Document:

Exhibit 10.18

 

AMENDMENT NUMBER THREE TO SECOND

amended and restated LOAN AND SECURITY AGREEMENT AND CONSENT

THIS AMENDMENT NUMBER THREE TO SECOND amended and restated LOAN AND SECURITY AGREEMENT AND CONSENT (this “Amendment”), dated as of March 11, 2015 is entered into by and among, on the lenders identified on the signature pages hereof (such lenders, together with their respective successors and permitted assigns, are referred to hereinafter each individually as a “Lender” and collectively as the “Lenders”), CITY NATIONAL BANK, a national banking association (“CNB”), as the arranger and administrative agent for the Lenders (in such capacity, together with its successors and assigns in such capacity, “Agent”), and FRESHPET, INC., a Delaware corporation (“Borrower”), and in light of the following:

W I T N E S S E T H

WHEREAS, Borrower, Agent and the Lenders are parties to that certain Second Amended and Restated Loan and Security Agreement, dated as of November 13, 2014 (as amended, restated, supplemented, or otherwise modified from time to time, the “Loan Agreement”);

WHEREAS, Borrower is required to deliver to Agent a Control Agreement from each Cash Management Bank (other than Agent) set forth on Schedule 2.7(a) of the Loan Agreement within 90 days after the Restatement Effective Date (the “Control Agreement Deadline”).

WHEREAS, Borrower has requested that Agent and the Lenders (a) make certain amendments to the Loan Agreement, and (b) consent to the extension of the Control Agreement Deadline; and 

WHEREAS, upon the terms and conditions set forth herein, Agent and the Lenders are willing to accommodate Borrower’s requests.

NOW, THEREFORE, in consideration of the foregoing and the mutual covenants herein contained, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereby agree as follows:

1.Defined Terms.  All initially capitalized terms used herein and not otherwise defined herein shall have the meanings ascribed to them in the Loan Agreement.

 

2.Consent.  The provisions of the Loan Agreement and the other Loan Documents to the contrary notwithstanding, and subject to the satisfaction of the conditions precedent set forth in Section 4 below, Agent and Lenders hereby extend the Control Agreement Deadline to April 11, 2015.

 

3.Amendment to Loan Agreement.  Upon the satisfaction of the conditions precedent set forth in Section 4 below, Section 3.2(b) of the Loan Agreement is hereby amended by replacing the reference to “90” appearing therein with “120”. 

4.Conditions Precedent to Amendment.  The satisfaction of each of the following shall constitute conditions precedent to the effectiveness of the Amendment (such date being the “Amendment Effective Date”):

 

(a)Agent shall have received this Amendment, duly executed by the parties hereto, and the same shall be in full force and effect.

 

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(b)The representations and warranties herein and in the Loan Agreement and the other Loan Documents shall be true and correct in all respects on and as of the date hereof, as though made on such date (except to the extent that such representations and warranties relate solely to an earlier date).

 

(c)No injunction, writ, restraining order, or other order of any nature prohibiting, directly or indirectly, the consummation of the transactions contemplated herein shall have been issued and remain in force by any Governmental Authority against Borrower or Agent.

 

(d)No Default or Event of Default shall have occurred and be continuing or shall result from the consummation of the transactions contemplated herein.

 

(e)All other documents and legal matters in connection with the transactions contemplated by this Amendment shall have been delivered, executed, or recorded and shall be in form and substance reasonably satisfactory to Agent.

 

5.Representations and Warranties.  Borrower hereby represents and warrants to Agent and the Lender as follows:

 

(a)It (i) is duly organized and existing and in good standing under the laws of the jurisdiction of its organization, (ii) is qualified to do business in any state where the failure to be so qualified reasonably could be expected to result in a Material Adverse Change, and (iii) has all requisite power and authority to own and operate its properties, to carry on its business as now conducted and as proposed to be conducted, to enter into the Loan Documents to which it is a party and to carry out the transactions contemplated thereby. 

 

(b)The execution, delivery, and performance by it of this Amendment and the performance by it of each Loan Document to which it is or will be a party (i) have been duly authorized by all necessary action, and (ii) do not and will not (A) violate any material provision of federal, state or local law, rule or regulation, or any order, judgment, decree, writ, injunction or award of any arbitrator, court or governmental authority finding on it or its Subsidiaries, the Governing Documents of it or its Subsidiaries, or any order, judgment or decree of any court or other Governmental Authority binding on it or its Subsidiaries, (B) conflict with, result in a breach of, or constitute (with due notice or lapse of time or both) a default under any material contractual obligation of it or its Subsidiaries, except to the extent that any such conflict, breach or default could not individually or in the aggregate reasonably be expected to have a Material Adverse Change, (C) result in or require the creation or imposition of any Lien of any nature whatsoever upon any properties or assets of Borrower, other than Permitted Liens, or (D) require any approval of Borrower’s interestholders or any approval or consent of any Person under any material contractual obligation of Borrower, other than consents or approvals that have been obtained and that are still in force and effect and except, in the case of a material contractual obligation, for consents or approvals, the failure to obtain could not individually or in the aggregate reasonably be expected to cause a Material Adverse Change.

 

(c)The execution, delivery and performance by Borrower of the Loan Documents and the consummation of the transactions contemplated by the Loan Documents do not and will not require any registration with, consent, or approval of, or notice to, or other action with or by, any Governmental Authority or any other Person, other than consents or approvals that have been obtained and that are still in force and effect. 

 

(d)This Amendment is, and each other Loan Document to which it is or will be a party, when executed and delivered by each Person that is a party thereto, will be the legally valid and binding obligation of such Person, enforceable against such Person in accordance with its respective terms, except as enforcement may be limited by equitable principles or by bankruptcy, insolvency, reorganization, moratorium or similar laws relating to or limiting creditors’ rights generally.

 

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(e)No injunction, writ, restraining order, or other order of any nature prohibiting, directly or indirectly, the consummation of the transactions contemplated herein has been issued and remains in force by any Governmental Authority against Borrower or any member of the Lender Group.

 

(f)No Default or Event of Default has occurred and is continuing as of the date of the effectiveness of this Amendment, and no condition exists which constitutes a Default or an Event of Default.

 

(g)The representations and warranties set forth in this Amendment, the Loan Agreement, as amended by this Amendment, and the other Loan Documents to which it is a party are true and correct in all material respects (except that such materiality qualifier shall not be applicable to any representation or warranty to the extent that such representation or warranty is qualified or modified by materiality in the text thereof, in which case such representation and warranties shall be true in all respects) on and as of the date hereof, as though made on such date (except to the extent that such representations and warranties relate solely to an earlier date.)

 

(h)This Amendment has been entered into without force or duress, of the free will of Borrower, and the decision of Borrower to enter into this Amendment is a fully informed decision and Borrower is aware of all legal and other ramifications of each decision. 

 

(i)It has read and understands this Amendment, has consulted with and been represented by independent legal counsel of its own choosing in negotiations for and the preparation of this Amendment, has read this Amendment in full and final form, and has been advised by its counsel of its rights and obligations hereunder and thereunder. 

 

6.Payment of Costs and Fees.  Borrower shall pay to Agent all reasonable and documented costs, out-of-pocket expenses, fees and charges in connection with the preparation, negotiation, execution and delivery of this Amendment and any documents and instruments relating hereto.  In addition thereto, Borrower agrees to reimburse Agent on demand for its reasonable and documented costs arising out of this Amendment and all documents or instruments relating hereto (which costs may include the reasonable fees and expenses of any attorneys retained by Agent).

 

7.Choice of Law.  This Amendment and the rights of the parties hereunder, shall be governed by, and construed in accordance with, the laws of the State of California applicable to contracts made and to be performed in the State of California.

 

8.Amendments.   This Amendment cannot be altered, amended, changed or modified in any respect or particular unless each such alteration, amendment, change or modification shall have been agreed to by each of the parties and reduced to writing in its entirety and signed and delivered by each party.

 

9.Counterpart Execution.  This Amendment may be executed in any number of counterparts, all of which when taken together shall constitute one and the same instrument, and any of the parties hereto may execute this Amendment by signing any such counterpart.  Delivery of an executed counterpart of this Amendment by telefacsimile or electronic mail shall be equally as effective as delivery of an original executed counterpart of this Amendment.  Any party delivering an executed counterpart of this Amendment by telefacsimile or electronic mail also shall deliver an original executed counterpart of this Amendment, but the failure to deliver an original executed counterpart shall not affect the validity, enforceability, and binding effect of this Amendment.

 

10.Effect on Loan Documents.

 

(a)The Loan Agreement, as amended hereby, and each of the other Loan Documents shall be and remain in full force and effect in accordance with their respective terms and hereby are ratified and confirmed in all respects.  The execution, delivery, and performance of this Amendment shall not operate, 

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except as expressly set forth herein, as a modification or waiver of any right, power, or remedy of any member of the Lender Group under the Loan Agreement or any other Loan Document.  The waivers, consents and modifications herein are limited to the specifics hereof (including facts or occurrences on which the same are based), shall not apply with respect to any facts or occurrences other than those on which the same are based, shall not excuse any non-compliance with the Loan Documents, and shall not operate as a consent to any matter under the Loan Documents.  Except for the amendments to the Loan Agreement expressly set forth herein, the Loan Agreement, the other Loan Documents and the other Schedules thereto shall remain unchanged and in full force and effect.  The execution, delivery and performance of this Amendment shall not operate as a waiver of or, except as expressly set forth herein, as an amendment of, any right, power or remedy of any member of the Lender Group in effect prior to the date hereof.  The amendments and waivers set forth herein are limited to the specifics hereof, shall not apply with respect to any facts or occurrences other than those on which the same are based, and except as expressly set forth herein, shall neither excuse any future non-compliance with the Loan Agreement, nor operate as a waiver of any Default or Event of Default.  To the extent any terms or provisions of this Amendment conflict with those of the Loan Agreement or other Loan Documents, the terms and provisions of this Amendment shall control.

 

(b)Upon and after the effectiveness of this Amendment, each reference in the Loan Agreement to “this Agreement”, “hereunder”, “herein”, “hereof” or words of like import referring to the Loan Agreement, and each reference in the other Loan Documents to “the Loan Agreement”, “thereunder”, “therein”, “thereof” or words of like import referring to the Loan Agreement, shall mean and be a reference to the Loan Agreement as modified and amended hereby.

 

(c)To the extent that any terms and conditions in any of the Loan Documents shall contradict or be in conflict with any terms or conditions of the Loan Agreement, such terms and conditions are hereby deemed modified or amended accordingly to reflect the terms and conditions of the Loan Agreement as modified or amended hereby.

 

(d)This Amendment is a Loan Document.  

 

(e)Unless the context of this Amendment clearly requires otherwise, references to the plural include the singular, references to the singular include the plural, the terms “includes” and “including” are not limiting, and the term “or” has, except where otherwise indicated, the inclusive meaning represented by the phrase “and/or”.  

 

11.Entire Agreement.  This Amendment, and terms and provisions hereof, the Loan Agreement and the other Loan Documents constitute the entire understanding and agreement between the parties hereto with respect to the subject matter hereof and supersedes any and all prior or contemporaneous amendments or understandings with respect to the subject matter hereof, whether express or implied, oral or written.  

 

12.Integration.  This Amendment, together with the other Loan Documents, incorporates all negotiations of the parties hereto with respect to the subject matter hereof and is the final expression and agreement of the parties hereto with respect to the subject matter hereof.

 

13.Release.

 

(a)Effective on the date hereof, each of Borrower and, for itself and on behalf of its successors, assigns, and officers, directors, employees, agents and attorneys, and any Person acting for or on behalf of, or claiming through such Person, hereby waives, releases, remises and forever discharges each member of the Lender Group, each of their respective Affiliates, and each of their respective successors in title, past, present and future officers, directors, employees, limited partners, general partners, investors, attorneys, assigns, subsidiaries, shareholders, trustees, agents and other professionals and all other persons and entities to whom any member of the Lender Group or their respective Affiliates would be liable if such persons or entities were found to be liable to Borrower (each a “Releasee” and collectively, the “Releasees”), from any 

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and all past, present and future claims, suits, liens, lawsuits, adverse consequences, amounts paid in settlement, debts, deficiencies, diminution in value, disbursements, demands, obligations, liabilities, causes of action, damages, losses, costs and expenses of any kind or character,  whether based in equity, law, contract, tort, implied or express warranty, strict liability, criminal or civil statute or common law (each a “Claim” and collectively, the “Claims”), whether known or unknown, fixed or contingent, direct, indirect, or derivative, asserted or unasserted, matured or unmatured, foreseen or unforseen, past or present, liquidated or unliquidated, suspected or unsuspected, which Borrower ever had from the beginning of the world, now has, or might hereafter have against any such Releasee which relates, directly or indirectly to the Loan Agreement, any other Loan Document, or to any acts or omissions of any such Releasee with respect to the Loan Agreement or any other Loan Document, or to the lender-borrower relationship evidenced by the Loan Documents, except for the duties and obligations set forth in this Amendment.  As to each and every claim released hereunder, Borrower hereby represents that it has received the advice of legal counsel with regard to the releases contained herein, and having been so advised, specifically waives the benefit of the provisions of Section 1542 of the Civil Code of California which provides as follows:

“A general release does not extend to claims which the creditor does not know or suspect to exist in his or her favor at the time of executing the release, which if known by him or her must have materially affected his or her settlement with the debtor.”

 

(b)Borrower acknowledges that it may hereafter discover facts different from or in addition to those now known or believed to be true with respect to such claims, demands, or causes of action and agrees that this instrument shall be and remain effective in all respects notwithstanding any such differences or additional facts.  Borrower understands, acknowledges and agrees that the release set forth above may be pleaded as a full and complete defense and may be used as a basis for an injunction against any action, suit or other proceeding which may be instituted, prosecuted or attempted in breach of the provisions of such release.  

 

(c)Borrower, for itself and on behalf of its successors, assigns, and officers, directors, employees, agents and attorneys, and any Person acting for or on behalf of, or claiming through it, hereby absolutely, unconditionally and irrevocably, covenants and agrees with and in favor of each Releasee above that it will not sue (at law, in equity, in any regulatory proceeding or otherwise) any Releasee on the basis of any claim released, remised and discharged by such Person pursuant to the above release.  Borrower further agrees that it shall not dispute the validity or enforceability of the Loan Agreement or any of the other Loan Documents or any of its obligations thereunder, or the validity, priority, enforceability or the extent of Agent’s Lien on any item of Collateral under the Loan Agreement or the other Loan Documents.  If Borrower or any of its successors, assigns, or officers, directors, employees, agents or attorneys, or any Person acting for or on behalf of, or claiming through it violate the foregoing covenant, such Person, for itself and its successors, assigns and legal representatives, agrees to pay, in addition to such other damages as any Releasee may sustain as a result of such violation, all attorneys’ fees and costs incurred by such Releasee as a result of such violation.  

 

14.Acknowledgments.

 

(a)Acknowledgement of Security Interests.  Borrower hereby acknowledges, confirms and agrees that Agent, for the benefit of the Lender Group, has and shall continue to have valid, enforceable and perfected first-priority liens upon and security interests in the Collateral granted to Agent, for the benefit of the Lender Group, pursuant to the Loan Documents or otherwise granted to or held by Agent.

 

(b)No Disregard of Loan Documents.  Borrower hereby acknowledges that the parties hereto have not entered into a mutual disregard of the terms and provisions of the Loan Agreement or the other Loan Documents, or engaged in any course of dealing in variance with the terms and provisions of the Loan 

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Agreement or the Loan Documents, within the meaning of any applicable law of the State of California, or otherwise.

 

15.Reaffirmation of Obligations.  Borrower hereby reaffirms its obligations under each Loan Document to which it is a party.  Borrower hereby further ratifies and reaffirms the validity and enforceability of all of the liens and security interests heretofore granted, pursuant to and in connection with any Loan Document to Agent, for the benefit of the Lender Group, as collateral security for the obligations under the Loan Documents in accordance with their respective terms, and acknowledges that all of such liens and security interests, and all collateral heretofore pledged as security for such obligations, continues to be and remain collateral for such obligations from and after the date hereof. 

 

16.Ratification.  Borrower hereby restates, ratifies and reaffirms each and every term and condition set forth in the Loan Agreement and the Loan Documents effective as of the date hereof and as amended hereby. 

 

17.Severability.  In case any provision in this Amendment shall be invalid, illegal or unenforceable, such provision shall be severable from the remainder of this Amendment and the validity, legality and enforceability of the remaining provisions shall not in any way be affected or impaired thereby.

 

[Signature pages to follow.]

 

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IN WITNESS WHEREOF, the parties have entered into this Amendment as of the date first above written.

 

FRESHPET, INC.,

a Delaware corporation, as Borrower

By: /s/   Richard Kassar      
Name: Richard Kassar  

Title: Chief Financial Officer  

 

 

[Signature Page to Amendment Number THREE to SECOND AMENDED AND RESTATED Loan and Security Agreement and consent]

CITY NATIONAL BANK,

a national banking association, as Agent and as a Lender

By: /s/   Garen Papazyan  
Name: Garen Papazyan  

Title: Senior Vice President  

[Signature Page to Amendment Number THREE to SECOND AMENDED AND RESTATED Loan and Security Agreement and consent]

ONEWEST BANK N.A.,

a national banking association, as a Lender

By: /s/   Gary Kirshner  
Name: Gary Kirshner  

Title: Senior Vice President

[Signature Page to Amendment Number THREE to SECOND AMENDED AND RESTATED Loan and Security Agreement and consent]Exhibit 10.10

 

 

 

PERSONAL SERVICES CONSULTING AGREEMENT

PSCA.2015.005.MYA

01 JAN 2015

 

 

This Personal Services Consulting Agreement is entered into
as of 01 January 2015 between B6 Sigma, Inc., a Delaware corporation, having an office at 3900 Paseo Del Sol, Santa Fe,
New Mexico 87507 (hereinafter also called “Buyer”) and Monica Yaple having an office at 5801 Osuna Rd NE, Suite 109,
Albuquerque NM 87109-2587 (hereinafter also called “Consultant”).

 

WHEREAS:

 

The Buyer desires the Consultant render expert assistance in
the fields of Accounting, an area of special expertise;

 

The Consultant represents that she has expertise in the areas
of work involved and that she offers such services to the general public;

 

NOW, THEREFORE, the parties enter into a Time
& Materials contract and mutually agree as follows:

 

		1.	STATEMENT OF REQUIREMENTS

 

a)      The Consultant
shall, upon request of the Buyer, render expert advice and assistance to the Buyer.

 

b)      The Consultant
agrees that she will not assign this Agreement or any services required to be performed under this Agreement to other personnel
or contractors without the written approval of the Buyer.

 

c)      During
the term of this Agreement, the Consultant will be under the technical and administrative direction of the Buyer’s Business
Operations Manager, Amanda L. Cola, 505-438-2576, amanda@sigmalabsinc.com. The Business Operations Manager is available to the
Consultant for any day-to-day clarifications as may be required. Agreements between the parties which effects changes to this Agreement,
shall be binding upon the Buyer only hen specifically authorized in writing by the Business Operations Manger.

 

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		2.	INDEPENDENT CONTRACTOR

 

a)      The Consultant
is an independent contractor, not an employee of the Buyer, and shall not receive employee benefits from the Buyer. The Consultant
shall be responsible for, and shall upon demand by the Buyer, provide evidence of payment of all tax liabilities for federal and
state income taxes, withholding thereof and contributions pursuant to the Internal Revenue Code of 1986, formally known as the
Internal Revenue Code of 1954, Chapters 21 and 23, as amended, or any comparable state law, due with respect to payments paid to
the Consultant by the Buyer. If the Internal Revenue Service determines at a future date that the Consultant should have been classified
as an employee of the Buyer rather than an independent contractor, the Consultant shall make payment to the Buyer of any employment
taxes refunded to the Consultant by the Internal Revenue Service.

 

b)      The Consultant
certifies that he is a United States citizen. For export compliance purposes, the Consultant shall obtain approval (written or
verbal) from the Buyer prior to providing any personnel who are not U.S. Citizens.

 

c)      The Consultant
shall maintain his own office space separate and apart from that of the Buyer. At the request of the Buyer, the Consultant may
utilize the Buyer offices.

 

d)     The Consultant
is not expected to work exclusively on the Buyer business and may maintain business relationships with other businesses independent
of his relationship with the Buyer.

 

e)      The Consultant
is responsible for his own time scheduling and work planning in order to fulfill the Statement of Work requirements. The Buyer
does not prescribe a work schedule of minimum hours of work for the Consultant.

 

f)       The
Consultant shall provide all tools, materials, and equipment necessary to conduct business with the Buyer.

 

		3.	PERIOD OF PERFORMANCE

 

The consulting services under this Agreement
shall be performed during the period beginning 01 January 2015 through 31 December 2015.

 

		4.	COSTS, FUNDING, AND MAXIMUM OBLIGATION

 

a)      Labor
Costs: The Consultant will be reimbursed for direct labor expended in performance of the work effort at the rate of $75.00
per hour. The hourly rate charged hereunder shall not exceed the hourly rate charged by the Consultant to the Consultant's most
favored customer for the same or similar quantity of labor hours and conditions of sale during the term of this Agreement. For
purposes of computation of a daily rate, a day shall be considered as eight (8) hours. For fractions of days worked or spent in
authorized travel, the daily rate will be prorated to the number of actual hours worked and/or spent in authorized travel.

 

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b)      Travel
Costs: The Consultant shall be reimbursed for actual and reasonable travel expenses authorized by the Buyer’s Technical
Representative. Unauthorized travel expenses will not be reimbursed. Airfare will be reimbursed for coach class at the most economical
coach class available and supported by receipt of payment. Lodging and Meals and Incidental Expenses (M&IE) are reimbursable
at actual cost, within the per diem limits specified by the Federal Joint Travel Regulations (JTR). Receipts must be provided for
lodging and any other expense over $25. In lieu of providing receipts for M&IE, the Consultant may request reimbursement for
actual costs incurred up to the daily per diem rate prescribed in the JTR as published at https://secureapp2.hqda.pentagon.mil/perdiem.
M&IE will be reimbursed at 75% of the JTR per diem on both the day of departure and the day of return.

 

c)      Maximum
Obligation: The Buyer's maximum obligation for payment during the term of this Agreement shall not exceed $25,075.00 inclusive
of any authorized costs incurred by the Consultant. It is understood that there is no guarantee of any minimum obligation under
this Agreement.

 

	Labor	22,500.00	(300 hrs)
	NMGRT	1,575	(on labor)
	Travel	1,000	(POV mileage)
	TOTAL	$25,075.00	 

 

		5.	SUBMISSION OF INVOICES

 

a)      The Buyer
shall compensate the Consultant for services provided within fifteen (15) days upon receipt and approval of an invoice. The Buyer
shall advise the Consultant if an invoice or any portion of an invoice is not approved by the Buyer within ten (10) days from receipt
of an invoice. Invoices shall include all services and reimbursable expenses under this Agreement to the Technical Point of Contact.

 

b)      Invoicing
shall be in best commercial form, including and prominently displaying the following:

 

i)             
Personal Services Consultant Agreement number PSCA.2015.005.MYA

 

ii)           
Period of service covered by the invoice

 

iii)         
Current and cumulative labor hours expended for B6 Sigma, Inc.

 

iv)         
Current and cumulative costs invoiced for labor for B6 Sigma, Inc.

 

v)           
Current and cumulative costs invoiced for travel for B6 Sigma, Inc.

 

vi)         
Total current and cumulative costs invoiced for B6 Sigma, Inc.

 

vii)       
Current and cumulative labor hours expended for Sigma Labs, Inc.

 

viii)      Current
and cumulative costs invoiced for labor for Sigma Labs, Inc.

 

ix)         
Current and cumulative costs invoiced for travel for Sigma Labs, Inc.

 

x)           
Total current and cumulative costs invoiced for Sigma Labs, Inc.

 

xi)         
Signed certification by the Consultant indicating that labor hours and costs claimed were necessary for performance of work required
under the Agreement.

 

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xii)       
Travel vouchers must be attached to invoices claiming travel costs.

 

c)      By acceptance
of final payment, it is understood and agreed that the Consultant will release the Buyer and its customer of any and all liabilities,
claims, and obligations whatsoever under or arising from this Agreement.

 

		6.	AUDIT

 

The Buyer or the Government shall have the
right, upon reasonable notice, to audit the direct costs, expenses, and disbursements made or incurred in connection with the services
to be performed under this Agreement.

 

		7.	STATEMENT OF WORK

 

a)      The Consultant
shall perform the work requirements and shall furnish services as mutually agreed upon for both B6 Sigma, Inc. and Sigma Labs,
Inc. per Exhibit A in this agreement.

 

		8.	REPORTS AND MEETINGS

 

a)      The Consultant
shall submit reports as may be, from time to time, requested by the Buyer in such form and number as the Buyer requires concerning
the work results of the Consultant under this Agreement.

 

b)      During
the term of this Agreement, the Consultant shall be available for informal meetings with the Buyer to discuss work in progress
and to provide an understanding of various aspects of work performed or to be performed.

 

		9.	SECURITY

 

The Consultant hereby agrees to abide by
the security requirements as set forth in Chapter 2, Section 2 "Personnel Clearances" of the National Industrial Security
Program Operating Manual (NISPOM) [DoD 5220.22M], in the event that classified information is involved in the work.

 

		10.	EXPORT CONTROL

 

a)      The Consultant
represents and warrants that it shall comply with all U.S. export and import laws and regulations. Further, by acceptance of this
Agreement, the Consultant certifies that he is registered in accordance with the International Traffic in Arms Regulations (ITAR)
of the United States Department of State [Title 22 of the Code of Federal Regulations, Parts 120 to 130, inclusive], if required.
Any commodities, technical data, and/or services provided by the Buyer to the Consultant in connection with this Agreement (hereinafter
referred to as “Items Provided by Buyer”), as well as any commodities, technical data, and/or services developed or
produced therefrom by the Consultant (hereinafter referred to as “Items Produced by Consultant for Buyer under the terms
of this Agreement”), are subject to the requirements of the ITAR of the United States Department of State [Title 22 of the
Code of Federal Regulations, Parts 120 to 130, inclusive], the Export Administration Regulations (EAR) of the United States Department
of Commerce [Title 15 of the Code of Federal Regulations, Parts 768 to 799, inclusive], Department of Defense Directive 5230.25,
Withholding of Unclassified Technical Data from Public Disclosure, or any other applicable laws or regulations of the United States.

 

b)      The Consultant
represents and warrants that neither the Items Provided by Buyer, nor the Items Produced by Consultant for Buyer under the terms
of this Agreement, will be exported, transferred, or disclosed outside the United States or to any foreign person, as defined under
ITAR, EAR, or Department of Defense Directive 5230.25 unless any necessary United States Government export license or other authorization
has been obtained. The Consultant shall obtain the written consent of the Buyer prior to submitting any application for a license
or other authorization under ITAR, EAR and/or Department of Defense Directive 5230.25.

 

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c)      The Consultant
shall obtain the written consent of the Buyer prior to exporting, transferring, or disclosing any Items Provided by the Buyer or
Items Produced by Consultant for Buyer under the terms of this Agreement outside the United States or to any foreign person, as
defined under ITAR, EAR, or Department of Defense Directive 5230.25.

 

d)     The Consultant
shall indemnify and hold the Buyer harmless for all claims, demands, damages, costs, fines, penalties, attorneys’ fees, and
all other expenses arising from the Consultant’s failure to comply with this clause, the stated statutes and regulations,
as they may be amended.

 

		11.	PATENTS

 

a)      Assignment
to Buyer: The Consultant agrees to assign to the Buyer the entire right, title, and interest throughout the world in and to each
invention and patentable discovery and writing made or conceived in the course of performance of services under this Agreement.

 

b)      Disclosure
to Buyer: The Consultant agrees to promptly disclose to the Buyer all designs, models, photographs, drawings, writings, inventions
and other patentable discoveries which are made, conceived or first actually reduced to practice under the performance of this
Agreement and to execute such documents as required to obtain patent or other legal protection and to convey assignment of rights,
title and interest to same to the Buyer in accordance with paragraph a) above.

 

		12.	RIGHTS IN DATA

 

The Buyer shall have the right to, and unlimited
rights in, technical data including computer software, first produced or used in the performance of this Agreement.

 

		13.	LIAISON AND COMMUNICATIONS

 

The Buyer alone shall be responsible for
all liaison and communications with its customers and its other subcontractors and consultants for the term of this Agreement.
The Consultant shall not communicate with the Buyer's customers or the Buyer's other subcontractors or consultants for any reason
whatsoever regarding this Agreement or matters relating to the Buyer's prime contract without the permission of the Buyer's Technical
Representative.

 

		14.	INDEMNIFICATION

 

The Consultant shall indemnify, defend,
and hold harmless the Buyer from and against all claims and actions, and all expenses incidental to such claims or actions, based
upon or arising out of damage to property or injuries to persons or other tortuous acts caused or contributed to by the Consultant
or anyone acting under its direction or control or in its behalf in the course of its performance under this Agreement, except
to the extent such damage or injury is caused by the sole negligence of willful misconduct of the Buyer.

 

		15.	TERMINATION

 

The Buyer shall have the right to terminate
this Agreement in whole or in part for its convenience at any time during the course of performance by written or telegraphic notice.
Upon receipt of any termination notice, the Consultant shall immediately discontinue services on the date and to the extent specified
in the notice.

 

    	Page 5 of 7

    	 

    

  

		16.	GOVERNING LAW

 

This Agreement shall be construed in accordance
with, and be governed by, the laws of the State of New Mexico.

 

		17.	SUPERSEDING EFFECT

 

This Consulting Agreement constitutes the
entire Agreement between the parties and supersedes any and all prior conditions, commitments and agreements between the parties,
either oral or written.

 

IN WITNESS WHEREOF, the parties hereto have executed this Agreement.

 

	Sigma Labs, Inc. 	 	Monica Yaple
	 	 	 	 	 
	By	/s/ Amanda L. Cola	 	By	/s/ Monica Yaple
	 	 	 	 	 
	Name	Amanda L. Cola	 	Name	Monica Yaple
	 	 	 	 	 
	Title	Business Operations Manager	 	Title	Accountant
	 	 	 	 	 
	Date	1/21/15	 	Date	1/21/15
	 	 	 	 	 
	Voice	(505) 438-2576	 	Voice	505-350-2607
	 	 	 	 	 
	Email	 	 	Email	 
	 	 	 	 	 
	 	 	 	Tax ID	 

 

 

    	Page 6 of 7

    	 

    

   

Exhibit A –Statement of Work

 

  

		·	Provide a lead accounting role in the company as it relates to the
following:

 

		o	Participate in weekly business management meetings

 

		o	Participate in board meetings

 

		o	Participate in corporate meetings when necessary

 

		o	Provide company with applicable tax incentive programs to include taking an active role in delegating responsibilities to company
staff members and actively engaging in communications with the New Mexico Economics Department.

 

		·	Provide Accounting Services consistent with requirements for publicly
traded company.

 

		·	Prepare monthly and quarterly financial statements for management

 

		·	Assist with accounting functions relating to SEC filings

 

		·	Assist auditors and attorneys on an as needed basis 

 

		·	Review of books on an as needed basis to include Balance Sheet, Income
Statement, Cash Flows, etc.

 

		·	Record Journal Entries 

 

		·	Payroll for B6 Sigma, Inc.

 

		·	Taxes, filings and reporting 

 

		·	Assist with preparation of quarterly and annual SEC filings 

 

		·	Prepare annual tax returns 

 

    	Page 7 of 7

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