Entry Into a Material Definitive Agreement.
On May 31, 2019 (the “Closing Date”),
Conversion Labs, Inc. (the “Company”) entered into that certain operating agreement (the “Operating Agreement”)
of Conversion Labs RX, LLC, a Puerto Rico limited liability company (“CLRX”), by and among the Company, Conversion
Labs PR, LLC (“CLPR”), Harborside Advisors, LLC (“Harborside”), Happy Walters, an individual (“Walters”),
and David Hanig, an individual (“Hanig”, and together with CLPR, Harborside and Walters, each a “Member”
and together the “Members”). Pursuant to the Operating Agreement, the Company, through CLPR, owns 51% of the membership
interests of CLRX.
Operating Agreement governs the operations of CLRX and provides for CLRX's management by a Board of Managers (the “Board”)
of at least three members. Among the provisions of the Operating Agreement are limitations and restrictions on the disposition
of membership interests by a Member, including right of first refusal of the Members and an option for both the Company and the
Members to purchase membership interests that are being offered by a Member.
On the Closing Date, the Company, CLRX and Specialty Drugstore Inc. (d/b/a GoGoMeds), an Ohio corporation
(“GoGoMeds”), entered into that certain non-exclusive Strategic Partnership Agreement (the “Strategic Partnership
Agreement”) whereby CLRX will use its e-commerce platform to offer online physician consultations and sell prescription
drugs directly to consumers in all 50 states through GoGo Meds existing online pharmacy infrastructure. CLRX will pay GoGoMeds
a dispensing fee per prescription dispensed based on the number of prescriptions dispensed. For any business outside the scope
of the Strategic Partnership Agreement referred to GoGoMeds through an introduction by CLRX, GoGoMeds agrees to share 50% of net
profits with CLRX in perpetuity.
Strategic Partnership Agreement may be terminated upon a material breach by either party if not cured within thirty days’
notice of receipt of written notice of such breach.
On the Closing Date, and in connection
with the Operating Agreement, the Company entered into two consulting agreements, with each of Harborside (the “Harborside
Consulting Agreement”) and Walters (the “Walters Consulting Agreement” together with the Haborside Consulting
Agreement the “Consulting Agreements”).
Pursuant to the Walters Consulting Agreement,
Walters will advise the Company with regards to capital markets strategy and will assist the Company with the general operations
of the Company’s business, including marketing and branding efforts, and with recruiting and managing influencers.
Pursuant to the Harborside Consulting
Agreement, Harborside will assist the Company with the general operations of the business, including but not limited to
marketing and branding of products and liaising with the Company’s business partners, representatives or affiliates in
connection the Company’s online sale of prescription drugs directly to consumers.
the Consulting Agreements are both for a term of three (3) years (the “Term”). As compensation for their services,
each of Harborview and Walters can earn up to 5,000,000 restricted shares of common stock of the Company (the “Common Stock”),
reaching certain of revenue milestones set
forth in each of the Consulting Agreements.
The foregoing descriptions of the Operating
Agreement, the Consulting Agreements and the Strategic Partnership Agreement do not purport to be complete and are qualified in
their entirety by reference to the Consulting Agreements, copies of which are filed as Exhibits 10.1, 10.2, 10.3 and 10.4, respectively,