Document:

ex_166513.htm

 

 

EXHIBIT  4.04

 

SECURITIES PURCHASE AGREEMENT

 

This SECURITIES PURCHASE AGREEMENT (the “Agreement”), dated as of November 11, 2019, by and between TRUE NATURE HOLDING, INC., a Delaware corporation, with its address at 1355 Peachtree Street, Suite 1150, Atlanta, Georgia 30309 (the “Company”), and POWER UP LENDING GROUP LTD., a Virginia corporation, with its address at 111 Great Neck Road, Suite 216, Great Neck, NY 11021 (the “Buyer”).

 

WHEREAS:

 

A.     The Company and the Buyer are executing and delivering this Agreement in reliance upon the exemption from securities registration afforded by the rules and regulations as promulgated by the United States Securities and Exchange Commission (the “SEC”) under the Securities Act of 1933, as amended (the “1933 Act”); and

 

B.     Buyer desires to purchase and the Company desires to issue and sell, upon the terms and conditions set forth in this Agreement a convertible note of the Company, in the form attached hereto as Exhibit A, in the aggregate principal amount of $73,000.00 (together with any note(s) issued in replacement thereof or as a dividend thereon or otherwise with respect thereto in accordance with the terms thereof, the “Note”), convertible into shares of common stock, $0.01 par value per share, of the Company (the “Common Stock”), upon the terms and subject to the limitations and conditions set forth in such Note.

 

NOW THEREFORE, the Company and the Buyer severally (and not jointly) hereby agree as follows:

 

1.     Purchase and Sale of Note.

 

a.     Purchase of Note. On the Closing Date (as defined below), the Company shall issue and sell to the Buyer and the Buyer agrees to purchase from the Company such principal amount of Note as is set forth immediately below the Buyer’s name on the signature pages hereto.

 

b.     Form of Payment. On the Closing Date (as defined below), the Buyer shall pay the purchase price for the Note to be issued and sold to it at the Closing (as defined below) (the “Purchase Price”) by wire transfer of immediately available funds to the Company, in accordance with the Company’s written wiring instructions, against delivery of the Note in the principal amount equal to the Purchase Price as is set forth immediately below the Buyer’s name on the signature pages hereto, and  the Company shall deliver such duly executed Note on behalf of the Company, to the Buyer, against delivery of such Purchase Price.

 

c.     Closing Date. Subject to the satisfaction (or written waiver) of the conditions thereto set forth in Section 6 and Section 7 below, the date and time of the issuance and sale of the Note pursuant to this Agreement (the “Closing Date”) shall be 12:00 noon, Eastern Standard Time on or about November 13, 2019, or such other mutually agreed upon time. The closing of the transactions

 

 

 

 

contemplated by this Agreement (the “Closing”) shall occur on the Closing Date at such location as may be agreed to by the parties.

 

2.     Buyer’s Representations and Warranties. The Buyer represents and warrants to the Company that:

 

a.     Investment Purpose. As of the date hereof, the Buyer is purchasing the Note and the shares of Common Stock issuable upon conversion of or otherwise pursuant to the Note (such shares of Common Stock being collectively referred to herein as the “Conversion Shares” and, collectively with the Note, the “Securities”) for its own account and not with a present view towards the public sale or distribution thereof, except pursuant to sales registered or exempted from registration under the 1933 Act.

 

b.     Accredited Investor Status. The Buyer is an “accredited investor” as that term is defined in Rule 501(a) of Regulation D (an “Accredited Investor”).

 

c.     Reliance on Exemptions. The Buyer understands that the Securities are being offered and sold to it in reliance upon specific exemptions from the registration requirements of United States federal and state securities laws and that the Company is relying upon the truth and accuracy of, and the Buyer’s compliance with, the representations, warranties, agreements, acknowledgments and understandings of the Buyer set forth herein in order to determine the availability of such exemptions and the eligibility of the Buyer to acquire the Securities.

 

d.     Information. The Company has not disclosed to the Buyer any material nonpublic information and will not disclose such information unless such information is disclosed to the public prior to or promptly following such disclosure to the Buyer.

 

e.     Legends. The Buyer understands that the Note and, until such time as the Conversion Shares have been registered under the 1933 Act; or may be sold pursuant to an applicable exemption from registration, the Conversion Shares may bear a restrictive legend in substantially the following form:

 

"THE SECURITIES REPRESENTED BY THIS INSTRUMENT HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR UNDER ANY STATE SECURITIES LAWS, AND MAY NOT BE PLEDGED, SOLD, ASSIGNED, HYPOTHECATED OR OTHERWISE TRANSFERRED UNLESS (1) A REGISTRATION STATEMENT WITH RESPECT THERETO IS EFFECTIVE UNDER THE SECURITIES ACT AND ANY APPLICABLE STATE SECURITIES LAWS OR (2) THE ISSUER OF SUCH SECURITIES RECEIVES AN OPINION OF COUNSEL TO THE HOLDER OF SUCH SECURITIES, WHICH COUNSEL AND OPINION ARE REASONABLY ACCEPTABLE TO THE ISSUER’S TRANSFER AGENT, THAT SUCH SECURITIES MAY BE PLEDGED, SOLD, ASSIGNED, HYPOTHECATED OR OTHERWISE

 

2

 

 

TRANSFERRED WITHOUT AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT AND APPLICABLE STATE SECURITIES LAWS."

 

The legend set forth above shall be removed and the Company shall issue a certificate without such legend to the holder of any Security upon which it is stamped, if, unless otherwise required by applicable state securities laws, (a) such Security is registered for sale under an effective registration statement filed under the 1933 Act or otherwise may be sold pursuant to an exemption from registration without any restriction as to the number of securities as of a particular date that can then be immediately sold, or (b) such holder provides the Company with an opinion of counsel, in form, substance and scope customary for opinions of counsel in comparable transactions, to the effect that a public sale or transfer of such Security may be made without registration under the 1933 Act, which opinion shall be accepted by the Company so that the sale or transfer is effected. The Buyer agrees to sell all Securities, including those represented by a certificate(s) from which the legend has been removed, in compliance with applicable prospectus delivery requirements, if any. In the event that the Company does not accept the opinion of counsel provided by the Buyer with respect to the transfer of Securities pursuant to an exemption from registration, such as Rule 144, at the Deadline, it will be considered an Event of Default pursuant to Section 3.2 of the Note; provided such opinion complies with the Irrevocable Transfer Agent Instructions (as defined herein).

 

f.     Authorization; Enforcement. This Agreement has been duly and validly authorized. This Agreement has been duly executed and delivered on behalf of the Buyer, and this Agreement constitutes a valid and binding agreement of the Buyer enforceable in accordance with its terms.

 

3.     Representations and Warranties of the Company. The Company represents and warrants to the Buyer that:

 

a.     Organization and Qualification. The Company and each of its Subsidiaries (as defined below), if any, is a corporation duly organized, validly existing and in good standing under the laws of the jurisdiction in which it is incorporated, with full power and authority (corporate and other) to own, lease, use and operate its properties and to carry on its business as and where now owned, leased, used, operated and conducted. “Subsidiaries” means any corporation or other organization, whether incorporated or unincorporated, in which the Company owns, directly or indirectly, any equity or other ownership interest.

 

b.     Authorization; Enforcement. (i) The Company has all requisite corporate power and authority to enter into and perform this Agreement, the Note and to consummate the transactions contemplated hereby and thereby and to issue the Securities, in accordance with the terms hereof and thereof, (ii) the execution and delivery of this Agreement, the Note by the Company and the consummation by it of the transactions contemplated hereby and thereby (including without limitation, the issuance of the Note and the issuance and reservation for issuance of the Conversion Shares issuable upon conversion or exercise thereof) have been duly authorized by the Company’s Board of Directors and

 

3

 

 

no further consent or authorization of the Company, its Board of Directors, or its shareholders is required, (iii) this Agreement has been duly executed and delivered by the Company by its authorized representative, and such authorized representative is the true and official representative with authority to sign this Agreement and the other documents executed in connection herewith and bind the Company accordingly, and (iv) this Agreement constitutes, and upon execution and delivery by the Company of the Note, each of such instruments will constitute, a legal, valid and binding obligation of the Company enforceable against the Company in accordance with its terms.

 

c.     Capitalization. As of the date hereof, the authorized common stock of the Company consists of 500,000,000 authorized shares of Common Stock, $0.01 par value per share, of which 25,522,996 shares are issued and outstanding; and 46,844,919 shares are reserved for issuance upon conversion of the Note. All of such outstanding shares of capital stock are, or upon issuance will be, duly authorized, validly issued, fully paid and non-assessable. .

 

d.     Issuance of Shares. The Conversion Shares are duly authorized and reserved for issuance and, upon conversion of the Note in accordance with its terms, will be validly issued, fully paid and non-assessable, and free from all taxes, liens, claims and encumbrances with respect to the issue thereof and shall not be subject to preemptive rights or other similar rights of shareholders of the Company and will not impose personal liability upon the holder thereof.

 

e.     No Conflicts. The execution, delivery and performance of this Agreement and the Note by the Company and the consummation by the Company of the transactions contemplated hereby and thereby (including, without limitation, the issuance and reservation for issuance of the Conversion Shares) will not (i) conflict with or result in a violation of any provision of the Certificate of Incorporation or By-laws, or (ii) violate or conflict with, or result in a breach of any provision of, or constitute a default (or an event which with notice or lapse of time or both could become a default) under, or give to others any rights of termination, amendment, acceleration or cancellation of, any agreement, indenture, patent, patent license or instrument to which the Company or any of its Subsidiaries is a party, or (iii) result in a violation of any law, rule, regulation, order, judgment or decree (including federal and state securities laws and regulations and regulations of any self-regulatory organizations to which the Company or its securities are subject) applicable to the Company or any of its Subsidiaries or by which any property or asset of the Company or any of its Subsidiaries is bound or affected (except for such conflicts, defaults, terminations, amendments, accelerations, cancellations and violations as would not, individually or in the aggregate, have a Material Adverse Effect). The businesses of the Company and its Subsidiaries, if any, are not being conducted, and shall not be conducted so long as the Buyer owns any of the Securities, in violation of any law, ordinance or regulation of any governmental entity. “Material Adverse Effect” means any material adverse effect on the business, operations, assets, financial condition or prospects of the Company or its Subsidiaries, if any, taken as a whole, or on the transactions contemplated hereby or by the agreements or instruments to be entered into in connection herewith.

 

f.     SEC Documents; Financial Statements. The Company has filed all reports, schedules, forms, statements and other documents required to be filed by it with the SEC pursuant to the reporting requirements of the Securities Exchange Act of 1934, as amended (the “1934 Act”) (all of the

 

4

 

 

foregoing filed prior to the date hereof and all exhibits included therein and financial statements and schedules thereto and documents (other than exhibits to such documents) incorporated by reference therein, being hereinafter referred to herein as the “SEC Documents”). Upon written request the Company will deliver to the Buyer true and complete copies of the SEC Documents, except for such exhibits and incorporated documents. As of their respective dates or if amended, as of the dates of the amendments, the SEC Documents complied in all material respects with the requirements of the 1934 Act and the rules and regulations of the SEC promulgated thereunder applicable to the SEC Documents, and none of the SEC Documents, at the time they were filed with the SEC, contained any untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary in order to make the statements therein, in light of the circumstances under which they were made, not misleading. None of the statements made in any such SEC Documents is, or has been, required to be amended or updated under applicable law (except for such statements as have been amended or updated in subsequent filings prior the date hereof). As of their respective dates or if amended, as of the dates of the amendments, the financial statements of the Company included in the SEC Documents complied as to form in all material respects with applicable accounting requirements and the published rules and regulations of the SEC with respect thereto. Such financial statements have been prepared in accordance with United States generally accepted accounting principles, consistently applied, during the periods involved and fairly present in all material respects the consolidated financial position of the Company and its consolidated Subsidiaries as of the dates thereof and the consolidated results of their operations and cash flows for the periods then ended (subject, in the case of unaudited statements, to normal year-end audit adjustments). The Company is subject to the reporting requirements of the 1934 Act.

 

g.     Absence of Certain Changes. Since June 30, 2019, except as set forth in the SEC Documents, there has been no material adverse change and no material adverse development in the assets, liabilities, business, properties, operations, financial condition, results of operations, prospects or 1934 Act reporting status of the Company or any of its Subsidiaries.

 

h.     Absence of Litigation. Except as set forth in the SEC Documents, there is no action, suit, claim, proceeding, inquiry or investigation before or by any court, public board, government agency, self-regulatory organization or body pending or, to the knowledge of the Company or any of its Subsidiaries, threatened against or affecting the Company or any of its Subsidiaries, or their officers or directors in their capacity as such, that could have a Material Adverse Effect. The Company and its Subsidiaries are unaware of any facts or circumstances which might give rise to any of the foregoing.

 

i.     No Integrated Offering. Neither the Company, nor any of its affiliates, nor any person acting on its or their behalf, has directly or indirectly made any offers or sales in any security or solicited any offers to buy any security under circumstances that would require registration under the 1933 Act of the issuance of the Securities to the Buyer. The issuance of the Securities to the Buyer will not be integrated with any other issuance of the Company’s securities (past, current or future) for purposes of any shareholder approval provisions applicable to the Company or its securities.

 

5

 

 

j.     No Brokers. The Company has taken no action which would give rise to any claim by any person for brokerage commissions, transaction fees or similar payments relating to this Agreement or the transactions contemplated hereby.

 

k.     No Investment Company. The Company is not, and upon the issuance and sale of the Securities as contemplated by this Agreement will not be an “investment company” required to be registered under the Investment Company Act of 1940 (an “Investment Company”). The Company is not controlled by an Investment Company.

 

l.     Breach of Representations and Warranties by the Company. If the Company breaches any of the representations or warranties set forth in this Section 3, and in addition to any other remedies available to the Buyer pursuant to this Agreement, it will be considered an Event of default under Section 3.4 of the Note.

 

4.     COVENANTS.

 

a.     Best Efforts. The Company shall use its best efforts to satisfy timely each of the conditions described in Section 7 of this Agreement.

 

b.     Form D; Blue Sky Laws. The Company agrees to timely make any filings required by federal and state laws as a result of the closing of the transactions contemplated by this Agreement.

 

c.     Use of Proceeds. The Company shall use the proceeds for general working capital purposes.

 

d.     Expenses. At the Closing, the Company’s obligation with respect to the transactions contemplated by this Agreement is to reimburse Buyer’ expenses shall be $3,000.00 for Buyer’s legal fees and due diligence fee.

 

e.     Corporate Existence. So long as the Buyer beneficially owns any Note, the Company shall maintain its corporate existence and shall not sell all or substantially all of the Company’s assets, except with the prior written consent of the Buyer.

 

f.     Breach of Covenants. If the Company breaches any of the covenants set forth in this Section 4, and in addition to any other remedies available to the Buyer pursuant to this Agreement, it will be considered an event of default under Section 3.4 of the Note.

 

g.     Failure to Comply with the 1934 Act. So long as the Buyer beneficially owns the Note, the Company shall comply with the reporting requirements of the 1934 Act; and the Company shall continue to be subject to the reporting requirements of the 1934 Act.

 

6

 

 

h.     Trading Activities. Neither the Buyer nor its affiliates has an open short position in the common stock of the Company and the Buyer agrees that it shall not, and that it will cause its affiliates not to, engage in any short sales of or hedging transactions with respect to the common stock of the Company.

 

i.     Right of First Refusal. Unless it shall have first delivered to the Buyer, at least forty eight (48) hours prior to the closing of such Future Offering (as defined herein), written notice describing the proposed Future Offering (“ROFR Notice”), including the terms and conditions thereof, identity of the proposed purchaser and proposed definitive documentation to be entered into in connection therewith, and providing the Buyer an option during the forty eight (48) hour period following delivery of such notice to purchase the securities being offered in the Future Offering on the same terms as contemplated by such Future Offering (the limitations referred to in this sentence and the preceding sentence are collectively referred to as the “Right of First Refusal”), the Company will not conduct any equity (or debt with an equity component) financing in an amount less than $150,000 (“Future Offering(s)”) during the period beginning on the Closing Date and ending nine (9) months following the Closing Date. In the event the terms and conditions of a proposed Future Offering are amended in any respect after delivery of the notice to the Buyer concerning the proposed Future Offering, the Company shall deliver a new notice to the Buyer describing the amended terms and conditions of the proposed Future Offering and the Buyer thereafter shall have an option during the forty eight (48) hour period following delivery of such new notice to purchase the securities being offered on the same terms as contemplated by such proposed Future Offering, as amended.

 

5.     Transfer Agent Instructions. The Company shall issue irrevocable instructions to its transfer agent to issue certificates, registered in the name of the Buyer or its nominee, for the Conversion Shares in such amounts as specified from time to time by the Buyer to the Company upon conversion of the Note in accordance with the terms thereof (the “Irrevocable Transfer Agent Instructions”).  In the event that the Company proposes to replace its transfer agent, the Company shall provide, prior to the effective date of such replacement, a fully executed Irrevocable Transfer Agent Instructions in a form as initially delivered pursuant to this Agreement (including but not limited to the provision to irrevocably reserve shares of Common Stock in the Reserved Amount as such term is defined in the Note) signed by the successor transfer agent to Company and the Company. Prior to registration of the Conversion Shares under the 1933 Act or the date on which the Conversion Shares may be sold pursuant to an exemption from registration, all such certificates shall bear the restrictive legend specified in Section 2(e) of this Agreement.  The Company warrants that: (i) no instruction other than the Irrevocable Transfer Agent Instructions referred to in this Section 5, will be given by the Company to its transfer agent and that the Securities shall otherwise be freely transferable on the books and records of the Company as and to the extent provided in this Agreement and the Note; (ii) it will not direct its transfer agent not to transfer or delay, impair, and/or hinder its transfer agent in transferring (or issuing)(electronically or in certificated form) any certificate for Conversion Shares to be issued to the Buyer upon conversion of or otherwise pursuant to the Note as and when required by the Note and this Agreement; and (iii) it will not fail to remove (or directs its transfer agent not to remove or impairs, delays, and/or hinders its transfer agent from removing) any restrictive legend (or to withdraw any stop transfer instructions in respect thereof) on any certificate for any Conversion Shares issued to the Buyer upon

 

7

 

 

conversion of or otherwise pursuant to the Note as and when required by the Note and/or this Agreement.  If the Buyer provides the Company and the Company’s transfer agent, at the cost of the Buyer, with an opinion of counsel in form, substance and scope customary for opinions in comparable transactions, to the effect that a public sale or transfer of such Securities may be made without registration under the 1933 Act, the Company shall permit the transfer, and, in the case of the Conversion Shares, promptly instruct its transfer agent to issue one or more certificates, free from restrictive legend, in such name and in such denominations as specified by the Buyer.  The Company acknowledges that a breach by it of its obligations hereunder will cause irreparable harm to the Buyer, by vitiating the intent and purpose of the transactions contemplated hereby.  Accordingly, the Company acknowledges that the remedy at law for a breach of its obligations under this Section 5 may be inadequate and agrees, in the event of a breach or threatened breach by the Company of the provisions of this Section, that the Buyer shall be entitled, in addition to all other available remedies, to an injunction restraining any breach and requiring immediate transfer, without the necessity of showing economic loss and without any bond or other security being required.

 

6.     Conditions to the Company’s Obligation to Sell. The obligation of the Company hereunder to issue and sell the Note to the Buyer at the Closing is subject to the satisfaction, at or before the Closing Date of each of the following conditions thereto, provided that these conditions are for the Company’s sole benefit and may be waived by the Company at any time in its sole discretion:

 

a.     The Buyer shall have executed this Agreement and delivered the same to the Company.

 

b.     The Buyer shall have delivered the Purchase Price in accordance with Section 1(b) above.

 

c.     The representations and warranties of the Buyer shall be true and correct in all material respects as of the date when made and as of the Closing Date as though made at that time (except for representations and warranties that speak as of a specific date), and the Buyer shall have performed, satisfied and complied in all material respects with the covenants, agreements and conditions required by this Agreement to be performed, satisfied or complied with by the Buyer at or prior to the Closing Date.

 

d.     No litigation, statute, rule, regulation, executive order, decree, ruling or injunction shall have been enacted, entered, promulgated or endorsed by or in any court or governmental authority of competent jurisdiction or any self-regulatory organization having authority over the matters contemplated hereby which prohibits the consummation of any of the transactions contemplated by this Agreement.

 

7.     Conditions to The Buyer’s Obligation to Purchase. The obligation of the Buyer hereunder to purchase the Note at the Closing is subject to the satisfaction, at or before the Closing Date of each of the following conditions, provided that these conditions are for the Buyer’s sole benefit and may be waived by the Buyer at any time in its sole discretion:

 

8

 

 

a.     The Company shall have executed this Agreement and delivered the same to the Buyer.

 

b.     The Company shall have delivered to the Buyer the duly executed Note (in such denominations as the Buyer shall request) in accordance with Section 1(b) above.

 

c.     The Irrevocable Transfer Agent Instructions, in form and substance satisfactory to the Buyer, shall have been delivered to and acknowledged in writing by the Company’s Transfer Agent.

 

d.     The representations and warranties of the Company shall be true and correct in all material respects as of the date when made and as of the Closing Date as though made at such time (except for representations and warranties that speak as of a specific date) and the Company shall have performed, satisfied and complied in all material respects with the covenants, agreements and conditions required by this Agreement to be performed, satisfied or complied with by the Company at or prior to the Closing Date. The Buyer shall have received a certificate or certificates, executed by the chief executive officer of the Company, dated as of the Closing Date, to the foregoing effect and as to such other matters as may be reasonably requested by the Buyer including, but not limited to certificates with respect to the Board of Directors’ resolutions relating to the transactions contemplated hereby.

 

e.     No litigation, statute, rule, regulation, executive order, decree, ruling or injunction shall have been enacted, entered, promulgated or endorsed by or in any court or governmental authority of competent jurisdiction or any self-regulatory organization having authority over the matters contemplated hereby which prohibits the consummation of any of the transactions contemplated by this Agreement.

 

f.     No event shall have occurred which could reasonably be expected to have a Material Adverse Effect on the Company including but not limited to a change in the 1934 Act reporting status of the Company or the failure of the Company to be timely in its 1934 Act reporting obligations.

 

g.     The Conversion Shares shall have been authorized for quotation on an exchange or electronic quotation system and trading in the Common Stock on such exchange or electronic quotation system shall not have been suspended by the SEC or an exchange or electronic quotation system.

 

h.     The Buyer shall have received an officer’s certificate described in Section 3(d) above, dated as of the Closing Date.

 

9

 

 

8.     Governing Law; Miscellaneous.

 

a.     Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State of Virginia without regard to principles of conflicts of laws. 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 New York and the county of Nassau. The parties to this Agreement hereby irrevocably waive any objection to jurisdiction and venue of any action instituted hereunder and shall not assert any defense based on lack of jurisdiction or venue or based upon forum non conveniens. The Company and Buyer waive trial by jury. 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 Agreement or any other agreement delivered in connection herewith 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 any agreement. Each party hereby irrevocably waives personal service of process and consents to process being served in any suit, action or proceeding in connection with this Agreement, the Note or any related document or agreement by mailing a copy thereof via registered or certified mail or overnight delivery (with evidence of delivery) to such party at the address in effect for notices to it under this Agreement and agrees that such service shall constitute good and sufficient service of process and notice thereof. Nothing contained herein shall be deemed to limit in any way any right to serve process in any other manner permitted by law.

 

b.     Counterparts. This Agreement may be executed in one or more counterparts, each of which shall be deemed an original but all of which shall constitute one and the same agreement and shall become effective when counterparts have been signed by each party and delivered to the other party.

 

c.     Headings. The headings of this Agreement are for convenience of reference only and shall not form part of, or affect the interpretation of, this Agreement.

 

d.     Severability. In the event that any provision of this Agreement 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 provision hereof which may prove invalid or unenforceable under any law shall not affect the validity or enforceability of any other provision hereof.

 

e.    Entire Agreement; Amendments. This Agreement and the instruments referenced herein contain the entire understanding of the parties with respect to the matters covered herein and therein and, except as specifically set forth herein or therein, neither the Company nor the Buyer makes any representation, warranty, covenant or undertaking with respect to such matters. No provision of this Agreement may be waived or amended other than by an instrument in writing signed by the majority in interest of the Buyer.

 

10

 

 

f.     Notices. 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, or facsimile, 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. The addresses for such communications shall be as set forth in the heading of this Agreement with a copy by fax only to (which copy shall not constitute notice) to Naidich Wurman LLP, 111 Great Neck Road, Suite 214, Great Neck, NY 11021, Attn: Allison Naidich, facsimile: 516-466-3555, e-mail: allison@nwlaw.com. Each party shall provide notice to the other party of any change in address.

 

g.     Successors and Assigns. This Agreement shall be binding upon and inure to the benefit of the parties and their successors and assigns. Neither the Company nor the Buyer shall assign this Agreement or any rights or obligations hereunder without the prior written consent of the other. Notwithstanding the foregoing, the Buyer may assign its rights hereunder to any person that purchases Securities in a private transaction from the Buyer or to any of its “affiliates,” as that term is defined under the 1934 Act, without the consent of the Company.

 

h.     Survival. The representations and warranties of the Company and the agreements and covenants set forth in this Agreement shall survive the closing hereunder notwithstanding any due diligence investigation conducted by or on behalf of the Buyer. The Company agrees to indemnify and hold harmless the Buyer and all of its officers, directors, employees and agents for loss or damage arising as a result of or related to any breach or alleged breach by the Company of any of its representations, warranties and covenants set forth in this Agreement or any of its covenants and obligations under this Agreement, including advancement of expenses as they are incurred.

 

i.     Further Assurances. Each party shall do and perform, or cause to be done and performed, all such further acts and things, and shall execute and deliver all such other agreements, certificates, instruments and documents, as the other party may reasonably request in order to carry out the intent and accomplish the purposes of this Agreement and the consummation of the transactions contemplated hereby.

 

j.     No Strict Construction. The language used in this Agreement will be deemed to be the language chosen by the parties to express their mutual intent, and no rules of strict construction will be applied against any party.

 

11

 

 

k.     Remedies. The Company acknowledges that a breach by it of its obligations hereunder will cause irreparable harm to the Buyer by vitiating the intent and purpose of the transaction contemplated hereby. Accordingly, the Company acknowledges that the remedy at law for a breach of its obligations under this Agreement will be inadequate and agrees, in the event of a breach or threatened breach by the Company of the provisions of this Agreement, that the Buyer shall be entitled, in addition to all other available remedies at law or in equity, and in addition to the penalties assessable herein, to an injunction or injunctions restraining, preventing or curing any breach of this Agreement and to enforce specifically the terms and provisions hereof, without the necessity of showing economic loss and without any bond or other security being required.

 

 

[THE REMAINDER OF THIS PAGE IS INTENTIONALLY LEFT BLANK]

 

 

 

 

12

 

 

 

IN WITNESS WHEREOF, the undersigned Buyer and the Company have caused this Agreement to be duly executed as of the date first above written.

 

 

TRUE NATURE HOLDING, INC.

 

By: ________________________________

Lawrence Diamond

Chief Executive Officer 

 

 

POWER UP LENDING GROUP LTD.

 

By: ________________________________

Name: Curt Kramer

Title: Chief Executive Officer

111 Great Neck Road, Suite 216

Great Neck, NY 11021

 

 

AGGREGATE SUBSCRIPTION AMOUNT:

 

Aggregate Principal Amount of Note:                                       $73,000.00

 

Aggregate Purchase Price:                                                         $73,000.00

 

 

 

13Exhibit
                                        10.1

 

AMENDED
AND RESTATED EMPLOYMENT AGREEMENT

 

This
Amended and Restated Employment Agreement (“Agreement”) is made effective as of December 2, 2019 (“Effective
Date”) by and between Electromed, Inc., a Minnesota corporation (the “Corporation”) and Kathleen S. Skarvan,
an individual residing in Minnesota (“Employee”) (collectively “Parties” or individually “Party”).

 

RECITALS

 

WHEREAS,
the Corporation and Employee previously entered into an Employment Agreement, dated as of December 1, 2012, as amended by the
Amended and Restated Employment Agreement, dated as of July 1, 2014, and as further amended by the Amended and Restated Employment
Agreement, dated as of September 21, 2017 (the “Original Agreement”); and

 

WHEREAS,
the Parties desire to enter into this Agreement, and it is the intention of the Parties that this Agreement entirely supersedes
and replaces the Original Agreement; and

 

WHEREAS,
the Corporation desires to continue to employ Employee pursuant to the terms of this Agreement and Employee desires to accept
such continued employment; and

 

WHEREAS,
during Employee’s employment with the Corporation, Employee has become acquainted with and will become acquainted with
technical and nontechnical information which the Corporation has developed, acquired and uses, or which the Corporation will develop,
acquire or use, and which is commercially valuable to the Corporation and which the Corporation desires to protect, and Employee
has contributed and may contribute to such information through inventions, discoveries, improvements or otherwise.

 

NOW,
THEREFORE, in consideration of the continued employment of Employee by the Corporation, and further in consideration of the
salary, wages or other compensation and benefits to be provided by the Corporation to Employee, and
for additional mutual covenants and conditions, the receipt and sufficiency of which are hereby acknowledged, the Corporation
and Employee, intending legally to be bound, hereby agree as follows:

 

AGREEMENT

 

In
consideration of the above recitals and the mutual promises set forth in this Agreement, the Parties agree as follows:

 

1. 
          Nature and Capacity of Employment. 

 

1.1.     
Title and Duties.  Effective as of Effective Date, the Corporation will continue to employ Employee as its President
and Chief Executive Officer, having such duties as are consistent with those of a President and Chief Executive Officer for similar
businesses, and such duties as requested by the Corporation in connection with the business, affairs and operations of the Corporation,
subject to the direction of the Corporation’s Board of Directors (the “Board”) and pursuant to the terms and
conditions set forth in this Agreement. The Employee hereby agrees to act in that capacity under the terms and conditions set
forth in this Agreement. Employee shall serve the Corporation faithfully and to the best of Employee’s ability and shall
at all times act in accordance with the law.  Employee shall devote Employee’s full working time, attention and efforts
to performing Employee’s duties and responsibilities under this Agreement and advancing the Corporation’s business
interests.  Employee shall follow applicable policies and procedures adopted by the Corporation
from time to time, including without limitation the Corporation’s Confidentiality Policy and
other Corporation policies, including those relating to business ethics, conflict of interest and non-discrimination.  Employee
shall not, without the prior written consent of the Board, accept other employment or engage in other business activities during
Employee’s employment with the Corporation that may prevent Employee from fulfilling the duties or responsibilities as
set forth in or contemplated by this Agreement.  Notwithstanding the above, Employee shall be permitted to continue her current
board positions on the boards of two non-profit organizations and one for-profit organization, provided such board service does
not prevent Employee from fulfilling the duties or responsibilities as set forth in or contemplated by this Agreement.

 

 

 

1.2.     
Location.  Employee’s employment will be based at the Corporation’s corporate headquarters.  Employee
acknowledges and agrees that Employee’s position, duties and responsibilities will require regular travel, both in the
U.S. and internationally. 

 

2.           Term. 
Unless terminated at an earlier date in accordance with Section 5, the term of Employee’s employment with the Corporation
under the terms and conditions of this Agreement will be for the period commencing on the Effective Date and ending on the two
(2) year anniversary of the Effective Date (the “Initial Term”).  On the two (2) year anniversary of the Effective
Date, and on each succeeding one-year anniversary of the Effective Date (each an “Anniversary Date”), the Term shall
be automatically extended until the next Anniversary Date (each a “Renewal Term”), subject to termination on an earlier
date in accordance with Section 5 or unless either Party gives written notice of non-renewal to the other Party at least ninety
(90) days prior to the Anniversary Date on which this Agreement would otherwise be automatically extended that the Party providing
such notice elects not to extend the Term; provided, however, that if a Change in Control (as defined in Section 6.5) occurs during
the Initial Term or during any Renewal Term then the Term will expire on the one-year anniversary of the date of the Change in
Control.  The Initial Term together with any Renewal Terms is the “Term.”  If Employee remains employed
by the Corporation after the Term ends for any reason, then such continued employment shall be according to the terms and conditions
established by the Corporation from time to time (provided that any provisions of this Agreement and the Restrictive Covenants
Agreement (as defined in Section 3) that by their terms survive the termination of the Term shall remain in full force and effect).

 

3.          
Restrictive Covenants Agreement.  Employee acknowledges entering into a Non-Competition, Non-Solicitation, and Confidentiality
Agreement dated effective December 1, 2012 (the “Restrictive Covenants Agreement”) and hereby reaffirms Employee’s
commitments and obligations under the Restrictive Covenants Agreement.  Employee further acknowledges that Employee has a
copy of the Restrictive Covenants Agreement, that Employee has read the Restrictive Covenants Agreement again before signing this
Agreement, and that the consideration Employee received in exchange for signing the Restrictive Covenants Agreement was adequate
and reasonable. Nothing in this Agreement is intended to modify, amend, cancel or supersede the Restrictive Covenants Agreement
in any manner. 

 

4.           
Compensation, Benefits and Business Expenses.

 

4.1.     
Base Salary.  As of the Effective Date, the Corporation agrees to pay Employee an annualized base salary of $410,000.00
(the “Base Salary”), which Base Salary will be earned by Employee on a pro rata basis as Employee performs services
and which shall be paid according to the Corporation’s normal payroll practices.  Employee shall be eligible for a
merit-based increase of the Base Salary payable under this Section 4.1 on or about July 1, 2020 and on or about July 1 of each
year during the Term thereafter, with any adjustment to Employee’s Base Salary subject to approval by the Board. 

 

2

 

 

4.2.     
Annual Incentive Compensation.  For each of the Corporation’s fiscal years during the Term, Employee will be
eligible to earn an annualized cash bonus as determined by the Board in its discretion and subject to the terms of any written
document addressing such annual cash bonus as the Board may adopt in its sole discretion.  For the Corporation’s fiscal
year ending June 30, 2020, Employee’s target annualized cash bonus under this Section 4.2 will be fifty percent (50%) of
Employee’s annualized Base Salary for the Corporation’s fiscal year ending June 30, 2020, subject to the terms and
conditions identified in the Corporation’s Fiscal Year 2020 Officer Bonus Plan.  Future annual cash bonus opportunities
will be determined by the Board in its discretion.  Unless specified otherwise in a written annual cash bonus document applicable
to Employee, if a bonus is earned in accordance with this Section 4.2, it will be paid to Employee by the Corporation regardless
of whether Employee is employed by the Corporation on the payment date, with such payment date being no later than March 15 of
the calendar year immediately following the calendar year in which Employee earns a bonus in accordance with this Section 4.2.

 

4.3.     
[RESERVED].  

 

4.4.     
Employee Benefits.  While Employee is employed by the Corporation during the Term, Employee shall be entitled to participate
in the retirement plans, equity compensation plans, health plans, and all other employee benefits made available by the Corporation,
and as they may be changed from time to time.  Employee acknowledges and agrees that Employee will be subject to all eligibility
requirements and all other provisions of these benefits plans, and that the Corporation is under no obligation to Employee to
establish and maintain any employee benefit plan in which Employee may participate.  The terms and provisions of any employee
benefit plan of the Corporation are matters within the exclusive province of the Board, subject to applicable law. 

 

4.5.     
Vacation and Sick Leave.  While Employee is employed by the Corporation during the Term, Employee shall be entitled
to vacation leave of up to twenty (20) days per calendar year during the Term, prorated for any partial calendar year of employment
during the Term.  Employee will use Employee’s vacation leave at times and in a manner so as to minimize disruption
to the operations of the Corporation.  The Corporation also agrees that Employee shall be entitled to sick leave of up to
five (5) days per calendar year during the Term, prorated for any partial calendar year of employment during the Term.  Employee
will accrue and be permitted to use vacation and sick leave in accordance with the Corporation’s vacation and sick leave
policies and practices as in effect from time to time. 

 

4.6.     
Business Expenses.  While Employee is employed by the Corporation during the Term, the Corporation shall reimburse
Employee for all reasonable and necessary out-of-pocket business, travel and entertainment expenses incurred by Employee in the
performance of Employee’s duties and responsibilities hereunder, subject to the Corporation’s normal policies and
procedures for expense verification and documentation.

 

4.7.     
Other Benefits:  During the Term, the Corporation shall directly pay the cost of a cell phone or wireless handheld
device for the Employee’s use. Additionally, during the Term, the Corporation shall provide Employee a housing and automobile
allowance of up to an aggregate amount of $1,000.00 per month. The Corporation shall also provide a corporate credit card for
approved business expenses and shall otherwise reimburse the Employee for, or pay directly, all reasonable business expenses incurred
by the Employee in the performance of Employee’s duties under this Agreement, provided that the Employee incurs and accounts
for such expenses in accordance with all Corporation policies and directives in effect from time to time.

 

3

 

 

5.           
Termination of Employment. 

 

5.1.       
Termination of Employment Events. Employee’s employment with the Corporation is at-will. Employee’s employment
with the Corporation will terminate as follows:

 

	 

	(a)

	The
effective date following written notice from the Corporation of the termination of Employee’s employment as specified herein;

 

	 

	(b)

	Employee’s
abandonment of Employee’s employment or the effective date of Employee’s resignation for Good Reason (as defined
below) or any other reason (as specified in written notice from Employee);

 

	 

	(c)

	After
thirty (30) days’ advance written notice to Employee by the Corporation of termination of Employee’s employment
for Employee’s Disability (as defined below); or

 

	 

	(d)

	Immediately
upon Employee’s death.

 

5.2.       
Termination Date.  The date upon which Employee’s termination of employment with the Corporation is effective
is the “Termination Date.”  For purposes of Sections 6.1,  6.2 and 7 only, with respect to the timing of
the Pre-CIC Severance Payment or the Post-CIC Severance Payment (as applicable) and the Pre-CIC Benefits Continuation Payments
or the Post-CIC Benefits Continuation Payments (as applicable), and the additional amounts identified in Section 7 (if applicable),
the Termination Date means the date on which a “separation from service” has occurred for purposes of Section 409A
of the Internal Revenue Code, as amended, and the regulations and guidance thereunder (the “Code”). 

 

6.           
Payments Upon Termination of Employment. 

 

6.1.       
Termination of Employment Without Cause or by Employee for Good Reason During the Term and Before the First Change in Control. 
If Employee’s employment with the Corporation is terminated during the Term by the Corporation, for any reason other than
for Cause (as defined in Section 6.4), or by Employee for Good Reason (as defined in Section 6.6), and the Termination Date occurs
before the date of the first Change in Control (as defined in Section 6.5) to occur during the Term, then the Corporation shall,
in addition to paying Employee’s Base Salary and other compensation and benefits earned through the Termination Date, and
subject to Section 6.9,

 

	 

	(a)

	pay
to Employee as severance pay an amount equal to the sum of (i) one (1) times Employee’s annualized Base Salary as of the
Termination Date, plus (ii) an amount equal to one hundred percent (100%) of Employee’s target annual bonus based on Employee’s
individual performance for the fiscal year in which the Termination Date occurs, plus (iii) an amount equal to Employee’s
target annual bonus based on the Corporation’s performance for the fiscal year in which the Termination Date, multiplied
by a fraction, the numerator of which is the number of days Employee was employed by the Corporation during the fiscal year in
which the Termination Date occurs and the denominator of which is 365, less all legally required and authorized deductions and
withholdings, payable in a lump sum on the Corporation’s first regular payroll date that is after the expiration of all
rescission periods identified in the Release (as defined in Section 6.9) but in no event later than seventy-five (75) days after
the Termination Date (the “Pre-CIC Severance Payment”);

 

4

 

 

	 

	(b)

	if
Employee is eligible for and takes all steps necessary to continue Employee’s group health insurance coverage with the
Corporation following the Termination Date (including completing and returning the forms necessary to elect COBRA coverage), pay
for the portion of the premium costs for such coverage that the Corporation would pay if Employee remained employed by the Corporation,
at the same level of coverage that was in effect as of the Termination Date, through the earliest of: (i) the twelve (12) month
anniversary of the Termination Date, (ii) the date Employee becomes eligible for group health insurance coverage from any other
employer or eligible for Medicare upon reaching age 65, or (iii) the date Employee is no longer eligible to continue Employee’s
group health insurance coverage with the Corporation under applicable law (“Pre-CIC Benefits Continuation Payments”).

 

6.2.        
Termination of Employment Without Cause or by Employee for Good Reason  During the Term and Within Twelve (12) Months
after the First Change in Control.  If Employee’s employment with the Corporation is terminated during the Term
by the Corporation for any reason other than for Cause (as defined in Section 6.4), or by Employee for Good Reason (as defined
in Section 6.6), and the Termination Date occurs on or within twelve (12) months after the date of the first Change in Control
(as defined in Section 6.5) to occur during the Term, then the Corporation shall, in addition to paying Employee’s Base
Salary and other compensation and benefits earned through the Termination Date, and subject to Section 6.9,

 

	 

	(a)

	pay
to Employee as severance pay an amount equal to the sum of (i) 1.5 times Employee’s annualized Base Salary as of the Termination
Date, plus (ii) an amount equal to one hundred fifty percent (150%) of  Employee’s target annual bonus based on Employee’s
individual performance for the fiscal year in which the Termination Date occurs, plus (iii) an amount equal to Employee’s
target annual bonus based on the Corporation’s performance for the fiscal year in which the Termination Date, multiplied
by a fraction, the numerator of which is the number of days Employee was employed by the Corporation during the fiscal year in
which the Termination Date occurs and the denominator of which is 365, less all legally required and authorized deductions and
withholdings, payable in a lump sum on the Corporation’s first regular payroll date that is after the expiration of all
rescission periods identified in the Release (as defined in Section 6.9) but in no event later than seventy-five (75) days after
the Termination Date (the “Post-CIC Severance Payment”); and

 

	 

	(b)

	if
Employee is eligible for and takes all steps necessary to continue Employee’s group health insurance coverage with the
Corporation following the Termination Date (including completing and returning the forms necessary to elect COBRA coverage), pay
for the portion of the premium costs for such coverage that the Corporation would pay if Employee remained employed by the Corporation,
at the same level of coverage that was in effect as of the Termination Date, through the earliest of: (i) the eighteen (18) month
anniversary of the Termination Date, (ii) the date Employee becomes eligible for group health insurance coverage from any other
employer or eligible for Medicare upon reaching age 65, or (iii) the date Employee is no longer eligible to continue Employee’s
group health insurance coverage with the Corporation under applicable law (“Post-CIC Benefits Continuation Payments”);
and

 

5

 

 

	 

	(c)

	all
outstanding unvested equity-based awards granted to Employee during her continuous employment with the Company preceding the Termination
Date (“Equity Awards”) will be affected as follows: (i) stock options or stock appreciation rights will become
fully vested and exercisable for the remainder of their full term (ii) Equity Awards, other than stock options and stock
appreciation rights, that do not vest based on the attainment of performance goals, will become fully vested and the restrictions
thereon will lapse; provided that any delays in the settlement or payment of such awards that are set forth in the applicable
award agreement and that are required under Section 409A of the Code will remain in effect, and (iii) all Equity Awards,
other than stock options and stock appreciation rights, that vest based on the attainment of performance goals will remain outstanding
and will vest or be forfeited in accordance with the terms of the applicable award agreements if and to the extent that the applicable
performance criteria is satisfied.

 

6.3.        Other
Termination of Employment Events. If Employee’s employment with the Corporation is terminated by the Corporation or
Employee for any reason upon or following the expiration of the Term, or if Employee’s employment with the Corporation
is terminated during the Term by reason of:

 

	 

	(a)

	Employee’s
abandonment of Employee’s employment or Employee’s resignation for any reason other than Good Reason;

 

	 

	(b)

	termination
of Employee’s employment by the Corporation for Cause; or

 

	 

	(c)

	Employee’s
death or Disability,

 

then
the Corporation shall pay to Employee or Employee’s beneficiary or Employee’s estate, as the case may be, Employee’s
Base Salary, any earned but unpaid non-equity incentive compensation and other compensation earned through the Termination Date,
and Employee shall not be eligible or entitled to receive any severance pay or benefits from the Corporation.

 

6.4.       
Cause Defined.  “Cause” hereunder means:

 

	 

	(a)

	Employee’s
material failure to perform Employee’s job duties competently as reasonably determined by the Board;

 

	 

	(b)

	gross
misconduct by Employee which the Board determines is (or will be if continued) demonstrably and materially damaging to the Corporation;

 

6

 

 

	 

	(c)

	fraud,
misappropriation, or embezzlement by Employee;

 

	 

	(d)

	conviction
of a felony crime or a crime of moral turpitude;

 

or

 

	 

	(e)

	the
material breach of this Agreement or the Restrictive Covenants Agreement by Employee.

 

With
respect to Section 6.4(a), Section 6.4(b) and Section 6.4(e), the Corporation shall first provide Employee with written notice
and an opportunity to cure such breach, if curable, in the reasonable discretion of the Corporation’s Board, and identify
with specificity the action needed to cure within thirty (30) days of Employee’s receipt of written notice from the Corporation.
If the Corporation terminates Employee’s employment for Cause pursuant to this Section 6.4, then Employee shall not be
eligible or entitled to receive any severance pay or benefits from the Corporation. 

 

6.5.       
Change in Control Defined.  “Change in Control” hereunder means: 

 

	 

	(a)

	A
“change in ownership,” as described in Section 1.409A-3(i)(5)(v) of the Treasury Regulations;

 

	 

	(b)

	A
“change in effective control,” as described in Section 1.409A-3(i)(5)(vi) of the Treasury Regulations; or

 

	 

	(c)

	A
“change in ownership of a substantial portion of the assets,” as described in Section 1.409A-3(i)(5)(vii) of the Treasury
Regulations. 

 

6.6.       
Good Reason Defined.  “Good Reason” hereunder means the initial occurrence of any of the following events
without Employee’s consent:

 

	 

	(a)

	a
material diminution in the Employee’s responsibilities, authority or duties; or

 

	 

	(b)

	a
material diminution in the Employee’s salary, other than pursuant to a reduction in the salary for all executive employees
of the Corporation and its affiliates, applied on a pro rata basis to all salaried executives including Employee;

 

	 

	(c)

	receipt
by Employee of a written non-renewal of this Agreement by the Corporation in accordance with Section 2; or

 

	 

	(d)

	the
material breach of this Agreement by the Corporation.

 

provided,
however, that “Good Reason” shall not exist unless Employee has first provided written notice to the Corporation detailing
one or more of the conditions under clauses (a) through (d) above within ninety (90) days after Employee’s actual knowledge
of the initial occurrence of such alleged Good Reason event, and such condition is not fully remedied by the Corporation within
thirty (30) days after the Corporation’s receipt of written notice from Employee, and the Termination Date as a result
of such event occurs within thirty (30) days after the Corporation’s thirty (30) day cure period.   For purposes
of this Section 6.6, a notice shall be sufficient if it is transmitted by facsimile or email to the Board and if it provides a
general indication of the nature of the asserted acts, omissions, breach or breaches triggering “Good Reason.”

 

7

 

 

6.7.     
Disability Defined.  “Disability” hereunder means the inability of Employee to perform, with or without
reasonable accommodation, the essential duties and responsibilities of Employee’s employment with the Corporation by reason
of Employee’s illness or other physical or mental impairment or condition, if such inability continues for an uninterrupted
period of at least one hundred (100) days or more during any 360-day period.  A period of inability shall be “uninterrupted”
unless and until Employee returns to full-time work for a continuous period of at least thirty (30) days. This Section 6.7 does
not relieve the Corporation of any duty to reasonably accommodate a qualifying disability under the Americans with Disabilities
Act, the Minnesota Human Rights Act, any legal duty under the Family Medical Leave Act, or any of its other duties pursuant to
applicable law.

 

6.8.     
The Corporation’s Sole Obligation.  In the event of termination of Employee’s employment, the sole obligation
of the Corporation shall be its obligation to make the payments called for by Section 6.1, Section 6.2 or Section 6.3, as the
case may be, and the Corporation shall have no other obligation to Employee or to Employee’s beneficiary or Employee’s
estate, except for any amounts due under the terms of any employee benefit plans or programs then maintained by the Corporation
in which Employee participates. 

 

6.9.     
Conditions To Receive the Pre-CIC Severance Payment or the Post-CIC Severance Payment and the Pre-CIC Benefits Continuation
Payments or the Post-CIC Benefits Continuation Payments.  Notwithstanding the foregoing provisions of this Section 6,
the Corporation will not be obligated to make the Pre-CIC Severance Payment under Section 6.1 or the Post-CIC Severance Payment
under Section 6.2 (as applicable) or the Pre-CIC Benefits Continuation Payments under Section 6.1 or the Post-CIC Benefits Continuation
Payments under Section 6.2 (as applicable) to or on behalf of Employee unless (a) Employee signs a general release of claims in
favor of the Corporation in a form to be reasonably prescribed by the Corporation and which shall not release and/or waive Employee’s
right to seek to be defended and indemnified by the Corporation in accordance with and subject to the Corporation’s Articles
of Incorporation and Minnesota law (the “Release”), (b) all applicable consideration periods and rescission periods
provided by law with respect to the Release have expired without Employee rescinding the Release, and (c) Employee is in strict
compliance with the terms of this Agreement and the Restrictive Covenants Agreement and any other written agreement between Employee
and the Corporation. 

 

8

 

 

7.          
Anticipatory Termination; Additional Severance.  If a Pre-CIC Termination Event (as defined
below) occurs during the Term, then, subject to Employee satisfying the same conditions identified in Section 6.9 in exchange
for Employee’s receipt of the additional amounts identified in this Section 7, the Corporation shall provide to Employee
(in addition to making the Pre-CIC Severance Payment and the Pre-CIC Benefits Continuation Payments under Section 6.1):

 

	 

	(a)

	an
amount equal to the sum of (i) fifty percent (50%)
of Employee’s annualized Base Salary as of the Termination Date, plus (ii) fifty percent (50%) of Employee’s target
annual bonus based on Employee’s individual performance for the fiscal year in which the Termination Date occurs,
less all legally required and authorized deductions and withholdings, payable in a lump sum on the Corporation’s
first regular payroll date that is after the expiration of all rescission periods identified in the Release (as defined in Section
6.9) but in no event later than seventy-five (75) days after the date of the Change in Control; and

 

	 

	(b)

	if
Employee is eligible for and takes all steps necessary to continue Employee’s group health insurance coverage with the
Corporation following the Termination Date (including completing and returning the forms necessary to elect COBRA coverage), pay
for the portion of the premium costs for such coverage that the Corporation would pay if Employee remained employed by the Corporation,
at the same level of coverage that was in effect as of the Termination Date, from the end of the payment of the Pre-CIC Benefits
Continuation Payments under Section 6.1 through the earliest of: (i) the eighteen (18) month anniversary of the Termination Date,
(ii) the date Employee becomes eligible for group health insurance coverage from any other employer or eligible for Medicare upon
reaching age 65, or (iii) the date Employee is no longer eligible to continue Employee’s group health insurance coverage
with the Corporation under applicable law.

 

For
purposes of this Section 7, a “Pre-CIC Termination Event” means an involuntary termination of  Employee’s
employment by the Corporation without Cause, or Nonrenewal of the Term, resulting in a Termination Date that is within sixty (60)
days prior to the Change in Control; provided that Employee reasonably demonstrates that such termination (i) was requested by
a party other than the Board that has taken other steps reasonably calculated to result in the Change in Control, or (ii) otherwise
arose in connection with or in anticipation of the Change in Control.

 

8.          
Section 409A and Taxes Generally.

 

8.1.       
Taxes.  The Corporation shall be entitled to withhold on and report the making of such payments as may be required
by law as determined in the reasonable discretion of the Corporation.  Except for any tax amounts withheld by the Corporation
from any compensation that Employee may receive in connection with Employee’s employment with the Corporation and any employer
taxes required to be paid by the Corporation under applicable laws or regulations, Employee is solely responsible for payment
of any and all taxes owed in connection with any compensation, benefits, reimbursement amounts or other payments Employee receives
from the Corporation under this Agreement or otherwise in connection with Employee’s employment with the Corporation. 
The Corporation does not guarantee any particular tax consequence or result with respect to any payment made by the Corporation. 

  

9

 

 

8.2.       
Section 409A.  This Agreement is intended to provide for payments that satisfy, or are exempt from, the requirements
of Section 409A, including Sections 409A(a)(2), (3) and (4) of the Code and current and future guidance and regulations interpreting
such provisions, and should be interpreted accordingly.  In furtherance of the foregoing, the provisions set forth below
shall apply notwithstanding any other provision in this Agreement: 

 

(a)
       all payments to be made to Employee hereunder, to the extent they constitute a deferral of
compensation subject to the requirements of Section 409A (after taking into account all exclusions applicable to such payments
under Section 409A), shall be made no later, and shall not be made any earlier, than at the time or times specified in this Agreement
or in any applicable plan for such payments to be made, except as otherwise permitted or required under Section 409A; 

 

(b)
       the date of Employee’s “separation from service”, as defined in Section
409A (and as determined by applying the default presumptions in Treas. Reg. §1.409A-1(h)(1)(ii)), shall be treated as the
date of Employee’s termination of employment for purposes of determining the time of payment of any amount that becomes
payable to Employee related to Employee’s termination of employment under Section 6.1 or Section 6.2, and any reference
to Employee’s “Termination Date” or “termination” of Employee’s employment in Section 6.1
or Section 6.2 shall mean the date of Employee’s “separation from service”, as defined in Section 409A (and
as determined by applying the default presumptions in Treas. Reg. §1.409A-1(h)(1)(ii));

 

(c)       
in the case of any amounts payable to Employee under this Agreement that may be treated as payable in the form of “a series
of installment payments”, as defined in Treas. Reg. §1.409A-2(b)(2)(iii), Employee’s right to receive such payments
shall be treated as a right to receive a series of separate payments for purposes of Treas. Reg. §1.409A-2(b)(2)(iii); 

 

(d)
       to the extent that the reimbursement of any expenses eligible for reimbursement or the provision
of any in-kind benefits under any provision of this Agreement would be considered deferred compensation under Section 409A (after
taking into account all exclusions applicable to such reimbursements and benefits under Section 409A): (i) reimbursement of any
such expense shall be made by the Corporation as soon as practicable after such expense has been incurred, but in any event no
later than December 31st of the year following the year in which Employee incurs such expense; (ii) the amount of such
expenses eligible for reimbursement, or in-kind benefits to be provided, during any calendar year shall not affect the amount
of such expenses eligible for reimbursement, or in-kind benefits to be provided, in any calendar year; and (iii) Employee’s
right to receive such reimbursements or in-kind benefits shall not be subject to liquidation or exchange for another benefit;

 

 

10

 

 

(e)
      to the extent any payment or delivery otherwise required to be made to Employee hereunder on account
of Employee’s separation from service is properly treated as a deferral of compensation subject to Section 409A after taking
into account all exclusions applicable to such payment and delivery under Section 409A, and if Employee is a “specified
employee” under Section 409A at the time of Employee’s separation from service, then such payment and delivery shall
not be made prior to the first business day after the earlier of (i) the expiration of six months from the date of Employee’s
separation from service, or (ii) the date of Employee’s death (such first business day, the “Delayed Payment Date”),
and on the Delayed Payment Date, there shall be paid or delivered to Employee or, if Employee has died, to Employee’s estate,
in a single payment or delivery (as applicable) all entitlements so delayed, and in the case of cash payments, in a single cash
lump sum, an amount equal to aggregate amount of all payments delayed pursuant to the preceding sentence.  Except for any
tax amounts withheld by the Corporation from the payments or other consideration hereunder and any employment taxes required to
be paid by the Corporation, Employee shall be responsible for payment of any and all taxes owed in connection with the consideration
provided for in this Agreement; and

 

(f)       
the Parties agree that this Agreement may be amended, as may be necessary to fully comply with, or to be exempt from, Section
409A and all related rules and regulations in order to preserve the payments and benefits provided hereunder without additional
cost to either Party.

 

9.          
Miscellaneous.

 

9.1.       
Integration.  This Agreement and the Restrictive Covenants Agreement embody the entire agreement and understanding
among the Parties relative to subject matter hereof and combined supersede all prior agreements and understandings relating to
such subject matter, including but not limited to the Original Agreement and any earlier offers to Employee by the Corporation.

 

9.2.       
Applicable Law.  All matters relating to the interpretation, construction, application, validity and enforcement of
this Agreement are governed by the laws of the State of Minnesota without giving effect to any choice or conflict of law provision
or rule, whether of the State of Minnesota or any other jurisdiction, that would cause the application of laws of any jurisdiction
other than the State of Minnesota.

 

9.3.       
Choice of Jurisdiction.  Employee and the Corporation consent to jurisdiction of the courts of the State of Minnesota
and/or the federal district courts, District of Minnesota, for the purpose of resolving all issues of law, equity, or fact, arising
out of or in connection with this Agreement or Employee’s employment with the Corporation or the termination of such employment. 
Any action involving claims for interpretation, breach or enforcement of this Agreement or related to Employee’s employment
with the Corporation or the termination of such employment shall be brought in such courts.  Each party consents to personal
jurisdiction over such party in the state and/or federal courts of Minnesota and hereby waives any defense of lack of personal
jurisdiction or inconvenient forum. 

 

9.4.       
Employee’s Representations.  Employee represents that Employee is not subject to any agreement or obligation
that would prevent or limit Employee from entering into this Agreement or that would be breached upon performance of Employee’s
duties under this Agreement, including but not limited to any duties owed to any former employers not to compete.  If Employee
possesses any information that Employee knows or should know is considered by any third party, such as a former employer of Employee’s,
to be confidential, trade secret, or otherwise proprietary, Employee shall not disclose such information to the Corporation or
use such information to benefit the Corporation in any way.

 

9.5.       
Counterparts.  This Agreement may be executed in several counterparts and as so executed shall constitute one agreement
binding on the Parties.

 

11

 

 

9.6.     
Assignment and Successors.   The rights and obligations of the Corporation under this Agreement shall inure to
the benefit of and will be binding upon the successors and assigns of the Corporation, provided any such successor or assignee
assumes all of the Corporation’s obligations under this Agreement.  Neither party may, without the written consent
of the other party, assign or delegate any of its rights or obligations under this Agreement except that the Corporation may,
without any further consent of Employee, assign or delegate any of its rights or obligations under this Agreement to any corporation
or other business entity (a) with which the Corporation may merge or consolidate, (b) to which the Corporation may sell or transfer
all or substantially all of its assets or capital stock or equity, or (c) any affiliate or subsidiary of the Corporation. 
After any such assignment or delegation by the Corporation, the Corporation will be discharged from all further liability hereunder
and such assignee will thereafter be deemed to be the “Corporation” for purposes of all terms and conditions of this
Agreement, including this Section 9.6.  Employee may not assign this Agreement or any rights or obligations hereunder. 
Any purported or attempted assignment or transfer by Employee of this Agreement or any of Employee’s duties, responsibilities,
or obligations hereunder is void.

 

9.7.     
Modification.  This Agreement shall not be modified or amended except by a written instrument signed by the Parties.

 

9.8.     
Severability.  The invalidity or partial invalidity of any portion of this Agreement shall not invalidate the remainder
thereof, and said remainder shall remain in fully force and effect.

 

9.9.     
Opportunity to Obtain Advice of Counsel.  Employee acknowledges that Employee has been advised by the Corporation
to obtain legal advice prior to executing this Agreement, and that Employee had sufficient opportunity to do so prior to signing
this Agreement.

 

9.10.   
Indemnification.  As to acts or omissions of Employee which are within the scope of Employee’s authority as
an officer, director, or employee of the Corporation and/or any affiliate of the Corporation, the Corporation will indemnify Employee
in accordance with and subject to the limitations contained in its Articles of Incorporation, Bylaws and Section 302A.521 of the
Minnesota Business Corporations Act.  If Employee is made or threatened to be made a party to any threatened, pending, or
completed civil, criminal, administrative, arbitration, or investigative proceeding, including a proceeding by or in the right
of the corporation, Employee is entitled, upon written request to the Corporation, to payment or reimbursement by the Corporation
of reasonable expenses, including attorneys’ fees and disbursements, incurred by Employee in advance of the final disposition
of the proceeding, (a) upon receipt by the Corporation of a written affirmation by Employee of a good faith belief that the criteria
for indemnification set forth in Section 302A.521, subdivision 2 of the Minnesota Business Corporations Act have been satisfied
and a written undertaking by Employee to repay all amounts so paid or reimbursed by the Corporation, if it is ultimately determined
that the criteria for indemnification have not been satisfied, and (b) after a determination that the facts then known to those
making the determination would not preclude indemnification under the Corporation’s Articles of Incorporation and Bylaws
and Section 302A.521 of the Minnesota Business Corporations Act, including but not limited to whether the alleged misconduct by
Employee that is the subject of the proceeding is within the course and scope of Employee’s employment.

 

9.11.   
D&O Insurance. The Corporation shall maintain an insurance policy or policies providing directors’ and officers’
liability insurance, comprehensive general liability insurance, and errors and omissions insurance, and the Employee shall be
covered by such policy or policies, in accordance with its or their terms, to the maximum extent of the coverage available for
any officer of the Corporation.

 

12

 

 

9.12.   
280G Limitations.  In the event that the severance and other benefits provided for in this Agreement or otherwise
payable to Employee (a) constitute “parachute payments” within the meaning of Section 280G of the Code and (b) would
be subject to the excise tax imposed by Code Section 4999, then such benefits shall be either be: (i) delivered in full, or (ii)
delivered as to such lesser extent which would result in no portion of such severance benefits being subject to excise tax under
Code Section 4999, whichever of the foregoing amounts, taking into account the applicable federal, state and local income and
employment taxes and the excise tax imposed by Code Section 4999, results in the receipt by Employee, on an after-tax basis, of
the greatest amount of benefits, notwithstanding that all or some portion of such benefits may be subject to excise tax under
Code Section 4999. Any determination required under this Section 9.12 will be made in writing by an accounting firm selected by
the Corporation or such other person or entity to which the parties mutually agree (the “Accountants”), whose determination
will be conclusive and binding upon Employee and the Corporation for all purposes.  For purposes of making the calculations
required by this Section 9.12, the Accountants may make reasonable assumptions and approximations concerning applicable taxes
and may rely on reasonable, good faith interpretations concerning the application of Code Sections 280G and 4999. The Corporation
and Employee shall furnish to the Accountants such information and documents as the Accountants may reasonably request in order
to make a determination under this Section. The Corporation shall bear all costs the Accountants may reasonably incur in connection
with any calculations contemplated by this Section 9.12.  Any reduction in payments and/or benefits required by this Section
9.12 shall occur in the following order: (A) cash payments shall be reduced first and in reverse chronological order such that
the cash payment owed on the latest date following the occurrence of the event triggering such excise tax will be the first cash
payment to be reduced; (B) accelerated vesting of stock awards, if any, shall be cancelled/reduced next and in the reverse order
of the date of grant for such stock awards (i.e., the vesting of the most recently granted stock awards will be reduced first),
with full-value awards reversed before any stock option or stock appreciation rights are reduced; and (C) deferred compensation
amounts subject to Section 409A shall be reduced last.

 

[Signature
Page Follows]

 

13

 

 

THIS
AMENDED AND RESTATED EMPLOYMENT AGREEMENT was voluntarily and knowingly executed by the Parties effective as of the Effective
Date first set forth above.

 

	 

	ELECTROMED,
INC.

	 

	 

	Date:
December 2, 2019

	/s/
Stephen H. Craney

	 

	By: 
Stephen H. Craney

	 

	Its: 
Chairman

	 

	 

	 

	EMPLOYEE:

	 

	 

	Date:
December 2, 2019

	/s/
Kathleen S. Skarvan

	 

	Kathleen
S. Skarvan

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00302-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00302-of-00352.parquet"}]]