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EMPLOYMENT AGREEMENT
This EMPLOYMENT AGREEMENT (the “Agreement”) is entered into on December 15, 2022 (the “Effective Date”), by and between OptiNose US, Inc., a Delaware corporation (“OptiNose US”) and wholly-owned subsidiary of OptiNose, Inc. (the “Parent” and, together with OptiNose US, the “Company”), and Paul Spence Jr. (“Executive”).

WHEREAS, the Company desires to employ Executive and Executive desires to be employed by the Company upon the terms and conditions hereinafter set forth.  

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

1.Term.  Subject to the terms and provisions of this Agreement, this Agreement shall continue until Executive’s employment with the Company is terminated by the Company or by Executive.  At all times, Executive’s employment with the Company is “at-will,” which means that Executive’s employment with the Company may be terminated at any time by the Company with or without “Cause” or by Executive with or without “Good Reason” (as each such term is defined below).  
2.Title, Duties and Responsibilities. While Executive is employed by the Company, Executive will serve as the Chief Commercial Officer of OptiNose US and will report to the Chief Executive Officer of OptiNose, Inc.  Executive will have such duties and responsibilities that are commensurate with Executive’s position as Chief Commercial Officer and such other duties and responsibilities as are from time to time assigned to Executive by the President and Chief Executive Officer, or the Board of Directors of the Parent (the “Board”). While Executive is employed by the Company, Executive will devote Executive’s full business time, energy and skill to the performance of Executive’s duties and responsibilities hereunder.  Executive will not be permitted to engage in other activities that interfere with Executive’s performance of his duties under this Agreement, conflict with the business of the Company or violate any provisions of Section 8 herein. Executive shall, if requested by the Board, also serve as an officer or director of any affiliate of the Company for no additional compensation.  Executive’s place of employment will be the Company’s offices in Yardley, Pennsylvania.
3.Base Salary. While Executive is employed by the Company, the Company will pay Executive a base annual salary (the “Base Salary”) at the rate of $435,000.00 per year, paid in accordance with the usual payroll practices of the Company.  Executive’s Base Salary shall be reviewed periodically for potential increases pursuant to Company review policies applicable to senior executives by the Compensation Committee of the Board (the “Compensation Committee”) or the Board.

4.Incentive Compensation.  Executive shall participate in short-term and long-term incentive programs, including equity compensation programs, established by the Company for its senior level executives generally, at levels determined by the Board or the Compensation Committee.  Executive’s incentive compensation shall be subject to the terms of the applicable plans and shall be determined based on Executive’s individual performance and the Company’s performance as determined by the Board or the Compensation Committee.  Any annual incentive compensation earned by Executive shall be paid on or after January 1, but not later than March 15 of the fiscal year following the fiscal year for which the annual incentive compensation is earned.
(a)Discretionary Bonus.  Executive will be eligible to receive an annual target cash bonus of 45% of Executive’s Base Salary (the “Target Annual Bonus”) (pro-rated for 
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any portion of a year during which Executive is not employed by the Company) at the discretion of the Board or the Compensation Committee and contingent upon attainment of certain Company milestones and/or individual objectives as determined by the Board or the Compensation Committee.  The actual annual bonus payable for any given year, if any, may be higher or lower than the Target Annual Bonus.  Payment of such bonus is contingent on continued employment with the Company at the time of payment unless otherwise specified herein or in the terms pursuant to which such bonus is granted. Executive’s Target Annual Bonus shall be reviewed periodically for potential increases pursuant to Company review policies applicable to senior executives by the Compensation Committee or the Board.  
(b)Equity Incentive Compensation.
(i)On the Effective Date, Executive shall receive a grant of non-qualified stock options (the “Stock Options”) to purchase 500,000 shares of the Company’s common stock at a per share exercise price equal to the closing price of the Company's common stock on The Nasdaq Stock Market on the date of grant.  Subject to Executive's continued service through each such date, 25% of the Stock Options will vest and become exercisable on the first (1st) anniversary of the date of grant and the balance will vest and become exercisable in thirty-six (36) equal monthly installments thereafter (such that, again subject to Executive's continued service through each such date, 100% of the Stock Options will be vested and exercisable on the fourth (4th) anniversary of the date of grant).
(ii)Executive shall be eligible to receive annual equity awards based on the Company’s and Executive’s actual performance, as determined by the Board or the Compensation Committee.  Each such equity award granted to Executive hereunder shall be subject to the terms and conditions of the incentive plan pursuant to which it is granted and such other terms and conditions as are established by the Board or Compensation Committee and set forth in an award agreement evidencing the grant of such equity award. 
5.Benefits and Fringes.
(a)General. While Executive is employed by the Company, Executive will be entitled to such benefits and fringes, if any, as are generally provided from time to time by the Company to its senior level executives, subject to the satisfaction of any eligibility requirements and any other terms and conditions of the applicable plans or policies.
(b)Vacation.  Executive will also be entitled to 20 business days of annual paid vacation in accordance with the Company’s vacation policies in effect from time to time, which may be taken at such times as Executive elects with due regard to the needs of the Company.
(c)Reimbursement of Business Expenses. Upon presentation of appropriate documentation, Executive will be reimbursed in accordance with the Company’s expense reimbursement policy for all reasonable and necessary business expenses incurred in connection with the performance of Executive’s duties and responsibilities hereunder.
6.Termination of Employment.
(a)Any termination of Executive’s employment by the Company or Executive (other than because of Executive’s death) shall be communicated by a written notice of termination to the other party hereto in accordance with the requirements of this Agreement.  Upon termination of Executive’s employment with the Company, Executive shall be deemed to have resigned from all positions that Executive holds as an officer or member of the board of directors (or a committee thereof) of the Company or any of its affiliates and all powers of 
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attorney held by Executive arising out of or relating to such Executive’s employment with the Company shall be deemed to have been revoked.
(b)Termination upon Death. If Executive dies, then Executive’s employment with the Company shall terminate as of the date of Executive’s death, at which time all of Executive’s rights to compensation and benefits under Sections 3, 4 and 5 herein or otherwise shall immediately terminate, except that Executive’s heirs, personal representatives or estate shall be entitled to the Accrued Benefits.  “Accrued Benefits” means: (a) any accrued but unpaid portion of Executive’s compensation set forth in Section 3 above through the date of termination; (b) any accrued but unused vacation as of the termination date; (c) any earned but unpaid bonus for which the performance measurement period has ended prior to the termination date (e.g., if Executive’s employment is terminated on February 1 and annual bonuses for the prior year have not been paid as of his termination date, then Executive would be eligible to receive his annual bonus for the prior year but not a bonus for the year in which the termination occurs), provided, that the termination of Executive’s employment is not for Cause or due to Executive’s voluntary resignation (other than for Good Reason); (d) any amounts owing to Executive for reimbursements of expenses properly incurred by Executive prior to the date of his termination of employment and which are reimbursable in accordance with Section 5(c) above, with all amounts owed under each of (a), (b) and (d) payable in a lump sum no later than the Company’s first regularly scheduled payroll date that is at least ten (10) days after the date of Executive’s termination of employment, and any amount owed under (c) payable in a lump sum when such bonuses are paid to the Company’s employees; and (e) any amounts that are vested benefits or that Executive is otherwise entitled to receive under any plan, policy, practice or program of or any other contract or agreement with the Company at or subsequent to the date of termination, payable in accordance with such plan, policy, practice or program or contract or agreement.
(c)Termination upon Disability. “Disability” means any physical or mental incapacity, illness or infirmity that prevents or significantly restricts Executive from performing the normal duties of Executive’s position on a full-time basis despite the provision, if requested, of a reasonable accommodation as that term is defined in the American with Disabilities Act. If Executive suffers a Disability and the Disability continues for a continuous period of more than three months, then the Company shall have the right to terminate Executive’s employment upon written notice to Executive, at which time all of Executive’s rights to compensation and benefits under Sections 3, 4 and 5 herein or otherwise shall immediately terminate, except that Executive shall be entitled to the Accrued Benefits.
(d)Termination by the Company for Cause. The Company may, upon written notice to Executive, immediately terminate Executive’s employment for Cause. “Cause” shall exist upon (i) Executive’s breach of any fiduciary duty or material legal or contractual obligation to the Company or any of its affiliates (including, without limitation, pursuant to a Company or affiliate policy or the restrictive covenants set forth in Section 8 of this Agreement or any other applicable restrictive covenants between Executive and the Company or any of its affiliates), (ii) Executive’s failure to follow the reasonable instructions of the Chief Executive Officer, or the Board (other than as a result of total or partial incapacity due to physical or mental illness), which failure, if curable, is not cured within 30 days after notice to Executive specifying in reasonable detail the nature of such breach, or, if cured, recurs within 90 business days, (iii) Executive’s gross negligence, willful misconduct, fraud, insubordination, acts of dishonesty or conflict of interest relating to the Company or any of its affiliates, or (iv) Executive’s commission of any misdemeanor which has a material impact on the affairs, business or reputation of the Company or any of its affiliates or Executive’s indictment for, or plea of nolo  contendere to, a crime constituting a felony under the laws of the United States or any state thereof. Upon a termination of Executive’s employment for Cause, all of Executive’s rights to 
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compensation and benefits under Sections 3, 4 and 5 of this Agreement or otherwise shall immediately terminate, except that Executive shall be entitled to the Accrued Benefits.
(e)Termination by the Company without Cause or by Executive for Good Reason. Except as provided in Section 6(f) below, upon a termination of Executive’s employment by the Company without Cause or by Executive for Good Reason, Executive shall be entitled to receive the Accrued Benefits and, subject to Executive’s execution and non-revocation of the release described in Section 6(g) and Executive’s compliance with Executive’s obligations under Section 8, the following severance payments and benefits (collectively, the “Severance Benefits”): 
(i)an amount equal to twelve (12) months of Executive’s Base Salary at the rate in effect on the date of termination, payable in substantially equivalent installments, with the first payment made on the Company’s first practical pay date following the Release Effective Date and remaining installments tendered thereafter on consecutive, semi-monthly pay dates in accordance with the Company’s regularly-scheduled payroll calendar until paid in full;;
(ii)Continuation of coverage under the Company’s group health insurance plan under the Consolidated Omnibus Reconciliation Act of 1985 (“COBRA”) at active employee rates beginning on the first day of the month following Executive’s termination date and continuing for a period of twelve (12) months at the same level of coverage Executive elected during his employment and on the same terms and conditions generally afforded to the Company’s active employees, provided Executive and his eligible dependents enroll with the Company’s COBRA administrator within sixty (60) days after Executive’s termination date (as used in this paragraph, the “COBRA Subsidy” during the “COBRA Subsidy Period”); provided, however, in the event the Company determines that such provisions would subject Executive to taxation under Section 105(h) of the Internal Revenue Code of 1986, as amended, or otherwise violate any healthcare law or regulation, then the Company shall pay to Executive an amount equal to the amount Executive would be required to pay for continuation of group health coverage for Executive and his eligible dependents through an election under COBRA for twelve (12) months, which amount shall be paid in a lump sum at the same time payments under Section 6(e)(i) commence and is intended to assist Executive with costs of health coverage, which Executive may (but is not required to) obtain through an election to continue health care coverage under COBRA. Notwithstanding the foregoing, Executive understands that the Company’s COBRA Subsidy during the COBRA Subsidy Period will not extend his or his dependents’ eligibility for continuation health coverage under COBRA and agree to hold harmless the Released Parties from any and all claims arising directly or indirectly from the COBRA Subsidy referenced above. Executive also understands that if he or his eligible dependents do not elect COBRA healthcare continuation coverage or choose to reduce coverage level under COBRA, Executive will not be entitled to receive any additional monetary payment for the cash equivalent of such COBRA Subsidy or any difference in premiums based upon his COBRA election.  Following the COBRA Subsidy Period, Executive and his dependents may, subject to statutory eligibility requirements, continue COBRA coverage at standard COBRA rates for the remainder of the applicable COBRA continuation period permitted by law as long as Executive and his dependents pay the full cost of such coverage in accordance with the Company’s COBRA continuation health coverage policies; and  
(iii)    to the extent such termination of Executive’s employment by the Company without Cause or by Executive for Good Reason occurs any time following a Change of Control transaction (and without limiting any Change of Control Severance Benefits specified in Section 6(f) below), Executive shall receive twelve (12) months of vesting acceleration with respect to all of Executive’s then-outstanding equity awards granted to Executive by the Company or assumed, continued or substituted for by the acquiring entity in such Change of Control transaction.     
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 “Good Reason” shall mean, without Executive’s prior written consent, (i) a material diminution in Executive’s then position or duties, authority or responsibilities including, without limitation, Executive ceasing to be an “executive officer” (as defined under Rule 3b-7 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) of a company with a class of securities registered under Section 12(b) of the Exchange Act; (ii) the assignment to Executive of any duties materially inconsistent with the duties and responsibilities of Chief Commercial Officer, (iii) a reduction by the Company in Executive’s then-current Base Salary or Executive’s then-current Target Annual Bonus unless the salaries and target annual bonuses for all other senior executive officers are correspondingly and proportionately reduced by not greater than 15% and such reduction continues for no more than 12 months; (iv) Executive’s relocation to offices of the Company that are more than fifty (50) miles from the Company’s offices in Yardley, Pennsylvania; or (v) any action or inaction that constitutes a material breach of this Agreement by the Company.  In order to invoke a termination for Good Reason, Executive must deliver a written notice of the grounds for such termination within thirty (30) days of the initial existence of the event giving rise to Good Reason and the Company shall have thirty (30) days to cure the circumstances.  In order to terminate Executive’s employment, if at all, for Good Reason, Executive must terminate employment within sixty (60) days following the end of the cure period if the circumstances giving rise to Good Reason have not been cured.  
(f)Termination by the Company without Cause or by Executive for Good Reason Following a Change of Control.  Upon a termination of Executive’s employment by the Company without Cause or by Executive for Good Reason, in each case within three (3) months prior to a Change of Control or eighteen (18) months after a Change of Control, Executive shall be entitled to receive the Accrued Benefits and, subject to Executive’s execution and non-revocation of the release described in Section 6(g) and Executive’s compliance with Executive’s obligations under Section 8, the following severance payments and benefits (collectively, the “Change of Control Severance Benefits”): 
(i)an amount equal to 150% of the sum of Executive’s (x) Base Salary and (y) target annual cash bonus opportunity, in each case at the rate in effect on the date of termination, payable in a single-lump sum cash payment on the first practical payroll date that occurs on or after the Release Effective Date;
(ii)an amount equal to Executive’s pro rata annual cash bonus for the year in which the termination of employment occurs, which shall be equal to the greater of (x) Executive’s target annual cash bonus opportunity for the year in which termination of employment occurs, multiplied by a fraction, the numerator of which is the number of days in which Executive was employed by Company during the year in which the termination of employment occurs, and the denominator of which is three hundred sixty-five (365), and (y) an  annualized amount of bonus for such year as determined by the Board in good faith based on the achievement of objectives up to the Change of Control, multiplied by a fraction, the numerator of which is the number of days in which Executive was employed by Company during the year in which the termination of employment occurs, and the denominator of which is three hundred sixty-five (365). The pro rata bonus described in this Section 6(f)(ii) shall be payable in a single-lump sum cash payment on the first practical payroll date that occurs on or after the Release Effective Date;
(iii)Continuation of coverage under the Company’s group health insurance plan through COBRA at active employee rates beginning on the first day of the month following Executive’s termination date and continuing for a period of eighteen (18) months at the same level of coverage Executive elected during his employment and on the same terms and conditions generally afforded to the Company’s active employees, provided Executive and his eligible dependents enroll with the Company’s COBRA administrator within sixty (60) days after his termination date (as used in this paragraph, the “COBRA Subsidy” during the “COBRA 
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Subsidy Period”); provided, however, in the event the Company determines that such provisions would subject Executive to taxation under Section 105(h) of the Code, or otherwise violate any healthcare law or regulation, then, the Company shall pay to Executive the amount Executive would be required to pay for continuation of group health coverage for Executive and his eligible dependents through an election under COBRA for eighteen (18) months, which amount shall be paid in a lump sum at the same time payments under Section 6(f)(i) commence and is intended to assist Executive with costs of health coverage, which Executive may (but is not required to) obtain through an election to continue health care coverage under COBRA. Notwithstanding the foregoing, Executive understands that the Company’s COBRA Subsidy during the COBRA Subsidy Period will not extend his or his dependents’ eligibility for continuation health coverage under COBRA and agree to hold harmless the Released Parties from any and all claims arising directly or indirectly from the COBRA Subsidy referenced above. Executive also understands that if he or his eligible dependents do not elect COBRA healthcare continuation coverage or choose to reduce coverage level under COBRA, Executive will not be entitled to receive any additional monetary payment for the cash equivalent of such COBRA Subsidy or any difference in premiums based upon his COBRA election; and 
(iv)all of Executive’s then-outstanding equity awards granted to Executive by the Company shall become immediately vested.
Notwithstanding anything contained herein to the contrary, in the event that Executive is entitled to the amounts set forth in Section 6(e)(i) as a result of Executive’s termination of employment prior to a Change of Control and a Change of Control occurs within three (3) months following Executive’s date of termination, Executive shall receive the amounts set forth in this Section 6(f), less any severance compensation paid to Executive pursuant to Section 6(e), paid in the same form and time as provided in Section 6(f), except that the amounts payable pursuant to Section 6(f)(i) shall be paid to Executive in a lump sum, within ten (10) days after the date of the Change of Control.
(g)Payment to Executive of any Severance Benefits or Change of Control Severance Benefits, as applicable, shall be conditioned on Executive’s compliance with the requirements of Section 8 hereof and Executive’s execution of a general release in favor of the Company and its affiliates in substantially the form attached hereto as Exhibit A (the “Release”) and the lapse of any revocation period specified therein with the Release not having been revoked.  The Release shall be provided to Executive within three (3) days of Executive’s termination of employment.  Executive will forfeit all rights to the Severance Benefits and the Change of Control Severance Benefits, as applicable, unless, within sixty (60) days of Executive’s termination of employment, Executive executes and delivers the Release to the Company and such Release has become irrevocable by virtue of the expiration of the revocation period specified therein without the Release having been revoked (the first such date, the “Release Effective Date”).  The Company’s obligation to pay the Severance Benefits or the Change of Control Severance Benefits, as applicable, is subject to the occurrence of the Release Effective Date, and if the Release Effective Date does not occur, then the Company shall have no obligation to pay such Severance Benefits or Change of Control Severance Benefits, as applicable.  Notwithstanding anything contained herein to the contrary, in the event that the period during which Executive may review and revoke the Release begins in one calendar year and ends in the following calendar year, any severance payments hereunder that constitute non-qualified deferred compensation subject to Section 409A of the Code shall be paid to Executive no earlier than January 1 of the second calendar year. 
7.  Section 280G.
(a)Executive shall bear all expense of, and be solely responsible for, any excise tax imposed by Section 4999 of the Code (such excise tax being the “Excise Tax”); 
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provided, however, that any payment or benefit received or to be received by Executive, whether payable under the terms of this Agreement or any other plan, arrangement or agreement with Company or an affiliate of Company (collectively, the “Payments”) that would constitute a “parachute payment” within the meaning of Section 280G of the Code, shall be reduced to the extent necessary so that no portion thereof shall be subject to the Excise Tax, but only if, by reason of such reduction, the net after-tax benefit Executive receives shall exceed the net after-tax benefit that Executive would receive if no such reduction was made.
(b)The “net after-tax benefit” shall mean (i) the Payments which Executive receives or is then entitled to receive from the Company that would constitute “parachute payments” within the meaning of Section 280G of the Code, less (ii) the amount of all federal, state and local income and employment taxes payable by Executive with respect to the foregoing calculated at the highest marginal income tax rate for each year in which the foregoing shall be paid to Executive (based on the rate in effect for such year as set forth in the Code as in effect at the time of the first payment of the foregoing), less (iii) the amount of Excise Tax imposed with respect to the payments and benefits described in (b)(i) above.
(c)All determinations under this Section 7 will be made by an accounting firm or law firm (the “280G Firm”) that is mutually agreed to by Executive and the Company prior to a change in ownership or control of a corporation (within the meaning of Treasury regulations under Section 280G of the Code).  The 280G Firm shall be required to evaluate the extent to which payments are exempt from Section 280G of the Code as reasonable compensation for services rendered before or after the Change of Control.  All fees and expenses of the 280G Firm shall be paid solely by the Company.  The Company will direct the 280G Firm to submit any determination it makes under this Section 7 and detailed supporting calculations to both Executive and the Company as soon as reasonably practicable.
(d)If the 280G Firm determines that one or more reductions are required under this Section 7, such Payments shall be reduced in the order that would provide Executive with the largest amount of after-tax proceeds (with such order, to the extent permitted by Sections 280G and 409A of the Code, designated by Executive, or otherwise determined by the 280G Firm) to the extent necessary so that no portion thereof shall be subject to the Excise Tax, and the Company shall pay such reduced amount to Executive. Executive shall at any time have the unilateral right to forfeit any equity award in whole or in part.
(e)As a result of the uncertainty in the application of Section 280G of the Code at the time that the 280G Firm makes its determinations under this Section 7, it is possible that amounts will have been paid or distributed to Executive that should not have been paid or distributed (collectively, the “Overpayments”), or that additional amounts should be paid or distributed to Executive (collectively, the “Underpayments”). If the 280G Firm determines, based on either the assertion of a deficiency by the Internal Revenue Service against Executive or the Company, which assertion the 280G Firm believes has a high probability of success or is otherwise based on controlling precedent or substantial authority, that an Overpayment has been made, Executive must repay the Overpayment to the Company, without interest; provided, however, that no loan will be deemed to have been made and no amount will be payable by Executive to the Company unless, and then only to the extent that, the deemed loan and payment would either reduce the amount on which Executive is subject to tax under Section 4999 of the Code or generate a refund of tax imposed under Section 4999 of the Code. If the 280G Firm determines, based upon controlling precedent or substantial authority, that an Underpayment has occurred, the 280G Firm will notify Executive and the Company of that determination, and the Company will promptly pay the amount of that Underpayment to Executive without interest.
(f)Executive and the Company will provide the 280G Firm access to and copies of any books, records, and documents in their possession as reasonably requested by the 
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280G Firm, and otherwise cooperate with the 280G Firm in connection with the preparation and issuance of the determinations and calculations contemplated by this Section 7.  For purposes of making the calculations required by this Section 7, the 280G Firm may rely on reasonable, good faith interpretations concerning the application of Sections 280G and 4999 of the Code.
8.Covenants.
(a)Non-Competition. So long as Executive is employed by the Company under this Agreement and for (i) the eighteen (18) month period following the termination of Executive’s employment with the Company in the event Executive’s employment is terminated by the Company without Cause or by Executive for Good Reason, in each case, within three (3) months prior to a Change of Control or eighteen (18) months after a Change of Control or (ii) the nine (9) month period following the termination of Executive’s employment with the Company for any reason not covered by clause (i) (such applicable period, the “Restricted Period”), Executive agrees that Executive will not, directly or indirectly, without the prior written consent of the Company, engage in Competition with the Company or any of its affiliates (collectively, the “Employer”). “Competition” means participating, directly or indirectly, as an individual proprietor, partner, stockholder, officer, employee, director, joint venturer, investor, lender, consultant or in any other capacity whatsoever in any business or venture that competes with any business that the Employer is engaged in as of the date of Executive’s termination of employment with the Company or is actively planning to engage in as of the date of Executive’s termination of employment with the Company. Notwithstanding the foregoing, after Executive’s termination of employment, employment by or consultation for a publicly traded company that derives less than five percent (5%) of its net revenues from activities that compete with business that the Employer engages in, shall not constitute Competition so long as Executive does not provide employment or consulting services to the business segment of such publicly traded company that engages in such competitive activities. Executive is entering into this covenant not to compete in consideration of the agreements of the Company in this Agreement, including but not limited to, the agreement of the Company to provide the severance and other benefits to Executive upon a termination of employment pursuant to Sections 6(e) and (f) hereof, as applicable.  
(b)Confidentiality. Executive agrees that Executive will not, directly or indirectly, use, make available, sell, disclose or otherwise communicate to any person or entity, other than in the course of Executive’s assigned duties hereunder and for the benefit of the Employer, either while Executive is employed by the Company hereunder or at any time thereafter, any business and technical information or trade secrets, nonpublic, proprietary or confidential information, knowledge or data relating to the Employer whether the foregoing will have been obtained by Executive during Executive’s employment hereunder or otherwise. The foregoing will not apply to information that (i) was known to the public prior to its disclosure to Executive; (ii) becomes generally known to the public or in the Employer’s industry subsequent to disclosure to Executive through no wrongful act by Executive or any of Executive’s representatives; or (iii) Executive is required to disclose by applicable law, regulation or legal process (provided that Executive provides the Company with prior notice of the contemplated disclosure and cooperates at the Company’s cost with the Company in seeking a protective order or other appropriate protection of such information). The Company and Executive acknowledge that, notwithstanding anything to the contrary contained in this Agreement, pursuant to 18 USC § 1833(b), an individual may not be held liable under any criminal or civil federal or state trade secret law for disclosure of a trade secret: (i) made in confidence to a government official, either directly or indirectly, or to an attorney, solely for the purpose of reporting or investigating a suspected violation of law or (ii) in a complaint or other document filed in a lawsuit or other proceeding, if such filing is made under seal.  The Company and Executive further acknowledge that an individual suing an employer for retaliation based on the reporting of a suspected violation of law may disclose a trade secret to his attorney and use the trade secret information in 
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the court proceeding, so long as any document containing the trade secret is filed under seal and the individual does not disclose the trade secret except pursuant to court order.
(c)Non-Solicitation of Customers. Executive agrees that during the Restricted Period, Executive will not, directly or indirectly, solicit or influence, or attempt to solicit or influence, customers of the Employer to purchase goods or services then sold by the Employer from any other person or entity.
(d)Non-Solicitation of Suppliers. Executive agrees that during the Restricted Period, Executive will not, directly or indirectly, solicit or influence, or attempt to solicit or influence, the Company’s suppliers to provide goods or services then provided to the Employer to any other person or entity in Competition with the Employer.
(e)Non-Solicitation of Employees. Executive recognizes that Executive will possess confidential information about other employees of the Employer relating to their education, experience, skills, abilities, compensation and benefits, and inter-personal relationships with customers of the Employer.  Executive recognizes that the information Executive possesses and will possess about these other employees is not generally known, is of substantial value to the Employer in developing its business and in securing and retaining customers, and has been and will be acquired by Executive because of Executive’s business position with the Employer. Executive agrees that, during the Restricted Period, Executive will not, (x) directly or indirectly, individually or on behalf of any other person or entity solicit or recruit any employee of the Employer to leave such employment for the purpose of being employed by, or rendering services to, Executive or any person or entity unaffiliated with the Employer, or (y) convey any such confidential information or trade secrets about other employees of the Employer to any person or entity other than in the course of Executive’s assigned duties hereunder and for the benefit of the Employer.  Notwithstanding the foregoing, the Company agrees that hiring any employee of the Employer who responds to a general advertisement for employment that was not specifically directed at the employees of the Employer shall not be deemed a violation of this Section 8(e).
(f)Non-Disparagement. Executive agrees that Executive will not, nor will Executive induce others to, Disparage the Employer or any of their past or present officers, directors, employees or products.  Similarly, the directors and senior executives of the Employer will not, nor will they induce others to, Disparage Executive.  “Disparage” will mean making comments or statements to the press, the Employer’s employees or any individual or entity with whom Executive or the Employer, as applicable, has a business relationship that would adversely affect in any manner, as applicable: (i) the conduct of the business of the Employer (including, without limitation, any products or business plans or prospects); (ii) the business reputation of the Employer, or any of their products, or their past or present officers, directors or employees; or (iii) the business reputation of Executive.
(g)Inventions.
(i)Executive acknowledges and agrees that all trade secrets, mask works, concepts, drawings, materials, documentation, procedures, diagrams, specifications, models, processes, formulae, source and object codes, data, programs, know-how, designs, techniques, ideas, methods, inventions, discoveries, improvements, work products, developments or other works of authorship (“Inventions”), whether patentable or unpatentable, (x) that relate to Executive’s work with the Employer, made, developed or conceived by Executive, solely or jointly with others or with the use of any of the Employer’s equipment, supplies, facilities or trade secrets or (y) suggested by any work that Executive performs in connection with the Employer, either while performing Executive’s duties with the Employer or on Executive’s own time, but only insofar as the Inventions are related to Executive’s work as an employee of the 
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Employer (collectively, “Company Inventions”), will belong exclusively to the Company (or its designee), whether or not patent applications are filed thereon. Executive will keep full and complete written records (the “Records”), in the manner prescribed by the Employer, of all Company Inventions, and will promptly disclose all Company Inventions completely and in writing to the Company. The Records will be the sole and exclusive property of the Company, and Executive will surrender them upon the termination of Executive’s employment, or upon the Company’s request. Executive hereby assigns to the Company (or its designee) the Company Inventions including all rights in and to any related patents and other intellectual property that may issue thereon in any and all countries, whether during or subsequent to Executive’s employment with the Employer, together with the right to file, in Executive’s name or in the name of the Company (or its designee), applications for patents and equivalent rights (the “Applications”). Executive will, at any time during and subsequent to Executive’s employment with the Employer, make such applications, sign such papers, take all rightful oaths, and perform all acts as may be requested from time to time by the Company with respect to the Company Inventions and the underlying intellectual property. Executive will also execute assignments to the Company (or its designee) of the Applications, and give the Company and its attorneys all reasonable assistance (including the giving of testimony) to obtain the Company Inventions and the underlying intellectual property for its benefit, all without additional compensation to Executive from the Company, but entirely at the Company’s expense.
(ii)In addition, the Company Inventions will be deemed “work made for hire”, as such term is defined under the copyright law of the United States, on behalf of the Employer and Executive agrees that the Company (or its designee) will be the sole owner of the Company Inventions, and all underlying rights therein, in all media now known or hereinafter devised, throughout the universe and in perpetuity without any further obligations or compensation to Executive. If the Company Inventions, or any portion thereof, are deemed not to be work made for hire, Executive hereby irrevocably conveys, transfers, assigns and delivers to the Company (or its designee), all rights, titles and interests, in all media now known or hereinafter devised, throughout the universe and in perpetuity, in and to the Company Inventions, including without limitation: (a) all of Executive’s rights, titles and interests in and to any underlying intellectual property (and all renewals, revivals and extensions thereof) related to the Company Inventions; (b) all rights of any kind or any nature now or hereafter recognized, including without limitation, the unrestricted right to make modifications, adaptations and revisions to the Company Inventions, to exploit and allow others to exploit the Company Inventions; and (c) all rights to sue at law or in equity for any infringement, or other unauthorized use or conduct in derogation of the Company Inventions, known or unknown, prior to the date hereof, including without limitation the right to receive all proceeds and damages therefrom. In addition, Executive hereby waives any so-called “moral rights” with respect to the Company Inventions. Executive hereby waives any and all currently existing and future monetary rights in and to the Inventions and all patents and other intellectual property rights that may issue thereon, including, without limitation, any rights that would otherwise accrue to Executive’s benefit by virtue of Executive being an employee of or other service provider to the Employer.
(iii)To the extent that Executive is unable to assign any of Executive’s right, title or interest in any Company Invention under applicable law, for any such Company Invention and the underlying intellectual property rights, Executive hereby grants to the Company (or its designee) an exclusive, irrevocable, perpetual, transferable, worldwide, fully paid license to such Company Invention and the underlying intellectual property, with the right to sublicense, use, modify, create derivative works and otherwise fully exploit such Company Invention and the underlying intellectual property, to assign this license and to exercise all rights and incidents of ownership of the Company Invention.
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(iv)To the extent that any of the Company Inventions are derived by, or require use by the Employer of, any works, Inventions, or other intellectual property rights that Executive owns, which are not assigned hereby, Executive hereby grants to the Company (or its designee) an irrevocable, perpetual, transferable, worldwide, non-exclusive, royalty free license, with the right to sublicense, use, modify and create derivative works using such works, Inventions or other intellectual property rights, but only to the extent necessary to permit the Company to fully realize their ownership rights in the Company Inventions.
(h)Cooperation. Upon the receipt of notice from the Company (including outside counsel), Executive agrees that while employed by the Employer (for no additional compensation) and thereafter (for reasonable compensation for Executive’s time), Executive will respond and provide information with regard to matters in which Executive has knowledge as a result of Executive’s employment with the Employer, and will provide reasonable assistance to the Employer and its representatives in defense of any claims that may be made against the Employer, and will assist the Employer in the prosecution of any claims that may be made by the Employer, to the extent that such claims may relate to the period of Executive’s employment with the Employer (or any predecessor). Executive agrees to promptly inform the Company if Executive becomes aware of any lawsuits involving such claims that may be filed or threatened against the Employer. Executive also agrees to promptly inform the Company (to the extent Executive is legally permitted to do so) if Executive is asked to assist in any investigation of the Employer (or their actions), regardless of whether a lawsuit or other proceeding has then been filed against the Employer with respect to such investigation, and will not do so unless legally required.
(i)Return of Property. On the date of the termination of Executive’s employment with the Company for any reason (or at any time prior thereto at the Company’s request), Executive will return all property belonging to the Employer (including, but not limited to, any Employer provided laptops, computers, cell phones, wireless electronic mail devices or other equipment, or documents and property belonging to the Employer).
(j)Injunctive Relief. It is further expressly agreed that the Employer will or would suffer irreparable injury if Executive were to violate the provisions of this Section 8 and that the Employer would by reason of such violation be entitled to injunctive relief in a court of appropriate jurisdiction and Executive further consents and stipulates to the entry of such injunctive relief in such court prohibiting Executive from violating the provisions of this Section 8.
(k)Survival of Provisions. The obligations contained in this Section 8 will survive the termination of Executive’s employment with the Company and will be fully enforceable thereafter. If it is determined by a court of competent jurisdiction in any state that any restriction in this Section 8 is excessive in duration or scope or extends for too long a period of time or over too great a range of activities or in too broad a geographic area or is unreasonable or unenforceable under the laws of that state, it is the intention of the parties that such restriction may be modified or amended by the court to render it enforceable to the maximum extent permitted by the law of that state or jurisdiction.
(l)Prior Agreements. Executive represents and warrants to the Company that there are no restrictions, agreements or understandings whatsoever to which Executive is a party that would prevent or make unlawful Executive’s execution of this Agreement or Executive’s employment hereunder, is or would be inconsistent or in conflict with this Agreement or Executive’s employment hereunder, or would prevent, limit or impair in any way the performance by Executive of the obligations hereunder.
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9.Assignment; Third Party Beneficiaries. Notwithstanding anything else herein, this Agreement is personal to Executive and neither the Agreement nor any rights hereunder may be assigned by Executive. The Company may assign the Agreement to an affiliate or to any acquiror of all or substantially all of the assets of the Company.  The Employer shall require any successor (whether direct or indirect, by purchase, merger, consolidation or otherwise) to all or substantially all of the business and/or assets of the Employer to expressly assume and agree to perform this Agreement in the same manner and to the same extent that the Employer would be required to perform it if no such succession had taken place. Unless expressly provided otherwise, “Employer” as used in this Agreement shall mean the Employer as defined in Section 8(a) of this Agreement and any successor to its business and/or assets as aforesaid. This Agreement will inure to the benefit of and be binding upon the personal or legal representatives, executors, administrators, successors, heirs, distributees, devisees, legatees and permitted assignees of the parties. Executive acknowledges that this Agreement is intended to benefit the Company, its shareholders, and its and their parents, affiliates, subsidiaries, divisions, and related companies or entities, now existing or hereafter created. Both Executive and the Company further acknowledge and agree that the intended beneficiaries of this Agreement are entitled to enforce the provisions of this Agreement by seeking injunctive relief or any other appropriate remedy.
10.Clawback/Recoupment.  Notwithstanding any other provision in this Agreement to the contrary, any compensation paid to Executive pursuant to this Agreement or any other agreement or arrangement with the Company shall be subject to mandatory repayment by Executive to the Company to the extent any such compensation paid to Executive is, or in the future becomes, subject to (i) any “clawback” or recoupment policy applicable to Executive that is adopted to comply with any applicable law, rule or regulation (including stock exchange rule), or (ii) any law, rule or regulation (including stock exchange rule) which imposes mandatory recoupment, under circumstances set forth in such law, rule or regulation.
11.Arbitration; Waiver of Rights to Sue; Attorneys’ Fees. 
(a)    Except as provided in Section 8(j), the parties agree that they will use binding arbitration to settle all claims and disputes that may arise out of this Agreement or that in any way relate to Executive’s employment with Company. Specifically, both the Company and Executive agree that any claim, dispute and/or controversy that either Executive may have against the Company (or its directors, officers, managers, employees, agents or parties affiliated with its employee benefit and health plans), or that the Company may have against Executive, shall be submitted to binding arbitration conducted before one (1) arbitrator mutually agreed to by the Company and Executive, sitting in Philadelphia, Pennsylvania or such other location mutually agreed to by Executive and the Company, in accordance with the National Rules for the Resolution of Employment Disputes of the American Arbitration Association (“AAA Rules”) then in effect; provided, however, that if the Company and Executive are unable to agree on a single arbitrator within thirty (30) calendar days of the demand by another party for arbitration, an arbitrator will be designated by the Philadelphia Office of the American Arbitration Association. 
(b)    Coverage.  Included within the parties’ agreement to submit all disputes to binding arbitration are all employment-related claims and disputes, whether based upon tort, contract, statute (including but not limited to any claims of workplace discrimination, harassment (other than sexual harassment), retaliation, failure to pay proper wages or other compensation (including commissions, bonuses, salary, severance pay or other benefits), or any other unlawful employment practice or wrongful termination, whether based upon the Age Discrimination in Employment Act of 1967, the Older Workers Benefit Protection Act, Title VII of the Civil Rights Act of 1964, the Employee Retirement Income Security Act, the Fair Labor Standards Act, the Americans with Disabilities Act, the National Labor Relations Act, the Labor 
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Management Relations Act, the Worker Adjustment and Retraining Notification Act, the Occupational Safety and Health Act, the Genetic Information Nondiscrimination Act, the Lilly Ledbetter Fair Pay Act of 2009, the Fair Credit Reporting Act, the Family and Medical Leave Act, the Equal Pay Act of 1963, the Consolidated Omnibus Budget Reconciliation Act, the Rehabilitation Act, the Employee Polygraph Protection Act, the Electronic Communication Privacy Act, the Computer Fraud and Abuse Act, the Health Insurance Portability & Accountability Act, the Sarbanes-Oxley Act of 2002, the Fair Credit Reporting Act, the Uniformed Services Employment and Reemployment Rights Act of 1994, the Civil Rights Act of 1991, 42 U.S.C. §§ 1981, 1983, 1985, 1986 and 1988), the Pennsylvania Wage Payment & Collection Law, the Pennsylvania Human Relations Act, the Pennsylvania Labor Relations Act, the Pennsylvania Equal Pay Law, the Pennsylvania Minimum Wage Act, any personal gain with respect to any claim arising under the Federal False Claims Act, or any other federal, state or local laws, statutes, regulations, rules, ordinances, or orders, each as amended, or under any policy, agreement, contract, understanding or promise, written or oral, formal or informal, between any of the Released Parties and Executive and shall further apply, without limitation, to any and all Claims for breach of implied or express contract, breach of promise, breach of the covenant of good faith and fair dealing, embezzlement, conversion, non-payment of debt, misrepresentation, tortious interference with contract, civil conspiracy, negligence, fraud, estoppel, defamation, libel, misrepresentation, intentional infliction of emotional distress, violation of public policy, invasion of privacy, wrongful, retaliatory or constructive discharge, assault (other than sexual assault), battery, false imprisonment, negligence, and all other claims or torts, including any whistleblower claims, arising under any federal, state, or local law, regulation, ordinance or judicial decision, or under the United States  and Pennsylvania Constitutions.
EXECUTIVE UNDERSTANDS AND VOLUNTARILY AND FREELY AGREES TO THIS BINDING ARBITRATION PROVISION, AND BOTH EXECUTIVE AND THE COMPANY EXPRESSLY AND FREELY FOREGO AND WAIVE THEIR RIGHT TO TRIAL BY JURY, IN FAVOR OF BINDING ARBITRATION, WITH RESPECT TO ANY CLAIMS OR CONTROVERSIES COVERED BY THIS AGREEMENT EXCEPT AS EXPRESSLY EXCLUDED HEREIN.
(c)    Exclusions. Notwithstanding the foregoing:
(i)    The parties shall not arbitrate: (aa)  claims by Executive for workers’ compensation or unemployment compensation insurance benefits; (bb) claims by the Company for injunctive or equitable relief, including without limitation claims related to the misappropriation of trade secrets, theft of confidential and proprietary business information, breach of fiduciary duty and/or violation of other restrictive covenants; and (cc) claims by Executive for sexual assault and/or sexual harassment, unless Executive voluntarily elects for such sexual assault and/or sexual harassment claims to be arbitrated.
(ii)    Nothing contained in this Agreement prohibits Executive from filing, a complaint, participating in an investigation, or otherwise communicating with the United States Equal Employment Opportunity Commission and/or any other federal, state, or local agency charged with the processing of complaints and performance of investigation into claims of unlawful employment practices, although if Executive elects to pursue a claim following the exhaustion or completion of any such administrative process, such claim would be subject to the mandatory arbitration provisions set forth in this Section of the Agreement.
(iii)    Claims by Executive relating to benefits under any of the Company’s employee benefit plans must be raised with the claims administrator of the relevant plan pursuant to the terms of that plan, but if the matter is not resolved under those procedures, Executive may pursue such a claim only through arbitration as provided for in this Section.
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(d)    Procedures. The party seeking arbitration pursuant to this Section of the Agreement shall commence such proceeding in accordance with the applicable AAA rules.  All rules of pleading, rules of evidence, and rights to resolution of the dispute by means of summary judgment, judgment on the pleadings, and judgment under Pennsylvania law shall apply and be observed. Resolution of the dispute shall be based solely upon the law governing the claims and defenses pleaded, and the arbitrator may not invoke any basis (including, but not limited to, notions of "just cause") but shall apply the same law as if brought in a court of law.  The arbitrator shall possess the authority to rule on any dispositive motions (including a motion to dismiss and/or summary judgment brought by any party) and to order any appropriate legal and equitable relief consistent with that available to parties in civil actions filed in a court of competent jurisdiction, except that the parties agree neither party shall be entitled to punitive damages on any claim.
(e)    Discovery. During the arbitration, Executive and the Company shall be entitled to engage in and conduct discovery in accordance with any schedule established by the arbitrator; provided, however, the arbitrator must allow the parties to conduct discovery sufficient to adequately arbitrate their claims and defenses in accordance with applicable federal, state, and local law, even if the AAA Rules are more restrictive.
(f)    Determination. The determination of the arbitrator will be final and binding on Executive and the Company. Awards shall include the arbitrator’s written, reasoned opinion and shall contain the arbitrator’s essential findings and conclusions. Judgment may be entered on the award of the arbitrator in any court having proper jurisdiction. 
(g)    Attorney’s Fees; Costs. Each party will bear their own expenses of such arbitration, except that the prevailing party shall be entitled to be indemnified and reimbursed for its reasonable attorneys’ fees and costs incurred in enforcing and/or seeking to enforce the terms of this Agreement should the other party violate or be alleged to have violated any of its terms.  
12.Indemnification. The Company and Executive acknowledge that they have entered into an Indemnification Agreement, effective as of the Effective Date set forth above (the “Indemnification Agreement”).  
13.Governing Law. This Agreement and any other document or instrument delivered pursuant hereto, (other than the Indemnification Agreement) and all claims or causes of action that may be based upon, arise out of or relate to this Agreement will be governed by, and construed under and in accordance with, the internal laws of the Commonwealth of Pennsylvania, without reference to rules relating to conflicts of laws.
14.Withholding Taxes. The Company may withhold from any and all amounts payable to Executive such federal, state and local taxes as may be required to be withheld pursuant to any applicable laws or regulations.
15.Notices. All notices and other communications required or permitted hereunder or necessary or convenient in connection herewith shall be in writing and shall be deemed to have been given when hand delivered or three (3) days after being mailed by registered or certified mail to Executive or the Company, as the case may be, at Executive’s address set forth below or the Company’s address set forth below, or to such other names or addresses as Executive or the Company, as the case may be, shall designate by notice to each other person entitled to receive notices in the manner specified in this Section (provided that notice of change of address shall be deemed given only when received).
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Company notices shall be delivered to:
OptiNose US Inc.
Attn: Chief Legal Officer
1020 Stony Hill Road
Third Floor, Suite 300
Yardley, PA 19067
Executive notices shall be delivered to such address as shall most currently appear on the records of the Company.
16.Entire Agreement; Amendments. This Agreement and the agreements referenced herein contain the entire agreement of the parties relating to the subject matter hereof, and supersede in their entirety any and all prior and/or contemporaneous agreements, understandings or representations relating to the subject matter hereof, whether written or oral, including without limitation the Existing Agreement. No amendments, alterations or modifications of this Agreement will be valid unless made in writing and signed by the parties hereto.
17.Section Headings. The section headings used in this Agreement are included solely for convenience and will not affect, or be used in connection with, the interpretation of this Agreement.
18.Severability. The provisions of this Agreement will be deemed severable and the invalidity of unenforceability of any provision will not affect the validity or enforceability of the other provisions hereof. No failure to exercise, delay in exercising, or single or partial exercise of any right, power or remedy by either party, and no course of dealing between the parties, shall constitute a waiver of, or shall preclude any other or further exercise of, any right, power or remedy.
19.Counterparts. This Agreement may be executed in several counterparts (including via facsimile and/or .pdf), each of which will be deemed to be an original but all of which together will constitute one and the same instruments.
20.Section 409A. 
(a)The payments and benefits under this Agreement are intended to comply with or be exempt from Section 409A of the Code, and the regulations and guidance promulgated thereunder (collectively, “Section 409A”) and this Agreement shall be interpreted and construed in a manner intended to comply therewith.  For purposes of this Agreement, Executive will be considered to have experienced a termination of employment only if Executive has a “separation from service” with the Company and all of its controlled group members within the meaning of Section 409A.  Whether Executive has a separation from service will be determined based on all of the facts and circumstances and in accordance with the guidance issued under Section 409A.
(b)Each payment under this Agreement, including each installment payment, shall be considered a separate and distinct payment.  For purposes of this Agreement, each payment is intended to be excepted from Section 409A to the maximum extent provided as follows:  (i) each payment made within the applicable 21⁄2 month period specified in Treas. Reg. § 1.409A-1(b)(4) is intended to be excepted under the short-term deferral exception; (ii) post-termination medical benefits are intended to be excepted under the medical benefits exception as specified in Treas. Reg. §1.409A-1(b)(9)(v)(B); and (iii) to the extent payments are made as a result of an involuntary separation, each payment that is not otherwise excepted under the short-
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term deferral exception or medical benefits exception is intended to be excepted under the involuntary pay exception as specified in Treas. Reg. § 1.409A-1(b)(9)(iii).  With respect to payments subject to Section 409A (and not excepted therefrom), if any, it is intended that each payment is paid on a permissible distribution event and at a specified time consistent with Section 409A.  Neither the Company nor Executive shall have the right to accelerate or defer the delivery of any such payments or benefits except to the extent specifically permitted or required by Section 409A.  Executive shall have no right to designate the date or any payment under this Agreement.  
(c)If Executive is a “specified employee” (as that term is used in Section 409A and regulations and other guidance issued thereunder) on the date of Executive’s separation from service, any benefits payable under this Agreement that constitute non-qualified deferred compensation subject to Section 409A shall be delayed until the earlier of (i) the first business day following the six-month anniversary of the date of Executive’s separation from service, or (ii) the date of Executive’s death, but only to the extent necessary to avoid the adverse tax consequences and penalties under Section 409A.  On the earlier of (x) the first business day following the six-month anniversary of the date of Executive’s separation from service, or (y) Executive’s death, the Company shall pay Executive (or Executive’s estate or beneficiaries) a lump-sum payment equal to all payments delayed pursuant to the preceding sentence.
(d)If any of the reimbursements or in-kind benefits provided for under this Agreement are subject to Section 409A, the following rules shall apply: (i) in no event shall any such reimbursement be paid after the last day of the taxable year following the taxable year in which the expense was incurred; (ii) the amount of such reimbursable expenses incurred, or the provision of in-kind benefits, in one tax year shall not affect the expenses eligible for reimbursement or the provision of in-kind benefits in any other tax year; and (iii) the right to such reimbursement for expenses or provision of in-kind benefits is not subject to liquidation or exchange for any other benefit.
(e)Notwithstanding anything in Section 6(f) hereof to the contrary, in the event that Executive is entitled to the amount set forth in Section 6(f)(i) as a result of a termination of Executive’s employment within three (3) months prior to or eighteen (18) months after the date of the Change of Control, and such Change of Control does not constitute a change in ownership or effective control of the Company, or in the ownership of a substantial portion of the assets of the Company, within the meaning of Section 409A(a)(2)(A)(v) of the Code and its corresponding regulations, and any portion of the severance benefit payable to Executive pursuant to Section 6(e)(i) is deemed to constitute deferred compensation subject to the requirements of Section 409A of the Code at the time of Executive’s termination, then such portion that constitutes deferred compensation shall reduce the amount that is paid in a lump sum as provided in Section 6(f)(i) and such deferred compensation portion shall instead be paid in substantially equal installments over the installment period as described in Section 6(e)(i).  
21. Construction; Reasonable Time to Review and Consider Agreement. The parties agree that this Agreement was reached following arms-length negotiations and should not be construed against the drafter. Executive agrees that he has been provided reasonable and adequate time to review this Agreement and, if desired, consult with counsel of his own choosing, and that he has consulted counsel before signing this Agreement or knowingly waived the right to do so.  
[Signature Page Follows]

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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date first above written.

OPTINOSE US, INC.

By: /s/ Peter Miller
Peter Miller
Chief Executive Officer

EXECUTIVE

                            
By: /s/ Paul Spence Jr.
Paul Spence Jr.
      

EXHIBIT A
SAMPLE RELEASE AGREEMENT
This RELEASE AGREEMENT (“Agreement”) made this [•] day of [•], [•] (the “Effective Date”), between OptiNose US, Inc. (a wholly-owned subsidiary of OptiNose, Inc. and, together with OptiNose, Inc. and each of its and their successors and assigns, the “Company”), and [•] (“Executive”).
1.Release.
        a.    In consideration of the amounts to be paid by the Company pursuant to the Employment Agreement entered into on ____________, by and between the Company and Executive (the “Employment Agreement”), Executive, on behalf of himself and on behalf of his spouse, civil union or domestic partner, dependents, heirs, executors, devisees, personal representatives, administrators, agents and assigns, irrevocably and unconditionally forever waives, releases, gives up and discharges the Company, its parent, affiliated and related companies (including but not limited to OptiNose, Inc.), all of its and their employee benefit plans and trustees, fiduciaries, administrators, sponsors and parties-in-interest of those plans, all of its and their past and present employees, managers, directors, officers, administrators, shareholders, members, investors, agents, attorneys, insurers, re-insurers and contractors acting in any capacity whatsoever (whether individually or in an official capacity on behalf of the Company), and all of its and their respective predecessors, heirs, personal representatives, successors and assigns (collectively, the “Released Parties”), from any and all debts, demands, actions, causes of action, accounts, covenants, contracts, agreements, claims, damages, omissions, promises, and any and all claims and liabilities whatsoever, of every name and nature, known or unknown, suspected or unsuspected, accrued or unaccrued, liquidated or contingent, asserted or unasserted, both in law and equity (“Claims”), which Executive ever had, now has, or may hereafter claim to have against the Released Parties by reason of any matter or cause whatsoever based on, related to, or arising from any event that occurred before the date Executive signs this Agreement and based upon, related to or arising out of or in any way concerning Executive’s employment with the Company, the terms, conditions or privileges of Executive’s employment with the Company, Executive’s separation from employment with the Company, and any and all violations and/or alleged violations of federal, state or local human rights laws, fair employment practices and/or other laws by any of the Released Parties for any reason and under any legal theory including, but not limited to, those arising or which may be arising under, as applicable, Title VII of the Civil Rights Act of 1964 (“Title VII”), the Americans with Disabilities Act (“ADA”), the Age Discrimination in Employment Act (“ADEA”), the Older Worker Benefit Protection Act (“OWBPA”), the Employee Retirement Income Security Act of 1974 (“ERISA”), the Employee Polygraph Protection Act, the Worker Adjustment and Retraining Notification Act (“WARN”), the Family and Medical Leave Act (“FMLA”), the Coronavirus Aid, Relief and Economic Security Act (“CARES”), the Families First Coronavirus Relief Act (“FFCRA”), the American Rescue Plan Act, the Fair Labor Standards Act (“FLSA”), the Equal Pay Act of 1963 (“EPA”), the Lilly Ledbetter Fair Pay Act of 2010 (“Fair Pay Act”), the Genetic Information Nondiscrimination Act of 2008 (“GINA”), the Rehabilitation Act, the Employee Polygraph Protection Act, the Electronic Communication Privacy Act, the Computer Fraud & Abuse Act, the Health Insurance Portability & Accountability Act (“HIPAA”), the Consolidated Omnibus Budget Reconciliation Act (“COBRA”), the Occupational Safety and Health Act (“OSHA”), the Sarbanes-Oxley Act of 2002, the Fair Credit Reporting Act (“FCRA”), the National Labor Relations Act (“NLRA”), the Labor Management Relations Act (“LMRA”), the Uniformed Services Employment and Reemployment Rights Act of 1994 (“USERRA”), the Civil Rights Act of 1991, 42 U.S.C. §§ 1981, 1983, 1985, 1986 and 1988), the Pennsylvania Wage Payment & Collection Law, the Pennsylvania Human Relations Act, the Pennsylvania Labor Relations Act, the Pennsylvania 

Equal Pay Law, the Pennsylvania Minimum Wage Act, the Pennsylvania Workers’ Compensation Act, any personal gain with respect to any claim arising under the Federal False Claims Act, or any other federal, state or local laws, statutes, regulations, rules, ordinances, or orders, each as amended, or under any policy, agreement, contract, understanding or promise, written or oral, formal or informal, between any of the Released Parties and Executive and shall further apply, without limitation, to any and all Claims for breach of implied or express contract, breach of promise, breach of the covenant of good faith and fair dealing, misrepresentation, tortious interference with contract, civil conspiracy, negligence, fraud, estoppel, defamation, libel, misrepresentation, intentional infliction of emotional distress, violation of public policy, invasion of privacy, wrongful, retaliatory or constructive discharge, assault, battery, false imprisonment, negligence, and all other claims or torts, including any whistleblower claims, arising under any federal, state, or local law, regulation, ordinance or judicial decision, or under the United States and Pennsylvania Constitutions (the “General Release”).

        b.    For the purpose of implementing a full and complete release, Executive understands and agrees that this Agreement is intended to include all claims, if any, which Executive or his spouse, civil union or domestic partner, dependents, heirs, executors, devisees, personal representatives, administrators, agents and assigns may have and which Executive does not now know or suspect to exist in his favor against the Released Parties, from the beginning of time until the time he signs this Agreement, and this Agreement extinguishes those claims.

        c.    In consideration of the promises of the Company set forth in the Employment Agreement, Executive hereby releases and discharges the Released Parties from any and all Claims that Executive may have against the Released Parties arising under the Age Discrimination Employment Act of 1967, as amended, and the applicable rules and regulations promulgated thereunder (“ADEA”).  Executive acknowledges that he understands that the ADEA is a federal statute that prohibits discrimination on the basis of age in employment, benefits and benefit plans.  Executive also understands that, by signing this Agreement, he is waiving all Claims against any and all of the Released Parties.

d.    Executive understands that the laws and actions described above give Executive important remedies that relate to claims that he has or may have arising out of or in connection with his employment with, or separation from employment from, the Company and agree that he is freely and voluntarily giving up those remedies and claims. By signing this Agreement, Executive agrees that he is irrevocably and unconditionally waiving the right to proceed with discovery concerning any released claim in any future litigation with any Released Party, if any. Executive also agrees that he is fully releasing all claims for equitable, punitive or other relief, attorney’s fees, and other fees and costs incurred up to the date Executive signs this Agreement for any reason.  

e.    Executive represents and warrants that: (i) he is the lawful owner of all claims released through this Agreement; (ii) he has the beneficial interest in the payments and other benefits that he will receive under this Agreement; (iii) he has not assigned, and will not assign, any interest in any claim released through this Agreement; (iv) he has not filed, and is not and has not been subject to a voluntary or involuntary bankruptcy petition in the past three (3) years; (v) he is not a debtor in any pending bankruptcy case; (vi) no receiver, bankruptcy trustee or other third party may assert a right to any claim released through this Agreement or the payments and benefits to be tendered or provided under the Employment Agreement. Executive agrees that the foregoing representations and warranties shall survive the execution, performance and consummation or termination of this Agreement. Executive also agrees that he will fully indemnify and hold the Released Parties harmless to the extent any of the foregoing representations and warranties is or becomes untrue for any claims or damages, including attorneys’ fees, fines, costs, liquidated damages and punitive damages, asserted or awarded against any of the Released Parties and, should it be determined that any bankruptcy trustee or 

other third party has a right to the payments and benefits provided to Executive under the Employment Agreement, Executive immediately will return to the Company an amount equivalent to the full after-tax value of any such payments or benefits.

f.    Executive warrants that he does not have any complaint pending before any federal, state or local court or arbitration panel concerning any Released Party. Executive further agrees not to file a lawsuit against any of the Released Parties in any federal, state or local court, or with any arbitration panel, concerning any claim, demand, issue or cause of action released through this Agreement, except to the extent specifically excluded below in Section 2 below and its subparagraphs below. Should Executive file a lawsuit with any court or arbitration panel concerning any claim, demand, issue, or cause of action waived through this Agreement and not specifically excluded as described in Section 2 below and its subparagraphs below, Executive agrees that he will be responsible to pay the legal fees and costs that the Released Parties incur defending that lawsuit. Further, Executive agrees that nothing in this Agreement shall limit the right of any court or arbitration panel to determine, in its sole discretion, that the Released Parties are entitled to restitution, recoupment or set off of any monies paid to Executive should the release of any claims under this Agreement subsequently be found to be invalid.

2.Exclusions from Release of Claims and Covenant Not to Sue.
a.    Executive understands and agrees that nothing in this Agreement limits his right to bring an action to enforce the terms of this Agreement.

b.    Executive understands and agrees that the General Release contained in Section 1 above and its subparagraphs above does not include a waiver of any claims which cannot be waived by law and does not include a waiver of any vested rights Executive may have in any existing Company 401(k) plan, if any, nor will it preclude Executive from purchasing continuation health benefits coverage for himself and/or his dependents under the Company’s continuation health benefits policies to the extent he and his dependents are otherwise eligible and for the period provided by law under COBRA. The General Release also does not release any pending workers’ compensation claim or right to any workers’ compensation benefits with respect to any occupational illness or injury arising from or sustained due to his employment with the Company.

c.    Executive understands and agrees that nothing in this Agreement is intended to or shall prevent, impede or interfere with his non-waivable right to file a charge or complaint with the Equal Employment Opportunity Commission (“EEOC”), the Occupational Safety and Health Review Commission (“OSH”), the National Labor Relations Board (“NLRB”), the Securities and Exchange Commission (“SEC”), any other federal agency, labor board or commission, any state or local fair employment practices agency, or any other state or local agency, labor board or commission (collectively, the “Government Agencies”). Executive also understands that nothing in this Agreement in any way limits his ability to provide information and/or documents to or otherwise communicate with any Government Agencies, participate in any investigation of any Government Agencies, testify or otherwise participate in any proceeding that may be conducted by any Government Agencies concerning the Company’s past or future conduct, or engage in any activities now or in the future that are protected under the whistleblower statutes administered by OSH or any other Government Agencies without notice to the Company.  However, Executive agrees that he is completely waiving any right to recover money, share in or participate in any monetary award in connection with or resulting from the prosecution of any charge, investigation or proceeding by any Government Agency, except that this Agreement does not limit the right to receive and fully retain a monetary reward from any government-administered whistleblower award or other incentive program for providing information directly to any Government Agencies (such as those administered by the OSH or the SEC).  

d.    Executive understands and agrees that nothing in this Agreement prohibits him filing a claim to collect any unemployment compensation benefits available to him under applicable state Unemployment Insurance Compensation law or from collecting any award of benefits granted to him in accordance with that law.   

e.    Executive understands and agrees that this Agreement does not limit any statutory rights he may have to bring an action to challenge the terms of this Agreement or contest the validity of the General Release set forth in Section 1 above under the ADEA or the OWBPA.  
    
3.Non-Admission of Liability.
a.    Executive agrees that this Agreement shall not in any way be construed as an admission that any of the Released Parties owe him any money or have acted wrongfully, unlawfully, or unfairly in any way towards him. In fact, Executive understands that the Released Parties specifically deny that they have violated any federal, state or local law or ordinance or any right or obligation that they owe or might have owed to Executive at any time and maintain that they have at all times treated Executive in a fair, lawful, non-discriminatory and non-retaliatory manner.

b.    Except as provided in Section 6(e) or Section 6(f), as applicable, of the Employment Agreement or in the Indemnification Agreement, Executive acknowledges and agrees that the Company has fully satisfied any and all obligations owed to him arising out of his employment with or termination from the Company, and no further sums or benefits are owed to him by the Company or by any of the other Released Parties at any time.

c.    Executive agrees that the Severance Benefits or Change of Control Severance Benefits, as applicable, as described in the Employment Agreement constitute good and valuable consideration in exchange for the promises herein and are, individually and together, in addition to anything of value to which Executive is presently entitled by virtue of any understandings, agreements or contracts between Executive and any of the Released Parties, his employment with any Released Party and separation from that employment, and any of the Released Parties’ policies, practices, plans, agreements or prior understandings with him, including but not limited to compensation, vacation, bonus, severance, paid time off, incentive compensation, equity incentives, stock options, offer letters, employment agreements and any other fringe benefit plans, policies or practices.

4.No Right or Guarantee to Re-Employment or Reinstatement.  Executive agrees that the termination of his employment is permanent and the Released Parties have not in any way guaranteed that he will be recalled, rehired, reinstated or in any way retained by the Company. 

5.Reference-Related Communications.
a.    Executive agrees that, should he or any prospective employer for him desire that the Company engage in any reference-related communications, such inquiries shall be directed exclusively to the Company’s Human Resources Department for confirmation only of Executive’s: (i) dates of employment and (ii) employment position. Executive also agrees that, except for the Company’s verbal confirmation of dates of employment and position title as expressly set forth above, the Released Parties will have no obligation whatsoever to engage in any reference-related communications with any past, existing or prospective employers unless compelled by a court order or other legal process. Notwithstanding the foregoing, Executive understands and agrees that the Released Parties will remain free to internally communicate to 

those with a business need to know, any and all information concerning his employment history with the Company.

b.    Executive acknowledges and agrees that any statements made on social media by any current or former employees or other representatives of the Company are not official statements of reference by the Company. Executive understands and agrees that, should he wish for the Company to provide any information related to the salary and/or benefits paid or provided during his employment to any third party, Executive will provide the Company’s Human Resources Department with a written release expressly authorizing the disclosure of the same.
6.Consultation with Attorney; Voluntary Agreement.  The Company advises Executive to consult with an attorney of his choosing prior to signing this Agreement.  Executive understands and agrees that he has the right and has been given the opportunity to review this Agreement and, specifically, the General Release in Section 1 above, with an attorney.  Executive also understands and agrees that he is under no obligation to consent to the General Release set forth in Section 1 above.  Executive acknowledges and agrees that the payments to be made to Executive pursuant to the Employment Agreement are sufficient consideration to require him to abide with his obligations under this Agreement, including but not limited to the General Release set forth in Section 1.  Executive represents that he has read this Agreement, including the General Release set forth in Section 1, and understands its terms and that he enters into this Agreement freely, voluntarily, and without coercion.

7.Effective Date; Revocation.  Executive acknowledges and represents that he has been given forty-five (45) days following the termination of his employment during which to review and consider the provisions of this Agreement and, specifically, the General Release set forth in Section 1 above.  Executive further acknowledges and represents that he has been advised by the Company that he has the right to revoke this Agreement for a period of seven (7) days after signing it.  Executive acknowledges and agrees that, if he wishes to revoke this Agreement, he must do so in a writing, signed by him and received by the Company no later than 5:00 p.m. Eastern Time on the seventh (7th) day of the revocation period.  If no such revocation occurs, the General Release and this Agreement shall become effective on the eighth (8th) day following his execution of this Agreement and shall be final and binding on Executive. 
8.Severability.  In the event that any one or more of the provisions of this Agreement shall be held to be invalid, illegal or unenforceable, the validity, legality and enforceability of the remainder of the Agreement shall not in any way be affected or impaired thereby.
9.Governing Law.  This Agreement and any other document or instrument delivered pursuant hereto, and all claims or causes of action that may be based upon, arise out of or relate to this Agreement will be governed by, and construed under and in accordance with, the internal laws of the Commonwealth of Pennsylvania, without reference to rules relating to conflicts of laws.
10.Entire Agreement.  This Agreement, the Employment Agreement and the other agreements referred to in the Employment Agreement (other than the Indemnification Agreement) constitute the entire agreement and understanding of the parties with respect to the subject matter herein and supersedes all prior agreements, arrangements and understandings, written or oral, between the parties.  Executive acknowledges and agrees that he is not relying on any representations or promises by any representative of the Company concerning the meaning of any aspect of this Agreement.
11.Amendment. This release shall not be amended, supplemented or otherwise modified in any way except in a writing signed by Executive and the Company. 

12.Counterparts.  This Agreement may be executed in counterparts, each of which shall be deemed an original but all of which together shall constitute one and the same instrument.
[Signature Page Follows]

IN WITNESS WHEREOF, intending to be forever legally bound hereby, the parties hereto have executed this Agreement, being seven (7) pages in total length as of the dates set forth below.

OPTINOSE US, INC.

By:_______________________  Date: __________
     Name:
     Title:

EXECUTIVE

By:_______________________  Date: __________
     Name: [___________________].LOAN
AND SECURITY AGREEMENT

This
LOAN AND SECURITY AGREEMENT is entered into as of December 9, 2022 by and among PINNACLE BANK, a California corporation (Lender). with
an office located at 18181 Butterfield Blvd., Ste. 135, Morgan Hill, CA 95037, on the one hand, and APPLIED UV, INC., a Delaware
corporation (Applied), STERILUMEN, INC., a New York corporation (Sterilumen), and MUNN
WORKS, LLC, a New York limited liability company (Munn Works; together with Applied and Sterilumen, individually
and collectively, Borrower), with their chief executive office located at 150 N. Macquesten Parkway, Mt. Vernon, NY
10550, on the other hand.

The parties
agree as follows:

1.
DEFINITIONS AND CONSTRUCTION 

1.1
Terms. As used in this Agreement, the following terms shall have the following meanings: 

Accounts means,
in addition to the definition of accounts in the Code, all presently existing and hereafter arising accounts receivable, contract rights,
health-care-insurance receivables, and all other forms of obligations owing to Borrower arising out of the sale, lease, license or assignment
of goods or other property, or the rendition of services by Borrower, whether or not earned by performance, all credit insurance, guaranties,
and other security therefor, as well as all merchandise returned to or reclaimed by Borrower and Borrower's Books relating to any of
the foregoing.

Advances
means all loans, advances and other financial accommodations by Lender to or on account of the Borrower, including those under
this Agreement.

Agreement
means collectively this Loan and Security Agreement, any concurrent or subsequent rider to this Loan and Security Agreement,
and any extensions, supplements, amendments, addenda or modifications to or in connection with this Loan and Security Agreement or any
such rider.

Authorized
Officer means any officer or other representative of Borrower authorized in a writing delivered to Lender to transact business
with Lender.

Borrower's
Books means all of Borrower's books and records including all of the following: ledgers; records indicating, summarizing, or
evidencing Borrower's assets or liabilities, or the Collateral; all information relating to Borrower's business operations or financial
condition; and all computer programs, disk or tape files, printouts, runs, or other computer prepared information, and the facilities
containing such information.

Business
Dav means any day which is not a Saturday, Sunday, or other day on which banks in the State of California are authorized or required
to close.

Chattel
Paper shall have the same meaning ascribed to such term in the Code.

Code
means the California Uniform Commercial Code, as amended or revised from time to time.

Collateral
means all assets of the Borrower, whether now owned or existing, or hereafter acquired or arising, and wherever located, including,
without limitation, all of the following assets, properties and interests in property of Borrower: all Accounts; all Equipment; all General
Intangibles; all Chattel Paper; all Inventory; all Negotiable Collateral; all Investment Property; all Financial Assets; all Letter of
Credit Rights; all Supporting Obligations; all Commercial Tort Claims; all Deposit Accounts; all money or any assets of Borrower which
hereafter come into the possession, custody, or control of Lender; all proceeds and products, whether tangible or intangible, of any
of the foregoing, including proceeds of insurance covering any or all of the foregoing, and any and all tangible or intangible property
resulting from the sale, lease, license or other disposition of the foregoing, or any portion thereof or interest therein, and all proceeds
thereof, and any other assets of Borrower or any Guarantor which may be subject to a security interest or lien in favor of Lender.

    	 	1	 

     

    

Commercial
Tort Claim shall have the meaning ascribed to such term in the Code.

Dailv
Balance means the amount of the Obligations owed at the end of a given day.

Deposit
Account shall have the meaning ascribed to such term in the Code.

Documents
shall have the meaning ascribed to such term in the Code.

Eligible
Accounts means those Accounts created by Borrower in the ordinary course of business, which are and at all times shall continue
to be acceptable to Lender in all respects; provided, however, that standards of eligibility may be fixed and revised from time to time
by Lender in Lender's exclusive judgment. In determining such acceptability and standards of eligibility, Lender may, but need not, rely
on agings, reports and schedules of Accounts furnished by Borrower, but reliance by Lender thereon from time to time shall not be deemed
to limit Lender's right to revise standards of eligibility at any time as to both Borrower's present and future Accounts. In general,
an Account shall not be deemed eligible unless: (1) the Account debtor on such Account is and at all times continues to be acceptable
to Lender, and (2) such Account complies in all respects with the representations, covenants and warranties hereinafter set forth. Except
in Lender's sole discretion, Eligible Accounts shall not include any of the following: (a) Accounts which the Account debtor has failed
to pay within ninety (90) days of invoice date, (b) all Accounts owed by any Account debtor that has failed to pay twenty-five percent
(25%) or more of its Accounts owed to Borrower within ninety (90) days of invoice date; (c) Accounts with respect to which goods are
sold on a bill and hold basis or placed on consignment or for a guaranteed sale, or which contain other terms by reason of which payment
by the Account debtor may be conditional; (d) Accounts with respect to which the Account debtor is not a resident of the United States
(including, without limitation, Accounts owing from Account debtors Birkenstock and Cellarius Kereskedohaz) unless the Account is supported
by foreign credit insurance or a letter of credit, in both instances satisfactory to and assigned to Lender; (e) Accounts with respect
to which the Account debtor is the United States or any department, agency or instrumentality of the United States, any State of the
United States or any city, town, municipality or division thereof unless all filings have been made under the Federal Assignment of Claims
Act or comparable state or other statute; (f) Accounts with respect to which the Account debtor is an officer, employee or agent of,
or subsidiary of, related to, affiliated with or has common shareholders, officers or directors with Borrower; (g) Accounts with respect
to which Borrower is or may become liable to the Account debtor for goods sold or services rendered by the Account debtor to Borrower;
(h) Accounts with respect to an Account debtor whose total obligations to Borrower exceed twenty-five percent (25%) of all Accounts,
to the extent such obligations exceed twenty-five percent; (i) Accounts with respect to which the Account debtor disputes liability or
makes any claim with respect thereto, or is subject to any insolvency proceeding, or becomes insolvent, fails or goes out of business;
G) the Account arises out of a contract or purchase order for which a surety bond was issued on behalf of Borrower; (k) Accounts in which
Lender does not have first priority and exclusive perfected security interest; (I) Accounts where the Account Debtor is in a jurisdiction
for which Borrower is required to file a notice of business activities or similar report and Borrower has not filed such report within
the time period required by applicable law; (m) any Account as to which an invoice has not been issued to the Account debtor; (n) any
Account which represents a progress payment on a contract which has not been fully completed by Borrower unless: (1) milestones are verified
as approved directly from the applicable Account debtor, (2) such Account is otherwise approved by Lender in its sole discretion, and
(3) Lender has received all contracts, statements of work, change orders and similar documentation giving rise to such Account; (o) Accounts
with respect to which Borrower has not performed all things required of Borrower by the terms of all agreements or purchase orders giving
rise to such Accounts, including pre-billed Accounts; (p) Accounts arising from jobs or contracts with respect to which Borrower's entitlement
to payment on such Account is subject to any retention, holdback or other withholding, whether related to any mechanics' or materialmen's
liens or otherwise; (q) Accounts deemed ineligible for Advances by Lender in its sole discretion including, without limitation, Accounts
for which a proof of delivery has not been provided to or made available to Lender or Accounts that are not verified as valid (I) by
the applicable Account debtors following Lender's request for verification, or (2) via Lender's access of an Account debtors' accounts
payable web portal, as applicable; (r) Accounts arising from sales or services rendered to an individual consumer for personal, family
or household purposes; (s) Accounts requiring an approval from the Account debtor prior to payment and where such approval has not been
provided; or (t) Accounts as to which a deposit has been received from the applicable Account debtor, to the extent such deposit reduces
the outstandiiig amount owing on the Accounts of such applicable Account debtor.

    	 	2	 

     

    

Eligible
Invento,y means Inventory of Borrower Sterilumen consisting of first quality finished goods held for sale in the ordinary course
of Borrower's business and raw materials for such finished goods which are located at Borrower's premises in the United States and acceptable
to Lender in all respects; provided, however, that general criteria for Eligible Inventory may be established and revised from time to
time by Lender in Lender's exclusive judgment. In determining such acceptability and standards of eligibility, Lender may, but need not,
rely on reports and schedules of Inventory furnished to Lender by Borrower, but reliance thereon by Lender from time to time shall not
be deemed to limit Lender's right to revise standards of eligibility at any time. In general, except in Lender's sole discretion, Eligible
Inventory shall not include: raw materials that are proprietary in nature, work in process, components which are not part of finished
goods, spare parts, packaging and shipping materials, materials used or consumed in Borrower's business, goods returned to, repossessed
by, or stopped in transit by Borrower, Inventory which is obsolete or slow moving, Inventory subject to a security interest or lien in
favor of any third party, bill and hold goods, Inventory which is not subject to a perfected security interest in favor of Lender, returned
and/or defective goods, "seconds" and Inventory purchased on consignment, Inventory which contains any labels, trademarks,
trade names or other identifying characteristics which are the properties of third parties unless the use of same by Borrower is under
a valid license, royalty or similar agreement with the owner thereof, in form and substance satisfactory to Lender, and which remains
in full force and effect, and has not been terminated, and such owner thereof has issued in favor of Lender an agreement, in form and
substance satisfactory to Lender, allowing Lender to dispose of said items of Inventory upon the occurrence of an Event of Default, Inventory
in-transit to Borrower, and Inventory located at a leased premises, public or private warehouse or with a bailee or other third party
unless Lender has received a waiver agreement, in form and substance acceptable to Lender, from such landlord, mortgagee, warehouseman,
bailee or other third party. Eligible Inventory shall for the purposes of this Agreement be valued at the lower of cost or wholesale
market value and shall not include tax, delivery, handling and installation charges (the Eligible Inventmy Value).

Eligible
lnventmy Value shall have the meaning ascribed to such term in the definition of Eligible Inventory.

Equipment
means in addition to the definition of equipment in the Code, all of Borrower's present and hereafter acquired equipment, machinery,
machine tools, motors, furniture, furnishings, fixtures, motor vehicles, rolling stock, processors, tools, pans, dies, jigs, goods (other
than consumer goods or farm products) and any interest in any of the foregoing, and all attachments, accessories, accessions, replacements,
substitutions, additions, and improvements to any of the foregoing, wherever located.

ERISA
means the Employee Retirement Income Security Act of 1974, as amended, and the regulations thereunder.

ERISA
Affiliate means each trade or business (whether or not incorporated and whether or not foreign) which is or may hereafter become
a member of a group of which Borrower is a member and which is treated as a single employer under ERISA Section 4001(b)(l), or IRC Section
414.

Event
of Default means the events specified in Section 8 below.

Financial
Assets shall have the meaning ascribed to such term in the Code.

General
Intangibles means all of Borrower's present and future general intangibles and other personal property (including choses or things
in action, goodwill, patents, trade names; trademarks, service marks, copyrights, blueprints, drawings, purchase orders, customer lists,
monies due or recoverable from pension funds, route lists, infringement claims, computer programs, computer discs, computer tapes, Borrower's
Books, literature, reports, catalogs, deposit accounts, insurance premium rebates, tax refunds, and tax refund claims) other than goods
and Accounts.

    	 	3	 

     

    

Guarantor
means each person or entity which guarantees the Obligations or issues a validity guaranty relating to the Collateral or pledges
any assets to Lender as additional security for the Obligations.

Insolvencv
Proceeding means any proceeding commenced by or against any person or entity under any provision of the federal Bankruptcy Code,
as amended, or under any other state or federal insolvency law, including assignments for the benefit of creditors, formal or informal
moratoria, compositions, or extensions generally with its creditors.

Instruments
shall have the meaning ascribed to such term in the Code.

Inventory
means, in addition to the definition of inventory in the Code, all present and future inventory in which Borrower has any interest,
including goods held for sale or lease or to be furnished under a contract of service, Borrower's present and future raw materials, work
in process, finished goods, tangible property, stock in trade, wares, and materials used in or consumed in Borrower's business, goods
which have been returned to, repossessed by, or stopped in transit by Borrower, packing and shipping materials, wherever located, any
documents of title representing any of the above, and Borrower's Books relating to any of the foregoing.

Investment
Property shall have the meaning ascribed to such term in the Code.

RC
means the Internal Revenue Code of 1986, as amended, and the regulations thereunder.

Lender
Expenses means all of the following without limitation: (a) costs and expenses paid or incurred by Lender in connection with
the Loan Documents or the Obligations; (b) costs and expenses (whether taxes, assessments, insurance premiums or otherwise) required
to be paid by Borrower under any of the Loan Documents which are paid or advanced by Lender; (c) filing, recording, publication, appraisal
and search fees paid or incurred by Lender in connection with Lender's transactions with Borrower; (d) costs and expenses incurred by
Lender in administering Borrower's loan account and lending relationship with Borrower or in connection with the disbursement or collection
of funds (including without limitation (1) twenty-five dollars ($25.00) for each cashier's check or wire transfer made by Lender to parties
other than Borrower, (2) twenty-five dollars ($25.00) for each overnight delivery made by Lender to, Borrower, anyone designated by Borrower,
or any third party, (3) Seventy Five Dollars ($75.00) per hour (with a 2 hour minimum) for photocopy charges, for reports and items previously
prepared and delivered by Lender and/or for reports and items not regularly prepared and provided by Lender to Borrower, (4) One Hundred
Dollars ($100.00) for each returned or dishonored check received by Lender from Borrower, any Account debtor or any third party, provided,
however, that Lender reserves the right to change the amount of the foregoing specified charges in subsections (1)-(4) with prior written
notice to Borrower, and (5) charges imposed in connection with Borrower's acceptance of merchant credit cards in payment of amounts owed
by Account debtors); (e) a lockbox fee of zero dollars ($0.00) per month or any portion thereof; (f) a web access fee of zero dollars
($0.00) per month or any portion thereof; (g) a mail forwarding fee of five hundred dollars ($500.00) per month for a three (3) month
period following the termination of this Agreement and the repayment of the Obligations; (h) costs and expenses incurred by Lender to
correct any default or enforce any provision of the Loan Documents, or in gaining possession of, maintaining, handling, preserving, storing,
shipping, selling, preparing for sale, or advertising to sell the Collateral, or any portion thereof, irrespective of whether a sale
is consummated; (i) costs and expenses incurred by Lender in enforcing or defending the Loan Documents, including, but not limited to,
costs and expenses incurred in connection with any proceeding, suit, enforcement of judgment, or appeal; (j) Lender's reasonable attorneys'
fees and expenses, including allocated fees of in-house counsel, incurred in advising, structuring, drafting, reviewing, administering,
amending, terminating, enforcing, defending, or otherwise representing Lender (including, without limitation, in connection with responding
as a third party to deposition, subpoena and like requests) concerning the Loan Documents or the Obligations; and (k) a loan documentation
fee of Five Hundred Dollars ($500.00) in connection with Lender's in-house documentation of the original Loan Documents prior to the
initial Advance hereunder, together with all fees and costs of Lender's outside counsel relating to, documenting and negotiating such
original Loan Documents prior to the initial Advance hereunder (not to exceed $20,000.00), and the taking of other actions for Lender's
benefit prior to or contemporaneously with the initial Advance hereunder. Lender shall have the right to mark-up any third-party costs
that constitute Lender Expenses by ten percent (10%) to cover Lender's costs of administration of same and to include such additional
I 0% amount in the Lender Expenses.

    	 	4	 

     

    

Letter
of Credit Rights shall have the meaning ascribed to such term in the Code.

Loan
Documents means, collectively, this Agreement, any Note(s), any security agreements, pledge agreements, mortgages, deeds of trust
or other encumbrances or agreements which secure the Obligations, and any other agreement entered into between Borrower and Lender or
by Borrower or a Guarantor in favor of Lender relating to or in connection with this Agreement or the Obligations, as each of same may
be amended, modified, renewed, extended or substituted from time to time.

Multiemployer
Plan means a multiemployer plan as defined in ERISA Sections 3(37) or 4001(a)(3) or IRC Section 414(£).

Negotiable
Collateral means all of Borrower's present and future letters of credit, notes, drafts, Instruments, Documents, leases, and Chattel
Paper.

Net
Face Amount means with respect to an Account, the gross face amount of such Account less (at Lender's option) all trade discounts,
sales, excise and similar taxes, or other deductions to which the associated Account debtor is entitled.

Note
means any promissory note made by Borrower to the order of Lender concurrently herewith or at any time hereafter.

Obligations
means all loans, Advances, debts, liabilities (including all interest and amounts charged to the Obligations pursuant to any
agreement authorizing Lender to charge the Obligations), obligations, lease payments, guaranties, covenants, and duties owing by Borrower
to Lender of any kind and description (whether pursuant to or evidenced by the Loan Documents or by any other agreement between Lender
and Borrower, and irrespective of whether for the payment of money), whether made or incurred prior to, on, or after the Termination
Date, direct or indirect, absolute or contingent, due or to become due, now existing or hereafter arising, including any debt, liability
or obligation owing from Borrower to others which Lender may obtain by assignment or otherwise, and all interest thereon and all Lender
Expenses.

Plan
means any plan described in ERISA Section 3(2) maintained for employees of Borrower or any ERISA Affiliate, other than a Multiemployer
Plan.

Prime
Rate means the variable rate of interest, per annum, from time to time published in the Wall Street Journal (the Journal)
as the "prime rate." In the event the Journal publishes a range of rates as the "prime rate", Lender's "Prime
Rate" shall be determined by reference to the highest number in the range. In the event that the Prime Rate announced by Lender
is, from time to time hereafter, changed, adjustment in the rate of interest chargeable on Borrower's Obligations under this Agreement
shall be made on the effective date of the change in the Prime Rate. The rate of interest, as adjusted, shall apply until the Prime Rate
is adjusted again.

Revolving
Credit Facility means the revolving credit facility provided for in Section 2.1 hereof.

Subordinating
Creditor means Streeterville Capital, LLC, and any other person or entity to whom Borrower is indebted on a secured or unsecured
basis, and which person or entity is required to sign a Subordination Agreement in favor of Lender.

Subordination
Agreement means a subordination agreement in form and substance acceptable to Lender whereby Subordinating Creditor (if any)
subordinates in favor of Lender: (a) obligations owed to it by Borrower in favor of the Obligations owing by Borrower to Lender; and/or
(b) security interests and liens granted to it by Borrower in favor of security interests and liens granted by Borrower to Lender.

Supporting
Obligation shall have the same meaning ascribed to such term in the Code.

Term
means the period from the date of the initial Advance hereunder through and including the later of (a) the Termination Date and
(b) the payment and performance in full of the Obligations.

    	 	5	 

     

    

Termination
Date means (a) December 9, 2024 (the period through such date the Initial Term), unless such date is extended
pursuant to Section 3.1 hereof, and if so extended on one or more occasions the last date of the last such extension, or (b)
if earlier terminated by Lender pursuant to Sections 3. l or 9.1 hereof, the date of such termination.

1.2 
Construction. Unless the context of this Agreement clearly requires otherwise, references to the plural include the singular and
to the singular include the plural. The words hereof, herein, hereby, hereunder, and similar terms in this Agreement refer to
this Agreement as a whole and not to any particular provision of this Agreement. Section, subsection, clause and exhibit references are
to this Agreement unless otherwise specified. Words importing a particular gender mean and include every other gender. Paragraphs and
paragraph numbers have been set forth herein for convenience only; unless the contrary is compelled by the context, everything contained
in each paragraph applies equally to all paragraphs herein. "Includes" and "including" are not limiting. "Or''
is not exclusive. "All" includes "any" and "any" includes "all". The term "security interest"
has the inclusive meaning of a "lien".

1.3 
Accounting Terms. All accounting terms not specifically defined herein shall be construed in accordance with generally accepted accounting
principles (GAAP) as in effect from time to time. When used herein, the term financial statements shall include the notes and schedules
thereto.

1.4 
Exhibits. All of the exhibits, addenda or riders attached to this Agreement shall be deemed incorporated herein by reference.

1.5 
Code. Any terms used in this Agreement which are defined in the Code shall be construed and defined as set forth in the Code, unless
otherwise defined herein.

2.
ADVANCES AND TERMS OF PAYMENT

 

2.1 
Revolving Advances; Advance Limit. Upon the request of Borrower, made at any time from and after the date hereof until the Termination
Date, and so long as no Event of Default has occurred and is continuing, Lender may, in its sole and absolute discretion, make Advances
in an amount up to (a) eighty-five percent (85%) of the aggregate Net Face Amount of Eligible Accounts, plus (b) the least of (1) the
sum of twenty percent (20%) of the aggregate Eligible Inventory Value of raw materials Eligible Inventory and thirty-five percent (35%)
of the aggregate Eligible Inventory Value of finished goods Eligible Inventory, (2) One Million Dollars ($1,000,000.00), (3) Eighty percent
(80%) of the net orderly liquidation value (NOLV) of raw materials and finished goods Eligible Inventory as determined by an outside
inventory appraisal, or (4) one hundred percent (100%) of the aggregate outstanding principal amount of Advances under Section 2.l(a):
provided, however, that in no event shall the aggregate amount of the outstanding Advances under the Revolving Credit Facility be
greater than, at any time, the amount of Five Million Dollars ($5,000,000.00) (said dollar limit the Advance Limit). Borrower
shall draw all available Advances under subparagraph (a) above prior to drawing any available Advances under subparagraph (b) above.
Lender may create reserves against amounts that would be available for borrowing pursuant to the foregoing or reduce its advance rates
based upon Eligible Accounts and Eligible Inventory without declaring an Event of Default if it determines, in its good faith credit
judgment that such reserves are necessary, including, without limitation: (i) to protect Lender's interest in Collateral; (ii) to protect
Lender against possible non-payment of Accounts for any reason by one or more Account debtors; (iii) in the event the dilution with respect
to the Accounts for any period (based on the ratio of ( l) the aggregate amount of reductions in Accounts other than as a result of payments
in cash to (2) the aggregate amount of total sales) has increased in any material respect or may be reasonably anticipated to increase
in any material respect above historical levels; (iv) in the event the general creditworthiness of one or more Account debtors has declined;
(v) to protect Lender against possible diminution of the value of any Collateral; (vi) to protect Lender against possible non-payment
of any of the Obligations; (vii) for any taxes; (viii) in respect of any state of facts that could constitute an Event of Default; (ix)
in the event the number of days of turnover oflnventory for any period has increased in any material respect; (x) in the event the liquidation
value of Eligible Inventory, or any category thereof, has decreased; (xi) in the event cost or count variances exist or are anticipated
to exist with respect to Inventory; or (xii) in the event the nature or quality of Inventory has deteriorated. Borrower acknowledges
it may have requested that Lender enter into an indemnification agreement in favor of [insert name of existing lender] and agrees that
any sums paid by Lender to [insert name of existing lender] thereunder shall be deemed to be Advances under this Section 2.1.

    	 	6	 

     

    

2.2
Overadvances; Special Credit Accommodations.

 

A. 
All Advances shall be added to and be deemed part of the Obligations when made. If, at any time and for any reason, without Lender's
prior written consent, the aggregate amount of the outstanding Advances under the Revolving Credit Facility exceed the dollar or percentage
limitations contained in Section 2.1 (an Overadvance), then an Event of Default shall occur as a result thereof
and Borrower shall, without demand by Lender, immediately pay to Lender, in cash, the amount of such Overadvance. Without waiving the
Event of Default resulting from any such Overadvance and without affecting Borrower's obligation to immediately repay to Lender the amount
of any such Overadvance, Borrower shall pay Lender a fee (the Overadvance Fee) in an amount equal to five percent (5.0%)
of the amount of any such Overadvance, but not less than $500 per occurrence of any such Overadvance, plus interest on the Overadvance
amount applicable to any such Overadvance at the Default Rate set forth below so long as any such Overadvance is outstanding.

B. 
In the event Lender, in its sole and absolute discretion, from time to time: (a) consents to an Overadvance; (b) provides an Advance
to Borrower that involves a variance from the terms or conditions of the Loan Agreement (including, without limitation, the making of
an Advance: (1) against Accounts that are ineligible as a result of the cross-aging or concentration limitations set forth in subsections
(b) or (h), respectively, of the definition of Eligible Accounts, or (2) after the then effective Termination Date); or (c) provides
an Advance to Borrower that involves a variance from Lender's standard customs, practices or procedures (the foregoing, each, a Special
Credit Accommodation), then Borrower, upon demand by Lender, shall immediately pay to Lender, in cash, the amount of such Special
Credit Accommodation. At Lender's option, each Special Credit Accommodation may be evidenced by a writing, in form and substance satisfactory
to Lender, but the failure to prepare such a writing shall not affect the existence of such Special Credit Accommodation. Without affecting
Borrower's obligation to repay to Lender upon demand the amount of any Special Credit Accommodation, Borrower shall pay Lender a fee
(the Special Credit Accommodation Fee) in an amount equal to five percent (5.0%) of the amount of any such Special Credit
Accommodation, but not less than $500 per occurrence of any such Special Credit Accommodation, plus interest on the Special Credit Accommodation
amount applicable to any such Special Credit Accommodation at the Default Rate set forth below so long as any such Special Credit Accommodation
is outstanding.

2.3 
Authorization to Make Advances. Lender is hereby authorized to make the Advances based upon telephonic or other instructions received
from anyone reasonably purporting to be an Authorized Officer, or, at the discretion of Lender, if such Advances are necessary to satisfy
any Obligations. All requests for Advances shall specify the date on which such Advance is to be made (which day shall be a Business
Day) and the amount of such Advance. Requests received after 10:30 a.m. Pacific time on any day shall be deemed to have been made as
of the opening of business on the immediately following Business Day. All Advances made under this Agreement shall be conclusively presumed
to have been made to, at the request of, and for the benefit of Borrower when deposited to the credit of Borrower or otherwise disbursed
in accordance with the instructions of Borrower or in accordance with the terms and conditions of this Agreement. Unless otherwise requested
by Borrower, all Advances shall be made by a wire transfer to the deposit account of Borrower designated on Schedule 2.3 annexed
hereto, or such other account as Borrower shall notify Lender in writing. Borrower shall pay to Lender a funds transfer fee of $25.00
for each Advance. Said fees shall be payable on the first day of each month of the Tenn for all Advances made during the preceding month.

2.4
Interest.

 

A. 
Except where specified to the contrary in the Loan Documents interest shall accrue on the Daily Balance at the per annum rate of one
and one-ha}( percentage points (1.50%) (the Interest Margin) above the greater of: (a) the Prime Rate, or (b) four percent
per annum (4.00%) (the Deemed Prime Rate), but with the Interest Margin with respect to that portion of the Daily Balance
consisting of 'Advances against Eligible Inventory to be the per annum rate of two percentage points (2.00%) (respectively, as applicable,
the Interest Rate). Without prejudicing or waiving Lender's right to assess and impose interest at the Default Rate (as
defined below) as a result of the occurrence of any of the following events, and without waiving Lender's ability to declare an Event
of Default at any time as a result thereof, if Borrower fails to perform any covenant, term or provision of this Agreement or any of
the Loan Documents (including, without limitation, the timely delivery of any financial statements, reports, documents, or certificates
required by this Agreement), then (at Lender's discretion and with respect to any such event) interest shall accrue on the Daily Balance
at the per annum rate of six percentage points (6.0%) above the Interest Rate or above such other interest rate applicable to such portion
of the Daily Balance (the Alternative Interest Rate), with Borrower to be granted a five (5) day cure period, from the
date of Lender's notice of its intent to invoke the Alternative Interest Rate, in which to perform such failed covenant, term or provision
prior to the Alternative Interest Rate taking effect, and if not cured, the Alternative Interest Rate shall take effect upon the expiration
of such cure period and shall remain in effect until such failed covenant, term or provision is performed. The Daily Balance shall, at
the option of Lender, from and after the occurrence of an Event of Default, and without constituting a waiver of any such Event of Default,
and if the Obligations are not paid in full by the Termination Date, and without waiving the maturity of the Obligations on the Termination
Date, bear interest at the per annum rate of eighteen percentage points (18.0%) above the Interest Rate or above such other interest
rate applicable to such portion of the Daily Balance (the Default Rate). All interest payable under the Loan Documents
shall be computed on the basis of a three hundred sixty (360) day year for the actual number of days elapsed on the Daily Balance. Interest
as provided for herein shall continue to accrue until the Obligations are paid in full.

    	 	7	 

     

    

B. 
In the event the Deemed Prime Rate is inapplicable, the interest rate payable by Borrower under the terms of this Agreement shall be
adjusted in accordance with any change in the Prime Rate from time to time on the date of any such change. All interest payable by Borrower
shall be due and payable on the first day of each calendar month during the Term. Lender may, at its option, add such interest and all
Lender Expenses to the Obligations, and such amount shall thereafter accrue interest at the rate then applicable under this Agreement.
Notwithstanding anything to the contrary contained in the Loan Documents, the minimum interest payable by Borrower on the Advances shall
be Four Thousand Dollars ($4,000.00) per month (the Minimum Monthly Interest Payment).

C. 
In no event shall interest on the Obligations exceed the highest lawful rate in effect from time to time. It is not the intention of
the parties hereto to make an agreement which violates any applicable state or federal usury laws. In no event shall Borrower pay or
Lender accept or charge any interest which, together with any other charges upon the principal or any portion thereof, exceeds the maximum
lawful rate of interest allowable under any applicable state or federal usury laws. Should any provision of this Agreement or any existing
or future Notes or Loan Documents between the parties be construed to require the payment of interest or any other fees or charges which
could be construed as interest which, together with any other charges upon the principal or any portion thereof and any other fees or
charges which could be construed as interest, exceeds the maximum lawful rate of interest, then any such excess shall be applied to the
remaining principal balance of the Obligations, if any, and the remainder refunded to Borrower.

D. 
Notwithstanding the foregoing, for purposes of this Agreement, it is the intention of Borrower and Lender that "interest" shall
mean, and be limited to, any payment to Lender which compensates it for extending credit to Borrower, for making available to Borrower
a revolving credit facility during the term of this Agreement and for any default or breach by Borrower of a condition upon which credit
was extended. Borrower and Lender agree that, for the sole purpose of calculating the "interest" paid by Borrower to Lender,
it is the intention of Borrower and Lender that interest shall mean and include, and be expressly limited to, any interest accrued on
the aggregate outstanding balance of the Obligations during the term hereof pursuant to Sections 2.4(A) and 2.4(B); and any Overadvance
Fee, Special Credit Accommodation Fee, Facility Fee, and late payment fees charged to Borrower during the term hereof. Borrower and Lender
further agree that it is their intention that the following fees shall not constitute "interest": any Administration Fees,
Unused Line Fees, Early Termination Fees, any Field Examination Fees, Late Reporting Fees, Misdirected Payment Fees, any attorney fees
incurred by Lender, any premiums or commissions attributable to insurance guaranteeing repayment, finders' fees, credit report fees,
appraisal fees, fees included in the Lender Expenses or fees for document preparation or notarization. To the extent, however, that California
law excludes from the calculation of "interest" any fees defined herein as interest, or includes as interest any fees or other
sums which are intended not to constitute interest California law shall supersede and prevail and all such interest shall be subject
to paragraph 2.4(C) above.

2.5 
Collection of Accounts; Misdirected Payment Fee. Following an Event of Default that has not been cured pursuant to any applicable
cure period for same (if any), Lender or a Lender designee may, at any time, with or without notice to Borrower, notify customers and
Account debtors and other obligors that the Accounts and other Collateral have been assigned to Lender, and that Lender has a security
interest in them and collect the Accounts and other Collateral directly, and add the collection costs and expenses to the Obligations,
but, unless and until Lender does so or gives Borrower other written instructions, Borrower shall notify all Account debtors and other
obligors to remit payments on Accounts and other Collateral to a lockbox and/or blocked deposit account to be designated by Lender. All
such payments remitted to the lockbox and/or blocked deposit account shall be credited to a deposit account of Lender and into which
account remittances from account debtors or obligors of other clients of Lender may be credited. If notwithstanding said notice Borrower
obtains payment on any Account or other Collateral, Borrower shall receive all payments on Accounts and other Collateral and other proceeds,
including cash, of Collateral in trust for Lender and immediately deliver said payments to Lender's designated bank account, in their
original form as received from the Account debtor or other obligor, together with any necessary endorsements. In the event that: (a)
any payment on any Account is inadvertently collected or received by Borrower through no fault or interference by Borrower and not delivered
in kind to Lender within one (1) business day of receipt thereof, (b) Borrower interferes with, hinders, or delays any payment with respect
to any Account, or (c) any payment on any Account is collected or received directly by Borrower from an Account debtor (unless permitted
by this Agreement) as a result of Borrower's intentional interference with direct payment thereof to the Lender {each of the foregoing,
a Misdirected Pavment); then Borrower shall pay to Lender a misdirected payment fee for each Misdirected Payment in an
amount equal to the greater of (1) ten percent (10%) of the amount of such Misdirected Payment, or (2) Five Hundred Dollars ($500.00)
(the Misdirected Payment Fee). Lender's receipt of such Misdirected Payment Fee in connection with a Misdirected Payment
shall not constitute a waiver of any Event of Default occasioned by such Misdirected Payment.

    	 	8	 

     

    

2.6 
Crediting Payments. The receipt of any item of payment by Lender shall, for the sole purpose of determining availability under the
revolving credit facility provided for herein, subject to final payment of such item, be provisionally applied to reduce Obligations
on the date of receipt of such item by Lender, but the receipt of such an item of payment shall for all other purposes in determining
the Daily Balance, including without limitation for the purpose of calculation of interest on the Obligations and the calculation of
the Administration Fee and Unused Line Fee, not be deemed to have been paid to Lender until three (3) Business Days after the date of
Lender's actual receipt of such item of payment. Notwithstanding anything to the contrary contained herein, payments received by Lender
after 11:00 a.m. Pacific time shall be deemed to have been received by Lender as of the opening of business on the immediately following
Business Day, provided, that Lender in its sole discretion may, from time to time, make exceptions and apply payments received after
such deadline on the same Business Day but with such exceptions not to establish a course of conduct or course of dealing.

2.7 
Facility Fee. In consideration of Lender's entering into this Agreement, Borrower shall pay Lender a facility fee (the Facility
Fee) in an amount equal to (a) two percent (2.00%) of the sum of the Advance Limit plus the original principal balance of
any term loans and Advances other than under the Revolving Credit Facility, fo!', /-p.e yearly period commencing from the initial
Advance hereunder (the Initial Advance) through December 9, 2023, plus (b) one and one-half percent (1.50%) of the sum
of the Advance Limit plus the original principal balance of any term loss and Advances other than under the Revolving Credit
Facility, for the yearly period commencing December 9, 2023 through the initial Termination Date of December 9, 2024, with all such
amounts being fully earned upon the Initial Advance and payable in advance of each year, unless earlier payable pursuant to the
terms hereof. In the event the Termination Date is thereafter extended, on one or more occasions, beyond such initial Termination
Date, Borrower shall pay Lender a Facility Fee for each yearly period of any extension in an amount equal to one and one-half
percent (1.50%) of the sum of Advance Limit (in effect at the time of the extension) plus the then outstanding principal balance of
any term loans and Advances other than under the Revolving Credit Facility, with all such amounts being fully earned upon the
occurrence of any such extension, and payable in advance of each year, unless earlier payable pursuant to the terms
hereof

2.8 
Unused Line Fee. Borrower shall pay Lender a fee (the Unused Line Fee) in an amount equal to Zero percent (0.00%) of
the daily average difference between the Advance Limit and the Daily Balance during each month payable on or before the first (1st)
day of each calendar month for the preceding calendar month, during the Tenn, including the Renewal Term, or so long as the Obligations
are outstanding.

2.9 
Administration Fee. Borrower shall pay Lender a fee (the Administration Fee) in an amount equal to one-tenth of one
percent (.10%) of the daily average outstanding balance of the Advances during each month payable on or before the first (1st) day of
each calendar montli in respect of Lender's services for the preceding calendar month, during the Tenn, including each Renewal Tenn,
or so long as the Obligations are outstanding.

    	 	9	 

     

    

2.10 
Field Examination Fee; Appraisal Fees. Borrower shall pay Lender a fee (the Field Examination Fee) in an amount equal
to One Thousand Dollars {$1,000.00) per day per examiner, plus cmt-of pocket expenses for each examination of Borrower's Books or the
other Collateral performed by Lender or its designee. While any: (a) funds are available to Borrower for borrowing against the value
of Eligible Inventory under Section 2.1; or (b) Advances against the value of Eligible Inventory under Section 2.1 are
outstanding to Lender, Borrower shall pay on demand any fees and expenses incurred in connection with periodic Inventory appraisals and
monitoring required by Lender in sole discretion or, at Lender's option, all of same may be added to the Obligations.

2.11 
Late Reporting Fee. Borrower shall pay to Lender a fee in an amount equal to Fifty Dollars ($50.00) per document per day for each
Business Day any report, financial statement or schedule required by this Agreement to be delivered to Lender is past due.

2.12 
Monthly Statements. Lender may render monthly or other periodic statements to Borrower or provide other information to Borrower from
time to time, whether in writing or through Lender's website, including statements or other information concerning all Obligations, all
principal, interest and Lender Expenses, and Borrower shall have fully and irrevocably waived all objections to such statements (and
the contents thereof) and other information unless, within thirty (30) days after receipt or the posting of same on Lender's website,
as applicable, Borrower shall deliver to Lender, by registered, certified or overnight mail as set forth in Section 12 hereof,
written objection to such statement or other information specifying the error or errors, if any, contained therein.

2.13
Intentionally Omitted.

 

3.
TERM

 

3.1 
Term and Renewal Date. This Agreement shall become effective upon the Initial Advance and continue in full force through the Initial
Term and from year to year thereafter (a Renewal Term) for a one (I) year term from the then Termination Date, provided
that neither Borrower nor Lender has exercised its termination right in accordance with this Section 3.1. Borrower and Lender
may terminate the Term on the then Termination Date by giving the other at least sixty (60) days prior written notice pursuant to the
notice provisions of Section 12 hereof. In addition, Lender shall have the right to terminate this Agreement: (a) at any time
in its sole discretion (including in the absence of an Event of Default) upon sixty (60) days prior written notice; and (b) immediately
at any time upon the occurrence of an Event of Default. No such termination shall relieve or discharge Borrower of its duties, Obligations
and covenants hereunder until all Obligations have been paid and performed in full, and Lender's continuing security interest in the
Collateral shall remain in effect until the Obligations have been fully and irrevocably paid and satisfied in cash or cash equivalent.
On the Termination Date of this Agreement, the Obligations shall be immediately due and payable in full. Expressly in addition to all
rights and remedies available to Lender, if the term of this Agreement is not renewed and the Obligations are not paid in full by the
Termination Date, then Borrower shall also pay to Lender, as part of the Obligations, a fee of one and one-half percent (1.50%) of the
Advance Limit plus the then outstanding principal balance of any term loans and Advances other than under the Revolving Credit Facility
provided for in Section 2.1 hereof

3.2 
Early Termination Fee. If the Term is terminated by Lender upon the occurrence of an Event of Default, or is terminated by Borrower
except as provided in Section 3.1, in view of the impracticability and extreme difficulty of ascertaining actual damages and by
mutual agreement of the parties as to a reasonable calculation of Lender's lost profits as a result thereof, Borrower shall pay Lender
upon the effective date of such termination a fee in an amount equal to: the Monthly Minimum Interest times the number of months remaining
until the stated Termination Date of the then applicable Term, provided, that any such termination fee shall be waived if Borrower qualifies
for and obtains conventional bank financing with Pinnacle Bank to replace the facility hereunder. Such fee shall be presumed to be the
amount of damages sustained by Lender as the result of an early termination and Borrower acknowledges that it is reasonable under the
circumstances currently existing. The fee provided for in this Section 3.2 shall be deemed included in the Obligations.

    	 	10	 

     

    

4.
CREATION OF CONTINUING SECURITY INTEREST

 

4.1 
Grant of Continuing Security Interest. Borrower hereby grants to Lender a continuing security interest in all presently existing
and hereafter acquired or arising Collateral in order to secure prompt repayment of the Obligations and in order to secure prompt performance
by Borrower of each and all of its covenants and Obligations under the Loan Documents and otherwise. Lender's continuing security interest
in the Collateral shall attach to all Collateral without further act on the part of Lender or Borrower.

4.2 
Negotiable Collateral. In the event that any Collateral, including proceeds, is evidenced by or consists of Negotiable Collateral,
Borrower shall notify Lender and upon the request of Lender, immediately endorse and assign such Negotiable Collateral to Lender and
deliver physical possession of such Negotiable Collateral to Lender.

4.3 
Delivery of Additional Documentation Required. Borrower shall execute and deliver to Lender concurrently with Borrower's execution
and delivery of this Agreement and at any time thereafter at the request of Lender, all financing statements, continuation financing
statements, fixture filings, security agreements, chattel mortgages, pledges, assignments, endorsements of certificates of title, applications
for title, affidavits, reports, notices, schedules of accounts, letters of authority, and all other documents that Lender may request,
in form satisfactory to Lender, to perfect and maintain perfected Lender's continuing security interests in the Collateral and in order
to fully consummate all of the transactions contemplated under the Loan Documents and Borrower hereby authorizes Lender to file and/or
record such financing statements and other documents as Lender deems necessary to perfect and maintain Lender's continuing security interest
in the Collateral, and agrees any such financing statement may contain an "all asset" or "all property'' description of
the Collateral, and Borrower hereby ratifies any such financing statement or other document heretofore filed by Lender.

4.4 
Power of Attorney. Borrower hereby irrevocably makes, constitutes and appoints Lender (and any person designated by Lender) as Borrower's
true and lawful attorney-in-fact with power to sign the name of Borrower on any of the above-described documents or on any other similar
documents to be executed, recorded or filed in order to perfect or continue perfected Lender's continuing security interest in the Collateral.
In addition, Borrower hereby appoints Lender (and any person designated by Lender) as Borrower's attorney-in-fact with power to: (a)
sign Borrower's name on verifications of Accounts and other Collateral, and on notices to Account debtors; (b) send requests for verification
of Accounts and other Collateral; (c) endorse Borrower's name on any checks, notes, acceptances, money orders, drafts or other forms
of payment or security that may come into Lender's possession; (d) notify the post office authorities to change the address for delivery
of Borrower's mail to an address designated by Lender, to receive and open all mail addressed to Borrower, and to retain all mail relating
to the Collateral and forward all other mail to Borrower; (e) make, settle and adjust all claims under Borrower's policies of insurance,
endorse the name of Borrower on any check, draft, instrument or other item of payment for the proceeds of such policies of insurance
and make all determinations and decisions with respect to such policies of insurance. The appointment of Lender as Borrower's attorney-in-fact
and each and every one of Lender's rights and powers, being coupled with an interest, is irrevocable so long as any Accounts in which
Lender has a continuing security interest remain unpaid and until all of the Obligations have been fully repaid and performed.

4.5 
Right To Inspect. At Borrower's expense (including, without limitation, reimbursement of travel expenses), Lender or Lender's designee
shall have the right at any time or times hereafter during Borrower's usual business hours, or during the usual business hours of any
third-party having control over Borrower's Books, to inspect Borrower's Books in order to verify the amount or condition of, or any other
matter relating to, the Collateral or Borrower's financial condition. At Borrower's expense (including, without limitation, reimbursement
of travel expenses), Lender or Lender's designee, also shall have the right at any time or times hereafter during Borrower's usual business
hours to inspect, examine and appraise the Inventory, the Equipment and other Collateral and to check and test the same as to quality,
quantity, value and condition. At Lender's option, all of the above expenses shall be reimbursed by Borrower to Lender on demand or such
expenses may be added to the Obligations.

    	 	11	 

     

    

5.
REPRESENTATIONS AND WARRANTIES 

Borrower
represents, warrants and covenants to Lender the following (and acknowledges and agrees that such representations, warranties and covenants
shall be automatically deemed repeated and reaffirmed with each Advance and shall be conclusively presumed to have been relied on by
Lender regardless of any investigation made, or information possessed by Lender):

5.1 
No Prior Encumbrances; Security Interests. Borrower has good and marketable title to the Collateral, free and clear of liens, claims,
security interests or encumbrances, except for the security interests to be satisfied from the proceeds of the first Advances hereunder,
the continuing security interests granted to Lender by Borrower, and those disclosed on Schedule 5.1 annexed hereto. Other than
those expressly permitted by this Agreement, Borrower will not create or permit to be created any security interest, lien, pledge, mortgage
or encumbrance on any Collateral or any of its other assets.

5.2 
Bona Fide Accounts; Eligible Accounts. All Accounts represent bona fide sales or leases of goods and/or services for which Borrower
has an unconditional right to payment and as to which the goods have been delivered to the customer and/or the services rendered, as
applicable. None of the Accounts are subject to any rights of offset, counterclaim, cancellation or contractual rights of return. All
Accounts reported to Lender as Eligible Accounts shall conform to the requirements of Eligible Accounts.

5.3 
Merchantable Inventory; Eligible Inventory. All Inventory is now and at aU times hereafter shaU be of good and merchantable quality,
free from defects. All Inventory reported to Lender as Eligible Inventory shaU confonn to the requirements of Eligible Inventory.

5.4 
Location of Inventory, Equipment and Collateral. The Inventory and Equipment is not now and shall not at any time or times hereafter
be stored with a bailee, warehouseman, processor, or similar party. Borrower shaU keep the Inventory and Equipment only at its address
set forth on the first page hereof and at the following locations: (Corporate Headquarters) 150 N. MacQuesten Pkwy, St. Vernon,
NY 10550; (Main Dist. Warehouse), 3625 Kennesaw N. Ind Pkwy, Kennesaw, GA 30144; (Overflow Warehouse) 3240 Heritage Drive, Suite A, Kennesaw,
GA 30144; (3PL Fulfillment Facility) 596 E. Andrew Way, Ogden, UT 84404; (Scanfil Contract Manufacturer) 4345 Hamilton Mill Rd.,
Suite 400, Buford, GA 30518; (Gator Stamping-Contract Manufacturer) 6610 33rd Street E, Sarasota, FL 32243; (Realogistics - Third Party
Warehouse) 84-92 Chai Wan Kok St., Tsuen Wan, Hong Kong. If Inventory, Equipment or other CoUateral is located at a leased premises,
public or private warehouse, with a bailee or other third party, Borrower shaU cause the applicable landlord, mortgagee, warehouseman,
bailee or third party to provide Lender with a waiver agreement, in form and substance acceptable to Lender.

5.5 
Inventory Records. Borrower now keeps and hereafter at all times shaU keep correct and accurate records itemizing and describing
the kind, type, quality and quantity of the Inventory and Borrower's cost of said items and none of Borrower's Inventory contains any
labels, trademarks, tradenames or other identifying characteristics which are the properties of third parties.

5.6 
Retail Accounts. No Accounts arise from the sale of goods or rendition of services for personal, family or household purposes.

5.7 
Relocation of Chief Executive Office and Other Locations. The chief executive office of Borrower and the location of all books and
records of Borrower relating to the Collateral is at the address indicated on the first page of this Agreement, and Borrower's other
locations are as set forth in Section 5.4, and Borrower will not, without thirty (30) days' prior written notice to Lender and
compliance with Section 4.3 hereof, relocate such office or other locations.

5.8 
Due Incorporation and Qualification. Borrower is, and shall at aU times hereafter, be a corporation or limited liability company,
as applicable, duly organized and existing under the laws of the state of its formation as set forth on the first page hereof, and is
qualified and licensed to do business and is in good standing in any state in which the conduct of its business or its ownership of assets
requires that it be so qualified.

    	 	12	 

     

    

 

5.9 
Actual and Fictitious Name. Borrower's exact name is set forth on the first page hereof, and Borrower has not changed its name within
the last five (5) years. Borrower is conducting its business under the

following
trade or fictitious name(s) and no others: [ ). Borrower has complied with the fictitious name laws of

all jurisdictions
in which compliance is required in connection with its use of such name(s).

5.10 
Permits and Licenses. Borrower holds all licenses, permits, franchises, approvals and consents required for the conduct of its business
and the ownership and operation of its assets.

5.11 
Due Authorization; Enforceability. Borrower has the right and power and is duly authorized to enter into the Loan Documents to which
it is a party; all necessary action to authorize the execution and delivery of the Loan Documents has been properly taken; and Borrower
is and will continue to be duly authorized to borrow under this Agreement and to perform all of the other terms and provisions of the
Loan Documents throughout the Term. The Loan Documents, when executed and delivered by Borrower, will constitute the legal, valid and
binding obligations of Borrower enforceable in accordance with their terms.

5.12 
Compliance with Articles; Organizational Documents. The execution by Borrower of the Loan Documents to which it is a party and the
performance of the terms thereof do not constitute a breach of any provision contained in Borrower's Certificate or Articles of Incorporation,
Formation or Organization (or similar incorporation document), as applicable or its Bylaws, Operating Agreement, Partnership Agreement
(or similar organizational document), as applicable, nor does it constitute an event of default under any material agreement to which
Borrower is now or may hereafter become a party.

5.13 
Litigation. Except as set forth in Schedule 5.13, there are no actions, proceedings or claims pending by or against Borrower,
whether or not before any court or administrative agency and Borrower has no knowledge or notice of any pending, threatened or imminent
litigation, governmental investigations, or claims, complaints, actions, or prosecutions involving Borrower, except for ongoing collection
matters in which Borrower is the plaintiff. If any such actions, proceedings or claims presently exist or arise during the Term, Borrower
shall promptly notify Lender in writing and shall, from time to time, notify Lender of all materials events relating thereto.

5.14 
Accuracy of Information and No Material Adverse Change in Financial Statements. All infonnation furnished by Borrower to Lender and
all statements made by Borrower to Lender, including, without limitation, information set forth in a loan application, is true, accurate
and complete in all respects and does not contain any misstatement of fact or omit to state any facts necessary to make the statements
or information contained therein not misleading. All financial statements relating to Borrower which have been or may hereafter be delivered
to Lender (i) have been prepared in accordance with GAAP; (ii) fairly present Borrower's financial condition as of the date thereof and
Borrower's results of operations for the period then ended; and (iii) disclose all contingent obligations of Borrower. In addition. no
material adverse change in the financial condition of Borrower has occurred since the date of the most recent of such financial statements.

5.15 
Solvency. Borrower is now, and shall be at all times through the Term, solvent and able to pay its debts (including trade debts)
as they mature.

5.16 
ERISA. Neither Borrower or any ERISA Affiliate, nor any Plan is or has been in violation of any of the provisions of ERISA, any of
the qualification requirements ofIRC Section 401(a), or any of the published interpretations thereof. No lien upon the assets of Borrower
has arisen with respect to any Plan. No prohibited transaction within the meaning ofERISA Section 406 or IRC Section 4975(c) has
occurred with respect to any Plan. Neither Borrower nor any BRISA Affiliate has incurred any withdrawal liability with respect to any
Multiemployer Plan. Borrower and each BRISA Affiliate have made all contributions required to be made by them to any Plan or Multiemployer
Plan when due. There is no accumulated funding deficiency in any Plan, whether or not waived.

5.17 
Environmental Laws and Hazardous Materials. Borrower has complied, and at all times through the Tenn will comply, with all Environmental
Laws. Borrower has not and will not cause or permit any Hazardous Materials to be located, incorporated, generated, stored, manufactured,
transported to or from, released, disposed of, or used at, upon, under, or within any premises at which Borrower conducts its business,
or in connection with Borrower's business. To the best of Borrower's knowledge, no prior owner or operator of any premises at which Borrower
conducts its business has caused or permitted any of the above to occur at, upon, under, or within any of the premises. Borrower will
not permit any lien to be filed against the Collateral or any part thereof under any Environmental Law, and will promptly notify Lender
of any proceeding, inquiry or claim relating to any alleged violation of any Environmental Law, or any alleged loss, damage or injury
resulting from any Hazardous Material. Lender shall have the right to join and participate in, as a party if it so elects, any legal
or administrative proceeding initiated with respect to any Hazardous Material or in connection with any Environmental Law. Hazardous
Material includes without limitation any substance, material, emission, or waste which is or hereafter becomes regulated or classified
as a hazardous substance, hazardous material, toxic substance or solid waste under any Environmental Law, asbestos, petroleum products,
urea formaldehyde, polychlorinated biphenyls (PCBs), radon, and any other hazardous or toxic substance, material, emission or waste.
Environmental Law means the Comprehensive Environmental Response, Compensation, and Liability Act of 1980, as amended, the Resource Conservation
and Recovery Act of 1976, the Hazardous Materials Transportation Act, the Toxic Substances Control Act, the regulations pertaining to
such statutes, and any other safety, health or environmental statutes, laws, regulations or ordinances of the United States or of any
state, county or municipality in which Borrower conducts its business or the Collateral is located.

    	 	13	 

     

    

5.18 
Tax Compliance. Borrower has filed all tax returns required to be filed by it and has paid all taxes due and payable on said returns
and on any assessment made against it or its assets.

5.19 
Reliance by Lender; Cumulative. Each warranty, representation and agreement contained in this Agreement shall be automatically deemed
repeated by Borrower with each request for an Advance and shall be conclusively presumed to have been relied on by Lender regardless
of any investigation made or information possessed by Lender. The warranties, representations and agreements set forth herein shall be
cumulative and in addition to any and all other warranties, representations and agreements which Borrower shall now or hereafter give,
or cause to be given, to Lender.

5.20 
Use of Proceeds. The proceeds of the initial Advance will be used by Borrower for the purposes set forth on Schedule 5.20
annexed hereto.

5.21 
Motor Vehicles and Intellectual Property. Borrower has informed Lender of all motor vehicles, patents, patent applications, copyrights,
trademarks, tradenames and other intellectual property, registered or unregistered, owned by Borrower. Borrower will promptly notify
Lender of all motor vehicles or intellectual property hereafter owned by Borrower, and the status of all patent and trademark applications
and the issuance of patents and trademarks, and all copyrights registrations, and in accordance with Section 4.3, will cooperate
with Lender in taking all actions required by Lender to have a perfected security interest or lien on such motor vehicles and intellectual
property.

5.22 
Commercial Tort Claims. Borrower does not, as of the date hereof, have any Commercial Tort Claims against any third parties. If Borrower
does hereafter have any such Commercial Tort Claims, Borrower shall furnish Lender with prompt written notice thereof, and in accordance
with Article 4 hereof, shall execute and deliver such supplemental documents and cooperate with Lender in taking all action as
required by Lender to have a perfected security interest or lien on such Commercial Tort Claims.

6.
AFFIRMATIVE COVENANTS

 

Borrower
covenants and acknowledges that during the Term Borrower shall comply with all of the following:

6.1 
Collateral and Other Reports. Borrower shall on each Business Day report to Lender all sales and Accounts arising since its most
recent report to Lender and shall provide copies of all invoices, together with supporting shipping documentation acceptable to Lender.
Borrower shall also cause Lender to be provided with ongoing access to any Account debtor accounts payable web portals, as required by
Lender, but if such access is not possible, Borrower will provide screenshots from any Account debtor portals, as requested by Lender.
Borrower shall execute and deliver to Lender, no later than the tenth (10th) day of each month during the Term, a detailed aging of the
Accounts, a reconciliation statement and a summary aging, by vendor, of all accounts payable of Borrower and any book overdraft. Borrower
shall deliver to Lender, as Lender may from time to time require, collection reports, sales journals, invoices, original delivery receipts,
customers' purchase orders, shipping instructions, bills of lading and other docwnentation respecting shipment arrangements. Absent such
a request by Lender, copies of all such documentation shall be held by Borrower as custodian for Lender. Borrower shall provide Lender
with immediate notice of any pending or threatened litigation, governmental investigations, claims, complaints or prosecutions involving
Borrower or any Guarantor. Promptly upon Lender's request, Borrower shall provide Lender with copies of Borrower's statements relating
to its bank, brokerage or similar accounts.

    	 	14	 

     

    

6.2 
Returns. Returns and allowances, if any, as between Borrower and any Account debtors, shall be permitted on the same basis and in
accordance with the usual customary practices of Borrower as they exist at the date of the execution and delivery of this Agreement.
If at any time prior to the occurrence of an Event of Default any Account debtor returns any Inventory to Borrower or rejects or seeks
an allowance as to services rendered, Borrower shall promptly determine the reason for such return, rejection or request for allowance
and, if Borrower accepts such return, rejection or allowance, issue a credit memorandum (with a copy to be sent to Lender) in the appropriate
amount to such Account debtor. Borrower shall promptly notify Lender of all returns and recoveries, rejections, allowances, and of all
disputes and claims.

6.3 
Designation of Inventory. Borrower shall contemporaneously with the execution hereof and from time to time hereafter, but not less
frequently than monthly by the I 0th day of each month, execute and deliver to Lender a designation of Inventory specifying
the cost and the wholesale market value of Borrower's raw materials, work in process and finished goods, and further specifying such
other information as Lender may reasonably request. Borrower shall promptly, in writing, notify Lender if any of Borrower's Inventory
contains any labels, trademarks, tradenames or other identifying characteristics which are the properties of third parties.

6.4 
Financial Statements, Reports, Certificates. Borrower shall deliver to Lender: (a) as soon as available, but in any event within
thirty (30) days after the end of each of Borrower's fiscal month-ending periods during the Term, a balance sheet and profit and loss
statement prepared by Borrower covering Borrower's operations during such period; and (b) as soon as available, but in any event within
the earlier of (i) ninety (90) days after the end of each of Borrower's fiscal years, or (ii) any filing deadline imposed by the Securities
and Exchange Commission, financial statements of Borrower for each such fiscal period, audited by independent certified public accountants
acceptable to Lender. Such financial statements shall include a balance sheet and profit and loss statement, and the accountants' management
letter, if any, and shall be prepared in accordance with GAAP. Together with the above, Borrower shall also deliver Borrower's Form 10-Qs,
10-Ks or 8-Ks, if any, as soon as the same become available, and any other report reasonably requested by Lender relating to the Collateral
and the financial condition of Borrower and a certificate signed by its chief financial officer to the effect that all reports, statements
or computer prepared information of any kind or nature delivered or caused to be delivered to Lender under this Section 6.4 fairly
present its financial condition and that there exists on the date of delivery of such certificate to Lender no condition or event which
constitutes an Event of Default. Borrower will also furnish to Lender by no later than ninety (90) days in advance of each fiscal year,
Borrower's fiscal year projections on a monthly basis of the balance sheet, profit and loss, cash flow and borrowing availability for
the upcoming fiscal year, with such projections to be in form and detail satisfactory to Lender.

6.5 
Tax Returns, Receipts. Borrower shall deliver to Lender copies of each of its future federal income tax returns, and any amendments
thereto as soon as same are available and in any event within thirty

(30) days
after same are required to be filed by law. Borrower further shall promptly deliver to Lender, upon request, satisfactory evidence of
Borrower's payment of all withholding and other taxes required to be paid by it.

6.6 
Guarantor Reports. Borrower agrees to cause each Guarantor to deliver: (a) its annual financial statements upon the earlier to occur
of (i) delivery of copies of its federal income tax returns as required below, or (ii) one year from the date of delivery of its prior
financial statements to Lender; and (b) and copies of all federal income tax returns as soon as the same are available and in any event
no later than thirty (30) days after the same are required to be filed by law.

6.7 
Title to Equipment. Upon Lender's request, Borrower shall immediately deliver to Lender, properly endorsed, any and all evidences
of ownership of, certificates of title, or applications for title to any items of Equipment.

    	 	15	 

     

    

6.8 
Maintenance of Equipment. Borrower shall keep and maintain the Equipment in good operating condition and repair, and shall make all
necessary replacements thereto so that its value and operating efficiency shall at all times be maintained and preserved. Borrower shall
not permit any item of Equipment to become a fixture to real estate or an accession to other property, and the Equipment is now and shall
at all times remain Borrower's personal property.

6.9 
Taxes. All Federal, state and local assessments and taxes, whether real, personal or otherwise, due or payable by, or imposed, levied
or assessed against Borrower or any of its assets or in connection with Borrower's business shall hereafter be paid in full, before they
become delinquent or before the expiration of any extension period. Borrower shall make due and timely payment or deposit of all federal,
state and local taxes, assessments or contributions required of it by law, and will execute and deliver to Lender, on demand, appropriate
certificates attesting to the payment or deposit thereof.

6.10 
Insurance. Borrower, at its expense, shall keep and maintain insurance to protect the Collateral against all risk of loss covered
under a Special property form (If any of the tangible Collateral is located in a flood zone, Borrower must also have flood insurance.
Borrowers with Collateral in California must also insure against the peril of earthquakes.) The coverage shall be written on a replacement
cost basis. The property limit(s) shall be no less than those necessary to satisfy the coinsurance requirement contained in the insurance
policy. The Borrower, at its expense, shall keep and maintain Business Income Coverage. The Business Income Coverage shall insure against
loss covered under a Special policy form. The limit must contemplate a benefit period of no less than twelve months and meet the minimum
limit needed to satisfy the coinsurance requirement contained in the policy. The Business Income coverage can be written on an agreed
amount basis, or with a coinsurance percentage from 80% to 100%. All policies of insurance covering business personal property and business
income shall contain a Lender's Loss Payable endorsement in a form satisfactory to Lender. All policies insuring real property on which
Lender has a mortgage or other lien shall contain a Mortgagee endorsement in form satisfactory to Lender. Either, or both, form(s) shall
contain a waiver of warranties. All proceeds payable under such policies shall be payable to Lender and applied to the Obligations. Borrower
shall cause to be delivered to Lender a properly executed Evidence of Property Insurance form along with a copy of the Lender's Loss
Payable and/or Mortgagee endorsement(s) as applicable, in advance of the loan closing date and thereafter at least thirty (30) days prior
to the expiration date(s) of the policy(ies). All Mortgagee and Lender's Loss Payable endorsements shall contain the following address
for notification purposes, or such other address as Lender may, from time to time, notify Borrower:

Pinnacle
Bank

18181
Butterfield Blvd, Ste. 135

Morgan
Hill, CA 95037

Attn:
Kevin O'Hare

 

Borrower,
at its expense, shall keep and maintain Commercial General Liability Coverage insuring against all risks relating to or arising from
Borrower's ownership and use of the Collateral and its other assets, its products, and its operations. Lender, its directors, officers
and employees shall be named as additional insureds for Commercial General Liability on Borrower's policy. Borrower shall cause to be
delivered to Lender a properly executed Certificate of Insurance, containing the required additional insured wording, before the loan
closing and thereafter at least thirty (30) days prior the expiration date of the policy. Along with the Certificate of Insurance, Borrower
shall also deliver a copy of the General Liability endorsement whereby Lender, et. al., are added to the policy as additional insureds.

All
required policies shall be in such form, with such companies and in such amounts as may be satisfactory to Lender. All policies shall
contain a 30-day notice for cancellation or non-renewal. Lender reserves the right to change insurance specifications at any time.

6.11 
Lender Expenses. Borrower shall immediately and without demand reimburse Lender for all Lender Expenses and Borrower hereby authorizes
the payment of such Lender Expenses.

6.12 
Compliance With Law. Borrower shall comply, in all material respects, with the requirements of all applicable laws, rules, regulations
and orders of governmental authorities relating to Borrower and the conduct of its business.

    	 	16	 

     

    

6.13 
Accounting System. Borrower at all times hereafter shall maintain a standard and modern system of accounting in accordance with GAAP
with ledger and account cards or computer tapes,,disks, printouts and records pertaining to the Collateral containing such information
as may from time to time be requested by Lender.

6.14 
Minimum Available Cash. As determined as of the end of each calendar month, Borrower shall maintain minimum available cash of One
Million Dollars ($1,000,000.00) (the "Cash Requirement"). Within ten (10) days of the end of each calendar month, Borrower
shall provide satisfactory evidence to Lender that it has fulfilled the Cash Requirement together with providing satisfactory
evidence of equity, sub-debt or other capital availability to fulfill the Cash Requirement in the future. In the event Borrower's available
cash is below the Cash Requirement as of the end of a calendar month, Borrower agrees that it will draw upon its ATM/Shelf equity funds,
sub-debt or other capital sources within fifteen (15) days of the end of such calendar month to fulfill the Cash Requirement and shall
provide satisfactory evidence of same to Lender. For avoidance of doubt, Borrower acknowledges and agrees that the proceeds of Advances
hereunder shall not be used to satisfy the Cash Requirement.

7.
NEGATIVE COVENANTS

 

Borrower
covenants and acknowledges that during the Term Borrower shall not undertake any of the following:

7.1 
Extraordinary Transactions and Disposal of Assets. Enter into any transaction not in the ordinary and usual course of its business
as conducted on the date hereof, including but not limited to the sale, lease, disposal, movement, relocation or transfer, whether by
sale or otherwise, of any of its assets other than sales of Inventory in the ordinary and usual course of its business as presently conducted;
incur any indebtedness for borrowed money in excess of Ten Thousand Dollars ($10,000.00) for any individual transaction or where the
aggregate amount of such transactions in any fiscal year exceeds Twenty-Five Thousand Dollars ($25,000.00), or other indebtedness outside
the ordinary and usual course of its business as conducted on the date hereof, except for renewals or extensions of existing debts permitted
by Lender; make any advance or loan to any third party; or grant a lien on any of its assets except (a) in favor of Lender, or (b) the
continuing security interests, if any, set forth on Schedule 5.1.

7.2 
Change Name, etc. Change its name, business structure, jurisdiction of incorporation or formation as applicable, or identity, or
add any new fictitious name.

7.3
Merge, Acquire. Merge, acquire, or consolidate with or into any other business organization.

 

7.4 
Guaranty. Guaranty or otherwise become in any way liable with respect to the obligations of any third party, except by endorsement
of instruments or items of payment for deposit to the account of Borrower for negotiation and delivery to Lender.

7.5
Restructure. Make any change in its financial structure or business operations.

 

7.6
Prepayments. Prepay any existing indebtedness owing to any third party other than trade payables.

 

7.7 
Change of Ownership. Cause, permit or suffer any change, direct or indirect, in the ownership of the capital stock of Borrower that
gives another person or entity that is not a party to this Agreement voting control over the management or affairs of Borrower, or enter
into any agreement with any person or entity that provides for a payment to such person or entity based upon the income of Borrower.

7.8
Intentionally Omitted.

    	 	17	 

     

    

 

7.9 
Loans and Advances. Make any loans, advances or extensions of credit to any officer, director, executive employee or shareholder
of Borrower (or any relative of any of the foregoing), or to any, entity which is a subsidiary of, related to, affiliated with or has
common shareholders, officers or directors with Borrower.

7.10 
Capital Expenditures. Make any plant or fixed capital expenditure, or any commitment therefor, or purchase or lease any real or personal
assets or replacement Equipment in excess of Ten Thousand Dollars ($10,000.00) for any individual transaction or where the aggregate
amount of such transactions in any fiscal year exceeds Twenty-Five Thousand Dollars ($25,000.00).

7.11 
Consignments of Inventory. Consign any Inventory to any third party or obtain any Inventory on a consignment basis from any third
party.

7.12 
Distributions. · Make any distribution or declare or pay any dividends (in cash or in stock) on, or purchase, acquire, redeem
or retire, any of its capital stock, of any class, whether now or hereafter outstanding.

7.13 
Accounting Methods. Modify or change its method of accounting or enter into, modify or terminate any agreement presently existing
or at any time hereafter entered into with any third party for the preparation or storage of Borrower's records of Accounts and financial
condition without said party agreeing to provide Lender with information regarding the Collateral or Borrower's financial condition.
Borrower waives the right to assert a confidential relationship, if any, it may have with any such third party in connection with any
information requested by Lender hereunder, and agrees that Lender may contact any such party directly in order to obtain such information.

7.14
Business Suspension. Suspend or go out of business.

 

8.
EVENTS OF DEFAULT

 

The occurrence
of any one or more of the following events shall constitute an Event of Default by Borrower hereunder:

8.1 
Failure to Pay. Borrower's failure to pay when due and payable, or when declared due and payable, any portion of the Obligations
(whether principal, interest, taxes, Lender Expenses, or otherwise);

8.2 
Failure to Perform. Borrower's or a Guarantor's failure to perform, keep or observe any term, provision, condition, representation,
warranty, covenant or agreement contained in this Agreement, in any of the Loan Documents or in any other present or future agreement
between Borrower, and/or a Guarantor and Lender;

8.3 
Misrepresentation. Any misstatement or misrepresentation now or hereafter exists in any warranty, representation, statement, aging
or report made to Lender by, Borrower and/or a Guarantor or any officer, employee, agent or director thereof, or if any such warranty,
representation, statement, aging or report is withdrawn by such person;

8.4 
Material Adverse Change. There is a material adverse change in Borrower's, or a Guarantor's, business or financial condition;

8.5 
Material Impairment. There is a material impairment of the prospect of repayment of the Obligations or a material impairment of Lender's
continuing security interests in the Collateral;

8.6 
Levy or Attachment. Any material portion of Borrower's assets is attached, seized, subjected to a writ or distress warrant or is
levied upon, or comes into the possession of any judicial officer or assignee;

8.7 
Insolvency by Borrower or Guarantor. An Insolvency Proceeding is commenced by Borrower or by any Guarantor;

    	 	18	 

     

    

8.8 
Insolvency Against Borrower or Guarantor. An Insolvency Proceeding is commenced against Borrower or any Guarantor;

8.9 
Injunction Against Borrower. Borrower is enjoined, restrained or in any way prevented by court order from continuing to conduct all
or any material part of its business;

8.10 
Government Lien. A notice of lien, levy or assessment is filed of record with respect to any of Borrower's or a Guarantor's assets
by the United States Government, or any department, agency or instrumentality thereof, or by any state, county, municipal or other governmental
agency, or any taxes or debts owing at any time hereafter to any one or more of such entities becomes a lien, whether choate or otherwise,
upon any of Borrower's or a Guarantor's assets and the same is not paid on the payment date thereof;

8.11
Judgment. A judgment is entered against Borrower or a Guarantor;

 

8.12 
Default to Third Party. There is a default in any material agreement to which Borrower or a Guarantor is a party or by which binds
Borrower or a Guarantor or any of their assets;

8.13 
Subordinated Debt. (a) Borrower or any Subordinating Creditor (i) fails to perform or observe any of such Subordinating Creditor's
obligations under any Subordination Agreement; or (ii) notifies Lender of Subordinating Creditor's intention to rescind, modify, terminate
or revoke any Subordination Agreement; (b) the occurrence of a default or event of default under any subordinated indebtedness; (c) any
Subordination Agreement ceases to be in full force and effect for any reason whatsoever; or (d) Borrower makes any payment on account
of indebtedness which has now or hereafter been subordinated to the Obligations, except to the extent such payment is allowed under any
subordination agreement entered into with Lender;

8.14
Termination of Guarantor. A Guarantor dies or terminates its guaranty;

 

8.15 
Change in Management. If Max Munn cease(s) to be actively engaged in the management of Borrower;

8.16 
ERISA Violation. A prohibited transaction within the meaning of ERISA Section 406 or IRC Section 1975(c) shall occur with
respect to a Plan which could have a material adverse effect on the financial condition of Borrower; any lien upon the assets of Borrower
in connection with any Plan shall arise; Borrower or any ERISA Affiliate shall completely or partially withdraw from a Multiemployer
Plan and such withdrawal could, in the opinion of Lender, have a material adverse effect on the financial condition of Borrower. Borrower
or any of its ERISA Affiliates shall fail to make full payment when due of all amounts which Borrower or any of its ERISA Affiliates
may be required to pay to any Plan or any Multiemployer Plan as one or more contributions thereto; Borrower or any of its ERISA Affiliates
creates or permits the creation of any accumulated funding deficiency, whether or not waived; the voluntary or involuntary termination
of any Plan which termination could, in the opinion of Lender, have a material adverse effect on the financial condition of Borrower
or Borrower shall fail to notify Lender promptly and in any event within ten (10) days of the occurrence of an event which constitutes
an Event of Default under this clause or would constitute an Event of Default upon the exercise of Lender's judgment; or

8.17 
Loss of License, etc. If any license, permit, distributor, franchise or similar agreement, necessary for the continued operation
of Borrower's ordinary course of business is revoked, suspended or terminated.

Notwithstanding
anything contained in this Section 8 to the contrary, Lender shall refrain from exercising its rights and remedies and an Event
of Default shall not be deemed to have occurred by reason of the occurrence of any of the events set forth in Sections 8.6, 8.8, 8.10
or 8.11 hereof if, within ten (IO) days from the date thereof, the same is released, discharged, dismissed, bonded against
or satisfied; provided, however, Lender shall not be obligated to make Advances to Borrower during such period.

    	 	19	 

     

    

9.
LENDER'S RIGHTS AND REMEDIES

 

9.1 
Rights and Remedies. Upon the occurrence of an Event of Default, Lender may, at its election, without notice of such election and
without demand, do any one or more of the following:

(a) 
Declare all Obligations, whether evidenced by the Loan Documents or otherwise, immediately due and payable in full:

(b) 
Cease advancing money or extending credit to or for the benefit of Borrower under the Loan Documents or under any other agreement between
Borrower and Lender;

(c) 
Terminate this Agreement as to any future liability or obligation of Lender, but without affecting Lender's rights and security interest
in the Collateral and without affecting the Obligations;

(d) 
Settle or adjust disputes and claims directly with Account debtors for amounts and upon terms which Lender considers advisable and, in
such cases, Lender will credit the Obligations with the net amounts received by Lender in payment of such disputed Accounts, after deducting
all Lender Expenses;

(e) 
Cause Borrower to hold all returned Inventory in trust for Lender, segregate all returned Inventory from all other property of Borrower
or in Borrower's possession and conspicuously label said returned Inventory as the property of Lender;

(t)
Without notice to or demand upon Borrower or a Guarantor, make such payments and do such acts as Lender considers necessary or reasonable
to protect its security interest in the Collateral. Borrower shall assemble the Collateral if Lender so requires and deliver or make
the Collateral available to Lender at a place designated by Lender. Borrower authorizes Lender to enter any premises where the Collateral
is located, to take and maintain possession of the Collateral, or any part of it, and to pay, purchase, contest or compromise any encwnbrance,
charge or lien which in Lender's determination appears to be prior or superior to its security interest and to pay all expenses incurred
in connection therewith;

(g) 
Ship, reclaim, recover, store, finish, maintain, repair, prepare for sale, lease, license or other disposition, advertise for sale, lease,
license or other disposition, and sell, lease, license or otherwise dispose (in the manner provided for herein or in the Code) the Collateral.
Lender is hereby granted an irrevocable license or other right to use, without charge, Borrower's labels, patents, copyrights, rights
of use of any name, trade secrets, trade names, trademarks, service marks, and advertising matter, or any asset of a similar nature,
pertaining to the Collateral, in completing the production of, advertising for sale, lease, license or other disposition, and sale, lease,
license or other disposition of the Collateral. Borrower's rights under all licenses and all franchise agreements shall inure to Lender's
benefit. With respect to any of Borrower's owned or leased premises, Borrower hereby grants Lender an irrevocable license to enter into
possession of such premises and to occupy the same, without charge, for a period to be determined by Lender in its sole discretion in
order to exercise any of Lender's rights or remedies provided herein or in any of the other Loan Documents, at law, in equity, or otherwise;

(h) 
Sell, lease, license or otherwise dispose of the Collateral at either a public or private proceeding, or both, by way of one or more
contracts or transactions, for cash or on terms, in such manner and at such places (including Borrower's premises) as Lender determines
is commercially reasonable. ft is not necessary that the Collateral be present at any such sale;

(i)
Lender shall give notice of the disposition of the Collateral as follows:

 

(1) 
To Borrower and each holder of a security interest in
the Collateral who has filed with Lender a written request for notice, a notice in writing of the time and place of public sale or other
disposition or, if the sale or other disposition is a private sale or some other disposition other than a public sale is to be made,
then the time on or after which the private sale or other disposition is to be made;

    	 	20	 

     

    

(2) 
The notice hereunder shall be personally delivered or mailed, postage prepaid, to Borrower as provided in Section 12 hereof, at
least ten (10) calendar days before the date fixed for the sale or other disposition, or at least ten (10) calendar days before the date
on or after which the private sale or other disposition is to be made, unless the Collateral is perishable or threatens to decline speedily
in value. Notice to persons other than Borrower claiming an interest in the Collateral shall be sent to such addresses as they have furnished
to Lender;

(j)
Lender may credit bid and purchase at any public sale:

 

(k) 
Any deficiency that exists after disposition of the Collateral, as provided herein, shall be immediately paid by Borrower. Any excess
will be remitted without interest by Lender to the party or parties legally entitled to such excess; and

(I)
In addition to the foregoing, Lender shall have all rights and remedies provided by law (including those set forth in the Code) and any
rights and remedies contained in any Loan Documents and all such rights and remedies shall be cumulative.

9.2 
No Waiver. No delay on the part of Lender in exercising any right, power or privilege under any Loan Document shall operate as a
waiver, nor shall any single or partial exercise of any right, power or privilege under such Loan Documents or otherwise, preclude other
or further exercise of any such right, power or privilege.

10.
TAXES AND EXPENSES REGARDING THE COLLATERAL

 

If
Borrower fails to pay any monies (whether taxes, assessments, insurance premiums or otherwise) due to third persons or entities, or fails
to make any deposits or furnish any required proof of payment or deposit, or fails to perform any of Borrower's other covenants under
any of the Loan Documents, then in its discretion and without prior notice to Borrower, Lender may do any or all of the following: (a)
make any payment which Borrower has failed to pay or any part thereof; (b) set up such reserves in Borrower's loan account as Lender
deems necessary to protect Lender from the exposure created by such failure; (c) obtain and maintain insurance policies of the type described
in Section 6.10 hereof and take any action with respect to such policies as Lender deems prudent; or (d) take any other action
deemed necessary to preserve and protect its interests and rights under the Loan Documents. Any payments made by Lender shall not constitute:
(a) an agreement by Lender to make similar payments in the future or (b) a waiver by Lender of any Event of Default. Lender need not
inquire as to, or contest the validity of, any such expense, tax, security interest, encumbrance or lien and the receipt of notice for
the payment thereof shall be conclusive evidence that the same was validly due and owing.

11.
WAIVERS

 

11.1 
Demand, Protest. Borrower waives demand, protest, notice of protest, notice of default or dishonor, notice of payment and nonpayment,
notice of any default, and notice of nonpayment at maturity and acknowledges that Lender may compromise, settle or release, without notice
to Borrower, any Collateral and/or guaranties at any time held by Lender. Borrower hereby consents to any extensions of time of payment
or partial payment at, before or after the Termination Date.

11.2 
No Marshaling. Borrower, on its own behalf and on behalf of its successors and assigns hereby expressly waives all rights, if any,
to require a marshaling of assets by Lender or to require that Lender first resort to some portion(s) of the Collateral before foreclosing
upon, selling or otherwise realizing on any other portion thereof.

11.3 
Lender's Non-Liability for Inventory or Equipment or for Protection of Rights. So long as Lender complies with its obligations, if
any, under Section 9-207 of the Code, Lender shall not in any way or manner be liable or responsible for: (a) the safekeeping of the
Inventory or Equipment; (b) any loss or damage thereto occurring or arising in any manner or fashion from any cause; (c) any diminution
in the value thereof; or (d) any act or default of any carrier, warehouseman, bailee, forwarding agency or other person whomsoever. All
risk of loss, damage or destruction of the Inventory or Equipment shall be borne by Borrower. Lender shall have no obligation to protect
any rights of Borrower against any person obligated on any Collateral.

    	 	21	 

     

    

11.4 
Limitation of Damages. In any action or other proceeding against Lender under this Agreement or relating to the transactions between
Lender and Borrower, Borrower waives the right to seek any: (a) lost profits or other special or consequential damages; or (b) punitive
damages.

11.5 
Statute of Limitations. To the maximum extent permitted by law, Borrower waives the pleading of any statute of limitations with respect
to any and all actions in connection herewith. To the extent that Borrower may now or in the future have any claim against Lender, arising
out of this agreement or the transaction contemplated herein whether in contract or tort or otherwise, Borrower must assert such claim
within one year of it accruing. Failure to assert such claim by Borrower within one year shall constitute of waiver thereof. Borrower
agrees that such period is reasonable and sufficient for it to investigate and act upon the claim. This Section shall survive any termination
of this agreement.

12.
NOTICES

 

Unless
otherwise provided herein, all consents, waivers, notices or demands by any party relating to the Loan Documents shall be in writing
and (except for financial statements and other informational documents which may be sent by first-class mail, postage prepaid) shall
be telecopied (followed up by a mailing), personally delivered or sent by registered or certified mail, postage prepaid, return receipt
requested, or by receipted overnight delivery service to Borrower or to Lender, as the case may be, at their addresses set forth below

If to Borrower: 

Applied
UV, Inc.

Sterilumen,
Inc.

Munn
Works, LLC

150
N. Macquesten Parkway

Mt.
Vernon, NY 10550

Attn:
Mike Riccio

Fax#

If to Lender: Pinnacle
Bank

1818
Butterfield Blvd, Ste. 135

Morgan
Hill, CA 95037

Attn:
Kevin O'Hare

Fax#
(408) 904-7425

 

Any
party may change the address at which it is to receive notices hereunder by notice in writing in the foregoing manner given to the other.
All notices or demands sent in accordance with this Section 12 shall be deemed received on the earlier of the date of actual receipt
or five (5) calendar days after the deposit thereof in the mail or on the date telecommunicated if telecopied.

13.
DESTRUCTION OF BORROWER'S DOCUMENTS

 

All
documents, schedules, invoices, agings or other papers delivered to Lender may be destroyed or otherwise disposed of by Lender four (4)
months after they are delivered to or received by Lender, unless Borrower requests, in writing, the return of the said documents, schedules,
invoices or other papers (but with Lender entitled to retain a copy for record retention purposes or as otherwise required by law) and
makes arrangements, at Borrower's expense, for their return.

14.
GENERAL PROVISIONS

 

14.1 
Effectiveness. This Agreement shall be binding and deemed effective upon the making of initial Advance hererunder.

    	 	22	 

     

    

14.2 
Successors and Assigns. This Agreement shall bind and inure to the benefit of the respective successors and assigns of each of the
parties; provided, however, that Borrower may not assign this Agreement or any rights hereunder and any prohibited assignment shall be
absolutely void. No consent to an assignment by Lender shall release Borrower from its Obligations. Without notice to or the consent
of Borrower, Lender may assign this Agreement and its rights and duties hereunder and Lender reserves the right to sell, assign, transfer,
negotiate or grant participations in all or any part of, or any interest in Lender's rights and benefits hereunder. In connection therewith,
Lender may disclose all documents and information which Lender now or hereafter may have relating to Borrower or Borrower's business.
Borrower and Lender do not intend any of the benefits of the Loan Documents to inure to any third party, and no third party shall be
a third party beneficiary hereof or thereof.

14.3
Section Headings. Headings and numbers have been set forth herein for convenience only.

 

14.4 
Integration; Interpretation. This Agreement supersedes all other agreements and understandings between the parties hereto, verbal
or written, express or implied, relating to the subject matter hereof. No promises of any kind have been made by Lender or any third
party to induce Borrower to execute this Agreement. No course of dealing, course of performance or trade usage, and no parole evidence
of any nature, shall be used to supplement or modify any terms of this Agreement. Neither this Agreement nor any uncertainty or ambiguity
herein shall be construed or resolved against Lender or Borrower, whether under any rule of construction or otherwise. On the contrary,
this Agreement has been reviewed by each party and shall be construed and interpreted according to the ordinary meaning of the words
used so as to fairly accomplish the purposes and intentions of the parties hereto. The parties waive the provisions of California Civil
Code §1654 or similar provision.

14.5 
Severability of Provisions. Each provision of this Agreement shall be severable from every other provision of this Agreement for
the purpose of determining the legal enforceability of such provision.

14.6 
Amendments in Writing. This Agreement cannot be changed or terminated orally. This Agreement is the entire agreement between the
parties with respect to the matters contained herein. This Agreement supersedes all prior agreements, understandings and negotiations,
if any, all of which are merged into this Agreement.

14.7 
Counterparts. This Agreement may be executed in any number of counterparts each of which, when executed and delivered, shall be deemed
to be an original and all of which, when taken together, shall constitute but one and the same Agreement.

14.8 
Indemnification. Borrower hereby indemnifies, protects, defends and saves harmless Lender and any member, officer, director, official,
agent, employee and attorney of Lender, and their respective heirs, successors and assigns (collectively, the Indemnified Parties),
from and against any and all losses, damages, expenses or liabilities of any kind or nature and from any suits, claims or demands,
including reasonable counsel fees incurred in investigating or defending such claim, suffered by any of them and caused by, relating
to, arising out of, resulting from, or in any way connected with the Loan Documents and the transactions contemplated therein or the
Collateral (unless caused by the gross negligence or willful misconduct of the Indemnified Parties) including, without limitation: (a)
losses, damages, expenses or liabilities sustained by Lender in connection with any environmental cleanup or other remedy required or
mandated by any Environmental Law; (b) any untrue statement of a material fact contained in information submitted to Lender by Borrower
or a Guarantor or the omission of any material fact necessary to be stated therein in order to make such statement not misleading or
incomplete; (c) the failure of Borrower or a Guarantor to perform any obligations required to be performed by Borrower or a Guarantor
under the Loan Documents; and (d) the ownership, construction, occupancy, operations, use and maintenance of any of Borrower's or a Guarantor's
assets. The provisions of this paragraph 14.8 shall survive termination of this Agreement and the other Loan Documents.

14.9 
Joint and Several Obligations; Dealings with Multiple Borrowers. If more than one person or entity is named as Borrower hereunder,
all Obligations, representations, warranties, covenants and indemnities set forth in the Loan Documents to which such person or entity
is a party shall be joint and several.

    	 	23	 

     

    

Lender
shall have the right to deal with any individual of any Borrower with regard to all matters concerning the rights and obligations of
Lender and Borrower hereunder and pursuant to applicable law with regard to the transactions contemplated under the Loan Documents. All
actions or inactions of the officers, managers, members and/or agents of any Borrower with regard to the transactions contemplated under
the Loan Documents shall be deemed with full authority and binding upon all Borrowers hereunder. Each Borrower hereby appoints each other
Borrower as its true and lawful attorney-in-fact, with full right and power, for purposes of exercising all rights of such person hereunder
and under applicable law with regard to the transactions contemplated under the Loan Documents. The foregoing is a material inducement
to the agreement of Lender to enter into this Agreement and to consummate the transactions contemplated hereby. The Borrowers represent
they are operated as part of one consolidated business entity and are directly dependent upon each other for and in connection with their
respective business activities financial resources. Each Borrower will receive a direct economic and financial benefit from the Obligations
incurred under this Agreement and the incurrence of such Obligations is in the best interests of each Borrower.

14.10 
Revival of Obligations. If the incurrence or payment of the Obligations by Borrower or any Guarantor or the transfer by either or
both of such parties to Lender of any property of either or both such parties should for any reason subsequently be declared to be void
or voidable under any state or federal law relating to creditor's rights, including provisions of the United States Bankruptcy Code (11
U.S.C. §101 . as amended, and any successor statute relating to fraudulent conveyances, preferences, and other voidable or recoverable
payments or money or transfers or property (collectively, a Voidable Transfer), and if Lender is required to repay or restore,
in whole or in part, any such Voidable Transfer, or elects to do so upon the reasonable advice of its counsel, then, as to any such Voidable
Transfer or the amount thereof that Lender is required or elects to repay or restore, and as to all reasonable costs, expenses, and attorneys'
fees of Lender related thereto, the liability of Borrower or such Guarantor automatically shall be revived, reinstated, and restored
and shall exist as though such Voidable Transfer had never been made.

14.11 
Setoff. Borrower hereby grants to Lender a lien, security interest and right of setoff as security for all Obligations to Lender
upon and against all deposits, credits, collateral and property, now or hereafter in the possession, custody, safekeeping or control
of Lender, or any entity under the control of Lender, or its parent entity(ies), or in transit to any of them. At any time, without demand
or notice, Lender may set off the same or any part thereof and apply the same to the Obligations of Borrower, even though unmatured and
regardless of the adequacy of any other collateral securing the Obligations. ANY AND ALL RIGHTS TO REQUIRE LENDER TO EXERCISE ITS RIGHTS
OR REMEDIES WITH RESPECT TO ANY OTHER COLLATERAL WHICH SECURES THE OBLIGATIONS, PRIOR TO EXERCISING ITS RIGHTS OF SETOFF WITH RESPECT
TO SUCH DEPOSITS, CREDITS OR OTHER PROPERTY OF THE BORROWER ARE HEREBY KNOWINGLY, VOLUNTARILY AND IRREVOCABLY WAIVED.

14.12
Releases.

 

(A) 
Borrower hereby releases, exculpates, and forever discharges Lender, its officers, employees, agents, affiliates, subsidiaries, holding
companies, designees, attorneys, and accountants (the Lender Parties) of and from any and all claims, demands, damages,
debts, liabilities, accounts, actions and causes of action, of every kind and nature whatsoever (each a Claim, and collectively,
Claims) (including, without limitation, any arising from any acts under this Agreement, in furtherance hereof, and/or based
upon the administration of the credit facilities), whether of omission or commission, whether based upon any error of judgment or mistake
of law or fact, whether now known or unknown, suspected or unsuspected, which Borrower ever had or now has directly or indirectly against
any of the Lender Parties on any contract (express or implied in fact or implied in law), tort, or on any supposed liability, thing or
act, undertaken, done or omitted to be done, at any time prior to the date hereof.

Borrower
acknowledges that it has been infonned and is aware of the provisions of Section l 542 of the Civil Code of the State of California,
and does expressly waive and relinquish all rights and benefits which it has or may have had under said section, which reads as follows:

"A
general release does not extend to claims that the creditor or releasing party does not know or suspect to exist in his or her favor
at the time of executing the release and that, if known by him or her, would have materially affected his or her settlement with the
debtor or released party."

    	 	24	 

     

    

Borrower
acknowledges that it is aware that it may hereafter discover facts different from or in addition to those they now know or believe to
be true with respect to the matters herein released and they agree that this release shall be and remain in effect in all respects as
a complete and general release as to the matters released, notwithstanding any such different or additional facts.

(B) 
In recognition of Lender's right to have all its attorneys' fees and other expenses incurred in connection with this Agreement secured
by the Collateral, notwithstanding payment in full of all Obligations by Borrower, Lender shall not be required to record any terminations
or satisfactions of any of its liens on the Collateral or to turnover any excess proceeds of Collateral held by Lender, unless and until
Lender has received an original counterpart of a general release in a form prepared by and reasonably acceptable to Lender (each a Release),
fully executed and (if requested) acknowledged by each of the following (the Releasing Parties): (i) Borrower (and
each of them, if there is more than one); (ii) if Borrower is a corporation, partnership, limited liability company, or other legal entity,
then by such officers, directors, shareholders, partners, members, or other owners of Borrower as Lender may designate or require; (iii)
any Subordinating Creditors; (iv) any Guarantors; and (v) such other persons or entities that Lender may designate, wherein (among other
things) the Releasing Parties (and each of them) release the Lender Parties of and from any and all Claims, and wherein such Releasing
Parties waive their rights under California Civil Code Section 1542. Borrower understands that this provision constitutes a waiver of
its rights under the UCC (including, without limitation, the provisions ofUCC Section 9-513).

15.
CHOICE OF LAW, VENUE, JURY TRIAL WAIVER AND REFERENCE PROCEEDING.

 

THE
VALIDITY OF THE LOAN DOCUMENTS, THEIR CONSTRUCTION, INTERPRETATION, AND ENFORCEMENT AND THE RIGHTS OF THE PARTIES HERETO SHALL BE DETERMINED
UNDER, GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF CALIFORNIA, WITHOUT REGARD TO PRINCIPLES OF CONFLICTS
OF LAW. THE PARTIES AGREE THAT ALL ACTIONS OR PROCEEDINGS ARISING IN CONNECTION WITH THE LOAN DOCUMENTS SHALL BE TRIED AND LITIGATED
ONLY IN THE STATE COURTS LOCATED IN THE COUNTY OF SANTA CLARA, STATE OF CALIFORNIA, THE FEDERAL COURTS WHOSE VENUE INCLUDES THE STATE
OF CALIFORNIA, OR AT THE SOLE OPTION OF LENDER, IN ANY OTHER COURT IN WHICH LENDER SHALL INITIATE LEGAL OR EQUITABLE PROCEEDINGS AND
WHICH HAS SUBJECT MATTER JURISDICTION OVER THE MATTER IN CONTROVERSY. BORROWER AND LENDER EACH WAIVES, TO THE EXTENT PERMITTED UNDER
APPLICABLE LAW, THE RIGHT TO A TRIAL BY JURY IN ANY PROCEEDING UNDER THE LOAN DOCUMENTS OR RELATING TO THE DEALINGS OF BORROWER AND
LENDER AND ANY RIGHT EACH MAY HAVE TO ASSERT THE DOCTRINE OF "FORUM NON CONVENIENS" OR TO OBJECT TO VENUE TO THE EXTENT ANY
PROCEEDING IS BROUGHT IN ACCORDANCE WITH THIS SECTION 15.

WITHOUT
INTENDING IN ANY WAY TO LIMIT THE PARTIES' AGREEMENT TO WAIVE THEIR RESPECTIVE RIGHTS TO A TRIAL BY JURY, if the above waiver of the
right to a trial by jury is not enforceable, the parties hereto agree that any and all disputes or controversies of any nature between
them arising at any time shall be decided by a reference to a private judge, mutually selected by the parties (or, if they cannot agree,
by the Presiding Judge of the Santa Clara County, California Superior Court) appointed in accordance with California Code of Civil Procedure
§638 as such section may be amended and/or re-numbered from time to time (or pursuant to comparable provisions of federal law if
the dispute falls within the exclusive jurisdiction of the federal courts), sitting without a jury, in Santa Clara County, California;
and the parties hereby submit to the jurisdiction of such court. The reference proceeding shall be conducted pursuant to and in accordance
with the provisions of California Code of Civil Procedure §§638 through 645.1 inclusive, as such sections may be amended and/or
re numbered from time to time. No provision of this Section shall limit the right of any party (a) to exercise self-help remedies (including
setoft), (b) to foreclose against or sell any collateral, by power of sale or otherwise, or (c) to obtain or oppose provisional or anci11ary
remedies from a court of competent jurisdiction before, after or during the pendency of a reference. The exercise of, or opposition to,
any such remedy does not waive the right of any party to reference pursuant to this Section. Subject to the referee's power to award
costs to the prevailing party, the parties will equally share the cost of the referee and the court reporter at trial. In the event of
any challenge to the legality or enforceability of this Section, the prevailing party shall be entitled to recover the costs and expenses,
including reasonable attorneys' fees, incurred by it in connection therewith.

[Remainder
of Page Intentionally Left Blank; Signatures on Next Page]

    	 	25	 

     

    

 

Borrower
and Lender have executed and delivered this Agreement at Lender's place of business in Morgan Hill, California as of the date first above
written.

	 	 	BORROWER:
	 	 	 
	 	 	APPLIED
  UV, INC.,
	 	 	a
  Delaware corporation
	 	 	 
	 		Signed
  by: /s/ Max Mun
	 		Print
  Name: Max Munn
	 	 	Title/Capacity:
  President
	 	 	 
	 	 	STERILUMEN,
  INC.,
	 	 	a
  New York corporation
	 	 	 
	 	 	Signed
  by: /s/ Max Munn
	 	 	Print
                                            Name: Max Munn

      

	 	 	Title/Capacity:
  President
	 	 	 
	 	 	MUNN
  WORKS, LLC,
	 	 	a
  New York limited Liability company
	 	 	 
	 	 	Signed
  by: /s/ Max Munn
	 	 	Print
  Name: Max Munn
	 	 	Title/Capacity:
  President
	 	 	 
	 	 	LENDER:
	 	 	 
	 	 	PINNACLE
  BANK,
	 	 	a
  California corporation
	 	 	 
	 	 	Signed
  by: /s/ Kevin O’Hare
	 	 	Print
  Name: Kevin O’Hare
	 	 	Title/Capacity:
  President, Pinnacle Capital Finance

    	 	26	 

     

    

Schedule
2.3

Deposit
Account of Borrower for Advances

Account
#NIA

Bank
Name and Wire Transfer Instructions:

N/A

    	 	27	 

     

    

 

Schedule
5.1

EXISTING
LIENS WHICH ARE TO CONTINUE

[NONE]

    	 	28	 

     

    

 

Schedule
5.13

LITIGATION

[NONE]

 

 

    	 	29	 

     

    

 

Schedule
5.20

USE
OF PROCEEDS OF INITIAL ADVANCE

For working
capital purposes and for the uses set forth in Section 3G) of that certain Conditions Precedent/Subsequent Rider to Loan and Security
Agreement being entered into concurrently herewith.

 

    	 	30

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