Document:

Exhibit 10.1

 

EXECUTIVE EMPLOYMENT AGREEMENT

 

This EXECUTIVE EMPLOYMENT AGREEMENT (“Agreement”)
is made and entered into as of March 31, 2021, by and between Red Cat Holdings, Inc., a Nevada corporation (“Company”)
and Jeffrey Thompson, an individual (“Executive”). As used herein, the “Effective
Date” of this
Agreement
shall
mean April 1, 2021.

 

W I T N E S S E T H:

 

WHEREAS, the
Executive desires to be employed by the Company as Chief Executive Officer and the Company wishes to employ the Executive in such capacity;
and

 

NOW, THEREFORE,
in consideration of the foregoing and their respective covenants and agreements contained in this document the Company and the Executive
hereby agree as follows:

 

1.                  
Employment and Duties. The Company agrees to employ and the Executive agrees to serve as the
Company’s Chief Executive Officer. The duties and responsibilities of the Executive shall include the duties and responsibilities
as the Company’s Board of Directors (“Board”) may from time to time assign to the Executive and reasonably commensurate
with those duties and responsibilities normally associated with and appropriate for someone in the position of Chief Executive Officer.
As used herein, “Board” and “Compensation Committee” shall include the Board of Directors and Compensation Committee
of the Company.

 

The Executive
shall devote all of his business time and best efforts to the performance of his duties under this Agreement and shall be subject to,
and shall comply with the Company policies, practices and procedures and all codes of ethics or business conduct applicable to his position,
as in effect from time to time. Notwithstanding the foregoing, the Executive shall be entitled to (i) serve as a member of the board of
directors of a reasonable number of companies, subject to the advance approval of the Board, which approval shall not be unreasonably
withheld, conditioned or delayed; (ii) serve on civic, charitable, educational, religious, public interest or public service boards, subject
to the advance approval of the Board, which approval shall not be unreasonably withheld, and (iii) manage the Executive’s personal
and family investments, in each case, to the extent such activities do not materially interfere, as determined by the Board in good faith,
with the performance of the Executive’s duties and responsibilities hereunder.

 

2.                  
Term. The term of this Agreement shall commence on the Effective Date and shall continue for
a period of one (1) year following the Effective Date and shall be automatically renewed for successive one (1) year periods thereafter
unless either party provides the other party with written notice of his or its intention not to renew this Agreement at least three (3)
months prior to the expiration of the initial term or any renewal term of this Agreement. “Employment Period” shall
mean the initial one (1) year term plus renewals, if any.

 

3.                  
Place of Employment. The Executive’s services shall be performed at the Company’s
offices located at 370 Harbour Drive, Palmas del Mar, Humacao, Puerto Rico 00791 or such other
location(s) as mutually agreed upon in writing between the Company and the Executive.

 

4.               
Base Salary. The Company agrees to pay the Executive a base salary (“Base Salary”)
equal to $248,000 per annum. The Base Salary shall be paid in periodic installments in accordance with the Company’s regular payroll
practices. The Base Salary may only be increased, but not decreased without the written consent of the Executive. At the option of Executive
in any fiscal year of the Company in which: A) at any time market cap is at least $500,000,000; and B) traded price per share is at least
$6.00 per share stock price on a national securities exchange for 60 consecutive days (the “Incentive Criteria”), Executive
may elect to receive all or any portion of Base Salary for a subsequent period in shares of Common Stock valued at the thirty-day VWAP
for each pay period for which the election is applicable.

 

5.               
Annual Bonus/Target Incentive Bonuses. 

 

(a) Bonuses. The Executive shall
be eligible to receive an annual bonus the (“Annual Bonus”) of up to two-hundred (200%) percent of the Base Salary,
to be paid in cash, as reasonably determined by the Compensation Committee and/or the Board of Directors of the Company (the “Compensation
Committee”). Executive and the Compensation Committee will work to define a set of goals and objectives for the term of the
Agreement as a basis for determining a bonus award(s). Such goals will be quantitative as well as qualitative in nature. The Annual Bonus
shall be paid by the Company to the Executive promptly after determination that the relevant targets,
if any, have been met, it being understood that the attainment of any financial targets associated with
any bonus shall not be determined until following the completion of the Company’s annual audit and public announcement of such
results and shall be paid promptly following the Company’s announcement of earnings, subject to cash availability. Notwithstanding
the foregoing, the Executive shall be entitled to receive the full Annual Bonus upon achieving the Incentive Criteria during the prior
fiscal year and thereupon Executive may elect to receive all or any portion of Annual Bonus for a prior period in shares of Common Stock
valued at the thirty-day VWAP on the date set for payment of the Annual Bonus by the Board of Directors or the Compensation Committee
for which the election is applicable.

 

In the event that the Compensation Committee
is unable to act or if there shall be no such Compensation Committee, then all references herein to the Compensation Committee (except
in the proviso to this sentence) shall be deemed to be references to the Board. Upon termination from employment, the Executive shall
be entitled to receive a pro-rata portion of the Annual Bonus calculated based upon the last day of the fiscal quarter in which his employment
is terminated, regardless of whether he is employed by the Company through the conclusion of the fiscal quarter or year, as the case may
be, on which the Annual Bonus is based.

 

(b) Equity
Awards. Executive shall receive an initial award (the “Initial Award”) and be eligible for such grants of awards
under the Company’s 2019 Equity Incentive Plan (or any successor or replacement plan adopted by the Board and approved by the stockholders
of the Company) (the “Plan”) as the Compensation Committee or Board may from time to time determine (the “Share
Awards”). The Initial Award shall be as set forth on Exhibit A annexed hereto vesting as set forth (the “Executive
Vesting Schedule”). Share Awards shall be subject to the applicable Plan terms and conditions, provided, however, that Share
Awards shall be subject to any additional terms and conditions as are provided herein or in any award, Board resolution or certificate(s),
which shall supersede any conflicting provisions governing Share Awards provided under the Plan.

  

 

		6.	Severance Compensation.

 

(a)          
Upon termination of employment for
any reason, the Executive shall be entitled to: (A) all Base Salary earned through the date of termination to be paid according to Section
4; (B) any Annual Bonuses, pro-rated, to be paid in accordance with Section 5(a) and Section 5(b) above (unless termination is for Cause,
as defined below) ; (C) all accrued but unused vacation time, and (d) reimbursement of all reasonable expenses as set forth in Section
8.

 

(b)           
Upon termination of employment by Company for any reason other than for cause (“Cause”)
as defined in Section 11(c), or upon termination of employment by Executive for good reason (“Good Reason”) as defined
in Section 11(d)(1), Executive shall be entitled to receipt of all vested and unvested shares contemplated in the Executive Award in accord
with the any vesting schedule as if no termination occurred.

 

(c)        
In the event of a termination by the Company without Cause, by the Executive for Good Reason or by
the Executive within one hundred eighty days (180) days of the occurrence of a Change of Control (as defined below) and subject to the
additional provisions of Section 11(d)(3), then in addition to the severance compensation set forth in Section 6(a) and 6(b), Executive
shall also be entitled to the following enhanced separation benefits (“Enhanced Separation Benefits”): (i) the greater
of Executive’s continued Base Salary through the balance of the Employment Period, as renewed, or twenty-four (24) months of Executive’s
then Base Salary; (ii) continued participation in Company welfare benefit plans (including health benefits) on the same terms as immediately
prior to termination and to be paid in full by the Company for the period of time set forth in this Section 6(c) (not to be less than
twelve (12) months of continuation of benefits) and (iii) immediate vesting of all stock options/equity awards.

 

(d)        
Upon termination of Executive’s continued benefits (either pursuant to Section 6(a), 6(b) or
6(c) as the case may be), the Executive may continue coverage with respect to the Company’s group health plans as permitted by the
Consolidated Omnibus Budget Reconciliation Act of 1985 (“COBRA”) for himself and each of his “Qualified Beneficiaries”
as defined by COBRA (“COBRA Coverage”). The Company shall reimburse the amount of any COBRA premium paid for COBRA
Coverage timely elected by and for the Executive and any Qualified Beneficiary of the Executive, and not otherwise reimbursed, during
the period that ends on the earliest of (x) the date the Executive or the Qualified Beneficiary, as the case may be, ceases to be eligible
for COBRA Coverage, (y) the last day of the consecutive eighteen (18) month period following the date of the Executive’s termination
of employment and (z) the date the Executive or the Qualified Beneficiary, as the case may be, is covered by another group health plan.
To reimburse any COBRA premium payment under this paragraph, the Company must receive documentation of the COBRA premium payment within
ninety (90) days of its payment.

 

7.                
Clawback Rights. The Annual Bonus, and any and all stock based compensation (such as options
and equity awards) (collectively, the “Clawback Benefits”) shall be subject to “Clawback Rights”
as follows: during the period that the Executive is employed by the Company and upon the termination of the Executive’s employment
and for a period of three (3) years thereafter, if there is a restatement of any financial results from which any metrics were determined
to be achieved which were the basis of the granting and calculation of such Clawback Benefits to the Executive, the Executive agrees to
repay any amounts which were determined by reference to any Company financial results which were later restated (as defined below), to
the extent the Clawback Benefits amounts paid exceed the Clawback Benefits amounts that would have been paid, based on the restatement
of the Company’s financial information. All Clawback Benefits amounts resulting from such restated financial results shall be retroactively
adjusted by the Compensation Committee to take into account the restated results, and any excess portion of the Clawback Benefits resulting
from such restated results shall be immediately surrendered to the Company and if not so surrendered within ninety (90) days of the revised
calculation being provided to the Executive by the Compensation Committee following a publicly announced restatement, the Company shall
have the right to take any and all action to effectuate such adjustment. The calculation of the revised Clawback Benefits amount shall
be determined by the Compensation Committee in good faith and in accordance with applicable law, rules and regulations. All determinations
by the Compensation Committee with respect to the Clawback Rights shall be final and binding on the Company and the Executive. The Clawback
Rights shall terminate following a Change of Control as defined in Section 11(f), subject to applicable law, rules and regulations. For
purposes of this Section 7, a restatement of financial results that requires a repayment of a portion of the Clawback Benefits amounts
shall mean a restatement resulting from material non-compliance of the Company with any financial reporting requirement under the federal
securities laws and shall not include a restatement of financial results resulting from subsequent changes in accounting pronouncements
or requirements which were not in effect on the date the financial statements were originally prepared (“Restatements”).
The parties acknowledge it is their intention that the foregoing Clawback Rights as relates to Restatements conform in all respects to
the provisions of the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 (“Dodd-Frank Act”) and require
recovery of all “incentive-based” compensation, pursuant to the provisions of the Dodd-Frank Act and any and all rules and
regulations promulgated thereunder from time to time in effect. Accordingly, the terms and provisions of this Agreement shall be deemed
automatically amended from time to time to assure compliance with the Dodd-Frank Act and such rules and regulations as hereafter may be
adopted and in effect.

 

8.                  
Expenses. The Executive shall be entitled to prompt reimbursement by the Company for all reasonable
ordinary and necessary travel, entertainment, and other expenses incurred by the Executive while employed (in accordance with the policies
and procedures established by the Company for its senior executive officers) in the performance of his duties and responsibilities under
this Agreement; provided, that the Executive shall properly account for such expenses in accordance with Company policies and procedures.
Reimbursement of such expenses shall be paid out even after Executive’s termination for any reason, so long as the expenses were
incurred during Executive’s employment with the Company.

 

9.                  
Other Benefits. During the term of this Agreement, the Executive shall be eligible to participate
in incentive, stock purchase, savings, retirement (401(k)), and welfare benefit plans, including, without limitation, health, medical,
dental, vision, life (including accidental death and dismemberment) and disability insurance plans (collectively, “Benefit Plans”),
in substantially the same manner and at substantially the same levels as the Company makes such opportunities available to the Company’s
managerial or salaried executive employees and/or its senior executive officers.

 

10.             
Vacation. During the term of this Agreement, the Executive shall be entitled to accrue, on
a pro rata basis, thirty (30) paid vacation days per year. Vacation shall be taken at such times as are mutually convenient to the Executive
and the Company and no more than fifteen (15) consecutive days shall be taken at any one time without Company approval in advance.

 

		11.	Termination of Employment.

 

(a)                    
Death. If the Executive dies during the Employment Period, this Agreement and the Executive’s
employment with the Company shall automatically terminate and the Company’s obligations to the Executive’s estate and to the
Executive’s Qualified Beneficiaries shall be those set forth in Section 6(a) and 6(d) regarding severance compensation.

 

(b)                    
Disability. In the event that, during the term of this Agreement the Executive shall be prevented
from performing his essential functions hereunder to the full extent required by the Company by reason of Disability (as defined below),
this Agreement and the Executive’s employment with the Company shall automatically terminate. The Company’s obligation to
the Executive under such circumstances shall be those set forth in Section 6(a) and 6(d) regarding severance compensation. For purposes
of this Agreement, “Disability” shall mean a physical or mental disability that prevents the performance by the Executive,
with or without reasonable accommodation, of his essential functions hereunder for an aggregate of ninety (90) days or longer during any
twelve (12) consecutive months. The determination of the Executive’s Disability shall be made by an independent physician who is
reasonably acceptable to the Company and the Executive (or his representative), be final and binding on the parties hereto and be made
taking into account such competent medical evidence as shall be presented to such independent physician by the Executive and/or the Company
or by any physician or group of physicians or other competent medical experts employed by the Executive and/or the Company to advise such
independent physician.

 

		(c)	Cause.

 

(1)                
At any time during the Employment Period, the Company may terminate this Agreement and the Executive’s
employment hereunder for Cause. For purposes of this Agreement, “Cause” shall mean: (a) the willful and continued failure
of the Executive to perform substantially his material duties and responsibilities for the Company (other than any such failure resulting
from the Executive’s death or Disability) after a written demand by the Board for substantial performance is delivered to the Executive,
which specifically identifies the manner in which the Board believes that the Executive has not substantially performed his duties and
responsibilities, which willful and continued failure is not cured by the Executive within thirty (30) days following his receipt of such
written demand; the conviction of, or plea of guilty or nolo contendere to, a felony, or (c) fraud, dishonesty or gross misconduct
which is materially and demonstratively injurious to the Company. Termination under clauses (b) or (c) of this Section 11(c)(1) shall
not be subject to cure.

 

(2)                 
For purposes of this Section 11(c), no act, or failure to act, on the part of the Executive shall
be considered “willful” unless done, or omitted to be done, by him in bad faith and without reasonable belief that his action
or omission was in, or not opposed to, the best interest of the Company. Between the time the Executive receives written demand regarding
substantial performance, as set forth in subparagraph (1) above, and prior to an actual termination for Cause, the Executive will be entitled
to appear (with counsel) before the full Board to present information regarding his views on the Cause event. Under no circumstances shall
Executive be terminated under Section 11(c)(1)(a) before the expiration of the 30 day cure period. After such hearing, termination for
Cause must be approved by a majority vote of the full Board (other than the Executive). For terminations pursuant to Sections 11(c)(1)(b)
and (c), the Board may suspend the Executive with full pay and benefits until a final determination by the full Board has been made.

 

(3)                
Upon termination of this Agreement for Cause, the Company shall have no further obligations or liability
to the Executive or his heirs, administrators or executors with respect to compensation and benefits thereafter, except for the obligation
to pay the Executive pursuant to Section 6(a). The Company shall deduct, from all payments made hereunder, all applicable taxes, including
income tax, FICA and FUTA, and other appropriate deductions.

 

		(d)	For Good Reason or a Change of Control or Without Cause.

 

(1)                  
At any time during the term of this Agreement and subject to the conditions set forth in Section
11(d)(2) below, the Executive may terminate this Agreement and the Executive’s employment with the Company for “Good Reason”
or on account of a “Change of Control” (as defined in Section 11(f)). For purposes of this Agreement, “Good Reason”
shall mean the occurrence of any of the following events without Executive’s consent: (A) the assignment to the Executive of duties
that are significantly different from, and/or that result in a substantial diminution of, the duties that he assumed on the Effective
Date (including reporting to anyone other than solely and directly to the Board); (B) the assignment to the Executive of a title that
is different from and subordinate to the Chief Executive Officer of the Company, provided, however, for the absence of doubt following
a Change of Control, should the Executive be required to serve in a diminished capacity in a division or unit of another entity (including
the acquiring entity), such event shall constitute Good Reason regardless of the title of the Executive in such acquiring company, division
or unit; (C) material breach by the Company of this Agreement, or (D) a required relocation of the Executive's place of employment (as
defined in Section 3) by more than a 50 mile radius.

 

(2)                  
The Executive shall not be entitled to terminate this Agreement for Good Reason unless and until
he shall have delivered written notice to the Company within ninety (90) days of the date upon which the facts giving rise to Good Reason
occurred of his intention to terminate this Agreement and his employment with the Company for Good Reason, which notice specifies in reasonable
detail the circumstances claimed to provide the basis for such termination for Good Reason, and the Company shall not have eliminated
the circumstances constituting Good Reason within thirty (30) days of its receipt from the Executive of such written notice. In the event
the Executive elects to terminate this Agreement for Good Reason in accordance with Section 11(d)(1), such election must be made within
the eighty (180) days following the initial existence of one or more of the conditions constituting Good Reason as provided in Section
11(d)(1). In the event the Executive elects to terminate this Agreement for a Change in Control in accordance with Section 11(d)(1), such
election must be made within one hundred eighty (180) days of the occurrence of the Change of Control.

 

(3)                  
In the event that the Executive terminates this Agreement and his employment with the Company for
Good Reason or within one hundred eighty (180) days of the occurrence of a Change of Control, or the Company terminates this Agreement
and the Executive’s employment with the Company without Cause, the Company shall pay or provide to the Executive (or, following
his death, to the Executive’s heirs, administrators or executors) the Enhanced Separation Benefits set forth in Sections 6(c) and
6(d); provided, that the Executive executes an agreement releasing Company and its affiliates from any liability associated with this
Agreement (excepting any payment obligations) and such release is irrevocable at the time the separation payment is first payable under
this Section 11 and the Executive complies with his other obligations under Sections 12 and 13 of this Agreement. Subject to the terms
hereof, one-half (1/2) of the compensation of the Enhanced Separation Benefits payment shall be paid within thirty (30) days of the Executive’s
termination of employment (“Initial Payment”), provided that the Executive has executed a release (excepting payment
obligations) and that if the release execution period begins in one taxable year and ends in another taxable year, the Initial Payment
shall not be made until the beginning of the taxable year immediately following termination. The balance of the compensation of the Enhanced
Separation Benefits shall be paid in substantially equal installments on the Company’s regular payroll dates beginning with the
first payroll date coincident with or immediately following the Initial Payment and ending on the payroll date coincident with or immediately
following the twelve (12) month anniversary of the Initial Payment. The Company shall deduct, from all payments made hereunder, all applicable
taxes, including income tax, FICA and FUTA, and other appropriate deductions.

 

(4)                  
The Executive shall not be required to mitigate the amount of any payment provided for in this Section
11(d) by seeking other employment or otherwise, nor shall the amount of any payment provided for in this Section 11(d) be reduced by any
compensation earned by the Executive as the result of employment by another employer or business or by profits earned by the Executive
from any other source at any time before and after the termination date. The Company’s obligation to make any payment pursuant to,
and otherwise to perform its obligations under, this Agreement shall not be affected by any offset, counterclaim or other right that the
Company may have against the Executive for any reason.

 

(e)                  
Without “Good Reason” by the Executive. At any time during the term of this Agreement,
the Executive shall be entitled to terminate this Agreement and the Executive’s employment with the Company without Good Reason
and other than for a Change of Control by providing prior written notice of at least thirty (30) days to
the Company. Upon termination by the Executive of this Agreement or the Executive’s employment with the Company without Good
Reason and other than for a Change of Control, the Company shall have no further obligations or liability to the Executive or his heirs,
administrators or executors with respect to compensation and benefits thereafter, except for the obligations set forth in Sections 6(a).
The Company shall deduct, from all payments made hereunder, all applicable taxes, including income tax, FICA and FUTA, and other appropriate
deductions.

 

(f)                       
Change of Control. For purposes of this Agreement, “Change of Control”
shall mean the occurrence of any one or more of the following: (i) the accumulation (if over time, in any consecutive twelve (12) month
period), whether directly, indirectly, beneficially or of record, by any individual, entity or group (within the meaning of Section 13(d)(3)
or 14(d)(2) of the Securities Exchange Act of 1934, as amended) of more than fifty (50%) percent or more of the shares of the outstanding
Common Stock of the Company, whether by merger, consolidation, sale or other transfer of shares of Common Stock (other than a merger or
consolidation where the stockholders of the Company prior to the merger or consolidation are the holders of a majority of the voting securities
of the entity that survives such merger or consolidation) for purposes of clarity the Company expects to sell a number of shares and/or
convert outstanding senior debt and/or preferred stock to either preferred or common stock not limited to the period of this contract
to raise funds and stabilize its balance sheet and any such sales shall not constitute a change of control for purposes of this section
or Agreement, (ii) a sale of all or substantially all of the assets of the Company or (iii) during any period of twelve (12) consecutive
months, the individuals who, at the beginning of such period, constitute the Company, and any new director whose election by the Board
or nomination for election by the Company’s or Company’s stockholders was approved by a vote of at least two-thirds (2/3)
of the directors then still in office who either were directors at the beginning of the twelve (12) month period or whose election or
nomination for election was previously so approved, cease for any reason to constitute at least a majority of the Board.

 

(g)                  
Any termination of the Executive’s employment by the Company or by the Executive (other than
termination by reason of the Executive’s death) shall be communicated by written Notice of Termination to the other party of this
Agreement. For purposes of this Agreement, a “Notice of Termination” shall mean a written notice which shall indicate
the specific termination provision in this Agreement relied upon and shall set forth in reasonable detail the facts and circumstances
claimed to provide a basis for termination of the Executive’s employment under the provision so indicated, provided, however, failure
to provide timely notification shall not affect the employment status of the Executive.

 

		12.	Confidential Information.

 

(a)                   
Disclosure of Confidential Information. The Executive recognizes, acknowledges and agrees
that he has had and will continue to have access to secret and confidential information regarding the Company and Company, its subsidiaries
and their respective businesses (“Confidential Information”), including but not limited to, its products, methods,
formulas, software code, patents, sources of supply, customer dealings, data, know-how, trade secrets and business plans, provided such
information is not in or does not hereafter become part of the public domain, or become known to others through no fault of the Executive.
The Executive acknowledges that such information is of great value to the Company and Company, is the sole property of the Company and
Company, and has been and will be acquired by him in confidence. In consideration of the obligations undertaken by the Company herein,
the Executive will not, at any time, during or after his employment hereunder, reveal, divulge or make known to any person, any information
acquired by the Executive during the course of his employment, which is treated as confidential by the Company, and not otherwise in the
public domain. The provisions of this Section 12 shall survive the termination of the Executive’s employment hereunder.

 

(b)                   
The Executive affirms that he does not possess and will not rely upon the protected trade secrets
or confidential or proprietary information of any prior employer(s) in providing services to the Company or its subsidiaries.

 

(c)                  
In the event that the Executive’s employment with the Company terminates for any reason, the
Executive shall deliver forthwith to the Company any and all originals and copies, including those in electronic or digital formats, of
Confidential Information; provided, however, the Executive shall be entitled to retain (i) papers and other materials of a personal nature,
including, but not limited to, photographs, correspondence, personal diaries, calendars and rolodexes, personal files and phone books,
(ii) information showing his compensation or relating to reimbursement of expenses, (iii) information that he reasonably believes may
be needed for tax purposes and (iv) copies of plans, programs and agreements relating to his employment, or termination thereof, with
the Company.

 

		13.	Section 409A.

The provisions
of this Agreement are intended to comply with or are exempt from Section 409A of the Code (“Section 409A”) and the
related Treasury Regulations and shall be construed in a manner consistent with the requirements for avoiding taxes or penalties under
Section 409A. The Company and the Executive agree to work together in good faith to consider amendments to this Agreement and to take
such reasonable actions necessary, appropriate or desirable to avoid imposition of any additional tax under Section 409A or income recognition
prior to actual payment to the Executive under this Agreement.

 

It is intended
that any expense reimbursement made under this Agreement shall be exempt from Section 409A. Notwithstanding the foregoing, if any expense
reimbursement made under this Agreement shall be determined to be “deferred compensation” subject to Section 409A (“Deferred
Compensation”), then (a) the right to reimbursement or in-kind benefits is not subject to liquidation or exchange for another
benefit, (b) the amount of expenses eligible for reimbursement, or in-kind benefits, provided during any taxable year shall not affect
the expenses eligible for reimbursement, or in-kind benefits to be provided, in any other taxable year (provided that this clause (b)
shall not be violated with regard to expenses reimbursed under any arrangement covered by Section 105(b) of the Code solely because such
expenses are subject to a limit related to the period the arrangement is in effect) and (c) such payments shall be made on or before the
last day of the taxable year following the taxable year in which the expense was incurred.

 

With respect
to the time of payments of any amount under this Agreement that is Deferred Compensation, references in the Agreement to “termination
of employment” and substantially similar phrases, including a termination of employment due to the Executive’s Disability,
shall mean “Separation from Service” from the Company within the meaning of Section 409A (determined after applying
the presumptions set forth in Treasury Regulation Section 1.409A-1(h)(1)). Each installment payable hereunder shall constitute a separate
payment for purposes of Treasury Regulation Section 1.409A-2(b), including Treasury Regulation Section 1.409A-2(b)(2)(iii). Each payment
that is made within the terms of the “short-term deferral” rule set forth in Treasury Regulation Section 1.409A-1(b)(4) is
intended to meet the “short-term deferral” rule. Each other payment is intended to be a payment upon an involuntary termination
from service and payable pursuant to Treasury Regulation Section 1.409A-1(b)(9)(iii), et. seq., to the maximum extent permitted by that
regulation, with any amount that is not exempt from Code Section 409A being subject to Code Section 409A.

 

Notwithstanding
anything to the contrary in this Agreement, if the Executive is a “specified employee” within the meaning of Section 409A
at the time of the Executive’s termination, then only that portion of the severance and benefits payable to the Executive pursuant
to this Agreement, if any, and any other severance payments or separation benefits which may be considered Deferred Compensation (together,
the “Deferred Separation Benefits”), which (when considered together) do not exceed the Section 409A Limit (as defined
herein) may be made within the first six (6) months following the Executive’s termination of employment in accordance with the payment
schedule applicable to each payment or benefit. Any portion of the Deferred Separation Benefits in excess of the Section 409A Limit otherwise
due to the Executive on or within the six (6) month period following the Executive’s termination will accrue during such six (6)
month period and will become payable in one lump sum cash payment on the date six (6) months and one (1) day following the date of the
Executive’s termination of employment. All subsequent Deferred Separation Benefits, if any, will be payable in accordance with the
payment schedule applicable to each payment or benefit. Notwithstanding anything herein to the contrary, if the Executive dies following
termination but prior to the six (6) month anniversary of the Executive’s termination date, then any payments delayed in accordance
with this paragraph will be payable in a lump sum as soon as administratively practicable after the date of the Executive’s death
and all other Deferred Separation Benefits will be payable in accordance with the payment schedule applicable to each payment or benefit.

 

For purposes
of this Agreement, “Section 409A Limit” shall mean a sum equal to (x) the amounts payable within the terms of the “short-term
deferral” rule under Treasury Regulation Section 1.409A-1(b)(4) plus (y) the amount payable as “separation pay due to involuntary
separation from service” under Treasury Regulation Section 1.409A-1(b)(9)(iii) equal to the lesser of two (2) times: (i) the Executive’s
annualized compensation from the Company based upon his annual rate of pay during the Executive’s taxable year preceding his taxable
year when his employment terminated, as determined under Treasury Regulation 1.409A-1(b)(9)(iii)(A)(1); and (ii) the maximum amount that
may be taken into account under a qualified plan pursuant to Section 401(a)(17) of the Code for the year in which the Executive’s
employment is terminated.

 

		14.	Miscellaneous.

 

(a)                   
Neither the Executive nor the Company may assign or delegate any of their rights or duties under
this Agreement without the express written consent of the other; provided, however, that the Company shall have the right to delegate
its obligation of payment of all sums due to the Executive hereunder, provided that such delegation shall not relieve the Company of any
of its obligations hereunder.

 

(b)                   
During the term of this Agreement, the Company (i) shall indemnify and hold harmless the Executive
and his heirs and representatives to the maximum extent provided by the laws of the Cayman Islands and by the Company’s bylaws and
(ii) shall cover the Executive under the Company’s directors’ and officers’ liability insurance on the same basis as
it covers other senior executive officers and directors of the Company.

 

(c)                   
This Agreement constitutes and embodies the full and complete understanding and agreement of the
parties with respect to the Executive’s employment by the Company, supersedes all prior understandings and agreements, whether oral
or written, between the Executive and the Company, and shall not be amended, modified or changed except by an instrument in writing executed
by the party to be charged. The invalidity or partial invalidity of one or more provisions of this Agreement shall not invalidate any
other provision of this Agreement. No waiver by either party of any provision or condition to be performed shall be deemed a waiver of
similar or dissimilar provisions or conditions at the same time or any prior or subsequent time.

 

(d)                   
This Agreement shall inure to the benefit of, be binding upon and enforceable against, the parties
hereto and their respective successors, heirs, beneficiaries and permitted assigns.

 

(e)                   
The headings contained in this Agreement are for convenience of reference only and shall not affect
in any way the meaning or interpretation of this Agreement.

 

(f)                  
All notices, requests, demands and other communications required or permitted to be given hereunder
shall be in writing and shall be deemed to have been duly given when personally delivered, sent by registered or certified mail, return
receipt requested, postage prepaid, or by reputable national overnight delivery service (e.g., Federal Express) for overnight delivery
to the party at the address set forth in the preamble to this Agreement, or to such other address as either party may hereafter give the
other party notice of in accordance with the provisions hereof. Notices shall be deemed given on the sooner of the date actually received
or the third business day after deposited in the mail or one business day after deposited with an overnight delivery service for overnight
delivery.

 

(g)                   
This Agreement shall be governed by and construed in accordance with the internal laws of the State
of Delaware, and each of the parties hereto irrevocably consents to the jurisdiction and venue of the federal and state courts located
in the State of Delaware for any disputes arising out of this Agreement, or the Executive’s employment with the Company. The prevailing
party in any dispute arising out of this Agreement shall be entitled to his or its reasonable attorney’s fees and costs.

 

(h)                   
This Agreement may be executed simultaneously in two or more counterparts, each of which shall be
deemed an original, but all of which together shall constitute one of the same instrument. The parties hereto have executed this Agreement
as of the date set forth above.

 

(i)                  
The Executive represents and warrants to the Company, that he has the full power and authority to
enter into this Agreement and to perform his obligations hereunder and that the execution and delivery of this Agreement and the performance
of his obligations hereunder will not conflict with any agreement to which the Executive is a party.

 

(j)                  
The Company represents and warrants to the Executive that it has the full power and authority to
enter into this Agreement and to perform its obligations hereunder and that the execution and delivery of this Agreement and the performance
of its obligations hereunder will not conflict with any agreement to which the Company is a party.

 

[Signature page follows immediately]

 

 

 

    	 

    	 

    

 

 

IN WITNESS WHEREOF, the Executive And the Company have caused this Executive
Employment Agreement to be executed as of the date first above written.

 

 

 

	
    COMPANY:

     

    RED CAT HOLDINGS, INC.

     

     

    By: /s/ Joseph Freedman

    Name: Joseph Freedman

    Title: Director, Compensation Committee

     

     

    EXECUTIVE:

     

    /s/ Jeffrey Thompson

    JEFFREY THOMPSON

	 
	 	 
	 	 
	 	 
	 

 

 

 

 

 

 

    	 

    	 

    

EXHIBIT A

 

500,000 fully-vested 10 year non-qualified stock options to purchase shares
of Common Stock at an exercise price of $3.95 per share (equal to the fair market value and closing price of Common Stock on March 30,
2021), with net exercise rights, which options and shares shall be issued under the Plan and applicable exemption from Section 16 of the
Securities Exchange Act of 1934 provided pursuant to Rule 16b-3 thereunder.fssn_ex101.htm

 EXHIBIT 10.1
  
 MEMORANDUM OF UNDERSTANDING
  
 This Memorandum of Understanding (“MOU”) is made as of the 1st day of April 2021 between Fision Corporation (“Fision”), a Delaware Corporation, Score, Inc. (“Score”), a Puerto Rico Corporation, and Joshua Carmona (“Carmona”), an individual.
  
 Recitals
  
 A. Fision is a publicly traded a company (OTC: FSSN) that is a leading provider of cloud-based digital asset management, sales enablement, and agile marketing technologies.
   
 B. Score is an Act 73 company under Puerto Rico law that is in the enterprise software space and currently provides business to business solutions for approximately 100 US companies in the credit repair space.
   
 C. Carmona owns 100% of the stock in Score.
   
 D. Fision wishes to purchase and Carmona wishes to sell all his interest in Score and its subsidiaries.
   
 E. Score will become a wholly owned subsidiary of Fision upon consummation of the sale by Carmona.
   
 F. The parties wish to set forth in this MOU the terms and conditions under which Fision will acquire Score.
   
 NOW THEREFORE, in consideration of the mutual promises set forth below and intending to be legally bound, the parties agree as follows:
   
 1. Incorporation of Recitals. The recitals set forth above are true and correct and incorporated as an integral part of this MOU.
   
 2. Purchase and Sale of Score Stock. Carmona will sell to Fision and Fision will purchase from Carmona 100% of the stock of Score (the “Stock”).
   
 3. Representations of Carmona. Carmona represents and warrants as follows:
   
 a. He is the sole owner of 100% of the Stock and no other person owns any interest of any kind in the Stock.
  
 b. He owns the Stock free and clear of all liens and encumbrances of any sort.
  
 c. There are no other classes of stock or ownership in Score other than the Stock.
  
 d. These representations are true and correct as of the date of this MOU, and they will remain true and correct through the date of Closing, as defined below.
   
 	 
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 4. Representations of Score. Score represents and warrants as follows:
   
 a. Score is a duly incorporated Puerto Rico company organized under Act 73 of Puerto Rico law and is in good standing.
   
 b. Score will own 100% of the ownership in VIP Solutions LLC and there will be no liens or encumbrances on that ownership at Closing. 
  
 c. The sale of Stock to Fision by Carmona will not affect Score’s status as an Act 73 company and all necessary procedures will be followed under Act 73 so that completion of the instant transaction will not affect Score’s status as an Act 73 company.
   
 d. There is no legal impediment to the sale of Stock contemplated under this MOU.
   
 e. All corporate action necessary to approve this MOU and the sale of Stock have been or will be taken by the date of Closing.
   
 f. There will be no material change in the operations or financial condition of Score between the signing of this MOU and Closing.
   
 5. Representations of Fision. Fision represents and warrants as follows:
  
 a. Fision is a duly incorporated Delaware company and is in good standing.
  
 b. All corporate action necessary to approve this MOU and the purchase of the Stock have been or will be taken by the date of Closing.
   
 6. Due Diligence. Fision will have 70 days from the signing of this MOU to conduct its due diligence into the operations and finances of Score, in which Score and Carmona will fully cooperate and deliver to Fision or its representative all information about Score Fision or its representatives may request.
   
 	 
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 7. Closing. Closing is contingent on:
   
 a. The satisfactory completion of due diligence as determined by Fision in its sole and absolute discretion.
   
 b. The presentation by Score to Fision of its audited financials satisfactory to Fision’s auditors in their sole and absolute discretion.
   
 c. Closing will occur within 5 business days of the satisfaction of the conditions set forth in 7.a. and b.
   
 8. Compensation for the Stock. In consideration for the purchase of the Stock:
  
 a. Fision will issue to Carmona at Closing a Senior Secured Promissory Note for $500,000 substantially in the form attached as Exhibit 1, convertible into not more than 10 million shares of common stock of Fision at the higher of $0.05 per share or at the volume weighted average price (VWAP) over the last 10 trading days prior to conversion; and what’s the trigger/maturity date?
   
 b. Fision will issue to Carmona by not later than March 31, 2023 a second, unsecured promissory note in a form satisfactory to Fision and Carmona in an amount equal to Score’s average gross revenue during calendar years 2021 and 2022. It will be convertible into not more than 10 million shares of common stock of Fision at $0.20 per share and will contain the usual and customary protections and adjustments for future corporate actions, including but not limited to pricing adjustments for reverse stock splits. 
   
 9. Carmona’s Future Position with Fision. After Closing, Carmona will become a member of the Board of Directors of Fision and serve as its Chief Operating Officer. His sole compensation for these services will be $50,000 per year and will be paid quarterly in shares of common stock of Fision as determined by the closing stock price on the last trading day of each calendar quarter. 
   
 10. Future Funding for Score. Fision will provide, make available to, or invest in our subsidiary, Score, no less than $500,000 over the 18 months following Closing a minimum of $500k to be used for software development, integration and marketing costs. Fision further expects to have Score add additional employees over this period and that the Fision and Score software stacks will be integrated and marketed jointly through a public relations entity. 
   
 11. Miscellaneous.
  
 a. Assignment. This MOU is not assignable or delegable by Carmona or Score. Fision may assign its rights under this MOU to a person or entity that is an affiliate or a successor in interest to substantially all of Fision’s business operations. Upon such assignment, the rights and obligations of Fision hereunder will become the rights and obligations of such affiliate or successor person or entity.
  
 b. Headings. Titles or captions of sections or paragraphs contained in this MOU are intended solely for the convenience of reference and will not serve to define, limit, extend, modify, or describe the scope of this MOU or the meaning of any provision hereof.
  
 	 
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 c. No Waiver. The failure of a party to insist upon strict adherence to any term of this MOU on any occasion will not be considered a waiver of such party's rights or deprive such party of the right thereafter to insist upon strict adherence to that term or any other term of this MOU.
  
 d. Governing Law. This MOU will be construed, interpreted, and applied in accordance with the laws of the State of Delaware, excluding provisions of Delaware law concerning choice-of-law that would result in the law of any state other than Delaware being applied. Any actions brought under this MOU must be brought exclusively in a court of competent jurisdiction located within the State of Delaware.
  
 e. Severability. All provisions of this MOU are severable. If any provision or portion of this MOU will be or become invalid, illegal, or unenforceable in any respect, the validity, legality, and enforceability of the remaining provisions of this MOU will not be affected.
  
 f. Counterparts. This MOU may be executed in one or more counterparts, each of which will be deemed an original, and all of which taken together will constitute one and the same instrument. Electronic signatures will be considered as originals. 
  
 g. Entire Agreement; Amendment. This MOU supersedes all prior agreements or understandings between them whether express or implied, relating to the subject matter of the MOU. This MOU may not be altered, modified, amended, or waived unless such alteration, modification, amendment, or waiver is made in writing and properly executed by all parties. 
  
 h. Authority to Sign. The parties signing this MOU represent and warrant that each of them is authorized to sign on behalf of the party for whom they are signing.
  
 i. Waiver of Jury Trial. The parties waive their right to have any dispute under this MOU heard by a jury to the fullest extent possible.
  
 	 
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 IN WITNESS WHEREOF, the parties have each exercised and delivered this MOU as of the date first set forth at the head of this MOU.
  
 	 FISION CORPORATION
	 	SCORE, INC.	 
	  
	  
	  
	  
	  
	  

	 By: 
	Michael P. Brown  	 	By: 	Joshua Carmona	 
	 Title: 
	Principal Executive Officer & Chairman  	 	Title: 	President & CEO	 
	  
	  
	  
	  

	 /s/ Michael Brown   
	 	/s/ Joshua Carmona  	 

 
   
 	 
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 EXHIBIT 1
   
 Senior Secured Convertible Promissory Note
  
 	 
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 SENIOR SECURED CONVERTIBLE PROMISSORY NOTE
  
 Neither the security evidenced hereby nor the shares of capital stock into which it is convertible have been registered under the Securities Act of 1933, or any state securities laws, and may not be sold, transferred, assigned, offered, pledged or otherwise distributed for value unless there is an effective registration statement under such act or laws covering such security or FISION CORPORATION receives an opinion of counsel for the holder of this security (concurred in by counsel for FISION CORPORATION; PROVIDED, HOWEVER, THAT SUCH CONCURRENCE WILL NOT BE UNREASONABLY WITHHELD) stating that such sale, transfer, assignment, pledge or distribution is exempt from the registration and prospectus delivery requirements of the Securities Act of 1933 and all applicable state securities laws.
  
 	 $500,000
	  
	  May [____], 2021

 
   
 FOR VALUE RECEIVED, Fision Corporation, a Delaware limited liability company (“Fision”), with an address at __________________________________ , and Score Inc., Puerto Rico (collectively with Fision, the “Maker”) promises to pay to the order of Josh Carmona, an individual with an address at _________________________________, FL _______ (“Payee”), the principal sum of Five Hundred Thousand Dollars ($500,000) with no interest on the unpaid principal balance. Unless earlier converted pursuant to the terms of this Note, principal will be due at the Maturity Date. This Note may not be amended or modified, nor will any waiver of any provision hereof be effective, except by an instrument in writing signed by the party against whom enforcement of any amendment, modification, or waiver is sought. Prepayment of principal may be made by the Maker and within the terms of this Note if no conversion has been executed. 
  
 1.Definitions: 
  
 a.“Maturity Date” means two years from the date of this Note.
   
 b. “Memorandum of Understanding (“MOU”)” means the Memorandum of Understanding, dated as of April 1, 2021 between Fision Corporation (“Fision”), a Delaware Corporation, Score, Inc. (“Score”), a Puerto Rico Corporation, and Joshua Carmona (“Carmona”), and individual. 
   
 c. “Senior Security Position” means the Maker hereby grants Carmona, to secure the payment and performance in full of all of the obligations due under the Note a continuing security interest in, and pledges to Carmona, the Collateral, wherever located, whether now owned or hereafter acquired or arising, and all proceeds and products thereof.Fision represents, warrants, and covenants that the security interest granted herein is and shall at all times continue to be a first priority perfected security interest in the Collateral (subject only to Permitted Liens that are permitted to have superior priority).
   
 	 
	7
	

	 

 
  
 d. “Collateral” means all the assets and property of Score, including without limitations its Accounts Receivable.
   
 e. “Trigger Date” means the earlier of (i) the Maturity Date, or (ii) the date on which Carmona elects to exercise his conversion rights. 
   
 f. “Default” means the failure of Maker to pay the amount due by the Maturity Date, unless the parties otherwise agree, constitutes default. 
  
 2. Conversion Terms. Subject to the conversion provisions set forth below, outstanding amounts due under this Note may be converted at any time following the Trigger Date or a Default into not more than 10 million shares of common stock of Fision Corporation, based on a conversion price equal to the greater of: (aa) $0.05 per share, or (bb) Volume Weighted Average Price (“VWAP”) over the last 10 trading days prior to conversion. Exercise of the option to convert will satisfy all obligations under this Note.
  
 3. Security Interest. Maker hereby assigns and grants to Carmona a security interest in and to the Collateral of Accounts Receivable and all other assets of Score to secure payment of the Promissory Note, collectively, not to exceed $500,000. 
  
 4. No Recourse. Payee will have no recourse against any officer, director, shareholder, agent or representative of Maker for the payment of the principal of or any fee on this Note, or for any claim based hereon or otherwise in respect hereof, whether by virtue of any constitution, statute or rule of law or by the enforcement of any assessment or penalty or otherwise, all such liability being.
  
 5. Replacement of Note. Upon receipt by the Maker of evidence reasonably satisfactory to it of the loss, theft, destruction or mutilation of this Note, and in case of loss, theft or destruction, of indemnity or security reasonably satisfactory to it, and upon reimbursement to the Maker of all reasonable expenses incidental thereto, and upon surrender and cancellation of this Note, if mutilated, the Maker will make and deliver a new Note of like tenor and dates as of such cancellation, in lieu of this Note. The terms and provisions hereof will inure to the benefit of, and be binding upon, the respective successors and assigns of the Maker and the Payee. 
   
 6. Presentment, Demand, etc. Maker waives presentment, demand, protest, notice of protest, notice of dishonor, and any other notice or demand to which they might otherwise be entitled, together with all requirements necessary to hold it liable as the maker of this Note.
   
 7. Modification. No waiver or modification of the terms of this Note will be valid unless in writing, signed by Maker and Payee. Any modification will be valid only to the extent set forth in writing.
   
 8. Partial Invalidity. If any term or provision of this Note is held invalid, illegal or unenforceable, the validity of all other terms and provisions hereof will in no way be affected thereby.
   
 	 
	8
	

	 

 
  
 9. Remedies Cumulative. The remedies available to Payee at law or in equity will be cumulative and concurrent and may be pursued singly, successively, and together at the sole discretion of the Payee and may be exercised as often as occasion therefore may occur. The failure to exercise any right or remedy will in no event be construed as a waiver or release or remedy.
   
 10. Notice. Any notice required to be given under this Note must be given by hand delivery or recognized overnight courier (such as FEDEX) to the other party at the addresses listed above. Any notice given to Maker must also be given to: Daniel J. Dugan, Esq., Spector Gadon Rosen Vinci PC, 1635 Market Street, 7th Floor, Philadelphia, PA 19103, ddugan@lawsgrvlaw.com.
   
 11. General Provisions. Upon any change in the terms of this Note, and unless otherwise expressly stated in writing, the Maker will not be released from liability. Payee may renew or extend (repeatedly and for any length of time) this Note, or take any other action deemed necessary by Payee without the consent of or notice to anyone. 
   
 12. Assignment. This Note will inure to the benefit of and be binding upon the parties and their respective successors and assigns. Neither party may assign his rights and interest hereunder without the prior written consent of the other party, and any purported assignment without such consent is null and void; provided, however, that Payee may assign this Note to a related party without Maker’s consent. 
   
 13. Governing Law; Venue; Jurisdiction. This Note and the Amendment are to be construed and enforced in accordance with and governed exclusively by the laws of the State of Delaware. Jurisdiction and venue in any action brought by any party pursuant to this Note will lie exclusively in the state or federal court with jurisdiction over Wilmington, DE. Each party irrevocably submits to the exclusive jurisdiction of such courts for itself and in respect of its property with respect to such action. The parties irrevocably agree that venue would be proper in such court, and hereby waive any objection that such court is an improper or inconvenient forum for the resolution of such action. The parties further agree that the mailing by certified or registered mail, return receipt requested, of any process required by any such court shall constitute valid and lawful service of process against them, without necessity for service by any other means provided by statute or rule of court. 
   
 14. Waiver of Jury Trial. MAKER AND PAYEE HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVE TRIAL BY JURY IN ANY SUIT, ACTION OR PROCEEDING INVOLVING THIS NOTE AND THE MOU TO THE FULLEST EXTENT HE MAY LEGALLY AND EFFECTIVELY DO SO.
   
 15. Compliance with Usury Laws. All agreements between Maker and Payee are hereby expressly limited so that in no event will the amount paid or agreed to be paid to Payee for the use, forbearance, or detention of the money to be loaned under this Note exceed the maximum amount permissible under the laws of the State of Delaware. If, at the time of any interest payment, the payment amount due under this Note is in excess of the legal limit, the obligation will be reduced to the legal limit. If Payee should ever receive, as interest, an amount that exceeds the highest lawful rate, the amount that would be excessive as interest will be applied to the reduction of the principal amount owing hereunder, and not to the payment of interest.
   
 16. Documentary Stamp Taxes. Maker is responsible for payment of all documentary stamp taxes and other similar taxes due on the obligation evidenced by this Note.
  
 	 
	9
	

	 

 
  
 IN WITNESS WHEREOF, the undersigned haves duly executed this Note as of the day and year first above written.
  
 MAKER: 
  
 FISION CORPORATION
  
  
 By: __________________________________
  
  
 SCORE INC.
  
  
 By: ___________________________________
  
  
 PAYEE:
  
  
 _____________________________________
 Josh Carmona
  
 	 
	10

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