Document:

Impossible Aerospace - Consultant Agreement FORM (00178292-2).DOCX

EMPLOYMENT AGREEMENT

This EMPLOYMENT AGREEMENT (this “Agreement”) is entered into on December 9, 2021 by and between A4 Technologies, Inc, a Delaware corporation (“Company”), and Robert Jeffrey Kingston (“Executive”).  Alpine 4 Holdings, Inc., a Delaware corporation (“ALPP”) is a party hereto for certain limited purposes under the Agreement.   

WHEREAS, concurrent with the execution of this agreement, the Company, ALPP and other parties thereto are entering into a Membership Interest Purchase Agreement (the “Purchase Agreement”), of even or near date hereof; and

WHEREAS, following the closing of the transaction contemplated under the Purchase Agreement (the “Closing”), the Company desires to employ the Executive as President of its Subsidiaries as set forth in this Agreement.  

NOW, THEREFORE, for good and valuable consideration, the parties hereto agree as follows: 

1.Definitions.  

1.1.“Subsidiaries” means the Indiana limited liability companies collectively known as RCA Commercial Electronics, including DTI Services Limited Liability Company, Direct Tech Sales LLC, PMI Group, LLC, Continu.us LLC, and Solas Ray, LLC. 

1.2.“Cause” means Executive (i) is convicted of a felony or other crime involving dishonesty towards the Company or any of its Subsidiaries or material misuse of property of the Company or any of its Subsidiaries; (ii) engages in willful misconduct or fraud with respect to the Company or any of its Subsidiaries or any of their customers or suppliers or an intentional act of dishonesty or disloyalty in the course of Executive’s employment; (iii) materially breaches any written policy of the Company, including the Company’s policies prohibiting unlawful harassment, discrimination or retaliation, which breach, if capable of being cured, is not cured within 15 days after written notice thereof to Executive; (iv) refuses to perform Executive’s material obligations under this Agreement (except in connection with a Disability) as reasonably directed by the Board, which failure, if capable of being cured, is not cured within 15 days after written notice thereof to Executive; (v) misappropriates one or more of the Company’s or any of its Subsidiaries business opportunities or material assets; or (vi) breaches Sections 4.5, 4.6, 5, or 6 hereof which breach, if capable of being cured, is not cured within 10 days of written notice thereof has been delivered to Executive; or (vii) materially breaches this Agreement, which breach, if capable of being cured, is not cured within 15 days after written notice thereof to Executive. In each such case where notice and cure is required (i.e. pursuant to clauses (iii), (iv), (vi) and (vii)), such notice shall describe the condition giving rise to “Cause” with reasonable specificity. The Company may allow Executive an extension of time to cure a breach if the Board, in its sole discretion, determines that such extension is appropriate under the circumstances. 

1.3.“Good Reason” means the occurrence of any of the following events without the written consent of Executive: (i) a material diminution of Executive’s duties or the assignment to Executive of duties that are inconsistent in any substantial respect with the position, authority or responsibilities associated with Executive’s position as set forth pursuant to Section 2.1, other than any such authorities, duties or responsibilities assigned at any time which are by their nature, or which are identified at the time of assignment, as being temporary or short-term; (ii) the Company’s requiring Executive to be based at a location which is fifty (50) or more miles from the Subsidiaries’ corporate headquarters; or (iii) a material breach by the Company of its obligations pursuant to this Agreement, which such breach goes uncured after notice and a reasonable opportunity to cure, or (iv) permanent disability of Executive or Executive’s spouse  

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where demands for home care are such that Executive can no longer effectively perform the Scope of Duties.  

2.DUTIES; TERM; TERMINATION.   

2.1.Duties. Subject to the terms of this Agreement, Company hereby engages Executive to perform, and Executive shall perform, such duties (the “Duties”) as specified in Exhibit A attached hereto, as amended from time to time in writing signed by Company and Executive (the “Scope of Duties”).  Executive shall report directly to the Company COO, CEO, or Board of Directors (the “Board”), or its designee, of ALPP. 

2.2.Term.  Executive’s employment under the terms and conditions of this Agreement shall commence on day of the Closing of the Purchase Agreement (the “Commencement Date”). Such employment shall continue for an initial term of three (3) years following the Commencement Date (the “Initial Term”). The term of Executive’s employment under this Agreement shall be automatically extended on each anniversary of the Commencement Date following the expiration of the Initial Term for an additional one-year term (each, a “Renewal Term”). The Initial Term and any Renewal Terms are collectively referred to as the “Term,” and the Term shall continue as described in the preceding sentence, unless either Executive or the Company has given written notice to the other no less than sixty (60) days prior to the expiration of the Term that the Term shall not be so extended. Notwithstanding the above, the Term shall earlier expire upon the effective date of termination of Executive’s employment pursuant to Section 2.3 hereof. 

2.3.Termination of Employment, including special cases of Cause or Good Reason.  The Term and Executive’s employment hereunder may be terminated: 

(a)by the Company for Cause, effective on the date on which a written notice to such effect (a “Cause Termination Notice”) is delivered to Executive; 

(b)by the Company at any time without Cause (which includes an election by the Company not to renew the Term pursuant to Section 2.2 hereof, the written notice of which shall be deemed a notice of termination without Cause of Executive’s employment hereunder), effective sixty (60) days following the date on which a written notice to such effect is delivered to Executive or, at the election of the Company in its sole discretion, such earlier date as is reasonably designated by the Company, provided that the Company shall continue to pay Executive’s Base Compensation for sixty (60) days following such notice of termination 

(c)by Executive for Good Reason provided, however, no event shall be deemed to be “Good Reason” unless within thirty (30) days after Executive’s knowledge of the initial existence of such event, Executive shall have given the Company written notice thereof specifically describing the event giving rise to “Good Reason” and allowing the Company a period of thirty (30) days from the date of receipt of the notice to remedy such event, and the Company shall have failed to cure such event within such period. Notwithstanding the foregoing, in no case will an event give rise to “Good Reason” hereunder unless within ten (10) days after the expiration of the period provided in Executive’s notice to the Company to remedy said event but in no case later than one hundred and twenty (120) days after the initial existence of said event, Executive shall have actually terminated his employment with the Company by giving written notice of resignation for failure of the Company to remedy such event. 

2.4.Agreement Termination.  This Agreement and the Term shall terminate upon the effective date of employment termination pursuant to section 2.3. Notwithstanding the foregoing, the terms of Section 4.5 , Section 4.6, Section 5, and Section 6 of this Agreement will survive termination of this Agreement and Executive, ALPP, and the Company shall remain bound thereby. Termination of this  

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Agreement will constitute termination of the Executive’s Duties, and will also terminate Company’s obligation to pay the compensation as provided in Section 3.1, except that accrued vacation will be paid in accordance with state law and Company's customary procedures. 

 

3.COMPENSATION; PAYMENTS; EXPENSES; BENEFITS.   

3.1.Compensation. 

(a)Salary. During the Term, Company will pay Executive at the base annual rate of $300,000 as a salaried-exempt position.  Executive shall be paid in accordance with the Company’s normal payroll cycle. 

(b)A performance review shall be conducted annually, which might provide a basis for an increase in salary during the remainder of the Term.  

3.2.Expenses.  Company will reimburse Executive for all “out of pocket” expenses incurred in rendering the Duties. 

3.3.Other Benefits and Compensation. 

(a)New Product/New Markets Bonus: A bonus may be paid in either Alpine 4 Class A Common Stock or Cash for new product and/or markets development.  Executive will participate in the bonus at the level set by the CEO of Alpine 4. The bonus shall be paid annually 60 days after the close of the year.  

(b)120 hours of paid time off per year with Executive’s first-year pro-rated at 60 hours. Beginning January 1, 2022, Executive will receive 120 hours with additional vacation as outlined in the employee handbook.  

(c)Paid Holidays as outlined in the employee handbook.  

(d)Offer to participate in the company sponsored health and welfare and 401(k) plans. Medical, dental and vision premiums are paid 100% by the company for Executive and any legal dependents. 

(e)Executive shall also participate in the Company Employee Stock Option Plan (ESOP) at an Executive level with 100,000 shares vested over two years.  

4.COVENANTS, REPRESENTATIONS AND WARRANTIES.  Executive hereby covenants, represents and warrants to Company that:  

4.1.Performance of Duties.  The Duties shall be performed in a professional and workmanlike manner and in accordance with industry standards.  Any deliverables provided by Executive shall comply with the requirements set forth in the Scope of Duties.  Executive shall not subcontract or assign Duties without Company’s prior written consent. 

4.2.No Conflicts.  Executive’s performance of all the terms of this Agreement and Executive’s work for Company does not and will not breach any invention, assignment or proprietary information agreement with any former employer or other party, or create any conflict of interest with anyone.  Executive will not enter into any other agreement with any other person or entity, either written or oral, in conflict with the terms of this Agreement.  

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4.3.Limitation on Disclosures.  Executive will not disclose to Company or use for the benefit of Company any confidential information of a third party or derived from sources other than engagement with Company or association with Company during the Term. 

4.4.No Conflicts of Interest.  During the term of this Agreement Executive will not, without the prior written approval of the Company, directly or indirectly participate in or assist any business that is a current or potential supplier, customer or competitor of Company; provided, however, that Executive may invest in such companies to an extent not exceeding one percent (1%) of the total outstanding shares in each of one or more such companies whose shares are listed on a national securities exchange or quoted daily by NASDAQ or NYSE. 

4.5.Non-Compete.  In further consideration of the compensation to be paid to Executive hereunder, Executive acknowledges and agrees that during the Term with the Company and its Relationship with the Subsidiaries, Executive shall become familiar with the Subsidiaries’ trade secrets and with other Confidential Information and that Executive’s services have been and shall be of special, unique and extraordinary value to the Company and its Subsidiaries, and therefore, Executive agrees that, during his or her employment with the Company and for a period of five (5) years after the termination of the Term and this Agreement (the “Non-Compete Period”), Executive shall not directly or indirectly (whether as an owner, partner, shareholder, agent, officer, director, employee, independent contractor, consultant or otherwise) own any interest in, operate, invest in, manage, control, participate in, consult with, render services for (alone or in association with any person or entity), in any manner engage in any business activity on behalf of a Competing Business within any geographical area in which the Subsidiaries operates or plan to operate. Nothing herein shall prohibit Executive from being a passive owner of not more than 2% of the outstanding stock of any class of a corporation which is publicly traded, so long as Executive has no active participation in the business of such corporation. For purposes of this paragraph, “Competing Business” means a business similar to that of the Subsidiaries, including and type of business which Subsidiaries have plans to engage in, or any business which Subsidiaries has engaged in during Executive’s Relationship with the Subsidiaries.  If Company defaults in its obligations under this Agreement and such default is not remedied within ninety (90) days from the date of such default, then the Executive will automatically be released from the non-compete provisions set forth in this section. 

4.6.Non-Solicitation.  During Executive’s employment with Company and for five (5) years after termination of employment with the Company, in order to enable Company to maintain a stable work force and to operate its business, Executive shall not, without the prior written consent of the Company, either directly or indirectly solicit, induce, recruit or encourage any of Company’s Executives, employees, contractors, vendors or customers to leave their employment or engagement with Company, either for Executive or for any other person or entity.  During Executive’s employment with Company and for five (5) years after termination of employment with the Company, Executive shall not directly or indirectly, solicit, take away, divert or attempt to divert, the business or patronage of any clients or customers, of the Subsidiaries, for the purpose of providing services that materially compete with the services provided by the Subsidiaries at the time of Executive’s termination. For purposes of this Agreement, “services provided by the Subsidiaries” includes not only services which the Subsidiaries then provides and/or markets or sells, but also those which it is in the process of researching and/or developing, at the time of Executive’s termination, and/or as to which, at the time of Executive’s termination, the Subsidiaries have a strategic business plan in place to research, develop and/or market at some time in the future. The restrictions on soliciting or providing services to customers of the Subsidiary apply to: (i) any customer or customer contact of the Subsidiaries with whom Executive has had any business relations during his employment (whether before or after the Commencement Date) with the Company or its Subsidiaries; and (ii) any customer or customer contact who was a customer or customer contact of the Subsidiaries on the date of Executive’s termination from the Company or during the twelve (12) month period prior to such termination, or who was a prospective customer or customer contact of the Subsidiaries  

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with whom the Subsidiaries had actually met with, or had written (including, without limitation, via email) or telephonic communications with, during said period(s).

 

5.CONFIDENTIALITY.   

5.1.Definitions. 

(a)Relationship (“Relationship”) shall mean any employment, consulting, officer, manager, board member, affiliate, collaborative, or founder relationship between the Executive and Company and/or Subsidiaries, whether commenced prior to, upon or after the date of this Agreement.  

(b) Confidential information (“Confidential Information”) shall mean all information which Executive may produce, obtain, or otherwise learn of during the Relationship,  including but not limited to all information of Company and Subsidiaries that existed before and up to the Closing of the Purchase Agreement, that is either acknowledged as confidential by Company and/or Subsidiaries, or whose confidential nature is reasonably apparent based on the circumstances under which the information was produced, obtained, or otherwise learned of or made available, including without limitation: (a) all matters of a technical nature, such as trade secrets, intellectual property, know-how, formulae, computer programs, source code, object code, machine code, routines, algorithms, software and documentation, secret processes or machines, inventions and research projects; (b) all matters of a business nature, such as information about costs, profits, markets, sales, customers, business contacts, suppliers, and Executives (including salary, evaluation, and other personnel data); (c) all plans for further development; and (d) any other information of a similar nature.  Although certain information or technology may be generally known in the relevant industry, the fact that Company and its Subsidiaries use it, and how Company and Subsidiaries use it, may not be so known, and therefore is Confidential Information.  Furthermore, the fact that various fragments of information or data may be generally known in the relevant industry does not mean that the manner in which Company and Subsidiaries combines them and the results obtained thereby are so known, and in such instance that fact also is Confidential Information.  For the avoidance of doubt, Confidential Information may include proprietary or confidential information of any third party disclosed to Company or its Subsidiaries under condition of confidentiality.  Notwithstanding the foregoing, “Confidential Information” does not include information that Executive can demonstrate by documentation: (i) was already known to Executive prior to the Relationship; (ii) was or is independently developed by Executive without reference to or use of any Confidential Information; (iii) was or becomes generally known by the public not as a result of any inaction or action of the Executive.  

5.2.Obligations of Confidentiality and Limited Use.  Executive shall regard and preserve as confidential, and shall not divulge to unauthorized persons or use, or authorize or encourage persons who are under Executive’s direction or supervision to use, for any unauthorized purposes, either during or after the term of the engagement, any Confidential Information. Executive shall not deliver, reproduce, or in any way allow any such Confidential Information to be delivered to or used by any third parties for any purpose (including, without limitation, any purpose harmful to or competitive with the interests of the Company or its Subsidiaries) without the specific direction or consent of a duly authorized representative of the ALPP. Executive acknowledges and agrees that some of the Confidential Information may be considered “material non-public information” for purposes of the federal securities laws (“Insider Information”) and that the Executive will abide by all securities laws relating to the handling of and acting upon Insider Information. 

5.3.Exceptions to Obligations of Non-Disclosure.  Notwithstanding the foregoing nondisclosure obligations: 

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(a)Executive may disclose Confidential Information to the extent required by law or valid order of a court or other governmental authority; provided that Executive shall first have given notice to Company and shall have made a reasonable effort to obtain a protective order requiring that the Confidential Information so disclosed be used only for the purposes for which the order was issued; and 

(b)Pursuant to 18 U.S.C. Section 1833(b), Executive shall not be held criminally or civilly liable under any federal or state trade secret law for the disclosure of a trade secret that is made: (i) in confidence to a federal, state, or local government official, either directly or indirectly, or to an attorney, and solely for the purpose of reporting or investigating a suspected violation of law; or (ii) in a complaint or other document filed in a lawsuit or other proceeding, if such filing is made under seal. 

5.4.Return of Confidential Information.  Upon request by Company, Executive agrees to promptly deliver or destroy (as instructed by Company) to Company the original and any copies of Confidential Information, whether physical or digital.   

6.OWNERSHIP RIGHTS.   

6.1.Ownership of Inventions.  Executive will promptly disclose in writing to the Company all inventions (whether or not patentable), ideas, improvements, techniques, know-how, concepts, processes, discoveries, developments, designs, formulae, artwork, content, software programs, other copyrightable works, trade secrets, technology, algorithms, data and any other work product created, conceived or developed by Executive (whether alone or jointly with others) during the Relationship, or which relate to any Confidential Information (collectively, “Inventions”).  Executive hereby agrees that all Inventions and all right, title and interest therein, including without limitation patents, patent rights, copyrights, mask work rights, trade secret rights and other intellectual property rights anywhere in the world (collectively “Rights”), are the sole property of Company.  Executive agrees to assign and hereby assigns to Company all Inventions and all Rights on a perpetual, worldwide and royalty-free basis.  Executive agrees to perform all acts deemed necessary or desirable by Company to permit and assist it in evidencing, perfecting, obtaining, maintaining, defending and enforcing its Rights and/or Executive’s assignment with respect to such Inventions in any and all countries.  Such acts may include without limitation the execution of documents and assistance or cooperation in legal proceedings.  Executive hereby irrevocably designates and appoints Company and its duly authorized officers and agents as Executive’s agents and attorneys-in-fact to act for and on behalf and instead of Executive to execute and file any documents and to do all other lawfully permitted acts to further the above purposes with the same legal force and effect as if executed by Executive. 

6.2.Ownership of Confidential Information.  As between the parties, Executive hereby agrees that all Confidential Information and rights therein are the sole property of Company.  Executive agrees to assign and hereby assigns to Company any rights or interests Executive may have or acquire in Confidential Information and all rights relating to all Confidential Information. 

6.3.Moral Rights. Executive hereby irrevocably transfers and assigns to the Company any and all Moral Rights that Executive may have in any Inventions. Executive also hereby forever waives and agrees never to assert against the Company, its successors or licensees any and all Moral Rights which Executive may have in any Inventions, even after termination of Executive’s employment with the Company. For purposes of this Agreement, the term “Moral Rights” means any right to claim authorship of a work, any right to object to any distortion or other modification of a work, and any similar right, existing under the law of any country in the world, or under any treaty. 

6.4.License to Preexisting IP.  Executive agrees not to use or incorporate into Inventions any intellectual property developed by any third party, or any intellectual property of Executive that has not been assigned to Company (collectively “Preexisting IP”), without benefit of license to do so.     

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In the event Executive uses or incorporates Executive’s Preexisting IP into Inventions, Executive hereby grants to Company a non-exclusive, perpetual, fully-paid and royalty-free, irrevocable and worldwide right, with the right to sublicense through multiple levels of sublicensees, to use, reproduce, distribute, create derivative works of, publicly perform and publicly display in any medium or format, whether now known or later developed, such Preexisting IP incorporated or used in Inventions.  However, in no event will Executive incorporate into Inventions any software code licensed under the GNU GPL or LGPL or any similar “open source” license, without written permission to do so from ALPP.  Executive represents and warrants that Executive has an unqualified right to license to Company all of their Preexisting IP as provided in this Section 6.4.

7.GENERAL TERMS. 

7.1.Severability; Amendment; Waiver.  If the application of any provision or provisions of this Agreement to any particular facts or circumstances is held to be invalid or unenforceable by any court of competent jurisdiction, then the validity and enforceability of such provision or provisions as applied to any other particular facts or circumstances and the validity of other provisions of this Agreement will not in any way be affected or impaired thereby.  This Agreement may not be amended or waived except in a written amendment executed by Executive and an officer of Company and ALPP.  The waiver of any one default will not waive any other default. 

7.2.Governing Law.  This Agreement shall be governed in all respects by the laws of the United States of America and by the laws of the State of Indiana, without giving effect to any conflicts of laws principles that require the application of the law of a different jurisdiction.  The prevailing party will be entitled to reasonable attorneys’ fees and expenses. 

7.3.Notices.  Any notice required or permitted by this Agreement shall be in writing and shall be delivered as follows with notice deemed given as indicated: (a) by personal delivery when delivered personally; (b) by overnight courier upon written verification of receipt; (c) by telecopy or facsimile transmission upon acknowledgment of receipt of electronic transmission; or (d) by certified or registered mail, return receipt requested, upon verification of receipt.  Notice shall be sent to the addresses set forth in the signature block below or such other address as either party may specify in writing. 

7.4.Assignment.  Neither party shall assign this Agreement without the prior written consent of the other party.  This Agreement will inure to the benefit of and will be binding upon the successors and permitted assigns of the parties, including without limitation any entity acquiring all or substantially all of the assets or voting stock of Company and any wholly-owned U.S. subsidiary of Company. 

7.5.Interpretation.  The language of this Agreement will be construed as a whole according to its fair meaning, and not strictly for or against any of the parties.  The section headings in this Agreement are solely for convenience and will not be considered in its interpretation.  

7.6.Counterparts; Exhibits.  This Agreement may be executed in any number of counterparts, each of which will be an original, but all of which together will constitute one instrument.  The exhibits referred to herein and annexed hereto are hereby incorporated into and made a part of this Agreement. 

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IN WITNESS WHEREOF, for the purpose of binding the parties hereto to this Agreement, the parties or their duly authorized representatives have signed their names on the dates indicated below.  Executive understands that, notwithstanding the date of execution or acceptance by Company, this Agreement is effective as of the Effective Date. 

 

	COMPANY

	 

	 

	A4 TECHNOLOGIES, INC.

	 

	 

	 

	 

	By: 

	/s/

	Name: 

	 

	Title: 

	 

	 

	 

	ALPP

	 

	 

	 

	ALPINE 4 HOLDINGS, INC.

	 

	 

	 

	 

	By: 

	/s/

	Name: 

	 

	Title: 

	 

	 

	 

	 

	 

	Executive

	 

	 

	 

	 

	By: 

	/s/ Robert Jeffrey Kingston

	 

	Robert Jeffrey Kingston

	 

	 

	Address:

	 

	 

	 

	Phone:

	 

EXECUTION COPYSIGNATURE PAGE TO EXECUTIVE AGREEMENT 

EXHIBIT A

SCOPE OF DUTIES 

Duties

Reporting Relationships:  This position will report directly to the COO and CEO of ALPP and the Company. ALPP may add new direct reports as needed.

Executive:

nDuring the Term, Executive shall serve as President of the Subsidiaries and shall perform the normal duties, responsibilities and functions of a President of a company of a similar size and type and shall have such power and authority as shall reasonably be required to enable Executive to perform Executive’s duties hereunder in a manner consistent with the traditional responsibilities of the office of President, subject to the power and authority of the Company COO, CEO, or Board to expand or limit such duties, responsibilities, functions, power and authority and to overrule actions of officers of Company’s Subsidiaries.  

 

nDuring the Term, Executive shall (i) render such administrative, financial and other executive and managerial services to the Company and its Subsidiaries which are consistent with Executive’s position as President, as the Board may from time to time direct, (ii) report to the Company COO or CEO or Board and devote Executive’s best efforts and Executive’s full business time and attention (except for permitted vacation periods and reasonable periods of illness or other incapacity) to the business and affairs of the Company and its Subsidiaries and (iii) submit to the Company COO or CEO or Board all business, commercial and investment opportunities presented to Executive or of which Executive becomes aware which relate to the business of the Company and its Subsidiaries.  In furtherance of the preceding, Executive shall perform Executive’s duties, responsibilities and functions to the Company and its Subsidiaries hereunder to the best of Executive’s abilities in a diligent, trustworthy and professional manner and shall devote his full business time and efforts to the business and affairs of the Company. 

Execution CopyNEITHER  THIS  SECURITY  NOR  THE  SECURITIES  INTO  WHICH  THIS SECURITY  IS  EXERCISABLE  HAVE  BEEN  REGISTERED  WITH  THE SECURITIES   AND   EXCHANGE   COMMISSION   OR   THE   SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN AVAILABLE EXEMPTION FROM, OR  IN  A  TRANSACTION  NOT  SUBJECT  TO,  THE  REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE  STATE  SECURITIES  LAWS  AS  EVIDENCED  BY  A  LEGAL OPINION OF COUNSEL TO THE TRANSFEROR REASONABLY ACCEPTABLE TO THE COMPANY TO SUCH EFFECT, THE SUBSTANCE OF WHICH SHALL BE REASONABLY ACCEPTABLE TO THE COMPANY.  

THIS WARRANT SHALL BE VOID AFTER  5:00  P.M.  EASTERN TIME UPON THE EXPIRATION DATE AS DEFINED BELOW.

 

ALPINE 4 HOLDINGS, INC.

WARRANT TO PURCHASE SHARES OF
CLASS A COMMON STOCK

 

This Warrant (the “Warrant”) is issued as of December 9, 2021 to Kirby Goedde (the “Warrantholder”) by Alpine 4 Holdings, Inc, a Delaware Corporation (the “Company”) in connection with the Membership Interest Purchase Agreement (the “Purchase Agreement”), of even or near date herewith, to which Company and Warrantholder are among the contracting parties. Capitalized terms used but not defined herein shall have the meaning set forth in the Purchase Agreement.  

FOR VALUE RECEIVED, the Warrantholder is entitled to purchase from Company, subject to the provisions and conditions of this Warrant, at any time before 5:00 P.M. Eastern time on the third year anniversary of the Closing Date as defined in the Purchase Agreement (the “Expiration Date”), an amount of shares (“Warrant Shares”) of the Company’s Class A Common Stock (“Common Stock”) equal to $900,000 divided by the warrant price  per share (“Warrant Price”) calculated as the Variable Weighted Average Price of the Common Stock averaged over the three Trading Days prior to the Closing Date.  (“Trading Days” shall mean any day on which the Common Stock is traded on the Nasdaq exchange.) The number of Warrant Shares purchasable upon exercise of this Warrant and the Warrant Price shall be subject to adjustment from time to time as described under Section 8 herein.

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Section 1.Record Keeping.  The Company shall maintain books for the transfer and registration of the Warrant for purposes of the Company’s books and records.  Upon the initial issuance of this Warrant, the Company shall issue and register the Warrant in the name of the Warrantholder on the Company’s books and records.  

Section 2.Transfers.  As provided herein, this Warrant may be transferred only pursuant to a registration statement filed under the Securities Act of 1933, as amended (the “Securities Act”), or an exemption from such registration.  Subject to such restrictions, the Company shall transfer this Warrant from time to time upon the books to be maintained by the Company for that purpose, upon surrender hereof for transfer, properly endorsed or accompanied by appropriate instructions for transfer and such other documents as may be reasonably required by the Company, including, if required by the Company, an opinion of its counsel to the effect that such transfer is exempt from the registration requirements of the Securities Act, to establish that such transfer is being made in accordance with the terms hereof, and a new Warrant shall be issued to the transferee and the surrendered Warrant shall be canceled by the Company. 

Section 3.Exercise of Warrant.   

(a)Subject to the provisions hereof, the Warrantholder may exercise this Warrant at any time beginning after the issuance date prior to the Expiration Date, upon surrender of the Warrant, together with delivery of a duly executed Warrant exercise form, in the form attached hereto as Appendix A (the “Notice of Exercise”) and payment by cash, certified check or wire transfer of funds equal to  the Warrant Price multiplied by that number of Warrant Shares then being purchased, to the Company during normal business hours on any business day at the Company’s principal executive offices (or such other office or agency of the Company as it may designate by notice to the Warrantholder).  The Warrant Shares so purchased shall be deemed to be issued to the Warrantholder or the Warrantholder’s designee, as the record owner of such shares, as of the close of business on the date on which this Warrant shall have been surrendered (or the date evidence of loss, theft or destruction thereof and security or indemnity satisfactory to the Company has been provided to the Company), the Warrant Price shall have been paid and the completed Notice of Exercise shall have been delivered.  Certificates for the Warrant Shares so purchased shall be delivered to the Warrantholder within ten (10) Trading Days after this Warrant shall have been so exercised.  The certificates so delivered shall be in such denominations as may be requested by the Warrantholder and shall be registered in the name of the Warrantholder or such other name as shall be designated by the Warrantholder, as specified in the Notice of Exercise.  If this Warrant shall have been exercised only in part, then, unless this Warrant has expired, the Company shall, at its expense, at the time of delivery of such certificates, deliver to the Warrantholder a new Warrant representing the right to purchase the number of shares with respect to which this Warrant shall not then have been exercised.  As used herein, “business day” means a day, other than a Saturday or Sunday, on which banks in New York City, New York are open for the general transaction of business.    Notwithstanding the foregoing, to effectuate the exercise of the Warrant hereunder, the Warrantholder shall not be required to physically surrender this Warrant to the Company unless the entire Warrant is exercised.  The Warrantholder and the Company shall maintain records showing the amount exercised and the dates of such exercise.  The Warrantholder and any assignee, by acceptance of this Warrant, acknowledge and agree that by reason of the provision of the paragraph, following exercise of a portion of the Warrant the  

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number of Warrant Shares purchasable under this Warrant may be less than the amount of Warrant Shares purchasable when the Warrant was originally granted.  

Section 4.Compliance with the Securities Act of 1933. This Warrant may only be exercised by the Warrantholder if the Warrantholder is an “accredited investor” as defined by Rule 501 of Regulation D.  The Company may cause the legend set forth on the first page of this Warrant to be set forth on each Warrant, and a similar legend on any security issued or issuable upon exercise of this Warrant, unless counsel for the Company is of the opinion as to any such security that such legend is unnecessary. 

Section 5.Payment of Taxes.  The Company will pay any documentary stamp taxes attributable to the initial issuance of Warrant Shares issuable upon the exercise of the Warrant; provided, however, that the Company shall not be required to pay any tax or taxes which may be payable in respect of any transfer involved in the issuance or delivery of any certificates for Warrant Shares in a name other than that of the Warrantholder in respect of which such shares are issued, and in such case, the Company shall not be required to issue or deliver any certificate for Warrant Shares or any Warrant until the person requesting the same has paid to the Company the amount of such tax or has established to the Company’s reasonable satisfaction that such tax has been paid.  The Warrantholder shall be responsible for income taxes due under federal, state or other law, if any such tax is due. 

Section 6.Mutilated or Missing Warrants.  In case this Warrant shall be mutilated, lost, stolen, or destroyed, the Company shall issue in exchange and substitution of and upon surrender and cancellation of the mutilated Warrant, or in lieu of and substitution for the Warrant lost, stolen or destroyed, a new Warrant of like tenor and for the purchase of a like number of Warrant Shares, but only upon receipt of evidence reasonably satisfactory to the Company of such loss, theft or destruction of the Warrant, and with respect to a lost, stolen or destroyed Warrant, reasonable indemnity or bond with respect thereto, if requested by the Company. 

Section 7.Reservation of Common Stock.  At any time when this Warrant is exercisable, the Company shall at all applicable times keep reserved until issued (if necessary) as contemplated by this Section 7, out of the authorized and unissued shares of Common Stock, at least a number of shares of Common Stock equal to 100% of the number of shares of Common Stock as shall from time to time be necessary to effect the exercise of all of this Warrant then outstanding.  The Company agrees that all Warrant Shares issued upon due exercise of the Warrant shall be, at the time of delivery of the certificates for such Warrant Shares, duly authorized, validly issued, fully paid and non-assessable shares of Common Stock of the Company. 

Section 8.Adjustments.   

(a)If the Company shall, at any time or from time to time while this Warrant is outstanding, pay a dividend or make a distribution on its Common Stock in shares of Common Stock, subdivide its outstanding shares of Common Stock into a greater number of shares or combine its outstanding shares of Common Stock into a smaller number of shares or issue by reclassification of its outstanding shares of Common Stock any shares of its capital stock (including any such reclassification in connection with a consolidation or merger in which the Company is the continuing corporation), then (i) the Warrant Price in effect immediately prior to  

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the date on which such change shall become effective shall be adjusted by multiplying such Warrant Price by a fraction, the numerator of which shall be the number of shares of Common Stock outstanding immediately prior to such change and the denominator of which shall be the number of shares of Common Stock outstanding immediately after giving effect to such change and (ii) the number of Warrant Shares purchasable upon exercise of this Warrant shall be adjusted by multiplying the number of Warrant Shares purchasable upon exercise of this Warrant immediately prior to the date on which such change shall become effective by a fraction, the numerator of which is shall be the Warrant Price in effect immediately prior to the date on which such change shall become effective and the denominator of which shall be the Warrant Price in effect immediately after giving effect to such change, calculated in accordance with clause (i) above.  Such adjustments shall be made successively whenever any event listed above shall occur.

(b)If any capital reorganization, reclassification of the capital stock of the Company, consolidation or merger of the Company with another corporation in which the Company is not the survivor, or sale, transfer or other disposition of all or substantially all of the Company’s assets to another corporation shall be effected, then, as a condition of such reorganization, reclassification, consolidation, merger, sale, transfer or other disposition, lawful and adequate provision shall be made whereby each Warrantholder shall thereafter have the right to purchase and receive upon the basis and upon the terms and conditions herein specified and in lieu of the Warrant Shares immediately theretofore issuable upon exercise of the Warrant, such shares of stock, securities or assets as would have been issuable or payable with respect to or in exchange for a number of Warrant Shares equal to the number of Warrant Shares immediately theretofore issuable upon exercise of the Warrant, had such reorganization, reclassification, consolidation, merger, sale, transfer or other disposition not taken place, and in any such case appropriate provision shall be made with respect to the rights and interests of each Warrantholder to the end that the provisions hereof (including, without limitation, provision for adjustment of the Warrant Price) shall thereafter be applicable, as nearly equivalent as may be practicable in relation to any shares of stock, securities or assets thereafter deliverable upon the exercise hereof.  The Company shall not effect any such consolidation, merger, sale, transfer or other disposition unless prior to or simultaneously with the consummation thereof the successor corporation (if other than the Company) resulting from such consolidation or merger, or the corporation purchasing or otherwise acquiring such assets or other appropriate corporation or entity shall assume the obligation to deliver to the Warrantholder, at the last address of the Warrantholder appearing on the books of the Company, such shares of stock, securities or assets as, in accordance with the foregoing provisions, the Warrantholder may be entitled to purchase, and the other obligations under this Warrant.  The provisions of this paragraph (b) shall similarly apply to successive reorganizations, reclassifications, consolidations, mergers, sales, transfers or other dispositions. 

(c)In case the Company shall fix a payment date for the making of a distribution to all holders of Common Stock (including any such distribution made in connection with a consolidation or merger in which the Company is the continuing corporation) of evidences of indebtedness or assets (other than cash dividends or cash distributions payable out of consolidated earnings or earned surplus or dividends or distributions referred to in Section 8(a)), or subscription rights or warrants, the Warrant Price to be in effect after such payment date shall be determined by multiplying the Warrant Price in effect immediately prior to such payment date by a fraction, the numerator of which shall be the total number of shares of Common Stock outstanding multiplied by the Market Price per share of Common Stock immediately prior to such  

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payment date, less the fair market value (as determined by the Company’s Board of Directors in good faith) of said assets or evidences of indebtedness so distributed, or of such subscription rights or warrants, and the denominator of which shall be the total number of shares of Common Stock outstanding multiplied by such Market Price per share of Common Stock immediately prior to such payment date.  

(d)An adjustment to the Warrant Price shall become effective immediately after the payment date in the case of each dividend or distribution and immediately after the effective date of each other event which requires an adjustment. 

(e)In the event that, as a result of an adjustment made pursuant to this Section 8, the Warrantholder shall become entitled to receive any shares of capital stock of the Company other than shares of Common Stock, the number of such other shares so receivable upon exercise of this Warrant shall be subject thereafter to adjustment from time to time in a manner and on terms as nearly equivalent as practicable to the provisions with respect to the Warrant Shares contained in this Warrant. 

(f)To the extent permitted by applicable law and the listing requirements of any stock market or exchange on which the Common Stock is then listed, the Company from time to time may decrease the Warrant Price by any amount for any period of time if the period is at least twenty (20) days, the decrease is irrevocable during the period and the Board shall have made a determination that such decrease would be in the best interests of the Company, which determination shall be conclusive provided however, that the Warrant Price may not be decreased below the Market Price on the date of the execution of the Subscription Agreement.  Whenever the Warrant Price is decreased pursuant to the preceding sentence, the Company shall provide written notice thereof to the Warrantholder at least five (5) days prior to the date the decreased Warrant Price takes effect, and such notice shall state the decreased Warrant Price and the period during which it will be in effect.   

Section 9.Fractional Interest.  The Company shall not be required to issue fractions of Warrant Shares upon the exercise of this Warrant.  If any fractional share of Common Stock would, except for the provisions of the first sentence of this Section 9, be deliverable upon such exercise, the Company, in lieu of delivering such fractional share, shall pay to the exercising Warrantholder or any assignee an amount in cash (rounded to the nearest whole cent) equal to such fractional amount multiplied by the Warrant Price. 

Section 10.Benefits.  Nothing in this Warrant shall be construed to give any person, firm or corporation (other than the Company and the Warrantholder) any legal or equitable right, remedy or claim, it being agreed that this Warrant shall be for the sole and exclusive benefit of the Company and the Warrantholder. 

Section 11.Notices to Warrantholder.  Upon the happening of any event requiring an adjustment of the Warrant Price, the Company shall not later than five (5) Business Days after the occurrence of such event give written notice thereof to the Warrantholder at the address appearing in the records of the Company, stating the adjusted Warrant Price and the adjusted number of Warrant Shares resulting from such event and setting forth in reasonable detail the method of calculation and the facts upon which such calculation is based.  Failure to give such notice to the  

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Warrantholder or any defect therein shall not affect the legality or validity of the subject adjustment. In the event that the Company fails to give notice of an event requiring an adjustment of the Warrant Price to the Warrantholder within five Business Days of such event, the Company shall pay to the Warrantholder liquidated damages of Ten Thousand Dollars ($10,000).

Section 12.Identity of Transfer Agent.  The Transfer Agent for the Common Stock is VStock Transfer, LLC, 18 Lafayette Place, Woodmere, NY 11598.  Upon the appointment of any subsequent transfer agent for the Common Stock or other shares of the Company’s capital stock issuable upon the exercise of the rights of purchase represented by the Warrant, the Company will mail to the Warrantholder a statement setting forth the name and address of such transfer agent. 

Section 13.Notices.  Unless otherwise provided, any notice required or permitted under this Warrant shall be given in writing and shall be deemed effectively given and received as hereinafter described (i) if given by personal delivery, then such notice shall be deemed received upon such delivery, (ii) if given by telex or facsimile, then such notice shall be deemed received upon receipt of confirmation of complete transmittal, (iii) if given by certified mail return receipt requested, then such notice shall be deemed received upon the day such return receipt is signed, and (iv) if given by an internationally recognized overnight air courier, then such notice shall be deemed given one business day after delivery to such carrier.  Copies of such notices shall also be transmitted by email to the email address provided for on the signature page of the Subscription Agreement.  All notices shall be addressed as follows: if to the Warrantholder, at its address as set forth in the Company’s books and records and, if to the Company, at the address as follows, or at such other address as the Warrantholder or the Company may designate by ten days’ advance written notice to the other: 

If to the Warrantholder:

Kirby Goedde

 

_____________________________

 

_____________________________

 

Email: _______________________

 

With a copy (which shall not constitute notice) to:

_____________________________

 

_____________________________

 

_____________________________

 

Email: _______________________

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If to the Company:

Alpine 4 Holdings, Inc. 

2525 E Arizona Biltmore Circle, Suite C237

Phoenix, AZ 85016

Attn: Kent Wilson, CEO 

Email: kwilson@alpine4.com

 

With a copy (which shall not constitute notice) to:

Kirton McConkie, P.C.

50 East South Temple Street, Suite 400

Salt Lake City, UT 84111

ATTN: C. Parkinson Lloyd

Email: plloyd@kmclaw.com

 

Section 14.Successors.  All the covenants and provisions hereof by or for the benefit of the Warrantholder shall bind and inure to the benefit of its respective successors and assigns hereunder.  

Section 15.Governing Law; Consent to Jurisdiction; Waiver of Jury Trial.  This Warrant shall be governed by, and construed in accordance with, the internal laws of the State of Delaware, without reference to the choice of law provisions thereof.  The Company and, by accepting this Warrant, the Warrantholder, each irrevocably submits to the exclusive jurisdiction of the courts of the State of Indiana, for the purpose of any suit, action, proceeding or judgment relating to or arising out of this Warrant and the transactions contemplated hereby.  Service of process in connection with any such suit, action or proceeding may be served on each party hereto anywhere in the world by the same methods as are specified for the giving of notices under this Warrant.  The Company and, by accepting this Warrant, the Warrantholder, each irrevocably consents to the jurisdiction of any such court in any such suit, action or proceeding and to the laying of venue in such court.  The Company and, by accepting this Warrant, the Warrantholder, each irrevocably waives any objection to the laying of venue of any such suit, action or proceeding brought in such courts and irrevocably waives any claim that any such suit, action or proceeding brought in any such court has been brought in an inconvenient forum.   

EACH OF THE COMPANY AND, BY ITS ACCEPTANCE HEREOF, THE WARRANTHOLDER HEREBY WAIVES ANY RIGHT TO REQUEST A TRIAL BY JURY IN ANY LITIGATION WITH RESPECT TO THIS WARRANT AND REPRESENTS THAT COUNSEL HAS BEEN CONSULTED SPECIFICALLY AS TO THIS WAIVER.

Section 16.No Rights as Stockholder.  Prior to the exercise of this Warrant, the Warrantholder shall not have or exercise any rights as a stockholder of the Company by virtue of its ownership of this Warrant. 

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Section 17.Remedies; Other Obligations; Breaches and Injunctive Relief.  The remedies provided in this Warrant shall be cumulative and in addition to all other remedies available under this Warrant and the other Transaction Documents, at law or in equity (including a decree of specific performance and/or other injunctive relief), and nothing herein shall limit the right of the Warrantholder right to pursue actual damages for any failure by the Company to comply with the terms of this Warrant.  The Company acknowledges that a breach by it of its obligations hereunder will cause irreparable harm to the Warrantholder and that the remedy at law for any such breach may be inadequate.  The Company therefore agrees that, in the event of any such breach or threatened breach, the Warrantholder shall be entitled, in addition to all other available remedies, an injunction restraining any breach, without the necessity of showing economic loss and without any bond or other security being required. 

Section 18.Section Headings.  The section headings in this Warrant are for the convenience of the Company and the Warrantholder and in no way alter, modify, amend, limit or restrict the provisions hereof. 

IN WITNESS WHEREOF, the Company has caused this Warrant to be duly executed, as of the date written below.

 

ALPINE 4 HOLDINGS, INC.

 

 

 

By: /s/ Kent B. Wilson_______________

Name: Kent B. Wilson

Title:  Chief Executive Officer 

 

Date: December 9, 2021_______________

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APPENDIX A

ALPINE 4 HOLDINGS, INC.
NOTICE OF EXERCISE FORM

 

To Alpine 4 Holdings, Inc.:

 

The undersigned hereby irrevocably elects to exercise the right of purchase represented by the within Warrant (“Warrant”) for, and to purchase thereunder by the payment of the Warrant Price and surrender of the Warrant, _______________ shares of Common Stock (“Warrant Shares”) provided for therein, and requests that certificates for the Warrant Shares be issued as follows: 

	 

	Name

	 

	 

	 

	Address

	 

	 

	Federal Tax ID or Social Security No.

 

and delivered by certified mail to the above address, or (if the Company’s Common Stock is publicly traded) electronically (provide DWAC Instructions):

_____________________________________

_____________________________________

_____________________________________ 

or other (specify):

_____________________________________

_____________________________________

_____________________________________ 

 

and, if the number of Warrant Shares shall not be all the Warrant Shares purchasable upon exercise of the Warrant, that a new Warrant for the balance of the Warrant Shares purchasable upon exercise of this Warrant be registered in the name of the undersigned Warrantholder or the undersigned’s Assignee as below indicated and delivered to the address stated below.

[Signature page follows.]

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	Dated: ___________________, ____

 

 

 

	 

	 

	 

	 

	 

	Signature

 

	 

	Signature of Spouse/Partner (if applicable)

 

	 

	 

	 

	Individual or Entity Name (and Title, if applicable)

	 

	Name (please print)

 

	 

	 

	 

	 

	 

	 

	 

	 

	 

	 

	 

	 

	Address

 

	 

	Address

 

	 

	 

	 

	Federal Identification or Social Security No.

 

	 

	Federal Identification or Social Security No.

 

 

	 

	 

	Assignee:

	 

	 

	 

	 

	 

	 

	 

	 

	 

	 

	 

	 

	 

	 

	 

	Note:  The signature must correspond with the name of the Warrantholder as written on the first page of the Warrant in every particular, without alteration or enlargement or any change whatever, unless the Warrant has been assigned.

 

	 

	 

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