Delaware

001-39897

85-2838301

(State or other jurisdiction of

incorporation or organization)

(Commission File Number)

(I.R.S. Employer
Identification Number)

650 South 500 West

Salt Lake City, Utah

84101

(Address of principal executive offices)

(Zip Code)

☐

Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

☐

Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

☐

Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

☐

Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Title of each class

Trading

Symbol(s)

Name of each exchange

on which registered

Common Stock, par value $0.0001 per share

STRC

The Nasdaq Stock Market LLC

Redeemable warrants, exercisable for shares of Common Stock at an exercise price of $11.50 per share

STRCW

The Nasdaq Stock Market LLC

•

with respect to twenty percent (20%) of such shareholder’s Consideration Shares, such shares may be transferred on the trading day following the date on which the registration statement on Form S-1 for the resale of Consideration Shares is declared effective by the Securities and Exchange Commission; and

•

with respect to the remaining eighty percent (80%) of such shareholder’s Consideration Shares, such shares may be Transferred beginning upon the earlier to occur of (x) such time as the Company or any of its subsidiaries have delivered to one or more customers at least twenty (20) Guardian® XO® and/or Guardian® XT and/or Sapien® commercial units (but in no event prior to the close of business on September 24, 2022) and (y) the close of business on September 24, 2023.

Exhibit No.

Description

2.1

Merger Agreement, dated March 27, 2022, by and among Sarcos Technology and Robotics Corporation, Spiral Merger Sub I, Inc., Spiral Merger Sub II, LLC, RE2, Inc. and Draper Triangle Ventures III, LP, solely in its capacity as the agent for and on behalf of the shareholders of RE2 under the Merger Agreement

4.1

Registration Rights Agreement, dated March 27, 2022, by and among Sarcos Technology and Robotics Corporation and Draper Triangle Ventures III, LP, in its capacity as the agent for and on behalf of the shareholders of RE under the Merger Agreement

10.1

Form of Lock-up Agreement with RE2 employee securityholders

104

Cover Page Interactive Data File (embedded within the Inline XBRL document).

Sarcos Technology and Robotics Corporation

By:

/s/ Steven Hansen

Name:

Steven Hansen

Title:

Chief Financial Officer

Article I THE MERGERS

3

1.1

The Merger

3

1.2

General Effects of the Merger

4

1.4

Effects of the Second Merger on Securities of Merging Entities

9

1.5

Tax Status

9

1.6

Issuance of Parent Common Stock

9

1.7

Rights Not Transferable

10

1.8

Taking of Necessary Action; Further Action

10

1.9

Company Advances to Stockholders

10

Article II CLOSING AND CLOSING CONSIDERATION

10

2.1

The Closing

10

2.2

Closing Conditions

11

2.3

Payment of Merger Consideration

15

2.4

Post-Closing Adjustments of Merger Consideration Items.

20

2.5

Withholding Taxes

24

Article III REPRESENTATIONS AND WARRANTIES OF THE COMPANY

24

3.1

Organization and Good Standing

24

3.3

Governmental Approvals

26

3.4

Conflicts

26

3.5

Company Capital Structure

27

3.6

Company Financial Statements; Internal Financial Controls

30

3.7

No Undisclosed Liabilities

31

3.8

No Changes

31

3.9

Tax Matters.

31

3.11

Property

36

3.12

Intellectual Property

36

3.13

Company Data; Privacy; Security.

40

3.14

Material Contracts

41

3.15

Employee Benefit Plans

44

3.16

Employment Matters

46

3.17

Governmental Authorizations

49

3.18

Litigation

49

3.19

Insurance

50

3.20

Compliance with Laws

50

3.21

Material Company Customers and Suppliers.

52

3.22

Interested Party Transactions

53

3.23

Books and Records

53

3.24

Certain Third Party Expenses

53

3.25

Banking Relationships

54

3.26

Government Contracts

54

3.27

Compliance with Regulation D.

58

3.28

Disclosure

58

Article IV REPRESENTATIONS AND WARRANTIES OF PARENT AND MERGER SUBS

58

4.1

Organization and Standing

58

4.2

Authority and Enforceability

59

4.3

Governmental Approvals

59

4.4

Operation of Merger Sub

59

4.5

Valid Issuance

60

4.6

Parent SEC Reports and Financial Statements.

60

Article V

61

CONDUCT OF COMPANY BUSINESS

61

5.1

Conduct of Company Business

61

5.2

Restrictions on Company Activities

62

Article VI COMPANY NON-SOLICITATION AGREEMENT

65

6.1

Termination of Discussions

65

6.2

No Solicitation

66

6.3

Notice of Alternative Transaction Proposals

66

6.4

Breaches

66

Article VII ADDITIONAL AGREEMENTS

66

7.1

Securityholder Notice and Approvals

66

7.2

Third Party Contract Notices, Consents, Amendments and Terminations.

68

7.3

Reasonable Best Efforts to Close

68

7.4

Regulatory Filings and Clearances

69

7.5

Employee Matters

70

7.6

Tax Matters

71

7.7

Payoff Letters and Release of Liens

72

7.8

Third Party Expenses

73

7.9

Pre-Closing Actions

74

7.10

Access to Information

74

7.11

Notification of Certain Matters

74

7.12

Director and Officer Insurance and Indemnity

75

7.13

R&W Insurance Policy.

75

7.14

Registration Statements..

76

7.15

DCSA Outreach..

76

7.16

Pre-Closing Cooperation.

76

Article VIII PRE-CLOSING TERMINATION OF AGREEMENT

76

8.1

Termination

76

8.2

Effect of Termination

77

Article IX POST-CLOSING INDEMNIFICATION

78

9.1

Survival

78

9.2

Indemnification

79

9.3

Limitations on Indemnification

82

9.4

Claim Procedures

84

9.5

Resolution of Objections to Claims

85

9.6

Satisfaction of Claims

86

9.7

Third Party Claims

87

9.8

Distribution of the Reserved Pool

88

Article X STOCKHOLDER REPRESENTATIVE

89

10.1

Appointment and Authority of Stockholder Representative

89

Article XI GENERAL PROVISIONS

91

11.1

Certain Interpretations; Definitions

91

11.2

Notices

92

11.3

Confidentiality

93

11.4

Public Disclosure

93

11.5

Amendment

94

11.6

Extension and Waiver

94

11.7

Assignment

94

11.8

Severability

94

11.9

Specific Performance and Other Remedies

95

11.10

Governing Law

95

11.11

Exclusive Jurisdiction

96

11.12

Waiver of Jury Trial

96

11.13

Entire Agreement

96

11.14

Counterparts

96

Exhibit A

Form of Support Agreement

Exhibit B

Form of Joinder Agreement

Exhibit C

Form of Lockup Agreement

Exhibit D

Form of Stockholder Written Consent

Exhibit E

Form of Key Employee Agreement

Exhibit F

Form of Non-Competition Agreement

Exhibit G-1

Form of First Certificate of Merger

Exhibit G-2

Form of Statement of Merger

Exhibit G-3

Form of Second Certificate of Merger

Exhibit I

Form of Letter of Transmittal

Schedule 2.3(a)

Illustrative Balance Sheet; Illustrative Calculation

of Closing Net Working Capital

(a)

The First Merger

(b)

The Second Merger. At the Second Effective Time (as defined below), on the terms and subject to the conditions set forth in this Agreement, a certificate of merger in substantially the form attached hereto as Exhibit E-3 (the “Second Certificate of Merger”) and the applicable provisions of Delaware Law and Pennsylvania Law, the Surviving Corporation shall merge with and into Merger Sub II in the Second Merger, whereupon the separate corporate existence of the Surviving Corporation shall cease and Merger Sub II shall continue as the surviving entity and a wholly owned subsidiary of Parent. The date and time when the Second Merger shall become effective is referred to herein as the “Second Effective Time” (and, together with the First Effective Time, the “Combined Effective Time”). Merger Sub II, as the surviving entity of the Second Merger, is sometimes referred to herein as the “Surviving LLC.”

(c)

The Surviving Corporation.

(i)

Certificate of Incorporation. Unless otherwise determined by Parent prior to the First Effective Time, the certificate of incorporation of the Surviving Corporation shall be identical to the certificate of incorporation of Merger Sub I as in effect immediately prior to the Effective Time, until thereafter amended in accordance with Pennsylvania Law and as provided in such certificate of incorporation and the Surviving Corporation’s bylaws.

(ii)

Bylaws. Unless otherwise determined by Parent prior to the First Effective Time, the bylaws of Merger Sub I as in effect immediately prior to the First Effective Time shall be the bylaws of the Surviving Corporation as of the First Effective Time until thereafter amended in accordance with Pennsylvania Law and as provided in the certificate of incorporation of the Surviving Corporation and such bylaws.

(iii)

Directors. Unless otherwise determined by Parent prior to the First Effective Time, the directors of Merger Sub I immediately prior to the First Effective Time shall be the directors of the Surviving Corporation at the First Effective Time, each to hold the office of a director of the Surviving Corporation in accordance with the provisions of Pennsylvania  Law and the certificate of incorporation and bylaws of the Surviving Corporation until the earlier of their resignation or removal or until their respective successors are duly elected and qualified, as the case may be.

(iv)

Officers. Unless otherwise determined by Parent prior to the First Effective Time, the officers of Merger Sub I immediately prior to the First Effective Time shall be the officers of the Surviving Corporation at the First Effective Time, each to hold office in accordance with the provisions of Pennsylvania Law and the certificate of incorporation and bylaws of the Surviving Corporation.

(d)

The Surviving LLC.

(i)

Certificate of Formation. Unless otherwise determined by Parent prior to the Second Effective Time, the certificate of formation of Merger Sub II, as in effect immediately prior to the Second Effective Time, shall be the certificate of formation of the Surviving LLC at the Second Effective Time, until thereafter amended in accordance with Delaware law and as provided in such certificate of formation; provided, however, that at the Second Effective Time, the first article of the certificate of formation of the Surviving LLC shall be restated in its entirety to read as follows: “The name of the limited liability company is “RE2, LLC.”

(ii)

Operating Agreement. Unless otherwise determined by Parent prior to the Second Effective Time, the limited liability company agreement of the Surviving LLC, as in effect immediately prior to the Second Effective Time, shall be the limited liability company agreement of the Surviving LLC at the Second Effective Time, until such time as such agreement may be replaced, amended or modified by Parent.

(iii)

Members. Unless otherwise determined by Parent prior to the Second Effective Time, Parent shall be the sole member (as defined in the limited liability company agreement of the Surviving LLC) of the Surviving LLC.  

(iv)

Officers. Unless otherwise determined by Parent prior to the Second Effective Time, the officers of Merger Sub II immediately prior to the Second Effective Time shall be the officers of the Surviving LLC as of the Second Effective Time, each to hold office in accordance with the provisions of the limited liability company agreement of the Surviving LLC.

(b)

Company Capital Stock.

(i)

Company Preferred Stock.  At the First Effective Time, by virtue of the First Merger and without any action on the part of Parent, Merger Sub I, Merger Sub II, the Company, any Securityholder, or any other Person, each share of Company Preferred Stock (excluding Cancelled Shares, which shall be treated in the manner set forth in Section 1.3(b)(iii), and Dissenting Shares, which shall be treated in the manner set forth in Section 1.3(b)(iv)) that is issued and outstanding and held by a Stockholder as of immediately prior to the First Effective Time shall be cancelled and converted automatically into the right to receive, upon the terms and subject to the conditions set forth in this Agreement (including the escrow and indemnification provisions set forth herein): (A) cash in an amount equal to the Per Preferred Share Cash Consideration, less the portion of the Expense Fund Amount to be withheld from the holder of such share of Company Preferred Stock with respect thereto in accordance with Section 2.3(i), (B) a number of shares of Parent Common Stock equal to the Per Preferred Share Stock Consideration, less the portion of the Reserved Amount to be withheld from the holder of such share of Company Preferred Stock with respect thereto in accordance with Section 2.3(h), (C) the portion of the Expense Fund Release Amount, if any, allocable to the holder of such share of Company Preferred Stock in accordance with Section 2.3(i), (D) the number of shares of Parent Common Stock, if any, issuable pursuant to Section 2.4(e)(i), and (E) the number of Reserved Shares, if any, released from the Reserved Pool and allocable to the holder of such share of Company Preferred Stock in accordance with Section 9.8. The delivery of the foregoing components of Merger Consideration is subject to the surrender of the certificate representing such share of Company Preferred Stock and the execution and delivery of a Letter of Transmittal.

(ii)

Company Common Stock.  At the First Effective Time, by virtue of the First Merger and without any action on the part of Parent, Merger Sub I, Merger Sub II, the Company, any Securityholder, or any other Person, each share of Company Common Stock (excluding Cancelled Shares, which shall be treated in the manner set forth in Section 1.3(b)(iii), and Dissenting Shares, which shall be treated in the manner set forth in Section 1.3(b)(iv)) that is issued and outstanding and held by a Stockholder as of immediately prior to the First Effective Time shall be cancelled and converted automatically into the right to receive, upon the terms and subject to the conditions set forth in this Agreement (including the escrow and indemnification provisions set forth herein): (A) cash in an amount equal to the Per Common Share Cash Consideration, less the portion of the Expense Fund Amount to be withheld from the holder of such share of Company Common Stock with respect thereto in accordance with Section 2.3(i), (B) a number of shares of Parent Common Stock equal to the Per Common Share Stock Consideration, less the portion of the Reserved Amount to be withheld from the holder of such share of Company Common Stock with respect thereto in accordance with Section 2.3(h), (C) the portion of the Expense Fund Release Amount, if any, allocable to the holder of such share of Company Common Stock in accordance with Section 2.3(i), (D) the number of shares of Parent Common Stock, if any, issuable pursuant to Section 2.4(e)(i), and (E) the number of Reserved Shares, if any, released from the Reserved Pool and allocable to the holder of such share of Company Common Stock in accordance with Section 9.8; provided, that, with respect to the CEO, a number of shares of Parent Common Stock representing up to Seven Million Dollars ($7,000,000.00) of the Stock Consideration allocable to the CEO (based on the Parent Price) pursuant to the terms and conditions of this Agreement shall be subject to a redemption right in favor of Parent, as set forth in that certain Redemption Right Agreement, dated on or about the date hereof.  The right to delivery of the foregoing components of the Merger Consideration is subject to the surrender of the certificate representing such share of Company Common Stock and the execution and delivery of a Letter of Transmittal and a Lockup Agreement (if the holder of such share of Company Common Stock is an Employee as of the date of this Agreement).

(iii)

Cancelled Shares. At the First Effective Time, by virtue of the Merger and without any action on the part of Parent, Merger Sub I, Merger Sub II, the Company, the Securityholders or any other Person, each share of Company Capital Stock that is authorized (whether or not issued and/or outstanding) and held by the Company (including, for the avoidance of doubt, any Treasury Stock) as of immediately prior to the Effective Time (“Cancelled Shares”) shall be cancelled without any consideration paid therefor.

(iv)

Dissenting Shares. Notwithstanding any other provisions of this Agreement to the contrary, any shares of Company Capital Stock outstanding immediately prior to the Effective Time and with respect to which the holder thereof has properly demanded and perfected dissenters’ rights in accordance with Pennsylvania Law, and who has not effectively withdrawn or lost such holder’s dissenters’ rights under Pennsylvania Law (collectively, the “Dissenting Shares”), shall not be converted into or represent a right to receive the applicable consideration for Company Capital Stock set forth in Section 1.3(b), but the holder thereof shall only be entitled to such rights as are provided by Pennsylvania Law (but only after the value therefor shall have been agreed upon or finally determined pursuant to such provisions). Notwithstanding the provisions of this Section 1.3(b)(iv), if any holder of Dissenting Shares shall effectively withdraw or lose (through failure to perfect or otherwise) such holder’s dissenters’ rights under Pennsylvania Law, then, as of the later of the First Effective Time and the occurrence of such event, such holder’s shares shall automatically be converted into and represent only the right to receive the consideration for Company Capital Stock, as applicable, set forth in Section 1.3(b), without interest thereon, subject to the terms and conditions set forth in this Agreement (including the establishment and funding of the Reserved Pool and the Expense Fund in accordance with Section 2.3(h) and Section 2.3(i), the indemnification provisions set forth in Article IX, and delivery of the Exchange Documents in the manner provided in Section 2.3(f)). The Company shall give Parent prompt notice of any demand for dissenters’ rights received by the Company pursuant to the applicable provisions of Pennsylvania Law. The Company shall not, except with the prior written consent of Parent, make any payment with respect to any such demands or offer to settle or settle any such demands. Any communication to be made by or on behalf of the Company to any Stockholder with respect to such demands shall be submitted to Parent in advance and shall not be presented to any Stockholder prior to the Company receiving Parent’s prior written consent, which shall not be unreasonably withheld or delayed.

(c)

Treatment of Company Options.

(i)

Immediately prior to the First Effective Time, all Company Options that are then outstanding and held by an Optionholder shall become vested and exercisable with respect to one hundred percent (100%) of the shares of Company Common Stock subject thereto in accordance with the 2005 Stock Plan or the 2014 Stock Plan, as the case may be.

(ii)

At the First Effective Time, twenty percent (20%) of each of the Company Options  determined on a grant by grant basis that are outstanding immediately prior to the First Effective Time (whether vested based on the passage of time or vested under Section 1.3(c)(i)) and held by any Optionholder who is a Continuing Employee and (B) one hundred percent (100%) of each of the Company Options that are outstanding immediately prior to the First Effective Time and held by an Optionholder who is not a Continuing Employee shall, by virtue of the occurrence of the First Effective Time and without any action on the part of the Parent, Merger Sub I, Merger Sub II, the Company, any Securityholder, or any other Person, be cancelled and converted automatically into the right to receive, upon the terms and subject to the conditions set forth in this Agreement and the execution and delivery of a Surrender Agreement and a Lockup Agreement, an amount in cash, with respect to each share of Company Common Stock subject to such Company Options, equal to the Per Option Cash Consideration, rounded to the nearest cent, without interest, and subject to applicable Tax withholding.  

(iii)

At the First Effective Time, eighty percent (80%) of each of the Company Options that are outstanding immediately prior to the First Effective Time (whether vested based on the passage of time or vested under Section 1.3(c)(i)) and held by an Optionholder who is a Continuing Employee shall automatically, by virtue of the occurrence of the First Effective Time and without any action on the part of the Parent, Merger Sub I, Merger Sub II, the Company, any Securityholder, or any other Person, upon the terms and subject to the conditions set forth in this Agreement and the execution and delivery of a Surrender Agreement and a Lockup Agreement, be assumed by Parent as a Parent Option, and thereafter, each such Company Option so assumed by Parent (an “Assumed Option”) shall continue to have, and be subject to, the same terms and conditions (other than time-based vesting terms) set forth in the applicable Plan and the option agreements relating thereto as in effect immediately prior to the First Effective Time, except that (A) such Assumed Option shall be exercisable for that number of whole shares of Parent Common Stock equal to the product of the aggregate number of shares of Company Common Stock that were issuable upon exercise in full of such Company Option immediately prior to the First Effective Time multiplied by the Exchange Ratio, rounded down to the nearest whole number of shares of Parent Common Stock, and (B) the per share exercise price for the shares of Parent Common Stock issuable upon exercise of such Assumed Option shall be equal to the quotient obtained by dividing the exercise price per share of Company Common Stock at which such Company Option was exercisable immediately prior to the First Effective Time by the Exchange Ratio, rounded up to the nearest whole cent.  It is the intention of the parties that, to the extent possible, each Assumed Option qualify following the First Effective Time as an “incentive stock option” (within the meaning of Section 422 of the Code) to the extent that the corresponding Company Option qualified as an incentive stock option immediately prior to the First Effective Time. The assumption of Company Options under this Section 1.3(c)(ii) is intended to comply with Section(s) 409A and 424 of the Code.

(iv)

Effective as of the First Effective Time, one hundred percent (100%) of the Company Options that are outstanding and unvested immediately prior to the First Effective Time and held by an Optionholder who is a not a Continuing Employee, shall, by virtue of the occurrence of the First Effective Time and without any action on the part of the Parent, Merger Sub I, Merger Sub II, the Company, any Securityholder, or any other Person, be cancelled without payment of any consideration in respect of such cancelled Company Option.

(v)

Prior to the Closing, and subject to the prior review and approval of Parent (acting reasonably), the Company shall take all actions reasonably necessary to effect the transactions contemplated by Section 1.3(c) under the Plans and any Contract applicable to any Company Option (whether written or oral, formal or informal), including adopting applicable resolutions, amending the terms of any outstanding awards, delivering all required notices and obtaining all necessary approvals and consents.

(a)

The parties intend that the Mergers be characterized as integrated steps in a single transaction that together qualify as a “reorganization” within the meaning of Section 368(a)(1) of the Code, and this Agreement is intended to constitute a “plan of reorganization” within the meaning of Treasury Regulations Sections 1.368-2(g) and 1.368-3 (a “Section 368 Reorganization”).  The parties hereby adopt this Agreement insofar as it relates to the First Merger and the Second Merger as a “plan of reorganization” within the meaning of Section 1.368-2(g) of the Treasury Regulations. Notwithstanding the foregoing, Parent makes no representations, warranties or covenants to the Company or to any Securityholder or other Person regarding the Tax treatment of the Mergers, or any of the Tax consequences to the Company or to any Securityholder or other Person of this Agreement, the Mergers or any of the other transactions or agreements contemplated hereby.

(b)

The Company and each of the Securityholders acknowledges and agrees that he, she or it is relying solely on their own Tax advisors in connection with this Agreement, the Mergers, and the other transactions and agreements contemplated hereby. Each Securityholder acknowledges and agrees that he, she or it is responsible for paying his, her or its own Taxes, including any adverse Tax consequences that may result if the First Merger and the Second Merger are determined not to qualify as a Section 368 Reorganization.

1.6

Issuance of Parent Common Stock

(a)

The shares of Parent Common Stock issuable pursuant to this Agreement are intended to be issued pursuant to one or more exemptions from registration under the Securities Act, including those under Regulation D of the Securities Act, and the exemption from qualification under applicable state securities Law. The Company and, following the Closing, the Stockholder Representative, shall assist Parent as may be necessary to comply with the securities and blue-sky Laws relating to the transactions contemplated by this Agreement.  

(b)

Each book-entry entitlement representing Parent Common Stock (or any other securities issued in respect of such shares upon any stock split, stock dividend, recapitalization, merger, consolidation or similar event) issued or issuable to or held by the Securityholders in accordance with the terms and conditions of this Agreement shall bear the following legend (in addition to any other legends required by applicable Law or Parent’s organizational documents):  

1.7

Rights Not Transferable

1.8

Taking of Necessary Action; Further Action

1.9

Company Advances to Stockholders

(a)

Mutual Conditions. The respective obligations of Parent, Merger Sub I, Merger Sub II and the Company to effect the transactions contemplated by this Agreement, including the Mergers, shall be subject to the satisfaction, at or prior to the First Effective Time, of the following conditions:

(i)

Stockholder Approval. The Requisite Stockholder Approval pursuant to the Stockholder Written Consents shall continue to be in full force and effect.

(ii)

No Legal Restraints. No Law or Order (whether temporary, preliminary or permanent) shall be in effect which has the consequence of making either of the Mergers or any other transaction contemplated by this Agreement illegal or otherwise prohibiting or preventing the consummation of either of the Mergers or any other transaction contemplated by this Agreement in accordance with the terms and conditions hereof.

(iii)

Regulatory Approvals.  If applicable, the waiting period (and any extensions thereof) applicable to the transactions contemplated by the Agreement (including the Mergers) under the HSR Act shall have expired or been terminated (the “Regulatory Condition”).

(b)

Additional Parent and Merger Sub Conditions. The obligations of Parent and each of the Merger Subs to effect the transactions contemplated by this Agreement (including the Mergers) shall be subject to the satisfaction at or prior to the Effective Time of each of the following additional conditions, any of which may be waived in writing exclusively by Parent and the Merger Subs:

(i)

Company Covenants. The Company shall have performed and complied in all material respects with its covenants and obligations under this Agreement required to be performed and complied with by the Company prior to the Closing.

(ii)

Company Representations and Warranties.

(iii)

Company Material Adverse Effect. No Company Material Adverse Effect shall have occurred.

(iv)

Company Litigation. There shall be no Action of any kind or nature pending or threatened against Parent or any of its Affiliates, or against the Company or any of its Affiliates, by any Governmental Entity arising out of, or in any way connected with, this Agreement, the Mergers or any other transactions contemplated hereby.

(v)

Dissenters’ Rights. Stockholders holding no more than two percent (2%) of the issued and outstanding shares of Company Capital Stock shall have exercised (or have a continuing right to exercise) dissenters’ rights under applicable Law, including Pennsylvania Law, with respect to the Mergers and the other transactions contemplated by this Agreement.

(vi)

Support Agreements; Joinder Agreements. Each Support Stockholder shall have executed and delivered to Parent a Support Agreement and a Joinder Agreement as of the date of this Agreement, and all such Support Agreements and Joinder Agreements shall continue to be in full force and effect as of the Closing Date.

(vii)

280G Stockholder Approval. With respect to any payments and/or benefits that Parent determines may constitute “parachute payments” under Section 280G of the Code with respect to any Employees or any other “disqualified individuals” (as defined in Code Section 280G and the regulations promulgated thereunder) with respect to the Company and the Mergers or any other transactions contemplated hereby, the Stockholders shall have (A) approved, pursuant to the method provided for in the regulations promulgated under Section 280G of the Code, any such “parachute payments”, or (B) voted upon and disapproved such parachute payments, and, as a consequence, such “parachute payments” shall not be paid or provided for in any manner and Parent and its subsidiaries shall not have any Liabilities with respect to such “parachute payments” (the “280G Vote”).

(viii)

Employee Matters.

(A)

The Key Employee Agreement executed by the CEO shall be in full force and effect and shall not have been revoked, rescinded or otherwise repudiated by any such Person. The CEO (1) shall not have terminated his employment with or services to the Company at or prior to the Closing or expressed an intention or interest to terminate, or taken action toward terminating, his or her employment with or services to the Company at or prior to the Closing, or with Parent (or one of its Affiliates, as applicable) following the Closing, (2) shall have satisfied Parent’s customary employee background investigation, and (3) shall not be prohibited by applicable Law from working in the jurisdiction in which such Employee is employed or engaged by the Company as of the date of this Agreement.

(B)

At least 90% of the current Employees on Schedule 2.2(b)(viii)(B) and 80% of all current Employees (other than the CEO who is covered by the Key Employee Agreement) and 50% of the Employees in each of the operations department, finance department, software department, electrical engineering department, mechanical engineering department, production department, systems department and business development department receiving Parent’s standard form offer letter with a description of its customary employments terms, benefits and incentive compensation (an “Offer Letter”) shall have satisfied all of the following requirements: each such Employee (1) shall have executed and delivered to Parent the Offer Documents, none of which shall have been revoked, rescinded or otherwise repudiated by any such Employee as of the Closing, (2) shall not have terminated his or her employment with or services to the Company at or prior to the Closing and (3) shall not be prohibited by applicable Law from working in the jurisdiction in which such Employee is employed or engaged by the Company as of the date of this Agreement or as of the Closing Date.  Parent anticipates conducting its customary employee background investigation, provided however, that any non-hiring decision by Parent after such investigation or otherwise will not affect the forgoing closing condition.

(ix)

Third Party Contracts.

(A)

Parent shall have received all necessary consents, waivers and approvals of parties to any Contract set forth on Schedule 2.2(b)(ix)(A) as are required thereunder in connection with the Mergers.

(B)

Parent shall have received evidence satisfactory to Parent (acting reasonably) that each of the Terminated Agreements has been terminated (or will be terminated as of the Effective Time) and is of no further force or effect (or will be of no further force or effect as of the Effective Time).

(C)

Parent shall have received evidence satisfactory to Parent (acting reasonably) that each of the Amended Agreements has been amended (or will be amended effective as of the Effective Time) in accordance with the terms set forth on Schedule 7.2(b)(2) and such Amended Agreements, as so amended, are in full force and effect (or will be in full force and effect as of the Effective Time).

(x)

Pre-Closing Actions. Parent shall have received evidence satisfactory to Parent (acting reasonably) that each of the Pre-Closing Actions has been completed.

(xi)

Termination of Employee Plans. The Company shall have provided to Parent evidence, satisfactory to Parent (acting reasonably), as to the termination of any Company Employee Plans, if any, required to be terminated pursuant to Section 7.5(c).  

(xii)

Audited 2021 Financials. At least five (5) Business Days prior to the Closing, the Company shall have provided to Parent its audited consolidated balance sheets as of December 31, 2021 and the related consolidated statements of operations, cash flows, and stockholders’ equity for the twelve (12) month period then ended, containing an unqualified report of the Company’s auditors.

(xiii)

[Reserved].

(xiv)

Lockup Agreements.  All Securityholders who (A) hold Company Capital Stock or Company Options immediately prior to the First Effective Time, (B) are Employees of the Company as of the date of this Agreement, and (C) will receive shares of Parent Common Stock as Merger Consideration or Assumed Options in respect of Company Options, shall have executed and delivered to Parent a Lockup Agreement, and all such Lockup Agreements shall be (or, as applicable, continue to be) in full force and effect as of the Closing.  

(xv)

Share Registration Exemption. Parent shall be reasonably satisfied that no more than thirty-five (35) of the potential recipients of Parent Common Stock or rights to acquire Parent Common Stock (other than pursuant to any Assumed Options) in connection with the First Merger will fail to be, at the Closing, “accredited” as defined in Rule 501 promulgated under Regulation D of the Securities Act and the issuance of all shares of Parent Common Stock in the First Merger shall validly qualify for an exemption from the registration and prospectus delivery requirements of the Securities Act and the equivalent state “blue-sky” Laws.

(c)

Receipt of Closing Deliveries. The Company shall have delivered to Parent (A) good standing or subsistence certificates (dated no earlier than the date that is five (5) Business Days prior to the Closing Date) with respect to the Company from each applicable Governmental Entity in each jurisdiction where the Company is qualified to do business, as applicable, including each jurisdiction of incorporation, formation, or organization, (B) the Payment Spreadsheet, (C) the Director and Officer Resignation Letters, (D) the Payoff Letters, (E) the Final Invoices, (G) an Investor Questionnaire from each holder of Company Capital Stock, (H) an executed Lockup Agreement from each Securityholder described in Section 2.2(b)(xiv), and (I) all other certificates and other documents that it are required to deliver to Parent pursuant to this Agreement prior to the Closing.

(i)

Company Closing Certificates.

(A)

Officer’s Certificate. Parent shall have received a certificate from the Company, validly executed by the Chief Executive Officer of the Company for and on the Company’s behalf, to the effect that, as of the Closing, the conditions set forth in Sections 2.2(b)(i) and 2.2(b)(ii) have been satisfied.

(B)

Secretary’s Certificate. Parent shall have received a certificate from the Company, validly executed by the Secretary of the Company for and on the Company’s behalf, certifying (I) as to the terms and effectiveness of the Charter Documents, (II) as to the valid adoption of resolutions of the Board of Directors of the Company whereby the Mergers and the transactions contemplated hereunder were unanimously approved by the Board of Directors of the Company, (III) that the Requisite Stockholder Approval has been obtained, and (IV) the occurrence and results of the 280G Vote.

(C)

FIRPTA Certificate. Parent shall have received in a form reasonably acceptable to Parent: (I) a statement with respect to the Company conforming to the requirements of Section 1.1445-2(c)(3) of the United States Treasury Regulations, and (II) the notification to the Internal Revenue Service required under Section 1.897-2(h)(2) of the United States Treasury Regulations.

(d)

Additional Company Conditions. The obligations of the Company to effect the transactions contemplated by this Agreement (including the Mergers) shall be subject to the satisfaction at or prior to the First Effective Time of the following conditions, any of which may be waived in writing exclusively by the Company:

(i)

Parent Covenants. Parent and the Merger Subs shall have performed and complied in all material respects with each of their covenants and obligations under this Agreement required to be performed and complied with by them prior to the Closing.

(ii)

Parent Representations and Warranties. The representations and warranties of Parent shall be true and correct in all respects on the date of this Agreement and on and as of the Closing Date as though such representations and warranties were made on and as of such date (other than such representations and warranties of Parent made only as of a specified date, which shall be true and correct in all respects as of such date), except where any failures of any such representations and warranties to be true and correct would not prevent the Closing.

(iii)

Parent Material Adverse Effect. No Parent Material Adverse Effect shall have occurred.

(iv)

Parent Officer’s Certificate. Company shall have received a certificate from Parent, validly executed by the Chief Executive Officer of Parent for and on the Company’s behalf, to the effect that, as of the Closing, the conditions set forth in Sections 2.2(d)(i) and 2.2(d)(ii) have been satisfied.

2.3

Payment of Merger Consideration

(a)

Exemplar Balance Sheet and Closing Net Working Capital.  Schedule 2.3(a) sets forth (i) an estimated balance sheet of the Company as of the date of this Agreement prepared by the Company and (ii) the Company’s good faith, estimated calculation of Closing Net Working Capital and all components and subcomponents thereof as if the Closing occurred upon the date of this Agreement.

(b)

Company Pre-Closing Certificate.  At least three (3) Business Days prior to the Closing Date, the Company shall deliver to Parent a certificate of the Company (the “Company Pre-Closing Certificate”), certified by the Chief Executive Officer and Vice President Finance of the Company, setting forth: (i) an estimated balance sheet of the Company as of the Closing prepared by the Company, and (ii) the Company’s good-faith calculations of the estimated Merger Consideration, each Consideration Component and all components and derivations therefrom, including estimated Closing Cash (the “Estimated Closing Cash”), estimated Third Party Expenses (the “Estimated Third Party Expenses”), estimated Closing Indebtedness (the “Estimated Closing Indebtedness”), estimated Closing Net Working Capital (the “Estimated Closing Net Working Capital”), estimated liabilities in respect of Unpaid Pre-Closing Taxes (“Estimated Unpaid Pre-Closing Taxes), and estimated Advancement Repayment Amount (“Estimated Advancement Repayment Amount”).  The Company Pre-Closing Certificate shall be prepared in accordance with the Accounting Principles.  

(c)

Payment Spreadsheet.  At least three (3) Business Days prior to the Closing Date (except as specifically provided in Section 2.3(c)(ii)(I)), the Company shall deliver to Parent a spreadsheet, certified by the Company’s Chief Executive Officer and Vice President Finance of the Company, setting forth the following information, in form and substance satisfactory to Parent and accompanied by documentation satisfactory to Parent  in support of the information set forth therein (the “Payment Spreadsheet”):

(i)

with respect to each Stockholder immediately prior to the First Effective Time: (A) the name, address of record, e-mail address (if available), jurisdiction of Tax residence of such Stockholder (if available); (B) whether such Stockholder is an Employee (and if so, whether such Stockholder is expected to be a Continuing Employee) and the nature of any such service relationship (including the entity with which such Employee has a service relationship); (C) the number, class and series of all shares of Company Capital Stock held by such Stockholder and the identifying numbers of all Company Stock Certificates  evidencing all such shares; (D) the date of issuance of such shares of Company Capital Stock and the date of acquisition of such shares of Company Capital Stock by such Stockholder, and the consideration paid to the Company for such issuance (on a per share and aggregate basis) and, if such shares were not acquired by issuance from the Company, the transferee of such shares, and the consideration paid by the holder thereof for such shares (on a per share and aggregate basis); (E) the identification of any shares of Company Capital Stock that were acquired through the exercise of an option, whether such option was an incentive stock option as defined in Section 422 of the Code or a nonstatutory option, the date of grant of such option, the vesting schedule of such option, and the date of exercise of such option; (F) the number of any such shares that are Dissenting Shares; (G) such Stockholder’s Advancement Repayment Amount, if any; (H)  the aggregate amount of cash and Parent Common Stock payable to such Stockholder in respect of shares of Company Capital Stock pursuant to Section 1.3(b); and (I) such Stockholder’s Pro Rata Portion and the number of shares of Parent Common Stock and amount of cash to be deposited into the Reserved Pool and the Expense Fund, respectively, on behalf of such Stockholder;

(ii)

with respect to each Optionholder immediately prior to the First Effective Time: (A) the name, address of record, e-mail address (if available), jurisdiction of Tax residence of such Optionholder (if available); (B) whether such Optionholder is an Employee (and if so, whether such Optionholder is a Continuing Employee) and the nature of any such service relationship (including the entity with which such Employee has a service relationship); (C) the grant date and expiration date of each Company Option held by such Optionholder; (D) whether each such Company Option was granted pursuant to a Plan (and if so, which Plan); (E) the vesting schedule (including all acceleration provisions) applicable to each such Company Option and the extent to which each such Company Option is vested and unvested as of immediately prior to the Effective Time (taking into account any Company Option (or portion thereof) that, as a result of the Merger, will accelerate in full and no longer be subject to any vesting, and any right of repurchase, risk of forfeiture or other such conditions; (F) the exercise price per share and the number of shares of Company Common Stock underlying each such Company Option immediately prior to the First Effective Time; (G) whether each such Company Options qualifies as incentive stock options as defined in Section 422 of the Code or nonstatutory stock options (taking into account any Company Option (or portion thereof) that as a result of the Merger and any related acceleration will be reclassified as a nonstatutory stock option); (H) the number and date of grant of, and exercise per share of Company Common Stock subject to, Company Options being cancelled and for which cash is being paid pursuant to Section 1.3(e); and (I) the number and date of grant of, and exercise per share of Company Common Stock subject to, Company Options being assumed by Parent pursuant to Section 1.3(e) and the number of Assumed Options for Parent Common Stock in respect thereof, except that the number of Assumed Options may be provided by the Company on the second (2^nd) Business Day prior to the Closing Date;

(iii)

with respect to each holder of shares of Company Capital Stock issued on or after January 1, 2011 or any other Company Security that, in each case, would be deemed a “covered security” under Treasury Regulations Section 1.6045-1(a)(15), the cost basis and date of acquisition (if not already provided) of such shares or securities;

(iv)

wire or other payment instructions for all cash amounts to be paid by Parent in accordance with this Agreement, including any Third Party Expenses and Closing Indebtedness that Parent is to pay, or cause to be paid, following the Closing on the Company’s behalf; and

(v)

such other information reasonably requested by Parent in connection with facilitating the transactions contemplated by this Agreement.

(f)

Exchange Procedures.  

(i)

Exchange Agent. Continental Stock Transfer & Trust, or another Person selected by Parent, shall serve as the Exchange Agent for the Merger (the “Exchange Agent”).

(ii)

Promptly following the Closing Date, to the extent not previously mailed or otherwise delivered by the Company or any other Person, Parent or the Exchange Agent shall mail or otherwise deliver to each Stockholder of the Company as of immediately prior to the Effective Time, at the address or e-mail address set forth opposite each such Person’s name on the Payment Spreadsheet, a letter of transmittal in substantially the form attached hereto as Exhibit F (the “Letter of Transmittal”).

(iii)

After receipt by (A) the Exchange Agent of a duly completed Letter of Transmittal and any other documents that Parent or the Exchange Agent may reasonably require in connection therewith, as applicable (collectively, the “Exchange Documents”), and a certificate or certificates representing the relevant shares of Company Capital Stock (a “Company Stock Certificate” or “Company Stock Certificates”) and (B) Parent of a Joinder Agreement duly executed by the relevant holder of such Company Stock Certificate(s), Parent shall issue or pay or cause to be issued or paid to the holder of such Company Stock Certificate, as the case may be, in exchange therefor, that number of shares Parent Common Stock issuable and cash payable to such Person pursuant to Section 1.3(b) for such surrendered Company Capital Stock. No Parent Common Stock shall be issued or issuable, and no cash shall be paid or payable, to any Stockholder until such Person delivers to (X) the Exchange Agent, duly completed and validly executed Exchange Documents, in accordance with the terms and conditions hereof and the instructions set forth in the Letter of Transmittal, and a Company Stock Certificate or Company Stock Certificates representing the relevant shares of Company Capital Stock and (Y) Parent, a Joinder Agreement duly executed by such Stockholder.  Further, no Parent Common Stock shall be issued or issuable, and no cash shall be paid or payable to the holder of any unsurrendered Company Stock Certificate with respect to shares of Company Capital Stock formerly represented thereby until the holder of record of such Company Stock Certificate shall surrender such Company Stock Certificate and validly executed Exchange Documents pursuant hereto.  From and after the Effective Time, all Company Stock Certificates with respect to shares of Company Capital Stock shall, for all corporate purposes, evidence only the ownership of the right to receive the consideration contemplated by this Agreement.

(iv)

Lost, Stolen or Destroyed Certificates. In the event any Company Stock Certificate shall have been lost, stolen or destroyed, the Exchange Agent or Parent shall pay and/or issue, in exchange for such lost, stolen or destroyed certificate, the Merger Consideration, if any, payable and/or issuable in respect thereto pursuant to Section 1.3(b) upon the making of an affidavit of that fact by the holder thereof; provided, however, that, as conditions precedent to the issuance thereof, the Stockholder who is the owner of such lost, stolen or destroyed certificate shall have provided an indemnification agreement in a form and substance reasonably acceptable to Parent against any claim that may be made against Parent, the Surviving LLC or the Exchange Agent with respect to the certificates alleged to have been lost, stolen or destroyed and to the extent required by the Exchange Agent, the Stockholder who is the owner of such lost, stolen or destroyed certificates shall have delivered a bond in such amount as the Exchange Agent may reasonably direct.

(v)

Transfers of Ownership. If any Parent Common Stock to be issued, or any cash to be paid, pursuant to Section 1.3(b) to a Person other than the Person whose name is reflected on the corresponding Company Stock Certificate, it will be a condition of the issuance or delivery thereof that any entitlement so surrendered will be in proper form for transfer and that the Person requesting such exchange will have paid to Parent or any agent designated by it any transfer or other taxes required by reason of the payment of any portion of the Merger Consideration in any name other than that of the registered holder of the Company Stock Certificate, or established to the satisfaction of Parent or any agent designated by it that such tax has been paid or is not payable.

(vi)

No Further Ownership Rights in Company Securities. The consideration paid in respect of the surrender for exchange of Company Securities in accordance with the terms of this Agreement shall be deemed to be full satisfaction of all rights pertaining to such Company Securities. Following the First Effective Time, there shall be no further registration of transfers on the records of the Surviving Corporation of shares of Company Capital Stock that were outstanding immediately prior to the First Effective Time.

(vii)

Return of Consideration; No Liability. Any portion of the cash or Parent Common Stock (including the proceeds of any investments thereof) that remains unclaimed by the Securityholders on the date that is one (1) year after the Closing Date shall be delivered to Parent.  Any Securityholder that has not theretofore submitted Exchange Documents in accordance with the requirements set forth therein and in this Agreement, or otherwise not received any portion of the Merger Consideration due and payable to such Securityholder pursuant to this Agreement, shall thereafter look only to Parent for payment of the applicable portion of the Merger Consideration (after giving effect to any required Tax withholdings and without any interest thereon), and then, only as a general unsecured creditor.  Notwithstanding anything to the contrary in this Section 2.3(f), none of Parent, the Merger Subs, the Company, the Surviving Corporation, the Surviving LLC, the Stockholder Representative, the Exchange Agent or any other Person shall be liable to any Securityholder for any Merger Consideration properly delivered to a public official pursuant to applicable abandoned property, escheat or similar applicable Law.

(g)

Parent Common Stock. Notwithstanding anything herein to the contrary, the Parent Common Stock issued in connection with the Mergers will be subject to (i) the terms and conditions of, including any restrictions and encumbrances provided for under, this Agreement, Parent’s organizational documents, as may be amended, or amended and restated, from time to time, and any applicable Support Agreement or other Contract entered into by the Securityholders, and (ii) applicable securities and corporate Laws, including U.S. state or federal Law.

(h)

Reserved Pool. At the Closing, Parent shall issue for the benefit of each Stockholder a number of shares of Parent Common Stock  (rounded to the nearest whole share) representing such Stockholder’s Pro Rata Portion of the Reserved Amount (based on the Parent Price), to be maintained as part of the Reserved Pool, and, upon such issuance of Reserved Shares of Parent Common Stock for the benefit of such Stockholder, Parent shall be deemed to have contributed to the Reserved Pool, on behalf of such Stockholder, his, her, or its Pro Rata Portion of the Reserved Amount.  Reserved Shares in the Reserved Pool shall be available to compensate the Indemnified Parties for any claims by such parties only for any Losses suffered or incurred by them and for which they are entitled to recovery under this Agreement from the Reserved Pool, including Article IX, and shall be distributed in accordance the terms and conditions of this Agreement, including Article IX. Each Stockholder shall have the ability to exercise all rights with respect to the Reserved Shares, so long as they remain in the Reserved Pool, to which such Stockholder has a continuing contingent right in accordance with and subject to the terms and conditions of this Agreement, including voting rights and the rights to receive dividends, if any, except for the right of free transfer thereof, as contemplated by this Agreement.    

(i)

Expense Fund. At the Closing, Parent shall retain and hold back an amount in cash equal to each Stockholder’s Pro Rata Portion of the Expense Fund Amount from the cash consideration otherwise payable to such Person pursuant to Section 1.3(b). At or promptly after the Closing, Parent shall deposit, or cause to be deposited, with the Stockholder Representative the Expense Fund Amount into an account designated by the Stockholder Representative in a written notice delivered to Parent at least five (5) Business Days prior to the Closing Date (the “Expense Fund”), and, upon such deposit, Parent shall be deemed to have contributed to the Expense Fund, on behalf of each Stockholder, his, her, or its Pro Rata Portion of the Expense Fund Amount. The Expense Fund shall be accessed, and the Expense Fund Amount shall be used, solely by the Stockholder Representative to pay any fees, costs or other expenses it may incur in performing its duties or exercising its rights under this Agreement, any Related Agreement, or the Stockholder Representative Engagement Agreement. The Expense Fund shall be treated as received and deposited by the Stockholders at Closing for Tax purposes and be held as a trust fund for the benefit of the Stockholders and shall not be subject to any Lien, attachment, trustee process or any other judicial process of any creditor of any Person.  The Stockholders will not receive any interest or earnings on the Expense Fund and irrevocably transfer and assign to the Stockholder Representative any ownership right that they may otherwise have had in any such interest or earnings.  Upon conclusion of the Stockholder Representative’s duties hereunder, the Stockholder Representative shall disburse any amounts then-remaining in the Expense Fund (the “Expense Fund Release Amount”) to the Stockholders (or to the Exchange Agent or other Person, if so designated by Parent, on their behalf, and who will thereafter distribute the Expense Fund Release Amount to the Stockholders) in accordance with their respective Pro Rata Portions. The Stockholder Representative is not providing any investment supervision, recommendations or advice and will not be liable for any loss of principal of the Expense Fund Amount other than as a result of its gross negligence, bad faith, fraud or willful misconduct. The Stockholder Representative is not acting as a withholding agent or in any similar capacity in connection with the Expense Fund Amount, and has no tax reporting or income distribution obligations hereunder.

2.4

Post-Closing Adjustments of Merger Consideration Items.

(a)

No later than ninety (90) calendar days after the Closing Date, Parent shall deliver to the Stockholder Representative a statement (the “Post-Closing Statement”) setting forth (i) a consolidated balance sheet of the Company as of the Closing and (ii) Parent’s good-faith calculations of Closing Cash, Closing Indebtedness, and Closing Net Working Capital and the components thereof, together with reasonably detailed supporting documentation for such calculations. The Post-Closing Statement shall be prepared in accordance with the Accounting Principles.  If Parent does not deliver a Post-Closing Statement to the Stockholder Representative on or before such ninetieth (90th) day after the Closing Date, or delivers a statement accepting the Company Pre-Closing Statement, the Company Pre-Closing Statement and all amounts therein shall be final and binding and not subject to appeal by Parent or the Stockholder Representative.  If Parent has not delivered a Post-Closing Statement to the Stockholder Representative on or before such ninetieth (90th) day after the Closing Date, the Stockholder Representative shall have the right to deliver a Post-Closing Statement to Parent within ten (10) days after such ninetieth (90th) day, in which case the procedures set forth in Section 2.4(b) and (c) shall be implemented accordingly.

(b)

If Parent delivers a Post-Closing Statement to the Stockholder Representative in accordance with Section 2.4(a) on or before the ninetieth (90th) day after the Closing Date, then the Stockholder Representative shall have sixty (60) calendar days following its receipt of the Post-Closing Statement (the “Review Period”) to review the same together with all documentation and information related to the Stockholder Representative’s review of the Post-Closing Statement as reasonably requested in accordance with this Section 2.4(b). During the Review Period, Parent shall cooperate with the Stockholder Representative and provide the Stockholder Representative with reasonable access, during normal business hours, to the work papers of Parent and its accountants related to the preparation of the Post-Closing Statement, and Parent shall make reasonably available its employees and accountants involved in the preparation of the Post-Closing Statement. On or before the expiration of the Review Period, the Stockholder Representative may deliver to Parent a written statement accepting or disputing the Post-Closing Statement. In the event that the Stockholder Representative shall dispute the Post-Closing Statement, such written statement shall include an itemization of the Stockholder Representative’s objections and the reasons therefor (such statement, a “Dispute Statement”). Any component of the Closing Net Working Capital set forth in the Post-Closing Statement that is not disputed in a Dispute Statement shall be final and binding and not subject to appeal. If the Stockholder Representative does not deliver a Dispute Statement to Parent within the Review Period or delivers a statement accepting the Post-Closing Statement, the Post-Closing Statement and all amounts therein shall be final and binding and not subject to appeal.

(c)

If the Stockholder Representative delivers a Dispute Statement during the Review Period, Parent and the Stockholder Representative may meet and attempt in good faith to resolve their differences with respect to the disputed items set forth in the Dispute Statement during the forty-five (45) calendar days immediately following Parent’s receipt of the Dispute Statement, or such longer period as Parent and the Stockholder Representative may mutually agree in writing (the “Resolution Period”). Any such disputed items that are resolved by Parent and the Stockholder Representative during the Resolution Period shall be final and binding and not subject to appeal. If Parent and the Stockholder Representative do not resolve all such disputed items by the end of the Resolution Period, either Parent or the Stockholder Representative may submit all items then remaining in dispute with respect to the Dispute Statement to a nationally recognized independent accounting firm upon which Parent and the Stockholder Representative shall reasonably agree (the “Accounting Firm”) for review and resolution (provided, that the Accounting Firm shall not have provided services to either Parent or the Company previously unless otherwise agreed in writing by Parent and the Stockholder Representative). The Accounting Firm shall act as an expert and not an arbitrator. The Accounting Firm shall (i) make any calculations in accordance with the Accounting Principles, (ii) shall review and determine only those items remaining in dispute between Parent and the Stockholder Representative, and (iii) shall only be permitted or authorized to determine an amount with respect to any such disputed item that is either, or within the numerical range between, the amount of such disputed item as proposed by Parent in the Post-Closing Statement or the amount of such disputed item as proposed by the Stockholder Representative in the Dispute Statement. Each of Parent and the Stockholder Representative shall (A) enter into a customary engagement letter with the Accounting Firm at the time such dispute is submitted to the Accounting Firm and otherwise cooperate with the Accounting Firm and (B) have the opportunity to submit a written statement in support of their respective positions with respect to such disputed items, to provide supporting material to the Accounting Firm in defense of their respective positions with respect to such disputed items and to submit a written statement responding to the other party’s position with respect to such disputed items. Neither Parent nor the Stockholder Representative shall engage in any communication of any kind, whether oral or written, with the Accounting Firm regarding the items included in the Dispute Statement except in the presence (in person or telephonically) of the other such party, or, in the case of written communications (including electronic mail), without such other party simultaneously receiving a copy of any such communications. The Accounting Firm’s sole function shall be to arbitrate each disputed item in accordance with the requirements of this Agreement and not to conduct its own investigation or analysis. The Accounting Firm shall allow Parent and the Stockholder Representative to present their respective positions regarding the disputed items and shall thereafter as promptly as possible provide the parties hereto a written determination of each disputed item, and such written determination shall be final and binding upon the parties hereto, and judgment may be entered on the award. The Accounting Firm may, at its discretion, conduct a conference concerning the disputed items, at which conference each party shall have the right to present additional documents, materials and other information

and to have present its advisors, counsel and accountants. In connection with such process, there shall be no other hearings or any oral examinations, testimony, depositions, discovery or other similar proceedings. The Accounting Firm shall address only the issues in dispute, shall make its decision solely on the basis of the evidence and position papers presented to it and in a manner consistent with the Applicable Accounting Principles. The Accounting Firm shall be instructed to deliver to Parent and the Stockholder Representative a written determination (such determination to include a worksheet setting forth all calculations used in arriving at such determination and to be based solely on information provided to the Accounting Firm by Parent and the Stockholder Representative) of the disputed items within thirty (30) calendar days of receipt of the disputed items, which determination shall be final and binding and not subject to appeal, absent manifest error or fraud. All fees and expenses relating to the work, if any, to be performed by the Accounting Firm will be allocated between Parent, on the one hand, and the Stockholder Representative (on behalf of the Indemnifying Parties), on the other hand, in the same proportion as the differences between the aggregate amount of the disputed items so submitted to the Accounting Firm that is unsuccessfully disputed by each such party (as finally determined by the Accounting Firm) and the final total determined amount of such items so submitted.

(d)

Certain Defined Terms.

(i)

“Final Closing Cash,” “Final Closing Indebtedness,” and “Final Closing Net Working Capital” shall be the final, binding and nonappealable amounts of Closing Cash, Closing Indebtedness, and Closing Net Working Capital, respectively, established pursuant to the terms and conditions of this Section 2.4.    

(ii)

Each of the following amounts shall constitute a “Negative Adjustment”:  The excess, if any, of (A) Estimated Closing Cash over Final Closing Cash, (B) Final Closing Indebtedness over Estimated Closing Indebtedness, (C) Estimated Net Working Capital Surplus over Final Net Working Capital Surplus, and (D) Final Working Capital Shortfall over Estimated Net Working Capital Shortfall.  For purposes of Section 2.4(e), each Negative Adjustment shall be deemed a negative number.

(iii)

Each of the following shall constitute a “Positive Adjustment”: The excess, if any, of (A) Final Closing Cash over Estimated Closing Cash, (B) Estimated Closing Indebtedness over Final Closing Indebtedness, (D) Final Net Working Capital Surplus over Estimated Net Working Capital Surplus, and (E) Estimated Net Working Capital Shortfall over Final Working Capital Shortfall.  For purposes of Section 2.4(e), each Positive Adjustment shall be deemed a positive number.

(iv)

The sum of all applicable Negative Adjustments (if any) and Positive Adjustments (if any) shall be the “Net Adjustment,” which may be a positive or negative number.  

(e)

Within five (5) Business Days after the final determinations of all of Closing Cash, Closing Indebtedness and Closing Net Working Capital, Parent shall:

(i)

If the Net Adjustment is a negative number, (A) direct the Transfer Agent to cancel a number of Reserved Shares with an aggregate value (calculated using the Parent Price) equal to the absolute value of the Net Adjustment; and (B) if the absolute value of the Net Adjustment exceeds the aggregate value of all Reserved Shares then in the Reserved Pool (calculated using the Parent Price), direct the Transfer Agent to cancel an additional number of shares of Parent Common Stock with an aggregate value (calculated using the Parent Price) equal to such excess, allocated ratably to the Stockholders based on their respective Pro Rata Portions; and (C) if the absolute value of the Net Adjustment is less than $100,000, then direct the Transfer Agent to release to Stockholders, ratably based on their respective Pro Rata Portions, a number of Reserved Shares with an aggregate value (calculated using the Parent Price) equal to the difference between $100,000 and the absolute value of the Net Adjustment.  

(ii)

if the Net Adjustment is a positive number, (A) direct the Transfer Agent to release to Stockholders, ratably based on their respective Pro Rata Portions, a number of Reserved Shares with an aggregate value (calculated using the Parent Price) equal to $100,000, and (B) cause to be issued a number of additional shares of Parent Common Stock with an aggregate value (calculated using the Parent Price) equal to the absolute value of the Net Adjustment, allocated ratably to the Stockholders based on their respective Pro Rata Portions.

(iii)

Notwithstanding Section 2.4(e)(i) or Section 2.4(e)(i), if the Net Adjustment is less than $50,000, whether positive or negative, no adjustment shall be made.

(a)

The Company is a corporation duly incorporated, validly existing and subsisting in the Commonwealth of Pennsylvania. The Company has the requisite corporate power to own, lease and operate its assets and properties and to carry on its business as currently conducted and as currently contemplated to be conducted. The Company is duly qualified or licensed to do business and is in good standing as a foreign corporation in each jurisdiction in which the character or location of its assets or properties (whether owned, leased or licensed) or the nature of its business requires such qualification, license or good standing, except for the absence of such qualifications or licenses as would not reasonably be expected to have a Material Adverse Effect. The operations now being conducted by the Company are not now and have never been conducted by the Company under any other name.  

(b)

The Company holds all material Permits necessary or required for the lawful conduct of its businesses or necessary or required to own, lease or operate any of the properties or assets of the Company (collectively, the “Company Permits”).  Each Permit is valid and in full force and effect either pursuant to its terms or by operation of Law.  The Company is, and since December 31, 2018 has been, in compliance in all material respects with the terms of all Company Permits held by such Company.  To the Company’s knowledge, no event, circumstance, or state of facts has occurred which (with or without due notice or lapse of time or both) would reasonably be expected to result in the failure of the Company to be in compliance in all material respects with the terms of any Company Permit.

(c)

The Company has Made Available true, correct and complete copies of its articles of incorporation, as amended to date (the “Articles of Incorporation”) and bylaws, as amended to date (the “Bylaws”), each validly adopted and approved and in full force and effect on the date of this Agreement (collectively, the “Charter Documents”). The Board of Directors of the Company has not approved or proposed, nor has any Person proposed, any amendment to any of the Charter Documents.

(d)

The Company does not have, and has never had, any subsidiaries.

(e)

Section 3.1(e) of the Disclosure Schedule lists the directors and officers of the Company as of the date of this Agreement.

(f)

Section 3.1(f) of the Disclosure Schedule lists every jurisdiction in which the Company has Employees or facilities or otherwise conducts its business as of the date of this Agreement, and for each such jurisdiction, a description of the business conducted in such jurisdiction.

3.2

Authority and Enforceability

(a)

The Company has all requisite power and authority to enter into this Agreement and any Related Agreements to which it is a party and to consummate the Merger and the other transactions contemplated hereby and thereby. The execution and delivery of this Agreement and any Related Agreements to which the Company is a party and the consummation of the Merger and the other transactions contemplated hereby and thereby have been duly authorized by all necessary corporate action on the part of the Company (including the unanimous approval of the Board of Directors of the Company) and no further corporate or other action is required on the part of the Company to authorize this Agreement and any Related Agreements to which the Company is a party or to consummate the Merger or any other transactions contemplated hereby and thereby. Without limiting this representation, this Agreement has been adopted and approved by the Stockholders who hold at least 93% of the issued and outstanding shares of the Company Capital Stock and at least a majority of the issued and outstanding shares of each class of the Company Capital Stock (together, the “Requisite Stockholder Approval”). The approvals of the Board of Directors of the Company and of at least a majority of the issued and outstanding shares of each class of the Company Capital Stock described in this paragraph are the only votes or approvals of the Stockholders required under Law, the Charter Documents and all Contracts to which the Company is a party to legally adopt this Agreement and approve the Mergers and the other transactions contemplated hereby.

(b)

This Agreement and each of the Related Agreements to which the Company is a party have been duly executed and delivered by the Company and, assuming the due authorization, execution and delivery by the other parties hereto and thereto, constitute the valid and binding obligations of the Company enforceable against it in accordance with their respective terms, subject to Laws of general application relating to bankruptcy, insolvency, moratorium, the relief of debtors and enforcement of creditors’ rights in general.

(c)

No “fair price,” “moratorium,” “interested stockholder,” “control share acquisition,” “business combination” or any other anti-takeover Law or similar Law enacted under state or federal Law or any anti-takeover provision in the Charter Documents is applicable to the Company, any shares of Company Capital Stock or other Company Securities, this Agreement, or the Merger or the other transactions contemplated hereby.

3.3

Governmental Approvals

(a)

The authorized capital stock of the Company consists of (i) 6,590,000 shares of Company Common Stock, of which: 2,943,806 shares are issued and outstanding as of the date of this Agreement and (ii) 1,590,000 shares of Company Preferred Stock, of which 1,584,855 shares are issued and outstanding as of the date of this Agreement. Except as set forth in Section 3.5(a) of the Disclosure Schedule, no shares of Company Capital Stock are issued and held as Treasury Stock.

(b)

As of the date of this Agreement, the Company Capital Stock is held by the Persons and in the amounts set forth in Section 3.5(b) of the Disclosure Schedule which further sets forth for each such Person (i) such Person’s name and the number, class, and series of all shares held by such Person, (ii) the number of the applicable book-entry positions or certificates, as applicable, representing such shares, and (iii) whether such Person is or has ever been an Employee. All outstanding shares of Company Capital Stock are duly authorized, validly issued, fully paid and non-assessable and not subject to any Liens (other than a Permitted Lien), outstanding subscriptions, preemptive rights, rights of first refusal or “put” or “call” rights created by statute, the Charter Documents, or any Contract to which the Company is a party or by which it or any of its assets is bound. None of the outstanding shares of Company Capital Stock are, or have ever been, Company Restricted Stock. All shares of Company Capital Stock and other Company Securities ever issued by the Company have been issued or repurchased (in the case of shares that were outstanding and repurchased by the Company or any Stockholder) in material compliance with all Laws and all applicable Contracts, and were issued, transferred and repurchased (in the case of shares that were outstanding and repurchased by the Company or any Stockholder) in accordance with any right of first refusal or similar right or limitation. Except as set forth on Section 3.5(b) of the Disclosure Schedule, there are no declared or accrued but unpaid dividends with respect to any shares of Company Capital Stock and the Company has never declared or paid any dividend or other distribution. Other than the Company Capital Stock set forth in Section 3.5(b) of the Disclosure Schedule, the Company has no other capital stock authorized, issued or outstanding.  

(c)

Except as set forth on Section 3.5(c) of the Disclosure Schedule and for the Plans, the Company has never adopted, sponsored or maintained any stock option plan or any other plan or Contract providing for equity-related compensation to any Person (whether payable in shares, cash or otherwise). Each of the Plans been duly authorized, approved and adopted by the Company’s Board of Directors and the Stockholders and is in full force and effect. The Company has reserved 2,400,000 shares of Company Common Stock for issuance to employees and directors of, and consultants to, the Company upon the issuance of stock or the exercise of options granted under the Plans, of which 1,632,559 shares are issuable, as of the date of this Agreement, upon the exercise of outstanding, unexercised options granted under the Plan, 343,806 shares have been issued upon the exercise of options or purchase of restricted stock granted under the Plan and remain outstanding as of the date of this Agreement and  423,635 shares remain available for future grants.

(d)

Section 3.5(d) of the Disclosure Schedule sets forth, as of the date of this Agreement, for each outstanding Company Option, the (1) name of the Optionholder thereof, (2) whether such Optionholder is an Employee, (3) the grant date and expiration date thereof, (4) whether such Company Option was granted pursuant to a Plan, (5) the vesting schedule (including all acceleration provisions) applicable to such Company Option and the extent to which such Company Option is vested to date and whether such vesting is subject to acceleration as a result of the transactions contemplated by this Agreement or any other events, (6) the exercise price per share and the number, class and series of shares of Company Common Stock underlying such Company Option to date, and (7) whether such Company Option is a nonstatutory option or an incentive stock option as defined in Section 422 of the Code, and whether such Company Option is subject to Section 409A of the Code. The terms of the Plans and the applicable agreements for each Company Option permit the treatment of Company Options as provided in this Agreement, without the consent or approval of the holders of such securities, the Stockholders or otherwise and without any acceleration of the exercise schedules or vesting provisions in effect for such Company Options. True and complete copies of all forms of agreement relating to or issued under the Plans and all agreements that materially deviate from such forms have been Made Available and such agreements have not been amended, modified or supplemented, and there are no Contracts to amend, modify or supplement such Contracts from the forms thereof Made Available. No holder of Company Options has the ability to early exercise any Company Options for shares of restricted stock under the Plan or any other Contract relating to such Company Options. All holders of Company Options are current employees or non-employee directors of the Company.

(e)

Section 3.5(e) of the Disclosure Schedule sets forth, as of the date of this Agreement, with respect to each Company Note, (1) the name of the holder of the Company Note, (2) the grant date and expiration date thereof, (3) the principal and accrued interest outstanding under the Company Note, and (4) a summary of the effect on the applicable Company Note as a result of the entry into this Agreement and consummation of the transactions contemplated hereby. The terms of the applicable Contracts for the Company Notes permit the termination of the Company Notes as provided in this Agreement, without the consent or approval of the holders of the Company Notes (as applicable), the Stockholders or otherwise. True and complete copies of all Contracts relating to or issued under or with respect to the Company Notes have been Made Available and such Contracts have not been amended, modified or supplemented and there are no Contracts to amend, modify or supplement such Contracts from the forms thereof Made Available.

(f)

Except for the shares of Company Capital Stock, the Company Options, Company Phantom Stock Units and the Company Notes set forth on Sections 3.5(b), 3.5(c), 3.5(e) and Section 3.5(e) of the Disclosure Schedule, as of the date of this Agreement there are no, and the Company has no unfilled Contracts, promises or commitments (whether or not binding) to issue or grant any Company Securities or enter into any Contract of any character, written or oral, to issue or grant any Company Securities to which the Company is a party or by which the Company is bound obligating the Company to issue, deliver, sell, repurchase or redeem, or cause to be issued, delivered, sold, repurchased or redeemed, any shares of the capital stock of the Company or obligating the Company to grant, extend, accelerate the vesting of, change the price of, otherwise amend or enter into any Company Securities. Except as set forth on Section 3.5(e) of the Disclosure Schedule, there are no outstanding or authorized, and the Company has no unfilled promises or commitments (whether or not binding) to issue, grant, or enter into any, stock appreciation, phantom stock, profit participation, or other similar rights with respect to the Company (whether payable in Company Securities, cash or otherwise). Except as contemplated hereby, there are no voting trusts, proxies, or other Contracts with respect to the voting stock of the Company, and there are no Contracts to which the Company is a party relating to the registration, sale or transfer (including Contracts relating to rights of first refusal, right of first offer, co-sale rights or “drag-along” rights) of any Company Capital Stock. As a result of the Mergers, Parent will be the sole record and beneficial holder of all issued and outstanding Company Capital Stock and all Company Securities.

(g)

Section 3.5(g) of the Disclosure Schedule sets forth, as of the date of this Agreement, all Indebtedness of the Company, including (i) the amount of such Indebtedness, (ii) a breakdown of the components of such Indebtedness, including any prepayment premiums, penalties, breakage costs, “make whole amounts,” costs, expenses and other payment obligations that would arise if any or all of such Indebtedness were prepaid, extinguished, unwound and settled in full prior to maturity and (iii) any assets securing such Indebtedness. Other than as set forth on Section 3.5(g) of the Disclosure Schedule, the Company has no outstanding Indebtedness. The Company has Made Available a true, correct and complete copy of each Contract or other instrument evidencing Indebtedness of the Company. With respect to each such item of Indebtedness, the Company is not in default and no payments are past due. There are no outstanding loans or Indebtedness involving, on the one hand, the Company and on the other hand, any of the Securityholders. After giving effect to the Closing and the payment of all Closing Indebtedness set forth in Payoff Letters delivered to Parent prior to the Closing, the Company will have no Indebtedness, and each holder of any Indebtedness of the Company will have no rights in respect of such Indebtedness.

(h)

The Company has no outstanding PPP Indebtedness.  The Company has Made Available complete and correct copies of the Company’s applications for PPP Indebtedness, applications for forgiveness of any PPP Indebtedness and all information submitted to the lender of any PPP Indebtedness in support thereof, a copy of the final approval of the forgiveness of any PPP Indebtedness (if applicable) and all other definitive documents, applications and supporting materials provided to the lender or any Governmental Entity in connection with the application or receipt of the PPP Loans, including any amendments and corrections thereto.  The Company at all applicable times met the eligibility requirements for application and receipt of any PPP Indebtedness and at all applicable times has been in compliance with the CARES Act with respect to any PPP Indebtedness.  All material representations and certifications made by the Company to the PPP Lender or any Governmental Entity in connection with the PPP Loans were accurate, true and correct in all material respects when made.  The Company has complied in all material respects with the terms and conditions of the PPP and, without limiting the foregoing, the Company and its subsidiaries utilized the proceeds of the PPP Loans solely for permitted purposes under the PPP.

(i)

Other than the Company Notes, there is not issued or outstanding any bonds, debentures, notes or other Indebtedness of the Company (i) having the right to vote on any matters on which Stockholders may vote (or which is convertible into, or exchangeable for, securities having such right), or (ii) the value of which is in any way based upon or derived from capital or voting stock of the Company.

(j)

The allocation of the Merger Consideration set forth in Article I is consistent with, and does not violate any of the Charter Documents, the Plan, or any Contract applicable to any Company Securities or Indebtedness of the Company, as amended immediately prior to the Effective Time.

(k)

To the Knowledge of the Company, as of the date of this Agreement, no event has occurred, and no circumstance or condition exists, that has resulted in, or that will or would reasonably be expected to result in any Liability of the Company to any current, former or alleged holder of Company Securities in such Person’s capacity (or alleged capacity) as a holder of such securities, whether related to the Mergers or otherwise.  

3.6

Company Financial Statements; Internal Financial Controls

(a)

Section 3.6(a) of the Disclosure Schedule sets forth the Company’s (i) audited consolidated balance sheets as of December 31, 2018, December 31, 2019 and December 31, 2020 and the related consolidated statements of operations, cash flows, and stockholders’ equity for the twelve (12) month period then ended, containing an unqualified report of the Company’s auditors (the “Audited Year-End Financials”) and (ii) the unaudited consolidated balance sheet as of December 31, 2021 (the “Balance Sheet Date”), and the related unaudited consolidated statements of operations, cash flows, and stockholders’ equity for the twelve month period then ended (together with the Audited Year-End Financials, the “Financials”). The Financials have been prepared in accordance with GAAP consistently applied throughout the periods indicated and consistent with each other (except that any unaudited Financials need not contain footnotes and other presentation items that may be required by GAAP). The Financials present fairly in all material respects the Company’s consolidated financial condition, operating results and cash flows as of the dates and during the periods indicated therein. The Company’s unaudited consolidated balance sheet as of the Balance Sheet Date is referred to hereinafter as the “Current Balance Sheet.” The books and records of the Company have been, and are being, maintained in all material respects in accordance with applicable legal and accounting requirements (including, without limitation, GAAP) and the Financials are consistent with such books and records.  

(b)

The Company maintains accurate business records, financial books and records, personnel records, legers, sales accounting records, Tax records and related work papers and other books and records (collectively the “Books and Records”) reflecting its assets and liabilities and maintains internal accounting controls that provide reasonable assurance that (i) transactions are executed with management’s authorization, (ii) transactions are recorded as necessary to permit preparation of the Company’s financial statements in conformity with GAAP and to maintain accountability of its assets, (iii) access to its assets is permitted only in accordance with management’s authorization, and (iv) the recorded accountability for assets is compared with the existing assets at reasonable intervals and appropriate action is taken with respect to any differences. The Company has not engaged in any material transaction or maintained any bank account except as reflected in its Books and Records. The Books and Records (A) are in all material respects true, complete and correct, (B) have been maintained in accordance with the Company’s business practices on a basis consistent with prior years, and (C) fairly reflect in all material respects the basis for the Company Financial Statements.

(c)

The Company (including any Employee) has not identified or been made aware of (A) any deficiency or material weakness in the system of internal accounting controls utilized by the, (B) any fraud, whether or not material, that involves the Company’s management or other Employees who have a role in the preparation of financial statements or the internal accounting controls utilized by the Company or (C) any claim or allegation regarding any of the foregoing.

(d)

All of the accounts receivable, whether billed or unbilled, of the Company arose in the ordinary course of business, represent bona fide obligations for the provision of goods and services, are carried at values determined in accordance with GAAP as of such applicable date consistently applied, are not subject to any valid set-off or counterclaim, are valid and collectible in full, do not represent obligations for goods sold on consignment, on approval or on a sale-or-return basis and are not subject to any other repurchase or return arrangement.  The Company has not modified or accelerated in any respect the collection of any accounts receivable, and the Company has not modified or delayed in any respect the payment of any accounts payable, in each case from the Company’s standard historical practices or from the obligations set forth in each applicable Contract, in each case when initially executed and delivered.

3.9

Tax Matters.

(a)

Tax Returns and Payments. The Company has prepared and timely filed all income and other material Tax Returns required to have been filed by it, and all such Tax Returns are true, correct and complete in all material respects and prepared in compliance in all material respects with all applicable Law.  The Company has timely paid all income and other material Taxes required to have been paid by it regardless of whether or not shown on any such Tax Return. The Company has delivered or Made Available to Parent accurate and complete copies of all Company Returns filed for taxable periods ending on or after December 31, 2016.

(b)

Reserves for Payment of Taxes. The Financials fully accrue all actual and contingent liabilities for Taxes with respect to all periods through the dates thereof. The Company has not incurred any liability for Taxes since the Balance Sheet Date outside of the ordinary course of business.

(c)

Withholding. The Company has timely withheld and paid to the appropriate Tax authority all amounts required to have been withheld and paid in connection with amounts paid or owing to any employee, individual independent contractor, other service providers, equity interest holder, or other third party and has otherwise complied in all material respects with all applicable Laws relating to such withholding, collection and payment of Taxes.

(d)

Audits; Claims. The Company is not currently the subject of a Tax audit or other proceeding, and no Tax audit or other proceeding with respect to the Company has been threatened in writing or, to the Knowledge of the Company, is pending.  The Company has not been informed in writing of any deficiency, proposed adjustment, or assessment, in each case with respect to Taxes, that has not been fully paid or finally resolved.  All deficiencies for Taxes asserted or assessed in writing against the Company have been fully and timely (taking into account applicable extensions) paid, settled or withdrawn, and, no such deficiency has been threatened or proposed in writing against the Company.

(e)

Extensions; Waivers. The Company has not consented to extend or waive the time in which any Tax may be assessed or collected by any Tax authority, other than any such extensions or waivers that are no longer in effect or that were extensions of time to file Tax Returns obtained in the ordinary course of business.  The Company is not the beneficiary of any extension of time (other than an automatic extension of time not requiring the consent of the applicable Governmental Entity) within which to file any Tax Return not previously filed.

(f)

Rulings. No “closing agreement” as described in Section 7121 of the Code (or any corresponding or similar provision of state, local or non-U.S. income Law), private letter rulings, technical advice memoranda or similar agreements or rulings have been requested, entered into or issued by any Tax authority with respect to the Company which agreement or ruling would be effective after the Closing Date.

(g)

Tax Shelters. The Company is not nor has ever been a party to any “reportable transaction” as defined in Section 6707A(c) of the Code and Treasury Regulations Section 1.6011-4(b).

(h)

Liens. There are no Liens for Taxes on any assets of the Company other than Permitted Liens.

(i)

Distributed Stock. The Company has never been a distributing corporation or a controlled corporation in a transaction purported or intended to be governed by Section 355 of the Code.

(j)

Affiliated Group and Transferee Liability. The Company (i) has never been a member of an affiliated, consolidated, combined, unitary, aggregate or similar group (other than a group the common parent of which was the Company) or (ii) has no Liability for the Taxes of any Person under Section 1.1502-6 of the Treasury Regulations (or any similar provision of state, local or non-U.S. Law), as a transferee or successor, by Contract (other than a Contract the principal purpose of which is not related to Taxes), or otherwise by operation of applicable Law. The Company is not a party to any Tax allocation, Tax sharing, Tax receivable or Tax indemnity or similar agreements (other than commercial agreements entered into in the ordinary course of business that are not primarily related to Taxes), and the Company is not a party to any joint venture, Contract or other arrangement that is treated as a partnership for U.S. federal income Tax purposes.

(k)

No Other Jurisdictions for Filing Tax Returns.  The Company is not subject to Tax in any country other than its country of incorporation or formation by virtue of having a permanent establishment, place of business or business operation in that other country. No written claims have ever been made by any Tax Authority in a jurisdiction where the Company does not file Tax Returns that the Company is or may be subject to taxation by that jurisdiction, which claims have not expired or been resolved or withdrawn.  

(l)

FIRPTA. The Company is not and has never been a United States real property holding corporation within the meaning of Section 897(c)(2) of the Code during the applicable period specified in Section 897(c)(1)(A)(ii) of the Code.

(m)

280G Matters. Except as set forth in Section 3.9(m) of the Disclosure Schedule, there is no agreement, plan, arrangement or other Contract covering any Employee or any other “disqualified individual” (as defined in Code Section 280G and the regulations promulgated thereunder) that, considered individually or considered collectively with any other such Contracts, will, or could reasonably be expected to, give rise directly or indirectly to the payment of any amount that would not be deductible pursuant to Section 280G of the Code or that would be characterized as a “parachute payment” within the meaning of Section 280G(b)(2) of the Code. No Employee or any other “disqualified individual” (as defined in Code Section 280G and the regulations promulgated thereunder) is entitled to any payment of any tax “gross-up” or similar “make-whole” payments from the Company, including as a result of excise taxes which could become payable under Section 280G of the Code or Section 4999 of the Code. Section 3.9(m) of the Disclosure Schedule lists all persons who are “disqualified individuals” (within the meaning of Section 280G of the Code and the regulations promulgated thereunder).

(n)

Section 83(b) Matters. Except as set forth on Section 3.8 of the Disclosure Schedule, no Person holds shares of Company Capital Stock that are 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.

(o)

Change in Accounting Methods; Closing Agreements. The Company will not be required to include any item of income in, or exclude any item of deduction from, taxable income for any taxable period (or portion thereof) beginning after the First Effective Time as a result of: (i) any change in method of accounting made prior to the first Effective Time or the use of an inappropriate method of accounting prior to the First Effective Time; (ii) any gain recognition agreement within the meaning of Section 367 of the Code (or any corresponding or similar provision of state, local, or foreign Tax Law) or any closing agreement as described in Section 7121 (or any corresponding or similar provision of state, local, or foreign Tax Law) executed prior to the Effective Time; (iii) any deferred intercompany gain or excess loss accounts described in Treasury Regulations under Section 1502 of the Code (or any similar provision of state, local, or foreign Tax Law) with respect to a transaction occurring prior to the First Effective Time; (iv) any installment sale or open transaction disposition made prior to the First Effective Time; (v) any prepaid amount or deferred revenue received prior to the First Effective Time; (vi) the forgiveness of any PPP Indebtedness; or (vii) the application of Section 965(a) of the Code (or any corresponding or similar provision of state, local or foreign Tax Law). The Company has not made any election under Section 965(h) of the Code (or any corresponding or similar provision of state, local or foreign Tax Law).

(p)

Tax Accounting. The Company uses the cash method of accounting for income Tax purposes. The Company is not currently, and for any period for which a Company Tax Return has not been filed will not be, required to include any adjustment in taxable income for any taxable period (or portion thereof) beginning after the Closing Date pursuant to Section 481 or 263A of the Code (or any comparable provision under state, local or foreign Tax Law) as a result of transactions, events or accounting methods employed prior to the Mergers.

(q)

Payroll Taxes.  The Company has not (i) applied for or received any credits of any payroll or employment Taxes described in the 2020 Tax Acts nor (ii) deferred any payroll or employment Taxes pursuant to the 2020 Tax Acts.

(r)

Section 409A Matters.

(i)

Each “nonqualified deferred compensation plan” (as such term is defined in Section 409A(d)(1) of the Code) has been in documentary and operational compliance with Section 409A, such that no compensation has been required by Law to be included in the gross income of any Employee as of any date on or prior to the Effective Time as a result of the operation of Section 409A of the Code with respect to any Company Employee Plan. To the extent required by Law, the Company has properly reported and/or withheld and remitted taxes on amounts deferred under any Company nonqualified deferred compensation plan subject to Section 409A of the Code. There is no Contract to which the Company or any of its ERISA Affiliates is a party, including the provisions of this Agreement, covering any Employee of the Company, which individually or collectively could require the Company or any of its Affiliates to pay a Tax gross up payment to, or otherwise indemnify or reimburse, any Employee for Tax-related payments under Section 409A. There is no Contract, to which the Company is a party, including the provisions of this Agreement, which, individually or collectively, could give rise to Parent or Company Tax under Section 409A of the Code or that would give rise to an Employee Tax and/or Company reporting obligations under Section 409A of the Code.

(ii)

No Company Option or other stock right of the Company (as defined in U.S. Treasury Regulation 1.409A-1(l)) (A) has an exercise price that has been or may be less than the fair market value of the underlying equity as of the date such option or right was granted, (B) has any feature for the deferral of compensation other than the deferral of recognition of income until the later of exercise or disposition of such option or rights, (C) has been granted with respect to any class of stock of the Company that is not “service recipient stock” (within the meaning of applicable regulations under Section 409A), or (D) has ever been accounted for other than fully in accordance with GAAP in the Company’s audited financial statements provided to Parent.

(s)

Sales and Use Tax. The Company has collected all sales, use value-added, goods and services, harmonized sales and other similar indirect Taxes required to be collected, and has remitted such amounts to the appropriate Governmental Entity in compliance with all applicable sales and use Tax Laws (or has been furnished properly completed exemption certificates and has maintained all such records and supporting documents, in each case, in compliance with all applicable Tax Law).

(t)

Transfer Pricing. The Company is in compliance in all material respects with all applicable transfer pricing laws, including the execution and maintenance of contemporaneous documentation substantiating the transfer pricing practice and methodology. The prices for any property or services (or for the use of any property) provided by or to the Company are arm’s length prices for purposes of the relevant transfer pricing Laws, including Treasury Regulations promulgated under Section 482 of the Code.

(u)

Tax Classification. The Company is classified as a corporation for U.S. federal income Tax purposes but was treated as an “S corporation” within the meaning of Section 1361(a)(1) of the Code from its formation through July 23, 2014.

(a)

. The Company does not own and has never owned any real property nor is the Company party to any Contract to purchase or sell any real property. Section 3.10 of the Disclosure Schedule sets forth a list of all real property currently leased, subleased or licensed by or from the Company or otherwise used or occupied by the Company (the “Leased Real Property”). Section 3.10 of the Disclosure Schedule sets forth a list of all leases, lease guaranties, subleases, Contracts for the leasing, use or occupancy of, or otherwise granting a right in or relating to the Leased Real Property, including the name of the parties thereto, the date and term of the lease, license, sublease or other occupancy right, the size of the premises, the aggregate annual rent payable thereunder and all amendments, terminations and modifications thereof (the “Lease Agreements”). The Company has provided Parent with true, correct, and complete copies of all Lease Agreements. All Lease Agreements are in full force and effect and are valid and enforceable in accordance with their respective terms.  There is not, under any Lease Agreement, any existing default or event of default (or event which with notice or lapse of time, or both, would constitute a default) of the Company, or to the Company’s Knowledge, any other party thereto. The execution and delivery of this Agreement by the Company does not, and the consummation of the transactions contemplated hereby will not, result in any breach of or constitute a default (or an event that with notice or lapse of time or both would become a default) under, or materially impair the rights of the Company or alter the rights or obligations of the sublessor, lessor or licensor under, or give to others any rights of termination, amendment, acceleration or cancellation of any Lease Agreement, or otherwise adversely affect the continued use and possession of the Leased Real Property for the conduct of business as presently conducted. The Company currently occupies all of the Leased Real Property for the operation of its business. There are no other parties occupying, or with a right to occupy, the Leased Real Property. The Leased Real Property is in good operating condition and repair and are suitable for the conduct of the business as presently conducted therein (other than the Leased Real Property located at 4920 Harrison Street, which is expected to be in good operating condition and repair following the performance of certain renovations listed on Section 3.10 of the Disclosure Schedule (the “Renovations”)). The Renovations are scheduled to be performed beginning in April, 2022, provided that the funds are allocated by Parent to the Surviving LLC sufficient to perform such renovation after Closing., Except as set forth on Section 3.10 of the Disclosure Schedule, the operation of the Company on the Leased Real Property does not, nor does, to the Company’s Knowledge, such Leased Real Property, violate any Law relating to such property or operations thereon. The Company will not be required to expend more than $10,000 in causing any Leased Real Property to comply with the surrender conditions set forth in the applicable Lease Agreement.  The Company is not party to any agreement or, to the Knowledge of the Company, subject to any claim that may require the payment of any real estate brokerage commissions, and no such commission is owed with respect to any of the Leased Real Property.  The Company expects to be able to continue to have the right to occupy the Leased Real Property through the remainder of the term of the applicable Lease Agreement.   All security deposits and letters of credit given or received by the Company under the Lease Agreements remain in place in the full amounts required under the Lease Agreements and have not expired, been drawn upon or otherwise applied.  The Company has not entered into any agreement, whether written, or oral, to defer rent or any other obligation under any Lease Agreement or with respect to any Leased Real Property to any period after the Closing Date and

no rent or other obligation under a Lease Agreement or with respect to any Leased Real Property has been deferred in such manner.  The Company has performed all of its obligations under any termination agreements pursuant to which it has terminated any leases of real property that are no longer in effect and has no continuing liability with respect to such terminated real property leases.

(a)

Section 3.12(a) of the Disclosure Schedule sets forth a true, correct and complete list of all:

(i)

Company Products;

(ii)

Company IPR that is Registered Intellectual Property (“Company Registered Intellectual Property”), including for each item of Company Registered Intellectual Property (1) the jurisdiction in which such item has been registered or filed, (2) the applicable application, registration or serial number, (3) the applicable application, filing or registration date, and (4) all current owners, registrants or assignees of such item, and the nature of such Person’s ownership interest;

(iii)

Inbound Licenses, other than Contracts for (A) Open Source Licenses or Contracts primarily for granting rights or licenses with respect to Shrink-Wrap Software; (B) nondisclosure agreements entered in the ordinary course of business consistent with past practice that do not contain any licenses of Intellectual Property Rights other than limited rights to use confidential information for the purposes expressly stated therein; and (C) non-exclusive licenses of Intellectual Property Rights granted by Employees that are on a Standard Form IP Contract without material deviation; and

(iv)

Outbound Licenses, other than (A) Contracts substantially in the form of the applicable Standard Form IP Contract without material modifications that have been entered into in the ordinary course of business; (B) nondisclosure agreements entered in the ordinary course of business consistent with past practice that do not contain any licenses of Intellectual Property Rights other than limited rights to use confidential information for the purposes expressly stated therein; and (C) non-exclusive licenses of Intellectual Property Rights granted to Employees that are on a Standard Form IP Contract without material deviation.

(b)

The Company Registered Intellectual Property is valid, subsisting and enforceable.  The Company exclusively owns and possesses all right, title and interest in and to the Company IP, free and clear of all Liens or obligations to others (other than Permitted Liens).  None of the Company Registered Intellectual Property (x) has lapsed, expired or been abandoned or (y) is or was the subject of any opposition, interference, cancellation, validity challenge or other proceeding (other than routine office actions) before any Governmental Entity. To the Company’s Knowledge: (i) no Person has infringed, misappropriated, or otherwise violated, and (ii) no Person is currently infringing, misappropriating or otherwise violating, any Company IPR.  

(c)

Except as set forth on Section 3.12(c) of the Disclosure Schedule, the Company exclusively owns and possesses all right, title and interest in and to, or has a valid and enforceable and sufficient written license to, all Intellectual Property that is used in or necessary for the operation of the Business, free and clear of all Liens or obligations to others (other than Permitted Liens) (together with the Company IP the “Business Intellectual Property”), which Business Intellectual Property will, immediately after the Closing, be owned by, licensed to or available for use by the Company on terms and conditions the same in all material respects to those immediately prior to the Closing.  The Company has not granted any exclusive licenses or covenants not to sue with respect to any Company IP (including any Company Product) to any other Person.  The Company has performed all of its obligations under each IP License and Standard Form IP Contract, and each IP License is currently in full force and effect with respect to the Company.  To the Company’s Knowledge, no third Person is in default of any IP License or Standard Form IP Contract.

(d)

All Persons who independently or jointly have materially contributed to or otherwise participated in the authorship, invention, conception, creation, improvement, modification or development of any Company IP or Company Products for or on behalf of, or under the supervision of, the Company have executed and delivered to the Company a valid and enforceable written contract providing for (i) the maintenance, protection and non-disclosure by such Person of all confidential information and trade secrets of the Company and (ii) the assignment by such Person (by way of a present grant of assignment) to the Company, all Intellectual Property authored, invented, created, improved, modified or developed by such Person in the course of their employment or other engagement with the Company substantially in the form Made Available  (each, a “Proprietary Information and Assignment Agreement”).  The Company has taken reasonable steps to safeguard and maintain the secrecy of any confidential information and trade secrets owned or used by the Company.  To the Company’s knowledge, except as Made Available, there has been no violation or unauthorized access to or disclosure of any confidential information or trade secrets of or in the possession the Company, or of any written obligations with respect to such, and to the Company’s knowledge, no Person is in material breach of any contract referenced in this Section 3.12(d).

(e)

(i) The operation of the Business as conducted by the Company, including the design, development, manufacturing, reproduction, use, marketing, offer for sale, sale, importation, exportation, distribution, support or maintenance of Company Products, does not infringe, dilute misappropriate or violate, and has not infringed, diluted, misappropriated, or violated any Intellectual Property of any other Person, (ii) there is not, and there has not been during the past six (6) years any Action or other claim pending or threatened in writing, or sent or received in writing (including unsolicited offers, demands, or requests to license or cease and desist letters) by or against the Company with respect to any Intellectual Property (including any infringement, dilution, misappropriation, violation, enforceability, use (including any assertion of misuse), ownership, scope, licensing, or validity thereof), and (iii) to the Company’s Knowledge, no Person is infringing, diluting, misappropriating, or violating any Company IP.

(f)

The Company Products (other than products under development) operate substantially in accordance with the Company’s applicable documentation.  There are, and for the past three (3) years have been, no defects, technical concerns or problems in any of the Company Products (other than products under development) that would prevent the same from performing substantially in accordance with the Company’s applicable documentation, except those which have been remediated.

(g)

The Company is in compliance in all material respects with all obligations under any Contract pursuant to which the Company has obtained the right to use any third party Software, including Open Source Software, and in particular the Company has purchased a sufficient number of seat licenses or other required permissions or use rights for the Systems.

(h)

The Company has taken reasonable steps to protect its Confidential Information, and there has been no loss of or unauthorized access to or disclosure of any Confidential Information.  Except as set forth in Section 3.12(h), without limiting the foregoing, the Company has not disclosed, delivered, licensed or otherwise made available, and, the Company has no duty or obligation (whether present, contingent or otherwise) to disclose, deliver, license or otherwise make available, any Source Code authored by the Company (“Company Source Code”) to any Person, and no event has occurred, and no circumstance or condition exists, that (with or without notice or lapse of time or both) will, or would reasonably be expected to, result in the delivery, license, or disclosure of any Company Source Code to any Person who is not, as of the date the event occurs or circumstance or condition comes into existence, a current employee or contractor of the Company subject to confidentiality obligations with respect thereto.  

(i)

Section 3.12(i) of the Disclosure Schedule sets forth a list of all Open Source Software that has been used in, incorporated into, integrated or bundled with any Company Products, and for each such item of Open Source Software:  (i) the name and version number of the applicable license; (ii) the distributor or website from which the Open Source Software was obtained; and (iii) the manner in which such Open Source Software is used in, incorporated into, integrated or bundled with any Company Products.  The Company does not use and have not used any Open Source Software or any modification or derivative thereof (A) in a manner that would grant or purport to grant to any Person any rights to or immunities under any of the Company IP, or (B) under any license requiring the Company to disclose or distribute any Company Source Code, to license or provide any Company Source Code for the purpose of making derivative works, or to make available for redistribution to any Person any Company Source Code at no or minimal charge.

(j)

There is no prohibition or restriction by any Governmental Entity on the use of the Company IPR. No Governmental Entity has rights in any Company IP, except for Limited Rights in technical data and/or Restricted Rights in computer software (as each term is defined in FAR 52.227-14 and DFARS 252.227-7013 and -7014), or Small Business Innovation Research (“SBIR”) data rights in either technical data or computer software (as each term is defined in DFARS 252.227-7018), or other applicable similar rights pursuant to Government Contract clauses that are prescribed in the applicable federal acquisition regulations. No prime contractor or subcontractor at any tier under a Government Contract with the Company has been granted or otherwise is entitled to any rights in any Intellectual Property of the Company pursuant to the terms of such Government Contract with the Company or otherwise, except as required by Law. All Company Technology delivered by the Company to any Governmental Entity, including technical data, computer software and computer software documentation has been marked with included the proper restrictive legends in accordance with the terms of the applicable Government Contract and which grant the applicable Governmental Entity the most restrictive applicable license.

(k)

None of the execution, delivery or performance of this Agreement or any Related Agreement to which the Company is a party, or the consummation of any of the transactions contemplated by this Agreement or any Related Agreement will, with or without notice or the lapse of time, result in or give any other Person the right or option to cause or declare: (i) a loss of, or Lien on, any Company IP; (ii) Parent or any of its Affiliates, or the Company, becoming bound by or subject to any non-compete or other restriction on the operation or scope of their respective businesses; (iii) the release, disclosure or delivery of any Company Source Code or Source Code to any Company Products by or to any escrow agent or other Person; (iv) the grant, assignment or transfer to any other Person of any license or other right or interest under, to or in any of the Company IP or any Technology or Intellectual Property Rights of Parent or any of its Affiliates; or (v) any material increase in royalties or other payments due from the Company under any Contract or diminish or decrease any royalties or other payments to which the Company would otherwise be entitled under any Contract.

(l)

The Company is not currently and has not been a member or promoter of, or a contributor to, any industry standards body or similar organization that could require or obligate the Company to grant or offer to any other Person any license or right to any Company IP (or that could, following the Merger, require or obligate Parent or any of its Affiliates to grant or offer to any other Person any license or right to any Technology or Intellectual Property Rights of Parent or such Affiliate).

(a)

Section 3.13(a) of the Disclosure Schedule sets forth the categories of Company Data Processed by or for the Company.  The Company, the Company Technology, and, to the Company’s Knowledge, all third parties performing services for the Company (in the case of such third parties relating to the performance of services for the Company) comply, and have at all times complied, in all material respects with all applicable Data Processing Obligations.  The Company has, and at all applicable times has had, all rights and authorizations to Process Company Data as Processed by or for the Company.

(b)

All Company Privacy Policies have been Made Available.  The execution and delivery of this Agreement and any Related Agreement, the consummation of the transactions contemplated hereby and thereby, and the transfer or disclosure of all Company Data to Parent, any Subsidiary of Parent, the Surviving Corporation, or the Surviving LLC will not (i) require any notice to, or consent from, any Person nor (ii) result in any breach or violation in any material respect of any Data Processing Obligation.

(c)

There is no, and has been no, audit or actual or threatened Action against or to the Company or, to the Company’s Knowledge, any of its customers (in the case of customers, to the extent relating to the Company) by any Governmental Entity or other Person relating to (i) privacy, data protection or security, (ii) the Processing of any Company Data or (iii) the confidentiality, availability, or integrity of any Systems or Company Data.

(d)

The Company has at all times implemented, maintained, and monitored reasonable and appropriate plans, policies, and measures (including with respect to technical, administrative, and physical security) to preserve and protect the confidentiality, availability, security, and integrity of all Systems and Company Data. The Company has implemented and maintains reasonable and appropriate disaster recovery and business continuity plans, procedures, and facilities.  The Company has conducted privacy and data security testing or audits at reasonable and appropriate intervals, and has resolved or remediated any privacy or data security issues or vulnerabilities identified by or to the Company.  Except as set forth on Section 3.13(d) of the Disclosure Schedule, there has been no breach, security incident, or successful ransomware, denial of access attack, denial of service attack, hacking, or similar event with respect to any System, nor any accidental, unlawful, or unauthorized access to, or other Processing of, Company Data, and no circumstance has arisen in which Data Processing Obligations require or required the Company to notify any Governmental Entity or any other Person of any such instances.

(e)

Systems.  The Systems of the Company adequately meet the data processing and other computing needs of the business of the Company.  Within the past five (5) years, there has been no material malfunction or failure of the Systems where the root cause of such malfunction or failure was not identified and remediated in all material respects. The Company is in compliance with the requirements of DFARS 252.204-7012, Safeguarding Covered Defense Information and Cyber Incident Reporting, including, but not limited to compliance with the cybersecurity standards set forth in the National Institute of Standards and Technology (“NIST”) Special Publication 800-171, as applicable to performance of Company’s Government Contracts, except as set forth on Section 3.13(e) of the Disclosure Schedule. All facts set forth in or acknowledged by, and any representations or certifications made or submitted by or on behalf of the Company in connection with its compliance with DFARS 252.204-7012 and DFARS 252.204-7008, Compliance with Safeguarding Covered Defense Information Controls, were true and accurate at the time of submission.

(a)

Section 3.14(a) of the Disclosure Schedule identifies, as of the date of this Agreement, in each subpart that corresponds to the subsection listed below, any Contract, (x) to which the Company is a party, (y) by which the Company or any of its assets is or may become bound or under which the Company has, or may become subject to, any obligation, or (z) under which the Company has or may acquire any right or interest:

(i)

that is (A) with a Material Company Customer or (B)) that is with a Company Supplier;

(ii)

pursuant to which (A) the Company has been appointed a partner, reseller, distributor, referral agent, OEM or independent software vendor of any products or services of any other Person, or (B) the Company has appointed another party as a partner, reseller, distributor, OEM or independent software vendor of any Company Product;

(iii)

pursuant to which (A) the Company is bound to or has committed to provide any Company Product, Company IP, or any other services to any third party on a most favored nation basis or similar terms, or (B) the Company is bound to, or has committed to provide or license, any Company Product or Company IP to any third party on an exclusive basis or to acquire or license any product or service on an exclusive basis from a third party;

(iv)

imposing or purporting to impose any restriction or limit on the right or ability or freedom of the Company (or that would impose or purport to impose any restriction or limit the right or ability or freedom of Parent or any of its Affiliates after the Merger): (A) to engage in any business practices or other activities, (B) to compete with any other Person or to engage in any line of business, market or geographic area, or to sell, license, manufacture or otherwise distribute any of its technology or products, or from providing services, to customers or potential customers or any class of customers, in any geographic area, during any period of time, or in any segment of the market; (C) solicit the employment of, or hire, any potential employees, consultants, independent contractors, or other individual service providers; (D) to acquire or license any product, property or other asset (tangible or intangible), or any services, from any other Person, to sell or license any product or other asset to or perform any services for any other Person or to transact business or deal in any other manner with any other Person; or (E) to develop, license, or distribute any software or technology;

(v)

that is a data processing agreement, business associate agreement, or other Contract relating primarily to privacy, data protection, or data security obligations in connection with the Processing of Company Data;

(vi)

set forth or required to be set forth in Sections 3.12(a)(iii) or 3.12(a)(iv) of the Disclosure Schedule;

(vii)

relating to the development of any Technology (A) independently or jointly, by the Company for any other Person, or (B) for the Company, or the provision of consulting, development, sales or any other services to the Company, in each case, by any other Person, but other than agreements in the form of the applicable standard form of Proprietary Information and Assignment Agreement without material modifications;

(viii)

relating to the escrow of any Company Source Code;

(x)

that is a collectively bargained agreement or other Contract or arrangement (each a “Labor Agreement”) with any union, works council, trade union, employee representatives, personnel delegates or similar labor relations entity, labor organization or group of employees (each, a “Labor Entity”);

(xi)

that is a Contract with any current independent contractor, developer, consultant, or advisor of the Company, or with any former independent contractor, consultant or advisor of the Company under which the Company has continuing Liabilities;

(xii)

that is a Lease Agreement;

(xv)

relating to capital expenditures and involving future payments in excess of $50,000 individually or $200,000 in the aggregate (over a twelve (12) month period), exclusive if the Renovations;

(xvi)

relating to the settlement or other resolution of any Action;

(xvii)

relating to any past, present, or future disposition or acquisition of (A) any material assets outside of the ordinary course of business or (B) any interest (Equity Interest or otherwise) in any Person or other business enterprise;

(xviii)

relating to any mortgages, indentures, guarantees, pledges, performance or completion bonds, indemnity or surety arrangements, loans or credit agreements, security agreements or other Contracts or instruments relating to Indebtedness or extension of credit or the creation of any Lien (other than Permitted Liens) with respect to any asset of the Company;

(xix)

creating or relating to any partnership or joint venture or any sharing of revenues, profits, losses, costs or liabilities;

(xx)

relating to the purchase or sale of any product or other asset by or to, or the performance of any services by or for, any Interested Party;

(xxi)

(A) any Contract, including any purchase order or other transaction authority agreement, entered into between the Company and (I) any Governmental Entity, (II) any prime contractor to any Governmental Entity (in its capacity as such), or (III) any subcontractor (of any tier) with respect to any Contract described in clauses (I) and (II) (each, a “Government Contract”) or (B) any outstanding quotation, bid or proposal submitted by the Company that, if awarded, would lead to a Government Contract (each, a “Government Bid”);

(xxii)

that is with any investment banker, broker, financial advisor or similar party, or accountant, legal counsel or other Person retained by the Company in connection with this Agreement and the transactions contemplated hereby; or

(xxiii)

that relates to, or involves Liabilities or payment obligations of any party thereto, in excess of $100,000 in any given twelve (12) month period, including any Liability or payment obligation that may arise in the future upon the satisfaction or occurrence of any terms, conditions, termination, event, covenants or otherwise, in each case, that is not cancellable without penalty within ninety (90) days.

(b)

Each Contract (x) set forth in the Disclosure Schedule, (y) required to be set forth in the Disclosure Schedule (or that would have been required to be set forth in the Disclosure Schedule had such Contract been entered into prior to the date of this Agreement) in order to make the applicable representation or warranty true, correct, and complete, or (z) that is entered into in the form of or is based on a Standard Form IP Contract is referred to herein as a “Material Contract”. The Company has Made Available true, correct and complete copies of all Material Contracts, including all amendments thereto. All Material Contracts are in writing. Each Material Contract is valid and in full force and effect and is enforceable against the Company and each other party thereto in accordance with its terms, subject to Laws of general application relating to bankruptcy, insolvency and the relief of debtors; and rules of law governing specific performance, injunctive relief and other equitable remedies. The Company has not materially violated or breached, or committed any default under, any Material Contract and, to the Company’s Knowledge, no other Person that is party to a Material Contract has materially violated or breached, or committed any default under, such Material Contract. To the Knowledge of the Company, no event has occurred, and no circumstance or condition exists, that (with or without notice or lapse of time) will or could reasonably be expected to: (i) result in a material violation or breach of any of the provisions of any Material Contract; (ii) give any Person the right to declare a default or exercise any material remedy under any Material Contract; (iii) give any Person the right to accelerate the maturity or performance of any Material Contract; or (iv) give any Person the right to cancel, terminate or materially modify any Material Contract. The Company has not received any written (or, to the Knowledge of the Company, other) notice regarding any actual or alleged violation or breach of, or default under, any Material Contract. The Company has not waived any of its rights under any Material Contract. The Company has materially fulfilled all obligations required to have been performed by them pursuant to each Material Contract. No Person has threatened in writing (or, to the Knowledge of the Company, otherwise) to terminate or refuse to perform its obligations under any Material Contract (regardless of whether such Person has the right to do so under such Contract). No Person is renegotiating, or has a right pursuant to the terms of any Material Contract to renegotiate, any amount paid or payable to the Company under any Material Contract or any other material term or provision of any Material Contract.

(a)

Schedule. Section 3.15(a) of the Disclosure Schedule contains an accurate and complete list of each Company Employee Plan. No Person, other than an Employee or a current or former stockholder of the Company or any ERISA Affiliate, is or was a participant or former participant in any Company Employee Plan.  Neither the Company nor any ERISA Affiliate has made any plan or commitment to establish any new Company Employee Plan, to modify any Company Employee Plan (except to the extent required by Law or to conform any such Company Employee Plan to the requirements of any Law, in each case, as previously disclosed to Parent in writing, or as required by this Agreement), or to enter into any Company Employee Plan.

(b)

Documents. The Company and each of its ERISA Affiliates has Made Available, to the extent applicable: (i) correct and complete copies of all documents embodying each Company Employee Plan including all amendments thereto and all related trust documents, (ii) the three most recent annual reports (Form Series 5500 and all schedules and financial statements attached thereto), if any, required under ERISA or the Code in connection with each Company Employee Plan, (iii) if the Company Employee Plan is funded, the most recent annual and periodic accounting of Company Employee Plan assets, (iv) the most recent summary plan description together with the summary(ies) of all modifications thereto, if any, required under ERISA with respect to each Company Employee Plan, (v) all written Contracts relating to each Company Employee Plan, including administrative service agreements and group insurance contracts, (vi) all communications material to any Employee or Employees relating to any Company Employee Plan or proposed Company Employee Plan, in each case, relating to any amendments, terminations, establishments, increases or decreases in compensation benefits, acceleration of payments or vesting schedules or other events which would result in any Liability to the Company, (vii) all correspondence to or from any governmental agency relating to any Company Employee Plan, (viii) all model COBRA forms and related notices, (ix) all policies pertaining to fiduciary liability insurance covering the fiduciaries for each Company Employee Plan, (x) all discrimination tests for each Company Employee Plan for the three most recent plan years, and (xi) the most recent IRS determination, opinion, notification or advisory letters issued with respect to each Company Employee Plan. There is no fact, condition, or circumstance since the date the documents were provided in accordance with this Section 3.15(b) above, which would affect the information contained therein and, in particular, and without limiting the generality of the foregoing, no promises or commitments have been made to amend any Company Employee Plan or to provide increased or improved benefits thereunder or accelerate vesting or funding thereunder. No verbal promises or representations have been made to any Employees to increase their compensation or to continue their employment for any specific duration.

(c)

Employee Plan Compliance. The Company and each of its ERISA Affiliates have, in all material respects, performed all obligations required to be performed by them under, and are in compliance with, the requirements prescribed by any and all applicable Laws, are not in default or violation of, and the Company and each of its ERISA Affiliates has no Knowledge of any default or violation by any other party to, any Company Employee Plan, and each Company Employee Plan has been established and maintained, in all material respects, in accordance with its terms and all Laws (including ERISA and the Code and the regulations promulgated thereunder). With respect to any Company Employee Plan intended to be qualified under Section 401(a) of the Code, the Company has obtained a favorable determination and/or opinion letter and there has been no event, condition or circumstances that has adversely affected or is likely to adversely affect such qualified status. No “prohibited transaction,” within the meaning of Section 4975 of the Code or Sections 406 and 407 of ERISA, that is not exempt under Section 408 of ERISA, has occurred with respect to any Company Employee Plan. There are no Actions pending or threatened or reasonably anticipated (other than routine claims for benefits) against any Company Employee Plan or against the assets of any Company Employee Plan. Each Company Employee Plan can be amended, terminated or otherwise discontinued after the Effective Time in accordance with its terms, without liability as a result of such amendment termination or discontinuance to Parent, the Company or any ERISA Affiliate (other than ordinary administration expenses and benefits accrued through the date of amendment, termination or discontinuance). There are no Actions pending or threatened by the IRS, DOL, or any other Governmental Entity with respect to any Company Employee Plan. None of the Company nor any ERISA Affiliate is subject to any penalty or Tax with respect to any Company Employee Plan under Section 502(i) of ERISA or Sections 4975 through 4980 of the Code. Except as set forth on Section 3.15(c)of the Disclosure Schedule, the Company and each of its ERISA Affiliates have timely made all contributions and other payments (including, but not limited to, insurance premiums) required by and due under the terms of each Company Employee Plan.

(d)

No Pension Plan. None of the Company nor any ERISA Affiliate has ever maintained, established, sponsored, participated in, or contributed to, any Pension Plan subject to Part 3 of Subtitle B of Title I of ERISA, Title IV of ERISA or Section 412 of the Code.

(e)

No Self-Insured Plan. None of the Company nor any ERISA Affiliate has ever maintained, established, sponsored, participated in or contributed to any self-insured plan that provides benefits to Employees (including any such plan pursuant to which a stop-loss policy or contract applies).

(f)

Multiemployer and Multiple-Employer Plan, Funded Welfare Plans and MEWAs. At no time has the Company or any ERISA Affiliate contributed to or been obligated to contribute to any multiemployer plan (as defined in Section 3(37) of ERISA). None of the Company nor any ERISA Affiliate has at any time ever maintained, established, sponsored, participated in or contributed to any multiple employer plan or to any plan described in Section 413 of the Code, a “funded welfare plan” within the meaning of Section 419 of the Code, or a Multiple Employer Welfare Arrangement, as defined under Section 3(40)(A) of ERISA (without regard to Section 514(b)(6)(B) of ERISA).

(g)

No Post-Employment Obligations. Except as set forth on Section 3.15(g) of the Disclosure Schedule, no Company Employee Plan provides, or reflects or represents any liability to provide, post-termination or retiree or post-employment life insurance, health or other employee welfare benefits to any Person for any reason, except as may be required by COBRA or other applicable statute, and neither the Company nor any ERISA Affiliate has ever represented, promised or contracted (whether in oral or written form) to any Employee (either individually or to Employees as a group) or any other person that such Employee(s) or other person would be provided with life insurance, health or other employee welfare benefits, except to the extent required by COBRA (or similar state Law).

(h)

International Employee Plans.  The Company has no International Employee Plan.

(i)

Effect of Transaction. Except as set forth on Schedule 3.15(i) of the Disclosure Schedule, neither the execution and delivery of this Agreement nor the consummation of the Merger (alone or in connection with additional or subsequent events) or any termination of employment or service in connection therewith will (i) result in any payment or benefit (including severance, golden parachute, bonus or otherwise) becoming due to any Employee, (ii) result in any forgiveness of Indebtedness, (iii) materially increase any payments or benefits otherwise payable or to be provided by the Company, (iv) result in the acceleration of the time of payment, funding or vesting of any such payments or benefits except as required under Section 411(d)(3) of the Code, or (v) increase the cost to the Company or impose a loss to any Employee under any Company Employee Plan (including, but not limited to, as a result of the termination of any Company Employee Plan following the Closing.

3.16

Employment Matters

(a)

The Company has Made Available to Parent a true and complete list of all employees currently employed , or within the past twelve (12) months have had an employment similar  relationship with the Company including for each such individual: (i) name, (ii) date of commencement of services, (iii) termination date (if any), (iv)  position,  (v) status (full-time, part-time, temporary, seasonal employment, (vi)compensation level, (vii) any prior dates of service (if applicable), (viii) average hours worked per week, (ix) the location of services (city and state), (x) exemption status under the Fair Labor Standards Act and applicable state law, (xi) any commission and bonus opportunities (target and maximum) and any amounts paid with respect to the current and immediately preceding calendar years, (xii) leave status and applicable return to work date, (xiii) accrued by unused vacation or other applicable paid time off balances, of each current employee of the Company, and (xiv) confirmation as to whether a written Contract for such services exists.  The Company has Made Available a true and complete copies of each Contract with each such Person under this Section 3.15(a).

(b)

The Company has Made Available to Parent a true and complete list of all Persons that have a current or anticipated, or within the past twelve (12) months have had a, contracting, consulting, advisory, or similar relationship with the Company (including, for the avoidance of doubt, any workers leased, seconded, or outsourced from another entity) including: (i) name, (ii) date of commencement of services, (iii) termination date (if any), (iv) a description of services, (v) the affiliated third-party entity (if applicable), (vi) any fee arrangement or other compensation for services, (vii) any prior dates of service (if applicable), (viii) average hours worked per week, (ix) the location of services, and (x) notice requirements to terminate relationship, and (y) confirmation as to whether a written Contract for such services exists.  The Company has Made Available a true and complete copies of each Contract with each such Person under this Section 3.16(b).

(c)

Compliance with Employment Laws. The Company and all ERISA Affiliates are and have been in compliance, in all material respects, with all Laws and any applicable Labor Agreement respecting employment, employment practices, terms and conditions of employment, collective bargaining, worker classification (including (y) the proper classification of workers as independent contractors or consultants and (z) classification of employees as exempt or non-exempt under the Fair Labor Standards Act and other applicable Laws), Tax declaration and withholding, withholding and payment, prohibited discrimination, equal employment, fair employment practices, meal and rest periods, leave of absence, affirmative action, workers’ compensation, disability rights or benefits, employee privacy, immigration, occupational safety and health, COVID-19, wages (including overtime wages), compensation, and hours of work. The Company and all ERISA Affiliates: (i) have withheld and reported all amounts required by Law or by Contract to be withheld and reported with respect to wages, salaries and other payments to Employees, (ii) is not delinquent in payment of or otherwise liable for any arrears of wages, compensation, severance pay, bonuses, commissions, reimbursements, or any other compensation or other amounts payable to Employees or any Taxes or any penalty for failure to comply with any of the foregoing, and (iii) are not liable for any payment to any trust or other fund governed by or maintained by or on behalf of any Governmental Entity, with respect to unemployment compensation benefits, social security or other benefits or obligations for Employees (other than routine payments to be made in the normal course of business and consistent with past practice). The Company is in compliance with and has complied with all immigration laws, including Form I-9 requirements and any applicable mandatory E-Verify obligations.  All Employees are and have been eligible to legally work in the jurisdiction in which they are or were employed by or engaged to provide services to the Company.

(d)

Employment Actions. Since January 1, 2017, the Company has not been a party to any Action, and there are no currently pending or threatened Actions against the Company, any ERISA Affiliate, or any of their Employees (or applicants for employment), (a) in which the Company is or was alleged to have violated any Contract or Law related to employment, including, without limitation, equal opportunity, discrimination, retaliation, harassment, immigration, wages, hours, unpaid compensation, classification of employees as exempt from overtime or minimum wage Laws, classification of workers as independent contractors, benefits, collective bargaining, the payment of social security and similar Taxes, occupational safety and health, COVID-19 and/or privacy rights of employees or (b) relating to any Employee, any applicant for employment or other service, any Contract with any Employee or any Company Employee Plan. There are no pending or threatened Actions against Company, any ERISA Affiliate, any Company trustee under any worker’s compensation policy or long-term disability policy. Neither the Company nor any ERISA Affiliate is party to a conciliation agreement, consent decree or other Contract or Order with any federal, state, or local agency or Governmental Entity with respect to employment practices. The Company has not received any written notice of intent by any Governmental Entity responsible for the enforcement of labor or employment Laws to conduct an investigation relating to the Company, and no such investigation is in progress.  Section 3.16(d) of the Disclosure Schedule lists all Liabilities of the Company to any Employee, that result from the termination by the Company of such Employee’s employment or provision of services, other than those disclosed in Section 3.15(i), and other than ordinary administration expenses, ordinary payment of final wages and vacation pay, or bonuses, commissions or amounts under other compensation plans, that were previously earned, vested or accrued under Company Employee Plans prior to the effective time of the termination of employment.  Neither the Company nor any ERISA Affiliate has direct or indirect liability with respect to (x) any misclassification of any Person currently or formerly as an independent contractor, consultant, advisor, or similar service provider rather than as an employee, (y) any Person leased from another employer, or (z) any misclassification of any Employee currently or formerly classified as exempt from overtime wages. Neither the Company nor any ERISA Affiliate has engaged any consultants, independent contractors, subcontractors, advisors or freelancers who, according to Law, would be entitled to the rights of an employee vis‑à‑vis the Company or an ERISA Affiliate, including rights to severance pay, time off, and other employee‑related statutory benefits.

(e)

Policies. The Company has Made Available accurate and complete copies of all employee manuals and handbooks, codes of conduct, policy statements and other material documents in effect as of the date of this Agreement, and in effect for the three (3) years preceding the date of this Agreement, relating to the employment of the employees of the Company.

(f)

Labor. No strike, labor dispute, slowdown, concerted refusal to work overtime, or work stoppage or labor strike against the Company is pending threatened, or reasonably anticipated. The Company has no Knowledge of any activities or proceedings of any Labor Entity to organize any Employees. The Company has not engaged in any unfair labor practices within the meaning of the National Labor Relations Act or similar Law. The Company is not presently, nor has it been in the past, a party to, or bound by, any Labor Agreement with respect to Employees and no such agreement is being negotiated by the Company.

(g)

No Interference or Conflict. To the Company’s Knowledge, no current Employee is obligated under any Contract, or subject to any Order of any Governmental Entity, that would interfere with such Person’s efforts to promote the interests of the Company or that would interfere with the business of the Company. To the Company’s Knowledge, no Employee is, or has been alleged to be, in violation of any Contract or any non-disclosure, confidentiality, non-competition, non-solicitation, or restrictive covenant obligations with any third party relating to the services provided to the Company by such Employee. To the Company’s Knowledge, (a) the execution or delivery of this Agreement, (b) the carrying on of the Company’s business as presently conducted or proposed to be conducted, or (c) any activity of any Employee in connection with the carrying on of the Company’s business as presently conducted or currently proposed to be conducted, will not conflict with, nor result in a breach of any Contract under which any of such Employees is now bound.