<SEC-DOCUMENT>0001019687-12-003426.txt : 20120921
<SEC-HEADER>0001019687-12-003426.hdr.sgml : 20120921
<ACCEPTANCE-DATETIME>20120921090944
ACCESSION NUMBER:		0001019687-12-003426
CONFORMED SUBMISSION TYPE:	8-K
PUBLIC DOCUMENT COUNT:		7
CONFORMED PERIOD OF REPORT:	20120921
ITEM INFORMATION:		Entry into a Material Definitive Agreement
ITEM INFORMATION:		Regulation FD Disclosure
ITEM INFORMATION:		Other Events
ITEM INFORMATION:		Financial Statements and Exhibits
FILED AS OF DATE:		20120921
DATE AS OF CHANGE:		20120921

FILER:

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			Pacific Ethanol, Inc.
		CENTRAL INDEX KEY:			0000778164
		STANDARD INDUSTRIAL CLASSIFICATION:	INDUSTRIAL ORGANIC CHEMICALS [2860]
		IRS NUMBER:				412170618
		STATE OF INCORPORATION:			DE
		FISCAL YEAR END:			1231

	FILING VALUES:
		FORM TYPE:		8-K
		SEC ACT:		1934 Act
		SEC FILE NUMBER:	000-21467
		FILM NUMBER:		121103223

	BUSINESS ADDRESS:	
		STREET 1:		400 CAPITOL MALL, SUITE 2060
		CITY:			SACRAMENTO
		STATE:			CA
		ZIP:			95814
		BUSINESS PHONE:		916-403-2123

	MAIL ADDRESS:	
		STREET 1:		400 CAPITOL MALL, SUITE 2060
		CITY:			SACRAMENTO
		STATE:			CA
		ZIP:			95814

	FORMER COMPANY:	
		FORMER CONFORMED NAME:	ACCESSITY CORP
		DATE OF NAME CHANGE:	20030627

	FORMER COMPANY:	
		FORMER CONFORMED NAME:	DRIVERSSHIELD COM CORP
		DATE OF NAME CHANGE:	20001115

	FORMER COMPANY:	
		FORMER CONFORMED NAME:	FIRST PRIORITY GROUP INC
		DATE OF NAME CHANGE:	19920703
</SEC-HEADER>
<DOCUMENT>
<TYPE>8-K
<SEQUENCE>1
<FILENAME>peix_8k.htm
<DESCRIPTION>FORM 8-K
<TEXT>
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<!-- Field: Rule-Page --><DIV ALIGN="LEFT" STYLE="margin-top: 12pt; margin-bottom: 3pt"><DIV STYLE="font-size: 1pt; border-top: Black 2pt solid; border-bottom: Black 1pt solid; width: 100%">&nbsp;</DIV></DIV><!-- Field: /Rule-Page -->

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>SECURITIES AND EXCHANGE COMMISSION</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>Washington, D.C. 20549</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>FORM 8-K</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>CURRENT REPORT</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>PURSUANT TO SECTION 13 OR 15(d) OF</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>THE SECURITIES EXCHANGE ACT OF 1934</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 50%; font-size: 10pt; text-align: center">Date of Report (Date of earliest event reported)</TD>
    <TD STYLE="width: 50%; border-bottom: black 1.5pt solid; font-size: 10pt; font-weight: bold; text-align: center">September 20, 2012</TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 100%; border-bottom: black 1.5pt solid; font-size: 10pt; font-weight: bold; text-align: center">PACIFIC ETHANOL, INC.</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="font-size: 10pt; text-align: center">(Exact name of registrant as specified in its charter)</TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 32%; font-size: 10pt; font-weight: bold; text-align: center">Delaware</TD>
    <TD STYLE="width: 2%; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="width: 32%; font-size: 10pt; font-weight: bold; text-align: center">000-21467</TD>
    <TD STYLE="width: 2%; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="width: 32%; font-size: 10pt; font-weight: bold; text-align: center">41-2170618</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">(State or other jurisdiction</P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">of incorporation)</P></TD>
    <TD>&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: center">(Commission File Number)</TD>
    <TD>&nbsp;</TD>
    <TD>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">(IRS Employer</P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">Identification No.)</P></TD></TR>
<TR STYLE="vertical-align: top">
    <TD COLSPAN="5">&nbsp;</TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 53%; border-bottom: black 1.5pt solid; font-size: 10pt; font-weight: bold; text-align: center">400 Capitol Mall, Suite 2060, Sacramento, CA</TD>
    <TD STYLE="width: 47%; border-bottom: black 1.5pt solid; font-size: 10pt; font-weight: bold; text-align: center">95814</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="font-size: 10pt; text-align: center">(Address of principal executive offices)</TD>
    <TD STYLE="font-size: 10pt; text-align: center">(Zip Code)</TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="width: 53%; font-size: 10pt">Registrant&rsquo;s telephone number, including area code:</TD>
    <TD STYLE="width: 47%; border-bottom: black 1.5pt solid; font-size: 10pt; font-weight: bold; text-align: center">(916) 403-2123</TD></TR>
<TR STYLE="vertical-align: top">
    <TD COLSPAN="2" STYLE="border-bottom: black 1.5pt solid; font-size: 10pt; text-align: center"><BR>
&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD COLSPAN="2" STYLE="font-size: 10pt; text-align: center">(Former name or former address, if changed since last report)</TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.25in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.25in; text-align: justify">Check the appropriate box below if the
Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions
(<I>see </I>General Instruction A.2. below):</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

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<TR STYLE="vertical-align: top">
    <TD STYLE="width: 4%; font: 10pt Wingdings 2">&pound;</TD>
    <TD STYLE="width: 96%; font-size: 10pt">Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="font: 10pt Wingdings 2">&pound;</TD>
    <TD STYLE="font-size: 10pt">Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="font: 10pt Wingdings 2">&pound;</TD>
    <TD STYLE="font-size: 10pt">Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="font: 10pt Wingdings 2">&pound;</TD>
    <TD STYLE="font-size: 10pt">Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))</TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" ALIGN="CENTER" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 96px; padding-top: 6pt; font-size: 10pt; font-weight: bold">Item 1.01.</TD>
    <TD STYLE="padding-top: 6pt; font-size: 10pt; font-weight: bold">Entry into a Material Definitive Agreement.</TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"><I>&nbsp;</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"><I>Underwritten Offering of Common Stock
and Warrants</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in; text-align: justify"><I>&nbsp;</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in; text-align: justify">On September 21, 2012, Pacific Ethanol,
Inc. (the &ldquo;Company&rdquo;) entered into an underwriting agreement (the &ldquo;Underwriting Agreement&rdquo;) with Lazard
Capital Markets LLC (the &ldquo;Underwriter&rdquo;), pursuant to which the Company agreed to sell to the Underwriter in a firm
commitment underwritten public offering an aggregate of 27,500,000 units (&ldquo;Units&rdquo;) to be sold to the Underwriter at
the closing of the offering, and up to 4,125,000 Units subject to an over-allotment option granted to the Underwriter exercisable
for a period of 30 days. Each Unit consists of (i) one share of common stock, $0.001 par value per share (&ldquo;Common Stock&rdquo;)
of the Company (collectively, the &ldquo;Common Shares&rdquo;) and (ii) one warrant (collectively, the &ldquo;Warrants&rdquo;)
to purchase one share of Common Stock for a term of three years (the shares of common stock underlying the Warrants are referred
to herein as the &ldquo;Warrant Shares&rdquo;). Each Unit shall be sold at a public offering price of $0.40 per Unit.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in; text-align: justify">The Common Shares, the Warrants and the
Warrant Shares are being issued and sold pursuant to an effective registration statement on Form S-3 (Registration No.&nbsp;333-180731)
(as amended and supplemented to date, the &ldquo;Registration Statement&rdquo;).</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in; text-align: justify">The Warrants will become exercisable immediately
upon issuance and will expire three years from the date of issuance. The exercise price of the Warrants is $0.59 per share of Common
Stock. The exercise price of the Warrants is subject to appropriate adjustment in the event of certain stock dividends and distributions,
stock splits, stock combinations, reclassifications or similar events affecting Common Stock and also upon any distributions of
assets, including cash, stock or other property to the Company&rsquo;s stockholders. </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in; text-align: justify">Holders of the Warrants will not have the
right to exercise any portion of the Warrants if the holder (together with its affiliates) would beneficially own in excess of
4.99% of the number of shares of Common Stock outstanding immediately after giving effect to the exercise. However, any holder
may increase or decrease such percentage to any other percentage not in excess of 9.99%, in either case at the option of the holder,
provided that, any increase will only be effective&nbsp;upon 61-days&rsquo; prior notice from the holder to the Company. The Company
does not plan to apply to list the Warrants on the NASDAQ Capital Market, any other national securities exchange or any other nationally
recognized trading system.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in; text-align: justify">The forgoing description is intended to
provide a summary of the material terms of the offering, the Underwriting Agreement and the Warrants.&nbsp;&nbsp;This summary is
qualified in its entirety by reference to the Underwriting Agreement and the form of Warrants, which are filed as Exhibits 1.1
and 10.1, respectively, to this Current Report on Form 8-K. Readers should review those documents for a complete understanding
of the terms and conditions associated with the offering. The Underwriting Agreement contains customary representations, warranties,
covenants and agreements by the Company, indemnification obligations of the Company and the Underwriter, including for liabilities
under the Securities Act of 1933, as amended, other obligations of the parties and termination provisions. The representations,
warranties and covenants contained in the Underwriting Agreement were made only for purposes of such agreement and as of specific
dates, were solely for the benefit of the parties to such agreement, and may be subject to limitations agreed upon by the contracting
parties.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in; text-align: justify">The offering is expected to close on September
26, 2012, subject to the satisfaction of customary closing conditions. The net proceeds to the Company from the offering are expected
to be approximately $10.1 million after deducting underwriting discounts and commissions and other estimated offering expenses
payable by us, and excluding any proceeds the Company may receive upon exercise of the Warrants to be issued in the offering. The
Company will use the net proceeds of the offering to prepay the outstanding amounts due and owing under certain outstanding senior
unsecured notes it issued in July 2012, or Notes, to the maximum extent possible. In the event the net proceeds of this offering
exceed the approximately $10.0 million in principal and interest due and owing under the Notes, the Company anticipates using
the remaining net proceeds of this offering for general corporate purposes, which may include, among other things, working capital
requirements, capital expenditures, acquisitions, and the repayment of outstanding indebtedness. Pending the application of the
net proceeds, the Company expects to invest the net proceeds in demand deposit accounts or short-term, investment-grade securities.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" ALIGN="CENTER" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 96px; font-size: 10pt; font-weight: bold">Item 7.01.</TD>
    <TD STYLE="font-size: 10pt; font-weight: bold">Regulation FD Disclosure.</TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in; text-align: justify">On September 20, 2012, the Company issued
a press release announcing that it intended to make the above-described public offering of securities. On September 21, 2012, the
Company issued a press release announcing the pricing and terms of the above-described offering. Copies of the two press releases
are attached hereto as Exhibits 99.1 and 99.2, respectively, and are each incorporated herein by reference.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" ALIGN="CENTER" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 96px; font-size: 10pt; font-weight: bold">Item 8.01.</TD>
    <TD STYLE="font-size: 10pt; font-weight: bold">Other Events.</TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in; text-align: justify">In connection with the offering discussed
in Item 1.01, the legal opinion letter of Troutman Sanders LLP, counsel to the Company, regarding the validity of the Common Shares,
the Warrants and the Warrant Shares is filed as Exhibit&nbsp;5.1 to this Current Report on Form&nbsp;8-K.&nbsp; The legal opinion
letter is also filed with reference to, and is hereby incorporated by reference into, the Registration Statement.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" ALIGN="CENTER" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 96px; font-size: 10pt; font-weight: bold">Item 9.01.</TD>
    <TD STYLE="font-size: 10pt; font-weight: bold">Financial Statements and Exhibits.</TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 14%; text-align: center">(a)</TD>
    <TD STYLE="width: 86%"><U>Financial statements of businesses acquired</U>.</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: center"></TD>
    <TD>Not applicable.</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: center">(b)</TD>
    <TD><U>Pro forma financial information</U>.</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: center"></TD>
    <TD>Not applicable.</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: center">(c)</TD>
    <TD><U>Shell company transactions</U>.</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: center"></TD>
    <TD>Not applicable.</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: center">(d)</TD>
    <TD><U>Exhibits</U>.</TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.75in; text-indent: -0.5in">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 14%; padding-top: 6pt">&nbsp;</TD>
    <TD STYLE="width: 11%; padding-top: 6pt">Number</TD>
    <TD STYLE="width: 75%; padding-top: 6pt; text-align: justify">Description</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: justify">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD>1.1</TD>
    <TD STYLE="text-align: justify">Underwriting Agreement by and between the Company and Lazard Capital Markets LLC dated as of September 21, 2012 (*)</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: justify">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD>5.1</TD>
    <TD STYLE="text-align: justify">Opinion of Troutman Sanders LLP (*)</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: justify">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD>10.1</TD>
    <TD STYLE="text-align: justify">Form of Warrants (*)</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: justify">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD>99.1</TD>
    <TD STYLE="text-align: justify">Press Release dated September 20, 2012 (*)</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: justify">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD>99.2</TD>
    <TD STYLE="text-align: justify">Press Release dated September 21, 2012 (*)</TD></TR>
</TABLE>
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    <TD STYLE="width: 4%; text-align: justify; font-size: 10pt">(*)</TD>
    <TD STYLE="width: 88%; text-align: justify; font-size: 10pt">Filed herewith. All of the agreements filed as exhibits to this report contain representations and warranties made by the parties thereto. The assertions embodied in such representations and warranties are not necessarily assertions of fact, but a mechanism for the parties to allocate risk.&nbsp;&nbsp;Accordingly, investors should not rely on the representations and warranties as characterizations of the actual state of facts or for any other purpose at the time they were made or otherwise.</TD></TR>
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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>SIGNATURES</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in; text-align: justify">Pursuant to the requirements of the Securities
Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.</P>

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    <TD STYLE="padding-top: 12pt">Date:&nbsp;&nbsp;September 21, 2012</TD>
    <TD COLSPAN="2" STYLE="padding-top: 12pt">PACIFIC ETHANOL, INC.</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD COLSPAN="2">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 51%">&nbsp;</TD>
    <TD STYLE="width: 4%">By:</TD>
    <TD STYLE="width: 45%; border-bottom: Black 1pt solid">/S/ CHRISTOPHER W. WRIGHT</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD COLSPAN="2">Christopher W. Wright</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD COLSPAN="2">Vice President, General Counsel &amp; Secretary</TD></TR>
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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>EXHIBITS FILED WITH THIS REPORT</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>&nbsp;</B></P>

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    <TD STYLE="width: 14%">&nbsp;</TD>
    <TD STYLE="width: 11%; padding-top: 6pt; text-decoration: underline">Number</TD>
    <TD STYLE="width: 75%; padding-top: 6pt; text-decoration: underline">Description</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD>1.1</TD>
    <TD STYLE="text-align: justify">Underwriting Agreement by and between the Company and Lazard Capital Markets LLC dated as of September 21, 2012</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD>5.1</TD>
    <TD>Opinion of Troutman Sanders LLP</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD>10.1</TD>
    <TD>Form of Warrants</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD>99.1</TD>
    <TD>Press Release dated September 20, 2012</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD>99.2</TD>
    <TD>Press Release dated September 21, 2012</TD></TR>
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<DESCRIPTION>UNDERWRITING AGREEMENT
<TEXT>
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<font style="FONT-WEIGHT: bold">Exhibit 1.1</font></div>

<div>&#160;&#160; </div>

<div style="LINE-HEIGHT: 1.25; TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold">27,500,000 Shares of Common Stock, par value $0.001</font></div>

<div style="LINE-HEIGHT: 1.25; TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>

<div style="LINE-HEIGHT: 1.25; TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="center"><FONT STYLE="font: 10pt Times New Roman"><B>Warrants
to Purchase 27,500,000 Shares of Common Stock</B></FONT></div>

<div style="LINE-HEIGHT: 1.25; TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>

<div style="LINE-HEIGHT: 1.25; TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold">and</font></div>

<div style="LINE-HEIGHT: 1.25; TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>

<div style="LINE-HEIGHT: 1.25; TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold">4,125,000 Additional Shares</font></div>

<div style="LINE-HEIGHT: 1.25; TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>

<div style="LINE-HEIGHT: 1.25; TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold">Additional  Warrants to Purchase 4,125,000 Shares of Common Stock</font></div>

<div style="LINE-HEIGHT: 1.25; TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>

<div style="LINE-HEIGHT: 1.25; TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="center"><FONT STYLE="font: 10pt Times New Roman"><B>PACIFIC
ETHANOL, INC.</B></FONT></div>

<div style="LINE-HEIGHT: 1.25; TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>

<div style="LINE-HEIGHT: 1.25; TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold"><font style="DISPLAY: inline; TEXT-DECORATION: underline">UNDERWRITING AGREEMENT</font></font></div>

<div style="LINE-HEIGHT: 1.25; TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>

<div style="LINE-HEIGHT: 1.25; TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">September 21, 2012</font></div>

<div style="LINE-HEIGHT: 1.25; TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>

<div style="LINE-HEIGHT: 1.25; TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">LAZARD CAPITAL MARKETS LLC</font></div>

<div style="LINE-HEIGHT: 1.25; TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">30 Rockefeller Plaza</font></div>

<div style="LINE-HEIGHT: 1.25; TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">New York, New York 10020</font></div>

<div style="LINE-HEIGHT: 1.25; TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;&#160; </div>

<div style="LINE-HEIGHT: 1.25; TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">Dear Sirs:</font></div>

<div style="LINE-HEIGHT: 1.25; TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;&#160; </div>

<div style="TEXT-ALIGN: justify; LINE-HEIGHT: 1.25; TEXT-INDENT: 0pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt"><FONT STYLE="font: normal small-caps 10pt times new roman">1.<FONT STYLE="letter-spacing: 9pt">&#160;&#160;&#160;</FONT></FONT><FONT STYLE="font-family: Times New Roman"><I>INTRODUCTION.<FONT STYLE="letter-spacing: 9pt">&#160;</FONT></I></FONT>Pacific
Ethanol, Inc., a Delaware corporation (the &#8220;<B>Company</B>&#8221;), proposes to issue and sell to Lazard Capital Markets
LLC (&#8220;<B>LCM</B>&#8221; or the &#8220;<B>Underwriter</B>&#8221;), pursuant to the terms and conditions of this Underwriting
Agreement (this &#8220;<B>Agreement</B>&#8221;), an aggregate of 27,500,000 units (the &#8220;<B>Firm Units</B>&#8221;).&#160;&#160;The
Company also proposes to issue and sell to the Underwriter not more than 4,125,000 additional units (the &#8220;<B>Additional
Units</B>&#8221; and, together with the Firm Units, the &#8220;<B>Units</B>&#8221;) if and to the extent that you, as Underwriter,
shall have determined to exercise your right to purchase such Additional Units granted to the Underwriter below and in <U>Section
2</U> hereof. <FONT STYLE="font: 10pt Times New Roman">Each Unit will consist of (i) one share of common stock, $0.001 par value
per share (the &#8220;<B>Common Stock</B>&#8221;) of the Company (collectively, the &#8220;<B>Shares</B>&#8221;), and (ii) one
warrant to purchase one share of Common Stock (each a &ldquo;<B>Warrant</B>&rdquo;, and collectively, the &#8220;<B>Warrants</B>&#8221;)
in the form attached hereto as <U>Exhibit A</U>. &#160;The Company hereby confirms that LCM is acting as the Underwriter in accordance
with the terms and conditions hereof.&#160;&#160;The Units will not be issued or certificated.&#160;&#160;The Shares and Warrants
contained in the Units are immediately separable and will be issued separately. The shares of Common Stock underlying the Warrants
are hereinafter referred to as the &#8220;<B>Warrant Shares</B>.&#8221;</FONT></div>

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<div style="LINE-HEIGHT: 1.25; TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;&#160; </div>

<div style="LINE-HEIGHT: 1.25; TEXT-INDENT: 36pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><FONT STYLE="font: 10pt Times New Roman">Each
Firm Unit will consist of (i) one share of Common Stock (collectively, the &#8220;<B>Firm</B> <B>Shares</B>&#8221;), and (ii)
one Warrant (collectively, the &#8220;<B>Firm Warrants</B>&#8221;) and together with the Firm Shares, the &#8220;<B>Firm Securities&#8221;</B>).<B>&#160;
</B>Each Additional Unit will consist of (i) one share of Common Stock (collectively, the &#8220;<B>Additional Shares</B>&#8221;),
and (ii) one additional Warrant (collectively, the &#8220;<B>Additional Warrants</B>&#8221; and together with the Additional Shares,
the &#8220;<B>Additional Securities</B>&#8221;).</FONT></div>

<div style="LINE-HEIGHT: 1.25; TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>

<div style="LINE-HEIGHT: 1.25; TEXT-INDENT: 36pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">The Underwriter may exercise its over-allotment purchase right in whole or from time to time in part by giving written notice not later than thirty (30) days after the date of this Agreement.&#160;&#160;Any exercise notice shall specify the number of Additional Units to be purchased by the Underwriter and the date on which such securities are to be purchased.&#160;&#160;Each purchase date must be at least one (1) business day after the written notice is given and may not be earlier than the closing date for the Firm Securities or later than ten business days after the date of such notice.&#160;&#160;The Additional Units may be purchased hereby solely for the purpose of covering over-allotments made in connection with the offering of the Firm Units.&#160;&#160;Each day, if any, that any Additional Units are to be purchased is hereinafter referred to as an &#8220;<font style="DISPLAY: inline; FONT-WEIGHT: bold">Option Closing Date</font>.&#8221;</font></div>

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<div style="LINE-HEIGHT: 1.25; TEXT-INDENT: 0pt; MARGIN-LEFT: 0pt"><FONT STYLE="font: normal small-caps 10pt Times New Roman">2.<FONT STYLE="letter-spacing: 9pt">&#160;&#160;&#160;</FONT></FONT><FONT STYLE="text-transform: uppercase"><I>Delivery
and Payment.</I></FONT> On the basis of the representations, warranties and agreements of the Company herein contained, and subject
to the terms and conditions set forth in this Agreement:</div>

<div style="LINE-HEIGHT: 1.25; TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>

<div style="TEXT-ALIGN: justify; LINE-HEIGHT: 1.25; TEXT-INDENT: 36pt; MARGIN-LEFT: 36pt; MARGIN-RIGHT: 0pt"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">2.1<font id="TAB2" style="LETTER-SPACING: 9pt">&#160;&#160;&#160;</font></font><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">The Company agrees to issue and sell, and the Underwriter agrees to purchase from the Company, an aggregate of 27,500,000 Firm Units. The purchase price per Unit to be paid by the Underwriter to the Company for the Firm Securities will be $.374332 per Unit (the &#8220;<font style="DISPLAY: inline; FONT-WEIGHT: bold">Purchase Price</font>&#8221;).&#160;&#160;The Company has been advised by you that you propose to make a public offering of the Firm Units (together with any Additional Units, the &#8220;<font style="DISPLAY: inline; FONT-WEIGHT: bold">Offering</font>&#8221;) as soon after this Agreement has become effective as in your judgment is advisable.&#160;&#160;The Company is further advised by you that the Firm Units are to be offered to the public initially at $0.40 per Unit.</font></div>

<div style="TEXT-ALIGN: justify; LINE-HEIGHT: 1.25; TEXT-INDENT: 36pt; DISPLAY: block; MARGIN-LEFT: 36pt; MARGIN-RIGHT: 0pt">&#160;</div>

<div style="TEXT-ALIGN: justify; LINE-HEIGHT: 1.25; TEXT-INDENT: 36pt; MARGIN-LEFT: 36pt; MARGIN-RIGHT: 0pt"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">2.2<font id="TAB2" style="LETTER-SPACING: 9pt">&#160;&#160;&#160;</font></font><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">Payment
of the Purchase Price for, and delivery of, the Firm Shares and Firm Warrants contained in the Firm Units shall be made at
the time and date of closing and delivery of the documents required to be delivered to the Underwriter pursuant to <font style="DISPLAY: inline; TEXT-DECORATION: underline">Sections
4</font> and <font style="DISPLAY: inline; TEXT-DECORATION: underline">6</font> hereof, which delivery shall take place at
11:00 A.M., New York time, on September 26, 2012 (the &#8220;<font style="DISPLAY: inline; FONT-WEIGHT: bold">Closing
Date</font>&#8221;) at the office of Troutman Sanders LLP, 5 Park Plaza, Suite 1400, Irvine, CA 92614 or at such other time
and date as the Underwriter and the Company determine pursuant to Rule 15c6-1(a) under the Securities Exchange Act of 1934,
as amended (the &#8220;<font style="DISPLAY: inline; FONT-WEIGHT: bold">Exchange Act</font>&#8221;). On the Closing Date, the
Company shall deliver the Firm Shares and Firm Warrants, which shall be registered in the name or names and shall be in such
denominations as the Underwriter may request at least one (1) business day before the Closing Date, to the Underwriter, which
delivery shall (a) with respect to the Firm Shares, be made through the facilities of the Depository Trust Company&#8217;s
DWAC system on the Closing Date, and (b) with respect to the Firm Warrants, be made by physical delivery to be received by
the Underwriter no later than one (1) business day following the Closing Date (<font style="FONT-STYLE: italic; DISPLAY: inline">provided,
however</font>, that such physical delivery date for Warrants for retail investors, if any, shall be within two (2) business
days following receipt by the Company, or its counsel, of a completed allocation and address list).</font></div>

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<div style="TEXT-ALIGN: justify; LINE-HEIGHT: 1.25; TEXT-INDENT: 36pt; MARGIN-LEFT: 36pt; MARGIN-RIGHT: 0pt"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">2.3<font id="TAB2" style="LETTER-SPACING: 9pt">&#160;&#160;&#160;</font></font><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">Payment of the Purchase Price for, and delivery of, any Additional Units shall be made at the Option Closing Date or at such other time and date as the Underwriter and the Company determine pursuant to Rule 15c6-1(a) under the Exchange Act. On the Option Closing Date, the Company shall deliver the Additional Shares and Additional Warrants, which shall be registered in the name or names and shall be in such denominations as the Underwriter may request at least one (1) business day before the Option Closing Date, to the Underwriter, which delivery shall (a) with respect to the Additional Shares, be made through the facilities of the Depository Trust Company's DWAC system on the Option Closing Date, and (b) with respect to the Additional Warrants, shall be made by physical delivery to be received by the Underwriter no later than one (1) business day following the Option Closing Date (provided however that such physical delivery date for Warrants for retail investors, if any, shall be within two (2) business days following receipt by the Company, or its counsel, of a completed allocation and address list).&#160;&#160;The Option Closing Date may be simultaneous with, but not earlier than, the Closing Date; and in the event that such time and date are simultaneous with the Closing Date, the term &#8220;Closing Date&#8221; shall refer to the time and date of delivery of the Firm Securities and Additional Securities.</font></div>

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<div style="LINE-HEIGHT: 1.25; TEXT-INDENT: 0pt; MARGIN-LEFT: 0pt"><FONT STYLE="font: normal small-caps 10pt Times New Roman">3.<FONT STYLE="letter-spacing: 9pt">&#160;&#160;&#160;</FONT></FONT><FONT STYLE="text-transform: uppercase"><I>Representations
And Warranties Of The Company.</I></FONT></div>

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<div style="TEXT-ALIGN: justify; LINE-HEIGHT: 1.25; TEXT-INDENT: 36pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">The Company represents and warrants to the Underwriter, and agrees with the Underwriter, that:</font></div>

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<div style="TEXT-ALIGN: justify; LINE-HEIGHT: 1.25; TEXT-INDENT: 72pt; MARGIN-LEFT: 36pt; MARGIN-RIGHT: 0pt"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">(a)<font id="TAB2" style="LETTER-SPACING: 9pt">&#160;&#160;&#160;</font></font><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">The Company has prepared and filed in conformity with the requirements of the Securities Act of 1933, as amended (the &#8220;<font style="DISPLAY: inline; FONT-WEIGHT: bold">Securities Act</font>&#8221;), and published rules and regulations thereunder (the &#8220;<font style="DISPLAY: inline; FONT-WEIGHT: bold">Rules and Regulations</font>&#8221;) adopted by the Securities and Exchange Commission (the &#8220;<font style="DISPLAY: inline; FONT-WEIGHT: bold">Commission</font>&#8221;) a &#8220;shelf&#8221; Registration Statement (as hereinafter defined) on Form S-3 (File No. 333-180731), which became effective as of May 17, 2012 (the &#8220;<font style="DISPLAY: inline; FONT-WEIGHT: bold">Effective Date</font>&#8221;), including a base prospectus relating to the Shares and Warrants (the &#8220;<font style="DISPLAY: inline; FONT-WEIGHT: bold">Base Prospectus</font>&#8221;), and such amendments and supplements thereto as may have been required to the date of this Agreement.&#160;&#160;The term &#8220;<font style="DISPLAY: inline; FONT-WEIGHT: bold">Registration Statement</font>&#8221; as used in this Agreement means the registration statement (including all exhibits, financial schedules and all documents and information deemed to be a part of the Registration Statement pursuant to Rule 430A and 430B of the Rules and Regulations), as amended and/or supplemented to the date of this Agreement, including the Base Prospectus.&#160;&#160;The Registration Statement is effective under the Securities Act and no stop order preventing or suspending the effectiveness of the Registration Statement or suspending or preventing the use of the Prospectus has been issued by the Commission and no proceedings for that purpose have been instituted or, to the knowledge of the Company, are threatened by the Commission.&#160;&#160;The Company, if required by the Rules and Regulations of the Commission, will file the Prospectus (as defined below), with the Commission pursuant to Rule 424(b) of the Rules and Regulations. The term &#8220;<font style="DISPLAY: inline; FONT-WEIGHT: bold">Prospectus</font>&#8221; as used in this Agreement means the Prospectus, in the form in which it is to be filed with the Commission pursuant to Rule 424(b) of the Rules and Regulations, or, if the Prospectus is not to be filed with the Commission pursuant to Rule 424(b), the Prospectus in the form included as part of the Registration Statement as of the Effective Date, except that if any revised prospectus or prospectus supplement shall be provided to the Underwriter by the Company for use in connection with the Offering which differs from the Prospectus (whether or not such revised prospectus or prospectus supplement is required to be filed by the Company pursuant to Rule 424(b) of the Rules and Regulations), the term &#8220;<font style="DISPLAY: inline; FONT-WEIGHT: bold">Prospectus</font>&#8221; shall refer to such revised prospectus or prospectus supplement, as the case may be, from and after the time it is first provided to the&#160;&#160;Underwriter for such use (or in the form first made available to the Underwriter by the Company to meet requests of prospective purchasers pursuant to Rule 173 of the Rules and Regulations). Any preliminary prospectus or prospectus subject to completion included in the Registration Statement or filed with the Commission pursuant to Rule 424 of the Rules and Regulations is hereafter called a &#8220;<font style="DISPLAY: inline; FONT-WEIGHT: bold">Preliminary Prospectus.</font>&#8221;&#160;&#160;Any reference herein to the Registration Statement, any Preliminary Prospectus or the Prospectus shall be deemed to refer to and include the documents incorporated by reference therein pursuant to Item 12 of Form S-3 which were filed under the Exchange Act, on or before the last to occur of the Effective Date, the date of the Preliminary Prospectus, or the date of the Prospectus, and any reference herein to the terms &#8220;amend,&#8221; &#8220;amendment,&#8221; or &#8220;supplement&#8221; with respect to the Registration Statement, any Preliminary Prospectus or the Prospectus shall be deemed to refer to and include (i) the filing of any document under the Exchange Act after the Effective Date, the date of such Preliminary Prospectus or the date of the Prospectus, as the case may be, which is incorporated by reference and (ii) any such document so filed. If the Company has filed an abbreviated registration statement to register additional securities pursuant to Rule 462(b) of the Rules and Regulations (the &#8220;<font style="DISPLAY: inline; FONT-WEIGHT: bold">462(b) Registration Statement</font>&#8221;), then any reference herein to the Registration Statement shall also be deemed to include such 462(b) Registration Statement.</font></div>

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<div style="TEXT-ALIGN: justify; LINE-HEIGHT: 1.25; TEXT-INDENT: 72pt; MARGIN-LEFT: 36pt; MARGIN-RIGHT: 0pt"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">(b)<font id="TAB2" style="LETTER-SPACING: 9pt">&#160;&#160;&#160;</font></font><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">As of the Applicable Time (as defined below) and as of the Closing Date and any Option Closing Date, neither (i) any General Use Free Writing Prospectus (as defined below) issued at or prior to the Applicable Time, and the Pricing Prospectus (as defined below) and the information included on <font style="DISPLAY: inline; TEXT-DECORATION: underline">Schedule </font><font style="DISPLAY: inline; TEXT-DECORATION: underline">A</font> hereto, all considered together (collectively, the &#8220;<font style="DISPLAY: inline; FONT-WEIGHT: bold">General Disclosure Package</font>&#8221;), (ii) any individual Limited Use Free Writing Prospectus (as defined below), nor (iii) the bona fide electronic road show (as defined in Rule 433(h)(5) of the Rules and Regulations), if any, that has been made available without restriction to any person, when considered together with the General Disclosure Package, included or will include, any untrue statement of a material fact or omitted or as of the Closing Date or any Option Closing Date will omit, to state a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading; <font style="FONT-STYLE: italic; DISPLAY: inline">provided, however</font>, that the Company makes no representations or warranties as to information contained in or omitted from any Issuer Free Writing Prospectus, in reliance upon, and in conformity with, written information furnished to the Company by the Underwriter specifically for inclusion therein, which information the parties hereto agree is limited to the&#160;&#160;Underwriter&#8217;s Information (as defined in <font style="DISPLAY: inline; TEXT-DECORATION: underline">Section 16</font>).&#160;&#160;As used in this <font style="DISPLAY: inline; TEXT-DECORATION: underline">paragraph (b)</font> and elsewhere in this Agreement:</font></div>

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<div style="LINE-HEIGHT: 1.25; TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 36pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">&#8220;<font style="FONT-STYLE: italic; DISPLAY: inline; FONT-WEIGHT: bold">Applicable Time</font>&#8221; means 8:00 A.M., New York time, on the date of this Agreement.</font></div>

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<div style="LINE-HEIGHT: 1.25; TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 36pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">&#8220;<font style="FONT-STYLE: italic; DISPLAY: inline; FONT-WEIGHT: bold">General Use Free Writing Prospectus</font>&#8221; means any Issuer Free Writing Prospectus that is identified on <font style="DISPLAY: inline; TEXT-DECORATION: underline">Schedule </font><font style="DISPLAY: inline; TEXT-DECORATION: underline">A</font> to this Agreement.</font></div>

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<div style="LINE-HEIGHT: 1.25; TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 36pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">&#8220;<font style="FONT-STYLE: italic; DISPLAY: inline; FONT-WEIGHT: bold">Issuer Free Writing Prospectus</font>&#8221; means any &#8220;<font style="DISPLAY: inline; FONT-WEIGHT: bold">issuer free writing prospectus,</font>&#8221; as defined in Rule 433 of the Rules and Regulations relating to the Shares and Warrants in the form filed or required to be filed with the Commission or, if not required to be filed, in the form retained in the Company&#8217;s records pursuant to Rule 433(g) of the Rules and Regulations.</font></div>

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<div style="LINE-HEIGHT: 1.25; TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 36pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">&#8220;<font style="FONT-STYLE: italic; DISPLAY: inline; FONT-WEIGHT: bold">Limited Use Free Writing Prospectuses</font>&#8221; means any Issuer Free Writing Prospectus that is not a General Use Free Writing Prospectus.</font></div>

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<div style="LINE-HEIGHT: 1.25; TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 36pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">&#8220;<font style="FONT-STYLE: italic; DISPLAY: inline; FONT-WEIGHT: bold">Pricing Prospectus</font>&#8221; means the Preliminary Prospectus, if any, and the Base Prospectus, each as amended and supplemented immediately prior to the Applicable Time, including any document incorporated by reference therein and any prospectus supplement deemed to be a part thereof.</font></div>

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<div style="TEXT-ALIGN: justify; LINE-HEIGHT: 1.25; TEXT-INDENT: 72pt; MARGIN-LEFT: 36pt; MARGIN-RIGHT: 0pt"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">(c)<font id="TAB2" style="LETTER-SPACING: 9pt">&#160;&#160;&#160;</font></font><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">No order preventing or suspending the use of any Issuer Free Writing Prospectus or the Prospectus relating to the Offering has been issued by the Commission, and no proceeding for that purpose or pursuant to Section 7A of the Securities Act has been instituted or to the knowledge of the Company threatened by the Commission.</font></div>

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<div style="TEXT-ALIGN: justify; LINE-HEIGHT: 1.25; TEXT-INDENT: 72pt; MARGIN-LEFT: 36pt; MARGIN-RIGHT: 0pt"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">(d)<font id="TAB2" style="LETTER-SPACING: 9pt">&#160;&#160;&#160;</font></font><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">At the time the Registration Statement most recently became effective, at the date of this Agreement and at the Closing Date and any Option Closing Date, the Registration Statement conformed and will conform in all material respects to the requirements of the Securities Act and the Rules and Regulations and did not and will not contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein not misleading; each Preliminary Prospectus (if any), at the time of filing thereof, conformed in all material respects to the requirements of the Securities Act and the Rules and Regulations, and did not contain an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading; the Prospectus, at the time the Prospectus was issued and at the Closing Date and any Option Closing Date, conformed and will conform in all material respects to the requirements of the Securities Act and the Rules and Regulations and did not and will not contain an untrue statement of a material fact or omit to state a material fact necessary in order to make the statements therein, in light of the circumstances under which they were made, not misleading; <font style="FONT-STYLE: italic; DISPLAY: inline">provided, however</font>, that the foregoing representations and warranties in this <font style="DISPLAY: inline; TEXT-DECORATION: underline">paragraph (d)</font> shall not apply to information contained in or omitted from the Registration Statement, any Preliminary Prospectus or the Prospectus in reliance upon, and in conformity with, written information furnished to the Company by the Underwriter specifically for inclusion therein, which information the parties hereto agree is limited to the&#160;&#160;Underwriter&#8217;s Information (as defined in <font style="DISPLAY: inline; TEXT-DECORATION: underline">Section 16</font>).</font></div>

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<div style="TEXT-ALIGN: justify; LINE-HEIGHT: 1.25; TEXT-INDENT: 72pt; MARGIN-LEFT: 36pt; MARGIN-RIGHT: 0pt"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">(e)<font id="TAB2" style="LETTER-SPACING: 9pt">&#160;&#160;&#160;</font></font><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">Each Issuer Free Writing Prospectus, if any, as of its issue date and at all subsequent times through the completion of the Offering or until any earlier date that the Company notified or notifies the Underwriter as described in <font style="DISPLAY: inline; TEXT-DECORATION: underline">Section 4(e)</font>, did not, does not and will not include any information that conflicted, conflicts or will conflict with the information contained in the Registration Statement, Pricing Prospectus or the Prospectus, including any document incorporated by reference therein and any prospectus supplement deemed to be a part thereof that has not been superseded or modified, or includes an untrue statement of a material fact or omitted or would omit to state a material fact required to be stated therein or necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading.&#160;&#160;The foregoing sentence does not apply to statements in or omissions from any of the foregoing in reliance upon, and in conformity with, written information furnished to the Company by the Underwriter specifically for inclusion therein, which information the parties hereto agree is limited to the Underwriter&#8217;s Information (as defined in <font style="DISPLAY: inline; TEXT-DECORATION: underline">Section 16</font>).</font></div>

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<div style="TEXT-ALIGN: justify; LINE-HEIGHT: 1.25; TEXT-INDENT: 72pt; MARGIN-LEFT: 36pt; MARGIN-RIGHT: 0pt"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">(f)<font id="TAB2" style="LETTER-SPACING: 9pt">&#160;&#160;&#160;</font></font><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">The documents incorporated by reference in the Prospectus, when they became effective or were filed with the Commission, as the case may be, conformed in all material respects to the requirements of the Securities Act or the Exchange Act, as applicable, and the rules and regulations of the Commission thereunder and none of such documents contained any untrue statement of a material fact or omitted to state any material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading; and any further documents so filed and incorporated by reference in the Prospectus, when such documents become effective or are filed with the Commission, as the case may be, will conform in all material respects to the requirements of the Securities Act or the Exchange Act, as applicable, and the rules and regulations of the Commission thereunder and will not contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading.</font></div>

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<div style="TEXT-ALIGN: justify; LINE-HEIGHT: 1.25; TEXT-INDENT: 72pt; MARGIN-LEFT: 36pt; MARGIN-RIGHT: 0pt"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">(g)<font id="TAB2" style="LETTER-SPACING: 9pt">&#160;&#160;&#160;</font></font><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">The Company is not an &#8220;ineligible issuer&#8221; in connection with the Offering pursuant to Rules 164, 405 and 433 under the Securities Act.&#160;&#160;The Company has not, directly or indirectly, distributed and will not distribute any offering material in connection with the Offering other than any Preliminary Prospectus, the Prospectus and other materials, if any, permitted under the Securities Act and consistent with <font style="DISPLAY: inline; TEXT-DECORATION: underline">Section 4(b)</font> below.&#160;&#160;The Company will file with the Commission all Issuer Free Writing Prospectuses (other than a &#8220;road show,&#8221; as described in Rule 433(d)(8) of the Rules and Regulations), if any, in the time and manner required under Rules 163(b)(2) and 433(d) of the Rules and Regulations.</font></div>

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<div style="TEXT-ALIGN: justify; LINE-HEIGHT: 1.25; TEXT-INDENT: 72pt; MARGIN-LEFT: 36pt; MARGIN-RIGHT: 0pt"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">(h)<font id="TAB2" style="LETTER-SPACING: 9pt">&#160;&#160;&#160;</font></font><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">The Company and each of its subsidiaries (as defined in <font style="DISPLAY: inline; TEXT-DECORATION: underline">Section 144</font>) have been duly organized and are validly existing as corporations or other legal entities in good standing (or the foreign equivalent thereof) under the laws of their respective jurisdictions of incorporation or organization, as applicable.&#160;&#160;The Company and each of its subsidiaries are duly qualified to do business and are in good standing or validly existing, as the case may be, as foreign corporations or other legal entities in each jurisdiction in which their respective ownership or lease of property or the conduct of their respective businesses requires such qualification and have all power and authority (corporate or other) necessary to own or hold their respective properties and to conduct the businesses in which they are engaged, except where the failure to so qualify or have such power or authority would not (i) have, singly or in the aggregate, a material adverse effect on the condition (financial or otherwise), results of operations, assets, properties, business or prospects of the Company and its subsidiaries taken as a whole, or (ii) impair in any material respect the ability of the Company to perform its obligations under this Agreement or to consummate any transactions contemplated by this Agreement, the General Disclosure Package or the Prospectus (any such effect as described in clauses (i) or (ii), a &#8220;<font style="DISPLAY: inline; FONT-WEIGHT: bold">Material Adverse Effect</font>&#8221;).&#160;&#160;The Company owns or controls, directly or indirectly, only the following corporations, partnerships, limited liability partnerships, limited liability companies, associations or other entities: Pacific Ethanol California, Inc., a California corporation, Kinergy Marketing, LLC, an Oregon limited liability company, Pacific Ag. Products, LLC, a California limited liability company, Pacific Ethanol Management Services Cor., a Delaware corporation, and Pacific Ethanol Development, LLC, a Delaware limited liability company.</font></div>

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<div style="TEXT-ALIGN: justify; LINE-HEIGHT: 1.25; TEXT-INDENT: 72pt; MARGIN-LEFT: 36pt; MARGIN-RIGHT: 0pt"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">(i)<font id="TAB2" style="LETTER-SPACING: 9pt">&#160;&#160;&#160;</font></font><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">The Company has the full right, power and authority to enter into this Agreement and the Warrants, and to perform and to discharge its obligations hereunder and thereunder; and each of this Agreement and the Warrants have been duly authorized, executed and delivered by the Company, and constitutes a valid and binding obligation of the Company enforceable in accordance with its terms.</font></div>

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<div style="TEXT-ALIGN: justify; LINE-HEIGHT: 1.25; TEXT-INDENT: 72pt; MARGIN-LEFT: 36pt; MARGIN-RIGHT: 0pt"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">(j)<font id="TAB2" style="LETTER-SPACING: 9pt">&#160;&#160;&#160;</font></font><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">The Shares to be issued and sold by the Company to the Underwriter hereunder have been duly and validly authorized and, when issued and delivered by the Company against payment therefor as provided herein, will be duly and validly issued, fully paid and nonassessable and free of any preemptive rights, rights of first refusal, registration rights or similar rights and will conform to the description thereof contained in the General Disclosure Package and the Prospectus.&#160;&#160;The Warrant Shares have been duly and validly authorized and reserved for issuance pursuant to the terms of the Warrants, and when issued by the Company upon valid exercise of the Warrants and payment of the exercise price, will be duly and validly issued, fully paid and nonassessable and free of any preemptive rights, rights of first refusal, registration rights or similar rights and will conform to the description thereof contained in the General Disclosure Package and the Prospectus.</font></div>

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<div style="TEXT-ALIGN: justify; LINE-HEIGHT: 1.25; TEXT-INDENT: 72pt; MARGIN-LEFT: 36pt; MARGIN-RIGHT: 0pt"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">(k)<font id="TAB2" style="LETTER-SPACING: 9pt">&#160;&#160;&#160;</font></font><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">The
Company has an authorized capitalization as set forth in the Pricing Prospectus, and all of the issued shares of capital
stock of the Company have been duly and validly authorized and issued, are fully paid and non-assessable, have been issued in
compliance with United States federal and state securities laws, and conform to the description thereof contained in the
General Disclosure Package and the Prospectus.&#160;&#160;As of September 20, 2012, there were 117,160,897 shares of
Common Stock, par value $0.001 per share, issued and outstanding, no shares of Series A preferred stock, par value $0.001 per
share, of the Company issued and outstanding and 926,942 shares of Series B Preferred Stock, par value $0.001 per share, of
the Company issued and outstanding, and 54,191,750 shares of Common Stock were issuable upon the exercise of all options,
warrants and convertible securities outstanding as of such date. Since such date, the Company has not issued any securities,
other than Common Stock of the Company issued pursuant to the exercise of stock options previously outstanding under the
Company&#8217;s stock option plans or the issuance of restricted Common Stock pursuant to employee stock purchase
plans.&#160;&#160;All of the Company&#8217;s options, warrants and other rights to purchase or exchange any securities for
shares of the Company&#8217;s capital stock have been duly authorized and validly issued and were issued in compliance with
United States federal and state securities laws.&#160;&#160;None of the outstanding shares of Common Stock was issued in
violation of any preemptive rights, rights of first refusal or other similar rights to subscribe for or purchase securities
of the Company.&#160;&#160;The description of the Company&#8217;s stock option, stock bonus and other stock plans or
arrangements, and the options or other rights granted thereunder, as described in the General Disclosure Package and the
Prospectus, accurately and fairly present the information required to be shown with respect to such plans, arrangements,
options and rights.</font></div>

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<div style="TEXT-ALIGN: justify; LINE-HEIGHT: 1.25; TEXT-INDENT: 72pt; MARGIN-LEFT: 36pt; MARGIN-RIGHT: 0pt"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">(l)<font id="TAB2" style="LETTER-SPACING: 9pt">&#160;&#160;&#160;</font></font><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">All the outstanding shares of capital stock or other equity interests of each subsidiary of the Company have been duly authorized and validly issued, are fully paid and nonassessable and, except to the extent set forth in the General Disclosure Package and the Prospectus, are owned by the Company directly or indirectly through one or more wholly-owned subsidiaries, free and clear of any claim, lien, encumbrance, security interest, restriction upon voting or transfer or any other claim of any third party.</font></div>

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<div style="TEXT-ALIGN: justify; LINE-HEIGHT: 1.25; TEXT-INDENT: 72pt; MARGIN-LEFT: 36pt; MARGIN-RIGHT: 0pt"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">(m)<font id="TAB2" style="LETTER-SPACING: 9pt">&#160;&#160;&#160;</font></font><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">The execution, delivery and performance of this Agreement and the Warrants by the Company, the issuance and sale of the Shares and Warrants by the Company and the consummation of the transactions contemplated hereby and thereby will not (with or without notice or lapse of time or both) conflict with or result in a breach or violation of any of the terms or provisions of, constitute a default or Debt Repayment Triggering Event (as defined below) under, give rise to any right of termination or other right or the cancellation or acceleration of any right or obligation or loss of a benefit under, or give rise to the creation or imposition of any lien, encumbrance, security interest, claim or charge upon any property or assets of the Company or any subsidiary pursuant to, any indenture, mortgage, deed of trust, loan agreement or other agreement or instrument to which the Company or any of its subsidiaries is a party or by which the Company or any of its subsidiaries is bound or to which any of the property or assets of the Company or any of its subsidiaries is subject, nor will such actions result in any violation of the provisions of the certificate of incorporation or by-laws (or analogous governing instruments, as applicable) of the Company or any of its subsidiaries or any law, statute, rule, regulation, judgment, order or decree of any court or governmental agency or body, domestic or foreign, having jurisdiction over the Company or any of its subsidiaries or any of their properties or assets.&#160;&#160;A &#8220;<font style="DISPLAY: inline; FONT-WEIGHT: bold">Debt Repayment Triggering Event</font>&#8221; means any event or condition that gives, or with the giving of notice or lapse of time would give the holder of any note, debenture or other evidence of indebtedness (or any person acting on such holder&#8217;s behalf) the right to require the repurchase, redemption or repayment of all or a portion of such indebtedness by the Company or any of its subsidiaries.</font></div>

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<div style="TEXT-ALIGN: justify; LINE-HEIGHT: 1.25; TEXT-INDENT: 72pt; MARGIN-LEFT: 36pt; MARGIN-RIGHT: 0pt"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">(n)<font id="TAB2" style="LETTER-SPACING: 9pt">&#160;&#160;&#160;</font></font><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">Except for the registration of the Shares, the Warrants and the Warrant Shares under the Securities Act, and such consents, approvals, authorizations, registrations or qualifications as may be required under the Exchange Act and applicable state or foreign securities laws, the Financial Industry Regulatory Authority (&#8220;<font style="DISPLAY: inline; FONT-WEIGHT: bold">FINRA</font>&#8221;)&#160;&#160;and the NASDAQ Capital Market (&#8220;<font style="DISPLAY: inline; FONT-WEIGHT: bold">NASDAQ CM</font>&#8221;) in connection with the Offering and the listing of the Common Stock on the NASDAQ CM, no consent, approval, authorization or order of, or filing, qualification or registration (each an &#8220;<font style="DISPLAY: inline; FONT-WEIGHT: bold">Authorization</font>&#8221;) with, any court, governmental or non-governmental agency or body, foreign or domestic, which has not been made, obtained or taken and is not in full force and effect, is required for the execution, delivery and performance of this Agreement and the Warrants by the Company, the offer or sale of the Shares and Warrants or the consummation of the transactions contemplated hereby or thereby; and no event has occurred that allows or results in, or after notice or lapse of time or both would allow or result in, revocation, suspension, termination or invalidation of any such Authorization or any other impairment of the rights of the holder or maker of any such Authorization.&#160;&#160;All corporate approvals (including those of stockholders) necessary for the Company to consummate the transactions contemplated by this Agreement have been obtained and are in effect.</font></div>

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<div style="TEXT-ALIGN: justify; LINE-HEIGHT: 1.25; TEXT-INDENT: 72pt; MARGIN-LEFT: 36pt; MARGIN-RIGHT: 0pt"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">(o)<font id="TAB2" style="LETTER-SPACING: 9pt">&#160;&#160;&#160;</font></font><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">Hein &amp; Associates LLP, who have certified certain financial statements and related schedules included or incorporated by reference in the Registration Statement, the General Disclosure Package and the Prospectus, is an independent registered public accounting firm as required by the Securities Act and the Rules and Regulations and the Public Company Accounting Oversight Board (United States) (the &#8220;<font style="DISPLAY: inline; FONT-WEIGHT: bold">PCAOB</font>&#8221;).&#160;&#160;Except as disclosed in the Registration Statement and as pre-approved in accordance with the requirements set forth in Section 10A of the Exchange Act, Hein &amp; Associates LLP has not been engaged by the Company to perform any &#8220;prohibited activities&#8221; (as defined in Section 10A of the Exchange Act).</font></div>

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<div style="TEXT-ALIGN: justify; LINE-HEIGHT: 1.25; TEXT-INDENT: 72pt; MARGIN-LEFT: 36pt; MARGIN-RIGHT: 0pt"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">(p)<font id="TAB2" style="LETTER-SPACING: 9pt">&#160;&#160;&#160;</font></font><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">The Company&#8217;s financial statements, together with the related notes and schedules, included or incorporated by reference in the General Disclosure Package, the Prospectus and in the Registration Statement fairly present the financial position and the results of operations and changes in financial position of the Company and its consolidated subsidiaries and other consolidated entities at the respective dates or for the respective periods therein specified.&#160;&#160;Such statements and related notes and schedules have been prepared in accordance with the generally accepted accounting principles in the United States (&#8220;<font style="DISPLAY: inline; FONT-WEIGHT: bold">GAAP</font>&#8221;) applied on a consistent basis throughout the periods involved except as may be set forth in the related notes included or incorporated by reference in the General Disclosure Package.&#160;&#160;The Company&#8217;s financial statements, together with the related notes and schedules, included or incorporated by reference in the General Disclosure Package and the Prospectus comply in all material respects with the Securities Act, the Exchange Act, and the Rules and Regulations and the rules and regulations under the Exchange Act.&#160;&#160;No other financial statements or supporting schedules or exhibits are required by the Securities Act or the Rules and Regulations to be described, or included or incorporated by reference in the Registration Statement, the General Disclosure Package or the Prospectus.&#160;&#160;There is no pro forma or as adjusted financial information which is required to be included in the Registration Statement, the General Disclosure Package, or and the Prospectus or a document incorporated by reference therein in accordance with the Securities Act and the Rules and Regulations, which has not been included or incorporated as so required.&#160;&#160;The summary and selected financial data included or incorporated by reference in the General Disclosure Package, the Prospectus and each Registration Statement fairly present the information shown therein as at their respective dates and for the respective periods specified and are derived from the consolidated financial statements set forth or incorporated by reference in the Registration Statement, the Pricing Prospectus and the Prospectus and other financial information.&#160;&#160;All information contained in the Registration Statement, the General Disclosure Package and the Prospectus regarding &#8220;non-GAAP financial measures&#8221; (as defined in Regulation G) complies with Regulation G and Item 10 of Regulation S-K, to the extent applicable.</font></div>

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<div style="TEXT-ALIGN: justify; LINE-HEIGHT: 1.25; TEXT-INDENT: 72pt; MARGIN-LEFT: 36pt; MARGIN-RIGHT: 0pt"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">(q)<font id="TAB2" style="LETTER-SPACING: 9pt">&#160;&#160;&#160;</font></font><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">Neither the Company nor any of its subsidiaries has sustained, since the date of the latest audited financial statements included or incorporated by reference in the General Disclosure Package, any material loss or interference with its business from fire, explosion, flood or other calamity, whether or not covered by insurance, or from any labor dispute or court or governmental action, order or decree, otherwise than as set forth or contemplated in the General Disclosure Package; and, since such date, there has not been any change in the capital stock or long-term debt of the Company or any of its subsidiaries, or any material adverse change, or any development involving a prospective material adverse change, in or affecting the business, assets, general affairs, management, financial position, prospects, stockholders&#8217; equity or results of operations of the Company and its subsidiaries taken as a whole, otherwise than as set forth or contemplated in the General Disclosure Package.</font></div>

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<div style="TEXT-ALIGN: justify; LINE-HEIGHT: 1.25; TEXT-INDENT: 72pt; MARGIN-LEFT: 36pt; MARGIN-RIGHT: 0pt"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">(r)<font id="TAB2" style="LETTER-SPACING: 9pt">&#160;&#160;&#160;</font></font><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">There is no legal or governmental action, suit, claim or proceeding pending to which the Company or any of its subsidiaries is a party or of which any property or assets of the Company or any of its subsidiaries is the subject, which is required to be described in the Registration Statement, the General Disclosure Package or the Prospectus or a document incorporated by reference therein and is not described therein, or which, singly or in the aggregate, if determined adversely to the Company or any of its subsidiaries, could have a Material Adverse Effect or prevent the consummation of the transactions contemplated hereby; and to the Company&#8217;s knowledge, no such proceedings are threatened or contemplated by governmental authorities or threatened by others.</font></div>

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<div style="TEXT-ALIGN: justify; LINE-HEIGHT: 1.25; TEXT-INDENT: 72pt; MARGIN-LEFT: 36pt; MARGIN-RIGHT: 0pt"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">(s)<font id="TAB2" style="LETTER-SPACING: 9pt">&#160;&#160;&#160;</font></font><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">Except as described in the General Disclosure Package, neither the Company nor any of its subsidiaries (i) is in violation of its certificate of incorporation or by-laws (or analogous governing instrument, as applicable), (ii) is in default in any respect, and no event has occurred which, with notice or lapse of time or both, would constitute such a default, in the due performance or observance of any term, covenant or condition contained in any indenture, mortgage, deed of trust, loan agreement, lease or other agreement or instrument to which it is a party or by which it is bound or to which any of its property or assets is subject or (iii) is in violation in any respect of any law, ordinance, governmental rule, regulation or court order, decree or judgment to which it or its property or assets may be subject except, in the case of clauses (ii) and (iii) of this paragraph (s), for any violations or defaults which, singly or in the aggregate, would not have a Material Adverse Effect.</font></div>

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<div style="TEXT-ALIGN: justify; LINE-HEIGHT: 1.25; TEXT-INDENT: 72pt; MARGIN-LEFT: 36pt; MARGIN-RIGHT: 0pt"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">(t)<font id="TAB2" style="LETTER-SPACING: 9pt">&#160;&#160;&#160;</font></font><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">The Company and each of its subsidiaries possess all licenses, certificates, authorizations and permits issued by, and have made all declarations and filings with, the appropriate local, state, federal or foreign regulatory agencies or bodies which are necessary or desirable for the ownership of their respective properties or the conduct of their respective businesses as described in the General Disclosure Package and the Prospectus (collectively, the &#8220;<font style="DISPLAY: inline; FONT-WEIGHT: bold">Governmental Permits</font>&#8221;) except where any failures to possess or make the same, singly or in the aggregate, would not have a Material Adverse Effect.&#160;&#160;The Company and its subsidiaries are in compliance with all such Governmental Permits; all such Governmental Permits are valid and in full force and effect, except where the validity or failure to be in full force and effect would not, singly or in the aggregate, have a Material Adverse Effect.&#160;&#160;All such Governmental Permits are free and clear of any restriction or condition that are in addition to, or materially different from those normally applicable to similar licenses, certificates, authorizations and permits.&#160;&#160;Neither the Company nor any subsidiary has received notification of any revocation, modification, suspension, termination or invalidation (or proceedings related thereto) of any such Governmental Permit and to the knowledge of the Company, no event has occurred that allows or results in, or after notice or lapse of time or both would allow or result in, revocation, modification, suspension, termination or invalidation (or proceedings related thereto) of any such Governmental Permit and the Company has no reason to believe that any such Governmental Permit will not be renewed; and the Company and its subsidiaries are members in good standing of each federal, state or foreign exchange, board of trade, clearing house or association and self-regulatory or similar organization, in each case as necessary to conduct their respective businesses as described in the General Disclosure Package and the Prospectus.</font></div>

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<div style="TEXT-ALIGN: justify; LINE-HEIGHT: 1.25; TEXT-INDENT: 72pt; MARGIN-LEFT: 36pt; MARGIN-RIGHT: 0pt"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">(u)<font id="TAB2" style="LETTER-SPACING: 9pt">&#160;&#160;&#160;</font></font><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">Neither the Company nor any of its subsidiaries is or, after giving effect to the Offering and the application of the proceeds thereof as described in the General Disclosure Package and the Prospectus, will become an &#8220;investment company&#8221; within the meaning of the Investment Company Act of 1940, as amended, and the rules and regulations of the Commission thereunder.</font></div>

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<div style="TEXT-ALIGN: justify; LINE-HEIGHT: 1.25; TEXT-INDENT: 72pt; MARGIN-LEFT: 36pt; MARGIN-RIGHT: 0pt"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">(w)<font id="TAB2" style="LETTER-SPACING: 9pt">&#160;&#160;&#160;</font></font><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">The Company and its subsidiaries own or possess legally enforceable rights from all necessary third parties (the &#8220;<font style="DISPLAY: inline; FONT-WEIGHT: bold">Licensors</font>&#8221;) to use all patents, trademarks, trademark registrations, service marks, service mark registrations, trade names, copyrights, licenses, inventions, trade secrets, know-how and other intellectual property rights necessary for the conduct of its business described in the General Disclosure Package and the Prospectus, and the Company is not aware of any claim to the contrary or any challenge by any other person to the rights of the Company or its subsidiaries with respect to the foregoing.&#160;&#160;Except where such failure to make the same would not, singly or in the aggregate, have a Material Adverse Effect, the Company or its subsidiaries is listed in the records of the appropriate United States, state, or foreign registry as the sole current owner of record for each intellectual property registration and application for registration owned by the Company or its subsidiaries, respectively, except for such intellectual property applications as have been filed in the name of employees who are contractually obligated to assign all of their rights in and to such intellectual property applications to the Company, and all such applications and registrations have been duly maintained, are subsisting, in full force and effect, have not been cancelled, expired, or abandoned.&#160;&#160;Neither the Company nor its subsidiaries has received written notification of any revocation or modification of any registered intellectual property right, or has any reason to believe that any renewable registered intellectual property right will not be renewed, other than any revocation, modification or failure to renew that would not, singly or in the aggregate, have a Material Adverse Effect.&#160;&#160;The business of the Company and its subsidiaries as now conducted, and as proposed to be conducted as described in the General Disclosure Package and the Prospectus, does not and will not infringe or conflict with any patents, trademarks, service marks, trade names, copyrights, trade secrets, licenses, know-how or other intellectual property right or franchise right of any person, except where such infringement would not, singly or in the aggregate, have a Material Adverse Effect. There are no oppositions, cancellations, invalidity proceedings, re-examination proceedings, suits, arbitrations, or threatened claims pending or for which notice has been provided or, to the knowledge of Company, threatened, challenging the Company's or its subsidiaries&#8217; ownership of, right to use, or the validity or enforceability of any patent, trademark, service mark, trade name, copyright, trade secret, license, know-how or other intellectual property right or franchise right of any person which would, singly or in the aggregate, have a Material Adverse Effect.</font></div>

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<div style="TEXT-ALIGN: justify; LINE-HEIGHT: 1.25; TEXT-INDENT: 72pt; MARGIN-LEFT: 36pt; MARGIN-RIGHT: 0pt"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">(x)<font id="TAB2" style="LETTER-SPACING: 9pt">&#160;&#160;&#160;</font></font><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">Patent applications for all inventions owned by or licensed to the Company or its subsidiaries that are material to the conduct of the business of the Company or its subsidiaries in the manner in which it has been or is contemplated to be conducted have been duly and properly filed or caused to be filed with the United States Patent and Trademark Office (&#8220;<font style="DISPLAY: inline; FONT-WEIGHT: bold">PTO</font>&#8221;) and, in some cases, applicable foreign and international patent authorities.&#160;&#160;Assignments for all patents and patent applications, including, without limitation any continuations, divisionals, continuations-in-part, renewals, reissues and applications for registration of any of the foregoing (collectively, the &#8220;<font style="DISPLAY: inline; FONT-WEIGHT: bold">Patents</font>&#8221;) owned by or licensed to the Company or its subsidiaries that are material to the conduct of the business of the Company or its subsidiaries in the manner in which it has been or is contemplated to be conducted have been properly executed and recorded for each named inventor.&#160;&#160;To the knowledge of the Company, all printed publications and patent references material to the patentability of the inventions claimed in the Patents have been disclosed to those patent offices so requiring.&#160;&#160;To the knowledge of the Company, each of the Company, its subsidiaries and their respective assignors or the Licensors, as applicable, has met its duty of candor and good faith to the PTO for the Patents.&#160;&#160;To the knowledge of the Company, no material misrepresentation has been made to any patent office in connection with the Patents.&#160;&#160;The Company is not aware of any facts material to a determination of patentability regarding the Patents not disclosed to the PTO or other applicable patent office.&#160;&#160;The Company is not aware of any facts not disclosed to the PTO or other applicable patent office that would preclude the patentability, validity or enforceability of any patent or patent application in the Patents.&#160;&#160;The Company has no knowledge of any facts that would preclude the Company, its subsidiaries or the Licensors, as applicable, from having clear title to the patents and patent applications in the Patents.</font></div>

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<div style="TEXT-ALIGN: justify; LINE-HEIGHT: 1.25; TEXT-INDENT: 72pt; MARGIN-LEFT: 36pt; MARGIN-RIGHT: 0pt"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">(y)<font id="TAB2" style="LETTER-SPACING: 9pt">&#160;&#160;&#160;</font></font><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">To the knowledge of the Company, no third party is engaging in any activity that infringes, misappropriates or otherwise violates any patent, trademark, service mark, trade name, copyright, trade secret, license, know-how or any other intellectual property right or franchise right owned by or licensed to the Company or its subsidiaries, except as described in the General Disclosure Package and the Prospectus and except for such activities that, singly or in the aggregate, would not have a Material Adverse Effect.</font></div>

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<div style="TEXT-ALIGN: justify; LINE-HEIGHT: 1.25; TEXT-INDENT: 72pt; MARGIN-LEFT: 36pt; MARGIN-RIGHT: 0pt"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">(aa)<font id="TAB2" style="LETTER-SPACING: 9pt">&#160;&#160;&#160;</font></font><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">Except as described in the General Disclosure Package, the Company and each of its subsidiaries have good and marketable title in fee simple to, or have valid rights to lease or otherwise use, all items of real or personal property which are material to the business of the Company and its subsidiaries taken as a whole, in each case free and clear of all liens, encumbrances, security interests, claims and defects that do not, singly or in the aggregate, materially affect the value of such property and do not interfere with the use made and proposed to be made of such property by the Company or any of its subsidiaries; and all of the leases and subleases material to the business of the Company and its subsidiaries, considered as one enterprise, and under which the Company or any of its subsidiaries holds properties described in the General Disclosure Package and the Prospectus, are in full force and effect, and neither the Company nor any subsidiary has received any notice of any material claim of any sort that has been asserted by anyone adverse to the rights of the Company or any subsidiary under any of the leases or subleases mentioned above, or affecting or questioning the rights of the Company or such subsidiary to the continued possession of the leased or subleased premises under any such lease or sublease.</font></div>

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<div style="TEXT-ALIGN: justify; LINE-HEIGHT: 1.25; TEXT-INDENT: 72pt; MARGIN-LEFT: 36pt; MARGIN-RIGHT: 0pt"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">(bb)<font id="TAB2" style="LETTER-SPACING: 9pt">&#160;&#160;&#160;</font></font><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">There is (A) no significant unfair labor practice complaint pending against the Company, or any of its subsidiaries, nor, to the knowledge of the Company, threatened against it or any of its subsidiaries, before the National Labor Relations Board, any state or local labor relation board or any foreign labor relations board, and no significant grievance or significant arbitration proceeding arising out of or under any collective bargaining agreement is so pending against the Company or any of its subsidiaries, or, to the knowledge of the Company, threatened against it and (B) no&#160;&#160;labor disturbance by the employees of the Company or any of its subsidiaries exists or, to the&#160;&#160;Company&#8217;s knowledge, is imminent, and the Company is not aware of any existing or imminent labor disturbance by the employees of any of its or its subsidiaries principal suppliers, manufacturers, customers or contractors, that could reasonably be expected, singly or in the aggregate, to have a Material Adverse Effect.&#160;&#160;The Company is not aware that any key employee or significant group of employees of the Company or any subsidiary plans to terminate employment with the Company or any such subsidiary.</font></div>

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<div style="TEXT-ALIGN: justify; LINE-HEIGHT: 1.25; TEXT-INDENT: 72pt; MARGIN-LEFT: 36pt; MARGIN-RIGHT: 0pt"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">(cc)<font id="TAB2" style="LETTER-SPACING: 9pt">&#160;&#160;&#160;</font></font><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">No &#8220;prohibited transaction&#8221; (as defined in Section 406 of the Employee Retirement Income Security Act of 1974, as amended, including the regulations and published interpretations thereunder (&#8220;<font style="DISPLAY: inline; FONT-WEIGHT: bold">ERISA</font>&#8221;), or Section 4975 of the Internal Revenue Code of 1986, as amended from time to time (the &#8220;<font style="DISPLAY: inline; FONT-WEIGHT: bold">Code</font>&#8221;)) or &#8220;accumulated funding deficiency&#8221; (as defined in Section 302 of ERISA) or any of the events set forth in Section 4043(b) of ERISA (other than events with respect to which the thirty (30)-day notice requirement under Section 4043 of ERISA has been waived) has occurred or could reasonably be expected to occur with respect to any employee benefit plan of the Company or any of its subsidiaries which could, singly or in the aggregate, have a Material Adverse Effect.&#160;&#160;Each employee benefit plan of the Company or any of its subsidiaries is in compliance in all material respects with applicable law, including ERISA and the Code.&#160;&#160;The Company and its subsidiaries have not incurred and could not reasonably be expected to incur liability under Title IV of ERISA with respect to the termination of, or withdrawal from, any pension plan (as defined in ERISA).&#160;&#160;Each pension plan for which the Company or any of its subsidiaries would have any liability that is intended to be qualified under Section 401(a) of the Code is so qualified, and nothing has occurred, whether by action or by failure to act, which could, singly or in the aggregate, cause the loss of such qualification.</font></div>

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<div style="TEXT-ALIGN: justify; LINE-HEIGHT: 1.25; TEXT-INDENT: 72pt; MARGIN-LEFT: 36pt; MARGIN-RIGHT: 0pt"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">(dd)<font id="TAB2" style="LETTER-SPACING: 9pt">&#160;&#160;&#160;</font></font><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">The Company and its subsidiaries are in compliance with all applicable foreign, federal, state and local statutes, laws, including the common law rules, and regulations, codes, ordinances, orders, judgments or decrees&#160;&#160;relating to the use, treatment, storage and disposal of hazardous or toxic substances or wastes and the&#160;&#160;protection of health and safety or the environment, including without limitation, natural resources, which are applicable to their business (&#8220;<font style="DISPLAY: inline; FONT-WEIGHT: bold">Environmental Laws</font>&#8221;), except where the failure to comply could not, singularly or in the aggregate, reasonably be expected to have a Material Adverse Effect.&#160;&#160;There has been no use, storage, generation, transportation, handling, treatment, disposal, discharge, emission, or other release of any kind of hazardous or toxic substances or wastes by, due to, or caused by the Company or any of its subsidiaries (or, to the Company&#8217;s knowledge, any other entity for whose acts or omissions the Company or any of its subsidiaries is or may otherwise be liable) upon under, at or from&#160;&#160;any of the property now or previously owned, leased or operated by the Company or any of its subsidiaries, or upon any other property, in violation of any Environmental Law, or Governmental&#160;&#160;Permit issued thereunder or which would, give rise to any liability, except for any violation or liability which could not reasonably be expected to have, singularly or in the aggregate with all such violations and liabilities, a Material Adverse Effect; and there has been no disposal, discharge, emission or other release of any kind onto under, at or from such property or into the environment of any toxic hazardous substances or wastes with respect to which the Company has knowledge, except for any such disposal, discharge, emission, or other release of any kind which could not reasonably be expected to have, singularly or in the aggregate with all such discharges and other releases, a Material Adverse Effect.</font></div>

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<div style="TEXT-ALIGN: justify; LINE-HEIGHT: 1.25; TEXT-INDENT: 72pt; MARGIN-LEFT: 36pt; MARGIN-RIGHT: 0pt"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">(ee)<font id="TAB2" style="LETTER-SPACING: 9pt">&#160;&#160;&#160;</font></font><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">The Company and its subsidiaries each (i) have timely filed all necessary federal, state, local and foreign tax returns, and all such returns were true, complete and correct, (ii) have paid all federal, state, local and foreign taxes, assessments, governmental or other charges due and payable for which it is liable, including, without limitation, all sales and use taxes and all taxes which the Company or any of its subsidiaries is obligated to withhold from amounts owing to employees, creditors and third parties, and (iii) do not have any tax deficiency or claims outstanding or assessed or, to its knowledge, proposed against any of them, except those, in each of the cases described in clauses (i), (ii) and (iii) of this paragraph (ee), that would not, singly or in the aggregate, have a Material Adverse Effect.&#160;&#160;The Company and its subsidiaries have not engaged in any transaction which is a corporate tax shelter or which could be characterized as such by the Internal Revenue Service or any other taxing authority.&#160;&#160;The accruals and reserves on the books and records of the Company and its subsidiaries in respect of tax liabilities for any taxable period not yet finally determined are adequate to meet any assessments and related liabilities for any such period, and since December 31, 2011, neither the Company nor any of its subsidiaries has incurred any liability for taxes other than in the ordinary course.</font></div>

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<div style="TEXT-ALIGN: justify; LINE-HEIGHT: 1.25; TEXT-INDENT: 72pt; MARGIN-LEFT: 36pt; MARGIN-RIGHT: 0pt"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">(jj)<font id="TAB2" style="LETTER-SPACING: 9pt">&#160;&#160;&#160;</font></font><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">There is no franchise agreement, lease, contract, or other agreement or document required by the Securities Act or by the Rules and Regulations to be described in the General Disclosure Package and in the Prospectus or a document incorporated by reference therein or to be filed as an exhibit to the Registration Statement or a document incorporated by reference therein which is not so described or filed therein as required; and all descriptions of any such franchise agreement, leases, contracts, or other agreements or documents contained the Registration Statement or the Prospectus or in a document incorporated by reference therein are accurate and complete descriptions of such documents in all material respects.&#160;&#160;Other than as described in the General Disclosure Package, no such franchise agreement, lease, contract or other agreement has been suspended or terminated for convenience or default by the Company or any of the other parties thereto, and neither the Company nor any of its subsidiaries has received notice nor does the Company have knowledge of any such pending or threatened suspension or termination.</font></div>

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<div style="TEXT-ALIGN: justify; LINE-HEIGHT: 1.25; TEXT-INDENT: 72pt; MARGIN-LEFT: 36pt; MARGIN-RIGHT: 0pt"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">(mm)<font id="TAB2" style="LETTER-SPACING: 9pt">&#160;&#160;&#160;</font></font><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">Neither the Company nor any of its subsidiaries owns any &#8220;margin securities&#8221; as that term is defined in Regulation U of the Board of Governors of the Federal Reserve System (the &#8220;<font style="DISPLAY: inline; FONT-WEIGHT: bold">Federal Reserve Board</font>&#8221;), and none of the proceeds of the sale of any of the Shares and Warrants will be used, directly or indirectly, for the purpose of purchasing or carrying any margin security, for the purpose of reducing or retiring any indebtedness which was originally incurred to purchase or carry any margin security or for any other purpose which might cause any of the Shares or Warrants to be considered a &#8220;purpose credit&#8221; within the meanings of Regulations T, U or X of the Federal Reserve Board.</font></div>

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<div style="TEXT-ALIGN: justify; LINE-HEIGHT: 1.25; TEXT-INDENT: 72pt; DISPLAY: block; MARGIN-LEFT: 36pt; MARGIN-RIGHT: 0pt">&#160;&#160; </div>

<div style="TEXT-ALIGN: justify; LINE-HEIGHT: 1.25; TEXT-INDENT: 72pt; MARGIN-LEFT: 36pt; MARGIN-RIGHT: 0pt"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">(nn)<font id="TAB2" style="LETTER-SPACING: 9pt">&#160;&#160;&#160;</font></font><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">Other than any contracts or agreements between the Company and the Underwriter, neither the Company nor any of its subsidiaries is a party to any contract, agreement or understanding with any person that would give rise to a valid claim against the Company or the Underwriter for a brokerage commission, finder&#8217;s fee or like payment in connection with the Offering or any transaction contemplated by this Agreement, the Registration Statement, the General Disclosure Package or the Prospectus.</font></div>

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<div style="TEXT-ALIGN: justify; LINE-HEIGHT: 1.25; TEXT-INDENT: 72pt; MARGIN-LEFT: 36pt; MARGIN-RIGHT: 0pt"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">(oo)<font id="TAB2" style="LETTER-SPACING: 9pt">&#160;&#160;&#160;</font></font><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">Except as described in the General Disclosure Package and the Prospectus, no subsidiary of the Company is currently prohibited, directly or indirectly, under any agreement or other instrument to which it is a party or is subject, from paying any dividends to the Company, from making any other distribution on such subsidiary&#8217;s capital stock, from repaying to the Company any loans or advances to such subsidiary from the Company or from transferring any of such subsidiary&#8217;s properties or assets to the Company or any other subsidiary of the Company.</font></div>

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<div style="TEXT-ALIGN: justify; LINE-HEIGHT: 1.25; TEXT-INDENT: 72pt; MARGIN-LEFT: 36pt; MARGIN-RIGHT: 0pt"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">(pp)<font id="TAB2" style="LETTER-SPACING: 9pt">&#160;&#160;&#160;</font></font><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">Since the date as of which information is given in the General Disclosure Package and the Prospectus through the date hereof, and except as set forth in the General Disclosure Package, neither the Company nor any of its subsidiaries has (i) issued or granted any securities other than options to purchase Common Stock pursuant to the Company&#8217;s stock option plan or shares of Common Stock issued or issuable upon exercise thereof, (ii) incurred any material liability or obligation, direct or contingent, other than liabilities and obligations which were incurred in the ordinary course of business, (iii) entered into any material transaction other than in the ordinary course of business or (iv) declared or paid any dividend on its capital stock; <font style="FONT-STYLE: italic; DISPLAY: inline">provided, however</font>, that the Company declared approximately $0.3 million in dividends on its Series B Cumulative Convertible Preferred Stock on September 19, 2012.</font></div>

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<div style="TEXT-ALIGN: justify; LINE-HEIGHT: 1.25; TEXT-INDENT: 72pt; MARGIN-LEFT: 36pt; MARGIN-RIGHT: 0pt"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">(qq)<font id="TAB2" style="LETTER-SPACING: 9pt">&#160;&#160;&#160;</font></font><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">No forward-looking statement (within the meaning of Section 27A of the Securities Act and Section 21E of the Exchange Act) contained in either the General Disclosure Package or the Prospectus has been made or reaffirmed without a reasonable basis or has been disclosed other than in good faith.</font></div>

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<div style="TEXT-ALIGN: justify; LINE-HEIGHT: 1.25; TEXT-INDENT: 72pt; DISPLAY: block; MARGIN-LEFT: 36pt; MARGIN-RIGHT: 0pt">&#160;</div>

<div style="TEXT-ALIGN: justify; LINE-HEIGHT: 1.25; TEXT-INDENT: 72pt; MARGIN-LEFT: 36pt; MARGIN-RIGHT: 0pt"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">(ss)<font id="TAB2" style="LETTER-SPACING: 9pt">&#160;&#160;&#160;</font></font><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">The Common Stock is registered pursuant to Section 12(b) or 12(g) of the Exchange Act and is listed on the NASDAQ CM, and the Company has taken no action designed to, or reasonably likely to have the effect of, terminating the registration of the Common Stock under the Exchange Act or delisting the Common Stock from the&#160;&#160;NASDAQ CM.&#160;&#160;Except as described in the General Disclosure Package or the Prospectus, the Company has not received any notification that the Commission, FINRA or the NASDAQ Stock Market LLC is currently contemplating terminating such registration or listing.&#160;&#160;No consent, approval, authorization or order of, or filing, notification or registration with, the NASDAQ CM is required for the listing and trading of the shares of Common Stock on the NASDAQ CM, except for (i) a Notification Form: Listing of Additional Shares; and (ii) a Notification Form: Change in the Number of Shares Outstanding.</font></div>

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<div style="TEXT-ALIGN: justify; LINE-HEIGHT: 1.25; TEXT-INDENT: 72pt; DISPLAY: block; MARGIN-LEFT: 36pt; MARGIN-RIGHT: 0pt">&#160;&#160;&#160; </div>

<div style="TEXT-ALIGN: justify; LINE-HEIGHT: 1.25; TEXT-INDENT: 72pt; MARGIN-LEFT: 36pt; MARGIN-RIGHT: 0pt"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">(tt)<font id="TAB2" style="LETTER-SPACING: 9pt">&#160;&#160;&#160;</font></font><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">Except as described in the General Disclosure Package or the Prospectus, the Company is, and after giving effect to the Offering will be, in compliance in all material respects with all applicable corporate governance requirements set forth in the NASDAQ Marketplace Rules.</font></div>

<div style="TEXT-ALIGN: justify; LINE-HEIGHT: 1.25; TEXT-INDENT: 72pt; DISPLAY: block; MARGIN-LEFT: 36pt; MARGIN-RIGHT: 0pt">&#160;</div>

<div style="TEXT-ALIGN: justify; LINE-HEIGHT: 1.25; TEXT-INDENT: 72pt; MARGIN-LEFT: 36pt; MARGIN-RIGHT: 0pt"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">(uu)<font id="TAB2" style="LETTER-SPACING: 9pt">&#160;&#160;&#160;</font></font><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">Neither the Company nor any of its subsidiaries nor, to the Company&#8217;s knowledge, any employee or agent of the Company or any subsidiary, has made any contribution or other payment to any official of, or candidate for, any federal, state, local or foreign office in violation of any law (including the Foreign Corrupt Practices Act of 1977, as amended) or of the character required to be disclosed in the Registration Statement, the General Disclosure Package or the Prospectus or a document incorporated by reference therein.</font></div>

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<div style="TEXT-ALIGN: justify; LINE-HEIGHT: 1.25; TEXT-INDENT: 72pt; MARGIN-LEFT: 36pt; MARGIN-RIGHT: 0pt"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">(vv)<font id="TAB2" style="LETTER-SPACING: 9pt">&#160;&#160;&#160;</font></font><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">There are no transactions, arrangements or other relationships between and/or among the Company, any of its affiliates (as such term is defined in Rule 405 of the Rules and Regulations) and any unconsolidated entity, including, but not limited to, any structured finance, special purpose or limited purpose entity that could reasonably be expected to materially affect the Company&#8217;s or any of its subsidiaries&#8217; liquidity or the availability of or requirements for their capital resources required to be described in the General Disclosure Package and the Prospectus or a document incorporated by reference therein which have not been described as required.</font></div>

<div style="TEXT-ALIGN: justify; LINE-HEIGHT: 1.25; TEXT-INDENT: 72pt; DISPLAY: block; MARGIN-LEFT: 36pt; MARGIN-RIGHT: 0pt">&#160;</div>

<div style="TEXT-ALIGN: justify; LINE-HEIGHT: 1.25; TEXT-INDENT: 72pt; MARGIN-LEFT: 36pt; MARGIN-RIGHT: 0pt"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">(ww)<font id="TAB2" style="LETTER-SPACING: 9pt">&#160;&#160;&#160;</font></font><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">The statistical, industry and market related data included or incorporated by reference in the Registration Statement, the General Disclosure Package and the Prospectus are based on or derived from sources that the Company believes to be reliable and accurate, and such data agree with the sources from which they are derived.</font></div>

<div style="TEXT-ALIGN: justify; LINE-HEIGHT: 1.25; TEXT-INDENT: 72pt; DISPLAY: block; MARGIN-LEFT: 36pt; MARGIN-RIGHT: 0pt">&#160;</div>

<div style="TEXT-ALIGN: justify; LINE-HEIGHT: 1.25; TEXT-INDENT: 72pt; MARGIN-LEFT: 36pt; MARGIN-RIGHT: 0pt"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">(xx)<font id="TAB2" style="LETTER-SPACING: 9pt">&#160;&#160;&#160;</font></font><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">The operations of the Company and its subsidiaries are and have been conducted at all times in compliance with applicable financial recordkeeping and reporting requirements of the Currency and Foreign Transactions Reporting Act of 1970, as amended, the USA PATRIOT Act, applicable money laundering statutes of all jurisdictions and the applicable rules, related rules and regulations thereunder (collectively, the &#8220;<font style="DISPLAY: inline; FONT-WEIGHT: bold">Money Laundering Laws</font>&#8221;), and no action, suit or proceeding by or before any court or governmental agency, authority or body or any arbitrator involving the Company or any of its subsidiaries with respect to the Money Laundering Laws is pending, or to the best knowledge of the Company, threatened against the Company or any of its subsidiaries.</font></div>

<div style="TEXT-ALIGN: justify; LINE-HEIGHT: 1.25; TEXT-INDENT: 72pt; DISPLAY: block; MARGIN-LEFT: 36pt; MARGIN-RIGHT: 0pt">&#160;</div>

<div style="TEXT-ALIGN: justify; LINE-HEIGHT: 1.25; TEXT-INDENT: 72pt; MARGIN-LEFT: 36pt; MARGIN-RIGHT: 0pt"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">(yy)<font id="TAB2" style="LETTER-SPACING: 9pt">&#160;&#160;&#160;</font></font><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">Neither the Company nor any of its subsidiaries nor, to the knowledge of the Company, any director, officer, agent, employee or affiliate of the Company or any of its subsidiaries is currently subject to any U.S. sanctions administered by the Office of Foreign Assets Control of the U.S. Treasury Department (&#8220;<font style="DISPLAY: inline; FONT-WEIGHT: bold">OFAC</font>&#8221;); and the Company will not directly or indirectly use the proceeds of the Offering, or lend, contribute or otherwise make available such proceeds to any subsidiary, joint venture partner or other person or entity, for the purpose of financing the activities of any person currently subject to any U.S. sanctions administered by OFAC.</font></div>

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<div style="TEXT-ALIGN: justify; LINE-HEIGHT: 1.25; TEXT-INDENT: 72pt; DISPLAY: block; MARGIN-LEFT: 36pt; MARGIN-RIGHT: 0pt">&#160;&#160; </div>

<div style="TEXT-ALIGN: justify; LINE-HEIGHT: 1.25; TEXT-INDENT: 72pt; MARGIN-LEFT: 36pt; MARGIN-RIGHT: 0pt"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">(zz)<font id="TAB2" style="LETTER-SPACING: 9pt">&#160;&#160;&#160;</font></font><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">Neither
the Company nor any subsidiary nor any of their affiliates (within the meaning of FINRA&#8217;s Rule 5121(f)(1)) directly or
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FINRA (within the meaning of Article I, Section 1(ee) of the By-laws of FINRA).&#160;&#160;At the time the Registration
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<div style="LINE-HEIGHT: 1.25; TEXT-INDENT: 0pt; MARGIN-LEFT: 0pt"><FONT STYLE="font: normal small-caps 10pt Times New Roman">4.<FONT STYLE="letter-spacing: 9pt">&#160;&#160;&#160;</FONT></FONT><FONT STYLE="text-transform: uppercase"><I>Further
Agreements Of The Company</I></FONT>.</div>

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<div style="LINE-HEIGHT: 1.25; TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 36pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">The Company agrees with the Underwriter:</font></div>

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<div style="TEXT-ALIGN: justify; LINE-HEIGHT: 1.25; TEXT-INDENT: 36pt; MARGIN-LEFT: 36pt"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">(a)<font id="TAB2" style="LETTER-SPACING: 9pt">&#160;&#160;&#160;</font></font><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">To prepare the Rule 462(b) Registration Statement, if necessary, in a form approved by the Underwriter and file such Rule 462(b) Registration Statement with the Commission on the date hereof, and the Company shall at the time of such filing either pay to the Commission the filing fee for the Rule 462(b) Registration Statement or give irrevocable instructions for the payment of such fee pursuant to Rule 111(b) under the Rules and Regulations; to prepare the Prospectus in a form approved by the Underwriter containing information previously omitted at the time of effectiveness of the Registration Statement in reliance on Rules 430A, 430B and 430C of the Rules and Regulations and to file such Prospectus pursuant to Rule 424(b) of the Rules and Regulations not later than the second (2<font style="DISPLAY: inline; FONT-SIZE: 70%; VERTICAL-ALIGN: text-top">nd</font>) business day following the execution and delivery of this Agreement or, if applicable, such earlier time as may be required by Rule 430A of the Rules and Regulations; to promptly notify the Underwriter of the Company&#8217;s intention to file or prepare any supplement or amendment to any Registration Statement or to the Prospectus and to make no amendment or supplement to the Registration Statement, the General Disclosure Package or to the Prospectus; to advise the Underwriter, promptly after it receives notice thereof, of the time when any amendment to the Registration Statement has been filed or becomes effective or any supplement to the General Disclosure Package or the Prospectus or any amended Prospectus has been filed and to furnish the Underwriter copies thereof; to file promptly all materials required to be filed by the Company with the Commission pursuant to Rule 433(d) or 163(b)(2), as the case may be, of the Rules and Regulations; to file promptly all reports and any definitive proxy or information statements required to be filed by the Company with the Commission pursuant to Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act subsequent to the date of the Prospectus and for so long as the delivery of a prospectus (or in lieu thereof, the notice referred to in Rule 173(a) of the Rules and Regulations) is required in connection with the Offering or sale of the Shares and Warrants; to advise the Underwriter, promptly after it receives notice thereof, of the issuance by the Commission of any stop order or of any order preventing or suspending the use of any Preliminary Prospectus, any Issuer Free Writing Prospectus or the Prospectus, of the suspension of the qualification of the Shares and Warrants for offering or sale in any jurisdiction, of the initiation or threatening of any proceeding for any such purpose, or of any request by the Commission for the amending or supplementing of the Registration Statement, the General Disclosure Package or the Prospectus or for additional information; and, in the event of the issuance of any stop order or of any order preventing or suspending the use of any Preliminary Prospectus, any Issuer Free Writing Prospectus or the Prospectus or suspending any such qualification, and promptly to use its best efforts to obtain the withdrawal of such order.</font></div>

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<div style="TEXT-ALIGN: justify; LINE-HEIGHT: 1.25; TEXT-INDENT: 36pt; MARGIN-LEFT: 36pt"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">(b)<font id="TAB2" style="LETTER-SPACING: 9pt">&#160;&#160;&#160;</font></font><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">The Company represents and agrees that, it has not made, and unless it obtains the prior consent of the Underwriter, it will not, make any offer relating to the Shares and/or Warrants that would constitute a &#8220;free writing prospectus&#8221; as defined in Rule 405 of the Rules and Regulations (each, a &#8220;<font style="DISPLAY: inline; FONT-WEIGHT: bold">Permitted Free Writing Prospectus</font>&#8221;); <font style="FONT-STYLE: italic; DISPLAY: inline">provided</font> that the prior written consent of the Underwriter hereto shall be deemed to have been given in respect of the Issuer Free Writing Prospectus(es) included in <font style="DISPLAY: inline; TEXT-DECORATION: underline">Schedule </font><font style="DISPLAY: inline; TEXT-DECORATION: underline">A</font> hereto.&#160;&#160;The Company represents that it has treated and agrees that it will treat each Permitted Free Writing Prospectus as an Issuer Free Writing Prospectus, comply with the requirements of Rules 164 and 433 of the Rules and Regulations applicable to any Issuer Free Writing Prospectus, including the requirements relating to timely filing with the Commission, legending and record keeping and will not take any action that would result in the Underwriter or the Company being required to file with the Commission pursuant to Rule 433(d) of the Rules and Regulations a free writing prospectus prepared by or on behalf of such Underwriter that such Underwriter otherwise would not have been required to file thereunder.</font></div>

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<div style="TEXT-ALIGN: justify; LINE-HEIGHT: 1.25; TEXT-INDENT: 36pt; MARGIN-LEFT: 36pt"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">(c)<font id="TAB2" style="LETTER-SPACING: 9pt">&#160;&#160;&#160;</font></font><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">If at any time when a Prospectus relating to the Shares and Warrants is required to be delivered under the Securities Act, any event occurs or condition exists as a result of which the Prospectus, as then amended or supplemented, would include any untrue statement of a material fact or omit to state a material fact necessary in order to make the statements therein, in light of the circumstances under which they were made, not misleading, or the Registration Statement, as then amended or supplemented, would include any untrue statement of a material fact or omit to state a material fact necessary to make the statements therein not misleading, or if for any other reason it is necessary at any time to amend or supplement any Registration Statement or the Prospectus to comply with the Securities Act or the Exchange Act, the Company will promptly notify the Underwriter, and upon the Underwriter&#8217; request, the Company will promptly prepare and file with the Commission, at the Company&#8217;s expense, an amendment to the Registration Statement or an amendment or supplement to the Prospectus that corrects such statement or omission or effects such compliance and will deliver to the Underwriter, without charge, such number of copies thereof as the Underwriter may reasonably request.&#160;&#160;The Company consents to the use of the Prospectus or any amendment or supplement thereto by the Underwriter.</font></div>

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<div style="TEXT-ALIGN: justify; LINE-HEIGHT: 1.25; TEXT-INDENT: 36pt; MARGIN-LEFT: 36pt"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">(d)<font id="TAB2" style="LETTER-SPACING: 9pt">&#160;&#160;&#160;</font></font><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">If the General Disclosure Package is being used to solicit offers to buy the Shares and Warrants at a time when the Prospectus is not yet available to prospective purchasers and any event shall occur as a result of which, in the judgment of the Company or in the reasonable opinion of the Underwriter, it becomes necessary to amend or supplement the General Disclosure Package in order to make the statements therein, in the light of the circumstances under which they were made, not misleading, or to make the statements therein not conflict with the information contained or incorporated by reference in the Registration Statement then on file and not superseded or modified, or if it is necessary at any time to amend or supplement the General Disclosure Package to comply with any law, the Company promptly will either (i) prepare, file with the Commission (if required) and furnish to the Underwriter and any dealers an appropriate amendment or supplement to the General Disclosure Package or (ii) prepare and file with the Commission an appropriate filing under the Exchange Act which shall be incorporated by reference in the General Disclosure Package so that the General Disclosure Package as so amended or supplemented will not, in the light of the circumstances under which they were made, be misleading or conflict with the Registration Statement then on file, or so that the General Disclosure Package will comply with law.</font></div>

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<div style="TEXT-ALIGN: justify; LINE-HEIGHT: 1.25; TEXT-INDENT: 36pt; MARGIN-LEFT: 36pt"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">(e)<font id="TAB2" style="LETTER-SPACING: 9pt">&#160;&#160;&#160;</font></font><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">If at any time following issuance of an Issuer Free Writing Prospectus there occurred or occurs an event or development as a result of which such Issuer Free Writing Prospectus conflicted or will conflict with the information contained in the Registration Statement, Pricing Prospectus or Prospectus, including any document incorporated by reference therein and any prospectus supplement deemed to be a part thereof and not superseded or modified or included or would include an untrue statement of a material fact or omitted or would omit to state a material fact required to be stated therein or necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading, the Company has promptly notified or will promptly notify the Underwriter so that any use of the Issuer Free Writing Prospectus may cease until it is amended or supplemented and has promptly amended or will promptly amend or supplement, at its own expense, such Issuer Free Writing Prospectus to eliminate or correct such conflict, untrue statement or omission.&#160;&#160;The foregoing sentence does not apply to statements in or omissions from any Issuer Free Writing Prospectus in reliance upon, and in conformity with, written information furnished to the Company by the Underwriter specifically for inclusion therein, which information the parties hereto agree is limited to the Underwriter&#8217;s Information (as defined in <font style="DISPLAY: inline; TEXT-DECORATION: underline">Section 16</font>).</font></div>

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<div style="TEXT-ALIGN: justify; LINE-HEIGHT: 1.25; TEXT-INDENT: 36pt; MARGIN-LEFT: 36pt"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">(f)<font id="TAB2" style="LETTER-SPACING: 9pt">&#160;&#160;&#160;</font></font><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">To furnish promptly to the Underwriter and to counsel for the Underwriter a signed copy of the Registration Statement as originally filed with the Commission, and of each amendment thereto filed with the Commission, including all consents and exhibits filed therewith.</font></div>

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<div style="TEXT-ALIGN: justify; LINE-HEIGHT: 1.25; TEXT-INDENT: 36pt; MARGIN-LEFT: 36pt"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">(g)<font id="TAB2" style="LETTER-SPACING: 9pt">&#160;&#160;&#160;</font></font><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">To the extent not available on the Commission&#8217;s EDGAR system, to deliver promptly to the Underwriter in New York City such number of the following documents as the Underwriter shall reasonably request:&#160;&#160;(i) conformed copies of the Registration Statement as originally filed with the Commission (in each case excluding exhibits), (ii) each Preliminary Prospectus (if any), (iii) any Issuer Free Writing Prospectus, (iv) the Prospectus (the delivery of the documents referred to in clauses (i), (ii) and (iii) of this <font style="DISPLAY: inline; TEXT-DECORATION: underline">paragraph (g)</font> to be made not later than 10:00 A.M., New York time, on the business day following the execution and delivery of this Agreement), (v) conformed copies of any amendment to the Registration Statement (excluding exhibits), (vi) any amendment or supplement to the General Disclosure Package or the Prospectus (the delivery of the documents referred to in clauses (v) and (vi) of this <font style="DISPLAY: inline; TEXT-DECORATION: underline">paragraph (g)</font> to be made not later than 10:00 A.M., New York City time, on the business day following the date of such amendment or supplement) and (vii) any document incorporated by reference in the General Disclosure Package or the Prospectus (excluding exhibits thereto) (the delivery of the documents referred to in clause (vi) of this <font style="DISPLAY: inline; TEXT-DECORATION: underline">paragraph (g)</font> to be made not later than 10:00 A.M., New York City time, on the business day following the date of such document).</font></div>

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<div style="TEXT-ALIGN: justify; LINE-HEIGHT: 1.25; TEXT-INDENT: 36pt; MARGIN-LEFT: 36pt"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">(h)<font id="TAB2" style="LETTER-SPACING: 9pt">&#160;&#160;&#160;</font></font><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">To make generally available to its shareholders as soon as practicable, but in any event not later than sixteen (16) months after the effective date of each Registration Statement (as defined in Rule 158(c) of the Rules and Regulations), an earning statement of the Company and its subsidiaries (which need not be audited) complying with Section 11(a) of the Securities Act and the Rules and Regulations (including, at the option of the Company, Rule 158).</font></div>

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<div style="TEXT-ALIGN: justify; LINE-HEIGHT: 1.25; TEXT-INDENT: 36pt; MARGIN-LEFT: 36pt"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">(i)<font id="TAB2" style="LETTER-SPACING: 9pt">&#160;&#160;&#160;</font></font><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">To take promptly from time to time such actions as the Underwriter may reasonably request to qualify the Shares and Warrants for offering and sale under the securities or blue sky laws of such jurisdictions (domestic or foreign) as the Underwriter may designate and to continue such qualifications in effect, and to comply with such laws, for so long as required to permit the offer and sale of Shares and Warrants in such jurisdictions; <font style="FONT-STYLE: italic; DISPLAY: inline">provided </font>that the Company and its subsidiaries shall not be obligated to qualify as foreign corporations in any jurisdiction in which they are not so qualified or to file a general consent to service of process in any jurisdiction.</font></div>

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<div style="TEXT-ALIGN: justify; LINE-HEIGHT: 1.25; TEXT-INDENT: 36pt; MARGIN-LEFT: 36pt"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">(j)<font id="TAB2" style="LETTER-SPACING: 9pt">&#160;&#160;&#160;</font></font><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">Upon request, during the period of five (5) years from the date hereof, to deliver to the Underwriter, as soon as they are available (i) copies of all reports or other communications furnished to shareholders, and (ii) copies of any reports and financial statements furnished or filed with the Commission or any national securities exchange or automatic quotation system on which the Common Stock is listed or quoted.</font></div>

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<div style="TEXT-ALIGN: justify; LINE-HEIGHT: 1.25; TEXT-INDENT: 36pt; MARGIN-LEFT: 36pt"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">(k)<font id="TAB2" style="LETTER-SPACING: 9pt">&#160;&#160;&#160;</font></font><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">That the Company will not, for a period of forty-five (45) days from the date of this Agreement, (the &#8220;<font style="DISPLAY: inline; FONT-WEIGHT: bold">Lock-Up Period</font>&#8221;) without the prior written consent of LCM, directly or indirectly offer, sell, assign, transfer, pledge, contract to sell, or otherwise dispose of, any shares of Common Stock or any securities convertible into or exercisable or exchangeable for Common Stock, other than the Company&#8217;s sale of the Shares and Warrants hereunder and the issuance of restricted Common Stock or options to acquire Common Stock pursuant to the Company&#8217;s employee benefit plans, qualified stock option plans or other employee compensation plans as such plans are in existence on the date hereof and described in the Prospectus and the issuance of Common Stock pursuant to the valid exercises of options, warrants or rights outstanding on the date hereof.&#160;&#160;The Company will cause each executive officer and director, and each shareholder listed in <!--EFPlaceholder--><font style="DISPLAY: inline; TEXT-DECORATION: underline">SCHEDULE B</font> to furnish to the Underwriter, prior to the date of this Agreement, a letter, substantially in the form of <font style="DISPLAY: inline; TEXT-DECORATION: underline">Exhibit B</font> hereto.&#160;&#160;The Company also agrees that during such period, other than for the sale of the Shares and Warrants hereunder, the Company will not file any registration statement, preliminary prospectus or prospectus, or any amendment or supplement thereto, under the Securities Act for any such transaction or which registers, or offers for sale, Common Stock or any securities convertible into or exercisable or exchangeable for Common Stock, except for a registration statement on Form S-8 relating to employee benefit plans.&#160;&#160;The Company hereby agrees that (i) if it issues an earnings release or material news, or if a material event relating to the Company occurs, during the last seventeen (17) days of the Lock-Up Period, or (ii) if prior to the expiration of the Lock-Up Period, the Company announces that it will release earnings results during the sixteen (16)-day period beginning on the last day of the Lock-Up Period, the restrictions imposed by this paragraph (k) or the letter shall continue to apply until the expiration of the eighteen (18)-day period beginning on the issuance of the earnings release or the occurrence of the material news or material event.&#160;&#160;The Company will provide the Underwriter subject to the Lock-Up Period with prior notice (in accordance with <font style="DISPLAY: inline; TEXT-DECORATION: underline">Section 14</font> hereof) of any such announcement that gives rise to an extension of the Lock-Up Period.</font></div>

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<div style="TEXT-ALIGN: justify; LINE-HEIGHT: 1.25; TEXT-INDENT: 36pt; MARGIN-LEFT: 36pt"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">(l)<font id="TAB2" style="LETTER-SPACING: 9pt">&#160;&#160;&#160;</font></font><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">To supply the Underwriter with copies of all correspondence to and from, and all documents issued to and by, the Commission in connection with the registration of the Shares and Warrants under the Securities Act or the Registration Statement, any Preliminary Prospectus or the Prospectus, or any amendment or supplement thereto or document incorporated by reference therein.</font></div>

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<div style="TEXT-ALIGN: justify; LINE-HEIGHT: 1.25; TEXT-INDENT: 36pt; MARGIN-LEFT: 36pt"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">(m)<font id="TAB2" style="LETTER-SPACING: 9pt">&#160;&#160;&#160;</font></font><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">Prior to the Closing Date, and any Option Closing Date, to furnish to the Underwriter, promptly after they have been prepared, copies of any unaudited interim consolidated financial statements of the Company for any periods subsequent to the periods covered by the financial statements appearing in the Registration Statement and the Prospectus.</font></div>

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<div style="TEXT-ALIGN: justify; LINE-HEIGHT: 1.25; TEXT-INDENT: 36pt; MARGIN-LEFT: 36pt"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">(n)<font id="TAB2" style="LETTER-SPACING: 9pt">&#160;&#160;&#160;</font></font><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">Prior to the Closing Date, and any Option Closing Date, not to issue any press release or other communication directly or indirectly or hold any press conference with respect to the Company, its condition, financial or otherwise, or earnings, business affairs or business prospects (except for routine oral marketing communications in the ordinary course of business and consistent with the past practices of the Company and of which the Underwriter is notified), without the prior written consent of the Underwriter, unless in the judgment of the Company and its counsel, and after notification to the Underwriter, such press release or communication is required by law or applicable stock exchange rules.</font></div>

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<div style="TEXT-ALIGN: justify; LINE-HEIGHT: 1.25; TEXT-INDENT: 36pt; MARGIN-LEFT: 36pt"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">(o)<font id="TAB2" style="LETTER-SPACING: 9pt">&#160;&#160;&#160;</font></font><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">Until the Underwriter shall have notified the Company of the completion of the Offering, that the Company will not, and will cause its affiliated purchasers (as defined in Regulation M under the Exchange Act) not to, either alone or with one or more other persons, bid for or purchase, for any account in which it or any of its affiliated purchasers has a beneficial interest, any Shares or Warrants, or attempt to induce any person to purchase any Shares or Warrants; and not to, and to cause its affiliated purchasers not to, make bids or purchases for the purpose of creating actual, or apparent, active trading in or of raising the price of the Shares and/or Warrants.</font></div>

<div style="TEXT-ALIGN: justify; LINE-HEIGHT: 1.25; TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt">&#160;</div>

<div style="TEXT-ALIGN: justify; LINE-HEIGHT: 1.25; TEXT-INDENT: 36pt; MARGIN-LEFT: 36pt"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">(p)<font id="TAB2" style="LETTER-SPACING: 9pt">&#160;&#160;&#160;</font></font><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">Not to take any action prior to the Closing Date or any Option Closing Date which would require the Prospectus to be amended or supplemented, without the prior written consent of the Underwriter.</font></div>

<div style="TEXT-ALIGN: justify; LINE-HEIGHT: 1.25; TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt">&#160;</div>

<div style="TEXT-ALIGN: justify; LINE-HEIGHT: 1.25; TEXT-INDENT: 36pt; MARGIN-LEFT: 36pt"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">(q)<font id="TAB2" style="LETTER-SPACING: 9pt">&#160;&#160;&#160;</font></font><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">To at all times comply with all applicable provisions of the Sarbanes-Oxley Act in effect from time to time.</font></div>

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<div style="TEXT-ALIGN: justify; LINE-HEIGHT: 1.25; TEXT-INDENT: 36pt; MARGIN-LEFT: 36pt"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">(r)<font id="TAB2" style="LETTER-SPACING: 9pt">&#160;&#160;&#160;</font></font><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">To maintain, at its expense, a registrar and transfer agent for the Common Stock.</font></div>

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<div style="TEXT-ALIGN: justify; LINE-HEIGHT: 1.25; TEXT-INDENT: 36pt; MARGIN-LEFT: 36pt"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">(s)<font id="TAB2" style="LETTER-SPACING: 9pt">&#160;&#160;&#160;</font></font><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">To apply the net proceeds from the sale of the Shares and Warrants as set forth in the Registration Statement, the General Disclosure Package and the Prospectus under the heading &#8220;Use of Proceeds.&#8221;&#160;&#160;The Company shall manage its affairs and investments in such a manner as not to be or become an &#8220;investment company&#8221; within the meaning of the Investment Company Act and the rules and regulations thereunder.</font></div>

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<div style="TEXT-ALIGN: justify; LINE-HEIGHT: 1.25; TEXT-INDENT: 36pt; MARGIN-LEFT: 36pt"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">(t)<font id="TAB2" style="LETTER-SPACING: 9pt">&#160;&#160;&#160;</font></font><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">To use its reasonable best efforts to list, subject to notice of issuance, and to maintain the listing of the Common Stock on the NASDAQ CM.</font></div>

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<div style="TEXT-ALIGN: justify; LINE-HEIGHT: 1.25; TEXT-INDENT: 36pt; MARGIN-LEFT: 36pt"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">(u)<font id="TAB2" style="LETTER-SPACING: 9pt">&#160;&#160;&#160;</font></font><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">To use its reasonable best efforts to assist the Underwriter with any filings with FINRA and obtaining clearance from FINRA as to the amount of compensation allowable or payable to the Underwriter.</font></div>

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<div style="TEXT-ALIGN: justify; LINE-HEIGHT: 1.25; TEXT-INDENT: 36pt; MARGIN-LEFT: 36pt"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">(v)<font id="TAB2" style="LETTER-SPACING: 9pt">&#160;&#160;&#160;</font></font><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">To use its reasonable best efforts to do and perform all things required to be done or performed under this Agreement by the Company prior to the Closing Date, and any Option Closing Date, and to satisfy all conditions precedent to the delivery of the Shares and Warrants.</font></div>

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<div style="TEXT-ALIGN: justify; LINE-HEIGHT: 1.25; TEXT-INDENT: 0pt; MARGIN-LEFT: 0pt"><FONT STYLE="font: normal small-caps 10pt Times New Roman">5.<FONT STYLE="letter-spacing: 9pt">&#160;&#160;&#160;</FONT></FONT><FONT STYLE="text-transform: uppercase"><I>Payment
Of Expenses</I></FONT>.&#160;&#160;The Company agrees to pay, or reimburse if paid by the Underwriter, upon consummation of the
transactions contemplated hereby:&#160;&#160;(a) the costs incident to the authorization, issuance, sale, preparation and delivery
of the Shares and Warrants to the Underwriter and any taxes payable in that connection; (b) the costs incident to the registration
of the Shares and Warrants under the Securities Act; (c) the costs incident to the preparation, printing and distribution of the
Registration Statement, the Base Prospectus, any Issuer Free Writing Prospectus, the General Disclosure Package, the Prospectus,
any amendments, supplements and exhibits thereto or any document incorporated by reference therein and the costs of printing,
reproducing and distributing this Agreement and the Warrants and any closing document by mail, telex or other means of communications;
(d) the fees and expenses (including related fees and expenses of counsel for the Underwriter) incurred in connection with securing
any required review by FINRA of the terms of the Offering and any filings made with FINRA; (e) any applicable listing, quotation
or other fees; (f) the fees and expenses (including related fees and expenses of counsel to the Underwriter) of qualifying the
Shares and Warrants under the securities laws of the several jurisdictions as provided in <U>Section 4(i)</U> and of preparing,
printing and distributing wrappers, Blue Sky Memoranda and Legal Investment Surveys; (g) the cost of preparing and printing warrant
certificates; (h) all fees and expenses of the registrar and transfer agent of the Shares and Warrants; (i) the fees, disbursements
and expenses of counsel to the Underwriter; (j) the costs and expenses of the Company relating to investor presentations on any
&#8220;road show&#8221; undertaken in connection with the marketing of the offering of the Shares and Warrants, including, without
limitation, expenses associated with the preparation or dissemination of any electronic road show, expenses associated with the
production of road show slides and graphics, fees and expenses of any consultants engaged in connection with the road show presentations
with the prior approval of the Company, travel and lodging expenses of the officers of the Company and such consultants, including
the cost of any aircraft chartered in connection with the road show, and (k) all other costs and expenses incident to the offering
of the Shares and Warrants or the performance of the obligations of the Company under this Agreement (including, without limitation,
the fees and expenses of the Company&#8217;s counsel and the Company&#8217;s independent accountants.</div>

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<div style="TEXT-ALIGN: justify; LINE-HEIGHT: 1.25; TEXT-INDENT: 0pt; MARGIN-LEFT: 0pt"><FONT STYLE="font: normal small-caps 10pt Times New Roman">6.<FONT STYLE="letter-spacing: 9pt">&#160;&#160;&#160;</FONT></FONT><FONT STYLE="text-transform: uppercase"><I>Conditions
To The Obligations Of The Underwriter, And The Sale Of The Shares and Warrants</I>.</FONT>&#160;&#160;The respective obligations
of the Underwriter hereunder are subject to the accuracy, when made and as of the Applicable Time and on the Closing Date, and
any Option Closing Date, of the representations and warranties of the Company contained herein, to the accuracy of the statements
of the Company made in any certificates pursuant to the provisions hereof, to the performance by the Company of its obligations
hereunder, and to each of the following additional terms and conditions:</div>

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<div style="TEXT-ALIGN: justify; LINE-HEIGHT: 1.25; TEXT-INDENT: 72pt; MARGIN-LEFT: 36pt"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">(a)<font id="TAB2" style="LETTER-SPACING: 9pt">&#160;&#160;&#160;</font></font><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">The Registration Statement is effective under the Securities Act, and no stop order suspending the effectiveness of any Registration Statement or any part thereof, preventing or suspending the use of any Base Prospectus, the Preliminary Prospectus, the Prospectus or any Permitted Free Writing Prospectus or any part thereof shall have been issued and no proceedings for that purpose or pursuant to Section 7A under the Securities Act shall have been initiated or threatened by the Commission, and all requests for additional information on the part of the Commission (to be included or incorporated by reference in the Registration Statement or the Prospectus or otherwise) shall have been complied with to the reasonable satisfaction of the Underwriter; and the Rule 462(b) Registration Statement, if any, each Issuer Free Writing Prospectus (except for a road show), if any, and the Prospectus shall have been filed with the Commission within the applicable time period prescribed for such filing by, and in compliance with, the Rules and Regulations and in accordance with <font style="DISPLAY: inline; TEXT-DECORATION: underline">Section 4(a)</font> and the Rule 462(b) Registration Statement, if any, shall have become effective immediately upon its filing with the Commission; and, if applicable, FINRA shall have raised no objection to the fairness and reasonableness of the terms of this Agreement or the transactions contemplated hereby.</font></div>

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<div style="TEXT-ALIGN: justify; LINE-HEIGHT: 1.25; TEXT-INDENT: 72pt; MARGIN-LEFT: 36pt"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">(b)<font id="TAB2" style="LETTER-SPACING: 9pt">&#160;&#160;&#160;</font></font><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">The Underwriter shall not have discovered and disclosed to the Company on or prior to the Closing Date and any Option Closing Date that any Registration Statement or any amendment or supplement thereto contains an untrue statement of a fact which, in the opinion of counsel for the Underwriter, is material or omits to state any fact which, in the opinion of such counsel, is material and is required to be stated therein or is necessary to make the statements therein not misleading, or that the General Disclosure Package, any Issuer Free Writing Prospectus or the Prospectus or any amendment or supplement thereto contains an untrue statement of fact which, in the opinion of such counsel, is material or omits to state any fact which, in the opinion of such counsel, is material and is necessary in order to make the statements, in the light of the circumstances in which they were made, not misleading.</font></div>

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<div style="TEXT-ALIGN: justify; LINE-HEIGHT: 1.25; TEXT-INDENT: 72pt; MARGIN-LEFT: 36pt"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">(c)<font id="TAB2" style="LETTER-SPACING: 9pt">&#160;&#160;&#160;</font></font><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">All corporate proceedings and other legal matters incident to the authorization, form and validity of each of this Agreement, Shares and Warrants, the Registration Statement, the General Disclosure Package, each Issuer Free Writing Prospectus, and the Prospectus and all other legal matters relating to this Agreement and the transactions contemplated hereby shall be reasonably satisfactory in all material respects to counsel for the Underwriter, and the Company shall have furnished to such counsel all documents and information that they may reasonably request to enable them to pass upon such matters.</font></div>

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<div style="TEXT-ALIGN: justify; LINE-HEIGHT: 1.25; TEXT-INDENT: 72pt; MARGIN-LEFT: 36pt"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">(d)<font id="TAB2" style="LETTER-SPACING: 9pt">&#160;&#160;&#160;</font></font><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">Troutman Sanders LLP shall have furnished to the Underwriter such counsel&#8217;s written opinion and negative assurance statement, as counsel to the Company, addressed to the Underwriter dated the Closing Date, and any Option Closing Date, covering the opinions substantially in the form set forth in <font style="DISPLAY: inline; TEXT-DECORATION: underline">Exhibit C</font> attached hereto.</font></div>

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<div style="TEXT-ALIGN: justify; LINE-HEIGHT: 1.25; TEXT-INDENT: 72pt; MARGIN-LEFT: 36pt"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">(e)<font id="TAB2" style="LETTER-SPACING: 9pt">&#160;&#160;&#160;</font></font><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">The Underwriter shall have received from Proskauer Rose LLP, counsel for the Underwriter, such opinion or opinions, dated the Closing Date, with respect to such matters as the Underwriter may reasonably require, and the Company shall have furnished to such counsel such documents as it requests to enable it to pass upon such matters.</font></div>

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<div style="TEXT-ALIGN: justify; LINE-HEIGHT: 1.25; TEXT-INDENT: 72pt; MARGIN-LEFT: 36pt"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">(f)<font id="TAB2" style="LETTER-SPACING: 9pt">&#160;&#160;&#160;</font></font><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">At the time of the execution of this Agreement, the Underwriter shall have received from Hein &amp; Associates LLP a letter, addressed to the Underwriter, executed and dated such date, in form and substance satisfactory to the Underwriter (i) confirming that they are an independent registered accounting firm with respect to the Company and its subsidiaries within the meaning of the Securities Act and the Rules and Regulations and PCAOB and (ii) stating the conclusions and findings of such firm, of the type ordinarily included in accountants&#8217; &#8220;comfort letters&#8221; to underwriters, with respect to the financial statements and certain financial information contained or incorporated by reference in the Registration Statement, the General Disclosure Package and the Prospectus.</font></div>

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<div style="TEXT-ALIGN: justify; LINE-HEIGHT: 1.25; TEXT-INDENT: 72pt; MARGIN-LEFT: 36pt"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">(g)<font id="TAB2" style="LETTER-SPACING: 9pt">&#160;&#160;&#160;</font></font><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">On the effective date of any post-effective amendment to any Registration Statement and on the Closing Date, and any Option Closing Date, the Underwriter shall have received a letter (the &#8220;<font style="DISPLAY: inline; FONT-WEIGHT: bold">Bring-Down Letter</font>&#8221;) from Hein &amp; Associates LLP addressed to the Underwriter and dated the Closing Date, and any Option Closing Date confirming, as of the date of the Bring-Down Letter (or, with respect to matters involving changes or developments since the respective dates as of which specified financial information is given in the General Disclosure Package and the Prospectus, as the case may be, as of a date not more than three (3) business days prior to the date of the Bring-Down Letter), the conclusions and findings of such firm, of the type ordinarily included in accountants&#8217; &#8220;comfort letters&#8221; to Underwriter, with respect to the financial information and other matters covered by its letter delivered to the Underwriter concurrently with the execution of this Agreement pursuant to paragraph (f) of this <font style="DISPLAY: inline; TEXT-DECORATION: underline">Section 6</font>.</font></div>

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<div style="TEXT-ALIGN: justify; LINE-HEIGHT: 1.25; TEXT-INDENT: 72pt; MARGIN-LEFT: 36pt"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">(h)<font id="TAB2" style="LETTER-SPACING: 9pt">&#160;&#160;&#160;</font></font><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">The
Company shall have furnished to the Underwriter a certificate, dated the Closing Date, and any Option Closing Date, of its
Chairman of the Board, its President or a Vice President and its chief financial officer stating that (i) such officers have
carefully examined the Registration Statement, the General Disclosure Package, any Permitted Free Writing Prospectus and the
Prospectus and, in their opinion, the Registration Statement and each amendment thereto, at the Applicable Time, as of the
date of this Agreement and as of the Closing Date, and any Option Closing Date, did not include any untrue statement of a
material fact and did not omit to state a material fact required to be stated therein or necessary to make the statements
therein not misleading, and the General Disclosure Package, as of the Applicable Time and as of the Closing Date, and any
Option Closing Date, any Permitted Free Writing Prospectus as of its date and as of the Closing Date, and any Option Closing
Date, the Prospectus and each amendment or supplement thereto, as of the respective date thereof and as of the Closing Date,
and any Option Closing Date, did not include any untrue statement of a material fact and did not omit to state a material
fact necessary in order to make the statements therein, in the light of the circumstances in which they were made, not
misleading, (ii) since the effective date of the Registration Statement, no event has occurred which should have been
set forth in a supplement or amendment to the Registration Statement, the General Disclosure Package or the Prospectus, (iii)
to their knowledge, as of the Closing Date, and any Option Closing Date, the representations and warranties of the Company in
this Agreement are true and correct and the Company has complied with all agreements and satisfied all conditions on its part
to be performed or satisfied hereunder at or prior to the Closing Date and any Option Closing Date, and (iv) there has not
been, subsequent to the date of the most recent audited financial statements included or incorporated by reference in the
General Disclosure Package, any material adverse change in the financial position or results of operations of the Company and
its subsidiaries, or any change or development that, singly or in the aggregate, would involve a material adverse change or a
prospective material adverse change, in or affecting the condition (financial or otherwise), results of operations, business,
assets or prospects of the Company and its subsidiaries taken as a whole, except as set forth in the Prospectus.</font></div>

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<div style="TEXT-ALIGN: justify; LINE-HEIGHT: 1.25; TEXT-INDENT: 72pt; MARGIN-LEFT: 36pt"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">(i)<font id="TAB2" style="LETTER-SPACING: 9pt">&#160;&#160;&#160;</font></font><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">Since the date of the latest audited financial statements included in the General Disclosure Package or incorporated by reference in the General Disclosure Package as of the date hereof, (i) neither the Company nor any of its subsidiaries shall have sustained any loss or interference with its business from fire, explosion, flood or other calamity, whether or not covered by insurance, or from any labor dispute or court or governmental action, order or decree, otherwise than as set forth in the General Disclosure Package, and (ii) there shall not have been any change in the capital stock or long-term debt of the Company or any of its subsidiaries, or any change, or any development involving a prospective change, in or affecting the business, general affairs, management, financial position, stockholders&#8217; equity or results of operations of the Company and its subsidiaries, otherwise than as set forth in the General Disclosure Package, the effect of which, in any such case described in clause (i) or (ii) of this paragraph (IX), is, in the judgment of the Underwriter, so material and adverse as to make it impracticable or inadvisable to proceed with the sale or delivery of the Shares and Warrants on the terms and in the manner contemplated in the General Disclosure Package.</font></div>

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<div style="TEXT-ALIGN: justify; LINE-HEIGHT: 1.25; TEXT-INDENT: 72pt; MARGIN-LEFT: 36pt"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">(j)<font id="TAB2" style="LETTER-SPACING: 9pt">&#160;&#160;&#160;</font></font><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">No action shall have been taken and no law, statute, rule, regulation or order shall have been enacted, adopted or issued by any governmental agency or body which would prevent the issuance or sale of the Shares and Warrants or materially and adversely affect or potentially materially and adversely affect the business or operations of the Company; and no injunction, restraining order or order of any other nature by any federal or state court of competent jurisdiction shall have been issued which would prevent the issuance or sale of the Shares and Warrants or materially and adversely affect or potentially materially and adversely affect the business or operations of the Company.</font></div>

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<div style="TEXT-ALIGN: justify; LINE-HEIGHT: 1.25; TEXT-INDENT: 72pt; MARGIN-LEFT: 36pt"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">(k)<font id="TAB2" style="LETTER-SPACING: 9pt">&#160;&#160;&#160;</font></font><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">Subsequent to the execution and delivery of this Agreement (i) no downgrading shall have occurred in the Company&#8217;s corporate credit rating or the rating accorded the Company&#8217;s debt securities by any &#8220;nationally recognized statistical rating organization,&#8221; as that term is defined by the Commission for purposes of Rule 436(g)(2) of the Rules and Regulations and (ii) no such organization shall have publicly announced that it has under surveillance or review (other than an announcement with positive implications of a possible upgrading), the Company&#8217;s corporate credit rating or the rating of any of the Company&#8217;s&#160;&#160;debt securities.</font></div>

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<div style="TEXT-ALIGN: justify; LINE-HEIGHT: 1.25; TEXT-INDENT: 72pt; MARGIN-LEFT: 36pt"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">(l)<font id="TAB2" style="LETTER-SPACING: 9pt">&#160;&#160;&#160;</font></font><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">Subsequent to the execution and delivery of this Agreement there shall not have occurred any of the following:&#160;&#160;(i) trading in securities generally on the New York Stock Exchange, NASDAQ CM or the NYSE Amex or in the over-the-counter market, or trading in any securities of the Company on any exchange or in the over-the-counter market, shall have been suspended or materially limited, or minimum or maximum prices or maximum range for prices shall have been established on any such exchange or such market by the Commission, by such exchange or market or by any other regulatory body or governmental authority having jurisdiction, (ii) a banking moratorium shall have been declared by Federal or state authorities or a material disruption has occurred in commercial banking or securities settlement or clearance services in the United States, (iii) the United States shall have become engaged in hostilities, or the subject of an act of terrorism, or there shall have been an outbreak of or escalation in hostilities involving the United States, or there shall have been a declaration of a national emergency or war by the United States or (iv) there shall have occurred such a material adverse change in general economic, political or financial conditions (or the effect of international conditions on the financial markets in the United States shall be such) as to make it, in the judgment of the Underwriter, impracticable or inadvisable to proceed with the sale or delivery of the Shares and Warrants on the terms and in the manner contemplated in the General Disclosure Package and the Prospectus.</font></div>

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<div style="TEXT-ALIGN: justify; LINE-HEIGHT: 1.25; TEXT-INDENT: 72pt; MARGIN-LEFT: 36pt"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">(m)<font id="TAB2" style="LETTER-SPACING: 9pt">&#160;&#160;&#160;</font></font><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">The NASDAQ CM shall have approved the Common Stock, and underlying Warrant Shares (including any shares of Common Stock underlying the Additional Warrants) for listing therein, subject only to official notice of issuance.</font></div>

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<div style="TEXT-ALIGN: justify; LINE-HEIGHT: 1.25; TEXT-INDENT: 72pt; MARGIN-LEFT: 36pt"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">(n)<font id="TAB2" style="LETTER-SPACING: 9pt">&#160;&#160;&#160;</font></font><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">The Underwriter shall have received the written agreements, substantially in the form of <font style="DISPLAY: inline; TEXT-DECORATION: underline">Exhibit B</font> hereto, of the executive officers and directors, and the shareholders of the Company listed in <!--EFPlaceholder--><font style="DISPLAY: inline; TEXT-DECORATION: underline">SCHEDULE B</font> to this Agreement.</font></div>

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<div style="TEXT-ALIGN: justify; LINE-HEIGHT: 1.25; TEXT-INDENT: 72pt; MARGIN-LEFT: 36pt"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">(o)<font id="TAB2" style="LETTER-SPACING: 9pt">&#160;&#160;&#160;</font></font><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">The
Company shall have executed and delivered the Warrants, and any Addtional Warrants (if and when applicable)</font>.</div>

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<div style="TEXT-ALIGN: justify; LINE-HEIGHT: 1.25; TEXT-INDENT: 72pt; MARGIN-LEFT: 36pt"><FONT STYLE="font: 10pt Times New Roman">(p)<FONT STYLE="letter-spacing: 9pt">&#160;&#160;&#160;</FONT>The
holders of warrants issued under the Securities Purchase Agreement dated December 8, 2011 by and among the Company and the investors
listed on the Schedule of Investors attached thereto (the &#8220;<B>December SPA</B>&#8221;) shall have provided a written waiver
(which may be in electronic form, including via email) in a form reasonably satisfactory to the Underwriter acknowledging the
waiver of their notice rights under Section 4.9 of the December SPA.</FONT></div>

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<div style="TEXT-ALIGN: justify; LINE-HEIGHT: 1.25; TEXT-INDENT: 72pt; MARGIN-LEFT: 36pt"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">(q)<font id="TAB2" style="LETTER-SPACING: 9pt">&#160;&#160;&#160;</font></font><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">The
Company shall have prepared and filed with the Commission a Current Report on Form 8-K including as an exhibit thereto this
Agreement and the  form of the Warrant.</font></div>

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<div style="TEXT-ALIGN: justify; LINE-HEIGHT: 1.25; TEXT-INDENT: 72pt; MARGIN-LEFT: 36pt"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">(r)<font id="TAB2" style="LETTER-SPACING: 9pt">&#160;&#160;&#160;</font></font><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">Prior to the Closing Date, and any Option Closing Date, the Company shall have furnished to the Underwriter such further information, opinions, certificates (including a Secretary&#8217;s Certificate), good standing certificates, letters or documents as the Underwriter shall have reasonably requested.</font></div>

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<div style="TEXT-ALIGN: justify; LINE-HEIGHT: 1.25; TEXT-INDENT: 36pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">All opinions, letters, evidence and certificates mentioned above or elsewhere in this Agreement shall be deemed to be in compliance with the provisions hereof only if they are in form and substance reasonably satisfactory to counsel for the Underwriter.</font></div>

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<div style="TEXT-ALIGN: justify; LINE-HEIGHT: 1.25; TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt"><FONT STYLE="font: normal small-caps 10pt Times New Roman">7.<FONT STYLE="letter-spacing: 9pt">&#160;&#160;&#160;</FONT></FONT><FONT STYLE="text-transform: uppercase"><I>Indemnification
and Contribution</I></FONT>.</div>

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<div style="TEXT-ALIGN: justify; LINE-HEIGHT: 1.25; TEXT-INDENT: 72pt; MARGIN-LEFT: 36pt"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">(a)<font id="TAB2" style="LETTER-SPACING: 9pt">&#160;&#160;&#160;</font></font><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">The Company shall indemnify and hold harmless the Underwriter, its affiliates and each of its and their respective directors, officers, members, employees, representatives and agents (including, without limitation Lazard Fr&#232;res &amp; Co. LLC, (which will provide services to the Underwriter) and its affiliates, and each of its and their respective directors, officers, members, employees, representatives and agents and each person, if any, who controls Lazard Fr&#232;res &amp; Co. LLC within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act) and each person, if any, who controls the Underwriter within the meaning of Section 15 of the Securities Act of or Section 20 of the Exchange Act (collectively the &#8220;<font style="DISPLAY: inline; FONT-WEIGHT: bold">Underwriter Indemnified Parties,</font>&#8221; and each a &#8220;<font style="DISPLAY: inline; FONT-WEIGHT: bold">Underwriter Indemnified Party</font>&#8221;) against any loss, claim, damage, expense or liability whatsoever (or any action, investigation or proceeding in respect thereof), joint or several, to which such Underwriter Indemnified Party may become subject, under the Securities Act or otherwise, insofar as such loss, claim, damage, expense, liability, action, investigation or proceeding arises out of or is based upon (A) any untrue statement or alleged untrue statement of a material fact contained in any Preliminary Prospectus, any Issuer Free Writing Prospectus, any &#8220;issuer information&#8221; filed or required to be filed pursuant to Rule 433(d) of the Rules and Regulations, any Registration Statement or the Prospectus, or in any amendment or supplement thereto or document incorporated by reference therein, or (B)&#160;&#160;the omission or alleged omission to state in any Preliminary Prospectus, any Issuer Free Writing Prospectus, any &#8220;issuer information&#8221; filed or required to be filed pursuant to Rule 433(d) of the Rules and Regulations, any Registration Statement or the Prospectus, or in any amendment or supplement thereto or document incorporated by reference therein, a material fact required to be stated therein or necessary to make the statements therein not misleading, or (C) any breach of the representations and warranties of the Company contained herein or the failure of the Company to perform its obligations hereunder or pursuant to any law, any act or failure to act, or any alleged act or failure to act, by the Underwriter in connection with, or relating in any manner to the Shares and Warrants or the Offering, and which is included as part of or referred to in any loss, claim, damage, expense, liability, action, investigation or proceeding arising out of or based upon matters covered by subclause (A), (B) or (C) above of this <font style="DISPLAY: inline; TEXT-DECORATION: underline">Section 7(a)</font> (<font style="FONT-STYLE: italic; DISPLAY: inline">provided</font> that the Company shall not be liable in the case of any matter covered by this subclause (C) to the extent that it is determined in a final judgment by a court of competent jurisdiction that such loss, claim, damage, expense or&#160;&#160;liability resulted primarily from any such act or failure to act undertaken or omitted to be taken by the Underwriter through its gross negligence or willful misconduct), and shall reimburse the Underwriter Indemnified Party promptly upon demand for any legal fees or other expenses reasonably incurred by that Underwriter Indemnified Party in connection with investigating, or preparing to defend, or defending against, settling, compromising, or appearing as a third party witness in respect of, or otherwise incurred in connection with, any such loss, claim, damage, expense, liability, action, investigation or proceeding, as such fees and expenses are incurred; provided, however, that the Company shall not be liable in any such case to the extent that any such loss, claim, damage, expense or liability arises out of or is based upon an untrue statement or alleged untrue statement in, or omission or alleged omission from any Preliminary Prospectus, any Registration Statement or the Prospectus, or any such amendment or supplement thereto, or any Issuer Free Writing Prospectus made in reliance upon and in conformity with written information furnished to the Company by the Underwriter specifically for use therein, which information the parties hereto agree is limited to the&#160;&#160;Underwriter&#8217;s Information (as defined in <font style="DISPLAY: inline; TEXT-DECORATION: underline">Section 16</font>).&#160;&#160;This indemnity agreement is not exclusive and will be in addition to any liability which the Company might otherwise have and shall not limit any rights or remedies which may otherwise be available at law or in equity to each Underwriter Indemnified Party.</font></div>

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<div style="TEXT-ALIGN: justify; LINE-HEIGHT: 1.25; TEXT-INDENT: 72pt; MARGIN-LEFT: 36pt"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">(b)<font id="TAB2" style="LETTER-SPACING: 9pt">&#160;&#160;&#160;</font></font><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">The Underwriter shall indemnify and hold harmless the Company and its directors, its officers who signed the Registration Statement and each person, if any, who controls the Company within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act (collectively the &#8220;<font style="DISPLAY: inline; FONT-WEIGHT: bold">Company Indemnified Parties</font>&#8221; and each a &#8220;<font style="DISPLAY: inline; FONT-WEIGHT: bold">Company Indemnified Party</font>&#8221;) against any loss, claim, damage, expense or liability whatsoever (or any action, investigation or proceeding in respect thereof), joint or several, to which such Company Indemnified Party may become subject, under the Securities Act or otherwise, insofar as such loss, claim, damage, expense, liability, action, investigation or proceeding arises out of or is based upon (i) any untrue statement or alleged untrue statement of a material fact contained in any Preliminary Prospectus, any Issuer Free Writing Prospectus, any &#8220;issuer information&#8221; filed or required to be filed pursuant to Rule 433(d) of the Rules and Regulations, any Registration Statement or the Prospectus, or in any amendment or supplement thereto, or (ii) the omission or alleged omission to state in any Preliminary Prospectus, any Issuer Free Writing Prospectus, any &#8220;issuer information&#8221; filed or required to be filed pursuant to Rule 433(d) of the Rules and Regulations, any Registration Statement or the Prospectus, or in any amendment or supplement thereto, a material fact required to be stated therein or necessary to make the statements therein not misleading, but in each case only to the extent that the untrue statement or alleged untrue statement or omission or alleged omission was made in reliance upon and in conformity with written information furnished to the Company by the Underwriter specifically for use therein, which information the parties hereto agree is limited to the Underwriter&#8217;s Information as defined in <font style="DISPLAY: inline; TEXT-DECORATION: underline">Section 16</font>, and shall reimburse the Company Indemnified Parties for any legal or other expenses reasonably incurred by such party in connection with investigating or preparing to defend or defending against or appearing as third party witness in connection with any such loss, claim, damage, liability, action, investigation or proceeding, as such fees and expenses are incurred.&#160;&#160;Notwithstanding the provisions of this <font style="DISPLAY: inline; TEXT-DECORATION: underline">Section 7(b)</font>, in no event shall any indemnity by the Underwriter under this <font style="DISPLAY: inline; TEXT-DECORATION: underline">Section 7(b)</font> exceed the total discount and commission received by such Underwriter in accordance with <font style="DISPLAY: inline; TEXT-DECORATION: underline">Section 2</font>.</font></div>

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<div style="TEXT-ALIGN: justify; LINE-HEIGHT: 1.25; TEXT-INDENT: 72pt; MARGIN-LEFT: 36pt"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">(c)<font id="TAB2" style="LETTER-SPACING: 9pt">&#160;&#160;&#160;</font></font><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">Promptly after receipt by an indemnified party under this <font style="DISPLAY: inline; TEXT-DECORATION: underline">Section 7</font> of notice of the commencement of any action, the indemnified party shall, if a claim in respect thereof is to be made against an indemnifying party under this <font style="DISPLAY: inline; TEXT-DECORATION: underline">Section 7</font>, notify such indemnifying party in writing of the commencement of that action; <font style="FONT-STYLE: italic; DISPLAY: inline">provided, however</font>, that the failure to notify the indemnifying party shall not relieve it from any liability which it may have under this <font style="DISPLAY: inline; TEXT-DECORATION: underline">Section 7</font> except to the extent it has been materially prejudiced by such failure; 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TEXT-DECORATION: underline">Section 7</font> for any legal or other expenses subsequently incurred by the indemnified party in connection with the defense of such action other than reasonable costs of investigation; <font style="FONT-STYLE: italic; DISPLAY: inline">provided, however</font>, that any indemnified party shall have the right to employ separate counsel in any such action and to participate in the defense of such action but the fees and expenses of such counsel (other than reasonable costs of investigation) shall be at the expense of such indemnified party unless (i) the engagement thereof has been specifically authorized in writing by the Company in the case of a claim for indemnification under <font style="DISPLAY: inline; TEXT-DECORATION: underline">Section7(a),</font> or&#160;&#160;LCM in the case of a claim for indemnification under <font style="DISPLAY: inline; TEXT-DECORATION: underline">Section 7(b)</font>, (ii) such indemnified party shall have been advised by its counsel that there may be one or more legal defenses available to it which are different from or additional to those available to the indemnifying party, or (iii) the indemnifying party has failed to assume the defense of such action and employ counsel reasonably satisfactory to the indemnified party within a reasonable period of time after notice of the commencement of the action or the indemnifying party does not diligently defend the action after assumption of the defense, in which case, if such indemnified party notifies the indemnifying party in writing that it elects to employ separate counsel at the expense of the indemnifying party, the indemnifying party shall not have the right to assume the defense of (or, in the case of a failure to diligently defend the action after assumption of the defense, to continue to defend) such action on behalf of such indemnified party and the indemnifying party shall be responsible for legal or other expenses subsequently incurred by such indemnified party in connection with the defense of such action; 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TEXT-DECORATION: underline">Section 7</font> shall include, but not be limited to, (x) reasonable legal fees and expenses of counsel to the indemnified party and any other expenses in investigating, or preparing to defend or defending against, or appearing as a third party witness in respect of, or otherwise incurred in connection with, any action, investigation, proceeding or claim, and (y) all amounts paid in settlement of any of the foregoing.&#160;&#160;No indemnifying party shall, without the prior written consent of the indemnified parties, settle or compromise or consent to the entry of judgment with respect to any pending or threatened action or any claim whatsoever, in respect of which indemnification or contribution could be sought under this <font style="DISPLAY: inline; TEXT-DECORATION: underline">Section 7</font> (whether or not the indemnified parties are actual or potential parties thereto), unless such settlement, compromise or consent (i) includes an unconditional release of each indemnified party in form and substance reasonably satisfactory to such indemnified party from all liability arising out of such action or claim and (ii) does not include a statement as to or an admission of fault, culpability or a failure to act by or on behalf of any indemnified party.&#160;&#160;Subject to the provisions of the following sentence, no indemnifying party shall be liable for settlement of any pending or threatened action or any claim whatsoever that is effected without its written consent (which consent shall not be unreasonably withheld or delayed), but if settled with its written consent, if its consent has been unreasonably withheld or delayed or if there be a judgment for the plaintiff in any such matter, the indemnifying party agrees to indemnify and hold harmless any indemnified party from and against any loss or liability by reason of such settlement or judgment.&#160;&#160;In addition, if at any time an indemnified party shall have requested that an indemnifying party reimburse the indemnified party for fees and expenses of counsel, such indemnifying party agrees that it shall be liable for any settlement of the nature contemplated herein effected without its written consent if (i) such settlement is entered into more than forty-five (45) days after receipt by such indemnifying party of the request for reimbursement, (ii) such indemnifying party shall have received notice of the terms of such settlement at least thirty (30) days prior to such settlement being entered into and (iii) such indemnifying party shall not have reimbursed such indemnified party in accordance with such request prior to the date of such settlement.</font></div>

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<div style="TEXT-ALIGN: justify; LINE-HEIGHT: 1.25; TEXT-INDENT: 72pt; MARGIN-LEFT: 36pt"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">(d)<font id="TAB2" style="LETTER-SPACING: 9pt">&#160;&#160;&#160;</font></font><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">If the indemnification provided for in this <font style="DISPLAY: inline; TEXT-DECORATION: underline">Section 7</font> is unavailable or insufficient to hold harmless an indemnified party under <font style="DISPLAY: inline; TEXT-DECORATION: underline">Section 7(a)</font> or <font style="DISPLAY: inline; TEXT-DECORATION: underline">Section 7(b)</font>, then each indemnifying party shall, in lieu of indemnifying such indemnified party, contribute to the amount paid, payable or otherwise incurred by such indemnified party as a result of such loss, claim, damage, expense or liability (or any action, investigation or proceeding in respect thereof), as incurred, (i) in such proportion as shall be appropriate to reflect the relative benefits received by the Company on the one hand and the Underwriter on the other hand from the Offering, or (ii) if the allocation provided by clause (i) of this <font style="DISPLAY: inline; TEXT-DECORATION: underline">Section 7(d)</font> is not permitted by applicable law, in such proportion as is appropriate to reflect not only the relative benefits referred to in clause (i) of this <font style="DISPLAY: inline; TEXT-DECORATION: underline">Section 7(d)</font> but also the relative fault of the Company on the one hand and the Underwriter on the other with respect to the statements, omissions, acts or failures to act which resulted in such loss, claim, damage, expense or liability (or any action, investigation or proceeding in respect thereof) as well as any other relevant equitable considerations.&#160;&#160;The relative benefits received by the Company on the one hand and the Underwriter on the other with respect to the Offering shall be deemed to be in the same proportion as the total net proceeds from the Offering under this Agreement (before deducting expenses) received by the Company bear to the total underwriting discount and commission received by the Underwriter in connection with the Offering, in each case as set forth in the table on the cover page of the Prospectus.&#160;&#160;The relative fault of the Company on the one hand and the Underwriter on the other shall be determined by reference to, among other things, whether the untrue or alleged untrue statement of a material fact or the omission or alleged omission to state a material fact relates to information supplied by the Company on the one hand or the Underwriter on the other, the intent of the parties and their relative knowledge, access to information and opportunity to correct or prevent such untrue statement, omission, act or failure to act; <font style="FONT-STYLE: italic; DISPLAY: inline">provided</font> that the parties hereto agree that the written information furnished to the Company by the Underwriter for use in any Registration Statement or the Prospectus, or in any amendment or supplement thereto, consists solely of the Underwriter&#8217;s Information as defined in <font style="DISPLAY: inline; TEXT-DECORATION: underline">Section 16</font>.&#160;&#160;The Company and the Underwriter agree that it would not be just and equitable if contributions pursuant to this <font style="DISPLAY: inline; TEXT-DECORATION: underline">Section 7(d)</font> were to be determined by pro rata allocation or by any other method of allocation that does not take into account the equitable considerations referred to herein.&#160;&#160;The amount paid or payable by an indemnified party as a result of the loss, claim, damage, expense, liability, action, investigation or proceeding referred to above in this <font style="DISPLAY: inline; TEXT-DECORATION: underline">Section 7(d)</font> shall be deemed to include, for purposes of this <font style="DISPLAY: inline; TEXT-DECORATION: underline">Section 7(d)</font>, any legal or other expenses reasonably incurred by such indemnified party in connection with investigating, preparing to defend or defending against or appearing as a third party witness in respect of, or otherwise incurred in connection with, any such loss, claim, damage, expense, liability, action, investigation or proceeding.&#160;&#160;Notwithstanding the provisions of this <font style="DISPLAY: inline; TEXT-DECORATION: underline">Section 7(d)</font><!--EFPlaceholder--><font style="DISPLAY: inline; TEXT-DECORATION: underline">(d)</font>, the Underwriter shall not be required to contribute any amount in excess of the total underwriting discount and commission received by the Underwriter in connection with the Offering, less the amount of any damages which the Underwriter has otherwise paid or become liable to pay by reason of any untrue or alleged untrue statement, omission or alleged omission, act or alleged act or failure to act or alleged failure to act.&#160;&#160;No person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) shall be entitled to contribution from any person who was not guilty of such fraudulent misrepresentation.</font></div>

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<div style="TEXT-ALIGN: justify; LINE-HEIGHT: 1.25; TEXT-INDENT: 0pt; MARGIN-LEFT: 0pt"><FONT STYLE="font: normal small-caps 10pt Times New Roman">8.<FONT STYLE="letter-spacing: 9pt">&#160;&#160;&#160;</FONT></FONT><FONT STYLE="text-transform: uppercase"><I>Termination</I></FONT>.&#160;&#160;The
obligations of the Underwriter hereunder may be terminated by the Underwriter, in its absolute discretion by notice given to the
Company prior to delivery of and payment for the Shares and Warrants if, prior to that time, any of the events described in <U>Sections
6(i)</U>, <U>6(j)</U>, <U>6(k)</U> or <U>6(l)</U> have occurred or if the Underwriter shall decline to purchase the Shares and
Warrants&#160;&#160;for any reason permitted under this Agreement.</div>

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<DIV STYLE="text-align: justify; line-height: 1.25; text-indent: 0pt; margin-left: 0pt"><FONT STYLE="font: normal small-caps 10pt Times New Roman">9.<FONT STYLE="letter-spacing: 9pt">&#160;&#160;&#160;</FONT></FONT><FONT STYLE="text-transform: uppercase"><I>Reimbursement
Of Underwriter&#8217;s Expenses</I></FONT>.&#160;&#160;Notwithstanding anything to the contrary in this Agreement, if (a) this
Agreement shall have been terminated pursuant to <U>Section 7</U>, (b) the Company shall fail to tender the Shares or Warrants
to the Underwriter for any reason not permitted under this Agreement, (c) the Underwriter shall decline to purchase the Shares
and Warrants for any reason permitted under this Agreement or (d) the sale of the Shares and Warrants is not consummated because
any condition to the obligations of the Underwriter set forth herein is not satisfied or because of the refusal, inability or
failure on the part of the Company to perform any agreement herein or to satisfy any condition or to comply with the provisions
hereof, then, the Company shall reimburse the Underwriter&#8217;s out-of-pocket expenses in accordance with <U>Section 5</U> and,
in addition, the Company shall reimburse the Underwriter for the reasonable fees and expenses of the&#160;&#160;Underwriter&#8217;s
counsel and for all other accountable out-of-pocket expenses as shall have been reasonably incurred by them in connection with
this Agreement and the proposed Offering, and promptly upon demand the Company shall pay the full amount thereof to the Underwriter.</div>

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<div style="TEXT-ALIGN: justify; LINE-HEIGHT: 1.25; TEXT-INDENT: 0pt; MARGIN-LEFT: 0pt"><FONT STYLE="font: normal small-caps 10pt Times New Roman">10.<FONT STYLE="letter-spacing: 9pt">&#160;&#160;&#160;</FONT></FONT><FONT STYLE="text-transform: uppercase"><I>Absence
Of Fiduciary Relationship</I></FONT>.&#160;&#160;The Company acknowledges and agrees that:</div>

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<div style="TEXT-ALIGN: justify; LINE-HEIGHT: 1.25; TEXT-INDENT: 36pt; MARGIN-LEFT: 36pt"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">(a)<font id="TAB2" style="LETTER-SPACING: 9pt">&#160;&#160;&#160;</font></font><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">the Underwriter&#8217;s responsibility to the Company is solely contractual in nature, the Underwriter has been retained solely to act as Underwriter in connection with the Offering and no fiduciary, advisory or agency relationship between the Company and the Underwriter has been created in respect of any of the transactions contemplated by this Agreement, irrespective of whether the Underwriter or Lazard Fr&#232;res &amp; Co. LLC has advised or is advising the Company on other matters;</font></div>

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<div style="TEXT-ALIGN: justify; LINE-HEIGHT: 1.25; TEXT-INDENT: 36pt; MARGIN-LEFT: 36pt"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">(b)<font id="TAB2" style="LETTER-SPACING: 9pt">&#160;&#160;&#160;</font></font><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">the price of the Shares and Warrants set forth in this Agreement was established by the Company following discussions and arms-length negotiations with the Underwriter, and the Company is capable of evaluating and understanding, and understands and accepts, the terms, risks and conditions of the transactions contemplated by this Agreement;</font></div>

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<div style="TEXT-ALIGN: justify; LINE-HEIGHT: 1.25; TEXT-INDENT: 36pt; MARGIN-LEFT: 36pt"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">(c)<font id="TAB2" style="LETTER-SPACING: 9pt">&#160;&#160;&#160;</font></font><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">it has been advised that the Underwriter and Lazard Fr&#232;res &amp; Co. LLC and their affiliates are engaged in a broad range of transactions which may involve interests that differ from those of the Company and that the Underwriter has no obligation to disclose such interests and transactions to the Company by virtue of any fiduciary, advisory or agency relationship; and</font></div>

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<div style="TEXT-ALIGN: justify; LINE-HEIGHT: 1.25; TEXT-INDENT: 36pt; MARGIN-LEFT: 36pt"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">(d)<font id="TAB2" style="LETTER-SPACING: 9pt">&#160;&#160;&#160;</font></font><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">it waives, to the fullest extent permitted by law, any claims it may have against the Underwriter for breach of fiduciary duty or alleged breach of fiduciary duty and agrees that the Underwriter shall have no liability (whether direct or indirect) to the Company in respect of such a fiduciary duty claim or to any person asserting a fiduciary duty claim on behalf of or in right of the Company, including stockholders, employees or creditors of the Company.</font></div>

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<div style="TEXT-ALIGN: justify; LINE-HEIGHT: 1.25; TEXT-INDENT: 0pt; MARGIN-LEFT: 0pt"><FONT STYLE="font: normal small-caps 10pt Times New Roman">11.<FONT STYLE="letter-spacing: 9pt">&#160;&#160;&#160;</FONT></FONT><FONT STYLE="text-transform: uppercase"><I>Successors;
Persons Entitled To Benefit Of Agreement</I></FONT><I>.</I>&#160;&#160;This Agreement shall inure to the benefit of and be binding
upon the Underwriter, the Company, and their respective successors and assigns.&#160;&#160;This Agreement shall also inure to
the benefit of Lazard Fr&#232;res &amp; Co. LLC and each of its successors and assigns, which shall be third party beneficiaries
hereof.&#160;&#160;Nothing expressed or mentioned in this Agreement is intended or shall be construed to give any person, other
than the persons mentioned in the preceding sentences, any legal or equitable right, remedy or claim under or in respect of this
Agreement, or any provisions herein contained, this Agreement and all conditions and provisions hereof being intended to be and
being for the sole and exclusive benefit of such persons and for the benefit of no other person; except that the representations,
warranties, covenants, agreements and indemnities of the Company contained in this Agreement shall also be for the benefit of
the Underwriter Indemnified Parties, and the indemnities of the Underwriter shall be for the benefit of the Company Indemnified
Parties.&#160;&#160;It is understood that Underwriter&#8217;s responsibility to the Company is solely contractual in nature and
the Underwriter does not owe the Company, or any other party, any fiduciary duty as a result of this Agreement.</div>

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<div style="TEXT-ALIGN: justify; LINE-HEIGHT: 1.25; TEXT-INDENT: 0pt; MARGIN-LEFT: 0pt"><font style="FONT-VARIANT: small-caps; FONT-STYLE: normal; DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">12.<font id="TAB2" style="LETTER-SPACING: 9pt">&#160;&#160;&#160;</font></font><font style="FONT-VARIANT: small-caps; FONT-STYLE: italic; DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">SURVIVAL OF INDEMNITIES, REPRESENTATIONS, WARRANTIES, ETC</font><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">.&#160;&#160;The respective indemnities, covenants, agreements, representations, warranties and other statements of the Company and the Underwriter, as set forth in this Agreement or made by them respectively, pursuant to this Agreement, shall remain in full force and effect, regardless of any investigation made by or on behalf of the Underwriter, the Company or any person controlling any of them and shall survive delivery of and payment for the Shares and Warrants.&#160;&#160;Notwithstanding any termination of this Agreement, including without limitation any termination pursuant to <font style="DISPLAY: inline; TEXT-DECORATION: underline">Section 8</font>, the indemnity and contribution and reimbursement agreements contained in&#160;&#160;<font style="DISPLAY: inline; TEXT-DECORATION: underline">Sections 7</font> and <font style="DISPLAY: inline; TEXT-DECORATION: underline">9</font> and the covenants, representations, warranties set forth in this Agreement shall not terminate and shall remain in full force and effect at all times.</font></div>

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<div style="TEXT-ALIGN: justify; LINE-HEIGHT: 1.25; TEXT-INDENT: 0pt; MARGIN-LEFT: 0pt"><FONT STYLE="font: normal small-caps 10pt Times New Roman">13.<FONT STYLE="letter-spacing: 9pt">&#160;&#160;&#160;</FONT></FONT><FONT STYLE="text-transform: uppercase"><I>Notices</I></FONT>.&#160;&#160;All
statements, requests, notices and agreements hereunder shall be in writing, and:</div>

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<div style="TEXT-ALIGN: justify; LINE-HEIGHT: 1.25; TEXT-INDENT: 36pt; MARGIN-LEFT: 36pt"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">(a)<font id="TAB2" style="LETTER-SPACING: 9pt">&#160;&#160;&#160;</font></font><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">if to the Underwriter, shall be delivered or sent by mail, telex, facsimile transmission or email to Lazard Capital Markets LLC, 30 Rockefeller Plaza, New York, NY 10020, Attention: General Counsel, Fax: 212-830-3615; and</font></div>

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<div style="TEXT-ALIGN: justify; LINE-HEIGHT: 1.25; TEXT-INDENT: 36pt; MARGIN-LEFT: 36pt"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">(b)<font id="TAB2" style="LETTER-SPACING: 9pt">&#160;&#160;&#160;</font></font><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">if to the Company, shall be delivered or sent by mail, telex, facsimile transmission or email to Pacific Ethanol, Inc., 400 Capitol Mall, Suite 2060, Sacramento, CA&#160;&#160;95814, Attention: General Counsel, Facsimile: (916) 446-3937.</font></div>

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<div style="TEXT-ALIGN: justify; LINE-HEIGHT: 1.25; TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt"><font style="FONT-STYLE: italic; DISPLAY: inline">provided, however</font>, that any notice to the Underwriter pursuant to <font style="DISPLAY: inline; TEXT-DECORATION: underline">Section 7</font> shall be delivered or sent by mail, telex or facsimile transmission to the Underwriter at its address set forth in its acceptance telex to the Underwriter, which address will be supplied to any other party hereto by the Underwriter upon request.&#160;&#160;Any such statements, requests, notices or agreements shall take effect at the time of receipt thereof, except that any such statement, request, notice or agreement delivered or sent by email shall take effect at the time of confirmation of receipt thereof by the recipient thereof.</font></div>

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<div style="TEXT-ALIGN: justify; LINE-HEIGHT: 1.25; TEXT-INDENT: 0pt; MARGIN-LEFT: 0pt"><FONT STYLE="font: normal small-caps 10pt Times New Roman; color: #000000">14.<FONT STYLE="letter-spacing: 9pt">&#160;&#160;&#160;</FONT></FONT><FONT STYLE="text-transform: uppercase"><I>Definition
Of Certain Terms</I></FONT>.&#160;&#160;For purposes of this Agreement, (a) &#8220;business day&#8221; means any day on which
the NASDAQ CM is open for trading, (b) &#8220;subsidiary&#8221; has the meaning set forth in Rule 405 of the Rules and Regulations,
and (c) &ldquo;to the Company&#8217;s knowledge&#8221; or &#8220;to the knowledge of the Company&#8221; or words of similar import
shall mean to the knowledge of any officer or director of the Company after a reasonable investigation of such facts by such officer
or director.</DIV>

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<div style="TEXT-ALIGN: justify; LINE-HEIGHT: 1.25; TEXT-INDENT: 0pt; MARGIN-LEFT: 0pt"><FONT STYLE="font: normal small-caps 10pt Times New Roman; color: #000000">15</FONT><B>.<FONT STYLE="letter-spacing: 9pt">&#160;&#160;&#160;</FONT></B><FONT STYLE="font: 10pt Times New Roman, Times, Serif; text-transform: uppercase"><I>Governing
Law, Agent For Service And Jurisdiction<FONT STYLE="font-variant: small-caps">.</FONT></I></FONT><B> This Agreement shall be governed
by and construed in accordance with the laws of the State of New York, including without limitation Section 5-1401 of the New
York General Obligations Law.&#160;&#160;</B>No legal proceeding may be commenced, prosecuted or continued in any court other
than the courts of the State of New York located in the City and County of New York or in the United States District Court for
the Southern District of New York, which courts shall have jurisdiction over the adjudication of such matters, and the Company
and the Underwriter each hereby consent to the jurisdiction of such courts and personal service with respect thereto.&#160;&#160;The
Company and the Underwriter each hereby waive all right to trial by jury in any legal proceeding (whether based upon contract,
tort or otherwise) in any way arising out of or relating to this Agreement.&#160;&#160;The Company agrees that a final judgment
in any such legal proceeding brought in any such court shall be conclusive and binding upon the Company and the Underwriter and
may be enforced in any other courts in the jurisdiction of which the Company is or may be subject, by suit upon such judgment.</div>

<div style="TEXT-ALIGN: justify; LINE-HEIGHT: 1.25; TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt">&#160;</div>

<div style="TEXT-ALIGN: justify; LINE-HEIGHT: 1.25; TEXT-INDENT: 0pt; MARGIN-LEFT: 0pt"><FONT STYLE="font: normal small-caps 10pt Times New Roman; color: #000000">16.<FONT STYLE="letter-spacing: 9pt">&#160;&#160;&#160;</FONT></FONT><FONT STYLE="text-transform: uppercase"><I>Underwriter&#8217;s
Information</I></FONT>.&#160;&#160;The parties hereto acknowledge and agree that, for all purposes of this Agreement, the &#8220;Underwriter&#8217;s
Information&#8221; consists solely of the following information in the Prospectus: the statements concerning the Underwriters
contained in the first paragraph, in the fourth paragraph concerning the terms of the Offering, concerning the Underwriters and
Lazard Fr&#232;res &amp; Co. LLC in the eighth paragraph, concerning stabilization by the Underwriters in the eleventh paragraph
and in the twelfth paragraph concerning the Offering, in each case under the heading &#8220;Underwriting.&#8221;</div>

<div style="TEXT-ALIGN: justify; LINE-HEIGHT: 1.25; TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt">&#160;</div>

<div style="TEXT-ALIGN: justify; LINE-HEIGHT: 1.25; TEXT-INDENT: 0pt; MARGIN-LEFT: 0pt"><FONT STYLE="font: normal small-caps 10pt Times New Roman; color: #000000">17.<FONT STYLE="letter-spacing: 9pt">&#160;&#160;&#160;</FONT></FONT><FONT STYLE="text-transform: uppercase"><I>Partial
Unenforceability</I></FONT>.&#160;&#160;The invalidity or unenforceability of any section, paragraph, clause or provision of this
Agreement shall not affect the validity or enforceability of any other section, paragraph, clause or provision hereof.&#160;&#160;If
any section, paragraph, clause or provision of this Agreement is for any reason determined to be invalid or unenforceable, there
shall be deemed to be made such minor changes (and only such minor changes) as are necessary to make it valid and enforceable.</div>

<div style="TEXT-ALIGN: justify; LINE-HEIGHT: 1.25; TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt">&#160;</div>

<div style="TEXT-ALIGN: justify; LINE-HEIGHT: 1.25; TEXT-INDENT: 0pt; MARGIN-LEFT: 0pt"><FONT STYLE="font: normal small-caps 10pt Times New Roman; color: #000000">18.<FONT STYLE="letter-spacing: 9pt">&#160;&#160;&#160;</FONT></FONT><FONT STYLE="text-transform: uppercase"><I>General</I></FONT>.&#160;&#160;This
Agreement constitutes the entire agreement of the parties to this Agreement and supersedes all prior written or oral and all contemporaneous
oral agreements, understandings and negotiations with respect to the subject matter hereof.&#160;&#160;In this Agreement, the
masculine, feminine and neuter genders and the singular and the plural include one another.&#160;&#160;The section headings in
this Agreement are for the convenience of the parties only and will not affect the construction or interpretation of this Agreement.&#160;&#160;This
Agreement may be amended or modified, and the observance of any term of this Agreement may be waived, only by a writing signed
by the Company and the Underwriter.</div>

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<div style="TEXT-ALIGN: justify; LINE-HEIGHT: 1.25; TEXT-INDENT: 0pt; MARGIN-LEFT: 0pt"><FONT STYLE="font: normal small-caps 10pt Times New Roman; color: #000000">19.<FONT STYLE="letter-spacing: 9pt">&#160;&#160;&#160;</FONT></FONT><FONT STYLE="text-transform: uppercase"><I>Research
Analyst Independence</I></FONT><I>.&#160; </I>The Company acknowledges that each Underwriter&#8217;s research analysts and research
departments are required to be independent from its investment banking division and are subject to certain regulations and internal
policies, and that such Underwriter&#8217;s research analysts may hold views and make statements or investment recommendations
and/or publish research reports with respect to the Company and/or the Offering that differ from the views of their investment
banking division.&#160;&#160;The Company acknowledges that each Underwriter is a full service securities firm and as such from
time to time, subject to applicable securities laws, rules and regulations, may effect transactions for its own account or the
account of its customers and hold long or short positions in debt or equity securities of the Company; provided, however, that
nothing in this <U>Section 19</U> shall relieve either Underwriter of any responsibility or liability it may otherwise bear in
connection with activities in violation of applicable securities laws, rules or regulations.</div>

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<div style="TEXT-ALIGN: justify; LINE-HEIGHT: 1.25; TEXT-INDENT: 0pt; MARGIN-LEFT: 0pt"><FONT STYLE="font: normal small-caps 10pt Times New Roman">20.<FONT STYLE="letter-spacing: 9pt">&#160;&#160;&#160;</FONT></FONT><FONT STYLE="text-transform: uppercase"><I>Counterparts</I></FONT>.&#160;&#160;This
Agreement may be signed in any number of counterparts, each of which shall be an original, with the same effect as if the signatures
thereto and hereto were upon the same instrument and such signatures may be delivered by facsimile.</div>

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<div>&#160;&#160; </div>

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<td colspan="2" valign="top" width="38%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">Very truly yours,</font></td>
<td valign="top" width="12%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;</font></td>
</tr><tr>
<td valign="top" width="50%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;</font></td>
<td colspan="2" valign="top" width="38%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;</font></td>
<td valign="top" width="12%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;</font></td>
</tr><tr>
<td valign="top" width="50%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;</font></td>
<td colspan="2" valign="top" width="38%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">PACIFIC ETHANOL, INC.</font></td>
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<td valign="top" width="50%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;</font></td>
<td valign="top" width="3%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;</font></td>
<td valign="top" width="35%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;</font></td>
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</td>
<TD NOWRAP STYLE="text-align: left; vertical-align: top; width: 35%; border-bottom: Black 1pt solid"><FONT STYLE="font: 10pt times new roman">/s/&#160;Neil Koehler</FONT></td>
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<td valign="top" width="50%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;</font></td>
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<td valign="top" width="35%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">Title: Chief Executive Officer</font></td>
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<td valign="top" width="50%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;</font></td>
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<td valign="top" width="35%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;</font></td>
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</div>

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<TD NOWRAP STYLE="text-align: left; vertical-align: top; border-bottom: Black 1pt solid"><FONT STYLE="font: 10pt times new roman">/s/&#160;Andy Laszlo</font></FONT></td>
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<DOCUMENT>
<TYPE>EX-5.1
<SEQUENCE>3
<FILENAME>peix_8k-ex0501.htm
<DESCRIPTION>OPINION LETTER
<TEXT>
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<!-- Field: Rule-Page --><DIV ALIGN="LEFT" STYLE="margin-top: 3pt; margin-bottom: 3pt"><DIV STYLE="font-size: 1pt; border-top: Black 1pt solid; width: 100%">&nbsp;</DIV></DIV><!-- Field: /Rule-Page -->

<P STYLE="margin: 0; text-align: right"><B>Exhibit 5.1</B></P>

<P STYLE="margin: 0">&nbsp;</P>

<P STYLE="margin: 0">&nbsp;</P>

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    <TD STYLE="width: 34%; padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt">&nbsp;</TD>
    <TD STYLE="width: 33%; padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: center">&nbsp;<IMG SRC="troutman.jpg" ALT=""></TD>
    <TD STYLE="width: 33%; padding-right: 5.4pt; padding-left: 5.4pt">
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: right">TROUTMAN SANDERS LLP</P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: right">Attorneys at Law</P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: right">5 Park Plaza, Suite 1400</P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: right">Irvine, CA 92614-2545</P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: right">949.622.2700 telephone</P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: right">troutmansanders.com</P></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">September 21, 2012</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Pacific Ethanol, Inc.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">400 Capital Mall, Suite 2060</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Sacramento, California 95814</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in">Re:&#9;<U>Registration Statement on Form S-3</U></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Ladies and Gentlemen:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in; text-align: justify">We have acted as counsel to Pacific Ethanol,
Inc., a Delaware corporation (the &ldquo;<U>Company</U>&rdquo;), in connection with the proposed offer and sale by the Company
of up to 27,500,000 units (the &ldquo;<U>Firm Units</U>&rdquo;), and, pursuant to the exercise by the Underwriter (as defined below)
of their over-allotment purchase right, up to 4,125,000 additional units (the &ldquo;<U>Over-Allotment Units</U>, and, together
with the Firm Units, the &ldquo;<U>Units</U>&rdquo;), with each Unit consisting of (i)&nbsp;one share of common stock of the Company,
par value $0.001 per share (the &ldquo;<U>Common Stock</U>&rdquo;) (such shares of Common Stock constituting a part of the Units,
collectively, the &ldquo;<U>Shares</U>&rdquo;) and (ii)&nbsp;one warrant to purchase one share of Common Stock (such warrant constituting
a part of the Units, collectively, the &ldquo;<U>Warrants</U>&rdquo;) pursuant to an Underwriting Agreement, dated as of September
21, 2012 (the &ldquo;<U>Underwriting Agreement</U>&rdquo;), by and between the Company and Lazard Capital Markets LLC (the &ldquo;<U>Underwriter</U>&rdquo;)
as described in the Company&rsquo;s Registration Statement on Form S-3 (File No. 333-180731) filed with the Securities and Exchange
Commission (the &ldquo;<U>Commission</U>&rdquo;) under the Securities Act of 1933, as amended (the &ldquo;<U>Securities Act</U>&rdquo;)
(as amended and supplemented through and including the date hereof, including by the preliminary prospectus (the &ldquo;<U>Prospectus</U>&rdquo;)
dated September 20, 2012 and the free writing prospectus dated September 21, 2012, the &ldquo;<U>Registration Statement</U>&rdquo;).
The shares of Common Stock to be issued by the Company upon exercise of the Warrants are hereinafter referred to collectively as
the &ldquo;<U>Warrant Shares</U>&rdquo;. The Shares, the Warrants and the Warrant Shares are hereinafter referred to collectively
as the &ldquo;<U>Securities</U>&rdquo;.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in; text-align: justify">This opinion letter is being furnished in
connection with the requirements of Item 601(b)(5) of Regulation S-K under the Securities Act, and no opinion is expressed herein
as to any matter pertaining to the contents of the Registration Statement, other than as expressly stated herein with respect to
the issuance of the Securities.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in; text-align: justify">As such counsel and for purposes of our
opinions set forth herein, we have examined and relied upon the original or copies, certified or otherwise identified to our satisfaction,
of such documents, resolutions, certificates and instruments of the Company, and have reviewed certificates of public officials,
statutes, records and such other instruments and documents and have made such investigations of law as we have considered necessary
or appropriate as a basis for the opinions set forth in this opinion letter. In such examination, we have assumed (i) the genuineness
of all </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-transform: uppercase; text-align: center">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">September 21, 2012</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Page 2</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0pt; text-align: justify">signatures on all agreements, instruments and other documents submitted to us; (ii) the legal capacity and authority of
all persons or entities executing all agreements, instruments and other documents submitted to us; (iii) the authenticity and completeness
of all agreements, instruments, corporate records, certificates and other documents submitted to us as originals; (iv) that all
agreements, instruments, corporate records, certificates and other documents submitted to us as certified, electronic, facsimile,
conformed, photostatic or other copies conform to authentic originals thereof, and that such originals are authentic and complete;
(v) the due authorization, execution and delivery of all agreements, instruments and other documents by all parties thereto; (vi)
that no documents submitted to us have been amended or terminated orally or in writing except as has been disclosed to us; (vii)
that the statements contained in the certificates and comparable documents of public officials, officers and representatives of
the Company and other persons on which we have relied for the purposes of this opinion letter are true and correct; and (viii)
that each of the officers and directors of the Company has properly exercised his or her fiduciary duties. As to all questions
of fact material to this opinion letter and as to the materiality of any fact or other matter referred to herein, we have relied
(without independent investigation) upon certificates or comparable documents of officers and representatives of the Company. In
addition, with your consent, we have assumed that choice of law provisions are legally enforceable.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in; text-align: justify">Subject to the foregoing and the other matters
set forth herein, it is our opinion that, as of the date hereof:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.75in; text-align: justify">1.<FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT>The Shares have been duly authorized by the Company and, when and to the extent issued and sold in accordance with the terms
of, and in the manner contemplated by, the Underwriting Agreement, including payment in full to the Company of all consideration
required therefor, and as described in the Registration Statement, the Shares will be validly issued, fully paid and non-assessable.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.75in; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.75in; text-align: justify">2.<FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT>The Warrants have been duly authorized by the Company and, when and to the extent issued and sold in accordance with the
terms of, and in the manner contemplated by, the Underwriting Agreement, including payment in full to the Company of all consideration
required therefor, and as described in the Registration Statement,&nbsp;the Warrants will be legally valid and binding obligations
of the Company, enforceable against the Company in accordance with their terms.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.75in; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.75in; text-align: justify">3.<FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT>The Warrant Shares have been duly authorized by the Company and, when and to the extent issued in accordance with the terms
of, and in the manner contemplated by, the Underwriting Agreement and the Warrants, including the due and proper exercise of the
Warrants and payment in full to the Company of the exercise price for the Warrant Shares as required thereunder, and as described
in the Registration Statement, the Warrant Shares will be validly issued, fully paid and non-assessable.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.75in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.75in; text-align: justify">Our opinions are subject to (i) the effect
of any bankruptcy, insolvency, reorganization, moratorium or similar laws and principles affecting creditors&rsquo; rights generally
(including, without limitation, fraudulent transfer or fraudulent conveyance laws); and (ii) the effect of general principles of
equity (including, without limitation, concepts of materiality, reasonableness, good faith and fair&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.75in">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">September 21, 2012</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Page 3</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0pt; text-align: justify"> dealing) and the availability
of equitable remedies (including, without limitation, specific performance and equitable relief), regardless of whether considered
in a proceeding in equity or at law.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in; text-align: justify">We express no opinion with regard to the
applicability or effect of the law of any jurisdiction other than the General Corporation Law of the State of Delaware and, with
respect to our opinions relating to the enforceability of the Warrants, the laws of the State of New York, in each case as in effect
on the date hereof.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in; text-align: justify">This opinion letter is prepared for your
use in connection with the Registration Statement and may be relied upon by you and by persons entitled to rely upon it pursuant
to the applicable provisions of the Securities Act solely for such purpose. We hereby consent to the filing of this opinion as
an exhibit to the Company&rsquo;s Current Report on Form 8-K dated September 21, 2012, the incorporation of this opinion by reference
in the Registration Statement and to the use of our name under the caption &ldquo;Legal Matters&rdquo; in the Prospectus and Registration
Statement.&nbsp; In giving this consent, we do not hereby admit that we come within the category of persons whose consent is required
under Section&nbsp;7 of the Securities Act, or the rules or regulations of the Commission promulgated thereunder.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 3.25in">Very truly yours,</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 3.25in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 3.25in">/s/ Troutman Sanders LLP</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>



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<P STYLE="margin-top: 0; text-align: center; margin-bottom: 0">3</P>

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<DOCUMENT>
<TYPE>EX-10.1
<SEQUENCE>4
<FILENAME>peix_8k-ex1001.htm
<DESCRIPTION>FORM OF WARRANTS
<TEXT>
<HTML>
<HEAD>
     <TITLE></TITLE>
</HEAD>
<BODY STYLE="font: 10pt Times New Roman, Times, Serif">

<P STYLE="margin: 0"></P>

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<P STYLE="margin: 0; text-align: right"><B>Exhibit 10.1</B></P>

<P STYLE="margin: 0">&nbsp;</P>

<P STYLE="margin: 0"></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">PACIFIC ETHANOL, INC.</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">WARRANT TO PURCHASE COMMON STOCK</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Warrant No.: S-__</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Number of Shares of Common Stock: ____________</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Date of Issuance: ____________, 2012 (&quot;<B>Issuance
Date</B>&quot;)</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in">Pacific Ethanol, Inc.
a Delaware corporation (the &quot;<B>Company</B>&quot;), hereby certifies that, for good and valuable consideration, the receipt
and sufficiency of which are hereby acknowledged, ______________, the registered holder hereof or its permitted assigns (the &quot;<B>Holder</B>&quot;),
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 &quot;<B>Warrant</B>&quot;), at any time or times on or after the Issuance Date (the &ldquo;<B>Exercisability
Date&rdquo;)</B>, but not after 11:59 p.m., New York time, on the Expiration Date (as defined below), ______________ (_____________)<SUP>1
</SUP>fully paid nonassessable shares of Common Stock (as defined below)<B> </B>(the &quot;<B>Warrant Shares</B>&quot;). Except
as otherwise defined herein, capitalized terms in this Warrant shall have the meanings set forth in Section 16. This Warrant is
the Warrant to purchase Common Stock (this &quot;<B>Warrant</B>&quot;) issued pursuant the Company&rsquo;s Registration Statement
on Form S-3 (File number 333-180731) (the &ldquo;<B>Registration Statement</B>&rdquo;).</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in">1.&#9;<U>EXERCISE OF
WARRANT</U>.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1.5in">(a)&#9;<U>Mechanics
of Exercise</U>. Subject to the terms and conditions hereof, this Warrant may be exercised by the Holder on any day on or after
the Exercisability Date until after 11:59 p.m., New York time, on the Expiration Date (as defined below), in whole or in part,
by delivery of a written notice, in the form attached hereto as <U>Exhibit A</U> (the &quot;<B>Exercise Notice</B>&quot;), of
the Holder's election to exercise this Warrant. Within two (2) days following the Exercise Notice, the Holder shall make payment
to the Company of an amount equal to the applicable Exercise Price multiplied by the number of Warrant Shares as to which this
Warrant is being exercised (the &quot;<B>Aggregate Exercise Price</B>&quot;) in cash or by wire transfer of immediately available
funds, or provided the conditions for cashless exercise set forth in Section 1(d) are satisfied, by notifying the Company that
this Warrant is being exercised pursuant to a Cashless Exercise (as defined in Section 1(d)). The Holder shall not be required
to deliver the original Warrant in order to effect an exercise hereunder. Execution and delivery of the Exercise Notice with respect
to less than all of the Warrant Shares shall have the same effect as cancellation of the original Warrant and issuance of a new
Warrant evidencing the right to purchase the remaining number of Warrant Shares. On or before the first (1<SUP>st</SUP>) Business
Day following the date on which the Company has received the Exercise Notice, the Company shall transmit by facsimile or electronic
mail an acknowledgment of confirmation of receipt of the Exercise Notice to the Holder and the Company's transfer agent (the &quot;<B>Transfer
Agent</B>&quot;). On or before the third (3<SUP>rd</SUP>) Trading Day following the date on which the Company has received the
Exercise Notice (the &quot;<B>Share Delivery Date</B>&quot;), the Company shall (X) provided that the Transfer Agent is participating
in The Depository Trust Company (&quot;<B>DTC</B>&quot;) Fast Automated Securities Transfer Program, upon the request of the Holder,
credit such aggregate number of Warrant Shares 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 dispatch by overnight courier to the address as specified in
the Exercise Notice, a certificate, registered in the Company's share register in the name of the Holder or its designee, for
the number of shares of Common Stock to which the Holder is entitled pursuant to such exercise.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><SUP>1</SUP>Insert a number of shares equal
to 100% of the number of shares of Common Stock purchased under the Registration Statement.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Upon delivery of the 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 the Company shall as soon as practicable and
in no event later than three Business Days after any exercise and at its own expense, issue 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
to the nearest whole number. The Company shall pay any and all taxes which may be payable with respect to the issuance and delivery
of Warrant Shares upon exercise of this Warrant. Notwithstanding anything to the contrary herein, 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&rsquo;s failure to deliver
Warrant Shares to the Holder shall not be deemed to be a breach of this Warrant if the Company has not received the Aggregate Exercise
Price pursuant to the requirements of this Section 1(a).</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1.5in">(b)&#9;<U>Exercise
Price</U>. For purposes of this Warrant, &quot;<B>Exercise Price</B>&quot; means $0.59, subject to adjustment as provided herein.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1.5in">(c)&#9;<U>Company's
Failure to Timely Deliver Securities</U>. If the Company shall fail for any reason or for no reason to issue to the Holder on or
before the Share Delivery Date in compliance with the terms of this Section 1, 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, and if on or after the Share Delivery Date 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 shares of Common Stock issuable upon such exercise that the
Holder anticipated receiving from the Company (a <B>&quot;Buy-In&quot;</B>), then 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, if any) for the shares of Common Stock so purchased (the <B>&quot;Buy-In
Price&quot;</B>), at which point the Company's obligation to deliver such certificate or credit the Holder&rsquo;s balance account
with DTC for the number of shares of Common Stock to which the Holder is entitled upon the Holder&rsquo;s exercise hereunder (as
the case may be) (and to issue such Warrant Shares) shall terminate, or (ii) promptly honor its obligation to deliver to the Holder
a certificate or certificates representing such Warrant Shares 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, times (B) the Closing Sale Price on the
Trading Day immediately preceding the date of the Exercise Notice.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1.5in">(d)&#9;<U>Cashless
Exercise</U>. Notwithstanding anything contained herein to the contrary, if a registration statement covering the Warrant Shares
that are the subject of the Exercise Notice (the &ldquo;Unavailable Warrant Shares&rdquo;) or an exemption from registration is
not available for the resale of such Unavailable Warrant Shares, then in lieu of making the cash payment otherwise contemplated
to be made to the Company upon such exercise, the Holder can elect instead to receive upon such exercise the &ldquo;Net Number&rdquo;
of shares of Common Stock determined according to the following formula (a &ldquo;Cashless Exercise&rdquo;):</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1.5in">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 88pt; text-align: left; text-indent: 1in">Net Number = <U>(A
x B) - (A x C)</U></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 176pt; text-align: justify; text-indent: 1in">D</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 88pt; text-align: justify; text-indent: 1in">For purposes
of the foregoing formula:&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 154pt; text-align: left; text-indent: -44pt"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0pt"></P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 15%; padding-right: 3.85pt; text-align: justify">&nbsp;</TD>
    <TD STYLE="width: 4%; padding-right: 3.85pt; text-align: justify">A=</TD>
    <TD STYLE="width: 81%; text-align: left">the total number of shares with respect to which this Warrant is then being exercised.</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: 3.85pt; text-align: justify">&nbsp;</TD>
    <TD STYLE="padding-right: 3.85pt; text-align: justify">&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: 3.85pt; text-align: justify">&nbsp;</TD>
    <TD STYLE="padding-right: 3.85pt; text-align: justify">B=</TD>
    <TD STYLE="text-align: left">the arithmetic average of the Closing Sale Prices of the shares of Common Stock for the five (5) consecutive Trading Days ending
on the date immediately preceding the date of the Exercise Notice.</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: 3.85pt; text-align: justify">&nbsp;</TD>
    <TD STYLE="padding-right: 3.85pt; text-align: justify">&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: 3.85pt; text-align: justify">&nbsp;</TD>
    <TD STYLE="padding-right: 3.85pt; text-align: justify">C=</TD>
    <TD STYLE="text-align: left">the Exercise Price then in effect for the applicable Warrant Shares at the time of such exercise.</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: 3.85pt; text-align: justify">&nbsp;</TD>
    <TD STYLE="padding-right: 3.85pt; text-align: justify">&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: 3.85pt; text-align: justify">&nbsp;</TD>
    <TD STYLE="padding-right: 3.85pt; text-align: justify">D=</TD>
    <TD STYLE="text-align: left">the Closing Sale Price on the date of the Exercise Notice.</TD></TR>
</TABLE>


<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0pt"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0.75in 0pt 1.25in; text-align: justify; text-indent: -0.25in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1.5in">(e)&#9;<U>Rule 144</U>.
For purposes of Rule 144(d) promulgated under the Securities Act, as in effect on the date hereof, it is intended that the Warrant
Shares issued in a Cashless Exercise shall be deemed to have been acquired by the Holder, and the holding period for the Warrant
Shares shall be deemed to have commenced, on the Issuance Date.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1.5in">(f)&#9;<U>Disputes</U>.
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.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1.5in">(g)&#9;<U>Beneficial
Ownership Limitation.</U> Notwithstanding anything to the contrary contained herein, the Company shall not effect the exercise
of this Warrant, and the Holder shall not have the right to exercise this Warrant, to the extent that after giving effect to such
exercise, such Person (together with such Person&rsquo;s affiliates) would beneficially own in excess of 4.99% (the &ldquo;<B>Maximum
Percentage</B>&rdquo;)<B> </B>of the shares of Common Stock outstanding immediately after giving effect to such exercise. For purposes
of the foregoing sentence, the aggregate number of shares of Common Stock beneficially owned by such Person and its affiliates
shall include the number of shares of Common Stock issuable upon exercise of this Warrant with respect to which the determination
of such sentence is being made, but shall exclude shares of Common Stock which would be issuable upon (i)&nbsp;exercise of the
remaining, unexercised portion of this Warrant beneficially owned by such Person and its affiliates and (ii)&nbsp;exercise or conversion
of the unexercised or unconverted portion of any other securities of the Company beneficially owned by such Person and its affiliates
(including, without limitation, any convertible notes or convertible preferred stock or warrants) subject to a limitation on conversion
or exercise analogous to the limitation contained herein. Except as set forth in the preceding sentence, for purposes of this paragraph,
beneficial ownership shall be calculated in accordance with Section&nbsp;13(d) of the Securities Exchange Act of 1934, as amended.
For purposes of this Warrant, in determining the number of outstanding shares of Common Stock, the Holder may rely on the number
of outstanding shares of Common Stock as reflected in (1)&nbsp;the Company&rsquo;s most recent Form&nbsp;10-K, Form&nbsp;10-Q,
Current Report on Form&nbsp;8-K or other public filing with the Securities and Exchange Commission, as the case may be, (2)&nbsp;a
more recent public announcement by the Company or (3)&nbsp;any other notice by the Company or the Transfer Agent setting forth
the number of shares of Common Stock outstanding. 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. In any case, the number of outstanding shares of Common Stock shall be determined after giving effect to the conversion
or exercise of securities of the Company, including this Warrant, by the Holder and its affiliates since the date as of which such
number of outstanding shares of Common Stock was reported. By written notice to the Company, the Holder may from time to time 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 sixty-first (61<SUP>st</SUP>) day after such notice is delivered to the Company,
and (ii) any such increase or decrease will apply only to the Holder and not to any other holder of warrants. For the avoidance
of doubt, to the extent the limitation set forth in this Section 1(g) applies, the determination (i) of whether the exercise of
this Warrant may be effected (vis-a-vis other Options or Convertible Securities owned by the Holder or any of its Affiliates) and
(ii) of which such Options or Convertible 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). The provisions of this paragraph
shall be construed and implemented in a manner other than in strict conformity with the terms of this Section 1(g) to correct this
paragraph (or any portion hereof) which may be defective or inconsistent with the intended beneficial ownership limitation herein
contained or to make changes or supplements necessary or desirable to properly give effect to such limitation.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1.5in">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1.5in">(h)&#9;<U>Insufficient
Authorized Shares</U>.  If at any time from and after the ninetieth (90<SUP>th</SUP>) day following the Issuance Date and while
any of the 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 Warrants at least 125% of the maximum number of shares
of Common Stock as shall from time to time be necessary to effect the exercise of all of the Warrants then outstanding (without
regard to any limitations on exercise) (the &ldquo;<B>Required Reserve Amount</B>&rdquo;) (an &ldquo;<B>Authorized Share Failure</B>&rdquo;),
then the Company shall immediately deliver a notice to the Holder specifying the number of shares unavailable to satisfy its obligations
under this Warrant and shall take all action necessary to increase the Company&rsquo;s authorized shares of Common Stock to an
amount sufficient to allow the Company to reserve the Required Reserve Amount for the 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 &ldquo;<B>Authorized Share
Failure Deadline</B>&rdquo;), and assuming such Authorized Share Failure still exists, 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&rsquo;
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 upon any exercise of this Warrant at any time from and after the Authorized
Share Failure Deadline, the Company does not have sufficient authorized shares to deliver in satisfaction of such exercise, then
unless the Holder elects to void such exercise, the Company shall pay to the Holder within three (3) Trading Days of the applicable
exercise, cash in an amount equal to the product of (i) the number of Warrant Shares that the Company is unable to deliver pursuant
hereto and (ii) the Black Scholes Value.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in">2.&#9;<U>ADJUSTMENT OF
EXERCISE PRICE AND NUMBER OF WARRANT SHARES</U>. The Exercise Price and the number of Warrant Shares shall be adjusted from time
to time as follows:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1.5in">(a)&#9;<U>Stock Dividends
and Splits</U>. Without limiting any provision of Section 4, if the Company, at any time on or after the Issuance
Date, (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 (a &ldquo;<B>Stock Combination Event</B>&rdquo;), 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. Simultaneously with any adjustment
to the Exercise Price pursuant to this paragraph, 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).&nbsp;</P>



<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in"></P> <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1.5in">(b)&#9;<U>Other Events</U>.
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&rsquo;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(b) 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&rsquo;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.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1.5in">(c)&#9;<U>Calculations</U>.
All calculations under this Section 2 shall be made by rounding to the nearest cent or the nearest 1/100<SUP>th</SUP> 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.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in">3.&#9;<U>RIGHTS UPON
DISTRIBUTION OF ASSETS</U>. 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 securities (other than stock
or securities in which an adjustment is being made pursuant to Section 2(a)), property or options by way of a dividend, spin off,
reclassification, corporate rearrangement, scheme of arrangement or other similar transaction) (a &ldquo;<B>Distribution</B>&rdquo;),
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&rsquo;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).</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in">4.&#9;<U>PURCHASE RIGHTS;
FUNDAMENTAL TRANSACTIONS</U>.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1.5in">(a)&#9;<U>Purchase
Rights</U>. 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 &ldquo;<B>Purchase Rights</B>&rdquo;), 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&rsquo;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).</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1.5in">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1.5in"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1.5in">(b)&#9;<U>Fundamental
Transactions</U>. The Company shall not enter into or be party to a Fundamental Transaction unless the Successor Entity
assumes in writing all of the obligations of the Company under this Warrant in accordance with the provisions of this
Section&nbsp;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 &ldquo;Company&rdquo; 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 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 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 publicly traded 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(g) 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
&ldquo;<B>Corporate Event</B>&rdquo;), 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. Notwithstanding the foregoing, in the event of a Fundamental Transaction, at the request of the Holder (which
may be required by the Company if the Successor Entity is not publicly traded) delivered before the 90th day after such
Fundamental Transaction, the Company (or the Successor Entity) shall purchase this Warrant from the Holder by paying to the
Holder, within five Business Days after such request (or, if later, on the effective date of the Fundamental Transaction),
cash in an amount equal to the Black Scholes Value of the remaining unexercised portion of this Warrant on the date of such
Fundamental Transaction.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1.5in">(c)&#9;<U>Application</U>.
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)).</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1.5in">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in">5.&#9;<U>NONCIRCUMVENTION</U>.
The Company hereby covenants and agrees that the Company will not, by amendment of its Certificate of Incorporation, Bylaws 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)&nbsp;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)&nbsp;shall take all
such actions as may be necessary or appropriate in order that the Company may validly and legally issue fully paid and nonassessable
shares of Common Stock upon the exercise of this Warrant, and (iii) shall, so long as this Warrant is 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 this Warrant, 100% of the number of shares of Common Stock issuable upon exercise of this Warrant then outstanding
(without regard to any limitations on exercise).</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in">6.&#9;<U>WARRANT HOLDER
NOT DEEMED A STOCKHOLDER</U>. Except as otherwise specifically provided herein, the Holder, solely in such Person's 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 such Person's 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 such Person 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.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in">7.&#9;<U>REISSUANCE OF
WARRANTS</U>.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1.5in">(a)&#9;<U>Transfer
of Warrant</U>. 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.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1.5in">(b)&#9;<U>Lost, Stolen
or Mutilated Warrant</U>. Upon receipt by the Company of evidence reasonably satisfactory to the Company of the loss, theft, destruction
or mutilation of this Warrant, and, in the case of loss, theft or destruction, of any indemnification undertaking by the Holder
to the Company in customary 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.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1.5in">(c)&#9;<U>Exchangeable
for Multiple Warrants</U>. 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, that no Warrants for fractional
shares of Common Stock shall be given.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1.5in">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1.5in">(d)&#9;<U>Issuance
of New Warrants</U>. 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.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in">8.&#9;<U>NOTICES</U>.
Any and all notices or other communications or deliveries required or permitted to be provided hereunder shall be in writing and
shall be deemed given and effective on the earliest of (a)&nbsp;the date of transmission, if such notice or communication is delivered
via facsimile or email at the facsimile number or email address specified in this Section &nbsp;prior to 6:30 p.m. (New York City
time) on a Trading Day, (b)&nbsp;the next Trading Day after the date of transmission, if such notice or communication is delivered
via facsimile or email at the facsimile number or email address specified in this Section on a day that is not a Trading Day or
later than 6:30 p.m. (New York City time) on any Trading Day, (c)&nbsp;the Trading Day following the date of deposit with a nationally
recognized overnight courier service, or (d)&nbsp;upon actual receipt by the party to whom such notice is required to be given.&nbsp;&nbsp;The
addresses, facsimile numbers and email addresses for such notices and communications are those as may be designated by the Holder
and the Company prior to the Issuance Date, and in writing hereafter, in the same manner, by any such Person. 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) immediately 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 Securities and Exchange Commission
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.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in">9.&#9;<U>AMENDMENT AND
WAIVER</U>. Except as otherwise provided herein, the provisions of this Warrant 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.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in">10.&#9;<U>SEVERABILITY</U>.
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).</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in">11.&#9;<U>GOVERNING LAW</U>.
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&rsquo;s obligations
to the Holder or to enforce a judgment or other court ruling in favor of the Holder. <B>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.</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in">12.&#9;<U>CONSTRUCTION;
HEADINGS</U>. 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.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in">13.&#9;<U>DISPUTE RESOLUTION</U>.
In the case of a dispute as to the determination of the Exercise Price, the Closing Sale Price, the Closing Bid Price or fair market
value or the arithmetic calculation of the 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, the Closing Bid 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 Sale Price, the Closing Bid Price or fair market value (as the case
may be) to an independent, reputable investment bank selected by the Holder or (b) the disputed arithmetic calculation of the Warrant
Shares to the Company&rsquo;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&rsquo;s or accountant&rsquo;s determination or calculation (as the case may be) shall
be binding upon all parties absent demonstrable error.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in">14.&#9;<U>REMEDIES, CHARACTERIZATION,
OTHER OBLIGATIONS, BREACHES AND INJUNCTIVE RELIEF</U>. 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
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&rsquo;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.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in">15.&#9;<U>TRANSFER</U>.
This Warrant may be offered for sale, sold, transferred or assigned without the consent of the Company.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in">16.&#9;<U>CERTAIN DEFINITIONS</U>.
For purposes of this Warrant, the following terms shall have the following meanings:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1.5in"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1.5in">(a)&#9;&ldquo;<B>Adjustment
Right</B>&rdquo;<B> </B>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).</P>



<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1.5in"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1.5in">(b)&#9;&ldquo;<B>Black
Scholes Value</B>&rdquo; means the value of the unexercised portion of this Warrant remaining on the date of the Holder&rsquo;s
request, which value is calculated using the Black Scholes Option Pricing Model obtained from the &ldquo;OV&rdquo; function on
Bloomberg utilizing (i) an underlying price per share equal to, in the event of an Authorized Share Failure, the VWAP on the exercise
date, or, in the event of a Fundamental Transaction, the VWAP on the Trading Day immediately preceding the consummation of the
applicable Fundamental Transaction, (ii) a strike price equal to the Exercise Price in effect on the date of the Holder&rsquo;s
request, (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&rsquo;s request and (2) the remaining term of this Warrant as of the date of
consummation of the applicable Fundamental Transaction or as of the date of the Holder&rsquo;s request pursuant to Section 4(c),
if such request is prior to the date of the consummation of the applicable Fundamental Transaction, (iv) an expected volatility
equal to the greater of 90% 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 earlier to occur of the public disclosure or consummation
of the applicable Fundamental Transaction and (v) a 0% cost of borrow.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1.5in">(c)&#9;&ldquo;<B>Bloomberg</B>&rdquo;
means Bloomberg, L.P.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1.5in">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1.5in">(d)&#9;&ldquo;<B>Business
Day</B>&rdquo; 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.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1.5in"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1.5in">(e)&#9;&ldquo;<B>Closing
Bid Price</B>&rdquo; and &ldquo;<B>Closing Sale Price</B>&rdquo; 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 the last trade price, respectively, of such security prior to 4:00:00
p.m., New York 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 &quot;pink sheets&quot; by Pink Sheets LLC (formerly the National Quotation Bureau, Inc.). 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
to be appropriately adjusted for any stock dividend, stock split, stock combination or other similar transaction during the applicable
calculation period.</P> <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1.5in">(f)&#9; &ldquo;<B>Common
Stock</B>&rdquo; means (i)&nbsp;the Company&rsquo;s shares of common stock, 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.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1.5in"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1.5in">(g)&#9;&ldquo;<B>Common
Stock Deemed Outstanding</B>&rdquo; means, at any given time, the number of shares of Common Stock actually outstanding at such
time.</P>



<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1.5in"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1.5in">(h)&#9;&ldquo;<B>Convertible
Securities</B>&rdquo; means any capital 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.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1.5in">(i)&#9;&ldquo;<B>Eligible
Market</B>&rdquo; means The New York Stock Exchange, The NYSE Amex, The Nasdaq Global Market, The Nasdaq Global Select Market or
the Principal Market.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1.5in">(j)&#9;&ldquo;<B>Excluded
Securities&rdquo;</B> means the issuance of (a) shares of Common Stock or options to employees, officers or directors of the Company
in their capacity as such pursuant to any stock or option plan or employment agreement duly adopted for such purpose, by a majority
of the non-employee members of the Board of Directors or a majority of the members of a committee of non-employee directors established
for such purpose, (b) securities upon the exercise or exchange of or conversion of the securities issued hereunder and/or other
securities exercisable or exchangeable for or convertible into shares of Common Stock issued and outstanding on the Issuance Date
(including, without limitation, all securities issued on the date of this Agreement under the Registration Statement), provided
that such securities have not been amended since the date of this Agreement to increase the number of such securities or to decrease
the exercise price, exchange price or conversion price of such securities, and (c) securities issued pursuant to acquisitions or
strategic transactions approved by a majority of the disinterested directors of the Company, provided that any such issuance shall
only be to a Person (or to the equity holders of a Person) which is, itself or through its subsidiaries, an operating company or
an owner of an asset in a business synergistic with the business of the Company and shall provide to the Company additional benefits
in addition to the investment of funds, but shall not include a transaction in which the Company is issuing securities primarily
for the purpose of raising capital or to an entity whose primary business is investing in securities.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1.5in">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1.5in">(k)&#9; &ldquo;<B>Expiration
Date</B>&rdquo; means the date that is the third (3<SUP>rd</SUP>) anniversary of the Issuance Date, 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 &ldquo;<B>Holiday</B>&rdquo;), the
next date that is not a Holiday.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1.5in">(l)&#9;&ldquo;<B>Fundamental
Transaction</B>&rdquo; 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 (5) reorganize,
recapitalize or reclassify the Common Stock, or (ii) any &ldquo;person&rdquo; or &ldquo;group&rdquo; (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
&ldquo;beneficial owner&rdquo; (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.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1.5in">(m)&#9;&ldquo;<B>Options</B>&rdquo;
means any rights, warrants or options to subscribe for or purchase shares of Common Stock or Convertible Securities.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1.5in">(n)&#9;&ldquo;<B>Parent
Entity</B>&rdquo; 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.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1.5in">(o)&#9;&ldquo;<B>Person</B>&rdquo;
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.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1.5in">(p)&#9;&ldquo;<B>Principal
Market</B>&rdquo; means The Nasdaq Capital Market.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1.5in">(q)&#9;&ldquo;<B>Subsidiary</B>&rdquo;
means any direct or indirect wholly-owned subsidiary of the Company.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1.5in">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1.5in">(r)&#9;&ldquo;<B>Successor
Entity</B>&rdquo; 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.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1.5in">(s)&#9;&ldquo;<B>Trading
Day</B>&rdquo; 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 &ldquo;Trading Day&rdquo; 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.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1.5in">(t)&#9;&ldquo;<B>Voting
Stock</B>&rdquo; 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).</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><I>[signature page follows]</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><I>&nbsp;</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><I>&nbsp;</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><I>&nbsp;</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><I>&nbsp;</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><I>&nbsp;</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><I>&nbsp;</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><I>&nbsp;</I></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><B>IN WITNESS WHEREOF,</B>
the Company has caused this Warrant to Purchase Common Stock to be duly executed as of the Issuance Date set out above.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: justify"><FONT STYLE="text-transform: uppercase"><B>Pacific Ethanol, Inc.</B></FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 50%; text-align: justify">&nbsp;</TD>
    <TD STYLE="width: 6%; text-align: justify">&nbsp;</TD>
    <TD STYLE="width: 44%; text-align: justify">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="text-align: justify">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="text-align: justify">By:</TD>
    <TD STYLE="text-align: justify; border-bottom: Black 1pt solid">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD>Name:</TD>
    <TD>Neil Koehler</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD>Title:</TD>
    <TD>President and Chief Executive Officer</TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: right"><B>EXHIBIT A</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>EXERCISE NOTICE</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>TO BE EXECUTED BY THE REGISTERED HOLDER
TO EXERCISE THIS</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>WARRANT TO PURCHASE COMMON STOCK</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="text-transform: uppercase"><B>PACIFIC
ETHANOL, INC.</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The undersigned holder
hereby exercises the right to purchase _________________ of the shares of Common Stock (&quot;<B>Warrant Shares</B>&quot;) of <FONT STYLE="text-transform: uppercase"><B>PACIFIC
ETHANOL, INC</B></FONT>, a Delaware corporation (the &quot;<B>Company</B>&quot;), evidenced by the attached Warrant to Purchase
Common Stock (the &quot;<B>Warrant</B>&quot;). Capitalized terms used herein and not otherwise defined shall have the respective
meanings set forth in the Warrant.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">1.&#9;Form of Exercise
Price. The Holder intends that payment of the Exercise Price shall be made as:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 5%"></TD><TD STYLE="width: 5%"></TD><TD STYLE="text-align: justify; width: 90%">____________ a &quot;<U>Cash Exercise&quot;</U> with respect to ____________ Warrant Shares; and/or</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 5%"></TD><TD STYLE="width: 5%"></TD><TD STYLE="text-align: justify; width: 90%">____________ a <U>&quot;Cashless Exercise&quot;</U> with respect to _________ Warrant Shares.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">2.&#9;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.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">3.&#9;Representations
and Warranties. By its delivery of this Exercise Notice, the undersigned represents and warrants to the Company that in giving
effect to the exercise evidenced hereby the Holder will not beneficially own in excess of the number of shares of Common Stock
permitted to be owned under Section&nbsp;1(f) of this Warrant to which this notice relates.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">4.&#9;Delivery of Warrant
Shares. The Company shall deliver to the holder __________ Warrant Shares in accordance with the terms of the Warrant. Delivery
shall be made to the Holder, or for its benefit, to the following address:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 2in; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 2in; text-align: justify; text-indent: 0.5in"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 462pt; text-align: left; text-indent: -198pt">_______________________</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 264pt; text-align: left">_______________________</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 2.5in; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Date: _______________ __, ______</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0pt"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD COLSPAN="3" STYLE="text-align: center; vertical-align: bottom; border-bottom: Black 1pt solid">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD COLSPAN="3" STYLE="text-align: center; vertical-align: bottom">Name of Registered Holder</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 7%">&nbsp;</TD>
    <TD STYLE="width: 6%">&nbsp;</TD>
    <TD STYLE="width: 33%">&nbsp;</TD>
    <TD STYLE="width: 54%">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>By:</TD>
    <TD STYLE="border-bottom: Black 1pt solid">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD>Name&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD>Title:</TD>
    <TD STYLE="border-bottom: Black 1pt solid">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 2in; text-align: justify; text-indent: 0.5in"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 2in; text-align: justify; text-indent: 0.5in"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>ACKNOWLEDGMENT&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The Company hereby
acknowledges this Exercise Notice and hereby directs American Stock Transfer &amp; Trust Company, LLC to issue the above indicated
number of shares of Common Stock in accordance with the Transfer Agent Instructions dated ___________ __, 2012 from the Company
and acknowledged and agreed to by American Stock Transfer &amp; Trust Company, LLC.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD COLSPAN="3" STYLE="font-weight: bold">PACIFIC ETHANOL, INC.</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 48%">&nbsp;</TD>
    <TD STYLE="width: 7%">&nbsp;</TD>
    <TD STYLE="width: 7%">&nbsp;</TD>
    <TD STYLE="width: 38%">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD>By:</TD>
    <TD COLSPAN="2" STYLE="border-bottom: Black 1pt solid"> </TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>Name:</TD>
    <TD STYLE="border-bottom: Black 1pt solid">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>Title:</TD>
    <TD STYLE="border-bottom: Black 1pt solid">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; text-align: center; margin-bottom: 0pt">16</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

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<DOCUMENT>
<TYPE>EX-99.1
<SEQUENCE>5
<FILENAME>peix_8k-ex9901.htm
<DESCRIPTION>PRESS RELEASE
<TEXT>
<HTML>
<HEAD>
     <TITLE></TITLE>
</HEAD>
<BODY STYLE="font: 10pt Times New Roman, Times, Serif">

<P STYLE="margin: 0"></P>

<!-- Field: Rule-Page --><DIV ALIGN="LEFT" STYLE="margin-top: 3pt; margin-bottom: 3pt"><DIV STYLE="font-size: 1pt; border-top: Black 1pt solid; width: 100%">&nbsp;</DIV></DIV><!-- Field: /Rule-Page -->

<P STYLE="margin: 0; text-align: right"><B>Exhibit 99.1</B></P>

<P STYLE="margin: 0">&nbsp;</P>

<P STYLE="margin: 0">&nbsp;<IMG SRC="peix_logo.jpg" ALT=""></P>

<P STYLE="margin: 0">&nbsp;</P>

<P STYLE="margin: 0"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; color: red"><B>&nbsp;</B></P>

<TABLE ALIGN="CENTER" CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 34%; text-align: justify; font-weight: bold">Company IR Contact:</TD>
    <TD STYLE="width: 33%; text-align: justify; font-weight: bold">IR Agency Contact:</TD>
    <TD STYLE="width: 33%; text-align: justify; font-weight: bold">Media Contact:</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: left">Pacific Ethanol, Inc.</TD>
    <TD STYLE="text-align: justify">Becky Herrick</TD>
    <TD STYLE="text-align: justify">Paul Koehler</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: justify">916-403-2755</TD>
    <TD STYLE="text-align: justify">LHA</TD>
    <TD STYLE="text-align: justify">Pacific Ethanol, Inc.</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: justify">866-508-4969</TD>
    <TD STYLE="text-align: justify">415-433-3777</TD>
    <TD STYLE="text-align: justify">503-235-8241</TD></TR>
<TR STYLE="vertical-align: top">
    <TD COLSPAN="2" STYLE="text-align: justify"><U>Investorrelations@pacificethanol.net</U></TD>
    <TD STYLE="text-align: justify"><U>paulk@pacificethanol.net</U></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; color: red"><FONT STYLE="text-transform: uppercase"><B>&nbsp;</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="text-transform: uppercase"><B>Pacific
Ethanol, Inc. ANNOUNCES </B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="text-transform: uppercase"><B>PROPOSED
OFFERING OF COMMON STOCK AND WARRANTS</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="text-transform: uppercase"><B>&nbsp;</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>Sacramento, CA, September 20, 2012&ndash;
Pacific Ethanol, Inc. (NASDAQ: PEIX)</B>, the leading marketer and producer of low-carbon renewable fuels in the Western United
States, announced that it intends to offer units consisting of shares of common stock and warrants in an underwritten public offering.
The company also expects to grant the underwriter a 30-day option to purchase additional units of common stock to cover over-allotments,
if any. Lazard Capital Markets LLC is acting as the sole book-running manager for the offering. While the offering is expected
to price before 9:30 am EDT on September 21, 2012, the offering is subject to market conditions, and there can be no assurance
as to whether or when the offering may be completed, or as to the actual size or terms of the offering.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">A registration statement relating to the
units issued in the offering has been filed with, and declared effective by Securities and Exchange Commission (the &ldquo;SEC&rdquo;).
A preliminary prospectus supplement, as well as a final prospectus supplement, relating to the offering will be filed with the
SEC, each of which will form a part of the effective registration statement. When available, copies of the preliminary and final
prospectus supplements relating to these securities may be obtained by visiting the SEC&rsquo;s website at <U>www.sec.gov</U>
or from Lazard Capital Markets LLC, 30 Rockefeller Plaza, 60th Floor, New York, NY 10020 or via telephone at (800) 542-0970.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

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    <DIV STYLE="page-break-before: always; margin-top: 6pt"><TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%"><TR><TD STYLE="text-align: center; width: 100%">&nbsp;</TD></TR></TABLE></DIV>
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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;<IMG SRC="peix_logo.jpg" ALT=""></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">This press release shall not constitute
an offer to sell or the solicitation of an offer to buy any securities, nor shall there be any sale of any securities in any jurisdiction
in which such offer, solicitation or sale would be unlawful prior to the registration or qualification under the securities laws
of any such jurisdiction.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><B><U>About Pacific Ethanol, Inc.</U></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Pacific Ethanol, Inc. (NASDAQ: PEIX) is
the leading marketer and producer of low-carbon renewable fuels in the Western United States. Pacific Ethanol also sells co-products,
including wet distillers grain (WDG), a nutritional animal feed. Serving integrated oil companies and gasoline marketers who blend
ethanol into gasoline, Pacific Ethanol provides transportation, storage and delivery of ethanol through third-party service providers
in the Western United States, primarily in California, Arizona, Nevada, Utah, Oregon, Colorado, Idaho and Washington. Pacific Ethanol
has a 67% ownership interest in New PE Holdco LLC, the owner of four ethanol production facilities. Pacific Ethanol operates and
manages the four ethanol production facilities, which have a combined annual production capacity of 200 million gallons. The facilities
in operation are located in Boardman, Oregon, Burley, Idaho and Stockton, California, and one idled facility is located in Madera,
California. The facilities are near their respective fuel and feed customers, offering significant timing, transportation cost
and logistical advantages. Pacific Ethanol&rsquo;s subsidiary, Kinergy Marketing LLC, markets ethanol from Pacific Ethanol&rsquo;s
managed plants and from other third-party production facilities, and another subsidiary, Pacific Ag. Products, LLC, markets WDG.
For more information please visit www.pacificethanol.net.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><B><U>Safe Harbor Statement under the Private
Securities Litigation Reform Act of 1995</U></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">With the exception of historical information,
the matters discussed in this press release including, without limitation, the ability of Pacific Ethanol to continue as the leading
marketer and producer of low-carbon renewable fuels in the Western United States; and the success, timing and nature of the proposed
offering are forward-looking statements and considerations that involve a number of risks and uncertainties. The actual future
results of Pacific Ethanol could differ from those statements. Factors that could cause or contribute to such differences include,
but are not limited to, adverse economic and market conditions; changes in governmental regulations and policies; and other events,
factors and risks previously and from time to time disclosed in Pacific Ethanol&rsquo;s filings with the Securities and Exchange
Commission including, specifically, those factors set forth in<FONT STYLE="color: black"> the &ldquo;Risk Factors&rdquo; section
contained in Pacific Ethanol&rsquo;s Form 10-K </FONT>and in the preliminary prospectus supplement relating to the proposed offering<FONT STYLE="color: black">
filed</FONT> with the Securities and Exchange Commission on March 8, 2012 and September 20, 2012, respectively.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>



<P STYLE="margin: 0"></P>

<P STYLE="margin: 0">&nbsp;</P>

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<P STYLE="margin: 0">&nbsp;</P>

<P STYLE="margin-top: 0; text-align: center; margin-bottom: 0">2</P>

<P STYLE="margin: 0"></P>

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`
end
</TEXT>
</DOCUMENT>
</SEC-DOCUMENT>
