Document:

Exhibit

Exhibit 10.1

SECURITIES PURCHASE AGREEMENT 
This SECURITIES PURCHASE AGREEMENT (this “Agreement”) is made and entered into as of October 19, 2017 (the “Effective Date”) by and among Cidara Therapeutics, Inc., a Delaware corporation (the “Company”), and each of those persons and entities, severally and not jointly, listed as a Purchaser on the Schedule of Purchasers attached as Schedule I hereto (each a “Purchaser” and together the “Purchasers”). Certain terms used and not otherwise defined in the text of this Agreement are defined in Section 11 hereof. 
RECITALS 
WHEREAS, the Company and the Purchasers are executing and delivering this Agreement in reliance upon the exemption from securities registration afforded by Section 4(a)(2) of the Securities Act of 1933, as amended (the “Securities Act”), and Rule 506 of Regulation D as promulgated by the United States Securities and Exchange Commission (the “Commission”) under the Securities Act; and
WHEREAS, the Company desires to sell to the Purchasers, and the Purchasers desire to purchase from the Company, shares of Common Stock, $0.0001 par value per share (the “Common Stock”), in accordance with the terms and provisions of this Agreement. 
NOW, THEREFORE, in consideration of the foregoing and the mutual representations, warranties and covenants herein contained, the parties hereto hereby agree as follows: 
Section 1.    Authorization of Shares. The Company has authorized the sale and issuance of an aggregate of 3,360,000 shares of Common Stock on the terms and subject to the conditions set forth in this Agreement. The shares of Common Stock sold hereunder at the Closing (as defined below) shall be referred to as the “Shares.” 
Section 2.    Sale and Purchase of the Shares. 
2.01    Upon the terms and subject to the conditions herein contained, the Company agrees to sell to each Purchaser, and each Purchaser agrees to purchase from the Company at the Closing (as defined in Section 3), that number of Shares set forth opposite such Purchaser’s name on Schedule I hereto (the “Schedule of Purchasers”) for the purchase price set forth opposite such Purchaser’s name, which amount represents the number of Shares to be purchased by such Purchaser multiplied by the price per Share of $6.00. The purchase price to be paid by each Purchaser, as set forth on Schedule I, shall be referred to as the “Aggregate Purchase Price.” Each Purchaser shall severally, and not jointly, be liable for only the purchase of the Shares that appear on the Schedule of Purchasers opposite such Purchaser’s name. The Company’s agreement with each of the Purchasers is a separate agreement and the sale of Shares to each of the Purchasers is a separate sale. The obligations of each Purchaser hereunder are expressly not conditioned on the purchase by any or all of the other Purchasers of the Shares such other Purchasers have agreed to purchase. 
2.02    At or prior to the Closing, each Purchaser will pay the purchase price set forth opposite such Purchaser’s name on Schedule I by wire transfer of immediately available funds in accordance with wire instructions provided by the Company to the Purchasers prior to the Closing. On or before the Closing, the Company will instruct its transfer agent to either deliver stock certificates to the Purchasers or make book-entry notations representing the Shares, in each case against delivery of the Aggregate Purchase Price. The foregoing notwithstanding, if the Purchaser has indicated to the Company at the time of execution of this Agreement a need to settle on a “delivery versus payment” basis, then the Company shall either deliver to such Purchaser (or such Purchaser’s designated custodian) the original stock certificates or make a book-entry notation reflecting ownership of the Shares whereupon following receipt of such certificate(s) or written confirmation from the Company’s transfer agent that a book-entry notation has been made, then the Purchaser shall then promptly wire the Aggregate Purchase Price as provided in this Section 2. 

Section 3.    Closing. Subject to the satisfaction of the closing conditions set forth in Section 7, the closing with respect to the transactions contemplated in Section 2 hereof (the “Closing”), shall take place at the offices of Cooley LLP, at 4401 Eastgate Mall, San Diego, California, on the third Business Day after the Effective Date (the “Closing Date”), or at such other time and place as the Company and Purchasers may agree, including remotely via the exchange of documents and signatures. 
Section 4.    Representations and Warranties of the Purchasers. Each Purchaser, severally but not jointly, represents and warrants to the Company that the statements contained in this Section 4 are true and correct as of the Effective Date, and will be true and correct as of the date of the Closing Date: 
4.01    Validity. The execution, delivery and performance of this Agreement and the other instruments referred to herein, in each case to which the Purchaser is a party, and the consummation by the Purchaser of the transactions contemplated hereby, have been duly authorized by all necessary corporate, partnership, limited liability or similar actions, as applicable, on the part of such Purchaser. This Agreement has been duly executed and delivered by the Purchaser, and the other instruments referred to herein to which it is a party will be duly executed and delivered by the Purchaser, and each such agreement and other instruments constitutes or will constitute a valid and binding obligation of the Purchaser, enforceable against it in accordance with its terms, except as limited by applicable bankruptcy, insolvency, reorganization, moratorium, fraudulent conveyance, and any other laws of general application affecting enforcement of creditors’ rights generally, and as limited by laws relating to the availability of specific performance, injunctive relief, or other equitable remedies. 
4.02    Brokers. There is no broker, investment banker, financial advisor, finder or other Person which has been retained by or is authorized to act on behalf of the Purchaser who might be entitled to any fee or commission for which the Company will be liable in connection with the execution of this Agreement and the consummation of the transactions contemplated hereby. 
4.03    Investment Representations and Warranties. The Purchaser understands and agrees that the offering and sale of the Shares has not been registered under the Securities Act or any applicable state securities laws and is being made in reliance upon federal and state exemptions for transactions not involving a public offering which depend upon, among other things, the bona fide nature of the investment intent and the accuracy of the Purchaser’s representations as expressed herein. 
4.04    Investor Questionnaire. In connection with the filing of a Registration Statement, the Company may require the Purchaser to furnish to the Company such information regarding the Purchaser and the Registrable Securities, as the Company may reasonably request in writing and as shall reasonably be required in connection with the filing of the Registration Statement. At least five Business Days prior to the first anticipated filing date of such Registration Statement, the Company shall notify the Purchaser of any information the Company reasonably requests from the Purchaser, to the extent related to the Registration Statement. 
4.05    Acquisition for Own Account; No Control Intent. The Purchaser is acquiring the Shares for its own account for investment and not with a view toward distribution in a manner which would violate the Securities Act or any applicable state securities laws. Purchaser is not party to any agreement providing for or contemplating the distribution of any of the Shares. The Purchaser has no present intent to effect a “change of control” of the Company as such term is understood under the rules promulgated pursuant to Section 13(d) of the Exchange Act. 
4.06    Ability to Protect Its Own Interests and Bear Economic Risks. The Purchaser, by reason of the business and financial experience of its management, has the capacity to protect its own interests in connection with the transactions contemplated by this Agreement and is capable of evaluating the merits and risks of the investment in the Shares. The Purchaser is able to bear the economic risk of an investment in the Shares and is able to sustain a loss of all of its investment in the Shares without economic hardship, if such a loss should occur. 

2.    

4.07    Accredited Investor; No Bad Actor. The Purchaser is an “accredited investor” as that term is defined in Rule 501(a) under the Securities Act. Such Purchaser has not taken any of the actions set forth in, and is not subject to, the disqualification provisions of Rule 506(d)(1) of the Securities Act. 
4.08    Access to Information. The Purchaser has been given access to Company documents, records, and other information, and has had adequate opportunity to ask questions of, and receive answers from, the Company’s officers, employees, agents, accountants, and representatives concerning the Company’s business, operations, financial condition, assets, liabilities, and all other matters relevant to its investment in the Shares. Purchaser understands that an investment in the Shares bears significant risk and represents that it has reviewed the SEC Reports, which serve to qualify certain of the Company representations set forth below. 
4.09    Non-Reliance on Placement Agent. The Purchaser has, in connection with its decision to purchase the Shares set forth on Schedule I attached hereto, relied solely upon the representations and warranties of the Company contained herein, and such Purchaser has not relied on any placement agent in negotiating the terms of its investment in the Shares. In making a decision to purchase the Shares, such Purchaser has not received or relied on any communication, investment advice or recommendation from any placement agent. 
4.10    Restricted Shares. 
(a)    The Purchaser understands that the Shares will be characterized as “restricted securities” under the federal securities laws inasmuch as they are being acquired from the Company in a private placement under Section 4(a)(2) of the Securities Act and that under such laws and applicable regulations such Shares may be resold without registration under the Securities Act only in certain limited circumstances. 
(b)    The Purchaser acknowledges that the Shares must be held indefinitely unless subsequently registered under the Securities Act and under applicable state securities laws or an exemption from such registration is available. The Purchaser understands that the Company is under no obligation to register the Shares, except as provided in this Agreement. 
(c)    The Purchaser is aware of the provisions of Rule 144 under the Securities Act, which permit limited resale of securities purchased in a private placement. 
4.11    Tax Advisors. The Purchaser has had the opportunity to review with the Purchaser’s own tax advisors the federal, state and local tax consequences of this investment, where applicable, and the transactions contemplated by this Agreement. The Purchaser is relying solely on the Purchaser’s own determination as to tax consequences or the advice of such tax advisors and not on any statements or representations of the Company or any of its agents and understands that the Purchaser (and not the Company) shall be responsible for the Purchaser’s own tax liability that may arise as a result of this investment or the transactions contemplated by this Agreement. 
4.12    Short Sales. Between the time the Purchaser learned about the offering contemplated by this Agreement and the public announcement of the offering, the Purchaser has not engaged in any short sales (as defined in Rule 200 of Regulation SHO under the Exchange Act (“Short Sales”)) or similar transactions with respect to the Common Stock, nor has the Purchaser, directly or indirectly, caused any Person to engage in any Short Sales or similar transactions with respect to the Common Stock. Notwithstanding the foregoing, in the case of a Purchaser that is a multi-managed investment vehicle whereby separate portfolio managers manage separate portions of such Purchaser’s assets and the portfolio managers have no direct knowledge of the investment decisions made by the portfolio managers managing other portions of such Purchaser’s assets, the representation set forth above shall apply only with respect to the portion of assets managed by the portfolio managers that have knowledge about the financing transaction contemplated by this Agreement. 

3.    

4.13    No Interested Stockholder. After giving effect to the purchase of the Shares at the Closing, the Purchaser will not be deemed to be an “interested stockholder” within the meaning of Section 203 of the Delaware General Corporation Law. 
Section 5.    Representations and Warranties by the Company. Assuming the accuracy of the representations and warranties of the Purchasers set forth in Section 4 and except as set forth in the SEC Reports (defined below), which disclosures serve to qualify these representations and warranties in their entirety, the Company represents and warrants to the Purchasers that the statements contained in this Section 5 are true and correct as of the Effective Date, and will be true and correct as of the date of the Closing Date: 
5.01    Organization and Good Standing. The Company and each Subsidiary: (a) is duly incorporated or otherwise organized, validly existing and in good standing under the laws of the jurisdiction of its formation, (b) is duly qualified to do business as a foreign entity and is in good standing in each jurisdiction where the nature of the property owned or leased by it or the nature of the business conducted by it makes such qualification necessary, except where the failure to be so qualified would not have a Material Adverse Effect, and (c) has all requisite corporate power and authority to own or lease and operate its assets and carry on its business as presently being conducted as disclosed in the SEC Reports. 
5.02    Corporate Power and Authority; Valid Issuance of Shares. 
(a)    The Company has all requisite corporate power and has taken all necessary corporate action required for the due authorization, execution, delivery and performance by the Company of this Agreement and the other Transaction Documents and the consummation of the transactions contemplated hereby and thereby. The execution, delivery and performance by the Company of this Agreement and the consummation by the Company of the transactions contemplated hereby, have been duly authorized by the Company’s board of directors or a duly authorized committee thereof and no further consent or authorization of the Company, its board of directors or its stockholders is required. This Agreement has been duly executed and delivered by the Company, and the other instruments referred to herein to which it is a party will be duly executed and delivered by the Company, and each such agreement constitutes or will constitute a legal, valid and binding obligation of the Company enforceable against it in accordance with its terms, except to the extent that enforceability may be limited by bankruptcy, insolvency, reorganization, moratorium, fraudulent conveyance, and any other laws of general application affecting enforcement of creditors’ rights generally, and as limited by laws relating to the availability of specific performance, injunctive relief, or other equitable remedies. 
(b)    The Shares have been duly and validly authorized and, when issued and paid for pursuant to this Agreement, the Shares will be validly issued, fully paid and non-assessable, and shall be free and clear of all encumbrances (other than restrictions on transfer under the Transaction Documents arising under applicable federal and state securities laws), and will not be subject to preemptive rights or other similar rights of stockholders of the Company 
5.03    Consents. Neither the execution, delivery or performance of this Agreement by the Company, nor the consummation by it of the obligations and transactions contemplated hereby (including, without limitation, the issuance, the reservation for issuance and the delivery of the Shares and the provision to the Purchaser of the rights contemplated by the Transaction Documents) requires any consent of, authorization by, exemption from, filing with or notice to any Governmental Entity or any other Person, other than filings required under applicable U.S. federal and state securities laws. 
5.04    No Conflicts. 
(a)    The execution, delivery and performance of this Agreement and the consummation of the transactions contemplated hereby (including, without limitation, the issuance, the reservation for issuance and the delivery of the Shares and the provision to the Purchaser of the rights contemplated by the Transaction Documents) 

4.    

will not (a) result in a violation of the Company’s Certificate of Incorporation, the Company’s Bylaws or any equivalent organizational document of the Company or any Subsidiary (the “Charter Documents”) or require the approval of the Company’s stockholders, (b) violate, conflict with or result in the breach of the terms, conditions or provisions of or constitute a default (or an event which with notice or lapse of time or both would become a default) under, or give rise to any right of termination, acceleration or cancellation under, any material agreement, lease, mortgage, license, indenture, instrument or other contract to which the Company or any Subsidiary is a party, (c) result in a violation of any law, rule, regulation, order, judgment or decree (including, without limitation, U.S. federal and state securities laws and regulations and regulations of any self-regulatory organizations to which the Company or its securities are subject) applicable to the Company or any Subsidiary or by which any property or asset of the Company or any Subsidiary is bound or affected, (d) result in a violation of or require stockholder approval under any rule or regulation of The NASDAQ Stock Market (“NASDAQ”), or (e) result in the creation of any encumbrance upon any of the Company’s or any of its Subsidiary’s assets. 
(b)    Neither the Company nor any Subsidiary is (i) in violation of its Charter Documents, (ii) in default (and no event has occurred which, with notice or lapse of time or both, would cause the Company or any Subsidiary to be in default) under, nor has there occurred any event giving others (with notice or lapse of time or both) any rights of termination, amendment, acceleration or cancellation of, any material agreement, indenture or instrument to which the Company or any Subsidiary is a party, except where such default would not have a Material Adverse Effect, nor has the Company or any Subsidiary received written notice of a claim that it is in default under, or that it is in violation of, any Material Contract (whether or not such default or violation has been waived), except where such default would not have a Material Adverse Effect, (iii) in violation of, or in receipt of written notice that it is in violation of, any law, ordinance or regulation of any Governmental Entity, except where such violation would not result in a Material Adverse Effect, and (iv) in violation of any order of any Governmental Entity having jurisdictional over the Company or any Subsidiary or any of the Company’s or any Subsidiary’s properties or assets. 
5.05    Capitalization. 
(a)    As of September 30, 2017, the authorized capital stock of the Company consists of 210,000,000 shares of capital stock, of which 200,000,000 are designated as Common Stock and 10,000,000 are designated as preferred stock, $0.0001 par value per share (“Preferred Stock”). As of September 30, 2017: (i) 16,879,006 shares of Common Stock were issued and outstanding; (ii) 3,093,599 shares of Common Stock were issuable (and such number was reserved for issuance) upon exercise of options to purchase Common Stock (the “Options”) outstanding as of such date; (iii) 230,000 shares of Common Stock were issuable (and such number was reserved for issuance) upon vesting of restricted stock units for the issuance of Common Stock (the “RSUs”) outstanding as of such date; and (iv) 17,331 shares of Common Stock were issuable (and such number was reserved for issuance) upon exercise of warrants to purchase Common Stock (the “Warrants”) outstanding as of such date. 
(b)    As of September 30, 2017, except for: (i) the Options, (ii) the RSUs, and (iii) the Warrants, there were no options, warrants or other rights to acquire capital stock or other equity interests from the Company, or securities convertible into or exchangeable for such capital stock or other equity interests. 
5.06    Material Contracts. Each Material Contract is the legal, valid and binding obligation of the Company or a Subsidiary, as the case may be, enforceable against the Company or such Subsidiary, as the case may be, in accordance with its terms, except to the extent that enforceability may be limited by bankruptcy, insolvency, reorganization, moratorium, fraudulent conveyance, and any other laws of general application affecting enforcement of creditors’ rights generally, and as limited by laws relating to the availability of specific performance, injunctive relief, or other equitable remedies. The Company and each Subsidiary, as the case may be, is in compliance with all material terms of the Material Contracts to which it is a party, and there has not occurred any breach, violation or default or any event that, with the lapse of time, the giving of notice or the election of any Person, or any combination thereof, would constitute a breach, violation or default by the Company or any Subsidiary under any such Material Contract or, to the knowledge of the Company and each Subsidiary, by any other Person to any such contract except where such breach, violation or default would not have a Material Adverse Effect. Neither the Company nor any 

5.    

Subsidiary has been notified that any party to any Material Contract intends to cancel, terminate, not renew or exercise an option under any Material Contract, whether in connection with the transactions contemplated hereby or otherwise. 
5.07    NASDAQ. The Common Stock is listed on The Nasdaq Global Market. To the Company’s knowledge, there are no proceedings to revoke or suspend such listing or the listing of the Shares. The Company is in compliance with the requirements of NASDAQ for continued listing of the Common Stock thereon and any other applicable NASDAQ listing and maintenance requirements, and the execution, delivery and performance of this Agreement by the Company and the consummation by the Company of the transactions contemplated hereby (including the issuance of the Shares) will not result in any noncompliance by the Company with any such requirements. 
5.08    No Integrated Offering. Neither the Company, any Subsidiary, nor any of the Company’s or any Subsidiary’s Affiliates or any other Person acting on the Company’s or any Subsidiary’s behalf, has directly or indirectly engaged in any form of general solicitation or general advertising with respect to the Shares, nor have any of such Persons made any offers or sales of any security of the Company, any Subsidiary or any of the Company’s or any Subsidiary’s Affiliates or solicited any offers to buy any security of the Company, any Subsidiary or any of the Company’s or any Subsidiary’s Affiliates under circumstances that would require registration of the Shares under the Securities Act or any other securities laws or cause this offering of Shares to be integrated with any prior offering of securities of the Company or any Subsidiary for purposes of the Securities Act in any manner that would affect the validity of the private placement exemption under the Securities Act for the offer and sale of the Shares hereunder.
5.09    SEC Reports; Financial Statements; Shell Company Status. 
(a)    The Company’s Common Stock is registered under Section 12 of the Exchange Act. The Company has filed all reports, schedules, forms, statements and other documents required to be filed by the Company under the Exchange Act, including pursuant to Section 13(a) or 15(d) thereof, since January 1, 2017 (the foregoing materials, including the exhibits thereto and documents incorporated by reference therein, being collectively referred to herein as the “SEC Reports”) on a timely basis or has received a valid extension of such time of filing and has filed any such SEC Reports prior to the expiration of any such extension. As of their respective dates, the SEC Reports complied in all material respects with the requirements of the Exchange Act and, in each case, to the rules promulgated thereunder, as applicable, and none of the SEC Reports, when filed, contained any untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading. 
(b)    The financial statements and the related notes of the Company included in the SEC Reports comply in all material respects with applicable accounting requirements and the rules and regulations of the Commission with respect thereto as in effect at the time of filing. Such financial statements have been prepared in accordance with GAAP, except as may be otherwise specified in such financial statements or the notes thereto and except that unaudited financial statements may not contain all footnotes required by GAAP, and fairly present the consolidated financial position of the Company as of and for the dates thereof and the consolidated results of operations and cash flows for the periods then ended, subject, in the case of unaudited statements, to normal, immaterial, year-end audit adjustments. There is no transaction, arrangement, or other relationship between the Company or any Subsidiary and an unconsolidated or other off balance sheet entity that is required to be disclosed by the Company in SEC Reports and is not so disclosed and would have or reasonably be expected to result in a Material Adverse Effect. 
(c)    The Company is not, and has never been, an issuer identified in Rule 144(i)(1) under the Securities Act. 
5.10    Disclosure Controls and Procedures; Internal Controls Over Financial Reporting. 

6.    

(a)    The Company has established and maintains disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) that are effective in all material respects to ensure that material information relating to the Company, including any consolidated Subsidiaries, is made known to its principal executive officer and principal financial officer by others within those entities. The Company’s certifying officers have evaluated the effectiveness of the Company’s disclosure controls and procedures as of the end of the period covered by the most recently filed quarterly or annual periodic report under the Exchange Act (such date, the “Evaluation Date”). The Company presented in its most recently filed quarterly or annual periodic report under the Exchange Act the conclusions of the certifying officers about the effectiveness of the disclosure controls and procedures based on their evaluations as of the Evaluation Date. 
(b)    The Company maintains internal control over financial reporting (as such term is defined in Exchange Act Rule 13a-15(f) and 15d-15(f)) designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with GAAP and such internal control over financial reporting is effective. The Company presented in its most recently filed annual report under the Exchange Act the conclusions of the certifying officers about the effectiveness of the Company’s internal control over financial reporting based on their evaluations as of the end of the period covered by such report. Since the Evaluation Date, there have been no significant changes in the Company’s internal control over financial reporting or, to the Company’s knowledge, in other factors that could significantly affect the Company’s internal control over financial reporting. 
5.11    Absence of Litigation. There is no claim, action, suit, arbitration, investigation or other proceeding pending against, or to the knowledge of the Company and each Subsidiary, threatened against or affecting, the Company, any Subsidiary or any of the Company’s or any Subsidiary’s properties or, to the knowledge of the Company and each Subsidiary, any of its respective officers or directors before any Governmental Entity, in each case other than legal proceedings that are not reasonably expected to result in a Material Adverse Effect. Neither the Company nor any Subsidiary, nor any director or officer thereof, is or has been the subject of any action involving a claim of violation of or liability under federal or state securities laws or a claim of breach of fiduciary duty relating to the Company or any Subsidiary. There has not been, and to the knowledge of the Company and each Subsidiary, there is not pending or contemplated, any investigation by the Commission of the Company or any Subsidiary or any current or former director or officer of the Company or any Subsidiary. The Company has not received any stop order or other order suspending the effectiveness of any registration statement filed by the Company under the Exchange Act or the Securities Act and, to the Company’s knowledge, the SEC has not issued any such order. 
5.12    Taxes. The Company and each Subsidiary has properly filed all federal, foreign, state, local, and other tax returns and reports which are required to be filed by it, which returns and reports were properly completed and are true and correct in all material respects, and all taxes, interest, and penalties due and owing have been timely paid. There are no outstanding waivers or extensions of time with respect to the assessment or audit of any tax or tax return of the Company or any Subsidiary, or claims now pending or matters under discussion between the Company and any taxing authority in respect of any tax of the Company. The Company has no material uncertain tax positions pursuant to FASB Interpretation 48 (FIN 48), Accounting for Uncertainty in Income Taxes. 
5.13    Employee Matters. 
(a)    The Company has disclosed in the SEC Reports any “employee benefit plan” subject to the Employee Retirement Income Security Act of 1974, as amended (“ERISA”), that it or any Subsidiary maintains for employees. 
(b)    No director or officer or other employee of the Company or any Subsidiary will become entitled to any retirement, severance, change of control, or similar benefit or enhanced or accelerated benefit (including any acceleration of vesting) or lapse of repurchase rights or obligations with respect to any employee benefit plan subject to ERISA or other benefit under any compensation plan or arrangement of the Company (each, an “Employee Benefit Plan”) as a result of the transactions contemplated in this Agreement. 

7.    

(c)    No executive officer, to the knowledge of the Company and each Subsidiary, is, or is now reasonably expected to be, in violation of any term of any employment contract, confidentiality, disclosure or proprietary information agreement or non-competition agreement, or any other contract or agreement or any restrictive covenant with the Company or any Subsidiary, and, to the knowledge of the Company and each Subsidiary, the continued employment of each such executive officer does not subject the Company or any Subsidiary to any material liability with respect to any of the foregoing matters. 
(d)    The Company and each Subsidiary is in compliance with all applicable federal, state, local and foreign statutes, laws (including, without limitation, common law), judicial decisions, regulations, ordinances, rules, judgments, orders and codes respecting employment, employment practices, labor, terms and conditions of employment and wages and hours, except where the failure to comply would not have a Material Adverse Effect, and no work stoppage or labor strike against the Company or any Subsidiary is pending or, to their knowledge, threatened, nor is the Company or any Subsidiary involved in or, to their knowledge, threatened with any labor dispute, grievance or litigation relating to labor matters involving any current or former employees of the Company, any Subsidiary or any independent contractors. There are no suits, actions, disputes, claims (other than routine claims for benefits), investigations or audits pending or, to the knowledge of the Company and each Subsidiary, threatened in connection with any Employee Benefit Plan, but excluding any of the foregoing which would not have a Material Adverse Effect. 
5.14    Compliance with Laws. 
(a)    Except as would not result in a Material Adverse Effect: (i) the Company is and has been in compliance with statutes, laws, ordinances, rules and regulations applicable to the Company for the ownership, testing, development, manufacture, packaging, processing, use, labeling, storage, or disposal of any product manufactured by or on behalf of the Company or out-licensed by the Company (a “Company Product”), including without limitation, the Federal Food, Drug, and Cosmetic Act, 21 U.S.C. § 301, et seq., the Public Health Service Act, 42 U.S.C. § 262, similar laws of other Governmental Entities and the regulations promulgated pursuant to such laws (collectively, “Applicable Laws”); (ii) the Company possesses all licenses, certificates, approvals, authorizations, permits and supplements or amendments thereto required by any such Applicable Laws and/or for the ownership of its properties or the conduct of its business as it relates to a Company Product and as described in the SEC Reports (collectively, “Authorizations”) and such Authorizations are valid and in full force and effect and the Company is not in violation of any term of any such Authorizations; (iii) the Company has not received any written notice of adverse finding, warning letter or other written correspondence or notice from the U.S. Food and Drug Administration (the “FDA”) or any other Governmental Entity alleging or asserting noncompliance with any Applicable Laws or Authorizations relating to a Company Product; (iv) the Company has not received written notice of any ongoing claim, action, suit, proceeding, hearing, enforcement, investigation, arbitration or other action from any Governmental Entity or third party alleging that any Company Product, operation or activity related to a Company Product is in violation of any Applicable Laws or Authorizations or has any knowledge that any such Governmental Entity or third party is considering any such claim, litigation, arbitration, action, suit, investigation or proceeding, nor, to the Company’s knowledge, has there been any noncompliance with or violation of any Applicable Laws by the Company that would reasonably be expected to require the issuance of any such written notice or result in an investigation, corrective action, or enforcement action by the FDA or similar Governmental Entity with respect to a Company Product; (v) the Company has not received written notice that any Governmental Entity has taken, is taking or intends to take action to limit, suspend, modify or revoke any Authorizations or has any knowledge that any such Governmental Entity has threatened or is considering such action with respect to a Company Product; and (vi) the Company has filed, obtained, maintained or submitted all reports, documents, forms, notices, applications, records, claims, submissions and supplements or amendments as required by any Applicable Laws or Authorizations and that all such reports, documents, forms, notices, applications, records, claims, submissions and supplements or amendments were complete, correct and not misleading on the date filed (or were corrected or supplemented by a subsequent submission).

8.    

(b)    To the Company’s knowledge, neither the Company nor any of its directors, officers, employees or agents, has made, or caused the making of, any false statements on, or material omissions from, any other records or documentation prepared or maintained to comply with the requirements of the FDA or any other Governmental Entity. 
(c)    The clinical studies and tests conducted by the Company or on behalf of the Company, have been and, if still pending, are being conducted in all material respects pursuant to all Applicable Laws and Authorizations; the descriptions of the results of such clinical studies and tests contained in the SEC Reports are accurate and complete in all material respects and fairly present the data derived from such clinical studies and tests; the Company is not aware of any clinical studies or tests, the results of which the Company believes reasonably call into question the research, nonclinical or clinical study or test results described or referred to in the SEC Reports when viewed in the context in which such results are described; and the Company has not received any written notices or correspondence from any Governmental Entity requiring the termination, suspension or material modification of any clinical study or test being conducted by or on behalf of the Company. 
5.15    Brokers. Except for Cantor Fitzgerald & Co., there is no investment banker, broker, finder, financial advisor, placement agent or other Person that has been retained by or is authorized to act on behalf of the Company or any Subsidiary who might be entitled to any fee or commission in connection with the transactions contemplated by this Agreement. 
5.16    Environmental Matters. The Company: (i) is in compliance with any and all applicable foreign, federal, state and local laws and regulations relating to the protection of human health and safety, the environment or hazardous or toxic substances or wastes, pollutants or contaminants (“Environmental Laws”); (ii) has received and is in compliance with all permits, licenses or other approvals required of them under applicable Environmental Laws to conduct its business; and (iii) has not received notice of any actual or potential liability under any Environmental Law, except in each case where such non-compliance with Environmental Laws, failure to receive required permits, licenses or other approvals, or liability would not, individually or in the aggregate, have a Material Adverse Effect, whether or not arising from transactions in the ordinary course of business. The Company has not been named as a “potentially responsible party” under the Comprehensive Environmental Response, Compensation, and Liability Act of 1980, as amended. 
5.17    Intellectual Property Matters. The Company owns, possesses, licenses or has other rights to use, on reasonable terms, all patents, patent applications, trade and service marks, trade and service mark registrations, trade names, copyrights, licenses, inventions, trade secrets, technology, know-how and other intellectual property (collectively, the “Intellectual Property”) necessary for the conduct of the Company’s business as now conducted or as proposed in the SEC Reports to be conducted (the “Company Intellectual Property”). To the knowledge of the Company, there are no rights of third parties to any Company Intellectual Property, other than as licensed by the Company. To the knowledge of the Company, there is no infringement by third parties of any Company Intellectual Property. There is no pending or, to the Company’s knowledge, threatened action, suit, proceeding or claim by others challenging the Company’s rights in or to any Company Intellectual Property. There is no pending or, to the Company’s knowledge, threatened action, suit, proceeding or claim by others challenging the validity or scope of any Company Intellectual Property. There is no pending or, to the Company’s knowledge, threatened action, suit, proceeding or claim by others that the Company infringes or otherwise violates any patent, trademark, copyright, trade secret or other proprietary rights of others. The Company is not aware of any facts required to be disclosed to the U.S. Patent and Trademark Office (“USPTO”) which have not been disclosed to the USPTO and which would preclude the grant of a patent in connection with any patent application of the Company Intellectual Property or could form the basis of a finding of invalidity with respect to any issued patents of the Company Intellectual Property. 
5.18    Absence of Changes. Since the Evaluation Date: (a) there has not been any Material Adverse Effect or any event or events that individually or in the aggregate would reasonably be expected to have a Material Adverse Effect; (b) there has not been any dividend or distribution of any kind declared, set aside for payment, paid or made by the Company on any class of capital stock; (c) neither the Company nor any Subsidiary has sustained any material 

9.    

loss or interference with the Company’s or any Subsidiary’s business from fire, explosion, flood or other calamity, whether or not covered by insurance, or from any labor disturbance or dispute or any action, order or decree of any court or arbitrator or governmental or regulatory authority; and (d) neither the Company nor any Subsidiary has incurred any material liabilities except in the ordinary course of business. 
5.19    Suppliers and Customers. Neither the Company nor any Subsidiary has any knowledge of any termination, cancellation or threatened termination or cancellation or limitation of, or any material dissatisfaction with, the business relationship between the Company or any Subsidiary and any material supplier, customer, vendor, customer or client. 
5.20    Accountants. Ernst & Young LLP (“E&Y”), who expressed their opinion with respect to the audited financial statements included in the SEC Reports, are independent accountants as required by the Securities Act and the rules and regulations promulgated thereunder. There are no disagreements of any kind presently existing, or reasonably anticipated by the Company to arise, between the Company and E&Y. 
5.21    Application of Takeover Protections. The Company and its Board of Directors have taken all necessary action, if any, in order to render inapplicable any control share acquisition, business combination, poison pill (including any distribution under a rights agreement) or other similar anti-takeover provision under the Charter Documents or the laws of its state of incorporation (including Section 203 of the Delaware General Corporation Law) that is or could become applicable to each Purchaser as a result of such Purchaser and the Company fulfilling their obligations or exercising their rights under this Agreement, including without limitation as a result of the Company’s issuance of the Shares and such Purchaser’s ownership of the Shares. 
5.22    Foreign Corrupt Practices. Since January 1, 2017, neither the Company, its Subsidiaries, nor to the Company’s and each Subsidiary’s knowledge, any director, officer, agent, employee or other person acting on behalf of the Company or any Subsidiary has, in the course of its actions for, or on behalf of, the Company or any Subsidiary (a) used any corporate funds for any unlawful contribution, gift, entertainment or other unlawful expenses relating to political activity; (b) made any direct or indirect unlawful payment to any foreign or domestic government official or employee from corporate funds; (c) violated or is in violation of in any material respect any provision of the U.S. Foreign Corrupt Practices Act of 1977, as amended; or (d) made any unlawful bribe, rebate, payoff, influence payment, kickback or other unlawful payment to any foreign or domestic government official or employee. 
5.23    Private Placement. Neither the Company nor its Subsidiaries or any affiliates, nor any person acting on its or their behalf, has, directly or indirectly, made any offers or sales of any security or solicited any offers to buy any security, under any circumstances that would require registration of the Shares under the Securities Act. Assuming the accuracy of the representations and warranties of the Purchasers contained in Section 4 hereof, the issuance of the Shares are exempt from registration under the Securities Act. 
5.24    Insurance. The Company is insured by insurers of recognized financial responsibility against such losses and risks and in such amounts as the Company believes are prudent and customary for a company: (a) in the businesses and location in which the Company is engaged; (b) with the resources of the Company; and (c) at a similar stage of development as the Company. The Company has not received any written notice that the Company will not be able to renew its existing insurance coverage as and when such coverage expires. The Company believes it will be able to obtain similar coverage at reasonable cost from similar insurers as may be necessary to continue its business. 
5.25    No Manipulation of Stock. The Company has not taken, nor will it take, directly or indirectly, any action designed to stabilize or manipulate the price of the Common Stock or any security of the Company to facilitate the sale or resale of any of the Shares. 
5.26    Disclosure. The Company understands and confirms that the Purchaser will rely on the foregoing representations in effecting transactions in securities of the Company. No representation or warranty by the Company contained in this Agreement contains any untrue statement of a material fact or omits to state any material fact 

10.    

necessary in order to make the statements made therein, in light of the circumstances under which they were made, not misleading. The Company acknowledges and agrees that the Purchaser does not make and has not made any representations or warranties with respect to the transactions contemplated hereby other than those specifically set forth in Section 4 hereof. 
Section 6.    Covenants. 
6.01    Reasonable Best Efforts. Each party shall use its reasonable best efforts to timely satisfy each of the conditions to be satisfied by it as provided in Section 7 of this Agreement. 
6.02    Reporting Status. During the Reporting Period, the Company shall use reasonable best efforts to: (a) timely file all reports required to be filed with the Commission pursuant to the Exchange Act or the rules and regulations thereunder; and (b) not take any action or file any document (whether or not permitted by the Securities Act or the rules promulgated thereunder) to terminate or suspend the Company’s reporting and filing obligations under the Exchange Act or Securities Act. 
6.03    Use of Proceeds. The Company will use the proceeds from the sale of the Shares for research and development of CD101, the Company’s product candidate, furtherance of the Company’s Cloudbreak program and general corporate purposes. 
6.04    Pledge of Shares. The Company acknowledges and agrees that the Shares may be pledged by the Purchasers in connection with a bona fide margin agreement or other loan or financing arrangement that is secured by the Shares. The pledge of Shares shall not be deemed to be a transfer, sale or assignment of the Shares hereunder, and in effecting a pledge of Shares the Purchasers shall not be required to provide the Company with any notice thereof or otherwise make any delivery to the Company pursuant to this Agreement. The Company hereby agrees to execute and deliver such documentation as a pledgee of the Shares may reasonably request in connection with a pledge of the Shares to such pledgee by the Purchasers. 
6.05    Disclosure of Transactions and Other Material Information. On or before 8:30 a.m., New York City time, on the second Business Day following the date of this Agreement, the Company shall issue a press release and file a Current Report on Form 8-K describing the terms and conditions of the transactions contemplated by the Transaction Documents in the form required by the Exchange Act and attaching the Agreement as an exhibit to such filing (including all attachments, the “8-K Filing”). The Company shall not publicly disclose the name of any Purchaser or any affiliate or investment adviser of the Purchaser, or include the name of any Purchaser or any affiliate or investment adviser of the Purchaser in any filing with the Commission (other than in a Registration Statement and any exhibits to filings made in respect of this transaction in accordance with periodic report or current report filing requirements under the Exchange Act) or any regulatory agency, without the prior written consent of such Purchaser, except to the extent such disclosure is required by law or regulations, in which case the Company shall provide each Purchaser whose name is to be disclosed with prior notice of such disclosure and a reasonable opportunity to comment on the proposed disclosure insofar as it relates specifically to such Purchaser. Subject to the foregoing, neither the Company nor the Purchasers shall issue any press releases or any other public statements with respect to the transactions contemplated hereby; provided, however, that the Company shall be entitled, without the prior approval of the Purchasers, to make any press release or other public disclosure with respect to such transactions (a) in substantial conformity with the 8-K Filing and contemporaneously therewith and (b) as is required by Applicable Law. 
6.06    Short Sales. Each Purchaser covenants that neither it nor any Affiliates acting on its behalf or pursuant to any understanding with it will execute any Short Sales during the period from the date hereof until the earlier of such time as: (a) after the transactions contemplated by this Agreement are first publicly announced; or (b) this Agreement is terminated in full. Except: (i) as required by Applicable Law or the listing rules of any applicable national or regional securities exchange; (ii) as required to be disclosed in filings or other submissions to any court, regulatory body, administrative agency, governmental body, arbitrator or other legal authority having jurisdiction 

11.    

over a party hereto made to obtain necessary consents, approvals or filings; or (iii) as provided by the terms and provisions of the existing confidentiality and non-use obligations of the parties hereto, each Purchaser covenants that until such time as the transactions contemplated by this Agreement are publicly disclosed by the Company, such Purchaser will maintain the confidentiality of all disclosures made to it in connection with this transaction (including the existence and terms of this transaction). Each Purchaser understands and acknowledges that the Commission currently takes the position that coverage of Short Sales of shares of the Common Stock “against the box” prior to effectiveness of a resale registration statement with securities included in such registration statement would be a violation of Section 5 of the Securities Act, as set forth in Item 239.10 of the Securities Act Rules Compliance and Disclosure Interpretations compiled by the Office of Chief Counsel, Division of Corporation Finance. 
6.07    Expenses. The Company and each Purchaser is liable for, and will pay, its own expenses incurred in connection with the negotiation, preparation, execution and delivery of this Agreement, including, without limitation, attorneys’ and consultants’ fees and expenses. 
Section 7.    Conditions of Parties’ Obligations. 
7.01    Conditions of the Purchasers’ Obligations at the Closing. The obligations of the Purchasers under Section 2 hereof are subject to the fulfillment, prior to the Closing, of all of the following applicable conditions, any of which may be waived in whole or in part by the Purchasers in their absolute discretion. If the following conditions are not satisfied on or before 5:00 p.m. (Eastern Time) on the 10th Business Day following the Effective Date (the “Outside Date”), then any Purchaser may terminate this Agreement with respect to that particular Purchaser upon providing written notice to the Company. 
(a)    Representations and Warranties. The representations and warranties of the Company contained in this Agreement and in any certificate, if any, or other writing, if any, delivered by the Company pursuant hereto shall be true and correct on and as of the Closing Date with the same effect as though such representations and warranties had been made on and as of the Closing Date (except to the extent expressly made as of an earlier date in which case as of such earlier date). 
(b)    Performance. The Company shall have performed and complied in all material respects with all covenants, agreements, obligations and conditions contained in this Agreement that are required to be performed or complied by it on or prior to the Closing Date. 
(c)    Delivery. The Company shall deliver this Agreement duly executed by the Company. 
(d)    Qualification under State Securities Laws. All registrations, qualifications, permits and approvals, if any, required under applicable state securities laws shall have been obtained for the lawful execution, delivery and performance of this Agreement. 
(e)    Consents and Waivers. The Company shall have obtained all consents or waivers necessary to execute and perform its obligations under this Agreement. All corporate and other action and governmental filings necessary for the Company to effectuate the terms of this Agreement and other agreements and instruments executed and delivered by the Company in connection herewith shall have been made or taken by the Company, and no Material Adverse Effect has occurred with respect to the operation of the Company’s business. 
(f)    Transfer Agent Instructions. The Company shall have delivered to its transfer agent irrevocable written instructions to issue to such Purchaser (or in such nominee’s name(s) as designated by such Purchaser) one or more certificates representing such Shares set forth opposite such Purchaser’s name on Schedule I hereto (or book-entry notations in lieu of such certificates); provided, however, that if such Purchaser has indicated to the Company at the time of execution of this Agreement a need to settle “delivery versus payment,” the Company shall deliver to such Purchaser (or such Purchaser’s designated custodian) such original stock certificates to be acquired 

12.    

by such Purchaser (or written confirmation that such Shares have been issued in the Purchaser’s name via book-entry notation). 
(g)    Absence of Litigation. No proceeding challenging this Agreement or the transactions contemplated hereby, or seeking to prohibit, alter, prevent or materially delay the Closing, shall have been instituted or be pending before any court, arbitrator, governmental body, agency or official. The sale of the Shares by the Company shall not be prohibited by any law or governmental order or regulation. 
7.02     Conditions of the Company’s Obligations. The obligations of the Company under Section 2 hereof are subject to the fulfillment prior to or on the Closing Date of all of the following conditions, any of which may be waived in whole or in part by the Company: (a) each Purchaser at the Closing shall have performed all of its obligations hereunder required to be performed by it at or prior to the Closing; and (b) the representations and warranties of the Purchasers at the Closing contained in this Agreement shall be true and correct at and as of the Closing as if made at and as of the Closing (except to the extent expressly made as of an earlier date, in which case as of such earlier date). If the foregoing conditions are not satisfied on or the Outside Date, then the Company may terminate this Agreement upon providing written notice to the Purchasers. 
Section 8.    Transfer Restrictions; Restrictive Legend. 
8.01    Transfer Restrictions. The Purchasers understand that the Company may, as a condition to the transfer of any of the Shares, require that the request for transfer be accompanied by an opinion of counsel reasonably satisfactory to the Company, to the effect that the proposed transfer does not result in a violation of the Securities Act, unless such transfer is covered by an effective registration statement or by Rule 144 or Rule 144A under the Securities Act; provided, however, that an opinion of counsel shall not be required for a transfer by a Purchaser that is: (A) a partnership transferring to its partners or former partners in accordance with partnership interests; (B) a corporation transferring to a wholly owned subsidiary or a parent corporation that owns all of the capital stock of such Purchaser; (C) a limited liability company transferring to its members or former members in accordance with their interest in the limited liability company; (D) an individual transferring to such Purchaser’s family member or trust for the benefit of an individual Purchaser; (E) transferring its Shares to any Affiliate of such Purchaser, in the case of an institutional investor, or other Person under common management with such Purchaser; or (F) a transfer that is made pursuant to a bona fide gift to a third party; provided, further, that (i) the transferee in each case agrees to be subject to the restrictions in this Section 8 and provides the Company with a representation letter containing customary investment representations under the Securities Act, (ii) the Company satisfies itself that the number of transferees is sufficiently limited and (iii) in the case of transferees that are partners or limited liability company members, the transfer is for no consideration. It is understood that the certificates evidencing the Shares may bear substantially the following legend: 
“THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 OR ANY APPLICABLE STATE SECURITIES LAWS. THEY MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED OR HYPOTHECATED IN THE ABSENCE OF A REGISTRATION STATEMENT IN EFFECT WITH RESPECT TO THE SECURITIES UNDER SUCH ACT OR APPLICABLE STATE SECURITIES LAWS OR AN OPINION OF COUNSEL SATISFACTORY TO THE COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED OR UNLESS SOLD PURSUANT TO RULE 144 OR RULE 144A OF SUCH ACT.” 
8.02    Unlegended Certificates. The Company shall, at its sole expense, upon appropriate notice from any Purchaser stating that Registrable Securities have been sold pursuant to an effective Registration Statement, timely prepare and deliver certificates representing the Shares to be delivered to a transferee pursuant to the Registration Statement, which certificates shall be free of any restrictive legends and in such denominations and registered in such names as such Purchaser may request. Further, the Company shall, at its sole expense, cause its legal counsel or other counsel satisfactory to the transfer agent to provide all opinions as may reasonably be required by the transfer agent in connection with the removal of legends. A Purchaser may request that the Company remove, and the Company agrees to authorize the removal of, any legend from such Shares, following the delivery by a Purchaser to the Company 

13.    

or the Company’s transfer agent of a legended certificate representing such Shares: (i) following any sale of such Shares pursuant to Rule 144, (ii) if such Shares are eligible for sale under Rule 144(b)(1), or (iii) following the time a legend is no longer required with respect to such Shares. If a legend is no longer required pursuant to the foregoing, the Company will, no later than three Business Days following the delivery by a Purchaser to the Company or the Company’s transfer agent of a legended certificate representing such Shares, deliver or cause to be delivered to such Purchaser a certificate representing such Shares that is free from all restrictive legends. Certificates for Shares free from all restrictive legends may be transmitted by the Company’s transfer agent to the Purchasers by crediting the account of the Purchaser’s prime broker with the Depository Trust Company (“DTC”) as directed by such Purchaser. The Company warrants that the Shares shall otherwise be freely transferable on the books and records of the Company as and to the extent provided in this Agreement. If a Purchaser effects a transfer of the Shares in accordance with Section 8.01, the Company shall permit the transfer and shall promptly instruct its transfer agent to issue one or more certificates or credit shares to the applicable balance accounts at DTC in such name and in such denominations as specified by such Purchaser to effect such transfer. Each Purchaser hereby agrees that the removal of the restrictive legend pursuant to this Section 8.02 is predicated upon the Company’s reliance that such Purchaser will sell any such Shares pursuant to either the registration requirements of the Securities Act, including any applicable prospectus delivery requirements, or an exemption therefrom. 
Section 9.    Registration, Transfer and Substitution of Certificates for Shares. 
9.01    Stock Register; Ownership of Shares. The Company will keep at its principal office, or will cause its transfer agent to keep, a register in which the Company will provide for the registration of transfers of the Shares. The Company may treat the Person in whose name any of the Shares are registered on such register as the owner thereof and the Company shall not be affected by any notice to the contrary. All references in this Agreement to a “holder” of any Shares shall mean the Person in whose name such Shares are at the time registered on such register. 
9.02    Replacement of Certificates. Upon receipt of evidence reasonably satisfactory to the Company of the loss, theft, destruction or mutilation of any certificate representing any of the Shares, and, in the case of any such loss, theft or destruction, upon delivery of an indemnity agreement and surety bond reasonably satisfactory to the Company or, in the case of any such mutilation, upon surrender of such certificate for cancellation at the office of the Company maintained pursuant to Section 9.01 hereof, the Company at its expense will execute and deliver, in lieu thereof, a new certificate representing such Shares, of like tenor. 
Section 10.    Registration Rights of Purchasers. 
10.01    Mandatory Registration. The Company shall prepare, and, as soon as practicable but in no event later than 45 days after the Closing Date (the “Filing Deadline”), file with the Commission a Registration Statement under the Securities Act on appropriate form covering the resale of the full amount of the Shares (the “Registrable Securities”). The Company shall use its commercially reasonable efforts to have the Registration Statement declared effective by the Commission as soon as practicable, but in no event later than the date (the “Effectiveness Deadline”), which shall be either: (i) in the event that the Commission does not review the Registration Statement, 90 days after the Closing Date, or (ii) in the event that the Commission reviews the Registration Statement, 120 days after the Closing Date (but in any event, no later than three Business Days following the Commission indicating that it has no further comments on the Registration Statement). Subject to any comments from the staff of the Commission (the “Staff”), such Registration Statement shall include the plan of distribution attached hereto as Exhibit A; provided, however, that no Purchaser shall be named as an “underwriter” in the Registration Statement without the Purchaser’s prior written consent. Such Registration Statement shall not include any shares of Common Stock or other securities for the account of any other holder without the prior written consent of the Required Holders. 
10.02    Rule 415; Cutback. If at any time the Staff takes the position that the offering of some or all of the Registrable Securities in a Registration Statement is not eligible to be made on a delayed or continuous basis under the provisions of Rule 415 under the Securities Act or requires any Purchaser to be named as an “underwriter,” the Company shall use its reasonable best efforts to persuade the Commission that the offering contemplated by the 

14.    

Registration Statement is a valid secondary offering and not an offering “by or on behalf of the issuer” as defined in Rule 415 and that none of the Purchasers is an “underwriter.” In the event that, despite the Company’s reasonable best efforts and compliance with the terms of this Section 10.02, the Staff refuses to alter its position, the Company shall (i) remove from the Registration Statement such portion of the Registrable Securities (the “Cut Back Shares”) and/or (ii) agree to such restrictions and limitations on the registration and resale of the Registrable Securities as the Staff may require to assure the Company’s compliance with the requirements of Rule 415 (collectively, the “SEC Restrictions”); provided, however, that the Company shall not agree to name any Purchaser as an “underwriter” in such Registration Statement without the prior written consent of such Purchaser. Any cutback imposed on the Purchasers pursuant to this Section 10.02 shall be allocated among the Purchasers on a pro rata basis, unless the SEC Restrictions otherwise require or provide or the Purchasers otherwise agree. No liquidated damages shall accrue as to any Cut Back Shares until such date as the Company is able to effect the registration of such Cut Back Shares in accordance with any SEC Restrictions (such date, the “Restriction Termination Date” of such Cut Back Shares). From and after the Restriction Termination Date applicable to any Cut Back Shares, all of the provisions of this Section 10 (including the liquidated damages provisions) shall again be applicable to such Cut Back Shares; provided, however, that (x) the Filing Deadline for the Registration Statement including such Cut Back Shares shall be 10 Business Days after such Restriction Termination Date, and (y) the Effectiveness Deadline with respect to such Cut Back Shares shall be the 90th day immediately after the Restriction Termination Date or the 120th day if the Staff reviews such Registration Statement (but in any event no later than three Business Days from the Staff indicating it has no further comments on such Registration Statement). 
10.03    Effect of Failure to File and Obtain and Maintain Effectiveness of Registration Statement. Subject to Section 10.02, if either: (a) a Registration Statement covering all of the Registrable Securities required to be covered thereby and required to be filed by the Company pursuant to this Agreement is (i) not filed with the Commission on or before the Filing Deadline (a “Filing Failure”) or (ii) not declared effective by the Commission on or before the Effectiveness Deadline (an “Effectiveness Failure”); or (b) on any day during the Reporting Period and after the Effectiveness Date, sales of all of the Registrable Securities required to be included on such Registration Statement cannot be made (other than (i) during an Allowable Grace Period or (ii) if the Registration Statement is on Form S-1, for a period of 15 days following the date the Company files a post-effective amendment to incorporate the Company’s Annual Report on Form 10-K) pursuant to such Registration Statement (including, without limitation, because of a failure to keep such Registration Statement effective, to disclose such information as is necessary for sales to be made pursuant to such Registration Statement or to register a sufficient number of shares of Common Stock) (a “Maintenance Failure”), then, in satisfaction of the damages to any holder of Registrable Securities by reason of any such delay in or reduction of its ability to sell the underlying shares of Common Stock, the Company shall pay to each holder of Registrable Securities relating to such Registration Statement an amount in cash equal to 1.0% of such holder’s Pro Rata Interest in the Aggregate Purchase Price on each of the following dates: (x) the day of a Filing Failure and on every 30th day (prorated for periods totaling less than 30 days) thereafter until such Filing Failure is cured; (y) the day of an Effectiveness Failure and on every 30th day (prorated for periods totaling less than 30 days) thereafter until such Effectiveness Failure is cured; and (z) the initial day of a Maintenance Failure and on every 30th day (prorated for periods totaling less than 30 days) thereafter until such Maintenance Failure is cured. The payments to which a holder shall be entitled pursuant to this Section 10.03 are referred to herein as “Registration Delay Payments;” provided that no Registration Delay Payments shall be required following the termination of the Reporting Period, and provided further that in no event shall the aggregate Registration Delay Payments accruing under this Section 10.03 exceed 6% of a holder’s Pro Rata Interest in the Aggregate Purchase Price (i.e., corresponding to a total delay of six months). The first such Registration Delay Payment shall be paid within three Business Days after the event or failure giving rise to such Registration Delay Payment occurred and all other Registration Delay Payments shall be paid on the earlier of (I) the last day of the calendar month during which such Registration Delay Payments are incurred and (II) the third Business Day after the event or failure giving rise to the Registration Delay Payments is cured. 
10.04    Related Obligations. At such time as the Company is obligated to file a Registration Statement with the Commission pursuant to Section 10.01 hereof, the Company will use commercially reasonable efforts to effect 

15.    

the registration of the Registrable Securities in accordance with the intended method of disposition thereof and, pursuant thereto, the Company shall have the following obligations: 
(a)    The Company shall submit to the Commission, within three Business Days after the Company learns that no review of a particular Registration Statement will be made by the staff of the Commission or that the staff has no further comments on a particular Registration Statement, as the case may be, a request for acceleration of effectiveness of such Registration Statement to a time and date not later than two Business Days after the submission of such request. The Company shall keep each Registration Statement effective pursuant to Rule 415 at all times with respect to each Purchaser’s Registrable Securities until the expiration of the Reporting Period. The Company shall ensure that each Registration Statement (including any amendments or supplements thereto and prospectuses contained therein) shall not contain any untrue statement of a material fact or omit to state a material fact required to be stated therein, or necessary to make the statements therein (in the case of prospectuses, in the light of the circumstances in which they were made) not misleading. 
(b)    The Company shall prepare and file with the Commission such amendments (including post-effective amendments) and supplements to a Registration Statement and the prospectus used in connection with such Registration Statement, which prospectus is to be filed pursuant to Rule 424 promulgated under the Securities Act, as may be necessary to keep such Registration Statement effective at all times during the Reporting Period, and, during such period, comply with the provisions of the Securities Act with respect to the disposition of all Registrable Securities of the Company covered by such Registration Statement until such time as all of such Registrable Securities shall have been disposed of in accordance with the intended methods of disposition by the seller or sellers thereof as set forth in such Registration Statement. 
(c)    Upon request of a Purchaser, the Company shall furnish to such Purchaser without charge, (i) promptly after the Registration Statement including such Purchaser’s Registrable Securities is prepared and filed with the Commission, at least one copy of such Registration Statement and any amendment(s) thereto, including financial statements and schedules, all documents incorporated therein by reference, and if requested by the Purchaser, all exhibits and each preliminary prospectus, (ii) upon the effectiveness of any Registration Statement, 10 copies of the prospectus included in such Registration Statement and all amendments and supplements thereto (or such other number of copies as the Purchaser may reasonably request) and (iii) such other documents, including copies of any preliminary or final prospectus, as the Purchaser may reasonably request from time to time in order to facilitate the disposition of the Registrable Securities.
(d)    The Company shall notify the Purchasers in writing of the happening of any event, as promptly as practicable after becoming aware of such event, as a result of which the prospectus included in a Registration Statement, as then in effect, includes an untrue statement of a material fact or omission to state a material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading (provided that in no event shall such notice contain any material, nonpublic information), and promptly prepare a supplement or amendment to such Registration Statement to correct such untrue statement or omission, and upon request deliver 10 copies of such supplement or amendment to the Purchasers (or such other number of copies as the Purchasers may reasonably request). Unless such information is publicly available, the Company shall also promptly notify the Purchasers in writing (i) when a prospectus or any prospectus supplement or post-effective amendment has been filed, and when a Registration Statement or any post-effective amendment has become effective (notification of such effectiveness shall be delivered to the Purchasers by facsimile or email on the same day of such effectiveness), (ii) of any request by the Commission for amendments or supplements to a Registration Statement or related prospectus or related information, and (iii) of the Company’s reasonable determination that a post-effective amendment to a Registration Statement would be appropriate. 
(e)    The Company shall use commercially reasonable efforts to prevent the issuance of any stop order or other suspension of effectiveness of a Registration Statement, or the suspension of the qualification of any of the Registrable Securities for sale in any jurisdiction and, if such an order or suspension is issued, to obtain the withdrawal of such order or suspension at the earliest possible moment and to notify the Purchaser who holds Registrable 

16.    

Securities being sold of the issuance of such order and the resolution thereof or its receipt of notice of the initiation or threat of any proceeding for such purpose. 
(f)    If a Purchaser is required under applicable securities law to be described in the Registration Statement as an underwriter, at the reasonable request of the Purchaser, the Company shall furnish to the Purchaser, on the date of the effectiveness of the Registration Statement and thereafter from time to time on such dates as the Purchaser may reasonably request, (i) a letter, dated such date, from the Company’s independent certified public accountants in form and substance as is customarily given by independent certified public accountants to underwriters in an underwritten public offering, addressed to the Purchaser, and (ii) an opinion, dated as of such date, of counsel representing the Company for purposes of such Registration Statement, in form, scope and substance as is customarily given in an underwritten public offering, addressed to the Purchaser. 
(g)    If a Purchaser is required under applicable securities law to be described in the Registration Statement as an underwriter, upon the written request of the Purchaser in connection with the Purchaser’s due diligence requirements, if any, the Company shall make available for inspection by (i) the Purchaser and its legal counsel and (ii) one firm of accountants or other agents retained by the Purchaser (collectively, the “Inspectors”), all pertinent financial and other records, and pertinent corporate documents and properties of the Company (collectively, the “Records”), as shall be reasonably deemed necessary by each Inspector solely for the purpose of establishing a due diligence defense under underwriter liability under the Securities Act, and cause the Company’s officers, directors and employees to supply all information which any Inspector may reasonably request; provided, however, that each Inspector shall agree to hold in strict confidence and shall not make any disclosure (except to the Purchaser) or use of any Record or other information which the Company determines in good faith to be confidential, and of which determination the Inspectors are so notified, unless (a) the disclosure of such Records is necessary to avoid or correct a misstatement or omission in any Registration Statement or is otherwise required under the Securities Act, (b) the release of such Records is ordered pursuant to a final, non-appealable subpoena or order from a court or government body of competent jurisdiction, or (c) the information in such Records has been made generally available to the public other than by disclosure in violation of this Agreement or any other agreement. The Purchaser agrees that it shall, upon learning that disclosure of such Records is sought in or by a court or governmental body of competent jurisdiction or through other means, give prompt notice to the Company and allow the Company, at its expense, to undertake appropriate action to prevent disclosure of, or to obtain a protective order preventing disclosure of, the Records deemed confidential. Nothing herein (or in any other confidentiality agreement between the Company and the Purchaser) shall be deemed to limit the Purchaser’s ability to sell Registrable Securities in a manner which is otherwise consistent with Applicable Laws. 
(h)    The Company shall hold in confidence and not make any disclosure of information concerning the Purchasers provided to the Company unless (i) disclosure of such information is necessary to comply with federal or state securities laws, (ii) the disclosure of such information is necessary to avoid or correct a misstatement or omission in any Registration Statement, (iii) the release of such information is ordered pursuant to a subpoena or other final, non-appealable order from a court or governmental body of competent jurisdiction or (iv) such information has been made generally available to the public other than by disclosure in violation of this Agreement or any other agreement. The Company agrees that it shall, upon learning that disclosure of such information concerning the Purchasers is sought in or by a court or governmental body of competent jurisdiction or through other means, give prompt written notice to the Purchasers and allow the Purchasers, at each Purchaser’s expense, to undertake appropriate action to prevent disclosure of, or to obtain a protective order preventing disclosure of, such information. 
(i)    The Company shall cooperate with the Purchasers and, to the extent applicable, facilitate the timely preparation and delivery of certificates (not bearing any restrictive legend) representing the Registrable Securities to be offered pursuant to a Registration Statement and enable such certificates to be in such denominations or amounts, as the case may be, as the Purchasers may reasonably request and registered in such names as the Purchasers may request. 

17.    

(j)    If requested by a Purchaser, the Company shall, as soon as practicable, (i) incorporate in a prospectus supplement or post-effective amendment such information as the Purchaser reasonably requests to be included therein relating to the sale and distribution of Registrable Securities, including, without limitation, information with respect to the number of Registrable Securities being offered or sold, the purchase price being paid therefor and any other terms of the offering of the Registrable Securities to be sold in such offering; (ii) make all required filings of such prospectus supplement or post-effective amendment after being notified of the matters to be incorporated in such prospectus supplement or post-effective amendment; and (iii) supplement or make amendments to any Registration Statement if reasonably requested by the Purchaser. 
(k)    The Company shall use commercially reasonable efforts to cause the Registrable Securities covered by a Registration Statement to be registered with or approved by such other governmental agencies or authorities as may be necessary to consummate the disposition of such Registrable Securities. 
(l)    The Company shall otherwise use commercially reasonable efforts to comply with all applicable rules and regulations of the Commission in connection with any registration hereunder. 
(m)    Within two Business Days after a Registration Statement that covers Registrable Securities is declared effective by the Commission, the Company shall deliver to the transfer agent for such Registrable Securities (with copies to the Purchasers) confirmation that such Registration Statement has been declared effective by the Commission. 
(n)    Notwithstanding anything to the contrary herein, at any time after the Effectiveness Date, the Company may delay the disclosure of material, non-public information concerning the Company the disclosure of which at the time is not, in the good faith opinion of the Board of Directors and its counsel, in the best interest of the Company and, in the opinion of counsel to the Company, otherwise required (a “Grace Period”); provided, that the Company shall promptly (i) notify the Purchasers in writing of the existence of material, non-public information giving rise to a Grace Period (provided that in each notice the Company will not disclose the content of such material, non-public information to the Purchasers) and the date on which the Grace Period will begin, and (ii) notify the Purchasers in writing of the date on which the Grace Period ends; and, provided further, that the Grace Periods shall not exceed an aggregate of 30 Trading Days during any 365-day period and the first day of any Grace Period must be at least 15 days after the last day of any prior Grace Period (each, an “Allowable Grace Period”). For purposes of determining the length of a Grace Period above, the Grace Period shall begin on and include the date the Purchasers receive the notice referred to in clause (i) and shall end on and include the later of the date the Purchasers receive the notice referred to in clause (ii) and the date referred to in such notice. The provisions of Section 10.04(d) hereof shall not be applicable during the period of any Allowable Grace Period. Upon expiration of the Grace Period, the Company shall again be bound by the first sentence of Section 10.04(c) with respect to the information giving rise thereto unless such material, non-public information is no longer applicable. Notwithstanding anything to the contrary, the Company shall cause its transfer agent to deliver unlegended shares of Common Stock to a transferee of any Purchaser in accordance with the terms of this Agreement in connection with any sale of Registrable Securities with respect to which a Purchaser has entered into a contract for sale, and delivered a copy of the prospectus included as part of the applicable Registration Statement (unless an exemption from such prospectus delivery requirement exists), prior to the Purchaser’s receipt of the notice of a Grace Period and for which the Purchaser has not yet settled. 
(o)    Neither the Company nor any Subsidiary or affiliate thereof shall identify any Purchaser as an underwriter in any public disclosure or filing with the Commission or any applicable Trading Market without the prior written consent of such Purchaser, and any Purchaser being deemed an underwriter by the Commission shall not relieve the Company of any obligations it has under this Agreement. 
10.05    Obligations of the Purchasers. 
(a)    At least five Business Days prior to the first anticipated filing date of a Registration Statement, the Company shall notify each Purchaser in writing of any information the Company requires from such Purchaser 

18.    

in order to have that Purchaser’s Registrable Securities included in such Registration Statement. It shall be a condition precedent to the obligations of the Company to complete the registration pursuant to this Agreement with respect to the Registrable Securities of a particular Purchaser that the Purchaser shall furnish to the Company such information regarding itself, the Registrable Securities held by it and the intended method of disposition of the Registrable Securities held by it as shall be reasonably required to effect the effectiveness of the registration of such Registrable Securities and shall execute such documents in connection with such registration as the Company may reasonably request. 
(b)    Each Purchaser, by its acceptance of the Registrable Securities, agrees to cooperate with the Company as reasonably requested by the Company in connection with the preparation and filing of any Registration Statement hereunder, unless the Purchaser has notified the Company in writing of the Purchaser’s election to exclude all of the Purchaser’s Registrable Securities from such Registration Statement. 
(c)    Each Purchaser agrees that, upon receipt of any notice from the Company of the happening of any event of the kind described in Section 10.04(d) or the first sentence of Section 10.04(c), the Purchaser will immediately discontinue disposition of Registrable Securities pursuant to any Registration Statement(s) covering such Registrable Securities until the Purchaser’s receipt of the copies of the supplemented or amended prospectus contemplated by Section 10.04(d) or the first sentence of Section 10.04(c) or receipt of notice that no supplement or amendment is required. Notwithstanding anything to the contrary, the Company shall cause its transfer agent to deliver unlegended shares of Common Stock to a transferee of the Purchaser in accordance with the terms of this Agreement in connection with any sale of Registrable Securities with respect to which the Purchaser has entered into a contract for sale prior to the Purchaser’s receipt of a notice from the Company of the happening of any event of the kind described in Section 10.04(d) or the first sentence of Section 10.04(c) and for which the Purchaser has not yet settled. 
(d)    Each Purchaser covenants and agrees that it will comply with the prospectus delivery requirements of the Securities Act as applicable to it or an exemption therefrom in connection with sales of Registrable Securities pursuant to the Registration Statement. 
10.06    Expenses of Registration. All reasonable expenses incurred in connection with registrations, filings or qualifications pursuant to this Section 10, including, without limitation, all registration, listing and qualifications fees, printers and accounting fees, and fees and disbursements of counsel for the Company, shall be paid by the Company. Notwithstanding the foregoing, in no event shall the Company be responsible for underwriting discounts, commissions, placement agent fees or other similar expenses payable with respect to Registrable Securities being sold or offered for sale by the Purchasers. 
10.07    Reports under the Exchange Act. With a view to making available to the Purchasers the benefits of Rule 144 promulgated under the Securities Act or any other similar rule or regulation of the Commission that may at any time permit the Purchasers to sell securities of the Company to the public without registration (“Rule 144”), the Company agrees to: 
(a)    make and keep public information available, as those terms are understood and defined in Rule 144, during the Reporting Period; 
(b)    file with the Commission in a timely manner all reports and other documents required of the Company under the Exchange Act; and 
(c)    furnish to the Purchasers, so long as any Purchaser owns Registrable Securities, promptly upon request during the Reporting Period: (i) a written statement by the Company, if true, that it has complied with the reporting requirements of Rule 144, the Securities Act and the Exchange Act, (ii) a copy of the most recent annual or quarterly report of the Company and such other reports and documents so filed by the Company, and (iii) such 

19.    

other information as may be reasonably requested to permit the Purchasers to sell such securities pursuant to Rule 144 without registration. 
10.08    Assignment of Registration Rights. The rights under Section 10 shall be automatically assignable by a Purchaser to any transferee of all or any portion of the Purchaser’s Registrable Securities if: (i) the Purchaser agrees in writing with the transferee or assignee to assign such rights and a copy of such agreement is furnished to the Company within a reasonable time after such assignment; (ii) the Company is, within a reasonable time after such transfer or assignment, furnished with written notice of (a) the name and address of such transferee or assignee and (b) the securities with respect to which such registration rights are being transferred or assigned; (iii) immediately following such transfer or assignment the further disposition of such securities by the transferee or assignee is restricted under the Securities Act or applicable state securities laws; (iv) at or before the time the Company receives the written notice contemplated by clause (ii) of this sentence the transferee or assignee agrees in writing with the Company to be bound by all of the provisions contained herein; and (v) such transfer shall have been made in accordance with the applicable requirements of this Agreement. Following any such transfer in accordance with this Section 10.08, the Company shall thereafter use commercially reasonable efforts to amend or supplement the selling stockholder table contained in the Registration Statement to reflect such change in beneficial ownership of the affected Registrable Securities. 
10.09    Indemnification. 
(a)    Company Indemnification. The Company will indemnify each Purchaser who holds Registrable Securities (if Registrable Securities held by such Purchaser are included in the securities as to which such registration is being effected), each of its officers and directors, partners, members and each person controlling such Purchaser within the meaning of Section 15 of the Securities Act, against all expenses, claims, losses, damages or liabilities (or actions in respect thereof), including any of the foregoing incurred in settlement of any litigation, commenced or threatened, arising out of or based on (A) any untrue statement (or alleged untrue statement) of a material fact contained in any Registration Statement, prospectus, offering circular or other document, or any amendment or supplement thereto, incident to any such Registration Statement, or based on any omission (or alleged omission) to state therein a material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances in which they were made, not misleading, or (B) any violation by the Company of the Securities Act, the Exchange Act, state securities laws or any rule or regulation promulgated under such laws applicable to the Company in connection with any such registration; and in each case, the Company will reimburse each such Purchaser, each of its officers and directors, partners, members and each person controlling such Purchaser, for any legal and any other expenses reasonably incurred, as such expenses are incurred, in connection with investigating, preparing or defending any such claim, loss, damage, liability or action, provided that the Company will not be liable in any such case to the extent that any such claim, loss, damage, liability or expense arises out of or is based on (X) any untrue statement or omission or alleged untrue statement or omission made in reliance upon and in conformity with written information furnished to the Company by an instrument duly executed by such Purchaser or controlling person, and stated to be specifically for use therein, (Y) the use by a Purchaser of an outdated or defective prospectus after the Company has notified such Purchaser in writing that the prospectus is outdated or defective or (Z) a Purchaser’s (or any other indemnified person’s) failure to send or give a copy of the prospectus or supplement (as then amended or supplemented), if required, pursuant to Rule 172 under the Securities Act (or any successor rule) to the Persons asserting an untrue statement or alleged untrue statement or alleged untrue statement or omission or alleged omission at or prior to the written confirmation of the sale of Registrable Securities to such person if such statement or omission was corrected in such prospectus or supplement. 
(b)    Purchaser Indemnification. Each Purchaser holding Registrable Securities will, if Registrable Securities held by such Purchaser are included in the securities as to which such registration is being effected, severally and not jointly, indemnify the Company, each of its directors and officers, other holders of the Company’s securities covered by such Registration Statement, each person who controls the Company within the meaning of Section 15 of the Securities Act, and each such holder, each of its officers and directors and each person controlling such holder within the meaning of Section 15 of the Securities Act, against all claims, losses, damages and liabilities (or actions 

20.    

in respect thereof) arising out of or based on: (A) any untrue statement (or alleged untrue statement) of a material fact contained in any such Registration Statement, prospectus, offering circular or other document, or any omission (or alleged omission) to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, to the extent, and only to the extent, that such untrue statement (or alleged untrue statement) or omission (or alleged omission) is made in such Registration Statement, prospectus, offering circular or other document in reliance upon and in conformity with written information furnished to the Company by an instrument duly executed by such Purchaser and stated to be specifically for use therein, or (B) any violation by such Purchaser of the Securities Act, the Exchange Act, state securities laws or any rule or regulation promulgated under such laws applicable to such Purchaser, and in each case, such Purchaser will reimburse the Company, each other holder, and directors, officers, persons, underwriters or control persons of the Company and the other holders for any legal or any other expenses reasonably incurred, as such expenses are incurred, in connection with investigating or defending any such claim, loss, damage, liability or action; provided, that the indemnity agreement contained in this Subsection 10.09(b) shall not apply to amounts paid in settlement of any such loss, claim, damage, liability or action if such settlement is effected without the consent of such indemnifying Purchaser (which consent shall not be unreasonably withheld or delayed). The liability of any Purchaser for indemnification under this Subsection 10.09(b) in its capacity as a seller of Registrable Securities shall not exceed the amount of net proceeds to such Purchaser of the securities sold in any such registration. 
(c)    Notice and Procedure. Each party entitled to indemnification under this Section 10.09 (each, an “Indemnified Party”) shall give written notice to the party required to provide indemnification (the “Indemnifying Party”) promptly after such Indemnified Party has actual knowledge of any claim as to which indemnity may be sought, and shall permit the Indemnifying Party to assume the defense of any such claim or any litigation resulting therefrom, provided that counsel for the Indemnifying Party who shall conduct the defense of such claim or litigation, shall be approved by the Indemnified Party (whose approval shall not unreasonably be withheld), and the Indemnified Party may participate in such defense at such party’s expense, and provided further that the failure of any Indemnified Party to give notice as provided herein shall not relieve the Indemnifying Party of its obligations under this Agreement unless the failure to give such notice is materially prejudicial to an Indemnifying Party’s ability to defend such action and provided further, that the Indemnifying Party shall not assume the defense for matters as to which there is a conflict of interest or there are separate and different defenses. No Indemnifying Party, in the defense of any such claim or litigation, shall, except with the consent of each Indemnified Party (whose consent shall not be unreasonably withheld), consent to entry of any judgment or enter into any settlement which does not include as an unconditional term thereof the giving by the claimant or plaintiff to such Indemnified Party of a release from all liability in respect to such claim or litigation. 
(d)    Contribution. If the indemnification provided for in this Section 10.09 is held by a court of competent jurisdiction to be unavailable to an Indemnified Party with respect to any losses, claims, damages or liabilities referred to herein, the Indemnifying Party, in lieu of indemnifying such Indemnified Party thereunder, shall to the extent permitted by applicable law contribute to the amount paid or payable by such Indemnified Party as a result of such loss, claim, damage or liability in such proportion as is appropriate to reflect the relative fault of the Indemnifying Party on the one hand and of the Indemnified Party on the other in connection with the untrue statement or omission that resulted in such loss, claim, damage or liability, as well as any other relevant equitable considerations. The relative fault of the Indemnifying Party and of the Indemnified Party shall be determined by a court of law by reference to, among other things, whether the untrue or alleged untrue statement of a material fact or the omission to state a material fact relates to information supplied by the Indemnifying Party or by the Indemnified Party and the parties’ relative intent, knowledge, access to information and opportunity to correct or prevent such statement or omission; provided, that in no event shall any contribution by a Purchaser hereunder exceed the proceeds from the offering received by such Purchaser. The amount paid or payable by a party as a result of any loss, claim, damage or liability shall be deemed to include, subject to the limitations set forth in this Agreement, any reasonable attorneys’ or other reasonable fees or expenses incurred by such party in connection with any proceeding to the extent such party would have been indemnified for such fees or expenses if the indemnification provided for in this Section 10.9 was available to such party in accordance with its terms. 

21.    

(e)    Survival. The obligations of the Company and the Purchasers under this Section 10.09 shall survive completion of any offering of Registrable Securities in a Registration Statement and the termination of this Agreement. The indemnity and contribution agreements contained in this Section 10.09 are in addition to any liability that the Indemnifying Parties may have to the Indemnified Parties and are not in diminution or limitation of other remedies or causes of action that the parties may have under this Agreement. 
Section 11.    Definitions. Unless the context otherwise requires, the terms defined in this Section 11 shall have the meanings specified for all purposes of this Agreement. All accounting terms used in this Agreement, whether or not defined in this Section 11, shall be construed in accordance with GAAP. If the Company has one or more Subsidiaries, such accounting terms shall be determined on a consolidated basis for the Company and each of its Subsidiaries, and the financial statements and other financial information to be furnished by the Company pursuant to this Agreement shall be consolidated and presented with consolidating financial statements of the Company and each of its Subsidiaries. 
“Affiliate” shall have the meaning ascribed to such term in Rule 12b-2 of the General Rules and Regulations under the Exchange Act. 
“Business Day” means any day other than Saturday, Sunday or other day on which commercial banks in The City of New York are authorized or required by law to remain closed. 
“Effectiveness Date” means the date the Registration Statement pursuant to Section 11 has been declared effective by the Commission. 
“Exchange Act” means the Securities Exchange Act of 1934, as amended. 
“GAAP” means U.S. generally accepted accounting principles consistently applied. 
“Governmental Entity” means any national, federal, state, municipal, local, territorial, foreign or other government or any department, commission, board, bureau, agency, regulatory authority, self-regulatory organization or instrumentality thereof, or any court, judicial, administrative or arbitral body or public or private tribunal. 
“knowledge” by a Person of a particular fact or other matter means the following: (a) if the Person is an individual, that such individual is actually aware or reasonably should be aware, after due inquiry, by virtue of such person’s office, of such fact or other matter; and (b) if the Person is an entity, that any executive officer of such Person is actually aware or reasonably should be aware, after due inquiry, of such fact or other matter. 
“Material Adverse Effect” means any (i) adverse effect on the reservation, issuance, delivery or validity of the Shares, as applicable, or the transactions contemplated hereby or on the ability of the Company to perform its obligations under this Agreement, or (ii) material adverse effect on the condition (financial or otherwise), prospects, properties, assets, liabilities, business or operations of the Company or any of its Subsidiaries. 
“Material Contract” means all written and oral contracts, agreements, deeds, mortgages, leases, subleases, licenses, instruments, notes, commitments, commissions, undertakings, arrangements and understandings: (i) which by their terms involve, or would reasonably be expected to involve, aggregate payments by or to the Company or any Subsidiary during any twelve month period in excess of $1,000,000, (ii) the breach of which by the Company or any Subsidiary would reasonably be expected to have a Material Adverse Effect, or (iii) which are required to be filed as exhibits by the Company with the Commission since January 1, 2017 pursuant to Items 601(b)(1), 601(b)(2), 601(b)(4), 601(b)(9) or 601(b)(10) of Regulation S-K promulgated by the Commission. 
“Person” means and includes all natural persons, corporations, business trusts, associations, companies, partnerships, joint ventures, limited liability companies and other entities and governments and agencies and political subdivisions. 

22.    

“Pro Rata Interest” means the number of Shares purchased by each Purchaser, relative to the total number of Shares being sold hereunder, as reflected on Schedule I attached hereto. 
“Registration Statement” means a registration statement or registration statements of the Company filed under the Securities Act pursuant to Section 10 hereof. 
“Reporting Period” means the period commencing on the Closing Date and ending on the earliest of: (i) the date as of which the Purchasers may sell all of the Shares under Rule 144 without volume or manner-of-sale restrictions and without the requirement for the Company to be in compliance with the current public information requirements under Rule 144(c)(1) (or any successor thereto) promulgated under the Securities Act; (ii) the second anniversary of the Closing Date, or (iii) the date on which such Purchaser shall have sold all of the Shares pursuant to a Registration Statement. 
“Required Holders” means: (i) prior to the Closing, the Purchasers agreeing to invest at least 66% of the amount invested by all the Purchasers pursuant to this Agreement and (ii) from and after the Closing, the Purchasers beneficially owning (as determined pursuant to Rule 13d-3 under the Exchange Act) at least 66% of the Shares. 
“Subsidiary” means any corporation, association trust, limited liability company, partnership, joint venture or other business association or entity, at least 50% of the outstanding voting securities of which are at the time owned or controlled directly or indirectly by the Company. 
“Trading Day” means any day on which the Common Stock is traded on the Trading Market; provided that “Trading Day” shall not include any day on which the Common Stock is scheduled to trade on such exchange or market for less than 4.5 hours or any day that the Common Stock is suspended from trading during the final hour of trading on such exchange or market (or if such exchange or market does not designate in advance the closing time of trading on such exchange or market, then during the hour ending at 4:00:00 p.m., New York time). 
“Trading Market” means the following markets or exchanges on which the Common Stock is listed or quoted for trading on the date in question: NYSE Amex Equities, the Nasdaq Capital Market, the Nasdaq Global Market, the Nasdaq Global Select Market, the New York Stock Exchange or the OTC Markets Group Inc. 
“Transaction Documents” means this Agreement and all exhibits and schedules thereto and hereto and any other documents or agreements executed in connection with the transactions contemplated hereunder. 
Section 12.    Miscellaneous. 
12.01    Waivers and Amendments. Upon the approval of the Company and the written consent of the Required Holders, the obligations of the Company and the rights of the Purchasers under this Agreement may be waived (either generally or in a particular instance, either retroactively or prospectively and either for a specified period of time or indefinitely). Neither this Agreement, nor any provision hereof, may be changed, waived, discharged or terminated orally or by course of dealing, but only by an instrument in writing executed by the Company and the Required Holders. 
12.02    Notices. All notices, requests, consents, and other communications under this Agreement shall be in writing and shall be deemed delivered: (a) when delivered, if delivered personally, (b) four Business Days after being sent by registered or certified mail, return receipt requested, postage prepaid, (c) one Business Day after being sent via a reputable nationwide overnight courier service guaranteeing next Business Day delivery, or (d) when receipt is acknowledged, in the case of email, in each case to the intended recipient as set forth below, with respect to the Company, and to the addresses set forth on the signature pages hereto, with respect to the Purchasers. 
If to the Company: 
Cidara Therapeutics, Inc. 

23.    

6310 Nancy Ridge Dr., Suite 101 
San Diego, California 92121
Attn: Matt Onaitis 
Email: monaitis@cidara.com
with copies to: 
Cooley LLP 
4401 Eastgate Mall 
San Diego, California 92121 
Attn: Charles J. Bair
Email: cbair@cooley.com 
or at such other address as the Company or each Purchaser may specify by written notice to the other parties hereto in accordance with this Section 12.02. 
12.03    Cumulative Remedies. None of the rights, powers or remedies conferred upon the Purchasers on the one hand or the Company on the other hand shall be mutually exclusive, and each such right, power or remedy shall be cumulative and in addition to every other right, power or remedy, whether conferred by this Agreement or now or hereafter available at law, in equity, by statute or otherwise. 
12.04    Successors and Assigns. All the terms and provisions of this Agreement shall be binding upon and inure to the benefit of and be enforceable by the respective parties hereto, the successors and permitted assigns of each Purchaser and the successors of the Company, whether so expressed or not. None of the parties hereto may assign its rights or obligations hereof without the prior written consent of the Company, except that a Purchaser may, without the prior consent of the Company, assign its rights to purchase the Shares hereunder to any of its Affiliates (provided each such Affiliate agrees to be bound by the terms of this Agreement and makes the same representations and warranties set forth in Section 4 hereof). This Agreement shall not inure to the benefit of or be enforceable by any other Person. 
12.05    Headings. The headings of the Sections and paragraphs of this Agreement have been inserted for convenience of reference only and do not constitute a part of this Agreement. 
12.06    Governing Law; Jurisdiction. This Agreement shall be governed by and construed in accordance with the laws of the State of New York without regard to its conflict of law principles. Any suit, action or proceeding seeking to enforce any provision of, or based on any matter arising out of or in connection with, this Agreement or the transactions contemplated hereby may be brought in any federal or state court located in the City of New York and State of New York, and each of the parties hereby consents to the jurisdiction of such courts (and of the appropriate appellate courts therefrom) in any such suit, action or proceeding and irrevocably waives, to the fullest extent permitted by law, any objection which it may now or hereafter have to the laying of the venue of any such suit, action or proceeding in any such court or that any such suit, action or proceeding which is brought in any such court has been brought in an inconvenient forum. Process in any such suit, action or proceeding may be served on any party anywhere in the world, whether within or without the jurisdiction of any such court. 
12.07    Counterparts; Effectiveness. This Agreement may be executed in any number of counterparts and by different parties hereto in separate counterparts, with the same effect as if all parties had signed the same document. All such counterparts (including counterparts delivered by facsimile or other electronic format) shall be deemed an original, shall be construed together and shall constitute one and the same instrument. This Agreement shall become effective when each party hereto shall have received counterparts hereof signed by all of the other parties hereto. 
12.08    Waiver of Potential Conflicts of Interest. Each of the Purchasers acknowledges that Cooley LLP (“Cooley”), outside general counsel to the Company, has in the past performed and is or may now or in the future 

24.    

represent one or more Purchasers or their affiliates in matters unrelated to the transactions contemplated by this Agreement (the “Financing”), including representation of such Purchasers or their affiliates in matters of a similar nature to the Financing.  The applicable rules of professional conduct require that Cooley inform the parties hereunder of this representation and obtain their consent.  Cooley has served as outside general counsel to the Company and has negotiated the terms of the Financing solely on behalf of the Company.  The Company and each Purchaser hereby (a) acknowledge that they have had an opportunity to ask for and have obtained information relevant to such representation, including disclosure of the reasonably foreseeable adverse consequences of such representation; (b) acknowledge that with respect to the Financing, Cooley has represented solely the Company, and not any Purchaser or any stockholder, director or employee of the Company or any Purchaser; and (c) gives its informed consent to Cooley’s representation of the Company in the Financing. 
12.09    California Corporate Securities Law.  THE SALE OF THE SHARES HAS NOT BEEN QUALIFIED WITH THE COMMISSIONER OF CORPORATIONS OF THE STATE OF CALIFORNIA AND THE ISSUANCE OF SUCH SECURITIES OR THE PAYMENT OR RECEIPT OF ANY PART OF THE CONSIDERATION THEREFOR PRIOR TO SUCH QUALIFICATION OR IN THE ABSENCE OF AN EXEMPTION FROM SUCH QUALIFICATION IS UNLAWFUL.  PRIOR TO ACCEPTANCE OF SUCH CONSIDERATION BY THE COMPANY, THE RIGHTS OF ALL PARTIES TO THIS AGREEMENT ARE EXPRESSLY CONDITIONED UPON SUCH QUALIFICATION BEING OBTAINED OR AN EXEMPTION FROM SUCH QUALIFICATION BEING AVAILABLE.
12.10    Entire Agreement. This Agreement contains the entire agreement among the parties hereto with respect to the subject matter hereof and thereof and, except as set forth below, this agreement supersedes and replaces all other prior agreements, written or oral, among the parties hereto with respect to the subject matter hereof and thereof. Notwithstanding the foregoing, this Agreement shall not supersede any confidentiality or other non-disclosure agreements that may be in place between the Company and any Purchaser. 
12.11    Severability. If any provision of this Agreement shall be found by any court of competent jurisdiction to be invalid or unenforceable, the parties hereby waive such provision to the extent that it is found to be invalid or unenforceable. Such provision shall, to the maximum extent allowable by law, be modified by such court so that it becomes enforceable, and, as modified, shall be enforced as any other provision hereof, all the other provisions hereof continuing in full force and effect. 
* * * 
 

25.    

IN WITNESS WHEREOF, the parties hereto have caused this Securities Purchase Agreement to be duly executed as of the Effective Date. 
 
	
			
	 
	 
	 

	THE COMPANY:

	 

	CIDARA THERAPEUTICS, INC.

	 
	 

	By:
	 
	 /s/ Jeffrey Stein, Ph.D.

	Name:  Jeffrey Stein, Ph.D.

	Title:  President and Chief Executive Officer

 

IN WITNESS WHEREOF, the parties hereto have caused this Securities Purchase Agreement to be duly executed as of the Effective Date. 
 
	
			
	 
	 
	 

	PURCHASERS:

	 

	 Biotech Target N.V.

	 
	 

	By:
	 
	 /s/ Michael Hutter

	 
	 

	Name:
	 
	 Michael Hutter

	 
	 

	Title:
	 
	 CFO BB Biotech AG

	 
	 

	 
	 

 

        

IN WITNESS WHEREOF, the parties hereto have caused this Securities Purchase Agreement to be duly executed as of the Effective Date. 
 
	
			
	 
	 
	 

	PURCHASERS:

	 

	 Broadfin Healthcare Master Fund, Ltd.

	 
	 

	By:
	 
	 /s/ Kevin Kotler

	 
	 

	Name:
	 
	 Kevin Kotler

	 
	 

	Title:
	 
	 Director

	 
	 

	 
	 

 

        

IN WITNESS WHEREOF, the parties hereto have caused this Securities Purchase Agreement to be duly executed as of the Effective Date. 
 
	
			
	 
	 
	 

	PURCHASERS:

	 

	 DAFNA LifeScience LP
DAFNA LifeScience Select LP

	 
	 

	By:
	 
	/s/ Nathan Fischel

	 
	 

	Name:
	 
	Nathan Fischel

	 
	 

	Title:
	 
	CEO

	 
	 

	 
	 

 

        

IN WITNESS WHEREOF, the parties hereto have caused this Securities Purchase Agreement to be duly executed as of the Effective Date. 
 
	
			
	 
	 
	 

	PURCHASERS:

	 

	 Biomedical Value Fund, L.P.

	 
	 

	By:
	 
	/s/ David Kroin

	 
	 

	Name:
	 
	David Kroin

	 
	 

	Title:
	 
	Managing Director of Great Point
Partners, LLC (the Inv Manager)

	 
	 

	 
	 

 

        

IN WITNESS WHEREOF, the parties hereto have caused this Securities Purchase Agreement to be duly executed as of the Effective Date. 
 
	
			
	 
	 
	 

	PURCHASERS:

	 

	 Biomedical Offshore Value Fund, Ltd.

	 
	 

	By:
	 
	/s/ David Kroin

	 
	 

	Name:
	 
	David Kroin

	 
	 

	Title:
	 
	Managing Director of Great Point
Partners, LLC (the Inv Manager)

	 
	 

	 
	 

 

        

IN WITNESS WHEREOF, the parties hereto have caused this Securities Purchase Agreement to be duly executed as of the Effective Date. 
 
	
			
	 
	 
	 

	PURCHASERS:

	 

	 GEF-SMA, L.P.

	 
	 

	By:
	 
	/s/ David Kroin

	 
	 

	Name:
	 
	David Kroin

	 
	 

	Title:
	 
	Managing Director of Great Point
Partners, LLC (the Inv Manager)

	 
	 

	 
	 

 

        

IN WITNESS WHEREOF, the parties hereto have caused this Securities Purchase Agreement to be duly executed as of the Effective Date. 
 
	
			
	 
	 
	 

	PURCHASERS:

	 

	 Class D Series of GEF-PS, L.P.

	 
	 

	By:
	 
	/s/ David Kroin

	 
	 

	Name:
	 
	David Kroin

	 
	 

	Title:
	 
	Managing Director of Great Point
Partners, LLC (the Inv Manager)

	 
	 

	 
	 

 

        

IN WITNESS WHEREOF, the parties hereto have caused this Securities Purchase Agreement to be duly executed as of the Effective Date. 
 
	
			
	 
	 
	 

	PURCHASERS:

	 

	 Lawrence Lytton

	 
	 

	By:
	 
	 /s/ Lawrence Lytton

	 
	 

	Name:
	 
	 Lawrence Lytton

	 
	 

	Title:
	 
	 

	 
	 

	 
	 

 

        

IN WITNESS WHEREOF, the parties hereto have caused this Securities Purchase Agreement to be duly executed as of the Effective Date. 
 
	
			
	 
	 
	 

	PURCHASERS:

	 

	On Behalf of: Prosight Fund, LP
Prosight Plus Fund, LP
Undiscovered Value Master Fund SPC - April, 2014 Segregated

Prosight Capital/Prosight Fund/Prosight Plus Fund/Undiscovered Value Fund

	 
	 

	By:
	 
	/s/ Lawrence Hawkins

	 
	 

	Name:
	 
	Lawrence Hawkins

	 
	 

	Title:
	 
	Managing Member

	 
	 

	 
	 

 

        

IN WITNESS WHEREOF, the parties hereto have caused this Securities Purchase Agreement to be duly executed as of the Effective Date. 
 
	
			
	 
	 
	 

	PURCHASERS:

	 

	 Pura Vida Investments, LLC

	 
	 

	By:
	 
	/s/ David DeMartino

	 
	 

	Name:
	 
	David DeMartino

	 
	 

	Title:
	 
	Analyst

	 
	 

	 
	 

 

        

IN WITNESS WHEREOF, the parties hereto have caused this Securities Purchase Agreement to be duly executed as of the Effective Date. 
 
	
			
	 
	 
	 

	PURCHASERS:

	 

	 Sphera Global Healthcare Master Fund

	 
	 

	By:
	 
	 /s/ Doran Breen

	 
	 

	Name:
	 
	 Doran Breen

	 
	 

	Title:
	 
	 Director

	 
	 

	 
	 

 

        

IN WITNESS WHEREOF, the parties hereto have caused this Securities Purchase Agreement to be duly executed as of the Effective Date. 
 
	
			
	 
	 
	 

	PURCHASERS:

	 

	Hfr He Sphera Global Healthcare Master Trust

	 
	 

	By:
	 
	 /s/ Doran Breen

	 
	 

	Name:
	 
	 Doran Breen

	 
	 

	Title:
	 
	 Director, Trading Advisor

	 
	 

	 
	 

        

IN WITNESS WHEREOF, the parties hereto have caused this Securities Purchase Agreement to be duly executed as of the Effective Date. 
 
	
			
	 
	 
	 

	PURCHASERS:

	 

	CVI Investments, Inc.

	 
	 

	By:
	 
	/s/ Martin Kobinger

	 
	 

	Name:
	 
	Martin Kobinger

	 
	 

	Title:
	 
	Investment Manager

	 
	 

	 
	 

        

SCHEDULE I
	
					
	SCHEDULE OF PURCHASERS

	Name and Address
	Shares
	Aggregate 
Purchase Price

	Biotech Target N.V.
	900,000
	

	$5,400,000.00
	

	Biomedical Value Fund, L.P.
	211,762
	

	$1,270,572.00
	

	Biomedical Offshore Value Fund Ltd.
	302,835
	

	$1,817,010.00
	

	GEF-SMA, L.P.
	225,830
	

	$1,354,980.00
	

	Class D Series of GEF-PS, L.P.
	59,573
	

	$357,438.00
	

	Prosight Fund, LP
	316,081
	

	$1,896,486.00
	

	Prosight Plus Fund, LP
	287,962
	

	$1,727,772.00
	

	UNDISCOVERED VALUE MASTER FUND SPC – APRIL, 2014 SEGREGATED
	45,957
	

	$275,742.00
	

	Pura Vida Investments, LLC
	275,000
	

	$1,650,000.00
	

	SPHERA GLOBAL HEALTHCARE MASTER FUND
	203,238
	

	$1,219,428.00
	

	HFR HE SPHERA GLOBAL HEALTHCARE MASTER TRUST
	6,762
	

	$40,572.00
	

	LAWRENCE LYTTON
	200,000
	

	$1,200,000.00
	

	BROADFIN HEALTHCARE MASTER FUND, LTD.
	150,000
	

	$900,000.00
	

	DAFNA LIFESCIENCE LP
	59,000
	

	$354,000.00
	

	DAFNA LIFESCIENCE SELECT LP
	41,000
	

	$246,000.00
	

	CVI INVESTMENTS, INC.
	75,000
	

	$450,000.00
	

	Total:
	3,360,000
	

	$20,160,000.00
	

        

EXHIBIT A
PLAN OF DISTRIBUTION
We are registering the shares of common stock issued to the selling stockholders to permit the resale of such shares of common stock by such holders from time to time after the date of this prospectus. We will not receive any of the proceeds from the sale by the selling stockholders of the shares of common stock. We will bear all fees and expenses incident to our obligation to register such shares of common stock.
Each selling stockholder, which may include donees, pledgees, transferees or other successors-in-interest selling shares of common stock or interests in shares of common stock received after the date of this prospectus from a selling stockholder as a gift, pledge, partnership distribution or other transfer, may, from time to time, sell, transfer or otherwise dispose of any or all of its shares of common stock or interests in shares of common stock on any stock exchange, market or trading facility on which the shares are traded or in private transactions. These dispositions may be at fixed prices, at prevailing market prices at the time of sale, at prices related to the prevailing market price, at varying prices determined at the time of sale, or at privately negotiated prices. 
A selling stockholder may use any one or more of the following methods when disposing of shares or interests therein: 

		
	•
	ordinary brokerage transactions and transactions in which the broker-dealer solicits purchasers; 

		
	•
	block trades in which the broker-dealer will attempt to sell the shares as agent, but may position and resell a portion of the block as principal to facilitate the transaction; 

		
	•
	purchases by a broker-dealer as principal and resale by the broker-dealer for its own account; 

		
	•
	an exchange distribution in accordance with the rules of the applicable exchange; 

		
	•
	privately negotiated transactions; 

		
	•
	to the extent permitted by law, short sales effected after the date the registration statement of which this prospectus is a part is declared effective by the SEC; 

		
	•
	through the writing or settlement of options or other hedging transactions, whether through an options exchange or otherwise; 

		
	•
	through agreements between broker-dealers and the selling stockholders to sell a specified number of such shares at a stipulated price per share; 

		
	•
	a combination of any such methods of sale; and 

		
	•
	any other method permitted by applicable law.

The selling stockholders may, from time to time, pledge or grant a security interest in some or all of the shares of common stock owned by them and, if they default in the performance of their secured obligations, the pledgees or secured parties may offer and sell the shares of common stock, from time to time, under this prospectus, or under an amendment to this prospectus under Rule 424(b) or other applicable provision of the Securities Act amending the list of selling stockholders to include the pledgee, transferee or other successors in interest as selling stockholders under this prospectus. The selling stockholders also may transfer the shares of common stock in other circumstances, in which case the pledgees, transferees or other successors in interest will be the selling beneficial owners for purposes of this prospectus. 
 
In connection with the sale of our common stock or interests therein, the selling stockholders may enter into hedging transactions with broker-dealers or other financial institutions, which may in turn engage in short sales of the common stock in the course of hedging the positions they assume. The selling stockholders may also sell shares of our common stock short and deliver these securities to close out their short positions, or loan or pledge the common stock to broker-dealers that in turn may sell these securities. The selling stockholders may also enter into options or other transactions with broker-dealers or other financial institutions or the creation of one or more derivative securities which require the delivery to each such broker-dealer or other financial institution of shares offered by this prospectus, which shares such broker-dealer or other financial institution may resell pursuant to this prospectus (as supplemented or amended to reflect such transaction). 

        

The aggregate proceeds to the selling stockholders from the sale of the common stock offered by them will be the purchase price of the common stock less discounts or commissions, if any. Each of the selling stockholders reserves the right to accept and, together with its agents from time to time, to reject, in whole or in part, any proposed purchase of common stock to be made directly or through agents. We will not receive any of the proceeds from this offering. 
The selling stockholders also may resell all or a portion of the shares in open market transactions, rather than under this prospectus, in reliance upon Rule 144 under the Securities Act of 1933, provided that they meet the criteria and conform to the requirements of that rule. 
The selling stockholders and any underwriters, broker-dealers or agents that participate in the sale of the common stock or interests therein may be “underwriters” within the meaning of Section 2(11) of the Securities Act. Any discounts, commissions, concessions or profit they earn on any resale of the shares may be underwriting discounts and commissions under the Securities Act. Selling stockholders who are “underwriters” within the meaning of Section 2(11) of the Securities Act will be subject to the prospectus delivery requirements of the Securities Act. 
To the extent required, the shares of our common stock to be sold, the names of the selling stockholders, the respective purchase prices and public offering prices, the names of any agents, dealer or underwriter, and any applicable commissions or discounts with respect to a particular offer will be set forth in an accompanying prospectus supplement or, if appropriate, a post-effective amendment to the registration statement that includes this prospectus. 
If underwriters are used in the sale, the shares of common stock will be acquired by the underwriters for their own account and may be resold from time to time in one or more transactions, including negotiated transactions, at a fixed public offering price or at varying prices determined at the time of sale. In connection with any such underwritten sale of shares of common stock, underwriters may receive compensation from the selling stockholders, for whom they may act as agents, in the form of discounts, concessions or commissions. If the selling stockholders use an underwriter or underwriters to effectuate the sale of shares of common stock, we and/or they will execute an underwriting agreement with those underwriters at the time of sale of those shares of common stock. To the extent required by law, the names of the underwriters will be set forth in a prospectus supplement or, if appropriate, a post-effective amendment to the registration statement that includes the prospectus supplement and the accompanying prospectus used by the underwriters to sell those securities. The obligations of the underwriters to purchase those shares of common stock will be subject to certain conditions precedent, and unless otherwise specified in a prospectus supplement, the underwriters will be obligated to purchase all the shares of common stock offered by such prospectus supplement if any of such shares of common stock are purchased. Any public offering price and any discounts or concessions allowed or re-allowed or paid to dealers may be changed from time to time.
We have advised the selling stockholders that the anti-manipulation rules of Regulation M under the Exchange Act may apply to sales of shares in the market and to the activities of the selling stockholders and their affiliates. The selling stockholders may indemnify any broker-dealer that participates in transactions involving the sale of the shares against certain liabilities, including liabilities arising under the Securities Act. 
We are required to pay certain fees and expenses incurred by us incident to the registration of the shares of common stock of the selling stockholders. We have agreed to indemnify the selling stockholders against certain losses, claims, damages and liabilities, including liabilities under the Securities Act, and the selling stockholders may be entitled to contribution. We may be indemnified by the selling stockholders against certain losses, claims, damages and liabilities, including liabilities under the Securities Act that may arise from any written information furnished to us by the selling stockholders specifically for use in this prospectus, or we may be entitled to contribution.
We have agreed with the selling stockholders to keep the registration statement of which this prospectus constitutes a part effective until the earlier of (1) such time as all of the shares covered by this prospectus have been disposed of pursuant to and in accordance with the registration statement or (2) the date on which all of the shares may be sold without restriction pursuant to Rule 144 of the Securities Act. 

        

Once sold under the registration statement of which this prospectus forms a part, the shares of common stock will be freely tradable in the hands of persons other than our affiliates.
* * *Exhibit 10.1 

 

 

 

ASSET PURCHASE AGREEMENT

 

by and between

 

The
Original Sprout, LLC,

 

Each
of the Individual Members of Original Sprout, LLC,

 

and

 

Kahnalytics,
Inc., 

 

Dated:
OCTOBER 18, 2017 

  

 

 

    	 	 	 

     

    

 

TABLE OF
CONTENTS

 

	 	Page
	 	 
	Article I. DEFINITIONS	1
	 	 
	Article II. PURCHASE AND SALE	6
	 	 
	Article III. CLOSING	13
	 	 
	Article IV. REPRESENTATIONS AND WARRANTIES OF SELLER	14
	 	 
	Article V. REPRESENTATIONS AND WARRANTIES OF BUYER	21
	 	 
	Article VI. COVENANTS	23
	 	 
	Article VII. CONDITIONS TO CLOSING	26
	 	 
	Article VIII. INDEMNIFICATION	29
	 	 
	Article IX. TERMINATION	33
	 	 
	Article X. MISCELLANEOUS	34

 

    	 	-i-	 

     

    

 

ASSET PURCHASE AGREEMENT

 

This Asset Purchase
Agreement (this "Agreement") is entered into on October 18, 2017 (the "Effective Date"), by and
between The Original Sprout, LLC, a California limited liability company ("Seller" or "Company"),
Inga Tritt and William Pritchett, each an individual member of the Company (individually hereinafter referred to as "Owner"
or collectively as “Owners”), and Kahnalytics, Inc., a California corporation, ("Buyer"), and
wholly-owned subsidiary of Concierge Technologies, Inc. (“Concierge”), a Nevada corporation. Seller and Buyer
may collectively be referred to herein as the "Parties" or individually as "Party".

 

RECITALS

 

WHEREAS, this Agreement
contemplates, among other things, a transaction in which, subject to the terms and conditions of this Agreement, Buyer will purchase
the Company's Purchased Assets as described in Section 2.01, free and clear of all liens, encumbrances, or claims, except for Permitted
Encumbrances, in return for the consideration set forth in this Agreement (the “Transaction”);

 

WHEREAS, the Company
specializes in the manufacture and sale of organic, non-toxic, all natural hair care, bath, skin and styling products;

 

WHEREAS, the Company's
Owners deem it advisable and in the best interests of the Company that the Parties consummate the Transaction, upon the terms and
subject to the conditions provided for herein;

 

NOW, THEREFORE, in
consideration of the premises and the mutual promises herein made, and in consideration of the representations, warranties, and
covenants herein contained, and intending to be legally bound, the Parties agree as follows.

 

Article
I.

DEFINITIONS

 

The following terms
have the meanings specified or referred to in this Article I:

 

"Accounts Receivable"
has the meaning set forth in Section 2.01(a).

 

"Affiliate"
of a Person means any other Person that directly or indirectly, through one or more intermediaries, controls, is controlled by,
or is under common control with, such Person. The term "control" (including the terms "controlled by" and "under
common control with") means the possession, directly or indirectly, of the power to direct or cause the direction of the management
and policies of a Person, whether through the ownership of voting securities, by contract or otherwise.

 

"Agreement"
means this Asset Purchase Agreement

 

"Assigned Contracts"
has the meaning set forth in Section 2.01(c).

 

"Assumed Liabilities"
has the meaning set forth in Section 2.03.

 

    	 	 	 

     

    

 

“Back Order” shall mean
a validly existing sales order designated for immediate delivery which is unable to be fulfilled at or prior to the Closing Date.
The value of a Back Order will be calculated by subtracting the cost of goods sold from the selling price and adding the result
to accounts receivable.

 

"Benefit Plan"
has the meaning set forth in Section 4.17(a).

 

"Bill of Sale"
has the meaning set forth in Section 3.02(a)(i).

 

"Books and Records"
has the meaning set forth in Section 2.01(i).

 

"Business"
means the manufacture and sale of organic, non-toxic, all natural hair care, bath, skin and styling products as conducted and engaged
in by the Company as of the Effective Date.

 

"Business Day"
means any day except Saturday, Sunday or any other day on which commercial banks located in the State of California are authorized
or required by Law to be closed for business.

 

"Buyer"
means Kahnalytics, Inc., a California corporation.

 

"Buyer Closing
Certificate" has the meaning set forth in Section 7.03(d).

 

"Closing"
has the meaning set forth in Section 3.01.

 

"Closing Date"
has the meaning set forth in Section 3.01.

 

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

 

“Concierge”
means Concierge Technologies, Inc., a Nevada corporation.

 

"Confidentiality
Agreement" means the Mutual Non-Disclosure Agreement, dated as of May 1, 2017, by and between Concierge and Seller.

 

"Contracts"
means all legally binding written contracts, including, but not limited to, distributor agreements, manufacturing, and packaging
agreements, leases, mortgages, licenses, instruments, notes, commitments, undertakings, indentures and other agreements.

 

"Delinquent A/R"
means the Delinquent Accounts Receivable listed on Section 2.01(a)(i) of the Disclosure Schedules.

 

"Direct Claim"
has the meaning set forth in Section 8.05(c).

 

"Disclosure Schedules"
means the Disclosure Schedules delivered by Seller and Buyer concurrently with the execution and delivery of this Agreement.

 

"Dollars or $"
means the lawful currency of the United States.

 

"Effective Date"
means October 18, 2017.

 

    	 	2	 

     

    

 

"Employees"
means those Persons employed by Seller who worked for the Company immediately prior to the Closing.

 

"Encumbrance"
means any lien, pledge, mortgage, deed of trust, security interest, charge, claim, easement, encroachment or other similar encumbrance.

 

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

 

“Escrow Funds”
has the meaning set forth in Section 2.06(a)(i).

 

"Excluded Assets"
has the meaning set forth in Section 2.02.

 

"FDA"
means the United States Food and Drug Administration.

 

"Financial Statements"
has the meaning set forth in Section 4.05.

 

"Governmental
Authority" means any federal, state, local or foreign government or political subdivision thereof, or any agency or instrumentality
of such government or political subdivision, or any self-regulated organization or other non-governmental regulatory authority
or quasi-governmental authority (to the extent that the rules, regulations or orders of such organization or authority have the
force of Law), or any arbitrator, court or tribunal of competent jurisdiction, including, but not limited to, the FDA.

 

"Governmental
Order" means any order, writ, judgment, injunction, decree, stipulation, determination or award entered by or with any
Governmental Authority.

 

"Indemnified
Party" has the meaning set forth in Section 8.04.

 

"Indemnifying
Party" has the meaning set forth in Section 8.04.

 

"Intellectual
Property" means any and all of the following in any jurisdiction throughout the world: (i) trademarks, service marks,
trade dress, trade names, brands, slogans, logos, Internet domain names, and corporate names, all translations, adaptations, derivations,
and combinations of the foregoing, and all applications, registrations, and renewals in connection therewith, together with all
of the goodwill associated with the foregoing, (ii) copyrights and works of authorship (whether or not copyrightable), and moral
rights, and all applications, registrations, and renewals, (iii) computer software (including source code and object code, data,
databases and documentation thereof), (iv) trade secrets and other confidential or proprietary information, know-how, processes,
formulations, methods and techniques, research and development information, industry analyses, drawings, specifications, designs,
plans, proposals, industrial models, technical data, financial and accounting data, business and marketing plans and customer and
supplier lists and related information; (v) patents (including all reissues, divisionals, provisionals, continuations and continuations-in-part,
re-examinations, renewals, substitutions and extensions thereof), patent applications, and other patent rights and any other Governmental
Authority-issued indicia of invention ownership (including inventor's certificates, petty patents and patent utility models); (vi)
copies and tangible embodiments of any of the foregoing, in whatever form or medium; and (vii) all other intellectual property
and industrial property rights and assets, and all rights, interests and protections that are associated with, similar to, or required
for the exercise of, any of the foregoing.

 

    	 	3	 

     

    

 

"Intellectual
Property Agreements" means all licenses, sublicenses and other agreements by or through which other Persons grant Seller
or Seller grants any other Persons any exclusive or non-exclusive rights or interests in or to any Intellectual Property that is
used in connection with the Business.

 

"Intellectual
Property Assets" means all Intellectual Property that is owned by Seller and used in connection with the Business, including
the Intellectual Property Registrations set forth on Section 4.12(a) of the Disclosure Schedules.

 

"Intellectual
Property Registrations" means all Intellectual Property Assets that are subject to any issuance, registration, application
or other filing by, to or with any Governmental Authority or authorized private registrar in any jurisdiction, including any product
or facility registered or required to be registered with the FDA, registered trademarks, domain names, and copyrights, issued and
reissued patents and pending applications for any of the foregoing.

 

"Inventory"
has the meaning set forth in Section 2.01(b).

 

“Inventory Adjustment”
has the meaning set forth in Section 2.05(a).

 

"Knowledge of
Seller" means the actual and constructive knowledge of Inga Tritt and William Pritchett and the officers and managers
of Seller and such knowledge as a similarly situated individual would be expected to have upon reasonable inquiry.

 

"Law"
means any statute, law, ordinance, regulation, rule, code, order, constitution, treaty, common law, judgment, decree, other requirement
or rule of law of any Governmental Authority.

 

"Leases"
has the meaning set forth in Section 4.11(a).

 

"Losses"
means actual out-of-pocket losses, damages, liabilities, costs or expenses, including reasonable attorneys' fees and fees of experts.

 

"Material Adverse
Effect" means any event, occurrence, fact, condition or change that is materially adverse to (a) the Business, business
prospects, results of operations, financial condition or assets of the Company, taken as a whole, or (b) the ability of Seller
to consummate the transactions contemplated hereby; provided, however, that "Material Adverse Effect" shall not
include any event, occurrence, fact, condition or change, directly or indirectly, arising out of or attributable to: (i) general
economic or political conditions; (ii) conditions generally affecting the industries in which the Company operates; (iii) any action
required or permitted by this Agreement or any action taken (or omitted to be taken) with the written consent of or at the written
request of Buyer; (iv) any changes in applicable Laws or accounting rules; (v) the announcement, pendency or completion of the
transactions contemplated by this Agreement, including losses or threatened losses of employees, customers, suppliers, distributors
or others having relationships with the Seller, the Company, and the Business.

 

"Material Contracts"
has the meaning set forth in Section 4.08(a).

 

    	 	4	 

     

    

 

"Mislabeled Packaging"
means any bag, container, labeling, or packaging for any product or item of Inventory of the Company that is missing required information
or includes incorrect information.

 

"Ordinary Course of Business"
means the usual and customary operation of the Company consistent with past custom and practice.

 

"Owner" and “Owners”
means Inga Tritt and William Pritchett, as sole members of Company.

 

"Payment Schedule"
has the meaning set forth in Section 2.05.

 

"Permits"
means all permits, licenses, franchises, approvals, authorizations and consents required to be obtained from Governmental Authorities
as set forth in Section 2.01(f).

 

"Permitted Encumbrances"
means (a) trade accounts payable, provided that such payables are current within the payment terms offered by the vendor and incurred
in the Ordinary Course of Business; and (b) Encumbrances as set forth in Section 4.09 (a) of the Disclosure Schedules.

 

"Person"
means an individual, corporation, partnership, joint venture, limited liability company, Governmental Authority, unincorporated
organization, trust, association or other entity.

 

"Purchase Price"
has the meaning set forth in Section 2.05.

 

"Purchase Price
Adjustment" has the meaning set forth in Section 2.05(a)(iii).

 

"Purchased Assets"
has the meaning set forth in Section 2.01.

 

“Promissory
Note” has the meaning set forth in Section 2.06(a)(ii).

 

"Representative"
means, with respect to any Person, any and all directors, officers, employees, consultants, financial advisors, counsel, accountants
and other agents of such Person.

 

"Retained Liabilities"
has the meaning set forth in Section 2.04.

 

"Seller"
means The Original Sprout, LLC

 

"Seller Closing
Certificate" has the meaning set forth in Section 7.02(d).

 

"Slow Moving
Inventory" means any items included or includable as Inventory (as defined in in Section 2.01(b) below) that have sold
less than the current on hand quantity in the immediately preceding 12 month period, except for the items listed on Section 2.01(b)(i)
of the Disclosure Schedules.

 

"Tangible Personal
Property" has the meaning set forth in Section 2.01(e).

 

"Taxes"
means all federal, state, local, foreign and other income, gross receipts, sales, use, production, ad valorem, transfer, franchise,
registration, profits, license, lease, service, service use, withholding, payroll, employment, unemployment, estimated, excise,
severance, environmental, stamp, occupation, premium, property (real or personal), real property gains, windfall profits, customs,
duties or other taxes, fees, assessments or charges of any kind whatsoever, together with any interest, additions or penalties
with respect thereto and any interest in respect of such additions or penalties.

 

    	 	5	 

     

    

 

"Tax Return"
means any return, declaration, report, claim for refund, information return or statement or other document required to be filed
with respect to Taxes, including any schedule or attachment thereto, and including any amendment thereof.

 

"Third Party
Claim" has the meaning set forth in Section 8.05(a).

 

“TNWC”
has the meaning set forth in Section 2.05(a)(i).

 

"Transaction
Documents" means this Agreement, the Bill of Sale, Non-Competition Agreement, Promissory Note, and the other agreements,
instruments and documents required to be delivered at the Closing.

 

"Transferred
Employees" has the meaning set forth in Section 6.05

 

“Working Capital
Adjustment” has the meaning set forth in Section 2.05.

 

“Work in Progress
Order” is a valid open order which: (i) has either been manufactured and packaged and is in the process of being shipped;
or (ii) is a Back Order not yet able to be fulfilled due to product shortage, and has not been invoiced on the date of Closing.

 

Article
II.

PURCHASE AND SALE

 

2.01       Purchase
and Sale of Assets. Subject to the terms and conditions set forth herein, at the Closing, Seller
shall sell, assign, transfer, convey and deliver to Buyer, and Buyer shall purchase from Seller, free and clear of all liens, encumbrances,
or claims, except for Permitted Encumbrances, all of Seller's right, title and interest in, to and under all assets, properties
and rights of Seller, other than Excluded Assets that relate to the Business (collectively, the "Purchased Assets")
including, but not limited to:

 

(a)          all
accounts and accounts receivable of the Company ("Accounts Receivable") as set forth in Section 2.01(a) of the
Disclosure Schedules, including delinquent Accounts Receivable (“Delinquent A/R”) as set forth in Section 2.01(a)(i)
of the Disclosure Schedule, provided that Section 2.01(a) of the Disclosure Schedules shall be updated immediately prior to the
Closing;

 

(b)          all
inventory, finished goods, raw materials, components, packaging, supplies, parts, racking, as set forth in Section 2.01(b) of the
Disclosure Schedules, Slow Moving Inventory as set forth in Section 2.01(b)(i) of the Disclosure Schedules, and other inventories
of the Company, excluding any Mislabeled Packaging that remains after the receipt by Buyer of properly labeled replacement packaging
("Inventory");

 

    	 	6	 

     

    

  

(c)          all
Contracts set forth on Section 2.01(c) of the Disclosure Schedules, the Leases set forth on Section 4.11(a) of the Disclosure Schedules
and the Intellectual Property Agreements set forth on Section 4.12(a) of the Disclosure Schedules (collectively, the "Assigned
Contracts");

 

(d)          all
Intellectual Property Assets;

 

(e)          all
furniture, fixtures, equipment, equipment leases, supplies and other tangible personal property of the Company listed on Section
2.01(e) of the Disclosure Schedules (the "Tangible Personal Property");

 

(f)           all
Permits, including those listed on Section 2.01(f) of the Disclosure Schedules, but only to the extent transferrable;

 

(g)          all
customer deposits, prepaid expenses, credits, advance payments, security, charges, sums and fees;

 

(h)          all
of Seller's rights under warranties, indemnities and all similar rights against third parties to the extent related to any Purchased
Assets;

 

(i)           originals,
or where not available, copies, of all books and records, including books of account, ledgers and general, financial and accounting
records, machinery and equipment maintenance files, customer lists, customer purchasing histories, price lists, discount schedules,
distribution lists, supplier lists, vendor lists, product SKU’s and descriptions, production data, quality control records
and procedures, customer complaints and inquiry files, research and development files, records and data (including all correspondence
with any Governmental Authority), sales material and records, strategic plans, internal financial statements and marketing and
promotional surveys, material and research, that relate to the Business or the Purchased Assets, other than books and records set
forth in Section 2.02(d) ("Books and Records");

 

(j)           all
goodwill associated with any of the Purchased Assets, including, but not limited to, the use of Inga Tritt’s name, image,
and likeness on all existing products and brand development or marketing materials. The Parties agree that Buyer is free to use
Tritt’s name and likeness on products that were acquired in the Closing. If Buyer develops any new products, which were not
acquired in this Agreement and which were developed after the Closing thereof, the Company shall obtain the written consent of
Tritt prior to utilizing her name, image, likeness, face, voice or other attributes, including but not limited to, the professional
reputation and image of Tritt; and,

 

(k)          all
of the Company's websites, including the Company's retail website, domain names, phone and fax numbers, and e-mail addresses listed
on Section 2.01(k) of the Disclosure Schedules (the "Intangible Personal Property").

 

2.02       Excluded
Assets. The following assets and properties shall be excluded from the Purchased Assets (the
"Excluded Assets"):

 

(a)          bank
accounts, bank deposits, cash and cash equivalents, and securities of Seller at Closing;

 

    	 	7	 

     

    

  

(b)          the
individual and personal property specifically set forth on Section 2.02(b) of the Disclosure Schedules;

 

(c)          the
corporate seals, organizational documents, minute books, stock books, Tax Returns, or other records having to do with the corporate
organization of Seller, all employee-related or employee benefit-related files or records, other than personnel files of Transferred
Service Providers, and any other books and records which Seller is prohibited from disclosing or transferring to Buyer under applicable
Law and is required by applicable Law to retain;

 

(d)          all
insurance policies of Seller and all rights to applicable claims and proceeds thereunder;

 

(e)          all
Benefit Plans and trusts or other assets attributable thereto;

 

(f)           all
Tax assets (including duty and Tax refunds and prepayments) of Seller;

 

(g)          any
Mislabeled Packaging that remains after the receipt by Buyer of properly labeled replacement packaging;

 

(h)          the
rights, if any, which accrue or will accrue to Seller under the Transaction Documents; and

 

(i)           Expected
returns or refunds of payment to the Company specifically set forth on Section 2.02(i) of the Disclosure Schedules, that will be
paid directly to Seller at Closing by such party, or if such expected returns or refunds are received by Buyer, shall be forwarded
outright to Seller within five business (5) days after such funds have been received and cleared.

 

2.03       Assumed
Liabilities. Subject to the terms and conditions set forth herein, Buyer shall assume and agree
to pay, perform and discharge when due any and all liabilities and obligations of the Company when due resulting from the operation
of the Company after the Closing Date (collectively, “Assumed Liabilities”).
Assumed Liabilities shall include, but are not limited to:

 

(a)          all
trade accounts payable of Seller for inventory to third parties incurred in the Ordinary Course of Business that exist as of the
Closing Date and remain unpaid as of the Closing Date. Seller shall pay all trade accounts payable for inventory within three days
prior to Closing, unless set forth on Section 2.03(a) of the Disclosure Schedules, which shall be updated immediately prior to
Closing, and must be expressly agreed to be assumed by Buyer;

 

(b)          all
liabilities and obligations arising under or relating to the Assigned Contracts but only to the extent that such liabilities thereunder
arise after and are required to be performed after the Closing Date, were incurred in the ordinary course of business and do not
relate to any failure to perform, improper performance, warranty or other breach, default or violation by the Seller on or prior
to the Closing Date;

 

(c)          all
liabilities and obligations for (i) Taxes relating to the Business, the Purchased Assets or the Assumed Liabilities for any taxable
period commencing after the Closing Date. For the sake of clarity, Seller shall be responsible for all Taxes relating to the Business
and the Purchased Assets prior to, and including the Closing Date, and Buyer shall be responsible for Taxes resulting from the
operation of the Business after the Closing Date;

 

    	 	8	 

     

    

  

(d)          all
liabilities and obligations of Seller set forth on Section 2.03(d) of the Disclosure Schedules, which are expressly agreed to be
assumed by Buyer;

 

2.04       Retained
Liabilities. The Parties agree that, except for the Assumed Liabilities, Seller shall retain
and satisfy when due all liabilities of any kind of Seller, the Company or transactions of the Business resulting from any occurrence
or set of circumstances or act or omission of Seller, Owners or employees existing prior to or as of the Closing Date ("Retained
Liabilities"). Retained Liabilities shall include, but are not limited to:

 

(a)          any
liabilities or obligations relating to or arising out of the Excluded Assets, and any liabilities or obligations relating to or
arising from the operation of the Company and Business including, utility bills, insurance premiums, accounts payable to vendors,
commissions and compensation payable to employees, agents, contractors, or distributors, unpaid invoices

 

(b)          any
liabilities or obligations for (i) Taxes relating to the Company or the Company’s transaction of Business, the Purchased
Assets or the Assumed Liabilities for any taxable period ending on or prior to the Closing Date and (ii) any other Taxes of Seller
or Owner for any taxable period prior to the Closing Date, including, but not limited to, payroll, income, sales and other taxes;

 

(c)          any
liabilities or obligations of Seller relating to or arising out of (i) the employment, or termination of employment, of any Employee
prior to the Closing, or (ii) workers' compensation claims of any Employee which relate to events occurring prior to the Closing
Date;

 

(d)          any
liabilities or obligations of Seller arising or incurred in connection with the negotiation, preparation, investigation and performance
of this Agreement, the other Transaction Documents and the transactions contemplated hereby and thereby, including, without limitation,
fees and expenses of counsel, accountants, consultants, business brokers, advisers and others;

 

(e)          any
liabilities and obligations for any credit card, or other interest bearing or borrowing, or other liabilities of the Company;

 

(f)           any
liabilities and obligations of Seller set forth on Section 2.04(f) of the Disclosure Schedules;

 

(g)          any
environmental claims or liabilities, to the extent arising out of or relating to facts, circumstances or conditions existing on
or prior to the Closing Date or otherwise to the extent arising out of any actions or omissions of Seller

 

(h)          any
recall, design defect, refunds or similar claims of any products manufactured or sold or any service performed by Seller; and

 

    	 	9	 

     

    

  

(i)           any
product liability or similar claim for injury to a person or property which arises out of or is based upon any express or implied
representation, warranty, agreement or guaranty made by Seller, or by reason of the improper performance or malfunctioning of a
product, improper design or manufacture, failure to adequately package, label or warn of hazards or other related product defects
of any products at any time manufactured or sold or any service performed by Seller

 

2.05       Purchase
Price. Subject to the adjustments pursuant to subsections (a)-(e) below, the maximum purchase
price payable by Buyer for the Purchased Assets shall be up to $3,619,495 (the "Purchase Price"),
to be paid pursuant to the "Payment Schedule" as set forth in Section 2.06 below.

 

a)            Adjustments
to the Purchase Price. The Purchase Price shall be subject to the following adjustments:

 

(i)          Working
Capital Adjustment. The Purchase Price includes an estimate of $762,502 in normal Transferred Net Working Capital (“TNWC”),
calculated as the aggregate amount of all current assets, excluding cash on hand, minus current liabilities, free and clear of
all Encumbrances, with the total current assets estimated to consist of the following line items:

 

		1)	accounts receivables - $224,534,

 

		2)	customer deposits - $9,400,

 

		3)	inventory- finished products - $255,634,

 

		4)	inventory- components - $271,200, and

 

		5)	fixed assets- $1,734.

 

(collectively,
items 1-5 above are the estimated “TNWC Assets”), and at the Closing the initial Purchase Price payment shall
be adjusted downward on a dollar-for-dollar basis to reflect the actual TNWC Assets to be acquired by Buyer if it differs from
the estimated TNWC Assets.

 

Sellers shall:

 

		(1)	Disclose to Buyer an estimate of the total TNWC Assets, as defined
above, immediately prior to the Closing;

 

		(2)	If the actual TNWC Assets are equal to or greater than the estimated
TNWC Assets at Closing, as provided pursuant to Section 2.05(a)(i)(1), the Sellers shall retain the necessary amount of accounts
receivable in order to convey only $762,502 of TNWC Assets to Buyer at Closing. 

 

		(3)	To the extent that the actual TNWC Assets are less than the estimated
TNWC Assets at Closing, the Initial Payment shall be adjusted downward, but shall not be adjusted upwards under any circumstances.

 

    	 	10	 

     

    

  

At least 5
Business Days prior to the Closing Date, the Sellers shall deliver to the Buyer a good faith written estimate (proforma) of the
TNWC Assets of the Company as at the Closing Date based on the financial information then available to the Sellers. The portion
of the Purchase Price payable on the Closing Date shall be adjusted downward based on the estimated TNWC Assets as at the Closing
Date. The Buyer retains the right to recalculate the actual TNWC Assets transferred to Buyer at Closing within 90 days from the
Closing Date and any further adjustments required to be made, as agreed upon by both Buyer and Seller, shall be refunded to the
Buyer in the event of a deficit (by offsetting the Second Payment), within 30 days of the determination of the actual TNWC Assets
transferred to Buyer. In the event that an adjustment is called for by Buyer and cannot be agreed upon by Buyer and Seller, the
parties shall retain a neutral third party with the necessary expertise to make the adjustment determination. If the parties do
not agree on a neutral third party or the determination made, the Parties shall seek resolution through binding mediation in Orange
County, California.

 

(ii)         Inventory
Adjustment. The Inventory used in the TNWC calculation shall only include inventory acquired within six months of the Closing
Date, unless accepted by the Company as an appropriate inclusion in inventory (the “Current Inventory”). All
inventory not included in the TNWC calculation shall be conveyed to Buyer at a price of $1 for all such inventory.

 

(iii)       Purchase
Price Adjustment. The Second Payment shall not be more than $1,250,000. The Second Payment shall be subject to a reduction
if the accounts receivable set forth in the TNWC at Closing are or become uncollectable at or prior to the 6 month anniversary
of the Closing, then the Second Payment shall be adjusted downwards in the amount of uncollectable accounts receivable which were
included in the TNWC at Closing, on condition that Buyer uses commercially reasonable efforts to collect the accounts receivable;

 

(iv)        Work
in Progress. A Work in Progress Order staged for shipping as of the Closing shall be accounted for as follows: all consideration
owed shall be added to accounts receivable and all inventory promised shall be deducted from inventory-finished products. All consideration
not received and inventory not delivered prior to the 6 month anniversary of the Closing shall lead to an adjustment in the Second
Payment as set forth in Section 2.06(c), such that the Purchase Price reflects the actual resolution of the Work in Progress Orders
as if they had been resolved as of Closing.

 

2.06       Payment
Schedule of Purchase Price. Buyer shall pay the Purchase Price to Seller pursuant to the following
Payment Schedule:

 

(a)          On
the Closing Date, Buyer shall:

 

(i)          
place an aggregate $1,250,000 into the escrow account of Horwitz + Armstrong, a Professional Law Corporation, for distribution
in accordance with Section 2.06(c) (the “Escrow Funds”),

 

    	 	11	 

     

    

  

(ii)         shall
execute a promissory note evidencing indebtedness to Seller related to the Final Payment, subject to the adjustments described
herein, which shall be unsecured and guaranteed by Concierge (the “Promissory Note”); and

 

(iii)        pay
by wire transfer an additional $1,119,495, subject to any reduction applicable in Section 2.05 (the “Initial Payment”),
to the parties set forth below pursuant to instructions provided by each party, as follows:

 

		(1)	Approximately $600,000 of the Initial Payment to Community Bank to satisfy the outstanding balance
owed pursuant to that certain Business Loan Agreement, dated June 26, 2014;

 

		(2)	Approximately $300,000 of the Initial Payment to Packaging on Demand (“POD”)
in exchange for the release and discharge of all obligations and liabilities owed under that certain Promissory Note, dated April
14, 2015; and,

 

		(3)	The balance of the Initial Payment, which is subject to downward adjustment pursuant to Section
2.05(a)), less any agreed upon amounts or liabilities paid by Seller related to the Bulk Sales compliance set forth in Section
6.10, shall be distributed to Seller.

 

(b)          On
the 1 month anniversary date of the Closing and continuing for an aggregate 12 successive months thereafter, Buyer shall pay to
Seller $7,500.00 per month (the “Monthly Installments”);

 

(c)          Within
the 10 days following the 6 month anniversary date of the Closing, Buyer shall instruct the Escrow agent to release and distribute
the Escrow Funds, which shall be subject to the Purchase Price Adjustment as set forth in Section 2.05(a), to Seller, by wire transfer
(the “Second Payment”).

 

(d)          Within
5 days after January 1, 2019, Buyer shall pay to Seller up to $1,250,000 (the “Final Payment”), which shall
be reduced by the actual amount of Monthly Installments paid to Seller pursuant to Section 2.06(b).

 

(i)          Until
the Final Payment has been fully paid according to the Payment Schedule set forth above, the Final Payment shall remain subject
to reduction to satisfy any indemnity obligation of Seller and Owner pursuant to Article VIII. In the case of any such offset,
the principal balance under Final Payment shall be reduced by the offset amount and shall be effective as of the Closing Date.

 

(e)          Payment
Instructions. The Parties agree that Seller, through a written instruction signed by both Inga Tritt and William Pritchett,
may assign payment of any part of the Purchase Price to any person or entity.

 

    	 	12	 

     

    

  

2.07       Allocation
of Purchase Price. The Parties and their respective Affiliates shall report and file all Tax
Returns (including, but not limited to Internal Revenue Service Form 8594) consistent with the allocation set forth on Section
2.07 of the Disclosure Schedules. The Parties agree that this allocation was arrived at by arm's length negotiation between them
and that no Party will take a position on any income tax return, before any Governmental Authority, that is inconsistent with such
allocation without the prior written consent of the other Parties. The Parties further agree that, to the extent required, each
of them will properly prepare and timely file Form 8594 in accordance with Section 2.07 of the Disclosure Schedules and Section
1060 of the Code.

 

Article
III.

CLOSING

 

3.01       Closing.
The closing of the purchase and sale of the Purchased Assets (the "Closing")
shall take place at the offices of Horwitz + Armstrong, a Professional Law Corporation, 14 Orchard, Suite 200, Lake Forest, CA
92630, or such other place, or by remote communication, as agreed to by the Parties, and shall commence no earlier than November
18, 2017 and no later than: (i) 10:00 am U.S. Pacific Standard Time on the 7th Business Day (or such other day as the Parties
shall agree) following the satisfaction or waiver of the conditions set forth in Article III and Article VII, or (ii) December
31, 2017, whichever is sooner. All transactions contemplated herein to occur on and as of the Closing Date shall be deemed to
have occurred simultaneously and to be effective as of the close of business the Closing Date. The date on which the Closing actually
occurs is referred to as the "Closing Date".

 

3.02       Closing
Deliverables.

 

(a)          At
the Closing, Seller shall deliver to Buyer the following:

 

(i)          a
bill of sale in the form of Exhibit A hereto (the "Bill of Sale") and duly executed by Seller, transferring
the Purchased Assets to Buyer;

 

(ii)         a
non-competition agreement duly executed by Seller and each Owner with respect to Buyer and the Business with at least a five (5)
year term from the Closing Date in the form of Exhibit B hereto (the "Non-Competition Agreement"), which
shall specifically acknowledge the importance of Owner’s name and likeness and set forth the business activities that shall
be considered a non-competing or permitted activity;

 

(iii)        Removed
and reserved.

 

(iv)        the
Seller's Closing Certificate;

 

(v)         the
certificates of the Secretary or Assistant Secretary of Seller required by Section 7.02(e) and Section 7.02(f);

 

(vi)        a
good standing certificate for Seller, issued by the California Secretary of State; and

 

    	 	13	 

     

    

  

(vii)       such
other customary instruments of transfer, assumption, filings or documents, in form and substance reasonably satisfactory to Buyer,
as may be required to give effect to this Agreement.

 

(b)          At
the Closing, Buyer shall deliver to Seller the following:

 

(i)          the
Initial Payment, pursuant to the Payment Schedule as described in Section 2.05 and 2.06;

 

(ii)         the
Promissory Note;

 

(iii)        the
Buyer's Closing Certificate; and;

 

(iv)        the
certificates of the Secretary or Assistant Secretary of Buyer required by Section 7.03(e) and Section 7.03(f)

 

Article
IV.

REPRESENTATIONS AND
WARRANTIES OF SELLER

 

Except as set forth
in the Disclosure Schedules, Seller and Owner jointly and severally represent and warrant to Buyer that, to Knowledge of Seller,
the statements contained in this Article IV are true and correct as of the date hereof.

 

4.01       Organization
and Qualification of Seller. Seller is a limited liability company duly organized, validly existing
and in good standing under the Laws of the State of California, and has all necessary corporate power and authority to own, operate
the assets now owned, operated or leased by it and to carry on the Business as currently conducted. Section 4.01 of the Disclosure
Schedules sets forth each jurisdiction in which Seller is licensed or qualified to do business, and Seller is duly licensed or
qualified to do business and is in good standing in each jurisdiction in which the ownership of the Purchased Assets or the operation
of the Business as currently conducted makes such licensing or qualification necessary.

 

4.02       Authority
of Seller. Seller has all necessary corporate power and authority to enter into this Agreement
and the other Transaction Documents to which Seller is a party, to carry out its obligations hereunder and thereunder and to consummate
the transactions contemplated hereby and thereby. The execution and delivery by Seller of this Agreement and any other Transaction
Document to which Seller is a party, the performance by Seller of its obligations hereunder and thereunder and the consummation
by Seller of the transactions contemplated hereby and thereby have been duly authorized by all requisite corporate action on the
part of Seller. This Agreement has been duly executed and delivered by Seller, and (assuming due authorization, execution and delivery
by Buyer) this Agreement constitutes a legal, valid and binding obligation of Seller, enforceable against Seller in accordance
with its terms, except as such enforceability may be limited by bankruptcy, insolvency, reorganization, moratorium or similar Laws
affecting creditors' rights generally and by general principles of equity (regardless of whether enforcement is sought in a proceeding
at law or in equity). When each other Transaction Document to which Seller is or will be a party has been duly executed and delivered
by Seller (assuming due authorization, execution and delivery by each other party thereto), such Transaction Document will constitute
a legal and binding obligation of Seller enforceable against it in accordance with its terms, except as such enforceability may
be limited by bankruptcy, insolvency, reorganization, moratorium or similar Laws affecting creditors' rights generally and by general
principles of equity (regardless of whether enforcement is sought in a proceeding at law or in equity).

 

    	 	14	 

     

    

  

4.03       Ownership
by Owner. Seller has two members: Inga Tritt and William Pritchett, with each owning fifty percent
(50%) of Seller’s membership units/interests. No other person holds any claim of any nature to any ownership or right to
acquire ownership of the capital stock of Seller.

 

4.04       No
Conflicts; Consents. The execution, delivery and performance by Seller of this Agreement and
the other Transaction Documents to which it is a party, and the consummation of the transactions contemplated hereby and thereby,
do not and will not: (a) result in a violation or breach of any provision of the articles of organization or Amended and Restated
Operating Agreement of Seller; (b) result in a violation or breach of any provision of any Law or Governmental Order applicable
to Seller, the Business or the Purchased Assets; or (c) except as set forth in Section 4.04 of the Disclosure Schedules, require
the consent, notice or other action by any Person under, conflict with, result in a violation or breach of, constitute a default
under or result in the acceleration of any Material Contract. Except as set forth in Section 4.04 of the Disclosure Schedules,
no consent, approval, Permit, Governmental Order, declaration or filing with, or notice to, any Governmental Authority is required
by or with respect to Seller in connection with the execution and delivery of this Agreement or any of the other Transaction Documents
and the consummation of the transactions contemplated hereby and thereby.

 

4.05       Financial
Statements. Financial statements of the Company consisting of the Company’s (i) balance
sheets in each of the years from 2015 to 2017, (ii) income statements in each of the years from 2015 to 2017, (iii) tax returns
of the years of from 2014 to 2016, (iv) monthly income statements for the year 2017, (v) general ledger information for the period
between January 1, 2016, through the Closing, (vi) bank and reconciliation statements for 2015, 2016, and through July 1, 2017,
(vii) current accounts receivable and accounts payable aging reports as of the Closing Date, (viii) sales tax returns for the years
2014 to 2017, (ix) sales report of Seller's Customers for the year of 2015, 2016 and for the period between January 1, 2017 through
the Closing, and (x) quarter contribution return and report of wages filed with the State of California Employment Development
Department (Form DE 9) (collectively referred to herein as the "Financial Statements").
Except as set forth on Section 4.05 of the Disclosure Schedules, the Financial Statements as delivered to Buyer fairly present
the financial condition of the Company and Business as of the respective dates they were prepared, and the results of the operations
of the Business for the periods indicated.

 

4.06       Undisclosed
Liabilities. Seller has no Liabilities with respect to the Company and the Company transacting
Business, except (a) those which are adequately reflected in the Financial Statements, and (b) those which have been incurred in
the Ordinary Course of Business and which are not, individually or in the aggregate, material in amount since January 1, 2015.
All liabilities not specifically excluded or assumed in this Agreement, which arose prior to Closing or resulted after Closing
with regards to an event or occurrence before Closing, are solely the responsibility of Seller.

 

    	 	15	 

     

    

  

4.07       Absence
of Certain Changes, Events and Conditions. Except as expressly contemplated by this Agreement,
or as set forth on Section 4.07 of the Disclosure Schedules, since January 1, 2016, through the Effective Date, Seller has operated
the Company and transacted Business in the Ordinary Course of Business in all material respects and there has not been, with respect
to the Business, any:

 

(a)          event,
occurrence or development that has had a Material Adverse Effect;

 

(b)          revocation
or other loss of any Permit or Intellectual Property Registration issued by a Governmental Authority;

 

(c)          incurrence
of any indebtedness for borrowed money in connection with the Company and transaction of the Business, except customary trade payables
and obligations incurred in the Ordinary Course of Business;

 

(d)          sale
or other disposition of any of the Purchased Assets except for the sale of Inventory in the Ordinary Course of Business;

 

(e)          cancellation
of any debts or claims or amendment, termination or waiver of any rights constituting Purchased Assets;

 

(f)           capital
expenditures which would constitute an Assumed Liability;

 

(g)          material
change in any method of accounting or accounting practice for the Company, except as disclosed in the notes to the Financial Statements

 

(h)          material
change in cash management practices and policies, practices and procedures with respect to collection of Accounts Receivable, establishment
of reserves for uncollectible Accounts Receivable, accrual of Accounts Receivable, inventory control, prepayment of expenses, payment
of trade accounts payable, accrual of other expenses, deferral of revenue and acceptance of customer deposits;

 

(i)           imposition
of any Encumbrance upon any of the Purchased Assets, except for Permitted Encumbrances;

 

(j)           increase
in the compensation of any Employees, other than as provided for in any written agreements or in the Ordinary Course of Business;

 

(k)          any
loan to (or forgiveness of any loan to), or entry into any other transaction with, any current or former directors, managers, officers
or employees of the Company;

 

(l)           adoption,
termination, amendment or modification of any Benefit Plan, the effect of which in the aggregate would increase the obligations
of Seller by more than five percent (5%) of its existing annual obligations to such plans;

 

    	 	16	 

     

    

  

(m)         adoption
of any plan of merger, consolidation, reorganization, liquidation or dissolution or filing of a petition in bankruptcy under any
provisions of federal or state bankruptcy Law or consent to the filing of any bankruptcy petition against it under any similar
Law;

 

(n)          purchase
or other acquisition of any property or asset that constitutes a Purchased Asset in an aggregate amount exceeding $10,000, except
for purchases of Inventory or supplies in the Ordinary Course of Business; or

 

(o)          any
agreement to do any of the foregoing, or any action or omission that would result in any of the foregoing.

 

4.08       Material
Contracts.

 

(a)          Section
4.08(a) of the Disclosure Schedules lists each of the following Contracts (x) by which any of the Purchased Assets are bound or
affected or (y) to which Seller is a party or by which Seller or Owner is bound in connection with the Company or the Purchased
Assets (together with all Leases listed in Section 4.11(a) of the Disclosure Schedules and all Intellectual Property Agreements
listed in Section 4.12(a) of the Disclosure Schedules, collectively, the "Material Contracts"):

 

(i)          all
Contracts with vendors, suppliers, distributors, sales brokers, manufacturers, consultants, service providers, employees and independent
contractors;

 

(ii)         all
Contracts involving aggregate consideration in excess of $5,000;

 

(iii)        all
Contracts that relate to the sale of any of the Purchased Assets, other than in the Ordinary Course of Business, for consideration
in excess of $5,000;

 

(iv)        all
Contracts that relate to the acquisition of any business, a material amount of stock or assets of any other Person or any real
property (whether by merger, sale of stock, sale of assets or otherwise);

 

(v)         except
for agreements relating to trade receivables, all Contracts relating to indebtedness (including, without limitation, guarantees);

 

(vi)        all
Contracts between or among the Seller on the one hand and any Affiliate of Seller on the other hand;

 

(vii)       all
collective bargaining agreements or Contracts with any labor organization, union or association.

 

(b)          Each
Material Contract is valid and binding on Seller in accordance with its terms and is in full force and effect. To the Knowledge
of Seller, none of the parties thereto is in breach of or default under (or is alleged to be in breach of or default under), or
has provided or received any notice of any intention to terminate, any Material Contract. Except as set forth on Section 4.08(b)
of the Disclosure Schedules, no event or circumstance has occurred that, with notice or lapse of time or both, would constitute
an event of default under any Material Contract or result in a termination thereof or would cause or permit the acceleration or
other changes of any right or obligation or the loss of any benefit under any Material Contract.

 

    	 	17	 

     

    

  

4.09       Title
to Purchased Assets. Except as set forth in Section 4.09 of the Disclosure Schedules, Seller
has good and valid title to, or a valid leasehold interest in, all the Purchased Assets, free and clear of Encumbrances except
for Permitted Encumbrances set forth in Section 4.09(a) of the Disclosure Schedules.

 

4.10       Sufficiency
of Assets. The Purchased Assets are sufficient for the continued conduct of the Business after
the Closing in substantially the same manner as conducted prior to the Closing and constitute all of the rights, property and assets
necessary to conduct the Business as currently conducted. All tangible personal property comprising the Purchased Assets has been
adequately maintained and is in good operating condition.

 

4.11       Real
Property.

 

(a)          Section
4.11(a) of the Disclosure Schedules sets forth all material real property leased by Seller used in connection with the Business
(collectively, the "Leased Real Property"), and a list, as of the date of this Agreement, of all leases for each
Leased Real Property involving annual payments of at least $10,000 (collectively, the "Leases").

 

(b)          Except
as set forth in Section 4.11(b) of the Disclosure Schedules, Seller has not received any written notice of existing, pending or
threatened (i) condemnation proceedings affecting the Real Property, or (ii) zoning, fire or building code violations or other
proceedings, or similar matters which would reasonably be expected to materially and adversely affect the ability to utilize the
Real Property as currently operated. Neither the whole nor any material portion of any Real Property has been damaged or destroyed
by fire or other casualty.

 

4.12       Intellectual
Property.

 

(a)          Section
4.12(a) of the Disclosure Schedules lists (i) all Intellectual Property Assets, (ii) all Intellectual Property Registrations, and
(iii) all Intellectual Property Agreements. Seller owns or has the right to use all Intellectual Property Assets and the Intellectual
Property licensed to Seller under the Intellectual Property Agreements, including, but not limited to, formulations for all products
and all processes and know-how related to the development and manufacturing of products as conducted by the Company.

 

(b)          Except
as set forth in Section 4.12(b) of the Disclosures Schedules: (i) the conduct of the Company and transaction of the Business as
currently conducted does not infringe, misappropriate, dilute or otherwise violate the Intellectual Property of any Person; and
(ii) no Person is infringing, misappropriating or otherwise violating any Intellectual Property Assets.

 

4.13       Inventory.
All Inventory, whether or not reflected in the Financial Statements, consists of a quality and quantity usable and salable in the
Ordinary Course of Business, except for obsolete, damaged, defective or Slow Moving Inventory items that have been written off
or written down to fair market value or for which adequate reserves have been established. All Inventory is owned by Seller free
and clear of all Encumbrances, and no Inventory is held on a consignment basis. The quantities of each item of Inventory (whether
raw materials, components, work-in-process or finished goods) are not excessive, but are reasonable in the present circumstances
of Seller.

 

    	 	18	 

     

    

  

4.14       Legal
Proceedings; Governmental Orders.

 

(a)          Except
as set forth in Section 4.14(a) of the Disclosure Schedules, there have not been within the last three (3) calendar years and there
are currently no actions, suits, claims, investigations or other legal proceedings pending or, to the Knowledge of Seller, threatened
against or by Seller relating to or affecting the Company, the Business, the Purchased Assets or the Assumed Liabilities.

 

(b)          Except
as set forth in Section 4.14(b) of the Disclosure Schedules, there are no outstanding Governmental Orders and no unsatisfied judgments,
penalties or awards against or affecting the Company or the Purchased Assets which would have a Material Adverse Effect.

 

4.15       Compliance
With Laws; Permits.

 

(a)          Except
as set forth in Section 4.15(a) of the Disclosure Schedules, Seller is in compliance with all Laws applicable to the conduct of
the Business as currently conducted or the ownership and use of the Purchased Assets.

 

(b)          Section
4.15(b) of the Disclosure Schedules contains a complete and accurate list of all Permits required for Seller to conduct the Business
as currently conducted or for the ownership and use of the Purchased Assets. All such Permits have been obtained by Seller and
are valid and in full force and effect, and, except as set forth in Section 4.15(b) of the Disclosure Schedules, all such Permits
are transferable upon Closing.

 

4.16       Environmental.
Seller has complied in all material respects with and is currently in compliance with all Laws relating to the environment or worker
safety, and Seller has not received any written notice, report, or information regarding any liabilities (whether accrued, absolute,
contingent, unliquidated, or otherwise) or any corrective, investigatory, or remedial obligations arising under such Laws which
relate to Seller currently or previously as used by Seller in the operation of the Company and Business.

 

4.17       Employee
Benefit Matters.

 

(a)          Except
as set forth in Section 4.17(a) of the Disclosure Schedules there are no material benefit, retirement, employment, consulting,
compensation, incentive, bonus, membership interest/stock option, appreciation right, phantom equity, change in control, severance,
vacation, paid time off, welfare and fringe-benefit agreement, plan, policy and program in effect and covering one or more Employees,
former employees of the Company, current or former directors of the Company or the beneficiaries or dependents of any such Persons,
and is maintained, sponsored, contributed to, or required to be contributed to by Seller, or under which Seller has any material
liability for premiums or benefits (as listed on Section 4.17(a) of the Disclosure Schedules, each, a "Benefit Plan").

 

(b)          Except
as set forth in Section 4.17(b) of the Disclosure Schedules, no Benefit Plan: (i) is subject to the minimum funding standards of
Section 302 of ERISA or Section 412 of the Code; or (ii) is a "multi-employer plan" (as defined in Section 3(37) of ERISA).

 

    	 	19	 

     

    

  

(c)          Except
as set forth in Section 4.17(c) of the Disclosure Schedules, no Benefit Plan provides benefits or coverage in the nature of health,
life or disability insurance following retirement or other termination of employment (other than death benefits when termination
occurs upon death).

 

(d)          Except
as set forth in Section 4.17(d) of the Disclosure Schedules, no Benefit Plan exists that could: (i) result in the payment to any
Employee, director or consultant of the Company of any money or other property; or (ii) accelerate the vesting of or provide any
additional rights or benefits (including funding of compensation or benefits through a trust or otherwise) to any Employee, director
or consultant of the Company, in each case, as a result of the execution of this Agreement. Neither the execution of this Agreement
nor the consummation of the transactions contemplated hereby will result in "excess parachute payments" within the meaning
of Section 280G(b) of the Code.

 

4.18       Employment
Matters.

 

(a)          Except
as set forth in Section 4.18(a) of the Disclosure Schedules, Seller is not a party to or bound by any collective bargaining or
other agreement with a union or labor organization representing any of the Employees. Except as set forth in Section 4.18(a) of
the Disclosure Schedules, there has not been, nor, to the Knowledge of Seller, has there been any threat of, any strike, slowdown,
work stoppage, lockout, concerted refusal to work overtime or other similar labor activity or dispute affecting Seller or any of
the Employees.

 

(b)          Seller
is in compliance with all applicable Laws pertaining to employment and employment practices to the extent they relate to the Employees,
except to the extent non-compliance would not result in a Material Adverse Effect.

 

(c)          All
employees classified as "exempt" have been properly classified; Seller does not assume any liability for how Buyer chooses
to classify its employees or independent contractors.

 

(d)          Schedule
4.18(d) of the Disclosure Schedules sets forth a list and description of services of all individuals who have served as consultants
to the Company. All such persons have been properly classified as consultants under applicable Laws.

 

(e)          Seller
is not aware of any intention on the part of any employee of Seller, other than Owners, to leave the employment of Buyer during
the 6 month period following the Closing.

 

4.19       Taxes.

 

(a)          Except
as set forth in Section 4.19 of the Disclosure Schedules, Seller has filed (taking into account any valid extensions) all Tax Returns
with respect to the Company and Business required to be filed by Seller and has paid all Taxes shown thereon as owing. Seller is
not currently the beneficiary of any extension of time within which to file any Tax Return other than extensions of time to file
Tax Returns obtained in the Ordinary Course of Business. No issue relating to Taxes has been raised by a taxing authority during
any pending audit or examination, and no issue relating to Taxes was raised by a taxing authority in any completed audit or examination,
that reasonably can be expected to recur in a later taxable period. All Taxes due and owing by Seller relating to the Business
have been paid (whether or not shown on any Tax Return and whether or not any Tax Return was required). For avoidance of doubt,
all Taxes due as a result of the operation of the Business prior to the Closing Date shall remain Excluded Liabilities, including
but not limited to payroll tax, income, sales or other tax.

 

    	 	20	 

     

    

  

(b)          Seller
is not a "foreign person" as that term is used in Treasury Regulations Section 1.1445-2.

 

(c)          Except
for certain representations related to Taxes in Section 4.16, the representations and warranties set forth in this Section 4.19
are Seller's sole and exclusive representations and warranties regarding Tax matters.

 

4.20       Brokers.
No broker, finder or investment banker is entitled to any brokerage, finder's or other fee or commission in connection with the
transactions contemplated by this Agreement or any other Transaction Document based upon arrangements made by or on behalf of Seller.

 

4.21       Full
Disclosure. No representation or warranty by Seller in this Agreement and no statement contained
in the Disclosure Schedules to this Agreement or any certificate or other document furnished or to be furnished to Buyer pursuant
to this Agreement contains any untrue statement of a material fact, or omits to state a material fact necessary to make the statements
contained therein, in light of the circumstances in which they are made, not misleading.

 

4.22       No
Other Representations and Warranties. Except for the representations and warranties contained
in this Article IV (including the related portions of the Disclosure Schedules), neither Seller nor any other Person has made or
makes any other express or implied representation or warranty, either written or oral, on behalf of Seller, including any representation
or warranty as to the accuracy or completeness of any information regarding the Company, Business, and the Purchased Assets furnished
or made available to Buyer and its Representatives, or as to the future revenue, profitability or success of the Business, or any
representation or warranty arising from statute or otherwise under applicable Laws.

 

Article
V.

REPRESENTATIONS AND
WARRANTIES OF BUYER

 

Except as set forth
in the Disclosure Schedules, Buyer represents and warrants to Seller that the statements contained in this Article V are true and
correct as of the date hereof.

 

5.01       Organization
and Authority of Buyer. Buyer is a corporation duly organized, validly existing and in good standing
under the Laws of the state of California.

 

    	 	21	 

     

    

 

5.02       Authority
of Buyer. Buyer has all necessary corporate power and authority to enter into this Agreement
and the other Transaction Documents to which Buyer is a party, to carry out its obligations hereunder and thereunder and to consummate
the transactions contemplated hereby and thereby. The execution and delivery by Buyer of this Agreement and any other Transaction
Document to which Buyer is a party, the performance by Buyer of its obligations hereunder and thereunder and the consummation by
Buyer of the transactions contemplated hereby and thereby have been duly authorized by all requisite corporate action on the part
of Buyer. This Agreement has been duly executed and delivered by Buyer, and (assuming due authorization, execution and delivery
by Seller) this Agreement constitutes a legal, valid and binding obligation of Buyer enforceable against Buyer in accordance with
its terms, except as such enforceability may be limited by bankruptcy, insolvency, reorganization, moratorium or similar Laws affecting
creditors' rights generally and by general principles of equity (regardless of whether enforcement is sought in a proceeding at
law or in equity). When each other Transaction Document to which Buyer is or will be a party has been duly executed and delivered
by Buyer (assuming due authorization, execution and delivery by each other party thereto), such Transaction Document will constitute
a legal and binding obligation of Buyer enforceable against it in accordance with its terms, except as such enforceability may
be limited by bankruptcy, insolvency, reorganization, moratorium or similar Laws affecting creditors' rights generally and by general
principles of equity (regardless of whether enforcement is sought in a proceeding at law or in equity).

 

5.03       No
Conflicts; Consents. The execution, delivery and performance by Buyer of this Agreement and the
other Transaction Documents to which it is a party, and the consummation of the transactions contemplated hereby and thereby, do
not and will not: (a) result in a violation or breach of any provision of the certificate of incorporation or by-laws of Buyer;
(b) result in a violation or breach of any provision of any Law or Governmental Order applicable to Buyer; or (c) except as set
forth in Section 5.03 of the Disclosure Schedules, require the consent, notice or other action by any Person under, conflict with,
result in a violation or breach of, constitute a default under or result in the acceleration of any agreement to which Buyer is
a party, except in the cases of clauses (b) and (c), where the violation, breach, conflict, default, acceleration or failure to
give notice would not have a material adverse effect on Buyer's ability to consummate the transactions contemplated hereby. No
consent, approval, Permit, Governmental Order, declaration or filing with, or notice to, any Governmental Authority is required
by or with respect to Buyer in connection with the execution and delivery of this Agreement and the other Transaction Documents
and the consummation of the transactions contemplated hereby and thereby, except as set forth in Section 5.03 of the Disclosure
Schedules and such consents, approvals, Permits, Governmental Orders, declarations, filings or notices which would not have a Material
Adverse Effect on Buyer's ability to consummate the transactions contemplated hereby and thereby.

 

5.04       Brokers.
No broker, finder or investment banker is entitled to any brokerage, finder's or other fee or commission in connection with the
transactions contemplated by this Agreement or any other Transaction Document based upon arrangements made by or on behalf of Buyer.

 

5.05       Sufficiency
of Funds. Buyer has sufficient cash on hand or other sources of immediately available funds to
enable it to make payment of the Purchase Price, pursuant to the Payment Schedule, and consummate the transactions contemplated
by this Agreement.

 

5.06       Solvency.
Immediately after giving effect to the transactions contemplated hereby, Buyer shall be solvent and shall: (a) be able to pay its
debts as they become due; and (b) have adequate capital to carry on its business. 

 

    	 	22	 

     

    

  

5.07       Legal
Proceedings. To Buyer's knowledge, there are no actions, suits, claims, investigations or other
legal proceedings pending or threatened against or by Buyer or any Affiliate of Buyer that challenge or seek to prevent, enjoin
or otherwise delay the transactions contemplated by this Agreement.

 

Article
VI.

COVENANTS

 

6.01       Conduct
of Business Prior to the Closing. From
the date hereof until the Closing, except as otherwise provided in this Agreement or consented to in writing by Buyer (which consent
shall not be unreasonably withheld or delayed), Seller shall (a) conduct the Business in the Ordinary Course of Business; and (b)
use commercially reasonable efforts to maintain and preserve intact its current Business organization, operations and franchise
and to preserve the rights, franchises, goodwill and relationships of its Employees, customers, lenders, suppliers, regulators
and others having relationships with the Company and Business. From the date hereof until the Closing Date, except as consented
to in writing by Buyer (which consent shall not be unreasonably withheld or delayed), Seller shall not take any action that would
cause any of the changes, events or conditions described in Section 4.07 to occur.

 

6.03       Access
to Information. From the date hereof until the Closing, Seller shall (a) afford Buyer and its
Representatives reasonable access to and the right to inspect all of the properties, assets, premises, Books and Records, Assigned
Contracts and other documents and data related to the Business; (b) furnish Buyer and its Representatives with such financial,
operating and other data and information related to the Business as Buyer or any of its Representatives may reasonably request;
and (c) instruct the Representatives of Seller to cooperate with Buyer in its investigation of the Business; provided, however,
that any such investigation shall be conducted during normal business hours upon reasonable advance notice to Seller, under the
supervision of Seller's personnel and in such a manner as not to interfere with the conduct of the Business or any other businesses
of Seller. All requests by Buyer for access pursuant to this Section 6.03 shall be submitted or directed exclusively to Seller
or Owners, or such other individuals as Seller may designate in writing from time to time. Notwithstanding anything to the contrary
in this Agreement, Seller shall not be required to disclose any information to Buyer if such disclosure would, in Seller's sole
discretion: (x) cause significant competitive harm to Seller and its businesses, including the Business, if the transactions contemplated
by this Agreement are not consummated; (y) jeopardize any attorney-client or other privilege; or (z) contravene any applicable
Law, fiduciary duty or binding agreement entered into prior to the date of this Agreement. Prior to the Closing, and in concert
with Seller, Buyer shall have the right to contact and discuss the operation of the Business with Seller's ten (10) largest customers
by volume, five (5) largest suppliers by volume and all major distributors. Buyer shall, and shall cause its Representatives to,
abide by the terms of the Confidentiality Agreement with respect to any access or information provided pursuant to this Section
6.03.

 

    	 	23	 

     

    

  

6.04       Supplement
to Disclosure Schedules. From time to time prior to the Closing, Seller shall have the right
(but not the obligation) to supplement or amend the Disclosure Schedules hereto with respect to any matter hereafter arising or
of which it becomes aware after the date hereof (each a "Schedule Supplement").
Any disclosure in any such Schedule Supplement shall not be deemed to have cured any inaccuracy in or breach of any representation
or warranty contained in this Agreement, including for purposes of the indemnification or termination rights contained in this
Agreement or of determining whether or not the conditions set forth in Section 7.02 have been satisfied; provided, however,
that if Buyer has the right to, but does not elect to, terminate this Agreement within thirty (30) Business Days of its receipt
of such Schedule Supplement, then Buyer shall be deemed to have irrevocably waived any right to terminate this Agreement with
respect to such matter, but shall not have nor be deemed to have waived its right to indemnification under Section 8.02 with respect
to such matter.

 

6.05       Transfer
of Employees. From the Effective Date through the business day immediately preceding the Closing
Date, Seller shall continue the employment of the employees of the Company and will make its best efforts to assist in the post-closing
employment of any such employees who Buyer, in its sole discretion, seeks to employ after Closing (the "Transferred Employees").
Seller will terminate the employment of the Transferred Employees, effective as of the close of business on the business day immediately
preceding the Closing Date, and will pay all liabilities, relating to the employment of and termination of such employees. Seller
shall pay directly to each of its employees that portion of all benefits which has been accrued on behalf of that employee (or
is attributable to expenses properly incurred by that employee) as of the close of business on the business day immediately preceding
the Closing Date, and Buyer shall assume no liability therefor. No portion of the assets of any Benefit Plan, fund, program or
arrangement, written or unwritten, heretofore sponsored or maintained by Seller (and no amount attributable to any such Benefit
Plan, fund, program or arrangement) shall be transferred to Buyer, and Buyer shall not be required to continue any such Benefit
Plan, fund, program or arrangement after the Closing.

 

(a)          Consulting
Agreement. Prior to the Closing, Buyer will negotiate in good faith a consulting agreement with Inga Tritt (“Tritt”),
pursuant to which Tritt shall serve as a consultant to Buyer for the Original Sprout operations, including transitional assistance,
marketing, product development, brand awareness and continuity services, at a flat rate of $2,500 per month beginning on the date
of Closing and for a period of 12 months thereafter. Tritt may also receive commissions of 5% on the amount of sales over $4 million.
The terms and conditions shall be set forth further in a definitive consulting agreement between Tritt and Buyer.

 

(b)          Employment
Agreement. Prior to the Closing, Buyer will negotiate in good faith an employment agreement with Michael Ambacher (“Ambacher”),
pursuant to which Ambacher shall serve in the capacity of President and General manager of the Original Sprout operations on terms
and conditions which shall be negotiated between Ambacher and Buyer.

 

(c)          Consulting
Agreement. Prior to the Closing, Buyer will negotiate in good faith a consulting agreement with Lisa Brown (“Brown”),
pursuant to which Brown shall serve as a consultant to Buyer for the Original Sprout operations on terms and conditions which shall
be negotiated between Brown and Buyer.

 

6.06       Confidentiality.
Buyer, Concierge, Seller and Owners acknowledge and agree that the Confidentiality Agreement dated May 1, 2017, among the Parties
remains in full force and effect and, in addition, covenants and agrees to keep all information relating to the Company, the Business
and the transactions described in this Agreement confidential, in accordance with the provisions of the Confidentiality Agreement.
If this Agreement is, for any reason, terminated prior to the Closing, the Confidentiality Agreement and the provisions of this
Section 6.06 shall nonetheless continue in full force and effect.

 

    	 	24	 

     

    

  

6.07       Books
and Records.

 

(a)          In
order to facilitate the resolution of any claims made against or incurred by Seller prior to the Closing, or for any other reasonable
purpose, for a period of three (3) years after the Closing, Buyer shall:

 

(i)          retain
the Books and Records (including personnel files) relating to periods after to the Closing in a manner reasonably consistent with
the prior practices of Seller; and

 

(ii)         upon
reasonable notice, afford the Seller's Representatives reasonable access (including the right to make, at Seller's expense, photocopies),
during normal business hours, to such Books and Records.

 

(b)          In
order to facilitate the resolution of any claims made by or against or incurred by Buyer after the Closing, or for any other reasonable
purpose, for a period of three (3) years after the Closing, Seller shall:

 

(i)          retain
the books and records (including personnel files) of Seller which relate to the Business and its operations for periods prior to
the Closing; and

 

(ii)         upon
reasonable notice, afford the Buyer's Representatives reasonable access (including the right to make, at Buyer's expense, photocopies),
during normal business hours, to such books and records.

 

(c)          Neither
Buyer nor Seller shall be obligated to provide the other party with access to any books or records (including personnel files)
pursuant to this Section 6.07 where such access would violate any Law.

 

6.08       Closing
Conditions. From the date hereof until the Closing, each Party hereto shall use commercially
reasonable efforts to take such actions as are necessary to expeditiously satisfy the closing conditions set forth in Article VII
hereof.

 

6.09       Public
Announcements. Unless otherwise required by applicable Law, no Party shall make any public announcements
in respect of this Agreement or the transactions contemplated hereby or otherwise communicate with any news media without the prior
written consent of the other Party (which consent shall not be unreasonably withheld or delayed), and the Parties shall cooperate
as to the timing and contents of any such announcement.

 

6.10       Bulk
Sales Laws. The Parties hereby covenant that each Party shall comply with the provisions of any
bulk sales, bulk transfer or similar Laws of any jurisdiction that may otherwise be applicable with respect to the sale of any
or all of the Purchased Assets to Buyer.

 

    	 	25	 

     

    

  

(a)          Escrow.
Within 20 days of the Effective Date, a bulk sale escrow (“Escrow”) shall be opened with an escrow company agreed upon
by Buyer and Seller. Seller and Buyer each agree to execute and acknowledge, as appropriate, any instructions, instruments, or
documents as may be reasonably required by Escrow agent to consummate the transactions contemplated by this Agreement as a bulk
sale to ensure no successor liability to Buyer for trade payables, employment or sales taxes or otherwise, and clearance of any
liens encumbering the Purchased Assets. Buyer and Seller agree that Seller shall place $10,000 to be held in Escrow by _________________________
to cover the cost of all expenses and liabilities associated with the Bulk Sale compliance requirements. Buyer and Seller shall
share the expense of the Escrow agent’s fees pro-rata (50/50).

 

(b)          Bulk
Sales Compliance. A Notice to Creditors of Bulk Sale (the “Notice”) shall be prepared by Escrow agent. The signature
of the Buyer and the Seller on the Notice will be conclusively deemed their approval of the information contained therein. The
Notice shall provide for the sale, transfer, and assignment of the Purchased Assets. The Seller shall be solely and entirely responsible
to ensure that the Notice complies with all Bulk Sale provisions of Uniform Commercial Code, Bulk Transfer Section, as the law
applies in California. In the event that the current laws pertaining to Bulk Sales are modified, amended or changed in any manner
during the course of the transactions contemplated herein, such modifications, amendments or changes shall take precedence over
the provisions of this Agreement that relate to Bulk Sales.

 

6.11       Receivables.
From and after the Closing, if Seller or any of its Affiliates receives or collects any funds relating to any Accounts Receivable
or any other Purchased Asset, Seller or its Affiliate shall remit such funds to Buyer within ten (10) Business Days after its receipt
thereof. Accounts Receivable which were assigned to Seller pursuant to Section 2.05(i), if any, are excluded from this requirement,
but Seller shall still provide notice of such receipt for Buyer’s records within 10 Business days. From and after the Closing,
if Buyer or its Affiliate receives or collects any funds relating to any Excluded Asset, Buyer or its Affiliate shall remit any
such funds to Seller within ten (10) Business Days after its receipt thereof.

 

6.12       Transfer
Taxes. All transfer, sales, use, registration, value added and other such Taxes and fees (including
any penalties and interest) incurred in connection with this Agreement and the other Transaction Documents (including unsecured
personal property tax to county tax collectors) that are attributable to Seller under state or federal tax Law shall be borne and
paid by Seller when due. Seller shall, at its own expense, timely file any Tax Return or other document with respect to such Taxes
or fees (and Buyer shall cooperate with respect thereto as necessary).

 

6.13       Further
Assurances. Following the Closing, each of the Parties hereto shall, and shall cause their respective
Affiliates to, execute and deliver such additional documents, instruments, conveyances and assurances and take such further actions
as may be reasonably required to carry out the provisions hereof and give effect to the transactions contemplated by this Agreement
and the other Transaction Documents.

 

Article
VII.

CONDITIONS TO CLOSING

 

7.01       Conditions
to Obligations of All Parties. The obligations of each Party to consummate the transactions contemplated
by this Agreement shall be subject to the fulfillment, at or prior to the Closing, of the following condition: 

 

    	 	26	 

     

    

  

(a)          No
Governmental Authority shall have enacted, issued, promulgated, enforced or entered any Governmental Order which is in effect and
has the effect of making the transactions contemplated by this Agreement illegal, otherwise materially restraining or prohibiting
consummation of such transactions or causing any of the transactions contemplated hereunder to be rescinded following completion
thereof.

 

7.02       Conditions
to Obligations of Buyer. The obligations of Buyer to consummate the transactions contemplated
by this Agreement shall be subject to the fulfillment or Buyer's waiver, at or prior to the Closing, of each of the following conditions:

 

(a)          The
representations and warranties of Seller contained in Article IV shall be true and correct in all respects as of the Closing Date
with the same effect as though made at and as of such date (except those representations and warranties that address matters only
as of a specified date, which shall be true and correct in all respects as of that specified date), except where the failure of
such representations and warranties to be true and correct would not have a Material Adverse Effect.

 

(b)          Seller
shall have duly performed and complied in all material respects with all agreements, covenants and conditions required by this
Agreement, and each of the other Transaction Documents to be performed or complied with by it prior to or on the Closing Date.

 

(c)          Seller
shall have delivered to Buyer duly executed counterparts to the Transaction Documents (other than this Agreement) and such other
documents and deliveries set forth in Section 3.02(a).

 

(d)          Buyer
shall have received a certificate, dated the Closing Date and signed by a duly authorized officer of Seller, that each of the conditions
set forth in Section 7.02(a) and Section 7.02(b) have been satisfied (the "Seller Closing Certificate").

 

(e)          Buyer
shall have received a certificate of the Secretary or an Assistant Secretary (or equivalent officer) of Seller certifying that
attached thereto are true and complete copies of all resolutions adopted by the board of directors of Seller authorizing the execution,
delivery and performance of this Agreement and the other Transaction Documents and the consummation of the transactions contemplated
hereby and thereby, and that all such resolutions are in full force and effect and are all the resolutions adopted in connection
with the transactions contemplated hereby and thereby.

 

(f)           Buyer
shall have received a certificate of the Secretary or an Assistant Secretary (or equivalent officer) of Seller certifying the names
and signatures of the officers of Seller authorized to sign this Agreement, the Transaction Documents and the other documents to
be delivered hereunder and thereunder.

 

(g)          All
consents, authorizations, orders and approvals listed on Section 4.04 of the Disclosure Schedules, if any, shall have been received,
and executed counterparts thereof shall have been delivered to Buyer at or prior to the Closing.

 

(h)          The
UCC Financing Statement, filed by Community Bank, as Filing Number 147417035365, on June 23, 2014, against the Seller as debtor
(the "CB Financing Statement"), shall be cured or resolved as evidenced by a UCC-3 Termination Statement or equivalent
filing filed by Community or its Affiliate, at or prior to the Closing. If the CB Financing Statement is not cured or resolved
at or prior to the date of Closing, Buyer shall have the right, in its sole discretion, to waive this requirement and deduct the
cost it is required to pay in order to cure or resolve the CB Financing Statement from the Second Payment of the Purchase Price,
and such amount shall not be included in the calculation of the Purchase Price.

 

    	 	27	 

     

    

  

(i)           The
UCC Financing Statement, filed by Packaging on Demand, Inc, as Filing Number 157460657677, on April 17, 2015, against the Seller
as debtor (the " POD Financing Statement"), shall be cured or resolved as evidenced by a UCC-3 Termination Statement
or equivalent filing filed by Community or its Affiliate, at or prior to the Closing. If the POD Financing Statement is not cured
or resolved at or prior to the date of Closing, Buyer shall have the right, in its sole discretion, to waive this requirement and
deduct the cost it is required to pay in order to cure or resolve the POD Financing Statement from the Second Payment of the Purchase
Price, and such amount shall not be included in the calculation of the Purchase Price.

 

(j)           Buyer
shall have received sufficient documentation from: (i) Community Bank acknowledging the release and discharge of all obligations
owed by Seller under the Business Loan dated June 26, 2014 upon their receipt of funds transferred in the Initial Payment, and
(ii) POD acknowledging the release and discharge of all obligations owed by Seller to POD under that certain Promissory Note, dated
April 14, 2015.

 

(k)          Buyer
shall have received fully executed assignment agreements for each of the Assigned Contracts as set forth in Section 2.01(c).

 

(l)           Buyer
shall have received consent from Seller to conduct business as “Original Sprout”.

 

(m)        
Seller shall have provided Buyer with evidence of an agreement with POD wherein POD warrants that they shall not manufacture or
disclose any of the product formulas to any third party, or for their own benefit, without the express written permission of Seller,
their assignees or successors.

 

(n)          The
Seller shall have done everything required to be done by the Bulk Sales escrow agent in order to close the Bulk Sales escrow and
comply with the Bulk Sales laws.

 

7.03       Conditions
to Obligations of Seller. The obligations of Seller to consummate the transactions contemplated
by this Agreement shall be subject to the fulfillment or Seller's waiver, at or prior to the Closing, of each of the following
conditions:

 

(a)          The
representations and warranties of Buyer contained in Article V shall be true and correct in all respects as of the Closing Date
with the same effect as though made at and as of such date (except those representations and warranties that address matters only
as of a specified date, which shall be true and correct in all respects as of that specified date), except where the failure of
such representations and warranties to be true and correct would not have a material adverse effect on Buyer's ability to consummate
the transactions contemplated hereby.

 

(b)          Buyer
shall have duly performed and complied in all material respects with all agreements, covenants and conditions required by this
Agreement and each of the other Transaction Documents to be performed or complied with by it prior to or on the Closing Date.

 

    	 	28	 

     

    

  

(c)          Buyer
shall have delivered to Seller the Purchase Price pursuant to the Payment Schedule, duly executed counterparts to the Transaction
Documents (other than this Agreement) and such other documents and deliveries set forth in Section 3.02(b).

 

(d)          Seller
shall have received a certificate, dated the Closing Date and signed by a duly authorized officer of Buyer, that each of the conditions
set forth in Section 7.03(a) and Section 7.03(b) have been satisfied (the "Buyer Closing Certificate").

 

(e)          Seller
shall have received a certificate of the Secretary or an Assistant Secretary (or equivalent officer) of Buyer certifying that attached
thereto are true and complete copies of all resolutions adopted by the board of directors of Buyer authorizing the execution, delivery
and performance of this Agreement and the other Transaction Documents and the consummation of the transactions contemplated hereby
and thereby, and that all such resolutions are in full force and effect and are all the resolutions adopted in connection with
the transactions contemplated hereby and thereby.

 

(f)           Seller
shall have received a certificate of the Secretary or an Assistant Secretary (or equivalent officer) of Buyer certifying the names
and signatures of the officers of Buyer authorized to sign this Agreement, the Transaction Documents and the other documents to
be delivered hereunder and thereunder.

 

Article
VIII.

INDEMNIFICATION

 

8.01       Survival.
Subject to the limitations and other provisions of this Agreement, the representations and warranties contained herein shall survive
the Closing and shall remain in full force and effect until the date that is three (3) years from the Closing Date; except (a)
the representations and warranties set forth in Sections 4.15, 4.16, 4.17 and 4.18 which shall survive until four (4) years following
the Closing Date and (b) the representations and warranties set forth in Sections 4.01, 4.02, 4.05, 4.06, 4.09, and 4.20 which
shall survive until sixty (60) days following the expiration of all applicable statutes of limitation. All covenants and agreements
of the Parties contained in this Agreement shall survive the Closing indefinitely or for the period explicitly specified therein.
The expiration of any representation, warranty or covenant shall not affect any claim made in accordance with this Agreement prior
to the date of such expiration.

 

8.02       Indemnification
By Seller. Subject to the other terms and conditions of this Article VIII, Seller and Owners
jointly and severally shall indemnify Buyer against, and shall hold Buyer harmless from and defend against, any and all Losses
incurred or sustained by, or imposed upon, Buyer based upon, arising out of, with respect to or by reason of:

 

(a)          any
inaccuracy in or breach of any of the representations or warranties of Seller contained in this Agreement, the other Transaction
Documents or in any certificate or instrument delivered by or on behalf of Seller pursuant to this Agreement, as of the date such
representation or warranty was made or as if such representation or warranty was made on and as of the Closing Date (except for
representations and warranties that expressly relate to a specified date, the inaccuracy in or breach of which will be determined
with reference to such specified date)

 

    	 	29	 

     

    

  

(b)          any
breach or non-fulfillment of any covenant, agreement or obligation to be performed by Seller pursuant to this Agreement, the other
Transaction Documents or any certificate or instrument delivered by or on behalf of Seller pursuant to this Agreement.

 

(c)          any
refunds and other costs associated with such refunds, including shipping, freight, product replacement costs and handling charges,
that may result from sales made by the Company prior to the Closing;

 

(d)          any
Third Party Claim based upon, resulting from or arising out of the Business, operations, properties, assets or obligations of Seller
or any of its Affiliates (other than the Purchased Assets or Assumed Liabilities) conducted, existing or arising on or prior to
the Closing Date; and

 

(e)          any
Excluded Asset or any Excluded Liability.

 

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

 

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

 

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

 

(c)          any
Assumed Liability to the extent such Loss by Seller arises after the Closing Date.

 

8.04       Certain
Limitations. The party making a claim under this Article VIII is referred to as the "Indemnified
Party", and the party against whom such claims are asserted under this Article VIII is referred to as the "Indemnifying
Party". The indemnification provided for in Section 8.02 and Section 8.03 shall be subject to the following limitations:

 

(a)          The
Indemnifying Party shall not be liable to the Indemnified Party for indemnification under Section 8.02(a) or Section 8.03(a) 8.03(a),
as the case may be, until the aggregate amount of all Losses in respect of indemnification under Section 8.02(a) or Section 8.03(a)
exceeds $10,000 (the "Deductible"), in which event the Indemnifying Party shall only be required to pay or be
liable for Losses in excess of the Deductible.

 

(b)          The
aggregate amount of all Losses for which an Indemnifying Party shall be liable pursuant to Section 8.02(a) or Section 8.03(a),
as the case may be, shall not exceed the Purchase Price.

 

(c)          Payments
by an Indemnifying Party pursuant to Section 8.02 or Section 8.03 in respect of any Loss shall be limited to the amount of any
liability or damage that remains after deducting therefrom any insurance proceeds received by the Indemnified Party in respect
of any such claim. The Indemnified Party shall use its commercially reasonable efforts to recover under insurance policies for
any Losses while seeking indemnification under this Agreement.

 

    	 	30	 

     

    

  

(d)          In
no event shall any Indemnifying Party be liable to any Indemnified Party for any punitive damages.

 

(e)          In
determining any indemnification obligation or Losses resulting from the breach of any representation or warranty, all references
to "materiality" or "Material Adverse Effect" in the subject representation or warranty shall be ignored.

 

8.05       Indemnification
Procedures.

 

(a)          Third
Party Claims. If any Indemnified Party receives notice of the assertion or commencement of any action, suit, claim or other
legal proceeding made or brought by any Person who is not a party to this Agreement or an Affiliate of a party to this Agreement
or a Representative of the foregoing (a "Third Party Claim") against such Indemnified Party with respect to which
the Indemnifying Party is obligated to provide indemnification under this Agreement, the Indemnified Party shall give the Indemnifying
Party prompt written notice thereof. The failure to give such prompt written notice shall not, however, relieve the Indemnifying
Party of its indemnification obligations, except and only to the extent that the Indemnifying Party forfeits rights or defenses
by reason of such failure. Such notice by the Indemnified Party shall describe the Third Party Claim in reasonable detail, shall
include copies of all material written evidence thereof and shall indicate the estimated amount, if reasonably practicable, of
the Loss that has been or may be sustained by the Indemnified Party. The Indemnifying Party shall have the right to participate
in, or by giving written notice to the Indemnified Party, to assume the defense of any Third Party Claim at the Indemnifying Party's
expense and by the Indemnifying Party's own counsel, and the Indemnified Party shall cooperate in good faith in such defense. In
the event that the Indemnifying Party assumes the defense of any Third Party Claim, subject to Section 8.05(b), it shall have the
right to take such action as it deems necessary to avoid, dispute, defend, appeal or make counterclaims pertaining to any such
Third Party Claim in the name and on behalf of the Indemnified Party. The Indemnified Party shall have the right, at its own cost
and expense, to participate in the defense of any Third Party Claim with counsel selected by it subject to the Indemnifying Party's
right to control the defense thereof. If the Indemnifying Party elects not to compromise or defend such Third Party Claim or fails
to promptly notify the Indemnified Party in writing of its election to defend as provided in this Agreement, the Indemnified Party
may, subject to Section 8.05(b), pay, compromise, or defend such Third Party Claim and seek indemnification for any and all Losses
based upon, arising from or relating to such Third Party Claim. Seller and Buyer shall cooperate with each other in all reasonable
respects in connection with the defense of any Third Party Claim, including making available (subject to the provisions of Section
6.06) records relating to such Third Party Claim and furnishing, without expense (other than reimbursement of actual out-of-pocket
expenses) to the defending party, management employees of the non-defending party as may be reasonably necessary for the preparation
of the defense of such Third Party Claim.

 

    	 	31	 

     

    

  

(b)          Settlement
of Third Party Claims. Notwithstanding any other provision of this Agreement, the Indemnifying Party shall not enter into settlement
of any Third Party Claim without the prior written consent of the Indemnified Party (which consent shall not be unreasonably withheld
or delayed), except as provided in this Section 8.05(b). If a firm offer is made to settle a Third Party Claim without leading
to liability or the creation of a financial or other obligation on the part of the Indemnified Party and provides, in customary
form, for the unconditional release of each Indemnified Party from all liabilities and obligations in connection with such Third
Party Claim and the Indemnifying Party desires to accept and agree to such offer, the Indemnifying Party shall give written notice
to that effect to the Indemnified Party. If the Indemnified Party fails to consent to such firm offer within ten (10) days after
its receipt of such notice, the Indemnified Party may continue to contest or defend such Third Party Claim and in such event, the
maximum liability of the Indemnifying Party as to such Third Party Claim shall not exceed the amount of such settlement offer.
If the Indemnified Party fails to consent to such firm offer and also fails to assume defense of such Third Party Claim, the Indemnifying
Party may settle the Third Party Claim upon the terms set forth in such firm offer to settle such Third Party Claim. If the Indemnified
Party has assumed the defense pursuant to Section 8.05(a), it shall not agree to any settlement without the written consent of
the Indemnifying Party (which consent shall not be unreasonably withheld or delayed).

 

(c)          Direct
Claims. Any claim by an Indemnified Party on account of a Loss which does not result from a Third Party Claim (a "Direct
Claim") shall be asserted by the Indemnified Party giving the Indemnifying Party prompt written notice thereof. The failure
to give such prompt written notice shall not, however, relieve the Indemnifying Party of its indemnification obligations, except
and only to the extent that the Indemnifying Party forfeits rights or defenses by reason of such failure. Such notice by the Indemnified
Party shall describe the Direct Claim in reasonable detail, shall include copies of all material written evidence thereof and shall
indicate the estimated amount, if reasonably practicable, of the Loss that has been or may be sustained by the Indemnified Party.
The Indemnifying Party shall have thirty (30) days after its receipt of such notice to respond in writing to such Direct Claim.
During such thirty-day (30) period, the Indemnified Party shall allow the Indemnifying Party and its professional advisors to investigate
the matter or circumstance alleged to give rise to the Direct Claim, and whether and to what extent any amount is payable in respect
of the Direct Claim. The Indemnified Party shall assist the Indemnifying Party's investigation by giving such information and assistance
(including access to the Indemnified Party's premises and personnel and the right to examine and copy any accounts, documents or
records) as the Indemnifying Party or any of its professional advisors may reasonably request. If the Indemnifying Party does not
so respond within such thirty-day (30) period, the Indemnifying Party shall be deemed to have rejected such claim, in which case
the Indemnified Party shall be free to pursue such remedies as may be available to the Indemnified Party on the terms and subject
to the provisions of this Agreement.

 

(d)          Right
of Offset. In the event that Buyer identifies and determines that an event or occurrence is more likely than not to trigger
an indemnification obligation of Seller, pursuant to Section 8.02, Buyer shall have the right to offset the reasonably anticipated
amount of such offset from the Second Payment and Final Payment. Any offset amount shall be placed in an escrow account to be held
for the benefit of the Parties until the triggering event has been resolved by the Parties pursuant to a settlement agreement or
if a dispute as to the indemnity obligation arises, such dispute shall be referred to a mediator for resolution in Orange County,
California.

 

    	 	32	 

     

    

  

8.06       Tax
Treatment of Indemnification Payments. All indemnification payments made under this Agreement
shall be treated by the parties as an adjustment to the Purchase Price for Tax purposes, unless otherwise required by Law.

 

8.07       Exclusive
Remedies. The parties acknowledge and agree that their sole and exclusive remedy with respect
to claims for money damages, other than claims arising from intentional misrepresentation or fraud on the part of a Party hereto
in connection with the transactions contemplated by this Agreement, for any breach of any representation, warranty, covenant, agreement
or obligation set forth herein or otherwise relating to the subject matter of this Agreement, shall be pursuant to the indemnification
provisions set forth in this Article VIII. Nothing in this Section 8.07 shall limit any Person's right to seek and obtain any equitable
relief to which any Person shall be entitled, or to seek any remedy on account of any intentional misrepresentation or fraud by
any Party hereto.

 

Article
IX.

TERMINATION

 

9.01       Termination.
This Agreement may be terminated at any time prior to the Closing:

 

(a)          by
the mutual written consent of Seller and Buyer;

 

(b)          by
Buyer by written notice to Seller if:

 

(i)          Buyer
is not then in material breach of any provision of this Agreement and there has been a material breach, inaccuracy in or failure
to perform any representation, warranty, covenant or agreement made by Seller pursuant to this Agreement that would give rise to
the failure of any of the conditions specified in Article VII and such breach, inaccuracy or failure cannot be cured by Seller
within thirty (30) days; or

 

(ii)         any
of the conditions set forth in Section 7.01 or Section 7.02 shall not have been fulfilled by December 31, 2017;

 

(iii)        an
audit of Seller is triggered pursuant to Section 7.02(h), or

 

(iv)        a
Material Adverse Effect occurs prior to Closing.

 

(c)          by
Seller by written notice to Buyer if:

 

(i)          Seller
is not then in material breach of any provision of this Agreement and there has been a material breach, inaccuracy in or failure
to perform any representation, warranty, covenant or agreement made by Buyer pursuant to this Agreement that would give rise to
the failure of any of the conditions specified in Article VII and such breach, inaccuracy or failure cannot be cured by Buyer by
December 15, 2017; or

 

(ii)         any
of the conditions set forth in Section 7.01 or Section 7.03 shall not have been fulfilled by December 31, 2017; or

 

(d)          by
Buyer or Seller in the event that:

 

    	 	33	 

     

    

 

 (i)         there
shall be any Law that makes consummation of the transactions contemplated by this Agreement illegal or otherwise prohibited; or

 

(ii)         any
Governmental Authority shall have issued a Governmental Order restraining or enjoining the transactions contemplated by this Agreement,
and such Governmental Order shall have become final and non-appealable.

 

9.02       Effect
of Termination. In the event of the termination of this Agreement in accordance with this Article,
this Agreement shall forthwith become void and there shall be no liability on the part of any Party hereto except:

 

(a)          as
set forth in this Article IX and Article X hereof; and

 

(b)          that
nothing herein shall relieve any Party hereto from liability for any intentional breach of any provision hereof.

 

Article
X.

MISCELLANEOUS

 

10.01     Expenses.
Except as otherwise expressly provided herein, all costs and expenses, including, without limitation, fees and disbursements of
counsel, financial advisors and accountants, incurred in connection with this Agreement and the transactions contemplated hereby
shall be paid by the Party incurring such costs and expenses, whether or not the Closing shall have occurred.

 

10.02     Notices.
All notices, requests, consents, claims, demands, waivers and other communications hereunder shall be in writing and shall be deemed
to have been given (a) when delivered by hand (with written confirmation of receipt); (b) when received by the addressee if sent
by a nationally recognized overnight courier (receipt requested); (c) on the date sent by facsimile or e-mail of a PDF document
(with confirmation of transmission) if sent during normal business hours of the recipient, and on the next Business Day if sent
after normal business hours of the recipient or (d) on the third (3rd) day after the date mailed, by certified or registered
mail, return receipt requested, postage prepaid. Such communications must be sent to the respective Parties at the following addresses
(or at such other address for a Party as shall be specified in a notice given in accordance with this Section 10.02): 

 

	
        If to Seller (prior to Closing):

         
	
        The Original Sprout, LLC

        Attn: Inga Tritt and William Pritchett

        1202 Puerta Del Sol

        San Clemente, CA 92673

 

    	 	34	 

     

    

  

	
        If to Owner (or Seller after Closing):

         
	
        Inga Tritt

        3221 Beach Club Rd.

        Carpinteria, CA 93013

        Tel: 805-610-1557

        E-mail: inga.tritt67@gmail.com

         

        William Pritchett

        1103 Creekside Way, Unit E

        Ojai, CA 93023

        Tel: 805-451-7663

        E-mail: willprt@cs.com

         

	
        If to Seller or Owner, with a copy to:

         
	
        Auric Law Group Ltd.

        Attn: Mathew Auric

        530 W Ojai Ave, Suite 201

        Ojai CA 93023

        Tel: 805-669-7007

        E-Mail: Mathew@Ojailawyer.com

	 	 
	
        If to Buyer:

         
	
        Kahnalytics, Inc.

        Attn: David Neibert

        29115 Valley Center Rd., K-206

        Valley Center, CA 92082  USA

        Tel: 866-800-2978, Ext. 3

        Facsimile: 888-312-0124

        E-mail: dneibert@conciergetechnology.net

         

	
        with a copy to:

         
	
        Horwitz + Armstrong, A Professional Law Corp.

        Attn: Lawrence Horwitz; Jessica Lockett

        14 Orchard, Suite 200

        Lake Forest, CA 92630

        Tel: 949-540-6540

        Facsimile: 949-540-6578

        E-mail: lhorwitz@horwitzarmstrong.com;

        jlockett@horwitzarmstrong.com

 

10.03     Interpretation.
For purposes of this Agreement, (a) the words "include," "includes" and "including" shall be deemed
to be followed by the words "without limitation"; and (b) the words "herein," "hereof," "hereby,"
"hereto" and "hereunder" refer to this Agreement as a whole. Unless the context otherwise requires, references
herein: (x) to Articles, Sections, Disclosure Schedules and Exhibits mean the Articles and Sections of, and Disclosure Schedules
and Exhibits attached to, this Agreement; (y) to an agreement, instrument or other document means such agreement, instrument or
other document as amended, supplemented and modified from time to time to the extent permitted by the provisions thereof and (z)
to a statute means such statute as amended from time to time and includes any successor legislation thereto and any regulations
promulgated thereunder. This Agreement shall be construed without regard to any presumption or rule requiring construction or interpretation
against the party drafting an instrument or causing any instrument to be drafted. The Disclosure Schedules and Exhibits referred
to herein shall be construed with, and as an integral part of, this Agreement to the same extent as if they were set forth verbatim
herein.

 

    	 	35	 

     

    

  

10.04     Headings.
The headings in this Agreement are for reference only and shall not affect the interpretation of this Agreement.

 

10.05     Severability.
If any term or provision of this Agreement is invalid, illegal or unenforceable in any jurisdiction, such invalidity, illegality
or unenforceability shall not affect any other term or provision of this Agreement or invalidate or render unenforceable such term
or provision in any other jurisdiction. Upon such determination that any term or other provision is invalid, illegal or unenforceable,
the parties hereto shall negotiate in good faith to modify this Agreement so as to effect the original intent of the parties as
closely as possible in a mutually acceptable manner in order that the transactions contemplated hereby be consummated as originally
contemplated to the greatest extent possible.

 

10.06     Entire
Agreement. This Agreement and the other Transaction Documents constitute the sole and entire
agreement of the Parties to this Agreement with respect to the subject matter contained herein and therein, and supersede all prior
and contemporaneous representations, warranties, understandings and agreements, both written and oral, with respect to such subject
matter. In the event of any inconsistency between the statements in the body of this Agreement and those in the other Transaction
Documents, the Exhibits and Disclosure Schedules (other than an exception expressly set forth as such in the Disclosure Schedules),
the statements in the body of this Agreement will control.

 

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

 

10.08     No
Third Party Beneficiaries. This Agreement is for the sole benefit of the Parties hereto and their
respective successors and permitted assigns and nothing herein, express or implied, is intended to or shall confer upon any other
Person or entity any legal or equitable right, benefit or remedy of any nature whatsoever under or by reason of this Agreement.

 

10.09     Amendment
and Modification; Waiver. This Agreement may only be amended, modified or supplemented by an
agreement in writing signed by each Party hereto. No waiver by any Party of any of the provisions hereof shall be effective unless
explicitly set forth in writing and signed by the Party so waiving. No waiver by any Party shall operate or be construed as a waiver
in respect of any failure, breach or default not expressly identified by such written waiver, whether of a similar or different
character, and whether occurring before or after that waiver. No failure to exercise, or delay in exercising, any right, remedy,
power or privilege arising from this Agreement shall operate or be construed as a waiver thereof; nor shall any single or partial
exercise of any right, remedy, power or privilege hereunder preclude any other or further exercise thereof or the exercise of any
other right, remedy, power or privilege.

 

    	 	36	 

     

    

  

10.10     Governing
Law; Mediation; Submission to Jurisdiction; Waiver of Jury Trial.

 

(a)          This
Agreement shall be governed by and construed in accordance with the laws of the State of California without giving effect to any
choice or conflict of law provision or rule, or any other jurisdiction.

 

(b)          Any
dispute, controversy or claim arising out of or relating to this Agreement shall, at first instance, be referred to a mediator
for resolution with the mediation to take place in Orange County, California. The Parties shall agree upon a mediator who has experience
with business transactions. The Parties shall mutually agree upon a mediator within fourteen (14) days and schedule such mediation.
The Parties involved shall equally pay their respective portion of the costs of mediation. Notwithstanding the foregoing, any party
may seek equitable relief by court action before or after instituting mediation, including, without limitation, seeking and obtaining
temporary restraining orders, injunctions or other provisional or ancillary remedies, and the initiation and/or maintenance of
any such action shall not constitute a waiver of the right to mediate any controversy or claim.

 

(c)          The
Parties agree that any legal suit, action or proceeding arising out of our based upon this Agreement or the other Transaction Documents
shall be instituted in the Federal or State Courts of the State of California.

 

(d)          Each
Party hereby irrevocably and unconditionally waives any right it may have to a trial by jury.

 

10.11     Counterparts.
This Agreement may be executed in counterparts, each of which shall be deemed an original, but all of which together shall be deemed
to be one and the same agreement. A signed copy of this Agreement delivered by facsimile, e-mail or other means of electronic transmission
shall be deemed to have the same legal effect as delivery of an original signed copy of this Agreement.

 

[Signature Page Follows]

 

    	 	37	 

     

    

 

IN WITNESS WHEREOF,
the Parties hereto have caused this Agreement to be executed as of the date first written above by their respective officers thereunto
duly authorized.

 

	SELLER	 	BUYER
	 	 	 
	THE ORIGINAL SPROUT, LLC	 	KAHNALYTICS, INC.
	 	 	 
	By:	/s/Inga Tritt	 	By:	/s/David Neibert

	Name:	Inga Tritt	 	Name:	David Neibert
	Title:	Co-CEO	 	Title:	Chief Financial Officer

 

	By:	/s/William Pritchett	 	Acknowledged and accepted by:
	Name: William Pritchett	 	 
	Title: Co-CEO	 	 

	 	CONCIERGE TECHNOLOGIES, INC.,
	 	100% Shareholder of Kahnalytics, Inc.
	 	 	 
	 	By:	/s/Nicholas Gerber

	 	Name: Nicholas Gerber
	 	Its: Chief Executive Officer

 

	Original Sprout, LLC MEMBER/OWNERS	 
	 	 
	/s/Inga Tritt	 
	Inga Tritt	 
	50% Member of Original Sprout, LLC	 
	 	 
	/s/William Pritchett	 
	William Pritchett	 
	50% Member of Original Sprout, LLC	 

 

[Signature
Page to Asset Purchase Agreement]

 

    	 	 	 

     

    

 

EXHIBIT A

 

BILL OF SALE

AND

ASSIGNMENT AND ASSUMPTION AGREEMENT

 

This Bill of Sale and
Assignment and Assumption Agreement (“Bill of Sale”) is made effective as of _______ __, 2017, by and between The Original
Sprout, LLC, a California limited liability company ("Seller"), and Kahnalytics, Inc., a California corporation ("Buyer").

 

WHEREAS, the Seller and Buyer are
parties to that certain Asset Purchase Agreement, dated October 18, 2017 (the “Agreement”), pursuant to which the Seller
will sell, convey, transfer and assign to Buyer all of Seller’s respective right, title and interest in and to the Purchased
Assets as set forth in the Agreement;

 

WHEREAS, unless otherwise defined
herein, capitalized terms used in this Bill of Sale shall have the meanings ascribed to them in the Agreement.

 

NOW, THEREFORE, BE IT KNOWN THAT:

 

For good and valuable consideration, the
receipt and sufficiency of which are acknowledged:

 

		A.	Seller agrees as follows:

 

1.           Seller
hereby sells, assigns, transfers and conveys to Buyer forever, all of Seller's right, title and interest in and to the Purchased
Assets.

 

2.           The
Seller hereby covenants and agrees that it shall, without further consideration, at any time and from time to time after the date
hereof, execute and deliver to Buyer such further instruments of sale, conveyance, assignment and transfer, and take such other
action, all upon the reasonable request of Buyer, to (i) sell, convey, grant, assign, transfer and deliver all or any portion
of the Purchased Assets to Buyer, and (ii) assure and confirm to any other person or entity Buyer’s ownership of the
Purchased Assets pursuant to this Bill of Sale.

 

3.           Seller
hereby constitutes and appoints Buyer, its successors and assigns, as Seller's true and lawful attorney or attorneys, with full
power of substitution, for Seller and in Seller's name and stead or otherwise, but on behalf of and for the benefit of Buyer, its
successors and assigns, (i) to demand and receive, from time to time, any and all of the Purchased Assets hereby sold, assigned
and transferred or intended to be transferred; (ii) from time to time, and subject to Article VIII of the Asset Purchase Agreement,
to institute and prosecute in the name of Seller or otherwise, for the benefit of Buyer, its successors and assigns, any proceedings
at law, in equity or otherwise that Buyer, its successors or assigns may deem proper in order to collect, assert or enforce any
claim, right or title of any kind in and to the Purchased Assets hereby sold and transferred or intended to be transferred; and
(iii) to defend and compromise any and all actions, suits or proceedings in respect of any of the Purchased Assets, provided that
when Buyer exercises any of the powers granted by this Section 3 to act as attorney in fact for Seller, Buyer shall give Seller
prompt and reasonable notice of such exercise. Seller declares that the appointment made and the powers granted by this Section
3 are coupled with an interest and shall be irrevocable by the Seller.

 

    	 	 	 

     

    

  

		B.	Buyer agrees as follows:

 

1.           Buyer
hereby assumes and shall discharge or perform when due, in accordance with the Asset Purchase Agreement, each of, but only, the
Assumed Liabilities to the extent the obligation for such performance arises after the Closing Date set forth in the Asset Purchase
Agreement.

 

2.           Buyer
further agrees to execute any other instruments and documents as Seller may reasonably request to carry into effect or to evidence
further the assumption of the Assumed Liabilities by Buyer.

 

		C.	This instrument and all of its terms shall inure to the
benefit of Buyer, Seller and their respective successors and assigns and shall bind Buyer, Seller and their respective successors,
heirs and legal representatives, but nothing herein, express or implied, is intended to nor shall confer upon any other Person,
any legal or equitable right, benefit or remedy of any nature whatsoever, under or by reason of this Agreement.

 

		D.	This Bill of Sale shall be governed by and construed in
accordance with the laws of the State of California.

 

		E.	This Bill of Sale may be executed in one or more counterparts,
each of which shall be deemed an original but all of which together shall constitute one and the same instrument.

 

[Signature Page to Follow]

 

    	 	2	 

     

    

 

IN WITNESS WHEREOF,
the Parties hereto have caused this Bill of Sale to be executed as of the date first written above by their respective officers
thereunto duly authorized.

 

	SELLER	 	PURCHASER
	 	 	 
	THE ORIGINAL SPROUT, LLC	 	KAHNALYTICS, INC.
	 	 	 	 	 
	By	 	 	By 	 
	Name: Inga Tritt	 	Name: David Neibert
	Title: Co-CEO, Member	 	Title: President
	 	 	 	 	 
	By	 	 	 	 
	Name: William Pritchett	 	 	 
	Title: Co-CEO , Member	 	 	 

 

    	 	3	 

     

    

 

EXHIBIT B

 

NON-COMPETITION AGREEMENT

 

    	 	Exhibit B	 

     

    

  

NON-COMPETITION AGREEMENT

 

This NON-COMPETITION AGREEMENT (this “Agreement”),
dated as of October __, 2017 (the “Effective Date”), is entered into by and among (i) Inga Tritt (“IT”);
(ii) William Pritchett (“WP”) (IT and WP shall sometimes be collectively referred to herein as the “Non-Competing
Parties”), and (iii) Kahnalytics, Inc., a California corporation and wholly owned subsidiary of Concierge Technologies, Inc.,
a Nevada corporation (collectively, the “Company”). The Company and the Non-Competing Parties may sometimes be referred
to in this Agreement as the “Parties,” or individually as a “Party.”

 

RECITALS:

 

WHEREAS, the Non-Competing
Parties, as the owners of The Original Sprout, LLC (“Original Sprout”), are selling their interests in Original Sprout
to the Company pursuant to that certain Asset Purchase Agreement, of even date herewith (the “Asset Purchase Agreement”);

 

WHEREAS, Original Sprout,
IT, and WP have experience in and specialized in the manufacture and sale of organic, non-toxic, all natural hair care, bath, skin,
and styling products (the “Business”);

 

WHEREAS, WP has confidential
information and know-how imperative to the operation of a business which may compete with the Business and IT has been the face
of Original Sprout since its inception; and the continued use of IT’s name and likeness in promotional materials and other
sales material is an important intangible asset value that Kahnalytics, Inc. is acquiring pursuant to the Asset Purchase Agreement;

 

WHEREAS, in contemplation
of, among other things, the closing under the Asset Purchase Agreement requires the execution of this Agreement providing for the
Non-Competing Parties no longer participating in any business which competes with the Business, unless expressly set forth otherwise
herein;

 

NOW, THEREFORE, in
consideration of the premises, and of the representations, warranties, covenants, and agreements contained herein, and other good
and valuable consideration the receipt and sufficiency of which is hereby acknowledged, and intending to be legally bound, the
Parties agree as follows:

 

		1.	Definitions. In this Agreement, the following terms
(in addition to any capitalized terms defined elsewhere in this Agreement) shall have the meanings specified or referred to in
this Section 1 and shall be equally applicable to both the singular and plural forms:

 

“Affiliate”
shall mean, with respect to any person or entity, (a) any other person or entity that controls, is controlled by, or is under common
control with such person or entity, (b) any officer, director, manager, shareholder or member of such person or entity, and (c)
any parent, sibling, descendant or spouse of such person or entity or of any of the persons or entities referred to in clauses
(a) and (b) or anyone sharing a home with such person or entity or any of the persons or entities referred to in clauses (a) and
(b). For purposes of this definition, the term “control” of a person or entity shall mean the possession, directly
or indirectly, of the power to direct or cause the direction of the management or policies, whether through the ownership of voting
securities, by contract or otherwise.

 

    	 	 	 

     

    

  

“Business”
means the business of manufacturing and selling organic, non-toxic, all natural hair care, bath, skin, cosmetics and styling products.
More specifically, the Business includes the development, manufacture, distribution, production, branding and marketing of natural,
safe and/or vegan products for entire families – babies, kids, teens, and adults, alike – including, but not limited
to,: baby shampoo, baby wash, conditioner, detangler, curl calmer, hair gel, hair balm, baby cream, sunscreen, and hair oil. The
Business shall include any products intended for cleaning, care, rejuvenation, treatment and betterment of hair, skin, and the
general physical wellbeing and appearance of human beings. The term “Business” shall not include the operations of
any businesses as described in Schedule A (“Schedule of Non-Competing Business Operations)”.

 

“Competition,”
“compete” and any terms with correlative meaning shall mean to: directly or indirectly, own any interest in, manage,
control, participate in, invest in, consult with, render services for, operate or in any manner engage in any business that operates
in the Business anywhere in North America, which the Parties stipulate as a reasonable geographic limitation given the Company’s
existing, operational, and potential presence in the Business. Competition includes use of or association with ITs name, image,
likeness, face, voice or other attributes, including but not limited to, the professional reputation and image of IT for any commercial
purpose related to the Business.

 

		2.	Non-Compete Agreement. During the five year period
(the “Restricted Period”) commencing on the Closing of the Asset Purchase Agreement none of the Non-Competing Parties,
nor any of their respective partners, joint venture participants, nor any controlled Affiliate of any of the foregoing will, directly
or indirectly, in any manner (whether on his, her or its own account, or as an owner, operator, manager, consultant, officer,
director, employee, investor, agent or otherwise), anywhere in the United States where the Business and/or Original Sprout has
distributors and/or operations (the “Applicable Area”) – engage directly or indirectly in the Business or any
business that competes with the Business – including the creation, manufacturing, and/or selling of organic, non-toxic,
vegan, all-natural baby/family/adult hair care, bath, skin, and/or styling products – or own any interest in, manage, control,
participate in (whether as an owner, operator, manager, consultant, officer, director, employee, investor, agent, representative
or otherwise), or consult with or render services for any person or entity that is engaged in the Business or in any activity
that competes directly or indirectly with the Business; provided however, that ownership, for passive investment purposes not
intended to circumvent this Agreement, of less than 5% of the outstanding stock of any publicly traded corporation, and, shall
not be deemed to be engaging in the Business solely by reason of such ownership.

 

		a.	Right of First Refusal. Upon the Effective Date
through the termination of this Agreement, if Non-Competing Parties elect to engage in any business operations or product development
which may Compete with the Company and the Business including any operations which shall use the name and likeness of IT, (i)
the Non-Competing Parties shall offer the Company, by written notice, delivered with confirmation of receipt, a right of first
refusal with respect to the development of such business, (the “Right of First Refusal”) and the Company shall have
30 days after receipt of such offer to exercise the Right of First Refusal; and, (ii) If the Company expressly elects not to exercise
the Right of First Refusal, the Non-Competing Parties may proceed with the development of such business.

 

    	 	 	 

     

    

  

		3.	Consent to use Name and Likeness for New Products.
If the Company develops any new products, which were not acquired in the Asset Purchase Agreement and which were developed after
the Closing thereof, the Company shall obtain the written consent of IT prior to utilizing ITs name, image, likeness, face, voice
or other attributes, including but not limited to, the professional reputation and image of IT on any new products. The Company
is free to use IT’s name and likeness on products that were acquired pursuant to the Asset Purchase Agreement without any
further consent.

 

		4.	Acknowledgment. The Non-Competing Parties hereby
acknowledge that the enforcement of the provisions of this Agreement may potentially interfere with their ability to pursue business
opportunities, including, without limitation, the expansion or development of a business similar to the Business or which shall
produce or sell any competing products with that of the Business. The Non-Competing Parties recognize and agree that the enforcement
of this Agreement is necessary to ensure the sale of Non-Competing Parties’ respective interests in the Original Sprout
assets, including without limitation related trade secrets, goodwill, technology, formulas, client/vendor/distributor lists and
processes. Each of the Non-Competing Parties hereby acknowledges that he, she, or it has been advised to consult with an attorney
before executing this Agreement and that he, she or it has done so or, after careful reading and consideration, has chosen not
to do so.

 

		5.	Enforcement. Notwithstanding Section 10 of this
Agreement (Severability), if at the time of enforcement of Section 2 of this Agreement or any other time, a court or mediator
holds that the restrictions in this Agreement are unreasonable or to any extent invalid or overbroad under circumstances then
existing or otherwise, the Parties agree that the maximum period, scope or geographical area reasonable, valid or enforceable
under such circumstances or otherwise shall be substituted for the stated period, scope or area, and the covenants herein should
be interpreted and enforced to the maximum extent that such court or mediator deems reasonable, valid or enforceable. The Parties
hereto agree that money damages would not be an adequate remedy for any breach of this Agreement, and any breach of the terms
of Section 2 would result in irreparable injury and damage to the Company for which there would be no adequate remedy at law.
Therefore, in the event of a breach or threatened breach of this Agreement, the Company or, as applicable, its respective successors
or assigns, in addition to other rights and remedies existing in their favor, shall be entitled to specific performance and/or
immediate injunctive or other equitable relief from a court of competent jurisdiction in order to enforce, or prevent any violations
of, the provisions hereof (without posting a bond or other security), without having to prove damages, in addition to any other
remedies to which the Company may be entitled at law or in equity. In addition, in the event of an alleged breach or violation
by a Non-Competing Party of Section 2 of this Agreement, the Restricted Period shall be tolled until such breach or violation
has been duly cured. The terms of this Section shall not prevent the Company from pursuing any other available remedies for any
breach or threatened breach hereof, including but not limited to the recovery of damages from the Non-Competing Parties.

 

    	 	 	 

     

    

 

		6.	Governing Law; Dispute Resolution.

 

(a)          Governing
Law. This Agreement shall be construed in accordance with, and governed in all respects by, the internal laws of the State
of California without giving effect to principles of conflicts of laws.

 

(b)          Mediation.
Any dispute, controversy or claim arising out of or relating to this Agreement shall, at first instance, be referred to a mediator
for resolution with the mediation to take place in Orange County, California. The Parties shall agree upon a mediator who has experience
with business transactions. The Parties shall mutually agree upon a mediator within fourteen (14) days and schedule such mediation.
The Parties involved shall equally pay their respective portion of the costs of mediation. Notwithstanding the foregoing, any party
may seek equitable relief by court action before or after instituting mediation, including, without limitation, seeking and obtaining
temporary restraining orders, injunctions or other provisional or ancillary remedies, and the initiation and/or maintenance of
any such action shall not constitute a waiver of the right to mediate any controversy or claim.

 

		7.	Waiver of Jury Trial. Each Party hereby irrevocably
and unconditionally waives any right it may have to a trial by jury.

 

		8.	Notices. Any notices required or permitted to be
given hereunder shall be given in writing and shall be delivered (1) in person, (2) by certified mail, postage prepaid, return
receipt requested, (3) by electronic mail, or (4) by a commercial overnight courier that guarantees next day delivery and provides
a receipt, and such notices shall be addressed as follows, or to such other address as either Party may from time to time specify
in writing to the other Party consistent with these notice provisions. All notices shall be effective on the date of delivery
to the recipient.

 

	If to Company:	
        Kahnalytics, Inc.

        Attn: David Neibert

        29115 Valley Center Rd., K-206

        Valley Center, CA 92082  USA

        Tel: 866-800-2978, Ext. 3

        Facsimile: 888-312-0124

        E-mail: dneibert@conciergetechnology.net

         

	
        with a copy to:

         
	
        Horwitz + Armstrong, A Professional Law Corporation

        Attn: Lawrence Horwitz, Esq.

        14 Orchard, Suite 200

        Lake Forest, CA 92630

        E-mail: lhorwitz@horwitzarmstrong.com

         

	
        If to Inga Tritt:

         
	
        Inga Tritt

        3221 Beach Club Rd.

        Carpinteria, CA 93013

Tel: 805-610-1557

E-mail: inga.tritt67@gmail.com 

 

    	 	 	 

     

    

  

	If to William Pritchett:	
        William Pritchett

        1103 Creekside Way, Unit E

        Ojai, CA 93023

        Tel: 805-451-7663

        E-mail: willprt@cs.com

 

		9.	Authority. Each of the Parties represents and warrants
that he, she or it, as applicable, is competent to enter into this Agreement and has the full right, power and authority to enter
into and perform the obligations under this Agreement, without the need for the consent of any other person or entity (including
a spouse, if any, of such Party).

 

		10.	Successors and Assigns; Amendments. This Agreement
shall be binding upon and inure to the benefit of the Company and its successors and assigns. None of the Non-Competing Parties
may assign any of his, her, or its respective rights or obligations under this Agreement without the prior written consent of
the Company. This Agreement may be amended only by written agreement executed by all Parties to this Agreement.

 

		11.	Severability. The provisions of this Agreement shall
be deemed severable and the invalidity or unenforceability of any provision shall not affect the validity or enforceability or
the other provisions hereof. Further subject to Section 4 hereof, if any provision of this Agreement, or the application thereof,
is invalid or unenforceable, (a) a suitable and equitable provision shall be substitute therefore in order to carry out, so far
as may be valid and enforceable, the intent and purpose of such invalid or unenforceable provision; and (b) the remainder of this
Agreement shall not be affected by such invalidity or unenforceability.

 

		12.	Waivers. No waiver by any Party of any covenant,
term, condition, or agreement contained herein shall be deemed or construed as a waiver of any other covenant, term, condition,
or agreement, nor shall a waiver of any breach hereof be deemed to constitute a waiver of any subsequent breach, whether of the
same or of a different provision in this Agreement.

 

		13.	Counterparts. This Agreement may be executed in
any number of counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the
same instrument. This Agreement may be executed with electronic, facsimile, or e-mailed signatures. Such signatures shall be deemed
valid for all purposes as if they were signed by hand.

 

		14.	Headings. The captions and headings contained herein
are solely for convenience of reference and shall not affect in any way the meaning or interpretation of this Agreement.

 

		15.	Entire Agreement. This Agreement, together with
the recitals hereto, which are hereby incorporated in and an integral part of this Agreement, represents the entire agreement
among the Parties relating to the subject matter hereof, superseding any and all contemporaneous and prior written or oral agreements
and understandings with respect hereto (other than, for avoidance of doubt, the Asset Purchase Agreement).

 

[Signature Page To Follow]

 

    	 	 	 

     

    

 

IN WITNESS WHEREOF, the Parties have
entered into this Agreement as of the date and year first written above.

 

	NON-COMPETING PARTIES 	 
	 	 
	 	 
	Inga Tritt	 
	 	 
	 	 
	William Pritchett	 
	 	 
	COMPANY	 
	 	 
	Kahnalytics, Inc.	 
	 	 
	 	 
	By: David Neibert	 
	Its: Chief Executive Officer	 

 

    	 	Exhibit B	 

     

    

  

SCHEDULE A

 

SCHEDULE OF NON-COMPETING BUSINESSES
OPERATIONS

 

	Business Name	 	Description of Business Operations
	
         

        Can be any name other than the Original
        Sprout
	 	
         

        Engaging in the sale of cosmetics, hair, skin, products, and
        clothing (caps & tees), so long as the Company has been offered and has expressly elected not to exercise its Right of First
        Refusal under Section 2(a) of the Agreement.

         

        Name, Image, and Likeness of IT may not be used on any products
        for any promotional or commercial purpose, during the Restricted Period, without the written consent of the Company, which consent
        shall not be unreasonably withheld, except that:

        1) IT may state on product “created by Inga Tritt; stylist
        athlete alchemist” or other similar statements;

        2) IT may have a Biography on the business website (such bio
        shall be subject to written consent of Buyer during the term of this Agreement to ensure the biography does not over-emphasize
        IT’s involvement with Original Sprout); and

        3) IT may personally promote her products through media.

         

        Restrictions: 

         

        No products may use the same or substantially similar formulas
        as Original Sprout.

         

        Neither IT nor WP may use any reference to or promote any association
        with “Original Sprout” in or for any future business or products which may compete directly or indirectly with Original
        Sprout in the marketplace.

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00275-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00275-of-00352.parquet"}]]