding or otherwise,

(a)               
to file and prove a claim for the whole amount of principal (and premium, if any) and interest owing and unpaid in respect
of the Securities and to file such other papers or documents as may be necessary or advisable in order to have the claims of the
Trustee (including any claim for the reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and
counsel) and of the Holders allowed in such judicial proceeding, and

(b)              
to collect and receive any moneys or other property payable or deliverable on any such claims and to distribute the same;

and any custodian, receiver, assignee,
trustee, liquidator, sequestrator or other similar official in any such judicial proceeding is hereby authorized by each Holder
to make such payments to the Trustee and, if the Trustee shall consent to the making of such payments directly to the Holders,
to pay to the Trustee any amount due it for the reasonable compensation, expenses, disbursements and advances of the Trustee, its
agents and counsel, and any other amounts due the Trustee under Section 6.7.

No provision of
this Indenture shall be deemed to authorize the Trustee to authorize or consent to or accept or adopt on behalf of any Holder any
plan of reorganization, compromise, arrangement, adjustment or composition affecting the Securities or the rights of any Holder
thereof or to authorize the Trustee to vote in respect of the claim of any Holder in any such proceeding; provided, however,
that the Trustee may, on behalf of the Holders, vote for the election of a trustee in bankruptcy or similar official and be a member
of a creditors’ or other similar committee.

5.5             Trustee
May Enforce Claims Without Possession of Securities. All rights of action and claims under this Indenture or the Securities
may be prosecuted and enforced by the Trustee without the possession of any of the Securities or the production thereof in any
proceeding relating thereto, and any such proceeding instituted by the Trustee shall be brought in its own name as trustee of
an express trust, and any recovery of judgment shall, after provision for the payment of the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel, be for the ratable benefit of the Holders of the Securities
in respect of which such judgment has been recovered.

 

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5.6           Application
of Money Collected. Any money collected by the Trustee pursuant to this Article Five shall be applied in the following order,
at the date or dates fixed by the Trustee and, in case of the distribution of such money on account of principal or any premium
or interest, upon presentation of the Securities and the notation thereon of the payment if only partially paid and upon surrender
thereof if fully paid:

FIRST: To the payment
of all amounts due the Trustee under Section 6.7;

SECOND: Subject to
Article Fourteen, to the payment of the amounts then due and unpaid for principal of and any premium and interest on the Securities
in respect of which or for the benefit of which such money has been collected, ratably, without preference or priority of any kind,
according to the amounts due and payable on such Securities for principal and any premium and interest, respectively; and

THIRD: The balance,
if any, to the Company.

5.7          Limitation
on Suits. No Holder of any Security of any series shall have any right to institute any proceeding, judicial or otherwise,
with respect to this Indenture, or for the appointment of a receiver or trustee, or for any other remedy hereunder, unless:

(a)               
such Holder has previously given written notice to the Trustee of a continuing Event of Default with respect to the Securities
of that series;

(b)              
the Holders of not less than 25% in principal amount of the Outstanding Securities of that series shall have made written
request to the Trustee to institute proceedings in respect of such Event of Default in its own name as Trustee hereunder;

(c)               
such Holder or Holders have offered to the Trustee reasonable indemnity against the costs, expenses and liabilities to be
incurred in compliance with such request;

(d)              
the Trustee for 60 days after its receipt of such notice, request and offer of indemnity has failed to institute any such
proceeding; and

(e)               
no direction inconsistent with such written request has been given to the Trustee during such 60-day period by the Holders
of a majority in principal amount of the Outstanding Securities of that series;

it being understood and intended that
no one or more of such Holders shall have any right in any manner whatever by virtue of, or by availing of, any provision of this
Indenture to affect, disturb or prejudice the rights of any other of such Holders, or to obtain or to seek to obtain priority or
preference over any other of such Holders or to enforce any right under this Indenture, except in the manner herein provided and
for the equal and ratable benefit of all such Holders.

 

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5.8             Unconditional Right of Holders to Receive Principal, Premium and Interest. Notwithstanding any other provision in
this Indenture, the Holder of any Security shall have the right, which is absolute and unconditional, to receive payment of the
principal of and any premium and (subject to Section 3.5 and Section 3.7) interest on such Security on
the Stated Maturity or Maturities expressed in such Security (or, in the case of redemption, on the Redemption Date) and to institute
suit for the enforcement of any such payment, and such rights shall not be impaired without the consent of such Holder.

5.9             Restoration
of Rights and Remedies. If the Trustee or any Holder has instituted any proceeding to enforce any right or remedy under this
Indenture and such proceeding has been discontinued or abandoned for any reason, or has been determined adversely to the Trustee
or to such Holder, then and in every such case, subject to any determination in such proceeding, the Company, the Trustee and
the Holders shall be restored severally and respectively to their former positions hereunder and thereafter all rights and remedies
of the Trustee and the Holders shall continue as though no such proceeding had been instituted.

5.10         
Rights and Remedies Cumulative. Except as otherwise provided with respect to the replacement or payment of mutilated,
destroyed, lost or stolen Securities in the last paragraph of Section 3.6, no right or remedy herein conferred upon
or reserved to the Trustee or to the Holders is intended to be exclusive of any other right or remedy, and every right and remedy
shall, to the extent permitted by law, be cumulative and in addition to every other right and remedy given hereunder or now or
hereafter existing at law or in equity or otherwise. The assertion or employment of any right or remedy hereunder, or otherwise,
shall not prevent the concurrent assertion or employment of any other appropriate right or remedy.

5.11         
Delay or Omission Not Waiver. To fullest extent permitted by applicable law, no delay or omission of the Trustee
or of any Holder of any Securities to exercise any right or remedy accruing upon any Event of Default shall impair any such right
or remedy or constitute a waiver of any such Event of Default or an acquiescence therein. Every right and remedy given by this
Article Five or by law to the Trustee or to the Holders may be exercised from time to time, and as often as may be deemed expedient,
by the Trustee or by the Holders, as the case may be.

5.12         
Control by Holders. The Holders of not less than a majority in principal amount of the Outstanding Securities of
any series shall have the right to direct the time, method and place of conducting any proceeding for any remedy available to the
Trustee, or exercising any trust or power conferred on the Trustee, with respect to the Securities of such series; provided,
however, that:

(a)               such
direction shall not be in conflict with any rule of law or with this Indenture;

(b)              
the Trustee may take any other action deemed proper by the Trustee which is not inconsistent with such direction; and

(c)               subject to the provisions of Section 6.1, the Trustee shall have the right to decline to follow any such direction
if the Trustee in good faith shall determine that the proceeding so directed would involve the Trustee in personal liability.

 

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5.13         
Waiver of Past Defaults. By written notice to the Company and the Trustee, the Holders of not less than a majority
in principal amount of the Outstanding Securities of any series may on behalf of the Holders of all the Securities of such series
waive any past default hereunder with respect to such series and its consequences, except:

(a)               
a continuing default in the payment of the principal of or any premium or interest on any Security of such series, or

(b)              
a default in respect of a covenant or provision hereof which under Article Nine cannot be modified or amended without the
consent of the Holder of each Outstanding Security of such series affected.

Upon any such waiver, such default shall
cease to exist, and any Event of Default arising therefrom shall be deemed to have been cured, for every purpose of this Indenture,
but no such waiver shall extend to any subsequent or other default or impair any right consequent thereon.

5.14         
Undertaking for Costs. All parties to this Indenture agree, and each Holder of any Security by his acceptance thereof
shall be deemed to have agreed, that any court may in its discretion require, in any suit for the enforcement of any right or remedy
under this Indenture, or in any suit against the Trustee for any action taken, suffered or omitted by it as Trustee, the filing
by any party litigant, other than the Trustee, in such suit of an undertaking to pay the costs of such suit, and that such court
may in its discretion assess reasonable costs, including reasonable attorneys’ fees, against any party litigant in such suit,
having due regard to the merits and good faith of the claims or defenses made by such party litigant; but the provisions of this
Section 5.14 shall not apply to any suit instituted by the Company, to any suit instituted by the Trustee, to any suit
instituted by any Holder, or group of Holders, holding in the aggregate more than 10% in principal amount of the Outstanding Securities
of any series, or to any suit instituted by any Holder for the enforcement of the payment of the principal of (or premium, if any)
or interest on any Security on or after the Stated Maturity or Maturities expressed in such Security (or, in the case of redemption,
on or after the Redemption Date).

5.15         
Waiver of Stay or Extension Laws. The Company covenants (to the extent that it may lawfully do so) that it will not
at any time insist upon, or plead, or in any manner whatsoever claim or take the benefit or advantage of, any stay or extension
law wherever enacted, now or at any time hereafter in force, which may affect the covenants or the performance of this Indenture;
and the Company (to the extent that it may lawfully do so) hereby expressly waives all benefit or advantage of any such law and
covenants that it will not hinder, delay or impede the execution of any power herein granted to the Trustee, but will suffer and
permit the execution of every such power as though no such law had been enacted.

 

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ARTICLE
Six

THE TRUSTEE

6.1             Certain
Duties and Responsibilities.

(a)           Except during the continuance of an Event of Default,

  (i)                
the Trustee undertakes to perform such duties and only such duties as are specifically set forth in this Indenture and as
are provided by the Trust Indenture Act, and no implied covenants or obligations shall be read into this Indenture against the
Trustee; and

  (ii)              
in the absence of bad faith on its part, the Trustee may conclusively rely, as to the truth of the statements and the correctness
of the opinions expressed therein, upon certificates or opinions furnished to the Trustee and conforming to the requirements of
this Indenture; but in the case of any such certificates or opinions which by any provision hereof are specifically required to
be furnished to the Trustee, the Trustee shall be under a duty to examine the same to determine whether they conform to the requirements
of this Indenture.

(b)            In case an Event of Default has occurred and is continuing, the Trustee shall exercise such of the rights and powers vested
in it by this Indenture, and use the same degree of care and skill in their exercise, as a prudent man would exercise or use under
the circumstances in the conduct of his own affairs.

(c)           No
provision of this Indenture shall be construed to relieve the Trustee from liability for its own negligent action, its own negligent
failure to act, or its own willful misconduct, except that

  (i)                
this Subsection shall not be construed to limit the effect of Subsection (a) of this Section;

  (ii)              
the Trustee shall not be liable for any error of judgment made in good faith by a Responsible Officer, unless it shall be
proved that the Trustee was negligent in ascertaining the pertinent facts;

(iii)            
the Trustee shall not be liable with respect to any action taken or omitted to be taken by it in good faith in accordance
with the direction of the Holders of a majority in principal amount of the Outstanding Securities of any series, given pursuant
to Section 5.12, relating to the time, method and place of conducting any proceeding for any remedy available to the
Trustee, or exercising any trust or power conferred upon the Trustee, under this Indenture with respect to the Securities of such
series; and

(iv)            
no provision of this Indenture shall require the Trustee to expend or risk its own funds or otherwise incur any financial
liability in the performance of any of its duties hereunder, or in the exercise of any of its rights or powers, if it shall have
reasonable grounds for believing that repayment of such funds or adequate indemnity against such risk or liability is not reasonably
assured to it.

 

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(d)              
Regardless of whether therein expressly so provided, every provision of this Indenture relating to the conduct or affecting
the liability of or affording protection to the Trustee shall be subject to the provisions of this Section.

6.2             
Notice of Defaults. Within 90 days after the occurrence of any Default hereunder with respect to the Securities of
any series, the Trustee shall transmit by mail to all Holders of Securities of such series, as their names and addresses appear
in the Security Register, notice of such Default hereunder known to the Trustee, unless such Default shall have been cured or waived;
provided, however, that, except in the case of a Default in the payment of the principal of or any premium or interest
on any Security of such series or in the payment of any sinking fund installment with respect to Securities of such series, the
Trustee may withhold from Holders of Securities notice of any continuing Default or Event of Default if the Trustee in good faith
determines that the withholding of such notice is in the interest of the Holders of Securities of such series; and, provided,
further, that in the case of any Default of the character specified in Section 5.1(c) with respect to Securities
of such series, no such notice to Holders shall be given until at least 90 days after the occurrence thereof and that in the case
of any Default of the character specified in Section 5.1(d) with respect to Securities of such series, no such notice
to Holders shall be given until at least 180 days after the occurrence thereof.

6.3             
Certain Rights of Trustee. Subject to the provisions of Section 6.1:

(a)               
the Trustee may conclusively rely and shall be fully protected in acting or refraining from acting upon any resolution,
certificate, statement, instrument, opinion, report, notice, request, direction, consent, order, bond, debenture, note, other evidence
of indebtedness or other paper or document believed by it to be genuine and to have been signed or presented by the proper party
or parties;

(b)              
any request or direction of the Company mentioned herein shall be sufficiently evidenced by a Company Request or Company
Order (other than delivery of any Security to the Trustee for authentication and delivery pursuant to Section 3.3,
which shall be sufficiently evidenced as provided therein) and any resolution of the Board of Directors may be sufficiently evidenced
by a Board Resolution;

(c)               
whenever in the administration of this Indenture the Trustee shall deem it desirable that a matter be proved or established
prior to taking, suffering or omitting any action hereunder, the Trustee (unless other evidence be herein specifically prescribed)
shall be entitled to receive and may, in the absence of bad faith on its part, rely upon an Officer’s Certificate;

(d)              
the Trustee may consult with counsel and the advice of such counsel or any Opinion of Counsel shall be full and complete
authorization and protection in respect of any action taken, suffered or omitted by it hereunder in good faith and in reliance
thereon;

 

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(e)               
the Trustee shall be under no obligation to exercise any of the rights or powers vested in it by this Indenture at the request
or direction of any of the Holders pursuant to this Indenture, unless such Holders shall have offered to the Trustee reasonable
security or indemnity against the costs, expenses and liabilities which might be incurred by it in compliance with such request
or direction;

(f)               
the Trustee shall not be bound to make any investigation into the facts or matters stated in any resolution, certificate,
statement, instrument, opinion, report, notice, request, direction, consent, order, bond, debenture, note, other evidence of indebtedness
or other paper or document, but the Trustee, in its discretion, may make such further inquiry or investigation into such facts
or matters as it may see fit, and, if the Trustee shall determine to make such further inquiry or investigation, it shall be entitled
to examine the books, records and premises of the Company, personally or by agent or attorney;

(g)              
the Trustee may execute any of the trusts or powers hereunder or perform any duties hereunder either directly or by or through
agents or attorneys and the Trustee shall not be responsible for any misconduct or negligence on the part of any agent or attorney
appointed with due care by it hereunder and shall not be responsible for the supervision of officers and employees of such agents
or attorneys;

(h)              
the Trustee may request that the Company deliver an Officer’s Certificate setting forth the names of individuals and/or
titles of officers authorized at such time to take specified actions pursuant to this Indenture, which Officer’s Certificate
may be signed by any person authorized to sign an Officer’s Certificate, including any person specified as so authorized
in any such certificate previously delivered and not superseded;

(i)                
the Trustee shall be entitled to the rights and protections afforded to the Trustee pursuant to this Article Six in acting
as a Paying Agent or Security Registrar hereunder; and

(j)                
the Trustee shall not be deemed to have notice of any Default or Event of Default unless a Responsible Officer of the Trustee
has actual knowledge thereof or unless written notice of any event which is in fact such a default is received by the Trustee at
the Corporate Trust Office of the Trustee, and such notice references the Notes and this Indenture.

6.4             
Not Responsible for Recitals or Issuance of Securities. The recitals contained herein and in the Securities, except
the Trustee’s certificates of authentication, shall be taken as the statements of the Company and the Trustee or any Authenticating
Agent assumes no responsibility for their correctness. Neither the Trustee nor any Authenticating Agent makes any representations
as to the validity or sufficiency of this Indenture or of the Securities. The Trustee or any Authenticating Agent shall not be
accountable for the use or application by the Company of Securities or the proceeds thereof.

 

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6.5             May Hold Securities. The Trustee, any Authenticating Agent, any Paying Agent, any Security Registrar or any other
agent of the Company in its individual or any other capacity, may become the owner or pledgee of Securities and, subject to Sections 310(b)
and 311 of the Trust Indenture Act and Section 6.8, Section 6.9 and Section 6.13, may otherwise
deal with the Company with the same rights it would have if it were not Trustee, Authenticating Agent, Paying Agent, Security Registrar
or such other agent.

6.6             Money
Held in Trust. Money held by the Trustee in trust hereunder need not be segregated from other funds except to the extent required
by law. The Trustee shall be under no liability for interest on any money received by it hereunder except as otherwise agreed
in writing with the Company.

6.7             Compensation and Reimbursement. The Company agrees:

(a)               
to pay to the Trustee from time to time reasonable compensation for all services rendered by it hereunder (which compensation
shall not be limited by any provision of law in regard to the compensation of a trustee of an express trust);

(b)              
except as otherwise expressly provided herein, to reimburse the Trustee upon its request for all reasonable expenses, disbursements
and advances incurred or made by the Trustee in accordance with any provision of this Indenture (including the reasonable compensation
and the expenses and disbursements of its agents and counsel), except any such expense, disbursement or advance as may be attributable
to its negligence or bad faith; and

(c)               
to indemnify each of the Trustee and its officers, directors, agents and employees for, and to hold it harmless against,
any loss, liability or expense incurred without negligence or willful misconduct on its part, arising out of or in connection with
the acceptance or administration of the trust or trusts hereunder, including the costs and expenses of defending itself against
any claim or liability in connection with the exercise or performance of any of its powers or duties hereunder.

As security for
the performance of the obligations of the Company under this Section the Trustee shall have a lien prior to the Securities upon
all property and funds held or collected by the Trustee as such, except funds held in trust for the payment of principal of (and
premium, if any) or interest on particular Securities.

Without limiting
any rights available to the Trustee under applicable law, when the Trustee incurs expenses or renders services in connection with
an Event of Default specified in Section 5.1(e) or Section 5.1(f), the expenses (including the reasonable
charges and expenses of its counsel) and the compensation for the services of the Trustee are intended to constitute expenses of
administration under any applicable Bankruptcy Law.

The provisions of
this Section 6.7 shall survive the satisfaction and discharge of this Indenture and the Legal Defeasance of the Securities.

6.8             Disqualification;
Conflicting Interests. Reference is made to Section 310(b) of the Trust Indenture Act. There shall be excluded
from the operation of Section 310(b)(1) of the Trust Indenture Act this Indenture with respect to the Securities of
more than one series.

 

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6.9             Corporate
Trustee Required; Eligibility. There shall at all times be a Trustee hereunder which shall be a corporation organized and
doing business under the laws of the United States of America, any State thereof or the District of Columbia, authorized under
such laws to exercise corporate trust powers, having a combined capital and surplus required by the Trust Indenture Act, subject
to supervision or examination by Federal or State authority. If such corporation publishes reports of condition at least annually,
pursuant to law or to the requirements of said supervising or examining authority, then for the purposes of this Section, the
combined capital and surplus of such corporation shall be deemed to be its combined capital and surplus as set forth in its most
recent report of condition so published. The Trustee shall not be an obligor upon the Securities or an Affiliate thereof. If at
any time the Trustee shall cease to be eligible in accordance with the provisions of this Section, it shall resign immediately
in the manner and with the effect hereinafter specified in this Article Six.

6.10         Resignation and Removal; Appointment of Successor.

(a)               
No resignation or removal of the Trustee and no appointment of a successor Trustee pursuant to this Article shall become
effective until the acceptance of appointment by the successor Trustee in accordance with the applicable requirements of Section 6.11.

(b)              
The Trustee may resign at any time with respect to the Securities of one or more series by giving written notice thereof
to the Company. If the instrument of acceptance by a successor Trustee required by Section 6.11 shall not have been
delivered to the Trustee within 30 days after the giving of such notice of resignation, the resigning Trustee may petition any
court of competent jurisdiction for the appointment of a successor Trustee with respect to the Securities of such series.

(c)               
The Trustee may be removed at any time with respect to the Securities of any series by Act of the Holders of a majority
in principal amount of the Outstanding Securities of such series, delivered to the Trustee and to the Company.

(d)              
If at any time:

(i)                
the Trustee shall fail to comply with Section 310(b) of the Trust Indenture Act after written request therefor
by the Company or by any Holder who has been a bona fide Holder of a Security for at least six months, or

(ii)              
the Trustee shall cease to be eligible under Section 6.9 and shall fail to resign after written request therefor
by the Company or by any such Holder, or

(iii)            
the Trustee shall become incapable of acting or shall be adjudged a bankrupt or insolvent or a receiver of the Trustee or
of its property shall be appointed or any public officer shall take charge or control of the Trustee or of its property or affairs
for the purpose of rehabilitation, conservation or liquidation, then, in any such case, (A) the Company by a Board Resolution may
remove the Trustee with respect to all Securities, or (B) subject to Section 5.14, any Holder who has been a bona fide
Holder of a Security for at least six months may, on behalf of himself and all others similarly situated, petition any court of
competent jurisdiction for the removal of the Trustee with respect to all Securities and the appointment of a successor Trustee
or Trustees.

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(e)               
If the Trustee shall resign, be removed or become incapable of acting, or if a vacancy shall occur in the office of Trustee
for any cause, with respect to the Securities of one or more series, the Company, by a Board Resolution, shall promptly appoint
a successor Trustee or Trustees with respect to the Securities of that or those series (it being understood that any such successor
Trustee may be appointed with respect to the Securities of one or more or all of such series and that at any time there shall be
only one Trustee with respect to the Securities of any particular series) and shall comply with the applicable requirements of
Section 6.11. If, within one year after such resignation, removal or incapability, or the occurrence of such vacancy,
a successor Trustee with respect to the Securities of any series shall be appointed by Act of the Holders of a majority in principal
amount of the Outstanding Securities of such series delivered to the Company and the retiring Trustee, the successor Trustee so
appointed shall, forthwith upon its acceptance of such appointment in accordance with the applicable requirements of Section 6.11,
become the successor Trustee with respect to the Securities of such series and to that extent supersede the successor Trustee appointed
by the Company. If no successor Trustee with respect to the Securities of any series shall have been so appointed by the Company
or the Holders and accepted appointment in the manner required by Section 6.11, any Holder who has been a bona fide
Holder of a Security of such series for at least six months may, on behalf of himself and all others similarly situated, petition
any court of competent jurisdiction for the appointment of a successor Trustee with respect to the Securities of such series.

(f)               
The Company shall give notice of each resignation and each removal of the Trustee with respect to the Securities of any
series and each appointment of a successor Trustee with respect to the Securities of any series to all Holders of Securities of
such series in the manner provided in Section 1.7. Each notice shall include the name of the successor Trustee with
respect to the Securities of such series and the address of its Corporate Trust Office.

6.11         Acceptance
of Appointment by Successor.

(a)               
In case of the appointment hereunder of a successor Trustee with respect to all Securities, every such successor Trustee
so appointed shall execute, acknowledge and deliver to the Company and to the retiring Trustee an instrument accepting such appointment,
and thereupon the resignation or removal of the retiring Trustee shall become effective and such successor Trustee, without any
further act, deed or conveyance, shall become vested with all the rights, powers, trusts and duties of the retiring Trustee; but,
on the request of the Company or the successor Trustee, such retiring Trustee shall, upon payment of its charges, execute and deliver
an instrument transferring to such successor Trustee all the rights, powers and trusts of the retiring Trustee and shall duly assign,
transfer and deliver to such successor Trustee all property and money held by such retiring Trustee hereunder.

 

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(b)              
In case of the appointment hereunder of a successor Trustee with respect to the Securities of one or more (but not all)
series, the Company, the retiring Trustee and each successor Trustee with respect to the Securities of one or more series shall
execute and deliver an indenture supplemental hereto wherein each successor Trustee shall accept such appointment and which (i)
shall contain such provisions as shall be necessary or desirable to transfer and confirm to, and to vest in, each successor Trustee
all the rights, powers, trusts and duties of the retiring Trustee with respect to the Securities of that or those series to which
the appointment of such successor Trustee relates, (ii) if the retiring Trustee is not retiring with respect to all Securities,
shall contain such provisions as shall be deemed necessary or desirable to confirm that all the rights, powers, trusts and duties
of the retiring Trustee with respect to the Securities of that or those series as to which the retiring Trustee is not retiring
shall continue to be vested in the retiring Trustee, and (iii) shall add to or change any of the provisions of this Indenture as
shall be necessary to provide for or facilitate the administration of the trusts hereunder by more than one Trustee, it being understood
that nothing herein or in such supplemental indenture shall constitute such Trustees co-trustees of the same trust and that each
such Trustee shall be trustee of a trust or trusts hereunder separate and apart from any trust or trusts hereunder administered
by any other such Trustee; and upon the execution and delivery of such supplemental indenture the resignation or removal of the
retiring Trustee shall become effective to the extent provided therein and each such successor Trustee, without any further act,
deed or conveyance, shall become vested with all the rights, powers, trusts and duties of the retiring Trustee with respect to
the Securities of that or those series to which the appointment of such successor Trustee relates; but, on request of the Company
or any successor Trustee, such retiring Trustee shall duly assign, transfer and deliver to such successor Trustee all property
and money held by such retiring Trustee hereunder with respect to the Securities of that or those series to which the appointment
of such successor Trustee relates.

(c)               
Upon request of any such successor Trustee, the Company shall execute any and all instruments for more fully and certainly
vesting in and confirming to such successor Trustee all such rights, powers and trusts referred to in paragraph (a) or (b) of this
Section, as the case may be.

(d)              
No successor Trustee shall accept its appointment unless at the time of such acceptance such successor Trustee shall be
qualified and eligible under this Article and the Trust Indenture Act.

6.12         Merger,
Conversion, Consolidation or Succession to Business. Any corporation into which the Trustee may be merged or converted or
with which it may be consolidated, or any corporation resulting from any merger, conversion or consolidation to which the Trustee
shall be a party, or any corporation succeeding to all or substantially all the corporate trust business of the Trustee, shall
be the successor of the Trustee hereunder, provided such corporation shall be otherwise qualified and eligible under this Article
Six, without the execution or filing of any paper or any further act on the part of any of the parties hereto. In case any Securities
shall have been authenticated, but not delivered, by the Trustee then in office, any successor by merger, conversion or consolidation
to such authenticating Trustee may adopt such authentication and deliver the Securities so authenticated with the same effect
as if such successor Trustee had itself authenticated such Securities.

 

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6.13         Preferential Collection of Claims Against Company. Reference is made to Section 311 of the Trust Indenture
Act. For purposes of Section 311(b) of the Trust Indenture Act,

(a)               
the term “cash transaction” means any transaction in which full payment for goods or securities sold
is made within seven days after delivery of the goods or securities in currency or in checks or other orders drawn upon banks or
bankers and payable upon demand;

(b)              
the term “self-liquidating paper” means any draft, bill of exchange, acceptance or obligation which is
made, drawn, negotiated or incurred by the Company for the purpose of financing the purchase, processing, manufacturing, shipment,
storage or sale of goods, wares or merchandise and which is secured by documents evidencing title to, possession of, or a lien
upon, the goods, wares or merchandise or the receivables or proceeds arising from the sale of the goods, wares or merchandise previously
constituting the security, provided the security is received by the Trustee simultaneously with the creation of the creditor relationship
with the Company arising from the making, drawing, negotiating or incurring of the draft, bill of exchange, acceptance or obligation.

6.14         Appointment
of Authenticating Agent. The Trustee may appoint an Authenticating Agent or Agents with respect to one or more series of Securities
which shall be authorized to act on behalf of the Trustee to authenticate Securities of such series issued upon exchange, registration
of transfer or partial redemption thereof or pursuant to Section 3.6, and Securities so authenticated shall be entitled
to the benefits of this Indenture and shall be valid and obligatory for all purposes as if authenticated by the Trustee hereunder.
Wherever reference is made in this Indenture to the authentication and delivery of Securities by the Trustee or the Trustee’s
certificate of authentication, such reference shall be deemed to include authentication and delivery on behalf of the Trustee
by an Authenticating Agent and a certificate of authentication executed on behalf of the Trustee by an Authenticating Agent. Each
Authenticating Agent shall be acceptable to the Company and shall at all times be a corporation organized and doing business under
the laws of the United States of America, any State thereof or the District of Columbia, authorized under such laws to act as
Authenticating Agent, having a combined capital and surplus of not less than $50,000,000 and subject to supervision or examination
by Federal or State authority. If such Authenticating Agent publishes reports of condition at least annually, pursuant to law
or to the requirements of said supervising or examining authority, then for the purposes of this Section, the combined capital
and surplus of such Authenticating Agent shall be deemed to be its combined capital and surplus as set forth in its most recent
report of condition so published. If at any time an Authenticating Agent shall cease to be eligible in accordance with the provisions
of this Section, such Authenticating Agent shall resign immediately in the manner and with the effect specified in this Section.

Any corporation
into which an Authenticating Agent may be merged or converted or with which it may be consolidated, or any corporation resulting
from any merger, conversion or consolidation to which such Authenticating Agent shall be a party, or any corporation succeeding
to all or substantially all of the corporate agency or corporate trust business of an Authenticating Agent, shall continue to be
an Authenticating Agent, provided such corporation shall be otherwise eligible under this Section, without the execution or filing
of any paper or any further act on the part of the Trustee or the Authenticating Agent.

 

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An Authenticating
Agent may resign at any time by giving written notice thereof to the Trustee and to the Company. The Trustee may at any time terminate
the agency of an Authenticating Agent by giving written notice thereof to such Authenticating Agent and to the Company. Upon receiving
such a notice of resignation or upon such a termination, or in case at any time such Authenticating Agent shall cease to be eligible
in accordance with the provisions of this Section, the Trustee may appoint a successor Authenticating Agent which shall be acceptable
to the Company and shall mail written notice of such appointment by first-class mail, postage prepaid, to all Holders of Securities
of the series with respect to which such Authenticating Agent will serve, as their names and addresses appear in the Security Register.
Any successor Authenticating Agent upon acceptance of its appointment hereunder shall become vested with all the rights, powers
and duties of its predecessor hereunder, with like effect as if originally named as an Authenticating Agent. No successor Authenticating
Agent shall be appointed unless eligible under the provisions of this Section.

Except with respect
to an Authenticating Agent appointed at the request of the Company, the Trustee agrees to pay to each Authenticating Agent from
time to time reasonable compensation for its services under this Section 6.14, and the Trustee shall be entitled to
be reimbursed by the Company for such payments, subject to the provisions of Section 6.7.

If an appointment
with respect to one or more series is made pursuant to this Section 6.14, the Securities of such series may have endorsed
thereon, in addition to the Trustee’s certificate of authentication, an alternate certificate of authentication in the following
form:

This is one of the
Securities of the series designated therein referred to in the within-mentioned Indenture.

 

	 	As Trustee	 
	 	 	 	 
	Date	By: 	 	 
	 	 	As Authenticating Agent	 
	 	 	 	 
	 	 	 	 
	 	By:	 	 
	 	 	As Authenticating Officer	 

 

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ARTICLE
Seven

HOLDERS’ LISTS AND REPORTS BY TRUSTEE AND COMPANY

7.1             
Company to Furnish Trustee Names and Addresses of Holders. The Company will furnish or cause to be furnished to the
Trustee:

(a)               
semi-annually, not more than 15 days after each Regular Record Date for a series of Securities, a list for such series of
Securities, in such form as the Trustee may reasonably require, of the names and addresses of the Holders of Securities of such
series as of such Regular Record Date, and

(b)              
at such other times as the Trustee may request in writing, within 30 days after the receipt by the Company of any such request,
a list of similar form and content as of a date not more than 15 days prior to the time such list is furnished; provided,
however, that if and so long as the Trustee shall be the Security Registrar, no such list need be furnished with respect
to such series of Securities.

7.2             
Preservation of Information; Communications to Holders.

(a)               
The Trustee shall preserve, in as current a form as is reasonably practicable, the names and addresses of Holders contained
in the most recent list furnished to the Trustee as provided in Section 7.1 and the names and addresses of Holders
received by the Trustee in its capacity as Security Registrar. The Trustee may destroy any list furnished to it as provided in
Section 7.1 upon receipt of a new list so furnished.

(b)              
If three or more Holders (herein referred to as “applicants”) apply in writing to the Trustee, and furnish
to the Trustee reasonable proof that each such applicant has owned a Security for a period of at least six months preceding the
date of such application, and such application states that the applicants desire to communicate with other Holders with respect
to their rights under this Indenture or under the Securities and is accompanied by a copy of the form of proxy or other communication
which such applicants propose to transmit, then the Trustee shall, within five business days after the receipt of such application,
at its election, either

(i)                
afford such applicants access to the information preserved at the time by the Trustee in accordance with Section 7.2(a),
or

(ii)              
inform such applicants as to the approximate number of Holders whose names and addresses appear in the information preserved
at the time by the Trustee in accordance with Section 7.2(a), and as to the approximate cost of mailing to such Holders
the form of proxy or other communication, if any, specified in such application.

 

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If the Trustee
shall elect not to afford such applicants access to such information, the Trustee shall, upon the written request of such applicants,
mail to each Holder whose name and address appear in the information preserved at the time by the Trustee in accordance with Section 7.2(a)
a copy of the form of proxy or other communication which is specified in such request, with reasonable promptness after a tender
to the Trustee of the material to be mailed and of payment, or provision for the payment, of the reasonable expenses of mailing,
unless within five days after such tender the Trustee shall mail to such applicants and file with the SEC, together with a copy
of the material to be mailed, a written statement to the effect that, in the opinion of the Trustee, such mailing would be contrary
to the best interest of the Holders or would be in violation of applicable law. Such written statement shall specify the basis
of such opinion. If the SEC, after opportunity for a hearing upon the objections specified in the written statement so filed, shall
enter an order refusing to sustain any of such objections or if, after the entry of an order sustaining one or more of such objections,
the SEC shall find, after notice and opportunity for hearing, that all the objections so sustained have been met and shall enter
an order so declaring, the Trustee shall mail copies of such material to all such Holders with reasonable promptness after the
entry of such order and the renewal of such tender; otherwise the Trustee shall be relieved of any obligation or duty to such applicants
respecting their application.

(c)               
Every Holder of Securities, by receiving and holding the same, agrees with the Company and the Trustee that none of the
Company nor the Trustee nor any agent of any of them shall be held accountable by reason of the disclosure of any such information
as to the names and addresses of the Holders in accordance with Section 7.2(b), regardless of the source from which
such information was derived, and that the Trustee shall not be held accountable by reason of mailing any material pursuant to
a request made under Section 7.2(b).

7.3             
Reports by Trustee. Any Trustee’s report required pursuant to Section 313(a) of the Trust Indenture
Act shall be dated as of May 15, and shall be transmitted within 60 days after May 15 of each year (but in all events at intervals
of not more than 12 months), commencing with the year 20 , by mail to all Holders, as their names and addresses appear in the Security
Register. A copy of each such report shall, at the time of such transmission to Holders, be filed by the Trustee with each stock
exchange upon which any Securities are listed, with the SEC and with the Company. The Company will notify the Trustee when any
Securities are listed on any stock exchange.

7.4             
Reports by Company. The Company shall:

(a)               
file with the Trustee, within 15 days after the Company files the same with the SEC, copies of the annual reports and of
the information, documents and other reports (or copies of such portions of any of the foregoing as the SEC may from time to time
by rules and regulations prescribe) which the Company may be required to file with the SEC pursuant to Section 13 or
Section 15(d) of the Exchange Act; or, if the Company is not required to file information, documents or reports pursuant
to either of said Sections, then it shall file with the Trustee and the SEC, in accordance with rules and regulations prescribed
from time to time by the SEC, such of the supplementary and periodic information, documents and reports which may be required pursuant
to Section 13 of the Exchange Act in respect of a security listed and registered on a national securities exchange
as may be prescribed from time to time in such rules and regulations;

 

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(b)              
file with the Trustee and the SEC, in accordance with rules and regulations prescribed from time to time by the SEC, such
additional information, documents and reports with respect to compliance by the Company with the conditions and covenants of this
Indenture as may be required from time to time by such rules and regulations; and

(c)               
transmit by mail to all Holders, as their names and addresses appear in the Security Register, within 30 days after the
filing thereof with the Trustee, such summaries of any information, documents and reports required to be filed by the Company pursuant
to clauses (a) and (b) of this Section as may be required by rules and regulations prescribed from time to time by the SEC.

ARTICLE
Eight

CONSOLIDATION, AMALGAMATION, MERGER AND SALE

8.1             
Company May Consolidate, Etc., Only on Certain Terms. The Company shall not consolidate or merge with or into any
other Person or sell, convey, transfer, lease or otherwise dispose of all or substantially all of the properties and assets of
the Company on a consolidated basis to any other Person, and shall not permit any Person to consolidate or merge into the Company,
unless:

(a)               
either: (i) the Company is the surviving corporation; or (ii) the Person formed by or surviving any such consolidation,
amalgamation or merger or resulting from such conversion (if other than the Company) or to which such sale, assignment, transfer,
conveyance or other disposition has been made is a corporation, limited liability company or limited partnership organized or existing
under the laws of the United States, any state of the United States or the District of Columbia;

(b)              
the Person formed by or surviving any such conversion, consolidation, amalgamation or merger (if other than the Company)
or the Person to which such sale, assignment, transfer, conveyance or other disposition has been made assumes all the obligations
of the Company under the Securities and this Indenture pursuant to agreements reasonably satisfactory to the Trustee; provided
that, unless such Person is a corporation, a corporate co-issuer of the Securities will be added to this Indenture by agreements
reasonably satisfactory to the Trustee;

(c)               
immediately before and after giving pro forma effect to such transaction, no Event of Default, and no event which, after
notice or lapse of time or both, would become an Event of Default, shall have occurred and be continuing; and

(d)              
the Company has delivered to the Trustee an Officer’s Certificate and an Opinion of Counsel, each stating that such
consolidation, amalgamation, merger, conveyance, sale, transfer or lease and such supplemental indenture, if any, comply with this
Article Eight and that all conditions precedent herein provided for relating to such transaction have been complied with.

8.2             
Successor Substituted. Upon any consolidation or merger of the Company with or into any other Person or any sale,
conveyance, transfer, lease or other disposition of all or substantially all of the properties and assets of the Company on a consolidated
basis in accordance with Section 8.1, the successor or resulting Person formed by or resulting upon such consolidation
or merger (if other than the Company) or to which such sale, conveyance, transfer, lease or other disposition is made shall succeed
to, and be substituted for, and may exercise every right and power of, the Company under this Indenture with the same effect as
if such successor Person had been named as the Company herein, and thereafter, except in the case of a lease, the predecessor Company
shall be relieved of all obligations and covenants under this Indenture and the Securities.

 

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ARTICLE
Nine

AMENDMENT, SUPPLEMENT AND WAIVER

9.1             
Without Consent of Holders. The Company and the Trustee may amend or supplement this indenture or the Securities
without the consent of any holder of a Security:

(a)               
to cure any ambiguity or to correct or supplement any provision herein that may be inconsistent with any other provision
herein in a manner that does not adversely affect the rights of any Holder of Securities in any material respect; or

(b)              
to evidence the succession of another Person to the Company and the assumption by any such successor of the covenants of
the Company herein and, to the extent applicable, to the Securities; or

(c)               
to provide for uncertificated Securities in addition to or in place of certificated Securities; provided that the uncertificated
Securities are issued in registered form for purposes of Section 163(f) of the Code, or in the manner such that the
uncertificated Securities are described in Section 163(f)(2)(B) of the Code; or

(d)              
to secure the Securities of any series; or

(e)               
to add to the covenants of the Company such further covenants, restrictions, conditions or provisions as the Company shall
consider to be appropriate for the benefit of the Holders of all or any series of Securities (and if such covenants, restrictions,
conditions or provisions are to be for the benefit of less than all series of Securities, stating that such covenants are expressly
being included solely for the benefit of such series) or to surrender any right or power herein conferred upon the Company and
to make the occurrence, or the occurrence and continuance, of a Default in any such additional covenants, restrictions, conditions
or provisions an Event of Default permitting the enforcement of all or any of the several remedies provided in this Indenture as
herein set forth; provided, that in respect of any such additional covenant, restriction, condition or provision such supplemental
indenture may provide for a particular period of grace after default (which period may be shorter or longer than that allowed in
the case of other defaults) or may provide for an immediate enforcement upon such an Event of Default or may limit the remedies
available to the Trustee upon such an Event of Default or may limit the right of the Holders of a majority in aggregate principal
amount of the Securities of such series to waive such an Event of Default; or

(f)               
to make any change to any provision of this Indenture that does not adversely affect the rights or interests of any Holder
of Securities; or

(g)              
to provide for the issuance of additional Securities in accordance with the provisions set forth in this Indenture on the
date of this Indenture; or

 

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(h)              
to add any additional Defaults or Events of Default in respect of all or any series of Securities; or

(i)                
to add to, change or eliminate any of the provisions of this Indenture to such extent as shall be necessary to permit or
facilitate the issuance of Securities in bearer form, registrable or not registrable as to principal, and with or without interest
coupons; or

(j)                
to change or eliminate any of the provisions of this Indenture; provided that any such change or elimination shall become
effective only when there is no Security Outstanding of any series created prior to the execution of such supplemental indenture
that is entitled to the benefit of such provision; or

(k)              
to establish the form or terms of Securities of any series as permitted by Section 2.1 and Section 3.1,
including to reopen any series of any Securities as permitted under Section 3.1; or

(l)                
to evidence and provide for the acceptance of appointment hereunder by a successor Trustee with respect to the Securities
of one or more series and to add to or change any of the provisions of this Indenture as shall be necessary to provide for or facilitate
the administration of the trusts hereunder by more than one Trustee, pursuant to the requirements of Section 6.11(b);
or

(m)            
to conform the text of this Indenture (and/or any supplemental indenture) or any debt securities issued thereunder to any
provision of a description of such debt securities appearing in a prospectus or prospectus supplement or an offering memorandum
or offering circular to the extent that such provision was intended to be a verbatim recreation of a provision of the indenture
(and/or any supplemental indenture) or any debt securities issued thereunder; or

(n)              
to modify, eliminate or add to the provisions of this Indenture to such extent as shall be necessary to effect the qualification
of this Indenture under the Trust Indenture Act or under any similar federal statute subsequently enacted, and to add to this Indenture
such other provisions as may be expressly required under the Trust Indenture Act.

After an amendment
under this Section 9.1 becomes effective, the Company shall mail to Holders a notice briefly describing such amendment.
The failure to give such notice to Holders, or any defect therein, shall not impair or affect the validity of an amendment under
this Section 9.1.

Upon the request
of the Company accompanied by a resolution of its Board of Directors authorizing the execution of any such amended or supplemental
indenture, the Trustee is hereby authorized to join with the Company in the execution of any such supplemental indenture, to make
any further appropriate agreements and stipulations that may be therein contained and to accept the conveyance, transfer, assignment,
mortgage, charge or pledge of any property thereunder, but the Trustee shall not be obligated to enter into any such supplemental
indenture that affects the Trustee’s own rights, duties or immunities under this Indenture or otherwise.

 

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9.2             
With Consent of Holders. The Company and the Trustee may amend or supplement this Indenture and the Securities with
the consent of the Holders of a majority in aggregate principal amount of the Outstanding Securities of each series of Securities
affected by such amendment or supplemental indenture, with each such series voting as a separate class (including, without limitation,
consents obtained in connection with a purchase of, or tender offer or exchange offer for Securities) and, subject to Section 5.8
and Section 5.13 hereof, any existing Default or Event of Default or compliance with any provision of this Indenture
or the Securities may be waived with respect to each series of Securities with the consent of the Holders of a majority in principal
amount of the Outstanding Securities of such series voting as a separate class (including consents obtained in connection with
a purchase of, or tender offer or exchange offer for, Securities).

Upon the request
of the Company accompanied by a resolution of its Board of Directors authorizing the execution of any such amended or supplemental
indenture, and upon the filing with the Trustee of evidence satisfactory to the Trustee of the consent of the Holders of Securities
as aforesaid, and upon receipt by the Trustee of the documents described in Section 6.3 hereof, the Trustee will join
with the Company in the execution of such amended or supplemental indenture unless such amended or supplemental indenture directly
affects the Trustee’s own rights, duties or immunities under this Indenture or otherwise, in which case the Trustee may in
its discretion, but will not be obligated to, enter into such amended or supplemental Indenture.

It is not be necessary
for the consent of the Holders of Securities under this Section 9.2 to approve the particular form of any proposed
amendment or waiver, but it is sufficient if such consent approves the substance of the proposed amendment or waiver.

After an amendment,
supplement or waiver under this Section 9.2 becomes effective, the Company will mail to the Holders of Securities affected
thereby a notice briefly describing the amendment, supplement or waiver. Any failure of the Company to mail such notice, or any
defect therein, will not, however, in any way impair or affect the validity of any such amended or supplemental indenture or waiver.
Subject to Section 5.8 and Section 5.13 hereof, the application of or compliance with, either generally
or in any particular instance, of any provision of this Indenture or the Securities may be waived as to each series of Securities
by the Holders of a majority in aggregate principal amount of the Outstanding Securities of such series. However, without the consent
of each Holder affected, an amendment or waiver under this Section 9.2 may not (with respect to any Securities held
by a non-consenting Holder):

(a)               
change the Stated Maturity of the principal of, or any installment of principal of or interest on, any Security, or reduce
the principal amount thereof or the rate of interest thereon or any premium payable upon the redemption thereof, or reduce the
amount of the principal of an Original Issue Discount Security that would be due and payable upon a declaration of acceleration
of the Maturity thereof pursuant to Section 5.2, or change any Place of Payment where, or the coin or currency in which,
any Security or any premium or the interest thereon is payable, or impair the right to institute suit for the enforcement of any
such payment on or after the Stated Maturity thereof (or, in the case of redemption, on or after the Redemption Date); or

 

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(b)              
reduce the percentage in principal amount of the Outstanding Securities of any series, the consent of whose Holders is required
for any such supplemental indenture, or the consent of whose Holders is required for any waiver (of compliance with certain provisions
of this Indenture or certain defaults hereunder and their consequences) provided for in this Indenture; or

(c)               
modify any of the provisions of this Section 9.2, Section 5.8, Section 5.13 or Section 10.6,
except to increase any such percentage or to provide that certain other provisions of this Indenture cannot be modified or waived
without the consent of the Holder of each Outstanding Security affected thereby, provided, however, that this clause (c) shall
not be deemed to require the consent of any Holder with respect to changes in the references to “the Trustee”
and concomitant changes in this Section, or the deletion of this proviso, in accordance with the requirements of Section 6.11(b)
and Section 9.1(h); or

(d)              
waive a redemption payment with respect to any Security; provided, however, that any purchase or repurchase of Securities
shall not be deemed a redemption of the Securities; or

(e)               
make any change in the foregoing amendment and waiver provisions.

A supplemental indenture
that changes or eliminates any covenant or other provision of this Indenture that has expressly been included solely for the benefit
of one or more particular series of Securities, or that modifies the rights of the Holders of Securities of such series with respect
to such covenant or other provision, shall be deemed not to affect the rights under this Indenture of the Holders of Securities
of any other series.

It shall not be
necessary for any Act of Holders under this Section 9.2 to approve the particular form of any proposed supplemental
indenture, but it shall be sufficient if such Act shall approve the substance thereof.

9.3             Execution of Supplemental Indentures. In executing, or accepting the additional trusts created by, any supplemental
indenture permitted by this Article or the modifications thereby of the trusts created by this Indenture, the Trustee shall be
entitled to receive, and (subject to Section 6.1) shall be fully protected in relying upon, an Opinion of Counsel stating
that the execution of such supplemental indenture is authorized or permitted by this Indenture. The Trustee may, but shall not
be obligated to, enter into any such supplemental indenture which affects the Trustee’s own rights, duties or immunities
under this Indenture or otherwise.

9.4             Effect
of Supplemental Indentures. Upon the execution of any supplemental indenture under this Article Nine, this Indenture shall
be modified in accordance therewith, and such supplemental indenture shall form a part of this Indenture for all purposes; and
every Holder of Securities theretofore or thereafter authenticated and delivered hereunder shall be bound thereby.

 

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9.5             
Conformity with Trust Indenture Act. Every supplemental indenture executed pursuant to this Article Nine shall conform
to the requirements of the Trust Indenture Act as then in effect.

9.6             
Reference in Securities to Supplemental Indentures. Securities of any series authenticated and delivered after the
execution of any supplemental indenture pursuant to this Article Nine may, and shall if required by the Trustee, bear a notation
in form approved by the Trustee as to any matter provided for in such supplemental indenture. If the Company shall so determine,
new Securities of any series so modified as to conform, in the opinion of the Trustee and the Company, to any such supplemental
indenture may be prepared and executed by the Company and authenticated and delivered by the Trustee in exchange for Outstanding
Securities of such series.

ARTICLE
Ten

COVENANTS

10.1         
Payment of Principal, Premium and Interest. The Company covenants and agrees for the benefit of each series of Securities
that it will duly and punctually pay the principal of and any premium and interest on the Securities of that series in accordance
with the terms of the Securities and this Indenture.

10.2         
Maintenance of Office or Agency. The Company will maintain in St. Paul, Minnesota, an office or agency (which may
be an office of the Trustee or Registrar or agent of the Trustee or Registrar) where Securities of that series may be presented
or surrendered for payment, where Securities of that series may be surrendered for registration of transfer or exchange and where
notices and demands to or upon the Company in respect of the Securities of that series and this Indenture may be served. The Company
will give prompt written notice to the Trustee of the location, and any change in the location, of such office or agency. If at
any time the Company shall fail to maintain any such required office or agency or shall fail to furnish the Trustee with the address
thereof, such presentations, surrenders, notices and demands may be made or served at the Corporate Trust Office of the Trustee.

The Company may
also from time to time designate one or more other offices or agencies where the Securities of one or more series may be presented
or surrendered for any or all such purposes and may from time to time rescind such designations; provided, however, that no such
designation or rescission shall in any manner relieve the Company of its obligation to maintain an office or agency in St. Paul,
Minnesota for such purposes. The Company will give prompt written notice to the Trustee of any such designation or rescission and
of any change in the location of any such other office or agency.

Except as otherwise
specified with respect to a series of Securities as contemplated by Section 3.1, the Company hereby initially designates
the office of the Trustee located at 60 Livingston Avenue, 3rd Floor, St. Paul, Minnesota 55107, as the Company’s
office or agency for each such purpose for each series of Securities.

 

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10.3         
Money for Securities Payments to be Held in Trust. If the Company shall at any time act as its own Paying Agent,
with respect to any series of Securities, it will, on or before each due date of the principal of and any premium or interest on
any of the Securities of that series, segregate and hold in trust for the benefit of the Persons entitled thereto a sum sufficient
to pay the principal and any premium and interest so becoming due until such sums shall be paid to such Persons or otherwise disposed
of as herein provided and will promptly notify the Trustee of its action or failure so to act.

Whenever the Company
shall have one or more Paying Agents for any series of Securities, it will, prior to each due date of the principal of and any
premium or interest on any Securities of that series, deposit with a Paying Agent a sum sufficient to pay the principal and any
premium or interest so becoming due, such sum to be held in trust for the benefit of the Persons entitled to such principal, premium
or interest, and (unless such Paying Agent is the Trustee) the Company will promptly notify the Trustee of its action or failure
so to act. For purposes of this Section 10.3, should a due date for principal of and any premium or interest on, or
sinking fund payment with respect to any series of Securities not be on a Business Day, such payment shall be due on the next Business
Day without any interest for the period from the due date until such Business Day.

The Company will
cause each Paying Agent for any series of Securities other than the Trustee to execute and deliver to the Trustee an instrument
in which such Paying Agent shall agree with the Trustee, subject to the provisions of this Section, that such Paying Agent will:

(a)               
hold all sums held by it for the payment of the principal of and any premium or interest on Securities of that series in
trust for the benefit of the Persons entitled thereto until such sums shall be paid to such Persons or otherwise disposed of as
herein provided;

(b)              
give the Trustee notice of any Default by the Company (or any other obligor upon the Securities of that series) in the making
of any payment of principal and any premium or interest on the Securities of that series; and

(c)               
at any time during the continuance of any such Default, upon the written request of the Trustee, forthwith pay to the Trustee
all sums so held in trust by such Paying Agent.

The Company may
at any time, for the purpose of obtaining the satisfaction and discharge of this Indenture or for any other purpose, pay, or by
Company Order direct any Paying Agent to pay, to the Trustee all sums held in trust by the Company or such Paying Agent, such sums
to be held by the Trustee upon the same trusts as those upon which such sums were held by the Company or such Paying Agent; and,
upon such payment by any Paying Agent to the Trustee, such Paying Agent shall be released from all further liability with respect
to such money.

 

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Subject to any applicable
escheat or abandoned property laws, any money deposited with the Trustee or any Paying Agent, or then held by the Company, in trust
for the payment of the principal of and any premium or interest on any Security of any series and remaining unclaimed for one year
after such principal and any premium or interest has become due and payable shall be paid to the Company on Company Request, or
(if then held by the Company) shall be discharged from such trust; and the Holder of such Security shall thereafter, as an unsecured
general creditor, look only to the Company for payment thereof, and all liability of the Trustee or such Paying Agent with respect
to such trust money, and all liability of the Company as trustee thereof, shall thereupon cease; provided, however,
that the Trustee or such Paying Agent, before being required to make any such repayment, may at the expense of the Company cause
to be published once, in a newspaper published in the English language, customarily published on each Business Day and of general
circulation in St. Paul, Minnesota, notice that such money remains unclaimed and that, after a date specified therein, which shall
not be less than 30 days from the date of such publication, any unclaimed balance of such money then remaining will be repaid to
the Company.

10.4         
Existence. Subject to Article Eight, the Company will do or cause to be done all things necessary to preserve and
keep in full force and effect its existence, rights (charter and statutory) and franchises; provided, however, that the Company
shall not be required to preserve any such right or franchise if the Company shall determine that the preservation thereof is no
longer desirable in the conduct of the business of the Company.

10.5         
Statement by Officers as to Default. Annually, within 150 days after the close of each fiscal year beginning with
the first fiscal year during which one or more series of Securities are Outstanding, the Company will deliver to the Trustee a
brief certificate (which need not include the statements set forth in Section 1.3) from the principal executive officer,
principal financial officer or principal accounting officer of the Company as to his or her knowledge of the Company’s compliance
(without regard to any period of grace or requirement of notice provided herein) with all conditions and covenants under the Indenture
and, if the Company shall be in Default, specifying all such Defaults and the nature and status thereof of which such officer has
knowledge.

10.6         
Additional Amounts. If the Securities of a series provide for the payment of additional amounts (as provided in Section 3.1(o)),
at least 10 days prior to the first Interest Payment Date with respect to that series of Securities and at least 10 days prior
to each date of payment of principal of, premium, if any, or interest on the Securities of that series if there has been a change
with respect to the matters set forth in the below-mentioned Officer’s Certificate, the Company shall furnish to the Trustee
and the principal Paying Agent, if other than the Trustee, an Officer’s Certificate instructing the Trustee and such Paying
Agent whether such payment of principal of, premium, if any, or interest on the Securities of that series shall be made to holders
of the Securities of that series without withholding or deduction for or on account of any tax, assessment or other governmental
charge described in the Securities of that series. If any such withholding or deduction shall be required, then such Officer’s
Certificate shall specify by country the amount, if any, required to be withheld or deducted on such payments to such holders and
shall certify the fact that additional amounts will be payable and the amounts so payable to each holder, and the Company shall
pay to the Trustee or such Paying Agent the additional amounts required to be paid by this Section. The Company covenants to indemnify
the Trustee and any Paying Agent for, and to hold them harmless against, any loss, liability or expense reasonably incurred without
negligence or bad faith on their part arising out of or in connection with actions taken or omitted by any of them in reliance
on any Officer’s Certificate furnished pursuant to this Section 10.6.

 

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Whenever in this
Indenture there is mentioned, in any context, the payment of the principal of or any premium, interest or any other amounts on,
or in respect of, any Securities of any series, such mention shall be deemed to include mention of the payment of additional amounts
provided by the terms of such series established hereby or pursuant hereto to the extent that, in such context, additional amounts
are, were or would be payable in respect thereof pursuant to such terms, and express mention of the payment of additional amounts
(if applicable) in any provision hereof shall not be construed as excluding the payment of additional amounts in those provisions
hereof where such express mention is not made.

ARTICLE
Eleven

REDEMPTION OF SECURITIES

11.1         
Applicability of Article. Securities of any series which are redeemable before their Stated Maturity shall be redeemable
in accordance with their terms and (except as otherwise specified as contemplated by Section 3.1 for Securities of
any series) in accordance with this Article Eleven.

11.2         
Election to Redeem; Notice to Trustee. The election of the Company to redeem any Securities shall be evidenced by
a Board Resolution. In case of any redemption at the election of the Company of less than all the Securities of any series, the
Company shall, at least 15 days prior to the last date for the giving of notice of such redemption (unless a shorter notice shall
be satisfactory to the Trustee), notify the Trustee of such Redemption Date and of the principal amount of Securities of such series
to be redeemed and, if applicable, of the tenor of the Securities to be redeemed. In the case of any redemption of Securities (a)
prior to the expiration of any restriction on such redemption provided in the terms of such Securities or elsewhere in this Indenture
or (b) pursuant to an election of the Company that is subject to a condition specified in the terms of the Securities of the series
to be redeemed, the Company shall furnish the Trustee with an Officer’s Certificate evidencing compliance with such restriction
or condition.

11.3         
Selection by Trustee of Securities to be Redeemed. If less than all the Securities of any series are to be redeemed
(unless all of the Securities of such series and of a specified tenor are to be redeemed), the particular Securities to be redeemed
shall be selected not more than 45 days prior to the Redemption Date by the Trustee, from the Outstanding Securities of such series
not previously called for redemption, by lot, pro rata or by another method as the Trustee shall deem fair and appropriate, including
any method required by the Depository with respect to any Global Securities (and in such manner as is not prohibited by applicable
legal requirements) and which may provide for the selection for redemption of portions (equal to the minimum authorized denomination
for Securities of that series or any integral multiple thereof) of the principal amount of Securities of such series of a denomination
larger than the minimum authorized denomination for Securities of that series.

The Trustee shall
promptly notify the Company in writing of the Securities selected for redemption and, in the case of any Securities selected for
partial redemption, the principal amount thereof to be redeemed. If the Securities of any series to be redeemed consist of Securities
having different dates on which the principal is payable or different rates of interest, or different methods by which interest
may be determined or have any other different tenor or terms, then the Company may, by written notice to the Trustee, direct that
the Securities of such series to be redeemed shall be selected from among the groups of such Securities having specified tenor
or terms and the Trustee shall thereafter select the particular Securities to be redeemed in the manner set forth in the preceding
paragraph from among the group of such Securities so specified.

 

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For all purposes
of this Indenture, unless the context otherwise requires, all provisions relating to the redemption of Securities shall relate,
in the case of any Securities redeemed or to be redeemed only in part, to the portion of the principal amount of such Securities
which has been or is to be redeemed.

11.4         
Notice of Redemption. Notice of redemption shall be given by first-class mail, postage prepaid, mailed not less than
30 nor more than 60 days prior to the Redemption Date, to each Holder of Securities to be redeemed, at his address appearing in
the Security Register.

All notices of redemption
shall state:

(a)               
the Redemption Date,

(b)              
the Redemption Price, or if not then ascertainable, the manner of calculation thereof,

(c)               
if less than all the Outstanding Securities of any series are to be redeemed, the identification (and, in the case of partial
redemption, the principal amounts) of the particular Securities to be redeemed,

(d)              
that on the Redemption Date the Redemption Price will become due and payable upon each such Security to be redeemed and,
if applicable, that interest thereon will cease to accrue on and after said date,

(e)               
the place or places where such Securities are to be surrendered for payment of the Redemption Price, and

(f)               
that the redemption is for a sinking fund, if such is the case.

Notice of redemption of Securities to
be redeemed at the election of the Company shall be given by the Company or, at the Company’s request, by the Trustee in
the name and at the expense of the Company.

11.5         
Deposit of Redemption Price. Prior to any Redemption Date, the Company shall deposit with the Trustee or with a Paying
Agent (or, if the Company is acting as its own Paying Agent, segregate and hold in trust as provided in Section 10.3)
an amount of money sufficient to pay the Redemption Price of, and (except if the Redemption Date shall be an Interest Payment Date)
accrued interest on, all the Securities which are to be redeemed on that date.

11.6         
Securities Payable on Redemption Date. Notice of redemption having been given as aforesaid, the Securities so to
be redeemed shall, on the Redemption Date, become due and payable at the Redemption Price therein specified, and from and after
such date (unless the Company shall default in the payment of the Redemption Price and accrued interest) such Securities shall
cease to bear interest. Upon surrender of any such Security for redemption in accordance with said notice, such Security shall
be paid by the Company at the Redemption Price, together with accrued interest to the Redemption Date; provided, however,
that unless otherwise specified with respect to Securities of any series as contemplated in Section 3.1, installments
of interest whose Stated Maturity is on or prior to the Redemption Date shall be payable to the Holders of such Securities, or
one or more Predecessor Securities, registered as such at the close of business on the relevant record dates according to their
terms and the provisions of Section 3.7.

 

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If any Security
called for redemption shall not be so paid upon surrender thereof for redemption, the principal (and premium, if any) shall, until
paid, bear interest from the Redemption Date at the rate prescribed therefor in the Security.

11.7         
Securities Redeemed in Part. Any Security which is to be redeemed only in part shall be surrendered at a Place of
Payment therefor (with, if the Company or the Trustee so requires, due endorsement by, or a written instrument of transfer in form
satisfactory to the Company and the Trustee duly executed by, the Holder thereof or his attorney duly authorized in writing), and
the Company shall execute, and the Trustee shall authenticate and deliver to the Holder of such Security without service charge,
a new Security or Securities of the same series and tenor, of any authorized denomination as requested by such Holder, in aggregate
principal amount equal to and in exchange for the unredeemed portion of the principal of the Security so surrendered.

ARTICLE
Twelve

SINKING FUNDS

12.1         
Applicability of Article. The provisions of this Article Twelve shall be applicable to any sinking fund for the retirement
of Securities of a series except as otherwise specified as contemplated by Section 3.1 for Securities of such series.

The minimum amount
of any sinking fund payment provided for by the terms of Securities of any series is herein referred to as a “mandatory
sinking fund payment,” and any payment in excess of such minimum amount provided for by the terms of Securities of any
series is herein referred to as an “optional sinking fund payment.” If provided for by the terms of Securities
of any series, the cash amount of any sinking fund payment may be subject to reduction as provided in Section 12.2.
Each sinking fund payment shall be applied to the redemption of Securities of any series as provided for by the terms of Securities
of such series.

12.2         
Satisfaction of Sinking Fund Payments with Securities. The Company (a) may deliver Outstanding Securities of a series
(other than any previously called for redemption) and (b) may apply as a credit Securities of a series which have been redeemed
either at the election of the Company pursuant to the terms of such Securities or through the application of permitted optional
sinking fund payments pursuant to the terms of such Securities, in each case in satisfaction of all or any part of any sinking
fund payment with respect to the Securities of such series required to be made pursuant to the terms of such Securities as provided
for by the terms of such series; provided that such Securities have not been previously so credited. Such Securities shall be received
and credited for such purpose by the Trustee at the Redemption Price specified in such Securities for redemption through operation
of the sinking fund and the amount of such sinking fund payment shall be reduced accordingly.

 

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12.3         
Redemption of Securities for Sinking Fund. Not less than 45 days prior to each sinking fund payment date for any
series of Securities (unless a shorter period shall be satisfactory to the Trustee), the Company will deliver to the Trustee an
Officer’s Certificate specifying the amount of the next ensuing sinking fund payment for that series pursuant to the terms
of that series, the portion thereof, if any, which is to be satisfied by payment of cash and the portion thereof, if any, which
is to be satisfied by delivering and crediting Securities of that series pursuant to Section 12.2 and stating the basis
for such credit and that such Securities have not been previously so credited, and will also deliver to the Trustee any Securities
to be so delivered. Not less than 30 days before each such sinking fund payment date the Trustee shall select the Securities to
be redeemed upon such sinking fund payment date in the manner specified in Section 11.3 and cause notice of the redemption
thereof to be given in the name of and at the expense of the Company in the manner provided in Section 11.4. Such notice
having been duly given, the redemption of such Securities shall be made upon the terms and in the manner stated in Section 11.6
and Section 11.7.

ARTICLE
Thirteen

DEFEASANCE

13.1         
Option to Effect Legal Defeasance or Covenant Defeasance. The Company may, at the option of its Board of Directors
evidenced by a resolution set forth in an Officer’s Certificate, and at any time, elect to have either Section 13.2
or Section 13.3 hereof be applied to all outstanding Securities upon compliance with the conditions set forth below
in this Article Thirteen.

13.2         
Legal Defeasance and Discharge. Upon the Company’s exercise under Section 13.1 hereof of the option
applicable to this Section 13.2, the Company will, subject to the satisfaction of the conditions set forth in Section 13.4
hereof, be deemed to have been discharged from their obligations with respect to all outstanding Securities on the date the conditions
set forth below are satisfied (hereinafter, “Legal Defeasance”). For this purpose, Legal Defeasance means that
the Company will be deemed to have paid and discharged the entire Debt represented by the outstanding Securities, which will thereafter
be deemed to be “outstanding” only for the purposes of Section 13.5 hereof and the other sections
of this Indenture referred to in clauses (a) and (b) below, and to have satisfied all their other obligations under such Securities
and this Indenture (and the Trustee, on demand of and at the expense of the Company, shall execute proper instruments acknowledging
the same), except for the following provisions which will survive until otherwise terminated or discharged hereunder:

(a)               
the rights of Holders of Outstanding Securities to receive payments in respect of the principal of, or interest or premium,
if any, on such Securities when such payments are due from the trust referred to in Section 13.4 hereof;

(b)              
the Company’s obligations with respect to such Securities under Section 3.4, Section 3.5,
Section 3.6, Section 10.2 and Section 10.3 hereof;

 

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(c)               
the rights, powers, trusts, duties and immunities of the Trustee hereunder and the Company’s obligations in connection
therewith; and

(d)              
this Article Thirteen.

Subject to compliance
with this Article Thirteen, the Company may exercise its option under this Section 13.2 notwithstanding the prior exercise
of its option under Section 13.3 hereof.

13.3         
Covenant Defeasance. Upon the Company’s exercise under Section 13.1 hereof of the option applicable
to this Section 13.3, the Company will, subject to the satisfaction of the conditions set forth in Section 13.4
hereof, be released from each of their obligations under the covenants contained in Section 7.4, Section 8.1
and Section 10.4 hereof as well as any Additional Defeasible Provisions (such release and termination hereinafter referred
to as “Covenant Defeasance”), and the Securities will thereafter be deemed not “outstanding”
for the purposes of any direction, waiver, consent or declaration or act of Holders (and the consequences of any thereof) in connection
with such covenants, but will continue to be deemed “outstanding” for all other purposes hereunder (it being
understood that such Securities will not be deemed outstanding for accounting purposes). For this purpose, Covenant Defeasance
means that, with respect to the outstanding Securities, the Company may omit to comply with and will have no liability in respect
of any term, condition or limitation set forth in any such covenant, whether directly or indirectly, by reason of any reference
elsewhere herein to any such covenant or by reason of any reference in any such covenant to any other provision herein or in any
other document and such omission to comply will not constitute a Default or an Event of Default under Section 5.1 hereof,
but, except as specified above, the remainder of this Indenture and such Securities will be unaffected thereby. In addition, upon
the Company’s exercise under Section 13.1 hereof of the option applicable to this Section 13.3 hereof,
subject to the satisfaction of the conditions set forth in Section 13.4 hereof, Section 5.1(c) and Section 5.1(d)
hereof and will not constitute Events of Default.

13.4         
Conditions to Legal or Covenant Defeasance. In order to exercise either Legal Defeasance or Covenant Defeasance under
either Section 13.2 or Section 13.3 hereof:

(a)               
the Company must irrevocably deposit with the Trustee, in trust, for the benefit of the Holders of the Securities, cash
in U.S. dollars, non-callable U.S. Government Obligations, or a combination of cash in U.S. dollars and non-callable U.S. Government
Obligations, in such amounts as will be sufficient, in the opinion of a nationally recognized investment bank, appraisal firm,
or firm of independent public accountants to pay the principal of, or interest and premium, if any, on the Outstanding Securities
on the stated date for payment thereof or on the applicable redemption date, as the case may be, and the Company must specify whether
the Securities are being defeased to such stated date for payment or to a particular redemption date;

(b)              
in the case of an election under Section 13.2 hereof, the Company must deliver to the Trustee an Opinion of
Counsel confirming that:

 

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(i)                
the Company has received from, or there has been published by, the Internal Revenue Service a ruling; or

(ii)              
since the Issue Date, there has been a change in the applicable federal income tax law, in either case to the effect that,
and based thereon such Opinion of Counsel will confirm that, the Holders of the Outstanding Securities will not recognize income,
gain or loss for federal income tax purposes as a result of such Legal Defeasance and will be subject to federal income tax on
the same amounts, in the same manner and at the same times as would have been the case if such Legal Defeasance had not occurred;

(c)               
in the case of an election under Section 13.3 hereof, the Company must deliver to the Trustee an Opinion of
Counsel confirming that the Holders of the Outstanding Securities will not recognize income, gain or loss for federal income tax
purposes as a result of such Covenant Defeasance and will be subject to federal income tax on the same amounts, in the same manner
and at the same times as would have been the case if such Covenant Defeasance had not occurred;

(d)              
no Default or Event of Default has occurred and is continuing on the date of such deposit (other than a Default or Event
of Default resulting from the borrowing of funds to be applied to such deposit);

(e)               
the deposit will not result in a breach or violation of, or constitute a default under, any other instrument to which the
Company is a party or by which the Company is bound;

(f)               
such Legal Defeasance or Covenant Defeasance will not result in a breach or violation of, or constitute a default under,
any material agreement or instrument (other than this Indenture) to which the Company or any of its Subsidiaries is a party or
by which the Company or any of its Subsidiaries is bound;

(g)              
the Company must deliver to the Trustee an Officer’s Certificate stating that the deposit was not made by the Company
with the intent of preferring the Holders of Securities over the other creditors of the Company with the intent of defeating, hindering,
delaying or defrauding any other creditors of the Company or others;

(h)              
the Company must deliver to the Trustee an Officer’s Certificate, stating that all conditions precedent set forth
in clauses (a) through (g) of this Section 13.4 have been complied with; and

(i)                
the Company must deliver to the Trustee an Opinion of Counsel (which Opinion of Counsel may be subject to customary assumptions,
qualifications and exclusions), stating that all conditions precedent set forth in clauses (b), (c) and (e) of this Section 13.4
have been complied with; provided that the Opinion of Counsel with respect to clause (e) of this Section 13.4 may be
to the knowledge of such counsel.

 

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13.5         
Deposited Money and U.S. Government Obligations to be Held in Trust, Other Miscellaneous Provisions. Subject to Section 13.6
hereof, all money and non-callable U.S. Government Obligation (including the proceeds thereof) deposited with the Trustee (or other
qualifying trustee, collectively for purposes of this Section 13.5, the “Trustee”) pursuant to Section 13.4
hereof in respect of the Outstanding Securities will be held in trust and applied by the Trustee, in accordance with the provisions
of such Securities and this Indenture, to the payment, either directly or through any Paying Agent (including the Company acting
as Paying Agent) as the Trustee may determine, to the Holders of such Securities of all sums due and to become due thereon in respect
of principal, premium, if any, and interest, but such money need not be segregated from other funds except to the extent required
by law.

The Company will
pay and indemnify the Trustee against any tax, fee or other charge imposed on or assessed against the cash or non-callable U.S.
Government Obligations deposited pursuant to Section 13.4 hereof or the principal and interest received in respect
thereof other than any such tax, fee or other charge which by law is for the account of the Holders of the Outstanding Securities.

Notwithstanding
anything in this Article Thirteen to the contrary, the Trustee will deliver or pay to the Company from time to time upon the request
of the Company any money or non-callable U.S. Government Obligations held by it as provided in Section 13.4 hereof
which, in the opinion of a nationally recognized firm of independent public accountants expressed in a written certification thereof
delivered to the Trustee (which may be the opinion delivered under Section 13.4(a) hereof), are in excess of the amount
thereof that would then be required to be deposited to effect an equivalent Legal Defeasance or Covenant Defeasance.

13.6         
Repayment. Any money deposited with the Trustee or any Paying Agent, or then held by the Company, in trust for the
payment of the principal of, premium, if any, or interest on any Security and remaining unclaimed for two years after such principal,
premium, if any, or interest has become due and payable shall be paid to the Company on its request or (if then held by the Company)
will be discharged from such trust; and the Holder of such Security will thereafter be permitted to look only to the Company for
payment thereof, and all liability of the Trustee or such Paying Agent with respect to such trust money, and all liability of the
Company as trustee thereof, will thereupon cease; provided, however, that the Trustee or such Paying Agent, before being required
to make any such repayment, may at the expense of the Company cause to be published once, in the New York Times and The Wall Street
Journal (national edition), notice that such money remains unclaimed and that, after a date specified therein, which will not be
less than 30 days from the date of such notification or publication, any unclaimed balance of such money then remaining will be
repaid to the Company.

13.7         
Reinstatement. If the Trustee or Paying Agent is unable to apply any United States dollars or non-callable U.S. Government
Obligations in accordance with Section 13.2 or Section 13.3 hereof, as the case may be, by reason of any
order or judgment of any court or governmental authority enjoining, restraining or otherwise prohibiting such application, then
the Company’s obligations under this Indenture and the Securities will be revived and reinstated as though no deposit had
occurred pursuant to Section 13.2 or Section 13.3 hereof until such time as the Trustee or Paying Agent
is permitted to apply all such money in accordance with Section 13.2 or Section 13.3 hereof, as the case
may be; provided, however, that, if the Company makes any payment of principal of, premium, if any, or interest on any Note following
the reinstatement of its obligations, the Company will be subrogated to the rights of the Holders of such Securities to receive
such payment from the money held by the Trustee or Paying Agent.

 

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ARTICLE
Fourteen

SUBORDINATION OF SECURITIES

14.1         Securities Subordinated to Senior Debt. The Company and the Trustee each covenants and agrees, and each Holder, by
its acceptance of a Security, likewise covenants and agrees that all Securities shall be issued subject to the provisions of this
Article Fourteen; and each Person holding any Security, whether upon original issue or upon transfer, assignment or exchange thereof,
accepts and agrees that the payment of the principal of, interest and premium, if any, on each and all of the Securities shall,
to the extent and in the manner set forth in this Article Fourteen, be subordinated in right of payment to the prior payment in
full, in cash or cash equivalents, of all existing and future Senior Debt.

14.2         No Payment on Securities in Certain Circumstances.

(a)               
No direct or indirect payment by or on behalf of the Company of the principal of, interest and premium, if any, on each
and all of the Securities (other than with the money, securities or proceeds held under any defeasance trust established in accordance
with this Indenture), whether pursuant to the terms of the Securities or upon acceleration or otherwise shall be made if, at the
time of such payment, there exists a default in the payment of all or any portion of the obligations on any Senior Debt and such
default shall not have been cured or waived or the benefits of this sentence waived by or on behalf of the holders of such Senior
Debt.

(b)              
During the continuance of any other event of default with respect to any Designated Senior Debt pursuant to which the maturity
thereof may be accelerated, upon receipt by the Trustee of written notice from the trustee or other representative for the holders
of such Designated Senior Debt (or the holders of at least a majority in principal amount of such Designated Senior Debt then outstanding),
no payment of the principal of, interest or premium, if any, on each and all of the Securities (other than with the money, securities
or proceeds held under any defeasance trust established in accordance with this Indenture) may be made by or on behalf of the Company
upon or in respect of the Securities for a period (a “Payment Blockage Period”) commencing on the date of receipt
of such notice and ending 179 days thereafter (unless, in each case, such Payment Blockage Period has been terminated by written
notice to the Trustee from such trustee of, or other representatives for, such holders or by payment in full in cash or cash equivalents
of such Designated Senior Debt or such event of default has been cured or waived). Not more than one Payment Blockage Period may
be commenced with respect to the Securities during any period of 360 consecutive days. Notwithstanding anything in this Indenture
to the contrary, there must be 180 consecutive days in any 360-day period in which no Payment Blockage Period is in effect. No
event of default that existed or was continuing (it being acknowledged that any subsequent action that would give rise to an event
of default pursuant to any provision under which an event of default previously existed or was continuing shall constitute a new
event of default for this purpose) on the date of the commencement of any Payment Blockage Period with respect to the Designated
Senior Debt initiating such Payment Blockage Period shall be, or shall be made, the basis for the commencement of a second Payment
Blockage Period by the trustee or other representative for the holders of such Designated Senior Debt, whether or not within a
period of 360 consecutive days, unless such event of default shall have been cured or waived for a period of not less than 90 consecutive
days.

 

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(c)               
In the event that, notwithstanding the foregoing, any payment shall be received by the Trustee or any Holder when such payment
is prohibited by clause (a) or (b) above, the Trustee shall promptly notify the holders of Senior Debt of such prohibited payment
and such payment shall be held in trust for the benefit of, and shall be paid over or delivered to, the holders of Senior Debt
or their respective representatives, or to the trustee or trustees under any indenture pursuant to which any of such Senior Debt
may have been issued, as their respective interests may appear, but only to the extent that, upon notice from the Trustee to the
holders of Senior Debt that such prohibited payment has been made, the holders of the Senior Debt (or their representative or representatives
of a trustee) within 30 days of receipt of such notice from the Trustee notify the Trustee of the amounts then due and owing on
the Senior Debt, if any, and only the amounts specified in such notice to the Trustee shall be paid to the holders of Senior Debt
and any excess above such amounts due and owing on Senior Debt shall be paid to the Company.

14.3         
Payment over Proceeds upon Dissolution, Etc.

(a)               
Upon any payment or distribution of assets or securities of the Company of any kind or character, whether in cash, property
or securities (other than with the money, securities or proceeds held under any defeasance trust established in accordance with
this Indenture), in connection with any dissolution or winding up or total or partial liquidation or reorganization of the Company,
whether voluntary or involuntary, or in bankruptcy, insolvency, receivership or other proceedings or other marshalling of assets
for the benefit of creditors, all amounts due or to become due upon all Senior Debt shall first be paid in full, in cash or cash
equivalents, before the Holders or the Trustee on their behalf shall be entitled to receive any payment by (or on behalf of) the
Company on account of the Securities, or any payment to acquire any of the Securities for cash, property or securities, or any
distribution with respect to the Securities of any cash, property or securities. Before any payment may be made by, or on behalf
of, the Company on any Security (other than with the money, securities or proceeds held under any defeasance trust established
in accordance with this Indenture), in connection with any such dissolution, winding up, liquidation or reorganization, any payment
or distribution of assets or securities for the Company of any kind or character, whether in cash, property or securities, to which
the Holders or the Trustee on their behalf would be entitled, but for the provisions of this Article Fourteen, shall be made by
the Company or by any receiver, trustee in bankruptcy, liquidating trustee, agent or other similar Person making such payment or
distribution or by the Holders or the Trustee if received by them or it, directly to the holders of Senior Debt (pro rata to such
holders on the basis of the respective amounts of Senior Debt held by such holders) or their representatives or to any trustee
or trustees under any indenture pursuant to which any such Senior Debt may have been issued, as their respective interests appear,
to the extent necessary to pay all such Senior Debt in full, in cash or cash equivalents, after giving effect to any concurrent
payment, distribution or provision therefor to or for the holders of such Senior Debt.

 

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(b)              
To the extent any payment of Senior Debt (whether by or on behalf of the Company, as proceeds of security or enforcement
of any right of setoff or otherwise) is declared to be fraudulent or preferential, set aside or required to be paid to any receiver,
trustee in bankruptcy, liquidating trustee, agent or other similar Person under any bankruptcy, insolvency, receivership, fraudulent
conveyance or similar law, then if such payment is recovered by, or paid over to, such receiver, trustee in bankruptcy, liquidating
trustee or other similar Person, the Senior Debt or part thereof originally intended to be satisfied shall be deemed to be reinstated
and outstanding as if such payment had not occurred. To the extent the obligation to repay any Senior Debt is declared to be fraudulent,
invalid, or otherwise set aside under any bankruptcy, insolvency, receivership, fraudulent conveyance or similar law, then the
obligation so declared fraudulent, invalid or otherwise set aside (and all other amounts that would come due with respect thereto
had such obligation not been so affected) shall be deemed to be reinstated and outstanding as Senior Debt for all purposes hereof
as if such declaration, invalidity or setting aside had not occurred.

(c)               
In the event that, notwithstanding the provision in clause (a) above prohibiting such payment or distribution, any payment
or distribution of assets or securities of the Company of any kind or character, whether in cash, property or securities, shall
be received by the Trustee or any Holder at a time when such payment or distribution is prohibited by clause (a) above and before
all obligations in respect of Senior Debt are paid in full, in cash or cash equivalents, such payment or distribution shall be
received and held in trust for the benefit of, and shall be paid over or delivered to, the holders of Senior Debt (pro rata to
such holders on the basis of the respective amounts of Senior Debt held by such holders) or their representatives or to any trustee
or trustees under any indenture pursuant to which any such Senior Debt may have been issued, as their respective interests appear,
for application to the payment of all such Senior Debt remaining unpaid, in cash or cash equivalents, after giving effect to any
concurrent payment, distribution or provision therefor to or for the holders of such Senior Debt.

(d)              
For purposes of this Section 14.3, the words “cash, property or securities” shall not be
deemed to include, so long as the effect of this clause is not to cause the Securities to be treated in any case or proceeding
or similar event described in this Section 14.3 as part of the same class of claims as the Senior Debt or any class
of claims pari passu with, or senior to, the Senior Debt for any payment or distribution, securities of the Company or any other
corporation provided for by a plan of reorganization or readjustment that are subordinated, at least to the extent that the Securities
are subordinated, to the payment of all Senior Debt then outstanding; provided that (i) if a new corporation results from such
reorganization or readjustment, such corporation assumes the Senior Debt and (ii) the rights of the holders of the Senior Debt
are not, without the consent of such holders, altered by such reorganization or readjustment. The consolidation of the Company
with, or the merger of the Company with or into, another corporation or the liquidation or dissolution of the Company following
the sale, conveyance, transfer, lease or other disposition of all or substantially all of its property and assets to another corporation
upon the terms and conditions provided in Section 8.1 of this Indenture shall not be deemed a dissolution, winding
up, liquidation or reorganization for the purposes of this Section 14.3 if such other corporation shall, as a part
of such consolidation, merger, sale, conveyance, transfer, lease or other disposition, comply (to the extent required) with the
conditions stated in Section 8.1 of this Indenture.

 

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14.4         
Subrogation.

(a)               
Upon the payment in full of all Senior Debt in cash or cash equivalents, the Holders shall be subrogated to the rights of
the holders of Senior Debt to receive payments or distributions of cash, property or securities of the Company made on such Senior
Debt until the principal of, premium, if any, and interest on the Securities shall be paid in full; and, for the purposes of such
subrogation, no payments or distributions to the holders of the Senior Debt of any cash, property or securities to which the Holders
or the Trustee on their behalf would be entitled except for the provisions of this Article Fourteen, and no payment pursuant to
the provisions of this Article Fourteen to the holders of Senior Debt by the Holders or the Trustee on their behalf shall, as between
the Company, its creditors other than holders of Senior Debt, and the Holders, be deemed to be a payment by the Company to or on
account of the Senior Debt. It is understood that the provisions of this Article Fourteen are intended solely for the purpose of
defining the relative rights of the Holders, on the one hand, and the holders of the Senior Debt, on the other hand.

(b)              
If any payment or distribution to which the Holders would otherwise have been entitled but for the provisions of this Article
Fourteen shall have been applied, pursuant to the provisions of this Article Fourteen, to the payment of all amounts payable under
Senior Debt, then, and in such case, the Holders shall be entitled to receive from the holders of such Senior Debt any payments
or distributions received by such holders of Senior Debt in excess of the amount required to make payment in full, in cash or cash
equivalents, of such Senior Debt of such holders.

14.5         
Obligations of Company Unconditional.

(a)               
Nothing contained in this Article Fourteen or elsewhere in this Indenture or in the Securities is intended to or shall impair,
as among the Company and the Holders, the obligation of the Company, which is absolute and unconditional, to pay to the Holders
the principal of, premium, if any, and interest on the Securities as and when the same shall become due and payable in accordance
with their terms, or is intended to or shall affect the relative rights of the Holders and creditors of the Company other than
the holders of the Senior Debt, nor shall anything herein or therein prevent the Holders or the Trustee on their behalf from exercising
all remedies otherwise permitted by applicable law upon default under this Indenture, subject to the rights, if any, under this
Article Fourteen of the holders of the Senior Debt.

(b)              
Without limiting the generality of the foregoing, nothing contained in this Article Fourteen will restrict the right of
the Trustee or the Holders to take any action to declare the Securities to be due and payable prior to their Stated Maturity pursuant
to Section 5.1 of this Indenture or to pursue any rights or remedies hereunder; provided, however, that
all Senior Debt then due and payable or thereafter declared to be due and payable shall first be paid in full, in cash or cash
equivalents, before the Holders or the Trustee are entitled to receive any direct or indirect payment from the Company with respect
to any Security.

 

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14.6         
Notice to Trustee.

(a)               
The Company shall give prompt written notice to the Trustee of any fact known to the Company that would prohibit the making
of any payment to or by the Trustee in respect of the Securities pursuant to the provisions of this Article Fourteen. The Trustee
shall not be charged with the knowledge of the existence of any default or event of default with respect to any Senior Debt or
of any other facts that would prohibit the making of any payment to or by the Trustee unless and until the Trustee shall have received
notice in writing at its Corporate Trust Office to that effect signed by an Officer of the Company, or by a holder of Senior Debt
or trustee or agent thereof; and prior to the receipt of any such written notice, the Trustee shall, subject to Article Six, be
entitled to assume that no such facts exist; provided that, if the Trustee shall not have received the notice provided for in this
Section 14.6 at least two Business Days prior to the date upon which, by the terms of this Indenture, any monies shall
become payable for any purpose (including, without limitation, the payment of the principal of, premium, if any, or interest on
any Security), then, notwithstanding anything herein to the contrary, the Trustee shall have full power and authority to receive
any monies from the Company and to apply the same to the purpose for which they were received, and shall not be affected by any
notice to the contrary that may be received by it on or after such prior date except for an acceleration of the Securities prior
to such application. Nothing contained in this Section 14.6 shall limit the right of the holders of Senior Debt to
recover payments as contemplated by this Article Fourteen. The foregoing shall not apply if the Paying Agent is the Company. The
Trustee shall be entitled to rely on the delivery to it of a written notice by a Person representing himself or itself to be a
holder of any Senior Debt (or a trustee on behalf of, or other representative of, such holder) to establish that such notice has
been given by a holder of such Senior Debt or a trustee or representative on behalf of any such holder.

(b)              
In the event that the Trustee determines in good faith that any evidence is required with respect to the right of any Person
as a holder of Senior Debt to participate in any payment or distribution pursuant to this Article Fourteen, the Trustee may request
such Person to furnish evidence to the reasonable satisfaction of the Trustee as to the amount of Senior Debt held by such Person,
the extent to which such Person is entitled to participate in such payment or distribution and any other facts pertinent to the
rights of such Person under this Article Fourteen and, if such evidence is not furnished to the Trustee, the Trustee may defer
any payment to such Person pending judicial determination as to the right of such Person to receive such payment.

14.7         
Reliance on Judicial Order or Certificate of Liquidating Agent. Upon any payment or distribution of assets or securities
referred to in this Article Fourteen, the Trustee and the Holders shall be entitled to rely upon any order or decree made by any
court of competent jurisdiction in which bankruptcy, dissolution, winding up, liquidation or reorganization proceedings are pending,
or upon a certificate of the receiver, trustee in bankruptcy, liquidating trustee, agent or other similar Person making such payment
or distribution, delivered to the Trustee or to the Holders for the purpose of ascertaining the persons entitled to participate
in such distribution, the holders of the Senior Debt and other Debt of the Company, the amount thereof or payable thereon, the
amount or amounts paid or distributed thereon and all other facts pertinent thereto or to this Article Fourteen.

 

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14.8         
Trustee’s Relation to Senior Debt.

(a)               
The Trustee and any Paying Agent shall be entitled to all the rights set forth in this Article Fourteen with respect to
any Senior Debt that may at any time be held by it in its individual or any other capacity to the same extent as any other holder
of Senior Debt and nothing in this Indenture shall deprive the Trustee or any Paying Agent of any of its rights as such holder.

(b)              
With respect to the holders of Senior Debt, the Trustee undertakes to perform or to observe only such of its covenants and
obligations as are specifically set forth in this Article Fourteen, and no implied covenants or obligations with respect to the
holders of Senior Debt shall be read into this Indenture against the Trustee. The Trustee shall not be deemed to owe any fiduciary
duty to the holders of Senior Debt (except as provided in Section 14.2 and Section 14.3 of this Indenture)
and shall not be liable to any such holders if the Trustee shall in good faith mistakenly pay over or distribute to Holders of
Securities or to the Company or to any other person cash, property or securities to which any holders of Senior Debt shall be entitled
by virtue of this Article Fourteen or otherwise.

14.9         
Subordination Rights Not Impaired by Acts or Omissions of the Company or Holders of Senior Debt. No right of any
present or future holders of any Senior Debt to enforce subordination as provided in this Article Fourteen will at any time in
any way be prejudiced or impaired by any act or failure to act on the part of the Company or by any act or failure to act, in good
faith, by any such holder, or by any noncompliance by the Company with the terms of this Indenture, regardless of any knowledge
thereof that any such holder may have or otherwise be charged with. The provisions of this Article Fourteen are intended to be
for the benefit of, and shall be enforceable directly by, the holders of Senior Debt.

14.10     
Holders Authorize Trustee to Effectuate Subordination of Securities. Each Holder by his acceptance of any Securities
authorizes and expressly directs the Trustee on his behalf to take such action as may be necessary or appropriate to effectuate
the subordination provided in this Article Fourteen, and appoints the Trustee his attorney-in-fact for such purposes, including,
in the event of any dissolution, winding up, liquidation or reorganization of the Company (whether in bankruptcy, insolvency, receivership,
reorganization or similar proceedings or upon an assignment for the benefit of creditors or otherwise) tending towards liquidation
of the property and assets of the Company, the filing of a claim for the unpaid balance of its Securities in the form required
in those proceedings. If the Trustee does not file a proper claim or proof in indebtedness in the form required in such proceeding
at least 30 days before the expiration of the time to file such claim or claims, each holder of Senior Debt is hereby authorized
to file an appropriate claim for and on behalf of the Holders.

 

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14.11     
Not to Prevent Events of Default. The failure to make a payment on account of principal of, premium, if any, or interest
on the Securities by reason of any provision of this Article Fourteen will not be construed as preventing the occurrence of an
Event of Default.

14.12     
Trustee’s Compensation Not Prejudiced. Nothing in this Article Fourteen will apply to amounts due to the Trustee
pursuant to other sections of this Indenture, including Section 6.7.

14.13     
No Waiver of Subordination Provisions. Without in any way limiting the generality of Section 14.9, the
holders of Senior Debt may, at any time and from time to time, without the consent of or notice to the Trustee or the Holders,
without incurring responsibility to the Holders and without impairing or releasing the subordination provided in this Article Fourteen
or the obligations hereunder of the Holders to the holders of Senior Debt, do any one or more of the following: (a) change the
manner, place or terms of payment or extend the time of payment of, or renew or alter, Senior Debt or any instrument evidencing
the same or any agreement under which Senior Debt is outstanding or secured; (b) sell, exchange, release or otherwise deal with
any property pledged, mortgaged or otherwise securing Senior Debt; (c) release any Person liable in any manner for the collection
of Senior Debt; and (d) exercise or refrain from exercising any rights against the Company and any other Person.

14.14     
Payments May Be Paid Prior to Dissolution. Nothing contained in this Article Fourteen or elsewhere in this Indenture
shall prevent (i) the Company, except under the conditions described in Section 14.2 or Section 14.3, from
making payments of principal of, premium, if any, and interest on the Securities, or from depositing with the Trustee any money
for such payments, or (ii) the application by the Trustee of any money deposited with it for the purpose of making such payments
of principal of, premium, if any, and interest on the Securities to the holders entitled thereto unless, at least two Business
Days prior to the date upon which such payment becomes due and payable, the Trustee shall have received the written notice provided
for in Section 14.2(b) of this Indenture (or there shall have been an acceleration of the Securities prior to such
application) or in Section 14.15 of this Indenture. The Company shall give prompt written notice to the Trustee of
any dissolution, winding up, liquidation or reorganization of the Company.

14.15     
Trust Moneys Not Subordinated. Notwithstanding anything contained herein to the contrary, payments from money or
the proceeds of U.S. Government Obligations held in trust under Article Four by the Trustee for the payment of principal of, premium,
if any, and interest on the Securities shall not be subordinated to the prior payment of any Senior Debt (provided that, at the
time deposited, such deposit did not violate any then outstanding Senior Debt), and none of the Holders shall be obligated to pay
over any such amount to any holder of Senior Debt.

This instrument
may be executed in any number of counterparts, each of which so executed shall be deemed to be an original, but all such counterparts
shall together constitute but one and the same instrument.

 

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IN WITNESS WHEREOF,
the parties hereto have caused this Indenture to be duly executed, and their respective corporate seals to be hereunto affixed
and attested, all as of the day and year first above written.

 

	 	PACIFIC ETHANOL, INC.	 
	 	 	 	 
	 	 	 	 
	 	By:	 	 
	 	Name:	Byron T. McGregor	 
	 	Title:	Chief Financial Officer	 
	 	 	 	 
	 	 	 	 
	 	U.S. BANK NATIONAL ASSOCIATION	 
	 	 	 	 
	 	 	 	 
	 	By:	 	 
	 	Name:	 	 
	 	Title:	 	 
	 	 	 	 

 

 

 

 

 

 

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