G Medical Innovations (GMVDF) F-1 Registration statement (foreign)

Exhibit 10.13

STOCK PURCHASE AGREEMENT

among

G MEDICAL INNOVATIONS USA INC.,

and

SELLERS NAMED HEREIN

Dated as of October 27, 2017

TABLE OF CONTENTS

		Page
ARTICLE I DEFINITIONS; INTERPRETATION		1
Section 1.1	Definitions	1
Section 1.2	Additional Defined Terms	7
Section 1.3	Interpretation	8
ARTICLE II PURCHASE AND SALE OF SHARES		8
Section 2.1	Purchase and Sale	8
Section 2.2	Purchase Price	9
Section 2.3	Closing	9
Section 2.4	Payment of the Purchase Price; Closing Deliverables	9
Section 2.5	Escrow	10
Section 2.6	Withholding Rights	11
ARTICLE III REPRESENTATIONS AND WARRANTIES REGARDING THE COMPANY		11
Section 3.1	Organization	11
Section 3.2	Noncontravention	11
Section 3.3	Law Compliance	12
Section 3.4	No Outstanding Rights to Outstanding Shares	12
Section 3.5	Financial Statements	12
Section 3.6	Liabilities	13
Section 3.7	Business Changes	13
Section 3.8	Contracts; No Defaults	14
Section 3.9	Real Property	16
Section 3.10	Title to Company’s Assets	16
Section 3.11	Condition and Sufficiency of Assets	16
Section 3.12	Intellectual Property	17
Section 3.13	Accounts Receivable	17
Section 3.14	Major Customers and Suppliers	17
Section 3.15	Insurance	17
Section 3.16	Legal Proceedings; Actions; Governmental Entity Orders	18
Section 3.17	Compliance with Laws; Governmental Authorizations	18
Section 3.18	Environmental Matters	19
Section 3.19	Labor and Employment Matters	19
Section 3.20	Employee Benefit Plans	20
Section 3.21	Taxes	21
Section 3.22	Books and Records	22
Section 3.23	No Material Adverse Effect	22
Section 3.24	No Brokers	22
Section 3.25	Full Disclosure	22

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ARTICLE IV REPRESENTATIONS AND WARRANTIES OF SELLERS		22
Section 4.1	Authorization	22
Section 4.2	Noncontravention	22
Section 4.3	Related Party Debt	23
Section 4.4	Title to Outstanding Shares	23
Section 4.5	Accredited Investor	23
Section 4.6	CDS Representations and Warranties	23
ARTICLE V REPRESENTATIONS AND WARRANTIES OF BUYER		23
Section 5.1	Organization	23
Section 5.2	Authority; Binding Effect	23
Section 5.3	Conflicts; Consents	24
Section 5.4	Litigation	24
Section 5.5	Brokers	24
Section 5.6	Accredited Investor	24
ARTICLE VI COVENANTS		24
Section 6.1	Fulfillment of Obligations	24
Section 6.2	Notices, Consents and Approvals	25
Section 6.3	Conduct of Business	25
Section 6.4	Access and Information	27
Section 6.5	Confidentiality	27
Section 6.6	Public Announcements	27
Section 6.7	Expenses	27
Section 6.8	Exclusivity	28
Section 6.9	Accounts Receivable	28
Section 6.10	Covenant Not to Compete	29
Section 6.11	Covenant Not to Solicit	29
Section 6.12	Release	29
Section 6.13	Further Assurances	30
Section 6.14	Self-Help	30
Section 6.15	Attorney Client Privilege and Documents	30
Section 6.16	Schedule Supplement	31
ARTICLE VII CONDITIONS TO THE CLOSING		31
Section 7.1	Conditions to Buyer’s Obligations	31
Section 7.2	Conditions to Sellers’ Obligations	32
ARTICLE VIII TERMINATION OF AGREEMENT		33
Section 8.1	Events of Termination	33
Section 8.2	Effect of Termination	34
ARTICLE IX INDEMNITY		34
Section 9.1	Sellers’ Indemnification	34
Section 9.2	Buyer’s Indemnification	35
Section 9.3	Indemnification Procedure	35
Section 9.4	Third Party Claims	36
Section 9.5	Obligation to Set Off	37
Section 9.6	Survival of Representations and Warranties	37
Section 9.7	Indemnity Cap	37
Section 9.8	Payer Agreements	37

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Section 9.7	Indemnity Cap	37
Section 9.8	Payer Agreements	37

ARTICLE X MISCELLANEOUS		38
Section 10.1	Entire Agreement	38
Section 10.2	Descriptive Headings; Joint Drafting	38
Section 10.3	Notices	38
Section 10.4	Counterparts	39
Section 10.5	Benefits of Agreement	40
Section 10.6	Amendments and Waivers	40
Section 10.7	Assignment	40
Section 10.8	Enforceability	40
Section 10.9	GOVERNMENT LAW; JURISDICTION; WAIVER OF JURY	41
Section 10.10	Specific Performance	41
Section 10.11	Delays or Omissions	41
Section 10.12	Joint and Several Liability	42
Section 10.13	Disclosure Schedules	42
Section 10.14	Sellers’ Representative	42
Section 10.15	Guaranty	43
Schedule 1.1	VOLUNTARY ESCROW AGREEMENT
Schedule 2.4(d)	LIST OF RELIEF PAYMENTS TO BE MADE AT CLOSING
Schedule 2.5(a)	SELLER PERCENTAGE SHARE
Schedule 3.2(ii)	CONSENTS
Schedule 3.4	CAPITALIZATION OF THE COMPANY IMMEDIATELY PRIOR TO THE CLOSING
Schedule 3.5	FINANCIAL DISCLOSURES
Schedule 3.6	DISCLOSED LIABILITIES
Schedule 3.8	CONTRACTS
Schedule 3.10	PERMITTED ENCUMBRANCES
Schedule 3.12	COMPANY INTELLECTUAL PROPERTY
Schedule 3.13	ACCOUNTS RECEIVABLE
Schedule 3.14	MAJOR CUSTOMERS AND SUPPLIERS
Schedule 3.15	INSURANCE
Schedule 3.19(c)	EMPLOYEES
Schedule 3.20	EMPLOYEE BENEFIT PLANS
Schedule 3.21	TAXES
Schedule 4.3	RELATED PARTY DEBT
Schedule 7.1(h)	CARDIAC DIAGNOSTICS DEBT SCHEDULE

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SHARE PURCHASE AGREEMENT

This SHARE PURCHASE AGREEMENT (this “Agreement”) is dated as of October 27, 2017, by and among G MEDICAL INNOVATIONS USA INC., a Delaware corporation (“Buyer”) and the persons named as sellers on the signature pages hereto (each, a “Seller” and collectively, “Sellers”), and Timothy L. Lohman, (the “Sellers’ Representative”). Buyer, the Company, Sellers, and the Sellers’ Representative are each sometimes referred to herein as a “Party” and, collectively, as the “Parties.” Capitalized terms which are used but not otherwise defined herein are defined in Section 1.1 below.

WHEREAS, Sellers own immediately prior to Closing (as defined below) all of the issued and outstanding shares of common stock of the Company;

WHEREAS, the Company and CDS (as defined below) have completed or intend to complete a Merger (as defined below) prior to the Closing (as defined below) and the Company is the surviving entity in such Merger;

WHEREAS, Buyer wishes to acquire all of the outstanding shares of common stock of the Company; and

WHEREAS, the Parties desire to enter into this Agreement pursuant to which each Seller agrees to sell to Buyer, and Buyer agrees to purchase from each Seller, all of the Outstanding Shares owned by such Seller in the Company, on and subject to the terms and conditions contained herein, and that immediately after the Closing, Buyer shall be the sole owner of all shares and equity interests in the Company.

NOW, THEREFORE, in consideration of the representations, warranties, covenants and agreements contained herein, the Parties hereby agree as follows:

ARTICLE I

DEFINITIONS; INTERPRETATION

Section 1.1 Definitions. For the purposes of this Agreement, each of the following terms shall have the following respective meanings:

“Action” means any action, claim, dispute, arbitration, audit, hearing, investigation, litigation, suit or other proceeding (whether civil, criminal, arbitral, administrative, investigative, or informal) commenced, brought, conducted, or heard by or before, or otherwise involving, any Governmental Entity or any referee, trustee, arbitrator or mediator.

“Affiliate” means, with respect to any Person, any other Person who directly or indirectly controls, is controlled by, or is under common control with, such Person. The term “control” means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of a Person, whether through the ownership of voting securities, by contract or otherwise, and the terms “controlled,” “controlling,” “controlled by” and “under common control with” have meanings correlative thereto.

“Applicable Law” means, with respect to any Person, any Law and other provisions having the force or effect of law applicable to such Person or any of its Affiliates or any of their respective Assets, officers, directors or employees (in connection with such officer’s, director’s or employee’s activities on behalf of such Person or any of its Affiliates).

“Assets” means all properties, assets and rights of every kind, nature and description whatsoever whether tangible or intangible, real, personal or mixed, wherever located, (including, without limitation, cash, cash equivalents, accounts receivable, inventory, equipment, improvements, intellectual property, contracts, real estate, claims and defenses).

“Balance Sheet Date” means September 30, 2017.

“Books and Records” means all books and records pertaining to the Company or CDS, of any and every kind, including client and customer lists, Tax Returns and supporting workpapers and schedules (including accountants’ workpapers), referral sources, research and development reports, operating guides and manuals, financing and accounting records, programs, inventory lists, correspondence, emails, word and data storage systems, compact disks, compact disk lists, account ledgers, minute books, stock ledgers, articles of incorporation, bylaws, files, reports, plans, advertising materials, promotional materials, drawings and operating records, held or maintained by the Company, CDS or any Affiliate of the Company.

“Business” means the business and operations presently conducted and as presently contemplated to be conducted by the Company and CDS.

“Business Day” means any day other than a Saturday, Sunday or other day on which banks in New York, New York, Austin, Texas, or Independence, Ohio are required to be closed.

“Buyer Parent” means G Medical Innovations Holdings Ltd.

“CDS” means Cardiac Diagnostic Services, Inc., formerly an Ohio corporation prior to the Merger.

“Code” means the United States Internal Revenue Code of 1986, as amended.

“Company” means Cardiostaff Corporation, a Texas corporation, and pursuant to the Merger (and for all purposes under this Agreement) includes all aspects of CDS, no exceptions or reservations.

“Company Intellectual Property” means all Intellectual Property that is (i) used in or necessary or material to the conduct of the Business, and/or (ii) owned by or licensed to the Company or CDS.

“Consent” means any approval, consent, ratification, waiver, clearance or other authorization of, notice to or registration, qualification, designation, declaration or filing with any Person, including, without limitation, any authorization from a Governmental Entity.

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“Employee Benefit Plans” mean any “employee pension benefit plans” (as defined in Section 3(2) of ERISA), “employee welfare benefit plans” (as defined in Section 3(1) of ERISA) and all other bonus, pension, profit sharing, deferred compensation, incentive compensation, stock ownership, stock purchase, stock option, phantom stock, equity-based retirement, vacation, severance, employment agreement, change in control agreement, indemnification agreement, disability, death benefit, hospitalization, medical or other plan, arrangement or understanding (whether or not legally binding) providing benefits to any current or former employee, officer, director or other service provider of the Company or CDS, or with respect to which the Company or CDS has any liability or obligation to contribute.

“Environmental Laws” means any Applicable Law relating to the injury to, or the pollution or protection of human health and safety or the environment.

“ERISA” means the Employee Retirement Income Security Act of 1974, as amended, and any laws, rules, or regulations related thereto.

“Escrow Agreement” means the Voluntary Escrow Agreement, in the form attached hereto as Schedule 1.1 by and among Sellers and Buyer Parent, including any amendment, modification, supplement or replacement thereto.

“Fraud” means the Sellers’ actual and intentional fraud with respect to the making of the representations and warranties pursuant to Section 4, provided, that such actual and intentional fraud of Sellers shall only be deemed to exist if Sellers had actual knowledge (as opposed to imputed or constructive knowledge) that the representations and warranties made by the Sellers pursuant to Section 4 were actually breached when made, with the express intention that the Buyer rely thereon to its detriment.

“Fully-Diluted Basis” means the calculation of shareholding ratio on the basis of the assumption that all the outstanding options, warrants and other stock equity securities convertible into, exercisable or exchangeable for any shares of the Company (whether or not they are at present convertible, exercisable or exchangeable according to the relevant provisions) have been converted, exercised or exchanged accordingly.

“GMV” means G Medical Innovations Holdings Ltd.

“Governmental Entity” means any government or governmental or regulatory body, or any agency, political subdivision, authority or instrumentality thereof, whether foreign, federal, provincial, state, municipal or local or any court or arbitrator (whether public or private).

“Hazardous Material” means any chemical, substance, material, waste, pollutant or contaminant regulated under applicable Environmental Laws, including petroleum, petroleum products, petroleum-derived substances, radioactive materials, medical or infections waste, hazardous wastes, polychlorinated biphenyls, lead based paint, radon, urea formaldehyde, asbestos or any materials containing asbestos, lead-based paint, mold, greenhouse gases, noise and any materials or substances regulated or defined as or included in the definition of “hazardous substances,” “hazardous materials,” “hazardous constituents,” “toxic substances,” “pollutants,” “contaminants” or any similar denomination intended to classify or regulate substances by reason of toxicity, carcinogenicity, ignitability, corrosivity or reactivity under any Environmental Law.

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“Income Tax” means any federal, state, local or foreign Tax based on, measured by or with respect to income, net worth or capital, including any interest, penalty or addition thereto.

“Indebtedness” means, with respect to any Person, (a) indebtedness of such Person for borrowed money, (b) indebtedness evidenced by notes, debentures, bonds or other similar instruments, the payment for which such Person is responsible or liable, (c) all obligations of such Person issued or assumed as the deferred purchase price of property, all conditional sale obligations of such Person, all obligations of such Person under any title retention agreement and all obligations of such Person or any other Person secured by any Lien on any property or asset of such Person, (d) all obligations of such Person under capital lease obligations, (e) all obligations of such Person for the reimbursement of any obligor on any letter of credit, surety bond, banker’s acceptance or similar credit transaction, (f) all obligations of such Person under interest rate, currency swap or hedging transactions (valued at the termination value thereof), (g) all unfunded pension and other employee related obligations, (h) the liquidation value, accrued and unpaid dividends and other monetary obligations in respect of any redeemable preferred shares of such Person, (i) all obligations of the type referred to in clauses (a) through (h) of any other Person, the payment for which such Person is responsible or liable, directly or indirectly, as obligor, guarantor, surety or otherwise, including guarantees of such obligations, and (j) all principal, accreted value, accrued and unpaid interest, prepayment and redemption premiums or penalties (if any), unpaid fees or expenses and other monetary obligations in respect of the obligations of the type referred to in clauses (a) through (i).

“Intellectual Property” means, anywhere in the world, all of the following: (a) patents, patent applications, utility models, foreign priority rights and invention registrations, together with continuations, continuations-in-part, extensions, provisionals, divisions, reissues, patent disclosures, inventions (whether or not patentable) and improvements thereto, (b) registered and unregistered trademarks, service marks, logos, trade dress, trade names and other source-identifying designations and devices as well as all applications for registration, (c) copyrights and design rights, whether registered or unregistered, and pending applications to register the same, (d) Internet domain names and registrations thereof, (e) trade secrets, confidential or nonpublic technical or business information, know-how, works-in-progress, concepts, methods, processes, (whether or not at a commercial stage and whether in written, electronic, magnetic, verbal or any other form and whether or not patentable), (f) all actions and rights to sue at law or in equity for past, present or future infringement or other impairment of any of the foregoing, including the right to receive all proceeds and damages therefrom, and (g) any other intellectual property recognized by Applicable Law.

“Law” means any domestic or foreign, federal, provincial, state or local statute, law (including the common law), ordinance, rule, regulation, directive, Order, writ, injunction, judgment, administrative or judicial decision or interpretation, treaty, decree or other requirement of any Governmental Entity.

“Legal Requirement” means any requirement of Applicable Law, including Permits.

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“Liability” means any direct or indirect indebtedness, obligation, liability, claim, suit, judgment, demand, loss, damage, deficiency, cost, expense, fee, fine, penalty, responsibility or obligation (whether known or unknown, whether asserted or unasserted, whether absolute or contingent, whether secured or unsecured, whether choate or inchoate, whether fixed or unfixed, whether accrued or unaccrued, whether liquidated or unliquidated, and whether due or to become due and regardless of when asserted), including liability for Taxes.

“Lien” means any claim, lien (statutory or otherwise), encumbrance, pledge, Liability, restriction, charge, instrument, license, preference, priority, security agreement, covenant, right of recovery, option, charge, hypothecation, easement, security interest, interest, right of way, encroachment, mortgage, deed of trust, imperfection of title, prior assignments, Order or other encumbrance or charge of any kind or nature whatsoever or any conditional sale or other title retention agreement or other Contract having substantially the same effect as any of the foregoing.

“Material Adverse Effect” means any fact, event, circumstance or change affecting the Company or the Business which individually or in the aggregate when taken together with one or more other facts, events, circumstances or changes effecting the Company or the Business is materially adverse to (a) the condition (financial or otherwise), business, prospects, revenue, profitability, Assets, Liabilities or results of operations of the Company, any of its Subsidiaries or the Business or (b) the ability of Sellers or the Company to perform their respective obligations hereunder and under the other Transaction Documents.

“Merger” means the merger of CDS into the Company pursuant to the merger agreement between CDS, the Company, and the shareholders of CDS dated July 14, 2017 and amended October 17, 2017.

“Merger Agreement” means that certain Merger Agreement dated July 14, 2017 by and among the Sellers, CDS, and the Company and amended October 17, 2017.

“Order” means any decree, injunction, ruling, judgment, assesment, award, consent or other order of or entered by any Governmental Entity, including any judicial or administrative interpretaions, guidances, directives, policy, statements or opinions.

“Ordinary Course of Business” means the ordinary course of business of the Company and its Subsidiaries consistent with past custom and practice (including with respect to quantity, quality and frequency) during the one year period preceding the date of this Agreement.

“Organizational Documents” means with respect to any particular entity, (a) if a U.S. corporation, the articles or certificate of incorporation, the bylaws, and the Shareholder Agreement dated October 18, 2017 by and among the Company and the Sellers (b) if a US limited liability company, the articles or certificate of organization and operating agreement, (c) if a partnership, the partnership agreement and any certificate of partnership, and (d) if another type of Person, any other charter or similar document adopted or filed in connection with the creation, formation or organization of the person, (e) all equity holders’ agreements, voting agreements, voting trusts, joint venture agreements or other agreements or documents relating to the organization, management or operation of any Person or related to the duties, rights and obligations of the equity holders of any Person, and (f) any amendment or supplement to any of the foregoing.

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“Outstanding Shares” means 100% of the issued and outstanding shares of Common Stock of the Company with no par value.

“Payer Agreements” means certain agreements entered into between CDS and various insurance companies pursuant to which CDS was accredited with such insurance companies as a payee under such insurance company’s coverage network.

“Permits” means all filings, franchises, permits, approvals, certificates, licenses, agreements, waivers, quotas, authorizations and similar rights with or issued by a Governmental Entity held or used in connection with the Company or its Subsidiaries, or required under any Applicable Law for the continued operation of the Business.

“Person” means an individual, a partnership, a corporation, a joint venture, an association, a limited liability company, a joint stock company, a trust, a joint venture, an unincorporated organization or a Governmental Entity.

“Representative” means, with respect to any Person, its attorneys, accountants, agents, consultants or other representatives.

“Securities Act” means, the Securities Act of 1933, as amended.

“Sellers’ Knowledge” means the knowledge after reasonable inquiry of Timothy L. Lohman, Susan J. Wendland, and Ron Ciocca.

“Seller Transaction Expenses” has such meaning as set forth in Section 6.7.

“Shareholder Agreement” means the shareholder agreement entered into between the shareholders of the Company dated October 18, 2017.

“Statement Date” means September 30, 2017.

“Stock Split” means the reverse stock split transaction pursuant to that certain Plan of Corporate Reorganization dated as of October 12, 2017, which was completed in connection with the Merger to reduce the number of Outstanding Shares of the Company.

“Subsidiary” means, with respect to any Person, any corporation, limited liability company, partnership, association or other business entity of which (i) if a corporation or a limited liability company (with voting securities), a majority of the total voting power of securities entitled (without regard to the occurrence of any contingency) to vote in the election of directors or managers thereof is at the time owned or controlled, directly or indirectly, by that Person or one or more of the other Subsidiaries of that Person or a combination thereof, or (ii) if a limited liability company (without voting securities), partnership, association or other business entity, a majority of the partnership or other similar ownership interest thereof is at the time owned or controlled, directly or indirectly, by any Person or one or more Subsidiaries of that Person or a combination thereof.

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“Tax” and, with correlative meaning, “Taxes” means with respect to any Person (i) all federal, state, local, county, foreign and other taxes, assessments or other government charges, including, without limitation, any income, alternative or add-on minimum tax, estimated gross income, gross receipts, sales, use, ad valorem, value added, transfer, capital, stock, franchise, profits, license, registration, recording, documentary, intangibles, conveyancing, gains, withholding, payroll, employment, social security (or similar), unemployment, disability, excise, severance, stamp, occupation, premium, property (real and personal), environmental or windfall profit tax, custom duty or other tax, governmental fee or other like assessment, charge, or tax of any kind whatsoever, together with any interest, penalty, addition to tax or additional amount imposed by any Governmental Entity responsible for the imposition of any such tax (domestic or foreign) whether such Tax is disputed or not, (ii) liability for the payment of any amounts of the type described in clause (i) above relating to any other Person as a result of being party to any agreement, including an agreement to indemnify such other Person, being a successor or transferee of such other Person, or being a member of the same affiliated, consolidated, combined, unitary or other group with such other Person, or (iii) liability for the payment of any amounts of the type described in clause (i) arising as a result of being (or ceasing to be) a member of any affiliated group as defined in Section 1504 of the Code, or any analogous combined, consolidated or unitary group defined under state, local or foreign income Tax Law (or being included (or required to be included) in any Tax Return relating thereto).

“Tax Law” means any Law relating to Taxes.

“Tax Return” means any report, return, declaration, claim for refund or other information or statement or schedule supplied or required to be supplied by the Company or any of its Subsidiaries, relating to Taxes, including any schedules or attachments thereto and any amendments thereof.

“Transaction Documents” means this Agreement, the Escrow Agreement, and all other agreements, instruments and certificates to which any of Buyer, or any Seller is a party arising out of or in connection with the transactions contemplated by this Agreement to be delivered by any party hereto at or prior to the Closing.

Section 1.2 Additional Defined Terms.

Each of the following terms is defined in the Section set forth opposite such term:

Agreement	Preamble
Acquisition Transaction	Section 6.8
Buyer	Preamble
Buyer Indemnified Parties	Section 9.1
Claim Notice	Section 9.3(a)
Claims	Section 6.12
Closing	Section 2.3

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Closing Date	Section 2.3
Company	Preamble
Consideration Shares	Section 2.2(a)
Contracts	Section 3.8(a)
Employee Benefit Plan	Section 3.20(a)
Employees	Section 3.19(c)
Encumbrances	Section 3.10
Escrow Release Date	Section 2.5(a)
Financial Statements	Section 3.5
Indemnified Party	Section 9.3(a)
Indemnifying Party	Section 9.3(a)
Leases	Section 3.9
Liabilities Cap	Section 2.2(a)
Losses	Section 9.1
Permitted Encumbrances	Section 3.10
Pre-Closing Accounts Receivable	Section 6.9(a)
Purchase Price	Section 2.2(a)
Releasees	Section 6.12
Releasors	Section 6.12
Relief Payments	Section 2.2(a)
Sellers	Preamble
Sellers’ Representative	Preamble
Termination Date	Section 8.1(d)
Third Party Claim	Section 9.4(a)

Section 1.3 Interpretation. Unless otherwise indicated to the contrary herein by the context or use thereof (i) the words, “herein,” “hereto,” “hereof’ and words of similar import refer to this Agreement as a whole and not to any particular Section or paragraph hereof, (ii) the word “including” means “including, but not limited to”, (iii) words importing the singular will also include the plural, and vice versa, and (iv) any reference to any federal, state, local, or foreign statute or law will be deemed also to refer to all rules and regulations promulgated thereunder. References to $ will be references to United States Dollars, and with respect to any contract, obligation, liability, claim or document that is contemplated by this Agreement but denominated in currency other than United States Dollars, the amounts described in such contract, obligation, liability, claim or document will be deemed to be converted into United States Dollars for purposes of this Agreement as of the applicable date of determination.

ARTICLE II

PURCHASE AND SALE OF SHARES

Section 2.1 Purchase and Sale. At the Closing, upon the terms and subject to the conditions set forth herein, Buyer shall purchase from each Seller, and each Seller shall sell, convey, assign, transfer, and deliver to Buyer, all of the Outstanding Shares owned by such Seller, free and clear of any Encumbrances.

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Section 2.2 Purchase Price.

(a) The aggregate purchase price for the Outstanding Shares shall consist of: (i) the assumption, through acquisition of the Outstanding Shares by the Buyer of all Liabilities and Indebtedness of the Company and CDS subject to a maximum amount of $3,220,000.00 (the “Liabilities Cap”), (ii) shares of G Medical Innovations Holdings Ltd. valued at $1,000,000 (the “Consideration Shares”), and (iii) the Pre-Closing Accounts Receivable (the Liabilities Cap, the Consideration Shares, and the Pre-Closing Accounts Receivable collectively, the “Purchase Price”).

Section 2.3 Closing. The closing of the transactions contemplated hereby (collectively, the “Closing”) shall take place through electronic means of communication (except where originals are specifically required below) on the date that is the twelvth (12^th) Business Day following the satisfaction or waiver of the conditions specified in ARTICLE VII (other than conditions with respect to actions the respective Parties shall take at the Closing itself), or such other place or date as the Parties may mutually agree to in writing (the “Closing Date”).

Section 2.4 Payment of the Purchase Price; Closing Deliverables. At the Closing, subject to the satisfaction or waiver of each of the conditions specified in Section 7.1 and Section 7.2, as applicable:

(a) Each Seller shall deliver to Buyer certificates representing the Outstanding Shares, duly endorsed in blank.

(b) The Sellers’ Representative shall deliver or cause to be delivered to Buyer:

(i) Stock powers executed by all Sellers (CDS stock powers should evidence the transfer of CDS stock to the Company pursuant to the Merger Agreement) and copies of the updated stock transfer books of the Company (and CDS if in existence) evidencing that there are no outstanding owners of any shares of stock of CDS and that the Buyer is the registered owner of all of the Outstanding Shares, certified by the Sellers’ Representative, as being true and correct copies of the originals which have not been modified or amended and which are in effect at the Closing;

(ii) a certificate, signed by the secretary of the Company dated within 10 days of the Closing, establishing that the Company is in existence and otherwise is in good standing under the laws of the jurisdiction of its incorporation, organization or formation, as applicable;

(iii) a copy of the Certificate of Merger filed in respect of the Company the Texas Secretary of State on October 18, 2017; and a copy of the approval certificate issued by the Ohio Secretary of State in response to the certificate of merger or consolidation filed in respect of CDS;

(iv) a certificate of the secretary of the Company certifying as of the Closing as to the fulfillment of the conditions set forth in Section 7.1(a) through Section 7.1(g); and

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(c) Buyer shall issue to Sellers the Consideration Shares, which shall be valued at $1,000,000.00 in the aggregate, calculated using the closing price for shares of GMV on the day before the Closing Date, and which shall be subject to the Escrow Agreement.

(d) Buyer shall make aggregate cash payments in an amount not to exceed $657,080.19 to the Persons listed on Schedule 2.4(d) ((the “Relief Payments”) which shall count against and decrease the Liabilities Cap) to such accounts as indicated to the Buyer by the Sellers’ Representative in a draft (but not final) form not less than 2 Business Days prior to the Closing Date. A final form of the Schedule 2.4(d) shall be provided by Sellers’ Representative on the Closing Date.

(e) Buyer shall have received resignations, effective as of the Closing Date in form and substance satisfactory to Buyer, of all the officers and directors of the Company (and CDS as applicable).

(f) Buyer shall have received all other documents required to transfer operation of the Business from the Sellers and managers of the Company and CDS to the Buyer and Buyer’s Representatives, including but not limited to bank mandates for all bank accounts owned by the Company and CDS and business credit cards.

(g) Each of the Sellers and Buyer Parent shall deliver a duly executed Escrow Agreement.

Section 2.5 Escrow. On the Closing Date, the Consideration Shares shall be placed in escrow pursuant to the Escrow Agreement to serve as security for Sellers’ obligations under this Agreement. The Consideration Shares shall be released from escrow as follows:

(a) on the date which is one-hundred and eighty (180) days following the Closing Date, unless extended by the Buyer in connection with any claims (the “Escrow Release Date”), the Consideration Shares shall be released to Sellers in accordance with the Escrow Agreement and the percentage set forth opposite each such Seller’s name in the “Percentage of Consideration Shares” column of Schedule 2.5(a); provided,  however, that if prior to the Escrow Release Date Buyer gives notice of a claim or claims for indemnification pursuant to ARTICLE IX and the amounts claimed by Buyer cannot be satisfied or covered in full as provided in Section 6.9, then: (A) if any such claim is resolved prior to the Escrow Release Date, by judicial determination or otherwise, any sums due Buyer shall be paid to Buyer through the delivery to Buyer Parent for cancellation of such number of Consideration Shares equal to the amount of such claim (based on the market value of the Consideration Shares on the date of cancellation) deducted pro-rata from the Consideration Shares issued to each of the Sellers (unless any judicial determination or other resolution of such disputes determines otherwise), and (B) if any such claim is not resolved prior to the Escrow Release Date, the number of Consideration Shares with a value equal to the amount of such claim (based on the market value of the Consideration Shares on the Escrow Release Date) shall be retained in escrow (in amounts allocated pro-rata between the Sellers) pursuant to the Escrow Agreement until such claim is resolved. Each of the Sellers hereby consents that if any Consideration Shares are delivered to Buyer Parent as provided in this Agreement and the Escrow Agreement, Buyer Parent shall have the right to and is hereby instructed to cancel such Consideration Shares.

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(b) Each of the Sellers and Buyer agree that it will act pursuant to this Agreement and the Escrow Agreement with respect to the release of any Consideration Shares to which either of them is entitled pursuant to this Agreement. Any distribution of Consideration Shares to Buyer Parent shall be treated as an adjustment to the Purchase Price for all Tax purposes, unless otherwise required by applicable Tax Law.

Section 2.6 Withholding Rights. The Buyer and the Company shall be entitled to deduct and withhold from any consideration otherwise payable to any Person pursuant to this Agreement such amounts as it is required to deduct and withhold with respect to the making of such payment under any applicable Tax Law, as determined in the Buyer’s reasonable discretion. To the extent such amounts are so withheld or paid over to or deposited with the relevant Governmental Entity by the Buyer or the Company, such withheld amounts shall be treated for all purposes of this Agreement as having been paid to the applicable Person in respect to which such deduction and withholding was made.

ARTICLE III

REPRESENTATIONS AND WARRANTIES REGARDING THE COMPANY

The Sellers, jointly and severally, represent and warrant to Buyer, as of the date hereof and as of the Closing Date, as follows:

Section 3.1 Organization. The Company is a corporation duly organized, validly existing and in good standing under the laws of the State of Texas. CDS was, prior to the Merger, a corporation duly organized, validly existing and in good standing under the laws of the State of Ohio. The Company is qualified to do business as a foreign entity in each jurisdiction wherein the location of its assets or the conduct of the Business requires such qualification, except where the failure to be so qualified could not reasonably be expected to have a Material Adverse Effect.

Section 3.2 Noncontravention. This Agreement and the execution, performance, and consummation of the transactions contemplated under this Agreement do not violate or contradict the Organizational Documents of the Company. All of the rights and obligations of the shareholders of the Company under the Shareholder Agreement have been properly observed and all waivers of preemptive rights have been duly obtained. The Sellers’ compliance with the terms and provisions hereof, do not (i) contravene any Law or Order specifically applicable to the Company, or (ii) except as set forth on Schedule 3.2(ii), require the Company to obtain the approval, consent or authorization of any Person which has not been obtained in writing prior to the date of Closing. No Consents are required to consummate, perform, and give full effect to this Agreement and the transactions contemplated hereby or for the operation of the Business immediately after the Closing in the same manner operated immediately prior to the Closing.

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Section 3.3 Law Compliance. The Outstanding Shares were issued in compliance with Applicable Law. The Outstanding Shares were not issued in violation of the Organizational Documents of the Company or any other agreement, arrangement or commitment to which the Sellers or the Company is a party and are not subject to or in violation of any preemptive or similar rights of any Person.

Section 3.4 No Outstanding Rights to Outstanding Shares. Schedule 3.4 is complete, true, and accurate in all respects and sets out on a Fully-Diluted Basis the shares owned by each of the Sellers and all of the issued and outstanding shares of the Company in issue immediately prior to the Closing. Except for the Shareholder Agreement, there are no outstanding or authorized options, warrants, convertible securities or other rights, agreements, arrangements or commitments of any character relating to any stock or equity interests in the Company or CDS or obligating the Company to issue or sell any stock or equity interests, or any other interest, in the Company or CDS. Other than the Organizational Documents, there are no voting trusts, proxies or other agreements or understandings in effect with respect to the voting or transfer of any of the Outstanding Shares. The Outstanding Shares represents 100% of the issued and Outstanding Shares of the Company. There are no other outstanding securities, equity interests, or claims on the share capital of the Company or CDS.

Section 3.5 Financial Statements. The Sellers have delivered to the Buyer:

(a) in respect of CDS, unaudited trial balances for the period commencing January 1, 2015 and ending September 30, 2017 (the “CDS Financial Statements”);

(b) in respect of the Company, (i) compiled profit and loss statement and balance sheets for the period commencing January 1, 2015 and ending December 31, 2016, and (ii) unaudited trial balances for the period from January 1, 2017 to September 30, 2017 (the “CC Financial Statements”); (the CDS Financial Statements and the CC Financial Statements, collectively the “Financial Statements”).

Except as set forth in Schedule 3.5, the Financial Statements are complete and correct in all respects and present fairly the financial condition and position of the Company and CDS for the periods and as of the dates reflected therein. Such Financial Statements do not contain any items of special or nonrecurring income or any other income not earned in the Ordinary Course of Business except as expressly specified therein. The Financial Statements are consistent in all material respects with the books and records of the Company and CDS (which books and records are correct and complete in all material respects).

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Section 3.6 Liabilities.

(a) There are no liabilities or obligations, direct or indirect, absolute or contingent, known or unknown, arising out of or relating to the Business or the Company or CDS, except (i) liabilities or obligations reflected or reserved against on Financial Statements; (ii) liabilities incurred in the Ordinary Course of Business after the Statement Date, consistent with the Company’s prior practice, which, in the aggregate, do not result in any Material Adverse Effect in the financial condition of the Business or the Company or CDS from that set forth in the Financial Statements; (iii) liabilities arising under the Contracts (except for any liability or obligation arising out of the breach, nonperformance or defective performance by the Company of any of the Contracts (defined below)) and set forth on Schedule 3.6(a)(iii); and (iv) liabilities or obligations incurred in connection with this Agreement. Except as set forth in the Financial Statements and Schedule 3.6, there are no liabilities, accounts payable, notes payable, or obligations, direct or indirect, absolute or contingent, known or unknown, arising out of or relating to the Company or CDS.

(b) Schedule 3.6(b) sets forth all of the Liabilities and Indebtedeness (the “Assumed Liabilities”) of the Company and CDS as of the Closing Date to be assumed by the Buyer, the total amount of which shall not exceed the Liabilities Cap.

(c) The Payer Agreements require third-party consent to assign. CDS did not obtain such third-party consents prior to the Merger. CDS’ failure to obtain such third-party consents shall in no way be deemed to be a breach of this Section 3.6.

Section 3.7 Business Changes. Since the Balance Sheet Date:

(a) other than the Merger and the Stock Split, there have been no events which have caused (i) Material Adverse Effect in the Business, condition (financial or other), results of operations, prospects or properties; (ii) damage, destruction or loss (whether or not covered by insurance); or (iii) transaction outside the Ordinary Course of Business;

(b) there has not been any sale, lease, transfer, assignment, abandonment or other disposition of any asset of the Company or CDS outside the Ordinary Course of Business;

(c) there has not been any change in the rate of compensation, commission, bonus or other direct or indirect remuneration payable or to be paid, or any agreement or promise to pay, conditionally or otherwise, any bonus, extra compensation, pension or severance or vacation pay, to any employee, member, director, officer, sales distributor or agent of the Company, other than in the Ordinary Course of Business;

(d) there has not been any payment outside of the Ordinary Course of Business of any liability of the Company;

(e) other than the Merger, there has not been any deviation from the ordinary and usual course of conducting the Business in contemplation of the transactions described in this Agreement or otherwise;

(f) there has not been any mortgage, pledge or creation of any lien, charge, security interest or other encumbrance on any of the membership interests and/or the Company’s assets ;

(g) there has not been any change or modification to the Company’s (or CDS’ as applicable) accounting methods or practices;

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(h) there has not been any material change in the general composition of the Company’s assets and liabilities, including, without limitation, an acceleration of the collection of any accounts receivable or a delay in the payment of any accounts payable outside of the Ordinary Course of Business;

(i) there has not been any labor union organizing activity, any actual or threatened employee strikes, work stoppages, slow-downs or lockouts or any events which could cause a Material Adverse Effect in its relations with its employees, agents, customers or suppliers;

(j) other than pursuant to the Merger, the Company has not incurred or assumed any Indebtedness, entered into any capitalized leases or incurred any liability or obligation not in the Ordinary Course of Business or made any loan or advance to any Person;

(k) other than the Stock Split, the Company has not declared or made any payment or distribution to its holders of its stock, including stock splits, stock dividends and dividends, or purchased or redeemed any stock, notes or other debt or equity or other similar ownership or participation interests;

(l) other than the Stock Split, the Company has not issued, sold, distributed or disposed of any stock, notes or other equity interests or securities or committed itself to do so;

(m) the Company has not written up or down any of its assets, revalued any of its inventory or made any other change in its management of working capital or cash balances; and/or

(n) the Company and CDS have not entered into any agreement or commitment (whether written or oral) to do any of the foregoing.

Section 3.8 Contracts; No Defaults.

(a) Schedule 3.8 contains a complete and accurate list of all outstanding contracts to which the Company or CDS is a party, or by which it is bound, that involve consideration to or from the Company in an amount equal to or greater than $65,000.00 (“Contracts”), and the Sellers’ Representative has delivered to Buyer true and complete copies (if in writing, otherwise, a written description of the terms), of all such Contracts, grouped into the following categories:

(i) each Contract for sales of goods or services by the Company or CDS;

(ii) each Contract affecting the ownership of, leasing of, title to, or any leasehold or other interest in, any leased real or personal property;

(iii) each in-license or other licensing agreement or Contract with respect to Intellectual Property excluding shrink-wrap, click-wrap, click through or other similar licenses with respect to off-the-shelf or personal computer software, including agreements with current or former employees, consultants, or contractors regarding the appropriation, use or the non-disclosure of Intellectual Property rights;

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(iv) each joint venture, partnership, and other Contract (however named) involving a sharing of profits, losses, costs, or liabilities by the Company or CDS, with any other Person;

(v) each Contract containing covenants that in any way purport to restrict the business activity of the Company or CDS or to limit the freedom of any of the Company or CDS to engage in any line of business or to compete with any Person;

(vi) each Contract for capital expenditures;

(vii) each broker, distributor, dealer, sales representative, manufacturer’s representative, franchise, agency, sales promotion, market research, marketing consulting and advertising Contract;

(viii) each Contract with any sourcing partner or other supplier to the Company or CDS;

(ix) each Contract with any Governmental Entity;

(x) each Contract between or among the Company or CDS and any Affiliates of the Company or CDS;

(xi) each Contract (x) providing for employment of any Person, (y) providing for the payment of any salary, bonus or commission based on sales or earnings, or (z) providing for severance or salary continuation benefits;

(xii) each Contract providing for discounts or acceptance of returns not in the Ordinary Course of Business; and

(xiii) each other Contract, whether or not made in the Ordinary Course of Business, which is material to the Company or the conduct of the Business, or the absence of which would constitute a Material Adverse Effect.

(b) Each Contract identified in Schedule 3.8 is in full force and effect and constitutes a legal, valid and binding obligation of the Company and the other parties to the Contract, enforceable in accordance with its terms.

(c) No event has occurred or circumstance exists that (with or without notice or lapse of time) would contravene, conflict with, or result in a violation or breach of, or give the Company or CDS or other Person the right to declare a default or exercise any remedy under, or to accelerate the maturity or performance of, or to cancel, terminate, or modify any Contract identified in Schedule 3.8. 

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(d) Except as expressly set forth in any Contract, copies of which Sellers’ Representative has provided to Buyer prior hereto, no customer of the Company or CDS is entitled to or customarily receives discounts, allowances, profit margin guarantees, volume rebates or similar reductions in price or trade terms.

(e) The Payer Agreements require third-party consent to assign. CDS did not obtain such third-party consents prior to the Merger. CDS’ failure to obtain such third-party consents shall in no way be deemed to be a breach of this Section 3.8.

Section 3.9 Real Property. The Company and CDS own no real property. The Sellers’ Representative has delivered to Buyer a true and correct copy of its lease of the Company’s and CDS’ current leases (the “Leases”). The Company holds valid leasehold interests in the leased property, the Leases are valid and in full force, and there does not exist any default or event that with notice or lapse of time, or both, would constitute a default by the Company or CDS under the Leases. Subject to the terms and conditions of the Leases, the Company has the right to quiet enjoyment of all the Company’s and CDS’ leased property for the full term of the Leases (and any renewal option related thereto) relating thereto. The Company and CDS have not assigned, subleased or conveyed any interest in the Leases or the premises covered thereby to any third party. All the buildings, fixtures and leasehold improvements used by the Company or CDS in the Business are located on the Company’s or CDS’ leased real property and are, as a whole, in good condition and repair, ordinary wear and tear excepted, and are sufficient to carry out the Business as currently conducted and are structurally sound, and all mechanical and other systems located therein are, as a whole, in good condition and repair, ordinary wear and tear excepted, and are sufficient to carry out the Business as currently conducted. The improvements on the Company’s or CDS’ leased property are not in violation of any applicable Law or similar regulatory requirement or zoning requirement, the violation of which would in any way materially impair the use of any such improvement in the manner presently used by the Company or CDS. The rights and privileges of the Company and CDS under the Leases are sufficient to permit the Company and CDS to conduct the Business as currently conducted. The Company and CDS hves all required legal and valid permits and other licenses required of the Company and CDS for all the Company’s and CDS’ leased property.

Section 3.10 Title to Company’s Assets. The Company has good and marketable title to, or a valid and binding leasehold interest in, all of its Assets and properties, free and clear of all mortgages, security interests, title retention agreements, voting rights, options to purchase, rights of first refusal, liens, easements, encumbrances and restrictions (“Encumbrances”), except for those Encumbrances described on Schedule 3.10 (collectively, “Permitted Encumbrances”).

Section 3.11 Condition and Sufficiency of Assets. No maintenance outside the Ordinary Course of Business is needed with respect to the Company’s and CDS’ Assets and properties and the Company’s and CDS’ leased property. The tangible assets of the Company and CDS are in all respects in good condition and working order (reasonable wear and tear excepted) and are adequate, in quality and quantity, for the operation of the Business. The Company’s and CDS’ Assets constitute all of the Assets, tangible and intangible, of any nature whatsoever, necessary to conduct the Business in the manner presently conducted.

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Section 3.12 Intellectual Property. Schedule 3.12 contains a true and complete list of all of the Company’s patents, tradenames, registered and unregistered trademarks, Internet domain names, and copyrights of the Company. The Company Intellectual Property is all of the Intellectual Property necessary for the operation of the Business as it is currently conducted. The current use by the Company or CDS of the Company Intellectual Property does not infringe any patents, trademarks, trade names, service marks, copyrights, licenses, intangible assets or intellectual property rights of others. There are no Actions challenging or threatening to challenge the Company’s or CDS’ right, title and interest with respect to its ownership, continued use and right to preclude others from using any Company Intellectual Property. No other Person is infringing on the Company Intellectual Property.

Section 3.13 Accounts Receivable. Schedule 3.13 contains a complete and accurate list of all accounts receivable of the Company as of the Closing Date (the “Pre-Closing Accounts Receivable”) and sets forth all aging of those accounts receivable. Except as set forth on Schedule 3.13, the Pre-Closing Accounts Receivable (i) have arisen from bona fide transactions entered into by the Company or CDS involving the sale of goods or the rendering of services in the Ordinary Course of Business; and (ii) constitute only valid, undisputed claims of the Company or CDS not subject to claims of set-off or other defenses or counterclaims other than normal cash discounts accrued or discounts paid by insurance companies in relation to the original face value of the accounts receivable in the Ordinary Course of Business consistent with past practice. For purposes of clarity, the current value of Accounts Receivable do not become fully collectible due to discounted reimbursement from insurance companies. Such discounted reimbursement occurs within the Ordinary Course of Business and such discounted reimbursement shall in no way be deemed to be a violation of this section.

Section 3.14 Major Customers and Suppliers. Schedule 3.14 lists the names and addresses of the top 15 customers and the top 15 suppliers of the Company and CDS as of the Statement Date (based on annual sales and/or purchases for fiscal year 2016 and the first half of fiscal year 2017). No customer or supplier listed on Schedule 3.14 has canceled or modified in any materially adverse manner or put the Company or CDS on notice that it intends to cancel or modify in any materially adverse manner, its relationship with the Company or CDS.

Section 3.15 Insurance. Schedule 3.15 sets forth a complete and accurate list and description of all policies of insurance presently in effect with respect to the Business and/or the Company’s Assets (the “Insurance Policies”). All of those policies are valid, outstanding and enforceable policies. No written notice of cancellation or termination has been received by Company with respect to any such policy. All premiums currently payable or previously due on the Insurance Policies have been paid. Company has not received written notice from any of its insurance carriers that any insurance premiums relating to the Insurance Policies will be increased in the future outside of the Ordinary Course of Business, that any insurance coverage provided by the Insurance Policies will not be available to Company in the future on substantially the same terms as now in effect or that any historical limits have been materially impaired or exhausted. Company has previously made available to Buyer complete copies of each of the Insurance Policies.

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Section 3.16 Legal Proceedings; Actions; Governmental Entity Orders.

(a) There are no Actions pending or, to Sellers’ Knowledge, threatened (a) against or by the Company or CDS affecting any of its properties or assets; or (b) against or by the Company, CDS, or Sellers, that challenges or seeks to prevent, enjoin or otherwise delay the transactions contemplated by this Agreement. No event has occurred or circumstances exist that may give rise to, or serve as a basis for, any such Action.

(b) Except as set forth in Section 3.21 and its accompanying schedules, there are no outstanding Orders of any Governmental Entities and no unsatisfied judgments, penalties or awards against or affecting the Company or CDS or any of their properties or assets. No event has occurred or circumstances exist that may constitute or result in (with or without notice or lapse of time) a violation of any such Order.

Section 3.17 Compliance with Laws; Governmental Authorizations.

(a) The Company and CDS are in compliance with all Applicable Laws;

(b) Except as set forth in Section 3.21 and its accompanying schedules, the Company and CDS have filed all reports, statements, documents, registrations, filings or submissions required to be filed with any Governmental Entity, in connection with the operation of the Business. All such filings complied with Applicable Law when filed and no deficiencies have been asserted by any such Governmental Entity with respect to such filings and submissions;

(c) Except as set forth in Section 3.21 and its accompanying schedules, the Company and CDS have not received, at any time within the last two years, any notice or other communication (whether oral or written) from any Governmental Entity or any other Person regarding (A) any actual, alleged, possible, or potential violation of, or failure to comply with, any Law, or (B) any actual, alleged, possible or potential obligation on the part of the Company or CDS to undertake, or to bear all or any portion of the cost of, any remedial action of any nature;

(d) all applications required to have been filed for the renewal of all Consents required by any Governmental Entities have been duly filed on a timely basis with the appropriate Governmental Entity, and all other filings required to have been made with respect to each Consent have been duly made on a timely basis with the appropriate Governmental Entity; and

(e) the Company and CDS have obtained all necessary Consents and satisfied all Legal Requirements pursuant to all Applicable Laws necessary to permit the Company, and the Buyer to lawfully conduct and operate the Business going forward and to permit the Company, and the Buyer to own and use the Assets of the Company and CDS in the manner in which it currently owns and uses such assets going forward. No other Consents are necessary to conduct the Business.

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Section 3.18 Environmental Matters. The Company and CDS have at all times complied, and are in compliance, in all material respects with all Environmental Laws, except as would not cause a Material Adverse Effect. The Company or CDS have not received any notice, report, order, directive, or other information regarding any actual or alleged violation of, or liability (including any investigatory, corrective or remedial obligation) under, Applicable Laws; without limiting this section, none of the following exists at the Company’s or CDS’ leased property: (i) underground storage tanks (ii) asbestos or asbestos containing material; (iii) materials or equipment containing polychlorinated biphenyls; or (iv) landfills, surface impoundments, or disposal areas; the Company and CDS have not treated, stored, disposed of, arranged for or permitted the disposal of, transported, handled, released, or exposed any Person to, any Hazardous Material, or owned or operated any property or facility which is or has been contaminated by any Hazardous Material, so as to give rise to any current or future liabilities, including any investigatory, corrective or remedial obligations, pursuant to CERCLA or any other Environmental Laws; the Company and CDS have not manufactured, sold, marketed, installed or distributed products or items containing asbestos, silica or other Hazardous Materials, and does not have any liability (contingent or otherwise) with respect to the presence or alleged presence of Hazardous Materials in any product or item or at or upon any property or facility; the Sellers’ Representative has furnished to Buyer true and correct copies of all environmental audits, assessments and reports, and all other documents materially bearing on environmental, health or safety liabilities, relating to the past or current operations, properties or facilities of the Business (including anyof Company’s or CDS’ leased real property), in each case which are in Company’s or CDS’ possession or under its reasonable control.

Section 3.19 Labor and Employment Matters.

(a) No employees of the Company or CDS are legally organized or recognized as a labor organization or represented by any labor union or labor organization with respect to their employment with the Company or CDS. As of the date of this Agreement, the Company (or CDS) is not a party to any pending arbitration or grievance proceedings or any other claim relating to any labor contract is any such action threatened. The Company and CDS have not experienced any labor disputes, union organization attempts or any work stoppages due to labor disagreements, and there is currently no labor strike, dispute, request for representation, slow down or stoppage actually pending or threatened against the Company.

(b) The Company is not bound by any court, administrative, agency, tribunal, commission or board decree, judgment, decision, arbitration agreement or settlement relating to collective bargaining agreements, conditions of employment, employment discrimination or attempts to organize a collective bargaining unit which, in any case, would reasonably be expected to materially adversely affect the Company, the Business or its assets. The Company has at all times complied in all material respects with all Laws relating to employment, harassment (of any nature or basis as may be protected by Law), equal employment opportunity, nondiscrimination, reasonable accommodations, immigration, wages, hours, benefits, collective bargaining, the payments of Social Security and similar Taxes, occupational safety and health, plant closings, and reductions in force. The Company is not liable for the payment of any compensation, damages, Taxes, fines, penalties or other amounts, however designated, for failure to comply with any of the foregoing requirements of Law.

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(c) Schedule 3.19(c) lists all of the Company’s current employees (the “Employees”) and their date of hire by the Company and current salary or wage rate. Each of the Employees hired has provided to the Company or CDS proof of their eligibility to work in the United States. Each of the Employees has been properly classified with the Company or CDS with respect to applicable wage and hour Laws. The employment relationship between the Company or CDS and each current employee of the Company or CDS is “employment at will.” There are no current employees of the Company or CDS who are not actively at work on a regular basis due to a short- or long-term disability leave or other leave of absence.

(d) The Company only has Employees in Ohio, Texas, Wisconsin, and Indiana.

(e) Neither the execution and delivery of this Agreement nor consummation of the transactions contemplated hereby will (A) result in any material payment (including, without limitation, severance, bonus, unemployment compensation, golden parachute or otherwise) becoming due any individual employed by the Company or CDS just prior to or on the date of Closing, (B) materially increase the amount of benefits payable under any compensation or Employee Benefit Plan, program or agreement, or (C) result, to any material extent, in the acceleration of the time of payment or vesting of any such benefits.

(f) There are no workers’ compensation claims pending against the Company or CDS, nor does any circumstance exist that is reasonably likely to result in such a claim.

(g) There are no pending or threatened investigations, audits, complaints, or proceedings against the Company or CDS by and Governmental Entity respecting or involving any Employee, applicant for employment, former employee, or any class of the foregoing.

(h) Each Employee has completed and the Company has retained an Immigration and Naturalization Service Form I-9 in accordance with applicable rules and regulations. No current employee of the Company is (a) a non-immigrant employee whose status would terminate or otherwise be affected by the business transaction consummated under this Agreement, or (b) an alien who is authorized to work in the United States in non-immigrant status.

Section 3.20 Employee Benefit Plans.

(a) Schedule 3.20 sets forth a list of each and every “employee benefit plan” (as such term is defined in ERISA Section 3(3)) and any other employee benefit plan, program or arrangement of any kind (each, an “Employee Benefit Plan”) that the Company or CDS maintains, to which the Company or CDS contributes or has any obligation to contribute, or with respect to which the Company has any Liability. The Sellers have delivered true and accurate copies of each Employee Benefit Plan to the Buyer. Each Employee Benefit Plan is in full compliance with all Applicable Laws.

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(b) Company Benefit Plans. With respect to each Employee Benefit Plan, to the extent applicable, the Company or CDS has made available to Buyer true, accurate and complete copies of (A) the plan document or other governing contract or a description of any unwritten plan, (B) the most recently distributed summary plan description, (C) each trust or other funding contract, including any and all policies of insurance maintained in connection with the Employee Benefit Plan, (D) all filings by the Company or CDS with Governmental Entities for the previous three years (including schedules and attachments) with respect to the Employee Benefit Plan (including, but not limited to, securities filings), (E) the most recently received IRS determination letter or IRS opinion letter (in the case of a prototype plan), (F) the financial statements, and, if applicable, the most recent actuarial analysis or opinion for each Employee Benefit Plan, for the previous three years, and (G) all contracts with a service provider to an Employee Benefit Plan, including, but not limited to, contracts with third-party administrators, actuaries, investment managers and consultants.

(c) Multiemployer. Multiple Employer and Defined Benefit Plans. None of the Employee Benefit Plans is a “multiemployer plan” as defined in Section 4001(a)(3) of ERISA, or a plan that has two or more contributing sponsors at least two of whom are not under common control within the meaning of Section 4063 of ERISA and to which the Company or CDS or any entity within the same “controlled group” as the Company or CDS within the meaning of Section 4001(a)(14) of ERISA contributes or has an obligation to contribute. Further, none of the Employee Benefit Plans is a “defined benefit plan” as that term is defined in Section 3(35) of ERISA.

(d) Compliance. (A) Each Employee Benefit Plan is in compliance in form and operation with its own terms and in compliance in form and operation with all applicable Laws; (B) all notices, reports and information relating to the Employee Benefit Plans required by applicable Law to be filed with any Governmental Entity or provided to participants or their beneficiaries have been so filed and provided and are true, accurate and complete; (C) as of the date of this Agreement, (1) there is no investigation or inquiry by any Governmental Entity pending or threatened, and there are no facts and circumstances related to one or more Employee Benefit Plans that would lead to such an investigation or inquiry, and (2) there is no litigation, arbitration or similar proceeding pending or threatened with respect to any Employee Benefit Plan or against the assets of any Employee Benefit Plan and there are no facts and circumstances related to any Employee Benefit Plan that would lead to litigation, arbitration or a similar proceedings against an Employee Benefit Plan; (D) each Employee Benefit Plan intended to be qualified under Section 401(a) of the Code is covered by a current favorable IRS determination letter as to the tax-qualified status of the plan and trust as to form or is a prototype covered by a favorable IRS opinion letter and no facts or circumstances exist that would result in a revocation of that exemption; (E) with respect to each Employee Benefit Plan, all required contributions for periods ending on or before the date hereof have been made by the Company or CDS or have been reflected as an accrued liability on the Financial Statements and disclosed specifically to Buyer; (F) no accumulated funding deficiency or liquidated shortfall (as those terms are defined in Section 302 of ERISA and Section 412 of the Code) have been incurred with respect to any Employee Benefit Plan; (G) the value of the assets of each Employee Benefit Plan exceeds the amount of all benefit liabilities; (H) no person has engaged in a “prohibited transaction” as defined in Section 406 of ERISA or Section 4975 of the Code, with respect to any Employee Benefit Plan for which no individual or class exemption exists; (I) the Company or CDS is not party to any agreement to provide, nor does the Company or CDS have an obligation to provide, any individual with any welfare benefit following his or her retirement, death or termination of employment, except to the extent required under COBRA or other comparable Law; (J) no written or oral representations have been made to any of the Company’s or CDS’ employees or former employees promising or guaranteeing any employer payment or funding for the continuation of medical, dental, life or disability coverage for any period of time beyond the end of the current plan year (except to the extent such coverage is required by COBRA); (K) no written or oral representations have been made to any Company or CDS employee or former employee regarding the employee benefits of the Company, CDS, or the Buyer after the Closing Date. Each of the Company’s and CDS’ Employee Benefit Plans have been terminated and cancelled prior to the Closing Date in compliance their terms and in compliance with all Laws.

Section 3.21 Taxes. Except as set forth in Schedule 3.21, the Company and CDS have filed or caused to be filed on a timely basis all Tax Returns and all reports required to be filed with a Governmental Entity with respect to Taxes that each was required to file on or before the date of this Agreement and has paid all Taxes due and owing by each prior to the date of this Agreement. The Sellers’ Representative has delivered or made available to Buyer copies of all Tax Returns filed since 2009. All such Tax Returns or reports are true, accurate and complete. The Company and CDS have withheld, deducted, collected and paid all Taxes required to have been withheld, deducted, collected and paid by the Company and CDS prior to the date of this Agreement under any applicable federal, state or local law, including without limitation, any amounts required to be withheld or collected with respect to employee, state and federal income tax withholding, employment taxes, social security, unemployment compensation, workers compensation or other similar Taxes, and all such amounts have been timely remitted to the proper authorities. No claim has ever been made or is expected to be made by a Governmental Entity in a jurisdiction where Tax Returns by the Company or CDS has not been filed that the Company or CDS is or may be subject to taxation by such jurisdiction. There are no liens or encumbrances on the Company’s or CDS’ assets or properties that arose in connection with any failure (or alleged failure) to pay any Tax. No Tax Return of the Company or CDS has been audited or is currently under audit or examination, nor has any Governmental Entity threatened to audit a Tax Return. The Tax Returns, or any other documents related to Taxes filed with a Governmental Entity, contain no undisclosed deficiencies that would be expected to result in an audit by a Governmental Entity. There is no tax sharing agreement, tax allocation agreement, tax indemnity obligation or similar written or unwritten agreement, arrangement or understanding or practice with respect to Taxes (including any advance pricing agreement, closing agreement or other agreement relating to Taxes) that will or may require payment by the Company or CDS. The Company and CDS have not waived any statute of limitations in respect of any Taxes or agreed to any extension of time with respect to any Tax assessment. The Company or CDS is not the beneficiary of any extension of time within which to file any Tax Return that has not been filed as of the date of this Agreement. The Company or CDS is not a member of an affiliated group within the meaning of Section 1504(a) of the Code. The Company and CDS have no liability for Taxes of any person (other than Seller) under Treas. Reg. Section 1.1502-6 (or any similar provision of state, local or foreign law) as a transferee or successor by contract or otherwise. The Company and CDS have disclosed in its federal income Tax Returns all positions taken therein that could result in a substantial understatement of federal income Tax under Section 6662 of the Code.

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Section 3.22 Books and Records. The minute books of the Company and CDS have been made available to Buyer, are complete and correct and have been maintained in accordance with sound business practices. The minute books of the Company and CDS contain accurate and complete records of all meetings, and actions taken by written consent of, the board of directors and its shareholders (of each of the Company and CDS), and no meeting, or action taken by written consent, of any such board of directors or its shareholders has been held for which minutes have not been prepared and are not contained in such minute books. At the Closing, all of those books and records will be in the possession of the Company or CDS.

Section 3.23 No Material Adverse Effect. Since the Balance Sheet Date, nothing has occurred that would cause a reasonable person to conclude that a Material Adverse Effect has, or is likely to, occur.

Section 3.24 No Brokers. No broker, finder or investment banker is entitled to any brokerage, finder’s or other fee or commission in connection with the transactions contemplated by this Agreement based upon arrangements made by or on behalf of the Company, CDS, or the Sellers.

Section 3.25 Full Disclosure. Sellers jointly and severally, represent and warrant to the Buyer tha no representation or warranty by any of them in this Agreement and no statement contained in the Schedules to this Agreement or any certificate or other document furnished or to be furnished to Buyer pursuant to this Agreement contains any untrue statement of a material fact or omits to state a material fact necessary to make the statements contained therein, in light of the circumstances in which they were made, not misleading.

ARTICLE IV

REPRESENTATIONS AND WARRANTIES OF SELLERS

The Sellers, jointly and severally, represent and warrant to Buyer, as of the date hereof and as of the Closing Date, as follows:

Section 4.1 Authorization. Each Seller has all requisite power and authority to execute and deliver this Agreement and to perform, carry out and consummate the transaction contemplated by this Agreement and all other Transaction Documents. The execution, delivery and performance of this Agreement have been duly authorized by all necessary action on their part. This Agreement and all Transaction Documents have been duly executed and delivered by all and each Seller and constitutes the legal, valid and binding obligation of the Sellers enforceable against them, in accordance with their respective terms, subject, in each case, to bankruptcy, reorganization, insolvency and other similar laws affecting the enforcement of creditors’ rights in general, and general principles of equity.

Section 4.2 Noncontravention. The execution, delivery and performance by each Seller of this Agreement and all Transaction Documents, the consummation by each of them of the transactions contemplated thereby and hereby, and their compliance with the terms and provisions thereof and hereof, do not (i) contravene any Law or Order specifically applicable to the Sellers, or (ii) require any of the Sellers to obtain the approval, Consent or authorization of any Person which has not been obtained in writing prior to the date of Closing.

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Section 4.3 Related Party Debt. All the indebtedness of the Company or CDS to the Sellers is set forth on Schedule 4.3 (the “Related Party Debt”). The Related Party Debt is the only indebtedness of the Company or CDS to the Sellers or any of their Affiliates. There are no other obliations of any kind between any of the Sellers and any of their Affiliates and Company or CDS except as disclosed on Schedule 4.3.

Section 4.4 Title to Outstanding Shares. The Sellers are the record owners of and have good and valid title to the Outstanding Shares, and immediately prior to Closing, own all such Outstanding Shares free and clear of all Encumbrances. The Outstanding Shares constitute 100% of the total issued and outstanding stock of the Company and CDS. The Outstanding Shares have been duly authorized and are validly issued, fully-paid and non-assessable.

Section 4.5 Consideration Shares. In connection with each Seller’s receipt of his or her percentage share of the Consideration Shares, each Seller has knowledge and experience in financial and business matters and is capable of evaluating the merits and risks of the transaction. Each Seller acknowledges and agrees that G Medical Innovations Holdings Ltd. is a public company and that each Seller has had the opportunity to review G Medical Innovations Holdings Ltd.’s business, management, financial affairs, and other publicly available information and to request and review other publicly available information of G Medical Innovations Holdings Ltd.

Section 4.6 CDS Representations and Warranties. All representations and warranties with respect to the Company set forth in Article III and Article IV are also made with equal force and effect with respect to CDS prior to the Merger.

ARTICLE V

REPRESENTATIONS AND WARRANTIES OF BUYER

Buyer represents and warrants to the Sellers, as of the date hereof and as of the Closing Date, as follows:

Section 5.1 Organization. Buyer is a Delaware corporation duly organized, validly existing and in good standing under the laws of the jurisdiction of its organization, and has all requisite organizational power and authority to own, lease and operate its properties and to carry on its business as now being conducted.

Section 5.2 Authority; Binding Effect. The execution and delivery of this Agreement and the consummation of the transactions contemplated by this Agreement have been duly and validly authorized by all necessary action on the part of Buyer. Buyer has all requisite organizational power and authority to enter into this Agreement and to consummate the transactions contemplated by this Agreement. This Agreement, upon execution, will be duly executed and delivered by Buyer. This Agreement is a valid and binding obligation of Buyer, enforceable against it in accordance with its terms, except to the extent that its enforceability may be subject to applicable bankruptcy, insolvency, reorganization, moratorium or other similar laws affecting the enforcement of creditors’ rights generally, and by general equitable principles.

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Section 5.3 Conflicts; Consents. Neither the execution, delivery or performance by Buyer of this Agreement, nor the consummation by Buyer of the transactions contemplated hereby will (i) conflict with or result in a breach of any obligatons of the Buyer, (ii) require any filing with, notice to, or approval of, any Governmental Entity or any other Person (except the ASX, which shall be obtained on or before Closing), (iii) result in a violation or breach of, or constitute (with or without due notice or lapse of time or both) a default (or give rise to any right of termination, amendment, cancellation or acceleration) under any of the terms, conditions or provisions of any agreement to which Buyer is a party or by which any of Buyer’s Assets may be bound or (iv) violate any Applicable Law.

Section 5.4 Litigation. There is no Action pending or, to the knowledge of Buyer, threatened against Buyer that could reasonably be expected to adversely affect Buyer’s performance under this Agreement or prevent or delay the Closing. Buyer is not subject to any outstanding Order that could adversely affect Buyer’s performance under this Agreement.

Section 5.5 Brokers. Buyer has no liability or obligation to pay any broker’s, finder’s, financial advisor’s or other similar fee or commission in connection with the transactions contemplated by this Agreement based upon arrangements made by or on behalf of Buyer.

Section 5.6 Accredited Investor. The Buyer has knowledge and experience in financial and business matters and is capable of evaluating the merits and risks of the transaction. The Buyer is either (i) an accredited investor as such term is defined in Rule 501 of Regulation D under the Securities Act or (ii) not a “U.S. person” as defined in Rule 902(k) of Resolution S under the Securities Act, and shall submit to the Company such further assurances of such status as may be reasonably requested by the Company. The residency of the Buyer (or, in the case of a partnership or corporation, such entity’s principal place of business) is correctly set forth in Section 10.3.

ARTICLE VI
COVENANTS

Section 6.1 Fulfillment of Obligations. The Sellers and Sellers’ Representative shall, and shall cause the Company and CDS to, take all commercially reasonable steps necessary or desirable and proceed diligently and in good faith to satisfy each of the conditions to the obligations of Sellers contained in this Agreement and all other Transaction Documents, and the Sellers and Sellers’ Representative shall, and Sellers shall cause the Company and CDS to, refrain from taking or failing to take any action that could reasonably be expected to result in the nonfulfillment of any such condition or the breach of any representation, warranty, covenant or agreement contained herein. The Sellers and Sellers’ Representative shall, and Sellers shall cause the Company and CDS to, furnish such further information, execute and deliver such other documents, and do such other acts and things as Buyer may reasonably request from time to time from the date hereof and from and after the Closing, for the purpose of carrying out the intent of this Agreement and the other Transaction Documents and the transactions contemplated hereby and thereby. The Shareholder Agreement will be automatically terminated upon the Closing; if an agreement in writing is necessary to terminate the Shareholder Agreement, this Agreement shall serve as such writing.

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Section 6.2 Notices, Consents and Approvals. Subject to the terms and conditions hereof, the Parties agree to use their commercially reasonable efforts to take, or cause to be taken, all actions and to do, or cause to be done, all things necessary, proper or advisable to consummate and make effective as promptly as practicable the transactions contemplated by this Agreement and the other Transaction Documents and to cooperate with the others in connection with the foregoing, including using their commercially reasonable efforts to (i) deliver all notices and obtain all Consents (if any) required, (ii) obtain all other Consents (if any) required to lawfully consummate the transactions contemplated by this Agreement and the Transaction Documents, (iii) prevent the entry, enactment or promulgation of any threatened or pending Order that would adversely affect the ability of the Parties to consummate the transactions contemplated hereby, and (iv) lift or rescind any Order adversely affecting the ability of any of the Parties to consummate the transactions contemplated hereby.

Section 6.3 Conduct of Business.

(a) Except as may be otherwise contemplated by this Agreement or required by Applicable Law, or as Buyer may otherwise consent to in writing, from the date hereof until the Closing, the Sellers shall, and Sellers shall cause the Company and CDS to:

(i) conduct the Business only in the Ordinary Course of Business;

(ii) use its commercially reasonable efforts to (A) preserve the present business operations, organization (including officers and Employees) and goodwill of the Business and (B) preserve the present relationships with Persons having business dealings with the Company and CDS (including customers and suppliers);

(iii) maintain (A) all of the assets of the Company and CDS in their good condition, ordinary wear and tear excepted, and (B) insurance upon the assets and operations of the Company and CDS in such amounts, scope and coverage as are comparable to that in effect on the date hereof; and

(iv) (A) maintain the books, accounts and records of the Business in the Ordinary Course of Business, (B) continue to collect accounts receivable and pay accounts payable of the Business utilizing normal procedures and without discounting or accelerating payment of such accounts, (C) comply with all contractual and other obligations applicable to the Business, and (D) maintain inventories at customary and appropriate levels consistent with past practice.

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(b) Without limiting the generality of the foregoing, except as may be otherwise contemplated by this Agreement or as Buyer may otherwise consent to in writing, from the date hereof until the Closing, neither the Company nor CDS shall:

(i) (A) split, combine or reclassify any of its capital stock or other equity interests or issue or authorize or propose the issuance of any other securities in respect of, in lieu of or in substitution for shares of its capital stock or other equity interests, or (B) amend the terms of, repurchase, redeem or otherwise acquire, or permit any of its Subsidiaries to repurchase, redeem or otherwise acquire, any of its capital stock or any capital stock of its Subsidiaries, or propose to do any of the foregoing;

(ii) authorize for issuance, issue, sell, deliver or agree or commit to issue, sell or deliver (whether through the issuance or granting of options, warrants, commitments, subscriptions, rights to purchase or otherwise) any capital stock of any class or any other securities (including Indebtedness having the right to vote) or equity equivalents (including stock appreciation rights), or amend in any respect any of the terms of any such securities or equity equivalents outstanding on the date hereof;

(iii) amend or propose to amend its Organizational Documents;

(iv) sell, lease, license, encumber, transfer or dispose of any Assets (except for sales of products in the Ordinary Course of Business);

(v) acquire (by merger, consolidation, purchase of stock or assets or otherwise) of any operating business or material assets or the securities of any other Person (except the Merger);

(vi) make a loan or advance or capital contribution to any other Person;

(vii) cancel or compromise any debt or claim or waive or release any material right of the Company or CDS or their respective assets;

(viii) enter into any Contract, understanding or commitment that restrains, restricts, limits or impedes the ability of the Company or CDS, or the ability of Buyer, to compete with or conduct any business or line of business in any geographic area or solicit the employment of any persons;

(ix) change the compensation of any Employee;

(x) take any action which would adversely affect the ability of the Parties to consummate the transactions contemplated hereby;

(xi) change in any way, the Tax status of the Company or CDS; or

(xii) agree, conditionally or otherwise, to take any of the foregoing actions.

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Section 6.4 Access and Information.

(a) From the date of this Agreement until the first to occur of the Closing Date or the termination of this Agreement, the Company shall permit Buyer and its Representatives (including its accountants, consultants, attorneys and financing sources) to make all investigations and inspections of the Company and CDS, the Business, the premises of the Business, the Books and Records, and all other documents and information related to the Company, CDS, or the Business, as Buyer reasonably deems necessary. At the request of Buyer from time to time the Sellers shall arrange to provide Buyer access to the customers, suppliers and employees of the Company and CDS. This access and investigation shall be made upon reasonable notice and at reasonable places and times and shall be conducted in a manner which does not unreasonably interfere with the operations of the Business. No investigation or inspection by Buyer or its Representatives shall in any way affect or diminish any of the representations, warranties or indemnities made by any Party or the conditions to the obligations of the Parties to consummate the transactions contemplated hereby.

Section 6.5 Confidentiality. Subject to the requirements of Applicable Law and any rules of any stock exchnage to which it (or any of its Affiliate) is subject to, Buyer will keep confidential, and will use commercially reasonable efforts to cause its Representatives to keep confidential, all information and documents obtained pursuant to Sections 6.4. Upon the Closing, Buyer’s obligations under this Section 6.5 shall terminate. Upon the Closing Date and continuing thereafter, Sellers shall treat and hold confidential all information related in any manner to the Company and CDS or to the past, present or potential future operation of the Business (including information of a business, technical, manufacturing, sales, legal, marketing, scientific, or financial nature) (collectively “Confidential Information”), and shall refrain from disclosing any Confidential Information to any third parties and from using any of the Confidential Information except as necessary to perform their obligations under this Agreement. Each Seller shall further deliver promptly to Buyer (or destroy at the request and option of Buyer) all tangible embodiments (and all copies) of Confidential Information in a Seller’s possession.

Section 6.6 Public Announcements. Prior to the Closing, neither Buyer, on the one hand, nor the Company, CDS, and Sellers, on the other hand, shall issue any press release or make any public announcement with respect to the transactions contemplated by this Agreement, without the prior written approval of the other, except as may be required by Applicable Law, court process or any securities exchange that Buyer or any of its Affiliates may be subject to. Subject to the requirements of any Applicable Law or the rules of any stock exchange to which a party (or its Affiliate) is subject, upon the Closing, Buyer and Sellers’ Representative shall cooperate to issue a joint press release with respect to the transactions contemplated by this Agreement, and neither Buyer nor Sellers shall make any other public announcement or issue any press releases or make any other disclosure to any third party concerning the terms and conditions of the transactions contemplated by this Agreement without the prior written approval of the other party.

Section 6.7 Expenses. Each Party shall bear their own costs, fees and expenses, including attorney, investment banker, broker, accountant and other representative and consultant fees, incurred in connection with the execution and negotiation of this Agreement and the consummation of the transactions contemplated hereby. For the avoidance of doubt, Sellers shall bear their own expenses in respect of this transaction and the Company or CDS shall not bear the expenses incurred by the Sellers in the negotiation, execution, and performance of this Agreement (“Seller Transaction Expenses”). The Sellers and the Sellers’ Representative shall not cause the Company or CDS to incur any expenses of their own in connection with this Agreement.

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Section 6.8 Exclusivity.

(a) Neither the Company, CDS, nor any Seller shall, nor shall they permit any of their respective Affiliates or Representatives to, directly or indirectly, (i) discuss, encourage, negotiate, undertake, initiate, authorize, recommend, propose or enter into, either as the proposed surviving, merged, acquiring or acquired corporation, any transaction involving a merger, consolidation, business combination, purchase or disposition involving the Business, any Outstanding Shares or any material portion of the assets of the Company or CDS other than the transactions contemplated by this Agreement (an “Acquisition Transaction”), (ii) facilitate, encourage, solicit or initiate discussions, negotiations or submissions of proposals or offers in respect of an Acquisition Transaction, (iii) furnish, or cause to be furnished, to any Person any information concerning the Business in connection with an Acquisition Transaction, or (iv) otherwise cooperate in any way with, or assist or participate in, facilitate or encourage, any effort or attempt by any other Person to do or seek any of the foregoing.

(b) The Company, CDS, and Sellers’ Representative shall notify Buyer orally and in writing promptly (but in no event later than twenty-four (24) hours) after receipt by the Company, CDS, or any Seller, or any of their respective Representatives of any proposal, offer or other communication from any Person (other than Buyer) concerning an Acquisition Transaction or any request for non-public information relating to the Business or for access to the properties, books or records of the Company or its Subsidiaries by any Person (other than Buyer). Such notice shall indicate the identity of the Person making the proposal or offer, or intending to make a proposal or offer or requesting non-public information or access to the books and records of the Company or its Subsidiaries, the material terms of any such proposal or offer and copies of any written proposals or offers or amendments or supplements thereto.

(c) The Company, CDS, and each Seller shall, and shall cause their respective Representatives to, immediately cease and cause to be terminated any existing discussions or negotiations with any Persons (other than Buyer) conducted heretofore with respect to any Acquisition Transaction. The Company and each Seller shall not release any third party from the confidentiality and standstill provisions of any agreement to which the Company, CDS, or any Seller is a party.

Section 6.9 Accounts Receivable.

(a) The Buyer will collect and hold for the Sellers, any and all Pre-Closing Accounts Receivable listed in Schedule 3.13. The Buyer shall collect and hold such Pre-Closing Accounts Receivable until the date that falls one-hundred and eighty (180) days after the Closing Date, on which day, the Buyer shall pay over the Pre-Closing Accounts Receivable to the Sellers’ Representative for further distribution to Sellers in accordance with the percentage set forth opposite each such Seller’s name in the “Percentage of Pre-Closing Accounts Receivable” column of Schedule 2.5(a); provided, however, that if prior to the end of such 180-day period Buyer gives notice of a Claim or Claims for indemnification pursuant to Article IX, then: (A) if any such Claim is resolved prior to such 180-days date, by judicial determination or otherwise, any sums due Buyer shall be paid to Buyer through the retainment by Buyer of such amounts equal to the amount of such Claim, and (B) if any such Claim is not resolved prior to such 180-days date, the amounts claimed by Buyer shall be retained until such Claim is resolved.

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Section 6.10 Covenant Not to Compete. As a material inducement to cause Buyer to enter into this Agreement, subject to the conditions set forth herein, each Seller, Timothy Lohman, Ronald Ciocca, and Susan Wendland agree that for a period of 3 years (the “Non-Compete Period”) from and after the Closing Date, such Seller will not engage, whether as an officer, director, consultant, advisor, agent, employee, partner, member, seller, participant, owner, lender, guarantor, investor or otherwise, in the United States directly or indirectly in the business of marketing, selling or servicing any products or servicing similar to or competitive with the products and/or services of the Company or CDS (“Competing Business”); in addition, no passive owner of less than 1% of the outstanding shares of any publicly traded corporation shall be deemed to engage solely by reason thereof in a Competing Business.

Section 6.11 Covenant Not to Solicit.

(a) Each Seller agrees that for a period of 3 years after the Closing Date, such Seller shall not, directly or indirectly, (i) contact or solicit any customer of the Company or CDS for the purpose of (A) diverting or influencing any such customer to purchase any products or services from a Competing Business or (B) marketing, selling, distributing or providing any product or service that is, or is proposed to be, marketed, sold, distributed or provided by the Company or CDS as of the Closing Date, or (ii) interfere with, disrupt or attempt to disrupt, any present or prospective relationship, contractual or otherwise, between the Company or CDS and any vendor, supplier, dealer, distributor, customer, employee, consultant or other Person having business dealings with the Company or CDS.

(b) Each Seller agrees that for a period of 3 years after the Closing Date, such Seller shall not directly or indirectly hire or solicit for employment as an employee or consultant any person who is or was an employee or director of, or advisor or consultant to, the Company or CDS at the Closing, without the written consent of Buyer, until such time as such Person has been separated from the Company or CDS for a period of at least 12 months.

Section 6.12 Release. Effective as of the Closing, each Seller, on Seller’s own behalf and on behalf of such Seller’s heirs, successors, trustees, executors, administrators, assigns and any other person or entity that may claim by, through or under any of them (collectively with the Seller, the “Releasors”) releases and discharges Buyer and the Company and their respective present and future owners, directors, officers, agents, employees and representatives (collectively with Buyer and the Company, as the case may be, the “Releasees”) from all Actions, Indebtedness (other than Indebtedness disclosed as Related Party Debt in Schedule 4.3) damages, accounts and Liabilities of any kind or nature, whether in law or equity, known or unknown, liquidated or unliquidated, choate or inchoate, and whether arisen, accrued or matured heretofore or hereafter, against the Releasees, or any of them, which the Releasors, or any of them, ever had, now has or hereafter may have, upon or by reason of any cause, matter or thing whatsoever occurring prior to the Closing Date (collectively, “Claims”), including, but not limited to, (a) any Claims relating to or arising out of any securities of the Company held at any time by the Seller and (b) any dividends or distributions on such securities; provided, however, that notwithstanding anything in this Section 6.12 to the contrary, nothing herein shall be deemed a release or discharge of any obligation of Buyer to perform any of the terms, conditions and agreements contained in this Agreement, and nothing herein shall be deemed a release of the Company or the Buyer from the Related Party Debt set forth in Schedule 4.3.

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Section 6.13 Further Assurances. Sellers shall, at any time from and after the Closing, upon the request of Buyer, do, execute, acknowledge and deliver, and cause to be done, executed, acknowledged and delivered, all such further acts, deeds, assignments, transfers, conveyances, powers of attorney or assurances as may be reasonably required to transfer, convey, grant and confirm to and vest in Buyer good title to all of the Outstanding Shares of the Company and CDS, free and clear of all Liens and to otherwise carry out the intent of this Agreement.

Section 6.14 Self-Help. Sellers, Sellers’ Representative and Buyer have agreed that the Purchase Price has been negotiated and agreed upon based upon Sellers’ representations that the aggregate sum of all Liabilities, Indebtedness and obligations payable or due by the Company and CDS, whether now or later and whether or not discovered or matured at the Closing or later, would not exceed the Liabilities Cap. In the event that at any time the Buyer discovers that the same exceed the Liabilities Cap, it may deduct any such excess from any Pre-Closing Accounts Receivable Payments due to Sellers pursuant to Section 6.9(a). This section is in addition to, but without duplication of, any rights and remedies available to Buyer under ARTICLE IX.

Section 6.15 Attorney Client Privilege and Documents. The Buyer for itself and on behalf of the Company acknowledges that O’Neil, Cannon, Hollman, DeJong & Laing S.C (“OCHDL”) has represented the Company and the Sellers in connection with the transactions contemplated by this Agreement. The Buyer agrees that the attorney-client privilege, attorney work-product protection, and expectation of client confidence attaching as a result of OCHDL’s representation of the Company and the Sellers in connection with the transactions contemplated by this Agreement or any transactions relating to the Merger Agreement, and all information, correspondence (including emails) and documents covered by such privilege or protection in connection with such transaction, shall belong to and be controlled by the Sellers and may be waived only by the Sellers, and shall not pass to or be claimed or used by the Buyer or the Company. The Buyer agrees that, notwithstanding any current or prior representation of the Company by OCHDL, OCHDL shall be allowed to represent the Sellers relating to this Agreement or the transactions contemplated hereby. The Buyer, for itself and on behalf of the Company, hereby waives any conflicts that may arise in connection with such representation. The Buyer for itself and on behalf of the Company agrees that OCHDL may represent the Sellers in such a matter or dispute, even though the interests of the Sellers may be directly adverse to the Buyer or the Company. The Buyer, for itself and on behalf of the Company, consents to the disclosure by OCHDL to the Sellers of any information learned by OCHDL in the course of its representation of the Company prior to Closing, whether or not such information is subject to the attorney-client privilege of the Company or OCHDL’s duty of confidentiality as to the Company.

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The Sellers also retain all rights to all information, correspondence (including emails) and documents (other than documents delivered in connection with the Closing) prepared by or for the Sellers or exchanged in connection with the transactions contemplated in this Agreement, regardless of whether or not they are covered by any attorney-client privilege or attorney work-product protection (e.g., correspondence with investment bankers, accountants, etc.).

Section 6.16 Schedule Supplement. Prior to Closing, Sellers shall have the right (but not the obligation), to supplement or amend the Schedules hereto (each a “Schedule Supplement”) with information that relates to events which occured after the date of this Agreement. If, as a result of the information contained in a Schedule Supplement, Buyer has the right to terminate this Agreement but does not elect to terminate this Agreement within 15 Business Days of its receipt of such Schedule Supplement, then Buyer shall be deemed to have irrevocably waived any right to terminate this Agreement with respect to such information and, further, shall have irrevocably waived its right to be indemnified, held harmless or defended under Article IX with respect to such information; provided, however, that the information included in any Schedule Supplement giving rise to the Buyer’s right to terminate under Article VIII is not attributable to the actions of the Sellers or the Sellers’ Representative, and provided further, that, the Schedule Supplements shall not operate to change or alleviate the Sellers’ obligations to satisfy (or obtain a waiver from the Buyer) the conditions to the Buyer’s obligations at Closing.

ARTICLE VII

CONDITIONS TO THE CLOSING

Section 7.1 Conditions to Buyer’s Obligations. Buyer’s obligation to consummate the transactions contemplated hereby at the Closing is subject to the satisfaction (or waiver in writing by Buyer) at or prior to Closing of the following conditions precendent (Schedule Supplements shall not operate to change or alleviate the following conditions):

(a) Representations and Warranties. The representations and warranties concerning the Company, CDS, and the Sellers contained in this Agreement shall be true and correct as of the Closing Date as though made at and as of the Closing Date and shall not omit to state any fact necessary in order to make the statements and information contained therein not misleading.

(b) Covenants. The Company, CDS, the Sellers’ Representative, and Sellers shall have performed and complied with their respective covenants and agreements required to be performed, satisfied or complied with by them hereunder on or prior to the Closing.

(c) Approvals. All Consents necessary to permit the Company, CDS, and Sellers to perform the transactions contemplated hereby (including a waiver of default pursuant to the change of control provision under the Promissory Note by and between Cardiostaff Corporation and Regions Bank dated as of May 21, 2015) shall have been duly obtained, made or given, shall be in form and substance reasonably satisfactory to Buyer, shall not be subject to the satisfaction of any condition that has not been satisfied or waived and shall be in full force and effect.

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(d) No Prohibition. No Action shall have been instituted or threatened or claim or demand made against the Company, CDS, a Seller or Buyer seeking to restrain or prohibit, or to obtain damages with respect to, the consummation of the transactions contemplated hereby, and no Law or Order shall be in effect, or shall have been issued, enacted, entered, promulgated or enforced by a Governmental Entity, that restrains, enjoins or otherwise prohibits the consummation of the transactions contemplated hereby.

(e) Material Adverse Effect. Since the Statement Date, there shall have been no Material Adverse Effect.

(f) Deliveries. Buyer shall have received from each Seller or Sellers’ Representative the documents listed in Section 2.4(a) and Section 2.4(b).

(g) Proceedings. The form and substance of all certificates, assignments and other documents and insutruments hereunder shall be reasonably satisfactory to Buyer and its counsel.

(h) Amendment of CDS Related Party Notes. Each of the Notes Payable listed in Schedule 7.1(h) between CDS and certain related parties of CDS shall have been amended, in a writing satisfactory to the Buyer, by the parties thereto such that the interest rate paid by CDS pursuant to each note is 4% per annum.

Section 7.2 Conditions to Sellers’ Obligations. Sellers’ obligation to consummate the transactions contemplated hereby at the Closing is subject to the satisfaction (or waiver in writing by Sellers’ Representative) at or prior to Closing of the following conditions precendent:

(a) Representations and Warranties. The representations and warranties of Buyer contained in this Agreement shall be true and correct as of the Closing Date as though made at and as of the Closing Date, and shall not contain any untrue statement or omit to state any fact necessary in order to make the statements and information contained therein not misleading.

(b) Covenants. Buyer shall have performed and complied with its covenants and agreements required to be performed, satisfied or complied with by it hereunder on or prior to the Closing.

(c) No Prohibition. No Action shall have been instituted or threatened or claim or demand made against the Company, CDS, a Seller or Buyer seeking to restrain or prohibit, or to obtain damages with respect to, the consummation of the transactions contemplated hereby, and no Law or Order shall be in effect, or shall have been issued, enacted, entered, promulgated or enforced by a Governmental Entity, that restrains, enjoins or otherwise prohibits the consummation of the transactions contemplated hereby.

(d) Deliveries. Seller shall have received from Buyer the Purchase Price in accordance with Section 2.4.

(e) Proceedings. The form and substance of all certificates, assignments and other documents and insutruments hereunder shall be reasonably satisfactory to Sellers’ Representative and its counsel.

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ARTICLE VIII 

TERMINATION OF AGREEMENT

Section 8.1 Events of Termination. This Agreement may be terminated and the transactions contemplated hereby may be abandoned, at any time prior to the Closing:

(a) by the mutual written consent of Buyer and the Sellers’ Representative;

(b) by Buyer, if the Sellers have materially breached or materially failed to comply with any of their respective representations, warranties, covenants or agreements contained in this Agreement and such breach, if capable of being cured, remains uncured for more than 15 days after Buyer shall have given notice to the Company of such breach or failure to comply;

(c) by the Sellers’ Representative, if Buyer has materially breached or materially failed to comply with any of its representations, warranties, covenants or agreements contained in this Agreement and such breach, if capable of being cured, remains uncured for more than 15 days after the Sellers’ Representative shall have given notice to Buyer of such breach or failure to comply;

(d) by Buyer if any of the conditions set forth in Section 7.1 shall not have been satisfied, complied with or performed (or waived in writing by Buyer) on or prior to November 30, 2017, or another date agreed in writing between the Parties (the “Termination Date”); provided, however, that if any of such conditions is not satisfied solely as a result of the breach by Buyer of its representations, warranties, covenants or agreements contained in this Agreement, then Buyer shall not have the right to terminate this Agreement pursuant to this clause (d); provided, that Buyer may extend the Termination Date for additional periods of time not to exceed sixty (60) days in the aggregate, in its sole discretion;

(e) by the Sellers’ Representative if any of the conditions set forth in Section 7.2 shall not have been satisfied, complied with or performed (or waived in writing by the Sellers’ Representative) on or prior to the Termination Date; provided, however, that if any of such conditions is not satisfied as a result of the breach by the Sellers of their respective representations, warranties, covenants or agreements contained in this Agreement, then the Sellers’ Representative shall not have the right to terminate this Agreement pursuant to this clause ©; or

(f) by Buyer or the Sellers’ Representative, if there shall be in effect a final nonappealable Order restraining, enjoining or otherwise prohibiting the consummation of the transactions contemplated hereby.

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Section 8.2 Effect of Termination. Termination of this Agreement pursuant to this Article VIII shall terminate all liabilities and obligations of the Parties and there shall be no liability hereunder on the part of any Party, except that Section 6.5 and Section 6.6, this Section 8.2 and ARTICLE IX and Section 10.14 shall survive any termination of this Agreement. Notwithstanding the foregoing, the termination of this Agreement pursuant to this ARTICLE VIII shall shall not relieve any Party of any liability for any inaccuracy or breach of any representation or warranty or any breach or nonperformance of any covenant or obligation hereunder prior to such termination and any Losses in connection therewith, and any such termination shall not be deemed to be a waiver of any available remedy for any such inaccuracy, breach or nonperformance.

ARTICLE IX
INDEMNITY

Section 9.1 Sellers’ Indemnification. Subject to the terms and conditions in this Section 9, Sellers, jointly and severally (except as otherwise set forth in Section 10.12), shall indemnify, defend and hold harmless Buyer, its Affiliates and all of their respective shareholders, partners, members, directors, officers, employees, attorneys and other agents and Representatives from and against any and all Liabilities, Actions, judgments, settlements and Liens (including costs of investigation and defense and reasonable attorney and other professional advisor and consulting fees and expenses) (collectively, “Losses”) incurred or suffered by the Company or any such person (collectively, the “Buyer Indemnified Parties”) based upon, attributable to or resulting from:

(a) any breach of any representation or warranty of the Sellers contained in this Agreement or any certificate delivered by the Sellers’ Representative or Sellers pursuant to this Agreement or any Transaction Document;

(b) the breach by the Sellers’ Representative or Sellers of any covenant or agreement made by the Sellers in this Agreement or any certificate delivered by the Sellers’ Representative or Sellers pursuant to this Agreement or any Transaction Document;

(c) any fees, commissions or similar payments by any Person having acted or claiming to have acted, directly or indirectly, as a broker, finder or financial advisor for the Company, CDS, or any Seller in connection with the transactions contemplated by this Agreement or any Transaction Document;

(d) the existence of any Liabilities or Indebtedness of the Company and/or CDS arising from a period, event, or circumstance prior to Closing, that is not included in the Assumed Liabilities or that is in excess of the Liabilities Cap;

(e) Seller Transaction Expenses, unless paid by the Buyer at Closing as a Relief Payment;

(f) any Action brought by any Seller or Affiliate or shareholder of any Seller against the Buyer or the Company or CDS arising out of or in relation to this Agreement and the transactions contemplated hereunder;

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(g) any Action or penalty brought by any Governmental Entity arising out of or in relation to any facts or occurrences existing on or before the Closing Date;

(h) any Action brought by any Employee, candidate for employment, or former employees arising out of or in relation to any facts or occurrences existing on or before the Closing Date;

(i) any other Action (other than with respect to any Assumed Liabilities) brought by any Person arising out of or in relation to any facts or occurrences existing on or before the Closing Date; and

(j) any condition relating to professional liability, medical malpractice liability, product liability or arising from any product or service produced or provided by the Company or CDS prior to the Closing Date.

Section 9.2 Buyer’s Indemnification. Buyer shall indemnify and hold harmless each Seller from and against any and all Losses incurred or suffered by any such Person based upon, attributable to or resulting from (a) any breach or alleged breach of any representation or warranty of Buyer contained in this Agreement; or (b) any breach or alleged breach by Buyer of any covenant or agreement made by Buyer in this Agreement.

Section 9.3 Indemnification Procedure.

(a) The Party seeking indemnification under this Article IX (the “Indemnified Party”) shall give prompt notice to the Party against whom indemnity is sought (the “Indemnifying Party”) of its claim (a “Claim Notice”) for indemnity, including the commencement of any Action by any third party in respect of which indemnity may be sought described in Section 9.4.. The Claim Notice shall set out in reasonable detail the item of Loss to which such Indemnified Party claims indemnification hereunder. The failure by an Indemnified Party to give such notice shall not release, waive or otherwise affect the Indemnifying Party’s obligations hereunder, except to the extent the Indemnifying Party can demonstrate actual prejudice as a result of such failure.

(b) In the event that the Indemnifying Party shall object to the indemnification of an Indemnified Party in respect of any claim or claims specified in any Claim Notice (other than any Third Party Claim described in Section 9.4), the Indemnifying Party shall, within thirty (30) days after receipt by the Indemnifying Party of such Claim Notice, deliver to the Indemnified Party a notice to such effect, specifying in reasonable detail the basis for such objection, and the Indemnifying Party and the Indemnified Party shall, within the forty-five (45) day period beginning on the date of receipt by the Indemnified Party of such objection, attempt in good faith to agree upon the rights of the respective parties with respect to each of such claims to which the Indemnifying Party shall have so objected. If the Indemnified Party and the Indemnifying Party shall succeed in reaching agreement on their respective rights with respect to any of such claims, the Indemnified Party and the Indemnifying Party shall promptly prepare and sign a memorandum setting forth such agreement. Should the Indemnified Party and the Indemnifying Party be unable to agree as to any particular item or items or amount or amounts within such time period, then the Indemnified Party shall be permitted to submit such dispute in accordance with the provisions as set forth in Section 10.9.

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Section 9.4 Third Party Claims.

(a) If a claim by a third party is made against any Indemnified Party with respect to which the Indemnified Party intends to seek indemnification hereunder for any Loss under this ARTICLE IX (a “Third-Party Claim”), the Indemnified Party shall promptly after receiving notice thereof notify the Indemnifying Party of such claim. The failure by an Indemnified Party to promptly give such notice shall not release, waive or otherwise affect the Indemnifying Party’s obligations with respect thereto except to the extent the Indemnifying Party can demonstrate prejudice as a result of such failure. The Indemnifying Party shall have the right, but not the obligation, at its sole cost and expense, subject to the provisions of this Section 9.3, to defend against, conduct and control any Action with respect to the Third Party Claim, through counsel of its own choice reasonably satisfactory to the Indemnified Party, unless the nature of the Third Party Claim creates an ethical conflict or otherwise makes it inadvisable for the same counsel to represent the Indemnified Party and the Indemnifying Party. If the Indemnifying Party has elected to defend against, conduct and control any Third Party Claim it shall within ten (10) Business Days of the Indemnified Party’s notice of such Third Party Claim (or sooner, if the nature of the Third Party Claim so requires) notify the Indemnified Party of its intent to do so and that the Indemnifying Party will indemnify the Indemnified Party from and against the entirety of any Losses the Indemnified Party may suffer resulting from, arising out of, relating to, in the nature of, or caused by the Third-PartyClaim. If the Indemnifying Party elects not to defend against, conduct and control any such Third Party Claim or fails to notify the Indemnified Party of its election as herein provided, the Indemnified Party may defend against, conduct and control such Third Party Claim. If the Indemnifying Party shall assume the defense of any Third Party Claim, the Indemnifying Party shall keep the Indemnified Party reasonably apprised of the status of the claim, liability or expense and any resulting suit, proceeding or enforcement action and shall furnish the Indemnified Party with such documents and information filed or delivered in connection with such claim, liability or expense as the Indemnified Party may reasonably request, and may compromise or settle such Third Party Claim; provided, however, that the Indemnifying Party shall give the Indemnified Party advance notice of any proposed compromise or settlement. No Indemnified Party or Indemnifying Party may compromise or settle any Third-Party Claim for which it is seeking indemnification hereunder without the written consent of the Indemnifying Party or Indemnified Party, as the case may be, which consent shall not be unreasonably withheld, conditioned or delayed. If the Indemnifying Party shall assume the defense of any Third Party Claim as provided herein, the Indemnifying Party shall conduct the claim diligently and permit the Indemnified Party to participate in, but not control, the defense of any such action or suit through counsel chosen by the Indemnified Party; provided, however, that the fees and expenses of such counsel shall be borne and promptly paid by the Indemnified Party; provided, however, that such Indemnified Party shall be entitled to participate in any such defense with separate counsel at the expense of the Indemnifying Party if in the opinion of counsel to the Indemnified Party a conflict exists between the Indemnified Party and the Indemnifying Party and the waiver of any such conflict of interest by the Indemnified Party would materially and adversely effect the Indemnified Party in the written opinion of such counsel; and provided, further, until such time as the Indemnifying Party has delivered a notice of intent to defend a Third Party Claim to the Indemnified Party, the Indemnified Party shall undertake the defense of such claim, liability or expense and the Indemnifying Party shall promptly reimburse the Indemnified Party for the reasonable expenses of defending such Third Party Claim. The Indemnifying Party may not assume the defense of any Third Party Claim if (i) such claim involves any allegation of criminal conduct or breach of fiduciary duty, (ii) such claim is solely for injunctive relief; provided, that if such claim includes a request for injunctive relief, the Indemnifying Party may assume the defense of such claim provided that the Indemnifying Party and the Indemnified Party shall have joint control of the defense of the portion of such claim relating to the request for injunctive relief. If the Indemnifying Party elects not to control or conduct the defense or prosecution of a Third-Party Claim, the Indemnifying Party nevertheless shall have the right to participate in the defense or prosecution of any Third-Party Claim and, at its own expense, to employ counsel of its own choosing for such purpose.

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(b) The Parties shall reasonably cooperate in the defense or prosecution of any Third Party Claim, with such cooperation to include (i) the retention and the provision of the Indemnified Party’s records and information that are reasonably relevant to such Third-Party Claim, and (ii) the making available of employees on a mutually convenient basis for providing additional information and explanation of any material provided hereunder.

Section 9.5 Obligation to Set Off. For the period beginning as of the date hereof and continuing until the Escrow Release Date, subject to the Cap on limitations set forth herein, any amounts awarded to Buyer Indemnified Parties pursuant to an indemnification Claim under Section 9.1 shall be paid in the following order: (i) deducted from funds collected by the Buyer as Pre-Closing Accounts Receivable; (ii) deducted through cancellation of Consideration Shares held in escrow pursuant to the Escrow Agreement (based on the market value of the Consideration Shares on the date of cancellation). For purposes of clarity, no Seller shall be obligated to make any cash payment to Buyer to satisfy an indemnification Claim under this Section 9 due to any Loss by Buyer has suffered under this Agreement until all of the amounts available under the Pre-Closing Accounts Receivable and the Consideration Shares have been exhausted.

Section 9.6 Survival of Representations and Warranties. All representations, warranties, covenants and obligations in this Agreement and any Transaction Document will survive for 36 months following the Closing Date; provided, however, that the representations and warranties made in (i) Sections 3.1-3.4, 3.10, 4.1, 4.2 and 4.4 shall survive the Closing Date indefinitely; (ii) Sections 3.18, 3.19, and 3.20 shall survive until the 6 year anniversary of the Closing Date; and (iii) Section 3.21 (Taxes) shall survive for the applicable period of limitation under federal and state laws relating thereto (as such may be extended by waiver). Claims based upon Fraud shall survive for the applicable statute of limitations. Notwithstanding anything to the contrary, any claim of indemnification pursuant to this ARTICLE IX asserted on or before the expiration of the relevant time period will survive until resolved by the parties or judicially determined.

Section 9.7 Indemnity Cap. Notwithstanding the indemnfication limitations set forth in Section 9.6, Sellers’ aggregate Liability for any indemnification Claims arising under Section 9.1(a) of this Agreement shall not exceed $5,000,000.

Section 9.8 Payer Agreements. Notwithstanding any of the foregoing limitations with respect to Buyer Indemnified Party’s right to indemnification Claims herein, no Seller shall be subject to any indemnification Claim arising from the failure of CDS to obtain the necessary third-party consent to assign any Payer Agreement.

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ARTICLE X

MISCELLANEOUS

Section 10.1 Entire Agreement. This Agreement and its Schedules, contain the entire agreement among the Parties with respect to the transactions contemplated hereby and thereby and supersede all prior agreements or understandings among the parties with respect to the subject matter hereof and thereof. In the event of any inconsistency between the statement in the body of this Agreement and Schedules to this Agreement, the statements in the body of this Agreement will control.

Section 10.2 Descriptive Headings; Joint Drafting. Descriptive headings are for convenience only and shall not control or affect the meaning or construction of any provision of this Agreement. Except as otherwise expressly provided in this Agreement, the singular includes the plural and the plural includes the singular and a reference in this Agreement to an Article, Section, Exhibit, Appendix or Schedule is to the articles, sections, exhibits or schedules, if any, of this Agreement. A reference to a party to this Agreement or any other agreement or document shall include such party’s successors and permitted assigns. The Parties are each represented by legal counsel and have participated jointly in the negotiation and drafting of this Agreement. In the event an ambiguity or question of intent or interpretation arises, this Agreement shall be construed as if drafted jointly by the Parties, and no presumption or burden of proof shall arise favoring or disfavoring any party by virtue of the authorship of any provisions of this Agreement.

Section 10.3 Notices. Any and all notices, requests, demands or other communications required to be given pursuant to this Agreement by any party shall be in writing and shall be validly given or made to the applicable party if served personally, certified or registered, postage prepaid, return receipt requested, sent by facsimile transmission (with confirmation of successful transmission) or electronic mail, receipt confirmed. If the notice, request, demand or other communications are served personally, service shall be conclusively deemed made at the time of service. If the notice, request, demand or other communications are sent by facsimile transmission or electronic mail, service shall be conclusively deemed made the first (1^st) Business Day following successful transmission or upon confirmation of receipt from the recipient. If the notice, demand or other communications are given by mail, service shall be conclusively deemed made four (4) Business Days after deposit in the United States mail, addressed to the applicable party to whom the notice, demand or other communication is to be given, and when received if delivered by hand or overnight courier service or certified or registered mail on any Business Day. Notices shall be provided to the following addresses (any of which may be changed upon like notice to the other parties):

If to Buyer, to:

Cardiostaff

4014 Medical Parkway

Austin, TX 78756

United States

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with a copy to (which will not constitute notice to Buyer):

Proskauer

Suites 1701-1705, 17/F

Two Exchange Square

8 Connaught Place

Central, Hong Kong

Telephone: (212) 969-3000

Fax: (212) 969-2900

email: YTal@proskauer.com

Attention: Yuval Tal

If to Sellers or Sellers’ Representative (which shall constitute notice to all Sellers), to:

Timothy J. Lohman

605 Pheasant Meadow

Liberty Hill, TX 78642

Telephone: 512-800-0776

email: timlohman@att.net

with a copy to (which will not constitute notice to Sellers or Sellers’ Representative):

O’Neil, Cannon, Hollman, DeJong & Laing

Attn: JB Koenings 

111 E. Wisconsin Avenue, Suite 1400

Milwaukee, WI 53202 

Facsimile: 414-276-6581

E-Mail: JB.Koenings@wilaw.com

Section 10.4 Counterparts. This Agreement may be executed in any number of counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument. Any counterpart or other signature delivered by facsimile shall be deemed for all purposes as being an effective and valid execution and delivery of this Agreement by that party.

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Section 10.5 Benefits of Agreement. All of the terms and provisions of this Agreement shall be binding upon and inure to the benefit of the parties to this Agreement and their respective successors and assigns. This Agreement is for the sole benefit of the parties to this Agreement (including the Buyer Parent) and not for the benefit of any third party except, with respect to Article IX, the Indemnified Parties.

Section 10.6 Amendments and Waivers. No modification, amendment or waiver of any provision of, or consent required by, this Agreement, nor any consent to any departure from the terms of this Agreement, shall be effective unless it is in writing and signed by the parties to this Agreement; provided, that prior to the Closing the consent of the Sellers’ Representative shall be sufficient to evidence the consent of all Sellers hereunder. Any modification, amendment, waiver or consent shall be effective only in the specific instance and for the purpose for which it is given and shall not extend to any prior or subsequent default, misrepresentation, or breach of warranty or covenant hereunder or affect in any way any rights arising by virtue of any prior or subsequent such occurrence.

Section 10.7 Assignment. This Agreement and the rights and obligations under this Agreement and all Transaction Documents shall not be assignable or transferable by any party to this Agreement or any other Transaction Document without the prior written consent of the other party thereto; provided that Buyer may unilaterally assign all or any of its rights under this Agreement or any other Transaction Document to any Affiliate or Subsidiary of Buyer and, following the Closing, in whole or in part to any Person acquiring all or any portion of the Assets of the Company or its Subsidiaries; provided, however, that no such assignment shall relieve Buyer of any of its obligations under this Agreement. The Company and Sellers hereby agree that Buyer may unilaterally grant a security interest in its rights and interests under this Agreement or any of the other Transaction Documents to its lenders, and the Company and Sellers will sign a consent with respect thereto if so requested by Buyer or its lenders.

Section 10.8 Enforceability. It is the desire and intent of the parties to this Agreement that the provisions of this Agreement shall be enforced to the fullest extent permissible under the laws and public policies applied in each jurisdiction in which enforcement is sought. Accordingly, if any particular provision of this Agreement shall be adjudicated to be invalid or unenforceable, the provision shall be deemed amended to delete therefrom the portion adjudicated to be invalid or unenforceable, with the deletion to apply only with respect to the operation of the provision in the particular jurisdiction in which the adjudication is made.

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Section 10.9 GOVERNMENT LAW; JURISDICTION; WAIVER OF JURY. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK AS APPLIED TO AGREEMENTS AMONG NEW YORK RESIDENTS ENTERED INTO AND TO BE PERFORMED ENTIRELY WITHIN THE STATE OF NEW YORK. THE STATE OR FEDERAL COURTS LOCATED WITHI THE STATE OF NEW YORK SHALL HAVE EXCLUSIVE JURISDICTION OVER ANY AND ALL DISPUTES BETWEEN THE PARTIES HERETO, WHETHER IN LAW OR EQUITY, ARISING OUT OF OR RELATING TO THIS AGREEMENT AND THE AGREEMENTS, INSTRUMENTS AND DOCUMENTS CONTEMPLATED HEREBY AND THE PARTIES CONSENT TO AND AGREE TO SUBMIT TO THE EXCLUSIVE JURISDICTION OF SUCH COURTS. EACH OF THE PARTIES HEREBY WAIVES AND AGREES NOT TO ASSERT IN ANY SUCH DISPUTE, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY CLAIM THAT (I) SUCH PARTY IS NOT PERSONALLY SUBJECT TO THE JURISDICTION OF SUCH COURTS, (II) SUCH PARTY AND SUCH PARTY’S PROPERTY IS IMMUNE FROM ANY LEGAL PROCESS ISSUED BY SUCH COURTS OR (III) ANY LITIGATION OR OTHER PROCEEDING COMMENCED IN SUCH COURTS IS BROUGHT IN AN INCONVENIENT FORUM. THE PARTIES HEREBY AGREE THAT MAILING OF PROCESS OR OTHER PAPERS IN CONNECTION WITH ANY SUCH ACTION OR PROCEEDING IN THE MANNER PROVIDED IN Section 10.3, OR IN SUCH OTHER MANNER AS MAY BE PERMITTED BY LAW, SHALL BE VALID AND SUFFICIENT SERVICE THEREOF AND HEREBY WAIVE ANY OBJECTIONS TO SERVICE ACCOMPLISHED IN THE MANNER HEREIN PROVIDED. EACH OF THE PARTIES TO THIS AGREEMENT HEREBY IRREVOCABLY WAIVES, AND AGREES TO CAUSE ITS SUBSIDIARIES TO WAIVE, ALL RIGHT TO A TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.

Section 10.10 Specific Performance. Each of the Parties acknowledges and agrees that the other parties would be damaged irreparably in the event that any of the provisions of this Agreement are not performed in accordance with their specific terms or otherwise are breached or violated. Accordingly, notwithstanding any other provision of this Agreement, each of the Parties agrees that, without posting bond or any other undertaking, the other parties will be entitled to an injunction or injunctions to prevent breaches or violations of the provisions of this Agreement and to enforce specifically this Agreement and the terms and provisions hereof (including the obligation of the parties to close the transactions contemplated by this Agreement) in any action instituted in any court of the United States or any state thereof having jurisdiction over the parties and the matter in addition to any other remedy to which it may be entitled, at law or in equity. Each Party further agrees that, in the event of any action for specific performance in respect of such breach or violation, it will not assert the defense that a remedy at law would be an adequate remedy.

Section 10.11 Delays or Omissions. It is agreed that no delay or omission to exercise any right, power or remedy accruing to any party, upon any breach, default or noncompliance by any other party under this Agreement, shall impair any such right, power or remedy, nor shall it be construed to be a waiver of any such breach, default or noncompliance, or any acquiescence therein, or of or in any similar breach, default or noncompliance thereafter occurring. It is further agreed that any Consent of any kind or character on any party’s part of any breach, default or noncompliance under this Agreement, or any waiver on such party’s part of any provisions or conditions of the Agreement must be in writing and shall be effective only to the extent specifically set forth in such writing. All remedies, either under this Agreement, or otherwise afforded to any party, shall be cumulative and not alternative.

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Section 10.12 Joint and Several Liability. Any liability or payment obligation of any Seller hereunder shall be the joint and several liability of each of Sellers hereunder; provided, however, that any liability or payment obligation arising from any breach of Section 6.5, Section 6.10, or Section 6.11, by any Seller shall only be the several liability of such Seller committing the breach and the remaining non-breaching Sellers shall not be jointly liable.

Section 10.13 Disclosure Schedules. The Schedules will not vary, change or alter the language of the representations and warranties contained in this Agreement other than creating exceptions thereto which are responsive to the language of the warranties and representations contained in this Agreement. No exceptions to any representations or warranties disclosed on one Schedule shall constitute an exception to any other representations or warranties made in this Agreement unless the exception is disclosed as provided herein on each such other applicable Schedule or cross-referenced in such other applicable section or Schedule.

Section 10.14 Sellers’ Representative.

(a) Each of Sellers hereby designates and appoints, authorizes and empowers the Sellers’ Representative (and each successor appointed in accordance with Section 10.14(c)) to perform all such acts, on behalf of each Seller, as are required, authorized or contemplated by this Agreement and the transactions contemplated hereby, which will include the power and authority to:

(i) execute and deliver all documents necessary or desirable to carry out the intent of this Agreement and any other Transaction Document;

(ii) determine whether the conditions to Closing in ARTICLE VII hereof have been satisfied;

(iii) serve as the named party with respect to any claim for indemnification by any Buyer Indemnified Party and to resolve such claims as Sellers’ Representative in its sole good faith discretion deems appropriate;

(iv) give and receive any and all notices pursuant to this Agreement or any other Transaction Document;

(v) act on behalf of Sellers with respect to any matter concerning the Escrow Agreement, the Consideration Shares, or the Pre-Closing Accounts Receivable;

(vi) grant any consent or approval under this Agreement or any other Transaction Document;

(vii) make all other elections or decisions contemplated by this Agreement or any other Transaction Document;

(viii) approve waivers, clarifications or post-Closing modifications to this Agreement or any other Transaction Document which do not materially and adversely affect the rights of any Seller disproportionately to the other Sellers;

(ix) receive any payments contemplated hereunder on behalf of Sellers;

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(x) resolve or otherwise defend any Buyer Indemnified Party as described herein, acting in good faith, including, without limitation, (A) to resolve a disputed claim for indemnification asserted by any such Buyer Indemnified Party pursuant to ARTICLE IX, and (B) to defend any such Buyer Indemnified Party from any Loss under ARTICLE IX, including, where appropriate, retaining legal counsel or other advisors in furtherance of that defense; and

(xi) perform each such act and thing whatsoever that Sellers’ Representative may be or is required to do, or which Sellers’ Representative in it sole good faith discretion determines is desirable to do, pursuant to or to carry out the intent of this Agreement and any other Transaction Document, and to amend, modify or supplement any of the foregoing.

Each Seller hereby acknowledges and agrees that Sellers’ Representative shall be the only person authorized to take any action so required, authorized or contemplated by this Agreement by any Seller and, without limiting the generality of the foregoing, each Seller hereby acknowledges and agrees that Buyer shall be required to provide notices to Sellers pursuant to this Agreement solely to Sellers’ Representative. Each Seller further designates and appoints Sellers’ Representative as its agent for service of process with respect to any disputes regarding or arising out of this Agreement or the transactions contemplated hereby. Any action taken by Sellers’ Representative in the name of or on behalf of any Seller in connection with any matter arising under this Agreement shall be binding upon such Seller and its successors, agents and heirs.

(b) The grant of authority provided for in this Section 10.14: (i) is coupled with an interest and is being granted, in part, as an inducement to the Sellers and Buyer to enter into this Agreement and will be irrevocable and survive the death, incompetency, bankruptcy or liquidation of any Seller and will be binding on any successor thereto; and (ii) subject to this Section 10.14, may be exercised by Sellers’ Representative acting by signing as Sellers’ Representative of any Seller.

(c) If Sellers’ Representative or its heirs or personal representatives, as the case may be, advise Sellers that it is unavailable to perform it duties hereunder, within three (3) business days of notice of such advice, an alternative Sellers’ Representative will be appointed by Sellers. Any references in this Agreement to Sellers’ Representative shall be deemed to include any duly appointed successor Sellers’ Representative.

(d) In dealing with this Agreement and any instruments, agreements or documents relating thereto, and in exercising or failing to exercise all or any of the powers conferred upon Sellers’ Representative hereunder or thereunder, (i) Sellers’ Representative will not assume any, and will incur no, liability whatsoever to any Seller because of any error in judgment or other act or omission performed or omitted hereunder or in connection with this Agreement; and (ii) Sellers’ Representative will be entitled to rely on the advice of counsel, public accountants or other independent experts experienced in the matter at issue, and any error in judgment or other act or omission of Sellers’ Representative pursuant to such advice will not subject Sellers’ Representative to liability to any other Seller.

(e) Buyer may conclusively and absolutely rely, without inquiry, and until the receipt of written notice of a change of Sellers’ Representative under Section 10.3, may continue to rely, without inquiry, upon the actions of Sellers’ Representative as the actions of each Seller in all matters referred to in this Section 10.14.. Each Seller hereby authorizes the other parties hereto to disregard any notice delivered or other action taken by any Seller pursuant to this Agreement except for Sellers’ Representative.

Section 10.15 Guaranty. Buyer Parent is a executing this Agreement for the purpose of guaranteeing the obligations of the Buyer hereunder.

* * * * *

-43-

IN WITNESS WHEREOF, each of the parties to this Agreement has caused this Agreement to be duly executed and delivered as of the day and year first above written.

SELLERS:
CARDIAC ADVANCEMENTS, LLC
By:	/s/ Lori Watt
	Lori Watt, Director
By:	/s/ Susan J. Wendland
	Susan J. Wendland, Director
By:	/s/ Timothy L. Lohman
	Timothy L. Lohman, Director
By:	/s/ Samuel E. Bradt
	Samuel E. Bradt, Director
By:	/s/ Thomas M. Gazzana
	Thomas M. Gazzana, Director

/s/ Douglas A. Labuda

Douglas A. Labuda

/s/ Leonard Labuda

Leonard Labuda

/s/ Ronald Ciocca

Ronald Ciocca

/s/ Bradley Labuda

Bradley Labuda

/s/ Scott Labuda

Scott Labuda

/s/ Pamela Skelton

Pamela Skelton

-44-

The undersigned hereby acknowledges its appointment as Sellers’ Representative and its willingness to fulfill the duties of Sellers’ Representative as contemplated by this Agreement.

SELLERS’ REPRESENTATIVE:

/s/ Timothy L. Lohman

Timothy L. Lohman

-45-

BUYER:

G MEDICAL INNOVATIONS USA INC.

/s/ Yacov Geva

By:

Name: Yacov Geva

Title: Director

The undersigned is signing this Agreement solely for the purposes of guaranteeing all of the obligations of Buyer:

BUYER PARENT:

G MEDICAL INNOVATIONS HOLDINGS LTD.

/s/ Yacov Geva

By:

Name: Yacov Geva

Title: Chief Executive Officer

-46-

Schedule 1.1

VOLUNTARY ESCROW AGREEMENT

See attached.

Attachment to Schedule 1.1

THE PARTY DESCRIBED IN ITEM 1 OF THE SCHEDULE (Company)

and

THE PARTIES DESCRIBED IN ITEM 2 OF THE SCHEDULE (Holders)

VOLUNTARY RESTRICTION DEED

Attachment to Schedule 1.1

THIS DEED is made the [*] day of [*] 2017

PARTIES

THE PARTY DESCRIBED IN ITEM 1 OF THE SCHEDULE (Company);

AND

THE PARTIES DESCRIBED IN ITEM 2 OF THE SCHEDULE (Holders).

RECITALS

A. The Holders are the registered holders of the Restricted Securities, each in the number listed in Item 4 of the Schedule.

B. The Holders have agreed to hold the Restricted Securities as set out in this Deed.

IT IS AGREED as follows:

1. DEFINITION AND INTERPRETATION

1.1 Definitions

In this Deed:

ASX means ASX Limited (ACN 008 624 691) or the Australian Securities Exchange (as the context requires).

ASX Listing Rules means the listing rules of the ASX.

Business day has the meaning set out in the ASX Listing Rules.

Closing Date means the closing date of the Purchase Agreement.

Corporations Act means the Corporations Act 2001 (Cth).

Deed and this Deed means the deed constituted by this document.

Escrow Period means the period set out in Item 3 of the schedule.

Holding Lock has the meaning given to that term in Section 2 of the ASX Settlement Operating Rules.

Party means a party to this Deed.

Purchase Agreement means the Stock Purchase Agreement, dated on or about the date of this Deed, by and between the Company’s wholly owned subsidiary G Medical Innovations USA Inc. and the Holders.

Restricted Securities means the securities set out in Item 4 of the schedule and any securities attaching to or arising out of those securities unless the Company notifies the Holders otherwise.

Share Registry means the entity engaged by the Company from time to time to maintain the register of members.

1

Attachment to Schedule 1.1

1.2 Interpretation

In this Deed unless the context otherwise requires:

(a) headings are for convenience only and do not affect its interpretation;

(b) an obligation or liability assumed by, or a right conferred on, 2 or more Parties binds or benefits all of them jointly and each of them severally;

(c) the expression person includes an individual, the estate of an individual, a corporation, an authority, an association or joint venture (whether incorporated or unincorporated), a partnership and a trust;

(d) a reference to any party includes that party’s executors, administrators, successors and permitted assigns, including any person taking by way of novation;

(e) a reference to any document (including this Deed) is to that document as varied, novated, ratified or replaced from time to time;

(f) a reference to any statute or to any statutory provision includes any statutory modification or re-enactment of it or any statutory provision substituted for it, and all ordinances, by-laws, regulations, rules and statutory instruments (however described) issued under it;

(g) words importing the singular include the plural (and vice versa) and words indicating a gender include every other gender;

(h) reference to parties, clauses, schedules, exhibits or annexures are references to parties, clauses, schedules, exhibits and annexures to or of this Deed and a reference to this Deed includes any schedule, exhibit or annexure to this Deed;

(i) where a word or phrase is given a defined meaning, any other part of speech or grammatical form of that word or phrase has a corresponding meaning;

(j) a reference to time is to Western Standard Time as observed in Perth, Western Australia;

(k) where an action is required to be undertaken on a day that is not a Business Day it shall be undertaken on the next Business Day;

(l) a reference to a payment is to a payment by bank cheque or such other form of cleared funds the recipient otherwise allows in the relevant lawful currency specified; and

(m) a reference to $ or dollar is to the lawful currency of the Commonwealth of Australia.

2. ESCROW RESTRICTIONS

2.1 Restrictions

(a) Subject to clause 2.2, during the Escrow Period, none of the Holders may do any of the following:

(i) dispose of, or agree or offer to dispose of, the Restricted Securities;

2

Attachment to Schedule 1.1

(ii) create, or agree or offer to create, any security interest in the Restricted Securities; or

(iii) do, or omit to do, any act if the act or omission would have the effect of transferring effective ownership or control of the Restricted Securities.

(b) The Parties acknowledge that, during the Escrow Period:

(i) the power to exercise, or control the exercise of, a right to vote attached to a Restricted Security will not be affected; and

(ii) the Holders may participate in any return of capital made by the Company.

2.2 Exceptions to the Escrow

(a) Each Holder may during the Escrow Period:

(i) indicate that it will accept an offer to buy or transfer;

(ii) agree to transfer or sell; and

(iii) transfer or sell,

any Restricted Securities to a bidder pursuant to a takeover offer under Chapter 6 of the Corporations Act where holders of at least 50% of the bid class securities in the capital of the Company (excluding the Restricted Securities) have accepted the takeover offer. Each of the Holders acknowledges and agrees that the provisions of this Deed will continue to apply to the Restricted Securities in the event that such takeover offer does not become unconditional.

(b) The Restricted Securities may be transferred or cancelled during the Escrow Period as part of a scheme of arrangement under Part 5.1 of the Corporations Act.

(c) The Restricted Securities may be transferred or cancelled during the Escrow Period as part of any other reorganisation of capital undertaken by the Company, including any share buy-back or capital reduction.

3. HOLDING LOCK

3.1 Acknowledgement

Subject to clause 2.2 of this Deed, the Parties acknowledge and agree that during the Escrow Period:

(a) the Restricted Securities will be subject to a Holding Lock;

(b) the Company may apply the Holding Lock and prevent a transfer of the Restricted Securities by either:

(i) requesting the Share Registry to apply the Holding Lock; or

3

Attachment to Schedule 1.1

(ii) refusing to register a paper-based transfer document in respect of the Restricted Securities; and

(c) in the event it is determined by agreement or by any legal proceeding or otherwise pursuant to the Purchase Agreement that any of the Restricted Securities will be used to cover any losses suffered by the Company or its wholly owned subsidiary, the Company may cancel such Restricted Securities pro-rata from the number of each Holder’s number of Restricted Securities listed on Item 4 of the Schedule.

3.2 Notification

If the Company requests the Share Registry to apply a Holding Lock in respect of the Restricted Securities or refuses to register a transfer of the Restricted Securities in accordance with clause 3.1, the Company must inform the Holders in writing of such request or refusal and the reason(s) for it within 5 Business Days of the request or refusal.

4. COMPANY OBLIGATIONS

4.1 The Company warrants that:

(a) the Restricted Securities are not ‘restricted securities’ as that term is defined in the ASX Listing Rules; and

(b) it has provided ASX with all relevant information and made all necessary disclosures in relation to the voluntary escrow arrangements under this Deed and has complied with the ASX Listing Rules at all times.

4.2 The Company agrees that it will comply with the requirements of the ASX Listing Rules in relation to this Deed at all times, including but not limited to the disclosure requirement under Rule 3.10A of the ASX Listing Rules.

5. CONSEQUENCES OF BREACHING THIS DEED

5.1 Prevention of breach

If it appears to the Company that a Holder may breach this Deed, the Company may take all steps necessary to prevent the breach or to enforce this Deed.

5.2 Consequence of breach

If a Holder breaches this Deed, each of the following applies:

(a) the Company must take the steps necessary to enforce the Deed, or to rectify the breach; and

(b) the Company must refuse to acknowledge, deal with, accept or register any sale, assignment, transfer or conversion of any of the Restricted Securities. This is in addition to other rights and remedies of the Company.

4

Attachment to Schedule 1.1

6. NOTICES

6.1 Notices in writing

Each notice authorised or required to be given to a Party shall be in legible writing and in English addressed to the Party’s address set out in clause 6.2 (or such other address nominated in accordance with clause 6.3).

6.2 Initial address of Parties

The initial address of the Parties shall be as set out in the schedule.

6.3 Change of Address

Each Party may from time to time change its address by giving notice pursuant to clause 6.1 to the other Parties.

6.4 Receipt of notice

Any notice given pursuant to this Deed will be conclusively deemed to have been received:

(a) in the case of personal delivery, on the actual day of delivery;

(b) if sent by regular post, six Business Days from and including the day of posting;

(c) if sent by priority post, four Business Days from and including the day of posting;

(d) if sent by post to or from a place outside Australia, ten Business Days after the date of posting; or

(e) if sent by facsimile, when a facsimile confirmation receipt is received indicating successful delivery,

but if the delivery or receipt is on a day that is not a Business Day or is after 5:00 pm (addressee’s time) it is regarded as received at 9:00 am on the following Business Day.

7. FURTHER ASSURANCE

Each Party shall sign, execute and do all deeds, acts, documents and things as may reasonably be required by the other Party to effectively carry out and give effect to the terms and intentions of this Deed subject to such conduct not being in contravention of the Corporations Act, ASX Listing Rules or any other applicable law.

8. SOLE UNDERSTANDING

This Deed (and to the extent referred to, the Purchase Agreement) shall constitute the sole understanding of the Parties with respect to the subject matter and replaces all other agreements with respect thereto.

5

Attachment to Schedule 1.1

9. SEVERANCE

If any provision or part of a provision of this Deed is held or found to be void, invalid or otherwise unenforceable in accordance with its terms (whether in respect of a particular party or generally), it will be deemed to be severed to the extent that it is void or to the extent of voidability, invalidity or unenforceability, but the remainder of that provision will remain in full force and effect and all other provisions which are self-sustaining and capable of separate enforcement without regard to the invalid provision shall be and continue to be valid and forceful in accordance with their terms.

10. VARIATION

11. NO MODIFICATION OR ALTERATION OF THE TERMS OF THIS DEED SHALL BE BINDING UNLESS MADE IN WRITING DATED SUBSEQUENT TO THE DATE OF THIS DEED AND DULY EXECUTED BY THE PARTIES. POWER OF ATTORNEY

Each of the Holders hereby grants the Company power of attorney to make such amendments to this Deed as are necessary to comply with or satisfy the requirements and conditions of ASX, the Australian Securities & Investments Commission or both.

12. CONSENTS

Unless this Deed expressly provides otherwise, a consent under this Deed may be given or withheld in the absolute discretion of the Party entitled to give the consent and to be effective must be given in writing.

13. WAIVERS

Without limiting any other provision of this Deed, the Parties agree that:

(a) failure to exercise or enforce, or a delay in exercising or enforcing, or the partial exercise or enforcement of, a right, power or remedy provided by law or under this Deed by a Party does not preclude, or operate as a waiver of, the exercise or enforcement, or further exercise or enforcement, of that or any other right, power or remedy provided by law or under this Deed;

(b) a waiver given by a Party under this Deed is only effective and binding on that Party if it is given or confirmed in writing by that Party; and

(c) no waiver of a breach of a term of this Deed operates as a waiver of another breach of that term or of a breach of any other term of this Deed.

14. GOVERNING LAW

This Deed shall be governed by and construed in accordance with the law from time to time in the State of Western Australia and the Parties agree to submit to the non-exclusive jurisdiction of the courts of Western Australia and the courts which hear appeals therefrom.

6

Attachment to Schedule 1.1

15. COUNTERPARTS

This Deed may be entered into in any number of counterparts (including by way of facsimile or electronic mail) and by the parties on separate counterparts, each of which when executed and delivered will be an original, but all of which will together constitute one and the same instrument.

16. TERMINATION

The Parties agree that at the end of the Escrow Period, the Restricted Securities shall be released to the Holders immediately and no restrictions shall apply to the sale or disposal of such securities and this Deed shall automatically terminate.

7

Attachment to Schedule 1.1

SCHEDULE

Item 1 Company’s name and notice details

G Medical Innovations Holdings Limited (ARBN 617 204 743)

Address:	C/- Otsana Pty Ltd, 108 Outram Street, WEST PERTH WA 6005
Telephone:	+1 345 749 2000
Attention:	Company Secretary

Item 2 Holders’ names and notice details

Name:

Address:

Attention:

Item 3 Escrow Period

6 months commencing on the Closing Date, but subject to any extensions as provided in the Purchase Agreement in connection with any claims and indemnities.

Item 4 Particulars of Restricted Securities

[number] fully paid ordinary shares in the capital of the Company. Each Holder shall initially own such number of Restricted Securities as described below:

Holder Number of Restricted Securities

8

Attachment to Schedule 1.1

EXECUTED by the Parties as a deed.
EXECUTED BY	)
G MEDICAL INNOVATIONS HOLDINGS LTD	)
ARBN 617 204 743	)
in accordance with its constituent	)
documents and place of incorporation:	)
Signature of director		Signature of director/company secretary*
Name of director		Name of director/company secretary*
*please delete as applicable
SIGNED by [INDIVIDUAL] in the presence of:	)
	)
	)
	)
	)
Signature of witness		Signature
Name of witness
EXECUTED BY	)
[COMPANY NAME]	)
[COMPANY NUMBER]	)
in accordance with its constituent	)
documents and place of incorporation:	)
Signature of director		Signature of director/company secretary*
Name of director		Name of director/company secretary*
*please delete as applicable

9

Schedule 2.4(d)

LIST OF RELIEF PAYMENTS TO BE MADE AT CLOSING

The attached is herein incorporated by reference.

The amounts provided for the Liabilities and Indebtedness of the Company and CDS set forth on the attached hereto are current as of the date set forth therein.

Attachment to Schedule 2.4(d)

Immediate Payments to be Made at Closing
October 25, 2017

N/P - Cardiostaff
Roger DeMark	10,000.00
Alan E. & Kay E. Gustin Living Trust	1,250.00
Nicolas J. & Denise L. Shane 2004 Living Trust	12,748.20
Wellenstein 2006 Living Trust	7,462.33
Thomas Zoeller	3,217.18
Cardiac Advancements, LLC	53,302.54
Antares LLC	23,078.94
Cardiac Leasing LLC	6,087.00
Nicolas J. & Denise L. Shane 2004 Living Trust	4,565.28
Total N/P Cardiostaff		121,711.47
N/P - Cardiac Diagnostic Services Code
Douglas Labuda                              DAL4	4,040.94
Douglas Labuda                              DAL3	3,459.06
Leonard Labuda                              LJL2	4,040.94
Leonard Labuda                              LJL4	3,459.06
Muirfield Metals                              MM1	4,000.00
Muirfield Metals                              MM2	12,000.00
Muirfield Metals                              MM3	6,027.06
Douglas Labuda                              DAL2	31,486.47
Leonard Labuda                               LJL3	31,486.47
Total N/P Cardiac Diagnostic Services		100,000.00
Other - Cardiostaff
Timothy Lohman	50,000.00
Susan Wendland	50,000.00
Total N/P Cardiac Diagnostic Services		100,000.00
A/P - Cardiostaff
Canon Copier	285.14
CardioCom	9,131.97
Central Texas Refuse	622.45
Complete Medical Management	300.00
Datrix	22,853.10
DMS-Service LLC	14,733.70
Federal Express	7,470.49
GCS Technnologies	2,933.58
Grande Communications	6,205.95
H and M Austin Management, Inc.	6,474.31
John R. Chance	1,500.00
Lori A. Watt	85,000.00
Lynn Medical	6,727.19
Oneil Cannon Hollman DeJong & Laing	51,450.06
Safeshred	657.00

Scrypt, Inc.	1,013.16
Select Premium Services	6,592.60
Square Bottle Solutions, LLC	4,962.50
Verizon Wireless	2,755.49
Winter, Kloman, Moter & Repp	10,000.00
Total A/P – Cardiostaff		241,668.69
A/P - Cardiac Diagnostic Services
Augustus Beck, MD	2,333.33
American Insurance	1,500.00
AMI Cardiac Monitoring	3,600.00
AT&T Mobilitity	7,172.31
EME Company	777.60
F.H. Medical Services	7,864.37
Friedman, Leavitt & Assoc.	7,242.00
Hahn, Loeser & Parks	3,964.58
Lynn Medical	7,205.63
One Independence Place	21,604.29
PNC Bank	29,729.45	92,993,56
Total A/P - Cardiac Diagnostic Services

COMBINED TOTALS OF PAYMENTS TO BE MADE AT CLOSING 656,373.72

Schedule 2.5(a)

SELLER PERCENTAGE SHARE

Seller	Percentage of Consideration Shares			Percentage of Pre-Closing Accounts Receivable
Cardiac Advancements, LLC		55	%		55	%
Douglas A. Labuda		18	%		18	%
Leonard Labuda		4.5	%		4.5	%
Ronald Ciocca		9	%		9	%
Bradley Labuda		4.5	%		4.5	%
Scott Labuda		4.5	%		4.5	%
Pamela Skelton		4.5	%		4.5	%

Schedule 3.2(ii)

CONSENTS

Third-party consent is required in the event of any change in control under the following Contracts:

1. Corporate Resolution to Borrow/Grant Collateral dated as of May 21, 2015 by Company.

2. Promissory Note by and between Company and Regions Bank dated as of May 21, 2015 (“Regions Note”).

3. Commercial Guaranty by Timothy L. Lohman dated as of May 21, 2015.

4. Commercial Guaranty by Susan J. Wendland dated as of May 21, 2015.

5. Commercial Security Agreement by and between Company and Regions Bank dated as May 21, 2015

6. Agreement to Provide Insurance by and between Company and Regions Bank dated as May 21, 2015

7. Notice to Final Agreement by and between Company and Regions Bank dated as May 21, 2015

Third-party consent is required in the event of any assignment by CDS under the following Contracts:

1. AT&T Machine to Machine Wireless Communications Agreement dated as of July 10, 2015 by and between CDS and AT&T Mobility II, LLC

2. Image Management Agreement dated as of July 16, 2014 by and between CDS and C.C.T. Financial.

3. Cost-Per-Copy Agreement dated as of September 27, 2012 by and between CDS and C.C.T. Financial.

4. Equipment Lease Agreement dated as of February 25, 2013 by and between CDS and Wells Fargo Financial Leasing, Inc.

Schedule 3.4

CAPITALIZATION OF THE COMPANY IMMEDIATELY PRIOR TO THE CLOSING

Name	Number of Shares (common)
Cardiac Advancements, LLC		165,000
Douglas A. Labuda		54,000
Leonard Labuda		13,500
Ronald Ciocca		27,000
Bradley Labuda		13,500
Scott Labuda		13,500
Pamela Skelton		13,500
TOTAL		300,000

Schedule 3.5

FINANCIAL DISCLOSURES

CDS Financial Statements from fiscal years 2016 and 2017 are unaudited and do not conform to accrual basis accounting methods. Revenue was booked using a cash basis method. No accrual adjustments were made.

The accounts receivable shown on the Financial Statements from both Company and CDS are not representative of fully collectible amounts. Such accounts receivable collections may be significantly reduced by insurance company discounts, allowances, copays, deductibles, uncollectible debt, and uncollectible accounts receivable which has accrued over time.

Schedule 3.6

(inclusive of Schedule 3.6(a)(iii) and Schedule 3.6(b))

DISCLOSED LIABILITIES

Schedule 3.6(a)(iii)

CONTRACTS LIABILITIES

The Payer Agreements require third-party consent to assign. CDS did not obtain such third-party consents prior to the Merger. CDS’ failure to obtain such third-party consents shall in no way be deemed to be a breach of this Section 3.6.

Schedule 3.6(b)

ASSUMED LIABILITIES

The attached is incorporated herein.* The amount owed under the Regions Note set forth on the attachment is to be updated pursuant to the payoff statement attached hereto.

The UCC Filing referenced on Schedule 3.10 is incorporated herein.

The amounts provided for the Liabilities and Indebtedness of the Company and CDS are current as of the dates set forth therein.

Attachment to Schedule 3.6(b)

	Balance as of 10/25/17		Payments at Closing			Balance Due		Related Party
Cardiostaff N/P
Regions Bank		74,672.64		0.00			74,672.64
Alian Farnham #3		26,680.95		0.00			26,680.95
Alian Farnham #4		39,318.74		0.00			39,318.74
Roger DeMark		35,152.47		10,000.00			25,152.47
Gustin - Al		51,250.00		1,250.00			50,000.00
Gustin - Bill		46,203.09		0.00			46,203.09
Nicolas Shane 1		46,263.08		12,748.20			33,514.88
Wellenstein		57,462.33		7,462.33			50,000.00
Thomas Zoeller		3,217.18		3,217.18			0.00
Master Note		398,702.54		53,302.54			345,400.00		398,702.54
Antares		302,823.68		23,078.94			279,744.74		302,823.68
Cardiac Leasing		39,461.54		6,087.00			33,374.54		39,461.54
Nicolas Shane 2		31,526.75		4,565.28			26,961.47
Hehl		25,000.00		0.00			25,000.00
Lending Club		36,318.79		0.00			36,318.79		36,318.79
CS A/P (See Attached)		564,178.58		241,668.69			322,509.89		261,648.96
Accrued Payroll		225,062.00		100,000.00			125,062.00		225,062.00
Total Cardiostaff Debt		2,003,294.36		463,380.16			1,539,914.20		1,264,017.51
CDS N/P (See Attached)		984,441.11		100,000.00			884,441.11		884,441.11
CDS A/P (See Attached)		232,272.84		92,993.56			139,279.28		0
Total CDS Debt		1,216,713.95		192,993.56			1,023,720.39		884,441.11
Total Combined Debt		3,220,008.31		656,373.72			2,563,634.59		2,148,458.62
Maximum		3,220,000.00		657,080.19
Over (Under)		8.31		(706.47	)

NOTE: Balance Due as of 10/25/17 includes Accrued Interest through 9/30/17