Document:

ex_149509.htm

Exhibit 10.2

 

 

CUTERA, INC.

 

CHANGE OF CONTROL AND SEVERANCE AGREEMENT

 

This Change of Control and Severance Agreement (the “Agreement”) is made and entered into by and between Mr. Dave Mowry (“Employee”) and Cutera, Inc., a Delaware corporation (the “Company”), effective as of date that Employee commences employment with the Company (the “Effective Date”).

 

RECITALS

 

A.     The Company may from time to time consider the possibility of an acquisition by another company or other change of control, or may terminate Employee’s employment without cause or may cause Employee to resign his or her employment as a result of actions taken by the Company that materially and negatively change Employee’s employment relationship with the Company. The Compensation Committee of the Board of Directors of the Company (the “Committee”) recognizes that the risk of such events occurring can be a distraction to Employee and can cause Employee to consider alternative employment opportunities. The Committee has determined that it is in the best interests of the Company and its stockholders to assure that the Company will have the continued dedication and objectivity of Employee, notwithstanding the possibility that such events may occur.

 

B.     The Committee believes that it is in the best interests of the Company and its stockholders to provide Employee with an incentive to continue his or her employment.

 

C.     The Committee believes that it is imperative to provide Employee with certain severance benefits in certain instances upon Employee’s termination of employment. These benefits will provide Employee with enhanced financial security and incentive and encouragement to remain with the Company notwithstanding the possibility that certain events may occur that lead to the termination of Employee’s employment.

 

D.     Certain capitalized terms used in the Agreement are defined in Section 6 below.

 

E.     This Agreement supersedes and replaces, in its entirety, any prior agreement between the Company and Employee relating to the subject matter that is contained in this Agreement.

 

AGREEMENT

 

NOW, THEREFORE, in consideration of the mutual covenants contained herein, the parties hereto agree as follows:

 

1.     Term of Agreement. This Agreement will have an initial term of four (4) years commencing on the Effective Date (the “Initial Term”). On the fourth anniversary of the Effective Date, this Agreement will renew automatically for additional one (1) year terms (each, an “Additional Term”) unless either party provides the other party with written notice of non-renewal at least sixty (60) days prior to the date of automatic renewal. Notwithstanding the foregoing sentence, if a Change of Control occurs at any time during either the Initial Term or an Additional Term, the term of this Agreement will extend automatically through the date that is twelve (12) months following the effective date of the Change of Control. If Employee becomes entitled to benefits under Section 4 during the term of this Agreement, the Agreement will not terminate until all of the obligations of the parties hereto with respect to this Agreement have been satisfied.

 

 

 

 

2.     At-Will Employment. The Company and Employee acknowledge that Employee’s employment is and will continue to be at-will, as defined under applicable law. If Employee’s employment terminates for any reason, including (without limitation) any termination prior to or following a Change of Control as provided herein, Employee will not be entitled to any payments, benefits, damages, awards or compensation other than as provided by this Agreement or as provided in any employment agreement entered into between the Company and Employee, and the payment of accrued but unpaid wages, as required by law, and any unreimbursed reimbursable expenses.

 

3.     Change of Control. In the event of a Change of Control, with respect to any equity awards granted to Employee by the Company during the twelve (12) month period occurring immediately prior to the date of the Change of Control that, as of the Change of Control, are outstanding and, but for this Section 3, would be subject to achievement of performance-based vesting conditions (other than continued service), but excluding any performance-based restricted stock unit granted to Employee as a “New Employee Grant” as referenced in the offer letter between Employee and the Company dated June 22, 2019 (such performance-based awards other than the “New Employee Grant,” the “Performance Awards”), (a) any portion of such Performance Awards for which the performance period is ongoing as of the date of the Change of Control (the “Eligible Portion”) will be shortened to a date determined by the Board or Committee, in its sole discretion, that occurs shortly before the date of the Change of Control (up to ten (10) days prior to the date of the Change of Control), (b) the Board or Committee, in its sole discretion, will determine the extent to which the applicable performance criteria for such shortened performance period, prorated or otherwise appropriately adjusted to reflect the shortened performance period, have been achieved, (c) the Eligible Portion will vest as of immediately prior to the Change of Control to the extent that such applicable performance criteria have been met, and (d) any remaining portion of the Performance Awards that has not vested prior to the Change of Control will terminate.

 

4.     Severance Benefits.

 

(a)     Termination without Cause Not in Connection with a Change of Control. If the Company terminates Employee’s employment with the Company without Cause (and other than due to his death or Disability) other than during the period beginning three (3) months before, and ending twelve (12) months following, a Change of Control (such period, the “Change of Control Period”), and Employee signs and does not revoke a release of claims with the Company (in substantially the same form as set forth in Exhibit A) (the “Release”) and provided that such Release becomes effective and irrevocable no later than sixty (60) days following Employee’s termination date (such deadline, the “Release Deadline”), then subject to this Section 4, Employee will receive the following:

 

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(i)     Severance Payment. Employee will receive a lump-sum payment equal to the sum of (A) twelve (12) months of Employee’s annual base salary as in effect immediately prior to Employee’s termination date, less applicable withholdings, (B) one hundred percent (100%) of Employee’s actual bonus for the prior fiscal year of the Company, less applicable withholdings, and (C) the product of (x) twelve (12) months, multiplied by (y) the amount of monthly premium that Employee otherwise would be required to pay for Employee and any of Employee’s eligible dependents (if applicable) for the first month of Company group health care coverage under the Consolidated Omnibus Budget Reconciliation Act of 1985, as amended (“COBRA”), without regard to whether Employee elects continued health coverage under COBRA for Employee and any of Employee’s eligible dependents less to applicable withholdings.

 

(ii)     Accrued Compensation. The Company will pay Employee all accrued but unpaid vacation, expense reimbursements, wages, and other benefits due to Employee under any Company-provided plans, policies, and arrangements.

 

(b)     Termination without Cause or Resignation for Good Reason in Connection with a Change of Control. If the Company terminates Employee’s employment with the Company without Cause (and other than due to his death or Disability) or if Employee resigns from such employment for Good Reason, and such termination occurs during the Change of Control Period, and Employee signs and does not revoke the Release and provided that such Release becomes effective and irrevocable no later than the Release Deadline, then subject to this Section 4, Employee will receive the following:

 

(i)     Severance Payment. Employee will receive a lump-sum payment equal to the sum of (A) twelve (12) months of Employee’s annual base salary as in effect immediately prior to Employee’s termination date or, if greater, at the level in effect immediately prior to the Change of Control, less applicable withholdings, (B) one hundred percent (100%) of Employee’s actual bonus for the prior fiscal year of the Company, less applicable withholdings, and (C) the product of (x) twelve (12) months, multiplied by (y) the amount of monthly premium that Employee otherwise would be required to pay for Employee and any of Employee’s eligible dependents (if applicable) for the first month of Company group health care coverage under COBRA, without regard to whether Employee elects continued health coverage under COBRA for Employee and any of Employee’s eligible dependents, less applicable withholdings.

 

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(ii)     Vesting Acceleration of Equity Awards. The forfeiture restrictions on all shares of time-based vesting restricted stock as to which such restrictions remain in place that are outstanding as of the date of termination of Employee’s employment with the Company will lapse immediately, and all unvested, time-based vesting stock options, restricted stock units, and other similar equity awards granted by the Company that are outstanding as of the date of termination of Employee’s employment with the Company will vest immediately as to one hundred percent (100%) of the shares subject thereto. Except as may be set forth in an award agreement or other agreement between the Company and Employee any equity awards that are to vest, and/or for which the amount of the awards to vest is to be determined, based on the achievement of performance criteria (e.g., PSU) as of the date of termination of Employee’s employment with the Company shall not be eligible for the vesting acceleration described in this Section 4(b). If Employee is terminated for Cause or due to death or Disability, resigns with or without Good Reason outside of the Change of Control Period, or resigns without Good Reason during the Change of Control Period, then the unvested equity awards that are outstanding as of the date of employment termination shall terminate immediately pursuant to their terms. If Employee’s employment has been terminated by the Company without Cause (and other than due to his death or Disability) or by Employee for Good Reason prior to a Change of Control, then Employee’s unvested, time-based equity awards will remain outstanding and unvested for an additional three (3) months following termination (but in no event beyond each such equity award’s original maximum term to expiration, if applicable) solely for purposes of determining whether a Change of Control occurs during such period. For the avoidance of doubt, the immediately preceding sentence will not apply to any Performance Awards. If a Change of Control does not occur during the three (3) month period following Employee’s termination then the unvested, time-based equity awards shall terminate at the end of such period. If Employee’s employment has been terminated by the Company without Cause (and other than due to his death or Disability) or by Employee for Good Reason and a Change of Control occurs during such three (3) month period following termination, such unvested, time-based equity awards that are outstanding as of the date of termination of Employee’s employment with the Company (and are still within their maximum term to expiration) shall accelerate vesting in accordance with the terms of this Section 4.

 

(iii)     Accrued Compensation. The Company will pay Employee all accrued but unpaid vacation, expense reimbursements, wages, and other benefits due to Employee under any Company-provided plans, policies, and arrangements.

 

(c)     Timing of Payments.

 

(i)     If the Release does not become effective and irrevocable by the Release Deadline, Employee will forfeit any rights to severance or benefits under this Agreement other than the accrued compensation set forth in Section 4(a)(ii) and Section 4(b)(iii). In no event will severance payments or benefits be paid or provided until the Release becomes effective and irrevocable.

 

(ii)     Unless otherwise required by Section 4(g), the Company will pay any severance payments set forth in Section 4(a)(i) and Section 4(b)(i) in a lump-sum payment payable within sixty (60) days following Employee’s termination date; provided, however, that no severance or other benefits, other than the accrued compensation set forth in Section 4(a)(ii) and Section 4(b)(iii), will be paid or provided until the Release in Section 4(a) and Section 4(b) becomes effective and irrevocable. If Employee should die before all of the severance amounts have been paid, such unpaid amounts will be paid in a lump-sum payment promptly following such event to Employee’s designated beneficiary, if living, or otherwise to the personal representative of Employee’s estate.

 

(d)     Voluntary Resignation; Termination for Cause. If Employee’s employment with the Company terminates (i) voluntarily by Employee (with or without Good Reason) outside of the Change of Control Period or by Employee other than for Good Reason during the Change of Control Period, or (ii) for Cause by the Company, then Employee will not be entitled to receive severance or other benefits except for those (if any) as may then be established under the Company’s then existing severance and benefits plans and practices or pursuant to other written agreements with the Company.

 

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(e)     Disability; Death. If the Company terminates Employee’s employment as a result of Employee’s Disability, or Employee’s employment terminates due to his or her death, then Employee will not be entitled to receive any other severance or other benefits except for those (if any) as may then be established under the Company’s then existing written severance and benefits plans and practices or pursuant to other written agreements with the Company.

 

(f)     Exclusive Remedy. In the event of a termination of Employee’s employment as set forth in Section 4(a) and Section 4(b) of this Agreement, the provisions of this Section 4 are intended to be and are exclusive and in lieu of any other rights or remedies to which Employee or the Company otherwise may be entitled, whether at law, tort or contract, in equity, or under this Agreement (other than the payment of accrued but unpaid wages, as required by law, and any unreimbursed reimbursable expenses). Employee will be entitled to no benefits, compensation or other payments or rights upon a termination of employment prior to or following a Change of Control other than those benefits expressly set forth in Section 4 of this Agreement. For purposes of clarity, in the event a termination of Employee’s employment as set forth in Section 4(a) or Section 4(b) of this Agreement occurs during the period within three (3) months prior to a Change of Control, any severance payments and benefits to be provided to Employee under Section 4(b) will be reduced by any amounts that already were provided to Employee under Section 4(a).

 

(g)     Section 409A.

 

(i)     Notwithstanding anything to the contrary in this Agreement, no severance pay or benefits to be paid or provided to Employee, if any, pursuant to this Agreement that, when considered together with any other severance payments or separation benefits are considered deferred compensation under Section 409A of the Internal Revenue Code of 1986, as amended (the “Code”), and the final regulations and any guidance promulgated thereunder (“Section 409A”) (together, the “Deferred Compensation Separation Benefits”) will be paid or otherwise provided until Employee has a “separation from service” within the meaning of Section 409A. Similarly, no severance payable to Employee, if any, pursuant to this Agreement that otherwise would be exempt from Section 409A pursuant to Treasury Regulation Section 1.409A-1(b)(9) will be payable until Employee has a “separation from service” within the meaning of Section 409A.

 

(ii)     Any severance payments or benefits under this Agreement that would be considered Deferred Compensation Severance Benefits will be paid on, or, in the case of installments, will not commence until, the sixtieth (60th) day following Employee’s separation from service, or, if later, such time as required by Section 4(g)(iii). Except as required by Section 3(g)(iii), any installment payments that would have been made to Employee during the sixty (60) day period immediately following Employee’s separation from service but for the preceding sentence will be paid to Employee on the sixtieth (60th) day following Employee’s separation from service and the remaining payments shall be made as provided in this Agreement.

 

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(iii)     Notwithstanding anything to the contrary in this Agreement, if Employee is a “specified employee” within the meaning of Section 409A at the time of Employee’s termination (other than due to death), then the Deferred Compensation Separation Benefits that are payable within the first six (6) months following Employee’s separation from service, will become payable on the first payroll date that occurs on or after the date six (6) months and one (1) day following the date of Employee’s separation from service. All subsequent Deferred Compensation Separation Benefits, if any, will be payable in accordance with the payment schedule applicable to each payment or benefit. Notwithstanding anything herein to the contrary, if Employee dies following Employee’s separation from service, but prior to the six (6) month anniversary of the separation from service, then any payments delayed in accordance with this paragraph will be payable in a lump sum as soon as administratively practicable after the date of Employee’s death and all other Deferred Compensation Separation Benefits will be payable in accordance with the payment schedule applicable to each payment or benefit. Each payment, installment and benefit payable under this Agreement is intended to constitute a separate payment for purposes of Section 1.409A-2(b)(2) of the Treasury Regulations. To the extent necessary to comply with Section 409A, references to the termination of Employee’s employment with the Company or similar terms shall mean a “separation from service” within the meaning of Section 409A.

 

(iv)     Any amount paid under this Agreement that satisfies the requirements of the “short-term deferral” rule set forth in Section 1.409A-1(b)(4) of the Treasury Regulations will not constitute Deferred Compensation Separation Benefits for purposes of clause (i) above. It is the intent of this Agreement that all cash severance payments under Sections 4(a)(i) and 4(b)(i) will satisfy the requirements of the “short-term deferral” rule.

 

(v)     Any amount paid under this Agreement that qualifies as a payment made as a result of an involuntary separation from service pursuant to Section 1.409A-1(b)(9)(iii) of the Treasury Regulations that does not exceed the Section 409A Limit (as defined below) will not constitute Deferred Compensation Separation Benefits for purposes of clause (i) above.

 

(vi)     The foregoing provisions are intended to be exempt from or comply with the requirements of Section 409A so that none of the severance payments and benefits to be provided hereunder will be subject to the additional tax imposed under Section 409A, and any ambiguities or ambiguous terms herein will be interpreted to be exempt or so comply. The Company and Employee agree to work together in good faith to consider amendments to this Agreement and to take such reasonable actions which are necessary, appropriate or desirable to avoid imposition of any additional tax or income recognition prior to actual payment to Employee under Section 409A. In no event will the Company or any of its parent, subsidiaries or affiliates have any liability or obligation to reimburse, indemnify, or hold harmless Employee for any taxes, penalties, or interest imposed, or other costs incurred, as a result of Section 409A.

 

(h)     Other Requirements. Employee’s receipt of any payments or benefits under this Section 4 will be subject to Employee continuing to comply with the terms of any confidential information agreement executed by Employee in favor of the Company and the provisions of this Agreement.

 

5.     Limitation on Payments. In the event that the severance and other benefits provided for in this Agreement or otherwise payable to Employee (i) constitute “parachute payments” within the meaning of Section 280G of the Code, and (ii) but for this Section 5, would be subject to the excise tax imposed by Section 4999 of the Code, then Employee’s benefits under Section 4 will be either:

 

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(a)     delivered in full, or

 

(b)     delivered as to such lesser extent which would result in no portion of such benefits being subject to the excise tax under Section 4999 of the Code,

 

whichever of the foregoing amounts, taking into account the applicable federal, state and local income taxes and the excise tax imposed by Section 4999, results in the receipt by Employee on an after-tax basis, of the greatest amount of benefits, notwithstanding that all or some portion of such benefits may be taxable under Section 4999 of the Code. If a reduction in severance and other benefits constituting “parachute payments” is necessary so that benefits are delivered to a lesser extent, reduction will occur in the following order: (i) reduction of cash payments in reverse chronological order (that is, the cash payment owed on the latest date following the occurrence of the event triggering the Excise Tax will be the first cash payment to be reduced); (ii) cancellation of equity awards that were granted “contingent on a change in ownership or control” within the meaning of Section 280G of the Code in the reverse order of date of grant of the awards (that is, the most recently granted equity awards will be cancelled first); (iii) reduction of the accelerated vesting of equity awards in the reverse order of date of grant of the awards (that is, the vesting of the most recently granted equity awards will be cancelled first); and (iv) reduction of employee benefits in reverse chronological order (that is, the benefit owed on the latest date following the occurrence of the event triggering the Excise Tax will be the first benefit to be reduced). In no event shall Employee have any discretion with respect to the ordering of payment reductions. Employee will be solely responsible for the payment of all personal tax liability that is incurred as a result of the payments and benefits received under this Agreement, and Employee will not be reimbursed, indemnified, or held harmless by the Company for any of those payments of personal tax liability.

 

Unless the Company and Employee otherwise agree in writing, any determination required under this Section 5 will be made in writing by nationally recognized accounting or valuation firm selected by the Company or such other person or entity to which the parties mutually agree (the “Accountants”), whose determination will be conclusive and binding upon Employee and the Company for all purposes. For purposes of making the calculations required by this Section 5, the Accountants may make reasonable assumptions and approximations concerning applicable taxes and may rely on reasonable, good faith interpretations concerning the application of Sections 280G and 4999 of the Code. The Company and Employee will furnish to the Accountants such information and documents as the Accountants may reasonably request in order to make a determination under this Section. The Company will bear the costs and make all payments for the Accountants’ services in connection with any calculations contemplated by this Section. The Company will have no liability to Employee for the determinations of the Accountants.

 

6.     Definition of Terms. The following terms referred to in this Agreement will have the following meanings:

 

(a)     Cause. “Cause” will mean Employee’s termination only upon:

 

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(i)     Employee’s willful failure to substantially perform Employee’s duties (subject to notice and a reasonable period to cure), other than a failure resulting from Employee’s complete or partial incapacity due to physical or mental illness or impairment.

 

(ii)     Employee’s willful act which constitutes gross misconduct and which is injurious to the Company;

 

(iii)     Employee’s willful breach of a material provision of this Agreement (subject to notice and reasonable period to cure); or

 

(iv)     Employee’s knowing, material and willful violation of a federal or state law or regulation applicable to the business of the Company.

 

(b)     Change of Control. “Change of Control” will mean the occurrence of any of the following events:

 

(i)     Change in Ownership of the Company. A change in the ownership of the Company which occurs on the date that any one person, or more than one person acting as a group (“Person”), acquires ownership of the stock of the Company that, together with the stock held by such Person, constitutes more than 50% of the total voting power of the stock of the Company, except that any change in the ownership of the stock of the Company as a result of a private financing of the Company that is approved by the Company’s Board of Directors (the “Board”) will not be considered a Change of Control; or

 

(ii)     Change in Effective Control of the Company. A change in the effective control of the Company which occurs on the date that a majority of members of the Board is replaced during any twelve (12) month period by directors whose appointment or election is not endorsed by a majority of the members of the Board prior to the date of the appointment or election. For purposes of this clause (ii), if any Person is considered to be in effective control of the Company, the acquisition of additional control of the Company by the same Person will not be considered a Change of Control; or

 

(iii)     Change in Ownership of a Substantial Portion of the Company’s Assets. A change in the ownership of a substantial portion of the Company’s assets which occurs on the date that any Person acquires (or has acquired during the twelve (12) month period ending on the date of the most recent acquisition by such person or persons) assets from the Company that have a total gross fair market value equal to or more than 50% of the total gross fair market value of all of the assets of the Company immediately prior to such acquisition or acquisitions. For purposes of this subsection (iii), gross fair market value means the value of the assets of the Company, or the value of the assets being disposed of, determined without regard to any liabilities associated with such assets.

 

For these purposes, persons will be considered to be acting as a group if they are owners of a corporation that enters into a merger, consolidation, purchase or acquisition of stock, or similar business transaction with the Company.

 

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Notwithstanding the foregoing provisions of this definition, a transaction will not be deemed a Change of Control unless the transaction qualifies as a change in control event within the meaning of Section 409A.

 

(c)     Disability. “Disability” will mean that Employee is unable to engage in any substantial gainful activity, and specifically, the essential functions of Employee’s position, with or without reasonable accommodation, by reason of any medically determinable physical or mental impairment that can be expected to result in death or can be expected to last for a continuous period of not less than twelve (12) months. Termination resulting from Disability may only be effected after at least thirty (30) days’ written notice by the Company of its intention to terminate Employee’s employment. In the event that Employee resumes the performance of substantially all of his or her duties hereunder before the termination of his or her employment becomes effective, the notice of intent to terminate will automatically be deemed to have been revoked.

 

(d)     Good Reason. “Good Reason” will mean Employee’s termination of employment within ninety (90) days following the expiration of any cure period (discussed below) following the occurrence of one or more of the following, without Employee’s consent:

 

(i)     A material reduction in Employee’s authority, duties, or responsibilities relative to duties, position or responsibilities in effect immediately prior to such reduction;

 

(ii)     A material reduction in Employee’s cash compensation as in effect immediately prior to such reduction; or

 

(iii)     A material change in the geographic location at which Employee must perform services (in other words, the relocation of Employee to a facility that is more than fifty (50) miles from Employee’s then-current location).

 

Employee will not resign for Good Reason without first providing the Company with written notice within ninety (90) days of the event that Employee believes constitutes “Good Reason” specifically identifying the acts or omissions constituting the grounds for Good Reason and a reasonable cure period of not less than thirty (30) days following the date of such notice and such grounds for “Good Reason” have not been cured during such cure period.

 

(e)     Section 409A Limit. “Section 409A Limit” will mean the lesser of two (2) times: (i) Employee’s annualized compensation based upon the annual rate of pay paid to Employee during the Employee’s taxable year preceding the Employee’s taxable year of Employee’s separation from service as determined under, and with such adjustments as are set forth in, Treasury Regulation Section 1.409A-1(b)(9)(iii)(A)(1) and any Internal Revenue Service guidance issued with respect thereto; or (ii) the maximum amount that may be taken into account under a qualified plan pursuant to Section 401(a)(17) of the Code for the year in which Employee’s separation from service occurred.

 

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7.     Successors.

 

(a)     The Company’s Successors. Any successor to the Company (whether direct or indirect and whether by purchase, merger, consolidation, liquidation or otherwise) to all or substantially all of the Company’s business and/or assets will assume the obligations under this Agreement and agree expressly to perform the obligations under this Agreement in the same manner and to the same extent as the Company would be required to perform such obligations in the absence of a succession. For all purposes under this Agreement, the term “Company” will include any successor to the Company’s business and/or assets which executes and delivers the assumption agreement described in this Section 7(a) or which becomes bound by the terms of this Agreement by operation of law.

 

(b)     Employee’s Successors. The terms of this Agreement and all rights of Employee hereunder will inure to the benefit of, and be enforceable by, Employee’s personal or legal representatives, executors, administrators, successors, heirs, distributees, devisees and legatees.

 

8.     Arbitration.

 

(a)     The Company and Employee each agree that any and all disputes arising out of the terms of this Agreement, Employee’s employment by the Company, Employee’s service as an officer or director of the Company, or Employee’s compensation and benefits, their interpretation and any of the matters herein released, will be subject to binding arbitration under the arbitration rules set forth in California Code of Civil Procedure Sections 1280 through 1294.2, including Section 1281.8 (the “Act”), and pursuant to California law. Disputes that the Company and Employee agree to arbitrate, and thereby agree to waive any right to a trial by jury, include any statutory claims under local, state, or federal law, including, but not limited to, claims under Title VII of the Civil Rights Act of 1964, the Americans with Disabilities Act of 1990, the Age Discrimination in Employment Act of 1967, the Older Workers Benefit Protection Act, the Sarbanes-Oxley Act, the Worker Adjustment and Retraining Notification Act, the California Fair Employment and Housing Act, the Family and Medical Leave Act, the California Family Rights Act, the California Labor Code, claims of harassment, discrimination, and wrongful termination, and any statutory or common law claims. The Company and Employee further understand that this agreement to arbitrate also applies to any disputes that the Company may have with Employee. The Company and Employee further agree that, to the fullest extent permitted by law, Employee may bring any arbitration proceeding only in Employee’s individual capacity, and not as a plaintiff, representative, or class member in any purported class, collective, or representative lawsuit or proceeding. Nothing in this agreement prevents Employee from bringing a representative lawsuit or proceeding as permitted by the California Labor Code’s Private Attorneys General Act of 2004.

 

(b)     Procedure. The Company and Employee agree that any arbitration will be administered by Judicial Arbitration & Mediation Services, Inc. (“JAMS”), pursuant to its Employment Arbitration Rules & Procedures (the “JAMS Rules”). The Arbitrator will have the power to decide any motions brought by any party to the arbitration, including motions for summary judgment and/or adjudication, motions to dismiss and demurrers, and motions for class certification, prior to any arbitration hearing. The Arbitrator will have the power to award any remedies available under applicable law, and the Arbitrator will award attorneys’ fees and costs to the prevailing party, except as prohibited by law. The Company will pay for any administrative or hearing fees charged by the Arbitrator or JAMS except that Employee will pay any filing fees associated with any arbitration that Employee initiates, but only so much of the filing fees as Employee would have instead paid had he or she filed a complaint in a court of law. The Arbitrator will administer and conduct any arbitration in accordance with California law, including the California Code of Civil Procedure, and the Arbitrator will apply substantive and procedural California law to any dispute or claim, without reference to rules of conflict of law. To the extent that the JAMS Rules conflict with California law, California law will take precedence. The decision of the Arbitrator will be in writing. Any arbitration under this Agreement will be conducted in San Mateo County, California.

 

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(c)     Remedy. Except as provided by the Act and this Agreement, arbitration will be the sole, exclusive, and final remedy for any dispute between Employee and the Company. Accordingly, except as provided for by the Act and this Agreement, neither Employee nor the Company will be permitted to pursue court action regarding claims that are subject to arbitration.

 

(d)     Administrative Relief. Employee understands that this Agreement does not prohibit him or her from pursuing any administrative claim with a local, state, or federal administrative body or government agency that is authorized to enforce or administer laws related to employment, including, but not limited to, the Department of Fair Employment and Housing, the Equal Employment Opportunity Commission, the National Labor Relations Board, or the Workers’ Compensation Board. This Agreement does, however, preclude Employee from pursuing court action regarding any such claim, except as permitted by law.

 

(e)     Voluntary Nature of Agreement. Each of the Company and Employee acknowledges and agrees that such party is executing this Agreement voluntarily and without any duress or undue influence by anyone. Employee further acknowledges and agrees that he or she has carefully read this Agreement and has asked any questions needed for him or her to understand the terms, consequences, and binding effect of this Agreement and fully understand it, including that Employee is waiving his or her right to a jury trial. Finally, Employee agrees that he or she has been provided an opportunity to seek the advice of an attorney of his or her choice before signing this Agreement.

 

9.     Notice.

 

(a)     General. Notices and all other communications contemplated by this Agreement will be in writing and will be deemed to have been duly given when personally delivered when mailed by U.S. registered or certified mail, return receipt requested and postage prepaid or when delivered by a private courier service such as UPS, DHL or Federal Express that has tracking capability. In the case of Employee, mailed notices will be addressed to him or her at the home address which he or she most recently communicated to the Company in writing. In the case of the Company, mailed notices will be addressed to its corporate headquarters, and all notices will be directed to the attention of its President.

 

(b)     Notice of Termination. Any termination by the Company for Cause or by Employee for Good Reason will be communicated by a notice of termination to the other party hereto given in accordance with Section 9(a) of this Agreement. Such notice will indicate the specific termination provision in this Agreement relied upon, will set forth in reasonable detail the facts and circumstances claimed to provide a basis for termination under the provision so indicated, and will specify the termination date (which will be not more than ninety (90) days after the giving of such notice). The failure by Employee to include in the notice any fact or circumstance which contributes to a showing of Good Reason will not waive any right of Employee hereunder or preclude Employee from asserting such fact or circumstance in enforcing his or her rights hereunder.

 

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10.     Miscellaneous Provisions.

 

(a)     No Duty to Mitigate. Employee will not be required to mitigate the amount of any payment contemplated by this Agreement, nor will any such payment be reduced by any earnings that Employee may receive from any other source.

 

(b)     Waiver. No provision of this Agreement will be modified, waived or discharged unless the modification, waiver or discharge is agreed to in writing and signed by Employee and by an authorized officer of the Company (other than Employee). No waiver by either party of any breach of, or of compliance with, any condition or provision of this Agreement by the other party will be considered a waiver of any other condition or provision or of the same condition or provision at another time.

 

(c)     Headings. All captions and section headings used in this Agreement are for convenient reference only and do not form a part of this Agreement.

 

(d)     Entire Agreement. This Agreement constitutes the entire agreement of the parties hereto and supersedes in their entirety all prior representations, understandings, undertakings or agreements (whether oral or written and whether expressed or implied) of the parties with respect to the subject matter hereof. No waiver, alteration, or modification of any of the provisions of this Agreement will be binding unless in writing and signed by duly authorized representatives of the parties hereto and which specifically mention this Agreement.

 

(e)     Choice of Law. The validity, interpretation, construction and performance of this Agreement will be governed by the laws of the State of California (with the exception of its conflict of laws provisions). Any claims or legal actions by one party against the other arising out of the relationship between the parties contemplated herein (whether or not arising under this Agreement) will be commenced or maintained in any state or federal court located in the jurisdiction where Employee resides, and Employee and the Company hereby submit to the jurisdiction and venue of any such court.

 

(f)     Severability. The invalidity or unenforceability of any provision or provisions of this Agreement will not affect the validity or enforceability of any other provision hereof, which will remain in full force and effect.

 

(g)     Withholding. All payments made pursuant to this Agreement will be subject to withholding of applicable income, employment and other taxes.

 

(h)     Counterparts. This Agreement may be executed in counterparts, each of which will be deemed an original, but all of which together will constitute one and the same instrument.

 

-12-

 

 

(i)     Protected Activity. Nothing in this Agreement is intended to limit Employee’s rights to discuss the terms, wages, and working conditions of his employment, nor to deny him the right to disclose information pertaining to sexual harassment or any unlawful or potentially unlawful conduct, as protected by applicable law. Nothing in this Agreement limits or prohibits Employee from filing and/or pursuing a charge or complaint with, or otherwise communicating or cooperating with or participating in any investigation or proceeding that may be conducted by, any federal, state or local government agency or commission, including the Securities and Exchange Commission, the Equal Employment Opportunity Commission, the Occupational Safety and Health Administration, and the National Labor Relations Board (“Government Agencies”), including disclosing documents or other information as permitted by law, without giving notice to, or receiving authorization from, the Company. Notwithstanding, in making any such disclosures or communications, Employee to take all reasonable precautions to prevent any unauthorized use or disclosure of any information that may constitute the Company’s confidential information to any parties other than the Government Agencies. Employee further understands that Employee is not permitted to disclose the Company’s attorney-client privileged communications or attorney work product.

 

 

 

IN WITNESS WHEREOF, each of the parties has executed this Agreement, in the case of the Company by its duly authorized officer, as of the day and year set forth below.

 

	COMPANY:	 	EMPLOYEE:
	 	 	 	 	 
	Cutera, Inc.	 	 	 
	 	 	 	 	 
	 	 	 	 	 
	By:	/s/ Greg Barrett 	 	By:	/s/ Dave Mowry
	 	 	 	 	 
	Name:	Greg Barrett 	 	Name:	Dave Mowry
	 	 	 	 	 
	Title:	For the Cutera Board of Directors	 	 	 

          

 

-13-

 

 

EXHIBIT A

 

RELEASE

 

1.     Release of All Claims. In consideration for the benefits to which Employee is entitled pursuant to that certain CHANGE OF CONTROL AND SEVERANCE AGREEMENT dated ____________, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, Employee, for Employee and Employee’s heirs, assigns, and all persons and entities claiming by, through, or under Employee, hereby irrevocably, unconditionally, and completely releases, discharges, and agrees to hold harmless the Company and its Affiliates (hereinafter referred to, both individually and collectively, as “Releasees”) of and from any and all claims, liabilities, charges, demands, grievances, lawsuits, and causes of action of any kind or nature whatsoever, including without limitation claims for contribution, subrogation, or indemnification, whether direct or indirect, liquidated or unliquidated, known or unknown, which Employee has, had, or may claim to have against Releasees (hereinafter collectively referred to as “Claim(s)”).

 

2.     The release, discharge, and agreement to hold harmless set forth in this Section 2 includes, without limitation, any Claim(s) that Employee had, has, or may claim to have against Releasees:

 

a.     for wrongful or constructive discharge or termination, negligent or intentional infliction of emotional distress, breach of express or implied contract, breach of the covenant of good faith and fair dealing, violation of public policy, defamation, promissory estoppel, detrimental reliance, retaliation, tortious interference with contract or prospective economic advantage, invasion of privacy, whistleblower protection, hostile work environment, personal injury (whether physical or mental), or any other Claim(s), whether arising in tort or in contract;

 

b.     for discrimination, hostile work environment / harassment, retaliation, or otherwise arising under federal, state, or local law, including without limitation Title VII of the Civil Rights Act of 1964, the Civil Rights Act of 1991, the Equal Pay Act, all claims under Titles 29 and 42 of the United States Code, the Americans with Disabilities Act of 1990, the Rehabilitation Act of 1973, or any other federal, state, or local law prohibiting discrimination, harassment, or retaliation on the basis of race, color, national origin, religion, age, sex, sexual orientation, gender identity, disability, veteran status, or any other protected group status;

 

c.     for discrimination, hostile work environment / harassment, retaliation, or otherwise arising under the Age Discrimination in Employment Act, as amended by the Older Workers Benefit Protection Act arising on or before the date of this Agreement; and/or

 

d.     arising under the Employee Retirement Income Security Act (“ERISA”);

 

e.     arising under the Family and Medical Leave Act (“FMLA”);

 

f.     arising under any state or local employment and antidiscrimination law;

 

 

 

 

g.     arising under the Dodd-Frank Wall-Street Reform and Consumer Protection Act or other whistleblower protection to the full extent allowed by law;

 

h.     for unpaid wages, bonuses, commissions, or other compensation of any type or kind to the full extent allowed by law;

 

i.     for attorney’s fees and/or costs;

 

j.     for any other Claim(s) in any way related to or arising out of Employee’s employment with the Company or the termination of that employment;

 

k.     Arising under the California Fair Employment and Housing Act; and/or

 

l.     Arising under the federal Worker Adjustment and Retraining Notification Act (29 U.S. Code Chapter 23)(“WARN Act”) and California Labor Code §§ 1400 et seq. (“Cal-WARN Act”), which may entitle employee to 60 days advance notice prior to termination.

 

3.     Employee hereby waives the provisions of section 1542 of the California Civil Code, which states: “A general release does not extend to claims which the creditor does not know or suspect to exist in his or her favor at the time of executing the release, which if known by him or her must have materially affected his or her settlement with the debtor.”

 

4.     Nothing in this Agreement waives Employee’s rights, if any, to (i) continue Employee’s participation in the Company’s employee health benefit plan, as allowed by COBRA and the terms, conditions, and limitations of the plan, (ii) any vested rights that Employee may have under any employee pension or welfare benefit plan in which Employee participated as an employee of the Company, and/or (iii) any claims Employee has or may claim to have for worker’s compensation or unemployment benefits, and/or (iv) any claims that are non-waivable by law.

 

5.     Exclusion for Certain Claims. Notwithstanding the foregoing, the Company and Employee agree that the releases set forth in Sections 1 and 2 above do not apply to any claims arising after the Employee’s termination date, nor does anything herein prevent Employee or the Company from instituting any action to enforce the terms of this Agreement. The Parties agree and acknowledge that the release and waiver set forth in Sections 1 and 2 above do not prevent Employee from filing a charge of discrimination with or from participating or otherwise cooperating in any investigation or proceeding conducted by the Equal Employment Opportunity Commission, the California Department of Fair Employment and Housing, or any other comparable federal, state, or local agency relating to any claim or allegation of unlawful discrimination, harassment or retaliation. Notwithstanding the foregoing, Employee agrees that, to the full extent allowed by law, Employee is not entitled to and hereby waives any right to recover compensation, damages, or any other form of relief of any type or kind and/or reinstatement to employment that may be awarded or ordered by any court or administrative agency to or for Employee’s benefit arising from or relating to any Claim(s) released by Employee under this Agreement. Employee further specifically acknowledges and agrees that Employee is waiving, on behalf of Employee and Employee’s attorneys, all claims for fees and expenses and court costs.

 

-2-

 

 

6.     Full and Complete Release. Employee understands and agrees that Employee is releasing and waiving any Claim(s) that Employee does not know exists or may exist in Employee’s favor at the time Employee signs this Agreement which, if known by Employee, would materially affect Employee’s decision to sign this Agreement. Nonetheless, for the purpose of implementing a full and complete release of all Claim(s), Employee expressly acknowledges that the release set forth in Sections 1 and 2 is intended to include, without limitation, all Claim(s) that Employee does not know or suspect to exist in Employee’s favor and that the release set forth in Sections 1 and 2 includes the release and extinguishment of any such Claim(s). In addition, Employee agrees that Employee will not seek re-employment with the Company at any time in the future and that the provisions of this Section 6 are adequate and legal grounds to (a) reject Employee’s application for re-employment or (b) terminate Employee’s employment should Employee be rehired by the Company in violation of this Section 6.

 

7.     Employee agrees and covenants not to sue or prosecute any claim that might now or ever be asserted arising out of, or pertaining to, his or her employment with the Company and any of its predecessors or affiliates.

 

8.     Should any provision of this Agreement be held to be invalid or wholly or partially unenforceable by a final, non-appealable judgment in a court of competent jurisdiction, such holding shall not invalidate or void the remainder of this Agreement, and those portions held to be invalid or unenforceable shall be revised and reduced in scope so as to be valid and enforceable or, if such is not possible, then such portions shall be deemed to have been wholly excluded with the same force and effect as if it had never been included herein.

 

9.     Employee and his or her representatives, attorneys, and agents will not make any public or private statement with respect to the Company (including, as to Employee, any statement with respect to the directors, officers, employees, representatives, attorneys, and agents of the Company) that is derogatory, disparaging or may tend to injure the Company or such person in its or their business, public or private affairs. The foregoing obligations do not apply to information required to be disclosed or requested by any governmental agency, court or stock exchange, or any law, rule or regulation. Any public disclosure related to this Agreement as required by any law, rule or regulation will be negotiated by the Parties in advance, except that the Company has the final, sole discretion as to the content of any such announcement.

 

10.     This Agreement is governed by and construed and enforced, in all respects, in accordance with the laws of the State of California without regard to conflict of law principles unless preempted by federal law, in which case federal law governs.

 

11.     Review and Revocation. Employee acknowledges and agrees that he or she has 45 days from the date he or she receives this Agreement to consider the terms of and to sign this Agreement. Employee may, at Employee’s sole and absolute discretion, sign this Agreement prior to the expiration of the above review period. In addition, information is available to Employee as required by the Older Workers Benefit Protection Act.

 

-3-

 

 

12.     Employee may revoke this Agreement for a period of up to 7 days after Employee signs it (not counting the day it was signed) and the Agreement shall not become effective or enforceable until the 7-day revocation period has expired. To revoke this Agreement, Employee must give written notice stating that Employee wishes to revoke the Agreement to the Company’s Vice President, Global HR. Any notice stating that Employee wishes to revoke this Agreement must emailed (with a reply confirmation from the Company’s Vice President, Global HR), hand-delivered, or mailed (with confirmation of delivery) to the Company, as set forth in this paragraph, in sufficient time to be received by the Company on or before the expiration of the 7-day revocation period.

 

AGREED AND ACCEPTED, on this ____ day of ____________, 20__.

 

	
			 

				
			 

				
			 

			
	
			 

				
			 

				
			 

				
			 

			
	
			 

				
			 

				
			 

				
			 

			
	
			 

				
			Printed Name:

				
			David H. Mowry 

				
			 

			
	
			 

				
			 

				
			 

				
			 

			
	
			 

				
			 

				
			 

				
			 

			

 

-4-Exhibit
10.1

 

EQUITY FINANCING AGREEMENT

 

This Equity
Financing Transaction Agreement (this “Agreement”), dated as of July 5, 2019 (the “Execution Date”), is
entered into by and between Ozop Surgical Corp., a Nevada corporation (the “Company”) and GHS Investments, LLC, a Nevada
limited liability company, (the “Investor”). The Company and the Investor may be referred to herein collectively as
the “Parties” and separately as a “Party.”

RECITALS:

WHEREAS,
the Parties desire that, upon the terms and subject to the conditions contained herein, the Investor shall invest up to seven million
Dollars ($7,000,000) (the “Commitment Amount”), from time to time as set forth herein, and subject to the terms and
conditions herein, including the effectiveness of registration of the underlying shares, to purchase shares of the Company’s
common stock par value $0.001 per share (the “Common Stock”);

WHEREAS,
such investments will be made in reliance upon the exemption from securities registration afforded by Rule 506(b) of Regulation
D promulgated under the Securities Act of 1933, as amended (the “1933 Act”) and upon such other exemptions from the
registration requirements of the 1933 Act as may be available with respect to any or all of the investments in Common Stock to
be made hereunder; and

WHEREAS,
contemporaneously with the execution and delivery of this Agreement, the Parties are executing and delivering a Registration Rights
Agreement substantially in the form attached hereto as Exhibit A (the “Registration Rights Agreement”) pursuant to
which the Company has agreed to provide certain registration rights under the 1933 Act, and the rules and regulations promulgated
thereunder, and applicable state securities laws;

NOW THEREFORE,
in consideration of the foregoing recitals, which shall be considered an integral part of this Agreement, the covenants and agreements
set forth hereafter, and other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the
Company and the Investor hereby agree as follows:

Article I.
DEFINITIONS AND INTERPRETATION

Section 1.01
Definitions. For all purposes of and under this Agreement, the following terms shall have the respective meanings
below, and such meanings shall be equally applicable to the singular and plural forms of such defined terms.

		(a)	“1933 Act” shall have the meaning set forth in the recitals.

		(b)	“1934 Act” shall mean the Securities Exchange Act of 1934, as amended, or any similar
federal statute, and the rules and regulations of the SEC thereunder, all as the same will then be in effect.

		(c)	“Affiliate” shall have the meaning set forth in Section 5.07.

		(d)	“Agreement” shall have the meaning set forth in the preamble.

		(e)	“Articles of Incorporation” shall have the meaning set forth in Section 4.03(b).

		(f)	“By-laws” shall have the meaning set forth in Section 4.03(b).

		(g)	“Closing Date” shall have the meaning set forth in Section 2.04(a).

		(h)	“Closing” shall have the meaning set forth in Section 2.04(a).

		(i)	“Commitment Note” shall have the meaning set forth in Section 2.07.

		(j)	“Common Stock” shall have the meaning set forth in the recitals.

		(k)	“Control” or “Controls” shall have the meaning set forth in Section 5.07.

		(l)	“Effective Date” shall mean the date the SEC declares effective under the 1933 Act
the Registration Statement covering the Securities.

		(m)	“Environmental Laws” shall have the meaning set forth in Section 4.13.

		(n)	“Equity Financing Transactions” means all of the transactions contemplated herein and
in the other Transaction Documents.

		(o)	“Execution Date” shall have the meaning set forth in the preamble.

		(p)	“Governmental Authority” means any federal, state, provincial, local or foreign
government or political subdivision thereof, or any agency or instrumentality of such government or political subdivision, or any
self-regulated organization or other non-governmental regulatory authority or quasi-governmental authority (to the extent that
the rules, regulations or orders of such organization or authority have the force of Law), or any arbitrator, court or tribunal
of competent jurisdiction.

		(q)	“Indemnified Liabilities” shall have the meaning set forth in Section 8.01.

		(r)	“Indemnitees” shall have the meaning set forth in Section 8.01.

		(s)	“Indemnitor” shall have the meaning set forth in Section 8.01.

		(t)	“Ineffective Period” shall mean any period of time that the Registration Statement
or any supplemental registration statement becomes ineffective or unavailable for use for the sale or resale, as applicable, of
any or all of the Registrable Securities (as defined in the Registration Rights Agreement) for any reason (or in the event the
prospectus under either of the above is not current and deliverable) during any time period required under the Registration Rights
Agreement.

		(u)	“Investor” shall have the meaning set forth in the preamble.

		(v)	“Law” means any domestic or foreign, federal, state, provincial, municipality or local
law, statute, ordinance, code, rule, or regulation.

		(w)	“Market Price” shall mean the lowest closing price of the
Common Stock on the Principal Market during the Pricing Period.

		(x)	“Material Adverse Effect” shall have the meaning set forth in Section 4.01.

		(y)	“Maximum Common Stock Issuance” shall have the meaning set forth in Section 2.05.

		(z)	“Open Period” shall mean the period beginning on and including the Trading Day immediately
following the satisfaction of the condition set forth in Section 6.02(f) and ending on the termination of the Agreement in accordance
with Article VII.

		(aa)	“Person” means an individual, corporation, partnership, joint venture, limited
liability company, governmental authority, unincorporated organization, trust, association or other entity

		(bb)	“Pricing Period” shall mean ten (10) consecutive trading days preceding the dispatch
by the Company of the applicable Put Notice.

		(cc)	“Principal Market” shall mean the New York Stock Exchange, the NYSE Amex, the Nasdaq
Capital Market, the Nasdaq Global Market, the Nasdaq Global Select Market or the OTC Markets, whichever is the principal market
on which the Common Stock is listed.

		(dd)	“Prospectus” shall mean the prospectus, preliminary prospectus and supplemental prospectus
used in connection with the Registration Statement.

		(ee)	“Purchase Price” shall mean, as to each Share, eighty five percent (85%) of the Market
Price.

		(ff)	“Put Amount” shall mean the total Dollar amount requested by the Company pursuant to
an applicable Put.

		(gg)	“Put Notice Date” shall mean the Trading Day on which the Investor receives a Put Notice.

		(hh)	“Put Notice” shall mean a written notice sent to the Investor by the Company stating
the Put Amount in U.S. dollars that the Company intends to sell to the Investor pursuant to the terms of the Agreement and stating
the current number of Shares issued and outstanding on such date.

		(ii)	“Put” shall have the meaning set forth in Section 2.02.

		(jj)	“Registration Rights Agreement” shall have the meaning set forth in the recitals.

		(kk)	“Registration Statement” means the registration statement of the Company filed pursuant
to the Registration Rights Agreement and under the 1933 Act covering the Securities issuable hereunder.

		(ll)	“Related Party” shall have the meaning set forth in Section 5.07.

		(mm)	“Representative” means, with respect to any Person, any and all directors, officers,
employees, consultants, financial advisors, counsel, accountants and other agents of such Person.

		(nn)	“SEC Documents” shall have the meaning set forth in Section 4.06.

		(oo)	“SEC” shall mean the U.S. Securities and Exchange Commission.

		(pp)	“Securities” shall mean the shares of Common Stock issued pursuant to the terms of
this Agreement.

		(qq)	“Shares” shall mean the shares of the Common Stock.

		(rr)	“Subsidiaries” shall have the meaning set forth in Section 4.01.

		(ss)	“Trading Day” shall mean any day on which the Principal Market is open for trading.

		(tt)	“Transaction Costs” the Company shall bear the costs of the Registration Statement.
An amount equaling five percent (5%) of the relevant Put shall be issued to the Investor on each Closing Date to offset transaction
costs.

		(uu)	“Transaction Documents” shall mean this Agreement and the Registration Rights Agreement
and the Commitment Note between the Company and the Investor as of the date herewith.

Section 1.02
Interpretation. Unless the express context otherwise requires (i) the words “hereof,” “herein,”
and “hereunder” and words of similar import, when used in this Agreement, shall refer to this Agreement as a whole
and not to any particular provision of this Agreement; (ii) terms defined in the singular shall have a comparable meaning when
used in the plural, and vice versa; (iii) the terms “Dollars” and “$” mean United States Dollars; (iv)
references herein to a specific Article, Section, Subsection, Recital or Exhibit shall refer, respectively, to Articles,
Sections, Subsections, Recitals or Exhibits of this Agreement; (v) wherever the word “include,” “includes,”
or “including” is used in this Agreement, it shall be deemed to be followed by the words “without limitation”;
(vi) references herein to any gender shall include each other gender; (vii) references herein to any Person shall include such
Person’s heirs, executors, personal Representatives, administrators, successors and assigns; provided, however, that nothing
contained in this Section 1.02 is intended to authorize any assignment or transfer not otherwise permitted by this Agreement; (viii)
references herein to a Person in a particular capacity or capacities shall exclude such Person in any other capacity; (ix) references
herein to any contract or agreement (including this Agreement) mean such contract or agreement as amended, supplemented or modified
from time to time in accordance with the terms thereof; (x) with respect to the determination of any period of time, the word “from”
means “from and including” and the words “to” and “until” each means “to but excluding”;
(xi) references herein to any law or any license mean such law or license as amended, modified, codified, reenacted, supplemented
or superseded in whole or in part, and in effect from time to time; and (xii) references herein to any law shall be deemed also
to refer to all rules and regulations promulgated thereunder.

Article II.
PURCHASE AND SALE OF COMMON STOCK

Section 2.01
Purchase and Sale of Common Stock. Subject to the terms and conditions set forth herein, the Company shall issue
and sell to the Investor, and the Investor shall purchase from the Company, up to that number of Shares having an aggregate Purchase
Price of seven million Dollars ($7,000,000).

Section 2.02  Delivery
of Put Notices. Subject to the terms and conditions herein, and from time to time during the Open Period, the Company
may, in its sole discretion, deliver a Put Notice to the Investor which states the Put Amount which the Company
intends to sell to the Investor on a Closing Date (the “Put”). The Put Notice shall be in the form attached
hereto as Exhibit C and incorporated herein by reference. During the Open Period, the Company shall not be entitled to submit
a Put Notice until after the previous Closing (as defined below) has been completed and there will be a minimum of ten (10)
Trading Days between Put Notices. No Put will be made in an amount greater than four hundred
thousand Dollars ($400,000). The timing and amounts of each Put shall be at the discretion of the Company. The maximum
Dollar amount of each Put will not exceed two hundred percent (200%) of the average daily trading Dollar volume for the
Common Stock during the applicable Pricing Period.

Section 2.03 CONDITIONS
TO INVESTOR’S OBLIGATION TO PURCHASE SHARES. Notwithstanding anything to the contrary in this Agreement, the Company
shall not be entitled to deliver a Put Notice and the Investor shall not be obligated to purchase any Shares at a Closing unless
each of the following conditions are satisfied: 

	 	i.	a Registration Statement shall have been declared effective and shall remain effective and
available for the resale of all the Registrable Securities (as defined in the Registration Rights Agreement) at all times until
the Closing with respect to the subject Put Notice; 
	 	 	 
	 	ii.	at all times during the period beginning on the related Put Notice Date and ending on and
including the related Closing Date, the Common Stock shall have been listed or quoted for trading on the Principal Market and shall
not have been suspended from trading thereon for a period of two (2) consecutive Trading Days during the Open Period and the Company
shall not have been notified of any pending or threatened proceeding or other action to suspend the trading of the Common Stock;

	 	 	 
	 	iii.	the Company has complied with its obligations and is otherwise not in breach of or in default
under, this Agreement, the Registration Rights Agreement or any other agreement executed between the parties, which has not been
cured prior to delivery of the Investor’s Put Notice Date; 
	 	 	 
	 	iv.	no injunction shall have been issued and remain in force, or action commenced by a governmental
authority which has not been stayed or abandoned, prohibiting the purchase or the issuance of the Securities; and 
	 	 	 
		v.	the issuance of the Securities will not violate any requirements
of the Principal Market. 

If any of
the events described in clauses (i) through (v) above occurs during a Pricing Period, then the Investor shall have no obligation
to purchase the Put Amount of Common Stock set forth in the applicable Put Notice.

MECHANICS OF PURCHASE OF SHARES BY INVESTOR. 

Section 2.04
Mechanics of Purchase of Shares by Investor.

		(a)	Subject to the satisfaction of the conditions set forth in Article VI Sections
2.5, 7 and 8 of this Agreement, at the end
of the Pricing Period, the Purchase Price shall be established and an amount of shares equaling one hundred percent (100%) of the
Purchase Price, together with the Transaction Cost Shares, shall be delivered for a particular Put.

The Closing of a Put (the “Closing”) shall occur on the Trading Day after the receipt and approval for trading of a
Put Notice by Investor's broker of the Put Shares (the “Closing Date”).

		(b)	On the Closing Date:

		(i)	The Company shall cause the Transfer Agent to electronically transmit, prior to the applicable
Closing Date, the applicable Put Shares together with the Transaction Cost Shares, to the Investor by crediting the account of
the Investor’s broker with DTC through its Deposit Withdrawal Agent Commission system; and

		(ii)	The Investor shall deliver to the Company the Put Amount costs by wire transfer of immediately
available funds to an account designated by the Company if the aforementioned receipt and approval are confirmed before 9:30 AM
EST or on the following Trading day if receipt and approval by the Investor's Broker is made after 9:30 AM EST("Closing Date"
or "Closing").

		(c)	In addition, on or prior to such Closing Date, each of the Company and Investor shall deliver to
each other all documents, instruments and writings required to be delivered or reasonably requested by either of them pursuant
to this Agreement in order to implement and effect the Equity Financing Transactions.

Section 2.05
Overall Limit on Common Stock Issuable. Notwithstanding anything contained herein to the contrary, if during the
Open Period the Company becomes listed on an exchange which limits the number of shares of Common Stock that may be issued without
shareholder approval, then the number of Shares issuable by the Company and purchasable by the Investor, shall not exceed that
number of the shares of Common Stock that may be issuable without shareholder approval (the “Maximum Common Stock Issuance”).
If such issuance of shares of Common Stock could cause a delisting on the Principal Market, then the issuance of all shares of
Common Stock in excess of the Maximum Common Stock Issuance shall first be approved by the Company’s shareholders in accordance
with applicable law and the By-laws and the Articles of Incorporation of the Company. The Parties understand and agree that the
Company’s failure to seek or obtain such shareholder approval shall in no way adversely affect the validity and due authorization
of the issuance and sale of Securities or the Investor’s obligation in accordance with the terms and conditions hereof to
purchase a number of Shares in the aggregate up to the Maximum Common Stock Issuance, or in excess of such amount in the event
that the shareholder approval is obtained.

Section 2.06
Limitation on Amount of Ownership. Notwithstanding anything to the contrary in this Agreement, in no event shall
the Investor be entitled or required to purchase that number of Shares, which when added to the sum of the number of shares of
Common Stock beneficially owned (as such term is defined under Section 13(d) and Rule 13d-3 of the 1934 Act), by the Investor,
would exceed 4.99% of the number of shares of Common Stock outstanding as of the applicable Closing Date, as determined in accordance
with Rule 13d-1(j) of the 1934 Act.

Section 2.07
Commitment Note. The Company shall issue to the Investor, a thirty thousand dollar ($30,000) promissory note to
offset transaction costs (“Commitment Note”). The Commitment Note shall be deemed earned upon the execution of this
Agreement.

Article III.    
INVESTOR’S REPRESENTATIONS, WARRANTIES AND COVENANTS

The Investor
represents and warrants to the Company, and covenants, that to the best of the Investor’s knowledge:

Section
3.01  Sophisticated
Investor. The Investor has, by reason of its business and financial experience, such knowledge, sophistication and
experience in financial and business matters and in making investment decisions of this type that it is capable of (I) evaluating
the merits and risks of an investment in the Securities and making an informed investment decision; (II) protecting its own interest;
and (III) bearing the economic risk of such investment for an indefinite period of time. Investor has received all documents,
records, books and other information pertaining to its investment that has been requested by Investor. Investor was afforded (i)
the opportunity to ask such questions as Investor deemed necessary of, and to receive answers from, Representatives of the Company
concerning the merits and risks of acquiring the Securities; (ii) the right of access to information about the Company and its
financial condition, results of operations, business, assets, properties, management and prospects sufficient to enable Investor
to evaluate the Securities; and (iii) the opportunity to obtain such additional information that the Company possesses or can acquire
without unreasonable effort or expense that is necessary to make an informed investment decision with respect to acquiring the
Securities.

Section
3.02  Authorization;
Enforcement. This Agreement and the other Transaction Documents have each been duly and validly
authorized, executed and delivered on behalf of the Investor and each is a valid and binding agreement of the Investor enforceable
against the Investor in accordance with its respective terms, subject as to enforceability to general principles of equity and
to applicable bankruptcy, insolvency, reorganization, moratorium, liquidation and other similar laws relating to, or affecting
generally, the enforcement of applicable creditors’ rights and remedies. 

Section 3.03
1934 Act. During the term of this Agreement, the Investor will comply with the provisions of the 1934 Act, and the
rules promulgated thereunder, with respect to transactions involving the Common Stock.

Section 3.04
Accredited Investor. Investor is an “Accredited Investor” as that term is defined in Rule 501(a) of Regulation
D of the 1933 Act.

Section
3.05  No Conflicts.
The execution, delivery and performance of the Transaction Documents by the Investor and the
consummation by the Investor of the Equity Financing Transactions will not result in a violation of limited liability company operating
agreement or other organizational documents of the Investor.

Section
3.06  No
Consent. No consent, approval, authorization or order of, or any filing or declaration with any Governmental Authority or any
other Person is required for the consummation by Investor of the Equity Financing Transactions.

Section 3.07  Opportunity
to Discuss. The Investor has received all materials relating to the Company’s business, finance and operations
which it has requested. The Investor has had an opportunity to discuss the business, management and financial affairs of the
Company with the Company’s management.

Section 3.08
Investment Purpose. The Investor is purchasing the Securities for its own account for investment purposes and not
with a view towards distribution and agrees to resell or otherwise dispose of the Securities solely in accordance with the registration
provisions of the 1933 Act (or pursuant to an exemption from such registration provisions).

Section
3.09  Potential
Loss of Investment. Investor is aware and acknowledges that (a) the Company has a limited operating history, and there
is a high degree of risk that the Company will be unable to execute its business strategy successfully; (b) the Securities involve
a substantial degree of risk of loss of its entire investment and that there is no government or other insurance covering the Securities;
(c) Investor, in purchasing the Securities is relying solely upon the advice of Investor’s advisors (including as to legal,
financial and tax matters); and (d) because there are substantial restrictions on the transferability of the Securities it may
not be possible for Investor to liquidate its investment readily. Investor further acknowledges that it has been advised to consult
its own legal advisors with respect to the execution, delivery and performance by it of this Agreement and the other Transaction
Documents, the Equity Financing Transactions, including trading in the Securities, and with respect
to the hold periods imposed by applicable securities Laws, and acknowledges that no representation has been made by the Company
respecting the applicable hold periods imposed by applicable securities Laws or other resale restrictions applicable to such securities
which restrict the ability of Investor to resell such Securities, that Investor is solely responsible to find out what these resale
restrictions are, that Investor is solely responsible (and the Company is not in any way responsible) for compliance with applicable
resale restrictions.

Section
3.10  No
Guarantees. It has never been represented, guaranteed or warranted to Investor by the Company, or any of its Representatives,
or any other Person, expressly or by implication, that:

		(a)	any gain will be realized by Investor from Investor’s investment in the Securities or the
Securities;

		(b)	there will be any approximate or exact length of time that Investor will be required to remain
as a holder of the Securities;

		(c)	the past performance or experience on the part of the Company, any of its Affiliates (as defined
below), its predecessors or any other Person, will in any way indicate any future results of the Company;

		(d)	any Person will resell or repurchase any of the any of the Securities; or

		(e)	any Person will refund all or any part of the aggregate offer price for the Securities.

Section 3.11  Source
of Funding; Identity. Investor acknowledges, understands, covenants and agrees that the source of payment for
Investor’s purchase of Securities is and will be from Investor’s own account and that the Company may
require additional information regarding (a) the source(s) of the payment for the Securities, and (b) the identity of
Investor, in order to facilitate the Company’s compliance with the U.S. Government’s anti-money laundering
policies and procedures as set out in the USA PATRIOT ACT and elsewhere. Investor acknowledges, understands, covenants and
agrees that the funds representing the Investor’s payment for the Securities which will be advanced by the Investor
hereunder will not represent proceeds of crime for the purposes of any money laundering or terrorist financing Laws and the
Investor acknowledges that the Company may in the future be required to disclose Investor’s name and other information
relating to this Agreement and Investor’s acquisitions of the Securities hereunder, on a confidential basis, pursuant
to such Laws.

Section 3.12
No Governmental Review. Investor understands that no United States federal or state agency or any other Governmental
Authority has passed on or made recommendations or endorsement of the Securities or the suitability of the investment in the Securities
nor have such authorities passed upon or endorsed, or will pass upon of endorse, the merits of the transactions set forth herein.

Section 3.13
No Registration as a Dealer. The Investor is not required to be registered as a “dealer” under the 1934
Act, either as a result of its execution and performance of its obligations under this Agreement or otherwise.

Section
3.14  No
Public Market. Investor understands that the Company has made no assurances that a public market will ever exist for the Securities.

Section
3.15  Legends.
Unless and until registered pursuant to the Registration Statement, any legend required by the securities Laws of any state or
province to the extent such Laws are applicable to the Securities represented by the certificate or other evidence so legended
shall be included on any certificates representing or other applicable evidence of the Securities. The Investor also understands
that the Company Securities may bear the following or a substantially similar legend:

THE SECURITIES
REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, NOR REGISTERED OR QUALIFIED
UNDER ANY STATE SECURITIES LAWS. SUCH SECURITIES MAY NOT BE OFFERED FOR SALE, SOLD, DELIVERED AFTER SALE, TRANSFERRED, PLEDGED,
OR HYPOTHECATED UNLESS QUALIFIED AND REGISTERED UNDER APPLICABLE STATE AND FEDERAL SECURITIES LAWS OR UNLESS, IN THE OPINION OF
COUNSEL REASONABLY SATISFACTORY TO THE COMPANY, SUCH QUALIFICATION AND REGISTRATION ARE NOT REQUIRED. ANY TRANSFER OF THE SECURITIES
REPRESENTED BY THIS CERTIFICATE IS FURTHER SUBJECT TO OTHER RESTRICTIONS, TERMS AND CONDITIONS WHICH ARE SET FORTH HEREIN.

Section 3.16
Good Standing. The Investor is a limited liability company, duly organized, validly existing and in good standing
in the State of Nevada.

Article IV.    
REPRESENTATIONS AND WARRANTIES OF THE COMPANY

Except
as set forth in the Schedules attached hereto, or as disclosed in the Company’s SEC Documents, the Company represents and
warrants to the Investor that:

Section 4.01  Organization
and Qualification. The Company is a corporation duly organized and validly existing in good standing under the laws of
the State of Nevada, and has the requisite corporate power and authorization to own its properties and to carry on its
business as now being conducted. Both the Company and the companies it owns or controls (“Subsidiaries”) are duly
qualified to do business and are in good standing in every jurisdiction in which its ownership of property or the nature of
the business conducted by it makes such qualification necessary, except to the extent that the failure to be so qualified
or be in good standing would not have a Material Adverse Effect. As used in this Agreement, “Material Adverse
Effect” means a change, event, circumstance, effect or state of facts that has had or is reasonably likely to have, or
could reasonably be expected to result in, individually or in the aggregate, a material adverse
effect on the business, properties, assets, operations, results of operations or financial condition of the Company and its
Subsidiaries, if any, taken as a whole, or on the authority or ability of the Company to perform its obligations under the Transaction
Documents.

Section 4.02
Authorization; Enforceability.

		(a)	The Company has the requisite corporate power and authority to enter into and perform its obligations
under the Transaction Documents, and to issue the Securities in accordance with the terms hereof and thereof, provided that the
Parties acknowledge and agree that the Company does not currently have a sufficient number of authorized and unissued shares of
Common Stock pursuant to the Articles of Incorporation to issue all of the Shares at the current Put Price.

		(b)	The execution and delivery of the Transaction Documents by the Company and the consummation by
it of the Equity Financing Transactions, including without limitation the issuance of the Securities pursuant to this Agreement,
have been duly and validly authorized by the Company’s Board of Directors and no further consent or authorization is required
by the Company, its Board of Directors, or its shareholders.

		(c)	The Transaction Documents have been duly and validly executed and delivered by the Company.

		(d)	The Transaction Documents constitute the valid and binding obligations of the Company enforceable
against the Company in accordance with their terms, except as such enforceability may be limited by general principles of equity
or applicable bankruptcy, insolvency, reorganization, moratorium, liquidation or similar laws relating to, or affecting generally,
the enforcement of creditors’ rights and remedies. 

Section
4.03  Capitalization.

		(a)	As of the Execution Date, the authorized capital stock of the Company consists of 290,000,000 shares
of the Common Stock, par value $0.001 per share, of which as of the Execution Date 35,367,189 shares are issued and outstanding.
All of such outstanding shares have been, or upon issuance will be, validly issued and are fully paid and nonassessable. In addition:

		(i)	no shares of the Company’s capital stock are subject to preemptive rights or any other similar
rights or any liens or encumbrances suffered or permitted by the Company;

		(ii)	there are no outstanding debt securities;

		(iii)	there are no outstanding shares of capital stock, options, warrants, scrip, rights to subscribe
to, calls or commitments of any character whatsoever relating to, or securities or rights convertible into, any shares of capital
stock of the Company or any of its Subsidiaries, or contracts, commitments, understandings or arrangements by which the Company
or any of its Subsidiaries is or may become bound to issue additional shares of capital stock of the Company or any of its Subsidiaries
or options, warrants, scrip, rights to subscribe to, calls or commitments of any character whatsoever relating to, or securities
or rights convertible into, any shares of capital stock of the Company or any of its Subsidiaries;

		(iv)	there are no agreements or arrangements under which the Company or any of its Subsidiaries is obligated
to register the sale of any of their securities under the 1933 Act (except the Registration Rights Agreement);

		(v)	there are no outstanding securities of the Company or any of its Subsidiaries which contain any
redemption or similar provisions, and there are no contracts, commitments, understandings or arrangements by which the Company
or any of its Subsidiaries is or may become bound to redeem a security of the Company or any of its Subsidiaries;

		(vi)	there are no securities or instruments containing anti-dilution or similar provisions that will
be triggered by the issuance of the Securities as described in this Agreement;

		(vii)	the Company does not have any stock appreciation rights or “phantom stock” plans or
agreements or any similar plan or agreement; and

		(viii)	there is no dispute as to the classification of any shares of the Company’s capital stock.

		(b)	True and correct copies of the Company’s Articles of Incorporation, as in effect on the Execution
Date (the “Articles of Incorporation”), and the Company’s By-laws, as in effect on the Execution Date (the “By-laws”),
and the terms of all securities convertible into or exercisable for Common Stock and the material rights of the holders thereof
in respect thereto, are as set forth in the SEC Documents.

Section 4.04
Issuance of Shares. At the time of the filing of the Registration Statement, the Company will have reserved the amount
of Shares to be included in the Registration Statement for issuance pursuant to the Transaction Documents, which Shares will have
been duly authorized. Upon issuance in accordance with this Agreement, the Securities will be validly issued, fully paid for and
non-assessable and free from all taxes, liens and charges with respect to the issuance thereof.

Section 4.05  No
Conflicts. The execution, delivery and performance of the Transaction Documents by the Company and the consummation by
the Company of the Equity Financing Transactions will not (i) result in a violation of the
Articles of Incorporation, any Certificate of Designations, Preferences and Rights of any outstanding series of preferred
stock of the Company or the By-laws; or (ii) conflict with, or constitute a material default (or an event which with notice
or lapse of time or both would become a material default) under, or give to others any rights of termination,
amendment, acceleration or cancellation of, any material agreement, contract, indenture mortgage, indebtedness or instrument
to which the Company or any of its Subsidiaries is a party, or to the Company’s knowledge result in a violation of any
law, rule, regulation, order, judgment or decree (including United States federal and state securities laws and regulations
and the rules and regulations of the Principal Market or principal securities exchange or trading market on which the Common
Stock is traded or listed) applicable to the Company or any of its Subsidiaries or by which any property or asset of the
Company or any of its Subsidiaries is bound or affected, other than as will not have a Material Adverse Effect. Neither the
Company nor its Subsidiaries is in violation of any term of, or in default under, the Articles of Incorporation, any
Certificate of Designations, Preferences and Rights of any outstanding series of preferred stock of the Company or the
By-laws or their organizational charter or by-laws, respectively, or any contract, agreement, mortgage, indebtedness,
indenture, instrument, judgment, decree or order or any statute, rule or regulation applicable to the Company or its
Subsidiaries, except for possible conflicts, defaults, terminations, amendments, accelerations, cancellations and violations
that would not individually or in the aggregate have or constitute a Material Adverse Effect. The business of the Company and
its Subsidiaries is not being conducted, and shall not be conducted, in violation of any law, statute, ordinance, rule, order
or regulation of any governmental authority or agency, regulatory or self-regulatory agency, or court, except for possible
violations the sanctions for which either individually or in the aggregate would not have a Material Adverse Effect. Except
as specifically contemplated by this Agreement and as required under the 1933 Act or any securities laws of any states, to
the Company’s knowledge, the Company is not required to obtain any consent, authorization, permit or order of, or make
any filing or registration (except the filing of the Registration Statement as outlined in the Registration Rights Agreement
between the Parties) with, any court, governmental authority or agency, regulatory or self-regulatory agency or other third
party in order for it to execute, deliver or perform any of its obligations under, or contemplated by, the Transaction
Documents in accordance with the terms hereof or thereof. All consents, authorizations, permits, orders, filings and
registrations which the Company is required to obtain pursuant to the preceding sentence have been obtained or effected on or
prior to the Execution Date and are in full force and effect as of the Execution Date. The Company is not, and will not be,
in violation of the listing requirements of the Principal Market as in effect on the Execution Date and on each of the
Closing Dates and is not aware of any facts which would reasonably lead to delisting of the Common Stock by the Principal
Market in the foreseeable future.

Section 4.06  SEC
Documents; Financial Statements. As of the Execution Date, the Company has filed all reports, schedules, forms,
statements and other documents required to be filed by it with the SEC pursuant to the reporting requirements of the 1934 Act
(all of the foregoing filed prior to the Execution Date and all exhibits included therein and financial statements and
schedules thereto and documents incorporated by reference therein, and amendments thereto, being hereinafter referred to as
the “SEC Documents”). The Company has delivered to the Investor or its representatives, or they have had
access through EDGAR to, true and complete copies of the SEC Documents. As of their respective filing dates, the SEC
Documents complied in all material respects with the requirements of the 1934 Act and the rules and regulations of the SEC
promulgated thereunder applicable to the SEC Documents, and none of the SEC Documents, at the time they were filed with the
SEC or the time they were amended, if amended, contained any untrue statement of a material fact or omitted to state a
material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under
which they were made, not misleading. As of their respective dates, the financial statements of the Company included in the
SEC Documents complied as to form in all material respects with applicable accounting requirements and the published rules
and regulations of the SEC with respect thereto. Such financial statements have been prepared in accordance with
generally accepted accounting principles, by a firm that is a member of the Public Companies Accounting Oversight Board
(“PCAOB”) consistently applied, during the periods involved (except (i) as may be otherwise indicated in such
financial statements or the notes thereto, or (ii) in the case of unaudited interim statements, to the extent they may
exclude footnotes or may be condensed or summary statements) and fairly present in all material respects the financial
position of the Company as of the dates thereof and the results of its operations and cash flows for the periods then ended
(subject, in the case of unaudited statements, to normal year-end audit adjustments). No other written information provided
by or on behalf of the Company to the Investor which is not included in the SEC Documents, including, without
limitation, information referred to in Section 4.03, contains any untrue statement of a material
fact or omits to state any material fact necessary to make the statements therein, in the light of the circumstance under
which they are or were made, not misleading. Neither the Company nor any of its Subsidiaries or any of their officers,
directors, employees or agents have provided the Investor with any material, nonpublic information which was not publicly
disclosed prior to the Execution Date and any material, nonpublic information provided to the Investor by the Company or its
Subsidiaries or any of their officers, directors, employees or agents prior to any Closing Date shall be publicly disclosed
by the Company prior to such Closing Date.

Section 4.07
Absence of Certain Changes. The Company does not intend to change the business operations
of the Company in any material way. The Company has not taken any steps, and does not currently expect to take any steps, to seek
protection pursuant to any bankruptcy law nor does the Company or its Subsidiaries have any knowledge or reason to believe that
its creditors intend to initiate involuntary bankruptcy proceedings.

Section 4.08
Absence of Litigation and/or Regulatory Proceedings. There is no action, suit, proceeding,
inquiry or investigation before or by any court, public board, government agency, self-regulatory organization or body pending
or, to the knowledge of the executive officers of Company or any of its Subsidiaries, threatened against or affecting the Company,
the Common Stock or any of the Company’s Subsidiaries or any of the Company’s or the Company’s Subsidiaries’
officers or directors in their capacities as such, in which an adverse decision could have a Material Adverse Effect.

Section 4.09
Acknowledgement Regarding Investor’s Purchase of Securities. The Company acknowledges
and agrees that the Investor is acting solely in the capacity of an arm’s length Investor with respect to the Transaction
Documents and the Equity Financing Transactions. The Company further acknowledges that the Investor is not acting as a financial
advisor or fiduciary of the Company (or in any similar capacity) with respect to the Transaction Documents and the Equity Financing
Transactions and any advice given by the Investor or any of its respective representatives or agents in connection with the Transaction
Documents and the Equity Financing Transactions is merely incidental to the Investor’s purchase of the Securities, and is
not being relied on by the Company. The Company further represents to the Investor that the Company’s decision to enter into
the Transaction Documents has been based solely on the independent evaluation by the Company and its representatives. 

Section 4.10  No
Undisclosed Event.. As of the Execution Date, no event, liability, development or circumstance has occurred or exists, or
to the Company’s knowledge is contemplated to occur, with respect to the Company or its Subsidiaries or their
respective business, properties, assets, prospects, operations or financial condition, that would be required to be disclosed
by the Company under applicable securities laws on a registration statement filed with the SEC relating to an issuance
and sale by the Company of its Common Stock and which has not been publicly announced.

Section 4.11
Employee Relations. Neither the Company nor any of its Subsidiaries is involved in any
union labor dispute nor, to the knowledge of the Company or any of its Subsidiaries, is any such dispute threatened. Neither the
Company nor any of its Subsidiaries is a party to a collective bargaining agreement, and the Company and its Subsidiaries believe
that relations with their employees are good. No executive officer (as defined in Rule 501(f) of the 1933 Act) has notified the
Company that such officer intends to leave the Company’s employ or otherwise terminate such officer’s employment with
the Company. 

Section 4.12
Intellectual Property Rights. The Company and its Subsidiaries own or possess adequate
rights or licenses to use all trademarks, trade names, service marks, service mark registrations, service names, patents, patent
rights, copyrights, inventions, licenses, approvals, governmental authorizations, trade secrets and rights necessary to conduct
their respective businesses as now conducted, other than would not be expected to result in a Material Adverse Effect. None of
the Company’s trademarks, trade names, service marks, service mark registrations, service names, patents, patent rights,
copyrights, inventions, licenses, approvals, government authorizations, trade secrets or other intellectual property rights necessary
to conduct its business as now or as proposed to be conducted have expired or terminated, or are expected to expire or terminate
within two (2) years from the date of this Agreement. The Company and its Subsidiaries do not have any knowledge of any infringement
by the Company or its Subsidiaries of trademark, trade name rights, patents, patent rights, copyrights, inventions, licenses, service
names, service marks, service mark registrations, trade secret or other similar rights of others, or of any such development of
similar or identical trade secrets or technical information by others and there is no claim, action or proceeding being made or
brought against, or to the Company’s knowledge, being threatened against, the Company or its Subsidiaries regarding trademark,
trade name, patents, patent rights, invention, copyright, license, service names, service marks, service mark registrations, trade
secret or other infringement; and the Company and its Subsidiaries are unaware of any facts or circumstances which might give rise
to any of the foregoing. The Company and its Subsidiaries have taken commercially reasonable security measures to protect the secrecy,
confidentiality and value of all of their intellectual properties. 

Section 4.13
Environmental Laws. The Company and its Subsidiaries (i) are, to the knowledge of the
management and directors of the Company and its Subsidiaries, in compliance in all material respects with any and all applicable
foreign, federal, state and local laws and regulations relating to the protection of human health and safety, the environment or
hazardous or toxic substances or wastes, pollutants or contaminants (“Environmental Laws”); (ii) have, to the knowledge
of the management and directors of the Company, received all permits, licenses or other approvals required of them under applicable
Environmental Laws to conduct their respective businesses; and (iii) are in compliance, to the knowledge of the management and
directors of the Company, in all material respects with all terms and conditions of any such permit, license or approval where,
in each of the three (3) foregoing cases, the failure to so comply would have, individually or in the aggregate, a Material Adverse
Effect.

Section 4.14  Title.
The Company and its Subsidiaries have good and marketable title to all personal property owned by them which is material to
the business of the Company and its Subsidiaries, in each case free and clear of all liens, encumbrances and defects except
such as are described in the SEC Documents or such as do not materially affect the value of
such property and do not materially interfere with the use made and proposed to be made of such property by the Company or
any of its Subsidiaries. Any real property and facilities held under lease by the Company or any of its Subsidiaries are held
by them under valid, subsisting and enforceable (except as such enforceability may be limited by general principles of
equity or applicable bankruptcy, insolvency, reorganization, moratorium, liquidation or similar laws relating to, or
affecting generally, the enforcement of creditors’ rights and remedies) leases with such
exceptions as are not material and do not interfere with the use made and proposed to be made of such property and
buildings by the Company and its Subsidiaries. 

Section 4.15
Insurance. Each of the Company’s Subsidiaries are insured by insurers of recognized
financial responsibility against such losses and risks and in such amounts as management of the Company reasonably believes, if
any, to be prudent and customary in the businesses in which the Company and its Subsidiaries are engaged. Neither the Company nor
any of its Subsidiaries has been refused any insurance coverage sought or applied for and neither the Company nor its Subsidiaries
has any reason to believe that it will not be able to renew its existing insurance coverage as and when such coverage expires or
to obtain similar coverage from similar insurers as may be necessary to continue its business at a cost that would not have a Material
Adverse Effect. 

Section 4.16
Regulatory Permits. The Company and its Subsidiaries have in full force and effect all
certificates, approvals, authorizations and permits from the appropriate federal, state, local or foreign regulatory authorities
and comparable foreign regulatory agencies, necessary to own, lease or operate their respective properties and assets and conduct
their respective businesses, and neither the Company nor any such Subsidiary has received any notice of proceedings relating to
the revocation or modification of any such certificate, approval, authorization or permit, except for such certificates, approvals,
authorizations or permits which if not obtained, or such revocations or modifications which, would not have a Material Adverse
Effect. 

Section 4.17
Internal Accounting Controls. Other than as set forth in the last sentence of this Section
4.17, the Company and each of its Subsidiaries maintain a system of internal accounting controls sufficient to provide reasonable
assurance that (i) transactions are executed in accordance with management’s general or specific authorizations; (ii) transactions
are recorded as necessary to permit preparation of financial statements in conformity with generally accepted accounting principles
by a firm with membership to the PCAOB and to maintain asset accountability; (iii) access to assets is permitted only in accordance
with management’s general or specific authorization; and (iv) the recorded accountability for assets is compared with the
existing assets at reasonable intervals and appropriate action is taken with respect to any differences. The Company’s management
has determined that the Company’s internal accounting controls were not effective as of the date of this Agreement as further
described in the SEC Documents.

Section 4.18  Tax
Status. The Company and each of its Subsidiaries has made or filed all United States federal and state income and all
other tax returns, reports and declarations required by any jurisdiction to which it is subject (unless and only to the
extent that the Company and each of its Subsidiaries has set aside on its books provisions reasonably adequate for the
payment of all unpaid and unreported taxes) and has paid all taxes and other governmental assessments and charges that are
material in amount, shown or determined to be due on such returns, reports and declarations, except those being contested in
good faith and has set aside on its books provision reasonably adequate for the payment of all taxes for periods
subsequent to the periods to which such returns, reports or declarations apply, other than those which would
reasonably be expected to result in a Material Adverse Effect. There are no unpaid taxes in any material amount claimed to be
due by the taxing authority of any jurisdiction, other than those which would reasonably be expected to result in a Material
Adverse Effect, and the officers of the Company know of no basis for any such claim.

Section 4.19
Certain Transactions. Except for arm’s length transactions pursuant to which the
Company makes payments in the ordinary course of business upon terms no less favorable than the Company could obtain from disinterested
third parties, none of the officers, directors, or employees of the Company is presently a party to any transaction with the Company
or any of its Subsidiaries (other than for services as employees, officers and directors), including any contract, agreement or
other arrangement providing for the furnishing of services to or by, providing for rental of real or personal property to or from,
or otherwise requiring payments to or from any officer, director or such employee or, to the knowledge of the Company, any corporation,
partnership, trust or other entity in which any officer, director, or any such employee has a substantial interest or is an officer,
director, trustee or partner, such that disclosure would be required in the SEC Documents.

Section 4.20
Dilutive Effect. The Company understands and acknowledges that the number of shares of
Common Stock issuable upon purchases pursuant to this Agreement will increase in certain circumstances including, but not necessarily
limited to, the circumstance wherein the trading price of the Common Stock declines during the period between the Effective Date
and the end of the Open Period. The Company’s executive officers and directors have studied and fully understand the nature
of the Equity Financing Transactions and recognize that they have a potential dilutive effect on the shareholders of the Company.
The Board of Directors of the Company has concluded, in its good faith business judgment, and with full understanding of the implications,
that such issuance is in the best interests of the Company. The Company specifically acknowledges that, subject to such limitations
as are expressly set forth in the Transaction Documents, its obligation to issue shares of Common Stock upon purchases pursuant
to this Agreement is absolute and unconditional regardless of the dilutive effect that such issuance may have on the ownership
interests of other shareholders of the Company.

Section 4.21
No General Solicitation. Neither the Company, nor any of its affiliates, nor any Person
acting on its behalf, has engaged in any form of general solicitation or general advertising (within the meaning of Regulation
D under the 1933 Act) in connection with the offer or sale of the Common Stock to be offered as set forth in this Agreement. 

Section 4.22
No Brokers, Finders or Financial Advisory Fees or Commissions. No brokers, finders or
financial advisory fees or commissions will be payable by the Company, its Subsidiaries or their respective Representatives, with
respect to the Equity Financing Transactions, as a result of any actions or agreements of the Company, its Subsidiaries or their
respective Representatives.

Section 4.23
Exclusivity. The Company shall not pursue a similar Equity Financing Transactions transaction with any other Party
unless and until good faith negotiations have terminated between the Investor and the Company or until such time as the Registration
Statement has been declared effective by the SEC.

Section 4.24  Acknowledgement
of Terms. The Company hereby represents and warrants to the Investor that: (i) it is voluntarily entering into this
Agreement of its own freewill, (ii) it is not entering this Agreement under economic duress, (iii) the terms of this
Agreement are reasonable and fair to the Company, and (iv) the Company has had independent legal counsel of its own
choosing review this Agreement, advise the Company with respect to this Agreement, and represent the Company in connection
with this Agreement.

Article V.
COVENANTS OF THE PARTIES

Section 5.01
Efforts. The Company shall use all commercially reasonable efforts to timely satisfy each of the conditions set forth
in Section 6.01 and Section 6.02.

Section 5.02
Reporting Status. Until one of the following occurs, the Company shall file all reports required to be filed with
the SEC pursuant to the 1934 Act, and the Company shall not terminate its status, or take an action or fail to take any action,
which would terminate its status as a reporting company under the 1934 Act: (i) This Agreement terminates pursuant to Article VII
and the Investor has the right to sell all of the Securities without restrictions pursuant to Rule 144 promulgated under the 1933
Act, or such other exemption, or (ii) the date on which the Investor has sold all the Securities and this Agreement has been terminated
pursuant to Article VII.

Section 5.03
Use of Proceeds. The Company will use the proceeds from the sale of the Shares (excluding amounts paid by the Company
for fees as set forth in the Transaction Documents) for general corporate and working capital purposes and acquisitions or assets,
businesses or operations or for other purposes that the Board of Directors, in good faith deem to be in the best interest of the
Company.

Section 5.04
Financial Information. During the Open Period, the Company agrees to make available to the Investor via EDGAR or
other electronic means the following documents and information on the forms set forth: (i) within five (5) Trading Days after the
filing thereof with the SEC, a copy of its Annual Reports on Form 10-K, its Quarterly Reports on Form 10-Q, any Current Reports
on Form 8-K and any Registration Statements or amendments filed pursuant to the 1933 Act; (ii) copies of any notices and other
information made available or given to the shareholders of the Company generally, contemporaneously with the making available or
giving thereof to the shareholders; and (iii) within two (2) calendar days of filing or delivery thereof, copies of all documents
filed with, and all correspondence sent to, the Principal Market, any securities exchange or market, or the Financial Industry
Regulatory Association, unless such information is material nonpublic information.

Section 5.05
Reservation of Shares. The Company shall take all action necessary to at all times have authorized, and reserved
the amount of Shares included in the Registration Statement for issuance pursuant to the Transaction
Documents. In the event that the Company determines that it does not have a sufficient number of authorized shares of Common
Stock to reserve and keep available for issuance as described in this Section 5.05, the Company shall use all commercially reasonable
efforts to increase the number of authorized shares of Common Stock by seeking shareholder approval for the authorization of such
additional shares.

Section 5.06  Listing.
The Company shall promptly secure and maintain the listing of all of the Registrable Securities (as defined in the
Registration Rights Agreement) on the Principal Market and each other national securities exchange and automated
quotation system, if any, upon which shares of Common Stock are then listed (subject to official notice of issuance) and
shall maintain, such listing of all Registrable Securities from time to time issuable under the terms of the Transaction
Documents. Neither the Company nor any of its Subsidiaries shall take any action which would be reasonably expected to result
in the delisting or suspension of the Common Stock on the Principal Market (excluding suspensions of not more than one (1)
Trading Day resulting from business announcements by the Company). The Company shall promptly provide to the Investor copies
of any notices it receives from the Principal Market regarding the continued eligibility of the Common Stock for listing on
such automated quotation system or securities exchange. The Company shall pay all fees and expenses in connection with
satisfying its obligations under this Section 5.06.

Section 5.07
Transactions with Affiliates. The Company shall not, and shall cause each of its Subsidiaries not to, enter into,
amend, modify or supplement, or permit any Subsidiary to enter into, amend, modify or supplement, any agreement, transaction, commitment
or arrangement with any of its or any Subsidiary’s officers, directors, Persons who were officers or directors at any time
during the previous two (2) years, shareholders who beneficially own 5% or more of the Common Stock, or Affiliates or with any
individual related by blood, marriage or adoption to any such individual or with any entity in which any such entity or individual
owns a 5% or more beneficial interest (each a “Related Party”), except for (i) customary employment arrangements and
benefit programs on reasonable terms, (ii) any agreement, transaction, commitment or arrangement on an arms-length basis on terms
no less favorable than terms which would have been obtainable from a disinterested third party other than such Related Party, or
(iii) any agreement, transaction, commitment or arrangement which is approved by a majority of the disinterested directors of the
Company. For purposes hereof, any director who is also an officer of the Company or any Subsidiary of the Company shall not be
a disinterested director with respect to any such agreement, transaction, commitment or arrangement. An “Affiliate”
of a Person means any other Person that directly or indirectly, through one or more intermediaries, controls, is controlled by,
or is under common control with, such Person, and the term “control” (including the terms “controlled by”
and “under common control with”) means the possession, directly or indirectly, of the power to direct or cause the
direction of the management and policies of a Person, whether through the ownership of voting securities, by contract or otherwise.

Section 5.08
Filing of Form 8-K. On or before the date which is four (4) Trading Days after the Execution Date, the Company shall
file a Current Report on Form 8-K with the SEC describing the terms of the Equity Financing Transactions in the form required by
the 1934 Act, if such filing is required.

Section 5.09
Corporate Existence. The Company shall use all commercially reasonable efforts to preserve and continue the corporate
existence of the Company.

Section 5.10  Notice
of Certain Events Affecting Registration; Suspension of Right to Make a Put. The Company shall promptly notify the
Investor upon the occurrence of any of the following events in respect of the Registration Statement or related prospectus in
respect of an offering of the Securities: (i) receipt of any request for additional information by the SEC or any other
federal or state governmental authority during the period of effectiveness of the Registration Statement for amendments or
supplements to the Registration Statement or related prospectus; (ii) the issuance by the SEC or any other federal or state
governmental authority of any stop order suspending the effectiveness of any Registration Statement or the initiation of any
proceedings for that purpose; (iii) receipt of any notification with respect to the suspension of the qualification or
exemption from qualification of any of the Securities for sale in any jurisdiction or the initiation or notice of any
proceeding for such purpose; (iv) the happening of any event that makes any statement made in such Registration Statement or
related prospectus or any document incorporated or deemed to be incorporated therein by reference untrue in any material
respect or that requires the making of any changes in the Registration Statement, related prospectus or documents so that, in
the case of a Registration Statement, it will not contain any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary to make the statements therein not misleading, and that in the case
of the related prospectus, it will not contain any untrue statement of a material fact or omit to state any material fact
required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they
were made, not misleading; and (v) the Company’s reasonable determination that a post-effective amendment or supplement
to the Registration Statement would be appropriate, and the Company shall promptly make available to Investor any such
supplement or amendment to the related prospectus. The Company shall not deliver to Investor any Put Notice during the
continuation of any of the foregoing events in this Section 5.10.

Section 5.11
Transfer Agent.  At each Closing, the Company shall deliver instructions to its transfer agent to issue Shares to
the Investor that are issued to the Investor Pursuant to the Equity Financing Transactions.

Section 5.12
Registration Statement. Within thirty (30) days of the Execution Date, the Company agrees to use its commercially
reasonable efforts to file with the SEC the Registration State covering the shares of stock underlying the Equity Financing Transactions.
Such registration statement shall conform to the requirements of the rules and regulations of the SEC and the terms and conditions
of Equity Financing Transactions this agreement as expressed in the registration statement shall be reviewed and approved by the
Investor. The Company will thereafter use its commercially reasonable efforts to have the Registration Statement declared effective
by the SEC within 30 days.

Section 5.13
Tax Liabilities. The Investor understands that it is liable for its own tax liabilities in connection with the Equity
Financing Transactions, and covenants and agrees to pay the same.

Section 5.14
Regulation M. The Investor will comply with Regulation M under the 1934 Act, if applicable.

Section 5.15
No Short Sales. The Investor agrees that it shall not undertake any short sales of the Common Stock or any other
equity securities of the Company, either directly or through its Affiliates, during the period commencing on the Execution Date
and continuing through the termination of this Agreement.

Article VI.    
CONDITIONS TO EACH CLOSING

Section 6.01
Conditions to the Obligations of the Company. The obligation hereunder of the Company to issue and sell the Securities
to the Investor is further subject to the satisfaction, at or before each Closing Date, of each of the following conditions, each
of which are for the Company’s sole benefit and may be waived by the Company at any time in its sole discretion:.

		(a)	The Investor shall have executed this Agreement and the Registration Rights Agreement and delivered
the same to the Company.

		(b)	The Investor shall have delivered to the Company the aggregate Put Amount for the Securities being
purchased by the Investor.

		(c)	The representations and warranties of the Investor shall be true and correct in all material respects,
other than representations and warranties which are qualified by materiality, which shall be true and correct in all respects,
in each case as of the date when made and as of the applicable Closing Date, other than representations and warranties which are
made as of a specific date, which shall be true and correct in all material respects, other than representations and warranties
which are qualified by materiality, which shall be true and correct in all respects, as of the date when made, and other than the
representations and warrants as set forth in Section 3.04, which shall be true and correct in all respects.

		(d)	The Investor shall have performed, satisfied and complied with the covenants, agreements and conditions
required by the Transaction Documents to be performed, satisfied or complied with by the Investor on or before such Closing Date
in all material respects.

		(e)	No statute, rule, regulation, executive order, decree, ruling or injunction shall have been enacted,
entered, promulgated or endorsed by any court or governmental authority of competent jurisdiction which prohibits the consummation
of the Equity Financing Transactions.

		(f)	The Registration Statement shall have been declared effective and shall remain effective.

		(g)	No stop order suspending the effectiveness of the Registration statement shall be in effect or
to the Company’s knowledge shall be pending or threatened.

		(h)	Neither the Company nor the Investor shall have received notice that the SEC has issued or intends
to issue a stop order with respect to the Registration Statement or that the SEC otherwise has suspended or withdrawn the effectiveness
of the Registration Statement, either temporarily or permanently, or intends or has threatened to do so (unless the SEC’s
concerns have been addressed).

		(i)	If applicable, the shareholders of the Company shall have approved the issuance of any Shares in
excess of the Maximum Common Stock Issuance in accordance with Section 2.05 or the Company shall have obtained appropriate approval
pursuant to the requirements of applicable state and federal laws and the Company’s Articles of Incorporation and By-laws.

Section 6.02
Conditions to the Obligations of the Investor. The obligation of the Investor hereunder to purchase Securities is
subject to the satisfaction, on or before each Closing Date, of each of the following conditions, each of which are for the Investor’s
sole benefit and may be waived by the Investor at any time in its sole discretion:

		(a)	The Company shall have executed the Transaction Documents and delivered the same to the Investor.

		(b)	The Company shall have sufficient authorized and unissued shares of Common Stock to validly issue
and deliver the applicable Shares to the Investor at the applicable Closing.

		(c)	The representations and warranties of the Company shall be true and correct in all material respects,
other than representations and warranties which are qualified by materiality, which shall be true and correct in all respects,
in each case as of the date when made and as of the applicable Closing Date, other than representations and warranties which are
made as of a specific date, which
shall be true and correct in all material respects, other than representations and warranties which are qualified by materiality,
which shall be true and correct in all respects, as of the date when made.

		(d)	The Company shall have performed, satisfied and complied with the covenants, agreements and conditions
required by the Transaction Documents to be performed, satisfied or complied with by the Company on or before such Closing Date
in all material respects.

		(e)	The Company shall have executed and delivered to the Investor the certificates representing, or
have executed electronic book-entry transfer of, the Securities (in such denominations as the Investor shall request) being purchased
by the Investor at such Closing.

No statute,
rule, regulation, executive order, decree, ruling or injunction shall have been enacted, entered, promulgated or endorsed by any
court or governmental authority of competent jurisdiction which prohibits the consummation of the Equity
Financing Transactions.

		(f)	The Registration Statement shall have been declared effective and shall remain effective.

		(g)	No stop order suspending the effectiveness of the Registration statement shall be in effect or
to the Company’s knowledge shall be pending or threatened.

		(h)	Neither the Company nor the Investor shall have received notice that the SEC has issued or intends
to issue a stop order with respect to the Registration Statement or that the SEC otherwise has suspended or withdrawn the effectiveness
of the Registration Statement, either temporarily or permanently, or intends or has threatened to do so (unless the SEC’s
concerns have been addressed).

		(i)	The Registration Statement (including information or documents incorporated by reference therein)
and any amendments or supplements thereto shall not contain any untrue statement of a material fact or omit to state any material
fact required to be stated therein or necessary to make the statements therein not misleading or which would require public disclosure
or an update supplement to the prospectus.

		(j)	At all times during the period beginning on the applicable Put Notice Date and ending on and including
the related Closing Date, the Common Stock shall have been listed or quoted for trading on the Principal Market and shall not have
been suspended from trading thereon for a period of two (2) consecutive Trading Days during the Open Period and the Company shall
not have been notified of any pending or threatened proceeding or other action to suspend the trading of the Common Stock.

		(k)	If applicable, the shareholders of the Company shall have approved the issuance of any Shares in
excess of the Maximum Common Stock Issuance in accordance with Section 2.05 or the Company shall have obtained appropriate approval
pursuant to the requirements of applicable state and federal laws and the Company’s Articles of Incorporation and By-laws.

		(l)	The Company shall have certified to the Investor the number of Shares of Common Stock outstanding
when a Put Notice is given to the Investor. The Company’s delivery of a Put Notice to the Investor constitutes
the Company’s certification of the existence of the necessary number of shares of Common Stock reserved for issuance.

Article VII.  
TERMINATION AND SUSPENSION

Section 7.01
Termination. This Agreement shall terminate upon any of the following events:

		(a)	when the Investor has purchased an aggregate of Seven Million Dollars ($7,000,000) in the Common
Stock of the Company pursuant to this Agreement;

		(b)	at such time that the Registration Statement is no longer in effect; or

		(c)	at any time upon the Company’s thirty (30) calendar day written notice to the Investor, writing
to so terminate this Agreement.

Section 7.02
Payments. Any and all shares, or penalties, if any, due under this Agreement shall be immediately payable and due
upon termination of this Agreement.

Section 7.03
Suspension. This Agreement shall be suspended upon any of the following events, and shall remain suspended until
such event is rectified:

		(a)	The trading of the Common Stock is suspended by the SEC, the Principal Market or FINRA for a period
of two (2) consecutive Trading Days during the Open Period; or

		(b)	The Common Stock ceases to be quoted, listed or traded on the Principal Market or the Registration
Statement is no longer effective (except as permitted hereunder). Immediately upon the occurrence of one of the above-described
events, the Company shall send written notice of such event to the Investor.

Article VIII.   
MISCELLANEOUS

Section 8.01  Indemnification.
In consideration of the Parties’ mutual obligations set forth in the Transaction Documents, the Company ( the
“Indemnitor”) shall defend, protect, indemnify and hold harmless the Investor and all of the
investor’s shareholders, officers, directors, employees, counsel, and direct or indirect investors and any of the
foregoing Person’s agents or other representatives (including, without limitation, those retained in connection with
the Equity Financing Transactions) (collectively, the “Indemnitees”) from and against any and all actions, causes
of action, suits, claims, losses, costs, penalties, fees, liabilities and damages, and reasonable expenses in connection
therewith (irrespective of whether any such Indemnitee is a party to the action for which indemnification hereunder is
sought), and including reasonable attorneys’ fees and disbursements (the “Indemnified Liabilities”),
incurred by any Indemnitee as a result of, or arising out of, or relating to (I) any misrepresentation or breach of any
representation or warranty made by the Indemnitor or any other certificate, instrument or document contemplated hereby or
thereby; (II) any breach of any covenant, agreement or obligation of the Indemnitor contained in the Transaction Documents or
any other certificate, instrument or document contemplated hereby or thereby; or (III) any cause of action, suit or claim
brought or made against such Indemnitee by a third party and arising out of or resulting from the execution, delivery,
performance or enforcement of the Transaction Documents or any other certificate, instrument or document contemplated hereby
or thereby, except insofar as any such misrepresentation, breach or any untrue statement, alleged untrue statement,
omission or alleged omission is made in reliance upon and in conformity with information furnished to Indemnitor which is
specifically intended for use in the preparation of any such Registration Statement, preliminary prospectus, prospectus or
amendments to the prospectus. To the extent that the foregoing undertaking by the Indemnitor may be unenforceable for any
reason, the Indemnitor shall make the maximum contribution to the payment and satisfaction of each of the Indemnified
Liabilities which is permissible under applicable law. The indemnity provisions contained herein shall be in addition to any
cause of action or similar rights Indemnitor may have, and any liabilities the Indemnitor or the Indemnitees may be subject
to.

Section 8.02
Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State of Nevada
without regard to principles of conflicts of laws. Any action brought by either Party against the other concerning the Equity Financing
Transactions shall be brought only in the state or federal courts located in New York City, New York State. The Parties hereby
irrevocably waive any objection to jurisdiction and venue of any action instituted hereunder and shall not assert any defense based
on lack of jurisdiction or venue or based upon forum non conveniens. The Parties agree to submit to the in personam
jurisdiction of such courts and hereby irrevocably waive trial by jury. The prevailing Party shall be entitled to recover from
the other Party its reasonable attorney’s fees and costs. In the event that any provision of this Agreement or any other
agreement delivered in connection herewith is invalid or unenforceable under any applicable statute or rule of law, then such provision
shall be deemed inoperative to the extent that it may conflict therewith and shall be deemed modified to conform with such statute
or rule of law. Any such provision which may prove invalid or unenforceable under any law shall not affect the validity or enforceability
of any other provision of any agreement. Each Party hereby irrevocably waives personal service of process and consents to process
being served in any suit, action or proceeding in connection with this Agreement or any other Transaction Document by mailing a
copy thereof via registered or certified mail or overnight delivery (with evidence of delivery) to such Party at the address in
effect for notices to it under this Agreement and agrees that such service shall constitute good and sufficient service of process
and notice thereof. Nothing contained herein shall be deemed to limit in any way any right to serve process in any other manner
permitted by law.

Section 8.03
Legal Fees and Miscellaneous Fees. Except as otherwise set forth in the Transaction Documents each Party shall pay
the fees and expenses of its advisers, counsel, the accountants and other experts, if any, and all other expenses incurred by such
Party incident to the negotiation, preparation, execution, delivery and performance of this Agreement. Any attorneys’ fees
and expenses incurred by either the Company or the Investor in connection with the preparation, negotiation, execution and delivery
of any amendments to this Agreement or relating to the enforcement of the rights of any Party, after the occurrence of any breach
of the terms of this Agreement by the other Party or any default by the other Party in respect of the Equity Financing Transactions,
shall be paid on demand by the Party which breached the Agreement and/or defaulted, as the case may be. The Company shall pay all
stamp and other taxes and duties levied in connection with the issuance of any Securities.

Section 8.04
Headings. The headings of this Agreement are for convenience of reference and shall not form part of, or affect the
interpretation of, this Agreement.

Section 8.05
Severability. If any provision of this Agreement shall be invalid or unenforceable in any jurisdiction, such invalidity
or unenforceability shall not affect the validity or enforceability of the remainder of this Agreement in that jurisdiction or
the validity or enforceability of any provision of this Agreement in any other jurisdiction.

Section 8.06
Entire Agreement; Amendments. This Agreement and the other Transaction Documents are the final and entire agreement
between the Company and the Investor with respect to the terms and conditions set forth herein and therein, and, the terms of this
Agreement and the other Transaction Documents may not be contradicted by evidence of prior, contemporaneous, or subsequent oral
agreements of the Parties. No provision of this Agreement or the other Transaction Documents may be amended other than by an instrument
in writing signed by the Company and the Investor, and no provision hereof or thereof may be waived other than by an instrument
in writing signed by the Party against whom enforcement is sought. The execution and delivery of the Transaction Documents shall
not alter the force and effect of any other agreements between the Parties, and the obligations under those agreements.

Section 8.07
Notices. Any notices or other communications required or permitted to be given under the terms of this Agreement
must be in writing and will be deemed to have been delivered (I) upon receipt, when delivered personally; (II) upon receipt, when
sent by facsimile (provided confirmation of transmission is mechanically or electronically generated and kept on file by the sending
Party); or (III) one (1) day after deposit with a nationally recognized overnight delivery service, in each case properly addressed
to the Party to receive the same. The addresses and facsimile numbers for such communications shall be:

If to the Company:

Ozop Surgical Corp.

Attn: Barry Hollander, CFO

319 Clematis Street, Suite
714

West Palm Beach, FL. 33401

 

With a copy, which shall not constitute
notice, to:

 

Brunson
Chandler & Jones, PLLC

Attn: Lance Brunson

Walker Center 

175 S. Main
Street, 14th Floor 

Salt Lake City,
UT  84111

If to the Investor:

 

GHS Investments, LLC

420 Jericho Turnpike, Suite 102

Jericho, NY 11753

Each Party shall provide five (5) days prior written notice to the other Party of any change in address or facsimile number.

Section 8.08
No Assignment. This Agreement may not be assigned by either Party without the prior written consent of the other
Party, and any attempted assignment without such consent shall be null and void and of no force or effect.

Section 8.09
No Third-Party Beneficiaries. Other than as specifically set forth herein, this Agreement is intended for the benefit
of the Parties and is not for the benefit of, nor may any provision hereof be enforced by, any other Person.

Section 8.10
Survival. The representations and warranties of the Company and the Investor contained in Article III and Article
IV, the agreements and covenants set forth in Article V, and the indemnification provisions set forth in Section 8.01, shall survive
each of the Closings and the termination of this Agreement.

Section 8.11
Publicity. The Investor acknowledges that this Agreement and all or part of the Transaction Documents may be deemed
to be “material contracts” as that term is defined by Item 601(b)(10) of Regulation S-K, and that the Company may therefore
be required to file such documents as exhibits to reports or registration statements filed under the 1933 Act or the 1934 Act.
The Investor further agrees that the status of such documents and materials as material contracts shall be determined solely by
the Company, in consultation with its counsel.

Section 8.12
Further Assurances. Each Party shall do and perform, or cause to be done and performed, all such further acts and
things, and shall execute and deliver all such other agreements, certificates, instruments and documents, as the other Party may
reasonably request in order to carry out the intent and accomplish the purposes of this Agreement and the consummation of the Equity
Financing Transactions.

Section 8.13
Placement Agent. If so required, the Company agrees to pay a registered broker dealer, to act as placement agent,
a percentage of the Put Amount on each Put toward the fee as outlined in that certain placement agent agreement entered into between
the Company and the placement agent. The Investor shall have no obligation with respect to any fees or with respect to any claims
made by or on behalf of other Persons for fees of a type contemplated in this Section 8.13 that may be due in connection with the
Equity Financing Transactions. The Company shall indemnify and hold harmless the Investor, their employees, officers, directors,
agents, and partners, and their respective affiliates, from and against all claims, losses, damages, costs (including the costs
of preparation and attorney’s fees) and expenses incurred in respect of any such claimed or existing fees, as such fees and
expenses are incurred.

Section 8.14
No Strict Construction. The language used in this Agreement will be deemed to be the language chosen by the Parties
to express their mutual intent, and no rules of strict construction will be applied against any Party, as the Parties mutually
agree that each has had a full and fair opportunity to review this Agreement and seek the advice of counsel on it.

Section 8.15
Remedies. The Investor shall have all rights and remedies set forth in this Agreement and the Registration Rights
Agreement and all rights and remedies which such holders have been granted at any time under any other agreement or contract and
all of the rights which the Investor has by law. Any Person having any rights under any provision of this Agreement shall be entitled
to enforce such rights specifically (without posting a bond or other security), to recover damages by reason of any default or
breach of any provision of this Agreement, including the recovery of reasonable attorneys’ fees and costs, and to exercise
all other rights granted by law.

Section 8.16  Payment
Set-Aside. To the extent that the Company makes a payment or payments to the Investor hereunder or under the Registration
Rights Agreement or the Investor enforces or exercises its rights hereunder or thereunder, and such payment or payments or
the proceeds of such enforcement or exercise or any part thereof are subsequently invalidated, declared to be fraudulent or
preferential, set aside, recovered from, disgorged by or are required to be refunded, repaid or otherwise restored to the
Company, a trustee, receiver or any other Person under any law (including, without limitation, any bankruptcy law, state or
federal law, common law or equitable cause of action), then to the extent of any such restoration the obligation or part
thereof originally intended to be satisfied shall be revived and continued in full force and effect as if such payment had
not been made or such enforcement or setoff had not occurred.

Section 8.17
Pricing of Common Stock. For purposes of this Agreement, the price of the Common Stock shall be as reported by Quotestream
Media.

Section 8.18
Confidential Information. The Company shall not disclose non-public information to the Investor, its advisors, or
its representatives. Nothing herein shall require the Company to disclose non-public information to the Investor or its advisors
or representatives, and the Company represents that it does not disseminate non-public information to any investors who purchase
stock in the Company in a public offering, to money managers or to securities analysts, provided, however, that notwithstanding
anything herein to the contrary, the Company will, as hereinabove provided, immediately notify the advisors and representatives
of the Investor and, if any, underwriters, of any event or the existence of any circumstance (without any obligation to disclose
the specific event or circumstance) of which it becomes aware, constituting non-public information (whether or not requested of
the Company specifically or generally during the course of due diligence by such Persons), which, if not disclosed in the prospectus
included in the Registration Statement would cause such prospectus to include a material misstatement or to omit a material fact
required to be stated therein in order to make the statements, therein, in light of the circumstances in which they were made,
not misleading. Nothing contained in this Section 8.18 shall be construed to mean that such Persons other than the Investor (without
the written consent of the Investor prior to disclosure of such information) may not obtain non-public information in the course
of conducting due diligence in accordance with the terms of this Agreement and nothing herein shall prevent any such Persons from
notifying the Company of their opinion that based on such due diligence by such Persons, that the Registration Statement contains
an untrue statement of material fact or omits a material fact required to be stated in the Registration Statement or necessary
to make the statements contained therein, in light of the circumstances in which they were made, not misleading.

Section 8.19
Counterparts. This Agreement may be executed in any number of counterparts and by the different signatories hereto
on separate counterpart signature pages, each of which, when so executed, shall be deemed an original, but all such counterparts
shall constitute but one and the same instrument. This Agreement may be executed by facsimile transmission, PDF, electronic signature
or other similar electronic means with the same force and effect as if such signature page were an original thereof.

[Signature page follows]

    	 

    	 

    

 

In witness
whereof, the Parties have executed this Agreement as of the Execution Date, signifying their agreement to be bound by the terms
and conditions of the Agreement as of the date first written above, and their certification that they have read and understand
the Agreement, and the representations made by the undersigned in this Agreement are true and accurate.

 

GHS INVESTMENTS, LLC

 

 

By: /s/ Mark Grober

Name: Mark Grober

Title: Member

 

Ozop Surgical Corp.

 

By:/s/ Michael
Chermak

Name: Michael Chermak

Title:Chief Executive Officer

 

 

[SIGNATURE PAGE OF EQUITY FINANCING AGREEMENT]

 

 

    	 

    	 

    

 

LIST OF EXHIBITS

 

EXHIBIT ARegistration Rights
Agreement

EXHIBIT
BNotice of Effectiveness

EXHIBIT CPut Notice

 

    	 

    	 

    

 

EXHIBIT A

REGISTRATION RIGHTS AGREEMENT

See attached.

 

    	 

    	 

    

 

EXHIBIT B

FORM OF NOTICE OF EFFECTIVENESS
OF REGISTRATION STATEMENT

Date: __________

[TRANSFER AGENT]

Re: Ozop Surgical Corp.

 

Ladies and Gentlemen:

We are counsel to
Ozop Surgical Corp., a Nevada corporation (the “Company”), and have represented the Company in connection with that
certain Equity Financing Transactions Agreement (the “Investment Agreement”) entered into by and among the Company
and GHS Investments, LLC (the “Investor”) pursuant to which the Company has agreed to issue to the Investor shares
of the Company’s common stock, $0.001 par value per share (the “Common Stock”) on the terms and conditions set
forth in the Investment Agreement. Pursuant to the Investment Agreement, the Company also has entered into a Registration Rights
Agreement with the Investor (the “Registration Rights Agreement”) pursuant to which the Company agreed, among other
things, to register the Registrable Securities (as defined in the Registration Rights Agreement), including the shares of Common
Stock issued or issuable under the Investment Agreement under the Securities Act of 1933, as amended (the “1933 Act”).
In connection with the Company’s obligations under the Registration Rights Agreement, on ____________ ___, 20__, the Company
filed a Registration Statement on Form S- ___ (File No. __-________) (the “Registration Statement”) with the Securities
and Exchange Commission (the “SEC”) relating to the Registrable Securities which names the Investor as a selling shareholder
thereunder.

 

In connection with
the foregoing, we advise you that a member of the SEC’s staff has advised us by telephone that the SEC has entered an order
declaring the Registration Statement effective under the 1933 Act at ______ on __________, 20__ and we have no knowledge, after
telephonic inquiry of a member of the SEC’s staff, that any stop order suspending its effectiveness has been issued or that
any proceedings for that purpose are pending before, or threatened by, the SEC and the Registrable Securities are available for
sale under the 1933 Act pursuant to the Registration Statement.

 

Very truly
yours,

 

    	 

    	 

    

 

EXHIBIT C

FORM OF PUT NOTICE

Date:

RE: Put Notice Number __

Dear Mr./Ms.__________,

This is to inform you that as of today,
Ozop Surgical Corp. a Nevada corporation (the “Company”), hereby elects to exercise its rights, pursuant to the Equity
Financing Transactions Agreement dated as of June [_____], 2019 (the “Agreement”) by and between the Company and GHS
Investments LLC (the “Investor”), to require the Investor to purchase shares of Common Stock. Terms used herein without
definition shall have the meaning given to them in the Agreement.

 

The Company hereby certifies that:

The Pricing Period runs from
_______________ until _______________.

The Purchase Price is: $__________
per Share.

The Put Amount is: $_______________

The number of Put Shares Due:___________________.

The current number of shares
of Common Stock issued and outstanding is: _________________.

The number of shares of Common
Stock currently available for issuance on the Registration Statement is: ________________________.

Wire Transfer Information for
Put Amount:

	Bank Name:	 	[____________]
	Address:	 	[____________]
	Account #:	 	[____________]
	Routing #:	 	[____________]
	Account Name:	 	[____________]
	Swift Code:	 	[____________]

 

Regards,

Ozop Surgical Corp.

By: __________________________________

Name: ________________________________

Title:_________________________________

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