Document:

Exhibit
10.1

 

Execution Copy

 

AGREEMENT
AND PLAN OF MERGER

 

This
AGREEMENT AND PLAN OF MERGER (this “Agreement”), dated as of May 19, 2017, is entered into by and among Nxt-ID,
Inc., a Delaware corporation (“Purchaser” or “Parent”), Fit Merger Sub, Inc. a Delaware
corporation and wholly-owned subsidiary of Parent (“Merger Sub”), Fit Pay, Inc., a Delaware corporation (the
“Company”), and Michael Orlando (“Orlando”), Giesecke & Devrient Mobile Security America,
Inc. (“G&D”), the other stockholders of the Company (“Other Holders”) and Michael Orlando
as the “Shareholder Representative” representing the Other Holders (each of Orlando, G&D and the Shareholder
Representative, a “Seller” and collectively the “Sellers”) as the sole shareholders of the
Company.

 

WHEREAS,
the respective Boards of Directors or Managers, as applicable, of Parent, Merger Sub, and the Company have determined that it
is in the best interest of each company and their respective stockholders and members, as applicable, to consummate the merger
transaction provided for herein in which the Company would merge with and into Merger Sub, with Merger Sub surviving the Merger,
upon the terms and subject to the conditions set forth herein (the “Merger”);

 

WHEREAS,
the respective Boards of Directors or Managers, as applicable, of Parent, Merger Sub, and the Company have approved this Agreement,
the Merger, and the other transactions contemplated by this Agreement, upon the terms and subject to the conditions set forth
in this Agreement in accordance with the General Corporation Law of the State of Delaware (the “DGCL”), and
their respective charter documents;

 

WHEREAS,
each of Parent, Merger Sub, and the Company desires to make certain representations, warranties, covenants and agreements in connection
with the Merger and the other transactions contemplated by this Agreement and also to prescribe various conditions to the consummation
thereof; and

 

WHEREAS,
it is intended that for United States federal income tax purposes, (a) the Merger shall qualify as a “reorganization”
within the meaning of Section 368(a) of the Code, and (b) this Agreement shall constitute a plan of reorganization within the
meaning of Treasury Regulations Section 1.368-2(g).

 

AGREEMENT

 

NOW,
THEREFORE, in consideration of the foregoing and the mutual promises, representations, warranties, covenants and agreements
herein contained, the parties hereto, intending to be legally bound, hereby agree as follows:

 

ARTICLE
I

 

DEFINITIONS

 

1.1       Definitions.
The following terms shall have the following meanings for the purposes of this Agreement:

 

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

  

“Affiliate”
means, with respect to any specified Person, any other Person which, directly or indirectly, owns or controls, is under common
ownership or control with, or is owned or controlled by, such specified Person. For purposes of this definition, the term “control”
(including the terms “controlling,” “controlled by,” and “under common control with”) means
the possession, direct or indirect, of the power to direct or cause the direction of the management and policies of a Person,
whether through the ownership of voting securities, by contract, or otherwise.

 

“Agreement”
means this Agreement and Plan of Merger, including all exhibits and schedules hereto, as it may be amended from time to time.

 

     

     

    

 

“Balance
Sheet” means the consolidated balance sheet of the Company, dated April 30, 2017, a copy of which is set forth in Schedule
1.1.

 

“Balance
Sheet Date” means April 30, 2017.

 

“Bankruptcy
Code” means Title 11 of the United States Code, as amended.

  

“Business”
means the business of the Company, and shall be deemed to include any of the following incidents of such business: income, cash
flow, operations, condition (financial or other), assets/properties, anticipated revenues/income, prospects, Liabilities and personnel/management.

 

“Business
Confidential Information” means all information, knowledge or data related to the operation of the Business or the Company
that is not in the public domain or otherwise publicly available, other than as a result of any action or inaction by a Seller,
or that has been treated as confidential by the Company.

 

“Business
Day” means any day other than (a) any Saturday or Sunday or (b) any other day on which banks located in New York, New
York are required or permitted to be closed.

 

“Certificates”
shall mean stock certificates that, immediately prior to the Effective Time, represented Shares converted into Merger Consideration
pursuant to Section 2.3 (including any Shares referred to in the last sentence of Section 2.11).

 

“Closing”
has the meaning set forth in Section 2.2.

  

“Closing
Date” has the meaning set forth in Section 2.2.

 

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

 

“Common
Share” means the shares of common stock, par value $0.0001 per share, of the Company.

 

“Company”
has the meaning set forth in the introductory paragraph of this Agreement.

 

“Company
Charter Documents” means the Company’s Certificate of Incorporation, as amended to the date hereof, and the Company’s
Bylaws, as amended to the date hereof.

 

“Company
Plans” has the meaning set forth in Section 3.14(a).

 

“Company
IP Rights” has the meaning set forth in Section 3.10(b).

 

“Company
Registered IP” has the meaning set forth in Section 3.10(a).

 

“Company
Technology” means software and licenses sufficient to enable secure contactless payments at NFC-capable point of sale
terminals, tokenization and authentication services, and backend services for digital wallet creation and management.

 

“Company
Unpaid Transaction Expenses” means the expenses incurred by the Company in connection with this Agreement and the transactions
contemplated hereby that remain unpaid as of the Closing.

 

“Consolidated
Omnibus Budget Reconciliation Act” means the Consolidated Omnibus Budget Reconciliation Act of 1985, as amended.

  

“Contract”
means any contract, lease, commitment, understanding, task order, sales order, purchase order, delivery order, teaming agreement,
joint venture agreement, other agreement, indenture, mortgage, note, bond, right, warrant, instrument, plan, permit or license,
whether written or oral, which is intended or purports to be binding and enforceable.

 

    2 

     

    

 

“De
Minimis Claim” has the meaning set forth in Section 11.3(a).

 

“Debt”
means, on a consolidated basis, any and all (a) obligations for borrowed money, whether current or unfunded, secured or unsecured
(including any accrued but unpaid interest thereon and any premiums, penalties, termination fees, expenses or breakage costs due
upon prepayment of such indebtedness or payable as a result of the consummation of the transactions contemplated hereby) and whether
or not evidenced by notes, bonds, debentures, mortgages or other debt instruments, debt securities or other similar instruments,
(b) obligations to reimburse any Person for amounts drawn upon or funded under a letter of credit or similar arrangement, but
which have not been repaid, (c) obligations arising out of overdrafts, acceptance credit or similar facilities, (d) guarantees
of obligations of a type described in clauses (a) - (c) and inclusive of the items set forth in Section 6.11.

 

“Determination
Letter” has the meaning set forth in Section 3.14(b).

 

“Determined
Losses” has the meaning set forth in Section 11.6.

 

“Earnout
Payment” has the meaning set forth in Section 2.3(b).

 

“Earnout
Period” means the 16-quarter period commencing on October 1, 2017, and ending on September 30, 2021.

 
 

“Effective
Time” means the time at which the Certificate of Merger is filed with the Secretary of State of Delaware.

 

“Equipment”
means machinery, equipment, tools, furniture, office equipment, computer hardware, supplies, materials, vehicles and other items
of tangible personal property accounted for as equipment.

 

“Equity
Recipients” has the meaning set forth in Section 4.3.

 

“ERISA”
means the Employee Retirement Income Security Act of 1974, as amended.

 

“Final
Gross Revenue Statement” has the meaning set forth in Section 2.3(b)(ii)(B).

 

“Financial
Statements” means, collectively, (a) the Company’s consolidated unaudited balance sheet at December 31, 2016 and
the Company’s consolidated unaudited statements of income and cash flows for the 12-month period ended December 31, 2016,
and (b) the Balance Sheet and the Company’s consolidated unaudited statements of income and cash flows for the 3-month period
ended March 31, 2017.

 

“Foreign
Benefit Plan” has the meaning sent forth in Section 3.14(g).

 

“Fundamental
Representations” has the meaning set forth in Section 11.1.

 

“G&D”
has the meaning set forth in the introductory paragraph of this Agreement.

 

“GAAP” means
United States generally accepted accounting principles.

 

“Government
Bid” means a bid, tender or proposal which, if accepted, would result in a Government Contract.

 

“Government
Contract” means any Contract between the Company and any Governmental Authority, as well as any subcontract or other
arrangement by which (i) such company has agreed to provide goods or services to a prime contractor, to the Governmental Authority,
or to a higher-tier subcontractor or (ii) a subcontractor or vendor has agreed to provide goods or services to a company, where,
in either event, such goods or services ultimately will benefit or be used by a Governmental Authority.

 

    3 

     

    

 

“Governmental
Authority” means the government of the United States or any foreign country, any state or political subdivision thereof,
or any entity, body or authority exercising executive, legislative, judicial, regulatory, administrative or other governmental
functions or any court, department, commission, board, agency, instrumentality or administrative body of any of the foregoing.

 

“Gross
Revenue” means all revenue derived from Company Technology and prior to any deductions in respect of gross margin and
sales, general, and administrative expenses as those terms are generally defined according to GAAP, including (i) all revenue
calculated in a manner consistent with current Company pricing methodology for all existing and future agreements, and (ii) all
gross revenue derived from Purchaser’s use of the Company’s technology and calculated as the number of devices shipped
with Company Technology multiplied by $3.00. For the avoidance of doubt, Gross Revenue shall include any revenue derived from
any use by the Purchaser and its Affiliates (including the Company) of the Company Technology.

 

“Gross
Revenue Statement” has the meaning set forth in Section 2.3(b)(ii)(A).

 

“Indemnification
Payment” has the meaning set forth in Section 11.9.

 

“Indemnitee”
has the meaning set forth in Section 11.2.

 

“Indemnitor”
has the meaning set forth in Section 11.2.

   

“Intellectual
Property” means, throughout the world, all trade names, trade dress, corporate names and logos, trademarks, service
marks, patents, copyrights, industrial designs, Internet domain names, IP Addresses (and any registrations with any Governmental
Authority of, and applications for registration pending with respect to, any of the foregoing), works of authorship, trade secrets,
proprietary information, mask works, technology, inventions, processes, designs, know-how, computer software and data, databases
and data collections, formulas, goodwill, any licenses related to any of the foregoing, and all other intangible intellectual
property assets, including all rights to sue and recover for past and future infringement or misappropriation thereof and to receive
all income, royalties, damages and payments for past and future infringements thereof and all other intangible intellectual property
assets and similar or equivalent rights to any of the foregoing anywhere in the world.

 

“IT
Systems” has the meaning set forth in Section 3.10(g).

 

“Law”
means any constitution or provision thereof, law, statute, regulation, ordinance, rule, order, decree, judgment, consent decree,
settlement agreement or governmental requirement enacted by, promulgated by, entered into by, agreed to or imposed by any Governmental
Authority.

 

“Leased
Real Property” means all real property leased by the Company.

 

“Legal
Fees” has the meaning set forth in Section 6.12.

 

“Liability”
means any liability, debt or obligation (whether known or unknown, whether asserted or unasserted, whether absolute or contingent,
whether accrued or unaccrued, whether liquidated or unliquidated, whether due or to become due, and whether or not required to
be reported under GAAP).

 

“Lien”
means any mortgage, lien, charge, restriction, pledge, security interest, option, claim, easement, encroachment or encumbrance.

 

“Loss”
or “Losses” means all Liabilities, losses, costs, claims, damages, lost profits, lost revenues, diminution
in value, penalties and expenses (including reasonable attorneys’ and accountants’ fees and expenses and reasonable
investigation and litigation costs incurred in relation to the matter or in enforcing such matter), whether or not special, non-compensatory,
consequential, indirect, incidental, statutory or punitive.

 

    4 

     

    

 

“Material”
for the purposes of determining whether an item needs to be disclosed herein shall mean any item, contract, or liability that
has a value or effect on the Business of $10,000 or more.

 

“Material
Adverse Change” or “Material Adverse Effect” means any change, event, development or effect that
has a materially adverse effect on or in the business, operations, assets, Liabilities, results of operations, cash flows, prospects
or condition (financial or otherwise) of the Company; provided, however, that Material Adverse Change or Material
Adverse Effect shall not include any adverse change, event, development, or effect to the extent arising from or relating to:
(a) general business or economic conditions, including such conditions related to the Business (provided the impact on the Company
or the Business is not disproportionate to the impact on similar companies in the same industry); (b) national or international
political or social conditions, including the engagement by the United States in hostilities, whether or not pursuant to the declaration
of a national emergency or war, or the occurrence of any military or terrorist attack upon the United States, or any of its territories,
possessions, or diplomatic or consular offices or upon any military installation, equipment or personnel of the United States;
(c) financial, banking, or securities markets (including any disruption thereof and any decline in the price of any security or
any market index); (d) changes in Laws; or (e) the taking of any action required by this Agreement.

 

“Material
Contracts” means all of the Contracts listed or described, or required by Section 3.11 to be listed or described,
in Section 3.11 of the Schedule of Exceptions.

 

“Merger”
has the meaning set forth in the Recitals.

 

“Merger
Consideration” means the Common Stock Payment, the Preferred Stock Payment and the Debt Payment.

  

 “National
Labor Relations Act” means National Labor Relations Act of 1935, as amended.

 

“Neutral
Accountant” means Anton Chia, or in the event that circumstances create an actual conflict of interest that would impair
such Person’s ability to impartially determine any issue presented to it pursuant to this Agreement or if such Person is
otherwise unwilling or unable to provide such services, a nationally-recognized certified public accounting firm mutually agreed
upon by Purchaser and the Sellers. If (1) circumstances create an actual conflict of interest that would impair Anton Chia’s
ability to impartially determine any issue presented to it pursuant to this Agreement or if Anton Chia is otherwise unwilling
or unable to provide such services and (2) Purchaser and the Sellers cannot agree on a nationally recognized certified public
accounting firm to serve as the Neutral Accountant within ten (10) days after either party notifies the other of its intent to
submit such dispute to the Neutral Accountant, then the Neutral Accountant shall be selected by JAMS.

 

“Note
Payments” has the meaning set forth in Section 6.13.

 

“Notice
of Claim” has the meaning set forth in Section 11.4.

 

“Notice
of Objection” has the meaning set forth in Section 11.4.

 

“Order”
means any decree, injunction, judgment, order, ruling, assessment or writ.

 

“Orlando”
has the meaning set forth in the introductory paragraph of this Agreement.

 

“Other
Holders” has the meaning set forth in the introductory paragraph of this Agreement.

 

“Permits”
means any license, permit, franchise, certificate of authority, or order required to be issued by any Governmental Authority.

 

    5 

     

    

 

“Permitted
Liens” means (a) Liens created by Law for current taxes, assessments or similar charges not yet due and payable and
(b) Liens on Equipment securing leases or purchase money indebtedness or financing of such Equipment.

 

“Person”
means any individual or any corporation, proprietorship, firm, partnership, limited partnership, limited liability company, trust,
association, Governmental Authority or other entity.

 

“Pre-Closing
Taxes” means (i) any Taxes of the Company or any of their Affiliates with respect to any Pre-Closing Tax Period, and
(ii) any Taxes for which the Company is held liable under Treasury Regulations Section 1.1502-6 (or any corresponding or similar
provision of state, local or foreign Tax law) by reason of such entity being included in any consolidated, affiliated, combined
or unitary group in any Pre-Closing Tax Period.

 

“Pre-Closing
Tax Period” means any taxable period ending on or prior to the Closing Date.

 

“Preferred
Shares” shall mean the shares of preferred stock, par value $0.01 per share, of the Company.

 

“Pro
Rata Share” means, with respect to a Seller, the number of Shares being sold pursuant to this Agreement by such Seller
divided by the total number of Shares.

 

“Public
Software” has the meaning set forth in Section 3.10(h).

 

“Purchaser”
has the meaning set forth in the introductory paragraph of this Agreement.

 

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

 

“Purchaser
Share Value” shall mean the average closing sales prices per share of the Purchaser Common Stock on the Nasdaq Global
Market during the period of five (5) consecutive trading days ending one trading day prior to the Closing Date.

 

“Receivables”
means accounts receivable, notes receivables and other receivables of the Company arising from the operation of the Business.

 

“Release”
means the form of Release Agreement attached hereto as Exhibit C.

 

“Resolved
Amount” has the meaning set forth in Section 11.4.

 

“Schedule
of Exceptions” has the meaning set forth in Article III.

 

“SEC”
means the U.S. Securities and Exchange Commission, or any successor Governmental Authority.

  

“Seller”
and “Sellers” have the meaning set forth in the introductory paragraph of this Agreement.

 

“Sellers’
knowledge” or “to the knowledge of the Sellers” or variants thereof mean with respect
to any matter in question that Orlando, or any officer or director of the Company has present actual knowledge of such matter
or would have knowledge of such matter after reasonable inquiry and investigation of their direct reports.

 

“Series
C Preferred Stock” means the Series C non-convertible, voting preferred stock of Purchaser.

 

“Shareholder
Representative” shall mean Michael Orlando acting in his capacity as the appointed agent and attorney in fact of the
Other Holders to take the actions set forth herein. All such actions shall be deemed to be facts ascertainable outside this Agreement
and shall be binding on all of the Other Holders of the Company.

 

“Shares”
means all of the issued and outstanding shares of stock of the Company.

 

    6 

     

    

 

“Supplement”
has the meaning set forth in Section 6.2.

 

“Surviving
Entity” has the meaning set forth in Section 2.1.

 

“Tax
Return” means any report, return or other information required to be and actually supplied to a Governmental Authority
in connection with any Taxes.

 

“Taxes”
means all taxes, and all other charges, fees, duties (including customs duties), levies or other assessments in the nature of
a tax, including income, gross receipts, net proceeds, ad valorem, turnover, real and personal property (tangible and intangible),
sales, use, franchise, excise, value added, stamp, leasing, lease, user, transfer, fuel, excess profits, occupational, interest
equalization, windfall profits, severance, license, payroll, environmental, capital stock, disability, employee’s income
withholding, other withholding, unemployment and Social Security taxes, which are imposed by any Governmental Authority, and such
term shall include any interest, penalties or additions to tax attributable thereto.

 

“Termination
Date” has the meaning set forth in Section 10.1(f).

 

“Threshold
Amount” has the meaning set forth in Section 11.3(a).

 

“Transaction
Documents” means this Agreement and the Releases.

  

“Treasury
Regulations” means the Treasury Regulations promulgated under the Code by the U.S. Treasury Department.

  

“Total
Consideration” means the Merger Consideration and the Earnout Payment.

 

 “WARN
Act” has the meaning set forth in Section 3.15.

 

“WilmerHale”
has the meaning set forth in Section 6.12.

 

ARTICLE
II

 

SALE
AND PURCHASE OF SHARES

 

2.1       The
Merger. Upon the terms and subject to the conditions set forth in this Agreement, and in accordance with the DGCL, the Company
shall be merged with and into Merger Sub at the Effective Time of the Merger. Also at the Effective Time, the separate corporate
existence of the Company shall cease, and Merger Sub shall continue as the surviving entity (the “Surviving Entity”).
The Merger shall have the effects set forth in Section 259 of the Delaware General Corporation Law.

 

2.2       Closing.

 

(a)       Upon
the terms and subject to the conditions set forth herein and unless this Agreement has been terminated pursuant to its terms,
the closing of the Merger (the “Closing”) shall take place at the offices of Robinson Brog at 875 Third Avenue,
New York, NY 10022 on the second business day after the satisfaction or waiver of the conditions in Article VIII and Article
IX (other than those conditions that by their nature are to be satisfied at the Closing, but subject to the satisfaction or,
to the extent permitted hereunder, waiver of any such conditions) or at such other time, date or location as the parties hereto
agree. The date on which the Closing actually occurs and the transactions contemplated hereby become effective is hereinafter
referred to as the “Closing Date.”

 

(b)       At
the Closing:

 

(i)       the
Company shall deliver to Purchaser and Merger Sub the various certificates, instruments and documents referred to in Section
8.5;

 

    7 

     

    

 

(ii)       Purchaser
and Merger Sub shall deliver to the Company the various certificates, instruments and documents referred to in Section 9.4;

 

(iii)       the
Surviving Entity shall file with the Secretary of State of the State of Delaware the Certificate of Merger in accordance with
Section 2.4;

 

(iv)       Purchaser
shall deliver to the holders of the Certificates, certificates evidencing the Merger Consideration in accordance with Section
2.3(c);

 

2.3       Effect
on Capital Stock; Earnout; Payment of Merger Consideration.

 

(a)       Conversion
of Shares. At the Effective Time, by virtue of the Merger and without any action on the part of any party or the holder of
any of the following securities:

 

(i)       The
Common Shares and a portion of the Preferred Shares held by G&D issued and outstanding immediately prior to the Effective
Time (other than Dissenting Shares and Common Shares held in the Company’s treasury) shall be converted into and represent
the right to receive shares of common stock of the Parent equal to 19.96% of the outstanding shares of Parent on the trading day
prior to the Closing as set forth in accordance with the Schedule 2.3(a)(i) (such Schedule 2.3(a)(i) to be updated
by the parties on the trading day immediately prior to the Closing) (the “Common Stock Payment”).

 

(ii)       The
remaining Preferred Shares issued and outstanding immediately prior to the Effective Time and held by G&D (other than Dissenting
Shares and Preferred Shares held in the Company’s Treasury) shall be converted into and represent the right to receive 2,000
shares of Series C Preferred Stock, stated value $1,000 per share (the “Preferred Stock Payment”).

 

(b)
       Earnout.

 

(i)       During
the Earnout Period, the Sellers shall be entitled to receive an Earnout Payment equal to 12.5% of the Gross Revenue (the “Earnout
Payment”).

 

(ii)       Review
and Dispute Procedures.

 

(A)       For
each quarter during the Earnout Period, within five (5) days after the filing of the Purchaser’ quarterly report on Form
10-Q with the SEC, Purchaser shall prepare and deliver to the Sellers its good faith calculation of Gross Revenue for such quarter
(the “Gross Revenue Statement”).

 

(B)       On
the tenth (10th) day following Purchaser’s delivery of the Gross Revenue Statement to the Sellers, the Gross Revenue Statement
shall be deemed to be the “Final Gross Revenue Statement” (and shall, for purposes of this Agreement, be deemed
to be final and binding on the parties, including with respect to the calculation of the Gross Revenue thereon) unless, prior
to such date, the Sellers shall have delivered to Purchaser a notice describing in reasonable detail its objections to the Gross
Revenue Statement (including such reasonable detail (to the extent then known to the Sellers) regarding the items in dispute and
a statement of the amount of each adjustment that the Sellers believe should be made to the Gross Revenue Statement). Any items
in the Gross Revenue Statement that are not objected to in the Sellers’ notice shall be deemed to be final and binding on
the parties. Purchaser and the Sellers shall each use reasonable best efforts to resolve any objections and any such resolution
shall be final and binding on all parties. Any disputes on any Gross Revenue Statement shall be addressed after the close of the
fiscal year and the outside independent auditors have reviewed the Purchaser’s financial statements and any adjustments
have been made that may impact the calculation of the Gross Revenue.

 

    8 

     

    

 

(C)       If
Purchaser and the Sellers do not resolve all of the Sellers’ objections within ten (10) days after the filing of the Purchaser’s
annual report on Form 10-K with the SEC containing Purchaser’s audited financial statements, then either Purchaser or the
Sellers may, within ten (10) days after such date, submit the unresolved objections to a Neutral Accountant. Purchaser and the
Sellers shall direct the Neutral Accountant to, within twenty (20) days following such submission, resolve such unresolved objections
and such resolution shall be final and binding on all parties. The Gross Revenue Statement provided by the Neutral Accountant
pursuant to this Section 2.3(b)(ii)(C) (including the calculation of the Gross Revenue thereon) shall be deemed to be the “Final
Gross Revenue Statement” and shall, for purposes of this Agreement, be deemed to be final and binding on the parties. If
neither Purchaser nor the Sellers submits such unresolved objections to the Neutral Accountant during the ten (10) Business Day
period, the Gross Revenue Statement prepared by Purchaser shall be the “Final Gross Revenue Statement” and shall,
for purposes of this Agreement, be deemed to be final and binding on the parties, including with respect to the calculation of
the Gross Revenue therein.

 

(D)       Within
five (5) days after the calculation of the Gross Revenue becomes final and binding on the Parties pursuant to this Section 2.3,
Purchaser shall pay the applicable Earnout Payment to the Sellers in accordance with the wire instructions delivered by the Sellers
to Purchaser.

 

(iii)       Operating
Procedures of the Company.

 

(A)       Generally.
Purchaser and the Sellers recognize that decisions made in the management of the Business by Purchaser after the Closing may affect
the Earnout Payment. Each Seller acknowledges and agrees that after the Closing, Purchaser will manage the Business with a view
to maximizing the long-term value of Purchaser taken as a whole with its subsidiaries as determined by Purchaser and not to maximize
the Earnout Payment during the Earnout Period. Neither Purchaser nor any of its officers, employees, directors or shareholders
or other Affiliates will owe any duty to any Seller or any Affiliate of any Seller to manage Purchaser (including its subsidiaries),
the Company or the Business in such a way as to maximize the Earnout Payment. Notwithstanding the foregoing, during the Earnout
Period, (a) Purchaser shall manage the ongoing business in good faith and shall not intentionally take any action or fail to take
any action primarily for the purpose of reducing or eliminating the Earnout Payment, (b) the Company shall operate the Business
independently from Purchaser’s other businesses and subsidiaries and (c) subject to the principles in the other sentences
of this Section 2.3(b)(iii) and Purchaser’s right to manage the Company and the Business accordingly, Purchaser shall
use its good faith efforts to manage the Company and the Business substantially in the same manner as they were managed prior
to the Closing (and, to the extent any Seller is then an officer of the Company, permit such Seller(s) to do the same. Without
limiting the generality of the foregoing provisions of this Section 2.3(b)(iii), the parties agree that Purchaser’s
consideration of and decisions made in light of normal business consideration factors, such as profit margins, costs of marketing
and sales activities, commercial feasibility, market and technology developments, market acceptance, business opportunities, company
resources, competition and competitive advantages and disadvantages, and economic conditions, shall constitute management of the
Business by Purchaser in good faith

 

(B)       Internal
Restructuring; Acquisitions or Sales. For purposes of clarification, it is the intent of the parties that the economic benefits
of this Section 2.3 shall not be modified or decreased if, in the future, there is an internal ownership, organizational
or operational change within Purchaser and its Affiliates (including, without limitation, if any business or entity is acquired
by Purchaser following the Closing, any current business or Affiliate of Purchaser is combined with the Company, any Affiliate
of Purchaser makes use of Company Technology, or the Purchaser otherwise restructures the Business or the Company) that changes
the actual entities that conduct the Business of the Company after the Closing.

 

(C)       Certain
Acknowledgements. Sellers agree and acknowledge that the right to receive the Earnout Payments, if any, pursuant to this Agreement:
(1) is an integral part of the total consideration for the Shares and not an investment; (2) does not represent an ownership interest
in Purchaser’s or any of its Affiliates (including the Company after Closing); (3) does not carry voting, dividend or liquidation
rights; and (4) is not represented by any form of certificate or instrument.

 

    9 

     

    

 

(c)       Payment
of Merger Consideration.

 

(i)
       Purchaser shall serve as the exchange agent and paying agent to effect the payment and
exchange of the Merger Consideration. On the Closing Date, Purchaser shall deliver (i) to the Sellers, stock certificates representing
the Merger Consideration as set forth in Schedule 2.3(a)(i) and Schedule 2.3(a)(ii) (such schedules may be updated
by the parties on the trading day immediately prior to the Closing). As soon as practicable after the Effective Time, Purchaser
shall send a notice and a transmittal form to each Seller advising such Seller of the effectiveness of the Merger and the procedure
for surrendering to the Purchaser such Certificate in exchange for the payment of the Merger Consideration payable pursuant to
this Section 2.3. Each Seller, upon proper surrender thereof to Purchaser in accordance with the instructions in such notice,
shall be entitled to receive as payment therefor (subject to any taxes required to be withheld) the Merger Consideration payable
pursuant to this Section 2.3 plus cash in lieu of any fractional shares, as provided in Section 1.8 below. Until
properly surrendered, each such Certificate shall be deemed for all purposes to evidence only the right to receive the Merger
Consideration payable pursuant to Section 2.3.

 

(ii)       In
the event any Certificate shall have been lost, stolen or destroyed, upon the making of an affidavit of that fact by the person
claiming such Certificate to be lost, stolen or destroyed, Purchaser shall pay in respect of such lost, stolen or destroyed Certificate
the Merger Consideration payable in respect thereof pursuant to Section 2.3.

 

(iii)       No
dividends or other distributions that are payable to the holders of record of Purchaser Common Stock as of a date on or after
the Closing Date shall be paid to former holders of capital stock of the Company entitled by reason of the Merger to receive Merger
Consideration until such holders surrender their Certificates for certificates representing the Merger Consideration. Upon such
surrender, Purchaser shall pay or deliver to the persons in whose name the certificates representing such Merger Consideration
are issued any dividends or other distributions that are payable to the holders of record of Purchaser Common Stock as of a date
on or after the Closing Date and which were paid or delivered between the Effective Time and the time of such surrender; provided
that no such person shall be entitled to receive any interest on such dividends or other distributions.

 

2.4       Effective
Time of the Merger. Subject to the provisions of this Agreement, at the Closing, the parties hereto shall (a) cause a certificate
of merger in substantially the form of Exhibit B (the “Delaware Certificate of Merger”) to be executed and filed with
the Secretary of State of the State of Delaware, and (b) take all such other and further actions as may be required by the DGCL
or other applicable Law to make the Merger effective. The Merger shall become effective as of the date and time of the filing
of the Delaware Certificate of Merger or at such later date or time as may be agreed by the Company and Parent in writing and
specified in the Delaware Certificate of Merger in accordance with relevant provisions of the DGCL (the date and time of such
effectiveness referred to herein as the “Effective Time”).

 

2.5       Withholding.
Purchaser (or any other Person responsible for withholding any amount with respect to any payment made under this Agreement) shall
be entitled to deduct and withhold from the consideration otherwise payable pursuant to this Agreement such amounts as are required
to be deducted and withheld with respect to the making of such payment under the Code, or any provision of state, local or foreign
Tax law. To the extent that amounts are so deducted and withheld, such withheld amounts shall be treated for all purposes of this
Agreement as having been paid to the Person in respect of which such deduction and withholding was made.

 

2.6       Options.
The Company shall provide holders of Options reasonable notice of their right to exercise the outstanding options to purchase
Shares (“Options”) and the effect of failing to exercise the Options under this Agreement. Each outstanding
Option granted under the Company’s 2014 Stock Incentive Plan or any other plan will, at the Effective Time, to the extent
not exercised prior to the Effective Time, be terminated and cancelled with no payment due thereon and shall be of no further
force and effect.

 

2.7       Effects
of the Merger. Subject to the foregoing, the effects of the Merger shall be as provided in the applicable provisions of the
DGCL. Without limiting the generality of the foregoing, and subject thereto, from and after the Effective Time all property, rights,
privileges, immunities, powers, franchises, licenses and authority of the Company shall vest in the Surviving Entity, and all
debts, liabilities, obligations, restrictions and duties of the Company shall become the debts, liabilities, obligations, restrictions
and duties of the Surviving Entity.

 

    10 

     

    

 

2.8       Directors
and Officers. The managers, directors and officers of Merger Sub, in each case, immediately prior to the Effective Time shall,
from and after the Effective Time, be the managers, directors and officers, respectively, of the Surviving Entity until their
successors have been duly elected or appointed and qualified or until their earlier death resignation or removal in accordance
with the operating agreement of the Surviving Entity.

 

2.9       Tax
Matters. Parent, Merger Sub, and the Company intend that, for United States federal income tax purposes, (a) the Merger shall
qualify as a “reorganization” within the meaning of Section 368(a) of the Code, and (b) this Agreement shall constitute
a plan of reorganization within the meaning of Treasury Regulations Section 1.368-2(g).

 

2.10       Fractional
Shares. No certificates or scrip representing fractional shares of Merger Consideration shall be issued to Sellers upon the
surrender for payment of Certificates, and such Sellers shall not be entitled to any voting rights, rights to receive any dividends
or distributions or other rights as a stockholder of Purchaser with respect to any fractional shares of Merger Consideration that
would have otherwise been issued to such former holders of capital stock of the Company. In lieu of any fractional shares of Merger
Consideration that would have otherwise been issued, each Seller that would have been entitled to receive a fractional share of
Merger Consideration shall, upon proper surrender of such person’s Certificates, receive a cash payment equal to the Purchaser
Share Value, multiplied by the fraction of a share that such Seller would otherwise be entitled to receive.

 

2.11       Dissenting
Shares.

 

(a)       Dissenting
Shares shall not be converted into or represent the right to receive any Merger Consideration, unless the Seller holding such
Dissenting Shares shall have forfeited his, her or its right to appraisal under the Delaware General Corporation Law or properly
withdrawn, his, her or its demand for appraisal. If such Seller has so forfeited or withdrawn his, her or its right to appraisal
of Dissenting Shares, then (i) as of the occurrence of such event, such Seller’s Dissenting Shares shall cease to be Dissenting
Shares and shall be converted into and represent the right to receive the Merger Consideration payable in respect of such Shares
pursuant to Section 2.3, and (ii) promptly (but in no case later than ten (10) Business Days) following the occurrence
of such event, Purchaser shall deliver to such Seller the Merger Consideration to which such holder is entitled pursuant to Section
2.3.

 

(b)       The
Company shall give Purchaser (i) prompt notice of any written demands for appraisal of any Shares, withdrawals of such demands
and any other instruments that relate to such demands received by the Company and (ii) Purchaser and the Company shall jointly
participate in all negotiations and proceedings with respect to such demands for appraisal under the Delaware General Corporation
Law. Neither Purchaser nor the Company shall, except with the prior written consent of the other, make any payment with respect
to any demands for appraisal of Shares or offer to settle or settle any such demands.

 

2.12       Additional
Action. The Surviving Entity may, at any time after the Effective Time, take any action, including executing and delivering
any document, in the name and on behalf of either the Company or the Transitory Subsidiary, in order to consummate the transactions
contemplated by this Agreement. From time to time after the Effective Time, upon request of the Buyer, each Specified Stockholder
shall execute, acknowledge and deliver all such other instruments and documents and shall take all such other actions required
to consummate and make effective the transactions contemplated by the Transaction Documents, provided that Buyer shall not be
required to pay any further consideration or amounts therefor.

 

2.13       Shareholder
Representative. By their execution of this Agreement or the transmittal form, approval of the Merger and adoption of this
Agreement and/or their acceptance of any consideration pursuant to this Agreement, the Other Holders hereby irrevocably appoint
the Shareholder Representative as the representative, attorney-in-fact and agent of the Other Holders in connection with the transactions
contemplated by this Agreement and in any litigation or arbitration involving this Agreement. In connection therewith, the Shareholder
Representative is authorized to do or refrain from doing all further acts and things, and to execute all such documents as the
Shareholder Representative shall deem necessary or appropriate, and shall have the power and authority to act for some or all
of the Other Holders with regard to all matters pertaining to this Agreement. All decisions and actions of the Shareholder Representative
on behalf of the Other Holders shall be deemed to be facts ascertainable outside of this Agreement and shall be binding upon all
Other Holders, and no Other Holders shall have the right to object, dissent, protest or otherwise contest the same.

 

    11 

     

    

 
 

ARTICLE
III

 

REPRESENTATIONS
AND WARRANTIES OF

THE
SELLERS AND THE COMPANY

 

The
Company and each Seller, excluding G&D, severally and not jointly, represents and warrants to Purchaser that, except as set
forth on the schedule of exceptions attached hereto as Exhibit A (the “Schedule of Exceptions”), which exceptions
or disclosure shall be deemed to be part of the representations and warranties made hereunder, the following representations in
this Article III are true, correct and complete as of the date hereof. The Schedule of Exceptions shall be arranged
in sections and subsections corresponding to the numbered and lettered sections and subsections of this Article III, and
the disclosures in any section or subsection of the Company Disclosure Schedule shall only qualify each section and subsection
of this Article III to which it corresponds and each other section and subsection of this Article III to the extent
it is reasonably apparent from a reading of the text of the disclosure without reference to any underlying document that such
disclosure is applicable to such other section or subsection.

 

3.1       Due
Incorporation. The Company is duly organized, validly existing and in good standing under the laws of Delaware, and possesses
all requisite power (corporate or otherwise) and authority and all governmental licenses, permits, authorizations and approvals,
necessary to enable it to own, lease and operate its properties and to carry on its business. The Company is duly licensed or
qualified to do business and is in good standing as a foreign corporation in each jurisdiction where the nature of the properties
owned, leased or operated by it or the business conducted by it requires such licensing or qualification, except where the failure
to be so qualified would not have a Material Adverse Effect. The Company does not own, control, or hold any equity or other similar
interest or any right (contingent or otherwise) in, directly or indirectly, any corporation, trust, joint venture, limited liability
company or other Person and, in furtherance of the foregoing, has no subsidiaries.

 

3.2       Authorization;
Investment Intent; Ownership of Shares.

 

(a)       The
Company has full power and authority to enter into this Agreement and to consummate the transactions contemplated hereby. The
execution and delivery of this Agreement and the performance by the Company its obligations hereunder have been duly authorized
by all necessary corporate action of the Company in accordance with applicable Law and the Company Charter Documents. This Agreement
constitutes the valid and legally binding obligations of the Company enforceable against the Company in accordance with its terms,
except as limited by bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium or similar Laws affecting the enforcement
of creditors’ rights or by general principles of equity, whether such enforceability is considered in a court of law, a
court of equity or otherwise.

 

(b)       Section
3.2(b) of the Schedule of Exceptions sets forth all of the Company’s shareholders, the number and class and series of shares
of capital stock owned by them and all outstanding securities of the Company convertible into or exercisable or exchangeable for
shares of capital stock of the Company along with the holders thereof. Each Seller is the sole record and beneficial owner of
the Shares set forth opposite such Seller’s name in Section 3.2(b) of the Schedule of Exceptions, all of which Shares are
owned free and clear of all rights, claims and Liens, and have not been sold, pledged, assigned or otherwise transferred except
pursuant to this Agreement. There are no outstanding subscriptions, rights, options, warrants or other agreements obligating the
Company to issue any shares of capital stock of the Company or securities convertible into or exercisable or exchangeable for
shares of capital stock of the Company or obligating any Seller to sell or transfer to any Person any or all of the Shares owned
by such Seller, or any interest therein.

 

    12 

     

    

 

(c)       The
authorized capital stock of the Company consists of 10,000,000 shares of common stock, $0.01 par value and 2,235,081 shares of
Preferred Stock, $0.01 par value, the number of shares of each class of stock issued and outstanding and the holders of and the
number of shares owned by each shareholder are set forth in Section 3.2(b) of the Schedule of Exceptions and all of which constitute
Shares hereunder. The Company has not granted, issued or agreed to grant, issue or make available any warrants, options, subscription
rights or any other calls, claims or commitments of any character relating to the unissued shares of capital stock of the Company.
All of the issued and outstanding capital stock of the Company has been duly authorized and validly issued, is fully paid and
non-assessable, and was issued in compliance with all applicable securities Laws, and are not subject to, and immediately after
the Closing will not be subject to any option, Lien, right of rescission, right of first refusal, right of first offer, voting
agreement, voting trust, proxy, shareholders agreement, or preemptive right. No shares of capital stock of the Company are subject
to vesting or repurchase rights.

 

3.3       Consents
and Approvals. Except as set forth on Section 3.3 of the Schedule of Exceptions, no consent, license, authorization or approval
of, filing or registration, declaration or filing with, or cooperation from, any Governmental Authority or any other Person not
a party to this Agreement is necessary in connection with the execution, delivery, performance, validity and enforceability by
the Company or Sellers of this Agreement or any Transaction Documents and the consummation by the parties of the transactions
contemplated hereby, other than such consents, licenses, authorizations, approvals, filings, registrations, declarations or cooperation
that, if not obtained, made or given, would not, individually or in the aggregate, impair in any material respect the ability
of the Company to perform its obligations hereunder or prevent or materially impede, interfere with, hinder or delay the consummation
of the transactions contemplated hereby. The execution, delivery and performance under this Agreement and the Transaction Documents,
the consummation of the transactions contemplated hereby and thereby and compliance with the terms of this Agreement and the Transaction
Documents by the Company or Sellers does not and will not (i) violate or conflict with, result in a material breach or termination
of, result in any loss or forfeiture of rights or benefits under, constitute a default under, or permit cancellation of, or require
any notice or consent under any Contract to which the Company is a party or any of its properties are bound or affected or any
Law applicable to the Company or by which any of its properties are bound of affected, (ii) result in the creation of, or require
the creation of any Lien upon any of the Shares or any property of the Company, or (iii) violate or conflict with any provision
of the Company Charter Documents. 

 

3.4       Financial
Statements.

 

(a)       The
Financial Statements were prepared in accordance with GAAP applied on a basis consistent with prior periods (except, to the extent
any such Financial Statements are unaudited, such unaudited Financial Statements do not contain footnotes and are subject to normal
and recurring year-end adjustments, none of which are, individually or in the aggregate, material in amount or nature) and fairly
present in all material respects the financial position, assets and Liabilities of the Company as of the dates thereof and the
revenues, expenses, results of operations and cash flows of the Company for the periods covered thereby. The Financial Statements
are in accordance with the books and records of the Company, and do not reflect any transactions which are not bona fide transactions.
Except as set forth in the Balance Sheet, the Company does not have any material Liabilities, debts, claims or obligations, whether
accrued, absolute, contingent or otherwise, whether due or to become due, other than trade payables to third parties and accrued
expenses incurred in the ordinary course of business consistent with past practice since the Balance Sheet Date. A true and complete
copy of the Financial Statements is attached as Exhibit A to the Schedule of Exceptions.

 

(b)       Financial
Books and Records. The financial books and records of the Company have been maintained in accordance with customary business
practices for a business at a similar stage as the Company and fairly and accurately reflect in all material respects on a basis
consistent with past periods and throughout the periods involved, (i) the consolidated financial position of the Company and (ii)
all transactions of the Company, including all transactions between the Company, on the one hand, and a Seller on the other hand.
The Company has not received any advice or notification from its current or past independent accountants that the Company has
used any improper accounting practice that would have the effect of not reflecting or incorrectly reflecting in the books and
records of the Company any properties, assets, Liabilities, revenues, expenses, equity accounts or other accounts.

 

    13 

     

    

 

(c)       No
Undisclosed Liabilities. Except as set forth in the Financial Statements, the Company does not have any Liabilities (whether
or not the subject of any other representation or warranty hereunder) except for Liabilities reflected on the Balance Sheet or
that have arisen in the ordinary course of business consistent with past practice since the Balance Sheet Date.

 

(d)       Projections.
Any financial projections provided by the Company or any Seller to Purchaser in connection with Purchaser’s review of the
Company were prepared in good faith based upon assumptions believed by the Company’s management and the Sellers to be reasonable
at the time made.

 

3.5       No
Changes. Since the Balance Sheet Date, the Company has conducted its business in the ordinary course and in a manner consistent
with past practice, and there has not been any Material Adverse Change or event or change (whether alone or with any other event
or change) that has had or is reasonably likely to have a Material Adverse Effect. Since the Balance Sheet Date, the Company has
not (a) suffered any damage or destruction to, or loss of, any of its assets or properties (whether or not covered by insurance)
individually or in the aggregate in excess of $25,000; (b) permitted the imposition of a Lien (other than Permitted Liens) on,
or disposed of, leased, transferred, mortgaged or assigned any of its assets; (c) terminated, modified or entered into any Material
Contract or canceled, compromised, knowingly waived or released any right or claim (or series of related rights and claims) under
any Material Contract; (d) cancelled, waived, released or otherwise compromised any trade debt, receivable, right or claim exceeding
$25,000 individually or in the aggregate; (e) made or committed (in a binding manner) to make any capital expenditures or capital
additions or betterments in excess of $25,000 individually or in the aggregate; (f) entered into, adopted, amended (except as
may be required by Law and except for immaterial amendments) or terminated any bonus, profit sharing, compensation, termination,
stock option, stock appreciation right, restricted stock, performance unit, pension, retirement, deferred compensation, employment,
severance or other employee benefit agreements, trusts, plans, funds or other arrangements for the benefit or welfare of any director,
officer or employee, or increased in any manner the compensation or fringe benefits of any director, officer or employee or paid
any benefit not required by any existing plan and arrangement (except for normal salary increases consistent with past practice)
or entered into any contract, agreement, commitment or arrangement to do any of the foregoing; (g) disposed of or permitted the
lapse in registration of any Intellectual Property; (h) experienced any Material Adverse Change in its Receivables or its accounts
payable; (i) changed its accounting methods, systems, policies, principles or practices; (j) incurred, assumed, guaranteed or
discharged any Debt outside the ordinary course of business consistent with past practice; (k) modified the Company Charter Documents;
(l) issued, sold or otherwise permitted to become outstanding any capital stock, or split, combined, reclassified, repurchased
or redeemed any shares of its capital stock; (m) made any capital investment in, any loan to, or any acquisition of the securities
or assets of any other Person other than acquisitions of inventory and supplies in the ordinary course of business consistent
with past practice; (n) failed to maintain in full force and effect insurance policies on its properties providing coverage and
amounts of coverage comparable to the coverage and amounts of coverage provided under its policies of insurance in effect on the
Balance Sheet Date; (o) encountered any labor union organizing activity or had any actual or overtly threatened employee strikes,
work stoppages, slowdowns or lockouts; (p) materially modified or changed its business organization or materially and adversely
modified or changed its relationship with its suppliers, customers and others having business relations with it; (q) entered into
any Contract outside the ordinary course of business that is or would be a Material Contract; (r) adopted a plan or agreement
of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization, or other material reorganization;
or (s) authorized, agreed, resolved or committed to any of the foregoing.

 

3.6       Title
to Assets. The Company has good and marketable title to all of its properties, interests in properties and assets, real and
personal, reflected in the Balance Sheet or acquired after the Balance Sheet Date that are material to the conduct of the Business
as currently conducted (except properties, interests in properties and assets sold or otherwise disposed of since the Balance
Sheet Date in the ordinary course of business consistent with past practice), or with respect to leased properties and assets,
valid leasehold interests in such leased properties and assets that are material to the conduct of the Business as currently conducted,
in each case free and clear of all Liens other than Permitted Liens. No Person other than the Company owns any material assets,
properties or rights relating to or used or held for use in the Business, other than Leased Real Property. The assets and rights
of the Company include all of the assets and rights necessary for the conduct of the Business.

 

    14 

     

    

 

3.7       Real
Property.

 

(a)       The
Company operates the Business at the Leased Real Property, and at no other locations, other than client sites. Except for the
Leased Real Property, the Company is not a party to any lease of any real property, whether as lessor or as lessee, and has no
ownership of or other interest in any real property. Section 3.7(a) of the Schedule of Exceptions lists the addresses and the
leases relating to each Leased Real Property.

 

(b)       The
Leased Real Property leases are in full force and effect and the Company holds a valid and existing leasehold interest under such
leases free and clear of all Liens, other than Permitted Liens. The Company is not in material default, and no circumstances exist
which would result in such default (including upon the giving of notice or the passage of time, or both), under such lease, and
no other party to such lease has the right to terminate or accelerate performance under or otherwise modify any of such lease,
including upon consummation of Purchaser’s acquisition of the Shares pursuant to this Agreement. To the knowledge of the
Sellers, no Person other than the Company has any right to use, occupy or lease any of the Leased Real Property.

 

(c)       There
is no pending or, to the knowledge of the Sellers, threatened condemnation, expropriation, eminent domain or similar proceeding
affecting all or any part of the Leased Real Property, and the Company has not received any written notice thereof.

 

(d)       The
buildings and other structures on the Leased Real Property are in good repair, ordinary wear and tear excepted, and fit for the
purposes for which they are presently used in all material respects. The Company has rights of egress and ingress with respect
to each of the Leased Real Property that is sufficient for it to conduct its business.

 

3.8       Personal
Property. All of the tangible assets (whether owned or leased) used in connection with the Business, (a) are suitable for
the purposes for which such assets are presently used and are suitable for the continuing conduct of the Business after the Closing,
and (b) have been maintained and are in good operating condition and repair (normal wear and tear excepted).

 

3.9       No
Third Party Options. There are no agreements, options, commitments or rights with, of or to any Person (other than Purchaser)
to acquire any of the assets, properties, rights, shares or other equity interests of the Company, and the Company is not a party
to any agreement to merge into (or have another entity merge into it) or consolidate with another entity.

 

3.10       Intellectual
Property.

 

(a)       Section
3.10(a) of the Schedule of Exceptions sets forth a complete and accurate list of all Intellectual Property owned by the Company
as of the date hereof that is registered, recorded or filed in the name of the Company with a Governmental Authority and all applications
therefor (“Company Registered IP”). Each item of Company Registered IP is (i) in compliance with all applicable
legal requirements and is current with its filing, registration and maintenance requirements, and (ii) to the knowledge of the
Sellers, valid and enforceable. Section 3.10(a) of the Schedule of Exceptions also sets forth a complete and accurate list of
all material unregistered trademarks or service marks owned by the Company (“Unregistered Marks”) and used
by the Company in the operation of the Business. Each of the Unregistered Marks is, to the knowledge of the Seller, enforceable.

 

    15 

     

    

 

(b)       The
Company either exclusively owns, free and clear of all Liens (other than Permitted Liens), or has permission to use pursuant to
a valid written agreement or, to the knowledge of the Sellers, has other valid rights to use, all Intellectual Property used or
held for use in the operation of the Business as presently conducted (collectively, “Company IP Rights”). The
Company IP Rights comprise all of the Intellectual Property that is used in or necessary for the operation of the Business as
currently conducted. No Person has asserted any claims against the Company or, to the knowledge of the Sellers, threatened to
assert any claims against the Company (i) contesting the right of the Company to use, transfer or license any Company IP Rights
owned by a Person other than the Company or any products, processes, services or materials covered thereby in any manner, or (ii)
challenging the ownership, validity or enforceability of any such Company IP Rights. In addition, to the knowledge of the Sellers,
no Person has asserted any claims against the Company or any other Person, to the knowledge of the Sellers, threatened to assert
any claims against the Company or any other Person (x) contesting the right of the Company or any other Person to use, transfer
or license any Company IP Rights owned by the Company or any products, processes, services or materials covered thereby in any
manner, or (y) challenging the ownership, validity or enforceability of any such Company IP Rights.

 

(c)       To
the knowledge of the Sellers, the operation of the Business has not and does not infringe or misappropriate any Intellectual Property
of any Person, and has not and does not violate the rights of any Person (including the right to privacy or publicity) or constitute
unfair competition or trade practices under any Laws. To the knowledge of the Sellers, no Person has infringed or misappropriated
or is infringing or misappropriating any Company IP Rights.

 

(d)       Following
the Closing, the Surviving Entity will be permitted to exercise all of the rights under the Company IP Rights to the same extent
the Company would have been able to had the transactions contemplated by this Agreement not occurred. All Company IP Rights are,
and immediately after the Closing Date, will be, fully transferable, alienable or licensable by the Surviving Entity to the same
extent as they would be transferable, alienable or licensable by the Company immediately prior to the Closing Date, without any
restrictions (other than those restrictions set forth in any of the Contracts listed in Section 3.11(b)(xiv) of the Schedule of
Exceptions or otherwise identified in Section 3.10(d) of the Schedule of Exceptions), and without payment of any kind to any Person
(other than payments which would have been due from Company, notwithstanding the closing of the transactions contemplated in this
Agreement, and which are obligations under one or more of the Contracts listed in Section 3.11(b)(xiv) of the Schedule of Exceptions),
except as a result of any independent agreements or obligations of Purchaser. The Company has not granted any exclusive licenses
or rights of any kind in the Company IP Rights to any Person, and the Company does not hold any rights to Company IP Rights jointly
with any third Person.

 

(e)       The
Company has not entered into any Contract to settle or resolve any action, claim or dispute with respect to any Intellectual Property.
No Company IP Right is subject to any proceeding or outstanding decree, Order, judgment, Contract or stipulation that restricts
in any manner the use, transfer or licensing thereof by the Company and subsequently by the Surviving Entity.

 

(f)       The
Company has taken all actions reasonably necessary to maintain and protect all Company IP Rights, including all confidential and
proprietary information and trade secrets pertaining thereto. All agents, employees and independent consultants of the Company
employed or engaged in the five (5) years prior to the date hereof who have participated in or contributed to the development
of any Intellectual Property for the Company have executed and delivered to the Company a written assignment agreement that vests
in the Company exclusive ownership of all right, title and interest in and to any such Intellectual Property.

 

(g)       The
information technology systems used by the Company in connection with the operation of the Business (“IT Systems”)
as a whole, are adequate and sufficient in all material respects for the conduct of the Business as currently conducted. The Company
has taken commercially reasonable steps consistent with industry practice to protect the IT Systems from unauthorized access,
use and damage. The IT Systems have not suffered any material failures or defects and have functioned consistently and accurately
in all material respects.

 

(h)       No
software owned by the Company incorporates any Public Software. For purposes of this Agreement, “Public Software”
means any software that contains, or is derived in any manner from, in whole or in part, any software, that is distributed as
freeware, shareware, open source software (e.g., Linux) or similar licensing or distribution models that (i) requires the licensing
or distribution of source code of other software that is combined or used with such software to licensees, (ii) prohibits or limits
the receipt of consideration in connection with sublicensing or distributing any other software that is combined with such software,
(iii) except as specifically required to be permitted by applicable Law, allows any Person to decompile, disassemble or otherwise
reverse-engineer any other software that is combined with such software, or (iv) requires the licensing of any other software
that is combined with such software to any other Person for the purpose of making derivative works. No software owned by the Company
has been provided or disclosed in source code form to any Person (including without limitation, any escrow agents), other than
employees, agents and independent contractors of the Company who have executed nondisclosure agreements and intellectual property
assignment agreements for their use on behalf of the Company. To the extent the Company has provided or disclosed any such source
code, such provision or disclosure has been pursuant to a written confidentiality agreement adequate to protect the proprietary
and confidential nature of such source code.

 

    16 

     

    

 

3.11       Contracts.

 

(a)       All
of the Material Contracts are in writing and are in full force and effect and constitute the legal, valid and binding obligations
of the Company and, to the knowledge of the Sellers, the other parties thereto. All of the Material Contracts are enforceable
in accordance with their respective terms, except as such enforceability may be limited by applicable bankruptcy, insolvency,
moratorium, reorganization or similar laws affecting the rights of creditors generally and by equitable limitations on the availability
of specific remedies. No termination notice has been delivered by the Company to any other party or, to the knowledge of Sellers,
by any other party to the Company, with respect to any Material Contract. As to each Material Contract, there does not exist thereunder
any breach, violation or default on the part of the Company or, to the knowledge of the Sellers, any other party to such Material
Contract, and there does not exist any event, occurrence or condition, including the consummation of the transactions contemplated
hereby, which (with or without notice, passage of time, or both) would constitute a breach, violation or default thereunder on
the part of the Company. No waiver has been granted by the Company or, to the knowledge of the Sellers, any of the other parties
thereto under any of the Material Contracts. The Company has delivered or made available to Purchaser true and complete copies
of each Material Contract that Purchaser has requested.

 

(b)       Section
3.11(b) of the Schedule of Exceptions sets forth a true and complete list of all Contracts of the following types to which a Company
is a party, by which it is bound, or which otherwise pertain to the Business of the Company (including in each case which subsection(s)
of this Section 3.11 to which such Material Contract is responsive) (each such Contract, whether or not so listed, is referred
to as a “Material Contract”):

 

(i)       any
Contract or arrangement of any kind with any employee, officer, director, shareholder or other equity interest holder or other
Persons with whom the Company is not dealing at arm’s-length;

 

(ii)       
any Contract or arrangement with a broker, advertising agency, placement agent or other Person engaged in sales, marketing, distributing
or promotional activities, or any Contract to act as one of the foregoing on behalf of any Person;

 

(iii)       
any Contract or arrangement of any nature (A) having an aggregate value in excess of $100,000, (B) of any value that is not terminable
by the Company at any time on notice of thirty (30) days or less or (C) is otherwise material to the Company;

 

(iv)       
any indenture, credit agreement, loan agreement, note, mortgage, security agreement, letter of credit, loan commitment, guaranty,
repurchase agreement or other Contract or arrangement relating to the borrowing of funds, an extension of credit or financing,
pledging of assets or guarantying the obligations of any Person;

 

(v)       any
Contract or arrangement involving the Company as a participant in or an owner of a partnership, limited liability company, corporation,
joint venture, strategic alliance, or other cooperative undertaking;

 

(vi)       any
Contract or arrangement involving any restrictions on the Company or any Affiliate of the Company with respect to the geographical
area of operations where such Person may conduct business, or scope or type of business that such Person may conduct or the solicitation
of any individual or class of individuals for employment;

 

    17 

     

    

 

(vii)       any
Contract granting to any Person a right at such Person’s option to purchase or acquire any asset or property of the Company
(or interest therein);

 

(viii)       any
Contract for capital improvements or expenditures in excess of $20,000 individually or $40,000 in the aggregate;

 

(ix)       any
Contract for which the full performance thereof may extend beyond ninety (90) days from the date of this Agreement;

 

(x)        any
Contract not made in the ordinary course of business which is to be performed in whole or in part at or after the date of this
Agreement;

 

(xi)       any
Contract or arrangement relating to management support, facilities support or similar arrangement which, if breached, could have
a Material Adverse Effect on the Business;

 

(xii)       any
Contract whereby any Person agrees (A) not to compete with the Company or to solicit employees, clients or customers of the Company,
or (B) to maintain the confidentiality of any information of the Company;

 

(xiii)       any
Contract of the Company for the provision of consulting services of any type or nature and any arrangement for the payment of
commissions, in each case, whether by or for the Company;

 

(xiv)       any
Contract (A) under which the Company is granted a right or license to use the Intellectual Property of any Person (other than
for generally commercially available software) and (B) pursuant to which the Company has granted any right or license to any Person
in respect of Company IP Rights;

 

(xv)       any
Contract evidencing or relating to any obligations of the Company with respect to the issuance, sale, repurchase or redemption
of any securities of the Company;

 

(xvi)       all
Leased Real Property leases;

 

(xvii)       any
Contract that obligates the Company with respect to contingent payments of any type;

 

(xviii)       any
Contract relating to any litigation or claim involving the Company at any time during the last five (5) years or under with there
are ongoing responsibilities;

 

(xix)       any
Contract relating to the acquisition or disposition of any capital stock, all or substantially all the assets or business or product
line of any other Person; and

 

(xx)       any
Government Bid or Government Contract.

 

    18 

     

    

 

3.12       Permits.
Section 3.12 of the Schedule of Exceptions contains a true and complete list as of the date hereof of all Permits used or held
for use by the Company in the Business. Except for such Permits, there are no Permits that are necessary for the lawful operation
of the Business. The Company is in compliance in all material respects with all requirements and limitations under such Permits.
No employee, officer, director, shareholder, consultant, advisor or manager of the Company owns or has any interest in any such
Permit.

 

3.13       Insurance.
Section 3.13 of the Schedule of Exceptions contains a true and complete list as of the date hereof of all policies of fire, liability,
errors and omissions, workmen’s compensation, public and product liability, title and other forms of insurance owned or
held by the Company, which insurance, to the knowledge of the Sellers, is comprised of the types and in the amounts customarily
carried by businesses of similar size in the same industry, and a claims history for the past three years. All such policies are
in full force and effect and all applicable premiums, which are due and owing as of the Closing Date, have been paid. No notice
of cancellation or termination or increase in premiums (except for general increases in rates to which similarly situated companies
are subject) has been received with respect to any such policy. No insurer has cancelled or refused to renew any insurance applicable
to the Company nor has any insurer applied any additional material restrictions to any existing insurance policy during the term
of the policy or upon renewal. The Company has timely filed all claims for which it is seeking payment or other coverage under
any of its insurance policies. The Company has not made any claim against an insurance policy as to which the insurer is denying
coverage or defending the claim under a reservation of rights. The Company is not in default in any material respect under any
insurance policy maintained by any of them.

 

3.14        Employee
Benefit Plans and Employment Agreements.

 

(a)       Section
3.14(a) of the Schedule of Exceptions contains a list as of the date of this Agreement of each “employee benefit plan,”
as defined in Section 3(3) of ERISA and all other material employment Contracts, and employee benefit plans, programs, policies
and arrangements (including all collective bargaining, stock purchase, stock option, compensation, deferred compensation, pension,
retirement, severance, termination, separation, vacation, sickness, health insurance, welfare and bonus plans or Contracts) entered
into, maintained or contributed to by the Company for the benefit of continuing employees or other service-providers (or former
employees or service-providers) of the Company or with respect to which the Company has any obligation or Liability (collectively,
the “Company Plans”).

 

(b)       The
Company has provided or made available to Purchaser true and materially correct copies of each of the Company Plans (including
all amendments thereto) and all Contracts relating thereto, or to the funding thereof, including all trust Contracts, insurance
Contracts, administration Contracts, investment management Contracts, subscription and participation Contracts, and recordkeeping
Contracts, each as in effect on the date hereof, to the extent such Company Plans are in written form (and, as to any Company
Plan that is not in writing, a description of the material terms of such plan). To the extent applicable, a true and correct copy
of the most recent annual report, actuarial report, summary plan description, and Internal Revenue Service determination, opinion,
notification or advisory letter (“Determination Letter”) with respect to each of the Company Plans has been
supplied or made available to Purchaser by the Company.

 

(c)       Reserved.

 

(d)       There
are no actions, suits or claims pending or, to the knowledge of Sellers, threatened involving any Company Plan (other than routine
claims for benefits) or the assets thereof (other than with respect to publicly traded securities or insurance company products
and as to which neither the Company Plan or the Company is a named party), and no audits, inquiries or proceedings pending or,
to the Seller’s knowledge, threatened by the IRS or other Governmental Authority with respect to any Company Plan. Each
Company Plan has been maintained and administered in all material respects in material compliance with its terms and with the
requirements prescribed by any and all statutes, orders, rules and regulations (foreign and domestic), including (without limitation)
ERISA and the Code, which are applicable to such Company Plan. All contributions, reserves or premium payments required to be
made or accrued as of the date hereof to the Company Plans have in all material respects been timely made or accrued. No “Prohibited
Transaction,” within the meaning of Section 4975 of the Code or Sections 406 or 407 of ERISA and not otherwise exempt under
Section 408 of ERISA, has occurred with respect to any Company Plan. No Company Plan provides, or reflects or represents any Liability
to provide, health or welfare benefits with respect to any former or current employee, or any spouse or dependent of any such
employee, beyond the employee’s retirement or other termination of employment with the Company (other than coverage mandated
by Part 6 of Title I of ERISA or Section 4980B of the Code or analogous provision of applicable U.S. state or foreign Law).

 

    19 

     

    

 

(e)       There
is no Contract or plan covering any employee or former employee of the Company that, individually or collectively, could give
rise to the payment as a result of the transactions contemplated by this Agreement of any amount that would not be deductible
by the Company by reason of Section 280G of the Code. The execution of this Agreement and the consummation of the transactions
contemplated by this Agreement (alone or together with any other event which, standing alone, would not by itself trigger such
entitlement or acceleration) will not (1) entitle any Person to any payment, forgiveness of indebtedness, vesting, distribution,
or increase in benefits under or with respect to any Company Plan, (2) otherwise trigger any acceleration (of vesting or payment
of benefits or otherwise) under or with respect to any Company Plan, or (3) trigger any obligation to fund any Company Plan.

 

(f)       With
respect to each Company Plan that is a “nonqualified deferred compensation plan” (as defined for purposes of Section
409A(d)(1) of the Code) that is subject to, and not exempt from, Section 409A of the Code, (1) such plan has been operated since
January 1, 2005 in compliance with Section 409A of the Code and all applicable IRS guidance promulgated thereunder; (2) the document
or documents that evidence each such plan have conformed to the provisions of Section 409A of the Code and the final regulations
under Section 409A of the Code since December 31, 2008; and (3) as to any such plan in existence prior to January 1, 2005 and
not subject to Section 409A of the Code, has not been “materially modified” (within the meaning of IRS Notice 2005-1)
at any time after October 3, 2004. No stock option covering securities of the Company is subject to any tax, penalty or interest
under Section 409A of the Code.

 

(g)       No
Company Plan is maintained outside the jurisdiction of the United States, or covers any employee residing or working outside the
United States (any such Company Plan, a “Foreign Benefit Plan”). With respect to any Foreign Benefit Plans,
(A) all Foreign Benefit Plans have been established, maintained and administered in compliance in all material respects with their
terms and all applicable statutes, laws, ordinances, rules, orders, decrees, judgments, writs, and regulations of any controlling
Governmental Authority, (B) all Foreign Benefit Plans that are required to be funded are fully funded, and with respect to all
other Foreign Benefit Plans, adequate reserves therefor have been established on the Financial Statements, and (C) no material
Liability or obligation of the Company exists with respect to such Foreign Benefit Plans.

 

3.15       Employees.
Section 3.15 of the Schedule of Exceptions contains a true and complete list of the names, titles, annual base compensation and
target bonuses for the current year for each director, officer, manager and employee of the Company. There is not currently, and
during the past two years there has been no, labor strike, picketing, dispute, slow-down, work stoppage, union organization effort,
grievance filing or proceeding, or other labor difficulty actually pending or, to the knowledge of Sellers, threatened against
or involving the Company. The Company is not a party to any collective bargaining agreement; there are no labor unions or other
organizations representing any employee of the Company; and to the knowledge of Sellers, no labor union or organization is engaged
in any organizing activity with respect to any employee of the Company. In the three years prior to the Closing Date, the Company
has not effectuated a “plant closing” as defined in the Worker Adjustment and Retraining Notification Act (the “WARN
Act”) (or any similar state, local or foreign law) or a “mass layoff” as defined in the WARN Act (or any
similar state, local or foreign law) affecting any site of employment or facility of the Company. Neither the Company nor any
Seller has received written notice that any of the Company’s current key employees (including, without limitation, the Sellers)
intends to terminate his employment with the Company. The Company has complied, and is presently in compliance in all material
respects with all Laws relating to employment.

 

3.16        Taxes.

 

(a)       Except
for current Taxes not due and payable through Closing, each of the Company has paid to, and where necessary collected or withheld
and remitted to, the proper Governmental Authority, all Taxes that are due and payable.

 

(b)       The
Company has filed all Tax Returns which are required to be filed and all such Tax Returns are complete and accurate in all material
respects. All unpaid Taxes of the Company for periods through the date of the Financial Statements are reflected on the balance
sheets of the Company. The Company does not have any Liability for Taxes accruing after the Financial Statements other than Taxes
accrued in the ordinary course of business and which are not yet due and payable.

 

    20 

     

    

 

(c)       There
is no, and there has never been any, action, suit, investigation, audit, claim, collection or assessment pending or, to the knowledge
of the Sellers, proposed or threatened, with respect to any Tax Return or Taxes of the Company. No claim has ever been made by
a Taxing authority in a jurisdiction where the Company is not paying Taxes or filing Tax Returns asserting that the Company is
or may be subject to Taxes assessed by such jurisdiction. There are no Liens for Taxes upon the any of the assets of the Company
except Liens relating to current Taxes not yet due.

 

(d)       The
Company is not (and has never been) a party to any Tax sharing agreement, Tax indemnity agreement or Tax allocation agreement,
or has assumed the Tax Liability of any other Person under contract with the exception of customary commercial leases or Contracts
that are not primarily related to Taxes entered into in the ordinary course of business.

 

(e)       The
Company has not been the “distributing corporation” or the “controlled corporation” (in each case, within
the meaning of Section 355(a)(1) of the Code) with respect to a transaction described in Section 355 of the Code (i) within the
three (3)-year period ending as of the date of this Agreement, or (ii) in a distribution that could otherwise constitute part
of a “plan” or “series of related transactions” (within the meaning of Section 355(e) of the Code) that
includes the transactions contemplated by this Agreement.

 

(f)       The
Company has never been a member of an affiliated group filing consolidated Tax Returns. With the exception of customary commercial
leases or Contracts that are not primarily related to Taxes entered into in the ordinary course of business and Liabilities thereunder,
the Company does not have any actual or potential Liability under Treasury Regulations Section 1.1502-6 (or any comparable or
similar provision of federal, state, local or foreign law), as a transferee or successor, pursuant to any contractual obligation,
or otherwise for any Taxes of any Person.

 

(g)       There
are no adjustments under Section 481 of the Code (or any similar adjustments under any provision of the Code or the corresponding
foreign, state or local Tax laws) that are required to be taken into account by the Company in any period ending after the Closing
Date by reason of a change in method of accounting in any taxable period ending on or before the Closing Date.

 

(h)       There
are no outstanding waivers or agreements extending the statute of limitations for any period with respect to any Tax to which
the Company may be subject.

 

(i)       The
Company has not engaged in a “reportable transaction,” as set forth in Treasury Regulation Section 1.6011-4(b), or
any transaction that is the same as or substantially similar to one of the types of transactions that the Internal Revenue Service
has determined to be a tax avoidance transaction and identified by notice, regulation, or other form of published guidance as
a “listed transaction,” as set forth in Treasury Regulation Section 1.6011-4(b)(2).

 

(j)       The
Company is in compliance with all terms and conditions of all Tax exemptions, or order of a foreign government with respect to
taxes and the transactions contemplated by this Agreement shall not have any adverse effect on the continued validity and effectiveness
of any such Tax exemptions or orders.

  

(k)       
No Seller holds equity in the Company that is non-transferable and subject to a substantial risk of forfeiture within the meaning
of Section 83 of the Code with respect to which a valid election under Section 83(b) of the Code has not been made.

 

(l)       Notwithstanding
anything to the contrary in this Agreement, it is agreed and understood that (i) no representation or warranty is made by the
Sellers or the Company in this Agreement in respect of Tax matters, other than the representations and warranties set forth in
this Section 3.16, (ii) the representations and warranties of the Company in this Section 3.16 refer only to activities
prior to the Closing and shall not serve as representations and warranties regarding, or a guarantee of, nor can they be relied
upon with respect to, Taxes attributable to any Tax period (or portion thereof) beginning, or Tax positions taken, after the Closing
Date, and (iii) no representations or guarantees are made with respect to the amount or availability of Tax attributes of the
Company or any Subsidiary for any Tax period ending after the Closing Date.

 

    21 

     

    

 

3.17       No
Defaults or Violations.

 

(a)       The
Company is not in material breach of or default under any Material Contract, no event has occurred or circumstance exists which,
with notice or lapse of time or both, would constitute a material breach of or default under any Material Contract, and, to the
knowledge of the Sellers, no other party to any Material Contract is in material breach of or default under any such Material
Contract.

 

(b)       The
Company is not, and during the past two (2) years the Company has not been, in violation of, in any material respect, and, to
the knowledge of the Sellers, no event has occurred or circumstance exists that (with or without notice or lapse of time) would
constitute or result in a violation in any material respect by the Company of, or failure on the part of the Company to comply
with in any material respect, any Law that is or was applicable to it or the conduct or operation of its business or the ownership
or use of any of its assets.

 

(c)       No
written notice from any Governmental Authority has been received by or on behalf of the Company within the past three (3) years
claiming any violation of any Law or requiring any work, construction (other than pursuant to sales contracts with Governmental
Authorities), or expenditure, or asserting any Tax, assessment or penalty, with respect to the Company.

 

3.18        Reserved.

 

3.19       Litigation.
There are no actions, litigation, claims, suits, mediations, arbitrations, inquiries, government or other investigations or proceedings
of any nature pending or, to the Sellers’ knowledge, threatened, involving the Company, its properties or the Business or,
with respect to the operation of the Business, any of its officers, directors, employees, consultants, advisors or shareholders,
before any Governmental Authority, or that have been settled, dismissed or resolved since January 1, 2015. The Company is not
subject to any Order arising from any litigation.

 

3.20       Related
Parties.

 

(a)       No
Seller has any direct or indirect interest in any other Person which conducts a business similar to the Business, or in any customer
or supplier of the Company.

 

(b)       To
the knowledge of the Sellers, no officer, director, employee, consultant, shareholder of the Company or any Affiliate of any of
the foregoing (a) has any interest in any property (real, personal, or mixed and whether tangible or intangible), used in or pertaining
to the Business, (b) except for the ownership of less than 2% of the outstanding common stock of a publicly-held corporation,
owns of record or as a beneficial owner, an equity interest or any other financial or a profit interest in a Person that has had
business dealings or a material financial interest in any transaction with the Company or (c) is a party to any Contract (except
for employment and similar agreements), including with respect to compensation or remuneration to be paid to such officer, director,
shareholder or Affiliate in connection with this Agreement or the transactions contemplated hereby.

 

3.21       
Receivables. All Receivables represent bona fide, current and valid obligations arising from sales actually made or services
actually performed in the ordinary course of business. The Company has not received written notice from any obligor of any Receivable
that such obligor is refusing to pay or contesting payment of amounts in excess of $10,000 in any individual case, or $25,000
in the aggregate, which has not been resolved prior to the date hereof, other than returns in the ordinary course of business
under and in accordance with any Contract with any obligor of any Receivable.

 

3.22       
Brokers. Except as disclosed on Section 3.22 to the Schedule of Exceptions, none of the Company or any of
the Company’s directors, officers, employees, consultants, advisors or agents, nor any Seller, has employed or incurred
any Liability to any broker, finder or agent with respect to this Agreement, the Transaction Documents and the transactions contemplated
hereby.

 

3.23       
Disclaimer of Additional Representations and Warranties. EXCEPT FOR THE REPRESENTATIONS AND WARRANTIES OF THE COMPANY EXPRESSLY
SET FORTH IN THIS AGREEMENT, NEITHER THE COMPANY NOR ANY OTHER PERSON MAKES ANY EXPRESS OR IMPLIED REPRESENTATION OR WARRANTY
ON BEHALF OF THE COMPANY IN CONNECTION WITH THE TRANSACTIONS CONTEMPLATED HEREBY.

 

    22 

     

    

 

ARTICLE
IV

 

REPRESENTATIONS
AND WARRANTIES OF THE SELLERS

 

Each
Seller, severally and not jointly, represents and warrants to Purchaser that the following representations in this Article IV
are true, correct and complete as of the date hereof:

 

4.1       Authorization;
Investment Intent; Ownership of Shares.

 

(a)       Such
Seller has full power, authority and capacity to enter into this Agreement and the Transaction Documents to which such Seller
is a party, and to consummate the transactions contemplated hereby and thereby. This Agreement and each Transaction Document to
which such Seller is a party constitutes, or upon execution and delivery will constitute, a valid and legally binding obligation
of such Seller, enforceable against such Seller in accordance with their respective terms, except as limited by bankruptcy, insolvency,
fraudulent conveyance, reorganization, moratorium or similar Laws affecting the enforcement of creditors’ rights or by general
principles of equity, whether such enforceability is considered in a court of law, a court of equity or otherwise. The Shares
held by such Seller do not constitute community property under applicable Laws.

 

(b)       Such
Seller is the sole record and beneficial owner of the Shares set forth opposite such Seller’s name in Section 3.2(b) of
the Schedule of Exceptions, all of which Shares are owned free and clear of all Liens, and neither such Shares nor any interest
therein have been sold, pledged, assigned or otherwise transferred except pursuant to this Agreement. There are no outstanding
subscriptions, rights, options, warrants or other agreements obligating such Seller to sell or transfer to any third person any
or all of the Shares owned by such Seller, or any interest therein. Following the Closing, Purchaser shall own one-hundred percent
(100%) of the issued and outstanding shares of capital stock of the Company. This Agreement, together with any stock powers or
assignments delivered at the Closing by the Sellers to Purchaser, are sufficient to transfer to Purchaser the entire right, title
and interest, legal and beneficial, in the Shares, free and clear of all Liens.

 

4.2       Consents
and Approvals. Except as set forth on Schedule 4.2, no consent, license, authorization or approval of, filing or registration,
declaration or filing with, or cooperation from, any Governmental Authority or any other Person not a party to this Agreement
is necessary in connection with the execution, delivery or performance by such Seller of this Agreement or any Transaction Document
to which such Seller is a party or the validity and enforceability of this Agreement or any Transaction Document to which such
Seller is a party with respect to such Seller, or the consummation of the transactions contemplated by this Agreement or any such
Transaction Document by such Seller. The execution, delivery and performance of this Agreement and the Transaction Documents,
the consummation of the transactions contemplated hereby or thereby and compliance with the terms of this Agreement and the Transaction
Documents by such Seller does not and will not (i) violate or conflict with, result in a material breach or termination of, result
in any loss or forfeiture of rights or benefits under, constitute a default under, or permit cancellation of, or require any notice
or consent under any Contract to which the Company is a party or any of its properties are bound or affected or any Law applicable
to the Company or by which any of its properties are bound of affected, or (ii) result in the creation of, or require the creation
of any Lien upon any of the Shares.

 

    23 

     

    

 

4.3       Securities
Laws. The Shareholder Representative and the Other Holders (and any other Seller electing to receive shares pursuant to Section
2.3(c) (Other Holders and such Sellers, if any, collectively, the “Equity Recipients”) are each an “accredited
investor” within the meaning of Rule 501 of Regulation D of the Act. Such Equity Recipient is acquiring shares of Purchaser
Common Stock pursuant to this Agreement not as a nominee or agent, and not with a view to the resale or distribution of any part
thereof, and such Equity Recipient has no present intention of selling, granting any participation or otherwise distributing the
same. Such Equity Recipient understands that the shares of Purchaser Common Stock to be issued to him pursuant hereto are “restricted
securities” under the U.S. federal securities laws inasmuch as they are being acquired from Purchaser in a transaction not
involving a public offering and that under such laws and applicable regulations, such securities may be resold without registration
only in certain limited circumstances. “Equity Recipient” as used in this Section 4.3 shall include any transferee
or assignee of shares of Purchaser Common Stock issued pursuant to this Agreement.

 

4.4       Disclaimer
of Additional Representations and Warranties. EXCEPT FOR THE REPRESENTATIONS AND WARRANTIES OF THE SELLER EXPRESSLY SET FORTH
IN THIS AGREEMENT, NETHER THE SELLER NOR ANY OTHER PERSON MAKES ANY EXPRESS OR IMPLIED REPRESENTATION OR WARRANTY ON BEHALF OF
THE SELLER IN CONNECTION WITH THE TRANSACTIONS CONTEMPLATED HEREBY. THIS SECTION 4.4 DOES NOT LIMIT THE SELLERS’
INDEMNIFICATION OBLIGATIONS IN ARTICLE XI HEREOF.

 

ARTICLE
V

 

REPRESENTATIONS
AND WARRANTIES OF PURCHASER

 

Purchaser
represents and warrants to the Company and each Seller that the following representations in this Article V are true,
correct and complete as of the date hereof:

 

5.1       Due
Incorporation. Purchaser is a corporation duly organized, validly existing and in good standing under the laws of Delaware
with all requisite power and authority to own, lease and operate its properties and to carry on its business as now being owned,
leased, operated and conducted. The Company is duly licensed or qualified to do business and is in good standing as a foreign
corporation in each jurisdiction where the nature of the properties owned, leased or operated by it or the business conducted
by it requires such licensing or qualification, except where the failure to be so qualified would not have a material adverse
effect on Purchaser and its subsidiaries, taken as a whole.

 

5.2       Due
Authorization. Purchaser has full power and authority to enter into this Agreement and the Transaction Documents and to consummate
the transactions contemplated hereby and thereby. The execution, delivery and performance by Purchaser of this Agreement have
been duly and validly approved by all necessary corporate action and no further corporate action is necessary. Purchaser has duly
and validly executed and delivered this Agreement. This Agreement and the Transaction Documents constitute the legal, valid and
binding obligations of Purchaser, enforceable in accordance with their respective terms, except as such enforceability may be
limited by (a) applicable bankruptcy, insolvency, moratorium, reorganization or similar laws in effect which affect the enforcement
of creditors’ rights generally or (b) equitable limitations on the availability of specific remedies.

 

    24 

     

    

 

5.3       Consents
and Approvals. Except as set forth on Schedule 5.3, no consent, license, authorization or approval of, filing or registration,
declaration or filing with, or cooperation from, any Governmental Authority or any other Person not a party to this Agreement
is necessary in connection with the execution, delivery, performance, validity and enforceability by Purchaser of this Agreement
or any Transaction Documents and the consummation by the Purchaser of the transactions contemplated hereby, other than such consents,
licenses, authorizations, approvals, filings, registrations, declarations or cooperation that, if not obtained, made or given,
would not, individually or in the aggregate, impair in any material respect the ability of Purchaser to perform its obligations
hereunder or prevent or materially impede, interfere with, hinder or delay the consummation of the transactions contemplated hereby.
The execution, delivery and performance by Purchaser of this Agreement and the Transaction Documents, the consummation of the
transactions contemplated hereby or thereby and compliance with the terms of this Agreement and the Transaction Documents do not
and will not (i) materially violate or conflict with, result in a material breach or termination of, result in any material loss
or forfeiture of rights or benefits under, constitute a default under, or permit cancellation of, or require any written notice
or consent under any Contract to which Purchaser is a party or any of its properties are bound or affected or any Law applicable
to Purchaser or by which any of its properties are bound of affected, (ii) violate or conflict with any provision of Purchaser’s
certificate of incorporation or bylaws, (iii) result in any breach or termination of, or constitute a default under, or constitute
an event which notice or lapse of time, or both, would become a default under, or result in the creation of any Lien upon any
asset of Purchaser under, or create any rights of termination, cancellation or acceleration in any Person or entity under any
material Contract or violate any Order, to which Purchaser is a party or by which Purchaser or its assets, business or operations
receive benefits, or result in the loss or adverse modification of any material license, franchise, Permit or other authorization
granted to or otherwise held by Purchaser that is material or otherwise held by Purchaser that is material to the business or
financial condition of Purchaser, in any such case as would have a material adverse effect on Purchaser and its subsidiaries taken
as a whole or as would be reasonably likely to prevent Purchaser from consummating the transactions contemplated by this Agreement.

 

5.4       Legal
Proceedings. There are no actions, litigation, claims, suits, mediations, arbitrations, inquiries, government or other investigations
or proceedings of any nature pending or, to the Purchaser’s knowledge, threatened, involving the Purchaser, or any subsidiary
of Purchaser, or against any property, asset, or rights or interest of Purchaser, in each case that would be reasonably likely
to prevent the consummation of the transactions contemplated by this Agreement.

 

5.5       Brokers.
None of Purchaser or any of Purchaser’s directors, officers, employees, consultants, advisors or agents has employed or
incurred any Liability to any broker, finder or agent with respect to this Agreement, the Transaction Documents and the transactions
contemplated hereby.

 

5.6       Tax
Matters. No party to this Agreement has taken any action or knows of any fact or circumstance that could reasonably be expected
to prevent the Merger from qualifying as a reorganization within the meaning of Section 368(a) of the Code.

 

ARTICLE
VI

 

COVENANTS

 

6.1       Preservation
of Business. During the period from the date of this Agreement and continuing until the earlier of the termination of this
Agreement or the Closing, the Company agrees and the Sellers agree to use their reasonable efforts to cause the Company (in each
case except to the extent expressly contemplated by this Agreement or as consented to in writing by Purchaser, which such consent
shall not be unreasonably withheld, conditioned or delayed) to carry on the Business in the usual, regular and ordinary course
in substantially the same manner as heretofore conducted, to pay its debts and Taxes when due, to pay or perform other obligations
when due, and to use all commercially reasonable efforts consistent with past practice to preserve intact its present business
organization, keep available the services of its present officers and key employees and preserve its relationships with customers,
suppliers, distributors, licensors, licensees, and others having business dealings with it to the end that its goodwill and ongoing
business shall be materially unimpaired at the Closing Date. Without limiting the foregoing, except as expressly contemplated
by this Agreement, the Company shall not cause or permit any of the following without the prior written consent of Purchaser:

 

(a)       Charter
Documents. Cause or permit any amendments to the Company Charter Documents;

 

(b)       Dividends;
Changes in Capital Stock. Declare or pay any dividends on or make any other distributions (whether in cash, stock or property)
in respect of any of its capital stock, or split, combine or reclassify any of its capital stock or issue or authorize the issuance
of any other securities in respect of, in lieu of or in substitution for shares of its capital stock, or repurchase or otherwise
acquire, directly or indirectly, any shares of its capital stock except from former employees, directors and consultants in accordance
with agreements providing for the repurchase of shares in connection with any termination of service to the Company;

 

    25 

     

    

 

 

(c)       Material
Contracts; Other Activities. Enter into any commitment or agreement not in the ordinary course of business or any material
Contract (including any Contract that would have been a Material Contract if in existence on the date hereof), or violate, amend
or otherwise modify or waive any of the terms of any of its material Contracts (including Material Contracts) or otherwise engage
in any activities or transactions that are outside the ordinary course of its business and consistent with past practice;

 

(d)       Issuance
of Securities. Issue, deliver or sell or authorize or propose the issuance, delivery or sale of, or purchase or propose the
purchase of, any shares of its capital stock or securities convertible into or exercisable or exchangeable for, or subscriptions,
rights, warrants or options to acquire, or other agreements or commitments of any character obligating it to issue any such shares
or other convertible, exercisable or exchangeable securities, including the grant of options pursuant to a stock option plan;

 

(e)       Intellectual
Property. Transfer to any person or entity any rights to the Company’s Intellectual Property, other than non-exclusive
licenses to customers in the ordinary course of business consistent with past practices;

 

(f)       Exclusive
Rights. Enter into or amend any agreements pursuant to which any other party is granted exclusive marketing or other exclusive
rights of any type or scope with respect to any of its products or technology;

 

(g)       Dispositions.
Sell, lease, license or otherwise dispose of or encumber any of its properties or assets;

 

(h)       Indebtedness.
Incur any Debt or guarantee any Debt or issue or sell any debt securities or guarantee any debt securities of others;

 

(i)       Leases.
Enter into any lease with aggregate payment obligations in excess of $10,000;

 

(j)       Payment
of Obligations. Pay, discharge or satisfy in an amount in excess of $5,000 in any one case or $25,000 in the aggregate, any
claim, Liability or obligation (absolute, accrued, asserted or unasserted, contingent or otherwise) arising other than in the
ordinary course of business, other than the payment, discharge or satisfaction of Liabilities reflected or reserved against in
the Balance Sheet;

 

(k)       Capital
Expenditures. Make any capital expenditures, capital additions or capital improvements except in the ordinary course of business
and consistent with past practice;

 

(l)       Insurance.
Materially reduce the amount of any insurance coverage provided by existing insurance policies;

 

(m)       Termination
or Waiver. Terminate or waive any right of substantial value;

 

(n)       Employee
Benefit Plans; New Hires; Pay Increases. Adopt or amend any employee benefit or stock purchase or option plan, enter into
any employment Contract, or hire any new officer-level employee, pay any special bonus or special remuneration to any employee
or director (except payments made pursuant to written agreements outstanding on the date hereof and that have been delivered to
Purchaser prior to the date hereof), or increase the salaries or wage rates of any employee;

 

(o)       Severance
Arrangements. Grant any severance or termination pay to any director, officer or other employee;

 

(p)       Lawsuits.
Commence a lawsuit other than (i) for the routine collection of bills, or (ii) in such cases where it in good faith determines
that failure to commence suit would result in the material impairment of a valuable aspect of its business, provided that it consults
with Purchaser prior to the filing of such a suit or (iii) for breach of this Agreement;

 

    26 

     

    

 

(q)       Acquisitions.
Acquire or agree to acquire by merging or consolidating with, or by purchasing a substantial portion of the assets of, or by any
other manner, any business or any Person or division or business thereof, or otherwise acquire or agree to acquire any assets
which are material, individually or in the aggregate, to the Company;

 

(r)       Taxes.
Make or change any material election in respect of Taxes, adopt or change any accounting method in respect of Taxes, file any
material Tax Return or any amendment to a material Tax Return, enter into any closing agreement, settle any material claim or
assessment in respect of Taxes, or consent to any extension or waiver of the limitation period applicable to any material claim
or assessment in respect of Taxes;

 

(s)       Notices.
Fail to give all material notices and other information required to be given, if any, to the employees of the Company, any collective
bargaining unit representing any group of employees of the Company, and any applicable government authority under the WARN Act,
the National Labor Relations Act, the Internal Revenue Code, the Consolidated Omnibus Budget Reconciliation Act, and other applicable
Law in connection with the transactions provided for in this Agreement;

 

(t)       Revaluation.
Revalue any of its assets, including without limitation writing down the value of inventory or writing off notes or Receivables
other than in the ordinary course of business;

 

(u)       Obligations.
Fail to pay or otherwise satisfy its material monetary obligations as they become due, except such as are being contested in good
faith; or

 

(v)       Other.
Take or agree in writing or otherwise to take, any of the actions described in (a)-(u) above, or any action that would cause a
material breach of its representations or warranties contained in this Agreement or prevent it from performing or cause it not
to perform its covenants hereunder or result in the failure of any closing condition hereunder.

 

6.2       Supplemental
Information. None of the Sellers or the Company shall take any action or fail to take any action which, from the date hereof
through the Closing, would cause or constitute a breach of any of the representations, warranties, agreements or covenants of
the Sellers or the Company set forth in this Agreement or cause such representations, warranties, agreements or covenants to be
inaccurate at the Closing. From time to time prior to the Closing, each party shall promptly (and in any event within 72 hours)
disclose in writing to the other Parties any matter (i) occurring after the date hereof, or (ii) which such party becomes aware
of after the date hereof, which, if existing and known on the date hereof, would have been required to be disclosed on the Schedule
of Exceptions or which would render inaccurate any of the representations and warranties set forth in Article III, Article
IV or Article V hereof (each such disclosure referred to herein as a “Supplement”). However, no
Supplement provided pursuant to clause (ii) of this Section 6.2 shall be deemed to cure any prior existing breach of any
representation, warranty or covenant in this Agreement nor shall such Supplement be deemed to amend the Schedule of Exceptions
with respect to any prior breach without the written consent of Purchaser; provided, however that Sellers shall be permitted to
provide a Supplement pursuant to clause (ii) of this Section 6.2 at any time up to two weeks following the date of this
Agreement which will be deemed to amend the Schedule of Exceptions with respect to updates or additions which are approved by
prior written consent of Purchaser. A Supplement provided pursuant to clause (i) of this Section 6.2 shall be deemed to
amend the Schedule of Exceptions.

 

6.3       Reserved.

 

6.4       Confidentiality.
From and for a period of twelve (12) months after the Closing, no Seller shall divulge or convey to any Person (other than Purchaser
and its subsidiaries (including the Company), any Business Confidential Information. In this regard, the Company and the Sellers
acknowledge that the Purchaser’s common stock is publicly traded and that any Business Confidential Information obtained
by the Company and the Sellers regarding Purchaser will be considered to be material non-public information within the meaning
of federal and state securities Laws. Accordingly, the Company and the Sellers acknowledge and agree not to engage in any transactions
in Purchaser Common Stock in violation of applicable Laws.

 

    27 

     

    

 

6.5       Public
Announcement. Except for public announcements or press releases that are required by SEC disclosure laws concerning the proposed
purchase and sale transactions herein contemplated, no public announcement or press release announcing such transactions will
be made without the joint written consent of Purchaser and the Sellers. Purchaser and the Sellers shall cooperate on the form,
content, timing and manner of any such announcement.

 

6.6       Access.
The Company and the Sellers will permit representatives of Purchaser from and after the date hereof up and through Closing to
have full access at all reasonable times during normal business hours to the books, accounts, records, properties, operations,
facilities, clients, customers, creditors, suppliers and personnel pertaining to the Company or the Business, and will furnish
Purchaser with such financial and operating data concerning the Company or the Business as Purchaser shall from time to time reasonably
request.

 

6.7       Transition
and Cooperation. From and after the Closing, the Sellers, excluding G&D, shall promptly deliver to Purchaser all correspondence,
papers, documents and other items and materials received by either Seller or found to be in the possession of either Seller which
pertain to the Company or the Business. Upon the reasonable request of the Purchaser, each of the Sellers hereto shall use commercially
reasonable efforts to do, execute, acknowledge and deliver all such further acts, assurances, deeds, assignments, transfers, conveyances
and other instruments and papers as may be reasonably required or appropriate to carry out the transactions contemplated by this
Agreement, subject to applicable Law.

 

6.8       No
Claims. Each Seller hereby expressly acknowledges and agrees that he/she/it has reviewed (and has had the opportunity to review
with counsel) and understands the Purchase Price, including each element of the Closing Payment set forth in Section 2.3(a)
and Schedule 2.3(a)(i) and the Earnout Payment set forth in Section 2.3(b), and the indemnification obligations
set forth in Article IX. Effective as of the Closing, each Seller, by its execution and delivery of this Agreement, hereby
forever waives, releases and discharges (and hereby agrees to cause each of its representatives to forever waive, release and
discharge) with prejudice the Company from any and all claims, rights (including rights of indemnification, contribution and other
similar rights, from whatever source, whether under contract, applicable Law or otherwise), causes of action, protests, suits,
disputes, orders, obligations, debts, demands, proceedings, contracts, agreements, promises, liabilities, controversies, costs,
expenses, fees (including attorneys’ fees), or damages of any kind, arising by any means (including subrogation, assignment,
reimbursement, operation of law or otherwise), whether known or unknown, suspected or unsuspected, accrued or not accrued, foreseen
or unforeseen, or mature or unmature related or with respect to, in connection with, or arising out of, directly or indirectly,
the type, form, value, or distribution of the consideration paid by Purchaser to the Sellers or any indemnification obligations
by the Sellers in favor of the Purchaser, in relation to the transactions contemplated by this Agreement; provided, however, this
clause (b) shall not be construed as releasing any party from its obligations otherwise expressly set forth in this Agreement
or any agreement delivered pursuant hereto. Each Seller hereby expressly waives any and all provisions, rights and benefits conferred
by §1542 of the California Civil Code (or any similar, comparable or equivalent provision or law) which section provides:

 

“A
GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT KNOW OR SUSPECT TO EXIST IN HIS OR HER FAVOR AT THE TIME
OF EXECUTING THE RELEASE, WHICH IF KNOWN BY HIM OR HER MUST HAVE MATERIALLY AFFECTED HIS OR HER SETTLEMENT WITH THE DEBTOR.”

 

6.9        Tax
Cooperation. After the Closing, the Sellers shall cooperate fully with Purchaser and the Company in the preparation of all
Tax Returns and shall provide to Purchaser and the Company any records and other information reasonably requested by such Persons
in connection therewith. The Sellers shall cooperate fully with Purchaser and the Company in connection with any Tax investigation,
audit or other proceeding. After the Closing, Purchaser and the Company shall cooperate with each Seller in the preparation of
any Tax Return of a respective Seller and shall provide to such Seller any records and other information reasonably requested
by such Seller in connection therewith. The Purchaser and the Company shall cooperate fully with each Seller in connection with
any Tax investigation, audit or other proceeding.

 

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6.10       Reorganization
Treatment. Purchaser, the Surviving Entity, the Company, and the Sellers and each of their respective Affiliates will (i)
use all reasonable best efforts to cause the Merger to constitute a reorganization under Section 368(a) of the Code, and (ii)
not take any action or fail to take any action that could reasonably be expected to prevent or impede the Merger from qualifying
as a reorganization within the meaning of Section 368(a) of the Code. Purchaser, the Surviving Entity, the Company and the Sellers
shall file all Tax Returns consistent with the Merger qualifying as a reorganization under Section 368(a), unless otherwise required
by law.

 

6.11       Payment
of Debt and Company Unpaid Transaction Expenses. (a) Purchaser shall pay to the holders of the outstanding balance of Debt
listed on Schedule 6.11(a) in 18 consecutive monthly installments commencing 30 days after the Closing; (b) all the Company
Unpaid Transaction Expenses which the Company and/or the Sellers are obligated to pay at or substantially contemporaneous with
the Closing as set forth on Schedule 6.11(b), a cash amount in 12 consecutive monthly installments commencing 30 days after
the Closing; (c) the amount owed to the broker listed on Schedule 6.11(c) payable as follows: $100,000 in cash payable
over the next six (6) months commencing with the first payment five (5) days after the Effective Time and the issuance of 375,554
shares of restricted common stock of the Purchaser (such payment of Debt and Company Unpaid Transaction Expenses, collectively,
the “Debt Payment”).

 

6.12       Payment
of Legal Fees. Within sixty (60) days of the Effective Time, the Company and/or Purchaser shall pay to Wilmer Cutler Pickering
Hale and Dorr LLP (“WilmerHale”) the invoices which are outstanding as of the date hereof in the aggregate
amount of $91,245.33 (the “Legal Fees”). For the avoidance of doubt, such obligation of the Company and Purchaser
to pay the Legal Fees shall be joint and several.

 

6.13       Payment
of Promissory Notes. Michael Orlando has issued promissory notes to the Company as listed on Schedule 6.13. Orlando’s
notes will be paid in equal quarterly payments (“Note Payments”) payable on October 1, January 1, April 1 and
July 1 of each year for a period of four (4) years. The initial payment will be a double payment due on January 1, 2018 (comprised
of the January 1, 2018 payment and the deferred October 1, 2017 payment) on which date Orlando will receive two (2) quarterly
payments. All Note Payments after the initial payment will be single payments payable.

 

6.14       Third-Party
Beneficiary. Purchaser, Merger Sub and the Company hereby expressly acknowledge that WilmerHale is a third-party beneficiary
under this Agreement and that it is the intention of each of Purchaser, Merger Sub and the Company to confer third-party beneficiary
rights upon WilmerHale in relation to, and to allow WilmerHale to rely upon, the terms of Sections 6.11 and 6.12.

 

ARTICLE
VII

 

POST
CLOSING OPERATIONS

 

7.1        
Reserved.

 

ARTICLE
VIII

 

CONDITIONS
PRECEDENT TO OBLIGATIONS OF PURCHASER

 

The
obligations of Purchaser under Article II of this Agreement are subject to the satisfaction of the following conditions
precedent on or before the Closing, unless waived in writing by Purchaser in its sole discretion:

 

8.1       Warranties
True. The representations and warranties of the Company and the Sellers contained herein shall have been true and correct
in all respects on and as of the date of this Agreement; and, the representations and warranties of the Company and the Sellers
contained herein shall be true and correct in all material respects on and as of the Closing (except in the case of any representation
or warranty which itself is qualified by materiality or Material Adverse Effect or Material Adverse Change, which representation
and warranty must be true and correct in all respects).

 

    29 

     

    

 

8.2       Compliance
with Covenants. The Company and Sellers shall have performed and complied in all material respects with all of their respective
covenants, obligations and agreements contained in this Agreement to be performed by them on or prior to the Closing Date.

 

8.3       Consents;
Approvals. Purchaser shall have received written evidence to the satisfaction of Purchaser that all consents and approvals
of any Governmental Authorities or any other Persons required, if any, for the Sellers’ consummation of the transactions
contemplated hereby and the ownership of the Company and operation of the Business by Purchaser resulting therefrom have been
obtained by the Sellers and/or the Company.

 

8.4       No
Action. No Order of any court or Governmental Authority shall have been entered that enjoins, restrains or prohibits this
Agreement or the consummation of the transactions contemplated by this Agreement. No governmental action shall be pending or threatened
that seeks to enjoin, restrain, prohibit or obtain damages with respect to this Agreement or the complete consummation of the
transactions contemplated by this Agreement. No governmental investigation shall be pending or threatened that might result in
any such Order, suit, action or proceeding.

 

8.5       Closing
Deliveries. Purchaser shall have received, in form and substance reasonably satisfactory to Purchaser, such agreements, documents,
instruments and certificates as shall be reasonably requested by Purchaser to consummate the transactions contemplated hereby
to and convey to Purchaser all of the Shares as contemplated herein, including the following duly executed instruments:

 

(a)       all
consents listed in Section 3.3 of the Schedule of Exceptions;

 

(b)       a
good standing certificate for the Company, dated within five (5) days of the Closing Date, from the State of Delaware and each
other State where the Company is or is required to be qualified to do business;

 

(c)       stock
certificates relating to the Shares duly endorsed for transfer to Purchaser or accompanying duly executed and delivered stock
powers effecting the same;

 

(d)       a
certificate of the Company’s Secretary’s certifying as to resolutions adopted by the Company’s Board of Directors
approving the transactions described herein; and

 

(e)       a
Release duly executed and delivered by each Seller;

  

8.6       Participation
in the Closing. Each Seller shall have proceeded with the Closing such that at the Closing, Purchaser shall own all of the
outstanding shares of capital stock of the Company.

 

8.7       No
Bankruptcy; Material Adverse Effect. The Company shall not have entered, or have entered against it, an Order of relief under
the Bankruptcy Code, and there shall not have occurred any Material Adverse Effect or Material Adverse Change.

 

8.8       Resignation.
Each director of the Company shall have resigned as a director effective immediately prior to the Closing.

 

    30 

     

    

 

ARTICLE
IX

 

CONDITIONS
PRECEDENT TO OBLIGATIONS OF THE COMPANY

 

The
obligations of the Company under Article II of this Agreement are subject to the satisfaction of the following conditions
precedent on or before the Closing, unless waived by the Company:

 

9.1       Warranties
True. The representations and warranties of Purchaser contained herein shall have been true and correct in all respects on
and as of the date of this Agreement; and, the representations and warranties of Purchaser contained herein shall be true and
correct in all material respects on and as of the Closing (except in the case of any representation or warranty which itself is
qualified by materiality or material adverse effect or material adverse change, which representation and warranty must be true
and correct in all respects).

 

9.2       Compliance
with Covenants. Purchaser shall have performed and complied in all material respects with all of its covenants, obligations
and agreements contained in this Agreement to be performed by it on or prior to the Closing Date.

 

9.3       No
Action. No Order of any court or Governmental Authority shall have been entered that enjoins, restrains or prohibits this
Agreement or the consummation of the transactions contemplated by this Agreement. No governmental action shall be pending or threatened
that seeks to enjoin, restrain, prohibit or obtain damages with respect to this Agreement or the complete consummation of the
transactions contemplated by this Agreement. No governmental investigation shall be pending or threatened that might result in
any such Order, suit, action or proceeding.

 

9.4       Closing
Deliveries. The Company shall have received the following duly executed instruments:

 

(a)       a
good standing certificate for Purchaser, dated within five (5) days of the Closing Date, from the State of Delaware and each other
State where Purchaser is or is required to be qualified to do business;

 

(b)       a
certificate of Purchaser’s Secretary certifying as to resolutions adopted by the Board of Directors of Purchaser approving
the transactions described herein;

  

9.5       No
Bankruptcy. Purchaser shall not have entered, or have entered against it, an Order of relief under the Bankruptcy Code.

 

9.6       Purchaser
Common Stock Issuances. Purchaser shall have issued to each of Orlando, G&D and the Other Holders an aggregate number
of shares of Purchaser Common Stock equal to 19.96% (rounded to the nearest whole share of Purchaser Common Stock).

 

9.7       Purchaser
Series C Preferred Stock Issuance. Purchaser shall have issued to G&D 2,000 shares of Series C Preferred Stock.

 

9.8       Employment
Agreements. Purchaser and each of the employees set forth on Schedule 9.8 shall have executed and delivered valid and
binding employment agreements which shall be in full force and effect concurrently with the execution and delivery of this Agreement.

 

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ARTICLE
X

 

TERMINATION

 

10.1        Termination.
This Agreement may be terminated at any time on or prior to the Closing:

 

(a)       By
the written consent of each of the Company and Purchaser;

 

(b)       By
Purchaser by written notice to the Company if any event occurs or condition exists that would render impossible the satisfaction
of one or more conditions to the obligations of Purchaser to consummate the transactions contemplated by this Agreement as set
forth in Article VIII and that, if capable of cure, has not been cured within ten (10) Business Days of receipt by the
Company of notice thereof from Purchaser;

 

(c)       By
the Company by written notice to Purchaser if any event occurs or condition exists that would render impossible the satisfaction
of one or more conditions to the obligation of the Company to consummate the transactions contemplated by this Agreement as set
forth in Article IX and that, if capable of cure, has not been cured within ten (10) Business Days of receipt by Purchaser
of notice thereof from the Company;

 

(d)       By
Purchaser by written notice to the Company if there has been a material misrepresentation or other material breach by any Seller
or the Company of the representations, warranties or covenants of any Seller or the Company set forth herein that, if capable
of cure, has not been cured within ten (10) Business Days of receipt by the Company of notice thereof from Purchaser; or by the
Company if there has been a material misrepresentation or other material breach by Purchaser of the representations, warranties
and covenants of Purchaser set forth herein that, if capable of cure, has not been cured within ten (10) Business Days of receipt
by Purchaser of notice thereof from the Company;

 

(e)       By
written notice of the Company or Purchaser, to the other parties, if any court of competent jurisdiction or other Governmental
Authority shall have issued an Order or ruling or taken any other action permanently restraining, enjoining or otherwise prohibiting
the transactions contemplated hereby and such Order, ruling or other action shall have become final and nonappealable; or

 

(f)       By
written notice of Purchaser, on the one hand, or the Company, on the other hand, to the other parties hereto, if the Closing has
not occurred on or before May 31, 2017 (the “Termination Date”), provided, that the right to terminate under
this Agreement under this Section 10.1(f) shall not be available to a party if the failure of such party to fulfill or breach
by such party of any if its obligations under this Agreement has been the cause of, or resulted in, the failure of the Closing
to occur on or before such date. Any extension of the Closing Date shall require the mutual written consent of the Company and
Purchaser.

 

10.2        Effect
of Termination. In the event of termination of this Agreement as provided in Section 10.1, this Agreement shall forthwith
become void and there shall be no Liability or obligation on the part of any party hereto or their respective officers, directors,
stockholders or Affiliates, except to the extent that such termination results from a breach by a party hereto of any of its representations,
warranties or covenants contained herein; provided that, the provisions of this Article X and Article XII
shall remain in full force and effect and survive any termination of this Agreement, as well as Section 3 and Schedule 3 of that
certain Letter of Intent dated as of March 26, 2017, which is attached hereto as Exhibit 10.2.

 

 

ARTICLE
XI

 

INDEMNIFICATION

 

11.1        Survival.
The representations and warranties of the Company and the Sellers in this Agreement shall survive the Closing until a date that
is eighteen (18) months from the Closing Date, provided, however, that (a) such time limitation shall not apply
to the representations and warranties set forth in Sections 3.2, 4.1 and 4.3 (the “Fundamental Representations”)
(such representations and warranties to survive until the date that is sixty (60) days following the expiration of the applicable
statute of limitations) and (b) [reserved]. After the end of the relevant survival period specified above, the applicable Sellers’
obligations under this Article XI with respect to such representations and warranties shall expire, terminate and shall
be of no further force and effect unless a claim for indemnification is made hereunder prior to the expiration of the relevant
survival period in which case such claim shall continue in effect until final resolution of such claim. Notwithstanding anything
in this Agreement to the contrary, the covenants and agreements of the Sellers and the Company (but not representations and warranties)
under this Agreement shall survive until the date that is sixty (60) days following the expiration of the applicable statute of
limitations.

 

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11.2        Indemnification.
Subject to the limitations and conditions for indemnification contained in Sections 11.1, 11.3 and 11.7, the Sellers, excluding
G&D, (each, an “Indemnitor”), shall severally (based on their Pro Rata Share) and not jointly, indemnify,
defend and hold harmless Purchaser and its Affiliates, and each of their officers, directors, employees and agents, and their
heirs and successors (each, an “Indemnitee”), against Losses, up to an amount equal to seventy-seven percent
(77%) of such Losses with respect to any individual claim or aggregation of claims, relating to or arising out of:

 

(a)       any
breach of any representation or warranty made by the Company or any Seller in this Agreement in Article III;

 

(b)       any
breach of any representation or warranty made by any Seller in Article IV;

 

(c)       any
breach of any covenant of the Company or any Seller in this Agreement; and

 

(d)       any
Pre-Closing Taxes.

 

11.3        Limitations.
Notwithstanding anything to the contrary in this Agreement:

 

(a)       no
claim may be made by any Indemnitee(s) for indemnification pursuant to Section 11.2(a) unless and until the aggregate amount
of Losses for which the Indemnitee(s) seeks to be indemnified pursuant to Section 11.2(a) exceeds $50,000 (the “Threshold
Amount”), at which time the Indemnitee(s) shall be entitled to indemnification for all such Losses (including all Losses
included within the Threshold Amount); provided, that the Sellers shall not have any liability relating to an individual
claim (or a series of related or similar claims) resulting in Losses in the amount of $5,000 or less (a “De Minimis Claim”),
regardless of whether or not aggregate Losses as of the time of such claim have exceeded the Threshold Amount.

 

(b)       except
for any claim based on fraud or intentional misrepresentation, the maximum aggregate indemnification obligation of each Seller
for money damages pursuant to Section 11.2(a), other than with respect to a claim for indemnification arising from any
breach or inaccuracy of any Fundamental Representations, shall be limited to such Seller’s Pro Rata Share of the Total Consideration;

 

(c)       notwithstanding
anything in this Agreement to the contrary, except for any claim based on fraud or intentional misrepresentation, the maximum
aggregate indemnification obligation of each Seller for money damages pursuant to Article XI shall be limited in the aggregate
to the consideration actually received by such Seller pursuant to this Agreement; and

 

(d)       no
Seller shall be liable or have any indemnification obligation for the breach of any representations or warranty made by any other
Seller in Article IV of this Agreement, the breach of any covenant of any other Seller in this Agreement or for the actions
or inaction of any other Seller in connection with this Agreement.

 

(e)       for
the avoidance of doubt, each Indemnitor shall only be responsible (based on their Pro Rata Share) for an amount up to seventy-seven
percent (77%) of their Pro Rata Share of Losses with respect to any claim or claims for indemnification by Indemnitee pursuant
to this Article XI.

  

    33 

     

    

 

11.4        Procedures
for Making Claims. If and when an Indemnitee desires to assert a claim for Losses against any Indemnitor, the Indemnitee shall
deliver to the Indemnitor a certificate signed by such Indemnitee (if the Indemnitee is an entity, the certificate shall be signed
by its chief executive officer) (a “Notice of Claim”), which Notice of Claim shall: (i) state that the Indemnitee
has paid or accrued (or intends or expects to pay or accrue) Losses to which it is entitled to indemnification pursuant to this
Article XI and the amount thereof (to the extent then known); and (ii) specifying to the extent possible (A) the individual
items of Losses in the certificate, (B) the date each such item was or is expected to be paid or accrued, to the extent known,
and (C) the basis upon which Losses are claimed (including the specific clause of this Agreement pursuant to which such indemnification
is being sought. Such Notice of Claim shall be delivered prior to the expiration of any applicable survival period as set forth
in Section 11.1. If the Indemnitor shall object to such Notice of Claim, the Indemnitor shall deliver written notice of
objection (the “Notice of Objection”) to the Indemnitee within fifteen (15) Business Days after receipt of
the Notice of Claim. The Notice of Objection shall set forth the grounds upon which the objection is based and state whether the
Indemnitor objects to all or only a portion of the matter described in the Notice of Claim. The Losses set forth in the Notice
of Claim shall be payable to the Indemnitee within twenty (20) Business Days of the expiration of such fifteen (15) Business Day
period without the necessity of further action to the extent the Indemnitor has not delivered a Notice of Objection. If the Indemnitor
shall timely deliver a Notice of Objection, the Indemnitor and the Indemnitee shall attempt in good faith to agree upon the rights
of such Persons with respect to the claim in the Notice of Claim. If an agreement on the amount of Losses is reached, then the
Losses set forth in the Notice of Claim shall be payable to the Indemnitee within fifteen (15) Business Days of the date of such
agreement. If the parties are unable to reach an agreement within fifteen (15) Business Days, either the Indemnitor or the Indemnitee
may demand arbitration of the matter (such arbitration to be conducted by JAMS in New York City) (unless the matter is at issue
in a pending third party claim, in which case arbitration shall not be commenced until such amount is ascertained or both persons
agree to arbitration), and the matter shall be settled by arbitration conducted by one arbitrator mutually agreeable to the Indemnitor
and the Indemnitee. In the event that within ten (10) days after submission of any dispute to arbitration, the Indemnitor and
the Indemnitee cannot mutually agree on one arbitrator, the Indemnitor and the Indemnitee shall each select one arbitrator and
the two arbitrators so selected shall select a third arbitrator. The arbitrator(s) shall set a limited time period and establish
procedures designed to reduce the cost and time for discovery. The decision of the arbitrator or a majority of the arbitrators,
as the case may be, as to the validity and amount of any claim for indemnification for Losses (a “Resolved Amount”)
shall be binding and conclusive upon the Indemnitor and the Indemnitee. Such decision shall be delivered in writing and shall
be supported by written findings of fact and conclusions which shall set forth the award, judgment, decree or order awarded by
the arbitrator(s). Judgment upon any award rendered by the arbitrator(s) may be entered in any court having jurisdiction.

 

11.5       Defense
Procedure for Third Party Claims. If any claim, demand or Liability that could constitute indemnifiable Losses hereunder is
asserted by any third party against any Indemnitee, the Indemnitee shall promptly provide the Indemnitor with a Notice of Claim
with respect to such third-party claim. The Indemnitor shall, upon the written request of the Indemnitee, have the right to defend
any actions or proceedings brought against the Indemnitee in respect of matters embraced by the indemnity provided under this
Article XI, but the Indemnitee shall have the right to conduct and control the defense, compromise or settlement of any
such claim, demand or Liability if the Indemnitee chooses to do so, on behalf of and for the account and risk of the Indemnitor
who shall be bound by the result so obtained to the extent provided herein; provided, that Indemnitee may not compromise or settle
such claim without the prior written consent of Indemnitor; provided, further, that if the Indemnitor is not allowed to control
the defense, they may provide advice or participate in the defense of any third party claim through counsel of its choosing, but
the fees and expenses of such counsel shall be at the expense of the Indemnitor. If, after a request to defend any action or proceeding,
the Indemnitor neglects to defend the Indemnitee, a recovery against the latter suffered by it in good faith, is conclusive in
its favor against the Indemnitor, provided, however, that, if the Indemnitor did not receive reasonable notice of the action or
proceeding against the Indemnitee, or is not allowed to control the defense, judgment against the Indemnitee is only presumptive
evidence against the Indemnitor that any resulting Losses constitute an indemnifiable claim under this Article XI. The
parties shall cooperate in the defense of all third party claims that may give rise to indemnifiable claims hereunder. In connection
with the defense of any claim, each party shall make available to the party controlling such defense, any books, records or other
documents within its control that are reasonably requested in the course of such defense. Except with the consent of the Indemnitor
(which consent shall not be unreasonably withheld or delayed), no settlement of any such claim with any third party claimant shall
be determinative of the amount of Losses relating to such matter, but shall only be presumptive evidence of the amount of Losses
constituting such indemnifiable claim. In the event that the Indemnitor has consented to any such settlement, the Indemnitor shall
have no power or authority to object under any provision of this Article XI to the existence and amount of any claim by
the Indemnitee with respect to such settlement. Indemnification payments with respect to third party claims shall be paid by the
Indemnitor upon (i) the entry of a judgment against the Indemnitee and the expiration of any applicable appeal period; (ii) the
entry of an unappealable judgment or final appellate decision against the Indemnitee; or (iii) a settlement of such claim, in
each case subject to the dispute resolution provisions of Section 11.4.

 

    34 

     

    

 

11.6       Right
of Setoff. If there is determined to be any indemnifiable Losses (whether by agreement, failure to object or decision of arbitrator(s))
(“Determined Losses”) payable to an Indemnitee or if there is otherwise determined to be any amount owing to
any Seller under this Agreement, Purchaser shall be entitled to retain as an offset, without any further action by any Indemnitor
or Purchaser, if and as applicable, a portion (up to all) of any Earnout Payment equal to such Determined Losses and in satisfaction
thereof to the extent of such offset, and such offset shall be deemed to occur automatically such as to reduce, as applicable,
the applicable payments otherwise payable by Purchaser. In addition, if a Indemnitee has made a claim for Losses that has not
yet been resolved (including in connection with a third party claim), Purchaser shall be entitled to hold back from any payments
that would otherwise be due as part of the Earnout Payment the full amount of such claim until resolution and determination thereof.

 

11.7        Exclusive
Remedy.

 

(a)       In
the event the Closing occurs, subject to Section 12.11, the sole and exclusive remedy of Purchaser or any other Indemnitee
for Losses for any breach or inaccuracy of any representation or warranty or for any breach of any covenant or obligation by the
Company or any of the Sellers shall be indemnification pursuant to this Article XI; provided, however, this exclusive remedy
does not preclude (i) a party from bringing an action for specific performance or other equitable remedy to require a party to
perform its obligations under this Agreement or any of the Transaction Agreements or (ii) a party from pursuing remedies under
applicable Law for fraud or intentional misrepresentation, provided that the maximum indemnification obligation of any Seller
for fraud of another party shall be limited to the total consideration received by such Seller pursuant to this Agreement.

 

11.8       Treatment
of Indemnity Payments. Any payments made pursuant to this Article XI shall be treated as an adjustment to the Total
Consideration for all income Tax purposes and none of the parties shall take a contrary position with respect to any Tax Return,
audit or other proceeding.

 

11.9       Insurance
Proceeds. Any amount of Losses payable hereunder will be reduced (including retroactively) by any insurance proceeds actually
recovered by or on behalf of the Indemnitee in relation to such Losses. If an Indemnitee will have received, any amount as a result
of a claim for Losses hereunder (an “Indemnification Payment”), and an Indemnitee subsequently recovers insurance
proceeds in respect of such Losses, then such Indemnitee will promptly pay to the Indemnitor the amount of such insurance proceeds
in respect of such Losses, or, if less the amount of the Indemnification Payment. The Indemnitee shall use commercially reasonable
efforts to seek recovery under its applicable third party insurance policies, provided, that nothing in this sentence shall obligate
an Indemnitee to seek recovery of insurance proceeds prior to pursuing indemnification pursuant to this Article XI. If
an Indemnitee receives any insurance proceeds after having recovered amounts in respect of the related Losses from an Indemnitor,
it shall promptly pay such recovered amounts to the Indemnitor (net of the amount of any collection costs or retrospective premium
adjustments). Notwithstanding anything in this Agreement to the contrary, in no event shall the Indemnitee be obligated to institute
any action against any third party to seek recovery of indemnifiable damages.

 

ARTICLE
XII

 

MISCELLANEOUS

 

12.1       Expenses.
Except as otherwise expressly provided in this Agreement, each party hereto shall bear its own expenses with respect to the transactions
contemplated hereby.

 

12.2       Amendment.
This Agreement may be amended, modified or supplemented only by written agreement of Purchaser, the Company and the Sellers.

 

    35 

     

    

 

12.3       Notices.
Any notice, request, instruction or other document to be given hereunder by a party hereto shall be in writing and shall be deemed
to have been given, (a) when received if given in person or by personal-delivery, (b) on the date of transmission if sent by facsimile
or other electronic transmission including email with electronic confirmation of successful transmission and if sent on a Business
Day prior to 5:00 p.m. at the place of receipt, and if not sent during such time, on the next succeeding Business Day, (c) three
(3) Business Days after being deposited in the U.S. mail, certified or registered mail, postage prepaid, or (d) on the date of
scheduled delivery if delivered by nationally recognized express mail or courier service:

 

If
to Purchaser, addressed as follows:

 

Nxt-ID,
Inc.

Attn:  Gino
Pereira, CEO

285
North Drive – Suite D

Melbourne,
FL 32934

Email:
gino@nxt-id.com

 

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

 

Robinson
Brog

875
3rd Avenue

9th
Floor

New
York, NY 10022

Attn.:
David E. Danovitch, Esq.

Email:  ded@robinsonbrog.com

 

If
to Michael Orlando, addressed as follows:

 

Michael
Orlando

9000
Crow Canyon Road

Suite
S292

Danville,
CA 94506

Email:
michael@fit-pay.com

 

If
to G&D, addressed as follows:

 

Giesecke
& Devrient Mobile Security America, Inc.

45925
Horseshoe Drive

Dulles,
VA 20166

Email:

 

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

 

Womble
Carlyle Sandridge & Rice LLP

8065
Leesburg Pike, 4th Floor

Tysons
Corner, VA 22182-2738

Attn:
John Gambaccini, Esq.

Email:
jgambaccini@wcrs.com

 

Other
Holders to the Shareholder Representative, addressed as follows:

 

Michael
Orlando

9000
Crow Canyon Road

Suite
S292

Danville,
CA 94506

Email:
michael@fit-pay.com

 

    36 

     

    

 

If
to the Company, addressed as follows:

 

Fit
Pay, Inc.

Attn:
Chief Executive Officer

9000
Crow Canyon Road

Suite
S292

Danville,
CA 94506

 

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

 

Wilmer
Cutler Pickering Hale and Dorr LLP

650
Page Mill Road

Palo
Alto, CA 94304

Attn:
Glenn Luinenburg, Esq.

Email:
Glenn.Luinenburg@wilmerhale.com

 

or
to such other individual or address as a party hereto may designate for itself by notice given as herein provided.

 

12.4       Waivers.
The failure of a party to require performance of any provision shall not affect its right at a later time to enforce the same.
No waiver by a party of any condition or of any breach of any term, covenant, representation or warranty contained in this Agreement
shall be effective unless in writing.

 

12.5       Counterparts;
Facsimile or Electronic Signature. This Agreement may be executed in counterparts, each of which shall be deemed an original,
but all of which together shall constitute one and the same instrument. A signature of a party transmitted by facsimile or electronic
mail shall constitute an original for all purposes.

 

12.6       Interpretation.
The headings preceding the text of Articles and Sections included in this Agreement and the headings to exhibits, schedules or
annexes to this Agreement are for convenience only and shall not be deemed part of this Agreement or be given effect in interpreting
this Agreement.

 

12.7       Applicable
Law. This Agreement shall be governed by and construed and enforced in accordance with the internal laws of the State of New
York without giving effect to the principles of conflicts of law thereof.

 

12.8       No
Third Party Beneficiaries. This Agreement is solely for the benefit of the parties hereto and no provision of this Agreement
shall be deemed to confer rights upon any other Person, other than as expressly set forth in Section 6.4, Section 6.5
and Article XI.

 

12.9       Severability.
If any provision of this Agreement shall be held invalid, illegal or unenforceable, the validity, legality or enforceability of
the other provisions hereof shall not be affected thereby, and there shall be deemed substituted for the provision at issue a
valid, legal and enforceable provision as similar as possible to the provision at issue.

 

12.10       Remedies
Cumulative. The remedies provided in this Agreement shall be cumulative and shall not preclude the assertion or exercise of
any other rights or remedies available by law, in equity or otherwise, except as limited in Section 11.7(e).

 

12.11       Jurisdiction,
Service of Process. The parties agree that irreparable damage would occur in the event that any of the provisions of this
Agreement were not performed in accordance with their specific terms or were otherwise breached. It is accordingly agreed that
the parties shall be entitled to seek an injunction or injunctions to prevent or to address breaches or threatened breaches of
this Agreement, without the necessity of proving actual damages or posting bond, and to enforce specifically the terms and provisions
of this Agreement in any Federal Court located in the Southern District of New York or any New York State Court, this being in
addition to any other remedy to which they are entitled at law or in equity pursuant to, and as limited by, the terms of this
Agreement. In addition, except to the extent an alternative dispute resolution mechanism is expressly provided for herein, each
of the parties hereto (a) consents to submit itself to the personal jurisdiction in the Federal District Court of the Southern
District of New York in the event any dispute arises out of this Agreement or any transaction contemplated hereby, (b) agrees
that it will not attempt to deny or defeat such personal jurisdiction by motion or other request for leave from any such court,
(c) agrees that it will not bring any action relating to this Agreement or any transaction contemplated hereby in any court other
than the Federal District Court for the Southern District of New York or any New York State Court, and (d) waives any right to
trial by jury with respect to any action related to or arising out of this Agreement or any transaction contemplated hereby. EACH
PARTY TO THIS AGREEMENT IRREVOCABLY WAIVES THE RIGHT TO A TRIAL BY JURY IN CONNECTION WITH ANY MATTER ARISING OUT OF THIS AGREEMENT.

 

    37 

     

    

 

12.12       Attorney
Fees and Costs. Except as otherwise expressly set forth herein, the prevailing party in any litigation, arbitration proceeding
or other action shall be awarded all of its or their costs and expenses including, but not limited to, reasonable attorney fees
against the non-prevailing party. This provision shall apply to such expenses incurred at the trial and all appellate levels,
without respect to who is the initiating party and shall apply to an action for declaratory relief if the party instituting it
asserts specific contentions concerning this Agreement which is ruled upon by the court or arbitration. Such reasonable attorney’s
fees shall include, but not be limited to, fees for attorneys, paralegals, legal assistants and expenses incurred in any and all
judicial, bankruptcy, reorganization, administrative receivership, or other proceedings affecting creditors' rights and involving
a claim under this Agreement, even if such proceedings arise before or after entry of a final judgment

 

12.13       Waivers
of Inducement. The parties hereto waive any right to assert or claim that they were induced to enter into this Agreement by
any representation, promise, statement, or warranty made by any party or any party’s agent which is not expressly set forth
in this Agreement in writing.

 

12.14       Assignment.
This Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors and permitted
assigns. Neither the Company nor any Seller may assign, delegate or otherwise transfer such party’s rights or obligations
hereunder, including by operation of law, without the prior written consent of Purchaser. In the event of any permitted assignment,
the assignor shall be responsible for all obligations of the assignee and shall be bound in all respects by the provisions hereof.

 

12.15       Use
of Certain Terms. As used in this Agreement, the words “herein,” “hereof” and “hereunder”
and other words of similar import refer to this Agreement as a whole and not to any particular paragraph, subparagraph or other
subdivision. The use of the term “including” shall be deemed to be followed by “without limitation”.

 

12.16       Entire
Understanding. This Agreement and the Transaction Documents sets forth the entire agreement and understanding of the parties
hereto and supersedes any and all prior agreements, arrangements and understandings among the parties. The parties expressly agree
that the Binding Letter of Intent dated March 26, 2017 among the parties has, upon the execution of this Agreement, been and is
terminated and of no further force and effect.

 

{Signature
page to follow}

 

    38 

     

    

 

IN
WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed and delivered as of the date first above written.

 

	 	NXT-ID,
    INC.
	 	 	 
	 	By:	 
	 	Name: 	Gino
    M. Pereira
	 	Title:	Chief
Executive Officer

 

	 	Fit
Merger Sub, Inc.
	 	 	 
	 	By:	 
	 	Name: 	Gino
    M. Pereira
	 	Title:	Chief
Executive Officer

 

    39 

     

    

 

IN
WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed and delivered as of the date first above written.

 

	 	FIT
    PAY, INC.
	 	 	 
	 	By:	 
	 	Name: 	Michael
    Orlando
	 	Title:	Chief
    Executive Officer

 

    40 

     

    

 

IN
WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed and delivered as of the date first above written.

 

	 	Michael
    Orlando
	 	 
	 	 
	 	 

  

    41 

     

    

 

IN
WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed and delivered as of the date first above written.

 

	 	GIESECKE
    & DEVRIENT MOBILE SECURITY AMERICA, INC.
	 	 	 
	 	By:	           
	 	Name:	 
	 	Title:	 

  

    42 

     

    

 

IN
WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed and delivered as of the date first above written.

 

	 	TIMOTHY
    SHANAHAN AND NANCY SHANAHAN, JOINT TENANTS WITH RIGHT OF SURVIVORSHIP
	 	 	 
	 	By:	         
	 	Name:	 
	 	Title:	 

 

    43 

     

    

 

IN
WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed and delivered as of the date first above written.

 

	 	Shareholder
Representative:

	 	 
	 	 
	 	Michael
    Orlando

 

    44 

     

    

 

IN
WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed and delivered as of the date first above written.

 

	 	Michael
    Orlando
	 	 
	 	 
	 	 
	 	Scott
    Stevelinck
	 	 
	 	 
	 	 
	 	Michael
    Walsh
	 	 
	 	 
	 	 
	 	Laura
    Marion
	 	 
	 	 
	 	 
	 	Chris
    Orlando
	 	 
	 	 
	 	 
	 	Brad
    Snyder
	 	 
	 	 
	 	 
	 	Benjamin
    Walford
	 	 
	 	 
	 	 
	 	Steven
    Kurtz
	 	 
	 	 
	 	 
	 	Brendan
    Walsh
	 	 
	 	 
	 	 
	 	J.
    Michael Bradley
	 	 
	 	 
	 	 
	 	Other
    Holders
	 	 
	 	 

 

 

 45Exhibit

Exhibit 4.01

Xilinx, Inc.

SECOND SUPPLEMENTAL INDENTURE

Dated as of May 30, 2017

U.S. Bank National Association
Trustee

    

Second Supplemental Indenture dated as of May 30, 2017 (the “Supplemental Indenture”) between Xilinx, Inc., a Delaware corporation (the “Company”), and U.S. Bank National Association, as trustee (the “Trustee”).
RECITALS
A.    The Company and The Bank of New York Mellon Trust Company, N.A. executed and delivered an Indenture, dated as of June 14, 2007 (the “Base Indenture”), to provide for the issuance by the Company from time to time of debt securities evidencing its indebtedness, and the Trustee shall, upon execution of this Supplemental Indenture, be Trustee under the Base Indenture with respect to the Notes.  The Base Indenture, as supplemented and amended by this Supplemental Indenture, is herein referred to as the “Indenture.”
B.    The Company has authorized the issuance of $750,000,000 aggregate principal amount of 2.950% Senior Notes due 2024 (the “Notes”).
C.    Pursuant to the Base Indenture, the Company may appoint separate trustees under the Base Indenture with respect to different series of Securities issued thereunder, and the Company desires to appoint U.S. Bank National Association as Trustee, Security Registrar, Paying Agent and Authenticating Agent with respect to the Notes  and U.S. Bank National Association wishes to accept such appointment. 
D.    The Company desires to enter into this Supplemental Indenture pursuant to Section 901 of the Base Indenture to establish the form or terms of the Notes as permitted by Section 201 and Section 301 of the Base Indenture, to appoint the Trustee for the Notes under the Indenture and to make certain other amendments to the Base Indenture pursuant to Section 901 thereof, as hereinafter provided.
E.    All things necessary to make this Supplemental Indenture a valid and legally binding agreement according to its terms have been done.
NOW, THEREFORE, for and in consideration of the foregoing premises, the Company and the Trustee mutually covenant and agree for the equal and proportionate benefit of the respective Holders from time to time of the Notes as follows:
ARTICLE I
Section 1.1.    Appointment of Trustee for the Notes. Pursuant to Section 301 of the Base Indenture, the Company hereby appoints, and U.S. Bank National Association accepts its appointment, as Trustee under the Indenture with respect to the Notes and as Security Registrar, Paying Agent and Authenticating Agent for the Notes (but not, in each case, for any other series of Outstanding Securities). For the avoidance of doubt, U.S. Bank National Association shall be entitled to all of the rights, privileges and immunities granted to the Trustee under the Base Indenture.
Section 1.2.    Terms of the Notes.

2

There is hereby created and designated a series of Securities under the Base Indenture titled “2.950% Senior Notes due 2024” The following terms relate to the Notes:
(1)The Notes shall constitute a separate series of Securities under the Indenture having the title “2.950% Senior Notes due 2024.” 
(2)    The aggregate principal amount of the Notes (the “Initial Notes”) that may be initially authenticated and delivered under the Indenture shall be $750,000,000. The Company may from time to time, without the consent of the Holders of the Notes, issue additional Notes (in any such case “Additional Notes”) having the same ranking and the same interest rate, maturity and other terms as the Initial Notes. Any Additional Notes shall constitute a single series under the Indenture, provided that if such Additional Notes are not fungible with the Initial Notes for U.S. federal income tax purposes, the applicable Additional Notes will have one or more separate CUSIP numbers. All references to the Notes shall include the Initial  Notes and any Additional Notes, unless the context otherwise requires. The aggregate principal amount of Additional Notes shall be unlimited.
(3)    The entire outstanding principal of the Notes shall be payable on June 1, 2024, unless redeemed in accordance with ‎Section 1.5 of this Supplemental Indenture or repurchased prior to such Stated Maturity.
(4)    The rate at which the Notes shall bear interest shall be 2.950% per year. The date from which interest shall accrue on the Notes shall be May 30, 2017, or the most recent Interest Payment Date to which interest has been paid or provided for. The Interest Payment Dates for the Notes shall be June 1 and December 1 of each year, beginning December 1, 2017. Interest shall be payable on each Interest Payment Date to the holders of record at the close of business on May 15 and November 15 prior to each Interest Payment Date (in connection with the Notes, a “Regular Record Date”). The basis upon which interest shall be calculated shall be that of a 360-day year consisting of twelve 30-day months.
(5)    The Notes shall be issuable in whole in the form of one or more registered Global Securities, and the Depository for such Global Securities shall be The Depository Trust Company, New York, New York (“Depositary”). All references to the Depositary in this Supplemental Indenture shall be deemed references to “Depository” or “U.S. Depository” in the Base Indenture, unless the contact otherwise requires. The Notes shall be substantially in the forms attached hereto as Exhibit A, the terms of which are herein incorporated by reference. The Notes shall be denominated in Dollars and shall be issuable in minimum denominations of $2,000 or any integral multiple of $1,000 in excess thereof.
(6)    The Notes may be redeemed at the option of the Company prior to their Stated Maturity, as provided in ‎Section 1.5.
(7)    The Notes will not have the benefit of any sinking fund.
(8)    Except as provided herein, the Holders of the Notes shall have no special rights in addition to those provided in the Base Indenture upon the occurrence of any particular events.

3

(9)    The Notes will be senior unsecured obligations of the Company and will rank equal in right of payment to all of the Company’s other existing and future senior unsecured indebtedness and among themselves.
(10)    The Notes are not convertible into shares of common stock or other securities of the Company.
(11)    The restrictive covenants set forth in ‎Section 1.6 shall be applicable to the Notes.
(12)    The Notes are not repayable at the option of the Holders except as provided in Section ‎1.6.3.
(13)    The Notes are initially to be issued as global Securities.
(14)    The Trustee, Security Registrar, Paying Agent and Authenticating Agent shall be U.S. Bank National Association.
Except as otherwise provided in Article II hereof, the changes, modifications and supplements to the Base Indenture effected by this Supplemental Indenture shall be applicable only with respect to, and govern the terms of, the Notes and shall not apply to any other series of Securities that may be issued under the Base Indenture unless a supplemental indenture with respect to such other series of Securities specifically incorporates such changes, modifications and supplements.
Section 1.3.    Defined Terms.
Capitalized terms used but not otherwise defined herein shall have the meanings assigned to them in the Base Indenture. As used herein, the following additional defined terms shall have the following meanings with respect to the Notes only:
“Applicable Par Call Date” means April 1, 2024. 
“Applicable Procedures”, with respect to any transfer or exchange of or for beneficial interests in any Global Security for a series of Securities, means the rules and procedures of the Depositary, Euroclear and Clearstream that apply to such transfer or exchange at the relevant time.
“Attributable Debt” with regard to a sale and lease-back transaction of Principal Property means the lesser of:
(1)    the fair market value of such Principal Property as determined in good faith by the Board of Directors;
or
(2)    discounted present value (discounted at a rate per annum equal to the average interest borne by all outstanding debt securities issued under this Indenture 

4

(which may include debt securities in addition to the Notes) determined on a weighted average basis and compounded semi-annually) of all net rentals under the lease.
“Bankruptcy Law” has the meaning set forth in Section ‎1.7.1.
“Board of Directors” means the Board of Directors of the Company or any duly authorized committee of such Board of Directors.
“Business Day,” with respect to the Notes, means any day other than Saturday, Sunday or a day on which Federal or State banking institutions in the Borough of Manhattan, The City of New York, or in the city where the office or agency for payment on the Notes is maintained pursuant to Section 1002 of the Base Indenture, are authorized or obligated by law, executive order or regulation to close.
“Capital Stock” means (1) in the case of a corporation, any and all shares, interests, participations, rights or other equivalents (however designated and whether or not voting) of corporate stock, including each class of common stock and preferred stock of such Person; (2) in the case of an association or business entity, any and all shares, interests, participations, rights or other equivalents (however designated and whether or not voting) of such Person; and (3) in the case of a partnership or limited liability company, partnership or membership interests (whether general or limited).
“Change of Control” means the occurrence of any one or more of the following events: (1) the direct or indirect sale, lease, transfer, conveyance or other disposition (other than by way of merger or consolidation), in one or a series of related transactions, of all or substantially all of the Company’s assets and the assets of the Company’s Subsidiaries taken as a whole to any “Person” (as that term is used in Section 13(d)(3) of the Exchange Act) other than to the Company or one or more of the Company’s direct or indirect Subsidiaries; (2) the consummation of any transaction (including, without limitation, any merger or consolidation) the result of which is that any “person” or “group” of related persons (as such terms are used in Section 13(d)(3) of the Exchange Act) becomes the “beneficial owner” (as defined in Rules 13d-3 and 13d-5 under the Exchange Act), directly or indirectly, of a majority of the total voting power of the Company’s Voting Stock; provided, however, that a Person shall not be deemed beneficial owner of, or to own beneficially, (A) any securities tendered pursuant to a tender or exchange offer made by or on behalf of such Person or any of such Person’s affiliates until such tendered securities are accepted for purchase or exchange thereunder, or (B) any securities if such beneficial ownership (i) arises solely as a result of a revocable proxy delivered in response to a proxy or consent solicitation made pursuant to the applicable rules and regulations under the Exchange Act, and (ii) is not also then reportable on Schedule 13D (or any successor schedule) under the Exchange Act; (3) the Company consolidates with, or merges with or into, any Person, or any Person consolidates with, or merges with or into, the Company, in any such event pursuant to a transaction in which any of the Company’s outstanding Voting Stock or the outstanding Voting Stock of such other Person is converted into or exchanged for cash, securities or other property, other than any such transaction where the shares of the Company’s Voting Stock outstanding immediately prior to such transaction constitute, or are converted into or exchanged for, a majority of the Voting Stock of the surviving Person or any direct or indirect 

5

parent company of any surviving Person immediately after giving effect to such transaction; (4) the first day on which the majority of the members of the Board of Directors cease to be Continuing Directors; or (5) the adoption by the Board of Directors or the Company’s stockholders of a plan relating to the Company’s liquidation or dissolution.
Notwithstanding the foregoing, a transaction will not be deemed to involve a Change of Control if the Company becomes a direct or indirect wholly-owned Subsidiary of a holding company and the direct or indirect holders of the Voting Stock of such holding company immediately following that transaction are substantially the same, and in substantially the same proportion, as the holders of the Company’s Voting Stock immediately prior to that transaction.
“Change of Control Offer” has the meaning set forth in Section ‎1.6.3(a).
“Change of Control Payment” has the meaning set forth in Section ‎1.6.3(a).
“Change of Control Payment Date” has the meaning set forth in Section ‎1.6.3(a).
“Change of Control Triggering Event” means the occurrence of both a Change of Control and a Rating Event.
“Clearstream” means Clearstream Bank, S.A., or its successors.
“Comparable Treasury Issue” means the United States Treasury security selected by an Independent Investment Banker as having an actual or interpolated maturity comparable to the remaining term of the Notes to be redeemed that would be utilized, at the time of selection and in accordance with customary financial practice, in pricing new issues of corporate debt securities of comparable maturity to the remaining term of the Notes to be redeemed.
“Comparable Treasury Price” means, with respect to any Redemption Date (1) the average of the Reference Treasury Dealer Quotations for such Redemption Date, after excluding the highest and lowest of the Reference Treasury Dealer Quotations, (2) if the Independent Investment Banker obtains fewer than four Reference Treasury Dealer Quotations, the average of all of such quotations or (3) if only one Reference Treasury Dealer Quotation is received, such quotation.
“Consolidated Net Tangible Assets” means, at any date on which the Company effects a transaction requiring such Consolidated Net Tangible Assets to be measured hereunder, the total assets (less applicable reserves) appearing on the Company’s most recent consolidated balance sheet, prepared in accordance with GAAP, after deducting: (1) total current liabilities, excluding notes and loans payable, current maturities of long-term indebtedness, and current maturities of capital leases; and (2) intangible assets, to the extent included in total assets.
“Continuing Director” means, as of any date of determination, any member of the Board of Directors who: (1) was a member of the Board of Directors on the date of this Supplemental Indenture; or (2) was nominated for election, elected or appointed to the Board of Directors with the approval of a majority of the Continuing Directors who were members of the Board of 

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Directors at the time of such nomination, election or appointment (either by specific vote or by approval by the Board of Directors in the Company’s proxy statement in which such member was named as a nominee for election as a director without objection by the Board of Directors to such nomination).  The Board of Directors may approve, for purposes of this definition, a slate of stockholder nominated directors without endorsing them, or while simultaneously recommending and endorsing its own slate instead.  
“Corporation” includes corporations and, except for purposes of Article Eight of the Base Indenture and this Supplemental Indenture, limited liability companies, associations, companies (other than limited liability companies) and business trusts.
“Custodian” has the meaning set forth in Section ‎1.7.1.
“Definitive Security” means a certificated Note registered in the name of the Holder thereof and issued in accordance with Section 201 of the Base Indenture.
“Euroclear” means Euroclear Bank S.A./N.V., or its successor, as operator of the Euroclear System.
“Event of Default”, with respect to the Notes, means any event specified in Section ‎1.7.1, continued for the period of time, if any, therein designated.
“GAAP” means generally accepted accounting principles in the United States as in effect from time to time, including without limitation, those set forth in the Accounting Standards Codification of the Financial Accounting Standards Board or in such other statements by such other entity as have been approved by a significant segment of the accounting profession.
“Global Security”, with respect to the Notes, means a Note executed by the Company and delivered by the Trustee to the Depositary or pursuant to the Depositary’s instruction, all in accordance with the Base Indenture, which shall be registered in the name of the Depositary or its nominee. References to “Global Security” in this Supplemental Indenture shall be deemed to include references to “global Security” or “Security in global form” in the Indenture. 
“Indebtedness” of any specified Person means, without duplication, any indebtedness in respect of borrowed money or that is evidenced by bonds, notes, debentures or similar instruments.
“Independent Investment Banker” means one of the Reference Treasury Dealers appointed by the Company.
“Indirect Participant” means any entity that, with respect to DTC, clears through or maintains a direct or indirect custodial relationship with a Participant.
“Interest Payment Date” means the stated due date of an installment of interest on the Notes.

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“Investment Grade” means a rating of Baa3 or better by Moody’s (or its equivalent under any successor rating category of Moody’s) and an equivalent rating of another “nationally recognized statistical rating organization” within the meaning of Section 3(a)(62) of the Exchange Act, if such other organization shall provide a rating of the Notes, or, if applicable, the equivalent investment grade credit rating from any Substitute Rating Agency.
“Lien” means a mortgage, security interest, pledge, lien, charge or other encumbrance of any kind (including any conditional sale or other title retention agreement and any agreement to give any security interest).
“Moody’s” means Moody’s Investors Service, Inc., a subsidiary of Moody’s Corporation, and its successors.
“Participant”, with respect to the Depositary, Euroclear or Clearstream, means a Person who has an account with the Depositary, Euroclear or Clearstream, respectively (and, with respect to DTC, shall include Euroclear and Clearstream).
“Permitted Reinvested Attributable Debt” means any Attributable Debt arising from a sale and lease-back transaction with respect to which the net proceeds from the sale are applied in accordance with the first paragraph of Section ‎1.6.2.
“Principal Property” means the land, improvements, buildings, fixtures and equipment (including any leasehold interest therein) owned by the Company or a Restricted Subsidiary located in the United States that constitutes the Company’s principal corporate office, any manufacturing plant or any manufacturing facility and that has a gross book value (including related land, machinery and equipment without deduction of any depreciation reserves) of not less than 1.00% of the Company’s Consolidated Net Tangible Assets as of the determination date. Principal Property does not include any Property that the Board of Directors has determined in good faith not to be of material importance to the business conducted by the Company and its Subsidiaries, taken as a whole.
“Property” means any property or asset, whether real, personal or mixed, or tangible or intangible, including shares of capital stock.
“Rating Agency” means Moody’s and any other “nationally recognized statistical rating organization” within the meaning of Section 3(a)(62) of the Exchange Act if such other organization shall provide a rating of the Notes, and if either of Moody’s or such other organization that provides a rating of the Notes ceases to rate the Notes or fails to make a rating of the Notes publicly available for reasons outside of the Company’s control, a Substitute Rating Agency in lieu thereof.
“Rating Event” means the Notes cease to be rated Investment Grade by (i) each Rating Agency, if Moody’s and one or more other Rating Agencies provide a rating of the Notes or (ii) Moody’s, if no other Rating Agency provides a rating of the Notes, on any day during the period (the “Trigger Period”) commencing on the earlier of (a) the first public notice of the occurrence of a Change of Control or (b) the public announcement by the Company of its intention to effect 

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a Change of Control, and ending 60 days following consummation of such Change of Control (which period shall be extended so long as the rating of the Notes is under publicly announced consideration for a possible rating downgrade by any of the Rating Agencies on such 60th day, such extension to last with respect to each such Rating Agency until the date on which such Rating Agency considering such possible downgrade either (x) rates the Notes below Investment Grade or (y) publicly announces that it is no longer considering the Notes for possible downgrade, provided that no such extension will occur if on such 60th day the Notes are rated Investment Grade by at least one of such Rating Agencies in question and are not subject to review for possible downgrade by such Rating Agency). If Moody’s and one or more other Rating Agencies have provided a rating of the Notes, and any of such Rating Agencies is not providing a rating of the Notes on any day during the Trigger Period for any reason, the rating of such Rating Agency shall be deemed to have ceased to be rated Investment Grade during the Trigger Period.
“Redemption Date” means, when used with respect to any Note to be redeemed, the date fixed for such redemption by or pursuant to this Indenture. Such date must be a Business Day. 
“Redemption Price” means, when used with respect to any Note to be redeemed, the price at which it is to be redeemed pursuant to this Indenture.
“Reference Treasury Dealer” means (a) J.P. Morgan Securities LLC (or one of its affiliates that is a primary U.S. Government securities dealer) and its respective successors; provided, however, that if the foregoing ceases to be a primary U.S. Government securities dealer, the Company will substitute another primary U.S. Government securities dealer, and (b) three other nationally recognized investment banking firms selected by the Company that are primary U.S. Government securities dealers.
“Reference Treasury Dealer Quotations” means, with respect to each Reference Treasury Dealer and any Redemption Date, the average, as determined by the Independent Investment Banker, of the bid and ask prices for the Comparable Treasury Issue (expressed as a percentage of its principal amount) quoted in writing to the Independent Investment Banker by such Reference Treasury Dealer at 5:00 p.m., New York City time, on the third Business Day preceding such Redemption Date.
“Remaining Scheduled Payments” means, with respect to each Note to be redeemed, the remaining scheduled payments of the principal thereof and interest thereon that would be due after the related Redemption Date but for such redemption; provided, however, that if such Redemption Date is not an Interest Payment Date with respect to such Note, the amount of the next succeeding scheduled interest payment thereon will be reduced by the amount of interest accrued thereon to such Redemption Date.
“Restricted Subsidiary” means any Subsidiary that owns any Principal Property other than (1) any Subsidiary primarily engaged in financing receivables or in the finance business; or (2) any of the Company’s less than 80%-owned Subsidiaries if the common stock of such Subsidiary is traded on any national securities exchange or quoted on the Nasdaq Global Market or on the over-the-counter markets.

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“Secured Debt” means any of the Company’s Indebtedness or any Indebtedness of a Restricted Subsidiary, in each case secured by a Lien on either any Principal Property or on the stock of a Restricted Subsidiary. Secured Debt does not include Indebtedness secured by:
(1)    Liens on Property existing at the time of acquisition of the Property by the Company or any Restricted Subsidiary, whether or not assumed;
(2)    Liens on Property of a Person existing at the time such Person becomes a Restricted Subsidiary provided that such Liens were not incurred in anticipation of such Person becoming a Restricted Subsidiary and do not extend to any other Property of the Company or any other Restricted Subsidiary (other than direct or indirect subsidiaries of the Restricted Subsidiary so acquired);
(3)    Liens to secure payment of all or any part of the cost of acquisition, construction, development or improvement of any Property, or to secure any Indebtedness to finance such cost of acquisition, construction, development or improvement that is incurred within 24 months after the later of (i) the completion of the acquisition, construction, development or improvement thereof, and (ii) the placing in operation of such Property or of such Property as so constructed, developed or improved;
(4)    Liens to secure Indebtedness owing to the Company or to a Restricted Subsidiary;
(5)    Liens existing at the date of the Indenture;
(6)    Liens on Property of an entity existing at the time such entity is merged or consolidated with the Company or a Restricted Subsidiary provided that such Liens were not incurred in anticipation of such merger or consolidation and do not extend to any Property of the Company or any other Restricted Subsidiary other than that of the Person merged into or consolidated with the Company or a Restricted Subsidiary and its direct or indirect subsidiaries;
(7)    Liens on Property of an entity at the time of a sale or lease of the Property of such entity as an entirety or substantially as an entirety to the Company or a Restricted Subsidiary provided that such Liens were not incurred in anticipation of such sale or lease and do not extend to any other Property (other than any additions, accessions, parts, improvements and attachments thereto, and the products and proceeds of the Property so acquired);
(8)    Liens incurred to finance the acquisition or construction of Property secured by liens in favor of the United States or a political subdivision of the United States;
(9)    Liens for taxes, assessments or other governmental charges not yet due or payable or not overdue for a period of more than 60 days or that are being contested by the Company or a Restricted Subsidiary, and for which the Company maintains adequate reserves in accordance with GAAP;
(10)    Liens incurred in connection with an asset acquisition or a project financed with a non-recourse obligation;

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(11)    Liens in favor of materialmen, mechanics, workmen or repairmen, landlord’s Liens for rent or other similar Liens arising, in each case, in the ordinary course of business in respect of obligations which are not overdue or which are being contested by the Company or any Restricted Subsidiary in good faith and by appropriate proceedings;
(12)    Liens consisting of zoning restrictions, licenses, easements and restrictions on the use of real property and minor irregularities that do not materially impair the use of the real property;
(13)    Liens arising by reason of deposits with, or giving any form of security to, any governmental agency or any body created or approved by law or government regulation; 
(14)    Liens created by or resulting from any litigation or other proceeding that is being contested in good faith by appropriate proceedings, including Liens arising out of judgments or awards against the Company or any Restricted Subsidiary with respect to which the Company or any of its Subsidiaries is in good faith prosecuting an appeal or proceedings for review for which the time to make an appeal has not yet expired, and Liens relating to final unappealable judgments that are satisfied within 60 days of the date of judgment or Liens incurred by the Company or any Restricted Subsidiary for the purposes of obtaining a stay or discharge in the course of any litigation proceeding to which the Company or any of its Subsidiaries is a party;
(15)    Liens on receivables from customers sold to third parties pursuant to credit arrangements in the ordinary course of business;
(16)    Liens relating to hedging and similar arrangements entered into in the ordinary course of business, including without limitation interest rate or foreign currency hedging arrangements;
(17)    Liens incurred or deposits made by the Company or its Restricted Subsidiaries in the ordinary course of business in connection with workers’ compensation, unemployment insurance and other types of social security, or to secure the performance of tenders, statutory obligations, bids, leases, government contracts, performance and return-of-money bonds or other similar obligations (exclusive of obligations for the payment of borrowed money);
(18)    Liens on property incurred in sale and lease-back transactions permitted under Section ‎1.6.2.; or
(19)    Liens constituting any extension, renewal or replacement of any Liens listed above to the extent the principal amount of the indebtedness secured by such Lien is not increased (except to the extent of any premiums, fees or other costs associated with any such extension, renewal or replacement) and the Property encumbered by any such Lien is the same as or substantially similar in nature to the Property encumbered by the Lien being extended, renewed or replaced.
“Securities Act” means the Securities Act of 1933, as amended.

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“Substitute Rating Agency” means a “nationally recognized statistical rating organization” within the meaning of  Section 3(a)(62) of the Exchange Act, selected by the Company (as certified by a resolution of the Board of Directors or a committee thereof) as a replacement agency for Moody’s or any other Rating Agencies that provides a rating of the Notes.
“Treasury Rate” means, for any Redemption Date, the rate per annum equal to the semi-annual equivalent yield to maturity or interpolated maturity (on a day count basis), computed as of the third Business Day immediately preceding that Redemption Date, of the Comparable Treasury Issue, assuming a price for the Comparable Treasury Issue (expressed as a percentage of its principal amount) equal to the Comparable Treasury Price for that Business Day.
“Voting Stock” of any specified Person as of any date means the Capital Stock of such Person that is at the time entitled to vote generally in the election of the board of directors of such Person.
Section 1.4.    Payment, Transfer and Exchange.
1.4.1.    Registration of Transfer and Exchange.  The Trustee shall not be required to register the transfer of or exchange any Note selected for redemption in whole or in part, except the unredeemed portion of any Note being redeemed in part.
All Notes issued upon any registration of transfer or exchange of Notes shall be the valid obligations of the Company, evidencing the same indebtedness, and entitled to the same benefits under this Indenture, as the Notes surrendered upon such registration of transfer or exchange. Prior to such due presentment for the registration of a transfer of any Note, the Trustee, the Company, any Paying Agent and the Security Registrar may deem and treat the Person in whose name any Note is registered as the absolute owner of such Note for the purpose of receiving payment of principal of and interest on such Notes and for all other purposes, and none of the Trustee, the Company, the Paying Agent or the Security Registrar shall be affected by notice to the contrary. Notwithstanding the foregoing, nothing herein shall prevent the Company, the Trustee or any agent of the Company or the Trustee from giving effect to any written certification, proxy or other authorization furnished by the Depositary or impair, as between the Depositary and its Participants, the operation of customary practices of the Depositary governing the exercise of the rights of a holder of a beneficial interest in any Global Security.
All certifications, certificates and opinions of counsel which may be required to be submitted to the Trustee to effect a registration of transfer or exchange may be submitted by facsimile, PDF or other electronic means.
1.4.2.    Payment. The principal and interest on Notes represented by Global Securities will be payable to the Depositary or its nominee, as the case may be, as the sole registered owner and the sole Holder of the Global Securities represented thereby. Payments on the Global Securities will be made in U.S. dollars by wire transfer.

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If the Company issues Definitive Securities, the Holders of Definitive Securities will be able to receive payments of principal of and interest on their Notes at the office of the Company’s Paying Agent. Payment of principal of a Definitive Security may be made only against surrender of the Note to the Company’s Paying Agent. The Company has the option, however, of making payments of interest by wire transfer or by mailing checks to the address of the Holder appearing in the register of Note Holders maintained by the Security Registrar.
The Company will make any required interest payments to the Person in whose name a Note is registered at the close of business on the Regular Record Date for the interest payment.
1.4.3.    Transfer and Exchange of Beneficial Interests in the Global Securities. The transfer and exchange of beneficial interests in the Global Securities shall be effected through the Depositary, in accordance with the provisions of this Indenture and the Applicable Procedures. Beneficial interests in any Global Security may be transferred to Persons who take delivery thereof in the form of a beneficial interest in a Global Security.
Section 1.5.    Optional Redemption.
1.5.1.    The provisions of Article 11 of the Base Indenture, as amended by the provisions of this Supplemental Indenture, shall apply to the Notes.
1.5.2.    At the Company’s option, the Notes may be redeemed or purchased, in each case, in whole or in part at any time or from time to time prior to the Stated Maturity of the Notes. 
Upon such redemption of any Notes pursuant to this Section ‎1.5.2 prior to the Applicable Par Call Date, the Company shall pay a Redemption Price equal to the greater of:
(a)    100% of the aggregate principal amount of the Notes to be redeemed; and
(b)    the sum of the present values of the Remaining Scheduled Payments of the Notes to be redeemed, as the case may be, discounted to the Redemption Date on a semi-annual basis (assuming a 360-day year consisting of twelve 30-day months) at the Treasury Rate plus 15 basis points,
plus, in the case of ‎(a) or ‎(b) above, accrued and unpaid interest thereon to, but excluding, the Redemption Date, subject to the rights of Holders of Notes on the relevant Regular Record Date to receive interest due on the relevant Interest Payment Date. The Company shall calculate or cause the Redemption Price to be calculated under this Section ‎1.5.2 for any redemption prior to the Applicable Par Call Date and the Trustee shall have no duty to calculate or verify the Company’s calculation of such Redemption Price.
Upon such redemption of any Notes pursuant to this Section ‎1.5.2 on or after the Applicable Par Call Date, the Company shall pay a Redemption Price equal to 100% of the aggregate principal amount of the Notes to be redeemed, plus accrued and unpaid interest thereon to, but excluding, the Redemption Date, subject to the rights of Holders of Notes on the relevant Regular Record Date to receive interest due on the relevant Interest Payment Date.

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1.5.3.    Unless the Company defaults in payment of the Redemption Price, on and after the Redemption Date for the Notes, interest shall cease to accrue on the Notes or portions thereof called for redemption. On or before the Redemption Date for the Notes, the Company shall deposit with the Trustee or a Paying Agent, funds sufficient to pay the Redemption Price of the Notes to be redeemed on the Redemption Date, and (except if the date fixed for redemption shall be an Interest Payment Date) accrued and unpaid interest, if any, thereon to, but excluding, the Redemption Date. If less than all of the Notes are to be redeemed, the Notes shall be redeemed in accordance with Section 1103 of the Base Indenture.
1.5.4.    Notice of any redemption shall be sent by first-class mail (or, in the case of Global Securities, in accordance with the accepted practices and procedures of the Depositary) at least 30 days but not more than 60 days before the Redemption Date to each registered Holder of the Notes to be redeemed. Such notice shall state, without limitation of the information specified in Section 1104 of the Base Indenture, the amount of Notes to be redeemed. 
1.5.5.    If the Company chooses to redeem less than all of the Notes of any series, selection of the Notes of such series for redemption will be made by the Trustee in accordance with Section 1103 of the Base Indenture by methods the Trustee shall deem fair and appropriate; provided, that if the Notes are in book-entry only form, interests in such Notes shall be selected for redemption by the Depositary in accordance with its standard procedures therefor.
1.5.6.    At any time, the Company may repurchase Notes in the open market and may hold such Notes or surrender such Notes to the Trustee for cancellation pursuant to Section 1108 of the Base Indenture.
Section 1.6.    Additional Covenants.
The following additional covenants shall apply with respect to the Notes so long as any of the Notes remain outstanding:
1.6.1.    Limitation on Liens.
The Company will not (nor will the Company permit any Restricted Subsidiary to) issue, incur, create, assume or guarantee any Secured Debt without securing the Notes equally and ratably with or prior to that Secured Debt unless the total amount of all Secured Debt and Attributable Debt (other than Permitted Reinvested Attributable Debt) with which the Notes are not at least equally and ratably secured would not exceed the greater of $400 million or 15% of the Company’s Consolidated Net Tangible Assets.
1.6.2.    Limitation on Sale and Lease-Back Transactions.
Subject to the following paragraph of this Section ‎1.6.2, the Company will not (nor will the Company permit any Restricted Subsidiary to) enter into any lease with a term longer than three years covering any of the Company’s or any Restricted Subsidiary’s Principal Property that is sold to any other Person in connection with that lease unless an amount equal to the net proceeds from the sale is applied within 270 days of such sale to the retirement of the Company’s 

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or any Restricted Subsidiary’s debt that is at least pari passu with the Notes (including, for avoidance of doubt, the Notes) or the purchase or development of Principal Property.
However, the Company or its Restricted Subsidiaries may enter into a sale and lease-back transaction with respect to Principal Property without being required to apply the net proceeds as required by the foregoing paragraph if the sum of the following amounts would not exceed the greater of $400 million or 15% of the Company’s Consolidated Net Tangible Assets:
(a)    the Attributable Debt (other than Permitted Reinvested Attributable Debt) with respect to all such sale and lease-back transactions entered into after the date of the issuance of the Notes; and
(b)    the total amount of Secured Debt.
1.6.3.    Purchase of Notes upon a Change of Control Triggering Event.
(a)    Upon the occurrence of a Change of Control Triggering Event, unless the Company has exercised its option to redeem the respective series of Notes as described above under ‎Section 1.5, each Holder of Notes will have the right to require that the Company purchase all or a portion (equal to $2,000 or an integral multiple of $1,000 in excess thereof) of such Holder’s Notes pursuant to the offer described below (the “Change of Control Offer”), at a purchase price equal to 101% of the aggregate principal amount thereof plus accrued and unpaid interest, if any, to, but excluding, the date of purchase (the “Change of Control Payment”), subject to the rights of Holders of Notes on the relevant Regular Record Date to receive interest due on the relevant Interest Payment Date.
Within 30 days following the date upon which the Change of Control Triggering Event occurred or, at the Company’s option, prior to any Change of Control but after public announcement of the transaction that constitutes or may constitute the Change of Control, the Company must send a notice to each Holder of Notes, with a copy to the Trustee, which notice shall govern the terms of the Change of Control Offer. Such notice shall state, among other things, the purchase date, which must be no earlier than 30 days nor later than 60 days from the date of such notice or, if the notice is delivered prior to the Change of Control, no earlier than 30 days and no later than 60 days from the date on which the Change of Control Triggering Event occurs, other than as may be required by law (the “Change of Control Payment Date”). The notice will, if sent prior to the date of consummation of the Change of Control, state that the Change of Control Offer is conditioned on the Change of Control Triggering Event occurring on or prior to the Change of Control Payment Date. Holders of Definitive Securities electing to have a Note purchased pursuant to a Change of Control Offer will be required to surrender the Notes, with the form entitled “Option of Holder to Elect Purchase” on the reverse of the Note completed, to the Paying Agent at the address specified in the notice, or Holders of Global Securities must transfer their Notes to the Paying Agent by book-entry transfer pursuant to the applicable procedures of the Paying Agent, prior to the close of business on the third Business Day prior to the Change of Control Payment Date.

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(b)    On the Change of Control Payment Date, the Company shall, to the extent lawful:
(i)    accept for payment all Notes or portions of Notes properly tendered pursuant to the Change of Control Offer; and
(ii)    deposit with the Paying Agent an amount equal to the Change of Control Payment in respect of all Notes or portions of Notes properly tendered.
(c)    The Company will not be required to make a Change of Control Offer if a third party makes such an offer in the manner and at the times required and otherwise in compliance with the requirements for such an offer made by the Company, and such third party purchases all Notes properly tendered and not withdrawn under its offer. In addition, the Company will not repurchase any Notes if there has occurred and is continuing on the Change of Control Payment Date an Event of Default under this Indenture, other than a Default in the payment of the Change of Control Payment upon a Change of Control Triggering Event.
(d)    The Company will comply with any applicable requirements of Rule 14e-1 under the Exchange Act, and any other applicable requirements of securities laws and regulations thereunder to the extent such laws and regulations are applicable in connection with the purchase of Notes pursuant to a Change of Control Offer. To the extent that the provisions of any such securities laws or regulations are applicable and conflict with this Section ‎1.6.3, the Company will comply with those securities laws and regulations and shall not be deemed to have breached its obligations under this Section ‎1.6.3 by virtue of any such conflict.
Section 1.7.    Defaults and Remedies.
1.7.1.    Events of Default.
This Section ‎1.7.1 shall replace Section 501 of the Base Indenture with respect to the Notes only, and references to “Section 501” and “Section 501(4)” in the Base Indenture shall be deemed to refer to Section ‎1.7.1 and Section ‎1.7.1(d) of this Supplemental Indenture, respectively.
Each of the following is an “Event of Default” with respect to a series of Notes:
(a)    default in the payment of any interest on any Note of such series when it becomes due and payable, and continuance of that default for a period of 30 days (unless the entire amount of such payment (including interest on such payment) is deposited by the Company with the Trustee or with a Paying Agent prior to the expiration of such 30-day period);
(b)    default in the payment of principal of, or any premium on, any Note of such series when due and payable;
(c)    failure to make a Change of Control Payment when due and payable in accordance with the terms of this Supplemental Indenture;

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(d)    default in the performance or breach of any other covenant by the Company in the Indenture (other than a covenant that has been included in the Indenture solely for the benefit of a Series of debt securities other than the Notes of such series), which default continues uncured for a period of 90 days after the Company receives, by registered or certified mail, written notice from the Trustee or the Company and the Trustee receive, by registered or certified mail, written notice from the Holders of not less than 25% in principal amount of the outstanding Notes of such series as provided in the Indenture;
(e)    the entry by a court having competent jurisdiction of:
(i)    an order for relief in respect of the Company in an involuntary proceeding under any Bankruptcy Law, which order shall remain unstayed and in effect for a period of 60 consecutive days; or
(ii)    a final and non-appealable order appointing a Custodian of the Company, or ordering the winding up or liquidation of the affairs of the Company, which order shall remain unstayed and in effect for a period of 60 consecutive days; or 
(f)    the commencement by the Company of a voluntary proceeding under any Bankruptcy Law or the consent by the Company to the entry of a decree or order for relief in an involuntary proceeding under any Bankruptcy Law or the filing by the Company of a consent to an order for relief in any involuntary proceeding under any Bankruptcy Law or to the appointment of a Custodian or the making by the Company of an assignment for the benefit of creditors.
The term “Bankruptcy Law” means Title 11, United States Code, or any similar federal or state law for the relief of debtors. The term “Custodian” means any custodian, receiver, trustee, assignee, liquidator or other similar official under any proceedings under any Bankruptcy Law.
In case the Trustee shall have proceeded to enforce any right with respect to a series of Notes and such proceedings shall have been discontinued or abandoned because of such rescission or annulment or for any other reason or shall have been determined adversely to the Trustee, then and in every such case, subject to any determination in such proceedings, the Company and the Trustee shall be restored respectively to their former positions and rights hereunder, and all rights, remedies and powers of the Company and the Trustee shall continue as though no such proceedings had been taken.
1.7.2.    Acceleration of Maturity; Recession and Annulment.
This Section ‎1.7.2 shall replace Section 5.02 of the Base Indenture with respect to the Notes only, and references to Section 5.02 in the Base Indenture shall be deemed to refer to 1.6.2 of this Supplemental Indenture.  If an Event of Default with respect to any series of Notes occurs and is continuing (other than an Event of Default referred to in Section ‎1.7.1(e) or ‎(f)), then the Trustee or the Holders of not less than 25% in principal amount of the outstanding Notes of such series may declare the principal amount of and accrued and unpaid interest, if any, on all Notes of such series to be due and payable immediately, by a notice in writing to the Company (and to 

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the Trustee if given by the Holders), and upon such declaration such principal amount and accrued and unpaid interest, if any, shall become immediately due and payable. In the case of an Event of Default referred to in Section ‎1.7.1(e) or ‎(f)), the principal of and accrued and unpaid interest, if any, on all outstanding Notes of such series will become and be immediately due and payable without any declaration or other act on the part of the Trustee or any Holder of outstanding Notes.
At any time after such a declaration of acceleration with respect to any series of Notes has been made and before a judgment or decree for payment of the money due has been obtained by the Trustee as provided in this Indenture, the Holders of a majority in principal amount of the outstanding Notes of such series, by written notice to the Company and the Trustee, may rescind and annul such a declaration and its consequences if all Events of Default with respect to the Notes of such series, other than the non-payment of accelerated principal and interest, if any, with respect to the Notes of such series, have been cured or waived as provided in this Indenture.
No such rescission shall affect any subsequent Event of Default or impair any right consequent thereon.
1.7.3.    Limitation on Suits.
This Section ‎1.7.3 shall replace Section 507 of the Base Indenture with respect to the Notes only, and references to “Section 507” in the Base Indenture shall be deemed to refer to this Section ‎1.7.3.
No Holder of any Notes shall have any right to institute any proceeding, judicial or otherwise, with respect to this Indenture, or for the appointment of a receiver or trustee, or for any other remedy hereunder, unless:
(i)    such Holder has previously given written notice to the Trustee of a continuing Event of Default with respect to the Notes; and
(ii)    the Holders of at least 25% in principal amount of the outstanding Notes of such series shall have made written request to the Trustee, and offered indemnity or security satisfactory to the Trustee, to institute proceedings in respect of such Event of Default in its own name as Trustee under the Indenture, and the Trustee has not received from the Holders of a majority in principal amount of the outstanding Notes of such series a direction inconsistent with such written request and has failed to institute such proceeding within 60 days after receipt of such notice, request and offer of indemnity and security.
Notwithstanding the foregoing, the holder of any Note shall have an absolute and unconditional right to receive payment of the principal of and interest, if any, on such Note on or after the due dates expressed in such Note and to institute suit for the enforcement of payment.  
ARTICLE II
AMENDMENTS TO BASE INDENTURE

18

Section 2.1.    Amendment to Section 105.
Section 105 of the Base Indenture is hereby amended by adding the following new paragraphs at the end thereof:
“The Trustee agrees to accept and act upon instructions or directions pursuant to this Indenture sent by unsecured e-mail, facsimile transmission or other similar unsecured electronic methods.  If the party elects to give the Trustee e-mail or facsimile instructions (or instructions by a similar electronic method) and the Trustee in its discretion elects to act upon such instructions, the Trustee’s understanding of such instructions shall be deemed controlling. The Trustee shall not be liable for any losses, costs or expenses arising directly or indirectly from the Trustee’s reliance upon and compliance with such instructions notwithstanding such instructions conflict or are inconsistent with a subsequent written instruction. The party providing electronic instructions agrees to assume all risks arising out of the use of such electronic methods to submit instructions and directions to the Trustee, including without limitation the risk of the Trustee acting on unauthorized instructions, and the risk or interception and misuse by third parties.
Notwithstanding anything to the contrary contained herein, as long as the Securities of any Series are in the form of a global Security, notice to the Holders may be made electronically in accordance with procedures of the Depository.”
Section 2.2.    Amendment to Section 402.
For purposes of this Supplemental Indenture, references in Section 402(4) and the penultimate paragraph of Section 402 of the Base Indenture to “Holders” shall be deemed, in the case of Notes represented by a Global Security, to include beneficial owners of interests in such Global Security. 
Section 2.3.    Amendment to Section 602.
Section 602 of the Base Indenture is hereby amended by deleting “and” at the end of Section 602(16) thereof, deleting “.” at the end of Section 602(17) and adding “; and” in place thereof and adding the following new Section 602(18):
“(18)    in no event shall the Trustee be responsible or liable for special, indirect, or consequential loss or damage of any kind whatsoever (including, but not limited to, loss of profit) irrespective of whether the Trustee has been advised of the likelihood of such loss or damage and regardless of the form of action.”
Section 2.4.    Amendment to Section 1103.
Section 1103 of the Base Indenture is hereby amended by deleting “.” at the end thereof and by adding the following:

19

“; provided, further, that if the Securities of any Series are global Securities in book-entry only form, the particular Securities to be redeemed shall be selected for redemption by the Depository in accordance with its standard procedures therefor.” 
ARTICLE III
MISCELLANEOUS
Section 3.1.    Confirmation of Indenture.
The Base Indenture, as supplemented and amended by this Supplemental Indenture, is in all respects ratified and confirmed, and the Base Indenture, this Supplemental Indenture and all indentures supplemental thereto with respect to the Notes shall be read, taken and construed as one and the same instrument.
Section 3.2.    Governing Law.
THIS SUPPLEMENTAL INDENTURE AND THE NOTES SHALL BE DEEMED A CONTRACT MADE UNDER THE INTERNAL LAWS OF THE STATE OF NEW YORK, AND FOR ALL PURPOSES SHALL BE CONSTRUED IN ACCORDANCE WITH THE LAWS OF SAID STATE WITHOUT REGARD TO CONFLICTS OF LAWS PRINCIPLES THAT WOULD REQUIRE THE APPLICATION OF ANY OTHER LAW.
Section 3.3.    Severability.
In case any provision in this Supplemental Indenture or in the Notes shall be invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining provisions shall not in any way be affected or impaired thereby.
Section 3.4.    Counterparts.
This Supplemental Indenture may be executed in any number of counterparts, each of which shall be an original, but shall together constitute one and the same instrument. The exchange of copies of this Supplemental Indenture and of signature pages by facsimile or PDF transmission shall constitute effective execution and delivery of this Supplemental Indenture as to the parties hereto and may be used in lieu of the original Supplemental Indenture for all purposes.  Signatures of the parties hereto transmitted by facsimile or PDF shall be deemed to be their original signatures for all purposes.
Section 3.5.    No Benefit.
Nothing in this Supplemental Indenture, express or implied, shall give to any Person other than the parties hereto and their successors or assigns, and the Holders of the Notes, any benefit or legal or equitable rights, remedy or claim under this Supplemental Indenture or the Base Indenture.
Section 3.6.    Conflicts with Base Indenture.

20

In the event that any provision of this Supplemental Indenture limits, qualifies or conflicts with a provision of the Base Indenture, such provision of the Supplemental Indenture will control.
Section 3.7.    Disclaimer.
The recitals contained herein shall be taken as the statements of the Company, and the Trustee assumes no responsibility for their correctness. The Trustee makes no representation as to the validity or sufficiency of this Supplemental Indenture, other than its certificate of authentication on the Notes.
Section 3.8.    Notices to the Trustee; Corporate Trust Office.  
As of the date of this Supplemental Indenture, the Corporate Trust Office of the Trustee shall be, and notices to the Trustee with respect to the Notes shall be given to it in accordance with Section 105 of the Base Indenture, at:
U.S. Bank National Association
Global Corporate Trust Services
One California Street, Suite 1000
San Francisco, California 94111
Attention:  H. Mazrae (Xilinx)
Facsimile: (415) 677-3768

Section 3.9.    USA PATRIOT Act.  The parties hereto acknowledge that in accordance with Section 326 of the USA PATRIOT Act, the Trustee, like all financial institutions and in order to help the government fight the funding of terrorism and money laundering, is required to obtain, verify and record information that identifies each person or legal entity that establishes a relationship or opens an account. The parties to this Supplemental Indenture agree that they will provide the Trustee with such information as it may request to satisfy the requirements of the USA PATRIOT Act.

21

IN WITNESS WHEREOF, the parties hereto have caused this Supplemental Indenture to be duly executed all as of the day and year first above written.

	
		
	XILINX, INC.

	 
	 

	 
	 

	By:
	/s/ Lorenzo A. Flores

	 
	Name: Lorenzo A. Flores

	 
	Title: Senior Vice President & 
Chief Financial Officer

	

	U.S. BANK NATIONAL ASSOCIATION, as Trustee

	 
	 

	 
	 

	By:
	/s/ Hamyd Mazrae

	 
	Name: Hamyd Mazrae

	 
	Title: Vice President

22

EXHIBIT A
FORM OF 2.950% SENIOR NOTES DUE 2024
THIS GLOBAL SECURITY IS HELD BY THE DEPOSITARY (AS DEFINED IN THE INDENTURE GOVERNING THIS SECURITY) OR ITS NOMINEE IN CUSTODY FOR THE BENEFIT OF THE BENEFICIAL OWNERS HEREOF, AND IS NOT TRANSFERABLE TO ANY PERSON UNDER ANY CIRCUMSTANCES EXCEPT THAT (I) THE TRUSTEE MAY MAKE ANY SUCH NOTATIONS HEREON AS MAY BE REQUIRED OR PERMITTED PURSUANT TO THE INDENTURE, (II) THIS GLOBAL SECURITY MAY BE EXCHANGED IN WHOLE BUT NOT IN PART PURSUANT TO SECTION 305 OF THE INDENTURE, (III) THIS GLOBAL SECURITY MAY BE DELIVERED TO THE TRUSTEE FOR CANCELLATION PURSUANT TO THE INDENTURE AND (IV) THIS GLOBAL SECURITY MAY BE TRANSFERRED TO A SUCCESSOR DEPOSITARY WITH THE PRIOR WRITTEN CONSENT OF THE COMPANY.
UNLESS AND UNTIL IT IS EXCHANGED IN WHOLE OR IN PART FOR SECURITIES IN DEFINITIVE FORM, THIS SECURITY MAY NOT BE TRANSFERRED EXCEPT AS A WHOLE BY THE DEPOSITARY TO A NOMINEE OF THE DEPOSITARY OR BY A NOMINEE OF THE DEPOSITARY TO THE DEPOSITARY OR TO ANOTHER NOMINEE OF THE DEPOSITARY OR BY THE DEPOSITARY OR ANY SUCH NOMINEE TO A SUCCESSOR DEPOSITARY OR A NOMINEE OF SUCH SUCCESSOR DEPOSITARY. UNLESS THIS GLOBAL SECURITY IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITARY TO THE COMPANY OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY SECURITY ISSUED IS REGISTERED IN THE NAME OF ANY ENTITY AS MAY BE REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITARY (AND ANY PAYMENT IS MADE TO SUCH ENTITY AS MAY BE REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITARY), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF HAS AN INTEREST HEREIN.

B-1

XILINX, INC.
2.950% SENIOR NOTES DUE 2024
	
			
	No. [     ]
	 
	$[     ]

CUSIP No. 983919 AJ0
Xilinx, Inc., a Delaware corporation (the “Company”), promises to pay to Cede & Co. or registered assigns, the principal sum of [     ] Dollars on June 1, 2024.
Interest Payment Dates: June 1 and December 1
Record Dates: May 15 and November 15
Each Holder of this Security (as defined below), by accepting the same, agrees to and shall be bound by the provisions hereof and of the Indenture described herein, and authorizes and directs the Trustee described herein on such holder’s behalf to be bound by such provisions. Each holder of this Security hereby waives all notice of the acceptance of the provisions contained herein and in the Indenture and waives reliance by such holder upon said provisions.
This Security shall not be entitled to any benefit under the Indenture, or be valid or become obligatory for any purpose, until the Certificate of Authentication hereon shall have been signed manually by or on behalf of the Trustee. The provisions of this Security are continued on the reverse side hereof, and such continued provisions shall for all purposes have the same effect as though fully set forth at this place.

B-2

IN WITNESS WHEREOF, the Company has caused this instrument to be signed in accordance with Section 303 of the Base Indenture.
Date: May 30, 2017

	
	
	XILINX, INC.

	 

	 

	Name:

	Title:

B-3

CERTIFICATE OF AUTHENTICATION
This is one of the Securities described in the within-mentioned Indenture.

	
		
	U.S. BANK NATIONAL ASSOCIATION, 
as Trustee

	 
	 

	 
	 

	By:
	 

	 
	Authorized Signatory

	 
	 

	Dated:
	 

	 
	 

B-4

REVERSE OF SECURITY
XILINX, INC.
2.950% Senior Notes due 2024
This security is one of a duly authorized series of debt securities of Xilinx, Inc., a Delaware corporation (the “Company”), issued or to be issued in one or more series under and pursuant to an Indenture for the Company’s senior debt securities, dated as of June 14, 2007 (the “Base Indenture”), as supplemented by the Supplemental Indenture, dated as of May 30, 2017 (the “Supplemental Indenture”), by and between the Company and U.S. Bank National Association, as trustee (the “Trustee”). The Base Indenture as supplemented and amended by the Supplemental Indenture is referred to herein as the “Indenture.” By the terms of the Base Indenture, the debt securities issuable thereunder are issuable in series that may vary as to amount, date of maturity, rate of interest and in other respects as provided in the Base Indenture. This security is one of the series designated on the face hereof (individually, a “Security,” and collectively, the “Securities”), and reference is hereby made to the Indenture for a description of the rights, limitations of rights, obligations, duties and immunities of the Trustee, the Company and the holders of the Securities (the “Securityholders”). Capitalized terms used herein and not otherwise defined shall have the meanings given them in the Base Indenture or the Supplemental Indenture, as applicable.
1.Interest. The Company promises to pay interest on the principal amount of this Security at an annual rate of 2.950%. The Company will pay interest semi-annually on June 1 and December 1 of each year (each such day, an “Interest Payment Date”). If any Interest Payment Date or maturity date of this Security is not a Business Day, then payment of interest or principal (and premium, if any) shall be made on the next succeeding Business Day with the same force and effect as if made on the date such payment was due, and no interest shall accrue for the period after such date to the date of such payment on the next succeeding Business Day. Interest on the Securities will accrue from, and including, the most recent date to which interest has been paid or duly provided for or, if no interest has been paid, from the date of issuance to, but excluding, the applicable Interest Payment Date or maturity date, as the case may be; provided that, if there is no existing Default in the payment of interest, and if this Security is authenticated between a Regular Record Date referred to on the face hereof and the next succeeding Interest Payment Date, interest shall accrue from such next succeeding Interest Payment Date; and provided, further, that the first Interest Payment Date shall be December 1, 2017. Interest will be calculated on the basis of a 360-day year of twelve 30-day months. All dollar amounts from this calculation will be rounded to the nearest cent.
2.    Method of Payment. The Company will pay interest on the Securities (except Defaulted Interest), if any, to the Persons in whose name such Securities are registered at the close of business on the Regular Record Date referred to on the facing page of this Security for such interest installment. In the event that the Securities or a portion thereof are called for redemption, and the Redemption Date is subsequent to a Regular Record Date with respect to any Interest Payment Date and prior to such Interest Payment Date, interest on such Securities will instead be paid upon presentation and surrender of such Securities as provided in the 

B-5

Indenture. The principal of and the interest on the Securities shall be payable in the coin or currency of the United States of America that at the time is legal tender for public and private debt, at the office or agency of the Company maintained for that purpose in accordance with the Indenture.
3.    Paying Agent, Authenticating Agent and Security Registrar. Initially, U.S. Bank National Association, the Trustee, will act as Paying Agent, Authenticating Agent and Security Registrar. The Company may change or appoint any Paying Agent or Security Registrar without notice to any Securityholder. The Company or any of its Subsidiaries may act in any such capacity.
4.    Indenture. The terms of the Securities include those stated in the Indenture and those made part of the Indenture by reference to the Trust Indenture Act of 1939 (“TIA”) as in effect on the date the Indenture is qualified. The Securities are subject to all such terms, and Securityholders are referred to the Indenture and TIA for a statement of such terms. The Securities are unsecured general obligations of the Company and constitute the series designated on the face hereof as the “2.950% Senior Notes due 2024”, initially limited to $750,000,000 in aggregate principal amount. The Company will furnish to any Securityholder upon written request and without charge a copy of the Base Indenture and the Supplemental Indenture. Requests may be made to: Xilinx, Inc., 2100 Logic Drive, San Jose, California 95124, Attention: Treasurer.
5.    Redemption. The Securities may be redeemed at the option of the Company prior to the maturity date, as provided in ‎Section 1.5 of the Supplemental Indenture.
The Company shall not be required to make sinking fund payments with respect to the Securities.
6.    Change of Control Triggering Event. Upon the occurrence of a Change of Control Triggering Event, unless the Company has exercised its option to redeem the Securities as described in ‎Section 1.5 of the Supplemental Indenture, the Holder of this Security will have the right to require that the Company purchase all or a portion (equal to $2,000 or an integral multiple of $1,000 in excess thereof) of such Holder’s Securities pursuant to the Change of Control Offer, at a purchase price equal to 101% of the aggregate principal amount thereof plus accrued and unpaid interest, if any, to, but excluding, the date of purchase, subject to the rights of a Holder of this Security on the relevant Regular Record Date to receive interest due on the relevant Interest Payment Date. Within 30 days following the date upon which the Change of Control Triggering Event occurred or, at the Company’s option, prior to any Change of Control but after public announcement of the transaction that constitutes or may constitute the Change of Control, the Company must send a notice to each Holder of Securities with a copy to the Trustee, which notice shall govern the terms of the Change of Control Offer.
7.    Denominations, Transfer, Exchange. The Securities are in registered form without coupons in minimum denominations of $2,000 or any integral multiple of $1,000 in excess thereof. The transfer of Securities may be registered and Securities may be exchanged as provided in the Indenture. The Securities may be presented for exchange or for registration of 

B-6

transfer (duly endorsed or with the form of transfer endorsed thereon duly executed if so required by the Company or the Security Registrar) at the office of the Security Registrar or at the office of any transfer agent designated by the Company for such purpose. No service charge will be made for any registration of transfer or exchange, but a Securityholder may be required to pay any applicable taxes or other governmental charges. If the Securities are to be redeemed, the Company will not be required to: (i) issue, register the transfer of, or exchange any Security during a period beginning at the opening of business 15 days before the day of sending of a notice of redemption of less than all of the outstanding Securities of the same series and ending at the close of business on the day of such sending; (ii) register the transfer of or exchange any Security of any series or portions thereof selected for redemption, in whole or in part, except the unredeemed portion of any such Security being redeemed in part; nor (iii) register the transfer of or exchange of a Security of any series between the applicable record date and the next succeeding Interest Payment Date.
8.    Persons Deemed Owners. The registered Securityholder may be treated as its owner for all purposes.
9.    Repayment to the Company. Any funds or Governmental Obligations deposited with any Paying Agent or the Trustee, or then held by the Company, in trust for payment of principal of, premium, if any, or interest on the Securities of a particular series that are not applied but remain unclaimed by the holders of such Securities for at least one year after the date upon which the principal of, premium, if any, or interest on such Securities shall have respectively become due and payable, shall, upon request of the Company, be repaid to the Company, or (if then held by the Company) shall be discharged from such trust. After return to the Company, Holders entitled to the money or securities must look to the Company, as applicable, for payment as unsecured general creditors.
10.    Amendments, Supplements and Waivers. The Indenture permits, with certain exceptions as therein provided, the amendment thereof and the modification of the rights and obligations of the Company and the rights of the Holders of the Securities of each series to be affected under the Indenture at any time by the Company and the Trustee with the consent of the Holders of a majority in principal amount of the Securities at the time Outstanding of each series to be affected. The Indenture also contains provisions permitting the Holders of a majority in principal amount of the Securities of each series at the time Outstanding, on behalf of the Holders of all Securities of such series, to waive compliance by the Company with certain provisions of the Indenture and certain past defaults under the Indenture and their consequences. Any such consent or waiver by the Holder of this Security shall be conclusive and binding upon such Holder and upon all future Holders of this Security and of any Security issued upon the registration of transfer hereof or in exchange herefor or in lieu hereof, whether or not notation of such consent or waiver is made upon this Security.
11.    Defaults and Remedies. If an Event of Default with respect to the securities of a series issued pursuant to the Supplemental Indenture occurs and is continuing (other than certain events of bankruptcy, insolvency or reorganization of the Company), the Trustee or the holders of at least 25% in aggregate principal amount of the Securities of such series then Outstanding, 

B-7

by notice in writing to the Company (and to the Trustee if notice is given by such holders), may declare the unpaid principal of, premium, if any, and accrued interest, if any, due and payable immediately. In the case of certain events of bankruptcy, insolvency or reorganization of the Company, the principal and accrued and unpaid interest, if any, on all outstanding Securities will become and be immediately due and payable. Subject to the terms of the Indenture, if an Event of Default under the Indenture shall occur and be continuing, the Trustee will be under no obligation to exercise any of its rights or powers under the Indenture at the request or direction of any of the holders, unless such holders have offered the Trustee indemnity satisfactory to the Trustee. Upon satisfaction of certain conditions set forth in the Indenture, the holders of a majority in principal amount of the Outstanding securities of a series issued pursuant to the Supplemental Indenture will have the right to direct the time, method and place of conducting any proceeding for any remedy available to the Trustee, or exercising any trust or power conferred on the Trustee, with respect to the securities of such series.
12.    Trustee, Paying Agent and Security Registrar May Hold Securities. The Trustee, subject to certain limitations imposed by the TIA, or any Paying Agent or Security Registrar, in its individual or any other capacity, may become the owner or pledgee of Securities with the same rights it would have if it were not Trustee, Paying Agent or Security Registrar.
13.    No Recourse Against Others. No recourse under or upon any obligation, covenant or agreement of the Indenture, or of any Security, or for any claim based thereon or otherwise in respect hereof or thereof, shall be had against any incorporator, stockholder, officer or director, past, present or future as such, of the Company or of any predecessor or successor corporation, either directly or through the Company or any such predecessor or successor corporation, whether by virtue of any constitution, statute or rule of law, or by the enforcement of any assessment or penalty or otherwise; it being expressly understood that the Indenture and the obligations issued hereunder and thereunder are solely corporate obligations, and that no such personal liability whatever shall attach to, or is or shall be incurred by, the incorporators, stockholders, officers or directors as such, of the Company or of any predecessor or successor corporation, or any of them, because of the creation of the indebtedness authorized by the Indenture, or under or by reason of the obligations, covenants or agreements contained in the Indenture or in the Securities or implied therefrom; and that any and all such personal liability of every name and nature, either at common law or in equity or by constitution or statute, of, and any and all such rights and claims against, every such incorporator, stockholder, officer or director as such, because of the creation of the indebtedness authorized by the Indenture, or under or by reason of the obligations, covenants or agreements contained in the Indenture or in the Securities or implied therefrom, are hereby expressly waived and released as a condition of, and as a consideration for, the acceptance of the Securities.
14.    Discharge of Indenture. The Indenture contains certain provisions pertaining to discharge and defeasance, which provisions shall for all purposes have the same effect as if set forth herein.
15.    Authentication. This Security shall not be valid until the Trustee manually signs the certificate of authentication attached to the other side of this Security.

B-8

16.    Abbreviations. Customary abbreviations may be used in the name of a Securityholder or an assignee, such as: TEN COM (= tenants in common), TEN ENT (= tenants by the entireties), JT TEN (= joint tenants with right of survivorship and not as tenants in common), CUST (= Custodian), and U/G/M/A (= Uniform Gifts to Minors Act).
17.    Governing Law. The Base Indenture, the Supplemental Indenture and this Security shall be deemed to be a contract made under the internal laws of the State of New York, and for all purposes shall be construed in accordance with the laws of said State.

B-9

ASSIGNMENT FORM
To assign this Security, fill in the form below: (I) or (we) assign and transfer this Security to

(Insert assignee’s soc. sec. or tax I.D. no.)

(Print or type assignee’s name, address and zip code)
and irrevocably appoint  ________________________________________ agent to transfer this Security on the books of the Company. The agent may substitute another to act for him.
Date: _______________

	
	
	 

	Your Signature:

	 

	 

	(Sign exactly as your name appears on the face of this Security)

	
	
	 

	Signature Guarantee:

	 

	 

B-10

SCHEDULE OF INCREASES OR DECREASES IN SECURITY*
The initial principal amount of this Security is $[●]. The following increases or decreases in a part of this Security have been made:
 
	
									
	 
	 
	 
	 
	 
	 
	 
	 
	 

	Date
	 
	Amount  of decrease 
in principal amount 
of this Security
	 
	Amount of increase 
in principal amount 
of this Security
	 
	Principal amount of 
this Security 
following such 
decrease (or 
increase)
	 
	Signature of 
authorized 
signatory of Trustee

	 
	 
	 
	 
	 
	 
	 
	 
	 

	
		
	*
	Insert in Global Securities

B-11

OPTION OF HOLDER TO ELECT PURCHASE
If you want to elect to have this Note purchased by the Company pursuant to Section ‎1.6.3 of the Supplemental Indenture, check the box below:
 ̈  Section ‎1.6.3
If you want to elect to have only part of the Note purchased by the Company pursuant to Section ‎1.6.3 of the Supplemental Indenture, state the amount you elect to have purchased:
$_________
	
			
	Date:
	Your Signature:
	 

	 
	 
	(Sign exactly as your name appears on the face of this Note)

	 
	 
	 

	 
	Tax Identification No:
	 

	
	
	 

	Signature Guarantee:

	 

	 

B-12

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