Document:

Document

Exhibit 10.14
MALIBU BOATS, INC.
DIRECTORS’ COMPENSATION POLICY
(As Amended June 21, 2022)
Directors of Malibu Boats, Inc., a Delaware corporation (the “Company”), who are not employed by the Company or one of its subsidiaries (“Outside Directors”) are entitled to the compensation set forth below for their service as a member of the Board of Directors (the “Board”) of the Company. The Board has the right to amend this policy from time to time.
						
	Cash Compensation	
	Annual Retainer	$65,000
	Board Chairperson Retainer	$40,000
	Additional Committee Chair Retainers	
	Audit Committee Chair	$20,000
	Compensation Committee Chair	$15,000
	Nominating and Governance Committee Chair	$10,000
	Additional Non-Chair Committee Member Retainers	
	Audit Committee Member	$5,000
	Compensation Committee Member	$5,000
	Nominating and Governance Committee Member	$2,000
	Equity Compensation	
	Annual Equity Award	$110,000

Cash Compensation
Each Outside Director will be entitled to an annual cash retainer while serving on the Board in the amount set forth above (the “Annual Retainer”). An Outside Director who serves as the Chairperson of the Board or the Chair of the Audit Committee, the Compensation Committee or the Nominating and Governance Committee of the Board will be entitled to an additional annual cash retainer while serving in that position in the applicable amount set forth above (an “Additional Board and Committee Chair Retainer”). An Outside Director who serves as a member of the Audit Committee, the Compensation Committee or the Nominating and Governance Committee of the Board and is not the Chair of such committee will be entitled to an additional annual cash retainer while serving in that position in the applicable amount set forth above (together with Additional Board and Committee Chair Retainers, the “Additional Board and Committee Retainers”). 
The amounts of the Annual Retainer and Additional Board and Committee Retainers reflected above are expressed as annualized amounts. These retainers will be paid on a quarterly basis, at the end of each quarter in arrears, and will be pro-rated if an Outside Director serves (or serves in the corresponding position, as the case may be) for only a portion of the quarter (with the proration based on the number of calendar days in the quarter that the director served as an Outside Director or held the particular position, as the case may be, divided by 365).  The Annual Retainer and Additional Board and Committee Retainers set forth above are effective beginning with the quarter ending September 30, 2021.
Equity Awards
Annual Equity Awards for Continuing Board Members
On the date of each annual meeting of the Company’s stockholders, each Outside Director then in office following the meeting will automatically be granted an annual equity award consisting of either fully vested shares of the Company’s common stock or fully vested stock units payable on a deferred basis, as determined in accordance with each Outside Director’s election made in accordance with the Company’s Outside Director Stock-For-Fees Program below (and if no such election is made, the Outside Director’s award will consist of fully vested shares of the Company’s common stock). The number of shares of common stock or stock units granted as each Outside Director’s annual equity award shall be determined by dividing (1) the Annual Equity Award grant value set forth above by (2) the per-share closing price of the Company’s common stock on the date of such annual meeting, with the result rounded down to the nearest whole share. In the event that more than one annual meeting of the Company’s stockholders occurs during a given fiscal year, annual equity awards will be made only in connection with the first such meeting to occur in that year.  The annual equity awards set forth above will become effective beginning on the date of the 2021 annual meeting of the Company’s stockholders.
For each new Outside Director appointed or elected to the Board other than on the date of an annual meeting of the Company’s stockholders, on the date that the new Outside Director first becomes a member of the Board, the new Outside Director will automatically be entitled to a pro-rata portion of the annual equity award (a “Pro-Rata Annual Award”) determined by dividing (1) a pro-rata portion of the Annual Equity Award grant value set forth above by (2) the per-share closing price of the Company’s common stock on the date the new Outside Director first became a member of the Board. The 

pro-rata portion of the Annual Equity Award grant value for purposes of a Pro-Rata Annual Award will equal the Annual Equity Award grant value set forth above multiplied by a fraction (not greater than one), the numerator of which is 12 minus the number of whole months that as of the particular grant date had elapsed since the Company’s last annual meeting of stockholders at which annual equity awards were granted by the Company to Outside Directors, and the denominator of which is 12, with the result to be rounded down to the nearest whole share. Each Pro-Rata Annual Award will be fully vested on the grant date, and will consist of either fully vested shares of the Company’s common stock or fully vested stock units payable on a deferred basis, as determined in accordance with each Outside Director’s election made in accordance with the Company’s Outside Director Stock-For-Fees Program below (and if no such election is made, the Outside Director’s Pro-Rata Annual Award will consist of fully vested shares of the Company’s common stock).
Provisions Applicable to All Outside Director Equity Awards
Each equity award will be made under and subject to the terms and conditions of the Company’s Long-Term Incentive Plan (the “Plan”) or any successor equity compensation plan approved by the Company’s stockholders and in effect at the time of grant.
Expense Reimbursement
All Outside Directors will be entitled to reimbursement from the Company for their reasonable travel (including airfare and ground transportation), lodging and meal expenses incident to meetings of the Board or committees thereof or in connection with other Board related business.
Elective Grants of Equity Awards
The Company has established the following Outside Director Stock-For-Fees Program (the “Program”) effective as of February 6, 2014 (the first business day following the date of the closing of the Company’s initial public offering) and as amended effective June 21, 2022. Pursuant to the Program, Outside Directors may elect that their Annual Retainer and Additional Board and Committee Retainers be converted into either (1) shares of the Company’s common stock or (2) rights to receive an award of stock units under the Plan that will be paid on a deferred basis. Pursuant to the Program, Outside Directors may also elect to receive any annual equity award described above in stock units under the Plan that will be paid on a deferred basis.
The Program is an Appendix to the Plan, and any shares of common stock issued under the Program under the Plan shall be charged against the applicable share limits of the Plan. Except as otherwise expressly provided herein, the provisions of the Plan shall govern all stock units credited and shares issued pursuant to the Program.
An Outside Director may elect to exchange the right to receive payment of all or a portion of his or her Annual Retainer and Additional Board and Committee Retainers payable with respect to a particular calendar year for the right to receive either a grant of (1) shares of common stock or (2) stock units under the Program in lieu of such retainers (or portion thereof, as applicable). An Outside Director may also elect to receive all or a portion of his or her annual equity award described above in stock units under the Plan that will be paid on a deferred basis pursuant to the terms of the Program. Such election shall be made by completing the election form as the Board may prescribe from time to time (an “ Election Form “), and filing such completed form with the Company by the deadline determined below. Once an Election Form is validly filed with the Company, it shall automatically continue in effect for future calendar years unless the Outside Director changes or revokes his or her Election Form prior to the applicable deadline under Section 409A of the Code.
With respect to any calendar year, except as otherwise provided below for new directors and for annual equity awards that are paid on a fiscal year basis, an Outside Director may file an Election Form with the Company on or before December 31 immediately preceding the start of such calendar year or any earlier deadline that may be established with respect to the particular year. Such Election Form shall become irrevocable as of such December 31 and shall be effective with respect to the Annual Retainer and Additional Board and Committee Retainers for the calendar year commencing on the January 1 that next follows such December 31. Notwithstanding the foregoing, an Outside Director shall be permitted to elect to receive all or a portion of his or her annual equity award described above in deferred stock units if an Outside Director files an Election Form not later than the close of the Company’s fiscal year immediately preceding the Company’s fiscal year for which and in which such annual equity award is granted. 
Notwithstanding anything to the contrary in the Program, to the extent permissible under Section 409A of the Code, any individual who first becomes an Outside Director after the date hereof and during the first three (3) quarters of a particular calendar year may file an Election Form with the Company no later than thirty (30) days after such individual first becomes an Outside Director. Such Election Form shall be irrevocable and shall be effective with respect to the director’s Annual Retainer and Additional Board and Committee Retainers paid for services rendered during the calendar year in which the Election Form is filed for any quarter in such calendar year that commences after such Election Form is filed with the Company. Such Election Form may also defer payment of the portion of the Outside Director’s annual equity award attributable to services performed after the date the Election Form is filed.
The Annual Retainer and Additional Board and Committee Retainers are paid by the Company on a quarterly basis. Upon the last business day of each quarter of a calendar year for which an Outside Director has made a valid and timely election to receive either shares of common stock or stock units under the Program in lieu of all or a portion of his or her Annual Retainer and Additional Board and Committee Retainers for that quarter (each, a “Crediting Date”), the Company shall automatically grant the Outside Director a number of shares of common stock or stock units, as applicable, determined by dividing (i) the amount of the Exchanged Retainer, by (ii) the per-share closing price of the Company’s common stock on that Crediting Date, with the result rounded down to the nearest whole share or unit. The “Exchanged Retainer” is that portion of the Outside Director’s Annual Retainer and Additional Board and Committee Retainers that would have otherwise been paid in cash to the Outside Director for his or her service on the Board during that quarter but for his or her election pursuant to the Program. Any fractional amount less than the price of a share of the common stock as of such Crediting Date shall be paid in cash.

Stock units shall be used solely as a device for the determination of the number of shares of common stock eventually to be delivered to an Outside Director upon payment of such stock units. Stock units shall not be treated as property or as a trust fund of any kind. Stock units granted to an Outside Director pursuant to the Program shall be credited to an unfunded bookkeeping account maintained by the Company on behalf of each Outside Director to which the Outside Director’s stock units shall be credited. Not less frequently than annually, the Company shall provide each Outside Director with a current statement of his or her account reflecting all credits of stock units as of such date.
An Outside Director shall have no rights as a stockholder of the Company, no dividend rights (except as expressly provided below with respect to dividend equivalent rights) and no voting rights with respect to stock units credited under the Program and any shares of common stock underlying or issuable in respect of such stock units until such shares are actually issued to and held of record by the Outside Director. No assets have been secured or set aside by the Company with respect to the stock units and, if amounts become payable to an Outside Director pursuant to the Program, the Outside Director’s rights with respect to such amounts shall be no greater than the rights of any general unsecured creditor of the Company.
As of any date that the Company pays an ordinary cash dividend on its Common Stock, the Company shall credit the Outside Director’s account with an additional number of stock units equal to (a) the amount of the ordinary cash dividend paid by the Company on a single share of common stock on that date, multiplied by (b) the number of stock units credited to the Outside Director’s account as of the record date for such ordinary cash dividend (including any stock units previously credited as dividend equivalents and with such total number subject to adjustment pursuant to Section 3.3 of the Plan), divided by (c) the closing price of a share of common stock on that date. No such payment shall be made with respect to any stock units which, as of the record date for such ordinary cash dividend, have been paid pursuant to the payment terms below.
Any stock units credited to an Outside Director’s account under the Program shall be fully vested at all times, and shall be payable in an equivalent number of shares of common stock (either by delivering one or more certificates, registered in the name of the Outside Director, for such shares or by entering such shares in the name of the Outside Director in book-entry form, as determined by the Company in its discretion) upon the first to occur of (A) the date of the Outside Director’s Separation from Service, (B) the occurrence of a change in control under the Plan that constitutes a “change in the ownership,” a “change in the effective control,” or a “change in the ownership of a substantial portion of the assets” of the Company within the meaning of the Treasury Regulations promulgated under Section 409A of the Code or (C) an in-service distribution date elected by the Outside Director in his or her Election Form (each a “Payment Event”). For each Payment Event, Outside Directors may elect whether amounts becoming payable shall be paid in a lump-sum within 30 days following the Payment Event, or in annual installments over a period of 5 years or 10 years, with the first installment payable within 30 days following the Payment Event and subsequent installments payable within 30 days following each applicable subsequent annual anniversary of the Payment Event.
As used herein, a “Separation from Service” occurs when an Outside Director dies, retires, or otherwise has a termination of service with the Company that constitutes a “separation from service” within the meaning of Treasury Regulation Section 1.409A-1(h), without regard to the optional alternative definitions available thereunder. Notwithstanding the foregoing, in the event the Outside Director is a “specified employee” (within the meaning of Treasury Regulation Section 1.409A-1(i)) on the date of the Outside Director’s Separation from Service, the Outside Director shall not be entitled to payment of any stock units credited under the Program that would otherwise be paid in connection with his or her Separation from Service until the earlier of (A) the date which is six (6) months after his or her Separation from Service with the Company for any reason other than death, or (ii) the date of the Outside Director’s death (and, in either case, payment will be made within thirty (30) days following that event); provided that this six-month delay shall apply only to the extent such delay in payment is required to comply with, and avoid the imputation of any tax, penalty or interest under, Section 409A of the Code.
Shares issued under the Program and stock units credited under the Program shall be subject to the terms of the Plan. Shares of common stock issued with respect to the Program may be issued under the Plan or may be issued under any other authority of the Company. Notwithstanding the foregoing provisions, in the event that the Company is not able to issue shares of Common Stock in payment of any stock units credited under the Program, such stock units shall be settled by payment in cash equal to the applicable number of stock units not eligible to be paid in shares, multiplied by the fair market value of a share of common stock on the date the stock units are paid.
Notwithstanding anything contained in the Program or in the Plan to the contrary, prior to the time the stock units are paid, neither the stock units nor any interest therein or amount payable in respect thereof may be sold, assigned, transferred, pledged or otherwise disposed of, alienated or encumbered, either voluntarily or involuntarily, other than by will or the laws of descent and distribution. The Program, including any Election Forms filed hereunder, shall be construed and interpreted to comply with Section 409A of the Code.Exhibit 10.1

 

 

 

ASSET
PURCHASE AGREEMENT

This
Asset Purchase Agreement (this “Agreement”), dated as of June 1, 2022, is entered into between Lifeloc Technologies,
Inc., a Colorado corporation (“Seller”) and Probation Tracker, Inc., a Colorado corporation (“Buyer”).

RECITALS

WHEREAS,
Seller wishes to sell to Buyer, and Buyer wishes to purchase from Seller, the rights of Seller to the Purchased Assets (as defined herein),
subject to the terms and conditions set forth herein.

NOW,
THEREFORE, in consideration of the mutual covenants and agreements hereinafter set forth and for other good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:

ARTICLE
I

Purchase and Sale

Section 1.01 Purchase and Sale of Assets. Subject
to the terms and conditions set forth herein, Seller shall sell, assign, transfer, convey and deliver to Buyer, and Buyer shall purchase
from Seller, all of Seller’s right, title and interest in the assets set forth on Schedule A attached hereto (the “Purchased
Assets”), free and clear of any mortgage, pledge, lien, charge, security interest, claim or other encumbrance (“Encumbrance”).

Section 1.02 No Liabilities. Buyer
shall not assume any liabilities or obligations of Seller of any kind, whether known or unknown, contingent, matured or otherwise, whether
currently existing or hereinafter created.

Section 1.03 Purchase Price. The
aggregate purchase price for the Purchased Assets shall be $1,250,000 (the “Purchase Price”). The Buyer shall pay
the Purchase Price to Seller at the Closing (as defined herein) in the form of 1,250,000 shares of the Buyer’s Redeemable Preferred
Stock (as defined in Section 5.04 below).

ARTICLE
II

Closing

Section 2.01 Closing. Subject
to the terms and conditions of this Agreement, the consummation of the transactions contemplated by this Agreement (the “Closing”)
shall take place through virtual exchange of executed documents after all of the conditions to Closing set forth in ARTICLE VI are either
satisfied or waived (other than conditions which, by their nature, are to be satisfied on the Closing Date), or at such other time, date
or place as Seller and Buyer may mutually agree upon in writing. The date on which the Closing is to occur is herein referred to as the
“Closing Date”.

Section 2.02 Closing Deliverables. 

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

(i)
a bill of sale in form and substance satisfactory to Buyer (the “Bill of Sale”) and duly executed by Seller, transferring
the Purchased Assets to Buyer;

(ii)
assignments in form and substance satisfactory to Buyer (the “Intellectual Property Assignments” and, together with
the Bill of Sale, the “Transaction Documents”) and duly executed by Seller, transferring all of Seller’s right,
title and interest in and to the Purchased IP (as defined herein) to Buyer; and

    	 

    	 

    

(iii)
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 a Redeemable Preferred Stock Certificate representing full payment of the Purchase Price
and the Transaction Documents duly executed by Buyer.

ARTICLE
III

Representations and warranties of seller

Seller
represents and warrants to Buyer that the statements contained in this ARTICLE III are true and correct as of the date hereof. For purposes
of this ARTICLE III, “Seller’s knowledge,” “knowledge of Seller” and any similar phrases shall mean the
actual or constructive knowledge of any director or officer of Seller, after due inquiry.

Section 3.01 Organization and Authority of Seller; Enforceability. Seller
is a corporation duly organized, validly existing and in good standing under the laws of the state of Colorado. Seller has full corporate
power and authority to enter into this Agreement and the documents to be delivered hereunder, to carry out its obligations hereunder
and to consummate the transactions contemplated hereby. The execution, delivery and performance by Seller of this Agreement and the documents
to be delivered hereunder and the consummation of the transactions contemplated hereby have been duly authorized by all requisite corporate
action on the part of Seller. This Agreement and the documents to be delivered hereunder have been duly executed and delivered by Seller,
and (assuming due authorization, execution and delivery by Buyer) this Agreement and the documents to be delivered hereunder constitute
legal, valid and binding obligations of Seller, enforceable against Seller in accordance with their respective terms.

Section 3.02 No Conflicts; Consents. The
execution, delivery and performance by Seller of this Agreement and the documents to be delivered hereunder, and the consummation of
the transactions contemplated hereby, do not and will not: (a) violate or conflict with the certificate of incorporation, by-laws or
other organizational documents of Seller; (b) violate or conflict with any judgment, order, decree, statute, law, ordinance, rule or
regulation applicable to Seller or the Purchased Assets; (c) conflict with, or result in (with or without notice or lapse of time or
both) any violation of, or default under, or give rise to a right of termination, acceleration or modification of any obligation or loss
of any benefit under any contract or other instrument to which Seller is a party or to which any of the Purchased Assets are subject;
or (d) result in the creation or imposition of any Encumbrance on the Purchased Assets. No consent, approval, waiver or authorization
is required to be obtained by Seller from any person or entity (including any governmental authority) in connection with the execution,
delivery and performance by Seller of this Agreement and the consummation of the transactions contemplated hereby.

Section 3.03 Title to Purchased Assets. Seller
owns and has good title to the Purchased Assets, free and clear of Encumbrances.

Section 3.04 Intellectual Property. 

(a)
“Intellectual Property” means any and all of the following in any jurisdiction throughout the world: (i) trademarks
and service marks, including all applications and registrations and the goodwill connected with the use of and symbolized by the foregoing;
(ii) copyrights, including all applications and registrations related to the foregoing; (iii) trade secrets and confidential know-how;
(iv) patents and patent applications; (v) websites and internet domain name registrations; and (vi) other intellectual property and related
proprietary rights, interests and protections (including all rights to sue and recover and retain damages, costs and attorneys’
fees for past, present and future infringement and any other rights relating to any of the foregoing).

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(b)
Seller’s prior and current use of the Purchased IP has not and does not infringe, violate, dilute or misappropriate the Intellectual
Property of any person or entity and there are no claims pending or threatened by any person or entity with respect to the ownership,
validity, enforceability, effectiveness or use of the Purchased IP. No person or entity is infringing, misappropriating, diluting or
otherwise violating any of the Purchased IP, and neither Seller nor any affiliate of Seller has made or asserted any claim, demand or
notice against any person or entity alleging any such infringement, misappropriation, dilution or other violation.

(c)
Schedule B lists all Intellectual Property included in the Purchased Assets (“Purchased IP”). Seller owns or
has adequate, valid and enforceable rights to use all the Purchased IP, free and clear of all Encumbrances. Seller is not bound by any
outstanding judgment, injunction, order or decree restricting the use of the Purchased IP, or restricting the licensing thereof to any
person or entity. With respect to the registered Intellectual Property listed on Schedule B, (i) all such Intellectual Property
is valid, subsisting and in full force and effect; and (ii) Seller has paid all maintenance fees and made all filings required to maintain
Seller’s ownership thereof. For all such registered Intellectual Property, Schedule B lists (A) the jurisdiction where the
application or registration is located; (B) the application or registration number; and (C) the application or registration date.

Section 3.05 Compliance With Laws Seller
has complied, and is now complying, with all applicable federal, state and local laws and regulations applicable to ownership and use
of the Purchased Assets.

Section 3.06 Legal Proceedings. There
is no claim, action, suit, proceeding or governmental investigation (“Action”) of any nature pending or, to Seller’s
knowledge, threatened against or by Seller (a) relating to or affecting the Purchased Assets; or (b) that challenges or seeks to prevent,
enjoin or otherwise delay the transactions contemplated by this Agreement. No event has occurred or circumstances exist that may give
rise to, or serve as a basis for, any such Action.

ARTICLE
IV

Representations and warranties of buyer

Buyer
represents and warrants to Seller that the statements contained in this ARTICLE IV are true and correct as of the date hereof. For purposes
of this ARTICLE IV, “Buyer’s knowledge,” “knowledge of Buyer” and any similar phrases shall mean the actual
or constructive knowledge of any director or officer of Buyer, after due inquiry.

Section 4.01 Organization and Authority of Buyer; Enforceability. Buyer
is a corporation duly organized, validly existing and in good standing under the laws of the state of Colorado. Buyer has full corporate
power and authority to enter into this Agreement and the documents to be delivered hereunder, to carry out its obligations hereunder
and to consummate the transactions contemplated hereby. The execution, delivery and performance by Buyer of this Agreement and the documents
to be delivered hereunder and the consummation of the transactions contemplated hereby have been duly authorized by all requisite corporate
action on the part of Buyer. This Agreement and the documents to be delivered hereunder have been duly executed and delivered by Buyer,
and (assuming due authorization, execution and delivery by Seller) this Agreement and the documents to be delivered hereunder constitute
legal, valid and binding obligations of Buyer enforceable against Buyer in accordance with their respective terms.

Section 4.02 No Conflicts; Consents. The
execution, delivery and performance by Buyer of this Agreement and the documents to be delivered hereunder, and the consummation of the
transactions contemplated hereby, do not and will not: (a) violate or conflict with the certificate of incorporation, by-laws or other
organizational documents of Buyer; or (b) violate or conflict with any judgment, order, decree, statute, law, ordinance, rule or regulation
applicable to Buyer. No consent, approval, waiver or authorization is required to be obtained by Buyer from any person or entity (including
any governmental authority) in connection with the execution, delivery and performance by Buyer of this Agreement and the consummation
of the transactions contemplated hereby.

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Section 4.03 Legal Proceedings. There
is no Action of any nature pending or, to Buyer’s knowledge, threatened against or by Buyer that challenges or seeks to prevent,
enjoin or otherwise delay the transactions contemplated by this Agreement. No event has occurred or circumstances exist that may give
rise to, or serve as a basis for, any such Action.

ARTICLE
V

PRE-Closing Covenants

Section 5.01 Interim License.

(a)
Subject to the terms and conditions of this Agreement, the Seller hereby grants to the Buyer during the period between the effective
date hereof and the earlier of (a) the Closing or (b) termination of this Agreement pursuant to ARTICLE VIII an exclusive, royalty-free,
non-transferable, non-sublicensable license to use the Purchased IP and the other Purchased Assets (the “Interim License”),
for the purpose of developing up to ten (10) working prototypes demonstrating the viability of building an inconspicuous, portable, hand-held
device that can reliably and in a manner superior to the performance and features of leading market competitors: (i) determine the user’s
whereabouts, (ii) determine whether the user is adhering to the condition of the user’s release which prohibits the use of alcohol
by notifying the user on a random basis that the user is to blow an alcohol test, (iii) determine whether the user is in fact the correct
user, and (iv) record the results and store them for later retrieval by the user’s supervisor (“Proof of Concept”).

(b)
As between the parties, Seller owns any improvement,
enhancement, or other modification of or derivative work based on any of the Purchased IP made by or on behalf of Buyer (each, a “Modification”).
Buyer shall immediately notify Seller of any Modification made by or on behalf of Buyer (each, a “Buyer Modification”).
Buyer hereby assigns to Seller all of its right, title, and interest in and to all Buyer Modifications, including all rights to apply
for any patents or other intellectual property registrations with respect to such Buyer Modifications and all enforcement rights and
remedies for past, present, and future infringement thereof and all rights to collect royalties and damages therefor. All patent applications
and applications for registration filed by Seller with respect to any such Buyer Modification and all patents or registrations issuing
therefrom shall automatically be included in the Purchased IP, subject to the license granted to Buyer under Section 5.01(a), and shall
be transferred to Buyer at Closing unless this Agreement is terminated pursuant to ARTICLE VIII. At the request of Seller, Buyer shall
promptly execute and deliver such documents as may be necessary or desirable to effect and perfect the foregoing assignment of rights.

Section 5.02 Development of Proof of Concept. Beginning on the date
hereof and ending on the earlier of the Closing or termination of this Agreement pursuant to ARTICLE VIII, Buyer shall devote its good
faith best efforts (as determined by Buyer in its sole discretion) to such research and development activities as may be required to
achieve Proof of Concept. Once Buyer believes it has achieved Proof of Concept, Buyer shall provide to Seller all materials required
to support Proof of Concept (the “Support Materials”). Proof of Concept shall
not be deemed achieved until affirmatively accepted by Seller at Seller’s sole discretion (“Acceptance of POC”).

Section 5.03 Additional Financing. Promptly but in no event more than
thirty (30) days after receipt by Buyer of Acceptance of POC from Seller, Buyer shall use its commercially reasonable best efforts to
enter into one or more financing transaction in order to raise an aggregate of at least $500,000 in net proceeds to Buyer for commercialization
of the Purchased Assets and general working capital (the “Eligible Financing”).

Section 5.04 Certificate of Designation of Preferred Stock. Prior to
Closing but in no case more than thirty (30) days after consummation of the Eligible Financing, Buyer shall file, with the Secretary
of State of Colorado, a certificate of designation substantially in the form attached hereto as Exhibit A, setting forth the terms of
a class of redeemable preferred stock (the “Redeemable Preferred Stock”).

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ARTICLE
VI

Conditions to closing

Section 6.01 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 III 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 delivered the Transaction Documents duly executed by Seller.

(c)
Seller shall have duly performed and complied in all material respects with all agreements, covenants and conditions required by this
Agreement to be performed or complied with by it prior to or on the Closing, including but not limited to its obligations under the covenants
set forth in ARTICLE V.

Section 6.02 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 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 on Buyer’s ability to consummate the transactions
contemplated hereby.

(b)
Buyer shall have delivered the Transaction Documents duly executed by Buyer.

(c)
Buyer shall have duly performed and complied in all material respects with all agreements, covenants and conditions required by this
Agreement to be performed or complied with by it prior to or on the Closing, including but not limited to its obligations under the covenants
set forth in ARTICLE V.

(d)
Buyer shall have delivered to Seller Proof of Concept reasonably satisfactory to Seller.

(e)
Buyer shall have consummated the Eligible Financing.

(f)
Buyer shall have delivered to Seller the Purchase Price, duly executed counterparts to the Transaction Documents (other than this Agreement)
and such other documents and deliveries set forth in Section 2.02(b).

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ARTICLE
VII

Post-Closing Conditions

Section 7.01 Redemption of Redeemable Preferred Stock. Buyer hereby
agrees and covenants that Buyer shall take all actions, and execute any and all documents and instruments, reasonably required to redeem
the Redeemable Preferred Stock pursuant to the terms thereof, upon any or all of the following events:

(a)
Fifty percent (50%) of the Redeemable Preferred Stock shall be redeemed upon the consummation of one or more capital-raising transactions
by the Buyer from which the Buyer receives aggregate gross proceeds of not less than US$2,000,000; 

(b)
An additional fifty percent (50%) of the Redeemable Preferred Stock (for a total of one hundred percent (100%) in the aggregate) shall
be redeemed upon the consummation of one or more capital-raising transactions by the Buyer from which the Buyer receives aggregate gross
proceeds of not less than US$3,000,000; provided, for the avoidance of doubt, that if the Buyer receives aggregate gross proceeds of
$3,000,000 or more in a single capital-raising transaction, it shall fully redeem all outstanding shares of Redeemable Preferred Stock;
and 

(c)
In any fiscal year following the first year in which the Buyer’s gross revenue is more than $500,000, to the extent there is Redeemable
Preferred Stock that has not yet been redeemed pursuant to Section 7.01(a) or (b) above, Buyer shall redeem an amount of Redeemable Preferred
Stock equal to fifteen percent (15%) of the Buyer’s Pre-Tax Net Income, with such redemption to occur within ninety (90) days after
the end of such fiscal year. For purposes of this Section 7.01(c), “Pre-Tax Net Income” shall mean Buyer’s net
income before provision for taxes.

Section 7.02 Non-Competition; Non-Solicitation.

(a)
For a period of ten (10) years commencing on the Closing Date (the "Restricted Period"), neither Buyer nor Seller shall,
nor shall permit any of its Affiliates to, directly or indirectly, (i) engage in or assist others in engaging in any business activity
that competes directly with the business of the other party (a “Competitive Business Activity”); (ii) have an interest
in any business entity that engages directly or indirectly in a Competitive Business Activity in any capacity, including as a partner,
shareholder, member, employee, principal, agent, trustee or consultant; or (iii) cause, induce or encourage any material actual or prospective
client, customer, supplier or licensor of the other party (including any existing or former client or customer of the other party and
any business entity that becomes a client or customer of the other party after the Closing), or any other business entity that has a
material business relationship with the other party, to terminate or modify any such actual or prospective relationship. Notwithstanding
the foregoing, the parties may own, directly or indirectly, solely as an investment, securities of any company traded on any national
securities exchange if such party does not control, nor is a member of a group which controls, such public company and does not, directly
or indirectly, own 5% or more of any class of securities of such person.

(b)
During the Restricted Period, neither party shall, and nor shall such party permit any of its affiliates to, directly or indirectly,
hire or solicit any person who is employed by the other party, or encourage any such employee to leave such employment or hire any such
employee who has left such employment, except pursuant to a general solicitation which is not directed specifically to any such employees;
provided, that nothing in this Section 7.02 (b) shall prevent Seller or any of its Affiliates from hiring (i) any employee whose employment
has been terminated by Buyer or (ii) after 180 days from the date of termination of employment, any employee whose employment has been
terminated by the employee.

(c)
The parties acknowledge that a breach or threatened
breach of this Section 7.02 would give rise to irreparable harm to the other party, for which monetary damages would not be an adequate
remedy, and hereby agrees that in the event of a breach or a threatened breach by either party of any such obligations, the other party
shall, in addition to any and all other rights and remedies that may be available to it in respect of such breach, be entitled to seek
equitable relief, including a temporary restraining order, an injunction, specific performance and any other relief that may be available
from a court of competent jurisdiction (without any requirement to post bond).

    	5 

    	 

    

Section 7.03 Further Assurances. Following
the Closing, each of the parties hereto shall 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 documents to be delivered hereunder. 

ARTICLE
VIII

Termination

Section 8.01 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 VI and such breach, inaccuracy or failure cannot be cured by Seller within sixty
(60) days from the date from which such written notice is given; or

(ii)
any of the conditions set forth in Section 6.01 or Section 6.02 shall not have been fulfilled by June 1, 2023 (the “Drop Dead
Date”), unless such failure shall be due to the failure of Buyer to perform or comply with any of the covenants, agreements
or conditions hereof to be performed or complied with by it prior to the 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 VI and such breach, inaccuracy or failure cannot be cured by Buyer by the Drop Dead Date;
or

(ii)
any of the conditions set forth in Section 6.02 shall not have been fulfilled by the Drop Dead Date, unless such failure shall be due
to the failure of Seller to perform or comply with any of the covenants, agreements or conditions hereof to be performed or complied
with by it prior to the Closing; or

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

(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.

    	6 

    	 

    

Section 8.02 Effect of Termination. In the
event of the termination of this Agreement in accordance with this Article, 

(a)
this Agreement shall forthwith become void and there shall be no liability on the part of any party hereto except:

(i)
as set forth in this ARTICLE VIII and ARTICLE IX hereof; and

(ii)
that nothing herein shall relieve any party hereto from liability for any intentional breach of any provision hereof; and

(b)
the Interim License shall terminate immediately and Buyer shall return or destroy (at Seller’s option) any Purchased IP and/or
Purchased Assets in Buyer’s possession, including, for the avoidance of doubt, any Modifications.

ARTICLE
IX

MISCELLANEOUS

Section 9.01 Expenses. All
costs and expenses incurred in connection with this Agreement and the transactions contemplated hereby shall be paid by the party incurring
such costs and expenses.

Section 9.02 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 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 9.02):

	If
    to Seller:	Lifeloc
                                            Technologies, Inc.

    12441
    West 49th Ave Unit #4

    Wheat
    Ridge, CO 80033

    E-mail:
    waynew@lifeloc.com

    Attention: Wayne Willkommkomm

	With
    a copy, via email, to:	vdkvdk@aol.com
	If
    to Buyer:	Probation
                                            Tracker, Inc.

    12441
    West 49th Ave Unit #4

    Wheat
    Ridge, CO 80033

    E-mail:
    vdkvdk@aol.com

    Attention:
    Vern D. Kornelsen

	With
    a copy, via email, to:	waynew@lifeloc.com

Section 9.03 Headings. The
headings in this Agreement are for reference only and shall not affect the interpretation of this Agreement.

    	7 

    	 

    

Section 9.04 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.

Section 9.05 Entire Agreement. This
Agreement and the documents to be delivered hereunder constitute the sole and entire agreement of the parties to this Agreement with
respect to the subject matter contained herein, and supersede all prior and contemporaneous 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 the documents to be delivered hereunder, 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.

Section 9.06 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.

Section 9.07 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.

Section 9.08 Amendment and Modification. This
Agreement may only be amended, modified or supplemented by an agreement in writing signed by each party hereto.

Section 9.09 Waiver. 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.

Section 9.10 Governing Law. This
Agreement shall be governed by and construed in accordance with the internal laws of the State of Colorado without giving effect to any
choice or conflict of law provision or rule (whether of the State of Colorado or any other jurisdiction).

Section 9.11 Submission to Jurisdiction. Any
legal suit, action or proceeding arising out of or based upon this Agreement or the transactions contemplated hereby may be instituted
in the federal courts of the United States of America or the courts of the State of Colorado in each case located in the city and county
of Denver, and each party irrevocably submits to the exclusive jurisdiction of such courts in any such suit, action or proceeding.

Section 9.12 Waiver of Jury Trial. Each
party acknowledges and agrees that any controversy which may arise under this Agreement is likely to involve complicated and difficult
issues and, therefore, each such party irrevocably and unconditionally waives any right it may have to a trial by jury in respect of
any legal action arising out of or relating to this Agreement or the transactions contemplated hereby.

Section 9.13 Specific Performance. The
parties agree that irreparable damage would occur if any provision of this Agreement were not performed in accordance with the terms
hereof and that the parties shall be entitled to specific performance of the terms hereof, in addition to any other remedy to which they
are entitled at law or in equity.

    	8 

    	 

    

Section 9.14 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]

 

 

 

    	9 

    	 

    

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.

	 	Lifeloc
                                            Technologies, Inc.

     

	 	By:
                                            /s/ Wayne R. Willkomm

    Name:
    Wayne R. Willkomm, Ph.D.

    Title:
    Chief Executive Officer

     

	 	Probation
                                            Tracker, Inc.

     

	 	By:
                                            /s/ Vern D. Kornelsen

    Name:
    Vern D. Kornelsen

    Title:
    Chief Financial Officer

 

 

    	10

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