Document:

exhibit10-15

 

Exhibit
10.15

 

July 7,
2020

 

John
Krier

 

Hand-delivered

 

Re:
Employment Agreement with Dynatronics Corporation

 

Dear
John:

 

This
letter (this “Agreement”) sets forth
the terms of your employment as Chief
Executive Officer of Dynatronics Corporation, a Utah corporation
(the “Company”). Your
employment under this Agreement is conditioned on your satisfactory
completion of certain requirements, as more fully explained
below.

 

Agreement:

 

Subject
to the following terms and conditions, it is agreed as
follows:

 

	

Duties:

	
 

	

In your capacity as Chief Executive Officer, you will perform
duties and responsibilities that are commensurate with this
position as the Company’s principal executive officer, as
well as such other duties as may be assigned to you from time to
time. You will report directly to the Chairman of the
Board of Directors of the Company (the
“Board”). You will also serve as a member of the
Board, for no additional compensation. You will have direct
supervisory responsibility for and receive reports from the
Company’s executive officers. You agree to devote your full
business time, attention and best efforts to the performance of
your duties and to the furtherance of the Company’s
interests. Notwithstanding the foregoing, nothing in this letter
shall preclude you, from devoting reasonable periods of time to
charitable and community activities, and managing personal
investment assets and performing the Other Employment described
below, provided that none of these activities interferes with the
performance of your duties hereunder or creates a conflict of
interest in the judgment of the Board. The policy of the Company is
that all outside board of
director service, including charitable and community activities, be
pre-approved by the Board. The Board’s approval of this
Agreement will include its consent for your service on the
boards of directors of the
corporations, if any, indicated in the
attached Schedule
I, “Approved Directorships”.

 

	

Location:

	
 

	

The
Company’s principal executive offices are currently located
in Eagan, Minnesota. Your duties will require you to be onsite
regularly at our Eagan, Minnesota office and to travel periodically
to our other facilities. You will remain on the payroll of the
Company’s subsidiary, Bird & Cronin, LLC.

 

 

 1

 

 

	

Start
Date:

	
 

	

Subject
to satisfaction of all of the conditions described in this
Agreement, your employment as Chief Executive Officer by the
Company will commence on July __, 2020 (the “Start
Date”).

 

	

Base
Salary:

	
 

	

In
consideration of your services, you will be paid an annual base
salary of $250,000 per year, payable in accordance with the
standard payroll practices of the Company and subject to all
withholdings and deductions as required by law.

 

	

Annual
Cash Bonus:

	
 

	

During
your employment, you will be eligible to receive an annual bonus,
payable at such times and in such amounts, as determined by the
Compensation Committee of the Board (“Compensation
Committee”), with a maximum payout opportunity of $75,000.
Actual payments will be determined based on a combination of
Company results and individual performance against the applicable
quantitative and qualitative performance goals established by the
Compensation Committee. Any annual bonus with respect to a
particular fiscal year will be paid the earlier of the date on
which such bonuses are paid to other executives of the Company for
the same fiscal period or a date which is within three (3) months
following the end of the fiscal year for which the bonus is earned.
You must remain continuously employed through the bonus payment
date to be eligible to receive an annual bonus payment for a
particular fiscal year. Your first annual bonus will be payable
after the completion of the fiscal year ending June 30,
2021.

 

	

Equity
Grants:

	
 

	

At the
next regularly scheduled meeting of the Compensation Committee
following your Start Date, the Compensation Committee will consider
a grant to you of an equity award in the form of (1) restricted
stock units (“RSUs”) for 50,000 shares, and (2) a stock
option for the purchase of 15,000 shares of common stock. The value
of the RSUs will be based on the market price of the
Company’s common stock on the date of grant. The value of the
stock options will be based on a grant date fair value generally
estimated using a Black-Scholes or similar model; the exercise
price of the options will be based on the market price of the
Company’s common stock on the date of grant. The initial
equity award above shall vest in equal amounts of twenty-five
percent (25%) each on the first, second, third and fourth
anniversaries of the date of grant of such award. In addition, for
each full fiscal year of employment, you will be eligible to
receive annual equity awards, as determined by the Compensation
Committee, in the form of RSUs, valued at $75,000, with such grants
to vest fifty percent (50%) on the date of grant and fifty percent
(50%) on the first anniversary of the date of grant. The actual
number of shares included in any future equity awards hereunder and
all other terms and conditions applicable to each such award shall
be determined by the Compensation Committee. The value of such
equity awards will be determined based on the market price of the
Company’s common stock on the date of grant of such awards.
Equity awards will be subject to the terms and conditions of the
Company’s 2015 Equity Incentive Award Plan, the 2018 Equity
Incentive Plan, or any successor plan adopted by the Company
pursuant to which such awards may be made, and the applicable award
agreement.

 

 

 2

 

 

	

Benefits
and Perquisites:

	
 

	

You
will be eligible to participate in the employee benefit plans and
programs generally available to the Company’s senior
executives, as outlined in the current “Dynatronics Benefits
Guide” which is attached as Exhibit A and incorporated herein
by reference, subject to the terms and conditions of such plans and
programs. You will also be entitled to the fringe benefits and
perquisites that may be made available from time to time to other
top executives of the Company at the discretion of the Compensation
Committee, in accordance with and subject to the eligibility and
provisions of such plans and programs. The Company reserves the
right to amend, modify or terminate any of its benefit plans or
programs at any time and for any reason.

 

	

Other
Employment:

 

 

 

 

 

 

 

 

 

Tax
Withholdings:

	
 

	

Until
April 2021, Dynatronics allows you to be a part-time consultant for
Breg based on the Consulting Agreement between you and Breg that
you provided to Dynatronics. However, you acknowledge that you will
be able to dedicate your time and energy to DYNA on a full-time
basis and fulfill all your obligations and duties. Likewise, you
may not extend your Consulting Agreement with Breg and may not
engage in any other secondary employment or consulting services
without advanced written permission from Dynatronics Board of
Directors, whose permission may be withheld for any
reason.

All
forms of compensation paid to you as an employee of the Company
shall be less all applicable withholdings.

 

	
 

	
 

	
 

	

Term;
At Will Employee:

	
 

	

Your
employment will be for no specific period of time. Rather, your
employment will be at-will, meaning that you or the Company may
terminate the employment relationship at any time, with or without
Cause (as defined below), and with or without notice and for any
reason or no particular reason. Although your compensation and
benefits may change from time to time, the at-will nature of your
employment may only be changed by an express written agreement
signed by an authorized officer of the Company.

 

	

Insurance;
Indemnification:

	
 

	

You
will be covered under the Company’s Directors and Officers
Liability policy. In addition, Utah corporation law and the
Company’s articles of incorporation and bylaws, each as
amended, provide certain indemnification rights and limitation of
liability for officers and directors of the Company performing
their duties in good faith. In addition, the Company has entered
into indemnification agreements with its Board and certain of its
executive officers.

 

	

Securities
and Exchange Commission Regulations:

	
 

	

As an
executive officer of a public company, you will be subject to rules
and regulations of the Securities and Exchange Commission
(“SEC”) and the Nasdaq Stock Exchange
(“NASDAQ”), including requirements that you report your
beneficial ownership of and trading activity involving the
Company’s equity securities and file reports with the SEC. We
will provide training on these requirements and assist you in
complying with all regulations. These regulations limit when you
may trade our securities. In addition, we are required to include
information regarding you and your education and professional
background to the SEC and NASDAQ. You will be required to comply
with these regulations. A copy of the Company’s Insider
Trading Policy is attached hereto as Exhibit B. This Agreement, and
your employment hereunder, are conditioned, among other things,
upon your representation and warranty that you are not under any
disciplinary bar or restriction from the SEC, NASDAQ or any other
regulatory agency from serving as an executive officer of a public
company.

 

 

 3

 

 

	

Representations;
Prior Restrictions and Covenants:

	
 

	

Upon
execution of this Agreement you represent that you have read and
understood, and that you accept all of the terms of employment as
provided in this Agreement, that you have not relied on any
agreements or representations, express or implied, that are not set
forth expressly in this Agreement, and that this Agreement
supersedes all prior and contemporaneous understandings,
agreements, representations and warranties, both written and oral,
with respect to the subject matter of this Agreement.

 

	

Confidentiality
and Non-Competition Agreement:

	
 

	

As a
condition of employment, you will be required to sign an agreement
that will: (i) restrict your ability to be employed by a competitor
of the Company during and for one year following termination of
your employment, and (ii) prohibit your solicitation of the
Company’s customers and employees during your employment and
for a period of two years following termination of your employment.
The form of such agreement, an “Agreement Regarding
Confidential Information, Ownership of Inventions, Non-Competition,
Customer Non-Solicitation, and Employee Non-Solicitation Covenants
and Acknowledgment of At-Will Employment”
(“Confidentiality Agreement”) is attached hereto as
Exhibit C and by this reference incorporated in and made a part
hereof.

 

	

Termination
Without Cause:

	
 

	

Notwithstanding
that your employment with the Company is “at will”, if
we terminate your employment during the first twelve (12) months
for any reason other than for Cause, you will be entitled to cash
severance in an amount equal to ninety (90) days of your
then-current annual base salary. In addition, fifty percent (50%)
of the initial equity grant previously made to you will vest
immediately upon your termination, subject to your execution, and
non-revocation, of a release of claims in a form provided by the
Company. “Cause” shall mean: (i) failure to perform
(other than any such failure resulting from incapacity due to
physical or mental illness) to the reasonable satisfaction of the
Company your duties and responsibilities assigned by the Board
which failure continues, in the reasonable judgment of the Board,
for more than fifteen (15) days following written notice of such
failure; (ii) failure to comply with any valid and legal directive
of the Board, which failure is not cured within fifteen (15) days
of notice thereof; (iii) engagement in dishonesty, illegal conduct,
or gross misconduct, which is, in each case, injurious to the
Company or its affiliates; (iv) embezzlement, misappropriation, or
fraud, whether or not related to your employment with the Company;
(v) conviction of or plea of guilty or nolo contendere to a crime
that constitutes a felony (or state law equivalent) or a crime that
constitutes a misdemeanor involving moral turpitude; (vi) breach of
the Confidentiality Agreement to be entered into by you, unless
such breach is cured pursuant to the terms of such agreement; (vii)
material breach of any material obligation under this or any other
written agreement between you and the Company which continues
without cure for a period of fifteen (15) days following notice
thereof; or (viii) any material failure to comply with the
Company’s policies or rules, as they may be in effect from
time to time during the term of your employment through your
willful misconduct or negligence.

 

 

 4

 

 

	

Section
409A and Section 280G:

	
 

	

Payments
in event of termination, including in the event of a Change in
Control, shall be subject to applicable tax law and regulations,
including, without limitation, Section 409A and Section 280G of the
Internal Revenue Code, as amended, as provided in the release
agreement to be executed at the time of termination, provided, that
we mutually agree to cooperate to minimize the amount of tax
payable by both you and the Company in connection with such
payments.

 

	

Clawback:

	
 

	

Any
incentive-based or other compensation, paid to you under this
Agreement or any other agreement or arrangement with the Company
which is subject to recovery under any law, government regulation,
or stock exchange listing requirement, will be subject to such
deductions and clawback as may be required to be made pursuant to
such law, government regulation, or stock exchange listing
requirement (whether currently in existence or later adopted) or
any policy established by the Company pursuant to any such law,
government regulation or stock exchange listing
requirement.

 

	

Governing
Law, Severability, Modification, Execution:

	
 

	

This
Agreement shall be governed by the laws of the State of New York,
without regard to conflict of law principles. In the event any of
the provisions hereof (including any portion thereof) are held by a
court of competent jurisdiction to be invalid, illegal, void or
otherwise unenforceable, the remaining provisions shall remain
enforceable to the fullest extent permitted by law. No supplement,
modification or amendment shall be binding unless executed in
writing by both you and the Company. No waiver of any provision
shall be binding unless in writing signed by the party against whom
enforcement of the waiver is sought, and no such waiver shall
operate as a waiver of any other provisions hereof (whether or not
similar), nor shall such waiver constitute a continuing
waiver.

	
 

	
 

	
 

Your
employment under this Agreement is contingent upon the following
conditions precedent, each of which must be completed to the
satisfaction of the Company if not expressly waived in advance by
the Company in writing:

 

  5

 

 

1. Supplementation, as
necessary, of applicable U.S. right to work documentation on file
with the Company (including, for example, Form I-9 and referenced
documentation verifying your identity and work
authorization).

 

2. Continued
compliance with Company employment testing including drug screening
and, if reasonably required, satisfactory completion of a
background investigation, for which the required notice and consent
forms will be provided to you.

 

3. Your execution of
the Company’s (A) Agreement Regarding Confidential
Information, Ownership of Inventions, Non-Competition, Customer
Non-Solicitation, and Employee Non-Solicitation Covenants and
Acknowledgment of At-Will Employment, (B) Insider Trading Policy
Acknowledgement, (C) Officer/Director Questionnaire, (D)
Indemnification Agreement.

 

4. Final approval of
the Board of all terms and conditions of your employment
hereunder.

 

5. Your execution of
this Agreement before the close of business on July 7,
2020.

 

Please
sign below and return a copy of this Agreement to me.

 

DYNATRONICS CORPORATION

 

 

 

Erin S.
Enright,

Chairman of the Board of Directors

 

 

 

Accepted and Agreed

 

/s/ John Krier

John
Krier

Date:
July 7, 2020

 

 

 

Signature
Page to Employment Agreement of John Krier

Dynatronics
Corporationexhibit10-16

 

Exhibit 10.16

 

 

CERTAIN PORTIONS OF THE EXHIBIT THAT ARE NOT MATERIAL AND WOULD BE
COMPETITIVELY HARMFUL IF PUBLICLY DISCLOSED HAVE BEEN REDACTED
PURSUANT TO ITEM 601(b)(10)(iv) OF REGULATION S-K. [***] INDICATES
THAT INFORMATION HAS BEEN REDACTED.

 

Brian
Baker

President
& CEO

Dynatronics
Corporation

7030
Park Center Dr.

Salt
Lake City, Utah 84121

 

 

This
document constitutes a formal Master Service Agreement (the
“Agreement”) between Dynatronics
(“Customer”) and Millstone Medical Outsourcing, LLC
(“Millstone”). This Agreement will begin as of the date
that this Agreement is executed by both parties and shall remain in
effect for an initial term of three (3) years from that date and
may be extended or terminated pursuant to the terms of this
Agreement.

 

The
specific details of engineering, packaging, audit or other service
arrangements will be detailed in one or more Statements of Work,
Quality Agreements, and/or Master Batch Record, all of which are
hereby incorporated by reference into this Agreement. Pricing will
be set forth in each applicable Statement of Work.

 

 

Standard Terms and Conditions

 

1. 

Performance. Millstone will
provide Customer with all services and work set forth in the
Statements of Work and/or Master Batch Record (the
“Services”) by and between the parties to this
Agreement in consideration of the fees set forth in each Statement
of Work. From time to time, Customer may provide Millstone with a
Purchase Order (requesting the performance of Services and/or
additional services not otherwise set forth in a Statement of Work
(any such additional services shall be included in the definition
of Services). This Agreement, together with any duly-executed
Quality Agreement, Statement(s) of Work, Master Batch Record,
Non-Disclosure Agreement and any Purchase Orders taken together
constitute this Agreement.

 

2.

Term and Termination. This
Agreement shall commence as of the date that this Agreement is
executed by both parties (the “Effective Date”) and
shall extend for an initial period of three (3) years from the
Effective Date and shall thereafter automatically renew each year
for successive one (1) year terms unless terminated earlier in
accordance with this Agreement; provided, however, that the terms
and conditions of this Agreement shall remain in effect beyond the
expiration of the current term or any termination pursuant to
section 2(b)(iii) until the expiration of any Statements of Work or
Purchase Orders outstanding as of the date of termination and the
full and complete payment by Customer for Services provided
thereunder. Any reference in this Agreement to “term”
shall refer to the current term whether it is the initial three (3)
year term or any renewal term.

 

a)

Either party may
terminate this Agreement (i) upon not less than [***] days written
notice in the event the other party materially breaches its
obligations hereunder, unless such breach has been cured within
such [***] day period, or within a reasonably extended period if
Customer has begun to cure the breach and Millstone has agreed to
an extended cure period, or (ii) upon written notice, effective
immediately, if the breach is causing continuing damage or loss to
the non-breaching party and such breach is incapable of cure.
Failure to make timely payment for the Services provided by
Millstone hereunder shall constitute a material breach of this
Agreement.

 

 1

 

 

CERTAIN PORTIONS OF THE EXHIBIT THAT ARE NOT MATERIAL AND WOULD BE
COMPETITIVELY HARMFUL IF PUBLICLY DISCLOSED HAVE BEEN REDACTED
PURSUANT TO ITEM 601(b)(10)(iv) OF REGULATION S-K. [***] INDICATES
THAT INFORMATION HAS BEEN REDACTED. 

 

b)

Either party may
terminate this Agreement by written notice if:

 

i.

the other party
petitions for relief under any bankruptcy law or if any bankruptcy
petition should be filed against the other party and the same is
not discharged within thirty (30) days; the other party is the
subject of an involuntary petition in bankruptcy; a receiver is
appointed for the business of the other party; the other party
makes an assignment for the benefit of creditors; the other party
is unable to pay its debts as they fall due; the other party
altogether ceases to do business;

 

ii.

total destruction
of the premises where the Services are provided or partial
destruction of such premises if the partial destruction prohibits
Millstone from satisfactorily performing the Services;
or

 

iii.

the terminating
party provides at least [***] days prior written notice to the
other party. The terminating party may terminate with or without
cause if such termination is made pursuant to this Section
2(b)(iii).

 

c)

In the event either
party exercises its right to termination for any reason pursuant to
this Agreement, Customer shall pay Millstone for the Services
performed up to the date of termination within thirty (30) business
days of the date of termination and for the amount of any Services
provided after the date of termination, as applicable, pursuant to
Section 2(a) and in accordance with the invoices pertaining to such
Services.

 

d)

Any conditions of
this Agreement which by their terms or nature extend beyond the
termination or cancellation of this Agreement shall remain in
effect and shall apply to the parties' respective successors and
permitted assignees.

 

3.

Conflicts. In the event of an
express conflict between a provision of this Agreement, a
Statement(s) of Work, and/or a Purchase Order, this Agreement shall
prevail over the Statement(s) of Work and the Statement(s) of Work
shall prevail over any Purchase Order. The terms of this Agreement
shall prevail over the terms of any Quality Agreement. In the event
of an express conflict among provisions of this Agreement and any
other manner of subsequent agreement between Customer and Millstone
with respect to the subject matter hereof, the terms of this
Agreement, in the order set forth above in this Section 3, shall
prevail. Notwithstanding the foregoing, if any subsequent
agreement, including, without limitation, a Statement of Work or
Purchase Order, expressly references this Agreement and states that
a specific term(s) or provision(s) of the subsequent agreement
shall prevail, then such specific term(s) or provision(s) of the
subsequent agreement shall prevail over the terms of this
Agreement.

 

4.

Pricing and
Billing.

 

As
consideration for Millstone’s performance hereunder, Customer
will pay to Millstone all fees based upon pricing and billing terms
and conditions for the Services as set forth in the Statement(s) of
Work or accompanying schedules or attachments.

 

Millstone will
provide Customer with a monthly or weekly invoice for all Services
performed during the particular period to which a particular
invoice applies. All periodic charges will be invoiced at the
beginning of each month or period. For validation services,
Customer shall prepay fees for the writing of documents. Execution
and test fees will be invoiced when samples are sent out to the
third party test facilities. If test costs are greater than the
estimate provided, Millstone will pass through the difference to
the Customer. Customer will pay such invoices via EFT within thirty
(30) days after receipt thereof. With all past due amounts,
interest shall accrue at a rate of [***] per annum.

 

 2

 

 

CERTAIN PORTIONS OF THE EXHIBIT THAT ARE NOT MATERIAL AND WOULD BE
COMPETITIVELY HARMFUL IF PUBLICLY DISCLOSED HAVE BEEN REDACTED
PURSUANT TO ITEM 601(b)(10)(iv) OF REGULATION S-K. [***] INDICATES
THAT INFORMATION HAS BEEN REDACTED. 

 

5.

Limitation of
Liability/Customer’s Risk of Loss.

 

(a)

Limitation of Liability Generally and
Customer’s Risk of Loss. Millstone’s aggregate
maximum liability to Customer with respect to any expense, damages,
loss, injury or liability of any kind or from any cause whatsoever,
and regardless of the form or cause of action shall not exceed
Millstone’s net service revenues actually collected by
Millstone from Company in the six (6) months immediately preceding
the event giving rise to such liability. Millstone shall be liable
only for proven actual damages incurred as a direct result of
Millstone’s material breach of this Agreement, and not for
any other reason except Millstone’s gross negligence, willful
misconduct. MILLSTONE SHALL NOT BE LIABLE FOR ANY INDIRECT,
INCIDENTAL, CONSEQUENTIAL, PUNITIVE, OR SPECIAL LOSSES OR DAMAGES
TO CUSTOMER, INCLUDING, WITHOUT LIMITATION, ANY LOSS OF PROFIT OR
LOSS OF USE EVEN IF MILLSTONE IS ADVISED OF THE POSSIBILITY OF SUCH
LOSSES OR DAMAGES. Customer may not exercise any right of set-off
with respect to payments due to Millstone. Customer acknowledges
and agrees that all products, materials, and any other Customer
property shall remain owned by Customer at all times and Customer
shall be responsible for notifying its creditors, as applicable,
and for insuring products, implants, kits and any other Customer
property while at the Millstone facilities, in transit, or stored
at off-site locations. AS SUCH, NOTWITHSTANDING ANY PROVISION
HEREIN TO THE CONTRARY, CUSTOMER EXPRESSLY ACKNOWLEDGES AND AGREES
THAT CUSTOMER ASSUMES THE RISK OF LOSS AND MILLSTONE SHALL HAVE NO
LIABILITY FOR LOSS OF OR DAMAGE TO ANY OR ALL CUSTOMER PROPERTY IN
MILLSTONE’S FACILITIES, IN TRANSIT, OR STORED OFF-SITE, FOR
LOSS RESULTING FROM ANY REASON, INCLUDING WITHOUT LIMITATION, LOSS
RESULTING FROM FIRE OR OTHER CASUALTY, FAILURE OF MILLSTONE’S
ENVIRONMENTAL CONTROLS, OR ANY CAUSE REASONABLY BEYOND THE CONTROL
OF MILLSTONE (INCLUDING, WITHOUT LIMITATION, ACTS OF NATURE AND
CHANGES IN APPLICABLE LAWS OR REGULATIONS), EXCEPT THAT THIS
PROVISION SHALL NOT APPLY TO LOSS RESULTING FROM MILLSTONE’S
GROSS NEGLIGENCE OR WILLFUL MISCONDUCT.

 

(b)

Special Limitation of Liability for
Shipment or Packaging Failure. Millstone will process all
shipments in accordance with client-approved documentation and
client-supplied shipment configuration validations when applicable.
Millstone will use best efforts to ensure product safety and
integrity in preparing product for shipment and ship product via
the requested shipment method. Millstone’s aggregate maximum
liability to Customer with respect to any expense, damages, loss,
injury or liability to the extent caused by any negligence or
willful misconduct of a third party courier (e.g. Federal Express)
shall not exceed [***] per shipment, subject to the aggregate limit
set forth in Section 5(a). Further, Millstone shall not be liable
for damage to Customer’s products other than (i) for proven
actual losses and damages incurred as a direct result of
Millstone’s failure to comply with client-approved
documentation and client-supplied shipment configuration
validations as set forth in any Statements of Work or Quality
Agreement, (ii) Millstone’s failure to comply with packing
and shipping industry standards, or (iii) Millstone’s gross
negligence.

 

 3

 

 

CERTAIN PORTIONS OF THE EXHIBIT THAT ARE NOT MATERIAL AND WOULD BE
COMPETITIVELY HARMFUL IF PUBLICLY DISCLOSED HAVE BEEN REDACTED
PURSUANT TO ITEM 601(b)(10)(iv) OF REGULATION S-K. [***] INDICATES
THAT INFORMATION HAS BEEN REDACTED. 

 

(c)

No Liability for Adherence to Customer
Instructions. Notwithstanding any provision herein to the
contrary, Millstone shall have no liability to Customer for any
claims, losses or expenses to the extent directly caused by
Millstone’s adherence to the instructions and/or procedures
designated in writing by and specific to Customer (whether set
forth in a Statement of Work, Quality Agreement or
otherwise).

 

6.

Indemnity.

 

a)

Millstone agrees
that it shall indemnify and hold harmless Customer, its
subsidiaries, affiliates, successors, assigns, officers, directors,
managers, agents and representatives, (collectively, "Customer
Indemnified Parties") to the fullest extent permitted by law, from
and against all losses, liabilities, damages, and expenses
(including reasonable attorneys’ fees) incurred by Customer
Indemnified Parties in any third party claim, action, or lawsuit,
to the extent such losses, liabilities, damages, and expenses are
finally determined by a court of competent jurisdiction (or by
specific reference in a settlement of litigation consented to by
Millstone) to have been directly caused by Millstone’s breach
of a material obligation of Millstone under this Agreement, except
to the extent that such losses, liabilities, damages, and expenses
resulted from Customer’s negligence or willful misconduct. If
Customer seeks indemnification hereunder from Millstone with
respect to a third party claim, Customer will notify Millstone as
promptly as practicable and give Millstone an opportunity to defend
the claim. Customer will extend reasonable cooperation in
connection with such defense. If Millstone fails to defend the
claim within a reasonable time, Customer may assume the defense
thereof, and Millstone will repay Customer for all expenses
incurred in connection with such defense (including reasonable
attorneys’ fees, settlement payments and payments of
judgments) until Millstone assumes such defense. The foregoing
indemnity obligations will extend only to the losses, costs or
expenses actually suffered by Customer, reduced by any offsetting
funds or services received from any third party including any
insurer. Customer Indemnified Parties must approve any resolution
or course of action in a matter that could directly or indirectly
have any adverse effect on Customer Indemnified Parties or could
serve as a precedent for other matters. Millstone’s
indemnification obligations shall be subject to the terms and
limitations set forth in Section 5 and Section 6(c).

 

b)

Customer agrees
that it shall indemnify and hold harmless Millstone, its
subsidiaries, affiliates, successors, assigns, officers, directors,
managers, employees, agents and representatives (collectively,
“Millstone Indemnified Parties”), to the fullest extent
permitted by law, from and against all losses, liabilities,
damages, and expenses incurred by Millstone Indemnified Parties in
any third party claim, action, or lawsuit, to the extent such
losses, liabilities, damages, and expenses are directly caused by
(i) any breach of or failure by Customer to perform any of its
representations, warranties, covenants or material obligations set
forth in this Agreement, (ii) Customer’s property or products
violating a third party’s rights, including without
limitation, a third party’s intellectual property rights,
(iii) Customer’s breach or violation of any law, regulation,
or ruling, or (iv) any act, error or omission (active or passive)
constituting negligence or willful misconduct by Customer or its
officers, directors, employees, agents, or affiliates. However,
Customer has no obligation to indemnify Millstone Indemnified
Parties to the extent the liability for which Millstone Indemnified
Parties seek indemnification was caused by the negligence or
willful misconduct of any Millstone Indemnified Parties. Customer
will respond promptly to any matter described above, and defend
Millstone Indemnified Parties. Customer will reimburse Millstone
Indemnified Parties for all costs of defending the matter,
including reasonable attorneys’ fees, incurred by Millstone
Indemnified Parties if Customer or Customer’s insurer does
not assume defense because of actual or potential conflicts of
interest. Millstone Indemnified Parties must approve any resolution
or course of action in a matter that could directly or indirectly
have any adverse effect on Millstone Indemnified Parties or could
serve as a precedent for other matters.

 

 4

 

 

CERTAIN PORTIONS OF THE EXHIBIT THAT ARE NOT MATERIAL AND WOULD BE
COMPETITIVELY HARMFUL IF PUBLICLY DISCLOSED HAVE BEEN REDACTED
PURSUANT TO ITEM 601(b)(10)(iv) OF REGULATION S-K. [***] INDICATES
THAT INFORMATION HAS BEEN REDACTED. 

 

c)

Notwithstanding
anything herein to the contrary, Millstone shall have no liability
or obligation to indemnify any Customer Indemnified Parties for any
claims, losses or expenses arising out of Millstone’s acts or
omissions, if such acts or omissions are a result of
Millstone’s adherence to the risk characteristics and/or
procedures designated or otherwise agreed to by Customer in any
Statements of Work, Quality Agreement, Purchase Order, Master Batch
Record and/or other valid agreement between Customer and
Millstone.

 

7.

Insurance. Millstone shall, at
its own cost and expense, maintain insurance in form and coverage
in accordance with industry standard business practices and
standards. Millstone shall furnish Customer with proof of such
insurance upon Customer’s reasonable request. Customer shall,
at its own cost and expense, maintain insurance in form and
coverage in accordance with industry standard business practices
and standards, but in any event, with minimum liability limits of
[***]. Such coverage limit shall in no way limit Customer’s
liability to Millstone hereunder. As set forth in Section 5,
Customer shall be responsible for insuring all of Customer’s
products, implants, kits and any other Customer property while at
Millstone facilities, in transit, or stored at off-site locations.
Customer shall provide certificate(s) of insurance to Millstone
evidencing compliance with the foregoing upon Millstone’s
reasonable request. Customer shall provide at least thirty (30)
days’ written notice to Millstone of any cancellation of any
of Customer’s insurance policies relevant to coverage for
indemnification, risk of loss, or any other liability of Customer
hereunder. If either party neglects to maintain sufficient
insurance, it shall be directly responsible to the other for any
losses arising hereunder. Customer shall not require Millstone to
include Customer as an “additional insured” or
“loss payee” on any Millstone insurance
policy.

 

8.

Compliance with Laws. Each
party hereto shall comply strictly with all applicable federal,
state and local laws, rules and regulations (collectively,
“Laws”) imposed by any governmental authority on any
activity of either party hereunder, and this Agreement is made
subject to all such Laws in effect now or in the
future.

 

9.

Non-solicitation. During the
term of this Agreement and for a period of one (1) year thereafter,
Customer shall not solicit, or use temporary services contractors
to solicit any employees or contractors of Millstone directly or
indirectly rendering services hereunder. In addition to its other
remedies at law and in equity, Millstone shall be entitled to seek
injunctive relief to enforce this provision or any other provision
set forth in this Agreement.

 

10.

Proprietary Information;
Confidentiality and Non-Disclosure. Millstone and Customer
agree to hold in confidence, any information which has been
designated, either in writing or verbally, by the disclosing party
as confidential information or is otherwise by its nature
confidential or proprietary to the disclosing party, including but
not limited to financial and other business information
(“Proprietary Information”). Proprietary Information
will be maintained in confidence for the term of this Agreement and
thereafter. All Proprietary Information will be returned by the
receiving party to the disclosing party when it is no longer needed
or upon the termination of this Agreement, whichever comes first.
Proprietary Information does not include (i) information lawfully
in the possession of the receiving party prior to the disclosure by
the disclosing party, (ii) information which becomes known to the
general public through no act or omission of the receiving party
and (iii) information which is lawfully disclosed to the receiving
party by a third party. Neither Millstone nor Customer shall use,
reproduce, copy or disclose any of the other party’s
Proprietary Information, in whole or in part, without the written
consent of the other party, except that Proprietary Information of
one party may be used, reproduced, copied or disclosed to others by
the other party on a confidential basis when such use,
reproduction, copy or disclosure is necessary for the receiving
party to perform Services, any Additional Services and/or any other
covenants or other obligations under this Agreement.

 

 5

 

 

CERTAIN PORTIONS OF THE EXHIBIT THAT ARE NOT MATERIAL AND WOULD BE
COMPETITIVELY HARMFUL IF PUBLICLY DISCLOSED HAVE BEEN REDACTED
PURSUANT TO ITEM 601(b)(10)(iv) OF REGULATION S-K. [***] INDICATES
THAT INFORMATION HAS BEEN REDACTED. 

 

11. 

Assignment; Subcontractors.
Customer hereby consents to the assignment and transfer of this
Agreement by Millstone to any third party in connection with the
transfer of substantially all of Millstone’s assets, the sale
of a majority of Millstone’s outstanding membership or other
ownership interests, or a merger in which Millstone is not the
surviving entity. No other assignment or transfer of this Agreement
shall occur without the prior written consent of the
non-transferring party. Millstone may use one or more
subcontractors in the performances of Services under this
Agreement; provided, however, that Millstone shall ensure that such
subcontractors shall abide by and comply with the terms of this
Agreement, as applicable, and further provided that the use of such
subcontractors shall not relieve Millstone from any obligations
hereunder and Millstone shall be responsible for such
subcontractors' performance.

 

12.
Representations and
Warranties.

 

a)

Millstone
represents and warrants that all Services shall be performed in a
workmanlike manner and as may be further defined in the
Statement(s) of Work, a Purchase Order, the Master Batch Record
and/or Quality Agreement. Millstone shall maintain the premises
where the Services are provided in a neat, clean and orderly
manner.

 

b)

Except as provided
in Section 13(a) above, Millstone makes no representations or
warranties to Customer, express or implied, including without
limitation implied warranties of result, infringement,
merchantability or fitness for a particular purpose, design or use,
or implied warranties arising from course of dealing, usage and
trade or course of performance.

 

c)

Customer represents
and warrants to Millstone that all incoming shipments of Customer
products to Millstone have been adequately decontaminated prior to
shipment to Millstone, per federal regulatory requirements.
Customer represents and warrants that all goods shipped from
Customer facilities to Millstone are free of blood borne pathogens
and other harmful contaminants prior to forwarding to
Millstone.

 

d)

Customer represents
and warrants that the products, materials, and other Customer
property, provided to Millstone in connection with performance of
the Services, including, without limitation, the design or
operation of such products, materials, and other Customer property,
do not infringe upon, misappropriate or otherwise violate any right
of any third party, including, but not limited to, intellectual
property rights of a third party.

 

e)

Customer represents
and warrants that it is in compliance with the insurance coverage
requirements set forth in Section 7.

 

f)

Customer
acknowledges and agrees that this Agreement applies only to the
processing of Customer products; no other Customer company,
division or affiliate of Customer is covered except as may be set
forth in Section 6 or except as otherwise permitted under this
Agreement.

 

13.
Invalid Provisions.
If any provision of this Agreement is held to be unenforceable, the
unenforceable provision shall be construed as nearly as possible to
reflect the original intent of the parties and the remaining
provisions shall remain in full force and effect.

 

14.

No Third Party Reliance. Except
as otherwise expressly set forth herein, the terms and conditions
set forth in this Agreement are not intended for, nor shall they be
for the benefit of or enforceable by, any person or entity that is
not a party to this Agreement.

 

 6

 

 

CERTAIN PORTIONS OF THE EXHIBIT THAT ARE NOT MATERIAL AND WOULD BE
COMPETITIVELY HARMFUL IF PUBLICLY DISCLOSED HAVE BEEN REDACTED
PURSUANT TO ITEM 601(b)(10)(iv) OF REGULATION S-K. [***] INDICATES
THAT INFORMATION HAS BEEN REDACTED. 

 

15.

Governing Law; Disputes; Venue.
This Agreement will be subject to the laws of the Commonwealth of
Massachusetts without regard to its choice of law principles. Any
and all disputes arising hereunder shall be resolved by binding
arbitration before a single arbitrator in Boston, Massachusetts in
accordance with the rules of the American Arbitration Association.
Each party hereby consents to the selection of such exclusive
venue. The costs of such arbitrator shall be paid one-half by
Millstone and one-half by Customer, unless the arbitrator imposes
an alternative arrangement. The ruling of such arbitrator shall be
final, binding and not subject to appeal. The arbitrator shall have
the authority to order the reimbursement of legal fees and expenses
in connection with its ruling.

 

16.

Entire Agreement; Counterparts;
Amendments. This Agreement, together with its applicable
attachments and exhibits, constitutes one and the same legally
binding instrument and the entire agreement between the parties
with respect to its subject matter and supersedes all prior offers,
contracts, agreements, representations, and understandings made to
or with Customer, whether oral or written, relating to the subject
matter hereof. All amendments to this Agreement shall be in writing
and signed by authorized representatives of the parties. The
Agreement may be executed in counterparts and each such counterpart
shall constitute a single agreement. Executed signature pages
transmitted by facsimile or electronically shall be deemed original
signatures.

 

17.

Independent Contractors. All
parties shall be independent contractors, maintaining complete
control over their respective personnel and operations. Nothing
herein shall be deemed to constitute any party to be the partner of
the other, or to constitute either the agent or legal
representative of the other, or to create any fiduciary
relationship between them.

 

18.

Notices. Any notice, proposal
or communication required or permitted to be given hereunder shall
be given in writing and shall be delivered (i) in person, (ii) by
registered mail, postage prepaid, return receipt requested, or
(iii) by facsimile, addressed as follows:

 

To
Millstone:

580
Commerce Drive

Fall
River, MA 02720

Fax:
508-679-8414

Attn:
Karl Neuberger

 

To
Customer:

7030
Park City Dr.

Salt
Lake City, Utah 84121

Attn:
Brian Baker

 

19.

Force Majeure. If because of
force majeure, Millstone is unable to carry out any of its
obligations under this Agreement and if Millstone promptly notifies
Customer in writing, expressly claiming such force majeure,
Millstone’s obligations under the Contract shall be suspended
to the extent made necessary by such force majeure. All costs of
Customer incurred during a force majeure suspension of the
Agreement, including but not limited to the value of the product
and all costs concerning the manufacture and delivery of the
product, shall be solely at Customer’s expense, and Millstone
disclaims all liability for any costs incurred by Customer. As used
herein, “force majeure” means any cause reasonably
beyond the control and without fault or negligence of Millstone,
including but not limited to fire, flood, lightening, explosion,
war, strike, embargo, labor dispute, government requirement, power
outage, civil or military authority, act of god or nature,
inability to secure materials or transportation facilities, act or
omission of carriers or suppliers, acts or failures to act of any
governmental authority, or any other causes beyond
Millstone’s reasonable control whether or not similar to the
foregoing, which wholly or substantially prevents the packing,
transportation, loading, unloading, delivery, or storing of the
product.

 

 7

 

 

CERTAIN PORTIONS OF THE EXHIBIT THAT ARE NOT MATERIAL AND WOULD BE
COMPETITIVELY HARMFUL IF PUBLICLY DISCLOSED HAVE BEEN REDACTED
PURSUANT TO ITEM 601(b)(10)(iv) OF REGULATION S-K. [***] INDICATES
THAT INFORMATION HAS BEEN
REDACTED.  

 

20.

Waiver. The failure of any
party to insist in any one instance or more upon strict performance
of any of the terms and conditions hereof, or to exercise any right
or privilege herein conferred, shall not be construed as a waiver
of such terms, conditions, rights or privileges, but same shall
continue to remain in full force and effect. Any waiver by any
party of any violation of, reach of or default under any provision
of this Agreement shall be in writing, and unless such written
waiver otherwise specifically stipulates, shall not be construed
as, or constitute, a continuing waiver of such provision, or waiver
of any other violation of, breach of or default under any other
provision of this Agreement.

 

21.

Non-Exclusive Agreement.
Nothing in this Agreement shall prohibit Millstone from performing
like or similar services for any other person or
entity.

 

22.

Headings. Section headings in
this Agreement included only as a matter of convenience for
reference only and shall not be given any effect in construing this
Agreement.

 

 

 

 

IN
WITNESS WHEREOF, the parties hereto have caused this Agreement to
be executed as of the date set forth below by their respective duly
authorized representatives.

 

 

 

Accepted
and Agreed to:

 

	

 

	

Dynatronics
Corporation 

	
 

	

 

	

Millstone
Medical Outsourcing, LLC 

	

By:

	

/s/
Brian Baker

	
 

	

By:

	

/s/
Karl Neuberger

	

Name:

	

Brian
Baker

	
 

	

Name:

	

Karl
Neuberger

	

Title:

	

President
& CEO

	
 

	

Title:

	

Chief
Executive Officer

	

Date: 

	

July 8,
2020 

	
 

	

Date: 

	

July 8, 2020  

 

 

  8

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