Exhibit
10.1


 


SECURITIES
PURCHASE AGREEMENT


 


This SECURITIES
PURCHASE AGREEMENT (the “Agreement”), dated as of October 26, 2020, is by and among Pacific Ethanol, Inc.,
a Delaware corporation with offices located at 400 Capitol Mall, Suite 2060, Sacramento, California (the “Company”),
and each of the investors listed on the Schedule of Buyers attached hereto (individually, a “Buyer” and collectively,
the “Buyers”).


 


RECITALS


 


A. The
Company and each Buyer is executing and delivering this Agreement in reliance upon the exemption from securities registration afforded
by Section 4(a)(2) of the Securities Act of 1933, as amended (the “1933 Act”), and Rule 506(b) of Regulation
D (“Regulation D”) as promulgated by the United States Securities and Exchange Commission (the “SEC”)
under the 1933 Act.


 


B. The
Company has authorized a the issuance of a warrant to purchase shares of Common Stock, substantially in the form attached hereto
as Exhibit A (the “Warrants”), which Warrant shall be exercisable into shares of Common Stock
(the shares of Common Stock issuable pursuant to the terms of the Warrants collectively, the “Warrant Shares”),
in accordance with the terms of the Warrants.


 


C. Each
Buyer wishes to purchase, and the Company wishes to sell, upon the terms and conditions stated in this Agreement, a Warrant in
the aggregate original principal amount set forth opposite such Buyer’s name in column (3) on the Schedule of Buyers.


 


D. The
Warrants are being issued contemporaneously with an underwritten offering (the “Offering”) of the Company’s
Common Stock pursuant to the terms of an underwriting agreement, dated as of October 26, 2020 (the “Subscription Date”),
by and among the Company and the underwriter(s) referred to therein, as amended from time to time (the “Underwriting Agreement”)
and (ii) the Company’s Registration Statement on Form S-3 (File number 333-238939) (the “Registration Statement”).


 


E. At
the Closing, the parties hereto shall execute and deliver a Registration Rights Agreement, in the form attached hereto as Exhibit
B (the “Registration Rights Agreement”), pursuant to which the Company has agreed to provide certain
registration rights with respect to the Registrable Securities (as defined in the Registration Rights Agreement), under the 1933
Act and the rules and regulations promulgated thereunder, and applicable state securities laws.


 


F. The
Warrants and the Warrant Shares are collectively referred to herein as the “Securities.”


 


AGREEMENT


 


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


 


1. 
PURCHASE AND SALE OF WARRANTS.


 


(a) 
Purchase of Warrants . Subject to the satisfaction (or waiver) of the conditions set
forth in Sections 6 and 7 below, the Company shall issue and sell to each Buyer, and each Buyer severally, but not jointly, agrees
to purchase from the Company on the Closing Date (as defined below) a Warrant as is set forth opposite such Buyer’s name
in column (3) on the Schedule of Buyers.


 


(b) 
Closing. The closing (the “Closing”) of the purchase of the Warrants
by the Buyers shall occur remotely. The date and time of the Closing (the “Closing Date”) shall be 10:00 a.m.,
New York time, on the first (1st) Business Day on which the conditions to the Closing set forth in Sections 6 and 7 below are satisfied
or waived (or such other date as is mutually agreed to by the Company and each Buyer). As used herein “Business Day”
means any day other than a Saturday, Sunday or other day on which commercial banks in New York, New York are authorized or required
by law to remain closed.


 






     


     


    

 


(c) 
Purchase Price. The aggregate purchase price for the Warrants to be purchased by each
Buyer (the “Purchase Price”) shall be the amount set forth opposite such Buyer’s name in column (4) on
the Schedule of Buyers. 


 


(d) 
Form of Payment. On the Closing Date, (i) each Buyer shall pay its respective Purchase
to the Company for the Warrants to be issued and sold to such Buyer at the Closing and the Company shall deliver to each Buyer
a Warrant to purchase a number of shares of Common Stock as is set forth opposite such Buyer’s name in column (3) of the
Schedule of Buyers, duly executed on behalf of the Company and registered in the name of such Buyer or its designee.


 


2. 
BUYER’S REPRESENTATIONS AND WARRANTIES.


 


Each Buyer, severally
and not jointly, represents and warrants to the Company with respect to only itself that, as of the date hereof and as of the Closing
Date:


 


(a) 
Organization; Authority. Such Buyer is an entity duly organized, validly existing and in good standing under the
laws of the jurisdiction of its organization with the requisite power and authority to enter into and to consummate the transactions
contemplated by the Transaction Documents (as defined below) to which it is a party and otherwise to carry out its obligations
hereunder and thereunder.


 


(b) 
No Public Sale or Distribution. Such Buyer (i) is acquiring its Warrant, and (ii) upon
exercise of its Warrant will acquire the Warrant Shares issuable upon exercise thereof, in each case, for its own account and not
with a view towards, or for resale in connection with, the public sale or distribution thereof in violation of applicable securities
laws, except pursuant to sales registered or exempted under the 1933 Act; provided, however, by making the representations herein,
such Buyer does not agree, or make any representation or warranty, to hold any of the Securities for any minimum or other specific
term and reserves the right to dispose of the Securities at any time in accordance with or pursuant to a registration statement
or an exemption from registration under the 1933 Act. Such Buyer does not presently have any agreement or understanding, directly
or indirectly, with any Person to distribute any of the Securities in violation of applicable securities laws. For purposes of
this Agreement, “Person” means an individual, a limited liability company, a partnership, a joint venture, a
corporation, a trust, an unincorporated organization, any other entity and any Governmental Entity or any department or agency
thereof.


 


(c) 
Accredited Investor Status. Such Buyer is an “accredited investor” as that
term is defined in Rule 501(a) of Regulation D.


 


(d) 
Reliance on Exemptions. Such Buyer understands that the Securities are being offered
and sold to it in reliance on specific exemptions from the registration requirements of United States federal and state securities
laws and that the Company is relying in part upon the truth and accuracy of, and such Buyer’s compliance with, the representations,
warranties, agreements, acknowledgments and understandings of such Buyer set forth herein in order to determine the availability
of such exemptions and the eligibility of such Buyer to acquire the Securities.


 


(e) 
Information. Such Buyer and its advisors, if any, have been furnished with all materials
relating to the business, finances and operations of the Company and materials relating to the offer and sale of the Securities
that have been requested by such Buyer. Such Buyer and its advisors, if any, have been afforded the opportunity to ask questions
of the Company. Neither such inquiries nor any other due diligence investigations conducted by such Buyer or its advisors, if any,
or its representatives shall modify, amend or affect such Buyer’s right to rely on the Company’s representations and
warranties contained herein. Such Buyer understands that its investment in the Securities involves a high degree of risk. Such
Buyer has sought such accounting, legal and tax advice as it has considered necessary to make an informed investment decision with
respect to its acquisition of the Securities.


 


(f) 
No Governmental Review. Such Buyer understands that no United States federal or state
agency or any other government or governmental agency has passed on or made any recommendation or endorsement of the Securities
or the fairness or suitability of the investment in the Securities nor have such authorities passed upon or endorsed the merits
of the offering of the Securities.


 






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(g) 
Transfer or Resale. Such Buyer understands that except as provided in the Registration
Rights Agreement and Section 4(h) hereof: (i) the Securities have not been and are not being registered under the 1933 Act or any
state securities laws, and may not be offered for sale, sold, assigned or transferred unless (A) subsequently registered thereunder,
(B) such Buyer shall have delivered to the Company (if requested by the Company) an opinion of counsel, in a form reasonably acceptable
to the Company, to the effect that such Securities to be sold, assigned or transferred may be sold, assigned or transferred pursuant
to an exemption from such registration, or (C) such Buyer provides the Company with reasonable assurance that such Securities can
be sold, assigned or transferred pursuant to Rule 144 or Rule 144A promulgated under the 1933 Act (or a successor rule thereto)
(collectively, “Rule 144”); (ii) any sale of the Securities made in reliance on Rule 144 may be made only in
accordance with the terms of Rule 144, and further, if Rule 144 is not applicable, any resale of the Securities under circumstances
in which the seller (or the Person through whom the sale is made) may be deemed to be an underwriter (as that term is defined in
the 1933 Act) may require compliance with some other exemption under the 1933 Act or the rules and regulations of the SEC promulgated
thereunder; and (iii) neither the Company nor any other Person is under any obligation to register the Securities under the 1933
Act or any state securities laws or to comply with the terms and conditions of any exemption thereunder. Notwithstanding the foregoing,
the Securities may be pledged in connection with a bona fide margin account or other loan or financing arrangement secured by the
Securities and such pledge of Securities shall not be deemed to be a transfer, sale or assignment of the Securities hereunder,
and no Buyer effecting a pledge of Securities shall be required to provide the Company with any notice thereof or otherwise make
any delivery to the Company pursuant to this Agreement or any other Transaction Document (as defined in Section 3(b)), including,
without limitation, this Section 2(g).


 


(h) 
Validity; Enforcement. This Agreement and the Registration Rights Agreement have been
duly and validly authorized, executed and delivered on behalf of such Buyer and shall constitute the legal, valid and binding obligations
of such Buyer enforceable against such Buyer in accordance with their respective terms, except as such enforceability may be limited
by general principles of equity or to applicable bankruptcy, insolvency, reorganization, moratorium, liquidation and other similar
laws relating to, or affecting generally, the enforcement of applicable creditors’ rights and remedies.


 


(i) 
No Conflicts. The execution, delivery and performance by such Buyer of this Agreement
and the Registration Rights Agreement and the consummation by such Buyer of the transactions contemplated hereby and thereby will
not (i) result in a violation of the organizational documents of such Buyer, or (ii) conflict with, or constitute a default (or
an event which with notice or lapse of time or both would become a default) under, or give to others any rights of termination,
amendment, acceleration or cancellation of, any agreement, indenture or instrument to which such Buyer is a party, or (iii) result
in a violation of any law, rule, regulation, order, judgment or decree (including federal and state securities laws) applicable
to such Buyer, except in the case of clauses (ii) and (iii) above, for such conflicts, defaults, rights or violations which could
not, individually or in the aggregate, reasonably be expected to have a material adverse effect on the ability of such Buyer to
perform its obligations hereunder.


 


3. 
REPRESENTATIONS AND WARRANTIES OF THE COMPANY.


 


The Company represents
and warrants to each of the Buyers that, as of the date hereof and as of the Closing Date:


 


(a) 
Organization and Qualification. The Company and each of its Subsidiaries are entities
duly organized and validly existing and in good standing under the laws of the jurisdiction in which they are formed, and have
the requisite power and authority to own their properties and to carry on their business as now being conducted and as presently
proposed to be conducted. The Company and each of its Subsidiaries is duly qualified as a foreign entity to do business and is
in good standing in every jurisdiction in which its ownership of property or the nature of the business conducted by it makes such
qualification necessary, except to the extent that the failure to be so qualified or be in good standing would not reasonably be
expected to have a Material Adverse Effect (as defined below). As used in this Agreement, “Material Adverse Effect”
means any material adverse effect on (i) the business, properties, assets, liabilities, operations (including results thereof),
condition (financial or otherwise) or prospects of the Company and its Subsidiaries, taken as a whole, (ii) the transactions contemplated
hereby or in any of the other Transaction Documents or any other agreements or instruments to be entered into in connection herewith
or therewith or (iii) the authority or ability of the Company or any of its Subsidiaries to perform any of their respective obligations
under any of the Transaction Documents (as defined below). Other than the Subsidiaries set forth on Exhibit 21.1 to the Company’s
most recent Amendment No. 1 to Annual Report on Form 10-K/A filed with the SEC, the Company has no material Subsidiaries that
would be required to be disclosed thereon. “Subsidiaries” means any Person in which the Company, directly or
indirectly, (I) owns any of the outstanding capital stock or holds any equity or similar interest of such Person or (II) controls
or operates all or any part of the business, operations or administration of such Person, and each of the foregoing, is individually
referred to herein as a “Subsidiary.”


 






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(b) 
Authorization; Enforcement; Validity. The Company has the requisite power and authority
to enter into and perform its obligations under this Agreement and the other Transaction Documents and to issue the Securities
in accordance with the terms hereof and thereof. Each Subsidiary has the requisite power and authority to enter into and perform
its obligations under the Transaction Documents to which it is a party. The execution and delivery of this Agreement and the other
Transaction Documents by the Company, and the consummation by the Company of the transactions contemplated hereby and thereby (including,
without limitation, the issuance of the Warrants and the reservation for issuance and issuance of the Warrant Shares issuable upon
exercise of the Warrants) have been duly authorized by the Company’s board of directors or other governing body, as applicable,
and (other than the filing with the SEC of one or more Registration Statements in accordance with the requirements of the Registration
Rights Agreement, a Form D with the SEC and any other filings as may be required by any state securities laws or agencies, and
filing and clearance with the Principle Market (as defined below)) no further filing, consent or authorization is required by the
Company, its Subsidiaries, their respective boards of directors or their stockholders or other governing body. This Agreement has
been, and the other Transaction Documents to which it is a party will be prior to the Closing, duly executed and delivered by the
Company, and each constitutes the legal, valid and binding obligations of the Company, enforceable against the Company in accordance
with its respective terms, except as such enforceability may be limited by general principles of equity or applicable bankruptcy,
insolvency, reorganization, moratorium, liquidation or similar laws relating to, or affecting generally, the enforcement of applicable
creditors’ rights and remedies and except as rights to indemnification and to contribution may be limited by federal or state
securities law. “Transaction Documents” means, collectively, this Agreement, the Warrants, the Registration
Rights Agreement, the Irrevocable Transfer Agent Instructions (as defined below) and each of the other agreements and instruments
entered into or delivered by any of the parties hereto in connection with the transactions contemplated hereby and thereby, as
may be amended from time to time.


 


(c) 
Issuance of Securities. The issuance of the Warrants is duly authorized and upon issuance
in accordance with the terms of the Transaction Documents shall be validly issued, fully paid and non-assessable and free from
all preemptive or similar rights, mortgages, defects, claims, liens, pledges, charges, taxes, rights of first refusal, encumbrances,
security interests and other encumbrances (collectively “Liens”) with respect to the issuance thereof. As of
the Closing, the Company shall have reserved from its duly authorized capital stock not less than 100% of the maximum number of
Warrant Shares issuable upon exercise of the Warrants (assuming for purposes hereof that (x) the Warrants are exercisable at the
initial Warrant Price (as defined in the Warrants), (and (y) any such Warrant shall not take into account any limitations on the
exercise of the Warrants set forth in the Warrants). Upon exercise of the Warrants in accordance with the Warrants, the Warrant
Shares, when issued, will be validly issued, fully paid and nonassessable and free from all preemptive or similar rights or Liens
with respect to the issue thereof, with the holders being entitled to all rights accorded to a holder of Common Stock. Subject
to the accuracy of the representations and warranties of the Buyers in this Agreement, the offer and issuance by the Company of
the Securities is exempt from registration under the 1933 Act. 


 


(d) 
No Conflicts. The execution, delivery and performance of the Transaction Documents
by the Company and the consummation by the Company of the transactions contemplated hereby and thereby (including, without limitation,
the issuance of the Warrants and the Warrant Shares and the reservation for issuance of the Warrant Shares) will not (i) result
in a violation of the certificate of incorporation (including, without limitation, any certificate of designation contained therein),
bylaws, certificate of formation, memorandum of association, articles of association, or other organizational documents of the
Company or any of its Subsidiaries, or any capital stock or other securities of the Company or any of its Subsidiaries, (ii) conflict
with, or constitute a default (or an event which with notice or lapse of time or both would become a default) in any respect under,
or give to others any rights of termination, amendment, acceleration or cancellation of, any agreement, indenture or instrument
to which the Company or any of its Subsidiaries is a party, or (iii) result in a violation of any law, rule, regulation, order,
judgment or decree (including, without limitation, foreign, federal and state securities laws and regulations and the rules and
regulations of the Nasdaq Capital Market (the “Principal Market”) and including all applicable foreign, federal
and state laws, rules and regulations) applicable to the Company or any of its Subsidiaries or by which any property or asset of
the Company or any of its Subsidiaries is bound or affected.


 






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(e) 
Consents. Neither the Company nor any Subsidiary is required to obtain any consent
from, authorization or order of, or make any filing or registration with (other than the filing with the SEC of one or more Registration
Statements in accordance with the requirements of the Registration Rights Agreement, a Form D with the SEC and any other filings
as may be required by any state securities laws or agencies, and filing and clearance with the Principle Market), any Governmental
Entity (as defined below) or any regulatory or self-regulatory agency or any other Person in order for it to execute, deliver or
perform any of its respective obligations under or contemplated by the Transaction Documents, in each case, in accordance with
the terms hereof or thereof. All consents, authorizations, orders, filings and registrations which the Company or any Subsidiary
is required to obtain pursuant to the preceding sentence have been or will be obtained or effected on or prior to the Closing Date,
and neither the Company nor any of its Subsidiaries are aware of any facts or circumstances which might prevent the Company or
any of its Subsidiaries from obtaining or effecting any of the registration, application or filings contemplated by the Transaction
Documents. The Company is not in violation of the requirements of the Principal Market and has no knowledge of any facts or circumstances
which would reasonably lead to delisting or suspension of the Common Stock in the foreseeable future. “Governmental Entity”
means any nation, state, county, city, town, village, district, or other political jurisdiction of any nature, federal, state,
local, municipal, foreign, or other government, governmental or quasi-governmental authority of any nature (including any governmental
agency, branch, department, official, or entity and any court or other tribunal), multi-national organization or body; or body
exercising, or entitled to exercise, any administrative, executive, judicial, legislative, police, regulatory, or taxing authority
or power of any nature or instrumentality of any of the foregoing, including any entity or enterprise owned or controlled by a
government or a public international organization or any of the foregoing.


 


(f) 
Acknowledgment Regarding Buyer’s Purchase of Securities. The Company acknowledges
and agrees that each Buyer is acting solely in the capacity of an arm’s length purchaser with respect to the Transaction
Documents and the transactions contemplated hereby and thereby. The Company further acknowledges that no Buyer is acting as a financial
advisor or fiduciary of the Company or any of its Subsidiaries (or in any similar capacity) with respect to the Transaction Documents
and the transactions contemplated hereby and thereby, and any advice given by a Buyer or any of its representatives or agents in
connection with the Transaction Documents and the transactions contemplated hereby and thereby is merely incidental to such Buyer’s
purchase of the Securities. The Company further represents to each Buyer that the Company’s and each Subsidiary’s decision
to enter into the Transaction Documents to which it is a party has been based solely on the independent evaluation by the Company,
each Subsidiary and their respective representatives.


 


(g) 
No General Solicitation; Placement Agent’s Fees. Neither the Company, nor any
of its Subsidiaries or affiliates, nor any Person acting on its or their behalf, has engaged in any form of general solicitation
or general advertising (within the meaning of Regulation D) in connection with the offer or sale of the Securities. The Company
shall be responsible for the payment of any placement agent’s fees, financial advisory fees, or brokers’ commissions
(other than for Persons engaged by any Buyer or its investment advisor) relating to or arising out of the transactions contemplated
hereby, including, without limitation, placement agent fees payable to Guggenheim Securities, Inc., Craig-Hallum Capital Group,
LLC and H.C. Wainwright & Co., LLC, and/or one or more of their respective affiliates, as placement agents (collectively, the
“Placement Agent”) in connection with the sale of the Securities. The Company shall pay, and hold each Buyer
harmless against, any liability, loss or expense (including, without limitation, attorney’s fees and out-of-pocket expenses)
arising in connection with any such claim. The Company acknowledges that it has engaged the Placement Agent in connection with
the sale of the Securities. Other than the Placement Agent, neither the Company nor any of its Subsidiaries has engaged any placement
agent or other agent in connection with the offer or sale of the Securities.


 


(h) 
Application of Takeover Protections; Rights Agreement. The Company and its board of
directors have taken all necessary action, if any, in order to render inapplicable any control share acquisition, interested stockholder,
business combination, poison pill (including, without limitation, any distribution under a rights agreement), stockholder rights
plan or other similar anti-takeover provision under the certificate of incorporation, bylaws or other organizational documents
of the Company or the laws of the jurisdiction of its incorporation or otherwise which is or could become applicable to any Buyer
as a result of the transactions contemplated by this Agreement, including, without limitation, the Company’s issuance of
the Securities and any Buyer’s ownership of the Securities. The Company and its board of directors have taken all necessary
action, if any, in order to render inapplicable any stockholder rights plan or similar arrangement relating to accumulations of
beneficial ownership of shares of Common Stock or a change in control of the Company or any of its Subsidiaries.


 






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(i) 
SEC Documents; Financial Statements. During the two (2) years prior to the date hereof,
the Company has timely filed all reports, schedules, forms, proxy statements, statements and other documents required to be filed
by it with the SEC pursuant to the reporting requirements of the Securities Exchange Act of 1934, as amended (the “1934
Act”) (all of the foregoing filed prior to the date hereof and all exhibits and appendices included therein and financial
statements, notes and schedules thereto and documents incorporated by reference therein being hereinafter referred to as the “SEC
Documents”). The Company has delivered or has made available to the Buyers or their respective representatives true,
correct and complete copies of each of the SEC Documents not available on the EDGAR system. As of their respective dates, the SEC
Documents complied in all material respects with the requirements of the 1934 Act and the rules and regulations of the SEC promulgated
thereunder applicable to the SEC Documents, and none of the SEC Documents, at the time they were filed with the SEC, contained
any untrue statement of a material fact or omitted 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. As of their respective
dates, the financial statements of the Company included in the SEC Documents complied in all material respects with applicable
accounting requirements and the published rules and regulations of the SEC with respect thereto as in effect as of the time of
filing. Such financial statements have been prepared in accordance with generally accepted accounting principles (“GAAP”),
consistently applied, during the periods involved (except (i) as may be otherwise indicated in such financial statements or the
notes thereto, or (ii) in the case of unaudited interim statements, to the extent they may exclude footnotes or may be condensed
or summary statements) and fairly present in all material respects the financial position of the Company as of the dates thereof
and the results of its operations and cash flows for the periods then ended (subject, in the case of unaudited statements, to normal
year-end audit adjustments). The reserves, if any, established by the Company or the lack of reserves, if applicable, are reasonable
based upon facts and circumstances known by the Company on the date hereof and there are no loss contingencies that are required
to be accrued by the Statement of Financial Accounting Standard No. 5 of the Financial Accounting Standards Board which are not
provided for by the Company in its financial statements or otherwise. No other information provided by or on behalf of the Company
to any of the Buyers which is not included in the SEC Documents (including, without limitation, information referred to in Section 2(e)
of this Agreement or in the disclosure schedules to this Agreement) contains any untrue statement of a material fact or omits to
state any material fact necessary in order to make the statements therein not misleading, in the light of the circumstance under
which they are or were made. The Company is not currently contemplating to amend or restate any of the financial statements (including,
without limitation, any notes or any letter of the independent accountants of the Company with respect thereto) included in the
SEC Documents (the “Financial Statements”), nor is the Company currently aware of facts or circumstances which
would require the Company to amend or restate any of the Financial Statements, in each case, in order for any of the Financials
Statements to be in compliance with GAAP and the rules and regulations of the SEC. The Company has not been informed by its independent
accountants that they recommend that the Company amend or restate any of the Financial Statements or that there is any need for
the Company to amend or restate any of the Financial Statements.


 


(j) 
Absence of Certain Changes. Since the date of the Company’s most recent audited
financial statements contained in a Form 10-K, except as disclosed in the SEC Documents, there has been no material adverse change
and no material adverse development in the business, assets, liabilities, properties, operations (including results thereof), condition
(financial or otherwise) or prospects of the Company or any of its Subsidiaries. Since the date of the Company’s most recent
audited financial statements contained in a Form 10-K, except as disclosed in the SEC Documents, neither the Company nor any of
its Subsidiaries has (i) declared or paid any dividends, (ii) sold any assets, individually or in the aggregate, outside of the
ordinary course of business or (iii) made any capital expenditures, individually or in the aggregate, outside of the ordinary course
of business. Neither the Company nor any of its Subsidiaries has taken any steps to seek protection pursuant to any law or statute
relating to bankruptcy, insolvency, reorganization, receivership, liquidation or winding up, nor does the Company or any Subsidiary
have any knowledge or reason to believe that any of their respective creditors intend to initiate involuntary bankruptcy proceedings
or any actual knowledge of any fact which would reasonably lead a creditor to do so. The Company and its Subsidiaries, individually
and on a consolidated basis, are not as of the date hereof, and after giving effect to the transactions contemplated hereby to
occur at the Closing, will not be Insolvent (as defined below). For purposes of this Section 3(l), “Insolvent”
means, (i) with respect to the Company and its Subsidiaries, on a consolidated basis, (A) the present fair saleable value of the
Company’s and its Subsidiaries’ assets is less than the amount required to pay the Company’s and its Subsidiaries’
total Indebtedness (as defined below), (B) the Company and its Subsidiaries are unable to pay their debts and liabilities, subordinated,
contingent or otherwise, as such debts and liabilities become absolute and matured or (C) the Company and its Subsidiaries intend
to incur or believe that they will incur debts that would be beyond their ability to pay as such debts mature; and (ii) with respect
to the Company and each Subsidiary, individually, (A) the present fair saleable value of the Company’s or such Subsidiary’s
(as the case may be) assets is less than the amount required to pay its respective total Indebtedness, (B) the Company or such
Subsidiary (as the case may be) is unable to pay its respective debts and liabilities, subordinated, contingent or otherwise, as
such debts and liabilities become absolute and matured or (C) the Company or such Subsidiary (as the case may be) intends to incur
or believes that it will incur debts that would be beyond its respective ability to pay as such debts mature. Neither the Company
nor any of its Subsidiaries has engaged in any business or in any transaction, and is not about to engage in any business or in
any transaction, for which the Company’s or such Subsidiary’s remaining assets constitute unreasonably small capital
with which to conduct the business in which it is engaged as such business is now conducted and is proposed to be conducted.


 






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(k) 
No Undisclosed Events, Liabilities, Developments or Circumstances. No event, liability,
development or circumstance has, to the Company’s knowledge, occurred or exists, or is reasonably expected to exist or occur
with respect to the Company, any of its Subsidiaries or any of their respective businesses, properties, liabilities, prospects,
operations (including results thereof) or condition (financial or otherwise), that (i) would be required to be disclosed by the
Company under applicable securities laws on a registration statement on Form S-1 filed with the SEC relating to an issuance and
sale by the Company of its Common Stock and which has not been publicly announced, (ii) would reasonable be expected to have a
material adverse effect on any Buyer’s investment hereunder or (iii) would reasonable be expected to have a Material Adverse
Effect. 


 


(l) 
Foreign Corrupt Practices. Neither the Company, any Subsidiary or any director, officer,
agent, employee, nor any other person acting for or on behalf of the foregoing (individually and collectively, a “Company
Affiliate”) has violated the U.S. Foreign Corrupt Practices Act (the “FCPA”) or any other applicable
anti-bribery or anti-corruption laws, nor has any Company Affiliate offered, paid, promised to pay, or authorized the payment of
any money, or offered, given, promised to give, or authorized the giving of anything of value, to any officer, employee or any
other person acting in an official capacity for any Governmental Entity to any political party or official thereof or to any candidate
for political office (individually and collectively, a “Government Official”) or to any person under circumstances
where such Company Affiliate knew or was aware of a high probability that all or a portion of such money or thing of value would
be offered, given or promised, directly or indirectly, to any Government Official, for the purpose of:


 


(i) 
(A) influencing any act or decision of such Government Official in his/her official capacity,
(B) inducing such Government Official to do or omit to do any act in violation of his/her lawful duty, (C) securing any improper
advantage, or (D) inducing such Government Official to influence or affect any act or decision of any Governmental Entity, or


 


(ii) 
assisting the Company or its Subsidiaries in obtaining or retaining business for or with,
or directing business to, the Company or its Subsidiaries.


 


(m) 
Sarbanes-Oxley Act. The Company and each Subsidiary is in compliance with any and all
applicable requirements of the Sarbanes-Oxley Act of 2002, as amended, and any and all applicable rules and regulations promulgated
by the SEC thereunder.


 


(n) 
Transactions With Affiliates. No current or former employee, partner, director, officer
or stockholder (direct or indirect) of the Company or its Subsidiaries, or any associate, or, to the knowledge of the Company,
any affiliate of any thereof, or any relative with a relationship no more remote than first cousin of any of the foregoing, is
presently, or has been during the two (2) years prior to the date hereof, except as disclosed in the SEC Documents, (i) a party
to any transaction with the Company or its Subsidiaries (including any contract, agreement or other arrangement providing for the
furnishing of services by, or rental of real or personal property from, or otherwise requiring payments to, any such director,
officer or stockholder or such associate or affiliate or relative Subsidiaries (other than for ordinary course services as employees,
officers or directors of the Company or any of its Subsidiaries)) or (ii) the direct or indirect owner of an interest in any corporation,
firm, association or business organization which is a competitor, supplier or customer of the Company or its Subsidiaries (except
for a passive investment (direct or indirect) in less than 5% of the common stock of a company whose securities are traded on or
quoted through an Eligible Market (as defined in the Warrants)), nor does any such Person receive income from any source other
than the Company or its Subsidiaries which relates to the business of the Company or its Subsidiaries or should properly accrue
to the Company or its Subsidiaries. No employee, officer, stockholder or director of the Company or any of its Subsidiaries or
member of his or her immediate family is indebted to the Company or its Subsidiaries, as the case may be, nor is the Company or
any of its Subsidiaries indebted (or committed to make loans or extend or guarantee credit) to any of them, other than (i) for
payment of salary for services rendered, (ii) reimbursement for reasonable expenses incurred on behalf of the Company, (iii) for
other standard employee benefits made generally available to all employees or executives (including stock option agreements outstanding
under any stock option plan approved by the Board of Directors of the Company), (iv) under the Senior Secured Notes of the Company
referenced in the SEC Documents, and (v) with respect to accrued and unpaid dividends on the Series B Cumulative Convertible Preferred
Stock of the Company. 


 






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(o) 
Acknowledgement Regarding Buyers’ Trading Activity. It is understood and acknowledged
by the Company that (i) following the public disclosure of the transactions contemplated by the Transaction Documents, in accordance
with the terms thereof, none of the Buyers has been asked by the Company or any of its Subsidiaries to agree, nor has any Buyer
agreed with the Company or any of its Subsidiaries, to desist from effecting any transactions in or with respect to (including,
without limitation, purchasing or selling, long and/or short) any securities of the Company, or “derivative” securities
based on securities issued by the Company or to hold any of the Securities for any specified term; (ii) any Buyer, and counterparties
in “derivative” transactions to which any such Buyer is a party, directly or indirectly, presently may have a “short”
position in the Common Stock which was established prior to such Buyer’s knowledge of the transactions contemplated by the
Transaction Documents; (iii) each Buyer shall not be deemed to have any affiliation with or control over any arm’s length
counterparty in any “derivative” transaction; and (iv) each Buyer may rely on the Company’s obligation to timely
deliver shares of Common Stock upon exercise of the Securities as and when required pursuant to the Transaction Documents for purposes
of effecting trading in the Common Stock of the Company. The Company further understands and acknowledges that following the public
disclosure of the transactions contemplated by the Transaction Documents pursuant to the Press Release (as defined below) one or
more Buyers may engage in hedging and/or trading activities (including, without limitation, the location and/or reservation of
borrowable shares of Common Stock) at various times during the period that the Securities are outstanding, including, without limitation,
during the periods that the value and/or number of the Warrant Shares deliverable with respect to the Securities are being determined
and such hedging and/or trading activities (including, without limitation, the location and/or reservation of borrowable shares
of Common Stock), if any, can reduce the value of the existing stockholders’ equity interest in the Company both at and after
the time the hedging and/or trading activities are being conducted. The Company acknowledges that such aforementioned hedging and/or
trading activities do not constitute a breach of this Agreement, the Warrants or any other Transaction Document or any of the documents
executed in connection herewith or therewith.


 


(p) 
Manipulation of Price. Neither the Company nor any of its Subsidiaries has, and, to
the knowledge of the Company, no Person acting on their behalf has, directly or indirectly, (i) taken any action designed to cause
or to result in the stabilization or manipulation of the price of any security of the Company or any of its Subsidiaries to facilitate
the sale or resale of any of the Securities, (ii) sold, bid for, purchased, or paid any compensation for soliciting purchases of,
any of the Securities (other than the Placement Agent), (iii) except as disclosed in the SEC Documents, paid or agreed to pay to
any Person any compensation for soliciting another to purchase any other securities of the Company or any of its Subsidiaries in
the two (2) years prior to the date hereof, or (iv) paid or agreed to pay any Person for research services with respect to any
securities of the Company or any of its Subsidiaries.


 


(q) 
Registration Eligibility. The Company is eligible to register the Registrable Securities
(as defined in the Registration Rights Agreement) for resale by the Buyers using Form S-3 promulgated under the 1933 Act.


 


(r) 
Shell Company Status. The Company is not, and has never been, an issuer identified
in, or subject to, Rule 144(i).


 






    8


     


    

 


(s) 
Disclosure. The Company confirms that neither it nor any other Person acting on its
behalf has provided any of the Buyers or their agents or counsel with any information that constitutes or would reasonably be expected
to constitute material, non-public information concerning the Company or any of its Subsidiaries, other than the existence of the
transactions contemplated by this Agreement and the other Transaction Documents or such information that will be disclosed publicly
on or prior to the Closing. The Company understands and confirms that each of the Buyers will rely on the foregoing representations
in effecting transactions in securities of the Company. All disclosure provided to the Buyers regarding the Company and its Subsidiaries,
their businesses and the transactions contemplated hereby, including the schedules to this Agreement, furnished by or on behalf
of the Company or any of its Subsidiaries is true and correct and does not contain any untrue statement of a material fact or omit
to state any material fact necessary in order to make the statements made therein, in the light of the circumstances under which
they were made, not misleading. All of the written information furnished after the date hereof by or on behalf of the Company or
any of its Subsidiaries to each Buyer pursuant to or in connection with this Agreement and the other Transaction Documents, taken
as a whole, will be true and correct in all material respects as of the date on which such information is so provided and will
not contain any untrue statement of a material fact or omit to state any material fact necessary in order to make the statements
made therein, in the light of the circumstances under which they were made, not misleading. Each press release issued by the Company
or any of its Subsidiaries during the twelve (12) months preceding the date of this Agreement did not at the time of release contain
any untrue statement of a material fact or 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 are made, not misleading. No event or circumstance
has occurred or information exists with respect to the Company or any of its Subsidiaries or its or their business, properties,
liabilities, prospects, operations (including results thereof) or conditions (financial or otherwise), which, under applicable
law, rule or regulation, requires public disclosure at or before the date hereof or announcement by the Company but which has not
been so publicly disclosed. All financial projections and forecasts that have been prepared by or on behalf of the Company or any
of its Subsidiaries and made available to the Buyers have been prepared in good faith based upon reasonable assumptions and represented,
at the time each such financial projection or forecast was delivered to each Buyer, the Company’s best estimate of future
financial performance (it being recognized that such financial projections or forecasts are not to be viewed as facts and that
the actual results during the period or periods covered by any such financial projections or forecasts may differ materially from
the projected or forecasted results). The Company acknowledges and agrees that no Buyer makes or has made any representations or
warranties with respect to the transactions contemplated hereby other than those specifically set forth in Section 2.


 


4. 
COVENANTS.


 


(a) 
Best Efforts. Each Buyer shall use its best efforts to timely satisfy each of the covenants
hereunder and conditions to be satisfied by it as provided in Section 6 of this Agreement. The Company shall use its best efforts
to timely satisfy each of the covenants hereunder and conditions to be satisfied by it as provided in Section 7 of this Agreement.


 


(b) 
Form D and Blue Sky. The Company shall file a Form D with respect to the Securities
as required under Regulation D and provide a copy thereof to each Buyer promptly after such filing. The Company shall, on or before
the Closing Date, take such action as the Company shall reasonably determine is necessary in order to obtain an exemption for,
or to, qualify the Securities for sale to the Buyers at the Closing pursuant to this Agreement under applicable securities or “Blue
Sky” laws of the states of the United States (or to obtain an exemption from such qualification), and shall provide evidence
of any such action so taken to the Buyers on or prior to the Closing Date. Without limiting any other obligation of the Company
under this Agreement, the Company shall timely make all filings and reports relating to the offer and sale of the Securities required
under all applicable securities laws (including, without limitation, all applicable federal securities laws and all applicable
“Blue Sky” laws), and the Company shall comply with all applicable foreign, federal, state and local laws, statutes,
rules, regulations and the like relating to the offering and sale of the Securities to the Buyers.


 


(c) 
Reporting Status. Until the date on which the Buyers shall have sold all of the Registrable
Securities (the “Reporting Period”), the Company shall timely file all reports required to be filed with the
SEC pursuant to the 1934 Act, and the Company shall not terminate its status as an issuer required to file reports under the 1934
Act even if the 1934 Act or the rules and regulations thereunder would no longer require or otherwise permit such termination.


 






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(d) 
Listing. The Company shall promptly secure the listing or designation for quotation
(as the case may be) of all of the Registrable Securities upon each national securities exchange and automated quotation system,
if any, upon which the Common Stock is then listed or designated for quotation (as the case may be) (subject to official notice
of issuance) and shall maintain such listing or designation for quotation (as the case may be) of all Registrable Securities from
time to time issuable under the terms of the Transaction Documents on such national securities exchange or automated quotation
system. The Company shall maintain the Common Stock’s listing or authorization for quotation (as the case may be) on the
Principal Market, The New York Stock Exchange, the NYSE American, the Nasdaq Global Select Market or the Nasdaq Global Market (each,
an “Eligible Market”). Neither the Company nor any of its Subsidiaries shall take any action which would be
reasonably expected to result in the delisting or suspension of the Common Stock on an Eligible Market. The Company shall pay all
fees and expenses in connection with satisfying its obligations under this Section 4(f).


 


(e) 
Fees. The Company shall be responsible for the payment of any placement agent’s
fees, financial advisory fees, transfer agent fees, DTC (as defined below) fees or broker’s commissions (other than for Persons
engaged by any Buyer) relating to or arising out of the transactions contemplated hereby (including, without limitation, any fees
or commissions payable to the Placement Agent, who is the Company’s sole placement agent in connection with the transactions
contemplated by this Agreement). The Company shall pay, and hold each Buyer harmless against, any liability, loss or expense (including,
without limitation, reasonable attorneys’ fees and out-of-pocket expenses) arising in connection with any claim relating
to any such payment. Except as otherwise set forth in the Transaction Documents, each party to this Agreement shall bear its own
expenses in connection with the sale of the Securities to the Buyers.


 


(f) 
Pledge of Securities. Notwithstanding anything to the contrary contained in this Agreement,
the Company acknowledges and agrees that the Securities may be pledged by a Buyer in connection with a bona fide margin agreement
or other loan or financing arrangement that is secured by the Securities. The pledge of Securities shall not be deemed to be a
transfer, sale or assignment of the Securities hereunder, and no Buyer effecting a pledge of Securities shall be required to provide
the Company with any notice thereof or otherwise make any delivery to the Company pursuant to this Agreement or any other Transaction
Document, including, without limitation, Section 2(g) hereof; provided that a Buyer and its pledgee shall be required to
comply with the provisions of Section 2(g) hereof in order to effect a sale, transfer or assignment of Securities to such pledgee.
The Company hereby agrees to execute and deliver such documentation as a pledgee of the Securities may reasonably request in connection
with a pledge of the Securities to such pledgee by a Buyer.


 


(g) 
Disclosure of Transactions and Other Material Information. 


 


(i) 
Disclosure of Transaction. The Company shall, on or before 9:30 a.m., New York time, on the first (1st)
Business Day after the date of this Agreement, issue a press release (the “Press Release”) reasonably acceptable
to the Buyers disclosing all the material terms of the transactions contemplated by the Transaction Documents. On or before 9:30
a.m., New York time, on the first (1st) Business Day after the date of this Agreement, the Company shall file a Current
Report on Form 8-K describing all the material terms of the transactions contemplated by the Transaction Documents in the form
required by the 1934 Act and attaching all the material Transaction Documents (including, without limitation, this Agreement (and
all schedules to this Agreement), the form of Warrants, and the form of the Registration Rights Agreement) (including all attachments,
the “8-K Filing”). From and after the filing of the 8-K Filing, the Company shall have disclosed all material,
non-public information (if any) provided to any of the Buyers by the Company or any of its Subsidiaries or any of their respective
officers, directors, employees or agents in connection with the transactions contemplated by the Transaction Documents. In addition,
effective upon the filing of the 8-K Filing, the Company acknowledges and agrees that any and all confidentiality or similar obligations
under any agreement, whether written or oral, between the Company, any of its Subsidiaries or any of their respective officers,
directors, affiliates, employees or agents, on the one hand, and any of the Buyers or any of their affiliates, on the other hand,
shall terminate.


 






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(ii) 
Limitations on Disclosure. The Company shall not, and the Company shall cause each of its Subsidiaries and each of
its and their respective officers, directors, employees and agents not to, provide any Buyer with any material, non-public information
regarding the Company or any of its Subsidiaries from and after the date hereof without the express prior written consent of such
Buyer (which may be granted or withheld in such Buyer’s sole discretion). In the event of a breach of any of the foregoing
covenants, or any of the covenants or agreements contained in any other Transaction Document, by the Company, any of its Subsidiaries,
or any of its or their respective officers, directors, employees and agents (as determined in the reasonable good faith judgment
of such Buyer), in addition to any other remedy provided herein or in the Transaction Documents, such Buyer shall have the right
to make a public disclosure, in the form of a press release, public advertisement or otherwise, of such breach or such material,
non-public information, as applicable, without the prior approval by the Company, any of its Subsidiaries, or any of its or their
respective officers, directors, employees or agents. No Buyer shall have any liability to the Company, any of its Subsidiaries,
or any of its or their respective officers, directors, employees, affiliates, stockholders or agents, for any such disclosure.
To the extent that the Company delivers any material, non-public information to a Buyer without such Buyer’s consent, the
Company hereby covenants and agrees that such Buyer shall not have any duty of confidentiality with respect to, or a duty not to
trade on the basis of, such material, non-public information. Subject to the foregoing, neither the Company, its Subsidiaries nor
any Buyer shall issue any press releases or any other public statements with respect to the transactions contemplated hereby; provided,
however, the Company shall be entitled, without the prior approval of any Buyer, to make the Press Release and any press release
or other public disclosure with respect to such transactions (i) in substantial conformity with the 8-K Filing and contemporaneously
therewith and (ii) as is required by applicable law and regulations (provided that in the case of clause (i) each Buyer shall be
consulted by the Company in connection with any such press release or other public disclosure prior to its release). Notwithstanding
anything contained in this Agreement to the contrary and without implication that the contrary would otherwise be true, the Company
expressly acknowledges and agrees that no Buyer shall have (unless expressly agreed to by a particular Buyer after the date hereof
in a written definitive and binding agreement executed by the Company and such particular Buyer (it being understood and agreed
that no Buyer may bind any other Buyer with respect thereto)), any duty of confidentiality with respect to, or a duty not to trade
on the basis of, any material, non-public information regarding the Company or any of its Subsidiaries.


 


(h) 
Additional Registration Statements. Until the Applicable Date (as defined below) and
at any time thereafter while any Registration Statement is not effective or the prospectus contained therein is not available for
use or any Current Public Information Failure (as defined in the Registration Rights Agreement) exists, the Company shall not file
a registration statement or an offering statement under the 1933 Act relating to securities that are not the Registrable Securities
(other than a registration statement on Form S-8 or such supplements or amendments to registration statements that are outstanding
and have been declared effective by the SEC as of the date hereof (solely to the extent necessary to keep such registration statements
effective and available and not with respect to any Subsequent Placement)). “Applicable Date” means the earlier
of (x) the first date on which the resale by the Buyers of all the Registrable Securities required to be filed on the initial Registration
Statement (as defined in the Registration Rights Agreement) pursuant to the Registration Rights Agreement is declared effective
by the SEC (and each prospectus contained therein is available for use on such date) or (y) the first date on which all of the
Registrable Securities are eligible to be resold by the Buyers pursuant to Rule 144 (or, if a Current Public Information Failure
has occurred and is continuing, such later date after which the Company has cured such Current Public Information Failure).


 






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(i) 
Additional Issuance of Securities. The Company agrees that for the period commencing
on the date hereof and ending on the date immediately following the ninetieth (90th) calendar day after the Closing
(the “Restricted Period”), neither the Company nor any of its Subsidiaries will, directly or indirectly issue,
offer, sell, grant any option or right to purchase, or otherwise dispose of (or announce any issuance, offer, sale, grant of any
option or right to purchase or other disposition of) any equity security or any equity-linked security (including, without limitation,
any “equity security” (as that term is defined under Rule 405 promulgated under the 1933 Act), any Convertible Securities
(as defined below), any preferred stock or any equity purchase rights) (any such issuance, offer, sale, grant, disposition or announcement
(whether occurring during the Restricted Period or at any time thereafter) is referred to as a “Subsequent Placement”).
Notwithstanding the foregoing, this Section 4(i) shall not apply in respect of the issuance of (i) shares of Common Stock or standard
options to purchase Common Stock to directors, officers or employees of the Company in their capacity as such pursuant to an Approved
Stock Plan (as defined below); (ii) shares of Common Stock issued upon exercise or conversion of Convertible Securities (other
than standard options to purchase Common Stock issued pursuant to an Approved Stock Plan that are covered by clause (i) above)
issued prior to the date hereof, provided that the exercise or other method of issuance (as the case may be) of any such Convertible
Security is made solely pursuant to the exercise or other method of issuance (as the case may be) provisions of such Convertible
Security that were in effect on the date immediately prior to the date of this Agreement, the exercise or issuance price of any
such Convertible Securities (other than standard options to purchase Common Stock issued pursuant to an Approved Stock Plan that
are covered by clause (i) above) is not lowered at the Company’s discretion, none of such Convertible Securities (other than
standard options to purchase Common Stock issued pursuant to an Approved Stock Plan that are covered by clause (i) above) are amended
to increase the number of shares issuable thereunder and none of the terms or conditions of any such Convertible Securities (other
than standard options to purchase Common Stock issued pursuant to an Approved Stock Plan that are covered by clause (i) above)
are otherwise materially changed in any manner that adversely affects any of the Buyers; (iii) the Warrant Shares and (iv) any
shares of Common Stock issued or issuable in connection with strategic or commercial alliances, acquisitions, mergers, and strategic
partnerships, provided, that (x) the primary purpose of such issuance is not to raise capital as reasonably determined, (y) the
purchaser or acquirer of the securities in such issuance solely consists of either (A) the actual participants in such strategic
or commercial alliance or strategic or commercial partnership, (B) the actual owners of such assets or securities acquired in such
acquisition or merger or (C) the stockholders, partners or members of the foregoing Persons, in each case, 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, and (z) the number or amount of securities
issued to such Persons by the Company shall not be disproportionate to each such Person’s actual participation in such strategic
or commercial alliance or strategic or commercial partnership or ownership of such assets or securities to be acquired by the Company,
as applicable, (each of the foregoing in clauses (i) through (iv), collectively the “Excluded Securities”).
“Approved Stock Plan” means any employee benefit plan which has been approved by the board of directors of the
Company prior to or subsequent to the date hereof pursuant to which shares of Common Stock and standard options to purchase Common
Stock may be issued to any employee, officer or director for services provided to the Company in their capacity as such. “Convertible
Securities” means any capital stock or other security of the Company or any of its Subsidiaries 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 capital stock or other equity security of the Company (including, without limitation, Common Stock)
or any of its Subsidiaries. Notwithstanding anything to the contrary contained in this Agreement, the Company may offer and sell
its interest in any Subsidiary, and any Subsidiary may offer and sell its interest in any other Subsidiary, including through a
merger with one or more third parties, and the same shall not be considered a Subsequent Placement and such interest, and any securities
issued in connection with any such merger, shall be deemed Excluded Securities. 


 


(j) 
Reservation of Shares. So long as any of the Warrants remain outstanding, the Company
shall take all action necessary to at all times have authorized, and reserved for the purpose of issuance, no less than 100% of
the maximum number of shares of Common Stock issuable upon exercise of all the Warrants then outstanding (collectively, the “Required
Reserve Amount”); provided that at no time shall the number of shares of Common Stock reserved pursuant to this Section
4(j) be reduced other than proportionally in connection with any exercise, expiration or redemption, as applicable, of Warrants.
If at any time the number of shares of Common Stock authorized and reserved for issuance is not sufficient to meet the Required
Reserve Amount, the Company will promptly take all corporate action necessary to authorize and reserve a sufficient number of shares,
including, without limitation, calling a special meeting of stockholders to authorize additional shares to meet the Company’s
obligations pursuant to the Transaction Documents, in the case of an insufficient number of authorized shares, obtain stockholder
approval of an increase in such authorized number of shares, and voting the management shares of the Company in favor of an increase
in the authorized shares of the Company to ensure that the number of authorized shares is sufficient to meet the Required Reserve
Amount.


 


(k) 
Conduct of Business. The business of the Company and its Subsidiaries shall, prior
to the Closing Date, not be conducted in violation of any law, ordinance or regulation of any Governmental Entity, except where
such violations would not reasonably be expected to result, either individually or in the aggregate, in a Material Adverse Effect.


 


(l) 
General Solicitation. None of the Company, any of its affiliates (as defined in
Rule 501(b) under the 1933 Act) or any person acting on behalf of the Company or such affiliate will, during the Restricted Period
(except as to the Excluded Securities), solicit any offer to buy or offer or sell the Securities by means of any form of general
solicitation or general advertising within the meaning of Regulation D, including: (i) any advertisement, article, notice
or other communication published in any newspaper, magazine or similar medium or broadcast over television or radio; and (ii) any
seminar or meeting whose attendees have been invited by any general solicitation or general advertising.


 






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(m) 
Integration. None of the Company, any of its affiliates (as defined in Rule 501(b)
under the 1933 Act), or any person acting on behalf of the Company or such affiliate will sell, offer for sale, or solicit offers
to buy or otherwise negotiate in respect of any security (as defined in the 1933 Act) which will be integrated with the sale of
the Securities in a manner which would require the registration of the Securities under the 1933 Act or require stockholder approval
under the rules and regulations of the Principal Market and the Company will take all action that is appropriate or necessary
to assure that its offerings of other securities will not be integrated for purposes of the 1933 Act or the rules and regulations
of the Principal Market, with the issuance of Securities contemplated hereby.


 


(n) 
Notice of Disqualification Events. The Company will notify the Buyers in writing,
prior to the Closing Date of (i) any Disqualifying Event occurring prior to the Closing Date relating to any Covered Person of
the Company (as such terms are used in Rule 506 of the 1933 Act) and (ii) any event occurring prior to the Closing Date that would,
with the passage of time, become a Disqualifying Event relating to any Covered Person of the Company.


 


(o) 
Participation Right. At any time on or prior to the eighteen (18) month anniversary
of the Closing Date, neither the Company nor any of its Subsidiaries shall, directly or indirectly, effect any Subsequent Placement
unless the Company shall have first complied with this Section 4(o). This Section 4(o) will terminate upon the expiration
of such period. The Company acknowledges and agrees that the right set forth in this Section 4(o) is a right granted by the
Company, separately, to each Buyer.


 


(i) 
At least three (3) calendar days prior to any proposed or intended Subsequent Placement, the Company shall deliver to each
Buyer a written notice (each such notice, a “Pre-Notice”), which Pre-Notice shall not contain any information
(including, without limitation, material, non-public information) other than: (A) if the proposed Offer Notice (as defined below)
constitutes or contains material, non-public information, a statement asking whether the Buyer is willing to accept material non-public
information or (B) if the proposed Offer Notice does not constitute or contain material, non-public information, (x) a statement
that the Company proposes or intends to effect a Subsequent Placement, (y) a statement that the statement in clause (x) above does
not constitute material, non-public information and (z) a statement informing such Buyer that it is entitled to receive an Offer
Notice (as defined below) with respect to such Subsequent Placement upon its written request. Upon the written request of a Buyer
within one (1) calendar day after the Company’s delivery to such Buyer of such Pre-Notice, and only upon a written request
by such Buyer, the Company shall promptly, but no later than one (1) calendar day after such request, deliver to such Buyer an
irrevocable written notice (the “Offer Notice”) of any proposed or intended issuance or sale or exchange (the
“Offer”) of the securities being offered (the “Offered Securities”) in a Subsequent Placement,
which Offer Notice shall (A) identify and describe the Offered Securities to the extent such information is then available to the
Company, (B) describe the price and other terms upon which they are to be issued, sold or exchanged, and the number or amount of
the Offered Securities to be issued, sold or exchanged, in each case to the extent such information is then available to the Company,
(C) identify the Persons (if known) to which the Offered Securities are to be offered, issued or sold and (D) offer to issue and
sell to such Buyer in accordance with the terms of the Offer such Buyer’s pro rata portion of 30% of the Offered Securities,
provided that the number of Offered Securities which such Buyer shall have the right to subscribe for under this Section 4(o) shall
be based on such Buyer’s pro rata portion of the aggregate amount of the Warrants purchased hereunder by all Buyers (the
“Basic Amount”).


 


(ii) 
To accept an Offer, in whole or in part, such Buyer must deliver a written notice to the Company prior to the end of the
third (3rd) calendar day after such Buyer’s receipt of the Pre-Notice (the “Offer Period”),
setting forth the portion of such Buyer’s Basic Amount that such Buyer elects to purchase (the “Notice of Acceptance”).
If a Buyer fails to duly respond to the Pre-Notice or the Offer Notice within one (1) calendar day thereof, or otherwise waives
its participation right in writing, then the Company’s obligations hereunder as to such Subsequent Placement shall be deemed
waived and suspended for the period of ten (10) Trading Days following the expiration of the Offer Period. Notwithstanding the
foregoing, if the Company desires to materially modify or amend the terms and conditions of the Offer prior to the expiration of
the Offer Period, the Company may deliver to each Buyer a new Offer Notice and the Offer Period shall expire on the third (3rd)
calendar day after such Buyer’s receipt of such new Offer Notice.


 






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(iii) 
The Company shall have ten (10) Trading Days following the expiration of the Offer Period above (A) to offer, issue, sell
or exchange all or any part of such Offered Securities as to which a Notice of Acceptance has not been given by a Buyer (the “Refused
Securities”) pursuant to a definitive agreement(s) (the “Subsequent Placement Agreement”), but only
to the offerees described in the Offer Notice (if so described therein) and only upon terms and conditions (including, without
limitation, unit prices and interest rates) that are not materially more favorable to the acquiring Person or Persons or materially
less favorable to the Company than those set forth in the Offer Notice (to the extent described therein) and (B) to publicly announce
(x) the execution of such Subsequent Placement Agreement, and (y) either (I) the consummation of the transactions contemplated
by such Subsequent Placement Agreement or (II) the termination of such Subsequent Placement Agreement, which shall be filed with
the SEC on a Current Report on Form 8-K with such Subsequent Placement Agreement and any documents contemplated therein filed as
exhibits thereto.


 


(iv) 
In the event the Company shall propose to sell less than all the Refused Securities (any such sale to be in the manner and
on the terms specified in Section 4(o)(iii) above), then each Buyer may, at its sole option and in its sole discretion, withdraw
its Notice of Acceptance or reduce the number or amount of the Offered Securities specified in its Notice of Acceptance to an amount
that shall be not less than the number or amount of the Offered Securities that such Buyer elected to purchase pursuant to Section 4(o)(ii)
above multiplied by a fraction, (i) the numerator of which shall be the number or amount of Offered Securities the Company actually
proposes to issue, sell or exchange (including Offered Securities to be issued or sold to Buyers pursuant to this Section 4(o)
prior to such reduction) and (ii) the denominator of which shall be the original amount of the Offered Securities. In the event
that any Buyer so elects to reduce the number or amount of Offered Securities specified in its Notice of Acceptance, the Company
may not issue, sell or exchange more than the reduced number or amount of the Offered Securities unless and until such securities
have again been offered to the Buyers in accordance with Section 4(o)(i) above.


 


(v) 
Upon the closing of the issuance, sale or exchange of all or less than all of the Refused Securities, such Buyer shall acquire
from the Company, and the Company shall issue to such Buyer, the number or amount of Offered Securities specified in its Notice
of Acceptance, as reduced pursuant to Section 4(o)(iv) above if such Buyer has so elected, upon the terms and conditions specified
in the Offer.


 


(vi) 
Any Offered Securities not acquired by a Buyer or other Persons in accordance with this Section 4(o) may not be issued,
sold or exchanged until they are again offered to such Buyer under the procedures specified in this Agreement.


 


(vii) 
The Company and each Buyer agree that if any Buyer elects to participate in the Offer, neither the Subsequent Placement
Agreement with respect to such Offer nor any other transaction documents related thereto (collectively, the “Subsequent
Placement Documents”) shall include any term or provision whereby such Buyer shall be required to consent to any amendment
to or termination of, or grant any waiver, release or the like under or in connection with, any agreement previously entered into
with the Company or any instrument received from the Company.


 


(viii) 
Notwithstanding anything to the contrary in this Section 4(o) and unless otherwise agreed to by such Buyer, the Company
shall either confirm in writing to such Buyer that the transaction with respect to the Subsequent Placement has been abandoned
or shall publicly disclose its intention to issue the Offered Securities, in either case, in such a manner such that such Buyer
will not be in possession of any material, non-public information, by the tenth (10th) Trading Day following delivery
of the Offer Notice. If by such tenth (10th) Trading Day, no public disclosure regarding a transaction with respect
to the Offered Securities has been made, and no notice regarding the abandonment of such transaction has been received by such
Buyer, such transaction shall be deemed to have been abandoned and such Buyer shall not be in possession of any material, non-public
information with respect to the Company or any of its Subsidiaries. Should the Company decide to pursue such transaction with respect
to the Offered Securities, the Company shall provide such Buyer with another Offer Notice and such Buyer will again have the right
of participation set forth in this Section 4(o).


 






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(ix) 
The restrictions contained in this Section 4(o) shall not apply in connection with the issuance of any Excluded Securities.
The Company shall not circumvent the provisions of this Section 4(o) by providing terms or conditions to one Buyer that are not
provided to all Buyers.


 


5. 
REGISTER; TRANSFER AGENT INSTRUCTIONS; LEGEND.


 


(a) 
Register. The Company shall maintain at its principal executive offices (or such other
office or agency of the Company as it may designate by notice to each holder of Securities), a register for the Warrants in which
the Company shall record the name and address of the Person in whose name the Warrants have been issued (including the name and
address of each transferee), the principal amount of the Warrants held by such Person and the number of Warrant Shares issuable
pursuant to the terms of the Warrants. The Company shall keep the register open and available at all times during business hours
for inspection of any Buyer or its legal representatives.


 


(b) 
Transfer Agent Instructions. The Company shall issue irrevocable instructions to its
transfer agent and any subsequent transfer agent (as applicable, the “Transfer Agent”) in a form acceptable
to each of the Buyers (the “Irrevocable Transfer Agent Instructions”) to issue certificates or credit shares
to the applicable balance accounts at The Depository Trust Company (“DTC”), registered in the name of each Buyer
or its respective nominee(s), for the Warrant Shares in such amounts as specified from time to time by each Buyer to the Company
upon exercise of the Warrants. The Company represents and warrants that no instruction other than the Irrevocable Transfer Agent
Instructions referred to in this Section 5(b), and stop transfer instructions to give effect to Section 2(g) hereof, will
be given by the Company to its transfer agent with respect to the Securities, and that the Securities shall otherwise be freely
transferable on the books and records of the Company, as applicable, to the extent provided in this Agreement and the other Transaction
Documents. If a Buyer effects a sale, assignment or transfer of the Securities in accordance with Section 2(g), the Company shall
permit the transfer and shall promptly instruct its transfer agent to issue one or more certificates or credit shares to the applicable
balance accounts at DTC in such name and in such denominations as specified by such Buyer to effect such sale, transfer or assignment.
In the event that such sale, assignment or transfer involves Warrant Shares sold, assigned or transferred pursuant to an effective
registration statement or in compliance with Rule 144, the transfer agent shall issue such shares to such Buyer, assignee or transferee
(as the case may be) without any restrictive legend in accordance with Section 5(d) below. The Company acknowledges that a
breach by it of its obligations hereunder will cause irreparable harm to a Buyer. Accordingly, the Company acknowledges that the
remedy at law for a breach of its obligations under this Section 5(b) will be inadequate and agrees, in the event of a breach
or threatened breach by the Company of the provisions of this Section 5(b), that a Buyer shall be entitled, in addition to
all other available remedies, to an order and/or injunction restraining any breach and requiring immediate issuance and transfer,
without the necessity of showing economic loss and without any bond or other security being required. The Company shall cause its
counsel to issue the legal opinion referred to in the Irrevocable Transfer Agent Instructions to the Company’s transfer agent
on each Effective Date (as defined in the Registration Rights Agreement). Any fees (with respect to the transfer agent, counsel
to the Company or otherwise) associated with the issuance of such opinion or the removal of any legends on any of the Securities
shall be borne by the Company.


 


(c) 
Legends. Each Buyer understands that the Securities have been issued (or will be issued
in the case of the Warrant Shares) pursuant to an exemption from registration or qualification under the 1933 Act and applicable
state securities laws, and except as set forth below, the Securities shall bear any legend as required by the “blue sky”
laws of any state and a restrictive legend in substantially the following form (and a stop-transfer order may be placed against
transfer of such stock certificates):


 


[NEITHER THE ISSUANCE AND SALE OF THE
SECURITIES REPRESENTED BY THIS CERTIFICATE NOR THE SECURITIES INTO WHICH THESE SECURITIES ARE CONVERTIBLE HAVE BEEN][THE SECURITIES
REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN] REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES
LAWS. THE SECURITIES MAY NOT BE OFFERED FOR SALE, SOLD, TRANSFERRED OR ASSIGNED (I) IN THE ABSENCE OF (A) AN EFFECTIVE REGISTRATION
STATEMENT FOR THE SECURITIES UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR (B) AN OPINION OF COUNSEL TO THE HOLDER (IF REQUESTED
BY THE COMPANY), IN A FORM REASONABLY ACCEPTABLE TO THE COMPANY, THAT REGISTRATION IS NOT REQUIRED UNDER SAID ACT OR (II) UNLESS
SOLD OR ELIGIBLE TO BE SOLD PURSUANT TO RULE 144 OR RULE 144A UNDER SAID ACT. NOTWITHSTANDING THE FOREGOING, THE SECURITIES MAY
BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT OR OTHER LOAN OR FINANCING ARRANGEMENT SECURED BY THE SECURITIES.


 






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(d) 
Removal of Legends. Certificates evidencing Securities shall not be required to contain
the legend set forth in Section 5(c) above or any other legend (i) while a registration statement (including a Registration
Statement) covering the resale of such Securities is effective under the 1933 Act, (ii) following any sale of such Securities pursuant
to Rule 144 (assuming the transferor is not an affiliate of the Company), (iii) if such Securities are eligible to be sold, assigned
or transferred under Rule 144 (provided that a Buyer provides the Company with reasonable assurances that such Securities are eligible
for sale, assignment or transfer under Rule 144 which shall not include an opinion of Buyer’s counsel), (iv) in connection
with a sale, assignment or other transfer (other than under Rule 144), provided that such Buyer provides the Company with an opinion
of counsel to such Buyer, in a generally acceptable form, to the effect that such sale, assignment or transfer of the Securities
may be made without registration under the applicable requirements of the 1933 Act or (v) if such legend is not required under
applicable requirements of the 1933 Act (including, without limitation, controlling judicial interpretations and pronouncements
issued by the SEC). If a legend is not required pursuant to the foregoing, the Company shall no later than two (2) Trading Days
(or such earlier date as required pursuant to the 1934 Act or other applicable law, rule or regulation for the settlement of a
trade initiated on the date such Buyer delivers such legended certificate representing such Securities to the Company) following
the delivery by a Buyer to the Company or the transfer agent (with notice to the Company) of a legended certificate representing
such Securities (endorsed or with stock powers attached, signatures guaranteed, and otherwise in form necessary to affect the reissuance
and/or transfer, if applicable), together with any other deliveries from such Buyer as may be required above in this Section 5(d),
as directed by such Buyer, either: (A) provided that the Company’s transfer agent is participating in the DTC Fast Automated
Securities Transfer Program and such Securities are Warrant Shares, credit the aggregate number of shares of Common Stock to which
such Buyer shall be entitled to such Buyer’s or its designee’s balance account with DTC through its Deposit/Withdrawal
at Custodian system or (B) if the Company’s transfer agent is not participating in the DTC Fast Automated Securities Transfer
Program, issue and deliver (via reputable overnight courier) to such Buyer, a certificate representing such Securities that is
free from all restrictive and other legends, registered in the name of such Buyer or its designee (the date by which such credit
is so required to be made to the balance account of such Buyer’s or such Buyer’s designee with DTC or such certificate
is required to be delivered to such Buyer pursuant to the foregoing is referred to herein as the “Required Delivery Date”,
and the date such shares of Common Stock are actually delivered without restrictive legend to such Buyer or such Buyer’s
designee with DTC, as applicable, the “Share Delivery Date”). The Company shall be responsible for any transfer
agent fees or DTC fees with respect to any issuance of Securities or the removal of any legends with respect to any Securities
in accordance herewith.


 


(e) 
Failure to Timely Deliver; Buy-In. If the Company fails, for any reason or for no reason,
to issue and deliver (or cause to be delivered) to a Buyer (or its designee) by the Required Delivery Date, either (I) if the Transfer
Agent is not participating in the DTC Fast Automated Securities Transfer Program, a certificate for the number of Warrant Shares
to which such Buyer is entitled and register such Warrant Shares on the Company’s share register or, if the Transfer Agent
is participating in the DTC Fast Automated Securities Transfer Program, to credit the balance account of such Buyer or such Buyer’s
designee with DTC for such number of Warrant Shares submitted for legend removal by such Buyer pursuant to Section 5(d) above or
(II) if the Registration Statement covering the resale of the Warrant Shares submitted for legend removal by such Buyer pursuant
to Section 5(d) above (the “Unavailable Shares”) is not available for the resale of such Unavailable Shares
and the Company fails to promptly, but in no event later than as required pursuant to the Registration Rights Agreement (x) so
notify such Buyer and (y) deliver the Warrant Shares electronically without any restrictive legend by crediting such aggregate
number of Warrant Shares submitted for legend removal by such Buyer pursuant to Section 5(d) above to such Buyer’s or its
designee’s balance account with DTC through its Deposit/Withdrawal At Custodian system (the event described in the immediately
foregoing clause (II) is hereinafter referred as a “Notice Failure” and together with the event described in
clause (I) above, a “Delivery Failure”), and if on or after such Trading Day such Buyer purchases (in an open
market transaction or otherwise) shares of Common Stock to deliver in satisfaction of a sale by such Buyer of shares of Common
Stock submitted for legend removal by such Buyer pursuant to Section 5(d) above that such Buyer is entitled to receive from the
Company (a “Buy-In”), then the Company shall, within two (2) Trading Days after such Buyer’s request and
in such Buyer’s discretion, either (i) pay cash to such Buyer in an amount equal to such Buyer’s total purchase price
(including brokerage commissions and other out-of-pocket expenses, if any, for the shares of Common Stock so purchased) (the “Buy-In
Price”), at which point the Company’s obligation to so deliver such certificate or credit such Buyer’s balance
account shall terminate and such shares shall be cancelled, or (ii) promptly honor its obligation to so deliver to such Buyer a
certificate or certificates or credit the balance account of such Buyer or such Buyer’s designee with DTC representing such
number of shares of Common Stock that would have been so delivered if the Company timely complied with its obligations hereunder
and pay cash to such Buyer in an amount equal to the excess (if any) of the Buy-In Price over the product of (A) such number of
shares of Warrant Shares that the Company was required to deliver to such Buyer by the Required Delivery Date multiplied by (B)
the lowest Closing Sale Price (as defined in the Warrants) of the Common Stock on any Trading Day during the period commencing
on the date of the delivery by such Buyer to the Company of the applicable Warrant Shares and ending on the date of such delivery
and payment under this clause (ii). Nothing shall limit such Buyer’s right to pursue any other remedies available to it hereunder,
at law or in equity, including, without limitation, a decree of specific performance and/or injunctive relief with respect to the
Company’s failure to timely deliver certificates representing shares of Common Stock (or to electronically deliver such shares
of Common Stock) as required pursuant to the terms hereof. Notwithstanding anything herein to the contrary, with respect to any
given Notice Failure and/or Delivery Failure, this Section 5(e) shall not apply to the applicable Buyer the extent the Company
has already paid such amounts in full to such Buyer with respect to such Notice Failure and/or Delivery Failure, as applicable,
pursuant to the analogous sections of the Warrant held by such Buyer; and no Buyer shall receive both a Registration Delay Payment
(as defined in the Registration Rights Agreement) and payment under this Section 7(e) as to any Notice Failure or Delivery
Failure or in respect of the circumstances thereof.


 






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(f) 
FAST Compliance. While any Warrants remain outstanding, the Company shall maintain a transfer agent that participates
in the DTC Fast Automated Securities Transfer Program.


 


6. 
CONDITIONS TO THE COMPANY’S OBLIGATION TO SELL.


 


(a) 
The obligation of the Company hereunder to issue and sell the Warrants to each Buyer at the Closing is subject to the satisfaction,
at or before the Closing Date, of each of the following conditions, provided that these conditions are for the Company’s
sole benefit and may be waived by the Company at any time in its sole discretion by providing each Buyer with prior written notice
thereof: 


 


(i) 
The Subscription Date with respect to the Common Stock shall have occurred and the Offering thereof shall have simultaneously
closed as of the Closing hereunder.


 


(ii) 
Such Buyer shall have executed each of the other Transaction Documents to which it is a party and delivered the same to
the Company.


 


(iii) 
Such Buyer and each other Buyer shall have delivered to the Company the Purchase Price.


 


(iv) 
The representations and warranties of such Buyer shall be true and correct in all material respects as of the date when
made and as of the Closing Date as though originally made at that time (except for representations and warranties that speak as
of a specific date, which shall be true and correct as of such specific date), and such Buyer shall have performed, satisfied and
complied in all material respects with the covenants, agreements and conditions required by this Agreement to be performed, satisfied
or complied with by such Buyer at or prior to the Closing Date.


 


7. 
CONDITIONS TO EACH BUYER’S OBLIGATION TO PURCHASE.


 


(a) 
The obligation of each Buyer hereunder to purchase its Warrant at the Closing is subject to the satisfaction, at or before
the Closing Date, of each of the following conditions, provided that these conditions are for each Buyer’s sole benefit and
may be waived by such Buyer at any time in its sole discretion by providing the Company with prior written notice thereof: 


 


(i) 
The Subscription Date with respect to the Common Stock shall have occurred and the Offering thereof shall have simultaneously
closed as of the Closing hereunder.


 






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(ii) 
The Company and each Subsidiary (as the case may be) shall have duly executed and delivered to such Buyer each of the Transaction
Documents to which it is a party and the Company shall have duly executed and delivered to such Buyer a Warrant in such amount
as is set forth across from such Buyer’s name in column (3) of the Schedule of Buyers as being purchased by such Buyer at
the Closing pursuant to this Agreement.


 


(iii) 
The representations and warranties of the Company shall be true and correct in all material respects as of the date when
made and as of the Closing Date as though originally made at that time (except for representations and warranties that speak as
of a specific date, which shall be true and correct as of such specific date) and the Company shall have performed, satisfied and
complied in all material respects with the covenants, agreements and conditions required to be performed, satisfied or complied
with by the Company at or prior to the Closing Date. Such Buyer shall have received a certificate, duly executed by the Chief Executive
Officer of the Company, dated as of the Closing Date, to the foregoing effect and as to such other matters as may be reasonably
requested by such Buyer in the form acceptable to such Buyer.


 


(iv) 
The Company shall have obtained all governmental, regulatory or third party consents and approvals, if any, necessary for
the sale of the Securities, including without limitation, those required by the Principal Market, if any.


 


(v) 
No statute, rule, regulation, executive order, decree, ruling or injunction shall have been enacted, entered, promulgated
or endorsed by any court or Governmental Entity of competent jurisdiction that prohibits the consummation of any of the transactions
contemplated by the Transaction Documents.


 


(vi) 
Since the date of execution of this Agreement, no event or series of events shall have occurred that reasonably would have
or result in a Material Adverse Effect.


 


(vii) 
The Company shall have obtained approval of the Principal Market to list or designate for quotation (as the case may be)
the Warrant Shares.


 


(viii) 
The Company and its Subsidiaries shall have delivered to such Buyer such other documents, instruments or certificates relating
to the transactions contemplated by this Agreement as such Buyer or its counsel may reasonably request.


 


8. 
TERMINATION.


 


In the event that the
Closing shall not have occurred with respect to a Buyer within five (5) days of the date hereof, then such Buyer shall have the
right to terminate its obligations under this Agreement with respect to itself at any time on or after the close of business on
such date without liability of such Buyer to any other party; provided, however, (i) the right to terminate this Agreement under
this Section 8 shall not be available to such Buyer if the failure of the transactions contemplated by this Agreement to have
been consummated by such date is the result of such Buyer’s breach of this Agreement and (ii) the abandonment of the sale
and purchase of the Warrants shall be applicable only to such Buyer providing such written notice, provided further that no such
termination shall affect any obligation of the Company under this Agreement to reimburse such Buyer for the expenses described
in Section 4(g) above. Nothing contained in this Section 8 shall be deemed to release any party from any liability for
any breach by such party of the terms and provisions of this Agreement or the other Transaction Documents or to impair the right
of any party to compel specific performance by any other party of its obligations under this Agreement or the other Transaction
Documents.


 






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9. 
MISCELLANEOUS.


 


(a) 
Governing Law; Jurisdiction; Jury Trial. All questions concerning the construction,
validity, enforcement and interpretation of this Agreement shall be governed by the internal laws of the State of New York, without
giving effect to any choice of law or conflict of law provision or rule (whether of the State of New York or any other jurisdictions)
that would cause the application of the laws of any jurisdictions other than the State of New York. 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 under any of the other Transaction Documents or with any
transaction contemplated hereby or thereby, and hereby irrevocably waives, and agrees not to assert in any suit, action or proceeding,
any claim that it is not personally subject to the jurisdiction of any such court, that such suit, action or proceeding is brought
in an inconvenient forum or that the venue of such suit, action or proceeding is improper. Each party hereby irrevocably waives
personal service of process and consents to process being served in any such suit, action or proceeding by mailing a copy thereof
to such party at the address for such notices to it under this Agreement and agrees that such service shall constitute good and
sufficient service of process and notice thereof. Nothing contained herein shall be deemed to limit in any way any right to serve
process in any manner permitted by law. Nothing contained herein shall be deemed or operate to preclude any Buyer from bringing
suit or taking other legal action against the Company in any other jurisdiction to collect on the Company’s obligations to
such Buyer or to enforce a judgment or other court ruling in favor of such Buyer. EACH PARTY HEREBY IRREVOCABLY WAIVES ANY RIGHT
IT MAY HAVE TO, AND AGREES NOT TO REQUEST, A JURY TRIAL FOR THE ADJUDICATION OF ANY DISPUTE HEREUNDER OR UNDER ANY OTHER TRANSACTION
DOCUMENT OR IN CONNECTION WITH OR ARISING OUT OF THIS AGREEMENT, ANY OTHER TRANSACTION DOCUMENT OR ANY TRANSACTION CONTEMPLATED
HEREBY OR THEREBY.


 


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


 


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


 


(d) 
Severability; Maximum Payment Amounts. If any provision of this Agreement is prohibited
by law or otherwise determined to be invalid or unenforceable by a court of competent jurisdiction, the provision that would otherwise
be prohibited, invalid or unenforceable shall be deemed amended to apply to the broadest extent that it would be valid and enforceable,
and the invalidity or unenforceability of such provision shall not affect the validity of the remaining provisions of this Agreement
so long as this Agreement as so modified continues to express, without material change, the original intentions of the parties
as to the subject matter hereof and the prohibited nature, invalidity or unenforceability of the provision(s) in question does
not substantially impair the respective expectations or reciprocal obligations of the parties or the practical realization of the
benefits that would otherwise be conferred upon the parties. The parties will endeavor in good faith negotiations to replace the
prohibited, invalid or unenforceable provision(s) with a valid provision(s), the effect of which comes as close as possible to
that of the prohibited, invalid or unenforceable provision(s). Notwithstanding anything to the contrary contained in this Agreement
or any other Transaction Document (and without implication that the following is required or applicable), it is the intention of
the parties that in no event shall amounts and value paid by the Company and/or any of its Subsidiaries (as the case may be), or
payable to or received by any of the Buyers, under the Transaction Documents (including without limitation, any amounts that would
be characterized as “interest” under applicable law) exceed amounts permitted under any applicable law. Accordingly,
if any obligation to pay, payment made to any Buyer, or collection by any Buyer pursuant the Transaction Documents is finally judicially
determined to be contrary to any such applicable law, such obligation to pay, payment or collection shall be deemed to have been
made by mutual mistake of such Buyer, the Company and its Subsidiaries and such amount shall be deemed to have been adjusted with
retroactive effect to the maximum amount or rate of interest, as the case may be, as would not be so prohibited by the applicable
law. Such adjustment shall be effected, to the extent necessary, by reducing or refunding, at the option of such Buyer, the amount
of interest or any other amounts which would constitute unlawful amounts required to be paid or actually paid to such Buyer under
the Transaction Documents. For greater certainty, to the extent that any interest, charges, fees, expenses or other amounts required
to be paid to or received by such Buyer under any of the Transaction Documents or related thereto are held to be within the meaning
of “interest” or another applicable term to otherwise be violative of applicable law, such amounts shall be pro-rated
over the period of time to which they relate. 


 






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(e) 
Entire Agreement; Amendments. This Agreement, the other Transaction Documents and the
schedules and exhibits attached hereto and thereto and the instruments referenced herein and therein supersede all other prior
oral or written agreements between the Buyers, the Company, its Subsidiaries, their affiliates and Persons acting on their behalf,
including, without limitation, any transactions by any Buyer with respect to Common Stock or the Securities, and the other matters
contained herein and therein, and this Agreement, the other Transaction Documents, the schedules and exhibits attached hereto and
thereto and the instruments referenced herein and therein contain the entire understanding of the parties solely with respect to
the matters covered herein and therein; provided, however, nothing contained in this Agreement or any other Transaction Document
shall (or shall be deemed to) (i) have any effect on any agreements any Buyer has entered into with, or any instruments any Buyer
has received from, the Company or any of its Subsidiaries prior to the date hereof with respect to any prior investment made by
such Buyer in the Company or (ii) waive, alter, modify or amend in any respect any obligations of the Company or any of its Subsidiaries,
or any rights of or benefits to any Buyer or any other Person, in any agreement entered into prior to the date hereof between or
among the Company and/or any of its Subsidiaries and any Buyer, or any instruments any Buyer received from the Company and/or any
of its Subsidiaries prior to the date hereof, and all such agreements and instruments shall continue in full force and effect.
Except as specifically set forth herein or therein, neither the Company nor any Buyer makes any representation, warranty, covenant
or undertaking with respect to such matters. For clarification purposes, the Recitals are part of this Agreement. No provision
of this Agreement may be amended other than by an instrument in writing signed by the Company and the Required Holders (as defined
below), and any amendment to any provision of this Agreement made in conformity with the provisions of this Section 9(e) shall
be binding on all Buyers and holders of Securities, as applicable; provided that no such amendment shall be effective to the extent
that it (A) applies to less than all of the holders of the Securities then outstanding or (B) imposes any obligation or liability
on any Buyer without such Buyer’s prior written consent (which may be granted or withheld in such Buyer’s sole discretion).
No waiver shall be effective unless it is in writing and signed by an authorized representative of the waiving party, provided
that the Required Holders may waive any provision of this Agreement, and any waiver of any provision of this Agreement made in
conformity with the provisions of this Section 9(e) shall be binding on all Buyers and holders of Securities, as applicable,
provided that no such waiver shall be effective to the extent that it (1) applies to less than all of the holders of the Securities
then outstanding (unless a party gives a waiver as to itself only) or (2) imposes any obligation or liability on any Buyer without
such Buyer’s prior written consent (which may be granted or withheld in such Buyer’s sole discretion). No consideration
(other than reimbursement of legal fees) shall be offered or paid to any Person to amend or consent to a waiver or modification
of any provision of any of the Transaction Documents unless the same consideration also is offered to all of the parties to the
Transaction Documents and all holders of the Warrants. From the date hereof and while any Warrants are outstanding, the Company
shall not be permitted to receive any consideration from a Buyer or a holder of Warrants that is not otherwise contemplated by
the Transaction Documents in order to, directly or indirectly, induce the Company or any Subsidiary (i) to treat such Buyer or
holder of Warrants in a manner that is more favorable with respect to the Warrants or Warrant Shares than to other similarly situated
Buyers or holders of Warrants, or (ii) to treat any Buyer(s) or holder(s) of Warrants in a manner that is less favorable with respect
to the Warrants or Warrant Shares than the Buyer or holder of Warrants that is paying such consideration; provided, however, that
the determination of whether a Buyer has been treated more or less favorably than another Buyer shall disregard any securities
of the Company purchased or sold by any Buyer. The Company has not, directly or indirectly, made any agreements with any Buyers
relating to the terms or conditions of the transactions contemplated by the Transaction Documents except as set forth in the Transaction
Documents. Without limiting the foregoing, the Company confirms that, except as set forth in this Agreement, no Buyer has made
any commitment or promise or has any other obligation to provide any financing to the Company, any Subsidiary or otherwise. As
a material inducement for each Buyer to enter into this Agreement, the Company expressly acknowledges and agrees that (x) no due
diligence or other investigation or inquiry conducted by a Buyer, any of its advisors or any of its representatives shall affect
such Buyer’s right to rely on, or shall modify or qualify in any manner or be an exception to any of, the Company’s
representations and warranties contained in this Agreement or any other Transaction Document and (y) unless a provision of this
Agreement or any other Transaction Document is expressly preceded by the phrase “except as disclosed in the SEC Documents,”
nothing contained in any of the SEC Documents shall affect such Buyer’s right to rely on, or shall modify or qualify in any
manner or be an exception to any of, the Company’s representations and warranties contained in this Agreement or any other
Transaction Document. “Required Holders” means (I) prior to the Closing Date, each Buyer entitled to purchase
Warrants at the Closing and (II) on or after the Closing Date, holders of a majority of the Registrable Securities as of such time
(excluding any Registrable Securities held by the Company or any of its Subsidiaries as of such time) issued or issuable hereunder
or pursuant to the Warrants (or the Buyers, with respect to any waiver or amendment of Section 4(o)).


 






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


 


If to the Company:


 


Pacific Ethanol, Inc.

400 Capitol Mall, Suite 2060

Sacramento, California 95814

Telephone: (916) 403-2123

Attention: Chief Executive Officer




 


With a copy (for informational purposes only) to:


 


Troutman Pepper Hamilton Sanders LLP

5 Park Plaza, Suite 1400

Irvine, California 92614

Telephone: 949-622-2700

Attention: Larry A. Cerutti, Esq.

E-Mail: Larry.Cerutti@Troutman.com


 


If to the Transfer Agent:


 


American Stock Transfer & Trust Company, LLC

6201 15th Avenue

Brooklyn, New York 11219

Telephone: (212) 936-5100

Facsimile: (718) 765-8719

Attention: Felix Orihuela and William Torre


 


If to a Buyer, to its address, e-mail address and facsimile
number set forth on the Schedule of Buyers, with copies to such Buyer’s representatives as set forth on the Schedule of Buyers,


 


(g) 
Successors and Assigns. This Agreement shall be binding upon and inure to the benefit
of the parties and their respective successors and assigns, including any purchasers of any of the Warrants. The Company shall
not assign this Agreement or any rights or obligations hereunder without the prior written consent of the Required Holders, including,
without limitation, by way of a Fundamental Transaction (as defined in the Warrants) (unless the Company is in compliance with
the applicable provisions governing Fundamental Transactions set forth in the Warrants). A Buyer may assign some or all of its
rights hereunder in connection with any transfer of any of its Securities without the consent of the Company, in which event such
assignee shall be deemed to be a Buyer hereunder with respect to such assigned rights.


 






    21


     


    

 


(h) 
No Third Party Beneficiaries. This Agreement is intended for the benefit of the parties
hereto and their respective permitted successors and assigns, and is not for the benefit of, nor may any provision hereof be enforced
by, any other Person, other than the Indemnitees referred to in Section 9(k).


 


(i) 
Survival. The representations, warranties, agreements and covenants shall survive the
Closing. Each Buyer shall be responsible only for its own representations, warranties, agreements and covenants hereunder.


 


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


 


(k) 
Indemnification. In consideration of each Buyer’s execution and delivery of the
Transaction Documents and acquiring the Securities thereunder and in addition to all of the Company’s other obligations under
the Transaction Documents, the Company shall defend, protect, indemnify and hold harmless each Buyer and each holder of any Securities
and all of their stockholders, partners, members, officers, directors, employees and direct or indirect investors and any of the
foregoing Persons’ agents or other representatives (including, without limitation, those retained in connection with the
transactions contemplated by this Agreement) (collectively, the “Indemnitees”) from and against any and all
actions, causes of action, suits, claims, losses, costs, penalties, fees, liabilities and damages, and expenses in connection therewith
(irrespective of whether any such Indemnitee is a party to the action for which indemnification hereunder is sought), and including
reasonable attorneys’ fees and disbursements (the “Indemnified Liabilities”), incurred by any Indemnitee
as a result of, or arising out of, or relating to (i) any misrepresentation or breach of any representation or warranty made by
the Company or any Subsidiary in any of the Transaction Documents, (ii) any breach of any covenant, agreement or obligation of
the Company or any Subsidiary contained in any of the Transaction Documents or (iii) any cause of action, suit, proceeding or claim
brought or made against such Indemnitee by a third party (including for these purposes a derivative action brought on behalf of
the Company or any Subsidiary) or which otherwise involves such Indemnitee that arises out of or results from (A) the execution,
delivery, performance or enforcement of any of the Transaction Documents, (B) any transaction financed or to be financed in whole
or in part, directly or indirectly, with the proceeds of the issuance of the Securities, (C) any disclosure properly made by such
Buyer pursuant to Section 4(i), or (D) the status of such Buyer or holder of the Securities either as an investor in the Company
pursuant to the transactions contemplated by the Transaction Documents or as a party to this Agreement (including, without limitation,
as a party in interest or otherwise in any action or proceeding for injunctive or other equitable relief). To the extent that the
foregoing undertaking by the Company may be unenforceable for any reason, the Company shall make the maximum contribution to the
payment and satisfaction of each of the Indemnified Liabilities which is permissible under applicable law. Except as otherwise
set forth herein, the mechanics and procedures with respect to the rights and obligations under this Section 9(k) shall be
the same as those set forth in Section 6 of the Registration Rights Agreement.


 


(l) 
Construction. The language used in this Agreement will be deemed to be the language
chosen by the parties to express their mutual intent, and no rules of strict construction will be applied against any party. No
specific representation or warranty shall limit the generality or applicability of a more general representation or warranty. Each
and every reference to share prices, shares of Common Stock and any other numbers in this Agreement that relate to the Common Stock
shall be automatically adjusted for any stock splits, stock dividends, stock combinations, recapitalizations or other similar transactions
that occur with respect to the Common Stock after the date of this Agreement. Notwithstanding anything in this Agreement to the
contrary, for the avoidance of doubt, nothing contained herein shall constitute a representation or warranty against, or a prohibition
of, any actions with respect to the borrowing of, arrangement to borrow, identification of the availability of, and/or securing
of, securities of the Company in order for such Buyer (or its broker or other financial representative) to effect short sales or
similar transactions in the future.


 






    22


     


    

 


(m) 
Remedies. Each Buyer and in the event of assignment by Buyer of its rights and obligations
hereunder, each holder of Securities, shall have all rights and remedies set forth in the Transaction Documents and all rights
and remedies which such holders have been granted at any time under any other agreement or contract and all of the rights which
such holders have under any law. Any Person having any rights under any provision of this Agreement shall be entitled to enforce
such rights specifically (without posting a bond or other security), to recover damages by reason of any breach of any provision
of this Agreement and to exercise all other rights granted by law. Furthermore, the Company recognizes that in the event that it
or any Subsidiary fails to perform, observe, or discharge any or all of its or such Subsidiary’s (as the case may be) obligations
under the Transaction Documents, any remedy at law would be inadequate relief to the Buyers. The Company therefore agrees that
the Buyers shall be entitled to specific performance and/or temporary, preliminary and permanent injunctive or other equitable
relief from any court of competent jurisdiction in any such case without the necessity of proving actual damages and without posting
a bond or other security. The remedies provided in this Agreement and the other Transaction Documents shall be cumulative and in
addition to all other remedies available under this Agreement and the other Transaction Documents, at law or in equity (including
a decree of specific performance and/or other injunctive relief).


 


(n) 
Withdrawal Right. Notwithstanding anything to the contrary contained in (and without
limiting any similar provisions of) the Transaction Documents, whenever any Buyer exercises a right, election, demand or option
under a Transaction Document and the Company or any Subsidiary does not timely perform its related obligations within the periods
therein provided, then such Buyer may rescind or withdraw, in its sole discretion from time to time upon written notice to the
Company or such Subsidiary (as the case may be), any relevant notice, demand or election in whole or in part without prejudice
to its future actions and rights.


 


(o) 
Payment Set Aside; Currency. To the extent that the Company makes a payment or payments
to any Buyer hereunder or pursuant to any of the other Transaction Documents or any of the Buyers enforce or exercise their rights
hereunder or thereunder, and such payment or payments or the proceeds of such enforcement or exercise or any part thereof are subsequently
invalidated, declared to be fraudulent or preferential, set aside, recovered from, disgorged by or are required to be refunded,
repaid or otherwise restored to the Company, a trustee, receiver or any other Person under any law (including, without limitation,
any bankruptcy law, foreign, state or federal law, common law or equitable cause of action), then to the extent of any such restoration
the obligation or part thereof originally intended to be satisfied shall be revived and continued in full force and effect as if
such payment had not been made or such enforcement or setoff had not occurred. Unless otherwise expressly indicated, all dollar
amounts referred to in this Agreement and the other Transaction Documents are in United States Dollars (“U.S. Dollars”),
and all amounts owing under this Agreement and all other Transaction Documents shall be paid in U.S. Dollars. All amounts denominated
in other currencies (if any) shall be converted into the U.S. Dollar equivalent amount in accordance with the Exchange Rate on
the date of calculation. “Exchange Rate” means, in relation to any amount of currency to be converted into U.S.
Dollars pursuant to this Agreement, the U.S. Dollar exchange rate as published in the Wall Street Journal on the relevant date
of calculation.


 


(p) 
Judgment Currency.


 


(i) 
If for the purpose of obtaining or enforcing judgment against the Company in connection with this Agreement or any other
Transaction Document in any court in any jurisdiction it becomes necessary to convert into any other currency (such other currency
being hereinafter in this Section 9(p) referred to as the “Judgment Currency”) an amount due in U.S. Dollars
under this Agreement, the Warrant shall be made at the Exchange Rate prevailing on the Trading Day immediately preceding:


 


(1) 
the date actual payment of the amount due, in the case of any proceeding in the courts of New York or in the courts of any
other jurisdiction that will give effect to such Warrant being made on such date; or


 


(2) 
the date on which the foreign court determines, in the case of any proceeding in the courts of any other jurisdiction (the
date as of which such Warrant is made pursuant to this Section 9(p)(i)(2) being hereinafter referred to as the “Judgment
Warrant Date”).


 


(ii) 
If in the case of any proceeding in the court of any jurisdiction referred to in Section 9(p)(i)(2) above, there is
a change in the Exchange Rate prevailing between the Judgment Warrant Date and the date of actual payment of the amount due, the
applicable party shall pay such adjusted amount as may be necessary to ensure that the amount paid in the Judgment Currency, when
converted at the Exchange Rate prevailing on the date of payment, will produce the amount of U.S. Dollars which could have been
purchased with the amount of Judgment Currency stipulated in the judgment or judicial order at the Exchange Rate prevailing on
the Judgment Warrant Date.


 






    23


     


    

 


(iii) 
Any amount due from the Company under this provision shall be due as a separate debt and shall not be affected by judgment
being obtained for any other amounts due under or in respect of this Agreement or any other Transaction Document.


 


(q) 
Independent Nature of Buyers’ Obligations and Rights. The obligations of each
Buyer under the Transaction Documents are several and not joint with the obligations of any other Buyer, and no Buyer shall be
responsible in any way for the performance of the obligations of any other Buyer under any Transaction Document. Nothing contained
herein or in any other Transaction Document, and no action taken by any Buyer pursuant hereto or thereto, shall be deemed to constitute
the Buyers as, and the Company acknowledges that the Buyers do not so constitute, a partnership, an association, a joint venture
or any other kind of group or entity, or create a presumption that the Buyers are in any way acting in concert or as a group or
entity, and the Company shall not assert any such claim with respect to such obligations or the transactions contemplated by the
Transaction Documents or any matters, and the Company acknowledges that the Buyers are not acting in concert or as a group, and
the Company shall not assert any such claim, with respect to such obligations or the transactions contemplated by the Transaction
Documents. The decision of each Buyer to purchase Securities pursuant to the Transaction Documents has been made by such Buyer
independently of any other Buyer. Each Buyer acknowledges that no other Buyer has acted as agent for such Buyer in connection with
such Buyer making its investment hereunder and that no other Buyer will be acting as agent of such Buyer in connection with monitoring
such Buyer’s investment in the Securities or enforcing its rights under the Transaction Documents. The Company and each Buyer
confirms that each Buyer has independently participated with the Company and its Subsidiaries in the negotiation of the transaction
contemplated hereby with the advice of its own counsel and advisors. Each Buyer shall be entitled to independently protect and
enforce its rights, including, without limitation, the rights arising out of this Agreement or out of any other Transaction Documents,
and it shall not be necessary for any other Buyer to be joined as an additional party in any proceeding for such purpose. The use
of a single agreement to effectuate the purchase and sale of the Securities contemplated hereby was solely in the control of the
Company, not the action or decision of any Buyer, and was done solely for the convenience of the Company and its Subsidiaries and
not because it was required or requested to do so by any Buyer. It is expressly understood and agreed that each provision contained
in this Agreement and in each other Transaction Document is between the Company, each Subsidiary and a Buyer, solely, and not between
the Company, its Subsidiaries and the Buyers collectively and not between and among the Buyers. Notwithstanding anything herein
to the contrary, the parties hereto acknowledge and agree that, as of the Closing Date, CVI Investments, Inc. is the only Buyer
of Warrants hereunder.


 


[signature pages follow]


 




    24


     


    

 


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


 


	 	COMPANY:
	 	 
	 	PACIFIC ETHANOL, INC.
	 	 	 
	 	By:	/s/ Bryon T. McGregor
	 	 	Name: Bryon T. McGregor
	 	 	Title: CFO



  




    


     


    

 


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


 


	 	BUYER:
	 	 
	 	CVI Investments, Inc.



 


	 	By:	Heights Capital Management, Inc., its authorized agent



 


	 	By:	/s/ Martin Kobinger
	 	 	Name: Martin Kobinger
	 	 	Title: Investment Manager



 




    


     


    

 


SCHEDULE
OF BUYERS


 


	(1)	 	(2)	 	 	(3)	 	 	 	(4)	 
	Buyer	 	Address and Facsimile Number	 	 	Warrants	 	 	 	
        Purchase Price
	 
	 	 	 	 	 	 	 	 	 	 	 
	CVI Investments, Inc.	 	c/o Heights Capital Management 

101 California Street

Suite 3250 

San Francisco, CA 94111 

Attention: Martin Kobinger,

Investment Manager

Facsimile: 415-403-6525

E-Mail: martin.kobinger@sig.com	 	 	8,900,493	 	 	$	57,849	 



  






    


     


    

 


EXHIBIT A


 


Form of Warrant


 


[attached hereto]


 


 




    


     


    

 


EXHIBIT B


 


Registration Rights Agreement


 


[attached hereto]