Document:

Exhibit 10.2

 

Robert F.X. Sillerman

902 Broadway

15th Floor

 New York, NY 10010

July 31, 2015

Virtual Point Holdings, LLC

P.O. Box 28020

Macon, GA 31221

Gentlemen:

Reference is made to that certain letter agreement between us dated June 17, 2015 relating to a put option with respect to shares of the common stock of SFX Entertainment, Inc. (the "Put Agreement").

This will confirm that pursuant to our conversation, effective today, the Put Agreement has been terminated upon our sale of the shares to ESFX, LLC.

Please confirm your acceptance of this termination by signing and returning this letter.

Very truly yours,

 

	 	 	 
	
By: 

	/s/Robert F.X. Sillerman	 
	 		 
	 Name:	Robert F.X. Sillerman	 
	 		

VIRTUAL POINT HOLDINGS, LLC

	 	 	 
	 		
	 By:	/s/ A. Wayne Johnson	
	 		 
	 Name:	A. Wayne Johnson	 
	 		
	 Title:	President and ManagerExhibit 10.1

 

 

SHARE
EXCHANGE AGREEMENT

 

This
Share Exchange Agreement (the  “Agreement”)
is made and entered into 
as  of July 31, 2015 by
Progressive Water Treatment, Inc., a Texas corporation, which
has a mailing address
at P.O. Box 774, McKinney, TX, 75070  (“PWT” or “Seller”),
Marc Stevens (“Stevens” or “PWT
Shareholder”), and OriginClear, Inc.,
a Nevada corporation (“Buyer”
or “Company”) with respect to
the following facts. Each of Seller, the PWT Shareholder and Buyer are sometimes referred to herein individually as a “Party”
and collectively as the “Parties.”

 

R
E C I T A LS

 

A.The
PWT Shareholder owns 100% of the common
stock of PWT (the “Shares”).

		B.	PWT
                                         is engaged in the
                                         business of providing water treatment services and solutions (the “Business”).

 

		C.	The
                                         Board of Directors of PWT and the board of directors of the Company have determined that
                                         an acquisition of PWT by the Buyer is advisable, fair to and in the best interests of
                                         their respective companies and stockholders; and

 

		D.	The
                                         Parties hereto intend that the reorganization contemplated by this Agreement shall constitute
                                         a tax-free reorganization pursuant to Section 368(a)(1) of the Internal Revenue Code;

 

NOW,
THEREFORE, for good
and valuable consideration
the receipt and
sufficiency of which are
hereby acknowledged by
the Parties to
this Agreement, and in
light of the
above recitals to this Agreement,
the Parties to this Agreement hereby agree as
follows:

1.
The Merger. 

Upon
Closing as described in Section 4 below, and subject to the terms and conditions of this Agreement, the PWT Shareholder shall
sell, assign, transfer and deliver the Shares to the Buyer, and the Buyer hereby agrees to purchase and accept from the PWT Shareholder
the Shares.

1.1             
The Closing. The Closing shall take place in accordance with Section 4 below.

1.2          
Consideration. The aggregate consideration to be paid by the Buyer to the PWT Shareholder in exchange for his Shares (the
“Consideration”) shall be One Million Five Hundred Thousand Dollars ($1,500,000.00) paid in the form of ten thousand
(10,000) shares of the Company’s Series B Convertible Preferred Stock (the “Series B Preferred Stock”), with
a stated value of one hundred fifty dollars ($150.00) per share (the “Stated Value”), which shall have the rights,
preferences and privileges as set forth in a Certificate of Designation, in the form attached hereto as Exhibit B, to be filed
with the Nevada Secretary of State prior to the Effective Time. The Stated Value of each share of Series B Preferred Stock is
convertible, at a conversion price of three cents ($0.03) per share, into Common Stock of the Buyer. With respect
to the public resale
of the Common Stock,
the PWT Shareholder shall
at all times
be subject to
the restrictions, conditions and
requirements applicable to
an affiliate of
the Buyer, as
described in Rule 144 of the
Securities Act of 1933, as amended, even
if the PWT Shareholder or its assignees
and successors are no longer affiliates
of the Buyer.

 

    	1

    	 

    

 

1.3             
Certificate of Incorporation and By-laws; Officers and Directors. 

Upon
Closing, the Buyer shall own all of the issued and outstanding equity of the Seller and the Seller shall be a wholly-owned subsidiary
of the Buyer.

2.
Covenant to Remain Employees of PWT.

As
an inducement to Buyer
to enter into
and to perform
its obligations under
this Agreement, Marc Stevens, the PWT Shareholder
covenants to enter into employment
agreements with Buyer in substantially the form attached here as Exhibit C (the “Employment Agreement”). 
In the event
that Marc Stevens, the PWT Shareholder, (i) voluntarily
resigns as an employee of PWT without
Good Reason, as defined in his Employment Agreement; (ii) terminates his employment with
PWT due to death,
disability rendering the PWT Shareholder
unable to work, or
(iii) is involuntarily terminated
as an employee of PWT for
Cause, as defined his employment agreement with PWT, in each
case prior to
the three (3) year anniversary of the Closing,
then Buyer will have
the sole right,
exercisable at any time within
one (1) year after
such termination, to either (i) redeem such shares of Series B Preferred Stock
in cash at a price equal to the liquidation preference then in effect for such shares, or (ii) modify the Conversion Schedule,
as defined in the preferred stock Certificate of Designation, from three (3) years to five (5) years;
provided, that in the event of any such conversion of the Series B Preferred Stock, all Common Stock issued pursuant to
such a conversion will be subject to
a two (2) year lock-up
whereby PWT Shareholder will
not be able
to transfer, hypothecate, assign or
sell any of those
shares for two (2) years
after receipt of
them. In any event, PWT Shareholder will,
with respect to the resale by
any of them of
any of the shares
of Buyer’s Common Stock issued to
them at any
time pursuant to
any conversion of any
portion of their
Series B Preferred Stock, be subject to the restrictions, conditions and requirements
applicable to an affiliate of
Buyer under Rule 144 of the Securities
Act of 1933,
as amended, even if the PWT Shareholder
is no longer an affiliate of Buyer.

 

3.
Other Covenants.

3.1
Covenant Not to
Compete. As a
material inducement for Buyer
to enter into
this Agreement, the PWT Shareholder
agrees that for a period of three years
following the Closing (the “Non-Competition
Period”), he covenants and agrees
that he shall not,
directly or indirectly
own, manage, operate, participate
in, produce, represent, distribute and/or otherwise
act on behalf of any
person, firm, corporation, partnership or other entity which involves water
treatment services and solutions  (the “Competitive Business”) anywhere within the United States (collectively,
the “Territory”); or hire any employee or former employee of Buyer or PWT to perform
services in or involving
the Competitive Business, unless the individual
hired shall have departed Buyer's
or PWT’s employment at least twelve (12) months prior to the hiring. The PWT Shareholder
further covenant and agree that
during the Non-Competition Period,
he will not
directly or indirectly solicit or
agree to service for
their benefit or the
benefit of any third-party, any
of Buyer’s customers.
Notwithstanding the foregoing, nothing
in this Section 3.1 shall
prohibit the PWT Shareholder from owning,
managing, operating, participating in
the operation of, or advising,
consulting or being employed by
any entity that is not
involved in the Competitive Business.
The PWT Shareholder acknowledges and agrees that Buyer will
expend substantial time,
talent, effort and money in marketing, promoting, managing, selling and otherwise
exploiting the businesses Buyer operates, in part
by virtue of Buyer’s acquisition
of PWT pursuant to
this Agreement, that PWT Shareholder
is the sole shareholder of PWT,
that he is receiving a substantial
benefit from the
transactions contemplated hereunder and
that the benefit
received by Buyer and the PWT Shareholder
in agreeing to be
bound by this
Section 3.1 are a
material part of the consideration
for the transactions contemplated by  this
 Agreement.  The Parties 
recognize that this  Section  3.1
contains  conditions, covenants, and  time
limitations that  are  reasonably required
for  the protection of the business of
the Buyer. If any limitation, covenant or
condition shall be deemed
to be unreasonable and unenforceable by a court
or arbitrator of competent jurisdiction, then
this Section 3.1 shall thereupon
be deemed to
be amended to provide for modification
of  such  limitation, covenant and/or
 condition to  such 
extent  as  the 
court or arbitrator shall find to
be reasonable and such
modification shall not affect
the remainder of this Agreement.  The
PWT Shareholder acknowledges that, in the event the PWT Shareholder breaches this Agreement, money damages will not be adequate
to compensate Buyer for the loss occasioned by such breach. The PWT Shareholder therefore
consents, in the event
of such a breach,
to the granting of
injunctive or other equitable relief against the PWT Shareholder
by any court of competent jurisdiction.If,
however, during the Non-Competition Period, the Buyer materially breaches the Employment Agreement between the Buyer and the PWT
Shareholder, and such breach is not cured within 10 Business Days, the Non-Competition Period shall be terminated.      

    	2

    	 

    

3.2Cooperation
on Tax Matters. The Parties acknowledge and agree that they intend for the transactions set forth in this Agreement to
be treated as a tax-free reorganization under IRC §368(a)(1)(A). From and after the date of this Agreement, each party shall
cooperate fully, as and to the extent reasonably requested by any other party, in connection with the preparation of tax returns,
forms and/or documents necessary to ensure that the transactions set forth in this Agreement are treated as a tax-free reorganization
under IRC § 368(a)(1)(A).

4.
Closing and Further Acts. 

4.1
Time and Place
of Closing.  Upon
satisfaction or waiver
of the conditions
set forth in this
Agreement, the closing
of the Transaction
(the “Closing”) will take
place in Los Angeles, California at
11:00 a.m. (local time)
on the date that the Parties
may mutually agree in writing, but
in no event later than October 31, 2015
(the “Closing Date”), unless extended by mutual written agreement of the Parties. If the Closing shall not have occurred
by the close of business on October 31, 2015 (unless extended by the mutual agreement of the Parties), this Agreement shall be
terminated and each of the parties shall be relieved of their duties and obligations arising under this Agreement after the date
of such termination, other than under Section 4.5 of this Agreement. Such termination shall be without liability to the Buyer
or the Seller; provided, however, that nothing in this Section 4.1 shall relieve the Buyer of the Seller of any liability for
a breach of this Agreement.

4.2Actions
at Closing. At the
Closing, the following
actions will take
place:

 

(a)
Buyer will deliver to the PWT Shareholder
a certificate representing 10,000 shares of Buyer’s Series B Preferred Stock.

 

(b)PWT
Shareholder will deliver the Shares either (i) endorsed for transfer to the Buyer or (ii) accompanied by an executed
stock power sufficient to transfer such Shares to the Buyer.

 

(c)
 PWT will
deliver to Buyer
copies of necessary
resolutions of the
Board of Directors of PWT
authorizing the execution,
delivery, and performance of
this Agreement and the
other agreements contemplated by this Agreement,
which resolutions have been certified
by an officer of PWT as being valid
and in full force and effect.

 

(d)Buyer
will deliver to
PWT copies of
corporate resolutions of
the Board of Directors of Buyer
authorizing the execution, delivery and performance of this Agreement and
the other agreements contemplated
by this Agreement,
which resolutions have been
certified by an officer
of Buyer as being
valid and in
full force and
effect.

 

(e)
PWT  will  deliver 
to  the  Buyer 
true  and  complete 
copies  of  PWT’s Articles
of Incorporation and a Certificate
of Good Standing
from the Secretary of State of its
state of domicile, which articles and certificate of
good standing are dated not more than
thirty (30) days prior to the Closing Date.

 

(f)
PWT will appoint two members designated by Buyer to the PWT Board of Directors.

 

(g)Delivery
of any additional documents or
instruments as a
party may reasonably request or
as may be
necessary to evidence and
effect the transactions contemplated by this Agreement.

 

4.3
Actions Pre-Closing.  Seller
and the PWT Shareholder will
at all times
prior to and
after the Closing cooperate fully
with Buyer and
Buyer’s officers, directors,
representatives, accountants and lawyers to
enable Buyer to
conduct thorough due
diligence of PWT
and to enable PWT
to prepare and
have audited all
financial statements deemed necessary by
Buyer to comply with
all of its
reporting obligations with
the Securities and Exchange Commission,
including without limitation the preparation and filing of
its Current Reports on Form 8-K
within four (4) business days
after the Closing,
without audited financial
statements, and with audited
financial statements within seventy-one (71) days after the Closing, subject
to the provisions of Section 4.5 of this Agreement.

 

4.4
Actions Post Closing. The
PWT Shareholder will at
all times after
the Closing cooperate fully with
Buyer and Buyer’s
officers, directors, representatives,
accountants and lawyers to
complete the preparation
and audit of
all financial statements
of Buyer and
PWT deemed necessary
or appropriate by Buyer,
and to enable
Buyer to comply with all of its
reporting obligations with the Securities and Exchange Commission.

 

    	3

    	 

    

  

4.5Costs
of Financial Audit
of PWT. Buyer will
bear the costs
of the 2014 and 2013
audit of PWT
financial statements, except that
PWT will reimburse
Buyer for the total
cost of the
audit (not to
exceed $40,000), as
invoiced by the
auditor, if any
of the following events
occur: (i) the
audit cannot be
completed due to the
lack of reasonable cooperation from Seller, the PWT Shareholder
or PWT’s personnel, or
(ii) the audited
financials and records of
PWT are, in
the opinion of the certified
auditors, materially and adversely different than
those presented to the
Buyer prior to the
date of this
Agreement, or (iii) Seller
or the PWT Shareholder refuse
to proceed with
the Closing and
Buyer is ready,
willing and able
to proceed with the
Closing, or Seller
or the PWT Shareholder otherwise
materially breach this Agreement. With
the exception of possible audit
fee reimbursement, under no circumstances
will either Buyer
or Seller or
the PWT Shareholder be due
any termination expenses in connection with
this Agreement.

 

5.
Representations and Warranties of the PWT Shareholder and Seller

Except
as set forth on the Disclosure Schedules, attached hereto as Exhibit D, the PWT Shareholder and Seller represent and warrant,
jointly and severally, as of the date hereof, to Buyer as follows:

 

5.1Power
and Authority; Binding
Nature of Agreement. The
PWT Shareholder and Seller
have full power and
authority to enter
into this Agreement
and to perform their
obligations hereunder. The execution,
delivery, and performance
of this Agreement by
PWT have been
duly authorized by all
necessary action on
its part.  Assuming that
this Agreement is a valid and binding
obligation of each
of the other
Parties hereto, this Agreement is
a valid and
binding obligation of the PWT Shareholder
and Seller, except as may be limited by bankruptcy, moratorium, insolvency or other
similar laws generally affecting the enforcement of creditors’ rights, and the
effect or availability of
rules of law governing
specific performance, injunctive relief or other equitable remedies (regardless of whether any such remedy is considered
in a proceeding at law or in equity).

 

5.2
Subsidiaries.  There is
no corporation, general
partnership limited partnership,
joint venture, association,
trust or other
entity or organization
that PWT directly
or indirectly controls or in
which PWT directly or indirectly
owns any equity or other interest.

 

5.3Good
Standing.  PWT (i)
is duly organized,
validly existing and in
good standing under the
laws of the
jurisdiction in which
it is organized, (ii)
has all necessary
power and authority to
own its assets
and to conduct
its business as
it is currently
being conducted, and
(iii) is duly qualified
or licensed to
do business and
is in good
standing in every
jurisdiction (both domestic and foreign)
where such qualification or licensing
is required.

 

5.4Financial
Statements.   PWT has delivered
to Buyer the
following unaudited financial statements prior to the Closing
(the “PWT Financial Statements”):
 (i) the unaudited statement of operations
and balance sheet of
PWT for the calendar year ended December 31,
2013, (ii) the
unaudited statement of operations
and balance sheet of PWT for the calendar year
ended December 31, 2014, and (iii) the unaudited statement of operations and
balance sheet of PWT for the six (6) months ended June 30, 2015. Except as stated
therein or in the notes thereto, the PWT
Financial Statements: (a) present fairly the financial
position of PWT as of the respective dates thereof
and the results of operations and changes in financial position
of PWT for the respective periods covered
thereby; and (b) have
been prepared in accordance with
PWT’s normal business practices
applied on a consistent basis
throughout the periods covered. PWT will cooperate with Buyer to prepare the
following audited financial statements prior to the Closing (the
“PWT Audited Financial Statements”): 
(i) the audited statement of operations, statement of cash flows and balance sheet
of PWT for the calendar year ended December
31, 2014, and the (ii)
audited statement of operations,
statement of cash flows and balance sheet for the calendar year ended
December 31, 2013.

 

5.5Capitalization.
 The PWT Shareholder owns 100% of PWT’s common stock, and there are no preferred
stock, options, warrants or other rights to acquire any ownership interest in PWT, except as set forth in this Agreement. The
existing common stock was issued to the PWT Shareholder in full
compliance with all applicable
federal, state and local
securities laws and
other laws.

 

5.6Absence
of Changes.  Except
as otherwise set
forth on Schedule
5.6 hereto or otherwise
disclosed to and acknowledged by
Buyer in writing prior
to the Closing, since
June 30, 2015:

 

(a)
 There has
not been any material adverse
change in the business, condition,
assets,  operations  or 
prospects  of  PWT 
and  no  event 
has  occurred that is reasonably
likely to have a
material adverse effect on the
business, condition, assets, operations
or prospects of PWT.

 

    	4

    	 

    

 

 

(b)
 PWT has
not repurchased, redeemed or otherwise
reacquired any of its common stock
or other securities.

 

(c)
 PWT has
not sold or
otherwise issued any
of its common stock.

 

(d)
 PWT has
not amended its
articles of incorporation,
bylaws, or other charter or
organizational documents, nor has
it effected or
been a party
to any merger, recapitalization,
reorganization or similar transaction.

 

(e)
 PWT has
not formed any
subsidiary or contributed
any funds or
other assets to any
subsidiary.

 

(f)
PWT has not
purchased or otherwise acquired
any material assets, nor
has it leased any
assets from any
other person, except
in the ordinary
course of business
consistent with past practice.

 

(g)
 PWT has
not made any
capital expenditure outside the
ordinary course of business
or inconsistent with past
practice.

(h)
 PWT has
not sold or
otherwise transferred any material assets
to any other
person, except in the
ordinary course of business
consistent with past
practice and at a
price equal to the
fair market value
of the assets transferred.

 

(i)
 There has
not been any material
loss, damage or destruction
to any of the material
properties or Assets of PWT (whether
or not covered by insurance).

 

(j)
 PWT has
not written off
as uncollectible any indebtedness
or accounts receivable, except for
write offs that
were made in
the ordinary course
of business consistent with
past practice.

 

(k)
 PWT has
not leased any
assets to any
other person except in
the ordinary course of
business consistent with
past practice and
at a rental
rate equal to
the fair rental value
of the leased assets.

 

(l)
 PWT has
not mortgaged, pledged,
hypothecated or otherwise encumbered
any assets, except
in the ordinary
course of business consistent
with past practice.

 

(m)
PWT has not
entered into any
contract, or incurred
any debt, liability
or other obligation (whether
absolute, accrued, contingent or
otherwise), except for
(i) contracts that were
entered into in the ordinary course
of business consistent with past practice and that
have terms of less than
six (6) months and do not
contemplate payments by or to PWT which  will 
exceed, over  the  term 
of the  contract, ten  thousand
 dollars ($10,000) in the aggregate, and
(ii) current liabilities incurred in the
ordinary course of business consistent with the past practice.

 

(n)
 PWT has
not made any
loan or advance
to any other
person, except for advances that
have been made
to customers in
the ordinary course
of business consistent with past practice and that have been properly reflected
as “accounts receivables.”

 

(o)
 Other than
annual raises or
bonuses paid or
provided consistent with past business
practices, PWT has
not paid any
bonus to, or
increased the amount
of the salary, fringe
benefits or other
compensation or remuneration payable
to, any of
the managers, officers or employees
of PWT.

 

(p)
 No contract
or other instrument
to which PWT
is or was
a party or
by which PWT or
any of its
assets are or
were bound has
been amended or
terminated, except in the
ordinary course of business
consistent with past practice.

 

(q)
 PWT has
not discharged any lien
or discharged or paid
any indebtedness, liability or
other obligation, except
for current liabilities that
(i) are reflected
in the PWT Financial
Statements as of June 30, 2015
or have been
incurred since June 30, 2015
in the ordinary course of business
consistent with past
practice, and (ii) have
been discharged or paid
in the ordinary
course of business consistent
with past practice.

 

(r)
PWT has not
forgiven any debt
or otherwise released
or waived any
right or claim, except in
the ordinary course
of business consistent with
past practice.

 

(s)
 PWT has
not changed its methods
of accounting or
its accounting practices in any
respect.

 

(t)
 PWT has
not entered into
any transaction outside
the ordinary course
of business or inconsistent with
past practice.

 

(u)
 PWT has
not agreed or
committed (orally or in
writing) to do
any of the things
described in clauses
(b) through (t) of this
Section 5.6.

 

    	5

    	 

    

  

5.7Absence
of Undisclosed Liabilities. PWT  has 
no  debt,  liability 
or  other obligation of  any 
nature  (whether  due 
or  to  become due 
and  whether  absolute, 
accrued, contingent or otherwise)
that is not
reflected or reserved
against in the
PWT Financial Statements as of
June 30, 2015, except for obligations
incurred since June 30, 2015 in
the ordinary and
usual course of business consistent
with past practice.

 

5.8PWT
Assets.

 

(a)
 The execution
and delivery of
this Agreement and
the consummation of the
transactions contemplated hereby will
not result in
a breach of the
terms and conditions of, or result
in a loss of rights under, or result in the creation of any lien, charge or encumbrance upon, any of its assets (the “Assets”).

 

(b)
 PWT has
good and marketable
title to the Assets,
free and clear
of all mortgages, liens,
leases, pledges, charges,
encumbrances, equities or
claims, except as expressly disclosed
in writing by PWT to Buyer prior to the Closing Date.

 

(c)
 Except as reflected in the PWT Financial Statements, the Assets 
are  not  subject 
to  any  material 
liability,  absolute  or contingent,
which has not
been disclosed by
PWT to and
acknowledged by Buyer
in writing  prior  to 
the  Closing  Date.

 

(d)
 PWT has
provided to Buyer in
writing an accurate
description of all of
the assets of PWT or used in
the business of PWT.

 

(e)
PWT has provided
to Buyer in
writing a list
of all contracts,
agreements, licenses, leases, arrangements,
commitments and other undertakings
to which PWT
is a party or
by which it
or its property
is bound. Except as specified by PWT to
and acknowledged by Buyer in writing
prior to the
Closing Date, all
of such contracts, agreements,
leases, licenses and commitments are valid, binding and in full force and effect.  As
soon as practicable after the
execution of this
Agreement by all Parties,
PWT will provide Buyer with copies of all such documents for Buyer’s review.

 

5.9Compliance
with Laws; Licenses
and Permits.  PWT
is not in
violation of, nor has
it failed to
conduct its business
in material compliance with,
any applicable federal,
state, local or foreign
laws, regulations, rules,
treaties, rulings, orders,
directives or decrees.  PWT
has delivered to Buyer
a complete and accurate
list and provided Buyer
with the right
to inspect true and
complete copies of all of the
licenses, permits, authorizations
and franchises to
which PWT is subject
and all said
licenses, permits, authorizations
and franchises are
valid and in
full force and effect.  Said licenses,
permits, authorizations and franchises constitute all of the licenses, permits, authorizations and 
franchises  reasonably  necessary
 to  permit 
PWT  to  conduct 
its business in the
manner in which it
is now being
conducted, and PWT is
not in violation or
breach of any of
the terms, requirements or
conditions of any of
said licenses, permits, authorizations
or franchises.

 

5.10
Taxes.  Except as
disclosed herein, PWT has accurately
and completely filed
with the appropriate United
States state, local
and foreign governmental agencies
all tax returns
and reports required to
be filed (subject
to permitted extensions
applicable to such filings),
and has paid or
accrued in full
all taxes, duties,
charges, withholding obligations and other
governmental liabilities as well
as any interest,
penalties, assessments or
deficiencies, if any, due
to, or claimed to be due by, any
governmental authority (including taxes on properties, income, franchises, licenses, sales
and payroll).  (All
such items are
collectively referred to herein
as “Taxes”).  The PWT Financial
Statements fully accrue or reserve all current and deferred taxes. PWT is not a party to any pending action or proceeding, nor
is any such action or proceeding threatened by any governmental authority for
the assessment or
collection of Taxes. No
liability for taxes
has been incurred other than
in the ordinary
course of business. There
are no liens
for Taxes except for
liens for property taxes
not yet delinquent. PWT
is not a
party to any
Tax sharing, Tax allocation,
Tax indemnity or statute
of limitations extension
or waiver agreement and
in the past year
has not been
included on any
consolidated combined or unitary
return with any
entity other than PWT. PWT has duly withheld from each payment made to each
person from whom such withholding is required
by law the amount
of all Taxes or other
sums (including but
not limited to United States federal income taxes, any applicable state or municipal
income tax, disability tax, unemployment insurance contribution and Federal Insurance Contribution Act taxes) required
to be withheld
therefore and has
paid the same
to the proper
tax authorities prior to
the due date thereof. To the extent
any Taxes withheld
by PWT have
not been paid as of the Closing
Date because such
Taxes were not
yet due, such
Taxes will be
paid to the
proper tax authorities in a timely
manner. All Tax returns filed by PWT are accurate and comply with and were prepared in
accordance with applicable statutes
and regulations. The PWT Shareholder and Seller
will cause PWT
to prepare and file all Tax returns and
pay all Taxes required prior to the
Closing.  Such Tax returns will be
subject to review
and approval by Buyer,
which approval will not
be unreasonably withheld.

 

    	6

    	 

    

  

5.11
Environmental Compliance Matters.
 PWT has
at all relevant
times with respect
to the Business or otherwise
been in material
compliance with all environmental laws,
and has received
no potentially responsible
party notices or
similar notices from any
governmental agencies or private
parties concerning releases
or threatened releases
of any “hazardous substance” as that term is defined under 42 U.S.C. 960(1) (14).

 

5.12
Compensation. PWT has
provided Buyer with
a full and
complete list of
all officers, directors, employees
and consultants of
PWT as of
the date hereof,
specifying their names
and job designations, their respective
current wages, salaries or other forms
of direct compensation, and the
basis of such
compensation, whether fixed or
commission or a combination thereof.

 

5.13No
Default.

 

(a)
 Each of
the contracts, agreements
or other instruments
of PWT and each
of the  standard  Customer 
Agreements  or  contracts 
of  PWT  is 
a  legal,  binding 
and enforceable obligation by
or against PWT,
subject to the effect of applicable bankruptcy, insolvency,
reorganization, moratorium or
other similar federal or state laws affecting
the rights of creditors and the effect
or availability of rules of
law governing specific performance, injunctive relief or other equitable remedies (regardless of whether any such
remedy is considered in a proceeding at
law or in equity). To the knowledge
of Seller, no party with whom PWT
has an agreement or contract is in default there
under or has breached
any terms or provisions thereof which is material to the
conduct of PWT’s business.

 

(b)
 PWT has
performed or is now
performing the obligations of,
and PWT is not
in material default
(or would by
the elapse of
time and/or the
giving of notice
be in material default) in
respect of, any contract,
agreement or commitment binding upon it
or its assets or properties and
material to the conduct of its
business. No third party has raised
any claim, dispute or controversy with
respect to any of the executed contracts
of PWT, nor has PWT received notice of warning of alleged nonperformance, delay in
delivery or other noncompliance by PWT
with respect to its obligations under any
of those contracts, nor are there any
facts which exist
indicating that any of those
contracts may be totally or partially terminated or suspended by the
other Parties thereto.

 

5.14
Product Warranties.  Except
as otherwise disclosed
to and acknowledged
by Buyer in the
form of a
written disclosure schedule prior
to the Closing
and for warranties under applicable
law, (a) there
are no warranties,
express or implied, written or
oral, with respect to the products or projects of  PWT, (b) 
there are no  pending or  threatened
claims with respect to any such warranty and (c) PWT has no, and after the Closing Date, will have
no, liability with respect to any
such warranty, whether known or unknown,
absolute, accrued, contingent, or otherwise
and whether due or
to become due, other than
customary returns in
the ordinary course
of business that are fully reserved against
in the PWT Financial Statements. In the event
that warranty claims arise after the
Closing, the PWT Shareholder
shall have the right
to settle those claims
through PWT, subject only to
a cost of labor and materials
charge without any
mark up.

 

5.15Proprietary
Rights.

 

(a)
 PWT has
provided Buyer in
writing a complete
and accurate list
and provided Buyer with the
right to inspect
true and complete
copies of all software,
patents and applications for patents, trademarks,
trade names, service
marks, and copyrights, and applications therefore, owned
or used by PWT or in which it has
any rights or licenses, except for software
used by PWT and generally available on the commercial market. PWT has provided Buyer
with a complete and accurate description of
all agreements or provided Buyer with the right
to inspect true and complete copies of all agreements of PWT with each
officer, employee or consultant of PWT providing PWT with title and ownership
to patents, patent applications, trade
secrets and inventions developed or used
by PWT in its business. All of such agreements are valid, enforceable and legally
binding, subject to the effect
or availability of rules of law governing
specific performance, injunctive relief or other
equitable remedies (regardless of
whether any such remedy is considered in a proceeding at
law or in equity).

 

    	7

    	 

    

 

(b)
 PWT  owns 
or  possesses  licenses or 
other rights to  use  all 
computer software, software programs,
patents, patent applications, trademarks,
trademark applications, trade secrets,
service marks, trade
names, copyrights, inventions, drawings,
designs, customer lists,
propriety know-how or information,
or other rights
with respect thereto (collectively
referred to as
“Proprietary Rights”), used
in the business
of PWT, and the same
are sufficient to conduct PWT’s
business as it has
been and is now being conducted.

 

(c)
 The operations
of PWT do
not conflict with or
infringe, and no
one has asserted
to PWT that
such operations conflict with
or infringe on any
Proprietary Rights owned, possessed or
used by any
third party. There are no claims,
disputes, actions, proceedings, suits
or appeal pending against
PWT with respect to any Proprietary
Rights, and none has been threatened against
PWT. There are no facts
or alleged fact which
would reasonably serve as
a basis for any
claim that PWT does
not have the
right to use,
free of any
rights or claims of
others, all Proprietary Rights
in the development, manufacture, use, sale or other
disposition of any or all products
or services presently being
used, furnished or sold
in the conduct of the business
of PWT as it has been and is now being conducted.

 

(d)
To the knowledge of Seller, no current employee
of PWT is
in violation of
any term of
any employment contract, proprietary
information and inventions
agreement, non-competition agreement, or
any other contract
or agreement relating
to the relationship of
any such employee with PWT or any previous
employer.

5.16
Insurance.  PWT has
provided Buyer with
complete and accurate
copies of all policies
of insurance and
provided Buyer with
the right to inspect
true and complete
copies of all policies
of insurance to which PWT is a
party or is a beneficiary or named
insured as of the Closing Date. PWT has in full force and effect, with all premiums
due thereon paid the policies of insurance set forth therein. There were no claims
in excess of $10,000 asserted or currently outstanding under any of the insurance policies of PWT in respect of all motor vehicle,
general liability, errors and omissions, workers compensation, and medical claims during the
calendar year ending on December
31, 2013 or December 31, 2014.

 

5.17
Labor Relations.  None
of the employees
of PWT are
represented by any
union or are parties
to any collective
bargaining arrangement, and, to the knowledge of Seller,
no attempts are
being made to organize or
unionize any of PWT’s
employees.  Except as
disclosed in writing
to Buyer prior
to the Closing, to the knowledge of Seller,
there is not
presently pending or
existing, and there
is not presently
threatened, any material (a) strike, slowdown,
picketing, work stoppage
or employee grievance process, or
(b) action, arbitration, audit, hearing,
investigation, litigation, or suit
(whether civil, criminal, administrative,
investigative, or informal) against or
affecting PWT relating to
the alleged violation of any legal
requirement pertaining to labor relations
or employment matters. PWT
is in compliance with all applicable
laws respecting employment and employment
practices, terms and conditions
of employment, wages and
hours, occupational safety and
health and is
not engaged in any unfair labor
practices.  PWT is in compliance with the
Immigration Reform and Control Act of
1986.   Except as disclosed in Schedule 5.17, PWT
has no employment
agreements.

 

5.18Condition
of Premises.  All
real property leased
by PWT is
in good condition and
repair, ordinary wear
and tear excepted.

 

5.19No
Distributor Agreements. Except as
disclosed to and acknowledged by
Buyer in writing prior
to the Closing,
PWT is not
a party to,
nor is the
property of PWT bound
by, any distributors’ or
manufacturer’s representative or
agency agreement.

 

5.20Conflict
of Interest Transactions.No
past or present
shareholder, director, officer or
employee of PWT
or any of
their affiliates (i)
is indebted to,
or has any
financial, business or contractual relationship or arrangement with PWT, or
(ii) has any direct or indirect interest in any property, asset or right which is owned or used by PWT or pertains to the business
of PWT with the exception of office space and facilities, owned by Stevens, and leased
by PWT.

 

5.21Litigation.There
is no action, suit, proceeding, dispute, litigation, claim, complaint or, to the knowledge
of Seller, investigation by
or before any
court, tribunal, governmental
body, governmental agency or
arbitrator pending or
threatened against or with
respect to PWT
which (i) if
adversely determined would have a
material adverse effect
on the business, condition,
assets, operations or prospects
of PWT, or (ii) challenges or would challenge any
of the actions required to be taken by PWT under this Agreement. There exists no basis for any such action, suit, proceeding,
dispute, litigation, claim, complaint or investigation.

 

    	8

    	 

    

  

5.22Non-Contravention.
 Neither (a)
the execution and
delivery of this
Agreement, nor (b) the
performance of this
Agreement will: (i)
contravene or result
in a violation
of any of the provisions of the
organizational documents of PWT; (ii) contravene or result in
a violation of any resolution adopted by
the members or directors of PWT; (iii) result in a violation or breach of,
or give any person the right to declare (whether with or without notice or lapse of
time) a default under or to terminate, any material agreement or other instrument to which PWT is a party or
by which PWT
or any of its assets
are bound; (iv) give any person
the right to accelerate the maturity of
any indebtedness or other obligation of PWT; (v) result in
the loss of any license or other contractual
right of PWT; (vi) result in the loss
of, or in a violation
of any of the terms, provisions or conditions of, any governmental license,
permit, authorization or franchise of PWT; (vii) result in the creation or imposition of any lien, charge, encumbrance or restriction
on any of the assets of PWT; (viii) result in the reassessment or
revaluation of any property of PWT by
any taxing authority or other governmental authority; (ix) result in the imposition
of, or subject PWT to any liability for,
any conveyance or transfer tax or
any similar tax; or (x)
result in a violation of any law, rule, regulation, treaty, ruling, directive,
order, arbitration award, judgment or decree to which PWT or any of its assets or any limited liability interests are subject.

 

5.23
Approvals.  PWT has
provided Buyer with
a complete and
accurate list of
all jurisdictions in which PWT is authorized to do business along with the documentation evidencing
such authorization.  No
authorization, consent or
approval of, or
registration or filing with,
any governmental authority is required
to be obtained or
made by PWT in
connection with the execution, delivery
or performance of this
Agreement, including the conveyance to
Buyer of the Business.

 

5.24
Brokers.  PWT has
not agreed to
pay any brokerage
fees, finder’s fees
or other fees or
commissions with respect
to the Transaction,
and no person is entitled, or
intends to claim that it is
entitled, to receive any such fees
or commissions in connection with such
transaction.

 

5.25
 Special Government Liabilities.
 PWT has
no existing or
pending liabilities, obligations or
deferred payments due
to any federal,
state or local government
agency or entity in connection
with its business or
with any program
sponsored or funded in
whole or in part by
any federal, state or local
government agency or entity,
nor are the PWT Shareholder or Seller aware
of any threatened action or
claim or any condition that could
support an action or claim against PWT
or the Business
for any of said liabilities, obligations
or deferred payments.

 

5.26
Sales and EBITDA. 
PWT’s total sales
for the year
ended December 31,
2014 were in excess
of $6,204,000 and
EBITDA (defined below) was approximately
$1,171,000. The PWT Shareholder and the Seller have estimated in good faith that PWT’s
total sales for the
twelve (12) months ending December 31, 2015 will be approximately
$5,300,000 and EBITDA
will be approximately $985,000. The foregoing estimates shall in no event be construed as a guaranty or warranty of future
performance. For purposes of this Agreement, “EBITDA” means, for the relevant time period, earnings before interest,
taxes, depreciation and amortization, determined in accordance with generally accepted accounting principles, as consistently
applied by PWT, plus (i) all out of pocket costs and expenses incurred by PWT in connection with the Transaction, (ii) all cash
and non-cash compensation expenses and distributions to any of the PWT Shareholder, excluding reasonable salary and benefits paid
to the PWT Shareholder in his capacity as CEO of the Seller, (iii) any extraordinary, unusual or non-recurring or non-cash amounts
paid or payable for capital expenditures, and (iv) any extraordinary, unusual or non-recurring employee bonuses or similar compensation
relating to the Transaction.

 

5.27
Working Capital. Immediately prior to the Closing, PWT’s cash and cash equivalent balance shall not
be less than $120,000. PWT represents that this cash balance should be a reasonable amount, based on historical operations, for
the business of PWT to operate sustainably after Closing.

 

5.28
Full Disclosure.  Neither
this Agreement (including
the exhibits hereto)
nor any statement, certificate
or other document
delivered to Buyer by
or on behalf
of PWT contains
any untrue statement of a material
fact or omits to state a material fact necessary to make the representations and
other statements contained herein and therein not misleading.

 

5.29
Tax Advice. The PWT Shareholder
and Seller hereby represent
and warrant that they
have sought their own independent
tax advice regarding
the Transaction and neither
the PWT Shareholder nor Seller
have relied on
any representation or statement
made by Buyer
or its representatives regarding the
tax implications of such transactions.

 

    	9

    	 

    

 

5.30
Acknowledgement of Risks. 
The PWT Shareholder hereby
represents and warrants
that he has conducted
a thorough review
of Buyer’s public
reports and financial
statements filed by it
with the Securities
and Exchange Commission, and have
had an opportunity to
ask questions of and to
receive additional information
from representatives of Buyer. The PWT Shareholder acknowledges that there
are substantial risks associated
with owning the
Series B Preferred Stock and Buyer’s
common stock into which it is convertible, including but not limited to (i) those risk factors specifically disclosed
to the PWT Shareholder in
writing by Buyer, a copy
of which has been delivered to
the PWT Shareholder, (ii) Buyer may default on the Series B Preferred Stock and the price of its common stock may decline,
(iii) the transferability of Buyer’s
common stock is restricted 
by applicable federal  and state  securities
 laws  as well as by the terms 
of  this Agreement and the
Series B Preferred Stock, and may
be impaired by a lack
of trading volume, and
(iv) those additional risks described in
public reports filed by Buyer
with the Securities and Exchange
Commission. The PWT Shareholder is acquiring the Series B Preferred Stock for investment for their own respective accounts only
and not with a view to, or for resale in connection with, any distribution thereof. The PWT Shareholder
represents and warrants
that he is a sophisticated, knowledgeable and experienced in making
investments of this kind and is
capable of evaluating the risks and merits of acquiring the Series B Preferred Stock.

 

6.
Representations and Warranties of Buyer.

Buyer
represents and warrants
to the PWT Shareholder and Seller as
follows:

 

6.1
Power and Authority;
Binding Nature of
Agreement.  Buyer has
full power and authority
to enter into
this Agreement and to
perform its obligations
hereunder.  The execution, delivery
and performance of this Agreement
by Buyer have been duly authorized by all
necessary action on its part. Assuming
that this Agreement is
a valid and
binding obligation of the other party hereto, this Agreement is a valid and binding obligation of Buyer.

 

6.2
Approvals. No authorization, consent
or approval of,
or registration or filing
with, any governmental authority
or any other
person is required
to be obtained or
made by Buyer
in connection with
the execution, delivery
or performance of this Agreement.

 

6.3Good
Standing.  Buyer (i)
is duly organized,
validly existing and in
good standing under the
laws of the
jurisdiction in which
it is organized, (ii)
has all necessary
power and authority to
own its assets
and to conduct
its business as
it is currently
being conducted, (iii) is
duly qualified or
licensed to do
business and is
in good standing
in every jurisdiction (both domestic
and foreign) where
such qualification or licensing is
required, (iv) has the full right, corporate power and authority to enter into this Agreement and to perform its obligations hereunder;
(v)

 

6.4
Authority. The execution of this Agreement by the individual whose signature is set forth at the end of this Agreement,
and the delivery of this Agreement by Buyer, have been duly authorized by all necessary corporate action on the part of Buyer;

 

6.5
 Representations True on
Closing Date. The representations
and warranties of
Buyer set forth
in this Agreement
are true and
correct on the
date hereof, and
will be true
and correct on the Closing
Date as though such representations and warranties were
made as of the Closing Date.

 

6.6
Non-Contravention.  The
execution, delivery and performance of this Agreement by Buyer will not violate, conflict with, require consent under
or result in any breach or default under (i) any of Buyer’s organizational documents (including its Articles of Incorporation and By-laws),
(ii) any applicable Law or (iii) with or without notice or lapse of time or both, the provisions of any material contract or agreement
to which Buyer is a party or to which any of its material assets are bound (the “Buyer Contracts”).

 

6.7Material
Compliance.Buyer is in material compliance with all applicable Laws and Buyer Contracts relating to this Agreement,
and the operation of its business.

 

 

6.8
Full Disclosure.  Neither
this Agreement (including
the exhibits hereto)
nor any statement, certificate
or other document
delivered to Seller by
or on behalf
of Buyer contains
any untrue statement of a material
fact or omits to state a material fact necessary to make the representations and
other statements contained herein and therein not misleading.

 

7.Conditions
to Closing.

 

7.1
Conditions Precedent to
Buyer’s Obligation to
Close.  Buyer’s obligation
to close the transaction
as contemplated in
this Agreement is
conditioned upon the
occurrence or waiver by Buyer of
the following:

 

(a)The
PWT Shareholder has delivered an updated list of assets and liabilities that is accurate and complete as of not more than five
(5) business days prior to the Closing.

 

(b)
 All representations and
warranties of the PWT Shareholder
and Seller made
in this Agreement or
in any exhibit
or schedule hereto
delivered by the PWT Shareholder
and Seller shall
be true and correct
as of the Closing
Date with the
same force and
effect as if
made on and as of that date.

 

    	10

    	 

    

  

(c)
 The PWT Shareholder and Seller shall
have performed and
complied with all
agreements, covenants and conditions
required by this
Agreement to be
performed or complied
with by them prior
to or at the Closing Date.

 

(d)
 Buyer must
be satisfied in
its sole and
absolute discretion with its due
diligence of the PWT Shareholder and Seller.

 

(e)Buyer
shall have received a report from the Secretary of State for Texas showing the existence or absence of liens, financing statements
and other encumbrances recorded against any of the Assets, dated not more than five (5) days prior to the Closing, and such report
shall be satisfactory to Buyer in its sole and absolute discretion.

 

7.2
Conditions Precedent to the PWT Shareholder
and Seller’s Obligation
to Close.  The PWT Shareholder
and Sellers’ obligation to close the
transaction as contemplated
in this Agreement
is conditioned upon
the occurrence or waiver by the
PWT Shareholder of the following:

 

(a)
 All representations
and warranties of
Buyer made in
this Agreement or
in any exhibit hereto
delivered by Buyer shall
be true and
correct on and
as of the
Closing Date with the
same force and
effect as if
made on and as
of that date.

 

(b)
Buyer  shall  have 
performed  and  complied 
with  all  agreements and conditions
required by this
Agreement to be
performed or complied
with by Buyer
prior to or at the
Closing Date.

 

(c)Buyer
shall have executed and delivered an Employment Agreement to Stevens.

 

(d)
 Seller must be
satisfied in its
sole and absolute discretion with
its due diligence of the Buyer.

 

(e)Seller
shall have reviewed the Buyer’s public filings in EDGAR to Seller’s satisfaction in its sole and absolute discretion.

 

8.Survival
of Representations and Warranties.

 

All
representations and warranties
made by each
of the Parties
hereto will survive
the Closing for eighteen (18) months
after the Closing
Date, or longer if expressly and specifically provided in the Agreement.  PWT
and the PWT Shareholder will have
joint and several
liability under this Agreement, except for the covenant not to compete in Section 3.1 of this Agreement or where otherwise
expressly and specifically provided in this Agreement.

 

9.Indemnification.

 

9.1
Indemnification by the PWT Shareholder.
 The PWT Shareholder agrees
to indemnify, defend
and hold harmless
Buyer and its
affiliates against any
and all claims, demands,
losses, costs, expenses,
obligations, liabilities and damages,
including interest, penalties and
reasonable attorney’s fees and
costs (“Losses”), incurred by
Buyer or any
of its affiliates arising,
resulting from, or
relating to any
and all liabilities of
PWT incurred prior
to the Closing Date
or relating to the Assets prior the
Closing Date, any misrepresentation of a material
fact or omission
to disclose a
material fact made
by the PWT Shareholder or Seller
in this Agreement, in
any exhibits to this Agreement or in any other document furnished or to be furnished
by PWT or Sellers under this
Agreement, or any breach
of, or failure
by the PWT Shareholder or
Seller to perform,
any of their representations, warranties,
covenants or agreements in this
Agreement or in any
exhibit or other document furnished or to be furnished by the PWT Shareholder
or Seller under this Agreement.

 

9.2
Indemnification by Buyer. 
Buyer agrees to indemnify, defend and hold harmless the PWT Shareholder and
Seller arising, resulting from, or relating to any misrepresentation of a material
fact or omission to disclose a material fact made by the Buyer in this Agreement, in any exhibits to this Agreement or in any
other document furnished or to be furnished by the Buyer under this Agreement, or any breach
of, or failure
by Buyer to
perform, any of
its representations, warranties,
covenants or agreements in
this Agreement or in
any exhibit or
other document furnished
or to be
furnished by Buyer under this
Agreement.

 

9.3Procedure
for Indemnification Claims.

 

(a)
 Whenever any
parties become aware
that a claim
(an “Underlying Claim”)
has arisen entitling
them to seek
indemnification under Section
9 of this Agreement, such  parties (the 
“Indemnified Parties”) shall  promptly send 
a  notice  (“Notice”) to the parties liable for such indemnification
(the “Indemnifying Parties”) of the right to indemnification (the “Indemnity
Claim”); provided, however, that the failure to so notify the Indemnifying Parties will relieve the Indemnifying Parties
from liability under this Agreement with respect
to such Indemnity Claim
only if, and only to
the extent that, such failure to notify the Indemnifying Parties results in the forfeiture by the Indemnifying Parties
of rights and defenses otherwise available to the Indemnifying Parties with respect to
the Underlying Claim. Any Notice pursuant to this Section 9.3(a) shall set forth in
reasonable detail, to the extent then available, the basis for such Indemnity Claim
and an estimate of the amount of damages
arising therefore.

 

    	11

    	 

    

 

(b)
 If an
Indemnity Claim does
not result from or arise
in connection with
any Underlying Claim or
legal proceedings by
a third party,
the Indemnifying Parties will have
thirty (30) calendar days following receipt of the Notice to issue a written response to the Indemnified Parties, indicating
the Indemnifying Parties’ intention to either (i) contest
the Indemnity Claim or (ii) accept the
Indemnity Claim as valid. The Indemnifying Parties’ failure
to provide such a written response within such thirty (30) day period shall
be deemed to be an acceptance of the Indemnity Claim as valid. In the event that
an Indemnity Claim is
accepted as valid,
the Indemnifying Parties shall,
within fifteen (15) business days thereafter, pay Losses incurred by the Indemnified Parties
in respect of the Underlying Claim
in cash by wire transfer of immediately
available funds to the account or accounts specified by the Indemnified Parties. To
the extent appropriate, payments for indemnifiable Losses made pursuant to this
Agreement will be treated
as adjustments to the Purchase Price.

 

(c)
 In the
event an Indemnity
Claim results from
or arises in
connection with any Underlying
Claim or legal
proceedings by a
third party, the
Indemnifying Parties shall have fifteen (15) calendar days following receipt
of the Notice to send a Notice to the
Indemnified Parties of their election to, at
their sole cost and expense, assume the
defense of any such
Underlying Claim or legal
proceeding; provided that such
Notice of election shall contain a confirmation by the Indemnifying Parties
of their obligation to hold harmless the Indemnified
Parties with respect
to Losses arising from such Underlying
Claim. The failure by the Indemnifying Parties to elect to assume the defense of any
such Underlying Claim within such
fifteen (15) day period shall entitle
the Indemnified Parties to undertake control of the defense of the Underlying Claim on behalf of and
for the account and
risk of the Indemnifying Parties
in such manner
as the Indemnified Parties may
deem appropriate, including, but not
limited to, settling
the Underlying Claim. The parties controlling the defense of the Underlying Claim shall not, however,
settle or compromise such Underlying
Claim without the
prior written consent of the other
parties, which consent shall not be unreasonably withheld or delayed.  The non-controlling
parties shall be
entitled to participate in
(but not control) the defense of
any such action, with their own counsel and at their own expense.

 

(d)
 The Indemnifying Parties
and the Indemnified Parties
will cooperate reasonably, fully and
in good faith
with each other,
at the sole
expense of the Indemnifying Parties
subject to the
last sentence of
Section 9.3(c) of
this Agreement, in connection
with the defense,
compromise or settlement of
any Underlying Claim including,
without limitation, by
making available to the
other parties all
pertinent information and witnesses
within their reasonable control.

 

(e)Basket;
Limitations on Indemnification; Calculation of Losses.

(i)Basket.
A Buyer Indemnified Party shall not be entitled to make a claim for indemnification for any Losses arising out of Section 9.1
until the aggregate amount of all claims for Losses which arise out of Section 9.1 exceeds ten thousand dollars ($10,000) (the
“Basket”). In the event the aggregate amount of such Losses exceeds the Basket, then the Seller shall indemnify such
Buyer Indemnified Party with respect to the amount of all Losses exceeding the amount of the Basket.

(ii)Seller’s
and PWT Shareholder Cap. The maximum aggregate liability of the Seller and PWT Shareholder, collectively, under Section 8.2(a)
for all Losses shall be an amount equal to the Purchase Price actually received by such Seller or PWT Shareholder (the “Seller’s
Cap”). 

(iii)Exclusions
from the Basket and Seller’s Cap. Notwithstanding the foregoing, the following Losses shall not be subject to the provisions
of the Basket and the Seller’s Cap and a Buyer Indemnified Party shall be entitled to indemnification with respect to such
Losses in accordance with this Article 9 as though the Basket and the Seller’s Cap were not a part of this Agreement:

(1)              
Losses relating to, caused by or resulting from the breach of any of the Seller’s and/or PWT Shareholder’s representations
and warranties as a result of fraud or intentional misrepresentation; and

(2)              
Losses relating to, caused by or resulting from the breach of any ongoing covenant of the Seller or PWT Shareholder.

 

9.4Recovery
Losses for which a Buyer Indemnified Party may be entitled to recover pursuant to this Article 9 shall be offset by the
pro rata cancellation of Series B Preferred Shares held by the PWT Shareholder at the face value of each share, if any, against
any Seller or PWT Shareholder in accordance with this Article 9. Except for specific performance and injunctive relief, the indemnification
obligations and procedures set forth in this Article 9 shall be the sole and exclusive remedy for liabilities arising out of this
Agreement and the transactions contemplated hereby.

 

    	12

    	 

    

 

10.Injunctive
Relief.

 

10.1
Damages Inadequate.  Each
party acknowledges that
it would be
impossible to measure in money
the damages to the
other party if
there is a
failure to comply
with any covenants and provisions
of this Agreement, and agrees
that in the
event of any breach
of any covenant or provision, the other party to this Agreement will not have an adequate remedy at law.

 

10.2
Injunctive Relief.  It
is therefore agreed
that the other
party to this
Agreement who is entitled
to the benefit of
the covenants and provisions
of this Agreement which
have been breached, in addition
to any other
rights or remedies which they may
have, will be entitled to immediate injunctive
relief to enforce such covenants and provisions,
and that in the event that any
such action or proceeding is brought
in equity to
enforce them, the defaulting
or breaching party will not
urge a defense that there is an adequate remedy at law.

 

11.Further
Assurances.

 

Following
the Closing, each party shall furnish
to the other party such instruments and
other documents as the party may reasonably
request for the
purpose of carrying
out or evidencing
the transactions contemplated hereby.

 

12.Fees
and Expenses.

 

Each
party hereto shall
pay all fees,
costs and expenses
that it incurs
in connection with the negotiation
and preparation of this
Agreement and in carrying
out the transactions contemplated
hereby (including, without
limitation, all fees
and expenses of
its counsel and accountant).

 

13.Waivers.

 

If
any party at
any time waives
any rights hereunder
resulting from any
breach by the other
party of any
of the provisions
of this Agreement, such
waiver is not
to be construed
as a continuing waiver
of other breaches of the same or
other provisions of this Agreement. Resort to any remedies referred to herein will
not be construed as a waiver of any other rights and remedies to which such party
is entitled under this Agreement or otherwise.

 

14.Successors
and Assigns.

 

Each
covenant and representation of
this Agreement will
inure to the
benefit of and
be binding upon each
of the Parties,
their personal representatives,
assigns and other
successors in interest.

 

15.Entire
and Sole Agreement.

 

This
Agreement constitutes the
entire agreement between the
Parties and supersedes
all other agreements, representations,
warranties, statements, promises
and undertakings, whether oral
or written, with
respect to the subject matter of this
Agreement. This Agreement may be  modified or amended only
by a written agreement signed by all Parties
to this Agreement. The Parties acknowledge that as of the date of the execution of
this Agreement, any and
all other agreements, either written or verbal, regarding the substance of
this Agreement will be terminated and be of no further force or effect.

 

16.Governing
Law.

 

This
Agreement will be governed
by the laws
of California without giving
effect to applicable conflict of
law provisions.  With
respect to any
litigation arising out
of or relating
to this Agreement, each party
agrees that it
will be filed
in and heard
by the state
or federal courts with
jurisdiction to hear
such suits located
in Santa Barbara
County, California.

 

17.Counterparts.

 

This
Agreement may be
executed simultaneously in
any number of
counterparts, each of which counterparts
will be deemed
to be an
original, and such
counterparts will constitute
but one and the
same instrument.

 

18.Assignment.

 

Except
in the case
of an affiliate
of Buyer, this
Agreement may not
be assignable by any
party without prior
written consent of the
other Parties.

 

19.Remedies.

 

Except
as otherwise expressly
provided herein, none of
the remedies set forth
in this Agreement are
intended to be
exclusive, and each
party will have
all other remedies
now or hereafter existing at law, in
equity, by statute or otherwise. The election
of any one or
more remedies will not constitute a waiver of the right to pursue other available remedies.

 

    	13

    	 

    

 

20.Section
Headings.

 

The
section headings in
this Agreement are included
for convenience only,
are not a
part of this Agreement and
will not be
used in construing
it.

 

21.Severability.

 

In
the event that
any provision or
any part of
this Agreement is held
to be illegal,
invalid or unenforceable, such
illegality, invalidity or
unenforceability will not affect
the validity or enforceability
of any other provision
or part of this Agreement.

 

22.Notices.

 

Each
notice or other
communication hereunder must
be in writing
and will be
deemed to have been
duly given on
the earlier of
(i) the date
on which such
notice or other
communication is actually received
by the intended
recipient thereof, or (ii)
the date five
(5) days after
the date such notice or
other communication is
mailed by registered
or certified mail (postage
prepaid) to the intended recipient
at the following
address (or at
such other address
as the intended
recipient will have specified
in a written notice given to
the other Parties hereto):

 

If
to the PWT Shareholder and Seller:

Progressive
Water Treatment, Inc.

P.O.
Box 774,

McKinney,
TX 75070

Attn:
Marc Stevens, President

Telephone:
 (972) 562-3002

 

If
to Buyer:

OriginClear,
Inc.

5645
West Adams Blvd

Los
Angeles, CA 90016

Attention:
T. Riggs Eckelberry, CEO

Telephone:
(877) 999- 6645

 

23.Publicity.

 

Except
as may be
required in order
for a party
to comply with
applicable laws, rules, or regulations
or to enable
a party to
comply with this
Agreement, or necessary for
Buyer to prepare and
disseminate any private
or public placements
of its securities
or to communicate with
its stakeholders, no press
release, notice to any third
party or other
publicity concerning the Transaction will
be issued, given or otherwise disseminated
without the prior
approval of each of
the Parties hereto.

 

[Signatures
on following page.]

 

    	14

    	 

    

 

IN
WITNESS WHEREOF, this
Agreement has been
entered into as
of the date
first above written.

 

	PWT:	Progressive Water
Treatment, Inc.
	 	 
	 	By: 	/s/ Marc
Stevens
	 	 	Marc
Stevens, President

 

	

PWT
Shareholder:

	
	 	 
	 	By: 	/s/ Marc
Stevens
	 	 	Marc
Stevens, Individually

 

	Company:	ORIGINCLEAR, INC., a Nevada
    corporation
	 	 
	 	By: 	/s/ T.
Riggs Eckelberry
	 	 	T.
Riggs Eckelberry, Chief Executive
Officer

 

 

 

    	15

    	 

    

 

 EXHIBIT
A

 

[RESERVED]

 

    	16

    	 

    

 

EXHIBIT
B

Certificate
of Designation

CERTIFICATE
OF DESIGNATION

OF

ORIGINCLEAR,
INC.

 

1.
The name of the corporation is OriginClear, Inc. (the “Corporation”).

2.
By resolution of the board of directors pursuant to a provision in the articles of incorporation this certificate establishes
the following regarding the voting powers, designations, preferences, limitations, restrictions and relative rights of the following
class or series of stock.

Section
1.Series B Preferred Stock. This series of the Corporation’s Preferred Stock shall be designated "Series
B Preferred Stock". The number of shares constituting the Series B Preferred Stock shall be Ten Thousand (10,000) shares.
The total face value of this entire series is One Million Five Hundred Thousand Dollars ($1,500,000). Each share of Series
B Preferred Stock shall have a stated face value of One Hundred Fifty Dollars ($150) (“Stated Value”). The
Stated Value for each share of Series B Preferred Stock is convertible into shares of Common Stock of the Corporation at a conversion
price of Three Cents ($0.03) per share (“Conversion Price”), as adjusted in accordance with Section 3 below. The Series
B Preferred Stock shall have the rights, preferences and privileges set forth below:

Section
2. Liquidation Preference. In the event of any liquidation, dissolution or winding up of the Corporation, either voluntary
or involuntary, the holder of each outstanding share of the Series B Preferred Stock shall be entitled to receive, out of the
assets of the Corporation available for distribution to its shareholders upon such liquidation, whether such assets are capital
or surplus of any nature, an amount equal to One Hundred Fifty Dollars ($150.00) for each such share of the Series B Preferred
Stock (as adjusted for any combinations, consolidations, stock distributions or stock dividends with respect to such shares),
plus all dividends, if any, declared and unpaid thereon as of the date of such distribution, before any payment shall be made
or any assets distributed to the holders of the Common Stock.

		(a)	If
                                         the assets to be distributed pursuant to Section 2 above to the holders of the Series
                                         B Preferred Stock shall be insufficient to permit the receipt by such holders of the
                                         full preferential amounts aforesaid, then all of such assets shall be distributed among
                                         such holders of Series B Preferred Stock ratably in accordance with the number of such
                                         shares then held by each such holder.

		(b)	The
                                         sale of all or substantially all of the Corporation’s assets, any consolidation
                                         or merger of the Corporation with or into any other corporation or other entity or person,
                                         or any other corporate reorganization, in which the stockholders of the Corporation immediately
                                         prior to such consolidation, merger or reorganization, own less than fifty percent (50%)
                                         of the Corporation’s voting power immediately after such consolidation, merger
                                         or reorganization, or any transaction or series of related transactions to which the
                                         Corporation is a party in which in excess of fifty percent (50%) of the Corporation’s
                                         voting power is transferred, excluding any consolidation or merger effected exclusively
                                         to change the domicile of the Corporation, shall be deemed to be a liquidation, dissolution
                                         or winding up within the meaning of this Section 2.

    	17

    	 

    

Section
3. Conversion. The Series B Preferred Stock shall be subject to conversion into Common Stock upon the following terms and
conditions:

		(a)	Timing
                                         of Conversion.

		(i)	Conversion
                                         by the Holder. The shares of Series B Preferred Stock held by any holder may be converted
                                         in Common Stock as set forth herein, at the option of the holder according to the following
                                         schedule (“Conversion Schedule”): one-third (1/3) of the shares received
                                         by the holder may be converted beginning one (1) year after the first date on which a
                                         share of Series B Preferred Stock was issued (the “Original Issue Date”);
                                         one-third (1/3) of such shares may be converted beginning two (2) years after the Original
                                         Issue Date; and the remaining one-third (1/3) of such shares may be converted beginning
                                         three years after the Original Issue Date. Notwithstanding the foregoing schedule, holders
                                         of Series B Preferred Stock may convert their shares into Common Stock effective immediately
                                         prior to the sale of all or substantially all of the Corporation’s assets.

		(ii)	Conversion
                                         at the Option of the Corporation. Prior to any event described in Section 2(b), above,
                                         the Corporation may, at its sole option, by written notice given to the holders of the
                                         Series B Preferred Stock, cause to have such holder’s shares of Series B Preferred
                                         Stock converted into Common Stock, with such conversion being deemed to have occurred
                                         immediately prior to the closing of such event.

		(iii)	Modification
                                         of Conversion Schedule. If, within three (3) years after the Original Issue Date,
                                         the holder voluntarily resigns his employment with the Corporation, or is terminated
                                         for Cause, as defined in any written agreement between the holder and the Corporation,
                                         the Corporation may, at its sole option, change the Conversion Schedule to the following:
                                         one-fifth (1/5) of the shares received by the holder may be converted beginning one (1)
                                         year after the first date on which a share of Series B Preferred Stock was issued (the
                                         “Original Issue Date”); one-fifth (1/5) of such shares may be converted beginning
                                         two (2) years after the Original Issue Date; one-fifth (1/5) of such shares may be converted
                                         beginning three (3) years after the Original Issue Date; one-fifth (1/5) of such shares
                                         may be converted beginning four (4) years after the Original Issue Date; and the remaining
                                         one-fifth (1/5) of such shares may be converted beginning five (5) years after the Original
                                         Issue Date.

		(b)	Mechanics
                                         of Conversion.

		(i)	Voluntary
                                         Conversion. As a condition to any conversion of shares of the Series B Preferred
                                         Stock pursuant to Section 3(a)(i) above, the holder of the shares to be converted
                                         shall surrender the certificate or certificates therefor, duly endorsed, at the principal
                                         office of the Corporation or of any transfer agent for such stock, and shall deliver
                                         a written notice to the Secretary of the Corporation at the Corporation's principal office
                                         stating the number of such shares of the Series B Preferred Stock to be converted (the
                                         “Conversion Notice”). Promptly thereafter, the Corporation shall issue and
                                         deliver to such holder a certificate for the number of shares of the Common Stock to
                                         which such holder shall be thereby entitled. In addition, if less than all the shares
                                         represented by such certificate(s) are surrendered for conversion, the Corporation shall
                                         issue and deliver to such holder a new certificate for the balance of the shares of Series
                                         B Preferred Stock not so converted. The effective date of such conversion shall be the
                                         close of business on the later of the date on which a proper notice is received by the
                                         Secretary of the Corporation or the date the duly endorsed certificate(s) is (are) received
                                         by the Corporation or the transfer agent, and the person or persons entitled to receive
                                         the shares of the Common Stock issuable upon such conversion shall be treated for all
                                         purposes as the record holder or holders of such shares on such effective date.

 

    	18

    	 

    

 

 

		(ii)	Conversion
                                         at the Option of the Corporation. In the case of conversion pursuant to Section 3(a)(ii)
                                         above, every outstanding share of the Series B Preferred Stock shall be converted automatically
                                         without any further action by the holder of such share and whether or not the certificate
                                         representing such share shall be surrendered to the Corporation or the transfer agent
                                         for such stock; provided, however, that the Corporation shall not be obligated to issue
                                         a certificate evidencing the shares of the Common Stock issuable upon such conversion
                                         unless the certificate evidencing such share of the Series B Preferred Stock shall be
                                         surrendered at the principal office of the Corporation or at the principal office of
                                         such transfer agent. Upon such surrender, the Corporation shall promptly issue and deliver
                                         to such holder a certificate for the number of shares of the Common Stock to which such
                                         holder shall be thereby entitled. The effective date of such conversion shall be the
                                         close of business on the date of the occurrence of the event described in Section 3(a)(ii)
                                         above. The person or persons entitled to receive the shares of the Common Stock issuable
                                         upon such conversion shall be treated for all purposes as the record holder or holders
                                         of such shares on such effective date.

		(c)	Adjustment
                                         to Conversion Price. If, on the date of any Conversion Notice,, the Market Price
                                         of the Corporation’s Common Stock, defined below, is less than the Conversion Price,
                                         then the Conversion Price shall be adjusted to the lower Market Price, for that conversion.
                                         The number of shares of Common Stock issuable for each share of converted Series B Preferred
                                         Stock shall be calculated by dividing the Stated Value by the Market Price. For the purposes
                                         of this paragraph, the Market Price shall be defined as the average of the closing trade
                                         prices of the twenty-five (25) days prior to the date of the Conversion Notice.

		(d)	Adjustments
                                         to Conversion Price for Stock Dividends, Consolidations and Subdivisions. In case the
                                         Corporation at any time after the first issuance of a share of the Series B Preferred
                                         Stock shall declare or pay on the Common Stock any dividend in shares of Common Stock,
                                         or effect a subdivision of the outstanding shares of the Common Stock into a greater
                                         number of shares of the Common Stock (by reclassification or otherwise than by payment
                                         of a dividend payable in shares of the Common Stock), or shall combine or consolidate
                                         the outstanding shares of the Common Stock into a lesser number of shares of the Common
                                         Stock (by reclassification or otherwise), then, and in each such case, the Conversion
                                         Price (as previously adjusted) in effect immediately prior to such declaration, payment,
                                         subdivision, combination or consolidation shall, concurrently with the effectiveness
                                         of such declaration, payment, subdivision, combination or consolidation, be proportionately
                                         adjusted.

		(e)	Adjustments
                                         for Reclassifications and Certain Reorganizations. In case the Corporation at any
                                         time after the first issuance of a share of the Series B Preferred Stock shall reclassify
                                         or otherwise change the outstanding shares of the Common Stock, whether by capital reorganization,
                                         reclassification or otherwise, or shall consolidate with or merge with or into any other
                                         corporation where the Corporation is not the surviving corporation but not otherwise,
                                         then, and in each such case, each outstanding share of the Series B Preferred Stock shall,
                                         immediately after the effectiveness of such reclassification, other change, consolidation
                                         or merger, be convertible into the type and amount of stock and other securities or property
                                         which the holder of that number of shares of the Common Stock into which such share of
                                         the Series B Preferred Stock would have been convertible pursuant to Section 3(c)
                                         above immediately before the effectiveness of such reclassification, other change, consolidation
                                         or merger would be entitled to receive in respect of such shares of the Common Stock
                                         as the result of such reclassification, other change, consolidation or merger.

		(f)	Fractional
                                         Shares. No fractional shares of the Common Stock shall be issuable upon the conversion
                                         of shares of the Series B Preferred Stock and the Corporation shall pay the cash equivalent
                                         of any fractional share upon such conversion.

 

    	19

    	 

    

 

Section
4. Notices. Any notice required by the provisions of this Certificate of Designation to be given to holders of shares of
the Series B Preferred Stock shall be deemed given three days following the date on which mailed by certified mail, return receipt
requested, postage prepaid, addressed to such holder at the address last appearing on the books of the Corporation for such holder
or given by such holder to the Corporation for the purpose of notice, or if no such address appears or is so given, at the principal
office of the Corporation, or upon personal delivery to the aforementioned address.

Section
5. Voting Rights. Subject to Section 7 below, the holders of the Series B Preferred Stock shall be entitled to vote with holders
of Common Stock on all corporate actions, including the election of the Corporation’s directors. The holders of the Series
B Preferred Stock shall be entitled to cast one vote for each share of Series B Preferred Stock owned by the holder.

Section
6. Protective Provisions. So long as any shares of the Series B Preferred Stock shall remain outstanding, the Corporation
shall not, without first obtaining the approval (by vote or written consent, as provided by law) of the holders of at least a
majority of the then outstanding shares of Series B Preferred Stock voting together as a class:

		(a)	alter
                                         or change the rights, preferences or privileges of the shares of the Series B Preferred
                                         Stock so as to affect materially and adversely such shares; or

		(b)	create
                                         any new class of shares having preference over the Series B Preferred Stock.

Section
7. Status of Converted Stock. In the event any shares of the Series B Preferred Stock shall be converted pursuant to Section 3
above, the shares so converted shall be cancelled and shall revert to the Corporation's authorized but unissued Preferred Stock.

Section
8. Transferability. The Series B Preferred Stock shall not be transferable, except provided that in the event of the death
of a holder of shares of the Series B Preferred Stock, to the heirs or estate of such person.

Section
9. Redemption.

(a)
If, within three (3) years after the Original Issue Date, the holder voluntarily resigns his employment with the Corporation,
or is terminated for Cause, as defined in any written agreement between the holder and the Corporation, the Corporation may, at
its sole option, within ninety (90) days after such termination, redeem such holder’s Series B Preferred Stock.

(b)
The Corporation shall effect any such redemption by paying in cash in exchange for the shares of Series B Preferred to be redeemed
a sum equal to One Hundred Fifty ($150) per share (as adjusted for any stock dividends, combinations, splits, recapitalizations
and the like) plus accrued and unpaid dividends with respect to such shares. The total amount to be paid for the Series B Preferred
is hereinafter referred to as the “Redemption Price”, and the date of such payment is hereinafter referred to as the
“Redemption Date.” At least thirty (30) days but no more than sixty (60) days prior to a Redemption Date, the Corporation
shall send a notice (a “Redemption Notice”) to all holder(s) of Series B Preferred to be redeemed setting forth (A)
the Redemption Price for the shares to be redeemed; and (B) the place at which such holders may obtain payment of the Redemption
Price upon surrender of their share certificates. If the Corporation does not have sufficient funds legally available to redeem
all shares to be redeemed at the Redemption Date, then it shall redeem such shares pro rata (based on the portion of the aggregate
Redemption Price payable to them) to the extent possible and shall redeem the remaining shares to be redeemed as soon as sufficient
funds are legally available. 

    	20

    	 

    

(d)
On or after a Redemption Date, each holder of shares of Series B Preferred to be redeemed shall surrender such holder’s
certificates representing such shares to the Corporation in the manner and at the place designated in the Redemption Notice, and
thereupon the Redemption Price of such shares shall be payable to the order of the person whose name appears on such certificate
or certificates as the owner thereof and each surrendered certificate shall be canceled. In the event less than all the shares
represented by such certificates are redeemed, a new certificate shall be issued representing the unredeemed shares. From and
after such Redemption Date, unless there shall have been a default in payment of the Redemption Price or the Corporation is unable
to pay the Redemption Price due to not having sufficient legally available funds, all rights of the holder of such shares as holder
of Series B Preferred (except the right to receive the Redemption Price without interest upon surrender of their certificates),
shall cease and terminate with respect to such shares; provided that in the event that shares of Series B Preferred are
not redeemed due to a default in payment by the Corporation or because the Corporation does not have sufficient legally available
funds, such shares of Series B Preferred shall remain outstanding and shall be entitled to all of the rights and preferences provided
herein.

(e)
The conversion rights (as set forth in Section 3) for such Series B Preferred shall terminate at the close of business on
the fifth (5th) day preceding the Redemption Date, unless default is made in payment of the Redemption Price.

3.
Effective date of filing: Immediate.

4.
Signature:

By:_____________________

T.
Riggs Eckelberry, President

    	21

    	 

    

 

EXHIBIT
C

Employment
Agreement

EMPLOYMENT
AGREEMENT

 

This
EMPLOYMENT AGREEMENT (this “Agreement”) is made as of the [Closing Date] 2015, by and between Progressive Water Treatment,
Inc., a Texas corporation,  (the “Company”, which is a wholly owned subsidiary
of OriginClear, Inc., a Nevada corporation (“OriginClear”), and Marc Stevens, an individual (“Employee”),
and is made with respect to the following facts:

 R
E C I T A L S

 

A.The
Company and the Employee wish to ensure that the Company will receive the benefit of Employee’s loyalty and service during
Employee’s tenure and that the Employee will be appropriately treated and compensated for services rendered.

B.The
parties have entered into this Agreement for the purpose of setting forth the terms of employment of the Employee by the Company.

NOW,
THEREFORE, in consideration of the premises and mutual covenants herein contained, THE PARTIES HERETO AGREE AS FOLLOWS:

 

1.                 
Employment of Employee and Duties. The Company hereby hires Employee and Employee hereby accepts employment upon
the terms and conditions described in this Agreement. The Employee shall be the Chief Executive Officer of the Company, with the
responsibility for the day-to-day management of the Company’s operations. Subject to (a) the general supervision of the
board of directors of the Company (the “Board of Directors”), and (b) the Employee’s duty to report to the Board
of Directors periodically, as specified by them from time-to-time, Employee shall have all of the authority to perform his employment
duties for the Company.

2.                 
Time and Effort. Employee agrees to devote his full working time and attention to the management of the Company’s
business affairs, the implementation of its strategic plan, as determined by the Board of Directors, and the fulfillment of his
duties and responsibilities as Chief Executive Officer. Expenditure of a reasonable amount of time for personal matters and business
and charitable activities shall not be deemed to be a breach of this Agreement, provided that those activities do not materially
interfere with the services required to be rendered to the Company under this Agreement.

3.                 
The Company’s Authority. Employee agrees to comply with the Company’s reasonable rules and regulations
as adopted by the Company’s Board of Directors regarding performance of his duties, and to carry out and perform those orders,
directions and policies established by the Company with respect to his engagement. Employee shall promptly notify the Company’s
Board of Directors of any objection he has to the Board’s directives and the reasons for such objection.

4.                 
Noncompetition by Employee. Employee is subject to noncompetition obligations pursuant to Section 3.1 of that certain
Share Exchange Agreement, dated as of July 31, 2015, by and among Progressive Water Treatment, Inc., a Texas corporation, Employee
and OriginClear. Upon the expiration of the term of those obligations, and if Employee is then employed by the Company, then thereafter
and throughout the remaining term of this Agreement, Employee shall not, directly or indirectly, either as an employee, employer,
consultant, agent, principal, partner, stockholder (in a private company), corporate officer, director, or in any other individual
or representative capacity, engage or participate in any business that is in direct competition with the business of the Company
or its affiliates. Furthermore, any commissions, referral fees or other compensation paid to Employee by other payors during the
term of this Agreement will be the property of the Company, and therefore, all such compensation will promptly be remitted by
Employee to the Company.

    	22

    	 

    

 

5.                  
Term of Agreement. Subject to earlier termination as provided herein, the term of this Agreement shall be for three
(3) years. Notwithstanding the foregoing, the Company and Employee agree that Employee’s employment hereunder may be terminated
by the Employee resigning with or without “Good Reason” or by the Company’s declaration of termination with
or without “Cause” at any time, subject to the terms of this Section 5 and Section 6. Such termination shall
be effective upon delivery of written notice from the acting party to the other of its election to terminate employment pursuant
to this Section 5. “Cause” when used in connection with the termination of employment with the Company, shall
mean the termination of the Employee’s employment by the Company by reason of (i) Employee’s material breach of any
of this Agreement which breach, if curable, is not cured within thirty (30) days of written notice to Employee of such breach;
(ii) the conviction of, or the entering of a guilty plea or no contest plea by, the Employee for a crime involving moral turpitude
by a court of competent jurisdiction; (iii) the commission by the Employee of an act of fraud upon the Company or any of its affiliates;
(iv) the misappropriation of any funds or property of the Company or any of its affiliates by the Employee; (v) the failure by
the Employee to perform material duties reasonably assigned to him or otherwise assigned to and accepted by Employee, or to comply
with any written Company policy after reasonable written notice and opportunity to cure such performance; (vi) the engagement
by the Employee in any direct, material conflict of interest with the Company without compliance with the Company’s conflict
of interest policy, if any, then in effect; or (vii) the engagement in any activity which would constitute a material violation
of the provisions of the Company’s insider trading policy, if any, then in effect. Cause shall not be present unless (1)
the Company shall have given Employee written notice specifying in reasonable detail the event or circumstances constituting Cause,
and (2) Employee fails to cure such event or circumstances within forty-five (45) days from the date of such notice from the Company.
“Good Reason” when used in connection with the resignation of employment from the Company by Employee, shall mean
the resignation from the Company by Employee by reason of: (i) any breach by the Company with any of the material provisions of
this Agreement, other than an isolated, insubstantial or inadvertent failure which is remedied by Company promptly after Company’s
receipt of written notice thereof from Employee; (ii) a material diminution in Executive’s authorities, duties or responsibilities
normally associated with Employee’s position or Employee is assigned duties and responsibilities that are inconsistent,
in a material respect, with the scope of duties and responsibilities associated with Employee’s status as a senior executive
officer; or (iii) a material breach by the Company of the Company’s Articles of Incorporation or By-laws if such breach
would materially prejudice Employee. Good Reason shall not be present unless (1) Employee shall have given the Company written
notice specifying in reasonable detail the event or circumstances constituting Good Reason, and (2) the Company fails to cure
such event or circumstances within forty-five (45) days from the date of such notice from Employee. 

6.                 
Severance Benefits.

6.1
Continuation of Salary and Benefits. In the event that the Employee’s employment is terminated by the Company
without Cause or by the Employee for Good Reason prior to the end of the initial term, the Company shall, subject to the terms
of Sections 6.2 and 6.3 below, and only if and as long as Employee is not in breach of his obligations under this Agreement, pay
compensation to Employee in the manner set forth below. If the Employee’s employment is terminated by the Company without
Cause or by the Employee for Good Reason during the term of this Agreement, then the Company shall continue to pay to Employee
his current base salary provided for under this Agreement in periodic payments in accordance with its customary payroll practices
for a period of twelve (12) months or until the third (3rd) anniversary date of this Agreement whichever occurs first
(the “Severance Payment Period”). If the Employee’s employment is terminated by the Company without Cause or
by the Employee for Good Reason, the Company shall also continue to provide benefits in the kind and amounts provided to its employees
generally throughout the Severance Payment Period, including continuation of any Company-paid benefits provided pursuant hereto,
for the Employee and, if applicable, the Employee’s spouse and minor children, provided such benefits will be subject to
immediate termination to the extent Employee receives benefits under another similar benefit plan. Employee agrees that the above
payments shall be a full settlement of the Company’s obligations to Employee hereunder in the event of a termination without
Cause or with Good Reason.

    	23

    	 

    

 

6.2Disability;
Death.If at any time during the term of this Agreement, Employee is unable, due to physical or mental disability,
to perform effectively his duties hereunder, the Company shall continue payment of compensation as provided in Section 9.1
during the first six (6) months of such disability to the extent not covered by the Company’s disability insurance policies.
Upon the expiration of such six-month period, the Company, at its sole option, may continue payment of Employee’s salary
for such additional periods as the Company elects, or may terminate this Agreement without any further obligations hereunder.
If Employee should die during the term of this Agreement, Employee’s employment and the Company’s obligations hereunder
shall terminate as of the end of the month in which Employee’s death occurs and there will be no salary and benefit continuation
period. Employee shall be deemed to have incurred a disability if Employee suffers a physical or mental condition which (i) satisfies
the definition of “total disability” in the Company’s disability insurance policies, or (ii) if no such policy
or plan is then covering Employee, in the reasonable judgment of the Board of Directors, prevents Employee from engaging in any
substantial gainful employment with the Company for a period of more than six (6) months.

6.3Standstill
Agreement; Lock-up Letters.So long as Employee is employed by the Company or receives severance compensation as provided
in Section 6.1 above, Employee agrees that he will sign any reasonable securities lock-up letters, standstill agreements, or other
similar documentation required by an underwriter in connection with a public offering of securities by the Company or its parent
corporation or take other actions reasonably related thereto as requested by the Board of Directors under similar terms and conditions
as for other management employees of the Company generally. Failure to take any such action shall be a “Cause” for
termination and shall cause Employee to forfeit any further rights to compensation or other payments hereunder. In addition, Employee
agrees that in such event the Company can seek and obtain specific performance of such covenant, including any injunction requiring
execution thereof, and the Employee hereby appoints the then current president of the Company to sign any such documents on his
behalf so long as such documents are prepared on the same basis as for other management shareholders generally.

6.4Relocation
or Material Changes in Duties. If Employee’s employment is terminated because of Employee’ refusal to
relocate to another office of the Company that is more than fifty (50) statute miles from the Employee’s then current office,
or to accept a material change in duties, such termination shall be deemed a termination without Cause. 

7.Confidential
Information: Nondisclosure Covenant.

7.1.Confidential
Information. As used herein the term “Confidential Information” shall mean all customer and contract lists,
records, financial data, trade secrets, business and marketing plans and studies, suppliers, investors, financing sources, manuals
for employee and personnel policies, manufacturing and/or production manuals, computer programs and software, strategic plans,
formulas, manufacturing and production processes and techniques (including without limitation types of machinery and equipment
used together with improvements and modifications thereon), tools, applications for patents, designs, models, patterns, drawings,
tracings, sketches, blueprints, and all other similar information developed and/or used by Company in the course of its business
and which is not known by or readily available to the general public.

7.2Nondisclosure
Covenant. Employee acknowledges that, in the course of performing services for and on behalf of Company, Employee has
had and will continue to have access to Confidential Information. Employee hereby covenants and agrees to maintain in strictest
confidence all Confidential Information in trust for Company, its successors and assigns, and to disclose such information only
on a “need-to-know” basis in furtherance and for the benefit of the Company’s business. During the period of
Employee’s employment with Company and at any and all times following Employee’s termination of employment for any
reason, including without limitation Employee’s voluntary resignation with or without Good Reason or involuntary termination
with or without Cause, Employee agrees to not misappropriate, utilize for any purpose other than for the direct benefit of the
Company, or disclose or make available to anyone outside Company’s organization, any Confidential Information or anything
relating thereof without the prior written consent of Company, which consent may be withheld by Company for any reason or no reason
at all.

    	24

    	 

    

 

7.3Return
of Property. Upon Employee’s termination of his employment with Company for any reason, including without limitation
Employee’s voluntary resignation with or without Good Reason or involuntary termination by the Company with or without Cause,
Employee hereby agrees to immediately return to Company’s possession all copies of any writings, computer discs or equipment,
drawings or any other information relating to Confidential Information which are in Employee’s possession or control. Employee
further agrees that, upon the request of Company at any time during Employee’s period of employment with Company, Employee
shall promptly return to Company all such copies of writings, computer discs or equipment, drawings or any other information relating
to Confidential Information which are in Employee’s possession or control.

7.4Rights
to Inventions and Trade Secrets. Employee hereby assigns to Company all right, title and interest in and to any ideas,
inventions, original works or authorship, developments, improvements or trade secrets which Employee solely or jointly has conceived
or reduced to practice, or will conceive or reduce to practice, or cause to be conceived or reduced to practice during his employment
with Company. All original works of authorship which are made by Employee (solely or jointly with others) within the scope of
Employee’s services hereunder and which are protectable by copyright are “works made for hire,” as that term
is defined in the United States Copyright Act.

8.Noninterference
and Nonsolicitation Covenants. In further reflection of the Company’s important interests in its proprietary information
and its trade, customer, vendor and employee relationships, Employee agrees that, during the thirty-six (36) month period following
the termination of Employee’s employment with Company for any reason, including without limitation Employee’s voluntary
resignation with or without Good Reason or involuntary termination by the Company with or without Cause, Employee will not directly
or indirectly, for or on behalf of any person, firm, corporation or other entity, (a) interfere with any contractual or other
business relationships that Company has with any of its customers, clients, service providers or materials suppliers as of the
date of Employee’s termination of employment, or (b) solicit or induce any employee of Company to terminate his/her employment
relationship with Company.

9.Compensation.
During the term of this Agreement, the Company shall pay the following compensation to Employee:

9.1Base
Salary. The Company shall pay Employee an annual rate of base salary of ______________________ ($________________.00)
(“Base Salary”) in periodic installments in accordance with the Company’s customary payroll practices, but no
less frequently than monthly.

9.2Annual
Bonus. Any compensation bonuses to be paid to Employee will be mutually determined by the Company and OriginClear.

9.3Equity
Awards. During the term, Employee shall be eligible to participate in any Company incentive compensation plan, as determined
by the Board of Directions, in its discretion.

9.4Benefits.
So long as Employee is employed by the Company, the Employee shall participate in any employee benefit plans sponsored by
the Company generally for its employees serving in similar employment capacities as the Employee as determined from time to time
by the Board of Directors or any compensation committee of the Board of Directors, if any, and on terms at least as favorable
to Employee as are generally offered to other employees of the Company serving in a similar capacity.

10.             
Office and Staff. In order to enable Employee to perform his obligations and duties pursuant to this Agreement,
the Company agrees that it shall provide suitable office space for Employee in McKinney, Texas, or in another location mutually
agreed upon, together with all necessary and appropriate supporting staff and secretarial assistance, equipment, stationery, books
and supplies. Employee agrees that the office space and supporting staff presently in place is suitable for the purposes of this
Agreement.

    	25

    	 

    

 

11.             
Reimbursement of Expenses. The Company shall reimburse Employee for the reasonable travel and other expenses incurred
by Employee in connection with the performance of Employee’s duties and in accordance with the Company’s expense reimbursement
policy. Employee’s pre-approved reimbursable expenses shall be paid by the Company in cash or check within a reasonable
time after presentment by Employee of an itemized list of invoices sufficiently describing such expenses. All compensation provided
in Sections 8 of this Agreement shall be subject to customary withholding tax and other employment taxes, to the extent required
by law. Expense reimbursements will not be subject to withholding.

12.             
Rights In And To Inventions And Patents.

12.1Description
of Parties’ Rights. The Employee agrees that with respect to any inventions made by him or the Company during the
term of this Agreement, solely or jointly with others, (i) which are made with the Company’s equipment, supplies, facilities,
trade secrets or time, or (ii) which relate to the business of the Company or the Company’s actual or demonstrably anticipated
research or development, or (iii) which result from any work performed by the Employee for the Company, such inventions shall
belong to the Company. The Employee also agrees that the Company shall have the right to keep such inventions as trade secrets,
if the Company chooses.

12.2Disclosure
Requirements. For purposes of this Agreement, an invention is deemed to have been made during the term of this Agreement
if, during such period, the invention was conceived or first actually reduced to practice. In order to permit the Company to claim
rights to which it may be entitled, the Employee agrees to disclose to the Company in confidence the nature of all patent applications
filed by the Employee during the term of this Agreement.

13.             
Assignability of Benefits. Except to the extent that this provision may be contrary to law, no assignment, pledge,
collateralization or attachment of any of the benefits under this Agreement shall be valid or recognized by the Company. Except
as provided by law, payment provided for by this Agreement shall not be subject to seizure for payment of any debts or judgments
against the Employee, nor shall the Employee have any right to transfer, modify, anticipate or encumber any rights or benefits
hereunder.

14.             
Notice. All notices and other communications required or permitted hereunder shall be in writing or in the form
of email, facsimile or letter to be given only during the recipient’s normal business hours unless arrangements have otherwise
been made to receive such notice outside of normal business hours, and can be mailed by registered or certified mail, postage
prepaid, or otherwise delivered by hand, messenger, email or facsimile (as provided above) addressed (a) if to the Employee, at
the address for such Employee set forth on the signature page hereto or at such other address as such Employee shall have furnished
to the Company in writing or (b) if to the Company, to its principal executive offices and addressed to the attention of the Chairman
of the Board, or at such other address as the Company shall have furnished in writing to the Employee.

    	26

    	 

    

 

In
case of the Company:

 

Progressive
Water Treatment, Inc.

C/O
OriginClear, Inc.

5645
West Adams Blvd

Los
Angeles, CA 90016

Attention:
T. Riggs Eckelberry, CEO

Telephone:
(877) 999-6645

 

In
case of the Employee:

Marc
Stevens

Progressive
Water Treatment, Inc.

P.O.
Box 774,

McKinney,
TX 75070

Attn:
Marc Stevens, President

Telephone:
(972) 562-3002

 

15.             
Attorneys’ Fees. In the event that any of the parties must resort to legal action in order to enforce the
provisions of this Agreement or to defend such suit, the prevailing party shall be entitled to receive reimbursement from the
non-prevailing party for all reasonable attorneys’ fees and all other costs incurred in commencing or defending such suit.

16.             
Entire Agreement. This Agreement and the Share Exchange Agreement embody the entire understanding among the parties
and merge all prior discussions or communications among them, and no party shall be bound by any definitions, conditions, warranties,
or representations other than as expressly stated in this Agreement and the Merger Agreement or as subsequently set forth in a
writing signed by the duly authorized representatives of all of the parties to this Agreement.

17.             
No Oral Change; Amendment. This Agreement may only be changed or modified and any provision hereof may only be waived
in writing signed by the party against whom enforcement of any waiver, change or modification is sought. This Agreement may be
amended only in writing by mutual consent of the parties.

18.             
Severability. In the event that any provision of this Agreement shall be void or unenforceable for any reason whatsoever,
then such provision shall be stricken and of no force and effect. The remaining provisions of this Agreement shall, however, continue
in full force and effect, and to the extent required, shall be modified to preserve their validity.

19.             
Applicable Law. This Agreement shall be construed as a whole and in accordance with its fair meaning. This Agreement
shall be interpreted in accordance with the laws of the State of California.

20.             
Successors and Assigns. Each covenant and condition of this Agreement shall inure to the benefit of and be binding
upon the parties hereto, their respective heirs, personal representatives, assigns and successors in interest. Without limiting
the generality of the foregoing sentence, this Agreement shall be binding upon any successor to the Company whether by merger,
reorganization or otherwise.

 

    	27

    	 

    

 

IN
WITNESS WHEREOF, the parties hereto have executed this Agreement on the date first above written.

 

	COMPANY:	Progressive Water Treatment, Inc.
	 	a
Texas corporation
	 	 
	 	By: 	
	 	 	T.
Riggs Eckelberry

 

	 	 
	 EMPLOYEE:	By: 	
	 	 	Marc
Stevens

	 	 	 
	 	 	 
	 	 	Street
Address
	 	 	
	 	 	City,
State and Zip Code
	 	 	 
	 	 	Telephone
Number
	 	 	 
	 	 	Facsimile
Number:
	 	 	 
	 	 	 
	 	 	Email
Address:

 

    	28

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