Document:

Exhibit 10.3

 

 

 

 

 

 

Dated
the 18th day of December 2019

 

 

 

YING
HUIHAO

 

(as
Vendor)

 

and

 

 

 

EC
ADVERTISING LIMITED

 

(as
Purchaser)

 

 

 

 

 

SALE
AND PURCHASE AGREEMENT

in respect of 100% of the issued share capital

of

G-COIN
WORLDWIDE LIMITED

(as
Company)

 

 

 

 

 

 

 

 

 

 

 

     

     

    

 

TABLE
OF CONTENTS

 

	Clause	 	Headings	 	Page
	 	 	 	 	 
	1.	 	DEFINITIONS AND INTERPRETATION	 	1
	2.	 	SALE AND PURCHASE OF SALE SHARES	 	4
	3.	 	CONSIDERATION	 	4
	4.	 	CONDITIONS PRECEDENT	 	4
	5.	 	COMPLETION	 	5
	6.	 	REPRESENTATIONS AND WARRANTIES	 	7
	7.	 	VENDOR’S GUARANTEE
    AND UNDERTAKING	 	
	8.	 	CALL OPTION	 	
	9.	 	FURTHER ASSURANCE	 	9
	10.	 	RESTRICTIONS ON COMMUNICATION AND ANNOUNCEMENTS	 	9
	11.	 	PARTIAL INVALIDITY	 	9
	12.	 	COSTS AND EXPENSES	 	9
	13.	 	ASSIGNMENT	 	10
	14.	 	CONTINUING EFFECT OF AGREEMENT	 	10
	15.	 	GENERAL	 	10
	16.	 	NOTICES	 	10
	17.	 	COUNTERPARTS	 	12
	18.	 	GOVERNING LAW	 	12
	 	 	 	 	 
	SCHEDULE 1 PARTICULARS OF THE COMPANY	 	14
	SCHEDULE 2 VENDOR WARRANTIES	 	15
	SCHEDULE 3 PURCHASER WARRANTIES	 	25
	 	 	 
	APPENDIX 1	 	27

 

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THIS
AGREEMENT is made on the 18th day of December 2019

 

BETWEEN

 

		(1)	YING
HUIHAO, a holder of China passport number EG8278766 whose residential address is no.701, Unit 4 , Building 1, no.21 Xinfu Road
, Xinfu District , Fushun, Liaoning , China (the “Vendor”);

 

AND

 

		(2)	EC
                                         Advertising Limited, a company incorporated with limited liability in Hong Kong whose
                                         registered office is situated at Room 1A, 14/F, Chun Wo Commercial Centre, 23-29 Wing
                                         Wo Street, Central, Hong Kong (the “Purchaser”).

 

WHEREAS:

 

		(A)	As
at the date of this Agreement, the Company (particulars of which are set out in Schedule has owned a vessel with Certificate of
Ownership Number 29996, with value at HK$5,000,000. The Company is wholly owned by the Vendor.

 

		(B)	As
at the date of this Agreement, the Company (particulars of which are set out in Schedule has owned a vessel with Certificate of
Ownership Number 38206, with value at HK$2,000,000. The Company is wholly owned by the Vendor.

 

		(C)	As
at the date of this Agreement, the Purchaser is a wholly owned subsidiary of SEII (as hereinafter defined).

 

		(D)	The
Vendor has agreed to sell, and the Purchaser has agreed to purchase, the Sale Shares (as hereinafter defined) upon the terms and
conditions set out in this Agreement.

 

		(E)	Upon
Completion, the Company will be owned as to 100% by the Purchaser, with the two vessels in (A) and (B) continue to be owned by
the Company.

 

NOW
IT IS HEREBY AGREED as follows:

 

		1.	DEFINITIONS
AND INTERPRETATION

 

		1.1.	In
this Agreement (including the Recitals and the Schedules), the following expressions shall, unless the context otherwise requires,
have the following meanings:

 

	“Agreement”	this sale and purchase agreement
    (including its Recitals and Schedules), as may be amended or supplemented from time to time;
	 	 
	“business day”	a day (other than Saturday) on which banks are
    open in Hong Kong for general banking business;

 

    1

     

    

 

	“Company”	G-COIN WORLDWIDE LIMITED,
    a company incorporated in Hong Kong with limited liability, particulars of which are set out in SCHEDULE 1;
	 	 
	“Completion”	completion of the sale and purchase of the Sale
    Shares pursuant to Clause 5;
	 	 
	“Completion Date”	thirty business days following the date on which
    all the Conditions Precedent are fulfilled or waived (as the case may be);
	 	 
	“Conditions Precedent”	the conditions precedent set out in Clause 4;
	 	 
	“Consideration” 	has the meaning ascribed to it in Clause 3.1;
	 	 
	“Consideration Share(s)”	3,425,328 SEII Common Shares to be allotted
    and issued by SEII pursuant to Clause 3.1;
	 	 
	“Employment Agreements”	the employment contracts to be entered into
    between the Company and each of the Key Management in the form and substance reasonably satisfied by the Purchaser in substantially
    the same form as set out in Appendix 1;
	 	 
	“Encumbrance”	any option, right to acquire, right of pre-emption,
    mortgage, charge, pledge, lien, hypothecation, title retention, right of set off, counterclaim, trust arrangement or other
    security or any equity or restriction;
	 	 
	“HK$”	Hong Kong dollars, the lawful currency of Hong
    Kong;
	 	 
	“Hong Kong” 	the Hong Kong Special Administrative Region
    of the People’s Republic of China;
	 	 
	“Inland Revenue Ordinance” 	Inland Revenue Ordinance (Chapter 112 of the
    Laws of Hong Kong);
	 	 
	“Issue Price” 	being US$ 0.262 per SEII Share;
	 	 
	“Long Stop Date”	31st December, 2019 or such later
    date as may be agreed between the Vendor and the Purchaser;
	 	 
	“OTC”
    	OTC Markets, the
    stock market in the USA;
	 	 
	“Parties”	parties to this
    Agreement and a “Party” means any one of them;

 

    2

     

    

 

	“Purchaser
    Warranties”	the
    representations, warranties and undertakings made by the Purchaser and contained in Clause 6 and SCHEDULE 2;
	 	 
	“Sale
    Shares”	1
    shares in the share capital of the Company, being 100% of its entire issued share capital as at the date of this Agreement;
	 	 
	“SEII”	SHARING
    ECONOMY INTERNATIONAL INC., a company incorporated with limited liability in Nevada, the United States and whose shares are
    listed and traded on OTC Markets (Stock Code: SEII);
	 	 
	“SEII
    Preferred Shares”	preferred
    shares of SEII;
	 	 
	“SEII
    Share(s)”	shares
    of common stock of SEII, par value US$0.001 per share (or of such other securities as shall result from a subdivision, consolidation,
    reclassification or re-construction of such shares from time to time);
	 	 
	“Stamp
    Duty Ordinance”	Stamp
    Duty Ordinance (Chapter 117 of the Laws of Hong Kong);
	 	 
	“Taxation”	all
    forms of tax, rate, levy, duty, charge, impost, fee, deduction or withholding of any nature now or hereafter imposed, levied,
    collected, withheld or assessed by any taxing or other authority in any part of the world and includes any interest, additional
    tax, penalty or other charge payable or claimed in respect thereof;
	 	 
	“USA”	the
    United States of America;
	 	 
	“US$”	United
    States dollars, the lawful currency of the USA;
	 	 
	“Vendor
    Warranties”	the
    representations, warranties and undertakings made by the Vendor and contained in Clause 6 and SCHEDULE 2;
	 	 
	“Warranties”	the
    Vendor Warranties and the Purchaser Warranties; and
	 	 
	“%”	per
    cent.

 

		1.2.	In
this Agreement:

 

		(a)	references
to costs, charges, remuneration or expenses shall include any value added tax, turnover tax or similar tax charged in respect
thereof;

 

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		(b)	references
to any action, remedy or method of judicial proceedings for the enforcement of rights of creditors shall include, in respect of
any jurisdiction other than Hong Kong, references to such action, remedy or method of judicial proceedings for the enforcement
of rights of creditors available or appropriate in such jurisdiction as shall most nearly approximate thereto;

 

		(c)	words
denoting the singular number only shall include the plural number also and vice versa;

 

		(d)	words
denoting one gender only shall include the other genders and the neuter and vice versa;

 

		(e)	words
denoting persons only shall include firms and corporations and vice versa;

 

		(f)	references
to any provision of any statute shall be deemed also to refer to any modification or re-enactment thereof or any instrument, order
or regulation made thereunder or under such modification or re-enactment; and

 

		(g)	references
to any document in the agreed form is to such document which has been initialed by the parties for identification.

 

		1.3.	Headings
shall be ignored in construing this Agreement.

 

		1.4.	The
Recital and the Schedules are part of this Agreement and shall have effect accordingly.

 

		2.	SALE
AND PURCHASE OF SALE SHARES

 

Subject
to the terms and conditions of this Agreement, the Vendor, as the legal and beneficial owner, shall sell the Sale Shares to the
Purchaser and the Purchaser shall purchase the same from the Vendor free from all Encumbrances and third party rights of any kind
and together with all rights now or hereafter attaching thereto including the right to receive all dividends and distributions
declared, made or paid on or after the Completion Date.

 

		3.	CONSIDERATION

 

		3.1.	The
consideration of the Sale Shares to be paid by the Purchaser to the Vendor at Completion is HK$7,000,000.00 (the “Consideration”),
which shall be satisfied by the allotment and issue of the Consideration Shares by SEII at the Issue Price.

 

		3.2.	The
Purchaser shall procure SEII to allot and issue the Consideration Shares to the Vendor (or his nominee) on the Completion Date.

 

		4.	CONDITIONS
PRECEDENT

 

		4.1.	Completion
shall be conditional upon the fulfillment of the following Conditions Precedent:

 

		(a)	the
Purchaser having conducted due diligence exercise (legal and financial) on the Company and satisfied with the results thereof;

 

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		(b)	all
Vendor Warranties being true, accurate and not misleading at all material aspects at all times between the date hereof and the
Completion Date (as though they had been made on such dates by reference to the facts and circumstances then subsisting);

 

		(c)	there
having been no material adverse change, or any development likely to involve a prospective material adverse change in the condition
(financial or operational or otherwise) or in the earnings, business affairs or business prospects, assets or liabilities of the
Company, whether or not arising in the ordinary course of business since the date of this Agreement;

 

		(d)	OTC
Markets having granted the approval for the listing of, and the permission to deal in, the Consideration Shares, if required under
OTC Markets continued listing rules and regulations; and

 

		(e)	all
necessary consents, approvals (including shareholders’ approval), permits and/or authorisations in respect of the transactions
contemplated under this Agreement having been obtained.

 

		4.2.	All
Conditions Precedent may be waived by the Parties by written consent.

 

		4.3.	Each
Party undertakes to the other Party to use its best endeavours to ensure that the Conditions Precedent in Clause 4.1 are fulfilled
as early as practicable and in any event not later than the Long Stop Date.

 

		4.4.	Each
Party undertakes to provide all reasonable assistance to the other Party to fulfill the Conditions Precedent in Clause 4.1 in
accordance with Clause 4.3.

 

		4.5.	If
the Conditions Precedent have not been fulfilled or waived (as the case may be) on or before the Long Stop Date, this Agreement
will lapse and become null and void and the Parties will be released from all obligations hereunder, save for liabilities for
any antecedent breaches hereof.

 

		5.	COMPLETION

 

		5.1.	At
Completion, the Vendor shall:

 

		(a)	deliver
or cause to be delivered to the Purchaser:

 

		(i)	evidence
reasonably satisfactory to the Purchaser that the Conditions Precedent in Clause 4.1 (which are applicable to the Vendor) of this
Agreement have been fulfilled;

 

		(ii)	instrument
of transfer and the bought and sold notes of the Sale Shares duly executed by the Vendor as registered holder thereof in favour
of the Purchaser together with the related share certificate(s);

 

		(iii)	Employment
Agreements duly executed by each of the Key Management and the Company;

 

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		(iv)	(1)	all
                                     statutory records and minute books (which shall be duly written up to date as at Completion)
                                     and accounting records including an original copy of the memorandum and articles of association
                                     or other equivalent constitutional documents, certificate of incorporation and business registration
                                     certificates, business licence, governmental approval letters and certificates (if any),
                                     common seal, authorised chops, share certificate books and other statutory records of the
                                     Company;

 

		(2)	all
tax returns and assessments of the Company (if applicable) (receipted where the due dates for payment fell on or before the Completion
Date);

 

		(3)	copies
of all correspondence, if any, with its lawyers, accountants, tax or revenue departments, all other documents and correspondence,
if any, relating to the business affairs of the Company; and

 

		(4)	all
title deeds, evidence of ownership and documents relating to assets owned by the Company (if any);

 

provided
that the above shall be deemed to have been delivered if they are located at the registered office or principal place of business
of the Company;

 

		(v)	a
cheque made payable to “the Government of the HKSAR” for such amount representing the share of Hong Kong stamp duty
which shall be borne by the Vendor as transferor of the Sale Shares in accordance with the Stamp Duty Ordinance;

 

		(vi)	evidence
reasonably satisfactory to the Purchaser showing that all loans or amounts due by the Company to its shareholders, directors or
any other third party creditors have been fully waived or settled;

 

		(vii)	such
other documents as may be reasonably required to give good title to the Sale Shares free from all Encumbrances and third party
rights of any kind and to enable the Purchaser to become the registered holder thereof; and

 

		(viii)	a
certified true copy of the resolutions of the board of directors of the Company approving the matters set out in Clause 5.2(b);

 

		(b)	procure
that the following businesses be approved at a meeting of the directors of the Company:

 

		(i)	the
directors of the Company shall approve the transfer of the Sale Shares and the Purchaser and/or its nominee shall be duly registered
as the holder of the Sale Shares in the register of members of the Company, subject to the articles of association of the Company;

 

		(ii)	the
directors of the Company shall resolve that the share certificate in respect of the Sale Shares be duly issued and delivered to
the Purchaser and/or its nominee, subject to the articles of association of the Company;

 

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		(iii)	the
directors of the Company shall approve any of its directors to do all such acts and things and to sign any documents reasonably
required to give effect to the transaction as contemplated under this Agreement.

 

		5.2.	At
Completion, against compliance with the provisions of Clause 5.2, the Purchaser shall deliver or cause to be delivered the following
documents to the Vendor:

 

		(i)	a
certified copy of the resolutions passed by the board of directors of the Purchaser approving the execution and performance of
this Agreement;

 

		(ii)	evidence
reasonably satisfactory to the Vendor that the Conditions Precedent in Clause 4.1 (which are applicable to the Purchaser) of this
Agreement have been fulfilled;

 

		(iii)	instrument
of transfer and the bought and sold notes of the Sale Shares duly executed by the Purchaser;

 

		(iv)	a
copy of the board resolutions and, if required, the resolutions of an extraordinary general meeting of SEII approving the allotment
and issue of the Consideration Shares;

 

		(v)	a
cheque made payable to “the Government of the HKSAR” for such amount representing the Hong Kong stamp duty which shall
be borne by the Purchaser as transferee of the Sale Shares in accordance with the Stamp Duty Ordinance; and

 

		(vi)	documents
as may be reasonably required to give good title to the Consideration Shares free from all Encumbrances and third party rights
of any kind and to enable the Vendor to become the registered holders thereof.

 

		6.	REPRESENTATIONS
AND WARRANTIES

 

		6.1.	The
Purchaser hereby represents, warrants and undertakes to the Vendor in the terms set out in this Clause 6 and SCHEDULE 3.

 

		6.2.	The
Vendor hereby represent, warrant and undertake to the Purchaser in the terms set out in this Clause 6 and SCHEDULE 2.

 

		6.3.	The
Purchaser shall be deemed to have repeated all the Purchaser Warranties on the basis that such Purchaser Warranties will at all
times from the date of this Agreement up to and including the Completion Date be true, complete and accurate in all respects and
such Purchaser Warranties shall have effect as if given at Completion as well as the date of this Agreement.

 

		6.4.	The
Vendor shall be deemed to have repeated all the Vendor Warranties on the basis that such Vendor Warranties will at all times from
the date of this Agreement up to and including the Completion Date be true, complete and accurate in all respects and such Vendor
Warranties shall have effect as if given at Completion as well as the date of this Agreement.

 

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		6.5.	The
Vendor agrees and acknowledges that the Purchaser is entering into this Agreement in reliance on the Vendor Warranties.

 

		6.6.	The
Purchaser agrees and acknowledges that the Vendor is entering into this Agreement in reliance on the Purchaser Warranties.

 

		6.7.	None
of the Warranties shall be limited or restricted by reference to or inference from the terms of any other Warranties or any other
terms of this Agreement.

 

		6.8.	If
any Party fails to perform any of its obligations in any material respect (including its obligation at Completion) under this
Agreement or breaches any of the terms or Warranties set out in this Agreement in any material respect prior to Completion, then
without prejudice to all and any other rights and remedies available at any time to a non-defaulting Party (including but not
limited to the right to damages for any loss suffered by that Party), any non-defaulting Party may by notice either require the
defaulting Party to perform such obligations or, insofar as the same is practicable, remedy such breach or to the extent it relates
to the failure of the defaulting Party to perform any of its obligations on or prior to Completion in any material respect, treat
the defaulting Party as having repudiated this Agreement and rescind the same. The rights conferred upon the respective Parties
by the provisions of this Clause 6 are additional to and do not prejudice any other rights the respective Parties may have. Failure
to exercise any of the rights herein conferred shall not constitute a waiver of any such rights.

 

		6.9.	The
Vendor will not be liable under any of the Vendor Warranties unless a written notice of a claim has been received by the Vendor
not later than the expiry of a period of eighteen (18) months following the Completion Date and legal proceedings for such claim
have been commenced against and served on the Vendor within six (6) months of the giving of such written notice.

 

		6.10.	The
total liability of the Vendor in respect of all claims brought by the Purchaser under this Agreement and/or any ancillary agreements
executed pursuant thereto (including the Warranties) shall not exceed the amount of the Consideration.

 

		6.11.	The
Vendor shall not be liable for any claim to the extent that such liability arises as a result of any legislation coming into force
or effect after the Completion Date with retrospective effect.

 

		6.12.	The
Vendor shall not be liable for any claim to the extent that such liability arises as a result of any change in the accounting
policy after the Completion Date which is applicable to the Company.

 

		6.13.	The
Vendor will not be liable for any claim or breach of any of the Vendor Warranties to the extent that such liability arises as
a direct result of:

 

		(a)	any
act done before the date of Completion by the Vendor or the Company at the written request of the Purchaser and is done in a manner
in compliance with the written instructions of the Purchaser; or

 

		(b)	any
act done or omitted to be done after the date of Completion by the Purchaser or the Company save for such acts which are contemplated
in or are to be done to give effect to comply with this Agreement and any other documents or such acts which are necessary to
be conducted in the business operation of the Company.

 

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		7.	FURTHER
ASSURANCE

 

Each
Party undertakes to the other Party to execute or procure to be executed all such documents and to do or procure to be done all
such other acts and things as may be reasonable and necessary to give all Parties the full benefit of this Agreement.

 

		8.	RESTRICTIONS
ON COMMUNICATION AND ANNOUNCEMENTS

 

		8.1.	Each
of the Parties undertakes to the other Party that it shall not at any time after the date of this Agreement divulge or communicate
to any person other than to its professional advisers, or when required by law or any rule of any relevant stock exchange body,
or to its respective officers or employees whose province it is to know the same any confidential information concerning the business,
accounts, finance or contractual arrangements or other dealings, transactions or affairs of the other which may be within or may
come to its knowledge in connection with the transactions contemplated by this Agreement and it shall use its best endeavours
to prevent the publication or disclosure of any such confidential information concerning such matters. This restriction shall
not apply to information or knowledge which is or which properly comes into the public domain, through no fault of any of the
Parties or to information or knowledge which is already known to any of the Parties at the time of its receipt.

 

		8.2.	Each
of the Parties undertakes that he/it shall not at any time (save as required by law or any rule of any relevant stock exchange
or regulatory body) make any announcement in connection with this Agreement unless the other Party shall have given its consent
to such announcement (which consent may not be unreasonably withheld or delayed and may be given either generally or in a specific
case or cases and may be subject to conditions). If any Party is required by law or any rule of any relevant stock exchange or
regulatory body to make any announcement in connection with this Agreement, the other Party agrees to supply all relevant information
relating to itself that is within its knowledge or in its possession as may be reasonably necessary or as may be required by any
exchange and regulatory body to be included in the announcement.

 

		9.	PARTIAL
INVALIDITY

 

If,
at any time, any provision of this Agreement is or becomes illegal, invalid or unenforceable in any respect in any jurisdiction,
the legality, validity and enforceability in other jurisdictions or of the remaining provisions of this Agreement shall not be
affected or impaired thereby.

 

		10.	COSTS
AND EXPENSES

 

Each
Party shall bear his/its own costs of and incidental to the preparation, negotiation and settlement of this Agreement and the
transactions contemplated hereunder (including, without limitation, legal fees and expenses, and capital fees or stamp duty (if
any) relating to this Agreement), provided that if the Vendor exercises the Call Option, the Vendor shall bear and pay all the
stamp duty arising from or as a result of the transactions contemplated under the Call Option.

 

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		11.	ASSIGNMENT

 

No
Party shall assign any of its rights or obligations under this Agreement without the written consent of the other Party.

 

		12.	CONTINUING
EFFECT OF AGREEMENT

 

Any
provision of this Agreement which is capable of being performed after Completion but which has not been performed at or before
Completion shall remain in full force and effect notwithstanding Completion.

 

		13.	GENERAL

 

		13.1.	This
Agreement supersedes all and any previous agreements, arrangements or understanding between the Parties relating to the matters
referred to in this Agreement and all such previous agreements, understanding or arrangements (if any) shall cease and determine
with effect from the date hereof and neither Party shall have any claim in connection therewith.

 

		13.2.	This
Agreement constitutes the entire agreement between the Parties with respect to its subject matter (no Party having relied on any
representation or warranty made by the other Party which is not contained in this Agreement). No variation of this Agreement
shall be effective unless made in writing and signed by all Parties.

 

		13.3.	Time
shall be of the essence of this Agreement but no failure by any Party to exercise, and no delay on its part in exercising any
right hereunder shall operate as a waiver thereof, nor shall any single or partial exercise of any right under this Agreement
preclude any other or further exercise of it or the exercise of any right or prejudice or affect any right against the other.
The rights and remedies provided in this Agreement are cumulative and not exclusive of any rights or remedies provided by law.

 

		13.4.	No
delay or failure by a Party to exercise or enforce (in whole or in part) any right provided by this Agreement or by law shall
operate as a release or waiver, or in any way limit that Party’s ability to further exercise or enforce that, or any other, right.
A waiver of any breach of any provision of this Agreement shall not be effective, or implied, unless that waiver is in writing
and is signed by the Party against whom that waiver is claimed. In the event of a default by either Party in the performance of
its obligations under this Agreement, the non-defaulting Party shall have the right to obtain specific performance of the defaulting
Party’s obligations. Such remedy shall be in addition to any other remedies provided under this Agreement or at law.

 

		13.5.	Except
as expressly provided in this Agreement, a person who is not a Party to this Agreement has no right under the Contracts (Rights
of Third Parties) Ordinance (Cap 623) to enforce any term of this Agreement but this does not affect any right or remedy of a
third party which exists or is available apart from that Ordinance.

 

		14.	NOTICES

 

		14.1.	Any
notice claim, demand, court process, document or other communication to be given under this Agreement (collectively “communication”
in this Clause) shall be in writing in the English or Chinese language and may be served or given personally or sent to the
e-mail address (if any) of the relevant Party and marked for the attention and/or copied to such other person as specified in
Clause 16.4.

 

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		14.2.	A
change of address or e-mail address of the person to whom a communication is to be addressed or copied pursuant to this Agreement
shall not be effective until five days after a written notice of change has been served in accordance with the provisions of this
Clause 16 on the other Party with specific reference in such notice that such change is for the purposes of this Agreement.

 

		14.3.	All
communications shall be served by the following means and the addressee of a communication shall be deemed to have received the
same within the time stated adjacent to the relevant means of despatch:

 

	 	Means
    of despatch	 	Time
    of deemed receipt
	 	Local mail or courier	 	24 hours
	 	E-mail	 	12 hours
	 	Air courier/Speedpost	 	3 days 
	 	Airmail	 	7 days

 

		14.4.	The
initial addresses and e-mail addresses of the Parties for the service of communications, the person for whose attention such communications
are to be marked and the person to whom a communication is to be copied are as follows:

 

If
to the Vendor:

 

	 	Address :	No.701,
    Unit 4, Building     1, no.21 Xinfu Road, Xinfu
	 	 	District,
    Fushun, Liaoning, China
	 	E-mail :	huihaoying@gmail.com
	 	Attention :	YING, Huihao

 

If
to the Purchaser:

 

	 	Address :	Room 1A, 14/F, Chun Wo Commercial
    Centre, 23-29 Wing Wo
	 	 	Street, Central, Hong Kong
	 	E-mail : 	bryan.au@seii.com
	 	Attention :	Bryan Au

 

		14.5.	A
communication served in accordance with this Clause 16 shall be deemed sufficiently served and in proving service and/or receipt
of a communication it shall be sufficient to prove that such communication was left at the addressee’s address or that the envelope
containing such communication was properly addressed and posted or despatched to the addressee’s address. In the case of communication
by e-mail, such communication shall be deemed properly transmitted upon the receipt of the sent confirmation by the e-mail account
of the sender.

 

		14.6.	Nothing
in this Clause shall preclude the service of communication or the proof of such service by any mode permitted by law.

 

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		15.	COUNTERPARTS

 

This Agreement may be executed in any number of counterparts, and this has the same effect as if the execution on the
counterparts were on a single copy of this Agreement.

 

		16.	GOVERNING
LAW

 

		16.1.	This
Agreement shall be governed by and construed in accordance with the laws of Hong Kong.

 

		16.2.	The
courts of Hong Kong have non-exclusive jurisdiction to settle any dispute arising out of or in connection with this Agreement
(including a dispute regarding the existence, validity or termination of this Agreement).

 

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IN WITNESS whereof this Agreement has been duly executed on the date first above written.

 

	VENDOR	 	
	 	 	 
	SIGNED by YING HUIHAO 	)
	in the presence of:	)
	 	 
	 	 	 
	PURCHASER	 	
	 	 	 
	SIGNED by LAM KA MAN 	)
	as authorised representative of 	)
	EC Advertising Limited 	)
	in the presence of:	)

 

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SCHEDULE 1

PARTICULARS
OF THE COMPANY

 

	1.	Company name	:	G-Coin Worldwide Limited
	 	 	 	 
	2.	Company number	:	2052234
	 	 	 	 
	3.	Date of incorporation	:	12-3-2014
	 	 	 	 
	4.	Place of incorporation	:	Hong Kong
	 	 	 	 
	5.	Address of registered office	:	Cornwall Center, No. 85 Castle Peak Road, Tuen
    Mun, N.T., Hong Kong
	 	 	 	 
	6.	Issued share capital	:	HKD 1
	 	 	 	 
	7.	Sole shareholder	:	Ying Huihao
	 	 	 	 
	8.	Directors	:	Ying Huihao

 

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SCHEDULE 2

VENDOR
WARRANTIES

 

		1.	General

 

		1.1.	The
contents of the Recitals of and Schedule 1 this Agreement are true and accurate.

 

		1.2.	All
information given by the Vendor or their agents or professional advisers to the Purchaser or its employees, agents or professional
advisers relating to the business, activities, affairs, or assets or liabilities of the Company was, when given, and is now true,
accurate and complete in all respects.

 

		1.3.	There
are no material facts or circumstances, in relation to the assets, business or financial condition of the Company which have not
been exhaustively, expressly and fairly disclosed in writing to the Purchaser or its employees, agents or professional advisers,
and which, if disclosed, might reasonably have been expected to affect the decision of the Purchaser to enter into this Agreement.

 

		1.4.	The
execution and performance of this Agreement will not conflict with or result in a breach of or be a reason for the termination
or variation of any agreement or obligation to which the Company is now a party or any of the Company or its assets are or may
be bound or affected or be in violation of any law, rule or regulation of any governmental, administrative or regulatory body
or any order, injunction or decree of any judicial, administrative, regulatory or governmental body affecting the Company.

 

		2.	Organisation,
Authority and Power

 

		2.1.	The
Company is a company duly incorporated and validly existing under the laws of Hong Kong. All issued shares in the Company are
duly authorised, validly issued and fully paid up and none of such shares (where applicable) has been issued in violation of the
memorandum and articles of association of the Company or the terms of any agreement by which the Company or its shareholders were
or are bound, if any.

 

		2.2.	The
Vendor has, on the date of this Agreement and on Completion, full and unfettered right, power and authority to enter into this
Agreement and assume all of their obligations hereunder and no further actions or proceedings are necessary on their part in connection
with the execution, delivery and performance by them of this Agreement.

 

		2.3.	This
Agreement constitutes valid and legally binding obligations on the part of the Vendor enforceable in accordance with its terms.

 

		2.4.	The
Vendor is the legal and beneficial owner of the Sale Shares and is entitled to sell and transfer the Sale Shares and pass the
full legal and beneficial ownership thereof with all rights thereto to the Purchaser or its nominee on the terms of this Agreement.
The Sale Shares are issued and fully paid and are beneficially owned by the Vendor free from all Encumbrances. The Sale Shares
constitutes the 60% of the issued share capital of the Company.

 

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		3.	Records
and taxation

 

		3.1.	The
Company has duly made up all requisite minutes books, registers and records in compliance with all applicable laws and regulatory
requirements and these and all other deeds and documents (properly stamped where necessary) belonging to or which ought to be
in its possession and its seal are in its possession.

 

		3.2.	All
the books, ledgers, financial and other records of whatsoever kind, of the Company are in its possession, have been fully, properly
and accurately kept and completed, do not contain any material inaccuracies or discrepancies of any kind and give and reflect
a true and fair view of its trading transactions (if any), and its financial, contractual and trading position.

 

		3.3.	The
Company has duly complied with its obligations to account to the relevant tax authorities and all other authorities for all amounts
for which it is or may become accountable in respect of Taxation relating to its business.

 

		3.4.	All
returns in connection with Taxation that should have been filed by the Company have been filed correctly and on a proper basis
in accordance with all applicable laws and regulatory requirements and there are no facts known or which would on reasonable enquiry
be known to the Company or its directors which may give rise to any dispute or to any claim for any Taxation or the deprivation
of any relief or advantage that might have been available.

 

		3.5.	The
Company is not and does not expect to be involved in any dispute in relation to Taxation and no authority concerned has investigated
or indicated that it intends to investigate into the tax affairs of the Company nor are there any circumstances of which the Vendor
is aware which would cause any authority to investigate into the tax affairs of the Company.

 

		3.6.	The
Company has no liability in respect of Taxation (whether actual or contingent) nor any liability for interest, penalties or charges
imposed in relation to any Taxation arising or deemed to arise in any accounting period ending on or before the date of this Agreement.

 

		3.7.	Since
incorporation of the Company and inclusive of the Completion Date:

 

		(i)	the
Company has not been involved in any transaction outside the ordinary course of business which has given or may give rise to a
liability to Taxation on the Company (or would have given or might give rise to such a liability but for the availability of any
relief, allowance, deduction or credit);

 

		(ii)	no
disposal has taken place or other event occurred which will or may have the effect of crystallising a liability to Taxation;

 

		(iii)	no
payment has been made by the Company which will not be deductible for profits tax (or its equivalent) purposes either in computing
the profits of the Company or in computing the profits tax chargeable on the Company;

 

		(iv)	no
event has occurred with the result that the Company has or will become liable to pay or bear a liability in respect of Taxation
directly or primarily charged against, or attributable to, another person, firm or company; and

 

		(v)	the
Company has not paid or become liable to pay any penalty in connection with any Taxation or otherwise paid any Taxation after
its due date for payment or become liable to pay any Taxation the due date for payment of which has passed or will become prospectively
liable to pay any Taxation the due date for payment of which will fall within 30 days after the date of this Agreement.

 

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		3.8.	The
Company has within the time limits prescribed by the relevant legislation duly paid all tax (including provisional tax), made
all returns, given all notices, supplied all other information required to be supplied to the Inland Revenue Department of Hong
Kong and any other relevant governmental authority (including any governmental authority of a foreign jurisdiction) and all such
information was and remains complete and accurate in all material respects and all such returns and notices were and remain complete
and accurate in all material respects and were made on a proper basis and do not, nor, to the best of the knowledge, information
and belief of the Vendor, having made due and careful enquiry, are likely to, reveal any transactions which may be the subject
of any dispute with the Inland Revenue Department of Hong Kong or other relevant authorities(including any governmental authority
of a foreign jurisdiction) and the Company is not and has not in the last three years been the subject of an Inland Revenue Department
of Hong Kong(or equivalent foreign tax authority) investigation or field audit or other dispute regarding tax or duty recoverable
from the Company or regarding the availability of any relief from Taxation or duty to the Company and there are no facts known
to the Vendor which are likely to cause such an investigation or audit to be instituted or such a dispute to arise.

 

		3.9.	There
are no material and/or unusual arrangements, agreements or undertakings, between the Company and the Inland Revenue Department
of Hong Kong, or any foreign tax authorities, regarding or affecting the Taxation treatment of the Company.

 

		3.10.	The
Company has kept sufficient records in either English or Chinese:

 

		(i)	of
its income and expenditure to enable the assessable profits of its trade, profession or business to be readily ascertained in
compliance with and for the period mentioned in Section 51C of the Inland Revenue Ordinance or other similar legislation;

 

		(ii)	of
the consideration, in money or money’s worth, payable or deemed to be payable to it, to its order or for its benefit in respect
of the right of use of its land or buildings or land and buildings to enable the assessable value of its land or buildings or
land and buildings to be readily ascertained in compliance with and for the period mentioned in Section 57D of the Inland Revenue
Ordinance.

 

		3.11.	The
Company has duly complied with all requirements to deduct or withhold Taxation from any payments it has made and has accounted
in full to the appropriate authorities for all amounts so deducted or withheld.

 

		4.	Corporate
Status

 

		4.1.	The
Company is duly incorporated, validly existing and in good standing under the laws of Hong Kong and has all requisite corporate
power and authority to own its assets and to carry on its business as currently conducted and is duly qualified to do business
and is in good standing as a foreign corporation in each jurisdiction where the ownership or operation of its assets or the conduct
of its business requires such qualification.

 

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		4.2.	No
events or omissions have occurred whereby the constitution, subsistence or corporate status of the Company has been or is likely
to be adversely affected.

 

		4.3.	No
order for the appointment of a liquidator has been made and as receiver has been appointed over the whole or any part of the assets
of the Company.

 

		4.4.	No
order has been made, or petition presented, or resolution passed for the winding up of the Company, nor has any distress, execution
or other process been levied in respect of the Company which remains undischarged; nor is there any unfulfilled or unsatisfied
judgment or court order outstanding against the Company.

 

		4.5.	Save
as contemplated under and this Agreement, as at the Completion Date, there are no pre-emptive or other outstanding rights, options,
warrants, conversion rights or agreements or commitments of any character relating to the authorised and issued, unissued or treasury
shares or equity interest of the Company and the Company has not issued any debt securities, other securities, rights or obligations
which are convertible into or exchangeable for, or giving any person a right to subscribe for or acquire, capital or equity interest
of the Company, and no such securities or obligations evidencing such rights are outstanding.

 

		5.	Business,
                                         etc.

 

		5.1.	The
Company has not given or permitted to be outstanding any powers of attorney or authority (expressed or implied) to any party to
enter into any contracts, commitments or transactions (other than the usual authority conferred on its directors in respect of
the ordinary course of business) or pursuant to the banking facilities granted to the Company.

 

		5.2.	The
Company has not entered into any contracts, commitments or transactions other than on an arms-length basis nor breached or defaulted
under any contracts, commitments or transactions.

 

		5.3.	There
are no existing circumstances which indicate that as a result of the consummation of this Agreement:

 

		(i)	the
existing level of business of the Company may be substantially reduced; and

 

		(ii)	the
Company will lose the benefit of any right or privilege which it enjoys.

 

		5.4.	Compliance with the terms of this Agreement does not and
will not :

 

		(i)	conflict
with, or result in the breach of, or constitute a default under, any of the terms, conditions or provisions of any agreement or
instrument to which the Company is a party, or any provision of the memorandum or articles of association or equivalent constitutive
documents of the Company or any Encumbrance, lease, contract, order, judgment, award, injunction, regulation or other restriction
or obligation of any kind or character by which or to which any asset of the Company is bound or subject;

 

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		(ii)	relieve
any person from any obligation to the Company (whether contractual or otherwise), or enable any person to determine any obligation,
or any right or benefit enjoyed by the Company, or to exercise any right, whether under an agreement with, or otherwise in respect
of, the Company;

 

		(iii)	result
in the creation, imposition, crystallisation or enforcement of any Encumbrances whatsoever on any of the assets of the Company;
or

 

		(iv)	result
in any present or future indebtedness of the Company becoming due, or capable of being declared due and payable, prior to its
stated maturity.

 

		5.5.	The
Company has, at all times, carried on its business and conducted its affairs in all respects in accordance with its memorandum
and articles of association or equivalent constitutive documents for the time being in force and any other documents to which
it is, or has been, a party.

 

		5.6.	The
Company is empowered and duly qualified to carry on business in all jurisdictions in which it now carries on business.

 

		5.7.	The
Company is not a party to any undertaking or assurances given to any court or governmental agency, which is still in force.

 

		5.8.	The
Company has conducted and is conducting its business in all respects in accordance with all applicable laws and regulations, whether
of Hong Kong or elsewhere.

 

		5.9.	The
Company is in possess of all requisite licences, permits and approvals for conducting its businesses and is not in breach of any
of the terms or conditions of any of the licences or consents; the enforcement of this Agreement shall not, and there are no factors
that might, in any way prejudice the continuation, or renewal, of any of them.

 

		5.10.	The
Company is not a party to any contract, transaction, arrangement or liability which:

 

		(i)	is
of an unusual or abnormal nature, which is outside the ordinary and proper course of business; or

 

		(ii)	cannot
readily be fulfilled or performed by it on time without undue, or unusual, expenditure of money, effort or personnel.

 

		5.11.	No
notice, demand or claim of default under any agreement, instrument or arrangement to which the Company is a party has been received
by the Company and is outstanding against it and there is nothing whereby any such agreement, instrument or arrangement may be
prematurely terminated or rescinded by any other party.

 

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		5.12.	The
Vendor is not aware of:

 

		(i)	any
party to any agreement with, or under an obligation to, the Company who is in default under it, being a default which would be
material in the context of the Company’s financial position; and

 

		(ii)	any
circumstances likely to give rise to such a default.

 

		5.13.	Insofar
as the Vendor is aware, the Company has not supplied services or products which are, or were, or will become faulty or defective,
or which do not comply in any material respect with any warranties or representations, expressly or impliedly made by it, or with
all applicable regulations and requirements.

 

		6.	Corporate
Records and Procedures etc.

 

		6.1.	The
copy of the articles of association or the equivalent constitutive documents of the Company delivered to the Purchaser is accurate,
update and complete in all respects.

 

		6.2.	No
alteration has been made to the memorandum or articles of association or the equivalent constitutive documents of the Company
and no resolution of any kind of the shareholders of the Company has been passed (other than resolutions relating to the business
at annual general meetings which was not special business) without disclosure in writing to the Purchaser.

 

		6.3.	The
Company has fully and punctually observed and complied with its obligations under the relevant companies legislations and the
relevant statutes and all returns, particular resolutions and other documents (if any) required to be filed have been properly
and punctually filed.

 

		6.4.	The
register of members of the Company is and will at Completion be correct. There has been no notice of any proceedings to rectify
the register, and there are no circumstances which might lead to any application for rectification of the register, nor will there
be any such circumstances at or before Completion.

 

		7.	Directors

 

Other
than the directors set out in Schedule 1, the Company has no other director.

 

		8.	Dispute,
Claims and Litigation

 

		8.1.	The
Company is not engaged in any litigation or arbitration proceedings, as plaintiff or defendant; there are no proceedings pending
or threatened, either by or against the Company; and no circumstances exist which are likely to give rise to any litigation or
arbitration.

 

		8.2.	There
is no dispute with any revenue, or other official, department or other regulatory authority in Hong Kong or elsewhere, in relation
to the affairs of the Company, and the Company and the Vendor is not aware of any facts which may give rise to any dispute.

 

		8.3.	No
order has been made, or petition presented, or resolution passed for the winding up of the Company; nor has any distress, execution
or other process been levied in respect of the Company which remains undischarged; nor is there any unfulfilled or unsatisfied
judgment or court order outstanding against the Company.

 

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		8.4.	The
Company has conducted its business and dealt with its assets in all material respects in accordance with all applicable legal
and administrative requirements in Hong Kong and any other jurisdiction.

 

		8.5.	The
Company has not committed any criminal act or material breach of contract or statutory duty or any tortious or other unlawful
act.

 

		8.6.	No
unsatisfied judgment is outstanding against the Company.

 

		9.	Liabilities

 

		9.1.	The
Company does not have any material liabilities or financial commitment.

 

		9.2.	All
loans and payables incurred before Completion have been either waived or settled, save for those as agreed between the Vendor
and the Purchaser.

 

		10.	Agents

 

		10.1.	There
are in force no powers of attorney or any special authorities given by the Company other than those given in the ordinary course
of business.

 

		10.2.	Other
than in the ordinary course of business, the Company has not ever entered into an agreement under which any person has been given
representative or agency rights or powers.

 

		11.	Intellectual
Property

 

		11.1.	Each
of the intellectual property rights owned, used or required to be used by the Company (the Intellectual Property Rights) is:

 

		(i)	valid
and enforceable and nothing has been done or omitted to be done by which it may cease to be valid and enforceable;

 

		(ii)	legally
and beneficially owned by, and validly granted to, the Company alone, free from any licence, Encumbrance, restriction on use or
disclosure obligation; and

 

		(iii)	not,
and will not be, the subject of a claim or opposition from a person (including, without limitation, an employee of the Company)
as to title, validity, enforceability, entitlement or otherwise; and

 

		(iv)	validly
licensed to the Company on terms which have been disclosed to the Buyer and which are not terminable as a result of any transaction
contemplated in this Agreement.

 

		11.2.	Nothing
has been done or omitted to be done and no circumstances exist by which a person is or will be able to seek cancellation, rectification
or other modification of a registration of any of the Intellectual Property Rights.

 

		11.3.	The
Company has not granted nor is it obliged to grant a licence, assignment, consent, undertaking, security interest or other right
in respect of any of the Intellectual Property Rights.

 

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		11.4.	There
is not, and never has been, an infringement or unauthorised use of any of the Intellectual Property Rights.

 

		11.5.	The
Company does not use, or operate its business under, a name other than corporate name.

 

		12.	Insurance

 

		12.1.	The
Company has at all material times been and is at the date of this Agreement maintained insurance against each risk normally insured
against by a person operating the types of business operated by the Company.

 

		12.2.	Status
of the Policies

 

		(i)	Each
of the insurance policies in respect of which the Company has an interest (the Policies) is valid and enforceable and is
not void or voidable.

 

		(ii)	The
Company has notdone anything or omitted to do anything which might:

 

		a)	make
any of the Policies void or voidable; or

 

		b)	prejudice
the ability to effect insurance on the same or better terms in the future.

 

		(iii)	No
insurer under any of the Policies has disputed, or given any indication that it intends to dispute, the validity of any of the
Policies on any grounds.

 

		(iv)	There
is nothing which could:

 

		a)	vitiate
any of the Policies; or

 

		b)	prejudice
the ability to effect insurance on the same or better terms in the future.

 

		(v)	None
of the Policies contains any provisions as to change of control or ownership of the insured.

 

		(vi)	No
insurer has ever cancelled or refused to accept or continue any insurance in relation to the Company.

 

		13.	Compliance
with Law

 

		13.1.	The
Company has complied with:

 

		(i)	each
obligation imposed on it by, and each order and award made under, statute, regulation, code of conduct and practice, collective
agreement, custom and practice relevant to the relations between it and its employees or a trade union or the terms of employment
of its employees; and

 

		(ii)	each
recommendation made by any arbitration or mediation body and each award and declaration made by such body.

 

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		13.2.	There
is no investigation or enquiry outstanding (or, to the best of the Core Sellers’ knowledge, anticipated) by any governmental organisation
or statutory body in connection with the Company.

 

		13.3.	There
are no active, pending or threatened court, tribunal or arbitration proceedings in respect of the Vendor.

 

		13.4.	The
Company has maintained adequate insurance including employer’s liability insurance in respect of its existing and former employees.

 

		13.5.	No
employee of the Company requires a work permit.

 

		13.6.	To
the best of the Vendor’s knowledge, no employee/consultant/agent of the Company is subject to any restrictive covenants with any
previous employer/client/principal or any court order in relation to any such covenants.

 

		14.	Acquisition
of the Consideration Shares

 

		14.1.	The
Vendor and the Company understand that the Consideration Shares are “restricted securities” and have not been registered
under the Securities Act of 1933, as amended (the “Securities Act”) or any applicable state securities law and
are acquiring the Consideration Shares as principal for their own account and not with a view to or for distributing or reselling
the Consideration Shares or any part thereof in violation of the Securities Act, have no present intention of distributing
any of such Consideration Shares in violation of the Securities Act and have no direct or indirect arrangement or understandings
with any other persons to distribute or regarding the distribution of such Consideration Shares in violation of the Securities
Act. The Vendor and the Company understand that the Consideration Shares may only be disposed of in compliance with the Securities
Act.

 

		14.2.	Each
of the Vendor and the Company hereby represents that he has satisfied himself as to the full observance of the laws of its jurisdiction
in connection with any invitation to subscribe for the Sale Shares Consideration Shares or the Subscription Consideration Shares
(as the case may be), including (i) the legal requirements within its jurisdiction for the acquisition of the Sale Shares Consideration
Shares or the Subscription Consideration Shares (as the case may be), (ii) any foreign exchange restrictions applicable to such
purchase, (iii) any governmental or other consents that may need to be obtained, and (iv) the income tax and other tax consequences,
if any, that may be relevant to the purchase, holding, redemption, sale, or transfer of the Sale Shares Consideration Shares or
the Subscription Consideration Shares (as the case may be). The Vendor’s or the Company’s beneficial ownership of the Sale Shares
Consideration Shares or the Subscription Consideration Shares (as the case may be)s will not violate any applicable securities
or other laws of the Vendor’s or the Company’s jurisdiction.

 

		14.3.	The
Vendor and the Company, either alone or together with their representatives, have such knowledge, sophistication and experience
in business and financial matters so as to be capable of evaluating the merits and risks of the acquisition of the Consideration
Shares, and have so evaluated the merits and risks. Each of the Vendor and the Company is able to bear the economic risk of the
Sale Shares Consideration Shares or the Subscription Consideration Shares (as the case may be) and, at the present time, is able
to afford a complete loss of the Sale Shares Consideration Shares or the Subscription Consideration Shares (as the case may be)s.

 

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		14.4.	The
Vendor and the Company are not, to each of their knowledge, acquiring the Consideration Shares as a result of any advertisement,
article, notice or other communication regarding the Consideration Shares published in any newspaper, magazine or similar media
or broadcast over television or radio or presented at any seminar or any other general solicitation or general advertisement.

 

		14.5.	The
Vendor and the Company acknowledge that they have had the opportunity to review any and all documents and has been afforded (i)
the opportunity to ask such questions as they have deemed necessary of, and to receive answers from, representatives of SEII concerning
the Consideration Shares; and (ii) access to information about SEII and its financial condition, results of operations, business,
properties, management and prospects sufficient to enable it to evaluate the transaction. The Vendor and the Company acknowledge
and agree that SEII has not provided the Vendor and the Company with any information or advice with respect to the Consideration
Shares nor is such information or advice necessary or desired.

 

		14.6.	Neither
the Vendor nor the Company (including any person acting on their behalf) has engaged, nor will engage, in any directed selling
efforts to a U.S. Person (as defined in the Securities Act) with respect to the Consideration Shares and the Vendor, the Company
and any person acting on their behalf have complied and will comply with the “offering restrictions” requirements of
Regulation S. The transactions contemplated hereby have not been pre-arranged with a buyer located in the United States or with
a U.S. Person, and are not part of a plan or scheme to evade the registration requirements of the Securities Act. Neither the
Vendor nor the Company (including any person acting on their behalf) has undertaken or carried out any activity for the purpose
of, or that could reasonably be expected to have the effect of, conditioning the market in the United States, its territories
or possessions, for any of the Consideration Shares. The Vendor and the Company agree not to cause any advertisement of the Consideration
Shares to be published in any newspaper or periodical or posted in any public place and not to issue any circular relating to
the Consideration Shares, except such advertisements that include the statements required by Regulation S, and only offshore and
not in the U.S. or its territories, and only in compliance with any local applicable securities laws.

 

		14.7.	The
Vendor and the Company understand that the Consideration Shares and any securities issued in respect of or exchange for the Consideration
Shares, may be notated with one or all of the following legends, as applicable:

 

“THIS
SECURITY HAS NOT BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION IN RELIANCE UPON AN EXEMPTION FROM REGISTRATION UNDER
THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT
TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION
NOT SUBJECT TO THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT.”

 

“THESE
SECURITIES ARE BEING OFFERED TO INVESTORS WHO ARE NOT U.S. PERSONS (AS DEFINED IN REGULATION S UNDER THE SECURITIES ACT OF
1933, AS AMENDED (“THE SECURITIES ACT”) AND WITHOUT REGISTRATION WITH THE UNITED STATES SECURITIES AND EXCHANGE
COMMISSION UNDER THE SECURITIES ACT IN RELIANCE UPON REGULATION S PROMULGATED UNDER THE SECURITIES ACT. TRANSFER OF THESE
SECURITIES IS PROHIBITED, EXCEPT IN ACCORDANCE WITH THE PROVISIONS OF REGULATION S PROMULGATED UNDER THE SECURITIES ACT,
PURSUANT TO REGISTRATION UNDER THE SECURITIES ACT, OR PURSUANT TO AVAILABLE EXEMPTION FROM REGISTRATION. HEDGING TRANSACTIONS
MAY NOT BE CONDUCTED UNLESS IN COMPLIANCE WITH THE SECURITIES ACT.”

 

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SCHEDULE 3

PURCHASER
WARRANTIES

 

		1.	The
Purchaser has, on the date of this Agreement and on Completion, full and unfettered right, power and authority to enter into this
Agreement and assume all of its obligations hereunder and no further actions or proceedings are necessary on its part in connection
with the execution, delivery and performance by it of this Agreement.

 

		2.	The
Purchaser is a company duly incorporated and validly existing under the laws of British Virgin Islands.

 

		3.	This
Agreement constitutes valid and legally binding obligations on the part of the Purchaser enforceable in accordance with its terms.

 

		4.	All
information given by the Purchaser or its agents or professional advisers to the Vendor or its employees, agents or professional
advisers was, when given, and is now true, accurate and complete in all respects.

 

		5.	Subject
to the fulfillment of the Conditions Precedent, all necessary consents, authorisations and approvals of and all necessary registrations
and filings with any governmental or regulatory agency or body required in the USA and Hong Kong for or in connection with this
Agreement and the performance of the terms thereof have been obtained or made or will have been obtained or made by Completion.

 

		6.	All
the Consideration Shares and the SEII Shares converted in accordance with the Consideration Notes to be issued and allotted by
SEII to the Vendor will be duly authorised, validly issued, fully paid up, free from all Encumbrances and from all other rights
exercisable by third parties, ranking pari passu with all existing SEII Shares in the share capital of SEII. None of the Consideration
Shares, the Consideration Notes and the SEII Shares converted thereunder will be issued in violation of the memorandum and articles
of association of SEII or the terms of any agreement or laws and regulations by which SEII or its shareholders were or are bound,
if any.

 

 

25Exhibit 10.1

 

Execution Version

 

SENIOR SECURED NOTE
AMENDMENT AGREEMENT

 

THIS SENIOR SECURED
NOTE AMENDMENT AGREEMENT (the “Agreement”), dated as of December 22, 2019, is made by and among Pacific Ethanol,
Inc., a Delaware corporation with headquarters located at 400 Capitol Mall, Suite 2060, Sacramento, CA 95814 (the “Company”),
and the noteholders listed on the signature page hereto (each, a “Noteholder” and collectively, the “Noteholders”).

 

RECITALS

 

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

 

B. The Noteholders
are holders of the Company’s Senior Secured Notes (the “Existing Notes”) that were originally issued by
the Company pursuant to either the Initial Purchase Agreement (as defined below), the Additional Purchase Agreement (as defined
below), or the Senior Secured Note Amendment Agreement No. 1 (as defined below).

 

C. Each Noteholder
is the beneficial owner of the principal amount of Existing Notes set forth opposite such Noteholder’s name under the heading
“Aggregate Principal Amount of Existing Notes” on the Schedule of Noteholders attached hereto as Exhibit A.

 

D. Pursuant to Section 6
of the Existing Notes, all Existing Notes may be amended with the written consent of all holders of Existing Notes.

 

E. The Company and
the Noteholders desire to enter into this Agreement in order to amend and restate in their entirety, as of the date hereof, all
Existing Notes outstanding as of the date hereof (the “Amendment”), with each Existing Note, as so amended and
restated, to be in substantially in the form attached hereto as Exhibit B (the “Amended Notes”).

 

F. As additional consideration
for entering into the Amendment, the Company has agreed with each Noteholder to issue, (i) that aggregate number of shares
of the voting Common Stock, par value $0.001 per share, of the Company (the “Common Stock”), set forth opposite
such Noteholder’s name on Exhibit A hereto under the heading “Shares” (which aggregate amount for all
Noteholders together shall be 5,530,718 Shares (as defined below) and shall collectively be referred to herein as the “Common
Shares”) and (ii) a warrant, in substantially the form attached hereto as Exhibit C (each, a “Warrant”
and collectively, the “Warrants”) to acquire up to that number of additional shares of Common Stock set forth
opposite such Noteholder’s name on Exhibit A hereto under the heading “Warrant Shares” (which aggregate
amount for all Noteholders together shall be 5,500,000 Shares issuable upon exercise of or otherwise pursuant to the Warrants,
and shall collectively be referred to herein as the “Warrant Shares”).

 

     

     

    

 

G. At the Closing (as
defined below), the parties hereto shall execute and deliver a Registration Rights Agreement, in the form attached hereto as Exhibit
D (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.

 

H. The Amended Notes,
Common Shares, the Warrants and the Warrant Shares issued pursuant to this Agreement are collectively are referred to herein as
the “Securities.”

 

NOW, THEREFORE, IN
CONSIDERATION of the mutual covenants contained in this Agreement, and for other good and valuable consideration the receipt and
adequacy of which are hereby acknowledged, the Company and the Noteholders agree as follows:

 

Article
I

DEFINITIONS

 

1.1 Definitions.
In addition to the terms defined elsewhere in this Agreement, the following terms have the meanings indicated:

 

“Additional
Common Shares” has the meaning set forth in Section 4.5.

 

“Additional
Purchase Agreement” means the Note Purchase Agreement, dated as of June 26, 2017, by and among the Company and the “Investors”
(as defined therein) as amended, restated or otherwise modified from time to time.

 

“Affiliate”
means any Person that, directly or indirectly through one or more intermediaries, controls or is controlled by or is under common
control with a Person, as such terms are used in and construed under Rule 144 under the 1933 Act.

 

“Agent”
has the meaning set forth in the Security Agreement.

 

“Aggregate
Value” means $8,296,077.

 

“Board of
Directors” means the Company’s board of directors.

 

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

 

“Buy-In Price” has the
meaning set forth in Section 4.1(d).

 

“Cash Amendment
Fee” means $632,000.

 

“Closing”
means the closing of the of the transactions contemplated by this Agreement pursuant to Section 2.1.

 

“Closing Date”
means the date hereof.

 

“Closing Price”
means, for any date, the closing price per share of the Common Stock for such date (or the nearest preceding date) on the primary
Eligible Market or exchange or quotation system on which the Common Stock is then listed or quoted.

 

    2

     

    

 

“CoBank Debt
Documents” means all loan, security, and guarantee documents entered into among the Company and its Subsidiaries and
CoBank, ACB pursuant to (i) that certain Credit Agreement dated as of September 15, 2017 between Illinois Corn Processing, LLC,
Compeer Financial, PCA, as lender, and CoBank, ACB as cash management provider and agent (the “CoBank ICP Credit Agreement”);
and (ii) that certain Credit Agreement dated as of December 15, 2016 among Pacific Ethanol Pekin, LLC, as the borrower, Compeer
Financial, PCA, as the lender, and CoBank, ACB, as the agent, each such document as further amended, restated or modified in its
entirety and in effect on the date hereof.

 

“Company’s
Counsel” means Troutman Sanders LLP.

 

“Contingent
Obligation” has the meaning set forth in Section 3.1(x).

 

“Convertible Securities”
means any stock or securities (other than Options) convertible into or exercisable or exchangeable for Common Stock.

 

“Credit Agreements”
means, collectively, (i) the Credit Agreement by and among Pacific Aurora, LLC, Pacific Ethanol Aurora West, LLC, Pacific Ethanol
Aurora East, LLC and CoBank, ACB and (ii) the Credit Agreement by and among Pacific Ethanol Pekin, Inc., 1st Farm Credit Services,
PCA and CoBank, ACB.

 

“Disclosure Materials”
has the meaning set forth in Section 3.1(g).

 

“DTC” has the meaning
set forth in Section 4.1(c).

 

“8-K Filing”
has the meaning set forth in Section 4.4.

 

“Eligible
Market” means any of The New York Stock Exchange, The NYSE American, The Nasdaq Global Market, The Nasdaq Global Select
Market or the Principal Market.

 

“Environmental
Laws” has the meaning set forth in Section 3.1(aa).

 

“Excluded
Securities” means the issuance of (a) shares of Common Stock or options to employees, officers or directors of the Company,
or consultants to the Company, in their capacity as such pursuant to any stock or option plan or employment agreement duly adopted
for such purpose, by a majority of the non-employee members of the Board of Directors or a majority of the members of a committee
of non-employee directors established for such purpose, (b) securities upon the exercise or exchange of or conversion of the securities
issued hereunder or pursuant to the Warrants and/or other securities exercisable or exchangeable for or convertible into shares
of Common Stock issued and outstanding on the date of this Agreement, provided that such securities have not been amended since
the date of this Agreement to increase the number of such securities or to decrease the exercise price, exchange price or conversion
price of such securities, and (c) securities issued pursuant to acquisitions or strategic transactions approved by a majority of
the disinterested directors of the Company, provided that any such issuance shall only be to a Person (or to the equity holders
of a Person) which is, itself or through its subsidiaries, an operating company or an owner of an asset in a business synergistic
with the business of the Company and shall provide to the Company additional benefits in addition to the investment of funds, but
shall not include a transaction in which the Company is issuing securities primarily for the purpose of raising capital or to an
entity whose primary business is investing in securities.

 

    3

     

    

 

“Floor Price”
means $1.50.

 

“GAAP”
has the meaning set forth in Section 3.1(g).

 

“Hazardous
Materials” has the meaning set forth in Section 3.1(aa).

 

“Indebtedness”
has the meaning set forth in Section 3.1(x).

 

“Initial Purchase
Agreement” means the Note Purchase Agreement, dated as of December 12, 2016, by and among the Company and each “Investor”
(as defined therein) as amended, restated or otherwise modified from time to time.

 

“Insolvent”
has the meaning set forth in Section 3.1(h).

 

“Intellectual
Property Rights” has the meaning set forth in Section 3.1(q).

 

“Lien”
means any lien, charge, claim, security interest, encumbrance, right of first refusal or other restriction.

 

“Material
Adverse Effect” means (i) a material adverse effect on the results of operations, assets, business or financial condition
of the Company and its Subsidiaries, taken as a whole on a consolidated basis or (ii) materially and adversely impair the Company’s
ability to perform its obligations under any of the Transaction Documents; provided, however, that none of the following
alone shall be deemed, in and of itself, to constitute a Material Adverse Effect: (i) a change in the market price or trading volume
of the Common Stock or (ii) changes in general economic conditions or changes affecting the industry in which the Company operates
generally (as opposed to Company-specific changes) so long as such changes do not have a disproportionate effect on the Company
and its Subsidiaries taken as a whole.

 

“Material
Permits” has the meaning set forth in Section 3.1(s).

 

“Material
Subsidiaries” means all of the Subsidiaries of the Company other than Kinergy Marketing LLC, Pacific Ag. Products, LLC,
Pacific Ethanol Development, LLC, Pacific Ethanol Central, LLC, Pacific Ethanol Pekin, LLC, Pacific Ethanol Canton, LLC, Pacific
Ethanol Aurora West, LLC, Pacific Ethanol Aurora East, LLC, Pacific Aurora, LLC and each of their respective direct and indirect
subsidiaries.

 

“Non-Public
Information” means material, non-public information relating to the Company.

 

“Options”
means any outstanding rights, warrants or options to subscribe for or purchase Common Stock or Convertible Securities.

 

    4

     

    

 

“Payment in
Kind Amendment Fee” means $1,264,000.

 

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

 

“PIK Notes”
means those certain Senior Secured Notes originally issued by the Company pursuant to Senior Secured Note Amendment Agreement No.
1.

 

“Principal
Market” means The NASDAQ Capital Market.

 

“Required
Holders” means the holders of Amended Notes representing at least 66 2/3% of the aggregate principal amount of the Amended
Notes then outstanding (excluding Amended Notes held by the Company or any of its Subsidiaries).

 

“Rule 144”
and “Rule 424” means Rule 144 and Rule 424, respectively, promulgated by the SEC pursuant to
the 1933 Act, as such Rules may be amended from time to time, or any similar rule or regulation hereafter adopted by the SEC having
substantially the same effect as such Rule.

 

“SEC”
means the Securities and Exchange Commission.

 

“SEC Reports”
has the meaning set forth in Section 3.1(g).

 

“Security
Agreement” means, collectively, (i) the Security Agreement dated as of December 15, 2016 by and among the Company, the
holders identified therein and the Agent identified therein, as amended by the First Amendment to Security Agreement dated June
30, 2017 by and among the Company, holders identified therein and the Agent identified therein, and by the Security Agreement Amendment,
and as may be further amended, restated, or otherwise modified from time to time.

 

“Security
Agreement Amendment” means that certain Second Amendment to Security Agreement dated as of the date hereof by and among
the Company, the holders identified therein and the Agent identified therein.

 

“Senior Secured
Note Amendment Agreement No. 1” means the Senior Secured Note Amendment Agreement No. 1, dated as of December 16, 2019,
by and among the Company and each “Noteholder” (as defined therein) as amended, restated or otherwise modified from
time to time.

 

“Share Delivery
Date” has the meaning set forth in Section 4.1(a).

 

“Shares”
means shares of the Company’s Common Stock.

 

“Subsequent
Placement” means the issuance of any shares of Common Stock other than Excluded Securities.

 

“Subsidiary”
means, with respect to any Person, any entity of which securities or other ownership interests having ordinary voting power to
elect a majority of the board of directors or other persons performing similar functions are at any time directly or indirectly
owned by such Person.

 

    5

     

    

 

“Trading Day”
means (a) any day on which the Common Stock is listed or quoted and traded on its primary Trading Market, (b) if the Common Stock
is not then listed or quoted and traded on any Eligible Market, then a day on which trading occurs on The NASDAQ Capital Market
(or any successor thereto), or (c) if trading ceases to occur on The NASDAQ Capital Market (or any successor thereto), any Business
Day.

 

“Trading Market”
means the Principal Market or any other Eligible Market, or any national securities exchange, market or trading or quotation facility
on which the Common Stock is then listed or quoted.

 

“Transaction
Documents” means this Agreement, the schedules and exhibits attached hereto, the Amended Notes, the Warrants, the Registration
Rights Agreement, the Transfer Agent Instructions and the Security Agreement.

 

“Transfer Agent” means
American Stock Transfer & Co, LLC, or any successor transfer agent for the Company.

 

“Transfer Agent Instructions”
means, with respect to the Company, the Irrevocable Transfer Agent Instructions, in the form of Exhibit E, executed
by the Company and delivered to and acknowledged in writing by the Transfer Agent.

 

Article
II

ISSUANCE OF SECURITIES

 

2.1 Closing.
Subject to the terms and conditions set forth in this Agreement, at the Closing, or at such other time after the Closing as noted
below or as may be requested in writing by a Noteholder, the Company shall issue to each Noteholder, and each Noteholder shall,
severally and not jointly, acquire from the Company, (i) an Amended Note in the principal amount set forth opposite such Noteholder’s
name on Exhibit A hereto under the heading “Principal Amount of Amended Note,” (ii) such number of Common Shares
set forth opposite such Noteholder’s name on Exhibit A hereto under the heading “Shares”, and (iii)
a Warrant representing that number of Warrant Shares set forth opposite such Noteholder’s name on Exhibit A hereto
under the heading “Warrant Shares.” The date and time of the Closing shall be 10:00 a.m., New York City time, on the
Closing Date. The Closing shall take place at the offices of the Company’s Counsel. The Company and the Noteholders hereby
agree that effective as of the Closing, all the Existing Notes outstanding as of the Closing shall be amended, restated, exchanged,
replaced and superseded in their entirety by the Amended Notes, and all Existing Notes shall be deemed cancelled in their entirety,
to cease to exist and to be of no further force and effect.

 

    6

     

    

 

2.2 Closing Deliveries.

 

(a) At the
Closing, or at such other time after the Closing as may be requested in writing by a Noteholder or set forth below, the Company
shall deliver or cause to be delivered to each Noteholder the following:

 

(i) a duly
executed Amended Note, free and clear of all restrictive and other legends (except as set forth in the form of Amended Note attached
hereto), issued in the name of such Noteholder (or in the name of its nominee), evidencing the aggregate principal amount of Amended
Note set forth opposite such Noteholder’s name on Exhibit A hereto under the heading “Principal Amount
of Amended Note,” registered in the name of such Noteholder;

 

(ii) the Security
Agreement Amendment, duly executed and delivered by the Company, the holders identified therein, and the Agent identified therein;

 

(iii) certificate
evidencing the formation and good standing of the Company issued by the Secretary of State of the State of Delaware, as of a date
within ten (10) days of the Closing Date;

 

(iv) certificate
evidencing the formation and good standing of each Material Subsidiary issued by the Secretary of State of such Subsidiary’s
state of incorporation or formation, as of a date within ten (10) days of the Closing Date;

 

(v) a certificate
executed by the Secretary of the Company and dated as of the Closing Date, certifying as to (a) the resolutions adopted by the
Board of Directors approving this Agreement, (b) the Certificate of Incorporation of the Company, and (c) the Company’s bylaws,
as amended, each as in effect at the Closing;

 

(vi) a certificate
executed by the Chief Executive Officer of the Company, dated as of the Closing Date, certifying the accuracy of the representation
set forth in Section 3.1 (except as to representations that speak as of a specified date, in which case such representations
shall be true and correct as of such specified date) and the satisfaction of each of the conditions set forth in Section 5.1(a)
(except that such certification shall only be required with respect to the Company and not any Noteholder);

 

(vii) within
five (5) business days of a Noteholder’s request, one or more stock certificates, free and clear of all restrictive and other
legends (except as expressly provided in Section 4.1(b)), evidencing such number of Shares set forth opposite such
Noteholder’s name on Exhibit A hereto under the heading “Shares,” registered in the name of such
Noteholder; such Shares shall, until such Noteholder’s request, be issued in “book entry” form with the Company’s
transfer agent;

 

(viii) a duly
executed Warrant, issued in the name of such Noteholder, pursuant to which such Noteholder shall have the right to acquire such
number of Warrant Shares set forth opposite such Noteholder’s name on Exhibit A hereto under the heading “Warrant
Shares”;

 

    7

     

    

 

(ix) delivery
of executed CoBank Debt Documents;

 

(x) duly executed
Transfer Agent Instructions acknowledged by the Company’s transfer agent;

 

(xi) a duly
executed Registration Rights Agreement;

 

(xii) approval
by each applicable Trading Market of an additional shares listing application covering all of the Registrable Securities; and

 

(xiii) at the
election of the Company, either (1) the Cash Amendment Fee payable in cash, by wire transfer of immediately available funds to
an account designated by the Noteholder at least two (2) Business Days prior to the Closing Date, in an amount equal to (A) x [(B)/(C)]
where (A) equals the Amendment Fee, (B) equals the principal amount of such Noteholder’s Existing Notes (not including any
PIK Notes) and (C) equals the aggregate principal amount of all Existing Notes (not including any PIK Notes), or (2) the Payment
in Kind Amendment Fee payable through an increase in the principal amount of such Noteholder’s Amended Note in an amount
equal to (A) x [(B)/(C)] where (A) equals the Amendment Fee, (B) equals the principal amount of such Noteholder’s Existing
Notes (not including any PIK Notes) and (C) equals the aggregate principal amount of all Existing Notes (not including any PIK
Notes).

 

(b) At the
Closing, each Noteholder shall deliver or cause to be delivered to the Company the following:

 

(i) a duly
executed Warrant;

 

(ii) a duly
executed Security Agreement Amendment;

 

(iii) a duly
executed Registration Rights Agreement; and

 

(iv) such Noteholder’s
Existing Notes marked canceled.

 

Article
III

REPRESENTATIONS AND WARRANTIES

 

3.1 Representations
and Warranties of the Company. The Company hereby represents and warrants to the Noteholders and the Agent as follows (which
representations and warranties shall be deemed to apply, where appropriate, to each Subsidiary of the Company):

 

(a) Subsidiaries.
The Company has no Subsidiaries other than those listed in Schedule 3.1(a) hereto. The Company, directly or indirectly,
owns 100% of the outstanding equity interests of the Material Subsidiaries. There are no outstanding options or other rights to
purchase or receive equity interests of a Material Subsidiary. Except as disclosed in Schedule 3.1(a) hereto, the Company
owns, directly or indirectly, all of the capital stock or comparable equity interests of each Material Subsidiary free and clear
of any Lien and all the issued and outstanding shares of capital stock or comparable equity interest of each Material Subsidiary
are validly issued and are fully paid, non-assessable and free of preemptive and similar rights. Except as set forth in Schedule
3.1(a) hereto, no Material Subsidiary is currently prohibited, directly or indirectly, from paying any dividends to the Company,
from making any other distribution on such Material Subsidiary’s capital stock or similar ownership interest, from repaying
to the Company any loans or advances to such Material Subsidiary from the Company, or from transferring any of such Material Subsidiary’s
properties or assets to the Company or any other Material Subsidiary.

 

    8

     

    

 

(b) Organization
and Qualification. Each of the Company and the Subsidiaries is an entity duly organized, validly existing and in good standing
under the laws of the jurisdiction of its incorporation or organization (as applicable), with the requisite legal authority to
own and use its properties and assets and to carry on its business as currently conducted. Neither the Company nor any Subsidiary
is in violation of any of the provisions of its respective certificate or articles of incorporation, bylaws or other organizational
or charter documents. Each of the Company and the Subsidiaries is duly qualified to do business and is in good standing as a foreign
corporation or other entity in each jurisdiction in which the nature of the business conducted or property owned by it makes such
qualification necessary, except where the failure to be so qualified or in good standing, as the case may be, would not, individually
or in the aggregate, have or reasonably be expected to result in a Material Adverse Effect.

 

(c) Authorization;
Enforcement. The Company has the requisite corporate authority to enter into and to consummate the transactions contemplated
by each of the Transaction Documents to which it is a party and otherwise to carry out its obligations hereunder and thereunder.
The execution and delivery of each of the Transaction Documents to which it is a party by the Company and the consummation by it
of the transactions contemplated hereby and thereby have been duly authorized by all necessary action on the part of the Company
and no further consent or action is required by the Company, its Board of Directors or its stockholders. Each of the Transaction
Documents to which it is a party has been (or upon delivery will be) duly executed by the Company and is, or when delivered in
accordance with the terms hereof, will constitute, the valid and binding obligation of the Company enforceable against the Company
in accordance with its terms, except as may be limited by (i) applicable bankruptcy, insolvency, reorganization or other laws of
general application relating to or affecting the enforcement of creditors rights generally, and (ii) the effect of rules of law
governing the availability of specific performance and other equitable remedies.

 

(d) No Conflicts.
The execution, delivery and performance of the Transaction Documents to which it is a party by the Company and the consummation
by the Company of the transactions contemplated hereby and thereby (including, without limitation, the issuance of the Securities)
do not, and will not, (i) conflict with or violate any provision of the Company’s or any Subsidiary’s certificate or
articles of incorporation, bylaws or other organizational or charter documents, (ii) conflict with, or constitute a default (or
an event that 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 (with or without notice, lapse of time or both) of, any material agreement, credit facility,
debt or other instrument (evidencing a Company or Subsidiary debt or otherwise) or other understanding to which the Company or
any Subsidiary is a party or by which any property or asset of the Company or any Subsidiary is bound, or affected, or (iii) result
in a violation of any law, rule, regulation, order, judgment, injunction, decree or other restriction of any court or governmental
authority to which the Company or a Subsidiary is subject (including, assuming the accuracy of the representations and warranties
of the Noteholders set forth in Section 3.2 hereof, federal and state securities laws and regulations and the rules and
regulations of any self-regulatory organization to which the Company or its securities are subject), or by which any property or
asset of the Company or a Subsidiary is bound or affected.

 

    9

     

    

 

(e) No Consents.
Neither the Company nor any of its Subsidiaries is required to obtain any consent, waiver, authorization or order of, give any
notice to, or make any filing or registration with (other than the filing of a Form D with the SEC and any filings as may be required
by any state securities agencies), any court, governmental agency or any regulatory or self-regulatory agency or any other Person
in order for the Company to execute, deliver or perform any of its obligations under or contemplated by the Transaction Documents,
in each case in accordance with the terms hereof or thereof, except to the extent already obtained, given or made or as contemplated
therein to be obtained, give or made after the date hereof.

 

(f) The
Securities. The Securities have been duly authorized for issuance by the Company and, when duly executed, issued and delivered
in accordance with the Transaction Documents, will constitute valid and binding obligations of the Company, entitled to the benefits
of the Transaction Documents and enforceable against the Company in accordance with their terms, except as the enforcement thereof
may be limited by bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium or other similar laws relating to or
affecting the rights and remedies of creditors or by general equitable principles. The Common Shares and the Warrant Shares are
duly authorized and, when issued and paid for in accordance with the Transaction Documents, will be duly and validly issued, fully
paid and nonassessable, free and clear of all Liens and will not be subject to preemptive or similar rights of stockholders (other
than those imposed by the Noteholders). The Company has reserved from its duly authorized capital stock the maximum number of shares
of Common Stock issuable upon exercise of the Warrants. The offer and issuance of the Securities to the Noteholders pursuant to
the Agreement is exempt from the registration requirements of the 1933 Act.

 

(g) SEC
Reports; Financial Statements. Except as set forth in Schedule 3.1(g) hereto, the Company has filed all reports required
to be filed by it under the Securities Exchange Act of 1934, as amended (the “1934 Act”), including pursuant
to Section 13(a) or 15(d) of the 1934 Act, for the 12 months preceding the date hereof on a timely basis or has received a valid
extension of such time of filing and has filed any such SEC Reports prior to the expiration of any such extension and has filed
all reports required to be filed by it under the 1934 Act, including pursuant to Section 13(a) or 15(d) of the 1934 Act, for the
two years preceding the date hereof. Such reports required to be filed by the Company under the 1934 Act, including pursuant to
Section 13(a) or 15(d) of the 1934 Act, together with any materials filed or furnished by the Company under the 1934 Act, whether
or not any such reports were required to be filed being collectively referred to herein as the “SEC Reports”
and, together with this Agreement and the Schedules to this Agreement, the “Disclosure Materials.” There are
no unresolved comment letters from the Staff of the SEC. As of their respective dates, the SEC Reports filed by the Company complied
in all material respects with the requirements of the 1934 Act and the rules and regulations of the SEC promulgated thereunder,
and none of the SEC Reports, when filed by the Company, 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. The financial statements of the Company included in the SEC Reports comply in all material
respects with applicable accounting requirements and the rules and regulations of the SEC with respect thereto as in effect at
the time of filing. Such financial statements have been prepared in accordance with United States generally accepted accounting
principles applied on a consistent basis during the periods involved (“GAAP”), except as may be otherwise specified
in such financial statements, the notes thereto and except that unaudited financial statements may not contain all footnotes required
by GAAP or may be condensed or summary statements, and fairly present in all material respects the consolidated financial position
of the Company and its consolidated subsidiaries as of and for the dates thereof and the results of operations and cash flows for
the periods then ended, subject, in the case of unaudited statements, to normal, year-end audit adjustments. All material agreements
to which the Company or any Subsidiary is a party or to which the property or assets of the Company or any Subsidiary are subject
are included as part of or identified in the SEC Reports, to the extent such agreements are required to be included or identified
pursuant to the rules and regulations of the SEC.

 

    10

     

    

 

(h) Since the
date of the latest audited financial statements included within the SEC Reports, except as disclosed in the SEC Reports or in Schedule
3.1(h) hereto, (i) there has been no event, occurrence or development that, individually or in the aggregate, has had or that
would result in a Material Adverse Effect, (ii) the Company has not incurred any material liabilities other than (A) trade payables
and accrued expenses incurred in the ordinary course of business consistent with past practice and (B) liabilities not required
to be reflected in the Company’s financial statements pursuant to GAAP or required to be disclosed in filings made with the
SEC, (iii) the Company has not altered its method of accounting or the changed its auditors, (iv) the Company has not declared
or made any dividend or distribution of cash or other property to its stockholders, in their capacities as such, or purchased,
redeemed or made any agreements to purchase or redeem any shares of its capital stock (except for repurchases by the Company of
shares of capital stock held by employees, officers, directors, or consultants pursuant to an option of the Company to repurchase
such shares upon the termination of employment or services), and (v) the Company has not issued any equity securities to any officer,
director or Affiliate, except pursuant to existing Company stock-based plans. The Company has not taken any steps to seek protection
pursuant to any bankruptcy law nor does the Company have any knowledge or reason to believe that its 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
is not as of the date hereof, and after giving effect to the transactions contemplated hereby to occur at the applicable Closing,
will not be Insolvent (as defined below). For purposes of this Section 3.1(h), “Insolvent” means (i)
the present fair saleable value of the Company’s assets is less than the amount required to pay the Company’s total
Indebtedness (as defined in Section 3.1(x)), (ii) the Company is unable to pay its debts and liabilities, subordinated,
contingent or otherwise, as such debts and liabilities become absolute and matured, (iii) the Company intends to incur or believes
that it will incur debts that would be beyond its ability to pay as such debts mature or (iv) the Company has 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.

 

(i) Absence
of Litigation. Except as set forth in the SEC Reports or on Schedule 3.1(i) hereto, there is no action, suit, claim,
or proceeding, or, to the Company’s knowledge, inquiry or investigation, before or by any court, public board, government
agency, self-regulatory organization (including the Principal Market) or body pending or, to the knowledge of the Company, threatened
against or affecting the Company or any of its Subsidiaries that could, individually or in the aggregate, have a Material Adverse
Effect.

 

    11

     

    

 

(j) Compliance.
Neither the Company nor any Subsidiary, except in each case as would not, individually or in the aggregate, reasonably be expected
to have or result in a Material Adverse Effect, (i) is in default under or in violation of (and no event has occurred that has
not been waived that, with notice or lapse of time or both, would result in a default by the Company or any Subsidiary under),
nor has the Company or any Subsidiary received written notice of a claim that it is in default under or that it is in violation
of, any indenture, loan or credit agreement or any other agreement or instrument to which it is a party or by which it or any of
its properties is bound (whether or not such default or violation has been waived), (ii) is in violation of any order of any court,
arbitrator or governmental body, or (iii) is or has been in violation of any statute, rule or regulation of any governmental authority.

 

(k) Title
to Assets. Except as set forth on Schedule 3.1(k) hereto, the Company and the Subsidiaries have good and marketable
title to all real property owned by them that is material to the business of the Company and the Subsidiaries and good and marketable
title in all personal property owned by them that is material to the business of the Company and the Subsidiaries, in each case
free and clear of all Liens, except for Liens that do not, individually or in the aggregate, have or result in a Material Adverse
Effect. Any real property and facilities held under lease by the Company and the Subsidiaries are held by them under valid, subsisting
and enforceable leases of which the Company and the Subsidiaries are in material compliance.

 

(l) No General
Solicitation; Financial Advisor Fees. Neither the Company, nor any of its 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 promulgated
under the 1933 Act) in connection with the transactions contemplated by this Agreement including the exchange of Existing Notes
for Amended Notes and the issuance of the Common Shares and the Warrants. The Company shall be responsible for the payment of any
placement agent’s fees, financial advisory fees, or brokers’ commission (other than for persons engaged by any Noteholder
or its investment advisor) relating to or arising out of the issuance of the Securities pursuant to this Agreement. The Company
shall pay, and hold each Noteholder harmless against, any liability, loss or expense (including, without limitation, reasonable
attorney’s fees and out-of-pocket expenses) arising in connection with any such claim for fees arising out of the issuance
of the Amended Notes pursuant to this Agreement. The Company has engaged Guggenheim Securities, LLC as its financial advisor in
connection with the transactions contemplated by this Agreement and the Company shall be responsible for any and all fees payable
to Guggenheim Securities, LLC in connection with the transactions contemplated by this Agreement.

 

(m) Private
Placement. Neither the Company nor any of its Affiliates nor, any Person acting on the Company’s behalf has, directly
or indirectly, at any time within the past six months, made any offer or sale of any security or solicitation of any offer to buy
any security under circumstances that would (i) eliminate the availability of the exemption from registration under Regulation
D under the 1933 Act in connection with the offer and issuance by the Company of the Securities as contemplated hereby or (ii)
cause the offering of the Securities pursuant to the Transaction Documents to be integrated with prior offerings by the Company
for purposes of any applicable law, regulation or stockholder approval provisions, including, without limitation, under the rules
and regulations of any Trading Market. The Company is not required to be registered as, and is not an Affiliate of, an “investment
company” within the meaning of the Investment Company Act of 1940, as amended. The Company is not required to be registered
as, a United States real property holding corporation within the meaning of the Foreign Investment in Real Property Tax Act of
1980.

 

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(n) Listing
and Maintenance Requirements. Except as set forth on Schedule 3.1(n) hereto, the Company has not, in the twelve months
preceding the date hereof, received notice (written or oral) from any Trading Market on which the Common Stock is or has been listed
or quoted to the effect that the Company is not in compliance with the listing or maintenance requirements of such Trading Market.
Except as set forth on Schedule 3.1(n) hereto, the Company is in compliance with all such listing and maintenance requirements.
The Company intends to undertake commercially reasonable efforts to maintain such listing of its Common Stock on the Principal
Market. The issuance by the Company of the Amended Notes shall not have the effect of delisting or suspending the Common Stock
from the Principal Market.

 

(o) Disclosure.
Except for this Agreement, the Schedules to this Agreement, and information previously disclosed to the Noteholders in connection
with or pursuant to the modifications to the Credit Agreements (the “Disclosed Information”), the Company confirms
that neither it nor any officers, directors or Affiliates, has provided any of the Noteholders or their agents or counsel with
any information that constitutes or might constitute Non-Public Information. The Company understands and confirms that each of
the Noteholders will rely on the foregoing representations in effecting purchases and sales of securities of the Company. All disclosure
provided by the Company to the Noteholders regarding the Company, its business and the transactions contemplated hereby, including
the Schedules to this Agreement, furnished by or on the behalf of the Company are true and correct in all material respects and
do 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. To the Company’s knowledge, except
for the transactions contemplated by this Agreement, 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, operations or financial conditions, which, under applicable
law, rule or regulation, requires public disclosure or announcement by the Company but which has not been so publicly announced
or disclosed. The Company acknowledges and agrees that no Noteholder makes or has made any representations or warranties with respect
to the transactions contemplated hereby other than those set forth in the Transaction Documents.

 

(p) Acknowledgment
Regarding Noteholders’ Acquisition of Securities. Based upon the assumption that the transactions contemplated by this
Agreement are consummated in all material respects in conformity with the Transaction Documents, the Company acknowledges and agrees
that each of the Noteholders is acting solely in the capacity of an arm’s length investor with respect to the Transaction
Documents and the transactions contemplated hereby. The Company further acknowledges that no Noteholder is acting as a financial
advisor or fiduciary of the Company (or in any similar capacity) with respect to this Agreement and the transactions contemplated
hereby and any advice given by any Noteholder or any of their respective representatives or agents in connection with the Transaction
Documents and the transactions contemplated hereby and thereby is merely incidental to the Noteholders’ acquisition of the
Securities. The Company further represents to each Noteholder that the Company’s decision to enter into this Agreement has
been based solely on the independent evaluation of the transactions contemplated hereby by the Company and its representatives.

 

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(q) Patents
and Trademarks. Except as set forth in the SEC Reports or on Schedule 3.1(q) hereto, the Company and its Subsidiaries
own, or possess adequate rights or licenses to use, all trademarks, trade names, service marks, service mark registrations, service
names, patents, patent rights, copyrights, inventions, licenses, approvals, governmental authorizations, trade secrets and other
intellectual property rights (“Intellectual Property Rights”) necessary to conduct their respective businesses
now conducted. None of the Company’s Intellectual Property Rights have expired or terminated, or are expected to expire or
terminate, within three years from the date of this Agreement. Except as set forth in the SEC Reports or on Schedule 3.1(q)
hereto, the Company does not have any knowledge of any infringement by the Company or its Subsidiaries of Intellectual Property
Rights of others. Except as disclosed in the SEC Reports, there is no claim, action or proceeding being made or brought, or to
the knowledge of the Company, being threatened, against the Company or its Subsidiaries regarding its Intellectual Property Rights.

 

(r) Insurance.
The Company and the Subsidiaries are insured by insurers of recognized financial responsibility against such losses and risks and
in such amounts as are prudent and customary in the businesses and location in which the Company and the Subsidiaries are engaged.

 

(s) Licenses
and Permits. Except as disclosed on Schedule 3.1(s), the Company and the Subsidiaries possess all certificates, authorizations,
approvals, licenses and permits issued by the appropriate federal, state, local or foreign regulatory authorities necessary to
conduct their respective businesses as described in the SEC Reports (“Material Permits”), except where the failure
to possess such permits does not, individually or in the aggregate, have or reasonably be expected to result in a Material Adverse
Effect, all such Material Permits are valid and in full force and effect and, except as disclosed on Schedule 3.1(s), the
Company and its Subsidiaries are in compliance with the terms and conditions of all such Material Permits and, except as disclosed
on Schedule 3.1(s), neither the Company nor any Subsidiary has received any written notice of proceedings relating to the
revocation or modification of any Material Permit.

 

(t) Transactions
With Affiliates and Employees. Except as set forth or incorporated by reference in the Company’s SEC Reports, none of
the officers, directors, employees or Affiliates of the Company is presently a party to any transaction that would be required
to be reported on Form 10-K with the Company or any of its subsidiaries (other than for ordinary course services as employees,
officers or directors), including any contract, agreement or other arrangement providing for the furnishing of services to or by,
providing for rental of real or personal property to or from, or otherwise requiring payments to or from any such officer, director
or employee or, to the Company’s knowledge, any corporation, partnership, trust or other entity in which any such officer,
director, employee or Affiliate has a substantial interest or is an officer, director, trustee or partner.

 

(u) Internal
Accounting Controls. Except as set forth in the Company’s SEC Reports, the Company and its consolidated subsidiaries
maintain a system of internal accounting controls sufficient to provide reasonable assurance that (i) transactions are executed
in accordance with management’s general or specific authorizations, (ii) transactions are recorded as necessary to permit
preparation of financial statements in conformity with generally accepted accounting principles and to maintain asset accountability,
(iii) access to assets is permitted only in accordance with management’s general or specific authorization, and (iv) the
recorded accountability for assets is compared with the existing assets at reasonable intervals and appropriate action is taken
with respect to any differences.

 

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(v) Sarbanes-Oxley
Act. Except as set forth in the Company’s SEC Reports, the Company is in compliance in all material respects with applicable
requirements of the Sarbanes-Oxley Act of 2002 and applicable rules and regulations promulgated by the SEC thereunder, except where
such noncompliance would not have, individually or in the aggregate, a Material Adverse Effect.

 

(w) Foreign
Corrupt Practices. Neither the Company nor any of its Subsidiaries nor, to the knowledge of the Company, any director, officer,
agent, employee or other Person acting on behalf of the Company or any of its Subsidiaries has, in the course of its actions for,
or on behalf of, the Company (i) used any corporate funds for any unlawful contribution, gift, entertainment or other unlawful
expenses relating to political activity; (ii) made any direct or indirect unlawful payment to any foreign or domestic government
official or employee from corporate funds; (iii) violated or is in violation of any provision of the U.S. Foreign Corrupt Practices
Act of 1977, as amended; or (iv) made any unlawful bribe, rebate, payoff, influence payment, kickback or other unlawful payment
to any foreign or domestic government official or employee.

 

(x) Indebtedness.
Except as disclosed in the SEC Reports and in Schedule 3.1(x), neither the Company nor any of its Subsidiaries (i) has any
outstanding Indebtedness (as defined below), (ii) is in violation of any term of or in default under any contract, agreement or
instrument relating to any Indebtedness, except where such violations and defaults would not result, individually or in the aggregate,
in a Material Adverse Effect, or (iii) is a party to any contract, agreement or instrument relating to any Indebtedness, the performance
of which, in the judgment of the Company’s officers, has or is expected to have a Material Adverse Effect. Schedule 3.1(x)
provides a description of the terms of any such outstanding Indebtedness. For purposes of this Agreement: (x) “Indebtedness”
of any Person means, without duplication (A) all indebtedness for borrowed money, (B) all obligations issued, undertaken or assumed
as the deferred purchase price of property or services (other than trade payables entered into in the ordinary course of business),
(C) all reimbursement or payment obligations with respect to letters of credit, surety bonds and other similar instruments, (D)
all obligations evidenced by notes, bonds, debentures or similar instruments, including obligations so evidenced incurred in connection
with the acquisition of property, assets or businesses, (E) all indebtedness created or arising under any conditional sale or other
title retention agreement, or incurred as financing, in either case with respect to any property or assets acquired with the proceeds
of such indebtedness (even though the rights and remedies of the seller or bank under such agreement in the event of default are
limited to repossession or sale of such property), (F) all monetary obligations under any leasing or similar arrangement which,
in connection with generally accepted accounting principles, consistently applied for the periods covered thereby, is classified
as a capital lease, (G) all obligations of such Person to purchase, redeem, retire, defease or otherwise make any payment in respect
of any equity interests in such Person or any other Person or any warrants, rights or options to acquire such equity interests,
valued, in the case of redeemable preferred interests, at the greater of its voluntary or involuntary liquidation preference plus
accrued and unpaid dividends, (H) all indebtedness referred to in clauses (A) through (G) above secured by (or for which the holder
of such Indebtedness has an existing right, contingent or otherwise, to be secured by) any mortgage, lien, pledge, charge, security
interest or other encumbrance upon or in any property or assets (including accounts and contract rights) owned by any Person, even
though the Person which owns such assets or property has not assumed or become liable for the payment of such indebtedness, and
(I) all Contingent Obligations in respect of indebtedness or obligations of others of the kinds referred to in clauses (A) through
(H) above; and (y) “Contingent Obligation” means, as to any Person, any direct or indirect liability, contingent
or otherwise, of that Person with respect to any indebtedness, lease, dividend or other obligation of another Person if the primary
purpose or intent of the Person incurring such liability, or the primary effect thereof, is to provide assurance to the obligee
of such liability that such liability will be paid or discharged, or that any agreements relating thereto will be complied with,
or that the holders of such liability will be protected (in whole or in part) against loss with respect thereto.

 

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(y) Employee
Relations. Except as set forth on Schedule 3.1(y) hereto, Neither Company nor any of its Subsidiaries is a party to
any collective bargaining agreement or employs any member of a union. The Company believes that its relations with its employees
are as disclosed in the SEC Reports. Except as disclosed in the SEC Reports, during the period covered by the SEC Reports, no executive
officer of the Company or any of its Subsidiaries (as defined in Rule 501(f) of the 1933 Act) has notified the Company or any such
Subsidiary that such officer intends to leave the Company or any such Subsidiary or otherwise terminate such officer’s employment
with the Company or any such Subsidiary. To the knowledge of the Company or any such Subsidiary, no executive officer of the Company
or any of its Subsidiaries is in violation of any material term of any employment contract, confidentiality, disclosure or proprietary
information agreement, non-competition agreement, or any other contract or agreement or any restrictive covenant, and the continued
employment of each such executive officer does not subject the Company or any such Subsidiary to any liability with respect to
any of the foregoing matters.

 

(z) Labor
Matters. The Company and its Subsidiaries are in compliance in all material respects with all federal, state, local and foreign
laws and regulations respecting labor, employment and employment practices and benefits, terms and conditions of employment and
wages and hours, except where failure to be in compliance would not, either individually or in the aggregate, reasonably be expected
to result in a Material Adverse Effect.

 

(aa) Environmental
Laws. Except as set forth in the SEC Reports or on Schedule 3.1(aa) hereto, the Company and its Subsidiaries (i) are
in compliance in all material respects with any and all Environmental Laws (as hereinafter defined), (ii) have received all permits,
licenses or other approvals required of them under applicable Environmental Laws to conduct their respective businesses and (iii)
are in compliance in all material respects with all terms and conditions of any such permit, license or approval where, in each
of the foregoing clauses (i), (ii) and (iii), the failure to so comply would be reasonably expected to have, individually or in
the aggregate, a Material Adverse Effect. The term “Environmental Laws” means all federal, state, local or foreign
laws relating to pollution or protection of human health or the environment (including, without limitation, ambient air, surface
water, groundwater, land surface or subsurface strata), including, without limitation, laws relating to emissions, discharges,
releases or threatened releases of chemicals, pollutants, contaminants, or toxic or hazardous substances or wastes (collectively,
“Hazardous Materials”) into the environment, or otherwise relating to the manufacture, processing, distribution,
use, treatment, storage, disposal, transport or handling of Hazardous Materials, as well as all authorizations, codes, decrees,
demands or demand letters, injunctions, judgments, licenses, notices or notice letters, orders, permits, plans or regulations issued,
entered, promulgated or approved thereunder.

 

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(bb) Subsidiary
Rights. The Company or one of its Subsidiaries has the unrestricted right to vote, and (subject to limitations imposed by applicable
law) to receive dividends and distributions on, all capital securities of its Subsidiaries as owned by the Company or such Subsidiary.

 

(cc) Tax
Status. The Company and each of its Subsidiaries (i) has made or filed all foreign, federal and state income and all other
tax returns, reports and declarations required by any jurisdiction to which it is subject, (ii) has paid all taxes and other governmental
assessments and charges that are material in amount, shown or determined to be due on such returns, reports and declarations, except
those being contested in good faith and (iii) has set aside on its books provision reasonably adequate for the payment of all taxes
for periods subsequent to the periods to which such returns, reports or declarations apply. There are no unpaid taxes in any material
amount claimed to be due by the taxing authority of any jurisdiction, and the officers of the Company know of no basis for any
such claim.

 

(dd) Ranking
of Amended Notes. No Indebtedness of the Company is senior to or ranks pari passu with the Amended Notes in right of
payment, whether with respect of payment of redemptions, interest, damages or upon liquidation or dissolution or otherwise.

 

(ee) No
“Bad Actor” Disqualification. The Company has exercised reasonable care, in accordance with SEC rules and guidance,
and has conducted a factual inquiry, the nature and scope of which reflect reasonable care under the relevant facts and circumstances,
to determine whether any Covered Person (as defined below) is subject to any of the “bad actor” disqualifications described
in Rule 506(d)(1)(i) to (viii) under the 1933 Act (“Disqualification Events”). To the Company’s knowledge,
after conducting such sufficiently diligent factual inquiries, no Covered Person is subject to a Disqualification Event, except
for a Disqualification Event covered by Rule 506(d)(2) or (d)(3) under the 1933 Act. The Company has complied, to the extent applicable,
with any disclosure obligations under Rule 506(e) under the 1933 Act. “Covered Persons” are those persons specified
in Rule 506(d)(1) under the 1933 Act, including the Company; any predecessor or affiliate of the Company; any director, executive
officer, other officer participating in the offering, general partner or managing member of the Company; any beneficial owner of
20% or more of the Company’s outstanding voting equity securities, calculated on the basis of voting power; any promoter
(as defined in Rule 405 under the 1933 Act) connected with the Company in any capacity at the time of the issuance of the Amended
Notes; and any person that has been or will be paid (directly or indirectly) remuneration in connection with the issuance of the
Amended Notes (a “Solicitor”), any general partner or managing member of any Solicitor, and any director, executive
officer or other officer participating in the offering of any Solicitor or general partner or managing member of any Solicitor..

 

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3.2 Representations
and Warranties of the Noteholders. Each Noteholder hereby, as to itself only and for no other Noteholder, represents and warrants
to the Company as follows:

 

(a) Organization;
Authority. Such Noteholder is an entity duly organized, validly existing and in good standing under the laws of the jurisdiction
of its organization with the requisite corporate, partnership or other power and authority to enter into and to consummate the
transactions contemplated by the Transaction Documents and otherwise to carry out its obligations hereunder and thereunder. The
acquisition by such Noteholder of the Securities hereunder has been duly authorized by all necessary action on the part of such
Noteholder. This Agreement has been duly executed and delivered by such Noteholder and constitutes the valid and binding obligation
of such Noteholder, enforceable against it in accordance with its terms, except as may be limited by (i) applicable bankruptcy,
insolvency, reorganization or other laws of general application relating to or affecting the enforcement of creditors rights generally,
and (ii) the effect of rules of law governing the availability of specific performance and other equitable remedies.

 

(b) No Public
Sale or Distribution. Such Noteholder is acquiring the Securities in the ordinary course of business for its own account and
not with a view towards, or for resale in connection with, the public sale or distribution thereof, except pursuant to sales registered
under the 1933 Act or under an exemption from such registration and in compliance with applicable federal and state securities
laws, and such Noteholder does not have a present arrangement to effect any distribution of the Securities to or through any person
or entity; provided, however, that by making the representations herein, such Noteholder does not agree 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 under the 1933 Act.

 

(c) Noteholder
Status. At the time such Noteholder was offered the Securities, it was, and at the date hereof it is, an “accredited
investor” as defined in Rule 501(a) under the 1933 Act or a “qualified institutional buyer” as defined in Rule
144A(a) under the 1933 Act.

 

(d) Experience
of Such Noteholder. Such Noteholder, either alone or together with its representatives has such knowledge, sophistication and
experience in business and financial matters so as to be capable of evaluating the merits and risks of the prospective investment
in the Securities, and has so evaluated the merits and risks of such investment. Such Noteholder understands that it must bear
the economic risk of this investment in the Securities, and is able to bear such risk and is able to afford a complete loss of
such investment.

 

(e) Access
to Information. Such Noteholder acknowledges that it has reviewed the Disclosure Materials and has been afforded: (i) the opportunity
to ask such questions as it has deemed necessary of, and to receive answers from, representatives of the Company concerning the
terms and conditions of the offering of the Securities and the merits and risks of investing in the Securities; (ii) access to
information (other than Non-Public Information) about the Company and the Subsidiaries and their respective financial condition,
results of operations, business, properties, management and prospects sufficient to enable it to evaluate its investment; and (iii)
the opportunity to obtain such additional information that the Company possesses or can acquire without unreasonable effort or
expense that is necessary to make an informed investment decision with respect to the investment. Neither such inquiries nor any
other investigation conducted by or on behalf of such Noteholder or its representatives or counsel shall modify, amend or affect
such Noteholder’s right to rely on the truth, accuracy and completeness of the Disclosure Materials and the Company’s
representations and warranties contained in the Transaction Documents. Such Noteholder acknowledges receipt of copies of the SEC
Reports.

 

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(f) No Governmental
Review. Such Noteholder 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.

 

(g) No Conflicts.
The execution, delivery and performance by such Noteholder of this Agreement and the consummation by such Noteholder of the transactions
contemplated hereby will not (i) result in a violation of the organizational documents of such Noteholder 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 Noteholder
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 Noteholder, except in the case of clauses (ii) and (iii) above, for such that are not material
and do not otherwise affect the ability of such Noteholder to consummate the transactions contemplated hereby.

 

(h) Restricted
Securities. The Noteholders understand that the Securities are characterized as “restricted securities” under the
U.S. federal securities laws inasmuch as they are being acquired from the Company in a transaction not involving a public offering
and that under such laws and applicable regulations such securities may be resold without registration under the 1933 Act only
in certain limited circumstances.

 

(i) Legends.
It is understood that, (i) except as provided in Section 4.1(b) of this Agreement, certificates evidencing Common Shares
and Warrant Shares shall bear the legend set forth in Section 4.1(b), and (ii) the Amended Notes shall bear the legend set
forth on the cover page of the Form of Amended Note attached hereto as Exhibit B.

 

(j) No “Bad
Actor” Disqualification. Any Noteholder that is a Covered Person is not subject to any Disqualification Event.

 

(k) No Legal,
Tax or Investment Advice. Such Noteholder understands that nothing in this Agreement or any other materials presented by or
on behalf of the Company to the Noteholder in connection with the acquisition of the Securities constitutes legal, tax or investment
advice. Such Noteholder has consulted such legal, tax and investment advisors as it, in its sole discretion, has deemed necessary
or appropriate in connection with its acquisition of the Securities.

 

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Article
IV

OTHER AGREEMENTS OF THE PARTIES

 

4.1 Transfer Restrictions.

 

(a) The Noteholders
covenant that the Securities will only be disposed of pursuant to an effective registration statement under, and in compliance
with the requirements of, the 1933 Act or pursuant to an available exemption from the registration requirements of the 1933 Act,
and in compliance with any applicable state securities laws. In connection with any transfer of Securities other than pursuant
to an effective registration statement or to the Company, the Company may require the transferor to provide to the Company an opinion
of counsel selected by the transferor, the form and substance of which opinion shall be reasonably satisfactory to the Company,
to the effect that such transfer does not require registration under the 1933 Act. Notwithstanding the foregoing, the Company hereby
consents to and agrees to register on the books of the Company and with its transfer agent, without any such legal opinion, except
to the extent that the transfer agent requests such legal opinion, any transfer of Securities by a Noteholder to an Affiliate of
such Noteholder, provided that the transferee certifies to the Company that it is an “accredited investor” as defined
in Rule 501(a) under the 1933 Act and provided that such Affiliate does not request any removal of any existing legends on any
certificate evidencing the Securities.

(b) The Noteholders agree
to (i) the imprinting of the legend set forth on the cover page of the Form of Amended Note attached hereto as Exhibit B,
and (ii) the imprinting, so long as is required by this Section 4.1(b), of the following legend and/or other substantially
similar legends on any certificate evidencing any of the Common Shares, the Warrant and the Warrant Shares: 

 

[NEITHER THE ISSUANCE AND
SALE OF THE SECURITIES REPRESENTED BY THIS CERTIFICATE NOR THE SECURITIES INTO WHICH THESE SECURITIES ARE [EXERCISABLE] 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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(c) Certificates
evidencing the Common Shares and/or the Warrant Shares shall not be required to contain the legend set forth in Section 4.1(b)
above or any other legend (i) while 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 (including the Securities underlying such Securities) are eligible to be sold, assigned or transferred
without restriction (including, without limitation, volume limitations) pursuant to Rule 144 (taking account of any Staff position
with respect to “affiliate” status) and without the need for current public information required by Rule 144(c)(1)
(or Rule 144(i)(2), if applicable) (provided that a Noteholder 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 counsel), (iv) in connection
with a sale, assignment or other transfer (other than under Rule 144), provided that such Noteholder provides the Company with
an opinion of counsel to such Noteholder, 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, at its own expense,
no later than three (3) Trading Days following the delivery by a Noteholder 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 Noteholder as may be required above in this Section 4.1(c), as directed by such Noteholder, either: (A) provided that
the Company’s transfer agent is participating in the Depository Trust Company (“DTC”) Fast Automated Securities
Transfer Program and such Securities are Warrant Shares, credit the aggregate number of shares of Common Stock to which such Noteholder
shall be entitled to such Noteholder’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 dispatch by overnight courier to such Noteholder, a certificate representing such Securities that is free from
all restrictive and other legends, registered in the name of such Noteholder or its designee (the date by which such credit is
so required to be made to the balance account of such Noteholder’s or such Noteholder’s nominee with DTC or such certificate
is required to be delivered to such Noteholder pursuant to the foregoing is referred to herein as the “Share Delivery
Date”).

 

(d) If the
Company fails to so properly deliver such unlegended certificates or so properly credit the balance account of such Noteholder’s
or such Noteholder’s nominee with DTC by the Share Delivery Date, and if on or after the Share Delivery Date such Noteholder
purchases (in an open market transaction or otherwise) shares of Common Stock to deliver in satisfaction of a sale by such Noteholder
of shares of Common Stock that such Noteholder anticipated receiving from the Company without any restrictive legend, then, in
addition to all other remedies available to such Noteholder, the Company shall, within three (3) Trading Days after such Noteholder’s
request and in such Noteholder’s sole discretion, either (i) pay cash to such Noteholder in an amount equal to such Noteholder’s
total purchase price (including brokerage commissions, if any) for the shares of Common Stock so purchased (the “Buy-In
Price”), at which point the Company’s obligation to deliver such certificate or credit such Noteholder’s
balance account shall terminate, or (ii) promptly honor its obligation to deliver to such Noteholder a certificate or certificates
or credit such Noteholder’s DTC account representing such number of shares of Common Stock that would have been issued if
the Company timely complied with its obligations hereunder and pay cash to such Noteholder in an amount equal to the excess (if
any) of the Buy-In Price over the product of (A) such number of Shares or Warrant Shares (as the case may be) that the Company
was required to deliver to such Noteholder by the Share Delivery Date times (B) the Closing Price of the Common Stock on the Share
Delivery Date.

 

    21

     

    

 

(e) The Company will
not object to and shall permit (except as prohibited by law) a Noteholder to pledge or grant a security interest in some or all
of the Securities in connection with a bona fide margin agreement or other loan or financing arrangement secured by the Securities,
and if required under the terms of such agreement, loan or arrangement, the Company will not object to and shall permit (except
as prohibited by law) such Noteholder to transfer pledged or secured Securities to the pledges or secured parties. Except as required
by law, such a pledge or transfer would not be subject to approval of the Company, no legal opinion of the pledgee, secured party
or pledgor shall be required in connection therewith, and no notice shall be required of such pledge. Each Noteholder acknowledges
that the Company shall not be responsible for any pledges relating to, or the grant of any security interest in, any of the Securities
or for any agreement, understanding or arrangement between any Noteholder and its pledgee or secured party. At the appropriate
Noteholder’s expense, the Company will execute and deliver such reasonable documentation as a pledgee or secured party of
Securities may reasonably request in connection with a pledge or transfer of the Securities, including the preparation and filing
of any required prospectus supplement under Rule 424(b)(3) of the 1933 Act or other applicable provision of the 1933 Act to appropriately
amend the list of Selling Stockholders thereunder. Provided that the Company is in compliance with the terms of this Section
4.1(e), the Company’s indemnification obligations pursuant to Section 6.4 shall not extend to any proceeding or
losses arising out of or related to this Section 4.1(e).

 

4.2 Reporting Status.
Until the date on which the Noteholders shall have sold all of the Registrable Securities, the Company shall timely file all reports
required to be filed with the SEC pursuant to the 1933 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.

 

4.3 Reservation
of Securities. The Company shall maintain a reserve from its duly authorized shares of Common Stock for issuance pursuant to
the Transaction Documents in such amount as may be required to fulfill its obligations to issue such Shares under the Transaction
Documents. In the event that at any time the then authorized shares of Common Stock are insufficient for the Company to satisfy
its obligations to issue such Shares under the Transaction Documents, the Company shall promptly take such actions as may be required
to increase the number of authorized shares.

 

    22

     

    

 

4.4 Securities Laws
Disclosure; Publicity. On or before the second (2nd) Business Day following the date of this Agreement, the Company shall file
a Current Report on Form 8-K disclosing (i)all the material terms of the transactions contemplated by the Transaction Documents
and (ii) any of the Disclosed Information that would reasonably be deemed to constitute material non-public information in each
case in the appropriate manner under the 1934 Act and attaching all the material Transaction Documents (including, without limitation,
this Agreement (and all schedules to this Agreement), the Warrant Agreement and the Registration Rights Agreement (including all
attachments, the “8-K Filing”). 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, except in compliance with the procedure
set forth in Section 14 of the Amended Note, provide any Noteholder with any Non-Public Information regarding the Company
or any of its Subsidiaries from and after the issuance of a press release without the express prior written consent of such Noteholder.
In the event of a breach of any of the foregoing covenants or any of the covenants or agreements contained in the Transaction Documents
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 Noteholder), including without limitation the agreements contained in Section
14 of the Amended Notes, in addition to any other remedy provided herein or in the Transaction Documents, such Noteholder 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 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 Noteholder shall have any liability to the Company, any of its Subsidiaries,
or any of its or their respective officers, directors, employees, stockholders or agents, for any such disclosure. Subject to the
foregoing, neither the Company, its Subsidiaries nor any Noteholder 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 Noteholder, to make 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 Noteholder shall be consulted by the Company in connection with any such press release
or other public disclosure prior to its release). Without the prior written consent of the applicable Noteholder, the Company shall
not (and shall cause each of its Subsidiaries and Affiliates to not) disclose the name of such Noteholder in any filing, announcement,
release or otherwise; provided, however, that such Noteholder’s name may be disclosed by the Company to the
extent such disclosure is required in the 8-K Filing.

 

4.5 Anti-dilution
Rights. In the event the Company shall at any time between the Closing Date and March 31, 2020, effect a Subsequent Placement
for a consideration per share of Common Stock less than the Floor Price, then the Company shall issue to the Noteholders, concurrently
with such Subsequent Placement, the number of shares of Common Stock as determined by dividing the Aggregate Value by the adjusted
Floor Price determined in accordance with the following formula less 5,530,718 shares of Common Stock originally issued
pursuant to this Agreement and any shares of Common Stock previously issued pursuant to this Section 4.5, rounded up to
the nearest whole share (such additional shares of common stock, the “Additional Common Shares”):

 

PP2 = PP1* (A + B)
÷ (A + C).

 

For purposes of the
foregoing formula, the following definitions shall apply:

 

(a) “PP2”
shall mean the adjusted Floor Price in effect immediately after such Subsequent Placement;

 

    23

     

    

 

(b) “PP1”
shall mean the Floor Price;

 

(c) “A” shall
mean the number of shares of Common Stock outstanding immediately prior to such Subsequent Placement (treating for this purpose
as outstanding all shares of Common Stock issuable upon exercise of Options and Convertible Securities outstanding immediately
prior to such Subsequent Placement);

 

(d) “B” shall
mean the number of shares of Common Stock that would have been issued if such Subsequent Placement had been issued at a price per
share equal to PP1 (determined by dividing the aggregate consideration received by the Company in respect of such Subsequent
Placement by PP1); and

 

(e) “C” shall
mean the number of shares of Common Stock issued in such Subsequent Placement.

 

Any issuance of Additional
Common Shares pursuant to this Section 4.5 shall be made the Noteholders pro rata in accordance with their respective original
principal amounts of Amended Notes.

 

Article
V

CONDITIONS

 

5.1 Conditions Precedent
to the Obligations of the Noteholders. The obligation of each Noteholder to acquire the Securities at the Closing is subject
to the satisfaction or waiver by such Noteholder, at or before the Closing, of each of the following conditions:

 

(a) Representations
and Warranties. The representations and warranties of the Company contained herein shall be true and correct in all material
respects as of the date when made and as of the Closing as though made on and as of such date.

 

(b) Performance.
The Company and each other Noteholder shall have performed, satisfied and complied in all material respects with all covenants,
agreements and conditions required by the Transaction Documents to be performed, satisfied or complied with by it at or prior to
the Closing.

 

(c) Listing.
The Common Shares and Warrant Shares (i) shall be designated for quotation or listed on the Trading Market, and (ii) shall not
have been suspended, as of the Closing Date, by the SEC or the Trading Market from trading on the Trading Market.

 

(d) Consents
and Approvals. The Company shall have obtained all governmental, regulatory or third party consents and approvals, if any,
necessary for the issuance of the Securities (including, without limitation, the approval of the Trading Market with respect to
the Common Shares and the Warrant Shares).

 

(e) No Material
Adverse Effect. Between the execution of this Agreement and the Closing, no event or series of events (other than stock price
fluctuations) shall have occurred which reasonably would be expected to have or result in a Material Adverse Effect.

 

    24

     

    

 

(f) Closing
Documents. Each Noteholder shall have received each document required to be delivered to such Noteholder pursuant to Section
2.2(a).

 

(g) Other
Transactions. The conditions to the closing of the Credit Agreements shall have been satisfied or waived pursuant to the terms
of each such Credit Agreement and the transactions contemplated to be consummated at the closing of such Credit Agreements shall
be consummated at the Closing upon terms and conditions reasonably acceptable to the Noteholders.

 

5.2 Conditions Precedent
to the Obligations of the Company. The obligation of the Company to issue the Securities at the Closing is subject to the satisfaction
or waiver by the Company, at or before the Closing, of each of the following conditions:

 

(a) Representations
and Warranties. The representations and warranties of the Noteholders contained herein shall be true and correct in all material
respects as of the date when made and as of the Closing Date as though made on and as of such date.

 

(b) Performance.
The Noteholders shall have performed, satisfied and complied in all material respects with all covenants, agreements and conditions
required by the Transaction Documents to be performed, satisfied or complied with by the Noteholders at or prior to the Closing.

 

(c) Consents
and Approvals. The Company shall have obtained all governmental, regulatory or third party consents and approvals, if any,
necessary for the issuance of the Securities (including, without limitation, the approval of the Trading Market with respect to
the Common Shares and the Warrant Shares).

 

(d) Closing
Documents. Receipt by the Company of each document required to be delivered to it by the Noteholders pursuant to Section
2.2(b).

 

(e) Other
Transactions. The conditions to the closing of the Credit Agreements shall have been satisfied or waived pursuant to the terms
of each such Credit Agreement and the transactions contemplated to be consummated at the closing of such Credit Agreements shall
be consummated at the Closing upon terms and conditions reasonably acceptable to the Noteholders.

 

Article
VI

MISCELLANEOUS

 

6.1 [Intentionally
Omitted]

 

6.2 Fees and Expenses.
Except as expressly set forth in the Transaction Documents to the contrary, each party shall pay the fees and expenses of its advisers,
counsel, accountants and other experts, if any, and all other expenses incurred by such party incident to the negotiation, preparation,
execution, delivery and performance of this Agreement; provided, however, that, notwithstanding the foregoing, at
the Closing, (i) the Company shall reimburse the Noteholders for reasonable fees and expenses paid by such Noteholders to counsel
for the Noteholders in the amount not to exceed $100,000. The Company shall pay and reimburse its transfer agent for fees, stamp
taxes and other taxes and duties levied in connection with the sale and issuance of their applicable Amended Notes.

 

    25

     

    

 

6.3 Entire Agreement.
The Transaction Documents, together with the Exhibits and Schedules thereto, contain the entire understanding of the parties with
respect to the subject matter hereof and supersede all prior agreements and understandings, oral or written, with respect to such
matters, which the parties acknowledge have been merged into such documents, exhibits and schedules. At or after the Closing, and
without further consideration, the Company will execute and deliver to the Noteholders such further documents as may be reasonably
requested in order to give practical effect to the intention of the parties under the Transaction Documents.

 

6.4 Indemnification.
In consideration of each Noteholder’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 Noteholder and all of their affiliates, stockholders, partners, members,
officers, directors, employees and direct or indirect Noteholders 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 (a) any misrepresentation or breach of any representation or warranty made by
the Company in the Transaction Documents or any other certificate, instrument or document contemplated hereby or thereby, (b)
any breach of any covenant, agreement or obligation of the Company contained in the Transaction Documents or any other
certificate, instrument or document contemplated hereby or thereby or (c) any cause of action, suit 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) and arising out of or resulting from (i) the execution, delivery, performance or enforcement of the Transaction
Documents or any other certificate, instrument or document contemplated hereby or thereby, or (ii) the status of such
Noteholder as a Noteholder of the Company pursuant to the transactions contemplated by the Transaction Documents; provided,
however, that no Noteholder will be entitled to indemnification hereunder for any Indemnified Liabilities resulting, as
determined by a non-appealable judgement of a court of competent jurisdiction from (x) such Noteholder’s material
breach of applicable laws, rules or regulations, including, without limitation, any breach by such Noteholder of any federal
or state securities laws, rules or regulations with respect to short sales or other hedging activities or (y) such
Noteholder’s material breach of any covenant, agreement or obligation of such Noteholder contained in the Transaction
Documents or any other certificate, instrument or document contemplated hereby or thereby. 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 that is permissible under applicable law.

 

6.5 Notices.
Any and all notices or other communications or deliveries required or permitted to be provided hereunder shall be in writing and
shall be deemed given and effective on the earliest of (a) the date of transmission, if such notice or communication is delivered
via facsimile or email at the facsimile number or email address specified in this Section prior to 6:30 p.m. (New York City time)
on a Trading Day, (b) the next Trading Day after the date of transmission, if such notice or communication is delivered via facsimile
or email at the facsimile number or email address specified in this Section on a day that is not a Trading Day or later than 6:30
p.m. (New York City time) on any Trading Day, (c) the Trading Day following the date of deposit with a nationally recognized overnight
courier service, or (d) upon actual receipt by the party to whom such notice is required to be given. The addresses, facsimile
numbers and email addresses for such notices and communications are those set forth on the signature pages hereof, or such other
address or facsimile number as may be designated in writing hereafter, in the same manner, by any such Person.

 

    26

     

    

 

6.6 Amendments;
Waivers. No provision of this Agreement may be amended or waived other than by an instrument in writing signed by the Company
and the Required Holders, (and, in the case of Sections 2.2, 3.1, 3.2, 4.1 or 5.1, each affected Noteholder) provided that
any party may give a waiver in writing as to itself. No consideration shall be offered or paid to any Noteholder to amend or consent
to a waiver or modification of any provision of any of this Agreement unless the same consideration also is offered to all of the
Noteholders.

 

6.7 Construction
Headings. This Agreement shall be deemed to be jointly drafted by the Company and the Noteholders and shall not be construed
against any Person as the drafter hereof. The headings of this Agreement are for convenience of reference and shall not form part
of, or affect the interpretation of, this Agreement. Terms used in this Agreement and not defined herein but defined in the other
Transaction Documents shall have the meanings ascribed to such terms on the Closing Date in such other Transaction Documents. Terms
used in this Agreement in the singular have the same meaning in the plural, and vice-versa.

 

6.8 Successors and
Assigns. This Agreement shall be binding upon and inure to the benefit of the parties and their successors and permitted assigns.
The Company may not assign this Agreement or any rights or obligations hereunder without the prior written consent of the Noteholders.
Any Noteholder may assign its rights under this Agreement to any Person to whom such Noteholder assigns or transfers any Amended
Notes, provided (i) such transferor agrees in writing with the transferee or assignee to assign such rights, and a copy of such
agreement is furnished to the Company after such assignment, (ii) the Company is furnished with written notice of (x) the name
and address of such transferee or assignee and (y) the Amended Notes with respect to which such registration rights are being transferred
or assigned, (iii) following such transfer or assignment, the further disposition of such securities by the transferee or assignee
is restricted under the 1933 Act and applicable state securities laws, (iv) such transferee agrees in writing to be bound, with
respect to the transferred Amended Notes, by the provisions hereof that apply to the “Noteholders” and (v) such transfer
shall have been made in accordance with the applicable requirements of this Agreement and with all laws applicable thereto.

 

6.9 No Third-Party
Beneficiaries. This Agreement is intended for the benefit of the parties hereto and their respective successors and permitted
assigns and is not for the benefit of, nor may any provision hereof be enforced by, any other Person.

 

6.10 Governing Law;
Venue; Waiver of Jury Trial. This Agreement shall be construed and enforced in accordance with, and all questions concerning
the construction, validity, interpretation and performance 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 with any transaction contemplated
hereby or discussed herein, and hereby irrevocably waives, and agrees not to assert in any suit, action or proceeding, any claim
that it is not personally subject to the jurisdiction of any such court, that such suit, action or proceeding is brought in an
inconvenient forum or that the venue of such suit, action or proceeding is improper. Nothing contained herein shall be deemed to
limit in any way any right to serve process in any manner permitted by law. In the event that any provision of this Agreement is
invalid or unenforceable under any applicable statute or rule of law, then such provision shall be deemed inoperative to the extent
that it may conflict therewith and shall be deemed modified to conform with such statute or rule of law. Any such provision which
may prove invalid or unenforceable under any law shall not affect the validity or enforceability of any other provision of this
Agreement. THE COMPANY HEREBY IRREVOCABLY WAIVES ANY RIGHT IT MAY HAVE TO, AND AGREES NOT TO REQUEST, A JURY TRIAL FOR THE ADJUDICATION
OF ANY DISPUTE HEREUNDER OR IN CONNECTION WITH OR ARISING OUT OF THIS NOTE OR ANY TRANSACTION CONTEMPLATED HEREBY.

 

    27

     

    

 

6.11 Survival.
The representations and warranties, agreements and covenants contained herein shall survive the Closing until the Maturity Date
(as defined in the Amended Notes). The provisions of Section 6.2 and 6.4 shall survive termination of this Agreement and
repayment of the Amended Notes.

 

6.12 Execution.
This Agreement may be executed in two or more counterparts, all of which when taken together 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, it being
understood that two or more parties need not sign the same counterpart. In the event that any signature is delivered by facsimile
transmission or email attachment, such signature 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 facsimile or email-attached signature page were an
original thereof.

 

6.13 Severability.
If any provision of this Agreement is held to be invalid or unenforceable in any respect, the validity and enforceability of the
remaining terms and provisions of this Agreement shall not in any way be affected or impaired thereby and the parties will attempt
to agree upon a valid and enforceable provision that is a reasonable substitute therefor, and upon so agreeing, shall incorporate
such substitute provision in this Agreement.

 

6.14 Rescission
and Withdrawal Right. Notwithstanding anything to the contrary contained in (and without limiting any similar provisions of)
the Transaction Documents, whenever any Noteholder exercises a right, election, demand or option owed to such Noteholder by the
Company under a Transaction Document and the Company does not timely perform its related obligations within the periods therein
provided, then, prior to the performance by the Company of the Company’s related obligation, such Noteholder may rescind
or withdraw, in its sole discretion from time to time upon written notice to the Company, any relevant notice, demand or election
in whole or in part without prejudice to its future actions and rights.

 

    28

     

    

 

6.15 Replacement
of Securities. If any certificate or instrument evidencing any Securities is mutilated, lost, stolen or destroyed, the Company
shall issue or cause to be issued in exchange and substitution for and upon cancellation thereof, or in lieu of and substitution
therefor, a new certificate or instrument, but only upon receipt of evidence reasonably satisfactory to the Company of such loss,
theft or destruction and the execution by the holder thereof of a customary lost certificate affidavit of that fact and an agreement
to indemnify and hold harmless the Company for any losses in connection therewith. The applicants for a new certificate or instrument
under such circumstances shall also pay any reasonable third-party costs associated with the issuance of such replacement Amended
Note.

 

6.16 Remedies.
In addition to being entitled to exercise all rights provided herein or granted by law, including recovery of damages, each of
the Noteholders and the Company will be entitled to seek specific performance under the Transaction Documents. The parties agree
that monetary damages may not be adequate compensation for any loss incurred by reason of any breach of obligations described in
the foregoing sentence and hereby agrees to waive in any action for specific performance of any such obligation (other than in
connection with any action for temporary restraining order) the defense that a remedy at law would be adequate.

 

6.17 Payment Set
Aside. To the extent that the Company makes a payment or payments to any Noteholder hereunder or any Noteholder enforces or
exercises its 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 by a trustee, receiver or any other person under any law
(including, without limitation, any bankruptcy law, 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.

 

6.18 Adjustments
in Share Numbers and Prices. In the event of any stock split, subdivision, dividend or distribution payable in shares of Common
Stock (or other securities or rights convertible into, or entitling the holder thereof to receive directly or indirectly shares
of Common Stock), combination or other similar recapitalization or event occurring after the date hereof and prior to the Closing,
each reference in any Transaction Document to a number of shares or a price per share shall be amended to appropriately account
for such event.

 

6.19 Independent
Nature of Noteholders’ Obligations and Rights. The obligations of each Noteholder under the Transaction Documents are
several and not joint with the obligations of any other Noteholder, and no Noteholder shall be responsible in any way for the performance
of the obligations of any other Noteholder under any Transaction Document. Nothing contained herein or in any other Transaction
Document, and no action taken by any Noteholder pursuant hereto or thereto, shall be deemed to constitute the Noteholders as, and
the Company acknowledges that the Noteholders 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 Noteholders are in any way acting in concert or as a group or entity
with respect to such obligations or the transactions contemplated by the Transaction Documents or any matters, and the Company
acknowledges that the Noteholders 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 Noteholder to acquire
Securities pursuant to the Transaction Documents has been made by such Noteholder independently of any other Noteholder. Each Noteholder
acknowledges that no other Noteholder has acted as agent for such Noteholder in connection with such Noteholder making its investment
hereunder and that no other Noteholder will be acting as agent of such Noteholder in connection with monitoring such Noteholder’s
investment in the Securities or enforcing its rights under the Transaction Documents. The Company and each Noteholder confirms
that each Noteholder has independently participated with the Company in the negotiation of the transaction contemplated hereby
with the advice of its own counsel and advisors. Each Noteholder 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 Noteholder to be joined as an additional party in any proceeding for such purpose. The use of a
single agreement to effectuate the acquisition of the Securities contemplated hereby was solely in the control of the Company,
not the action or decision of any Noteholder, and was done solely for the convenience of the Company and not because it was required
or requested to do so by any Noteholder. It is expressly understood and agreed that each provision contained in this Agreement
and in each other Transaction Document is between the Company and a Noteholder, solely, and not between the Company and the Noteholders
collectively and not between and among the Noteholders.

 

[signature pages follow]

 

    29

     

    

 

IN WITNESS WHEREOF, the parties
hereto have caused this Senior Secured Note Amendment Agreement to be duly executed by their respective authorized signatories
as of the date first indicated above.

 

	 	PACIFIC ETHANOL, INC.
	 	 
	 	By:	 /s/ Neil M. Koehler
	 	 	Name: Neil M. Koehler
	 	 	Title: President and Chief Executive Officer
	 	 
	 	Address for Notices:
	 	 
	 	400 Capitol Mall, Suite 2060
	 	Sacramento, CA  95814
	 	Facsimile No.:  916-403-2785
	 	Telephone No.: 916-403-2130
	 	Attn:  Christopher W. Wright, Esq.
	 	 
	 	With a copy to:
	 	 
	 	Troutman Sanders LLP
	 	5 Park Plaza, Suite 1400
	 	Irvine, CA 92614-2545
	 	Facsimile No.:  949-622-2739
	 	Telephone No.: 949-622-2710
	 	Attn:  Larry A. Cerutti, Esq.

 

     

     

    

 

	 	NOTEHOLDERS:
	 	 
	 	CWD Summit, LLC,
	 	acting for and on behalf of 
	 	Candlewood Renewable Energy Series I
	 	 	 
	 	By:	/s/ David Koenig
	 	 	Name: David Koenig
	 	 	Title: Authorized Signatory
	 	 	 
	 	Address for Notices:
	 	555 Theodore Fremd Ave.
	 	Suite C303
	 	Rye, NY 10580

 

     

     

    

  

	 	CKP South LLC
	 	 	 
	 	By: 	/s/ [illegible]
	 	 	Name:
	 	 	Title:  
	 	 	 
	 	Address for Notices:
	 	400 South Ave.
	 	New Canaan, CT 06840

 

     

     

    

  

	 	Corrum Capital Alternative Income Fund LP
	 	 	 
	 	By:	 /s/ [illegible]
	 	 	Name:
	 	 	Title:
	 	 	 
	 	Address for Notices:
	 	 
	 	 
	 	 

 

     

     

    

 

	 	CIF-Income Partners (A), LLC
	 	 
	 	By: BlackRock Financial Management, Inc.
	 	Its investment manager
	 	 	 
	 	By: 	/s/ Stephen Kavalich
	 	 	Name: Stephen Kavalich
	 	 	Title: Director
	 	 	 
	 	Address for Notices:
	 	40 E. 52nd St.
	 	New York, NY 10022

 

     

     

    

  

	 	Orange 2015 DisloCredit Fund, L.P. 
	 	 	 
	 	By: BlackRock Financial Management, Inc.
	 	Its investment manager
	 	 	 
	 	By:	 /s/ Stephen Kavalich
	 	 	Name: Stephen Kavalich
	 	 	Title: Director
	 	 	 
	 	Address for Notices:
	 	40 E. 52nd St.
	 	New York, NY 10022

  

     

     

    

  

	 	Sainsbury’s Credit Opportunities Fund, Ltd. 
	 	 	 
	 	By: BlackRock Financial Management, Inc.
	 	Its investment manager
	 	 
	 	By: 	/s/ Stephen Kavalich
	 	 	Name: Stephen Kavalich
	 	 	Title: Director
	 	 	 
	 	Address for Notices:
	 	40 E. 52nd St.
	 	New York, NY 10022

  

     

     

    

 

	 	Co-Investment Income Fund, L.P. -
	 	US Taxable Series
	 	 	 
	 	By: BlackRock Financial Management, Inc.
	 	Its investment manager
	 	 
	 	By: 	/s/ Stephen Kavalich
	 	 	Name: Stephen Kavalich
	 	 	Title: Director
	 	 	 
	 	Address for Notices:
	 	40 E. 52nd St.
	 	New York, NY 10022

 

     

     

    

  

	 	Co-Investment Income Fund, L.P. -
	 	US Tax-Exempt Series
	 	 	 
	 	By: BlackRock Financial Management, Inc.
	 	Its investment manager
	 	 
	 	By: 	/s/ Stephen Kavalich
	 	 	Name: Stephen Kavalich
	 	 	Title: Director
	 	 	 
	 	Address for Notices:
	 	40 E. 52nd St.
	 	New York, NY 10022

 

     

     

    

 

Exhibit A

 

Schedule of Noteholders

 

	Noteholder	 	Aggregate Principal Amount of Existing Notes	 	 	Principal Amount of Amended Note(1)	 	 	Shares	 	 	Warrant Shares	 
	CWD Summit, LLC - acting for and on behalf of Candlewood Renewable Energy Series I	 	$	33,438,114.93	 	 	$	34,094,566.90	 	 	 	2,872,350	 	 	 	2,856,397	 
	CKP South LLC	 	$	1,528,129.21	 	 	$	1,558,129.21	 	 	 	131,267	 	 	 	130,538	 
	Corrum Capital Alternative Income Fund LP	 	$	2,546,882.02	 	 	$	2,596,882.02	 	 	 	218,778	 	 	 	217,563	 
	Orange 2015 DisloCredit Fund, L.P.	 	$	14,440,533.61	 	 	$	14,724,027.97	 	 	 	1,240,449	 	 	 	1,233,559	 
	CIF Income Partners (A) LLC	 	$	9,302,736.19	 	 	$	9,485,366.09	 	 	 	799,110	 	 	 	794,671	 
	Sainsbury’s Credit Opportunities Fund LTD	 	$	1,203,378.03	 	 	$	1,227,002.57	 	 	 	103,371	 	 	 	102,797	 
	Co-Investment Income Fund, L.P. - US Taxable Series	 	$	804,390.48	 	 	$	820,182.15	 	 	 	69,097	 	 	 	68,714	 
	Co-Investment Income Fund, L.P. - US Tax-Exempt Series	 	$	1,121,013.44	 	 	$	1,143,021.00	 	 	 	96,296	 	 	 	95,761	 
	Total	 	$	64,385,177.91	 	 	$	65,649,177.91	 	 	 	5,530,718	 	 	 	5,500,000	 

 

		(1)	As adjusted pursuant to Section 2.2(a)(viii)(2).

  

     

     

    

 

Exhibit B

 

Form of Amended Note

 

[Attached]

 

     

     

    

 

Exhibit C

 

Form of Warrant Agreement

 

[Attached]

 

     

     

    

 

Exhibit D

 

Form of Registration Rights Agreement

 

[Attached]

 

     

     

    

 

Exhibit E

 

Form of Transfer Agent Instructions

 

[Attached]

 

     

     

    

 

[Company letterhead]

 

December 20, 2019

 

VIA E-MAIL

 

American Stock Transfer & Trust Co, LLC

6201 15th Avenue

Brooklyn, New York 11219

Attn: William Torre

 

		Re:	Transfer Agent Instructions

 

Dear Mr. Torre:

 

Reference is made to that certain Senior
Secured Note Amendment Agreement, dated as of December 20, 2019 (the “Agreement”), by and among Pacific Ethanol,
Inc., a Delaware corporation (the “Company”), and the noteholders named therein (collectively, the “Noteholders”),
pursuant to which the Company is issuing to the Noteholders (i) shares of voting common stock of the Company, $0.001 par value
per share (the “Common Stock”), and (ii) the Warrants (as defined in the Agreement), which are exercisable for
shares of Common Stock. The transactions contemplated by the Agreement are scheduled to close on December 20, 2019 (the “Closing”).

 

This letter shall serve as our irrevocable
authorization and direction to you (provided that you are the transfer agent of the Company at such time):

 

		(i)	to issue an aggregate of 5,530,718 shares of Common
Stock (collectively, the “Common Shares”) to the Noteholders and deliver to each Noteholder within five (5)
Business Days (as such term is defined in the Agreement) following the Closing one or more stock certificates evidencing such
number of shares, and to deliver the same at such Noteholder’s address, as set forth opposite such Noteholder’s name
listed on Exhibit A attached hereto; and

 

		(ii)	to issue shares of Common Stock upon the exercise of
the Warrants (the “Warrant Shares”) to or upon the order of a Noteholder or the Company (as the case may be)
from time to time upon delivery to you of a fully completed and executed Exercise Notice or Mandatory Exercise Notice (as the
case may be) in the forms attached hereto as Exhibit B and Exhibit C, respectively.

 

The certificates representing the Common
Shares and Warrant Shares to be issued as described above shall bear the following restrictive legend, as the issuance of stock
has not been registered and we have agreed to use this specific legend language:

 

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.

 

     

     

    

 

You acknowledge and agree that so long
as you have previously received (a) written confirmation from the Company’s legal counsel that either (i) a registration
statement covering resales of the Common Shares or the Warrant Shares has been declared effective by the Securities and Exchange
Commission (the “SEC”) under the Securities Act of 1933, as amended (the “1933 Act”), or
(ii) that sales of the Common Shares and the Warrant Shares may be made in conformity with Rule 144 under the 1933 Act, and (b)
if applicable, a copy of such registration statement, then, as promptly as practicable, you shall issue the certificates representing
the Common Shares and/or the Warrant Shares (as the case may be), and such certificates shall not bear any legend restricting transfer
of the Common Shares or the Warrant Shares (as the case may be) thereby and should not be subject to any stop-transfer restriction.

 

A form of written confirmation from the
Company’s outside legal counsel that a registration statement covering resales of the Common Shares and the Warrant Shares
has been declared effective by the SEC under the 1933 Act is attached hereto as Exhibit D.

 

Please execute this letter in the space
indicated to acknowledge your agreement to act in accordance with these instructions. Should you have any questions concerning
this matter, please contact me at (916) 403-2130.

 

Very truly yours, 

 

Pacific Ethanol, Inc.

  

Christopher W. Wright

Vice President, General Counsel & Secretary

 

     

     

    

 

	 	THE FOREGOING TRANSFER AGENT INSTRUCTIONS ARE ACKNOWLEDGED AND AGREED TO ON
	 	 
	 	this 20th day of December, 2019
	 	 	 	 
	 	American Stock Transfer & Trust Co, LLC
	 	 	 	 
	 	By:	          
	 	 	Name: 	                   
	 	 	Title:	 

 

     

     

    

 

EXHIBIT A

 

Issuance of Common Shares

 

	Noteholder	 	 
Address*
	 	 	Common Shares	 
	CWD Summit, LLC - acting for and on behalf of Candlewood Renewable Energy Series I	 	 	          	 	 	 	2,872,350	 
	CKP South LLC	 	 	 	 	 	 	131,267	 
	Corrum Capital Alternative Income Fund LP	 	 	 	 	 	 	218,778	 
	Orange 2015 DisloCredit Fund, L.P.	 	 	 	 	 	 	1,240,449	 
	CIF Income Partners (A) LLC	 	 	 	 	 	 	799,110	 
	Sainsbury’s Credit Opportunities Fund LTD	 	 	 	 	 	 	103,371	 
	Co-Investment Income Fund, L.P. - US Taxable Series	 	 	 	 	 	 	69,097	 
	Co-Investment Income Fund, L.P. - US Tax-Exempt Series	 	 	 	 	 	 	96,296	 
	Total	 	 	 	 	 	 	5,530,718	 

 

		*	See separate transfer agent spreadsheet and uploaded information.

 

     

     

    

 

EXHIBIT B

 

EXERCISE NOTICE

 

TO BE EXECUTED BY THE REGISTERED HOLDER
TO EXERCISE THIS

 

WARRANT TO PURCHASE COMMON STOCK

  

PACIFIC
ETHANOL, INC.

 

The undersigned holder (the “Holder”)
hereby exercises the right to purchase _________________ shares of Common Stock (“Warrant Shares”) of PACIFIC
ETHANOL, INC., a Delaware corporation (the “Company”), evidenced by the attached Warrant to Purchase
Common Stock (the “Warrant”). Capitalized terms used herein and not otherwise defined shall have the respective
meanings set forth in the Warrant.

 

1. Payment of Exercise
Price. The Holder shall pay the Aggregate Exercise Price in the sum of $___________________ to the Company in accordance with
the terms of the Warrant.

 

2. Delivery of Warrant
Shares. The Company shall deliver to the Holder __________ Warrant Shares in accordance with the terms of the Warrant. Delivery
shall be made to the Holder, or for its benefit, to the following address:

 

_______________________

 

_______________________

 

Date: _______________ __, ______

 

	 	 	 
	Name of Registered Holder	 
	 	 	 	 
	By:	 	 	 
	 	Name:	 	 
	 	Title: 	 	 

 

     

     

    

 

ACKNOWLEDGMENT

 

The Company hereby acknowledges this Exercise
Notice and hereby directs American Stock Transfer & Trust Co., LLC to issue the above indicated number of shares of Common
Stock in accordance with the Transfer Agent Instructions dated ______, 20__ from the Company and acknowledged and agreed to by
American Stock Transfer & Trust Co., LLC.

 

	 	PACIFIC ETHANOL, INC
	 	 	 
	 	By:	 
	 	 	Name:	 
	 	 	Title:	 

 

     

     

    

 

EXHIBIT C

 

MANDATORY EXERCISE NOTICE

 

TO BE EXECUTED BY PACIFIC ETHANOL, INC.
TO CAUSE THE EXERCISE OF THIS

 

WARRANT TO PURCHASE COMMON STOCK

 

Pacific Ethanol, Inc., a Delaware corporation
(the “Company”), hereby exercises its right to require the below-named holder (the “Holder”)
to purchase _________________ shares of Common Stock (“Warrant Shares”) of the Company evidenced by the attached
Warrant to Purchase Common Stock (the “Warrant”). Capitalized terms used herein and not otherwise defined shall
have the respective meanings set forth in the Warrant.

 

1. Payment of Exercise
Price. The Holder shall pay the Aggregate Exercise Price in the sum of $___________________ to the Company in accordance with
the terms of the Warrant.

 

2. Delivery of
Warrant Shares. The Company shall deliver to the Holder __________ Warrant Shares in accordance with the terms of the Warrant.
Delivery shall be made to the Holder, or for its benefit, to the following address: 

 

_______________________

 

_______________________

 

Date: _______________ __, ______

  

	 	 	 	 
	Name of Registered Holder	 
	 	 	 	 
	PACIFIC ETHANOL, INC.	 
	 	 	 	 
	By:	 	 
	 	Name:	 	 
	 	Title:	 	 

  

     

     

    

 

ACKNOWLEDGMENT

 

The Company hereby acknowledges this Mandatory
Exercise Notice and hereby directs American Stock Transfer & Trust Co., LLC to issue the above indicated number of shares of
Common Stock in accordance with the Transfer Agent Instructions dated ______, 20__ from the Company and acknowledged and agreed
to by American Stock Transfer & Trust Co., LLC.

  

	 	PACIFIC ETHANOL, INC.
	 	 	 
	 	By:	 
	 	 	Name:	 
	 	 	Title:	 

  

     

     

    

 

EXHIBIT D

 

FORM OF NOTICE OF EFFECTIVENESS

OF REGISTRATION STATEMENT

 

______________________

______________________

______________________

Attention: _____________

 

		Re:	Pacific Ethanol, Inc.

 

Ladies and Gentlemen:

 

We are counsel to Pacific
Ethanol, Inc., a Delaware corporation (the “Company”), and have represented the Company in connection with that
certain Senior Secured Note Amendment Agreement (the “Note Amendment Agreement”) entered into by and among the
Company and the Holders named therein (collectively, the “Holders”) pursuant to which the Company issued to
the Holders certain shares (“Shares”) of the Company’s common stock, $0.001 par value per share (the ”Common
Stock”) and warrants (“Warrants”) exercisable for shares of Common Stock, and may issue additional
shares of Common Stock (“Additional Common Shares”). Pursuant to the Note Amendment Agreement, the Company also
has entered into a Registration Rights Agreement with the Holders (the “Registration Rights Agreement”) pursuant
to which the Company agreed, among other things, to register the Registrable Securities (as defined in the Registration Rights
Agreement), including the shares of Common Stock issuable pursuant to the terms of the Warrants (“Warrant Shares”),
under the Securities Act of 1933, as amended (the “1933 Act”). In connection with the Company’s obligations
under the Registration Rights Agreement, on ____________ ___, 20__, the Company filed a Registration Statement on Form [S-1] (File
No. 333-_____________) (the “Registration Statement”) with the Securities and Exchange Commission (the “SEC”)
relating to the Registrable Securities which names each of the Holders as a selling security holder thereunder.

 

The names of the Selling Stockholders to
whom this opinion relates and the numbers of Shares that each Selling Stockholder may resell under the Registration Statement are
set forth under the column “Shares to be Offered” in the section of the Registration Statement and Prospectus entitled
“Selling Stockholders” in the column “Shares to be Offered Pursuant to the Registration Statement.” For
purposes of this opinion, we have reviewed a copy of the Registration Statement and Prospectus, and such other and further information
and documents as we have deemed advisable.

 

In connection with the foregoing, we have
examined copies of resolutions of the Board of Directors of the Company, the securities described in the Registration Statement
and such other agreements, instruments and documents as we have deemed relevant or necessary as a basis for the opinions hereinafter
set forth. In making such examination, we have assumed the genuineness of all signatures on all original documents and the conformity
to original documents of all copies submitted to us as conformed, photostat or other copies. As to matters of fact material to
such opinions, we have, when relevant facts were not independently established, relied upon statements and certificates furnished
to us.

 

     

     

    

 

Based upon and subject to the foregoing,
we render the following opinions:

 

1. The Registration Statement has become
effective under the Act, and to the best of our knowledge, no stop order suspending the effectiveness of the Registration Statement
has been issued, and no proceedings for that purpose have been instituted or threatened.

 

2. The Shares are, and upon due issuance
of the Additional Common Shares in accordance with the terms of the Note Amendment Agreement, the Additional Common Shares will
be, and upon due exercise of the Warrants in accordance with their terms including receipt of the consideration therefor, the Warrant
Shares will be, duly and validly issued, fully paid and non-assessable, and not subject to the preemptive rights of any stockholder
of the Company.

 

As with any selling stockholders’
registration statement, the Shares, any Additional Common Shares and the Warrant Shares are restricted securities, but may be sold
pursuant to the Registration Statement. The normal restrictive legend appearing thereto may be removed following the sale of such
securities or the placement in street name of the selling broker in contemplation of imminent sale with the understanding that,
if the sale is not consummated, the certificates will be returned to you for relegending.

 

Notwithstanding the foregoing, we may in
the future advise you as to certain institutional type investors or foreign investors from whose shares the restrictive legend
may be removed prior to placement into street name based on their status.

 

Our opinion shall not apply to resales
occurring during any period that we or the Company may advise you in writing that the Registration Statement is not current. In
such event, no resales of Shares, Additional Common Shares or Warrant Shares by Selling Stockholders shall be effected pursuant
to our opinion until we confirm that our opinion may again be relied upon to effect resales by Selling Stockholders.

 

This opinion is rendered
to American Stock Transfer & Trust Company and is not to be relied upon by any other person. We undertake no responsibility
to update this information to reflect facts occurring after the date hereof. 

 

	 	Very truly yours,
	 	 	 
	 	[ISSUER’S COUNSEL]
	 	 	 
	 	By:	 

  

     

     

    

 

SCHEDULE 3.1(a)

to Senior Secured Note Amendment Agreement

 

 Subsidiaries

 

Kinergy Marketing LLC, an Oregon limited liability company

Pacific Ag Products, LLC, a California limited liability company

Oregon Trail Logistics, LLC, a Delaware limited liability company

Pacific Ethanol Development, LLC, a Delaware limited liability
company

Pacific Ethanol Central, LLC, a Delaware limited liability company

Pacific Aurora, LLC, a Delaware limited liability company*

Pacific Ethanol Aurora East, LLC, a Delaware limited liability company*

Pacific Ethanol Aurora West, LLC, a Delaware limited liability company*

Illinois Corn Processing, LLC, a Delaware limited liability
company

Pacific Ethanol Pekin, LLC, a Delaware limited liability company

Pacific Ethanol Canton, LLC, a Delaware limited liability company

PE Op. Co., a Delaware corporation

Pacific Ethanol West, LLC, a Delaware limited liability company

Pacific Ethanol Columbia, LLC, a Delaware limited liability
company

Pacific Ethanol Madera LLC, a Delaware limited liability company

Pacific Ethanol Magic Valley, LLC, a Delaware limited liability
company

Pacific Ethanol Stockton LLC, a Delaware limited liability company

 

 

		(*)	Pacific Ethanol, Inc. indirectly holds a 73.93% ownership
interest in Pacific Aurora, LLC, which owns Pacific Ethanol Aurora East, LLC and Pacific Ethanol Aurora West, LLC.

 

     

     

    

 

SCHEDULE 3.1(g)

to Senior Secured Note Amendment Agreement

 

SEC Reports; Financial Statements

 

The Company has not timely filed its Current
Report on Form 8-K for December 16, 2019.

 

     

     

    

 

SCHEDULE 3.1(h)

to Senior Secured Note Amendment Agreement

 

No Changes

 

None.

 

     

     

    

 

SCHEDULE 3.1(i)

to Senior Secured Note Amendment Agreement

 

Absence of Litigation

 

Schedule 3.1(s) to the Senior Secured
Note Amendment Agreement is incorporated herein by reference.

 

     

     

    

 

SCHEDULE 3.1(j)

to Senior Secured Note Amendment Agreement

 

Compliance

 

Schedule 3.1(s) to the Senior Secured
Note Amendment Agreement is incorporated herein by reference.

 

     

     

    

  

SCHEDULE 3.1(k)

to Senior Secured Note Amendment Agreement

 

Title to Assets

 

An enhanced property tax assessment and
certain restrictive covenants encumbering the property located at 31470 Avenue 12, Madera, CA 93638 for the benefit of CleanFund
Commercial PACE Capital, Inc. (“CleanFund”) to secure CleanFund’s financing for Pacific Ethanol Madera
LLC in the maximum amount of $10,000,000.

 

Kinergy Marketing LLC’s and Pacific
Ag Products, LLC’s obligations under the Second Amended and Restated Loan and Security Agreement dated August 2, 2017 among
Kinergy Marketing LLC, Pacific Ag. Products, LLC, the parties thereto from time to time as Lenders, Wells Fargo Bank, National
Association and Wells Fargo Capital Finance, LLC, as amended, are secured by a first-priority security interest in all of their
assets.

 

Pacific Ethanol Pekin, LLC’s obligations
under the Credit Agreement dated December 15, 2016 among Pacific Ethanol Pekin, Inc., 1st Farm Credit Services, PCA and CoBank,
ACB, are secured by a first-priority security interest in all of its assets.

 

Illinois Corn Processing, LLC’s obligations
under the Credit Agreement dated September 15, 2017 among Illinois Corn Processing, LLC, Compeer Financial, PCA and CoBank, ACB,
are secured by a first-priority security interest in all of its assets.

 

The Company’s obligations under the
Existing Notes are secured pursuant to a Security Agreement dated December 15, 2016 (as amended) among the Company, Cortland Capital
Market Services LLC and the holders of the Existing Notes.

 

     

     

    

 

SCHEDULE 3.1(n)

to Senior Secured Note Amendment Agreement

 

Listing and Maintenance Requirements

 

On July 17, 2019, the Company received a
letter from the Listing Qualifications Department of the Nasdaq Stock Market (“Nasdaq”) indicating that the closing
bid price of the Company’s common stock for the last 30 consecutive business days did not meet the minimum bid price of $1.00
per share required for continued listing on The Nasdaq Capital Market pursuant to Nasdaq Listing Rule 5550(a)(2). The letter also
indicated that the Company will be provided with a compliance period of 180 calendar days, or until January 13, 2020, in which
to regain compliance pursuant to Nasdaq Listing Rule 5810(c)(3)(A). The letter further provided that if, at any time during the
180-day period, the closing bid price of the Company’s common stock is at least $1.00 for a minimum of ten consecutive business
days, Nasdaq will provide the Company with written confirmation that it has achieved compliance with the minimum bid price requirement.
If the Company does not regain compliance by January 13, 2020, an additional 180 days may be granted to regain compliance if the
Company (i) meets the continued listing requirement for market value of publicly held shares and all other initial listing standards
for The Nasdaq Capital Market (except for the bid price requirement) and (ii) provides written notice of its intention to cure
the deficiency during the second 180-day compliance period.

 

     

     

    

 

SCHEDULE 3.1(q)

to Senior Secured Note Amendment Agreement

 

Patents and Trademarks

 

On May 24, 2013, GS CleanTech Corporation
(“GS CleanTech”), filed a suit in the United States District Court for the Eastern District of California, Sacramento
Division (Case No.: 2:13-CV-01042-JAM-AC), naming the Company as a defendant. On August 29, 2013, the case was transferred to the
United States District Court for the Southern District of Indiana and made part of the pre-existing multi-district litigation involving
GS CleanTech and multiple defendants. The suit alleged infringement of a patent assigned to GS CleanTech by virtue of certain corn
oil separation technology in use at one or more of the ethanol production facilities in which the Company has an interest, including
Pacific Ethanol Stockton LLC (“PE Stockton”), located in Stockton, California. The complaint sought preliminary
and permanent injunctions against the Company, prohibiting future infringement on the patent owned by GS CleanTech and damages
in an unspecified amount adequate to compensate GS CleanTech for the alleged patent infringement, but in any event no less than
a reasonable royalty for the use made of the inventions of the patent, plus attorneys’ fees. The Company answered the complaint,
counterclaimed that the patent claims at issue, as well as the claims in several related patents, are invalid and unenforceable
and that the Company is not infringing. The Company does not itself use any corn oil separation technology and may seek a dismissal
on those grounds.

 

On March 17 and March 18, 2014, GS CleanTech
filed suit naming as defendants two Company subsidiaries: PE Stockton and Pacific Ethanol Magic Valley, LLC (“PE Magic
Valley”) as defendants. The claims were similar to those filed against the Company in May 2013. These two cases were
transferred to the multi-district litigation division in United States District Court for the Southern District of Indiana, where
the case against the Company was pending. Although PE Stockton and PE Magic Valley do separate and market corn oil, the Company,
PE Stockton and PE Magic Valley strongly disagree that either of the subsidiaries use corn oil separation technology that infringes
the patent owned by GS CleanTech. In a January 16, 2015 decision, the District Court for the Southern District of Indiana ruled
in favor of a stipulated motion for partial summary judgment for the Company, PE Stockton and PE Magic Valley finding that all
of the GS CleanTech patents in the suit are invalid and, therefore, not infringed. GS CleanTech has said it will appeal this decision
when the remaining claim in the suit has been decided. The only remaining claim alleged that GS CleanTech inequitably conducted
itself before the United States Patent and Trademark Office when obtaining the patents at issue.

 

A trial in the District Court for the Southern
District of Indiana was conducted in October 2015 on that single issue as well as whether GS CleanTech’s behavior during
prosecution of the patents rendered this an “exceptional case” which would allow the District Court to award the defendants
reimbursement of their attorneys’ fees expended for defense of the case.

 

On September 15, 2016, the District Court
issued an Order finding that GS CleanTech, the inventors and GS CleanTech’s counsel committed inequitable conduct in the
prosecution of the GS CleanTech patents before the United States Patent and Trademark Office. As a result, the District Court issued
a Final Judgment on September 15, 2016 dismissing with prejudice all of GS CleanTech’s cases against the defendants, including
the Company, PE Stockton and PE Magic Valley. The District Court’s ruling of inequitable conduct results in the unenforceability
of the GS CleanTech patents against third parties, and also enables the defendants to pursue reimbursement of their costs and attorneys’
fees from GS CleanTech and its counsel. GS CleanTech subsequently appealed the District Court’s finding that all of the GS
CleanTech patents were invalid and its finding that the inventors and GS CleanTech’s counsel committed inequitable conduct.
The appeal was heard by the Court of Appeals for the Federal Circuit on December 3, 2019, and the Court’s decision is pending.

 

     

     

    

 

SCHEDULE 3.1(s)

to Senior Secured Note Amendment Agreement

 

Licenses and Permits

 

On October 11, 2016, Pacific Ethanol Pekin,
LLC (“PE Pekin”) received a notice from the Illinois EPA (“IEPA”), citing a number of air
quality violations. The notice arises out of self-reported deviations at the Dry Mill at Pekin in early 2016, specifically emissions
from the Thermal Oxidizer (NOx), the CO2 Scrubber (VOM, Acetaldehyde), and the methanator flare. The Dry Mill was shut down in
April 2016 primarily to address these issues, and among other things a new burner control system was installed in the boiler. All
of the cited issues have been resolved except NOx emissions. PE Pekin has submitted an application for a permit modification, within
whose parameters the Dry Mill will be able to operate without violating NOx standards. IEPA has agreed that the NOx issues can
be resolved through the permit modification, and has suspended its enforcement action, pending processing of the application.

 

On January 8, 2018, PE Pekin was sued by
the State of Illinois at the request of the IEPA alleging certain violations of the Company’s waste water discharge permit
and Section 301(a) of the Clean Water Act, 33 U.S.C. § 1311(a). PE Pekin had invited the suit in order to preempt a citizen
suit being prepared by the Sierra Club and Prairie Rivers Network. The suit arises out of self-reported deviations from temperature,
chlorine and ammonia limits in the Company’s National Pollutant Discharge Elimination System (NPDES) Permit. The chlorine
and ammonia exceedances were transitory in nature and are not expected to be a serious issue. The thermal exceedances, however,
were frequent during the summer months. PE Pekin has since obtained the results of a thermal mixing study, which provides the basis
for the company to seek a modification of the Permit relaxing the thermal limits. On August 20, 2018, an agreed interim order was
signed which stays the lawsuit and lays out the pathway to a final settlement of the case. On October 19, 2018, PE Pekin filed
an application for an amendment to its NPDES Permit proposing alternate thermal limits based on the mixing zone study (which was
approved the Bureau of Water's Water Quality Standards Unit by letter dated January 5, 2018). On August 20, 2018, the court entered
an agreed Interim Order which stayed the proceedings. The Interim Order required PE Pekin to submit a proposed amendment to the
facility’s NPDES permit which, if approved by the IEPA, will modify the thermal limits in the permit so as to allow the facility
to operate in compliance with the permit requirements. The order also requires PE Pekin to undertake certain initial remedial actions.
PE Pekin has submitted the proposed permit amendment, which is currently under review by the IEPA.

 

     

     

    

 

On March 13, 2018, the manager of environmental
compliance at the Pekin facility discovered irregularities in the record keeping and reporting at the facility owned by Illinois
Corn Processing, LLC (“ICP”). The discrepancies were discovered during a review of ICP’s records undertaken
by the Pekin environmental manager in connection with a new assignment, namely his taking over for the former environmental manager
at ICP who had resigned the previous week. The irregularities discovered by the manager were reported that day to the Site Manager
and to the General Counsel of the Company. They conferred with outside counsel at Troutman Sanders LLP (“Troutman”)
later that day. In consultation with counsel, the General Counsel decided that ICP should engage independent experts to investigate
the history of record keeping and environmental compliance at ICP. Troutman subsequently retained Ramboll US Corporation on ICP’s
behalf to perform a comprehensive NPDES compliance audit of the ICP facility. Based upon Ramboll’s findings and the observations
of Company management, there appears to have been a pattern of inaccurate and untruthful reporting which could lead to the imposition
of civil penalties, and, if the conduct is found to have been intentional, criminal sanctions. ICP reported what was known to the
US EPA on April 2, 2018 pursuant to US EPA Audit Policy (April 2000) 65 FR 19,618 (04/11/00), formally titled “Incentives
for Self- Policing: Discovery, Disclosure, Correction and Prevention of Violation.” On July 26, ICP submitted letters stating
that corrective measures had been complete regarding all violations reported on April 2. ICP also reported that the Ramboll assessment
had been completed and that further violations had been identified, and that ICP would be reporting these shortly. On July 27,
ICP self-reported additional violations, including 2 categories of potential criminal violations. On January 23, 2019, ICP submitted
its final report on these matters and certified final remediation of the self-reported water permit violations. In the meanwhile,
counsel for ICP has met with the US EPA investigators looking into the potential criminal matters, and were apprised of US EPA’s
plans for further investigation. After interviewing the former ICP employees who were implicated in the falsifying of reports,
US EPA notified ICP on December 16, 2019, that they had closed the criminal investigation with no further action. The decision
does not affect any review by US EPA Region V’s civil enforcement program, although under the circumstances, our counsel
expects that the potential for civil action is low.

 

On October 1 and 4, 2018, the ICP and Pekin
plants, respectively, received violation notices from US EPA citing the plants for a number of Clean Air Act violations. These
were not unexpected as US EPA had previously made Section 114 information requests of both plants. The following violations are
alleged:

 

PE Pekin violations:

1. MON violation at 3 Fiber
Driers

2. MON violation at 4 Germ
Driers

3. MON violation at 2 Gluten
Driers

4. Photochemically reactive
VOM under 35 IAC 215.302

5. Scrubbant Flow at Wet Mill
CO2 Scrubber

6. Failure to control emissions
at Fermentation Tanks (PRVs)

7. Max outlet gas temp, min
scrubbant flow, min NaHSO4 for CO2 Scrubber

8. Failure to establish differential
pressure operating range for CO2 Scubber

9. Failure to provide scrubbant
flow and gas temp for Yeast Plant Scrubber

10. Failure to demonstrate
compliance for Yeast Plant Scrubber

 

ICP violations:

1. Failure to comply with the
MON

2. Failure to include excursion
and corrective action in semi-annual report

3. Failure to maintain corrective
action records for temp excursions

 

“MON” = Miscellaneous Organic NESHAP

“NESHAP = National Emission Standards for Hazardous
Air Pollutants

 

A tolling agreement was put in place to
allow for PE Pekin, ICP and US EPA to negotiate a resolution of the alleged violations. PE Pekin and counsel have met with US EPA
on a number of occasions to discuss the applicability of the MON regulations to the fiber, germ and gluten driers and the Pekin
facility. It has become clear that Region 5 of US EPA is seeking to extend the applicability of the MON by implementing a new,
aggressive interpretation of the MON rules. The thrust is to bring the driers within the MON regime, with the possible implication
that PE Pekin may be required to put emissions controls on the driers, depending on the classification of the driers as emission
sources. At a conference with US EPA on October 4, 2019, PE Pekin offered to perform updated stack testing to determine the classification
of driers, and US EPA agreed to that approach. The tolling agreement has been extended to June 30, 2020, to allow for stack testing
and further discussions.

 

Our counsel has given us an estimate of
the financial exposure for fines and penalties in this matter ranging from a worst case of $1,250,000 to a best case of $387,000,
with a most likely case of $537,000. This estimate is based on guidelines published by US EPA.

 

     

     

    

 

SCHEDULE 3.1(x)

to Senior Secured Note Amendment Agreement

 

 Indebtedness

 

None.

 

     

     

    

 

SCHEDULE 3.1(y)

to Senior Secured Note Amendment Agreement

 

Employee Relations

 

Pacific Ethanol Pekin, LLC is party to an
Agreement with the United Steel, Paper and Forestry, Rubber, Manufacturing, Energy, Allied Industry and Service Workers International
Union Loan on behalf of Local 7-662, dated November 1, 2018, expiring October 31, 2022, covering the production employees at its
Pekin facility.

 

Illinois Corn Processing, LLC is party to
an Agreement with the United Food & Commercial Workers International Union, affiliated with the AFL-CIO & CLC, Distillery,
Wine and Allied Workers Division, Local #4D, dated October 31, 2016, expiring October 31, 2021, covering the production employees
at its ICP facility.

 

     

     

    

 

SCHEDULE 3.1(aa)

to Senior Secured Note Amendment Agreement

 

Environmental
Laws

 

Schedule 3.1(s) to the Senior Secured
Note Amendment Agreement is incorporated herein by reference.

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