Document:

INDEMNIFICATION
AGREEMENT

 

This Indemnification
Agreement (this “Agreement”), dated as of _______, 2014, is made by and between BG Staffing, Inc., a Delaware
corporation (the “Company”), and ______ (the “Indemnitee”), an Agent (as hereinafter defined)
of the Company.

 

RECITALS

 

A.           The
Indemnitee is a ______________ of the Company.

 

B.           The
Company recognizes that competent and experienced persons are reluctant to serve as directors or officers of corporations unless
they are protected by comprehensive liability insurance or indemnification, or both, due to increased exposure to litigation costs
and risks resulting from their service to such corporations, and due to the fact that the exposure frequently bears no reasonable
relationship to the compensation of such directors and officers.

 

C.           The
statutes and judicial decisions regarding the duties of directors and officers are often difficult to apply, ambiguous, or conflicting,
and therefore fail to provide such directors and officers with adequate, reliable knowledge of legal risks to which they are exposed
or information regarding the proper course of action to take.

 

D.           The
Company and the Indemnitee recognize that plaintiffs often seek damages in such large amounts and the costs of litigation may be
so enormous (whether or not the case is meritorious), that the defense and/or settlement of such litigation is often beyond the
personal resources of directors and officers.

 

E.           The
Company believes that it is unfair for its directors and officers to assume the risk of huge judgments and other expenses which
may occur in cases in which the director or officer received no personal profit and in cases where the director or officer was
not culpable.

 

F.           The
Company, after reasonable investigation, has determined that liability insurance coverage presently available to the Company may
be inadequate to cover all possible exposure for which the Indemnitee should be protected. The Company believes that the interests
of the Company and its stockholders would best be served by the indemnification by the Company of the directors and officers of
the Company.

 

G.           Section
145 of the General Corporation Law of the State of Delaware empowers the Company to indemnify its officers, directors, employees
and agents by agreement and to indemnify persons who serve, at the request of the Company, as the directors, officers, managers,
employees or agents of other corporations or enterprises, and expressly provides that the indemnification provided by such statute
is not exclusive.

 

H.           The
Board of Directors of the Company has determined that contractual indemnification and advancement of expenses (intended to be enforceable
irrespective of, among other things, any amendment to the Company’s certificate of incorporation or bylaws, any change in
the composition of the board, or any change in control or business combination transaction relating to the Company) as set forth
herein is not only reasonable and prudent but necessary to promote the best interests of the Company and its stockholders.

 

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I.           The
Company desires and has requested the Indemnitee to serve or continue to serve as a _____________ of the Company free from
undue concern for claims for damages arising out of or related to such services to the Company.

 

J.           The
Indemnitee is willing to continue to serve the Company only on the condition that he or she is furnished the indemnity provided
for herein.

 

AGREEMENT

 

NOW, THEREFORE, in
consideration of the mutual covenants and agreements set forth below and the continued service of the Indemnitee to the Company,
the parties hereto, intending to be legally bound, hereby agree as follows:

 

1.          Definitions.

 

(a.)          Agent.
For purposes of this Agreement, “Agent” of the Company means any person who is or was a director, manager, officer,
employee or other agent of the Company or a subsidiary of the Company; or is or was serving at the request of the Company or a
subsidiary of the Company as a director, manager, officer, employee or agent of another foreign or domestic corporation, partnership,
limited liability company, joint venture, trust or other enterprise; or was a director, officer, manager, employee or agent of
a foreign or domestic corporation which was a predecessor corporation of the Company or a subsidiary of the Company; or was a director,
officer, manager, employee or agent of another foreign or domestic corporation, partnership, limited liability company, joint venture,
trust or other enterprise at the request of, for the convenience of, or to represent the interests of such predecessor corporation.

 

(b.)          Expenses.
For purposes of this Agreement, “Expenses” includes all direct and indirect costs of any type or nature whatsoever
(including, without limitation, reasonable attorneys’ fees and related disbursements, other out-of-pocket costs and reasonable
compensation for time spent by the Indemnitee for which he or she is not otherwise compensated by the Company or any third party,
provided that the rate of compensation and estimated time involved is approved by the Board of Directors, which approval shall
not be unreasonably withheld), actually and reasonably incurred by the Indemnitee in connection with the investigation, defense,
settlement and/or appeal of an action, suit or proceeding or establishing or enforcing a right to indemnification under this Agreement,
Section 145 of the General Corporation Law of the State of Delaware or otherwise, but excluding the amount of any settlement, judgment,
fine or penalty.

 

(c.)          Miscellaneous.
For purposes of this Agreement, “other enterprise” shall include employee benefit plans; references to “fines”
shall include an excise tax assessed with respect to any employee benefit plans; references to “serving at the request of
the Company” shall include any service as a director, officer, manager, employee or agent of the Company which imposes duties
on, or involves services by, such director, officer, manager, employee or agent with respect to an employee benefit plan, its participants,
or beneficiaries; and if the Indemnitee acted in good faith and in a manner the Indemnitee reasonably believed to be in the best
interest of the participants and beneficiaries of an employee benefit plan, the Indemnitee shall be deemed to have acted in a manner
“not opposed to the best interests of the Company” as referred to in this Agreement.

 

(d.)          Subsidiary.
For purposes of this Agreement, “subsidiary” means any foreign or domestic corporation, partnership, limited liability
company, joint venture, trust or other enterprise of which more than fifty percent (50%) of the outstanding voting securities (or
comparable interests) are owned directly or indirectly by the Company, by the Company and one or more other subsidiaries, or by
one or more other subsidiaries.

 

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2.          Indemnity
in Third Party Proceedings. The Company shall indemnify the Indemnitee if the Indemnitee is a party to or threatened to be
made a party to or is a witness in any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative
or investigative (other than an action by or in the right of the Company) by reason of the fact that the Indemnitee is or was an
Agent of the Company, or by reason of any act or inaction by the Indemnitee in any such capacity against any and all Expenses and
liabilities of any type whatsoever (including, but not limited to, settlements, judgments, fines and penalties), actually and reasonably
incurred by the Indemnitee in connection with such action, suit or proceeding if the Indemnitee acted in good faith and in a manner
the Indemnitee reasonably believed to be in or not opposed to the best interests of the Company, and, with respect to any criminal
action or proceeding, had no reasonable cause to believe the Indemnitee’s conduct was unlawful. The termination of any action,
suit or proceeding by judgment, order, settlement, conviction, or upon a plea of nolo contendere or its equivalent, shall not,
of itself, create a presumption that the Indemnitee did not act in good faith and in a manner that the Indemnitee reasonably believed
to be in or not opposed to the best interests of the Company, or, with respect to any criminal action or proceeding, that the Indemnitee
had reasonable cause to believe that the Indemnitee’s conduct was unlawful.

 

3.          Indemnity
in Derivative Action. The Company shall indemnify the Indemnitee if the Indemnitee is a party to or threatened to be made a
party to or a witness in a threatened, pending or completed action or suit by or in the right of the Company to procure a judgment
in its favor by reason of the fact that the Indemnitee is or was an Agent of the Company, or by reason of any action or inaction
by the Indemnitee in any such capacity, against all Expenses actually and reasonably incurred by the Indemnitee in connection with
the defense or settlement of such action or suit if the Indemnitee acted in good faith and in a manner the Indemnitee reasonably
believed to be in or not opposed to the best interests of the Company and its stockholders, except that no indemnification shall
be made in respect of any claim, issue or matter as to which the Indemnitee shall have been finally adjudicated by court order
or judgment to be liable to the Company in the performance of the Indemnitee’s duty to the Company and its stockholders unless
and only to the extent that the court in which such action or suit is or was brought shall determine upon application that, in
view of all the circumstances of the case, the Indemnitee is fairly and reasonably entitled to indemnity for such Expenses which
such court shall deem proper.

 

4.          Indemnification
of Expenses of Successful Party. To the extent that the Indemnitee has been successful on the merits or otherwise in defense
of any action, suit or proceeding referred to in Section 2 or Section 3 or in defense of any claim, issue or matter
therein, the Indemnitee shall be indemnified against Expenses actually and reasonably incurred by the Indemnitee in connection
therewith.

 

5.          Partial
Indemnification. If the Indemnitee is entitled under any provision of this Agreement to indemnification by the Company for
some or a portion of the Expenses, settlements, judgments, fines or penalties actually or reasonably incurred in the investigation,
defense, appeal or settlement of any action, suit or proceeding, but is not entitled, however, to indemnification for the total
amount thereof, the Company shall nevertheless indemnify the Indemnitee for the portion of such Expenses, settlements, judgments,
fines or penalties to which the Indemnitee is entitled.

 

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6.          Advancement
of Expenses. Except as otherwise provided herein, the Company shall advance all Expenses incurred by the Indemnitee in connection
with the investigation, defense, settlement and/or appeal of any action, suit or proceeding referred to in Section 2 or
Section 3 hereof in advance of the final disposition thereof. The Indemnitee hereby undertakes to repay such amounts advanced
only if, and to the extent that, it shall ultimately be determined that the Indemnitee is not entitled to be indemnified by the
Company as authorized by this Agreement or otherwise. The advances to be made hereunder shall be paid by the Company to or on behalf
of the Indemnitee promptly and in any event within thirty (30) days following delivery of a written request therefor by the Indemnitee
to the Company. In connection with any request for advancement of Expenses, Indemnitee shall be required to provide any documentation
or information requested by the Company to substantiate such Expenses to the extent that the provision thereof would not undermine
or otherwise jeopardize attorney–client privilege.

 

7.          Notice
and Other Indemnification Procedures.

 

(a.)          Promptly
after receipt by the Indemnitee of notice of the commencement of or the threat of commencement of any action, suit or proceeding,
the Indemnitee shall, if the Indemnitee believes that indemnification with respect thereto may be sought from the Company under
this Agreement, notify the Company of the commencement or threat of commencement thereof along with a description of the nature
of and relevant facts underlying such threatened or commenced action, suit or proceeding, provided that the failure to provide
such notification shall not diminish the Indemnitee’s indemnification hereunder except to the extent that the Company can
demonstrate that it has actually been prejudiced as a result thereof.

 

(b.)          In
order to obtain indemnification pursuant to this Agreement (except with respect to Expenses advanced pursuant to Section 6
hereof), the Indemnitee shall submit to the Company a written request therefor, including in such request such documentation and
information as is reasonably available to the Indemnitee and is reasonably necessary to determine whether and to what extent the
Indemnitee is entitled to indemnification following the final disposition of the action, suit or proceeding. Any indemnification
requested by the Indemnitee under Section 2 and/or Section 3 hereof shall be made no later than forty-five (45) days
after receipt of such written request of the Indemnitee unless a determination that the Indemnitee has not met the relevant standard
for indemnification set forth in Section 2 and Section 3 hereof is made within such forty-five (45) day period by
(i) a majority of directors that are not parties to the proceeding, even if less than a quorum (or a committee of such directors
designated by majority vote of such directors, even if less than a quorum), or (ii) if there are no such directors or such directors
so direct, independent legal counsel in a written opinion; provided, however, that no such determination as to entitlement of Indemnitee
to indemnification pursuant to this Section 7(b) shall be required to be made prior to the final disposition of any action,
suit or proceeding.

 

(c.)          Notwithstanding
a determination under Section 7(b) that the Indemnitee is not entitled to indemnification with respect to any specific action,
suit or proceeding, the Indemnitee shall have the right to apply to any court of competent jurisdiction for the purpose of enforcing
the Indemnitee’s right to indemnification pursuant to this Agreement. The burden of proving that the indemnification or advances
of Expenses are not appropriate shall be on the Company. Neither the failure of the Company (including its directors or independent
legal counsel) to have made a determination prior to the commencement of such action that indemnification or advances are proper
in the circumstances because the Indemnitee has met the applicable standard of conduct, nor an actual determination by the Company
(including its directors or independent legal counsel) that the Indemnitee has not met such applicable standard of conduct, shall
be a defense to the action or create any presumption that the Indemnitee has or has not met the applicable standard of conduct.
The Company shall indemnify the Indemnitee against all Expenses incurred in connection with any hearing or proceeding under this
Section 7(c) so long as such claims and/or defenses of the Indemnitee were made or asserted in good faith and were not frivolous.

 

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8.          Defense
of Proceedings. In the event the Company shall be obligated to pay the Expenses of any action, suit or proceeding pursuant
to this Agreement, the Company shall be entitled to participate in the defense of such proceeding with counsel of its choosing.
In the alternative, the Company may assume the defense of such action, suit or proceeding, with counsel approved by the Company
and reasonably acceptable to the Indemnitee, upon the delivery to the Indemnitee of written notice of its election to do so. After
delivery of such notice, approval of such counsel by the Company and the retention of such counsel by the Company, the Company
will not be liable to the Indemnitee under this Agreement for any fees of counsel subsequently incurred by the Indemnitee with
respect to the same action, suit or proceeding, provided that: (i) the Indemnitee shall have the right to employ his or her counsel
in such action, suit or proceeding at the Indemnitee’s expense; and (ii) if (a) the employment of counsel by the Indemnitee
has been previously authorized by the Company, (b) the Indemnitee shall have reasonably concluded that there may be a conflict
of interest between the Company and the Indemnitee in the conduct of such defense, or (c) the Company shall not, in fact, have
employed counsel to assume the defense of such proceeding, the fees and expenses of the Indemnitee’s counsel shall be at
the expense of the Company. The Company shall not, without the prior written consent of the Indemnitee, effect any settlement of
any threatened or pending action, suit or proceeding to which the Indemnitee is, or could have been, a party unless such settlement
solely involves the payment of money and includes a complete and unconditional release of the Indemnitee from all liability on
any claims that are the subject matter of such action, suit or proceeding. Neither the Company nor Indemnitee shall unreasonably
withhold its consent to any proposed settlement; provided, however, that the Indemnitee may withhold consent to any settlement
that does not provide a complete and unconditional release of the Indemnitee.

 

9.          Insurance.
The Company may, but is not obligated to, obtain directors’ and officers’ liability insurance (“D&O Insurance”)
with respect to which the Indemnitee is named as an insured. Notwithstanding any other provision of the Agreement, the Company
shall not be obligated to indemnify the Indemnitee for Expenses, judgments, settlements, fines or penalties which have been paid
directly to or on behalf of the Indemnitee by D&O Insurance. If the Company has D&O Insurance in effect at the time the
Company receives from the Indemnitee any notice of the commencement of a proceeding, the Company shall give notice of the commencement
of such proceeding to the insurer in accordance with the procedures set forth in the policy. The Company shall thereafter take
all necessary or desirable action to cause such insurers to pay, to or on behalf of the Indemnitee, all amount payable as a result
of such proceeding in accordance with the terms of such policy.

 

10.         Exceptions.
Any other provision herein to the contrary notwithstanding, the Company shall not be obligated pursuant to the terms of this Agreement:

 

(a.)          Claims
Initiated by Indemnitee. To indemnify or advance funds for Expenses of the Indemnitee with respect to actions, suits or proceedings
or claims initiated or brought voluntarily by the Indemnitee (including against the Company or its directors, officers, employees
or other indemnitees) and not by way of defense, except with respect to proceedings brought to establish or enforce a right to
indemnification under this Agreement or any other statute or law or otherwise as required under Section 145 of the General Corporation
Law of the State of Delaware, but such indemnification or advancement of funds for Expenses may be provided by the Company in specific
cases if the Board of Directors finds it to be appropriate;

 

(b.)          Action
for Indemnification. To indemnify or advance funds for Expenses of the Indemnitee with respect to any action, suit or proceeding
instituted by the Indemnitee to enforce or interpret this Agreement if the material assertions made by the Indemnitee in such action,
suit or proceeding were not made in good faith or are frivolous;

 

(c.)          Unauthorized
Settlements. To indemnify the Indemnitee under this Agreement for any amounts paid or payable in settlement of a proceeding
when such settlement has been effected without the Company’s written consent, provided such consent is not unreasonably withheld;

 

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(d.)          Non-compete
and Non-disclosure. To indemnify or advance funds for Expenses of the Indemnitee in connection with actions, suits or proceedings
or claims involving the enforcement of non-compete and/or non-disclosure agreements or the non-compete and/or non-disclosure provisions
of employment, consulting or similar agreements the Indemnitee may be a party to with the Company, any subsidiary of the Company
or any other applicable foreign or domestic corporation, partnership, limited liability company, joint venture, trust or other
enterprise, if any;

 

(e.)          Claims
Under Section 16(b). To indemnify the Indemnitee with respect to the payment of profits arising from the purchase and sale
by the Indemnitee of securities in violation of Section 16(b) of the Securities Exchange Act of 1934, as amended (the “Exchange
Act”), or any similar successor statute;

 

(f.)          Compensation
Clawbacks. To indemnify the Indemnitee for Indemnitee’s reimbursement to the Company of any bonus or other incentive-based
or equity-based compensation previously received by the Indemnitee or payment of any profits realized by the Indemnitee from the
sale of securities of the Company, as required in each case under the Exchange Act (including any such reimbursements under Section
304 of the Sarbanes-Oxley Act of 2002 in connection with an accounting restatement of the Company or the payment to the Company
of profits arising from the purchase or sale by Indemnitee of securities in violation of Section 306 of the Sarbanes-Oxley Act
of 2002); or

 

(g.)          Indemnification
Prohibited by Law. To indemnify the Indemnitee under this Agreement if such indemnification is prohibited by applicable law.

 

11.         Nonexclusivity.
Subject to Section 13 hereof, the provisions for indemnification and advancement of Expenses set forth in this Agreement
shall not be deemed exclusive of, but shall be in addition to and shall not be deemed to diminish or otherwise restrict, any other
rights which the Indemnitee may have under any provision of law, the Company’s certificate of incorporation or bylaws, in
any court in which a proceeding is brought, the vote of the Company’s stockholders or disinterested directors, other agreements
or otherwise, both as to action in his or her official capacity and to action in another capacity while occupying his or her position
as an Agent of the Company. To the extent applicable law or the Company’s certificate of incorporation or bylaws permit greater
indemnification than as provided for in this Agreement, the parties hereto agree that Indemnitee shall enjoy by this Agreement
the greater benefits so afforded by such law or provision of the certificate of incorporation or bylaws, and this Agreement shall
be deemed amended without any further action by the Company or the Indemnitee to grant such greater benefits.

 

12.         Third
Party Indemnitors. The Company hereby acknowledges that Indemnitee may have rights to indemnification or advancement of Expenses
or insurance provided by the persons or entities set forth on Exhibit A, if any, and affiliates of such persons or entities
(collectively, the “Third Party Indemnitors”). The Company hereby agrees that (i) it is the indemnitor of first
resort and that the obligations of the Company to Indemnitee are primary and any obligation of the Third Party Indemnitors to provide
indemnification for or advancement of Expenses incurred by Indemnitee are secondary, (ii) the Indemnitee’s right to indemnification
under this Agreement, and the Company’s certificate of incorporation and bylaws, including the right to advancement of Expenses,
indemnification, and contribution, shall not be diminished, modified, qualified, or otherwise affected by any right of Indemnitee
against any Third Party Indemnitor, and (iii) it irrevocably waives, relinquishes, and releases the Third Party Indemnitors from
any and all claims against the Third Party Indemnitors for contribution, subrogation, or any other recovery of any kind in respect
thereof. The Company further agrees that no advancement or payment by the Third Party Indemnitors on behalf of the Indemnitee with
respect to any claim for which Indemnitee has sought indemnification from the Company shall affect the foregoing and the Third
Party Indemnitors shall have the right of contribution and be subrogated to the extent of such advancement or payment to all of
the rights of recovery of Indemnitee against the Company. The Company and Indemnitee agree that the Third Party Indemnitors are
third party beneficiaries of the terms of this Section 12.

 

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13.         No
Duplication of Payments. The Company shall not be liable under this Agreement to make payment of any amount to the Indemnitee
to the extent the Indemnitee has otherwise received payment of such amount (or such amount has otherwise been paid on behalf of
the Indemnitee) under any insurance policy, the certificate of incorporation or bylaws of the Company or otherwise.

 

14.         Settlement.
The Company shall not settle any proceeding in any manner that would impose any fine or other obligation on the Indemnitee without
the Indemnitee’s written consent. Neither the Company nor the Indemnitee will unreasonably withhold consent to any proposed
settlement; provided, however, that the Indemnitee may withhold consent to any settlement that does not provide a complete and
unconditional release of the Indemnitee. The Company shall not be liable to the Indemnitee under this Agreement for any amounts
paid or payable in settlement of any action, suit or proceeding settled without the Company’s prior written consent, which
shall not be unreasonably withheld.

 

15.         Subrogation.
Except as set forth in Section 12 of this Agreement, in the event of payment under this Agreement, the Company shall be
subrogated to the extent of such payment to all of the rights of recovery of the Indemnitee, who shall execute all documents required
and shall do all acts that may be necessary to secure such rights and to enable the Company to effectively bring suit to enforce
such rights.

 

16.         Severability.
Nothing in this Agreement is intended to require or shall be construed as requiring the Company to do or fail to do any act in
violation of applicable law. The Company’s inability, pursuant to court order or applicable law, to perform its obligations
under this Agreement shall not constitute a breach of this Agreement. The provisions of this Agreement shall be severable in the
event that any of the provisions hereof (or any portion thereof) are held by a court of competent jurisdiction to be unenforceable,
and the remaining provisions shall remain enforceable to the fullest extent permitted by applicable law.

 

17.         Modification
and Waiver. No supplement, modification or amendment of this Agreement shall be binding unless executed in writing by both
of the parties hereto. No waiver of any of the provisions to this Agreement shall be deemed or shall constitute a waiver of any
other provision hereof (whether or not similar), nor shall such waiver constitute a continuing waiver. No waiver shall be binding
unless set forth in a writing signed by the person making such waiver. Except as specifically provided herein, no failure to exercise
or any delay in exercising any right or remedy hereunder shall constitute a waiver thereof.

 

18.         Continuance
of Rights; Successor and Assigns. The Indemnitee’s rights hereunder shall continue after the Indemnitee has ceased acting
as Agent of the Company. The terms of this Agreement shall bind, and shall inure to the benefit of, the successors and assigns
of the parties hereto (including any direct or indirect successor by purchase, merger, consolidation or otherwise to all or substantially
all of the business and/or assets of the Company).

 

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19.         Notice.
All notices, requests, demands and other communications under this Agreement shall be in writing and shall be deemed duly given:
(i) if delivered by hand, upon hand delivery; (ii) if mailed by certified or registered mail with postage prepaid, on the third
business day after the mailing date; or (iii) if transmitted electronically by a means by which receipt thereof can be demonstrated,
upon the date of the return receipt with respect to such transmittal. Contact information for notice to either party is set out
on the signature page hereof and may be subsequently modified by written notice given in accordance with this Section 19.

 

20.         Service
of Process and Venue. The Company and Indemnitee hereby irrevocably and unconditionally: (i) agree that any action or proceeding
arising out of or in connection with this Agreement shall be brought only in the Court of Chancery of the State of Delaware and
not in any other state or federal court in the United States; (ii) consent to submit to the exclusive jurisdiction of the Court
of Chancery of the State of Delaware for purposes of any action or proceeding arising out of or in connection with this Agreement;
and (iii) waive, and agree not to plead or make, any claim that the Court of Chancery of the State of Delaware lacks venue or that
any such action or proceeding brought in the Court of Chancery of the State of Delaware has been brought in an improper or inconvenient
forum.

 

21.         Governing
Law. This Agreement and all acts and transactions pursuant hereto and the rights and obligations of the parties hereto shall
be governed, construed and interpreted in accordance with the laws of the State of Delaware, without giving effect to principles
of conflict of law.

 

22.         Headings.
The headings of the sections and paragraphs of this Agreement are inserted for convenience only and shall not be deemed to constitute
part of this Agreement or to affect the construction or interpretation thereof.

 

23.         Counterparts.
This Agreement may be executed in one or more counterparts, each of which shall for all purposes be deemed to be an original, but
all of which together shall constitute one and the same Agreement.

 

[Signature Page
Follows]

 

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The parties hereto
have executed this Agreement effective as of the date first written above.

 

	 	BG STAFFING, INC.	 
	 	 	 
	 	By: 	 	 
	 	Name: 	 
	 	Title:	 
	 	 	 
	 	Address for Notice:	 
	 	5000 Legacy Drive, Suite 350	 
	 	Plano, Texas 75024	 
	 	Attn: Chief Executive Officer	 
	 	 	 
	 	INDEMNITEE	 
	 	 	 
	 	_____________________________ 	 
	 	[Name] 	 
	 	 	 
	 	Address for Notice:	 
	 	[Address]	 

 

[Indemnification Agreement]

 

    	 

    	 

    

 

EXHIBIT A

 

THIRD PARTY INDEMNITORSEXHIHBIT 10.1

 

MicroChannel
Technologies Corporation

 

7% NON NEGOTIABLE PROMISSORY NOTE

 

	Principal Amount: $70,000	Issue Date: January 9, 2014

  

FOR VALUE RECEIVED, MICROCHANNEL TECHNOLOGIES
CORPORATION, a Nevada corporation (“Borrower”), hereby promises to pay to JATINDER S. BHOGAL, a resident
of Canada (the “Holder”) or its registered assigns or successors in interest or order, without demand, the sum
of SEVENTY THOUSAND DOLLARS ($70,000) (“Principal Amount”), together with interest thereon as set forth
below.

 

ARTICLE 1

INTEREST

 

1.1Interest Rate. Interest on this Note shall
accrue at the annual rate of SEVEN PERCENT (7%) as computed on the basis of a 365-day year. Interest will begin to accrue as of
the date hereof is payable with payment of each installment of principal due hereunder, accelerated or otherwise. Interest due
on this Note shall not be compounded.

 

1.2Default Interest Rate. Following the occurrence
and during the continuance of an Event of Default, which, if susceptible to cure is not cured within the cure periods (if any)
set forth in Article 3, otherwise then from the first date of such occurrence until cured, the annual interest rate on this
Note shall (subject to Section 4.10) be the lesser of TEN PERCENT (10%), or the maximum rate then allowable by law, and
be due on demand.

 

ARTICLE 2

PAYMENT

 

2.1Due Date. The Borrower shall pay the Principal
Amount and all accrued and unpaid interest on this Note no later than January 9, 2016. The outstanding Principal Amount and accrued
and unpaid interest thereon may be prepaid by the Borrower in whole or in part, without penalty.

 

ARTICLE 3

EVENTS OF DEFAULT

 

The occurrence of any of the following events
of default (“Event of Default”) shall, at the option of the Holder hereof, make all sums of principal and interest
then remaining unpaid hereon and all other amounts payable hereunder immediately due and payable, upon demand, without presentment,
or grace period, all of which hereby are expressly waived, except as set forth below:

 

3.1Failure to Pay Principal or Interest.
The Borrower fails to pay all of the Principal Amount and interest under this Note when due and such failure continues for a period
of eight (8) business days after the due date.

 

3.2Breach of Covenant. The Borrower
breaches any material covenant or other term or condition of this Note and such breach, if subject to cure, continues for a period
of ten (10) business days after written notice to the Borrower from the Holder.

 

3.3Breach of Representations and
Warranties. Any material representation or warranty of the Borrower made herein, or in any agreement, statement or certificate
given in writing pursuant hereto or in connection herewith or therewith shall be false or misleading in any material respect as
of the Closing Date.

 

3.4Receiver or Trustee. The
Borrower shall make an assignment for the benefit of creditors, or apply for or consent to the appointment of a receiver or trustee
for them or for a substantial part of their property or business; or such a receiver or trustee shall otherwise be appointed.

 

    	 

    	 

    

 

3.5Judgments. Any money judgment,
writ or similar final process shall be entered or filed against Borrower or any subsidiary of Borrower in the United States or
any of their property or other assets in the United States for more than $100,000, and shall remain unvacated or unsatisfied, for
a period of sixty days.

 

3.6Non-Payment. A default by
the Borrower under any one obligation in an aggregate monetary amount in excess of $100,000 for more than twenty (20) days after
the due date, unless the Borrower is contesting the validity of such obligation in good faith and has segregated cash funds equal
to not less than one-half of the contested amount.

 

3.7Bankruptcy. Bankruptcy, insolvency,
reorganization, or liquidation proceedings or other proceedings or relief under any bankruptcy law or any law, or the issuance
of any notice in relation to such event, for the relief of debtors shall be instituted by or against the Borrower or any Subsidiary
of Borrower and if instituted against them are not dismissed within forty-five (45) days of initiation.

 

ARTICLE 4

MISCELLANEOUS

 

4.1Failure or Indulgence Not Waiver.
No failure or delay on the part of Holder hereof in the exercise of any power, right or privilege hereunder shall operate as a
waiver thereof, nor shall any single or partial exercise of any such power, right or privilege preclude other or further exercise
thereof or of any other right, power or privilege. All rights and remedies existing hereunder are cumulative to, and not exclusive
of, any rights or remedies otherwise available.

 

4.2Notices. All notices, demands,
requests, consents, approvals, and other communications required or permitted hereunder shall be in writing and, unless otherwise
specified herein, shall be (i) personally served, (ii) deposited in the mail, registered or certified, return receipt requested,
postage prepaid, (iii) delivered by reputable air courier service with charges prepaid, or (iv) transmitted by hand delivery, telegram,
facsimile, or email addressed as set forth below or to such other address as such party shall have specified most recently by written
notice. Any notice or other communication required or permitted to be given hereunder shall be deemed effective (a) upon hand delivery
or delivery by facsimile, with accurate confirmation generated by the transmitting facsimile machine, at the address or number
designated below (if delivered on a business day during normal business hours where such notice is to be received), or the first
business day following such delivery (if delivered other than on a business day during normal business hours where such notice
is to be received) or (b) on the second business day following the date of mailing by express courier service, fully prepaid, addressed
to such address, or upon actual receipt of such mailing, whichever shall first occur.

 

If to Borrower:

 

MicroChannel Technologies, Inc.

9192 Red Branch Road

Suite110

Columbia, MD 20145

 

If to Holder:

 

Jatinder S. Bhogal

[ADDRESS]

 

or such other addresses as may be provided
by Borrower or Holder to the other party.

 

4.3Amendment Provision. The
term “Note” and all reference thereto, as used throughout this instrument, shall mean this instrument as originally
executed, or if later amended or supplemented, then as so amended or supplemented.

 

4.4Assignees. This Note shall
be binding upon the Borrower and its successors and assigns, and shall inure to the benefit of the Holder and its successors and
assigns.

 

    	 

    	 

    

 

4.5Cost of Collection. If default
is made in the payment of this Note, Borrower shall pay the Holder hereof reasonable costs of collection, including reasonable
attorneys’ fees.

 

4.6No Rights or Liabilities
as Shareholder. This Note does not by itself entitle the Holder to any voting rights or other rights as a shareholder of the
Borrower. In the absence of conversion of this Note, no provisions of this Note, and no enumeration herein of the rights or privileges
of the Holder, shall cause the Holder to be a shareholder of the Borrower for any purpose.

 

4.7Binding Effect. This Note
shall be binding on the Parties and their respective heirs, successors, and assigns; provided, however, that the Borrower
shall not assign its rights hereunder in whole or in part without the express written consent of the Holder.

 

4.8Severability. If any
part of this Note is construed to be in violation of any law, such part shall be modified to achieve the objective of the parties
to the fullest extent permitted by law and the balance of this Note shall remain in full force and effect.

 

4.9Final Note. This Note
contains the complete understanding and agreement of the Borrower and Holder and supersedes all prior representations, warranties,
agreements, arrangements, understandings, and negotiations.

 

4.10Maximum Payments. Nothing
contained herein shall be deemed to establish or require the payment of a rate of interest or other charges in excess of the maximum
permitted by applicable law. In the event that the rate of interest required to be paid or other charges hereunder exceed the maximum
permitted by such law, any payments in excess of such maximum shall be credited against amounts owed by the Borrower to the Holder
and thus refunded to the Borrower.

 

4.11Construction. Each party
acknowledges that its legal counsel participated in the preparation of this Note and, therefore, stipulates that the rule of construction
that ambiguities are to be resolved against the drafting party shall not be applied in the interpretation of this Note to favor
any party against the other.

 

4.12Redemption. This Note may
not be redeemed, prepaid or called without the consent of the Holder except as described in this Note.

 

4.13Non-Business Days. Whenever
any payment or any action to be made shall be due on a Saturday, Sunday or a public holiday under the laws of the State of New
York, such payment may be due or action shall be required on the next succeeding business day and, for such payment, such next
succeeding day shall be included in the calculation of the amount of accrued interest payable on such date.

 

4.14Governing
Law. This Note shall be governed by and construed in accordance with the laws of the state of New York, without regard to conflicts
of laws and principles that would result in the application of the substantive laws of another jurisdiction. Any action brought
by either party against the other concerning the transactions contemplated by this Agreement shall be brought only in the state
courts of New York or in the federal courts located in the State of New York. Both parties and the individual signing this Note
on behalf of the Borrower agree to submit to the jurisdiction of such courts. The prevailing party shall be entitled to recover
from the other party its reasonable attorney’s fees and costs. In the event that any provision of this Note is invalid or
unenforceable under any applicable statute or rule of law, then such provision shall be deemed inoperative to the extent that it
may conflict therewith and shall be deemed modified to conform with such statute or rule of law. Any such provision which may prove
invalid or unenforceable under any law shall not affect the validity or enforceability of any other provision of this Note. Nothing
contained herein shall be deemed or operate to preclude the Holder from bringing suit or taking other legal action against the
Borrower in any other jurisdiction to collect on the Borrower’s obligations to Holder or to enforce a judgment or other court
in favor of the Holder.

 

[Signature
Page Follows]

 

    	 

    	 

    

 

IN WITNESS WHEREOF, Borrower has
caused this Note to be signed in its name by an authorized officer as of the 9th day of January, 2014.

 

MICROCHANNEL TECHNOLOGIES CORPORATION

 

By: /s/ David Gamache

Name:David Gamache

Title:President and Chief Executive Officer

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