Document:

Exhibit
10.7

 

EXPION360
INC.

2021
EMPLOYEE STOCK PURCHASE
PLAN

 

ARTICLE
1 PURPOSE

 

The
Plan’s purpose is to assist employees
of the Company and its Designated Subsidiaries
in acquiring a stock ownership interest in
the Company, and to help such employees provide for
their future security and to encourage
them to remain in the employment of the
Company and its Subsidiaries.

 

The
Plan consists of two components: the Section
423 Component and the Non-Section 423 Component.
The Section 423 Component is intended
to qualify as an “employee stock purchase plan”
under Section 423 of the Code and shall be
administered, interpreted and construed in
a manner consistent with the requirements of Section
423 of the Code. In addition, this
Plan authorizes the grant of Options under
the Non-Section 423 Component, which need not qualify
as Options granted pursuant to an “employee stock purchase plan” under Section
423 of the Code; such Options granted under the
Non-Section 423 Component shall be granted
pursuant to separate Offerings containing
such sub-plans, appendices, rules or procedures
as may be adopted by the Administrator
and designed to achieve tax, securities
laws or other objectives for Eligible
Employees and the Designated Subsidiaries in locations
outside the United States. Except as
otherwise provided herein, the Non-Section 423 Component
will operate and be administered in the
same manner as the Section 423 Component.
Offerings intended to be made under the Non-Section
423 Component will be designated
as such by the Administrator at or prior
to the time of such Offering.

 

For
purposes of this
Plan, the Administrator may
designate separate Offerings under
the Plan, the terms
of which need not be identical, in which
Eligible Employees will participate, even if the dates of the
applicable Offering Period(s) in each such Offering is identical, provided that the
terms of participation are the same
within each separate Offering under the Section 423 Component as determined under Section
423 of the Code. Solely by way of example and
without limiting the foregoing, the Company
could, but shall not be required
to, provide for simultaneous Offerings under the Section
423 Component and the Non-Section 423
Component of the Plan.

 

ARTICLE
2 DEFINITIONS

 

As
used in the Plan,
the following words and phrases have the
meanings specified below, unless the context clearly
indicates otherwise:

 

2.1              
“Administrator” means the Committee,
or such individuals to which authority
to administer the Plan
has been delegated under Section 7.1 hereof.

 

2.2              
“Agent” means the brokerage firm,
bank or other financial institution, entity or person(s),
if any, engaged, retained, appointed or
authorized to act as the agent of
the Company or an Employee with regard
to the Plan.

 

		2.3	“Board”
                                            means the
                                            Board of
                                            Directors of the Company.

 

2.4              
“Code” means the U.S. Internal
Revenue Code of 1986, as amended, and all regulations,
guidance, compliance programs and other interpretative
authority issued thereunder.

 

		2.5	“Committee”
                                            means the
                                            Compensation Committee of
                                            the Board.

 

		2.6	“Common
                                            Stock” means the common stock
                                            of the Company.

 

		2.7	“Company”
                                            means Expion360 Inc., a
                                            Nevada corporation, or any successor.

 

2.8              
“Compensation” of an Employee
means the regular earnings or base salary paid
to the Employee from the Company on
each Payday as compensation for services to
the Company or any Designated Subsidiary, before deduction
for any salary deferral contributions made by the Employee
to any tax-qualified or nonqualified deferred
compensation plan, including overtime, shift differentials, vacation pay, salaried production
schedule premiums, holiday pay, jury duty
pay, funeral leave pay, paid time off, military
pay and prior week adjustments, but excluding
bonuses and commissions, meal and rest break premiums
under California state law or similar
amounts paid in accordance with applicable
law of any other jurisdiction, education
or tuition reimbursements, imputed income arising under any group
insurance or benefit program, travel
expenses, business and moving reimbursements, including tax gross
ups and taxable mileage allowance, income received in connection
with any stock options, restricted stock, restricted stock units or other
compensatory equity awards and all contributions made by the Company
or any Designated Subsidiary for the Employee’s
benefit under any employee benefit plan now or hereafter
established. For any Participants in non-U.S.
jurisdictions, the Administrator will have discretion to determine
the application of this definition. Compensation shall be calculated
before deduction of any income or employment
tax withholdings, but such amounts shall
be withheld from the Employee’s net income.

     

     

    

 

2.9              
“Designated Subsidiary” means each Subsidiary,
including any Subsidiary in existence
on the Effective Date and any Subsidiary formed
or acquired following the Effective Date, that has
been designated by the Board or Committee from
time to time in its sole discretion as
eligible to participate in
the Plan, in accordance with
Section 7.2 hereof, such designation
to specify whether such participation is in the Section
423 Component or Non-Section
423 Component. A Designated Subsidiary
may participate in either the Section
423 Component or Non-Section 423 Component,
but not both; provided that a Subsidiary that, for U.S. tax
purposes, is disregarded from the Company
or any Subsidiary that participates
in the Section 423 Component shall automatically constitute a Designated
Subsidiary that participates in the Section 423 Component. The designation
by the Administrator of Designated Subsidiaries
and changes in such designations by the Administrator
shall not require stockholder approval. Only Subsidiary Corporations may be designated
as Designated Subsidiaries for purposes of
the Section 423 Component, and if an entity
does not so qualify, it shall automatically
be deemed to  constitute
a Designated Subsidiary that participates in the
Non-Section 423 Component.

 

		2.10	“Effective
                                            Date” means the date
                                            immediately prior to the
                                            Public Trading Date.

2.11          
 “Eligible Employee” means, except as otherwise provided by the Administrator
or in an Offering Document, an Employee:

 

(a) 
who is customarily scheduled to work
at least 20 hours per
week;

 

		(b)	whose
                                            customary employment is
                                            more than five months in a calendar
                                            year; and

 

(c) 
who, after the granting of the
Option, would not be deemed for purposes
of Section 423(b)(3) of the Code to
possess 5% or more of
the total combined voting power or value
of all classes of
stock of the Company or any Subsidiary.

 

For
purposes of clause
(c), the rules of Section
424(d) of the Code with regard to the
attribution of stock ownership shall apply in determining
the stock ownership of an individual,
and stock which an Employee may purchase under
outstanding options shall be treated as
stock owned by the Employee.

 

Notwithstanding
the foregoing,
the Administrator may exclude
from participation in the Section 423
Component as an Eligible Employee:

 

(x) 
any Employee that is a “highly
compensated employee” of the Company or any Designated
Subsidiary (within the meaning of Section 414(q)
of the Code), or that is such
a “highly compensated employee” (A)
with compensation above a specified level,
(B) who is an officer
or (C) who is subject to the disclosure
requirements of Section 16(a) of the
Exchange Act; or

 

(y) 
any Employee who is a citizen or resident
of a foreign jurisdiction (without regard
to whether they are also a citizen of the United
States or a resident alien (within the
meaning of Section 7701(b)(1)(A) of the
Code)) if either (A) the grant of the
Option is prohibited under the laws of
the jurisdiction governing such Employee, or
(B) compliance with the laws
of the foreign jurisdiction would cause the Section
423 Component, any Offering thereunder or
an Option granted thereunder to violate the requirements
of Section 423 of the Code;

 

provided
that any exclusion
in clauses (x) or (y) shall be
applied in an identical manner under each Offering
to all Employees of the
Company and all Designated Subsidiaries, in accordance
with Treas. Reg. § 1.423-2(e).

 

Notwithstanding
the foregoing,
the first sentence in this definition shall
apply in determining who is an “Eligible
Employee,” except (a) the Administrator may limit
eligibility further within the Company or a Designated Subsidiary so as to
only designate some Employees of the
Company or a Designated Subsidiary as Eligible
Employees, and (b) to the extent the restrictions
in the first sentence in this definition are
not consistent with applicable local laws, the applicable local laws shall control, in each case,
in accordance with the requirements of
Section 423 of the Code with respect to the
Section 423 Component.

 

2.12           “Employee”
means an individual who renders services to a Designated Subsidiary in the
status of an employee, and, with respect
to the Section 423 Component, a person
who is an officer or other
employee (as defined in accordance
with Section 3401(c) of the Code) of the
Company or any Designated Subsidiary. The Company
shall determine in good faith and in the exercise
of its discretion whether an individual has
become or has ceased to be
an Employee and the effective date of
such individual’s attainment or termination
of such status. For purposes of
an individual’s participation in, or
other rights under the Plan, all such determinations
by the Company shall be final,
binding and conclusive, notwithstanding that any court
of law or governmental agency subsequently makes
a contrary determination. For purposes
of the Plan, the employment relationship shall
be treated as continuing intact while
the individual is on sick leave or other
leave of absence approved by the Company or
a Designated Subsidiary (which, for purposes of
the Section 423 Component, must meet the requirements
of Treas. Reg.
§ 1.421-7(h)(2)).
For purposes of
the Section 423 Component, where the period of an
approved leave of absence exceeds three months, or such
other period specified in Treas. Reg. § 1.421-1(h)(2),
and the individual’s right to reemployment
is not provided either by statute or
contract, the employment relationship shall
be deemed to have
terminated for purposes of the Plan
on the first day immediately following such three-month
period, or such other period specified
in Treas. Reg. § 1.421-1(h)(2).

     

     

    

 

		2.13	“Enrollment
                                            Date” means the first date of
                                            each Offering Period.

 

		2.14	“Exchange
                                            Act” means the
                                            U.S. Securities Exchange Act of
                                            1934, as amended.

 

2.15          
“Exercise Date” means the last Trading Day
of each Purchase Period, except as provided
in Section 5.2 hereof.

 

2.16          
“Fair Market Value” means,
as of any date, the value
of Common Stock determined as follows:

 

(a)               
If the Common Stock is (i)
listed on any established securities exchange (such as the New
York Stock Exchange or Nasdaq
Stock Market), (ii) listed on any national market
system or (iii) listed, quoted or
traded on any automated quotation system,
its Fair Market Value shall be the closing
sales price for a share of Common Stock
as quoted on such exchange or system for such
date or, if there is no closing
sales price for a share of Common Stock
on the date in question, the closing sales price
for a share of Common Stock on the last
preceding date for which such quotation exists, as reported in The
Wall Street Journal or such other source as the Administrator
deems reliable;

 

(b)               
If the Common Stock is not listed on an established
securities exchange, national market system
or automated quotation system, but the Common
Stock is regularly quoted by a recognized securities
dealer, its Fair Market Value shall be the
mean of the high bid and low asked prices for
such date or, if there are no high
bid and low asked prices for a share
of Common Stock on such date, the high
bid and low asked prices for a share
of Common Stock on the last preceding
date for which such information exists, as reported
in The Wall Street Journal or such
other source as the Administrator deems
reliable; or

 

(c)               
If the Common Stock is neither
listed on an established securities exchange, national market
system or automated quotation system
nor regularly quoted by a recognized securities dealer,
its Fair Market Value shall be established
by the Administrator in good faith
(and, with respect to the
initial Offering Period of the
Plan, as set forth in the Offering Document
for the initial Offering Period).

 

2.17          
“Grant Date” means the first Trading
Day of an Offering Period (or, with respect
to the initial Offering Period of the Plan,
such date set forth in the Offering Document approved
by the Administrator with respect to the initial
Offering Period).

 

		2.18	“New
                                            Exercise Date” has the meaning set
                                            forth in Section 5.2(b) hereof.

 

2.19          
“Non-Section 423 Component” means those Offerings under the Plan,
together with the sub-plans, appendices, rules
or procedures, if any, adopted by the
Administrator as a part of this Plan, in
each case, pursuant to which Options
may be granted to Eligible Employees that need
not satisfy the requirements for Options granted pursuant to an “employee stock
purchase plan” that are set forth under Section
423 of the Code.

 

2.20            
“Offering” means an offer under
the Plan of an Option that may
be exercised during an Offering Period
as further described in Article 4 hereof.
Unless otherwise specified by the Administrator, each Offering
to the Eligible Employees of the Company
or a Designated Subsidiary shall be deemed a separate
Offering, even if the dates and other
terms of the applicable Offering Periods of
each such Offering are identical and the provisions of the Plan
will separately apply to each Offering. To the
extent permitted by Treas. Reg. § 1.423-2(a)(1),
the terms of each separate Offering under the Section 423 Component need not
be identical, provided that the terms
of the Section 423 Component and an
Offering thereunder together satisfy Treas. Reg. § 1.423-2(a)(2)
and (a)(3).

 

2.21          
“Offering Period” means such period of time
commencing on such date(s) as determined
by the Board or Committee, in its
discretion, and with respect to which Options shall be granted
to Participants. The duration and timing of Offering
Periods may be established or
changed by the Board or Committee
at any time, in its
sole discretion. Notwithstanding the foregoing, in no event
may an Offering Period exceed 27 months.

 

2.22          
“Option” means the right to purchase shares of Common
Stock pursuant to the Plan during each
Offering Period.

 

2.23          
“Option Price” means the purchase
price of a share of Common
Stock hereunder as provided in Section
4.2 hereof.

 

2.24          
“Parent” means any entity that
is a parent corporation of the Company
within the meaning of Section 424 of the
Code.

 

		2.25	“Participant”
                                            means any
                                            Eligible Employee who elects to participate
                                            in the Plan.

 

2.26          
“Payday” means the regular and recurring
established day for payment of Compensation
to an Employee of the Company or any
Designated Subsidiary.

     

     

    

2.27          
 “Plan” means this 2021 Employee Stock Purchase Plan, including both the
Section 423 Component and Non-Section
423 Component and any other sub-plans
or appendices hereto, as amended from time
to time.

 

2.28          
“Plan Account” means a bookkeeping
account established and maintained by the Company
in the name of each Participant.

 

2.29          
“Pricing Date”
means the date upon which the Company’s
Registration Statement on Form S-1 filed with
the U.S. Securities and Exchange
Commission relating to the underwritten public offering of shares
of Common Stock becomes effective.

 

2.30          
“Public Trading Date” means the first date upon which
Common Stock is listed (or approved for listing)
upon notice of issuance
on any securities exchange or designated
(or approved for designation) upon notice of issuance as a national
market security on an interdealer
quotation system.

 

2.31          
“Purchase Period” means such period of time
commencing on such dates as determined
by the Board or Committee, in its
discretion, within each Offering Period. The duration and timing
of Purchase Periods may be established
or changed by the Board
or Committee at any time,
in its sole discretion. Notwithstanding the foregoing,
in no event may a Purchase
Period exceed the duration of the Offering Period under which it is established.

 

2.32          
“Section 409A” means Section 409A
of the Code and the
regulations promulgated thereunder by the United States Treasury Department, as amended
or as may be amended
from time to time.

 

2.33          
“Section 423 Component” means
those Offerings under the Plan that are intended
to meet the requirements under Section 423(b)
of the Code.

 

2.34          
“Subsidiary” means (a) any Subsidiary
Corporation, and (b) with respect to any
Offering pursuant to the Non-Section 423 Component
only, Subsidiary may also include any corporate
or noncorporate entity in which the
Company has a direct or indirect
equity interest or significant business relationship.

 

2.35          
“Subsidiary Corporation” shall mean any corporation,
other than the Company, in an unbroken chain of corporations
beginning with the Company if, at the
time of the determination, each of
the corporations other than the last corporation
in an unbroken chain owns stock
possessing 50% or more of the total combined
voting power of all classes of stock
in one of the other corporations in such
chain, or any other entity that is a subsidiary
corporation of the Company within the meaning
of Section 424 of the Code.

 

2.36          
“Trading Day” means a day on
which national stock exchanges in the United States
are open for trading.

 

		2.37	“Treas.
                                            Reg.” means U.S. Department of
                                            the Treasury regulations.

     

     

    
		2.38	“Withdrawal
                                            Election” has
                                            the meaning set forth in Section
                                            6.1(a) hereof.

 

ARTICLE
3 PARTICIPATION

 

		3.1	Eligibility.

 

(a)               
Any Eligible Employee who is employed
by the Company or a Designated Subsidiary
on a given Enrollment Date for an Offering Period shall be eligible
to participate in the Plan during such
Offering Period, subject to the requirements of
Articles 4 and 5 hereof, and, for
the Section 423 Component, the limitations
imposed by Section 423(b) of the Code.

 

(b)               
No Eligible Employee shall be granted an Option
under the Section 423 Component which permits the Participant’s rights to purchase
shares of Common Stock under the Plan,
and to purchase stock under all other employee
stock purchase plans of the Company, any Parent
or any Subsidiary subject to Section
423 of the Code, to accrue at a rate
which exceeds $25,000 of fair market
value of such stock (determined at the
time such Option is granted)
for each calendar year in which such Option is outstanding
at any time. The limitation under this Section
3.1(b) shall be applied in accordance
with Section 423(b)(8) of the
Code.

 

		3.2	Election
                                            to
                                            Participate;
                                            Payroll
                                            Deductions

 

(a)               
Except as provided in Sections
3.2(e) and 3.3 hereof or in an applicable Offering
Document, an Eligible Employee may become
a Participant in the Plan only by means
of payroll deduction. Each individual who
is an Eligible Employee as of an Offering
Period’s Enrollment Date may elect
to participate in such Offering Period and
the Plan by delivering to the
Company a payroll deduction authorization no later
than the period of time prior to the
applicable Enrollment Date that is determined
by the Administrator, in its sole discretion.

 

(b)               
Subject to Section 3.1(b) hereof and except
as may otherwise be determined
by the Administrator and/or as set forth
in the Offering Document, payroll deductions (i) shall equal at least
1% of the Participant’s Compensation
as of each Payday
of the Offering Period following the
Enrollment Date, but not more than 15% of the Participant’s
Compensation as of each Payday of the Offering
Period following the Enrollment Date; and (ii) will be
expressed as a whole number percentage. Amounts
deducted from a Participant’s Compensation with respect to an Offering
Period pursuant to this Section

3.2
shall be deducted each Payday through payroll deduction
and credited to the Participant’s Plan Account; provided that for the first Offering
Period, payroll deductions shall not begin until such date determined
by the Administrator, in its sole discretion.

 

(c)               
Unless otherwise determined by the Administrator and/or
as set forth in the Offering Document, following
at least one payroll deduction, a Participant
may decrease (to as low as
1%) the amount deducted from such Participant’s
Compensation only once during an Offering Period
by delivering written notice of such decrease
in such form as may be established
by the Administrator to be effective
no later
than ten calendar days after the Company’s receipt of such
notice (or such shorter or longer period
of time determined by the Administrator
and/or as set forth in the Offering Document). Unless otherwise determined by the Administrator
and/or as set forth in the Offering Document,
a Participant may not increase
the amount deducted from such Participant’s
Compensation during an Offering Period.

 

(d)                 
Upon the completion of
an Offering Period, each Participant
in such Offering Period shall automatically participate in the immediately
following Offering Period at the same payroll deduction percentage
as in effect at the termination of
such Offering Period, unless such Participant
delivers to the Company a different election with respect to the successive
Offering Period in accordance with Section
3.2(a) hereof, or unless such Participant becomes ineligible for participation
in the Plan. Such Participant will be
deemed to have accepted the terms
and conditions of the Plan, the applicable
Offering Document, any sub-plan, enrollment form,
subscription agreement and/or any other terms
and conditions of participation
in effect at the time each subsequent Offering
Period begins.

 

     

     

    

(e)               
Notwithstanding any other provisions of
the Plan to the contrary, in non-U.S.
jurisdictions where participation in the Plan through payroll deductions is prohibited,
the Administrator may provide that an Eligible Employee may elect to participate
through contributions to the Participant’s account under the Plan
in a form acceptable to the Administrator
in lieu of or in
addition to payroll deductions; provided, however, that, for
any Offering under the Section 423 Component,
the Administrator must determine that any alternative method of contribution
is applied on an equal and uniform
basis to all Eligible Employees in the
Offering.

 

(f)                
To determine which Designated Subsidiaries shall participate in the Non-Section
423 Component and which shall participate
in the Section 423 Component.

 

ARTICLE
4 

PURCHASE
OF SHARES

 

4.1              
Grant of Option.The
Company may make one or more
Offerings under the Plan, which may be
successive or overlapping
with one another, until the earlier of: (i)
the date on which the shares of
Common Stock available under the Plan have
been sold or (ii) the date
on which the Plan is suspended
or terminates. The Administrator shall designate
the terms and conditions of each Offering
in writing, including without limitation, the Offering
Period and the Purchase Periods, as set forth
in an offering document (the “Offering Document”). Each Participant shall
be granted an Option with respect to an Offering
Period on the applicable Grant Date. Subject to the
limitations of Section 3.1(b) hereof, the number of shares
of Common Stock subject to a Participant’s
Option shall be determined by dividing (a)
such Participant’s payroll deductions accumulated prior to an Exercise
Date and retained in the Participant’s
Plan Account on such Exercise Date by (b) the
applicable Option Price; provided that, unless otherwise set forth in the Offering Document,
in no event shall a Participant be permitted
to purchase during each Offering Period more
than 100,000 shares of Common Stock (subject
to any adjustment pursuant to Section 5.2 hereof).
The Administrator and/or the Offering Document
may, for future Offering Periods, increase
or decrease, in its absolute discretion, the maximum
number of shares of Common Stock that
a Participant may purchase
during such future Offering Periods. Each Option shall expire
on the last Exercise
Date for the applicable Offering Period immediately after the automatic exercise
of the Option in accordance with Section 4.3
hereof, unless such Option terminates earlier in accordance
with Article 6 hereof.

 

4.2              
Option Price.The “Option
Price” per share of Common Stock to be paid by a Participant
upon exercise of the Participant’s Option
on an Exercise Date for an Offering
Period shall equal 85% of the lesser
of the Fair Market Value of a share of Common
Stock on (a) the applicable Grant Date
and (b) the applicable Exercise Date, or such other price designated by the Administrator;
provided that in no event shall the Option
Price per share of Common Stock be less than the
par value per share of the Common Stock;
provided further, that no Option Price shall be designated
by the Administrator that would cause the Section
423 Component to fail to meet the requirements
under Section 423(b) of the Code.

 

		4.3	Purchase
                                            of
                                            Shares.

 

(a)               
On each Exercise Date for an Offering
Period, each Participant shall automatically and without any action on such
Participant’s part be deemed to have
exercised the Participant’s Option to purchase
at the applicable per share Option Price the largest
number of whole shares of Common Stock
which can be purchased
with the amount in the Participant’s
Plan Account. Except as may otherwise
be provided by the
Administrator with respect to any Offering and/or as set forth
in the Offering Document, any balance less
than the per share Option Price that is remaining in the Participant’s
Plan Account (after exercise of such Participant’s Option) as of the Exercise
Date shall be promptly refunded to the applicable
Participant.

 

(b)               
As soon as practicable following each Exercise
Date, the number of shares of Common Stock
purchased by such Participant pursuant to Section
4.3(a) hereof shall be delivered (either in share
certificate or book entry form), in the
Company’s sole discretion, to either
(i) the Participant or

(ii)
an account established in the Participant’s
name at a stock brokerage or other
financial services firm designated by the Company. If
the Company is required to obtain
from any commission or agency
authority to issue any such shares of
Common Stock, the Company shall seek
to obtain such authority. Inability of the Company
to obtain from any such commission or
agency authority which counsel for the Company deems
necessary for the lawful issuance of any
such shares shall relieve the Company from
liability to any Participant except to refund
to the Participant such Participant’s Plan Account balance, without interest thereon.
The Company may require that such shares
of Common Stock be retained with a particular
Agent for a designated period of time, including
until such shares are sold and/or may establish
other procedures to permit tracking of qualifying
and disqualifying dispositions of such shares
of Common Stock or to otherwise facilitate compliance
with applicable law or administration
of the Plan.

 

     

     

    

4.4               Automatic
Termination of Offering
Period.If the Fair Market Value of a share of
Common Stock on any Exercise Date (except the final
scheduled Exercise Date of any Offering
Period) is lower than the Fair Market Value of
a share of Common Stock
on the Grant Date for an Offering Period, then
such Offering Period shall terminate on such
Exercise Date after the automatic exercise of the
Option in accordance with Section 4.3 hereof,
and each Participant shall automatically be enrolled
in the Offering Period
that commences immediately following such Exercise
Date and such Participant’s payroll deduction authorization
shall remain in effect for such Offering Period.

 

4.5              
Transferability of Rights.An
Option granted under the Plan shall
not be transferable, other than by will or the applicable
laws of descent and distribution, and is exercisable
during the Participant’s lifetime only by the Participant.
No option or interest or
right to the Option shall be available
to pay off any debts, contracts or engagements
of the Participant or the Participant’s
successors in interest or shall
be subject to disposition
by pledge, encumbrance, assignment or any other
means whether such disposition be voluntary or involuntary
or by operation of law by judgment,
levy, attachment, garnishment or any other legal
or equitable proceedings (including bankruptcy), and any attempt
at disposition of the Option shall have
no effect.

 

ARTICLE
5

PROVISIONS
RELATING TO
COMMON STOCK

 

5.1              
Common Stock Reserved.Subject
to adjustment as provided in Section
5.2 hereof, the maximum number of shares
of Common Stock that shall be made
available for sale under the Plan shall
be the sum of (a) 2% of the
fully diluted shares of all classes of
the Company’s common stock outstanding
as of immediately following the Public
Trading Date and (b) an increase commencing
on January 1, 2022 and continuing annually
on the anniversary thereof through (and including)
January 1, 2031, equal to the lesser
of (A) 1% of the aggregate
number of shares of all
classes of the Company’s common
stock outstanding on the last day of the
immediately preceding calendar year and (B) such smaller number
of shares of Common Stock as determined
by the Board or the Committee;
provided, however, no more than 2,500,000 Shares may
be issued under the Plan. Shares made available for sale under the Plan
may be authorized but unissued shares, treasury
shares of Common Stock, or reacquired
shares reserved for issuance under the Plan. All or any portion
of such maximum number of shares may
be issued under the Section 423 Component.

 

		5.2	Adjustments
                                            Upon Changes in
                                            Capitalization, Dissolution, Liquidation, Merger
                                            or Asset Sale.

 

(a)                Changes
in Capitalization. Subject to any required
action by the stockholders of the Company,
the number of shares
of Common Stock which have
been authorized for issuance under the
Plan but not yet placed under Option, as well as
the price per share and the number of shares of
Common Stock covered by each Option under
the Plan which has not yet been exercised
shall be proportionately adjusted
for any increase or decrease in
the number of issued shares of Common Stock
resulting from a stock split, reverse stock split, stock
dividend, combination or reclassification of the Common Stock, or
any other increase or decrease in the
number of shares of Common
Stock effected without receipt of consideration
by the Company; provided, however, that conversion of any convertible
securities of the Company shall not
be deemed to have been “effected
without receipt of consideration.”
Such adjustment shall be made by the Administrator,
whose determination in that respect shall be final, binding and conclusive. Except
as expressly provided herein, no issuance
by the Company of shares of stock
of any class, or securities
convertible into shares of stock of any
class, shall affect, and no adjustment
by reason thereof
shall be made with
respect to, the number or price of
shares of Common Stock subject
to an Option.

 

(b)               
Dissolution or Liquidation.In
the event of the proposed dissolution
or liquidation of the
Company, the Offering Periods then in progress shall be shortened
by setting a new Exercise Date (the “New Exercise Date”), and shall
terminate immediately prior to the consummation of such proposed
dissolution or liquidation, unless provided otherwise
by the Administrator. The New Exercise Date
shall be before the date of the Company’s
proposed dissolution or liquidation. The Administrator shall notify each Participant
in writing prior to the New Exercise Date, that the Exercise Date for the Participant’s
Option has been changed to the New Exercise
Date and that the Participant’s Option shall
be exercised automatically on the New Exercise
Date, unless prior to such date the Participant
has withdrawn from the Offering Period as provided
in Section 6.1 hereof or
the Participant has ceased to be an
Eligible Employee as provided in Section
6.2 hereof.

     

     

    

 

(c)               
Merger or Asset
Sale.In the event
of a proposed sale of all
or substantially all of the assets of
the Company, or the merger of the Company
with or into another corporation, each
outstanding Option shall be assumed or an
equivalent Option substituted by the successor
corporation or a Parent or
Subsidiary of the successor corporation.
If the successor corporation refuses to assume
or substitute for the Option, any Offering Periods then in progress shall be shortened
by setting a New Exercise Date and any Offering
Periods then in progress shall end on the New
Exercise Date. The New Exercise Date shall be before the date of the Company’s
proposed sale or merger. The Administrator
shall notify each Participant in writing prior
to the New Exercise Date, that the Exercise
Date for the Participant’s Option has been
changed to the New Exercise Date and that
the Participant’s Option shall be exercised
automatically on the New Exercise Date, unless prior to such date the Participant
has withdrawn from the Offering Period as provided
in Section 6.1 hereof or the
Participant has ceased to be an Eligible Employee as provided
in Section 6.2 hereof.

 

5.3              
Insufficient Shares.If the Administrator
determines that, on a given Exercise Date, the number
of shares of Common
Stock with respect to which Options are to be exercised
may exceed the number of shares
of Common Stock remaining available for sale
under the Plan on such Exercise
Date, the Administrator shall make a pro
rata allocation of the
shares of Common Stock available for issuance
on such Exercise Date in as uniform
a manner as shall be practicable
and as it shall determine in its sole discretion
to be equitable among all Participants exercising
Options to purchase Common Stock on such
Exercise Date, and unless additional shares are authorized
for issuance under the Plan, no further
Offering Periods shall take place and the Plan shall terminate pursuant to Section
7.5 hereof. If an Offering
Period is so terminated, then the balance of
the amount credited to the Participant’s
Plan Account which has not been applied to the purchase
of shares of Common Stock shall be paid
to such Participant in one lump sum
in cash within 30 days after such Exercise
Date, without any interest thereon.

 

5.4              
Rights as Stockholders.
With respect to shares of Common Stock
subject to an Option, a Participant shall not
be deemed to be a stockholder of the
Company and shall not have any of the rights
or privileges of a stockholder. A Participant
shall have the rights and privileges of a stockholder
of the Company when, but not until, shares
of Common Stock have been deposited
in the designated brokerage account following exercise of the Participant’s Option.

 

ARTICLE
6

TERMINATION
OF PARTICIPATION

 

6.1              
Cessation of Contributions; Voluntary Withdrawal.

 

(a)               
A Participant may cease payroll
deductions during an Offering Period and elect
to withdraw from the Plan by delivering
written notice of such election to the Company
in such form and at such time prior
to the Exercise Date for such Offering Period as
may be established by the Administrator
(a “Withdrawal Election”). A Participant electing to cease
payroll deductions and withdraw from the Plan may
elect to (i) exercise the Participant’s Option in accordance
with Section 4.3 with the funds credited to the Participant’s
Plan Account prior to the date on which
the Withdrawal Election is given effect (in accordance
with the withdrawal procedures established by the
Administrator pursuant to this Section 6.1(a)) and after such exercise, shall cease
to participate in the Plan and/or (ii) withdraw all
of the funds then credited to the Participant’s
Plan Account as of the date on which the Withdrawal
Election is given effect (in accordance with the withdrawal procedures established
by the Administrator pursuant to this Section 6.1(a)),
in which case, amounts credited to such Plan
Account shall be returned to the Participant
in one lump-sum payment in cash within
30 days after such election
is received by the Company, without
any interest thereon, and the Participant shall cease to participate in the Plan and the Participant’s
Option for such Offering Period shall terminate. For clarity, during an Offering
Period, a Participant may elect to withdraw
from the Plan pursuant to clause (i) and then
subsequently elect to withdraw from the Plan pursuant to clause
(ii), but a withdrawal pursuant to clause (ii)
shall be final for such Offering
Period. Upon receipt of a Withdrawal
Election, the Participant’s payroll deduction authorization shall terminate.

 

(b)               
A Participant’s withdrawal from the Plan shall
not have any effect upon the Participant’s
eligibility to participate in any similar plan
which may hereafter be adopted
by the Company or in succeeding Offering Periods
which commence after the termination of the Offering Period from which the Participant
withdraws.

 

(c)               
Except as otherwise permitted by the Administrator
and/or as set forth in the Offering Document,
a Participant who ceases contributions to the Plan
during any Offering Period shall not be permitted
to resume contributions to the Plan during
that Offering Period.

 

6.2              
Termination of Eligibility.Subject
to Section 7.17, upon a Participant’s
ceasing to be an Eligible Employee, for any reason,
such Participant’s Option for the applicable
Offering Period shall automatically terminate, the Participant shall be deemed
to have elected to withdraw from the
Plan, and such Participant’s Plan Account shall
be paid to such Participant
or, in the case of the Participant’s
death, to the person or persons
entitled thereto pursuant to applicable law, within 30
days after such cessation of
being an Eligible Employee, without
any interest thereon.

     

     

    

ARTICLE
7 

GENERAL
PROVISIONS

 

7.1              
Administration.

 

(a)               
The Plan shall be administered by the Committee,
which shall be
composed of members
of the Board. To the extent permitted under
applicable law, the Committee may delegate administrative
or other tasks under the Plan to the services of
an Agent or Employees to assist
in the administration of the Plan, including
establishing and maintaining an individual
securities account under the Plan for each Participant.

 

(b)               
It shall be the duty of the Administrator
to conduct the general administration of the Plan in accordance
with the provisions of the
Plan. The Administrator shall have the
power, subject to, and within the limitations of,
the express provisions of the Plan:

 

(i) 
To establish and terminate Offerings;

 

(ii) 
To determine when and how Options shall be
granted and the provisions and terms
of each Offering (which need not be identical);

 

(iii)   
(iv) To impose a mandatory holding period pursuant
to which Participants may not dispose
of or transfer shares of
Common Stock purchased under the Plan
for a period of time determined by the Administrator
in its discretion; and

 

(v)
To construe and
interpret the Plan, the terms of any Offering
and the terms of the Options and to
adopt such rules for the administration, interpretation, and application
of the Plan as are consistent
therewith and to interpret, amend or revoke
any such rules. The Administrator, in the exercise of this
power, may correct any defect,
omission or inconsistency in the Plan,
any Offering or any Option, in a manner and
to the extent it shall deem necessary or expedient
to administer the Plan, subject to Section
423 of the Code for the Section 423
Component.

 

(c)               
The Administrator may adopt rules
or procedures relating to the operation and
administration of the Plan to accommodate the specific
requirements of local laws and procedures.
Without limiting the generality of the foregoing,
the Administrator is specifically authorized to adopt
rules and procedures regarding handling of participation elections, payroll deductions,
payment of interest, conversion of local
currency, payroll tax, withholding procedures and handling of stock
certificates which vary with local requirements. In its absolute
discretion, the Board may at any time and from time
to time exercise any and all
rights and duties of the Administrator under the Plan.

 

(d)               
The Administrator may adopt sub-plans
applicable to particular Designated Subsidiaries or locations,
which sub-plans may be designed to be
outside the scope of Section
423 of the Code. The rules of
such sub-plans may take precedence over other provisions of
this Plan, with the exception of Section
5.1 hereof, but unless otherwise superseded
by the terms of such sub-plan, the provisions
of this Plan shall govern the operation
of such sub-plan.

 

(e)               
All expenses and liabilities incurred by the Administrator
in connection with the administration
of the Plan shall be borne by the Company.
The Administrator may, with the approval
of the Committee, employ attorneys, consultants, accountants, appraisers, brokers
or other persons. The Administrator,
the Company and its officers and directors
shall be entitled to rely upon the
advice, opinions or valuations of
any such persons. All actions taken and all
interpretations and determinations made by the Administrator
in good faith shall be final and binding
upon all Participants, the Company and all
other interested persons. No member of the Board
or Administrator shall be personally
liable for any action, determination or
interpretation made in good faith with
respect to the Plan or the options, and
all members of the Board or
Administrator shall be fully protected
by the Company in respect to any
such action, determination, or interpretation.

     

     

    

 

7.2              
Designation of Subsidiary
Corporations. The Board or Administrator
shall designate from time to time
the Subsidiaries that shall constitute Designated Subsidiaries, and determine
whether such Designated Subsidiaries shall participate in the Section
423 Component or Non-Section
423 Component. The Board or Administrator may
designate a Subsidiary, or terminate
the designation of a Subsidiary,
without the approval of the stockholders of the Company.

 

7.3              
Reports.Individual accounts shall be maintained
for each Participant in the Plan. Statements
of Plan Accounts shall be made available
to Participants at least annually, which statements
shall set forth the amounts of payroll deductions,
the Option Price, the number of shares
purchased and the remaining cash balance, if any.

 

7.4              
No Right to Employment.Nothing
in the Plan shall be construed to give
any person (including any Participant)
the right to remain in the employ
of the Company, a Parent or
a Subsidiary or to affect the right
of the Company, any Parent
or any Subsidiary to terminate
the employment of any person (including any Participant)
at any time, with or without cause, which right
is expressly reserved.

 

		7.5	Amendment
                                            and
                                            Termination of the Plan.

 

(a)                 
The Board may, in its sole
discretion, amend, suspend or terminate the Plan at any time
and from time to time. To the
extent necessary to comply with Section 423
of the Code (or any successor rule or
provision), with respect to the
Section 423 Component, or any other
applicable law, regulation or stock exchange rule, the Company
shall obtain stockholder approval of any such amendment to the
Plan in such a manner and to such a
degree as required by Section
423 of the Code or
such other law, regulation or rule.

 

(b)               
If the Administrator determines that the ongoing
operation of the Plan may
result in unfavorable financial accounting consequences, the Administrator
may, to the extent permitted under Section 423
of the Code, for the Section 423 Component,
in its discretion and, to the extent necessary or desirable,
modify or amend the Plan to reduce
or eliminate such accounting consequence including,
but not limited to:

(i) 
 altering the Option Price for any Offering Period
including an Offering Period underway at
the time of the change
in Option Price;

 

(ii) 
shortening any Offering Period so that
the Offering Period ends on a new Exercise
Date, including an Offering Period underway at the
time of the Administrator action; and

 

		(iii)	allocating
                                            shares of
                                            Common Stock.

 

Such
modifications or amendments
shall not require stockholder approval or
the consent of any Participant.

 

(c)               
Upon termination of the Plan, the balance
in each Participant’s Plan Account shall be refunded
as soon as practicable after such termination, without any interest
thereon.

 

7.6              
Use of Funds; No Interest Paid.
All funds received by the Company by reason
of purchase of
shares of Common Stock under the
Plan shall be included in the general funds
of the Company free of any trust or
other restriction and may be used
for any corporate purpose, except for funds contributed
under Offerings in which the local
law of a non-U.S. jurisdiction requires that contributions to the Plan
by Participants be segregated from the
Company’s general corporate funds and/or deposited with an independent
third party for Participants in non-U.S.
jurisdictions. No interest shall be paid to
any Participant or credited
under the Plan, except as may be required
by local law in a non-U.S. jurisdiction.
If the segregation of funds
and/or payment of interest on any Participant’s
account is so required, such provisions shall
apply to all Participants in the relevant Offering
except to the extent otherwise permitted by Treas.
Reg § 1.423-2(f). With respect to any Offering
under the Non-Section 423 Component, the payment
of interest shall apply as determined
by the Administrator (but absent any such determination,
no interest shall apply).

 

7.7              
Term; Approval by Stockholders.No
Option may be granted during any period
of suspension of the Plan or after
termination of the Plan. The Plan
shall be submitted for the approval
of the Company’s stockholders within 12 months
after the date of the Board’s initial adoption
of the Plan. Options may be granted
prior to such stockholder approval; provided, however, that such Options shall not
be exercisable prior to the time
when the Plan is approved
by the stockholders; provided, further that if such
approval has not been obtained by the
end of the 12-month period, all Options previously granted
under the Plan shall thereupon terminate and be
canceled and become null and void
without being exercised.

 

7.8              
Effect Upon Other Plans.The adoption of
the Plan shall not affect any other
compensation or incentive plans in effect
for the Company, any Parent or any Subsidiary.
Nothing in the Plan shall be construed
to limit the right of the
Company, any Parent or any Subsidiary
(a) to establish any other forms of incentives
or compensation for Employees of
the Company or any Parent or any Subsidiary,
or (b) to grant or assume
Options otherwise than under the Plan in connection
with any proper corporate purpose, including, but not by way
of limitation, the grant or assumption
of options in connection with the acquisition,
by purchase, lease, merger, consolidation or otherwise,
of the business, stock or assets
of any corporation, firm or association.

     

     

    

 

7.9              
Conformity to Securities Laws.
Notwithstanding any other provision of the Plan,
the Plan and the participation in the Plan
by any individual who is then subject to Section
16 of the Exchange Act shall be subject
to any additional limitations set forth in any applicable
exemption rule under Section 16 of the Exchange Act
(including any amendment to Rule 16b-3
of the Exchange Act) that are requirements
for the application of such exemptive rule. To the extent permitted by
applicable law, the Plan shall be
deemed amended to the extent necessary
to conform to such applicable exemptive rule.

 

7.10          
Notice of Disposition of Shares.
Each Participant in the Section 423 Component shall give
the Company prompt notice of any disposition
or other transfer of
any shares of Common Stock,
acquired pursuant to the exercise of an Option granted under the Section
423 Component, if such disposition or transfer
is made (a) within two years after the applicable Grant
Date or (b) within one year after the
transfer of such shares of Common
Stock to such Participant upon exercise
of such Option. The Company may direct that
any certificates evidencing shares acquired pursuant to the Plan refer to such
requirement.

 

7.11          
Tax Withholding.The Company
or any Parent or any Subsidiary shall
be entitled to withhold any federal,
state or local tax or other
amounts required to be withheld by applicable
law with respect to participation in
the Plan by (a) withholding from wages
or other cash compensation payable to
each Participant, (b) withholding from the
proceeds of the
sale of shares of Common
Stock purchased under the Plan, either
through a Participant’s voluntary sale
or through a mandatory sale arranged
by the Company, (c) withholding shares
of Common Stock otherwise issuable upon exercise
of an Option under the Plan or
(d) withholding by any other method determined
by the Company and compliant with applicable
law. If any withholding obligation described
in the foregoing sentence will be satisfied
under clause (b) thereof, each Participant’s enrollment in the Plan will
constitute the Participant’s authorization to the
Company and instruction and authorization
to the Agent selected to effect the sale to
complete the transactions described in clause
(b).

 

7.12          
Governing Law.The Plan and all
rights and obligations thereunder shall be construed and enforced
in accordance with the laws of the State of Nevada,
without regard to the conflict of law rules
thereof or of any other jurisdiction.

 

7.13          
Notices.All notices or other communications
by a Participant to the Company under
or in connection with the Plan shall be
deemed to have been duly
given when received in the form specified by the
Company at the location, or by the person,
designated by the Company for the receipt thereof.

 

		7.14	Conditions
                                            To
                                            Issuance of Shares.

 

(a)               
Notwithstanding anything herein to the contrary, the
Company shall not be required to issue or
deliver any certificates or make
any book entries evidencing shares of Common
Stock pursuant to the exercise of
an Option by a Participant, unless and until
the Board or the Committee has determined,
with advice of counsel, that the issuance of
such shares of Common Stock is in compliance
with all applicable laws, regulations of
governmental authorities and, if applicable, the requirements
of any
securities exchange or automated quotation
system on which the shares
of Common Stock are listed or traded,
and the shares of Common Stock are covered
by an effective registration statement or
applicable exemption from registration. In addition
to the terms and conditions provided herein, the Board
or the Committee may require
that a Participant make such reasonable
covenants, agreements, and representations as the Board or the Committee, in its discretion,
deems advisable in order to comply with any such laws, regulations, or requirements.

 

(b)                 
All certificates for shares of
Common Stock delivered pursuant to the Plan
and all shares of Common Stock issued
pursuant to book entry procedures
are subject to any stop-transfer orders and
other restrictions as the Committee deems
necessary or advisable to comply
with federal, state, or foreign securities
or other laws, rules and regulations
and the rules of any securities
exchange or automated quotation system
on which the shares of
Common Stock are listed, quoted, or traded.
The Committee may place legends on any
certificate or book entry evidencing shares
of Common Stock to reference restrictions applicable
to the shares of Common
Stock.

 

(c)               
The Committee shall have the
right to require any Participant to
comply with any timing or other
restrictions with respect to the settlement,
distribution or exercise of any Option,
including a window-period limitation, as may
be imposed in the sole discretion
of the Committee.

 

(d)               
Notwithstanding any other provision of the
Plan, unless otherwise determined by the Committee
or required by any applicable law, rule
or regulation, the Company may,
in lieu of delivering to any Participant
certificates evidencing shares of Common Stock issued
in connection with any Option, record
the issuance of shares
of Common Stock in the books of the
Company (or, as applicable, its transfer
agent or stock plan administrator).

     

     

    

 

7.15          
Equal Rights and Privileges.All Eligible Employees of the
Company (or of any Designated Subsidiary) granted Options pursuant to an
Offering under the Section 423 Component shall have equal rights and privileges
under this Plan to the extent required under
Section 423 of the Code so that
the Section 423 Component qualifies as an “employee
stock purchase plan” within the meaning of Section
423 of the Code. Any provision
of the Section 423 Component
that is inconsistent with Section 423 of the Code
shall, without further act or amendment by the Company
or the Board, be reformed to comply
with the equal rights and privileges requirement
of Section 423 of the
Code. Eligible Employees participating in the Non-Section 423 Component
need not have the same rights
and privileges as Eligible
Employees participating in the Section 423 Component.

 

7.16          
Rules Particular to Specific
Jurisdictions.Notwithstanding anything herein to the
contrary, the terms and conditions of
the Plan with respect to Participants who
are tax residents of a particular
non-U.S. country or who are foreign nationals or employed
in non-U.S. jurisdictions may be subject
to an addendum to the
Plan in the form of an appendix or sub-plan
(which appendix or sub-plan may be designed
to govern Offerings under the Section
423 Component or the
Non-Section 423 Component, as determined
by the Administrator). To the extent that the
terms and conditions set forth
in an appendix or sub-plan conflict with
any provisions of the
Plan, the provisions of the appendix or
sub- plan shall govern. The adoption
of any such appendix or
sub-plan shall be pursuant to Section
7.1 above. Without limiting the foregoing,
the Administrator is specifically authorized to adopt
rules and procedures, regarding
the exclusion
of particular Subsidiaries from participation in the Plan, eligibility to participate,
the definition of Compensation, handling
of payroll deductions or other contributions
by Participants, payment of interest, conversion
of local currency, data privacy security, payroll tax,
withholding procedures, establishment of bank or trust
accounts to hold payroll deductions or
contributions, determination of beneficiary
designation requirements, and handling of stock
certificates, in each case, in accordance with the requirements
of Section 423 of the Code with respect
to the Section 423 Component. The Administrator also
is authorized to determine that, to the extent permitted by Treas.
Reg § 1.423-2(f), the terms of
an Option granted under the Plan or an Offering
to citizens or residents of a non-U.S.
jurisdiction will be less favorable than
the terms of an Option granted under the Plan
or the same Offering to Employees resident
solely in the United States. To the extent
any sub-plan or appendix or other
changes approved by the Administrator are inconsistent with the requirements of
Section 423 of the Code or would
jeopardize the tax-qualified status of the Section
423 Component, the change shall cause the Designated
Subsidiaries affected thereby to be considered Designated Subsidiaries in a separate
Offering under the Non-Section 423 Component instead of the Section
423 Component. To the extent any Employee of a Designated
Subsidiary in the Section 423 Component is a citizen
or resident of a foreign jurisdiction (without
regard to whether they are also a U.S.
citizen or a resident alien (within the meaning of Section
7701(b)(1)(A) of the Code)) and compliance
with the laws of the foreign
jurisdiction would cause the Section 423 Component,
any Offering or the option to violate
the requirements of Section 423 of the
Code, such Employee shall be considered
a Participant in a separate Offering
under the Non- Section 423 Component.

 

Notwithstanding
any other provisions
of the Plan to the
contrary, in non-U.S. jurisdictions where participation in the
Plan through payroll deductions is prohibited, the Administrator
may provide that an Eligible
Employee may elect to participate through contributions to his or her account under
the Plan in a form acceptable to the Administrator
in lieu of or in
addition to payroll deductions; provided, however, that, for
any Offering under the Section 423 Component,
the Administrator must determine that any alternative method of contribution
is applied on an equal and uniform basis
to all Eligible Employees in the Offering.

 

7.17          
Section 409A. The Section 423 Component
of the Plan and the Options granted
pursuant to Offerings thereunder are intended
to be exempt from the application of
Section 409A. Neither the Non-Section 423
Component nor any Option granted pursuant to
an Offering thereunder is intended to constitute or
provide for “nonqualified deferred compensation” within the meaning
of Section 409A. Notwithstanding any provision
of the Plan to the contrary, if the
Administrator determines that any Option granted under the Plan
may be or become subject to Section 409A or
that any provision of the
Plan may cause an Option granted under the Plan
to be or become subject
to Section 409A, the Administrator may
adopt such amendments to the Plan and/or adopt
other policies and procedures (including amendments, policies and procedures
with retroactive effect), or take any other actions
as the Administrator determines are necessary or appropriate
to avoid the imposition of
taxes under Section 409A, either through compliance with the requirements of Section
409A or with an available exemption therefrom.

*
* * * *Exhibit
10.8

 

SECURITY
AGREEMENT

 

THIS
SECURITY AGREEMENT, dated
as of November
22, 2021
(this “Agreement”),
is made
by Expion360 Inc.,
a Nevada corporation (“Grantor”),
in favor of the Lenders
set forth on the
signature page hereto
(each, a “Lender”
and collectively the
“Lenders”).

 

RECITALS

 

A.                
The Lenders and
Grantor are parties to that certain Subscription Agreement
dated November 22, 2021 (as amended, supplemented,
restated or otherwise modified from time to time, the “Loan
Agreement”) pursuant to which the Lenders
agreed to purchase Senior Secured Promissory Notes from the
Grantor in the aggregate principal amount
of up to $1,600,000 (the “Loan”).

 

B.                 
The Loan is
presently evidenced by
those certain Senior Secured
Promissory Notes in
the aggregate principal
amount of up to $1,600,000
of even
date hereof
(the “Notes”).

 

C.                 
Under the
terms of
the Loan
Agreement, Grantor is
required to
grant to
Lenders under the Notes
a security interest,
subject and subordinate only
to security interests expressly permitted
by the Loan Agreement,
in and to
the Collateral hereinafter described.

 

D.                
This Agreement
is given
by Grantor in
favor of
the Lenders for
the ratable benefit of
the Lenders to secure
the payment
and performance
of all
of the Secured Obligations.

 

Accordingly,
the parties
hereto agree as
follows:

 

ARTICLE
1 DEFINITIONS

 

1.1
Terms. The following
terms herein
used shall
have the following
meanings (such definitions
to be
equally applicable to
the singular
and plural
forms thereof):

 

“Collateral”
is defined
in Section
2.1.

 

“Contract"
means, collectively, all
sale, service, performance,
equipment lease contracts, agreements and
grants and
all other contracts, agreements
or grants (in
each case, whether
written or oral, or third party
or intercompany),
between Grantor and any
third party,
and all assignments,
amendments, restatements,
supplements, extensions, renewals, replacements or
modifications thereof.

 

“Event
of
Default”
means the failure
to pay
when due, whether at stated maturity,
by acceleration
or otherwise,
any of
the Secured
Obligations or any other
“Event of
Default” as
defined in
the Loan
Agreement.

 

“Lien”
means any
pledge, assignment, hypothecation,
mortgage, security interest,
deposit arrangement, option, conditional sale
or title retaining contract,
sale and leaseback
transaction, financing statement filing,
lessor’s or
lessee’s interest
under any lease, subordination
of any claim or right, or any
other type of lien, charge, encumbrance,
preferential arrangement or
other claim or right.

 

“Obligors”
is defined
in Section
3.6.

 

“Receivables”
means all accounts,
payment intangibles, chattel
paper and instruments.

     

     

    

“Secured
Obligations” means
any and all obligations
of Grantor
under the Notes
and all obligations
of Grantor
under the Loan
Agreement or any
other loan document associated with the Notes, of
any kind or
nature, howsoever created
or evidenced
and whether
now or hereafter
existing, direct or indirect,
absolute or contingent,
joint and/or several, secured
or unsecured,
arising by
operation of
law or
otherwise, and whether
incurred by
Grantor as
principal, surety,
endorser, guarantor,
accommodation party
or otherwise,
including without limitation
all principal and all interest (including any interest accruing subsequent to
any petition filed by
or against Grantor
or any
of them
under the U.S.
Bankruptcy Code, whether
or not
an allowed claim), indemnity
and reimbursement obligations,
charges, expenses, fees, attorneys’
fees and disbursements and
any other
amounts owing thereunder.

 

“UCC”
means the
Uniform Commercial Code
as in effect
from time to time
in the State
of Nevada;
provided, that if, with respect
to any
UCC financing
statement or by
reason of
any provisions of
law, the
perfection or
the effect
of perfection
or non-perfection
of the
security interests granted
to Lenders
is governed
by the Uniform
Commercial Code as
in effect in
a jurisdiction
of the United
States other than Nevada, then “UCC” means the Uniform
Commercial Code as
in effect from time to time
in such other jurisdiction
for purposes of
any UCC financing statement
relating to such perfection
or effect of
perfection or non-perfection.

 

1.2               
Loan Agreement
Definitions. Unless
otherwise defined herein or the
context otherwise requires,
terms used in this
Agreement, including its preamble and recitals, have the
meanings provided in
the Loan Agreement.

 

1.3               
UCC Definitions. Unless
otherwise defined herein or in
the Loan Agreement or
the context otherwise
requires, and whether
or not
capitalized, terms for which
meanings are provided in Article
8 or Article
9 of the UCC are
used in this Agreement, including its
preamble and recitals, with such meanings. Without limiting the
foregoing, accounts, chattel paper, commercial
tort claims, certificated security, control, deposit
accounts, documents, farm products, fixtures, electronic
chattel paper, equipment, general intangibles, goods, instruments, inventory, investment
property, letter-of-credit rights, negotiable instruments, payment intangibles,
securities and software, whether or not
capitalized, shall have the
meanings ascribed thereto in the UCC.

 

ARTICLE
2

GRANT
OF SECURITY INTEREST

 

2.1
Grant of Security Interest. To
secure the
prompt and
complete payment of
all Secured
Obligations, for value
received and pursuant to the
Loan Agreement, Grantor hereby
grants, assigns and transfers
to Lenders
a security interest
in and to
all of the
Grantor’s assets, including but
not limited to the
following list of described
assets whether now owned or
existing or hereafter
acquired or arising and wherever located (all
of which is
herein collectively called the
“Collateral”):

 

(a)               
all Accounts; all Payment Intangibles; all Property; all
Deposit Accounts and any and all monies credited by or due from any financial institution
or any other depository; all additional amounts due to Grantor from any Account Debtors
relating to the Accounts; all Contract rights, rights of payment earned under a Contract right, Instruments
(including promissory notes), Chattel Paper (including electronic chattel paper), letters of credit, and money; all Supporting
Obligations of the foregoing; all real and personal property of third parties in which Grantor
has been granted a lien or security interest as security for the payment or enforcement of Accounts; and

 

(b)               
all proceeds and products of subsection (a) of this Section 2.1 in whatever
form, including: cash, deposit accounts (whether or not comprised solely of proceeds),
certificates of deposit, insurance proceeds, negotiable instruments and other instruments for the payment of money, chattel paper, security
agreements, documents, and tort claim proceeds.

  

 

ARTICLE
3 

REPRESENTATIONS
AND
COVENANTS

 

Grantor
further represents, warrants, covenants and agrees with Lenders as follows:

 

3.1              
Ownership of Collateral;
Security Interest Priority. At the
time any Collateral becomes subject to a security
interest of Lenders hereunder, unless Lenders shall otherwise consent, Grantor shall
be deemed to have represented and warranted
that (a) Grantor is the lawful owner of
such Collateral or has the power to transfer
the Collateral and have the right and authority to subject the same to the
security interest of Lenders; and (b)
none of the Collateral is subject to any Lien
other than that in favor of Lenders and there
is no effective financing statement or other
filing covering any of the Collateral on file
in any public office, other than in favor
of Lenders. This Agreement creates in favor
of Lenders a valid security
interest in the Collateral, which security interest, upon filing
of financing statements in the appropriate
offices in the locations listed on Schedule
3.1, will be perfected and
of first priority for security interests that
may be perfected by the
filing of a financing statement, enforceable
against Grantor and all third parties and securing the payment
of the Secured Obligations. Grantor authorizes
Lenders to file financing statements describing the Collateral as reasonably
determined by Lenders and if requested
will execute and deliver to Lenders
all documents and take such other actions as may from
time to time be reasonably requested by Lenders
in order to maintain a first
perfected security interest in, and if applicable, possession and control of, the Collateral.
Grantor will keep the Collateral free at all times from
any and all Liens. Grantor will
not, without the prior written consent of
Lenders, which will not be unreasonably
withheld or delayed sell, lease, license, transfer,
assign or otherwise dispose, or permit
or suffer to be sold,
leased, licensed, transferred, assigned or otherwise disposed, any of the Collateral,
except for any assets permitted to be
sold, leased, licensed, transferred, assigned or otherwise
disposed under the Loan Agreement, subject to the terms
of the Loan Agreement or sales in the
ordinary course of business. Subject to any
limitations in the Loan Agreement, Lenders
or their attorneys may after a prior
written notice and on regular business hours
inspect the Collateral and for such purpose may enter upon any and all premises where
the Collateral is or might be
kept or located.

     

     

    

 

		3.2	Perfection
                                            of
                                            Security Interest and Further
                                            Assurances.

 

(a)               
The Grantor hereby irrevocably authorizes the Lenders
at any time and from time to time
to file in any relevant jurisdiction any financing
statements and amendments thereto that contain the information required by Article
9 of the UCC of each
applicable jurisdiction for the filing of any financing
statement or amendment relating to the Collateral,
including any financing or continuation statements
or other documents for the purpose
of perfecting, confirming, continuing, enforcing or
protecting the security interest granted
by the Grantor hereunder, without the signature
of the Grantor where
permitted by law, including the filing of
a financing statement describing the Collateral as all
assets now owned or hereafter acquired
by the Grantor, or words of
similar effect. The Grantor
agrees to provide all information required
by the Lenders pursuant to this Section promptly
to the Lenders upon request.

 

(b)               
The Grantor hereby further authorizes the Lenders to file
with the United States Patent and Trademark
Office and the United States Copyright Office (and any successor
office and any similar office in any state
of the United States or
in any other country) this Agreement, any necessary security agreements and other documents
for the purpose of perfecting, confirming, continuing, enforcing or
protecting the security interest granted
by the Grantor hereunder, without the signature
of the Grantor where
permitted by law.

 

(c)               
 The Grantor agrees that at any time and from
time to time, at the expense of
the Grantor, the Grantor will promptly execute
and deliver all further instruments and documents,
obtain such agreements from third parties, and take all further action, that may
be necessary or desirable, or
that the Lenders may reasonably request, in order
to create and/or maintain the validity, perfection
or priority of and protect
any security interest granted or purported
to be granted hereby or to enable the
Lenders to exercise and enforce its rights
and remedies hereunder or under any other agreement
with respect to any Collateral.

 

3.3              
Names; Locations. Grantor represents and warrants
that Schedule 3.3 sets forth the
following for Grantor: (a) the jurisdiction in which
Grantor is located for purposes of Sections
9-301 and 9-307 of the UCC; (b) the address
of Grantor’s chief executive office; (c) each trade name or other
name (other than its name set forth on
the signature page hereto) used by Grantor;
and (d) Grantor’s federal taxpayer identification number (and, during the four months
preceding the date hereof, Grantor has not had any other federal taxpayer identification
number) and state organizational number. During the past four months
preceding the date hereof, Grantor has not
been known by any legal name different
from the one set
forth on the signature page hereto, nor has Grantor
been the subject of any merger or other
corporate reorganization during the past five years. The name
set forth on the signature page is the
true and correct name of Grantor.
Grantor will not change its name or place of incorporation
or organization or
federal taxpayer identification number except upon 30 days’ prior
written notice to Lenders.

 

3.4              
Taxes, Etc. Grantor will pay
any taxes, assessments and similar imposts and charges,
that are now or hereafter may become
a Lien upon any of the Collateral,
in accordance with the terms and requirements of the Loan
Agreement.

 

3.5              
Maintenance of Collateral.
Grantor shall preserve and maintain all rights of
Grantor and Lenders in all
Collateral, and will not subordinate, supplement or otherwise
modify any claim or right of Grantor
with respect to any Collateral, or permit,
consent or suffer to occur any
of the foregoing, if the effect thereof is to impair,
or is in any manner adverse to, the rights or
interests of Lenders without the prior written
consent of Lenders.

 

3.6              
Special Rights Regarding Receivables. Lenders or
any of their agents may, at any time
and from time to time in its sole
discretion upon the existence of any Event
of Default, verify, directly with each Person
(collectively, the “Obligors”) that owes any Receivables
to Grantor, the Receivables in any reasonable
manner. Lenders or any of their agents
may, at any time from time to time
after and during the continuance of
an Event of Default,
notify the Obligors of the security interest
of Lenders in the
Collateral and/or direct such Obligors that all payments in connection with such obligations
and the Collateral be made directly to Lenders
in Lenders’ names. If Lenders or
any of their agents shall collect such obligations
directly from the Obligors, Lenders or any of
their agents shall have the right to resolve
any disputes relating to returned goods directly
with the Obligors in such manner and on such
terms as Lenders or any of their agents shall
deem appropriate. Grantor directs and authorizes any and all
of its present and future Obligors to comply
with requests for information from Lenders, Lenders’ designees and agents
and/or auditors, relating to any and all business transactions between Grantor
and the Obligors. Grantor further directs and authorizes all of its
Obligors upon receiving a notice or request
sent by Lenders or Lenders’
agents or designees to pay directly
to Lenders any and all sums
of money or proceeds now or hereafter
owing by the Obligors to Grantor, and
any such payment shall act as a discharge of
any debt of such Obligor to Grantor
in the same manner as if such payment had been made
directly to Grantor. Grantor agrees to take any and
all action as Lenders may reasonably request to assist
Lenders in exercising the rights described
in this Section.

     

     

    

 

ARTICLE
4 REMEDIES

 

4.1   
General Remedies. Upon the occurrence
and during the continuance of any Event
of Default, Lenders shall have and may exercise
any one or more of the rights and remedies
provided to Lenders under this Agreement,
the Loan Agreement or any
of the other loan documents or provided
by law, including but not limited to all of
the rights and remedies of a secured
party under the UCC, and Grantor hereby agrees
to assemble the Collateral and make
it available to Lenders at a place
to be designated by Lenders that is
reasonably convenient to both parties, authorizes
Lenders to take possession of the
Collateral with or without demand and
in accordance with applicable law and
to sell and dispose of the same at public
or private sale and to apply
the proceeds of such sale to the
costs and expenses thereof (including reasonable attorneys’ fees and disbursements,
incurred by Lenders) and then
to the payment and satisfaction of the
Secured Obligations. Any requirement of reasonable
notice shall be met if any Lender
sends such notice to Grantor, by registered or
certified mail, at least 10 days prior
to the date of sale,
disposition or other event giving rise to a required
notice. Any Lender may be the purchaser at any such sale.
Grantor expressly authorizes such sale or sales of the Collateral
in advance of and to the exclusion of
any sale or sales
of or other realization upon any other collateral
securing the Secured Obligations. No Lender shall have any obligation to preserve
rights against prior parties, and no Lender shall
have any obligation to clean-up or otherwise
prepare the Collateral for sale. Grantor hereby waives
as to Lenders any right of subrogation
or marshaling of such Collateral and
any other collateral for the Secured Obligations.
To this end, Grantor hereby expressly agrees that any such collateral or
other security of Grantor
or any other party that Lenders may hold
may be dealt
with in all respects and particulars as though this Agreement were not in existence.
The parties hereto further agree that public sale of the Collateral
by auction conducted in any county in
which any Collateral is located
or in which Lenders or Grantor
does business after advertisement of the time and place thereof shall, among
other manners of public and private sale, be deemed to be a commercially
reasonable disposition of the Collateral. Grantor
shall be liable for any deficiency remaining
after disposition of the Collateral. Lenders
may comply with any applicable state or federal
law requirements in connection with a disposition
of the Collateral and compliance will
not be considered to adversely
affect the commercial reasonableness of any sale
of the Collateral. Lenders may specifically
disclaim any warranties of title
or the like. If any
Lender sells any of the Collateral
upon credit, Grantor will be credited
only with payments actually made by the purchaser,
received by Lenders and applied to the indebtedness
of such purchaser. In the event any such
purchaser fails to pay for the
Collateral, Lenders may resell the collateral and Grantor shall be credited
with the proceeds of sale.

 

		4.2	Special
                                            Remedies Concerning Certain Collateral.

 

(a)               
Upon the occurrence and during
the continuance of any Event of
Default, Grantor shall, if requested to
do so in writing, and to the extent
so requested, promptly collect and enforce payment of
all amounts due Grantor on account of,
in payment of, or in connection
with, any of the Collateral, hold all payments
in the form received by Grantor as trustee
for Lenders, without commingling with any funds belonging to Grantor,
and forthwith deliver all such payments
to Lenders with endorsement to Lenders’ order
of any checks or
similar instruments.

 

(b)               
Upon the occurrence and during
the continuance of any Event of
Default, Grantor shall, if requested
to do so, and to the
extent so requested, notify all Obligors and other
Persons with obligations to Grantor on
account of or in connection
with any of the Collateral of the security
interest of Lenders in the
Collateral and direct such account debtors
and other Persons that all payments in connection
with such obligations and the Collateral be made directly to Lenders. Any Lender itself
may, upon
the occurrence and during the continuance
of an Event of Default, so notify
and direct any such account debtor or
other Person that such payments are to be made
directly to Lenders.

 

(c)               
Upon the occurrence and during the continuance
of an Event of Default,
for purposes of assisting Lenders in exercising their rights
and remedies provided to Lenders under this
Agreement, Grantor (i) hereby irrevocably constitutes and appoints Lenders as its
true and lawful attorney, for and in Grantor’s
name, place and stead, to collect, demand,
receive, sue for, compromise, and give good
and sufficient releases for, any monies due or to become
due on account of, in payment of,
or in connection with the Collateral, (ii)
hereby irrevocably authorizes any Lender to endorse
the name of Grantor, upon any checks,
drafts, or similar items that
are received in payment of,
or in connection with, any of the Collateral,
and to do all things necessary in order
to reduce the same to money, (iii) with respect
to any Collateral, hereby irrevocably assents to all
extensions or postponements of the time
of payment thereof or
any other indulgence in connection therewith,
to each substitution, exchange or release
of Collateral, to the addition or release
of any party primarily or secondarily liable,
to the acceptance of partial payments thereon
and the settlement, compromise or adjustment
(including adjustment of insurance payments)
thereof, all in such manner and at such time or
times as Lenders shall
deem advisable and (iv) hereby irrevocably authorizes each Lender
to notify the post office authorities to
change the address for delivery of Grantor’s
mail to an address designated by such Lender,
and such Lender may receive, open and dispose
of all mail addressed to Grantor. Notwithstanding
any other provisions of this Agreement, it is
expressly understood and agreed that such Lender
shall have no duty, and shall not be
obligated in any manner, to make
any demand or to make any inquiry as
to the nature or sufficiency
of any payments received by it or to
present or file any
claim or take any other action to collect
or enforce the payment of
any amounts due or to
become due on account of or in connection
with any of the Collateral.

 

ARTICLE
5 MISCELLANEOUS

 

5.1              
Remedies Cumulative. No right or remedy conferred
upon or reserved to Lenders under this
Agreement, the Loan Agreement or any
other loan document is intended to be exclusive
of any other
right or remedy, and every
right and remedy shall be cumulative
in addition to every other right or
remedy given hereunder or now or hereafter
existing under any applicable law. Every right and remedy
of Lenders under this Agreement, the Loan Agreement
or any other loan document or under
applicable law may be exercised from time to time
and as often as may be deemed
expedient by Lenders. To the extent that
it lawfully may, Grantor agrees that it will not at any time insist upon, plead,
or in any manner whatever claim or
take any benefit
or advantage of any applicable present
or future stay, extension or moratorium
law, that may affect observance or performance
of any provisions of this Agreement,
the Loan Agreement or
any other loan document; nor will it claim,
take or insist upon any benefit
or advantage of any present or future
law providing for the valuation or appraisal
of any security for its obligations under this Agreement, the Loan
Agreement or any other loan document prior to any
sale or sales thereof that may be made
under or by virtue of any instrument governing
the same; nor will Grantor, after any such sale or sales,
claim or exercise any right,
under any applicable law to redeem any
portion of such security
so sold.

     

     

    

 

5.2              
Conduct No Waiver. No waiver of default shall
be effective unless in writing executed by
each Lender and waiver of any default
or forbearance on the part of any Lender
under such Lender’s Note in enforcing
any of its rights under this Agreement shall
not operate as a waiver of any other default
or of the same default on a future occasion
or of such right.

 

5.3              
Governing Law; Consent to Jurisdiction. This Agreement is a contract
made under, and shall be governed by
and construed in accordance with, the law of
the State of Nevada
applicable to contracts
made and to be performed
entirely within such State and without giving effect to choice
of law principles of such
State. Grantor agrees that any legal action or
proceeding with respect to this Agreement
or the transactions contemplated hereby may be brought
in any court of the
State of Nevada, or in any court
of the United States of America
sitting in Nevada, and Grantor hereby submits
to and accepts generally and unconditionally
the jurisdiction of those courts with respect
to its person and property. Nothing
in this paragraph shall affect the right of
Lenders to serve process in any other
manner permitted by law or limit the right of
Lenders to bring any such
action or proceeding against Grantor or
its property in the courts of any other
jurisdiction. Grantor hereby irrevocably waives any objection to the laying
of venue of any such suit or proceeding
in the above described courts. The headings
of the various subdivisions hereof are for convenience
of reference only and shall in no way
modify any of the terms or provisions
hereof.

 

5.4              
Notices. All notices,
demands, requests, consents and other communications
hereunder shall be delivered in the manner
described in the Loan Agreement.

 

5.5              
Rights Not Construed
as Duties. Lenders neither assume
nor shall they have any duty
of performance or
other responsibility under any contracts in which
Lenders have or obtain a security
interest hereunder beyond the exercise of
reasonable care. If Grantor fails to perform
any agreement contained herein, Lenders may but is in no way
obligated to perform, or cause performance
of, such agreement, and the reasonable expenses of Lenders incurred in connection
therewith shall be payable by Grantor
under Section 5.8. The powers conferred on Lenders
hereunder are solely to protect their interests
in the Collateral and shall not impose
any duty upon Lenders to exercise any
such powers. Except for the safe custody of
any Collateral in Lenders’ possession,
a duty to exercise reasonable care, and accounting for monies
actually received by it hereunder, Lenders shall have no duty
as to any Collateral or as to the taking
of any necessary steps to preserve rights against prior
parties or any other rights pertaining
to any Collateral. Lenders shall be
deemed to have exercised reasonable care in the custody
and preservation of the Collateral
in their possession if the Collateral
is accorded treatment substantially equal to that
which is reasonable and customary in the industry
for lenders.

 

5.6              
Amendments. None of the
terms and provisions of this Agreement
may be modified or
amended in any way except by an instrument
in writing executed by Grantor and Lenders.

 

5.7              
Severability. If any
one or more provisions of this Agreement
should be invalid, illegal or unenforceable
in any respect, the
validity, legality and enforceability
of the remaining provisions contained
herein shall not in any
way be affected, impaired, prejudiced or
disturbed thereby, and
any provision hereunder found partially
unenforceable shall be interpreted to
be enforceable to
the fullest extent
possible.

 

		5.8	Expenses.

 

(a)               
Grantor will, upon demand, jointly and severally,
pay to Lenders an amount of any and all reasonable
and documented expenses, including the reasonable fees and disbursements of its
counsel and of any experts and agents, that
Lenders may incur in connection with (i) the
administration of this Agreement, (ii) the custody,
preservation, use or operation of, or
the sale of, collection from
or other realization upon, any of the
Collateral, (iii) the exercise or enforcement
of any of the
rights of Lenders hereunder or under the Loan
Agreement or any other loan document, or (iv)
the failure of Grantor to perform or observe
any of the provisions hereof.

 

(b)               
Grantor agrees to hold harmless and indemnify
Lenders from and against any and all claims,
losses and liabilities actually incurred or suffered
growing out of or resulting from this Agreement
(including, without limitation, enforcement of this Agreement), except claims, losses
or liabilities resulting from Lenders’ gross negligence, breach of this
Agreement, or willful misconduct.

     

     

    

 

5.9              
Successors and Assigns; Termination. This Agreement shall create a continuing,
absolute, unconditional and irrevocable security interest in the Collateral and shall
be binding upon Grantor,
its successors and assigns, and inure, together with the rights and remedies
of Lenders hereunder, to the benefit
of Lenders and their respective successors, transferees
and assigns. Upon the irrevocable payment
in full in immediately available funds of
all of the
Secured Obligations and the termination of all
commitments to lend and letters of credit outstanding
under this Agreement, the Loan Agreement or any
other loan document, the security interest
granted hereunder shall terminate and all rights
to the Collateral shall revert to Grantor.

 

5.10          
Evidence of Secured Obligations.
Lenders’ books and records
showing the Secured Obligations
shall be admissible in
any action or proceeding,
shall be binding upon
each Grantor for the purpose
of establishing the
Secured Obligations due from Grantor
and shall constitute prima
facie proof, absent manifest
error, of the Secured Obligations of
Grantor to Lenders.

 

5.11          
Waiver of Jury
Trial. Lenders, in accepting this Agreement, and Grantor,
after consulting or having had the opportunity to consult
with counsel, knowingly, voluntarily and intentionally waive any right any of
them may have to a trial
by jury in any litigation based upon or arising
out of this Agreement or any related instrument
or agreement or any
of the transactions contemplated by
this Agreement or any
course of conduct, dealing, statements (whether
oral or written) or
actions of any of
them. Neither Lenders nor Grantor shall seek to consolidate,
by counterclaim or otherwise,
any such action in which a jury trial
has been waived with any other action in which
a jury trial cannot be
or has not been waived. These provisions shall not be deemed
to have been modified in any respect
or relinquished by either Lenders, on the one
hard, or Grantor, on the
other hand, except by a written instrument executed by
all of them.

 

5.12          
Limitations on Damages.
To the extent not prohibited by applicable
law, each party hereto hereby knowingly, voluntarily, intentionally, and irrevocably waives any right
such party may have to claim or recover
in any dispute or controversy any special,
exemplary, punitive, or consequential damages, or damages
other than or in addition to actual
damages; provided, however, that the limitations set forth in this Section
5.12 shall not apply to the grossly negligent acts
or omissions or willful misconduct
of either party in performing its obligations under this
Agreement.

 

[Signature
Page Follows]

    	 

    	 

    

DocuSign
Envelope ID: B28F4726-FC82-4BDF-A538-7DA8AB8B438F

 

 

 

 

IN
WITNESS WHEREOF,
Grantor has caused this
Security Agreement to
be duly
executed as of
the day and year first set
forth above.

 

 

EXPION360
INC.

 

 

 

 

By:
John Yozamp

Its:
Chief Executive Officer

 

 

 

Accepted
and Agreed:

 

Donald
A. Foss Revocable Living Trust Dated January 1981, as
Lender

 

 

 

By:
_____________

 Name:
Don Foss

Title:
Trustee

 

 

Victor
Henry David Trione, As Lender

 

 

 

Seven
Hills Healthcare Advisors LLC Defined Benefit Pension Plan,
as Lender

 

 

 

By:
___________________

Name: Ananth S. Bhogaraju

Title:
Trustee

 

 

Park
Family Trust Est Aug 29, 2012, As
Lender

 

 

 

By:
___________________

Name:
Howard Park

Title:
Trustee

    	 

    	 

    

DocuSign
Envelope ID: 92FBEDC8-EA61-4839-848C-400BDE8DE76C

 

 

 

 

IN
WITNESS WHEREOF,
Grantor has caused this
Security Agreement to
be duly
executed as of
the day and year first set
forth above.

 

 

EXPION360
INC.

 

 

 

 

By:
John Yozamp

Its:
Chief Executive Officer

 

 

 

Accepted
and Agreed:

 

Donald
A. Foss Revocable Living Trust Dated January 1981, as
Lender

 

 

 

By:
__________________

Name: Don Foss

Title:
Trustee

 

 

Victor
Henry David Trione, As Lender

 

 

 

 

Seven
Hills Healthcare Advisors LLC Defined Benefit Pension Plan,
as Lender

 

 

 

By: ________________

Name: Ananth S. Bhogaraju

Title:
Trustee

 

 

Park
Family Trust Est Aug 29, 2012, As
Lender

 

 

 

By:
_______________________

Name:
Howard Park

Title:
Trustee

     

     

    

DocuSign
Envelope ID: A425529E-F7CD-469B-836D-F8A9F32F14B0

 

 

 

 

IN
WITNESS WHEREOF,
Grantor has caused this
Security Agreement to
be duly
executed as of
the day and year first set
forth above.

 

 

EXPION360
INC.

 

 

 

 

By:
John Yozamp

Its:
Chief Executive Officer

 

 

 

Accepted
and Agreed:

 

Donald
A. Foss Revocable Living Trust Dated January 1981, as
Lender

 

 

 

By:
_________________

Name:
Don Foss

Title:
Trustee

 

 

Victor
Henry David Trione, As Lender

 

 

 

Seven
Hills Healthcare Advisors LLC Defined Benefit Pension Plan,
as Lender

 

 

 

By:
____________________

Name: Ananth S. Bhogaraju

Title:
Trustee

 

 

Park
Family Trust Est Aug 29, 2012, As
Lender

 

 

 

By:
______________________

Name:
Howard Park

Title:
Trustee

     

     

    

DocuSign
Envelope ID: 03F96607-5C89-491C-B676-26B87369C7E1

 

 

 

 

IN
WITNESS WHEREOF,
Grantor has caused this
Security Agreement to
be duly
executed as of
the day and year first set
forth above.

 

 

EXPION360
INC.

 

 

 

 

By:
John Yozamp

Its:
Chief Executive Officer

 

 

 

Accepted
and Agreed:

 

 

 

 

 

 

By:
_______________________

Name:

Title:

     

     

    

SCHEDULE
3.1 TO
SECURITY AGREEMENT

 

Locations
Where
Financing Statements
Are to
Be Filed

 

Nevada

     

     

    

SCHEDULE
3.3 TO
SECURITY AGREEMENT

 

List
of Names
and Locations

 

		1.	Jurisdiction
                                            in which
                                            located for purposes of Sections 9-301
                                            and 9-307 of the UCC:
                                            Nevada

 

		2.	Address
                                            of
                                            chief
                                            executive office:

 

		3.	Trade
                                            names:

 

		4.	Federal
                                            Tax Identification No.:

 

		5.	State
                                            Control No.:

 

 

Effective
October 28, 2021, Yozamp
Products, LLC, an Oregon limited liability company, converted into a Nevada corporation
with the name of Expion360 Inc., which
was the resulting entity of the
conversion.

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00338-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00338-of-00352.parquet"}]]