Document:

Exhibit 10.1

 

 

 

 

 

SECURITIES PURCHASE AGREEMENT

 

AMONG

 

KULR TECHNOLOGY GROUP, INC.

 

AND

 

THE STOCKHOLDERS OF TECHTOM CO., LTD.

 

 

 

 

 

Dated April 2, 2019

 

 

 

 

     

     

    

 

SECURITIES PURCHASE AGREEMENT

 

THIS SECURITIES PURCHASE
AGREEMENT is made as of April 2, 2019 (the “Agreement”), among KULR Technology Group, Inc., a Delaware corporation
(the “Purchaser”), and all of the stockholders of TECHTOM Co., Ltd. (“TECHTOM”), which stockholders
are listed on Schedule 1 hereof (collectively the “Sellers”). Each of the Purchaser and the Sellers may
be referred to herein individually as a “Party” or collectively as the “Parties.”

 

W I T N E S S E T H:

 

WHEREAS, the Sellers
are the sole stockholders of, and own all of the issued and outstanding capital stock (the “TT Stock”), of TECHTOM;
and

 

WHEREAS, the Sellers
desire to sell to Purchaser, and the Purchaser desires to purchase from the Sellers, the TT Stock, upon the terms and conditions
hereinafter set forth;

 

NOW, THEREFORE, in
consideration of the premises and the mutual covenants and agreements hereinafter contained, the parties hereby agree as follows:

 

Article
I SALE AND PURCHASE OF SHARES

 

		1.1	Sale and Purchase of TT Stock.

 

Upon the terms and
subject to the conditions contained herein, on the Closing Date each Seller shall sell, assign, transfer, convey and deliver to
the Purchaser, and the Purchaser shall purchase from each Seller, all TT Stock of TECHTOM owned by such Seller set forth opposite
such Seller's name on Schedule 1 attached hereto and any and all the claims the Sellers may have against TECHTOM, including
any liabilities owed by TECHTOM to the Sellers (collectively, the “Claims”), which Claims include the “book value”
of a personal loan owed by TECHTOM to a Seller.

 

Article
II PURCHASE PRICE AND PAYMENT; OPTION TO UNWiND

 

		2.1	Purchase Price.

 

Subject to the terms
and conditions of this Agreement, the Purchaser shall pay to the Sellers, against delivery of the TT Stock and transfer of the
Claims, an aggregate purchase price equal to: (i) One Million Seven Hundred Thousand Dollars ($1,700,000) in cash (“Cash
Consideration”) and (ii) One Hundred (100) shares of the Purchaser’s Series C Convertible Preferred Stock (“KUTG
Stock”), which KUTG Stock shall have the rights, preferences, and limitation set forth in the Purchaser’s Certificate
of Designation of Series C Convertible Preferred Stock attached hereto as Exhibit A, including but not limited to the right of
such KUTG Stock to be convertible, after six (6) months, into Two Million (2,000,000) shares of the Purchaser’s common stock.
The Cash Consideration and KUTG Stock shall be apportioned to the Sellers according to the percentages set forth on Schedule
1 opposite such Seller’s name.

 

     

     

    

 

		2.2	Payment of Purchase Price.

 

Subject to the terms
and conditions set forth in Section 2.3, in consideration for the sale, assignment, transfer, conveyance and delivery by the Sellers
to the Purchaser of the TT Stock, Purchaser shall: (i) at the Closing, pay Eight Hundred Fifty Thousand Dollars ($850,000) of the
Cash Consideration and issue Fifty (50) shares of the KUTG Stock to the Sellers in accordance with the percentages forth on Schedule
1 opposite such Seller’s name; and (ii) upon completion of an audit of TECHTOM’s year-end financial statements
for the fiscal years ended April 30, 2019 and 2018 and a review of TECHTOM’s quarterly financial statements of any interim
periods completed prior to the Closing Date (the year-end and quarterly financial statements, collectively the “Required
Financial Statement”) by a PCAOB registered audit firm (the “Audit & Review”), (a) pay Three Hundred Fifty
Thousand Dollars ($350,000) (the “Escrowed Funds”) to be held in escrow in accordance with the terms and conditions
set forth in Section 2.3 and in the Escrow Agreement by and among the Parties in substantially the form attached hereto as Exhibit
B (the “Escrow Agreement”) to the Escrow Agent (as defined in the Escrow Agreement); (b) pay Five Hundred Thousand
Dollars ($500,000) of the Cash Consideration to the Sellers; and (c) issue Fifty (50) shares of the KUTG Stock to the Sellers,
in accordance with the percentages forth on Schedule 1 opposite such Seller’s name.

 

		2.3	Purchase Price Escrow.

 

Notwithstanding the
payments in the amounts and upon the occurrence of events set forth in Section 2.2 above, the Purchaser shall deposit the Escrowed
Funds pursuant to the Escrow Agreement, which Escrowed Funds shall represent funds intended to be used, if necessary, by the Purchaser
to satisfy and fulfill: (i) up to $100,000 of tax liability due upon filing of the fiscal year-end tax returns, pursuant to the
obligations set forth in Section 6.4(a) hereof, and, after payment of such liability, if any, the remainder of the $100,000 of
such Escrowed Funds set aside for this purpose shall be released to the Sellers upon filing of such tax returns; or (ii) up to
$250,000 of indemnification obligations of Sellers under Article IX of this Agreement and, after payment of such obligations, if
any, the remainder of the $250,000 of such Escrowed Funds set aside for this purpose shall be released to the Sellers after twelve
(12) months following the Closing Date.

 

		2.4	Option to Unwind.

 

In the event that the
Audit & Review is not completed by the Seventy-Fourth (74th) calendar day following the Closing, the Purchaser shall
have the right, at the Purchaser’s sole discretion, to require the Sellers to unwind the purchase and sale of the TT Stock.
Upon exercise by the Purchaser of such option, the Sellers shall immediately, but in no event within five (5) business days, return
any and all Cash Consideration actually paid to such Sellers to the Purchaser in accordance with the Purchaser’s instructions
provided upon exercise of such option. In addition, the Sellers shall execute and deliver to the Purchaser any instrument and any
certificates that are required to surrender for cancellation any and all KUTG Stock issued to the Purchaser.

 

     

     

    

 

Article
III CLOSING AND TERMINATION

 

		3.1	Closing Date.

 

Subject to the satisfaction
of the conditions set forth in Sections 7.1 and 7.2 hereof (or the waiver thereof by the party entitled to waive that condition),
the closing of the sale and purchase of the TT Stock provided for in Section 1 hereof (the “Closing”) shall
take place at the offices of Sichenzia Ross Ference LLP, 1185 Avenue of the Americas, New York, NY 10036 (or at such other place
as the parties may designate in writing) on such date as the Sellers and the Purchaser may designate. The Closing may also take
place through the delivery of documents in electronic or telefaxed format or through courier delivery of actual signatures to counsel
for the parties.

 

		3.2	Termination of Agreement.

 

This Agreement may
be terminated prior to the Closing by either (a) mutual written consent of the Sellers and the Purchaser or (b) the failure
to complete the Closing by September 30, 2019. In the event that this Agreement is validly terminated as provided herein, then
each of the parties shall be relieved of their duties and obligations arising under this Agreement after the date of such termination
and such termination shall be without liability to the Purchaser, or any Seller; provided, however, that nothing
in this Section 3.2 shall relieve the Purchaser or any Seller of any liability for a breach of this Agreement.

 

Article
IV REPRESENTATIONS AND WARRANTIES OF THE SELLERS

 

Each of the Sellers
represents and warrants to the Purchaser that as of the Closing Date:

 

		4.1	Organization and Good Standing of TECHTOM.

 

TECHTOM is a corporation
duly organized, validly existing and in good standing under the laws of the jurisdiction of its incorporation as set forth above.

 

		4.2	Authority.

 

		(a)	TECHTOM has full power and authority (corporate and otherwise) to carry on its business and has
all permits and licenses that are necessary to the conduct of its business or to the ownership, lease or operation of its properties
and assets, except where the failure to have such permits and licenses would not have a material adverse effect on the TECHTOM’s
business or operations taken as a whole (“Material Adverse Effect”).

 

		(b)	The execution of this Agreement and the delivery hereof to the Purchaser and the sale contemplated
herein have been, or will be prior to Closing, duly authorized by TECHTOM’s Board of Director’s and, if necessary,
by TECHTOM’s stockholders having full power and authority to authorize such actions.

 

		(c)	Neither the execution and delivery of this Agreement, the consummation of the transactions herein
contemplated, nor compliance with the terms of this Agreement will violate, conflict with, result in a breach of, or constitute
a default under any statute, regulation or other agreement to which TECHTOM or any Seller is a party or by which it or any of them
is bound, any charter, regulation, or bylaw provision of TECHTOM, or any decree, order, or rule of any court or governmental authority
or arbitrator that is binding on TECHTOM or any Seller in any way, except where such would not have a Material Adverse Effect.

 

     

     

    

 

		4.3	Capitalization.

 

		(a)	TECHTOM’s authorized capital stock consists of 3,000 shares of capital stock of which 1,565
shares are issued and outstanding as of the date hereof. The Sellers own 100% of the outstanding capital stock of TECHTOM.

 

		(b)	There are no authorized or outstanding subscriptions, options, warrants, calls, contracts, demands,
commitments, convertible securities or other agreements or arrangements of any character or nature whatever under which TECHTOM
is or may become obligated to issue, assign or transfer any shares of capital stock of TECHTOM. Based upon the representations
and warranties of the Sellers in this Agreement, upon the transfer to Purchaser on the Closing Date of the TT Stock, Purchaser
will have good, legal, valid, marketable and indefeasible title to 100% of the then issued and outstanding shares of capital stock
of TECHTOM, free and clear of any liens, pledges, encumbrances, charges, agreements, options, claims or other arrangements or restrictions
of any kind, other than those imposed by applicable securities laws.

 

		4.4	Basic Corporate Records.

 

The copies of the formation
documents of TECHTOM (certified by the authorized official of the jurisdiction of incorporation), all of which have been delivered
to the Purchaser, are true, correct and complete as of the date of this Agreement.

 

The minute books of
TECHTOM, which shall be exhibited to the Purchaser between the date hereof and the Closing Date, each contain true, correct and
materially complete minutes and records of all meetings, proceedings and other actions of the Board of Directors and stockholders
of TECHTOM, except where such would not have a Material Adverse Effect and, on the Closing Date, will, contain true, correct and
materially complete minutes and records of any meetings, proceedings and other actions of the Board of Directors and stockholders
of TECHTOM.

 

		4.5	Subsidiaries and Affiliates.

 

Any and all businesses,
entities, enterprises and organizations in which TECHTOM has any ownership, voting or profit and loss sharing percentage interest
(the “Subsidiaries”) are identified in Schedule 4.5 hereto, together with TECHTOM’s interest therein.

 

		4.6	Consents.

 

No consents or approvals
of any public body or authority and no consents or waivers from other parties to leases, licenses, franchises, permits, indentures,
agreements or other instruments are (i) required for the lawful consummation of the transactions contemplated hereby, or (ii) necessary
in order that the business currently conducted by TECHTOM can be conducted by the Purchaser in the same manner after the Closing
as heretofore conducted by TECHTOM, nor will the consummation of the transactions contemplated hereby result in creating, accelerating
or increasing any liability of TECHTOM, except where the failure of any of the foregoing would not have a Material Adverse Effect.

 

     

     

    

  

		4.7	Financial Statements.

 

The Sellers have delivered,
at or prior to Closing, to the Purchaser copies of the Required Financial Statements, which Required Financial Statements shall
be prepared in a manner reasonably acceptable by the Purchaser to enable a PCAOB registered auditor to audit or review such Required
Financial Statements, all of which Required Financial Statements will be true, complete and correct, and will have been prepared
from the books and records of TECHTOM. The records and books of TECHTOM reflect all material assets and liabilities.

 

Other than as presented
in the Required Financial Statements, there are no liabilities or obligations of TECHTOM of any kind whatsoever, whether accrued,
fixed, absolute, contingent, determined or determinable.

 

		4.8	Taxes.

 

For purposes of this
Agreement, “Tax” or “Taxes” refers to any and all federal taxes, assessments and other governmental
charges, duties, impositions and liabilities relating to taxes, including taxes based upon or measured by gross receipts, income,
profits, sales, use and occupation, and value added, ad valorem, transfer, franchise, withholding, payroll, recapture, employment,
excise and property taxes and escheatment payments, together with all interest, penalties and additions imposed with respect to
such amounts and any obligations under any agreements or arrangements with any other person with respect to such amounts and including
any liability for taxes of a predecessor entity.

 

TECHTOM has timely
filed all returns, estimates, information statements and reports (“Tax Returns”) relating to Taxes required
to be filed by TECHTOM with any Tax authority effective through the Closing Date. All such Tax Returns are true, correct and complete
in all respects, except for immaterial amounts where such would not have a Material Adverse Effect.

 

Except for the consumption
tax previously payable in January 2019, which tax will be paid before the Closing Date and pursuant to an extension received by
TECHTOM’s taxing authorities, TECHTOM has not been delinquent in the payment of any Tax nor is there any Tax deficiency outstanding
or assessed against TECHTOM. TECHTOM has not executed any unexpired waiver of any statute of limitations on or extending the period
for the assessment or collection of any Tax.

 

		4.9	Real Property Matters.

 

TECHTOM does not own
any real property as of the date hereof and has not owned any real property during the three years preceding the date hereof.

 

     

     

    

 

		4.10	Lists of Contracts, Etc.

 

There is included in
Schedule 4.10 a list of the following items (whether written or oral) relating to TECHTOM, which list identifies and fairly
summarizes each item (collectively, “Contracts”):

 

		(a)	All joint venture contracts of TECHTOM or affiliates relating to its business;

 

		(b)	All contracts of TECHTOM relating to (a) obligations for borrowed money and (b) obligations
under capital leases, (e) debt of others secured by a lien on any asset of TECHTOM, and (f) debts of others guaranteed
by TECHTOM;

 

		(c)	All agreements of TECHTOM relating to the supply of raw materials for and the distribution of the
products of its business, including without limitation all sales agreements, manufacturer’s representative agreements and
distribution agreements of whatever magnitude and nature, and any commitments therefor;

 

		(d)	All contracts that individually provide for aggregate future payments to or from TECHTOM of $25,000
or more, to the extent not included in (a) through (c) above;

 

		(e)	All contracts of TECHTOM that have a term exceeding one year and that may not be cancelled without
any liability, penalty or premium, to the extent not included in (a) through (d) above;

 

		(f)	All contracts, agreements and commitments of TECHTOM set forth in Schedule 4.10 are
valid, binding and in full force and effect, and (ii) neither TECHTOM nor, any other party to any such contract, agreement,
or commitment has materially breached any provision thereof or is in default thereunder. Immediately after the Closing, each such
contract, agreement or commitment will continue in full force and effect without the imposition or acceleration of any burdensome
condition or other obligation on TECHTOM resulting from the sale of the TT Stock by the Sellers.

 

		4.11	Compliance With the Law.

 

TECHTOM is not in violation
of any applicable federal, state, local or foreign law, regulation or order or any other, decree or requirement of any governmental,
regulatory or administrative agency or authority or court or other tribunal (including, but not limited to, any law, regulation
order or requirement relating to securities, properties, business, products, manufacturing processes, advertising, sales or employment
practices, terms and conditions of employment, occupational safety, health and welfare, conditions of occupied premises, product
safety and liability, civil rights, or environmental protection, including, but not limited to, those related to waste management,
air pollution control, waste water treatment or noise abatement), except where such would not have a Material Adverse Effect. TECHTOM
has not been and is not now charged with, or to TECHTOM’s knowledge under investigation with respect to, any violation of
any applicable law, regulation, order or requirement relating to any of the foregoing, nor, to TECHTOM’s knowledge after
due inquiry, are there any circumstances that would or might give rise to any such violation. TECHTOM has filed all reports required
to be filed with any governmental, regulatory or administrative agency or authority, except where the failure to file such would
not have a Material Adverse Effect.

 

     

     

    

 

		4.12	Litigation.

 

Except as specifically
identified in the financial statements provided to the Purchaser or footnotes thereto or set forth in Schedule 4.12:

 

		(a)	There are no legal, administrative, arbitration or other proceedings or governmental investigations
pending or, to TECHTOM’s knowledge, threatened, against the Sellers or TECHTOM, relating to its Business or TECHTOM or its
properties (including leased property), or the transactions contemplated by this Agreement, nor is there any basis known to TECHTOM
for any such action.

 

		(b)	There are no judgments, decrees or orders of any court, or any governmental department, commission,
board, agency or instrumentality binding TECHTOM relating to its Business or TECHTOM the effect of which is to prohibit any business
practice or the acquisition of any property or the conduct of any business by TECHTOM or which limit or control or otherwise would
have a Material Adverse Affect on its method or manner of doing business.

 

		4.13	Absence of Certain Changes or Events.

 

TECHTOM has not, since
its last fiscal quarter end, and will not, between its fiscal year end and the Closing Date, have:

 

		(a)	Incurred any material obligation or liability (absolute, accrued, contingent or otherwise), except
in the ordinary course of its business consistent with past practice or in connection with the performance of this Agreement; or

 

		(b)	Issued any common stock, or other corporate securities, or made any declaration or payment of any
dividend or any distribution in respect of its capital stock.

 

Each Seller, individually
and not jointly, represents and warrants to the Purchaser as of the Closing Date that:

 

		4.14	Ownership

 

With respect to Seller’s
TT Stock, Seller is the lawful record and beneficial owner of all the Seller’s TT Stock, free and clear of any liens, pledges,
encumbrances, charges, claims or restrictions of any kind and has, or will have on the Closing Date, the absolute, unilateral right,
power, authority and capacity to enter into and perform this Agreement without any other or further authorization, action or proceeding,
except as specified herein.

 

		4.15	Options and Rights

 

There are no authorized
or outstanding subscriptions, options, warrants, calls, contracts, demands, commitments, convertible securities or other agreements
or arrangements of any character or nature whatever under which Seller is or may become obligated to assign or transfer any shares
of capital stock of TECHTOM. Upon the transfer to Purchaser on the Closing Date of the TT Stock, Purchaser will have good, legal,
valid, marketable and indefeasible title to all the Seller’s TT Stock, free and clear of any liens, pledges, encumbrances,
charges, agreements, options, claims or other arrangements or restrictions of any kind, other than those imposed by applicable
securities laws.

 

     

     

    

 

Article
V REPRESENTATIONS AND WARRANTIES OF PURCHASER

 

The Purchaser represents
and warrants to each Seller, as of the Closing Date, that:

 

 

		5.1	Organization and Good Standing of the Purchaser.

 

The Purchaser is a
corporation duly organized, validly existing and in good standing under the laws of the State of Delaware.

 

		5.2	Authority.

 

(a)       The
execution and delivery of this Agreement and the consummation of the transactions contemplated herein have been, or will prior
to Closing be, duly and validly approved and acknowledged by all necessary corporate action on the part of the Purchaser and the
Agreement is enforceable in accordance with its terms.

 

(b)       The
execution of this Agreement and the delivery hereof to the Sellers and the purchase contemplated herein have been, or will be prior
to Closing, duly authorized by the Purchaser having full power and authority to authorize such actions.

 

		5.3	Consents.

 

		(a)	The execution and delivery of this Agreement, the acquisition of the TT Stock by Purchaser and
the consummation of the transactions herein contemplated, and the compliance with the provisions and terms of this Agreement, are
not prohibited by the Certificate of Formation or the Operating Agreement of the Purchaser and will not violate, conflict with
or result in a breach of any of the terms or provisions of, or constitute a default under, any court order, indenture, mortgage,
loan agreement, or other agreement or instrument to which the Purchaser is a party or by which it is bound.

 

		(b)	No consent, waiver, approval, order, permit or authorization of, or declaration or filing with,
or notification to, any person or governmental body is required on the part of the Purchaser in connection with the execution and
delivery of this Agreement or any other agreement referenced herein or the compliance by Purchaser with any of the provisions hereof
or thereof.

 

     

     

    

 

		5.4	Litigation.

 

There are no legal
proceedings pending or, to the best knowledge of the Purchaser, threatened that are reasonably likely to prohibit or restrain the
ability of the Purchaser to enter into this Agreement or consummate the transactions contemplated hereby.

 

		5.5	Capitalization.

 

The authorized capital
stock of the Purchaser, the number and class or kind of the issued and outstanding shares of the Purchaser are as listed on Schedule
2.

 

 

Article
VI COVENANTS

 

		6.1	Access to Information.

 

TECHTOM agrees that,
prior to the Closing Date, the Purchaser shall be entitled, through its officers, employees and representatives (including, without
limitation, its legal advisors and accountants), to make such investigation of the properties, businesses and operations of TECHTOM
and such examination of the books, records and financial condition of TECHTOM as it reasonably requests and to make extracts and
copies of such books and records.

 

No investigation prior
to or after the date of this Agreement shall diminish or obviate any of the representations, warranties, covenants or agreements
contained in this Agreement or any other agreement referenced herein.

 

		6.2	Conduct of the Business Pending the Closing.

 

		(a)	Except as otherwise expressly contemplated by this Agreement or with the prior written consent
of the Purchaser, prior to the Closing the Sellers shall, and shall cause TECHTOM to:

 

		(i)	Conduct the business of TECHTOM only in the ordinary course consistent with past practice;

 

		(ii)	Use its best efforts to (A) preserve its present business operations, organization (including,
without limitation, management and the sales force) and goodwill of TECHTOM and (B) preserve its present relationship with parties
having business dealings with TECHTOM; and

 

		(iii)	Comply in all material respects with applicable laws.

 

		(b)	Except as otherwise expressly contemplated by this Agreement or with the prior written consent
of the Purchaser, prior to the Closing the Sellers shall not, and shall cause TECHTOM not to:

 

     

     

    

 

		(i)	Transfer, issue, sell or dispose of any shares of capital stock or other securities of TECHTOM
or grant options, warrants, calls or other rights to purchase or otherwise acquire shares of the capital stock or other securities
of TECHTOM;

 

		(ii)	Amend any of the formation documents of TECHTOM;

 

		(iii)	Subject to any lien (except for leases that do not materially impair the use of the property subject
thereto in their respective businesses as presently conducted), any of the properties or assets (whether tangible or intangible)
of TECHTOM;

 

		(iv)	Acquire any material properties or assets or sell, assign, transfer, convey, lease or otherwise
dispose of any of the material properties or assets (except for fair consideration in the ordinary course of business consistent
with past practice) of TECHTOM;

 

		(v)	Enter into any commitment for capital expenditures out of the ordinary course;

 

		(vi)	Permit TECHTOM to enter into any transaction or to make or enter into any Contract which by reason
of its size or otherwise is not in the ordinary course of business consistent with past practice;

 

		(vii)	Permit TECHTOM to enter into or agree to enter into any merger or consolidation with any corporation
or other entity, and not engage in any new business or invest in, make a loan, advance or capital contribution to or otherwise
acquire the securities of any other party;

 

		(viii)	Agree to do anything prohibited by this Section 6.2 or anything which would make any of the representations
and warranties of the Sellers in this Agreement or any other agreement referenced herein untrue or incorrect in any material respect
as of any time through and including the Closing.

 

		6.3	Other Actions.

 

Each of the Sellers
and the Purchaser shall use its best efforts to (i) take all actions necessary or appropriate to consummate the transactions contemplated
by this Agreement, and (ii) cause the fulfillment at the earliest practicable date of all of the conditions to their respective
obligations to consummate the transactions contemplated by this Agreement.

 

		6.4	Tax Matters.

 

		(a)	Tax Periods Ending on or Before the Closing Date.

 

The Sellers shall prepare
or cause to be prepared and file or cause to be filed all Tax Returns for TECHTOM for all periods ending on or prior to the Closing
Date which are filed after the Closing Date as soon as practicable and prior to the date due (including any proper extensions thereof).

 

     

     

    

 

		(b)	Tax Periods Beginning Before and Ending After the Closing Date.

 

TECHTOM or the Purchaser
shall prepare or cause to be prepared and file or cause to be filed any Tax Returns of TECHTOM for Tax periods that begin before
the Closing Date and end after the Closing Date.

 

		6.5	Securities Law Filings

 

Purchaser shall make,
in a timely manner, all filings under applicable federal and state securities laws necessary in order to assure that exemptions
from registration are available for the transactions hereunder. In addition, Purchaser shall pay all expenses related to federal
securities law filings (attorney fees, auditor fees, EDGAR filer fees) beginning on the date of this Agreement.

 

 

Article
VII CONDITIONS TO CLOSING

 

		7.1	Conditions Precedent to Obligations of Purchaser.

 

The obligation of the
Purchaser to consummate the transactions contemplated by this Agreement is subject to the fulfillment, on or prior to the Closing
Date, of each of the following conditions (any or all of which may be waived by the Purchaser in whole or in part to the extent
permitted by applicable law):

 

		(a)	all representations and warranties of the Sellers contained herein shall be true and correct as
of the date hereof;

 

		(b)	the Sellers shall have performed and complied in all material respects with all obligations and
covenants required by this Agreement to be performed or complied with by them on or prior to the Closing Date;

 

		(c)	the Sellers shall have obtained all consents and waivers with respect to the transactions contemplated
by this Agreement;

 

		(d)	no legal proceedings shall have been instituted or threatened or claim or demand made against the
Sellers, TECHTOM, or the Purchaser seeking to restrain or prohibit or to obtain substantial damages with respect to the consummation
of the transactions contemplated hereby, and there shall not be in effect any order by a governmental body of competent jurisdiction
restraining, enjoining or otherwise prohibiting the consummation of the transactions contemplated hereby;

 

		(e)	the Purchaser shall have received an agreement, executed by TECHTOM, agreeing to repay the Purchaser
for any and all payments that the Purchaser directly advanced to (and only at the request of) TECHTOM or indirectly advanced on
behalf of (and only at the request of) TECHTOM which advances, if any, were made prior to the Closing Date in connection with TECHTOM’s
preparation of the Required Financial Statements in the form and substance described in Section 4.7;

 

     

     

    

 

		(f)	the Purchaser shall have received the Required Financial Statements in the form and substance described
in Section 4.7;

 

		(g)	the Purchaser shall have received the legal confirmation letter required by Section 8.1(c) and
a separate legal confirmation letter from Purchaser’s counsel confirming the enforceability of this Agreement and the obligations
of the Seller hereunder; and

 

		(h)	the Purchaser shall have or have immediate access to readily available funds in an amount equal
to at least the Cash Consideration, the source of which funds may be the proceeds of the operational business of the Purchaser,
or its subsidiaries, the fund raising efforts of the Purchaser, or its subsidiaries, or otherwise, and it is understood by all
Parties that the Purchaser does not currently have such readily available funds.

 

		7.2	Conditions Precedent to Obligations of the Sellers.

 

The obligations of
the Sellers to consummate the transactions contemplated by this Agreement are subject to the fulfillment, prior to or on the Closing
Date, of each of the following conditions (any or all of which may be waived by the Sellers in whole or in part to the extent permitted
by applicable law):

 

		(a)	all representations and warranties of the Purchaser contained herein shall be true and correct
as of the date hereof;

 

		(b)	the Purchaser shall have performed and complied in all material respects with all obligations and
covenants required by this Agreement to be performed or complied with by Purchaser on or prior to the Closing Date;

 

		(c)	since the Sellers acknowledge and agree that upon consolidation of TECHTOM and the Purchaser it
will be in all Parties’ interest to avoid any third party efforts to take over the Purchaser or influence its management
or policies, the Purchaser shall have issued the 1,000,000 shares of its Series A Voting Preferred Stock to Michael Mo in accordance
with the authority vested in the Purchaser by its shareholders as set forth in the Purchaser’s definitive Information Statement
on Form 14C filed on December 4, 2019;

 

		(d)	no legal proceedings shall have been instituted or threatened or claim or demand made against the
Sellers, TECHTOM, or the Purchaser seeking to restrain or prohibit or to obtain substantial damages with respect to the consummation
of the transactions contemplated hereby, and there shall not be in effect any order by a governmental body of competent jurisdiction
restraining, enjoining or otherwise prohibiting the consummation of the transactions contemplated hereby; and

 

     

     

    

 

 

		(e)	the Purchaser and TECHTOM shall have delivered employment agreements for each of the employees
set forth on Schedule 3 hereof, and which employment agreements shall be effective as of the Closing Date and shall have
been executed by TECHTOM and the Purchaser with respect to the obligations of the Purchaser contemplated therein.

 

Article
VIII DOCUMENTS TO BE DELIVERED

 

		8.1	Documents to be Delivered by the Sellers.

 

At or prior to the
Closing, the Sellers shall deliver, or cause to be delivered, to the Purchaser the following:

 

		(a)	This Agreement duly executed by Sellers;

 

		(b)	certificates representing the TT Stock, duly endorsed in blank or accompanied by stock transfer
powers and with all requisite stock transfer tax stamps attached;

 

		(c)	a legal confirmation letter of TECHTOM’s counsel confirming (i) the valid existence and compliance
with the laws of its jurisdiction, (ii) all necessary actions, consent and waivers have been taken or received to execute and deliver
this Agreement and perform all obligations hereunder, and (iii) this Agreement constitutes the legal, valid, and binding obligation
enforceable against TECHTOM and the Sellers; and

 

		(d)	such other documents as the Purchaser may reasonably request, including the Escrow Agreement.

 

		8.2	Documents and Funds to be Delivered by the Purchaser.

 

At or prior to the
Closing, the Purchaser shall deliver to the Sellers the following:

 

		(a)	This Agreement duly executed by Purchaser.

 

		(b)	The payments and issuances required by Section 2.2 hereof; and

 

		(c)	such other documents as the Sellers may reasonably request, including the Escrow Agreement.

 

 

Article
IX INDEMNIFICATION

 

9.1    
Indemnification. Each individual Seller hereby agrees to indemnify and hold the Purchaser, and its shareholders,
directors, officers, employees, affiliates, agents, representatives and permitted assigns, harmless from and against any losses,
liabilities, obligations, damages, costs and expenses (collectively, “Losses), directly or indirectly, arising from, based
upon, attributable to or resulting from any of the following: (i) any inaccuracy in or breach or non-performance of any of the
representations, warranties, covenants or agreements made by Sellers in this Agreement; (ii) the failure of Sellers to perform
fully any covenant, provision or agreement to be performed or observed by it pursuant to this Agreement; (iii) the conduct of TECHTOM
prior to the Closing Date; provided, however, that the foregoing shall not apply unless the Purchaser makes a claim for indemnification
against the Sellers within five (5) years after the execution date of this Agreement.

 

     

     

    

 

9.2       Limitation.
Except in the case of Losses arising from a Seller’s fraud or willful and intentional breach, the indemnification provided
hereunder by the Sellers shall be limited to the Escrowed Funds. Furthermore, the Purchaser, to the extent possible, shall take
all reasonable steps to mitigate all losses, costs, expenses and damages after becoming aware of any event which could reasonably
be expected to give rise to any Losses that are indemnifiable or recoverable hereunder.

 

 

Article
X MISCELLANEOUS

 

		10.1	Survival of Representations and Warranties.

 

The parties hereto
hereby agree that the representations and warranties contained in this Agreement or in any certificate, document or instrument
delivered in connection herewith, shall survive the execution and delivery of this Agreement, and the Closing hereunder, regardless
of any investigation made by the parties hereto, and continue in full force and effect for a period of one year.

 

		10.2	Expenses.

 

The Sellers and the
Purchaser shall each bear its own expenses incurred in connection with the negotiation and execution of this Agreement and each
other agreement, document and instrument contemplated by this Agreement and the consummation of the transactions contemplated hereby
and thereby. The Purchaser shall pay for all audit-related expenses after the Closing or as needed in preparation for Closing.

 

All sales, use, transfer,
intangible, recordation, documentary stamp or similar Taxes or charges, of any nature whatsoever, applicable to, or resulting from,
the transactions contemplated by this Agreement shall be borne by the Sellers.

 

		10.3	Further Assurances.

 

The Sellers and the
Purchaser each agrees to execute and deliver such other documents or agreements and to take such other action as may be reasonably
necessary or desirable for the implementation of this Agreement and the consummation of the transactions contemplated hereby.

 

		10.4	Governing Law; Submission to Jurisdiction.

 

This Agreement shall
be governed by and construed in accordance with the laws of the United States of America and the State of New York, both substantive
and remedial, without regard to New York conflicts of law principles. Any judicial proceeding brought against any of the parties
to this Agreement or any dispute arising out of this Agreement or any matter related hereto shall be brought in the courts of the
State of New York, New York County, or in the United States District Court for the Southern District of New York and, by its execution
and delivery of this Agreement, each party to this Agreement accepts the jurisdiction of such courts. The foregoing consent to
jurisdiction shall not be deemed to confer rights on any person other than the parties to this Agreement

 

     

     

    

 

		10.5	Entire Agreement; Amendments and Waivers.

 

This Agreement represents
the entire understanding and agreement between the parties hereto with respect to the subject matter hereof and can be amended,
supplemented or changed, and any provision hereof can be waived, only by written instrument making specific reference to this Agreement
signed by the party against whom enforcement of any such amendment, supplement, modification or waiver is sought. No action taken
pursuant to this Agreement, including without limitation, any investigation by or on behalf of any party, shall be deemed to constitute
a waiver by the party taking such action of compliance with any representation, warranty, covenant or agreement contained herein.
The waiver by any party hereto of a breach of any provision of this Agreement shall not operate or be construed as a further or
continuing waiver of such breach or as a waiver of any other or subsequent breach. No failure on the part of any party to exercise,
and no delay in exercising, any right, power or remedy hereunder shall operate as a waiver thereof, nor shall any single or partial
exercise of such right, power or remedy by such party preclude any other or further exercise thereof or the exercise of any other
right, power or remedy. All remedies hereunder are cumulative and are not exclusive of any other remedies provided by law.

 

		10.6	Counterparts.

 

This Agreement may
be executed in any number of counterparts, each of which shall be enforceable against the parties actually executing such counterparts,
and all of which together shall constitute one instrument. In the event that any signature is delivered by facsimile transmission,
such signature shall create a valid and binding obligation of the party executing (or on whose behalf such signature is executed)
with the same force and effect as if such facsimile signature page were an original thereof.

 

		10.7	Notices.

 

All notices and other
communications under this Agreement shall be in writing and shall be deemed given when delivered personally, mailed by certified
mail, return receipt requested, or via recognized overnight courier service with all charges prepaid or billed to the account of
the sender to the parties (and shall also be transmitted by facsimile to the parties receiving copies thereof) at the following
addresses (or to such other address as a party may have specified by notice given to the other party pursuant to this provision):

 

		(a)	Purchaser:

 

KULR Technology Group, Inc.

Attention: Michael Mo, CEO

1999 S. Bascom Ave.

Suite 700

Campbell, CA 95008

 

		(b)	Sellers:

 

As set forth on Schedule 1

 

 

		10.8	Binding Effect; Assignment; Severability

 

This Agreement shall
be binding upon and inure to the benefit of the parties and their respective successors and permitted assigns. Nothing in this
Agreement shall create or be deemed to create any third party beneficiary rights in any person or entity not a party to this Agreement
except as provided below. No assignment of this Agreement or of any rights or obligations hereunder may be made by either the Sellers
or the Purchaser (by operation of law or otherwise) without the prior written consent of the other parties hereto and any attempted
assignment without the required consents shall be void.

 

If any provision of
this Agreement is invalid or unenforceable, the balance of this Agreement shall remain in effect.

 

 

 

[signature page(s) follow]

 

 

     

     

    

 

IN WITNESS WHEREOF, the parties hereto have
executed or caused to be duly executed this Securities Purchase Agreement as of the date first set forth above.

 

	 	KULR TECHNOLOGY GROUP, INC.	 	 
	 	 	 	 	 	 
	 	 	 	 	 	 
	 	By:		 	 
	 	 	Name:	Michael Mo	 	 
	 	 	Title:	Chief Executive Officer	 	 
	 	 	 	 	 	 
	 	SELLERS:	 	 
	 	 	 	 	 	 
	 	 	  (identify Seller)	 
	 	 	 	 	 	 
	 	 	 	 	 	 
	 	By:		 	 
	 	 	Name:	Naoki Tomita	 	 
	 	 	Title:	President	 	 
	 	 	 	 	 	 
	 	 	 	 	 	 
		 	 (identify Seller)	 
	 	 	 	 	 	 
	 	 	 	 	 	 
	 	By:	 	 	 
	 	 	Name:	 	 	 
	 	 	Title:	 	 	 
	 	 	 	 	 	 
	 	 	 	 	 	 
	 	 	 (identify Seller)	 
	 	 	 	 	 	 
	 	 	 	 	 	 
	 	By:		 	 
	 	 	Name:	 	 	 
	 	 	Title:	 	 	 
	 	 	 	 	 	 
	 	 	 	 	 	 
	 	 	 (identify Seller)	 
	 	 	 	 	 	 
	 	 	 	 	 	 
	 	By:		 	 
	 	 	Name:	 	 	 
	 	 	Title:	 	 	 

 

     

     

    

 

SCHEDULE 1

 

Allocation of Cash Consideration

 

	Seller/Address for Notices	TT Stock/Percentage	$ Allocation of Cash Consideration
	Naoki Tomita
 
 1-45-7 Fujimoto Building 2F
 Nishihara , Shibuya-ku ,

                                                                                 Tokyo 151-0066 JAPAN
	1565 / 1565	$1,700,000(100%)

 

 

Allocation of KUTG Stock

 

	Seller/Address for Notices	TT Stock/Percentage	$ Allocation of Cash Consideration
	Naoki Tomita
 
 1-45-7 Fujimoto Building 2F
 Nishihara , Shibuya-ku , 

                                                                                Tokyo 151-0066 JAPAN
 

	1565 / 1565	$800,000 (80%)
	
        Bingwei YAO

        

        901 , Building 18 ,

        388 Furongjiang Road ,

        Shanghai ,China

         
	0 / 1565	$200,000 (20%)

 

 

Escrowed Funds Allocation

 

	Seller	Percentage  	$ Allocation of Escrowed Funds
	Naoki Tomita
 
 1-45-7 Fujimoto Building 2F
 Nishihara , Shibuya-ku ,

                                                                                Tokyo 151-0066 JAPAN
 

	100%	$350,000

     

     

    

  

SCHEDULE 2

 

	Stock	Authorized	Outstanding
	Common stock	500,000,000	78,966,105
	Series A Preferred Stock	1,000,000	0 (except that 1,000,000 shares have been authorized to be issued to Michael Mo)
	Series B Preferred Stock	31,000	30,858
	Series C Convertible Preferred Stock	100	Upon Closing, 100
	Series D Convertible Preferred Stock	Up to $10,000,000 worth	Upon Closing, up to $10,000,000 worth

 

 

SCHEDULE 3

 

 

		(i)	Naoki Tomita;

 

		(ii)	Kenichi Komatsu;

 

		(iii)	Katsuhiko Kanda;

 

		(iv)	Tetsuya Uehara; and

 

		(v)	Yoji Nagata

 

 

     

     

    

 

CERTIFICATE OF DESIGNATION

OF

SERIES C CONVERTIBLE PREFERRED STOCK

OF

KULR TECHNOLOGY GROUP, INC.

to be filed with the Secretary of State

of the State of Delaware

on or about [*], 2019

 

KULR TECHNOLOGY GROUP,
INC. (the “Corporation”), a corporation organized and existing under the laws of Delaware, does hereby certify that,
pursuant to authority conferred upon the Board of Directors of the Corporation by the Certificate of Incorporation, as amended,
of the Corporation, and the Board of Directors of the Corporation, has adopted resolutions (a) authorizing the issuance of up to
100 shares of preferred “C” stock, $0.0001 par value per share (individually or collectively the “Preferred C
Stock”), of the Corporation and (b) providing for the designations, preferences and relative participating, optional or other
rights, and the qualifications, limitations or restrictions thereof, as follows:

 

		1.	Stated Value. Each share of Preferred C Stock shall have a stated value of $10,000.00 ("Stated
Value").

 

		2.	Voting. The holders of shares of Series C Preferred shall have full voting rights and powers,
and, except as may be otherwise provided by law, shall vote together with all other classes and series of the stock of the Corporation
as a single class on all actions to be taken by the stockholders of the Corporation. Each holder of shares of Series C Preferred
shall be entitled to the number of votes equal to the number of shares of Common Stock into which the shares of Series C Preferred
held by such holder could be converted on the record date for the vote which is being taken. Fractional votes shall not, however,
be permitted and, with respect to each holder of Series C Preferred, any fractional voting rights resulting from the above (after
aggregating all shares of Common Stock into which shares of Series C Preferred held by a holder could be converted) shall be rounded
to the nearest whole number (with one-half being rounded upward).

 

		3.	Dividend Rights. Holders of the Preferred C Stock shall not be entitled to receive dividends.

 

		4.	Preference.

 

		a.	In the event of any Liquidity Event, distributions to stockholders of the Corporation shall be
made in the following manner: Each holder of a share of Preferred C Stock shall be entitled to receive, subject to the prior preferences
and other rights of any class or series of stock of the Corporation ranking in the case of a Liquidity Event senior to the Preferred
C Stock, but prior and in preference to any distribution of any of the assets or surplus funds of the Corporation to holders of
Common Stock or any other class or series of stock of the Corporation ranking in the case of a Liquidity Event junior to the Preferred
C Stock, as to the distribution of assets upon any Liquidity Event, by reason of their ownership of such stock, an amount equal
to the Stated Value per share of Preferred C Stock (as adjusted for any stock dividends, combinations or splits with respect to
such shares) (the "Preference Amount"). In the event the funds or assets legally available for distribution to the holders
of shares of Preferred C Stock are insufficient to pay in full the Preference Amount as described above, then all funds or assets
available for distribution to the holders of capital stock shall be paid to the holders of Preferred C Stock pro rata based on
the full Preference Amount to which they are entitled. After payment has been made to the holders of Preferred C Stock of the full
Preference Amount to which such holders shall be entitled, the remaining net assets of the Corporation available for distribution,
if any, shall be distributed pro rata among the holders of Common Stock. "Common Stock" means the common stock, par value
$0.001 per share, of the Corporation and common stock that may hereinafter be authorized and issued by the Corporation and any
share of successor or replacement stock. 

 

     

     

    

 

		b.	A "Liquidity Event" means (i) any liquidation, dissolution or winding up of the
Corporation, whether voluntary or involuntary (a "Liquidation") or (ii) any sale, merger, consolidation, reorganization
or other transaction which results in a Change of Control. A " Change of Control " is deemed to occur when the following
have occurred and are continuing: the acquisition by any person, including any syndicate or group deemed to be a “person”
under Section 13(d)(3) of the Securities Exchange Act of 1934, as amended, of beneficial ownership, directly or indirectly, through
a purchase, merger or other acquisition transaction or series of purchases, mergers or other acquisition transactions of stock
of the Corporation entitling that person to exercise more than 50% of the total voting power of all stock of the Corporation entitled
to vote generally in the election of directors of the Corporation (except that such person will be deemed to have beneficial ownership
of all securities that such person has the right to acquire, whether such right is currently exercisable or is exercisable only
upon the occurrence of a subsequent condition); provided a Change of Control shall not apply to a merger effected solely for the
purposes of changing the domicile or name of the Corporation.

 

		5.	Conversion. The shares of Preferred C Stock shall be subject to the following voluntary
conversion provisions:

 

		a.	Voluntary Conversion. On or after the 181st date after the date of issuance and subject
to the Ownership Limitation, a holder of Preferred C Stock, at its option, may convert all or part of its Preferred C Stock into
that number of Common Stock equal to the product determined by multiplying (i) the number of shares of Preferred C Stock to be
converted; and (ii) the Voluntary Conversion Ratio.

 

		b.	Certain Definitions:

 

		i.	“Ownership Limitation" means, upon any conversion of Preferred C Stock contemplated
by this Section 5, the limitation on the beneficial ownership of Common Stock by the holder such that the number of shares of Common
Stock beneficially owned by the holder shall not exceed 4.99% of the number of shares of the Common Stock outstanding immediately
after giving effect to the issuance of shares of Common Stock issuable upon conversion of such Preferred C Stock shares or of other
derivative securities issuable upon conversion of such Preferred C Stock shares.

 

		ii.	“Voluntary Conversion Ratio” means and shall be equal to Twenty Thousand (20,000) shares
of Common Stock per one (1) share of Preferred C Stock, subject to adjustments as prescribed by Section 5(d) hereof.

 

		c.	Mechanics of Conversion. The conversion of Preferred C Stock shall be conducted in the following
manner:

 

		i.	Holder’s Delivery Requirements. To convert Preferred C Stock into full shares of securities
of the Corporation on any date (the "Conversion Date"), the holder thereof shall (A) transmit by facsimile (or otherwise
deliver, including by email), for receipt on or prior to 5:00 p.m., New York time on such date, a copy of a fully executed notice
of conversion (the "Conversion Notice"), to the Corporation, and (B) with respect to the final conversion of shares of
Preferred C Stock held by any holder, such holder shall surrender to a common carrier for delivery to the Corporation as soon as
practicable following such Conversion Date but in no event later than six (6) business days after such date the original certificates,
if any, representing the shares of Preferred C Stock being converted (or an indemnification undertaking with respect to such shares
in the case of their loss, theft or destruction) (the "Preferred C Stock Certificates"). Upon the Conversion Date, the
rights of the holder as holder of the shares of Preferred C Stock shall cease and the person or persons in whose name or names
any certificate or certificates for shares of securities of the Corporation shall be issuable upon such conversion shall be deemed
to have become the holder or holders of record of the shares of such securities represented thereby. The Corporation shall not
be obligated to issue certificates evidencing the shares of securities issuable upon such conversion unless certificates evidencing
such shares of Preferred C Stock so converted are either delivered to the Corporation or any such transfer agent.

 

     

     

    

 

		ii.	Corporation’s Response. Upon receipt by the Corporation of a facsimile copy of a Conversion
Notice, the Corporation shall immediately send, via facsimile or e-mail, a confirmation of receipt of such Conversion Notice to
such holder and the Corporation or its designated transfer agent (the "Transfer Agent"), as applicable, shall, within
three (3) business days following the date of receipt by the Corporation of the executed Conversion Notice, issue and deliver or
cause to be delivered a certificate or certificates registered in the name of the holder or its designee, for the number of shares
of securities to which the holder shall be entitled.

 

		iii.	Record Holder. The person or persons entitled to receive the shares of securities of the Corporation
issuable upon a conversion of the Preferred C Stock shall be treated for all purposes as the record holder or holders of such shares
of securities on the Conversion Date.

 

		d.	Adjustments of Conversion Ratio. If the Corporation (A) pays a stock dividend or otherwise makes
a distribution or distributions on shares of its Common Stock or any other equity or equity equivalent securities payable in shares
of Common Stock, (B) subdivides outstanding shares of Common Stock into a larger number of shares, (C) combines (including by way
of reverse stock split) outstanding shares of Common Stock into a smaller number of shares, or (D) issues by reclassification of
shares of the Common Stock any shares of capital stock of the Corporation, then in each case the Voluntary Conversion Ratio shall
be multiplied by a fraction of which the numerator shall be the number of shares of Common Stock (excluding treasury shares, if
any) outstanding immediately before such event and of which the denominator shall be the number of shares of Common Stock outstanding
immediately after such event and the number of shares issuable upon conversion of the shares of Preferred C Stock shall be proportionately
adjusted such that the aggregate and applicable conversion ratio of Preferred C Stock shall remain unchanged. Any adjustment made
pursuant to this Section 5(d) shall become effective immediately after the record date for the determination of stockholders entitled
to receive such dividend or distribution and shall become effective immediately after the effective date in the case of a subdivision,
combination or reclassification.

 

		6.	Notices. All notices and other communications hereunder shall be in writing and shall be deemed
given if delivered personally or by facsimile or e-mail or three (3) business days following being mailed by certified or registered
mail, postage prepaid, return-receipt requested, addressed to the holder of record at its address appearing on the books of the
Corporation.

 

		7.	No Fractional Shares. No fractional shares of Common Stock or other securities of the Corporation
or scrip representing fractional shares shall be issued upon any conversion of shares of Preferred C Stock. In lieu of any fractional
shares to which the holder would otherwise be entitled, the Corporation shall pay cash equal to such fraction multiplied by the
fair market value of a share of Common Stock or other securities of the Corporation as determined in good faith by the Board of
Directors, or round-up to the next whole number of shares, at the Corporation’s option.

 

		8.	Amendments. None of the terms of the Preferred C Stock set forth herein may be amended, modified
or waived without the written consent or affirmative vote of the holders of at least a majority of the then outstanding shares
of Preferred C Stock, voting together as a single class.

 

     

     

    

 

		9.	Lost or Stolen Certificates. Upon receipt by the Corporation of evidence satisfactory to the Corporation
of the loss, theft, destruction or mutilation of any Preferred C Stock Certificates representing the shares of Preferred C Stock,
and, in the case of loss, theft or destruction, of any indemnification undertaking by the holder to the Corporation and, in the
case of mutilation, upon surrender and cancellation of the Preferred C Stock Certificates, the Corporation shall execute and deliver
new Preferred C Stock Certificates of like tenor and date; provided, however, that the Corporation shall not be obligated to re-issue
Preferred C Stock Certificates if the holder contemporaneously requests the Corporation to convert such shares of Preferred C Stock
Certificates into Common Stock or other securities of the Corporation.

 

		10.	Exclusion of Other Rights and Privileges. Except as may otherwise be required by law, the Preferred
C Stock shall not have any preferences or relative, participating, optional or other special rights, other than those specifically
set forth in this Certificate of Designation (as such resolution may be amended from time to time pursuant to Section 8 hereof).

 

IN WITNESS WHEREOF, the undersigned has
duly executed this Certificate in the name and on behalf of KULR TECHNOLOGY GROUP, INC., on the [*] day of March, 2019, and the
statements contained herein are affirmed as true under penalty of perjury.

 

	 	KULR TECHNOLOGY GROUP, INC.	 
	 	 	 	 
	 	By:	 	 
	 	 	Michael Mo	 
	 	 	Chief Executive Officer 	 
	 	 	 	 

 

     

     

    

 

ESCROW AGREEMENT

 

This Escrow Agreement,
dated this [*] day of April 2019 (this “Escrow Agreement”), is entered into by and among KULR Technology Group,
Inc., a Delaware corporation (the “Purchaser”), all of the equity owners (collectively the “Sellers”)
of TECHTOM Co., Ltd. (“TECHTOM”) and Sichenzia Ross Ference LLP, as escrow agent (“Escrow Agent”).
Capitalized terms not defined herein shall have the meanings assigned to them in the Securities Purchase Agreement (as defined
herein).

 

RECITALS

 

WHEREAS, the
Parties entered into that certain Securities Purchase Agreement dated April [*], 2019 (the “Securities Purchase Agreement”);

 

WHEREAS, Section
2.2 and Section 2.3 of the Securities Purchase Agreement provides that, at the closing of the transactions contemplated by the
Securities Purchase Agreement (the “Closing”), Three Hundred Fifty Thousand U.S. Dollars ($350,000) shall be
delivered to the Escrow Agent in immediately available funds (the “Escrowed Funds”);

 

WHEREAS, the
Securities Purchase Agreement provides for the deposit of the Escrowed Funds at Closing and the subsequent release of the Escrowed
Funds in accordance with the schedule set forth on Annex A hereto;

 

WHEREAS, the
Securities Purchase Agreement provides that Sellers will indemnify the Purchaser and Purchaser and their respective shareholders,
directors, officers, employees, affiliates, agents, representatives and permitted assigns with respect to any and all liabilities,
losses, damages, costs and expenses (including reasonable attorney’s fees and costs) (collectively, “Losses”)
that arise out of the tax liabilities or otherwise with respect to the filing of TECHTOM’s fiscal year-end tax return (pursuant
to the oblitation set forth in Section 6.4(a) of the Securites Purchase Agreement), and in connection with such indemnification
$100,000 of the Escrowed Funds shall be placed in escrow pursuant to the terms and subject to the conditions of this Escrow Agreement;

 

WHEREAS, the
Securities Purchase Agreement provides that Sellers will indemnify the Purchaser and Purchaser and their respective shareholders,
directors, officers, employees, affiliates, agents, representatives and permitted assigns with respect to any and all Losses upon
the terms and subject to the conditions provided in the Securities Purchase Agreement, and in connection with such indemnification,
$250,000 of the Escrowed Funds shall be placed in escrow pursuant to the terms and subject to the conditions of this Escrow Agreement;

 

WHEREAS, the
Parties hereto acknowledge that the Escrow Agent is not a party to, is not bound by, and has no duties or obligations under Securities
Purchase Agreement, that all references in this Escrow Agreement to the Securities Purchase Agreement is for convenience, and that
the Escrow Agent shall have no implied duties beyond the express duties set forth in this Escrow Agreement; and

 

WHEREAS, the
Parties have agreed to appoint Escrow Agent to hold the Escrowed Funds and Escrow Agent agrees to no other obligation but to hold
and distribute Escrowed Funds, in accordance with the terms and provisions of this Escrow Agreement.

 

NOW, THEREFORE,
in consideration of the promises and agreements of the Parties and for other good and valuable consideration, the receipt and sufficiency
of which is hereby acknowledged, the Parties and Escrow Agent agree as follows:

 

ARTICLE 1

ESCROW DEPOSIT

 

Section 1.1
        Appointment of Escrow Agent. The Parties hereby designate and appoint Escrow Agent as their agent to receive, hold in
escrow, and disburse the Escrowed Funds in accordance with the term of this Escrow Agreement, and Escrow Agent accepts such
appointment.

 

     

     

    

 

 Section 1.2        Receipt and Deposit of the Escrowed Funds and Commencement of Duties.

 

(a)       Upon
execution hereof or upon the Closing (as defined in the Securities Purchase Agreement), Purchaser shall deliver to Escrow Agent
the Escrowed Funds and Escrow Agent shall promptly acknowledge receipt of the Escrowed Funds.

 

(b)       Upon
receipt of the Escrowed Funds by the Escrow Agent, the duties and obligations of the Escrow Agent and the Parties to this Agreement
shall commence.

 

Section 1.3        Procedures
with Respect to Indemnification Claims.

 

(a)       Claim.
If, at any time and from time to time from the date hereof until such date that is twelve (12) months after the date of the Closing
(the “Escrow Period”), Purchaser desires to make a claim against the Escrowed Funds pursuant to the Securities
Purchase Agreement (each, a “Claim”), Purchaser shall deliver a written notice of the Claim (a “Claims
Notice”) to Escrow Agent, with a copy to Sellers, substantially in the form attached hereto as Annex I specifying
the nature of the Claim, the estimated amount of damages to which Purchaser believes it is or may be entitled to under the Securities
Purchase Agreement (the “Claimed Amount”) and Purchaser and/or Purchaser payment delivery instructions.

 

(b)       Response
by the Sellers. Within thirty (30) calendar days after receipt by Escrow Agent of any Claims Notice (“Response Period”),
Sellers shall, with respect to such Claims Notice, by notice to Purchaser and Escrow Agent (a “Response Notice”)
substantially in the form attached hereto as Annex II, either (i) concede liability for the Claimed Amount in whole, or
(ii) deny liability for the Claimed Amount in whole or in part (it being understood that any portion of the Claimed Amount for
which Sellers have not denied liability shall be deemed to have been conceded). If Sellers denies liability in whole or in part,
such Response Notice shall be accompanied by a reasonably detailed description of the basis for such denial. The Claimed Amount
for which Sellers has conceded liability is referred to herein as the “Conceded Amount.” If Sellers has conceded
liability for any portion of the Claimed Amount, Sellers and Purchaser, by joint notice substantially in the form attached hereto
as Annex III, shall instruct Escrow Agent to promptly deliver to Purchaser the amount of remaining Escrowed Funds representing
the Conceded Amount specified in such notice (such joint notice, the “Conceded Amount Notice”); provided,
however, that if Sellers fails to deliver a Response Notice within the thirty (30) calendar day period, Sellers shall be
deemed to have conceded the Claimed Amount in full (the “Deemed Concession”) (and the Claimed Amount in full
of such Deemed Concession shall constitute a “Conceded Amount”) and Escrow Agent shall promptly deliver to Purchaser
the amount of remaining Escrowed Funds representing the Conceded Amount of the Deemed Concession.

 

(c)       Resolutions
of Disputes.

 

(i)       If
Sellers has denied liability for, or otherwise disputes the Claimed Amount, in whole or in part, Sellers and Purchaser, on behalf
of the applicable claimant, shall attempt to resolve such dispute within thirty (30) calendar days. If the Parties resolve such
dispute, they shall deliver to Escrow Agent a Conceded Amount Notice signed by all of the Sellers and Purchaser. Such Conceded
Amount Notice shall instruct Escrow Agent to deliver to the Purchaser the amount, if any, of Escrowed Funds agreed to by both the
Parties in settlement of such dispute.

 

(ii)       If
the Parties fail to resolve such dispute within thirty (30) calendar days after receipt by Escrow Agent of the Response Notice
corresponding to such dispute, the issue of liability for any such dispute with respect to Claims shall be submitted to arbitration
for the purposes of obtaining a final, conclusive and binding decision (the “Final Decision”). Such Final Decision
shall contain the amount, if any, of the Party’s liability for the Claimed Amount as finally determined by such arbitration
(the “Ordered Amount”). The arbitration shall be in conformity with and subject to the applicable rules and
procedures of American Arbitration Association in New York, New York. The arbitration shall be conducted before a panel of three
(3) arbitrators, with one arbitrator to be selected by the Sellers, one by the Purchaser and the third arbitrator to be selected
by the arbitrators selected by the Parties. The Parties agree to be (A) subject to the jurisdiction and venue of the arbitration
in New York, NY, (B) bound by the decision of the arbitrator as the final decision with respect to the dispute, and (C) subject
to the jurisdiction of the federal courts of the United States of America or the courts of the State of New York in each case located
in the County of New York, New York for the purpose of confirmation and enforcement of any award. Upon reaching the Final Decision,
Purchaser shall deliver to Escrow Agent a notice setting forth the Ordered Amount, and any corresponding documentation illustrating
the Final Decision.

 

     

     

    

 

(d)       Payment
of Claims. Escrow Agent shall promptly deliver the applicable amount of remaining Escrowed Funds no later than the fifth (5th)
business day following the determination of a Payment Event (as such term is defined below), to Purchaser from the remaining Escrowed
Funds: (i) following any concession of liability by Sellers, in whole or in part, the Conceded Amount as set forth in the Conceded
Amount Notice; (ii) following any Deemed Concession of liability by Sellers, the Conceded Amount; or (iii) following receipt by
Escrow Agent of any Final Decision, the Ordered Amount (collectively, clauses (i) (ii) and (iii), the “Payment Events”).

 

Section
1.4        Disbursements.

 

(a)       Subject
to adjustments for any disbursements made pursuant to Sections 1.4(b), (c), (d) and (e), upon receipt of joint written notice from
the Sellers and Purchaser, Escrow Agent shall release to Sellers and/or its designees that portion of the Escrowed Funds set forth
in such notice.

 

(b)       Upon
the earlier of termination of this Escrow Agreement pursuant to Section 1.5 hereof or joint written notice from the Sellers
and Purchaser, Escrow Agent shall release from the remaining Escrowed Funds to Sellers and/or its designees, any portion of the
remaining Escrowed Funds then remaining less the aggregate Claimed Amount for all then outstanding claims for any Losses (“Outstanding
Claims”) asserted within the Claims Period.

 

(c)       Upon
receipt of a Conceded Amount Notice with respect to a particular Outstanding Claim, Escrow Agent shall promptly deliver to Purchaser,
the Conceded Amount in accordance with Section 1.3(b) herein.

 

(d)       Upon
receipt of a Final Decision with respect to a particular Outstanding Claim, Escrow Agent shall promptly deliver to Purchaser, as
the case may be, the Ordered Amount, if any, in accordance with Section 1.3(c)(ii) herein. Any court or arbitrator order shall
be accompanied by an opinion of counsel for the presenting party that such order  is final and non-appealable.

 

Section
1.5       Termination. So long as no unresolved Claims Notices remain outstanding, this Escrow Agreement
shall terminate on such date as is twelve (12) months after the date of the Closing (the “Termination Date”),
at which time Escrow Agent is authorized and directed to disburse the remaining Escrowed Funds in accordance with Section 1.4
and this Escrow Agreement shall be of no further force and effect except that the provisions of Sections 3.1 and 3.2
hereof shall survive termination.

 

ARTICLE 2

DUTIES OF THE ESCROW AGENT

 

Section 2.1        Scope
of Responsibility. Notwithstanding any provision to the contrary, Escrow Agent is obligated only to perform the duties specifically
set forth in this Escrow Agreement, which shall be deemed purely ministerial in nature. Under no circumstances will Escrow Agent
be deemed to be a fiduciary to any Party or any other person under this Escrow Agreement. Escrow Agent will not be responsible
or liable for the failure of any Party to perform in accordance with this Escrow Agreement. Escrow Agent shall neither be responsible
for, nor chargeable with, knowledge of the terms and conditions of any other agreement, instrument, or document other than this
Escrow Agreement, whether or not an original or a copy of such agreement has been provided to Escrow Agent; and Escrow Agent shall
have no duty to know or inquire as to the performance or nonperformance of any provision of any such agreement, instrument, or
document. References in this Escrow Agreement to any other agreement, instrument, or document are for the convenience of the Parties,
and Escrow Agent has no duties or obligations with respect thereto. This Escrow Agreement sets forth all matters pertinent to
the escrow contemplated hereunder, and no additional obligations of Escrow Agent shall be inferred or implied from the terms of
this Escrow Agreement or any other agreement.

 

Section
2.2       Attorneys and Agents. Escrow Agent shall be entitled to rely on and shall not be liable for any
action taken or omitted to be taken by Escrow Agent in accordance with the advice of counsel or other professionals retained or
consulted by Escrow Agent. Escrow Agent shall be reimbursed as set forth in Section 3.1 herein for any and all reasonable
compensation (fees, expenses and other costs) paid and/or reimbursed to such counsel and/or professionals. Escrow Agent may perform
any and all of its duties through its agents, representatives, attorneys, custodians, and/or nominees.

 

     

     

    

 

Section 2.3        Reliance.
Escrow Agent shall not be liable for any action taken or not taken by it in accordance with the direction or consent of the Parties
or their respective agents, representatives, successors, or assigns. Escrow Agent shall not be liable for acting or refraining
from acting upon any notice, request, consent, direction, requisition, certificate, order, affidavit, letter, or other paper or
document believed by it to be genuine and correct and to have been signed or sent by the proper person or persons, without further
inquiry into the person’s or persons’ authority. Concurrent with the execution of this Escrow Agreement, the Parties
shall deliver to Escrow Agent authorized signers’ forms in the form of Exhibit A-1 and Exhibit A-2
to this Escrow Agreement.

 

Section
2.4        Right Not Duty Undertaken. The permissive rights of Escrow Agent to do things enumerated in this
Escrow Agreement shall not be construed as duties.

 

Section
2.5       No Financial Obligation. No provision of this Escrow Agreement shall require Escrow Agent to
risk or advance its own funds or otherwise incur any financial liability or potential financial liability in the performance of
its duties or the exercise of its rights under this Escrow Agreement.

 

ARTICLE 3

PROVISIONS CONCERNING ESCROW AGENT

 

Section
3.1        Indemnification. The Parties, jointly and severally, shall indemnify, defend and hold harmless
Escrow Agent from and against any and all loss, liability, cost, damage and expense, including, without limitation, reasonable
attorneys’ fees and expenses or other professional fees and expenses which Escrow Agent may suffer or incur by reason of
any action, claim or proceeding brought against Escrow Agent, arising out of or relating in any way to this Escrow Agreement or
any transaction to which this Escrow Agreement relates, unless such loss, liability, cost, damage or expense shall have been finally
adjudicated to have been directly caused by the willful misconduct or gross negligence of Escrow Agent. The provisions of this
Section 3.1 shall survive the resignation or removal of Escrow Agent and the termination of this Escrow Agreement.

 

Section
3.2        Limitation of Liability. ESCROW AGENT SHALL NOT BE LIABLE, DIRECTLY OR INDIRECTLY, FOR ANY (I)
DAMAGES, LOSSES OR EXPENSES ARISING OUT OF THE SERVICES PROVIDED HEREUNDER, OTHER THAN DAMAGES, LOSSES OR EXPENSES WHICH HAVE BEEN
FINALLY ADJUDICATED TO HAVE DIRECTLY RESULTED FROM ESCROW AGENT’S GROSS NEGLIGENCE OR WILLFUL MISCONDUCT, OR (II) SPECIAL,
INDIRECT OR CONSEQUENTIAL DAMAGES OR LOSSES OF ANY KIND WHATSOEVER (INCLUDING WITHOUT LIMITATION LOST PROFITS), EVEN IF ESCROW
AGENT HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH LOSSES OR DAMAGES AND REGARDLESS OF THE FORM OF ACTION.

 

Section 3.3        Resignation
or Removal. Escrow Agent may resign by furnishing written notice of its resignation to the Parties, and the Parties may remove
Escrow Agent by furnishing to the Escrow Agent a joint written notice of its removal along with payment of all fees and expenses
to which it is entitled through the date of termination. Such resignation or removal, as the case may be, shall be effective thirty
(30) days after the delivery of such notice or upon the earlier appointment of a successor, and Escrow Agent’s sole responsibility
thereafter shall be to safely keep the remaining Escrowed Funds and to deliver the same to a successor escrow agent as shall be
appointed by the Parties, as evidenced by a joint written notice filed with Escrow Agent or in accordance with a court order. If
the Parties have failed to appoint a successor escrow agent prior to the expiration of thirty (30) days following the delivery
of such notice of resignation or removal, Escrow Agent may petition any court of competent jurisdiction for the appointment of
a successor escrow agent or for other appropriate relief, and any such resulting appointment shall be binding upon the Parties.

 

Section 3.4        Compensation.
The Parties agree that Purchaser will pay the fees, expenses or other amounts owed to Escrow Agent hereunder, which initial fee
shall be $5,000. The fee agreed upon for the services rendered hereunder is intended as full compensation for Escrow Agent's services
as contemplated by this Escrow Agreement; provided, however, that in the event that the conditions for the disbursement
of funds under this Escrow Agreement are not fulfilled, or Escrow Agent renders any service not contemplated in this Escrow Agreement,
or there is any assignment of interest in the subject matter of this Escrow Agreement, or any material modification hereof, or
if any material controversy arises hereunder, or Escrow Agent is made a party to any litigation pertaining to this Escrow Agreement
or the subject matter hereof, then Escrow Agent shall be compensated for such extraordinary services and reimbursed for all reasonable
costs and expenses, including reasonable attorneys’ fees and expenses, occasioned by any such delay, controversy, litigation
or event.

 

     

     

    

 

Section
3.5         Disagreements. If any conflict, disagreement or dispute arises between, among, or involving any
of the parties hereto concerning the meaning or validity of any provision hereunder or concerning any other matter relating to
this Escrow Agreement, or Escrow Agent is in doubt as to the action to be taken hereunder, Escrow Agent is authorized to retain
the remaining Escrowed Funds until Escrow Agent (a) receives a final non-appealable order of a court of competent jurisdiction
or a final non-appealable arbitration decision directing delivery of the remaining Escrowed Funds, (b) receives a written agreement
executed by each of the parties involved in such disagreement or dispute directing delivery of the remaining Escrowed in which
event Escrow Agent shall be authorized to disburse the Escrowed Funds in accordance with such final court order, arbitration decision,
or agreement, or (c) files an interpleader action in any court of competent jurisdiction, and upon the filing thereof, Escrow Agent
shall be relieved of all liability as to the remaining Escrowed Funds and shall be entitled to recover attorneys’ fees, expenses
and other costs incurred in commencing and maintaining any such interpleader action. Escrow Agent shall be entitled to act on any
such agreement, court order, or arbitration decision without further question, inquiry, or consent.

 

Section 3.6        Merger
or Consolidation. Any corporation or association into which Escrow Agent may be converted or merged, or with which it may be
consolidated, or to which it may sell or transfer all or substantially all of its corporate trust business and assets as a whole
or substantially as a whole, or any corporation or association resulting from any such conversion, sale, merger, consolidation
or transfer to which Escrow Agent is a party, shall be and become the successor escrow agent under this Escrow Agreement and shall
have and succeed to the rights, powers, duties, immunities and privileges as its predecessor, without the execution or filing of
any instrument or paper or the performance of any further act.

 

Section
3.7        Attachment of Escrow; Compliance with Legal Orders. In the event that any remaining Escrowed
Funds shall be attached, garnished or levied upon by any court order, or the delivery thereof shall be stayed or enjoined by an
order of a court, or any order, judgment or decree shall be made or entered by any court order affecting the remaining Escrowed
Funds, Escrow Agent is hereby expressly authorized, in its sole discretion, to respond as it deems appropriate or to comply with
all writs, orders or decrees so entered or issued, or which it is advised by legal counsel of its own choosing is binding upon
it, whether with or without jurisdiction. In the event that Escrow Agent obeys or complies with any such writ, order or decree
it shall not be liable to any of the Parties or to any other person, firm or corporation, should, by reason of such compliance
notwithstanding, such writ, order or decree be subsequently reversed, modified, annulled, set aside or vacated.

 

Section
3.8         Force Majeure. Escrow Agent shall not be responsible or liable for any failure or delay in the performance
of its obligation under this Escrow Agreement arising out of or caused, directly or indirectly, by circumstances beyond its reasonable
control, including, without limitation, acts of God; earthquakes; fire; flood; wars; acts of terrorism; civil or military disturbances;
sabotage; epidemic; riots; interruptions, loss or malfunctions of utilities, computer (hardware or software) or communications
services; accidents; labor disputes; acts of civil or military authority or governmental action; it being understood that Escrow
Agent shall use commercially reasonable efforts which are consistent with accepted practices in the banking industry to resume
performance as soon as reasonably practicable under the circumstances.

 

ARTICLE 4

MISCELLANEOUS

 

Section 4.1        Successors
and Assigns. This Escrow Agreement shall be binding on and inure to the benefit of the Parties and Escrow Agent and their respective
successors and permitted assigns. No other persons shall have any rights under this Escrow Agreement. No assignment of the interest
of any of the Parties shall be binding unless and until written notice of such assignment shall be delivered to the other Party
and Escrow Agent and shall require the prior written consent of the other Party and Escrow Agent (such consent not to be unreasonably
withheld).

 

     

     

    

 

Section
4.2        Escheat. The Parties are aware that under applicable state law, property which is presumed abandoned
may under certain circumstances escheat to the applicable state. Escrow Agent shall have no liability to the Parties, their respective
heirs, legal representatives, successors and assigns, or any other party, should any or all of the Escrowed Funds escheat by operation
of law.

 

Section
4.3         Notices. All notices, requests, demands, and other communications required under this Escrow
Agreement (each, a “Notice”) shall be in writing, in English, and shall be deemed to have been duly given if
delivered (a) personally, (b) by facsimile transmission with written confirmation of receipt, (c) by overnight delivery with a
reputable national overnight delivery service, or (d) by mail or by certified mail, return receipt requested, and postage prepaid.
If any Notice is mailed, it shall be deemed given five (5) business days after the date such notice is deposited in the United
States mail. Any Notice given shall be deemed given upon the actual date of such delivery. If any Notice is given to a party, it
shall be given at the address for such party set forth below. It shall be the responsibility of the Parties to notify Escrow Agent
and the other Party in writing of any name or address changes. In the case of any Notice delivered to Escrow Agent, such Notice
shall be deemed to have been given on the date received by the Escrow Agent.

 

		(a)	If to Sellers, to:

 

See Securities
Purchase Agreement

 

		(b)	If to Purchaser or Purchaser, to:

 

KULR Technology
Group, Inc.

1999 S. Bascom
Ave., Suite 700

Campbell, CA
95008

Attention:
Michael Mo, CEO

 

With a copy
(which shall not constitute notice) to:

 

Sichenzia Ross
Ference LLP

1185 Avenue
of the Americas, 37th Floor

New York, New
York 10036

Fax: (212)
930-9725

Attention:
Jay K. Yamamoto, Esq.

 

		(c)	If to Escrow Agent:

 

Sichenzia Ross Ference LLP

1185 Avenue
of the Americas, 37th Floor

New York, New
York 10036

Fax: (212)
930-9725

Attention:
Darrin M Ocasio, Esq.

 

With a copy
to Sellers, if Purchaser is giving the Notice to Escrow Agent

With a copy
to Purchaser, if Sellers is giving the Notice to Escrow Agent

 

Section 4.4        Governing
Law. This Escrow Agreement, and all claims or causes of action that may be based upon, arise out of or relate to this Escrow
Agreement will be construed in accordance with and governed by the internal laws of the State of New York applicable to agreements
made and to be performed entirely within such State without regard to conflicts of laws principles thereof. Any dispute arising
under or in connection with any matter of any nature (whether sounding in contract or tort) relating to or arising out of this
Escrow Agreement, shall be resolved exclusively by arbitration. The arbitration shall be in conformity with and subject to the
applicable rules and procedures of the American Arbitration Association in New York, NY. The arbitration shall be conducted before
a panel of three (3) arbitrators, with one arbitrator to be selected by the Sellers, one by the Purchaser and the third arbitrator
to be selected by the arbitrators selected by the Parties. The Parties agree to be (a) subject to the exclusive jurisdiction and
venue of the arbitration in New York County, City of New York, State of New York (b) bound by the decision of the arbitrator as
the final decision with respect to the dispute, and (c) subject to the jurisdiction of both of the federal courts of the United
States of America or the courts of the State of New York for the purpose of confirmation and enforcement of any award.

 

     

     

    

 

Section 4.5        Entire
Agreement. This Escrow Agreement, together with the Securities Purchase Agreement, sets forth the entire agreement and understanding
of the Parties related to the Escrowed Funds.

 

Section 4.6       Amendment.
This Escrow Agreement may be amended, modified, superseded, rescinded, or canceled only by a written instrument executed by the
Parties and Escrow Agent.

 

Section 4.7       Waivers.
The failure of any party to this Escrow Agreement at any time or times to require performance of any provision under this Escrow
Agreement shall in no manner affect the right at a later time to enforce the same performance. A waiver by any party to this Escrow
Agreement of any such condition or breach of any term, covenant, representation, or warranty contained in this Escrow Agreement,
in any one or more instances, shall neither be construed as a further or continuing waiver of any such condition or breach nor
a waiver of any other condition or breach of any other term, covenant, representation, or warranty contained in this Escrow Agreement.

 

Section 4.8       Headings.
Section headings of this Escrow Agreement have been inserted for convenience of reference only and shall in no way restrict or
otherwise modify any of the terms or provisions of this Escrow Agreement.

 

Section 4.9       Counterparts.
This Escrow Agreement may be executed in one or more counterparts, each of which when executed shall be deemed to be an original,
and such counterparts shall together constitute one and the same instrument. Counterparts delivered by facsimile, e-mail or other
electronic transmission shall be deemed to have the same legal effect as delivery of an original signed copy of this Agreement.

 

 

[Signature Page Follows]

 

 

     

     

    

 

IN WITNESS WHEREOF,
this Escrow Agreement has been duly executed as of the date first written above.

 

	PURCHASER	 
	KUlr technology group, inc.
	 	 	 
	 	 	 
	By:	 	 
	Name: 	 	 
	Title: 	 	 
	 	 	 
	 	 	 
	SELLERS	 
	 	 	 
	 	 	 
	 	 
	Name:	 	 
	 	 	 
	 	 	 
	 	 
	Name:	 	 
	 	 	 
	 	 	 
	 	 
	Name:	 	 
	 	 	 
	 	 	 
	Escrow Agent
	SICHENZIA ROSS FERENCE LLP
	 	 	 
	By:	 	 
	Name:	 	 
	Title:	 	 

 

     

     

    

 

Annex A

 

Conditions to Release of Escrowed Funds

 

Up to $100,000 of the Escrowed Funds

 

		·	upon filing of the fiscal year-end tax returns, pursuant to the obligations set forth in Section
6.4(a) of the Securities Purchase Agreement, and, after payment of any tax liability, if any, the remainder of the $100,000 of
such Escrowed Funds set aside for this purpose shall be released to the Sellers upon filing of such tax returns.

 

Up to $250,000 of the Escrowed Funds

 

		·	up to $250,000 of indemnification obligations of Sellers under Article
IX of the Securities Purchase Agreement and, after payment of such obligations, if any, the remainder of the $250,000 of such Escrowed
Funds set aside for this purpose shall be released to the Sellers after twelve (12) months following the date of the Closing.Exhibit

EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT (the “Agreement”), entered into and effective as of the 1st day of July, 2019 (the “Effective Date”), by and between First Financial Bank, N.A. (the “Bank”), a national banking association organized under the laws of the United States of America, First Financial Corporation (the “Corporation”), a corporation formed under the laws of the State of Indiana and a financial holding company (jointly referred to herein as the “Company”) and Norman L. Lowery (the “Employee”), a resident of the State of Indiana.
WHEREAS, the Employee has heretofore been employed by the Bank as its President and Chief Executive Officer and by the Corporation as its President and Chief Executive Officer and has performed valuable services for both the Bank and the Corporation; and
WHEREAS, the Company desires to enter into this Agreement with the Employee in order to assure continuity of management and to reinforce and encourage the continued attention and dedication of the Employee to his assigned duties; and
WHEREAS, the parties desire, by this writing, to set forth the continuing employment relationship between the Company and the Employee.
NOW, THEREFORE, in consideration of the premises contained herein and for other good and valuable consideration, the receipt and adequacy of which are hereby acknowledged, the Employee and the Company agree as follows:
1.Employment.  The Employee is employed as the President and Chief Executive Officer of the Bank and as the President and Chief Executive Officer of the Corporation.  The Employee shall render such administrative and management services for the Company as are currently rendered and as are currently performed by persons situated in a similar executive capacity.  The Employee shall also promote, by entertainment or otherwise, as and to the extent permitted by law, the business of the Company.  The Employee’s other duties shall be such as the boards of directors of the Bank or the Corporation may, from time to time, reasonably direct, including normal duties as an officer of the Bank and the Corporation.  During the term of this Agreement, the Employee shall be nominated and elected to serve as a director of the Bank or of any successor to the Bank and shall be nominated to serve as a director of the Corporation.

2.Base Compensation.  The Company agrees to pay the Employee during the term of this Agreement a base salary at the rate of $686,527.30 per annum, payable in cash not less frequently than monthly.  Such base salary shall be effective and calculated commencing as of the January 1, 2019.  The Company may consider and declare from time to time increases in the base salary it pays the Employee.  Prior to a Change in Control (as hereinafter defined), the Company may also declare decreases in the base salary it pays the Employee if the operating results of the Company are significantly less favorable than those for the fiscal year ending December 31, 2018, and the Company makes similar decreases in the base salary it pays to other executive officers of the Company.  After a Change in Control, the Company shall consider and declare salary increases in base salary based upon the following standards:

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(a)Inflation;

(b)Adjustments to the base salaries of other senior management personnel;

(c)Past performance of the Employee; and

(d)The contribution which the Employee makes to the business and profits of the Company during the term of this Agreement.

3.Bonuses.  The Employee shall participate in any year-end bonus granted to other employees.  The Employee shall further participate in an equitable manner with all other senior management employees of the Company in any discretionary bonuses that the Company may award from time to time to senior management employees.  No other compensation provided for in this Agreement shall be deemed a substitute for the Employee’s right to participate in such discretionary bonuses.

4.Benefits.

(a)Participation in Retirement, Medical and Other Benefit Plans.  During the term of this Agreement, the Employee shall be eligible to participate in the following benefit plans; group hospitalization, disability, health, dental, sick leave, retirement, supplemental retirement, pension, 401(k), employee stock ownership plan, and all other present or future qualified and/or nonqualified plans provided by the Company generally, or to executive officers of the Bank or the Corporation, which benefits, taken as a whole, must be at least as favorable as those in effect on the Effective Date, unless the continued operation of such plans or changes in the accounting, legal or tax treatment of such plans would adversely affect the Company’s operating results or financial condition in a material way, and the Company concludes that modifications to such plans are necessary to avoid such adverse effects and such modifications apply consistently to all employees participating in the affected plans.  In addition, the Employee shall be eligible to participate in any fringe benefits which are or may become available to the Company’s senior management employees, including, for example, any cash or equity incentive, bonus or long-term compensation plan, any insurance programs (including, but not limited to, any group and executive life insurance programs), and any other benefits which are commensurate with the responsibilities and functions to be performed by the Employee under this Agreement.  

In addition, at the Company’s expense, the Employee shall be entitled to a life insurance policy insuring his life in the maximum amount established by the Company’s group life insurance plan from time to time (which amount shall be no less than three times his annual salary subject to a $350,000.00 maximum).  Alternatively and in place of the policy of life insurance insuring his life only, the Employee may, in his sole and absolute discretion, obtain a joint life policy insuring the lives of the Employee and his spouse in such amount of life insurance as may be obtained at the same cost to the Company as a life insurance policy 

2

insuring the Employee’s life only (such life insurance policy, whether insuring the life of the Employee only or the life of the Employee and his spouse, hereinafter referred to as the “First Policy”).  During and subsequent to the term of this Agreement the Company shall pay all premiums on the First Policy which are required to keep the First Policy in full force and effect until the premiums on the First Policy are fully paid and no additional premium is due or until the death benefit of the First Policy is paid and received by the beneficiary or beneficiaries of the First Policy (hereinafter “First Policy Premium Payments”).  Alternatively, the Company shall pay or reimburse the First Policy Premium Payments to the Employee or the Trustee of an irrevocable life insurance trust established for such purpose.  The Employee shall also be entitled to an additional life insurance policy at the Company’s expense, insuring his life in an amount established by the Company’s life insurance program for executive officers.  Alternatively and in place of this policy of life insurance insuring his life only, the Employee may, in his sole and absolute discretion, obtain a joint life insurance policy insuring the lives of the Employee and his spouse in such amount of life insurance as may be obtained at the same cost to the Company as a life insurance policy insuring the Employee’s life only (such life insurance policy, whether insuring the life of the Employee only or the life of the Employee and his spouse, hereinafter referred to as the “Second Policy”).  During and subsequent to the term of this Agreement, the Company shall pay all premiums on the Second Policy which are required to keep the Second Policy in full force and effect until the premiums on the Second Policy are fully paid and no additional premium is due or until the death benefit of the Second Policy is paid and received by the beneficiary or beneficiaries of the Second Policy (hereinafter “Second Policy Premium Payments”).  Alternatively, the Company shall pay or reimburse the Second Policy Premium Payments to the Employee or the Trustee of an irrevocable life insurance trust established for such purpose.
All the employee benefits referenced in this subsection 4(a) are collectively referred to hereinafter as “Employee Benefits.”
(b)Benefits After Retirement or Certain Separations from Service.  The Employee and his spouse are both currently eligible for Medicare coverage.  Upon retirement of the Employee at or after attaining age 65 (“Retirement Age”), during and after the term of this Agreement, and upon his Separation from Service as provided elsewhere in this Agreement, including, but not limited to, in subsections 8(a), (b), (d) and (e) and subsections 10(a) and (b), the Company agrees to pay or reimburse the Employee or his Spouse for full supplemental Medicare coverage, at no cost to the Employee or his spouse, at the best level of coverage available which shall include prescription drug coverage for both the Employee and his spouse, until the death of the Employee and his spouse.  In addition, the Company shall continue to pay all premiums on the First Policy and the Second Policy, during and after the term of this Agreement, as provided in paragraph 4(a) above.

(c)Expenses and Membership.  The Employee shall be reimbursed for all reasonable out-of-pocket business expenses which he shall incur in connection with his services under this Agreement, upon substantiation of such expenses in accordance with the policies of the Company.  In addition, the Employee shall be reimbursed for all reasonable 

3

out-of-pocket expenses incurred by him to satisfy his continuing legal education requirements for his license to practice law in the State of Indiana.  So long as the Employee is employed by the Company pursuant to this Agreement, the Employee shall be entitled to continue his memberships in the American, Indiana and Terre Haute Bar Associations, the American Association for Justice, the Indiana Trial Lawyers Association and the Country Club of Terre Haute, and the Company shall continue to pay or reimburse the Employee for the dues and assessments for such memberships.

(d)Automobile.  So long as the Employee is employed by the Company pursuant to this Agreement, the Employee shall be entitled to continue to use a Company-owned automobile of commensurate quality and value as that used by him on the same terms and conditions in effect with respect to such use on the Effective Date of this Agreement.  The Company shall provide and pay the premiums for full insurance coverage on the automobile.  Such insurance coverage shall be no less than the coverage provided on the Effective Date of this Agreement.  The Company shall also pay for the cost of operation, maintenance and repair of the automobile.  All benefits referenced in this subsection 4(d) are collectively referred to hereinafter as “Automobile Benefits.”

(e)Vacation, Sick Leave and Disability.  The Employee shall be entitled to 30 days’ vacation annually and shall be entitled to the same sick leave and disability leave as other executive employees.  The Employee shall not receive any additional compensation on account of his failure to take a vacation or sick leave, and the Employee shall not accumulate unused vacation or sick leave from one fiscal year to the next, except in either case to the extent authorized by the Company or permitted for other executive employees.

In addition to the aforesaid paid vacations, the Employee shall be entitled, without loss of pay, to absent himself voluntarily from the performance of his employment with the Company for such additional periods of time and for such valid and legitimate reasons as the Company may determine and to attend the continuing legal education seminars contemplated by subsection 4(c) hereof.  Further, the Company may grant to the Employee a leave or leaves of absence, with or without pay, at such time or times and upon such terms and conditions as the board of directors of the Bank or the Corporation in its discretion may determine.
(f)Other Policies.  All other matters relating to the employment of the Employee not specifically addressed in this Agreement shall be subject to the general policies regarding executive employees of the Company as in effect from time to time.

5.Term of Employment.  The Company hereby employs the Employee, and the Employee hereby accepts such employment under the terms of this Agreement, for the period commencing on the Effective Date and ending 24 months thereafter (or such earlier date as is determined in accordance with Section 8).  The Employee’s term of employment may be extended for additional one-year periods beyond the Agreement’s expiration date if the Compensation Committee of the Board of Directors of the Corporation so determines in a duly adopted resolution.  

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The initial term of this Agreement and all extensions thereof are hereinafter referred to individually and collectively as the “Term.”

6.Covenants.

(a)Loyalty.

(i)During the period of his employment hereunder and except for illnesses, reasonable vacation periods, and reasonable leaves of absence, the Employee shall devote all of his full business time, attention, skill and efforts to the faithful performance of his duties hereunder; provided, however, from time to time, the Employee may serve on the boards of directors of, and hold any other offices or positions in, companies or organizations, and may perform legal services either directly or as a result of an of counsel or analogous position with a law firm for clients which will not present any conflict of interest with the Bank or the Corporation or any of their subsidiaries or affiliates, or unfavorably affect the performance of Employee’s duties pursuant to this Agreement, or will not violate any applicable statute or regulation.  “Full business time” is hereby defined as that amount of time usually devoted to like companies by similarly situated executive officers.  During the term of his employment under this Agreement, the Employee shall not engage in any business or activity contrary to the business affairs or interests of the Company, or be gainfully employed in any other position or job other than as provided above.

(ii)Nothing contained in this Section shall be deemed to prevent or limit the Employee’s right to invest in the capital stock or other securities of any business dissimilar from that of the Company, or, solely as a passive or minority investor, in any business.

(b)Nonsolicitation.  The Employee hereby understands and acknowledges that, by virtue of his position with the Company, he will have advantageous familiarity and personal contacts with the Company’s customers, wherever located, and the business, operations and affairs of the Company.  Accordingly, while the Employee is employed by the Company and for a period of one year following the Employee’s Separation from Service (as defined in Section 8(h)(ii) of this Agreement) for any reason (whether with or without cause or whether by the Company or the Employee), the Employee shall not, directly or indirectly, or individually or jointly, (i) solicit in any manner, seek to obtain or service, or accept the business of any individual or entity that is a customer of the Company as of the date of Employee’s Separation from Service or that was a customer of the Company during the one-year period immediately preceding such Separation from Service for the purpose of providing services in competition with the Business of the Company, as hereinafter defined, (ii) request or advise any customers or suppliers of the Company to terminate, reduce, limit or change their business or relationship with the Company, or (iii) induce, request or attempt to influence any employee of the Company to terminate his employment with the Company.

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For the purposes of this Agreement, the term “Business of the Company” shall mean the banking, loans, and investment and planning services provided by the Company.
For purposes of this Agreement, the term “solicit” means any direct or indirect communication of any kind whatsoever, regardless of by whom initiated, which encourages or requests any person or entity, in any manner, to terminate, reduce, limit or otherwise adversely change their business relationship with the Company.

(c)Noncompetition.  During the period of his employment hereunder, and for a period of one year following Employee’s Separation from Service, the Employee shall not, directly or indirectly:

(i)As owner, officer, director, stockholder, investor, proprietor, organizer or otherwise, engage in a trade or business competitive with the Business of the Company; or

(ii)Offer or provide employment (whether such employment is with the Employee or any other business or enterprise), either on a full-time or part-time or consulting basis, to any person who then currently is, or who within one year prior to such offer or provision of employment has been, a management-level employee of the Bank or Corporation.  This subsection 6(c)(ii) shall only apply in the event the Employee has a voluntary Separation from Service.

The restrictions contained in this subsection 6(c) shall be limited to the following geographic areas (hereinafter referred to as “Restricted Geographical Area”):
(1)Terre Haute, Indiana; and

(2)The 30-mile radius of Terre Haute, Indiana.

Nothing contained in this Section 6 shall prevent or restrict the Employee from engaging in the practice of law, including within the Restricted Geographical Area.  In addition, nothing contained in this subsection shall prevent or limit the Employee’s right to invest in the capital stock or other securities of any business dissimilar from that of the Bank or the Corporation, or, solely as a passive or minority investor, in any business.
If the Employee does not comply with the provisions of this Section, the one-year period of non-competition provided herein shall be tolled and deemed not to run during any period(s) of noncompliance, the intention of the parties being to provide one full year of non-competition by the Employee after the termination or expiration of this Agreement.
(d)Nondisclosure.  The term “Confidential Information” as used herein shall mean any and all customer lists, computer hardware, software and related material, trade secrets (as defined in I.C. 24-2-3-2), know-how, skills, knowledge, ideas, knowledge of customer’s commercial requirements, pricing methods, sales and marketing techniques, 

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dealer relationships and agreements, financial information, intellectual property, codes, research, development, research and development programs, processes, documentation, or devices used in or pertaining to the Business of the Company (i) which relate in any way to the Company’s products or processes; or (ii) which are discovered, conceived, developed or reduced to practice by the Employee, either alone or with others either during the Term, at the Company’s expense, or on the Company’s premises.

(i)During the course of his services hereunder the Employee may become knowledgeable about, or become in possession of, Confidential Information.  If such Confidential Information were to be divulged or become known to any competitor of the Company or to any other person outside the employ of the Company, or if the Employee were to consent to be employed by any competitor of the Company or to engage in competition with the Company, the Company would be irreparably harmed.  In addition, the Employee has or may develop relationships with the Company’s customers which could be used to solicit the business of such customers away from the Company.  The Company and the Employee have entered into this Agreement to guard against such potential harm. 

(ii)The Employee shall not, directly or indirectly, use any Confidential Information for any purpose other than the benefit of the Company or communicate, deliver, exhibit or provide any Confidential Information to any person, firm, partnership, corporation, organization or entity, except as required in the normal course of the Employee’s service as a consultant or as an employee of the Company.  The covenant contained in this subsection shall be binding upon the Employee during the Term and following the termination of employment until either (i) such Confidential Information becomes obsolete; or (ii) such Confidential Information becomes generally known in the Company’s trade or industry by means other than a breach of this covenant.  

(iii)The Employee agrees that all Confidential Information and all records, documents and materials relating to such Confidential Information, shall be and remain the sole and exclusive property of the Company.  

(e)Remedies.  The Employee agrees that the Company will suffer irreparable damage and injury and will not have an adequate remedy at law in the event of any breach by the Employee of any provision of this Section.  Accordingly, in the event the Company seeks, under law or in equity, a temporary restraining order, permanent injunction or a decree of specific performance of the provisions of this Section, no bond or other security shall be required.  The Company shall be entitled to recover from the Employee, reasonable attorneys’ fees and expenses incurred in any action wherein the Company successfully enforces any of the provisions of this Section against the breach or threatened breach of those provisions by the Employee.  The remedies described in this Section are not exclusive and are in addition to all other remedies the Company may have at law, in equity, or otherwise.  No claim or defense the Employee may have against the Company, including a prior breach of this 

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Agreement, shall operate to limit the Company’s ability to enforce the covenants of this Section.

(i)The Employee and the Company acknowledge and agree that in the event of the Employee’s termination of employment for any reason whatsoever, the Employee can obtain other engagements or employment of a kind and nature similar to that contemplated herein outside the Restricted Geographical Area and that the issuance of an injunction to enforce the provisions of this Section will not prevent him from earning a livelihood.

(ii)The covenants on the part of the Employee contained in this Section are essential terms and conditions to the Company entering into this Agreement, and shall be construed as independent of any other provision in this Agreement.  

(f)Surrender of Records.  Upon the Employee’s Separation from Service for any reason, the Employee shall immediately surrender to the Company any and all computer hardware, software and related materials, records, notes, documents, forms, manuals, photographs, instructions, lists, drawings, blueprints, programs, diagrams or other written or printed material (including any and all copies made at any time whatsoever) in his possession or control which pertain to the Business of the Company including any Confidential Information in the Employee’s personal notes, address books, calendars, rolodexes, personal data assistants, etc.

7.Standards.  The Employee shall perform his duties under this Agreement in accordance with such reasonable standards as the Board may establish from time to time.  The Company will provide the Employee with the working facilities and staff commensurate with his position or positions and necessary or advisable for him to perform his duties.

8.Separation from Service and Termination Pay.  Subject to Section 10 hereof, the Employee may experience a Separation from Service under the following circumstances:

(a)Death.  The Employee shall experience a Separation from Service upon his death during the Term of this Agreement, in which event the Employee’s estate or designated beneficiaries shall be entitled to receive the base salary, bonuses, vested rights, and Employee Benefits due the Employee through the last day of the calendar month in which his death occurred. Any benefits payable under insurance, health, retirement, bonus, incentive, performance or other plans as a result of the Employee’s participation in such plans through such date shall be paid when and as due under those plans.  If the Employee’s death occurs on or after Retirement Age, the Employee’s spouse and child living in his household at the time of his death shall be entitled to receive the health, life and disability benefits provided for under subsection 4(b), as described in that subsection.

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(b)Disability.

(i)The Company may terminate the Employee’s employment, resulting in a Separation from Service, as a result of the Employee’s Disability, in a manner consistent with the Company’s and the Employee’s rights and obligations under the Americans with Disabilities Act or other applicable state and federal laws concerning disability.  For the purpose of this Agreement, “Disability” means the Employee is:

(1)Unable to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment which can be expected to result in death or can be expected to last for a continuous period of not less than 12 months, or 

(2)By reason of any medically determinable physical or mental impairment which can be expected to result in death or can be expected to last for a continuous period of not less than 12 months, receiving income replacement benefits for a period of not less than three months under an accident and health plan covering employees of the Employer.

(ii)During any period that the Employee shall receive disability benefits and to the extent that the Employee shall be physically and mentally able to do so, he shall furnish such information, assistance and documents so as to assist in the continued ongoing business of the Company.

(iii)In the event of the Employee’s Separation from Service due to Disability, the Employee shall be entitled to receive the base salary, bonuses, vested rights, and Employee Benefits due the Employee through the date of his Separation from Service.  Any benefits payable under insurance, health, retirement, bonus, incentive, performance or other plans as a result of the Employee’s participation in the plans through the date of his Separation from Service shall be paid when and as due under those plans.  If the Employee’s Separation from Service due to Disability occurs on or after Retirement Age, the Employee shall be entitled to the health, life and disability benefits provided for under subsection 4(b), as described in that subsection.

(c)Just Cause.  The Company may, by written notice to the Employee, immediately terminate his employment at any time, resulting in a Separation from Service, for Just Cause.  The Employee shall have no right to receive any base salary, bonuses or other Employee Benefits, except as provided by law, whatsoever, for any period after his Separation from Service for Just Cause.  However, the vested rights of the Employee as of his Separation from Service shall not be affected.  Any benefits payable under insurance, health, retirement, bonus, incentive, performance or other plans as a result of the Employee’s participation in such plans through such date of Separation from Service shall be paid when and as due under those plans.  Separation from Service for “Just Cause” shall mean Separation from Service because of:

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(i)An intentional act of fraud, embezzlement, theft, or personal dishonesty; willful misconduct, or breach of fiduciary duty involving personal profit by the Employee in the course of his employment or director service.  No act or failure to act shall be deemed to have been intentional or willful if it was due primarily to an error in judgment or negligence.  An act or failure to act shall be considered intentional or willful if it is not in good faith and if it is without a reasonable belief that the action or failure to act is in the best interest of the Company;

(ii)Intentional wrongful damage by the Employee to the business or property of the Company, causing material harm to the Company;

(iii)Breach by the Employee of any confidentiality or non-disclosure agreement in effect from time to time with the Company;

(iv)Gross negligence or insubordination by the Employee in the performance of his duties; or

(v)Removal or permanent prohibition of the Employee from participating in the conduct of Bank’s affairs by an order issued under Section 8(e)(iv) or 8(g)(i) of the Federal Deposit Insurance Act, 12 USC 1818(e)(4) and (g)(1).

Notwithstanding the foregoing, in the event of Separation from Service for Just Cause there shall be delivered to the Employee a copy of a resolution duly adopted by the affirmative vote of not less than a majority of the disinterested directors of the Bank and the Corporation at meetings of the boards called and held for that purpose (after reasonable notice to the Employee and an opportunity for the Employee, together with the Employee’s counsel, to be heard before the boards), such meetings and the opportunity to be heard to be held prior to, or as soon as reasonably practicable following Separation from Service, but in no event later than 60 days following such Separation from Service, finding that in the good faith opinion of the boards the Employee was guilty of conduct constituting Just Cause and specifying the particulars thereof in detail.  If, following such meetings, the Employee is reinstated, he shall be entitled to receive the base salary, bonuses, all Employee Benefits, and all other fringe benefits provided for under this Agreement, including but not limited to, the benefits described in subsections 4(a), (b), (c), (d) and (e), for the period following Separation from Service and continuing through reinstatement as though he never experienced a Separation from Service.
(d)Without Just Cause.  The Company may, by written notice to the Employee, immediately terminate his employment at any time, resulting in a Separation from Service, for a reason other than Just Cause, in which event the Employee shall be entitled to receive the following compensation and benefits (unless such Separation from Service occurs within the time period set forth in subsection 10(a) hereof, in which event the benefits and compensation provided for in Section 10 shall apply):

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(i)The base salary provided pursuant to Section 2 hereof, as in effect on the date of Separation from Service, through the Expiration Date of this Agreement as determined pursuant to Section 5 hereof (including any renewal or extension of this Agreement) (the “Expiration Date”);

(ii)An amount equal to the bonuses received by or payable to the Employee in the calendar year prior to the calendar year of the Employee’s Separation from Service, for each year remaining through the Expiration Date; and

(iii)Cash reimbursement to the Employee in an amount equal to the cost to the Employee (demonstrated by submission to the Company of invoices, bills, or other proof of payment by the Employee) of (A) premiums for full supplemental Medicare coverage, at no cost to the Employee or his spouse, at the best level of coverage available which shall include prescription drug coverage for both the Employee and his spouse, until the death of the Employee and his spouse, and life insurance (all as described in subsection 4(b)); (B) all other Employee Benefits (all as defined in subsection 4(a)), excluding benefits under the First Financial Corporation 2011 Omnibus Equity Incentive Plan (the “2011 Omnibus Plan”) which will be made in accordance with the terms and conditions of that Plan); and (C) professional and club dues, the cost of Employee’s continuing legal education requirements (as described in subsection 4(c)), all Automobile Benefits (as defined in subsection 4(d)) and all other benefits which the Employee would otherwise have been eligible to participate in or receive, through the Expiration Date, based upon the benefit levels substantially equal to those provided for the Employee at the date of the Employee’s Separation from Service.  The Employee shall also be entitled to receive an amount necessary to provide any cash payments received under this subsection 8(d)(iii) net of all income and payroll taxes that would not have been payable by the Employee had he continued participation in the benefit plan or program instead of receiving cash reimbursement.

Notwithstanding the foregoing, but only to the extent required under federal banking law, the amount payable under subsection 8(d) shall be reduced to the extent that on the date of the Employee’s Separation from Service, the present value of the benefits payable under subsection 8(d) exceeds any limitation on severance benefits that is imposed by the Office of the Comptroller of the Currency (the “OCC”) on such benefits.
All amounts payable to the Employee under subsections 8(d)(i) and 8(d)(ii) shall be paid in one lump sum within ten days of such Separation from Service.  All amounts payable to the Employee under subsection 8(d)(iii) shall be paid on the first day of each month following the Employee’s Separation from Service, in an amount equal to the total reimbursable amount (demonstrated by invoices, bills or other proof of payment submitted by the Employee).  Such amounts must be submitted for reimbursement no later than the earlier of: (i) six months after the date such amounts are paid by the Employee; or (ii) March 15th of the year following the year in which the Employee paid the amount.

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(e)Voluntary for Good Reason.  The Employee may voluntarily Separate from Service under this Agreement at any time for Good Reason.  In the event that the Employee has a Separation from Service for Good Reason, the Employee will first deliver to the Company a written notice which will (A) indicate the specific provisions of this Agreement relied upon for such Separation from Service, (B) set forth in reasonable detail the facts and circumstances claimed to provide a basis for such Separation from Service, and (C) describe the steps, actions, events or other items that must be taken, completed or followed by the Company to correct or cure the basis for such Separation from Service.  The Company will then have 30 days following the effective date of such notice to fully correct and cure the basis for the Separation from Service.  If the Company does not fully correct and cure the basis for the Employee’s Separation from Service within such 30-day period, then the Employee will have the right to Separate from Service with the Company for Good Reason immediately upon delivering to the Company a written Notice of Termination and without any further cure period.  Notwithstanding the foregoing, the Company will be entitled to so correct and cure only a maximum of two times during any calendar year.  The Employee shall thereupon be entitled to receive the same amount payable under subsections 8(d)(i) and (ii) hereof, within 30 days following his date of Separation from Service and under subsection 8(d)(iii) as provided in subsection 8(d).

For purposes of this Agreement, “Good Reason” means the occurrence of any of the following events, which has not been consented to in advance by the Employee in writing (unless such voluntary Separation from Service occurs within the time period set forth in subsection 10(b) hereof, in which event the benefits and compensation provided for in Section 10 shall apply): 
(i)The requirement that the Employee perform his executive functions more than 30 miles from his Terre Haute, Indiana office;

(ii)A reduction of ten percent or more in the Employee’s base salary, unless part of an institution-wide reduction and similar to the reduction in the base salary of all other executive officers of the Company;

(iii)The removal of the Employee from participation in any incentive compensation or performance-based compensation plans or bonus plans unless the Company terminates participation in the plan or plans with respect to all other executive officers of the Company;

(iv)A material failure by the Company to continue to provide the Employee with the base salary, bonuses or benefits provided for under subsections 4(a), (c), (d) and (e) of this Agreement, as the same may be increased from time to time, or with benefits substantially similar to those provided to him under those Sections or under any benefit plan or program in which the Employee now or hereafter becomes eligible to participate, or the taking of any action by the Company which would directly or indirectly reduce in a material manner any such benefits or deprive the Employee to a material degree of any such benefit enjoyed by him, unless 

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part of an institution-wide reduction and applied similarly to all other executive officers of the Company:

(v)The assignment to the Employee of duties and responsibilities materially different from those normally associated with his position as referenced in Section 1;

(vi)A failure to elect or re-elect the Employee to the Bank’s board of directors or a failure on the part of the Corporation to honor its obligation to nominate Employee to the Corporation’s board of directors;

(vii)A material diminution or reduction in the Employee’s responsibilities or authority (including reporting responsibilities) in connection with his employment with the Company; or

(viii)A material reduction in the secretarial or administrative support of the Employee.

Notwithstanding the foregoing, but only to the extent required under federal banking law, the amount payable under this subsection shall be reduced to the extent that on the date of the Employee’s Separation from Service, the present value of the benefits payable under subsections 8(d)(i), (ii) and (iii) exceed any limitation on severance benefits that is imposed by the OCC on such benefits.
(f)Voluntary Separation from Service Prior to Retirement Age.  Subject to subsection 4(b) and Section 10, the Employee may voluntarily Separate from Service with the Company during the term of this Agreement prior to attaining Retirement Age, upon at least 90 days’ prior written notice to the Company, in which case, effective as of the Separation from Service, the Employee shall receive only his base salary, bonuses, vested rights and benefits up to the date of his Separation from Service, such benefits to be paid when and as due under those plans (unless such Separation from Service occurs pursuant to subsection 10(b) hereof, in which event the benefits, bonuses and base salary provided for in subsection 10(a) shall apply).

(g)Termination or Suspension Under Federal Law.

(i)If the Employee is removed and/or permanently prohibited from participating in the conduct of the Company’s affairs by an order issued under Sections 8(e)(iv) or 8(g)(i) of the Federal Deposit Insurance Act (“FDIA”) (12 U.S.C. 1818(e)(4) and (g)(1)), all obligations of the Company under this Agreement shall terminate, as of the effective date of the order, but vested rights of the Employee shall not be affected.

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(ii)If the Bank is in default (as defined in Section 3(x)(1) of the FDIA), all obligations under this Agreement shall terminate as of the date of default; but the vested rights of the Employee shall not be affected.

(iii)All obligations under this Agreement shall terminate, except to the extent it is determined that the continuation of this Agreement is necessary for the continued operation of the Bank; (A) by the OCC or its designee, at the time that the Federal Deposit Insurance Corporation (“FDIC”) enters into an agreement to provide assistance to or on behalf of the Bank under the authority contained in Section 13(c) of FDIA; or (B) by the OCC, or its designee, at the time that the OCC or its designee approves a supervisory merger to resolve problems related to operation of the Bank or when the Bank is determined by the OCC to be in an unsafe or unsound condition.  Such action shall not affect any vested rights of the Employee.

(iv)If a notice served under Section 8(e)(3) or (g)(1) of the FDIA suspends and/or temporarily prohibits the Employee from participating in the conduct of the Bank’s affairs, the Bank’s obligations under this Agreement shall be suspended as of the date of such service, unless stayed by appropriate proceedings.  However, the vested rights of the Employee as of the date of suspension will not be affected.  If the charges in the notice are dismissed, the Bank may in its discretion (A) pay the Employee all or part of the compensation withheld while its contract obligations were suspended, and (B) reinstate (in whole or in part) any of its obligations which were suspended.

(h)Separation from Service.  If the Employee qualifies as a Key Employee (as defined in subsection 8(h)(i)) at the time of his Separation from Service (as defined in subsection 8(h)(ii)), the Company may not make a payment pursuant to subsections 8(d), 8(e) or Section 10 earlier than six months following the date of the Employee’s Separation from Service (or, if earlier, the date of the Employee’s death) to the extent such a payment would constitute deferred compensation that is not exempt from the requirements of Code Section 409A or Treasury Regulations 1.409A-1 et. seq.  Payments to which the Key Employee would otherwise be entitled during the first six months following the date of his Separation from Service will be accumulated and paid to the Employee on the first day of the seventh month following the Employee’s Separation from Service.

(i)Key Employee means an employee who is:

(1)An officer of the Bank or Corporation having annual compensation greater than $170,000;

(2)A five percent owner of the Corporation; or

(3)A one percent owner of the Corporation having an annual compensation from the employer of more than $150,000.

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The $170,000 amount in subsection 8(h)(i)(1) will be adjusted at the same time and in the same manner as under Code Section 415(d), except that the base period shall be the calendar quarter beginning July 1, 2001, and any increase under this sentence which is not a multiple of $5,000 shall be rounded to the next lower multiple of $5,000.
(ii)Separation from Service means the date on which the Employee dies, retires or otherwise experiences a “Termination of Employment” with the Company (as defined below).  Provided, however, a Separation from Service does not occur if the Employee is on military leave, sick leave or other bona fide leave of absence if the period of such leave does not exceed six months, or if longer, so long as the Employee retains a right to reemployment with the Company under an applicable statute or by contract.  For purposes of this subsection 8(h)(ii), a leave of absence constitutes a bona fide leave of absence only if there is a reasonable expectation that the Employee will return to perform services for the Bank or Corporation.  If the period of leave exceeds six months and the Employee does not retain the right to reemployment under an applicable statute or by contract, the employment relationship is deemed to terminate on the first date immediately following such six-month period.  Notwithstanding the foregoing, where a leave of absence is due to 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 six months, where such impairment causes the Employee to be unable to perform the duties of his position of employment or any substantially similar position of employment, a 29-month period of absence may be substituted for such six-month period.  The Employee shall incur a “Termination of Employment” for purposes of this subsection 8(h)(ii) when a termination of employment has occurred under Treasury Regulation 1.409A-1(h)(1)(ii).

9.No Mitigation.  The Employee shall not be required to mitigate the amount of any payment provided for in this Agreement by seeking other employment or otherwise and no such payment shall be offset or reduced by the amount of any compensation or benefits provided to the Employee in any subsequent employment.

10.Change in Control.

(a)Change in Control; Involuntary Separation from Service.

(1)Notwithstanding any provision herein to the contrary, if the Employee’s employment under this Agreement is terminated by the Company, resulting in a Separation from Service, without the Employee’s prior written consent and for a reason other than Just Cause, in connection with or within 12 months after a Change in Control, as defined in subsection 10(a)(3), the Employee shall be paid (subject to subsection 10(a)(2)) the greater of:

(i)The total amount payable under subsection 8(d); or

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(ii)The product of 2.99 times the sum of: (A) his base salary in effect as of the date of the Change in Control; (B) an amount equal to any annual discretionary or performance-based incentive bonus received by or payable to the Employee in the calendar year prior to the year in which the Change in Control occurs; and (C) cash reimbursement to the Employee in an amount equal to the cost to the Employee (demonstrated by submission to the Company of invoices, bills or other proof of payment by the Employee) of obtaining all Employee Benefits (all as defined in subsection 4(a) excluding benefits under the 2011 Omnibus Plan which will be paid in accordance with the terms and conditions of that plan), premiums for full supplemental Medicare coverage, at no cost to the Employee or his spouse, at the best level available which shall include prescription drug coverage for both the Employee and his spouse, until the death of the Employee and his spouse, and life insurance (all as described in subsection 4(b)), professional and club dues, the cost of Employee’s continuing legal education requirements (all as described in subsection 4(c)), all Automobile Benefits (as defined in subsection 4(d)) and all other benefits which the Employee would otherwise have been eligible to participate in or receive, through the Expiration Date, based upon the benefit levels substantially equal to those that the Company provided for the Employee at the date of the Employee’s Separation from Service; provided, however, that such limitation to 2.99 times these amounts is only applicable to the extent the benefit would otherwise be considered an excess parachute payment because its receipt is contingent on a Change in Control.  The Employee shall also be entitled to receive an amount necessary to provide any cash payments received under this subsection 10(a)(1)(ii) net of all income and payroll taxes that would not have been payable by the Employee had he continued participation in the benefit plan or program instead of receiving cash reimbursement.

(2)To the extent payments that would be received based on the Employee’s Separation from Service in connection with a Change in Control, or within 12 months after a Change in Control would be considered “excess parachute payments” pursuant to the Code Section 280G, the benefit payment to the Employee under this Agreement, when combined with all other parachute payments to the Employee, shall be the greater of:

(i)the Employee’s benefit under the Agreement reduced to the maximum amount payable to the Employee such that when it is aggregated with payments and benefits under all other plans and arrangements it will not result in an “excess parachute payment;” or

(ii)the Employee’s benefit under the Agreement after taking into account the amount of the excise tax imposed on the Employee under Code Section 280G due to the benefit payment.

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The determination of whether any reduction in the rights or payments under this Plan is to apply will be made by the Company in good faith after consultation with the Employee, and such determination will be conclusive and binding on the Employee.  The Employee will cooperate in good faith with the Company in making such determination and providing the necessary information for this purpose.

(3)“Change in Control” shall be deemed to have occurred if one of the following events takes place:

(i)Change in Ownership.  A change in the ownership of the Bank or the Corporation occurs on the date that any person, or group of persons, as defined below, acquires ownership of stock of the Bank or the Corporation that, together with stock held by the person or group, constitutes more than 50 percent of the total fair market value or total voting power of the stock of the Bank or the Corporation.  However, if any person or group is considered to own more than 50 percent of the total fair market value or total voting power of the stock, the acquisition of additional stock by the same person or group is not considered to cause a change in the ownership of the Bank or the Corporation (or to cause a change in the effective control of the Bank or the Corporation as defined in subsection 10(a)(3)(ii)).  An increase in the percentage of stock owned by any person or group, as a result of a transaction in which the Bank or the Corporation acquires its stock in exchange for property will be treated as an acquisition of stock for purposes of this subsection.  This subsection only applies when there is a transfer of stock of the Bank or the Corporation (or issuance of stock of a corporation) and stock in the Bank or the Corporation remains outstanding after the transaction.

For purposes of subsections 10(a)(3)(i) and (ii), persons will not be considered to be acting as a group solely because they purchase or own stock of the Bank or the Corporation at the same time, or as a result of the same public offering.  However, 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 Bank or the Corporation.  If a person, including an entity, owns stock in both corporations that enter into a merger, consolidation, purchase or acquisition of stock or similar transaction, such shareholder is considered to be acting as a group with other shareholders only with respect to the ownership in that corporation before the transaction giving rise to the change and not with respect to the ownership interest in the other corporation.

(ii)Change in the Effective Control.  A change in the effective control of the Bank or the Corporation will occur when: (i) any person or group (as defined in subsection 10(a)(3)(i)) acquires, or has acquired during 

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the 12-month period ending on the date of the most recent acquisition by such person(s), ownership of stock of the Bank or the Corporation possessing 30 percent or more of the total voting power; or (ii) a majority of members of the board of the Bank or the Corporation is replaced during any 12-month period by directors whose appointment or election is not endorsed by a majority of the members of the Bank’s or Corporation’s board prior to the date of the appointment or election.  However, if any person or group is considered to effectively control the Bank or Corporation, the acquisition of additional control of the Bank or Corporation by the same person(s) is not considered to cause a change in the effective control.

(iii)Change in the Ownership of a Substantial Portion of the Bank’s or Corporation’s Assets.  A change in the ownership of a substantial portion of the Bank’s or Corporation’s assets occurs on the date that any person or group acquires, or has acquired during the 12-month period ending on the date of the most recent acquisition by such person(s), assets from the Bank or Corporation that have a total gross fair market value equal to or more than 40 percent of the total gross fair market value of all of the assets of the Bank or Corporation immediately prior to such acquisition(s).  Gross fair market value means the value of the assets of the Bank or Corporation, or the value of the assets being disposed of, determined without regard to any liabilities associated with such assets.  

However, there is no Change in Control under this subsection when there is a transfer to an entity that is controlled by the shareholders of the Bank or Corporation immediately after the transfer.  A transfer of assets by the Bank or Corporation is not treated as a change in the ownership of such assets if the assets are transferred to: (i) a shareholder of the Bank or Corporation (immediately before the asset transfer) in exchange for or with respect to its stock; (ii) an entity, 50 percent or more of the total value or voting power of which is owned, directly or indirectly, by the Bank or Corporation; (iii) a person, or group of persons, that owns, directly or indirectly, 50 percent or more of the total value or voting power of all the outstanding stock of the Bank or Corporation or (iv) an entity, at least 50 percent of the total value or voting power of which is owned, directly or indirectly, by a person described in (iii).  For purposes of this subsection, except as otherwise provided, a person’s status is determined immediately after the transfer of the assets.  For example, a transfer to a company in which the Bank or Corporation has no ownership interest before the transaction, but which is a majority-owned subsidiary of the Bank or Corporation after the transaction, is not treated as a change in the ownership of the assets of the transferor Bank or Corporation.
For purposes of this subsection 10(a)(3)(iii), persons will not be considered to be acting as a group solely because they purchase assets of the Bank or Corporation at the same time.  However, persons will be considered to be 

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acting as a group if they are owners of a corporation that enters into a merger, consolidation, purchase or acquisition of assets, or similar business transaction with the Bank or Corporation.  If a person, including an entity shareholder, owns stock in both corporations that enter into a merger, consolidation, purchase or acquisition of assets, or similar transaction, such shareholder is considered to be acting as a group with other shareholders in a corporation only to the extent of the ownership in that corporation before the transaction giving rise to the change and not with respect to the ownership interest in the other corporation.
Notwithstanding the foregoing, the acquisition of Bank or Corporation stock by any retirement plan sponsored by the Bank or an affiliate of the Bank will not constitute a Change in Control.  Additionally, notwithstanding the foregoing, but only to the extent required under federal banking law, the amount payable under subsection 10(a) shall be reduced to the extent that on the date of the Employee’s Separation from Service, the amount payable under subsection 10(a) exceeds any limitation on severance benefits that is imposed by the OCC.  
(b)Change in Control; Voluntary for Good Reason.  Notwithstanding any other provision of this Agreement to the contrary, the Employee may Separate from Service under this Agreement for Good Reason within 12 months following a Change in Control of the Bank or Corporation, as defined in subsection 10(a)(3).  In the event that the Employee has a Separation from Service for Good Reason within 12 months following a Change in Control of the Bank or Corporation, the Employee will first deliver to the Company a written notice which will (A) indicate the specific provisions of this Agreement relied upon for such Separation from Service, (B) set forth in reasonable detail the facts and circumstances claimed to provide a basis for such Separation from Service, and (C) describe the steps, actions, events or other items that must be taken, completed or followed by the Company to correct or cure the basis for such Separation from Service.  The Company will then have 30 days following the effective date of such notice to fully correct and cure the basis for the Separation from Service.  If the Company does not fully correct and cure the basis for the Employee’s Separation from Service within such 30-day period, then the Employee will have the right to Separate from Service with the Company for Good Reason immediately upon delivering to the Company a written Notice of Termination and without any further cure period.  Notwithstanding the foregoing, the Company will be entitled to so correct and cure only a maximum of two times during any calendar year.  

The Employee shall thereupon be entitled to receive the payment described in subsections 10(a)(1) and (2) of this Agreement, within 30 days.  During such 30-day period, the Bank shall not allow the Employee’s participation in any Employee Benefits to lapse and shall continue to provide the Employee with the Automobile Benefits described in subsection 4(d), reimbursement or payment of professional and club dues, and the cost of the Employee’s continuing legal education requirements as described in subsection 4(c).  In the event subsection 8(h) applies at the time of the Employee’s Separation from Service, the six-month suspension period shall not prevent the Employee from continuing to receive 

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life insurance (as described in subsection 4(b)) immediately following his Separation from Service, without regard to the six-month suspension applicable to cash payments and other benefit amounts.
For purposes of this subsection 10(b), “Good Reason” means, the occurrence of any of the following events, which has not been consented to in advance by the Employee in writing:  

(i)The requirement that the Employee perform his principal executive functions more than 30 miles from his Terre Haute, Indiana office.

(ii)A reduction of ten percent or more in the Employee’s base salary as in effect on the date of the Change in Control or as the same may be changed by mutual agreement from time to time, unless part of an institution-wide reduction and similar to the reduction in the base salary of all other executive officers of the Company;

(iii)The removal of the Employee from participation in any incentive or performance-based compensation plans or bonus plans unless the Company terminates participation in the plan or plans with respect to all other executive officers of the Company;

(iv)A material failure by the Company to continue to provide the Employee with the base salary, bonuses or benefits provided for under subsections 4(a), (c), (d) and (e) of this Agreement, as the same may be increased from time to time, or with benefits substantially similar to those provided to him under those subsections or under any benefit plan or program in which the Employee now or hereafter becomes eligible to participate, or the taking of any action by the Company which would directly or indirectly reduce in a material manner any such benefits or deprive the Employee to a material degree of any such benefit enjoyed by him, unless part of an institution-wide reduction and applied similarly to all other executive officers of the Company;

(v)The assignment to the Employee of duties and responsibilities materially different from those normally associated with his position as referenced in Section 1;

(vi)A failure to elect or re-elect the Employee to the Bank’s board of directors or a failure on the part of the Corporation or its successor to honor any obligation to nominate Employee to the board of directors of the Corporation or its successor;

(vii)A material diminution or reduction in the Employee’s responsibilities or authority (including reporting responsibilities) in connection with his employment with the Company; or

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(viii)A material reduction in the secretarial or administrative support of the Employee.

Notwithstanding the foregoing, but only to the extent required under federal banking law, the amount payable under subsection 10(b) shall be reduced to the extent that on the date of the Employee’s Separation from Service, the amount payable under subsection 10(b) exceeds any limitation on severance benefits that is imposed by the OCC.  
(c)Compliance with 12 U.S.C. Section 1828(k).  Any payments made to the Employee pursuant to this Agreement, or otherwise, are subject to and conditioned upon their compliance with 12 U.S.C. Section 1828(k) and any regulations promulgated thereunder.

(d)Trust.

(1)Within five business days before or after a Change in Control which was not approved in advance by a resolution of a majority of the directors of the Corporation, the Company shall, at the Company’s expense, (i) deposit, or cause to be deposited, in a grantor trust (the “Trust”), designed to conform with Revenue Procedure 92-64 (or any successor) and having a trustee independent of the Bank, an amount equal to the amounts which would be payable in a lump sum under subsections 10(a)(1) and (2) hereof if those payment provisions become applicable, and (ii) provide the trustee of the Trust with a written direction to hold said amount and any investment return thereon in a segregated account for the benefit of the Employee, and to follow the procedures set forth in the next paragraph as to the payment of such amounts from the Trust.

(2)During the 12 consecutive month period following the date on which the Company makes the deposit referred to in the preceding paragraph, the Employee may provide the trustee of the Trust with a written notice requesting that the trustee pay to the Employee, in a single sum, the amount designated in the notice as being payable pursuant to subsections 10(a)(1) and (2).  Within three business days after receiving said notice, the trustee of the Trust shall send a copy of the notice to the Company via overnight and registered mail, return receipt requested.  On the tenth business day after mailing said notice to the Company, the trustee of the Trust shall pay the Employee the amount designated therein in immediately available funds, unless prior thereto the Company provides the trustee with a written notice directing the trustee to withhold such payment.  In the latter event, the trustee shall submit the dispute, within ten days of receipt of the notice from the Company, to non-appealable binding arbitration for a determination of the amount payable to the Employee pursuant to subsections 10(a)(1) and (2), and the party responsible for the payment of the costs of such arbitration (which may include any reasonable legal fees and expenses incurred by the Employee) shall be determined by the arbitrator.  The Company and the Employee shall choose the arbitrator to settle the dispute, and such 

21

arbitrator shall be bound by the rules of the American Arbitration Association in making his or her determination.  If the Employee and the Company cannot agree on an arbitrator, then the arbitrator shall be selected under the rules of the American Arbitration Association.  The Employee, the Company and the trustee shall be bound by the results of the arbitration and, within three days of the determination by the arbitrator, the trustee shall pay from the Trust the amounts required to be paid to the Employee and/or the Company, and in no event shall the trustee be liable to either party for making the payments as determined by the arbitrator.

(3)Upon the earlier of (i) payment of the entire amount owed to Employee from the Trust to the Employee, or (ii) the date twelve months after the date on which the Company makes the deposit referred to in subsection 10(d)(1)(i), the trustee of the Trust shall pay to the Company the entire balance remaining in the segregated account maintained for the benefit of the Employee, if any.  The Employee shall thereafter have no further interest in the Trust pursuant to this Agreement.  However, the termination of the Trust shall not operate as a forfeiture or relinquishment of any of the Employee’s rights under the terms of this Agreement.  Furthermore, in the event of a dispute under subsection 10(d)(2), the trustee of the Trust shall continue to hold, in trust, the deposit referred to in subsection 10(d)(1)(i) until a final decision is rendered by the arbitrator pursuant to subsection 10(d)(2).

(e)In the event that any dispute arises between the Employee and the Company as to the terms or interpretation of this Agreement or the obligations thereunder, including this Section, whether instituted by formal legal proceedings or submitted to arbitration pursuant to subsection 10(d)(2), including any action that the Employee takes to enforce the terms of this Section or to defend against any action taken by the Company, the Employee shall be reimbursed for all costs and expenses, including reasonable attorneys’ fees, arising from such dispute, proceedings or actions, provided that the Employee shall obtain a final judgment by a court of competent jurisdiction in favor of the Employee or, in the event of arbitration pursuant to subsection 10(d)(2), a determination is made by the arbitrator that the expenses should be paid by the Company.  Such reimbursement shall be paid within ten days of Employee’s furnishing to the Company written evidence, which may be in the form, among other things, of a canceled check or receipt, of any costs or expenses incurred by the Employee.

Should the Employee fail to obtain a final judgment in favor of the Employee and a final judgment or arbitration decision is entered in favor of the Company and if decided by arbitration, the arbitrator, pursuant to subsection 10(d)(2), determines the Employee to be responsible for the Company’s expenses, then the Company shall be reimbursed for all costs and expenses, including reasonable attorneys’ fees arising from such dispute, proceedings or actions.  Such reimbursement shall be paid within ten days of the Company furnishing to the Employee written evidence, which may be in the form, among other things, of a canceled check or receipt, of any costs or expenses incurred by the Company.

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11.2011 Omnibus Plan Awards.  Any awards to the Employee under the 2011 Omnibus Plan that are outstanding at the time of a Separation from Service will be governed by the terms of the 2011 Omnibus Plan.

12.Federal Income Tax Withholding.  The Bank may withhold all federal and state income or other taxes from any benefit payable under this Agreement as shall be required pursuant to any law or governmental regulation or ruling.

13.Successors and Assigns.

(a)Company.  This Agreement shall not be assignable by the Bank or Corporation, provided that this Agreement shall inure to the benefit of and be binding upon any corporate or other successor of the Bank or Corporation which shall acquire, directly or indirectly, by merger, consolidation, purchase or otherwise, all or substantially all of the assets or stock of the Bank or Corporation.

(b)Employee.  Because the Company is contracting for the unique and personal skills of the Employee, the Employee shall be precluded from assigning or delegating his rights or duties hereunder without first obtaining the written consent of the Company; provided, however, that nothing in this paragraph shall preclude (i) the Employee from designating a beneficiary to receive any benefit payable hereunder upon his death, or (ii) the executors, administrators, or other legal representatives of the Employee or his estate from assigning any rights hereunder to the person or persons entitled thereunto.

(c)Attachment.  Except as required by law, no right to receive payments under this Agreement shall be subject to anticipation, commutation, alienation, sale, assignment, encumbrance, charge, pledge, or hypothecation or to exclusion, attachment, levy or similar process or assignment by operation of law, and any attempt, voluntary or involuntary, to effect any such action shall be null, void and of no effect.

14.Amendments.  No amendments or additions to this Agreement shall be binding unless made in writing and signed by the Bank, the Corporation and the Employee, except as herein otherwise specifically provided.

15.Applicable Law.  Except to the extent preempted by federal law, the laws of the State of Indiana, without regard to that State’s choice of law principles, shall govern this Agreement in all respects, whether as to its validity, construction, capacity, performance or otherwise.

16.Severability.  The provisions of this Agreement shall be deemed severable and the invalidity or unenforceability of any provision shall not affect the validity or enforceability of the other provisions hereof.  Should any particular covenant, provision or clause of this Agreement be held unreasonable or unenforceable for any reason, including without limitation, the time period, geographic area and/or scope of activity covered by such covenant, provision or clause, the Company and Employee acknowledge and agree that such covenant, provision or clause shall be given effect and enforced to whatever extent would be reasonable and enforceable under applicable law.

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17.Entire Agreement.  This Agreement: (a) supersedes all other understandings and agreements, oral or written, between the parties with respect to the subject matter of this Agreement; and (b) constitutes the sole agreement between the parties with respect to this subject matter; provided, however, that the benefit plans and arrangements referred to in this Agreement are not superseded or replaced unless this Agreement specifically so states and such benefit plans and arrangements may be set forth in separate plan documents stating their terms.

18.Construction.  The rule of construction to the effect that any ambiguities are to be resolved against the drafting party shall not be employed in the interpretation of this Agreement.

19.Headings.  The headings in this Agreement have been inserted solely for ease of reference and shall not be considered in the interpretation, construction or enforcement of this Agreement.

20.Notices.  For purposes of this Agreement, notices and all other communications provided for herein shall be in writing and shall be deemed to have been given (a) if hand delivered, upon delivery to the party, or (b) if mailed, two days following deposit of the notice or communication with the United States Postal Service by registered or certified mail, return receipt requested, postage prepaid, addressed as follows:

	
		
	If to the Employee:
	Norman L. Lowery
93 Allendale
Terre Haute, Indiana 47802

	 
	 

	If to the Bank:
	First Financial Bank, N.A.
Attn:  Chairman of the Board of Directors
One First Financial Plaza
P.O. Box 540
Terre Haute, Indiana 47808-0540

	 
	 

	If to First Financial Corporation:
	First Financial Corporation
Attn:  Chairman of the Board of Directors
One First Financial Plaza
P.O. Box 540
Terre Haute, Indiana 47808-0540

or to such other address as either party hereto may have furnished to the other party in writing in accordance herewith, except that notices of change of address shall be effective only upon receipt.

21.Waiver.  The waiver by either party of a breach of any provision of this Agreement, or failure to insist upon strict compliance with the terms of this Agreement, shall not be deemed a waiver of any subsequent breach or relinquishment of any right or power under this Agreement.

22.Review and Consultation.  Employee acknowledges and agrees he (a) has read this Agreement in its entirety prior to executing it, (b) understands the provisions and effects of this Agreement and (c) has consulted with such attorneys, accountants and financial or other advisors as he has deemed appropriate in connection with the execution of this Agreement.  Employee 

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understands, acknowledges and agrees that he has not received any advice, counsel or recommendation with respect to this Agreement from Employer’s attorneys.

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IN WITNESS WHEREOF, the parties have executed this Agreement on this 3rd day of April, 2019.

FIRST FINANCIAL BANK, N.A.

                        
Rodger A. McHargue, Secretary/Treasurer

FIRST FINANCIAL CORPORATION            EMPLOYEE

                                 
Rodger A. McHargue, Secretary                 Norman L. Lowery    

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