Document:

Lucas Energy 8-K

 

Exhibit 4.1

 

 

NEITHER THIS SECURITY NOR THE SECURITIES
FOR WHICH THIS SECURITY IS EXERCISABLE HAVE BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION OR THE SECURITIES COMMISSION
OF ANY STATE IN RELIANCE UPON AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES
ACT”), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES
ACT OR PURSUANT TO AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES
ACT AND IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS AS EVIDENCED BY A LEGAL OPINION OF COUNSEL TO THE TRANSFEROR TO SUCH
EFFECT, THE SUBSTANCE OF WHICH WILL BE REASONABLY ACCEPTABLE TO THE COMPANY. THIS SECURITY AND THE SECURITIES ISSUABLE UPON EXERCISE
OF THIS SECURITY MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT OR OTHER LOAN SECURED BY SUCH SECURITIES.

 

LUCAS, ENERGY, INC.

 

COMMON STOCK PURCHASE
WARRANT

 

	Warrant Shares: 1,111,112	Issuance Date: September
    2, 2016
	 	Expiration Date: March 31, 2017

 

This Common Stock
Purchase Warrant (“Warrant”) certifies that, for value received, Discover Growth Fund
(“Investor”) is entitled and obligated, upon the terms and subject to the limitations on exercise and the
conditions hereinafter set forth, to subscribe for and purchase from Lucas Energy, Inc., a Nevada corporation
(“Company”), 1,111,112 shares (as subject to adjustment hereunder, “Warrant Shares”) of
Common Stock, at an exercise price equal to $4.50, subject to adjustment hereunder (“Conversion Price”)
per share of Common Stock, for total aggregate purchase price of $5,000,000.00 (“Purchase
Price”).

 

I.           Warrant.

 

A.           Issuance. This
Warrant is issued pursuant to that certain Stock Purchase Agreement (“Agreement”) dated April 6, 2016.
Capitalized terms not otherwise defined herein will have the meanings defined in the Agreement.

 

B.           Exercise. Exercise
of the purchase rights represented by this Warrant may be made, in whole or in part, at any time, from time to time, after the
Issuance Date and before the Expiration Date, by mutual agreement of Investor and Company before or after delivery to or from
Investor or Company (or such other office or agency of Company as it may designate by notice in writing to Investor) of a Conversion
Notice, and Investor paying Company the Purchase Price by wire transfer of immediately available funds before or within 3 Trading
Days after the Notice Time. No ink-original Delivery Notice will be required, nor will any medallion guarantee (or other type
of guarantee or notarization) of any Delivery Notice form be required. Investor will not be required to physically surrender this
Warrant to Company.

 

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C.           No Transfer of Warrant.
This Warrant is non-transferable and may not be sold, transferred or assigned by Investor.

 

D.           No Cashless Exercise.
No cashless exercise of this Warrant will be permitted.

 

E.           Liquidation.
Upon any liquidation, dissolution or winding up of the Company, whether voluntary or involuntary, after payment or provision for
payment of debts and other liabilities of the Company, prior to any distribution or payment made to the holders of Common Stock
or Preferred Stock by reason of their ownership thereof, Investor will be entitled to be paid out of the assets of the Company
available for distribution an amount with respect to any unexercised portion of this Warrant equal to the Purchase Price for such
unexercised portion of this Warrant, plus an amount equal to any accrued but unpaid Premium
thereon (collectively with the Purchase Price, the “Liquidation Value”). The Liquidation Value,
and upon any redemption of this Warrant pursuant to Section I.F, the Maturity Redemption Price, Early Redemption Price,
or Liquidation Value, as applicable, will be reduced by the amount of any unpaid Purchase Price, and any Premium or Conversion
Premium with respect thereto, whether or not required to be paid. By way of example, if Investor has paid none of the Purchase
Price, the Maturity Redemption Price, Early Redemption Price and Liquidation Value will be zero.

 

F.           Redemption.

 

1.          Company’s
Redemption Option.  On the Warrant Maturity Date, the Company may redeem the entire unexercised portion of this Warrant
by paying Investor in cash an amount per share equal to 100% of the Purchase Price for such unexercised portion of this Warrant
(the “Maturity Redemption Price”).

 

2.          Early
Redemption. Prior to the Warrant Maturity Date, provided that no Trigger Event has occurred, the Company will have the
right at any time upon 30 Trading Days’ prior written notice, in its sole and absolute discretion, to redeem all or any
portion of this Warrant then outstanding by paying Investor in cash an amount (the “Early Redemption Price”)
equal to the sum of the following: (a) 100% of the Purchase Price for such unexercised portion of this Warrant, plus (b) the Conversion
Premium thereon, minus (c) any Premium thereon that has been paid.

 

3.          Credit
Risk Adjustment.

 

a.          Premium.

 

i.          Commencing
on the date of the issuance of this Warrant (“Issuance Date”), this Warrant will accrue a premium (“Premium”),
at a rate equal to 6.0% per annum, subject to adjustment as provided in this Warrant (“Premium Rate”), of the
Purchase Price. The Premium will be payable with respect to any part of this Warrant upon any of the following: (a) upon redemption
of such part in accordance with Section I.F; and (b) upon conversion of such part in accordance with Section I.G.

 

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ii.          Premium,
as well as any applicable Conversion Premium payable hereunder, will be paid: (a) in the Company’s sole and absolute discretion,
immediately in cash; or (b) if Company notifies Investor it will not pay all or any portion in cash, or to the extent cash is
not paid and received as soon as practicable, and in any event within 1 Trading Day after the Notice Time, for any reason whatsoever,
in shares of Common Stock valued at (i) if there has never been a Trigger Event, (A) 95.0% of the average of the 5 lowest individual
daily volume weighted average prices of the Common Stock on the Trading Market during the applicable Measurement Period, which
may be non-consecutive, less $0.05 per share of Common Stock, not to exceed (B) 100% of the lowest sales price on the last day
of such Measurement Period less $0.05 per share of Common Stock (ii) following any Trigger Event, (A) 85.0% of the lowest daily
volume weighted average price during any Measurement Period for any conversion by Investor, less $0.10 per share of Common Stock,
not to exceed (B) 85.0% of the lowest sales price on the last day of any Measurement Period, less $0.10 per share of Common Stock.
In no event will the value of Common Stock pursuant to the foregoing be below the par value per share. All amounts that are required
or permitted to be paid in cash pursuant to this Warrant will be paid by wire transfer of immediately available funds to an account
designated by Investor.

 

iii.          The
Premium Rate will adjust downward by an amount equal to the Spread Adjustment for each amount, if any, equal to the Adjustment
Factor that the Measuring Metric rises above the Maximum Triggering Level, down to a minimum of 0.0%.

 

iv.          The
Premium Rate will adjust upward by an amount equal to the Spread Adjustment for each amount, if any, equal to the Adjustment Factor
that the Measuring Metric falls below the Minimum Triggering Level, up to a maximum of 24.95%. In addition, the Premium Rate will
adjust upward by 10.0% following the occurrence of any Trigger Event.

 

v.          The
adjusted Premium Rate used for calculation of the Liquidation Value, Conversion Premium, Early Redemption Price and Premium, as
applicable, and the amount of Premium owed will be calculated and determined based upon the Measuring Metric at close of the Trading
Market immediately prior to the Notice Time.

 

4.          Mandatory
Redemption.  If the Company determines to liquidate, dissolve or wind-up its business and affairs, the Company will prior
to or concurrently with the closing, effectuation or occurrence any such action, redeem the entire unexercised portion of this
Warrant for cash, by wire transfer of immediately available funds to an account designated by Investor, at the Early Redemption
Price set forth in Section I.F.2 if the event is prior to the Warrant Maturity Date, or at the Liquidation Value if the
event is on or after the Warrant Maturity Date.

 

5.          Mechanics
of Redemption. In order to redeem all or any portion of the Warrant then outstanding, the Company must deliver written
notice (each, a “Redemption Notice”) to Investor setting forth (a) the portion of this Warrant that the Company
is redeeming, (b) the applicable Premium Rate, Liquidation Value and Early Redemption Price, and (c) the calculation of the amount
paid. Upon receipt of full payment in cash for a complete redemption, Investor will promptly submit to the Company the original
Warrant. In connection with a mandatory redemption, the notice will be delivered as soon as the number of shares can be determined,
and in all other instances at least 30 Trading Days prior to payment. For the avoidance of doubt, the delivery of a Redemption
Notice will not affect Investor’s rights under Section I.G until after receipt of cash payment by Investor at the
required time.

 

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G.           Exercise.

 

1.           Mechanics
of Exercise.

 

a.          Promptly
upon the occurrence of any exercise provided for in Section I.B., Investor will deliver a written notice to the Company
and its transfer agent (“Conversion Notice” and with the Redemption Notice, each an “Initial Notice”)
of the exercise of this Warrant.

 

b.          Each
Delivery Notice will set forth the amount of Warrant being converted, the minimum number of Conversion Shares and the amount of
Premium and any applicable Conversion Premium due as of the time the Delivery Notice is given (the “Notice Time”),
and the calculation thereof.

 

b.          If
the Company notifies Investor by 10:00 a.m. Eastern time on the Trading Day after the Notice Time that it is paying all or any
portion of Premium or Conversion Premium, and actually pays in cash by the next Trading Day, time being of the essence, the full
amount of Premium and Conversion Premium stated in the Delivery Notice, no further amount will be due with respect thereto.

 

c.          As
soon as practicable, and in any event within 1 Trading Day of the Notice Time, time being of the essence, the Company will do
all of the following: (i) transmit the Delivery Notice by facsimile or electronic mail to the Investor, and to the Company’s
transfer agent (the “Transfer Agent”) with instructions to comply with the Delivery Notice; (ii) either (A)
if the Company is approved through The Depository Trust Company (“DTC”), authorize and instruct the credit
by the Transfer Agent the aggregate number of Conversion Shares set forth in the Delivery Notice, to Investor’s or its designee’s
balance account with the DTC Fast Automated Securities Transfer (FAST) Program, through its Deposit/Withdrawal at Custodian (DWAC)
system, or (B) only if the Company is not approved through DTC, issue and surrender to a common carrier for overnight delivery
to the address as specified in the Delivery Notice a certificate registered in the name of Investor or its designee, for the number
of Conversion Shares set forth in the Delivery Notice, bearing no restrictive legend unless a registration statement covering
the Conversion Shares is not effective and neither Company nor Investor provides an opinion of counsel to the effect that Conversion
Shares may be issued without restrictive legend; and (iii) if it contends that the Delivery Notice is in any way incorrect, a
through explanation of why and its own calculation, or the Delivery Notice will conclusively be deemed correct for all purposes.
The Company will at all times diligently take or cause to be taken all actions reasonably necessary to cause the Conversion Shares
to be issued as soon as practicable.

 

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d.          If
during the Measurement Period the Investor is entitled to receive additional Conversion Shares with regard to an Initial Notice,
Investor may at any time deliver one or more additional written notices to the Company or its transfer agent (each, an “Additional
Notice” and with the Initial Notice, each a “Delivery Notice”) setting forth the additional number
of Conversion Shares to be delivered, and the calculation thereof.

 

e.          If
the Company for any reason does not issue or cause to be issued to the Investor within 3 Trading Days after the date of a Delivery
Notice, the number of Conversion Shares stated in the Delivery Notice, then, in addition to all other remedies available to the
Investor, as liquidated damages and not as a penalty, the Company will pay in cash to the Investor on each day after such 3rd
Trading Day that the issuance of such Conversion Shares is not timely effected an amount equal to 2% of the product of (i) the
aggregate number of Conversion Shares not issued to the Investor on a timely basis and to which the Investor is entitled and (ii)
the highest Closing Price of the Common Stock between the date on which the Company should have issued such shares to the Investor
and the actual date of receipt of Conversion Shares by Investor. It is intended that the foregoing will serve to reasonably compensate
Investor for any delay in delivery of Conversion Shares, and not as punishment for any breach by the Company. The Company acknowledges
that the actual damages likely to result from delay in delivery are difficult to estimate and would be difficult for Investor
to prove.

 

f.          Notwithstanding
any other provision: all of the requirements of Section I.F and this Section I.G are each independent covenants;
the Company’s obligations to issue and deliver Conversion Shares upon any Delivery Notice are absolute, unconditional and
irrevocable; any breach or alleged breach of any representation or agreement, or any violation or alleged violation of any law
or regulation, by any party or any other person will not excuse full and timely performance of any of the Company’s obligations
under these sections; and under no circumstances may the Company seek or obtain any temporary, interim or preliminary injunctive
or equitable relief to prevent or interfere with any issuance of Conversion Shares to Investor.

 

g.          If
for any reason whatsoever Investor does not timely receive the number of Conversion Shares stated in any Delivery Notice, Investor
will be entitled to a compulsory remedy of immediate specific performance, temporary, interim and, preliminary and final injunctive
relief requiring Company and its transfer agent, attorneys, officers and directors to immediately issue and deliver the number
of Conversion Shares stated by Investor, which requirement will not be stayed for any reason, without the necessity of posting
any bond, and which Company may not seek to stay or appeal.

 

h.          No
fractional shares of Common Stock are to be issued upon conversion of this Warrant, but rather the Company will issue to Investor
scrip or warrants registered on the books of the Company (certificated or uncertificated) which will entitle Investor to receive
a full share upon the surrender of such scrip or warrants aggregating a full share. The Investor will not be required to
deliver the original Warrant in order to effect a conversion hereunder. The Company will pay any and all taxes which may be payable
with respect to the issuance and delivery of any Conversion Shares.

 

2.           Exercise.
Upon receipt of the Conversion Notice, the Company will (a) satisfy the payment of Premium and Conversion Premium as provided
in Section I.F.3.a.ii, and (b) issue to Investor a number of Conversion Shares equal to (i) the Purchase Price of the portion
converted divided by (ii) the applicable Conversion Price with respect to such portion of the Warrant; all in accordance with
the procedures set forth in Section I.G.1.

 

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3.          Stock
Splits. If the Company at any time on or after the filing of this Warrant subdivides (by any stock split, stock dividend,
recapitalization or otherwise) one or more classes of its outstanding shares of Common Stock into a greater number of shares,
the applicable Conversion Price, Adjustment Factor, Maximum Triggering Level, Minimum Triggering Level, and other share based
metrics in effect immediately prior to such subdivision will be proportionately reduced and the number of shares of Common Stock
issuable will be proportionately increased. If the Company at any time on or after such Issuance Date combines (by combination,
reverse stock split or otherwise) one or more classes of its outstanding shares of Common Stock into a smaller number of shares,
the applicable Conversion Price, Adjustment Factor, Maximum Triggering Level, Minimum Triggering Level, and other share based
metrics in effect immediately prior to such combination will be proportionately increased and the number of Conversion Shares
will be proportionately decreased. Any adjustment under this Section will become effective at the close of business on the date
the subdivision or combination becomes effective.

 

4.           Notices. The
holders of shares of Warrant are entitled to the same rights as the holders of Common Stock with respect to rights to receive
notices, reports and audited accounts from the Company and with respect to attending stockholder meetings.

 

5.           Definitions.
 The following terms will have the following meanings:

 

a.          “Adjustment
Factor” means $0.10 per share of Common Stock.

 

b.          “Acquisition”
means the closing of the acquisition of assets contemplated by that certain Asset Purchase Agreement dated December 30, 2015
between Company and the sellers named therein, as disclosed in the current report on Form 8-K filed with the Securities &
Exchange Commission on December 31, 2015.

 

c.          “Closing
Price” means, for any security as of any date, the last closing bid price for such security on the Trading Market, or,
if the Trading Market begins to operate on an extended hours basis and does not designate the closing bid price, then the last
bid price of such security prior to 4:00 p.m., Eastern time, or, if the Trading Market is not the principal securities exchange
or trading market for such security, the last closing bid price of such security on the principal securities exchange or trading
market where such security is listed or traded, or if the foregoing do not apply, the last closing bid price of such security
in the over-the-counter market on the electronic bulletin board for such security, or, if no closing bid price is reported for
such security, the average of the bid prices of any market makers for such security as reported in the “pink sheets”
by Pink Sheets LLC (formerly the National Quotation Bureau, Inc.).

 

d.          “Conversion
Premium” for each portion of Warrant means the Purchase Price, multiplied by the product of (i) the applicable Premium
Rate, and (ii) the number of whole years between the Issuance Date and the Warrant Maturity Date.

 

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e.          “Conversion
Price” means a price per share of Common Stock equal to $4.50 per share of Common Stock, subject to adjustment as otherwise
provided herein.

 

f.          “Conversion
Shares” means all shares of Common Stock that are required to be or may be issued upon conversion of Warrant.

 

g.          “Equity
Conditions” means on each day during the Measurement Period, (i) the Common Stock is not under chill or freeze from
DTC, the Common Stock is designated for trading on OTCQB or higher market and will not have been suspended from trading on such
market, and delisting or suspension by the Trading Market has not been threatened or pending, either in writing by such market
or because Company has fallen below the then effective minimum listing maintenance requirements of such market; (ii) the Company
has delivered Conversion Shares upon all conversions or redemptions of the Warrant in accordance with their terms to the Investor
on a timely basis; (iii) the Company will have no knowledge of any fact that would cause both of the following (A) a registration
statement not to be effective and available for the resale of all Conversion Shares, and (B) Section 3(a)(9) under the Securities
Act of 1933, as amended, not to be available for the issuance of all Conversion Shares, or Regulation S or Securities Act Rule
144 not to be available for the resale of all the Conversion Shares underlying the Warrant without restriction; (iv) all shares
of Common Stock to which Investor is entitled have been timely received into Investor’s designated account in electronic
form fully cleared for trading; (v) the Company otherwise will have been in compliance with and will not have breached any provision,
covenant, representation or warranty of any Transaction Document; (vi) the Measuring Metric is at least $1.00.

 

h.          “Warrant
Maturity Date” means the date that is 7 years after the Issuance Date.

 

i.          
“Measurement Period” means the period beginning, if no Trigger Event has occurred 30 Trading Days, and
if a Trigger Event has occurred 60 Trading Days, before the Notice Date, and ending, if no Trigger Event has occurred 30 Trading
Days, and if a Trigger Event has occurred 60 Trading Days, after the number of Conversion Shares stated in the initial Notice
have actually been received into Investor’s designated brokerage account in electronic form and fully cleared for trading;
provided that for each day during the Measurement Period on which less than all of the conditions set forth in Section I.G.6.h
exist, 1 Trading Day will be added to what otherwise would have been the end of the Measurement Period.

 

j.          
“Measuring Metric” means the volume weighted average price of the Common Stock on any Trading Day following
the Issuance Date of the Warrant.

 

k.          “Maximum
Triggering Level” means $5.00 per share of Common Stock.

 

l.          “Minimum
Triggering Level” means $4.00 per share of Common Stock.

 

m.         “Spread
Adjustment” means 100 basis points.

 

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n.         
“Stock Purchase Agreement” means the Stock Purchase Agreement or other agreement pursuant to
which the Warrant is issued, including all exhibits thereto and all related Transaction Documents as defined therein.

 

o.          “Trading
Day” means any day on which the Common Stock is traded on the Trading Market.

 

p.          “Trading
Market” means the NYSE MKT or whatever is at the applicable time, the principal U.S. trading exchange or market for
the Common Stock. All Trading Market data will be measured as provided by the appropriate function of the Bloomberg Professional
service of Bloomberg Financial Markets or its successor performing similar functions.

 

7.           Issuance
Limitations.

 

a.          Beneficial
Ownership.  Notwithstanding any other provision, at no time may the Company issue shares of Common Stock to Investor which,
when aggregated with all other shares of Common Stock then deemed beneficially owned by Investor, would result in Investor owning
more than 4.99% of all Common Stock outstanding immediately after giving effect to such issuance, as determined in accordance
with Section 13(d) of the Exchange Act and the rules and regulations promulgated thereunder; provided, however, that Investor
may increase such amount to 9.99% upon not less than 61 days’ prior notice to the Company. To the extent that any exercise
would otherwise result in exceeding the beneficial ownership limitation set forth in the preceding sentence, the Delivery Notice
will specify the number of shares that may be delivered without exceeding the limitation, and any issuance beyond such extent
will be held in abeyance until such time as it would not result in Investor exceeding the beneficial ownership limitation. No
provision of this paragraph may be waived by Investor or the Company.

 

b.          Principal
Market Regulation. Company will not issue any Conversion Shares under this Warrant, the Series C Preferred Stock issued
to Holder on the Issuance Date, the Stock Purchase Agreement with Investor dated April 6, 2016, the Debenture or the
Common Stock Purchase Warrant issued to Investor pursuant thereto, if the issuance would exceed the aggregate number of shares
of Common Stock the Company may issue without breaching Company’s obligations under NYSE MKT rules, except that such limitation
will not apply following stockholder approval in accordance with the requirements of NYSE MKT rules or a waiver from NYSE MKT
(“Approval”).

 

H.           Trigger
Event.

 

1.           Any
occurrence of any one or more of the following will constitute a “Trigger Event”:

 

(a)         Investor
does not timely receive the number of Conversion Shares stated in any Conversion Notice pursuant to this Warrant or any other
agreement with Investor for any reason whatsoever, time being of the essence, including without limitation the issuance of restricted
shares if counsel for Company or Investor provides a legal opinion that shares may be issued without restrictive legend;

 

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(b)         Any
violation of or failure to timely perform any covenant or provision of this Warrant, the Stock Purchase Agreement, any Transaction
Document or any other agreement with Investor, related to payment of cash, registration or delivery of Conversion Shares, time
being of the essence;

 

(c)         Any
violation of or failure to perform any covenant or provision of this Warrant, the Stock Purchase Agreement, any Transaction
Document or any other agreement with Investor, which in the case of a default that is curable, is not related to payment of cash,
registration or delivery of Conversion Shares, and has not occurred before, is not cured within 5 Trading Days of written notice
thereof;

 

(d)         Any
representation or warranty made in the Stock Purchase Agreement, any Transaction Document or any other agreement with Investor
will be untrue, incorrect, or misleading in any material respect as of the date when made or deemed made;

 

(e)         The
occurrence of any default or event of default under any material agreement, lease, document or instrument to which the Company
or any subsidiary other than CATI Operating LLC, a Texas limited liability company (“CATI”) is obligated, including
without limitation of an aggregate of at least $500,000 of indebtedness;

 

(f)          While
any Registration Statement is required to be maintained effective, the effectiveness of the Registration Statement lapses for
any reason, including, without limitation, the issuance of a stop order, or the Registration Statement, or the prospectus contained
therein, is unavailable to Investor sale of all Conversion Shares for any 5 or more Trading Days, which may be non-consecutive;

 

(g)         The
suspension from trading or the failure of the Common Stock to be trading or listed on the Trading Market;

 

(h)         The Company notifies Investor, including without limitation, by way of public announcement or through any of its attorneys, agents
or representatives, of its intention not to comply, as required, with a Conversion Notice under this Warrant or any other agreement
with Investor at any time, including without limitation any objection or instruction to its transfer agent not to comply with
any notice from Investor;

 

(i)          Bankruptcy,
insolvency, reorganization or liquidation proceedings or other proceedings for the relief of debtors will be instituted by or
against the Company or any subsidiary other than CATI and, if instituted against the Company or any subsidiary other than CATI
by a third party, an order for relief is entered or the proceedings are not dismissed within 30 days of their initiation;

 

(j)          The
appointment of or taking possession by a custodian, receiver, liquidator, assignee, trustee, or other similar official of the
Company or any subsidiary other than CATI or of any substantial part of its property, or the making by it of an assignment for
the benefit of creditors, or the execution of a composition of debts, or the occurrence of any other similar federal, state or
foreign proceeding, or the admission by it in writing of its inability to pay its debts generally as they become due, the taking
of corporate action by the Company or any subsidiary other than CATI in furtherance of any such action or the taking of any action
by any person to commence a foreclosure sale or any other similar action under any applicable law;

 

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(k)         A
final judgment or judgments for the payment of money aggregating in excess of $500,000 are rendered against the Company or any
of its subsidiaries other than CATI and are not stayed or satisfied within 30 days of entry;

 

(l)          The
Company does not for any reason timely comply with the reporting requirements of the Securities Exchange Act of 1934, as amended,
and the regulations promulgated thereunder, including without limitation timely filing when first due all periodic reports;

 

(m)        Any
regulatory, administrative or enforcement proceeding is initiated against Company or any subsidiary (except to the extent an adverse
determination would not have a material adverse effect on the Company’s business, properties, assets, financial condition
or results of operations or prevent the performance by the Company of any material obligation under the Transaction Documents);
or

 

(n)         Any
material provision of this Warrant will at any time for any reason, other than pursuant to the express terms thereof, cease to
be valid and binding on or enforceable against the parties thereto, or the validity or enforceability thereof will be contested
by any party thereto, or a proceeding will be commenced by the Company or any subsidiary or any governmental authority having
jurisdiction over any of them, seeking to establish the invalidity or unenforceability thereof, or the Company or any subsidiary
denies that it has any liability or obligation purported to be created under this Warrant.

 

2.           It
is intended that all adjustments made following a Trigger Event will serve to reasonably compensate Investor for the consequences
and increased risk following a Trigger Event, and not as a penalty or punishment for any breach by the Company. The Company acknowledges
that the actual damages likely to result from a Trigger Event are difficult to estimate and would be difficult for Investor to
prove.

 

II.          Miscellaneous.

 

A.          Notices.
Any and all notices to the Company will be addressed to the Company’s Chief Executive Officer at the Company’s
principal place of business on file with the Secretary of State of the State of Nevada. Any and all notices or other communications
or deliveries to be provided by the Company to any Investor hereunder will be in writing and delivered personally, by electronic
mail or facsimile, sent by a nationally recognized overnight courier service addressed to each Investor at the electronic mail,
facsimile telephone number or address of such Investor appearing on the books of the Company, or if no such electronic mail, facsimile
telephone number or address appears, at the principal place of business of the Investor. Any notice or other communication or
deliveries hereunder will be deemed given and effective on the earliest of (1) the date of transmission, if such notice or communication
is delivered via facsimile or electronic mail prior to 5:30 p.m. Eastern time, (2) the date after the date of transmission, if
such notice or communication is delivered via facsimile or electronic mail later than 5:30 p.m. but prior to 11:59 p.m. Eastern
time on such date, (3) the second business day following the date of mailing, if sent by nationally recognized overnight courier
service, or (4) upon actual receipt by the party to whom such notice is required to be given, regardless of how sent.

 

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B.          Lost
or Mutilated Warrant. Upon receipt of evidence reasonably satisfactory to the Company (an affidavit of Investor will be
satisfactory) of the ownership and the loss, theft, destruction or mutilation of this Warrant, and in the case of any such loss,
theft or destruction upon receipt of indemnity reasonably satisfactory to Company (provided that if Investor is a financial institution
or institutional investor its own agreement will be satisfactory) or
in the case of any such mutilation upon surrender of such certificate, Company will, at its expense, execute and deliver in lieu
of such certificate a new certificate of like kind representing the number of shares of such class represented by such lost, stolen,
destroyed or mutilated certificate and dated the date of such lost, stolen, destroyed or mutilated certificate.

 

C.          Headings.
The headings contained herein are for convenience only, do not constitute a part of this Warrant and will not be deemed to
limit or affect any of the provisions hereof.

 

D.          Choice
of Law. This Warrant will be governed by the laws of the State of Nevada.

 

E.          No
Rights as Stockholder Until Exercise. This Warrant does not entitle Investor to any voting rights, dividends or other
rights as a stockholder of the Company prior to the exercise hereof.

 

IN
WITNESS WHEREOF, the undersigned have executed this Warrant as of the date first set forth above.

	 	 	 	 
	Signed:	/s/ Anthony
    C. Schnur 	 
	Name:	Anthony C. Schnur	 
	Title: 	Chief Executive Officer	 
	 	 	 	 
	Signed:	/s/ Anthony
    C. Schnur 	 
	Name:	Anthony C. Schnur	 
	Title: 	Treasurer 	 

 

    	11Distributor
Agreement 

INNOVATIVE
LABORATORY SOLUTIONS, LLC

 

This Distributor
Agreement (the "Agreement") is made and effective this day of February 18, 2016, by and between Innovative
Laboratory Solutions, LLC, whose main office is located at 1900 Purdy Avenue, #5, Miami Beach, FL 33139, ("ILS"),
and iHealthcare, Inc., whose principle office is located at: 141 NE 3rd Avenue, 9th Floor, Miami, FL, 33132
(“Distributor”). Both ILS and Distributor may be collectively referred as the “Parties".

WHEREAS,

		·	ILS provides Drugs
of Abuse cups and other items for use in substance abuse treatment.

 

		·	The Distributor is
in the healthcare business and wishes to sell and market certain products sold by ILS.

 

		·	The Distributor
wishes to obtain from ILS the right to market, sell and distribute these products pursuant to the terms and conditions
set forth in this Agreement.

 

·    
NOW, THEREFORE, in consideration of the mutual
covenants, promises and agreements herein contained, the parties agree as follows:

 

		1.	DEFINITIONS

As used in this Agreement, the following terms
shall have the following meanings:

 

1.1  
“Product” or “Products” shall
mean, collectively, certain products offered for sale by ILS, including but not limited to, specimen cups and other products or
medical devices. 

 

1.2  
“Documentation” shall mean, collectively,
instructions, and other written materials made available by ILS in printed or electronic format to assist in the use of the Products.

 

1.3  
“Customers” are purchasers of any Products
from Distributor who have paid for an order. 

 

1.4  
"Trademarks" includes ILS trademarks, service
marks, trade names, and service names.

 

		2.	APPOINTMENT

ILS hereby appoints Distributor,
and Distributor hereby accepts such appointment (the “Appointment”), as an independent, and preferred reseller
of the Products for ILS as set forth below:

 

Distribution Rights.
ILS hereby appoints and assigns to Distributor the authority to sell and distribute all Products as defined below.

 

3.PRICING, ORDERS, PAYMENTS & DELIVERY

 

		3.1	Pricing. 

Distributor shall have
the right to purchase           
 drug of abuse toxicology cups from ILS at           .
Pricing for ILS Products purchased by Distributor at a quantity greater than            will
be established by the parties in writing.

 

		3.2	Purchase Order. 

All order for products shall
be made pursuant to a written Purchase Order submitted by Distributor to ILS (“Purchase Order”), in the form designated
by ILS, and as amended from time to time at the sole discretion of ILS. The Purchase Order form which is currently acceptable to
ILS, is attached as Exhibit “B”. All Purchase Orders shall be made expressly subject to the terms and conditions of
this Agreement.

 

In no event shall any Purchase
Order contain terms or conditions that are contrary to this Agreement, add contain new terms and conditions to this Agreement,
or change the terms and conditions of this Agreement. If a Purchase Order violates the provisions in this section in any way, then:
(1) the portions of the Purchase Order that contain the violations are automatically null and void, and have no force and effect;
and (2) ILS has the right to refuse to process such Purchase Order, or to accept the Purchase Order and ignore the portions that
violate this section.

 

		3.3	Payment. 

Unless otherwise agreed to by
Distributor in writing, Distributor shall pay ILS for all Products as set forth below:

		a.	Payment in full. Distributor shall pay for the entire Order at the time of placement;
OR

		b.	Two Payments. Only in the event Delivery is effected at a freight shipper (as noted below),
then Distributor has the option to split payment of the Order into two payments as set forth below:

		1.	Fifty percent (50%) of the each Order total is due immediately upon placement of Order.

		2.	The remaining fifty percent (50%) of the each Order total is due before the Product is released
to Distributor or Distributor’s client.

 

All payments from Distributor to
ILS hereunder shall be in United States Dollars, and can be made via cash, money order, electronic wire transfer, or credit card.
Credit card processing fees are paid by the Distributor.

 

		3.4	Delivery. 

Each Order is deemed delivered
(“Delivered”) to Distributor as noted below:

		a.	Freight Shipper. ILS designates delivery at a freight shipper
as the preferred method of delivery. The Product in an Order is deemed Delivered to Distributor once all of the following have
occurred: (1) ILS gives the freight shipper authorization to release the Product in the Order to Distributor; and (2) the freight
shipper releases the Product in the Order to Distributor; or

		b.	Designated Location. The Product in an Order shall be deemed
Delivered once the Product arrives at the location designated by Distributor in the Purchase Order.

Delivery locations must be within the Contiguous United
States, Alaska or Hawaii. ILS shall bear the risk of delivery up until the delivery location. For delivery locations outside the
United States, the parties shall discuss and reach mutually beneficial terms on a case by case basis.

 

		3.5	Order Cancellation by ILS. 

ILS may cancel any Order placed by
Distributor and accepted by ILS, if Distributor fails to make any payment for the Product as provided in this Agreement.

 

4.OBLIGATIONS AND REPRESENTATIONS
OF DISTRIBUTOR

		4.1	Products - No Tampering or Re-licensing. 

Distributor will distribute the Medical
Products with all warranties, disclaimers and license agreements intact and not obscured, as provided from ILS. Distributor will
advise its Customers as to the nature and terms applicable to the Products.

 

		4.2	Technical Capability.

Distributor will have the technical
capability to enable it to demonstrate and explain in detail to its Customers the features and capabilities of the Products. From
time to time, ILS may impose reasonable training or certification requirements on Distributor in connection with the resale of
certain Products. If a certification is required by ILS in the future, after a reasonable period of time is given to Distributor
to obtain the certification, Distributor will be required to satisfy the requirement before future orders for such Products will
be accepted by ILS. Certification requirements will be supplied to Distributor in writing by ILS from time to time during the term
of this Agreement.

 

 

 

4.3 Distributor’s Obligations
and Covenants 

Distributor warrants and
agrees:

		a.	to focus efforts on providing management, supervision, training,
invoicing services, collection services, quality assurance, and monitor utilization in regard to the Products;

		b.	to conduct business in a manner that reflects favorably upon the
Products and their high quality image and reputation, and upon the reputation of ILS;

		c.	hire, train and employ at its place or places of business competent,
professional and ethical sales, technical and support personnel to sell and support products as required by the demands of the
market. 

		d.	stay current with respect to information concerning the Products
and, where appropriate, attend ILS training with respect to the Products;

		e.	maintain adequate levels of personnel and other facilities to assure
prompt handling of all inquiries, orders, shipments and limited post-sales support for the Products;

		f.	maintain, for demonstration purposes, adequate equipment and other
resources to properly demonstrate the Products;

		g.	to avoid illegal or misleading practices in regard to this Agreement
that are or might be detrimental to the Products, ILS or the public;

		h.	comply with all Federal and State healthcare laws, rules and regulations,
including but not limited to Stark, Anti-Kickback, False Claims Act, etc.;

		i.	avoid helping, aiding or assisting a Customer in any way to violate
any Federal and State healthcare laws, rules and regulations, including but not limited to Stark, Anti-Kickback, False Claims Act,
etc.; 

		j.	not to create and afterward publish or employ or cooperate in the
publication or employment of any misleading or deceptive advertising material. This provision does not apply to publications created
or provided by ILS; and

		k.	not to make representations, warranties or guarantees to its Customers
with respect to Product or the capabilities of the Products that are false, misleading or inconsistent with the literature distributed
by ILS, including all warranties and disclaimers contained in such literature. This provision does not apply to representations
created or provided to Distributor directly by ILS; 

		l.	to comply with any minimum sales volumes or quotas, if any, which
have been agreed to by the Parties and reduced to writing. Minimum sales volumes or quotas may be adjusted or amended by agreement
of the Parties at any time during the course of this Agreement. 

		m.	to comply with any minimum marketing efforts, which include a quarterly
promotion of ILS Products in any one or more of the following manners, including, but not limited to: Mailers, telemarketing, advertising,
press releases, other print ads, trade shows, speeches, presentations, etc. These promotional efforts will be in addition to any
promotional efforts undertaken in conjunction with ILS. The standard requirements are subject to change by mutual agreement of
the Parties and shall take effect 30 calendar days after such agreement is reached; and

		n.	to follow all of the following in regard to Marketing and Promotion
Efforts for the Products:

		1.	Promotion and Marketing: Distributor, at its expense and discretion,
will use its best efforts to promote the marketing and licensing of the Products to its Customers by utilizing commercially available
and acceptable means of marketing including, but not limited to, advertising, telemarketing, other direct mail campaigns, trade
shows, conventions, seminars, personal solicitation, demonstrations, and distribution of promotional materials, all in accordance
with this Agreement. 

 

Unless agreed to in advance by ILS,
Distributor will pay any and all costs and expenses related to attending trade shows, conventions and seminars, which it has chosen
to attend or take part in. ILS will at its own discretion and expense, determine whether to send representatives to assist the
Distributor in these marketing efforts.

 

		2.	Promotional Literature: Any promotional literature used by
Distributor in regard to the Products must meet all of Distributor’s responsibilities under this Agreement. Distributor cannot
develop or use any other product literature other than that provided by ILS without the written consent of ILS. 

 

		4.4	Distributor’s Financial Condition.

Distributor represents that, as of
the effective date of this Agreement, it is in sound financial condition.

 

		4.5	Product Packaging. 

The Distributor
may, with prior written approval of ILS, make changes to the product label (i.e., private label) for a client at an additional
cost to Distributor. Unless there is a legitimate business reason otherwise, ILS will typically approve the custom packaging of
any product provided that the following requirements are met:

		a.	The requested change is in the interest of ILS;

		b.	The requested change does not cause harm to any of ILS’ business trademarks, patents or
other intellectual property;

		c.	The requested change does not violation any trademark, patent or other intellectual property
right of another entity; and

		d.	The requested change complies with all applicable FDA laws and rules. 

 

 

		5.	ILS’S OBLIGATIONS

		5.1	ILS Obligations and Covenants. 

ILS warrants and agrees:

		a.	to cooperate and promptly provide true and accurate specifications,
details or other information to Distributor for use by Distributor as part of its marketing, promotional or compliance activities
of ILS Products;

		b.	to process and deliver all Orders for the Products received from
Distributor in a timely manner; 

		c.	to take diligent care to pack the products in the most secure fashion
possible to insure best protection of the products. 

		d.	that all Orders of the Products sold or shipped under this Agreement
shall be of first quality, without any defects and in full conformity with all applicable laws, regulations and requirements in
effect within the Territory; and

		e.	to assist Distributor with its efforts to set up any training or
certification requirements set forth by ILS.

		f.	ILS shall utilize it best efforts to have manufacturer replace any
damaged products which occurred prior to receipt of Products by Distributor, however occurred. 

 

6. Force Majure.

The Parties shall not be responsible for any
failure to perform due to unforeseen circumstances or to causes beyond the Parties control, including but not limited to acts of
God, war, riot embargoes, and acts of civil or military authorities, fire, floods, accidents, strikes, or shortages of transportation,
facilities, fuel, energy, labor or materials. In the event of any such delay, ILS may defer the delivery date of orders for the
Products for a period equal to the time of such delay. ILS shall not be liable for any damages, direct, consequential, special,
or otherwise, to Distributor or to any other person for failure to deliver or for any delay or error in delivery of the products
for any reason whatsoever.

 

7. DISCLAIMER.

Except as explicitly set forth in writing in
this Agreement, ILS makes no additional performance representations, warranties, or guarantees, either express or implied, oral
or written, with respect to ILS Products or any services covered by or furnished pursuant to this Agreement.

 

		8.	INTELLECTUAL PROPERTY.

		8.1	Limited Rights.

By performance of this agreement,
Distributor shall not acquire any right to any of ILS Trademarks, or its copyrights, patents, trade secrets, commercial symbols,
goodwill, or other form of its intellectual or commercial property. Distributor shall use ILS’s trademarks only as set forth
in this Agreement. ILS may from time to time discontinue or modify its Trademarks, add new Trademarks, and revise these instructions,
or those set forth elsewhere in this Agreement, to protect the standards of quality established for ILS goods and services marketed
and/or licensed under its Trademarks. It is expressly understood by ILS that Distributor develops software, including but not limited
to Medical Devices and Operating Systems, which may be considered competitive to ILS.

 

		8.2	Protection of Trademarks.

ILS shall have sole and exclusive
right to protect and defend the Trademarks, at its sole cost and expense. ILS shall not be liable to Distributor for any loss or
damage suffered by Distributor as a result of the use of the Trademarks, any litigation or proceeding involving the Trademarks
or any failure by ILS to protect or defend the Trademarks.

 

		9.	CONFIDENTIAL INFORMATION

		9.1	Confidential Information.

As used herein, "Confidential
Information" shall mean all information concerning either party (the "Disclosing Party") to which the other party
(the "Receiving Party") is provided access by virtue of this Agreement or its activities hereunder, including without
limitation source code, technical data, sales information, quantity and kind of ILS Products or Distributor Products marketed or
sold, prices and methods of pricing, marketing techniques and plans, returns, unannounced products, product and process information,
and such other information which, if disclosed to others, might be competitively detrimental to the Disclosing Party. Confidential
Information shall not include any information which has been publicly disseminated in writing by the Disclosing Party, which the
Receiving Party can show it knew prior to the Disclosing Party's disclosure hereunder, or which is rightfully received by the Receiving
Party from a third party without restriction.

During the term of this Agreement
and for five (5) years thereafter, the Receiving Party shall maintain the Confidential Information of the Disclosing Party in strictest
confidence, shall not disclose it to any third party, and shall use it only as necessary to perform hereunder. The Receiving Party
shall cause each of its officers, directors, employees, and agents to restrict disclosure and use of such Confidential Information
in like fashion, and shall be responsible for any wrongful disclosure or use by any of them.

In the event any court or other
authority orders the Receiving Party to disclose any Confidential Information of the Disclosing Party, the Receiving Party shall
use its best efforts to protect its confidentiality and shall forthwith notify the Disclosing Party thereof to enable it to do
likewise. At the termination of this Agreement, the Receiving Party shall promptly return all tangible Confidential Information
to the Disclosing Party.

 

		9.2	Nondisclosure and Nonuse of Confidential Information.

Distributor acknowledges that: (i)
the Confidential Information is a valuable, special, and unique asset of ILS, the unauthorized disclosure or use of which could
cause substantial injury and loss of profits and goodwill to ILS; (ii) Distributor is in a position of trust and subject to a duty
of loyalty to ILS, and (iii) by reason of this Agreement, Distributor will have access to the Confidential Information. Distributor,
therefore, acknowledges that it is in ILS’s legitimate business interest to restrict Distributor’s disclosure or use
of Confidential Information for any purpose other than in connection with Distributor’s performance of Distributor’s
duties for ILS, and to limit any potential misappropriation of such Confidential Information by Distributor.

 

Distributor will not disclose or
use at any time, either during the term of this Agreement or thereafter, any Confidential Information (as hereinafter defined)
of which Distributor is or becomes aware, whether or not such information is developed by him or her, except to the extent that
such disclosure or use is directly related to and required by Distributor’s performance in good faith of duties assigned
to Distributor by ILS; provided, however, that this sentence shall not be deemed to prohibit Distributor from complying with any
subpoena, order, judgment, or decree of a court or governmental or regulatory agency of competent jurisdiction (an “Order”).
In the event there is an Order: (i) Distributor agrees to provide ILS with prompt written notice of any such Order and to assist
ILS, at ILS’s expense, in asserting any legal challenges to or appeals of such Order that ILS in its sole discretion pursues,
and (ii) in complying with any such Order, Distributor shall limit his or her disclosure only to the Confidential Information that
is expressly required to be disclosed by such Order. Distributor will take all appropriate steps to safeguard Confidential Information
and to protect it against disclosure, misuse, espionage, loss, and theft. Distributor shall deliver to ILS at the Termination Date,
or at any time ILS may request, all memoranda, notes, plans, records, reports, electronic information, files and software, and
other documents and data (and copies thereof) relating to the Confidential Information or the Work Product (as hereinafter defined)
of the business of ILS which Distributor may then possess or have under his or her control.

 

9.
3 NONCIRCUMVENTION
AND NONSOLICIATION 

 

Both parties acknowledge they will be selling
directly to retail customers of urine specimen cups in the United States. In addition, iHealthcare intends to develop other Channel
Partners in Europe, Russia, Caribbean and Latin America. The parties expressly agree to offer, honor and respect such sales as
exclusive market rights to customers or channel partners developed and sold to in the territory by each respective party. Neither
party shall attempt to solicit or interfere with or divert business from the other party’s customers or channel partners
at any time. In the event of sales or channel conflicts which may inadvertently develop, the parties agree to work together in
good faith to establish a mutually beneficial solution. A customer is defined by a paid sales order.

 

Further, Distributor will notify ILS in writing
of approved Channel Partners as agreements are signed. Once so registered with ILS, ILS agrees to not circumvent such agreements,
nor solicit such Channel Partners or their customers and automatically extends exclusive market rights to iHealthcare for such
Channel Partner arrangements. In the event that ILS is contacted directly by a current Channel Partner or customer of a Channel
Partner or customer of iHealthcare, ILS will use its best efforts to notify iHealthcare of the contact and refer the Channel Partner
or customer back to iHealthcare to process orders. ILS shall not offer pricing nor accept orders from or with an iHeathcare Channel
Partner or any or any Channel Partner customer or any iHealthcare customer that have not been properly placed and processed through
iHealthcare.

 

In the event that a prospective Channel Partner
or customer contacts both parties before an agreement is signed, the parties agree that the party to have made first contact will
have first rights of refusal to enter into an agreement. In the event a Channel Partner opportunity arises from retail customers
both parties have as customers, iHealthcare shall have the right of first refusal to sign a Channel Partner agreement should a
Channel Partner opportunity arise from those retail opportunities. In the event that both parties are selling to retail entities
of a new Channel Partner before a Channel Partner agreement is signed, the parties shall work together to ensure a mutually beneficial
solution protecting the business interests and value already developed by each party, to the extent possible.

 

10. MUTUAL HOLD HARMLESS AND INDEMNIFICATION.

Each Party shall defend, indemnify and hold
the other Party, its affiliated companies, shareholders, officers, directors, Board Members, agents, and employees harmless from
any and all claims by any other party (including reasonable attorneys' fees and costs of litigation) resulting from, but not limited
to, each Party’s [of this agreement] errors, acts, omissions or misrepresentations. This includes, but is not limited to:

 

		a.	relating to Distributor's combining (or its authorizing others to
combine) the ILS Products with any products not provided by ILS, or

		b.	relating to Distributor’s marketing or distribution of the
Products, subject to the following exception, that ILS had no part or responsibility in either creating, assisting, or providing
information or direction related to the marketing and distribution giving rise to the third party claim or cause of action.

 

Each Party shall also defend, indemnify and hold harmless the other
Party and its directors, officers, agents and employees against any and all loss, liability, damage, or expense, liability, damage,
or expense, but not including attorneys’ fees unless awarded by a court of competent jurisdiction, for injury or death to
persons, including employees of either Party, and damage to property, including property of either Party, arising out of or in
connection with intentional, willful, or wanton, conduct regarding, but not limited to:

 

		a.	the engineering, design, construction, maintenance, or repair of ILS’s products. 

 

		11.	LIMITATION OF LIABILITY.

EXCEPT AS EXPRESSLY PROVIDED TO THE CONTRARY
IN SECTION 10, IN NO EVENT SHALL ILS, ITS MEMBERS, EMPLOYEES, ASSIGNS OR AFFILIATED ENTITIES BE LIABLE TO DISTRIBUTOR OR ANY THIRD
PARTY FOR INDIRECT, SPECIAL, INCIDENTAL, OR CONSEQUENTIAL DAMAGES NEGLIGENTLY CAUSED.

 

		12.	TERM AND TERMINATION.

		12.1	Initial Term. 

This Agreement shall take effect
upon full execution of the Agreement by both Parties (the “Effective Date”), and continue for an initial term of three
(3) years (the "INITIAL TERM").

 

 

		12.2	Renewal Term. 

This Agreement shall automatically
renew for additional consecutive one (1) year terms (the “Renewal Terms”) unless either Party gives the other Party
prior written notification of its intent to let this Agreement expire. This notice must be delivered no less than forty-five (45)
calendar days before such expiration of the then current Term, otherwise the Agreement shall renew for an additional Renewal Term.

 

		12.3	Termination for Cause.

		a.	Either party will have the right to terminate this Agreement at any
time if the other party is in breach of any material term, and which such party fails to cure within 10 calendar day after receiving
written notice of the breach and the party’s intention to terminate. 

 

		b.	ILS shall have the right to terminate this Agreement if Distributor:

		1.	becomes insolvent;

		2.	discontinues its business; or

		3.	becomes the subject of any voluntary or involuntary proceeding in
bankruptcy, liquidation, dissolution, receivership, attachment or composition for the benefit of creditors. 

 

Such termination will become effective
upon the non-terminating party’s receipt of a notice of termination at any time after the specified event.

 

		12.4	Effect of Termination.

Upon termination or expiration of
this Agreement:

		a.	ILS may, at its option,

		1.	cancel any non-final orders prior to shipment and refund to Distributor
all related payments made in connection therewith, or

		2.	keep all amounts paid by Distributor to ILS and provide the Products
to Customers. 

 

After termination notices, the due
dates of all outstanding invoices to Distributor for the Products will be accelerated so they become due and payable on the effective
date of the termination or expiration, even if longer terms had been previously provided. Notwithstanding any credit terms made
available to Distributor prior to such notice, any Products ordered thereafter shall be paid for by certified or cashier’s
check prior to activation.

		b.	Distributor shall cease using any ILS trademark, logo or trade name
and Distributor’s right to market and license any Products shall automatically terminate.

 

		c.	Distributor’s obligations to pay ILS all amounts due hereunder,
as well as either party’s obligations relating to indemnification, warranties, disclaimers or warranty, protection of proprietary
rights and confidential information shall survive termination of this Agreement.

 

		d.	The Non-Circumvention Section 9.3 shall remain in full force and
effect post termination or expiration. ILS shall continue to honor sales agreements and recurring orders and terms in place made
and developed by iHealthcare for customers and channel partners, provided customers and channel partners honor the payment terms
of this agreement. 

		13.	COMPLIANCE WITH LAWS.

13.1
Compliance with Healthcare Laws, including “Kickback” Laws.

		a.	"Kickback" as used in this clause
means any illegal remuneration, money, fee, commission, credit, gift, gratuity, thing of value, or compensation of any kind which
is provided, directly or indirectly, for any designated health services for the purpose of improperly obtaining or rewarding referrals
for items or services reimbursable by any Federal or State health care program, or in violation of any State of Federal laws. 

		b.	The Parties agree to comply with all State & Federal healthcare
rules and regulations, as well as any laws, rules or regulations in any of the other jurisdictions in the Territory, including
but not limited to any “Kickback” laws, such as Stark, Anti-Kickback and Florida’s Patient Self-Referral Act
of 1992. 

		c.	Distributor will set up a compliance program to ensure that it maintains
compliance with these healthcare provisions throughout the term of this Agreement. At a minimum, each year the parties will get
together and review their business operations to ensure they are in compliance with all laws, rules and regulations governing the
sale or distribution of the Products and the processes and procedures beings used by ILS or Distributor.

		d.	The parties agree to use their best efforts to immediately and remedy
any actions or obligations that they find may arguably be a current violation or a future violation, including making any contractual
amendments to incorporate such changes. However, since the goal of the Parties is to always maintain compliance in all current
and future activity, any change made pursuant to these provisions shall not establish or imply that the change was in fact a violation.

 

13.2 Compliance with other Laws.

 

ILS acknowledges that it is responsible
for complying with all governmental laws, ordinances, rules and regulations in the United States ("Laws"), including
without limitation all Laws which may govern (I) the importation, exportation, transportation, storage, marketing of Products in
the Territory, and Government permits or approvals, compliance with customs requirements or testing of any Products. ILS shall
cooperate fully with Distributor in complying with any governmental agency order or rule.

 

Distributor acknowledges that it
is responsible for complying with all governmental laws, ordinances, rules and regulations of the Territory outside the United
States ("Laws"), including without limitation all Laws which may govern (I) the importation, exportation, transportation,
storage, marketing, distribution, sale, use and disposal of Products in the Territory, and Government permits or approvals, compliance
with customs requirements or testing of any Products. ILS shall cooperate fully with Distributor in complying with any governmental
agency order or rule. Distributor shall take all actions and precautions to put into place contractual obligations requiring its
Customer or Channel partners to comply with such laws or regulations as well.

 

14. MISCELLANEOUS PROVISIONS

		14.1	Independent Contractors.

The relationship of ILS and Distributor
established by this Agreement is that of independent contractors. This Agreement does not give either party the power to direct
and control the day to day activities of the other or otherwise participants in a joint or common undertaking, or allow either
party to create or assume any obligation on behalf of the other party for any purpose whatsoever.

 

		14.2	Amendments and Modifications of Terms.

This Agreement
may only be modified or amended upon mutual written agreement signed by authorized representatives of the parties. No oral agreements
or representations made after the Effective Date shall be valid or binding upon the parties unless they comply with the requirements
of this paragraph.

 

Furthermore,
the parties agree that at any time during this Agreement, they will cooperate with and shall not to unreasonably withhold consent,
to amending or changing portions of the Agreement when the amendment or change is necessary or reasonable to facilitate either
party's compliance with any law or regulation, including those in a particular Territory.

 

Notwithstanding
the foregoing, ILS is not permitted to: (i) change the location or size of any Territory; (ii) charge any additional fees or costs
whatsoever to Distributor other than those set forth herein, except as specifically authorized by this Agreement; or (iii) require
Distributor to execute any additional agreements, amendments to this Agreement, or to follow any guidelines or rules that are materially
different than the most current form of distribution agreement as it exists upon the Effective Date and as utilized by Distributor
in North, South and Central America and Caribbean Basin.

 

		14.3	Waiver. 

The delay or failure by a party
to exercise or enforce any of its rights under this Agreement shall not constitute or be deemed a waiver of the party’s right
thereafter to enforce those rights, nor shall any single or partial exercise of any such right preclude any other or further exercise
thereof or the exercise of any other right.

 

		14.4	Governing Law.

This Agreement shall be governed
by and construed in accordance with the laws of the State of Florida, U.S.A., and the venue for any arbitration or litigation concerning
this Agreement shall be in Miami Dade County, Florida. Distributor consents to the jurisdiction in Miami Dade County, Florida.

 

		14.5	Dispute Resolution.

Prior to commencing any litigation
or other legal or equitable formal action, the Parties may jointly decide to submit the dispute to non-binding mediation, where
the parties will share equally all mediation fees.

 

		14.6  Notices.	

All notices and other communications
hereunder shall be given in writing and delivered (a) by personal delivery, by prepaid overnight or courier service to the addresses
set forth herein, or (b) by facsimile to such facsimile number as may be provided in writing by a party.

 

Notices are deemed given on receipt
or attempted delivery (if receipt is refused).All notices, consents, waivers or other communications given hereunder shall be in
writing, shall be delivered by hand, by registered or certified post (return receipt requested) or sent by facsimile, and shall
be deemed received upon actual delivery. All notices shall be directed as follows with a copy to such other person as either Party
may from time to time nominate:

 

To: ILSTo: Distributor

Carlos LeonNoel Mijares

1900 Purdy Avenue, #5141
NE 3rd Avenue, 9th Floor

Miami Beach, FL 33139Miami,
FL 33132

Fax. 305.671.3507305-336-5608

Toll Free 1.800.615.0266nmijares@ihealthcaresystems.com

carlos@inodetox.com Email Address

 

		14.7	Assignment / Subcontracting.

Distributor may not assign or subcontract
its rights or obligations without first obtaining the written permission of ILS, which such permission will not be unreasonably
withheld or delayed. Distributor has an affirmative obligation to disclose the existence of this Exclusive Distribution Agreement
to any bona fide entity looking to purchase the rights to the PRODUCTS or purchase Distributor or a majority ownership of its voting
shares (whatever would constitute a majority at the time of the inquiry). Furthermore, any such purchase, assumption, or sale of
Distributor of the PRODUCTS, in whole or part, must be expressly subject to the terms of this Agreement.

 

		14.8	Attorney’s Fees.

In the event of any litigation or
arbitration hereunder, the arbitrator or court shall award costs and reasonable attorneys' fees to the prevailing party.

		14.9	Severability.

The terms of this Agreement are
severable. If any term hereof is held invalid, illegal, or unenforceable for any reason whatsoever, such term shall be enforced
to the fullest extent permitted by applicable law, and the validity, legality, and enforceability of the remaining terms shall
not in any way be affected or impaired thereby.

 

    	 

    	 

    

 

Exhibit Listing:

 

The following Exhibits are attached to and made part
of this Agreement:

 

	Exhibit	Description
	A	Purchase Order Form
	 	 
	 	 

 

 

 

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SIGNATURE PAGE FOLLOWS

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IN WITNESS WHEREOF, this Agreement
has been duly executed by authorized representative of Main Avenue Pharmacy.

 

 

 

Innovative
Laboratory Services, LLC

	
         

         

        //Carlos Leon//

         
	 
	
         

        Signature

         

	
        BY: Carlos
        Leon

         

        ITS: Managing
        Member

	 
	
        02/18/2016

        Date
        Signed

	 
	 	 
	 	 
	 	 
	 	 
	 	 
	 	 	 

 

 

 

 

    	 

    	 

    

 

IN WITNESS WHEREOF, this Agreement
has been duly executed as an authorized representative of Distributor.

	
         

         

        Distributor

         

         

        //Noel Mijares//

	
         

        Signature

         

	
        BY: Noel
        mijares

         

        ITS:
        Chief Executive officer

	 
	
        02/18/2016

        Date
        Signed

 

    	 

    	 

    

 

  

 

ILS
Purchase order form

 Exhibit “A”

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00262-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00262-of-00352.parquet"}]]