Document:

Exhibit 10.5

		

			Exhibit 10.5

		

		
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			«Grant_Date»
		

		
			 
		

		
			«Full_Name»
		

		
			IntriCon Corporation
		

		
			1260 Red Fox Road
		

		
			Arden Hills, MN 55112
		

		
			 
		

		
			Dear «M_1st_Name»:
		

		
			 
		

		
			I am pleased to inform you that on «Grant_Date» the Compensation Committee (the “Committee”) of the Board of Directors of Intricon Corporation granted you Performance Restricted Stock Units for shares of Common Stock of the Company (“PRSUs”) under the Company’s Amended and Restated 2015 Equity Incentive Plan (the “Plan”), subject to the restrictions and on the terms and conditions set forth in this Award and the Plan. The actual number of shares, if any, that you will receive (“Shares”) will be determined upon the Company’s level of achievement of the performance standards set forth on Exhibit A hereto (“Performance Standards”) during the performance period set forth on Exhibit A hereto (“Performance Period”) as determined by the Committee. Capitalized terms used but not defined in this Award shall have the meanings set forth in the Plan.
		

		
			 
		

		
			1.    Vesting of PRSUs.
		

		
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			(a)    Except as provided in Paragraphs 2(b), 2(c) and 3, the vesting of the PRSUs is contingent upon (i) the Company’s level of achievement of the Performance Standards during the Performance Period, and (ii) your continued employment with the Company and its Subsidiaries through the Vesting Date (as defined below). Any PRSUs that do not become vested as provided in Exhibit A (or Paragraphs 2(b), 2(c) and 3) shall be forfeited. PRSUs will vest and Shares will be delivered only upon certification by the Committee of the level of achievement of the Performance Standards previously established and approved by the Committee for the Performance Period (the date of any such certification, the “Vesting Date”). 
		

		
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			2.    Termination of Employment. Anything in the Plan or any employment agreement to the contrary notwithstanding:
		

		
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			(a)    in the event of the termination of your employment prior to the Vesting Date, you shall forfeit any unvested PRSUs and shall not have any right to payment in respect thereof, unless otherwise provided in Paragraph 2(b), Paragraph 2(c) or Paragraph 3 below.
		

		
			 
		

		

		

		 

 

		

			«Full_Name»

		

		

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		(b)    if your employment terminates prior to the Vesting Date on account of death or Disability, your PRSUs will vest in full at the Target level (as set forth on Exhibit A).
		

		
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			(c)    if your employment terminates prior to the Vesting Date on account of your Retirement or Involuntary Termination (as defined in your employment agreement, if any), a pro rata portion (based on the number of days of between the date of this letter and the date of your Retirement or Involuntary Termination) divided by the number of days between the date of this letter and the last day of the Performance Period) of your PRSUs will vest and Shares will be delivered upon certification by the Committee of the level of achievement of the Performance Standards previously established and approved by the Committee for the Performance Period as provided in the last sentence of Section 1; provided, however, if the date of your Retirement or Involuntary Termination is after the last day of the Performance Period, no pro ration shall be required.
		

		
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			3.    Change in Control. Section 6.3 of the Plan shall govern the vesting of PRSUs in the event of a Change in Control prior to the Vesting Date.
		

		
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			4.    Securities Laws. The Committee may from time to time impose any conditions on the Shares issuable with respect to PRSUs as it deems necessary or advisable to comply with the then-existing requirements of federal and state securities laws and regulations, including Rule 16b-3 (or any similar rule) of the Securities and Exchange Commission, and to ensure that Shares are issued and resold in compliance with such laws and regulations.
		

		
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			5.    Delivery of Shares.  
		

		
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			(a)    Within ten (10) business days following the Vesting Date (including any accelerated vesting date provided in this Award or the Plan), the Company shall issue to you, either by book-entry registration or issuance of a stock certificate or certificates, a number of shares of Common Stock equal to the number of PRSUs determined to be due hereunder; provided that, other than with respect to a Vesting Date that arises as a result of Section 2(b), the shares of Common Stock shall be delivered to you in the calendar year immediately following the expiration of the Performance Period. Any shares of Common Stock issued to you hereunder shall be fully paid and non-assessable.
		

		
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			(b)    At the time of vesting, the Company shall withhold from any shares of Common Stock deliverable in payment of the PRSUs a number of shares of Common Stock having a value equal to the minimum amount of income and employment taxes required to be withheld under applicable laws and regulations, and pay the amount of such withholding taxes in cash to the appropriate taxing authorities. Any fractional shares resulting from the payment of the withholding amounts shall be liquidated and paid in cash to the U.S. Treasury as additional federal income tax withholding for you. You shall be responsible for any withholding taxes not satisfied by means of such mandatory withholding and for all taxes in excess of such withholding taxes that may be due upon vesting of the PRSUs. Notwithstanding the foregoing, prior to the date that such withholding taxes are due to the appropriate taxing authorities as a result of the vesting of the PRSUs, you may pay to the Company in cash or cash equivalents the amount of such withholding taxes, in which case such withholding taxes will not be withheld from the Shares deliverable in payment of the PRSUs.
		

		
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			6.    Restriction on Transfer of PRSUs. PRSUs may not be assigned, sold, exchanged, transferred, pledged, hypothecated or otherwise disposed of except by will or the laws of descent and distribution. 
		

		
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			7.    Award Not to Affect Employment. This Award shall not confer upon you any right to continue as an employee, officer or director of the Company or any subsidiary of the Company or interfere in any way with the right of the Company or any subsidiary to terminate your employment or service for any or no reason.
		

		

		

		 

		

			1260 Red Fox Road ● Arden Hills, MN 55112 ● Tel: 651-636-9770 ● Fax: 651-357-1097 ● www.IntriCon.com

		

		

			

		

 

		

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			8.    No Rights as a Shareholder. You shall not have any rights as a shareholder, including voting or dividend rights, with respect to shares of Common Stock covered by this Award until you become the holder of record with respect to such shares in accordance with this Award and the Plan. No adjustment shall be made for dividends or other rights for which the record date is prior to the Vesting Date.
		

		
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			9.    Miscellaneous.
		

		
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			(a)    The Company will use your address as reflected in the Company’s personnel records, or such other address as you may provide to the Company by written notice, as the address to which notice, demands and other communications to be given or delivered under or by reason of the provisions hereof will be sent. 
		

		
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			(b)    This Award may be executed in one or more counterparts, all of which taken together will constitute one and the same instrument.
		

		
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			(c)    The validity, performance, construction and effect of this Award shall be governed by the laws of the Commonwealth of Pennsylvania, without giving effect to principles of conflicts of law.
		

		
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			(d)    You hereby irrevocably and unconditionally consent to submit to the exclusive jurisdiction of the courts of the State of Minnesota and of the United States of America, in each case located in Minneapolis, Minnesota, for any actions, suits or proceedings arising out of or relating to this Award and the transactions contemplated hereby (“Litigation”) and agree not to commence any Litigation except in any such court, and further agree that service of process, summons, notice or document by U.S. registered mail to your address shall be effective service of process for any Litigation brought against you in any such court. Each party hereby irrevocably and unconditionally waives any objection to the laying of venue of any Litigation in the courts of the State of Minnesota or of the United States of America, in each case located in Minneapolis, Minnesota, and hereby further irrevocably and unconditionally waives and agrees not to plead or claim in any such court that any Litigation brought in any such court has been brought in an inconvenient forum.
		

		
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			10.    Clawback or Repayment Policy. This Award shall be subject to any clawback or repayment policy of the Company that is currently in effect or that is hereinafter adopted.
		

		
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			11.    Incorporation of Plan Terms. This Award is subject to the terms and conditions of the Plan. Such terms and conditions of the Plan are incorporated into and made a part of this Award by reference. In the event of any conflicts between or among the provisions of this Award, the terms of the Plan and the provisions of any employment agreement between the Company and you, the Committee shall reconcile such conflicts in a manner that is not inconsistent with the Plan. 
		

		
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			IN WITNESS WHEREOF, the Company has granted this Award on the day and year first above written.
		

		
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						INTRICON CORPORATION

					
					
						 

				
	
					
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						BY:

					
					
						_________________________

					
					
						 

				
	
					
						«From»

					
					
						 

					
					
						 

				
	
					
						«Title»

					
					
						 

					
					
						 

				

		
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			1260 Red Fox Road ● Arden Hills, MN 55112 ● Tel: 651-636-9770 ● Fax: 651-357-1097 ● www.IntriCon.com

		

		

			

		

 

		

			«Full_Name»

		

		

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		I hereby acknowledge receipt of a copy of the forgoing Award and the Plan and, having read them hereby, signify my understanding of, and my agreement with, their terms and conditions. I accept this Award in full satisfaction of any previously written or verbal promises made to me by the Company with respect to performance restricted stock unit grants.
		

		
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						«Full_Name»

					
					
						 

					
					
						(Date)

				
	
					
						 

					
					
						 

					
					
						 

				

		
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			1260 Red Fox Road ● Arden Hills, MN 55112 ● Tel: 651-636-9770 ● Fax: 651-357-1097 ● www.IntriCon.com

		

		

			

		

 

		

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			intricon corporation
		

		
			PERFORMANCE RESTRICTED STOCK UNIT AWARD
		

		
			 
		

		
			EXHIBIT A
		

		
			 
		

			
					
						 

					
					
						 

				
	
					
						Performance Standards:

					
					
						Performance Restricted Stock Units Earned

				
	
					
						 

					
					
						 

				
	
					
						 

					
					
						 

				
	
					
						 

					
					
						 

				
	
					
						 

					
					
						 

				
	
					
						Number of Share issuable for Performance Standard between “Threshold” and “Target” or “Target” and “Maximum” will be prorated.

				

		
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			For purposes of this Award: 
		

			
					
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						(a)

					
					
						“Performance Standards” means [           ].

				

			
					
					
						(b)

					
					
						“Performance Period” means [          ].

				

		
			 
		

		 

		

			1260 Red Fox Road ● Arden Hills, MN 55112 ● Tel: 651-636-9770 ● Fax: 651-357-1097 ● www.IntriCon.comMEMBERSHIP INTEREST PURCHASE AGREEMENT

by and among

A4 Manufacturing, Inc.,

Alpine 4 Holdings, Inc.,

Alternative Laboratories, LLC, 

KAI Enterprises, LLC,

and

Kevin Thomas

 

Dated as of May 4, 2021 

  

TABLE OF CONTENTS

Page

ARTICLE I DEFINITIONS1 

ARTICLE II SALE AND PURCHASE OF INTERESTS5 

2.1Sale and Purchase of Interests5 

2.2Payment for the Interests5 

2.3Closing6 

2.4Transactions to be Effected at Closing.6 

2.5Non-Circumvention7 

2.6Retention of Cash and Accounts Receivable7 

2.7Sale of the Real Property7 

ARTICLE III REPRESENTATIONS AND WARRANTIES OF THE SELLER7 

3.1Authority8 

3.2Interest Ownership8 

3.3Investment Intent8 

3.4Brokers' or Finders' Fees8 

ARTICLE IV REPRESENTATIONS AND WARRANTIES OF KAI AND THE COMPANY8 

4.1Organization and Corporate Power8 

4.2Authority8 

4.3Capitalization8 

4.4Brokers' or Finders' Fees9 

4.5Disclosure9 

ARTICLE V REPRESENTATIONS AND WARRANTIES OF THE BUYER AND PARENT9 

5.1Organization and Authority9 

5.2No Conflicts9 

5.3Independent Investigation9 

5.4Validity of the Buyer's Shares10 

5.5Litigation10 

5.6Brokers' or Finders' Fees10 

5.7Investment Intent10 

5.8Disclosure10 

ARTICLE VI RESERVED10 

ARTICLE VII POST-CLOSING COVENANTS10 

7.1Litigation Support10 

7.2Transition11 

7.3Confidentiality11 

7.4Compliance with Laws11 

7.5Consulting Services11 

ARTICLE VIII INDEMNIFICATION11 

8.1Indemnification by the Seller11 

8.2Indemnification by the Buyer12 

8.3Survival and Time Limitations12 

8.4Limitations on Indemnification12 

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8.5Claims Against KAI13 

8.6Third-Party Claims13 

8.7Other Indemnification Matters14 

8.8Exclusive Remedy14 

ARTICLE IX TAX MATTERS14 

9.1Tax Indemnification14 

9.2Reserved.15 

9.3Tax Periods Beginning Before and Ending After the Closing Date15 

9.4Cooperation on Tax Matters15 

9.5Certain Transfer Taxes15 

ARTICLE X MISCELLANEOUS15 

10.1No Third-Party Beneficiaries'15 

10.2Entire Agreement15 

10.3Successors and Assigns15 

10.4Counterparts16 

10.5Notices16 

10.6Jurisdiction; Service of Process16 

10.7Venue16 

10.8Governing Law17 

10.9Amendments and Waivers17 

10.10Severability17 

10.11Expenses17 

10.12Construction17 

10.13Specific Performance18 

10.14Further Assurances18 

10.15Public Announcement18 

10.16Attorneys' Fees18 

10.17Conflict Waiver; Attorney-Client Privilege18 

 

EXHIBITS

 

AAssignment  

BCommission Agreement 

CEscrow Agreement 

DLease Agreement 

ELease Guaranty Agreement 

FPurchase Agreement 

 

SCHEDULES

 

2.6Accounts Receivables and Finished Goods 

3.4Brokers' or Finders' Fees 

4.1Organization 

4.4Brokers' or Finders' Fees 

5.6Brokers' or Finders' Fees 

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MEMBERSHIP INTEREST PURCHASE AGREEMENT

This Membership Interest Purchase Agreement (this "Agreement") is entered into as of May 4, 2021 (the "Effective Date") by and among A4 Manufacturing, Inc., a Delaware corporation (the "Buyer") and wholly owned subsidiary of Alpine 4 Holdings, Inc., a Delaware corporation ("Parent"), Alternative Laboratories, LLC., a Delaware limited liability company (the "Company"), KAI Enterprises, LLC, a Florida limited liability company ("KAI") and Kevin Thomas (the "Seller"). The Buyer, Parent, the Company, KAI and the Seller may each be referred to herein as a "Party" and collectively as the "Parties."

STATEMENT OF PURPOSE

The Seller is the record and beneficial owner of 100% of the issued and outstanding membership interests of KAI (the "Interests"), constituting 100% of the issued and outstanding securities of KAI on a fully-diluted basis. KAI is the record and beneficial owner of 100% of the issued and outstanding membership interests of the Company, constituting 100% of the issued and outstanding securities of the Company on a fully-diluted basis. The Seller desires to sell all of the Interests to the Buyer, and the Buyer desires to purchase the Interests from the Seller, upon the terms and subject to the conditions set forth in this Agreement. Pursuant to this Agreement, the Buyer hereby agrees to purchase from the Seller, and the Seller hereby agree to sell to the Buyer, all of the outstanding Interests for the consideration and upon the terms and subject to the conditions set forth in this Agreement.

ARTICLE I

DEFINITIONS

When used in this Agreement, the following terms will have the meanings assigned to them in this Article I.

"4740" means 4740 Cleveland, LLC, a Florida limited liability company.

"Affiliate" means, with respect to a specified Person, any other Person that directly or indirectly controls, is controlled by, or is under common control with, the specified Person. The term "control" means: (a) the possession, directly or indirectly, of the power to vote 50% or more of the securities or other equity interests of a Person having ordinary voting power; (b) the possession, directly or indirectly, of the power to direct or cause the direction of the management policies of a Person, by contract or otherwise; or (c) being a member, director, officer, executor, trustee or fiduciary (or their equivalents) of a Person or a Person that controls such Person. With respect to a Person who is an individual, "control" by the spouse of such Person, or by any ancestor or descendant of such Person or such Person's spouse who resides in the same house as such Person, shall be deemed control by such Person.

"Affiliated Group" means an affiliated group as defined in Code Section 1504 (or any analogous combined, consolidated or unitary group defined under state, local or foreign income Tax law).

"Appurtenances" means all privileges, rights, easements, hereditaments and appurtenances belonging to or for the benefit of the Real Property, including all easements appurtenant to and for the benefit of the Real Property for, and as the primary means of access between, the Real Property and a public way, or for any other use upon which lawful use of the Real Property for the purposes for which it is presently being used is dependent, and all rights existing in and to any streets, alleys, passages and other rights-of-way included thereon or adjacent thereto (before or after vacation thereof) and vaults beneath any such streets. 

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"Assignment" means that certain Assignment of Membership Interest by and between the Seller and the Buyer for the assignment of the Interests to the Buyer, dated as of the Closing Date, in substantially the form set forth in Exhibit A attached to this Agreement.

"Business" means the business operations as conducted by the Company on the Closing Date, consistent with past practice.

"Business Day" means any day that is not a Saturday, Sunday or a Federal public holiday. 

"Code" means the Internal Revenue Code of 1986, as amended.

"Commission Agreement" means that certain Commission Agreement by and between the Company and the Seller, dated as of the Closing Date, in substantially the form set forth in Exhibit B attached to this Agreement.

"Confidential Information" means information concerning the Business or the affairs of the Company, including information relating to customers, clients, suppliers, distributors, investors, lenders, consultants, independent contractors or employees, customer and supplier lists, price lists and pricing policies, cost information, financial statements and information, budgets and projections, business plans, production costs, market research, marketing plans and proposals, sales and distribution strategies, processes and business methods, technical information, pending projects and proposals, inventions, discoveries, technologies, trade secrets, formulae, technical data, designs, patterns, marks, names, industrial designs, compositions, works of authorship and other Intellectual Property, devices, samples, plans, drawings and specifications, photographs and digital images, computer software and programming, all other confidential information and materials relating to the Business or affairs of the Company, and all notes, analyses, compilations, studies, summaries, reports, manuals, documents and other materials prepared by or for the Company containing or based in whole or in part on any of the foregoing, whether in verbal, written, graphic, electronic or any other form. Notwithstanding the above, Confidential Information does not mean or include information concerning the Business or the affairs of the Company, or otherwise, which: (a) is in the possession of the Seller or the Seller has knowledge of as of the Closing Date; or (b) is independently developed or obtained by the Seller after the Closing Date.

"Consent" means any consent, approval, authorization, permission or waiver.

"Contract" means any contract, obligation, understanding, commitment, lease, license, purchase order, work order, bid or other agreement, whether written or oral and whether express or implied, together with all amendments and other modifications thereto.

"Encumbrance" means any lien, mortgage, pledge, encumbrance, charge, security interest, adverse or other claim, community property interest, condition, equitable interest, option, warrant, right of first refusal, easement, profit, license, servitude, right of way, covenant, zoning or other restriction of any kind or nature.

"Escrow Agent" means Cona Law, PLLC.

"Escrow Agreement" means that certain Escrow Agreement by and between the Buyer, the Seller and the Escrow Agent, dated as of the Closing Date, in substantially the form set forth in Exhibit C attached to this Agreement.

"Escrow Amount" means One Million Four Hundred Thousand Dollars ($1,400,000). 

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"Finished Goods" means the pending invoice amount of the Company's customer-branded products that are ready and able to be, but have not yet been, shipped or invoiced (according to GAAP) to customers.

"Fraud" means, with respect to a Party, an actual and intentional misrepresentation of a material existing fact with respect to the making of any representation or warranty in Article III, Article IV or Article V made by such Party: (a) with respect to the Seller, to Seller's Knowledge or (b) with respect to the Buyer, to Buyer's Knowledge, of its falsity and made for the purpose of inducing the other Party to act, and upon which the other Party justifiably relies with resulting quantifiable Losses.

"GAAP" means generally accepted accounting principles in the United States as set forth in pronouncements of the Financial Accounting Standards Board (and its predecessors) and the American Institute of Certified Public Accountants and, unless otherwise specified, as in effect on the date hereof or, with respect to any financial statements prepared prior to the date hereof, the date such financial statements were prepared.

"Governmental Body" means any federal, state, local or other government or quasi-governmental authority or any department, agency, subdivision, court or other tribunal of any of the foregoing.

"Improvements" means all buildings, structures, fixtures and improvements located on the Real Property. 

"Intellectual Property" means, with respect to the Company, all: (a) inventions (whether patentable or unpatentable and whether or not reduced to practice), improvements thereto, and patents, patent applications, and patent disclosures, together with re-issuances, continuations, continuations-in-part, revisions, extensions and reexaminations thereof; (b) trademarks, service marks, trade dress, logos, trade names, and corporate names, together with translations, adaptations, derivations and combinations thereof and including goodwill associated therewith, and applications, registrations, and renewals in connection therewith; (c) copyrightable works, copyrights, and applications, registrations and renewals in connection therewith; (d) trade secrets and Confidential Information; (e) computer software, in object and source code format (including data and related documentation); (f) plans, drawings, architectural plans and specifications; (g) websites; (h) other proprietary rights; and (i) copies and tangible embodiments and expressions (in whatever form or medium) of any of the foregoing, including all improvements and modifications thereto and derivative works thereof. 

"IRS" means the U.S. Internal Revenue Service.

"Knowledge" of any Person means: (a) the actual knowledge of such Person; or (b) the knowledge that a reasonable Person should have after reasonable inquiry of employees, directors and officers of such Person (in the case of a legal entity). Notwithstanding the foregoing, references to the "Seller's Knowledge" and "Company's Knowledge" means the actual knowledge of the Seller. 

"Law" means any federal, state, local, or other law, statute, ordinance, regulation, rule, regulatory or administrative guidance, Order, constitution, principle of common law or other restriction of any Governmental Body.

"Lease Agreement" means that certain Lease Agreement by and between the Buyer and 4740, dated as of the Closing Date, relating to the Buyer leasing the Real Property from 4740, in substantially the form set forth in Exhibit D attached to this Agreement.

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"Lease Guaranty Agreement" means that certain Lease Guaranty Agreement executed by Parent in favor of 4740, dated as of the Closing Date, in connection with the Lease Agreement, in substantially the form set forth in Exhibit E attached to this Agreement.

"Liability" means any liability, obligation or commitment of any kind or nature, whether known or unknown, asserted or unasserted, absolute or contingent, accrued or unaccrued, liquidated or unliquidated, or due or to become due.

"Loss" means any loss, claim, demand, Order, damage (excluding, with respect to indemnification claims between the Seller and the Buyer (and not with respect to indemnification claims involving third parties), lost profits and consequential or special damages), penalty, fine, cost, settlement payment, Liability, Tax, Encumbrance, expense, fee, court costs or reasonable attorneys' fees and expenses.

"Order" means any order, award, decision, injunction, judgment, ruling, decree, charge, writ, subpoena or verdict entered, issued, made or rendered by any Governmental Body or arbitrator.

"Organizational Documents" means: (a) the certificate or articles of incorporation and bylaws; (b) any documents comparable to those described in clause (a) as may be applicable pursuant to any Law; and (c) any amendment or modification to any of the foregoing.

"Permit" means any permit or Consent issued by any Governmental Body or pursuant to any Law.

"Person" means any individual, corporation, limited liability company, partnership, sole proprietorship, joint venture, trust, estate, association, organization, labor union, Governmental Body or other entity.

"Proceeding" means any proceeding, charge, complaint, claim, demand, notice, action, suit, litigation, hearing, audit, investigation, arbitration or mediation (in each case, whether civil, criminal, administrative, investigative or informal) commenced, conducted, heard or pending by or before any Governmental Body, arbitrator or mediator.

"Purchase Agreement" means that certain Membership Interest Purchase Agreement by and between Parent, the Buyer, 4740 and the Seller, dated as of the Closing Date, relating to the Buyer's purchase of all of the outstanding membership interest in 4740 from the Seller, in substantially the form set forth in Exhibit F attached to this Agreement.

"Real Property" means collectively, the real property owned by 4740 and located at 4740 South Cleveland Avenue, Fort Myers, Florida 33907, and all the Improvements located thereon and Appurtenances thereto.

"Representative" means, with respect to a particular Person, any manager, director, officer, employee, agent, consultant, advisor or other representative of such Person, including legal counsel, accountants and financial advisors.

"SEC" means the United States Securities and Exchange Commission.

"Securities Act" means the Securities Act of 1933, as amended. 

"Shares" means shares of Parent's Class A common stock equal to the sum of the book value of the Company's inventory, less the Finished Goods, plus vendor deposits, less any customer deposits, all as 

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determined at the close of business on the Business Day immediately prior to the Closing Date, divided by the average of the VWAP of such shares for the three Trading Days immediately prior to the Closing Date.

"Share Proceeds" means the aggregate amount of net cash proceeds the Seller receives upon the sale or other disposition of the Shares, after deducting any and all costs, fees, Taxes and any other type of expense incurred or owed in connection with, or as a result of, the sale or other disposition of such Shares.

"Tax" means: (a) any federal, state, local, foreign or other income, gross receipts, license, payroll, employment, excise, severance, stamp, occupation, premium, windfall profits, environmental, customs duties, capital stock, franchise, profits, withholding, social security (or similar), unemployment, disability, real property, personal property, sales, use, transfer, registration, value added, general service, alternative or add-on minimum, estimated or other tax of any kind whatsoever, however denominated, or computed, and including any interest, penalty, or addition thereto, whether disputed or not; (b) Liability for the payment of any amounts of the type described in clause (a) arising as a result of being (or ceasing to be) a member of any Affiliated Group (or being included (or required to be included) in any Tax Return relating thereto); and (c) Liability for the payment of any amounts of the type described in clause (a) or (b) as a transferee or successor, by Contract or from any express or implied obligation to indemnify or otherwise assume or succeed to the Liability of any other Person.

"Tax Return" means any return, declaration, report, claim for refund, or information return or other document or statement relating to Taxes, including any form, schedule or attachment thereto and any amendment or supplement thereof.

"Trading Day" means a day on which the OTCQB Market operated by OTC Markets Group, Inc. (or any successors thereof) is open for trading.

"Transactions" means the transactions contemplated by the Transaction Documents.

"Transaction Documents" means this Agreement, the Assignment, the Commission Agreement, the Escrow Agreement, the Lease Agreement, the Lease Guaranty Agreement, the Purchase Agreement and all other written agreements, documents and certificates contemplated by any of the foregoing documents.

"VWAP" means the daily dollar volume-weighted average sale price for Parent's Class A common stock on the OTCQB Market or other market operated by OTC Markets Group, Inc. on any particular Trading Day (during the period beginning at such time as such market publicly announces is the official open of trading, and ending at such time as such market publicly announces is the official close of trading), as reported by Bloomberg Financial Markets.

ARTICLE II

SALE AND PURCHASE OF INTERESTS

Sale and Purchase of Interests. Subject to the terms and conditions of this Agreement, the Buyer will purchase from the Seller, and Seller will sell and deliver to the Buyer, all of the Interests, which Interests equal 100% of the issued and outstanding ownership interests of KAI. 

2.2Payment for the Interests. As payment in full for the Interests being acquired by the Buyer hereunder, the Buyer shall pay to the Seller the sum of Ten Million Dollars ($10,000,000) (the "Purchase Price") and issue the Shares in the name of the Seller as follows: 

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(a)On the Closing Date, the Buyer shall deliver the Purchase Price by wire transfer of immediately available funds to an account specified by the Seller in writing at least one Business Day prior to the Closing; and 

(b)No later than five Business Days after the Closing Date, the Buyer shall deliver to the Seller a statement from Parent's transfer agent evidencing the Shares being held in the Seller's name in electronic or book-entry form. 

2.3Closing. The closing of the sale of the Interests (the "Closing") shall take place remotely via the exchange of documents and signatures, or as the Buyer and the Seller may otherwise mutually determine. The date upon which the Closing occurs is hereinafter referred to as the "Closing Date." The sale, assignment, transfer and conveyance to the Buyer of the Interests will be deemed effective at 12:01 a.m. EDT on the Closing Date. All actions to be taken and all documents to be executed or delivered at the Closing will be deemed to have been taken, executed and delivered simultaneously.  

2.4Transactions to be Effected at Closing. 

(a)On or before the Closing Date, in addition to paying the Purchase Price, the Buyer shall deliver: 

(i)to the Escrow Agent, the Escrow Amount in immediately available funds;  

(ii)to the Seller, the Assignment, duly executed by the Buyer; 

(iii)to the Seller and the Escrow Agent, the Escrow Agreement, duly executed by the Buyer; 

(iv)to the Seller, the Lease Agreement, duly executed by the Buyer; 

(v)to the Seller, the Lease Guaranty Agreement, duly executed by Parent; 

(vi)to the Seller, the Purchase Agreement, duly executed by the Buyer and Parent; and 

(vii)all other agreements, documents, instruments or certificates required to be delivered by the Buyer at or prior to the Closing pursuant to the Transaction Documents to which the Buyer is a party. 

(b)On or before the Closing Date, the Seller shall deliver: 

(i)to the Buyer, the Assignment, duly executed by the Seller; and 

(ii)to the Buyer, the Seller's resignation as Manager and an Officer of the Company; 

(iii)to the Buyer, the Commission Agreement, duly executed by the Seller and the Company; 

(iv)to the Buyer and the Escrow Agent, the Escrow Agreement, duly executed by the Seller; 

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(v)to the Buyer, the Lease Agreement, duly executed by 4740; 

(vi)to the Buyer, the Purchase Agreement, duly executed by 4740 and the Seller; and 

(vii)all other agreements, documents, instruments or certificates required to be delivered by the Seller at or prior to the Closing pursuant to the Transaction Documents to which the Seller is a party. 

2.5Non-Circumvention. In connection with the purchase of the Interests by the Buyer, the Seller hereby agrees, for a period of two years from the Closing Date, not to directly or indirectly solicit or attempt to solicit, contact (including but not limited to communications using email, regular mail, express mail, telephone, fax, instant message, social media, or any other oral, written, or electronic transmission), attempt to contact, or meet with the Company's current or former (provided it has purchased a product from the Company within one year prior to the Closing Date) customers for the purpose of offering such customers any alternative provider for any SKU in which the Company is manufacturing and packaging in-house as of the Closing Date; provided, however, the Parties agree that if an event of default occurs under the Commission Agreement, subject to a 30 day cure period as set forth in the Commission Agreement, or any portion of the Consulting Fee is unpaid after such date that it is due, the non-circumvention described in this Section 2.5 shall become null and void and of no further force or effect. Notwithstanding anything to the contrary set forth above in this Section 2.5, the Seller is permitted to broker equipment, components, and new supplement manufacturing opportunities to the industry, subject only to restrictions set forth in the Commission Agreement. 

2.6Retention of Cash and Accounts Receivable. The Parties understand that the Seller shall retain all of the cash in the Company's accounts as of the Closing Date, and that the Seller shall retain and be owed the total amount of the Company's accounts receivables and Finished Goods, net of accounts payable, as of the close of business on the Business Day immediately prior to the Closing Date, as set forth on Schedule 2.6 the "Closing AR Amount"). The Closing AR Amount is subject to adjustment based on a reconciliation of such accounts to be undertaken not more than three Business Days after the Closing Date. Any accounts receivables and Finished Goods amount retained by and owed to the Seller shall be paid promptly, and in no event more than five Business Days, after the date such payments are received by the Company.  

2.7Sale of the Real Property. The Parties acknowledge and agree that the Buyer's purchase of all of the issued and outstanding membership interests of 4740 from the Seller (the "Real Property Sale") shall close on or before November 15, 2021. In connection with the Real Property Sale, on the Closing Date, the Buyer shall enter into the Purchase Agreement, the Lease Agreement and the Escrow Agreement. The Buyer shall also pay the Escrow Agent the Escrow Amount on the Closing Date. The Escrow Amount shall be held by the Escrow Agent pursuant to the terms and conditions of the Escrow Agreement. From the Closing Date until the closing of the Real Property Sale, the Buyer shall have use of the Real Property to operate the Business in accordance with and pursuant to the terms and conditions of the Lease Agreement.  

ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE SELLER

The Seller represents and warrants to the Buyer that each statement contained in this Article III is true and correct as of the Closing Date:

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3.1Authority. The Seller has full power, authority and legal capacity to execute and deliver the Transaction Documents to which the Seller is a party and to perform the Seller's obligations thereunder. This Agreement constitutes the valid and legally binding obligation of the Seller, enforceable against the Seller in accordance with the terms of this Agreement. 

3.2Interest Ownership. The Seller owns of record and beneficially the Interests free and clear of any Encumbrance or restriction on transfer (other than any restriction under any securities Law). KAI is not a party to any option, warrant, purchase right, right of first refusal, call, put or other Contract (other than this Agreement) that could require KAI to sell, transfer or otherwise dispose of any Interests. At the Closing, the Seller will have duly transferred to the Buyer all of the Interests, free and clear of any Encumbrance, and such Interests shall constitute 100% of the issued and outstanding ownership interests of KAI. 

3.3Investment Intent. The Seller is acquiring the Shares to be received hereunder for his own account and not with a view to distribution of such Shares in violation of the Securities Act. Additionally, the Seller acknowledges that any resale of the Shares has not been and will not be registered under the Securities Act, or any state securities laws, and that the Shares may not be transferred or sold except pursuant to the registration provisions of the Securities Act or pursuant to an applicable exemption therefrom and subject to state securities laws and regulations, as applicable. 

3.4Brokers' or Finders' Fees. Except as set forth on Schedule 3.4, the Seller has not engaged, and to the Seller's Knowledge, there are no brokers, finders or agents entitled to any fee, commission or related payments with respect to the Transactions for which the Buyer, KAI or the Company could be liable. 

ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF KAI AND THE COMPANY

The Seller, KAI and the Company, jointly and severally, represents and warrants to the Buyer that each statement contained in this Article IV is true and correct as of the Closing Date:

4.1Organization and Corporate Power. Schedule 4.1 sets forth KAI's and the Company's jurisdiction of organization, the other jurisdictions in which each is qualified to do business, and each of its manager and officers. Neither KAI nor the Company is in violation of any of its Organizational Documents. Each of KAI and the Company is a limited liability company duly organized, validly existing and in good standing under the laws of its jurisdiction of organization. Each of KAI and the Company has full corporate power and authority to conduct the businesses in which it is engaged, to own and use the properties and assets that it purports to own or use and to perform its obligations. 

4.2Authority. KAI and the Company each has full corporate power and authority to execute and deliver this Agreement and each Transaction Document to which it is a party, and to perform its obligations hereunder and thereunder. The execution, delivery and performance by each of KAI and the Company of this Agreement and each Transaction Document to which it is a party has been duly authorized by the manager of KAI and the Company. This Agreement and each Transaction Document to which each of KAI and the Company is a party constitutes a valid and legally binding obligation of KAI and the Company, respectively, enforceable against KAI and the Company, respectively, in accordance with the terms thereof.  

4.3Capitalization. All issued and outstanding membership interests of KAI are owned of record and beneficially by the Seller, and there are no other owners or holders of any membership interests of KAI. All issued and outstanding membership interests of the Company are owned of record and beneficially by KAI, and there are no other owners or holders of any membership interests of the  

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Company. All of the Interests have been duly authorized and are validly issued, fully paid and nonassessable. There are no outstanding securities convertible or exchangeable into membership interests of KAI or the Company or any options, warrants, purchase rights, subscription rights, preemptive rights, conversion rights, exchange rights, calls, puts, rights of first refusal or other Contracts that could require KAI or the Company to issue, sell or otherwise cause to become outstanding or to acquire, repurchase or redeem membership interests of KAI or the Company. There is no outstanding profit participation or similar rights with respect to KAI or the Company. 

4.4Brokers' or Finders' Fees. KAI has not engaged any brokers, finders or agents who are entitled to any fee, commission or related payments with respect to the Transactions for which the Buyer, KAI or the Company could be liable. Except as set forth on Schedule 4.4, the Company has not engaged, and to the Company's Knowledge, there are no brokers, finders or agents entitled to any fee, commission or related payments with respect to the Transactions for which the Buyer, KAI or the Company could be liable.  

4.5Disclosure. The Buyer acknowledges and agrees that in entering into this Agreement (or any Schedule related thereto) it has not relied and is not relying on any representations, warranties, or other statements whatsoever, whether written or oral, by KAI, the Company, the Seller or any Person acting on the Company's, KAI's or the Seller's behalf, other than those expressly set forth in this Agreement (or any Schedule related thereto) and that it will not have any right or remedy arising out of any representation, warranty or statement not set forth in this Agreement (or any Schedule related thereto). 

ARTICLE V

REPRESENTATIONS AND WARRANTIES OF THE BUYER AND PARENT

The Buyer and Parent, jointly and severally, represent and warrant to the Seller that each statement contained in this Article V is true and correct as of the Closing Date:

5.1Organization and Authority. The Buyer is a corporation duly organized, validly existing and in good standing under the laws of the jurisdiction of its incorporation. The Buyer has full corporate power and authority to execute and deliver the Transaction Documents to which it is a party and to perform its obligations thereunder. The execution and delivery by the Buyer of each Transaction Document to which the Buyer is a party and the performance by the Buyer of the Transactions have been duly approved by all requisite corporate action of the Buyer. This Agreement constitutes the valid and legally binding obligation of the Buyer, enforceable against the Buyer in accordance with the terms of this Agreement. Upon the execution and delivery by the Buyer of each Transaction Document to which the Buyer is a party, such Transaction Document will constitute the valid and legally binding obligation of the Buyer, enforceable against the Buyer in accordance with the terms of such Transaction Document. 

5.2No Conflicts. Neither the execution and delivery of this Agreement nor the performance of the Transactions will, directly or indirectly, with or without notice or lapse of time: (a) violate any Law to which the Buyer is subject; (b) violate any Organizational Document of the Buyer; or (c) violate, conflict with, result in a breach of, constitute a default under, result in the acceleration of or give any Person the right to accelerate the maturity or performance of, or to cancel, terminate, modify or exercise any remedy under, any Contract to which the Buyer is a party or by which the Buyer is bound or the performance of which is guaranteed by the Buyer. The Buyer is not required to notify, make any filing with, or obtain any Consent of any Person in order to perform the Transactions. 

5.3Independent Investigation. The Buyer has conducted its own independent investigation, review and analysis of the Business and the results of operations, prospects, condition (financial or otherwise) or assets of KAI and the Company, and acknowledges that it has been provided adequate  

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access to the personnel, properties, assets, premises, books and records, and other documents and data of KAI and the Company for such purpose. The Buyer acknowledges and agrees that: (a) in making its decision to enter into this Agreement and to consummate the Transactions, the Buyer has relied solely upon its own investigation and the express representations and warranties of the Seller, KAI and the Company set forth in Article III and Article IV, respectively, of this Agreement (including the related portions of the Company's Schedules); and (b) none of the Seller, KAI, the Company or any other Person has made any representation or warranty as to the Seller, KAI, the Company or this Agreement, except as expressly set forth in Article III and Article IV of this Agreement (including the related portions of the Company's Schedules).

5.4Validity of the Buyer's Shares. Prior to the Closing, the Shares will have been duly authorized and, when issued in accordance with the terms of this Agreement, will be validly issued to and fully paid by the Seller free of any liens, claims or other encumbrances, except for restrictions on transfer provided for herein or under the Securities Act or other applicable securities laws. 

5.5Litigation. There is no Proceeding pending or, to the Buyer's Knowledge, threatened or anticipated against the Buyer relating to, affecting, or otherwise delaying, interfering or preventing the Transaction. To the Buyer's Knowledge, no event has occurred, and no circumstance exists, that would reasonably be expected to give rise to or serve as a basis for the commencement of any such Proceeding.  

5.6Brokers' or Finders' Fees. Except as set forth on Schedule 5.6, neither the Buyer or Parent has engaged, and to the Buyer's Knowledge, there are no brokers, finders or agents entitled to any fee, commission or related payments with respect to the Transactions for which the Buyer or Parent could be liable. 

5.7Investment Intent. The Buyer is acquiring the Interests purchased hereunder for its own account and not with a view to distribution of such Interests in violation of the Securities Act. 

5.8Disclosure. The Seller acknowledges and agrees that in entering into this Agreement (or any Schedule related thereto) it has not relied and is not relying on any representations, warranties, or other statements whatsoever, whether written or oral, by the Buyer or Parent or any Person acting on the Buyer's or Parent's behalf, other than those expressly set forth in this Agreement (or any Schedule related thereto) and that they will not have any right or remedy arising out of any representation, warranty or statement not set forth in this Agreement (or any Schedule related thereto). 

ARTICLE VI

RESERVED

ARTICLE VII

POST-CLOSING COVENANTS

The Parties agree as follows with respect to the period following the Closing:

7.1Litigation Support. If any Party is evaluating, pursuing, contesting or defending against any Proceeding in connection with: (a) any Transaction; or (b) any fact, situation, circumstance, status, condition, activity, practice, plan, occurrence, event, incident, action, failure to act, or transaction on or prior to the Closing Date involving KAI, then upon the request of such Party each other Party will cooperate with the requesting Party and its counsel in the evaluation, pursuit, contest or defense, make available its personnel, and be available for testimony and provide access to its books and records as may be necessary in connection therewith, except to the extent the other Party is adversarial to the requesting Party in that Proceeding or any related Proceeding. The requesting Party will reimburse each other Party for its reasonable out-of-pocket expenses related to such cooperation. Parent and the Buyer each  

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acknowledge that prior to the Closing KAI transferred or assigned all of its assets, other than its membership interests in the Company, to ASD Capital Group, LLC ("ASD"), an Affiliate of the Seller, and each Party agrees, upon request from ASD or the Seller, to furnish such further information, to execute and deliver such other documents, and to do such other acts and things, all as ASD or the Seller may reasonably request for the purpose of carrying out the intent of such transfer or assignment of KAI's assets.

7.2Transition. The Seller will not take any affirmative action that is designed or intended to have the effect of discouraging any lessor, lessee, employee, Governmental Body, licensor, licensee, customer, supplier or other business associate of the Company from maintaining the same relationships with the Company after the Closing as it maintained prior to the Closing.  

7.3Confidentiality. The Seller will maintain the confidentiality of the Confidential Information at all times, and will not, directly or indirectly, use any Confidential Information for his own benefit or for the benefit of any other Person or reveal or disclose any Confidential Information to any Person other than authorized Representatives of the Buyer and the Company, except in connection with this Agreement or with the prior written consent of the Buyer. The covenants in this Section 7.3 will not apply to Confidential Information that: (a) is or becomes available to the general public through no breach of this Agreement by the Seller or, to the Seller's Knowledge, breach by any other Person of a duty of confidentiality to the Buyer; or (b) the Seller is required to disclose by applicable Law; provided, however, that the Seller will notify the Buyer in writing of such required disclosure as much in advance as practicable in the circumstances and cooperate with the Buyer to limit the scope of such disclosure. At any time that the Buyer may request, the Seller will turn over or return to the Buyer all Confidential Information in any form (including all copies and reproductions thereof) in their possession or control. 

7.4Compliance with Laws. The Buyer and Parent will remain in compliance in all material respects with all applicable Laws and Permits, including continuing to comply with all securities laws and the SEC's reporting requirements. 

7.5Consulting Services. For a period of 90 days following the Closing Date, the Seller shall provide customer and sales support services to the Company (the "Services"). In exchange for providing the Services, the Company or the Buyer shall pay the Seller $105,000 (the "Consulting Fee"), payable by wire transfer of immediately available funds to an account designated by the Seller as follows: (a) $25,000 on or before June 3, 2021; (b) $40,000 on or before July 1, 2021; and (c) $40,000 on or before August 2, 2021. If any part of the Consulting Fee is not paid to the Seller in accordance to the terms above, the Seller shall have the right to stop providing the Services until such time as the unpaid portion of the Consulting Fee is paid. If the unpaid portion of the Consulting Fee is not paid in full on or before August 2, 2021, then the Seller shall not be required to perform any of the Services, and the unpaid portion of the Consulting Fee shall remain due and payable to the Seller and shall be treated as an outstanding debt on the Company's balance sheet. 

ARTICLE VIII

INDEMNIFICATION

8.1Indemnification by the Seller. After the Closing and subject to the other terms and conditions of this Article VIII, the Seller shall indemnify the Buyer against, and shall hold the Buyer harmless from and against, any and all Losses incurred or sustained by, or imposed upon, the Buyer based upon, arising out of, with respect to or by reason of: 

(a)any Fraud on the part of the Seller; or  

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(b)any breach or non-fulfillment of any covenant, agreement or obligation to be performed by the Seller pursuant to this Agreement. 

8.2Indemnification by the Buyer. After the Closing and subject to the other terms and conditions of this Article VIII, the Buyer and Parent, jointly and severally, shall indemnify the Seller against, and shall hold the Seller harmless from and against, any and all Losses incurred or sustained by, or imposed upon, the Seller based upon, arising out of, with respect to or by reason of:  

(a)any inaccuracy in or breach of any of the representations or warranties of the Buyer and Parent contained in Article V of this Agreement; or 

(b)any breach or non-fulfillment of any covenant, agreement or obligation to be performed by the Buyer or Parent pursuant to this Agreement.  

8.3Survival and Time Limitations. All representations and warranties, covenants and agreements of the Buyer, Parent, KAI, the Company and the Seller, individually and collectively, in this Agreement will survive the Closing and shall remain in full force and effect until the date that is 12 months from the Closing Date, or such shorter time period as may be set forth in a particular representation, warranty or covenant. No Party will have any Liability under Section 8.1 or otherwise with respect to any Losses or claim by another Party or any Person claiming through or on behalf of such Party for any breach or inaccuracy of any representation, warranty, covenant or agreement in this Agreement or any other certificate or document delivered pursuant to this Agreement or otherwise unless the Party making a claim notifies the Party against whom such claims are being asserted in writing of such a claim on or before the date that is 12 months from the Closing.   

8.4Limitations on Indemnification.  

(a)No Party shall have any Liability with respect to the matters described in this Article VIII until the total of all Losses with respect to such matters exceeds $50,000 (the "Basket"), at which point such Party shall be obligated to indemnify for only Losses exceeding the Basket, subject to the Indemnification Cap. 

(b)The Seller and his executors or heirs, collectively, shall not be liable to the Buyer, Parent, KAI, the Company or any Person claiming through, on behalf or for the benefit of the Buyer, Parent, KAI or the Company under this Article VIII or otherwise for any Losses, in the aggregate, exceeding the lesser of: (i) the Share Proceeds; or (ii) Five Million Dollars ($5,000,000) (the "Indemnification Cap").  

(c)Notwithstanding anything in this Agreement to the contrary, any Losses under this Article VIII or otherwise that the Seller may be liable for shall be paid or satisfied exclusively with or from the Share Proceeds, subject to the Indemnification Cap.  

(d)The Seller shall not be liable under this Article VIII or otherwise for any Losses based upon or arising out of any inaccuracy in or breach of any of the representations or warranties of the Seller, KAI or the Company contained in this Agreement if the Buyer, Parent or their respective Representatives had Knowledge of such inaccuracy or breach prior to the Closing, or such inaccuracy or breach, or information regarding or relating thereto, was discoverable with minimal inquiry or effort during due diligence by the Buyer or Parent prior to the Closing. 

(e)Losses payable by the Buyer or the Seller under this Article VIII shall not include indirect, consequential or other speculative damages, punitive damages, damages related to mental or emotional distress, exemplary damages, special damages or damages calculated as a multiple of earnings.  

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8.5Claims Against KAI. Following the Closing, the Seller may not assert, directly or indirectly, and hereby waives, any claim, whether for indemnification, contribution, subrogation or otherwise, against KAI with respect to any act, omission, condition or event occurring or existing prior to or on the Closing Date or any obligation of the Seller under Section 8.1. The Seller agrees not to make, directly or indirectly, and hereby waives, any claim for indemnification against KAI by reason of the fact that the Seller was a manager or a member of KAI (whether such claim is for judgments, damages, penalties, fines, costs, amounts paid in settlement, Losses, expenses or otherwise and whether such claim is pursuant to any Law, Organizational Document, Contract or otherwise) with respect to any Proceeding brought by the Buyer or KAI against the Seller or any Affiliate thereof pursuant to this Agreement with respect to any act, omission, condition or event occurring prior to the Closing Date. 

8.6Third-Party Claims. 

(a)If a third party commences or threatens a Proceeding (a "Third-Party Claim") against any Person (the "Indemnified Party") with respect to any matter that the Indemnified Party might make a claim for indemnification against any Party (the "Indemnifying Party") under this Article VIII, then the Indemnified Party must notify the Indemnifying Party (or the Seller, in the case of the Seller) thereof in writing of the existence of such Third-Party Claim and must deliver copies of any documents served on the Indemnified Party with respect to the Third-Party Claim; provided, however, that any failure to notify the Indemnifying Party or deliver copies will not relieve the Indemnifying Party from any obligation hereunder unless (and then solely to the extent) the Indemnifying Party is materially prejudiced by such failure. 

(b)Upon receipt of the notice described in Section 8.6(a), the Indemnifying Party will have the right to defend the Indemnified Party against the Third-Party Claim with counsel reasonably satisfactory to the Indemnified Party so long as: (i) within ten days after receipt of such notice, the Indemnifying Party notifies the Indemnified Party in writing that the Indemnifying Party will, subject to the limitations of Section 8.4, indemnify the Indemnified Party from and against any Losses the Indemnified Party may incur relating to or arising out of the Third-Party Claim; (ii) the Indemnifying Party provides the Indemnified Party with evidence reasonably acceptable to the Indemnified Party that the Indemnifying Party will have the financial resources to defend against the Third-Party Claim and fulfill its indemnification obligations hereunder; (iii) the Indemnifying Party is not a party to the Proceeding or the Indemnified Party has determined in good faith that there would be no conflict of interest or other inappropriate matter associated with joint representation; (iv) the Third-Party Claim does not involve, and is not likely to involve, any claim by any Governmental Body; (v) the Third-Party Claim involves only money damages and does not seek an injunction or other equitable relief; (vi) settlement of, or an adverse judgment with respect to, the Third-Party Claim is not, in the good faith judgment of the Indemnified Party, likely to establish a precedential custom or practice adverse to the continuing business interests of the Indemnified Party; (vii) the Indemnifying Party conducts the defense of the Third-Party Claim actively and diligently; and (viii) the Indemnifying Party keeps the Indemnified Party apprised of all developments, including settlement offers, with respect to the Third-Party Claim and permits the Indemnified Party to participate in the defense of the Third-Party Claim. 

(c)So long as the Indemnifying Party is conducting the defense of the Third-Party Claim in accordance with Section 8.6(b): (i) the Indemnifying Party will not be responsible for any attorneys' fees incurred by the Indemnified Party regarding the Third-Party Claim (other than reasonable attorneys' fees incurred prior to the Indemnifying Party's assumption of the defense pursuant to Section 8.6(b)); and (ii) neither the Indemnified Party nor the Indemnifying Party will consent to the entry of any judgment or enter into any settlement with respect to the Third-Party Claim without the prior written consent of the other party, which consent will not be unreasonably withheld, conditioned or delayed. If the Indemnified Party desires to consent to the entry of judgment with respect to or settle a Third-Party  

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Claim but the Indemnifying Party refuses, then the Indemnifying Party will be responsible for all Losses with respect to such Third-Party Claim, without giving effect to the Basket or the Indemnification Cap.

(d)If any condition in Section 8.6(b) is or becomes unsatisfied: (i) the Indemnified Party may defend against, and consent to the entry of any judgment or enter into any settlement with respect to, the Third-Party Claim in any manner it may deem appropriate (and the Indemnified Party need not consult with, or obtain any consent from, the Indemnifying Party in connection therewith); (ii) the Indemnifying Party will reimburse the Indemnified Party promptly and periodically (but no less often than monthly) for the costs of defending against the Third-Party Claim, including reasonable attorneys' fees and expenses; and (iii) the Indemnifying Party will remain responsible for any Losses the Indemnified Party may incur relating to or arising out of the Third-Party Claim to the fullest extent provided in this Article VIII. 

8.7Other Indemnification Matters. Any claim for indemnification under this Article VIII must be asserted by providing written notice, subject to the limitations set forth in Section 8.3, to the Seller (or the Buyer, in the case of a claim by the Seller) specifying the factual basis of the claim in reasonable detail to the extent then known by the Person asserting the claim. The waiver of any condition based on the accuracy of any representation or warranty, or on the performance of or compliance with any covenant or agreement, will not affect the right to indemnification, payment of damages, or other remedy based on any such representation, warranty, covenant or agreement.  

8.8Exclusive Remedy. Subject to Section 10.13, the Parties acknowledge and agree that their sole and exclusive remedy with respect to any and all claims: (a) arising from Fraud on the part of a Party in connection with the transactions contemplated by this Agreement; or (b) for any breach of any representation, warranty, covenant, agreement or obligation set forth herein or otherwise relating to the subject matter of this Agreement, shall be pursuant to the indemnification provisions set forth in this Article VIII. In furtherance of the foregoing, except with respect to Section 10.13, each Party hereby waives, to the fullest extent permitted under Law, any and all rights, claims and causes of action for any breach of any representation, warranty, covenant, agreement or obligation set forth herein or otherwise relating to the subject matter of this Agreement it may have against the other Parties hereto and their Affiliates and each of their respective Representatives arising under or based upon any Law, except pursuant to the indemnification provisions set forth in this Article VIII. Nothing in this Section 8.8 shall limit any Person's right to seek and obtain any equitable relief to which any Person shall be entitled pursuant to Section 10.13. 

ARTICLE IX

TAX MATTERS

The following provisions will govern the allocation of responsibility as between the Buyer and the Seller for certain Tax matters following the Closing Date:

9.1Tax Indemnification.  

(a)The Seller shall pay and reimburse (to the extent not already paid) and indemnify KAI, the Buyer and its Affiliates and hold them harmless from and against Losses resulting from or attributable to all Taxes (or the non-payment thereof) of KAI for all Taxable periods ending on or before the Closing Date (the "Prior Tax Period"). The indemnification under this Section 9.1 shall be subject to the terms, conditions and limitations set forth in Article VIII. The Seller shall pay the Buyer, or KAI at the Buyer's instruction, for any additional Taxes that are the responsibility of the Seller pursuant to this Section 9.1 at least five days prior to payment of such amounts by the Buyer or KAI. To the extent it is commercially and legally reasonable to do so, the Buyer agrees that in exercising any discretionary  

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powers under this Section 9.1 it will do so in a manner that does not materially prejudice the Seller from a tax perspective.

(b)The Buyer and KAI agree to pay, reimburse, and indemnify the Seller and hold it harmless from and against Losses resulting from or attributable to all Taxes (or the non-payment thereof) of KAI for all Taxable periods ending after the Closing Date. 

9.2Reserved. 

9.3Tax Periods Beginning Before and Ending After the Closing Date. The Buyer will prepare and file, or cause to be prepared and filed, any Tax Returns for KAI for tax periods beginning before and ending after the Closing Date. If requested by the Seller, the Buyer will permit the Seller to review and comment on each such Tax Return described in the preceding sentence prior to filing. The Seller shall be responsible for all Taxes relating to any Prior Tax Period. The Buyer shall be responsible for all Taxes for tax periods ending after the Closing Date. 

9.4Cooperation on Tax Matters. The Buyer, KAI and the Seller will cooperate fully, as and to the extent reasonably requested by the other Party or Parties, in connection with the filing and preparation of Tax Returns pursuant to this Article IX and any Proceeding related thereto. Such cooperation will include the retention (upon any other Party's request) of records and information that are reasonably relevant to any such Proceeding and making employees available on a mutually convenient basis to provide additional information and explanation of any material provided hereunder. The Buyer and the Seller agree that KAI will retain all books and records with respect to Tax matters pertinent to KAI relating to any Taxable period beginning before the Closing Date until the expiration of the statute or period of limitations of the respective Taxable periods.  

9.5Certain Transfer Taxes. All transfer, documentary, sales, use, stamp, registration and other such Taxes and fees, including any penalties and interest thereon (collectively, the "Transfer Taxes"), incurred in connection with this Agreement or the Transactions will be paid by the Buyer when due, and the Buyer will, at its own expense, file all necessary Tax Returns and other documentation with respect to all such Transfer Taxes, and if required by applicable Law, the Seller will, and will cause its Affiliates to, join in the execution of any such Tax Returns and other documentation. 

ARTICLE X

MISCELLANEOUS

10.1No Third-Party Beneficiaries'. This Agreement does not confer any rights or remedies upon any Person (including any employee of the Company) other than the Parties, their respective successors and permitted assigns and, as expressly set forth in this Agreement, any Indemnified Party. 

10.2Entire Agreement. The Transaction Documents constitute the entire agreement among the Parties with respect to the subject matter of the Transaction Documents and supersede all prior agreements (whether written or oral and whether express or implied) among any Parties to the extent related to the subject matter of the Transaction Documents (including any letter of intent or confidentiality agreement). 

10.3Successors and Assigns. This Agreement will be binding upon and inure to the benefit of the Parties and their respective successors and permitted assigns. Neither Party may assign its rights or obligations hereunder without the prior written consent of the other Party, which consent shall not be unreasonably withheld, conditioned or delayed. No assignment shall relieve the assigning party of any of its obligations hereunder. 

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10.4Counterparts. This Agreement may be executed by the Parties in multiple counterparts and shall be effective as of the date set forth above when each Party shall have executed and delivered a counterpart hereof, whether or not the same counterpart is executed and delivered by each Party. When so executed and delivered, each such counterpart shall be deemed an original and all such counterparts shall be deemed one and the same document. Transmission of images of signed signature pages by e-mail or other electronic means shall have the same effect as the delivery of manually signed documents in person. 

10.5Notices. Any notice pursuant to this Agreement must be in writing and will be deemed effectively given to another Party on the earliest of the date: (a) three Business Days after such notice is sent by registered U.S. mail, return receipt requested; (b) sent by e-mail of a PDF document (with confirmation of transmission) if sent during normal business hours of the recipient, and on the next Business Day if sent after normal business hours of the recipient; (c) one Business Day after delivery of such notice into the custody and control of an overnight courier service for next day delivery; (d) one Business Day after delivery of such notice in person; and (e) such notice is received by that Party; in each case to the appropriate address below (or to such other address as a Party may designate by notice to the other Parties): 

If to the Seller:

Kevin Thomas

3829 SE 21st Place

Cape Coral, Florida 33904

Email: kevin@thomasbiz.net

If to the Buyer or Parent:

Alpine 4 Holdings, Inc. 

2525 E Arizona Biltmore Circle, Suite C237

Phoenix, AZ 85016

Attn: Kent Wilson, CEO 

Email: kwilson@alpine4.com

10.6Jurisdiction; Service of Process. EACH PARTY: (A) CONSENTS TO THE PERSONAL JURISDICTION OF ANY STATE COURT LOCATED IN COLLIER COUNTY FLORIDA AND THE US DISTRICT COURT FOR THE MIDDLE DISTRICT OF FLORIDA (AND ANY CORRESPONDING APPELLATE COURT) IN ANY PROCEEDING ARISING OUT OF OR RELATING TO ANY TRANSACTION DOCUMENT (UNLESS OTHERWISE STATED TO THE CONTRARY IN ANY TRANSACTION DOCUMENT); (B) WAIVES ANY VENUE OR INCONVENIENT FORUM DEFENSE TO ANY PROCEEDING MAINTAINED IN SUCH COURTS; AND (C) EXCEPT AS OTHERWISE PROVIDED IN THIS AGREEMENT, AGREES NOT TO INITIATE ANY PROCEEDING ARISING OUT OF OR RELATING TO ANY TRANSACTION DOCUMENT (UNLESS OTHERWISE STATED TO THE CONTRARY IN ANY TRANSACTION DOCUMENT) IN ANY OTHER COURT OR FORUM. PROCESS IN ANY SUCH PROCEEDING MAY BE SERVED ON ANY PARTY ANYWHERE IN THE WORLD.  

10.7Venue. ANY LEGAL SUIT, ACTION OR PROCEEDING ARISING OUT OF OR BASED UPON THIS AGREEMENT, THE OTHER TRANSACTION DOCUMENTS, OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY MAY BE INSTITUTED IN THE US DISTRICT COURT FOR THE MIDDLE DISTRICT OF FLORIDA OR THE COURTS OF THE STATE OF FLORIDA LOCATED IN THE COUNTY OF COLLIER FLORIDA, AND EACH PARTY IRREVOCABLY SUBMITS TO THE EXCLUSIVE JURISDICTION OF SUCH COURTS IN ANY SUCH SUIT, ACTION OR PROCEEDING. THE PARTIES IRREVOCABLY AND UNCONDITIONALLY WAIVE ANY OBJECTION TO THE LAYING OF VENUE OF ANY SUIT,  

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ACTION OR ANY PROCEEDING IN SUCH COURTS AND IRREVOCABLY WAIVE AND AGREE NOT TO PLEAD OR CLAIM IN ANY SUCH COURT THAT ANY SUCH SUIT, ACTION OR PROCEEDING BROUGHT IN ANY SUCH COURT HAS BEEN BROUGHT IN AN INCONVENIENT FORUM.

10.8Governing Law. This Agreement and all other Transaction Documents (unless otherwise stated therein) will be governed by the laws of the State of Florida without giving effect to any choice or conflict of law principles of any jurisdiction. 

10.9Amendments and Waivers. No amendment of any provision of this Agreement will be valid unless the amendment is in writing and signed by the Buyer and the Seller. No waiver of any provision of this Agreement will be valid unless the waiver is in writing and signed by the waiving Party. The failure of a Party at any time to require performance of any provision of this Agreement will not affect such Party's rights at a later time to enforce such provision. No waiver by any Party of any breach of this Agreement will be deemed to extend to any other breach hereunder or affect in any way any rights arising by virtue of any other breach. 

10.10Severability. Any provision of this Agreement that is determined by any court of competent jurisdiction to be invalid or unenforceable will not affect the validity or enforceability of any other provision hereof or the invalid or unenforceable provision in any other situation or in any other jurisdiction. Any provision of this Agreement held invalid or unenforceable only in part or degree will remain in full force and effect to the extent not held invalid or unenforceable. 

10.11Expenses. The Company and KAI will bear all expenses incurred by the Company and KAI or any Representative of the Company or KAI in connection with the Transactions contemplated to be performed before or on the Closing Date and such expenses will have been paid or accrued by the Company and KAI prior to the Closing Date. The Seller will bear all expenses incurred by the Seller or any of his Representatives in connection with the Transactions contemplated to be performed before or on the Closing Date. Except as otherwise expressly provided in this Agreement, the Buyer will bear all expenses incurred by the Buyer or any of its Representatives in connection with the Transactions contemplated to be performed before or on the Closing Date. In the event of termination of this Agreement, the obligation of each Party to pay its own expenses will be subject to any rights of such Party arising from a breach of this Agreement by another Party. 

10.12Construction. The Article and Section headings in this Agreement are inserted for convenience only and are not intended to affect the interpretation of this Agreement. Any reference in this Agreement to any Article or Section refers to the corresponding Article or Section of this Agreement. Any reference in this Agreement to any Schedule or Exhibit refers to the corresponding Schedule or Exhibit attached to this Agreement and all such Schedules and Exhibits are incorporated herein by reference. The word "including" in this Agreement means "including without limitation." This Agreement will be construed as if drafted jointly by the Parties and no presumption or burden of proof will arise favoring or disfavoring any Party by virtue of the authorship of any provision in this Agreement. Unless the context requires otherwise, any reference to any Law will be deemed also to refer to all amendments and successor provisions thereto and all rules and regulations promulgated thereunder, in each case as in effect as of the date hereof and the Closing Date. All accounting terms not specifically defined in this Agreement will be construed in accordance with GAAP as in effect on the date hereof (unless another effective date is specified herein). The word "or" in this Agreement is disjunctive but not necessarily exclusive. All words in this Agreement will be construed to be of such gender or number as the circumstances require. References in this Agreement to time periods in terms of a certain number of days mean calendar days unless expressly stated herein to be Business Days. In interpreting and enforcing this Agreement, each representation and warranty will be given independent significance of fact and will not be deemed superseded or modified by any other such representation or warranty. A reference to a  

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subsection without further reference to a Section is a reference to such subsection as contained in the same Section in which the reference appears, and this rule will also apply to paragraphs and other subdivisions. The terms "hereof," "herein," "hereunder," "hereby" and "herewith" and words of similar import will, unless otherwise stated, be construed to refer to this Agreement as a whole and not to any particular provision of this Agreement;

10.13Specific Performance. Each Party acknowledges that the other Parties would be damaged irreparably and would have no adequate remedy of law if any provision of this Agreement is not performed in accordance with its specific terms or otherwise is breached. Accordingly, each Party agrees that the other Parties will be entitled to an injunction to prevent any breach of any provision of this Agreement and to enforce specifically any provision of this Agreement, in addition to any other remedy to which they may be entitled and without having to prove the inadequacy of any other remedy they may have at law or in equity and without being required to post bond or other security. 

10.14Further Assurances. Each Party agrees to furnish upon request to any other Party such further information, to execute and deliver to any other Party such other documents, and to do such other acts and things, all as any other Party may reasonably request for the purpose of carrying out the intent of the Transaction Documents. 

10.15Public Announcement. Because the Buyer is a publicly reporting company, the Seller agrees that upon Closing, the Buyer shall have the right to make such announcement, and provide such details about the purchase of the Interests by the Buyer from the Seller as the Buyer deems appropriate, provided that the Buyer show the Seller such announcement prior to making it. The Seller further agrees that it shall not make any other announcement of this Agreement or the transaction contemplated hereby or the Transactions without the prior approval of the Buyer. 

10.16Attorneys' Fees. The prevailing party(ies) in any Proceeding relating to the enforcement or interpretation of this Agreement may recover from the unsuccessful party(ies) all costs, expenses, and reasonable attorney's fees (including expert witness and other consultants' fees and costs) relating to or arising out of: (a) the Proceeding (whether or not the Proceeding proceeds to judgment); and (b) any post-judgment or post-award proceeding including one to enforce or collect any judgment or award resulting from the Proceeding. All such judgments and awards shall contain a specific provision for the recovery of all such subsequently incurred costs, expenses and reasonable attorney's fees. 

10.17Conflict Waiver; Attorney-Client Privilege ARTICLE I.  

(a)Each of the Parties hereto acknowledges and agrees, on its own behalf and on behalf of its directors, members, shareholders, partners, officers, employees and Affiliates, that: 

(i)Bahnsen Legal Group, PLLC has acted as counsel to: (A) the Company; (B) KAI; and (C) the Seller and their Affiliates (collectively, the "Seller Group"), in connection with the negotiation, preparation, execution and delivery of this Agreement and the consummation of the Transactions. The Buyer agrees, and shall cause the Company and KAI to agree, that, following consummation of the Transactions, such representation and any prior representation of the Company or KAI by Bahnsen Legal Group, PLLC (or any successor) ("Seller Group Law Firm") shall not preclude Seller Group Law Firm from serving as counsel to the Seller Group or any manager, member, partner, officer or employee of the Seller Group, in connection with any litigation, claim or obligation arising out of or relating to this Agreement or the Transactions.  

(ii)The Buyer shall not, and shall cause the Company and KAI not to, seek or have Seller Group Law Firm disqualified from any such representation based on the prior  

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representation of the Seller Group by Seller Group Law Firm. Each of the Parties hereto hereby consents thereto and waives any conflict of interest arising from such prior representation, and each of such parties shall cause any of its Affiliates to consent to waive any conflict of interest arising from such representation. Each of the Parties acknowledges that such consent and waiver is voluntary, that it has been carefully considered, and that the Parties have consulted with counsel or have been advised they should do so in connection herewith. The covenants, consent and waiver contained in this Section 10.17(a) shall not be deemed exclusive of any other rights to which Seller Group Law Firm is entitled whether pursuant to law, contract or otherwise.

(b)All communications between the Seller Group, on the one hand, and Seller Group Law Firm, on the other hand, relating to the negotiation, preparation, execution and delivery of this Agreement and the consummation of the Transactions (the "Privileged Communications") shall be deemed to be attorney-client privileged and the expectation of client confidence relating thereto shall belong solely to the Seller and shall not pass to or be claimed by the Buyer, KAI or the Company. Accordingly, the Buyer, KAI and the Company shall not have access to any Privileged Communications or to the files of Seller Group Law Firm relating to such engagement from and after Closing and may not use or rely on any Privileged Communications in any claim, dispute, action, suit or proceeding against or involving any of the Seller Group. Without limiting the generality of the foregoing, from and after the Closing: (i) the Seller (and not the Buyer, KAI or the Company) shall be the sole holder of the attorney-client privilege with respect to such engagement, and none of the Buyer, KAI or the Company shall be a holder thereof; (ii) to the extent that files of Seller Group Law Firm in respect of such engagement constitute property of the client, only the Seller (and not the Buyer, KAI or the Company) shall hold such property rights; and (iii) Seller Group Law Firm shall have no duty whatsoever to reveal or disclose any such attorney-client communications or files to the Buyer, KAI or the Company by reason of any attorney-client relationship between Seller Group Law Firm and KAI, the Seller and the Company or otherwise. Notwithstanding the foregoing, in the event that a dispute arises between the Buyer or its Affiliates (including KAI and the Company), on the one hand, and a third party other than any of the Seller Group, on the other hand, the Buyer and its Affiliates (including KAI and the Company) may assert the attorney-client privilege to prevent disclosure of confidential communications to such third party; provided, however, that neither the Buyer nor any of its Affiliates (including KAI and the Company) may waive such privilege without the prior written consent of the Seller, which consent shall not be unreasonably withheld, conditioned or delayed. In the event that the Buyer or any of its Affiliates (including KAI and the Company) is legally required by Order or otherwise legally required to access or obtain a copy of all or a portion of the Privileged Communications, to the extent: (A) permitted by applicable Law; and (B) advisable in the opinion of the Buyer's counsel, then the Buyer shall immediately (and, in any event, within two Business Days) notify the Seller in writing so that the Seller can seek a protective order. 

(c)This Section 10.17 is intended for the benefit of, and shall be enforceable by, Seller Group Law Firm. This Section shall be irrevocable, and no term of this Section may be amended, waived or modified, without the prior written consent of Seller Group Law Firm. 

(Signature Page Follows)

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The Parties have executed and delivered this Membership Interest Purchase Agreement as of the date first written above.

	 

	BUYER:

	 

	 

	 

	 

	A4 Manufacturing, Inc.

	 

	 

	 

	 

	By:

	/s/ Kent B. Wilson

	 

	 

	Kent B. Wilson, Chief Executive Officer

	 

	 

	 

	 

	PARENT:

	 

	 

	 

	 

	Alpine 4 Holdings, Inc.

	 

	 

	 

	 

	By:

	/s/ Kent B. Wilson

	 

	 

	Kent B. Wilson, Chief Executive Officer

	 

	 

	 

	 

	SELLER:

	 

	 

	 

	 

	 

	/s/ Kevin Thomas

	 

	 

	Kevin Thomas, an individual

	 

	 

	 

	 

	KAI:

	 

	 

	 

	 

	KAI Enterprises, LLC

	 

	 

	 

	 

	By:

	/s/ Kevin Thomas

	 

	 

	Kevin Thomas, Managing Member

	 

	 

	 

	 

	COMPANY:

	 

	 

	 

	 

	Alternative Laboratories, LLC

	 

	 

	 

	 

	By:

	/s/ Kevin Thomas

	 

	 

	Kevin Thomas, Manager

(Signature Page to Membership Interest Purchase Agreement)

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