Document:

Exhibit 10.1

 

PURCHASE AGREEMENT

 

 

THIS PURCHASE AGREEMENT,
dated as of June 3, 2014, is entered into by and among Solar Wind Energy Tower, Inc., a Nevada corporation (the "Company"),
and JDF Capital Inc. (the "Purchaser").

 

WITNESSETH:

 

WHEREAS, the Company
and the Purchaser are executing and delivering this Agreement in accordance with and in reliance upon the exemption from securities
registration for offers and sales to accredited investors afforded, inter alia, by Rule 506 under Regulation D ("Regulation
D") as promulgated by the United States Securities and Exchange Commission (the "SEC") under the Securities Act
of 1933, as amended (the "1933 Act"), and/or Section 4(2) of the 1933 Act; and

 

WHEREAS, the Purchaser
wishes to purchase a 10% Convertible Promissory Note of the Company (the "Note"), subject to and upon the terms and conditions
of this Agreement and acceptance of this Agreement by the Company, on the terms and conditions referred to herein.

 

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

 

1.AGREEMENT
TO PURCHASE; PURCHASE PRICE.

 

a.Purchase.

 

(i)Subject to the
terms and conditions of this Agreement and the other Transaction Documents, the Purchaser hereby agrees to purchase a Note in the
aggregate amount of $885,000 (the "Purchase Amount"), which Note shall be funded on the Closing Date as described therein.

 

(ii)The Note referred
to herein shall be in the form of Annex I annexed hereto.

 

(iii)In consideration
for the Purchaser agreeing to Purchase the Note, the Company agrees to issue to the Purchaser the Warrants (as defined herein)
in the form of Annex II hereto. Additional provisions relating to the Warrants are provided below.

 

(iv)The purchase
of the Note and the issuance of the Warrants by the Purchaser and the other transactions contemplated hereby are sometimes referred
to herein and in the other Transaction Documents as the purchase and sale of the Securities (as defined below), and are referred
to collectively as the "Transactions".

 

(v)Upon the effectiveness
of the Registration Statement (as defined herein) as required pursuant to Section 9, the Purchaser hereby agrees to fund the second
tranche of the Note in the Purchase Amount of $330,000, to consist of a cash payment of $300,000, and 10% pre-paid interest. The
additional Note funding will occur within 15 business days of effectiveness of the Registration Statement.

 

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b.Certain Definitions.As
used herein, each of the following terms has the meaning set forth below, unless the context otherwise requires:

 

"Affiliate"
means, with respect to a specific Person referred to in the relevant provision, another Person who or which controls or is controlled
by or is under common control with such specified Person.

 

"Certificate"
means the original signed Note duly executed by the Company.

 

"Closing Date"
means the date of the closing of the issuance of Note.

 

"Common
Stock Equivalents" means any securities of the Company or the Subsidiaries which would entitle the holder thereof to
acquire at any time Common Stock, including without limitation, any debt, preferred stock, rights, options, warrants or other instrument
that is at any time convertible into or exchangeable for, or otherwise entitles the holder thereof to receive, Common Stock.

 

"Company Control
Person" means each director, executive officer, promoter, and such other Persons as may be deemed in control of the Company
pursuant to Rule 405 under the 1933 Act or Section 20 of the 1934 Act (as defined below).

 

"Conversion Shares"
means shares of Common Stock underlying and issuable upon conversions of the Note funded herein and to be funded pursuant to the
second tranche in Section 1a.(v).

 

"Exchange
Act" means the Securities Exchange Act of 1934, as amended.

 

"Holder" means
the Person holding the relevant Securities at the relevant time.

 

"Last Audited Date"
means December 31, 2013.

 

"Purchaser Control
Person" means each director, executive officer, promoter, and such other Persons as may be deemed in control of the Purchaser
pursuant to Rule 405 under the 1933 Act or Section 20 of the 1934 Act.

 

"Material Adverse
Effect" means an event or combination of events, which individually or in the aggregate, would reasonably be expected to (w)
adversely affect the legality, validity or enforceability of the Securities or any of the Transaction Documents, (x) have or result
in a material adverse effect on the results of operations, assets, prospects, or condition (financial or otherwise) of the Company
and its subsidiaries, taken as a whole, (y) adversely impair the Company's ability to perform fully on a timely basis its obligations
under any of the Transaction Documents or the transactions contemplated thereby, or (z) materially and adversely affect the value
of the rights granted to the Purchaser in the Transaction Documents.

 

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"Person" means
any living person or any entity, such as, but not necessarily limited to, a corporation, partnership or trust.

 

"Principal Trading
Market" means the Over the Counter Bulletin Board or such other market on which the Common Stock is principally traded at
the relevant time.

 

"Securities"
means the Note, the Conversion Shares, the Warrants and the Warrant Shares, and any shares of common stock of the Company that
may be issued to the Purchaser in connection with any other agreements between the parties.

 

"Shares" means
the shares of representing any or all of the Conversion Shares.

 

"State of Incorporation"
means Nevada.

 

"Subsidiary"
means any subsidiary of the Company.

 

"Trading Day"
means any day during which the Principal Trading Market shall be open for business.

 

"Transfer Agent"
means, at any time, the transfer agent for the Company’s Common Stock.

 

"Transaction Documents"
means this Purchase Agreement and the Note, and includes all ancillary documents referred to in those agreements.

 

"Warrants"
means, collectively, share purchase warrants entitling the Purchaser to acquire 15,750,000 Shares of the Company's common stock,
of which 8,750,000 Warrants shall be exercisable at the price of $0.04 per Warrant Share for a period of 90 days, and 7,000,000
Warrants shall be exercisable at the price of $0.05 for a period of 150 days, from the effective date of the Registration Statement
(as defined herein).

 

"Warrant Shares"
means shares of Common Stock underlying the Warrants.

 

c.Form of Payment;
Delivery of Certificates.

 

(i)The Purchaser
shall pay the Purchase Amount payable under the Note by delivering immediately available good funds in United States Dollars to
the Company on the applicable Closing Date.

 

(ii)On the applicable
Closing Date, the Company shall deliver the Note and Warrants, duly executed on behalf of the Company to the Purchaser.

 

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(iii)By signing this
Agreement, each of the Purchaser and the Company agrees to all of the terms and conditions of the Transaction Documents, all of
the provisions of which are incorporated herein by this reference as if set forth in full.

 

d.Method of Payment.
Payment of the Purchase Amount shall be made by wire transfer of funds to:

 

Solar Wind Energy Tower Inc.

RTE: 061000104

ACCT: 1000158813476

Sun Trust Bank

2122 Generals Hwy

Annapolis, MD 21401

 

 

2. PURCHASER REPRESENTATIONS,
WARRANTIES, ETC.; ACCESS TO INFORMATION; INDEPENDENT INVESTIGATION.

 

The Purchaser represents
and warrants to, and covenants and agrees with, the Company as follows:

 

a.Without
limiting Purchaser's right to sell the Securities pursuant to an effective registration statement or otherwise in compliance with
the 1933 Act, the Purchaser is purchasing the Securities for its own account for investment only and not with a view towards the
public sale or distribution thereof and not with a view to or for sale in connection with any distribution thereof.

 

b.The Purchaser
is (i) an "accredited investor" as that term is defined in Rule 501 of the General Rules and Regulations under the 1933
Act by reason of Rule 501(a)(3), (ii) experienced in making investments of the kind described in this Agreement and the related
documents, (iii) able, by reason of the business and financial experience of its officers (if an entity) and professional advisors
(who are not affiliated with or compensated in any way by the Company or any of its Affiliates or selling agents), to protect its
own interests in connection with the transactions described in this Agreement, and the related documents, and to evaluate the merits
and risks of an investment in the Securities, and (iv) able to afford the entire loss of its investment in the Securities.

 

c.All subsequent
offers and sales of the Securities by the Purchaser shall be made pursuant to registration of the relevant Securities under the
1933 Act or pursuant to an exemption from registration.

 

d.The Purchaser
understands that the Securities are being offered and sold to it in reliance on specific exemptions from the registration requirements
of the 1933 Act and state securities laws and that the Company is relying upon the truth and accuracy of, and the Purchaser's compliance
with, the representations, warranties, agreements, acknowledgments and understandings of the Purchaser set forth herein in order
to determine the availability of such exemptions and the eligibility of the Purchaser to acquire the Securities.

 

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e.The Purchaser
and its advisors, if any, have been furnished with or have been given access to all materials relating to the business, finances
and operations of the Company and materials relating to the offer and sale of the Securities which have been requested by the Purchaser,
including those set forth on in any annex attached hereto. The Purchaser and its advisors, if any, have been afforded the opportunity
to ask questions of the Company and its management and have received complete and satisfactory answers to any such inquiries. Without
limiting the generality of the foregoing, the Purchaser has also had the opportunity to obtain and to review the Company's filings
on EDGAR (collectively, the "Company's SEC Documents").

 

f.The Purchaser
understands that its investment in the Securities involves a high degree of risk.

 

g.The Purchaser
hereby represents that, in connection with its purchase of the Securities, it has not relied on any statement or representation
by the Company or any of its officers, directors and employees or any of their respective attorneys or agents, except as specifically
set forth herein.

 

h.The Purchaser
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.

 

i.This Agreement
and the other Transaction Documents to which the Purchaser is a party, and the transactions contemplated thereby, have been duly
and validly authorized, executed and delivered on behalf of the Purchaser and are valid and binding agreements of the Purchaser
enforceable in accordance with their respective terms, subject as to enforceability to general principles of equity and to bankruptcy,
insolvency, moratorium and other similar laws affecting the enforcement of creditors' rights generally.

 

3.COMPANY REPRESENTATIONS,
ETC.  The Company represents and warrants to the Purchaser as of the date hereof and as of the Closing Date.

 

a.Rights of Others
Affecting the Transactions. There are no preemptive rights of any shareholder of the Company, as such, to acquire the Note,
or any shares of the Company’s common stock that may be issued to the Purchaser in connection with any other agreements between
the parties, in the event such shares are issued. No party other than a Purchaser has a currently exercisable right of first refusal
which would be applicable to any or all of the transactions contemplated by the Transaction Documents.

 

b.Status.
The Company is a corporation duly organized, validly existing and in good standing under the laws of the State of Incorporation
and has the requisite corporate power to own its properties and to carry on its business as now being conducted. The Company is
duly qualified as a foreign corporation to do business and is in good standing in each jurisdiction where the nature of the business
conducted or property owned by it makes such qualification necessary, other than those jurisdictions in which the failure to so
qualify would not have or result in a Material Adverse Effect. The Company has registered its stock and is obligated to file reports
pursuant to Section 12 or Section 15(d) of the Securities Exchange Act of 1934, as amended (the "1934 Act"). The Common
Stock is, or immediately following the Closing Date will be, quoted on the Principal Trading Market. The Company has received no
notice, either oral or written, with respect to the continued eligibility of the Common Stock for such quotation on the Principal
Trading Market, and the Company has maintained all requirements on its part for the continuation of such quotation.

 

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c.Authorized Shares.

 

(i)The
authorized capital stock of the Company consists of 900,000,000 shares of Common Stock, $0.0001 par value, of which 503,426,537
shares are outstanding as of the date hereof.

 

(ii)The Company has
sufficient authorized and unissued shares of Common Stock as may be necessary to effect the issuance of the Shares on the Closing
Date.

 

(iii)As of the Closing
Date, the Shares shall have been duly authorized by all necessary corporate action on the part of the Company, and, when issued
pursuant to the relevant provisions of the Transaction Documents, in each case in accordance with their respective terms, will
be duly and validly issued, fully paid and non-assessable and will not subject the Holder thereof to personal liability by reason
of being such Holder.

 

d.Transaction
Documents and Stock. This Agreement and each of the other Transaction Documents, and the transactions contemplated thereby,
have been duly and validly authorized by the Company, this Agreement has been duly executed and delivered by the Company and this
Agreement is, and the Note and each of the other Transaction Documents, when executed and delivered by the Company, will be, valid
and binding agreements of the Company enforceable in accordance with their respective terms, subject as to enforceability to general
principles of equity and to bankruptcy, insolvency, moratorium, and other similar laws affecting the enforcement of creditors'
rights generally.

 

e.Non-contravention.
The execution and delivery of this Agreement and each of the other Transaction Documents by the Company, the issuance of the
Securities, and the consummation by the Company of the other transactions contemplated by this Agreement, each of the Notes and
the other Transaction Documents do not and will not conflict with or result in a breach by the Company of any of the terms or provisions
of, or constitute a default under (i) the certificate of incorporation or by-laws of the Company, each as currently in effect,
(ii) any indenture, mortgage, deed of trust, or other material agreement or instrument to which the Company is a party or by which
it or any of its properties or assets are bound, including any listing agreement for the Common Stock except as herein set forth,
or (iii) to its knowledge, any existing applicable law, rule, or regulation or any applicable decree, judgment, or order of any
court, United States federal or state regulatory body, administrative agency, or other governmental body having jurisdiction over
the Company or any of its properties or assets, except such conflict, breach or default which would not have or result in a Material
Adverse Effect.

 

f.Approvals.
No authorization, approval or consent of any court, governmental body, regulatory agency, self-regulatory organization, or stock
exchange or market or the shareholders of the Company is required to be obtained by the Company for the issuance and sale of the
Securities to the Purchaser as contemplated by this Agreement, except such authorizations, approvals and consents that have been
obtained.

 

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g.Filings.
None of the Company’s SEC Documents contained, at the time they were filed, any untrue statement of a material fact or omitted
to state any material fact required to be stated therein or necessary to make the statements made therein in light of the circumstances
under which they were made, not misleading.

 

h.Absence of Certain
Changes. Since the Last Audited Date, there has been no material adverse change and no Material Adverse Effect, except as disclosed
in the Company’s SEC Documents. Since the Last Audited Date, except as provided in the Company’s SEC Documents, the
Company has not (i) incurred or become subject to any material liabilities (absolute or contingent) except liabilities incurred
in the ordinary course of business consistent with past practices; (ii) discharged or satisfied any material lien or encumbrance
or paid any material obligation or liability (absolute or contingent), other than current liabilities paid in the ordinary course
of business consistent with past practices; (iii) declared or made any payment or distribution of cash or other property to shareholders
with respect to its capital stock, or purchased or redeemed, or made any agreements to purchase or redeem, any shares of its capital
stock; (iv) sold, assigned or transferred any other tangible assets, or canceled any debts owed to the Company by any third party
or claims of the Company against any third party, except in the ordinary course of business consistent with past practices; (v)
waived any rights of material value, whether or not in the ordinary course of business, or suffered the loss of any material amount
of existing business; (vi) made any increases in employee compensation, except in the ordinary course of business consistent with
past practices; or (vii) experienced any material problems with labor or management in connection with the terms and conditions
of their employment.

 

i.Full Disclosure.
To the best of the Company’s knowledge, there is no fact known to the Company (other than general economic conditions known
to the public generally or as disclosed in the Company’s SEC Documents) that has not been disclosed in writing to the Purchaser
that would reasonably be expected to have or result in a Material Adverse Effect.

 

j.Absence of Litigation.
Except as disclosed in the SEC Reports, there is no action, suit, proceeding, inquiry or investigation before or by any court,
public board or body pending or, to the knowledge of the Company, threatened against or affecting the Company before or by any
governmental authority or nongovernmental department, commission, board, bureau, agency or instrumentality or any other person,
wherein an unfavorable decision, ruling or finding would have a Material Adverse Effect or which would adversely affect the validity
or enforceability of, or the authority or ability of the Company to perform its obligations under, any of the Transaction Documents.
The Company is not aware of any valid basis for any such claim that (either individually or in the aggregate with all other such
events and circumstances) could reasonably be expected to have a Material Adverse Effect. There are no outstanding or unsatisfied
judgments, orders, decrees, writs, injunctions or stipulations to which the Company is a party or by which it or any of its properties
is bound, that involve the transaction contemplated herein or that, alone or in the aggregate, could reasonably be expect to have
a Material Adverse Effect.

 

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k.Absence of Events
of Default. Except as set forth in Section 3(e) and 3(g) hereof, (i) neither the Company nor any of its subsidiaries is in
default in the performance or observance of any material obligation, agreement, covenant or condition contained in any material
indenture, mortgage, deed of trust or other material agreement to which it is a party or by which its property is bound, and (ii)
no Event of Default (or its equivalent term), as defined in the respective agreement to which the Company or its subsidiary is
a party, and no event which, with the giving of notice or the passage of time or both, would become an Event of Default (or its
equivalent term) (as so defined in such agreement), has occurred and is continuing, which would have a Material Adverse Effect.

 

l.No Undisclosed
Liabilities or Events. To the best of the Company’s knowledge, the Company has no liabilities or obligations other than
those disclosed in the Transaction Documents or the Company's SEC Documents or those incurred in the ordinary course of the Company's
business since the Last Audited Date, or which individually or in the aggregate, do not or would not have a Material Adverse Effect.
No event or circumstances has occurred or exists with respect to the Company or its properties, business, operations, condition
(financial or otherwise), or results of operations, which, under applicable law, rule or regulation, requires public disclosure
or announcement prior to the date hereof by the Company but which has not been so publicly announced or disclosed. There are no
proposals currently under consideration or currently anticipated to be under consideration by the Board of Directors or the executive
officers of the Company which proposal would (x) change the articles or certificate of incorporation or other charter document
or by-laws of the Company, each as currently in effect, with or without shareholder approval, which change would reduce or otherwise
adversely affect the rights and powers of the shareholders of the Common Stock or (y) materially or substantially change the business,
assets or capital of the Company, including its interests in subsidiaries.

 

m.No Integrated
Offering. Neither the Company nor any of its Affiliates nor any Person acting on its or their behalf has, directly or indirectly,
at any time since May 1, 2013, made any offer or sales of any security or solicited any offers to buy any security under circumstances
that would eliminate the availability of the exemption from registration under Regulation D in connection with the offer and sale
of the Securities as contemplated hereby.

 

n.Dilution.
Any shares of the Company’s common stock issued to the Purchaser in connection with any agreements between the parties hereto,
in the event such shares are issued may have a dilutive effect on the ownership interests of the other shareholders (and Persons
having the right to become shareholders) of the Company. The Company's executive officers and directors have studied and fully
understand the nature of the Securities being sold hereby and recognize that they have such a potential dilutive effect. The board
of directors of the Company has concluded, in its good faith business judgment, that such issuance is in the best interests of
the Company.

 

o.Confirmation.
The Company confirms that all statements of the Company contained herein shall survive acceptance of this Agreement by the Purchaser.
The Company agrees that, if any events occur or circumstances exist prior to the Closing Date or the release of the Purchase Amount
to the Company which would make any of the Company’s representations, warranties, agreements or other information set forth
herein materially untrue or materially inaccurate as of such date, the Company shall immediately notify the Purchaser (directly
or through its counsel, if any) in writing prior to such date of such fact, specifying which representation, warranty or covenant
is affected and the reasons therefor.

 

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p.Authorization;
Enforcement. The Company has the requisite corporate power and authority to enter into and to consummate the transactions contemplated
by each of the Transaction Documents and otherwise to carry out its obligations thereunder. The execution and delivery of each
of the Transaction Documents by the Company and the consummation by it of the transactions contemplated thereby have been duly
authorized by all necessary action on the part of the Company and no further action is required by the Company in connection therewith.
Each Transaction Agreement has been (or upon delivery will have been) duly executed by the Company and, 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 (i) as limited by applicable bankruptcy, insolvency, reorganization, moratorium and other laws of general
application affecting enforcement of creditors’ rights generally and (ii) as limited by laws relating to the availability
of specific performance, injunctive relief or other equitable remedies.

 

q. SEC
Reports; Financial Statements. Other than as previously disclosed to the Purchaser,
the Company has filed all reports required to be filed by it under the Exchange Act, including pursuant to Section 13(a) or 15(d)
thereof, for the two years preceding the date hereof (or such shorter period as the Company was required by law to file such material)
(the foregoing materials, including the exhibits thereto, being collectively referred to herein as the "SEC Reports")
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. As of their respective dates, the SEC Reports complied in all material respects with the requirements
of the Exchange Act and the rules and regulations of the Commission promulgated thereunder, and none of the SEC Reports, when filed,
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 light of the circumstances under which they were made, not misleading. The financial
statements of the Company comply in all material respects with applicable accounting requirements and the rules and regulations
of the Commission 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 or the notes thereto and except that unaudited financial statements
may not contain all footnotes required by GAAP, and fairly present in all material respects the 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, immaterial, year-end audit adjustments.

 

r.Sarbanes-Oxley;
Internal Accounting Controls. Except as disclosed in the SEC Reports , the Company is in material compliance with all provisions
of the Sarbanes-Oxley Act of 2002 which are applicable to it as of the Closing Date. The Company and the 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 GAAP 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. The Company has established disclosure
controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the Company and designed such disclosure
controls and procedures to ensure that material information relating to the Company, including its Subsidiaries, is made known
to the certifying officers by others within those entities, particularly during the period in which the Company's most recently
filed periodic report under the Exchange Act, as the case may be, is being prepared. The Company's certifying officers have evaluated
the effectiveness of the Company's controls and procedures as of the date prior to the filing date of the most recently filed periodic
report under the Exchange Act (such date, the "Evaluation Date"). The Company presented in its most recently filed
periodic report under the Exchange Act the conclusions of the certifying officers about the effectiveness of the disclosure controls
and procedures based on their evaluations as of the Evaluation Date. Since the Evaluation Date, there have been no significant
changes in the Company's internal controls (as such term is defined in Item 307(b) of Regulation S-K under the Exchange Act) or,
to the Company's knowledge, in other factors that could significantly affect the Company's internal controls.

 

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s.Tax Status.
Except for matters that would not, individually or in the aggregate, have or reasonably be expected to result in a Material Adverse
Effect, the Company has no knowledge of a tax deficiency which has been asserted or threatened against the Company or any Subsidiary.

 

t.No Disagreements
with Accountants and Lawyers. There are no disagreements of any kind presently existing, or reasonably anticipated by the Company
to arise, between the accountants and lawyers formerly or presently employed by the Company and the Company is current with respect
to any fees owed to its accountants and lawyers. By making this representation the Company does not, in any manner, waive the attorney/client
privilege or the confidentiality of the communications between the Company and its lawyers.

 

4.CERTAIN COVENANTS
AND ACKNOWLEDGMENTS.

 

a.Transfer Restrictions.
The Purchaser acknowledges that (1) the Securities have not been and are not being registered under the provisions of the 1933
Act and, the Shares have not been and are not being registered under the 1933 Act, and may not be transferred unless (A) subsequently
registered thereunder or (B) the Purchaser shall have delivered to the Company an opinion of counsel, reasonably satisfactory in
form, scope and substance to the Company, to the effect that the Securities to be sold or transferred may be sold or transferred
pursuant to an exemption from such registration; (2) any sale of the Securities made in reliance on Rule 144 promulgated under
the 1933 Act ("Rule 144") may be made only in accordance with the terms of said Rule and further, if said Rule is not
applicable, any resale of such Securities under circumstances in which the seller, or the Person through whom the sale is made,
may be deemed to be an underwriter, as that term is used in the 1933 Act, may require compliance with some other exemption under
the 1933 Act or the rules and regulations of the SEC thereunder; and (3) neither the Company nor any other Person is under any
obligation to register the Securities under the 1933 Act or to comply with the terms and conditions of any exemption thereunder.

 

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b.Restrictive
Legend. The Purchaser acknowledges and agrees that the certificates and other instruments representing any of the Securities
shall bear a restrictive legend in substantially the following form (and a stop-transfer order may be placed against transfer of
any such Securities):

 

"THESE SECURITIES HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR THE SECURITIES LAWS OF ANY STATE AND MAY NOT BE SOLD OR OFFERED FOR
SALE IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES OR AN OPINION OF COUNSEL OR OTHER EVIDENCE ACCEPTABLE
TO THE COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED."

 

c.Filings.
The Company undertakes and agrees to make all necessary filings in connection with the sale of the Securities to the Purchaser
under any United States laws and regulations applicable to the Company, or by any domestic securities exchange or trading market,
and to provide a copy thereof to the Purchaser promptly after such filing.

 

d.Reporting Status.
So long as the Purchaser beneficially owns any of the Securities, the Company shall file all reports required to be filed with
the SEC pursuant to Section 13 or 15(d) of the 1934 Act, shall take all reasonable action under its control to ensure that adequate
current public information with respect to the Company, as required in accordance with Rule 144(c)(2) of the 1933 Act, is publicly
available, and 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 permit such termination. The Company will take all reasonable action under its control
to maintain the continued listing and quotation and trading of its Common Stock on the Principal Trading Market or a listing on
the NASDAQ/Small Cap or National Markets and, to the extent applicable to it, will comply in all material respects with the Company’s
reporting, filing and other obligations under the by-laws or rules of the Principal Trading Market and/or the National Association
of Securities Dealers, Inc., as the case may be, applicable to it for so long as the Purchaser beneficially owns any of the Securities.

 

e.Use of
Proceeds. The Company will use the proceeds received hereunder (excluding amounts paid by the Company for legal fees in connection
with the sale of the Securities) (1) for payment of currently outstanding convertible debt, and (2) the balance for working capital.

 

f. Warrant.
The Company agrees to issue the Warrants to the Purchaser on the Closing Date. The form of Warrant is provided in Annex II
annexed hereto, the terms of which are incorporated herein by reference.

 

g.Publicity, Filings,
Releases, Etc. Each of the parties agrees that it will not disseminate any information relating to the Transaction Documents
or the transactions contemplated thereby, including issuing any press releases, holding any press conferences or other forums,
or filing any reports (collectively, "Publicity"), without giving the other party reasonable advance notice and an opportunity
to comment on the contents thereof. Neither party will include in any such Publicity any statement or statements or other material
to which the other party reasonably objects, unless in the reasonable opinion of counsel to the party proposing such statement,
such statement is legally required to be included. In furtherance of the foregoing, the Company will provide to the Purchaser drafts
of the applicable text of the first filing of a Current Report on Form 8-K or a Quarterly or Annual Report on Form 10-Q or 10-K
intended to be made with the SEC which refers to the Transaction Documents or the transactions contemplated thereby as soon as
practicable (but at least two (2) Trading Days before such filing will be made) will not include in such filing any statement or
statements or other material to which the other party reasonably objects, unless in the reasonable opinion of counsel to the party
proposing such statement, such statement is legally required to be included. Notwithstanding the foregoing, each of the parties
hereby consents to the inclusion of the text of the Transaction Documents in filings made with the SEC as well as any descriptive
text accompanying or part of such filing which is accurate and reasonably determined by the Company’s counsel to be legally
required. Notwithstanding, but subject to, the foregoing provisions of this Section 4(i), the Company will, after the Closing Date,
promptly file a Current Report on Form 8-K or, if appropriate, a quarterly or annual report on the appropriate form, referring
to the transactions contemplated by the Transaction Documents.

 

    	Page 11

    	 

    

 

5.TRANSFER AGENT
INSTRUCTIONS.

 

a.The Company
warrants that, with respect to the Securities, other than the stop transfer instructions to give effect to Section 4(a) hereof,
it will give its transfer agent no instructions inconsistent with instructions to issue the Shares to the Holder as contemplated
in the Transaction Documents. Nothing in this Section shall affect in any way the Purchaser's obligations and agreement to comply
with all applicable securities laws upon resale of the Securities. If the Purchaser provides the Company with an opinion of counsel
reasonably satisfactory to the Company that registration of a resale by the Purchaser of any of the Securities in accordance with
clause (1)(B) of Section 4(a) of this Agreement is not required under the 1933 Act, the Company shall (except as provided in clause
(2) of Section 4(a) of this Agreement) permit the transfer or issue of the Shares represented by one or more certificates for Common
Stock without legend (or where applicable, by electronic registration) in such name and in such denominations as specified by the
Purchaser.

 

b.The Company
will authorize the Transfer Agent to give information relating to the Company directly to the Holder or the Holder’s representatives
upon the request of the Holder or any such representative, to the extent such information relates to (i) the status of shares of
Common Stock issued or claimed to be issued to the Holder in connection with a Notice of Exercise, or (ii) the aggregate number
of outstanding shares of Common Stock of all shareholders (as a group, and not individually) as of a current or other specified
date. At the request of the Holder, the Company will provide the Holder with a copy of the authorization so given to the Transfer
Agent.

 

6.CLOSING DATE.

 

a. The respective
Closing Date shall occur as indicated in Section 1(a)(1) after each of the conditions contemplated by Sections 7 and 8 hereof shall
have either been satisfied or been waived by the party in whose favor such conditions run.

 

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b.The closing
of the Transactions shall occur on the respective Closing Date at the offices of the Purchaser and shall take place no later than
3:00 P.M., PST, on such day or such other time as is mutually agreed upon by the Company and the Purchaser.

 

7.CONDITIONS TO
THE COMPANY'S OBLIGATION TO SELL.

 

The Purchaser understands
that the Company's obligation to sell the Note to the Purchaser pursuant to this Agreement on the Closing Date is conditioned upon:

 

a.The execution
and delivery of this Agreement by the Purchaser; and

 

b.There shall
not be in effect any law, rule or regulation prohibiting or restricting the transactions contemplated hereby, or requiring any
consent or approval which shall not have been obtained.

 

8.CONDITIONS TO
THE PURCHASER'S OBLIGATION TO PURCHASE.

 

The Company understands
that the Purchaser’s obligation to purchase any Notes and its acceptance of any shares of the Company’s common stock
that may be issued in connection with any agreements between the parties hereto on a Closing Date is conditioned upon:

 

a.The execution
and delivery of this Agreement and the other Transaction Documents by the Company;

 

b.Delivery
by the Company to the Purchaser of the Note and Warrants in accordance with this Agreement or any other agreements between the
parties;

 

c.The accuracy
in all material respects on the Closing Date of the representations and warranties of the Company contained in this Agreement,
each as if made on such date, and the performance by the Company on or before such date of all covenants and agreements of the
Company required to be performed on or before such date;

 

d.The Company
must be current with all required Exchange Act filings.

 

e.There shall
not be in effect any law, rule or regulation prohibiting or restricting the transactions contemplated hereby, or requiring any
consent or approval which shall not have been obtained; and

 

f.From and
after the date hereof to and including the Closing Date, each of the following conditions will remain in effect: (i) the trading
of the Common Stock shall not have been suspended by the SEC or on the Principal Trading Market; (ii) trading in securities generally
on the Principal Trading Market shall not have been suspended or limited; (iii) no minimum prices shall been established for securities
traded on the Principal Trading Market; and (iv) there shall not have been any Material Adverse Effect in regards to the Company.

 

    	Page 13

    	 

    

 

9.REGISTRATION
RIGHTS

 

 9.1 Registration procedures and Other Matters

 

		a.	The Company shall:

 

(i)as soon as possible
but in any event not later than the 60th day after the Closing Date (or, if such day is a Saturday, Sunday or holiday,
then by the next succeeding business day), file a registration statement on Form S-3 (or, if Form S-3 is note then available, on
such form of registration statement as is then available to effect a registration of all Shares and Warrant Shares) to enable the
resale of the Shares and the Warrant Shares by the Purchaser from time to time (the "Registration Statement");

 

(ii)use commercially
reasonable efforts to cause a Registration Statement to be declared effective by the SEC as soon as possible, but in any event
not later than the earlier of (a) the 120th day following the Closing Date, and (b) the fifth trading day following the date on
which the Company is notified by the SEC that the Registration Statement will not be reviewed or is no longer subject to further
review and comments;

 

(iii)use commercially
reasonable efforts to prepare and file with the SEC such amendments and supplements to the Registration Statement and the prospectus
used in connection therewith (the "Prospectus") as may be necessary to keep the Registration Statement continuously current,
effective and free from any material misstatement or omission to state a material fact for a period not exceeding, with respect
to the Purchaser’s Shares and Warrant Shares purchased hereunder from the date it is first declared effective until, the
earlier of (A) six months from the date of the final exercise of all of the Warrants, (B) the date on which the Purchaser may sell
all Shares and Warrant Shares then held by the Purchaser pursuant to Rule 144 without any restriction as to the number of securities
as of a particular date that can then be immediately sold, or (C) the public sale of all of the Shares and the Warrant Shares (such
period, the "Effectiveness Period");

 

    	Page 14

    	 

    

 

(iv)if (A) the
Registration Statement is not filed on or prior to the date of filing required pursuant to Section 9.1(a)(i), (B) the Registration
Statement is not declared effective on or prior to the date required by Section 9.1(a)(ii), or (C) notwithstanding Section 9.1(a)(ii),
after the date first declared effective by the SEC and prior to the expiration of the Effectiveness Period, the Registration Statement
ceases to be effective and available to each Purchaser as to its Shares and Warrant Shares (whether pursuant to Section 9, or otherwise)
without being succeeded within 20 trading days by an effective amendment thereto or by a subsequent registration statement filed
with and declared effective by the SEC, (any such failure being referred to as an "Event" and the date of such failure
being the "Event Date"), then, in addition to any other rights available to the Purchaser under this Agreement or applicable
law: (w) on the failure by the Company to comply with the Event required pursuant to Section 9.1(a)(i) the Company shall pay to
the Purchaser an amount in cash, as liquidated damages and not as a penalty, equal to two percent of the Subscription Price paid
by the Purchaser and on each monthly anniversary of such Event Date (if the Event has not been cured by such date) until the applicable
Event is cured, the Company shall pay to the Purchaser a further amount in cash, as liquidated damages and not as a penalty, equal
to one percent of the Subscription Price paid by the Purchaser; (x) on the failure by the Company to comply with the Event required
pursuant to Section (ii) or the occurrence of the Event set forth in Section (iv)(C) and on each monthly anniversary of such Event
Dates (if the Event has not been cured by such date) until the applicable Event is cured, an amount shall accrue and be payable
by the Company to the Purchaser, as liquidated damages and not as a penalty, equal to one percent of the Subscription Price paid
by the Purchaser; and if an Event is not cured within 90 days of the applicable Event Date, all liquidated damages that have accrued
and are owed and continue to accrue to the Purchaser shall be paid in cash, and any liquidated damages shall not exceed six percent
of the Subscription Price paid by the Purchaser. The parties agree that the Company shall not be liable for liquidated damages
under this Agreement with respect to any Shares and Warrant Shares that the Company was not permitted to include on such Registration
Statement due solely to the SEC’s application of Rule 415. The liquidated damages pursuant to the terms hereof shall apply
on a pro rata basis for any portion of a month prior to the cure of an Event;

 

(v)furnish to the
Purchaser with respect to the Shares and the Warrant Shares registered under the Registration Statement such number of copies of
the Registration Statement, Prospectuses and Preliminary Prospectuses in conformity with the requirements of the 1933 Act and such
other documents as the Purchaser may reasonably request in writing, in order to facilitate the public sale or other disposition
of all or any of the Shares or Warrant Shares by the Purchaser; provided, however, that the obligation of the Company to deliver
copies of Prospectuses or Preliminary Prospectuses to the Purchaser shall be subject to the receipt by the Company of reasonable
assurances from the Purchaser that the Purchaser will comply with the applicable provisions of the 1933 Act and of such other securities
or blue sky laws as may be applicable in connection with any use of such Prospectuses or Preliminary Prospectuses;

 

(vi)file documents
required of the Company for blue sky clearance in states specified in writing by the Purchaser and use its commercially reasonable
efforts to maintain such blue sky qualifications during the period the Company is required to maintain the effectiveness of the
Registration Statement pursuant to Section 9.1(a)(iii); provided, however, that the Company shall not be required to qualify to
do business or consent to service of process in any jurisdiction in which it is not now so qualified or has not so consented;

 

    	Page 15

    	 

    

 

(vii)bear all expenses
in connection with the procedures in paragraph 9.1(a)(i) through (vi) of this Section 9.1 (other than any underwriting discounts
or commissions, brokers’ fees and similar selling expenses, and any other fees or expenses incurred by the Purchaser, including
attorneys’ fees); and

 

(viii)advise the
Purchaser in writing promptly after it shall receive notice or obtain knowledge of the issuance of any stop order by the SEC delaying
or suspending the effectiveness of the Registration Statement or of the initiation or threat of any proceeding for that purpose;
and it will promptly use its commercially reasonable efforts to prevent the issuance of any stop order or to obtain its withdrawal
at the earliest possible moment if such stop order should be issued.

 

b.Notwithstanding
anything to the contrary herein, the Registration Statement shall cover only the Shares and the Warrant Shares and such other securities
issued by the Company subject to registration rights. In no event at any time before the Registration Statement becomes effective
with respect to the Shares and Warrant Shares shall the Company publicly announce or file any other registration statement, other
than registrations on Form S-8 or registrations for other securities issued by the Company subject to registration rights, without
the prior written consent of the Purchaser

 

 9.2 Transfer of Shares After Registration; Suspension

 

a.The Purchaser
agrees that it will promptly notify the Company of any material changes in the information set forth in the Registration Statement
regarding the Purchaser or its plan of distribution.

 

b.Except in
the event that paragraph (c) below applies, the Company shall (i) if deemed necessary by the Company, prepare and file from time
to time with the SEC a post-effective amendment to the Registration Statement or a supplement to the related Prospectus or a supplement
or amendment to any document incorporated therein by reference or file any other required document so that such Registration Statement
will not contain an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary
to make the statements therein not misleading, and so that, as thereafter delivered to purchasers of the Shares and Warrant Shares
being sold thereunder, such Prospectus will not contain an untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were
made, not misleading; (ii) provide the Purchaser copies of any documents filed pursuant to Section 9.1 as the Purchaser may reasonably
request; and (iii) inform each Purchaser that the Company has complied with its obligations in Section 9.1 (or that, if the Company
has filed a post-effective amendment to the Registration Statement which has not yet been declared effective, the Company will
notify the Purchaser to that effect, will use its commercially reasonable efforts to secure the effectiveness of such post-effective
amendment as promptly as possible and will promptly notify the Purchaser pursuant to Section 9.1 hereof when the amendment has
become effective).

 

    	Page 16

    	 

    

 

c.Subject
to paragraph (d) below, in the event of: (i) any request by the SEC or any other federal or state governmental authority during
the period of effectiveness of the Registration Statement for amendments or supplements to a Registration Statement or related
Prospectus or for additional information; (ii) the issuance by the SEC or any other federal or state governmental authority of
any stop order suspending the effectiveness of a Registration Statement or the initiation of any proceedings for that purpose;
(iii) the receipt by the Company of any notification with respect to the suspension of the qualification or exemption from qualification
of any of the Shares for sale in any jurisdiction or the initiation or threatening of any proceeding for such purpose; or (iv)
any event or circumstance which, upon the advice of its counsel, necessitates the making of any changes in the Registration Statement
or Prospectus, or any document incorporated or deemed to be incorporated therein by reference, so that, in the case of the Registration
Statement, it will not contain any untrue statement of a material fact or any omission to state a material fact required to be
stated therein or necessary to make the statements therein not misleading, and that in the case of the Prospectus, it will not
contain any untrue statement of a material fact or any omission to state a material fact required to be stated therein or necessary
to make the statements therein, in the light of the circumstances under which they were made, not misleading; then the Company
shall deliver a certificate in writing to the Purchaser (the "Suspension Notice") to the effect of the foregoing and,
upon receipt of such Suspension Notice, the Purchaser will refrain from selling any Shares and Warrant Shares pursuant to the Registration
Statement (a "Suspension") until the Purchaser's receipt of copies of a supplemented or amended Prospectus prepared and
filed by the Company, or until it is advised in writing by the Company that the current Prospectus may be used, and has received
copies of any additional or supplemental filings that are incorporated or deemed incorporated by reference in any such Prospectus.
In the event of any Suspension, the Company will use its commercially reasonable efforts to cause the use of the Prospectus so
suspended to be resumed as soon as reasonably practicable within 20 trading days after the delivery of a Suspension Notice to the
Purchaser.

 

d. Notwithstanding
the foregoing paragraphs of this Section 9.2, the Purchaser shall not be prohibited from selling Shares under the Registration
Statement as a result of Suspensions on more than two occasions of not more than 20 trading days each in any twelve month period.

 

e.Provided
that a Suspension is not then in effect, the Purchaser may sell the Shares and the Warrant Shares under the Registration Statement,
provided that it arranges for delivery of a current Prospectus to the transferee of such Shares or Warrant Shares, as applicable.
The Company shall provide such number of current Prospectuses to the Purchaser as the Purchaser may reasonably request, and shall
supply copies to any other parties reasonably requiring such Prospectuses.

 

    	Page 17

    	 

    

 

 9.3 Indemnification

 

a.The Company
agrees to indemnify and hold harmless the Purchaser and the officers, directors, agents and employees of the Purchaser, to the
fullest extent permitted by applicable law from and against any losses, claims, damages or liabilities to which any such person(s)
may become subject (under the 1933 Act or otherwise) insofar as such losses, claims, damages or liabilities (or actions or proceedings
in respect thereof) arise out of, or are based upon (i) any Untrue Statement (defined below), or (ii) any failure by the Company
to fulfill any undertaking included in the Registration Statement, as amended or supplemented from time to time, which indemnification
will include reimbursement for any reasonable legal or other expenses reasonably incurred in investigating, defending or preparing
to defend any such action, proceeding or claim, or preparing to defend any such action, proceeding or claim, provided, however,
that the Company shall not be liable in any such case to the extent that such loss, claim, damage or liability arises out of, or
is based upon, an Untrue Statement made in reliance upon and in conformity with written information furnished to the Company by
or on behalf of the Purchaser specifically for use in preparation of the Registration Statement, as amended or supplemented from
time to time or the failure of the Purchaser to comply with its covenants and agreements contained in this Agreement hereof respecting
sale of the Shares or Warrant Shares or any statement or omission in any Prospectus that is corrected in any subsequent Prospectus
that was delivered to the Purchaser prior to the pertinent sale or sales by the Purchaser. The Company shall reimburse the Purchaser
for the indemnifiable amounts provided for herein on demand as such expenses are incurred. Notwithstanding the foregoing, the Company's
aggregate obligation to indemnify the Purchaser and such officers, directors and controlling persons shall be limited to the amount
of the Subscription Price received by the Company from the Purchaser.

 

b.The Purchaser
agrees to indemnify and hold harmless the Company (and each person, if any, who controls the Company within the meaning of Section
15 of the 1933 Act, each officer of the Company who signs the Registration Statement and each director of the Company) from and
against any losses, claims, damages or liabilities to which the Company (or any such officer, director or controlling person) may
become subject (under the 1933 Act or otherwise), insofar as such losses, claims, damages or liabilities (or actions or proceedings
in respect thereof) arise out of, or are based upon, (i) any Untrue Statement if such Untrue Statement was made in reliance upon
and in conformity with written information furnished by or on behalf of the Purchaser specifically for use in preparation of the
Registration Statement, as amended or supplemented from time to time or (ii) the failure of the Purchaser to comply with its covenants
and agreements contained in this Agreement hereof respecting sale of the Shares or Warrant Shares or any statement or omission
in any Prospectus that is corrected in any subsequent Prospectus that was delivered to the Purchaser prior to the pertinent sale
or sales by the Purchaser; and the Purchaser will reimburse the Company or such officer, director or controlling person, as the
case may be, for any reasonable legal or other expenses reasonably incurred in investigating, defending or preparing to defend
any such action, proceeding or claim. The Purchaser shall reimburse the Company or such officer, director or controlling person,
as the case may be, for the indemnifiable amounts provided for herein on demand as such expenses are incurred. Notwithstanding
the foregoing, the Purchaser's aggregate obligation to indemnify the Company and such officers, directors and controlling persons
shall be limited to the amount received by the Purchaser from the sale of Shares or Warrant Shares that are the subject of such
loss.

 

    	Page 18

    	 

    

 

c.Promptly
after receipt by any indemnified person of a notice of a claim or the beginning of any action in respect of which indemnity is
to be sought against an indemnifying person pursuant to this Section 9.3, such indemnified person shall notify the indemnifying
person in writing of such claim or of the commencement of such action, but the omission to so notify the indemnifying person will
not relieve it from any liability which it may have to any indemnified person under this Section 9.3 (except to the extent that
such omission materially and adversely affects the indemnifying person's ability to defend such action) or from any liability otherwise
than under this Section 9.3. Subject to the provisions hereinafter stated, in case any such action shall be brought against
an indemnified person, the indemnifying person shall be entitled to participate therein, and, to the extent that it shall elect
by written notice delivered to the indemnified person promptly after receiving the aforesaid notice from such indemnified person,
shall be entitled to assume the defense thereof, with counsel reasonably satisfactory to such indemnified person. After notice
from the indemnifying person to such indemnified person of its election to assume the defense thereof, such indemnifying person
shall not be liable to such indemnified person for any legal expenses subsequently incurred by such indemnified person in connection
with the defense thereof, provided, however, that if there exists or shall exist a conflict of interest that would make
it inappropriate, in the opinion of counsel to the indemnified person, for the same counsel to represent both the indemnified person
and such indemnifying person or any affiliate or associate thereof, the indemnified person shall be entitled to retain its own
counsel at the expense of such indemnifying person; provided, however, that no indemnifying person shall be responsible
for the fees and expenses of more than one separate counsel (together with appropriate local counsel) for all indemnified parties.
In no event shall any indemnifying person be liable in respect of any amounts paid in settlement of any action unless the indemnifying
person shall have approved the terms of such settlement; provided that such consent shall not be unreasonably withheld or
delayed. No indemnifying person shall, without the prior written consent of the indemnified person, effect any settlement of any
pending or threatened proceeding in respect of which any indemnified person is or could have been a party and indemnification could
have been sought hereunder by such indemnified person, unless such settlement includes an unconditional release of such indemnified
person from all liability on claims that are the subject matter of such proceeding.

 

d.The parties
to this Agreement hereby acknowledge that they are sophisticated business persons who were represented by counsel during the negotiations
regarding the provisions hereof including, without limitation, the provisions of this Section 9.3, and are fully informed regarding
said provisions. They further acknowledge that the provisions of this Section 9.3 fairly allocate the risks in light of the ability
of the parties to investigate the Company and its business in order to assure that adequate disclosure is made in the Registration
Statement as required by the 1933 Act and the Securities Exchange Act of 1934, as amended (the "1934 Act"). The parties
are advised that federal or state public policy as interpreted by the courts in certain jurisdictions may be contrary to certain
of the provisions of this Section 9.3, and the parties hereto hereby expressly waive and relinquish any right or ability to assert
such public policy as a defense to a claim under this Section 9.3 and further agree not to attempt to assert any such defense.

 

    	Page 19

    	 

    

 

e.For the purpose of
this Section 9:

 

(i)the term "Registration
Statement" shall include the Prospectus in the form first filed with the SEC pursuant to Rule 424(b) of the 1933 Act or filed
as part of the Registration Statement at the time of effectiveness if no Rule 424(b) filing is required, and any exhibit, supplement
or amendment included in or relating to the Registration Statement referred to in Section 9.1; and

 

(ii)the term "Untrue
Statement" means any untrue statement or alleged untrue statement, or any omission or alleged omission to state in the Registration
Statement, as amended or supplemented from time to time, a material fact required to be stated therein or necessary to make the
statements therein, in the light of the circumstances under which they were made, not misleading.

 

9.4Information Available

 

So long as the Registration Statement is
effective covering the resale of Shares and Warrant Shares owned by the Purchaser, the Company will, at Purchaser's written request,
furnish to the Purchaser:

 

a.as soon
as practicable after it is available, one copy of (i) its Annual Report to Shareholders (which Annual Report shall contain financial
statements audited in accordance with generally accepted accounting principles by a national firm of certified public accountants),
(ii) its Annual Report on Form 10-K and (iii) its Quarterly Reports on Form 10-Q (the foregoing, in each case, excluding exhibits);

 

b.any and
all exhibits to the reports set forth in Section 9.4(a) as filed with the SEC and all other information that is made available
to shareholders; and

 

c.an adequate
number of copies of the Prospectuses to supply to any other party requiring such Prospectuses.

 

10.INDEMNIFICATION
AND REIMBURSEMENT.

 

a. (i) The
Company agrees to indemnify and hold harmless the Purchaser and its officers, directors, employees, and agents, and each Purchaser
Control Person from and against any losses, claims, damages, liabilities or expenses incurred (collectively, "Damages"),
joint or several, and any action in respect thereof to which the Purchaser, its partners, Affiliates, officers, directors, employees,
and duly authorized agents, and any such Purchaser Control Person becomes subject to, resulting from, arising out of or relating
to any misrepresentation, breach of warranty or nonfulfillment of or failure to perform any covenant or agreement on the part of
Company contained in this Agreement, as such Damages are incurred, except to the extent such Damages result primarily from Purchaser's
failure to perform any covenant or agreement contained in this Agreement or the Purchaser's or its officer’s, director’s,
employee’s, agent’s or Purchaser Control Person’s negligence, recklessness or bad faith in performing its obligations
under this Agreement.

 

    	Page 20

    	 

    

 

(ii)The Company
hereby agrees that, if the Purchaser, other than by reason of its negligence, illegal or willful misconduct (in each case, as determined
by a non-appealable judgment to such effect), (x) becomes involved in any capacity in any action, proceeding or investigation brought
by any shareholder of the Company, in connection with or as a result of the consummation of the transactions contemplated by this
Agreement or the other Transaction Documents, or if the Purchaser is impleaded in any such action, proceeding or investigation
by any Person, or (y) becomes involved in any capacity in any action, proceeding or investigation brought by the SEC, any self-regulatory
organization or other body having jurisdiction, against or involving the Company or in connection with or as a result of the consummation
of the transactions contemplated by this Agreement or the other Transaction Documents, or (z) is impleaded in any such action,
proceeding or investigation by any Person, then in any such case, the Company shall indemnify, defend and hold harmless the Purchaser
from and against and in respect of all losses, claims, liabilities, damages or expenses resulting from, imposed upon or incurred
by the Purchaser, directly or indirectly, and reimburse such Purchaser for its reasonable legal and other expenses (including the
cost of any investigation and preparation) incurred in connection therewith, as such expenses are incurred. The indemnification
and reimbursement obligations of the Company under this paragraph shall be in addition to any liability which the Company may otherwise
have, shall extend upon the same terms and conditions to any Affiliates of the Purchaser who are actually named in such action,
proceeding or investigation, and partners, directors, agents, employees and Purchaser Control Persons (if any), as the case may
be, of the Purchaser and any such Affiliate, and shall be binding upon and inure to the benefit of any successors, assigns, heirs
and personal representatives of the Company, the Purchaser, any such Affiliate and any such Person. The Company also agrees that
neither the Purchaser nor any such Affiliate, partner, director, agent, employee or Purchaser Control Person shall have any liability
to the Company or any Person asserting claims on behalf of or in right of the Company in connection with or as a result of the
consummation of this Agreement or the other Transaction Documents, except as may be expressly and specifically provided in or contemplated
by this Agreement.

 

b.All claims
for indemnification by any Indemnified Party (as defined below) under this Section shall be asserted and resolved as follows:

 

(i) In the event
any claim or demand in respect of which any Person claiming indemnification under any provision of this Section (an "Indemnified
Party") might seek indemnity under paragraph (a) of this Section is asserted against or sought to be collected from such Indemnified
Party by a Person other than a party hereto or an Affiliate thereof (a "Third Party Claim"), the Indemnified Party shall
deliver a written notification, enclosing a copy of all papers served, if any, and specifying the nature of and basis for such
Third Party Claim and for the Indemnified Party's claim for indemnification that is being asserted under any provision of this
Section against any Person (the "Indemnifying Party"), together with the amount or, if not then reasonably ascertainable,
the estimated amount, determined in good faith, of such Third Party Claim (a "Claim Notice") with reasonable promptness
to the Indemnifying Party. If the Indemnified Party fails to provide the Claim Notice with reasonable promptness after the Indemnified
Party receives notice of such Third Party Claim, the Indemnifying Party shall not be obligated to indemnify the Indemnified Party
with respect to such Third Party Claim to the extent that the Indemnifying Party's ability to defend has been prejudiced by such
failure of the Indemnified Party. The Indemnifying Party shall notify the Indemnified Party as soon as practicable within the period
ending thirty (30) calendar days following receipt by the Indemnifying Party of either a Claim Notice or an Indemnity Notice (as
defined below) (the "Dispute Period") whether the Indemnifying Party disputes its liability or the amount of its liability
to the Indemnified Party under this Section and whether the Indemnifying Party desires, at its sole cost and expense, to defend
the Indemnified Party against such Third Party Claim. The following provisions shall also apply.

 

    	Page 21

    	 

    

 

(ii) If the Indemnifying
Party notifies the Indemnified Party within the Dispute Period that the Indemnifying Party desires to defend the Indemnified Party
with respect to the Third Party Claim pursuant to this paragraph (b) of this Section, then the Indemnifying Party shall have the
right to defend, with counsel reasonably satisfactory to the Indemnified Party, at the sole cost and expense of the Indemnifying
Party, such Third Party Claim by all appropriate proceedings, which proceedings shall be vigorously and diligently prosecuted by
the Indemnifying Party to a final conclusion or will be settled at the discretion of the Indemnifying Party (but only with the
consent of the Indemnified Party in the case of any settlement that provides for any relief other than the payment of monetary
damages or that provides for the payment of monetary damages as to which the Indemnified Party shall not be indemnified in full
pursuant to paragraph (a) of this Section). The Indemnifying Party shall have full control of such defense and proceedings, including
any compromise or settlement thereof; provided, however, that the Indemnified Party may, at the sole cost and expense of the Indemnified
Party, at any time prior to the Indemnifying Party's delivery of the notice referred to in the first sentence of this subparagraph
(x), file any motion, answer or other pleadings or take any other action that the Indemnified Party reasonably believes to be necessary
or appropriate protect its interests; and provided further, that if requested by the Indemnifying Party, the Indemnified Party
will, at the sole cost and expense of the Indemnifying Party, provide reasonable cooperation to the Indemnifying Party in contesting
any Third Party Claim that the Indemnifying Party elects to contest. The Indemnified Party may participate in, but not control,
any defense or settlement of any Third Party Claim controlled by the Indemnifying Party pursuant to this subparagraph (x), and
except as provided in the preceding sentence, the Indemnified Party shall bear its own costs and expenses with respect to such
participation. Notwithstanding the foregoing, the Indemnified Party may take over the control of the defense or settlement of a
Third Party Claim at any time if it irrevocably waives its right to indemnity under paragraph (a) of this Section with respect
to such Third Party Claim.

 

(iii) If the Indemnifying
Party fails to notify the Indemnified Party within the Dispute Period that the Indemnifying Party desires to defend the Third Party
Claim pursuant to paragraph (b) of this Section, or if the Indemnifying Party gives such notice but fails to prosecute vigorously
and diligently or settle the Third Party Claim, or if the Indemnifying Party fails to give any notice whatsoever within the Dispute
Period, then the Indemnified Party shall have the right to defend, at the sole cost and expense of the Indemnifying Party, the
Third Party Claim by all appropriate proceedings, which proceedings shall be prosecuted by the Indemnified Party in a reasonable
manner and in good faith or will be settled at the discretion of the Indemnified Party (with the consent of the Indemnifying Party,
which consent will not be unreasonably withheld). The Indemnified Party will have full control of such defense and proceedings,
including any compromise or settlement thereof; provided, however, that if requested by the Indemnified Party, the Indemnifying
Party will, at the sole cost and expense of the Indemnifying Party, provide reasonable cooperation to the Indemnified Party and
its counsel in contesting any Third Party Claim which the Indemnified Party is contesting. Notwithstanding the foregoing provisions
of this subparagraph (y), if the Indemnifying Party has notified the Indemnified Party within the Dispute Period that the Indemnifying
Party disputes its liability or the amount of its liability hereunder to the Indemnified Party with respect to such Third Party
Claim and if such dispute is resolved in favor of the Indemnifying Party in the manner provided in subparagraph(z) below, the Indemnifying
Party will not be required to bear the costs and expenses of the Indemnified Party's defense pursuant to this subparagraph (y)
or of the Indemnifying Party's participation therein at the Indemnified Party's request, and the Indemnified Party shall reimburse
the Indemnifying Party in full for all reasonable costs and expenses incurred by the Indemnifying Party in connection with such
litigation. The Indemnifying Party may participate in, but not control, any defense or settlement controlled by the Indemnified
Party pursuant to this subparagraph (y), and the Indemnifying Party shall bear its own costs and expenses with respect to such
participation.

 

    	Page 22

    	 

    

 

(iv) If the Indemnifying
Party notifies the Indemnified Party that it does not dispute its liability or the amount of its liability to the Indemnified Party
with respect to the Third Party Claim under paragraph (a) of this Section or fails to notify the Indemnified Party within the Dispute
Period whether the Indemnifying Party disputes its liability or the amount of its liability to the Indemnified Party with respect
to such Third Party Claim, the amount of Damages specified in the Claim Notice shall be conclusively deemed a liability of the
Indemnifying Party under paragraph (a) of this Section and the Indemnifying Party shall pay the amount of such Damages to the Indemnified
Party on demand. If the Indemnifying Party has timely disputed its liability or the amount of its liability with respect to such
claim, the Indemnifying Party and the Indemnified Party shall proceed in good faith to negotiate a resolution of such dispute;
provided, however, that if the dispute is not resolved within thirty (30) days after the Claim Notice, the Indemnifying Party shall
be entitled to institute such legal action as it deems appropriate.

 

(v)In the event
any Indemnified Party should have a claim under paragraph (a) of this Section against the Indemnifying Party that does not involve
a Third Party Claim, the Indemnified Party shall deliver a written notification of a claim for indemnity under paragraph (a) of
this Section specifying the nature of and basis for such claim, together with the amount or, if not then reasonably ascertainable,
the estimated amount, determined in good faith, of such claim (an "Indemnity Notice") with reasonable promptness to the
Indemnifying Party. The failure by any Indemnified Party to give the Indemnity Notice shall not impair such party's rights hereunder
except to the extent that the Indemnifying Party demonstrates that it has been irreparably prejudiced thereby. If the Indemnifying
Party notifies the Indemnified Party that it does not dispute the claim or the amount of the claim described in such Indemnity
Notice or fails to notify the Indemnified Party within the Dispute Period whether the Indemnifying Party disputes the claim or
the amount of the claim described in such Indemnity Notice, the amount of Damages specified in the Indemnity Notice will be conclusively
deemed a liability of the Indemnifying Party under paragraph (a) of this Section and the Indemnifying Party shall pay the amount
of such Damages to the Indemnified Party on demand. If the Indemnifying Party has timely disputed its liability or the amount of
its liability with respect to such claim, the Indemnifying Party and the Indemnified Party shall proceed in good faith to negotiate
a resolution of such dispute; provided, however, that it the dispute is not resolved within thirty (30) days after the Claim Notice,
the Indemnifying Party shall be entitled to institute such legal action as it deems appropriate.

 

c.The indemnity
agreements contained herein shall be in addition to (i) any cause of action or similar rights of the indemnified party against
the indemnifying party or others, and (ii) any liabilities the indemnifying party may be subject to.

 

    	Page 23

    	 

    

 

11.JURY TRIAL
WAIVER. The Company and the Purchaser hereby waive a trial by jury in any action, proceeding or counterclaim brought by either
of the Parties hereto against the other in respect of any matter arising out or in connection with the Transaction Documents.

 

12.GOVERNING
LAW: MISCELLANEOUS.

 

a.          (i) This
Agreement shall be governed by and interpreted in accordance with the laws of the State of Nevada for contracts to be wholly performed
in such state and without giving effect to the principles thereof regarding the conflict of laws. Each of the parties consents
to the exclusive jurisdiction of the federal courts whose districts encompass any part of the state courts of the State of Nevada
as in connection with any dispute arising under this Agreement or any of the other Transaction Documents and hereby waives, to
the maximum extent permitted by law, any objection, including any objection based on forum non conveniens, to the bringing
of any such proceeding in such jurisdictions or to any claim that such venue of the suit, action or proceeding is improper. To
the extent determined by such court, the Company shall reimburse the Purchaser for any reasonable legal fees and disbursements
incurred by the Purchaser in enforcement of or protection of any of its rights under any of the Transaction Documents. Nothing
in this Section shall affect or limit any right to serve process in any other manner permitted by law.

 

(ii) The Company and
the Purchaser acknowledge and agree that irreparable damage would occur in the event that any of the provisions of this Agreement
or the other Transaction Documents were not performed in accordance with their specific terms or were otherwise breached. It is
accordingly agreed that the parties shall be entitled to an injunction or injunctions to prevent or cure breaches of the provisions
of this Agreement and the other Transaction Documents and to enforce specifically the terms and provisions hereof and thereof,
this being in addition to any other remedy to which any of them may be entitled by law or equity.

 

b.Failure
of any party to exercise any right or remedy under this Agreement or otherwise, or delay by a party in exercising such right or
remedy, shall not operate as a waiver thereof.

 

c.This Agreement
shall inure to the benefit of and be binding upon the successors and assigns of each of the parties hereto.

 

d.All pronouns
and any variations thereof refer to the masculine, feminine or neuter, singular or plural, as the context may require.

 

e.A facsimile
transmission of this signed Agreement shall be legal and binding on all parties hereto.

 

f.This Agreement
may be signed in one or more counterparts, each of which shall be deemed an original.

 

g.The headings
of this Agreement are for convenience of reference and shall not form part of, or affect the interpretation of, this Agreement.

 

    	Page 24

    	 

    

 

h.If any provision
of this Agreement shall be invalid or unenforceable in any jurisdiction, such invalidity or unenforceability shall not affect the
validity or enforceability of the remainder of this Agreement or the validity or enforceability of this Agreement in any other
jurisdiction.

 

i.This Agreement
may be amended only by an instrument in writing signed by the party to be charged with enforcement thereof.

 

j.This Agreement
supersedes all prior agreements and understandings among the parties hereto with respect to the subject matter hereof.

 

13.NOTICES.
Any notice required or permitted hereunder shall be given in writing (unless otherwise specified herein) and shall be deemed effectively
given on the earliest of

 

(a) the date delivered,
if delivered by personal delivery as against written receipt therefor or by confirmed facsimile transmission,

 

(b) the fifth Trading
Day after deposit, postage prepaid, in the United States Postal Service by registered or certified mail, or

 

(c) the third Trading
Day after mailing by domestic or international express courier, with delivery costs and fees prepaid,

 

in each case, addressed to each of the
other parties thereunto entitled at the following addresses (or at such other addresses as such party may designate by ten (10)
days’ advance written notice similarly given to each of the other parties hereto):

 

	COMPANY: 	At the address set forth at the head of this Agreement.
	 	Attn: Ronald W. Pickett

Telephone No.: 410-972-4713
or 910-619-3171

Telecopier No.:

	 	 
	PURCHASER:	JDF CAPITAL INC.

Attn: John Fierro

Telephone No.: 718-290-4058

Telecopier No.: 800-319-6863

 

14.SURVIVAL OF
REPRESENTATIONS AND WARRANTIES. The Company’s and the Purchaser’s representations and warranties herein shall survive
the execution and delivery of this Agreement and the delivery of the Certificates and the payment of the Purchase Amount, and shall
inure to the benefit of the Purchaser and the Company and their respective successors and assigns.

 

[Balance of page intentionally left blank]

 

    	Page 25

    	 

    

 

IN WITNESS WHEREOF,
this Agreement has been duly executed by the Purchaser and the Company as of the date set first above written.

 

 

	 	 	 	 	 
	 	 	 	JDF CAPITAL INC.
	 	 	 	 	 
	 	 	 	By:	 /s/ John Fierro
	 	 	 	Name: John Fierro
	 	 	 	Title: President
	 	 	 	 	 
	SOLAR WIND ENERGY TOWER, INC.	 	 	 
	 	 	 	 	 
	By:	 	 	 	 
	(Signature of Authorized Person)	 	 	 
	 	 	 	 
	/s/ Ronald W. Pickett	 	 	 
	Ronald W. Pickett, President and Chief Executive Officer	 	 	 

 

 

    	Page 26Exhibit 10.1

Pacific Ethanol, Inc.
2014 Short-Term Incentive Plan (“Plan”) Description

		·	Effective Date: The Plan was adopted by the compensation committee (the “Compensation Committee”)
of the board of directors of Pacific Ethanol, Inc. (the “Company”) on June 13, 2014.

		·	Participants: The Company’s Chief Executive Officer, Chief Financial Officer, Chief Operating
Officer, General Counsel and Vice President of Corporate Development (“Executive Officers”), and other officer, director
and manager-level personnel will be eligible to participate in the Plan.

		·	Aggregate Plan Pool: The dollar amount of the aggregate Plan pool will be established by the Compensation
Committee.

		·	Awards: Awards under the Plan for Executive Officers will be determined by the Compensation Committee.
Awards under the Plan for other officer, director and manager-level personnel will be determined by the Company’s executive
committee, within the limits of the Plan pool approved by the Compensation Committee.

		·	Individual Targets: The Plan payout targets for Executive Officers will be determined by the Compensation
Committee. The Plan payout targets for other officer, director and manager-level personnel will be set as a percentage of a participant’s
base salary in accordance with compensation policies established by the Company’s executive committee or a participant’s
employment agreement with the Company.

		·	Award Components: Awards under the Plan will be based on three elements: financial performance, departmental
performance and individual performance. Company financial performance will be an element in all participants’ awards. One
or both of the departmental performance and individual performance elements will also apply. Each element will be assigned a weighting
based upon a participant’s role in the Company.

	 	 o	
The financial performance element will be based on an earnings before interest, taxes, debt extinguishments, fair value
adjustments, warrant inducements and depreciation and amortization (“Adjusted EBITDA”) goal established by
the Compensation Committee. The financial performance element is non-discretionary and will be funded at a rate of 0% to 175%
of the participant’s targeted payout amount for the element based on the level of actual Adjusted EBITDA compared to
the Adjusted EBITDA goal.
	 	 	 
	 	 o	
The departmental performance element will be based on quantitative criteria and subjective elements established by
the Company’s executive committee. The extent to which a department will be deemed to have achieved its
performance goals will be determined by the Company’s executive committee in consultation with the Compensation
Committee. The departmental element is discretionary and will be funded at a rate of 0% to 100% of the participant’s
targeted payout amount for the element.

 

    	 

    	 

    

 

 

	 	 	 
	 	 o	The individual performance element will
be based on individual participant goals based on quantitative criteria and subjective elements established by each participant’s
supervisor, in consultation with the Company’s executive committee. The extent to which a participant will be deemed to have
achieved his or her individual performance goals will be determined by the Company’s executive committee in consultation
with the participant’s supervisor; provided, however, that the extent to which a participant who is an Executive Officer
will be deemed to have achieved his or her individual performance goals will be recommended by the Company’s Chief Executive
Officer but ultimately determined by the Compensation Committee. The individual performance element is discretionary and will be
funded at a rate of 0% to 100% of the participant’s targeted payout amount for the element.

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