Document:

Exhibit 10.8

 

 

MEDICAL TRANSCRIPTION BILLING, CORP.

EXECUTIVE EMPLOYMENT AGREEMENT

 

EMPLOYMENT AGREEMENT,
dated as of the 4th day of April, 2014 between Medical Transcription Billing, Corp., a Delaware Company (the “Company”)
and Bill Korn (the “Executive”).

 

WHEREAS, the Executive
has been employed by the Company or one of its subsidiaries prior to the date hereof;

 

WHEREAS, the Executive
possesses unique knowledge of the business and affairs of the Company, including its policies, methods, personnel and operations;
and

 

WHEREAS, the Board
of Directors of the Company (the “Board of Directors”) believes it to be in the best interests of the Company to ensure
the Executive’s continued employment by the Company in the capacity and under the terms and conditions set forth herein;

 

NOW, THEREFORE, in
consideration of the foregoing and the mutual promises and agreements hereinafter set forth, the Company and Executive agree as
follows:

 

1.            Effective Date. This Employment Agreement shall become effective on the effective date of the registration
statement with respect to the Company’s initial public offering of shares of common stock (the “Effective
Date”).

 

2.            Employment.
The Company hereby employs the Executive and the Executive hereby accepts employment all upon the terms and conditions herein set
forth.

 

3.            Duties.
The Executive shall perform such management duties for the Company and its affiliates as may from time to time be assigned and
which are consistent with his title of Chief Financial Officer. The Executive hereby promises to perform and discharge, well and
faithfully, all duties of his position. If Executive is elected as a director or officer of any affiliate of the Company, the Executive
shall serve in such capacity or capacities without further compensation.

 

4.  
         Extent of Services.

 

(a)       The Executive
shall devote his entire time, attention and energies to the business of the Company and shall not during the term of this Employment
Agreement be engaged in any other business activity whether or not such business activity is pursued for gain, profit or other
pecuniary advantage; but this shall not be construed as preventing the Executive from investing his personal assets in businesses
which do not compete with the Company in such form or manner as will not require any services on the part of the Executive in the
operation of the affairs of the companies in which such investments are made and in which his participation is solely that of an
investor, nor shall this be construed as preventing the Executive from purchasing securities in any Company whose securities are
regularly traded provided that such purchases shall not result in his collectively owning beneficially at any time one percent
(1%) or more of the equity securities of any Company engaged in a business competitive to that of the Company, without the express
prior written consent of the Company.

 

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(b)       It shall not be
a violation of this Agreement for the Executive to serve on corporate, civic or charitable boards or committees; or deliver lectures,
fulfill speaking engagements or teach at educational institutions, so long as such activities, separately or in the aggregate,
do not materially interfere with the performance of the Executive’s responsibilities as an employee of the Company in accordance
with this Agreement.

 

5.  
         Compensation.

 

(a)       For services rendered
under this Employment Agreement, the Company shall pay the Executive a salary determined annually by the Board of Directors (the
“Base Salary”), payable (after deduction of applicable payroll taxes) in the same manner and on the same payroll schedule
in which Company employees receive payment. Executive’s Base Salary as of the Effective Date shall be $250,000. The Executive
shall also be eligible for and participate in such fringe benefits as shall be generally provided to executives of the Company,
including those under the Medical Transcription Billing, Corp. 2014 Equity Incentive Plan which may be adopted from time to time
during the term hereof by the Company.

 

(b)       The Board of Directors
shall review the Executive’s compensation at least once a year and effect such increases in the Base Salary as the Board
of Directors, in its sole discretion, determines are merited, based upon the Executive’s performance and consistent with
the Company’s compensation policies. At the conclusion of each Fiscal Year, the Executive shall be eligible for, and the
Board of Directors in its sole discretion may award, an executive bonus based on the achievement of objectives established by the
Board of Directors in line with the rules of the Company’s bonus plan. Executive’s Target Bonus is equal to 100% of
Base Salary.

 

6.            Paid
Time Off. During the term of this Employment Agreement, the Executive shall be entitled to the same number of paid days off
pursuant to the Company’s customary paid time off policy as he has on the date of this Employment Agreement.

 

7.  
         Expenses.
During the term of this Employment Agreement, the Company shall reimburse the Executive for all reasonable out-of-pocket expenses
incurred by the Executive in connection with the business of the Company and in performance of his duties under this Employment
Agreement upon the Executive’s presentation to the Company of an itemized accounting of such expenses with reasonable supporting
data.

 

8.  
         Term.
The Executive’s employment under this Employment Agreement shall commence on the Effective Date and shall expire on the second
year anniversary date thereof. The term of employment shall automatically be extended for consecutive periods of one (1) year each
unless notice of termination of employment is given by either party hereto at least ninety (90) days prior to the expiration of
the initial or any renewal term, in which case, this Agreement shall terminate at the end of such initial or renewal term, as the
case may be. In the case of a renewal and unless otherwise agreed to in writing by parties, the terms and conditions of this Employment
Agreement shall apply to any renewals or extensions thereto. Notwithstanding the foregoing, the Company may, at its election, terminate
the Executive’s employment hereunder as follows:

 

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(i)       Upon
thirty (30) days’ notice if the Executive becomes physically or mentally incapacitated or is injured so that he is unable
to perform the services required of him hereunder and such inability to perform continues for a period in excess of twenty-six
(26) weeks and is continuing at the time of such notice; or

 

(ii)       For
“Cause” upon notice of such termination to the Executive. For purposes of this Employment Agreement, the Company shall
have “Cause” to terminate its obligations hereunder upon (A) the reasonable determination by the Board of Directors
that the Executive has repeatedly failed to substantially to perform his duties hereunder (other than as a result of his incapacity
due to physical or mental illness or injury), which failure amounts to a repeated and consistent neglect of his duties hereunder,
(B) the reasonable determination by the Board of Directors that the Executive materially fails or refuses to comply with any lawful
regulation or policy of the Company, and fails to correct the non-compliance following written notice from the Company, (C) the
reasonable determination by the Board of Directors that the Executive has engaged or is about to engage in conduct materially injurious
to the Company, (D) the Executive’s having been convicted of a felony or a misdemeanor involving moral turpitude, (E) a material
breach by the Executive of any of the other covenants or representations herein or any other agreement between Executive and the
Company, or (F) fraud, theft, embezzlement or misappropriation of Company property or funds; or

 

(iii)     Without
Cause at any time upon notice of such termination to the Executive; or

 

(iv)     Without
Cause within twelve months after a Change in Control. Change in Control for purposes of this Agreement, unless the Board determines
otherwise, shall be deemed to have occurred at such time as: (A) any person (as the term is used in Sections 13(d) and 14(d) of
the Securities Exchange Act of 1934, as amended (the Exchange Act)) is or becomes the beneficial owner (as defined in Rule 13d-3
under the Exchange Act), directly or indirectly, of voting securities of the Company representing more than 50% of the Company
s outstanding voting securities or rights to acquire such securities except for any voting securities issued or purchased under
any employee benefit plan of the Company or its subsidiaries, (B) Any sale, lease, exchange or other transfer (in one transaction
or a series of transactions) of all or substantially all of the assets of the Company, (C) a plan of liquidation of the Company
or an agreement for the sale or liquidation of the Company is approved and completed, or (D) The Board determines in its sole discretion
that a Change in Control has occurred, whether or not any event described above has occurred or is contemplated; or

 

(v)      Upon
the death of the Executive.

 

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In addition, the Executive
shall have the right to terminate this Employment Agreement upon notice to the Company if, without his consent, his responsibilities
and duties on the date hereof are materially reduced (a “Material Demotion”) and such Material Demotion continues for
ten (10) business days after the date of notice to the Company. A Material Demotion shall be treated as a termination by the Company
without Cause and the Executive shall be entitled to receive salary continuation pay as provided by, and subject to the terms and
conditions of, subparagraph 9(c) below.

 

9.  
         Payment Upon
Termination.

 

(a)       If this Employment
Agreement is terminated pursuant to paragraph 8(i) above, the Executive shall receive disability pay from the date of such termination
until the second anniversary of the Effective Date at the rate of 50% of the Base Salary, reduced by applicable payroll taxes and
further reduced by the amount received by the Executive during such period under any Company-maintained disability insurance policy
or plan or under Social Security or similar laws. Such disability payments shall be paid periodically to the Executive as provided
in paragraph 5(a) for the payment of salary.

 

(b)       If the Employment
Agreement is terminated pursuant to paragraph 8(ii) or 8(v) above, the Executive shall receive no salary continuation pay or severance
pay.

 

(c)       If this Employment
Agreement is terminated pursuant to paragraph 8(iii) or 8(iv) above, or as a result of the Executive having terminated this Employment
Agreement following a Material Demotion, the Executive shall receive salary continuation pay for the remainder of the contractual
term, but not in any event for less than twelve months from the date of such termination (“Salary Continuation Period”),
equal to the Executive’s most recent annual salary plus his target bonus (as determined under the bonus plan last in effect
for the Executive). In addition, the Company shall pay the premiums necessary to continue Executive’s group health coverage
for the Salary Continuation Period under the applicable provisions of the Consolidated Omnibus Budget Reconciliation Act (“COBRA”),
provided Executive elects to continue and remains eligible for those benefits under COBRA, and does not become eligible for health
coverage through another employer during this period; provided, however, that the salary continuation payments, bonus and other
benefits described in this paragraph 9(c) shall cease if the Executive shall, directly or indirectly, be in breach of his obligations
under paragraph 13 hereof. Such salary continuation payments (less applicable payroll taxes) shall be paid periodically to the
Executive as provided in paragraph 5(a) for the payment of the Base Salary.

 

(d)       If the Company
shall decide not to renew this Employment Agreement, the Executive shall receive severance pay, for a period of twelve months following
the date of expiration of the then current term (“Severance Pay”), equal to the Executive’s most recent annual
salary (excluding any and all executive bonus plan amounts). Such severance payments (less applicable payroll taxes) shall be paid
periodically to the Executive as provided in paragraph 5(a) for the payment of the Base Salary. The Executive hereby agrees to
make a smooth transition of responsibilities during that ninety (90) day period and the Executive further agrees not to take any
legal action against the Company related to said non-renewal and termination of employment.

 

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(e)       During the Salary
Continuation Period or Severance Period, the Executive shall be under no obligation to mitigate the costs to the Company of the
salary continuation or severance payments, and, no compensation that the Executive may receive from another employer during the
salary continuation or severance period shall be offset against amounts owed to Executive hereunder. Notwithstanding the foregoing,
in order to be entitled to the payments under paragraphs 9(c) and (d), Executive shall be required to execute and deliver (and
not revoke) a release of all employment related claims against the Company in a form attached hereto as Exhibit A.

 

10.
         Representations.
The Executive hereby represents to the Company that (a) he is legally entitled to enter into this Employment Agreement and to perform
the services contemplated herein and is not bound under any employment or consulting agreement to render services to any third
party, (b) he has the full right, power and authority, subject to no rights of third parties, to grant to the Company the rights
contemplated by paragraph 11 hereof, and (c) he does not now have, nor within the last three years has had, any ownership interest
in any business enterprise (other than interest in publicly traded Companys where his ownership does not exceed one percent (1%)
or more of the equity capital) which is a customer of the Company, any of its subsidiaries, or from which the Company or any of
its subsidiaries purchases any goods or services or to whom such Companys owe any financial obligations or are required or directed
to make any payments.

 

11.
         Inventions.
The Executive hereby sells, transfers and assigns to the Company or to any person or entity designated by the Company all of the
entire right, title and interest of the Executive in and to all inventions, ideas, disclosures and improvements, whether patented
or unpatented, and copyrightable material, made or conceived by the Executive, solely or jointly, during the term hereof which
relate to methods, apparatus, designs, products, processes or devices, sold, leased, used or under consideration or development
by the Company or any of its affiliates or which otherwise relate to or pertain to the business, functions or operations of the
Company or any of its affiliates or which arise from the efforts of the Executive during the course of his employment for the Company
or any of its affiliates. The Executive shall communicate promptly and disclose to the Company, in such form as the Company requests,
all information, details and data pertaining to the aforementioned inventions, ideas, disclosures and improvements; and the Executive
shall execute and deliver to the Company such formal transfers and assignments and such other papers and documents as may be necessary
or required of the Executive to permit the Company or any person or entity designated by the Company to file and prosecute the
patent applications and, as to copyrightable material, to obtain copyright thereof. Any invention relating to the business of the
Company and its affiliates and disclosed by the Executive within one year following the termination of this Employment Agreement
shall be deemed to fall within the provisions of this paragraph unless proved to have been first conceived and made following such
termination.

 

12.          Disclosure
of Information. The Executive recognizes and acknowledges that the trade secrets, know-how and proprietary processes of the
Company and its affiliates as they may exist from time to time are valuable, special and unique assets of the business of the
Company and its affiliates, access to and knowledge of which are essential to the performance of the Executive’s duties
hereunder. The Executive will not, during or after the term of his employment by the Company or any of its affiliates, in whole
or in part, disclose such secrets, know-how or processes to any person, firm, Company, association or other entity for any reason
or purpose whatsoever, nor shall the Executive make use of any such property for his own purposes or for the benefit of any person,
firm, Company or other entity (except the Company and its affiliates) under any circumstances during or after the term of his
employment, provided that after the term of his employment these restrictions shall not apply to such secrets, know-how and processes
which are then in the public domain (provided that the Executive was not responsible, directly or indirectly, for such secrets,
know-how or processes entering the public domain without the Company’s consent).

 

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13.
         Non-Competition.
During the term of Executive’s employment hereunder and for a period beginning on the date of termination of Executive’s
employment hereunder for any reason and ending on the later of one (1) year after the date of this Agreement or one (1) year after
any such termination of employment (“Non-Competition Period”) Executive shall not:

 

a)     
  without the prior written consent of the Company, directly or indirectly, as an Executive, employer, agent, principal,
proprietor, partner, stockholder, consultant, employee, director, or corporate officer, engage in any business or render any
services to any business that is in competition with the business of the Company; and

 

b)       (i) solicit any
employee of the Company to engage in a competitive business or (ii) solicit customers of the Company on behalf of any company or
entity whose business is competitive with the Company.

 

If the scope of any restrictions
contained in Subsections (a) or (b) of this Section 13 are too broad to permit enforcement of such restrictions to their full
extent, then such restrictions shall be enforced to the maximum extent permitted by law, and Executive hereby consents and agrees
that such scope may be judicially modified accordingly in any proceeding brought to enforce such restrictions.

 

14.
         Injunctive
Relief. If there is a breach or threatened breach of the provisions of paragraph 11, 12 or 13 of this Employment Agreement,
the Company shall be entitled to an injunction restraining the Executive from such breach. Nothing herein shall be construed as
prohibiting the Company from pursuing any other remedies for such breach or threatened breach.

 

15.
         Insurance.
The Company may, at its election and for its benefit, insure the Executive against accidental loss or death, and the Executive
shall submit to such physical examination and supply such information as may be required in connection therewith.

 

16.
         Notices.
Any notice required or permitted to be given under this Employment Agreement shall be sufficient if in writing and if sent by registered
mail to the Executive at his home address as reflected on the records of the Company, in the case of the Executive, or Medical
Transcription Billing Company Inc., 7 Clyde Road, Somerset New Jersey 08873, in the case of the Company.

 

17.
         Waiver of
Breach. A waiver by the Company or the Executive of a breach of any provision of this Employment Agreement by the other party
shall not operate or be construed as a waiver of any subsequent breach by the other party.

 

18.
         Governing
Law. This Employment Agreement shall be governed by and construed and enforce in accordance with the laws of the State of New
Jersey without giving effect to the choice of law or conflict of laws provisions thereof.

 

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19.
         Assignment.
This Employment Agreement may be assigned, without the consent of the Executive, by the Company to any of its affiliates, or to
any other person, partnership, Company, or other entity which has purchased substantially all the assets of the Company, provided
such assignee assumes all the liabilities of the Company hereunder.

 

20.
         Severability.
If any provision of any part of this Agreement is determined to be invalid or unenforceable, such invalidity or unenforceability
shall not invalidate or render unenforceable any other portion of this Agreement. The entire Agreement shall be construed as if
it did not contain the particular invalid or unenforceable provision(s) and the rights and obligations of the Parties shall be
construed and enforced accordingly.

 

21.
         Entire Agreement.
This Employment Agreement contains the entire agreement of the parties and supersedes any and all agreements, letter of intent
or understandings between the Executive and (a) the Company, (b) any of the Company’s principle shareholders, affiliates
or subsidiaries regarding employment. This Employment Agreement may be changed only by an agreement in writing signed by a party
against whom enforcement of any waiver, change, modification, extension or discharge is sought.

 

[Signature page follows]

 

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IN WITNESS WHEREOF,
the parties have executed this Employment Agreement as of the day first herein above written.

 

	EXECUTIVE
	 	 	 
	By:	/s/ Bill Korn	 
	 	Bill Korn	 
	 	 	 
	MEDICAL TRANSCRIPTION BILLING, CORP., INC.
	 	 	 
	By:	/s/ Mahmud Haq	 
	 	Mahmud Haq	 
	 	Chairman & Chief Executive Officer	 

 

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EXHIBIT A

 

SEPARATION AGREEMENT AND RELEASE

 

I, ______________________________,
hereby acknowledge that Medical Transcription Billing, Corp. (“the Company”) has advised me by letter dated
_____________________(“the Letter”) of the pay and benefits to which I am entitled in connection with the separation
of my employment with the Company, and the separation pay which it has agreed to pay to me in exchange for my signing this Separation
Agreement and Release (“Release”). I further hereby acknowledge that the Company has advised me that I have a period
of forty-five (45) days from the date of such Letter to sign the Release. I also understand that I have a period of seven (7) days
following the date of my signature on the Release to change my mind and cancel this Release by sending a written revocation notice
to the attention of General Counsel, Medical Transcription Billing, Corp, 7 Clyde Road, Somerset, NJ 08873. I understand
that this Release is not enforceable until after the end of the seven (7) day period. I understand and agree that, should I revoke
my Release, I will return any severance pay paid to me by the Company in exchange for signing the Release.

 

In consideration of
such separation pay as set forth above and in the Letter, to which I acknowledge I am not otherwise entitled, I hereby voluntarily
release the Company, the Company’s respective associates, affiliates, predecessors, successors, subsidiaries, parents, or
agents of any of them, and the directors, officers, employees and agents of any of them, and shareholders (all the parties mentioned
immediately before shall be referred to as the “Released Parties”) from, and waive any right to personal benefit arising
from any proceedings or lawsuits, in connection with any and all claims relating to my employment, or the separation of my employment
which I have or may have or acquire up to the date of my signature on this Release, including, but not limited to, claims of discrimination
whether arising under Title VII of the Civil Rights Act of 1964, the Age Discrimination in Employment Act of 1967 as amended, the
Older Workers Benefit Protection Act, the Rehabilitation Act of 1973, the Americans with Disabilities Act, the Civil Rights Act
of 1991 or any other federal, state or local law. Moreover, I release all claims and waive all rights to file a judicial action
and to receive personal benefit in connection with any other proceeding against the Released Parties arising from claims of breach
of contract, claims for benefits other than those required by applicable law, claims for additional compensation and/or commissions,
claims that the separation of my employment was wrongful, unjust or a violation of public policy or any other claim arising out
of any matter concerning the Company or Released Parties in any form which may have occurred prior to the date of my signature
on this Release.

 

I agree that I will not, directly or indirectly,
engage in any conduct or make any statement disparaging or criticizing in any way the Company or any of its subsidiaries or affiliates
or any of their respective officers, directors or employees nor shall you, directly or indirectly, engage in any conduct or make
any statement that could be reasonably expected to impair the goodwill or reputation of the Company or any of its subsidiaries
or affiliates, in each case, except to the extent required by law, and then only after consultation with the Company to the extent
possible. The Company agrees it will use its reasonable efforts to ensure that the Company does not, directly or indirectly, engage
in any conduct or make any statement disparaging or criticizing you in any way, or engage in any other conduct or make any other
statement that could be reasonably expected to impair your business reputation, except to the extent required by law, and then
only after consultation with Executive to the extent possible; provided, that any refusal by the Company to give a reference shall
not be a breach of this provision.

 

I recognize that this
Release shall be binding upon and apply to all of my heirs, executors, administrators, successors and assigns. In the event that
state law restricts general releases and provides me with statutory rights, I also waive my right to such statutory protection
to the full extent lawfully possible. This Release shall run to and benefit the Company and its respective associates, affiliates,
predecessors, successors, subsidiaries, parents, or agents of any of them, assigns and the past and present directors, officers,
agents, and employees.

 

I agree that the
Company has advised me in writing of my right to consult with an attorney prior to signing this Release and has provided me with
sufficient time to review and sign the Release. I have carefully read and fully understand the contents of the Release and my voluntary
signature is evidence of my intent to be legally bound by its terms.

 

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	(Print or Type Name)	 	(Witness Name - Printed or Typed)	 
	 	 	 	 
	 	 	 	 
	Signature	 	Witness Signature	 
	 	 	 	 
	Date	 	 	Date	 	 
	 	 	 	 	 	 

 

    	Page 10 of 10NOTE PURCHASE AGREEMENT

 

 

This NOTE PURCHASE
AGREEMENT (including all exhibits hereto, this “Purchase Agreement”), is entered into as of April 4, 2014, by
Healthcare Corporation of America, a Delaware corporation (the “Company” or the “Borrower”),
and the Noteholders listed on Exhibit A (the “Noteholders”).

 

RECITALS

 

The Company wishes to sell and each Noteholder
wishes to purchase a secured Note, substantially in the form attached as Exhibit B (the “Note”),
of the Company on the terms, and subject to the conditions, contained in this Purchase Agreement.

 

NOW, THEREFORE, in
consideration of the mutual promises and agreements set forth herein, the parties hereto agree as follows:

 

1.Issuance of Note.

 

(a)               
Subject to the terms and conditions set forth in this Agreement, at the closing of this Purchase Agreement (the “Closing”),
the Company shall issue the Notes in the respective principal amounts listed on Exhibit A to the Noteholders in consideration of,
and as an inducement to, each Noteholder’s respective payment of such amounts to the Company. The aggregate amount of principal
under the Notes is One Million United States Dollars ($1,000,000) (payable in two (2) installments as agreed by the parties).

 

(b)              
Each Note:

 

(i) will bear interest
at the annual rate of eight percent (8%),

 

(ii) will be payable
as to principal and interest on demand on April 2, 2015 (“Maturity Date”), subject to acceleration upon Event
of Default, and

 

(iii) will be subject
to the further terms and provisions set forth in this Purchase Agreement.

 

(c)               
The delivery of each executed Note to each Noteholder as well as all agreements, instruments and ancillary documents referenced
therein (the “Closing”) is taking place simultaneously with the execution and delivery of this Purchase Agreement
(the “Closing Date”).

 

(d)              
The Company will use the proceeds of the Notes for the Company’s ongoing operations.

 

2.Interest. The Company
shall pay interest on the whole amount of the principal sum outstanding under the Note, commencing from the date hereof and continuing
until payment in full of this Note, at the annual rate of eight percent (8%).

 

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3.Prepayment. The Company
may prepay the principal and all accrued interest due under the Notes at any time prior to the Maturity Date, in reasonable payments
not to be less than $100,000. Payments will be applied pro rata to each Note, and will be applied first to interest and
then to principal outstanding under each Note, in accordance with the terms of the Note. For the sake of clarity, the security
interest and guaranty described in Section 4 and 5, respectively, herein, shall remain in effect until full repayment of all accrued
amounts, notwithstanding any prepayment.

 

4.Security. To secure the timely payment and
performance by the Company of its obligations under this Purchase Agreement and the Note, the Company hereby assigns, pledges and
grants to the Noteholders, for their ratable benefit, the following collateral (the “Collateral”):

 

4.1A continuing first priority security
interest in and to all of the shares (the “340 Basics Shares”) and assets of 340 Basics, Inc. a New Jersey corporation
and a wholly-owned subsidiary of the Company (“340 Basics”). Such security interest will be subject to the terms
of a Security Agreement dated as of the date of this Purchase Agreement, to be executed by Selway Capital Holdings LLC on behalf
of all of the Noteholders (the “Security Agreement”, and together with the Note, Warrant, Guaranty, Junior Subordination
Agreement, Senior Subordination Agreement and other ancillary documents, collectively referred to as the “Loan Documents”).
The Company is delivering to the Noteholders the stock certificate or certificates representing the 340 Basics Shares, together
with a stock power in blank.

 

4.2A continuing second priority security
interest in and to all other assets of the Borrower, including equity interests in all other subsidiaries. Such second priority
security interest will be subordinate only to the security interest of Partners for Growth III, L.P., a Delaware limited partnership,
as further set forth in the Senior Lender Subordination Agreement to be entered into by and between Partners for Growth III, L.P.,
the Borrower and the Noteholders (or on their behalf) in connection with the transactions contemplated herein (the “Senior
Lender Subordination Agreement”).

 

4.3The Company will provide all requested
assistance to the Noteholders to perfect the Noteholders’ security interest in the Collateral by the filing of financing
statements or any other means reasonably requested by the Noteholders. In connection with the perfection of the security interest
set forth in Section 4.1 hereinabove, the Company, the Noteholders (or on their behalf) and certain previous holders of convertible
notes shall enter into a junior lender subordination agreement (the “Junior Lender Subordination Agreement”).

 

4.4The Company and 340 Basics shall
mark their respective books and records as may be necessary or appropriate to evidence, protect and perfect the Noteholders’
security interest and shall make any public filings or take any other action necessary or advisable to reflect such security interest.

 

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5.Guaranty. On the Closing
Date, 340 Basics is delivering a guaranty (the “Guaranty”) of the Company’s obligations under the Notes.
The Guaranty is an absolute guaranty of payment and not of collection.

 

6.Next Financing Round.

 

6.1As of the Effective
Date, the Company is in the process of raising up to Five Million Five Hundred Thousand Dollars ($5,500,000) from investors (the
“Next Financing Round”). These investors may purchase debt, equity and/or derivatives from the Company (the
“Next Round Securities”).

 

6.2The Company
makes the following covenants with respect to the Next Financing Round:

 

(a) if, as of the
date which is thirty (30) days after the Closing Date, the Company has failed to secure at least One Million Five Hundred Thousand
Dollars ($1,500,000), such failure will constitute an Event of Default (as defined in Section 7 of this Agreement);

 

(b) if, as of the
date which is thirty (30) days after the Closing Date, the Company has secured at least One Million Five Hundred Thousand Dollars
($1,500,000), but less than Three Million Five Hundred Thousand Dollars ($3,500,000), then the Company shall be entitled to an
additional thirty (30) days in which to raise an aggregate of at least Three Million Five Hundred Thousand Dollars ($3,500,000);

 

(c) if, on or before
expiration of such second thirty (30) day period, the Company has failed to secure at least Three Million Five Hundred Thousand
Dollars ($3,500,000), such failure will constitute an Event of Default.

 

7.Warrants.

 

7.1Simultaneously
with the execution and delivery of this Purchase Agreement, the Company is issuing in favor of the Noteholders warrants to purchase
an aggregate of Two Million (2,000,000) shares of Common Stock, subject to stock split, upon the terms and conditions hereinafter
set forth, pursuant to a Warrant dated as of the date of this Purchase Agreement and issued by the Company (the “Warrants”).
The term of the Warrants is five (5) years.

 

7.2The exercise
price of the Warrants is equal to the lowest of the following: (i) the price of common equity of the Next Round Securities (as
defined below), (ii) the conversion price of a convertible note raised after the Next Financing Round (as defined below), or (iii)
the exercise price of warrants which make up part of the package of the Next Round Securities.

 

8.Events of Default.

 

8.1The following
shall constitute events of default (individually an “Event of Default”):

 

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(a) the Events of
Default described in Section 6 above;

 

(b)default in the
payment in full of all principal and interest due under the Notes on or before the Maturity Date, or inability of the Borrower
to pay any of its debts or liabilities as they fall due;

 

(c) filing of a petition
in bankruptcy or the commencement of any proceedings under any bankruptcy laws by or against the Company, which filing or proceeding,
is not dismissed within sixty (60) days after the filing or commencement thereof, or if the Company shall cease or suspend the
conduct of its usual business or if the Company shall become, or in light of its usual business conditions is likely to become,
insolvent and is unable to pay its debts when due;

 

(d) failure of the Company
to comply in any way with the terms, covenants or conditions contained in the Notes or in this Purchase Agreement, or breach by
the Company of any material representation or warranty contained in the Notes or in this Purchase Agreement;

 

(e)commencement of
actions, suits or proceedings at law or in equity against the Company alleging failure to repay any material indebtedness; and

 

(f)the Events of
Default described in Section 6 of the Security Agreement.

 

8.2If at any time, an Event of
Default shall occur, all obligations under the Notes shall become immediately due and payable without presentment, demand or protest,
all of which are hereby waived by the Company. Upon occurrence of an Event of Default:

 

(a)               
The Noteholders may, in their discretion, take ownership of the 340 Basics Shares, ratably in accordance with the principal
amount of each Note. Thereafter, the Noteholders shall have and exercise all rights of a holder of the 340 Basics Shares under
this Purchase Agreement and the other Loan Documents. Such rights include, without limitation, the right to vote the 340 Basics
Shares in any manner the respective Noteholder deems advisable, the right to dividends declared on the 340 Basics Shares, and the
right to transfer, encumber, or otherwise dispose of the 340 Basics Shares in such Noteholder’s sole discretion, except as
limited by applicable securities or other laws; and

 

(b)              
The Noteholders shall have and may exercise all other rights under law and equity to the Collateral, subject to the first
priority security interest of Partners for Growth III, L.P., a Delaware limited partnership. Such rights and remedies shall be
cumulative.

 

 

8.Optional Conversion. The Noteholders,
in their sole discretion, may elect at any time to convert part or all of the amounts due under the Notes, including principal
and interest, into the Next Round Security on terms that are identical to those of the Next Round Securities.

 

    	4

    	 

    

  

9.Representations
and Warranties. The Company represents and warrants to the Noteholders as follows:

 

9.1The 340 Basics
Shares constitute all of the outstanding and issued shares of 340 Basics. The 340 Basics Shares have been duly and validly authorized
and issued and are fully paid and non-assessable and have been sold and delivered to the holders thereof in compliance with, or
under valid exemption from, all applicable federal and state laws and rules and regulations. There are no subscriptions, warrants,
options, calls, commitments, rights or agreement by which 340 Basics is bound relating to the issuance, transfer, voting or redemption
of the 340 Basics Shares or any pre-emptive rights held by any person with respect to the 340 Basics Shares.

 

9.2 None of the
340 Basics Shares is registered or qualified under the various federal or state securities laws of the United States. None of the
340 Basics Shares has been issued or transferred in violation of any securities registration, securities disclosure, or similar
laws of any jurisdiction to which such issuance or transfer may be subject.

 

9.3 Each of the
Company and 340 Basics is duly organized and existing in good standing under the laws of the State of Delaware, is duly qualified
as a foreign corporation and authorized to do business in all jurisdictions in which the nature of its business or property makes
such qualification necessary, except where the failure to so qualify would not have a material adverse effect on the business of
the Company, and has the power to own its properties and to carry on its business as now conducted and as proposed to be conducted.

 

9.4 The Company
has full power, authority and legal right to enter into this Purchase Agreement and the other Loan Documents and to perform all
its obligations thereunder. The Company has duly executed and delivered this Purchase Agreement and the other Loan Documents. This
Purchase Agreement and the other Loan Documents constitute the legal, valid and binding obligation of the Company enforceable in
accordance with their respective terms.

 

9.5The execution,
delivery and performance of this Purchase Agreement and of the other Loan Documents:

 

(a) are within the
Company’s corporate powers, as applicable, have been duly authorized by all necessary corporate action, are not in contravention
of law or the terms of the Company’s certificate of Incorporation, By-laws, or other organizational documents, or to the
conduct of the Company’s business or of any material contract or undertaking to which the Company is a party or by which
the Company is bound;

 

(b) will not conflict
with or violate any law or regulation, or any judgment, order or decree of any governmental body;

 

(c)will not require
the consent of any governmental body, any party to a contract or any other person or entity; and

 

    	5

    	 

    

  

(d) will not conflict
with, nor result in any breach in any of the provisions of or constitute a default under or result in the creation of any lien
upon any asset of the Company under the provisions of any agreement, instrument, or other document to which the Company is a party
or by which it or its property is a party or by which it may be bound, except for the consent of Partners for Growth III, L.P.,
a Delaware limited partnership, which the Company has obtained.

 

9.6There is no
litigation pending or, to the Company’s knowledge, threatened against the Company.

 

9.7The Company
has paid in full all federal, state, local and foreign taxes and assessments and has timely filed all tax returns. No tax audit
is pending or, to the Company’s knowledge, threatened against the Company.

 

9.8No representation
or warranty made by the Company in this Purchase Agreement or in any other Loan Document contains any untrue statement of fact
or omits to state any fact necessary to make the statements herein or therein not misleading. There is no fact known to the Company
or which reasonably should be known to the Company which the Company has not disclosed to the Noteholders in writing with respect
to the transactions contemplated by this Purchase Agreement.

 

 

10.Representations
of the Noteholder. Each Noteholder represents and warrants to the Company that:

 

10.1The Noteholder
has sufficient knowledge and experience in investing in companies similar to the Company in terms of the Company's stage of development
so as to be able to evaluate the risks and merits of its investment in the Company and it is able financially to bear the risks
thereof;

 

10.2The Noteholder
has had an opportunity to discuss the Company, business, management and financial affairs with the Company's management and has
received (or had made available to the Noteholder) any financial and business documents requested and believes the material and
information provided is sufficient to permit making an informed decision regarding this Purchase Agreement and the other Loan Documents;

 

10.3The Noteholder
is entering into this Purchase Agreement and acquiring the Note for the Noteholder’s own account for the purpose of investment
and not with a view to or for sale in connection with any distribution thereof other than in compliance with the Securities Act
and applicable state securities laws; and

 

10.4The Noteholder
understands that (i) the Note has not been registered under the Securities Act by reason of its issuance in a transaction exempt
from the registration requirements of the Securities Act pursuant to Section 4(2) thereof or Rule 504, 505 or 506 promulgated under
the Securities Act, (ii) this Note must be held indefinitely unless a subsequent disposition thereof is registered under the Securities
Act or is exempt from such registration, and (iii) this Note will bear a legend substantially to such effect.

 

    	6

    	 

    

  

10.5The Noteholder
is an accredited investor within the meaning of Regulation D under the Securities Act.

 

10.6The Noteholder
expressly understands and agrees that its security interests set forth in Section 4.2 are subject to the rights of Partners for
Growth III, L.P., as further set forth in the Senior Lender Subordination Agreement.

 

11.Governing Law; Jurisdiction.
This Purchase Agreement and each other Loan Document (unless and except to the extent expressly provided otherwise in any such
other Loan Document), and all matters relating hereto or thereto or arising herefrom or therefrom (whether arising under contract
law, tort law or otherwise) shall be governed by and construed in accordance with the laws of the State of New York without regard
to the conflict of laws principles thereof. Any judicial proceeding under this Purchase Agreement or any other Loan Document may
be brought in any court of competent jurisdiction in the County of New York, State of New York. The Company accepts for itself
and in connection with its properties, generally and unconditionally, the jurisdiction of the aforesaid courts, and irrevocably
agrees to be bound by any judgment rendered thereby in connection with this Purchase Agreement or any other Loan Document.

 

12.Counterparts. This Agreement
may be executed in two or more counterparts, each of which shall be deemed an original, but all of which together shall constitute
one and the same instrument.

 

13.Amendments and
Waivers. This Agreement may not be amended or modified, and no provisions hereof may be waived, without the written consent
of the Company and the Noteholders.

 

14.Notice.
Any notice or request hereunder may be given to the Company or any Noteholder at their respective addresses set forth below or
at such other address as may hereafter be specified in a notice delivered in accordance with this Section. Any notice, request,
demand, direction or other communication (a “Notice”) to be given to or made upon any party hereto under any
provision of this Agreement shall be given or made by telephone or in writing (which includes by means of electronic transmission
(i.e., “e-mail”) or facsimile transmission. Any Notice must be delivered to the applicable parties hereto at the addresses
and numbers set forth below. “Business Day” means a day other than a Saturday, Sunday, or federal or New York
state holiday. Any Notice shall be effective:

 

(a)               
In the case of hand delivery, when delivered;

 

(b)              
If given by mail, four (4) days after such Notice is deposited with the United States Postal Service, with first-class postage
prepaid, return receipt requested;

 

(c)In the case of
a telephonic Notice, when a party is contacted by telephone, if delivery of such telephonic Notice is confirmed no later than the
next Business Day by hand delivery, a facsimile or electronic transmission (with confirmation of delivery) or an overnight courier
delivery of a confirmatory Notice (received at or before noon on such next Business Day);

 

    	7

    	 

    

  

(d)In the case of
a facsimile transmission, when sent to the applicable party’s facsimile machine’s telephone number, if the party sending
such Notice receives confirmation of delivery;

 

(e)In the case of
electronic transmission, when transmitted, if transmitted on a Business Day, or upon commencement of the next succeeding Business
Day, provided that the party sending such Notice receives confirmation of delivery;

 

(f)If given by any
other means (including by overnight courier), when actually received.

 

 

If to the Company:

 

Healthcare
Corporation of America

66 Ford
Road, Suite 230

Denville,
NJ 07834

Attention:
__________________ 

(e-mail)

(fax)

 

If to
the Noteholders:

 

As set forth
in Exhibit A.

 

 

[signature page to follow]

 

    	8

    	 

    

 

IN WITNESS WHEREOF,
the Company and the Noteholders have executed this Agreement as of the day and year first above written.

 

	COMPANY:	 	HEALTHCARE CORPORATION OF AMERICA
	 	 	 	 	 
	 	 	By:	 	 
	 	 	 	 	 
	 	 	Name:	 	 
	 	 	 	 	 
	 	 	Title:	 	 

 

 

	NOTEHOLDERS:	 	 	 	 
	 	 	 	 	 	 
	 	 	 	 	 	 
	SELWAY CAPITAL
    HOLDINGS LLC	CHARDAN CAPITAL
    MARKETS LLC
	 	 	 	 	 	 
	By:	 	 	By:	 	 
	 	 	 	 	 	 
	Name:	 	 	Name:	 	 
	 	 	 	 	 	 
	Title:	 	 	Title:	 	 

 

 

[INSERT]

 

	 	 	 
	By:	 	 
	 	 	 
	Name:	 	 
	 	 	 
	Title:	 	 

 

    	9

    	 

    

 

Exhibit A

 

Noteholders and Respective Note Amounts

 

 

	Name	Address	Note Amount
	Selway Capital Holdings LLC	
        900 Third Avenue, 19th floor

        New York, NY 10022

         

         

         

        With a copy to:

        Pearl Cohen Zedek Latzer Baratz LLP

        1500 Broadway

        New York, NY 10036

        Attn: Oded Kadosh, Esq.

        (e-mail) okadosh@pearlcohen.com

        (fax) (646) 878-0838
	$900,000
	Chardan Capital Markets LLC	
        17 State Street, Suite 1600

        New York, NY 10004

        Attention: Kerry Propper

         

         
	$50,000
	Evan Genack	
         

         

         
	$50,000

 

    	10

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