Document:

EX-10.1
2 rcat1104form8kexh10_1.htm SECURED PROMISSORY NOTE DATED NOVEMBER 2, 2020 OF FAT SHARK HOLDINGS, LTD.

Exhibit
10.1

THIS
NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”),
OR UNDER THE SECURITIES LAWS OF ANY STATES. THESE SECURITIES MAY NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED, PLEDGED OR HYPOTHECATED
EXCEPT AS PERMITTED UNDER THE ACT AND APPLICABLE STATE SECURITIES LAWS PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT OR AN EXEMPTION
THEREFROM. THE ISSUER OF THESE SECURITIES MAY REQUIRE AN OPINION OF COUNSEL REASONABLY SATISFACTORY TO THE ISSUER THAT SUCH OFFER,
SALE OR TRANSFER, PLEDGE OR HYPOTHECATION OTHERWISE COMPLIES WITH THE ACT AND ANY APPLICABLE STATE SECURITIES LAWS.

FAT SHARK HOLDINGS,
LTD.

SECURED PROMISSORY
NOTE

	US $1,500,000	November 2, 2020

FOR VALUE RECEIVED,
Fat Shark Holdings, Ltd., a Cayman Islands Exempted Company (the “Company”), promises to pay to Greg French,
or his permitted assigns (“Purchaser”), in lawful money of the United States of America the principal sum of
One Million Five Hundred Thousand Dollars ($1,500,000), or such lesser amount as shall equal the outstanding principal amount hereof,
together with interest from the date of this Secured Promissory Note (this “Note”) on the unpaid principal balance
at a rate equal to three (3%) percent per annum, computed on the basis of the actual number of days elapsed and a year of 365 days.
All unpaid principal, together with any then unpaid and accrued interest and other amounts payable hereunder, shall be due and
payable on the earlier of (i) November 1, 2023 (the “Maturity Date”), (ii) when specified in Section 1(c)
in connection with a Put Prepayment (as defined below) or (iii) when, upon the acceleration of an Event of Default after giving
effect to any applicable grace periods, such amounts are declared due and payable by Purchaser or made automatically due and payable,
in each case, in accordance with the terms hereof. This Note is the “Secured Note” issued pursuant to the Share Purchase
Agreement (as defined below). Capitalized terms not defined herein shall have the meaning ascribed to such terms in the Purchase
Agreement.

THE OBLIGATIONS
DUE UNDER THIS NOTE ARE SECURED BY A FLOATING CHARGE (THE “SECURITY AGREEMENT”) DATED AS OF THE DATE HEREOF AND EXECUTED
BY THE COMPANY FOR THE BENEFIT OF PURCHASER. ADDITIONAL RIGHTS OF PURCHASER ARE SET FORTH IN THE SECURITY AGREEMENT.

Notwithstanding
any contrary provision set forth herein or in the Purchase Agreement, the Secured Party acknowledges that the Note is issued upon
the simultaneous cancellation and in replacement of the indebtedness of Company to PURCHASER pursuant to the Purchase Agreement.

The following is
a statement of the rights of Purchaser and the conditions to which this Note is subject, and to which Purchaser, by the acceptance
of this Note, agrees:

1.             
Payments.

(a)           
Interest. Accrued interest on this Note shall be payable at maturity.

(b)           
Voluntary Prepayment. The Company may prepay this Note at any time, in whole
or in part, without penalty or premium.

(c)           
Purchaser Put Prepayment. At any time following a Qualified Financing or Change of Control, unless Purchaser shall
have previously sold at least One million ($1,000,000) of Stock Consideration, until the Maturity Date, Purchaser, at the sole
election of the Purchaser and only if specified by the Purchaser to Parent in a writing given in accordance with Section 5(c) (the
“Put Notice”), shall have the right to require the Company to repay, in lawful money of the United States of
America and immediately available funds, all unpaid principal, together with any then unpaid and accrued interest and other amounts
payable under the Note then outstanding (the “Put Prepayment”) up to the amount that shall equal twenty-five
(25%) percent of the net proceeds of the Qualified Financing. Upon Purchaser’s election of a Put Prepayment, the Company
shall repay the Note pursuant to this Section 1(c) within thirty (30) days from the date the Put Notice is given by the Purchaser
to the Parent (as determined pursuant to Section 5(c)). For purposes hereof, a “Change of Control”
shall mean the date of the consummation of a merger, reorganization or consolidation of the Parent or any Subsidiary with any other
corporation that has been approved by the stockholders of the Parent or such Subsidiary, by means of any transaction or series
of related transactions, other than a merger or consolidation which would result in the voting securities of Company outstanding
immediately prior thereto continuing to represent (either by remaining outstanding or by being converted into voting securities
of the surviving entity) more than fifty (50%) percent of the total voting power represented by the voting securities of such company
or such surviving entity outstanding immediately after such merger or consolidation or a transaction or series of related transactions
undertaken for the purpose of changing the jurisdiction of incorporation of Company; or the date of the consummation of the sale
or disposition of all or substantially all of such Company’s assets.

2.    
Events of Default. The occurrence of any of the following shall constitute an
“Event of Default” under this Note:

(a)           
Failure to Pay. The Company shall fail to pay (i) when due any principal payment
on the due date hereunder or (ii) any interest payment or other payment required under the terms of this on the date due and
such payment shall not have been made within ten (10) business days of the Company’s receipt of written notice from Purchaser
of such failure to pay; or

(b)           
Breaches of Covenants. The Company shall fail to observe or perform any other covenant,
obligation, condition or agreement in any material respect contained in this Note or the Security Agreement (other than those specified
in Section 2(a)) and such failure shall continue for ten (10) business days after the Company’s receipt of written
notice to the Company of such failure; or

(c)           
Representations and Warranties. Any representation, warranty, certificate, or other
statement (financial or otherwise) made or furnished by or on behalf of the Parent to Purchaser in writing in connection with this
Note, including, without limitation, the representations and warranties of the Parent in the Purchase Agreement, or as an inducement
to Purchaser to enter into this Note, shall be false, incorrect, incomplete or misleading in any material respect when made or
furnished; or

(d)           
Voluntary Bankruptcy or Insolvency Proceedings. The Company shall (i) apply for
or consent to the appointment of a receiver, trustee, liquidator or custodian of itself or of all or a substantial part of its
property, (ii) admit in writing its inability to pay its debts generally as they mature, (iii) make a general assignment
for the benefit of any of its creditors, (iv) be dissolved or liquidated, (v) commence a voluntary case or other proceeding
seeking liquidation, reorganization or other relief with respect to itself or its debts under any bankruptcy, insolvency or other
similar law now or hereafter in effect or consent to any such relief or to the appointment of or taking possession of its property
by any official in an involuntary case or other proceeding commenced against it, or (vi) take any action for the purpose of
effecting any of the foregoing; or

(e)           
Involuntary Bankruptcy or Insolvency Proceedings. Proceedings for the appointment of
a receiver, trustee, liquidator or custodian of the Company, or of all or a substantial part of the property thereof, or an involuntary
case or other proceedings seeking liquidation, reorganization or other relief with respect to the Company, if any, or the debts
thereof under any bankruptcy, insolvency or other similar law now or hereafter in effect shall be commenced and an order for relief
entered or such proceeding shall not be dismissed or discharged within thirty (30) days of commencement.

3.             
Rights of Purchaser upon Default. Upon the occurrence of any Event of Default
(other than an Event of Default described in Sections 2(d) or 2(e)) and at any time thereafter during the continuance
of such Event of Default, Purchaser may, by written notice to the Company, declare all outstanding Obligations payable by the Company
hereunder to be immediately due and payable without presentment, demand, protest or any other notice of any kind, all of which
are hereby expressly waived, anything contained herein or in the other Transaction Documents to the contrary notwithstanding. Upon
the occurrence of any Event of Default described in Sections 2(d) or 2(e), immediately and without notice, all outstanding
Obligations payable by the Company hereunder shall automatically become immediately due and payable, without presentment, demand,
protest or any other notice of any kind, all of which are hereby expressly waived, anything contained herein or in the Security
Agreement to the contrary notwithstanding. In addition to the foregoing remedies, upon the occurrence and during the continuance
of any Event of Default, Purchaser may exercise any other right, power or remedy granted to it by the Security Agreement or otherwise
permitted to it by law, either by suit in equity or by action at law, or both.

4.             
Definitions. As used in this Note, the following capitalized terms have the
following meanings:

“Affiliate”
shall mean, with respect to any Person, any other Person directly or indirectly controlling, directly or indirectly controlled
by, or under direct or indirect common control with, such Person or a member of such Person’s immediate family; or, if such
Person is a partnership or a limited liability company, any general partner or managing member, as applicable, of such Person or
a Person controlling any such general partner or managing member. For purposes of this definition, “control” (including
the correlative terms “controlling”, “controlled by” and “under common control with”) shall
mean the power, directly or indirectly, 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.

“Event
of Default” has the meaning given in Section 2 hereof.

“Obligations”
shall mean and include all loans, advances, debts, liabilities and obligations, howsoever arising, owed by the Company to Purchaser
of every kind and description, now existing or hereafter arising under or pursuant to the terms of this Note and the Security Agreement,
including, all interest, fees, charges, expenses, attorneys’ fees and costs and accountants’ fees and costs chargeable
to and payable by the Company hereunder and thereunder, in each case, whether direct or indirect, absolute or contingent, due or
to become due, and whether or not arising after the commencement of a proceeding (including post-petition interest) and whether
or not allowed or allowable as a claim in any such proceeding.

“Person”
shall mean and include an individual, a partnership, a corporation (including a business trust), a joint stock company, a limited
liability company, an unincorporated association, a joint venture or other entity or a governmental authority.

“Purchase
Agreement” shall mean the Stock Purchase Agreement, dated as of the date hereof, by and among the Seller, the Companies,
Buyer and Parent (as defined in the Purchase Agreement).

“Securities
Act” shall mean the Securities Act of 1933, as amended.

“Security
Agreement” has the meaning given in the introductory paragraphs to this Note.

“Share
Charge Agreements” shall mean the Share Charge Agreements, each dated as of the date hereof, by and among Purchaser,
and the Company concerning the shares of Fat Shark Tech. LTD., a Cayman Islands Exempted Company (“Trading”),
and Fat Shark Technology SEZC, a Cayman Islands Special Economic Zone Company (“Tech”) wholly owned by the Company.

5.             
Miscellaneous.

(a)           
Successors and Assigns; Transfer of this Note; No Transfers to Bad Actors; Notice of Bad
Actor Status.

(i)        
Subject to the restrictions on transfer described in this Section  5(a), the rights
and obligations of the Company and Purchaser shall be binding upon and benefit the successors, assigns, heirs, administrators and
transferees of the parties.

(ii)        
With respect to any offer, sale or other disposition of this Note to any Person other than
an Affiliate of Purchaser, Purchaser will give written notice to the Company prior thereto, describing briefly the manner thereof,
together with a written opinion of Purchaser’s counsel, or other evidence if reasonably satisfactory to the Company, to the
effect that such offer, sale or other distribution may be effected without registration or qualification (under any federal or
state law then in effect). Upon receiving such written notice and reasonably satisfactory opinion, if so requested, or other evidence,
the Company, as promptly as practicable, shall notify Purchaser that Purchaser may sell or otherwise dispose of this Note, all
in accordance with the terms of the notice delivered to the Company. If a determination has been made pursuant to this Section 
5(a) that the opinion of counsel for Purchaser, or other evidence, is not reasonably satisfactory to the Company, the Company
shall so notify Purchaser promptly after such determination has been made. Each Note thus transferred shall bear a legend as to
the applicable restrictions on transferability in order to ensure compliance with the Securities Act, unless in the opinion of
counsel for the Company such legend is not required in order to ensure compliance with the Securities Act. The Company may issue
stop transfer instructions to its transfer agent in connection with such restrictions. Notwithstanding the foregoing, Purchaser
may transfer the Note to an Affiliate of Purchaser. 

(iii)        
Subject to Section 5(a)(ii), transfers of this Note shall be registered upon registration
books maintained for such purpose by or on behalf of the Company as provided in the Purchase Agreement. Prior to presentation of
this Note for registration of transfer, the Company shall treat the registered holder hereof as the owner and holder of this Note
for the purpose of receiving all payments of principal and interest hereon and for all other purposes whatsoever, whether or not
this Note shall be overdue and the Company shall not be affected by notice to the contrary.

(iv)        
Neither this Note nor any of the rights, interests or obligations hereunder may be assigned,
by operation of law or otherwise, in whole or in part, by the Company without the prior written consent of Purchaser.

(b)           
Waiver and Amendment. Any provision of this Note may be amended, waived or modified
upon the written consent of the Company and Purchaser.

Notices.
All notices, requests, demands, consents, instructions or other communications required or permitted hereunder shall in writing
and faxed, mailed, emailed or delivered to each party as follows: (i) if to Purchaser, at Red Cat Holdings, Inc., 370 Harbour
Drive, Palmas del Mar, Humacao, PR 00791 (833) 373-3228, jeff@redcat.red (Att: Jeffrey Thompson CEO) with a copy to Law Office
of Harvey J. Kesner, 500 Fifth Avenue, Suite 938, New York, NY 10036 telephone (646) 678-2543 email (pdox74@gmail.com)
or at such other address as Purchaser shall have furnished the Company in writing, or (ii) if to the Company, to ) if to
the Company, to Allan Evans, Chief Executive Officer and Chief Financial Officer at Cayman Enterprise City, 90 North Church Street,
George Town, Grand Cayman, Cayman Islands, P.O Box CEC 30 Grand Cayman, KY1-9012, with a copy to HSM Corporate Services Ltd.,
68 Fort Street, George Town, Grand Cayman KY1-1207, Cayman Islands, Telephone:  345-815-7355 Att: Lisa Shemwell and Red Cat
Holdings, Inc., 370 Harbour Drive, Palmas del Mar, Humacao, PR 00791 (833) 373-3228, jeff@redcat.red (Att: Jeffrey Thompson CEO)with
a copy to Law Office of Harvey J. Kesner, 500 Fifth Avenue, Suite 938, New York, NY 10036 telephone (646) 678-2543 email (pdox74@gmail.com),
or at such other address as the Company shall have furnished to Purchaser in writing. All such notices and communications shall
be effective (i) when sent by Federal Express or other overnight service of recognized standing, on the business day following
the deposit with such service; (ii) when mailed by registered or certified mail, first class postage prepaid and addressed
as aforesaid through the United States Postal Service, upon receipt; (iii) when delivered by hand, upon delivery; and (d) when
faxed or emailed, upon receipt.

(c)           
Payment. Payment shall be made in lawful tender of the United States.

(d)           
Usury. In the event any interest is paid on this Note which is deemed to be in excess
of the then legal maximum rate, then that portion of the interest payment representing an amount in excess of the then legal maximum
rate shall be deemed a payment of principal and applied against the principal of this Note.

(e)           
Expenses; Waivers. If action is instituted to collect this Note, the Company promises
to pay all reasonable and documented costs and expenses, including, without limitation, reasonable attorneys’ fees and costs,
incurred in connection with such action. The Company hereby waives notice of default, presentment or demand for payment, protest
or notice of nonpayment or dishonor and all other notices or demands relative to this instrument.

(f)            
Governing Law; Venue. This Note and all actions arising out of or in connection with
this Note shall be governed by and construed in accordance with the laws of the State of Delaware, without giving effect to the
conflicts of laws principles thereof. Each of Purchaser and the Company irrevocably submit to the exclusive jurisdiction of the
courts of the State of Delaware and the federal courts of the United States located in the City of Wilmington, State of Delaware,
in respect of any dispute arising from the subject matter hereof.

(g)           
Waiver of Jury Trial. By acceptance of this Note, Purchaser hereby agrees and the Company
hereby agrees to waive their respective rights to a jury trial of any claim or cause of action based upon or arising out of this
Note or the Purchase Agreement. 

(Signature Page
Follows)

    	 

    	 

    

The Company has caused this Note to be
issued as of the date first written above.

 

 

FAT
SHARK HOLDINGS, LTD.

 

 

By:                                                 

Name: Allan Evans

Title: Chief Executive
Officer

Address: Cayman Enterprise
City, 90 North Church Street, George Town, Grand Cayman, Cayman Islands, P.O Box CEC 30 Grand Cayman, KY1-9012EX-10.2
3 rcat1104form8kexh10_2.htm FLOATING CHARGE BY FAT SHARK HOLDINGS, LTD IN FAVOR OF GREG FRENCH DATED NOVEMBER 2, 2020

Exhibit
10.2

 

 

 

 

 

 

 

 

 

 

 

 

Dated: as of November 1, 2020

 

 

 

 

 

 

 

 

 

 

Floating Charge

 

by

 

Fat Shark Holdings, Ltd.

 

in favour of

 

Mr. Gregory French

 

 

 

 

 

 

 

 

 

HSM Chambers

68 Fort Street

PO Box 31726

George Town

Grand Cayman, KY1-1207

Cayman Islands

    	 

    	 

    

FLOATING CHARGE

 

This Floating Charge is made by:-

 

		(1)	Fat Shark Holdings, Ltd. and Exempted Company incorporated and registered in the Cayman
Islands with company number 327385 whose registered office is c/o HSM Corporate Services Ltd., 68 Fort Street, George Town, Grand
Cayman (hereinafter referred to as the "Company"); and

		(2)	Mr. Gregory French of 280 Raleigh Quay, Grand Cayman, Cayman Islands (the "Lender").

 

WHEREAS:

 

		(A)	Pursuant to a Share Purchase Agreement of even date herewith (the "Share Purchase Agreement") the Company
has issued a secured promissory note (the “Promissory Note”) to the Lender in the amount of US$1,500,000 (one
million five hundred thousand and 00/100 US dollars) ; and

 

		(B)	In security of the performances of the Company's obligations under the Promissory Note, the Company
is required to grant this Floating Charge.

 

1.        DEFINITIONS
AND INTERPRETATION

 

		1.1.	Words and expressions defined in the Promissory Note or whose definitions are imported into the Promissory Note shall bear
the same meanings in this Floating Charge (including the recitals and schedule hereto) unless otherwise defined herein or unless
the context otherwise requires.

 

1.2.        In
this Floating Charge, the following words and expressions shall be defined as follows:

 

"Assets"
means the whole of the property (including uncalled capital) assets and rights which is or may be from time to time comprised
in the property and undertaking of the Company.

 

"Business Day"
means a day other than a Saturday or Sunday when banks are open for ordinary business in the United States of America.

 

"Secured
Liabilities" means all present and future obligations and liabilities of the Company to the Lender under the Promissory
Note and/or this Floating Charge together with:

 

		(i)	any refinancing, novation, refunding,
deferral or extension of or increase in any of those obligations or liabilities;

		(ii)	any further obligations and liabilities
which may be made by the Lender to the Company under any agreement expressed to be supplemental to the Promissory
Note and all interest, fees, and costs in connection therewith; 

		(iii)	all costs, charges and expenses properly
incurred by the Lender in connection with the protection, preservation or enforcement of its respective rights under the Promissory
Note and/or this Floating Charge;

		(iv)	any claim for damages or restitution
in the event of recission of any of those obligations or liabilities or otherwise in connection with the Promissory
Note;

		(v)	any claim against the
Company flowing from the recovery by the Company of a payment or discharge in respect of any of those obligations or liabilities
on grounds of preference or otherwise; and 

 

		(vi)	any amounts which would
be included in any of the foregoing but for any discharge, non-provability, unenforceability or non-allowability of the same in
any insolvency or other proceedings.

 

		1.3.	References to:

 

		1.3.1.	statutes, statutory provisions and other legislation shall include all amendments, substitutions, modifications and re-enactments
for the time being in force and shall include any orders, regulations, instruments or other subordinate legislation made under
the relevant legislation;

		1.3.2.	"including" shall not be construed as limiting the generality of the words preceding it;

		1.3.3.	any term or phrase defined in the Companies Law of the Cayman Islands (as amended from time to time) shall bear the same meaning
in this Floating Charge;

		1.3.4.	words importing the singular shall include the plural and vice versa and words denoting any gender shall include all genders;

		1.3.5.	this "Floating Charge" and to any provisions of it or to any other document referred to in this Floating Charge shall
be construed as references to it in force for the time being as amended, varied, supplemented, restated, substituted or novated
from time to time;

		1.3.6.	any person are to be construed to include references to a corporation, firm, company, partnership, joint venture, unincorporated
body of persons, individual or any state or agency of a state, whether or not a separate legal entity;

		1.3.7.	any person are to be construed to include that person's assignees or transferees or successors in title, whether direct or
indirect;

		1.3.8.	clause headings are for ease of reference only and are not to affect the interpretation of this Floating Charge;

 

		1.4.	The use of bold type shall be ignored in the construction of this Floating Charge.

 

		2.	PAYMENT OBLIGATION

 

		2.1.	The Company hereby undertakes to the Lender that it will pay and discharge the Secured Liabilities
to the Lender in accordance with the terms of the  Promissory Note and
this Floating Charge.

 

		2.2.	All payments under this Floating Charge will be made in immediately available funds in the currency and to the account specified
by the Lender in any demand.

 

3.        CHARGING
PROVISION

 

		3.1.	The Company grants a floating charge over the Assets to the Lender as a continuing security for the payment or discharge of
the Secured Liabilities.

 

4.        NEGATIVE
PLEDGE AND RANKING OF FLOATING CHARGE

 

		4.1.	The Company agrees that it shall be prohibited from granting or creating subsequent to the date of this Floating Charge any
fixed security or any other floating charge over the Assets or any part or parts of them, other than in favour of the Lender or
in favour or another person and with the prior written consent of the Lender provided always that the Lender shall consent to the
granting of a pledge, security, interest, mortgage, debenture, charge, lien or encumbrance in accordance with and subject to the
terms of the Promissory Note .

 

		4.2.	Subject to the provisions of Clause 4.1 above, this Floating Charge shall rank in priority for the Secured Liabilities over
any assets of the Company and ahead of any fixed security created by the Company after its execution of this Floating Charge and
in priority to any other floating charge created by the Company after its execution of this Floating Charge.

 

5.        PROTECTION
OF SECURITY

 

		5.1.	The Company agrees that this Floating Charge is and shall be in addition and without prejudice to any other security or rights
which the Lender holds or may hold in respect of all or any of the Secured Liabilities;

 

		5.2.	This Floating Charge will be a continuing security for the Secured liabilities notwithstanding any intermediate payment or
settlement of all or any part of the Secured liabilities or any other matter or thing whatsoever.

 

		5.3.	The Lender shall be entitled, at its own expense, to have a valuation of the Assets or any part or parts of them carried out
from time to time by an independent surveyor or valuer and the Company consents to any such valuation report being prepared and
agrees to provide such access and other assistance as may be reasonably required by the Lender for such purposes.

 

		5.4.	If for any reason the security constituted hereby ceases to be a continuing security or the Lender receives or is deemed to
have received notice (whether actual or constructive) of any subsequent security affecting all or any part of the Assets and/or
the proceeds of sale thereof, the Lender may open a new account with or continue any existing account with the Company and the
liability of the Company in respect of the Secured Liabilities at the date of such cessation shall remain regardless of any payments
in or out of any such account.

 

6.        LIABILITY
TO PERFORM

 

		6.1.	In the event of failure of the Company to fulfil any of its obligations under this Floating Charge, the Lender may make such
payments or perform or fulfil any of the obligations of the Company on behalf of the Company. Any amounts expended or costs incurred
by the Lender under this provision (and interest thereon) shall be deemed properly paid, shall be recoverable from the Company
and, until recovered, shall form part of the Secured Liabilities and shall be secured by this Floating Charge.

 

7.        ENFORCEMENT

 

		7.1.	This Floating Charge shall only be enforceable following written notice from the Lender to the Company pursuant to clause 5(c)
of the Promissory Note.

 

		7.2.	No purchaser or other person shall be bound or concerned to see or enquire whether the rights of the Lender to exercise any
of the powers hereby conferred has arisen or not or be concerned with notice to the contrary or of the propriety of the exercise
or purported exercise of such powers.

 

		7.3.	The Lender shall not be liable to account to the Company for any sums or be liable to the Company for any loss or damage arising:

 

7.3.1.
from any realisation by the Lender of the Assets or any part thereof in the exercise of its rights or powers hereunder; or

 

		7.3.2.	from any act, default or omission of the Lender in relation to the exercise of its powers hereunder; or

 

		7.3.3.	from the exercise or non-exercise by the Lender of any power, authority or discretion conferred upon the Lender in relation
to the Assets or any part thereof by or pursuant to this Floating Charge.

 

8.        INDEMNITY

 

		8.1.	The Company hereby indemnifies and undertakes to keep indemnified the Lender in respect of all liabilities and expenses incurred
by it or them in good faith in the proper execution or purported execution of any rights, powers or discretions vested in it or
them pursuant hereto as a result of being the possessor of the Assets from whatsoever cause arising, provided that this indemnity
shall not apply to the extent of any loss arising as a result of the gross negligence or wilful default of the Lender.

 

		8.2.	The Lender shall not be liable for any losses arising in connection with the exercise or purported exercise of any of its rights,
powers and discretions in good faith hereunder.

 

9.        AVOIDANCE

 

Where any discharge (whether in respect
of the Secured Liabilities, this Floating Charge, any security therefor or otherwise) is made in whole or in part or any arrangement
is made in whole or in part on the faith of any payment, security or other disposition which may be avoided or repaid on the bankruptcy,
insolvency, liquidation, administration or otherwise without limitation of the Company, the liability of the Company under this
Floating Charge shall continue as if there had been no such discharge or arrangement. The Lender shall be entitled to concede or
compromise any claim that any such payment, security or other disposition is liable to avoidance or repayment.

 

10.        SUSPENSE
ACCOUNT

 

Until the Secured Liabilities have been
irrevocably and unconditionally paid and discharged in full, the Lender may:

 

		(i)	refrain from applying or enforcing any other security, moneys or rights held or received by the Lender in respect of the Secured
Liabilities or apply and enforce the same in such manner and order as the Lender sees fit (whether against such amounts or otherwise)
and the Company shall not be entitled to the benefit of the same; and

 

		(ii)	hold in suspense account any moneys received from the Company on account of the Secured Liabilities by way of a partial payment,
it being hereby agreed that interest shall be payable on the amount from time to time standing to the credit of such suspense account
at such rate as the Lender from time to time determines and that any amounts of interest so paid shall be added to the principal
amount held in such suspense account and be applied accordingly.

 

11.        NO
CONTRIBUTION

 

The Company shall not, by virtue of any
enforcement of the security constituted hereby, or any payment made by it hereunder or otherwise, be entitled at any time to exercise,
claim or have the benefit of any right of contribution or similar rights against the Lender, and all rights of contribution or
similar rights against the Lender are hereby expressly waived by the Company.

 

12.        PRESERVATION
OF RIGHTS

 

Other than as provided in this Floating
Charge, the Lender shall not be obliged before exercising any of the rights, powers, discretions or remedies conferred upon it
by this Floating Charge or by law:

 

		(i)	to take any action, including but not limited to the giving of notice
to, or making of any demand upon, the Company or any other person or the obtaining or enforcement of any judgment, decree or order
in any court against the Company or any other person;

 

		(ii)	to make or file any claim or proof in a winding-up or liquidation
of the Company or any other person;

 

		(iii)	to enforce or seek to enforce any of its rights, powers, discretions
or remedies under any other security in respect of the Secured Liabilities.

 

13.        FURTHER
ASSURANCE

 

The Company hereby irrevocably undertakes
to the Lender that it shall take all steps that the Lender may require to perfect under any appropriate law the security intended
to be constituted by or pursuant to this Floating Charge in respect of all or any part of its property, assets and rights for the
purposes of protecting such security or (upon such security becoming enforceable) facilitating the realisation of such property
and/or the enforcement of the security constituted by or pursuant to, and/or the exercise of any rights of the Lender or the receiver
under, this Floating Charge.

 

14.        REMEDIES
AND WAIVERS

 

14.1        No
waiver

 

No failure to exercise and no delay in
exercising on the part of the Lender any right, power, discretion or remedy under this Floating Charge shall operate as a waiver
thereof, nor shall any single or partial exercise of any right, power, discretion or remedy preclude any other or further exercise
thereof, or the exercise of any other right, power, discretion or remedy hereunder. The rights and remedies provided in this Floating
Charge are cumulative and not exclusive of any rights or remedies provided by law or otherwise. Any waiver and any consent by the
Lender under this Floating Charge must be made in writing and may be given subject to any conditions thought fit by the Lender.

 

14.2        No
prejudice

 

This Floating Charge and the security
constituted hereby shall not be affected by any amendment, novation, variation or replacement of the Promissory Note at any time
after the date hereof or any other act, omission or other circumstances which, but for this provision, would or might discharge
this Floating Charge or the security hereby created.

 

14.3        Application
to Court

 

The Company hereby agrees
that the Lender shall have an express and absolute right to apply to court for directions in connection with this Floating Charge
including (without limitation) to seek judicial determination with respect to, inter alia, interpretation of the terms and provisions
of this Floating Charge, the release of any security constituted hereby, the enforcement of any security constituted hereby and
all such other issues in relation to this Floating Charge as the Lender may consider necessitates judicial determination.
The Company further agrees that it shall not and shall not be entitled to apply for any costs
award to be made against the Lender in connection with any such application.

 

15.        PARTIAL
INVALIDITY

 

If any provision of this Floating Charge
shall to any extent be illegal, invalid or unenforceable, the remainder of this Floating Charge shall not be affected thereby and
each provision of this Floating Charge shall be valid and enforceable to the fullest extent permitted by law and a substitute provision
shall be negotiated by the parties hereto to preserve as nearly as possible the original intent of this Floating Charge. This Floating
Charge shall remain in full force and effect to secure the Secured Liabilities notwithstanding termination of Share Purchase Agreement
..

 

16.        ATTORNEY

 

The Company hereby irrevocably appoints
the Lender (acting by a duly authorised official) to be its attorney and on its behalf and in its name or otherwise generally to
sign, seal, execute and deliver and otherwise perfect this Floating Charge or any other documents required for the purpose of any
enforcement action by the Lender in connection therewith and which the Company has not done, and generally to use the name of the
Company in the exercise of all or any of the powers hereby conferred on the Lender.

 

The Company hereby undertakes that it
shall on request by the Lender ratify and confirm the actions of any such attorney.

 

17.        ASSIGNATION

 

17.1        Lender

 

This Floating Charge shall be binding
upon and inure to the benefit of the Company and the Lender, the successors and permitted assignees of the Lender and the successors
of the Company. References to the Lender hereunder include any permitted assignee or transferee of the Lender of its rights and
obligations hereunder. Any successor to or permitted assignee of the Lender shall be entitled to the full benefit, subject to the
burden, hereof.

 

17 .2 Company

 

The Company may not assign
or transfer all or any part of its rights or obligations hereunder

 

18.        CERTIFICATE

 

Any account or certificate signed by
an officer of the Lender or other signing official authorised by the Lender shall, in the absence of manifest error, ascertain,
specify and constitute the sums for which the Company is liable hereunder and the Company hereto consents to the registration of
this Floating Charge and of any such account or certificate for preservation and execution.

 

19.        NOTICES

 

19.1
Any communication to be made under or in connection with this Floating Charge shall be made in writing and, unless otherwise
stated, may be made by fax or letter.

 

		19.2	The address and fax number (and the department or officer, if any, for whose attention the communication is to be made) of
each party for any communication or document to be made or delivered under or in connection with this Floating Charge is:

 

(i)        in
the case of the Company:

Allan Evans, CEO

Cayman Enterprise City,

90 North Church Street, George Town, Grand Cayman, Cayman
Islands

P.O. Box CEC 30 Grand Cayman, KY1-9012

Direct Phone: +1.509.378.4685

Office Phone: +1.345.232.0727

Allan@fatshark.com

 

With a copy to:

 

Peter A. de Vere

Head of Corporate/Commercial

HSM Chambers

68 Fort Street, George Town,

PO Box 31726, Grand Cayman KY1-1207, Cayman Islands

Direct Tel: +1 345 815 7360

Mobile: +1 345 938 7360

Fax: +1 345 946 8825

Email: pdevere@hsmoffice.com

 

And a copy to:

 

FS Acquisition, Corp.

370 Harbour Drive

Palmas del Mar

Humacao, PR 00791

jeff@redcat.red

Tel: (833)373-3228

 

And a copy to:

 

Law Office of Harvey Kesner

500 Fifth Avenue, Ste 938

New York, NY 10036

Email: pdox74@gmail.com

Tel: 646-678-2543

 

(ii)        in
the case of the Lender:

Gregory French

Cayman Enterprise City,

90 North Church Street, George Town, Grand Cayman, Cayman
Islands

P.O. Box CEC 30 Grand Cayman, KY1-9012

 

280 Raleigh Quay, Grand Cayman, Cayman Islands

 

or any substitute
address, fax number or department or officer as the Company may notify the Lender, if a change
is made by the Company or the Lender may notify to the Company, if a change is made by the Lender by not less than five Business
Days' notice.

 

		19.3	Any communication or document made or delivered by one person to another under or in connection with this Floating Charge will
only be effective:

 

		(a)	if by way of fax or email, immediately provided that an affirmative transmission report of such fax or email is obtained; or

		(b)	if by way of letter, when it has been left at the relevant address or five Business Days after being deposited in the post
postage prepaid in an envelope addressed to it at that address.

 

19.4        Any
notice given under or in connection with this Floating Charge must be in English.

 

All other documents provided
under or in connection with this Floating Charge must be:

 

(a)        in
English; or

		(b)	if not in English, and if so required by the Lender, accompanied by a certified English translation and, in this case, the
English translation will prevail unless the document is a constitutional, statutory or other official document.

 

20.        CONSENT
TO REGISTRATION

 

The Company consents to the registration
of this Floating Charge in the Register of Mortgages and Charges of the Company above for preservation.

 

21.        GOVERNING
LAW

 

This Floating Charge shall be governed
by and construed in all respects in accordance with the laws of the Cayman Islands and the parties hereby submit to the non-exclusive
jurisdiction of the Cayman Islands Courts.

 

IN WITNESS WHEREOF the Company has executed
this Floating Charge:

 

	
        Signed by Allan Evans, Chief Executive Officer

        for and on behalf of Fat Shark Holdings, Ltd. 

         

         

        ..............................................

        Director

         

	
        Witness: _____________________

        Name:

        Occupation:

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