Document:

ex_353648.htm

 

Exhibit 10.1

 

AMENDMENT AGREEMENT NO. 1

 

To the Share Purchase Agreement dated 3 September 2021 (the “SPA”)

 

 

This AMENDMENT AGREEMENT NO. 1 (the “Amendment Agreement”) is made as of 24 March 2022, by and between:

 

LORD JAMES EDWARD BERGMAN;

 

ABRAHAM CHESED;

 

YEHUDA AVGANIM;

 

FALK-UWE PREUSSNER;

 

STEFAN VOLKER HLAWATSCH,

 

hereinafter each one referred to as “Seller” and, collectively, “Sellers”

and

 

GREENBOX POS, a Nevada publicly traded company under NASDAQ symbol “GBOX” with an address at 3131 Camino Del Rio North, Suite 1400, San Diego, CA, 92108 (“Buyer”)

 

and Sellers and Buyer are together the “Parties” (unless in specific cases the context requires that the term “Parties” refers to Buyer and/or Sellers only).

 

WHEREAS:

 

	 	
			(A)

				
			The Sellers and the Buyer entered into the SPA concerning the sale and purchase of the Sale Shares which represent a 100% shareholding interest in Transact Europe Holdings.

			

 

	 	
			(B)

				
			Pursuant to the SPA the Sellers agreed to sell, and Buyer agreed to purchase from the Sellers the Sale Shares subject to the terms and conditions of the SPA.

			

 

	 	
			(C)

				
			The Parties have observed, and they agree that each of the Closing Conditions in Section 4.1 of the SPA are fulfilled, and Closing of the Transaction may occur.

			

 

	 	
			(D)

				
			Further to the above the Sellers and the Buyer hereto wish to amend the SPA as more fully set forth herein;

			

 

NOW, THEREFORE, in consideration of these premises and other good and valuable consideration, the Parties hereto hereby agree as follows: 

 

§1. Definitions. Capitalized terms used in this Amendment Agreement shall have the same meanings herein as in the SPA. 

 

§2. Amendment to Section 3.1. Section 3.1 of the SPA is hereby amended as follows:

 

Consideration. Subject to Section 3.3, the total consideration for the purchase of the Sale Shares shall be EUR 26,000,000 (the “Purchase Price”).

 

§3. Amendment to Section 3.2. Section 3.2 of the SPA is hereby amended as follows:

 

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Payment. The Purchase Price shall be payable by Buyer by way of wire transfer of immediately available funds without any deduction or withholding for same day value, free of any costs or charges to the Escrow Account by 28 March 2022.

 

§4. Amendment to Section 3.5. Section 3.5 of the SPA shall be disapplied.

 

§5. Amendment to Section 3.7. Section 3.7 of the SPA shall be disapplied.

 

§6. Amendment to Section 6.1. Section 6.1 of the SPA is hereby amended as follows:

 

The Closing. The closing of the sale and purchase of the Sale Shares (the “Closing”) shall take place on 31 March 2022 at the location and time in, Sofia, Bulgaria, which will be specified in a written notice of Sellers sent to Buyer by e-mail. The date on which the Closing occurs is referred to in this Agreement as the “Closing Date”.

 

On behalf of the Sellers the e-mail notice shall be sent by Lord James Edward Bergman from e-mail address: , with cc to and .

 

The e-mail notice shall be sent to the attention of the following persons at the e-mail addresses specified herein:

 

Ben Errez

 

Lindsey-Shannon Lee, Esq. 

 

With copy to: 

 

The e-mail notice shall be sent at least three days prior to Closing Date, setting out in particular, among others, the time of the day on 31 March 2022 for appearance before a notary public for execution of the Transfer Deeds, as well as the location of the notary public’s office in Sofia, Bulgaria.

 

The e-mail notice shall be considered duly receipt by the Buyer if there have not been any returned massage to the e-mail address of Lord James Edward Bergman for failure delivery to the e-mail addresses of Ben Errez and Lindsey-Shannon Lee.

 

§7. Amendment to Section 6.2. Section 6.2 of the SPA is hereby amended as follows:

 

Deposits to Escrow. By 28 March 2022 the Buyer shall pay to the Escrow Account, in Immediately Available funds an amount of EUR 26,000,000, equal to the Purchase Price.

 

§8. Amendment to Schedule 1: Part 2. 

 

The definition of “Transaction Documents” in Schedule 1, Part 2 is hereby amended as follows:

 

“Transaction Documents” means this Agreement together with its Schedules, the Amendment Agreement, and any other amendments thereto, the Disclosure Letter and the Escrow Agreement and such other documents as the Parties may agree in writing will be Transaction Documents.

 

§9. Long Stop Date complied with. For the purposes of Section 4.4 of the SPA it shall be deemed that a Closing Invitation has been filed before the Long Stop Date.

 

§10. Additional Buyer’s warranty. Buyer hereby warrants to Sellers that based on the recent information received by the Sellers and as of the date of this Amendment the Buyer is not aware of any fact or circumstances that would give Buyer grounds to serve on Sellers a Leakage Dispute Notice, or a Dispute Notice. The above warranty (“Additional Buyer’s Warranty”) shall be valid and existing as of completion of Closing in accordance with Section 6.5 of the SPA.

 

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For the avoidance of doubt, the Additional Buyer’s Warranty shall be without prejudice to any right of the Buyer to make a Claim against Sellers under or in relation to the SPA, other than as defined under this Additional Buyer’s Warranty.

 

§11. Additional Sellers warranty. Sellers hereby warrants to the Buyer that the information provided for the reserve accounts of TE is true, complete and accurate and the warranty shall be deemed repeated as of the Closing Date.

 

§12. Effectiveness. This Amendment Agreement shall be effective as of the date first written above. This Amendment Agreement shall cease to have effect retroactively, and the SPA shall apply in its original version as if no Amendment Agreement has not been executed, if:

	 	
			(a)

				
			The Purchase Price as defined herein is not paid by the Buyer to the Escrow Account by 28 March 2022, or

			

	 	
			(b)

				
			The Buyer is in breach of the Additional Buyer’s Warranty under § 10 above.

			

 

§13. Miscellaneous. All other provisions of the SPA shall remain unchanged and in full effect. Without prejudice to §12, the SPA shall be read and construed together with this Amendment Agreement and deemed to form a single share purchase agreement between the Parties.

 

IN WITNESS WHEREOF, the Parties have executed this Amendment Agreement as of the date first written above.

 

 

 

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SIGNATURE PAGE

 

 

SIGNED by SELLERS:

 

 

	
			1.

				
			LORD JAMES EDWARD BERGMAN

			

 

	 
	
			_________________________________

			

 

	
			2.

				
			ABRAHAM CHESED

			

 

	 
	
			_________________________________

			

 

	
			3.

				
			YEHUDA AVGANIM

			

 

	 
	
			_________________________________

			

 

	
			5.

				
			FALK-UWE PREUSSNER

			

 

	 
	
			_________________________________

			

 

	
			5.

				
			STEFAN VOLKER HLAWATSCH 

			

 

	 
	
			_________________________________

			

 

 

 

SIGNED by BUYER

acting by:

 

GREENBOX POS

 

 

 

__________________________________

 

BEN ERREZ

 

Chairman/Executive member

 

4Exhibit 4.1

 

DESCRIPTION OF REGISTRANT’S REGISTERED
SECURITIES 

 

The following description of our capital stock
is based on relevant portions of the Maryland General Corporation Law (“MGCL”) and on our charter and bylaws. 

 

General

 

Under our Articles of Incorporation, our authorized
stock consists of 450,000,000 shares of common stock, par value $0.001 per share, and 50,000,000 shares of preferred stock, par value
$0.001 per share. There is currently no market for our common stock, and we can offer no assurances that a market for our shares of common
stock will develop in the future. There are no outstanding options or warrants to purchase our stock. No stock has been authorized for
issuance under any equity compensation plans. Under Maryland law, our stockholders generally will not be personally liable for our debts
or obligations.

 

Under our Articles of Incorporation our Board
will be authorized to classify and reclassify any unissued shares of stock into other classes or series of stock without obtaining stockholder
approval. As permitted by the MGCL, our Articles of Incorporation also expected to provide that the Board, without any action by our stockholders,
may amend the Articles of Incorporation from time to time to increase or decrease the aggregate number of shares of stock or the number
of shares of stock of any class or series that we have authority to issue.

 

Common Stock

 

All shares of our common stock have equal rights
as to earnings, assets, dividends and voting and, when they are issued, will be duly authorized, validly issued, fully paid and non-assessable.
Distributions may be paid to the holders of our common stock if, as and when authorized by our Board and declared by us out of funds legally
available therefor. Shares of our common stock have no preemptive, exchange, conversion or redemption rights and are freely transferable,
except when their transfer is restricted by the Articles of Incorporation, federal and state securities laws or by contract, including,
but not limited to, the Subscription Agreement. In the event of our liquidation, dissolution or winding up, each share of our common stock
would be entitled to share ratably in all of our assets that are legally available for distribution after we pay all debts and other liabilities
and subject to any preferential rights of holders of our preferred stock, if any preferred stock is outstanding at such time. Each share
of our common stock is entitled to one vote on all matters submitted to a vote of stockholders, including the election of directors. Except
as provided with respect to any other class or series of stock, the holders of our common stock will possess exclusive voting power. There
is no cumulative voting in the election of directors, which means that holders of a majority of the outstanding shares of common stock
can elect all of our directors, and holders of less than a majority of such shares will not be able to elect any directors.

 

Preferred Stock

 

Our Articles of Incorporation authorize our Board
to classify and reclassify any unissued shares of capital stock into classes or series of preferred stock. Prior to issuance of shares
of each class or series, the Board is required by Maryland law and by our Articles of Incorporation, to set the preferences, conversion
and other rights, voting powers (including exclusive voting rights), restrictions, limitations as to dividends or other distributions,
qualifications, and terms and conditions of redemption thereof, for each class or series. Thus, the Board could authorize the issuance
of shares of preferred stock with terms and conditions that could have the effect of delaying, deferring or preventing a transaction or
a change in control that might involve a premium price for holders of our common stock or otherwise be in their best interest. You should
note, however, that any issuance of preferred stock will be required to comply with the requirements of the 1940 Act. The 1940 Act requires
that (1) immediately after issuance and before any dividend or other distribution is made with respect to our common stock and before
any purchase of common stock is made, such preferred stock together with all other senior securities must not exceed an amount equal to
50% of our total assets after deducting the amount of such dividend, distribution or purchase price, as the case may be, and (2) the
holders of shares of preferred stock, if any are issued, must be entitled as a class to elect two directors at all times and to elect
a majority of the directors if dividends on such preferred stock are in arrears by two years or more. Some matters under the 1940 Act
require the separate vote of the holders of any issued and outstanding preferred stock. For example, holders of preferred stock would
be entitled to vote separately from the holders of common stock on a proposal to cease operations as a BDC. We believe that the availability
for issuance of preferred stock will provide us with increased flexibility in structuring future financings and acquisitions. The Company
does not currently intend to issue preferred stock. 

 

     

     

    

 

Transferability of Common Stock 

 

We intend to sell shares of our common stock in
a private offering in the United States under the exemption provided by Section 4(a)(2) of the Securities Act and Regulation D promulgated
thereunder. Investors who acquire shares of our common stock in such private offerings are required to complete, execute and deliver a
Subscription Agreement and related documentation, which includes customary representations and warranties, certain covenants and restrictions
and indemnification provisions.

 

Prior to a Liquidity Event and except in connection
with the General Tender Program, investors may not sell, assign, transfer or otherwise dispose of (in each case, a “Transfer”)
any common stock unless (i) the Company gives consent, (ii) the Transfer is made in accordance with applicable securities laws and (iii)
the Transfer is otherwise in compliance with the transfer restrictions set forth in the Subscription Agreement. No Transfer will be effectuated
except by registration of the Transfer on the Company’s books. Each transferee must agree to be bound by these restrictions and
all other obligations as an investor in the Company.

 

In addition, until such time as shares of common
stock of the Company are considered “publicly-offered securities” within the meaning of Department of Labor regulation Section
2510.3-101 (as modified by Section 3(42) of ERISA, the “Plan Assets Regulation”), the Company intends to operate so
that less than 25% of the value of each class of equity interests in the Company are held by “Benefit Plan Investors” (as
defined below), based upon assurances received from investors, with the intent that investment by Benefit Plan Investors should not be
“significant” and the assets of the Company should not be considered “plan assets” under ERISA. In order to comply
with this 25% limitation, the Company may prohibit certain transfers of our common stock, restrict investment by Benefit Plan Investors
or take any other action deemed necessary or advisable so as to attempt to prevent the Company from holding “plan assets”
within the meaning of ERISA. The Company may require certain representations or assurances from investors subject to ERISA or Section
4975 of the Code to determine compliance with ERISA and the level of investment by Benefit Plan Investors. The term “Benefit Plan
Investor” means (i) any “employee benefit plan” as defined in Section 3(3) of ERISA and subject to Part 4 of Subtitle
B of Title I of ERISA, (ii) any “plan” as defined in and subject to Section 4975 of the Code, and (iii) any entity whose underlying
assets include plan assets by reason of an employee benefit plan’s or plan’s investment in the entity for purposes of ERISA
or Section 4975 of the Code. Any entity described in clause (iii) of the previous sentence will be considered, for various purposes, to
hold “plan assets” only to the extent of the percentage of its equity interests that are held by Benefit Plan Investors.

 

Following a Liquidity Event, investors in this
Private Offering will be restricted from selling or disposing of their shares of common stock by applicable securities laws or contractually
by a lock-up agreement with the underwriters of an IPO or similar institutions in connection with a Liquidity Event. There can be no assurance
that shares of our common stock will be listed on a national securities exchange or offered in an initial public offering.

 

Provisions of the MGCL and Our Articles of
Incorporation and Bylaws 

 

Maryland Anti-takeover Law

 

The MGCL and our Articles of Incorporation and
Bylaws contain provisions that could make it more difficult for a potential acquirer to acquire us by means of a tender offer, proxy contest
or otherwise, the material ones of which are discussed below. These provisions are expected to discourage certain coercive takeover practices
and inadequate takeover bids and to encourage persons seeking to acquire control of us to negotiate first with our Board. We expect the
benefits of these provisions to outweigh the potential disadvantages of discouraging any such acquisition proposals because, among other
things, the negotiation of such proposals may improve their terms.

 

    2

     

    

 

Classified Board of Directors

 

Our Articles of Incorporation provide that we
have a classified board of directors consisting of three classes of directors serving staggered three-year terms, with the term of office
of only one of the three classes expiring each year. A classified board may render a change in control of us or removal of our incumbent
management more difficult. We believe, however, that the longer time required to elect a majority of a classified board of directors will
help to ensure the continuity and stability of our management and policies.

 

Election of Directors

 

Our Bylaws, as authorized by our Articles of Incorporation,
provide that the affirmative vote of the holders of a plurality of all votes cast at a meeting of stockholders duly called, and at which
a quorum is present, will be required to elect a director. Under our Articles of Incorporation, our Board may amend the Bylaws to alter
the vote required to elect directors. 

 

Number of Directors; Vacancies; Removal

 

Our Articles of Incorporation provide that the
number of directors is set only by the Board in accordance with our Bylaws and our Articles of Incorporation. Our Bylaws provide that
a majority of our entire Board may at any time increase or decrease the number of directors. However, unless our Bylaws are amended, the
number of directors may never be less than the minimum number required by the MGCL nor more than eight. Our Articles of Incorporation
provide that, at such time as we have at least three Independent Directors and our common stock is registered under the Exchange Act,
we elect to be subject to the provision of Subtitle 8 of Title 3 of the MGCL regarding the filling of vacancies on the Board. Accordingly,
at such time, except as may be provided by the Board in setting the terms of any class or series of preferred stock, any and all vacancies
on the Board may be filled only by the affirmative vote of a majority of the remaining directors in office, even if the remaining directors
do not constitute a quorum, and any director elected to fill a vacancy will serve for the remainder of the full term of the directorship
in which the vacancy occurred and until a successor is elected and qualifies, or their earlier death, resignation or removal, subject
to any applicable requirements of the 1940 Act.

 

Our Articles of Incorporation provide that a director,
or the entire Board, may be removed only for cause, as defined in our Articles of Incorporation, and then only by the affirmative vote
of at least two-thirds of the votes entitled to be cast in the election of directors. The limitations on the ability of our stockholders
to remove directors and fill vacancies could make it more difficult for a third party to acquire, or discourage a third party from seeking
to acquire, control of us.

 

Action by Stockholders

 

Under the MGCL, stockholder action can be taken
only at an annual or special meeting of stockholders or (unless the articles of incorporation provide for stockholder action by less than
unanimous written consent, which our Articles of Incorporation do not) by unanimous written consent in lieu of a meeting. These provisions,
combined with the requirements of our Bylaws regarding the calling of a stockholder-requested special meeting of stockholders discussed
below, may have the effect of delaying consideration of a stockholder proposal until the next annual meeting.

 

Advance Notice Provisions for Stockholder
Nominations and Stockholder Proposals

 

Our Bylaws provide that with respect to an annual
meeting of stockholders, nominations of persons for election to the Board and the proposal of business to be considered by stockholders
may be made only (1) by or at the direction of the Board, (2) pursuant to our notice of meeting or (3) by a stockholder of the Company
who is a stockholder of record both at the time of giving of notice provided for in our Bylaws and at the time of the annual meeting,
who is entitled to vote at the meeting and who has complied with the advance notice provisions of the Bylaws. With respect to special
meetings of stockholders, only the business specified in our notice of the meeting may be brought before the meeting. Nominations of persons
for election to the Board at a special meeting may be made only (1) by or at the direction of the Board or (2) provided that the Board
has determined that directors will be elected at the meeting, by a stockholder of the Company who is a stockholder of record both at the
time of giving of notice provided for in our Bylaws, at the record date set by our Board for the purpose of determining stockholders entitled
to vote at the annual meeting, and at the time of the special meeting, who is entitled to vote at the meeting and who has complied with
the advance notice provisions of the Bylaws.

 

    3

     

    

 

The purpose of requiring stockholders to give
us advance notice of nominations and other business is to afford our Board a meaningful opportunity to consider the qualifications of
the proposed nominees and the advisability of any other proposed business and, to the extent deemed necessary or desirable by our Board,
to inform stockholders and make recommendations about such qualifications or business, as well as to provide a more orderly procedure
for conducting meetings of stockholders. Although our Bylaws do not give our Board any power to disapprove stockholder nominations for
the election of directors or proposals recommending certain action, they may have the effect of precluding a contest for the election
of directors or the consideration of stockholder proposals if proper procedures are not followed and of discouraging or deterring a third
party from conducting a solicitation of proxies to elect its own slate of directors or to approve its own proposal without regard to whether
consideration of such nominees or proposals might be harmful or beneficial to us and our stockholders.

 

Calling of Special Meetings of Stockholders

 

Our Bylaws provide that special meetings of stockholders
may be called by our Board and certain of our officers. Additionally, our Bylaws provide that, subject to the satisfaction of certain
procedural and informational requirements by the stockholders requesting the meeting, a special meeting of stockholders will be called
by the secretary of the corporation upon the written request of stockholders entitled to cast not less than a majority of all the votes
entitled to be cast at such meeting.

 

Approval of Extraordinary Corporate Action;
Amendment of Articles of Incorporation and Bylaws 

 

Under the MGCL, a Maryland corporation generally
cannot dissolve, amend its articles of incorporation, merge, consolidate, convert into another form of business entity, sell all or substantially
all of its assets or engage in a statutory share exchange unless declared advisable by the corporation’s board of directors and
approved by the affirmative vote of stockholders entitled to cast at least two-thirds of the votes entitled to be cast on the matter.
A Maryland corporation may provide in its Articles of Incorporation for approval of these matters by a lesser or greater percentage, but
not less than a majority of all of the votes entitled to be cast on the matter. Subject to certain exceptions discussed below, our Articles
of Incorporation provides for approval of these actions by the affirmative vote of stockholders entitled to cast a majority of the votes
entitled to be cast on the matter. Notwithstanding the foregoing, the affirmative vote of at least 80% of the votes entitled to be cast
thereon, with the holders of each class or series of our stock voting as a separate class, will be necessary to effect any of the following
actions:

 	 	●	Any amendment to the Articles of Incorporation to make the shares of common stock “redeemable securities” and any other proposal to convert the Company from a “closed-end company” to an “open-end company” (as defined in the 1940 Act); 
	 	 	 
	 	●	The liquidation or dissolution of the Company and any amendment to the Articles of Incorporation to effect such liquidation or dissolution;
	 	 	 
	 	●	Any merger, consolidation, conversion, share exchange or sale or exchange of all or substantially all of the assets of the Company that the MGCL requires be approved by the stockholders;
	 	 	 
	 	●	Any transaction between (A) the Company and (B) a person, or group of persons acting together (including, without limitation, a “group” for purposes of Section 13(d) of the Exchange Act, or any successor provision), that is entitled to exercise or direct the exercise, or acquire the right to exercise or direct the exercise, directly or indirectly, other than solely by virtue of a revocable proxy, of one-tenth or more of the voting power in the election of directors generally, or any person controlling, controlled by or under common control with, or employed by or acting as an agent of, any such person or member of such group; and
	 	 	 
	 	●	Any amendment to, or any amendment inconsistent with, the certain provisions of the Articles of Incorporation including, but not limited to, those provisions related to the composition and classification of the Board, the removal and replacement of directors, provisions relating to the amendment of the Bylaws and the requirements listed in this paragraph pertaining to certain extraordinary actions requiring the approval of at least 80% of the votes entitled to be cast on certain matters.

 

However, if such amendment or proposal is approved
by a majority of our continuing directors (in addition to approval by our Board), such amendment or proposal may be approved by a majority
of the votes entitled to be cast on such a matter. The “continuing directors” are defined in our Articles of Incorporation
as (1) our current directors, (2) those directors whose nomination for election by the stockholders or whose election by the directors
to fill vacancies is approved by a majority of our current directors then on the Board or (3) any successor directors whose nomination
for election by the stockholders or whose election by the directors to fill vacancies is approved by a majority of continuing directors
or the successor continuing directors then in office.

 

    4

     

    

 

Our Articles of Incorporation and Bylaws provide
that the Board will have the exclusive power to make, alter, amend or repeal any provision of our Bylaws.

 

No Appraisal Rights

 

Except with respect to appraisal rights arising
in connection with the Control Share Act discussed below, as permitted by the MGCL, our Articles of Incorporation provide that stockholders
will not be entitled to exercise appraisal rights unless a majority of the Board determines such rights apply. 

 

Control Share Acquisitions

 

The Control Share Act provides that, once a corporation
has at least 100 beneficial owners of its capital stock and subject to certain limited exceptions not applicable to the Company, control
shares of a Maryland corporation acquired in a control share acquisition have no voting rights except to the extent approved by a vote
of two-thirds of the votes entitled to be cast on the matter. Shares owned by the acquirer, by officers or by directors who are employees
of the corporation are excluded from shares entitled to vote on the matter. Control shares are voting shares of stock which, if aggregated
with all other shares of stock owned by the acquirer or in respect of which the acquirer is able to exercise or direct the exercise of
voting power (except solely by virtue of a revocable proxy), would entitle the acquirer to exercise voting power in electing directors
within one of the following ranges of voting power:

 

	 	●	one-tenth or more but less than one-third;
	 	 	 
	 	●	one-third or more but less than a majority; or
	 	 	 
	 	●	a majority or more of all voting power.

 

The requisite stockholder approval must be obtained
each time an acquirer crosses one of the thresholds of voting power set forth above. Control shares do not include shares the acquiring
person is then entitled to vote as a result of having previously obtained stockholder approval. A control share acquisition means the
acquisition of control shares, subject to certain exceptions.

 

A person who has made or proposes to make a control
share acquisition may compel the Board of the corporation to call a special meeting of stockholders to be held within 10 days of demand
to consider the voting rights of the shares. The right to compel the calling of a special meeting is subject to the satisfaction of certain
conditions, including an undertaking to pay the expenses of the meeting. Such meeting must be held within 50 days after the day on which
the corporation has received the request and the undertaking. If no request for a meeting is made, the corporation may itself present
the question at any stockholders meeting.

 

If voting rights are not approved at the meeting
or if the acquiring person does not deliver an acquiring person statement as required by the statute, then the corporation may redeem
for fair value any or all of the control shares, except those for which voting rights have previously been approved. The right of the
corporation to redeem control shares is subject to certain conditions and limitations, including, as provided in our Bylaws compliance
with the 1940 Act. Fair value is determined, without regard to the absence of voting rights for the control shares, as of the date of
the last control share acquisition by the acquirer or of any meeting of stockholders at which the voting rights of the shares are considered
and not approved, and without regard to the absence of voting rights of the control shares. If voting rights for control shares are approved
at a stockholders meeting and the acquirer becomes entitled to vote a majority of the shares entitled to vote, all other stockholders
may exercise appraisal rights. The fair value of the shares as determined for purposes of appraisal rights may not be less than the highest
price per share paid by the acquirer in the control share acquisition.

 

The Control Share Act does not apply (a) to shares
acquired in a merger, consolidation or share exchange if the corporation is a party to the transaction or (b) to acquisitions approved
or exempted by the articles of incorporation or bylaws of the corporation. Our Bylaws contain a provision exempting from the Control Share
Act any and all acquisitions by any person of our shares of stock. There can be no assurance that such provision will not be amended or
eliminated at any time in the future. However, we will amend our Bylaws to be subject to the Control Share Act only if the Board determines
that it would be in our best interests.

 

    5

     

    

 

Business Combinations

 

Under the Business Combination Act, once a corporation
has at least 100 beneficial owners of its capital stock and subject to certain limited exceptions not applicable to the Company, “business
combinations” between a Maryland corporation and an interested stockholder or an affiliate of an interested stockholder are prohibited
for five years after the most recent date on which the interested stockholder becomes an interested stockholder. These business combinations
include a merger, consolidation, share exchange or, in circumstances specified in the statute, an asset transfer or issuance or reclassification
of equity securities. An interested stockholder is defined as:

 

	 	●	any person who beneficially owns 10% or more of the voting power of the corporation’s outstanding voting stock; or

 

	 	●	an affiliate or associate of the corporation who, at any time within the two-year period prior to the date in question, was the beneficial owner of 10% or more of the voting power of the then-outstanding voting stock of the corporation.

 

A person is not an interested stockholder under
this statute if the Board approved in advance the transaction by which the stockholder otherwise would have become an interested stockholder.
However, in approving a transaction, the Board may provide that its approval is subject to compliance, at or after the time of approval,
with any terms and conditions determined by the Board.

 

After the five-year prohibition, any business
combination between the Maryland corporation and an interested stockholder generally must be recommended by the board of directors of
the corporation and approved by the affirmative vote of at least:

 

	 	●	80% of the votes entitled to be cast by holders of outstanding shares of voting stock of the corporation; and

 

	 	●	two-thirds of the votes entitled to be cast by holders of voting stock of the corporation other than shares held by the interested stockholder with whom or with whose affiliate the business combination is to be effected or held by an affiliate or associate of the interested stockholder.

 

These super-majority vote requirements do not
apply if the corporation’s common stockholders receive a minimum price, as defined under Maryland law, for their shares in the form
of cash or other consideration in the same form as previously paid by the interested stockholder for its shares.

 

The statute permits various exemptions from its
provisions, including business combinations that are exempted by the Board before the time that the interested stockholder becomes an
interested stockholder. Our Board has adopted a resolution that any business combination between us and any other person is exempted from
the provisions of the Business Combination Act, provided that the business combination is first approved by the Board, including a majority
of the directors who are not “interested persons” as defined in the 1940 Act. This resolution may be altered or repealed in
whole or in part at any time; however, our Board will adopt resolutions so as to make us subject to the provisions of the Business Combination
Act only if the Board determines that it would be in our best interests and if the SEC staff does not object to our determination that
our being subject to the Business Combination Act does not conflict with the 1940 Act. If this resolution is repealed, or the Board does
not otherwise approve a business combination, the statute may discourage others from trying to acquire control of us and increase the
difficulty of consummating any offer.

 

Conflicts with 1940 Act

 

Our Articles of Incorporation and Bylaws provide
that any provision of the MGCL, including the Control Share Act (if we amend our Bylaws to be subject to such Act) and the Business Combination
Act, or any provision of our Articles of Incorporation or Bylaws will be subject to the requirements and limitations of the 1940 Act.

 

Exclusive Forum 

 

Our Articles of Incorporation provide that, unless
we consent in writing to the selection of a different forum, the Circuit Court for Baltimore City, Maryland, or, if that court does not
have jurisdiction, the United States District Court for the District of Maryland, Baltimore Division, shall be the sole and exclusive
forum for (a) any derivative action or proceeding brought on behalf of the Company, (b) any action asserting a claim of breach of any
duty owed by a director or officer or other employee of the Company to the Company or to the stockholders of the Company or asserting
a claim of breach of any standard of conduct set forth in the MGCL, (c) any action asserting a claim against the Company or any director
or officer or other employee of the Company arising pursuant to any provision of the MGCL, the Articles of Incorporation or our Bylaws,
or (d) any action asserting a claim against the Company or any director or officer or other employee of the Company that is governed by
the internal affairs doctrine. With respect to any proceeding described in the foregoing sentence that is in the Circuit Court for Baltimore
City, Maryland, the Company and its stockholders consent, pursuant to the terms of the Articles of Incorporation, to the assignment of
the proceeding to the Business and Technology Case Management Program pursuant to Maryland Rule 16-205 or any successor thereof. Any person
or entity purchasing or otherwise acquiring any interest in shares of capital stock of the Company will be deemed, to the fullest extent
permitted by law, to have notice of and consented to these exclusive forum provisions and to have irrevocably submitted to, and waived
any objection to, the exclusive jurisdiction of such courts in connection with any such action or proceeding and consented to process
being served in any such action or proceeding, without limitation, by United States mail addressed to the stockholder at the stockholder’s
address as it appears on the records of the Company, with postage thereon prepaid.

 

 

6

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