Document:

Exhibit 10.13

 

RECEIVABLES PURCHASE AGREEMENT

 

This
Receivables Purchase Agreement is dated November 16, 2020 and is entered into between the Client identified in the Term
Sheet and WFC Fund, LLC (“Factor”). Client desires to sell Receivables to Factor and Factor desires to purchase
certain Receivables from Client. The parties therefore agree as follows:

 

		1.	The following Term Sheet lists certain of the business terms on which Factor
will purchase Receivables from Client.

 

Term Sheet

 

	Client:	iPower Inc.
	Client’s Entity Type:	Corporation
	Client’s State of Formation:	Nevada
	Client’s Address:	2399 Bateman Ave, Irwindale, CA 91010
	Guarantor:	Chenlong (Lawrence) Tan
	Facility Limit:	$3,000,000.00
	Invoice Fee Rate:	0.00%
	Expected Term:	110 days
	Discount Rate:	3.055555%
	Discount Rate Rebate/Day:	0.0277% per day
	Advance Rate:	70%
	Term:	1 year from Effective Date
	Payment Day:	LAST DAY OF THE MONTH
	Advance Transfer Method:	ACH
	Wire Transfer Fee:	$100.00
	Origination Fee:	$0.00
	Deposit Account Control Agreement:	No
	Termination Fee:	1.0% of the Facility Limit if termination occurs six months or more prior to the end of the initial Term.
	Maximum Term:	With respect to a Receivable, the date on which the Receivable becomes 60 days past due, for any reason other than Credit Risk.

 

	2.	The Standard Terms and Conditions set forth on Annex A are incorporated in
and made a part of this Receivables Purchase Agreement.

 

	3.	This Receivables Purchase Agreement contains a waiver of jury trial rights
and an arbitration provision. You may opt out of the arbitration provision, but not the waiver of jury trial rights.

 

[signature page to follow]

 

 

 

    	 	1	 

     

    

 

Client and Factor have duly executed this Agreement
to be effective as of the date set forth in the introductory paragraph.

 

	FACTOR	 	CLIENT
	WFC
Fund, LLC	 	iPower, Inc.
	 	 	 
	 	 	 
	By: /s/ Chris Atkins	 	By: /s/ Chenlong Tan
	Print Name: Chris Atkins	 	Print Name: Chenlong Tan
	Title: SVP	 	Title CEO

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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ANNEX A – STANDARD TERMS AND CONDITIONS

 

These Standard Terms and Conditions are incorporated
in and form a part of the Receivables Purchase Agreement between the Client identified in the Term Sheet and WFC Fund LLC, as Factor.

 

Article 1

SALE AND PURCHASE
OF RECEIVABLES

 

		1.1	Sale and Purchase.

 

(a)                
Client agrees to assign and sell to Factor, as absolute owner, all of Client’s right, title, and interest in (i) all
of its present and future Receivables, (ii) all books and records relating the Receivables, (iii) all deposits or other security
for the obligation of any person relating to the Receivables, (iv) all goods relating to the Receivables, including goods returned
by a Customer, (v) all rights against third parties with respect to the Receivables, and (vi) all proceeds of the foregoing.

 

(b)               
Factor may purchase such Receivables from Client as Factor determines are Eligible Receivables so long as, at any time,
the total outstanding Face Amount of all Purchased Receivables does not exceed the Facility Limit. Factor may decline to purchase
any Receivable.

 

(c)                
Upon Factor’s acceptance of a Receivable for assignment and sale, the Receivable will be deemed sold by Client and
purchased by Factor, as absolute owner, without further action or documentation.

 

(d)                
Except as set forth in Section 1.4 of this Agreement, all purchases of Eligible Receivables will be without recourse to
Client. Upon purchase of an Eligible Receivable, Factor assumes the Credit Risk for such Eligible Receivable but not the risk of
non-payment for any other reason.

 

		1.2	Purchase Price. Factor shall pay for each Receivable purchased from Client the Purchase Price
as follows:

 

(a)                On the Purchase Date, Factor shall
pay to Client, by crediting the Client Account, an amount equal to the Purchase Price for such Receivable multiplied by the Advance
Rate.

 

(b)               
After collection of the Receivable by Factor, Factor shall pay to Client, by crediting the Client Account, the unpaid balance
of the Purchase Price minus any Collection Charges and any fees or expenses owed to Factor.

 

1.3         
Reserve. Factor shall be entitled to withhold a Reserve from the payment of any amount owed to Client, and may revise
the Reserve at any time and from time to time if Factor deems it necessary to do so in order to protect Factor’s interests.
Factor may charge against the Reserve any amount for which Client may be obligated to Factor at any time, whether under the terms
of this Agreement, or otherwise, including the payment of any Repurchase Price, any adjustments due, all Obligations and any attorneys’
fees, costs and disbursements due. Client recognizes that the Reserve represents bookkeeping entries only and not cash funds. With
respect to the balance in the Reserve, Factor is authorized to withhold, without giving prior notice to Client, such payments and
credits otherwise due to Client under the terms of this Agreement for reasonably anticipated claims or to adequately satisfy reasonably
anticipated obligations Client may owe Factor.

 

 

 

    	 	3	 

     

    

 

		1.4	Disputes and Repurchase.

 

(a)                
Client shall immediately notify Factor in writing of any dispute between Client and a Customer concerning a Purchased Receivable.
Factor may settle any Dispute with a Customer though Factor has no obligation to do so. Any settlement will not relieve Client
of any Obligation (including the obligation to pay the Repurchase Price) under this Agreement.

 

(b)                
If a Dispute occurs with respect to a Purchased Receivable, then Client shall immediately repurchase the Purchased Receivable
from Factor by paying the Repurchase Price to Factor.

 

(c)                
If a Purchased Receivable remains unpaid beyond the Maximum Term for any reason other than Credit Risk, then Client shall
immediately repurchase the Purchased Receivable from Factor by paying the Repurchase Price to Factor.

 

(d)               
In addition and without limiting Sections 1.4(b) or 1.4(c), upon Factor’s demand, Client shall immediately repurchase
a Purchased Receivable by paying the Repurchase Price to Factor if (i) Client fails to timely deliver to Factor an assignment schedule
for the Eligible Receivable together with copies of the assigned invoices and such other information or documents as reasonably
requested by Factor, (ii) any representation or warranty made by Client with respect to the Eligible Receivable is untrue, incorrect,
or misleading at any time, (iii) any agreement made by Client under this Agreement with respect to the Eligible Receivable is breached,
(iv) Client is required to repurchase the Eligible Receivable under this Agreement, or (iv) Client terminates this Agreement.

 

Article 2

COLLECTIONS AND PAYMENTS

 

		2.1	Collections.

 

(a)                
Factor hereby appoints Client as Factor’s agent for the purpose of collecting the Receivables and Client hereby accepts
such appointment and agrees to perform all necessary and appropriate commercial collection activities in arranging the timely payment
of amounts due under a Receivable with reasonable care and diligence. Client shall instruct all Customers to make payments on Receivables
to Client at the address or bank account specified by Factor. Client shall not grant or approve any credit, discount, allowance,
negotiated term or deduction with respect to any account without Factor’s prior written consent.

 

(b)               
Upon the occurrence of an Event of Default or as otherwise determined by Factor at any time, Factor may notify all Customers
of the assignment of the Eligible Receivables and instruct the Customer to make payments directly to Factor and terminate Client’s
authority to collect the Receivables Following such termination of Client’s authority to collect the Receivables:

 

(1)                
Factor will have the exclusive right to collect any and all Receivables (whether or not purchased by Factor) and receive
payments on the Receivables. Client shall not attempt to collect or interfere in any manner with the collection of any Receivables.
Client shall pay all reasonable out-of-pocket expenses incurred by Factor in collection of the Receivables.

 

(2)                
Factor shall make a good faith, commercially reasonable effort to collect the Purchased Receivables. The collection of Receivables
in a commercially reasonable manner does not require Factor to commence any legal action, including the sending of an attorney’s
demand letter, to collect any Receivable. Client hereby waives and releases any and all claims relating to or arising out of any
act or omission by Factor in the collection of the Purchased Receivables.

 

 

 

    	 	4	 

     

    

 

(c)                
In the event a Customer makes payment to Client on a Purchased Receivable other than at the address or bank account specified
by Factor, Client shall immediately deliver the payment to Factor in the form received. Any payments received by Client on Purchased
Receivables shall be held in trust by Client for Factor.

 

(d)               
Upon Factor’s request, Client will cause all payments on all Receivables, whether or not Purchased Receivables, to
be sent directly to such address as may be designated by Factor. Factor is authorized to receive and open all such payments and
retain such amounts as are owing to Factor. Upon Factor’s request, Client will tender to Factor all payments received by
Client from a Customer on Receivables created after Client begins offering any Receivables of that Customer to Factor for purchase.
Upon such request being made, all such payments received by Client shall be the sole and exclusive property of Factor and shall
be held in trust by Client for Factor. All such payments shall be applied on obligations of that Customer to Factor. In the event
Factor receives any payment from a Customer on a Receivable which is not a Purchased Receivable, Factor may, subject to any rights
of the Customer, apply such payment to any other Obligation of Client owing to Factor.

 

(e)                
Once Factor purchases a Receivable, any and all payments from the Customer on the Receivable are the sole property of Factor.

 

(f)                 
If Factor receives payment on a Receivable that Factor did not purchase, so long as no Default Period exists, Factor will
credit the payment to the Client Account.

 

2.2        
Authorization by Client. Client hereby grants to Factor an irrevocable power of attorney authorizing and permitting
Factor, at its option, without notice to Client to do any or all of the following: (a) endorse the name of Client on any checks
or other evidences of payment whatsoever that may come into the possession of Factor regarding Accounts or Collateral, including
checks received by Factor; (b) receive, open and dispose of any mail addressed to Client and put Factor’s address on any
statements mailed to Customers; (c) pay, settle, compromise, prosecute or defend any action, claim, conditional waiver and release,
or proceeding relating to Receivables or Collateral; (d) during a Default Period, notify in the name of the Client, the U.S. Post
Office to change the address for delivery of mail addressed to Client to such address as Factor may designate, however, Factor
shall turn over to Client all such mail not relating to Receivables or Collateral; (e) file any financing statement deemed necessary
or appropriate by Factor to protect Factor’s interest in and to the Receivables or Collateral, or under any provision of
this Agreement; (f) effect debits to any deposit account or other account that Client or Client’s principals who have executed
a guaranty agreement maintain at any bank for any sums due to or from the Client under this Agreement; (g) during a Default Period,
to prepare and mail all invoices relating to Receivables; and (h) to take all actions necessary and proper in order to carry out
this Agreement. The authority granted to Factor herein is irrevocable until this Agreement is terminated and all Obligations are
fully satisfied.

 

		2.3	Administration.

 

(a)                
Factor shall record all debits, credits, and other entries for all transactions between Client and Factor, including purchases
of Eligible Receivables, Purchase Price payments, collections of Receivables, changes to the Reserve, and charges of discount,
costs, fees, expenses, and other Obligations. Factor will make available to Client a website or other statement for Client to review
the transactions. Each statement will be considered and binding on Client absent manifest error.

 

(b)                
Client shall, upon sale of any Receivables to Factor, make proper entries on its books and records disclosing the sale of
those Receivables to Factor.

 

 

 

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(c)                
Client unconditionally promises to pay to Factor all Obligations, as and when due, without deduction or setoff, regardless
of any defense or counterclaim, in accordance with this Agreement. Client hereby irrevocably authorizes Factor, from time to time
and without prior notice to Client, to charge all Obligations, including, without limitation, the amount of any Repurchase Price,
all discount, costs, fees, expenses and other charges payable by Client hereunder or under any of the Related Agreements, to the
Client Account maintained by Factor.

 

(d)                
Factor will credit the Client Account in the amount of the Proceeds of any Receivable three Business Days after Factor receives
payment for such Receivable. So long as no Default Period exists, at Client’s written request, subject to Factor’s
right to withhold Reserves, any credit balance in the Client Account shall be released to the Client. During a Default Period,
Factor may hold any credit balance in the Client Account as a Reserve or as additional Collateral for the Obligations. Should the
Client Account at any time have a deficit balance, Client shall immediately pay to Factor the amount of such deficit plus accrued
interest thereon at the Default Rate.

 

		2.4	Payments Generally.

 

(a)                
If any date on which a payment is due falls on a day that is not a Business Day, payment shall be made on the next Business
Day, and fees shall continue to accrue during that time period.

 

(b)               
Any and all payments by or on account of any obligation of Client under any Related Agreement shall be made without deduction
or withholding for any Taxes, or, if required by Applicable Law, shall be increased as necessary so that after such deduction or
withholding has been made Factor receives an amount equal to the sum it would have received had no such deduction or withholding
been made. Client shall indemnify Factor, within 10 days after demand therefor, for the full amount of any Taxes (other than income
and franchise taxes owing by Factor) payable or paid by Factor or required to be withheld or deducted from a payment to Factor
and any reasonable expenses arising therefrom or with respect thereto, whether or not such Taxes were correctly or legally imposed
or asserted by the relevant Governmental Authority. Client shall timely pay all present or future stamp, court or documentary,
intangible, recording, filing or similar taxes that arise from any payment made under, from the execution, delivery, performance,
enforcement or registration of, from the receipt or perfection of a Lien under, or otherwise with respect to, any Related Agreement.

 

Article 3

FEES AND CHARGES

 

3.1          Invoice Fees. Client shall
pay Factor a fee equal to the Invoice Fee Rate multiplied by the face amount of each Purchased Receivable (the “Invoice
Fee”). The Invoice Fee shall be fully earned by Factor for the services of reconciling invoices and providing the Platform
and payable monthly in arrears on the Payment Day of each calendar month.

 

3.2         
Wire Fee. If Client elects to be paid by wire transfer, Factor will charge a fee in the amount of the Wire Transfer
Fee indicated on the Term Sheet for each wire transfer.

 

3.3         
Collection Charges. If any Purchased Receivable remains unpaid after its Due Date for any reason other than Credit Risk,
Client shall pay to Factor a fee equal to the Face Amount of the Purchased Receivable multiplied by the Discount Rate, calculated
for each day the Purchased Receivable remains unpaid after its Due Date (the “Late Collection Charge”).

 

 

 

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3.4         
Default Fee. During a Default Period or at any time following the Termination Date, as applicable, in Factor’s
sole discretion and without waiving any of its other rights or remedies, a Default Fee shall accrue on the daily net balance of
outstanding Obligations at an annual rate equal to the 15% (the “Default Fee”) or any lesser rate that Factor
may deem appropriate, starting on the day the Default Period begins through the last day of that Default Period.

 

3.5         
Nonrecourse Sale of Receivables (THIS IS NOT A LOAN). Client is selling Receivables to Factor at a discount, not borrowing
money from Factor. There is no interest rate and Factor is assuming the Credit Risk of the Receivables. Client shall not account
for the transactions contemplated in this Agreement in any manner other than as a sale of Receivables. Client will not retain any
interest in any Receivable sold hereunder and each sale of a Receivable shall be of all of Client’s right, title and interest
in such sold Receivable.

.

3.6        
Calculation of Discount and Default Rates. The Discount Rate and the Default Rate under this Agreement shall be calculated
on the basis of a 360-days-per-year factor applied to the number of actual days elapsed.

 

3.7         
Discount Rate Rebate. As an inducement for Client, Factor will a rebate a fixed amount of the Discount that Factor applied
in calculating the Purchase Price as set forth in the term sheet based on days paid prior to maturity to Client. THERE SHALL BE
NO REBATE ON ACCOUNTS COLLECTED BEYOND THE EXPECTED TERM. ANY REBATE TO WHICH CLIENT IS ENTITLED WILL BE PAID TO CLIENT OR CREDITED
TO CLIENT’S ACCOUNT UPON CLEARANCE OF FUNDS AS INVOICE SCHEDULES ARE COLLECTED BY FACTOR.

 

Article 4

TERM OF AGREEMENT

 

4.1        
Term. Unless terminated in accordance with this section,
this Agreement will be in full force and effect for the Term specified in the Term Sheet and will automatically extend for successive
12-month periods, unless 60 days prior to the end of the then-current term, Client notifies Factor of its intention to terminate
this Agreement at the end of the then-current term.

 

		4.2	Termination. The parties may terminate this Agreement as follows:

 

		(a)	Client may terminate this Agreement on 60 days’ prior written notice to Factor.

 

		(b)	Factor may terminate this Agreement on 30 days’ prior written notice to Client.

 

		(c)	Factor may terminate this Agreement at any time during a Default Period.

 

4.3         
Obligations on Termination. Upon termination of this Agreement, all Obligations, including any applicable Termination
Fee, will become immediately due and payable in full without further notice or demand.

 

4.4        
Repurchase. Upon termination, Client shall repurchase all outstanding Eligible Receivables purchased by Factor unless
outstanding due to Credit Risk, whether or not subject to a Dispute, as may be requested by Factor, by paying the Repurchase Price
to Factor for such Eligible Receivables.

 

 

 

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Article 5

SECURITY AGREEMENT

 

5.1        
Grant of Security Interest. To secure payment and performance of Seller’s obligations under this Agreement, but
not the Credit Risk of the Receivables, Client hereby grants to Factor a continuing security interest in all of its right, title
and interest in and to the Collateral, wherever located, whether now existing or hereafter arising or acquired.

 

		5.2	Perfection of Security Interest and Further Assurances.

 

(a)                
Client shall, from time to time, as may be required by Factor with respect to all Collateral, promptly take all actions
as may be reasonably requested by Factor to perfect the Lien of Factor in the Collateral, including, with respect to all Collateral
over which control may be obtained within the meaning of sections 8-106, 9- 104, 9-105, 9-106 and 9-107 of the UCC, section 201
of the federal Electronic Signatures in Global and National Commerce Act and, as the case may be, section 16 of the Uniform Electronic
Transactions Act, as applicable, Client shall promptly take all actions as may be reasonably requested from time to time by Factor
so that control of such Collateral is obtained and at all times held by Factor. All of the foregoing shall be at Client’s
sole cost and expense.

 

(b)                
Client hereby irrevocably authorizes Factor at any time and from time to time to file in any relevant jurisdiction any financing
statements and amendments thereto that contain the information required by Article 9 of the UCC of each applicable jurisdiction
for the filing of any financing statement or amendment relating to the Collateral, including any financing or continuation statements
or other documents for the purpose of perfecting, confirming, continuing, enforcing or protecting the Lien granted by Client hereunder,
without Client’s signature where permitted by law, including the filing of a financing statement describing the Collateral.
Client agrees to provide all information required by Factor pursuant to this Section promptly to Factor upon request.

 

(c)                
Client agrees that at any time and from time to time, at Client’s expense, Client will promptly execute and deliver
all further instruments and documents, obtain such agreements from third parties, and take all further action, that may be necessary
or desirable, or that Factor may reasonably request, in order to perfect and protect any Lien granted hereby or to enable Factor
to exercise and enforce its rights and remedies hereunder or under any other agreement with respect to any Collateral.

 

5.3         
Reasonable Care. Factor shall have no duty with respect to the care and preservation of the Collateral beyond the exercise
of reasonable care. Factor shall be deemed to have exercised reasonable care in the custody and preservation of the Collateral
in its possession if the Collateral is accorded treatment substantially equal to that which Factor accords its own property, it
being understood that Factor shall not have any responsibility for (a) ascertaining or taking action with respect to any claims,
the nature or sufficiency of any payment or performance by any party under or pursuant to any agreement relating to the Collateral
or other matters relative to any Collateral, whether or not Factor has or is deemed to have knowledge of such matters, or (b)
taking any necessary steps to preserve rights against any parties with respect to any Collateral. Neither this Agreement nor the
exercise by Factor of any of its rights and remedies will relieve Client from the performance of any obligation on Client’s
part to be performed or observed in respect of any of the Collateral.

 

5.4        
Security Interest Absolute. All rights of Factor and Liens hereunder, and all Obligations of Client hereunder, shall
be absolute and unconditional irrespective of: (a) any illegality or lack of validity or enforceability of any Obligation or any
related agreement or instrument; (b) any change in the time, place or manner of payment of, or in any other term of, the Obligations,
or any rescission, waiver, amendment or other modification of the Related Agreements, including any increase in the Obligations;
(c) any taking, exchange, substitution, release, impairment or non-perfection of any Collateral or any other collateral, or any
taking, release, impairment, amendment, waiver or other modification of any guaranty, for all or any of the Obligations; (d) any
manner of sale, disposition or application of proceeds of any Collateral or any other collateral or other assets to all or part
of the Obligations; (e) any default, failure or delay, willful or otherwise, in the performance of the Obligations; (f) any defense,
set-off or counterclaim (other than a defense of payment or performance) that may at any time be available to, or be asserted by,
Client against Factor; or (g) any other circumstance (including any statute of limitations) or manner of administering the Receivables
or any existence of or reliance on any representation by Factor that might vary the risk of Client or otherwise operate as a defense
available to, or a legal or equitable discharge of, Client or any other grantor, guarantor or surety.

 

 

 

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Article 6

REPRESENTATIONS AND
WARRANTIES

 

Client
represents and warrants, as of the date of this Agreement and the date of each purchase of Receivables by Factor, to Factor that:

 

6.1        
Organization; Qualification; Power. Client is an entity of the type referenced in in the Term Sheet, duly formed and
validly existing and in good standing under the laws of the jurisdiction indicated at the beginning of this Agreement and is qualified
to do business in all jurisdictions in which the nature of its business makes such qualification necessary and where failure to
so qualify would have a material adverse effect on its financial condition or operations. Client has the power and authority to
execute, deliver, and perform its obligations under this Agreement and the other Related Agreements to which it is or may become
a party.

 

6.2         
Due Authorization; Execution; Enforceability. The execution, delivery and performance by Client of this Agreement and
the other Related Agreements are within Client’s powers and have been duly authorized by all necessary action. This Agreement
and the other Related Agreements have been duly executed and delivered by Client. This Agreement and the other Related Agreements
to which Client is a party when delivered will be, legal, valid and binding obligations of Client enforceable against Client in
accordance with their respective terms.

 

6.3         
No Conflict; Compliance with Agreements and Laws. The execution, delivery and performance by Client of this Agreement
and the other Related Agreements (a) do not contravene Client’s organizational documents or any law or any contractual restriction
binding on or affecting the Client, and (b) do not result in or require the creation of any Lien (other than Liens in favor of
Factor) upon or with respect to any of its properties. Client is in compliance with all provisions of all agreements, licenses,
instruments, decrees and orders to which it is a party or by which it or its property is bound or affected, the breach or default
of which could have a Material Adverse Effect.

 

6.4         
Approvals. No authorization or approval or other action by, and no notice to or filing with, any Governmental Authority
or regulatory body is required for the due execution, delivery and performance by Client of this Agreement and the other Related
Agreements, except for such approvals and consents that have been made or obtained.

 

		6.5	Anti-Corruption Laws; Sanctions; Anti-Terrorism Laws.

 

(a)                
Neither Client nor any of its Subsidiaries nor, to Client’s knowledge, any director, officer, employee, agent, Affiliate
or representative of Client or any of its Subsidiaries has taken any action, directly or indirectly, that would result in a violation
by such persons of the Foreign Corrupt Practices Act of 1977, as amended, and the rules and regulations thereunder (the “FCPA”)
or any other applicable anti-corruption law; and Client and its Subsidiaries have instituted and maintain policies and procedures
designed to ensure continued compliance therewith.

 

(b)               
Neither Client nor any of its Subsidiaries nor, to Client’s knowledge, any director, officer, employee, agent, Affiliate
or representative of Client or any of its Subsidiaries, is a Person that is, or is owned or controlled by, a Person that is: (1)
subject to any sanctions administered or enforced by OFAC or the U.S. State Department (collectively, “Sanctions”),
or (2) located, organized, or resident in a country or territory that is, or whose government is, the subject to Sanctions (including
Crimea, Cuba, Iran, North Korea, Sudan, and Syria).

 

(c)                
Neither Client nor any of its Subsidiaries nor, to Client’s knowledge, any director, officer, employee, agent, Affiliate
or representative of Client or any of its Subsidiaries, is a Person that is, or is owned or controlled by, a Person that is: (1)
an “enemy” or an “ally of the enemy” within the meaning of Section 2 of the Trading with the Enemy Act
of the United States (50 U.S.C. App. §§ 1 et seq.), or (2) in violation of (A) the Trading with the Enemy Act, (B) any
of the foreign assets control regulations of the United States Treasury Department (31 CFR, Subtitle B, Chapter V) or any enabling
legislation or executive order relating thereto or (C) the PATRIOT Act (collectively, the “Anti-Terrorism Laws”).

 

 

 

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6.6         
Financial Statements; Projections. The financial statements delivered pursuant to Section 7.1 are complete and correct
and fairly present on a consolidated basis the assets, liabilities and financial position of Client and its Subsidiaries as at
such dates, and the results of the operations and changes of financial position for the periods then ended (other than customary
year-end adjustments for unaudited financial statements). All such financial statements, including the related schedules and notes
thereto, have been prepared in accordance with GAAP. Such financial statements show all material indebtedness and other material
liabilities, direct or contingent, of Client and its Subsidiaries as of the date thereof, including material liabilities for Taxes,
material commitments, and Indebtedness, in each case, to the extent required to be disclosed under GAAP.

 

6.7         
Material Adverse Effect. Since the date of the most recent financial statements provided to Factor, there has been no
Material Adverse Effect.

 

6.8         
Litigation. There are no actions, suits or proceedings pending or, to Client’s knowledge, threatened against or
affecting Client or any of its Affiliates or the properties of Client or any of its Affiliates before any court or governmental
department, commission, board, bureau, agency or instrumentality, domestic or foreign, that, if determined adversely to Client
or any of its Affiliates, would have a Material Adverse Effect.

 

6.9         
Taxes. Client and its Subsidiaries each has filed, has caused to be filed or has been included in all Federal, state
and other Tax returns that are required to be filed, including all income, franchise, employment, property and sales taxes, and
has paid all Taxes shown thereon to be due, together with applicable interest and penalties, and all other Taxes imposed on it
or any of its property by any Governmental Authority (other than any the amount or validity of which are currently being contested
in good faith by appropriate proceedings and with respect to which reserves in conformity with GAAP have been provided on the books
of Client or its Subsidiary); no tax Lien has been filed, and, to Client’s knowledge, no claim is being asserted, with respect
to any such Tax. Neither Client nor any of its Subsidiaries is party to any tax sharing agreement.

 

6.10      
Ownership of Property. Client and each of its Subsidiaries has good record and marketable title in fee simple to or
valid leasehold interests in, all real property necessary or used in the ordinary conduct of its business, except for such defects
in title as could not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect. Client and each
of its Subsidiaries has good and marketable title to, valid leasehold interests in, or valid licenses to use all personal property
and assets material to the ordinary conduct of its business free and clear of all Liens other than Permitted Liens.

 

6.11      
Burdensome Restrictions. Client and its Subsidiaries do not presently anticipate that future expenditures needed to
meet the provisions of any statutes, orders, rules or regulations of a Governmental Authority will be so burdensome as to have
a Material Adverse Effect. No Subsidiary is party to any agreement or instrument or otherwise subject to any restriction or encumbrance
that restricts or limits its ability to make dividend payments or other distributions in respect of its capital stock to Client
or any Subsidiary or to transfer any of its assets or properties to Client or any other Subsidiary in each case other than existing
under or by reason of the Related Agreements or Applicable Law.

 

6.12       
No Default. No Event of Default has occurred and is continuing and no default has occurred and is continuing under or
with respect to any material contractual obligation of Client or any of its Subsidiaries that would reasonably be expected to have
a Material Adverse Effect.

 

6.13      
Full Disclosure. Client and its Subsidiaries have disclosed to Factor all agreements, instruments and corporate or
other restrictions to which Client and any Subsidiary thereof are subject, and all other matters known to them, that, individually
or in the aggregate, could reasonably be expected to result in a Material Adverse Effect. No financial statement, material report,
material certificate or other material information furnished (whether in writing or orally) by or on behalf of Client or any Subsidiary
thereof to Factor in connection with the transactions contemplated hereby and the negotiation of this Agreement or delivered hereunder
(as modified or supplemented by other information so furnished), taken together as a whole, contains any untrue statement of a
material fact or omits to state any material fact necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading; provided that, with respect to projected financial information, pro forma financial
information, estimated financial information and other projected or estimated information, such information was prepared in good
faith based upon assumptions believed to be reasonable at the time.

 

 

 

    	 	10	 

     

    

 

6.14      
Receivables. Immediately prior to assignment to Factor, Client is the sole owner of each Receivable, free and clear
of all Liens, and each Receivable is a valid, bona fide account, representing an undisputed obligation owing by the named Customer
for goods actually sold and delivered or for services completely rendered.

 

Article 7

AFFIRMATIVE COVENANTS

 

Until
payment and satisfaction in full of all Obligations (other than contingent indemnification obligations) and the termination of
this Agreement, Client shall, and shall cause each of its Subsidiaries to:

 

7.1        
Reporting Requirements. Deliver to Factor the following information, compiled where applicable using GAAP, in form and
content acceptable to Factor:

 

(a)                
Aging Reports. By way of electronic transmission, schedules of Client’s Accounts, in form satisfactory to Factor,
and, if requested by Factor, copies of Client’s invoices to the Customers in respect of such accounts, such evidence of delivery
for all goods covered by such accounts, a detailed aging of Client’s Accounts and its accounts payable, and a calculation
of Client’s accounts refreshed on at least a weekly basis and such information or documents relating to the Receivables as
Factor may require from time to time.

 

(b)               
Quarterly Financial Statements. As soon as available and in any event within 45 days after the end of each calendar
quarter, a Client prepared balance sheet, income statement, and statement of retained earnings prepared for that month and for
the year–to-date period then ended, prepared, if requested by Factor, on a consolidated and consolidating basis to include
Client’s Affiliates, and stating in comparative form the figures for the corresponding date and periods in the prior fiscal
year, subject to year-end adjustments. Client’s obligation to deliver quarterly financial statements may be satisfied through
use of third-party software approved by Factor that gives Factor access to Client’s accounting system.

 

(c)                
Tax Returns. No later than five days after they are required to be filed, copies of signed and dated state and federal
income tax returns and all related schedules for Client and each Guarantor, and copies of any extension requests.

 

(d)               
Defaults. No later than three days after learning of the probable occurrence of any Event of Default, a writing notifying
Factor of the Event of Default and the steps being taken by Client to cure the Event of Default.

 

(e)                
Other Reports. From time to time, with reasonable promptness, such other materials, reports, records or information
as Factor may reasonably request.

 

7.2         
Existence; Maintenance of Property and Licenses. (a) Preserve, renew and keep in full force and effect its legal existence,
(b) maintain in good repair, working order and condition all material assets used in the business of the Client, and (c) maintain
each and every material license, permit, certification, qualification, approval or franchise issued by any Governmental Authority
required to conduct its businesses as presently conducted.

 

7.3         
Books and Records. Maintain proper books of record and accounts in which full, true, and correct entries in conformity
with GAAP shall be made of all dealings and transactions in relation to its business and activities.

 

 

 

    	 	11	 

     

    

 

7.4        
Compliance with Laws. Comply with the requirements of all Applicable Laws and regulations, the non-compliance with which
would result in a Material Adverse Effect.

 

7.5         
Anti-Corruption Policies. Maintain in effect policies and procedures designed to promote compliance by Client, its Subsidiaries,
and their respective directors, officers, employees, and agents with the FCPA and any other applicable anti-corruption laws.

 

7.6         
Insurance. Maintain insurance with financially sound and reputable insurance companies against at least such risks
and in at least such amounts as are customarily maintained by similar businesses and as may be required by Applicable Law and
as are required by any Related Agreement (including insuring its assets against loss by fire, explosion, theft and other risks
and casualties as are customarily insured against by companies engaged in the same or a similar business, insuring it against
liability for personal injury and property damages relating to its assets, such policies to be in such amounts and covering such
risks as are usually insured against by companies engaged in the same or a similar business, and insuring such other matters as
may from time to time be reasonably requested by Factor, and insuring it against business interruption in such amounts as Factor
shall reasonably deem appropriate). All such insurance shall, (a) provide that no cancellation or material modification thereof
shall be effective until at least 30 days after receipt by Factor of written notice thereof, (b) name Factor as an additional
insured party thereunder and (c) in the case of each casualty insurance policy, name Factor as lender’s loss payee. On the
date of this Agreement and from time to time thereafter Client shall deliver to Factor upon its request information in reasonable
detail as to the insurance then in effect, stating the names of the insurance companies, the amounts and rates of the insurance,
the dates of the expiration thereof and the properties and risks covered thereby.

 

7.7        
Taxes and Other Obligations. Pay and perform (a) all Taxes that may be levied or assessed upon it or any of its property
and (b) all other indebtedness, obligations and liabilities in accordance with customary trade practices; provided, that Client
may contest any item described in clause (a) of this Section in good faith so long as adequate reserves are maintained with respect
thereto in accordance with GAAP.

 

7.8        
Inspections. Permit representatives of Factor, from time to time upon prior reasonable notice and at such times during
normal business hours, all at Client’s expense, to visit and inspect its properties; inspect, audit and make extracts from
its books, records and files, including management letters prepared by independent accountants; and discuss with its principal
officers, and its independent accountants, its business, assets, liabilities, financial condition, results of operations and business
prospects.

 

7.9        
Further Assurances. Make, execute and deliver all such additional and further acts, things, deeds, instruments and documents
as Factor may reasonably require for the purposes of implementing or effectuating the provisions of this Agreement and the other
Related Agreements.

 

Article 8

NEGATIVE COVENANTS

 

Until
payment and satisfaction in full of all Obligations (other than contingent indemnification obligations) and the termination of
this Agreement, Client shall not, and shall not permit any of its Subsidiaries to:

 

8.1         
Indebtedness. Incur, create, assume or permit to exist any Indebtedness, except: (a) the Obligations; (b) Indebtedness
existing on the date of this Agreement and disclosed to Factor in writing, and the renewal, refinancing, extension and replacement
(but not the increase in the aggregate principal amount) thereof; (c) unsecured Indebtedness to trade creditors in the ordinary
course of business; and (d) purchase money Indebtedness or capitalized lease obligations.

 

 

 

    	 	12	 

     

    

 

8.2        
Other Liens. Create or suffer to exist, or permit any of its subsidiaries to create or suffer to exist, any Lien, or
any other type of preferential arrangement, upon or with respect to any of its properties, whether now owned or hereafter acquired,
or assign, or permit any of its subsidiaries to assign, any right to receive income, other than: (a) the Liens of Factor; (b) mechanics’
and materialmen’s Liens for immaterial sums which are either (1) not yet due and payable or (2) being contested in good faith
by appropriate proceedings which serve to stay the foreclosure of such Liens and as to which appropriate reserves have been established;
(c) Liens for Taxes that are not more than 30 days overdue or, if the execution thereof is stayed, which are being contested in
good faith by appropriate proceedings diligently pursued and for which adequate reserves have been established; (d) any real estate
easements and easements, covenants and encumbrances that customarily do not affect the marketable title to real estate or materially
impair its use; and (e) Liens securing Indebtedness permitted under Section 8.1(d), provided (1) such Liens shall be created
substantially simultaneously with the acquisition, repair, improvement or lease, as applicable, of the related property, (2) such
Liens do not at any time encumber any property other than the property financed by such Indebtedness, (3) the amount of Indebtedness
secured thereby is not increased, and (4) the principal amount of Indebtedness secured by any such Lien shall at no time exceed
100% of the original price for the purchase, repair improvement or lease amount (as applicable) of such property at the time of
purchase, repair, improvement or lease (as applicable) (“Permitted Liens”).

 

8.3         
Fundamental Changes. (a) Change its state of organization, name or the location of its chief executive office without
the prior written consent of the Factor, (b) consolidate with or merge into any other entity, or permit any other entity to merge
into it, (c) engage in any line of business materially different from Client’s business on the date of this Agreement, (d)
amend its organizational documents, (e) acquire all or substantially all of the assets of any other entity, (f) change its fiscal
year or make any material change in its accounting treatment and reporting practices except as required by GAAP, or (g) change
its tax status (i.e., as a C or S corporation).

 

8.4         
Dispositions. Sell, lease or otherwise voluntarily dispose of any of its assets other than in the ordinary course of
business.

 

8.5         
Restricted Payments. Declare or pay any dividend or other distribution (whether in cash or in kind) on any class of
its stock or other equity interest, or purchase, redeem, retire, or otherwise acquire any of its stock or other equity interest,
either (i) during a Default Period or (ii) that causes an Event of Default.

 

8.6         
Affiliate Transactions. Conduct, permit or suffer to be conducted, transactions with Affiliates other than transactions
for the purchase or sale of Inventory or services in the ordinary course of business pursuant to terms that are no less favorable
to Client than the terms upon which such transactions would have been made had they been made to or with a Person that is not an
Affiliate.

 

8.7         
Use of Proceeds. (a) Use the proceeds of any Advance or Purchase Price payment for any purpose other than ordinary business
purposes; (b) directly or indirectly apply any part of the proceeds of any Advance or Purchase Price payment to the purchasing
or carrying margin stock (within the meaning of Regulation U issued by the Board of Governors of the Federal Reserve System); (c)
use the proceeds of any Advance or Purchase Price payment, or lend, contribute or otherwise make available such proceeds to any
Person: (1) to fund any activities or business of or with any Person, or in any country or territory, that, at the time of such
funding, is, or whose government is, the subject of Sanctions; or (2) in any other manner that will result in a violation of Sanctions
by any Person; (d) use the proceeds of any Advance or Purchase Price payment, directly or indirectly, in furtherance of an offer,
payment, promise to pay, or authorization of the payment or giving of money, or anything else of value, to any Person in violation
of the FCPA or any other applicable anti-corruption law; or (e) use the proceeds of any Advance or Purchase Price payment in violation
of any Anti-Terrorism Laws.

 

 

 

    	 	13	 

     

    

 

Article 9

DEFAULT AND REMEDIES

 

		9.1	Events of Default. An “Event of Default” shall occur if:

 

(a)                 Client fails to pay any amount of
any Obligations on the date that it becomes due and payable;

 

(b)                Any representation or warranty made
by the Client or on behalf of any Subsidiary in this Agreement or any other Related Agreement is untrue or misleading in any material
respect when made or deemed made;

 

(c)                
Client or any Subsidiary fails to perform or observe any term, covenant, or agreement contained in any of Section 7.1 (Reporting
Requirements), Section 7.2 (Existence; Maintenance of Property and Licenses), Section 7.9 (Inspections), or Article 8 (Negative
Covenants), or any Guarantor fails to perform or observe any term, covenant, or agreement contained in its Guaranty;

 

(d)                
Client or any Subsidiary fails to perform or observe any other term, covenant or agreement (not specified in Section 9.1(a),
Section 9.1(b), or Section 9.1(c)) contained in any Related Agreement on its part to be performed or observed and such failure
continues for 10 Business Days;

 

(e)                
Client or any Subsidiary becomes insolvent or admits in writing an inability to pay debts as they mature, or Client or any
Subsidiary makes an assignment for the benefit of creditors; or Client or any Subsidiary applies for or consents to the appointment
of any receiver, trustee, or similar officer for the benefit of Client or any Subsidiary, or for any of their properties; or any
receiver, trustee or similar officer is appointed without the application or consent of Client or any Subsidiary; or any judgment,
writ, warrant of attachment or execution or similar process is issued or levied against a substantial part of the property of Client
or any Subsidiary;

 

(f)                 
Client or any Subsidiary files a petition under any chapter of the United States Bankruptcy Code or under the laws of any
other jurisdiction naming Client or any Subsidiary as debtor; or any such petition is instituted against Client or any Subsidiary;
or Client or any Subsidiary institutes (by petition, application, answer, consent or otherwise) any bankruptcy, insolvency, reorganization,
debt arrangement, dissolution, liquidation or similar proceeding under the laws of any jurisdiction; or any such proceeding is
instituted (by petition, application or otherwise) against Client or any Subsidiary;

 

(g)                
A final, non-appealable arbitration award, judgment, or decree or order for the payment of money in an amount in excess
of $10,000, which is not insured or subject to indemnity, is entered against Client or any Subsidiary which is not immediately
stayed or appealed;

 

(h)                
Client or any Subsidiary is in default with respect to any bond, debenture, note or other evidence of material indebtedness
issued by Client or any Subsidiary that is held by any third Person other than Factor, or under any instrument under which any
such evidence of indebtedness has been issued or by which it is governed, or under any material lease or other contract, and the
applicable grace period, if any, has expired, regardless of whether such default has been waived by the holder of such indebtedness;

 

(i)                 
Client or any Subsidiary liquidates, dissolves, terminates or suspends its business operations or otherwise fails to operate
its business in the ordinary course, or merges with another Person; or sells or attempts to sell all or substantially all of its
assets;

 

(j)                 
A Change of Control occurs;

 

 

 

    	 	14	 

     

    

 

(k)                
Any event or circumstance occurs that Factor in good faith believes may impair the prospect of payment of all or part of
the Obligations, or Client’s or any Subsidiary’s ability to perform any of its material obligations under this Agreement
or any other Related Agreement;

 

(l)                 
A Material Adverse Effect occurs;

 

(m)             
  Any Guarantor shall die, repudiate, purport to revoke or fail to perform any obligation under such Guaranty;

 

(n)               
Any Related Agreement or any provision thereof, at any time after its execution and delivery and for any reason other than
as expressly permitted hereunder or thereunder or the satisfaction in full of all of the Obligations (other than unasserted contingent
indemnification obligations) and other than as a result of an action or inaction by Factor, ceases to be in full force and effect
other than in accordance with its terms; or any Person (other than Factor) contests in any manner in writing the validity or enforceability
of any Related Agreement or any provision thereof; or the Client denies that it has any or further liability or obligation under
any Related Agreement, or purports to limit, revoke, terminate or rescind any Related Agreement or any provision thereof;

 

(o)               
Any security interest purported to be created in Collateral shall cease to be, or shall be asserted by any Client Party
not to be, a valid, perfected, first-priority (except as otherwise expressly provided in this Agreement) security interest in the
assets covered thereby, other than in respect of assets that, individually and in the aggregate, are not material to the Client
Parties, taken as a whole, or in respect of which the failure of the security interest therein to be a valid, perfected first-priority
(except as otherwise expressly provided in this Agreement) security interest could not in the reasonable judgment of Factor be
expected to have a Material Adverse Effect;

 

(p)               
Any Client Party or any of its senior officers is criminally indicted or convicted for (i) a felony, or (ii) violating any
state or federal law (including the Controlled Substances Act, Money Laundering Control Act of 1986 and Illegal Exportation of
War Materials Act) that has resulted in, or could reasonably be expected to lead to, a forfeiture of any material property or any
collateral (including the Collateral) upon which such Client Party has granted a Lien to Factor or the right to conduct any part
of its business; or

 

(q)               
The uninsured loss, theft, damage or destruction of any of the Collateral in an amount in excess of $10,000 in the aggregate
for all such events during any calendar year as determined by Factor in its sole discretion.

 

9.2         
Rights and Remedies. During any Default Period, and subject to arbitration as provided in Section 10.18 of this Agreement,
Factor may exercise any or all of the following rights and remedies:

 

(a)                
Factor may declare the Obligations to be immediately due and payable and accelerate payment of the Obligations, and all
Obligations shall immediately become due and payable, without presentment, notice of dishonor, protest or further notice of any
kind, all of which Client hereby expressly waives; provided that upon the occurrence of an Event of Default described in Section
9.1(e) or 9.1(f), all Obligations shall immediately become due and payable without presentment, demand, protest or notice of any
kind;

 

(b)               
Factor may, without notice to Client, apply any money owing by Factor to Client to payment of the Obligations, including
any and all balances and deposits of Client held by the Factor;

 

(c)                
Factor may exercise all rights and remedies of a secured party under the UCC; Agreements;

 

 

 

    	 	15	 

     

    

 

 (d)                 Factor may exercise and enforce its rights and remedies under the any of the Related

 

(e)                 Factor may (1) cease purchasing Receivables,
(2) commence accruing interest on the Obligations at a rate up to the Default Rate, (3) decrease the Facility Limit, and (4) decrease
the Advance Rate; and

 

 (f)                  Factor may exercise any other rights and remedies available to it by law or agreement.

 

9.3          Termination Fee.
Upon an Event of Default, the Termination Fee shall be immediately due and payable.

 

9.4         No Waiver. Any failure by
Factor to insist upon strict performance by Client of any of the provisions of this Agreement or any other Related Agreement shall
not be deemed to be a waiver of any of the terms or provisions of this Agreement or the other Related Agreements, and Factor shall
have the right thereafter to insist upon strict performance by Client of any and all of the terms and provisions of this Agreement
or any other Related Agreement.

 

9.5        
Sales of Collateral. If notice prior to disposition of the Collateral or any portion thereof is necessary under Applicable
Law, written notice mailed to Client at least 10 days prior to the date of such disposition will constitute reasonable notice,
but notice given in any other reasonable manner shall be sufficient. So long as the sale of the Collateral is made in a commercially
reasonable manner, Factor may sell such Collateral on such terms and to such purchaser as Factor in its absolute discretion may
choose, without assuming any Credit Risk and without any obligation to advertise or give notice of any kind other than that necessary
under Applicable Law. Without precluding any other methods of sale, the sale of the Collateral or any portion thereof shall have
been made in a commercially reasonable manner if conducted in conformity with reasonable commercial practices of creditors disposing
of similar property. At any sale of the Collateral, if permitted by Applicable Law, Factor may be the purchaser, licensee, assignee
or recipient of the Collateral or any part thereof and shall be entitled, for the purpose of bidding and making settlement or payment
of the purchase price for all or any portion of the Collateral sold, assigned or licensed at such sale, to use and apply any of
the Obligations as a credit on account of the purchase price of the Collateral or any part thereof payable at such sale. To the
extent permitted by Applicable Law, Client waives all claims, damages and demands it may acquire against Factor arising out of
the exercise by it of any rights hereunder. Client hereby waives and releases to the fullest extent permitted by law any right
or equity of redemption with respect to the Collateral, whether before or after sale hereunder, and all rights, if any, of marshalling
the Collateral and any other security for the Obligations or otherwise. At any such sale, unless prohibited by Applicable Law,
Factor or any custodian may bid for and purchase all or any part of the Collateral so sold free from any such right or equity of
redemption. Neither Factor nor any custodian shall be liable for failure to collect or realize upon any or all of the Collateral
or for any delay in so doing, nor shall it be under any obligation to take any action whatsoever with regard thereto.

 

9.6         
Standards for Exercising Rights and Remedies. To the extent that Applicable Law imposes duties on Factor to exercise
remedies in a commercially reasonable manner, Client acknowledges and agrees that it is not commercially unreasonable for Factor
(a) to fail to incur expenses reasonably deemed significant by Factor to prepare Collateral for disposition or otherwise to fail
to complete raw material or work in process into finished goods or other finished products for disposition, (b) to fail to obtain
third party consents for access to Collateral to be disposed of, or to obtain or, if not required by other law, to fail to obtain
governmental or third party consents for the collection or disposition of Collateral to be collected or disposed of, (c) to fail
to exercise collection remedies against Customers or other persons obligated on Collateral or to fail to remove liens or encumbrances
on or any adverse claims against Collateral, (d) to exercise collection remedies against Customers and other persons obligated
on Collateral directly or through the use of collection agencies and other collection specialists, (e) to advertise dispositions
of Collateral through publications or media of general circulation, whether or not the Collateral is of a specialized nature,
(f) to contact other persons, whether or not in the same business as Client, for expressions of interest in acquiring all or any
portion of the Collateral, (g) to hire one or more professional auctioneers to assist in the disposition of Collateral, whether
or not the collateral is of a specialized nature, (h) to dispose of Collateral by utilizing Internet sites that provide for the
auction of assets of the types included in the Collateral or that have the reasonable capability of doing so, or that match buyers
and sellers of assets, (i) to dispose of assets in wholesale rather than retail markets, (j) to decline to provide credit to any
potential purchaser of the Collateral in connection with Factor’s disposition of the Collateral, (k) to disclaim disposition
warranties, (l) to purchase insurance or credit enhancements to insure Factor against risks of loss, collection or disposition
of Collateral or to provide to Factor a guaranteed return from the collection or disposition of Collateral, or (m) to the extent
deemed appropriate by Factor, to obtain the services of other brokers, investment bankers, consultants and other professionals
to assist Factor in the collection or disposition of any of the Collateral. Client acknowledges that the purpose of this Section
is to provide non-exhaustive indications of what actions or omissions by Factor would satisfy Factor’s duties under the
UCC in Factor’s exercise of remedies against the Collateral and that other actions or omissions by Factor shall not be deemed
to fail to satisfy such duties solely on account of not being indicated in this Section. Without limitation upon the foregoing,
nothing contained in this Section shall be construed to grant any rights to Client or to impose any duties on Factor that would
not have been granted or imposed by this Agreement or by Applicable Law in the absence of this Section.

 

 

 

    	 	16	 

     

    

 

Article 10

MISCELLANEOUS

 

10.1      
Notices. Except as otherwise specified herein, any notice, consent, request or other communication required or permitted
to be given hereunder shall be in writing, addressed to the other party as set forth in the Term Sheet for Client or below for
Factor (or to such other address or person as either party or person entitled to notice may by notice to the other party specify),
and shall be: (a) personally delivered; (b) delivered by Federal Express or other comparable overnight delivery service; or (c)
transmitted by United States certified mail, return receipt requested with postage prepaid. Unless otherwise specified, all notices
and other communications shall be deemed to have been duly given on the first to occur of (1) actual receipt of the same, (2) the
date of delivery if personally delivered, (3) one Business Day after depositing the same with the delivery service if by overnight
delivery service, and (4) three days following posting if transmitted by mail.

 

	 	Factor’s Address:	Water for Commerce Fund
Management, LLC
	 	 	2020 West 89th Street, Suite 200
	 	 	Leawood, Kansas 66206

 

10.2      
Attorney Fees. In the event that Factor employs attorneys to collect the Obligations, to enforce the provisions of this
Agreement or to protect or foreclose the Collateral, Client agrees to pay Factor’s attorney fees and disbursements, whether
or not suit is brought. Such fees shall be immediately due and payable.

 

10.3      
Setoff. Factor may, at any time and without demand or notice to anyone, setoff any liability owed to Client by Factor
against any Obligations, whether or not due.

 

10.4      
Revival of Obligations. To the extent that any payment or payments made to Factor under this Agreement are subsequently
invalidated, declared to be fraudulent or preferential, set aside and/or required to be repaid to a trustee, to Client, whether
directly or indirectly as a debtor-in-possession, or to a receiver or any other party under any bankruptcy law, or other state
or federal law, then the portion of the Obligations of Client intended to have been satisfied by such payment or payments will
be revived and will continue in full force and effect as if such payment or payments had never been received by Factor.

 

10.5      
No Oral Amendments. This Agreement may not be modified, amended, waived, extended, changed, discharged or terminated
orally or by any act or failure to act on the part of Client or Factor, but only by an agreement in writing signed by the party
against whom enforcement of any modification, amendment, waiver, extension, change, discharge or termination is sought.

 

10.6      
Assignment. This Agreement may be freely transferred and assigned by Factor, its successors, endorsees and assigns.
Client may not transfer its rights and obligations with respect to this Agreement, the Related Agreements, or the Obligations.

 

10.7      
Costs and Expenses. Client shall pay on demand all costs and expenses, including reasonable attorneys’ fees,
incurred by Factor in connection with the Obligations, this Agreement, any Related Agreement or any other document or agreement
described in or related to this Agreement, and the transactions contemplated by this Agreement, including all costs, expenses
and fees incurred by Factor (a) in connection with the negotiation, preparation, execution, delivery, amendment, and administration
of the Related Agreements, (b) to collect any amounts owed to Factor, (c) to enforce the Related Agreements, (d) in connection
with the collection, protection, or enforcement of any rights in the Collateral, (e) in any bankruptcy, insolvency, assignment
for the benefit of creditors, receivership, or other similar proceeding relating to Client or its assets or any Guarantor, (f)
in any actual or threatened suit, action, proceeding, or adversary proceeding (including all appeals) by, against, or in any way
involving Factor and Client or any Guarantor, or in any way arising from this Agreement or Factor’s dealings with Client,
and (g) to retain any payments or transfers of any kind made to Factor by or on account of this Agreement, including the granting
of liens, collateral rights, security interests, or payment protection of any type.

 

 

 

    	 	17	 

     

    

 

10.8      
Indemnification. In addition to its obligation to pay Factor’s expenses under the terms of this Agreement, Client
shall indemnify, defend and hold harmless Factor and its Related Parties (each an “Indemnitee”) from and against
any of the following (collectively, “Indemnified Liabilities”): (a) any and all transfer taxes, documentary
taxes, assessments or charges made by any Governmental Authority by reason of the execution and delivery of the Related Agreements,
or any other document or agreement described in or related to this Agreement or the transactions under this Agreement; (b) any
claims, loss or damage to which any Indemnitee may be subjected if any representation or warranty contained in this Agreement proves
to be incorrect in any respect or as a result of any violation of the covenants contained in this Agreement; and (c) any and all
other liabilities, losses, damages, penalties, judgments, suits, claims, costs and expenses of any kind or nature whatsoever (including
the reasonable fees and disbursements of counsel) in connection with this Agreement and any other investigative, administrative
or judicial proceedings, whether or not such Indemnitee shall be designated a party to such proceedings, which may be imposed on,
incurred by or asserted against any such Indemnitee, in any manner related to or arising out of or in connection with the transactions
under this Agreement and the Related Agreements, or any other document or agreement described in or related to this Agreement,
with the exception of any Indemnified Liability caused by the gross negligence or willful misconduct of an Indemnitee. If any investigative,
judicial or administrative proceeding described in this Section is brought against any Indemnitee, upon the Indemnitee’s
request, Client, or counsel designated by Client and satisfactory to the Indemnitee, will resist and defend the action, suit or
proceeding to the extent and in the manner directed by the Indemnitee, at Client’s sole cost and expense. Each Indemnitee
will use its best efforts to cooperate in the defense of any such action, suit or proceeding. If this agreement to indemnify is
held to be unenforceable because it violates any law or public policy, Client shall nevertheless make the maximum contribution
to the payment and satisfaction of each of the Indemnified Liabilities to the extent permissible under Applicable Law. Client’s
obligations under this Section shall survive the termination of this Agreement and the discharge of Client’s other obligations
under this Agreement.

 

10.9      
Waiver of Consequential Damages, Etc. To the fullest extent permitted by Applicable Law, Client shall not assert, and
hereby waives, any claim against any Indemnitee, on any theory of liability, for special, indirect, consequential or punitive damages
(as opposed to direct or actual damages) arising out of, in connection with, or as a result of, this Agreement, any other Related
Agreement or any agreement or instrument contemplated hereby, or the transactions contemplated hereby or thereby. No Indemnitee
referred to in Section 10.8 shall be liable for any damages arising from the use by unintended recipients of any information or
other materials distributed by it through telecommunications, electronic or other information transmission systems in connection
with this Agreement or the other Related Agreements or the transactions contemplated hereby or thereby.

 

10.10    
Severability. If any term, covenant or condition of this Agreement is held to be invalid, illegal or unenforceable in
any respect, this Agreement shall be construed without such provision.

 

10.11    
Interpretation. For purposes of this Agreement and the other Related Agreements, (a) the words “include,”
“includes” and “including” shall be deemed to be followed by the words “without limitation”;
(b) the word “or” is not exclusive; (c) the words “herein,” “hereof,” “hereby,”
“hereto” and “hereunder” refer to this Agreement as a whole; (d) the term “documents” includes
any and all instruments, documents, agreements, certificates, notices, reports, financial statements and other writings, however
evidenced, whether in physical or electronic form; and (e) in the computation of periods of time from a specified date to a later
specified date, the word “from” means “from and including”, the words “to” and “until”
each mean “to but excluding”, and the word “through” means “to and including”. The definitions
given for any defined terms in this Agreement shall apply equally to both the singular and plural forms of the terms defined.
Whenever the context may require, any pronoun shall include the corresponding masculine, feminine and neuter forms. Unless the
context otherwise requires, references herein (x) to articles, sections, and exhibits mean the articles and sections of, and exhibits
attached to, this Agreement; (y) to an agreement, instrument or other document mean such agreement, instrument or other document
as amended, supplemented and modified from time to time to the extent permitted by the provisions thereof; and (z) to a statute
mean such statute as amended from time to time and includes any successor legislation thereto and any regulations promulgated
thereunder. This Agreement shall be construed without regard to any presumption or rule requiring construction or interpretation
against the party drafting an instrument or causing any instrument to be drafted. Any exhibits referred to herein shall be construed
with, and as an integral part of, this Agreement to the same extent as if they were set forth verbatim herein. Unless otherwise
specified, all references herein to times of day shall be references to Eastern time (daylight or standard, as applicable). When
performance of any covenant, duty or obligation is required on a day which is not a Business Day, the date of such performance
shall extend to the immediately succeeding Business Day. Any reference to officers, shareholders, stock, shares, directors, boards
of directors, corporate authority, articles of incorporation, bylaws or any other such references to matters relating to a corporation
made herein or in any other Related Agreement with respect to a Person that is not a corporation shall mean and be references
to the comparable terms used with respect to such Person.

 

 

 

    	 	18	 

     

    

 

10.12    
GAAP; Rounding. Unless the context otherwise clearly requires, all accounting terms not expressly defined herein shall
be construed, and all financial computations required under this Agreement shall be made, in accordance with GAAP. Any financial
ratios required to be maintained by Client pursuant to the Related Agreements shall be calculated by dividing the appropriate component
by the other component, carrying the result to one place more than the number of places by which such ratio is expressed herein
and rounding the result up or down to the nearest number using the common – or symmetric arithmetic – method of rounding
(in other words, rounding-up if there is no nearest number).

 

10.13    
PATRIOT Act Notice. Factor hereby notifies the Client Parties that, pursuant to the requirements of the PATRIOT Act,
it is required to obtain, verify and record information that identifies the Client Parties, which information includes the name
and address of the Client Parties and other information that will allow Factor to identify the Client Parties in accordance with
the PATRIOT Act.

 

10.14    
Counterparts; Integration; Effectiveness. This Agreement and any amendments, waivers, consents or supplements may be
executed in any number of counterparts and by different parties hereto in separate counterparts, each of which, when so executed
and delivered, shall be deemed an original, but all of which counterparts together shall constitute but one agreement. This Agreement
and the other Related Agreements constitute the entire contract among the parties with respect to the subject matter of the Related
Agreements and supersede all previous agreements and understandings, oral or written, with respect thereto. Delivery of an executed
counterpart of a signature page to this Agreement by facsimile or in electronic (i.e., “pdf” or “tif”)
format shall be effective as delivery of a manually executed counterpart signature page.

 

10.15    
Electronic Execution of Assignments. The words "execution," "signed," "signature," and
words of like import in any Document shall be deemed to include electronic signatures or the keeping of records in electronic form,
each of which shall be of the same legal effect, validity or enforceability as a manually executed signature or the use of a paper
based recordkeeping system, as the case may be, to the extent and as provided for in any Applicable Law, including the Federal
Electronic Signatures in Global and National Commerce Act, the New York State Electronic Signatures and Records Act or any other
similar state laws based on the Uniform Electronic Transactions Act.

 

		10.16	Governing Law; Jurisdiction; Etc.

 

(a)                
Governing Law. The laws of the State of Kansas will govern this Agreement and any claim, controversy, dispute or
cause of action (whether in contract or tort or otherwise) based upon, arising out of or relating to this Agreement and the transactions
contemplated hereby and thereby.

 

(b)                
Submission to Jurisdiction. Client irrevocably and unconditionally agrees that it will not commence any action, litigation
or proceeding of any kind whatsoever, whether in law or equity, or whether in contract or tort or otherwise, against Factor in
any way relating to this Agreement or the transactions contemplated hereby, in any forum other than the courts of the State of
Kansas, and of the United States District Court of the District of Kansas, and any appellate court from any thereof, and each of
the parties hereto irrevocably and unconditionally submits to the jurisdiction of such courts and agrees that any such action,
litigation or proceeding may be brought in any such Kansas court or, to the fullest extent permitted by Applicable Law, in such
federal court. Each of the parties hereto agrees that a final judgment in any such action, litigation or proceeding will be conclusive
and may be enforced in other jurisdictions by suit on the judgment or in any other manner provided by law. Nothing herein will
affect any right that Factor may otherwise have to bring any action or proceeding relating to this Agreement against Client or
its properties in the courts of any jurisdiction.

 

 

 

    	 	19	 

     

    

 

(c)                
Waiver of Venue. Client irrevocably and unconditionally waives, to the fullest extent permitted by Applicable Law,
any objection that it may now or hereafter have to the laying of venue of any action or proceeding arising out of or relating to
this Agreement in any such court referred to in Section 10.16(b). Each of the parties hereto hereby irrevocably waives, to the
fullest extent permitted by Applicable Law, the defense of an inconvenient forum to the maintenance of such action or proceeding
in any such court.

 

(d)               
Service of Process. Client irrevocably consents to the service of process in the manner provided for notices in Section
10.1 and agrees that nothing herein will affect the right of any party hereto to serve process in any other manner permitted by
Applicable Law.

 

(e)                
Class Action Waiver. Client waives the right to participate in a class action, either as a class representative or
a class member, with respect to any claim relating to this Agreement or the transactions between Client and Factor.

 

10.17    
Waiver of Jury Trial. EACH PARTY HERETO HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW,
ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS AGREEMENT
OR ANY OTHER LOAN DOCUMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY).
EACH PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PERSON HAS REPRESENTED, EXPRESSLY OR OTHERWISE,
THAT SUCH OTHER PERSON WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT
AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS BY, AMONG OTHER THINGS,
THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION.

 

10.18    
Arbitration. This Arbitration Clause (“Arbitration Clause”) significantly affects Client’s
rights in any dispute with Factor. Client should read this Arbitration Clause carefully before signing this Agreement. This Arbitration
Clause is governed by the Federal Arbitration Act, 9 U.S.C. §§ 1 et seq.

 

In this Arbitration Clause,
“Dispute” means any disagreement in contract, tort, statutory or other claim or dispute between Client and Factor
arising out of or relating to Client’s credit application, Agreement or any resulting transaction or relationship. “Dispute”
includes any claim or dispute over the interpretation and scope of this Arbitration Clause.

 

EITHER CLIENT OR
FACTOR MAY CHOOSE TO HAVE ANY DISPUTE BETWEEN THEM OR BETWEEN CLIENT AND FACTOR’S AFFILIATES, OWNERS, DIRECTORS, EMPLOYEES,
AGENTS, SERVICE PROVIDERS, OR ASSIGNS DECIDED BY ARBITRATION AND NOT IN COURT. IF A DISPUTE IS ARBITRATED, CLIENT WILL GIVE UP
CLIENT’S RIGHT TO PARTICIPATE AS A CLASS REPRESENTATIVE OR CLASS MEMBER ON ANY CLASS CLAIM YOU MAY HAVE AGAINST CLIENT, OR
CLIENT’S AFFILIATES, OWNERS, DIRECTORS, EMPLOYEES, AGENTS, SERVICE PROVIDERS OR ASSIGNS. ANY DISPUTE IS TO BE ARBITRATED
ON AN INDIVIDUAL BASIS AND NOT AS A CLASS ACTION. CLIENT EXPRESSLY WAIVES ANY RIGHT YOU MAY HAVE TO ARBITRATE A CLASS ACTION. THIS
IS CALLED THE “CLASS ACTION WAIVER.”

 

Arbitration will be conducted
by and under the rules of the American Arbitration Association (AAA) (www.adr.org), or any other arbitration organization you choose,
subject to our approval. Client may obtain AAA rules by visiting the website.

 

Arbitrators will be attorneys
or retired judges and must be selected pursuant to the applicable rules of the chosen arbitration organization. The arbitrator
shall apply governing substantive law and the applicable statute of limitations. The arbitration hearing must be conducted in the
federal district in which Client is located, or at some other location convenient to Client. Each party will be responsible for
its own attorney, expert and other fees, unless otherwise awarded by the arbitrator under applicable law.

 

 

 

    	 	20	 

     

    

 

Client retains the right to
sue on an individual basis in small claims court for a Dispute within that court’s jurisdiction, unless such action is transferred,
removed or appealed to a different court. Neither Client nor Factor waive the right to arbitrate by filing suit. Factor does not
waive our right to arbitrate by seeking non-judicial recovery of any collateral securing this Agreement.

 

The arbitrator’s
award is final and binding on all parties, subject to any right of appeal available under the Federal Arbitration Act. Any court
within jurisdiction may enter judgment on the arbitrator’s award. This Arbitration Clause shall survive any termination,
payoff or assignment of the Agreement. If any part of this Arbitration Clause, other than the class action waiver, is deemed or
found to be unenforceable for any reason, the remainder is enforceable. If the class action waiver is deemed or found to be unenforceable,
then this entire Arbitration Clause will be unenforceable.

 

Client may opt out of this
Arbitration Clause by doing so in writing to the following address and sent by registered mail, postmarked no later than 10 days
from the date Client signs this Agreement: [address].

 

10.19    
UCC Terms. Terms defined in the UCC in effect on the date of this Agreement and not otherwise defined herein shall,
unless the context otherwise indicates, have the meanings provided by those definitions. Subject to the foregoing, the term “UCC”
refers, as of any date of determination, to the UCC then in effect.

 

10.20    
No Novation. Client (formerly known as BZRTH,
Inc.) and Factor previously entered into a Receivables Purchase Agreement (the “Prior Agreement”) pursuant to which,
among other things, Factor extended credit to Client and Client granted Factor a security interest in its assets. This Agreement
constitutes an amendment and restatement of, and replacement and substitution for, the Prior Agreement. The indebtedness evidenced
by the Prior Agreement is not extinguished or discharged by this Agreement. This Agreement is not intended to be and shall not
be deemed to constitute a payment, settlement or novation of the Prior Agreement, or to release or otherwise adversely affect any
Lien securing such indebtedness or any rights of Factor against any Person liable for such indebtedness.

 

10.21    
Defined Terms. As used in this Agreement, the following terms have the corresponding meanings:

 

“Advance”
means, with respect to any Receivable, an amount equal to the Advance Rate multiplied by the gross face amount of the Receivable,
net of any discounts, credits, or allowances offered by Client to the Customer.

 

“Advance Rate”
means the advance rate specified in the Term Sheet.

 

“Affiliate”
or “Affiliates” means any Person controlled by, controlling or under common control with Client, including any
subsidiary of Client. For purposes of this definition, “control,” when used with respect to any specified Person, means
the power to direct the management and policies of such Person, directly or indirectly, whether through the ownership of voting
securities, by contract or otherwise.

 

“Agreement”
means this Receivables Purchase Agreement between Client and Factor.

 

“Anti-Terrorism Laws”
has the meaning set forth in Section 6.5(c).

 

“Applicable Law”
means all applicable provisions of constitutions, laws, statutes, ordinances, rules, treaties, regulations, permits, licenses,
approvals, interpretations and orders of courts or Governmental Authorities and all orders and decrees of all courts and arbitrators.

 

 

 

    	 	21	 

     

    

 

“Business Day”
means a day other than a Saturday, Sunday, or other day on which commercial banks in New York, New York, are authorized or required
by law to close.

 

“Change of Control”
means: (a) the failure of the beneficial owners of the equity of Client as of the closing date to own, together with their Affiliates,
directly or indirectly, beneficially and of record, 51% of the such equity; or (b) the failure of Client to own directly or indirectly,
beneficially and of record, at least 51% of the aggregate ordinary voting power and economic interests represented by the issued
and outstanding equity of each Subsidiary.

 

“Client”
means the party identified as the Client in the Term Sheet.

 

“Client Account”
means a bookkeeping account on Factor’s books and records of Factor’s transactions with Client and the Customers under
this Agreement.

 

“Client Party”
means Client and each Guarantor.

 

“Collateral”
means all accounts (including health-care-insurance receivables), goods (including inventory but excluding equipment), documents
(including, if applicable, electronic documents), fixtures, instruments, promissory notes, chattel paper (whether tangible or electronic),
letters of credit, letter-of-credit rights (whether or not the letter of credit is evidenced by a writing), securities and all
other investment property, general intangibles (including all payment intangibles), money, deposit accounts, and any other contract
rights or rights to the payment of money; and all proceeds and products of each of the foregoing, all books, records, files and
other data relating to the foregoing, all supporting obligations related thereto, and all accessions to, substitutions and replacements
for, and rents, profits and products of, each of the foregoing, and any and all proceeds of any insurance, indemnity, warranty
or guaranty payable to Client from time to time with respect to any of the foregoing.

 

“Credit Risk”
means, with respect to a Receivable, the risk of loss on such Receivable resulting solely and exclusively from the financial inability
of the applicable Customer to pay the Receivable in full when due or the applicable Customer being the subject of an Insolvency
Proceeding.

 

“Customer”
means any Person who is obligated on a Receivable.

 

“Default Period”
means the period of time commencing on the day an Event of Default occurs and continuing through the date the Event of Default
has been cured or waived.

 

“Default Rate”
has the meaning set forth in Section 3.4.

 

“Discount”
means, with respect to any Receivable purchased or proposed to be purchased by Factor, an amount equal to Face Amount of the Receivable
multiplied by the Discount Rate, calculated for the number of dates between the Purchase Date and the Due Date of such Receivable.

 

“Discount Rate”
means the discount rate specified in the Term Sheet.

 

“Dispute”
means any dispute, deduction, setoff, defense, claim, or counterclaim of any kind by a Customer against Client relating to goods
or services giving rise to a Receivable.

 

“Due Date”
means, with respect to any Receivable, the original due date of such Receivable.

 

 

 

    	 	22	 

     

    

 

“Eligible Receivable”
means a Receivable which is accepted by Factor at Factor’s sole discretion, but excluding any Receivable having any of the
following characteristics:

 

(a)                 Any Receivable with a Due Date that
is more than or equal to 120 days from the invoice date;

 

(b)                 Any Receivable owing by a single
Customer, including a currently scheduled Receivable, if 25% of the balance owing by said Customer is ineligible as a result of
clause (a) above;

 

(c)                
Any Receivable with respect to which the Customer is a director, officer, employee or agent of Client or otherwise Related
Parties of Client;

 

(d)               
Any Receivable with respect to which payment by the Customer is or becomes conditional upon the Customer’s approval
of the goods or services covered thereby, or is otherwise subject to any repurchase obligation or return right, as with sales made
on a, guaranteed sale, sale on approval, sale or return or consignment basis;

 

(e)                
Any Receivable with respect to which the Customer is a Governmental Authority;

 

(f)                 
The face amount of any Receivable with respect to which Client is or may become liable to the Customer for goods sold or
services rendered by such Customer to Client, but only to the extent of the maximum aggregate amount of Client’s liability
to such Customer;

 

(g)                
Any Receivable with respect to which (1) the goods giving rise thereto have not been shipped and delivered to and accepted
as satisfactory by the Customer, or (2) the services performed have not been completed and accepted as satisfactory by the Customer;

 

(h)               
Any Receivable with respect to which possession or control of the goods covered thereby are held, maintained or retained
by Client, or by any agent or custodian of Client, for the Receivable of or subject to further or future direction from the Customer
as with sales made on a bill-and-hold basis (unless the Customer has executed a setoff waiver in form and substance acceptable
to Factor);

 

(i)                 
Any Receivable that arises in any manner other than the sale of inventory or services in the ordinary course of Client’s
business;

 

(j)                 
Any Receivable for any Customer which exceed a credit limit established by Factor for such Customer, but only to the extent
of such excess;

 

(k)                
That portion of any Receivable that has been restructured, extended, amended or modified;

 

(l)                  Any Receivable that is not subject to a first priority lien in favor of Factor;

 

(m)             
Any Receivable with respect to which the Customer materially disputes the amount or terms of such Receivable which Factor
is seeking to verify;

 

 

 

    	 	23	 

     

    

 

(n)               
Any Receivable that is evidenced by an instrument, unless such instrument has been delivered to Factor duly endorsed in
blank;

 

(o)               
Any Receivable that has been repaid, prepaid, satisfied, subordinated or rescinded or any Receivable with respect to which
the Customer has not been directed to make payments directly to Factor;

 

(p)               
Any Receivable that is subject to any discounts, allowances or setoff against payment thereof, except for any discounts,
allowances, dilution or set-offs which conform to customary commercial practices, were created in the ordinary course of business,
and were approved by Factor;

 

(q)               
Any Receivable that is not a bona fide existing payment obligation of the Customer; and

 

(r)                  Any Receivable that is payable in a currency other than the U.S. Dollar.

 

“Expected Term”
means the Expected Term specified in the Term Sheet, which represents the maximum number of days that Factor expects a Receivable
to be outstanding. The Expected Term is determined by Factor based on its review of Client’s historical financial information
and may extend beyond the Due Date for any Receivable.

 

“Face Amount”
means the gross face amount of the invoice or invoices giving rise to the Receivable minus (a) all returns, (b) any discounts,
credits, or allowances claimed by, or granted to, Customers, and (c) finance charges included in the invoice amount. Discounts
shall be calculated on the shortest terms granted to Customer.

 

“Facility Limit”
means the Facility Limit specified in the Term Sheet.

 

“FCPA” has
the meaning set forth in Section 6.5(a).

 

“GAAP”
means generally accepted accounting principles in the United States set forth in the opinions and pronouncements of the Accounting
Principles Board and the American Institute of Certified Public Accountants and statements and pronouncements of the Financial
Accounting Standards Board or such other principles as may be approved by a significant segment of the accounting profession in
the United States, that are applicable to the circumstances as of the date of determination, consistently applied.

 

“Governmental
Authority” means the government of the United States or any other nation, or of any political subdivision thereof, whether
state or local, and any agency, authority, instrumentality, regulatory body, court, central bank or other entity exercising executive,
legislative, judicial, taxing, regulatory or administrative powers or functions of or pertaining to government (including any supra-national
bodies such as the European Union or the European Central Bank).

 

“Guarantor”
means the Person or Persons identified as a Guarantor in the Term Sheet and each other party that may now or hereafter guaranty
the Obligations.

 

“Guaranty”
means each guaranty executed by a Guarantor.

 

 

 

    	 	24	 

     

    

 

“Indebtedness”
of a Person means at any time the sum at such time of (a) indebtedness of such Person for borrowed money or for the deferred purchase
price of property or services, (b) any obligations of such Person in respect of letters of credit, banker’s or other acceptances
or similar obligations issued or created for the account of such Person, (c) lease indebtedness, liabilities and other obligations
of such Person with respect to capital leases, (d) all liabilities secured by any Lien on any property owned by such Person, to
the extent attached to such Person’s interest in such property, even though such Person has not assumed or become personally
liable for the payment thereof, (e) obligations of third parties which are being guarantied or indemnified against by such Person
or which are secured by the property of such Person; (f) any obligation of such Person under an employee stock ownership plan
or other similar employee benefit plan; (g) any obligation of such Person or a commonly controlled entity to a multi-employer
plan; and (h) any obligations, liabilities or indebtedness, contingent or otherwise, under or in connection with, transactions,
agreements or documents now existing or hereafter entered into, which provides for an interest rate, credit, commodity or equity
swap, cap, floor, collar, forward foreign exchange transaction, currency swap, cross currency rate swap, currency option, or any
combination of, or option with respect to, these or similar transactions, for the purpose of hedging fluctuations in interest
or exchange rates, loan, credit exchange, security or currency valuations or commodity prices; but excluding trade and other accounts
payable in the ordinary course of business in accordance with customary trade terms and which are not overdue (as determined in
accordance with customary trade practices) or which are being disputed in good faith by such Person and for which adequate reserves
are being provided on the books of such Person in accordance with GAAP consistently applied.

 

“Indemnified Liabilities”
has the meaning set forth in Section 10.8.

 

“Indemnitee”
has the meaning set forth in Section 10.8.

 

“Insolvency Proceeding”
means any proceeding under Title 11 of the United States Code or under the Bankruptcy and Insolvency Act (Canada) or the
Companies' Creditors Arrangement Act (Canada) or any other federal, state or provincial proceeding instituted by or against
a Person seeking liquidation, winding up, reorganization, arrangement, adjustment, protection, relief or composition of it or its
debts under any law relating to bankruptcy, insolvency, reorganization or relief of debtors, or any proceeding seeking the entry
of an order for relief by the appointment of a receiver, trustee, custodian or similar official for its or a substantial part of
its property.

 

“Invoice Fee”
has the meaning set forth in Section 3.1.

 

“Invoice Fee Rate”
means the Invoice Fee Rate specified in the Term Sheet.

 

“Collection Charge”
has the meaning set forth in Section 3.3.

 

“Lien”
means, with respect to any asset, any mortgage, leasehold mortgage, lien, pledge, charge, security interest, hypothecation or encumbrance
of any kind in respect of such asset. For the purposes of this Agreement, a Person shall be deemed to own subject to a Lien any
asset which it has acquired or holds subject to the interest of a vendor or lessor under any conditional sale agreement, capital
lease or other title retention agreement relating to such asset.

 

“Material Adverse
Effect” means (a) a material adverse effect on the business, assets, property, or condition (financial or otherwise)
of Client or any of its Subsidiaries, (b) a material impairment of the legality, validity, binding effect or enforceability of
any Related Agreement or the rights and remedies of Factor under any Related Agreement, (c) a material impairment of the ability
of Client to repay the Obligations or of the Client Parties to perform their obligations under the Related Agreements, or (d) a
material impairment of the perfection or priority of the Liens granted pursuant to this Agreement.

 

 

 

    	 	25	 

     

    

 

“Obligations”
is used in its most comprehensive sense and means any debts, obligations and liabilities of Client to Factor, whether incurred
in the past, present or future, whether voluntary or involuntary, and however arising, and whether due or not due, absolute or
contingent, liquidated or unliquidated, determined or undetermined, and including all obligations arising under any interest rate
swap, interest rate collar, derivative, foreign exchange, deposit, treasury management or similar transaction or arrangement however
described or defined that Client may enter into at any time with Factor or an Affiliate of Factor , whether or not Client may be
liable individually or jointly with others, or whether recovery upon such Obligations may subsequently become unenforceable.

 

“OFAC” means
the U.S. Department of the Treasury’s Office of Foreign Assets Control.

 

“PATRIOT Act”
means the USA PATRIOT Act (Title III of Pub. L. 107-56 (signed into law October 26, 2001)), as amended from time to time, and any
successor statute.

 

“Payment Day”
has the meaning set forth in the Term Sheet.

 

“Permitted Liens” has the meaning set forth in Section 8.2.

 

“Person”
means any individual, corporation, partnership, joint venture, limited liability company, association, joint-stock company, trust,
unincorporated organization or government or any agency or political subdivision of a governmental entity.

 

“Platform” means the online
loan and collateral management platform maintained by Factor or its Affiliates or its service provider or its Affiliates.

 

“Purchase Date” means, for
any Receivable, the date on which Factor purchases the Receivable.

 

“Purchase Price” means, for any Receivable,
the Face Amount of the Receivable minus the Discount.

 

“Purchased Receivable”
means any Receivable purchased by Factor which has not been repurchased by Client.

 

“Receivables”
means all accounts (as that term is defined in the UCC), contract rights, documents, notes, drafts, and other obligations owed
to or owned by Client arising from the sale of goods or the rendering of services by Client, all general intangibles relating to
these obligations, all proceeds of these obligations, all guaranties for these obligations, and all goods and rights represented
by these obligations.

 

“Related Agreements”
means this Agreement, each Guaranty, and every other agreement, note, document, contract or instrument to which the Client now
or in the future may be a party and which is required by the Factor.

 

“Related Parties”
means, with respect to any Person, such Person’s Affiliates and the partners, directors, officers, employees, agents, trustees,
administrators, managers, advisors and representatives of such Person and of such Person’s Affiliates.

 

“Repurchase Price”
means, for any Receivable, the sum of (a) the Advance, plus (b) all fees, costs, and expenses associated with the Receivable, minus
(c) amounts collected from the Customer on the Receivable.

 

 

 

    	 	26	 

     

    

 

“Reserve”
means a bookkeeping account on the books of the Factor representing an unpaid portion of the Purchase Price and such other amounts
as Factor deems advisable as security for the payment and performance by Client of its Obligations.

 

“Sanctions”
has the meaning set forth in Section 6.5(b).

 

“Subsidiary”
of a Person means any other Person of which a majority of the equity interests having ordinary voting power for the election of
directors or other governing body (other than securities or interests having such power only by reason of the happening of a contingency)
are at the time beneficially owned, or the management of which is otherwise controlled, directly, or indirectly through one or
more intermediaries, or both, by such Person. Unless otherwise specified, all references herein to a “Subsidiary” or
to “Subsidiaries” shall refer to a Subsidiary or Subsidiaries of Client.

 

“Taxes”
means all present or future taxes, levies, imposts, duties, deductions, withholdings (including backup withholding), assessments,
fees or other charges imposed by any Governmental Authority, including any interest, additions to tax or penalties applicable thereto.

 

“Term Sheet” means the
Term Sheet set forth on the first page of the Agreement.

 

“Termination Date” means the date this Agreement terminates
in accordance with Article 4.

 

“Termination Fee” means the Termination Fee specified in the Term Sheet.

 

“UCC” means the Uniform Commercial
Code as in effect in the State of Kansas, as amended or modified from time to time.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

    	 	27	 

     

    

    	 	28	 

     

    

    	 	29Exhibit 10.14

 

THE SECURITIES TO BE ISSUED PURSUANT
TO THIS AGREEMENT HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (“SECURITIES ACT”),
OR ANY OTHER APPLICABLE STATE SECURITIES LAWS AND MAY NOT BE OFFERED OR SOLD UNLESS REGISTERED THEREUNDER OR UNLESS AN EXEMPTION
FROM SUCH REGISTRATION IS AVAILABLE.

 

 

SUBSCRIPTION AGREEMENT

 

 

iPower, Inc.

2399 Bateman Avenue

Duarte, California 91010

Attn: Chenlong Tan, CEO

 

Ladies and Gentlemen:

 

Subscription.  I (sometimes
referred to herein as the “Investor”) hereby subscribe for and agree to purchase the Shares (as defined
below) for the purchase price (the “Purchase Price”) set forth on the signature page hereto of iPower, Inc.,
a Nevada corporation (the “Company”), on the terms and conditions described herein and in Exhibits
A, B, C and D hereto (collectively, the “Offering Documents”).  Terms not defined herein are
as defined in the Offering Documents.  The Company seeks to raise a minimum of $250,000 (the “Minimum Offering Amount”)
and maximum of $2,000,000] (the “Maximum Offering Amount”) in this Offering. The minimum amount of investment
required from any one subscriber to participate in this Offering is $25,000. All references to $ means United States dollars.

 

1.                  
Description of Securities; Description of Company and Risk Factors; Lock-Up.  

 

a.                   
Description of Securities. The Company is offering (the “Offering”) to the Investor a minimum
of 25,000 and a maximum of up to 200,000 shares of Series A convertible redeemable preferred stock, par value $0.001 per share
(the “Preferred Stock”), of the Company at a per share price of $10.00 (each a “Share”
and together the “Shares”). If the Preferred Stock is redeemed (as described below), the Holders of the
Preferred Stock shall be entitled to receive a dividend of 9% per annum, which shall be paid in cash on the date of redemption.
If the Preferred Stock is converted into Class A Common Stock (as described below), the Holders will not be entitled to receive
the dividend.

 

This Offering
is being conducted in advance of the Company’s intended initial public offering of our Class A common stock, par value $0.001
per share (the “Class A Common Stock”), and listing our Class A Common Stock for trading on the Nasdaq
Capital Market or other national securities exchange (such offering and listing, the “IPO”). The Shares
issued herein will automatically be converted into shares of Class A Common Stock upon completion of our IPO, at a conversion price
equal to a 30% discount from the initial per share price of the Class A Common Stock being offered to the public in the IPO. In
the event the Company fails to complete the IPO within one year from the date of Closing (as defined below), all Shares of Preferred
Stock sold in this Offering will be redeemed by the Company in full at a redemption price per Share equal to the Purchase Price
plus accrued and unpaid dividends. For a more detailed description of the Shares see the Term Sheet attached as Exhibit A.
The Shares and the shares of Class A Common Stock into which the Shares are converted are sometimes referred to herein as the “Securities.”

 

 

 

 

    	 	1	 

     

    

 

b.                  
Risks Related to the Investment in the Securities. Investing in the Securities involves a high degree of risk. Before investing,
Investors should carefully consider the summary description of our business annexed hereto as Exhibit B, the risks related
to our business, as set forth in Exhibit C and the investor deck set forth in Exhibit D, together with the other
information contained in Offering Documents.

 

c.                   
Lock-Up. In connection with this Offering, the Investor agrees to the following lock-up agreement with respect to the purchased
Securities:

 

i.       From
and after the date hereof and until the 180th day after the date the Company’s Class A Common Stock is first listed for trading
on a national securities exchange (such first trading day, the “Lock-Up Trigger Date”), the Investor agrees
not to sell, transfer or otherwise dispose of the Securities.

 

ii.       Between
the 181st and 270th day after the Lock-Up Trigger Date, the Investor agrees not to sell, transfer or otherwise dispose of more
than one-third of the Securities purchased pursuant to this Agreement, subject to a maximum sale on any trading day of 3% of the
daily volume of the Class A Common Stock.

 

iii.       Between
the 271st and 365th day after the Lock-Up Trigger Date, the Investor agrees not to sell, transfer or otherwise dispose of more
than one-third of the Securities purchased pursuant to this Agreement, subject to a maximum sale on any trading day of 3% of the
daily volume of the Class A Common Stock.

 

iv.       After
the 365th day after the Lock-Up Trigger Date, the Investor will be entitled to sell the remaining one-third of the Securities purchased
hereunder without restriction.

 

v.       Notwithstanding
the above, commencing 90 days after the Lock-Up Trigger Date, if the Company’s Class A Common Stock per share price is over
150% of the initial price per share sold to investors in the IPO (the “IPO Price”)for five consecutive trading
days, until such time as the price drops below such level, the holders may sell one-third of their Securities subject to a maximum
sale on any trading day of 3% of the daily volume; and if the Company’s Class A Common Stock per share price is over 175%
of the IPO Price for five consecutive trading days, until such time as the price drops below such level, the holders may sell an
additional one-third of their Securities subject to a maximum sale on any trading day of 3% of the daily volume; and if the Company
Class A Common Stock per share price is over 200% of the IPO Price for five consecutive trading days, until such time as the price
drops below such level, the holders may sell an additional one-third constituting a maximum total of all of their Securities subject
to a maximum sale on any trading day of 3% of the daily volume.

 

2.                  
Purchase.

 

		a.	I hereby agree to tender to Sutter Securities Clearing, LLC (the “Escrow Agent”),
by wire transfer of immediately available funds (to a bank account and related wire instructions to be provided to me on my request)
made payable to “iPower, Inc.” for such number of Shares indicated on the signature page hereto, an executed copy of
this Subscription Agreement and an executed copy of my Investor Questionnaire attached as Exhibit A hereto. Funds will be
held in escrow, as set forth in more detail below (the “Escrow Account”), pending the Initial Closing.

 

 

 

 

    	 	2	 

     

    

 

		b.	This Offering will continue until the earlier of (a) the sale of 200,000 Shares for $2,000,000
of gross proceeds of the Maximum Offering Amount or (b) December 31, 2020 (the “Termination Date”).  Upon
the earlier of a Closing (defined below) on my subscription or completion of the Offering, I will be notified promptly by the Company
as to whether my subscription has been accepted by the Company.

 

3.                  
Acceptance or Rejection of Subscription.

 

		a.	I understand and agree that the Company reserves the right to reject this subscription for the
Securities, in whole or in part, for any reason and at any time prior to the Closing (defined below) of my subscription.

 

		b.	In the event the Company rejects this subscription, my subscription payment will be promptly returned
to me without interest or deduction and this Subscription Agreement shall be of no force or effect.  In the event my subscription
is accepted and the Offering is completed, the subscription funds submitted by me shall be released to the Company.

 

4.                  
Closing.  The closing (“Closing”) of this Offering may occur at any time and from time to time
on or before the Termination Date.  The Company must achieve the $250,000 Minimum Offering Amount prior to conducting an initial
Closing (the “Initial Closing”).  Upon receipt of the Minimum Amount an Initial Closing will be held and
all funds will be released from the Escrow Account and paid to the Company, less professional fees and compensation paid to the
Placement Agent and syndicate members. Thereafter additional Closings will be held as funds are received up to the earlier to occur
of receipt of the $2,000,000 Maximum Amount or the Termination Date. Pending receipt of the Minimum Amount, all subscriptions will
be placed in escrow with the Escrow Agent. If, for any reason, the Minimum Amount of subscriptions are not received by the Termination
Date, all escrowed funds will be returned to subscribers, without interest or deduction. The Securities subscribed for herein shall
not be deemed issued to or owned by me until one copy of this Subscription Agreement has been executed by me and countersigned
by the Company and the Closing with respect to such Securities has occurred.

 

5.                  
Disclosure.  Because this offering is limited to accredited investors as defined in Section 2(15) of the Securities
Act, and Rule 501 promulgated thereunder, in reliance upon the exemption contained in Section 4(a)(2) of the Securities Act and
applicable state securities laws, the Securities are being sold without registration under the Securities Act. I acknowledge receipt
of the Offering Documents and represent that I have carefully reviewed and understand the Offering Documents, including all exhibits
attached hereto. I have received all information and materials regarding the Company that I have requested. I fully understand
that the Company has a limited financial and operating history and that the Securities are speculative investments which involve
a high degree of risk, including the potential loss of my entire investment. I fully understand the nature of the risks involved
in purchasing the Securities and I am qualified to make such investment based on my knowledge of and experience in investing in
securities of this type. I have carefully considered the potential risks relating to the Company and purchase of its Securities
and have, in particular, reviewed each of the risks set forth in the Offering Documents. Both my advisors and I have had the opportunity
to ask questions of and receive answers from representatives of the Company or persons acting on its behalf concerning the Company
and the terms and conditions of a proposed investment in the Company and my advisors and I have also had the opportunity to obtain
additional information necessary to verify the accuracy of information furnished about the Company. Accordingly, I have independently
evaluated the risks of purchasing the Securities.

 

6.                  
Investor Representations and Warranties.  I acknowledge, represent and warrant to, and agree with, the Company
as follows:

 

		a.	I am aware that my investment involves a high degree of risk as disclosed in the Offering Documents
and have read carefully the Offering Documents, and I understand that by signing this Subscription Agreement I am agreeing to be
bound by all of the terms and conditions of the Offering Documents.

 

		b.	I acknowledge and am aware that there is no assurance as to the future performance of the Company.

 

 

 

 

    	 	3	 

     

    

 

		c.	I acknowledge that there may be certain adverse tax consequences to me in connection with my purchase
of Securities, and the Company has advised me to seek the advice of experts in such areas prior to making this investment.

 

		d.	I am purchasing the Securities for my own account for investment purposes only and not with a view
to or for sale in connection with the distribution of the Securities, nor with any present intention of selling or otherwise disposing
of all or any part of the foregoing securities.  I agree that I must bear the entire economic risk of my investment for an
indefinite period of time because, among other reasons, the Securities have not been registered under the Securities Act or under
the securities laws of any state and, therefore, cannot be resold, pledged, assigned or otherwise disposed of unless they are subsequently
registered under the Securities Act and under applicable securities laws of certain states or an exemption from such registration
is available.  I hereby authorize the Company to place a restrictive legend on the Securities that are issued to me.

 

		e.	I recognize that the Securities, as an investment, involve a high degree of risk including, but
not limited to, the risk of economic losses from operations of the Company and the total loss of my investment.  I believe
that the investment in the Securities is suitable for me based upon my investment objectives and financial needs, and I have adequate
means for providing for my current financial needs and contingencies and have no need for liquidity with respect to my investment
in the Company.

 

		f.	I have been given access to full and complete information regarding the Company and have utilized
such access to my satisfaction for the purpose of obtaining information in addition to, or verifying information included in, the
Offering Documents, and I have either met with or been given reasonable opportunity to meet with officers of the Company for the
purpose of asking questions of, and receiving answers from, such officers concerning the terms and conditions of the offering of
the Securities and the business and operations of the Company and to obtain any additional information, to the extent reasonably
available.

 

		g.	I have such knowledge and experience in financial and business matters as to be capable of evaluating
the merits and risks of an investment in the Securities and have obtained, in my judgment, sufficient information from the Company
to evaluate the merits and risks of an investment in the Company.  I have not utilized any person as my purchaser representative
as defined in Regulation D under the Securities Act in connection with evaluating such merits and risks.

 

		h.	I have relied solely upon my own investigation in making a decision to invest in the Company.

 

		i.	I have received no representation or warranty from the Company or any of its officers, directors,
employees or agents in respect of my investment in the Company and I have received no information (written or otherwise) from them
relating to the Company or its business other than as set forth in the Offering Documents.  I am not participating in the
offer as a result of or subsequent to: (i) any advertisement, article, notice or other communication published in any newspaper,
magazine or similar media or broadcast over television or radio or (ii) any seminar or meeting whose attendees have been invited
by any general solicitation or general advertising.

 

		j.	I have had full opportunity to ask questions and to receive satisfactory answers concerning the
offering and other matters pertaining to my investment and all such questions have been answered to my full satisfaction.

 

		k.	I have been provided an opportunity to obtain any additional information concerning the offering
and the Company and all other information to the extent the Company possesses such information or can acquire it without unreasonable
effort or expense.

 

 

 

 

    	 	4	 

     

    

 

		l.	I am an “accredited investor” as defined in Section 2(15) of the Securities Act and
in Rule 501 promulgated thereunder and have attached the completed Accredited Investor Questionnaire to indicate my “accredited
investor” status.  I can bear the entire economic risk of the investment in the Securities for an indefinite period
of time and I am knowledgeable about and experienced in making investments in the equity securities of non-publicly traded companies,
including early stage companies.  I am not acting as an underwriter or a conduit for sale to the public or to others of unregistered
securities, directly or indirectly, on behalf of the Company or any person with respect to such securities.

 

		m.	I understand that (1) the Securities have not been registered under the Securities Act, or the
securities laws of certain states, in reliance on specific exemptions from registration, (2) no securities administrator of any
state or the federal government has recommended or endorsed this offering or made any finding or determination relating to the
fairness of an investment in the Company, and (3) the Company is relying on my representations and agreements for the purpose of
determining whether this transaction meets the requirements of certain exemptions from registration afforded by the Securities
Act and certain state securities laws.

 

		n.	I understand that since neither the offer nor sale of the Securities has been registered under
the Securities Act or the securities laws of any state, the Securities may not be sold, assigned, pledged or otherwise disposed
of unless they are so registered or an exemption from such registration is available.

 

		o.	I have had the opportunity to seek independent advice from my professional advisors relating to
the suitability of an investment in the Company in view of my overall financial needs and with respect to the legal and tax implications
of such investment.

 

		p.	If the Investor is a corporation, company, trust, employee benefit plan, individual retirement
account, Keogh Plan, or other tax-exempt entity, it is authorized and qualified to become an Investor in the Company and the person
signing this Subscription Agreement on behalf of such entity has been duly authorized by such entity to do so.

 

		q.	The information contained in my Investor Questionnaire, as well as any information which I have
furnished to the Company with respect to my financial position and business experience, is correct and complete as of the date
of this Subscription Agreement and, if there should be any material change in such information prior to the Closing of the offering,
I will furnish such revised or corrected information to the Company.  I hereby acknowledge and am aware that except for any
rescission rights that may be provided under applicable laws, I am not entitled to cancel, terminate or revoke this subscription
and any agreements made in connection herewith shall survive my death or disability.

 

7.                  
Placement Agent. The Company has engaged Boustead Securities LLC, a broker-dealer licensed with FINRA (the “Placement
Agent”), as placement agent for the Offering on a reasonable best efforts basis. The Company anticipates that the Placement
Agent and its sub-agents or syndicate members will be paid at each Closing from the proceeds in the Escrow Account, fees including
and not to exceed: a cash commission of seven percent (7%) of the gross Purchase Price paid by Subscribers in the Offering; a non-accountable
expense allowance for certain investors of one percent (1%) of the gross purchase price paid by Subscribers in the Offering; and
will receive warrants to purchase a number of shares of Class A Common Stock equal to seven percent (7%) of the Class A Common
Stock underlying the Shares sold in the Offering to investors, with a term of five (5) years from the relevant Closing Date, and
at a per share exercise price equal to the conversion price of the Shares issued to the Subscribers herein (the “Placement
Agent Warrants”). Any sub-agent or syndicate member of the Placement Agent that introduces investors to the Offering
will be entitled to share in the cash fees and Placement Agent Warrants attributable to those investors as described above, pursuant
to the terms of an executed sub-agent or selected dealer agreement. The Company will also pay certain expenses of the Placement
Agent.

 

 

 

    	 	5	 

     

    

 

8.                  
Representations and Warranties of the Company. When used in this Section 8, unless the context indicates otherwise, all references
to the “Company” also mean and include the direct and indirect subsidiaries of the Company. The Company hereby represents
and warrants to the Subscriber, as of the date hereof and on each Closing Date, the following:

 

		a.	Organization and Qualification. The Company and each of its subsidiaries is a corporation
or other business entity duly organized, validly existing and in good standing under the laws of the jurisdiction of its formation,
and has the requisite corporate power to own its properties and to carry on its business as now being conducted. The Company and
each of its subsidiaries is duly qualified as a foreign corporation to do business and is in good standing in every jurisdiction
in which the nature of the business conducted by it makes such qualification necessary, except to the extent that the failure to
be so qualified or be in good standing would not have a material adverse effect on the assets, business, financial condition, results
of operations or future prospects of the Company and its subsidiaries taken as a whole (a “Material Adverse Effect”).

 

		b.	Authorization, Enforcement, Compliance with Other Instruments. (i) The Company has
the requisite corporate power and authority to enter into and perform its obligations under this Agreement, and each of the other
agreements and documents that are exhibits hereto or thereto or are contemplated hereby or thereby or necessary or desirable to
effect the transactions contemplated hereby or thereby (the “Transaction Documents”) and to issue the Securities
in accordance with the terms hereof, (ii) the execution and delivery by the Company of each of the Transaction Documents and the
consummation by it of the transactions contemplated hereby and thereby, including, without limitation, the issuance of the Securities
have been, or will be at the time of execution of such Transaction Document, duly authorized by the Company’s Board of Directors,
and no further consent or authorization is, or will be at the time of execution of such Transaction Document, required by the Company,
its respective Board of Directors or its stockholders, (iii) each of the Transaction Documents will be duly executed and delivered
by the Company, (iv) the Transaction Documents when executed and delivered by the Company and each other party thereto will constitute
the valid and binding obligations of the Company enforceable against the Company in accordance with their terms, except as such
enforceability may be limited by general principles of equity or applicable bankruptcy, insolvency, reorganization, moratorium,
liquidation or similar laws relating to, or affecting generally, the enforcement of creditors’ rights and remedies.

 

		c.	Capitalization. The authorized capital stock of the Company consists of 200,000,000 shares
of capital stock, each with a par value of $0.001 per share, consisting of (a) 166,000,000 shares of Class A common stock (the
“Class A Common Stock”), (b) 14,000,000 shares of Class B common stock (the “Class B Common Stock”),
and 20,000,000 shares of preferred stock, par value of $0.001 per share (the “Preferred Stock”). The Class A
Common Stock entitles the holder to one vote per share and the Class B Common Stock entitles the holder to ten votes per share.
Immediately prior to the Initial Closing, the Company will have no more than 31,962,248 shares of Class A Common Stock outstanding
on a “fully diluted” basis, 14,000,000 shares of Class B Common Stock and no shares of Preferred Stock issued and outstanding.
All of the outstanding shares of Class A Common Stock and Class B Common Stock of the Company and all of the share capital of each
of the Company’s subsidiaries have been or will be, as of the Initial Closing, duly authorized, validly issued and are fully
paid and nonassessable. No shares of capital stock of the Company or any of its subsidiaries will be subject to preemptive rights
or any other similar rights or any liens or encumbrances suffered or permitted by the Company; (ii) there will be no agreements
or arrangements under which the Company or any of its subsidiaries is obligated to register the sale of any of their securities
under the Securities Act, and (iii) there are no securities or instruments of the Company or any of its subsidiaries containing
anti-dilution or similar provisions, including the right to adjust the exercise, exchange or reset price under such securities,
that will be triggered by the issuance of the Securities as described in this Agreement. Upon request, the Company will make available
to the Subscriber true and correct copies of the Company’s Articles of Incorporation, and as in effect on the date hereof
(the “Certificate of Incorporation”), and the Company’s By-laws, as in effect on the date hereof (the
“By-laws”), and the terms of all securities exercisable for Class A Common Stock and the material rights of
the holders thereof in respect thereto other than stock options issued to officers, directors, employees and consultants.

 

 

 

 

    	 	6	 

     

    

 

		d.	Subsidiaries. The Company has no direct or indirect subsidiaries.

 

		e.	Issuance of Securities. The Securities are duly authorized and, upon issuance in accordance
with the terms hereof, shall be duly issued, fully paid and nonassessable, and are free and clear of all taxes, liens and charges
with respect to the issue thereof.

 

		f.	No Conflicts. The execution, delivery and performance of each of the Transaction Documents
by the Company, and the consummation by the Company of the transactions contemplated hereby and thereby will not (i) result in
a violation of the Certificate of Incorporation or the By-laws (or equivalent constitutive document) of the Company or any of its
subsidiaries 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 would become a default) under, or give to others any rights of termination, amendment,
acceleration or cancellation of, any agreement, indenture or instrument to which the Company or any subsidiary is a party, except
for those which would not reasonably be expected to have a Material Adverse Effect, or (iii) result in a violation of any law,
rule, regulation, order, judgment or decree (including U.S. federal and state securities laws and regulations) applicable to the
Company or any subsidiary or by which any property or asset of the Company or any subsidiary is bound or affected except for those
which could not reasonably be expected to have a Material Adverse Effect. Except those which could not reasonably be expected to
have a Material Adverse Effect, neither the Company nor any subsidiary is in violation of any term of or in default under its constitutive
documents. Except those which could not reasonably be expected to have a Material Adverse Effect, neither the Company nor any subsidiary
is in violation of any term of or in default under any material contract, agreement, mortgage, indebtedness, indenture, instrument,
judgment, decree or order or any statute, rule or regulation applicable to the Company or any subsidiary. The business of the Company
and its subsidiaries is not being conducted, and shall not be conducted in violation of any law, ordinance, or regulation of any
governmental entity, except for any violation which could not reasonably be expected, individually or in the aggregate, to have
a Material Adverse Effect. Except as specifically contemplated by this Agreement and as required under the Securities Act and any
applicable state securities laws, neither the Company nor any of its subsidiaries is required to obtain any consent, authorization
or order of, or make any filing or registration with, any court or governmental agency in order for it to execute, deliver or perform
any of its obligations under or contemplated by this Agreement or the other Transaction Documents in accordance with the terms
hereof or thereof. Neither the execution and delivery by the Company of the Transaction Documents, nor the consummation by the
Company of the transactions contemplated hereby or thereby, will require any notice, consent or waiver under any contract or instrument
to which the Company or any subsidiary is a party or by which the Company or any subsidiary is bound or to which any of their assets
is subject, except for any notice, consent or waiver the absence of which would not reasonably be expected, individually or in
the aggregate, to have a Material Adverse Effect and would not adversely affect the consummation of the transactions contemplated
hereby or thereby. All consents, authorizations, orders, filings and registrations which the Company or any of its subsidiaries
is required to obtain pursuant to the preceding two sentences have been or will be obtained or effected on or prior to the Closing.

 

		g.	Absence of Litigation. There is no action, suit, claim, inquiry, notice of violation, proceeding
(including any partial proceeding such as a deposition) or investigation before or by any court, public board, governmental or
administrative agency, self-regulatory organization, arbitrator, regulatory authority, stock market, stock exchange or trading
facility (an “Action”) now pending or, to the knowledge of the Company, threatened, against or affecting the
Company or any of its subsidiaries, wherein an unfavorable decision, ruling or finding would (i) adversely affect the validity
or enforceability of, or the authority or ability of the Company to perform its obligations under this Agreement or any of the
other Transaction Documents, or (ii) have a Material Adverse Effect.

 

		h.	Acknowledgment Regarding Subscriber’s Purchase of the Securities. The Company acknowledges
and agrees that each Subscriber is acting solely in the capacity of an arm’s length purchaser with respect to the Transaction
Documents and the transactions contemplated hereby and thereby. The Company further acknowledges that each Subscriber is not acting
as a financial advisor or fiduciary of the Company (or in any similar capacity) with respect to the Transaction Documents and the
transactions contemplated hereby and thereby and any advice given by such Subscriber or any of their respective representatives
or agents in connection with the Transaction Documents and the transactions contemplated hereby and thereby is merely incidental
to such Subscriber’s purchase of the Securities.

 

 

 

 

    	 	7	 

     

    

 

		i.	No General Solicitation. Neither the Company, nor any of its “affiliates” (as
defined in Rule 144 under the Securities Act), nor, to the knowledge of the Company, any person acting on its or their behalf,
has engaged in any form of general solicitation or general advertising (within the meaning of Regulation D) in connection with
the offer or sale of the Securities.

 

		j.	No Integrated Offering. Neither the Company, nor any of its affiliates, nor to the knowledge
of the Company, any person acting on its or their behalf has, directly or indirectly, made any offers or sales of any security
or solicited any offers to buy any security, under circumstances that would require registration of the Securities under the Securities
Act or cause this offering of the Securities to be integrated with prior offerings by the Company for purposes of the Securities
Act.

 

		k.	Employee Relations. Neither the Company nor any subsidiary is involved in any labor dispute
nor, to the knowledge of the Company, is any such dispute threatened. Neither the Company nor any subsidiary is party to any collective
bargaining agreement. The Company’s and/or its subsidiaries’ employees are not members of any union, and the Company
believes that its and its subsidiaries’ relationship with their respective employees is good.

 

		k.	Permits. The Company and its subsidiaries have all authorizations, approvals, clearances,
licenses, permits, certificates or exemptions (including manufacturing approvals and authorizations, pricing and reimbursement
approvals, labeling approvals, registration notifications or their foreign equivalent) issued by any regulatory authority or governmental
agency (collectively, “Permits”) required to conduct their respective businesses as currently conducted except
to the extent that the failure to have such Permits would not have a Material Adverse Effect. The Company or its subsidiaries have
fulfilled and performed in all material respects their obligations under each Permit, and, as of the date hereof, to the knowledge
of the Company, no event has occurred or condition or state of facts exists which would constitute a breach or default or would
cause revocation or termination of any such Permit except to the extent that such breach, default, revocation or termination would
not have a Material Adverse Effect.

 

		l.	Title. Each of the Company and its subsidiaries has good and marketable title to all of
its real and personal property and assets, free and clear of any material restriction, mortgage, deed of trust, pledge, lien, security
interest or other charge, claim or encumbrance which would have a Material Adverse Effect. With respect to properties and assets
it leases, each of the Company and its subsidiaries is in material compliance with such leases and holds a valid leasehold interest
free of any liens, claims or encumbrances which would have a Material Adverse Effect.

 

		m.	Rights of First Refusal. The Company is not obligated to offer the Securities offered hereunder
on a right of first refusal basis or otherwise to any third parties including, but not limited to, current or former stockholders
of the Company, underwriters, brokers, agents or other third parties.

 

		n.	Reliance. The Company acknowledges that the Subscriber is relying on the representations
and warranties made by the Company hereunder and that such representations and warranties are a material inducement to the Subscriber
purchasing the Securities. The Company further acknowledges that without such representations and warranties of the Company made
hereunder, the Subscribers would not enter into this Agreement.

 

		q.	Brokers’ Fees. The Company does not have any liability or obligation to pay any fees
or commissions to any broker, finder or agent with respect to the transactions contemplated by this Agreement, except for the payment
of fees to the Placement Agent as described above.

 

		r.	Off-Balance Sheet Arrangements. There is no transaction, arrangement, or other relationship
between the Company or any subsidiary and an unconsolidated or other off-balance sheet entity that is required to be disclosed
by the Company in the Financial Statements and is not so disclosed or that otherwise would have a Material Adverse Effect.

 

 

 

 

    	 	8	 

     

    

 

		s.	Investment Company. The Company is not required to be registered as, and is not an affiliate
of, and immediately following the Closing will not be required to register as, an “investment company” within the meaning
of the Investment Company Act of 1940, as amended.

 

		t.	Reliance. The Company acknowledges that the Purchaser is relying on the representations
and warranties made by the Company hereunder and that such representations and warranties are a material inducement to the Purchaser
purchasing the Shares. The Company further acknowledges that without such representations and warranties of the Company made hereunder,
the Purchaser would not enter into this Agreement.

 

9.                  
Indemnification.  I hereby agree to indemnify and hold harmless the Company and its officers, directors, shareholders,
employees, agents, advisors and counsel, and Boustead Securities, LLC and its officers, directors, shareholders, employees, agents,
advisors and counsel, against any and all losses, claims, demands, liabilities and expenses (including reasonable legal or other
expenses, including reasonable attorneys’ fees) incurred by each such person in connection with defending or investigating
any such claims or liabilities, whether or not resulting in any liability to such person, to which any such indemnified party may
become subject under the Securities Act, under any other statute, at common law or otherwise, insofar as such losses, claims, demands,
liabilities and expenses (a) arise out of or are based upon any untrue statement or alleged untrue statement of a material fact
made by me and contained in this Subscription Agreement or my Investor Questionnaire, or (b) arise out of or are based upon any
breach by me of any representation, warranty, or agreement made by me contained herein or therein.

 

10.               
Severability.  In the event any parts of this Subscription Agreement are found to be void, the remaining provisions
of this Subscription Agreement shall nevertheless be binding with the same effect as though the void parts were deleted.

 

11.               
Choice of Law and Jurisdiction.  This Subscription Agreement shall be governed by the laws of the State of Nevada
as applied to contracts entered into and to be performed entirely within the State of Nevada.  Any action arising out of this
Subscription Agreement shall be brought exclusively in a court of competent jurisdiction in Clark County, Nevada, and the parties
hereby irrevocably waive any objections they may have to venue in Clark County, Nevada.

 

12.               
Counterparts.  This Subscription Agreement may be executed in one or more counterparts, each of which shall be
deemed an original but all of which together shall constitute one and the same instrument.  The execution of this Subscription
Agreement may be by actual or facsimile signature.

 

13.               
Benefit.  This Subscription Agreement shall be binding upon and inure to the benefit of the parties hereto.

 

14.               
Notices and Addresses.  All notices, offers, acceptance and any other acts under this Subscription Agreement (except
payment) shall be in writing, and shall be sufficiently given if delivered to the addresses in person, by Federal Express or similar
courier delivery, as follows:

 

Investor:

At the address designated
on the signature

page of this Subscription
Agreement.

 

The Company:

iPower, Inc.

2399 Bateman Avenue

Duarte, California 91010

Attn: Chenlong Tan, CEO

 

 

 

 

    	 	9	 

     

    

 

or to such other address as any of them,
by notice to the others may designate from time to time.  The transmission confirmation receipt from the sender’s facsimile
machine shall be conclusive evidence of successful facsimile delivery.  Time shall be counted to, or from, as the case may
be, the delivery in person or by mailing.

 

15.               
Entire Agreement.  This Subscription Agreement constitutes the entire agreement between the parties with respect
to the subject matter hereof and supersedes all prior oral and written agreements between the parties hereto with respect to the
subject matter hereof.  This Subscription Agreement may not be changed, waived, discharged, or terminated orally but, rather,
only by a statement in writing signed by the party or parties against which enforcement or the change, waiver, discharge or termination
is sought.

 

16.               
Section Headings.  Section headings herein have been inserted for reference only and shall not be deemed to limit
or otherwise affect, in any matter, or be deemed to interpret in whole or in part, any of the terms or provisions of this Subscription
Agreement.

 

17.               
Survival of Representations, Warranties and Agreements.  The representations, warranties and agreements contained
herein shall survive the delivery of, and the payment for, the Securities.

 

18.               
Acceptance of Subscription.  The Company may accept this Subscription Agreement at any time for all or any portion
of the Securities subscribed for by executing a copy hereof as provided and notifying me within a reasonable time thereafter.

 

RESIDENTS OF ALL STATES: THE SECURITIES
OFFERED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”), OR THE SECURITIES
LAWS OF ANY STATE OR OTHER JURISDICTION AND ARE BEING OFFERED AND SOLD IN RELIANCE ON EXEMPTIONS FROM THE REGISTRATION REQUIREMENTS
OF SAID ACT AND SUCH LAWS.  THE SECURITIES ARE SUBJECT TO RESTRICTIONS ON TRANSFERABILITY AND RESALE AND MAY NOT BE TRANSFERRED
OR RESOLD EXCEPT AS PERMITTED UNDER SAID ACT AND SUCH LAWS PURSUANT TO REGISTRATION OR EXEMPTION THEREFROM.  INVESTORS SHOULD
BE AWARE THAT THEY WILL BE REQUIRED TO BEAR THE FINANCIAL RISKS OF THIS INVESTMENT FOR AN INDEFINITE PERIOD OF TIME.  THE
SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND EXCHANGE COMMISSION, ANY STATE SECURITIES COMMISSION OR
OTHER REGULATORY AUTHORITY, NOR HAVE ANY OF THE FOREGOING AUTHORITIES PASSED UPON OR ENDORSED THE MERITS OF THIS OFFERING OR THE
ACCURACY OR ADEQUACY OF THE OFFERING DOCUMENTS. ANY REPRESENTATION TO THE CONTRARY IS UNLAWFUL.

 

FOR FLORIDA RESIDENTS: THE SECURITIES
OFFERED HEREBY WILL BE SOLD, AND ACQUIRED, IN A TRANSACTION EXEMPT UNDER SECTION 517.061(11) OF THE FLORIDA SECURITIES AND INVESTOR
PROTECTION ACT. THE SECURITIES HAVE NOT BEEN REGISTERED UNDER SAID ACT IN THE STATE OF FLORIDA. PURSUANT TO SECTION 517.061(11)
OF THE FLORIDA SECURITIES AND INVESTOR PROTECTION ACT, WHEN SALES ARE MADE TO FIVE (5) OR MORE PERSONS (EXCLUDING ACCREDITED INVESTORS)
IN THE STATE OF FLORIDA, ANY SALE IN THE STATE OF FLORIDA MADE PURSUANT TO SECTION 517.061(11) OF SUCH ACT IS VOIDABLE BY THE PURCHASER
IN SUCH SALE (WITHOUT INCURRING ANY LIABILITY TO THE COMPANY OR TO ANY OTHER PERSON OR ENTITY) EITHER WITHIN THREE (3) DAYS AFTER
THE FIRST TENDER OF CONSIDERATION IS MADE BY SUCH PURCHASER TO THE ISSUER, AN AGENT OF THE ISSUER, OR AN ESCROW AGENT OR WITHIN
THREE (3) DAYS AFTER THE AVAILABILITY OF THAT PRIVILEGE IS COMMUNICATED TO SUCH PURCHASER, WHICHEVER OCCURS LATER. TO VOID HIS
OR HER PURCHASE, THE PURCHASER NEED ONLY SEND A LETTER OR TELEGRAM TO THE COMPANY AT THE ADDRESS INDICATED HEREIN. ANY SUCH LETTER
OR TELEGRAM SHOULD BE SENT AND POSTMARKED PRIOR TO THE END OF THE AFOREMENTIONED THREE (3) DAY PERIOD. IT IS PRUDENT TO SEND ANY
SUCH LETTER BY CERTIFIED MAIL, RETURN RECEIPT REQUESTED, TO ASSURE THAT IT IS RECEIVED AND ALSO TO HAVE EVIDENCE OF THE TIME THAT
IT WAS MAILED. SHOULD A PURCHASER MAKE THIS REQUEST ORALLY, THAT PURCHASER MUST ASK FOR WRITTEN CONFIRMATION THAT THE REQUEST HAS
BEEN RECEIVED. IF NOTICE IS NOT RECEIVED WITHIN THE TIME LIMIT SPECIFIED HEREIN, THE FOREGOING RIGHT TO VOID THE PURCHASE SHALL
BE NULL AND VOID.

 

 

 

    	 	10	 

     

    

 

THE AGGREGATE AMOUNT SUBSCRIBED FOR
HEREBY IS:

 

_______________ Shares at a per Share
Purchase Price of $10.00 per share

 

Manner in Which Title is to be Held.  (check
one)

 

	—     Individual
Ownership	—     Community Property
	—     Joint Tenant with Right of Survivorship (both parties must sign)
	—     Partnership	—     Tenants
in common
	—     Corporation
Trust	—     IRA or Keogh
	—     Other
(please indicate)	 

 

	 	 	 
	INDIVIDUAL INVESTORS	 	ENTITY INVESTORS
	 	 	 
	 	 	Name of entity, if any
	 	 	 
	 	 	 
	Signature (Individual)	 	By: _____________________________
	 	 	*Signature
	 	 	 
	 	 	Its: _____________________________
	 	 	 
	Signature (Joint) 

(all record holders must sign)	 	Title:____________________________
	 	 	 
	 	 	 
	Name(s) Typed or Printed	 	Name Typed or Printed
	 	 	 
	Address to Which
    Correspondence Should be Directed	 	Address to Which
    Correspondence Should be Directed 
	 	 	 
	 	 	 
	 	 	 
	 	 	 
	 	 	 
	 	 	 
	City, State and Zip Code	 	City, State and Zip Code
	 	 	 
	 	 	 
	Tax Identification or 

Social Security Number	 	Tax Identification or 

Social Security Number

*

If Securities are
being subscribed for by any entity, the Certificate of Signatory on the next page must also be completed

 

 

 

    	 	11	 

     

    

 

The foregoing subscription is accepted
and the Company hereby agrees to be bound by its terms on _____ day of ___________________, 2020.

 

	 	 	 
	 	 	iPower, Inc.
	 	 	 
	Dated:	 	By:_______________________________
	 	 	Name: 
	 	 	Its:  

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

    	 	12	 

     

    

 

CERTIFICATE OF SIGNATORY

 

(To be completed if Securities are being
subscribed for by an entity)

 

I, ____________________________, the __________________________________

(name of signatory)(title)

 

of ________________________________________
(“Entity”), a ________________________

(name of entity)(type
of entity)

 

Organized under the laws of ______________,
hereby certify that I am empowered and duly authorized by the Entity to execute the Subscription Agreement and to purchase the
Securities, and certify further that the Subscription Agreement has been duly and validly executed on behalf of the Entity and
constitutes a legal and binding obligation of the Entity.

 

IN WITNESS WHEREOF, I have set my hand
this ______ day of ____________, 2020.

	 	 	 
	 	 	 
	 	 	(Signature)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

    	 	13	 

     

    

 

Schedule 1

 

 

iPower, Inc.

(the “Company”)

 

INSTRUCTIONS FOR COMPLETION
OF INVESTOR REPRESENTATION

AND SUITABILITY QUESTIONNAIRE

 

 

		Item I:	Name and address information must be provided. Securities will be issued in the name(s) set forth
in this Item and delivered to the address set forth in this Item. If two people are subscribing jointly, both people must provide
their names and social security numbers. A telephone number must also be provided.

 

		Item II:	If the securities are to be held in a different name than the investor and sent to a different
address (i.e., an IRA or other account held at a brokerage firm), this Item must be completed. If the securities are to be issued
and delivered directly to the entity listed in Item I, this Item need not be completed.

 

		Item III:	This Item needs to be read by the investor, but nothing needs to be written here.
	 	 	The Securities are suitable
for investment only by prospective investors who are “Accredited Investors.”

 

		Item IV:	A. Only complete this Item by checking the appropriate line if you are
an individual investor.

		B.	Only complete this Item if you are an entity investor.

		C.	Only complete this Item if you are a trust investor.

 

		Item V:	This Item needs to be read by the investor, but nothing needs to be written here.

 

		Item VI:	The USA Freedom Act requires us to collect information on the sources of funds. Please complete
section 1, add the documents requested in section 2 only if funds did not come from an approved country (U.S. is approved), and
complete section 3.

 

		
        Suitability 

        Questionnaire:
	You must thoroughly complete the Suitability Questionnaire, in order for the Company and the Managing Dealer to make a determination whether this is a suitable investment for you.

 

		Item IX:	You and must sign and date here.

 

		Item X:	The Managing Dealer must complete this item and sign to verify that this is
a suitable investment for you, as well as for record keeping purposes.

 

 

 

 

 

 

    	 	14	 

     

    

 

INSTRUCTIONS FOR PAYMENT

 

Review and complete the Investor Representation
and Suitability Questionnaire and mail, fax or deliver it to:

 

Boustead Securities, LLC

6 Venture, Suite 395

Irvine, CA 92618

 

For: iPower, Inc.

 

Email: brent.defiori@boustead1828.com

 

Please send your wire transfer
using these instructions:

 

Wiring Instructions

 

ABA Routing No.: 122242869

SWIFT Code: PMERUS66

Bank Name: Pacific Mercantile Bank

Bank Address: 949 South Coast Dr.,
Costa Mesa, CA 92626

Beneficiary Account Name: Sutter
Securities Clearing

Beneficiary
Account No.: 45361071

Beneficiary Address: 6 Venture,
Suite 395, Irvine, CA 92618

REF: iPower– [Subscriber Name]

 

 

If you need assistance,
please contact:

 

Contact: Brent DeFiori

 

6 Venture, Suite 395

Irvine, CA 92618

 

Email: brent.defiori@boustead1828.com

Phone: 949-463-0039

 

 

 

 

    	 	15	 

     

    

 

Exhibit A

 

IPOWER INC.

 

TERM SHEET SUMMARY

 

 

This Term Sheet
Summary (the “Term Sheet”) summarizes the terms on which you and other qualified accredited investors (the “Investors”)
are invited to make an investment (the “Investment”) in iPower Inc. (“we,” “us,” “our”
or the “Company”).  This Term Sheet is merely a summary of the terms and provisions of the Subscription Agreement
(the “Subscription Agreement”), the form of which will be provided to you.  Accordingly, this Term Sheet is qualified
in its entirety by reference, and is subject in all instances, to the terms and provisions of the Subscription Agreement. 
You are advised to carefully review the terms and provisions of the Subscription Agreement, as well as the risk factors attached
thereto, before making a decision concerning the Investment.  

 

	Issuer:	iPower Inc., a Nevada corporation (“iPower” or the “Company”).
	 	 
	Business:	The Company is one of the largest online suppliers of hydroponics equipment in the USA.   For more information about the Company and its current and intended operations, see the Business Summary attached as Exhibit B to the Subscription Agreement and the investor deck attached as Exhibit D to the Subscription Agreement.
	 	 
	Placement Agent:	Boustead Securities, LLC, a California-based investment bank and Broker/Dealer regulated by the U.S. Financial Industry Regulatory Association (“FINRA”) and a Member of the Securities Investor Protection Corporation (“SIPC”) (“Boustead”) and other licensed brokers who may become part of the selling syndicate.  
	 	 
	Shares Being Offered:	Subject to the terms of this Term Sheet, the Company is offering (the “Offering”) in the aggregate a minimum of USD$250,000 (the “Minimum Amount”) and a maximum of USD$2,000,000 (the “Maximum Amount”) of Series A Voting Convertible Redeemable Preferred Shares (the “Shares”) of the Company.  The Shares being offered:   

 

	 	• 	will consist of a minimum of 25,000 and a maximum of 200,000 Shares at a purchase price of $10.00 per share; 
	 	 	 
	 	• 	will entitle the holder to one vote per Share and notice of all shareholder meetings; 
	 	 	 
	 	• 	upon redemption, each Share shall be entitled to receive a dividend of 9% per annum; provided that if the Shares are converted into Class A Common Stock (as described below), the holders will not be entitled to receive the dividend;
	 	 	 
	 	• 	 on a sale or liquidation of the Company will have a $10.00 per share preference over the Company Class A and Class B Common Stock; 
	 	 	 
	 	• 	upon consummation of the Company’s contemplated initial public offering (“IPO”) will automatically convert into shares of the Class A Common Stock of the Company (the “Class A Common Stock”), at a conversion price equal to a 30% discount to the planned IPO price per share of the Class A Common Stock (the “Conversion Price”), which is intended to trade on Nasdaq; 

 

 

 

 

    	 	16	 

     

    

 

	 	• 	in the event an IPO has not occurred upon the one year anniversary date of the Closing on the sale of the Shares, the Shares will be redeemed by the Company by paying in cash to each holder of Shares the Purchase Price, plus all accrued dividends; and
	 	 	 
	 	• 	 other than as stated above, the Shares are not convertible into any other class or series of securities, other than the Class A Common Stock.   

 

	Minimum Investment:	USD$25,000. The Company may accept investments for less than the minimum investment amount in its sole discretion.
	 	 
	Offering Size: 	Minimum Amount: USD$250,000 
	 	 
	 	Maximum Amount: USD$2,000,000
	 	 
	Plan of Offering:	The Shares are being offered through the Placement Agent and selling syndicate on a
    “best efforts, all or none” basis as to the Minimum Amount and, thereafter, the remaining Shares will be offered
    on a “best efforts” basis. The offering will continue until December 31, 2020 (the “Expiration Date”) or the decision by the Company and the Placement Agent to terminate or extend the Offering prior to such Expiration Date.
	 	 
	 	The Placement Agent and selling syndicate will receive a success fee of seven percent (7%) of the gross purchase price of the Shares sold at each closing, payable in cash. In addition, the Placement Agent and selling syndicate will receive a non-accountable expense allowance of one percent (1%) of the gross purchase price of the Shares sold at each closing.
	 	 
	 	In addition to the above, at each closing, the Placement Agent and selling syndicate will receive a five-year warrant to purchase a number of shares of Class A Common Stock of the Company in an amount not to exceed seven percent (7%) of the Class A Common Stock underlying the Shares sold at each closing, exercisable on a cashless basis, with an exercise price equal to the Conversion Price of the Shares. 
	 	 
	 	Affiliates of the Placement Agent and the Company (including their respective officers, directors, employees and affiliates) may purchase Shares in this Offering.  Any of such purchases may be used to satisfy the Minimum Amount.
	 	 
	Payment and Escrow; Offering Period:	 The purchase price for the Shares is payable in U.S. dollars upon delivery of the completed
    Purchase Agreement and Investor Questionnaire. All subscription funds will be held in a non-interest bearing escrow account,
    for the benefit of the investors, in the Company’s name with the Placement Agent’s affiliate Sutter Securities
    Clearing, LLC, or with such other escrow agent as may be appointed by the Placement Agent and the Company.  In the event
    that the Company does not receive and accept subscriptions for at least the Minimum Amount on or before December 31, 2020, in
    the discretion of the Placement Agent and the Company, the Company will refund all subscription funds, without interest
    thereon, and will return to each investor the subscription documents completed by each such investor.  If the Company
    rejects a subscription, either in whole or in part (which decision is in the sole discretion of the Company), the rejected
    subscription funds, or the rejected portion thereof, will be returned promptly to such investor without interest thereon.
    After the closing of the Minimum Amount and until the Company has offered in an aggregate the Maximum Amount of Shares in the
    offering, subsequent closings may occur at any date mutually agreed by the Company and the Placement Agent but no later than
    December 31, 2020, subject to extension in the discretion of the Placement Agent and the Company.

 

 

 

 

    	 	17	 

     

    

 

	Eligible Investors:	The Shares which are offered by this Term Sheet will be sold to an unlimited
    number of “accredited investors” including qualified institutional buyers as such term is defined in Rule 501(a)
    of Regulation D as promulgated under the Securities Act of 1933, as amended (the “Securities Act”). The
    Securities may also be offered and sold to purchasers outside the United States in accordance with the rules of Regulation S
    promulgated under the Securities Act and/or such other rules and regulations, as may be applicable under the
    circumstances.  Investors will be required to make certain representations with respect to their status and business
    experience and to represent, among other things, that they have received a copy of this Term Sheet, that they understand the
    terms and risks of this Offering, and that they are capable of withstanding a loss of their entire investment in the Shares. 
	 	 
	Authorized and Issued Capital of the Company:	200,000,000 shares of capital stock authorized, each with a par value of $0.001 per share,
    consisting of (a) 166,000,000 shares of Class A Common Stock, (b) 14,000,000 shares of Class B Common Stock, and (c)
    20,000,000 shares of series “blank check” preferred stock. Immediately prior to the Initial Closing, the Company
    will have no more than 31,962,248 shares of Class A Common Stock outstanding on a “fully diluted” basis
    (inclusive of restricted stock awards), 14,000,000 shares of Class B Common Stock and no shares of Preferred Stock issued and
    outstanding. No shares of preferred stock are issued. The Class A Common Stock entitles the holder to one vote per share and
    Class B Common Stock entitles the holder to ten votes per share.
	 	 
	Lock-Up:	Investors will be required to enter into a lock-up agreement with the Company as described in the Subscription Agreement. 
	 	 
	Use of Proceeds:	The Company intends to use the net proceeds from the Offering to: expand its current operations, intellectual property portfolio, and to fund the costs of the IPO.  The Company intends to use any remaining proceeds from the Offering for working capital and other general corporate purposes. 
	 	 
	Representations and Warranties:	The Company will make the representations and warranties contained in the Subscription Agreement. 
 
	 	 
	Covenants:	The Subscription Agreement contains certain affirmative and negative covenants of the Company which are customary in a transaction of this nature. 
	 	 
	Conditions Precedent:	The Company will have taken such corporate and stockholder actions as are necessary to approve the definitive agreements and any other transactions contemplated thereby. 
	 	 
	Governing Law:	State of Nevada.
	 	 
	Private Placement:	The Securities offered hereby are not being registered under the Securities Act in reliance upon the exemption from registration provided by Section 4(a)(2) thereof and Rule 506(b) of Regulation D promulgated thereunder, and pursuant to certain state securities laws.  The Company is also offering the Securities in “offshore transactions” to non-U.S. persons made in compliance with the provisions of Regulation S promulgated under the Securities Act.  Accordingly, the sale, transfer or other disposition of any of our securities, which are purchased pursuant hereto, may be restricted by applicable federal securities laws and/or the securities laws of one or more non-U.S. countries (depending on the residency of the Investor) and by the provisions of the Purchase Agreement executed by such Investor.  See also “Lock-Up” above.
	 	 

 

 

 

    	 	18	 

     

    

 

	Restrictions on Transferability:	None of the Shares have been registered under the Securities Act.  As such,
    they constitute “restricted securities” under the Securities Act. Such Securities may not be sold or
    otherwise transferred unless they are registered under the Securities Act and applicable foreign or state laws or unless
    exemptions from registration are available under such laws.   Any certificates evidencing the Shares will bear a
    legend restricting the distribution, resale, transfer, pledge, hypothecation or other disposition of such securities unless
    and until such securities are registered under the Securities Act or an opinion of counsel acceptable to the Company is
    received concluding that registration is not required under the Securities Act. There can be no assurance that the Company
    will be able to complete the contemplated IPO or will be able to have the applicable registration statement declared
    effective by the SEC.
	 	 
	Risk Factors:	The Securities being offered hereby involve a high degree of risk and should be considered
    only by persons who can afford the loss of their entire investment. See the Risk Factors attached as Exhibit C to
    the Subscription Agreement.
	 	 
	Confidentiality:	You are requested to keep the Offering and the terms thereof, including but not limited to the provisions of this Term Sheet, in the strictest of confidence.  Neither this Term Sheet nor any other information regarding the Offering should be disclosed by you other than to your advisors who need to know such information for purposes of evaluating an investment. 
	 	 
	Additional Information:	 In addition to carefully considering the information contained herein, prospective Investors are urged to request from the Company additional information or copies of relevant documents as they may deem necessary or advisable in evaluating an investment, such as financial statements and the related management’s discussion and analysis. 
	 	   
	Contact:	Boustead Securities, LLC
	 	6 Venture, Suite 395
	 	Irvine, California 92618 USA
	 	offerings@boustead1828.com
	 	 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

    	 	19	 

     

    

 

Exhibit B

 

THIS IS A PRIVATE OFFERING OF SECURITIES
OF iPOWER, INC. THAT IS BEING MADE PURSUANT TO RULE 506(B) UNDER THE SECURITIES ACT OF 1933, AS AMENDED AND IS BEING OFFERED ONLY
TO ACCREDITED INVESTORS AS DEFINED IN RULE 501 UNDER THE ACT. PAST PERFORMANCE IS NOT INDICATIVE OF FUTURE RESULTS. 

 

NEITHER THIS BUSINESS SUMMARY NOR THE
ACCOMPANYING INVESTOR PRESENTATION MAY BE SHOWN OR GIVEN TO ANY PERSON OTHER THAN THE PERSON TO WHOM IT WAS DIRECTLY PROVIDED BY
THE COMPANY AND MAY NOT BE PRINTED, REPRODUCED OR DISSEMINATED IN ANY MANNER WHATSOEVER. FAILURE TO COMPLY WITH THIS DIRECTIVE
CAN RESULT IN A VIOLATION OF APPLICABLE LAWS, INCLUDING THE U.S. SECURITIES ACT OF 1933, AS AMENDED, AND/OR THE U.S. SECURITIES
EXCHANGE ACT OF 1934, AS AMENDED, INCLUDING REGULATION FD. ANY FURTHER DISTRIBUTION OR REPRODUCTION OF THESE MATERIALS, IN WHOLE
OR IN PART, OR THE DIVULGENCE OF ANY OF THE CONTENTS BY AN INVESTOR IS UNAUTHORIZED AND STRICTLY PROHIBITED.

 

BUSINESS SUMMARY

 

Unless otherwise indicated or the context requires otherwise,
the words “we,” “us,” “our,” the “Company,” or “our Company,” and “iPower”
refer to iPower, Inc., a Nevada corporation, and its wholly-owned subsidiaries.

 

The Company

 

iPower, Inc. (formerly, BZRTH, Inc.) is one of the largest online
suppliers of grow-light systems, ventilation systems, activated carbon filters, nutrients, growing media, hydroponic water-resistant
grow tents, trimming machines, pumps and accessories in the United States. The Company owns and operates its own retail website
zenhydro.com where it sells on-line more than 23,000 SKU and multiple best seller products to enable users of such equipment
to grow vegetables, fruits and flowers, and other crops and plants. The Company leases a total of 72,000 square foot fulfillment
centers in Los Angeles. In addition to its own website, iPower’s other sales channels include Amazon, eBay and Walmart.

 

Products marketed under the iPowerTM
and Simple DeluxeTM brands, include grow-light systems, ventilation systems, activated
carbon filters, hydroponic water-resistant grow tents, trimming machines, pumps and accessories; all of which are designated
as Amazon best seller product leaders. The Company has recently expanded its product lines to include LED lighting and is completing
research and development of nutrient products.

 

The Company distributes over 400 brands manufactured by a number
of vendors.

 

The Company believes that it has a number of strategic advantages
over its competitors including the following:

 

		·	The Company believes based on its internal market data analysis that
the iPowerTM and Simple DeluxeTM brands are two of the leading online
sales brands of similar products;

 

		·	The Company has received 100s of listings with positive reviews and
high sales volume for a number of years;

 

 

 

 

    	 	20	 

     

    

 

		·	A strong operations team with proven capabilities;

 

		·	Very high efficiency in operation and fulfillment achieved though
inhouse developed order processing systems;

 

		·	Be able to identify trending products and growth targets though inhouse
developed marketing data, researching methodology and software, along with a capable data team;

 

		·	Robust IT foundation for fast integration of products and operations
upon acquisition.

 

For the year ended June 30, 2020, the Company’s unaudited
net income was approximately $2.1 million on revenues of approximately $40.0 million.

 

Subject to financing, the Company intends to pursue acquisitions
in 2021.

 

The Global Hydroponic Market.

 

According to Markets and Markets, in 2019 the global market
for Hydroponic products to enable users to grow vegetables, fruits and flowers was $8.1 billion and by 2025, the global market
for hydroponic products is forecast to be approximately $16.0 billion. It is estimated that the United States represents 30% of
the total global market. For those users who intend to use the Company’s products to grow hemp-derived CBD medicinal products,
the 2018 Farm Bill officially removed hemp from the list of controlled substances. According to the Brightfield Group, estimated
sales of hemp-derived CBD products was approximately $22.0 billion.

 

Risk Factors and Investor Presentation

 

Prospective investors are urged to carefully review the Risk
Factors annexed to the Subscription Agreement as Exhibit C and our Investor Presentation – Exhibit D.

 

Corporate Structure

 

iPower, Inc. was formed in Nevada, its operations are located
in California, and it sells its products to customers in the United States and Canada. iPower purchases its products from suppliers
in the United States and China.

 

CAUTIONARY STATEMENT CONCERNING FORWARD LOOKING STATEMENTS

 

This document contains forward-looking statements. 
In addition, from time to time, we or our representatives may make forward-looking statements orally or in writing.  We base
these forward-looking statements on our expectations and projections about future events, which we derive from the information
currently available to us.  Such forward-looking statements relate to future events or our future performance, including:
our financial performance and projections; our growth in revenue and earnings; and our business prospects and opportunities. 
You can identify forward-looking statements by those that are not historical in nature, particularly those that use terminology
such as “may,” “should,” “expects,” “anticipates,” “contemplates,”
“estimates,” “believes,” “plans,” “projected,” “predicts,” “potential,”
or “hopes” or the negative of these or similar terms.  In evaluating these forward-looking statements, you should
consider various factors, including: our ability to change the direction of the Company; our ability to keep pace with new technology
and changing market needs; and the competitive environment of our business.  These and other factors may cause our actual
results to differ materially from any forward-looking statement.  Forward-looking statements are only predictions.  The
forward-looking events discussed in this document and other statements made from time to time by us or our representatives, may
not occur, and actual events and results may differ materially and are subject to risks, uncertainties and assumptions about us. 
We are not obligated to publicly update or revise any forward-looking statement, whether as a result of uncertainties and assumptions,
the forward-looking events discussed in this document and other statements made from time to time by us or our representatives
might not occur.

 

 

 

 

    	 	21	 

     

    

 

Exhibit C

 

RISK FACTORS

 

An investment
in the Shares involves a high degree of risk. The risks and uncertainties described below are not the only ones we face. Additional
risks and uncertainties not presently known to us or that we currently deem immaterial may also affect our business, financial
condition and operating results. If any of the following risks, or any other risks not described below, actually occur, it is likely
that business, financial condition and operating results could be seriously harmed. As a result you could lose part or all of your
investment.

 

Risks Related to the Company

 

The COVID-19 pandemic and ensuing
governmental responses have negatively impacted, and could further materially adversely affect, our business, financial condition,
results of operations and cash flows.

 

Many of our suppliers are experiencing
operational difficulties as a result of COVID-19, which in turn may have an adverse effect on our ability to provide products to
our customers.

  

Approximately 50%, of our current
revenues are derived from sales of our products on Amazon.com; any disruption to this business channel could be detrimental to
our business.

 

Potential disruption of our business
and supply chain that may be caused by any conflicts or trade wars between China and the U.S.

 

Economic conditions could adversely
affect our business.

 

We face competition that could prohibit
us from developing or increasing our customer base.

  

If we need additional capital to
fund the expansion of our operations, we may not be able to obtain sufficient capital on terms favorable to us and may be forced
to limit the expansion of our operations.

 

Our business depends substantially
on the continuing efforts of our executive officers and our business may be severely disrupted if we lose their services.

 

Litigation may adversely affect our
business, financial condition and results of operations.

 

Many of the hydroponic gardening
products that end users may purchase are used in new and emerging industries or segments, including the growing of cannabis,
and/or be subject to varying, inconsistent, and rapidly changing laws, regulations, administrative practices, enforcement approaches,
judicial interpretations, and consumer perceptions.

 

Acquisitions,
other strategic alliances and investments could result in operating difficulties, dilution, and other harmful consequences that
may adversely impact our business and results of operations.

 

Our ongoing
investment in our new private label product line is inherently risky and could disrupt our ongoing businesses.

  

If we are
unable to effectively execute our e-commerce business, our reputation and operating results may be harmed.

  

 

 

 

    	 	22	 

     

    

 

Our reliance
on a limited base of suppliers on certain of our products may result in disruptions to our supply chain and business and adversely
affect our financial results.

 

Our operations
may be impaired if our information technology systems fail to perform adequately or if we are the subject of a data breach or cyber-attack.

 

We have identified a material weakness
in our internal control over financial reporting and may experience material weaknesses in the future or otherwise fail to maintain
an effective system of internal controls in the future, as a result of which, we may not be able to accurately report our financial
condition or results of operations which may adversely affect investor confidence in us and, as a result, the value of our common
stock.

 

Risks Related to Our Shares and Class
A Common Stock 

 

The offering price of the Shares
is arbitrary.

 

Investors in this Offering will be
obtaining a long-term investment in the Company with no immediate liquidity, as the Shares will be subject to transferability restrictions.

 

We may never complete our proposed
IPO, as a result of which the Shares will be illiquid investments and a market for the Shares may never develop.

 

In the event we fail to complete
the IPO within one year from the date of closing, all Shares will be redeemed by the Company in full at redemption price per Share
equal to the Purchase Price plus accrued and unpaid dividends. Our ability to satisfy our redemption obligations will depend on
our cash on hand at the time such payments are due. We will not create a sinking fund for the redemption of the Shares. Furthermore,
the redemption obligation will be an unsecured obligation of the Company and will be subordinate to all our current and future
financial obligations. We can provide no assurance that our business will generate sufficient operating cash to permit us to satisfy
the redemption obligation.

 

Even if we do complete our IPO, there
are risks, including stock market volatility, inherent in owning our common stock.

  

The holders of shares of our Class
A Common Stock may experience substantial dilution by exercises of outstanding warrants and options. 

 

The executive officers of the Company
may have the power to control the Company for an indefinite period of time, as they hold 14,000,000 shares of super voting Class
B Common Stock that entitles them to cast 140,000,000 votes on all matters that require the vote or consent of Company shareholders.

 

We will be an emerging growth company
and a smaller reporting company within the meaning of the Securities Act, and if we take advantage of certain exemptions
from disclosure requirements available to “emerging growth companies” or “smaller reporting companies,”
this could make our securities less attractive to investors and may make it more difficult to compare our performance with other
public companies.

 

We will be relying on certain exemptions
from registration requirements under the Securities Act, which if unavailable could have a material adverse effect on our business.

 

 

 

 

    	 	23	 

     

    

 

Exhibit D

 

[iPower Inc. Investor Presentation]

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

    	 	24

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