Document:

Exhibit

AMERICAN STATES WATER COMPANY
2016 STOCK INCENTIVE PLAN
2020 PERFORMANCE AWARD AGREEMENT 
 
THIS PERFORMANCE AWARD AGREEMENT (this “Agreement”) is dated as of [ ], 2020 by and between American States Water Company, a California corporation (the “Corporation”), and [ ] (the “Participant”).
 
W I T N E S S E T H
 
WHEREAS, pursuant to the American States Water Company 2016 Stock Incentive Plan (the “Plan”), the Corporation has granted to the Participant effective as of the date hereof (the “Award Date”), an award of Performance Awards under the Plan (the “Award”), upon the terms and conditions set forth herein and in the Plan.   
 
NOW, THEREFORE, in consideration of services rendered and to be rendered by the Participant, and the mutual promises made herein and the mutual benefits to be derived therefrom, the parties agree as follows:
 
1. Defined Terms. Capitalized terms used herein and not otherwise defined herein shall have the meaning assigned to such terms in the Plan. The following phrases shall have the following meanings:
 
“Aggregate GSWC Operating Expense Level” means the cumulative operating expenses of the Water Segment as reported in the Corporation’s Form 10-Ks filed with the Securities and Exchange Commission for the period beginning January 1, 2020 and ending on the last day of the Performance Period, as adjusted to remove (i) Water Supply, depreciation and amortization and maintenance expenses as reported in such Form 10-Ks, (ii) public relations, legal and other professional services expenses of GSWC during the Performance Period applicable to defending GSWC from condemnation considerations and actions applicable to the Water Segment, (iii) any costs of defense, costs of settlement and judgments incurred in connection with claims arising from water quality incidences accruing during the Performance Period which are incurred in connection with claims determined by the Compensation Committee to be extraordinary events, (iv) write-offs associated with decisions or actions of the CPUC applicable to the financial statements in the Performance Period for the Water Segment, and (v) gross-up of certain surcharges authorized by the CPUC to recover previously incurred costs recorded pursuant to generally accepted accounting principles.
 
“ASUS” means American States Utility Services, Inc., a wholly subsidiary of the Corporation.

“ASUS Cumulative Net Earnings” means the cumulative net income of ASUS and its subsidiaries for the period beginning January 1, 2020 and ending on the last day of the Performance Period, less the amount, if any, of adjustments made to our contract pricing due to the Tax Cuts and Jobs Act of 2017. 
 

“ASUS New Base Acquisition Success Rate” means the percentage that results from dividing (1) the sum of the amounts of the contract awards announced by the Department of Defense for the Targeted New Bases set forth in the Targeted New Base Acquisition Table for the Targeted New Bases awarded to ASUS during 2020-2022 plus the sum of the Initial Joint Inventory Adjustment Difference for any Targeted New Bases  (the numerator), by (2) the sum of the amount of contract awards announced by the Department of Defense during 2020-2022 for the Targeted New Bases set forth in the Targeted New Base Acquisition Table for the Targeted New Bases awarded to all competitors during 2020-2022, including ASUS, plus the sum of the Initial Joint Inventory Adjustment Difference for any Targeted New Bases (the denominator).
 
“Board of Directors” means the Corporation’s board of directors.
 
“Compensation Committee” means the compensation committee of the Board.
 
“CPUC” means the California Public Utilities Commission.
 
“GSWC” means Golden State Water Company, a wholly owned subsidiary of the Corporation.

“Initial Joint Inventory Adjustment Difference” means, with respect to any Targeted New Base, the difference between (1) the amount of the contract award for such Targeted New Base at the time of the execution of the Bill of Sale for such Targeted New Base following a joint inventory of the assets at such Targeted New Base, and (2) the amount of the contract award for such Targeted New Base announced by the Department of Defense at the time of the contract award.
 
“Payout Percentage” means, with respect to each Performance Criteria, the percentage of the Participant’s Target Performance Award that is payable with respect to such Performance Criteria based on the degree of satisfaction of the Performance Target for such Performance Criteria.
 
“Peer Group” means the following seven companies: American Water Works Company, Inc., Aqua America, Inc., California Water Service Group, SJW Corp., Middlesex Water Company, York Water Company and Artesian Resources Corporation.  For this purpose, total shareholder return for the Corporation and each of the other seven companies shall be calculated using the Securities and Exchange Commission guidelines for reporting financial performance.  If the stock of any of the members of the Peer Group is no longer traded or is suspended from trading as of the last business day of the Performance Period, that company shall not be included in the Peer Group.

“Performance Criteria” means ASUS Cumulative Net Earnings, ASUS New Base Acquisition Success Rate, Aggregate GSWC Operating Expense Level and Total Shareholder Return.

“Performance Period” means the period commencing on January 1, 2020 and ending on the earliest of (i) December 31, 2022, and (ii) if applicable, the date of vesting of the Performance Awards pursuant to Section 3(d); provided that the preceding clause (ii) shall not apply in the event of vesting of the Performance Awards on account of the termination of the Participant’s employment as a result of Total Disability pursuant to Section 3(d).

“Performance Target” means the specific goal established by the Compensation Committee with respect to each of the Performance Criteria set forth in Exhibit A.
 
“Retirement Age” means the time that the Participant is at least age 55 and the sum of the age of the Participant and the Participant’s years of service with the Corporation and/or one of its wholly owned subsidiaries is at least 75.
 
“Targeted New Base” means the bases set forth in the Targeted New Base Acquisition Table.
 
“Targeted New Base Acquisition Table” means the table presented to the Compensation Committee at its meeting on January 27, 2020.
 
“Target Performance Award” means with respect to each Performance Criteria, the number of Performance Awards set forth on Exhibit A as the target for such Performance Criteria.

“Total Shareholder Return” means the Corporation’s total shareholder return, including reinvestment of dividends, as compared to the total shareholder return, including reinvestment of dividends, of each of the members of the Peer Group.  If any of the stock of any of the members of the Peer Group is no longer traded or is suspended from trading as of the last business day in the Performance Period, the Performance Target for Total Shareholder Return set forth in subsection A of Exhibit A shall be adjusted as provided therein.
 
“Water Segment” means the water segment of GSWC, one of the three reportable segments as defined in the Form 10-K.
 
“Water Supply” means water purchased, power purchased for pumping, groundwater production assessment and the water supply balancing accounts.
 
2. Grant.
 
a. Amount of Award. Subject to the terms of this Agreement, the Corporation hereby grants to the Participant the performance awards set forth on Exhibit A (subject to adjustment as provided in Section 5.2 of the Plan (the “Performance Awards”).
 
b. Account. The Corporation will maintain a Performance Award bookkeeping account for the Participant (the “Account”).  The Performance Awards shall be used solely as a device for determination of the payment eventually to be made to the Participant if such Performance Awards vest pursuant to Section 3.  The Performance Awards shall not be treated as property or as a trust fund of any kind.

3. Vesting.
 

a. General. The Performance Awards (including any dividend equivalents thereon) shall vest and become nonforfeitable with respect to thirty-three percent (33%) of the total number of Performance Awards on the first Installment Vesting Date, thirty-three percent (33%) of the total number of Performance Awards on the second Installment Vesting Date and thirty-four percent (34%) of the total number of Performance Awards on the last Installment Vesting Date; provided, however, that the final number of Performance Awards (including any Performance Awards credited as dividend equivalents thereon) shall be determined only upon completion of the Performance Period in accordance with Section 4.  Except as otherwise provided in this Agreement, the first Installment Vesting Date shall be December 31, 2020, the second Installment Vesting Date shall be December 31, 2021 and the last Installment Date Vesting Date shall be December 31, 2022 (each an “Installment Vesting Date”). 
 
b. Termination of Employment Prior to Vesting. Notwithstanding Section 3(a), the Participant’s Performance Awards (and any Performance Awards credited as dividend equivalents thereon) shall terminate to the extent that such Performance Awards have not become vested prior to the first date the Participant is no longer employed by the Corporation or one of its Subsidiaries, regardless of the reason for the termination of the Participant’s employment with the Corporation or a Subsidiary, subject to early vesting as provided in Sections 3(d) and 3(e).  If the Participant is employed by a Subsidiary and that entity ceases to be a Subsidiary, such event shall be deemed to be a termination of employment of the Participant for the purposes of this Agreement (unless the Participant otherwise continues to be employed by the Corporation or another of its Subsidiaries following such event).
 
c. Termination of Performance Awards. If any unvested Performance Awards are terminated under Section 3(b), such Performance Awards (and any Performance Awards credited as dividend equivalents thereon) shall automatically terminate and be cancelled as of the applicable termination date without payment of any consideration by the Corporation and without any other action by the Participant or the Participant’s beneficiary or personal representative, as the case may be.
 
d. Early Vesting as a Result of Death, Disability or a Change in Control Event. Notwithstanding Section 3(a), the Participant’s Performance Awards (and any Performance Awards credited as dividend equivalents thereon), to the extent such Performance Awards are not then vested, shall either (i) become fully vested upon the termination of employment as a result of death or Total Disability of the Participant, or (ii) if Participant’s employment is terminated by the Corporation without Cause or the Participant terminates his or her employment for Good Reason upon or within twenty four months after the occurrence of a Change in Control Event, be deemed fully vested immediately prior to the first date the Participant is no longer employed by the Corporation.  In the case of any inconsistency between this Section 3(d) and Section 5.2(c) of the Plan, this Section 3(d) shall control.
 
e. Early Vesting if Attained Retirement Age. Notwithstanding Section 3(a), the Participant’s Performance Awards (and any Performance Awards credited as dividend equivalents thereon), to the extent such Performance Awards are not then vested, shall become fully vested upon the Participant attaining Retirement Age.
  

4. Determination of Performance Awards Payable.
 
a. Basis of Determination. The number of Performance Awards payable to the Participant (and any Performance Awards credited as dividend equivalents thereon) shall be determined on the basis of the extent to which the Performance Targets for each of the Performance Criteria have been achieved.  The number of Performance Awards payable to the Participant shall be equal to the sum of the number of Performance Awards payable to the Participant with respect to each Performance Criteria, together with any dividend equivalents credited on such Performance Awards.  The number of Performance Awards payable with respect to each Performance Criteria shall be equal to the Target Performance Award for such Performance Criteria multiplied by the Payout Percentages set forth in Exhibit A for such Performance Criteria, together with any dividend equivalents credited on such Performance Awards.
 
b. Compensation Determination and Certification. As soon as practicable following the end of the Performance Period and, if applicable, the completion of the independent auditor’s report for the last year of the Performance Period, but in no event later than March 15 of the year following the end of the Performance Period, the Compensation Committee shall determine (i) the extent to which the Performance Targets for Performance Criteria are achieved, (ii) the Payout Percentages for each of the Performance Criteria and (iii) the number of Performance Awards (including any Performance Awards credited as dividend equivalents thereon) that have been earned, which determinations shall be made in accordance with Sections 7(b)(i) and 7(b)(iii), if applicable.  For levels of achievement between target and zero and target and the maximum, the Compensation Committee shall determine the Payout Percentage by interpolation, to the extent not otherwise expressly set forth in subsection A, B, C or D of Exhibit A.   

c. Adjustments and Limitations. Notwithstanding the foregoing, the number of Performance Awards payable to the Participant (and the Performance Awards credited as dividend equivalents thereon) shall be subject to the adjustments, limitations, the Compensation Committee’s discretionary authority to make adjustments and other terms and conditions set forth in the Plan, provided that in no event may the maximum number of shares of Common Stock subject to this Award exceed 100,000.  
 
5. Continuance of Employment. The vesting schedule requires continued employment or service through each applicable vesting date as a condition to the vesting of the applicable installment of the Award and the rights and benefits under this Agreement.  Partial employment or service, even if substantial, during any vesting period will not entitle the Participant to any proportionate vesting or avoid or mitigate a termination of rights and benefits upon or following a termination of employment or services.
  
Nothing contained in this Agreement or the Plan constitutes an employment or service commitment by the Corporation, affects the Participant’s status as an employee at will who is subject to termination without cause, confers upon the Participant any right to remain employed by or in service to the Corporation or Subsidiary, interferes in any way with the right of the Corporation or any Subsidiary at any time to terminate such employment or services, or affects the right of the Corporation or any Subsidiary to increase or decrease the Participant’s other compensation or 

benefits. Nothing in this paragraph, however, is intended to adversely affect any independent contractual right of the Participant without his or consent hereto.
 
6. Dividend and Voting Rights.
 
a. Limitation of Rights Associated with Performance Awards. The Participant shall have no rights as a shareholder of the Corporation, no dividend rights (except as expressly provided in Section 6(b) with respect to dividend equivalent rights) and no voting rights, with respect to the Awards and any Common Shares underlying or issuable in respect of such Awards until such Common Shares are actually issued to and held of record by the Participant.  No adjustments will be made for dividends or other rights of a holder for which the record date is prior to the date of issuance of the Common Shares.
 
b. Dividend Equivalents. The Participant shall be entitled to be credited with dividend equivalents in the form of additional Performance Awards with respect to the Awards credited to his or her Account as the Corporation declares and pays dividends in cash on its Common Shares.  The number of Performance Awards to be credited to the Participant’s Account as a dividend equivalent will equal (1) the sum of the per share cash dividends paid by the Corporation on its Common Shares during the Performance Period multiplied by the number of Awards credited to the Participant’s Account on the last day of the Performance Period divided by (2) the average of the Fair Market Value of the Common Shares on each dividend payment date during the Performance Period.  Performance Awards credited as dividend equivalents will become vested to the same extent as the Awards to which they relate.  For purposes of clarity, no dividend equivalents shall be credited for a dividend record date with respect to any Awards that were paid or terminated prior to such dividend record date and the dividend equivalents will vest only if and to the extent that the underlying Performance Awards vest.
 
7. Timing and Manner of Distribution.
 
a. General. On or soon as administratively practicable following the end of the Performance Period, but in no event later than March 15 of the year following the end of the Performance Period, the Corporation shall deliver to the Participant (or the Participant’s Beneficiary) a number of Common Shares equal to the number of Performance Awards subject to this Award that become vested on or prior to the end of the Performance Period (including any Performance Awards credited as dividend equivalents with respect to such vested Performance Awards), unless such Performance Awards terminate prior to such Installment Vesting Date pursuant to Section 3(b).

  
b. Payment of Performance Awards upon Early Vesting as a Result of Death, Disability or Termination of Employment following a Change in Control Event.   Notwithstanding Section 7(a):

i. Upon termination of the Participant’s employment as a result of death of the Participant, the Corporation shall deliver to the Participant or his or her Beneficiary a 

number of Common Shares equal to the number of Performance Awards subject to this Award that become vested in accordance with Section 3 (including any Performance Awards credited as dividend equivalents with respect to such Performance Awards) as soon as administratively practicable following such termination of employment (but in no event later than 60 days following termination of employment or, to the extent applicable, the date specified in Section 7(e)).  Notwithstanding anything to the contrary contained herein, the number of Common Shares payable under any Performance Award pursuant to this Section 7(b)(i) shall be determined at an assumed result of performance with a Payout Percentage of 100% for each Performance Criteria (i.e., Payout as a Percentage of Target of 100%).

ii. Upon termination of the Participant’s employment as a result of Total Disability of the Participant, the Corporation shall deliver to the Participant or his or her Beneficiary a number of Common Shares equal to the number of Performance Awards subject to this Award that become vested in accordance with Section 3 (including any Performance Awards credited as dividend equivalents with respect to such Performance Awards) as soon as administratively practicable following the end of the Performance Period (i.e., December 31, 2022) (but in no event later than March 15, 2023 or, to the extent applicable, the date specified in Section 7(e)). 

iii. Upon termination of Participant’s employment upon or within twenty four months after the occurrence of a Change in Control Event (A) by the Corporation without Cause or (B) by the Participant for Good Reason, in each case, then the Corporation shall deliver to the Participant a number of Common Shares equal to the number of Performance Awards vested in accordance with Section 3 (including any Performance Awards credited as dividend equivalents with respect to such Awards) as soon as administratively possible following his or her termination of employment (but in no event later than 60 days following termination of employment or, to the extent applicable, the date specified in Section 7(e)).  Notwithstanding anything to the contrary contained herein, the number of Common Shares payable under any Performance Award pursuant to this Section 7(b)(iii) shall be determined at an assumed result of performance with a Payout Percentage of 100% for each Performance Criteria (i.e., Payout as a Percentage of Target of 100%).
     
c. Termination of Performance Awards Upon Payment. A Performance Award will terminate upon the payment of that Performance Award in accordance with the terms hereof, and the Participant shall have no further rights with respect to such Performance Award.

d. Form of Payment. The Corporation may deliver the Common Shares payable to the Participant under this Section 7 either by delivering one or more certificates for such shares or by entering such shares in book entry form, as determined by the Corporation in its discretion.

e. Section 409A. Notwithstanding anything herein to the contrary, if the Corporation reasonably determines that the payment of Common Shares as a result of the Participant’s termination of employment is subject to Section 409A(a)(2)(B)(i) of the Code, such payment 

shall not be paid until the earlier of (i) six months after the Participant’s “separation from service” (within the meaning of Section 409A of the Code and Treasury Regulations Section 1.409A-1(h) without regard to optional alternative definitions available thereunder) and (ii) the Participant’s death.
 
8. Restrictions on Transfer. Neither the Award, nor any interest therein or amount or shares payable in respect thereof may be sold, assigned, transferred, pledged or otherwise disposed of, alienated or encumbered, either voluntarily or involuntarily.  The transfer restrictions in the preceding sentence shall not apply to (a) transfers to the Corporation, (b) transfers by will or the laws of descent and distribution, or (c) transfers pursuant to a QDRO order if approved or ratified by the Compensation Committee.
 
9. Adjustments Upon Specified Events. Upon the occurrence of certain events relating to the Corporation’s stock contemplated by Section 5.2 of the Plan, the Compensation Committee shall make adjustments if appropriate in the number of Performance Awards then outstanding and the number and kind of securities that may be issued in respect of the Award.
 
10. Tax Withholding. Upon the vesting and/or distribution of Common Shares in respect to the Performance Awards, the Corporation (or the Subsidiary last employing the Participant) shall have the right at its option to (a) require the Participant to pay or provide for payment in respect of cash of the amount of any taxes that the Corporation or any Subsidiary may be required to withhold with respect to such vesting and/or distribution, or (b) deduct from any amount payable to the Participant the amount of any taxes which the Corporation or any Subsidiary may be required to withhold with respect to such vesting and/or distribution.  In any case where a tax is required to be withheld in connection with the delivery of Common Shares under this Agreement, the Compensation Committee may, in its sole discretion, direct the Corporation or the Subsidiary to reduce the number of shares to be delivered by (or otherwise reacquire) the appropriate number of whole shares, valued at their then Fair Market Value (with the “Fair Market Value” of such shares determined in accordance with the applicable provisions of the Plan), to satisfy such withholding obligation at the minimum applicable withholding rates.
 
11. Notices. Any notice to be given under the terms of this Agreement shall be in writing and addressed to the Corporation at its principal office to the attention of the Secretary, and to the Participant at the Participant’s last address reflected on the Corporation’s records, or at such other address as either party may hereafter designate in writing to the other.  Any such notice shall be given only when received, but if the Participant is no longer an employee of the Corporation, shall be deemed to have been duly given by the Corporation when enclosed in a properly sealed  envelope addressed as aforesaid, registered or certified, and deposited (postage and registry or certification fee prepaid) in a post office or branch office regularly maintained by the United States Government.

12. Plan. The Award and all rights of the Participant under this Agreement are subject to, and the Participant agrees to be bound by, all of the terms and conditions of the provisions of the Plan, incorporated herein by reference.  In the event of a conflict or inconsistency between the terms and conditions of this Agreement and of the Plan, the terms and conditions of the Plan shall govern, except as otherwise provided expressly herein.  The Participant agrees to be bound by the terms of the Plan and this Agreement. The Participant acknowledges having read and understood the Plan and this Agreement.  Unless otherwise expressly provided in other sections of this Agreement, 

provisions of the Plan that confer discretionary authority on the Compensation Committee do not (and shall not be deemed to) create any rights in the Participant unless such rights are expressly set forth herein or are otherwise in the sole discretion of the Compensation Committee so conferred by appropriate action of the Compensation Committee under the Plan after the date hereof.

Notwithstanding anything herein to the contrary, if pursuant to the terms of any written change in control or other agreement (the delivery of which has been authorized by the Board), between the Corporation (or any Subsidiary), on the one hand, and the Participant, on the other, the Participant’s Performance Awards hereunder would vest or become payable earlier or in a manner other than as provided in this Agreement, then (subject to Section 7(e)) the terms of such change in control or other agreement shall control the vesting and payment thereof.
 
13. Entire Agreement. This Agreement and the Plan together constitute the entire agreement and supersede all prior understandings and agreements, written or oral, of the parties hereto with respect to the subject matter hereof. The Plan and this Agreement may be amended pursuant to Section 5.6 of the Plan.  Such amendment must be in writing and signed by the Corporation.  The Corporation may, however, unilaterally waive any provision hereof in writing to the extent such waiver does not adversely affect the interests of the Participant hereunder, but no such waiver shall operate as or be construed to be a subsequent waiver of the same provision or a waiver of any other provision hereof.

 14. Limitation on Participant’s Rights. Participation in the Plan confers no rights or interests other than as herein provided.  This Agreement creates only a contractual obligation on the part of the Corporation as to amounts payable and shall not be construed as creating a trust.  Neither the Plan nor any underlying program, in and of itself, has any assets.  The Participant shall have only the rights of a general unsecured creditor of the Corporation, with respect to amounts credited and payable, if any, with respect to the Performance Awards, and rights no greater than the right to receive the Common Shares as a general unsecured creditor with respect to such Awards, as and when payable hereunder.
  
15. Counterparts. This Agreement may be executed simultaneously in any number of counterparts, each of which shall be deemed an original but all of which together shall constitute one and the same instrument.
 
16. Section Headings. The section headings of this Agreement are for convenience of reference only and shall not be deemed to alter or affect any provision hereof.

17. Governing Law. This Agreement shall be governed by and construed and enforced in accordance with the laws of the State of California without regard to conflict of law principles thereunder.
 
18. Construction. It is intended that the terms of the Award will not result in the imposition of any tax liability pursuant to Section 409A of the Code.  This Agreement shall be construed and interpreted consistent with that intent.
 
19. Recoupment. The Award under this Agreement and the Common Shares received by the Participant upon the vesting of the Award, or the value, proceeds or other benefits received by 

the Participant upon the sale of such Common Shares, shall be subject to the Corporation’s Policy Regarding Recoupment of Certain Performance-Based Compensation Payments, as it may be amended from time to time, or as otherwise required by law or as may be necessary to enable the Corporation to comply with the rules of the New York Stock Exchange or the rules of any other national securities exchange or national securities association on which the securities of the Corporation or any of its subsidiaries may be listed.
 
IN WITNESS WHEREOF, the Corporation has caused this Agreement to be executed on its behalf by a duly authorized officer and the Participant has hereunto set his or her hand as of the date and year first above written.
	
		
	  
 
	

AMERICAN STATES WATER COMPANY, a California corporation
 

	 
	 

	 
 
	By:____________________________________
 

	 
	 

	 
 
	Print Name:_____________________________
 

	 
	 

	 
 
	Its:____________________________________
 

	 
	 

	 
 
	PARTICIPANT
 

	 
	 

	 
 
	Signature: ______________________________
 

	 
 
	 
 

	 
 
	Print Name: ____________________________
 

CONSENT OF SPOUSE
 
In consideration of the execution of the foregoing Performance Award Agreement by American States Water Company, I, __________________, the spouse of the Participant therein named, do hereby join with my spouse in executing the foregoing Performance Award Agreement and do hereby agree to be bound by all of the terms and provisions thereof and of the Plan.
 
Dated: ______________________________
 

	
		
	 
 
	Signature: ____________________________________
 

	 
 
	 
 

	 
 
	Print Name: __________________________________
 

  
 

 
EXHIBIT A
2020 PERFORMANCE AWARD AGREEMENT
 

	
						
	 
	Target Performance Award for Each Performance Criteria

	A.  Total Shareholder Return
	B. Aggregate GSWC Operating Expense Level
	C.  ASUS Cumulative Net Earnings
	D.  ASUS New Base Acquisition Success Rate
	Target
Total

	[     ]
	[     ]
	[     ]
	[     ]
	[     ]

		
	A.
	Performance Targets and Payout Percentages for Total Shareholder Return:

		
	1.
	If the Peer Group consists of seven companies at the end of the Performance Period: 

	
			
	Total Shareholder Return
	Payout as a Percentage of Target

	 
	≥ 7 members of the Peer Group
	200%

	 
	≥ 6 members of the Peer Group
	171.43%

	 
	≥ 5 members of the Peer Group
	142.86%

	 
	≥ 4 members of the Peer Group
	114.29%

	 
	≥ 3 members of the Peer Group
	85.71%

	 
	≥ 2 members of the Peer Group
	57.14%

	 
	≥ 1 member of the Peer Group
	28.57%

		
	2.
	If the Peer Group consists of six companies at the end of the Performance Period: 

	
			
	Total Shareholder Return
	Payout as a Percentage of Target

	 
	≥ 6 members of the Peer Group
	200%

	 
	≥ 5 members of the Peer Group
	166.67%

	 
	≥ 4 members of the Peer Group
	133.33%

	 
	≥ 3 members of the Peer Group
	100%

	 
	≥ 2 members of the Peer Group
	66.67%

	 
	≥ 1 member of the Peer Group
	33.33%

		
	3.
	If the Peer Group consists of five companies at the end of the Performance Period: 

	
			
	Total Shareholder Return
	Payout as a Percentage of Target

	1.    
	≥ 5 members of the Peer Group
	200%

	2.    
	≥ 4 members of the Peer Group
	160%

	3.    
	≥ 3 members of the Peer Group
	120%

	4.    
	≥ 2 members of the Peer Group
	80%

	5.    
	≥ 1 member of the Peer Group
	40%

		
	4.
	If the Peer Group consists of four companies at the end of the Performance Period: 

	
			
	Total Shareholder Return
	Payout as a Percentage of Target

	1.    
	≥ 4 members of the Peer Group
	200%

	2.    
	≥ 3 members of the Peer Group
	150%

	3.    
	≥ 2 members of the Peer Group
	100%

	4.    
	≥ 1 member of the Peer Group
	50%

		
	5.
	If the Peer Group consists of three companies at the end of the Performance Period: 

	
			
	Total Shareholder Return
	Payout as a Percentage of Target

	1.    
	≥ 3 members of the Peer Group
	200%

	2.    
	≥ 2 members of the Peer Group
	133.33%

	3.    
	≥ 1 member of the Peer Group
	66.67%

		
	6.
	If the Peer Group consists of two companies at the end of the Performance Period: 

	
			
	Total Shareholder Return
	Payout as a Percentage of Target

	1.    
	≥ 2 members of the Peer Group
	200%

	2.    
	≥ 1 member of the Peer Group
	100%

		
	7.
	If the Peer Group consists of one company at the end of the Performance Period: 

	
			
	Total Shareholder Return
	Payout as a Percentage of Target

	1.    
	≥ 1 member of the Peer Group
	150%

		
	B.
	Performance Targets and Payout Percentages for Aggregate GSWC Operating Expense Level

	
		
	Aggregate GSWC Operating Expense Level
	Payout as a Percentage of Target

	≤$278.5 million
	150%

	>$278.5 million and ≤$284.5 million
	125%

	>$284.5 million and ≤$304.5 million
	100%

	>$304.5 million and ≤$310.5 million
	50%

	>$310.5 million
	0%

		
	C.
	Performance Targets and Payout Percentages for ASUS Cumulative Net Earnings

	
		
	ASUS Cumulative Net Earnings
	Payout as a Percentage of Target

	≥$63.7 million
	200%

	≥$58.7 million and <$63.7 million
	150%

	≥$53.7 million and <$58.7 million
	100%

	≥$48.7 million and <$53.7 million
	50%

	<$48.7 million
	0%

		
	D.
	Performance Targets and Payout Percentages for ASUS New Base Acquisition Success Rate

 
	
		
	New Base Acquisition Success Rate
	Payout as a Percentage of Target

	100.0%
	250%

	78.3%
	200%

	56.7%
	150%

	35.0%
	100%

	17.5%
	50%

	0%
	0%

If the U.S government does not award at least two of the Targeted New Bases to all competitors, including ASUS, during the 2020-2022 Performance Period, the payout will be at 100% of Target.

Interpolation will be used for the payout on this metric.Exhibit 10.1

 

SECURITIES PURCHASE AGREEMENT

This SECURITIES PURCHASE
AGREEMENT (the “Agreement”), dated as of January 8, 2020, by and between OZOP SURGICAL CORP., a Nevada corporation,
with its address at 319 Clematis Street, Suite 714, West Palm Beach FL 33401 (the “Company”), and REDSTART HOLDINGS
CORP., a New York corporation, with its address at 1188 Willis Avenue, Albertson, New York 11507 (the “Buyer”).

 

WHEREAS:

 

A.
The Company and the Buyer are executing and delivering
this Agreement in reliance upon the exemption from securities registration afforded by the rules and regulations as promulgated
by the United States Securities and Exchange Commission (the “SEC”) under the Securities Act of 1933, as amended (the
“1933 Act”); and

 

B.
Buyer desires to purchase and the Company desires
to issue and sell, upon the terms and conditions set forth in this Agreement a convertible note of the Company, in the form attached
hereto as Exhibit A, in the aggregate principal amount of $38,000.00 (together with any note(s) issued in replacement thereof or
as a dividend thereon or otherwise with respect thereto in accordance with the terms thereof, the “Note”), convertible
into shares of common stock, $0.001 par value per share, of the Company (the “Common Stock”), upon the terms and subject
to the limitations and conditions set forth in such Note.

 

NOW THEREFORE,
the Company and the Buyer severally (and not jointly) hereby agree as follows:

 

1.
Purchase and Sale of Note.

 

a.
Purchase of Note. On the Closing Date
(as defined below), the Company shall issue and sell to the Buyer and the Buyer agrees to purchase from the Company such principal
amount of Note as is set forth immediately below the Buyer’s name on the signature pages hereto.

 

b.
Form of Payment. On the Closing Date (as
defined below), (i) the Buyer shall pay the purchase price for the Note to be issued and sold to it at the Closing (as defined
below) (the “Purchase Price”) by wire transfer of immediately available funds to the Company, in accordance with the
Company’s written wiring instructions, against delivery of the Note in the principal amount equal to the Purchase Price as
is set forth immediately below the Buyer’s name on the signature pages hereto, and (ii) the Company shall deliver such
duly executed Note on behalf of the Company, to the Buyer, against delivery of such Purchase Price. 

 

c.
Closing Date. Subject to the satisfaction
(or written waiver) of the conditions thereto set forth in Section 6 and Section 7 below, the date and time of the issuance and
sale of the Note pursuant to this Agreement (the “Closing Date”) shall be 12:00 noon, Eastern Standard Time on or about
January 8, 2020, or such other mutually agreed upon time. The closing of the transactions contemplated by this Agreement (the “Closing”)
shall occur on the Closing Date at such location as may be agreed to by the parties.

 

2.
Buyer’s Representations and Warranties.
The Buyer represents and warrants to the Company that:

 

a.
Investment Purpose. As of the date hereof,
the Buyer is purchasing the Note and the shares of Common Stock issuable upon conversion of or otherwise pursuant to the Note (such
shares of Common Stock being collectively referred to herein as the “Conversion Shares” and, collectively with the
Note, the “Securities”) for its own account and not with a present view towards the public sale or distribution thereof,
except pursuant to sales registered or exempted from registration under the 1933 Act.

 

b.
Accredited Investor Status. The Buyer
is an “accredited investor” as that term is defined in Rule 501(a) of Regulation D (an “Accredited Investor”).

 

c.
Reliance on Exemptions. The Buyer understands
that the Securities are being offered and sold to it in reliance upon specific exemptions from the registration requirements of
United States federal and state securities laws and that the Company is relying upon the truth and accuracy of, and the Buyer’s
compliance with, the representations, warranties, agreements, acknowledgments and understandings of the Buyer set forth herein
in order to determine the availability of such exemptions and the eligibility of the Buyer to acquire the Securities.

 

d.
Information. The Company has not disclosed
to the Buyer any material nonpublic information and will not disclose such information unless such information is disclosed to
the public prior to or promptly following such disclosure to the Buyer.

 

e.
Legends. The Buyer understands that the
Note and, until such time as the Conversion Shares have been registered under the 1933 Act; or may be sold pursuant to an applicable
exemption from registration, the Conversion Shares may bear a restrictive legend in substantially the following form:

 

"THE SECURITIES REPRESENTED BY
THIS INSTRUMENT HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR UNDER
ANY STATE SECURITIES LAWS, AND MAY NOT BE PLEDGED, SOLD, ASSIGNED, HYPOTHECATED OR OTHERWISE TRANSFERRED UNLESS (1) A REGISTRATION
STATEMENT WITH RESPECT THERETO IS EFFECTIVE UNDER THE SECURITIES ACT AND ANY APPLICABLE STATE SECURITIES LAWS OR (2) THE ISSUER
OF SUCH SECURITIES RECEIVES AN OPINION OF COUNSEL TO THE HOLDER OF SUCH SECURITIES, WHICH COUNSEL AND OPINION ARE REASONABLY ACCEPTABLE
TO THE ISSUER’S TRANSFER AGENT, THAT SUCH SECURITIES MAY BE PLEDGED, SOLD, ASSIGNED, HYPOTHECATED OR OTHERWISE TRANSFERRED
WITHOUT AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT AND APPLICABLE STATE SECURITIES LAWS."

 

The legend set forth above
shall be removed and the Company shall issue a certificate without such legend to the holder of any Security upon which it is stamped,
if, unless otherwise required by applicable state securities laws, (a) such Security is registered for sale under an effective
registration statement filed under the 1933 Act or otherwise may be sold pursuant to an exemption from registration without any
restriction as to the number of securities as of a particular date that can then be immediately sold, or (b) such holder provides
the Company with an opinion of counsel, in form, substance and scope customary for opinions of counsel in comparable transactions,
to the effect that a public sale or transfer of such Security may be made without registration under the 1933 Act, which opinion
shall be accepted by the Company so that the sale or transfer is effected. The Buyer agrees to sell all Securities, including those
represented by a certificate(s) from which the legend has been removed, in compliance with applicable prospectus delivery requirements,
if any. In the event that the Company does not accept the opinion of counsel provided by the Buyer with respect to the transfer
of Securities pursuant to an exemption from registration, such as Rule 144, at the Deadline, it will be considered an Event of
Default pursuant to Section 3.2 of the Note.

 

f.
Authorization; Enforcement. This Agreement
has been duly and validly authorized. This Agreement has been duly executed and delivered on behalf of the Buyer, and this Agreement
constitutes a valid and binding agreement of the Buyer enforceable in accordance with its terms.

 

3.
Representations and Warranties of the Company.
The Company represents and warrants to the Buyer that:

 

a.
Organization and Qualification. The Company
and each of its Subsidiaries (as defined below), if any, is a corporation duly organized, validly existing and in good standing
under the laws of the jurisdiction in which it is incorporated, with full power and authority (corporate and other) to own, lease,
use and operate its properties and to carry on its business as and where now owned, leased, used, operated and conducted. “Subsidiaries”
means any corporation or other organization, whether incorporated or unincorporated, in which the Company owns, directly or indirectly,
any equity or other ownership interest.

 

b.
Authorization; Enforcement. (i) The Company
has all requisite corporate power and authority to enter into and perform this Agreement, the Note and to consummate the transactions
contemplated hereby and thereby and to issue the Securities, in accordance with the terms hereof and thereof, (ii) the execution
and delivery of this Agreement, the Note by the Company and the consummation by it of the transactions contemplated hereby and
thereby (including without limitation, the issuance of the Note and the issuance and reservation for issuance of the Conversion
Shares issuable upon conversion or exercise thereof) have been duly authorized by the Company’s Board of Directors and no
further consent or authorization of the Company, its Board of Directors, or its shareholders is required, (iii) this Agreement
has been duly executed and delivered by the Company by its authorized representative, and such authorized representative is the
true and official representative with authority to sign this Agreement and the other documents executed in connection herewith
and bind the Company accordingly, and (iv) this Agreement constitutes, and upon execution and delivery by the Company of the Note,
each of such instruments will constitute, a legal, valid and binding obligation of the Company enforceable against the Company
in accordance with its terms.

 

c.
Capitalization. As of the date hereof,
the authorized common stock of the Company consists of 990,000,000 authorized shares
of Common Stock, $0.001 par value per share, of which 192,573,422 shares are issued
and outstanding; and sufficient shares are reserved for issuance upon conversion of the Note as set forth in the Note. All of such
outstanding shares of capital stock are, or upon issuance will be, duly authorized, validly issued, fully paid and non-assessable.
..

 

d.
Issuance of Shares. The Conversion Shares
are duly authorized and reserved for issuance and, upon conversion of the Note in accordance with its respective terms, will be
validly issued, fully paid and non-assessable, and free from all taxes, liens, claims and encumbrances with respect to the issue
thereof and shall not be subject to preemptive rights or other similar rights of shareholders of the Company and will not impose
personal liability upon the holder thereof.

 

e.
No Conflicts. The execution, delivery
and performance of this Agreement, the Note by the Company and the consummation by the Company of the transactions contemplated
hereby and thereby (including, without limitation, the issuance and reservation for issuance of the Conversion Shares) will not
(i) conflict with or result in a violation of any provision of the Certificate of Incorporation or By-laws, or (ii) violate or
conflict with, or result in a breach of any provision of, or constitute a default (or an event which with notice or lapse of time
or both could become a default) under, or give to others any rights of termination, amendment, acceleration or cancellation of,
any agreement, indenture, patent, patent license or instrument to which the Company or any of its Subsidiaries is a party, or (iii)
result in a violation of any law, rule, regulation, order, judgment or decree (including federal and state securities laws and
regulations and regulations of any self-regulatory organizations to which the Company or its securities are subject) applicable
to the Company or any of its Subsidiaries or by which any property or asset of the Company or any of its Subsidiaries is bound
or affected (except for such conflicts, defaults, terminations, amendments, accelerations, cancellations and violations as would
not, individually or in the aggregate, have a Material Adverse Effect). The businesses of the Company and its Subsidiaries, if
any, are not being conducted, and shall not be conducted so long as the Buyer owns any of the Securities, in violation of any law,
ordinance or regulation of any governmental entity. “Material Adverse Effect” means any material adverse effect on
the business, operations, assets, financial condition or prospects of the Company or its Subsidiaries, if any, taken as a whole,
or on the transactions contemplated hereby or by the agreements or instruments to be entered into in connection herewith. 

 

f.
SEC Documents; Financial Statements. The
Company has filed all reports, schedules, forms, statements and other documents required to be filed by it with the SEC pursuant
to the reporting requirements of the Securities Exchange Act of 1934, as amended (the “1934 Act”) (all of the foregoing
filed prior to the date hereof and all exhibits included therein and financial statements and schedules thereto and documents (other
than exhibits to such documents) incorporated by reference therein, being hereinafter referred to herein as the “SEC Documents”).
Upon written request the Company will deliver to the Buyer true and complete copies of the SEC Documents, except for such exhibits
and incorporated documents. As of their respective dates or if amended, as of the dates of the amendments, the SEC Documents complied
in all material respects with the requirements of the 1934 Act and the rules and regulations of the SEC promulgated thereunder
applicable to the SEC Documents, and none of the SEC Documents, at the time they were filed with the SEC, contained any untrue
statement of a material fact or omitted to state a material fact required to be stated therein or necessary in order to make the
statements therein, in light of the circumstances under which they were made, not misleading. None of the statements made in any
such SEC Documents is, or has been, required to be amended or updated under applicable law (except for such statements as have
been amended or updated in subsequent filings prior the date hereof). As of their respective dates or if amended, as of the dates
of the amendments, the financial statements of the Company included in the SEC Documents complied as to form in all material respects
with applicable accounting requirements and the published rules and regulations of the SEC with respect thereto. Such financial
statements have been prepared in accordance with United States generally accepted accounting principles, consistently applied,
during the periods involved and fairly present in all material respects the consolidated financial position of the Company and
its consolidated Subsidiaries as of the dates thereof and the consolidated results of their operations and cash flows for the periods
then ended (subject, in the case of unaudited statements, to normal year-end audit adjustments). The Company is subject to the
reporting requirements of the 1934 Act.

 

g.
Absence of Certain Changes. Since September
30, 2019, except as set forth in the SEC Documents, there has been no material adverse change and no material adverse development
in the assets, liabilities, business, properties, operations, financial condition, results of operations, prospects or 1934 Act
reporting status of the Company or any of its Subsidiaries.

 

h.
Absence of Litigation. Except as set forth
in the SEC Documents, there is no action, suit, claim, proceeding, inquiry or investigation before or by any court, public board,
government agency, self-regulatory organization or body pending or, to the knowledge of the Company or any of its Subsidiaries,
threatened against or affecting the Company or any of its Subsidiaries, or their officers or directors in their capacity as such,
that could have a Material Adverse Effect. The Company and its Subsidiaries are unaware of any facts or circumstances which might
give rise to any of the foregoing.

 

i.  
No Integrated Offering. Neither the Company,
nor any of its affiliates, nor any person acting on its or their behalf, has directly or indirectly made any offers or sales in
any security or solicited any offers to buy any security under circumstances that would require registration under the 1933 Act
of the issuance of the Securities to the Buyer. The issuance of the Securities to the Buyer will not be integrated with any other
issuance of the Company’s securities (past, current or future) for purposes of any shareholder approval provisions applicable
to the Company or its securities.

 

j.  
No Brokers. The Company has taken no action
which would give rise to any claim by any person for brokerage commissions, transaction fees or similar payments relating to this
Agreement or the transactions contemplated hereby. 

 

k.
No Investment Company. The Company is
not, and upon the issuance and sale of the Securities as contemplated by this Agreement will not be an “investment company”
required to be registered under the Investment Company Act of 1940 (an “Investment Company”). The Company is not controlled
by an Investment Company.

 

l.  
Breach of Representations and Warranties by
the Company. If the Company breaches any of the representations or warranties set forth in this Section 3, and in addition
to any other remedies available to the Buyer pursuant to this Agreement, it will be considered an Event of default under Section
3.4 of the Note.

 

4.
COVENANTS.

 

a.
Best Efforts. The Company shall use its
best efforts to satisfy timely each of the conditions described in Section 7 of this Agreement. 

 

b.
Form D; Blue Sky Laws. The Company agrees
to timely make any filings required by federal and state laws as a result of the closing of the transactions contemplated by this
Agreement.

 

c.
Use of Proceeds. The Company shall use
the proceeds for general working capital purposes.

 

d.
Expenses. At the Closing, the Company’s
obligation with respect to the transactions contemplated by this Agreement is to reimburse Buyer’ expenses shall be $3,000.00
for Buyer’s legal fees and due diligence fee. 

 

e.
Corporate Existence. So long as the Buyer
beneficially owns any Note, the Company shall maintain its corporate existence and shall not sell all or substantially all of the
Company’s assets, except with the prior written consent of the Buyer.

 

f.
Breach of Covenants. If the Company breaches
any of the covenants set forth in this Section 4, and in addition to any other remedies available to the Buyer pursuant to this
Agreement, it will be considered an event of default under Section 3.4 of the Note.

 

g.
Failure to Comply with the 1934 Act. So
long as the Buyer beneficially owns the Note, the Company shall comply with the reporting requirements of the 1934 Act; and the
Company shall continue to be subject to the reporting requirements of the 1934 Act.

 

h.
Trading Activities. Neither the Buyer
nor its affiliates has an open short position in the common stock of the Company and the Buyer agrees that it shall not, and that
it will cause its affiliates not to, engage in any short sales of or hedging transactions with respect to the common stock of the
Company.

 

i.  
Right of First Refusal. Unless it shall
have first delivered to the Buyer, at least forty eight (48) hours prior to the closing of such Future Offering (as defined herein),
written notice describing the proposed Future Offering (“ROFR Notice”), including the terms and conditions thereof,
identity of the proposed purchaser and proposed definitive documentation to be entered into in connection therewith, and providing
the Buyer an option during the forty eight (48) hour period following delivery of such notice to purchase the securities being
offered in the Future Offering on the same terms as contemplated by such Future Offering (the limitations referred to in this sentence
and the preceding sentence are collectively referred to as the “Right of First Refusal”), the Company will not conduct
any equity (or debt with an equity component) financing in an amount less than $203,000 (“Future Offering(s)”) during
the period beginning on the Closing Date and ending nine (9) months following the Closing Date. In the event the terms and conditions
of a proposed Future Offering are amended in any respect after delivery of the notice to the Buyer concerning the proposed Future
Offering, the Company shall deliver a new notice to the Buyer describing the amended terms and conditions of the proposed Future
Offering and the Buyer thereafter shall have an option during the forty eight (48) hour period following delivery of such new notice
to purchase the securities being offered on the same terms as contemplated by such proposed Future Offering, as amended. 

 

5.
Transfer Agent Instructions. The Company
shall issue irrevocable instructions to its transfer agent to issue certificates, registered in the name of the Buyer or its nominee,
for the Conversion Shares in such amounts as specified from time to time by the Buyer to the Company upon conversion of the Note
in accordance with the terms thereof (the “Irrevocable Transfer Agent Instructions”).  In the event that the Company
proposes to replace its transfer agent, the Company shall provide, prior to the effective date of such replacement, a fully executed
Irrevocable Transfer Agent Instructions in a form as initially delivered pursuant to this Agreement (including but not limited
to the provision to irrevocably reserve shares of Common Stock in the Reserved Amount as such term is defined in the Note) signed
by the successor transfer agent to Company and the Company. Prior to registration of the Conversion Shares under the 1933 Act or
the date on which the Conversion Shares may be sold pursuant to an exemption from registration, all such certificates shall bear
the restrictive legend specified in Section 2(e) of this Agreement.  The Company warrants that: (i) no instruction other than
the Irrevocable Transfer Agent Instructions referred to in this Section 5, will be given by the Company to its transfer agent and
that the Securities shall otherwise be freely transferable on the books and records of the Company as and to the extent provided
in this Agreement and the Note; (ii) it will not direct its transfer agent not to transfer or delay, impair, and/or hinder its
transfer agent in transferring (or issuing)(electronically or in certificated form) any certificate for Conversion Shares to be
issued to the Buyer upon conversion of or otherwise pursuant to the Note as and when required by the Note and this Agreement; and
(iii) it will not fail to remove (or directs its transfer agent not to remove or impairs, delays, and/or hinders its transfer agent
from removing) any restrictive legend (or to withdraw any stop transfer instructions in respect thereof) on any certificate for
any Conversion Shares issued to the Buyer upon conversion of or otherwise pursuant to the Note as and when required by the Note
and/or this Agreement.  If the Buyer provides the Company and the Company’s transfer agent, at the cost of the Buyer,
with an opinion of counsel in form, substance and scope customary for opinions in comparable transactions, to the effect that a
public sale or transfer of such Securities may be made without registration under the 1933 Act, the Company shall permit the transfer,
and, in the case of the Conversion Shares, promptly instruct its transfer agent to issue one or more certificates, free from restrictive
legend, in such name and in such denominations as specified by the Buyer.  The Company acknowledges that a breach by it of
its obligations hereunder will cause irreparable harm to the Buyer, by vitiating the intent and purpose of the transactions contemplated
hereby.  Accordingly, the Company acknowledges that the remedy at law for a breach of its obligations under this Section 5
may be inadequate and agrees, in the event of a breach or threatened breach by the Company of the provisions of this Section, that
the Buyer shall be entitled, in addition to all other available remedies, to an injunction restraining any breach and requiring
immediate transfer, without the necessity of showing economic loss and without any bond or other security being required.

 

6.
Conditions to the Company’s Obligation
to Sell. The obligation of the Company hereunder to issue and sell the Note to the Buyer at the Closing is subject to the satisfaction,
at or before the Closing Date of each of the following conditions thereto, provided that these conditions are for the Company’s
sole benefit and may be waived by the Company at any time in its sole discretion:

 

a.
The Buyer shall have executed this Agreement
and delivered the same to the Company.

 

b.
The Buyer shall have delivered the Purchase Price
in accordance with Section 1(b) above.

 

c.
The representations and warranties of the Buyer
shall be true and correct in all material respects as of the date when made and as of the Closing Date as though made at that time
(except for representations and warranties that speak as of a specific date), and the Buyer shall have performed, satisfied and
complied in all material respects with the covenants, agreements and conditions required by this Agreement to be performed, satisfied
or complied with by the Buyer at or prior to the Closing Date. 

 

d.
No litigation, statute, rule, regulation, executive
order, decree, ruling or injunction shall have been enacted, entered, promulgated or endorsed by or in any court or governmental
authority of competent jurisdiction or any self-regulatory organization having authority over the matters contemplated hereby which
prohibits the consummation of any of the transactions contemplated by this Agreement.

 

7.
Conditions to The Buyer’s Obligation
to Purchase. The obligation of the Buyer hereunder to purchase the Note at the Closing is subject to the satisfaction, at or
before the Closing Date of each of the following conditions, provided that these conditions are for the Buyer’s sole benefit
and may be waived by the Buyer at any time in its sole discretion:

 

a.
The Company shall have executed this Agreement
and delivered the same to the Buyer.

 

b.
The Company shall have delivered to the Buyer
the duly executed Note (in such denominations as the Buyer shall request) in accordance with Section 1(b) above.

 

c.
The Irrevocable Transfer Agent Instructions,
in form and substance satisfactory to the Buyer, shall have been delivered to and acknowledged in writing by the Company’s
Transfer Agent.

 

d.
The representations and warranties of the Company
shall be true and correct in all material respects as of the date when made and as of the Closing Date as though made at such time
(except for representations and warranties that speak as of a specific date) and the Company shall have performed, satisfied and
complied in all material respects with the covenants, agreements and conditions required by this Agreement to be performed, satisfied
or complied with by the Company at or prior to the Closing Date. The Buyer shall have received a certificate or certificates, executed
by the chief executive officer of the Company, dated as of the Closing Date, to the foregoing effect and as to such other matters
as may be reasonably requested by the Buyer including, but not limited to certificates with respect to the Board of Directors’
resolutions relating to the transactions contemplated hereby.

 

e.
No litigation, statute, rule, regulation, executive
order, decree, ruling or injunction shall have been enacted, entered, promulgated or endorsed by or in any court or governmental
authority of competent jurisdiction or any self-regulatory organization having authority over the matters contemplated hereby which
prohibits the consummation of any of the transactions contemplated by this Agreement.

 

f.
No event shall have occurred which could reasonably
be expected to have a Material Adverse Effect on the Company including but not limited to a change in the 1934 Act reporting status
of the Company or the failure of the Company to be timely in its 1934 Act reporting obligations.

 

8.
Governing Law; Miscellaneous.

 

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

 

b.
Counterparts. This Agreement may be executed
in one or more counterparts, each of which shall be deemed an original but all of which shall constitute one and the same agreement
and shall become effective when counterparts have been signed by each party and delivered to the other party. 

 

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

 

d.
Severability. In the event that any provision
of this Agreement is invalid or unenforceable under any applicable statute or rule of law, then such provision shall be deemed
inoperative to the extent that it may conflict therewith and shall be deemed modified to conform with such statute or rule of law.
Any provision hereof which may prove invalid or unenforceable under any law shall not affect the validity or enforceability of
any other provision hereof.

 

e.
Entire Agreement; Amendments. This Agreement
and the instruments referenced herein contain the entire understanding of the parties with respect to the matters covered herein
and therein and, except as specifically set forth herein or therein, neither the Company nor the Buyer makes any representation,
warranty, covenant or undertaking with respect to such matters. No provision of this Agreement may be waived or amended other than
by an instrument in writing signed by the majority in interest of the Buyer.

 

f.
Notices. All notices, demands, requests,
consents, approvals, and other communications required or permitted hereunder shall be in writing and, unless otherwise specified
herein, shall be (i) personally served, (ii) deposited in the mail, registered or certified, return receipt requested, postage
prepaid, (iii) delivered by reputable air courier service with charges prepaid, or (iv) transmitted by hand delivery, telegram,
email or facsimile, addressed as set forth below or to such other address as such party shall have specified most recently by written
notice. Any notice or other communication required or permitted to be given hereunder shall be deemed effective (a) upon hand delivery
or delivery by facsimile, with accurate confirmation generated by the transmitting facsimile machine, at the address or number
designated below (if delivered on a business day during normal business hours where such notice is to be received), or the first
business day following such delivery (if delivered other than on a business day during normal business hours where such notice
is to be received) or (b) on the second business day following the date of mailing by express courier service, fully prepaid, addressed
to such address, or upon actual receipt of such mailing, whichever shall first occur. The addresses for such communications shall
be as set forth in the heading of this Agreement with a copy by fax only to (which copy shall not constitute notice) to Naidich
Wurman LLP, 111 Great Neck Road, Suite 214, Great Neck, NY 11021, Attn: Allison Naidich, facsimile: 516-466-3555, e-mail: allison@nwlaw.com.
Each party shall provide notice to the other party of any change in address.

 

g.
Successors and Assigns. This Agreement
shall be binding upon and inure to the benefit of the parties and their successors and assigns. Neither the Company nor the Buyer
shall assign this Agreement or any rights or obligations hereunder without the prior written consent of the other. Notwithstanding
the foregoing, the Buyer may assign its rights hereunder to any person that purchases Securities in a private transaction from
the Buyer or to any of its “affiliates,” as that term is defined under the 1934 Act, without the consent of the Company.

 

h.
Survival. The representations and warranties
of the Company and the agreements and covenants set forth in this Agreement shall survive the closing hereunder notwithstanding
any due diligence investigation conducted by or on behalf of the Buyer. The Company agrees to indemnify and hold harmless the Buyer
and all their officers, directors, employees and agents for loss or damage arising as a result of or related to any breach or alleged
breach by the Company of any of its representations, warranties and covenants set forth in this Agreement or any of its covenants
and obligations under this Agreement, including advancement of expenses as they are incurred.

 

i.  
Further Assurances. Each party shall do
and perform, or cause to be done and performed, all such further acts and things, and shall execute and deliver all such other
agreements, certificates, instruments and documents, as the other party may reasonably request in order to carry out the intent
and accomplish the purposes of this Agreement and the consummation of the transactions contemplated hereby.

 

j.  
No Strict Construction. The language used
in this Agreement will be deemed to be the language chosen by the parties to express their mutual intent, and no rules of strict
construction will be applied against any party.

 

k.
Remedies. The Company acknowledges that
a breach by it of its obligations hereunder will cause irreparable harm to the Buyer by vitiating the intent and purpose of the
transaction contemplated hereby. Accordingly, the Company acknowledges that the remedy at law for a breach of its obligations under
this Agreement will be inadequate and agrees, in the event of a breach or threatened breach by the Company of the provisions of
this Agreement, that the Buyer shall be entitled, in addition to all other available remedies at law or in equity, and in addition
to the penalties assessable herein, to an injunction or injunctions restraining, preventing or curing any breach of this Agreement
and to enforce specifically the terms and provisions hereof, without the necessity of showing economic loss and without any bond
or other security being required.

 

 

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IN WITNESS WHEREOF, the
undersigned Buyer and the Company have caused this Agreement to be duly executed as of the date first above written.

 

 

OZOP SURGICAL CORP.

 

By:________________________________

Michael Chermak

Chief Executive Officer

 

 

REDSTART HOLDINGS CORP.

 

By:____________________________________

Name: Gregg B. Solomon

Title: President

 

 

AGGREGATE SUBSCRIPTION AMOUNT:

 

	Aggregate Principal Amount of Note:	$38,000.00
	 	 
	Aggregate Purchase Price:	$38,000.00

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