Exhibit 10.1


 


 


AMENDED AND RESTATED


AGREEMENT AND PLAN OF MERGER


by and among


Red
Cat Holdings, Inc.


Teal
Acquisition I Corp.,


Teal
Drones, Inc.


And


The
stockholders of Teal Drones, Inc.


Dated as of August 31, 2021




    	 



    	 



    

 


AGREEMENT and
plan of merger


THIS AMENDED AND RESTATED
AGREEMENT AND PLAN OF MERGER, dated as of August 31, 2021 (this “Agreement”), is entered into by and among Red Cat
Holdings, Inc., a Nevada corporation (the “Parent”), Teal Acquisition I Corp., a Delaware corporation and a wholly-owned
subsidiary of Parent (the “Purchaser”) and Teal Drones, Inc., a Delaware corporation (the “Company”)
and the undersigned shareholders of the Company (collectively, the “Stockholders”). Parent, Purchaser,
Company and the Stockholders are each a “party” and together are “parties” to this Agreement. All
capitalized terms used in this Agreement shall have the meanings assigned to such terms in Section 8.4 or as otherwise defined
elsewhere in this Agreement, unless the context clearly indicates otherwise.


recitals


WHEREAS, The Parties
entered into a prior Agreement and Plan of Merger dated as of July 13, 2021 (the “Original Agreement”); and


 


WHEREAS, the Parties desire
to amend and restate in its entirety the Original Agreement as described hereinbelow effective as of the Effective Date.


 


WHEREAS, the Company is party
to certain contracts, approvals, rights and technology as well as certain licenses and assets, including the right to sell unmanned aerial
vehicles (drones) and related services to certain agencies and instrumentalities of the United States government;


WHEREAS, Company has issued
shares of its capital stock, par value $0.00001 per share (consisting of Common Stock (the “Company Common Stock”),
Series Seed Exchange Preferred Stock (the “Company Series Seed Preferred Stock”), Series Seed Prime Exchange Preferred
Stock (the “Company Series Seed Prime Preferred Stock”), Series A Exchange Preferred Stock (the “Company Series
A Preferred Stock”), Series A-1 Exchange Preferred Stock (the “Company Series A-1 Preferred Stock”) and Series
A-2 Preferred Stock (the “Company Series A-2 Preferred Stock”), collectively the “Shares”) and,
upon closing of the transactions contemplated hereby, Parent will issue, pursuant to the terms and conditions of this Agreement, shares
of Parent Common Stock, par value $0.001 per share (the “Parent Common Stock”) and Parent Series C Convertible Preferred
Stock, par value $0.001 per share, (the “Parent Series C Preferred”, and together with the Parent Common Stock, the
“Parent Shares”), of Parent, at, for Parent Shares issued at the Closing, the Agreed Parent Share Price, and, for the
Earn-Out Shares, at the Earn-Out Share Price, all as set forth in this Agreement, without interest, subject to any withholding of Taxes
required by applicable Law equal to a total of up to $30 million, based upon and subject to, in the case of the Earn Out Amount, meeting
certain milestones (the “Earn Out Conditions”) upon achieving certain revenue goals for sale of the Company’s
Golden Eagle products and services (the “Earn Out Amount”), all as set forth in this Agreement.


WHEREAS, the Stockholders
collectively own approximately 92% of the issued and outstanding capital stock of the Company and desire to authorize and approve this
Agreement and the transactions contemplated herein and agree to vote their Shares for the transactions contemplated hereby;


WHEREAS, upon the terms and
subject to the conditions set forth in this Agreement, the Purchaser will be merged with and into the Company (the “Merger”),
with the Company continuing as the Surviving Corporation (as such term is defined below), in accordance with the applicable provisions
of the Delaware General Corporation Law (the “DGCL”), whereby each issued and outstanding Share (other than Shares
to be cancelled in accordance with Section 2.1(b) and Dissenting Shares) will be converted into the right to receive the Parent
Shares;


WHEREAS, the board of directors
of the Company (the “Company Board”) has (i) determined that the transactions contemplated by this Agreement,
including the Merger, are fair to and in the best interests of the Company and its stockholders, (ii) approved, adopted and declared advisable
this Agreement and the transactions contemplated hereby, including the Merger and (iii) recommended that the Company’s stockholders,
and approve this Agreement and the Merger (the “Company Board Recommendation”);


WHEREAS, the boards of directors
(or applicable committee thereof) of the Parent and the Purchaser have, upon the terms and subject to the conditions set forth herein,
(i) determined that the transactions contemplated by this Agreement, including the Merger, are fair to and in the best interests
of Parent and the Purchaser and their respective stockholders and (ii) approved, adopted and declared advisable this Agreement and the
transactions contemplated hereby, including this Agreement and the Merger;


WHEREAS, as a condition to
and inducement of the Parent’s and the Purchaser’s willingness to enter into this Agreement, simultaneously with the execution
of this Agreement, George Matus, (a “Key Employee”) has accepted an offer of employment with the Parent, the Purchaser
or an affiliate of Parent or the Purchaser and has executed and delivered all Contracts and other documents required by Parent and the
Purchaser relating to such employment, which employment and Contracts shall become effective from and after, and shall be conditioned
upon, the Closing;


WHEREAS, as a condition to
and inducement of the Parent’s and the Purchaser’s willingness to enter into this Agreement, simultaneously with the execution
of this Agreement, the Key Employee has executed and delivered to the Parent and the Purchaser Non-Competition and Non-Solicitation Agreement,
dated as of the date hereof (each, a “Non-Competition Agreement”); and


WHEREAS, the Parent, Purchaser,
Stockholders and the Company desire to make certain representations, warranties, covenants and agreements in connection with the Merger
and also to prescribe various conditions to the Merger;


agreement


NOW, THEREFORE, in consideration
of the mutual covenants and premises contained in this Agreement and for other good and valuable consideration, the receipt and adequacy
of which are hereby acknowledged, the parties to this Agreement agree as follows:


Article
1

The Merger


1.1
The Merger.


(a)
Upon the terms and subject to the conditions set forth in this Agreement, and in accordance
with the applicable provisions of the DGCL, at the Effective Time,
the Purchaser shall be merged with and into the Company.
As a result of the Merger, the separate corporate existence of the Purchaser
shall cease, and the Company shall continue as the surviving corporation of the Merger
(the “Surviving Corporation”). The Merger
shall have the effects set forth in the applicable provisions of the DGCL. Without limiting
the generality of the foregoing, at the Effective Time, all of the property, rights, privileges,
immunities, powers and franchises of the Company and the Purchaser
shall vest in the Surviving Corporation, and all of the debts, liabilities and duties of
the Company and the Purchaser shall become the debts, liabilities
and duties of the Surviving Corporation.


(b)
At the Effective Time, the certificate of incorporation of the Surviving
Corporation shall, by virtue of the Merger and all other applicable action by Parent and the Surviving
Corporation, be amended so as to read in its entirety in the form authorized and approved by the Parent, until thereafter changed
or amended as provided therein or by applicable Law.
In addition, the bylaws of the Surviving Corporation shall be amended so as to read in their entirety
in the form set forth authorized and approved by the Parent, until thereafter changed or amended
as provided therein, in the certificate of incorporation of the Surviving Corporation or by applicable
Law.


(c)
The directors of the Purchaser immediately prior to the Effective
Time shall, from and after the Effective Time, become the directors of the Surviving
Corporation, each to hold office in accordance with the certificate of incorporation and bylaws of the Surviving
Corporation until their respective successors shall have been duly elected, designated or qualified,
or until their earlier death, resignation or removal in
accordance with the certificate of incorporation and bylaws of the Surviving Corporation. The officers
of the Purchaser immediately prior to the Effective Time,
from and after the Effective Time, shall continue as the officers of the Surviving
Corporation, each to hold office in accordance with the certificate of incorporation and bylaws of the Surviving
Corporation until their respective successors shall have been duly elected, designated or qualified,
or until their earlier death, resignation or removal in
accordance with the certificate of incorporation and bylaws of the Surviving Corporation.


(d)
If at any time after the Effective Time, the Surviving Corporation
shall determine, in its sole discretion, or shall be advised, that any deeds, bills of sale,
instruments of conveyance, assignments, assurances or any other actions or
things are necessary or desirable to vest, perfect or confirm
of record or otherwise in the Surviving Corporation its
right, title or interest in, to or under any of the rights,
properties or assets of either of the Company or the Purchaser
acquired or to be acquired by the Surviving Corporation
as a result of, or in connection with, the Merger or otherwise
to carry out this Agreement, then the officers and directors of the Surviving
Corporation shall be authorized to execute and deliver, in the name and on behalf of either the Company
or the Purchaser, all such deeds, bills of sale, instruments of conveyance, assignments
and assurances and to take and do, in the name and on behalf of each of such corporations or otherwise,
all such other actions and things as may be necessary or desirable to vest, perfect or
confirm any and all right, title or interest in, to and under such rights, properties or
assets in the Surviving Corporation or otherwise to carry out this Agreement.


1.2
Closing and Effective Time of the Merger.
The closing of the Merger (the “Closing”) will take place at 10:00 a.m., New York City time, on a date to be specified
by the parties (the “Closing Date”), such date to be no later than the second Business Day after satisfaction or waiver
of all of the conditions set forth in Article 6 (other than those conditions that by their terms are to be satisfied at the Closing,
but subject to the fulfillment or written waiver (where permitted by applicable Law) of those conditions at the Closing), at the Law Office
of Harvey Kesner, 500 Fifth Avenue, Suite 938, NY, NY 10036, unless another time, date or place is agreed to in writing by the parties
hereto. On the Closing Date, or on such other date as Parent and the Company may agree to in writing, the Purchaser and the Company shall
cause an appropriate certificate of merger (the “Certificate of Merger”) to be executed and filed with the Secretary
of State of the State of Delaware in accordance with the relevant provisions of the DGCL and shall make all other filings or recordings
required under the DGCL. The Merger shall become effective at the date and time the Certificate of Merger shall have been duly filed with
the Secretary of State of the State of Delaware or such other date and time as is agreed upon by the parties and specified in the Certificate
of Merger (such date and time, the “Effective Time”).


Article
2

MERGER CONSIDERATION: Conversion of Securities IN THE MERGER


2.1        
Fixed Consideration. (i) In consideration of the Merger and the other obligations of Company and Stockholders as set forth
in this Agreement, Parent shall pay or otherwise provide to Stockholders the following consideration (the “Purchase Price”
or “Merger Consideration”):


(a)    
Closing Consideration. On the Closing Date, Purchaser shall deliver in consideration for 100% of the issued and outstanding
capital stock of the Company in accordance with Section 2.2 hereof: Fourteen Million Dollars (US$14,000,000), (the “Closing Merger
Consideration”) payable in shares of Parent Common Stock and Parent Series C Stock (the “Stock Consideration”)
minus (A) the amount required to be paid under a senior secured promissory note in favor of Decathlon/DA4 (the “Secured
Note”) to be issued at closing by Parent in the amount of up to Two Million Dollars ($2,000,000), (B) the value of the shares
of Parent Common Stock to be issued to Decathlon pursuant to that certain Consent Agreement, dated as of even date with this Agreement,
between Decathalon and the Company; (C) any other indebtedness of the Company (it being agreed and acknowledged that the shares of Parent
Common Stock issuable to Decathlon Alpha IV, L.P., a Delaware limited partnership (“DA4”) pursuant to that certain
Share Issuance Agreement between the Company and DA4 shall (i) be treated as indebtedness of the Company for purposes of this Section
2.1(a); and (ii) be issued directly to DA4), and (D) any Working Capital deficit of the Company, calculated at the Closing Date VWAP (the
“Agreed Parent Share Price”). The Parent Series C Preferred shall have the rights, privileges and preferences as set
forth in the form of the Series C Preferred Certificate of Designation attached hereto as Exhibit 2.1(a), (the “Certificate of
Designation”) which Certificate of Designation Parent shall have filed with the Secretary of State of the State of Nevada prior
to the Closing Date and which shall be effective prior to the Closing, and shall be substantially equivalent to Common Stock in all respects
other than the limitations on voting and conversion required in order to conform with, and shall automatically convert into Common Stock
of Parent upon the approval of NASDAQ (the “NASDAQ Approval”), to the issuance of in excess of 19.99% of the outstanding
Parent Common Stock in accordance with NASDAQ Rule 5635(d).


(b)
Earn-Out Consideration. (i) Following the Closing Date, the Parent shall deliver in consideration for 100% of the issued
and outstanding capital stock of the Company in accordance with Section 2.1(b)(iii) hereof, additional shares of Parent Common Stock (the
“Earn-Out Shares”) as follows, calculated for Golden Eagle sales and service income (i.e., net revenues calculated
in accordance with GAAP) received by the Company during the twenty-four month period beginning on the first day after the Closing Date
(the “Earn-Out Period”) with a gross margin of at least 30% (“Qualified Sales”), as follows:


		·	A total of $16,000,000 in Earn Out Shares if aggregate Qualified Sales during the Earn-Out Period shall
have equaled or exceed $36 million; or



		·	A total of $10,000,000 in Earn Out Shares if Qualified Sales during the Earn-Out Period shall have equaled
at least $24 million but less than $36 million; or



		·	A total of $ 4,000,000 in Earn Out Stares if Qualified Sales during the Earn-Out Period shall have equaled
at least $18 million but less than $24 million.



 


(ii) the
Parent shall calculate the Qualified Sales for the Earn-Out Period and deliver such amount to the Stockholders within thirty (30) days
of the end of the Earn-Out Period (the “Earn-Out Determination Date”). Unless a majority in interest of the Stockholders
notify the Parent in writing (the “Qualified Sales Dispute Notice”) within ten (10) business days after receipt of the Qualified
Sales amount that the Stockholders disagree with the Qualified Sales Amount, the Qualified Sales amount delivered to the Stockholders
shall be conclusive and binding. The Qualified Sales Dispute Notice shall include reasonable details of the disagreement and the reasons
therefor. In the event Stockholders provide the Parent with any Qualified Sales Dispute Notice, the Parent shall not be required to pay
or issue any Earn-Out Shares pending resolution of such dispute. The Parent and the Stockholders shall attempt to resolve their differences
with respect to the Qualified Sales within ten (10) business days after the Parent’s receipt of the Qualified Sales Dispute Notice.
Any disputes regarding the Qualified Sales not resolved by the Parent and the Stockholders within such 10-day period will be resolved
by a national accounting firm (the “Arbitrator Accounting Firm”). The Arbitrator Accounting Firm’s determination of
the Qualified Sales amount shall be conclusive and binding upon the parties. The fees and expenses of the Arbitrator Accounting Firm in
acting under this Section shall be borne by the party that the Arbitrator Accounting Firm determines to be least correct (in net dollar
terms) in its determination of the Qualified Sales.


(iii) the
Parent shall issue the Earn Out Shares within 30 days following either the Earn-Out Determination Date or the date of resolution of any
dispute regarding Qualified Sales pursuant to Section 2.1(b)(ii) above, at the VWAP on the last day of the Earn-Out Period (the “Earn-Out
Share Price”) that Qualified Sales equal or exceed the amounts set forth herein. Qualified Sales shall be determined on an aggregate
basis achieved during the Earn-Out Period. For the absence of doubt only one payment shall be made for each level of Qualified Sales,
for example, in the event the Qualified Sales are $20,000,000 within 9 months and $30,000,000 million at the end of the Earn-Out Period,
a total payment of $10,000,000 in Shares shall be due to be paid in total. . Payment of the Earn-Out Shares shall be made to the Stockholders
as set forth on Schedule 2.1(b).


(c) Working
Capital Adjustment. The Company shall prepare and deliver to the Parent on the Closing Date a statement setting forth its calculation
of estimated Closing Working Capital,) (the “Closing Statement”) and only items set forth in the Closing Statement shall be
used to calculate the Closing Working Capital. Within sixty (60) days after the Closing Date, Parent shall prepare and deliver to Stockholders
an updated Closing Statement setting forth its actual calculation of the Closing Working Capital as of the Closing Date (the “Final
Closing Statement”). If the Working Capital of the Company as of the Closing Date is a positive number, the Purchase Price shall
not be increased. If the Working Capital of the Company as of the Closing Date is a negative number, the Purchase Price shall be decreased
dollar for dollar by the amount of the Working Capital Adjustment and shall be payable by Stockholders through a decrease in the Escrow
Shares which shall be valued at the Agreed Parent Share Price. As used herein: “Closing Working Capital” means (a) Current
Assets, less (b) Current Liabilities, determined as of the close of business on the Closing Date; “Current Assets” means the
current assets of the Company on the Closing Date and “Current Liabilities” means the current liabilities of the Company,
in each case in accordance with GAAP. Unless a majority in interest of the Stockholders notify Parent in writing (the “Dispute
Notice”) within ten (10) business days after receipt of the Final Closing Statement that Stockholders disagree with the Closing
Working Capital set forth in the Final Closing Statement, the Closing Working Capital shall be conclusive and binding on Company, Stockholders,
Purchaser and Parent. The Dispute Notice shall include reasonable details of the disagreement and the reasons therefor. In the event Stockholders
provide Parent with any Dispute Notice, Stockholders shall not be required to pay the Parent with respect to the Working Capital Adjustment
pending resolution of such dispute. Parent and Stockholders shall attempt to resolve their differences with respect to the Closing Working
Capital within ten (10) business days after Parent’s receipt of the Dispute Notice. Any disputes regarding the Closing Working Capital
not resolved by Parent and Stockholders within such 10-day period will be resolved by a national accounting firm (the “Working Capital
Arbitrator Accounting Firm”). The Working Capital Arbitrator Accounting Firm’s determination of the Closing Working Capital
shall be conclusive and binding upon the parties. The fees and expenses of the Working Capital Arbitrator Accounting Firm in acting under
this Section shall be borne by the party that the Arbitrator Accounting Firm determines to be least correct (in net dollar terms) in its
determination of the Closing Working Capital.


(d) NASDAQ
Approval. Notwithstanding anything herein to the contrary, in no event shall the Purchase Price and Earn-Out Shares issuable
pursuant to this Section 2.2 exceed 19.99% of the issued and outstanding Common Stock of the Company, as calculated on the Closing Date
and the Earn-Out Date, prior to approval.


(e) Escrow
Shares. On the Closing Date, Purchaser shall deliver to the Escrow Agent Fifteen (15%) percent of the Merger Consideration (the “Escrow
Shares”) to be held in escrow in accordance with the Escrow Agreement. For purposes of This subsection 2.1(e) (i) the Decathlon
Shares shall be considered to be Merger Consideration for this purpose of calculating the number of shares of Parent Common Stock and
Parent Series C Stock constituting the Merger Consideration; and (ii) no Decathlon Shares shall be deposited of held in escrow as Escrow
Shares, such Escrow Shares to be deposited and held as set forth in that certain Proportionate Share Agreement (as defined below) and
the Escrow Agreement delivered by the Stockholders to Purchaser at Closing.


2.2
Conversion of Securities. At the Effective Time, by virtue of the Merger and without any action on the part of the Purchaser,
the Company or the holders of any of the following securities:


(a)
Conversion of Company Common Stock. (i) Conversion of Company Common Stock.
Each holder of Shares of Company Common Stock issued and outstanding immediately prior to the Effective Time, other than Shares of Company
Common Stock to be cancelled in accordance with Section 2.2(b) and Dissenting Shares, shall be converted into the right to
receive the Closing Merger Consideration set forth opposite such holder’s name on Schedule 2.2 attached hereto, payable to
the holder, without interest, subject to any withholding of Taxes required by applicable Law, upon surrender of the certificate formerly
representing such Shares of Company Common Stock in accordance with Section 2.3 (provisions with respect to Restricted Shares
are also addressed in Section 2.5(b)).


(ii) Conversion
of Company Series Seed Preferred Stock. Each holder of Shares of Company Series Seed Preferred Stock issued and outstanding immediately
prior to the Effective Time, other than Dissenting Shares, shall be converted into the right to receive the Closing Merger Consideration
set forth opposite such holder’s name on Schedule 2.2 attached hereto, payable to the holder, without interest, subject to
any withholding of Taxes required by applicable Law, upon surrender of the certificate formerly representing such Shares of Company Series
Seed Preferred Stock in accordance with Section 2.3.


(iii) Conversion
of Company Series Seed Prime Preferred Stock. Each holder of Shares of Company Series Seed Prime Preferred Stock issued and outstanding
immediately prior to the Effective Time, other than Dissenting Shares, shall be converted into the right to receive the Closing Merger
Consideration set forth opposite such holder’s name on Schedule 2.2 attached hereto, payable to the holder, without interest,
subject to any withholding of Taxes required by applicable Law, upon surrender of the certificate formerly representing such Shares of
Company Series Seed Prime Preferred Stock in accordance with Section 2.3.


(iv) Conversion
of Company Series A Preferred Stock. Each holder of Shares of Company Series A Preferred Stock issued and outstanding immediately
prior to the Effective Time, other than Dissenting Shares, shall be converted into the right to receive the Closing Merger Consideration
set forth opposite such holder’s name on Schedule 2.2 attached hereto, payable to the holder, without interest, subject to
any withholding of Taxes required by applicable Law, upon surrender of the certificate formerly representing such Shares of Company Series
A Preferred Stock in accordance with Section 2.3.


(v) Conversion
of Company Series A-1 Preferred Stock. Each holder of Shares of Company Series A-1 Preferred Stock issued and outstanding immediately
prior to the Effective Time, other than Dissenting Shares, shall be converted into the right to receive the Merger Consideration set forth
opposite such holder’s name on Schedule 2.2 attached hereto, payable to the holder, without interest, subject to any withholding
of Taxes required by applicable Law, upon surrender of the certificate formerly representing such Shares of Company Series A-1 Preferred
Stock in accordance with Section 2.3.


(vi) Conversion
of Company Series A-2 Preferred Stock. Each holder of Shares of Company Series A-2 Preferred Stock issued and outstanding immediately
prior to the Effective Time, other than Dissenting Shares, shall be converted into the right to receive the Closing Merger Consideration
set forth opposite such holder’s name on Schedule 2.2 attached hereto, payable to the holder, without interest, subject to
any withholding of Taxes required by applicable Law, upon surrender of the certificate formerly representing such Shares of Company Series
A-2 Preferred Stock in accordance with Section 2.3.


(vii) Cancellation
of Treasury Stock and Parent-Owned Stock. All Shares that are held in the treasury of the Company, and all Shares owned of record
by Parent or any of its direct or indirect wholly-owned Subsidiaries, including the Purchaser, shall be cancelled and shall cease to exist,
with no payment being made with respect thereto.


(viii) Purchaser
Common Stock. Each share of common stock, par value $0.001 per share, of the Purchaser (the “Purchaser Common Stock”)
issued and outstanding immediately prior to the Effective Time shall be converted into and become one newly and validly issued, fully
paid and nonassessable share of common stock of the Surviving Corporation.


2.3
Payment for Securities; Surrender of Certificates.


(a)
Procedures for Surrender. As promptly as practicable after the Effective Time, the
Parent shall cause its transfer agent (the “Transfer Agent”)
to mail to each holder of record of a certificate or certificates that represented Shares
(the “Certificates”) or non-certificated
Shares represented by book-entry (“Book-Entry Shares”),
in each case, which Shares were converted into the right to receive the Merger
Consideration at the Effective Time pursuant to this Agreement:
(i) a letter of transmittal, which shall specify that delivery shall be effected, and risk of loss
and title to the Certificates shall pass, only upon delivery of the Certificates
to the Transfer Agent, and shall otherwise be in such form and have such other provisions
as the Purchaser or the Transfer Agent may reasonably specify
and (ii) instructions for effecting the surrender of the Certificates
or Book-Entry Shares in exchange for payment of the Merger Consideration. Upon surrender
of Certificates and Book-Entry Shares for cancellation to the Transfer
Agent, and upon delivery of a letter of transmittal, duly executed and in proper form, with respect to such Certificates
or Book-Entry Shares, the holder of such Certificates or Book-Entry Shares shall be entitled
to receive the Merger Consideration for each Share formerly
represented by such Certificates and for each Book-Entry Share. Any Certificates
and Book-Entry Shares so surrendered shall forthwith be cancelled. If issuance of the Merger Consideration
is to be made to a Person other than the Person in
whose name any surrendered Certificate is registered, it shall be a condition precedent of payment
that the Certificate so surrendered shall be properly endorsed or
shall be otherwise in proper form for transfer, and the Person requesting such payment shall
have paid any transfer and other similar Taxes required by reason of the issuance of the Merger
Consideration to a Person other than the registered holder of the Certificate
so surrendered and shall have established to the satisfaction of the Surviving Corporation that
such Taxes either have been paid or are not required to
be paid. Issuance of the Merger Consideration with respect to Book-Entry
Shares shall only be made to the Person in whose name such Book-Entry
Shares are registered. Until surrendered as contemplated hereby, each Certificate
or Book-Entry Share shall be deemed at any time after the Effective Time to represent only
the right to receive the Merger Consideration as contemplated by this Agreement,
without interest thereon.


(b)
Transfer Books; No Further Ownership Rights in Shares. At the Effective
Time, the stock transfer books of the Company shall be closed and thereafter there shall
be no further registration of transfers of Shares on the records of the Company.
From and after the Effective Time, the holders of Certificates
and Book-Entry Shares outstanding immediately prior to the Effective Time shall cease to
have any rights with respect to such Shares except as otherwise provided for herein
or by applicable Law. If, after the Effective Time,
Certificates are presented to the Surviving Corporation for
any reason, they shall be cancelled and exchanged as provided in this Agreement.


(c)
Withholding Rights. Parent, the Purchaser,
the Surviving Corporation and the Transfer Agent shall be
entitled to deduct and withhold from the Merger Consideration otherwise issuable pursuant to this Agreement
such amounts that Parent, the Purchaser, the Surviving
Corporation or the Transfer Agent is required to deduct and withhold with respect to the
making of such payment under the Code or any other provision of applicable Law.
To the extent that amounts are so withheld, such amounts shall be treated for all purposes of this Agreement
as having been paid to the Person in respect of which such deduction and withholding was
made.


(d)
Lost, Stolen or Destroyed Certificates. In the event that any Certificates
shall have been lost, stolen or destroyed, the Transfer
Agent shall issue in exchange for such lost, stolen or destroyed Certificates,
upon the making of an affidavit of that fact by the holder thereof, the Merger Consideration payable
in respect thereof pursuant to Section 2.1(a) hereof; provided, however,
that the Purchaser may, in its sole discretion and as a condition precedent to the payment of such
Merger Consideration, require the owners of such lost, stolen or
destroyed Certificates to deliver a bond in such sum as it may reasonably direct as indemnity
against any claim that may be made against Parent, the Purchaser,
the Surviving Corporation or the Transfer Agent with respect
to the Certificates alleged to have been lost, stolen or destroyed.


(e)
Transfer Taxes. If payment of the Merger Consideration is to be made to any Person
other than the registered owner of the applicable Shares the amount of any Transfer Taxes (whether imposed on the registered owner or
such other Person) payable on account of the transfer will be deducted from the amount of Merger Consideration to be issued to such Person,
unless satisfactory evidence of the payment of such Transfer Taxes or exemption therefrom is submitted to the Purchaser.


2.4
Dissenting Shares. Notwithstanding anything to the contrary set forth in this Agreement,
no Shares issued and outstanding immediately prior to the Effective Time and in respect of which appraisal rights shall have been perfected
in accordance with Section 262 of the DGCL in connection with the Merger (collectively, “Dissenting Shares”) shall
be converted into a right to receive that portion of the Merger Consideration otherwise payable to the holder of such Dissenting Shares
as provided in Section 2.2, but shall instead be converted into the right to receive such consideration as may be determined
to be due with respect to such Dissenting Shares pursuant to the DGCL. Each holder of Dissenting Shares who, pursuant to the provisions
of the DGCL, becomes entitled to payment of the fair value of such shares shall receive payment therefor in accordance with the DGCL (but
only after the value therefor shall have been agreed upon or finally determined pursuant to the DGCL). In the event that any holder of
Shares fails to make an effective demand for payment or fails to perfect its appraisal rights as to its Shares or any Dissenting Shares
shall otherwise lose their status as Dissenting Shares, then any such shares shall be converted into the right to receive the Merger Consideration
issuable pursuant to Section 2.2 in respect of such Shares as if such Shares had never been Dissenting Shares, in accordance with
and following the satisfaction of the applicable requirements and conditions set forth in Section 2.3. The Company shall give
Parent prompt notice (and in no event more than two Business Days) of (i) any demand received by the Company for appraisal of Shares (and
shall give Parent the opportunity to participate in all negotiations and proceedings with respect to any such demand) or (ii) any notice
of exercise by any holder of Shares of appraisal rights in accordance with the DGCL. The Company agrees that, except with Parent’s
prior written consent, it shall not voluntarily make any payment or offer to make any payment with respect to, or settle or offer to settle,
any such demand for appraisal or exercise of appraisal rights.


2.5
Treatment of Options; Restricted Stock; Warrants.


(a)
Treatment of Options.


(i)
Immediately prior to the Effective Time, each outstanding and unexercised option to purchase
Shares (each, a “Company Option”) that
is vested, was granted under any stock option plan (including, without limitation, the Company’s 2015 Equity Incentive Plan (the
“2015 Plan”)) of the Company or any other equity plan or
other Contract (collectively, the “Company Stock
Option Plans”), shall be cancelled.


(ii)
The parties hereby acknowledge that the 2015 Equity Company’s
2015 Plan shall automatically terminate and be of no further force or effect with respect to any awards thereunder or the right to receive
any shares or awards of Company stock immediately prior to the Effective Time. No vested awards
shall be continued following the Effective Time and any unvested awards shall not be subject to any vesting and shall be cancelled. 


(iii)  
The Company shall, prior to the Effective Time, take
(or cause to be taken) any and all action, and shall obtain
all such consents, as may be necessary to effect the foregoing provisions of this Section 2.4(a).


(b)
Treatment of Restricted Stock and Restricted Stock Units.


(i)
Each Share that, as of immediately prior to the Effective
Time, is subject to a risk of forfeiture, a right of repurchase in favor of the Company,
or to restrictions on transfers under the applicable award agreement or Benefit Plan, that is outstanding immediately prior to
the Effective Time under any Contract, instrument or
plan set forth in Section 3.2(b) of the Company
Disclosure Schedule (each, a “Restricted Share”) shall be converted into
the right to receive the Merger Consideration, without interest, as provided in Section 2.1(a),
such Merger Consideration to be paid to the holder of such Restricted
Share in accordance with the vesting schedule applicable to such Restricted Share, in each
case subject to all applicable withholding or other Taxes required
by applicable Law. The Company shall obtain, prior to the
Closing, the consent from each holder of a Restricted Share to
the amendment of the terms governing such Restricted Share to permit the treatment set forth in
this Section 2.4(b)(i) (unless such consent is not required under the terms of the
applicable Contract, instrument or plan).


(ii)
At the Effective Time, each award of restricted stock units with respect to Company
Common Stock (“Company RSUs”) shall automatically terminate and be of
no further force or effect with respect to any awards thereunder or the right to receive any shares or awards of Company stock immediately
prior to the Effective Time. No vested awards shall be continued following the Effective Time and any unvested awards shall not be subject
to any vesting and shall be cancelled.


(iii) The
Company shall, prior to the Effective Time, take (or cause to be taken) any and all action, and shall obtain all such consents, as may
be necessary to effect the foregoing provisions of this Section 2.4(b).


(c)
Treatment of Company Warrants.


(i)
At the Effective Time, each Company Warrant that
has not otherwise been exercised or expired shall be terminated immediately upon the Effective
Time. Neither the Surviving Corporation nor Parent shall
assume any Company Warrant that is outstanding immediately prior to the Effective
Time, whether or not then exercisable. Following the Effective
Time, no Company Warrant shall remain outstanding and, except as set forth in the preceding
sentence, no holder of a Company Warrant shall have the right to receive any consideration from
the Company, Parent or the Surviving
Corporation upon the exercise or conversion of such Company
Warrant or otherwise in respect thereof.


(ii)
The Company shall, prior to the Effective Time, take
(or cause to be taken) any and all action, and shall obtain
all such consents, as may be necessary to cause the holders of all Company Warrants that have not
otherwise been exercised or expired prior to the Effective Time
to agree to the treatment set forth in this Section 2.4(c) (including,
without limitation, providing any notices required under the Contracts relating to such Company
Warrants regarding the transaction contemplated by this Agreement).


Article
3

Representations and Warranties of the Company


Except as set forth in the
disclosure schedule delivered by the Company to the Parent and the Purchaser prior to the execution of this Agreement (the “Company
Disclosure Schedule”), which identifies items of disclosure by reference to a particular Section or Subsection of this
Agreement (provided, however, that any disclosure contained in any section of the Company Disclosure Schedule relating
to one section of this Agreement shall be deemed to be disclosed with respect to any other section of this Agreement to the extent the
relevance of such disclosure to any such representation and warranty is reasonably apparent from the descriptions contained in the Company
Disclosure Schedule to the reader without the need to review or consult additional documents), the Company hereby represents and warrants
to the Parent and the Purchaser as follows:


3.1
Organization and Qualification; No Subsidiaries.


(a)
The Company is a corporation duly organized, validly existing and in good standing under
the Laws of the State of Delaware and has all requisite corporate power and authority to own, lease
and operate its properties and assets and to conduct its business as currently conducted. The Company
is duly qualified to do business and is in good standing in each jurisdiction where the ownership, leasing or
operation of its properties or assets or the conduct
of its business requires such qualification, except where any failure to be so qualified or in
good standing, individually or in the aggregate, has not had a Company Material Adverse Effect.


(b)
The Company has delivered or caused to be delivered
or made available to the Parent and the Purchaser
accurate and complete copies of the currently effective certificate of incorporation of the Company
(the “Company Charter”) and bylaws of the Company
(the “Company Bylaws”). The Company is
not in violation of the Company Charter or the Company Bylaws.


(c)
The Company does not own or control, directly or indirectly, any interest in any other corporation, partnership, trust, joint venture,
limited liability company, association, or other business entity.


(d)
The Company neither owns nor has any relationship to nor has any Company Contract been entered into with any third party and Teal
Drones, Inc., a Utah corporation,


3.2
Capitalization.


(a)
The authorized capital stock of the Company consists of (i)
79,000,000 shares of common stock, par value $0.00001 per share (the “Company
Common Stock”), of which, as of the date of this Agreement and at the Effective Time, there are 12,380,203 shares issued
and outstanding (and no shares of Company Common Stock held in treasury), including
no Restricted Shares and (ii) 81,520,284 shares of preferred stock, par value $0.00001
per share (the “Company Preferred Stock”), 7,600,000 of which are designated
as Series Seed Preferred Stock, par value $0.00001 per share, none of which shares are issued and outstanding or reserved for future issuance
under Contract, 7,600,000 of which are designated as the Series Seed Exchange Preferred Stock, $0.00001 par value per share, 6,350,000
of which shares are issued and outstanding and none of which shares are reserved for future issuance under Contract, 5,454,545 of which
are designated as the Series Seed Prime Preferred Stock, $0.0001 par value per share, none of which shares are issued and outstanding
or reserved for future issuance under Contract, 5,454,545 of which are designated as the Series Seed Prime Exchange Preferred Stock, $0.0001
par value per share, 5,000,000 of which shares are issued and outstanding and [none] of which shares are reserved for future issuance
under Contract, 19,295,998 of which are designated as the Series A Preferred Stock, $0.0001 par value per share, none of which shares
are issued and outstanding or reserved for future issuance under Contract, 19,295,998 of which are designated as the Series A Exchange
Preferred Stock, $0.0001 par value per share, 16,782,000 of which shares are issued and outstanding and none of which shares are reserved
for future issuance under Contract, 7,981,165 of which are designated as the Series A-1 Preferred Stock, $0.0001 par value per share,
none of which shares are issued and outstanding or reserved for future issuance under Contract, 7,981,165 of which are designated as the
Series A-1 Exchange Preferred Stock, $0.0001 par value per share, 5,040,990 of which shares are issued and outstanding and none of which
shares are reserved for future issuance under Contract, and 5,337,344 of which are designated as the Series A-2 Preferred Stock, $0.0001
par value per share, 5,337,344 of which shares are issued and outstanding and none of which shares are reserved for future issuance under
Contract. All of the outstanding shares of Company Shares have been duly authorized and validly
issued and are fully paid, nonassessable and free of preemptive rights.


(b)
As of the date of this Agreement, the Company had no shares of Company Common Stock or
Company Preferred Stock reserved for or otherwise subject to issuance, except for 4,286,358
shares of Company Common Stock reserved for issuance pursuant to the exercise of outstanding Company
Options under the Company Stock Options Plans and 17,620,451
shares of Company Preferred Stock reserved for issuance pursuant to the exercise of outstanding
Company Warrants all of which Options and Warrants will be cancelled at the Effective Time as provided
in Section 2.4 hereof. 


(c)
Except for the Company Options and the Company Warrants
set forth in Section 3.2(b), as of the date
of this Agreement, there were no options, warrants or other rights, agreements, arrangements
or commitments of any character (i) relating, convertible
into or exchangeable for capital stock of any other Equity Interests
of the Company or (ii) obligating the Company to
issue, acquire or sell any Equity Interests of the Company.
Since the close of business on December 31, 2020, the Company has
not issued any shares of its capital stock or other Equity Interests or securities convertible
into or exchangeable for capital stock or other Equity Interest
of the Company.


(d)
There are no outstanding obligations of the Company (i) restricting the transfer of, (ii)
affecting the voting rights of, (iii) requiring the repurchase, redemption or
disposition of, or containing any right of first refusal with respect to, (iv)
requiring the registration for sale of or (v) granting any preemptive or
antidilutive rights with respect to, any Company Shares or other Equity Interests in the
Company.


3.3
Authority.


(a)
The Company has all necessary corporate power and corporate authority to execute and deliver
this Agreement, to perform its obligations hereunder and
to consummate the transactions contemplated hereby, including the
Merger. The execution and delivery of this Agreement by
the Company and the consummation by the Company of the transactions
contemplated hereby, including the Merger, have been duly
and validly authorized by all necessary corporate action, and no other corporate proceedings on
the part of the Company and no stockholder votes or consents
are necessary to authorize this Agreement or to consummate the transactions contemplated hereby
other than, (i) the Company Stockholder Approval
and (ii) the filing of the Certificate of Merger with the
Secretary of State of the State of Delaware in accordance with the DGCL.
The Company Board, by resolutions duly adopted by vote of those voting on such matters at a meeting
duly called and held, has, and as of the date of this Agreement not subsequently rescinded or
modified in any way, (x) determined that the transactions contemplated by this Agreement,
including the Merger, are fair to, and in the best interests
of, the Company and its stockholders, (y) approved and declared
advisable this Agreement and the transactions contemplated hereby,
including the Merger and (z)
resolved to recommend that the Company’s stockholders approve the Merger and
adopt this Agreement. This Agreement has been duly authorized
and validly executed and delivered by the Company and, assuming due authorization, execution and
delivery by the Parent and the Purchaser, constitutes a
legally valid and binding obligation of the Company, enforceable against the Company
in accordance with its terms (except as such enforceability may be limited by applicable bankruptcy, insolvency, fraudulent transfer,
reorganization, moratorium and other similar Laws affecting creditors’ rights generally and
subject to the effect of general principles of equity, whether considered in a proceeding in equity or
at law).


(b)
The Company is not a party to any stockholder rights plan or
“poison pill” agreement.


3.4
No Conflict. None of the execution, delivery or performance of this Agreement by the Company, the acceptance for payment
or acquisition of the Shares, the consummation by the Company of the Merger or any other transaction contemplated by this Agreement, or
the Company’s compliance with any of the provisions of this Agreement will (with or without notice or lapse of time, or both): (a)
subject to obtaining the Company Stockholder Approval conflict with or violate any provision of the Company Charter or Company Bylaws,
(b) assuming that all consents, approvals, authorizations and permits described in Section 3.5 have been obtained and all
filings and notifications described in Section 3.5 have been made and any waiting periods thereunder have terminated or expired,
conflict with or violate any Law applicable to the Company or any of its properties or assets or (c) require any consent or approval under,
violate, conflict with, result in any breach of or any loss of any benefit under, or constitute a change of control or default under,
or result in termination or give to others any right of termination, vesting, amendment, acceleration or cancellation of, or result in
the creation of a Lien upon any of the properties or assets of the Company pursuant to, any Contract, Company Permit or other instrument
or obligation to which the Company is a party or by which it or any of its properties or assets may be bound or affected, except, with
respect to clauses (b) and (c), for any such conflicts, violations, consents, breaches, losses, changes of control, defaults, other occurrences
or Liens which, individually or in the aggregate, have not had a Company Material Adverse Effect.


3.5
Required Filings and Consents. Assuming the accuracy of the representations and warranties of the Parent and the Purchaser
in Section 4.4, none of the execution, delivery or performance of this Agreement by the Company, the consummation by the Company
of the Merger or any other transaction contemplated by this Agreement, or the Company’s compliance with any of the provisions of
this Agreement will require (with or without notice or lapse of time, or both) any consent, approval, authorization or permit of, or filing
or registration with or notification to, any Governmental Entity or any other Person, other than (a) the filing of the Certificate of
Merger as required by the DGCL, (b) the receipt of the Company Stockholder Approval, and (c) where the failure to obtain such consents,
approvals, authorizations or permits of, or to make such filings, registrations with or notifications to any Governmental Entity or any
other Person, individually or in the aggregate, has not had a Company Material Adverse Effect.


3.6
Permits; Compliance With Law.


(a)
The Company holds all licenses, permits, certificates,
variances, exemptions, approvals and registrations of any Governmental Entity required by applicable
Law or Order for the Company to own, lease and operate its
properties and assets, and to conduct its business as currently conducted (the “Company
Permits”), except where the failure to have any Company Permits, individually
or in the aggregate, has not had a Company Material Adverse Effect. Section 3.6(a)
of the Company Disclosure Schedule contains an accurate and complete list of the Company
Permits. The Company is and since January 1, 2019
has been in compliance with the terms of the Company Permits, and all of the Company
Permits are valid and in full force and effect, except where the failure to be in compliance with any Company
Permits, or the failure of any Company Permits to
be valid or in full force and effect, individually or in the aggregate,
has not had a Company Material Adverse Effect. No suspension, modification, revocation or cancellation
of any of the Company Permits is pending or, to the knowledge
of the Company, threatened, except for any such actions that, individually
or in the aggregate, have not had a Company Material Adverse Effect.


(b)
The Company is not and has not been since January 1,
2019 in conflict with, default under or violation of, or is
not being, or since January 1, 2019 has not been, investigated
for, or charged by any Governmental Entity with a violation
of, any Law applicable to the Company or by which any property
or asset of the Company is bound or
affected, except for any conflicts, defaults, violations, investigations or charges that,
individually or in the aggregate, have not had a Company Material Adverse Effect. No investigation
or review by any Governmental Entity with respect to the
Company is pending or, to the knowledge
of the Company, threatened, except for such investigations or
reviews, the outcomes of which if determined adversely to the Company, individually
or in the aggregate, have not had a Company Material Adverse Effect.


3.7
Financial Information.


(a)
All of the unaudited financial statements of the Company delivered to the Parent, being the balance
sheets for the years ended December 31, 2018, 2019 and 2020 and the related statements of income and cash flows for the years then ended
and the balance sheet dated May 31, 2021 and the related statements of income and cash flows for the five month period then ended (A)
have been prepared from, are in accordance with, and accurately reflect the books and records of the Company
in all material respects, (B) have been prepared in accordance with GAAP
applied on a consistent basis during the periods involved (except as may be indicated in the notes thereto or,
in the case of interim financial statements, for normal and recurring year-end adjustments that are not material in amount or
nature and as may be permitted) and (C) fairly present in all material respects the financial
position and the results of operations and cash flows of the Company as of the dates and for the
periods referred to therein.


3.8
Books and Records. The books and records of the Company reflect only actual transactions. The minute books of the Company,
all of which have been made available by the Company to the Parent, contain materially complete and correct records of all meetings and
other corporate actions held or taken by its stockholders and board of directors, including the applicable committees of its board of
directors.


3.9
No Undisclosed Liabilities. Except for those liabilities and obligations (a) specifically reserved against or provided for
in the unaudited balance sheet of the Company as of May 31, 2021 or in the notes thereto, (b) incurred in the ordinary course of business
consistent with past practice since June 1, 2021, which, individually or in the aggregate, have not had a Company Material Adverse Effect
or (c) incurred under this Agreement or in connection with the transactions contemplated hereby, including the Merger, the Company has
not incurred any liabilities or obligations of any nature, whether or not accrued, absolute, determined, determinable, fixed or contingent
that would be required to be recorded or reflected on a balance sheet or the notes thereto under GAAP.


3.10
Absence of Certain Changes or Events.


(a)
Since May 31, 2021, there has not been any Company Material
Adverse Effect.


(b)
There has not been any action taken by the Company from
May 31, 2021 through the date of this Agreement that, if
taken during the period from the date of this Agreement through the Effective
Time, would constitute a breach of Section 5.1.


3.11
Employee Benefit Plans .


(a)
Section 3.12(a) of the Company Disclosure Schedule
sets forth a complete and accurate list of each Benefit Plan and each Benefit Agreement.
With respect to each Benefit Plan and Benefit Agreement, the Company
has provided to the Purchaser complete and accurate copies of (A)
each such Benefit Plan or Benefit Agreement, including any
amendments thereto, and descriptions of all material terms of any such plan that is not in writing, (B)
each trust, insurance, annuity or other funding Contract related
thereto, (C) all summaries and summary plan descriptions, including
any summary of material modifications, and any other notice or description provided to employees,
(D) the three most recent financial statements and actuarial or
other valuation reports prepared with respect thereto, (E) the most recently received IRS
determination letter, if any, issued by the IRS with respect to any Benefit
Plan and/or Benefit Agreement that is intended to qualify under Section 401(a)
of the Code, (F) the three most recent annual reports
on Form 5500 (and all schedules thereto) required to be filed with the IRS
with respect thereto and (G) all other filings and material correspondence with any Governmental
Entity (including any correspondence regarding actual or,
to the Company’s knowledge, threatened audits or
investigations) with respect to each Benefit Plan and Benefit Agreement.


(b)
Each Benefit Plan and Benefit Agreement (and any related trust or
other funding vehicle) has been maintained and administered in all material respects in accordance with its terms and is in compliance
in all material respects with ERISA, the Code and all other
applicable Laws. The Company has performed all material
obligations required to be performed by it under all Benefit Plans and Benefit Agreements.


(c)
No Benefit Plan is, or any Commonly Controlled Entity sponsors, maintains, contributes to, or has
ever sponsored, maintained, contributed to, or has any actual or contingent liability with respect to any (i) single employer plan or
other pension plan that is subject to Section 302 or Title IV of ERISA or Section 412 of the Code, (ii) “multiple employer
plan” within the meaning of Section 413(c) of the Code, (iii) defined benefit superannuation fund or is otherwise a defined
benefit plan (including, without limitation, any “multiemployer plan” within the meaning of Section 3(37) of ERISA) or
(iv) multiple employer welfare arrangement (within the meaning of Section 3(4) of ERISA). No Benefit
Plan or Benefit Agreement provides health, medical, life insurance or other welfare benefits
to any individual after retirement or other termination of employment other than as required under
Section 4890B of the Code, and no circumstances exist that
could result in the Company becoming obligated to provide any such benefits.


(d)
Each Benefit Plan that is intended to be qualified under Section 401(a)
of the Code has timely received a favorable determination letter or
is entitled to rely on a favorable opinion letter from the IRS, in either case, that has
not been revoked and, to the knowledge of the Company, no
event or circumstance exists that has adversely affected or would
reasonably be expected to adversely affect such qualification or exemption. Each trust established
in connection with any Benefit Plan which is intended to be exempt from federal income taxation
under Section 501(a) of the Code is so exempt, and
no fact or event has occurred that could reasonably be expected to adversely affect the exempt
status of any such trust. There has not been any prohibited transaction (within the meaning of Section 406
of ERISA or Section 4975 of the Code) with respect to any Benefit
Plan.


(e)
None of the execution, delivery or performance of this Agreement
by the Company, the consummation by the Company of
the Merger or any other transaction contemplated by this Agreement,
or the Company’s compliance with any of the provisions
of this Agreement will (either alone or in conjunction with
any other event, including any termination of employment on or
following the Effective Time) (i) entitle any Participant
to any compensation or benefit, (ii) entitle any
employee of the Company to resign or treat his or
her employment as terminated, (iii) accelerate the time of payment or
vesting, increase the amount of payment, or trigger any payment or
funding, of any compensation or benefit or trigger
any other material obligation under any Benefit Plan or Benefit Agreement or (iv) result in any
breach or violation of or default under or
limit the Company’s right to amend, modify or terminate
any Benefit Plan or Benefit Agreement.


(f)
Except as set forth in Section 3.12(f) of the Company
Disclosure Schedule, none of the execution, delivery or performance of this Agreement
by the Company, the consummation by the Company of
the Merger or any other transaction contemplated by this Agreement,
nor the Company’s compliance with any of the provisions of this Agreement
(alone or in conjunction with any other event, including
any termination of employment on or following the Effective
Time), will result in any “parachute payment” under Section 280G of the
Code.


(g)
No Participant is entitled to receive any gross-up, reimbursement or
additional payment by reason of any Tax imposed under Section 409A
or Section 4999 of the Code.


(h)
Each Benefit Plan, Benefit Agreement and other plan
or Contract maintained, established or entered into by the
Company that constitutes a nonqualified deferred compensation plan (within the meaning of Section 409A
of the Code) has been (i) operated in good faith
compliance with Section 409A of the Code or an available
exemption therefrom from January 1, 2005 through December 31,
2008 (to the extent in existence during such period) and (ii) maintained and operated, since January
1, 2010 (to the extent in existence since such date), in documentary and operational compliance with Section 409A
or the Code or an available exemption therefrom. No compensation has been or
would reasonably be expected to be includable in the gross income of any “service provider”
(within the meaning of Section 409A of the Code) of
the Company as a result of the operation of Section 409A of
the Code.


(i)
The Company has not ever maintained, sponsored, participated in or
contributed to, any Benefit Plan or Benefit Agreement subject to the Laws
of any jurisdiction outside of the United States, and no Benefit
Plan or Benefit Agreement provides compensation or benefits to any Participant
subject to the Laws of any jurisdiction outside of the United
States.


(j)
The Company is not a party to any Contract or plan
that has resulted or could result, separately or in the
aggregate, in the payment of any amount that will not be fully deductible as a result of Section 162(m)
of the Code (or any corresponding provision of any
other applicable Tax Laws).


3.12
Labor and Other Employment Matters.


(a)
The Company is in compliance in all material respects with all applicable Laws
respecting labor, employment, classification of employees, immigration, fair employment practices, terms and conditions of employment,
workers’ compensation, occupational health and safety, plant closings, compensation and benefits and wages and hours. Section
3.12(a) of the Company Disclosure Schedule sets forth the names and current annual salary
rates or current hourly wages, bonus opportunity, hire date, credited service, accrued vacation
or paid-time-off, principal work location and leave status of all present employees of the Company
and each such employee’s status as being exempt or nonexempt from the application
of state and federal wage and hour Laws applicable to employees who do not occupy a managerial,
administrative, or professional position.


(b)
The Company has paid in full all liabilities then due and payable in respect of all
of its employees, including premium contributions, remittance and assessments for unemployment
insurance, employer health tax, income tax, workers’ compensation and any liabilities under any other employment-related legislation,
accrued wages, taxes, salaries, commissions, bonuses, benefits, compensation and employee benefit
plan payments.


(c)
The Company is not and has not been a party to any collective bargaining, employee association
or works council or similar Contract,
and there are not, to the knowledge of the Company, any
union, employee association or works council organizing activities concerning any employees of
the Company. There are no unfair labor practice charges pending before the National Labor Relations
Board or any other Governmental Entity, or
any Actions which are pending or, to the knowledge
of the Company, threatened by or on behalf of any
employees of the Company. The Company has not recognized (or done
any act which might be construed as recognition of) any trade union, whether voluntarily or in
terms of any statutory procedure as set out in any applicable Law. Since January
1, 2018, there have been no labor strikes, slowdowns, work stoppages, picketing, negotiated industrial actions or
lockouts pending or, to the knowledge of the Company,
threatened, against the Company.


(d)
In the three years prior to the date of this Agreement, the Company
has not effectuated (i) a “plant closing”
(as defined in the Worker Adjustment and Retraining Notification Act (the “WARN Act”)
or any similar Law) affecting any site of employment or
one or more facilities or operating units within
any site of employment or facility of the Company or (ii) a
“mass layoff” (as defined in the WARN Act, or
any similar Law) affecting any site of employment or facility
of the Company.


(e)
Section 3.12e) of the Company Disclosure Schedule
contains a list of all natural persons that are independent contractors, consultants, agents or
agency employees currently engaged by the Company, along with the position, date of retention
and rate of remuneration for each such individual. Except as set forth in Section 3.12(e)
of the Company Disclosure Schedule, the Company does not engage
or retain any independent contractors, consultants, agents or agency
employees (that are natural persons).


(f)
The employees of the Company have been, and currently are, properly classified under the
Fair Labor Standards Act of 1938, as amended, and under any similar Law
of any state or other jurisdiction applicable to such employees. Any Persons
now or heretofore engaged by the Company as consultants
or contract laborers or independent contractors, rather
than employees, have been properly classified as such, are not entitled to any compensation or benefits
to which regular, full-time employees are or were at the relevant time entitled, were and have
been engaged in accordance with all applicable Laws, and have been treated accordingly and appropriately
for all Tax purposes.


3.13
Contracts; Indebtedness.


(a)
Section 3.13(a) of the Company Disclosure Schedule
sets forth an accurate and complete list of each Contract to which the Company
is a party or which binds or affects their
respective properties or assets, and which falls within any of the following categories:


(i)
any Contract that limits, or that after the Effective
Time would limit, the freedom of the Company or the Parent after the Effective
Time to compete in any line of business or sell, supply or
distribute any product or service, in each case, in any geographic area, or
to hire any individual or group of individuals;


(ii)
any Contract that relates to a partnership, joint venture or
relationship for joint marketing or joint development with any other Person;


(iii)  
any Contract that involves future expenditures or receipts
by the Company of more than $20,000 in any one year period
(provided that, with respect to the Company’s customer Contracts entered into in the ordinary
course consistent with past practice, this Section 3.13(a) shall only apply to Contracts with Significant Customers);


(iv)   
any Contract that by its terms limits the payment of dividends or
other distributions by the Company;


(v)
any Contract that grants any right of first refusal or right
of first offer or similar right with respect to any material assets of the Company;


(vi)   
any acquisition Contract with a purchase price in excess of $20,000
or that contains “earn-out” provisions or other contingent payment obligations;


(vii)
any sale or divestiture Contract with a purchase
price in excess of $20,000 or that contains ongoing indemnification obligations or
other material obligations;


(viii)     
any Contract which is likely to involve consideration of more than $20,000, in the aggregate, paid
to or received by, the Company over the remaining term of such Contract (provided that, with respect to the Company’s customer
Contracts entered into in the ordinary course consistent with past practice and on the form set forth in Section 3.14(e)(i) of
the Company Disclosure Schedule, this Section 3.13(a) shall only apply to Contracts with Significant Customers);


(ix)   
each Contract with a Governmental Entity that involved
aggregate payments of over $10,000 in 2020 or is reasonably likely to involve aggregate payments
of over $10,000 in 2021;


(x)
any Contract that contains obligations of the Company secured
by a Lien (other than a Permitted Lien), or
provides for interest rate or currency hedging arrangements, in each case in connection
with which the aggregate actual or contingent obligations of the Company
under such Contract are greater than $20,000;


(xi)   
any Contract for the employment or engagement of
any officer, employee, consultant or other individual, including
any Benefit Agreement, providing for aggregate annual payments by the Company
in excess of $50,000;


(xii)
any Contract or plan, including any stock option
or equity plan, that may or will increase, or
accelerate the vesting of, the benefits to any party by the occurrence of any of the transactions contemplated by this Agreement,
or the value of any of the benefits which will be calculated on the basis of any of the transactions
contemplated by this Agreement;


(xiii)     
any collective bargaining agreement or other Contract with
any labor union or severance or termination pay agreements,
programs or policies;


(xiv)      
any Contract relating to indebtedness for borrowed money or
any financial guaranty in excess of $20,000 individually;


(xv)
any lease, sublease or other Contract with respect
to the Leased Real Property (“Lease Agreements”);


(xvi)      
any Contract related to the development, distribution, or
provision of any Company Intellectual Property or Company Offerings, and any Contract
related to the support or maintenance of any Company Intellectual
Property or Company Offerings that requires payment in excess of $20,000 per year individually;


(xvii)    
any Contract that concerns protection of, or imposes
any obligations with respect to use or disclosure of, Trade Secrets
other than Contracts on Company’s applicable
standard form non-disclosure agreement without substantive changes; and


(xviii)  
any other “material contract” (as such term is defined in Item 601(b)(10) of Regulation
S-K of the SEC).


(b)
Each Contract of the type described in Section 3.13(a)
and each Company Intellectual Property Contract (other than Unscheduled Outbound IP Contracts and Unscheduled Inbound IP Contracts) is
referred to herein as a “Company Material Contract.”
Accurate and complete copies of each Company Material Contract have been provided or
made available by the Company to Parent.


(c)
(i) Each Company Material Contract is a legally valid,
binding and enforceable obligation of the Company and, to the knowledge
of the Company, of the other party or parties thereto,
in accordance with its terms, subject to applicable bankruptcy, insolvency and similar Laws affecting
creditors’ rights generally and subject, as to enforceability, to general principles of equity, (ii)
each Company Material Contract is in full force and effect and, upon consummation of the
Merger, shall continue to be in full force and effect without penalty, acceleration, termination,
repurchase right or other adverse consequence, (iii) the
Company has in all material respects performed the obligations required by it under each Company
Material Contract, (iv) the Company does not know
of, and has not received notice of, any violation or default
under (nor does there exist any condition which upon the passage of time or the giving of notice
or both would cause such a violation of or default under)
any Company Material Contract and (v) the Company
has not received any notice from any other party to any such Company Material Contract,
and otherwise has no knowledge, that such party intends to terminate, or
not renew, any such Company Material Contract.


(d)
There are no outstanding amounts payable to or receivable from, or
advances by the Company to, and the Company is not
otherwise a creditor or debtor to, or party to any Contract
or transaction with, any holder of 5% or more of the Company
Common Stock or any director, officer, employee or affiliate of the Company,
except for employment or compensation agreements or arrangements
with directors, officers and employees made in the ordinary course of business consistent with past practice.


(e)
The Company provides services to its customers under the terms of the warranties described
in Section 3.13(e)(i) of the Company Disclosure Schedule.
The Company currently has not and previously has not had, any material disputes concerning its
services with any of the 30 largest customers of the Company in 2020, or
for 2021 to date, based on amounts paid or payable by such Person
during each such period (each, a “Significant Customer”), and the Company
has no knowledge of any material dissatisfaction on the part of any such Significant
Customer or any facts or circumstances that would lead to such material dissatisfaction.
Each Significant Customer is listed on Section 3.13(e)(ii)
of the Company Disclosure Schedule. The Company has not
received written or, to the knowledge of the Company,
oral notice from any Significant Customer that such Significant
Customer shall not continue as a customer of the Company or that such Significant
Customer intends to terminate or materially modify existing Contracts
with the Company (or the Parent).


(f)
The Company currently has not or previously has not
had any material dispute concerning products and/or services provided by any supplier who was one
of the 15 largest suppliers of products and/or services to the Company
in 2020, or for 2021 to date, based on amounts paid or payable
by such Person during each such period (each, a “Significant
Supplier”), and the Company has no knowledge of
any material dissatisfaction on the part of any Significant Supplier or any facts or
circumstances that would lead to such material dissatisfaction. Each Significant Supplier is
listed on Section 3.13(f) of the Company Disclosure Schedule.
The Company has not received written or, to the knowledge
of the Company, oral notice from any Significant Supplier
that such Significant Supplier shall not continue as a supplier to the Company
or that such Significant Supplier intends to terminate or
materially modify existing Contracts with the Company (or
the Parent).


3.14
Litigation.


(a)
There is no suit, claim, action, proceeding, litigation, hearing, writ, injunction, notice of violation,
investigation, arbitration, mediation, audit, dispute or demand letter (“Action”)
pending or, to the knowledge of the Company,
threatened against or affecting the Company (including
by virtue of indemnification or otherwise) or their respective
assets or properties, or any executive officer or director
of the Company that, individually or in the aggregate, has had
a Company Material Adverse Effect. As of the date of this Agreement, Section
3.14 of the Company Disclosure Schedule sets forth a description of each current Action
pending or, to the knowledge of the Company,
threatened against or affecting the Company (including
by virtue of indemnification or otherwise) or its assets
or properties, or any executive officer or director
of the Company and relating to the Company or their service to the Company.


(b)
Neither the Company nor any of its assets or properties,
is subject to any order, writ, injunction, judgment, decree, decision, determination, ruling, subpoena,
verdict, stipulation, award, settlement agreement or similar Contract,
arbitration award or finding (“Order”)
entered by or with any Governmental Entity or, to the knowledge
of the Company, is subject to any continuing investigation by any Governmental
Entity.


3.15
Environmental Matters. Except as has not had a Company Material Adverse Effect: (a) the Company is in compliance in all
material respects with all Environmental Laws and (b) during the period of the Company’s use and occupancy, there have been no releases
of Hazardous Substances at the Leased Real Property in quantities that are reasonably likely to result in remediation costs to the Company
pursuant to Environmental Laws. The Company has not received written notice of any Environmental Claims against the Company, nor has the
Company received any written notification of any allegation of any actual or potential responsibility for the disposal, release or threatened
release at any location of any Hazardous Substance, in each case during the period of the Company’s use and occupancy of the Leased
Real Property.


3.16
Intellectual Property.


(a)
Section 3.16(a) of the Company Disclosure Schedule
contains a complete and accurate list of all Company Offerings, including, where applicable,
the title and most current version, release number and release date.


(b)
Section 3.16(b) of the Company Disclosure Schedule
contains a complete and accurate list of all Registered Company Intellectual Property, in each case listing, as applicable: (i)
for each Patent, the name of the current owner, the Patent
number or application serial number, the jurisdiction in which it was filed, the filing
and issuance/grant dates, and the present prosecution status, (ii) for each registered Trademark
or Trademark application, the name of the applicant/registrant, the jurisdiction where the application/registration is located,
the filing date, the registration date, duration of validity, application serial number or registration
number, the class of goods covered, and the nature of the goods or services, (iii)
for each Domain Name, the name of the registrant, the registration date, the expiration
date, the renewal date, the registrar name, and contact information for the registrar, including its
billing agent, (iv) for each registered Copyright or Copyright
application, the name of the applicant/registrant, the jurisdiction where the application/registration is located, the application
or registration number, and date of such application or registration
and (v) for each item of Registered Company Intellectual Property,
any Person other than the Company that has an ownership
interest therein and the nature of such ownership interest. Section 3.16(b) of the Company
Disclosure Schedule also contains a complete and accurate list of all material unregistered Trademarks
used or held for use by the Company in connection
with the Company Offerings and all material unregistered Copyrights
included in the Company-Owned Intellectual Property.


(c)
For each item of Registered Company Intellectual Property: (i)
all necessary registration, maintenance and renewal fees due and payable as of the Closing Date
have been paid, (ii) all documents necessary for obtaining, maintaining, perfecting, preserving
and renewing the Registered Company Intellectual Property required to be filed as of the date hereof and
as of the Closing Date have been filed with the appropriate Governmental Entity, (iii)
each such item has been prosecuted in compliance in all material respects with applicable Law and
(iv) there are no actions (including payment of any fees
or filing of any documents) that must be taken within 90 days following the Closing
Date (or reasonable estimation thereof) for purposes of obtaining, maintaining, perfecting,
preserving or renewing such Registered Company Intellectual Property.


(d)
None of the Company-Owned Intellectual Property is
involved in or subject to any pending or threatened Action
regarding ownership, use, invalidity or enforceability, including
any interference, reexamination, cancellation, or opposition proceeding. There are no facts,
circumstances, or information to the Company’s knowledge, that would be expected to: (i)
render any of the Intellectual Property Rights in the Company-Owned
Intellectual Property invalid or unenforceable or (ii) adversely
affect, limit, restrict, impair, or impede the ability of the Surviving
Corporation to use and practice the Company Intellectual Property upon the Closing
in the same or similar manner as currently used and practiced by the Company
(and as currently planned to be used and practiced). To the knowledge of the Company,
the Company-Owned Intellectual Property is subsisting and in full force and effect, and
has not been abandoned or passed into the public domain.


(e)
Section 3.16(e)(i) of the Company Disclosure Schedule
contains a complete and accurate list of all Contracts to which the Company is a party,
or by which the Company is otherwise bound under which the
Company has granted or agreed to grant to any Third
Party any assignment, license, covenant not to sue, release, immunity or other right with respect
to Intellectual Property or Intellectual Property Rights (“Outbound
Intellectual Property Contracts”), other than nondisclosure agreements, end user license agreements, and terms of use
entered into in the ordinary course of business on Company’s applicable standard form agreement
without material changes (“Unscheduled Outbound IP Contracts”). Section
3.16(e)(ii) of the Company Disclosure Schedule contains a complete and accurate list of all
Contracts to which the Company is a party, or by
which the Company is otherwise bound under which any Third Party
has granted or agreed to grant to the Company any
assignment, license, covenant not to sue, release, immunity or other right with respect to Intellectual
Property or Intellectual Property Rights (“Inbound Intellectual Property Contracts”),
other than employment agreements between Company and its employees and non-exclusive, proprietary
(i.e., non-Open Source) inbound Software licenses generally
commercially available on commercially reasonable terms with annual license fees under $10,000
in the aggregate that do not relate to Intellectual Property or Intellectual Property Rights incorporated
into any Company Offering (“Unscheduled Inbound IP Contracts”).


(f)
Neither this Agreement nor the transactions contemplated by this Agreement
will violate or result in the breach, material modification, cancellation, termination or
suspension of, or acceleration of any payments under, any Company
Intellectual Property Contract. Following the Closing Date, the Surviving
Corporation will have and be permitted to exercise all of the Company’s rights under
all Company Intellectual Property Contracts (and will have the same rights with respect to the
Intellectual Property and Intellectual Property Rights of
Third Parties included in the Company Intellectual Property)
to the same extent the Company  would have had, and been able to exercise, had the transactions
contemplated by this Agreement not occurred, without payment of any additional amounts or
consideration other than ongoing fees, royalties or payments that the Company
would have been required to pay anyway even if such transactions had not occurred.


(g)
Neither this Agreement nor the transactions contemplated by this Agreement,
nor any Contracts to which the Company is a party (including
the assignment (if any) to the Surviving Corporation upon or
at any time following Closing, by operation of law or otherwise,
of any such Contracts), will result in (i) any Third
Party being granted the right to exercise any rights to or access to, or
the placement in or release from escrow, any Intellectual
Property, (ii) violation, breach, material modification, cancellation, termination or
suspension of, or acceleration of any payments under, the Company
Intellectual Property Contracts or (iii) Parent or any of its affiliates or the Surviving
Corporation (x) granting or being required to grant to any Third
Party any license, covenant not to sue, immunity or other right with respect to any Intellectual
Property or Intellectual Property Rights, (y) being bound by, or
subject to, any non-compete or other restriction on the operation or
scope of their respective businesses or (z) being obligated to pay any amounts, or
offer discounts to any Person, except, with respect to Surviving
Corporation in each case (x)-(z), to the same extent that the Company
would have been so obligated even if such transactions had not occurred.


(h)
The Company solely and exclusively owns all right, title and interest in and to (including
the sole right to enforce) the Company-Owned Intellectual Property, free and clear of any
and all Liens, and have not (i) licensed any such Company-Owned
Intellectual Property, or any other Company Intellectual
Property, to any Third Party, except pursuant to an Outbound
Intellectual Property Contract listed in Section 3.16(e)(i) of the Company
Disclosure Schedule or an Unscheduled Outbound IP Contract or (ii) exclusively licensed
any such Company-Owned Intellectual Property, or any other
Company Intellectual Property, to any Third Party. The Company
is listed in the records of the appropriate Governmental Entity as the sole owner of each
item of Registered Company Intellectual Property. All Licensed
Company Intellectual Property is licensed by the Company pursuant to a valid Inbound
Intellectual Property Contract listed in Section 3.16(e)(i) for use in the manner
in which it is currently used by the Company. All Company Intellectual
Property is either Company-Owned Intellectual Property or Licensed Company
Intellectual Property.


(i)
The Intellectual Property and Intellectual Property Rights
included in the Company-Owned Intellectual Property and Licensed Company
Intellectual Property include all of the Intellectual Property and Intellectual
Property Rights that are necessary to enable the Surviving Corporation to conduct the business
of the Company as currently conducted, and, immediately following the Closing,
the Surviving Corporation will own or have (pursuant to
the Inbound Intellectual Property Contracts) the same rights that the Company
had immediately prior to the Closing with respect to such Intellectual
Property and Intellectual Property Rights.


(j)
The Company has taken steps consistent with industry standards, and in any event no less
than reasonable steps, to safeguard and maintain the secrecy and confidentiality of, and its proprietary rights in, all Trade
Secrets provided by Third Parties for which the Company
has an obligation of confidentiality and any other Trade Secrets that are included in the
Company Intellectual Property. The Company has not authorized
the disclosure of any Trade Secret included in the Company Intellectual
Property, nor has any such Trade Secret been disclosed to a Third
Party by the Company other than pursuant to a valid and enforceable confidentiality agreement
with respect thereto. To the knowledge of Company, no Person
has misappropriated, made any unauthorized disclosure of, or breached its confidentiality
obligations with respect to any Trade Secret included in the Company
Intellectual Property.


(k)
Each current and former employee, officer, consultant and contractor of the Company (“Company
Personnel”), who is or has been involved in the development of any Company-Owned
Intellectual Property or Company Offerings, has executed and delivered to the Company applicable
employment or contractor agreements, non-disclosure agreements, and assignment agreements
that assign to the Company all Intellectual Property and
Intellectual Property Rights developed in connection with such Person’s
work for the Company, which applicable documents contain contractual terms reasonably protective
of for the Trade Secrets of the Company. To the knowledge
of the Company, no Company Personnel is in breach
of any such agreement. No Company Personnel has any ownership, license, or
other right in any Company-Owned Intellectual Property, and the Company
does not owe any royalties, license fees or other amounts to any Company
Personnel with respect to any Company-Owned Intellectual Property.


(l)
To the knowledge of the Company no government funding,
facilities or funding of a university, college, other educational institution or
research center or funding from a granting agency was used in the development of any Company-Owned
Intellectual Property or Company Offering.


(m)   
To the Company’s knowledge, the conduct of the business of the Company as currently conducted,
including the design, development, use, provision, import, branding, advertising, promotion, marketing,
manufacture and sale of any Company Offerings (i) does not infringe, misappropriate, use or
disclose without authorization, or otherwise violate any Intellectual
Property Rights of any Third Party and (ii) does
not constitute unfair competition or trade practices under the Laws
of any relevant jurisdiction.


(n)
The Company n has received any written notice (or been
involved in any Action) alleging (or describing an allegation)
that the Company, the business of the Company. or any Company
Offering, infringes, misappropriates, uses or discloses without authorization, or
otherwise violates any Intellectual Property Rights of any Person
or constitutes unfair competition or trade practices under the Laws
of any relevant jurisdiction. No Action is pending or,
to the knowledge of the Company, threatened against any
Third Party who may be entitled to be indemnified, defended, held harmless, or
reimbursed by the Company with respect to any such allegation or
Action. Without limiting the foregoing, the Company has not received any correspondence
asking or inviting the Company to enter into a Patent
license or similar agreement or to obtain a release,
immunity, or a covenant not to sue for Patent infringement
with respect to the Patents of any other Person.


(o)
All use and distribution of Company Offerings or any Open
Source by or through the Company is in compliance
in all material respects with all Open Source licenses applicable thereto, including
copyright notice and attribution requirements. Section 3.16(o)(i) of the Company
Disclosure Schedule contains a complete and accurate list of all Open Source that is incorporated into, integrated or
bundled with, linked with, or used in the development or
compilation of, or otherwise used in or with any
Company Offerings or Company-Owned Intellectual Property. Section
3.16(o)(ii) of the Company Disclosure Schedule identifies the license applicable to
each such item of Open Source. Except as set forth in Section
3.16(o)(iii) of the Company Disclosure Schedule, the Company
has not (A) incorporated Open Source into, integrated,
bundled with or otherwise combined Open Source with, any
Company Offerings or Company-Owned Intellectual Property in the nature of Software; (B)
distributed Open Source in conjunction with or for
use with any Company Offerings or Company-Owned Intellectual Property in the nature of Software; or (C)
used Copyright Materials in a manner that requires any Company
Offerings, Company-Owned Intellectual Property in the nature of Software, or
any portion thereof to be subject to Copyright Licenses (or
any of the obligations or attributes thereof as specified in (i)
through (iv) of the definition thereof).


(p)
The Company has not made a written claim or initiated
any Action with respect to infringement, misappropriation or other
violation of Intellectual Property Rights or with respect to unfair competition or
trade practices against any Third Party, nor has the Company
issued any written correspondence asking or inviting any Third
Party to enter into a Patent license or similar agreement
or to obtain a release, immunity, or a covenant not to sue
for Patent infringement with respect to any Patents.


(q)
Prior to permitting the use or download of, or access
to, a Company Offering by any Person, the Company
requires such Person to enter into an end user license agreement or
affirmatively agree to terms of use applicable to such Company Offering. The Company
has provided to Parent all forms of nondisclosure agreements, end user license agreements,
terms of use and other standard form agreements that are currently or were at any time in use related
to the use or download of, or access to, Company
Offerings.


(r)
Section 3.16(r) of the Company Disclosure Schedule
contains a list of all standard-setting organizations, industry bodies and other standards-related activities that the Company
has participated in, been a member of, or contributed to and a description of, or
reference to a description of, the nature of such organizations, bodies and other activities.


3.17
Privacy; Data Security(a)At all times since it began selling any Company Offering,
the Company has provided notice of its privacy practices on all of its websites and these notices
have not contained any material omissions of the Company’s privacy practices or
practices concerning the collection, use, and disclosure of Personal Information or information
about a user or consumer that is not Personal Information,
including data collected from an IP address, web beacon, pixel tag, ad tag, cookie, JavaScript,
local storage, Software, or by any other means, or
from a particular computer, Web browser, mobile telephone, or other device or
application, where such data is or may be used to identify or
contact an individual, device, or application (including,
without limitation, by means of an advertisement or content), or
to predict or infer the preferences, interests, or other
characteristics of the device or of a user of such device or application
or is otherwise used to target advertisements or other content
to a device or application or to a user of such device or
application (“Non-Personal Information”). The privacy policy or
policies providing this notice and the periods each policy has been in effect are set forth in Section
3.17(a) of the Company Disclosure Schedule (hereinafter collectively, the “Privacy
Policies”). The privacy practices of the Company conform, and at all times have
conformed, in all material respects to their respective Privacy Policies at the time each Privacy
Policy was in effect and with any public statements regarding the privacy practices of the Company.
The Company has complied in all material respects with all Laws
relating to: (i) the privacy of users of (including Internet
or mobile users who view or interact with) the Company
Offerings and all of the websites of the Company, and (ii)
the collection, use, storage, retention, disclosure, and disposal of any Personal Information or
Non-Personal Information collected by the Company, or by
Third Parties acting on the Company’s behalf ’s
behalf or having authorized access to the Company’s ’s records. The Privacy
Policies and practices of the Company concerning the collection, use, retention, disclosure,
and disposal, of Personal Information or Non-Personal Information conform, and at all times have
materially conformed, to all of the contractual commitments of the including to viewers of the
websites of the Company  and users of (including Internet
users who view or interact with) the Company Offerings and
the contractual commitments of the Company through which Company
Offerings are offered. The Company’s Privacy Policies and the Company Offerings conform,
and at all times have materially conformed to applicable Law and, to the extent subject thereto,
to the Network Advertising Initiative’s Self-Regulatory Code of Conduct (2008), the Digital
Advertising Alliance’s Self-Regulatory Principles for Online
Behavioral Advertising, and the Federal Trade Commission’s Principles for the Self
Regulation of Online Behavioral Advertising (2010). Except as required to process a transaction or
provide the Company Offerings, the Company has not
disclosed, and does not have any obligation to disclose, any Personal Information or Non-Personal Information
to any Third Party. The Company, the Company’s
websites, and the Company Offerings, have made all disclosures to users or
customers and obtained all necessary consents from users or customers required by applicable
Law, and none of such disclosures made or contained in any
of the Company’s websites or in any such materials have been inaccurate, misleading or
deceptive or in violation of any applicable Law.
No Actions have been asserted or, to the knowledge
of the Company, are threatened against the Company by any Person alleging a violation of
any Person’s privacy, personal or confidentiality
rights under the Privacy Policies or any applicable Law.
Neither this Agreement nor the transactions contemplated by this Agreement,
including any disclosures of data, will violate the Privacy Policies
as they currently exist or as they existed at any time during which any of the Personal
Information or Non-Personal Information was collected or obtained.


(b)
To the knowledge of the Company, at all times since
inception, the Company has complied in all material respects with any Law
applicable to the Company relating to the security of Personal
Information to which the Company or Third Parties acting on the Company’s
behalf, or otherwise having authorized access to the Company’s records, have access or
otherwise collect or handle. To the knowledge of
the Company, the Company’s information security practices
conform, and at all times have conformed, in all material respects with (i) any information security
statements made by Company in its respective Privacy Policies at
the time each Privacy Policy was in effect and (ii) all
of the contractual commitments of the Company including, but not limited to, any contractual commitments
to analytics providers, data providers, publishers, advertisers and advertising networks, exchanges and advertising networks, through
which Company Offerings are offered. The Company has made
no statements to the general public regarding the information security practices of the Company other
than those made in its respective Privacy Policies. No Actions
have been asserted or, to the knowledge of the Company,
are threatened against the Company by any Person with respect to the security of Personal Information.
To the knowledge of the Company, there has been no unauthorized
access to or unauthorized disclosure or use of Personal
Information owned or licensed by the Company or in
the Company’s possession or control by or to any Third
Party, including any Governmental Entity.


3.18
Tax Matters.


(a)
The Company has timely filed or caused to be timely
filed with the appropriate Governmental Entities all Tax Returns
required to be filed by, or with respect to, it. All such Tax
Returns are accurate, correct and complete in all material respects. All material Taxes of
the Company or for which the Company could be liable, which
are due and payable (whether or not shown on any Tax Return),
have been timely paid. No claim has been made in writing by any Governmental Entity in a jurisdiction
where the Company does not file a Tax Return that such entity
is or may be subject to Tax by that jurisdiction. As of
June 30, 2021, the unpaid Taxes of the Company
did not exceed by a material amount the reserve for Tax liability (excluding any reserve
for deferred Taxes established to reflect timing differences between book and Tax
income) set forth or included in the consolidated balance sheet of the Company
as of June 30, 2021 (rather than in any notes thereto). Since June
30, 2021, Company not incurred any liability for Taxes outside
the ordinary course of business or inconsistent with past practice.


(b)
There is no Action concerning any Tax liability of
the Company ongoing, claimed or raised by any Governmental
Entity in writing or, to the knowledge of the Company,
other than in writing. The Company has not waived any statute of limitations in respect of Taxes
which waiver has not yet expired or agreed to any extension of time with respect to a Tax
assessment or deficiency which extension has not yet run or
in each case been requested in writing to do so. The Company is not a party to or
bound by any Tax allocation agreement, Tax indemnity
agreement, Tax sharing agreement or similar Contract
with respect to Taxes.


(c)
The Company has withheld and paid all Taxes required
to have been withheld and paid in connection with amounts paid or owing to any employee, independent
contractor, creditor, stockholder of the Company or other Person.


(d)
The Company has delivered or made available to Parent
correct and complete copies of all federal, state and foreign income and other material Tax Returns
of the Company for all Tax years open under the applicable
statute of limitations, including, promptly upon their availability, for the most recent Tax
year.


(e)
There is no Lien for Taxes on or against any property,
right or asset of the Company other than a Permitted
Lien.


(f)
All deficiencies asserted and assessments made with respect to Taxes of the Company
(i) have been fully paid or (ii) are being contested in good faith by appropriate proceedings
and an adequate reserve therefor has been established in accordance with GAAP on the balance sheet
of the Company.


(g)
The Company has not been a member of an affiliated group filing a consolidated federal income
Tax Return or any similar group for federal, state, local or foreign
Tax purposes (other than a group the common parent of which is the Company),
and neither the Company n has any liability for Taxes of any other Person
(other than the Company ) pursuant to Treasury Regulation
Section 1.1502-6 (or any similar provision of any other applicable Law), as a transferee or
successor, by Contract or otherwise.


(h)
The Company has not entered into a transaction under which gain or
income has been realized but the taxation of such gain or income has been deferred under
any provision of any applicable Law or by agreement with any Tax
authority (including an installment sale, a deferred intercompany transaction, any change
in method of accounting for a taxable period ending on or prior to the Closing
Date, any closing agreement as described in Section 7121 of the Code
(or any corresponding or similar provision of any
applicable Law) executed on or prior to the Closing
Date, any prepaid amount received on or prior to the Closing
Date, or a gain recognition agreement), or a transaction
under which previously utilized Tax losses or credits may
be recaptured (including a dual consolidated loss or an
excess loss account), in each case if such gain or income recognition or
such loss or credit recapture, if triggered, would give rise to a Tax
liability.


(i)
Neither the Company nor any of its predecessors by merger or
consolidation has been a party to a transaction intended to qualify under Section 355
of the Code or under so much of Section 356 of the
Code as relates to Section 355 of the Code.


(j)
The Company is not and has not been a party to a
transaction that is or is substantially similar to a “listed
transaction” within the meaning of Treasury Regulation Section 1.6011-4(b)(2) or any
other transaction requiring disclosure under similar provisions of any applicable Law.


(k)
The Company (i) does not have a permanent establishment (within the meaning of an applicable
Tax treaty) in any country other than the United States,
or operates or conducts business through any branch in any
country other than the United States, (ii) is not and has
not been a “surrogate foreign corporation” within the meaning of Section 7874(a)(2)(B)
of the Code or is treated as a United States corporation
under Section 7874(b) of the Code or (iii) was created
or organized both in the United States and in a foreign
jurisdiction such that it would be taxable in the United States as a domestic entity pursuant to
Treasury Regulation Section 301.7701-5(a).


(l)
The Company has not disclosed on its federal income Tax
Returns all positions taken therein that could give rise to a substantial understatement of federal income Tax
within the meaning of Section 6662 of the Code.


(m)   
The Company has not been a United States real property
holding corporation within the meaning of Section 897(c)(2) of the Code
during the applicable period specified in Section 897(c)(1)(A)(ii) of the Code.


3.19
Insurance. The Company has made available to Parent accurate and complete copies of all material insurance policies relating
to the business, assets and operations of the Company (the “Insurance Policies”). Section 3.20 of the Company
Disclosure Schedule contains an accurate and complete list of the Insurance Policies. Each of the Insurance Policies is in full force
and effect, all premiums due thereon as of the date hereof have been paid in full and the Company are in compliance in all material respects
with the terms and conditions of such Insurance Policies. Since January 1, 2021, the Company has not received any notice or other communication
regarding any actual or possible (a) cancellation of any Insurance Policy that has not been renewed in the ordinary course without any
lapse in coverage, (b) invalidation of any Insurance Policy, (c) refusal of any coverage, limitation in coverage or rejection of any material
claim under any Insurance Policy or (d) material adjustment in the amount of the premiums payable with respect to any Insurance Policy.
There is no material claim by the Company pending under any of the Insurance Policies and no material claim made since January 1, 2019,
in the case of any pending claim, has been questioned or disputed by the underwriters of such Insurance Policies. None of the Insurance
Policies will terminate or lapse by reason of the transactions contemplated by this Agreement.


3.20
Properties and Assets. The Company has, and immediately following the Effective Time will continue to have, good and valid
title to their owned assets and properties, or in the case of assets and properties they lease, license, or have other rights in, good
and valid rights by lease, license or other agreement to use, all assets and properties (in each case, tangible and intangible) free and
clear of all Liens other than Permitted Liens. To the knowledge of the Company, the assets and properties (in each case, tangible or intangible)
owned or used by the Company or the Company Subsidiaries are in reasonably satisfactory condition for their continued use as they have
been used and reasonably adequate in all material respects for their current use, subject to reasonable wear and tear. Notwithstanding
the foregoing, it is understood and agreed that matters regarding Company Intellectual Property are addressed solely in Section 3.17
and not in this Section 3.21.


3.21
Real Property. The Company does not own any real property. Section 3.21 of the Company Disclosure Schedule sets
forth (i) an accurate and complete list of all real property leased, subleased or otherwise occupied by the Company (collectively, the
“Leased Real Property”), (ii) the address for each Leased Real Property, (iii) a description of the applicable lease,
sublease or other Contract therefor and any and all amendments, modifications, side letters relating thereto and (iv) the current rent
amounts payable by the Company related to each Leased Real Property. No Lease Agreement is subject to any Lien granted by the Company,
including any right to the use or occupancy of any Leased Real Property, other than Permitted Liens. The Company has not received written
notice of any Action in eminent domain, expropriation, condemnation or other similar Actions that are pending, and, to the knowledge of
the Company, as of the date hereof, there are no such Actions threatened in writing, affecting any portion of the Leased Real Property
and, to the knowledge of the Company, there is no such Order or Action threatened in writing, relating to the ownership, lease, use, occupancy
or operation by the Company of the Leased Real Property.


3.22
Information. No representation, statement or information contained in this Agreement (including the various exhibits attached
hereto) or any agreement executed in connection herewith or in any certificate or other document delivered pursuant hereto or thereto
or made or furnished to Parent or Purchaser or its representatives by the Company, contains or shall contain any untrue statement of a
material fact or omits or shall omit any material fact necessary to make the information contained herein and therein not misleading.
Copies of all documents listed or described in the various exhibits and schedules attached hereto and provided by Company or Seller to
Purchaser or Parent are true, accurate and complete. The information supplied by the Company will not, when filed with the SEC in any
filing, statement or report required to be filed by Parent to authorize or approve the Merger, when distributed or disseminated, contain
any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary in order to make
the statements made therein, in the light of the circumstances under which they were made, not misleading.


3.23
Required Vote. The affirmative vote of (i) the holders of shares representing a majority of the voting power of the outstanding
shares of the Company’s capital stock of all classes, voting together as a single class on an as converted to Common Stock basis,;
and (ii) the holders of shares representing a majority of the voting power of the outstanding shares of the Company’s Preferred
Stock, voting together as a single class on an as converted to Common Stock basis, are the only votes required, if any, of the holders
of any class or series of capital stock or other Equity Interests of the Company to approve and adopt this Agreement and the transactions
contemplated hereby, including the Merger (the “Company Stockholder Approval”).


3.24
Brokers. Neither the Company nor any stockholder, director, officer, employee or affiliate of the Company, has incurred
or will incur on behalf of the Company, any brokerage, finders’, advisory or similar fee in connection with the transactions contemplated
by this Agreement, including the Merger.


3.25
Anti-Corruption Laws.


(a)
Neither the Company nor to the Company’s knowledge, any officer, director, agent,
consultant, employee or other Person acting on behalf of
the Company, has, directly or indirectly, taken any action
which would cause them to be in violation of: (i) the principles set out in the Organization
for Economic Cooperation and Development Convention Combating Bribery of Foreign Public Officials in International Business Transactions,
(ii) the Foreign Corrupt Practices Act of 1977, as amended,
or any rules or regulations thereunder and (iii)
any other applicable anti-corruption and/or anti-bribery Laws
of any Governmental Entity of any jurisdiction applicable to the Company
(whether by virtue of jurisdiction or organization or conduct
of business).


(b)
The books, records and accounts of the Company have at all times accurately in all material
respects and fairly reflected, in reasonable detail, the transactions and dispositions of their respective funds and assets. There have
never been any false or fictitious entries made in the books, records or
accounts of the Company relating to any illegal payment or
secret or unrecorded fund, and neither the Company has
established or maintained a secret or unrecorded fund.


(c)
The Company has not entered into any transaction with any of its affiliates that has provided
to the Company revenues, earnings or assets that would not
have been available to it in an arm’s length transaction with an unaffiliated Person.


3.26
Export Controls. The Company has at all times conducted its export and related transactions
in all material respects in accordance with (i) all applicable export, re-export, and anti-boycott Laws of the United States, including
the Arms Export Control Act (22 U.S.C.A. § 2278), the Export Administration Act (50 U.S.C. App. §§ 2401-2420), the International
Traffic in Arms Regulations (22 C.F.R. 120-130), and United States economic sanctions Laws administered by the United States Treasury
Department’s Office of Foreign Assets Control and (ii) all other applicable import and export control Laws in any countries in which
the Company conducts business. Without limiting the foregoing:


(a)
The Company has obtained all material export licenses and other material consents, authorizations,
waivers, approvals, and Orders, and have made or filed any
and all necessary notices, registrations, declarations and filings with any Governmental Entity,
and has met the requirements of any license exceptions or exemptions, as required in connection
with (i) the export and re-export of products, services, Software
or technologies, and (ii) releases of technology, technical data or
Software to foreign nationals located in the United States and abroad (“Export
Approvals”).


(b)
The Company is in compliance in all material respects with the terms of all applicable Export
Approvals.


(c)
There are no pending or, to the knowledge of the
Company, threatened Actions against the Company
with respect to Export Approvals.


(d)
To the knowledge of the Company, there are no actions,
conditions or circumstances pertaining to the Company’s export and related transactions that
may give rise to any future Actions.


(e)
No Export Approvals for the transfer of export licenses to Parent
or the Surviving Corporation are required, or such
Export Approvals can be obtained expeditiously without material cost.


(f)
Section 3.28(f) of the Company Disclosure Schedule
sets forth the accurate and complete export control classification numbers applicable to
the Company’s products, services, Software and technologies.


(g)
The Company is not currently violating and has not previously violated any United
States or other applicable Laws involving restrictions or
limitations on the use, development, export of or encryption of technology, and the business
as currently conducted does not require the Company to obtain a license pursuant to any
applicable Laws regulating the development, commercialization or
export of technology.


3.27     
Inventories. The inventory of the Company shown on the most recent balance sheet included in the Financial Statements and
the inventory of the Company as of the Closing Date are stated and will be stated at not more than the lower of cost (on a first-in first-out
basis) or market, and are fit for their particular use, do not and will not include any items below standard quality, defective, damaged
or spoiled, obsolete or of a quality or quantity not usable or salable in the ordinary course of the business of the Company as currently
conducted or any items whose expiration date has passed, the value of which has not been fully written down or reserved against in the
Financial Statements. Schedule 3.29 sets forth a list of all of the Company’s inventory as of the Closing Date.


3.28
Regulatory Compliance.


(a) The
Company is in compliance with all applicable Laws, rules, regulations, and policies administered or enforced by the U.S. FAA, any state
or municipality and similar agencies in which such Company’s products or services are offered or sold, and any other governmental
entity that regulates the development of UAV in any jurisdiction, including, without limitation, relating to state or federal anti-kickback
sales and marketing practices, insurance and bonding, advertising and promotion, pre- and post-marketing reporting, and all other pre-
and post-marketing reporting requirements, as applicable.


(b) Schedule
3.30(b) lists each product developed, manufactured, licensed, distributed or sold by each Company (collectively, the “Products”).
Each Product manufactured by or on behalf of each Company has been manufactured in accordance with (i) the product registration applicable
to such Product, (ii) the specifications under which the Product is normally and has normally been manufactured, (iii) the applicable
provisions of current “CE” or “UL” good manufacturing practices or other governmental authority and (iv) without
limiting the generality of Section 3.30, the provisions of all applicable Laws.


(c) The
Company has obtained all registrations or submissions required for the Products and all amendments and supplements thereto, and all other
Permits required by the FAA to conduct the business as it is currently conducted (the “Regulatory Approvals”). All of the
Regulatory Approvals have been duly and validly issued and are in full force and effect, and the Company is in compliance with each such
permit held by or issued to it. Except as listed on Schedule 3.30(c), the Company is the sole and exclusive owner of the Regulatory Approvals
and holds all right, title and interest in and to all such Regulatory Approvals. The Company has not granted any third party any right
or license to use, access or reference any of the Regulatory Approvals, including without limitation, any of the know-how contained in
any of the Regulatory Approvals or rights (including any regulatory exclusivities) associated with each such Regulatory Approvals.


(d) There
is no action or proceeding by any governmental or regulatory authority pending or, to the knowledge of the Company, threatened, seeking
the recall of any of the Products or the revocation or suspension of any Regulatory Approval. The Company has made available to Purchaser
complete and correct copies of all Regulatory Approvals. In addition, (i) the Company has made available to Purchaser a complete and correct
copy of the Product Data; (ii) to the knowledge of the Company, all laws and regulations applicable to the preparation and submission
of the Regulatory Approvals to the relevant regulatory authorities have been complied with; (iii) to the knowledge of the Company, the
Company has filed with the relevant regulatory authorities all required notices, supplemental applications, and annual or other reports,
including adverse experience reports, with respect to the Regulatory Approvals.


(e) There
exist no set of facts: (i) which could furnish a basis for the recall, withdrawal or suspension of any product registration, product license,
manufacturing license, wholesale dealers license, export license or other license, approval or consent of any domestic or foreign governmental
or regulatory authority with respect to the Company or any of the Products; or (ii) which could furnish a basis for the recall, withdrawal
or suspension of any Product from the market, the termination or suspension of any testing of any Product, or the change in marketing
classification of any Product.


(f) Except
as set forth in Schedule 3.30(f), all Products which have been sold through the Company have been merchantable and free from defects in
material or workmanship for the term of any applicable warranties and under the conditions of any express or implied specifications and
warranties arising under Law and as set forth in the specific order. Except as disclosed in Schedule 3.30(f) hereto, the Company has not
received any claims based on alleged failure to meet the specifications or breach of product warranty arising from any applicable manufacture
or sale of the Products.


(g) As
of the Closing Date, all Product Inventory will conform to the specifications therefor contained in the Regulatory Approvals and to the
Regulatory Approvals and with the requirements of all applicable governmental or regulatory authorities.


(h) The
Company is and has been in compliance with all Laws requiring the maintenance or submission of reports or records under requirements administered
by the FAA or any other governmental authority. Neither the Company, nor any of its employees or agents, have made an untrue or fraudulent
statement to the FAA or any other applicable governmental authorities, or in any records and documentation prepared or maintained to comply
with the applicable Laws, or failed to disclose a fact required to be disclosed to the FAA or any other similar governmental authorities.


(i) The
Company has not been convicted of any crime or engaged in any conduct that could result or resulted in debarment, exclusion or disqualification
by the FAA or any other governmental authority and there are no proceedings pending or, to the knowledge of the Company, threatened that
reasonably might be expected to result in criminal or civil liability or debarment, exclusion or disqualification by the FAA or any other
governmental authority. The Company has not received written notice of or been subject to any other enforcement action involving the FAA
or any other governmental authorities, including any suspension, consent decree, notice of criminal investigation, indictment, sentencing
memorandum, plea agreement, court order or target or no-target letter, and none of the foregoing are pending or, to the Company’s
knowledge, threatened in writing against the Company.


(j) The
Company has security measures and safeguards in place to protect Personally Identifiable Information it collects from customers and other
parties from illegal or unauthorized access or use by its personnel or third parties or access or use by its personnel or third parties
in a manner that violates the privacy rights of third parties. To the knowledge of the Company, the Company has complied in all material
respects with all Applicable Laws relating to privacy and consumer protection and has not collected, received, stored, disclosed, transferred,
used, misused or permitted unauthorized access to any information protected by Applicable Laws related to privacy, whether collected directly
or from third parties, in an unlawful manner. The Company has taken all reasonable steps to protect Personally Identifiable Information
against loss or theft and against unauthorized access, copying, use, modification, disclosure or other misuse.


(k) The
Company is not party to any corporate integrity agreements, monitoring agreements, consent decrees, settlement orders or similar agreements
with or imposed by any governmental authority.


(l) True
and complete copies of all information, data, protocols, study reports, safety reports and/or other relevant documents and materials have
been made available to Purchaser.


3.29     
Banks. Schedule 3.32 sets forth (i) the name of each bank, trust corporation or other financial institution and stock or
other broker with which the Company has an account, credit line or safe deposit box or vault, (ii) the names of all Persons authorized
to draw thereon or to have access to any safe deposit box or vault, (iii) the purpose of each such account, safe deposit box or vault,
and (iv) the names of all Persons authorized by proxies, powers of attorney or other like instrument to act on behalf of the Company in
matters concerning their business or affairs. Except as otherwise set forth in Schedule 3.32, no such proxies, powers of attorney or other
like instruments are irrevocable.


ARTICLE 3-A


REPRESENTATIONS AND WARRANTIES
OF THE STOCKHOLDERS


Each Stockholder hereby represents
and warrants, severally and not jointly, as of the Closing Date to the Purchaser and the Parent as follows:


3.1. Stock
Ownership by Stockholder. The Stockholder has good title to, and is the sole record and beneficial owner of, the Shares set forth
Opposite Stockholder’s name on Schedule 2.1 and the Shares owned by the Stockholder are free and clear of any and all Encumbrances.
The Stockholder is not a party to any voting trusts, Stockholder agreements, proxies or other agreements or understandings in effect with
respect to the voting or transfer of any of the Shares owned by the Stockholder other than such which will terminate upon the consummation
of the transactions contemplated by this Agreement.


3.2. Authorization;
Enforceability. If the Stockholder is an entity, the execution, delivery and performance of this Agreement by the Stockholder and
the consummation by the Stockholder of the transactions contemplated hereby have been duly authorized by all requisite corporate or other
company action on the part of the Stockholder. This Agreement has been duly executed and delivered by the Stockholder, and assuming due
authorization, execution and delivery by Purchaser and Parent, this Agreement constitutes a valid and binding obligation of the Stockholder
enforceable against the Stockholder in accordance with its terms, except to the extent that the enforceability may be limited by bankruptcy,
insolvency, reorganization, moratorium or similar Laws, or by equitable principles relating to the rights of creditors generally.


3.5. No
Conflict; Governmental Consents. The execution, delivery and performance of this Agreement by the Stockholder does not and will not
(i) if the Stockholder is an entity, violate, conflict with or result in the breach of any provision of the charter or by-laws or other
organizational documents of the Stockholder, (ii) conflict with or violate in any material respect any Law or Order applicable to the
Stockholder, or (iii) result in the creation of any Encumbrance on any of the Shares owned by the Stockholder pursuant to, any note, bond,
mortgage, indenture, license, permit, lease, sublease or other Contract to which the Stockholder is a party or by which any of the Shares
owned by the Stockholder. The execution, delivery and performance of this Agreement by the Stockholder does not and will not require any
Approval or Order of any Governmental Entity.


3.6. Additional
Stockholder Representations. (a) Stockholder represents that it is an “accredited investor” as such term is defined in
Rule 501 of Regulation D (“Regulation D”) promulgated under the Securities Act and that the Stockholder is able to bear the
economic risk of an investment in the Parent Shares. Stockholder hereby acknowledges and represents that (i) Stockholder has knowledge
and experience in business and financial matters, prior investment experience, including investment in securities that are non-listed,
unregistered and/or not traded on a national securities exchange or the Stockholder has employed the services of a “purchaser representative”
(as defined in Rule 501 of Regulation D), attorney and/or accountant to read all of the documents furnished or made available by the Parent
to the Stockholder to evaluate the merits and risks of such an investment on the Stockholder’s behalf; (ii) the Stockholder recognizes
the highly speculative nature of this investment; and (iii) the Stockholder is able to bear the economic risk that the Stockholder hereby
assumes.


(b) Stockholder understands
that the Parent Shares have not been registered under the Securities Act by reason of a claimed exemption under the provisions of the
Securities Act that depends, in part, upon Stockholder’s investment intention. In connection with the foregoing, Stockholder hereby
represents that the Stockholder is purchasing the Parent Shares for the Stockholder’s own account for investment and not with a
view toward the resale or distribution to others. The Stockholder, if an entity, further represents that it was not formed for the purpose
of purchasing the Parent Shares. Stockholder understands and hereby acknowledges that the Company is under no obligation to register any
of the Parent Shares under the Securities Act or any state securities or “blue sky” laws.


(c) Stockholder consents
to the placement of a legend on any certificate or other document evidencing the Parent Shares that such Parent Shares have not been registered
under the Securities Act or any state securities or “blue sky” laws and setting forth or referring to the restrictions on
transferability and sale thereof contained in this Agreement. The Stockholder is aware that the Parent will make a notation in its appropriate
records with respect to the restrictions on the transferability of such Parent Shares. The legend to be placed on each certificate shall
be in form substantially similar to the following:


THE SECURITIES REPRESENTED
BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), OR ANY APPLICABLE
STATE SECURITIES LAWS. SUCH SECURITIES HAVE BEEN ACQUIRED FOR INVESTMENT PURPOSES AND MAY NOT BE OFFERED FOR SALE, SOLD, DELIVERED AFTER
SALE, TRANSFERRED, PLEDGED OR HYPOTHECATED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT FILED BY THE ISSUER WITH THE U.S. SECURITIES
AND EXCHANGE COMMISSION COVERING SUCH SECURITIES UNDER THE SECURITIES ACT OR AN OPINION OF COUNSEL SATISFACTORY TO THE ISSUER THAT SUCH
REGISTRATION IS NOT REQUIRED


(b) Except
for the Stockholder’s right to receive the Merger Consideration payable and issuable to such Stockholder and except for such Stockholder’s
other rights under this Agreement, Stockholder irrevocably and unconditionally fully and forever waives, releases, and discharges each
of Company, Parent, Purchaser, and each of Company’s officers and directors, employees, attorneys, agents, affiliates or assigns
(“Released Parties”), from any and all actions, causes of action, suits, losses, liabilities, rights, debts, dues, sums of
money, accounts, reckonings, obligations, costs, expenses, liens, bonds, bills, specialties, covenants, contracts, controversies, agreements,
promises, variances, trespasses, damages, judgments, extents, executions, claims, and demands, of every kind and nature whatsoever, whether
now known or unknown, foreseen or unforeseen, matured or unmatured, suspected or unsuspected, written or oral, in law, admiralty, or equity,
which Stockholder has, ever had, or now has as against any such Released Parties for, upon, or by reason of any matter, cause, or thing
whatsoever from the beginning of time through the date of this Agreement arising out of or relating to any business transactions between
the Stockholder and the Released Parties.


Article
4

Representations and Warranties of Parent and THE Purchaser


Parent and the Purchaser
hereby represent and warrant to the Company and the Stockholders as follows:


4.1
Organization and Qualification. Each of the Parent and the Purchaser is a corporation duly organized, validly existing and
in good standing under the Laws of its jurisdiction of incorporation and has all requisite corporate power and corporate authority to
own, lease and operate its properties and assets and to carry on its business as currently conducted. Each of the Parent and the Purchaser
is duly qualified to do business and is in good standing in each jurisdiction where the ownership, leasing or operation of its properties
or assets or the conduct of its business requires such qualification, except where the failure to be so qualified or in good standing,
individually or in the aggregate, has not had a Parent Material Adverse Effect.


4.2
Authority. Each of the Parent and the Purchaser has all necessary corporate power and corporate authority to execute and
deliver this Agreement, to perform its obligations hereunder and to consummate the transactions contemplated hereby, including the Merger.
The execution and delivery of this Agreement by each of the Parent and the Purchaser, as applicable, and the consummation by the Parent
and the Purchaser of the transactions contemplated hereby, including the Merger, have been duly and validly authorized by all necessary
corporate action, and no other corporate proceedings on the part of the Parent or the Purchaser and no stockholder votes are necessary
to authorize this Agreement or to consummate the transactions contemplated hereby other than, with respect to the Merger, the filing of
the Certificate of Merger with the Secretary of State of the State of Delaware in accordance with the DGCL. This Agreement has been duly
authorized and validly executed and delivered by the Parent and the Purchaser and, assuming due authorization, execution and delivery
by the Company, constitutes a legally valid and binding obligation of the Parent and the Purchaser, enforceable against the Parent and
the Purchaser in accordance with its terms (except as such enforceability may be limited by applicable bankruptcy, insolvency, fraudulent
transfer, reorganization, moratorium and other similar Laws affecting creditors’ rights generally and subject to the effect of general
principles of equity, whether considered in a proceeding in equity or at law).


4.3
No Conflict. None of the execution, delivery or performance of this Agreement by the Parent or the Purchaser, the consummation
by the Parent or the Purchaser of the Merger or any other transaction contemplated by this Agreement, or compliance by Parent or the Purchaser
with any of the provisions of this Agreement will (with or without notice or lapse of time, or both): (a) conflict with or violate any
provision of the certificate of incorporation or bylaws (or any equivalent organizational or governing documents) of Parent or the Purchaser;
(b) assuming that all consents, approvals, authorizations and permits described in Section 4.4 have been obtained and all
filings and notifications described in Section 4.4 have been made and any waiting periods thereunder have terminated or expired,
conflict with or violate any Law applicable to Parent or the Purchaser or any other Subsidiary of Parent (each a “Parent Subsidiary”)
or any of their respective properties or assets; or (c) require any consent or approval under, violate, conflict with, result in any breach
of or any loss of any benefit under, or constitute a default under, or result in termination or give to others any right of termination,
vesting, amendment, acceleration or cancellation of, or result in the creation of a Lien upon any of the respective properties or assets
of Parent, the Purchaser or any Parent Subsidiary pursuant to any Contract or permit to which Parent, the Purchaser or any Parent Subsidiary
is a party or by which they or any of their respective properties or assets may be bound or affected, except, with respect to clauses
(b) and (c), for any such conflicts, violations, consents, breaches, losses, defaults, other occurrences or Liens which, individually
or in the aggregate, have not had a Parent Material Adverse Effect.


4.4
Required Filings and Consents. Assuming the accuracy of the representations and warranties of the Company in Section 3.5,
none of the execution, delivery or performance of this Agreement by Parent and the Purchaser, the consummation by Parent and the Purchaser
of the Merger or any other transaction contemplated by this Agreement, or compliance by Parent or the Purchaser with any of the provisions
of this Agreement will require (with or without notice or lapse of time, or both) any consent, approval, authorization or permit of, or
filing or registration with or notification to, any Governmental Entity or any other Person, other than (a) the filing of the Certificate
of Merger as required by the DGCL, (b) the filing of the Certificate of Designation for Parent Series C Preferred with the Secretary of
State of the State of Delaware, (c) the approval of a majority in interest of the Parent Common Stock, (d) compliance with the applicable
requirements of the Exchange Act and the Securities Act, (e) filings with the SEC as may be required by the Company in connection with
this Agreement, the approval set forth in Subsection c hereof and the transactions contemplated hereby, (f) such filings as may be required
under the rules and regulations of NASDAQ, and (g) where the failure to obtain such consents, approvals, authorizations or permits of,
or to make such filings, registrations with or notifications to any Governmental Entity or any other Person, individually or in the aggregate,
has not had a Parent Material Adverse Effect.


4.5
Litigation


. There is no Action pending or, to the knowledge
of Parent, threatened against or affecting Parent or the Purchaser, or any executive officer or director of Parent or the Purchaser, that,
individually or in the aggregate, has had a Parent Material Adverse Effect.


4.6 Authorized
Stock. The Parent Series C Preferred has the rights privileges and preferences set forth in the Certificate of Designation. The Parent’s
authorized capital stock consists solely of the Parent Common Stock, Parent Series A Preferred Stock and Parent Series B Preferred Stock
and, upon the filing of the Certificate of Designation, the Parent Series C Preferred. The Series A Preferred Stock and Series B Preferred
Stock of Parent have the rights, privileges and preferences set forth in the respective Certificates of Designation for such series. Upon
the NASDAQ Approval, the Parent will have sufficient authorized shares of Parent Common Stock for issuance upon the conversion of the
shares of Parent Series C Preferred and the Earn-Out Shares.


4.7 Ownership
of the Purchaser; No Prior Activities. The Purchaser was formed solely for the purpose of engaging
in the transactions contemplated by this Agreement. Except for obligations or liabilities incurred in connection with its incorporation
or organization and the transactions contemplated by this Agreement, the Purchaser has not and will not prior to the Closing Date have
incurred, directly or indirectly, through any Subsidiary or otherwise, any obligations or liabilities or engaged in any business activities
of any type or kind whatsoever or entered into any Contracts with any Person.


4.8 Brokers.
Neither the Parent, the Purchaser nor any of their respective stockholders, directors, officers, employees or affiliates, has incurred
or will incur on behalf of Parent, the Purchaser or any Parent Subsidiary, any brokerage, finders’, advisory or similar fee in connection
with the transactions contemplated by this Agreement.


4,9SEC Reports;
Financial Statements.


(a)
Since May 1, 2021, the Parent has timely filed or furnished all necessary forms, reports and other documents required to be filed
or furnished by it with the SEC (including any amendments thereof and the exhibits thereto and documents incorporated by reference therein,
the “SEC Reports”), or has received a valid extension of such time of filing and has filed any such SEC Reports
prior to the expiration of any such extension, except where the failure to file on a timely basis would not have or reasonably be expected
to result in a Material Adverse Effect. To the knowledge of Parent, as of each of its respective dates, each SEC Report has complied in
all material respects with the requirements of the Securities Act and the Exchange Act and relevant rules of The Nasdaq Capital Market,
as the case may be, and none of the SEC Reports, when filed or as of its effective dates, contained any untrue statement of a material
fact or omitted to state a material fact required to be stated therein or necessary in order to make the statements therein, in the light
of the circumstances under which they were made, not misleading.


(b)
The financial statements of the Parent included in the SEC Reports comply as to form in all material respects with the published
rules and regulations of the SEC with respect thereto and all other applicable accounting requirements as in effect at the time of filing
(or to the extent corrected by a subsequent restatement).


(c)
Except as disclosed in SEC Reports filed prior to the date of this Agreement, from the date of the most recent consolidated balance
sheet of the Parent and its subsidiaries that are disclosed in the SEC Reports through the date of this Agreement, there have been no
events, occurrences or developments that have had or would reasonably be expected to have, either individually or in the aggregate, a
Material Adverse Effect.


 


Article
5

Covenants


5.1
Conduct of Business by the Company Pending the Closing. The Company agrees that,
between the date of this Agreement and the Effective Time, except as set forth in Section 5.1 of the Company Disclosure Schedule,
as expressly required by applicable Law or as contemplated by this Agreement or otherwise with the prior written consent of Parent, the
Company will (i) conduct its business only in the ordinary and usual course of business and consistent with past practice, and (ii) use
its commercially reasonable efforts to keep available, in all material respects, the services of the current officers, employees and consultants
of the Company and preserve, in all material respects, the goodwill and current relationships of the Company with Significant Customers,
Significant Suppliers and other Persons with which the Company has significant business relationships material to the business of the
Company. Without limiting the foregoing, and as an extension thereof, except as set forth in Section 5.1 of the Company Disclosure
Schedule, as expressly required by applicable Law or contemplated by this Agreement, or otherwise with the prior written consent of Parent,
the Company shall not, between the date of this Agreement and the Effective Time, directly or indirectly, do any of the following:


(a)
amend or otherwise change its certificate of incorporation or
bylaws;


(b)
issue, deliver, sell, transfer, pledge, dispose of, grant a Lien or permit a Lien
to exist on, or authorize, propose or agree to the
issuance, delivery, sale, transfer, pledge or disposition of or
granting or placing a Lien on, any shares of any
class of capital stock of, or other Equity Interests in,
the Company, or securities convertible into or
exchangeable for, or options, warrants, calls, commitments or
rights of any kind to acquire, any shares of any class of capital stock or other Equity Interests
of the Company (including, for the avoidance of doubt, through the adoption of any stockholder
rights plan or “poison pill” agreement), other than (i) pursuant to the requirements
of Contracts of the Company as in existence on the date
of this Agreement and which are set forth on Section 5.1(b)(i)
of the Company Disclosure Schedule or (ii) pursuant to the vesting and/or
exercise of Company Options, Restricted Shares and
Company Warrants and other contractual rights that are in existence on the date hereof
and in accordance with their current terms;


(c)
sell, pledge, dispose of, transfer, lease, license, guarantee, encumber, abandon or permit
to lapse any material property or assets (including Intellectual
Property Rights) of the Company, except to grant nonexclusive licenses to customers for use of Company’s
products and services in the ordinary course of business consistent with past practice;


(d)
declare, set aside, make or pay any dividend or other
distribution (whether payable in cash, stock, property or a combination thereof) with respect to
any of its capital stock or enter into any Contract
with respect to the voting or registration of its capital stock;


(e)
adjust, reclassify, combine, split, subdivide or amend the terms of, or
redeem, purchase or otherwise acquire, directly or indirectly,
any of its capital stock or other Equity Interests;


(f)
merge or consolidate the Company with any Person or adopt
a plan of complete or partial liquidation or resolutions
providing for a complete or partial liquidation, dissolution, restructuring, recapitalization or
other reorganization of the Company;


(g)
acquire (including, without limitation, by merger, consolidation, or
acquisition of stock or assets) any interest or make
any investment in any Person, other than acquisitions of goods and services in
the ordinary course of business consistent with past practice;


(h)
incur any indebtedness for borrowed money in excess of $20,000 or issue any debt securities
or assume, guarantee or endorse, or
otherwise as an accommodation become responsible for (whether directly, contingently or otherwise),
the obligations of any Person for borrowed money;


(i)
make any loans, advances or capital contributions to, or
investments in, any other Person other than in the ordinary
course of business consistent with past practice in excess of $10,000 in the aggregate;


(j)
terminate, cancel, renew, or request or agree to
any material change in or waiver under, any Company Material Contract,
enter into any Contract that, if existing on the date hereof,
would be a Company Material Contract, or amend any Contract
in existence on the date hereof that, after giving effect to such amendment, would be a
Company Material Contract;


(k)
make or authorize any capital expenditure in excess of $10,000
individually or $20,000 in the aggregate;


(l)
hire or terminate any officer or employee (except
with respect to non-executive employees with aggregate annual compensation below $50,000);


(m)   
 except as required to comply with any Law or any Benefit
Plan or Benefit Agreement as in effect on the date of this Agreement, (A)
pay, announce, promise or grant, whether orally or in writing,
increase or establish (each, as applicable) any wages, base pay, fees, salaries, bonuses, incentives,
deferred compensation, pensions, severance or termination payments, change of control
or retention payments, retirement, profit-sharing, fringe benefits, equity or equity-linked
awards, employee benefit plans, or any other form of compensation
or benefits payable by the Company to any Participant,
including without limitation, any increase or change pursuant
to any Benefit Plan or Benefit Agreement, (B) adopt, establish,
enter into, amend, modify or terminate any Benefit Plan,
Benefit Agreement or collective bargaining, employee association, works council or
similar Contract, (C) enter into any trust, annuity
or insurance agreement or similar Contract
or take any other action to fund or otherwise secure
the payment of any compensation or benefit or (D) take any
action to accelerate the time of vesting or payment of any
compensation or benefit or (ii) take any action, directly or indirectly, that accelerates the vesting
or accelerates the lapse of forfeiture or other restrictions on equity securities of the Company;


(n)
forgive any loans to directors, officers, employees or any of their respective affiliates;


(o)
pre-pay any long-term debt; or waive, release, pay, discharge or
satisfy any liabilities or obligations (absolute, accrued, contingent or
otherwise), except in the ordinary course of business consistent with past practice and
in accordance with their terms;


(p)
make any change in accounting policies, practices, principles, methods or procedures, other
than as required by GAAP or by a Governmental Entity;


(q)
commence, compromise, settle or agree to settle any Action
(including any Action relating to this Agreement
or the transactions contemplated hereby) other than those made in
the ordinary course of business consistent with past practice and which involve only the payment of monetary damages not in excess
of $10,000 individually or $20,000 in the aggregate, in
any case without the imposition of equitable relief on, or the admission of wrongdoing by, the
Company;


(r)
make or change any material election with respect to Taxes;
adopt or change any material accounting method with respect to Taxes;
amend any United States federal or material other Tax
Return; enter into any private letter ruling, closing agreement or similar ruling or
Contract with the IRS or any other Tax authority;
enter into any Tax allocation agreement, Tax indemnity agreement,
Tax sharing agreement or similar Contract
with respect to Taxes; consent to any extension or waiver
of the statute of limitations period applicable to any material Tax claim or
assessment; settle any Action with respect to a material amount of Taxes
or forego any material Tax refund;


(s)
write up, write down or write off the book value of any assets, in the aggregate, in excess
of $10,000 individually or $20,000 in the aggregate, except for depreciation and amortization in
accordance with GAAP consistently applied;


(t)
convene any regular or special meeting (or any adjournment
thereof) of the stockholders of the Company other than the Special
Meeting (if such a meeting is required by applicable Law);


(u)
fail to keep in force Insurance Policies or replacement or
revised provisions providing insurance coverage with respect to the assets, operations and activities of the Company
as are currently in effect;


(v)
make any change in its investment policies with respect to cash or marketable securities;


(w)   
grant to any Third Party any assignment, license, covenant not to sue, release, immunity
or other right with respect to the Company Intellectual Property (other than nondisclosure
agreements, end user license agreements, and terms of use entered into in the ordinary course of business on Company’s
applicable standard form agreement without material changes ) or acquire from a Third
Party a grant of any assignment, license, covenant not to sue, release, immunity or other right
with respect to Intellectual Property or Intellectual Property Rights, other than employment
agreements between Company and its employees and non-exclusive, proprietary (i.e., non-Open
Source), inbound Software licenses generally commercially available on commercially reasonable
terms with annual license fees under $10,000 in the aggregate that do not relate to Intellectual
Property or Intellectual Property Rights incorporated into any Company Offering; or


(x)
authorize or enter into any Contract or otherwise
make any commitment to do any of the foregoing.


5.2
Meeting of Stockholders to Approve the Merger. If approval of the stockholders of
the Company is required under applicable Law to consummate the Merger, the Company shall, in accordance with and subject to the requirements
of applicable Law: as promptly as practicable (i) set a record date for, call and give notice of a special meeting of its stockholders
(the “Special Meeting”) for the purpose of considering and taking action upon this Agreement (with the record date
to be set in consultation with the Purchaser), or (ii) prepare and deliver to its stockholders a written consent in lieu of the Special
Meeting pursuant to Section 228 of the DGCL and in each case use its commercially reasonable efforts to solicit from its stockholders
proxies in favor of the approval of this Agreement and the Merger, and secure any approval of stockholders of the Company that is required
by applicable Law to effect the Merger.


5.3
Access to Information.


(a)
From the date of this Agreement until the Effective Time,
the Company shall and each of its directors, officers, employees, accountants, consultants, legal
counsel, advisors, agents and other representatives (collectively, “Company Representatives”),
to: (i) provide to Parent and the Purchaser
and their respective officers, directors, employees, accountants, consultants, legal counsel, advisors, agents and other representatives
(collectively, the “Parent Representatives”) access at reasonable times upon
reasonable prior notice and in a manner that does not unreasonably disrupt or interfere with business
operations, to the officers, employees, agents, properties, offices and other facilities of the Company
and to the books and records thereof (including Tax Returns) and (ii)
furnish promptly such information concerning the business, properties, offices and other facilities, Contracts,
assets, liabilities, employees, officers and other aspects of the Company as Parent or the Parent
Representatives may reasonably request. No investigation conducted pursuant to this Section 5.3(a)
shall affect or be deemed to modify or limit any representation
or warranty made by the Company in this Agreement.


5.4
No Solicitation.


(a)
Except as expressly permitted by this Section 5.4, effective on the date of
this Agreement, the Company shall, and shall cause each
Company Representative to, (i) immediately cease and
cause to be terminated any existing solicitation, encouragement, discussion or negotiation with
any Third Party (other than Parent) that may be and (ii) request
any such Third Party to promptly return or destroy all confidential
information concerning the Company.


(b)
Except as expressly permitted by this Section 5.4, the Company
shall not, and shall cause each Company Representative not to, at all times from the date
of this Agreement until the earlier of the Effective Time and
the date, if any, on which this Agreement is terminated pursuant to Article
7, directly or indirectly: (i) solicit,
initiate, or knowingly facilitate or knowingly encourage
(including by providing non-public information) any inquiry, discussion, offer or
request that constitutes, or would reasonably be expected to lead to, any proposal, (ii) engage
in, enter into, continue or otherwise participate in any discussions or
negotiations with, or furnish any non-public information relating to the Company
to, or afford access to the books or records or
officers of the Company to, any Third Party relating
to any proposal or any proposal or offer that would reasonably
be expected to lead to a proposal, (iii) approve, endorse, recommend, execute or
enter into, or publicly propose to approve, endorse, recommend, execute or
enter into any letter of intent, memorandum of understanding, agreement in principle, acquisition agreement, merger
agreement or similar definitive Contract (other than an Acceptable
Confidentiality Agreement) with respect to any proposal (an “Alternative Acquisition Agreement”),
(iv) take any action to make the provisions of any
Takeover Statute (including Section 203 of the DGCL) or any applicable anti-takeover provision
in the Company’s organizational documents inapplicable to any transactions contemplated by
a proposal, (v) terminate, amend, release, modify or
fail to enforce any provision of, or grant any permission, waiver or
request under, any standstill, confidentiality or similar Contract
entered into by the Company in respect of or in contemplation
of a proposal or (vi) propose, resolve or agree to do any
of the foregoing, in each case for any acquisition, sale, merger, sale of assets or Shares or other change of control of the Company.


5.5
Appropriate Action; Consents; Filings.


The Company, Stockholders
and Parent shall use (and cause their respective Subsidiaries to use) their commercially reasonable efforts to (i) take, or cause to be
taken, all appropriate action and do, or cause to be done, all things necessary, proper or advisable under applicable Law or otherwise
to consummate and make effective the transactions contemplated by this Agreement as promptly as practicable, including those matters set
forth on Section 5.5(a) of the Company Disclosure Schedule, (ii) obtain from any Governmental Entities any consents, licenses,
permits, waivers, approvals, authorizations or orders required to be obtained by Parent or the Company or any of their respective Subsidiaries,
or to avoid any Action or Order by any Governmental Entity, in connection with the authorization, execution and delivery of this Agreement
and the consummation of the transactions contemplated hereby, the Merger and (iii) promptly make all necessary filings, and thereafter
make any other required submissions, and pay any fees due in connection therewith, with respect to this Agreement, and the Merger required
under (A) the Exchange Act, the Securities Act and any other applicable securities Laws, and (B) any other applicable Law, if any; provided,
that the Company and Parent shall cooperate with each other in all respects in connection with (x) preparing and filing the Proxy
or Information Statement required to be filed by Parent with the SEC and any other filings made or required to be made with the SEC and
NASDAQ in connection with the Merger and the transactions contemplated thereby, (y) and determining whether any other action by or
in respect of, or filing with, any Governmental Entity is required, in connection with the Merger and (z) seeking any such actions, consents,
approvals or waivers or timely making any such filings. The Company and Parent shall furnish to each other all information required for
any application or other filing under any applicable Law in connection with the transactions contemplated by this Agreement. The Company
and Parent may, as each deems advisable and necessary, reasonably designate any competitively sensitive material provided to the other
pursuant to this Section 5.5 as “Outside Counsel Only Material.” Notwithstanding anything to the contrary in this
Section 5.5, materials provided to the other party or its counsel may be redacted to remove references concerning the valuation
of the Company and any Company Subsidiaries. The information supplied by the Company or Stockholders in writing expressly for inclusion
or incorporation by reference in any Parent Proxy or Information Statement (and any amendment thereof or supplement thereto) will not,
at the dates filed with the SEC and mailed to the Parent’s stockholders and at the time of any Meeting or Consent, contain any untrue
statement of a material fact or omit to state any material fact required to be stated therein or necessary in order to make the statements
made therein, in light of the circumstances under which they are made, not misleading.


(a)The Company
and Parent shall give (or shall cause their respective
Subsidiaries to give) any notices to Third Parties, and
use, and cause their respective Subsidiaries to use, their commercially
reasonable efforts to obtain any Third Party consents (i)
necessary, proper or advisable to consummate the transactions contemplated by this Agreement,
(ii) required to be disclosed in the Company Disclosure Schedule
or (iii) required to prevent a Company Material Adverse Effect from occurring prior to or
after the Effective Time; provided, however, that the Company
and Parent shall coordinate and cooperate in determining whether any actions, consents,
approvals or waivers are required to be obtained from parties to any Company
Material Contracts in connection with the Merger and seeking any such actions, consents,
approvals or waivers. In the event that either party shall fail to obtain any Third
Party consent described in the first sentence of this Section 5.5(b), such party
shall use commercially reasonable efforts, and shall take any such actions reasonably requested
by the other party hereto, to minimize any adverse effect upon the Company
and Parent, their respective Subsidiaries, and their
respective businesses resulting, or which could reasonably be expected to result, after the Effective
Time, from the failure to obtain such consent. Notwithstanding anything to the contrary in this Agreement,
in connection with obtaining any approval or consent from any Person
with respect to the Merger, (i) without the prior
written consent of Parent, none of the Company shall pay
or commit to pay to such Person whose approval or
consent is being solicited any cash or other consideration, make any commitment or
incur any liability or other obligation due to such Person
and (ii) neither Parent nor the Purchaser
shall be required to pay or commit to pay to such Person
whose approval or consent is being solicited any cash or
other consideration, make any commitment or incur any liability or
other obligation.


(b)
Without limiting the generality of anything contained in this Section 5.5, each
party hereto shall: (i) give the other parties prompt notice
of any request, inquiry, objection, charge or other Action,
actual or threatened, by or before the United
States Federal Trade Commission (“FTC”), the United
States Department of Justice (“DOJ”) or
any other applicable Governmental Entity or any Third Party
with respect to the Merger or any of the other transactions contemplated by this Agreement,
(ii) keep the other parties informed as to the status of any such request, inquiry, objection,
charge or other Action and (iii)
promptly inform the other parties of any communication to or from any Governmental
Entity or any Third Party regarding the Merger. Each
party hereto will (i) use its commercially reasonable efforts to
resolve any such request, inquiry, objection, charge or other Action,
and to have vacated, lifted, reversed or overturned any Order,
whether temporary, preliminary or permanent, that is in effect and that prohibits, prevents or
restricts consummation of the transactions contemplated by this Agreement, which shall include
litigating or contesting any such Action or Order to a final, non-appealable decision, (subject in all respects to the provisions regarding
the Outside Date set forth in Section 1.1(e) and Section 7.1(k)) so as to permit consummation of the transactions
contemplated by this Agreement and (ii) consult and cooperate
with the other parties and consider in good faith the views of the other parties in connection with any filing, analysis, appearance,
presentation, memorandum, brief, argument, opinion or proposal made or
submitted in connection with the Merger or any of the other transactions contemplated by
this Agreement (such cooperation shall include consultation
with each other in advance of any meeting or conference with the FTC,
the DOJ or any other Governmental Entity or, in connection
with any Action by a Third Party, with any other Person,
and to the extent permitted by the FTC, the DOJ or such
other applicable Governmental Entity or other Person, providing
the other party the opportunity to attend and participate in such meetings and conferences).


(c)
Notwithstanding the foregoing or any other provision of this Agreement
(but subject in all respects to Section 5.1), (i) nothing in this Section 5.5
shall limit a party’s right to terminate this Agreement pursuant to Article
7 hereof and (ii) nothing in this Agreement shall
obligate Parent, the Purchaser or any of their respective
affiliates to agree to (and the Company shall not, without the prior written consent of Parent):
(A) sell, hold separate or otherwise dispose of all or
a portion of its business, assets or properties, or conduct
its business in a specified manner, (B) pay any amounts (other than the payment of filing fees
and expenses and fees of counsel), or grant any counterparty
to any Contract any material accommodation, (C) limit in
any manner whatsoever the ability of such entities to conduct, own, operate or control any of their
respective businesses, assets or properties or of the businesses,
properties or assets of the Company or (D) waive any of
the conditions set forth in this Agreement.


5.6
Certain Notices. From and after the date of this Agreement until the Effective Time, each party hereto shall promptly notify
the other party hereto of (a) the occurrence, or non-occurrence, of any event that would reasonably be likely to cause any condition to
the obligations of any party to effect the Merger or any other transaction contemplated by this Agreement not to be satisfied or (b) the
failure of the Company or Parent, as the case may be, to comply with or satisfy any covenant, condition or agreement to be complied with
or satisfied by it pursuant to this Agreement which would reasonably be expected to result in any condition to the obligations of any
party to effect the Merger or any other transaction contemplated by this Agreement not to be satisfied; provided, however,
that the delivery of any notice pursuant to this Section 5.6 shall not cure any breach of any representation, warranty, covenant
or agreement contained in this Agreement or otherwise limit or affect the remedies available hereunder to the party receiving such notice.


5.7
Public Announcements. The initial press release with respect to this Agreement, the Merger and the other transactions contemplated
hereby shall be a joint release mutually agreed upon by the Company and Parent. Thereafter, none of the parties shall (and each of the
parties shall cause its representatives and affiliates, if applicable, not to) issue any press release or make any public announcement
concerning this Agreement, the Merger or the other transactions contemplated hereby without obtaining the prior written consent of (a) the
Company, in the event the disclosing party is Parent, the Purchaser, any of its affiliates or any Parent Representative, or (b) Parent,
in the event the disclosing party is the Company, or any Company Representative, in each case, with such consent not to be unreasonably
conditioned, delayed or withheld; provided, however, that (i) if a party determines, based upon advice of counsel, that
a press release or public announcement is required by applicable Law or the rules or regulations of any applicable stock exchange, such
party may make such press release or public announcement, in which case the disclosing party shall use its commercially reasonable efforts
to provide the other parties reasonable time to comment on such release or announcement in advance of such issuance, (ii) this Section
5.7 shall terminate upon a Adverse Recommendation Change and (iii) each of the parties may make public statements in response to specific
questions by the press, analysts, investors or those attending industry conferences or financial analyst conference calls, so long as
any such statements are not materially inconsistent with previous press releases, public disclosures or public statements made jointly
by Parent and the Company and do not reveal material, non-public information regarding the other parties, the Merger or the transactions
contemplated hereby.


5.8
Indemnification of Directors and Officers.


(a)
Parent and the Surviving Corporation agree that all
rights of indemnification, exculpation and limitation of liabilities existing in favor of past and present directors and officers of the
Company as provided in the Company Charter, the Company
Bylaws or under any indemnification, employment or other similar Contracts
between such past and present directors and officers of the Company and the Company,
in each case as in effect on the date of this Agreement with respect to acts or
omissions in their capacity as directors or officers occurring at or
prior to the Effective Time, shall survive the Merger and
continue in full force and effect in accordance with their respective terms (unless otherwise required by applicable Law).
From and after the Effective Time, Parent shall cause the
Surviving Corporation to pay and perform in a timely manner such indemnification obligations. Subject
to Section 5.8(c), for a period of six years from and after the Effective
Time, Parent shall cause the certificate of incorporation and bylaws of the Surviving
Corporation to contain provisions no less favorable with respect to indemnification, exculpation, and advancement of expenses
of directors and officers than are currently set forth in the Company Charter and the Company
Bylaws (unless otherwise required by applicable Law).


(b)
For a period of six years from and after the Effective Time, the Surviving
Corporation/Parent shall maintain for the benefit of the Company’s directors and officers,
as of the Effective Time, an insurance and indemnification policy that provides coverage for events
occurring prior to the Effective Time (the “D&O Insurance”) that is substantially
equivalent to and in any event not less favorable in the aggregate than the Company’s existing
policy (accurate and complete copies of which have been previously provided to Parent) or,
if substantially equivalent insurance coverage is unavailable, the best available coverage; provided, however, that the
Surviving Corporation shall not be required to pay an annual premium for the D&O
Insurance in excess of 300% of the last annual premium paid prior to the date of this Agreement,
which premium the Company represents and warrants to be as set forth on Section 5.8(b)
of the Company Disclosure Schedule. The provisions of the immediately preceding sentence shall
be deemed to have been satisfied if prepaid policies are obtained by Parent prior to the Effective
Time, which policies provide such directors and officers with substantially equivalent coverage for an aggregate period of six
years with respect to claims arising from facts or events that occurred on or
before the Effective Time, including, without limitation,
in respect of the transactions contemplated by this Agreement. If such prepaid policies have been
obtained prior to the Effective Time, the Surviving Corporation
shall maintain such policies in full force and effect, and continue to honor the obligations thereunder.


(c)
In the event Parent or the Surviving Corporation (i) consolidates
with or merges into any other Person and shall not be the
continuing or surviving corporation or entity of such consolidation or
merger or (ii) transfers all or substantially all
of its properties and assets to any Person, then proper provision shall be made so that such continuing
or surviving corporation or entity or transferee of such
assets, as the case may be, shall assume the obligations set forth in this Section 5.8.


(d)
The obligations under this Section 5.8 shall not be terminated or
modified in such a manner as to adversely affect in any material respect any indemnitee to whom this Section 5.8
applies without the consent of such affected indemnitee, subject to applicable Law (it being expressly
agreed that the indemnitees to whom this Section 5.8 applies shall be third
party beneficiaries of this Section 5.8).


5.9
State Takeover Laws. If any Takeover Statute becomes or is deemed to be applicable to the Company, Parent or the Purchaser,
the execution, delivery or performance of this Agreement, the Merger, including the acquisition of Shares pursuant thereto, or any other
transaction contemplated by this Agreement, then the Company Board shall take all action necessary to render such Law inapplicable to
the foregoing.


5.10
Section 16 Matters. Prior to the Effective Time, the Company Board, or
an appropriate committee of non-employee directors thereof, shall adopt a resolution consistent with the interpretive guidance of the
SEC so that the disposition by any officer or director of the Company who is a “covered person” of the Company for purposes
of Section 16 of the Exchange Act and the rules and regulations thereunder (“Section 16”) of Shares or Company
Options pursuant to this Agreement, and the Merger, shall be an exempt transaction for purposes of Section 16.


5.11
Employees.


(a)
Nothing in this Agreement shall restrict the right of Parent
or any of its affiliates (including the Surviving Corporation)
to terminate the employment of any employee after the Closing Date.  The provisions of this
Section 5.11 are solely for the benefit of the parties to this Agreement,
and no employee or former employee of the Company or any
other individual associated therewith or any Benefit Plan or trustee
thereof shall be regarded for any purpose as a third party beneficiary of this Agreement,
and nothing herein shall be construed as an amendment or other
modification of any Benefit Plan for any purpose.  In addition, nothing in this Agreement
shall be construed to create any right to any particular term or condition of employment
or limit the right of Parent or any of its affiliates (including
the Surviving Corporation) to amend or terminate
or otherwise modify any Benefit Plan following the Effective
Time.


5.12
Benefit Plans. Effective as of the day prior to the Effective Time, the Company will
terminate any and all Benefit Plans intended to qualify as a qualified cash or deferred arrangement under Section 401(k) of the Code,
and effective as of the day immediately prior to the Effective Time no employee of the Company shall have any right thereafter to contribute
any amounts to any Benefit Plan intended to qualify as a qualified cash or deferred arrangement under Section 401(k) of the Code.
At the request of Parent, the Company will provide Parent with evidence that each such Benefit Plan has been terminated effective as of
the day immediately prior to the Effective Time pursuant to resolutions duly adopted by the Company Board. In addition, at the request
of Parent, the Company and each Company Subsidiary will terminate any and all other Benefit Plans, including any group health, dental,
severance, separation or salary continuation plans, programs or arrangements, effective either the day immediately prior to the Effective
Time or thereafter as specified by Parent and, at the request of Parent, the Company will provide Parent with evidence that such Benefit
Plans have been so terminated pursuant to resolutions duly adopted by the Company Board. The Company also shall take such other actions
in furtherance of terminating such Benefit Plans as Parent may reasonably require.


5.13
Stockholder Litigation. The Company shall control, and the Company shall give Parent the opportunity to participate in the
defense of, any Action brought by stockholders of the Company against the Company and/or its directors relating to the transactions contemplated
by this Agreement, including the Merger; provided, however, that the Company shall not compromise, settle, come to an arrangement
regarding or agree to compromise, settle or come to an arrangement regarding any Action arising or resulting from the transactions contemplated
by this Agreement, or consent to the same without the prior written consent of Parent (which consent shall not be unreasonably withheld
or delayed).


5.14
Obligations of the Purchaser. Parent will take all actions necessary to cause the
Purchaser to perform its obligations under this Agreement and to consummate the Merger on the terms and conditions set forth in this Agreement.


5.15     
Escrow Agreement. At the Closing, Parent. Stockholders and the Escrow Agent shall execute and deliver an Escrow Agreement
in form and substance satisfactory to Parent and Escrow Agent (the “Escrow Agreement”) and a Designation of Proportionate
Allocation and Distribution of Aggregate Purchase Price agreement (the “Proportionate Share Agreement”) appointing
George Matus as Stockholder Representative for purposes of the Escrow Agreement and designating the Merger Consideration to be deposited
pursuant to Section 2.1 (e) hereof by each Stockholder to be held pursuant to the Escrow Agreement and hereunder in form and substance
acceptable to Parent, Stockholders and the Escrow Agent. The Escrow Shares shall be valued at the Agreed Parent Share Price in the event
claims have been asserted under Section 2.1 or Article 9 hereof.


5.16     
Notice of Developments. During the period from the date of this Agreement to the Closing Date, each party will give prompt
written notice after discovery thereof to the others of any material adverse development causing a breach of any of such party’s
representations, warranties and covenants set forth herein. No disclosure by any party pursuant to this Section 5.19, however, shall be
deemed to amend or supplement the Disclosure Schedules or to prevent or cure any misrepresentation or breach of warranty.


5.17     
Company Financial Statements. Within forty-five (45) days following the execution of this Agreement, the Company shall prepare
and deliver to Parent US GAAP audited financial statements prepared by a PCAOB (Public Company Accounting Oversight Board) firm in such
form and for such periods as is required to be filed in a Current Report on Form 8-K by Parent to be filed with the SEC following Closing
(prior two full fiscal years) (the “Audited Financial Statements”) as well as unaudited reviewed quarterly financial
information as is required to be filed in a Current Report on form 8-K by Parent for such quarterly periods as are required to be filed.
The Company shall, not later than thirty (30) days after execution of this Agreement, deliver to the Parent its opening balance sheet
audited by a PCAOB firm as well as pro forma financial statements of the post-Transaction balance sheet of the Parent and Company, on
a consolidated basis, and such additional information as is required by Parent.


 


Article
6

Conditions to Consummation of the Merger


6.1
Conditions to Obligations of Each Party Under This Agreement. The respective obligations
of each party to consummate the Merger shall be subject to the satisfaction at or prior to the Effective Time of each of the following
conditions:


(a)
This Agreement shall have been adopted and the Merger approved
by the requisite vote or written consent of the stockholders of the Company,
if required by applicable Law.


(b)
The consummation of the Merger shall not then be restrained, enjoined or
prohibited by any Order of a court of competent jurisdiction or
any other Governmental Entity and there shall not be in effect any Law
enacted, promulgated or deemed applicable to the Merger
by any Governmental Entity which prevents the consummation of the Merger;
provided, that prior to invoking this Section 6.1(c), each party shall use its commercially reasonable efforts to have any
such Order or other legal restraint or prohibition lifted.


(c)
Decathlon Capital Investments (“Decathlon”) shall have entered into an Amended and Restated Revenue Loan and
Security Agreement amending the Decathlon Revenue Loan and Security Agreement dated as of December 24, 2020 by and between DA4 and the
Company (the “Revenue Agreement”) in form and substance satisfactory to Parent and released Company from any and all
obligations related thereto for the period prior to Closing. Stockholders shall have entered into Indemnification Agreements in form and
substance satisfactory to Parent and Purchaser indemnifying Parent, Purchaser and Company from and against all claims, liabilities and
obligations related to the Decathlon Agreement or arising from the Company’s agreements with Decathlon.


Article
7

Termination, Amendment and Waiver


7.1
Termination. This Agreement may be terminated, and the Merger and the other transactions contemplated hereby may be abandoned
by action taken or authorized by the board of directors (or appropriate committee or designee) of the terminating party or parties, whether
before or after approval of the Merger by the stockholders of the Company:


(a)
By mutual written consent of Parent and the Company at
any time;


(b)
By either the Company or Parent, provided, however, that the right to terminate
the Agreement pursuant to this Section 7.1(b)
shall not be available to any party whose breach of this Agreement has been the primary cause of
or primarily resulted in the failure or the non-satisfaction
of any condition or requirement of this Agreement or any voting agreement entered by Stockholders
in connection herewith;


(c)
By either the Company or Parent, if any court of competent jurisdiction or
other Governmental Entity shall have issued an Order or
taken any other action permanently restraining, enjoining or otherwise prohibiting (i)
omitted (ii) prior to the Effective Time, the Merger,
and such order, decree, ruling or other action
shall have become final and nonappealable (which Order or other action
the party seeking to terminate this Agreement shall have used
its commercially reasonable efforts to resist, resolve or lift, as applicable, subject to
the provisions of Section 5.5); provided, however, that the right to
terminate this Agreement pursuant to this Section 7.1(c)
shall not be available to any party if the issuance of such final and non-appealable Order or other action
was due to the failure by such party (including, in the case of Parent,
the Purchaser) to perform any of its obligations under this Agreement;


(d)
By Parent, at any time if: (i) there shall be an
Uncured Inaccuracy in any representation or warranty of
the Company contained in this Agreement or breach of any
covenant of the Company contained in this Agreement, in
any case, (ii) Parent shall have delivered to the Company written
notice of such Uncured Inaccuracy or breach and (iii) either
such Uncured Inaccuracy or breach is not capable of cure or at
least 20 calendar days shall have elapsed since the date of delivery of such written notice to the Company
and such Uncured Inaccuracy or breach shall not have been cured;


(e)
By Parent, at any time if there has been a Company Material
Adverse Effect;


or


(f)
By either the Company or Parent if the closing of the Merger
has not occurred by the Outside Date; provided, however, that the right to
terminate this Agreement pursuant to this Section 7.1(k)
shall not be available to any party whose breach of this Agreement has been the primary cause of
or primarily resulted in the failure of the Merger to close
by the Outside Date.


7.2
Effect of Termination.


(a)
In the event of termination of this Agreement by either the Company
or Parent as provided in Section 7.1, this Agreement
shall become void and there shall be no liability or obligation on the part of Parent,
the Purchaser or the Company or their respective Subsidiaries,
officers or directors except (i) with respect to Section 5.7,
and Article 8 and (ii) with respect to any liabilities
or damages incurred or suffered as a result of the willful
and material breach by the Company, on the one hand, or Parent
or the Purchaser, on the other hand, of any of their respective representations, warranties,
covenants or other agreements set forth in this Agreement.


7.3
Amendment. Subject to Section 1.3(c), this Agreement may be amended by the Company, Parent and the Purchaser
by action taken by or on behalf of their respective boards of directors at any time prior to the Effective Time; provided, however,
that, after approval of the Merger by the Company’s stockholders, no amendment may be made which, by Law or in accordance with the
rules of any relevant stock exchange, requires further approval by such stockholders. This Agreement may not be amended except by an instrument
in writing signed by the parties hereto.


7.4
Waiver. Subject to Section 1.3(c), at any time prior to the Effective Time, Parent and the Purchaser, on the
one hand, and the Company, on the other hand, may (i) extend the time for the performance of any of the obligations or other acts
of the other, (ii) waive any Uncured Inaccuracies in the representations and warranties of the other contained herein or in any document
delivered pursuant hereto and (iii) waive compliance by the other with any of the agreements or covenants contained herein; provided,
however, that after any approval of this Agreement by the Company’s stockholders, there may not be any extension or waiver
of this Agreement which decreases the Merger Consideration or which adversely affects the rights of the Company’s stockholders hereunder
without the approval of such stockholders. Any such extension or waiver shall be valid only if set forth in an instrument in writing signed
by the party or parties to be bound thereby, but such extension or waiver or failure to insist on strict compliance with an obligation,
covenant, agreement or condition shall not operate as a waiver of, or estoppel with respect to, any subsequent or other failure.


Article
8

General Provisions


8.1
Fees and Expenses. Subject to Section 7.2 hereof, all Expenses incurred
by the parties hereto (including, without limitation, any Expenses incurred in connection with obtaining any Third Party consents or any
filings to be made pursuant to (i) the Exchange Act, the Securities Act or the rules and regulations of the NASDAQ, or (ii) the DGCL or
any Takeover Laws), shall be borne solely and entirely by the party which has incurred the same.


8.2
Notices. All notices and other communications required or permitted under this Agreement shall be in writing and shall be
either hand delivered in person, sent by facsimile, sent by electronic mail (if also confirmed by facsimile sent during normal business
hours of the recipient, effective as of the delivery of the facsimile; if not sent via facsimile during normal business hours, then on
the next Business Day), sent by certified or registered first-class mail, postage prepaid, or sent by nationally recognized express courier
service. Such notices and other communications shall be effective upon receipt if hand delivered or sent by facsimile or electronic mail,
three Business Days after mailing if sent by mail, and one Business Day after dispatch if sent by express courier, to the following addresses,
or such other addresses as any party may notify the other parties in accordance with this Section 8.3.


If to Company, addressed
to it at:


Teal Drones, Inc.


5200 S. Highland Drive


Suite 201


Holladay, UT 84117


Phone: (801)706-6385


Attention: George Matus, CEO


 


with a copy to (for information
purposes only):


Holland and Hart, LLP


222 South Main Street


Suite 2200


Salt Lake City, UT 84101


Phone: (801) 799-5861

E-mail: JPSteele@hollandhart.com


Attention: Jeffrey Steele, Esq.


 


If to the Parent or Purchaser, addressed to it
at:


Red Cat Holdings, Inc.


Teal Acquisition I Corp.

370 Harbour Drive


Palmas del Mar


Humacao, PR 00791

Phone: (833) 373-3228

E-mail: Jeff@redcat.red

Attention: Jeffrey Thompson, CEO


 


with a copy to (for information purposes only):


Law Office of Harvey Kesner


Phone: (646) 678-2543

E-mail: pdox74@gmail.com


Attention: Harvey Kesner, Esq.


 


 


8.3



8.4
Certain Definitions. For purposes of this Agreement, the term:


“Acceptable Confidentiality
Agreement” means a confidentiality agreement that contains confidentiality provisions that are no less favorable in the aggregate
to the Company than those contained in the Confidentiality Agreement.


“affiliate” means
a Person that directly or indirectly, through one or more intermediaries, controls, is controlled by, or is under common control with,
the first-mentioned Person.


“beneficial ownership”
(and related terms such as “beneficially owned” or “beneficial owner”) has the meaning set forth in Rule 13d-3
under the Exchange Act.





“Benefit Agreement”
means each employment, consulting, bonus, incentive or deferred compensation, equity or equity-based compensation, noncompetition, nondisclosure,
non solicitation, severance, retirement, change in control, retention, termination or other similar Contract between the Company , on
the one hand, and any Participant, on the other hand.


“Benefit Plan”
means each pension plan (as defined in Section 3(2) of ERISA, but whether or not subject to ERISA), post-retirement or employment
health, medical, other welfare, cafeteria, disability, bonus, incentive, deferred compensation, equity or equity-based, severance, retirement,
change in control, retention or termination plan, policy, program, practice, Contract and any other material plan, policy, program, practice
or Contract providing compensation or other benefits to any Participant (or any dependent or beneficiary thereof), including in each case,
each “employee benefit plan” as defined in Section 3(3) of ERISA, which are sponsored, maintained, contributed to or
required to be maintained or contributed to by the Company, or any Commonly Controlled Entity or under which the Company, or any Commonly
Controlled Entity has any material obligation or liability, other than any Benefit Agreement.


“Business Day”
has the meaning set forth in Rule 14d-1(g)(3) of the Exchange Act.


“Closing Date VWAP”
means the average of the Daily VWAP for the twenty (20) trading days ending on and including the Closing Date.


“Code”
means the United States Internal Revenue Code of 1986, as amended, and the rules and regulations thereunder.


“Commonly Controlled
Entity” means any Person or entity that is (or at any relevant time was) treated as a single employer or under common control
with the Company within the meaning of Section 414 of the Code.


“Company Intellectual
Property” means any and all Intellectual Property and Intellectual Property Rights that are owned, used, held for use or practiced
by the Company , including any Intellectual Property and Intellectual Property Rights incorporated into or otherwise used, held for use
or practiced in connection with any Company Offerings.


“Company Intellectual
Property Contracts” means the Inbound Intellectual Property Contracts and Outbound Intellectual Property Contracts.


“Company Material
Adverse Effect” means any change, event, effect, occurrence, or development that, individually or in the aggregate, has had
or would reasonably be expected to have a materially adverse effect on the business, results of operations, assets, liabilities or condition
(financial or otherwise) of the Company, taken as a whole, except for any of the following changes, events, effects, occurrences or developments: 
(A) changes in general economic or political conditions or financial or securities markets in general, in each case, in the United
States or elsewhere in the world, (B) changes in the principal industry in which the Company operate, (C) changes in Laws or
the enforcement or interpretation thereof applicable to the Company or in GAAP or in accounting standards, (D) acts of war, armed
hostilities, sabotage or terrorism, or any escalation or worsening of any acts of war (whether or not declared), armed hostilities, sabotage
or terrorism, earthquakes, hurricanes, tornados or other natural disasters or calamities, (E) the negotiation, execution, delivery, announcement
or performance of this Agreement or the taking of any actions pursuant to this Agreement, including without limitation, the impact thereof
on the relationships of the Company with customers, (F) any failure of the Company to meet any internal or public projections, forecasts
or estimates or the issuance of revised projections that are not as optimistic as those in existence on the date hereof, (G) any
changes in the market price or trading volume of shares of Company Common Stock; provided, however, that the underlying
causes of such change or failure shall not be excluded by this clause (G), or (H) the suspension of trading generally on the New York
Stock Exchange or the Nasdaq Stock Market, except in the case of clauses (A), (B), (C) and (D), any changes, events, effects, occurrences
or developments which disproportionately affect, individually or together with other changes, events, effects, occurrences or developments,
the Company when compared to other Persons operating in the principal industry in which the Company operates.


“Company Offerings”
means any products or services developed, manufactured, offered, provided, sold or otherwise distributed by or for the Company, including
any products or service offerings under development that form the basis, in whole or in part, of any revenue or business projection provided
to Parent.


“Company Warrant”
means any option or arrangement to purchase Shares that is outstanding immediately prior to the Effective Time under any of the Contracts
listed in Section 3.2(b) of the Company Disclosure Schedule.


“Company-Owned Intellectual
Property” means any and all Company Intellectual Property that is owned in whole or in part by the Company (or that the Company
claims or purports to own in whole or in part). Company-Owned Intellectual Property includes Registered Company Intellectual Property.


“Contracts”
means any of the agreements, arrangements, commitments, understandings, contracts, leases (whether for real or personal property), powers
of attorney, notes, bonds, mortgages, indentures, deeds of trust, loans, evidences of indebtedness, purchase orders, letters of credit,
undertakings, covenants not to compete, licenses, instruments, obligations, understandings, policies, purchase and sales orders, quotations
and other commitments to which a Person is a party or to which any of the assets of such Person or its Subsidiaries are subject, whether
oral or written, express or implied.


“control”
(including the terms “controlled by” and “under common control with”) means the possession, directly or indirectly
or as trustee or executor, of the power to direct or cause the direction of the management or policies of a Person, whether through the
ownership of stock or as trustee or executor, by Contract or credit arrangement or otherwise.


“Copyright License”
means any license that requires, as a condition of use, modification or distribution of Works of Authorship, that such Works of Authorship,
or other Software or other Intellectual Property incorporated into, derived from, used, or distributed with such Works of Authorship:
(i) in the case of Software, be made available or distributed in a form other than binary (e.g., source code form), (ii) be licensed for
the purpose of preparing derivative works, (iii) be licensed under terms that allow the Company Offerings, Company-Owned Intellectual
Property, or portions thereof or interfaces therefor to be reverse engineered, reverse assembled or disassembled (other than by operation
of law) or (iv) be redistributable at no license fee.


“Copyright Materials”
means any Software or other Intellectual Property subject to a Copyright License.


“Daily VWAP”
means, for any trading day, the per share volume-weighted average price of the Parent Common Stock as displayed on Bloomberg, L.P. (or
its equivalent successor if such service is not available) in respect of the period from the scheduled open of trading until the scheduled
close of trading of the primary trading session on such trading day on the Nasdaq Capital Market or, if unavailable, on the OTC Markets.
The Daily VWAP will be determined without regard to after-hours trading or any other trading outside of the regular trading session trading
hours.


“Environmental Claims”
means all accusations, allegations, Liens, demands, Actions, or causes of action for any damage, including, without limitation, personal
injury or property damage, arising out of or related to Environmental Conditions or pursuant to applicable Environmental Laws.


“Environmental Conditions”
means the presence of Hazardous Substances in the environment (including natural resources, soil, surface water, ground water, any present
or potential drinking water supply, subsurface strata or ambient air) relating to or arising out of the conduct of the business of the
Company .


“Environmental Laws”
shall mean all applicable Laws relating to pollution, protection of the environment (including without limitation ambient air, surface
water, ground water, land surface, subsurface strata, wildlife, plants, or other natural resources), and/or protection of the health and
safety of Persons from exposures to Hazardous Substances in the environment.


“Equity Exchange
Ratio” means the quotient obtained by dividing (x) the Merger Consideration by (y) the Applicable Parent Stock Price.


“Equity Interest”
means any share of capital stock, partnership, member or similar equity interests in any Person, and any securities (including debt securities)
convertible into, or exchangeable or exercisable for, any such shares, capital stock, partnership, member or similar equity interests,
or any options, warrants or other rights of any kind to acquire or that are linked to the value of any such shares, capital stock, partnership,
member or similar equity interests or such convertible or exchangeable securities, or any other ownership interest (including, without
limitation, any such interest represented by Contract right), of such Person.


“ERISA”
means the United States Employee Retirement Income Security Act of 1974, as amended, and the rules and regulations thereunder.


“Expenses”
includes all out-of-pocket expenses (including all fees and expenses of counsel, accountants, investment bankers, financing sources, experts
and consultants to a party hereto and its affiliates) incurred by a party or on its behalf in connection with or related to the authorization,
preparation, negotiation, execution and performance of this Agreement and the transactions contemplated hereby, including the preparation,
printing, filing and mailing of the Proxy Statement, and any solicitation of stockholder approvals and all other matters related to the
transactions contemplated by this Agreement.


“GAAP”
means generally accepted accounting principles as applied in the United States.


“Governmental Entity”
means any nation, federal, state, provincial, county, municipal, local or foreign government, or other political subdivision thereof,
and any entity exercising executive, legislative, judicial, regulatory, taxing or administrative functions of or pertaining to government.


“Hazardous Substances”
shall mean all pollutants, contaminants, chemicals, wastes, and any other infectious, carcinogenic, ignitable, corrosive, reactive, toxic
or otherwise hazardous substances or materials (whether solids, liquids or gases) subject to regulation, control or remediation under
applicable Environmental Laws.


“Intellectual Property”
means any and all: (i) technology, formulae, algorithms, procedures, processes, methods, techniques, knowhow, ideas, creations, inventions,
discoveries, and improvements (whether patentable or unpatentable and whether or not reduced to practice), (ii) technical, engineering
and manufacturing information and materials, (iii) specifications, designs, models, devices, prototypes, schematics and development tools,
(iv) Software, websites, content, images, graphics, text, photographs, artwork, audiovisual works, sound recordings, graphs, drawings,
reports, analyses, writings, and other works of authorship and copyrightable subject matter (“Works of Authorship”),
(v) databases and other compilations and collections of data or information (“Databases”), (vi) trademarks, service
marks, logos and design marks, trade dress, trade names, fictitious and other business names, and brand names, together with all goodwill
associated with any of the foregoing (“Trademarks”), (vii) domain names, uniform resource locators and other names
and locators associated with the Internet (“Domain Names”); (viii) information and materials not generally known to
the public, including trade secrets and other confidential and proprietary information, such as product, marketing, servicing, financial,
supplier, and personnel information, customer lists, customer contact and registration information, customer correspondence and customer
purchasing histories (“Trade Secrets”) and (ix) tangible embodiments of any of the foregoing, in any form or media
whether or not specifically listed herein.


“Intellectual Property
Rights” means any and all rights (anywhere in the world, whether statutory, common law or otherwise) relating to, arising from,
or associated with Intellectual Property, including: (i) patents and patent applications, utility models and applications for utility
models, inventor’s certificates and applications for inventor’s certificates, and invention disclosure statements (“Patents”),
(ii) copyrights and all other rights with respect to Works of Authorship and all registrations thereof and applications therefor (including
moral, economic and other industrial property rights, however denominated) (“Copyrights”), (iii) other rights with
respect to Software, including registrations thereof and applications therefor, (iv) industrial design rights and registrations thereof
and applications therefor, (v) rights with respect to Trademarks, and all registrations thereof and applications therefor, (vi) rights
with respect to Domain Names, including registrations thereof and applications therefor, (vii) rights with respect to Trade Secrets, including
rights to limit the use or disclosure thereof by any Person, (viii) rights with respect to Databases, including copyright registrations
thereof and copyright applications therefor, (ix) publicity and privacy rights, including all rights with respect to use of a Person’s
name, signature, likeness, image, photograph, voice, identity, personality, and biographical and personal information and materials and
(x) any rights equivalent or similar to any of the foregoing.


“IRS”
means the United States Internal Revenue Service.


“knowledge”
of a Person means actual knowledge, after reasonable inquiry, of any executive officer of the Person and, solely with respect to the Company,
the knowledge of George Matus, or in the case of any Stockholder representation, such Stockholder.


“Law”
means any international, national, provincial, federal, state, municipal and local laws, treaties, statutes, ordinances, certificates,
notices, by-laws, rules, regulations, Orders, or other requirements, policies or instruments of any Governmental Entity having the force
of law.


“Licensed Company
Intellectual Property” means any Company Intellectual Property that is not Company-Owned Intellectual Property and is licensed
to the Company.


“Lien”
means any lien, mortgage, pledge, conditional or installment sale agreement, encumbrance, covenant, condition, restriction, charge, option,
right of first refusal, easement, security interest, deed of trust, right-of-way, encroachment, community property interest or other claim
or restriction of any nature, whether voluntarily incurred or arising by operation of law, including any restriction on the voting of
any security, any restriction on the transfer of any security or other asset, and any restriction on the possession, exercise or transfer
of any other attribute of ownership of any asset.


“on a fully diluted
basis” means, as of any date, (i) the number of Shares outstanding, plus (ii) the number of Shares the Company is then required
to issue pursuant to options, warrants, rights or other obligations outstanding at such date under any employee stock option or other
benefit plans, warrant agreements or otherwise (assuming all options and other rights to acquire or obligations to issue such Shares are
fully vested and exercisable and all Shares issuable at any time have been issued), including pursuant to the Company Stock Option Plans.


“Open Source”
means any Software or other Intellectual Property that is distributed under an open source license such as (by way of example only) the
GNU General Public License, GNU Lesser General Public License, Apache License, Mozilla Public License, BSD License, MIT License, Common
Public License, any derivative of any of the foregoing licenses, or any other license approved as an open source license by the Open Source
Initiative.


“Parent Common Stock”
means shares of common stock, par value $0.0001 per share, of Parent.


“Parent Material
Adverse Effect” means any change, event, development, condition, occurrence or effect that prevents or materially delays, or
would reasonably be expected to materially delay, consummation of the Merger or performance by Parent or the Purchaser of any of their
material obligations under this Agreement.


“Participant”
means each current or former director, officer, employee or independent contractor of the Company .


“Permitted Liens”
means (a) Liens for Taxes not yet due and payable or that are being contested in good faith by appropriate proceedings and for which adequate
reserves have been established in accordance with GAAP in the Company’s financial statements, (b) Liens in favor of vendors, carriers,
warehousemen, repairmen, mechanics, workmen, materialmen, construction or similar liens or encumbrances arising by operation of law, (c)
with respect to Leased Real Property, Liens disclosed on existing title reports or existing surveys made available to Parent and such
other non-monetary Liens, if any, which would not, individually or in the aggregate, interfere materially with the ordinary conduct of
the business of the Company or would detract materially from the use, occupancy, value or marketability of title thereto, including (i) easements,
encroachments and other matters not of record which would be disclosed by an accurate survey or a personal inspection of the property
and (ii) title to any portion of the premises lying within the right of way or boundary of any public road or private road.


“Person”
means an individual, corporation, limited liability company, partnership, association, trust, unincorporated organization, other entity
or group (as defined in Section 13(d) of the Exchange Act).


“Personal Information”
means information from or about an individual that is sufficient to identify such individual, including, but not limited to, an individual’s:
first and last name, home or other physical address; telephone number, including home telephone number and mobile telephone number, email
address or other online contact information, such as a user identifier or screen name; financial account number, government-issued identifier,
or persistent identifier, such as IP address or other unique identifier associated with a Person, device or web browser; list of contacts;
sufficiently precise physical location; or any other information from or about an individual consumer that is combined with information
from or about an individual that is sufficient to identify such individual.


“Registered Company
Intellectual Property” means: (i) all Patents, registered Trademarks, applications to register Trademarks (including intent-to-use
applications), registered Copyrights, applications to register Copyrights, and all Domain Names that are registered, recorded or filed
by, for, or under authorization from (or in the name of) the Company and (ii) any other applications, registrations, recordings and filings
by the Company (or otherwise authorized by or in the name of the Company ) with respect to any Company-Owned Intellectual Property.


“Securities Act”
means the Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder.


“Software”
means all (i) computer programs and other software, including software implementations of algorithms, models, and methodologies, whether
in source code, object code or other form, including libraries, subroutines and other components thereof, (ii) computerized Databases,
including all data and information included in such Databases, (iii) screens, user interfaces, command structures, report formats, templates,
menus, buttons and icons, (iv) descriptions, flow-charts, architectures, development tools, and other materials used to design, plan,
organize and develop any of the foregoing and (v) all documentation, including development, diagnostic, support, user and training documentation
related to any of the foregoing.


“Subsidiary”
of Parent, the Company or any other Person means any corporation, partnership, joint venture or other legal entity of which Parent, the
Company or such other Person, as the case may be (either alone or through or together with any other Subsidiary), owns, directly or indirectly,
a majority of the stock or other Equity Interests the holders of which are generally entitled to vote for the election of the board of
directors or other governing body of such corporation, partnership, joint venture or other legal entity, or otherwise owns, directly or
indirectly, such Equity Interests, that would confer control of any such corporation, partnership, joint venture or other legal entity,
or any Person that would otherwise be deemed a “subsidiary” under Rule 12b-2 promulgated under the Exchange Act.


“Taxes”
means any and all (i) taxes, fees, levies, duties, tariffs, imposts and other charges of any kind (together with any and all interest,
penalties, additions to tax and additional amounts imposed with respect thereto) imposed by any Governmental Entity, whether disputed
or not, including income, franchise, windfall or other profits, gross receipts, property, sales, use, net worth, capital stock, payroll,
employment, social security, national insurance, workers’ compensation, unemployment compensation, excise, withholding, ad valorem,
stamp, transfer, value-added and gains tax and license, registration and documentation fees and (ii) liability for amounts described under
clause (i) above under Treasury Regulation Section 1.1502-6 (or any similar provision of any applicable Law), as a result of transferee
or successor liability, by Contract, by law or otherwise.


“Tax Return”
means any report, return (including information return), claim for refund, election, estimated tax filing, declaration or similar statement
or document relating to Taxes, including any schedule or attachment thereto, and including any amendments thereof.


“Transfer Taxes”
means all transfer, stamp, documentary and similar Taxes incurred in connection with the transfer of Shares pursuant to this Agreement
and the transactions contemplated herein.


“Third Party”
shall mean any Person other than Parent, the Purchaser and their respective affiliates.


“Uncured Inaccuracy”
with respect to a representation or warranty of a party to the Agreement as of a particular date shall be deemed to exist only if such
representation or warranty shall be inaccurate as of such date as if such representation or warranty were made as of such date, and the
inaccuracy in such representation or warranty shall not have been cured since such date; provided, however, that if such
representation or warranty by its terms speaks as of the date of the Agreement or as of another specific date, then there shall not be
deemed to be an Uncured Inaccuracy in such representation or warranty unless such representation or warranty shall have been inaccurate
as of the date of the Agreement or such other specific date, respectively, and the inaccuracy in such representation or warranty shall
not have been cured since such date.


“VWAP”
means the average of the Daily VWAP for the twenty (20) trading days ending on and including the date of determination.


8.5
Terms Defined Elsewhere. The following terms are defined elsewhere in this Agreement, as indicated below:


	“2015 Stock Option Plan”	Section 2.4(a)(iv)
	“Action”	Section 3.15(a)
	“Agreement”	Preamble
	“Alternative Acquisition Agreement”	Section 5.4(b)
	“Assumed Company Option”	Section 2.4(a)(ii)
	 	“Assumed RSUs”	Section 2.4(b)(ii)
	“Book-Entry Shares”	Section 2.2(b)
	“Breakup Fee”	Section 7.2(b)
	“Certificate of Merger”	Section 1.5
	“Certificates”	Section 2.2(b)
	“Closing”	Section 1.5
	“Closing Date”	Section 1.5
	“Company”	Preamble
	“Company Board”	Recitals
	“Company Board Recommendation”	Recitals
	“Company Bylaws”	Section 3.1(b)
	“Company Charter”	Section 3.1(b)
	“Company Common Stock”	Section 3.2(a)
	“Company Compensation Arrangement”	Section 3.13(g)
	“Company Disclosure Schedule”	Article 3
	“Company Financial Advisor”	Section 3.23
	“Company Material Contract”	Section 3.14(b)
	“Company Option”	Section 2.4(a)(i)
	“Company Permits”	Section 3.6(a)
	“Company Personnel”	Section 3.17(k)
	“Company Preferred Stock”	Section 3.2(a)
	“Company Representatives”	Section 5.3(a)
	“Company RSU”	Section 2.4(b)(ii)
	“Company Stock Option Plans”	Section 2.4(a)(i)
	“Company Stockholder Approval”	Section 3.26
	“Confidentiality Agreement”	Section 5.3(b)
	“Contaminants”	Section 3.17(s)
	“Continuing Directors”	Section 1.3(a)
	“Continuing Employees”	Section 5.11(a)
	“Dissenting Shares”	Section 2.3
	“DGCL”	Recitals
	“DOJ”	Section 5.5(c)
	“D&O Insurance”	Section 5.8(c)
	“Effective Time”	Section 1.5
	“Employment Compensation Arrangement”	Section 3.13(g)
	“Exchange Act”	Section 1.1(a)
	“Expiration Date”	Section 1.1(d)
	“Export Approvals”	Section 3.29(a)
	“Fairness Opinion”	Section 3.23
	“FTC”	Section 5.5(c)
	“Grant Date”	Section 3.2(c)
	“Inbound Intellectual Property Contracts”	Section 3.17(b)
	“Inclusive Companies”	Section 3.16
	“Independent Directors”	Section 1.3(c)
	“Initial Expiration Date”	Section 1.1(d)
	“Insurance Policies”	Section 3.20
	 “Key Employee”	Recitals
	“Lease Agreements”	Section 3.14(a)
	“Leased Real Property”	Section 3.22
	“Merger”	Recitals
	“Merger Agreement”	Annex I
	“Merger Consideration”	Section 2.1(a)
	“Minimum Condition”	Section 1.1(a)
	“NASDAQ”	Section 1.3(a)
	“Non-Competition Agreement”	Recitals
	“Non-Personal Information”	Section 3.18(a)
	“Option Payments”	Section 2.4(a)(i)
	“Order”	Section 3.15(b)
	“Outbound Intellectual Property Contracts”	Section 3.17(b)
	“Outside Date”	Section 1.1(e)
	“Parent”	Preamble
	“Parent Representatives”	Section 5.3(a)
	“Parent Subsidiary”	Section 4.3
	“Privacy Policies”	Section 3.18(a)
	“Promissory Note”	Section 1.7(a)
	“Proxy Statement”	Section 5.2(a)
	“Purchaser”	Preamble
	“Purchaser Common Stock”	Section 2.1(c)
	“Required Third-Party Consents”	Annex I
	“Required Governmental Approval”	Annex I
	“Restricted Share”	Section 2.4(b)(i)
	“Sarbanes-Oxley Act”	Section 3.7(a)
	“SEC”	Section 1.1(e)
	“Section 16”	Section 5.10
	“Shares”	Recitals
	“Significant Customer”	Section 3.14(e)
	“Significant Supplier”	Section 3.14(f)
	“Special Meeting”	Section 5.2(b)
	“Surviving Corporation”	Section 1.4(a)
	“Takeover Statutes”	Section 3.3(b)
	“Unscheduled Inbound IP Contracts”	Section 3.17(e)
	“Unscheduled Outbound IP Contracts”	Section 3.17(e)
	 	 	 


8.6
Headings. The headings contained in this Agreement are for reference purposes only and shall not affect in any way the meaning
or interpretation of this Agreement.


8.7
Severability. If any term or provision of this Agreement is invalid, illegal or incapable of being enforced by any rule
of Law or public policy, all other terms and provisions of this Agreement shall nevertheless remain in full force and effect so long as
the economic or legal substance of the transactions contemplated hereby is not affected in any manner materially adverse to any party.
Upon such determination that any term or provision is invalid, illegal or incapable of being enforced, the parties hereto shall negotiate
in good faith to modify this Agreement so as to effect the original intent of the parties as closely as possible in an acceptable manner
to the end that transactions contemplated hereby are fulfilled to the extent possible.


8.8
Entire Agreement. This Agreement, together with the Exhibits, the Company Disclosure
Schedule and the other documents delivered pursuant to this Agreement, constitute the entire agreement of the parties and supersede all
prior agreements and undertakings, both written and oral, among the parties, or any of them, with respect to the subject matter hereof
and thereof, including, without limitation, the Original Agreement.


8.9
Assignment. Neither this Agreement nor any of the rights, interests or obligations hereunder shall be assigned by any of
the parties (whether by operation of law or otherwise) without the prior written consent of the other parties and any assignment without
such prior written consent shall be null and void.


8.10
No Third-Party Beneficiaries. This Agreement shall be binding upon, inure to the benefit of and be enforceable by the parties
and their respective successors and permitted assigns, and nothing in this Agreement, express or implied, other than pursuant to Section 5.8,
is intended to or shall confer upon any other Person any right, benefit or remedy of any nature whatsoever under or by reason of this
Agreement (including the right to rely upon the representations and warranties set forth herein).


8.11
Mutual Drafting; Interpretation. Each party hereto has participated in the drafting of this Agreement, which each party
acknowledges is the result of extensive negotiations between the parties. If 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 provision. For purposes of this Agreement, whenever the context requires: the
singular number shall include the plural, and vice versa, the masculine gender shall include the feminine and neuter genders, the feminine
gender shall include the masculine and neuter genders and the neuter gender shall include masculine and feminine genders. As used in this
Agreement, the words “include” and “including,” and variations thereof, shall not be deemed to be terms of limitation,
but rather shall be deemed to be followed by the words “without limitation.” Except as otherwise indicated, all references
in this Agreement to “Articles,” “Sections,” “Exhibits,” “Annexes” and “Schedules”
are intended to refer to Articles and Sections of this Agreement and Exhibits, Annexes and Schedules to this Agreement. The schedules
and exhibits attached to this Agreement constitute a part of this Agreement and are incorporated herein for all purposes. The words “hereof,”
“hereto,” “hereby,” “herein,” “hereunder” and words of similar import, when used in this
Agreement, shall refer to this Agreement as a whole and not to any particular section or article in which such words appear. All references
in this Agreement to “$” are references to United States dollars. Unless otherwise specifically provided for herein, the term
“or” shall not be deemed to be exclusive. To the extent this Agreement refers to information or documents to be delivered,
provided or made available to Parent or the Purchaser, the Company shall be deemed to have satisfied such obligation if the Company has
delivered, provided or made available such information or document to Parent in the online data room managed by the Company in connection
with the transactions contemplated by this Agreement at least one (1) calendar day prior to the date hereof.


8.12
Governing Law; Consent to Jurisdiction; Enforcement; Waiver of Trial by Jury.


(a)
This Agreement and all claims and causes of action arising
out of, based upon, or related to this Agreement or the
negotiation, execution or performance hereof, shall be governed
by and construed, interpreted and enforced in accordance with, the Laws of the State
of New York (without regard to Laws that may be applicable under conflicts of Laws
principles, whether of the State of New York or any other jurisdiction).


(b)
Any action, claim, suit or proceeding between the parties hereto
arising out of, based upon or relating to this Agreement
or the transactions contemplated hereby shall be brought solely in the state
or federal court of the County of New York, State of New York and any state appellate court
therefrom within the State of New York (or, if the Court
of the State of New York declines to accept jurisdiction over a particular matter, any state
or federal court within the State of New York, and any direct
appellate court therefrom). Each party hereby irrevocably submits to the exclusive jurisdiction
of such courts in respect of any such action, claim, suit or proceeding and agrees that it will
not bring any such action, claim, suit or proceeding in any other court. Furthermore, each party
hereby irrevocably waives and agrees not to assert as a defense, counterclaim or
otherwise, in any such action, claim, suit or proceeding, (i)
any claim that it is not personally subject to the jurisdiction of the above named courts for any reason other than the failure to serve
process in accordance with Section 8.3, (ii) any
claim that it or its property is exempt or immune from jurisdiction
of any such court or from any legal process commenced in such courts (whether through service of
notice, attachment prior to judgment, attachment in aid of execution of judgment, execution of judgment or
otherwise) and (iii) to the fullest extent permitted by applicable Law,
any claim that (A) the action, claim, suit or proceeding in
such court is brought in an inconvenient forum, (B) the venue of the action,
claim, suit or proceeding is improper or (C) this Agreement,
or the subject matter hereof, may not be enforced in or
by such courts. Each party agrees that notice or the service of process in any action,
claim, suit or proceeding arising out of, based upon or relating to this Agreement
or the transactions contemplated hereby shall be properly served or
delivered if delivered in the manner contemplated by Section 8.2 or in such
other manner as may be permitted by applicable Law.


(c)
EACH OF THE PARTIES HERETO IRREVOCABLY WAIVES TO THE FULLEST EXTENT PERMITTED BY APPLICABLE
LAW ANY AND ALL RIGHT SUCH PARTY MAY HAVE TO TRIAL BY JURY IN ANY LEGAL ACTION, SUIT OR PROCEEDING
BETWEEN THE PARTIES HERETO ARISING OUT OF, BASED UPON OR RELATING TO THIS AGREEMENT OR THE NEGOTIATION,
EXECUTION OR PERFORMANCE HEREOF. EACH OF THE PARTIES (A) CERTIFIES THAT NO REPRESENTATIVE OF ANY
OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE
FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO
ENTER INTO THIS AGREEMENT AND THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT,
AS APPLICABLE, BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION
8.12(c).


(d)
This Agreement may be executed in one or more counterparts (including via facsimile, .pdf or other electronic means), and by the
different parties hereto in separate counterparts, each of which when executed shall be deemed to be an original but all of which taken
together shall constitute one and the same agreement.


(e)
The parties hereto agree that if any of the provisions of this Agreement were not performed in accordance with their specific terms
or were otherwise breached, irreparable damage would occur, no adequate remedy at law would exist and damages would be difficult to determine.
It is accordingly agreed that the parties shall be entitled to an injunction or injunctions to prevent breaches of this Agreement and
to enforce specifically the terms and provisions of this Agreement exclusively in the state or federal Court of the State of New York,
County of New York and any state appellate court therefrom within the State of New York (or, if the Court of the State of New York declines
to accept jurisdiction over a particular matter, any state or federal court within the State of New York) and any such injunction shall
be in addition to any other remedy to which any party is entitled, at law or in equity. In connection with any action for specific performance,
each party hereby irrevocably waives any requirement for the securing or posting of any bond in connection with the remedies referred
to in this Section 8.12.


ARTICLE 9

SURVIVAL; INDEMNIFICATION


9.1
Survival of the Representations and Warranties. The representations and warranties and indemnification obligations of Stockholders
and Company shall survive the Closing Date until the eighteen (18) months anniversary of the Closing Date; provided, however, that (i)
the representations in Section 3.1 (Organization and Qualification; No Subsidiaries), Section 3,3 (Authority), Section 3.5 (Required Filings
and Consents), Section 3.2 (Capitalization), Section 3.6 (Permits: Compliance With Law); Section 3.4 (No Conflict) (together, the “Indefinite
Representations”) shall survive indefinitely and (ii) the representations and warranties set forth in Section 3.9 (Absence of
Undisclosed Liabilities), and Section 3.19 (Tax Matters) shall survive the Closing Date until the expiration of the period specified in
the applicable statute of limitations (the “SOL Representations” and, together with the Indefinite Representations, the “Fundamental
Representations”).


9.2 Indemnification.


(a) Indemnification
by the Stockholders. Each Stockholder agrees (i) severally and not jointly, to defend, indemnify and hold harmless Parent and the Surviving
Company and its Affiliates and their respective Affiliates, directors, officers, employees and agents (together, the “Parent
Indemnified Parties”) from, against and in respect of, the full amount of:


(A) any and all Indemnified
Losses arising from or in connection with any breach or violation of any of the representations and warranties of the Company contained
in this Agreement or (B) any and all Indemnified Losses arising from or in connection with any breach or violation of the covenants or
agreements of the Company contained in this Agreement;


(B) any and all Indemnified
Losses related to or arising from any products delivered by the Company prior to the Closing Date, including without limitation, Indemnified
Losses for product recalls, product defects, warranty claims, personal injury or death (which shall exclude any claims which have specifically
been reserved or allowed for in sufficient amounts to fully cover the Indemnified Loss prior to the Closing Date);


(C) any and all Indemnified
Losses which relate to any legal and/or governmental proceedings which are not set forth on the Disclosure Schedules, existing on or prior
to the Closing Date, and/or which are brought after the Closing Date for acts and omissions of the Company, which occurred prior to the
Closing Date; and


(ii) severally and not jointly,
to defend, indemnify and hold harmless the Parent Indemnified Parties from, against and in respect of, the full amount of:


(A) any and all Indemnified
Losses arising from or in connection with any breach or violation of any of the representations and warranties of such Stockholder contained
in this Agreement or (B) any and all Indemnified Losses arising from or in connection with any breach or violation of the covenants or
agreements of such Stockholder contained in this Agreement; and


(B) any and all capital or
other taxes related to or arising from the sale and transfer of the Shares owned by such Stockholder contemplated hereby by reason of
any Liability of for such taxes as assessed by any taxing authority either before or after the Closing Date.


(b) Indemnification
by the Surviving Corporation. Surviving Corporation agrees to defend, indemnify and hold harmless the Stockholders and their Affiliates
and their respective directors, officers, employees and agents from, against and in respect of, the full amount of:


(i)
any and all Indemnified Losses arising from or in connection with any breach or violation of any of the representations or warranties
of Purchaser or Parent contained in this Agreement, and


(ii)
any and all Indemnified Losses arising from or in connection with any breach or violation of any of the covenants or agreements
of Purchaser or Parent contained in this Agreement.


(c) Indemnification
Procedure. Any party seeking indemnification under this Agreement (the “Indemnified Party”) will give prompt written
notice to the party or parties against whom indemnity is sought (the “Indemnifying Party”) of any Indemnified Losses
which it discovers or of which it receives notice after the Closing, stating the nature, basis (including the section of this Agreement
that has been or will be breached, if any, and the facts giving rise to the claim that a breach has or will occur), and (to the extent
known) amount thereof; provided, however, that no delay on the part of Indemnified Party in notifying any Indemnifying Party shall relieve
the Indemnifying Party from any liability hereunder unless (and then solely to the extent) the Indemnifying Party is prejudiced by such
delay.


(d) Indemnification
Procedure as to Third Party Claims.


(i)
Promptly after any Indemnified Party obtains knowledge of the commencement of any third party claim, action, suit or proceeding
or of the occurrence of any event or the existence of any state of facts which may become the basis of a third party claim (any such claim,
action, suit or proceeding or event or state of facts being hereinafter referred to in this Section as a “Claim”),
in respect of which an Indemnified Party is entitled to indemnification under this Agreement, such Indemnified Party shall promptly notify
the Indemnifying Party of such Claim in writing; provided, however, that any failure to give notice (A) will not waive any rights of the
Indemnified Party except to the extent that the rights of the Indemnifying Party are actually prejudiced thereby and (B) will not relieve
the Indemnifying Party of its obligations as hereinafter provided in this Section 9.2 after such notice is given. With respect to any
Claim as to which such notice is given by the Indemnified Party to the Indemnifying Party, the Indemnifying Party will, subject to the
provisions of Section 9.2(d)(ii), assume the defense or otherwise settle such Claim with counsel reasonably satisfactory to the Indemnified
Party and experienced in the conduct of Claims of that nature at the Indemnifying Party’s sole risk and expense, provided, however,
that the Indemnified Party (1) shall be permitted to join the defense and settlement of such Claim and to employ counsel reasonably satisfactory
to the Indemnifying Party, and at the Indemnified Party’s own expense, (2) shall cooperate fully with the Indemnifying Party in
the defense and any settlement of such Claim in any manner reasonably requested by the Indemnifying Party; and (3) shall not compromise
or settle any such Claim without the prior written approval of the Indemnifying Party;


(ii)
If (A) the Indemnifying Party fails to assume the defense of such Claim or, having assumed the defense and settlement of such Claim,
fails reasonably to contest such Claim in good faith, or (B) the remedy sought by the claimant with respect to such Claim is not solely
for money damages, the Indemnified Party, without waiving its right to indemnification, may, but is not required to, assume the defense
and settlement of such Claim, provided, however, that (1) the Indemnifying Party shall be permitted to join in the defense and settlement
of such Claim and to employ counsel at its own expense, (2) the Indemnifying Party shall cooperate with the Indemnified Party in the defense
and settlement of such Claim in any manner reasonably requested by the Indemnified Party, and (3) the Indemnified Party shall not settle
such Claim without the written consent of the Indemnifying Party, which consent shall not be unreasonably withheld or delayed


As used in this Section 9.2,
the terms Indemnified Party and/or Indemnifying Party shall be deemed to include the plural thereof where the rights or obligations of
more than one Indemnified Party and/or Indemnifying Party may be involved.


(e) Tax-Free
Indemnification Payments. All sums payable by an Indemnifying Party as indemnification under this Section 9.2 shall be paid free and
clear of all deductions or withholdings (including any taxes or governmental charges of any nature) unless the deduction or withholding
is required by law.


(g) Construction
of Representations and Warranties. For purposes of calculating Indemnified Losses, each of the representations and warranties that
contains any qualifications as to materiality or Material Adverse Effect or similar language shall be deemed to have been given as though
there were no such qualifications for the purpose of determining the amount of Indemnifiable Losses resulting from the breach of such
representation and warranty, and any such qualifications shall be disregarded for such purpose of this Article 9.


9.3 Limitations
on Liabilities.


Notwithstanding anything
to the contrary contained herein, (i) other than with respect to a breach of a Fundamental Representation, no party shall be obligated
to indemnify and hold harmless any other under Section 9.2 for breaches of representations and warranties unless and until all Indemnified
Losses in respect of which such party is obligated to provide indemnification exceed Fifty Thousand Dollars (US$50,000) (the “Basket
Amount”) following which (subject to the provisions of this Section 9.3) such party shall be obligated to indemnify and hold
harmless, the other party for all such Indemnified Losses in excess of the Basket Amount; provided however that the Basket Amount shall
not apply to indemnity obligations for Indemnified Losses arising as a result of fraud. In addition, no individual claim for Indemnified
Loss shall count toward the Basket Amount unless it exceeds ten thousand dollars ($10,000) ("De Minimus Amount"), following
which the full amount of such individual claim for Indemnified Loss shall be aggregated together with other claims for Indemnified Losses
exceeding the De Minimus Amount for purposes of calculating the Basket Amount. (ii) other than with respect to breaches of a Fundamental
Representations, fraud, gross negligence and willful misconduct, the Stockholders shall not be obligated to indemnify and hold harmless
the Purchaser Indemnified Parties under Section 9.2 for breaches of representations and warranties in an amount in excess of the Escrow
Shares; and (iii) each Stockholder’s maximum liability for indemnification of Purchaser Indemnified Parties hereunder for breaches
of representations and warranties shall not exceed such Stockholder’s pro rata amount of the Merger Consideration actually received
by such Stockholder.


(a) Notwithstanding
anything to the contrary set forth herein, none of the limitations on indemnification set forth in this Section 9.3 shall apply to matters
relating to intentional or fraudulent breaches or violations.


(b) Each
party waives on behalf of itself and the other Indemnified Parties claiming through such parties, any right to multiply actual damages
or to recover consequential, indirect, special, punitive or exemplary damages (including, without limitation, damages for lost profits
or loss of business opportunity) arising in connection with or with respect to the indemnification provisions hereof.


(c) Each
Indemnified Party entitled to indemnification hereunder shall take reasonable steps to mitigate all losses, costs, expenses and damages
after becoming aware of any event which could reasonably be expected to give rise to any Losses that are indemnifiable or recoverable
hereunder.


9.4 Insurance
Benefits. The amount of Indemnified Losses recoverable by any Indemnified Party under this Agreement with respect to an indemnity
claim shall be reduced by the amount of any payment actually received by or on behalf of any Indemnified Party from any insurance policy
net of any deductibles or other reasonable amounts payable with respect thereto.


9.5 Tax
Benefits. The amount of Indemnified Losses recoverable by any indemnified party shall be reduced by the amount of any tax benefit
realized by the indemnified party in the form of a refund or reduction in taxes payable as a result of such Indemnified Losses.


9.6 Exclusive
Remedy. The indemnification rights provided in this Article 9 and Parent and Surviving Corporations rights pursuant to Section 9.2
shall be the sole and exclusive remedy available to Parent Indemnified Parties and each of them for any Indemnified Losses related to
a breach of any of the terms, conditions, covenants, agreements, representations or warranties contained herein or in any other agreement,
certificate, instrument or document or any right, claim or action arising from the transactions contemplated hereunder or thereunder,
and each such party hereby waives, to the fullest extent permitted by applicable Laws, any other rights or remedies that may arise under
any applicable Laws; provided, that this exclusive remedy for damages shall not preclude any Party from bringing an action for specific
performance, injunctive relief or any other equitable remedy to require a Party to perform its obligations under this Agreement.


[signature page follows]





    	 



     


    

IN WITNESS WHEREOF, Parent, the Purchaser and the Company have caused this Agreement to be executed as of the date first written above
by their respective officers thereunto duly authorized.


RED CAT HOLDINGS, INC.



By: _______________________


Name:
Jeffrey Thompson
 Title: Chief Executive Officer


TEAL ACQUISITION I CORP.





By: _______________________


Name: Jeffrey Thompson

Title: Chief Executive Officer


TEAL DRONES, INC.



By: _______________________


Name: George Matus

Title: Chief Executive Officer




    	 



    	 



    

SCHEDULES TO AMENDED
AND RESTATED AGREEMENT AND PLAN OF MERGER, dated as of August 31, 2021 (this “Agreement”), by and among Red Cat
Holdings, Inc., a Nevada corporation (the “Parent”), Teal Acquisition I Corp., a Delaware corporation and a wholly-owned
subsidiary of Parent (the “Purchaser”) and Teal Drones, Inc., a Delaware corporation (the “Company”)
and the undersigned shareholders of the Company (collectively, the “Stockholders”).


Schedule 2.1(b) – See Designation
of Proportionate Allocation And Distribution of Aggregate Purchase Price Executed in connection herewith.


Schedule 2.2 – See Designation of
Proportionate Allocation And Distribution of Aggregate Purchase Price Executed in connection herewith.