Exhibit 10.1


 


STOCK PURCHASE AGREEMENT


 


dated as of July 31, 2018


 


among


 


VICTORY OILFIELD TECH, INC.


 


PRO-TECH HARDBANDING SERVICES, INC.


 


AND


 


STEWART MATHESON


 



     


     


    

 


TABLE OF CONTENTS


 







	 	Page 





	ARTICLE I DEFINITIONS 	1
	1.1	Certain Definitions.	1
	 	 	 
	ARTICLE II PURCHASE AND SALE OF THE SHARES 	5
	2.1	Purchase and Sale of the Shares.	5
	2.2	Adjustment for Outstanding Indebtedness.	6
	2.3	Closing.	6
	2.4	Transactions to be Effected at the Closing.	6
	 	 	 
	ARTICLE III REPRESENTATIONS AND WARRANTIES OF THE SELLER 	7
	3.1	Authority and Enforceability.	7
	3.2	Noncontravention.	7
	3.3	The Shares.	8
	3.4	Brokers’ Fees.	8
	 	 	 
	ARTICLE IV REPRESENTATIONS AND WARRANTIES CONCERNING THE COMPANY 	8
	4.1	Organization, Qualification and Corporate Power; Authority and Enforceability.	8
	4.2	Subsidiaries.	9
	4.3	Capitalization.	9
	4.4	Noncontravention.	10
	4.5	Financial Statements.	10
	4.6	Taxes..	11
	4.7	Compliance with Laws and Orders; Permits.	11
	4.8	No Undisclosed Liabilities.	11
	4.9	Tangible Personal Assets.	12
	4.10	Real Property.	12
	4.11	Intellectual Property.	12
	4.12	Absence of Certain Changes or Events.	13
	4.13	Contracts.	14
	4.14	Litigation.	15
	4.15	Employee Benefits.	15
	4.16	Labor and Employment Matters.	15
	4.17	Environmental.	16
	4.18	Insurance.	16
	4.19	Brokers’ Fees.	16
	4.20	Equipment.	16
	4.21	Inventories.	16
	4.22	Vendors.	17
	4.23	Potential Conflicts of Interest.	17
	4.24	Product Warranty; Product Liability.	17
	4.25	Officers and Directors; Bank Accounts, Signing Authority, Powers of Attorney.	17
	4.26	Accounts Receivable.	18
	4.27	Disclosure.	18
	 	 	 
	ARTICLE V REPRESENTATIONS AND WARRANTIES OF THE BUYER 	18
	5.1	Organization.	18
	5.2	Authorization.	18
	5.3	Noncontravention.	18



 



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TABLE OF CONTENTS


 


	 	 	Page
	5.4	Brokers’ Fees.	19
	5.5	Sufficiency of Funds.	19
	5.6	Litigation.	19
	5.7	Capitalization.	19
	5.8	SEC Reports and Financial Statements.	20
	 	 	 
	ARTICLE VI COVENANTS 	20
	6.1	Consents.	20
	6.2	Operation of the Company’s Business.	20
	6.3	Access.	21
	6.4	Transfer of Cash and Cash Equivalents.	21
	6.5	Ongoing Operations and Employment Benefits Matters.	21
	6.6	Notice of Developments.	22
	6.7	No Solicitation.	22
	6.8	Covenant not to Compete.	22
	6.9	Financial Information.	23
	6.10	Taking of Necessary Action; Further Action.	23
	6.11	Collection of Closing Receivables.	23
	6.12	Public Reporting and Restrictive Legend.	23
	 	 	 
	ARTICLE VII CONDITIONS TO OBLIGATIONS TO CLOSE 	23
	7.1	Conditions to Obligation of the Buyer.	23
	7.2	Conditions to Obligation of the Seller.	25
	 	 	 
	ARTICLE VIII TERMINATION; AMENDMENT; WAIVER 	26
	8.1	Termination of Agreement.	26
	8.2	Effect of Termination.	26
	8.3	Amendments.	27
	8.4	Waiver.	27
	 	 	 
	ARTICLE IX INDEMNIFICATION 	27
	9.1	Survival.	27
	9.2	Indemnification by the Seller.	28
	9.3	Indemnification by Buyer.	28
	9.4	Limitations.	28
	9.5	Indemnification Procedure.	28
	9.6	Failure to Give Timely Notice.	29
	9.7	Sole and Exclusive Remedy.	29
	9.8	Payments.	29
	9.9	Recoupment under Deferred Portion.	29
	 	 	 
	ARTICLE X MISCELLANEOUS 	30
	10.1	Press Releases and Public Announcement.	30
	10.2	No Third-Party Beneficiaries.	30
	10.3	Entire Agreement.	30
	10.4	Succession and Assignment.	30
	10.5	Construction.	30
	10.6	Notices.	31
	10.7	Governing Law.	31
	10.8	Consent to Jurisdiction and Service of Process.	31
	10.9	Headings.	32
	10.10	Severability.	32
	10.11	Expenses.	32
	10.12	Incorporation of Exhibits and Schedules.	32
	10.13	Limited Recourse.	32
	10.14	Specific Performance.	32
	10.15	Counterparts.	32




 


Disclosure Schedule


Exhibit A – Consulting Agreement


Exhibit B – Pledge and Security
Agreement


 




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STOCK PURCHASE AGREEMENT


 


STOCK PURCHASE AGREEMENT,
dated as of July 31, 2018 (the “Agreement”), among Victory Oilfield Tech, Inc., a Nevada corporation (the “Buyer”),
Pro-Tech Hardbanding Services, Inc., an Oklahoma corporation (the “Company”), and Stewart Matheson (the “Seller”).


 


BACKGROUND


 


The Seller is the record
and beneficial owner of 517 shares (the “Shares”) of the Common Stock, $1.00 par value per share (the “Common
Stock”), of the Company constituting 100% of the issued and outstanding shares of Common Stock of the Company. The Seller
desires to sell all of the Shares to the Buyer, and the Buyer desires to purchase all of the Shares from the Seller, upon the terms
and subject to the conditions set forth in this Agreement (such sale and purchase of the Shares, the “Acquisition”).


 


On June 21, 2018, the
Buyer and the Seller entered into an escrow agreement (the “Escrow Agreement”) with UMB Bank, N.A., as escrow
agent (the “Escrow Agent”), pursuant to which the Buyer deposited $150,000 (the “Deposit”)
into an escrow account, which shall be applied towards the Purchase Price (as defined below) as described below.


 


AGREEMENT


 


NOW, THEREFORE, in
consideration of the foregoing premises and the respective representations and warranties, covenants and agreements contained herein,
the parties hereto agree as follows:


 


ARTICLE I

DEFINITIONS


 


1.1 Certain
Definitions.


 


(a) When
used in this Agreement, the following terms will have the meanings assigned to them in this Section 1.1(a):


 


“Accounting
Principles” means the accounting methods, principles or calculations historically used by the Company and its Subsidiaries
and as set forth in Section 4.5 of the Disclosure Schedule, consistently applied.


 


“Action”
means any claim, action, suit, inquiry, hearing, proceeding or other investigation.


 


“Affiliate”
means, with respect to a Person, any other Person that, directly or indirectly, through one or more intermediaries, Controls, is
Controlled by or is under common Control with, such Person. For purposes of this definition, “Control” (including
the terms “Controlled by” and “under common Control with”) means possession of the power
to direct or cause the direction of the management or policies of a Person, whether through the ownership of stock, as trustee
or executor, by Contract or otherwise.


 



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“Benefit Plan”
means any “employee benefit plan” as defined in ERISA Section 3(3), including any (i) nonqualified deferred compensation
or retirement plan or arrangement which is an Employee Pension Benefit Plan (as defined in ERISA Section 3(2)), (ii) qualified
defined contribution retirement plan or arrangement which is an Employee Pension Benefit Plan, (iii) qualified defined benefit
retirement plan or arrangement which is an Employee Pension Benefit Plan (including any Multiemployer Plan (as defined in ERISA
Section 3(37)), (iv) Employee Welfare Benefit Plan (as defined in ERISA Section 3(1)) or material fringe benefit plan or program,
or (v) stock purchase, stock option, severance pay, employment, change-in-control, vacation pay, company award, salary continuation,
sick leave, excess benefit, bonus or other incentive compensation, life insurance, or other employee benefit plan, contract, program,
policy or other arrangement, whether or not subject to ERISA, under which any present or former employee of the Company has any
present or future right to benefits sponsored or maintained by the Company or any ERISA Affiliate.


 


“Business Day”
means a day other than a Saturday, Sunday or other day on which banks located in New York, NY are authorized or required by Law
to close.


 


“Change in Control”
means an event or series of events by which (a) any “person” or “group” (as such terms are used in Sections
13(d) and 14(d) of the Exchange Act, but excluding any employee benefit plan of such person or its subsidiaries, and any person
or entity acting in its capacity as trustee, agent or other fiduciary or administrator of any such plan) becomes the “beneficial
owner” (as defined in Rules 13d-3 and 13d-5 under the Exchange Act, except that a person or group shall be deemed to have
“beneficial ownership” of all securities that such person or group has the right to acquire, whether such right is
exercisable immediately or only after the passage of time (such right, an “option right”)), directly or indirectly,
of more than 50% of the equity securities of the Company, as applicable, entitled to vote for members of the board of directors
or equivalent governing body of the Company, as applicable, on a fully-diluted basis (and taking into account all such securities
that such “person” or “group” has the right to acquire pursuant to any option right) or (b) during any
period of 24 consecutive months, a majority of the members of the board of directors or other equivalent governing body of the
Company, as applicable, cease to be composed of individuals (i) who were members of that board or equivalent governing body on
the first day of such period, (ii) whose election or nomination to that board or equivalent governing body was approved by individuals
referred to in clause (i) above constituting at the time of such election or nomination at least a majority of that board or equivalent
governing body or (iii) whose election or nomination to that board or other equivalent governing body was approved by individuals
referred to in clauses (i) and (ii) above constituting at the time of such election or nomination at least a majority of that board
or equivalent governing body. For the avoidance of doubt, the transactions contemplated by this Agreement shall not constitute
a Change of Control.


 


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


 


“Contract”
means any written agreement, contract, commitment, arrangement or understanding.


 


“ERISA”
means the Employee Retirement Income Security Act of 1974, as amended.


 



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“ERISA Affiliate”
means any Person who is, or at any time was, a member of a “controlled group of corporations” within the meaning of
Section 414(b) or (c) of the Code and, for the purpose of Section 302 of ERISA and/or Section 412, 4971, 4977, 4980D, 4980E and/or
each “applicable section” under Section 414(f)(2) of the Code, within the meaning of Section 412(n)(6) of the Code
that includes, or at any time included, the Company or any Affiliate thereof, or any predecessor of any of the foregoing.


 


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


 


“GAAP”
means United States generally accepted accounting principles of Company in effect as of the date of Closing.


 


“Governmental
Entity” means any entity or body exercising executive, legislative, judicial, regulatory or administrative functions
of or pertaining to United States federal, state or local government or foreign, international, multinational or other government,
including any department, commission, board, agency, bureau, official or other regulatory, administrative or judicial authority
thereof.


 


“Intellectual
Property” means (i) trade secrets, inventions, confidential and proprietary information, know-how, formulae and processes,
(ii) patents (including all provisionals, reissues, divisions, continuations and extensions thereof) and patent applications, (iii)
trademarks, trade names, trade dress, brand names, domain names, trademark registrations, trademark applications, service marks,
service mark registrations and service mark applications (whether registered, unregistered or existing at common law, including
all goodwill attaching thereto), (iv) copyrights, including copyright registrations, copyright applications and unregistered common
law copyrights; (v) and all licenses for the Intellectual Property listed in items (i) – (iv) above.


 


“IRS”
means the Internal Revenue Service.


 


“Knowledge of
the Seller” or any similar phrase means the actual knowledge of the Seller, without obligation of inquiry.


 


“Law”
means any statute, law, ordinance, rule, regulation of any Governmental Entity.


 


“Liability”
means all indebtedness, obligations and other liabilities and contingencies of a Person, whether absolute, accrued, contingent,
fixed or otherwise, or whether due or to become due.


 


“Lien”
means, with respect to any property or asset, any mortgage, lien, pledge, charge, security interest, hypothecation or other encumbrance
in respect of such property or asset.


 


“Material Adverse
Effect” means any material adverse effect on the assets, properties, condition (financial or otherwise), operations of
the Company and any of its Subsidiaries, taken as a whole, provided, however, that a Material Adverse Effect shall not include:
(i) changes in the national or world economy or financial markets as a whole or changes in general economic conditions that affect
the industries in which the Company and its Subsidiaries conduct their business, so long as such changes or conditions do not adversely
affect the Company and its Subsidiaries, taken as a whole, in a materially disproportionate manner relative to other similarly
situated participants in the industries or markets in which they operate; (ii) acts of war, sabotage or terrorism, military actions,
or the escalation thereof; (iii) Acts of God, force majeure, or natural disasters; (iv) any change in applicable Law or GAAP or
interpretation thereof after the date hereof, so long as such changes do not adversely affect the Company and its Subsidiaries,
taken as a whole, in a materially disproportionate manner relative to other similarly situated participants in the industries or
markets in which they operate; (v) the transactions contemplated by this Agreement becoming public; or (vi) compliance with the
terms of, and taking any action required by, this Agreement, or the taking or not taking any actions at the request of, or with
the consent of, the Buyer.


 



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“Order”
means any award, injunction, judgment, decree, order, ruling, subpoena or verdict or other decision issued, promulgated or entered
by or with any Governmental Entity of competent jurisdiction.


 


“Permit”
means any authorization, approval, consent, certificate, license, permit or franchise of or from any Governmental Entity of competent
jurisdiction or pursuant to any Law.


 


“Person”
means an individual, a corporation, a partnership, a limited liability company, a trust, an unincorporated association, a Governmental
Entity or any agency, instrumentality or political subdivision of a Governmental Entity, or any other entity or body.


 


“Representatives”
means, with respect to any Person, the respective directors, officers, employees, counsel, accountants and other representatives
of such Person.


 


“Securities
Act” means the Securities Act of 1933, as amended.


 


“Subsidiary”
means, with respect to any Person, any corporation, partnership, joint venture or other legal entity of which such Person (either
alone or through or together with any other Subsidiary), owns, directly or indirectly, more than 50% of the stock or other equity
interests, the holders of which are generally entitled to vote for the election of the board of directors or other governing body
of a non-corporate Person.


 


“Taxes”
means all federal, state, local and foreign income, profits, franchise, gross receipts, environmental, customs duty, capital stock,
severance, stamp, payroll, sales, transfer, employment, unemployment, disability, use, property, withholding, excise, production,
value added, occupancy and other taxes, duties or assessments of any nature whatsoever.


 


“Taxing Authority”
means any Governmental Entity having or purporting to exercise jurisdiction with respect to any Tax.


 


“Tax Returns”
means any return, declaration, report, claim for refund, or information return or statement relating to Taxes, including any schedule
or attachment thereto, and including any amendment thereof.


 


“Transaction Proposal” means any unsolicited
written bona fide proposal made by a third party relating to (i) any direct or indirect acquisition or purchase of all or substantially
all assets of the Company, (ii) any direct or indirect acquisition or purchase of a majority of the combined voting power of the
Shares, (iii) any merger, consolidation, business combination, recapitalization, liquidation, dissolution or similar transaction
involving the Company in which the other party thereto or its stockholders will own 51% or more of the combined voting power of
the parent entity resulting from any such transaction, or (iv) any other transaction that is inconsistent with the intent and
purpose of this Agreement.


 



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“$”
means United States dollars.


 


(b) For
purposes of this Agreement, except as otherwise expressly provided herein or unless the context otherwise requires: (i) the meaning
assigned to each term defined herein will be equally applicable to both the singular and the plural forms of such term and vice
versa, and words denoting any gender will include all genders as the context requires; (ii) where a word or phrase is defined herein,
each of its other grammatical forms will have a corresponding meaning; (iii) the terms “hereof”, “herein”,
“hereunder”, “hereby” and “herewith” and words of similar import will, unless otherwise stated,
be construed to refer to this Agreement as a whole and not to any particular provision of this Agreement; (iv) when a reference
is made in this Agreement to an Article, Section, paragraph, Exhibit or Schedule without reference to a document, such reference
is to an Article, Section, paragraph, Exhibit or Schedule to this Agreement; (v) a reference to a subsection without further
reference to a Section is a reference to such subsection as contained in the same Section in which the reference
appears, and this rule will also apply to paragraphs and other subdivisions; (vi) the word “include”, “includes”
or “including” when used in this Agreement will be deemed to include the words “without limitation”, unless
otherwise specified; (vii) a reference to any party to this Agreement or any other agreement or document will include such party’s
predecessors, successors and permitted assigns; (viii) a reference to any Law means such Law as amended, modified, codified, replaced
or reenacted as of the date hereof, and all rules and regulations promulgated thereunder as of the date hereof; and (ix) all accounting
terms used and not defined herein have the respective meanings given to them under GAAP.


 


ARTICLE II

PURCHASE AND SALE OF THE SHARES


 


2.1  Purchase
and Sale of the Shares. Upon the terms and subject to the conditions set forth in this Agreement, at the Closing the
Seller will sell, transfer and deliver, and the Buyer will purchase from the Seller, all of the Shares for an aggregate
purchase price of $1,600,000 (the “Purchase Price”) payable as described below.


 


(a) At
the Closing, the Deposit shall be released to the Seller.


 


(b) In
addition to the release of the Deposit to the Seller, $350,000 (the “Cash Portion”) shall be paid by the Buyer
to the Seller at the Closing through the delivery to the Seller of cash in immediately available funds.


 


(c) The
life insurance policies described in Section 2.1 of the Disclosure Schedule (the “Seller Policies”),
which are owned by the Seller, for which the Seller is the named insured, and the named beneficiary of which has heretofore been
the Company, shall be modified such that the Seller shall name a beneficiary of his choosing, which shall not be the Company.


 



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(d) At
the Closing, the Buyer shall issue to the Seller 11,000 shares (the “New Shares”) of the common stock, par value
$0.001 per share, of the Buyer (the “Buyer Common Stock”), which shares shall be duly authorized and validly
issued, fully paid and nonassessable, and free of preemptive rights (the “Share Issuance”).


 


(e) On
the 60th day following the Closing Date, the Buyer shall pay to the Seller an amount of cash in immediately available
funds equal to $300,000 (the “Closing Receivables Payment”), to the extent that such amount of accounts receivable
exist as of the Closing Date, without regard to whether the Buyer collects such accounts receivable at any time. For the avoidance
of doubt, the Closing Receivables Payment shall be made by the Buyer to the Seller regardless of whether the Company is able to
collect at least $300,000 of the accounts receivable during such 60-day period following the Closing Date.


 


(f) The
remaining $700,000 of the Purchase Price (the “Deferred Portion”) shall be paid by the Buyer to the Seller over
a period of two (2) years following the Closing in equal quarterly installments of $87,500 each, with the first such payment being
made on October 31, 2018, and the last such payment being made on July 31, 2020; provided, however, that, upon a Change in Control
of the Company after the Closing (and not as a result of the Closing), the Deferred Portion shall become immediately due and payable.


 


(g) The
Buyer’s obligations to pay the Seller the Closing Receivables Payment and to pay to the Seller the Deferred Portion shall
be secured by a first lien on the Shares and all of the assets of the Company pursuant to the pledge and security agreement described
in Section 7.2(j).


 





2.2 Adjustment
for Outstanding Indebtedness. The Cash Portion shall be decreased by the amount of any outstanding indebtedness for
borrowed money of the Company existing as of the Closing Date and the deducted amount shall be utilized to pay off such
outstanding indebtedness for borrowed money at the Closing. For the avoidance of doubt, indebtedness for borrowed money
specifically includes the approximately $60,000 in liabilities that are guaranteed by the Seller and described in Section
6.4 of the Disclosure Schedule and specifically excludes accounts payable of the Company incurred in the ordinary course
of business.


 


2.3 Closing.
The consummation of the Acquisition (the “Closing”) will take place by the reciprocal delivery of closing
documents by electronic mail, regular mail, fax or any other means mutually agreed upon by the parties hereto on a date that
is no later than two (2) Business Days immediately following the day on which the last of the conditions to closing contained
in Article VII (other than any conditions that by their nature are to be satisfied at the Closing) is satisfied or
waived in accordance with this Agreement or at such other location or on such other date as the Buyer and the Company may
mutually determine (the date on which the Closing actually occurs is referred to as the “Closing
Date”).


 


2.4 Transactions
to be Effected at the Closing.


 


(a) At
the Closing, the Buyer will (i) pay to the Seller the Cash Portion of the Purchase Price, adjusted in accordance with Section 2.2,
by paying such sum to the Seller by transfer of immediately available funds in accordance with instructions provided by the Seller
and (ii) deliver to the Seller all other documents, instruments or certificates required to be delivered by the Buyer at or prior
to the Closing pursuant to this Agreement.


 



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(b) At
the Closing, the Seller will deliver to the Buyer (i) a certificate or certificates representing his Shares duly endorsed or accompanied
by stock powers duly endorsed in blank and (ii) all other documents, instruments or certificates required to be delivered
by the Seller at or prior to the Closing pursuant to this Agreement.


 


(c) Immediately
prior to or at Closing, the Company will transfer title to the 2013 Ford F-150 FWD Super Crew Limited bearing vehicle identification
number 1FTFW1ET1DFD55313 to Seller, free and clear of all Liens and will transfer to Seller ownership of the cellular phones currently
used by the Seller and his spouse and the phone numbers associated therewith, which are (405) 615-8874 and (405) 627-1545.


 


ARTICLE III

REPRESENTATIONS AND WARRANTIES OF THE SELLER


 


The Seller represents
and warrants to the Buyer that each statement contained in this Article III is true and correct as of the date hereof.


 


3.1 Authority
and Enforceability. The Seller has the requisite legal capacity to execute and deliver this Agreement, to perform his
obligations hereunder and to consummate the Acquisition and the other transactions contemplated hereby. This Agreement has
been duly executed and delivered by the Seller and, assuming the due authorization, execution and delivery by each other
party hereto, constitutes a legal, valid and binding obligation of the Seller, enforceable against the Seller in accordance
with its terms, except as limited by (a) bankruptcy, insolvency, reorganization, moratorium, fraudulent conveyance or other
similar Laws relating to creditors’ rights generally and (b) general principles of equity, whether such enforceability
is considered in a proceeding in equity or at Law.


 


3.2 Noncontravention.


 


(a) Neither the execution
and the delivery of this Agreement nor the consummation of the Acquisition or the other transactions contemplated by this Agreement
will, with or without the giving of notice or the lapse of time or both, (i) to the actual knowledge of the Seller and assuming
compliance with the filing and notice requirements set forth in Section 3.2(b)(i), violate any Law applicable to the Seller or
(ii) violate any Contract to which the Seller is a party, except to the extent that any such violation would not reasonably be
expected to have, individually or in the aggregate, a material adverse effect on the assets, properties, or condition (financial
or otherwise) of the Seller.


 


(b) The
execution and delivery of this Agreement by the Seller does not, and the performance of this Agreement by the Seller will not,
require any consent, approval, authorization or Permit of, or filing with or notification to, any Governmental Entity, except where
the failure to take such action would not reasonably be expected to have, individually or in the aggregate, a material adverse
effect on the assets, properties, or condition (financial or otherwise), of the Seller.


 



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3.3 The
Shares. The Seller holds of record and owns beneficially all of the Shares free and clear of all Liens. The Seller is not
party to any Contract obligating the Seller to vote or dispose of any shares of the capital stock of, or other equity or
voting interests in, the Company. The Seller has the full right to sell, convey, transfer, assign and deliver the Shares,
without the need to obtain the consent or approval of any third party. At and as of the Closing, the Seller will convey the
Shares to the Buyer by instruments of assignment and transfer effective to vest in the Buyer, and the Buyer will have, good
and valid record and marketable title to the Shares, free and clear of all Liens.


 


3.4 Brokers’
Fees. The Seller does not have any Liability to pay any fees or commissions to any broker, finder or agent with respect
to this Agreement, the Acquisition or the transactions contemplated by this Agreement.


 


ARTICLE
IV

REPRESENTATIONS AND WARRANTIES CONCERNING THE COMPANY


 


The Seller represents
and warrants to the Buyer that each statement contained in this Article IV is true and correct as of the date hereof, except as
set forth in the schedule accompanying this Agreement (the “Disclosure Schedule”). The Disclosure Schedule
has been arranged for purposes of convenience only, in sections corresponding to the Sections of this Article IV. Each section
of the Disclosure Schedule will be deemed to incorporate by reference all information disclosed in any other section of the Disclosure
Schedule. Any representation or warranty concerning the Company shall be deemed to be a representation concerning the Company
and its Subsidiaries as a whole unless the context specifically requires otherwise.


 


4.1 Organization,
Qualification and Corporate Power; Authority and Enforceability.


 


(a) The
Company and each of its Subsidiaries is a corporation, limited liability company or other legal entity duly organized, validly
existing and in good standing (with respect to jurisdictions that recognize the concept of good standing) under the Laws of its
jurisdiction of organization, and has the requisite corporate, limited liability company or other organizational, as applicable,
power and authority to own, lease and operate its assets and to carry on its business as now conducted. Each of the Company and
its Subsidiaries is duly qualified or licensed to do business as a foreign corporation, limited liability company or other legal
entity and is in good standing (with respect to jurisdictions that recognize the concept of good standing) in each jurisdiction
where the character of the assets and properties owned, leased or operated by it or the nature of its business makes such qualification
or license necessary, except where the failure to be so qualified or licensed or to be in good standing, would not reasonably be
expected to have, individually or in the aggregate, a Material Adverse Effect.


 


(b) The
Company has the requisite power and authority to execute and deliver this Agreement, to perform its obligations hereunder and to
consummate the transactions contemplated hereby. The execution, delivery and performance by the Company of this Agreement and the
consummation by the Company of the transactions contemplated hereby have been duly authorized by all necessary action on the part
of the Company, and no other action is necessary on the part of the Company to authorize this Agreement or to consummate the Acquisition
or the other transactions contemplated hereby. This Agreement has been duly executed and delivered by the Company and, assuming
the due authorization, execution and delivery by each other party hereto, constitutes a legal, valid and binding obligation of
the Company, enforceable against the Company in accordance with its terms, except as limited by (i) bankruptcy, insolvency, reorganization,
moratorium, fraudulent conveyance or other similar Laws relating to creditors’ rights generally and (ii) general principles
of equity, whether such enforceability is considered in a proceeding in equity or at Law.


 



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4.2 Subsidiaries. Section
4.2 of the Disclosure Schedule sets forth for each Subsidiary of the Company (i) its name and jurisdiction of
incorporation, (ii) the number of shares of authorized capital stock of each class of its capital stock, (iii) the number of
issued and outstanding shares of each class of its capital stock, the names of the holders thereof, and the number of shares
held by each such holder, and (iv) the number of shares of its capital stock held in treasury. All of the issued and
outstanding shares of capital stock of each Subsidiary of the Company have been duly authorized and are validly issued, fully
paid, and nonassessable. One of the Company and its Subsidiaries holds of record and owns beneficially all of the outstanding
shares of each Subsidiary of the Company, free and clear of any restrictions on transfer (other than restrictions under the
federal and state securities laws), Taxes, Liens, options, warrants, purchase rights, contracts, commitments, equities,
claims, and demands. There are no outstanding or authorized options, warrants, preemptive rights, purchase rights,
subscription rights, conversion rights, exchange rights, or other contracts or commitments that could require any of the
Company and its Subsidiaries to sell, transfer, or otherwise dispose of any capital stock of any of its Subsidiaries or that
could require any Subsidiary of the Company to issue, sell, or otherwise cause to become outstanding any of its own capital
stock. There are no outstanding stock appreciation, phantom stock, profit participation, or similar rights with respect to
any Subsidiary of the Company. There are no voting trusts, proxies, or other agreements or understandings with respect to the
voting of any capital stock of any Subsidiary of the Company. Except as set forth in Section 4.2 of the Disclosure
Schedule, none of the Company and its Subsidiaries controls directly or indirectly or has any direct or indirect equity
participation in any corporation, partnership, trust, or other business association which is not a Subsidiary of the
Company.


 


4.3 Capitalization.


 


(a) The
authorized capital stock of the Company consists of 50,000 shares of Common Stock, par value $1.00 per share, of which 517 shares
are issued and outstanding. No other capital stock of the Company is authorized, issued or outstanding.


 


(b) Except
as set forth in Section 4.3 of the Disclosure Schedule, there are no outstanding options, warrants or other securities or
subscription, preemptive or other rights convertible into or exchangeable or exercisable for any shares of capital stock or other
equity or voting interests of the Company and there are no “phantom stock” rights, stock appreciation rights or other
similar rights with respect to the Company. There are no Contracts of any kind to which the Company is a party or by which the
Company is bound, obligating the Company to issue, deliver, grant or sell, or cause to be issued, delivered, granted or sold, additional
shares of capital stock of, or other equity or voting interests in, or options, warrants or other securities or subscription, preemptive
or other rights convertible into, or exchangeable or exercisable for, shares of capital stock of, or other equity or voting interests
in, the Company, or any “phantom stock” right, stock appreciation right or other similar right with respect to the
Company, or obligating the Company to enter into any such Contract.


 



    	 	9	 



     


    

 


(c) There
are no securities or other instruments or obligations of the Company, the value of which is in any way based upon or derived from
any capital or voting stock of the Company or having the right to vote (or convertible into, or exchangeable or exercisable for,
securities having the right to vote) on any matters on which the Company’s stockholders may vote.


 


(d) There
are no Contracts, contingent or otherwise, obligating the Company to repurchase, redeem or otherwise acquire any shares of capital
stock of, or other equity or voting interests in, the Company. There are no voting trusts, registration rights agreements or stockholder
agreements to which the Company is a party with respect to the voting of the capital stock of the Company or with respect to the
granting of registration rights for any of the capital stock of the Company. There are no rights plans affecting the Company.


 


(e) Except
as set forth in Section 4.3 of the Disclosure Schedule, there are no bonds, debentures, notes or other indebtedness of the
Company.


 


4.4 Noncontravention.


 


(a) Neither the execution
and delivery of this Agreement nor the consummation of the Acquisition and the other transactions contemplated by this Agreement
will, with or without the giving of notice or the lapse of time or both, (i) violate any provision of the articles of incorporation
or bylaws (or comparable organization documents, as applicable) of the Company, (ii) to the Knowledge of the Seller and assuming
compliance with the filing and notice requirements set forth in Section 4.4(b)(i), violate any Law applicable to the Company on
the date hereof or (iii) except as set forth in Section 4.4(a) of the Disclosure Schedule, violate any Contract to which
the Company is a party, except in the case of clauses (ii) and (iii) to the extent that any such violation would not reasonably
be expected to have, individually or in the aggregate, a Material Adverse Effect.


 


(b) To
the Knowledge of the Seller, the execution and delivery of this Agreement by the Company does not, and the performance of this
Agreement by the Company will not, require any consent, approval, authorization or Permit of, or filing with or notification to,
any Governmental Entity, except for (i) the filings set forth in Section 4.4(b) of the Disclosure Schedule or (ii) where
the failure to take such action would not reasonably be expected to have, individually or in the aggregate, a Material Adverse
Effect.


 


4.5 Financial
Statements. Section 4.5 of the Disclosure Schedule contains true and complete copies of (i) the unaudited
consolidated balance sheet of the Company and its Subsidiaries as of December 31, 2017 and the related unaudited consolidated
statements of income and cash flows for the two years ended December 31, 2017 and December 31, 2016 (the “Annual
Financial Statements”) and (ii) the unaudited consolidated balance sheet of the Company and its Subsidiaries as of
March 31, 2018 and the related statements of income and cash flows for the three-month period ended March 31, 2018 (the
“Interim Financial Statements” and, together with the Annual Financial Statements, the “Financial
Statements”). Except as set forth in Section 4.5 of the Disclosure Schedule, the Financial Statements have
been prepared in accordance with the Accounting Principles applied on a consistent basis throughout the periods involved
(except as may be indicated in the notes thereto) and, on that basis, fairly present, in all material respects, the financial
condition and results of operations of the Companies and their Subsidiaries as of the indicated dates and for the indicated
periods (subject to normal year-end adjustments and the absence of notes). Section 4.5 of the Disclosure Schedule
indicates the material differences between Accounting Principles and GAAP.


 



    	 	10	 



     


    

 


4.6 Taxes.
Except as set forth in Section 4.6 of the Disclosure Schedule:


 


(a) All material
Tax Returns required to have been filed by the Company have been filed, and each such Tax Return reflects the liability for
Taxes in all material respects. All Taxes shown on such Tax Returns as due have been paid or accrued.


 


(b) To the
Knowledge of the Seller, there is no audit pending against the Company in respect of any Taxes. There are no Liens on any of
the assets of the Company that arose in connection with any failure (or alleged failure) to pay any Tax, other than Liens for
Taxes not yet due and payable.


 




 


(c) The
Company has withheld and paid or accrued for all material Taxes required to have been withheld and paid or accrued for in connection
with amounts paid or owing to any third party.


 


(d) The
Company has not waived any statute of limitations in respect of Taxes or agreed to any extension of time with respect to a Tax
assessment or deficiency.


 


(e) The
Company is not a party to any Tax allocation or sharing agreement.


 


4.7 Compliance
with Laws and Orders; Permits. To the Knowledge of the Seller:


 


(a) The
Company is in compliance with all Laws and Orders to which the business of the Company is subject, except where such failure to
comply would not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect.


 


(b) The
Company owns, holds, possesses or lawfully uses in the operation of its business all Permits that are necessary for it to conduct
its business as now conducted, except where such failure to own, hold, possess or lawfully use such Permit would not reasonably
be expected to have, individually or in the aggregate, a Material Adverse Effect.


 


4.8  No
Undisclosed Liabilities. Except as set forth in Section 4.8 of the Disclosure Schedule, the Company does not have
any Liability, except for (a) Liabilities set forth on the Interim Financial Statements (rather than in any notes thereto)
and (b) Liabilities which have arisen since the date of the Interim Financial Statements in the ordinary course of business
(none of which results from, arises out of, relates to, is in the nature of, or was caused by any breach of contract, breach
of warranty, tort, infringement, or violation of Law).


 



    	 	11	 



     


    

 


4.9 Tangible
Personal Assets.


 


(a) The Company has
good title to, or a valid interest in, all of its tangible personal assets, free and clear of all Liens, other than (i) Liens
for current real or personal property Taxes that are not yet due and payable or that may hereafter be paid without material penalty
or that are being contested in good faith, (ii) statutory Liens of landlords and workers’, carriers’ and mechanics’
or other like Liens incurred in the ordinary course of business or that are being contested in good faith, (iii) Liens and encroachments
which do not materially interfere with the present or proposed use of the properties or assets they affect, (iv) Liens that will
be released prior to or as of the Closing, (v) Liens arising under this Agreement, (vi) Liens created by or through the Buyer,
(vii) Liens set forth on Section 4.9 of the Disclosure Schedule or (viii) Liens that, individually or in the aggregate,
do not materially interfere with the ability of the Company thereof to conduct its business as currently conducted and do not
adversely affect the value of, or the ability to sell, such personal properties and assets (the “Permitted Liens”).


 


(b) The
Company’s tangible personal assets are in operating condition and working order and repair, when taken as a whole, subject
to ordinary wear and tear and repairs from time to time in the ordinary course of business and are suitable for the purposes for
which they are currently being used.


 


4.10 Real
Property.


 


(a) Owned
Real Property.


 


The Company does not
own any real property.


 


(b) Leased
Real Property.


 


Section 4.10(b)
of the Disclosure Schedule contains a list of all leases and subleases (collectively, the “Real Property Leases”)
under which the Company is either lessor or lessee. The Seller has heretofore made available to the Buyer true and complete copies
of each Real Property Lease. To the Knowledge of the Seller, (i) all Real Property Leases are valid and binding Contracts of the
Company and are in full force and effect (except for those that have terminated or will terminate by their own terms), and (ii)
neither the Company or any other party thereto, is in violation or breach of or default (or with notice or lapse of time, or both,
would be in violation or breach of or default) under the terms of any such Contract, in each case, except where such default would
not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect.


 


4.11 Intellectual
Property.


 


(a) Section
4.11 of the Disclosure Schedule sets forth a list that includes all material Intellectual Property owned by the Company (the
“Company-Owned Intellectual Property”) that is registered or subject to an application for registration (including
the jurisdictions where such Company-Owned Intellectual Property is registered or where applications have been filed, and all registration
or application numbers, as appropriate).


 


(b) As
of the date hereof, all necessary registration, maintenance and renewal fees have been paid and all necessary documents have been
filed with the United States Patent and Trademark Office or foreign patent and trademark office in the relevant foreign jurisdiction
for the purposes of maintaining the registered Company-Owned Intellectual Property.


 



    	 	12	 



     


    

 


(c) Except
as set forth on Section 4.11 of the Disclosure Schedule, (i) the Company is the exclusive owner of the Company-Owned Intellectual
Property free and clear of all Liens (other than Permitted Liens); (ii) to the Knowledge of the Seller no proceedings have been
instituted, are pending or are threatened that challenge the rights of the Company in or the validity or enforceability of the
Company-Owned Intellectual Property; (iii) to the Knowledge of the Seller, neither the use of the Company-Owned Intellectual Property
as currently used by the Company in the conduct of the Company’s business, nor the conduct of the business as presently conducted
by the Company infringes, dilutes, misappropriates or otherwise violates in any material respect the Intellectual Property rights
of any Person; and (iv) as of the date of this Agreement, the Company has made no claim of a violation, infringement, misuse or
misappropriation by any Person, of their rights to, or in connection with, the Company-Owned Intellectual Property.


 


(d) Except
as set forth in Section 4.11 of the Disclosure Schedule, the Company has not permitted or licensed any Person to use any
Company-Owned Intellectual Property.


 


(e) Section
4.11 of the Disclosure Schedule sets forth a complete and accurate list of all licenses, other than “off the shelf”
commercially available software programs, pursuant to which the Company licenses from a Person Intellectual Property that is material
to and used in the conduct of the business by the Company.


 


(f) To the Knowledge
of the Seller, the Company is not in default in the performance, observance or fulfillment of any obligation, covenant or condition
contained in any Contract pursuant to which any third party is authorized to use any Company-Owned Intellectual Property or pursuant
to which the Company is licensed to use Intellectual Property owned by a third party, except where such default would not reasonably
be expected to have, individually or in the aggregate, a Material Adverse Effect.


 


4.12 Absence
of Certain Changes or Events.


 


Except as set forth
in Section 4.12 of the Disclosure Schedule, since the date of the Interim Financial Statements, no event has occurred that
has had, individually or in the aggregate, a Material Adverse Effect. Without limiting the generality of the foregoing, except
as set forth in Section 4.12 of the Disclosure Schedule, since that date:


 


(a) the
Company has not sold, leased, transferred, or assigned any of its assets, tangible or intangible, other than for a fair consideration
in the ordinary course of business;


 


(b)       the
Company has not entered into any agreement, contract, lease, or license (or series of related agreements, contracts, leases, and
licenses) either involving more than $50,000 or outside the ordinary course of business;


 


(c)       no
party (including the Company) has accelerated, terminated, modified, or cancelled any agreement, contract, lease, or license (or
series of related agreements, contracts, leases, and licenses) involving more than $50,000 to which the Company is a party or by
which any of them is bound;


 


(d)       the
Company has not imposed any Liens upon any of its assets, tangible or intangible;


 



    	 	13	 



     


    

 


(e)       the
Company has not made any capital expenditure (or series of related capital expenditures) either involving more than $50,000 or
outside the ordinary course of business;


 


(f)       the
Company has not made any capital investment in, any loan to, or any acquisition of the securities or assets of, any other Person
(or series of related capital investments, loans, and acquisitions) either involving more than $50,000 or outside the ordinary
course of business;



 


(g) the
Company has not transferred, assigned, or granted any license or sublicense of any rights under or with respect to any Intellectual
Property;


 


(h) there
has been no change made or authorized in the certificate of incorporation or bylaws of the Company;


 


(i) the
Company has not issued, sold, or otherwise disposed of any of its capital stock, or granted any options, warrants, or other rights
to purchase or obtain (including upon conversion, exchange, or exercise) any of its capital stock;


 


(j) the
Company has not made any loan to, or entered into any other transaction with, any of its directors, officers, and employees outside
the ordinary course of business;


 


(k) the
Company has not entered into any employment contract or modified the terms of any existing such contract or agreement;


 


(l) the
Company has not granted any increase in the base compensation of any of its directors, officers, and employees outside the ordinary
course of business; and


 


(m) the
Company has not committed to any of the foregoing.


 


4.13 Contracts.


 


(a) Except
as set forth in Section 4.13 of the Disclosure Schedule, as of the date hereof, the Company is not a party to or bound by
any: (i) Contract not contemplated by this Agreement that materially limits the ability of the Company to engage or compete in
any manner of the business presently conducted by the Company; (ii) Contract that creates a partnership or joint venture or similar
arrangement with respect to any material business of the Company; (iii) indenture, credit agreement, loan agreement, security agreement,
guarantee, note, mortgage or other evidence of indebtedness or agreement providing for indebtedness in excess of $50,000; (iv)
Contract that relates to the acquisition or disposition of any material business (whether by merger, sale of stock, sale of assets
or otherwise) other than this Agreement; and (v) Contract that involves performance of services or delivery of goods or materials
by or to the Company in an amount or with a value in excess of $50,000 in any 12-month period (which period may extend past the
Closing).


 


(b) The
Seller has heretofore made available to the Buyer true and complete copies of each of the Contracts set forth in Section 4.13
of the Disclosure Schedule. To the Knowledge of the Seller, (i) all such Contracts are valid and binding, subject to the effect
of any applicable bankruptcy, insolvency, reorganization, moratorium or other law affecting or relating to creditors’ rights
generally and general principles of equity (regardless of whether such enforceability is considered in a proceeding in equity or
at law), (ii) all such Contracts are in full force and effect (except for those that have terminated or will terminate by their
own terms), and (iii) neither the Company nor any other party thereto, is in violation or breach of or default under (or with notice
or lapse of time, or both, would be in violation or breach of or default under) the terms of any such Contract, in each case, except
where such default would not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect.


 



    	 	14	 



     


    

 


4.14 Litigation.
Except as set forth in Section 4.14 of the Disclosure Schedule, there is no Action pending or, to the Knowledge of the
Seller, threatened against the Company that (a) challenges or seeks to enjoin, alter or materially delay the Acquisition or
(b) would reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect.


 


4.15 Employee
Benefits.


 


(a) Section
4.15 of the Disclosure Schedule includes a list of all Benefit Plans maintained or contributed to by the Company or any of
its Subsidiaries (the “Company Benefit Plans”). The Seller has delivered or made available to the Buyer copies
of (i) each Company Benefit Plan, (ii) the most recent summary plan description for each Company Benefit Plan for which such a
summary plan description is required and (iii) the most recent favorable determination letters from the IRS with respect to each
Company Benefit Plan intended to qualify under Section 401(a) of the Code.


 


(b) Except
as set forth in Section 4.15 of the Disclosure Schedule, (i) none of the Company Benefit Plans is subject to Title IV of
ERISA; (ii) each Company Benefit Plan that is intended to be qualified under Section 401(a) of the Code is subject to a favorable
determination letter from the IRS and, to the Knowledge of the Seller, no event has occurred and no condition exists that is reasonably
likely to result in the revocation of any such determination; and (iii) each Company Benefit Plan is in compliance with all applicable
provisions of ERISA and the Code, except for instances of noncompliance that would not reasonably be expected to have, individually
or in the aggregate, a Material Adverse Effect.


 


(c) Neither
the execution or delivery of this Agreement nor the consummation of the transactions contemplated by this Agreement could reasonably
be expected to, either alone or in conjunction with any other event (whether contingent or otherwise), (i) result in any payment
or benefit becoming due or payable, or required to be provided, to any current or former director, employee or independent contractor
of the Company, (ii) increase the amount or value of any benefit or compensation otherwise payable or required to be provided to
any such current or former director, employee or independent contractor, or result in the acceleration of the time of payment,
vesting or funding of any such benefit or compensation, or (iii) result in any amount failing to be deductible by reason of Section
280G of the Code.


 


4.16 Labor
and Employment Matters. Section 4.16 of the Disclosure Schedule sets forth a list of all written employment
agreements that obligate the Company to pay an annual salary of $50,000 or more and to which the Company is a party. To the
Knowledge of the Seller, there are no pending labor disputes, work stoppages, requests for representation, pickets, work
slow-downs due to labor disagreements or any actions or arbitrations that involve the labor or employment relations of the
Company. The Company is not party to any collective bargaining agreement. The Company is in compliance with all foreign,
federal and state laws respecting employment and employment practices, terms and conditions of employment, wages and hours
and nondiscrimination in employment, and are not engaged in any unfair labor practice. There is no charge pending or, to the
Knowledge of the Seller, threatened against the Company alleging unlawful discrimination in employment practices before any
court or agency and there is no charge of or proceeding with regard to any unfair labor practice against the Company pending
before the National Labor Relations Board or any similar entity. The Company (i) has properly classified and treated all of
its workers as independent contractors or employees and (ii) has, to the extent permitted by Law, properly classified and
treated all of its employees as “exempt” or “nonexempt” from overtime requirements under applicable
Law.


 



    	 	15	 



     


    

 


4.17 Environmental.
Except (a) as set forth in Section 4.17 of the Disclosure Schedule or (b) for any matter that would not reasonably be
expected to have, individually or in the aggregate, a Material Adverse Effect, to the Knowledge of the Seller (i) the Company
is in compliance with all applicable Laws relating to protection of the environment (“Environmental
Laws”), (ii) the Company possesses and is in compliance with all Permits required under any Environmental Law for
the conduct of its operations and (iii) there are no Actions pending against the Company alleging a violation of any
Environmental Law.


 


4.18 Insurance. Section
4.18 of the Disclosure Schedule sets forth a list of each insurance policy that covers the Company or its businesses,
properties, assets, directors, officers or employees (the “Policies”). Such Policies are in full force and
effect in all material respects and the Company is not in violation or breach of or default under any of its obligations
under any such Policy, except where such default would not reasonably be expected to have, individually or in the aggregate,
a Material Adverse Effect.


 


4.19 Brokers’
Fees. Except as set forth in Section 4.19 of the Disclosure Schedule, which such fees shall be paid prior to or at
Closing with the Company’s cash, the Company has no Liability to pay any fees or commissions to any broker, finder or
agent with respect to this Agreement, the Acquisition or the transactions contemplated by this Agreement.


 


4.20 Equipment. Section
4.20 of the Disclosure Schedule sets forth a complete and accurate list of all plants, fixtures, machinery,
installations, equipment, furniture, tools, spare parts, supplies, materials and other personal property (but excluding
inventories, including raw materials, parts, work in process, packaging and finished goods) (collectively, the
“Equipment”), owned by the Company other than items having a net book or market value individually of less
than five thousand dollars ($5,000) or expensed for tax purposes, as of the date of the Interim Financial Statements. The
Company has not acquired an item of Equipment for in excess of such amount since such date. The Equipment, and all personal
property held by the Company, are utilized by the Company in the ordinary course of business.


 


4.21 Inventories.
All of the Company’s inventories, including raw materials, parts, work in process, packaging and finished goods,
consist solely of, and will consist solely of, material and goods of a quality and quantity which are usable or saleable in
the normal course of the business carried on by the Company. Such inventories are adequate for present needs of the business
of the Company, and shall be fairly reflected on the books of account of the Company in accordance with best practices and
consistent with the Company’s previous accounting methods.


 



    	 	16	 



     


    

 


4.22 Vendors. Section
4.22 of the Disclosure Schedule lists the five (5) largest vendors of the Company based on the dollar amount of
purchases and sales for the fiscal year ended December 31, 2017. The relationships of the Company with such vendors are good
commercial working relationships, and no vendor of material importance to the Company has (a) cancelled or otherwise
terminated, or threatened to cancel or otherwise to terminate, its relationship with the Company, or (b) during the last
twelve (12) months decreased materially, or threatened to decrease or limit materially, its services, supplies or materials
for use in the business of the Company.


 


4.23 Potential
Conflicts of Interest. Except as set forth in Section 4.23 of the Disclosure Schedule, no officer, director,
stockholder (or Affiliate thereof) or, to the Knowledge of the Seller, employee of the Company (a) owns, directly or
indirectly, any interest in (excepting not more than 1% stock or other equity securities for investment purposes in
securities of publicly held and traded companies) or is an officer, director, manager, employee or consultant of any Person
which is a competitor, lessor, lessee, customer or supplier of any of the Company; (b) owns, directly or indirectly, in whole
or in part, any tangible or intangible property which the Company is using or the use of which is necessary for their
business; (c) has any cause of action or other claim whatsoever against, or owes any amount to, the Company, except for
claims in the ordinary course of business, such as for accrued vacation pay, accrued benefits under any Company Benefit Plan
and similar matters and agreements; or (d) is party to any agreement, contract or commitment with the Company or has received
any loan, advance or investment from the Company that has not been repaid in full prior to the date hereof.


 


4.24 Product
Warranty; Product Liability. The Company does not manufacture any products. To the Knowledge of the Seller, (a) each
product sold, leased, or delivered by the Company has been in conformity with all applicable contractual commitments and all
express and implied warranties, and (b) the Company has no liabilities (whether accrued, absolute, contingent, unliquidated
or otherwise, whether due or to become due and regardless of when or by whom asserted) for replacement or repair thereof or
other damages in connection therewith, in excess of the reserve for product warranty claims (if any) that are set forth in
the Interim Financial Statements. No product sold or delivered by the Company is subject to any guaranty, warranty, or other
indemnity by the Company beyond the applicable standard terms and conditions of sale. The Company has no liability arising
out of any injury to individuals or property as a result of the ownership, possession, or use of any product sold or
delivered by the Company, except liabilities for which appropriate reserves have been established in accordance with best
practices and consistent with the Company’s previous accounting methods.


 


4.25 Officers
and Directors; Bank Accounts, Signing Authority, Powers of Attorney. Section 4.25 of the Disclosure Schedule lists
all officers and directors of the Company. Except as set forth in Section 4.25 of the Disclosure Schedule, the Company
does not have an account or safe deposit box in any bank and no Person has any power, whether singly or jointly, to sign any
checks on behalf of the Company, to withdraw any money or other property from any bank, brokerage or other account of the
Company or to act under any power of attorney granted by the Company at any time for any such purpose. Section 4.25 of the
Disclosure Schedule also sets forth the names of all Persons authorized to borrow money or sign notes on behalf of the
Company.


 



    	 	17	 



     


    

 


4.26 Accounts
Receivable. All accounts and notes receivable of the business of the Company arose in the ordinary and usual course of
the business, represent valid obligations due, and except for instalment loan contracts and customer side notes either have
been collected in full or, to the Knowledge of the Seller, are collectable in full not later than 60 days after the invoice
or due date of such receivables.


 


4.27 Disclosure.
The representations and warranties contained in this Article IV do not contain any untrue statement of a material fact or
omit to state any material fact necessary in order to make the statements and information contained in this Article IV not
misleading.


 


ARTICLE V

REPRESENTATIONS AND WARRANTIES OF THE BUYER


 


The Buyer represents
and warrants to the Seller that each statement contained in this Article V is true and correct as of the date hereof.


 


5.1 Organization.
The Buyer is a corporation, duly organized, validly existing and in good standing under the laws of the State of Nevada.


 


5.2 Authorization.
The Buyer has the requisite power and authority to execute and deliver this Agreement, to perform its obligations hereunder
and to consummate the transactions contemplated hereby. The execution, delivery and performance by the Buyer of this
Agreement, and the consummation of the transactions contemplated hereby, have been duly authorized by all necessary action,
and no other action on the part of the Buyer or the shareholders of the Buyer is necessary to authorize this Agreement or to
consummate the transactions contemplated hereby. This Agreement has been duly executed and delivered by the Buyer and,
assuming the due authorization, execution and delivery by each of the other parties hereto, constitutes a legal, valid and
binding obligation of the Buyer enforceable against the Buyer in accordance with its terms, except as limited by (a)
bankruptcy, insolvency, reorganization, moratorium, fraudulent conveyance or other similar Laws relating to creditors’
rights generally and (b) general principles of equity, whether such enforceability is considered in a proceeding in equity or
at Law.


 


5.3 Noncontravention.


 


(a) Neither
the execution and the delivery of this Agreement, nor the consummation of the Acquisition and the other transactions contemplated
by this Agreement, will, with or without the giving of notice or the lapse of time or both, (i) violate any provision of the
articles of incorporation or bylaws of the Buyer, (ii) violate any Law applicable to the Buyer on the date hereof or (iii) violate
any Contract to which the Buyer is a party, including, without limitation, the Buyer’s lending arrangements, except in the
case of clauses (ii) and (iii) to the extent that any such violation would not reasonably be expected to prevent or materially
delay the consummation of the Acquisition and the other transactions contemplated by this Agreement.


 


(b) The
execution and delivery of this Agreement by the Buyer does not, and the performance of this Agreement by the Buyer will not, require
any consent, approval, authorization or Permit of, or filing with or notification to, any Governmental Entity, except for (i) the
filings set forth in Section 4.4(b)(i), (ii) post-closing securities filings or notifications required to be made under federal
securities laws, or (ii) where the failure to take such action would not reasonably be expected to have, individually or in
the aggregate, a material adverse effect on the assets, properties, condition (financial or otherwise), operations of the Buyer
and any of its Subsidiaries, taken as a whole.


 



    	 	18	 



     


    

 


5.4 Brokers’
Fees. The Buyer has no Liability to pay any fees or commissions to any broker, finder or agent with respect to this
Agreement, the Acquisition or the transactions contemplated by this Agreement that could result in any Liability being
imposed on the Seller or the Company.


 


5.5 Sufficiency
of Funds. The Buyer has sufficient cash on hand or other sources of immediately available funds to enable it to make the
payment of the Cash Portion and the Closing Receivables and consummate the transactions contemplated by this Agreement.


 


5.6 Litigation.
There is no Action pending or threatened against the Buyer that challenges or seeks to enjoin, alter or materially delay the
Acquisition or the other transactions contemplated by this Agreement. To the Buyer’s Knowledge, no event has occurred
or circumstances exist that may give rise or serve as a basis for any such Action.


 


5.7 Capitalization.
As of the date of this Agreement, the authorized capital stock of the Buyer consists of (i) 300,000,000 shares of the
Buyer Common Stock, 28,026,713 of which are issued and outstanding, and (ii) 20,000 shares of Series D Preferred Stock, par
value $0.001 per share (the “Series D Preferred Shares”), 6,666.67 of which are issued and
outstanding.  As of the date of this Agreement, (i) no shares of the Buyer Common Stock are held in the treasury of
Buyer, (ii) 83,405 shares of the Buyer Common Stock are reserved for issuance upon the conversion of the outstanding Series D
Preferred Shares, (iii) 221,713 shares of Buyer Common Stock are reserved for issuance upon exercise of outstanding options,
(iv) 2,361,713 shares of Buyer Common Stock are reserved for issuance upon exercise of outstanding warrants, and (v)
15,000,000 shares of the Buyer Common Stock are reserved for issuance under employee benefit plans of the Buyer. The issued
and outstanding shares of the Buyer Common Stock and the Series D Preferred Stock have been, and the New Shares to be issued
hereunder will be, duly authorized and validly issued, fully paid and nonassessable, and free of preemptive rights. The Buyer
has not, subsequent to March 31, 2018, declared or paid any dividend, or declared or made any distribution on, or authorized
the creation or issuance of, or issued, or authorized or effected any split-up or any other recapitalization of, any of its
capital stock, or directly or indirectly redeemed, purchased or otherwise acquired any of its outstanding capital stock.
Except for the Series D Preferred Shares, the Buyer has not heretofore agreed to take any such action, and there are no
outstanding contractual obligations of the Buyer of any kind to redeem purchase or otherwise acquire any outstanding shares
of capital stock of the Buyer. There are no outstanding bonds, debentures, notes or other indebtedness or securities of the
Buyer having the right to vote on any matters on which stockholders of the Buyer may vote. Except as set forth above in this
Section 5.8, no shares of capital stock or other voting securities of the Buyer are issued, reserved for issuance or
outstanding, and there are no outstanding securities, options, warrants, calls, rights, commitments, agreements,
arrangements or undertakings of any kind to which the Buyer is a party or by which any of them is bound obligating the Buyer
to issue, deliver or sell, or cause to be issued, delivered or sold, additional shares of capital stock or other voting
securities of the Buyer or obligating the Buyer to issue, grant, extend or enter into any such security, option, warrant,
call, right, commitment, agreement, arrangement or undertaking.


 



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5.8 SEC
Reports and Financial Statements. The Buyer has filed with the Securities and Exchange Commission (the
“SEC”) all forms, reports, schedules, registration statements, definitive proxy statements and other
documents (collectively, including all exhibits thereto, the “Buyer SEC Reports”) required to be filed by
the Buyer with the SEC. As of their respective dates, and giving effect to any amendments or supplements thereto filed prior
to the date of this Agreement, the Buyer SEC Reports complied in all material respects with the requirements of the Exchange
Act, as amended, and the respective rules and regulations of the SEC promulgated thereunder applicable to such Buyer SEC
Reports, and none of the Buyer SEC Reports contained any untrue statement of a material fact or omitted to state any 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. There are no outstanding comments from the Staff of the SEC with respect to any of the
Buyer SEC Reports.


 


ARTICLE VI

COVENANTS


 


6.1 Consents.
The Company will use its commercially reasonable efforts to obtain any required third-party consents to the Acquisition and
the other transactions contemplated by this Agreement in writing from each Person.


 


6.2 Operation
of the Company’s Business. During the period commencing on the date hereof and ending at the earlier of the Closing
and the termination of this Agreement in accordance with Article VIII, the Company, except (i) as otherwise contemplated by
this Agreement, (ii) as required by applicable Law or (iii) with the prior written consent of the Buyer (which consent will
not be unreasonably withheld or delayed), will use commercially reasonable efforts to carry on its business in a manner
consistent with past practice and not take any action or enter into any transaction that would result in the following:


 


(a) any
change in the articles of incorporation or bylaws of the Company or any amendment of any material term of any outstanding security
of the Company;


 


(b) any
issuance or sale of any additional shares of, or rights of any kind to acquire any shares of, any capital stock of any class of
the Company (whether through the issuance or granting of options or otherwise);


 


(c) any
incurrence, guarantee or assumption by the Company of any indebtedness for borrowed money other than in the ordinary course of
business in amounts and on terms consistent with past practice;


 





(d)
any change in any method of accounting, accounting principle or accounting practice by the Company which would reasonably be
expected to have, individually or in the aggregate, a Material Adverse Effect;


 


(e) except
in the ordinary course of business (i) any adoption or material amendment of any Company Benefit Plan, (ii) any entry into any
collective bargaining agreement with any labor organization or union, (iii) any entry into an employment agreement or (iv) any
increase in the rate of compensation to any employee in an amount that exceeds 10% of such employee’s current compensation;
provided, that the Company may (A) take any such action for employees in the ordinary course of business or pursuant to
any existing Contracts or Company Benefit Plans and (B) adopt or amend any Company Benefit Plan if the cost to such Person of providing
benefits thereunder is not materially increased;


 



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(f) except
in the ordinary course of business, any cancellation, modification, termination or grant of waiver of any material Permits or Contracts
to which the Company is a party, which cancellation, modification, termination or grant of waiver would, individually or in the
aggregate, have a Material Adverse Effect;


 


(g) any
change in the Tax elections made by the Company or in any accounting method used by the Company for Tax purposes, where such Tax
election or change in accounting method may have a material effect upon the Tax Liability of the Company for any period or set
of periods, or the settlement or compromise of any material income Tax Liability of the Company;


 


(h) except
in the ordinary course of business, any acquisition or disposition of any business or any material property or asset of any Person
(whether by merger, consolidation or otherwise) by the Company;


 


(i) any
grant of a Lien on any properties and assets of the Company that would have, individually or in the aggregate, a Material Adverse
Effect; provided, however, Company may grant a Lien on its assets in the ordinary course of business; or


 


(j) any
entry into any agreement or commitment to do any of the foregoing.


 


6.3 Access.
The Company will permit the Buyer and its Representatives to have reasonable access at all reasonable times during normal
business, and in a manner so as not to interfere with the normal business operations of the Company, to the premises,
properties, personnel, books, records (including Tax records), Contracts and documents of or pertaining to the Company.


 


6.4 Transfer
of Cash and Cash Equivalents. At Closing and subject to the last sentence of this Section 6.4, the Company and Seller
will transfer, or cause to be distributed all cash and cash equivalents of the Company to, among other things, pay any fees
owed by Company to brokers or advisors (including termination fees under any advisory agreement) and extinguish any
indebtedness for borrowed money, including approximately $60,000 in liabilities that are guaranteed by the Seller and
described in Section 6.4 of the Disclosure Schedule. Notwithstanding the foregoing, the Company shall have an amount
in cash in its corporate bank account at the Closing that is equal to at least $200,000 in the aggregate.


 


6.5 Ongoing
Operations and Employment Benefits Matters. For a period of three (3) years after the Closing Date, (a) the Company shall
provide the current or equivalent health insurance plan of the Company to the Seller and his spouse on a basis consistent with
the terms, conditions and overall administration of such plan and consistent with Section 7.1(j) of this Agreement, and (b) the
Buyer and the Company will use their reasonable best efforts to operate the Company’s business in the geographic area where
the Company has operated its business heretofore and to employ for that purpose the current employees of the Company other than
the Seller. For a period of two (2) years following the Closing Date, the Company shall automatically forward all emails sent
to the corporate email address smatheson@pt-hb.com to the following personal email address: stewptech@yahoo.com.


 



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6.6 Notice
of Developments. The Seller and the Company will give prompt written notice to the Buyer of any event that would
reasonably be expected to give rise to, individually or in the aggregate, a Material Adverse Effect or would reasonably be
expected to cause a breach of any of its respective representations, warranties, covenants or other agreements contained
herein. The Buyer will give prompt written notice to the Seller and the Company of any event that could reasonably be
expected to cause a breach of any of its representations, warranties, covenants or other agreements contained herein or could
reasonably be expected to, individually or in the aggregate, prevent or materially delay the consummation of the Acquisition
and the other transactions contemplated by this Agreement. The delivery of any notice pursuant to this Section 6.6 will not
limit, expand or otherwise affect the remedies available hereunder (if any) to the party receiving such notice.


 


6.7 No
Solicitation.


 


(a) The
Seller and the Company will, and will cause each of their Representatives to, cease immediately any existing discussions regarding
a Transaction Proposal.


 


(b) From
and after the date of this Agreement, without the prior consent of the Buyer, neither the Seller nor the Company will, nor will
they authorize or permit any of their respective Representatives to, directly or indirectly through another Person to, (i) solicit,
initiate or encourage (including by way of furnishing information), or take any other action designed to facilitate any inquiries,
proposals or offers from any Person that constitute, or would reasonably be expected to constitute, a Transaction Proposal, (ii) participate
in any discussions or negotiations (including by way of furnishing information) regarding any Transaction Proposal or (iii) otherwise
cooperate in any way with, or assist or participate in, facilitate or encourage, any effort or attempt by any other Person to do
or seek any of the foregoing.


 


(c) In
addition, the Seller shall immediately communicate to the Buyer the terms of any Transaction Proposal received by the Seller or
the Company, or any of their Representatives.


 


6.8 Covenant
not to Compete. For a period of five years from and after the Closing, or, if sooner, until any failure by the Buyer to
satisfy its obligations under Article II hereof (the “Noncompetition Period”), the Seller shall not engage
directly or indirectly in any business that is competitive with the current business of the Company (the
“Business”) in any geographic area in which the Business is conducted; provided, however, that no owner of
less than 1% of the outstanding stock of any publicly-traded corporation shall be deemed to engage solely by reason thereof
in any of its businesses. During the Noncompetition Period, the Seller shall not induce or attempt to induce any customer, or
supplier of the Buyer or any affiliate of the Buyer to terminate its relationship with the Buyer or any Affiliate of the
Buyer or to enter into any business relationship to provide or purchase the same or substantially the same services as are
provided to or purchased from the Business which might harm the Buyer or any Affiliate of the Buyer. During the
Noncompetition Period, the Seller shall not, on behalf of any entity other than the Buyer or an Affiliate of the Buyer, hire
or retain, or attempt to hire or retain, in any capacity any Person who is, or was at any time during the preceding twelve
(12) months, an employee or officer of the Buyer or an Affiliate of the Buyer. If the final judgment of a court of competent
jurisdiction declares that any term or provision of this Section 6.8 is invalid or unenforceable, the parties agree that the
court making the determination of invalidity or unenforceability shall have the power to reduce the scope, duration, or area
of the term or provision, to delete specific words or phrases, or to replace any invalid or unenforceable term or provision
with a term or provision that is valid and enforceable and that comes closest to expressing the intention of the invalid or
unenforceable term or provision, and this Agreement shall be enforceable as so modified after the expiration of the time
within which the judgment may be appealed.


 



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6.9 Financial
Information. The Seller shall cooperate with the Buyer and the Buyer’s independent certified public accounting firm
in order to enable the Buyer to create audited financial statements prepared in accordance with the GAAP for the two full
fiscal years preceding the Closing Date, by making available the Seller’s records as they are maintained in the
ordinary course of business and answering reasonable questions.


 


6.10 Taking
of Necessary Action; Further Action. Subject to the terms and conditions of this Agreement, each of the Seller, the
Company and the Buyer will take all such reasonable and lawful action as may be necessary or appropriate in order to
effectuate the Acquisition in accordance with this Agreement as promptly as practicable.


 


6.11 Collection
of Closing Receivables. If and to the extent requested by the Buyer, the Seller
shall take such actions as may be reasonably necessary or advisable to facilitate the collection of any Closing
Receivables.


 


6.12 Public
Reporting and Restrictive Legend. The Buyer shall, until the one year anniversary of the date of the Share Issuance,
during any period in which the Buyer (a) is not subject to Section 13 or 15(d) of the Exchange Act, make available,
upon request of the Seller, in connection with any sale thereof, the information required by Rule 144(c)(1) under the
Securities Act, and (b) is subject to Section 13 or 15 (d) of the Exchange Act, make all filings required
thereby in a timely manner. On the one year anniversary of the Share Issuance, or, if earlier, upon the delivery by the
Seller of an opinion of counsel that the New Shares are being transferred pursuant to an exemption from registration under
the Securities Act, Buyer shall, at the request of the Seller, remove from any certificate representing the New Shares any
legend restricting their transfer.


 


ARTICLE VII

CONDITIONS TO OBLIGATIONS TO CLOSE


 


7.1 Conditions
to Obligation of the Buyer. The obligation of the Buyer to consummate the Acquisition is subject to the satisfaction or
waiver by the Buyer of the following conditions:


 


(a) The
representations and warranties of the Seller set forth in this Agreement will be true and correct in all respects as of the date
of this Agreement and as of the Closing Date (except to the extent such representations and warranties speak as of another date,
in which case such representations and warranties will be true and correct as of such other date), except where the failure of
such representations and warranties to be so true and correct (without giving effect to any limitation as to “materiality”
or “Material Adverse Effect” set forth therein) does not have, and would not reasonably be expected to have, individually
or in the aggregate, a Material Adverse Effect. The Buyer will have received a certificate signed by the Seller to such effect.


 



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(b) Each
of the Seller and the Company will have performed all of the covenants required to be performed by it under this Agreement at or
prior to the Closing, except where the failure to perform does not have, and would not reasonably be expected to have, individually
or in the aggregate, a Material Adverse Effect or materially adversely affect the ability of each of the Seller and the Company
to consummate the Acquisition or perform its other obligations hereunder. The Buyer will have received a certificate signed by
the Seller to such effect.


 


(c) The
Buyer shall have completed its legal due diligence review of the Company and the Business, its assets and liabilities, and the
results thereof shall be reasonably satisfactory to the Buyer.


 


(d) There
shall not have been any occurrence, event, incident, action, failure to act, or transaction since the date of the Interim Financial
Statements which has had or is reasonably likely to cause a Material Adverse Effect.


 


(e) All
applicable waiting periods (and any extensions thereof) will have expired or otherwise been terminated, and the parties hereto
will have received all other authorizations, consents and approvals of all Governmental Entities in connection with the execution,
delivery and performance of this Agreement and the transactions contemplated hereby.


 


(f) No
temporary, preliminary or permanent restraining Order preventing the consummation of the Acquisition will be in effect.


 


(g) Each
party, as appropriate, shall have obtained any required consents, permits, licenses, approvals or notifications of any lenders,
lessors, suppliers, customers or other third parties for which the Buyer will assume responsibility for properly completing any
and all necessary forms required when applying for and securing any necessary transfers.


 


(h) The
Seller shall have (i) obtained releases of any liens or (ii) a payoff letter confirming the payoff due from Company at Closing
reasonably acceptable to the Buyer, regarding charges or encumbrances against any of the assets of the Company, at the Seller’s
expense.


 


(i) The
Buyer shall have received such pay-off letters and releases relating to the indebtedness described on Section 4.3 of the Disclosure
Schedule as it shall have requested and such pay-off letters shall be in form and substance reasonably satisfactory to it.


 


(j) The
Company and the Seller shall have entered into a strategic advisor consulting agreement in the form set forth as Exhibit A
to this Agreement (the “Consulting Agreement”) for a term of two years that includes annual compensation of
$40,000.


 


(k) Company
employees identified on Section 7.1 of the Disclosure Schedule shall have entered into non-competition and non-solicitation
agreements in form and substance satisfactory to the Buyer.


 



    	 	24	 



     


    

 


(l) The
Company shall have delivered evidence reasonably satisfactory to the Buyer of the Company’s corporate organization and proceedings
and its existence in the jurisdiction in which it is incorporated, including evidence of such existence as of the Closing.


 


(m) All
actions to be taken by the Seller in connection with consummation of the transactions contemplated hereby and all certificates,
opinions, instruments, and other documents required to effect the transactions contemplated hereby will be satisfactory in form
and substance to the Buyer.


 


7.2 Conditions
to Obligation of the Seller. The obligation of the Seller to consummate the Acquisition is subject to the satisfaction or
waiver by the Seller of the following conditions:


 


(a) The
representations and warranties of the Buyer set forth in this Agreement will be true and correct in all respects as of the date
of this Agreement and as of the Closing Date (except to the extent such representations and warranties speak as of another date,
in which case such representations and warranties will be true and correct as of such other date), except where the failure of
such representations and warranties to be so true and correct does not adversely affect the ability of the Buyer to consummate
the Acquisition and the other transactions contemplated by this Agreement. The Seller will have received a certificate signed on
behalf of the Buyer by a duly authorized officer of the Buyer to such effect.


 


(b) The
Buyer will have performed in all material respects all of the covenants required to be performed by it under this Agreement at
or prior to the Closing except such failures to perform as do not materially adversely affect the ability of the Buyer to consummate
the Acquisition and the other transactions contemplated by this Agreement. The Seller will have received a certificate signed on
behalf of the Buyer by a duly authorized officer of the Buyer to such effect.


 


(c) All
applicable waiting periods (and any extensions thereof) will have expired or otherwise been terminated and the parties hereto will
have received all other authorizations, consents and approvals of all Governmental Entities in connection with the execution, delivery
and performance of this Agreement and the transactions contemplated hereby.


 


(d) No
temporary, preliminary or permanent restraining Order preventing the consummation of the Acquisition will be in effect.


 


(e) Each
party, as appropriate, shall have obtained any required consents, permits, licenses, approvals or notifications of any Governmental
Entities, lenders, lessors, suppliers, customers or other third parties for which the Buyer will assume responsibility for properly
completing any and all necessary forms required when applying for and securing any necessary transfers.


 


(f) The
Company and the Seller shall have entered into the Consulting Agreement.


 


(g) The
Cash Portion, subject to adjustment as set forth in this Agreement, shall have been paid to the Seller.


 



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(h) The
Buyer and the Seller shall have provided written instruction to the Escrow Agent for release of the Deposit in accordance with
the terms of the Escrow Agreement.


 


(i) The
Company shall have transferred the Seller Policies to the Seller.


 


(j) The
Buyer, the Company and the Seller shall have entered into a pledge and security agreement in the form of Exhibit B to this
Agreement that grants to the Seller a first priority security interest in the Shares and the assets of the Company to secure the
Buyer’s obligation to pay the Seller the Closing Receivables Payment and to pay to the Seller the Deferred Portion.


 


(k) All
actions to be taken by the Buyer in connection with consummation of the transactions contemplated hereby and all certificates,
opinions, instruments, and other documents required to effect the transactions contemplated hereby will be satisfactory in form
and substance to the Seller.


 


ARTICLE VIII

TERMINATION; AMENDMENT; WAIVER


 


8.1 Termination
of Agreement. This Agreement may be terminated as follows:


 


(a) by
mutual written consent of the Buyer and the Seller at any time prior to the Closing;


 


(b) by
either the Buyer or the Seller if any Governmental Entity will have issued an Order or taken any other action permanently enjoining,
restraining or otherwise prohibiting the transactions contemplated by this Agreement;


 


(c) by
either the Buyer or the Seller if the Closing does not occur on or before July 31, 2018; provided that the right to terminate
this Agreement under this Section 8.1(c) will not be available to any party whose breach of any provision of this Agreement results
in the failure of the Closing to occur by such time;


 


(d) by
the Buyer if the Seller has breached his representations and warranties or any covenant or other agreement to be performed by him
in a manner such that the Closing conditions set forth in Section 7.1(a) or 7.1(b) would not be satisfied; or


 


(e) by
the Seller if the Buyer has breached its representations and warranties or any covenant or other agreement to be performed by it
in a manner such that the Closing conditions set forth in Section 7.2(a) or 7.2(b) would not be satisfied.


 


8.2 Effect
of Termination. In the event of termination of this Agreement by either the Seller or the Buyer as provided in
Section 8.1, this Agreement will forthwith become void and have no effect, without any Liability (other than with
respect to any suit for breach of this Agreement) on the part of the Buyer, the Company or the Seller (or any stockholder,
agent, consultant or Representative of any such party); provided, that the provisions of Sections 10.1, 10.6, 10.7,
10.8, 10.11, 10.14 and this Section 8.2 will survive any termination hereof pursuant to Section 8.1.


 



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8.3 Amendments.
This Agreement may not be amended except by an instrument in writing signed on behalf of the Buyer, the Company and the
Seller.


 


8.4 Waiver.
At any time prior to the Closing, the Buyer may (a) extend the time for the performance of any of the covenants,
obligations or other acts of the Seller and the Company or (b) waive any inaccuracy of any representations or warranties
or compliance with any of the agreements, covenants or conditions of the Seller or any conditions to his own obligations. Any
agreement on the part of the Buyer to any such extension or waiver will be valid only if such waiver is set forth in an
instrument in writing signed on its behalf by its duly authorized officer. At any time prior to the Closing, the Seller and
the Company, may (a) extend the time for the performance of any of the covenants, obligations or other acts of the Buyer
or (b) waive any inaccuracy of any representations or warranties or compliance with any of the agreements, covenants or
conditions of the Buyer or any conditions to their own obligations. Any agreement on the part of the Seller and the Company
to any such extension or waiver will be valid only if such waiver is set forth in an instrument in writing signed by the
Seller and the Company. The failure of any party to this Agreement to assert any of its rights under this Agreement or
otherwise will not constitute a waiver of such rights. The waiver of any such right with respect to particular facts and
other circumstances will not be deemed a waiver with respect to any other facts and circumstances, and each such right will
be deemed an ongoing right that may be asserted at any time and from time to time.


 


ARTICLE IX

INDEMNIFICATION


 


9.1 Survival.
The representations and warranties made herein and in any certificate delivered in connection herewith shall survive for a
period of eighteen (18) months following the Closing Date, at which time they shall expire; provided, however, that (i) the
representations and warranties set forth in Sections 3.1, 3.3, 3.4, 4.1, 4.3, and 4.19 of this Agreement shall survive until
the expiration of the applicable statute of limitations and (ii) the representations and warranties in Section 4.6 of this
Agreement shall survive until the expiration of the applicable statute of limitations. If written notice of a claim has been
given prior to the expiration of the applicable representations and warranties, then notwithstanding any statement herein to
the contrary, the relevant representations and warranties shall survive as to such claim, until such claim is finally
resolved. Unless a specified period is set forth in this Agreement (in which event such specified period will control), all
agreements and covenants contained in this Agreement will survive the Closing and remain in effect until thirty (30) days
after the expiration of the applicable statutes of limitations. To avoid any doubt, the parties agree that the time
limitations herein limit the time in which a claim may be brought even though such time limits may be less than those
otherwise afforded under applicable statutes of limitations. In the event that a claim has been brought within such time
periods, the running of such time prior to the final adjudication of such claim shall not time bar the continuation of such
claim. Notwithstanding the foregoing, Buyer and acknowledges and agrees that neither the Seller nor the Company has made or
is making any representations or warranties whatsoever regarding the subject matter of this Agreement, express or implied,
except as provided in Article III hereof, and that it is not relying and has not relied on any presentation or warranty
whatsoever regarding the subject matter of this Agreement, express or implied, except fort the representations and warranties
in such Article III.


 



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9.2 Indemnification
by the Seller. From and after the Closing, the Seller agrees to indemnify, defend and save Buyer and its Affiliates,
stockholders, officers, directors, employees, agents and representatives (each, a “Buyer Indemnified
Party” and collectively, the “Buyer Indemnified Parties”) harmless from and against any and all
liabilities, deficiencies, demands, claims, Actions, assessments, losses, costs, expenses, interest, fines, penalties and
damages (including fees and expenses of attorneys and accountants and costs of investigation) (individually and collectively,
the “Losses”; provided, however, that the Losses shall not include consequential, punitive or exemplary
damages, except in the case of fraud or to the extent actually awarded to a Governmental Entity, suffered, sustained or
incurred by any Buyer Indemnified Party arising out of or otherwise by virtue of: (a) any breach of any of the
representations or warranties of the Seller contained in Article III or IV of this Agreement or (b) the failure of the Seller
to perform any of his covenants or obligations contained in this Agreement.


 


9.3 Indemnification
by Buyer. From and after the Closing, the Buyer agrees to indemnify, defend and save the Seller and to the extent
applicable, the Seller’s Affiliates, employees, agents and representatives (each, a “Seller Indemnified
Party” and collectively the “Seller Indemnified Parties”) harmless from and against any and all
Losses sustained or incurred by any Seller Indemnified Party arising out of or otherwise by virtue of: (a) any breach of
any of the representations and warranties of Buyer contained in Article V of this Agreement or (b) the failure of Buyer
to perform any of its covenants or obligations contained in this Agreement.


 


9.4 Limitations.
In no event shall the indemnification obligations provided for in Section 9.2(a) above exceed the sum of (a) the cash value
of the Seller Policies and (b) to the extent actually paid to the Seller, the Deposit, the Cash Portion, the Closing
Receivables Payment and the Deferred Portion.


 


9.5 Indemnification
Procedure.


 


(a) If
a Buyer Indemnified Party or a Seller Indemnified Party seeks indemnification under this Article IX, such party (the “Indemnified
Party”) shall give written notice to the other party (the “Indemnifying Party”) of the facts and circumstances
giving rise to the claim. In that regard, if any Action, Liability or obligation shall be brought or asserted by any third party
which, if adversely determined, would entitle the Indemnified Party to indemnity pursuant to this Article IX (a “Third-Party
Claim”), the Indemnified Party shall promptly notify the Indemnifying Party of such Third-Party Claim in writing, specifying
the basis of such claim and the facts pertaining thereto, and the Indemnifying Party, if the Indemnifying Party so elects, shall
assume and control the defense thereof (and shall consult with the Indemnified Party with respect thereto), including the employment
of counsel reasonably satisfactory to the Indemnified Party and the payment of all necessary expenses. If the Indemnifying Party
elects to assume control of the defense of a Third-Party Claim, the Indemnified Party shall have the right to employ counsel separate
from counsel employed by the Indemnifying Party in any such action and to participate in the defense thereof, but the fees and
expenses of such counsel employed by the Indemnified Party shall be at the expense of the Indemnified Party unless (i) the
Indemnifying Party has been advised by the Indemnifying Party’s counsel that a reasonable likelihood exists of a conflict
of interest between the Indemnifying Party and the Indemnified Party, or (ii) the Indemnifying Party has failed to assume
the defense and employ counsel; in which case the fees and expenses of the Indemnified Party’s counsel shall be paid by the
Indemnifying Party. All claims other than Third-Party Claims (a “Direct Claim”) may be asserted by the Indemnified
Party giving notice to the Indemnifying Party. Absent an emergency or other extenuating circumstance, the Indemnified Party shall
give written notice to the Indemnifying Party of such Direct Claim prior to taking any material actions to remedy such Direct Claim.


 



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(b) In
no event shall the Indemnified Party pay or enter into any settlement of any claim or consent to any judgment with respect to any
Third-Party Claim without the prior written consent of the Indemnifying Party (which consent shall not be unreasonably withheld,
conditioned or delayed) if such settlement or judgment would require the Indemnifying Party to pay any amount. The Indemnifying
Party may enter into a settlement or consent to any judgment without the consent of the Indemnified Party so long as (i) such settlement
or judgment involves monetary damages only and (ii) a term of the settlement or judgment is that the Person or Persons asserting
such Third-Party Claim unconditionally release all Indemnified Parties from all liability with respect to such claim; otherwise
the consent of the Indemnified Party shall be required in order to enter into any settlement of, or consent to the entry of a judgment
with respect to, any Third-Party Claim, which consent shall not be unreasonably withheld, conditioned or delayed.


 


9.6 Failure
to Give Timely Notice. A failure by an Indemnified Party to provide notice as provided in Section 9.4 will not affect the
rights or obligations of any Person except and only to the extent that, as a result of such failure, any Person entitled to
receive such notice was damaged as a result of such failure to give timely notice. Nothing contained in this Section 9.6
shall be deemed to extend the period for which the Seller’s representations and warranties will survive Closing as set
forth in Section 9.1 above.


 


9.7 Sole
and Exclusive Remedy. Except with respect to claims for specific performance or other equitable remedies and for claims
based upon fraud, in respect of any breach of any representations, warranties, covenant agreements or obligations required to
be performed on or after Closing pursuant to this Agreement, this Article IX shall be the sole and exclusive remedy for
Losses of any Indemnified Party and each party waives all statutory common law and other claims with respect thereto, other
than claims for indemnification under this Article IX from and after the Closing with respect to breaches of this
Agreement.


 


9.8 Payments.
Payments of all amounts owing by an Indemnifying Party under this Article IX shall be made promptly upon the determination in
accordance with this Article IX that an indemnification obligation is owing by the Indemnifying Party to the Indemnified
Party.


 


9.9 Recoupment
under Deferred Portion.


 


(a) If
the Seller is obligated to indemnify the Buyer or any other Buyer Indemnified Party for any indemnification claim in accordance
with this Article IX, Buyer shall have the right to set-off the amount of such claim against the Deferred Portion.


 


(b) If
the Buyer intends to set-off any amount hereunder, the Buyer shall provide not less than thirty (30) days’ prior written
notice to the Seller of its intention to do so, together with a reasonably detailed explanation of the basis therefor (a “Set-Off
Notice”). If, within ten (10) days of its receipt of a Set-Off Notice, the Seller provides the Buyer with written notice
of such Seller’s dispute with Buyer’s right to make such set-off, Buyer and such Seller (and their respective representatives
and advisors) shall meet (which may be accomplished telephonically) in good faith within five (5) days to attempt to resolve their
dispute. If such dispute remains unresolved despite Buyer’s good faith attempt to meet with the Seller and resolve such dispute,
Buyer may set-off under this Section 9.9 only (a) with respect to those indemnification claims that have been Finally Determined
(as defined below), (b) as described in the first sentence of Section 9.9(c) with the prior written consent of the Seller.


 



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(c) In
the event of a dispute with respect to any indemnification claim against Seller made in good faith pursuant to this Article IX,
and the liability for and amount of Losses therefore, Buyer may withhold any payments of the Deferred Portion up to the disputed
amount, but only if the Buyer deposits such withheld amounts into escrow in accordance with a mutually agreed upon escrow agreement,
provided that if the parties cannot agree upon the terms of the escrow agreement or the escrow agent, the Buyer shall deposit the
withheld payments with a court of competent jurisdiction in the State of Oklahoma. For purposes of this Agreement, the term “Finally
Determined” shall mean with respect to any indemnification claim made, and the liability for and amount of Losses therefor,
when the parties to such claim have so determined by mutual agreement or, if disputed, when a final, non-appealable judgment has
been issued by a court having proper jurisdiction.


 


ARTICLE X

MISCELLANEOUS


 


10.1 Press
Releases and Public Announcement. Neither the Buyer on the one hand, nor the Seller or the Company on the other, will
issue any press release or make any public announcement relating to this Agreement, the Acquisition or the other transactions
contemplated by this Agreement without the prior written approval of the other party; provided, however, that the Buyer may
make regulatory filings referring to this Agreement or attaching a copy hereof as may be required by applicable law.


 


10.2 No
Third-Party Beneficiaries. This Agreement will not confer any rights or remedies upon any Person other than the parties
hereto and their respective successors and permitted assigns.


 


10.3 Entire
Agreement. This Agreement (including the Exhibits and the Schedules hereto) constitutes the entire agreement among the
parties hereto and supersedes any prior understandings, agreements or representations by or among the parties hereto, written
or oral, to the extent they related in any way to the subject matter hereof.


 


10.4 Succession
and Assignment. This Agreement will be binding upon and inure to the benefit of the parties named herein and their respective
successors and permitted assigns. No party hereto may assign either this Agreement or any of its rights, interests or obligations
hereunder without the prior written approval, in the case of assignment by the Buyer, by the Seller, and, in the case of assignment
by the Seller or the Company, the Buyer.


 


10.5 Construction.
The parties have participated jointly in the negotiation and drafting of this Agreement, and, in the event an ambiguity or question
of intent or interpretation arises, this Agreement will be construed as if drafted jointly by the parties, and no presumption
or burden of proof will arise favoring or disfavoring any party by virtue of the authorship of any of the provisions of this Agreement.


 



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10.6 Notices.
All notices, requests and other communications hereunder must be in writing and will be deemed to have been duly given only if
delivered personally against written receipt or by facsimile transmission or mailed (by registered or certified mail, postage
prepaid, return receipt requested) or delivered by reputable overnight courier, fee prepaid, to the parties hereto at the addresses
of the parties as specified below:


 


If to the Buyer:           3355
Bee Caves Road, Suite 608


Austin, Texas 78746


Attention: Chief Executive Officer


Fax: 866-234-9806


 


With a copy to:          BEVILACQUA
PLLC


1050 Connecticut Avenue, NW, Suite
500


Washington, DC 20036


Attention: Louis A Bevilacqua


Fax: (202) 869-0889


 


If to the Company:      P.O.
Box 6920


Moore, OK 73153


Attention: Stewart Matheson


 


If
to the Seller:             Stewart Matheson


21700 Villagio
Drive


Edmond, OK
73012


 


with a copy to:             Rischard,
Carsey & Byrne, PLLC


100 Park Avenue,
Suite, 700


Oklahoma
City, OK 73102


Attention: Justin
Byrne


Fax: (405)
231-2830


 


Any party may change
the address to which notices, requests, demands, claims and other communications hereunder are to be delivered by giving the other
parties notice in the manner set forth herein.


 


10.7 Governing
Law. This Agreement will be governed by, and construed in accordance with, the Laws of the State of Oklahoma, without
giving effect to any choice of Law or conflict of Law provision or rule that would cause the application of the Laws of any
jurisdiction other than the State of Oklahoma.


 


10.8 Consent
to Jurisdiction and Service of Process. EACH OF THE PARTIES HERETO CONSENTS TO THE JURISDICTION OF ANY STATE OR FEDERAL COURT
LOCATED WITHIN THE STATE OF OKLAHOMA AND IRREVOCABLY AGREES THAT ALL ACTIONS OR PROCEEDINGS RELATING TO THIS AGREEMENT, THE ACQUISITION
OR THE OTHER TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT MAY BE LITIGATED IN SUCH COURTS. EACH OF THE PARTIES HERETO ACCEPTS FOR
ITSELF AND IN CONNECTION WITH ITS RESPECTIVE PROPERTIES, GENERALLY AND UNCONDITIONALLY, THE EXCLUSIVE JURISDICTION OF THE AFORESAID
COURTS AND WAIVES ANY DEFENSE OF FORUM NON CONVENIENS, AND IRREVOCABLY AGREES TO BE BOUND BY ANY FINAL AND NONAPPEALABLE
JUDGMENT RENDERED THEREBY IN CONNECTION WITH THIS AGREEMENT, THE ACQUISITION OR THE OTHER TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT.


 



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10.9 Headings.
The descriptive headings contained in this Agreement are included for convenience of reference only and will not affect in
any way the meaning or interpretation of this Agreement.


 


10.10 Severability.
If any provision of this Agreement is held to be illegal, invalid or unenforceable under any present or future Law (a) such provision
will be fully severable, (b) this Agreement will be construed and enforced as if such illegal, invalid or unenforceable provision
had never comprised a part hereof, (c) the remaining provisions of this Agreement will remain in full force and effect and will
not be affected by the illegal, invalid or unenforceable provision or by its severance herefrom and (d) in lieu of such illegal,
invalid or unenforceable provision, there will be added automatically as a part of this Agreement a legal, valid and enforceable
provision as similar in terms of such illegal, invalid or unenforceable provision as may be possible.


 


10.11 Expenses.
Except as otherwise provided in this Agreement, whether or not the Acquisition is consummated, all expenses incurred in connection
with this Agreement and the transactions contemplated hereby will be paid by the party incurring such expenses. As used in this
Agreement, “expenses” means the out-of-pocket fees and expenses of the financial advisor, counsel and accountants
incurred in connection with this Agreement and the transactions contemplated hereby.


 


10.12 Incorporation
of Exhibits and Schedules. The Exhibits and Schedules identified in this Agreement are incorporated herein by reference and
made a part hereof.


 


10.13 Limited
Recourse. Notwithstanding anything in this Agreement to the contrary, the obligations and Liabilities of the parties
hereunder will be without recourse to any stockholder of such party or any of such stockholder’s affiliates (other than
such party), or any of their respective Representatives or agents (in each case, in their capacity as such).


 


10.14 Specific
Performance. The parties hereto agree that irreparable damage would occur in the event that any provision of this Agreement
was not performed in accordance with the terms hereof and that the parties will be entitled to specific performance of the terms
hereof in addition to any other remedy at Law or equity.


 


10.15 Counterparts.
This Agreement may be executed in two (2) or more counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument. Counterparts may be delivered via facsimile, electronic mail
(including pdf or any electronic signature complying with the U.S. federal ESIGN Act of 2000, e.g., www.docusign.com)
or other transmission method and any counterpart so delivered shall be deemed to have been duly and validly delivered and be
valid and effective for all purposes.


 


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IN WITNESS WHEREOF,
the parties hereto have caused this Agreement to be duly executed as of the date first above written.


 





	 	BUYER:
	 	 	 
	 	VICTORY OILFIELD TECH, INC.
	 	 	 
	 	By:	/s/ Kenneth Hill
	 	Name:	Kenneth Hill
	 	Title:	Chief Executive Officer
	 	 	 
	 	COMPANY:
	 	 	 
	 	PRO-TECH HARDBANDING SERVICES, INC.
	 	 	 
	 	By:	/s/ Stewart Matheson
	 	Name:	Stewart Matheson
	 	Title:	President
	 	 	 
	 	SELLER:
	 	 	 
	 	/s/ Stewart Matheson
	 	STEWART MATHESON