Document:

Distributor Agreement

 Exhibit 10.13 
 DISTRIBUTION AGREEMENT 
 This Distribution Agreement between PSS WORLD MEDICAL SHARED SERVICES, INC.,
(“PSS”) with its offices at 4345 Southpoint Boulevard, Jacksonville, Florida, 32216, and Cutera, Inc. (“Cutera”), a Delaware corporation, with offices at 3240 Bayshore Blvd., Brisbane, CA. 94005, (the “Parties”) is
effective this 1st day of October, 2006 (“Effective Date”). 
 WHEREAS Cutera develops, manufactures and markets aesthetic light-based systems and related services. 
 WHEREAS PSS distributes products and seeks to distribute additional products to its customers; and, 
 WHEREAS Cutera desires to appoint PSS as an authorized distributor of Cutera products, accessories and related goods and PSS desires to accept such
appointment. 
 THEREFORE PSS agrees to purchase and Cutera agrees to sell such Products upon the following terms and conditions: 

 

	1.	DEFINITIONS 

 The following terms have the meaning
indicated here when used in this Agreement: 
 1.1 “Agreement” means this Agreement, together with all Exhibits
which are attached hereto or incorporated by reference herein, and which are an integral part of herein. 
 1.2
“Affiliate”: With respect to either party, any person, firm, corporation or other legal entity which controls or is controlled by or under common control with such party. 
 1.3 “Products”: All products, supplies, accessories, parts and related goods listed in Exhibit 1 as well as any and all updates
and enhancements of the Products, and any other products that the parties mutually agree to add by a signed writing to Exhibit 1. Notwithstanding any other term in this Agreement, Cutera may from time to time discontinue the manufacture and/or sale
of any or all Products, and/or change its service policies, warranties and product designs without any obligation or liability to PSS provided that such discontinuations and/or changes apply to Cutera’s customers generally. 
 1.4 “Territory”: The United States. 
  

	2.	APPOINTMENT 

 2.1 Appointment:
Subject to the terms and conditions of this Agreement, Cutera hereby appoints PSS as its exclusive third party distributor of the Products to licensed physicians (“Physicians”) in the Territory, and PSS accepts such appointment. Cutera
agrees to sell Products to PSS, and PSS agrees to purchase the same from Cutera only for resale to Physicians for delivery and use within the Territory, under the terms and conditions herein. The ‘exclusivity’ of this appointment means
that Cutera will not appoint any other third-party 

 
distributors to resell Products to Physicians for delivery and use within the Territory. For purposes of the foregoing sentence, an entity that is a
beauty-or spa chain or franchise or otherwise an entity that may purchase multiple units of Products for itself and its affiliates will not be deemed a ‘distributor.’ Notwithstanding any other term in this Agreement, Cutera reserves the
right, without any compensation owing to PSS, to market and sell the Products in the Territory through its employees and third-party leasing companies. 
 2.2 Competitive Products: During the Term of this Agreement, PSS shall not engage, either directly or indirectly, in the manufacture, marketing, promotion or sale of products that are similar to or competitive
with the Products covered by this Agreement, unless Cutera and PSS agree in advance in writing. 
 2.3 Orders

  

	 	a.	PSS will submit purchase orders for the Products from time to time, and each order will be subject to Cutera’s acceptance. Each order will specify the types and quantities of
requested Products, and the proposed delivery dates and destination points. No other terms or conditions on any PSS order shall be binding on Cutera unless expressly accepted in writing by Cutera. The terms and conditions of this Agreement shall be
incorporated into each PSS order. In the event of any conflicts, differences or inconsistencies between the terms and conditions of a PSS purchase order and this Agreement, this shall govern. PSS will provide Cutera with the contact information of
each entity that purchases Products from PSS. 

  

	 	b.	Delivery dates provided by Cutera are approximate only. Products may be dropped shipped to PSS’ customers. PSS may, without any liability to Cutera, cancel an order in whole or
in part anytime before original scheduled shipment date; provided that written notice of cancellation must be received by Cutera prior to such date. 

  

	 	c.	Title will pass to PSS at Cutera’s factory. Products are deemed accepted upon shipment. However, without expanding or modifying the product warranty in Exhibit 2, attached
hereto, PSS or PSS customer shall have the opportunity to inspect the Products upon delivery and provide Cutera with written notice of any identified damage or loss. 

  

	 	d.	Cutera is responsible for packaging of Products so as to reasonably protect from damage. In addition, Cutera is responsible for selection and payment of freight carrier and
insurance. As such, Cutera, on behalf of PSS, is responsible for filing, managing and collecting on all loss and damage claims identified and communicated by PSS to Cutera per section 2.3 c. 

  

	3.	RELATIONSHIP 

 3.1 The relationship of PSS
to Cutera shall be that of an independent contractor engaged in purchasing Products from Cutera for resale to PSS’s customers. 
  

			
	2	  	Cutera / PSS Distributor Agreement October 1, 2006

 3.2 Nothing contained in this Agreement shall be deemed to create a partnership or joint
venture between the Parties. Neither the making nor the performance of this Agreement shall be construed in any manner to have established a joint venture or partnership. 
 3.3 Neither Party shall hold itself out as the agent of the other, nor shall they incur any indebtedness or obligations in the name of, or
which shall be binding on the other, without the prior written consent of the other. Each Party assumes full responsibility for its own personnel under laws and regulations of the governmental authorities of the competent jurisdiction. 

3.4 Cutera shall comply, to the extent applicable, with all laws, regulations and orders relating to its performance under this
Agreement, including without limitation all anti-fraud and anti-kickback laws, regulations and orders. PSS and Cutera each agrees, warrants and certifies that in performance of this Agreement it will fully comply with the provisions of the Social
Security Act, Section 1128B(b) (42 U.S.C. Section 1320a-7b(b)) which prohibit the knowing or willful offer, solicitation or receipt of any remuneration, including discounts and/or rebates, directly or indirectly, in return for purchasing,
leasing or ordering, or arranging for or recommending the purchase, lease or order, of any services or items, including any Products, for which payment may be made in whole or in part under a federal health care program. Without limiting the
generality of the foregoing, Cutera shall not, directly or indirectly, pay any compensation, amounts, benefits or other consideration to any PSS employee, or any family member of a PSS employee, (other than customary gifts valued under $100 in the
course of one year, and business meals in the ordinary course) without the express written consent of PSS. 
 3.5 Cutera
understands that, in an effort to control the flow and content of communications, PSS would prefer that Cutera not send any product or samples of medical, marketing materials or other communications (including without limitation, email, voice mail,
direct mail or fax) to a group of more than five of PSS’s employees or agents without written consent from PSS. Therefore, Cutera and PSS agree to discuss this matter in good faith if, in the reasonable opinion of either party, it becomes a
problem in their relationship 
  

	4.	TERM OF AGREEMENT 

 4.1 The term of this
Agreement shall commence on the Effective Date and continue indefinitely until either party terminates the same, with or without cause, on one hundred eighty days’ written notice, unless sooner terminated by either party pursuant to section 5.1
or 5.2, below. 
 4.2 In the event of expiration or termination of this Agreement for any reason, this Agreement shall
continue to apply to all orders previously accepted by Cutera. 
  

	5.	TERMINATION 

 5.1 If either Party breaches
or fails to perform any of the material obligations imposed upon it under the terms of this Agreement, the other Party may terminate the Agreement in the event the breaching Party fails to cure such breach within thirty (30) days after
receiving written notice of such breach from the non-breaching party. 
  

			
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 5.2 To the extent permitted by law, if either Party becomes insolvent, is unable to pay
its debts when due, files for bankruptcy, is subject of involuntary bankruptcy, has a receiver appointed, or has its assets assigned, the other Party may terminate this Agreement immediately upon written notice to the other party and may cancel any
unfulfilled obligations. 
 5.3 Either party shall have the right to terminate this Agreement for any reason and without cause
by providing written notice to the other party one hundred and eighty (180) days prior to the effective date of such termination. After ninety (90) days following delivery of written notice (1) Cutera may, without owing any
compensation to PSS, appoint third parties to market, sell and distribute the products to Physicians in the Territory and (2) PSS can engage, either directly or indirectly, in the manufacture, marketing, promotion or sale of products that are
similar to or competitive with the products covered by this Agreement. PSS and Cutera agree to work cooperatively in this transition period. 
 5.4 Immediately upon the termination of this Agreement, PSS will discontinue holding itself out as an authorized Cutera distributor, and will return all pricelists, catalogs, marketing material and all other sales
aids furnished by or through Cutera to PSS. 
  

	6.	ASSIGNMENT 

 6.1 During the term of this
Agreement, the rights of either party under this Agreement shall not be assigned nor shall the performance of duties hereunder be delegated, without the other party’s prior written consent, which shall not be unreasonably withheld; provided
however, either party may assign this Agreement (i) to its Affiliate that is such an Affiliate as of date of execution of this Agreement; or, (ii) to its Affiliate whose assets consist entirely of the assets of an Affiliate or Affiliates
that were Affiliates of such assigning party as of the date of execution of this Agreement. 
 6.2 Either party shall have the
right to assign this Agreement to a successor to or acquirer of all or substantially all of its assets. Any assignment of this Agreement, whether due to consent by a party, operation of law or Change in Control, shall not relieve the assigning Party
of its obligations hereunder. 
  

	7.	SALES PROCEDURE 

 7.1 The parties agree to
meet, discuss and cooperate in good faith in order to agree on and implement mutually beneficial policies and procedures with respect to the marketing, solicitation and sales of the Products, including without limitation those relating to the
identification of leads and prospective customers (“Prospects”), marketing and solicitation activities, and closing of sales to Prospects. In this regard, the Marketing Manager for PSS (“Marketing Manager”) and the Vice President
of Sales for Cutera shall take the lead in such discussions toward reaching mutual agreement on such details. 
 7.2 Subject
to the specific policies and procedures that are hereafter agreed upon by the parties in writing, the Marketing Manager shall submit the Prospect information to Cutera via email. Cutera will then determine whether the Prospect is currently being
actively pursued by Cutera (a “Cutera Prospect”). For purposes of this Agreement, a Prospect will be 

  

			
	4	  	Cutera / PSS Distributor Agreement October 1, 2006

 
considered a “Cutera Prospect” if, for example, Cutera has engaged in bilateral discussions with the Prospect (as opposed to, for example, an
unanswered solicitation from Cutera). Cutera shall provide to PSS on a regular basis a current, accurate and complete list of all Cutera Prospects. 
 i. If the Prospect is a Cutera Prospect, then PSS will not sell, nor attempt to sell, any Products to that Prospect for one hundred and twenty days from the date that Cutera notified PSS that that is a Cutera Prospect. Notwithstanding the
foregoing, but subject to the provisions of Section 2.2, nothing herein shall prohibit PSS from calling, communicating with, marketing to or selling non-Cutera Products to Cutera Prospects. 
 ii. If the Prospect is not a Cutera Prospect, than Cutera will not sell, or attempt to sell, any Products to that Prospect for one hundred twenty days
from the date that PSS first identified it to Cutera as a Prospect. 
  

	8.	PRICES AND PAYMENTS 

 8.1 Prices which PSS
shall pay Cutera for the Products purchased, shall be the prices set forth in Exhibit 1. Prices and all price quotations include the Product, labeling and packaging, freight, duties and insurance. Prices exclude taxes, which are PSS’
responsibility (excluding taxes based on Cutera’s taxable income). Wherever applicable, all such taxes may be added to the invoice or invoiced separately. 
 8.2 . Notices by Cutera of price decreases will be effective upon delivery, but only with respect to new orders booked after the date such
notice was delivered. Notices by Cutera of price increases will be effective 90 days from delivery; i.e., they will be effective on new orders booked after the 90th day following delivery of the notice. All such notices shall be sent to PSS at the following addresses: 
  

			
	Mail:	  	
	PSS World Medical Shared Services	  	PSS Marketing Department
	Pricing Department	  	Attn: Cutera Marketing Manager
	4345 Southpoint Blvd.	  	4345 Southpoint Blvd.
	Jacksonville, Florida 32216	  	Jacksonville, Florida 32216
		
	Email:	  	Facsimile: (904) 332-3452
	psspricing@pssd.com	  	

 8.3 Payment Payment terms are fifty (50) days from the date of
Cutera’s invoice. Delinquent invoices shall have a late payment charge of the lesser of eighteen percent per year or the maximum legal rate assessed against any unpaid balance from the original due date until the date of payment. Cutera may
withhold shipments if PSS is delinquent in making payments or in breach of this Agreement. Until the full purchase price has been received by Cutera, Cutera shall retain a security interest in the Products (and any proceeds thereof) and the right to
immediate possession thereof (without prejudice to any other available remedies). PSS shall, from time to time, take all acts requested by Cutera to transfer, create, perfect, preserve and/or enforce this security interest. 
  

			
	5	  	Cutera / PSS Distributor Agreement October 1, 2006

 8.4 In competitive situations or as part of a large order, PSS and Cutera may agree on a
special price arrangement. 
 8.5 PSS shall set the end user selling prices at the sole judgment of PSS. 
 8.6 If PSS is not maintaining gross margins of at least ten percent, then the parties will discuss the matter in good faith. 

 

	9.	SUPPLY CHAIN SERVICE AND PERFORMANCE REQUIREMENTS 

 9.1 PSS will submit fax or electronic purchase orders to Cutera, and Cutera will respond by fax or e-mail within two business days with a) verification at the item level of shipment date, ship-from location, and shipment mode/carrier, b)
order confirmation number, c) price discrepancies, d) backorders and expected backorder release dates, and e) notification of failure to meet minimum order requirements. 
 9.2 Cutera agrees to ship all orders within fifteen business days, unless otherwise agreed to by the parties. 
 9.3 Cutera will use commercially reasonable efforts to install and complete customer training for the Product(s) within thirty
(30) days of acceptance of an order, or the date quoted or acknowledged. Cutera shall give PSS prompt notice of any prospective failure to meet the acknowledged delivery date. 
 9.4 Cutera shall provide customer service support during its normal business hours. 
 9.5 Cutera shall provide PSS with annual calendars indicating holiday or other closures of shipping and customer service operations, and
will provide at least thirty (30) days advance noticeof any changes to this calendar. 
 9.6 Cutera shall preserve,
package, handle, and pack Products so as to protect the Products from loss or damage during shipment, in conformance with good commercial practice and any applicable government regulations. Cutera shall be responsible for any loss or damage to the
Products during shipment that occurs due to its failure to properly preserve, package, handle, or pack Products. Cutera will ship Products in the final packaging as intended to be received by the end user as ordered. 
 9.7 Cutera will not apply any miscellaneous, transportation, handling, HAZMAT, accessorial, minimum order or pallet charges, surcharges or
fees to any PSS purchase orders or deliveries unless (a) specifically approved in this agreement, and (b) detailed in order acknowledgements in accordance with Section 9.1 above. 
  

	10.	ADVERTISING, PROMOTIONS, TRADEMARKS AND COPYRIGHTED MATERIAL 

 10.1 Cutera agrees to provide sample quantities of current or new sales literature, artwork, advertising materials, promotional plans and other information or programs reasonably related to this Agreement and the
Products (“Advertising Materials”). Cutera warrants that no Advertising Materials will be misleading, deceptive, unfair or 

  

			
	6	  	Cutera / PSS Distributor Agreement October 1, 2006

 
otherwise violate any applicable laws, statutes or regulations. PSS specific literature and advertising will be the responsibility of PSS. 
 10.2 PSS, with input from Cutera, will evaluate requirements and define promotional plans to which PSS will utilize in connection with
marketing and promoting the Products. 
 10.3 Cutera hereby grants PSS a revocable license to use any Cutera trademark or
trade name associated with the Products solely in the advertisement and promotion of the Products during the term of this Agreement. Except as provided in this paragraph, PSS shall have no right, title or interest in or to any patent, trademark of
trade name belonging to Cutera. Cutera hereby grants PSS a revocable license to reproduce materials provided to PSS by Cutera as is reasonable for promotion, demonstration, sale and support of Cutera Products, including but not limited to posting
such materials on the Internet, Intranet, or web. 
  

	11.	SALES, MARKETING AND SUPPORT OBLIGATIONS 

 11.1 PSS shall use commercially reasonable efforts to promote, market and solicit orders for the Products, and to represent the interests of Cutera at all times, to Physicians in the PSS Territory. 
 11.2 PSS shall, at its expense, maintain a properly trained sales force of adequate size to represent and promote the sale of the Products
to Physicians throughout the PSS Territory. All of PSS’s sales staff shall be employees of PSS. PSS recognizes and agrees that Cutera will be working cooperatively with PSS’s sales persons, including efforts to qualify leads and conduct
demonstrations. 
 11.3 PSS shall use commercially reasonable efforts to handle and resolve feedback from its customers.
Subject to the limitations of, and without expanding, Cutera’s product warranty obligations contained in Exhibit 2, attached hereto, Cutera shall (i) have ultimate responsibility for resolution of Product related issues; and,
(ii) provide complete technical support to customers for all Products. 
 11.4 Cutera shall maintain a properly trained
sales force of adequate size to provide marketing, demonstration and sales support for PSS’s sales and distribution efforts under this Agreement. The sales representatives shall be geographically located strategically throughout the United
States and shall be available to PSS as reasonably required in support of PSS’s sales and distribution efforts with respect to Products. 
 11.5 Cutera shall provide demonstrations of the Products to Prospects as needed, and will provide all installation work for Products. Cutera agrees to provide sales and promotional support and after-sale service to
all Prospects and PSS customers with the same diligence, quality and timelines as Cutera generally provides to its Prospects and Customers. 
  

			
	7	  	Cutera / PSS Distributor Agreement October 1, 2006

	12.	AGREEMENTS WITH CUSTOMERS 

 12.1 All sales
and other agreements between PSS and its customers are PSS exclusively, and shall have no effect on the respective obligations of Cutera and PSS under this Agreement. 
  

	13.	QUALITY ASSURANCE 

 13.1 Cutera agrees to
maintain appropriate certification status and compliance with the Food and Drug Administration’s (FDA) Quality System Regulation, the Medical Device Directive and/or all other applicable regulations. As manufacturer, Cutera will comply with all
applicable regulations and standards that pertain to manufacturers for Products. 
 13.2 Upon request, Cutera agrees to
furnish to PSS any information in its possession that is reasonably required to enable PSS to comply with all applicable regulations and standards that pertain to distributors for the Products. 
 13.3 If the Products and/or Territory covered in this Agreement are modified, then Cutera will maintain compliance with all laws and
regulations applicable to manufacturers of Products where Products are manufactured and where Products are sold prior to the time that both Parties agree that the distribution is to commence. 
 13.4 Cutera represents, warrants, and covenants to PSS that all Products have been held under the manufacturer’s recommended
environmental conditions, including Products returned to Cutera from customers. 
 13.5 In the event Cutera installs
electronic products regulated by the FDA, Cutera shall comply with all applicable Federal and State regulations. To the extent required by a government entity, Cutera shall be responsible for the completion and submission of relevant and applicable
records to the FDA. 
 13.6 Cutera agrees to allow reasonable access to federally mandated quality assurance records,
policies, and procedures for FDA regulated Products. Cutera agrees to reasonable access to manufacturing facilities for the purpose of performing vendor certification as required by the FDA. 
  

	14.	MODIFICATION OF PRODUCTS 

 14.1 Cutera
shall provide PSS written notice of all Product discontinuances no less than sixty (60) days prior to the last order date. 
 14.2 Cutera shall provide PSS with written notice of all material Product modifications or material Product packaging modifications not less than thirty (30) days prior to the shipment of Products that contain such modifications.

  

	15.	REPRESENTATIONS AND WARRANTIES 

 15.1
Products sold pursuant to this Agreement will come with Cutera’s then-current product warranty, which will be solely for the benefit of, and assignable to, PSS’ 

  

			
	8	  	Cutera / PSS Distributor Agreement October 1, 2006

 
customers. Cutera’s current product warranty is attached hereto as Exhibit 2; provided, that Cutera may from time to time modify this warranty without
any obligation or liability to PSS, provided that such modifications are applicable to Cutera’s customers generally. If any Product is subject to a mandatory or voluntary recall issued by Cutera, Cutera shall reimburse PSS for any commercially
reasonable and documented direct service and labor costs required to cooperate with such recall. 
 15.2 Cutera represents,
warrants and covenants to PSS that: 
 i. Cutera is and will continue to be a duly formed and validly existing entity in good
standing under the laws of the state of its organization 
 ii. Cutera has the full right, power and authority, corporate
and/or otherwise, to execute and deliver this Agreement and to otherwise consummate the transactions contemplated by this Agreement. 
 iii. The execution, delivery and performance by Cutera under this Agreement, and the transactions and actions contemplated hereunder, have been duly authorized by all necessary actions by Cutera. This Agreement, when duly executed and
delivered, constitutes a valid, legal and binding obligation of Cutera enforceable in accordance with its terms. 
 iv. The
execution, consummation of the transactions contemplated by, and/or compliance with the terms and provisions of this Agreement, will not conflict with, result in a breach of, or constitute a default under any of the terms, conditions or provisions
of Cutera constituent documents or any agreement, lease, indenture, mortgage, deed of trust, land contract, license or other instrument to which Cutera is a party or by which Cutera may be bound or affected or to which Cutera is subject, or any law,
regulation, order, writ, injunction or decree of any court or agency or regulatory body. 
 v. Cutera has permission from the
FDA to sell its Products throughout the United States to or on the order of licensed practitioners. 
 15.3 PSS represents,
warrants and covenants to Cutera that: 
 i. PSS is and will continue to be a duly formed and validly existing entity in good
standing under the laws of the state of its organization 
 ii. PSS has the full right, power and authority, corporate and/or
otherwise, to execute and deliver this Agreement and to otherwise consummate the transactions contemplated by this Agreement. 
 iii. The execution, delivery and performance by PSS under this Agreement, and the transactions and actions contemplated hereunder, have been duly authorized by all necessary actions by PSS. This Agreement, when duly executed and delivered,
constitutes a valid, legal and binding obligation of PSS enforceable in accordance with its terms. 
  

			
	9	  	Cutera / PSS Distributor Agreement October 1, 2006

 iv. The execution, consummation of the transactions contemplated by, and/or compliance
with the terms and provisions of this Agreement, will not conflict with, result in a breach of, or constitute a default under any of the terms, conditions or provisions of PSS constituent documents or any agreement, lease, indenture, mortgage, deed
of trust, land contract, license or other instrument to which PSS is a party or by which PSS may be bound or affected or to which PSS is subject, or any law, regulation, order, writ, injunction or decree of any court or agency or regulatory body.

  

	16.	COMPLAINTS, QUALITY RECORDS AND RECALLS 

 16.1 PSS will notify, in writing, Cutera’s quality assurance department of all Product complaints or any regulatory/conformance issues that may affect the marketability of Products. Cutera shall notify the appropriate regulatory
agent(s) if required and shall conduct any safety investigations or other necessary follow-up activities. PSS will provide any information essential to such activities. Cutera will promptly notify PSS if corrective action is necessary in the
Territory. 
 16.2 In the event of any recall of a Product required by a governmental agency for safety or efficacy reasons,
or requested by Cutera at its sole discretion, Cutera agrees to repair or replace at its own costs and expense all Products subject to the recall and previously delivered to PSS or PSS customers. Cutera also agrees to consult with PSS to establish a
reasonable process for managing the recall. Cutera shall be responsible for all reasonable expenditures incurred by PSS (including, but not limited to shipping, labor and travel costs) consistent with the recall process agreed to by the Parties, and
consistent with HIDA and HDMA industry guidelines. In the event the recall is not required by a governmental agency for safety or efficacy reasons, but is instead requested by Cutera at its sole discretion, Cutera will be responsible for determining
the scope of the recall, including the number of units, timeframe for the recall, and criteria for completion, at no cost or expense to PSS. 
  

	17.	FORCE MAJEURE 

 No Party to this Agreement shall be liable
for failure or delay of performance of any of its obligations hereunder if such failure or delay is due to causes beyond its reasonable control including, without limitation, natural disasters, fires, earthquake or storm, strikes, failures of public
utilities or common carriers, acts of war, or intervention, acts restraints or regulations of any governmental authority, including compliance with any order of any governmental considerations; provided that any such delay or failure shall be
remedied by such Party as soon as possible using commercially reasonable efforts after removal of the cause of such failure. A Party suffering such delay or which expects to suffer such delay shall promptly notify the other Party in writing of the
cause and expected duration of such delay. In the event a delay lasts or is expected to last more than thirty (30) days, then either Party shall have the option to terminate this Agreement upon written notice. 
  

			
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	18.	CONFIDENTIALITY 

 18.1 Return of
Confidential Information. Each party shall return to the other all Confidential Information (as defined below) received from that other party, along with all copies, immediately upon the termination of this Agreement. 
 18.2 Remedies. Each party shall be liable to the other for damages caused by any breach of this Section18 or by any unauthorized
disclosure or use of the other’s Confidential Information by such party or third parties to whom unauthorized disclosure was made. In addition to any other rights or remedies which may be available to it, each party shall be entitled to seek
appropriate injunctive relief or specific performance to prevent unauthorized use or disclosure of Confidential Information. Each party acknowledges and agrees that the unauthorized use or disclosure of the other party’s Confidential
Information will cause irreparable injury to the other party and that money damages will not provide adequate remedy to the other party. 
 18.3 Confidential Information. The business and technical information developed or acquired by, or entrusted by a third party to, each party, including, but not limited to, customer lists, names, contact
information, addresses, telephone numbers, email addresses, Product designs, manufacturing processes, Product pricing, pricing strategies and Pricing Information (as defined and subject to the provisions of Section 18.4, below), business plans,
and all related trade secrets (“Confidential Information”) are the exclusive property of such party, are among such party’s valuable assets, and their value to that party may be lost by their unauthorized use or disclosure to persons
or entities not related to such party. Neither party shall, directly or indirectly, use the other party’s Confidential Information received hereunder (other than directly in connection with its obligations hereunder) or disclose or disseminate
it to any party or entity during the Term of this Agreement or at any time for three years thereafter (subject to the exceptions below), regardless of the reason for such expiration, without the express written consent of the other party. This
obligation of confidentiality shall not apply to any Confidential Information which (i) was properly and lawfully known to the receiving party at the time of receipt without any misconduct on the receiving party’s part; (ii) was in
the public domain at the time of receipt; (iii) becomes public through no wrongful act of the party obligated to keep it confidential; (iv) is properly received by the receiving party from a third party who did not thereby violate any
confidentiality obligations to the disclosing party; or (v) is required by applicable law to be divulged. 
  

	19.	INDEMNIFICATION 

 19.1 Cutera shall, except
as otherwise provided below, indemnify, and hold PSS harmless, and defend or settle any claim made or any suit proceeding, including reasonable attorneys fees, brought against PSS and its Affiliates, arising out of or relating to an allegation that
any Product infringes a patent, copyright, trademark, trade secret, or other intellectual property right of any third party. PSS shall (a) promptly notify Cutera in writing of any such claim, (b) cooperate with Cutera in connection with
the defense of such claim, and (c) give Cutera the sole authority to defend or settle the claim (at Cutera’s expense). Cutera shall pay all damages and costs finally awarded in any such suit or proceeding against PSS, or any settlement
amount required to settle the claim. In the event the Product is held to infringe and the use or sale of said Product is enjoined, Cutera shall have the option at its 

  

			
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own expense, to procure for PSS the right to continue using or selling said Product, or replace same with a non-infringing Product, or modify same so it
becomes non-infringing. In the event Cutera is unable to accomplish either of the foregoing remedies after using commercially reasonable efforts to do so, Cutera shall grant a refund to PSS of the price paid by PSS for any of such Products returned
to Cutera by PSS, but only to the extent such Products were in PSS’ inventory and had not been shipped to a customer site. Notwithstanding anything to the contrary above, in no event shall Cutera have any liability under this Section for any
such claims resulting from (a) modifications to the Products by anyone other than Cutera where the unmodified Products do not infringe and Cutera did not authorize the modification; (b) the combination of the Products with other products
not provided or authorized by Cutera; or (c) use of the Products for purposes for which they were not intended. THE FOREGOING IS CUTERA’S SOLE LIABILITY RELATING TO ANY CLAIMS OF INFRINGEMENT OF ANY THIRD PARTY INTELLECTUAL PROPERTY
RIGHTS. CUTERA EXPRESSLY DISCLAIMS ALL OTHER WARRANTIES, WHETHER EXPRESS OR IMPLIED, RELATING TO CLAIMS THAT ITS PRODUCTS INFRINGE ANY INTELLECTUAL PROPERTY RIGHTS. 
 19.2 Cutera shall indemnify, defend and hold PSS and its Affiliates harmless from and against any and all liabilities, claims, demands,
damages, costs and expenses or money judgments (including reasonable attorneys fees) asserted against, incurred by or rendered against any of them from (a) third party claims or actions for personal injury, death or property damage which arise
out of Cutera’s breach of any of its covenants or representations set forth herein, or a defect due to defective design, parts, packaging, labeling, Cutera provided advertising materials, faulty workmanship of Products of which Cutera is the
manufacturer or is the Party responsible for failure to warn except to the extent that such personal injuries, death or property damage arise out of PSS’s (or its Affiliates) or any third party’s negligence or breach of this Agreement (as
set forth in herein), (b) third party claims or actions arising from Cutera’s negligence, breach of this Agreement or willful misconduct and (c) mandatory or voluntary recalls of any Products. 
 19.3 PSS shall and does hereby agree to indemnify and hold harmless Cutera and its Affiliates from and against any and all liability,
loss, cost, claim, injury, damage, demand or expense (including, without limitation, reasonable attorneys’ fees) of any kind whatsoever arising out of, relating to, on account of, or in connection with (a) any instruction, specification or
labeling supplied by PSS regarding the Product, unless Cutera has concurred in writing with such instruction, specification or labeling; (b) any use of the Product in a manner described by PSS, unless Cutera has prescribed in written materials;
(c) any marketing, sale, installation, servicing or repair of the Product by PSS not in accordance with Cutera’s written consent and procedures; (d) any breach by PSS of this Agreement; or (e) PSS’ negligence or willful
misconduct. This indemnity shall survive the termination or expiration of this Agreement. 
 19.4 The indemnification
obligations under this Agreement shall survive termination or expiration of this Agreement for any reason. 
  

			
	12	  	Cutera / PSS Distributor Agreement October 1, 2006

	20.	LIMITATION OF LIABILITY 

 EXCLUDING CLAIMS FOR INDEMNIFICATION, IN NO EVENT
SHALL EITHER PARTY BE LIABLE TO THE OTHER PARTY FOR ANY INDIRECT, INCIDENTAL, SPECIAL, CONSEQUENTIAL, OR PUNITIVE DAMAGES OF ANY KIND WHATSOEVER INCLUDING BUT NOT LIMITED TO LOST PROFITS, IN CONJUNCTION WITH OR ARISING OUT OF THE PERFORMANCE UNDER
THIS AGREEMENT OR THE USE OR PERFORMANCE OF PRODUCTS AND SUPPORT SERVICES EVEN IF THE OTHER PARTY HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES. 
  

	21.	INTELLECTUAL PROPERTY RIGHTS 

 21.1 All
intellectual property rights relating to Cutera, the Products and this Agreement, including all names, trademarks, copyrights, patents, mask works, trade secrets, know-how, technology, computer software and related documentation and source code and
other intellectual property rights, are and shall remain the property of Cutera and nothing in this Agreement shall be deemed to grant to PSS a license or other right to use Cutera’s intellectual property except as expressly set forth herein.
Cutera hereby grants PSS the right to use its name and trademarks solely in compliance with such rules as Cutera may establish from time to time. PSS will not create or distribute any marketing or promotional material relating to Cutera or the
Products without Cutera’s prior written consent. 
  

	22.	INSURANCE 

 Cutera shall obtain, pay for and maintain the
following insurance coverages: 
 22.1 Comprehensive Commercial General Liability insurance, including contractual liability
insurance and product liability insurance against claims regarding the Products and its activities contemplated by this Agreement, in an amount not less than one million dollars ($1,000,000) Combined Single Limit bodily Injury & Property
Damage Each Occurrence / three millions dollars ($3,000,000) Aggregate, including coverage for products and completed operations, contractual liability insuring the obligations assumed by Cutera under this Agreement, independent contractors, and
personal and advertising injury coverages. 
 22.2 Cutera shall name PSS World Medical Inc. and its Subsidiaries, as an
additional insured with respect to its Commercial General Liability policy. Cutera shall maintain such insurance during the term of this Agreement and thereafter for so long as it maintains insurance for itself covering such activities. Coverage
shall be written on a Standard ISO Occurrence Form CG00010196 or its equivalent. Upon execution of this Agreement, and annually for the term of this Agreement, Cutera will provide certificates and renewal certificates of insurance reflecting such
policy and coverages as required above. Such certificates shall reflect that the underlying policy has been endorsed to provide at least thirty (30) days prior written notice to PSS of the cancellation, non-renewal, reduction or material change
of any such insurance coverage. 
  

			
	13	  	Cutera / PSS Distributor Agreement October 1, 2006

 Please send the Certificate of Liability insurance to: 
 PSS World Medical, Inc. 
 Attn: Compliance Dept., Melanie Goodwin 
 4345 Southpoint Blvd. 
 Jacksonville, FL 32216 
  

	23.	CONFLICT RESOLUTION 

 23.1 Each party shall
designate (in writing, if requested by the other party) a relationship manager responsible for the day to day management and coordination of the party’s performance under this Agreement, and the parties’ communications, transactions and
relationship with each other. The relationship managers shall address conflicts that arise relative to this Agreement. If these relationship managers can not resolve such conflicts, then Cutera and PSS shall promptly establish a review board
comprised of appropriate members of management from Cutera and PSS to resolve the conflict. 
 23.2 In the event that the
review board of the Parties does not resolve a dispute within thirty (30) days from the date the review board is established, then the Parties agree to submit the dispute to non-binding mediation. If the Parties do not resolve the dispute
through mediation within four months from the date such conflict arose, then either of the Parties may elect to pursue any remedies available at law. 
  

	24.	GENERAL 

 24.1 Entire Agreement.
This Agreement constitutes the entire Agreement between the parties concerning the subject matter hereof and supersedes any prior written or verbal agreements or understandings in connection herewith. No amendment, waiver or modification hereto or
hereunder shall be valid unless specifically made in writing and signed by an authorized signatory of each of the parties hereto. No form, invoice, bill of lading, shipping document, order, receipt or other document provided by a Party shall operate
to supercede, modify or amend any provisions of this Agreement, even if the other Party has initialed, signed or otherwise acknowledged such document, unless the document expressly states that it modifies or amends this Agreement and is signed by an
authorized representative of PSS and Cutera. Neither Party’s failure to exercise any of its rights under this Agreement will constitute or be deemed a waiver or forfeiture of those rights. All Exhibits attached to the Agreement shall be deemed
a part of this Agreement and incorporated herein. Terms that are defined in this Agreement, and used in any Exhibit, have the same meaning in the Exhibit as in this Agreement. The provisions of an Exhibit shall prevail over any conflicting
provisions of the body of this Agreement. 
 24.2 Publicity. During the term of this Agreement and for three years
thereafter for any reason, neither party shall make any media release or other public announcement relating to or referring to this Agreement without the other party’s prior written consent. Neither party shall acquire the right to use, and
shall not use, without prior written consent, the terms or existence of this Agreement, the names, trade names, trademarks, service marks, artwork, designs, or copyrighted materials, of the other party, its related or subsidiary companies, parent,
employees, directors, shareholders, assigns, successors or licensees: (a) in any advertising, publicity, press release, client list, presentation or promotion; (b) to express or to imply any endorsement of the other party; or (c) in any
manner other than expressly in accordance with this Agreement, except when required or necessitated by applicable law. 
  

			
	14	  	Cutera / PSS Distributor Agreement October 1, 2006

 24.3 Notices. All notices and other communications required or permitted hereunder
shall be in writing and shall be mailed by registered or certified mail or delivered either by hand or by messenger, or sent via fax, addressed to the address set forth at the foot of this Agreement. Any notice or other communication so addressed
and mailed by registered or certified mail (in each case, with return receipt requested) shall be deemed to be delivered and given when so mailed. Any notice or other communication so addressed and delivered by hand, by messenger or by fax shall be
deemed to be given when actually received by the addressee. 
 24.4 Venue and Jurisdiction. The laws of the State of
New York will govern any disputes arising in connection with this Agreement, without regard to its conflicts of laws, rules or principles. 
 24.5 Attorneys’ Fees. In any action relating to this Agreement, the prevailing party shall be entitled to recover reasonable attorneys’ fees and other costs incurred therein, in addition to any other
appropriate relief. 
 24.6 Severability. If for any reason any provision of this Agreement shall be deemed by a court
of competent jurisdiction to be legally invalid or unenforceable, the validity of the remainder of the Agreement shall not be affected and the offending provision shall be deemed modified to the minimum extent necessary to make it consistent with
applicable law, and, in its modified form, the provision shall then be enforceable and enforced. 
 24.7 Captions. The
section headings and captions of this Agreement are for convenience and reference only and in no way define, limit or describe the scope or intent of this Agreement nor substantively affect it in any way. 
 24.8 Survival. Sections 4.2, 5.4, 8, 12, 18, 19, 20, 21, 23 and 24, and all other provisions that by their terms the parties’
reasonably contemplate as remaining in effect after termination or expiration of this Agreement, shall survive termination or expiration of this Agreement for any reason. 
 IN WITNESS WHEREOF, the parties have executed this Agreement to be executed by their duly authorized representatives. 
  

									
	 Cutera, Inc.
 a Delaware corporation
	 		 	 PSS WORLD MEDICAL SHARED
 SERVICES, INC., a Florida corporation

					
	 By:
	 	 /s/ Ronald J. Santilli
	 		 	 By:
	 	 /s/ Eric S. Miller

	 Printed:
	 	 Ronald J. Santilli
	 		 	 Printed:
	 	 Eric S. Miller

	 Its:
	 	 VP & CFO
	 		 	 Its:
	 	 VP of Finance — PSS

  

			
	15	  	Cutera / PSS Distributor Agreement October 1, 2006

 EXHIBIT 1 
 PRODUCTS AND PRICE LIST 
  

			
	

	  	2006 PSS PRICING MATRIX CARD
	  	Effective October 1, 2006

 Products are sold with a standard 1 year warranty 
  

															
	  	  	 	  	Equipment
Pricing	  	Annual Service Contract Pricing
	 EQUIPMENT:
	  	 	  	 [***]
	  	 [***]
	  	 [***]
	  	 [***]
	  	 [***]
	  	 [***]

	 CoolGlide Platform: 
	  		  		  		  		  		  		  	
	 CV
	  		  	[***]	  	[***]	  	[***]	  	[***]	  	[***]	  	[***]
	 Excel
	  		  	[***]	  	[***]	  	[***]	  	[***]	  	[***]	  	[***]
	 Vantage
	  		  	[***]	  	[***]	  	[***]	  	[***]	  	[***]	  	[***]
	 Solera Platform (Includes cart): 
	  		  	[***]	  	[***]	  	[***]	  	[***]	  	[***]	  	[***]
	 Solera Opus with 1 flashlamp handpiece
	  		  	[***]	  	[***]	  	[***]	  	[***]	  	[***]	  	[***]
	 Solera Titan with Titan S handpiece
	  		  	[***]	  	[***]	  	[***]	  	[***]	  	[***]	  	[***]
	 Solera Titan with Titan V handpiece
	  		  	[***]	  	[***]	  	[***]	  	[***]	  	[***]	  	[***]
	 Solera Titan with Titan XL handpiece
	  		  	[***]	  	[***]	  	[***]	  	[***]	  	[***]	  	[***]
	 Xeo Platform (with Navigation):
	  		  	[***]	  	[***]	  	[***]	  	[***]	  	[***]	  	[***]
	 Xeo Light - IPL only with 1 flashlamp handpiece
	  		  	[***]	  	[***]	  	[***]	  	[***]	  	[***]	  	[***]
	 Xeo Rejuvenation w/FV, Genesis, 1 flashlamp rejuvenation handpiece
	  	[***]	  	[***]	  	[***]	  	[***]	  	[***]	  	[***]
	 Xeo Vantage - Yag only (a) 
	  		  	[***]	  	[***]	  	[***]	  	[***]	  	[***]	  	[***]
	 Xeo Core w/HR, Genesis, and 1 flashlamp handpiece
	  		  	[***]	  	[***]	  	[***]	  	[***]	  	[***]	  	[***]
	 Xeo Hair w/HR, FV, LV, and ProWave 770 handpiece
	  		  	[***]	  	[***]	  	[***]	  	[***]	  	[***]	  	[***]
	 Xeo Full w/HR, FV, LV, Genesis, and 1 flashlamp handpiece
	  	[***]	  	[***]	  	[***]	  	[***]	  	[***]	  	[***]
	 All XEO options can also include Titan:
	  	Titan S	  	[***]	  	[***]	  	[***]	  	[***]	  	[***]	  	[***]
		  	Titan V	  	[***]	  	[***]	  		  		  		  	
		  	Titan XL	  	[***]	  	[***]	  		  		  		  	

  

	[***]	

  

	[***]	

 Titan handpieces are not covered under the system
contract or warranty, they remain limited to the shot count warranty. 
  

			
	 UPGRADES:
	  	Requirements and Eligibility:
		
		  	1) Service must be contacted for pricing when equipment is not under warranty or service contract.
		
		  	2) Upgrades can only be made to CoolGlide and the Xeo Full platforms.
		
		  	3) 90 day warranty on all upgraded parts

 SYSTEM UPGRADE PRICING: 
  

																	
	 TO PLATFORM---->
	  	EXCEL	  	VANTAGE	  	XEO Full
	FROM PLATFORM	  	 [***]
	  	 [***]
	  	 [***]
	  	 [***]
	  	 [***]
	  	 [***]

	 CoolGlide Platform:
	  		  		  		  		  		  	
	 CV
	  	[***]	  	[***]	  	[***]	  	[***]	  	[***]	  	[***]
	 Excel
	  	[***]	  	[***]	  	[***]	  	[***]
	 Vantage
	  		  		  	[***]	  	[***]
	 Solera Platform:
	  		  		  		  	
	 Solera Opus
	  		  		  	[***]	  	[***]
	 Xeo Platform: 
	  		  		  		  	
	 Xeo Light - IPL only with 1 flashlamp handpiece
	  		  		  	[***]	  	[***]
	 Xeo Rejuvenation w/FV, Genesis, 1 flashlamp rejuvenation handpiece
	  		  		  	[***]	  	[***]
	 Xeo Vantage - Yag only
	  		  		  	[***]	  	[***]
	 Xeo Core w/HR, Genesis, and 1 flashlamp handpiece
	  		  		  	[***]	  	[***]
	 Xeo Hair w/HR, FV, LV, and ProWave 770 handpiece
	  		  		  	[***]	  	[***]

 HANDPIECE, AND TITAN FIELD UPGRADE PRICING: 
  

					
	 	  	 [***]
	  	 [***]

	 IPL handpiece field upgrades (one handpiece only)
	  	[***]	  	[***]
	 Titan XL handpiece upgrade for existing Titan cust.
	  	[***]	  	[***]
	 Add Titan with Titan S handpiece to XEO platform
	  	[***]	  	[***]
	 Add Titan with Titan V handpiece to XEO platform
	  	[***]	  	[***]
	 Add Titan with Titan XL handpiece to XEO platform
	  	[***]	  	[***]

 NAVIGATION AND LIMELIGHT UPGRADE INTRODUCTORY PRICING FOR XEO ONLY: 
  

					
	 	  	Customer shipment date
	 	  	 [***]
	  	 [***]

	 Navigation
	  	[***]	  	[***]
	 LimeLight
	  	[***]	  	[***]
	 Navigation and LimeLight
	  	[***]	  	[***]
	 Navigation color scheme
	  	[***]	  	[***]

 SOFTWARE UPGRADES: 
  

					
	 	  	Pricing (USD)
	 	  	 [***]
	  	 [***]

	 Factory software upgrades for using handpieces interchangeably
	  		  	
	 Non-Titan applications
	  	[***]	  	[***]
	 Titan applications
	  	[***]	  	[***]
	 Field software upgrades for using handpieces interchangeably
	  		  	
	 Non-Titan applications
	  	[***]	  	[***]
	 Titan applications
	  	[***]	  	[***]

 Accessories and replacement handpieces 
  

					
	  	  	Pricing (USD)
	 ACCESSORIES:
	  	 [***]
	  	 [***]

	 Omnilux system
	  	[***]	  	[***]
	 Solera Cart
	  	[***]	  	[***]
	 Cutera Success 1-day training
	  	[***]	  	[***]
	 Cutera Success 2-day training
	  	[***]	  	[***]
	 3D Symposium
	  	[***]	  	[***]
	 1st additional Flashlamp handpiece (a)
	  	[***]	  	[***]
	 2nd additional flashlamp handpiece
	  	[***]	  	[***]
	 Titan XL handpiece (b)
	  	[***]	  	[***]

  

	(a)	Pricing applies when shipped with system from the factory 

  

	(b)	Pricing applies when shipped with Titan S or Titan V from factory 

  

	[*]  =	CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO
RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED. 

  

			
	16	  	Cutera / PSS Distributor Agreement October 1, 2006

 EXHIBIT 2 
 CUTERA’S PRODUCT WARRANTY 
 Cutera warrants solely to the end-user customer, for one year from initial shipment
of a Product manufactured by Cutera (but, with respect to a non-laser Handpiece, for the certain period from shipment or for the certain number of shots of that handpiece following its shipment, whichever is first to occur, all as provided on the
face of the applicable purchase agreement), that such Product will be free from defects in workmanship and materials. This warranty is subject to proper use, operation and maintenance of the Product in accordance with the operator manual, and shall
not apply if the Product has been damaged after shipment to the customer, or misused, altered, disassembled or serviced by any person other than Cutera. Cutera’s sole obligation under this warranty shall be, at Cutera’s option, to repair
or replace any Product defect that was present when the Product was first shipped. Products repaired or replaced under warranty and components thereof will be warranted as provided in this subsection for the remainder of the original Product’s
original warranty period. Product upgrades and the underlying system consoles (which exclude handpieces) will be warranted as provided in this subsection for the remainder of the consoles’ original warranty period. Notwithstanding anything to
the contrary: (i) software and firmware licensed herein will be warranted as provided in this subsection for ninety days from shipment; and, (ii) Cutera makes no warranties with respect to a Product’s removable hand piece window, or to Products
not manufactured by Cutera. THE FOREGOING PRODUCT WARRANTIES AND REMEDIES ARE EXCLUSIVE AND IN LIEU OF ALL OTHERS. EXCEPT AS SO STATED, CUTERA DISCLAIMS ALL PRODUCT WARRANTIES, EXPRESS AND IMPLIED, INCLUDING IMPLIED WARRANTIES OF MERCHANTABILITY AND
FITNESS FOR A PARTICULAR PURPOSE. 
  

			
	17	  	Cutera / PSS Distributor Agreement October 1, 2006EXHIBIT 10.1

 Exhibit 10.1 
 EXECUTIVE EMPLOYMENT AGREEMENT 
 EMPLOYMENT AGREEMENT (the “Agreement”), as of the
2nd day of November, 2006 by and between ANDREA ELECTRONICS CORPORATION (the “Company”), a New York corporation, and DOUGLAS J. ANDREA (the “Executive”). 
 WITNESSETH: 
 WHEREAS, the Company desires to continue the employment of
the Executive and to enter into an employment agreement embodying the terms of such continued employment; 
 WHEREAS, the Executive
desires to enter into this Agreement and to accept such employment, subject to the terms and provisions of this Agreement; 
 NOW,
THEREFORE, in consideration of the premises and mutual covenants contained herein and for other good and valuable consideration, the receipt of which is mutually acknowledged, the Company and the Executive (individually a “Party” and
together the “Parties”) agree as follows: 
  

	1.	Definitions. 

 (a) “Base Salary”
shall mean the Executive’s base salary in accordance with Section 4(a) below. 
 (b) “Board” shall mean the Board of
Directors of the Company. 
 (c) “Business” shall mean the design, development and manufacture of state-of-the-art microphone
technologies and products for enhancing speech-based applications and audio applications software and communications that require high quality, clear voice signals primarily for the following markets: (i) personal computing (primarily for
speech recognition applications and voice communication over the Internet); (ii) audio and video conferencing; (iii) in-vehicle communications (to enable untethered, hands-free communication); and (iv) call centers. 
 (d) “Cause” shall mean that the Board reasonably concludes, in good faith and after investigation, that: (i) the Executive engaged in
conduct which is a felony under the laws of the United States or any state or political subdivision thereof; (ii) the Executive engaged in conduct constituting breach of fiduciary duty or breach of the duty of loyalty, willful misconduct
relating to the Company (including acts of employment discrimination or sexual harassment), embezzlement, or fraud; (iii) the Executive breached his obligations or covenants under this Agreement in any material respect; (iv) any material
violation by the Executive of any law or regulation applicable to the business of the Company or any of its affiliates; (v) the Executive substantially and willfully refused to follow a proper directive of the Board within the scope of the
Executive’s duties (which shall be capable of being performed by the Executive with reasonable effort) after
written notice from the Board specifying the performance required and the Executive’s failure to perform within 30 days after such notice; (vi) the Executive engaged in an act or acts of dishonesty or misrepresentation that materially
affects the business or the financial condition of the Company; or (vii) the Executive’s abuse of alcohol or drugs that, 

 
in the Company’s reasonable judgment, materially impairs his ability to perform his duties and responsibilities hereunder or endangers other individuals
in the workplace. 
 (e) “Code” shall mean the Internal Revenue Code of 1986, as amended from time to time. 
 (f) “Date of Termination” shall mean the effective date of the Executive’s termination of employment for any reason. 
 (g) “Disability” or “Disabled” shall mean the failure of the Executive due to illness, injury, or physical or mental incapacity to
carry out effectively the Executive’s duties with respect to the Company for a period of six (6) consecutive months or nine (9) months in any eighteen-month (18) consecutive period. 
 (h) “Effective Date” shall mean the date of this Agreement as first written above. 
 (i) “Term of Employment” shall mean the period specified in Section 2 below. 
 (j) “Position” shall mean the terms specified in Section 3 below. 
  

	2.	Term of Employment. 

 The Company hereby
employs the Executive, and the Executive hereby accepts such employment, for a term commencing on the Effective Date and ending on July 31, 2008 (the “Term”), subject to earlier termination as provided in Section 6 below. The
Agreement shall be subject to renewal as approved by the Compensation Committee of the Board of Directors. 
  

	3.	Position, Duties, and Responsibilities. 

 On
or about the Effective Date and continuing for the remainder of the Term of Employment, the Executive shall be employed as the Chief Executive Officer and President of the Company. The Executive shall be nominated for election as a member of the
Company’s Board of Directors (the “Board”), and the Company shall defend, hold harmless, and indemnify the Executive from any cost, liability or judgment incurred by the Executive as a result of his actions or inactions as a member of
the Board, so long as they are in good faith. The Executive shall serve the Company and its affiliates faithfully, conscientiously and to the best of the Executive’s ability, shall promote the interests and reputation of the Company and its
affiliates and shall perform his duties hereunder in accordance with the policies and procedures of the Company as in effect from time to time. Unless prevented by sickness or Disability, the Executive shall devote all of the Executive’s time,
attention, knowledge, energy and skills, during normal working hours, and at such other times as the Executive’s duties may reasonably require, to the duties of the Executive’s employment; provided, however, that this Agreement shall not
be interpreted as: (a) prohibiting the Executive from, in accordance with the policies and procedures of the Company, managing his personal affairs, engaging in charitable or civic activities; or (b) subject to prior approval of the
Company and any regulatory or self-regulatory process which may be required, serving as a director of any other corporation or business entity 

  

 2 

 
not affiliated with or in competition with the Company or its affiliates, so long as such activities do not interfere in any material respect with the
performance of the Executive’s duties and responsibilities hereunder. 
 The Executive, in carrying out his duties under this Agreement,
shall report to the Board. The Executive’s office shall be located at the Company’s headquarters, which is currently located at 65 Orville Drive, Suite One, Bohemia, NY 11716, or within a thirty-mile radius thereof. 
  

	4.	Compensation and Benefits. 

 (a) Base
Salary. 
 From the effective date through July 31, 2008, the Company shall pay the Executive an annual Base Salary (“Base
Salary”) of $300,000. Base Salary shall be payable in accordance with the Company’s payroll practices with respect to senior executives as in effect from time to time. Upon the execution of this agreement, the Executive shall be due a
salary adjustment to reflect the increase from the actual salary paid and the Base Salary from the August 1, 2006 through the effective date. 
 (b) Bonus Payments. 
 The Executive shall be eligible to receive both a quarterly performance bonus and an annual
performance bonus. 
 (1) Quarterly Bonus. The Executive shall be eligible to receive a quarterly bonus equal to 25% of the
Company’s pre-bonus net after tax quarterly earnings in excess of $25,000 for a total quarterly bonus amount not to exceed $12,500. For example, if the Company has quarterly net earnings equal to $60,000, the maximum quarterly bonus payable
would be $8,750 (($60,000-$25,000) × 25%). Any bonus shall be payable as soon as the Company’s cash flow permits. 
 (2) Annual Bonus. The Executive shall be eligible to receive an annual bonus equal to 10% of the Company’s annual pre-bonus net after tax earnings in excess of $300,000. For example, if the Company had annual pre-bonus net earnings
equal to $450,000, the maximum annual bonus payable would be $15,000 (($450,000-$300,000) × 10%). Any bonus shall be payable as soon as the Company’s cash flow permits. 
 All bonus determinations or any additional bonus in excess shall be made in the sole discretion of the Compensation Committee. The
Executive shall not participate in any deliberations or determinations of the Board or Compensation Committee concerning his bonus. Any bonus shall be prorated: (i) through the Date of Termination in the event that the Executive’s
employment is terminated for any reason by either the Company or the Executive; and/or (ii) for any leave of absence taken in the year for which the bonus is awarded to the extent permitted by law. Both the first and last quarterly bonus, if
any, and the annual bonus for 2006 and 2008 shall be pro-rated to coincide with the Company’s quarterly and annual financial reporting 
  

 3 

 (c) Long-Term Incentive Compensation Program. 
 Subject to the terms and conditions of the Andrea Electronics Corporation 1998 Stock Plan (the “Plan”) , the Company will grant the Executive
one million (1,000,000) stock options upon execution of this Agreement and, subject to the approval of the shareholders of a new plan, the Board or Compensation Committee will recommend a second grant of one million (1,000,000) stock
options as soon as practicable after such shareholder approval of a new plan, equal to the fair market value of the traded shares as determined on or about the date of each grant(s). The options shall vest ratably over a 3-year period, 33.3% on each
August 1st following the contract Effective Date. For example, if all options are granted prior to July 31,
2007, they shall vest 33.3% on August 1, 2007, 66.6% on August 1, 2008, and 100% on August 1, 2009. 
 Notwithstanding any
other provision of this Section 4(c) to the contrary: (i) upon the Executive’s Termination without Cause or Resignation With the Company’s Consent (defined in Section 6(d) below), the Executive’s stock options will vest
immediately and shall be exercisable in accordance with Section 6(d) below; (ii) upon a Change in Control (defined in Section 6(e) below) the Executive’s stock options will vest immediately and shall be exercisable in accordance
with Section 5(d) below; and (iii) in the event that the Executive terminates his employment for any reason other than as provided in Sections 6(d) and 6(e) below, all unvested options shall be treated in accordance with the terms and
conditions of the Plan. 
 (d) Employee Benefit Programs. 
 During the Term of Employment, the Executive shall be eligible to participate in the various benefit programs, including health, medical, and accident
benefits, applicable to similarly situated senior executives of the Company subject to and in accordance with the terms and conditions of such plans as are in effect from time to time. During the Term of Employment, the Company shall maintain the
current life insurance policy in effect for the Executive at the Company’s expense except if the Executive is terminated for cause as defined in paragraph 3 of this Agreement. 
 (e) Reimbursement of Business Expenses. 
 During the Term of Employment, the Executive is authorized to incur reasonable business expenses in carrying out his duties and responsibilities under this Agreement, and the Company shall reimburse him for all such reasonable business
expenses reasonably incurred in connection with carrying out the business of the Company, subject to and in accordance with the terms and conditions of the policies applicable to similarly situated senior executives of the Company regarding such
expenses as are in effect from time to time. 
 (f) Vacation. 
 During the Term, the Executive shall be entitled to twenty (20) days of paid vacation annually. Any accrued but unused vacation days may be rolled
over to the next 12-month period, provided that the number of unused vacation days for any period shall not exceed forty (40) vacation days. All vacation leave is subject to and in accordance with the vacation policies of the Company with
respect to senior executives as are in effect from time to time; provided, 

  

 4 

 
however, that the Executive shall be entitled to payment of any accrued but unused vacation, if any, at the Date of Termination. 
  

	5.	Change in Control. 

 (a) For purposes hereof,
a “Change in Control” shall be defined as: 
 (i) the acquisition by any individual, entity or group (within the
meaning of Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) (a “Person”) of beneficial ownership (within the meaning of Rule 13D-3 promulgated under the Exchange Act),
directly or indirectly of 50% or more of either (a) the then outstanding shares of common stock of the Company (the “Outstanding Company Common Stock”) or (b) the combined voting power of the then outstanding voting securities of
the Company entitled to vote generally in the election of Directors (the “Outstanding Company Voting Securities”); provided, however, that for purposes of this subsection (1), the following acquisitions shall not constitute a Change of
Control; (1) any acquisition directly from the Company, (2) any acquisition by the Company, (3) any acquisition by any employee benefit plan (or related trust) sponsored or maintained by the Company or any corporation controlled by
the Company, or (4) any acquisition by any corporation pursuant to a transaction which complies with clauses (A), (B) and (C) of subsection (iii) below; or 
 (ii) individuals who, as of the date hereof, constitute the Board of Directors of the Company (the “Incumbent Board”) cease for
any reason to constitute at least a majority of the Incumbent Board, provided, however, that any individual becoming a director subsequent to the date hereof whose election or nomination for election by the Company’s shareholders was approved
by a vote of at least a majority of the directors then comprising the Incumbent Board shall be considered as though such individual were a member of the Incumbent Board, but excluding, for this purpose, any such individual whose initial assumption
of office occurs as a result of an actual or threatened election contest with respect to the election or removal of directors or other actual or threatened solicitation of proxies or consents by or on behalf of a Person other than the Incumbent
Board; or 
 (iii) consummation of a reorganization, merger, consolidation, or sale or other disposition of all or
substantially all of the assets of the Company (a “Business Combination”), in each case, unless, following such Business Combination, (A) all or substantially all of the individuals and entities who were the beneficial owners of the
Outstanding Company Common Stock and Outstanding Company Voting securities, respectively, immediately prior to such Business Combination beneficially own, directly or indirectly, more than 60% of the then outstanding shares of common stock and the
combined voting power, respectively, of the then outstanding voting securities entitled to vote generally in the election of directors, as the case may be, of the corporation resulting from such Business Combination (including, without limitation, a
corporation which as a result of such transaction owns the Company or all or substantially all of the Company’s assets either directly or through one or more subsidiaries) in substantially the same proportions as their ownership, immediately
prior to such Business Combination of the Outstanding Company Common Stock and Outstanding Company Voting Securities, as the case may be, (B) no Person (excluding any employee benefit plan (or related trust) of the Company or such corporation
resulting from such Business Combination) 

  

 5 

 
beneficially owns, directly or indirectly, 20% or more of, respectively, the then outstanding shares of common stock of the corporation resulting from such
Business Combination or the combined voting power of the then outstanding voting securities of such corporation except to the extent that such ownership existed prior to the Business Combination, and (C) at least a majority of the members of
the board of directors of the corporation resulting from such Business Combination were members of the Incumbent Board at the time of the execution of the initial agreement, or of the action of the Incumbent Board, providing for such Business
Combination; or 
 (iv) approval by the shareholders of the Company of a complete liquidation or dissolution of the Company.

 (b) All restrictions on the restricted stock then held by the Executive will lapse immediately, all stock options and stock
appreciation rights then held by the Executive will become immediately vested and exercisable and any performance shares or units then held by the Executive will vest immediately, in full, in the event of a Change in Control and shall remain
exercisable as provided in the grants and under the Plan. 
  

	6.	Termination of Employment. 

 (a)
Termination of Employment Due to Death. In the event of the Executive’s death during the Term of Employment, the Term of Employment shall end as of the date of the Executive’s death and his estate and/or beneficiaries, as the case
may be, shall thereupon be entitled to the following: 
 (i) Base Salary earned but not paid prior to the date of his death;

 (ii) Any annual and quarterly bonuses under Section 4(b) with respect to any year prior to the year of his death which
have not yet been paid, together with the prorated portion through the date of his death of the Executive’s annual and quarterly bonuses earned but unpaid for the year of his death; 
 (iii) any amounts earned, accrued, or owing to the Executive but not yet paid under Section 4(d)-(f) above, subject to the terms
and conditions of the applicable benefit plans and programs; 
 (iv) such other or additional benefits, if any, as are
provided under applicable plans, programs and/or arrangements of the Company; and 
 (v) any unexercised or unvested stock
options shall remain exercisable or vest upon the Executive’s death only to the extent provided in the applicable option plan and option agreements. 
 (b) Termination of Employment Due to Disability. Either the Company or the Executive may terminate the Executive’s employment due to Disability during the Term of Employment upon written notice to the
other Party in accordance with Section 20 below. The Term of Employment shall end as of the Date of Termination specified in the notice, and the 

  

 6 

 
Executive shall thereupon be entitled to the following (in addition to the benefits due him under the then current disability programs of the Company, if
any): 
 (i) Base Salary earned but not paid prior to the Date of Termination; 
 (ii) any annual and quarterly bonuses under Section 4(b) with respect to any year prior to the year of the Date of Termination which
have not yet been paid together with the prorated portion through the Date of Termination of the Executive’s annual and quarterly bonuses earned but unpaid for the year of his Termination; 
 (iii) any amounts earned, accrued or owing to the Executive but not yet paid under Section 4(d)-(f) above, subject to the terms
and conditions of the applicable benefit plans and programs; 
 (iv) such other or additional benefits, if any, as are
provided under applicable plans, programs and/or arrangements of the Company; and 
 (v) any unexercised or unvested stock
options shall remain exercisable or vest upon the Executive’s termination only to the extent provided in the applicable option plan and option agreements. 
 (c) Termination of Employment by the Company for Cause. The Company may terminate the Executive’s employment for Cause during the Term of Employment following prior written notice to the Executive which
will be effective ten (10) calendar days after the delivery of such notice to the Executive. If the Executive’s employment is so terminated by the Company, the Term of Employment shall end as of the effective date of the notice and the
Executive shall thereupon be entitled to the following: 
 (i) Base Salary earned but not paid prior to the Date of
Termination; 
 (ii) any annual and quarterly bonuses under Section 4(b) with respect to any year prior to the year of
the Date of Termination which have not yet been paid, together with the prorated portion through the Date of Termination of the Executive’s quarterly bonus; 
 (iii) any amounts earned, accrued or owing to the Executive but not yet paid under Section 4(d)-(f) above, subject to the terms
and conditions of the applicable benefit plans and programs; 
 (iv) such other or additional benefits, if any, as are
provided under applicable plans, programs and/or arrangements of the Company; and 
 (v) any unexercised or unvested stock
options shall remain exercisable or vest upon the Executive’s termination only to the extent provided in the applicable option plan and option agreements. 
 (d) Termination Of Employment By The Company Without Cause Or Resignation With The Company’s Consent. The Company may terminate the Executive’s employment 

  

 7 

 
without Cause during the Term of Employment following prior written notice to the Executive which will be effective no less than thirty (30) calendar
days after the delivery of such notice to the Executive or the Executive may resign with the Company’s consent. The Term of Employment shall end as of the Date of Termination specified in the notice. If the Executive’s employment is so
terminated by the Company without cause or he resigns with the Company’s consent, other than due to death or Disability or Termination by the Company for cause or as provided in Section 6(e) below, the Executive shall thereupon be entitled
to the following: 
 (i) Base Salary earned but not paid prior to the Date of Termination; 
 (ii) any annual and quarterly bonuses under Section 4(b) with respect to any year prior to the year of the Date of Termination which
have not yet been paid, together with the prorated portion through the Date of Termination of the Executive’s annual and quarterly bonuses earned but unpaid for the year of his Termination; 
 (iii) any amounts earned, accrued or owing to the Executive but not yet paid under Section 4(d)-(f) above, subject to the terms
and conditions of the applicable benefit plans and programs; 
 (iv) such other or additional benefits, if any, as are
provided under applicable plans, programs and/or arrangements of the Company; 
 (v) all granted but unvested stock options
shall immediately vest in full and shall be exercisable in accordance with the terms and conditions of the Plan; and 
 (vi)
provided that the Executive executes a separation agreement and general release in the form annexed as Exhibit A and in accordance with the time frames and conditions set forth therein, the Company shall also pay the Executive: (1) a severance
payment equal to six (6) months of the Executive’s most recent Base Salary plus the six (6) months prorated portion of the Executive’s most recent annual and quarterly bonuses, payable in equal amounts over a period of six
(6) months in accordance with the Company’s normal payroll practices as are in effect from time to time; and (2) in addition, the Company shall arrange and pay for continuation of health insurance coverage for the Executive, and his
spouse and dependents for a period of twelve (12) months from the Date of Termination and shall, for a period of eighteen (18) months from the expiration of such six month period, provide COBRA continuation coverage to the Executive.

 (e) Termination Following a Change in Control. If, during the Term of Employment, the Company shall, for its convenience,
materially change the Executive’s Position or terminate the Executive’s employment within the term of the Agreement or twelve (12) months after the term of the Agreement and following a Change in Control, then the Company shall
provide the Executive, or in the event of his subsequent death, his beneficiary or beneficiaries, or his estate, as the case may be: 
 (i) Those sums described in Section 6(d)(i), (ii), (iii), (iv) and (v), which shall be immediately due and payable; 
  

 8 

 (ii) a sum equal to two (2) years of the Executive’s most recent Base Salary
plus a pro rated portion of the Executive’s most recent annual and four quarterly bonuses paid immediately preceding the Change of Control. Such payments shall be paid in equal monthly installments during the twenty-four (24) month period
following the Executive’s termination; and 
 (iii) continuation for two (2) years of health and medical benefits
coverage substantially equivalent to the coverage maintained by the Company for the Executive prior to his termination, except to the extent such coverage may be changed in its application to all Company employees on a nondiscriminatory basis, and
shall, for a period of eighteen (18) months from the expiration of such two (2) year period, provide COBRA continuation coverage, if available, to the Executive. Notwithstanding the foregoing, such coverage shall cease in the event that
the Executive becomes covered by comparable coverage from another employer. In no event is the Executive entitled to receive cash consideration in lieu of the continued coverage provided by this subparagraph 6(e)(iii). 
 All stock options, whether then vested or unvested, shall vest and/or become exercisable in accordance with Section 5(b). 
 (f) Termination of Employment by the Executive. The Executive may voluntarily terminate his employment during the Term of Employment (other than
for death or Disability) by giving at least 30 days prior written notice to the Company in accordance with Section 20 below. The Executive’s employment shall terminate upon the date specified in his notice of termination. Thereafter, the
Executive shall thereupon be entitled to the same payments and benefits as provided in Section 6(c) above. All unexercised or unvested options shall be subject to the terms and conditions of their grant and the Plan. 
 (g) Non-renewal. In the event this Agreement is not renewed, the Executive’s employment shall terminate at the expiration of the Term, and
the Executive shall thereupon be entitled to through the date of termination those sums described in Section 6(c) above, which shall be immediately due and payable. All benefits shall cease in accordance with the terms of the applicable Company
policies or plans, and any unexercised or unvested stock options shall remain exercisable or vest only to the extent provided in the applicable option plan and option agreements. In no event shall the Executive be entitled to any severance payments
or other compensation other than those described in Section 6(c) above. 
 (h) Upon termination of the Executive’s employment for
any reason or if the Agreement is not renewed, whichever is earlier, the Executive agrees to immediately resign all director and officer positions with the Company effective as of the Date of Termination, or expiration of the Term, as applicable.
The Board may, in its discretion, accept Executive’s resignation or invite Executive to remain on the Board. 
  

	7.	Confidentiality; Assignment of Rights. 

 (a)
The Executive acknowledges that during the Term of Employment, the Company will disclose to and entrust to him trade secrets, and other confidential and proprietary information, including, but not limited to: (i) information disclosed to it by
third parties (whether pursuant to a confidentiality agreement or otherwise); (ii) knowledge of certain proprietary 

  

 9 

 
information and trade secrets concerning the past, present, and future strategies, plans, business activities, finances, methods, operations, customers,
accounts, service, product information, and employees of the Company and its customers, including, but not limited to: certain technical know-how and specifications, copyrights, training, software source and object codes, technology, research,
market information and data, formulas, processes, methods, machines, manufacturers, products, compositions, developments, discoveries, plans, customer lists, customers, partners, pricing, business planning, vendors, costs, pricing, other activities
of the Company and its customers, and information (e.g., customer or client lists, names, addresses, telephone numbers, identity of contact persons, and financial information) with respect to individuals and entities who have entered into, or
have been solicited to enter into, relationships with the Company; and (iii) other non-public, proprietary or confidential information of the Company, its affiliates or their respective customers or clients (collectively “Business
Information”). The Executive acknowledges and agrees that all Business Information is and shall remain the sole property of the Company. 
 (b) Except as required by law, the Executive will not, whether during or after the termination or cessation of his employment hereunder, reveal to any person, association or company any of the trade secrets or confidential information
concerning the organization, business, or finances of the Company so far as they have come or may come to his knowledge, except as may be required in the ordinary course of performing his duties as an employee of the Company or except as may be in
the public domain through no fault of the Executive or as required to be disclosed by law or court order, and the Executive shall keep secret all matters entrusted to him and shall not use or attempt to use any such information in any manner which
may injure or cause loss or may be calculated to injure or cause loss whether directly or indirectly to the Company. 
 (c) The Executive
acknowledges and agrees that during his employment hereunder he shall not make, use, or permit to be used any notes, memoranda, drawings, specifications, programs, data, or other materials of any nature relating to any matter within the scope of the
business of the Company or concerning any of its dealings or affairs otherwise than for the benefit of the Company. The Executive further acknowledges and agrees that he shall not, after the termination or cessation of his employment hereunder, use
or permit to be used any such notes, memoranda, drawings, specifications, programs, data, other materials, or Business Information it being agreed that any of the foregoing shall be and remain the sole and exclusive property of the Company and that
immediately upon the termination or cessation of his employment he shall deliver all of the foregoing, and all copies thereof, to the Company, at its main office. 
 (d) If at any time or times during his employment hereunder, the Executive shall (either alone or with others) make, conceive, discover, reduce to practice, or become possessed of any invention, modification,
discovery, design, development, improvement, process, formula, data, technique, know-how, secret, or intellectual property right whatsoever or any interest therein (whether or not patentable or registrable under copyright or similar statutes or
subject to analogous protection) (herein called “Inventions”) that relates to the business of the Company or any of the products or services being developed, manufactured, marketed, sold, or otherwise provided by the Company or which may
conveniently be used in relation therewith, or results from tasks assigned to him by the Company or results from the use of premises or equipment 

  

 10 

 
owned, leased, or contracted for by the Company, such Inventions and the benefits thereof shall immediately become the sole and absolute property of the
Company, and the Executive shall promptly disclose to the Company (or any persons designated by it) each such Invention and hereby assign any rights he may have or acquire in the inventions. and benefits and/or rights resulting therefrom to the
Company without compensation and shall communicate, without cost or delay, and without publishing the same, all available information relating thereto (with all necessary plans and models) to the Company. The Executive hereby further represents and
acknowledges that any and all such Inventions made, conceived, discovered, or reduced to practice prior to the date hereof, whether or not he is the named inventor; are owned solely by the Company, and that he has no right, title, or interest
therein, and he agrees that upon the request of the Company, and without any compensation to him, he will take such action and execute such documents as the Company may request to evidence and perfect the Company’s ownership of the such
Inventions. 
 (e) The Executive will also promptly disclose to the Company, and the Company hereby agrees to receive all such disclosures in
confidence, any other invention, modification, discovery, design, development, improvement, process, formula, data, technique, know-how, secret, or intellectual property right whatsoever or any interest therein (whether or not patentable or
registrable under copyright or similar statutes or subject to analogous protection) made, conceived, discovered, reduced to practice, or possessed by him (either alone or with others) at any time or times during his employment for the purpose of
determining whether they constitute Inventions. 
 (f) With respect to all Inventions, the Executive will, at the request and cost of the
Company (including reasonable compensation to the Executive if the request is made following the termination of his employment), sign, execute, make, and do all such deeds, documents, acts, and things as the Company and its duly authorized agents
may reasonably require: 
 (i) to apply for, obtain, and vest in the name of the Company alone (unless the Company otherwise
directs) letters patent, copyrights, or other analogous protection in any country throughout the world and when so obtained or vested to renew and restore the same; and 
 (ii) to defend any opposition proceedings in respect of such applications and any opposition proceedings or petitions or applications for
revocation of such letters patent, copyright, or other analogous protection. 
 (g) In the event the Company is unable, after reasonable
effort, to secure the Executive’s signature on any letters patent, copyright, or other analogous protection relating to an Invention, whether because of his physical or mental incapacity or for any other reason whatsoever, the Executive hereby
irrevocably designates and appoints the Company and its duly authorized officers and agents as his agent and attorney-in-fact, to act for and in his behalf and stead to execute and file any such application or applications and to do all other
lawfully permitted acts to further the prosecution and issuance of letters patent, copyright, or other analogous protection thereon with the same legal force and effect as if executed by him. 
  

 11 

	8.	Prohibited Activity. 

 The Executive
acknowledges that he has and will have access to trade secrets and other confidential and proprietary information of the business of the Company, including confidential client lists. Accordingly, as a condition of continued employment, the Executive
voluntarily enters into the following covenants to provide the Company with reasonable protection of those interests. For purposes of this Section 8, the term “Company” shall be deemed to include any successor entity to the Company.

 (a) Non-Competition: The Executive covenants and agrees that (1) during the Term of Employment, and (2) if his employment
hereunder is terminated or ended under Section 6(c), 6(f) or 6(g) above, during the period ending twelve (12) months after the Date of Termination, he shall not in any capacity, without the prior written consent of the Board, either alone
or as an owner, partner, officer, director, trustee, joint venturer, employee, consultant, agent, independent contractor, lender, advisor, or shareholder (other than as permitted by Section 8(d) below) of any person, firm, company, business
organization, or other entity, directly or indirectly: 
 (i) engage in any “Competitive Activity.” As used herein,
“Competitive Activity” means: (1) conducting or preparing to conduct a business substantially similar to and competitive with the Business conducted by the Company or its affiliates during the Executive’s employment; or
(2) providing or supporting, or preparing to provide or support, a product or service substantially similar to and competitive with that being developed, manufactured, marketed, sold, or otherwise provided by the Company or its affiliates in
connection with the Business; 
 (ii) interfere with any business relationship between the Company or its affiliates, and the
customers, suppliers, vendors, partners, consultants, service providers, advisors, or investors of either; or 
 (iii) perform
any action, activity, or course of conduct that is substantially detrimental to the business of the Company or any of its affiliates or business reputation of the Company or any of its affiliates. 
 (b) Non-Solicitation: The Executive also covenants and agrees that during the Term of Employment and for a period of twelve (12) months after
the termination or cessation of his employment for any reason, he shall not in any capacity, without the prior written consent of the Board, either alone or as an owner, partner, officer, director, trustee, joint venturer, employee, consultant,
agent, independent contractor, lender, advisor, or as a shareholder (other than as permitted by Section 8(d) below) of any person, firm, company, business organization, or other entity, directly or indirectly: 
 (i) solicit or contact any Customer of the Company in connection with, or in furtherance of, a Competitive Activity wherever located; or

 (ii) solicit or attempt to persuade any employee of the Company to terminate his or her employment with the Company in
order to enter into any employment relationship with, or perform services in any capacity for any other individual or business entity, whether or not such individual or entity is engaged in a Competitive Activity. 
  

 12 

 (c) If the Executive’s employment is terminated or ended under Section 6(e), the period of the
restrictions under this Section 8(a) and 8(b) shall be twenty-four (24) months. 
 (d) For purposes of this Agreement,
“Customer” shall mean: (i) any business or client account in which the Executive has participated or in any way been active prior to the termination of his employment; (ii) any customer with whom the Executive had substantial
contact during the Term of Employment; (iii) any customer of the Company with respect to whom the Executive acquired or had access to trade secrets or other confidential or proprietary information relating to such customer as a result of his
employment, or (iv) all customers of the Company’s Bohemia, New York office in the twelve (12) months preceding the termination of the Executive’s employment. 
 (e) Notwithstanding anything to the contrary contained in this Section 8, the Company hereby agrees that the foregoing restrictive covenants shall
not be deemed breached by the Executive as a result of the record or beneficial ownership by such Executive of less than an aggregate of 1% of any class of stock of a corporation engaged, directly or indirectly, in a Competitive Activity; provided
that such stock is listed on a national securities exchange or is quoted on the NASDAQ National Market System .and that the Executive is not an officer, director, or employee of any such corporation. 
 (f) The Executive agrees that the foregoing restrictions are reasonable and justified in light of the nature of the Company’s nationwide business
and customers due to; (1) the confidential and proprietary information to which he has and will have exposure and access during the course of his employment by the Company; and (2) the need for the adequate protection of the business and
the goodwill of the Company. In the event any such restriction is deemed to be unreasonable by any court of competent jurisdiction, the Executive agrees to the reduction of such restriction to such period or scope which such court shall deem
reasonable and enforceable. 
 (g) Non-Disparagement: The Executive agrees that, during the Term of Employment and following the
termination or cessation of his employment with the Company for any reason, he will not make any statements or representations, or otherwise communicate, directly or indirectly, in writing, orally, or otherwise, or take any action which may,
directly or indirectly, disparage the Company or any of its affiliates or their respective products, officers, directors, employees, advisors, representatives, agents, businesses, or reputations. Notwithstanding the foregoing, nothing in this
Agreement shall preclude the Executive from making truthful statements that are required by applicable law or legal process. 
  

	9.	Remedies. 

 The Executive’s obligations
under Sections 7 and 8 shall survive the termination or cessation of the Executive’s employment for any reason. The Executive agrees that any breach or threatened breach of his obligations under Sections 7 or 8 would subject or threaten to
subject the Company to immediate, substantial, and irreparable harm and that the Company shall not have an adequate remedy at law. Accordingly, in the event of an actual or threatened breach of Section 7 or 8 above, the Company shall have, in
addition to any and all remedies available at law, the right to an injunction, specific performance, or other equitable relief to prevent the 

  

 13 

 
violation of the Executive’s obligations hereunder. The Company and Executive hereby submit to the jurisdiction of the courts of the State of New York
for the purpose of any actions or proceedings instituted by the Company to obtain such relief and further agrees that the successful party shall be entitled to an award of costs and attorneys’ fees incurred in any legal action to defend or
enforce its respective rights or obligations under Sections 7 and/or 8 of this Agreement. 
  

	10.	Withholding. 

 The payment of any amount
pursuant to this Agreement shall be subject to applicable withholding and payroll taxes, and such other taxes or deductions as may be required under law or as authorized by the Executive. 
  

	11.	Assignability; Binding Nature. 

 This
Agreement shall be binding upon and inure to the benefit of the Parties and their respective successors, heirs (in the case of the Executive), and assigns. The Company shall have the right to assign this Agreement to its successors and assigns
without the Executive’s consent. The Executive shall not assign any rights or obligations under this Agreement without the express written consent of the Board of Directors. 
  

	12.	Representation. 

 The Company represents and
warrants that it is fully authorized and empowered to enter into this Agreement and that the performance of its obligations under this Agreement will not violate any agreement between it and any other person, firm, or organization. The Executive
represents and warrants that the execution of this Agreement and the performance of his obligations hereunder will not breach or be in conflict with any covenants against competition or other restrictive covenants, or any other agreement to which
the Executive is a party. 
  

	13.	Entire Agreement. 

 This Agreement contains
the entire understanding and agreement between the Parties concerning the subject matter hereof and supersedes all prior agreements, understandings, discussions, negotiations and undertakings, whether written or oral, between the Parties with
respect thereto. 
  

	14.	Amendment or Waiver. 

 No provision in this
Agreement may be amended unless such amendment is agreed to in writing and signed by the Executive and the full Board of Directors. No waiver by any Party of any breach by another Party of any condition or provision contained in this Agreement to be
performed by such other Party shall be deemed a waiver of a similar or dissimilar condition or provision at the same or any prior or subsequent time. Any waiver must be in writing and signed by the Executive and the full Board of Directors.

  

 14 

	15.	Severability. 

 In the event that any
provision or portion of this Agreement shall be determined to be invalid or unenforceable for any reason, in whole or in part, the remaining provisions of this Agreement shall be unaffected thereby and shall remain in full force and effect to the
fullest extent permitted by law. 
  

	16.	Survivorship. 

 The respective rights and
obligations of the Parties hereunder shall survive any termination of the Executive’s employment to the extent necessary to the intended preservation of such rights and obligations. Without limiting the generality of the foregoing, the
Executive’s obligations under Sections 7 and 8 of this Agreement shall survive the termination or cessation of his employment regardless of the manner of such termination or cessation and shall be binding upon his heirs, executors, and
administrators. 
  

	17.	Beneficiaries/References. 

 The Executive
shall be entitled, to the extent permitted under any applicable law and under the terms of any applicable plan or program, to select and change a beneficiary or beneficiaries to receive any compensation or benefit payable hereunder following the
Executive’s death by giving the Company written notice thereof. In the event of the Executive’s death or a judicial determination of his incompetence, reference in this Agreement to the Executive shall be deemed, where appropriate, to
refer to his beneficiary, estate, or other legal representative. 
  

	18.	Governing Law/Jurisdiction. 

 This Agreement
shall be governed by and construed and interpreted in accordance with the laws of the State of New York without reference to principles of conflict or choice of laws thereof. 
  

	19.	Resolution of Disputes/ Arbitration. 

 (a)
With the sole exception of any action brought by the Company seeking equitable relief and/or damages for a claimed violation by the Executive of his obligations under Sections 7 and 8 hereof, the Parties agree to use final and binding arbitration to
resolve any controversy, claim, dispute, or question arising out of, relating to, or in connection with the validity, interpretation, or effect of this Agreement, or any alleged breaches or violations of it (hereinafter “Arbitrable
Dispute”). 
 (b) The Arbitration: The arbitration shall take place before the American Arbitration Association (“AAA”)
under its Employment Dispute Resolution Rules or any superceding rules except as otherwise set forth below. The arbitration shall be held in Suffolk County, New York before an experienced employment arbitrator licensed to practice law in New York
who has been selected in accordance with the applicable Rules. Such arbitration shall be mandatory and binding on both Parties. The arbitrator may not modify or change this Agreement in any way, or make an award or impose a remedy that is not
available to a court of general jurisdiction sitting in New York, and the jurisdiction of the arbitrator is limited accordingly. The arbitrator shall not 

  

 15 

 
be authorized to grant punitive damages, except where punitive damages are expressly allowed by statute. 
 The arbitrator shall apply New York substantive law, including any applicable statutes of limitation. Adequate discovery shall be permitted by the
arbitrator consistent with applicable law and the objectives of arbitration. The award of the arbitrator, which shall be in writing and summarize the basis for the decision, shall be final and binding upon the Parties (subject only to limited review
as required by law) and may be entered as a judgment in any New York court of competent jurisdiction, and the Parties hereby consent to the jurisdiction of the courts of the State of New York. 
 (c) Fees and Expenses: All fees and costs of the arbitration, including the filing fee, fees and costs of the arbitrator and the arbitration
forum, cost of any record or transcript of the arbitration, and administrative fees, shall be paid in equal shares by the Company and the Executive, subject to an award of such costs and fees made by the arbitrator. Each Party shall pay its own
attorneys’ fees, witness expenses, and any other expenses that Party incurs in connection with the arbitration, except that the arbitrator may award the successful party its attorneys’ fees, costs and expenses. 
 (d) Exclusive Remedy: Arbitration in this manner shall be the exclusive remedy for any Arbitrable Dispute. Should either Party attempt to resolve
an Arbitrable Dispute by any method other than arbitration pursuant to this Section, the responding Party will be entitled to recover from the initiating Party all damages, expenses, and attorneys’ fees incurred as a result of that breach,
except as otherwise prohibited by law. 
  

	20.	Notices. 

 All notices or communications
hereunder shall be in writing and be delivered either by hand; registered or certified mail, postage prepaid, return receipt requested; or Federal Express or other nationally recognized method of prepaid overnight courier delivery, and addressed as
follows (or to such other address as shall be specified by notice to the other Party delivered in accordance with this Section 20): 
 If to the Company: 
 Mr. Jonathan Spaet 
 500 East 77th Street 
 Apartment 1215 
 New York, NY 10162

 If to the Executive: 
 Douglas
J. Andrea 
 Andrea Electronics Corporation 
 65 Orville Drive 
 Suite One 
 Bohemia, NY 11716 
  

 16 

 Notices delivered by hand shall be deemed received on the date delivered; notices by registered or
certified mail shall be deemed received on the third (3rd) day after mailing; notices by Federal Express or other overnight courier delivery shall be deemed received one (1) day after mailing. 
  

	21.	Confidentiality of Terms. 

 The Company shall
cause its officers, directors, employees, representatives, agents, and affiliates, and the Executive shall cause his representatives, agents, and affiliates, to keep confidential the existence and terms of this Agreement, except as required by
applicable law, regulation, or legal process, and only after adequate notice is given to the non-disclosing party so that it may seek an appropriate remedy or waive compliance with the terms of this Section 21. 
  

	22.	Headings. 

 The headings of the sections
contained in this Agreement are for convenience only and shall not be deemed to control or affect the meaning or construction of any provision of this Agreement. 
  

	23.	Counterparts. 

 This Agreement may be
executed in counterparts, each of which shall be deemed an original, and all of which, when taken together, shall constitute one and the same instrument. 
 IN WITNESS WHEREOF, the undersigned have executed this Agreement as of the date first written above. 
  

			
	ANDREA ELECTRONICS CORPORATION
		
	By:	 	/s/ Jonathan Spaet
	Name:	 	Jonathan Spaet
	Title:	 	Director and Chairman of Compensation Committee

  

	
	/s/ Douglas J. Andrea
	Douglas J. Andrea

  

 17 

 EXHIBIT A 
 SEPARATION AGREEMENT AND GENERAL RELEASE 
 SEPARATION AGREEMENT AND GENERAL RELEASE (the “Agreement”)
entered into as of the              day of             , 200_, by and between I, Douglas J. Andrea, and Andrea
Electronics Corporation (the “Company”). 
 Section 1 - Recitals 
 My last day of employment with the Company will be
                             , 200_. I hereby submit my written resignation from all positions
as director or officer of the Company and its affiliates without requirement of further consideration and in the form annexed hereto as Exhibit l. 
 Section 2 - Benefits 
 (a) In General: Except as otherwise provided in this Section, the Company will pay me
the amounts or benefits set forth in this Section within thirty (30) calendar days after I sign this Agreement, but only if I do not revoke this Agreement, which I may do within seven (7) calendar days after I sign it. I acknowledge that
the Company is not otherwise required to pay or provide to me the amounts or benefits described in Section 2(b) and that these payments are more than the Company or any of its affiliated or related companies are required to pay me under the
Company’s normal policies and procedures. 
 (b) Cash Payment: In consideration for my acceptance of the terms of this Agreement,
the Company agrees to pay me: 
 (i) severance compensation in the amount of
                                        
dollars ($            .00), less withholding for taxes and any other deductions the Company is required by law to make from wage payments to employees, payable in equal amounts over
a period of six (6) months in accordance with the Company’s regular payroll practices with respect to senior executives. This amount represents six (6) months’ base salary; 
 (ii) payment in the amount of
                                        
dollars ($                    ) less withholding for taxes and other deductions the Company is required to make from wage payments to
employees representing six months of the Executive’s most recent annual and quarterly bonuses payable over six months; and 
 (iii) payment in the amount of
                                        
dollars ($            .00), payable in equal amounts over a period of six (6) months. This amount represents the equivalent of six months of the premium cost for COBRA
continuation coverage for me, and my spouse and dependents who are eligible for COBRA continuation coverage and, in addition, COBRA coverage for a period of eighteen (18) months from the expiration of the six month period referred to above.

 (c) Compensation and Benefit Plans: Except as otherwise provided in my employment agreement dated
August 1, 2006 (the “Employment Agreement”), I will cease to be eligible to participate under any stock option, bonus, incentive compensation, commission, medical, dental, life insurance, retirement, and other compensation or benefit
plans of the Company following the termination of my employment on                     , 200   , except as otherwise provided
herein. Thereafter, I will have no rights under any of those plans, except as follows: 
 (i) I will have the right to COBRA
continuation coverage as to any company-provided medical, dental, or vision plan in which I participated which means that I will be entitled to buy continued health plan coverage under the normal COBRA health care continuation rules. 
 (ii) I will retain my vested benefits in all qualified retirement plans of the Company and all rights associated with such plans as
determined under the official terms of those plans. 
 Section 3 - Complete Release 
 (a) In General: I irrevocably and unconditionally release all the Claims described in Sections 3(b) and (c) that I may now have against the
Released Parties listed in Section 3(d). However, I am not releasing: (1) my right to enforce this Agreement; (2) any rights or claims under the Age Discrimination in Employment Act or other laws that arise after I sign. this
Agreement; (3) my right, if any, to government-provided unemployment benefits; and (4) any claims which by law cannot be waived, including the right to file a charge with or participate in an investigation conducted by certain government
agencies; provided however, that I am waiving my right to any monetary recovery should any government agency or other person pursue any such claims. 
 (b) Claims Released: Subject only to the exceptions just noted, I am releasing all known and unknown claims, promises, causes of action, or similar rights of any type (“Claims”) that I may have with
respect to any Released Party listed in Section 3(d). These include, but are not limited to, Claims that in any way relate to: (1) my Employment Agreement, my employment with the Company, or the termination of that employment, such as
Claims for compensation, deferred Compensation, bonuses, commissions, lost wages, unused accrued vacation, or sick pay; (2) the design or administration of any employee benefit program; (3) any rights I may have to severance or similar
benefits or to post-employment health or group insurance benefits; or (4) any Claims to attorneys’ fees or other indemnities. I understand that the Claims I am releasing might arise under many different laws,, including the following:

 Anti-discrimination statutes, such as the Age Discrimination in Employment Act and Executive Order 11141, which prohibit age
discrimination in employment; Title VII of the Civil Rights Act of 1964, Section 1981 of the Civil Rights Act of 1866, and Executive Order 11246, which prohibit discrimination based on race, color, national origin, religion, or sex; the Equal
Pay Act, which prohibits paying men and women unequal pay for equal work; the Americans With Disabilities Act and Sections 503 and 504 of the Rehabilitation Act of 1973, which prohibit 

  

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discrimination against the disabled; and any other federal, state, or local law prohibiting employment discrimination such as the New York State and City
Human Rights Laws. 
 Federal employment statutes, such as the WARN Act, which requires that advance notice be given of certain
workforce reductions; the Employee Retirement Income Security Act of 1974, which, among other things, protects employee benefits; the Fair Labor Standards Act of 1938, which regulates wage and hour matters; the Family and Medical Leave Act of 1993,
which requires employers to provide leaves of absence under certain circumstances; and any other federal laws relating to employment, such as veterans’ reemployment rights laws. 
 Other laws, such as any federal, state, or local law restricting an employer’s right to terminate employees, or otherwise regulating
employment; any federal, state, or local law enforcing express or implied employment contracts or requiring an employer to deal with employees fairly or in good faith; any other federal, state, or local law providing recourse for alleged wrongful
discharge, physical or personal injury, emotional distress, fraud, negligent misrepresentations, defamation, and similar or related claims. 
 The laws
referred to in this subsection include statutes, regulations, other administrative guidance, and common law doctrines. 
 (c) Unknown
Claims: I understand that I am releasing Claims that I may not know about. That is my knowing and voluntary intent, even though I recognize that someday I might learn that some or all of the facts I currently believe to be true are untrue and
even though I might then regret having signed this Agreement. Nevertheless, I am assuming that risk and I agree that this Agreement shall remain effective in all respects in any such case. I expressly waive all rights I might have under any law that
is intended to protect me from waiving unknown claims. I understand the significance of doing so. 
 (d) Released Parties: The
Released Parties are the Company, all related entities, parents, subsidiaries, affiliates, partnerships, or joint ventures, and, with respect to each of them, their predecessors and successors; and, with respect to each such entity, all of its past
and present employees, officers, partners, directors, stockholders, owners, representatives, assigns, attorneys, agents, insurers, employee benefit programs (and the trustees, administrators, fiduciaries, and insurers of such programs), and any
other persons acting by; through, under, or in concert with any of the persons or entities listed in this subsection. 
 Section 4 - Promises

 (a) Employment Termination: I agree that my employment with the Company and its affiliates ended forever on
                    , 200  . 
 (b) Pursuit of Released Claims: I have not filed, initiated, or caused to be filed any lawsuit, complaint, claim, or charge with respect to any Claim I am releasing in this Agreement, nor has any lawsuit,
complaint, claim, or charge been initiated or filed on my behalf. Except as 

  

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otherwise prohibited by the Age Discrimination in Employment Act or other applicable law, I promise: (i) never to file or prosecute a lawsuit,
complaint, claim, or charge based on the Claims released by this Agreement; (ii) to request any government agency or other body assuming jurisdiction of any such action or proceeding to withdraw from the matter or dismiss the matter with
prejudice; and (iii) not to accept any monetary relief or recovery from any such action or proceeding filed on my behalf. 
 (c)
Company Property: I have returned to the Company all files, memoranda, documents, records, diaries, copies of the foregoing, credit cards, keys, and any other property of the Company or its affiliates in my possession. I have not taken or
destroyed any Company property, including without limitation any financial data, records, or proprietary or confidential information. 
 (d)
Taxes: I am responsible for paying any taxes on amounts I receive because I signed this Agreement. I agree that the Company is to withhold all taxes it determines it is legally required to withhold. I further agree not to make any claim
against the Company or any other person based on how the Company reports amounts paid under this Agreement to tax authorities or if an adverse determination is made as to the tax treatment of any amounts payable under this Agreement. In addition, I
understand and agree that the Company has no duty to try to prevent such an adverse determination. 
 (e) Ownership of Claims: I have
not assigned or transferred any Claim I am releasing, nor have I purported to do so. 
 (f) Age Acknowledgement: I acknowledge that I
was over forty (40) years of age at the time I signed this Agreement. 
 (g) Non-admission of Liability: I agree not to assert
that this Agreement is an admission of guilt or wrongdoing because the Released Parties do not believe or admit that any of them has done anything wrong. I acknowledge and agree that I have not suffered any discrimination on account of my age and
that my age has never been an adverse factor used against me by the Company. 
 (h) No Disparagement or Harm: I agree not to make any
critical, disparaging, or derogatory remarks, comments, or statements about any Released Party, including, but not limited to, the Company’s business, policies, practices, decisions, officers, members, managing directors, directors, or
shareholders. I will not, directly or indirectly, publish, write, lecture, or otherwise disseminate disparaging information about any Released Party except in response to legal process or as otherwise required by law. 
 (i) Implementation: I agree to sign any documents and do anything else that is necessary in the future to implement this Agreement. 
 (j) This Agreement to be Kept Confidential: I agree not to disclose the terms, amount, or existence of this Agreement to anyone other than a
member of my immediate family, attorney, or other professional advisor and, even as to such a person, only if the person agrees to honor this confidentiality requirement. This subsection does not prohibit my disclosure of the terms, amount, or
existence of this Agreement to the extent necessary legally to enforce this 

  

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Agreement, nor does it prohibit disclosures to the extent otherwise legally required (but only if I notify the Company of a disclosure obligation or request
within three (3) days after I learn of it and permit the Company to take all steps it deems to be appropriate to prevent or limit the required disclosure). I acknowledge that the Company would be irreparably harmed if this subsection were
violated. 
 (k) Encouragement of Claims: I agree that under no circumstances will I induce, encourage, or solicit any person or
entity to file or pursue any proceeding of any kind against any person or entity released by me under this Agreement. This Agreement does not prohibit me from cooperating with an investigation conducted by any federal, state, or local government
agency or giving any statement or testimony pursuant to legal process or as otherwise required by law. 
 (l) Reasonableness of
Restrictions: I acknowledge and agree that the restrictions contained in Sections 8(a) and 8(b) of my Employment Agreement survive the termination of my employment and are reasonable and justified in light of the nature of the Company’s
nationwide business and customers, and in further light of the confidential information to which I had exposure and access during the course of my employment by the Company. I acknowledge and agree further that the restrictions referred to in
Sections 8(a) and 8(b) of the Employment Agreement are appropriate and that any lesser geographic restriction would be inadequate because the Company will be injured by virtue of any solicitation/or servicing of such customers irrespective of where
such solicitation originates or occurs. I further acknowledge that the temporal duration of the said restrictions is reasonable in light of the nature of the Company’s trade secrets and confidential information and the difficulty of my engaging
in the restricted activities without, even inadvertently, using the Company’s confidential information, during this period and the time required for me or servicing to establish a relationship with those customers. 
 (m) Cooperation: I agree to cooperate fully, in good faith, and to the best of my ability with the Company in connection with any and all pending,
potential, or future claims, investigations, or actions which directly or indirectly relate to any action, event, or activity about which I may have knowledge in connection with the Company. Such cooperation shall include all assistance that the
Company, its counsel, or its representatives may reasonably request, including but not limited to, reviewing documents, meeting with counsel, providing factual information and material, and appearing or testifying as a witness; provided, however,
that the Company shall reimburse me for all reasonable expenses incurred by me in fulfilling my obligations hereunder. I agree to use my best efforts to assure a smooth transition of my internal work for the Company. 
 (n) Consequences of Violating Promises: Except as otherwise prohibited by law, I agree to pay the reasonable attorneys’ fees and any damages
any Released Party may incur if any representation I made in this Agreement was false when made. I further agree that the Company would be irreparably harmed by any actual or threatened violation of Sections 4 and 5 that involves the disclosure of
the existence, terms, or amount payable under this Agreement, or disclosure or use of confidential information or trade secrets, or solicitation of employees or customers, and that the Company shall have, in addition to any and all remedies of law,
the right to an injunction, specific performance, or other equitable relief to prevent the violation of my obligations hereunder. 
  

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 Section 5 - Confidential Information 
 (a) I acknowledge that during my employment with the Company, I had access to, and possession of, trade secrets, confidential business information, and
proprietary information of the Company and its past, present, and potential clients. 
 (b) By signing this Agreement, I acknowledge that all
confidential and proprietary information that concerns the operations of, and methods and technology used by, the Company, including, without limitation, its ideas, strategies, business plans and methods, financial information, product cost data,
proposals, manuals, procedures and guidelines, programs, software, know-how and specifications, copyrights, trade secrets, market information, and data, as well as information (e.g., client lists, names, addresses, telephone numbers, identity
of contact persons, and financial investment information) with respect to individuals and entities who have entered into, or who have been solicited to enter into, relationships with the Company (collectively “Business Information”), is
and shall remain the sole property of the Company. 
 (c) I agree that I shall keep confidential all Business Information received directly
or indirectly from the Company. Except as required by law, I will not reveal to any person, association or company any of the Business Information concerning the organization, business, or finances of the Company so far as they have come or may come
in to my knowledge, except as may be in the public domain through no fault of my own or as required to be disclosed by law or court order. I shall keep secret all matters entrusted to me and shall not use or attempt to use any such information in
any manner which may injure or cause loss or may be calculated to injure or cause loss whether directly or indirectly to the Company. 
 (d)
The restrictions in this Section 5 apply to the transmittal of Business Information by every manner or means of disclosure, transfer, or exchange of information, whether orally, in writing, face to face, by telephone, by mail, by personal
delivery, by inter or intranet, by telex of facsimile, by electronic mail, recording, or otherwise. 
 (e) I acknowledge that the Company
will be irreparably harmed if my obligations under this Section 5 are not specifically enforced and that the Company would not have an adequate remedy at the event of an actual or threatened violation by me of my obligations. Therefore, I agree
that the Company shall be entitled to an injunction or specific performance for any violations or breaches by me, my employees, or my agents without the necessity of the Company showing that monetary damages would not afford an adequate remedy.

 (f) I represent and warrant that I have not, directly or indirectly, taken any action prior to the effective date of this Agreement which
if taken by me would be a breach of this Section 5. 
 Section 6 - Consideration of Release 
 (a) I acknowledge that, before signing this Agreement, I was given a period of at least twenty-one (21) calendar days to consider the Agreement,
including the release provision contained herein. I expressly waive any right I might have to additional time beyond this consideration period within which to consider this Agreement. 
  

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 (b) I further acknowledge that: (i) I took advantage of this period to consider this Agreement
before signing it, (ii) I carefully read this Agreement; (iii) I fully understand it; and (iv) I am entering into it voluntarily. 
 (c) I further acknowledge that the Company strongly encouraged me to discuss this Agreement with an attorney (at my own expense) before signing it and that I did so to the extent I deemed appropriate. 
 (d) Acceptance must be made by delivering a signed copy of this Agreement to Joseph J. Migliozzi, 11 Toddville Lane, Cortlandt Manor, New York, NY
10567-4314. For such acceptance to be effective, the signed Agreement must be received by Mr. Migliozzi or his designee no later than the close of business on the twenty-first (21st) calendar day after my attorney or I receive this
Agreement. 
 (e) I HAVE BEEN ADVISED THAT I MAY REVOKE THIS AGREEMENT WITHIN SEVEN (7) CALENDAR DAYS OF SIGNING IT. REVOCATION MUST
BE MADE BY DELIVERING A WRITTEN NOTICE OF REVOCATION TO THE INDIVIDUAL NAMED IN THE PRECEDING SENTENCE. FOR SUCH REVOCATION TO BE EFFECTIVE, WRITTEN NOTICE MUST BE RECEIVED BY DOUGLAS ANDREA NO LATER THAN THE CLOSE OF BUSINESS ON THE SEVENTH
(7TH) CALENDAR DAY AFTER I SIGN THIS AGREEMENT. IF I REVOKE THIS AGREEMENT, IT SHALL NOT BE EFFECTIVE OR ENFORCEABLE AND I WILL NOT RECEIVE THE BENEFITS DESCRIBED IN SECTION 2(b) OF THIS AGREEMENT. 
 (f) I understand that this Agreement may be withdrawn if not executed and returned within the consideration period. 
 Section 7 - Miscellaneous 
 (a)
Confidentiality Agreements: I acknowledge that my Employment Agreement sets forth various restrictions that survive the termination of my employment with the Company. This Agreement does not supersede or in any way affect my obligations under
the Employment Agreement or any other confidentiality agreement or non-disclosure agreement that I may have signed during my employment with the Company. 
 (b) Entire Agreement: This is the entire agreement between the Company and me. This Agreement may not be modified or cancelled in any manner except by a writing signed by both me and an authorized Company
official. I acknowledge that the Company has made no representations or promises to me (such as that my former position will remain vacant), other than those in this Agreement. If any provision in this Agreement is found to be unenforceable, all
other provisions will remain fully enforceable. 
 (c) Successors: This Agreement binds my heirs, administrators, representatives,
executors, successors, and assigns, and will inure to the benefit of all Released Parties and their respective heirs, administrators, representatives, executors, successors, and assigns. 
  

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 (d) Interpretation: This Agreement shall be construed as a whole according to its fair meaning. It
shall not be construed strictly for or against any Released Party or me. Unless the context indicates otherwise, the term “or” shall be deemed to include the term “and” and the singular or plural number shall be deemed to include
the other. Captions are intended solely for convenience of reference and shall not be used in the interpretation of this Agreement. This Agreement shall be governed by the statutes and common law of the State of New York, excluding its choice of
laws principles. 
 Section 8 - Arbitration of Disputes 
 (a) Arbitrable Disputes: With the sole exception of any action brought by the Company seeking equitable relief and/or damages for a claimed violation by me of my obligations under Sections 4(j), 4(l), and 5
hereof or Sections 7 or 8 of my Employment Agreement, the Company and I (individually a “Party” and collectively the “Parties”) agree to use final and binding arbitration to resolve any dispute (“Arbitrable Dispute”)
between me and any Released Party. This arbitration agreement applies to, among others, any controversy, claim, dispute, or question arising out of, relating to, or in connection with the validity, interpretation, or effect of this Agreement, or any
alleged breaches or violations of it or other statutory violations or claims. 
 (b) The Arbitration: Arbitration shall take place
before the American Arbitration Association (“AAA”) under its Employment Dispute Resolution Rules or any superceding rules except as otherwise set forth below. The arbitration shall be held in Suffolk County, New York before an experienced
employment arbitrator licensed to practice law in New York who has been selected in accordance with the applicable Rules: Such arbitration shall be mandatory and binding on both Parties. The arbitrator may not modify or change this Agreement in any
way, or make an award or impose a remedy that is not available to a court of general jurisdiction sitting in Suffolk County, and the jurisdiction of the arbitrator is limited accordingly. The arbitrator shall not be authorized to grant punitive
damages, except where punitive damages are expressly allowed by statute. 
 The arbitrator shall apply New York substantive law, including
any applicable statutes of limitation. Adequate discovery shall be permitted by the arbitrator consistent with applicable law and the objectives of arbitration. The award of the arbitrator, which shall be in writing and summarize the basis for the
decision, shall be final and binding upon the Parties (subject only to limited review as required by law) and may be entered as a judgment in any New York court of competent jurisdiction, and the Parties hereby consent to the jurisdiction of the
courts of the State of New York. 
 (c) Fees and Expenses: All fees and costs of arbitration, including filing fees, fees and costs of
the arbitrator and the arbitration forum, cost of any record or transcript of the arbitration, and administrative fees, shall be paid in equal shares by the Company and me, subject to an award of costs and fees made by the arbitrator. Each Party
shall pay its own attorneys’ fees, witness expenses, and any other expenses that Party incurs in connection with the arbitration, except that the arbitrator may award the successful party its attorneys’ fees, costs and expenses.

  

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 (d) Exclusive Remedy: Arbitration in this manner shall be the exclusive remedy for any Arbitrable
Dispute. Should I or the Company attempt to resolve an Arbitrable Dispute by any method other than arbitration pursuant to this Section, the responding Party will be entitled to recover from the initiating Party all damages, expenses, and
attorneys’ fees incurred as a result of that breach, except as otherwise prohibited by law. 
 TAKE THIS RELEASE HOME, READ IT, AND CAREFULLY CONSIDER
ALL OF ITS PROVISIONS BEFORE SIGNING IT: IT INCLUDES A RELEASE OF KNOWN AND UNKNOWN CLAIMS. IF YOU WISH, YOU SHOULD TAKE ADVANTAGE OF THE FULL CONSIDERATION PERIOD AFFORDED BY SECTION 6 AND YOU SHOULD CONSULT YOUR ATTORNEY. 
 Executed at             ,
                                        ,
this              day of                     ,
            . 
  

	
	   
	Douglas J. Andrea

 Executed at             ,
                                        ,
this              day of                     ,
            . 
  

			
	ANDREA ELECTRONICS CORPORATION
		
	By:	 	  
	Name:	 	
	Title:	 	

  

 9 

 EXHIBIT 1 
                              200   

[Name] 
 [Company Name] 
 [Address] 
 Re: Resignation as Officer and Director

 Dear
                    : 
 I hereby
irrevocably resign as an officer and director of Andrea Electronics Corporation effective as of the date of this letter. 
  

	
	Very truly yours,
	
	Douglas J. Andrea

  

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