Form 8-K
8-K — Columbus Circle Capital Corp II
Accession: 0001213900-26-074998
Filed: 2026-07-02
Period: 2026-06-26
CIK: 0002088805
SIC: 6770 (BLANK CHECKS)
Item: Entry into a Material Definitive Agreement
Item: Unregistered Sales of Equity Securities
Item: Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers: Compensatory Arrangements of Certain Officers
Item: Financial Statements and Exhibits
Documents
8-K — ea0296438-8k425_columbus2.htm (Primary)
EX-2.1 — BUSINESS COMBINATION AGREEMENT, DATED AS OF JUNE 26, 2026, BY AND AMONG COLUMBUS CIRCLE CAPITAL CORP. II, IPGX MERGER SUB, INC. AND ELROY AIR, INC (ea029643801ex2-1.htm)
EX-3.1 — FORM OF CERTIFICATE OF DESIGNATION RELATING TO THE 12.0% SERIES A CUMULATIVE CONVERTIBLE PREFERRED STOCK (ea029643801ex3-1.htm)
EX-4.1 — FORM OF WARRANT TO BE ISSUED TO EACH SERIES A PREFERRED STOCK INVESTOR (ea029643801ex4-1.htm)
EX-10.1 — SPONSOR SUPPORT AGREEMENT, DATED AS OF JUNE 26, 2026, BY AND AMONG COLUMBUS CIRCLE 2 SPONSOR CORPORATION LLC, COLUMBUS CIRCLE CAPITAL CORP. II AND ELROY AIR, INC (ea029643801ex10-1.htm)
EX-10.2 — STOCKHOLDER VOTING AND SUPPORT AGREEMENT, DATED AS OF JUNE 26, 2026 (ea029643801ex10-2.htm)
EX-10.3 — FORM OF SPONSOR LOCK-UP AGREEMENT (ea029643801ex10-3.htm)
EX-10.4 — FORM OF ELROY AIR LOCK-UP AGREEMENT (ea029643801ex10-4.htm)
EX-10.5 — FORM OF AMENDED AND RESTATED REGISTRATION RIGHTS AGREEMENT (ea029643801ex10-5.htm)
EX-10.6 — FORM OF SECURITIES PURCHASE AGREEMENT (ea029643801ex10-6.htm)
EX-99.1 — FORM OF PRE-FUNDED SPA (INSTITUTIONAL INVESTORS) (ea029643801ex99-1.htm)
EX-99.2 — FORM OF PRE-FUNDED SPA (OTHER INVESTORS) (ea029643801ex99-2.htm)
EX-99.3 — FORM OF PRE-FUNDED CONVERTIBLE NOTE (ea029643801ex99-3.htm)
EX-99.4 — FORM OF ELROY AIR PRE-FUNDED CONVERTIBLE NOTE INVESTOR WARRANT (INSTITUTIONAL INVESTORS) (ea029643801ex99-4.htm)
EX-99.5 — FORM OF ELROY AIR PRE-FUNDED CONVERTIBLE NOTE INVESTOR WARRANT (OTHER INVESTORS) (ea029643801ex99-5.htm)
XML — IDEA: XBRL DOCUMENT (R1.htm)
8-K — CURRENT REPORT
8-K (Primary)
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported):
June 26, 2026
Columbus Circle Capital Corp II
(Exact name of registrant as specified in its
charter)
Cayman Islands
001-43112
98-1890239
(State or other jurisdiction
of incorporation)
(Commission File Number)
(IRS Employer
Identification No.)
3 Columbus Circle, 24th Floor,
New York, NY
10019
(Address of principal executive offices, including
zip code)
Registrant’s telephone number, including
area code: (646) 792-5600
Not Applicable
(Former name or former address, if changed
since last report)
Check the appropriate box below if the Form 8-K
filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
☒ 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))
Securities registered pursuant to Section 12(b) of the Act:
Title of each
class
Trading Symbol(s)
Name of each exchange on which
registered
Units, each consisting of one Class A ordinary share and one-third of one redeemable warrant
CMIIU
The Nasdaq Stock Market LLC
Class A ordinary shares, par value $0.0001 per share
CMII
The Nasdaq Stock Market LLC
Redeemable warrants, each whole warrant exercisable for one Class A ordinary share at an exercise price of $11.50 per share
CMIIW
The Nasdaq Stock Market LLC
Indicate by check mark whether the registrant
is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the
Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company ☒
If an emerging growth company, indicate by check
mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting
standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Item 1.01. Entry Into A Material Definitive
Agreement.
Business Combination Agreement
On June 26, 2026 (the “Signing Date”), Columbus
Circle Capital Corp II, a Cayman Islands exempted company (which will be renamed Inflection Point Acquisition Corp. VII and which will
transfer by way of continuation out of the Cayman Islands and domesticate as a Delaware corporation prior to the Closing (as defined below))
(“Inflection Point” or the “Company”), entered into a Business Combination Agreement (as it may
be amended, supplemented or otherwise modified from time to time in accordance with its terms, the “Business Combination Agreement”),
by and among Inflection Point, IPGX Merger Sub, Inc., a Delaware corporation and a direct wholly owned subsidiary of Inflection Point
(“Merger Sub”), and Elroy Air, Inc., a Delaware corporation (“Elroy Air”), pursuant to which, among
other things and subject to the terms and conditions therein, Merger Sub will merge with and into Elroy Air, with Elroy Air continuing
as the surviving corporation (the “Merger”). The transactions contemplated by the Business Combination Agreement are
referred to herein as the “Business Combination.” Inflection Point and Elroy Air are each individually referred to
herein as a “Party” and, collectively, the “Parties.” In connection with the closing of the Business
Combination Agreement (the “Closing ”), Inflection Point will change its name to “Elroy Air, Inc.”
(such company after the Closing, “New Elroy Air”).
The Business Combination Agreement and the transactions contemplated
thereby were approved by the boards of directors of each of Inflection Point and Elroy Air.
The Business Combination is expected to close in the fourth quarter
of 2026, following the receipt of the required approval by Inflection Point’s shareholders, Elroy Air’s stockholders and the
fulfillment of other customary closing conditions.
The Domestication
Inflection Point will, subject to obtaining the
required shareholder approvals and at least one business day prior to the date of Closing (the “Closing Date”), change
its jurisdiction of incorporation by deregistering as a Cayman Islands exempted company and continuing and domesticating as a corporation
incorporated under the laws of the State of Delaware (the “Domestication”).
Subject to the satisfaction or waiver of the conditions of the Business
Combination Agreement, including approval of Inflection Point’s shareholders: (a) immediately prior to the Domestication, pursuant
to the Sponsor Support Agreement (as defined below), the holders of the then issued and outstanding Class B ordinary shares of Inflection
Point, par value $0.0001 per share (each, a “Cayman Class B Share”), will elect to convert each Cayman Class B Share
held by them, on a one-for-one basis, into a Class A ordinary share of Inflection Point, par value $0.0001 per share (each, a “Cayman
Class A Share” and together with the Cayman Class B Shares, the “Cayman Shares”) (the “Sponsor Share
Conversion”); and (b) in connection with the Domestication, (i) each of the then issued and outstanding Cayman Class A Shares
will convert automatically, on a one-for-one basis, into a share of common stock, par value $0.0001 per share, of Inflection Point (after
the Domestication) (the “New Elroy Air Common Stock”); (ii) each of the then issued and outstanding warrants of Inflection
Point (each, a “Cayman Purchaser Warrant”) will convert automatically into a warrant to acquire one share of New Elroy
Air Common Stock (each, a “New Elroy Air Warrant”), pursuant to the Warrant Agreement (as defined in the Business Combination
Agreement); and (iii) each of the then issued and outstanding units of Inflection Point (the “Cayman Purchaser Units”)
will be cancelled and will thereafter entitle the holder thereof to one share of New Elroy Air Common Stock and one-third (1/3) of one
New Elroy Air Warrant, with any fractional New Elroy Air Warrants to be issued in connection with such separation rounded down to the
nearest whole warrant.
The Merger and Consideration
Upon the terms and subject to the satisfaction or waiver of the conditions
of the Business Combination Agreement, at the effective time of the Merger (the “Effective Time”), Merger Sub and Elroy
Air will consummate the Merger, pursuant to which Merger Sub will be merged with and into Elroy Air, following which the separate corporate
existence of Merger Sub will cease and Elroy Air will continue as the surviving corporation after the Merger as a direct, wholly-owned
subsidiary of Inflection Point.
Immediately prior to the Effective Time:
(1)
each convertible security of Elroy Air (other than the Pre-Funded Convertible Notes (as defined below) and excluding warrants and options to purchase stock of Elroy Air), if any, that is outstanding immediately prior to the Effective Time, including all principal and interest thereunder, to the extent applicable, will automatically convert in full into shares of preferred stock of Elroy Air or shares of common stock of Elroy Air (“Elroy Air Common Stock”), in accordance with the terms thereof;
1
(2) each warrant of Elroy Air (other than the Elroy Air Pre-Funded
Convertible Note Investor Warrants (as defined below)) exercisable for preferred stock of Elroy Air, if any, that is outstanding and
unexercised immediately prior to the Effective Time will automatically be exercised on a cashless basis in full in accordance with its
terms or otherwise exercised in full; and
(3)
each warrant of Elroy Air (other than the Elroy Air Pre-Funded Convertible Note Investor Warrants) exercisable for Elroy Air Common Stock that is outstanding and unexercised immediately prior to the Effective Time will automatically be exercised on a cashless basis in full in accordance with its terms or otherwise exercised in full.
In connection with the transactions contemplated
by the Business Combination Agreement, Elroy Air entered into securities purchase agreements (the “Pre-Funded SPAs”),
with certain accredited investors named therein (collectively, the “Pre-Funded PIPE Investors”), including Inflection
Point Fund I, LP (“Inflection Point Fund”). Pursuant to the Pre-Funded SPAs, the Pre-Funded PIPE Investors agreed,
among other things, to purchase, and Elroy Air issued and sold, convertible promissory notes (the “Pre-Funded Convertible Notes”)
with an aggregate face value of approximately $78.4 million and warrants to purchase 6,531,863 shares of Elroy Air Common Stock at a purchase
price of $12.00 per share (the “Elroy Air Pre-Funded Convertible Note Investor Warrants”), substantially concurrently
with the execution and delivery of the Business Combination Agreement for an aggregate purchase price of approximately $66.6 million (the
“Pre-Funded Note Investment”).
The Pre-Funded Convertible Notes have a one-year maturity from the
date of issuance, and bear interest at the rate of 12% per annum payable 365 days after the date of the Pre-Funded Convertible Note, until
the principal amount and all interest accrued thereon are paid or converted, as provided therein. Upon the Closing, the unpaid principal
amount of each Pre-Funded Convertible Note, together with any interest accrued but unpaid thereon as of the day prior to the Closing Date,
will automatically convert into a number of fully paid and nonassessable shares of New Elroy Air Series A Preferred Stock (as defined
below) equal to the quotient of such aggregate amount divided by the applicable conversion price of $12.00 per share, as may be adjusted
pursuant to the terms and conditions of the applicable Pre-Funded Convertible Notes. Such holders will be entitled to customary registration
rights with respect to the New Elroy Air Series A Preferred Stock and any underlying shares of New Elroy Air Common Stock issuable upon
conversion thereof pursuant to the A&R Registration Rights Agreement (as defined below).
Pursuant to the Business Combination Agreement,
the aggregate consideration (the “Aggregate Base Consideration”) to be paid to the holders of securities of Elroy Air
(other than the holders of the Pre-Funded Convertible Notes, the Elroy Air Pre-Funded Convertible Note Investor Warrants and unvested
Elroy Air Options (as defined below) in respect of those securities) (the “Elroy Air Equity Holders”) in, or in connection
with, the Merger will be the number of shares of New Elroy Air Common Stock equal to the quotient of: (a) $800,000,000 (the “Purchase
Price”), divided by (b) the price (the “Redemption Price”) at which each Cayman Class A Share included
in the Cayman Purchaser Units issued in Inflection Point’s initial public offering (the “IPO”, and the shares
included in the Cayman Purchaser Units issued thereby, the “Public Shares”) may be redeemed in connection with the
Inflection Point Shareholders’ Meeting (as defined below).
The portion of the Aggregate Base Consideration
(the “Aggregate Preferred Holder Base Consideration”) to be paid to the holders of preferred stock of Elroy Air (the
“Elroy Air Preferred Equity Holders”) in, or in connection with, the Merger will be the aggregate number of shares
of New Elroy Air Common Stock equal to the greater of (a) (i) the applicable liquidation preference of the shares of preferred stock of
Elroy Air held by such Elroy Air Preferred Equity Holder, divided by (ii) the Redemption Price, or (b) (i) the number of shares of Elroy
Air Common Stock into which the shares of preferred stock of Elroy Air held by such Elroy Air Preferred Equity Holder would convert in
connection with the Merger pursuant to the organizational documents of Elroy Air, multiplied by (ii) the Common Stock Exchange Ratio (as
defined below).
The portion of the Aggregate Base Consideration
(the “Aggregate Common Holder Base Consideration”) to be paid to the Elroy Air Equity Holders (other than the Elroy
Air Preferred Equity Holders) (the “Elroy Air Common Equity Holders”) in, or in connection with, the Merger will be
a number of shares of New Elroy Air Common Stock equal to the difference of (i) the Aggregate Base Consideration, less (ii) the Aggregate
Preferred Holder Base Consideration.
The base consideration to be paid in, or in connection
with, the Merger to each holder of a Pre-Funded Convertible Note (the “Convertible Note Consideration”) will be
a number of shares of New Elroy Air’s 12.0% Series A Cumulative Convertible Preferred Stock, par value $0.0001 per share (the “New
Elroy Air Series A Preferred Stock”) equal to the quotient, rounded up to the nearest whole share, of (i) the total outstanding
principal and accrued and unpaid interest on each Pre-Funded Convertible Note as of one day prior to the Closing Date, divided by
(ii) $12.00.
The consideration to be paid in, or in connection with, the Merger
to each holder of an Elroy Air Pre-Funded Convertible Note Investor Warrant (the “Pre-Funded Convertible Note Investor Warrant
Consideration”) will be one or more warrants to purchase a number of shares of New Elroy Air Common Stock (“New Elroy
Air Series A Investor Warrants”) equal to the quotient of (i) the aggregate exercise price of such Elroy Air Pre-Funded
Convertible Note Investor Warrant immediately prior to the Effective Time, divided by (ii) $12.00.
2
Upon the terms and subject to the satisfaction
or waiver of the conditions of the Business Combination Agreement, at the Effective Time:
(1)
each share of Elroy Air Common Stock that is owned by Inflection Point, Merger Sub, or Elroy Air immediately prior to the Effective Time (each, an “Excluded Share”) will be canceled and will cease to exist and no consideration will be delivered in exchange therefor;
(2)
each share of preferred stock of Elroy Air that is issued and outstanding immediately prior to the Effective Time (other than Excluded Shares) will be canceled and converted into the right to receive, (I) a number of shares of New Elroy Air Common Stock equal to the greater of (i) the applicable liquidation preference of the shares of preferred stock of Elroy Air held by such Elroy Air Preferred Equity Holder, divided by (ii) the Redemption Price, or (B) the product of the number of shares of Elroy Air Common Stock into which the shares of preferred stock of Elroy Air held by such Elroy Air Preferred Equity Holder would convert in connection with the Merger pursuant to the organizational documents of Elroy Air, multiplied by the Common Stock Exchange Ratio and (II) the Per Share Earn-out Consideration (as defined below);
(3)
each share of Elroy Air Common Stock that is issued and outstanding immediately prior to the Effective Time (other than Excluded Shares) will be canceled and converted into the right to receive (I) a number of shares of New Elroy Air Common Stock equal to the Aggregate Common Holder Base Consideration divided by the adjusted fully diluted capital of Elroy Air, which is the sum (without duplication) of the aggregate number of shares of Elroy Air Common Stock that are (i) issued and outstanding immediately prior to the Effective Time (including those issued or issuable upon conversion of all issued and outstanding convertible securities (other than Elroy Air Options), the Pre-Funded Convertible Notes or the Elroy Air Pre-Funded Convertible Note Investor Warrants) and (ii) issuable upon full exercise of all issued and outstanding vested options of Elroy Air (calculated using the treasury method of accounting on a cashless exercise basis) (such conversion ratio, the “Common Stock Exchange Ratio”) and (II) the Per Share Earn-out Consideration;
(4)
each option to purchase equity securities of Elroy Air (each, an “Elroy Air Option”) will automatically cease to represent an option to purchase Elroy Air Common Stock and be assumed and converted on the same terms and conditions as were applicable as of the Effective Time, into an option to acquire that number of shares of New Elroy Air Common Stock (rounded down to the nearest whole share) equal to the product of (A) the number of shares of Elroy Air Common Stock subject to such Elroy Air Option and (B) the Common Stock Exchange Ratio, at an exercise price per share of Elroy Air Common Stock (rounded up to the nearest whole cent) equal to the quotient obtained by dividing (x) the exercise price per share of Elroy Air Common Stock of such Elroy Air Option by (y) the Common Stock Exchange Ratio;
(5)
each Pre-Funded Convertible Note that is outstanding immediately prior to the Effective Time will automatically be canceled and converted into the right to receive (I) the Convertible Note Consideration and (II) the Per Share Earn-out Consideration; and
(6)
each Elroy Air Pre-Funded Convertible Note Investor Warrant that is outstanding and unexercised immediately prior to the Effective Time will automatically be canceled and converted into the right to receive the Pre-Funded Convertible Note Investor Warrant Consideration.
Earnout
In addition to the Aggregate Base Consideration,
following the Business Combination, New Elroy Air will issue to the Elroy Air Equity Holders and the Pre-Funded PIPE Investors (the “Eligible
Stockholders”) up to 11,000,000 additional shares of New Elroy Common Stock (the “Earnout Shares”) in three
tranches, as follows:
● 3,000,000 shares of New Elroy Air Common Stock
if the price of one share of New Elroy Common Stock is greater than or equal to $15.00 per share for 20 days during any 30-trading day
period commencing on the one-year anniversary of the Closing and ending on the four-year anniversary of Closing;
● 3,000,000 shares of New Elroy Air Common Stock
if the price of one share of New Elroy Air Common Stock is greater than or equal to $20.00 per share for 20 trading days during any 30-trading
day period commencing at the one-year anniversary of Closing and ending on the four-year anniversary of Closing;
● 5,000,000 shares of New Elroy Air Common Stock
if the Organic Revenue (as defined in the Business Combination Agreement) for New Elroy Air during any trailing two (2) quarter period
ending not later than June 30, 2028 equals or exceeds $50,000,000.
If and when vested, each Eligible Stockholders
will be entitled to receive a number of Earnout Shares equal to the quotient of (i) the Earnout Shares divided by (ii) the fully diluted
capital of Elroy Air, which is the sum (without duplication) of the aggregate number of shares of Elroy Air Common Stock that are (i) issued
and outstanding immediately prior to the Effective Time (including those issued or issuable upon conversion of all issued and outstanding
convertible securities, the Pre-Funded Convertible Notes or the Elroy Air Pre-Funded Convertible Note Investor Warrants) (ii) issuable
upon full exercise of all issued and outstanding vested options of Elroy Air (calculated using the treasury method of accounting on a
cashless exercise basis) and (iii) all shares of New Elroy Common Stock issuable upon conversion of the New Elroy Series A Preferred Stock
issued as Convertible Note Consideration in the Merger (the “Per Share Earn-out Consideration”).
3
Governance
The Parties have agreed to take all necessary
action, including Inflection Point using reasonable best efforts to cause the current directors of Inflection Point that are not to remain
directors on the New Elroy Air Board (as defined below) to resign, so that effective at the Closing, the board of directors of New Elroy
Air (the “New Elroy Air Board”) will consist of seven individuals. Immediately after the Closing, Inflection Point
and Elroy Air will take all action within their power as may be necessary or appropriate to designate and appoint to the New Elroy Air
Board (i) one person that is designated by the Chief Executive Officer of Inflection Point prior to the Closing and (ii) the remaining
persons, all of whom will be designated by Elroy Air prior to the Closing. The New Elroy Air Board will meet the applicable independence
and other requirements of applicable rules of the Nasdaq Stock Market LLC (“Nasdaq”) and the U.S. Securities and Exchange
Commission (the “SEC”).
Representations and Warranties; Covenants
The Parties have made customary representations,
warranties, and covenants in the Business Combination Agreement, including, among others, covenants with respect to the conduct of Inflection
Point and Elroy Air prior to the Closing Date. In addition, Inflection Point and Elroy Air have agreed to use their commercially reasonable
efforts to agree, prior to Closing, to a form of equity incentive plan that provides for the grant of equity and equity-based incentive
awards to eligible service providers of Elroy Air following the Closing.
Conditions to Each Party’s Obligations
The obligations of Inflection Point and Elroy
Air to consummate the Business Combination are subject to the satisfaction or waiver of certain customary closing conditions, including
without limitation the following mutual conditions applicable to each Party: (i) the adoption and/or approval, as applicable, by Inflection
Point’s shareholders of the Purchaser Shareholder Approval (as defined in the Business Combination Agreement); (ii) the approval
of the Business Combination Agreement and the Business Combination (including the Merger) by the affirmative vote or written consent of
the stockholders of Elroy Air, pursuant to the terms and in accordance with satisfaction of the conditions of the organizational documents
of Elroy Air and applicable law; (iii) no adverse law or order; (iv) all government filings and/or consents shall have been made or obtained
and shall be in full force and effect, and any applicable waiting period (and any extension thereof) under any applicable law shall have
expired or been terminated; (v) the registration statement on Form S-4, or other appropriate form (the “Registration Statement”)
to be filed by the Parties becoming effective under the Securities Act of 1933, as amended (the “Securities Act”),
and remaining effective as of the Closing, with no stop order or similar order suspending its effectiveness; and (vi) the New Elroy Air
Common Stock having been conditionally approved for listing upon Closing on Nasdaq, subject to certain conditions and exceptions as described
in the Business Combination Agreement.
In addition to the foregoing mutual conditions,
the obligations of Elroy Air to consummate the Business Combination are subject to the satisfaction or waiver of the following additional
conditions: (i) the truth and accuracy of the representations and warranties of Inflection Point and Merger Sub, subject to the materiality
standards contained in the Business Combination Agreement; (ii) material compliance by Inflection Point and Merger Sub with their respective
agreements and covenants under the Business Combination Agreement; (iii) no Purchaser Material Adverse Effect (as defined in the Business
Combination Agreement) having occurred; (iv) the Domestication having been completed and a time-stamped copy of the certificate issued
by the Secretary of State of the State of Delaware in relation thereto having been delivered to Elroy; (v) Inflection Point having made
the arrangements to have the proceeds remaining in the Trust Account (after giving effect to the Redemption) (each as defined in the Business
Combination Agreement) available to Inflection Point at the Closing; (vi) all action on the part of Inflection Point to constitute the
New Elroy Board as described above having been taken; (vii) the delivery to Elroy of copies of the executed A&R Registration Rights
Agreement (as defined below) and Sponsor Lock-up Agreement (as defined below), duly executed by Inflection Point and the Sponsor; and
(viii) receipt of a customary officer’s certificate of Inflection Point, certifying the satisfaction of the conditions listed in
clauses (i) through (iii) above.
In addition to the mutual conditions described
above, the obligations of Inflection Point to consummate the Business Combination are subject to the satisfaction or waiver of the following
additional conditions: (i) the truth and accuracy of the representations and warranties of Elroy Air, subject to the materiality standards
contained in the Business Combination Agreement; (ii) material compliance by Elroy Air with its agreements and covenants under the Business
Combination Agreement; (iii) no Company Material Adverse Effect (as defined in the Business Combination Agreement) having occurred; (iv)
the delivery to Inflection Point of copies of the executed A&R Registration Rights Agreement duly executed by the applicable stockholders,
properly completed tax forms for each Elroy Air Equity Holder, a properly completed and duly executed FIRPTA certificate and the Elroy
Air Lock-up Agreement (as defined below), duly executed by the Lock-Up Holders (as defined below); (v) a duly executed pay-off letters
certifying that certain indebtedness of Elroy Air will have been paid off, to the extent it is paid off pursuant to the Business Combination
Agreement and evidence of the release of all liens securing such indebtedness.
Termination
The Business Combination Agreement may be terminated
under certain customary and limited circumstances at any time prior to the Closing, including, among others, (i) by mutual written consent
of the Parties; (ii) by Elroy Air if the board of directors of Inflection Point, except as required by applicable law, withdraws, amends,
qualifies or modifies its recommendation to the shareholders of Inflection Point to make certain approvals, as described in the Business
Combination Agreement; (iii) by either Inflection Point or Elroy Air if the Closing has not occurred on or before June 26, 2027; and (iv)
by Elroy Air if the Inflection Point Shareholder Approval is not obtained by Inflection Point after the conclusion of the extraordinary
general meeting of Inflection Point’s shareholders (the “Inflection Point Shareholders’ Meeting”) held
for the purpose of voting on the Transaction Proposals.
4
The foregoing description of the Business Combination
Agreement, the Business Combination and the related transactions does not purport to be complete and is qualified in its entirety by
the terms and conditions of the Business Combination Agreement, a copy of which is filed with this Current Report on Form 8-K as Exhibit
2.1 and is incorporated herein by reference. The Business Combination Agreement contains representations, warranties and covenants that
the parties to the Business Combination Agreement made to each other as of the date of the Business Combination Agreement or other specific
dates. The assertions embodied in those representations, warranties and covenants were made for purposes of the contract among the parties
and are subject to important qualifications and limitations agreed to by the parties in connection with negotiating the Business Combination
Agreement. The Business Combination Agreement has been attached to provide investors with information regarding its terms and is not
intended to provide any other factual information about Inflection Point or Elroy Air. In particular, the representations, warranties,
covenants and agreements contained in the Business Combination Agreement, which were made only for purposes of the Business Combination
Agreement and as of specific dates, were solely for the benefit of the parties to the Business Combination Agreement, may be subject
to limitations agreed upon by the contracting parties (including being qualified by confidential disclosures made for the purposes of
allocating contractual risk between the parties to the Business Combination Agreement instead of establishing these matters as facts)
and may be subject to standards of materiality applicable to the contracting parties that differ from those applicable to investors and
reports and documents filed with the SEC. Investors should not rely on the representations, warranties, covenants and agreements, or
any descriptions thereof, as characterizations of the actual state of facts or condition of any party to the Business Combination Agreement.
In addition, the representations, warranties, covenants and agreements and other terms of the Business Combination Agreement may be subject
to subsequent waiver or modification. Moreover, information concerning the subject matter of the representations and warranties and other
terms may change after the date of the Business Combination Agreement, which subsequent information may or may not be fully reflected
in Inflection Point’s public disclosures.
The foregoing description of the Pre-Funded Note
Investment is subject to and qualified in its entirety by reference to (i) the full text of the Pre-Funded SPAs, a copy of the forms of
which are included as Exhibits 99.1 and 99.2 to this Current Report on Form 8-K, (ii) the full text of the form of Pre-Funded Convertible
Note, a copy of which is attached as Exhibit 99.3 to this Current Report on Form 8-K, and (iii) the full text of the forms of Elroy Air
Pre-Funded Convertible Note Investor Warrants, copies of the forms of which are attached as Exhibits 99.4 and 99.5 to this Current Report
on Form 8-K, and the terms of each of which are incorporated herein by reference.
Sponsor Support Agreement
Concurrently with the execution of the Business
Combination Agreement, Inflection Point entered into the Sponsor Support Agreement (the “Sponsor Support Agreement”)
with Elroy Air and Columbus Circle 2 Sponsor Corporation LLC (the “Sponsor”), pursuant to which the Sponsor agreed
to, among other things, (i) vote in favor of adoption of the Transaction Proposals, (ii) vote against any Alternative Transaction (as
defined in the Business Combination Agreement) and any merger agreement or merger other than the Transaction Proposals, the Business Combination
Agreement and the Business Combination; (iii) vote against any change in the business, management, or board of directors of Inflection
Point (other than in connection with the Transaction Proposals or pursuant to the Business Combination Agreement or ancillary agreements)
and (iv) vote against any proposal, action or agreement that would (A) impede, interfere, frustrate, prevent or nullify any provision
of the Sponsor Support Agreement, the Business Combination Agreement or the Business Combination, (B) result in a breach in any respect
of any covenant, representation, warranty or any other obligation or agreement of Inflection Point under the Business Combination Agreement,
(C) result in any of the closing conditions of the Business Combination Agreement not being fulfilled, (D) result in a breach of any covenant,
representation or warranty or other obligation or agreement of the Sponsor contained in the Sponsor Support Agreement or (E) change in
any manner the dividend policy or capitalization of, including the voting rights of any class of capital stock of, Inflection Point. Certain
current and former officers and directors of Inflection Point previously entered into a letter agreement with Inflection Point in connection
with Inflection Point’s initial public offering, pursuant to which they agreed to vote any Inflection Point ordinary shares held
by them in favor of the Business Combination.
Pursuant to the Sponsor Support Agreement, until
the earliest of the Closing, termination of the Business Combination Agreement or the liquidation of Inflection Point, the Sponsor shall
not (i) sell, offer to sell, contract or agree to sell, hypothecate, pledge, grant any option to purchase or otherwise dispose of or agree
to dispose of, directly or indirectly, any Subject Securities (as defined in the Sponsor Support Agreement) owned by the Sponsor, or (ii)
enter into any swap or other arrangement that transfers to another, in whole or in part, any of the economic consequences of ownership
of any Subject Securities owned by the Sponsor without the prior written consent of Elroy Air, unless such transfer is deemed a Permitted
Transfer (as defined in the Sponsor Support Agreement).
In addition, pursuant to the Sponsor Support Agreement,
the Sponsor has agreed not to commence, join in, facilitate, assist or encourage, and has agreed to take all actions necessary to opt
out of any class in any class action with respect to, any claim, derivative or otherwise, against Inflection Point, Elroy Air or any of
their respective successors or directors, (a) challenging the validity of, or seeking to enjoin the operation of, any provision of the
Sponsor Support Agreement or (b) alleging a breach of any fiduciary duty of any person in connection with the evaluation, negotiation
or entry into the Sponsor Support Agreement, the Business Combination Agreement or the Business Combination.
Furthermore, pursuant to the Sponsor Support Agreement,
the Sponsor agreed to waive, subject to the consummation of the Business Combination, any and all anti-dilution rights with respect to
the rate at which the Cayman Class B Shares convert into Cayman Class A Shares in connection with the transactions contemplated by the
Business Combination Agreement.
The foregoing description of the Sponsor Support Agreement does not
purport to be complete and is qualified in its entirety by reference to the full text of the Sponsor Support Agreement, a copy of which
is included as Exhibit 10.1 hereto, and the terms of which are incorporated herein by reference.
5
Stockholder Voting and Support Agreement
Concurrently with the execution of the Business
Combination Agreement, certain holders of equity securities of Elroy Air collectively holding such number of shares of Elroy Air Common
Stock and preferred stock of Elroy Air as is necessary to approve the Business Combination and the other matters specified below (the
“Requisite Elroy Air Stockholders”) and Elroy Air entered into the Voting and Support Agreement (the “Stockholder
Voting and Support Agreement”), pursuant to which the Requisite Elroy Air Stockholders have agreed to, among other things, vote
(or act by written consent) (a) to approve and adopt the Business Combination Agreement and the consummation of the Business Combination;
(b) against any Alternative Transaction or any proposal relating to an Alternative Transaction; (c) against any merger agreement or merger
(other than the Business Combination Agreement and the Business Combination), consolidation, combination, sale of substantial assets,
reorganization, recapitalization, dissolution, liquidation or winding up of or by Elroy Air; (d) against any change in the business, management
or board of directors of Elroy Air (other than in connection with the Transaction Proposals or pursuant to the Business Combination Agreement
or the Ancillary Documents (as defined in the Business Combination Agreement)); (e) against any proposal, action or agreement that would
(A) impede, interfere, frustrate, prevent or nullify any provision of the Stockholder Voting and Support Agreement, the Business Combination
Agreement, the Charter Amendment (as defined below) or the Business Combination, (B) result in a breach in any respect of any covenant,
representation, warranty or any other obligation or agreement of Elroy Air under the Business Combination Agreement, (C) result in any
of the closing conditions of the Business Combination Agreement not being fulfilled, (D) result in a breach of any covenant, representation
or warranty or other obligation or agreement of such stockholder contained in the Stockholder Voting and Support Agreement or (E) change
in any manner the dividend policy or capitalization of, including the voting rights of any class of capital stock of, Elroy Air (other
than pursuant to the Charter Amendment); (f) to convert all outstanding shares of preferred stock of Elroy Air into Elroy Air Common Stock
as of immediately prior to the Effective Time, conditioned upon and subject to the closing of the Business Combination, in accordance
with the organizational documents of Elroy Air (as amended by the Charter Amendment); (g) to approve and adopt an amendment to Elroy Air’s
certificate of incorporation (the “Charter Amendment”) to, among other things, revise the conversion prices applicable
to each series of preferred stock of Elroy Air; (h) to approve the Business Combination as may be required to satisfy the approval requirements
in Section 3.3 of Elroy Air’s certificate of incorporation; and (i) to the extent such Elroy Air Equity Holder is a stockholder
of Elroy Air that does not hold any shares of preferred stock of Elroy Air (a “Disinterested Common Stockholder”),
to vote all shares of Elroy Air Common Stock held by such stockholder in favor of the Charter Amendment in satisfaction of the Disinterested
Common Stockholder approval requirement.
Pursuant to the Stockholder Voting and Support
Agreement, until the earliest of the Closing, termination of the Business Combination Agreement or the liquidation of Elroy Air, the Requisite
Elroy Air Stockholders have agreed not to (i) sell, offer to sell, contract or agree to sell, hypothecate, pledge, grant any option to
purchase or otherwise dispose of or agree to dispose of, directly or indirectly, any Subject Securities (as defined in the Stockholder
Voting and Support Agreement), (ii) enter into any swap or other arrangement that transfers to another, in whole or in part, any of the
economic consequences of ownership of any Subject Securities without the prior written consent of Elroy Air and Inflection Point, unless
such transfer is deemed a Permitted Transfer (as defined in the Stockholder Voting and Support Agreement).
In addition, pursuant to the Stockholder Voting
and Support Agreement, the Requisite Elroy Air Stockholders have agreed not to commence, join in, facilitate, assist or encourage, and
have agreed to take all actions necessary to opt out of any class in any class action with respect to, any claim, derivative or otherwise,
against Inflection Point, Elroy Air or any of their respective successors or directors, (a) challenging the validity of, or seeking to
enjoin the operation of, any provision of the Stockholder Voting and Support Agreement or (b) alleging a breach of any fiduciary duty
of any person in connection with the evaluation, negotiation or entry into the Stockholder Voting and Support Agreement, the Business
Combination Agreement or the Business Combination. Each of the Requisite Elroy Air Stockholders has also waived and agreed not to exercise
any rights of appraisal or rights to dissent from the Business Combination that they may have in respect of the Subject Securities.
The foregoing description of the Stockholder Voting and Support Agreement
does not purport to be complete and is qualified in its entirety by the terms and conditions of the form of Stockholder Voting and Support
Agreement, a copy of which is included as Exhibit 10.2 hereto, and the terms of which are incorporated herein by reference.
6
Lock-Up Agreements
Sponsor Lock-Up Agreement
At the Closing, the Sponsor, Cohen & Company
Securities, LLC (“CCM”), Clear Street LLC (“Clear Street”) and New Elroy Air will enter into a Lock-Up
Agreement (the “Sponsor Lock-Up Agreement”), pursuant to which the Sponsor, CCM, Clear Street and their respective
permitted assigns (collectively, the “Sponsor Lock-Up Securityholders”) will agree (x) with respect to any shares of
New Elroy Air Common Stock received by the Sponsor upon conversion of its Cayman Class B Shares in connection with the Domestication (the
“Founder Shares”), prior to the earlier of (A) six months after the Closing Date and (B) the date on which the New
Elroy Air Common Stock has closed at or above $12.00 per share for 20 trading days during any 30-trading day period commencing at least
30 days after the Closing Date, or (y) with respect to any shares of New Elroy Air Common Stock issued upon cancellation of the Cayman
Purchaser Units held by the Sponsor Lock-Up Securityholders (the “Unit Shares”), any warrants issued upon separation
and conversion of the Cayman Purchaser Units held by the Sponsor Lock-Up Securityholders (the “Lock-Up Warrants”) and
any shares of New Elroy Air Common Stock issuable upon exercise of the Lock-Up Warrants (the “Warrant Shares” and,
together with the Founder Shares, the Unit Shares and the Lock-Up Warrants, the “Sponsor Lock-Up Securities”), prior
to the date that is 30 days after the Closing Date, not to, without the prior written consent of the New Elroy Air Board, (a) sell, pledge,
grant any option to purchase or otherwise dispose of, (b) enter into any swap or other transfer arrangement in respect of the Sponsor
Lock-Up Securities or (c) take any action in furtherance of any of the matters described in the foregoing clauses (a) or (b) or. The Sponsor
Lock-Up Agreement provides for certain permitted transfers, including but not limited to, transfers to certain affiliates or family members,
transfers of shares acquired on the open market after the consummation of the Business Combination, subject to certain conditions, or
the exercise of certain stock options.
Elroy Air Lock-Up Agreement
At the Closing, New Elroy Air and the equity holders
of Elroy Air who will received, or would receive upon exercise of the Exchanged Options, at least 1% of the Aggregate Base Consideration
and Earnout Shares (the “Lock-Up Holders”) will enter into a Lock-Up Agreement (the “Elroy Air Lock-Up Agreement”),
pursuant to which the Lock-Up Holders and their respective permitted assigns will agree not to, without the prior written consent of the
New Elroy Air Board, Transfer (as defined in the Elroy Air Lock-Up Agreement) any shares of New Elroy Air Common Stock held immediately
after the consummation of the Business Combination, any shares of New Elroy Air Common Stock issuable upon exercise of options to purchase
shares of New Elroy Air Common Stock held immediately after the consummation of the Business Combination, or any securities convertible
into, or exercisable, redeemable or exchangeable for, New Elroy Air Common Stock held by such holder immediately after the consummation
of the Business Combination (collectively, the “Lock-Up Shares”), prior to the earlier of (A) six months after the
consummation of the Business Combination and (B) the date on which the New Elroy Air Common Stock has closed at or above $12.00 per share
for 20 trading days during any 30-trading day period commencing at least 30 days after the consummation of the Business Combination. The
Elroy Air Lock-Up Agreement provides for certain permitted transfers, including but not limited to, transfers to certain affiliates or
family members, transfers of shares acquired on the open market after the consummation of the Business Combination, subject to certain
conditions, or the exercise of certain stock options.
The foregoing descriptions of each of the Sponsor
Lock-up Agreement and the Elroy Air Lock-up Agreement do not purport to be complete and are qualified in their entirety by reference to
the full text of (i) the form of Sponsor Lock-up Agreement, a copy of which is attached as Exhibit 10.3 hereto, and the terms of which
are incorporated herein by reference and (ii) the form of Elroy Air Lock-Up Agreement, a copy of which is attached as Exhibit 10.4 hereto,
and the terms of which are incorporated herein by reference.
Amended and Restated Registration Rights Agreement
At the Closing, Inflection Point, the Sponsor,
the Series A Preferred Stock Investors and certain securityholders of Elroy Air will enter into an amended and restated registration rights
agreement (the “A&R Registration Rights Agreement”), pursuant to which, among other things, the Sponsor, the Series
A Preferred Stock Investors and such securityholders will be granted certain customary registration rights, on the terms and subject to
the conditions therein, with respect to securities of New Elroy Air that they will hold following the Business Combination.
The foregoing description of the A&R Registration Rights Agreement
does not purport to be complete and is qualified in its entirety by reference to the full text of the form of A&R Registration Rights
Agreement, a copy of which is attached as Exhibit 10.5 hereto, and the terms of which are incorporated herein by reference.
7
Series A Preferred Stock Investment
In connection with the transactions contemplated
by the Business Combination Agreement, on the Signing Date, Inflection Point, Elroy Air and the accredited investor named therein (the
“Series A Preferred Stock Investor”) entered into the Securities Purchase Agreement (the “Series A SPA”).
Pursuant to the Series A SPA, the Series A Preferred Stock Investors has agreed, among other things, to purchase, at Closing, 9,803,922
shares of New Elroy Air Series A Preferred Stock, having the rights, preferences and privileges set forth in the Certificate of
Designation of Preferences, Rights and Limitations of 12.0% Series A Cumulative Convertible Preferred Stock (the “Certificate
of Designation”) and a warrant to purchase an aggregate of 9,803,922 shares of New Elroy Air Common Stock (each, a “Series
A Preferred Investor Warrant”), for an aggregate purchase price of $100 million (such investment, the “PIPE Investment”).
Each share of New Quantum Space Series A Preferred Stock will have a stated value of $12.00 (the “Stated Value”).
In addition, in consideration for the Series A
Preferred Stock Investor’s investment, (i) New Elroy Air will issue 750,000 shares of New Elroy Air Common Stock to the Series A
Preferred Stock Investors upon Closing and (ii) Inflection Point will cause the applicable holders to transfer to the Series A Preferred
Stock Investor 501,649 shares of Common Stock issued or issuable to the Sponsor in respect of the Founder Shares, 448,351 Unit Shares
and 149,450 Lock-Up Warrants upon Closing.
The Series A SPA includes customary representations
and warranties from Elroy Air, Inflection Point and the Series A Preferred Stock Investors and are subject to customary closing conditions.
The Series A SPA also includes customary covenants and agreements related to transfer restrictions, SEC reports, material non-public information
and indemnification. New Elroy Air Common Stock issuable upon conversion of the New Elroy Air Series A Preferred Stock and New Elroy Air
Common Stock underlying any Series A Preferred Investor Warrants will be deemed to be “Registrable Securities” under the A&R
Registration Rights Agreement.
Dividends: The New Elroy Air Series A Preferred
Stock will accrue dividends daily at the rate of 12% per annum of the Accrued Value (as defined in the Certificate of Designation) (if
paid in kind), plus the amount of previously accrued dividends paid in kind, or 10% per annum of the Accrued Value (if paid in cash),
plus the amount of previously accrued dividends paid in kind. Such dividends will compound semi-annually.
Liquidation Preference: Upon any liquidation
or deemed liquidation event, the holders of New Elroy Air Series A Preferred Stock will be entitled to receive out of the available proceeds,
before any distribution is made to holders of common stock or any other junior securities of New Elroy Air, an amount per share equal
to 100% of the Accrued Value on each share of New Elroy Air Series A Preferred Stock. Thereafter, the holders of New Elroy Air Series
A Preferred Stock will be entitled to receive their pro-rata share of the remaining available proceeds available for distribution to stockholders,
on an as-converted to common stock basis.
Protective Provisions: For as long as
at least 20% of the shares of New Elroy Air Series A Preferred Stock issued as of the Closing are outstanding, New Elroy Air will not,
without the affirmative vote or action by written consent of holders of more than 50% of the issued and outstanding shares of New Elroy
Air Series A Preferred Stock, which must include Inflection Point Asset Management LLC or its affiliates, to the extent such holders
then hold New Elroy Air Series A Preferred Stock (the “Required Holders”), take any of the following actions: (i)
liquidate, dissolve or wind up the affairs of New Elroy Air; (ii) amend, alter, or repeal any provision of the certificate of incorporation,
bylaws, Certificate of Designation or any similar document of New Elroy Air in a manner adverse to the New Elroy Air Series A Preferred
Stock; (iii) create or authorize the creation of or issue any other security convertible into or exercisable for any equity security
unless such security ranks junior to the New Elroy Air Series A Preferred Stock with respect to its rights, preferences and privileges,
or increase the authorized number of shares of New Elroy Air Series A Preferred Stock; (iv) purchase or redeem or pay any cash dividend
on any capital stock ranking junior to the New Elroy Air Series A Preferred Stock prior to payment of such cash dividend on the New Elroy
Air Series A Preferred Stock or purchase or redeem any capital stock ranking junior to the New Elroy Air Series A Preferred Stock, other
than stock repurchased at cost from former employees and consultants in connection with the cessation of their service; (v) enter into
any transaction with an affiliate, other than the issuance of equity or awards to eligible participants under New Elroy Air’s incentive
plan, equity plan or equity-based compensation plan, or with respect to employment, consulting or award agreements with respect to executive
officers of New Elroy Air, in each case regardless of whether such person (or such person’s affiliates) would be considered an
affiliate of New Elroy Air; or (vi) incur or guarantee any indebtedness, other than equipment leases or trade payables incurred in the
ordinary course of business; provided, however, that the New Elroy Air Series A Preferred Stock will not be considered indebtedness for
purposes of this calculation.
8
Conversion: Each share of New Elroy Air
Series A Preferred Stock will be convertible into New Elroy Air Common Stock at any time at the option of the holder at a rate equal to
the Accrued Value, divided by the then-applicable conversion price. The conversion price will initially be $12.00, subject to adjustments
for stock dividends, splits, combinations and similar events and full-ratchet anti-dilution adjustments, including with respect to future
issuances or sales of New Elroy Air Common Stock at prices less than the conversion price then in effect. In addition, if the 20-day volume-weighted
average price of the New Elroy Air Common Stock on the twenty-first trading day following the date that is six months after the Closing
Date is less than the conversion price then in effect, the conversion price will be adjusted to the greater of (i) such volume weighted
average price and (ii) $5.00.
Put Rights: Unless prohibited by applicable
law governing distributions to stockholders, the New Elroy Air Series A Preferred Stock will be redeemable at the option of the Required
Holders commencing any time after the 5th anniversary of the Closing at a price equal to the Accrued Value.
Call Rights: Unless prohibited by applicable
law governing distributions to stockholders, subject to the conditions set forth in the Certificate of Designation, the New Elroy Air
Series A Preferred Stock will be redeemable at the option of New Elroy Air commencing any time:
(A) prior to the first anniversary of the Closing at a price equal to the greater of (i) 150% of the Accrued
Value (which will be payable in cash) and (ii) such amount per share as would have been payable had all shares of New Elroy Air Series
A Preferred Stock been converted into New Elroy Air Common Stock immediately prior to such redemption based on the then effective rate
of conversion (which will be payable, at the option of New Elroy Air, in cash or shares of New Elroy Air Common Stock or a combination
thereof, with the value of such shares of New Elroy Air Common Stock being the closing price of such shares of New Elroy Air Common Stock
on the principal trading market on the applicable date of redemption);
(B) on or after the first anniversary but prior to the second anniversary of the Closing at a price equal
to the greater of (i) 140% of the Accrued Value (which will be payable in cash) and (ii) such amount per share as would have been payable
had all shares of New Elroy Air Series A Preferred Stock been converted into New Elroy Air Common Stock immediately prior to such redemption
based on the then effective rate of conversion (which will be payable, at the option of New Elroy Air, in cash or shares of New Elroy
Air Common Stock or a combination thereof, with the value of such shares of New Elroy Air Common Stock being the closing price of such
shares of New Elroy Air Common Stock on the principal trading market on the applicable date of redemption);
(C) on or after the second anniversary of the Closing but prior to the third anniversary of the Closing at
a price equal to the greater of (i) 130% of the Accrued Value (which will be payable in cash) and (ii) such amount per share as would
have been payable had all shares of New Elroy Air Series A Preferred Stock been converted into New Elroy Air Common Stock immediately
prior to such redemption based on the then effective rate of conversion (which will be payable, at the option of New Elroy Air, in cash
or shares of New Elroy Air Common Stock or a combination thereof, with the value of such shares of New Elroy Air Common Stock being the
closing price of such shares of New Elroy Air Common Stock on the principal trading market on the applicable date of redemption);
(D) on or after the third anniversary of the Closing but prior to the fourth anniversary of the Closing at
a price equal to the greater of (i) 120% of the Accrued Value (which will be payable in cash) and (ii) such amount per share as would
have been payable had all shares of New Elroy Air Series A Preferred Stock been converted into New Elroy Air Common Stock immediately
prior to such redemption based on the then effective rate of conversion (which will be payable, at the option of New Elroy Air, in cash
or shares of New Elroy Air Common Stock or a combination thereof, with the value of such shares of New Elroy Air Common Stock being the
closing price of such shares of New Elroy Air Common Stock on the principal trading market on the applicable date of redemption);
(E) on or after the fourth anniversary of the Closing but prior to the fifth anniversary of the Closing at
a price equal to the greater of (i) 110% of the Accrued Value (which will be payable in cash) and (ii) such amount per share as would
have been payable had all shares of New Elroy Air Series A Preferred Stock been converted into New Elroy Air Common Stock immediately
prior to such redemption based on the then effective rate of conversion (which will be payable, at the option of New Elroy Air, in cash
or shares of New Elroy Air Common Stock or a combination thereof, with the value of such shares of New Elroy Air Common Stock being the
closing price of such shares of New Elroy Air Common Stock on the principal trading market on the applicable date of redemption); or
(F) on or after the fifth anniversary of the Closing at a price
equal to the greater of (i) 100% of the Accrued Value (which will be payable in cash) and (ii) such amount per share as would have been
payable had all shares of New Elroy Air Series A Preferred Stock been converted into New Elroy Air Common Stock immediately prior to
such redemption based on the then effective rate of conversion (which will be payable, at the option of New Elroy Air, in cash or shares
of New Elroy Air Common Stock or a combination thereof, with the value of such shares of New Elroy Air Common Stock being the closing
price of such shares of New Elroy Air Common Stock on the principal trading market on the applicable date of redemption).
Voting: The New Elroy Air Series A Preferred Stock will vote together with
the New Elroy Air Common Stock as a single class, except as required by law and as noted above under “Protective Provisions.”
Each holder of New Elroy Air Series A Preferred Stock will be entitled to cast the number of votes equal to the number of whole shares
of New Elroy Air Common Stock into which the shares of New Elroy Air Series A Preferred Stock held by such holder are convertible as of
the record date for determining stockholders entitled to vote on such matter.
9
Series A Preferred Investor Warrants:
At the closing of the PIPE Investment, the Series A Preferred Stock
Investor will receive a Series A Preferred Investor Warrant to purchase up to 9,803,922 shares of New Elroy Air Common Stock. The Series
A Preferred Investor Warrants will be immediately exercisable upon issuance at Closing and will expire five years from the date of Closing.
The Series A Preferred Investor Warrants include customary cash and cashless exercise provisions. Each Series A Preferred Investor Warrant
is initially exercisable at $12.00 per share of New Elroy Air Common Stock, subject to the same anti-dilution and other adjustments as
the New Elroy Air Series A Preferred Stock.
The foregoing description of the Series A Preferred
Stock Investment is subject to and qualified in its entirety by reference to (i) the full text of the Series A SPA, a copy of the form
of which is included as Exhibit 10.6 to this Current Report on Form 8-K, (ii) the full text of the form of Certificate of Designation,
a copy of which is attached as Exhibit 3.1 to this Current Report on Form 8-K, and (iii) the full text of the form of Series A Preferred
Investor Warrant, a copy of the form of which is attached as Exhibit 4.1 to this Current Report on Form 8-K, and the terms of each of
which are incorporated herein by reference.
Item 3.02. Unregistered Sales of Equity Securities.
The disclosure set forth above in Item 1.01 of
this Current Report on Form 8-K with respect to the issuance of shares of New Elroy Air pursuant to the Business Combination Agreement
and the Series A SPA is incorporated by reference herein. The shares to be offered and sold in connection with the Pre-Funded SPAs have
not been registered under the Securities Act of 1933, as amended (the “Securities Act”), in reliance upon the exemption
from registration provided in Section 4(a)(2) of the Securities Act.
Item 5.02. Departure of Directors or Certain
Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
Management Changes
In connection with the execution of the Business
Combination Agreement, the Sponsor has partnered with Inflection Point Asset Management LLC (“IPAM”), which has significant
experience with negotiating and consummating de-SPAC transactions and which introduced the Company and the Sponsor to Elroy Air. In connection
with the partnership with IPAM, the Sponsor agreed, among other things, that to make the management changes set forth below and that the
Company will be renamed “Inflection Point Acquisition Corp. VII.” The Sponsor also agreed to reallocate membership interests
corresponding to an aggregate of 4,022,173 Founder Shares, including interests corresponding to 3,000,000 Founder Shares to Inflection
Point Fund I, LP, interests corresponding to 729,130 Founder Shares to Michael Blitzer and interests corresponding to 243,043 Founder
Shares to Kevin Shannon.
Effective June 26, 2026, Gary Quin resigned as
Chairman and Chief Executive Officer of Inflection Point, and Michael Blitzer was appointed as director and Chairman of the Board of Directors
(the “Board”).
Effective June 26, 2026, Kevin Shannon was appointed
as Chief Executive Officer of Inflection Point.
Effective June 26, 2026, Gary Quin was appointed
as President of Inflection Point. Mr. Quin remains a director of Inflection Point.
Mr. Blitzer and Mr. Shannon are affiliates of
Inflection Point Asset Management LLC and the funds it manages, including Inflection Point Fund.
Michael Blitzer, 49, has been the Chairman of
Inflection Point Acquisition Corp. VI (Nasdaq: IPFX) (“IPFX”), a special purpose acquisition company which announced
the signing of a definitive agreement for its initial business combination with Quantum Space, LLC on June 8, 2026 since December 2025
and a director since September 2025. Mr. Blitzer has been the Chairman and CEO of Inflection Point Acquisition Corp. III (Nasdaq: IPCX)
(“IPCX”), a special purpose acquisition company which announced the signing of a definitive agreement for its initial
business combination with Air Water Ventures Holdings Limited on August 25, 2025, since October 2024. Since September 2025, Mr. Blitzer
has served as the Chairman and Chief Executive Officer of IPEX (Nasdaq: IPEX) (“IPEX”), a special purpose acquisition
company which announced the signing of a definitive agreement for its initial business combination with GOWell Technology Limited on October
14, 2025. Mr. Blitzer previously served as co-CEO and director of Inflection Point Acquisition Corp. (“IPAX”), a special
purpose acquisition company, from February 2021 until the completion of its business combination with Intuitive Machines, LLC in February
2023. He currently sits on the board of directors and audit committee of Intuitive Machines, Inc. (Nasdaq: LUNR). Mr. Blitzer also served
as CEO and director of Inflection Point Acquisition Corp. II (“IPXX”), a special purpose acquisition company, from
March 2023 until the closing of its business combination with USARE in March 2025 and as the President and CEO and director of Inflection
Point Acquisition Corp. IV (“IPDX”), a special purpose acquisition company, from July 2025 until the completion of
its initial business combination with Merlin Labs, Inc. in March 2026. He currently sits on the board of directors and audit committee
of Intuitive Machines, Inc. (Nasdaq: LUNR), is the Chairman of USA Rare Earth, Inc. (Nasdaq: USAR), and serves on the board of directors
and as a member of the nominating and corporate governance committee of Merlin, Inc. (Nasdaq: MRLN). Mr. Blitzer is the founder and co-CEO
of Kingstown Capital Management (“Kingstown”), which he founded in 2006 and grew to a multi-billion dollar asset manager
with some of the world’s largest endowments and foundations as clients. Over 19 years, Kingstown has invested in public and private
equities, SPACs, PIPEs, and derivatives. At Kingstown, Mr. Blitzer has overseen and participated in nearly all the firm’s investment
decisions including countless public and private investments in disruptive growth industries. Mr. Blitzer is also founder and partner
of Inflection Point Asset Management, which he co-founded with Kevin Shannon in 2024. Inflection Point Asset Management invests in concentrated
SPAC sponsor and PIPE positions, primarily focused on backing the Inflection Point franchise of SPACs. Mr. Blitzer brings an in-depth
understanding of public markets and has invested in a variety of corporate transactions such as spin-offs, rights offerings, public offerings,
privatizations, and mergers & acquisitions. Mr. Blitzer began his Wall Street career at J.P. Morgan Securities in 1999 advising companies
globally in private debt and equity capital raises followed by work at the investment fund Gotham Asset Management, which was founded
by the author and investor Joel Greenblatt. Mr. Blitzer taught courses in Investing at Columbia Business School for five years in the
2010s. He holds an M.B.A. from Columbia Business School and a B.S. from Cornell University where he received the Cornell Tradition Fellowship.
Mr. Blitzer is a trustee of Greens Farms Academy in Westport, CT where he is also Treasurer and Chair of the Investment Committee.
10
Kevin Shannon, 30, has been the CEO of IPFX, a
special purpose acquisition company which announced the signing of a definitive agreement for its initial business combination with Quantum
Space, LLC on June 8, 2026 since December 2025. Mr. Shannon currently also serves as COO of IPCX, a special purpose acquisition company
which announced the signing of a definitive agreement for its initial business combination with Air Water Ventures Holdings Limited on
August 25, 2025. Since September 2025, Mr. Shannon has served as the COO of IPEX, a special purpose acquisition company which
announced the signing of a definitive agreement for its initial business combination with GOWell Technology Limited on October 14,
2025. He served as Chief of Staff of IPXX from March 2023 until the completion of its initial business combination with USA Rare Earth,
Inc. in March 2025 and previously served as Chief of Staff of IPAX from March 2021 until the completion of its initial business combination
with Intuitive Machines, Inc. in February 2023. In his role as CEO of IPFX, COO of IPCX, IPDX and IPEX, and Chief of Staff for IPXX and
IPAX, Mr. Shannon was an active participant in all target search, negotiation, and due diligence workstreams. Mr. Shannon is a founder
and partner of Inflection Point Asset Management, which he co-founded with Michael Blitzer in 2024. Inflection Point Asset Management
invests in concentrated SPAC sponsor and PIPE positions, primarily focused on backing the Inflection Point franchise of SPACs. Mr. Shannon
also currently serves as Capital Markets Advisor for Intuitive Machines, Inc. and as Special Advisor to USA Rare Earth, Inc. Prior to
Inflection Point Asset Management, Mr. Shannon was a Principal at The Venture Collective from April of 2023 to March of 2024 helping to
source and diligence later stage investments for the venture capital firm. Before that, Mr. Shannon was a Senior Analyst at Kingstown
Capital from March of 2021 to March of 2023. Mr. Shannon began his career in Equity Capital Markets at Bank of America, spending time
working across the Technology, Industrials, Equity-Linked, and SPAC teams within ECM. Mr. Shannon holds a B.A. from Colgate University.
Gary Quin, 56, has served as director of the Company
since inception, as Chief Executive Officer from October 2025 until his resignation on June 26, 2026 and as Chairman of the Board from
January 2026 until his resignation on June 26, 2026. From April 2025, he served as Chief Executive Officer and from June 2024 as a director
of Columbus Circle Capital Corp I (Nasdaq: BRR), until December 2025, when he became a director of ProCap Financial Inc. (Nasdaq: BRR)
following its business combination with Columbus Circle Capital Corp. I. Mr. Quin has over 30 years of corporate and financial experience
and has executed approximately $65 billion in M&A and capital market transactions throughout his career. Mr. Quin is currently the
Vice Chairman of Cohen & Company Capital Markets (“CCM”), which is a division of Cohen & Company Securities,
LLC (“CCS”), a position he has held since 2024. He is responsible for leading and expanding the firm’s investment
banking operations throughout the European, Middle Eastern, and African regions and has extensive connections in the global financial
sponsor community. He also has deep sectoral expertise in telecoms, media (including sports and media rights), digital infrastructure,
real estate, and financial services (including fintech). His expertise spans a wide array of industries, enabling him to provide strategic
counsel and execution support to clients across diverse sectors. Mr. Quin is also currently a board member of Venturerock BV, a Dutch
venture capital firm. Mr. Quin’s corporate, banking and advisory relationships and network among financial sponsors and the venture
capital community provides us deal sourcing capabilities and access to high-quality acquisition opportunities. In October 2020, Mr. Quin
became the Chief Executive Officer of North Atlantic Acquisition Corp (“NAAC”), which completed a $330 million
IPO and raised a total of $383 million. In January 2023, NAAC announced its dissolution and the liquidation and return of assets
held in trust to its shareholders. Prior to NAAC, Mr. Quin was Vice Chairman of Credit Suisse Group investment banking division in
Europe from 2010 to December 2019, where he advised Europe’s corporates, governments, financial sponsors and family offices
across M&A, private and public capital raising. Prior to this, Mr. Quin also served as Senior Advisor to The Blackstone Group
from 2011 to 2012, during which time Blackstone acquired Eircom Limited for $3.8 billion. Prior to working at Credit Suisse, Mr.
Quin was Chief Executive Officer of Blackrock Communications Ltd., a telecom-focused, private equity firm. Mr. Quin’s tenure at
Blackrock Communications Ltd. was highlighted by a number of notable private and public telecom deals, including the 2009 acquisition
of Melita Limited, a Maltese telecommunications and digital infrastructure company. Following the acquisition, he served as a director
and shareholder of Melita, where he helped nearly double EBITDA in a three-year span from 2011 to 2014. At the time of acquisition, Melita
had one of the leading ARPU in the Maltese market across all products and one of the best performances in Europe of a cable TV player
launching mobile telephony. From 2011 to 2014, Melita witnessed a revenue CAGR of 7%, EBITDA grew at a CAGR of 25%, increasing roughly
2.0x, and EBITDA margins grew to 50%. Over the life of his investment in Melita and position as board member, Mr. Quin was critical in
transforming the business from a pay-TV-centric cable operator into one of Europe’s first fully integrated quadruple-play telecom
operators, with market leading positions in broadband and pay-TV and a fast-growing market share in mobile, as well as one of the broadest
digital infrastructure offerings in the region. EQT recently announced the sale of Melita Limited to Goldman Sachs for an estimated $800
million. Prior to Blackrock Communications Limited, Mr. Quin filled various financial roles with Digicel Group Limited, a global mobile
phone network and home entertainment provider. Digicel Group Limited, which received an early investment from The Blackstone Group, was
launched in 2001 and grew to have 14 million subscribers as of December 31, 2018 and across 32 countries in 2020. He received his bachelor’s
degree from the University College Cork, Ireland and his M.B.A. from Trinity College Dublin, Ireland.
Except for the agreement between the Sponsor,
Inflection Point Fund I, LP, Mr. Blitzer, Mr. Shannon and the other parties thereto described above relating to the management changes
above, there are no arrangements or understandings between each of Mr. Blitzer or Mr. Shannon or Mr. Quin and any other persons pursuant
to which each of them was selected as an officer of the Company. There are also no family relationships between Mr. Blitzer, Mr. Shannon
or Mr. Quin and any director or executive officer of the Company.
Except as set forth herein and in Item 13. Certain
Relationships and Related Transactions, and Director Independence of the Company’s Annual Report on Form 10-K for the year ended
December 31, 2025 filed with the SEC on March 30, 2026, Mr. Blitzer, Mr. Shannon and Mr. Quin do not have any direct or indirect material
interest in any transaction required to be disclosed pursuant to Item 404(a) of Regulation S-K.
As noted above, Mr. Quin is Vice Chairman of CCM.
The Company engaged CCS, through CCM as joint financial advisor and co-placement agent to the Company in connection with the Business
Combination, whereby among other things, the Company committed to pay CCM a fee of $2.5 million for acting as joint financial advisor
in connection with the Business Combination and a fee equal to 1.5% of the gross proceeds ($1.5 million) for acting as co-placement agent
in the PIPE Investment. CCM has also been engaged by the Company as an advisor in connection with the Company’s initial business
combination, pursuant to a business combination marketing agreement pursuant to which the Company will pay CCM 80% of a cash fee upon
the consummation of the Business Combination or another initial business combination in an amount equal to 3.2% of the gross proceeds
from the sale of 20,000,000 Cayman Purchaser Units in the Company’s IPO remaining in the Trust Account following Redemption (up
to $6.4 million), and 4.8% of the gross proceeds from the sale of 3,000,000 Cayman Purchaser Units pursuant to the overallotment in the
Company’s IPO remaining in the Trust Account following Redemption (up to $1.44 million).
11
Also as noted above, Mr. Blitzer and Mr. Shannon
are affiliates of Inflection Point Asset Management LLC and the funds it manages, including Inflection Point Fund I, LP. Pursuant to a
Pre-Funded SPA, Inflection Point Fund agreed, among other things, to purchase, and Elroy Air issued and sold, a Pre-Funded Convertible
Note with a face value of approximately $29.4 million and an Elroy Air Pre-Funded Convertible Note Investor Warrant to purchase 2,450,980
shares of Elroy Air Common Stock at a purchase price of $12.00 per share, substantially concurrently with the execution and delivery of
the Business Combination Agreement for a purchase price of $25 million,
Additional Information
The Business Combination will be submitted to
shareholders of Inflection Point for their consideration. In connection with the Business Combination, Inflection Point intends to file
a Registration Statement with the SEC, which will include a proxy statement/prospectus and certain other related documents, which will
serve as both the proxy statement to be distributed to shareholders of Inflection Point in connection with its solicitation for proxies
for the vote by its shareholders in connection with the Business Combination and other matters to be described in the Registration Statement,
as well as the prospectus relating to the offer and sale of the securities to be issued to securityholders of Inflection Point and equityholders
of Elroy Air in connection with the completion of the Business Combination. After the Registration Statement is declared effective, Inflection
Point will mail a definitive proxy statement and other relevant documents to its shareholders as of the record date established for voting
on the Business Combination. This communication is not a substitute for the Registration Statement, the definitive proxy statement/prospectus
or any other document that Inflection Point will send to its shareholders in connection with the Business Combination.
INVESTORS AND SECURITY HOLDERS ARE ADVISED TO
READ, WHEN AVAILABLE, THE REGISTRATION STATEMENT, PROXY STATEMENT/PROSPECTUS AND ANY OTHER RELEVANT DOCUMENTS FILED WITH THE SEC CAREFULLY
AND IN THEIR ENTIRETY IF AND WHEN THEY BECOME AVAILABLE BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT THE BUSINESS COMBINATION
AND THE PARTIES TO THE BUSINESS COMBINATION. Investors and security holders will be able to obtain copies of these documents (if and
when available) and other documents filed with the SEC free of charge at www.sec.gov. The definitive proxy statement/final prospectus
(if and when available) will be mailed to shareholders of Inflection Point as of a record date to be established for voting on the Business
Combination. Shareholders of Inflection Point will also be able to obtain copies of the proxy statement/prospectus without charge, once
available, by directing a request to: Columbus Circle Capital Corp. II, 3 Columbus Circle, 24th Floor, New York, NY 10019.
Participants in the Solicitation
Inflection Point and its directors, executive
officers, and other members of management, and consultants, under SEC rules, may be deemed participants in the solicitation of proxies
from Inflection Point’s shareholders with respect to the Business Combination. A list of the names of those directors and executive officers
and a description of their interests in Inflection Point is contained in the sections entitled “Item 12. Security Ownership of
Certain Beneficial Owners and Management and Related Stockholder Matters” and “Item 10. Directors, Executive Officers and
Corporate Governance” of Inflection Point’s Annual Report on Form 10-K for the fiscal year ended December 31, 2025, filed
with the SEC on March 30, 2026, and which is available free of charge at the SEC’s website at www.sec.gov. Additional information
regarding the interests of such participants will be contained in the Registration Statement when available.
Elroy Air, its directors, executive officers,
other members of management, and employees, under SEC rules, may be deemed participants in the solicitation of proxies of Inflection
Point’s shareholders in connection with the Business Combination. A list of the names of such directors and executive officers
and information regarding their interests in the Business Combination will be included in the Registration Statement when available.
Forward Looking Statements
Certain statements made herein are not historical facts but may be
considered “forward-looking statements” within the meaning of Section 27A of the Securities Act, and Section 21E of the Securities
Exchange Act of 1934, as amended. Forward-looking statements generally are accompanied by words such as “believe,” “may,”
“will,” “estimate,” “continue,” “anticipate,” “intend,” “expect,”
“should,” “would,” “plan,” “predict,” “potential,” “seem,” “seek,”
“future,” “outlook” or the negatives of these terms or variations of them or similar terminology or expressions
that predict or indicate future events or trends or that are not statements of historical matters. These forward-looking statements include,
but are not limited to, statements regarding future events, the Business Combination and the other transactions contemplated thereby,
the estimated or anticipated future results and benefits of New Elroy Air following the Business Combination, including the likelihood
and ability of the Parties to successfully consummate the Business Combination, Elroy Air’s demand pipeline and potential revenue opportunities,
future opportunities for New Elroy Air and other statements that are not historical facts.
12
These statements are based on the current expectations of Inflection
Point’s and/or Elroy Air’s management and are not predictions of actual performance. These forward-looking statements are provided
for illustrative purposes only and are not intended to serve as, and must not be relied on, by any investor as a guarantee, an assurance,
a prediction or a definitive statement of fact or probability. There can be no assurance that New Elroy Air will use the proceeds of the
PIPE Investment and the Business Combination as currently planned, and management will have broad discretion over the use of such proceeds.
Actual events and circumstances are difficult or impossible to predict and will differ from assumptions. Many actual events and circumstances
are beyond the control of Inflection Point and Elroy Air. These statements are subject to a number of risks and uncertainties regarding
Elroy Air’s business and the Business Combination, and actual results may differ materially. These risks and uncertainties include, but
are not limited to: general economic, political and business conditions; the inability of the Parties to consummate the Business Combination
or the occurrence of any event, change or other circumstances that could give rise to the termination of the Business Combination Agreement;
the number of redemption requests made by Inflection Point’s shareholders in connection with the Business Combination; the outcome of
any legal proceedings that may be instituted against the Parties following the announcement of the Business Combination; the risk that
the approval of the shareholders of Elroy Air or Inflection Point for the potential transaction is not obtained; failure to realize the
anticipated benefits of the Business Combination, including as a result of a delay in consummating the potential transaction; the risk
that the Business Combination disrupts current plans and operations as a result of the announcement and consummation of the Business Combination;
the risks related to the rollout of Elroy Air’s business and the timing of expected business milestones; the fact that Elroy Air’s demand
pipeline currently consists of non-binding letters of intent and memorandums of understanding and the risk that such letters of intent
and memorandums of understanding may not convert to binding orders and there can be no assurance that any or all of such letters of intent
and memorandums of understanding will result in future revenue and accordingly investors should not place undue reliance on such demand
pipeline figures as an indicator of future revenue or business performance; risks related to obtaining and maintaining necessary regulatory
approvals and certifications for the FAA, Department of Defense, and other governmental authorities for drone operations; the effects
of competition on Elroy Air’s business; the ability of New Elroy Air to execute its growth strategy, manage growth profitably and
retain its key employees; the ability of New Elroy Air to obtain or maintain the listing of its securities on a U.S. national securities
exchange following the Business Combination; costs related to the Business Combination; and other risks that will be detailed from time
to time in filings with the SEC. The foregoing list of risk factors is not exhaustive. There may be additional risks that Elroy Air and
Inflection Point presently do not know or that Elroy Air and Inflection Point currently believe are immaterial that could also cause actual
results to differ from those contained in forward-looking statements. In addition, forward-looking statements provide Elroy Air’s and
Inflection Point’s expectations, plans or forecasts of future events and views as of the date of this communication. Elroy Air and Inflection
Point anticipate that subsequent events and developments will cause their assessments to change. However, while Elroy Air and/or Inflection
Point may elect to update these forward-looking statements in the future, Elroy Air and Inflection Point specifically disclaim any obligation
to do so except as required by applicable law. These forward-looking statements should not be relied upon as representing Elroy Air’s
or Inflection Point’s assessments as of any date subsequent to the date of this communication. Accordingly, undue reliance should not
be placed upon the forward-looking statements. Nothing herein should be regarded as a representation by any person that the forward-looking
statements set forth herein will be achieved or results of such forward-looking statements will be achieved.
No Offer or Solicitation
This communication is for informational purposes only and is not (i)
an offer to purchase, nor a solicitation of an offer to sell, subscribe for or buy any securities, nor will there be any sale, issuance
or transfer of securities in any jurisdiction in contravention of applicable law nor (ii) the solicitation of any vote in any jurisdiction
pursuant to the Business Combination or otherwise. No offer of securities will be made except by means of a prospectus meeting the requirements
of Section 10 of the Securities Act. No securities commission or securities regulatory authority in the United States or any other jurisdiction
has in any way passed upon the merits of the Business Combination or the accuracy or adequacy of this communication.
13
Item 9.01. Financial Statements and Exhibits.
(d) Exhibits.
Exhibit
No.
Description
2.1†
Business
Combination Agreement, dated as of June 26, 2026, by and among Columbus Circle Capital Corp. II, IPGX Merger Sub, Inc. and Elroy
Air, Inc.
3.1
Form
of Certificate of Designation relating to the 12.0% Series A Cumulative Convertible Preferred Stock.
4.1
Form
of Warrant to be issued to each Series A Preferred Stock Investor.
10.1
Sponsor
Support Agreement, dated as of June 26, 2026, by and among Columbus Circle 2 Sponsor Corporation LLC, Columbus Circle Capital Corp.
II and Elroy Air, Inc.
10.2
Stockholder
Voting and Support Agreement, dated as of June 26, 2026.
10.3
Form
of Sponsor Lock-Up Agreement.
10.4
Form
of Elroy Air Lock-Up Agreement.
10.5
Form
of Amended and Restated Registration Rights Agreement.
10.6†
Form of Securities
Purchase Agreement.
99.1†
Form of Pre-Funded SPA (Institutional Investors).
99.2†
Form of Pre-Funded SPA (Other Investors).
99.3
Form of Pre-Funded Convertible Note.
99.4
Form of Elroy Air Pre-Funded Convertible Note Investor Warrant (Institutional Investors).
99.5
Form of Elroy Air Pre-Funded Convertible Note Investor Warrant (Other Investors).
104
Cover Page Interactive
Data File (embedded within the Inline XBRL document).
† Certain of the exhibits and schedules
to this exhibit have been omitted in accordance with Regulation S-K Item 601(b)(2). The Registrant agrees to furnish supplementally a
copy of all omitted exhibits and schedules to the SEC upon its request.
14
SIGNATURE
Pursuant to the requirements of the Securities
Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
COLUMBUS CIRCLE CAPITAL CORP II
Date: July 2, 2026
By:
/s/ Kevin Shannon
Name:
Kevin Shannon
Title:
Chief Executive Officer
15
EX-2.1 — BUSINESS COMBINATION AGREEMENT, DATED AS OF JUNE 26, 2026, BY AND AMONG COLUMBUS CIRCLE CAPITAL CORP. II, IPGX MERGER SUB, INC. AND ELROY AIR, INC
EX-2.1
Filename: ea029643801ex2-1.htm · Sequence: 2
Exhibit 2.1
Execution
Version
Dated
June 26, 2026
Business
Combination Agreement
by
and among
Columbus
Circle Capital Corp II,
IPGX
Merger Sub, Inc.
and
Elroy
Air, Inc.
Table
of Contents
Page
ARTICLE I THE TRANSACTIONS
4
1.01
The Domestication
4
1.02
The Merger
5
1.03
Further Assurances
6
ARTICLE II CONSIDERATION
6
2.01
Pre-Effective Time Conversions
6
2.02
Consideration
7
2.03
Conversion
8
2.04
Surrender
9
2.05
Dissenting
10
2.06
No Fractional Shares
10
2.08
Withholding
11
2.09
Earnout
11
ARTICLE III CLOSING
12
3.01
Closing
12
3.02
Closing Documents
13
3.03
Payment of Expenses and Treatment of Closing Indebtedness
13
ARTICLE IV REPRESENTATIONS AND WARRANTIES
OF THE COMPANY
13
4.01
Organization and Standing
13
4.02
Authorization; Binding Agreement
14
4.03
Capitalization
14
4.04
Subsidiaries
15
4.05
No Conflict; Governmental Consents and Filings
16
4.06
Financial Statements
16
4.07
Undisclosed Liabilities
17
4.08
Absence of Certain Changes
17
4.09
Compliance with Laws
17
4.10
Government Contracts
18
4.11
Company Permits
19
4.12
Litigation
20
4.13
Material Contracts
20
4.14
Intellectual Property
23
4.15
Taxes and Returns
25
4.16
Real Property
27
4.17
Personal Property
28
4.18
Title to Assets
28
4.19
Employee
28
4.20
Benefit
29
4.21
Environmental Matters
31
4.22
Transactions with Related Persons
32
4.23
Insurance
32
4.24
Top Customers and Suppliers
33
4.25
Certain Business Practices
33
4.26
Aviation
34
4.27
Investment Company Act
36
4.28
Finders and Brokers
36
4.29
Independent Investigation
36
4.30
Information Supplied
36
4.31
No Additional Representations or Warranties
36
i
Table of Contents
Page
ARTICLE V REPRESENTATIONS AND WARRANTIES
OF THE PURCHASER AND MERGER SUB
37
5.01
Organization and Standing
37
5.02
Authorization; Binding Agreement
37
5.03
Governmental Approvals
38
5.04
Non-Contravention
38
5.05
Capitalization
38
5.06
SEC Filings and Purchaser Financials
39
5.07
Absence of Certain Changes
41
5.08
Undisclosed Liabilities
41
5.09
Compliance with Laws
41
5.10
Legal Proceedings; Orders; Permits
41
5.11
Taxes and Returns
42
5.12
Properties
43
5.13
Contracts
43
5.14
Investment Company Act
43
5.15
Trust Account
43
5.16
Finders and Brokers
44
5.17
Certain Business Practices
44
5.18
Insurance
45
5.19
Information Supplied
46
5.20
Independent Investigation
46
5.21
No Additional Representation or Warranties
46
ARTICLE VI COVENANTS
47
6.01
Access and Information; Cooperation
47
6.02
Conduct of Business of the Company
48
6.03
Conduct of Business of the Purchaser
51
6.04
Annual and Interim Financial Statements
53
6.05
Purchaser Public Filings
54
6.06
No Solicitation
54
6.07
No Trading
55
6.08
Notification of Certain Matters
56
6.09
Efforts
56
6.10
Trust Account
57
6.11
Tax Matters
57
6.12
Further Assurances
58
6.13
The Preparation of Proxy Statement/Registration Statement;
Shareholders’ Meeting and Approvals
58
6.14
Employee Matters
60
6.15
Public Announcements
61
6.16
Confidential Information
61
6.17
Documents and Information
62
6.18
Post-Closing Board of Directors and Executive Officers
62
6.19
Indemnification of Directors and Officers; Tail Insurance
63
6.20
PIPE Investment
63
6.21
Redemption
63
6.22
Domestication
63
6.23
Adoption of Proxy Statement/Registration Statement
63
6.24
Compliance
63
ii
Table of Contents
Page
ARTICLE VII CLOSING CONDITIONS
64
7.01
Conditions to Each Party’s
Obligations
64
7.02
Conditions to Obligations of the Company
65
7.03
Conditions to Obligations of the Purchaser and Merger
Sub
66
7.04
Frustration of Conditions
68
ARTICLE VIII TERMINATION AND EXPENSES
68
8.01
Termination
68
8.02
Expenses
69
8.03
Effect of Termination
69
ARTICLE IX MISCELLANEOUS
69
9.01
No Survival
69
9.02
Notices
70
9.03
Binding Effect; Assignment
70
9.04
Third Parties
70
9.05
Governing Law
70
9.06
Jurisdiction
70
9.07
WAIVER OF JURY TRIAL
71
9.08
Specific Performance
71
9.09
Severability
71
9.10
Amendment; Waiver
71
9.11
Entire Agreement
72
9.12
Interpretation
72
9.13
Counterparts
73
9.14
Legal Representation
73
9.15
Waiver of Claims Against Trust
73
9.16
Company and Purchaser Disclosure Letters
74
ARTICLE X DEFINITIONS
74
10.01
Certain Definitions
74
Exhibits
Exhibit A
Form of Purchaser Charter upon Domestication
Exhibit B
Form of Purchaser Bylaws upon Domestication
Exhibit C
Form of Certificate of Merger
Exhibit D
Form of A&R Registration Rights Agreement
Exhibit E-1
Form of Sponsor Lock-Up Agreement
Exhibit E-2
Form of Seller Lock-Up Agreement
Exhibit F
Form of Series A Preferred Stock Certificate of Designation
Exhibit G
Form of FIRPTA
iii
Table
of Contents
Company
Disclosure Letter
Section
4.03 — Capitalization
Section
4.04 — Subsidiaries
Section
4.05 — No Conflict; Governmental Consents and Filings
Section
4.06 — Financial Statements
Section
4.07 — Undisclosed Liabilities
Section
4.08 — Absence of Certain Changes
Section
4.09 — Compliance with Laws
Section
4.10 — Government Contracts
Section
4.11 — Company Permits
Section
4.12 — Litigation
Section
4.13 — Material Contracts
Section
4.14 — Intellectual Property
Section
4.15 — Taxes and Returns
Section
4.16 — Real Property
Section
4.17 — Personal Property
Section
4.18 — Title to Assets
Section
4.19 — Employee Matters
Section
4.20 — Benefit Plans
Section
4.21 — Environmental Matters
Section
4.22 — Transactions with Related Persons
Section
4.23 — Insurance
Section
4.24 — Top Customers and Suppliers
Section
4.26 — Aviation Regulatory Compliance
Section
4.28 — Finders and Brokers
Section
6.02 — Conduct of Business of the Company
Schedule
10-A — Closing Indebtedness Exceptions
Schedule
10-B — Knowledge Parties
Schedule
10-C — Eligible Stockholders
Purchaser
Disclosure Letter
Section
5.05 — Capitalization
Section
5.15 — Finders and Brokers
Section
5.17 — Insurance
Section
6.03 — Conduct of Business by the Purchaser
Schedule
10-A — Knowledge Parties
Schedule
10-B — Deferred Underwriting Fees
iv
BUSINESS
COMBINATION AGREEMENT
This
Business Combination Agreement (this “Agreement”) is made and entered into as of June 26, 2026, by and among
(i) Columbus Circle Capital Corp II, a Cayman Islands exempted company (which shall transfer by way of continuation and domesticate as
a Delaware corporation prior to Closing) (the “Purchaser”), (ii) IPGX Merger Sub, Inc., a Delaware corporation
and a direct wholly-owned subsidiary of the Purchaser (“Merger Sub”), and (iii) Elroy Air, Inc., a Delaware
corporation (the “Company”). The Purchaser, Merger Sub and the Company are sometimes referred to herein individually
as a “Party” and, collectively, as the “Parties.”
RECITALS:
WHEREAS,
the Purchaser is a special purpose acquisition company incorporated as a Cayman Islands exempted company for the purpose of effecting
a merger, amalgamation, share exchange, asset acquisition, share purchase, reorganization or similar business combination with one or
more businesses or entities;
WHEREAS,
Merger Sub is a newly incorporated Delaware corporation, wholly owned by the Purchaser, and was formed for the purpose of effectuating
the Merger (as defined below);
WHEREAS,
at least one (1) Business Day (as defined below) prior to the Closing Date (as defined below) and subject to the satisfaction or waiver
of the conditions of this Agreement (other than those conditions that by their nature are to be satisfied at the Closing), the Purchaser
shall de-register from the Register of Companies in the Cayman Islands and transfer by way of continuation out of the Cayman Islands
and into the State of Delaware and domesticate as a Delaware corporation in accordance with Section 388 of the Delaware General Corporation
Law, as amended (the “DGCL”), and Section 206 of the Companies Act (Revised) of the Cayman Islands (the “Cayman
Companies Act,” and such de-registration, continuation and domestication, the “Domestication”);
WHEREAS, (i)
immediately prior to the Domestication, the holders of the Purchaser Class B Ordinary Shares shall elect to convert each Purchaser
Class B Ordinary Share, on a one-for-one basis, into one (1) Purchaser Class A Ordinary Share (the “Sponsor Share
Conversion”) and (ii) in connection with the Domestication, (x) each then issued and outstanding Purchaser Class A
Ordinary Share (other than any Purchaser Class A Ordinary Share included in the Cayman Purchaser Units (as defined below)) shall
convert automatically, on a one-for-one basis, into one (1) share of Domesticated Purchaser Common Stock (as defined below); (y)
each then issued and outstanding warrant of the Purchaser (each a “Cayman Purchaser Warrant”) (other than
any Cayman Purchaser Public Warrants (as defined below) included in the Cayman Purchaser Units (as defined below)) shall convert
automatically into a warrant to acquire one (1) share of Domesticated Purchaser Common Stock (each a “Domesticated
Purchaser Warrant”), pursuant to the Warrant Agreement (as defined below); and (z) each then issued and outstanding
unit of the Purchaser (the “Cayman Purchaser Units”) shall convert automatically, on a one-for-one basis,
into a Domesticated Purchaser Unit (as defined below), in each case without any action on the part of the Purchaser, Merger Sub, the
Company or any holder of securities of any of the foregoing;
WHEREAS,
in order to effectuate the Domestication, and subject to the satisfaction or waiver of the conditions of this Agreement (other than
those conditions that by their nature are to be satisfied at the Closing (as defined below)), the Purchaser shall (a) file all applicable
notices, declarations, affidavits, statements of assets and liabilities, shareholder approvals, undertakings and other documents required
to be filed, pay all applicable fees required to be paid, and cause the satisfaction of all other conditions to deregistration required
to be satisfied, in each case, under Section 206 of the Cayman Companies Act and in accordance therewith, (b) file a certificate of domestication
and a certificate of incorporation in substantially the form attached hereto as Exhibit A (the “Purchaser Charter
upon Domestication”) with the Secretary of State of Delaware and (c) adopt bylaws in substantially the form attached hereto
as Exhibit B (the “Purchaser Bylaws upon Domestication”), and in each case with such changes to the
forms attached hereto as Exhibit A and Exhibit B as may be agreed in writing by the Purchaser and the Company;
1
WHEREAS,
upon the terms and subject to the conditions of this Agreement, and in accordance with the DGCL, the Parties intend to enter into
a business combination transaction by which the Company and Merger Sub will file with the Secretary of State of Delaware a certificate
of merger, substantially in the form attached hereto as Exhibit C (the “Certificate of Merger”), in
accordance with the applicable provisions of the DGCL and pursuant thereto Merger Sub will merge with and into the Company (the “Merger,”
and together with the Domestication and the other transactions contemplated by this Agreement and the Ancillary Documents (as defined
below), the “Transactions”), with the Company being the surviving company of the Merger (the Company, in its
capacity as the surviving corporation of the Merger, is sometimes referred to as the “Surviving Company”);
WHEREAS,
as a condition and inducement to the Company’s willingness to enter into this Agreement, simultaneously with the execution
and delivery of this Agreement, the Sponsor has executed and delivered to the Company the Sponsor Support Agreement, dated as of the
date hereof (the “Sponsor Support Agreement”), pursuant to which the Sponsor has agreed to, among other things,
vote to adopt and approve, upon the effectiveness of the Registration Statement, this Agreement and the other documents contemplated
hereby (including the applicable Ancillary Documents) and the transactions contemplated hereby and thereby and vote against any competing
proposals at the Purchaser Shareholders’ Meeting (as defined below);
WHEREAS,
as a condition and inducement to the Purchaser’s willingness to enter into this Agreement, simultaneously with the execution
and delivery of this Agreement, the Stockholders (as defined below) representing the Company Stockholder Approval have executed and delivered
to the Purchaser the Stockholder Support Agreement, dated as of the date hereof (the “Stockholder Support Agreement”),
pursuant to which such Stockholders have agreed to, among other things, vote or consent to adopt and approve, upon the effectiveness
of the Registration Statement, this Agreement and the other documents contemplated hereby (including the applicable Ancillary Documents)
and the transactions contemplated hereby and thereby and oppose any Acquisition Proposal or Alternative Transaction (each as defined
herein);
WHEREAS,
as a condition and inducement to the Parties’ willingness to enter into this Agreement, simultaneously with the execution and delivery
of this Agreement, (a) the Company and certain investors have executed and delivered that certain securities purchase agreement, dated
as of the date of this Agreement (the “Pre-PIPE Securities Purchase Agreement”), pursuant to which such investors
have agreed, among other things, to purchase from the Company, and the Company has agreed, among other things, to sell to such investors,
certain Pre-Funded Convertible Notes and the Company Pre-Funded Convertible Note Investor Warrants (each as defined herein) and (b) the
Company and certain investors have executed and delivered that certain convertible note purchase agreement, as of the date of this Agreement
(as may be amended from time to time, the “Pre-PIPE Note Purchase Agreement”), pursuant to which such investors
have agreed, among other things, to purchase from the Company, and the Company has agreed, among other things, to sell to such investors,
certain Pre-Funded Convertible Notes and the Company Pre-Funded Convertible Note Investor Warrants (the transactions contemplated by
the Pre-PIPE Securities Purchase Agreement and the Pre-PIPE Note Purchase Agreement, together, the “Pre-Funded Note Investment”),
substantially concurrently with the execution and delivery of this Agreement;
2
WHEREAS,
as a condition and inducement to the Parties’ willingness to enter into this Agreement, simultaneously with the execution and delivery
of this Agreement, the Purchaser, the Company and the investors named therein (the “Series A Preferred Stock Investors”)
have executed and delivered that certain securities purchase agreement, dated as of the date hereof (the “Series A SPA”),
pursuant to which the Series A Preferred Stock Investors have agreed, among other things, to purchase from the Purchaser, and the Purchaser
has agreed, among other things, to sell to the Series A Preferred Stock Investors, shares of the Purchaser’s 12% Series A Cumulative
Convertible Preferred Stock, par value $0.0001 per share, having the rights, preferences and privileges set forth in the Purchaser’s
Certificate of Designation of Preferences, Rights and Limitations of 12.0% Series A Cumulative Convertible Preferred Stock, in substantially
the form attached hereto as Exhibit F (the “Series A Preferred Stock Certificate of Designation,” and
such stock the “Domesticated Purchaser Series A Preferred Stock”) and warrants to purchase Domesticated Purchaser
Common Stock in substantially the form attached hereto as Exhibit E (the “Domesticated Purchaser Series A Investor
Warrants”), substantially concurrently with the Closing (such investment, the “PIPE Investment”);
WHEREAS,
from time to time following the date hereof and prior to the Closing, the Purchaser may enter into subscription, purchase or similar
agreements with investors, pursuant to which, and on the terms and subject to the conditions of which, such investors will agree to participate
in the PIPE Investment (as defined herein);
WHEREAS,
in connection with the consummation of the Transactions, simultaneously with the Closing, the Sponsor, the Purchaser and the other parties
thereto will enter into an Amended and Restated Registration Rights Agreement (the “A&R Registration Rights Agreement”),
in substantially the form attached hereto as Exhibit D, with such changes thereto as may be agreed in writing by the Purchaser
and the Company;
WHEREAS,
in connection with the consummation of the Transactions, simultaneously with the Closing, (i) the Sponsor and the Purchaser will enter
into a lock-up agreement (the “Sponsor Lock-Up Agreement”), in substantially the form attached hereto as Exhibit
E-1, with such changes thereto as may be agreed in writing by the Purchaser and the Company, and (ii) the Purchaser, the holders
of equity securities of the Company and other parties thereto will enter into a lock-up agreement (the “Seller Lock-Up Agreement”
and, together with the Sponsor Lock-Up Agreement, the “Lock-Up Agreements”), in substantially the form attached
hereto as Exhibit E-2, with such changes thereto as may be agreed in writing by the Purchaser and the Company;
WHEREAS,
as a condition and inducement to the Parties’ willingness to enter into this Agreement, simultaneously with the execution and delivery
of this Agreement, the Company and certain holders of the Company Warrants (other than the Company Pre-Funded Convertible Note Investor
Warrants) will enter into certain amendments to permit cashless exercise of such Company Warrants in connection with the Transactions
(the “Warrants Amendment”);
WHEREAS,
the Parties intend that, for U.S. federal, and applicable state and local, income tax purposes, (i) the Domestication qualifies as a
“reorganization” described in Section 368(a)(1)(F) of the Code and the Treasury Regulations promulgated thereunder, (ii)
the Sponsor Share Conversion is treated as a “reorganization” described in Section 368(a)(1)(E) of the Code and the Treasury
Regulations promulgated thereunder, and (iii) the Merger qualifies as a “reorganization” within the meaning of Section 368(a)
of the Code and the Treasury Regulations promulgated thereunder (each an “Intended Tax Treatment,” and collectively,
the “Intended Tax Treatments”), and that this Agreement be, and hereby is, adopted as a “plan of reorganization”
for the purposes of Section 368 of the Code and Treasury Regulations Section 1.368-2(g) with respect to each of the reorganizations described
in the foregoing clauses;
WHEREAS,
the board of directors of the Company (the “Company Board”) has unanimously, pursuant to and in accordance
with the Organizational Documents (as defined below) of the Company: (a) determined that it is in the best interests of the Company and
the Stockholders, and declared it advisable, for the Company to enter into this Agreement and the Ancillary Documents and consummate
the Merger and the other Transactions; (b) approved this Agreement, the Ancillary Documents and the Transactions on the terms and subject
to the conditions of this Agreement; and (c) adopted a resolution recommending the Merger and other Transactions be adopted by the Company;
3
WHEREAS,
the board of directors of the Purchaser has unanimously: (a) determined that the Merger is in the best interests of the Purchaser and
its shareholders, as a whole, and declared it advisable and in the best interests of the Purchaser and its shareholders as a whole for
the Purchaser to enter into this Agreement and the Ancillary Documents providing for the Merger and the other Transactions; (b) approved
this Agreement, the Ancillary Documents and the Transactions on the terms and subject to the conditions of this Agreement; (c) adopted
a resolution recommending the Merger and the other Transactions be adopted by the Purchaser Shareholders; and (d) directed that this
Agreement, the Merger and the other Transactions be submitted to the Purchaser Shareholders for their adoption and approval;
WHEREAS,
the board of directors of Merger Sub has unanimously: (a) determined that the Merger is in the best interests of Merger Sub and the sole
stockholder of Merger Sub, and declared it advisable;
(b)
approved, adopted and declared advisable this Agreement, the Ancillary Documents to which Merger Sub is or will be a party and the consummation
of the Transactions, including the Merger; and (c) resolved to recommend adoption of this Agreement by the sole stockholder of Merger
Sub;
WHEREAS,
in furtherance of the Merger and in accordance with the terms hereof, the Purchaser shall provide an opportunity to the holders of its
public shares to have their public shares redeemed on the terms and conditions set forth in this Agreement and the Purchaser’s
Organizational Documents, which redemption shall occur at least one (1) day prior to the Domestication as set forth in this Agreement
(the “Redemption”);
WHEREAS,
the Purchaser, as the sole stockholder of Merger Sub, has approved and adopted this Agreement, the Ancillary Documents to which Merger
Sub is or will be a party and the consummation of the Transactions, including the Merger; and
NOW,
THEREFORE, in consideration of the premises set forth above, and the representations, warranties, covenants and agreements contained
in this Agreement, and for other consideration, the receipt and sufficiency of which are acknowledged and agreed to by the Parties, and
intending to be legally bound hereby, the Parties hereto agree as follows:
ARTICLE
I
THE
TRANSACTIONS
1.01 The
Domestication.
(a)
Domestication. Upon the terms and subject to the satisfaction or waiver of the conditions of this Agreement (other than those
conditions that by their nature are to be satisfied at Closing), and in accordance with the DGCL and the Cayman Companies Act, at least
one (1) Business Day after the Redemption and at least one (1) Business Day prior to the Closing, the Purchaser shall, in accordance
with applicable Law, any applicable rules and regulations of the SEC, Nasdaq and the Purchaser’s Organizational Documents, as applicable,
de-register from the Register of Companies of the Cayman Islands by way of continuation out of the Cayman Islands and into the State
of Delaware so as to re-domicile and become a Delaware corporation and, subject to the receipt of the approval by way of a special resolution
passed by the holders of Purchaser Class B Ordinary Shares entitled to vote thereon in accordance with the Purchaser’s Organizational
Documents, cause the Domestication to become effective, including by (i) filing with the Delaware Secretary of State a certificate of
domestication with respect to the Domestication, in form and substance reasonably acceptable to the Purchaser and the Company, together
with the Purchaser Charter upon Domestication, in each case, in accordance with the provisions thereof and applicable Law, (ii) adopting
the Purchaser Bylaws upon Domestication, (iii) completing and making and procuring all those filings required to be made with the Cayman
Registrar in connection with the Domestication, and (iv) filing with the Cayman Registrar all applicable notices, declarations, affidavits,
statements of assets and liabilities, shareholder approvals, undertakings and other documents required to be filed, pay all applicable
fees required to be paid, and cause the satisfaction of all other conditions to deregistration required to be satisfied, in each case,
under Section 206 of the Cayman Companies Act and obtaining a certificate of de-registration from the Cayman Registrar.
4
(b)
Effect on Purchaser Securities. (i) Immediately prior to the Domestication, pursuant to the Sponsor Support Agreement, the holders
of the Purchaser Class B Ordinary Shares shall elect to convert each Purchaser Class B Ordinary Share held by them, on a one-for-one
basis, into one (1) Purchaser Class A Ordinary Share and (ii) in connection with the Domestication, (x) each then issued and outstanding
Purchaser Class A Ordinary Share shall convert automatically, on a one-for-one basis, into one (1) share of Domesticated Purchaser Common
Stock; (y) each then issued and outstanding Cayman Purchaser Warrant shall convert automatically into one (1) Domesticated Purchaser
Warrant, pursuant to the Warrant Agreement; and (z) each then issued and outstanding Cayman Purchaser Units shall be cancelled and will
thereafter entitle the holder thereof to one (1) share of Domesticated Purchaser Common Stock and one-third (1/3) of one Domesticated
Purchaser Warrant; in each case without any action on the part of the Purchaser, Merger Sub, the Company or any holder of securities
of any of the foregoing.
1.02 The
Merger.
(a)
Effective Time. Upon the terms and subject to the satisfaction or waiver of the conditions of this Agreement (other than those
conditions that by their nature are to be satisfied at Closing), on the Closing Date, the Company and Merger Sub shall cause the Merger
to be consummated by filing the Certificate of Merger with the Secretary of State of the State of Delaware, in accordance with the applicable
provisions of the DGCL (the time of such filing, or such later time as may be agreed in writing by the Company, Merger Sub and Purchaser
and specified in the Certificate of Merger, being the “Effective Time”). The Purchaser shall, subject to receipt
of the Purchaser Shareholder Approval, as soon as practicable following the Effective Time, file the Purchaser Charter upon Domestication
with the Secretary of State of Delaware, in accordance with the applicable provisions of the DGCL.
(b)
Merger. At the Effective Time, upon the terms and subject to the satisfaction or waiver of the conditions of this Agreement (other
than those conditions that by their nature are to be satisfied at Closing), Merger Sub and the Company shall consummate the Merger, pursuant
to which Merger Sub shall be merged with and into the Company, following which the separate corporate existence of Merger Sub shall cease
and the Company shall continue as the Surviving Company after the Merger and as a direct, wholly-owned subsidiary of the Purchaser. References
to the Company for periods after the Effective Time shall mean the Surviving Company.
(c)
Effect of the Merger. At the Effective Time, the effect of the Merger shall be as provided in this Agreement, the Certificate
of Merger and the applicable provisions of the DGCL. Without limiting the generality of the foregoing, and subject thereto, at the Effective
Time, all the property, rights, privileges, agreements, powers and franchises, debts, liabilities, duties and obligations of Merger Sub
and the Company shall become the property, rights, privileges, agreements, powers and franchises, debts, liabilities, duties and obligations
of the Surviving Company, which shall include the assumption by the Surviving Company of any and all agreements, covenants, duties and
obligations of Merger Sub and the Company set forth in this Agreement to be performed after the Effective Time.
5
(d)
Surviving Company Share. At the Effective Time, by virtue of the Merger and without any action on the part of any Party or any
other Person, each share of capital stock of Merger Sub issued and outstanding immediately prior to the Effective Time shall be automatically
cancelled and extinguished and converted into one (1) share of common stock, par value $0.0001, of the Surviving Company (each such share,
a “Surviving Company Share”).
(e)
Governing Documents. At the Effective Time, the Organizational Documents of the Company shall be amended and restated to be in
the forms of certificate of incorporation and bylaws to be mutually agreed upon by the Purchaser and the Company prior to the Closing
Date, which shall be the certificate of incorporation and bylaws of the Surviving Company until thereafter duly amended in accordance
with the terms thereof and applicable Law.
(f)
Directors and Officers of the Surviving Company. Immediately after the Effective Time, the initial board of directors and executive
officers of the Surviving Company shall be determined by the Company and the Purchaser (solely with respect to its designee) pursuant
to Section 6.18 and otherwise in accordance with the terms of this Agreement.
1.03
Further Assurances. From time to time after the Closing Date, upon the reasonable written request of any Party, each Party shall
execute, acknowledge and deliver such further instruments and documents, and take such additional reasonable action, to effect, consummate,
confirm or evidence the Transactions and carry out the purpose of this Agreement.
ARTICLE
II
CONSIDERATION
2.01
Pre-Effective Time Conversions. Immediately prior to the Effective Time:
(a)
each Company Convertible Security (other than the Company Pre-Funded Convertible Notes), if any, that is outstanding immediately prior
to the Effective Time (if any), including all principal and interest thereunder, to the extent applicable, shall automatically convert
in full into shares of Company Preferred Stock or Company Common Stock, as applicable, in accordance with the terms thereof, such that
immediately thereafter, all of the Company Convertible Securities (other than the Pre-Funded Convertible Notes) shall no longer be outstanding
and shall cease to exist, and each holder of a Company Convertible Security (other than the Pre-Funded Convertible Notes) shall thereafter
cease to have any rights with respect thereto;
(b)
each Company Warrant (other than the Company Pre-Funded Convertible Note Investor Warrants) exercisable for Company Preferred Stock that
is outstanding and unexercised immediately prior to the Effective Time shall automatically be exercised on a cashless basis in full in
accordance with its terms or otherwise exercised in full, such that upon such exercise, all of the Company Warrants (other than the Company
Pre-Funded Convertible Note Investor Warrants) converted into Company Preferred Stock shall no longer be outstanding and shall cease
to exist, and each holder of Company Warrants (other than the Company Pre-Funded Convertible Note Investor Warrants) shall thereafter
cease to have any rights with respect to such securities; and
(c)
each Company Warrant (other than the Company Pre-Funded Convertible Note Investor Warrants) exercisable for Company Common Stock that
is outstanding and unexercised immediately prior to the Effective Time shall automatically be exercised on a cashless basis in full in
accordance with its terms or otherwise exercised in full, such that upon such exercise, all of the Company Warrants (other than the Company
Pre-Funded Convertible Note Investor Warrants) shall no longer be outstanding and shall cease to exist, and each holder of Company Warrants
(other than the Company Pre- Funded Convertible Note Investor Warrants) shall thereafter cease to have any rights with respect to such
securities.
6
2.02
Consideration.
(a)
Pre-Funded Convertible Note Consideration. The consideration to be paid in, or in connection with, the Merger to a holder of a
Pre-Funded Convertible Note shall be a number of shares of Domesticated Purchaser Series A Preferred Stock equal to the quotient, rounded
up to the nearest whole share, of (i) the total outstanding principal and accrued and unpaid interest on each Pre-Funded Convertible
Note as of one day prior to the Closing Date, divided by (ii) the Applicable Pre-Funded Convertible Note Conversion Price (the “Convertible
Note Consideration”).
(b)
Pre-Funded Convertible Note Investor Warrant Consideration. The consideration to be paid in, or in connection with, the Merger
to a holder in respect of each Company Pre-Funded Convertible Note Investor Warrant shall be one or more Domesticated Purchaser Series
A Investor Warrants to purchase a number of shares of Domesticated Purchaser Common Stock (on otherwise the same terms as applicable
to the Domesticated Purchaser Series A Investor Warrants issued to the Series A Preferred Stock Investors in the PIPE Investment) equal
to the quotient of (i) the aggregate exercise price of such Company Pre-Funded Convertible Note Investor Warrant immediately prior to
the Effective Time divided by (ii) $12.00 (the “Pre-Funded Convertible Note Investor Warrant Consideration”).
(c)
Company Preferred Stock Consideration. The consideration to be paid in, or in connection with, the Merger to holders of Company
Preferred Stock shall be the sum of: (i) if such holder participates in the Preferred Stock Preference Exchange, a number of shares of
Domesticated Purchaser Common Stock equal to the quotient set forth in Section 2.03(a)(iii)(A) and (ii) if such holder participates
in the Preferred Stock As-Converted Exchange, a number of shares of Domesticated Purchaser Common Stock equal to the quotient set forth
in Section 2.03(a)(iii)(1)(B) (collectively, the “Aggregate Preferred Stock Consideration”).
(d)
All Other Company Securities. The aggregate consideration to be paid to holders of all other equity interests of the Company in,
or in connection with, the Merger (for the avoidance of doubt, other than the Pre-Funded Convertible Notes and the Company Pre-Funded
Convertible Note Investor Warrants) shall be the Aggregate Common Stock Base Consideration. The consideration to be paid in, or in connection
with, the Merger in respect of each share of Company Common Stock that is issued and outstanding, or deemed to be issued and outstanding
after giving effect to the conversion described in Section 2.01 and including all shares of Company Common Stock deemed to be
issued and outstanding pursuant to Section 2.03 immediately prior to the Effective Time, shall be a number of shares of Domesticated
Purchaser Common Stock equal to the Per Share Base Consideration.
(e)
Aggregate Earn-out Consideration. Subject to the vesting and forfeiture conditions specified in Section 2.09, the aggregate
earnout consideration to be paid to the Eligible Stockholders shall be the Aggregate Earn-out Consideration. The earnout consideration
to be paid in, or in connection with, the Merger in respect of (i) each share of Company Common Stock and each share of Company Preferred
Stock that is issued and outstanding, or deemed to be issued and outstanding after giving effect to the conversion described in Section
2.01 and including all shares of Company Common Stock and Company Preferred Stock deemed to be issued and outstanding pursuant to
Section 2.03 immediately prior to the Effective Time and (ii) each share of Domesticated Purchaser Common Stock issuable upon
a hypothetical conversion at the time of the applicable Triggering Event of the shares of Domesticated Purchaser Series A Preferred Stock,
solely to the extent issued pursuant to Section 2.02(a), shall be a number of shares of Domesticated Purchaser Common Stock equal
to the right to receive, subject to the vesting conditions specified in Section 2.09, a number of shares of Domesticated Purchaser
Common Stock equal to the Earn-out Exchange Ratio (the “Per Share Earn-out Consideration”).
7
2.03
Conversion of Securities.
(a)
Effect on Company Securities. At the Effective Time, by virtue of the Merger and without any action on the part of the Purchaser,
Merger Sub, the Company or any holder of securities of any of the foregoing:
(i)
each Company Security that is owned by the Purchaser, Merger Sub or the Company (in treasury or otherwise) immediately prior to the Effective
Time (each, an “Excluded Share”) shall be cancelled and shall cease to exist, and no consideration shall be
delivered in exchange therefore;
(ii)
each Company Option, including the Vested Company Options and Unvested Company Options, that is outstanding immediately prior to the
Effective Time shall be assumed by Purchaser and converted into an option to purchase a number of shares of Domesticated Purchaser Common
Stock (such option, an “Exchanged Option”) equal to the product (rounded down to the nearest whole number)
of (x) the number of shares of Company Common Stock subject to such Company Option immediately prior to the Effective Time and (y) the
Company Option Exchange Ratio, at an exercise price per share (rounded up to the nearest whole cent) equal to the quotient of (A) the
exercise price per share of such Company Option immediately prior to the Effective Time divided by (B) the Company Option Exchange Ratio;
provided, however, that the exercise price and the number of shares of Domesticated Purchaser Common Stock purchasable
pursuant to the Exchanged Options shall be determined in a manner consistent with the requirements of Section 409A of the Code and Treasury
Regulation Section 1.409A-1(b)(5)(v)(D); provided, further, that in the case of any Exchanged Option to which Section 422
of the Code applies, the exercise price and the number of shares of Domesticated Purchaser Common Stock purchasable pursuant to such
option shall be determined in accordance with the foregoing, subject to such adjustments as are necessary in order to satisfy the requirements
of Section 424(a) of the Code. Notwithstanding anything to the contrary herein, with respect to the Unvested Company Options outstanding
as of the date of this Agreement (the “Signing-Date Unvested Company Options”), fifty percent (50%) of such
Signing-Date Unvested Company Options (rounded down to the nearest whole number on an aggregate basis) shall, upon their assumption and
conversion into Exchanged Options, be granted under, and the shares of Domesticated Purchaser Common Stock subject thereto shall be issued
pursuant to and counted against the share reserve of, the Equity Incentive Plan, and shall accordingly reduce, and be subject to, the
EIP Limit; and the remaining fifty percent (50%) of such Signing-Date Unvested Company Options, together with all Vested Company Options,
shall be assumed by Purchaser and converted into Exchanged Options outside of, and shall not count against the share reserve of or the
EIP Limit under, the Equity Incentive Plan. Except as specifically provided above or as agreed to in writing with any holder of a Company
Option, following the Effective Time, each Exchanged Option shall continue to be governed by the same vesting and exercisability terms
and otherwise substantially similar terms and conditions as were applicable to the corresponding former Company Option immediately prior
to the Effective Time. At or prior to the Effective Time, the Parties and their boards, as applicable, shall adopt any resolutions and
take any actions that are necessary to effectuate the treatment of the Company Options pursuant to this Section 2.03(a)(ii);
(iii)
each share of Company Preferred Stock (including each share of Company Preferred Stock issued upon the conversions and exercises described
in Sections 2.01(a)-(b)) issued and outstanding immediately prior to the Effective Time shall be canceled and converted into the
right to receive (1) the number of shares of Domesticated Purchaser Common Stock equal to the greater of (A) the quotient obtained from
(x) the applicable Preferred Stock Liquidation Preference of such share of Company Preferred Stock divided by (y) the Redemption Price
(such shares of Company Preferred Stock receiving a number of shares of Domesticated Purchaser Common Stock pursuant to this clause (A),
“Preferred Stock Preference Exchange”) and (B) the product of (x) the number of shares of Company Common Stock
that such share of Company Preferred Stock would be entitled to convert into as of immediately prior to the Effective Time in accordance
with the Company Certificate of Incorporation, multiplied by (y) the Common Stock Exchange Ratio (such shares of Company Preferred Stock
receiving a number of shares of Domesticated Purchaser Common Stock pursuant to this clause (B), “Preferred Stock As-Converted
Exchange”), and (2) the Per Share Earn-out Consideration; and
8
(iv)
each share of Company Common Stock that is issued and outstanding immediately prior to the Effective Time (other than Excluded Shares)
shall be cancelled and converted into the right to receive the Per Share Base Consideration and the Per Share Earn-out Consideration.
(b)
Effect on Pre-Funded Convertible Notes. At the Effective Time, by virtue of the Merger and without any action on the part of the
Purchaser, Merger Sub, the Company, the holder in respect of any Pre-Funded Convertible Note or any holder of securities of any of the
foregoing, each Pre-Funded Convertible Note that is outstanding immediately prior to the Effective Time shall automatically be canceled
and converted into the right to receive the Convertible Note Consideration and the Per Share Earn-out Consideration.
(c)
Effect on Company Pre-Funded Convertible Note Investor Warrants. At the Effective Time, by virtue of the Merger and without any
action on the part of the Purchaser, Merger Sub, the Company or any holder of Company Pre-Funded Convertible Note Investor Warrants,
each Company Pre-Funded Convertible Note Investor Warrant that is outstanding and unexercised immediately prior to the Effective Time
shall automatically be canceled and converted into the right to receive Pre-Funded Convertible Note Investor Warrant Consideration.
(d)
Effect on Cayman Purchaser Units. At the Effective Time, by virtue of the Merger and without any action on the part of the Purchaser,
Merger Sub, the Company or any holder of Company Pre-Funded Convertible Note Investor Warrants, each Domesticated Purchaser Unit shall
be cancelled and will thereafter entitle the holder thereof to one (1) share of Domesticated Purchaser Common Stock and one-third (1/3)
of one Domesticated Purchaser Warrant.
2.04
Surrender and Payment.
(a)
Exchange Fund. Immediately prior to or at the Effective Time, the Purchaser shall deposit, or cause to be deposited, with Continental
for the benefit of the Company Stockholders (other than with respect to any Excluded Shares and Company Options) evidence in book-entry
form of shares of Domesticated Purchaser Common Stock representing the number of shares of Domesticated Purchaser Common Stock sufficient
to deliver the aggregate Per Share Base Consideration payable with respect thereto pursuant to Section 2.03 of this Agreement
(the “Exchange Fund”). The Purchaser shall cause Continental, pursuant to irrevocable instructions, to pay
the Per Share Base Consideration out of the Exchange Fund in accordance with the terms of this Agreement.
(b)
Stock Exchange Procedures. Within two (2) Business Days following the effectiveness of the Proxy Statement/Registration Statement,
the Purchaser shall cause Continental to deliver to each holder of shares of Company Common Stock (other than with respect to any Excluded
Shares and Company Options) and Company Preferred Stock, instructions for exchanging each such holder’s shares (other than any
Excluded Shares and Company Options) for such holder’s applicable portion of the Aggregate Common Stock Base Consideration and
the Aggregate Preferred Stock Consideration from the Exchange Fund, and which shall be in a form reasonably acceptable to the Parties
(a “Letter of Transmittal”). Promptly following receipt of a properly completed and executed Letter of Transmittal,
and in any event within two (2) Business Days following the Closing, Continental shall deliver the applicable portion of the Aggregate
Common Stock Base Consideration or the Aggregate Preferred Stock Consideration to each such holder with respect to such shares of Company
Common Stock and Company Preferred Stock. Effective as of one (1) Business Day prior to soliciting the Company Stockholder Approval pursuant
to Section 7.01(b), the Company will not record or recognize any transfers of Company Securities on the record books of the Company,
other than transfers as to which the Company has been notified of, in writing, prior to such Business Day.
9
(c)
Termination of Exchange Fund. Promptly following the earlier of (i) the date on which the entire Exchange Fund has been disbursed
and (ii) the date which is one (1) year after the Effective Time, the Purchaser shall instruct Continental to deliver to the Purchaser
any remaining portion of the Exchange Fund and other documents in its possession related to the Transaction, and Continental’s
duties shall terminate. Thereafter, each Company Stockholder may look only to the Purchaser (subject to applicable abandoned property,
escheat or other similar Laws), as general creditors thereof, for satisfaction of such Company Stockholder’s claim for Per Share
Base Consideration that such Company Stockholder may have the right to receive pursuant to Section 2.02 without any interest thereon.
None of the Company, the Purchaser, the Surviving Company or Continental shall be liable to any Person for any portion of the aggregate
Per Share Base Consideration delivered to a public official pursuant to any applicable abandoned property, escheat or similar Law. Notwithstanding
any other provision of this Agreement, any portion of the aggregate Per Share Base Consideration that remains undistributed to Company
Stockholders as of immediately prior to the date on which such portion of the aggregate Per Share Base Consideration would otherwise
escheat to or become the property of any Governmental Authority shall, to the extent permitted by applicable Law, become the property
of the Purchaser, free and clear of all claims or interest of any Person previously entitled thereto.
2.05
Dissenting Shares. Notwithstanding any provision of this Agreement to the contrary and to the extent available
under the DGCL, shares of Company Common Stock issued and outstanding immediately prior to the Effective Time (other than shares of Company
Common Stock, if any, cancelled in accordance with Section 2.03(a)(i)) that are held by stockholders who have neither voted in
favor of the Merger nor consented thereto in writing and who have demanded properly in writing appraisal or dissenters’ rights
for such shares of Company Common Stock in accordance with Section 262 of the DGCL (collectively, the “Dissenting Shares”)
and otherwise complied with all of the provisions of the DGCL relevant to the exercise and perfection of appraisal rights, shall not
be converted into, and the holders of such Dissenting Shares shall have no right to receive, the applicable portion of the Aggregate
Common Stock Base Consideration, the Aggregate Preferred Stock Consideration and the Aggregate Earn-out Consideration unless and until
such holder fails to perfect or withdraws or otherwise loses his, her or its right to appraisal and payment under the DGCL. Notwithstanding
the foregoing, if any such holder fails to perfect or otherwise waives, withdraws or loses the right to dissent under Section 262 of
the DGCL, or if a court of competent jurisdiction determines that such holder is not entitled to the relief provided by Section 262 of
the DGCL, such Dissenting Shares shall be treated as if they had been converted as of the Effective Time into the right to receive the
portion of the Aggregate Common Stock Base Consideration, the Aggregate Preferred Stock Consideration and the Aggregate Earn-out Consideration
to which such holder is entitled pursuant to the applicable subsections of Section 2.02, without interest thereon, upon surrender
of the certificate or certificates representing such Dissenting Shares in accordance with Section 2.04.
2.06
No Fractional Shares. No fractional shares of Domesticated Purchaser Common Stock, or certificates or scrip representing
fractional shares of Domesticated Purchaser Common Stock, will be issued upon the conversion of the Company Securities pursuant to the
Merger, and any such fractional shares or interests therein will not entitle the owner thereof to vote or to any rights of a stockholder
of Purchaser. Any fractional shares of Domesticated Purchaser Common Stock will be rounded down to the nearest whole number.
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2.07
Lost or Destroyed Certificates. Notwithstanding any other provision to this Agreement, if any certificate shall have been
lost, stolen or destroyed, then upon the making of a customary affidavit of that fact by the Person claiming such Certificate to be lost,
stolen or destroyed in a form reasonably acceptable to the Company, Continental shall issue, in exchange for such lost, stolen or destroyed
certificate, the portion of the aggregate Per Share Base Consideration to be paid in respect of the shares of Company Common Stock formerly
represented by such certificate(s) as contemplated under this Agreement.
2.08
Withholding. Notwithstanding any other provision to this Agreement, the Purchaser, Merger Sub, the Company, and the Surviving
Company (and their respective Representatives) shall be entitled to deduct and withhold from any amount payable to any Person pursuant
to this Agreement such Taxes that are required to be deducted or withheld with respect to such amounts under the Code, or under any provision
of U.S. state or local or non-U.S. tax law. To the extent that amounts are so deducted and withheld and paid over to the appropriate
Governmental Authorities, such amounts shall be treated for all purposes under this Agreement as having been paid to the Person in respect
of which such deduction and withholding was made. Notwithstanding the foregoing, the Purchaser, Merger Sub, the Company and the Surviving
Company shall use commercially reasonable efforts to provide recipients of consideration with a reasonable opportunity to provide documentation
establishing exemptions from or reductions of such withholdings. In the case of any such payment payable to employees of the Company
in connection with the Merger treated as compensation, the Parties shall reasonably cooperate to pay such amounts through the Company’s
payroll to facilitate applicable withholding; provided, however that with respect to any Earnout Shares issued pursuant to Section
2.09, any withholding obligation arising in connection with such issuance may be satisfied by withholding from issuance or disposing
of, or causing the disposition of, a portion of the Earnout Shares otherwise issuable to such recipient having a fair market value, as
determined by the Purchaser in good faith, sufficient to enable the Purchaser to satisfy in full any such withholding obligation.
2.09
Earnout.
(a)
Earn-out Consideration. In addition to the issuance of the Per Share Base Consideration pursuant to Section 2.02, as promptly
as reasonably practicable (but in any event, within five (5) Business Days) after the occurrence of a Triggering Event, the Purchaser
shall issue or cause to be issued to the Eligible Stockholders (based on their respective Pro Rata Shares), the following shares of Domesticated
Purchaser Common Stock (which shall be equitably adjusted for any stock split, reverse stock split, stock dividend, reorganization, recapitalization,
reclassification, combination, exchange of shares or other like change or transaction with respect to shares of Domesticated Purchaser
Common Stock occurring after the Closing, the “Aggregate Earn-out Consideration”), upon the terms and subject
to the conditions set forth in this Agreement and the Ancillary Documents:
(i)
Upon the occurrence of Triggering Event I, a one-time issuance of 3,000,000 Earnout Shares;
(ii)
Upon the occurrence of Triggering Event II, a one-time issuance of 3,000,000 Earnout Shares; and
(iii)
Upon the occurrence of Triggering Event III, a one-time issuance of 5,000,000 Earnout Shares.
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(b)
If, during the Earnout Period, there is a Change of Control pursuant to which the Purchaser or its shareholders have the right to receive
consideration implying a value per share of Domesticated Purchaser Common Stock (as determined in good faith by the Post-Closing Purchaser
Board) of:
(i)
less than $15.00 per share, then Section 2.09(a) and this Section 2.09(b) shall terminate and no further shares of Domesticated
Purchaser Common Stock shall be issuable thereunder or hereunder;
(ii)
greater than or equal to $15.00 per share but less than $20.00 per share, then, (A) immediately prior to such Change of Control, the
Purchaser shall issue 2,500,000 shares of Domesticated Purchaser Common Stock to the Eligible Stockholders (based on their respective
Pro Rata Shares) (less any Earnout Shares issued prior to such Change of Control pursuant to Section 2.09(a)(i) or (ii);
provided, that such reduction shall not reduce the number of shares required to be issued to a number that is below zero) and (B) thereafter,
Section 2.09(a) and this Section 2.09(b) shall terminate and no further Earnout Shares shall be issuable thereunder or
hereunder;
(iii)
greater than or equal to $20.00 per share, then (A) immediately prior to such Change of Control, the Company shall issue 5,000,000 shares
of Domesticated Purchaser Common Stock to the Eligible Stockholders (based on their respective Pro Rata Shares) (less any Earnout Shares
issued prior to such Change of Control pursuant to Section 2.09(a)(i) or (ii); provided, that such reduction shall not
reduce the number of shares required to be issued to a number that is below zero) and (B) thereafter, Section 2.09(a) and this
Section 2.09(b), shall terminate and no further Earnout Shares shall be issuable thereunder or hereunder;
(c)
The Common Stock Price targets set forth in the definitions of Triggering Event I and Triggering Event II, and in Sections 2.09(a)(i)
and (ii), shall be equitably adjusted for any stock split, reverse stock split, stock dividend, reorganization, recapitalization,
reclassification, combination, exchange of shares or other like change or transaction with respect to shares of Domesticated Purchaser
Common Stock occurring after the Closing.
(d)
No certificates or scrip or shares representing fractional Earnout Shares shall be issued pursuant to this Section 2.09 and such
fractional share interests will not entitle the owner thereof to vote or to have any rights of shareholder. In lieu of any fractional
Earnout Shares to which any Eligible Stockholder would otherwise be entitled, the Company shall round down to the nearest whole Earnout
Share. No cash settlements shall be made with respect to fractional shares eliminated by rounding.
ARTICLE
III
CLOSING
3.01
Closing. Subject to the satisfaction or waiver of the conditions set forth in Article VII, the consummation of the
Transactions (other than the transactions contemplated by this Agreement that by their nature are to be satisfied prior to the Closing)
(the “Closing”) shall take place by electronic exchange of documents and signatures at a time and date to be
specified in writing by the Parties, which date shall be no later than the third (3rd) Business Day after all the Closing
conditions in Article VII have been satisfied or waived (other than those conditions that by their nature are to be satisfied
at the Closing, but subject to the satisfaction or waiver of those conditions), or at such other date, time or place (including remotely)
as the Purchaser and the Company may agree (the date and time at which the Closing is actually held being the “Closing Date”).
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3.02
Closing Documents.
(a)
Purchaser Closing Certificate. Two (2) Business Days prior to the Closing, the Purchaser shall deliver to the Company a written
notice (the “Purchaser Closing Certificate”) setting forth the Purchaser’s good faith calculation of
the following: (i) the aggregate amount of cash proceeds that will be required to satisfy any exercise of the Redemptions; (ii) the aggregate
amount of the Purchaser Transaction Costs as of the Closing; and (iii) the number of shares of Domesticated Purchaser Common Stock and
Domesticated Purchaser Warrants, in each case, to be outstanding as of the Closing and after giving effect to the Domestication, and
the Redemption and the issuance of securities in connection with the consummation of the PIPE Investment (but excluding any shares of
Domesticated Purchaser Common Stock to be issued in the Merger).
(b)
Company Closing Certificate. Two (2) Business Days prior to the Closing, the Company shall deliver to the Purchaser a written
notice (the “Company Closing Certificate”) setting forth the Company’s good faith calculation of the
aggregate amount of the Company Transaction Costs as of the Closing, including all invoices, wire instructions and applicable Tax forms
for each Person owed (and any other supporting details reasonably requested by the Purchaser); provided, that the failure to provide
wire instructions or Tax forms shall not affect the effectiveness of the Company’s compliance with this requirement.
(c)
Access; Cooperation. From and after the delivery of the Purchaser Closing Certificate or the Company Closing Certificate, as the
case may be, until the Closing Date, each of the Purchaser and the Company shall (i) provide the other Parties and their Representatives
with reasonable access to information reasonably requested by the Purchaser or the Company or any of their respective Representatives
in connection with the review of the Purchaser Closing Certificate or the Company Closing Certificate, as the case may be, (ii) consider
in good faith any comments to the Purchaser Closing Certificate or the Company Closing Certificate, as the case may be, and (iii) revise
the Purchaser Closing Certificate or the Company Closing Certificate, respectively, to incorporate any changes the Purchaser or the Company,
respectively, reasonably determines are necessary or appropriate given such comments.
3.03
Payment of Expenses and Treatment of Closing Indebtedness.
(a)
Company Transaction Costs. On the Closing Date, the Purchaser shall pay or cause to be paid by wire transfer of immediately available
funds all Company Transaction Costs.
(b)
Purchaser Transaction Costs. On the Closing Date, the Purchaser shall pay or cause to be paid by wire transfer of immediately
available funds all Purchaser Transaction Costs.
(c)
Closing Indebtedness. On the Closing Date, the Purchaser shall pay the outstanding amount of the Closing Indebtedness to the holders
of the Closing Indebtedness in order to repay all such Closing Indebtedness, with the result that immediately following the Closing there
will be no further monetary obligations of the Company or any of its Subsidiaries with respect to any Closing Indebtedness outstanding
immediately prior to the Closing.
ARTICLE
IV
REPRESENTATIONS
AND WARRANTIES OF THE COMPANY
Except
as set forth in the disclosure letter dated as of the date of this Agreement delivered by the Company to the Purchaser (the “Company
Disclosure Letter”) prior to or in connection with the execution and delivery of this Agreement, the Company hereby represents
and warrants to the Purchaser and Merger Sub, as of the date hereof and as of the Closing, as follows:
4.01
Organization and Standing. The Company is a Delaware corporation duly incorporated, validly existing and in good standing
under the DGCL and has all requisite power and authority to own, lease and operate its properties and to carry on its business as now
being conducted, except as would not be material to the Company. The Company has provided to the Purchaser accurate and complete copies
of its Organizational Documents, each as amended to date and as currently in effect. The Company is not in violation of any provision
of its Organizational Documents in any material respect.
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4.02
Authorization; Binding Agreement. The Company has all requisite power and authority to execute and deliver this Agreement
and each Ancillary Document to which it is or is required to be a party, to perform the Company’s obligations hereunder and thereunder
and to consummate the Transactions. The execution and delivery of this Agreement and each Ancillary Document to which the Company is
or is required to be a party and the consummation of the transactions contemplated hereby and thereby, (a) have been duly and validly
authorized by the Company Board (or other similar governing body) in accordance with the Company’s Organizational Documents, the
DGCL, any other applicable Law or any Contract to which the Company or any of its stockholders is a party or by which it or its securities
are bound and (b) other than the adoption and approval of this Agreement and the Transactions, including the Merger, by the affirmative
vote (or written consent) of the holders of a majority of the outstanding shares of Company Common Stock and the holders of a majority
of the outstanding shares of Company Preferred Stock voting together as a separate class, in each case, pursuant to the terms and in
accordance with the satisfaction of the conditions of the Company’s Organizational Documents and applicable Law (the “Company
Stockholder Approval”), no other proceedings on the part of the Company are necessary to authorize the execution and delivery
of this Agreement and each Ancillary Document to which it is a party or to consummate the Transactions. This Agreement has been, and
each Ancillary Document to which the Company is or is required to be a party shall be when delivered, duly and validly executed and delivered
by the Company and assuming the due authorization, execution and delivery of this Agreement and any such Ancillary Document by the other
parties hereto and thereto, constitutes, or when delivered shall constitute, the legal, valid and binding obligation of the Company,
enforceable against the Company in accordance with its terms, subject to the Enforceability Exceptions. The Company Board, by resolutions
duly adopted, has (i) determined that this Agreement, the Ancillary Documents and the Transactions are advisable, and in the best interests
of, the Company and its Stockholders and (ii) approved this Agreement and the Ancillary Documents and the Transactions in accordance
with the DGCL, the Company’s Organizational Documents and any other applicable Law. No vote of any holders of any class or series
of capital stock of the Company is necessary to approve this Agreement or the Transactions, other than the Company Stockholder Approval.
4.03
Capitalization.
(a)
Set forth on Section 4.03(a) of the Company Disclosure Letter is a true, correct and complete list of each record holder of Company
Securities and the number and type of Company Securities held by each such holder as of the date hereof.
(b)
Prior to giving effect to the Transactions, all of the Company Securities are and will be owned free and clear of any Liens other than
those imposed under the Company’s Organizational Documents, applicable securities Laws, or as set forth on Section 4.03(b)(i)
of the Company Disclosure Letter. Other than the Company Securities set forth in Section 4.03(b)(ii) of the Company Disclosure
Letter, the Company does not have any other issued or outstanding common stock or any other securities. All of the issued and outstanding
Company Securities have been duly authorized and validly issued in accordance with all applicable Laws, including applicable securities
Laws, and the Company’s Organizational Documents, are fully paid and nonassessable and are not subject to, nor were they issued
in violation of, any preemptive rights, rights of first refusal or similar rights, except where such violation or failure would not reasonably
be expected to be, individually or in the aggregate, material to the Company. Except as set forth on Section 4.03(b)(iii) of the
Company Disclosure Letter or in the Company’s Organizational Documents, there are no preemptive rights or rights of first refusal
or first offer, nor are there any Contracts, commitments, arrangements or restrictions to which the Company or, to the Knowledge of the
Company, any of its security holders is a party or bound relating to any Company Securities, whether or not outstanding. Except as set
forth on Section 4.03(b)(iv) of the Company Disclosure Letter or as provided for in this Agreement, there are no (1) outstanding
or authorized equity appreciation, phantom equity or similar rights with respect to the Company or (2) voting trusts, proxies, stockholder
agreements or any other agreements or understandings with respect to the voting of the Company Securities. Except as set forth in the
Company’s Organizational Documents, there are no outstanding contractual obligations of the Company to repurchase, redeem or otherwise
acquire any equity interests or securities of the Company, nor has the Company granted any registration rights to any Person with respect
to its securities. Except as disclosed in the Company Financials, the Company has not since its incorporation declared or paid any distribution
in respect of its equity interests and has not repurchased, redeemed or otherwise acquired any equity interests of the Company, and the
Company Board has not authorized any of the foregoing.
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(c)
Section 4.03(c)(i) of the Company Disclosure Letter sets forth, as of the date of this Agreement, the following information with
respect to each Company Option outstanding: (i) the name of the Company Option recipient; (ii) the number of shares of the Company subject
to such Company Option; (iii) the exercise or purchase price of such Company Option; (iv) the date on which such Company Option was granted;
(v) the vesting schedule of such Company Option; and (vi) the date on which such Company Option expires. Each Company Option was validly
granted or issued and properly approved by the Company Board (or appropriate committee thereof) and, in the case of the Company Options,
in accordance with the terms of the Company Incentive Plan or the applicable award agreement. Each Company Option (i) was granted in
compliance with all applicable Laws and all of the terms and conditions of the Company Incentive Plan or the applicable award agreement,
(ii) was not granted with an exercise price per share less than the fair market value (pursuant to Section 409A or Section 422, as applicable,
of the Code) of the underlying shares of Company Common Stock as of the date such Company Option was granted, and (iii) has a grant date
that is not earlier than the date on which the Company Board or compensation committee actually awarded such Company Option. Section
4.03(c)(ii) of the Company Disclosure Letter sets forth the terms of any vesting acceleration rights and any other vesting acceleration
that will be applicable to any unvested Company Options. No Company Common Stock is subject to vesting as of the date hereof. All Company
Common Stock that is subject to issuance as aforesaid, upon issuance on the terms and conditions specified in the instruments pursuant
to which they are issuable, will be duly authorized, validly issued, fully paid and nonassessable. No Company Options are “early
exercisable” as of the date hereof. The Company has no outstanding commitments to grant Company Options.
(d)
Section 4.03(d) of the Company Disclosure Letter sets forth, as of the date hereof, a true, correct and complete list of each
holder of Company Convertible Securities, including (i) the name of the holder, (ii) the date of issuance, (iii) the principal amount
or purchase price paid for such Company Convertible Security, and (iv) the applicable valuation cap, discount rate, or other material
economic terms. There are no side letters, amendments, waivers, or other agreements that modify the standard terms of any Company Convertible
Securities. The Company has no outstanding commitments to issue any additional Company Convertible Securities. The treatment of Company
Convertible Securities under Section 2.01(a) is permitted under applicable Laws, and the terms and conditions of such Company
Convertible Securities, or the consent of any holder, thereof.
(e)
Except as provided for in this Agreement, as a result of the consummation of the Transaction, no units, warrants, options or other securities
of the Company are issuable and no rights in connection with any units, warrants, options or other securities of the Company accelerate
or otherwise become triggered (whether as to vesting, exercisability, convertibility or otherwise).
4.04
Subsidiaries. The Company has not had and does not have any subsidiaries.
15
4.05
No Conflict; Governmental Consents and Filings.
(a)
Except as otherwise described in Section 4.05(a) of the Company Disclosure Letter, subject to the receipt of consents, approvals,
authorizations and other requirements set forth in Section 4.02 of the Company Disclosure Letter, the execution, delivery and
performance of this Agreement (including the consummation by the Company of the Transactions) and the other Ancillary Documents to which
the Company is a party by the Company, do not and will not: (i) violate any provision of, or result in the breach of, any applicable
Law to which the Company is subject or by which any property or asset of the Company is bound; (ii) conflict with or violate the Organizational
Documents of the Company; (iii) violate any provision of or result in a breach, default or acceleration of, require a consent under,
or create any right to payment under any Company Material Contract, material Company Real Property Lease (as defined in Section 4.16(b)
herein) or Material Current Government Contract, or terminate or result in the termination of any Company Material Contract, material
Company Real Property Lease or Material Current Government Contract, or result in the creation of any Lien (other than a Permitted Lien)
under any Company Material Contract, material Company Real Property Lease or Material Current Government Contract upon any of the properties
or assets of the Company, or constitute an event which, after notice or lapse of time or both, would result in any such violation, breach,
default, acceleration, termination or creation of a Lien (other than a Permitted Lien); or (iv) result in a violation or revocation of
any required Consents, except to the extent that the occurrence of any of the foregoing items set forth in clauses (i), (iii) or (iv)
would not, individually or in the aggregate, reasonably be expected to prevent, materially delay or materially impair the ability of
the Company to consummate the Transactions or to have a Company Material Adverse Effect.
(b)
Assuming the truth and completeness of the representations and warranties of the Purchaser and Merger Sub contained in this Agreement,
no consent, notice, approval or authorization of, or designation, declaration or filing with, any Governmental Authority is required
on the part of the Company with respect to the Company’s execution, delivery or performance of this Agreement, any of the other
Ancillary Documents to which it is a party or the consummation by the Company of the Transactions, except for: (i) any consents, notices,
approvals, authorizations, designations, declarations or filings, the absence of which would not, individually or in the aggregate, reasonably
be expected to have a Company Material Adverse Effect; (ii) compliance with any applicable requirements of the securities Laws; (iii)
compliance with applicable Antitrust Laws; and (iv) as otherwise disclosed on Section 4.05(b) of the Company Disclosure Letter.
4.06
Financial Statements.
(a)
The Company has provided to the Purchaser true, correct and complete copies of: (i) the unaudited consolidated financial statements of
the Company (including, in each case, any related notes thereto) as of and for the (x) year ended December 31, 2025 and (y) three month
periods ending March 31, 2026, each consisting of the consolidated balance sheets of the Company as of such dates and the related consolidated
income statements and statements of cash flows for the periods then ended (the “Draft Company Financials”)
and (ii) the unaudited consolidated financial statements of the Company (including, in each case, any related notes thereto) as of and
for the year ended December 31, 2024, consisting of the consolidated balance sheet of the Company as of such date and the related consolidated
income statement, changes in member equity and statement of cash flows for the fiscal year then ended, prepared in accordance with GAAP
and PCAOB (the “Unaudited Company Financials”, together with the Draft Company Financials, the “Company
Financials”). The Company Financials were derived in all material respects from the books and records of the Company, which
books and records are, in all material respects, true, correct and complete and have been maintained in all material respects in accordance
with commercially reasonable business practices. The Company Financials, when delivered, will have been prepared in all material respects,
in accordance with GAAP consistently applied throughout the periods covered thereby and present fairly in all material respects, the
consolidated financial position, results of operations, income (loss), changes in equity and cash flows of the Company as of the dates
and for the periods indicated in such Company Financials in conformity with GAAP (except in the case of the Draft Company Financials
that cover a period of less than one year for the absence of footnote disclosures and other presentation items required for GAAP and
exclude year-end adjustments which will not be material in amount) and were derived from and accurately reflect in all material respects,
the books and records of the Company. The Company has not ever been subject to the reporting requirements of Sections 13(a) and 15(d)
of the Exchange Act.
16
(b)
The Company has established and maintains a system of internal controls. Such internal controls are designed to provide reasonable assurance
that (i) transactions are executed in all material respects in accordance with management’s authorization and (ii) transactions
are recorded as necessary to permit preparation of financial statements in conformity with GAAP and to maintain accountability for the
Company’s assets.
(c)
The Company has not identified and has not received written notice from an independent auditor of (x) any significant deficiency or material
weakness in the system of internal controls utilized by the Company (other than a significant deficiency or material weakness that has
been previously disclosed in writing to Purchaser and is set forth on Section 4.06(a) of the Company Disclosure Letter), (y) any
material fraud that involves the Company’s management or other employees who have a significant role in the preparation of financial
statements or the internal controls over financial reporting utilized by the Company or (z) any claim or allegation regarding any of
the foregoing.
(d)
There are no outstanding loans or other extensions of credit made by the Company to any executive officer (as defined in Rule 3b-7 under
the Exchange Act) or director of the Company.
4.07
Undisclosed Liabilities. There is no liability, debt or obligation (absolute, accrued, contingent or otherwise) of the
Company of a type required to be reflected or reserved for on a balance sheet prepared in accordance with GAAP, except for liabilities,
debts and obligations: (a) provided for in, or otherwise reflected or reserved for on the Company Financials or disclosed in the notes
thereto; (b) incurred in the ordinary course of the operation of business of the Company since the date of the most recent balance sheet
included in the Company Financials; (c) incurred in connection with the Transactions; or (d) which would not, individually or in the
aggregate, reasonably be expected to have a Company Material Adverse Effect.
4.08
Absence of Certain Changes. Except as set forth on Section 4.08 of the Company Disclosure Letter, and for activities
conducted in connection with this Agreement and the transactions contemplated hereby, since March 31, 2026 through the date of this Agreement,
(a) the Company has conducted its business in the ordinary course of business consistent with past practice, (b) there has not been any
Company Material Adverse Effect, and (c) the Company has not taken any action or committed or agreed to take any action that would be
prohibited by Section 6.02(b) (without giving effect to Section 6.02(b) of the Company Disclosure Letter) if such action
were taken on or prior to the Closing without the consent of the Purchaser.
4.09
Compliance with Laws. Provided that this Section 4.09 shall not apply with respect to the matters covered by Section
4.25:
(a)
The Company has, during the period beginning five (5) years prior to and ending on the Closing Date, complied with, and is not currently
in violation of, any applicable Law with respect to the conduct of its business, or the ownership or operation of its business, except
for failures to comply or violations which, individually or in the aggregate, have not been and would not reasonably expected to be,
material to the Company. Except as disclosed on Section 4.09 of the Company Disclosure Letter, no written, or to the Knowledge
of the Company, oral notice of non-compliance with any applicable Law has been received that, individually or in the aggregate, would
reasonably be expected to be material to the Company. For
the avoidance of doubt, compliance with aviation regulatory requirements (including requirements of the Federal Aviation Administration,
the Department of Transportation, and applicable airworthiness authorities) shall be assessed solely with reference to the Company Aviation
Authorizations listed on Section 4.09(a) of the Company Disclosure Letter, and no representation is made hereunder with respect
to aviation authorizations, exemptions, certificates or approvals not specifically listed therein.
17
(b)
The Company is in possession of all franchises, grants, authorizations, licenses, permits, consents, certificates, approvals and orders,
or other Consents from Governmental Authorities and/or third Persons (the “Approvals”) necessary to own, lease
and operate the properties it purports to own, operate or lease and to carry on its business as it is now being conducted and is in compliance
with all terms and conditions of such Approvals, in each case, except where the failure to have such Approvals or be in compliance therewith,
individually or in the aggregate, have not been and would not reasonably be expected to be, material to the Company. Notwithstanding
the foregoing, with respect to aviation-specific Approvals (including FAA certificates, exemptions, authorizations, and special permits
issued under 14 C.F.R. Parts 11, 21, 47, 61, 91, 107 or 137, or pursuant to 49 U.S.C. § 44807), the representation in this Section
4.09(b) is made solely with respect to those Approvals specifically listed on Section 4.09(b) of the Company Disclosure Letter
(the “Aviation Authorizations Schedule”).
4.10
Government Contracts.
(a)
Section 4.10 of the Company Disclosure Letter sets forth a list of each Government Contract in existence as of the date hereof
that involves aggregate payments to the Company that are reasonably expected to be in excess of $500,000 (each, a “Material
Current Government Contract”). Each Material Current Government Contract was legally awarded to the Company. Except as
would not reasonably be expected to be material to the Company, and except for any Material Current Government Contract that is terminated
or expires following the date hereof in accordance with its terms, all Material Current Government Contracts are: (i) a legal, valid
binding obligation of the Company; and (ii) in full force and effect and enforceable against the Company, as applicable, in accordance
with its terms, in each case subject to the Enforceability Exceptions.
(b)
To the Company’s knowledge, for the period beginning three (3) years prior to and ending on the Closing Date, the Company has complied
in material respects with each Government Contract and applicable statutory and regulatory requirements (including the FAR and applicable
agency FAR supplements) with respect to each Government Contract.
(c)
For the period beginning three (3) years prior to and ending on the Closing Date, neither the U.S. Government nor any of the U.S. Government’s
prime contractors has notified the Company, either in writing or, to the Company’s Knowledge, orally that the Company has breached
a contract requirement, or violated any regulation, statute, certification, or representation with respect to each Government Contract.
(d)
For the period beginning three (3) years prior to and ending on the Closing Date, no show cause notices or cure notices have been issued
against the Company with respect to any Government Contract.
(e)
Neither the Company nor any “Principal” (as defined in FAR 52.209-5):
(i)
is presently debarred, suspended, proposed for debarment, or declared ineligible for the award of a government contract or subcontract;
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(ii)
has, within the period beginning three (3) years prior to and ending on the Closing Date, been convicted of or had a civil judgment rendered
against them for commission of fraud or a criminal offense in connection with obtaining, attempting to obtain, or performing a public
(federal, state, or local) contract or subcontract, or violation of federal or state antitrust statutes relating to the submission of
offers, or commission of embezzlement, theft, forgery, bribery, falsification or destruction of records, making false statements, tax
evasion, or receiving stolen property; or
(iii)
to the Knowledge of the Company, is presently indicted for, or otherwise criminally or civilly charged with, or currently under investigation
by a governmental entity for, commission of any of the above-listed offenses.
(f)
There are no outstanding claims against the Company either by the U.S. Government or by any prime contractor or subcontractor arising
under a Government Contract.
(g)
The Company has no pending claims (including claims under the Contract Disputes Act of 1978) against the U.S. Government or against any
prime contractor arising under any Government Contract, except for routine demands for payment.
(h)
For the period beginning three (3) years prior to and ending on the Closing Date, the Company has not made a mandatory disclosure to
a Governmental Authority, an Inspector General of an agency, department or branch of the U.S. Government, or a Contracting Officer (as
defined in FAR 2.101) in connection with the Company’s performance of any Government Contract under FAR Subpart 3.1003 or FAR 52.203-13,
and, to the Knowledge of the Company, no facts exist that would reasonably require such a disclosure.
(i)
Section 4.10(i) of the Company Disclosure Letter sets forth a list of each pending Government Bid that are set aside for companies
with Preferred Bidder Status or otherwise requiring the Company to have Preferred Bidder Status as a condition of eligibility for award
of a contract.
4.11
Company Permits. The Company (and its employees who are legally required to be licensed by a Governmental Authority in
order to perform his or her duties with respect to his or her employment with the Company), holds all material Permits required to own,
lease and operate its assets and properties as presently owned, leased or operated (collectively, the “Company Permits”).
The Company has made available to the Purchaser true, correct and complete copies of all the Company Permits, all of which are listed
on Section 4.11 of the Company Disclosure Letter. To the Knowledge of the Company, each Company Permit is in full force and effect
and will upon its termination or expiration will be timely renewed or reissued upon terms and conditions substantially similar to its
existing terms and conditions and there are no Legal Proceedings pending or, to the Knowledge of the Company, threatened, that seek the
revocation, cancellation, limitation, suspension, restriction, adverse modification or termination of any Company Permit. The Company
has at all times operated in material compliance with all Company Permits applicable to the Company. For the avoidance of doubt, aviation-specific
permits, certificates and authorizations are addressed exclusively in Section 4.26 (Aviation Regulatory Compliance) and the Aviation
Authorizations Schedule, and this Section 4.11 shall not be construed to require a representation with respect to any aviation-specific
permit, certificate or authorization not listed on such schedule.
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4.12
Litigation. Except as described on Section 4.12 of the Company Disclosure Letter, there is no (a) Legal Proceeding
of any nature currently pending or, to the Knowledge of the Company, threatened, against the Company or any of its properties or assets,
or, to the Knowledge of the Company, any of the directors or officers of the Company with regard to their actions as such, in which the
reasonably expected damages are in excess of $1,000,000 or which otherwise is reasonably expected to result in an Order for specific
performance, an injunction or other equitable relief; (b) to the Knowledge of the Company, there are no pending or threatened, audits,
examinations or investigations by any Governmental Authority against the Company that, individually or in the aggregate, would reasonably
be expected to be material to the Company; (c) pending or threatened in writing Legal Proceedings by the Company against any third party
that, individually or in the aggregate, would reasonably be expected to be material to the Company; (d) settlements or similar agreements
that impose any material ongoing obligations or restrictions on the Company that, individually or in the aggregate, would reasonably
be expected to be material to the Company; and (e) Orders imposed or, to the Knowledge of the Company, threatened to be imposed upon
the Company or any of its properties or assets, or, to the Company’s Knowledge, any of the directors or officers of the Company
with regard to their actions as such that, individually or in the aggregate, would reasonably be expected to be material to the Company.
4.13
Material Contracts.
(a)
Section 4.13(a) of the Company Disclosure Letter sets forth a true, correct and complete list of all Contracts described in clauses
(i) through (xx) below, to which, as of the date of this Agreement, the Company is a party or by which the Company, or any of its properties
or assets are bound or affected, excluding any Company Benefit Plan (each Contract required to be set forth on Section 4.13(a)
of the Company Disclosure Letter, a “Company Material Contract”). True, correct, complete copies of the Company
Material Contracts, including amendments thereto, have been delivered or made available to the Purchaser. The Company Material Contracts
include:
(i)
each Contract that contains covenants that limit the ability of the Company (or purports to bind any Affiliate thereof) (A) to compete
in any line of business or with any Person or in any geographic area or to sell, or provide any service or product, including any non-competition
covenants, exclusivity restrictions, rights of first refusal or most-favored pricing clauses or (B) to purchase or acquire an interest
in any other Person;
(ii)
each joint venture Contract, profit-sharing agreement, partnership, limited liability company agreement with a third party or other similar
agreement or arrangement relating to the formation, creation, operation, management or control of any partnership or joint venture;
(iii)
each Contract that involves any exchange traded, over the counter or other swap, cap, floor, collar, futures contract, forward contract,
option or other derivative financial instrument or Contract, based on any commodity, security, instrument, asset, rate or index of any
kind or nature whatsoever, whether tangible or intangible, including currencies, interest rates, foreign currency and indices;
(iv)
each Contract that is reasonably anticipated to involve the acquisition or disposition, directly or indirectly (by merger or otherwise),
of assets with an aggregate value in excess of $500,000 (other than in the ordinary course of business consistent with past practice)
or shares or other equity interests of the Company or another Person;
(v)
each Contract for the acquisition of any Person or any business division thereof or the disposition of any material assets of the Company
(other than in the ordinary course of business), in each case, whether by merger, purchase or sale of stock or assets or otherwise (other
than Contracts for the purchase or sale of inventory or supplies entered into in the ordinary course of business) occurring in the last
three (3) years and/or relating to pending or future acquisitions or dispositions, in each case, involving aggregate payments in excess
of $500,000;
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(vi)
each obligation to make payments in excess of $1,000,000, contingent or otherwise, arising out of the prior acquisition of the business,
assets or stock of other Persons;
(vii)
each lease, rental agreement, installment and conditional sale agreement, or other Contract that, in each case, (A) provides for the
ownership of, leasing of, title to, use of, or any leasehold or other interest in any real or personal property, and (B) involves aggregate
annual payments in excess of $100,000 for agreements related to real property and $1,000,000 for agreements related to personal property;
(viii)
each Contract that by its terms, individually or with all related Contracts, that is reasonably anticipated to call for aggregate payments
or receipts by the Company under such Contract or Contracts of at least $1,000,000 per year or $5,000,000 in the aggregate;
(ix)
each Contract with any Top Customer or Top Supplier (other than purchase orders, invoices, statements of work and non-disclosure or similar
agreements entered into in the ordinary course of business consistent with past practice that do not contain any material terms relating
to the Contract underlying the applicable Top Customer or Top Supplier relationship);
(x)
each collective bargaining (or similar) agreement or Contract between the Company on one hand, and any labor union or other body representing
employees of the Company on the other hand;
(xi)
each Contract that is reasonably anticipated to obligate the Company to provide continuing indemnification or a guarantee of obligations
of a third party after the date hereof in excess of $1,000,000;
(xii)
each Contract that obligates the Company to make any capital commitment or expenditure in excess of $1,000,000 (including pursuant to
any joint venture);
(xiii)
each Contract that relates to a material settlement entered into within three (3) years prior to the date of this Agreement or under
which the Company has outstanding obligations (other than customary confidentiality obligations) in excess of $1,000,000;
(xiv)
any Contract that provides another Person (other than any manager, director or officer of the Company) with a power of attorney to act
on behalf of the Company or to act on behalf of any manager, director or officer of the Company with respect to the Company;
(xv)
each Contract (A) which contains any assignment or any covenant not to assert or enforce, any Intellectual Property material to the
business of the Company; (B) pursuant to which any Intellectual Property material to the business of the Company is or was developed
by, with or for the Company (other than invention assignment and confidentiality agreements with employees and contractors on standard
forms made available to Purchaser and without any material deviations or exceptions thereto (collectively, “Template Employee
and Contractor IP Assignment Agreements”)); or (C) pursuant to which the Company either (1) grants to a third Person (I)
a license, immunity, or other right in or to any Intellectual Property material to the business of the Company (other than where the
non-exclusive license of Intellectual Property is incidental and not the primary purpose of the Contract) or (II) an exclusive license,
immunity, or other right in or to any Owned Intellectual Property, or (2) is granted by a third Person a license, immunity, or other
right in or to any Intellectual Property or IT Assets material to the business of the Company, in the case of both (1) and (2) excluding
(unless they otherwise qualify as Company Material Contracts under a different subsection of this Section 4.13): (w) non-exclusive
licenses of Owned Intellectual Property granted to suppliers, customers or end users in the ordinary course of business; (x) licenses
of Open Source Software; (y) Off-the-Shelf Software; and (z) Template Employee and Contractor IP Assignment Agreements;
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(xvi)
each Contract involving transactions with an Affiliate of the Company (other than employment agreements, employee confidentiality and
invention assignment agreements, equity or incentive equity documents and Organizational Documents);
(xvii)
each Contract that is a settlement, conciliation, or similar agreement with any Governmental Authority or pursuant to which the Company
will have material outstanding obligations after the date hereof, and excluding any such agreements that are releases entered into with
former employees or independent contractors in the ordinary course of business;
(xviii)
each Contract with a strategic aviation customer, operating partner, or logistics customer (including preorder agreements, memoranda
of understanding, purchase orders, and service agreements) involving committed or contingent consideration in excess of $1,000,000 or
exclusive or preferential rights to the Company’s products or services (collectively, “Aviation Customer Agreements”);
(xix)
each Contract with a manufacturer, assembler or supplier that is exclusive or involves annual expenditures in excess of $500,000 and
relates to the design, manufacture, assembly, testing or certification of the Company’s aircraft or unmanned aircraft systems,
including without limitation any exclusive manufacturing arrangement; and
(xx)
each Contract that contains a Change of Control provision (whether requiring consent, notice, or triggering termination, acceleration,
or modification rights) that would be triggered by, or is applicable to, the consummation of the Transactions.
(b)
Except as disclosed in Section 4.13(b) of the Company Disclosure Letter, with respect to each Company Material Contract or for
any Company Material Contract that is terminated or expires following the date hereof in accordance with its terms: (i) such Company
Material Contract is valid and binding and enforceable in all respects against the Company and, to the Knowledge of the Company, each
other party thereto, and is in full force and effect (except, in each case, as such enforcement may be limited by the Enforceability
Exceptions); (ii) except as would not reasonably be expected to be material to the Company, the consummation of the transactions contemplated
by this Agreement will not affect the validity or enforceability of any Company Material Contract; (iii) the Company is not in breach
of or default under, in any material respect, and, to the Knowledge of the Company, no event has occurred that with the passage of time
or giving of notice or both would constitute a material breach of or default under by the Company, or permit termination or acceleration
by the other party thereto, under such Company Material Contract; (iv) to the Knowledge of the Company, no other party to such Company
Material Contract is in breach or default in any material respect, and, to the Knowledge of the Company no event has occurred that with
the passage of time or giving of notice or both would constitute such a material breach or default by such other party, or permit termination
or acceleration by the Company, under such Company Material Contract; (v) the Company has not received written or, to the Knowledge of
the Company, oral notice of an intention by any party to any such Company Material Contract that provides for a continuing obligation
by any party thereto to terminate such Company Material Contract or amend the terms thereof, other than modifications in the ordinary
course of business that do not adversely affect the Company in any material respect; and (vi) the Company has not waived any material
rights under any such Company Material Contract.
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4.14
Intellectual Property.
(a)
Section 4.14(a)(i) of the Company Disclosure Letter sets forth a true, accurate, and complete list of: (y) all U.S. and foreign
registered or issued Intellectual Property and applications owned or filed by the Company (“Company Registered IP”),
specifying as to each item, as applicable: (A) the nature of the item, including the title, (B) the owner of the item, (C) the jurisdictions
in which the item is issued or registered or in which an application for issuance or registration has been filed and (D) the issuance,
registration or application numbers and dates; and (z) all material unregistered Trademarks included in Owned Intellectual Property.
Each item of Company Registered IP is subsisting, and to the Knowledge of the Company, valid (or applied for) and enforceable (assuming
registration where required for enforcement). The Company owns, free and clear of all Liens (other than Permitted Liens or any Liens
set out on Section 4.14(a)(ii) of the Company Disclosure Letter) all right, title, and interest in and to all Owned Intellectual
Property and to the Knowledge of the Company, has valid and enforceable rights to use, sell, license, transfer or assign, as used, sold,
licensed, transferred, or assigned in its business, all other Intellectual Property and IT Assets currently used, sold, licensed, transferred,
assigned, or held for use by the Company and none of the foregoing will be adversely impacted by (nor will require any consent, notification,
waiver, or payment or grant of additional amounts or consideration as a result of) the execution, delivery, or performance of any of
this Agreement or the consummation of the Transactions. No item of Company Registered IP that consists of a pending Patent application
fails to identify all pertinent inventors, and for each Patent and Patent application in the Company Registered IP, the Company has obtained
present assignments of inventions from each inventor. Except as set forth on Section 4.14(a)(iii) of the Company Disclosure Letter,
all Company Registered IP and other Owned Intellectual Property are owned exclusively by the Company without obligation to pay royalties,
licensing fees or other fees, or otherwise account to any third party with respect to such Company Registered IP and other Owned Intellectual
Property, and the Company has recorded assignments of all Company Registered IP.
(b)
To the Knowledge of the Company, the Company has a valid and enforceable written license or other valid and enforceable right to use
all other Company IP, including Intellectual Property that is the subject of the inbound Company IP Licenses applicable to the Company.
The inbound Company IP Licenses include all of the licenses, sublicenses and other agreements or permissions currently used by Company
or otherwise material to operate the business of Company as presently conducted. The Company has performed all obligations imposed on
it in the Company IP Licenses, has made all payments required to date, and the Company is not, nor, to the Knowledge of the Company,
is any other party thereto, in breach or default thereunder, nor has any event occurred that with notice or lapse of time or both would
constitute a default thereunder. The continued use by the Company of the Intellectual Property that is the subject of any Company IP
License in the same manner that it is currently being used is not restricted by any applicable license of the Company. The Company is
not party to any Contract that requires the Company to assign to any Person any or all of its rights in any Intellectual Property developed
by the Company under such Contract.
(c)
No Legal Proceeding has been made in the last six (6) years or is pending or, to the Company’s Knowledge, threatened against the
Company that challenges the validity, enforceability, ownership, or right to use, sell, license or sublicense, or that otherwise relates
to, any Owned Intellectual Property, nor, to the Knowledge of the Company, is there any reasonable basis for any such Legal Proceeding.
The Company has not received any written or, to the Knowledge of the Company, oral notice or claim asserting that any infringement, misappropriation,
violation, dilution or unauthorized use of the Intellectual Property of any other Person is or may be occurring or has or may have occurred,
as a consequence of the business activities of the Company, nor to the Knowledge of the Company, is there a reasonable basis therefor.
There are no Orders to which the Company is a party or is otherwise bound that (i) restrict the rights of the Company to use, transfer,
license or enforce any Intellectual Property owned by the Company, (ii) restrict the conduct of the business of the Company in order
to accommodate a third Person’s Intellectual Property, or (iii) other than the outbound Company IP Licenses, grant any third Person
any right with respect to any Intellectual Property owned by the Company. The Company is not, nor is the Company’s ownership, use
or license of any Owned Intellectual Property, nor the Company’s operation of its business (including its products and services)
currently infringing, or has, in the past, infringed, misappropriated or violated any Intellectual Property of any other Person. To the
Company’s Knowledge, no third party is currently, or in the past six (6) years has infringed upon, misappropriated or otherwise
violated any Owned Intellectual Property.
23
(d)
No current or former officers, employees, independent contractors, or other third parties employed or engaged by the Company has any
ownership interest in any material Owned Intellectual Property and no Person has claimed or asserted in writing any ownership interest
or other rights in or to any Owned Intellectual Property. Except where failure to comply has not been and would not be, individually
or in the aggregate, material, there has been no violation of the Company’s policies or practices related to protection of Company
IP or any confidentiality or nondisclosure Contract relating to the Owned Intellectual Property. To the Company’s Knowledge, none
of the employees of the Company is obligated under any Contract, or subject to any Order, that would materially interfere with the use
of such employee’s reasonable efforts to promote the interests of the Company, or that would conflict with the business of the
Company as presently conducted. The Company has taken commercially reasonable efforts and security measures in order to maintain, preserve
and protect all material Owned Intellectual Property, including to protect the secrecy, confidentiality and value of the material Company
IP. All Persons who have participated in or contributed to the creation or development of any material Owned Intellectual Property have
executed written agreements pursuant to which all of such Person’s right, title and interest in and to any such Owned Intellectual
Property has been irrevocably assigned (by a present tense assignment) to the Company (or all such right, title, and interest vested
in one or more of the Company by operation of Law, including as “work made for hire”).
(e)
The Company is in all material respects in compliance with all licenses governing any Open Source Software that is incorporated into,
used, intermingled, or bundled with any material Company Software. No Open Source Software is or has been included, incorporated or embedded
in, linked to, combined, made available or distributed with, or used in the development, maintenance, operation, delivery or provision
of any Company Software in a manner that requires the Company to: (i) disclose, contribute, distribute, license or otherwise make available
to any Person (including the open source community) any source code to such Company Software; (ii) license any such Company Software
or other material Owned Intellectual Property for making modifications or derivative works; (iii) disclose, contribute, distribute, license
or otherwise make available to any Person any such Company Software or other material Owned Intellectual Property for no or nominal charge;
or (iv) grant a license to, or refrain from asserting or enforcing any of, its Patents (“Copyleft Terms”).
No Person other than the Company possesses, or has an actual or contingent right to access or possess, a copy in any form of any source
code for any Company Software and all such source code is in the Company’s sole possession and has been maintained as strictly
confidential.
(f)
No government funding, resources or assistance, nor any facilities of a university, college, other educational institution, or similar
institution, or research center or private or commercial third parties in their respective research and development activities were used
by the Company in the development of any Owned Intellectual Property. No Governmental Authority has any (i) ownership interest or exclusive
license in or to any Owned Intellectual Property, (ii) “unlimited rights” (as defined in 48 C.F.R. § 52.227-14 and in
48 C.F.R. § 252.227-7013(a)) in or to any of the Company Software, (iii) “Government purpose rights” (as defined in
48 C.F.R. § 252.227-7013(a)), or (iv) “march in rights” (pursuant to 35 U.S.C. § 203) in or to any Patents constituting
material Owned Intellectual Property. The Company is not a member of or party to, or has participated in any patent pool, industry standards
body, trade association or other organization pursuant to the rules of which the Company is obligated to license or offer to license
any existing or future Owned Intellectual Property to any Person.
24
(g)
The Company is and has been in compliance in all material respects with all applicable Laws, regulations, internal and external Company
policies and Contracts relating to data privacy, data protection and cybersecurity in all relevant jurisdictions. During the period beginning
three (3) years prior to and ending on the Closing Date, to the Knowledge of the Company, (i) no Person has obtained unauthorized access
to any Personal Information or Protected Information, IT Assets or Software in the possession of the Company or in their custody, control,
or otherwise held or processed on their behalf nor has there been any loss, damage, disclosure, use, breach of security, or other compromise
of the security, confidentiality or integrity of such IT Assets, Software, information, or data. Except as set forth in Section 4.14(g)
of the Disclosure Letter, the Company has not experienced any Security Breach. No material written or oral complaint, or notice of any
claims, or investigations, relating to an improper use or disclosure of, or a breach in the security of, any Personal Information or
Protected Information, or relating to any information security-related incident has been received by the Company nor has the Company
notified in writing, or been required by applicable Laws or Contract to notify in writing, any person or entity of any Personal Information
or information security-related incident.
(h)
The Company has implemented, and has used commercially reasonable efforts to require that its third-party vendors implement, adequate
policies and commercially reasonable security (a) regarding the collection, use, disclosure, retention, processing, transfer, confidentiality,
integrity and availability of Personal Information and Protected Information, and (b) regarding the integrity and availability of the
IT Assets the Company owns, operates or outsources. To the Knowledge of the Company, the Company’s IT Assets, do not contain any
“time bombs,” “Trojan horses,” “back doors,” “trap doors,” worms, viruses, spyware, keylogger
software or other vulnerability, faults or malicious code or damaging devices designed or reasonably expected to adversely impact the
functionality of or permit unauthorized access or to disable or otherwise harm any information technology or software applications.
(i)
The consummation of any of the Transactions will not result in (i) any material violation of any data privacy or cybersecurity laws;
or (ii) the material breach, material modification, cancellation, termination, suspension of, or acceleration of any payments with respect
to, or release of source code because of (a) any Contract providing for the license or other use of material Intellectual Property owned
by the Company, or (b) any Company IP License.
4.15
Taxes and Returns. Except in each case as set forth on Section 4.15 of the Company Disclosure Letter:
(a)
The Company (i) has or will have timely filed, or caused to be timely filed, all income and other material Tax Returns required to be
filed by it (taking into account all valid extensions of time to file), and all such Tax Returns are true, accurate, correct and complete
in all material respects, and (ii) has timely paid, collected, withheld or remitted, or caused to be timely paid, collected, withheld
or remitted, all income and other material Taxes required to be paid, collected, withheld or remitted by it, whether or not such Taxes
are shown as due and payable on any Tax Return. The Company has complied in all material respects with all applicable Laws relating to
Tax.
(b)
There is no Legal Proceeding currently pending or, to the Knowledge of the Company, threatened against the Company by a Governmental
Authority in a jurisdiction where the Company does not file any Tax Returns or a particular type of Tax Return or pays any Tax or a particular
type of Tax that it is or may be subject to such Tax or required to file such Tax Return in that jurisdiction.
(c)
There is no written notification of any claim, assessment, audit, examination, investigation or other Legal Proceeding that is pending,
or to the Knowledge of the Company, threatened against the Company in respect of any material amount of Taxes, and the Company has not
been notified in writing of any proposed Tax claim, deficiency or assessment against it in respect of a material amount of Taxes. The
Company is not currently contesting any material Tax liability before any Governmental Authority.
25
(d)
There are no Liens with respect to any Taxes upon the Company’s assets, other than Permitted Liens.
(e)
The Company has complied in all material respects with its obligations under applicable Law to (i) timely and properly collect or withhold
all Taxes required to be collected or withheld by it, and (ii) timely remit such Taxes to the appropriate Governmental Authorities.
(f)
The Company has not requested or consented to any waivers or extensions of any applicable statute of limitations for the collection or
assessment of any Taxes, which waiver or extension (or request thereof) is outstanding or pending, other than as the result of automatic
extensions of time to file Tax Returns requested in the ordinary course of business.
(g)
The Company will not be required to include any material item of income in, or exclude any material item of deduction from, taxable income
for any taxable period (or portion thereof) beginning after the Closing Date, as a result of: (i) an installment sale or open transaction
disposition that occurred prior to the Closing; (ii) any change in method of accounting made prior to the Closing, including by reason
of the application of Section 481 of the Code (or any analogous provision of state, local or foreign Law) or the use of an improper method
of accounting prior to the Closing; (iii) any prepaid amounts received or deferred revenue realized or received prior to the Closing
outside the ordinary course of business; (iv) any intercompany transaction described in Treasury Regulations under Section 1502 of the
Code (or any corresponding or similar provision of state, local or foreign Law) entered into prior to the Closing; or (v) any “closing
agreement” pursuant to Section 7121 of the Code or any other similar written agreement with a Governmental Authority relating to
Taxes entered into prior to the Closing.
(h)
The Company has not participated in or been a party to, or sold, distributed or otherwise promoted, any “reportable transaction,”
as defined in Treasury Regulations Section 1.6011-4 (or any similar or corresponding provision of state, local or foreign Law).
(i)
The Company has not been a member of an affiliated, combined, consolidated, unitary or other group for Tax purposes. The Company has
no Liability or potential Liability for the Taxes of another Person (i) pursuant to Treasury Regulations Section 1.1502-6 (or any similar
or corresponding provision of U.S. state or local Tax Law) or under any other applicable Tax Law, (ii) as a transferee or successor,
or (iii) by Contract, indemnity or otherwise (in each case, excluding customary commercial Contracts entered into in the ordinary course
of business the primary purpose of which is not the sharing of Taxes). The Company is not a party to or bound by any Tax indemnity agreement,
Tax sharing agreement or Tax allocation agreement or similar agreement, arrangement or practice (excluding customary commercial Contracts
entered into in the ordinary course of business the primary purpose of which is not the sharing of Taxes) with respect to Taxes.
(j)
The Company has not requested, nor is it the subject of or bound by any private letter ruling, technical advice memorandum, closing agreement
or similar ruling, memorandum or written agreement with any Governmental Authority with respect to any Taxes, nor is any such request
pending or outstanding.
(k)
The Company is, and has at all times since its inception been, classified as a C corporation for U.S. federal state and local income
tax purposes.
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(l)
The Company has never had a permanent establishment, office, branch, fixed place of business or other taxable presence in any country
other than the country of its organization.
(m)
The Company has not been a party to any transaction that was purported or intended to be treated as a distribution of stock qualifying,
in whole or in part, for tax-free treatment under Section 355 of the Code (or any corresponding or similar provision of U.S. state or
local Tax Law) for the period beginning three (3) years prior to and ending on the Closing Date.
(n)
The Company has not knowingly taken any action, nor is it aware of any fact or circumstance, that would reasonably be expected to prevent
the relevant portions of the Transactions from qualifying for their respective Intended Tax Treatments.
4.16
Real Property.
(a)
Section 4.16(a) of the Company Disclosure Letter sets forth a true, correct, and complete listing of all real property owned by
the Company (the “Company Owned Properties”), including the street address and owner thereof. The Company has
made available to the Purchaser true, correct, and complete copies of the deeds and other instruments in its possession by which the
Company acquired such Company Owned Properties, together with any title insurance policies, the most recent title reports and surveys
with respect to such Company Owned Property to the extent such items are in its possession. The Company has good and indefeasible fee
simple title to each such Company Owned Property free and clear of all Liens (other than Permitted Liens). Other than the Company Owned
Properties, the Company does not own any real property. There are no parties in possession, as tenants, licensees or, to the Knowledge
of the Company, otherwise, or parties having any option, right of first offer or first negotiation or right of first refusal or other
similar rights granted to third parties to purchase or lease the Company Owned Properties or any portion thereof or interest therein.
There is no condemnation or eminent domain proceedings pending or, to the Knowledge of the Company, threatened with respect to any of
the Company Owned Properties or any portion thereof.
(b)
Section 4.16(b) of the Company Disclosure Letter contains a true, correct and complete list of the addresses for all premises
currently leased or subleased or otherwise used or occupied (but not owned) by the Company for the operation of the business of the Company
(the “Company Leased Real Properties”), and of all current leases, lease guarantees, agreements and documents
related thereto, including all amendments, terminations and modifications thereof, waivers thereto or guarantees thereof (collectively,
the “Company Real Property Leases”), including the parties to such Company Real Property Leases. The Company
has provided to the Purchaser a true and complete copy of each of the Company Real Property Leases. The Company has a good and valid
leasehold or subleasehold interest in each relevant parcel under the Company Real Property Leases, and each Company Real Property Lease
is valid and binding and enforceable in all respects against the Company and, to the Knowledge of the Company, against each other party
thereto, and is in full force and effect (except, in each case, as such enforcement may be limited by the Enforceability Exceptions).
With respect to each Company Real Property Lease, (i) the Company is not in breach of or default under any Company Real Property Lease,
(ii) no event has occurred and no circumstance exists which, if not remedied, and whether with or without notice or the passage of time
or both, would result in such a breach or default by the Company and, (iii) to the Knowledge of the Company, no other party to such Company
Real Property Lease is in breach or default, in any respect, and no event has occurred that with the passage of time or giving of notice
or both would constitute such a breach or default by such other party, or permit termination or acceleration by the Company, under such
Company Real Property Lease. The Company has not collaterally assigned or granted any security interest in any Company Real Property
Lease or any interest therein, nor has the Company leased, licensed or otherwise granted use or occupancy rights with respect to any
Company Leased Real Property or any portion thereof to any third party. No party to any Company Real Property Lease has exercised any
termination rights with respect thereto. To the Knowledge of the Company there is no condemnation or eminent domain proceedings pending
or threatened with respect to any of the Company Leased Real Properties or any portion thereof.
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4.17
Personal Property. Each item of Personal Property which is currently owned, used or leased by the Company with a book value
or fair market value of greater than $500,000 is set forth on Section 4.17 of the Company Disclosure Letter, along with, to the
extent applicable, a list of lease agreements, lease guarantees, security agreements and other agreements related thereto, including
all amendments, terminations and modifications thereof or waivers thereto (“Company Personal Property Leases”).
Except as set forth in Section 4.17 of the Company Disclosure Letter, all such items of Personal Property are in operating condition
(reasonable wear and tear excepted), as are reasonably suitable for their intended use in the business of the Company. The Company has
provided to the Purchaser a true and complete copy of each of the Company Personal Property Leases. To the Knowledge of the Company,
the Company Personal Property Leases are valid, binding and enforceable in accordance with their terms and are in full force and effect.
To the Knowledge of the Company, no event has occurred which (whether with or without notice, lapse of time or both or the happening
or occurrence of any other event) would constitute a default on the part of the Company or any other party under any of the Company Personal
Property Leases, and the Company has not received notice of any such condition.
4.18
Title to Assets. The Company has good and marketable title to, or a valid leasehold interest in or right to use, or in
the case of Company Owned Property good and indefeasible title to, its respective material tangible and intangible assets that are necessary
to conduct the business of the Company as presently conducted, free and clear of all Liens other than (a) Permitted Liens, (b) the rights
of lessors under material leasehold interests and (c) Liens set forth on Section 4.18(a) of the Company Disclosure Letter. Except
as set forth on Section 4.18(b) of the Company Disclosure Letter, the material assets (including Intellectual Property rights
and contractual rights) of the Company constitute all of the assets, rights and properties that are necessary, in all material respects,
for the operation of the businesses of the Company in all material respects as they are now conducted. The material tangible assets or
personal property of the Company have been maintained in all material respects in accordance with generally accepted industry practice,
are in good working order and condition, except for ordinary wear and tear and as would not, individually or in the aggregate, reasonably
be expected to be material to the Company.
4.19
Employee Matters.
(a)
The Company is not and has never been a party to any collective bargaining agreement or other Contract covering any group of employees
with any labor organization or other representative of any of the employees of the Company, and to the Knowledge of the Company, there
are not, and within the period beginning three (3) years prior to and ending on the Closing Date, there have not been, any activities
or proceedings of any labor union to organize or represent such employees. During the period beginning three (3) years prior to and ending
on the Closing Date, there has not occurred or, to the Knowledge of the Company, been threatened any strike, slow-down, picketing, work-stoppage,
or other similar labor activity with respect to any such employees. Except as set forth on Section 4.19(a) of the Company Disclosure
Letter, no current officer or other key employee of the Company, as of the date of this Agreement, has provided the Company with written
notice of his or her intention to terminate his or her employment within the one (1) year period following the Closing.
(b)
Except as set forth on Section 4.19(b) of the Company Disclosure Letter, the Company is, and, within the period beginning three
(3) years prior to and ending on the Closing Date, has been, in material compliance with all applicable Laws respecting employment and
employment practices, terms and conditions of employment, health and safety and wages and hours, and other Laws relating to discrimination,
disability, labor relations, hours of work, payment of wages and overtime wages, pay equity, immigration, workers compensation, working
conditions, employee scheduling, family and medical leave, and employee terminations, except for failures to comply which, individually
or in the aggregate, have not been and would not reasonably be expected to be, material to the Company. The Company has not received
written or, to the Knowledge of the Company, oral notice that there is any pending Legal Proceeding involving unfair labor practices
against the Company. There are no material Legal Proceedings pending or, to the Knowledge of the Company, threatened against the Company
brought by or on behalf of any applicant for employment, any current or former employee, any Person alleging to be a current or former
employee, or any Governmental Authority, relating to any such Law or regulation, or alleging breach of any express or implied contract
of employment, wrongful termination of employment, or alleging any other discriminatory, wrongful or tortious conduct in connection with
the employment relationship.
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(c)
Except as set forth on Section 4.19(c) of the Company Disclosure Letter, the Company employees are employed “at will”,
and the Company has no obligation or Liability (whether or not contingent) with respect to severance payments to any such employees under
the terms of any written or, to the Knowledge of the Company, oral agreement, or commitment or any applicable Law, custom, trade or practice.
(d)
For the period beginning three (3) years prior to and ending on the Closing Date, the Company has not received written (i) notice of
any unfair labor practice charge or material complaint pending or, to the Knowledge of the Company, threatened before the National Labor
Relations Board against them, (ii) notice of any material grievances or arbitrations arising out of any collective bargaining agreement
to which the Company is a party, or (iii) notice of the intent of any Governmental Authority responsible for the enforcement of labor,
employment, wages and hours of work, child labor, or immigration to conduct an investigation with respect to or relating to them or notice
that such investigation is in progress.
(e)
To the Knowledge of the Company, no present or former employee at level of vice president or above of the Company is in material violation
of (i) any restrictive covenant or nondisclosure obligation to the Company or (ii) any restrictive covenant or nondisclosure obligation
to a former employer of any such individual relating to (A) the right of any such individual to work for or provide services to the Company
or (B) the knowledge or use of trade secrets.
(f)
For the period beginning three (3) years prior to and ending on the Closing Date, the Company has not engaged in layoffs, furloughs or
employment terminations sufficient to trigger application of the Worker Adjustment and Retraining Notification Act or any similar state
or local law (collectively, the “WARN Act”). The Company has no outstanding liabilities or obligations arising
under or relating to the WARN Act.
(g)
For the period beginning three (3) years prior to and ending on the Closing Date, (i) no allegations of sexual harassment or sexual misconduct
have been made in writing, or, to the Knowledge of the Company, threatened to be made against or involving any current or former officer,
director or other employee at the level of Vice President or above by any current or former officer, employee or individual service provider
of the Company, in each case, in their capacities as officers, employees, or directors of the Company, and (ii) the Company has not entered
into any settlement agreements resolving, in whole or in part, allegations of sexual harassment or sexual misconduct by any current or
former officer, director or other employee at the level of Vice President or above.
4.20
Benefit Plans.
(a)
Set forth on Section 4.20(a) of the Company Disclosure Letter is a true and complete list of each material Company Benefit Plan.
With respect to each Company Benefit Plan, all contributions that are due have been made or, to the extent not yet due, are properly
accrued in accordance with GAAP on the Company Financials, in all material respects. The Company is not required to provide employee
benefits pursuant to a collective bargaining agreement or other Contract covering any group of employees, labor organization or other
representative of any of the employees.
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(b)
Each Company Benefit Plan is and has been operated, administered, maintained, and funded at all times in compliance with its terms and
all applicable Laws in each case in all material respects, including ERISA and the Code. Each Company Benefit Plan which is intended
to be “qualified” within the meaning of Section 401(a) of the Code (i) has received a favorable determination letter from
the IRS to be so qualified (or is based on a prototype plan which has received a favorable opinion letter upon which the Company is entitled
to rely) or (ii) the Company has requested an initial favorable IRS determination of qualification and/or exemption within the period
permitted by applicable Law. To the Knowledge of the Company, no event has occurred or circumstance exists which could reasonably be
expected to adversely affect the qualified status of such Company Benefit Plans or the exempt status of such trusts.
(c)
With respect to each Company Benefit Plan required to be listed on Schedule 4.20(a), the Company has provided to Purchaser accurate
and complete copies, if applicable, of: (i) all Company Benefit Plan documents, service agreements and related trust agreements or annuity
Contracts (including any amendments, modifications or supplements thereto); (ii) the most recent summary plan descriptions and material
modifications thereto; (iii) the most recent Form 5500s, if applicable, and annual report, including all schedules thereto; (iv) the
most recent annual and periodic accounting of plan assets; (v) the most recent nondiscrimination testing reports; (vi) the most recent
determination letter (or opinion letter) received from the IRS, if any; (vii) the most recent actuarial valuation; and (viii) all material
communications with any Governmental Authority for the period beginning three (3) years prior to and ending on the Closing Date.
(d)
With respect to each Company Benefit Plan: (i) no Legal Proceeding is pending, or to the Knowledge of the Company, threatened (other
than routine claims for benefits arising in the ordinary course of administration and administrative appeals of denied claims); and (ii)
no prohibited transaction, as defined in Section 406 of ERISA or Section 4975 of the Code, has occurred, excluding transactions effected
pursuant to a statutory or administration exemption.
(e)
Neither the Company nor any ERISA Affiliate currently maintains, or within the preceding six (6) years has maintained or contributed
to, a Company Benefit Plan which is a “defined benefit plan” (as defined in Section 414(j) of the Code), a “multiemployer
plan” (as defined in Section 3(37) of ERISA) or a “multiple employer plan” (as described in Section 413(c) of the Code)
or is otherwise subject to Title IV of ERISA or Section 412 of the Code, and the Company has not incurred any Liability, could not otherwise
have any Liability, contingent or otherwise, under Title IV of ERISA and no condition presently exists that is expected to cause such
Liability to be incurred. The Company does not and has not ever maintained, and is not and has never been required to contribute to or
otherwise participate in, (i) a multiple employer welfare arrangement or voluntary employees’ beneficiary association as defined
in Section 501(c)(9) of the Code or (ii) a “funded welfare plan” within the meaning of Section 419 of the Code.
(f)
Except as set forth on Section 4.20(f) of the Company Disclosure Letter, the consummation of the Transactions will not, either
alone or in combination with another event, (i) entitle any current or former employee, officer or other service provider of the Company
to any severance pay or increase in severance pay or any other compensation payable by the Company, (ii) accelerate the time of payment,
funding or vesting, or increase the amount of compensation due to any such employee, officer or other individual service provider by
the Company, (iii) directly or indirectly cause the Company to transfer or set aside any assets to fund any material benefits under any
Company Benefit Plan, (iv) otherwise give rise to any material liability under any Company Benefit Plan, or (v) limit or restrict the
right to merge, materially amend, terminate or transfer the assets of any Company Benefit Plan on or following the Closing. The consummation
of the transactions contemplated hereby will not, either alone or in combination with another event, result in any “excess parachute
payment” under Section 280G of the Code. No Company Benefit Plan provides for a Tax gross-up, make whole or similar payment, including
with respect to the Taxes imposed under Sections 409A or 4999 of the Code.
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(g)
Except as set forth on Section 4.20(g) of the Company Disclosure Letter or to the extent required by Section 4980B of the Code
or similar state Law, the Company does not provide health or welfare benefits to any former or retired employee and are not obligated
to provide such benefits to any active employee following such employee’s retirement or other termination of employment or service.
(h)
Each Company Benefit Plan can be terminated at any time without resulting in any material Liability to the Company, the Purchaser, Merger
Sub or their respective Affiliates for any additional contributions, penalties, premiums, fees, fines, excise taxes or any other charges
or liabilities, other than Liabilities with respect to participant accrued benefits through the effective date of such termination in
accordance with the terms of such plan and ordinary administration costs typically incurred in a termination event.
(i)
Except as would not, individually or in the aggregate, reasonably be expected to be material to the Company, each Company Benefit Plan
that is subject to Section 409A of the Code has been administered in compliance, and is in documentary compliance, in all respects with
the applicable provisions of Section 409A of the Code, the regulations thereunder and other official guidance issued thereunder.
4.21
Environmental Matters. Except as set forth in Section 4.21 of the Company Disclosure Letter:
(a)
The Company and its properties and facilities are and have, during the time that the Company has owned, operated or leased such property
or facility, been in compliance in all material respects with all applicable Environmental Laws, including obtaining, maintaining in
good standing, timely renewing and complying with all Permits required for their business and operations under any Environmental Laws
(“Environmental Permits”).
(b)
No Legal Proceeding is pending or, to the Knowledge of the Company, threatened against the Company or its assets or properties alleging
a material violation of, or material liability under, any Environmental Law or Environmental Permit, including with respect to the revocation
or termination of any Environmental Permits.
(c)
None of the Company or any of its current or , to the Knowledge of the Company, former properties, facilities or operations, are the
subject of any outstanding material Order or Contract with any Governmental Authority or other Person in respect of any (i) Environmental
Law, (ii) Remedial Legal Proceeding, or (iii) Release or threatened Release of a Hazardous Material, in each case, that would be reasonably
expected to result in a material Environmental Liability. The Company has not assumed, contractually or by operation of Law, any material
Environmental Liabilities.
(d)
The Company has not generated, manufactured, stored, treated, transported, Released, disposed of, arranged for or permitted the disposal
of, any Hazardous Material, in a manner that has given or would reasonably be expected to give rise to any material Environmental Liability.
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(e)
The Company has not received written notification of any investigation of the business, operations, or currently or formerly owned, operated,
or leased property of the Company that would be reasonably expected to lead to the imposition of any material Liens or material Environmental
Liabilities and no such investigations are pending or threatened in writing.
(f)
No Person has Released any Hazardous Material at, on, or under any facility currently or to the Knowledge of the Company, formerly owned
or operated by the Company or any third-party site, in each case in a manner that would be reasonably likely to give rise to a material
Environmental Liability of the Company.
(g)
The Company has provided to the Purchaser all material, final and non-privileged written environmental reports, audits, assessments,
liability analyses, memoranda and studies, including Phase I environmental site assessments, in the possession of, or conducted by, the
Company and concerning the environmental condition of any properties or operations of the Company, Environmental Liabilities or compliance
with Environmental Laws.
4.22
Transactions with Related Persons. Except as set forth on Section 4.22 of the Company Disclosure Letter, and except
for in the case of any employee, officer or director, of any employment Contract or Company Benefit Plans made in the ordinary course
of business consistent with past practice or except as set forth in the Company Financials, the Company is not a party to any transaction
or Contract with any (a) present or former executive officer or director of the Company, (b) beneficial owner (within the meaning of
Section 13(d) of the Exchange Act) of 5% or more of the capital stock or equity interests of the Company or (c) any Affiliate, “associate”
or any member of the “immediate family” (as such terms are respectively defined in Rules 12b-2 and 16a-1 of the Exchange
Act) of any of the foregoing. Except as set forth in the Company Financials or as set forth on Section 4.22 of the Company Disclosure
Letter: (x) to the Knowledge of the Company, no Related Person or any Affiliate of a Related Person has, directly or indirectly, a material
economic interest in any Contract with the Company (other than such Contracts that relate to any such Person’s ownership of the
Company Securities or other equity interests of the Company as set forth on Section 4.03(a) of the Company Disclosure Letter or
such Person’s employment or consulting arrangements with the Company), and (y) the assets of the Company do not include any receivable
or other obligation from a Related Person, and the liabilities of the Company do not include any payable or other obligation or commitment
to any Related Person.
4.23
Insurance.
(a)
Section 4.23(a) of the Company Disclosure Letter contains a list of, as of the date hereof, all material policies or binders of
property, fire and casualty, product liability, workers’ compensation, and other forms of insurance held by, or for the benefit
of, the business of the Company (by policy number, insurer, coverage period, coverage amount, annual premium and type of policy) (the
“Insurance Policies”). As of the date hereof, all premiums due and payable under all such insurance policies
have been timely paid and the Company are otherwise in material compliance with the terms of such insurance policies. Each such insurance
policy (i) is legal, valid, binding, enforceable and in full force and effect, subject, in each case to the Enforceability Exceptions
and (ii) will continue to be legal, valid, binding, enforceable, and in full force and effect immediately following the Closing. The
Company has no self-insurance or co-insurance programs. For the period beginning three (3) years prior to and ending on the Closing Date,
the Company has not received any written notice from, or on behalf of, any insurance carrier for the Insurance Policies of cancellation,
termination, refusal to issue an insurance policy or non-renewal of a policy.
(b)
Section 4.23(b) of the Company Disclosure Letter identifies each individual insurance claim in excess of $1,000,000 made by the
Company within the period beginning three (3) years prior to and ending on the Closing Date on an Insurance Policy. During the period
beginning three (3) years prior to and ending on the Closing Date, the Company has not made any material claim against an Insurance Policy
as to which the insurer has finally denied coverage in its entirety.
32
4.24
Top Customers and Suppliers.
(a)
Section 4.24(a) of the Company Disclosure Letter lists as of the date of this Agreement, by aggregate dollar value of the Company
business transaction volume with such counterparty, as applicable, for each of (i) the twelve (12) months ended on December 31, 2025
and (ii) the twelve (12) months ended on December 31, 2024, the three (3) largest customers of the Company (the “Top Customers”).
To the Knowledge of the Company, as of the date hereof, no such Top Customer has provided written notice to the Company (i) of its intention
to cancel or otherwise terminate, or materially reduce, its relationship with the Company, or (ii) that the Company is in material breach
of the terms of any Contract to which it is a party with such Top Customer.
(b)
Section 4.24(b) of the Company Disclosure Letter lists as of the date of this Agreement, all suppliers or manufacturers of goods
or services for each of (i) the twelve (12) months ended on December 31, 2025 and (ii) the twelve (12) months ended on December 31, 2024,
the suppliers of the Company that the Company pays at least $1,000,000 per annum for each such period (the “Top Suppliers”).
To the Knowledge of the Company as of the date hereof, no such Top Supplier has provided notice to the Company (i) of its intention to
cancel or otherwise terminate, or materially reduce, its relationship with the Company, or (ii) that the Company is in material breach
of the terms of any Company Material Contract with any such Top Supplier.
(c)
Except as set forth on Section 4.24(c) of the Company Disclosure Letter, none of the Top Customers or Top Suppliers has, as of
the date of this Agreement, notified the Company in writing that it is in a material dispute with the Company or its businesses.
4.25
Certain Business Practices.
(a)
The Company has not and, to the Knowledge of the Company, nor any of its officers or directors nor any other Persons acting on behalf
of the Company, has taken any action or refrained from taking any action that would cause the Company to be in violation of the Anti-Bribery
Laws. The Company has not and, to the Knowledge of the Company, nor has any other Person acting on behalf of the Company, taken any act
in furtherance of an offer, payment, promise to pay, authorization or ratification of the payment of any gift, money or anything of value
to a Government Official to obtain or retain business or to secure any improper advantage. To the Knowledge of the Company, none of its
officers, directors, or any of their respective Representatives acting on their behalf, for the period beginning five (5) year prior
to and ending on the Closing Date, has been subject to or conducted or initiated any internal investigation or made a voluntary, directed,
or involuntary disclosure to any Governmental Authority with respect to any alleged act or omission relating to any noncompliance with
any Anti-Bribery Laws. Neither the Company, nor any of its officers or directors, nor, to the Knowledge of the Company, any Representatives
acting on their behalf, has received any written notice, request, or citation from any Governmental Authority for any actual or potential
noncompliance with any Anti-Bribery Laws for the period beginning five (5) years prior to and ending on the Closing Date.
(b)
For the period beginning five (5) year prior to and ending on the Closing Date, the operations of the Company are and have been conducted
at all times in material compliance with applicable International Trade Laws and Sanctions Laws, and no Legal Proceeding between the
Company and any Governmental Authority with respect to any of the foregoing is, to the Knowledge of the Company pending or threatened
in writing.
33
(c)
The Company has not and, to the Knowledge of the Company, nor any of its directors or officers, or, to the Knowledge of the Company,
any other Representative acting on behalf of the Company is or has been for the period beginning five (5) year prior to and ending on
the Closing Date: (i) identified on any applicable sanctions-related list of designated or blocked persons (including without limitation
the Specially Designated Nationals and Blocked Persons List (“SDN List”) maintained by the U.S. Department
of the Treasury’s Office of Foreign Assets Control (“OFAC”)); (ii) located, organized, or resident in
any country, region or territory that is the subject of comprehensive territorial sanctions administered by the United States and any
other jurisdiction in which the Company operates (as of the date of this Agreement, Cuba, Iran, North Korea, and the Crimea, so-called
Donetsk People’s Republic, and so-called Luhansk People’s Republic regions of Ukraine) (each a “Sanctioned Jurisdiction”);
or (iii) owned, directly or indirectly, individually or in the aggregate, 50 percent or more or otherwise controlled by any of the foregoing.
(d)
For the period beginning five (5) years prior to and ending on the Closing Date, the Company has maintained in place and implemented
risk-based measures designed to promote compliance with Sanctions Laws.
(e)
For the period beginning five (5) years prior to and ending on the Closing Date, the Company has not directly or indirectly, been in
violation of Sanctions Laws used any funds, or loaned, contributed or otherwise made available such funds to any joint venture partner
or other Person in connection with any sales or operations in a Sanctioned Jurisdiction or for the purpose of financing the activities
(i) of any Person currently identified on any applicable sanctions-related list of designated or blocked persons maintained by OFAC,
or (ii) in any other manner that would constitute a violation of Sanctions Laws.
4.26
Aviation Regulatory Compliance.
(a)
Section 4.26(a) of the Company Disclosure Letter sets forth a true, correct, and complete list of all material aviation authorizations,
certificates, exemptions, permits, approvals, and pending applications issued by or filed with any Aviation Authority and held by or
on behalf of the Company, or otherwise required for the conduct of the Company’s business as presently conducted (collectively,
the “Company Aviation Authorizations”). The Company Aviation Authorizations include, to the extent applicable
and held as of the date hereof: type certificates and applications therefor, supplemental type certificates, production certificates,
airworthiness certificates (including special airworthiness certificates), experimental certificates, exemptions (including exemptions
issued pursuant to 49 U.S.C. § 44807), certificates of authorization, aircraft registration certificates, and any designations,
delegations or approvals under the FAA’s Organization Designation Authorization program or any successor program.
(b)
To the Knowledge of the Company, each Company Aviation Authorization is valid, in good standing and in full force and effect and is not
liable to revocation, suspension, cancellation or adverse modification for any currently existing reason. The Company has not received
written, or to the Knowledge of the Company, oral notice from any Aviation Authority of any pending or threatened revocation, suspension,
limitation, restriction or adverse modification of any Company Aviation Authorization.
(c)
The Company has filed FAA Form 8110-12 (Application for Type Certificate) with respect to the Chaparral C2 aircraft (the “Chaparral”),
which application was acknowledged by the FAA on December 5, 2022, and assigned Project Number TC20675LA-SC (the “Type Certification
Application”). As of the date hereof, no type certificate, supplemental type certificate, or production certificate has
been issued with respect to the Chaparral. The Company makes no representation as to the timing of issuance of a type certificate or
any interim milestone (including G-1 Issue Paper, accepted Project Specific Certification Plan, or established certification basis) except
as may be specifically set forth on Section 4.26(c) of the Company Disclosure Letter. As of the date hereof, the Company has submitted
a draft Project Specific Certification Plan (PSCP) to the FAA which is under negotiation but has not been formally accepted; the FAA
has not issued a G-1 Issue Paper, the certification basis has been proposed but not established, and no special conditions or equivalent
level of safety findings have been proposed by the FAA.
34
(d)
The Company is in material compliance with all conditions, limitations and requirements of each Company Aviation Authorization. The Company
is not a party to any consent order, compliance order, letter of correction, warning letter or similar enforcement correspondence with
any Aviation Authority that remains unresolved.
(e)
No Company Aviation Authorization requires any consent, approval, notification or other action by any Aviation Authority in connection
with the consummation of the Transactions. The Parties acknowledge that, because the Company will survive the Merger as the certificate
holder and registrant, no transfer of any Company Aviation Authorization is required. To the extent that any Company Aviation Authorization
is subject to a change-of-control notification requirement, such requirement is identified on Section 4.26(e) of the Company Disclosure
Letter, and the Company shall provide any such notifications in accordance with applicable requirements.
(f)
As of the date hereof, the Company operates solely as an aircraft designer and manufacturer (OEM) and does not hold or require any air
carrier certificate under 14 C.F.R. Part 119, any operating certificate under 14 C.F.R. Parts 121, 125, 135, or 137, or any unmanned
aircraft system operator certificate, and does not conduct commercial air transportation operations. The Company does not hold economic
authority from the Department of Transportation under 49 U.S.C. §§ 41101-41113. The Company’s flight operations to date
have been conducted under public aircraft authority (49 U.S.C. §40102) pursuant to COA 2025-WSA-17733, with the University of Alaska
Fairbanks (ACUASI) serving as the public agency proponent. Such operations do not constitute commercial air transportation and do not
require the Company to hold a Part 119 or Part 135 operating certificate.
(g)
The Company maintains books and records with respect to its aviation design and manufacturing activities, including type design data,
airworthiness data, flight test data, and conformity records, in material compliance with applicable Aviation Authority requirements.
The Company owns or has the right to use all type design data and related technical data necessary for the prosecution of the Type Certification
Application.
(h)
The Company is in material compliance with all applicable requirements of the Defense Federal Acquisition Regulation Supplement clause
252.204-7012 (Safeguarding Covered Defense Information and Cyber Incident Reporting) and National Institute of Standards and Technology
Special Publication 800-171 with respect to any controlled unclassified information (“CUI”) in its possession,
and has implemented and maintains adequate information security controls reasonably designed to protect such CUI. Section 4.26(i)
of the Company Disclosure Letter identifies each Material Current Government Contract that imposes CUI safeguarding obligations on the
Company.
(i)
The Company has provided to the Purchaser all material information and data pertaining to the Company Aviation Authorizations in its
possession, including copies of all certificates, exemptions, authorizations, applications, correspondence with Aviation Authorities
regarding the Type Certification Application, and any material enforcement or compliance correspondence.
(j)
The Purchaser acknowledges that type certification of the Chaparral is an ongoing regulatory process subject to FAA timelines and requirements
that are not within the sole control of the Company. No representation or warranty is made herein, and no closing condition shall be
construed to require, the issuance of a type certificate, production certificate, or any airworthiness certificate as a condition to
the Closing, and the absence of such issuance shall not constitute a Company Material Adverse Effect.
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4.27
Investment Company Act. The Company is not an “investment company” or a Person directly or indirectly “controlled”
by or acting on behalf of an “investment company”, or required to register as an “investment company”, in each
case within the meaning of the Investment Company Act of 1940, as amended.
4.28
Finders and Brokers. Except as reflected on Section 4.28 of the Company Disclosure Letter, no broker, finder, investment
banker or other Person is entitled to, nor will be entitled to, either directly or indirectly, any brokerage fee, finders’ fee
or other similar commission, for which the Company would be liable in connection with the Transactions based upon arrangements made by
the Company or any of their Affiliates.
4.29
Independent Investigation. The Company has conducted its own independent investigation, review and analysis of the business,
results of operations, prospects, condition (financial or otherwise) or assets of the Purchaser and Merger Sub, and acknowledge that
they have been provided adequate access to the personnel, properties, assets, premises, books and records, and other documents and data
of the Purchaser and Merger Sub for such purpose. The Company acknowledges and agrees that: (a) in making its decision to enter into
this Agreement and to consummate the transactions contemplated hereby, it has relied solely upon its own investigation and the express
representations and warranties of the Purchaser and Merger Sub set forth in Agreement (including the related portions of the Purchaser
Disclosure Letter) and in any certificate delivered to the Company pursuant hereto; and (b) none of the Purchaser, Merger Sub or any
of their respective Representatives have made any representation or warranty as to the Purchaser or Merger Sub or this Agreement, except
as expressly set forth in this Agreement (including the related portions of the Purchaser Disclosure Letter) or in any certificate delivered
to the Company pursuant hereto.
4.30
Information Supplied. None of the information supplied or to be supplied by, or on behalf of, the Company expressly for
inclusion or incorporation by reference in (i) any current report on Form 8-K, and any exhibits thereto or any other report, form, registration
or other filing made with any Governmental Authority or stock exchange with respect to the Transactions or in the Proxy Statement/Registration
Statement or (ii) any of the Signing Press Release, the Signing Filing, the Closing Press Release, the Closing Filing and any other press
releases of prospectus filed under Rule 425 of the Securities Act in connection to the Transactions contains any untrue statement of
a material fact or omit to state any material fact required to be stated therein or necessary in order to make the statements therein,
in light of the circumstances under which they are made, not misleading at (a) the time such information is filed with or furnished to
the SEC (provided, that if such information is revised by any subsequently filed amendment or supplement, this clause (a) shall solely
refer to the time of such subsequent revision); (b) the time the Proxy Statement/Registration Statement is declared effective by the
SEC; (c) the time the Proxy Statement/Registration Statement (or any amendment thereof or supplement thereto) is first mailed to the
Purchaser Shareholders; or (d) the time of the Purchaser Shareholders’ Meeting. Notwithstanding the foregoing, the Company makes
no representation, warranty or covenant with respect to any information supplied by or on behalf of the Purchaser, Merger Sub or their
respective Affiliates.
4.31
No Additional Representations or Warranties. Except as provided in this Article IV, neither the Company nor any
of its Affiliates, nor any of its directors, managers, officers, employees, equityholders, partners, members or representatives has made,
or is making, any representation or warranty whatsoever to Purchaser, Merger Sub or their respective Affiliates or any other Person and
no such party shall be liable in respect of the accuracy or completeness of any information provided to the Purchaser, Merger Sub or
their respective Affiliates or any other Person.
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ARTICLE
V
REPRESENTATIONS
AND WARRANTIES OF THE PURCHASER AND MERGER SUB
Except
as set forth in (i) any Purchaser SEC Reports filed or submitted on or prior to the date hereof, or (ii) the disclosure letter delivered
by the Purchaser to the Company (the “Purchaser Disclosure Letter”) on the date of this Agreement, the Purchaser
and Merger Sub represent and warrant to the Company, as of the date hereof and as of the Closing, as follows:
5.01
Organization and Standing.
(a)
The Purchaser is an exempted company duly incorporated, validly existing and in good standing under the Laws of the Cayman Islands. The
Purchaser has all requisite corporate power and authority to own, lease and operate its properties and to carry on its business as now
being conducted. The Purchaser is duly qualified or licensed and in good standing to do business in each jurisdiction in which the character
of the property owned, leased or operated by it or the nature of the business conducted by it makes such qualification or licensing necessary,
except where the failure to be so qualified or licensed or in good standing can be cured without material cost or expense. The Purchaser
has heretofore made available to the Company accurate and complete copies of its Organizational Documents as currently in effect. The
Purchaser is not in violation of any provision of its Organizational Documents in any material respect.
(b)
Merger Sub is a corporation duly incorporated, validly existing and in good standing under the Laws of Delaware. Merger Sub has heretofore
made available to the Company accurate and complete copies of its Organizational Documents as currently in effect. Merger Sub is not
in violation of any provision of its Organizational Documents in any material respect.
5.02
Authorization; Binding Agreement. Each of the Purchaser and Merger Sub has all requisite corporate power and authority
to execute and deliver this Agreement and each Ancillary Document to which it is a party, to perform its respective obligations hereunder
and thereunder and to consummate the Transactions, subject to obtaining the Purchaser Shareholder Approval. The execution and delivery
of this Agreement and each Ancillary Document to which it is a party and the consummation of the Transactions (a) have been duly and
validly authorized by the boards of directors (or equivalent governing body) of the Purchaser and Merger Sub, and (b) other than the
Purchaser Shareholder Approval, no other corporate proceedings on the part of the Purchaser or Merger Sub are necessary to authorize
the execution and delivery of this Agreement and each Ancillary Document to which it is a party or to consummate the Transactions. This
Agreement has been, and each Ancillary Document to which the Purchaser or Merger Sub are a party shall be when delivered, duly and validly
executed and delivered by the Purchaser or Merger Sub, as applicable, and, assuming the due authorization, execution and delivery of
this Agreement and such Ancillary Documents by the other parties hereto and thereto, constitutes, or when delivered shall constitute,
the valid and binding obligation of the Purchaser or Merger Sub, as applicable, enforceable against the Purchaser or Merger Sub, as applicable,
in accordance with its terms, except to the extent that enforceability thereof may be limited by applicable bankruptcy, insolvency, reorganization
and moratorium laws and other laws of general application affecting the enforcement of creditors’ rights generally or by any applicable
statute of limitation or by any valid defense of set-off or counterclaim, and the fact that equitable remedies or relief (including the
remedy of specific performance) are subject to the discretion of the court from which such relief may be sought (collectively, the “Enforceability
Exceptions”).
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5.03
Governmental Approvals. Assuming the truth and completeness of the representations and warranties of the Company contained
in this Agreement, no Consent of or with any Governmental Authority, on the part of the Purchaser or Merger Sub is required to be obtained
or made in connection with the execution, delivery or performance by the Purchaser or Merger Sub of this Agreement and each Ancillary
Document to which it is a party or the consummation by the Purchaser or Merger Sub of the Transactions, other than (a) pursuant to Antitrust
Laws, (b) such filings as contemplated by this Agreement, (c) any filings required with Nasdaq or the SEC with respect to the Transactions,
(d) applicable requirements, if any, of the Securities Act, the Exchange Act, and/ or any state “blue sky” securities Laws,
and the rules and regulations thereunder, and (e) where the failure to obtain or make such Consents or to make such filings or notifications,
would not reasonably be expected to have a Purchaser Material Adverse Effect.
5.04
Non-Contravention. Assuming the truth and completeness of the representations and warranties of the Company contained in
this Agreement, the execution and delivery by each of the Purchaser and Merger Sub of this Agreement and each Ancillary Document to which
it is a party, the consummation by the Purchaser and Merger Sub of the transactions contemplated hereby and thereby, and compliance by
the Purchaser and Merger Sub with any of the provisions hereof and thereof, do not and will not (a) conflict with or violate any provision
of their respective Organizational Documents, (b) subject to obtaining the Consents from Governmental Authorities referred to in Section
5.02 hereof, and the waiting periods referred to therein having expired, and any condition precedent to such Consent or waiver having
been satisfied, conflict with or violate any Law, Order or Consent applicable to the Purchaser or Merger Sub or any of its properties
or assets, or (c) (i) violate, conflict with or result in a breach of, (ii) constitute a default (or an event which, with notice or lapse
of time or both, would constitute a default) under, (iii) result in the termination, withdrawal, suspension, cancellation or modification
of, (iv) accelerate the performance required by the Purchaser or Merger Sub under, (v) result in a right of termination or acceleration
under, (vi) give rise to any obligation to make payments or provide compensation under, (vii) result in the creation of any Lien upon
any of the properties or assets of the Purchaser or Merger Sub under, (viii) give rise to any obligation to obtain any third party Consent
or provide any notice to any Person or (ix) give any Person the right to declare a default, exercise any remedy, claim a rebate, chargeback,
penalty or change in delivery schedule, accelerate the maturity or performance, cancel, terminate or modify any right, benefit, obligation
or other term under, any of the terms, conditions or provisions of, any material Contract, except for any deviations from any of the
foregoing clauses (b) or (c) that would not reasonably be expected to have a Purchaser Material Adverse Effect.
5.05
Capitalization.
(a)
As of the date of this Agreement, the authorized share capital of Purchaser is $55,500 divided into (i) 500,000,000 Purchaser Class A
Ordinary Shares, 23,665,000 of which are issued and outstanding, (ii) 50,000,000 Purchaser Class B Ordinary Shares, of which 7,666,667
shares are issued and outstanding, and (iii) 5,000,000 preference shares of a par value of $0.0001 per share, of which no shares are
issued and outstanding. All outstanding Purchaser Ordinary Shares are duly authorized, validly issued, fully paid and non-assessable
and are not subject to or issued in violation of any purchase option, right of first refusal, preemptive right, subscription right or
any similar right under any provision of the Cayman Companies Act, Purchaser’s Organizational Documents or any Contract to which
the Purchaser is a party. None of the outstanding Purchaser Ordinary Shares have been issued in violation of any applicable securities
Laws.
(b)
Subject to the terms of conditions of the Warrant Agreement, in connection with the Domestication, the Cayman Purchaser Warrants will
be converted into Domesticated Purchaser Warrants, which will be exercisable after giving effect to the Transactions for one share of
Domesticated Purchaser Common Stock at an exercise price of $11.50 per share. As of the date of this Agreement, 7,888,334 Cayman Purchaser
Warrants, consisting of 7,666,667 Cayman Purchaser Public Warrants and 221,667 Cayman Purchaser Private Placement Warrants are issued
and outstanding. All outstanding Cayman Purchaser Warrants are duly authorized, validly issued, fully paid and non-assessable and are
not subject to or issued in violation of any purchase option, right of first refusal, preemptive right, subscription right or any similar
right under any provision of the Cayman Companies Act, Purchaser’s Organizational Documents or any Contract to which the Purchaser
is a party. None of the outstanding Cayman Purchaser Warrants have been issued in violation of any applicable securities Laws.
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(c)
Other than the Redemption or as expressly set forth in this Agreement, there are no outstanding obligations of Purchaser to repurchase,
redeem or otherwise acquire any shares of Purchaser or to provide funds to make any investment (in the form of a loan, capital contribution
or otherwise) in any Person. Except as set forth in Section 5.05(c) of the Purchaser Disclosure Letter, there are no shareholders
agreements, voting trusts or other agreements or understandings to which the Purchaser is a party with respect to the voting of any shares
of Purchaser.
(d)
All Indebtedness of Purchaser as of the date of this Agreement is disclosed on Section 5.05(d) of the Purchaser Disclosure Letter.
No Indebtedness of the Purchaser contains any restriction upon (i) the prepayment of any of such Indebtedness, (ii) the incurrence of
Indebtedness by the Purchaser or (iii) the ability of the Purchaser to grant any Lien on its properties or assets.
(e)
Since the date of incorporation of the Purchaser, and except as contemplated by this Agreement, the Purchaser has not declared or paid
any distribution or dividend in respect of its shares and has not repurchased, redeemed or otherwise acquired any of its shares, and
the Purchaser’s board of directors has not authorized any of the foregoing.
(f)
Purchaser owns all of the common stock in Merger Sub. No other common stock or other voting securities of Merger Sub are issued, reserved
for issuance or outstanding. All issued and outstanding common stock of Merger Sub is duly authorized, validly issued, fully paid and
nonassessable and are not subject to, and were not issued in violation of, any purchase option, right of first refusal, preemptive right,
subscription right or any similar right under any provision of the DGCL, Merger Sub’s Organizational Documents or any contract
to which Merger Sub is a party or by which Merger Sub is bound. There are no outstanding contractual obligations of Merger Sub to repurchase,
redeem or otherwise acquire any of its membership interests or any equity capital of Merger Sub. There are no outstanding contractual
obligations of Merger Sub to provide funds to, or make any investment (in the form of a loan, capital contribution or otherwise) in,
any other Person.
5.06
SEC Filings and Purchaser Financials.
(a)
The Purchaser has, since the IPO, filed all forms, reports, schedules, statements and other documents required to be filed or furnished
by the Purchaser with the SEC under the Securities Act and/or the Exchange Act, together with any amendments, restatements or supplements
thereto (all of the foregoing filed prior to the date of this Agreement, the “Purchaser SEC Reports”) and will
have filed all such forms, reports, schedules, statements and other documents (except for the Proxy Statement/Registration Statement
and any other forms reports, schedules, statements and other documents filed or furnished with respect to the Transactions) required
to be filed on or subsequent to the date of this Agreement through the Closing Date (the “Additional Purchaser SEC Reports”).
All of the Purchaser SEC Reports, Additional Purchaser SEC Reports, any correspondence from or to the SEC or the Nasdaq Stock Market
(“Nasdaq”) (other than such correspondence in connection with the IPO of the Purchaser) and all certifications
and statements required by: (i) Rule 13a-14 or 15d-14 under the Exchange Act; or (ii) 18 U.S.C. § 1350 (Section 906) of the Sarbanes-Oxley
Act with respect to any of the foregoing (collectively, the “Public Certifications”) are available on the SEC’s
Electronic Data-Gathering, Analysis and Retrieval system (EDGAR) in full without redaction.
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(b)
The Purchaser SEC Reports were, and the Additional Purchaser SEC Reports will be, prepared in accordance with the requirements of the
Securities Act, the Exchange Act and the Sarbanes-Oxley Act, as the case may be, and the rules and regulations thereunder. The Purchaser
SEC Reports did not, and the Additional Purchaser SEC Reports will not, at the time they were or are filed (or if amended or superseded
by a filing prior to the date of this Agreement or the Closing Date, then on the date of such filing), as the case may be, with the SEC
contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary in order
to make the statements made therein, in light of the circumstances under which they were made, not misleading. Each director and executive
officer of Purchaser has filed with the SEC on a timely basis all statements required with respect to Purchaser by Section 16(a) of the
Exchange Act and the rules and regulations thereunder. The Public Certifications are, or will be, each true and correct as of their respective
dates of filing. As used in this Section 5.06(b), the term “file” shall be broadly construed to include any manner
in which a document or information is furnished, supplied or otherwise made available to the SEC or Nasdaq.
(c)
The financial statements and notes contained or incorporated by reference in the Purchaser SEC Reports fairly present, and the financial
statements and notes to be contained in or to be incorporated by reference in the Additional Purchaser SEC Reports will fairly present,
the financial condition and the results of operations, changes in shareholders’ equity and cash flows of the Purchaser as at the
respective dates of, and for the periods referred to, in such financial statements, all in accordance with: (i) GAAP; and (ii) Regulation
S-X or Regulation S-K, as applicable, subject, in the case of interim financial statements, to normal recurring year-end adjustments
and the omission of notes to the extent permitted by Regulation S-X or Regulation S-K, as applicable.
(d)
The Purchaser has no off-balance sheet arrangements that are not disclosed in the Purchaser SEC Reports. No financial statements other
than those of the Purchaser and Merger Sub are required by GAAP to be included in the consolidated financial statements of the Purchaser.
(e)
The issued and outstanding Cayman Purchaser Units are registered pursuant to Section 12(b) of the Exchange Act and are listed for trading
on Nasdaq under the symbol “CMIIU.” The issued and outstanding Purchaser Class A Ordinary Shares are registered pursuant
to Section 12(b) of the Exchange Act and are listed for trading on Nasdaq under the symbol “CMII.” The issued and outstanding
Cayman Purchaser Public Warrants are registered pursuant to Section 12(b) of the Exchange Act and are listed for trading on Nasdaq under
the symbol “CMIIW.” The Purchaser is a listed company in good standing with Nasdaq. There is no action or proceeding pending
or, to the Knowledge of the Purchaser, threatened in writing against the Purchaser by Nasdaq or the SEC with respect to any intention
by such entity to deregister the Cayman Purchaser Units, the Purchaser Class A Ordinary Shares or the Cayman Purchaser Public Warrants
or terminate the listing of the Purchaser on Nasdaq. Except in connection with the Transactions, none of the Purchaser or any of its
Affiliates has taken any action in an attempt to terminate the registration of the Cayman Purchaser Units, the Purchaser Class A Ordinary
Shares or Cayman Purchaser Public Warrants under the Exchange Act.
(f)
Except as not required in reliance on exemptions from various reporting requirements by virtue of the Purchaser’s status as an
“emerging growth company” within the meaning of the Securities Act, as modified by the Jumpstart Our Business Startups Act
of 2012 (“JOBS Act”), the Purchaser has established and maintains disclosure controls and procedures (as defined
in Rule 13a-15 under the Exchange Act). Such disclosure controls and procedures are designed to ensure that material information relating
to the Purchaser is made known to the Purchaser’s principal executive officer and its principal financial officer by others within
the entity, particularly during the periods in which the periodic reports required under the Exchange Act are being prepared. Such disclosure
controls and procedures are effective in timely alerting the Purchaser’s principal executive officer and principal financial officer
to material information required to be included in the Purchaser’s periodic reports required under the Exchange Act. Since the
consummation of the IPO, the Purchaser has established and maintained a system of internal controls over financial reporting (as defined
in Rule 13a-15 under the Exchange Act) sufficient to provide reasonable assurance regarding the reliability of the Purchaser’s
financial reporting and the preparation of the financial statements included in the Purchaser SEC Reports for external purposes in accordance
with GAAP.
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5.07
Absence of Certain Changes. As of the date of this Agreement, the Purchaser has, since the date of its incorporation (a)
conducted no business other than its incorporation, the public offering of its securities (and the related private offerings), public
reporting and its search for an initial Business Combination as described in the IPO Prospectus (including the investigation of the Company
and the negotiation and execution of this Agreement) and related activities and (b) not been subject to a Purchaser Material Adverse
Effect. Merger Sub was formed solely for the purpose of effecting the Transactions and has not engaged in any business activities or
conducted any operations other than in connection with the Transactions.
5.08
Undisclosed Liabilities. Except for any fees and expenses payable by Purchaser as a result of or in connection with the
consummation of the Transactions, there is no liability, debt or obligation of or claim or judgment against Purchaser (whether direct
or indirect, absolute or contingent, accrued or unaccrued, known or unknown, liquidated or unliquidated, or due or to become due), except
for liabilities and obligations (a) reflected or reserved for on the financial statements or disclosed in the notes thereto included
in the Purchaser SEC Reports, (b) that have arisen since the date of the most recent balance sheet included in the Purchaser SEC Reports
in the ordinary course of business of Purchaser, (c) incurred in connection with the Transactions or (d) which would not be, or would
not reasonably be expected to be, material to Purchaser. Merger Sub has no, and at all times prior to the Effective Time except as contemplated
by this Agreement or the ancillary agreements to this Agreement, will have no, assets, liabilities or obligations of any kind or nature
whatsoever other than those incident to its formation.
5.09
Compliance with Laws. Each of the Purchaser and Merger Sub is, and has since its incorporation been, in compliance with
all Laws applicable to it and the conduct of its business except for such noncompliance which would not reasonably be expected to be
material to the Purchaser or Merger Sub, and neither the Purchaser nor Merger Sub has received written notice alleging any violation
of applicable Law in any material respect by the Purchaser or Merger Sub.
5.10
Legal Proceedings; Orders; Permits. There is no pending or, to the Knowledge of the Purchaser, threatened Legal Proceeding
to which the Purchaser or Merger Sub is subject which would reasonably be expected to have a Purchaser Material Adverse Effect or that
would have a material adverse effect on the ability of the Purchaser to enter into and perform its obligations under this Agreement and
consummate the Transactions. There is no material Legal Proceeding that the Purchaser or Merger Sub has pending against any other Person.
Neither the Purchaser, nor Merger Sub, is subject to any material Orders of any Governmental Authority, nor are any such Orders pending.
Each of the Purchaser and Merger Sub holds all material Permits necessary to lawfully conduct its business as presently conducted, and
to own, lease and operate its assets and properties, all of which are in full force and effect, except where the failure to hold such
Consent or for such Consent to be in full force and effect would not reasonably be expected to have a Purchaser Material Adverse Effect.
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5.11
Taxes and Returns.
(a)
The Purchaser (i) has timely filed, or caused to be timely filed, all income and other material Tax Returns required to be filed by it
(taking into account all valid extensions of time to file), and all such Tax Returns are true, accurate, correct and complete in all
material respects, and (ii) has timely paid, collected, withheld or remitted, or caused to be timely paid, collected, withheld or remitted,
all income and other material Taxes required to be paid, collected, withheld or remitted by it, whether or not such Taxes are shown as
due and payable on any Tax Return. The Purchaser has complied in all material respects with all applicable Laws relating to Tax.
(b)
There is no Legal Proceeding currently pending or, to the Knowledge of the Purchaser, threatened against the Purchaser by a Governmental
Authority in a jurisdiction where Purchaser does not file any Tax Returns or a particular type of Tax Return or pays any Tax or a particular
type of Tax that it is or may be subject to such Tax or required to file such Tax Return in that jurisdiction.
(c)
There is no written notification of any claim, assessment, audit, examination, investigation or other Legal Proceeding that is pending,
or to the Knowledge of the Purchaser, threatened against the Purchaser in respect of any material amount of Taxes, and the Purchaser
has not been notified in writing of any proposed Tax claim, deficiency or assessment against the Purchaser in respect of a material amount
of Taxes. Purchaser is not currently contesting any material Tax liability before any Governmental Authority.
(d)
There are no Liens with respect to any Taxes upon any of the Purchaser’s assets, other than Permitted Liens.
(e)
The Purchaser has complied in all material respects with its obligations under applicable Law to (i) timely and properly collect or withhold
all Taxes required to be collected or withheld by it, and (ii) timely remit such Taxes to the appropriate Governmental Authorities.
(f)
The Purchaser has not requested or consented to any waivers or extensions of any applicable statute of limitations for the collection
or assessment of any Taxes, which waiver or extension (or request thereof) is outstanding or pending other than as the result of automatic
extensions of time to file Tax Returns requested in the ordinary course of business.
(g)
The Purchaser will not be required to include any material item of income in, or exclude any material item of deduction from, taxable
income for any taxable period (or portion thereof) beginning after the Closing Date, as a result of: (i) an installment sale or open
transaction disposition that occurred prior to the Closing; (ii) any change in method of accounting made prior to the Closing, including
by reason of the application of Section 481 of the Code (or any analogous provision of state, local or foreign Law) or the use of an
improper method of accounting prior to the Closing; (iii) any prepaid amounts received or deferred revenue realized or received prior
to the Closing outside the ordinary course of business; (iv) any intercompany transaction described in Treasury Regulations under Section
1502 of the Code (or any corresponding or similar provision of state, local or foreign Law) entered into prior to the Closing; or (v)
any “closing agreement” pursuant to Section 7121 of the Code or any other similar written agreement with a Governmental Authority
relating to Taxes entered into prior to the Closing.
(h)
The Purchaser has not participated in or been a party to, or sold, distributed or otherwise promoted, any “reportable transaction,”
as defined in Treasury Regulations Section 1.6011-4 (or any similar or corresponding provision of state, local or foreign Law).
(i)
The Purchaser has not been a member of an affiliated, combined, consolidated, unitary or other group for Tax purposes. The Purchaser
does not have any Liability or potential Liability for the Taxes of another Person (i) pursuant to Treasury Regulations Section 1.1502-6
(or any similar or corresponding provision of U.S. state or local Tax Law) or under any other applicable Tax Law, (ii) as a transferee
or successor, or (iii) by Contract, indemnity or otherwise (in each case, excluding customary commercial Contracts entered into in the
ordinary course of business the primary purpose of which is not the sharing of Taxes). The Purchaser is not a party to or bound by any
Tax indemnity agreement, Tax sharing agreement or Tax allocation agreements or similar agreement, arrangement or practice (excluding
customary commercial Contracts entered into in the ordinary course of business the primary purpose of which is not the sharing of Taxes)
with respect to Taxes.
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(j)
The Purchaser has not requested, and is not the subject of or bound by, any private letter ruling, technical advice memorandum, closing
agreement or similar ruling, memorandum or written agreement with any Governmental Authority with respect to any Taxes, nor is any such
request pending or outstanding.
(k)
The Purchaser has not knowingly taken any action, nor is it aware of any fact or circumstance, that would reasonably be expected to prevent
the relevant portions of the Transactions from qualifying for their respective Intended Tax Treatments.
5.12
Properties. Neither the Purchaser, nor Merger Sub, owns, licenses or otherwise has any right, title or interest in any
material Intellectual Property. Neither the Purchaser, nor Merger Sub own or lease any material real property or material Personal Property
(except for the Purchaser’s ownership of the Merger Sub membership interests).
5.13
Contracts. Except as set forth in the Purchaser’s or Merger Sub’s Organizational Documents or publicly filed
with the SEC, neither Purchaser nor Merger Sub is subject to any agreement, commitment, exclusive license, judgment, injunction, order
or decree that prohibits or materially impairs, or could reasonably be expected to prohibit or materially impair, their ability to execute
and deliver this Agreement and each Ancillary Document to which it is a party, to perform its respective obligations hereunder and thereunder
and to consummate the Transactions.
5.14
Investment Company Act. To the Knowledge of Purchaser, the Purchaser is not an “investment company” or a Person
directly or indirectly “controlled” by or acting on behalf of an “investment company”, or required to register
as an “investment company”, in each case within the meaning of the Investment Company Act of 1940, as amended.
5.15
Trust Account. As of the date of this Agreement, Purchaser has at least $230,000,000 in the Trust Account, such monies
held in cash or invested in United States government securities or money market funds meeting certain conditions under Rule 2a-7 promulgated
under the Investment Company Act pursuant to the Investment Management Trust Agreement (the “Trust Agreement”),
dated as of February 10, 2026, between Purchaser and Continental, as trustee (the “Trustee”). There are no
separate Contracts, side letters or other arrangements or understandings (whether written or unwritten, express or implied) that would
cause the description of the Trust Agreement in the Purchaser SEC Reports to be inaccurate or that would entitle any Person (other than
Purchaser Shareholders who shall have properly elected to redeem their Purchaser Class A Ordinary Shares pursuant to Purchaser’s
Organizational Documents and the underwriters of the IPO with respect to deferred underwriting commissions) to any portion of the proceeds
in the Trust Account. Prior to the Closing, none of the funds held in the Trust Account may be released other than to pay Taxes and payments:
(a) to the Purchaser’s public shareholders with respect to the redemption of Purchaser Class A Ordinary Shares properly submitted
in connection with a shareholder vote on a proposed Business Combination but only in the event that the applicable Business Combination
is approved and consummated and subject to the limitations contained in the Purchaser’s Organizational Documents; (b) to the Purchaser’s
public shareholders who elect to have their Purchaser Class A Ordinary Shares repurchased by means of a tender offer subject to the provisions
contained in the Purchaser’s Organizational Documents; (c) to the Purchaser’s public shareholders if any amendments are made
to the Purchaser’s Organizational Documents to (i) modify the substance or timing of Purchaser’s obligation to allow redemption
in connection with its initial business combination or to redeem 100% of its Purchaser Class A Ordinary Shares if it has not consummated
an initial business combination within the prescribed window or (ii) with respect to any other material provisions related to: (A) the
rights of holders of Purchaser Class A Ordinary Shares, or (B) pre-initial business combination activity, upon effectiveness of any such
amendment; or (d) to the Purchaser’s public shareholders if Purchaser fails to consummate a Business Combination by the deadline
set forth in the Purchaser’s Organizational Documents, and subject to extension by amendment to Purchaser’s Organizational
Documents, including interest earned on the amounts held in the Trust Account (which interest shall be net of any taxes payable and less
up to $100,000 of interest to pay dissolution expenses), and (e) to Purchaser after or concurrently with the consummation of a Business
Combination. The Trust Agreement has not been amended or modified and is a valid and binding obligation of Purchaser and is in full force
and effect and is enforceable in accordance with its terms, subject to the Enforceability Exceptions. There are no claims or proceedings
pending or, to the Knowledge of Purchaser, threatened with respect to the Trust Account. Purchaser has performed all material obligations
required to be performed by it to date under, and is not in default, breach or delinquent in performance or any other respect (claimed
or actual) in connection with, the Trust Agreement, and no event has occurred which, with due notice or lapse of time or both, would
constitute such a default or breach thereunder. As of the Closing, the obligations of Purchaser to dissolve or liquidate pursuant to
Purchaser’s Organizational Documents shall terminate, and as of the Closing, Purchaser shall have no obligation whatsoever pursuant
to Purchaser’s Organizational Documents to dissolve and liquidate the assets of Purchaser by reason of the consummation of the
Transactions. To the Knowledge of Purchaser, as of the date hereof, following the Closing, no Purchaser Shareholder shall be entitled
to receive any amount from the Trust Account except to the extent such Purchaser Shareholder is exercising their option to redeem Domesticated
Purchaser Common Stock in connection with the Redemption. As of the date hereof, assuming the accuracy of the representations and warranties
of the Company contained herein and the compliance by the Company with its obligations hereunder, Purchaser does not have any reason
to believe that any of the conditions to the use of funds in the Trust Account will not be satisfied or funds available in the Trust
Account will not be available to Purchaser on the Closing Date.
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5.16
Finders and Brokers. Except as reflected on Section 5.16 of the Purchaser Disclosure Letter, no broker, finder,
investment banker or other Person is entitled to, nor will be entitled to, either directly or indirectly, any brokerage fee, finders’
fee or other similar commission, including any deferred underwriting commissions, for which the Purchaser or Merger Sub would be liable
in connection with the Transactions based upon arrangements made by the Purchaser or any of their Affiliates.
5.17
Certain Business Practices.
(a)
None of the Purchaser, Merger Sub, nor any of their respective officers and directors, nor, to the Knowledge of the Purchaser, none of
the Purchaser, Merger Sub or any of their Representatives acting on behalf of the Purchaser or Merger Sub, has directly or indirectly
offered, given, paid, promised to give or pay, or authorized the giving or payment of anything of value to (i) an official or employee
of a foreign or domestic Governmental Authority; (ii) a foreign or domestic political party or an official of a foreign or domestic political
party; (iii) a candidate for foreign or domestic political office; or (iv) any Person, in any such case under circumstances the Purchaser,
Merger Sub or the Representative thereof knew, or reasonably would have known after due and proper inquiry, that all or a portion of
such thing of value would be offered, given, paid, or promised to an official of employee of a foreign or domestic Governmental Authority,
a foreign or domestic political party, an official of a foreign or domestic political party, or a candidate for foreign or domestic political
office, in each case in violation of any Anti-Bribery Laws. To the Knowledge of the Purchaser, none of the Purchaser, Merger Sub or any
Representative thereof has conducted or initiated any internal investigation or made a voluntary, directed, or involuntary disclosure
to any Governmental Authority with respect to any alleged act or omission relating to any noncompliance with any Anti-Bribery Laws. To
the Knowledge of the Purchaser, none of the Purchaser, Merger Sub or any Representative thereof has received any written notice, request,
or citation from any Governmental Authority for any actual or potential noncompliance with any Anti-Bribery Laws. The Purchaser has instituted
and maintains policies and procedures reasonably designed to ensure compliance in all material respects with the Anti-Bribery Laws. For
the period beginning five (5) years prior to and ending on the Closing Date, none of the Purchaser, Merger Sub nor any of their respective
officers and directors, nor, to the Knowledge of the Purchaser, any of their respective Representatives acting on their behalf, has directly
or indirectly offered, given, paid, promised to give or pay, or authorized the giving or payment of anything of value to any customer,
supplier, or other Person who is or may be in a position to assist or hinder the Purchaser or Merger Sub in connection with any actual
or proposed transaction for the purpose of influencing any act or decision of such customer, supplier, or other Person to obtain or retain
business or direct business to any person.
(b)
The operations of the Purchaser and Merger Sub are and have been conducted at all times in material compliance with Sanctions Laws, International
Trade Laws, and money laundering statutes in all applicable jurisdictions, the rules and regulations thereunder and any related or similar
rules, regulations or guidelines, issued, administered or enforced by any Governmental Authority, and no Legal Proceeding involving the
Purchaser or Merger Sub with respect to any of the foregoing is pending or, to the Knowledge of the Purchaser, threatened.
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(c)
None of the Purchaser, Merger Sub, or any of their respective directors or officers nor, to the Knowledge of the Purchaser, any other
Representative acting on behalf of the Purchaser or Merger Sub is or has been: (i) identified on any applicable sanctions-related list
of designated or blocked persons (including without limitation the SDN List maintained by OFAC), (ii) otherwise the subject or target
of any U.S. sanctions administered by OFAC, (iii) located, organized or resident in any Sanctioned Jurisdiction, or (iv) owned, directly
or indirectly, individually or in the aggregate, 50% or more or otherwise controlled by any of the foregoing.
(d)
The Purchaser and Merger Sub have maintained in place and implemented controls and systems designed to ensure compliance with Sanctions
Laws.
(e)
Neither the Purchaser nor Merger Sub has directly or indirectly, used any funds, or loaned, contributed or otherwise made available such
funds to any Subsidiary, joint venture partner or other Person, in connection with any sales or operations in a Sanctioned Jurisdiction
or for the purpose of financing the activities (x) of any Person currently the subject or target of U.S. sanctions administered by the
U.S. government, or (y) in any other manner that would constitute a violation of, any Sanctions Laws.
(f)
Neither the Purchaser nor the Merger Sub are a “foreign person” as defined by 31 C.F.R. § 800.224.
5.18
Insurance. Section 5.18 of the Purchaser Disclosure Letter lists all insurance policies (by policy number, insurer,
coverage period, coverage amount, annual premium and type of policy) held by the Purchaser or Merger Sub or relating to the Purchaser
or Merger Sub or their business, properties, assets, directors, officers and employees, copies of which have been provided to the Company.
All premiums due and payable under all such insurance policies have been timely paid and the Purchaser and Merger Sub are otherwise in
material compliance with the terms of such insurance policies. All such insurance policies are in full force and effect, and to the Knowledge
of the Purchaser, there is no threatened termination of, or material premium increase with respect to, any of such insurance policies.
There have been no insurance claims made by the Purchaser or Merger Sub. Each of the Purchaser and Merger Sub has reported to its insurers
all claims and pending circumstances that would reasonably be expected to result in a claim, except where such failure to report such
a claim would not be reasonably likely to have a Purchaser Material Adverse Effect.
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5.19 Information
Supplied. None of the information supplied or to be supplied by, or on behalf of, Purchaser or Merger Sub expressly for inclusion
or incorporation by reference in (i) any current report on Form 8-K, and any exhibits thereto or any other report, form, registration
or other filing made with any Governmental Authority or stock exchange with respect to the Transactions or in the Proxy Statement/Registration
Statement or (ii) any of the Signing Press Release, the Signing Filing, the Closing Press Release, the Closing Filing and any other press
releases or prospectuses filed under Rule 425 of the Securities Act in connection to the Transactions shall contain any untrue statement
of a material fact or omit to state any material fact required to be stated therein or necessary in order to make the statements therein,
in light of the circumstances under which they are made, not misleading at (a) the time such information is filed with or furnished to
the SEC (provided, that if such information is revised by any subsequently filed amendment or supplement, this clause (a) shall solely
refer to the time of such subsequent revision); (b) the time the Proxy Statement/Registration Statement is declared effective by the
SEC; (c) the time the Proxy Statement/Registration Statement (or any amendment thereof or supplement thereto) is first mailed to the
Purchaser Shareholders; or (d) the time of the Purchaser Shareholders’ Meeting. Notwithstanding the foregoing, the Purchaser and
Merger Sub make no representations, warranties or covenants with respect to any information supplied by or on behalf of the Company or
its Affiliates.
5.20 Independent
Investigation. The Purchaser and Merger Sub have conducted their own independent investigation, review and analysis of the business,
results of operations, prospects, condition (financial or otherwise) or assets of the Company, and acknowledges that they have been provided
adequate access to the personnel, properties, assets, premises, books and records, and other documents and data of the Company for such
purpose. The Purchaser and Merger Sub acknowledge and agree that: (a) in making their decision to enter into this Agreement and to consummate
the Transactions, they have relied solely upon their own investigation and the express representations and warranties of the Company
set forth in this Agreement (including the related portions of the Company Disclosure Letter) and in any certificate delivered to Purchaser
or Merger Sub pursuant hereto, and the information provided by or on behalf of the Company for the Proxy Statement/Registration Statement;
and (b) neither the Company, nor its Representatives have made any representation or warranty as to the Company, or this Agreement, except
as expressly set forth in Article IV (including the related portions of the Company Disclosure Letter) or in any certificate delivered
to Purchaser or Merger Sub pursuant hereto. Without limiting the foregoing, the Purchaser and Merger Sub acknowledge that the Purchaser
and Merger Sub or their advisors, have made their own investigation of the Company and, except as provided in Article IV are not relying
on any representation or warranty whatsoever as to the condition, merchantability, suitability or fitness for a particular purpose or
trade as to any of the assets of the Company, the prospects (financial or otherwise) or the viability or likelihood of success of the
business of the Company as conducted after the Closing, or as contained in any materials provided by the Company or any of its Affiliates
or any of its directors, officers, employees, shareholders, partners, members or representatives or otherwise.
5.21 No
Additional Representation or Warranties. Except as provided in this Article V, none of the Purchaser, Merger Sub, any
their respective Affiliates, or any of their respective directors, managers, officers, employees, stockholders, partners, members or
representatives has made, or is making, any representation or warranty whatsoever to the Company or its Affiliates and no such party
shall be liable in respect of the accuracy or completeness of any information provided to the Company or its Affiliates. Without limiting
the foregoing, the Company acknowledges that the Company or its advisors, have made their own investigation of the Purchaser and Merger
Sub and, except as provided in this Article V, are not relying on any representation or warranty whatsoever as to the condition,
merchantability, suitability or fitness for a particular purpose or trade as to any of the assets of the Purchaser and Merger Sub, the
prospects (financial or otherwise) or the viability or likelihood of success of the business of the Purchaser and Merger Sub as conducted
after the Closing, or as contained in any materials provided by the Purchaser or Merger Sub or any of their respective Affiliates or
any of their respective directors, officers, employees, shareholders, partners, members or representatives or otherwise.
46
ARTICLE
VI
COVENANTS
6.01
Access and Information; Cooperation.
(a) During
the period from the date of this Agreement and continuing until the earlier of the termination of this Agreement in accordance with Section
8.01 or the Closing (the “Interim Period”), subject to Section 6.16, the Company shall give the
Purchaser and its Representatives, at reasonable times during normal business hours and upon reasonable intervals and notice, reasonable
access to all offices and other facilities and to all officers, managers, properties, Contracts, agreements, commitments, books and records,
financial and operating data and other information, of or pertaining to the Company as the Purchaser or its Representatives may reasonably
request regarding the Company and its business, assets, Liabilities, financial condition, prospects, operations, management, employees
and other aspects and cause each of the Company’s Representatives to reasonably cooperate with the Purchaser and its Representatives
in their investigation; provided, however, that the Purchaser and its Representatives shall conduct any such activities in such
a manner as not to unreasonably interfere with the business or operations of the Company. Notwithstanding the foregoing, the Company
shall not be required to provide, or cause to be provided, to Purchaser or any of its Representatives any information (i) if and to the
extent doing so would (A) violate any Law to which the Company is subject, (B) result in the disclosure of any trade secrets of third
parties in breach of any Contract with such third party, (C) materially violate any legally-binding obligation of the Company with respect
to confidentiality, non-disclosure or privacy or (D) jeopardize protections afforded to the Company under the attorney-client privilege
or the attorney work product doctrine (provided that, in the case of each of clauses (A) through (C), the Company shall use commercially
reasonable efforts to (x) provide such access as can be provided (or otherwise convey such information regarding the applicable matter
as can be conveyed) without violating such Contract, obligation or Law and (y) provide such information in a manner without violating
such Contract, obligation or Law), or (ii) if the Company, on the one hand, and Purchaser or any of its Representatives, on the other
hand, are adverse parties in a litigation and such information is reasonably pertinent thereto. For the avoidance of doubt, the Company
shall not be obligated under this Section 6.01(a) to permit the Purchaser or any of its Representatives to conduct any invasive,
intrusive or subsurface sampling or testing of any media at the properties of the Company.
(b) During
the Interim Period, subject to Section 6.16, the Purchaser shall give, and shall cause its Representatives to give, the Company
and its Representatives, at reasonable times during normal business hours and upon reasonable intervals and notice, reasonable access
to all offices and other facilities and to all officers, directors, properties, Contracts, agreements, commitments, books and records,
financial and operating data and other information, of or pertaining to the Purchaser or its Subsidiaries, as the Company or its Representatives
may reasonably request regarding the Purchaser, its Subsidiaries and their respective businesses, assets, Liabilities, financial condition,
prospects, operations, management, employees and other aspects and cause each of the Purchaser’s Representatives to reasonably
cooperate with the Company and its Representatives in their investigation; provided, however, that the Company and its Representatives
shall conduct any such activities in such a manner as not to unreasonably interfere with the business or operations of the Purchaser
or any of its Subsidiaries. Notwithstanding the foregoing, the Purchaser shall not be required to provide, or cause to be provided, to
the Company or any of its Representatives any information (i) if and to the extent doing so would (A) violate any Law to which the Purchaser
is subject, (B) violate any legally-binding obligation of the Purchaser with respect to confidentiality, nondisclosure or privacy or
(C) jeopardize protections afforded to the Purchaser under the attorney-client privilege or the attorney work product doctrine (provided
that, in the case of each of clauses (A) through (B), the Purchaser shall use commercially reasonable efforts to (x) provide such access
as can be provided (or otherwise convey such information regarding the applicable matter as can be conveyed) without violating such Contract,
obligation or Law and (y) provide such information in a manner without violating such Contract, obligation or Law), or (ii) if the Purchaser,
on the one hand, and the Company or any of its Representatives, on the other hand, are adverse parties in a litigation and such information
is reasonably pertinent thereto.
(c) During
the Interim Period, each of the Company and the Purchaser shall, and shall cause their respective Representatives to, reasonably cooperate
in a timely manner in connection with any financing arrangement the Parties mutually agree to seek in connection with the transactions
contemplated by this Agreement (including, in connection with the PIPE Investment), including, (i) by providing such information and
assistance as the other Party may reasonably request, (ii) granting such access to the other Party and its Representatives as may be
reasonably necessary for their due diligence, and (iii) participating in a reasonable number of meetings, presentations, road shows,
drafting sessions, due diligence sessions with respect to such financing efforts (including direct contact between senior management
and other Representatives of the Company at reasonable times and locations). All such cooperation, assistance and access shall be granted
during normal business hours and shall be granted under conditions that shall not unreasonably interfere with the business and operations
of the Company, the Purchaser, or their respective Representatives.
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6.02
Conduct of Business of the Company.
(a) During
the Interim Period, except as expressly contemplated by this Agreement or the Ancillary Documents, as required by applicable Law, as
set forth on Section 6.02(b) of the Company Disclosure Letter or as consented to in writing by the Purchaser (such consent not
to be unreasonably withheld, conditioned or delayed), the Company shall use commercially reasonable efforts to (i) conduct its and their
respective businesses, in all material respects, in the ordinary course of business, (ii) comply in all material respects with all Laws
applicable to the Company and its businesses and assets, and (iii) take commercially reasonable measures necessary or appropriate to
preserve intact, in all material respects, their respective businesses. Notwithstanding anything in this Section 6.02 to the contrary,
and without the need to obtain the consent of the Purchaser, during the Interim Period the Company shall be permitted to: (A) continue
to prosecute the Type Certification Application and engage with the FAA in the ordinary course regarding certification activities, milestones,
meetings and submissions (including responding to FAA Issue Papers, submitting compliance findings, conducting certification flight tests,
and seeking establishment of the certification basis); (B) file, prosecute, amend or respond to inquiries regarding any exemption, certificate
of authorization, special airworthiness certificate or other authorization from the FAA or other Aviation Authority in the ordinary course
of business; (C) continue participation in the FAA’s eVTOL Integration Pilot Program or successor programs, including conducting
demonstrations and operational evaluations; (D) perform under, and take actions reasonably necessary to maintain compliance with, Material
Current Government Contracts and other government agreements in the ordinary course; (E) engage with the Bureau of Industry and Security,
the Directorate of Defense Trade Controls, or any other Governmental Authority regarding export classifications, licenses, or commodity
jurisdiction matters in the ordinary course; (F) continue manufacturing, research, development and testing activities pursuant to existing
contractual arrangements; and (G) provide notices, filings or responses to any Aviation Authority or export control authority as required
by applicable Law or regulation; provided, that the Company shall provide the Purchaser with prior written notice (which may be by email)
of any material filing with, or submission to, an Aviation Authority to the extent reasonably practicable and shall consult in good faith
with the Purchaser regarding any material proposed change to the scope of the Type Certification Application or any new exemption application
that is outside the ordinary course of business.
(b) Without
limiting the generality of Section 6.02(a) and except as contemplated by the terms of this Agreement or the Ancillary Documents,
as required by applicable Law or as set forth on Section 6.02(b) of the Company Disclosure Letter, during the Interim Period,
without the prior written consent of the Purchaser (such consent not to be unreasonably withheld, conditioned or delayed), the Company
shall not:
(i)
amend, waive or otherwise change, in any respect, its Organizational Documents;
(ii) authorize
for issuance, issue, grant, sell, pledge, dispose of or propose to issue, grant, sell, pledge or dispose of any of its equity securities
or any options, warrants, commitments, subscriptions or rights of any kind to acquire or sell any of its equity securities, or other
securities, including any securities convertible into or exchangeable for any of its shares or other equity securities or securities
of any class and any other equity-based awards, or engage in any hedging transaction with a third Person with respect to such securities,
except in compliance with existing Company Benefits Plans or any Contract (including any warrant, option, or profits interest award)
outstanding as of the date hereof which has been disclosed in writing to the Purchaser or through the virtual dataroom maintained by
Box.com with respect to the Company (the “Dataroom”) or prior to the date of this Agreement;
(iii) split,
combine, recapitalize or reclassify any of its shares or other equity interests or issue any other securities in respect thereof or pay
or set aside any dividend or other distribution (whether in cash, equity or property or any combination thereof) in respect of its equity
interests, or directly or indirectly redeem, purchase or otherwise acquire or offer to acquire any of its securities, except as may be
required pursuant to the Company Certificate of Incorporation or the Organizational Documents of the Company in connection with the Transactions;
(iv) allow
the aggregate Indebtedness of the Company to exceed $1,000,000, excluding amounts that may be owed pursuant to those items set forth
on Section 6.02(b) of the Company Disclosure Letter;
48
(v) except
as otherwise required by Company Benefit Plans or award agreements thereunder or as set forth on Section 6.02(b)(v) of the Disclosure
Letter, (A) grant any severance, retention, change in control or termination or similar pay, (B) terminate, adopt, enter into or materially
amend or grant any new awards under any Company Benefit Plan or any plan, policy, practice, program, agreement or other arrangement that
would be deemed a Company Benefit Plan as of the date hereof, (C) increase the cash compensation or bonus opportunity of any employee,
officer, director or other individual service provider, except for such increases to any such individuals who are not C-level executives
of the Company made in the ordinary course of business consistent with past practice, (D) take any action to amend or waive any performance
or vesting criteria or to accelerate the time of payment or vesting of any compensation or benefit payable by the Company, (E) hire or
engage any new employee or individual independent contractor if such new employee or individual independent contractor will be a C-level
executive, other than in the ordinary course of business consistent with past practice, (F) terminate the employment or engagement of
any C-level executive, other than for cause, death or disability or (G) enter into any written waiver of any restrictive covenants applying
to any current or former employee or individual independent contractor;
(vi) enter
into or extend any collective bargaining agreement or similar labor agreement, or recognize or certify any labor union, labor organization,
or group of employees of the Company as the bargaining representative for any employees of the Company;
(vii) (A)
make (other than consistent with past practice), change or rescind any material election relating to Taxes, (B) settle any claim, suit,
litigation, proceeding, arbitration, investigation, audit, controversy or other Legal Proceeding relating to Taxes exceeding $500,000,
(C) file any amended Tax Return for income or other material Taxes, (D) waive or extend any statute of limitations in respect of a period
within which an assessment or reassessment of income Taxes or other material Taxes may be issued or in respect of any income Taxes or
other material Tax attribute that would give rise to any claim or assessment of Taxes of or with respect to the Company, (E) enter into
any “closing agreement” as described in Section 7121 of the Code or any other similar written agreement with any Governmental
Authority, or (F) enter into any Tax indemnity agreement, Tax sharing agreement or Tax allocation agreement or similar written agreement,
arrangement or practice (excluding customary commercial Contracts entered into in the ordinary course of business the primary purpose
of which is not the sharing of Taxes) with respect to Taxes;
(viii) knowingly
take any action, or knowingly fail to take any action, where such action or failure to act would reasonably be expected to prevent the
relevant portions of the Transactions from qualifying for their respective Intended Tax Treatments;
(ix) transfer,
sell, assign, license, sublicense, covenant not to assert, subject to a Lien (other than a Permitted Lien), abandon, allow to lapse,
transfer or otherwise dispose of, any right, title or interest of the Company in or to any Intellectual Property material to any of the
businesses of the Company (other than non-exclusive licenses of Owned Intellectual Property granted to customers, suppliers or vendors
in the ordinary course of business or abandoning, allowing to lapse or otherwise disposing of Owned Intellectual Property registrations
or applications that the Company, in the exercise of its good faith business judgment, has determined to abandon, allow to lapse or otherwise
dispose of), or otherwise materially amend or modify, permit to lapse or fail to preserve any material Company Registered IP (excluding
non-exclusive licenses of Owned Intellectual Property to the Company’s customers in the ordinary course of business consistent
with past practice), or disclose, divulge, furnish to or make accessible to any Person who has not entered into a confidentiality agreement
sufficiently protecting the confidentiality thereof any material Trade Secrets constituting Owned Intellectual Property, or include,
incorporate or embed in, link to, combine, make available or distribute with, or use in the development, operation, delivery or provision
of any Company Software any Open Source Software in a manner that would subject such Company Software to Copyleft Terms;
(x) fail
to maintain its books, accounts and records in all material respects in the ordinary course of business consistent with past practice;
(xi) terminate
or assign any Company Material Contract or any material Company Real Property Lease or enter into any Contract that would be a Company
Material Contract or material Company Real Property Lease, in any case outside of the ordinary course of business consistent with past
practice or novations of Material Current Government Contracts that are required in connection with the Transactions;
(xii)enter
into any new line of business or establish any Subsidiary in
connection
therewith;
(xiii) fail
to use commercially reasonable efforts to keep in force material insurance policies or replacement or revised policies providing insurance
coverage with respect to its assets, operations and activities in such amount and scope of coverage substantially similar to that which
is currently in effect, or terminate without replacement or amend in a manner materially detrimental to the Company, any material insurance
policy insuring the Company;
49
(xiv) make
any material change in accounting methods, principles or practices, except to the extent required to comply with GAAP or changes that
are made in accordance with PCAOB standards;
(xv) waive,
release, assign, settle or compromise any claim, action or proceeding (including any suit, action, claim, proceeding or investigation
relating to this Agreement or the transactions contemplated hereby), other than waivers, releases, assignments, settlements or compromises
that involve only the payment of monetary damages (and not the imposition of equitable relief on, or the admission of wrongdoing by,
the Company or its Affiliates) not in excess of $500,000 (individually or in the aggregate);
(xvi) effect
any mass layoff or plant closing at any of its facilities that triggers the notice obligations under the Worker Adjustment and Retraining
Notification Act of 1988, except as would not be material to the Company;
(xvii) acquire,
including by merger, consolidation, acquisition of equity interests or assets, or any other form of business combination, any corporation,
partnership, limited liability company, other business organization or any division thereof, or any material amount of assets, in each
case, outside the ordinary course of business consistent with past practice, except pursuant to any Contract in existence as of the date
hereof which has been disclosed in writing or in the Dataroom to the Purchaser;
(xviii) make
capital expenditures outside of the ordinary course of business consistent with past practice in excess of $500,000 (individually for
any project) or $2,500,000 in the aggregate in each case excluding the incurrence of any ordinary course administrative costs and expenses
and other expenses incurred in connection with the consummation of Transactions (including legal or accounting); provided, however, if
Purchaser does not respond within five (5) Business Days of receipt of a request for consent to (A) capital expenditures related to type
certification activities, flight testing, prototype development, manufacturing tooling, research and development, and compliance with
Aviation Authorization requirements or (B) capital expenditures required for the performance of Material Current Government Contracts,
Purchaser shall be deemed to have consented to such request;
(xix) adopt
a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring or other reorganization;
(xx) voluntarily
incur Liabilities or obligations (whether absolute, accrued, contingent or otherwise) in excess of $1,000,000 in the aggregate other
than pursuant to the terms of a Company Material Contract or Company Benefit Plan, in any case, outside of the ordinary course of business,
taking into account the anticipated growth in the Company’s businesses over the twelve months beginning on the date of this Agreement,
and excluding the expenses incurred in connection with the consummation of Transactions (including legal or accounting);
(xxi) sell,
lease, license, transfer, exchange or swap, mortgage or otherwise pledge or encumber (including securitizations), or otherwise dispose
of any material portion of its tangible properties, assets or rights, other than dispositions of obsolete or surplus equipment in the
ordinary course of business consistent with past practice;
(xxii) enter
into any written agreement, understanding or arrangement with respect to the voting of equity securities of the Company;
(xxiii) take
any action that would reasonably be expected to significantly delay or impair the obtaining of any Consents of any Governmental Authority
to be obtained in connection with this Agreement provided that ordinary-course engagement with Aviation Authorities, export control authorities,
and government contract administration officials (including routine filings, applications, certifications, reports and responses to regulatory
inquiries) shall not be deemed to violate this Section 6.02(b)(xxiii);
50
(xxiv) enter
into, amend, waive or terminate (other than terminations in accordance with their terms) any transaction with any Related Person (other
than compensation and benefits and advancement of expenses, in each case, in the ordinary course of business consistent with past practice
or any existing Contract (provided such Contract is not amended after the date of this Agreement) or its Organizational Documents);
(xxv) (A)
limit the right of the Company to engage in any line of business or in any geographic area, to develop, market or sell products or services,
or to compete with any Person or (B) grant any exclusive or similar rights to any Person, in each case, except where such limitation
or grant does not, and would not be reasonably likely to, individually or in the aggregate, materially and adversely affect, or materially
disrupt, the ordinary course operation of the business of the Company; or
(xxvi)
authorize or agree to do any of the foregoing actions.
6.03
Conduct of Business of the Purchaser.
(a) During
the Interim Period, except as expressly contemplated by this Agreement or the Ancillary Documents, as required by applicable Law, as
set forth on Section 6.03(b) of the Purchaser Disclosure Letter or as consented to in writing by the Company (such consent not
to be unreasonably withheld, conditioned or delayed), the Purchaser shall, and shall cause Merger Sub to, (i) conduct its business, in
all material respects, in the ordinary course of business, (ii) comply in all material respects with all Laws applicable to it and its
businesses, assets and employees, and (iii) take commercially reasonable measures necessary or appropriate to preserve intact, in all
material respects, its business organizations. Notwithstanding anything to the contrary in this Section 6.03, nothing in this
Agreement shall prohibit or restrict the Purchaser from extending, in accordance with the Purchaser’s Organizational Documents
and the IPO Prospectus, the deadline by which it must complete its Business Combination, by way of an amendment to the Purchaser’s
Organizational Documents, or making any payments to the Trust Account in connection therewith, and no consent of any other Party shall
be required in connection therewith.
(b) Without
limiting the generality of Section 6.03(a) and except as contemplated by the terms of this Agreement or the Ancillary Documents
(including the Domestication or as contemplated by the PIPE Investment), as required by applicable Law or as set forth on Section
6.03(b) of the Purchaser Disclosure Letter, during the Interim Period, without the prior written consent of the Company (such consent
not to be unreasonably withheld, conditioned or delayed), the Purchaser shall not, and shall cause Merger Sub not to:
(i)
amend, waive or otherwise change, in any respect, its Organizational Documents;
(ii) authorize
for issuance, issue, grant, sell, pledge, dispose of or propose to issue, grant, sell, pledge or dispose of any of its equity securities
or any options, warrants, commitments, subscriptions or rights of any kind to acquire or sell any of its equity securities, or other
securities, including any securities convertible into or exchangeable for any of its equity securities or other security interests of
any class and any other equity-based awards, or engage in any hedging transaction with a third Person with respect to such securities;
51
(iii) split,
combine, recapitalize or reclassify any of its shares or other equity interests or issue any other securities in respect thereof or pay
or set aside any dividend or other distribution (whether in cash, equity or property or any combination thereof) in respect of its shares
or other equity interests, or directly or indirectly redeem, purchase or otherwise acquire or offer to acquire any of its securities
other than the Redemption or a conversion of the Purchaser Class B Ordinary Shares in accordance with the Purchaser’s Organizational
Documents;
(iv) incur,
create, assume, prepay or otherwise become liable for any Indebtedness (directly, contingently or otherwise) in excess of $200,000 individually
or $2,500,000 in the aggregate, make a loan or advance to or investment in any third party, or guarantee or endorse any Indebtedness,
Liability or obligation of any Person (provided, that this Section 6.03(b)(iv) shall not prevent the Purchaser from borrowing
funds necessary to finance its ordinary course administrative costs and expenses and expenses incurred in connection with the consummation
of the Transactions (including the PIPE Investment, up to aggregate additional Indebtedness during the Interim Period of $1,500,000);
(v) (A)
make (other than consistent with past practice), change or rescind any material election relating to Taxes, (B) settle any claim, suit,
litigation, proceeding, arbitration, investigation, audit, controversy or other Legal Proceeding relating to Taxes exceeding $500,000,
(C) file any amended Tax Return for income or other material Taxes, (D) waive or extend any statute of limitations in respect of a period
within which an assessment or reassessment of income Taxes or other material Taxes may be issued or in respect of any income Taxes or
other material Tax attribute that would give rise to any claim or assessment of Taxes of or with respect to Purchaser, (E) enter into
any “closing agreement” as described in Section 7121 of the Code or any other similar written agreement with any Governmental
Authority, or (F) enter into any Tax indemnity agreement, Tax sharing agreement or Tax allocation agreement or similar written agreement,
arrangement or practice (excluding customary commercial Contracts entered into in the ordinary course of business the primary purpose
of which is not the sharing of Taxes) with respect to Taxes;
(vi) knowingly
take any action, or knowingly fail to take any action, where such action or failure to act could reasonably be expected to prevent the
relevant portions of the Transactions from qualifying for their respective Intended Tax Treatments;
(vii) amend,
waive or otherwise change the Trust Agreement in any manner adverse to the Purchaser;
(viii)
terminate, waive or assign any material right under any material Contract of Purchaser;
(ix) fail
to maintain its books, accounts and records in all material respects in the ordinary course of business consistent with past practice;
(x)
establish any Subsidiary or enter into any new line of business;
(xi) fail
to use commercially reasonable efforts to keep in force material insurance policies or replacement or revised policies providing insurance
coverage with respect to its assets, operations and activities in such amount and scope of coverage substantially similar to that which
is currently in effect;
(xii) make
any material change in accounting methods, principles or practices, except to the extent required to comply with GAAP or PCAOB standards;
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(xiii) waive,
release, assign, settle or compromise any claim, action or proceeding (including any suit, action, claim, proceeding or investigation
relating to this Agreement or the Transactions), other than waivers, releases, assignments, settlements or compromises that involve only
the payment of monetary damages (and not the imposition of equitable relief on, or the admission of wrongdoing by, the Purchaser or its
Subsidiary) not in excess of $500,000 (individually or in the aggregate);
(xiv) acquire,
including by merger, consolidation, acquisition of equity interests or assets, or any other form of business combination, any corporation,
partnership, limited liability company, other business organization or any division thereof, or any material amount of assets outside
the ordinary course of business;
(xv) make
capital expenditures in excess of $200,000 individually for any project (or set of related projects) or $500,000 in the aggregate (excluding
for the avoidance of doubt, incurring any ordinary course administrative costs and expenses and expenses incurred in connection with
the consummation of Transactions, including legal or accounting (including the PIPE Investment));
(xvi) adopt
a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization
(other than with respect to the Transactions);
(xvii) voluntarily
incur any Liability or obligation (whether absolute, accrued, contingent or otherwise) in excess of $500,000 individually or $1,000,000
in the aggregate (excluding the incurrence of any ordinary course administrative costs and expenses and expenses incurred in connection
with the consummation of Transactions, including legal or accounting (including the PIPE Investment)) other than pursuant to the terms
of a Contract in existence as of the date of this Agreement or entered into in the ordinary course of business or in accordance with
the terms of this Section 6.03 during the Interim Period;
(xviii) sell,
lease, license, transfer, exchange or swap, mortgage or otherwise pledge or encumber (including securitizations), or otherwise dispose
of any material portion of its tangible properties, assets or rights;
(xix) take
any action that would reasonably be expected to significantly delay or impair the obtaining of any Consents of any Governmental Authority
to be obtained in connection with this Agreement;
(xx) grant
or establish any form of compensation or benefits to any current or former employee, officer, director, individual independent contractor
or other individual service provider of Purchaser; or
(xxi)
authorize or agree to do any of the foregoing actions.
6.04
Annual and Interim Financial Statements.
(a) To
the extent not already delivered, as soon as reasonably practicable following the date of this Agreement, but in no event later than
August 31, 2026, the Company shall deliver to the Purchaser audited consolidated balance sheets and statements of operations,
comprehensive loss, stockholders’ equity and cash flows of the Company as of and for the years ended December 31, 2024 and
December 31, 2025, together with the auditor’s reports thereon, which comply in all material respects with the applicable
accounting requirements and with the rules and regulations of the SEC, the Exchange Act and the Securities Act applicable to a
registrant and which have been audited in accordance with GAAP standards (collectively, the “PCAOB Financial
Statements”); provided, that upon delivery of such PCAOB Financial Statements, such financial statements shall be
deemed “Audited Financial Statements” for the purposes of this Agreement and the representation and warranties set forth
in Section 4.06 shall be deemed to apply to such Audited Financial Statements with the same force and effect as if made as of
the date of this Agreement; provided further that there shall be no material changes between the Audited Financial Statements and
the PCAOB Financial Statements with respect to the particular fixed period.
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(b) To
the extent not already delivered, as soon as reasonably practicable following the date of this Agreement, but in no event later than
August 31, 2026, the Company shall deliver to the Purchaser unaudited reviewed consolidated balance sheets and statements of operations,
comprehensive loss, stockholders’ equity and cash flows of the Company as of and for the six-month periods ending June 30, 2026
and 2025, which comply in all material respects with the applicable accounting requirements and with the rules and regulations of the
SEC, the Exchange Act and the Securities Act applicable to a registrant (the “Updated 1Q Financial Statements”)
and as soon as reasonably practicable, the Company shall deliver to the Purchaser any other audited or unaudited financial statements
of the Company that are required by applicable law to be included in the Proxy Statement/Registration Statement; provided, that upon
delivery of such Updated 1Q Financial Statements and any other audited or unaudited financial statements of the Company, the representation
and warranties set forth in Section 4.06 shall be deemed to apply to the Updated 1Q Financial Statements and any other audited
or unaudited financial statements of the Company, mutatis mutandis, with the same force and effect as if made as of the date of this
Agreement.
(c) Notwithstanding
anything else in this Agreement, failure to provide the PCAOB Financial Statements and the Updated 1Q Financial Statements by the deadlines
specified in Section 6.04 shall not be a breach of this Agreement.
6.05 Purchaser
Public Filings. During the Interim Period, the Purchaser will keep current all of its public filings with the SEC (after
giving effect to all applicable extension periods) and otherwise comply in all material respects with applicable securities Laws and
shall use its commercially reasonable efforts prior to the Closing to maintain the listing of the Purchaser Class A Ordinary Shares
and the Cayman Purchaser Public Warrants on Nasdaq; provided, that the Parties acknowledge and agree that (i) if Purchaser
fails to timely file any public filing with the SEC, such failure shall not be a breach of this Section 6.05 provided such
public filing is made before the effectiveness of the Registration Statement or the earlier termination of this Agreement pursuant
to Section 8.01(e) (even though such filing is late) and such late filing does not have a material adverse impact on the
consummation of the Transactions and (ii) from and after the Closing, the Parties intend to list on Nasdaq only the Domesticated
Purchaser Common Stock and the Domesticated Purchaser Warrants.
6.06
No Solicitation.
(a) For
purposes of this Agreement, (i) an “Acquisition Proposal” means any inquiry, proposal or offer, or any indication
of interest in making an offer or proposal (whether written or oral), from any Person or group at any time relating to an Alternative
Transaction (other than the Purchaser and the Sponsor or their respective Representatives), and (ii) an “Alternative Transaction”
means (A) with respect to the Company, a transaction or a series of transactions (other than the Transactions) concerning the sale (whether
directly or indirectly) of (x) all or any part of the business or assets of the Company, (y) any of the shares or other equity interests
or profits of the Company, in any case, whether such transaction takes the form of a sale of stock or other equity interests, assets,
merger, consolidation, issuance of debt securities, management Contract, joint venture or partnership, or otherwise or (z) a merger,
consolidation, share exchange, business combination, reorganization, recapitalization, liquidation, dissolution or other similar transaction
involving the sale or disposition of the Company and (B) with respect to the Purchaser and its Affiliates, a transaction (other than
the transactions contemplated by this Agreement) concerning a business combination involving Purchaser or any of its Affiliates.
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(b) During
the Interim Period, in order to induce the other Parties to continue to commit to expend management time and financial resources in furtherance
of the transactions contemplated hereby, each Party shall not, and shall cause its Representatives to not, without the prior written
consent of the Company and the Purchaser, directly or indirectly, (i) solicit, assist, initiate, engage or facilitate the making, submission
or announcement of, or encourage, any Acquisition Proposal, (ii) furnish any non-public information regarding such Party or its Affiliates
or their respective businesses, operations, assets, Liabilities, financial condition, prospects or employees to any Person or group (other
than a Party to this Agreement or their respective Representatives) in connection with or in response to an Acquisition Proposal, (iii)
engage or participate in discussions or negotiations with any Person or group with respect to, or that could reasonably be expected to
lead to, an Acquisition Proposal, (iv) approve, endorse or recommend, or publicly propose to approve, endorse or recommend, any Acquisition
Proposal, (v) negotiate or enter into any letter of intent, agreement in principle, acquisition agreement or other similar agreement
related to any Acquisition Proposal, (vi) release any third Person from, or waive any provision of, any confidentiality agreement to
which such Party is a party, (vii) otherwise knowingly encourage or facilitate any such inquiries, proposals, discussions, or negotiations
or any effort or attempt by any Person to make an Alternative Transaction or (viii) agree or otherwise commit to enter into or engage
in any of the foregoing.
(c) Each
Party shall notify the other Parties as promptly as practicable (and in any event within two (2) Business Days) in writing of the receipt
by such Party or any of its Representatives of (i) any inquiries, proposals or offers, requests for information or requests for discussions
or negotiations regarding or constituting any Acquisition Proposal or any inquiries, proposals or offers, requests for information or
requests for discussions or negotiations that could be expected to result in an Acquisition Proposal, and (ii) any request for non-public
information relating to such Party or its Affiliates in connection with any Acquisition Proposal, specifying in each case, the material
terms and conditions thereof (including a copy thereof if in writing or a written summary thereof if oral) and the identity of the party
making such inquiry, proposal, offer or request for information. Each Party shall keep the others promptly informed of the status of
any such inquiries, proposals, offers or requests for information. During the Interim Period, each Party shall, and shall cause its Representatives
to, immediately cease and cause to be terminated any solicitations, discussions or negotiations with any Person with respect to any Acquisition
Proposal and shall, and shall direct its Representatives to, cease and terminate any such solicitations, discussions or negotiations.
6.07 No
Trading.The Company acknowledges and agrees that it is aware, and that the Company’s Affiliates are aware (and each of
their respective Representatives is aware or, upon receipt of any material nonpublic information of the Purchaser, will be advised) of
the restrictions imposed by U.S. federal securities laws and the rules and regulations of the SEC and Nasdaq promulgated thereunder or
otherwise (the “Federal Securities Laws”) and other applicable foreign and domestic Laws on a Person possessing
material nonpublic information about a publicly traded company. The Company hereby agrees that, while it is in possession of such material
nonpublic information, it shall not, and it shall instruct its other Affiliates and Representatives not to, purchase or sell any securities
of the Purchaser (unless otherwise explicitly contemplated in this Agreement), communicate such information to any third party (other
than (x) to Persons for the purpose of seeking consents related to the Transactions or (y) Persons subject to confidentiality restrictions
in favor of the Company), take any other action with respect to the Purchaser in violation of such Laws, or cause or encourage any third
party to do any of the foregoing.
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6.08 Notification
of Certain Matters. During the Interim Period, each Party shall give prompt notice to the other Parties if such Party or its
Affiliates: (a) receives any notice or other communication in writing from any third party (including any Governmental Authority) alleging:
(i) that the Consent of such third party is or may be required in connection with the Transactions or (ii) any non-compliance with any
Law by such Party or its Affiliates; (b) receives any notice or other communication from any Governmental Authority in connection with
the Transactions; or (c) becomes aware of the commencement or threat, in writing, of any Legal Proceeding against such Party or any of
its Affiliates, or any of their respective properties or assets, or, to the Knowledge of such Party, any officer, director, partner,
member or manager, in his, her or its capacity as such, of such Party or of its Affiliates, in each case, with respect to the consummation
of the Transactions. No such notice shall constitute an acknowledgement or admission by the Party providing the notice regarding whether
or not any of the conditions to the Closing have been satisfied or in determining whether or not any of the representations, warranties
or covenants contained in this Agreement have been breached. In the event that any litigation related to this Agreement, any Ancillary
Documents or the Transactions is brought, or, to the Knowledge of the Parties, respectively, threatened, against such Party, or the board
of directors (or similar governing body) of such Party or its Subsidiaries, respectively, by a third party prior to the Closing, such
Party shall promptly notify the other Party of any such litigation and keep the other Party reasonably informed with respect to the status
thereof. Each Party shall provide the other Party the opportunity to participate in (subject to a customary joint defense agreement),
but not control, the defense of any such litigation, shall give due consideration to the other Party’s advice with respect to such
litigation and shall not settle or agree to settle any such litigation without the prior written consent of the other Party, such consent
not to be unreasonably withheld, conditioned or delayed.
6.09
Efforts.
(a) Subject
to the terms and conditions of this Agreement, each Party shall use its reasonable best efforts, and shall cooperate fully with the other
Parties, to take, or cause to be taken, all actions and to do, or cause to be done, all things reasonably necessary, proper or advisable
under applicable Laws and regulations to consummate the Transactions (including the receipt of all applicable Consents of Governmental
Authorities) and to comply as promptly as practicable with all requirements of Governmental Authorities applicable to the Transactions.
(b) In
furtherance and not in limitation of Section 6.09(a), to the extent required under any Laws that are designed to prohibit, restrict
or regulate actions having the purpose or effect of monopolization or restraint of trade or lessening of competition through merger or
acquisition (“Antitrust Laws”), each Party hereto agrees to make any required filing or application under Antitrust
Laws, as applicable, at such Party’s sole cost and expense (except that any fees or other amounts charged by any Governmental Authorities
relating to such filings or applications will be split equally between the Purchaser, on the one hand, and the Company, on the other
hand), with respect to the Transactions as promptly as practicable, to supply as promptly as reasonably practicable any additional information
and documentary material that may be reasonably requested pursuant to Antitrust Laws and to take all other actions reasonably necessary,
proper or advisable to cause the expiration or termination of the applicable waiting periods under Antitrust Laws as soon as practicable,
including by requesting early termination of the waiting period provided for under the Antitrust Laws. Each Party shall, in connection
with its efforts to obtain all requisite approvals and authorizations for the Transactions under any Antitrust Law, use its commercially
reasonable efforts to: (i) cooperate in all respects with each other Party or its Affiliates in connection with any filing or submission
and in connection with any investigation or other inquiry, including any proceeding initiated by a private Person; (ii) keep the other
Parties reasonably informed of any communication received by such Party or its Representatives from, or given by such Party or its Representatives
to, any Governmental Authority and of any communication received or given in connection with any proceeding by a private Person, in each
case regarding any of the Transactions; (iii) permit a Representative of the other Parties and their respective outside counsel to review
any communication given by it to, and consult with each other in advance of any meeting or conference with, any Governmental Authority
or, in connection with any proceeding by a private Person, with any other Person, and to the extent permitted by such Governmental Authority
or other Person, give a Representative or Representatives of the other Parties the opportunity to attend and participate in such meetings
and conferences; (iv) in the event a Party’s Representative is prohibited from participating in or attending any meetings or conferences,
the other Parties shall keep such Party promptly and reasonably apprised with respect thereto; and (v) use reasonable best efforts to
cooperate in the filing of any memoranda, white papers, filings, correspondence or other written communications explaining or defending
the Transactions, articulating any regulatory or competitive argument, and/or responding to requests or objections made by any Governmental
Authority.
(c) As
soon as reasonably practicable following the date of this Agreement, the Parties shall reasonably cooperate with each other and use (and
shall cause their respective Affiliates to use) their respective reasonable best efforts to prepare and file with Governmental Authorities
any requests for approval, to the extent required, of the Transactions and shall use their reasonable best efforts to have such Governmental
Authorities approve the Transactions. Each Party shall give prompt written notice to the other Parties if such Party or any of its Representatives
receives any notice from such Governmental Authorities in connection with the Transactions, and shall promptly furnish the other Parties
with a copy of such Governmental Authority notice. If any Governmental Authority requires that a hearing or meeting be held in connection
with its approval of the Transactions, whether prior to the Closing or after the Closing, each Party shall arrange for Representatives
of such Party to be present for such hearing or meeting. If any objections are asserted with respect to the Transactions under any applicable
Law or if any Legal Proceeding is instituted (or threatened to be instituted) by any applicable Governmental Authority or any private
Person challenging any of the Transactions or any Ancillary Document as violative of any applicable Law or which would otherwise prevent,
materially impede or materially delay the consummation of the Transactions, the Parties shall use their reasonable best efforts to resolve
any such objections or Legal Proceedings so as to timely permit consummation of the Transactions, including in order to resolve such
objections or Legal Proceedings which, in any case if not resolved, could reasonably be expected to prevent, materially impede or materially
delay the consummation of the Transactions. In the event any Legal Proceeding is instituted (or threatened to be instituted) by a Governmental
Authority or private Person challenging the Transactions, the Parties shall, and shall cause their respective Representatives to, reasonably
cooperate with each other and use their respective commercially reasonable efforts to contest and resist any such Legal Proceeding and
to have vacated, lifted, reversed or overturned any Order, whether temporary, preliminary or permanent, that is in effect and that prohibits,
prevents or restricts consummation of the Transactions.
(d) Prior
to the Closing, each Party shall use its reasonable best efforts to obtain any Consents of Governmental Authorities or other third Persons
as may be necessary for the consummation by such Party or its Affiliates of the Transactions or required as a result of the execution
or performance of, or consummation of the Transactions by such Party or its Affiliates, and the other Parties shall provide reasonable
cooperation in connection with such efforts.
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6.10 Trust
Account. Upon satisfaction or waiver of the conditions set forth in Article VII and provision of notice thereof to the
Trustee (which notice Purchaser shall provide to the Trustee in accordance with the terms of the Trust Agreement), (i) in accordance
with and pursuant to the Trust Agreement, Purchaser (a) shall cause any documents, opinions and notices required to be delivered to the
Trustee pursuant to the Trust Agreement to be so delivered and (b) shall use its reasonable best efforts to cause the Trustee to, and
the Trustee shall thereupon be obligated to (1) pay as and when due all amounts payable to the Purchaser Shareholders pursuant to the
Redemption, and (2) pay all remaining amounts then available in the Trust Account to Purchaser for immediate use, subject to this Agreement
and the Trust Agreement, and (ii) thereafter, the Trust Account shall terminate, except as otherwise provided therein.
6.11
Tax Matters.
(a) The
Parties hereby agree and acknowledge that, for U.S. federal, and applicable state and local, income Tax purposes, it is intended that
the relevant portions of the Transactions qualify for their respective Intended Tax Treatments, and that this Agreement constitutes,
and hereby is adopted as, a “plan of reorganization” within the meaning of Treasury Regulations Sections 1.368-2(g) and 1.368-3(a)
for purposes of Sections 354, 361 and 368 of the Code and the Treasury Regulations promulgated thereunder. No Party shall knowingly take
or knowingly cause to be taken, or knowingly fail to take or knowingly cause to be failed to be taken, any action, if such action or
failure to act, as the case may be, would reasonably be expected to prevent or impede the relevant portions of the Transactions from
qualifying for their respective Intended Tax Treatments. The Parties hereby agree to file all Tax Returns on a basis consistent with
the Intended Tax Treatments unless otherwise required pursuant to a “determination” within the meaning of Section 1313(a)
of the Code or a change in applicable Law. Each Party agrees to use reasonable best efforts to promptly notify all other Parties of any
challenge to the qualification of any relevant portion of the Transactions for its Intended Tax Treatment by any Governmental Authority.
(b) Notwithstanding
anything to the contrary herein, if the SEC requires that a Tax opinion be prepared and submitted in connection with the Proxy Statement/Registration
Statement and any other filings to be made with the SEC in connection with the Transactions, whether as an exhibit to the Proxy Statement/Registration
Statement or otherwise, and if such a Tax opinion is being provided by a Tax counsel, the Parties hereto shall, and shall cause their
Affiliates to, (i) reasonably cooperate in order to facilitate the issuance of any such Tax opinion and (ii) deliver to such counsel,
to the extent requested by such counsel, a duly executed certificate reasonably satisfactory to such Party and such counsel dated as
of the date requested by such counsel, containing such customary representations, warranties and covenants as shall be reasonably necessary
or appropriate to enable such counsel to render any such opinion; provided, that, notwithstanding anything herein to the contrary,
nothing in this Agreement shall require (x) any counsel to the Company or its advisors to provide an opinion with respect to any Tax
matters relating to or affecting Purchaser or the Purchaser Shareholder, including that the relevant portions of the Transactions qualify
for their respective Intended Tax Treatments and (y) any counsel to Purchaser or its advisors to provide an opinion with respect to any
Tax matters relating to or affecting the Company or the holders or beneficial owners of Company Securities, including that the relevant
portions of the Transactions qualify for their respective Intended Tax Treatments; provided, further, that neither this provision
nor any other provision in this Agreement shall require the provision of a Tax opinion by any Party’s counsel or advisors to be
an express condition precedent to the Closing.
(c) All
transfer, documentary, sales, use, stamp, excise, recording, registration, value added and other such similar Taxes and fees (including
any penalties and interest) (“Transfer Taxes”) that become payable in connection with or by reason of the Transactions
shall be borne and paid by the Company. The Company shall, at its own expense, timely file all necessary Tax Returns or other documentation
with respect to such Transfer Taxes and, if required by applicable Law, the other Parties shall join in the execution of any such Tax
Returns or other documentation.
(d)
FIRPTA Certificate.
(i) The
Company shall provide a certificate signed by an officer of the Company, prepared in a manner consistent and in accordance with the requirements
of Treasury Regulations Sections 1.897-2(g), (h) and 1.1445-2(c)(3), certifying that the Company is not, and has not been during the
relevant period specified in Section 897(c)(1)(A)(ii) of the Code, a “United States real property holding corporation” within
the meaning of Section 897(c)(2) of the Code, and that no interest in the Company is a “U.S. real property interest” within
the meaning of Section 897(c) of the Code, and a form of notice to the IRS prepared in accordance with the provisions of Treasury Regulations
Section 1.897-2(h)(2), in each case in form and substance set forth on Exhibit G.
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(ii) The
Company shall promptly notify Purchaser, and in all cases no later than seven (7) Business Days prior to the Closing, if it determines
that it will not be able to deliver such certificate and form of notice as contemplated herein, and following such notice Purchaser and
the Company shall reasonably cooperate to establish any other available exemption from withholding under Section 1445 of the Code.
(e) Following
the Closing Date, the Purchaser shall reasonably cooperate with the shareholders of the Purchaser prior to the Closing Date to make available
to any such shareholder who so requests information reasonably necessary for such shareholder (or its direct or indirect owners) to compute
any income or gain arising (i) if applicable, as a result of the Purchaser’s status as a “passive foreign investment company”
within the meaning of Section 1297(a) of the Code or a “controlled foreign corporation” within the meaning of Section 957(a)
of the Code for any taxable period ending on or prior to the Closing Date, including timely (A) publicly posting a PFIC Annual Information
Statement to enable such holders to make a "Qualifying Electing Fund" election under Section 1295 of the Code for such taxable
period, and (B) providing information to enable applicable holders to report their allocable share of “subpart F” income
under Section 951 of the Code for such taxable period, and (ii) under Section 367(b) of the Code and the Treasury Regulations promulgated
thereunder as a result of the Transactions.
6.12 Further
Assurances. The Parties hereto shall further cooperate with each other and use their respective commercially reasonable efforts
to take or cause to be taken all actions, and do or cause to be done all things, necessary, proper or advisable on their part under this
Agreement and applicable Laws to consummate the Transactions as soon as reasonably practicable, including preparing and filing as soon
as practicable all documentation to effect all necessary notices, reports and other filings and to otherwise effect, consummate, confirm
or evidence the Transactions and carry out the purposes of this Agreement.
6.13 The
Preparation of Proxy Statement/Registration Statement; Shareholders’ Meeting and Approvals.
(a)
Registration Statement and Prospectus.
(i) As
promptly as practicable after the execution of this Agreement and receipt by the Purchaser of the PCAOB Financial Statements, the Updated
1Q Financial Statements and any other audited or unaudited financial statements of the Company that are required by applicable Law to
be included in the Proxy Statement/Registration Statement, (x) the Purchaser and the Company shall jointly prepare and the Purchaser
shall file with the SEC, mutually acceptable materials (such agreement not to be unreasonably withheld, conditioned or delayed by the
Purchaser or the Company) that shall include the proxy statement to be filed with the SEC as part of the Registration Statement and sent
to the Purchaser Shareholders relating to the Purchaser Shareholders’ Meeting (such proxy statement, together with any amendments
or supplements thereto, the “Proxy Statement”), and (y) the Purchaser shall prepare (with the Company’s
and its Representatives reasonable cooperation) and file with the SEC the Registration Statement, in which the Proxy Statement will be
included as a prospectus (the “Proxy Statement/Registration Statement”), in connection with the registration
under the Securities Act of (A) the shares of Domesticated Purchaser Common Stock and Domesticated Purchaser Warrants to be issued in
exchange for the issued and outstanding Purchaser Ordinary Shares and the Cayman Purchaser Warrants, respectively, in the Domestication,
(B) the shares of Domesticated Purchaser Common Stock that constitute the Aggregate Consideration, (C) the shares of Domesticated Purchaser
Series A Preferred Stock that constitute the Convertible Note Consideration, (D) the Domesticated Purchaser Series A Investor Warrants
that constitute the Pre-Funded Convertible Note Investor Warrant Consideration, (E) the shares of Domesticated Purchaser Common Stock
issuable upon conversion of the shares of Domesticated Purchaser Series A Preferred Stock that constitute the Convertible Note Consideration,
(F) the shares of Domesticated Purchaser Common Stock issuable upon exercise of the Domesticated Purchaser Series A Investor Warrants
that constitute the Pre-Funded Convertible Note Investor Warrant Consideration, and (G) the shares of Domesticated Purchaser Common Stock
subject to the Exchanged Options (collectively, the “Registration Statement Securities”). The filing fees payable
to the SEC in connection with the Proxy Statement/Registration Statement will be split 50/50 by the Purchaser and the Company. Each of
the Purchaser and the Company shall use its reasonable best efforts to cause the Proxy Statement/Registration Statement to comply with
the rules and regulations promulgated by the SEC, to have the Registration Statement declared effective under the Securities Act as promptly
as practicable after such filing and to keep the Registration Statement effective as long as is necessary to consummate the Transactions.
The Purchaser also agrees to use its reasonable best efforts to obtain all necessary state securities law or “blue sky” permits
and approvals required to carry out the transactions contemplated hereby, and the Company shall furnish all information concerning the
Company and any of its stockholders as may be reasonably requested in connection with any such action. Each of the Purchaser and the
Company agrees to furnish to the other party all information concerning itself, its Subsidiaries, if applicable, officers, directors,
managers, stockholders, and other equityholders and information regarding such other matters as may be reasonably necessary or advisable
or as may be reasonably requested in connection with the Proxy Statement/Registration Statement, a Current Report on Form 8-K pursuant
to the Exchange Act in connection with the Transactions, or any other statement, filing, notice or application made by or on behalf of
the Purchaser or the Company to any regulatory authority (including Nasdaq) in connection with the Transactions (the “Offer
Documents”).
(ii) To
the extent not prohibited by Law, the Purchaser will advise the Company, reasonably promptly after the Purchaser receives notice thereof,
of the time when the Proxy Statement/Registration Statement has become effective or any supplement or amendment has been filed, of the
issuance of any stop order or the suspension of the qualification of the Domesticated Purchaser Common Stock for offering or sale in
any jurisdiction, of the initiation or written threat of any proceeding for any such purpose, or of any request by the SEC for the amendment
or supplement of the Proxy Statement/Registration Statement or for additional information. To the extent not prohibited by Law, the Company
and their counsel shall be given a reasonable opportunity to review and comment on the Proxy Statement/Registration Statement and any
Offer Document each time before any such document is filed with the SEC, and the Purchaser shall give reasonable and good faith consideration
to any comments made by the Company and its counsel. To the extent not prohibited by Law, the Purchaser shall provide the Company and
their counsel with (i) any comments or other communications, whether written or oral, that the Purchaser or its counsel may receive from
time to time from the SEC or its staff with respect to the Proxy Statement/Registration Statement or Offer Documents promptly after receipt
of those comments or other communications and (ii) a reasonable opportunity to participate in the response of the Purchaser to those
comments and to provide comments on that response (to which reasonable and good faith consideration shall be given), including by participating
with the Company or its counsel in any discussions or meetings with the SEC.
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(iii) Each
of the Purchaser and the Company shall use reasonable best efforts to ensure that none of the information supplied by or on its behalf
for inclusion or incorporation by reference in (A) the Proxy Statement/Registration Statement will, at the time the Proxy Statement/Registration
Statement is filed with the SEC, at each time at which it is amended and at the time it becomes effective under the Securities Act, contain
any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements
therein, not misleading or (B) the Proxy Statement will, at the date it is first mailed to the Purchaser Shareholders and at the time
of the Purchaser Shareholders’ Meeting, contain any untrue statement of a material fact or omit to state any material fact required
to be stated therein or necessary in order to make the statements therein, in light of the circumstances under which they are made, not
misleading.
(iv) If
at any time prior to the Closing any information relating to the Company, the Purchaser or any of Purchaser’s Subsidiaries, Affiliates,
directors or officers is discovered by the Company or the Purchaser, which is required to be set forth in an amendment or supplement
to the Proxy Statement or the Proxy Statement/Registration Statement, so that neither of such documents would include any misstatement
of a material fact or omit to state any material fact necessary to make the statements therein, with respect to the Proxy Statement,
in light of the circumstances under which they were made, not misleading, the party which discovers such information shall promptly notify
the other parties and an appropriate amendment or supplement describing such information shall be promptly filed with the SEC and, to
the extent required by Law, disseminated to the Purchaser Shareholders.
(b) Purchaser
Shareholder Approval. The Purchaser shall (a) as promptly as practicable after the Proxy Statement/Registration Statement is declared
effective under the Securities Act, (i) cause the Proxy Statement to be disseminated to Purchaser Shareholders in compliance with applicable
Law, (ii) solely with respect to the following clause (1), duly (1) give notice of and (2) convene and hold an extraordinary general
meeting of Purchaser Shareholders (the “Purchaser Shareholders’ Meeting”) in accordance with the Purchaser’s
Organizational Documents and applicable Law, for a date no later than thirty (30) Business Days following the date the Registration Statement
is declared effective, and (iii) solicit proxies from the holders of Purchaser Ordinary Shares to vote in favor of each of the Transaction
Proposals, and (b) provide its public shareholders with the opportunity to elect to effect a Redemption in conjunction with the shareholder
vote on the Transaction Proposals. The Purchaser shall, through its board of directors, recommend to the Purchaser Shareholders (A) to
approve, as an ordinary resolution, this Agreement and the transactions contemplated hereby or referred to herein, including the Domestication
and the Merger, in accordance with applicable Law and exchange rules and regulations, (B) to approve, as a special resolution passed
by the holders of the Purchaser Class B Ordinary Shares entitled to vote thereon, the Domestication, (C) to approve, as a special resolution,
adoption of the Purchaser Charter upon Domestication and the Purchaser Bylaws upon Domestication, (D) to approve, as an ordinary resolution,
the issuance of shares of Domesticated Purchaser Common Stock, shares of Domesticated Purchaser Series A Preferred Stock and Domesticated
Purchaser Series A Investor Warrants as required by Nasdaq Listing Rule 5635, (E) to approve, as an ordinary resolution, the adoption
by the Purchaser of the Equity Incentive Plan, (F) to approve, as an ordinary resolution, the appointment of the director nominees in
accordance with Section 6.18 of this Agreement, (G) to approve, as an ordinary resolution (or, if required by applicable Law or
the Purchaser's Organizational Documents, as a special resolution), any other proposals as the SEC (or staff member thereof) may indicate
are necessary in its comments to the Registration Statement or correspondence related thereto, (H) to approve, as an ordinary resolution
(or, if required by applicable Law or the Purchaser’s Organizational Documents, as a special resolution), any other proposals as
reasonably agreed by the Purchaser and the Company to be necessary or appropriate in connection with the Transactions, and (I) to approve,
as an ordinary resolution, the adjournment of the Purchaser Shareholders’ Meeting to a later date or dates, if necessary or convenient,
in the reasonable determination of the chairman of the Purchaser (x) to permit further solicitation and vote of proxies in the event
that there are insufficient votes for any of the foregoing, (y) if the Purchaser determines that one or more of the conditions to Closing
is not or will not be satisfied or waived or (z) to facilitate the Domestication, the Merger or any other Transaction (such proposals
in (A) through (H), together, the “Transaction Proposals”), and include such recommendation in the Proxy Statement.
The board of directors of Purchaser shall not, except as required by applicable Law, withdraw, amend, qualify or modify its recommendation
to the Purchaser Shareholders that they vote in favor of the Transaction Proposals (together with any withdrawal, amendment, qualification
or modification of its recommendation to the Purchaser Shareholders described in the Recitals hereto, a “Modification in
Recommendation”). To the fullest extent permitted by applicable Law, (x) the Purchaser’s obligations to establish
a record date for, duly call, give notice of, convene and hold the Purchaser Shareholders’ Meeting shall not be affected by any
Modification in Recommendation, (y) the Purchaser agrees to establish a record date for, duly call, give notice of, convene and hold
the Purchaser Shareholders’ Meeting and submit for approval the Transaction Proposals and (z) the Purchaser agrees that if the
Purchaser Shareholder Approval shall not have been obtained at any such Purchaser Shareholders’ Meeting, then the Purchaser shall
promptly continue to take all such necessary actions, including the actions required by this Section 6.13(b), and hold additional
Purchaser Shareholders’ Meetings in order to obtain the Purchaser Shareholder Approval provided, that, the Purchaser may
make one or more successive postponements or, with the consent of the Purchaser Shareholders' Meeting, adjournments of the Purchaser
Shareholders' Meeting, subject to applicable Law and the Purchaser Organizational Documents; provided that when the Purchaser Shareholders'
Meeting is postponed or adjourned for thirty days or more, notice of the postponed or adjourned meeting shall be given as in the case
of an original meeting.
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(c)
Company Stockholder Approvals.
(i) Upon
the terms set forth in this Agreement, the Company shall use its reasonable best efforts to solicit and obtain the Company Stockholder
Approval in the form of an irrevocable written consent (the “Written Consent”) of each of the Stockholders pursuant
to the terms of the Stockholder Support Agreement promptly following the time at which the Registration Statement shall have been declared
effective under the Securities Act and delivered or otherwise made available to the Stockholders. The Company shall provide the Purchaser
with copies of each Written Consent it receives within two (2) Business Days following receipt of such Written Consent.
(ii) To
the extent the Company Stockholder Approval is not delivered pursuant to Section 6.13(c)(i) within three (3) Business Days following
the effectiveness of the Registration Statement (as declared effective under the Securities Act), then the Company shall take all action
necessary to duly call, given notice, convene and hold a meeting of the Stockholders of the Company as soon as practicable, and, in connection
therewith, the Company shall (a) mail an information statement and proxy solicitation which shall include, without limitation, the Registration
Statement in advance of such meeting for the purpose of soliciting from the Stockholders of the Company proxies to vote in favor of the
adoption of this Agreement and approval of the Transactions; and (b) use its reasonable best efforts to secure the vote or consent of
the Stockholders of the Company required by applicable Law to obtain such approval. The Company shall keep the Purchaser updated with
respect to proxy solicitation results as requested by the Purchaser. Once the Stockholder meeting of the Company has been duly called
and noticed, the Company shall not postpone or adjourn such Stockholder meeting without the consent of the Purchaser (other than: (i)
in order to obtain a quorum of Stockholders of the Company; or (ii) as reasonably determined by the Company to comply with applicable
Law). The Company shall use its reasonable best efforts to cooperate with the Purchaser to hold the Stockholder meeting of the Company
prior to, or, on the same day and at the same time as the Purchaser Shareholders’ Meeting as soon as reasonably practicable after
the date of this Agreement, and to set the same record date for each such meeting.
6.14
Employee Matters.
(a) The
Purchaser and the Company shall use their commercially reasonable efforts to agree to a form of equity incentive plan that provides for
grants of equity-based incentive of awards to eligible service providers of the Company (the “Equity Incentive Plan”),
such agreement by either Party not to be unreasonably withheld, conditioned or delayed; provided, however, that maximum number of shares
of Domesticated Purchaser Common Stock issuable thereunder immediately following the consummation of the Transactions shall not be less
than twelve percent (12%) of the Purchaser Fully Diluted Capitalization at that time (the “EIP Limit”). If
such Equity Incentive Plan is in agreed form prior to the effective date of the Registration Statement, the Purchaser shall, prior to
the Closing Date, adopt such Equity Incentive Plan and submit it for approval of the Purchaser’s Shareholders at the Purchaser
Shareholders’ Meeting. The Purchaser and the Company shall determine the initial award grants that shall be granted to eligible
service providers identified by the Company and agreed to by the Purchaser as soon as reasonably practicable following the Effective
Time and in a form of award agreement, in each case, as mutually agreed between the Purchaser and the Company based upon benchmarking
against peer public companies (taking into account employee hiring needs and the development stage nature of the Company) and in consultation
with an independent outside compensation advisor, such agreement by either Party not to be unreasonably withheld, conditioned or delayed.
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(b) Notwithstanding
anything herein to the contrary, each of the parties to this Agreement acknowledges and agrees that all provisions contained in this Section
6.14 are included for the sole benefit of Purchaser and the Company, and that nothing in this Agreement, whether express or
implied, (i) shall be construed to establish, amend, or modify any employee benefit plan, program, agreement or arrangement, (ii)
shall limit the right of Purchaser, the Company or their respective Affiliates to amend, terminate or otherwise modify any Company
Benefit Plan or other employee benefit plan, agreement or other arrangement following the Closing Date, or (iii) shall confer upon
any Person who is not a party to this Agreement (including any equityholder, any current or former director, manager, officer,
employee or independent contractor of the Company, or any participant in any Company Benefit Plan or other employee benefit plan,
agreement or other arrangement (or any dependent or beneficiary thereof)), any right to continued or resumed employment or recall,
any right to compensation or benefits, or any third-party beneficiary or other right of any kind or nature whatsoever.
6.15
Public Announcements.
(a) The
Parties agree that during the Interim Period no public release, filing or announcement concerning this Agreement or the Ancillary Documents
or the transactions contemplated hereby or thereby shall be issued by any Party or any of their Affiliates without the prior written
consent of the Purchaser and the Company (which consent shall not be unreasonably withheld, conditioned or delayed), except as such release
or announcement may be required by applicable Law or the rules or regulations of any securities exchange, in which case the applicable
Party shall use commercially reasonable efforts to allow the other Parties reasonable time to comment on, and arrange for any required
filing with respect to, such release or announcement in advance of such issuance.
(b) The
Parties shall mutually agree upon and, as promptly as practicable after the execution of this Agreement, issue a press release announcing
the execution of this Agreement (the “Signing Press Release”). Promptly after the issuance of the Signing Press
Release (but in any event within four (4) Business Days after the execution of this Agreement), the Purchaser shall file a current report
on Form 8-K (the “Signing Filing”) with the Signing Press Release and a description of this Agreement as required
by Federal Securities Laws, which the Company shall review, comment upon and approve (which approval shall not be unreasonably withheld,
conditioned or delayed) prior to filing. The Parties shall mutually agree upon and, as promptly as practicable after the Closing, issue
a press release announcing the consummation of the transactions contemplated by this Agreement (the “Closing Press Release”).
Promptly after the issuance of the Closing Press Release (but in any event within four (4) Business Days after the Closing), the Purchaser
shall file a current report on Form 8-K (the “Closing Filing”) with the Closing Press Release and a description
of the Closing as required by Federal Securities Laws which the Purchaser shall review, comment upon and approve (which approval shall
not be unreasonably withheld, conditioned or delayed) prior to filing. In connection with the preparation of the Signing Press Release,
the Signing Filing, the Closing Filing, the Closing Press Release, or any other report, statement, filing notice or application made
by or on behalf of a Party to any Governmental Authority or other third party in connection with the transactions contemplated hereby,
each Party shall, upon request by any other Party, furnish the Parties with all information concerning themselves, their respective directors,
officers and equity holders, and such other matters as may be reasonably necessary or advisable in connection with the transactions contemplated
hereby, or any other report, statement, filing, notice or application made by or on behalf of a Party to any third party or any Governmental
Authority in connection with the transactions contemplated hereby.
6.16 Confidential
Information. (a) The Company hereby agrees that during the Interim Period and, in the event that this Agreement is terminated
in accordance with Article VIII, for a period of two (2) years after such termination, it shall, and shall cause its Affiliates
and its and their respective Representatives to, except to the extent otherwise consented to by Purchaser: (i) treat and hold in strict
confidence any Purchaser Confidential Information, and will not use for any purpose (except in connection with the consummation of the
Transactions, performing their obligations hereunder or thereunder, enforcing their rights hereunder or thereunder, or in furtherance
of their authorized duties on behalf of the Purchaser), nor directly or indirectly disclose, distribute, publish, disseminate or otherwise
make available to any third party any of the Purchaser Confidential Information without the Purchaser’s prior written consent;
and (ii) in the event that the Company or any of its Affiliates or its or their respective Representatives, during the Interim Period
or, in the event that this Agreement is terminated in accordance with Article VIII, for a period of two (2) years after such termination,
becomes legally obligated to disclose any Purchaser Confidential Information, (A) provide the Purchaser, to the extent legally permitted,
with prompt written notice of such requirement so that the Purchaser or an Affiliate thereof may seek, at the Purchaser’s sole
cost and expense, a protective Order or other remedy or waive compliance with this Section (a), and (B) in the event that such
protective Order or other remedy is not obtained, or the Purchaser waives compliance with this Section (a) furnish only that portion
of such Purchaser Confidential Information; provided, that with respect to Purchaser Confidential Information constituting trade secrets
under applicable Law and has been identified as such to the Company in writing prior to or promptly after its disclosure to the Company
or its Representatives, such covenants shall apply for as long as such Purchaser Confidential Information constitutes a trade secret
under applicable Law and continues to constitute Purchaser Confidential Information under this Agreement. In the event that this Agreement
is terminated and the transactions contemplated hereby are not consummated, the Company shall, and shall cause its Representatives to,
promptly deliver to the Purchaser or destroy (at the Purchaser’s election) any and all copies (in whatever form or medium) of Purchaser
Confidential Information and destroy all notes, memoranda, summaries, analyses, compilations and other writings related thereto or based
thereon; provided, however, that the Company, its Affiliates and its and their respective Representatives shall be entitled to keep any
records required by (i) applicable Law or (ii) legal, fiduciary or professional obligation, (iii) in accordance with written document
retention policies and procedures and/or (iv) contained in any electronic file created pursuant to bona fide backup storage or archival
processes in the ordinary course of business; and provided, further, that any Purchaser Confidential Information that is not returned
or destroyed shall remain subject to the confidentiality obligations set forth in this Agreement.
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(b)
The Purchaser and Merger Sub hereby agree that during the Interim Period and, in the event that this Agreement is terminated in accordance
with Article VIII, for a period of two (2) years after such termination, they shall, and shall cause their respective Affiliates
and their Representatives to, except to the extent otherwise consented to by the Company: (i) treat and hold in strict confidence any
Company Confidential Information, and will not use for any purpose (except in connection with the consummation of the Transactions, performing
its obligations hereunder or thereunder or enforcing its rights hereunder or thereunder), nor directly or indirectly disclose, distribute,
publish, disseminate or otherwise make available to any third party any of the Company Confidential Information without the Company’s
prior written consent; and (ii) in the event that the Purchaser, Merger Sub or any of its Representatives, during the Interim Period
or, in the event that this Agreement is terminated in accordance with Article VIII, for a period of two (2) years after such termination,
becomes legally obligated to disclose any Company Confidential Information, (A) provide the Company to the extent legally permitted with
prompt written notice of such requirement so that the Company may seek, at the Company’s sole cost and expense, a protective Order
or other remedy or waive compliance with this Section 6.16(b) and (B) in the event that such protective Order or other remedy
is not obtained, or the Company waives compliance with this Section 6.16(b), furnish only that portion of such Company Confidential
Information which is legally required to be provided as advised in writing by outside counsel and to exercise its commercially reasonable
efforts to obtain assurances that confidential treatment will be accorded such Company Confidential Information; provided, that with
respect to Company Confidential Information constituting trade secrets under applicable Law and that has been identified as such to the
Purchaser in writing prior to or promptly after its disclosure to the Purchaser or its Representatives, such covenants shall apply for
as long as such Company Confidential Information constitutes a trade secret under applicable Law and continues to constitute Company
Confidential Information under this Agreement. In the event that this Agreement is terminated and the transactions contemplated hereby
are not consummated, the Purchaser shall, and shall cause its Representatives to, promptly deliver to the Company or destroy (at the
Purchaser’s election) any and all copies (in whatever form or medium) of Company Confidential Information and destroy all notes,
memoranda, summaries, analyses, compilations and other writings related thereto or based thereon; provided, however, that the Purchaser,
Merger Sub and their respective Affiliates and Representatives shall be entitled to keep any records required by applicable Law or legal,
fiduciary or professional obligation, in accordance with written document retention policies and procedures and/or contained in any electronic
file created pursuant to bona fide backup storage or archival processes in the ordinary course of business; and provided, further, that
any Company Confidential Information that is not returned or destroyed shall remain subject to the confidentiality obligations set forth
in this Agreement. Notwithstanding the foregoing, (i) the Purchaser, Merger Sub and their respective Representatives shall be permitted
to disclose any and all Company Confidential Information to the extent required by the Federal Securities Laws, (ii) no notice or further
action shall be required in respect of disclosure of the Company Confidential Information (or provision of access thereto) to regulatory
authorities or self-regulatory organizations having authority over the Purchaser, Merger Sub or their respective Representatives in connection
with routine regulatory examinations or pursuant to statutory requirements that are not targeted at the Company, the Transactions or
the Company Confidential Information.
6.17 Documents
and Information. After the Closing Date, the Purchaser and the Company shall, and Purchaser shall cause its Subsidiaries to,
until the seventh (7th) anniversary of the Closing Date, retain all books, records and other documents pertaining to the business
of the Company in existence on the Closing Date and make the same available for inspection and copying by the Purchaser during normal
business hours of the Company, as applicable, upon reasonable request and upon reasonable notice. No such books, records or documents
shall be destroyed after the seventh (7th) anniversary of the Closing Date by the Purchaser or its Subsidiaries (including
the Company) without first advising a representative of the Sponsor (or its successors or assigns) in writing and giving such representative
a reasonable opportunity to obtain possession thereof.
6.18
Post-Closing Board of Directors and Executive Officers.
(a) The
Parties shall take all necessary action, including the Purchaser causing the directors of the Purchaser to resign, so that effective
as of the Closing, the Purchaser’s board of directors (the “Post-Closing Purchaser Board”) will consist
of seven individuals (appointed in accordance and such that, as of the Closing, the Post-Closing Purchaser Board shall comply with Nasdaq
rules). Immediately after the Closing, the Parties shall take all necessary action to designate and appoint to the Post-Closing Purchaser
Board (i) the one (1) Person that is designated by the Purchaser prior to the Closing (the “Designated Director”),
and (ii) the remaining Persons, all of whom will be designated by the Company prior to the Closing. To the extent Designated Director
declines to serve, is unable to serve, or is anticipated to fail to meet the applicable independence and other requirements of Nasdaq
and SEC rules (as determined by Purchaser), Purchaser shall have the right to designate a replacement individual to serve as a director
on the Post-Closing Purchaser Board. At or prior to the Closing, the Company, if requested, and the Purchaser shall provide each initial
director with a customary director indemnification agreement, in form and substance reasonably acceptable to such director, the Company
and the Purchaser.
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(b) The
composition of the Post-Closing Purchaser Board shall satisfy the independence requirements under applicable Law and the relevant rules
and regulations of Nasdaq such that a majority of the members of the Post-Closing Purchaser Board will be independent under applicable
Law and the relevant rules and regulations of Nasdaq and other requirements of Nasdaq or any other applicable U.S. national securities
exchange on which the Purchaser’s securities are listed.
6.19
Indemnification of Directors and Officers; Tail Insurance.
(a) The
Parties agree that for a period of six (6) years from the Closing Date, the Parties shall, and shall cause the Purchaser, Merger Sub,
and Company to, maintain in effect and honor the exculpation, indemnification and advancement of expenses provisions in favor of any
individual who, at or prior to the Closing, is or was a director, officer, employee or agent of the Purchaser, Merger Sub and Company,
as the case may be, or who, at the request of the Parties, as the case may be, served as a director, officer, member, manager, trustee
or fiduciary of another corporation, partnership, joint venture, trust, pension or other employee benefit plan or enterprise (collectively,
with such individual’s heirs, executors or administrator, (each, together with such Person’s heirs, executors or administrators,
a “D&O Indemnified Party”)), of the Purchaser’s, Merger Sub’s and Company’s Organizational
Documents as in effect immediately prior to the Closing Date or in any indemnification agreements of the Purchaser, Merger Sub, and Company,
on the one hand, with any D&O Indemnified Party, on the other hand, as in effect immediately prior to the Closing Date, and the Parties
shall, and shall cause the Purchaser, Merger Sub and the Company to, not amend, repeal or otherwise modify any such provisions in any
manner that would adversely affect the rights thereunder of any D&O Indemnified Party; provided, however, that all rights to indemnification
or advancement of expenses in respect of any Legal Proceedings pending or asserted or any claim made within such period shall continue
until the disposition of such Legal Proceeding or resolution of such claim. From and after the Closing Date, the Purchaser shall cause
the Company to honor, in accordance with their respective terms, each of the covenants contained in this Section 6.19 without
limit as to time.
(b) At
or prior to the Closing, the Purchaser shall purchase a non-cancellable “tail” directors’ and officers’ liability,
employment practices liability, and fiduciary liability insurance policy (the “D&O Tail”) in respect of
acts or omissions occurring prior to the Closing covering each such Person that is currently covered by a directors’ and officers’
liability, employment practices liability, or fiduciary liability insurance policy of the Purchaser and Company, on terms and conditions
with respect to coverage, deductibles and amounts no less favorable than those of such applicable policies in effect on the date of this
Agreement for the six (6) year period following the Closing. The Purchaser and the Company shall maintain the D&O Tail in full force
and effect for its full term and cause all obligations thereunder to be honored by the Company, as applicable, and no other party shall
have any further obligation to purchase or pay for such insurance pursuant to this Section 6.19.
(c) The
rights of each D&O Indemnified Party hereunder shall be in addition to, and not in limitation of, any other rights such Person may
have under the Organizational Documents of the Purchaser and/or Company, any other indemnification arrangement, any Law or otherwise.
The obligations of the Purchaser and the Company under this Section 6.19(c) shall not be terminated or modified after the Closing
in such a manner as to materially and adversely affect any D&O Indemnified Party without the prior written consent of such D&O
Indemnified Party. The provisions of this Section 6.19 shall survive the Closing and expressly are intended to benefit, and are
enforceable by, each of the D&O Indemnified Parties and his or her successors, heirs and permitted assigns, each of whom is an intended
third-party beneficiary of this Section 6.19.
(d) If
the Purchaser or, after the Closing, the Company, or any of its successors or assigns: (i) consolidates with or merges into any other
Person and shall not be the continuing or surviving entity of such consolidation or merger; or (ii) transfers or conveys all or substantially
all of its properties and assets to any Person, then, in each such case, proper provision shall be made so that the successors and assigns
of the Purchaser or the Company, as applicable, honor and assume the indemnification and obligations set forth in this Section 6.19.
6.20 PIPE
Investment. The Purchaser shall use its reasonable best efforts to satisfy the conditions of the closing obligations contained
in the subscription agreements relating to the PIPE Investment and consummate the transactions contemplated thereby.
6.21 Redemption.
In connection with the Purchaser Shareholders’ Meeting, the Purchaser agrees that it shall provide the holders of shares of Purchaser
Class A Ordinary Shares the opportunity to elect redemption of such shares of Purchaser Class A Ordinary Shares, as required by the Purchaser’s
Organizational Documents in the Redemption. Subject to receipt of the Purchaser Shareholder Approval, and at least one (1) day prior
to the Domestication, the Purchaser shall carry out the Redemption and use the proceeds held in the Trust Account to redeem the Purchaser
Class A Ordinary Shares of holders who properly exercise their right to redemption in accordance with the Purchaser’s Organizational
Documents.
6.22 Domestication.
Subject to receipt of the Purchaser Shareholder Approval, at least one (1) day prior to the Closing, the Purchaser shall, in accordance
with applicable Law, any applicable rules and regulations of the SEC, the Nasdaq and the Purchaser’s Organizational Documents,
as applicable, cause the Domestication to become effective, including by (a) filing with the Delaware Secretary of State a certificate
of domestication with respect to the Domestication, in form and substance reasonably acceptable to the Purchaser and the Company, together
with the Purchaser Charter upon Domestication, in each case, in accordance with the provisions thereof and applicable Law, and (b) completing
and making and procuring all those filings required to be made with the Cayman Registrar in connection with the Domestication.
6.23 Adoption
of Proxy Statement/Registration Statement. Within one (1) Business Day of the Closing Date, the post-Domestication Purchaser,
as the successor to the pre-Domestication Purchaser, shall file a post-effective amendment to the Proxy Statement/Registration Statement
pursuant to Rule 414(d) of the Securities Act.
6.24 Compliance.
Within a reasonable period following the Closing, and to the extent not already in place, the Company will implement risk-based compliance
measures, taking into account the Company’s business, operations and risk profile and having regard to applicable U.S. governmental
guidance,, including the adoption and implementation of adequate risk-based policies and procedures reasonably designed to ensure compliance
with (a) applicable Anti-Bribery Laws, including the internal-controls provisions imposed on issuers by the U.S. Foreign Corrupt Practices
Act of 1977, as amended; and (b) applicable Sanctions Laws and International Trade Laws. The compliance program shall be proportionate
to the Company’s actual regulatory exposure as an aviation OEM and shall not require the Company to implement controls designed
for defense contractors holding facility security clearances or classified access absent the Company’s future acquisition of such
clearances or access.
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6.25 U.S.
Citizenship. The Purchaser acknowledges that, as of the date hereof, the Company operates solely as an aircraft designer and
manufacturer and does not hold economic authority from the Department of Transportation requiring U.S. citizenship under 49 U.S.C. §
40102(a)(15). If, at any time following the Closing, the Company applies for or is required to hold economic authority or other authorization
from the Department of Transportation that requires U.S. citizenship, the Purchaser shall use commercially reasonable efforts to ensure
that the post-closing corporate structure satisfies the U.S. citizenship requirements of 49 U.S.C. § 40102(a)(15), including with
respect to voting control and beneficial ownership limitations applicable to U.S. air carriers and their affiliates. This Section
6.26 is a forward-looking covenant only and shall not be construed as a present-tense representation regarding the citizenship status
of the Purchaser or any of its stockholders.
6.26
Name Change.
(a) At
or prior to the Effective Time, but following the Purchaser Shareholders’ Meeting, the Surviving Company shall use commercially
reasonable efforts to take all necessary corporate actions, including amending its certificate of incorporation and making all required
filings with the Secretary of State of Delaware, to change its name to “Elroy Air Operating Company Inc.”, and the Parties
shall cooperate in good faith in connection therewith.
(b) The
Purchaser shall use commercially reasonable efforts to take all necessary corporate actions, including amending its certificate of incorporation
and making all required filings with the Secretary of State of Delaware, to change its name to “Elroy Air, Inc.”, effective
as soon as practicable following the Effective Time.
6.27 Type
Certification Covenant. During the Interim Period, the Company shall diligently prosecute the Type Certification Application,
including by engaging with the FAA regarding the establishment of the certification basis, continuing design and compliance activities,
conducting required testing, and responding to FAA requests for information or meetings, in each case, in a manner consistent with internationally
recognized aerospace engineering practices and applicable FAA policies and guidance. The Purchaser acknowledges that type certification
timelines are subject to FAA processes, resource allocation, and requirements that are not within the sole control of the Company. Nothing
in this Section 6.27 shall require the Company to accept onerous or commercially unreasonable conditions, special conditions,
or equivalent levels of safety findings as a condition to advancing the Type Certification Application, provided that the Company shall
consult in good faith with the Purchaser before rejecting any material FAA position on the certification basis. For the avoidance of
doubt, the certification strategy being pursued by the Company targets a Restricted Category Type Certificate under 14 C.F.R. §21.25,
using special-class criteria under §21.17(b), and no representation or covenant in this Agreement shall be construed to require
the Company to alter its certification strategy or pursue any alternative category or pathway except as may be determined by the Company
in its reasonable business judgment. The Company's obligations under this Section 6.27 are limited to actions within the Company's
reasonable control, and the Company shall not be deemed in breach of this Section 6.27 by reason of any delay, inaction, or decision
by the FAA or any other Aviation Authority. In addition, any good-faith disagreement between the Company and the FAA regarding the certification
basis, compliance methods, or technical requirements shall not constitute a breach of this Section 6.27.
ARTICLE
VII
CLOSING CONDITIONS
7.01 Conditions
to Each Party’s Obligations. The obligations of each Party to consummate the Transactions shall be subject to the satisfaction
or written waiver (where permissible) by the Company and the Purchaser of the following conditions:
(a) Required
Purchaser Shareholder Approval. The Purchaser Shareholder Approval shall have been obtained.
(b)
Company Stockholder Approval. The Company Stockholder Approval shall have been obtained.
(c) No
Adverse Law or Order. No Governmental Authority shall have enacted, issued, promulgated, enforced or entered any Law (whether
temporary, preliminary or permanent) or Order that is then in effect and which has the effect of making the Transactions or agreements
contemplated by this Agreement illegal or which otherwise prevents or prohibits consummation of the Transactions.
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(d) Governmental
Approvals. All filings with and consents of any Governmental Authority identified on Section 7.01(d) of the Company Disclosure
Letter shall have been made or obtained and shall be in full force and effect, and any waiting period (and any extension thereof) under
any Law imposed by any Governmental Authority identified on Section 7.01(d) of the Company Disclosure Letter preventing, prohibiting
or otherwise restraining the consummation of the transactions contemplated by this Agreement shall have expired or been terminated.
(e) Registration
Statement. The Registration Statement shall have been declared effective under the Securities Act by the SEC and shall remain
effective as of the Closing, and no stop order or similar order suspending the effectiveness of the Registration Statement shall have
been issued and be in effect with respect to the Registration Statement and no proceedings for that purpose shall have been initiated
or threatened by the SEC and not withdrawn.
(f) Nasdaq
Listing. The shares of Domesticated Purchaser Common Stock to be issued in connection with the Transactions shall be conditionally
approved for listing upon the Closing on Nasdaq subject to any requirement to have a sufficient number of round lot holders of the Domesticated
Purchaser Common Stock (provided that such condition shall not apply to the extent the shares of Domesticated Purchaser Common Stock
have not been conditionally approved for listing due to a failure to meet any “market value of publicly held securities”
or similarly titled requirement as a result of the Company not permitting a sufficient number of shares of Domesticated Purchaser Common
Stock to be issued to non-Affiliates pursuant to Section 2.03 to be excluded from lock-up or other contractual restriction).
(g) HSR
Approval. The statutory waiting period (and any extensions thereof) applicable to the consummation of the transactions contemplated
by this Agreement under the Hart-Scott-Rodino Antitrust Improvement Act of 1976 shall have expired or been earlier terminated.
7.02 Conditions
to Obligations of the Company. In addition to the conditions specified in Section 7.01, the obligations of the Company
to consummate the Transactions shall be subject to the satisfaction or written waiver (where permissible) by the Company of the following
conditions:
(a) Representations
and Warranties. All of the representations and warranties of the Purchaser and Merger Sub set forth in this Agreement and
in any certificate delivered by or on behalf of the Purchaser pursuant hereto shall be true and correct on and as of the date of this
Agreement and on and as of the Closing Date as if made on the Closing Date, except for (i) those representations and warranties that
address matters only as of a particular date (which representations and warranties shall have been accurate as of such date), and (ii)
any failures to be true and correct that (without giving effect to any qualifications or limitations as to materiality or Purchaser Material
Adverse Effect), individually or in the aggregate, have not had and would not reasonably be expected to have a Purchaser Material Adverse
Effect.
(b) Agreements
and Covenants. The Purchaser and Merger Sub shall have performed in all material respects all of their respective obligations
and complied in all material respects with all of their respective agreements and covenants under this Agreement to be performed or complied
with by them on or prior to the Closing Date.
(c) No
Purchaser Material Adverse Effect. No Purchaser Material Adverse Effect shall have occurred since the date of this Agreement
that is continuing.
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(d) Domestication.
The Domestication shall have been completed as provided in Section 6.22 and a time-stamped copy of the certificate issued
by the Secretary of State of the State of Delaware in relation thereto shall have been delivered to the Company.
(e) Trust
Account. Purchaser shall have made appropriate arrangements to have the net proceeds remaining in the Trust Account (after
giving effect to all Redemptions) available to Purchaser at the Closing.
(f) Board
Appointments. All action on the part of Purchaser shall have been taken by Purchaser such that the board of directors of the Purchaser
as of immediately following the Closing shall consist of the directors contemplated by Section 6.18.
(g) Amendments
to Company Warrants. Within ten (10) Business Days after the date hereof, the Company Warrants shall have been amended, restated
and/or modified, as applicable, to provide for the automatic cashless exercise of such Company Warrants as of immediately prior to the
Effective Time (in forms and on terms and conditions reasonably satisfactory to Purchaser), as provided in Section 2.01(b) and
Section 2.01(c) of this Agreement.
(h)
Closing Deliveries.
(i) OFFICER
CERTIFICATE. The Purchaser shall have delivered to the Company a certificate, dated the Closing Date, signed by an executive officer
of the Purchaser in such capacity, certifying as to the satisfaction of the conditions specified in Sections 7.02(a), 7.02(b)
and 7.02(c).
(ii) SECRETARY
CERTIFICATE. The Purchaser shall have delivered to the Company a certificate from its secretary or other executive officer certifying
as to, and attaching, (A) copies of the Purchaser’s Organizational Documents as in effect as of the Closing Date (after giving
effect to the Domestication) and (B) the resolutions of the Purchaser’s board of directors authorizing and approving the execution,
delivery and performance of this Agreement and each of the Ancillary Documents to which it is a party or by which it is bound, and the
consummation of the Transactions.
(iii)
ANCILLARY DOCUMENTS. The Purchaser shall have delivered to the Company:
(A) A
copy of the A&R Registration Rights Agreement, duly executed by the Purchaser and the Sponsor;
(B) A
copy of the Lock-up Agreements, duly executed by the Purchaser and the Sponsor, as applicable; and
(C)
PIPE Investment related documents.
7.03 Conditions
to Obligations of the Purchaser and Merger Sub. In addition to the conditions specified in Section 7.01, the obligations of
the Purchaser and Merger Sub to consummate the Merger are subject to the satisfaction or written waiver (where available) of the following
conditions:
(a) Representations
and Warranties. All of the representations and warranties of the Company set forth in this Agreement and in any certificate
delivered by or on behalf of the Company pursuant hereto shall be true and correct on and as of the date of this Agreement and on and
as of the Closing Date as if made on the Closing Date, except for (i) those representations and warranties that address matters only
as of a particular date (which representations and warranties shall have been accurate as of such date), and (ii) any failures to be
true and correct that (without giving effect to any qualifications or limitations as to materiality or Company Material Adverse Effect),
individually or in the aggregate, have not had and would not reasonably be expected to have a Company Material Adverse Effect.
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(b) Agreements
and Covenants. The Company shall have performed in all material respects all of its obligations and complied in all material
respects with all of the agreements and covenants (except for the requirement to provide the PCAOB Financial Statements and the Updated
1Q Financial Statements by the deadlines specified in Section 6.04) under this Agreement to be performed or complied with by it
on or prior to the Closing Date.
(c) No
Company Material Adverse Effect. No Company Material Adverse Effect shall have occurred with respect to the Company, since
the date of this Agreement that is continuing.
(d)
Closing Deliveries.
(i) OFFICER
CERTIFICATE. The Purchaser shall have received a certificate from the Company, dated as the Closing Date, signed by an executive
officer of the Company in such capacity, certifying as to the satisfaction of the conditions specified in Section 7.03(a), 7.03(b)
and 7.03(c).
(ii) SECRETARY
CERTIFICATE. The Company shall have delivered to the Purchaser a certificate executed by the Company’s secretary certifying
as to the validity and effectiveness of, and attaching, (A) copies of the Company’s Organizational Documents as in effect as of
the Closing Date (immediately prior to the Closing) and (B) the requisite resolutions of the Company Board authorizing and approving
the execution, delivery and performance of this Agreement and each Ancillary Document to which the Company is or is required to be a
party or bound, and the consummation of the Transactions.
(iii)
ANCILLARY DOCUMENTS. The Company shall have delivered to the Purchaser:
(A)
a copy of the A&R Registration Rights Agreement, duly executed by the applicable Stockholders;
(B) A
properly completed and duly executed IRS Form W-9 or IRS Form W-8 of the applicable series from each Stockholder; provided, that
failure to deliver the requisite tax forms shall not affect satisfaction of the conditions to closing, rather only the timing of the
issuance of such Stockholder’s share of the Aggregate Consideration to such Stockholders who has failed to return the requisite
tax forms.
(C) A
properly completed and duly executed FIRPTA certificate in the form attached hereto as Exhibit G, as contemplated by Section
6.11(d)(i).
(D) A
copy of the Seller Lock-Up Agreement, duly executed by each holder of equity securities of the Company who will receive, or would receive
upon exercise of the Exchanged Options, at least 1.0% of the Aggregate Consideration.
(e)
Closing Indebtedness. The Company shall have delivered to the Purchaser:
(i) a
duly executed pay-off letter from each of the holders of the Closing Indebtedness, in a form reasonably satisfactory to Purchaser, certifying
that all such Closing Indebtedness owing to such holder shall have been fully paid upon the receipt by such holder of funds pursuant
to Section 3.03(c) hereof, to the extent such Closing Indebtedness is paid in full pursuant to Section 3.03(c) hereof;
and
(ii) documentation
evidencing to the reasonable satisfaction of Purchaser the release of all Liens securing any Closing Indebtedness.
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7.04
Frustration of Conditions. Notwithstanding anything contained herein to the contrary, no Party may rely on the failure
of any condition set forth in this Article VII to be satisfied if such failure was caused by the failure of such Party or its
Affiliates failure to comply with or perform any of its covenants or obligations set forth in this Agreement.
ARTICLE
VIII
TERMINATION AND EXPENSES
8.01 Termination.
This Agreement may be terminated and the transactions contemplated hereby may be abandoned at any time prior to the Closing as follows:
(a)
by mutual written consent of the Purchaser and the Company;
(b)
by the Company if there has been a Modification in Recommendation;
(c) by
the Company if the Purchaser Shareholder Approval shall not have been obtained by reason of the failure to obtain the required vote at
the applicable Purchaser Shareholders’ Meeting duly convened therefor or at any adjournment or postponement thereof;
(d) by
written notice by the Purchaser or the Company if any of the conditions to the Closing set forth in Article VII have not been
satisfied or waived by June 26, 2027 (the “Outside Date”); provided, however, the right to terminate this Agreement
under this Section 8.01(d) shall not be available to a Party if the breach or violation by such Party or its Affiliates of any representation,
warranty, covenant or obligation under this Agreement was the cause of, or resulted in, the failure of the Closing to occur on or before
the Outside Date;
(e) by
written notice by either the Purchaser or the Company if a Governmental Authority of competent jurisdiction shall have issued an Order
or taken any other action permanently restraining, enjoining or otherwise prohibiting the transactions contemplated by this Agreement,
and such Order or other action has become final and non-appealable; provided, however, that the right to terminate this Agreement
pursuant to this Section 8.01(e) shall not be available to a Party if the failure by such Party or its Affiliates to comply with
any provision of this Agreement has been a substantial cause of, or substantially resulted in, such action by such Governmental Authority;
(f) by
written notice by the Company to Purchaser, if (i) there has been a breach by the Purchaser of any of its representations, warranties,
covenants or agreements contained in this Agreement, or if any representation or warranty of the Purchaser shall have become untrue or
inaccurate, in any case, which would result in a failure of a condition set forth in Section 7.02(a) or Section 7.02(b)
to be satisfied (treating the Closing Date for such purposes as the date of this Agreement or, if later, the date of such breach), and
(ii) the breach or inaccuracy is incapable of being cured or is not cured within the earlier of (A) twenty (20) days after written notice
of such breach or inaccuracy is provided to the Purchaser or (B) the Outside Date; provided, that the Company shall not have the right
to terminate this Agreement pursuant to this Section 8.01(f) if at such time the Company is in material uncured breach of this
Agreement;
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(g) by
written notice by the Purchaser to the Company, if (i) there has been a breach by the Company of any of its representations,
warranties, covenants or agreements contained in this Agreement, or if any representation or warranty of such Parties shall have
become untrue or inaccurate, in any case, which would result in a failure of a condition set forth in Section 7.03(a) to be
satisfied (treating the Closing Date for such purposes as the date of this Agreement or, if later, the date of such breach), and
(ii) the breach or inaccuracy is incapable of being cured or is not cured within the earlier of (A) twenty (20) days after written
notice of such breach or inaccuracy is provided to the Company or (B) the Outside Date; provided, that the Purchaser shall not have
the right to terminate this Agreement pursuant to this Section 8.01(g) if at such time the Purchaser is in material uncured
breach of this Agreement;
(h) by
written notice by the Purchaser to the Company, if (i) all the conditions set forth in Section 7.01 and Section 7.02 have
been, and continue to be, satisfied or waived (other than those conditions that by their nature are to be satisfied at the Closing, each
of which shall be capable of being satisfied if the Closing Date were the date of such termination), (ii) the Company fails to consummate
the Transactions on or prior to the day when the Closing is required to occur pursuant to Section 3.01, (iii) the Purchaser shall
have irrevocably confirmed in writing to the Company that it is ready, willing and able to consummate the Closing and (iv) the Company
fails to effect the Closing within five (5) Business Days following delivery of such confirmation; or
(i) by
written notice by the Company to the Purchaser, if (i) all the conditions set forth in Section 7.01 and Section 7.03 have
been, and continue to be, satisfied or waived (other than those conditions that by their nature are to be satisfied at the Closing, each
of which shall be capable of being satisfied if the Closing Date were the date of such termination), (ii) the Purchaser fails to consummate
the Transactions on or prior to the day when the Closing is required to occur pursuant to Section 3.01, (iii) the Company shall
have irrevocably confirmed in writing to the Purchaser that it is ready, willing and able to consummate the Closing and (iv) the Purchaser
fails to effect the Closing within five (5) Business Days following delivery of such confirmation.
8.02 Expenses.
Except as provided herein, all expenses incurred in connection with this Agreement and the Transactions shall be paid by the Party incurring
such expenses.
8.03 Effect
of Termination. This Agreement may only be terminated in the circumstances described in Section 8.01 and pursuant to a
written notice delivered by the applicable Party to the other applicable Parties, which sets forth the basis for such termination, including
the provision of Section 8.01 under which such termination is made. In the event of the valid termination of this Agreement pursuant
to Section 8.01, this Agreement shall forthwith become void, and there shall be no Liability on the part of any Party or any of
their respective Representatives, and all rights and obligations of each Party shall cease, except: (i) Section 6.15, Section 6.16,
Article IX, and this Section 8.03 shall survive the termination of this Agreement, and (ii) nothing herein shall relieve any
Party from Liability for any willful breach of any representation, warranty, covenant or obligation under this Agreement or any Fraud
against such Party, in either case, prior to termination of this Agreement (in each case of clauses (i) and (ii) above, subject to Section
9.15).
ARTICLE
IX
MISCELLANEOUS
9.01 No
Survival. Except (x) as otherwise contemplated by Section 8.03 or (y) for Fraud, none of the representations, warranties,
covenants, obligations or other agreements in this Agreement or in any certificate, statement or instrument delivered pursuant to this
Agreement, including any rights arising out of any breach of such representations, warranties, covenants, obligations, agreements and
other provisions, shall survive the Closing (and there shall be no liability after the Closing in respect thereof), except for those
covenants and agreements contained herein that by their terms expressly apply in whole or in part at or after the Closing, and then only
with respect to any breaches occurring at or after the Closing.
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9.02 Notices.
All notices, consents, waivers and other communications hereunder shall be in writing and shall be deemed to have been duly given (i)
when delivered in person, (ii) when delivered by facsimile or other electronic means (including email), with evidence of transmission,
(iii) one (1) Business Day after being sent, if sent by reputable, nationally recognized overnight courier service or (iv) three (3)
Business Days after being mailed, if sent by registered or certified mail, pre-paid and return receipt requested, in each case to the
applicable Party at the following addresses (or at such other address for a Party as shall be specified by like notice). Actual notice
is effective notice for all purposes hereunder.
If to the Purchaser:
with a copy (which will not constitute
notice) to:
Columbus Circle Capital Corp II
3 Columbus Circle. 24th Floor
New York, New York 10019
Attn: Gary Quin
White & Case LLP
1221 Avenue of the Americas
New York, New York 10020
Attn: Joel Rubinstein; Jason Rocha
Email: **********
Email: **********;
**********
If to the Company, to:
with a copy (which will not constitute notice) to:
Elroy Air,
Inc. 440 Eagle Ct
DLA Piper LLP (US)
3203 Hanover Street, Suite 100
Byron, CA 94514
Attn: Andrew Clare
Palo Alto, CA 94304
Attn: Josh Seidenfeld; Elena Nrtina
Email: **********
Email: **********;
**********
9.03 Binding
Effect; Assignment. This Agreement and all of the provisions hereof shall be binding upon and inure to the benefit of the Parties
and their respective successors and permitted assigns. This Agreement shall not be assigned by operation of Law or otherwise without
the prior written consent of the Parties, and any assignment without such consent shall be null and void; provided that no such
assignment shall relieve the assigning Party of its obligations hereunder.
9.04 Third
Parties. Except for the Persons granted the rights set forth in Section 6.19, which the Parties acknowledge and agree
are express third party beneficiaries of this Agreement, nothing contained in this Agreement or in any instrument or document executed
by any party in connection with the Transactions shall create any rights in, or be deemed to have been executed for the benefit of, any
Person that is not a Party hereto or thereto or a successor or permitted assign of such a Party.
9.05 Governing
Law. This Agreement, and all claims or causes of action based upon, arising out of, or related to this Agreement or the transactions
contemplated hereby, shall be governed by, and construed in accordance with, the Laws of the State of Delaware, without giving effect
to principles or rules of conflict of Laws to the extent such principles or rules would require or permit the application of Laws of
another jurisdiction, provided that, for the avoidance of doubt, the laws of the Cayman Islands shall also apply to and, as applicable,
govern the Domestication.
9.06 Jurisdiction.
Any proceeding or Legal Proceeding based upon, arising out of or related to this Agreement or the transactions contemplated hereby must
be brought in the Court of Chancery of the State of Delaware (or, to the extent such court does not have jurisdiction, in the United
States District Court for the District of Delaware and to the extent such court does not have subject matter jurisdiction, the Superior
Court of the State of Delaware), and each of the parties irrevocably (i) submits to the exclusive jurisdiction of each such court in
any such proceeding or Legal Proceeding, (ii) waives any objection it may now or hereafter have to personal jurisdiction, venue or to
convenience of forum, (iii) agrees that all claims in respect of the proceeding or Legal Proceeding shall be heard and determined only
in any such court, and (iv) agrees not to bring any proceeding or Legal Proceeding arising out of or relating to this Agreement
or the transactions contemplated hereby in any other court. Nothing herein contained shall be deemed to affect the right of any party
to serve process in any manner permitted by Law or to commence Legal Proceedings or otherwise proceed against any other party in any
other jurisdiction, in each case, to enforce judgments obtained in any Legal Proceeding, suit or proceeding brought pursuant to this
Section 9.06.
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9.07 WAIVER
OF JURY TRIAL. EACH PARTY ACKNOWLEDGES AND AGREES THAT ANY CONTROVERSY WHICH MAY ARISE UNDER THIS AGREEMENT AND THE TRANSACTIONS
CONTEMPLATED HEREBY IS LIKELY TO INVOLVE COMPLICATED AND DIFFICULT ISSUES, AND THEREFORE EACH SUCH PARTY HEREBY IRREVOCABLY, UNCONDITIONALLY
AND VOLUNTARILY WAIVES ANY RIGHT SUCH PARTY MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY ACTION, SUIT OR PROCEEDING DIRECTLY OR INDIRECTLY
ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY OF THE TRANSACTIONS CONTEMPLATED HEREBY.
9.08
Specific Performance. Each Party acknowledges that the rights of each Party to consummate the transactions contemplated
hereby are unique, recognizes and affirms that in the event of a breach of this Agreement by any Party, money damages may be inadequate
and the non-breaching Parties may have no adequate remedy at law, and agree that irreparable damage would occur in the event that any
of the provisions of this Agreement were not performed by an applicable Party in accordance with their specific terms or were otherwise
breached. Accordingly, each Party shall be entitled to seek an injunction or restraining order to prevent breaches of this Agreement
and to seek to enforce specifically the terms and provisions hereof, without the requirement to post any bond or other security or to
prove that money damages would be inadequate, this being in addition to any other right or remedy to which such Party may be entitled
under this Agreement, at law or in equity.
9.09 Severability.
In case any provision in this Agreement shall be held invalid, illegal or unenforceable in a jurisdiction, such provision shall be modified
or deleted, as to the jurisdiction involved, only to the extent necessary to render the same valid, legal and enforceable, and the validity,
legality and enforceability of the remaining provisions hereof shall not in any way be affected or impaired thereby nor shall the validity,
legality or enforceability of such provision be affected thereby in any other jurisdiction. Upon such determination that any term or
other provision is invalid, illegal or incapable of being enforced, the Parties will substitute for any invalid, illegal or unenforceable
provision a suitable and equitable provision that carries out, so far as may be valid, legal and enforceable, the intent and purpose
of such invalid, illegal or unenforceable provision.
9.10 Amendment;
Waiver. This Agreement may be amended, supplemented or modified only by execution of a written instrument signed by the Purchaser
and the Company. Any party to this Agreement may, at any time prior to the Closing, by action taken by its board of directors or managers
or other equivalent body or other officers or Persons thereunto duly authorized, (a) extend the time for the performance of the obligations
or acts of the other parties hereto, (b) waive any inaccuracies in the representations and warranties (of another party hereto) that
are contained in this Agreement or (c) waive compliance by the other parties hereto with any of the agreements or conditions contained
in this Agreement, but such extension or waiver shall be valid only if set forth in an instrument in writing signed by the party granting
such extension or waiver. Any waiver of any term or condition shall not be construed as a waiver of any subsequent breach or a subsequent
waiver of the same term or condition, or a waiver of any other term or condition of this Agreement. The failure of any party to assert
any of its rights hereunder shall not constitute a waiver of such rights.
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9.11 Entire
Agreement. This Agreement and the documents or instruments referred to herein, including any exhibits and schedules attached
hereto, which exhibits and schedules are incorporated herein by reference, together with the Ancillary Documents, embody the entire agreement
and understanding of the Parties hereto in respect of the subject matter contained herein. There are no restrictions, promises, representations,
warranties, covenants or undertakings, other than those expressly set forth or referred to herein or the documents or instruments referred
to herein, which collectively supersede all prior agreements and the understandings among the Parties with respect to the subject matter
contained herein.
9.12 Interpretation.
The table of contents and the Article and Section headings contained in this Agreement are solely for the purpose of reference, are not
part of the agreement of the Parties and shall not in any way affect the meaning or interpretation of this Agreement. In this Agreement,
unless the context otherwise requires: (a) any pronoun used shall include the corresponding masculine, feminine or neuter forms, and
words in the singular, including any defined terms, include the plural and vice versa; (b) reference to any Person includes such Person’s
successors and assigns but, if applicable, only if such successors and assigns are permitted by this Agreement, and reference to a Person
in a particular capacity excludes such Person in any other capacity; (c) any accounting term used and not otherwise defined in this Agreement
or any Ancillary Document has the meaning assigned to such term in accordance with GAAP; (d) “including” (and with correlative
meaning “include”) means including without limiting the generality of any description preceding or succeeding such term and
shall be deemed in each case to be followed by the words “without limitation”; (e) the words “herein,” “hereto,”
and “hereby” and other words of similar import shall be deemed in each case to refer to this Agreement as a whole and not
to any particular Section or other subdivision of this Agreement; (f) the word “if” and other words of similar import when
used herein shall be deemed in each case to be followed by the phrase “and only if”; (g) the term “or” means
“and/or”;(h) any reference to the term “ordinary course” or “ordinary course of business” shall be
deemed in each case to be followed by the words “consistent with past practice”; (i) any agreement, instrument, insurance
policy, Law or Order defined or referred to herein or in any agreement or instrument that is referred to herein means such agreement,
instrument, insurance policy, Law or Order as from time to time amended, modified or supplemented, including (in the case of agreements
or instruments) by waiver or consent and (in the case of statutes, regulations, rules or orders) by succession of comparable successor
statutes, regulations, rules or orders and references to all attachments thereto and instruments incorporated therein; (j) except as
otherwise indicated, all references in this Agreement to the words “Section,” “Article”, “Schedule”
and “Exhibit” are intended to refer to Sections, Articles, Schedules and Exhibits to this Agreement; and (k) the term “Dollars”
or “$” means United States dollars. Any reference in this Agreement to a Person’s directors shall include any member
of such Person’s governing body and any reference in this Agreement to a Person’s officers shall include any Person filling
a substantially similar position for such Person. Any reference in this Agreement or any Ancillary Document to a Person’s shareholders
or stockholders shall include any applicable owners of the equity interests of such Person, in whatever form, including with respect
to the Purchaser, its shareholders under the Cayman Companies Act or DGCL, as then applicable, or its Organizational Documents. The Parties
have participated jointly in the negotiation and drafting of this Agreement. Consequently, in the event an ambiguity or question of intent
or interpretation arises, this Agreement shall be construed as if drafted jointly by the Parties hereto, and no presumption or burden
of proof shall arise favoring or disfavoring any Party by virtue of the authorship of any provision of this Agreement. To the extent
that any Contract, document, certificate or instrument is represented and warranted to by the Company to be given, delivered, provided
or made available by the Company, in order for such Contract, document, certificate or instrument to have been deemed to have been given,
delivered, provided and made available to the Purchaser or its Representatives, such Contract, document, certificate or instrument shall
have been posted to the electronic data site maintained on behalf of the Company for the benefit of the Purchaser and its Representatives
and the Purchaser and its Representatives have been given access to the electronic folders containing such information.
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9.13
Counterparts. This Agreement and each Ancillary Document may be executed and delivered (including by facsimile or
other electronic transmission) in counterparts, and by the different Parties hereto in separate counterparts, each of which when executed
shall be deemed to be an original but all of which taken together shall constitute one and the same agreement.
9.14
Legal Representation.
(a)
Conflicts and Privilege.
(i) The
Purchaser and the Company, on behalf of their respective successors and assigns (including, after the Closing), hereby agree that, in
the event a dispute with respect to this Agreement or the transactions contemplated hereby arises after the Closing between or among
(x) the Sponsor, the stockholders, shareholders or holders of other equity interests of the Purchaser or the Sponsor and/or any of their
respective directors, members, partners, officers, employees or Affiliates (collectively, the “CMII Group”),
on the one hand, and (y) the Purchaser following the Closing, the Company and/or any member of the Elroy Group, on the other hand, any
legal counsel, including White & Case LLP (“W&C”), that represented the Purchaser and/or the Sponsor
prior to the Closing may represent the Sponsor and/or any other member of the CMII Group, in such dispute even though the interests of
such Persons may be directly adverse to the Purchaser and its Affiliates (following the Closing), and even though such counsel may have
represented the Purchaser in a matter substantially related to such dispute, or may be handling ongoing matters for the Purchaser and/or
the Sponsor. The Purchaser and the Company, on behalf of their respective successors and assigns (including, after the Closing), further
agree that, as to all legally privileged communications prior to the Closing (made in connection with the negotiation, preparation, execution,
delivery and performance under, or any dispute or Legal Proceeding arising out of or relating to, this Agreement, any Ancillary Document
or the transactions contemplated hereby or thereby) between or among the Purchaser, the Sponsor and/or any other member of the CMII Group,
on the one hand, and W&C, on the other hand, the attorney/client privilege and the expectation of client confidence shall survive
the Transactions and belong to the CMII Group after the Closing, and shall not pass to or be claimed or controlled by the Purchaser and
its Affiliates (following the Closing). Notwithstanding the foregoing, any privileged communications or information shared by the Company
prior to the Closing with the Purchaser or the Sponsor under a common interest agreement shall remain the privileged communications or
information of the Purchaser.
(ii) The
Purchaser and the Company, on behalf of their respective successors and assigns (including, after the Closing), hereby agree that, in
the event a dispute with respect to this Agreement or the transactions contemplated hereby arises after the Closing between or among
(x) the stockholders, shareholders or holders of other equity interests of the Company and/or any of their respective directors, members,
partners, officers, employees or Affiliates (collectively, the “Elroy Group”), on the one hand, and (y) the
Company (following the Closing) and/or any member of the CMII Group, on the other hand, any legal counsel, including DLA Piper LLP (“DLA”)
that represented the Company prior to the Closing may represent any member of the Elroy Group in such dispute even though the interests
of such Persons may be directly adverse to the Company (following the Closing), and even though such counsel may have represented the
Purchaser and/or the Company in a matter substantially related to such dispute, or may be handling ongoing matters for the Company (following
the Closing). The Purchaser and the Company, on behalf of their respective successors and assigns (including, after the Closing), further
agree that, as to all legally privileged communications prior to the Closing (made in connection with the negotiation, preparation, execution,
delivery and performance under, or any dispute or Legal Proceeding arising out of or relating to, this Agreement, any Ancillary Document
or the Transactions) between or among the Company and/or any member of the Elroy Group, on the one hand, and DLA, on the other hand,
the attorney/client privilege and the expectation of client confidence shall survive the Transactions. Notwithstanding the foregoing,
any privileged communications or information shared by the Purchaser prior to the Closing with the Company under a common interest agreement
shall remain the privileged communications or information of the Company (following the Closing).
(iii) DLA
has represented the Elroy Group with respect to the Transactions. All Parties recognize the commonality of interest that exists and will
continue to exist until the Closing, and the Parties agree that such commonality of interest should continue to be recognized after the
Closing. Specifically, the CMII Group and, following the Closing, the Company, agree that they shall not, and shall cause their Affiliates
not to, seek to have DLA be disqualified from representing (a) any member of the Elroy Group in connection with any dispute that may
arise between such parties and the CMII Group or (b) the Purchaser or the Company in connection with any dispute that may arise between
such parties and the members of the Elroy Group.
9.15 Waiver
of Claims Against Trust. The Company acknowledges that the Purchaser is a special purpose company with the powers and privileges
to effect a Business Combination. The Company further acknowledges that, as described in the IPO Prospectus available at www.sec.gov,
substantially all of the Purchaser assets consist of the cash proceeds of the Purchaser’s initial public offering and private placements
of its securities and substantially all of those proceeds have been deposited in the Trust Account for the benefit of the Purchaser,
its public shareholders and the underwriters of the Purchaser’s initial public offering. The Company acknowledges that it has been
advised by the Purchaser that, except with respect to interest earned on the funds held in the Trust Account that may be released to
the Purchaser to pay its franchise Tax, income Tax and similar obligations, the Trust Agreement provides that cash in the Trust Account
may be disbursed only (i) if the Purchaser completes the transactions which constitute a Business Combination, then to those Persons
and in such amounts as described in the IPO Prospectus; (ii) if the Purchaser fails to complete a Business Combination within the allotted
time period and liquidates, subject to the terms of the Trust Agreement, to the Purchaser in limited amounts to permit the Purchaser
to pay the costs and expenses of its liquidation and dissolution, and then to the Purchaser Shareholders; and (iii) if the Purchaser
holds a shareholder vote to amend the Purchaser’s Organizational Documents to modify the substance or timing of the obligation
to redeem 100% of the Purchaser Class A Ordinary Shares if the Purchaser fails to complete a Business Combination within the allotted
time period or to otherwise modify any other material provision of the Purchaser’s Organizational Documents relating to its shareholders’
rights or its pre-initial Business Combination activity, then for the redemption of any Purchaser Ordinary Shares properly tendered in
connection with such vote. For and in consideration of the Purchaser entering into this Agreement, the receipt and sufficiency of which
are hereby acknowledged, the Company, on behalf of itself, its Affiliates and its and their respective Representatives, hereby irrevocably
waives any right, title, interest or claim of any kind they have or may have in the future in or to any monies in the Trust Account and
agrees not to seek recourse against the Trust Account or any funds distributed therefrom to the Purchaser’s public shareholders
for any reason whatsoever; provided, that (x) nothing herein shall serve to limit or prohibit the Company’s right to pursue
a claim against the Purchaser for legal relief against monies or other assets held outside the Trust Account, for specific performance
or other equitable relief in connection with the consummation of the transactions (including a claim for the Purchaser to specifically
perform its obligations under this Agreement and cause the disbursement of the balance of the cash remaining in the Trust Account (after
giving effect to the Redemptions) to the Company in accordance with the terms of this Agreement and the Trust Agreement) so long as such
claim would not affect the Purchaser’s ability to fulfill its obligation to effectuate the redemptions and (y) nothing herein shall
serve to limit or prohibit any claims that the Company may have in the future against the Purchaser’s assets or funds that are
not held in the Trust Account (including any funds that have been released from the Trust Account other than to the Purchaser’s
public shareholders and any assets that have been purchased or acquired with any such funds).
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9.16 Company
and Purchaser Disclosure Letters. The Company Disclosure Letter and the Purchaser Disclosure Letter (including, in each case,
any section thereof) referenced herein are a part of this Agreement as if fully set forth herein. All references herein to the Company
Disclosure Letter and/or the Purchaser Disclosure Letter (including, in each case, any section thereof) shall be deemed references to
such parts of this Agreement, unless the context shall otherwise require. Any disclosure made by a party in the applicable Disclosure
Letter, or any section thereof, with reference to any section of this Agreement or section of the applicable Disclosure Letter shall
be deemed to be a disclosure with respect to such other applicable sections of this Agreement or sections of applicable Disclosure Letter
if it is reasonably apparent on the face of such disclosure that such disclosure is responsive to such other section of this Agreement
or section of the applicable Disclosure Letter. Certain information set forth in the Disclosure Letters is included solely for informational
purposes and may not be required to be disclosed pursuant to this Agreement. The disclosure of any information shall not be deemed to
constitute an acknowledgment that such information is required to be disclosed in connection with the representations and warranties
made in this Agreement, nor shall such information be deemed to establish a standard of materiality.
ARTICLE
X
DEFINITIONS
10.01
Certain Definitions. For purpose of this Agreement, the following capitalized terms have the following meanings:
“A&R
Registration Rights Agreement” has the meaning specified in the Recitals. “Acquisition Proposal”
has the meaning specified in Section 6.06(a).
“Additional
Purchaser SEC Reports” has the meaning specified in Section 5.06(a).
“Affiliate”
means, with respect to any specified Person, any Person that, directly or indirectly, controls, is controlled by, or is under common
control with, such specified Person, whether through one or more intermediaries or otherwise. The term “control” (including
the terms “controlling”, “controlled by” and “under common control with”) means the possession, directly
or indirectly, of the power to direct or cause the direction of the management and policies of a Person, whether through the ownership
of voting securities, by Contract or otherwise.
“Aggregate
Common Stock Base Consideration” means the number of shares of Domesticated Purchaser Common Stock equal to the quotient
of: (a) (i) the Base Purchase Price, minus (ii) the Closing Indebtedness except as set forth in Schedule 10-A of the Company
Disclosure Letter, in each case excluding any Indebtedness incurred pursuant to the Pre-Funded Note Investment, divided by (b)
the Redemption Price, less (c) the aggregate number of shares of Domesticated Purchaser Common Stock issuable in respect of the
Preferred Stock Preference Exchange and the Preferred Stock As-Converted Exchange pursuant to Section 2.03(a)(iii).
“Aggregate
Consideration” means the Aggregate Common Stock Base Consideration, the Aggregate Preferred Stock Consideration and the
Aggregate Earn-out Consideration.
“Aggregate
Earn-out Consideration” has the meaning specified in Section 2.09(a).
“Aggregate
Preferred Stock Consideration” has the meaning specified in Section 2.02(c).
“Agreement”
has the meaning specified in the Preamble.
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“AI/ML”
means any and all deep learning, machine learning, and other artificial intelligence technologies, including any software algorithms,
neural networks, large language models, generative AI, or models that process or analyze input data, learn from that data, generate outputs,
make decisions or predictions, automate tasks, or otherwise mimic, augment, or substitute human cognitive functions.
“Alternative
Transaction” has the meaning specified in Section 6.06(a).
“Ancillary
Documents” means each of the agreements and instruments contemplated by this Agreement or otherwise related to the transactions
contemplated in this Agreement, in each case to be executed and delivered on the date hereof or on or prior to the Closing Date, including
this Agreement (together with the Company Disclosure Letter and the Purchaser Disclosure Letter).
“Anti-Bribery
Law” means the U.S. Foreign Corrupt Practices Act of 1977, as amended; the UK Bribery Act 2010, and any rules or regulations
promulgated thereunder; the Organisation for Economic Co-operation and Development Convention on Combating Bribery of Foreign Public
Officials in International Business Transactions and related implementing legislation; and any similar anti-corruption or anti-bribery
Law applicable to the Company.
“Antitrust
Laws” has the meaning specified in Section 6.09(b).
“Applicable
Pre-Funded Convertible Note Conversion Price” means $12 per share, as may be adjusted pursuant to the terms and conditions
of the applicable Pre-Funded Convertible Notes.
“Approvals”
has the meaning specified in Section 4.09.
“Aviation
Authority” means the Federal Aviation Administration, the Department of Transportation, the National Transportation Safety
Board, or any foreign civil aviation authority or equivalent Governmental Authority having jurisdiction over the design, manufacture,
certification, registration, operation or export of aircraft, unmanned aircraft systems, or aviation products.
“Aviation
Authorizations Schedule” has the meaning specified in Section 4.09(b).
“Aviation
Customer Agreements” has the meaning specified in Section 4.13(a)(xix).
“Base
Purchase Price” means $800,000,000.
“Business
Combination” has the meaning specified in Article 1.1 of the Purchaser’s Organizational Documents as in effect on
the date hereof.
“Business
Day” means a day other than a Saturday, Sunday or other day on which commercial banks in New York, New York or, for so
long as the Purchaser remains domiciled in the Cayman Islands, Governmental Authorities in the Cayman Islands that are authorized or
required by Law to close.
“CARES
Act” means the Coronavirus, Aid, Relief and Economic Security Act, Pub. L. 116-136 (116th Cong.) (Mar. 27, 2020), and any
amendment thereof, successor law, or executive order, executive memo, administrative or other guidance or legislation published with
respect thereto by any Governmental Authority.
“Cayman
Companies Act” has the meaning specified in the Recitals.
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“Cayman
Purchaser Private Placement Warrants” means the warrants to purchase Purchaser Class A Ordinary Shares, at an initial exercise
price of $11.50 per share, purchased by the Sponsor concurrently with the Purchaser’s IPO.
“Cayman
Purchaser Public Warrants” means the warrants to purchase Purchaser Class A Ordinary Shares, at an initial exercise price
of $11.50 per share, included in the Cayman Purchaser Units sold in the Purchaser’s IPO.
“Cayman
Purchaser Units” has the meaning specified in the Recitals.
“Cayman
Purchaser Warrant” has the meaning specified in the Recitals.
“Cayman
Registrar” means the Registrar of Companies of the Cayman Islands.
“Certificate
of Merger” has the meaning specified in the Recitals.
“Change
of Control” means any transaction or series of transactions the result of which is: (a) the acquisition by any Person or
“group” (as defined in the Exchange Act) of Persons of direct or indirect beneficial ownership of securities representing
50% or more of the combined voting power of the then outstanding securities of the Purchaser; (b) a merger, consolidation, reorganization
or other business combination, however effected, resulting in any Person or “group” (as defined in the Exchange Act) acquiring
at least 50% of the combined voting power of the then outstanding securities of the Purchaser or the surviving Person outstanding immediately
after such combination; or (c) a sale of all or substantially all of the assets of the Purchaser.
“Class
A Preferred Investor Warrant Consideration” has the meaning specified in Section 2.02(b).
“Closing”
has the meaning specified in Section 3.01.
“Closing
Date” has the meaning specified in Section 3.01.
“Closing
Filing” has the meaning specified in Section 6.15(b).
“Closing
Indebtedness” means the aggregate Indebtedness of the Company as of immediately prior to the Effective Time.
“Closing
Press Release” has the meaning specified in Section 6.15(b).
“CMII
Group” has the meaning specified in Section 9.14(a)(i).
“Code”
means the U.S. Internal Revenue Code of 1986, as amended, and any successor statute thereto, as amended.
“Common
Stock Exchange Ratio” means the Aggregate Common Stock Base Consideration divided by the Company Adjusted Fully Diluted
Capital.
“Common
Stock Price” means the share price equal to the closing sale price of one share of Domesticated Purchaser Common Stock
as reported on Nasdaq (or the exchange on which the shares of Domesticated Purchaser Common Stock are then listed) for a period of at
least twenty (20) days out of thirty (30) consecutive Trading Days ending on the Trading Day immediately prior to the date of determination
(as adjusted as appropriate to reflect any stock splits, reverse stock splits, stock dividends (including any dividend or distribution
of securities convertible into the Domesticated Purchaser Common Stock), extraordinary cash dividend (which adjustment shall be subject
to the reasonable mutual agreement of the Purchaser and the Company), reorganization, recapitalization, reclassification, combination,
exchange of shares or other like change or transaction with respect to the Domesticated Purchaser Common Stock).
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“Company”
has the meaning specified in the Preamble.
“Company
Adjusted Fully Diluted Capital” means the sum (without duplication) of the aggregate number of (i) shares of Company Common
Stock that are issued and outstanding immediately prior to the Effective Time, assuming and after giving effect to the conversion of
all Company Convertible Securities pursuant to Section 2.02, (ii) all shares of Company Common Stock issuable upon full exercise
of all issued and outstanding Company Warrants (calculated using the treasury method of accounting on a cashless exercise basis), (iii)
all shares of Company Common Stock issuable upon full exercise of all Vested Company Options outstanding as of immediately prior to the
Effective Time (calculated using the treasury method of accounting on a cashless exercise basis), and (iv) all shares of Company Common
Stock issuable upon full exercise of all Unvested Company Options, which are not the Signing-Date Unvested Company Options, that remain
outstanding as of immediately prior to the Effective Time (calculated using the treasury method of accounting on a cashless exercise
basis).
“Company
Aviation Authorizations” has the meaning specified in Section 4.26(a).
“Company
Benefit Plan” means any and all deferred compensation, executive compensation, incentive compensation, equity purchase
or other equity-based compensation plan, employment or consulting, severance or termination pay, holiday, vacation or other bonus plan
or practice, hospitalization or other medical, life or other insurance, supplemental unemployment benefits, profit sharing, pension,
or retirement plan, program, agreement, commitment or arrangement, and each other employee benefit plan, program, agreement or arrangement,
including each “employee benefit plan” as such term is defined under Section 3(3) of ERISA, maintained or contributed to
or required to be contributed to by the Company for the benefit of any employee or terminated employee of the Company.
“Company
Board” has the meaning specified in the Recitals.
“Company
Certificate of Incorporation” means the Certificate of Incorporation of the Company, as then currently in effect.
“Company
Closing Certificate” has the meaning specified in Section 3.02(b).
“Company
Confidential Information” means all confidential or proprietary documents and information concerning the Company or any
of their respective Representatives, furnished in connection with this Agreement or the transactions contemplated hereby; provided,
however, that Company Confidential Information shall not include any information which, (i) at the time of disclosure by the Purchaser
or its Representatives, is generally available publicly and was not disclosed in breach of this Agreement or (ii) at the time of the
disclosure by the Company or its Representatives to the Purchaser or its Representatives was previously known by such receiving party
without violation of Law or any confidentiality obligation by the Person receiving such Company Confidential Information.
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“Company
Convertible Security” means each convertible promissory note, simple agreement for future equity or similar instrument
or Contract issued by the Company or entered into by the Company pursuant to which any Person has the right to convert or exchange such
instrument or Contract into equity securities of the Company (for the avoidance of doubt, excluding Company Warrants and Company Options).
“Company
Common Stock” means collectively, shares of (i) common stock of the Company, $0.0001 par value per share, and (ii) non-voting
common stock of the Company, $0.0001 par value per share.
“Company
Disclosure Letter” has the meaning specified in the Preamble to Article IV.
“Company
Financials” has the meaning specified in Section 4.06(a).
“Company
Fully Diluted Capital” means the sum (without duplication) of the aggregate number of (i) shares of Company Common Stock
that are issued and outstanding immediately prior to the Effective Time, assuming and after giving effect to the conversion of all Company
Convertible Securities (other than the Pre-Funded Convertible Notes) pursuant to Section 2.02, (ii) shares of Company Preferred
Stock that are issued and outstanding immediately prior to the Effective Time, assuming and after giving effect to the conversion of
all Company Convertible Securities (other than the Pre-Funded Convertible Notes) pursuant to Section 2.02, (iii) all shares of
Company Common Stock and Company Preferred Stock issuable upon full exercise of all issued and outstanding Company Warrants (calculated
using the treasury method of accounting on a cashless exercise basis), (iv) all shares of Company Common Stock issuable upon full exercise
of all Vested Company Options outstanding as of immediately prior to the Effective Time (calculated using the treasury method of accounting
on a cashless exercise basis) and (v) all shares of Domesticated Purchaser Common Stock that are issuable upon conversion of Domesticated
Purchaser Series A Preferred Stock issued pursuant to Section 2.02(a) of this Agreement.
“Company
Incentive Plan” means the means that certain 2016 Equity Incentive Plan of the Company, as amended from time to time.
“Company
IP” means any and all Intellectual Property that is owned or purported to be owned (in whole or in part), licensed, used
or held for use by the Company.
“Company
IP Licenses” means any and all Intellectual Property licenses, sublicenses and other agreements or permissions that the
Company is party to or is otherwise authorized to use or practice any Intellectual Property under, excluding Off-the-Shelf Software and
non-exclusive licenses of Intellectual Property granted in agreements with suppliers, customers or end users in the ordinary course of
business where the license is not the primary purpose of the agreement.
“Company
Leased Real Properties” has the meaning specified in Section 4.16(b).
78
“Company
Material Adverse Effect” means any event, state of facts, condition, change, development, circumstance, occurrence or effect
(collectively, “Events”), that (i) has had, or would reasonably be expected to have, individually or in the aggregate, a
material adverse effect on the business, assets, results of operations or financial condition of the Company, or (ii) does or would reasonably
be expected to, individually or in the aggregate, prevent, materially delay or materially impede the ability of the Company to consummate
the Transactions; provided, however, that in no event would any of the following, alone or in combination, be deemed to constitute, or
be taken into account in determining whether there has been or will be, a “Company Material Adverse Effect”: (a) any change
in applicable Laws or GAAP or any interpretation thereof following the date of this Agreement, (b) any change in interest rates or economic,
political, business or financial market conditions generally, (c) the taking of any action required by this Agreement or any Ancillary
Document, (d) any natural disaster (including hurricanes, storms, tornados, flooding, earthquakes, volcanic eruptions or similar occurrences),
pandemic or change in climate, (e) any acts of terrorism or war, the outbreak or escalation of hostilities, geopolitical conditions,
local, national or international political conditions, (f) any failure of the Company to meet any projections or forecasts (provided
that clause (f) shall not prevent a determination that any Event not otherwise excluded from this definition of Company Material Adverse
Effect underlying such failure to meet projections or forecasts has resulted in a Company Material Adverse Effect), (g) any Events generally
applicable to the industries or markets in which the Company operates (including increases in the cost of products, supplies, materials
or other goods purchased from third party suppliers and including any changes, developments or conditions generally affecting the autonomous
aviation, unmanned aircraft systems or urban air mobility industries), (h) the announcement of this Agreement and consummation of the
transactions contemplated hereby, including any termination of, reduction in or similar adverse impact (but in each case only to the
extent attributable to such announcement or consummation) on relationships, contractual or otherwise, with any landlords, customers,
suppliers, distributors, partners or employees of the Company, (i) any matter set forth on the Company Disclosure Letter, (j) any action
taken by, or at the request of, the Purchaser, (k) any change in, or proposed change to, regulations, orders, guidance, policy statements,
notices of proposed rulemaking, advisory circulars or interpretive rules issued by the Federal Aviation Administration, the Department
of Transportation, the Bureau of Industry and Security, the Directorate of Defense Trade Controls or any other Governmental Authority
having jurisdiction over the Company’s aviation, export control or defense trade activities, including without limitation any changes
to or delays in the implementation of proposed rules regarding beyond-visual-line-of-sight operations (including 14 C.F.R. Part 108),
any changes to the FAA’s eVTOL Integration Pilot Program or successor programs, and any changes to type certification timelines,
policies or procedures generally applicable to applicants, (l) any change in the timing, scope or requirements of any type certification,
supplemental type certification, airworthiness certification, production certification or other FAA certification process applicable
to the Company or its products that does not result from a Company-specific enforcement action, and (m) any individual crash, forced
landing, ground incident, loss of vehicle, inflight anomaly, or operational mishap involving any aircraft, unmanned aircraft system,
or prototype manufactured, assembled, tested, or operated by the Company or on the Company’s behalf (including under public aircraft
authority), together with any resulting investigation by the National Transportation Safety Board, the FAA, or any other Aviation Authority,
except to the extent that such event results in a material enforcement action specifically directed at the Company by the FAA; provided,
further, that any Event referred to in clauses (a), (b), (d), (e) (g), (k) (l), or (m) above may be taken into account in determining
if a Company Material Adverse Effect has occurred to the extent it has a disproportionate and adverse effect on the business, assets,
results of operations or condition (financial or otherwise) of the Company, relative to similarly situated companies in the autonomous
aviation and unmanned aircraft systems industry in which the Company conducts its operations, but only to the extent of the incremental
disproportionate effect on the Company, relative to similarly situated companies in the autonomous aviation and unmanned aircraft systems
industry in which the Company conducts its operations.
“Company
Material Contract” has the meaning specified in Section 4.13(a).
“Company
Aviation Authorizations” has the meaning specified in Section 4.26(a).
“Company
Options” means all options to purchase shares of Company Common Stock that are outstanding as of immediately prior to the
Effective Time.
“Company
Option Exchange Ratio” means the quotient of (A) the Per Share Base Consideration divided by (B) the Redemption
Price.
“Company
Owned Properties” has the meaning specified in Section 4.16(a).
“Company
Permits” has the meaning specified in Section (a).
“Company
Personal Property Leases” has the meaning specified in Section 4.17.
“Company
Preferred Stock” means, collectively, the (i) Series Seed Preferred Stock, (ii) Series Seed-1 Preferred Stock, (iii) Series
Seed-2 Preferred Stock, (iv) Series Seed-3 Preferred Stock, (v) Series A-1 Preferred Stock, (vi) Series A-2 Preferred Stock, (vii) Series
AA Preferred Stock of the Company, (viii) Series AA-1 Preferred Stock, (ix) Series AA-2 Preferred Stock, (x) Series AA-3 Preferred Stock,
(xi) Series AAA Preferred Stock of the Company, (xii) Series AAA-1 Preferred Stock, (xiii) Series A Prime Preferred Stock, (xiv) Series
Seed Prime Preferred Stock, (xv) Series A Prime Non-Voting Preferred Stock, and (xvi) Series Seed Prime Non-Voting Preferred Stock.
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“Company
Real Property Leases” has the meaning specified in Section 4.16(b).
“Company
Registered IP” has the meaning specified in Section 4.14(a).
“Company
Securities” means, collectively, the Company Common Stock, the Company Preferred Stock, the Company Convertible Securities,
the Company Options, the Company Warrants and all other shares, warrants and other securities of the Company.
“Company
Software” means any and all Software which the Company owns or purports to own, in whole or in part.
“Company
Stockholder Approval” has the meaning specified in Section 4.02.
“Company
Transaction Costs” means all fees, costs and expenses of the Company, in each case, incurred prior to and through the Closing
Date in connection with the negotiation, preparation and execution of this Agreement, the other Ancillary Documents and the consummation
of the Transactions, including:
(a)
all change of control bonus payments, retention or similar payments payable solely as a result of the consummation of the Transactions
pursuant to arrangements (whether written or oral) entered into prior to the Closing Date whether payable before (to the extent unpaid),
on or following the Closing Date (excluding any “double-trigger” payments), and the employer portion of payroll Taxes payable
as a result of the foregoing amounts; (b) all severance payments, retirement payments or similar payments or success fees payable pursuant
to arrangements (whether written or oral) entered into prior to the Closing Date and which are payable in connection with the consummation
of the Transactions, whether payable before (to the extent unpaid), on or following the Closing Date (excluding any “double-trigger
payments”), and the employer portion of payroll Taxes payable as a result of the foregoing amounts; (c) all professional or transaction,
deal, brokerage, legal, accounting, financial advisory or any similar fees payable in connection with the consummation of the Transactions;
and (d) all costs, fees and expenses related to the D&O Tail; but excluding (i) the amount of any Transfer Taxes and (ii) any other
amounts payable by the Purchaser hereunder.
“Company
Warrants” means all warrants to purchase any shares or other equity interests of the Company.
“Consent”
means any consent, approval, waiver, authorization or Permit of, or notice to or declaration or filing with any Governmental Authority
or any other Person.
“Continental”
means the Continental Stock Transfer & Trust Company.
“Contracts”
means all legally binding contracts, contracts, agreements, binding arrangements, bonds, notes, indentures, mortgages, debt instruments,
purchase order, licenses (including all Company IP Licenses and other contracts, agreements or binding arrangements concerning Intellectual
Property), franchises, leases and other instruments or obligations of any kind, written or oral (including any amendments and other modifications
thereto).
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“Convertible
Note Consideration” has the meaning specified in Section 2.02(a).
“Copyleft
Terms” has the meaning specified in Section 4.14(e).
“Copyrights”
has the meaning specified in the definition of “Intellectual Property”.
“CUI”
has the meaning specified in Section 4.26(h).
“D&O
Indemnified Party” has the meaning specified in Section 6.19(a).
“D&O
Tail” has the meaning specified in Section 6.19(b).
“Designated
Director” has the meaning specified in Section 6.18(a).
“DGCL”
has the meaning specified in the Recitals.
“Disclosure
Letters” means, collectively, the Company Disclosure Letter and the Purchaser Disclosure Letter.
“Dissenting
Shares” has the meaning specified in Section 2.05.
“DLA”
has the meaning specified in Section 9.14(a)(ii).
“Domesticated
Purchaser Common Stock” means, following the Domestication, common stock of the Purchaser, par value $0.0001 per share.
“Domesticated
Purchaser Series A Investor Warrants” has the meaning specified in the Recitals.
“Domesticated
Purchaser Series A Preferred Stock” has the meaning specified in the Recitals.
“Domesticated
Purchaser Unit” means, following the Domestication, a unit of the Purchaser.
“Domesticated
Purchaser Warrant” has the meaning specified in the Recitals.
“Domestication”
has the meaning specified in the Recitals.
“Draft
Company Financials” has the meaning specified in Section 4.06(a).
“Earn-out
Exchange Ratio” means the Earnout Shares divided by the Company Fully Diluted
Capital.
“Earnout
Period” means the time period beginning on the Closing Date and ending on the date
that
is the fourth anniversary of the Closing Date.
“Earnout
Shares” means the up to 11,000,000 shares of Domesticated Purchaser Common Stock that may be issued to the Eligible Stockholders
pursuant to Section 2.09.
“Effective
Time” has the meaning set forth in Section 1.02(a).
“Eligible
Stockholder” means a holder of Company Common Stock, Company Preferred Stock, Pre-Funded Convertible Notes, Company Warrants
(including for this purpose the Company Pre-Funded Convertible Note Investor Warrants) or Vested Company Options as of immediately prior
to the Effective Time and each of their respective successors and assigns. As of the date of this Agreement, the Eligible Stockholders
are listed on Schedule 10-C of the Company Disclosure Letter.
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“Elroy
Group” has the meaning specified in Section 9.14(a)(ii).
“Employee
and Contractor Agreements” has the meaning specified in Section 4.13(xv).
“Enforceability
Exceptions” has the meaning as specified in Section 5.02.
“Environmental
Law” means any Law in any way relating to (a) the protection of human health and safety (with respect to exposure to Hazardous
Materials), (b) the environment, (c) natural resources (including air, water vapor, surface water, groundwater, drinking water supply,
surface land, subsurface land, plant and animal life or any other natural resource), (d) pollution, or (e) Hazardous Materials, including
the Comprehensive Environmental Response, Compensation and Liability Act, 42 USC §9601 et seq., the Resource Conservation and Recovery
Act, 42 USC §6901 et seq., the Toxic Substances Control Act, 15 USC §2601 et seq., the Federal Water Pollution Control Act,
33 USC §1251 et seq., the Clean Air Act, 42 USC §7401 et seq., the Federal Insecticide, Fungicide and Rodenticide Act, 7 USC
§136 et seq., the Occupational Safety and Health Act, 29 USC §651 et seq. (to the extent it relates to exposure to Hazardous
Materials), the Asbestos Hazard Emergency Response Act, 15 USC §2641 et seq., the Safe Drinking Water Act, 42 USC §300f et
seq., the Oil Pollution Act of 1990, 33 USC §2701 et seq., and analogous state acts.
“Environmental
Liabilities” means, in respect of any Person, all Liabilities, obligations, responsibilities, Remedial Legal Proceedings,
losses, damages, costs, and expenses (including all reasonable fees, disbursements, and expenses of counsel, experts, and consultants
and costs of investigation and feasibility studies), fines, penalties, sanctions, and interest incurred as a result of any claim or demand
by any other Person or in response to any violation of Environmental Law, whether known or unknown, accrued or contingent, whether based
in contract, tort, implied or express warranty, strict liability, criminal or civil statute, to the extent based upon, related to, or
arising under or pursuant to any Environmental Law, Environmental Permit, Order, or Contract with any Governmental Authority or other
Person, that relates to any environmental, health or safety condition, violation of Environmental Law, or Hazardous Materials.
“Environmental
Permits” has the meaning specified in Section 4.21(a).
“Equity
Incentive Plan” has the meaning specified in Section 6.14(a).
“ERISA”
means the U.S. Employee Retirement Income Security Act of 1974, as amended.
“ERISA
Affiliate” means each “person” (as defined in Section 3(9) of ERISA) which together with the Company would
be deemed to be a “single employer” within the meaning of Section 414(b), (c), (m) or (o) of the Code.
“Exchange
Act” means the U.S. Securities Exchange Act of 1934, as amended.
“Exchange
Fund” has the meaning specified in Section 2.04(a).
“Exchanged
Option” has the meaning specified in Section 2.03(a)(ii).
“Excluded
Share” has the meaning specified in Section 2.03(a)(i).
“Federal
Securities Law” has the meaning specified in Section 6.07.
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“Fraud”
means actual, intentional, and deliberate fraud as defined under the common law of the State of Delaware by a Party in the making of
the representations and warranties set forth in Article IV or Article V of this Agreement, as applicable. For the avoidance
of doubt, the term Fraud does not include any claim for equitable fraud, promissory fraud, unfair dealings fraud or any torts (including
a claim for fraud) based on negligence or recklessness, and (ii) a claim for Fraud may only be made against the Party who committed such
Fraud and shall be responsible for such Fraud only to the Party that suffered damage from such alleged Fraud.
“GAAP”
means generally accepted accounting principles as in effect in the United States of America.
“Government
Bid” means any offer, bid, proposal or quotation submitted by the Company to any Governmental Authority or to any prime
contractor or higher-tier subcontractor of a Governmental Authority that, if accepted, would result in a Government Contract.
“Government
Contract” means any Contract between the Company, on the one hand, and (a) a Governmental Authority, (b) any prime contractor
of a Governmental Authority in such prime contractor’s capacity as a prime contractor, or (c) any higher-tier subcontractor with
respect to a Contract described in clause (a) or (b), on the other hand, including any individual task, delivery or purchase order, basic
ordering agreement, blanket purchase agreement, grant, cooperative agreement, other transaction agreement (OTA) or similar Contract or
agreement.
“Governmental
Authority” means any federal, state, municipal, local or other foreign or domestic governmental, quasi-governmental, or
administrative body, instrumentality, department. or agency, any court, tribunal, administrative hearing body, arbitration panel, commission,
or other similar dispute-resolving panel or body, or any government-owned entity.
“Government
Official” shall mean any individual working for or on behalf of a Governmental Authority. Examples include a foreign customs
official; an inspector from a tax, health, or environmental agency; an employee in the procurement department of a state-owned manufacturer;
a journalist employed by a state-owned media company; and a professor or researcher at a state-owned university.
“Hazardous
Material” means any waste, gas, liquid or other substance or material that is defined, listed, classified or designated
as a “hazardous substance”, “pollutant”, “contaminant”, “hazardous waste”, “regulated
substance”, “hazardous chemical”, “toxic chemical”, or “waste” (or by any similar term) under
any Environmental Law, or any other material regulated, or that could result in the imposition of Liability or responsibility, under
any Environmental Law, including oil, petroleum, petroleum products and by-products, petroleum breakdown products, asbestos, radioactive
materials, polychlorinated biphenyls, radon, mold, urea formaldehyde insulation and per- and polyfluoroalkyl substances.
“Indebtedness”
of any Person means, without duplication, (a) all indebtedness of such Person for borrowed money (including the outstanding principal
and accrued but unpaid interest), (b) all obligations for the deferred purchase price of property or services (other than trade payables
incurred in the ordinary course of business), (c) any other indebtedness of such Person that is evidenced by a note, bond, debenture,
credit agreement or similar instrument, (d) all obligations of such Person under leases that should be classified as capital leases in
accordance with GAAP (other than real estate leases and any other leases that would be required to be capitalized only upon adoption
of ASC 842), (e) all obligations of such Person for the reimbursement of any obligor on any line or letter of credit, banker’s
acceptance, guarantee or similar credit transaction, in each case, that has been drawn or claimed against, (f) all interest rate and
currency swaps, caps, collars and similar agreements or hedging devices under which payments are obligated to be made by such Person,
whether periodically or upon the happening of a contingency, (g) all obligations secured by a Lien securing debt for borrowed money on
any property of such Person (other than Permitted Liens), (h) any premiums, prepayment fees or other penalties, fees, costs or expenses
associated with payment of any Indebtedness of such Person and (i) all obligation described in clauses (a) through (h) above of any other
Person which is directly or indirectly guaranteed by such Person or which such Person has agreed (contingently or otherwise) to purchase
or otherwise acquire or in respect of which it has otherwise assured a creditor against loss.
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“Insurance
Policies” has the meaning specified in Section 4.23(a).
“Intellectual
Property” means any and all intellectual or proprietary property and all rights, title, and interest therein or thereto
arising anywhere in the world, including all United States, international and foreign: (i) patents and patent applications, patent improvements,
disclosures and inventions, (whether patentable or unpatentable and whether or not reduced to practice), including any continuations,
divisions, continuations in part, renewals, divisionals, extensions, substitutions, reexaminations, reissues or foreign counterparts
of any of the foregoing (“Patents”); (ii) all trade names, trade dress, trademarks, service marks, slogans, logos
or internet domain name registrations, social media usernames, handles, and any other similar identifiers of source of origin, including
all goodwill associated therewith, together with all registrations and applications relating thereto (“Trademarks”);
(iii) copyrights (whether registered or unregistered), original works of authorship, copyrightable works and subject matter, together
with all registrations and applications relating thereto (“Copyrights”); (iv) all proprietary databases and
data; (v) all industrial designs and any registrations and applications therefor throughout the world; (vi) Trade Secrets, (vii) Software
and data, databases, compilations, and any other electronic data files, including any and all collections of data, whether machine readable
or otherwise; (viii) rights to sue or recover and retain damages and costs and attorneys’ fees for the past, present or future
infringement, dilution, misappropriation, or other violation of any of the foregoing anywhere in the world; (ix) any and all other intellectual
or industrial property rights protectable by applicable law in any jurisdiction; and (x) all issuances, renewals, registrations and applications
of or for any of the foregoing.
“Intended
Tax Treatment(s)” has the meaning specified in the Recitals.
“Interim
Period” has the meaning specified in Section 6.01(a).
“International
Trade Laws” means (a) all U.S. import and export Laws (including those Laws administered by the U.S. Departments of Commerce
(Bureau of Industry and Security)) codified at 15 C.F.R., Parts 700-774; Homeland Security (Customs and Border Protection) codified at
19 C.F.R., Parts 1-192; and State (Directorate of Defense Trade Controls) codified at 22 C.F.R., Parts 103, 120-130 and (b) all comparable
applicable Laws outside the United States.
“IPO”
means the initial public offering of Cayman Purchaser Units pursuant to the IPO Prospectus. “IPO Prospectus”
means the final prospectus of the Purchaser, dated as of February 10, 2026 (File No. 333-292861).
“IRS”
means the U.S. Internal Revenue Service (or any successor Governmental Authority).
“IT
Assets” means any and all technology, devices, computers, hardware, Software (including firmware and middleware), systems,
sites, servers, networks, workstations, routers, hubs, circuits, switches, interfaces, websites, platforms, data communications lines,
automated networks and control systems, cloud computing arrangements, and all other information or operational technology, telecommunications,
or data processing assets, facilities, systems services, or equipment, and all data stored therein or processed thereby, and all associated
documentation, in each case, owned or leased by, licensed to, or used by the Company in the conduct of its business.
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“JOBS
Act” has the meaning specified in Section 5.06.
“Knowledge”
means, with respect to (i) the Company, the actual knowledge, after reasonable inquiry, of the individuals set forth on Schedule 10-B
of the Company Disclosure Letter and (ii) the Purchaser, the actual knowledge, after reasonable inquiry, of the individuals set forth
on Schedule 10-A of the Purchaser Disclosure Letter.
“Law”
means any federal, state, local, municipal, foreign or other law, statute, legislation, principle of common law, ordinance, code, edict,
decree, proclamation, treaty, convention, rule, regulation, directive, requirement, writ, injunction, settlement, Order or Consent that
is or has been issued, enacted, adopted, passed, approved, promulgated, made, implemented or otherwise put into effect by or under the
authority of any Governmental Authority.
“Legal
Proceeding” means any notice of noncompliance or violation, or any claim, demand, charge, action, suit, litigation, audit,
settlement, complaint, stipulation, assessment or arbitration, or examination, or any request (including any request for information),
inquiry, hearing, proceeding or investigation, by or before any Governmental Authority.
“Letter
of Transmittal” has the meaning specified in Section 2.04(b).
“Liabilities”
means any and all liabilities, Indebtedness, Legal Proceedings or obligations of any nature (whether absolute, accrued, contingent or
otherwise, whether known or unknown, whether direct or indirect, whether matured or unmatured, whether due or to become due and whether
or not required to be recorded or reflected on a balance sheet under GAAP or other applicable accounting standards).
“Lien”
means any mortgage, deed of trust, pledge, security interest, attachment, right of first refusal, right of first offer, option, proxy,
voting trust, license, encumbrance, easement, covenant, lien or charge of any kind (including any conditional sale or other title retention
agreement or lease in the nature thereof), restriction (whether on voting, sale, transfer, disposition or otherwise), any subordination
arrangement in favor of another Person, or any filing or agreement to file a financing statement as debtor under the Uniform Commercial
Code or any similar Law.
“Lock-Up
Agreements” has the meaning specified in the Recitals.
“Material
Current Government Contract” has the meaning specified in Section 4.10(a).
“Merger”
has the meaning specified in the Recitals.
“Merger
Sub” has the meaning specified in the Preamble.
“Modification
in Recommendation” has the meaning specified in Section 6.13(b).
“Nasdaq”
has the meaning specified in Section 5.06(a).
“Non-Recurring
Revenue” means revenue (as defined by GAAP) generated from (i) acquisitions and divestitures that occur following the Closing,
and (ii) research and development conducted for Governmental Authorities. For the avoidance of doubt, any revenue generated from sales
relating to aircraft or aircraft production shall not be deemed “Non-Recurring Revenue,” even such sales are one-time or
non-recurring.
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“OFAC”
has the meaning specified in Section 4.25(c).
“Off-the-Shelf
Software” means “shrink wrap,” “click wrap,” and “off the shelf” software agreements
and other agreements for Software commercially available to the public on standard terms and conditions with an annual cost of less than
$100,000 per year.
“Offer
Documents” has the meaning specified in Section 6.13(a)(i).
“Open
Source Software” means any code or software governed by any license meeting the Open Source Definition (as promulgated
by the Open Source Initiative) or the Free Software Definition (as promulgated by the Free Software Foundation), or any substantially
similar license, including any license approved by the Open Source Initiative or any Creative Commons License.
“Order”
means any order, decree, ruling, judgment, injunction, writ, determination, binding decision, verdict, judicial award or other action
that is or has been made, entered, rendered, or otherwise put into effect by or under the authority of any Governmental Authority.
“Organizational
Documents” means, with respect to any Person that is an entity, its certificate of incorporation or formation, bylaws,
operating agreement, memorandum and articles of association or similar organizational documents, in each case, as amended.
“Organic
Revenue” means revenue (as defined by GAAP) but excluding Non-Recurring Revenue. For the avoidance of doubt, “Organic
Revenue” shall include any revenue generated from sales relating to aircraft or aircraft production even such sales are one-time
or non-recurring.
“Outside
Date” has the meaning specified in Section 8.01(d).
“Owned
Intellectual Property” means any and all Intellectual Property which the Company owns (or purports to own), in whole or
in part, and includes the Company Software and all Company Registered IP and all other Intellectual Property required to be set forth
in Section 4.14(a) of the Company Disclosure Letter.
“Party(ies)”
has the meaning specified in the Preamble.
“Patents”
has the meaning specified in the definition of “Intellectual Property”.
“PCAOB”
means the U.S. Public Company Accounting Oversight Board (or any successor thereto).
“PCAOB
Financial Statements” has the meaning specified in Section 6.04(a).
“Permits”
means all federal, state, local or foreign or other third-party permits, grants, easements, consents, approvals, authorizations, exemptions,
licenses, franchises, concessions, ratifications, permissions, clearances, confirmations, endorsements, waivers, certifications, designations,
ratings, registrations, qualifications or orders of any Governmental Authority or any other Person.
86
“Permitted
Liens” means (a) Liens for Taxes or assessments and similar governmental charges or levies, which either are (i) not yet
due and payable or (ii) being contested in good faith and by appropriate proceedings, and for which adequate reserves have been established
with respect thereto in accordance with GAAP; (b) other Liens imposed by operation of Law arising in the ordinary course of business
relating to obligations, which either are (A) not yet due and payable or (B) being contested in good faith and by appropriate proceedings
and for which adequate reserves have been established with respect thereto in accordance with GAAP; (c) Liens incurred or deposits made
in the ordinary course of business in connection with social security; (d) Liens on goods in transit incurred pursuant to documentary
letters of credit, in each case arising in the ordinary course of business; (e) Liens arising under this Agreement or any Ancillary Document;
or (f) non-exclusive licenses of Owned Intellectual Property granted to customers, vendors or service providers in the ordinary course
of business.
“Person”
means an individual, corporation, company, partnership (including a general partnership, limited partnership or limited liability partnership),
limited liability company, association, trust or other entity or organization, including a government, domestic or foreign, or political
subdivision thereof, or an agency or instrumentality thereof.
“Personal
Information” means any information that identifies, relates to, or is linked or reasonably linkable to an individual or
household and includes any “personal information,” “personal data,” “personally identifiable information”
or similar term as defined by Data Protection Laws.
“Personal
Property” means any machinery, equipment, tools, vehicles, furniture, leasehold improvements, office equipment, plant,
parts and other tangible personal property.
“Per
Share Base Consideration” means (a) with respect to shares of Company Preferred Stock issued and outstanding immediately
prior to the Effective Time, the right to receive the applicable number of shares of Domesticated Purchaser Common Stock set forth in
Section 2.03(a)(iii) and (b) with respect to shares of Company Common Stock issued and outstanding immediately prior to the Effective
Time, the right to receive the number of shares of Domesticated Purchaser Common Stock equal to (x) the number of shares of Company Common
Stock, multiplied by (y) the Common Stock Exchange Ratio.
“Per
Share Earn-out Consideration” has the meaning specified in Section 2.02(e).
“PIPE
Investment” has the meaning specified in the Recitals.
“Post-Closing
Purchaser Board” has the meaning specified in Section 6.18(a).
“Preferred
Bidder Status” means having 8(a), small business, small disadvantaged business, historically underutilized business zone
small business, women owned small business, veteran-owned small business or service-disabled veteran-owned small business status and/or
other preferential status.
“Preferred
Stock As-Converted Exchange” has the meaning specified in Section 2.03(a)(iii).
“Preferred
Stock Preference Exchange” has the meaning specified in Section 2.03(a)(iii).
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“Preferred
Stock Liquidation Preference means, as applicable, (i) with respect to the Series Seed Preferred Stock, an amount per share equal
to $2.0920 per share, plus any dividends declared but unpaid thereon, (ii) with respect to each share of Series Seed-1 Preferred Stock,
an amount equal to $1.4075 per share, plus any dividends declared but unpaid thereon, (iii) with respect to the Series Seed-2 Preferred
Stock, an amount per share equal to $1.6891 per share, plus any dividends declared but unpaid thereon, (iv) with respect to the Series
Seed-3 Preferred Stock, an amount per share equal to $1.8828 per share, plus any dividends declared but unpaid thereon, (v) with respect
to the Series A-1 Preferred Stock, an amount per share equal to $1.2503 per share, plus any dividends declared but unpaid thereon, (vi)
with respect to the Series A-2 Preferred Stock, an amount per share equal to $1.0628 per share, plus any dividends declared but unpaid
thereon, (vii) with respect to the Series AA Preferred Stock, an amount per share equal to $4.21669 per share, plus any dividends declared
but unpaid thereon, (viii) with respect to the Series AA-1 Preferred Stock, an amount per share equal to $3.5492 per share, plus any
dividends declared but unpaid thereon, (ix) with respect to the Series AA-2 Preferred Stock, an amount per share equal to $3.58419 per
share, plus any dividends declared but unpaid thereon, (x) with respect to the Series AA-3 Preferred Stock, an amount per share equal
to $3.37335 per share, plus any dividends declared but unpaid thereon, (xi) with respect to the Series AAA Preferred Stock, an amount
per share equal to $4.3611 per share, plus any dividends declared but unpaid thereon, (xii) with respect to the Series AAA-1 Preferred
Stock, an amount per share equal to $3.6414 per share, plus any dividends declared but unpaid thereon, (m) with respect to the Series
A Prime Preferred Stock, an amount per share equal to $0.232374 per share, plus any dividends declared but unpaid thereon, (xiii) with
respect to the Series A Prime Non-Voting Preferred Stock, an amount per share equal to $0.232374 per share, plus any dividends declared
but unpaid thereon, (xiv) with respect to the Series Seed Prime Preferred Stock, an amount per share equal to $0.0001 per share, plus
any dividends declared but unpaid thereon, and (xv) with respect to the Series Seed Prime Non-Voting Preferred Stock, an amount per share
equal to $0.0001 per share, plus any dividends declared but unpaid thereon.
“Pre-Funded
Convertible Note” means collectively, (i) those certain convertible promissory notes issued by the Company to the purchasers
thereof pursuant to the Pre-PIPE Note Purchase Agreement (the “Seller Pre-Funded Convertible Notes”) and (ii)
those certain convertible promissory notes issued by the Company to the purchasers thereof pursuant to the Pre-PIPE Securities Purchase
Agreement (the “Sponsor Pre-Funded Convertible Notes”).
“Pre-Funded
Convertible Note Investor Warrant Consideration” has the meaning specified in Section 2.02(b).
“Pre-Funded
Note Investment” has the meaning specified in the Recitals.
“Pre-PIPE
Note Purchase Agreement” has the meaning specified in the Recitals.
“Pre-PIPE
Securities Purchase Agreement” has the meaning specified in the Recitals.
“Processing”
means any operation or set of operations, whether automated or manual, on Personal Information, including but not limited to collection,
recording, storage, transmission, access, review, correction, deletion, organization, combination, or other processing.
“Pro
Rata Share” means, for each Eligible Stockholder, a percentage determined by dividing (a)
(i)
the total number of shares of Domesticated Purchaser Common Stock issued or issuable to such Eligible Stockholder in the Merger in exchange
for such Eligible Stockholder’s Company Common Stock, Company Convertible Securities, Company Preferred Stock, Company Warrants
and Vested Company Options or (ii) in the case of holders of Pre-Funded Convertible Notes prior to the Merger, the total number of shares
of Domesticated Purchaser Common Stock issuable to such Eligible Stockholder upon a hypothetical conversion at the time of the applicable
Triggering Event of such Eligible Stockholder’s Domesticated Purchaser Series A Preferred Stock received in the Merger, divided
by (b) the sum of (i) the total number of shares of Domesticated Purchaser Common Stock issued to all Eligible Stockholders in the Merger
in exchange for the Company Common Stock, Company Convertible Securities, Company Preferred Stock, Company Warrants and Vested Company
Options; and (ii) the total number of shares of Domesticated Purchaser Common Stock issuable to such Eligible Stockholders upon a hypothetical
conversion of all Eligible Stockholders’ Domesticated Purchaser Series A Preferred Stock at the time of the applicable Triggering
Event.
“Protected
Information” means data or information under the possession and control of the Company that is (i) proprietary, (ii) sensitive,
or (iii) subject to a statutory, legal or contractual duty of confidentiality that is legally binding on the Company, but does not include
any Personal Information or any publicly-available data.
88
“Proxy
Statement” has the meaning specified in Section 6.13(a)(i).
“Proxy
Statement/Registration Statement” has the meaning specified in Section 6.13(a)(i).
“Public
Certifications” has the meaning specified in Section 5.06(a).
“Purchaser”
has the meaning specified in the Preamble.
“Purchaser
Bylaws upon Domestication” has the meaning specified in the Recitals.
“Purchaser
Charter upon Domestication” has the meaning specified in the Recitals.
“Purchaser
Class A Ordinary Shares” means prior to the Domestication, Class A ordinary shares of a par value of $0.0001 per share
of the Purchaser.
“Purchaser
Class B Ordinary Shares” means prior to the Domestication, Class B ordinary shares of a par value of $0.0001 per share
of the Purchaser.
“Purchaser
Closing Certificate” has the meaning specified in Section 3.02(a).
“Purchaser
Confidential Information” means all confidential or proprietary documents and information concerning the Purchaser or any
of its Representatives; provided, however, that Purchaser Confidential Information shall not include any information which, (i)
at the time of disclosure by the Company or any of its Representatives, is generally available publicly and was not disclosed in breach
of this Agreement or (ii) at the time of the disclosure by the Purchaser or its Representatives to the Company or any of its Representatives,
was previously known by such receiving party without violation of Law or any confidentiality obligation by the Person receiving such
Purchaser Confidential Information. For the avoidance of doubt, from and after the Closing, Purchaser Confidential Information will include
the confidential or proprietary information of the Company.
“Purchaser
Disclosure Letter” has the meaning specified in the Preamble to Article V.
“Purchaser
Material Adverse Effect” means any change, event, or occurrence, that, individually or when aggregated with other changes,
events, or occurrences has had a materially adverse effect on the business, assets, financial condition or results of operations of the
Purchaser; provided, however, that no change or effect related to any of the following, alone or in combination, shall be taken into
account in determining whether a Purchaser Material Adverse Effect has occurred: (i) the announcement of this Agreement and consummation
of the transactions contemplated hereby, including any termination of, reduction in or similar adverse impact (but in each case only
to the extent attributable to such announcement or consummation) on relationships, contractual or otherwise, with any landlords, customers,
suppliers, distributors, partners or employees of the Purchaser or Merger Sub; (ii) the taking of any action required by this Agreement
or any Ancillary Document; (iii) any natural disaster (including hurricanes, storms, tornados, flooding, earthquakes, volcanic eruptions
or similar occurrences), pandemic or change in climate, (iv) any acts of terrorism or war, the outbreak or escalation of hostilities,
geopolitical conditions, local, national or international political conditions; (v) the Redemption; (vi) any breach of any covenants,
agreements or obligations of any Series A Preferred Stock Investor or investor in any PIPE Investment, in each case who is not Inflection
Point Asset Management or an Affiliate of Inflection Point Asset Management, under any Series A SPA or other similar agreement related
to financing the Company or Purchaser (including any breach of such Person’s obligations to fund any amounts thereunder when required);
(vii) changes or proposed changes in applicable Law, regulations or interpretations thereof or decisions by courts or any Governmental
Authority after the date of this Agreement; (viii) changes or proposed changes in GAAP (or any interpretation thereof) after the date
of this Agreement; or (ix) any downturn in general economic conditions, including changes in the credit, debt, securities, financial,
capital or reinsurance markets (including changes in interest or exchange rates, prices of any security or market index or commodity
or any disruption of such markets), in each case, in the United States or anywhere else in the world.
89
“Purchaser
Ordinary Shares” means the Purchaser Class A Ordinary Shares and the Purchaser Class B Ordinary Shares.
“Purchaser
SEC Reports” has the meaning specified in Section 5.06(a).
“Purchaser
Shareholder Approval” means the approval of (i) those Transaction Proposals identified in clause (B) and (C) and of Section
6.13(b), in each case, by special resolution under Cayman Islands Law, being a resolution passed by a majority of not less than two-thirds
of the outstanding Purchaser Ordinary Shares entitled to vote in person or, where proxies are allowed, by proxy, who attend and vote
thereupon (as determined in accordance with the Purchaser’s Organizational Documents) at the Purchaser Shareholders’ Meeting,
(ii) those Transaction Proposals identified in clauses (A), (D), (E), (F), (G), (H) and (I) of Section 6.13(b), in each case,
by an ordinary resolution under Cayman Islands Law, being a resolution passed by a simple majority of the outstanding Purchaser Ordinary
Shares entitled to vote in person or, where proxies are allowed, by proxy, who attend and vote thereupon (as determined in accordance
with the Purchaser’s Organizational Documents), and (iii) with respect to any other proposal proposed to the Purchaser Shareholders,
the requisite approval required under the Purchaser’s Organizational Documents, the Cayman Companies Act or any other applicable
Law, in each case, at a Purchaser Shareholders’ Meeting.
“Purchaser
Shareholders” means the holders of the Purchaser Ordinary Shares.
“Purchaser
Shareholders’ Meeting” has the meaning specified in Section 6.13(b).
“Purchaser
Transaction Costs” means: (a) all fees, costs and expenses of the Purchaser incurred prior to and through the Closing Date
in connection with the negotiation, preparation and execution of this Agreement, the other Ancillary Documents and the consummation of
the Transactions, whether paid or unpaid prior to the Closing, including any and all professional or transaction related costs, fees
and expenses of legal, accounting and financial advisors, consultants, auditors, accountants and brokers, including any deferred underwriting
commissions being held in the Trust Account; and (b) any Indebtedness of the Purchaser owed to its Affiliates or shareholders.
“Redemption”
has the meaning specified in the Recitals.
“Redemption
Price” shall mean an amount equal to the price at which each Purchaser Class A Ordinary Share may be redeemed pursuant
to the Redemption.
“Registration
Statement” means the Registration Statement on Form S-4, or other appropriate form, including any pre-effective or post-effective
amendments or supplements thereto, to be filed with the SEC by Purchaser under the Securities Act with respect to the Registration Statement
Securities.
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“Registration
Statement Securities” has the meaning specified in Section 6.13(a)(i).
“Related
Person” means any officer, director, manager, employee, trustee or beneficiary of the Company or any of its Affiliates
and any immediate family member of any of the foregoing.
“Release”
means any release, spill, emission, leaking, pumping, injection, deposit, disposal, discharge, dispersal, migrating or leaching into
the indoor or outdoor environment, or into or out of any property.
“Remedial
Legal Proceeding” means all actions to (i) clean up, remove, treat, or in any other way address any Hazardous Material,
(ii) prevent the Release of any Hazardous Material so it does not endanger or threaten to endanger public health or welfare or the indoor
or outdoor environment, (iii) perform pre-remedial studies and investigations or post-remedial monitoring and care, or (iv) correct or
otherwise respond to a condition of noncompliance with Environmental Laws.
“Representatives”
means, as to any Person, such Person’s Affiliates and the respective managers, directors, officers, employees, independent contractors,
consultants, advisors (including financial advisors, counsel and accountants), agents and other legal representatives of such Person
or its Affiliates.
“Sanctioned
Jurisdiction” has the meaning specified in Section 4.25(c).
“Sanctions
Laws” means applicable trade, economic and financial sanctions Laws, regulations, embargoes, and restrictive measures administered
or enforced by (i) the United States (including without limitation the U.S. Department of the Treasury’s Office of Foreign Assets
Control, the U.S. Department of State, and the U.S. Department of Commerce), or (ii) any country in which the Purchaser or the Company
or any agent acting on behalf of the forgoing is performing activities that create jurisdiction.
“SDN
List” has the meaning specified in Section 4.25(c).
“SEC”
means the U.S. Securities and Exchange Commission (or any successor Governmental Authority).
“Securities
Act” means the Securities Act of 1933, as amended.
“Security
Breach” means any data breach or security incident that (i) materially impacts the confidentiality, integrity or availability
of (a) the Personal Information and/or Protected Information that is Processed by the Company, or (b) the IT Assets that are material
to the operations of the Company or the Processing of Personal Information and/or Protected Information by the Company, or (ii) is otherwise
required to be notified or reported to an individual regulator or other third party under applicable Law or pursuant to an obligation
under a Contract that is legally binding on the Company.
“Seller
Lock-Up Agreement” has the meaning specified in the Recitals.
“Series
A Preferred Stock Certificate of Designation” has the meaning specified in the Recitals.
“Series
A-1 Preferred Stock” means Series A-1 Preferred Stock of the Company, par value $0.0001 per share.
“Series
A-2 Preferred Stock” means Series A-2 Preferred Stock of the Company, par value $0.0001 per share.
91
“Series
A Prime Non-Voting Preferred Stock” means Series A Prime Non-Voting Preferred Stock of the Company, par value $0.0001 per
share.
“Series
A Prime Preferred Stock” means Series A Prime Preferred Stock of the Company, par value $0.0001 per share.
“Series
AA Preferred Stock” means Series AA Preferred Stock of the Company, par value $0.0001 per share.
“Series
AA-1 Preferred Stock” means Series AA-1 Preferred Stock of the Company, par value $0.0001 per share.
“Series
AA-2 Preferred Stock” means Series AA-2 Preferred Stock of the Company, par value $0.0001 per share.
“Series
AA-3 Preferred Stock” means Series AA-3 Preferred Stock of the Company, par value $0.0001 per share.
“Series
AAA Preferred Stock” means Series AAA Preferred Stock of the Company, par value $0.0001 per share.
“Series
AAA-1 Preferred Stock” means Series AAA-1 Preferred Stock of the Company, par value $0.0001 per share.
“Series
Seed Preferred Stock” means Series Seed Preferred Stock of the Company, par value $0.0001 per share.
“Series
Seed Prime Non-Voting Preferred Stock” means Series Seed Prime Non-Voting Preferred Stock of the Company, par value $0.0001
per share.
“Series
Seed Prime Preferred Stock” means Series Seed Prime Preferred Stock of the Company, par value $0.0001 per share.
“Series
Seed-1 Preferred Stock” means Series Seed-1 Preferred Stock of the Company, par value $0.0001 per share.
“Series
Seed-2 Preferred Stock” means Series Seed-2 Preferred Stock of the Company, par value $0.0001 per share.
“Series
Seed-3 Preferred Stock” means Series Seed-3 Preferred Stock of the Company, par value $0.0001 per share.
“Signing
Filing” has the meaning specified in Section 6.15(b).
“Signing
Press Release” has the meaning specified in Section 6.15(b).
“Software”
means any and all software, firmware and computer programs and applications, and AI/ML, including any and all source code, descriptions,
schematics, specifications, flow charts, object code, middleware, utilities, computer programs, application programming interfaces, algorithms,
plugins, libraries, subroutines, tools, drivers, microcode, scripts, batch files, instruction sets and macros, models, methodologies
and other work product used in design, plan, organize and develop any of the foregoing, in each case of the foregoing whether in source
code, executable or object code form, documentation related thereto including user manuals, user documentation, and training materials,
filed, records and other work product related to any of the foregoing and all software modules, tools and databases and collections of
data.
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“Sponsor”
means Columbus Circle 2 Sponsor Corporation LLC, a Delaware limited liability company.
“Sponsor
Lock-Up Agreement” has the meaning specified in the Recitals.
“Sponsor
Share Conversion” has the meaning specified in the Recitals.
“Sponsor
Support Agreement” has the meaning specified in the Recitals.
“Stockholder
Support Agreement” has the meaning specified in the Recitals.
“Stockholders”
means the Persons who hold shares of capital stock of the Company.
“Subsidiary”
means, with respect to any Person, any corporation, partnership, association or other business entity of which (i) if a corporation,
a majority of the total voting power of shares of stock entitled (without regard to the occurrence of any contingency) to vote in the
election of directors, managers or trustees thereof is at the time owned or controlled, directly or indirectly, by that Person or one
or more of the other Subsidiaries of that Person or a combination thereof, or (ii) if a partnership, association or other business entity,
a majority of the partnership or other similar ownership interests thereof is at the time owned or controlled, directly or indirectly,
by any Person or one or more Subsidiaries of that Person or a combination thereof. For purposes hereof, a Person or Persons will be deemed
to have a majority ownership interest in a partnership, association or other business entity if such Person or Persons will be allocated
a majority of partnership, association or other business entity gains or losses or will be or control the managing director, managing
member, general partner or other managing Person of such partnership, association or other business entity. A Subsidiary of a Person
will also include any variable interest entity which is consolidated with such Person under applicable accounting rules.
“Surviving
Company” has the meaning specified in the Recitals.
“Surviving
Company Share” has the meaning specified in Section 1.02(d).
“Tax
Return” means any return, form, declaration, election, disclosure, report, claim for refund, information return or other
documents (including any related or supporting schedules, statements or information) filed or required to be filed in connection with
the determination, assessment or collection of any Taxes or the administration of any Laws or administrative requirements relating to
any Taxes.
“Taxes”
means all direct or indirect federal, state, local, foreign and other net income, gross income, gross receipts, sales, use, value-added,
ad valorem, transfer, franchise, profits, license, lease, service, service use, withholding, payroll, employment, social security and
related contributions due in relation to the payment of compensation to employees, excise, severance, stamp, occupation, premium, property,
windfall profits, alternative minimum, estimated, customs, duties or other taxes, fees, assessments or charges in the nature of a tax,
together with any interest and any penalties, additions to tax or additional amounts with respect thereto imposed by a Governmental Authority.
“Third-Party
Datasets” has the meaning specified in Section 4.14(i).
“Top
Customers” has the meaning specified in Section 4.24(a).
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“Top
Suppliers” has the meaning specified in Section 4.24(b).
“Trade
Secrets” means any trade secrets, confidential business information, concepts, ideas, designs, research or development
information, processes, procedures, techniques, technical information, specifications, operating and maintenance manuals, engineering
drawings, methods, know-how, data, mask works, discoveries, inventions, modifications, extensions, improvements, and other proprietary
rights (whether or not patentable or subject to Copyright, Trademark, or trade secret protection).
“Trademarks”
has the meaning specified in the definition of “Intellectual Property”.
“Trading
Day” means any day on which shares of Domesticated Purchaser Common Stock are actually traded on the principal securities
exchange or securities market on which shares of Domesticated Purchaser Common Stock are then traded.
“Transaction
Proposals” has the meaning specified in Section 6.13(b).
“Transactions”
has the meaning specified in the Recitals.
“Transfer
Taxes” has the meaning specified in Section 6.11(c).
“Treasury
Regulations” means the regulations (including temporary regulations) promulgated by the United States Department of the
Treasury pursuant to and in respect of provisions of the Code. All references herein to sections of the Treasury Regulations shall include
any corresponding provisions or provisions of succeeding, similar or substitute, temporary or final Treasury Regulations.
“Triggering
Event” means either Triggering Event I, Triggering Event II or Triggering Event III.
“Triggering
Event I” shall occur if, within the Earnout Period, the Common Stock Price of one share of the Domesticated Purchaser Common
Stock is greater than or equal to $15.00 per share for 20 days during any 30-trading day period commencing on the one-year anniversary
of the Closing and ending on the four-year anniversary of Closing.
“Triggering
Event II” shall occur if, within the Earnout Period, the Common Stock Price of one share of the Domesticated Purchaser
Common Stock is greater than or equal to $20.00 per share for 20 trading days during any 30-trading day period commencing at the one-year
anniversary of Closing and ending on the four-year anniversary of Closing.
“Triggering
Event III” shall occur if the Organic Revenue for the Purchaser during any trailing two (2) quarter period ending not later
than June 30, 2028 equals or exceeds $50,000,000.
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“Trust
Account” means that certain trust account established pursuant to the Trust Agreement.
“Trust
Agreement” has the meaning specified in Section 5.15.
“Trustee”
has the meaning specified in Section 5.15.
“Type
Certification Application” has the meaning specified in Section 4.26(c).
“Vested
Company Options” means all Company Options that are vested and exercisable as of immediately prior to the Effective Time
(after giving effect to any acceleration of vesting).
“Unaudited
Company Financials” has the meaning specified in Section 4.06(a).
“Unvested
Company Options” means all Company Options that, as of immediately prior to the Effective Time (after giving effect to
any acceleration of vesting), remain subject to vesting conditions that have not yet been satisfied or waived.
“Updated
1Q Financial Statements” has the meaning specified in Section 6.04(b).
“WARN
Act” has the meaning specified in Section 4.19(f).
“Warrant
Agreement” means that certain Warrant Agreement, dated as of February 10, 2026, by and between the Purchaser and Continental,
as warrant agent.
(REMAINDER
OF PAGE INTENTIONALLY LEFT BLANK; SIGNATURE PAGE FOLLOWS)
95
IN
WITNESS WHEREOF, each Party hereto has caused this Business Combination Agreement to be signed and delivered as of the date first written
above.
The Purchaser:
Columbus Circle Capital Corp. II
By:
/s/ Gary Quin
Name:
Gary Quin
Title:
Chief Executive Officer and Chairman of the Board
The Company:
ELROY AIR, INC.
By:
/s/ Andrew Clare
Name:
Andrew Clare
Title:
Chief Executive Officer
Merger Sub:
IPGX MERGER SUB, INC.
By:
/s/ Gary Quin
Name:
Gary Quin
Title:
President
(Signature
Page to Business Combination Agreement)
Exhibit
A — Form of Purchaser Charter Upon Domestication
CERTIFICATE
OF INCORPORATION
OF
[ELROY],
INC.
ARTICLE
I.
The
name of the corporation is [Elroy], Inc. (the “Corporation”).
ARTICLE
II.
The
address of the Corporation’s registered office in the State of Delaware is 251 Little Falls Dr., Wilmington, New Castle County,
DE 19808. The name of its registered agent at such address is Corporation Service Company.
ARTICLE
III.
The
nature of the business of the Corporation and the objects or purposes to be transacted, promoted or carried on by the Corporation is
to engage in any lawful act or activity for which corporations may be organized under the General Corporation Law of the State of Delaware,
as it now exists or may hereafter be amended and supplemented (the “DGCL”). The Corporation is being incorporated
in connection with the domestication of Columbus Circle Capital Corp. II, a Cayman Islands exempted company limited by shares (“Columbus
Circle”), as a Delaware corporation, and this Certificate of Incorporation is being filed simultaneously with the Certificate
of Corporate Domestication of Columbus Circle (the “Certificate of Domestication”).
ARTICLE
IV.
Section
4.1 Authorized Stock. The total number of shares of all classes of stock that the Corporation is authorized to issue is [●]
consisting of two classes as follows:
(a) [●]
shares of common stock, with a par value of $0.0001 per share (the “Common Stock”);
and
(b) [●]
shares of preferred stock, with a par value of $0.0001 per share (the “Preferred
Stock”).
Upon
the filing of the Certificate of Domestication and this Certificate of Incorporation, each issued and outstanding ordinary share of Columbus
Circle shall convert automatically, on a one-for-one basis, into one (1) share of Common Stock, without any action required on the part
of the Corporation or the holders thereof.
1
Section
4.2 Preferred Stock. The board of directors of the Corporation (the “Board of Directors”) is authorized,
subject to any limitations prescribed by law, to provide, out of the unissued shares of Preferred Stock, for the issuance of shares of
Preferred Stock in one or more series, including “blank check” preferred stock, and by filing a certificate pursuant to the
applicable law of the State of Delaware (such certificate being hereinafter referred to as a “Preferred Stock Designation”),
to establish from time to time the number of shares to be included in each such series and to fix the powers, designations, preferences
and relative, participating, optional or other special rights, and qualifications, limitations or restrictions thereof, including, without
limitation, the authority to fix the dividend rights, dividend rates, conversion rights, exchange rights, voting rights, rights and terms
of redemption (including sinking and purchase fund provisions), the redemption price or prices, restrictions on the issuance of shares
of such series, the dissolution preferences and the rights in respect of any distribution of assets of any wholly unissued series of
Preferred Stock, or any of them and to increase or decrease the number of shares of any series so created (except where otherwise provided
in the Preferred Stock Designation), subsequent to the issue of that series but not below the number of shares of such series then outstanding.
In case the authorized number of shares of any series shall be so decreased, the shares constituting such decrease shall resume the status
which they had prior to the adoption of the resolution originally fixing the number of shares of such series (except where otherwise
provided in the Preferred Stock Designation). There shall be no limitation or restriction on any variation between any of the different
series of Preferred Stock as to the designations, preferences and relative, participating, optional or other special rights, and the
qualifications, limitations or restrictions thereof; and the several series of Preferred Stock may vary in any and all respects as fixed
and determined by the resolution or resolutions of the Board of Directors or by a duly authorized committee of the Board of Directors,
providing for the issuance of the various series of Preferred Stock. Except as otherwise expressly provided in this Certificate of Incorporation
(including any Certificate of Designation relating to any series of Preferred Stock), no vote of the holders of shares of Preferred Stock
or Common Stock shall be a prerequisite to the issuance of any shares of any series of the Preferred Stock so authorized in accordance
with this Certificate of Incorporation. Except as otherwise required by law, holders of Common Stock shall not be entitled to vote on
any amendment to this Certificate of Incorporation (including any Certificate of Designation relating to any series of Preferred Stock)
that relates solely to the terms of one or more outstanding series of Preferred Stock if the holders of such affected series are entitled,
either separately or together with the holders of one or more other such series, to vote thereon pursuant to this Certificate of Incorporation
(including any Certificate of Designation relating to any series of Preferred Stock) or pursuant to the DGCL.
Section
4.3 Number of Authorized Shares. The number of authorized shares of any of the Common Stock or Preferred Stock may be increased
or decreased (but not below the number of shares thereof then outstanding) by the affirmative vote of the holders of a majority of the
voting power of all of the outstanding shares of capital stock of the Corporation entitled to vote thereon, without a separate vote of
any holders of shares of Common Stock or Preferred Stock, or of any series thereof, irrespective of the provisions of Section 242(b)(2)
of the DGCL, unless a separate vote of any such holders is required pursuant to the terms of any Preferred Stock Designation.
Section
4.4 Common Stock. The powers, preferences and rights of the Common Stock, and the qualifications, limitations or restrictions
thereof are as follows:
(a) Voting
Rights. Except as otherwise required by law, each share of Common Stock shall entitle the record holder thereof as of the applicable
record date to one (1) vote per share in person or by proxy on all matters submitted to a vote of the holders of Common Stock, whether
voting separately as a class or otherwise.
(b) Dividends
and Distributions. Subject to applicable law and the rights and preferences of any holders of any outstanding series of Preferred
Stock or any class or series of stock having a preference over or the right to participate with the Common Stock with respect to the
payment of dividends, holders of Common Stock, as such, shall be entitled to the payment of dividends on the Common Stock when, as and
if declared by the Board of Directors in accordance with applicable law.
2
(c) Liquidation
Rights. In the event of liquidation, dissolution or winding up of the affairs of the Corporation, whether voluntary or involuntary,
after payment or provision for payment of the debts and other liabilities of the Corporation and after making provisions for preferential
and other amounts, if any, to which the holders of Preferred Stock or any class or series of stock having a preference over or the right
to participate with the Common Stock with respect to payments in liquidation shall be entitled, the remaining assets and funds of the
Corporation available for distribution shall be divided among and paid ratably to the holders of all outstanding shares of Common Stock
in proportion to the number of shares held by each such stockholder.
ARTICLE
V.
In
furtherance and not in limitation of the powers conferred by statute, the Board of Directors is expressly authorized to adopt, amend
or repeal the Bylaws of the Corporation. In addition to any vote of the holders of any class or series of stock of the Corporation required
by applicable law or by this Certificate of Incorporation (including any Certificate of Designation in respect of one or more series
of Preferred Stock) or the Bylaws of the Corporation, the adoption, amendment or repeal of the Bylaws of the Corporation by the stockholders
of the Corporation shall require the affirmative vote of the holders of at least two-thirds of the voting power of all of the then outstanding
shares of voting stock of the Corporation entitled to vote generally in an election of directors.
ARTICLE
VI.
Section
6.1 Management. Except as otherwise expressly provided by the DGCL or this Certificate of Incorporation, the business and affairs
of the Corporation shall be managed by or under the direction of the Board of Directors.
Section
6.2 Ballot. Elections of directors (each such director, in such capacity, a “Director”) need not be
by written ballot unless the Bylaws of the Corporation shall so provide.
Section
6.3 Number and Terms of the Board of Directors. Subject to the rights of the holders of any series of Preferred Stock to elect
directors under specified circumstances, the number of directors which shall constitute the whole Board of Directors shall be fixed exclusively
by one or more resolutions adopted from time to time by the Board of Directors, and, at each annual meeting of shareholders, all directors
shall be elected for terms expiring at the next annual meeting of stockholders and until such directors’ successors shall have
been elected and qualified. During any period when the holders of any series of Preferred Stock have the special right to elect additional
directors, then upon commencement and for the duration of the period during which such right continues: (i) the then otherwise total
authorized number of directors of the Corporation shall automatically be increased by such specified number of directors, and the holders
of such series of Preferred Stock shall be entitled to elect the additional directors so provided for or fixed pursuant to said provisions,
and (ii) each such additional director shall serve until such director’s successor shall have been duly elected and qualified,
or until such director’s right to hold such office terminates pursuant to said provisions, whichever occurs earlier, subject to
his or her earlier death, resignation, retirement, disqualification or removal. Except as otherwise provided by this Certificate of Incorporation
(including any Certificate of Designation establishing any series of Preferred Stock), whenever the holders of any series of Preferred
Stock having the special right to elect additional directors are divested of such right pursuant to this Certificate of Incorporation
(including any such Certificate of Designation), the terms of office of all such additional directors elected by the holders of such
series, or elected to fill any vacancies resulting from the death, resignation, disqualification or removal of such additional directors,
shall forthwith terminate and each such director shall cease to be qualified as (and shall cease to be) a director, and the total authorized
number of directors of the Corporation shall be reduced accordingly.
3
Section
6.4 Newly Created Directorships and Vacancies. Except as otherwise required by law and the separate rights of the holders of any
series of Preferred Stock then outstanding, unless the Board of Directors otherwise determines, newly created directorships resulting
from any increase in the authorized number of directors or any vacancies on the Board of Directors resulting from the death, resignation,
disqualification, removal from office or other cause shall be filled exclusively by the affirmative vote of a majority of the Directors
then in office, even though less than a quorum, or by a sole remaining Director (other than any Director elected by the separate vote
of one or more outstanding series of Preferred Stock), and not by the stockholders. Any Director so chosen shall hold office for a term
expiring at the next annual meeting of stockholders and until his or her successor shall be elected and qualified or until his or her
earlier death, resignation, retirement, disqualification, or removal.
Section
6.5 Removal With or Without Cause. Subject to the rights of the holders of any series of Preferred Stock then outstanding, any
Director, or the entire Board of Directors, may otherwise be removed with or without cause by an affirmative vote of at least two-thirds
of the total voting power of all the outstanding shares of capital stock of the Corporation entitled to vote generally in the election
of directors, at a meeting duly called for that purpose.
Section
6.6 Except as may otherwise be set forth in the resolution or resolutions of the Board of Directors providing for the issuance of one
or more series of Preferred Stock, and then only with respect to such series of Preferred Stock, cumulative voting in the election of
directors is specifically denied.
ARTICLE
VII.
Section
7.1 Action by Written Consent. Any action required or permitted to be taken by the stockholders of the Corporation must be effected
at a duly called annual or special meeting of the stockholders of the Corporation (and may not be taken by consent of the stockholders
in lieu of a meeting). In addition to the foregoing, any action required or permitted to be taken by the holders of any series of Preferred
Stock, voting separately as a series or separately as a class with one or more other such series, may be taken without a meeting, without
prior notice and without a vote, to the extent expressly so provided by the applicable Certificate of Designation relating to such series
of Preferred Stock, if a consent or consents in writing, setting forth the action so taken, shall be signed by the holders of outstanding
shares of the relevant series of Preferred Stock having not less than the minimum number of votes that would be necessary to authorize
or take such action at a meeting at which all shares entitled to vote thereon were present and voted and shall be delivered to the Corporation
in accordance with the applicable provisions of the DGCL.
Section
7.2 Special Meetings. Subject to the special rights of the holders of one or more series of Preferred Stock, special meetings
of the stockholders of the Corporation may be called, for any purpose or purposes, at any time only by or at the direction of the Board
of Directors, the Chairperson of the Board of Directors, the Chief Executive Officer or President, and shall not be called by any other
Person. Subject to the special rights of the holders of one or more series of Preferred Stock, special meetings of the stockholders of
the Corporation may not be called by the stockholders of the Corporation or any other Person.
Section
7.3 Notice. Advance notice of stockholder nominations for the election of directors and of other business proposed to be brought
by stockholders before any meeting of the stockholders of the Corporation shall be given in the manner provided in the Bylaws of the
Corporation.
ARTICLE
VIII.
The
affirmative vote of at least two-thirds of the voting power of the outstanding shares is required to amend, alter, change or repeal any
provision contained in this Certificate of Incorporation, in the manner now or hereafter prescribed by statute and all rights conferred
upon stockholders herein are granted subject to this reservation; provided, however, that the affirmative vote of at least
a majority of the voting power of the outstanding shares is required to amend, alter, change or repeal any provision contained in Articles
I, II, and III of this Certificate of Incorporation.
4
If
any provision or provisions of this Certificate of Incorporation shall be held to be invalid, illegal or unenforceable as applied to
any circumstance for any reason whatsoever: (i) the validity, legality and enforceability of such provisions in any other circumstance
and of the remaining provisions of this Certificate of Incorporation (including, without limitation, each portion of any paragraph of
this Certificate of Incorporation containing any such provision held to be invalid, illegal or unenforceable that is not itself held
to be invalid, illegal or unenforceable) shall not, to the fullest extent permitted by applicable law, in any way be affected or impaired
thereby and (ii) to the fullest extent permitted by applicable law, the provisions of this Certificate of Incorporation (including, without
limitation, each such portion of any paragraph of this Certificate of Incorporation containing any such provision held to be invalid,
illegal or unenforceable) shall be construed so as to permit the Corporation to protect its directors, officers, employees and agents
from personal liability in respect of their good faith service to or for the benefit of the Corporation to the fullest extent permitted
by law.
ARTICLE
IX.
No
director or officer of the Corporation shall have any personal liability to the Corporation or its stockholders for monetary damages
for any breach of fiduciary duty as a director or officer, except to the extent such exemption from liability or limitation thereof is
not permitted under the DGCL as the same exists or hereafter may be amended. Any amendment, repeal or modification of this Article
IX, or the adoption of any provision of the Restated Certificate inconsistent with this Article IX, shall not adversely affect
any right or protection of a director or officer of the Corporation with respect to any act or omission occurring prior to such amendment,
repeal, modification or adoption. If the DGCL is amended after approval by the stockholders of this Article IX to authorize corporate
action further eliminating or limiting the personal liability of directors or officers, then the liability of a director or officer of
the Corporation shall be eliminated or limited to the fullest extent permitted by the DGCL as so amended.
ARTICLE
X.
The
Corporation shall have the power to provide rights to indemnification and advancement of expenses to its current and former officers,
directors, employees and agents and to any Person who is or was serving at the request of the Corporation as a director, officer, employee
or agent of another corporation, partnership, joint venture, trust or other enterprise.
To
the fullest extent permitted by the DGCL, as the same exists or as may hereafter be amended, a director or officer of the Corporation
shall not be personally liable to the Corporation or its stockholders for monetary damages for breach of fiduciary duty as a director
or officer. If the DGCL is hereafter amended to authorize corporate action further eliminating or limiting the personal liability of
directors or officers, then the liability of a director or officer of the Corporation shall be eliminated or limited to the fullest extent
permitted by the DGCL as so amended, automatically and without further action, upon the date of such amendment.
Neither
any amendment nor repeal of this Article X, nor the adoption by amendment of this Certificate of Incorporation of any provision
inconsistent with this Article X, shall eliminate or reduce the effect of this Article X in respect of any matter occurring,
or any action or proceeding accruing or arising (or that, but for this Article X, would accrue or arise) prior to such amendment
or repeal or adoption of an inconsistent provision.
5
ARTICLE
XI.
Unless
the Corporation consents in writing to the selection of an alternative forum, (a) the Court of Chancery (the “Chancery Court”)
of the State of Delaware (or, in the event that the Chancery Court does not have jurisdiction, the federal district court for the District
of Delaware or other state courts of the State of Delaware) shall, to the fullest extent permitted by law, be the sole and exclusive
forum for (i) any derivative action, suit or proceeding brought on behalf of the Corporation, (ii) any action, suit or proceeding asserting
a claim of breach of a fiduciary duty owed by any director, officer or stockholder of the Corporation to the Corporation or to the Corporation’s
stockholders, (iii) any action, suit or proceeding arising pursuant to any provision of the DGCL or the bylaws of the Corporation or
this Restated Certificate (as either may be amended from time to time) or (iv) any action, suit or proceeding asserting a claim against
the Corporation governed by the internal affairs doctrine; and (b) subject to the preceding provisions of this Article XI, the
federal district courts of the United States of America shall be the exclusive forum for the resolution of any complaint asserting a
cause or causes of action arising under the Securities Act, including all causes of action asserted against any defendant to such complaint.
If any action the subject matter of which is within the scope of clause (a) of the immediately preceding sentence is filed in a court
other than the courts in the State of Delaware (a “Foreign Action”) in the name of any stockholder, such stockholder
shall be deemed to have consented to (x) the personal jurisdiction of the state and federal courts in the State of Delaware in connection
with any action brought in any such court to enforce the provisions of clause (a) of the immediately preceding sentence and (y) having
service of process made upon such stockholder in any such action by service upon such stockholder’s counsel in the Foreign Action
as agent for such stockholder.
Any
Person purchasing or otherwise acquiring any interest in any security of the Corporation shall be deemed to have notice of and consented
to this Article XI. This Article XI is intended to benefit and may be enforced by the Corporation, its officers and directors,
the underwriters to any offering giving rise to such complaint, and any other professional or entity whose profession gives authority
to a statement made by that Person and who has prepared or certified any part of the documents underlying the offering. Notwithstanding
the foregoing, the provisions of this Article XI shall not apply to suits brought to enforce any liability or duty created by
the Exchange Act, or any other claim for which the federal courts of the United States have exclusive jurisdiction.
If
any provision or provisions of this Article XI shall be held to be invalid, illegal or unenforceable as applied to any circumstance
for any reason whatsoever, (a) the validity, legality and enforceability of such provisions in any other circumstance and of the remaining
provisions of this Article XI (including, without limitation, each portion of any paragraph of this Article XI containing
any such provision held to be invalid, illegal or unenforceable that is not itself held to be invalid, illegal or unenforceable) shall
not in any way be affected or impaired thereby and (b) the application of such provision to other Persons and circumstances shall not
in any way be affected or impaired thereby.
ARTICLE
XII.
If
any provision or provisions of this Certificate of Incorporation shall be held to be invalid, illegal or unenforceable as applied to
any circumstance for any reason whatsoever: (i) the validity, legality and enforceability of such provisions in any other circumstance
and of the remaining provisions of this Certificate of Incorporation (including, without limitation, each portion of any paragraph of
this Certificate of Incorporation containing any such provision held to be invalid, illegal or unenforceable that is not itself held
to be invalid, illegal or unenforceable) shall not in any way be affected or impaired thereby and (ii) to the fullest extent possible
and without limiting any other provisions of this Certificate of Incorporation (or any other provision of the Bylaws of the Corporation
or any agreement entered into by the Corporation), the provisions of this Certificate of Incorporation (including, without limitation,
each such portion of any paragraph of this Certificate of Incorporation containing any such provision held to be invalid, illegal or
unenforceable) shall be construed so as to permit the Corporation to protect its directors, officers, employees and agents from personal
liability in respect of their good faith service to, or for the benefit of, the Corporation to the fullest extent permitted by law.
6
To
the fullest extent permitted by law, each and every Person purchasing or otherwise acquiring any interest (of any nature whatsoever)
in any shares of the capital stock of the Corporation shall be deemed, by reason of and from and after the time of such purchase or other
acquisition, to have notice of and to have consented to all of the provisions of (a) this Certificate of Incorporation, (b) the Bylaws
of the Corporation and (c) any amendment to this Certificate of Incorporation or the Bylaws of the Corporation enacted or adopted in
accordance with this Certificate of Incorporation, the Bylaws of the Corporation and applicable law.
ARTICLE
XIII.
Section
13.1 In recognition and anticipation that members of the Board of Directors who are not employees of the Corporation or a majority owned
subsidiary thereof (“Non-Employee Directors”) and their respective Affiliates may now engage and may continue
to engage in the same or similar activities or related lines of business as those in which the Corporation, directly or indirectly, may
engage and/or other business activities that overlap with or compete with those in which the Corporation, directly or indirectly, may
engage, the provisions of this Article XIII are set forth to regulate and define the conduct of certain affairs of the Corporation
with respect to certain classes or categories of business opportunities as they may involve any of the Non-Employee Directors or their
respective Affiliates and the powers, rights, duties and liabilities of the Corporation and its directors, officers and stockholders
in connection therewith.
Section
13.2 No Non-Employee Director (including any Non-Employee Director who serves as an officer of the Corporation in both his or her director
and officer capacities) or his or her Affiliates (collectively, “Identified Persons” and, each individually,
an “Identified Person”) shall, to the fullest extent permitted by law, have any duty to refrain from directly
or indirectly (1) engaging in the same or similar business activities or lines of business in which the Corporation or any of its Affiliates
now engages or proposes to engage or (2) otherwise competing with the Corporation or any of its Affiliates, and, to the fullest extent
permitted by law, no Identified Person shall be liable to the Corporation or its stockholders or to any Affiliate of the Corporation
for breach of any fiduciary duty solely by reason of the fact that such Identified Person engages in any such activities. To the fullest
extent permitted by law, the Corporation hereby renounces any interest or expectancy in, or right to be offered an opportunity to participate
in, any business opportunity which may be a corporate opportunity for an Identified Person and the Corporation or any of its Affiliates,
except as provided in Section 13.3. Subject to Section 13.3, in the event that any Identified Person acquires knowledge
of a potential transaction or other business opportunity which may be a corporate opportunity for itself, herself or himself and the
Corporation or any of its Affiliates, such Identified Person shall, to the fullest extent permitted by law, have no duty to communicate
or offer such transaction or other business opportunity to the Corporation or any of its Affiliates and, to the fullest extent permitted
by law, shall not be liable to the Corporation or its stockholders or to any Affiliate of the Corporation for breach of any fiduciary
duty as a stockholder, director or officer of the Corporation solely by reason of the fact that such Identified Person pursues or acquires
such corporate opportunity for itself, herself or himself, offers or directs such corporate opportunity to another Person, or does not
communicate information regarding such corporate opportunity to the Corporation or any Affiliate of the Corporation.
Section
13.3 The Corporation does not renounce its interest in any corporate opportunity offered to any Non-Employee Director (including any
Non-Employee Director who serves as an officer of the Corporation in both his or her director and officer capacities) if such opportunity
is expressly offered to such Person solely in his or her capacity as a director or officer of the Corporation, and the provisions of
Section 13.2 shall not apply to any such corporate opportunity.
7
Section
13.4 In addition to and notwithstanding the foregoing provisions of this Article XIII, a corporate opportunity shall not be deemed
to be a potential corporate opportunity for the Corporation if it is a business opportunity that (i) the Corporation is neither financially
or legally able, nor contractually permitted, to undertake, (ii) from its nature, is not in the line of the Corporation’s business
or is of no practical advantage to the Corporation or (iii) is one in which the Corporation has no interest or reasonable expectancy.
Section
13.5 Solely for purposes of this Article XIII, “Affiliate” shall mean (a) in respect of any stockholder,
any Person that, directly or indirectly, is controlled by such stockholder, controls such stockholder or is under common control with
such stockholder and shall include (i) any principal, member, director, manager, partner, stockholder, officer, employee or other representative
of any of the foregoing (other than the Corporation and any entity that is controlled by the Corporation) and (ii) any funds or vehicles
advised by Affiliates of such stockholder, (b) in respect of a Non-Employee Director, any Person that, directly or indirectly, is controlled
by such Non-Employee Director (other than the Corporation and any entity that is controlled by the Corporation) and (c) in respect of
the Corporation, any Person that, directly or indirectly, is controlled by the Corporation.
Section
13.6 To the fullest extent permitted by law, any Person purchasing or otherwise acquiring or holding any interest in any shares of capital
stock of the Corporation shall be deemed to have notice of and to have consented to the provisions of this Article XIII.
ARTICLE
XIV.
Section
14.1 Definitions. As used in this Certificate of Incorporation, the following terms shall have the following meaning:
(a) “Affiliate”
means a Person that directly, or indirectly through one or more intermediaries, controls, or is controlled by, or is under common control
with, another Person;
(b) “Control,”
including the terms “controlling,” “controlled by” and “under common
control with,” means the possession, directly or indirectly, of the power to direct or cause the direction of the management
and policies of a Person, whether through the ownership of voting securities, by contract or otherwise. A Person who is the owner of
ten percent (10%) or more of the outstanding voting stock of any corporation, partnership, unincorporated association or other entity
shall be presumed to have control of such entity, in the absence of proof by a preponderance of the evidence to the contrary. Notwithstanding
the foregoing, a presumption of control shall not apply where such Person holds voting stock, in good faith and not for the purpose of
circumventing this section, as an agent, bank, broker, nominee, custodian or trustee for one or more owners who do not individually or
as a group have control of such entity.
(c) “Exchange
Act” means the U.S. Securities Exchange Act of 1934, as amended, and any applicable rules and regulations promulgated thereunder,
and any successor to such statute, rules or regulations.
(d) “owner,”
including the terms “own” and “owned,” when used with respect to any stock, means
a Person that individually or with or through any of its Affiliates:
(i)
beneficially owns such stock, directly or indirectly; or
8
(ii) has
(a) the right to acquire such stock (whether such right is exercisable immediately or only after the passage of time) pursuant to any
agreement, arrangement or understanding, or upon the exercise of conversion rights, exchange rights, warrants or options, or otherwise;
provided, however, that a Person shall not be deemed the owner of stock tendered pursuant to a tender or exchange offer
made by such Person or any of such Person’s Affiliates until such tendered stock is accepted for purchase or exchange; or (b) the
right to vote such stock pursuant to any agreement, arrangement or understanding; provided, however, that a Person shall
not be deemed the owner of any stock because of such Person’s right to vote such stock if the agreement, arrangement or understanding
to vote such stock arises solely from a revocable proxy or consent given in response to a proxy or consent solicitation made to ten or
more Persons; or
(iii) has
any agreement, arrangement or understanding, for the purpose of acquiring, holding, voting (except voting pursuant to a revocable proxy
or consent as described in item (b) of subsection (ii) above), or disposing such stock, with any other Person that beneficially owns,
or whose Affiliates beneficially own, directly or indirectly, such stock.
(e) “Person”
means any individual, corporation, partnership, limited liability company, unincorporated association or other entity.
(f) “Securities
Act” means the U.S. Securities Act of 1933, as amended, and applicable rules and regulations promulgated thereunder, and
any successor to such statute, rules or regulations.
(g) “stock”
means, with respect to any corporation, capital stock and, with respect to any other entity, any equity interest.
(h) “voting
stock” means stock of any class or series entitled to vote generally in the election of directors and, with respect to
any entity that is not a corporation, any equity interest entitled to vote generally in the election of the governing body of such entity.
Every reference to a percentage of voting stock shall refer to such percentages of the votes of such voting stock.
ARTICLE
XV.
The
name and mailing address of the sole incorporator is as follows:
[●]
[Signature
Page Follows]
9
IN
WITNESS WHEREOF, the Corporation has caused this Certificate of Incorporation to be signed on this ___________day of _________, 2026.
[ELROY], INC.
By:
Name:
Title:
Signature
Page to Certificate of Incorporation
Exhibit
B — Form of Purchaser Bylaws upon Domestication
BYLAWS
OF
[ELROY],
INC.
Dated
as of [ ], 2026
TABLE
OF CONTENTS
Page
ARTICLE I.
CORPORATE OFFICERS
1
Section 1.01
Registered Office
1
Section 1.02
Other Offices
1
ARTICLE II.
MEETINGS OF STOCKHOLDERS
1
Section 2.01
Place of Meetings
1
Section 2.02
Annual Meetings
1
Section 2.03
Special Meetings
1
Section 2.04
Notice of Meetings
1
Section 2.05
Adjournments
2
Section 2.06
Quorum
2
Section 2.07
Organization
2
Section 2.08
Voting; Proxies
3
Section 2.09
Fixing Date for Determination of Stockholders
of Record
3
Section 2.10
List of Stockholders Entitled to Vote
4
Section 2.11
Inspectors of Election
4
Section 2.12
Conduct of Meetings
5
Section 2.13
Advance Notice Procedures for Business Brought
before a Meeting
5
Section 2.14
Advance Notice Procedures for Nominations of
Directors
10
Section 2.15
Delivery to the Corporation
14
ARTICLE III.
BOARD OF DIRECTORS
14
Section 3.01
Powers
14
Section 3.02
Number; Tenure; Qualifications
14
Section 3.03
Election, Qualification and Term of Office
of Directors
15
Section 3.04
Resignation and Vacancies
15
Section 3.05
Regular Meetings
15
Section 3.06
Special Meetings
15
Section 3.07
Place of Meetings; Telephonic Meetings
16
Section 3.08
Quorum; Vote Required for Action
16
Section 3.09
Organization
16
Section 3.10
Action by Unanimous Consent of Directors
16
Section 3.11
Compensation of Directors
16
Section 3.12
Chairperson
16
i
ARTICLE IV.
COMMITTEES
17
Section 4.01
Committees
17
Section 4.02
Committee Minutes
17
Section 4.03
Committee Rules
17
ARTICLE V.
OFFICERS
17
Section 5.01
Officers
17
Section 5.02
Appointment of Officers
17
Section 5.03
Subordinate Officers
17
Section 5.04
Removal and Resignation of Officers
18
Section 5.05
Vacancies in Offices
18
Section 5.06
Representation of Shares of Other Entities
18
Section 5.07
Authority and Duties of Officers
18
Section 5.08
Compensation
18
ARTICLE VI.
RECORDS
18
Section 6.01
Records
18
ARTICLE VII.
GENERAL MATTERS
19
Section 7.01
Execution of Corporate Contracts and Instruments
19
Section 7.02
Stock Certificates
19
Section 7.03
Special Designation of Certificates
19
Section 7.04
Lost Certificates
19
Section 7.05
Shares Without Certificates
20
Section 7.06
Construction; Definitions
20
Section 7.07
Dividends
20
Section 7.08
Fiscal Year
20
Section 7.09
Seal
20
Section 7.10
Transfer of Stock
20
Section 7.11
Stock Transfer Agreements
20
Section 7.12
Registered Stockholders
20
Section 7.13
Waiver of Notice
21
ARTICLE VIII.
NOTICE
21
Section 8.01
Delivery of Notice; Notice by Electronic Transmission
21
ii
ARTICLE IX.
INDEMNIFICATION
22
Section 9.01
Indemnification of Directors and Officers
22
Section 9.02
Indemnification of Others
22
Section 9.03
Prepayment of Expenses
22
Section 9.04
Determination; Claim
22
Section 9.05
Non-Exclusivity of Rights
22
Section 9.06
Insurance
23
Section 9.07
Other Indemnification
23
Section 9.08
Continuation of Indemnification
23
Section 9.09
Amendment or Repeal; Interpretation
23
ARTICLE X.
AMENDMENTS
24
ARTICLE XI.
DEFINITIONS
24
iii
ARTICLE
I.
CORPORATE
OFFICERS
Section
1.01 Registered Office. The address of the registered office of [Elroy], Inc., a Delaware corporation (the “Corporation”),
in the State of Delaware, and the name of its registered agent at such address, shall be as set forth in the Corporation’s certificate
of incorporation, as the same may be amended, restated or otherwise modified from time to time (the “Certificate of Incorporation”).
Section
1.02 Other Offices. The Corporation may have additional offices at any place or places, within or outside the State of Delaware,
as the Corporation’s board of directors (the “Board of Directors”) may from time to time establish or
as the business of the Corporation may require.
ARTICLE
II.
MEETINGS
OF STOCKHOLDERS
Section
2.01 Place of Meetings. Meetings of stockholders of the Corporation (the “Stockholders”), may be held
at any place, within or without the State of Delaware, as may be designated by or in the manner determined by the Board of Directors.
In the absence of such designation, meetings of Stockholders shall be held at the principal executive office of the Corporation. The
Board of Directors may, in its sole discretion, determine that a meeting of Stockholders shall not be held at any place, but may instead
be held solely by means of remote communication authorized by and in accordance with Section 211(a) of the General Corporation Law of
the State of Delaware (the “DGCL”).
Section
2.02 Annual Meetings. The annual meeting of Stockholders shall be held for the election of members of the Board of Directors (the
“Directors”) at such date and time as may be designated by or in the manner determined by resolution of the
Board of Directors from time to time. Any other business as may be properly brought before the annual meeting of Stockholders may be
transacted at the annual meeting of Stockholders. The Board of Directors may postpone, reschedule or cancel any annual meeting of Stockholders
previously scheduled by the Board of Directors.
Section
2.03 Special Meetings. Special meetings of the Stockholders may be called only by such persons and only in such manner as set
forth in the Certificate of Incorporation. Special meetings of Stockholders validly called in accordance with this Section 2.03
of these bylaws (as the same may be amended, restated or otherwise modified from time to time, these “Bylaws”)
may be held at such date and time as specified in the applicable notice of such meeting. No business may be transacted at any special
meeting of Stockholders other than the business specified in the notice of such meeting. The Board of Directors may postpone, reschedule
or cancel any previously scheduled special meeting of the Stockholders.
Section
2.04 Notice of Meetings. Whenever Stockholders are required or permitted to take any action at a meeting of Stockholders, a notice
of the meeting shall be given that shall state the place, if any, date and hour of the meeting, the means of remote communications, if
any, by which Stockholders and proxy holders may be deemed to be present in person and vote at such meeting, the record date for determining
the Stockholders entitled to vote at the meeting (if such date is different from the record date for Stockholders entitled to notice
of the meeting) and, in the case of a special meeting of the Stockholders, the purpose or purposes for which the meeting is called. Unless
otherwise required by applicable law, the Certificate of Incorporation or these Bylaws, the notice of any meeting of Stockholders shall
be given not less than 10 nor more than 60 days before the date of the meeting to each Stockholder entitled to vote at the meeting as
of the record date for determining the Stockholders entitled to notice of the meeting. If mailed, such notice shall be deemed to be given
when deposited in the United States mail, postage prepaid, directed to the Stockholder at such Stockholder’s address as it appears
on the records of the Corporation.
1
Section
2.05 Adjournments. Any meeting of Stockholders, annual or special, may be adjourned from time to time by the chairperson of the
meeting (or by the Stockholders in accordance with Section 2.06) to reconvene at the same or some other place, if any, and the
same or some other time, and notice need not be given to the Stockholders of any such adjourned meeting if the time and place, if any,
thereof, and the means of remote communications, if any, by which Stockholders and proxy holders may be deemed to be present in person
and vote at such adjourned meeting are announced at the meeting at which the adjournment is taken. At the adjourned meeting of Stockholders,
the Corporation may transact any business which might have been transacted at the original meeting of Stockholders. If the adjournment
is for more than 30 days, a notice of the adjourned meeting of Stockholders shall be given to each Stockholder of record entitled to
vote at the adjourned meeting of Stockholders. If after the adjournment a new record date for determination of Stockholders entitled
to vote is fixed for the adjourned meeting of Stockholders, the Board of Directors shall fix a new record date for determining Stockholders
entitled to notice of such adjourned meeting of Stockholders in accordance with Section 2.09(a) of these Bylaws, and shall give
notice of the adjourned meeting of Stockholders to each Stockholder of record entitled to vote at such adjourned meeting of Stockholders
as of the record date fixed for notice of such adjourned meeting of Stockholders. If mailed, such notice shall be deemed to be given
when deposited in the United States mail, postage prepaid, directed to the Stockholder at such Stockholder’s address as it appears
on the records of the Corporation.
Section
2.06 Quorum. At any meeting of the Stockholders, the holders of a majority of the voting power of the issued and outstanding shares
of capital stock of the Corporation (“Stock”) entitled to vote at the meeting, present in person, or by remote
communication, if applicable, or represented by proxy, shall constitute a quorum for all purposes, unless or except to the extent that
the presence of a larger number may be required by applicable law, the rules of any stock exchange upon which the Corporation’s
securities are listed, the Certificate of Incorporation or these Bylaws. In the absence of a quorum, then either (i) the chairperson
of the meeting or (ii) the Stockholders by the affirmative vote of a majority of the voting power of the outstanding shares of Stock
entitled to vote thereon, present in person, or by remote communication, if applicable, or represented by proxy, shall have the power
to recess or adjourn the meeting of Stockholders from time to time in the manner provided in Section 2.05 of these Bylaws until
a quorum is present or represented. At any such recessed or adjourned meeting at which a quorum is present or represented, any business
may be transacted that might have been transacted at the meeting as originally noticed. Where a separate vote by a class or classes or
series of Stock is required by applicable law or the Certificate of Incorporation, the holders of a majority of voting power of the shares
of such class or classes or series of Stock issued and outstanding and entitled to vote on such matter, present in person, or by remote
communication, if applicable, or represented by proxy, shall constitute a quorum entitled to take action with respect to the vote on
such matter. A quorum, once established at a meeting, shall not be broken by the withdrawal of enough votes to leave less than a quorum.
Section
2.07 Organization. Meetings of Stockholders shall be presided over by the Chairperson or by such other officer of the Corporation
or Director as designated by the Board of Directors or the Chairperson, or in the absence of such person or designation, by a chairperson
chosen at the meeting by the affirmative vote of a majority of the voting power of the outstanding shares of Stock present or represented
at the meeting and entitled to vote at the meeting (provided there is a quorum). The Secretary of the Corporation (“Secretary”)
shall act as secretary of the meeting, but in his or her absence, the chairperson of the meeting may appoint any person to act as secretary
of the meeting.
2
Section
2.08 Voting; Proxies.
(a) Each
Stockholder entitled to vote at any meeting of Stockholders shall be entitled to the number of votes, if any, for each share of Stock
held of record by such Stockholder which has voting power upon the matter in question as set forth in the Certificate of Incorporation
or, if such voting power is not set forth in the Certificate of Incorporation, one vote per share. Voting at meetings of Stockholders
need not be by written ballot. Unless otherwise provided in the Certificate of Incorporation, at all meetings of Stockholders for the
election of Directors at which a quorum is present, a plurality of the votes cast shall be sufficient to elect Directors. No holder of
shares of Stock shall have the right to cumulate votes. All other elections and questions presented to the Stockholders at a meeting
at which a quorum is present shall be decided by the affirmative vote of the holders of a majority in voting power of votes cast (excluding
abstentions and broker non-votes) on such matter, unless a different or minimum vote is required by the Certificate of Incorporation,
these Bylaws, the rules or regulations of any stock exchange applicable to the Corporation, or applicable law or pursuant to any regulation
applicable to the Corporation or its securities, in which case such different or minimum vote shall be the applicable vote on the matter.
(b) Each
Stockholder entitled to vote at a meeting of Stockholders or express consent to corporate action in writing without a meeting (if permitted
by the Certificate of Incorporation) may authorize another person or persons to act for such Stockholder by proxy authorized by an instrument
in writing or by a transmission permitted by law, including Rule 14a-19 promulgated under the Securities Exchange Act of 1934, as amended,
filed in accordance with the procedure established for the meeting, but no such proxy shall be voted or acted upon after three (3) years
from its date, unless the proxy provides for a longer period. The revocability of a proxy that states on its face that it is irrevocable
shall be governed by the provisions of Section 212 of the DGCL. A Stockholder may revoke any proxy which is not irrevocable by attending
the meeting and voting in person (or by means of remote communication, if applicable) or by delivering to the Secretary a revocation
of the proxy or a new proxy bearing a later date. A proxy may be in the form of an electronic transmission which sets forth or is submitted
with information from which it can be determined that the transmission was authorized by the Stockholder.
Any
stockholder directly or indirectly soliciting proxies from other stockholders must use a proxy card color other than white, which shall
be reserved for the exclusive use by the Board of Directors.
Section
2.09 Fixing Date for Determination of Stockholders of Record.
(a) In
order that the Corporation may determine the Stockholders entitled to notice of or vote at any meeting of Stockholders or any adjournment
thereof, the Board of Directors may fix a record date, which record date shall not precede the date upon which the resolution fixing
the record date is adopted by the Board of Directors, and which record date shall, unless otherwise required by applicable law, not be
more than 60 nor less than 10 days before the date of such meeting. If the Board of Directors so fixes a date, such date shall also be
the record date for determining the Stockholders entitled to vote at such meeting unless the Board of Directors determines, at the time
it fixes such record date, that a later date on or before the date of the meeting shall be the date for making such determination. If
no record date is fixed by the Board of Directors, the record date for determining Stockholders entitled to notice of and to vote at
a meeting of Stockholders shall be at the close of business on the day immediately preceding the day on which notice is given, or, if
notice is waived, at the close of business on the day immediately preceding the day on which the meeting is held. A determination of
Stockholders of record entitled to notice of or to vote at a meeting of Stockholders shall apply to any adjournment of the meeting; provided,
however, that the Board of Directors may fix a new record date for determination of Stockholders entitled to vote at the adjourned
meeting, and in such case shall also fix as the record date for Stockholders entitled to notice of such adjourned meeting the same or
an earlier date as that fixed for determination of Stockholders entitled to vote in accordance with the foregoing provisions of this
Section 2.09(a) at the adjourned meeting.
(b) In
order that the Corporation may determine the Stockholders entitled to receive payment of any dividend or other distribution or allotment
of any rights, or entitled to exercise any rights in respect of any change, conversion or exchange of Stock or for the purpose of any
other lawful action, the Board of Directors may fix a record date, which record date shall not precede the date upon which the resolution
fixing the record date is adopted, and which record date shall not be more than sixty (60) days prior to such action. If no such record
date is fixed, the record date for determining Stockholders for any such purpose shall be at the close of business on the day on which
the Board of Directors adopts the resolution relating thereto.
3
Section
2.10 List of Stockholders Entitled to Vote. The Corporation shall prepare, at least 10 days before every meeting of Stockholders,
a complete list of the Stockholders entitled to vote at the meeting (provided, however, if the record date for determining the
Stockholders entitled to vote is less than 10 days before the date of the meeting, the list shall reflect the Stockholders entitled to
vote as of the 10th day before the meeting date), arranged in alphabetical order, and showing the address of each Stockholder and the
number of shares registered in the name of each Stockholder as of the record date (or such other date). The Corporation shall not be
required to include electronic mail addresses or other electronic contact information on such list. Such list shall be open to the examination
of any Stockholder, for any purpose germane to the meeting at least ten (10) days prior to the meeting date (i) on a reasonably accessible
electronic network, provided that the information required to gain access to such list is provided with the notice of the meeting
or (ii) during ordinary business hours at the principal place of business of the Corporation. In the event that the Corporation determines
to make the list available on an electronic network, the Corporation may take reasonable steps to ensure that such information is available
only to Stockholders. Such list shall presumptively determine the identity of the Stockholders entitled to vote at the meeting and the
number of shares held by each of them. Except as otherwise provided by law, the “stock ledger” shall be the only evidence
as to who are the Stockholders entitled to examine the list of Stockholders required by this Section 2.10 or to vote in person
or by proxy at any meeting of Stockholders. For purposes of these Bylaws, the term “stock ledger” means one or more records
administered by or on behalf of the Corporation in which the names of all of the Corporation’s Stockholders of record, the address
and number of shares registered in the name of each such Stockholder, and all issuances and transfers of Stock are recorded.
Section
2.11 Inspectors of Election. The Corporation may, and shall if required by law, in advance of any meeting of Stockholders, appoint
one or more inspectors of election, who may be employees of the Corporation, to act at the meeting or any adjournment thereof and to
make a written report thereof. The Corporation may designate one or more persons as alternate inspectors to replace any inspector who
fails to act. In the event that no inspector so appointed or designated is able to act at a meeting of Stockholders, the person presiding
at the meeting may, and to the extent required by law, shall appoint one or more inspectors to act at the meeting. Each inspector, before
entering upon the discharge of his or her duties, shall take and sign an oath to execute faithfully the duties of inspector with strict
impartiality and according to the best of his or her ability. Any report or certificate made by the inspectors of election is prima facie
evidence of the facts stated therein. The inspector or inspectors of election may appoint such persons to assist them in performing their
duties as they determine. The inspector or inspectors so appointed or designated shall (i) ascertain the number of shares of Stock outstanding
and the voting power of each such share, (ii) determine the number of shares of Stock represented at the applicable meeting of the Stockholders
and the validity of proxies and ballots, (iii) count and tabulate all votes and ballots, (iv) determine and retain for a reasonable period
a record of the disposition of any challenges made to any determination by the inspectors, and (v) certify their determination of the
number of shares of Stock represented at the meeting and such inspectors’ count of all votes and ballots. Such certification and
report shall specify such other information as may be required by applicable law. In determining the validity and counting of proxies
and ballots cast at any meeting of Stockholders, the inspectors may consider such information as is permitted by applicable law. No person
who is a candidate for an office at an election may serve as an inspector at such election.
4
Section
2.12 Conduct of Meetings. The date and time of the opening and the closing of the polls for each matter upon which the Stockholders
will vote at a meeting of the Stockholders shall be announced at the meeting by the person presiding over the meeting designated in accordance
with Section 2.07. After the polls close, no ballots, proxies or votes or any revocations or changes thereto may be accepted.
The Board of Directors may adopt by resolution such rules and regulations for the conduct of the meeting of Stockholders as it shall
deem appropriate. Except to the extent inconsistent with such rules and regulations as adopted by the Board of Directors, the person
presiding over any meeting of Stockholders shall have the right and authority to convene and (for any or no reason) to recess and/or
adjourn the meeting, to prescribe such rules, regulations and procedures and to do all such acts as, in the judgment of such presiding
person, are appropriate for the proper conduct of the meeting. Such rules, regulations or procedures, whether adopted by the Board of
Directors or prescribed by the presiding person of the meeting, may include, without limitation, the following: (i) the establishment
of an agenda or order of business for the meeting; (ii) rules and procedures for maintaining order at the meeting and the safety of those
present; (iii) limitations on attendance at or participation in the meeting to Stockholders entitled to vote at the meeting, their duly
authorized and constituted proxies or such other persons as the presiding person of the meeting shall determine; (iv) restrictions on
entry to the meeting after the time fixed for the commencement thereof; and (v) limitations on the time allotted to questions or comments
by participants. The presiding person at any meeting of Stockholders, in addition to making any other determinations that may be appropriate
to the conduct of the meeting, shall, if the facts warrant, determine that a matter or business was not properly brought before the meeting
and if such presiding person should so determine, such presiding person shall so declare to such meeting and any such matter or business
not properly brought before the meeting shall not be transacted or considered. Unless and to the extent determined by the Board of Directors
or the person presiding over the applicable meeting of Stockholders, meetings of Stockholders shall not be required to be held in accordance
with the rules of parliamentary procedure.
Section
2.13 Advance Notice Procedures for Business Brought before a Meeting.
(a) At
an annual meeting of the stockholders, only such business shall be conducted as shall have been properly brought before the meeting.
To be properly brought before an annual meeting, business must be (i) specified in a notice of meeting given by or at the direction of
the Board of Directors, (ii) if not specified in a notice of meeting, otherwise brought before the meeting by or at the direction of
the Board of Directors or the Chairman of the Board or (iii) otherwise properly brought before the meeting by a stockholder present in
person who (A) (1) was a record owner of shares of the Corporation both at the time of giving the notice provided for in this Section
2.13 and at the time of the meeting, (2) is entitled to vote at the meeting, and (3) has complied with this Section 2.13 in
all applicable respects or (B) properly made such proposal in accordance with Rule 14a-8 under the Securities Exchange Act of 1934, as
amended, and the rules and regulations thereunder (as so amended and inclusive of such rules and regulations, the “Exchange
Act”). The foregoing clause (iii) shall be the exclusive means for a stockholder to propose business to be brought before
an annual meeting of the stockholders. The only matters that may be brought before a special meeting are the matters specified in the
notice of meeting given by or at the direction of the person calling the meeting pursuant to Section 2.04, and stockholders shall
not be permitted to propose business to be brought before a special meeting of the stockholders. For purposes of this Section 2.13,
“present in person” shall mean that the stockholder proposing that the business be brought before the annual meeting of the
Corporation, or a qualified representative of such proposing stockholder, appear at such annual meeting, either in person or by means
of remote communication. A “qualified representative” of such proposing stockholder shall be a duly authorized officer, manager
or partner of such stockholder or any other person authorized by a writing executed by such stockholder or an electronic transmission
delivered by such stockholder to act for such stockholder as proxy at the meeting of stockholders and such person must produce such writing
or electronic transmission, or a reliable reproduction of the writing or electronic transmission, at the meeting of stockholders. Stockholders
seeking to nominate persons for election to the Board of Directors must comply with Section 2.14 and this Section 2.13
shall not be applicable to nominations except as expressly provided in Section 2.14.
5
(b) Without
qualification, for business to be properly brought before an annual meeting by a stockholder, the stockholder must (i) provide Timely
Notice (as defined below) thereof in writing and in proper form to the Secretary of the Corporation and (ii) provide any updates or supplements
to such notice at the times and in the forms required by this Section 2.13. To be timely, a stockholder’s notice must be
delivered to, or mailed and received at, the principal executive offices of the Corporation not less than ninety (90) days nor more than
one hundred twenty (120) days prior to the one-year anniversary of the preceding year’s annual meeting; provided, however,
that if the date of the annual meeting is more than thirty (30) days before or more than sixty (60) days after such anniversary date,
or if no annual meeting was held in the preceding year, notice by the stockholder to be timely must be so delivered, or mailed and received,
not more than the hundred twentieth (120th) day prior to such annual meeting and not later than (i) the ninetieth (90th) day prior to
such annual meeting or, (ii) if later, the tenth (10th) day following the day on which public disclosure of the date of such annual meeting
was first made by the Corporation (such notice within such time periods, “Timely Notice”). In no event shall
any adjournment or postponement of an annual meeting or the announcement thereof commence a new time period for the giving of Timely
Notice as described above.
(c) To
be in proper form for purposes of this Section 2.13, a stockholder’s notice to the Secretary shall set forth:
(i) As
to each Proposing Person (as defined below), (A) the name and address of such Proposing Person (including, if applicable, the name and
address that appear on the Corporation’s books and records), (B) the class or series and number of shares of the Corporation that
are, directly or indirectly, owned of record or beneficially owned (within the meaning of Rule 13d-3 under the Exchange Act) by such
Proposing Person, except that such Proposing Person shall in all events be deemed to beneficially own any shares of any class or series
of the Corporation as to which such Proposing Person has a right to acquire beneficial ownership at any time in the future, (C) the date
or dates such shares were acquired, (D) the investment intent of such acquisition and (E) any pledge by such Proposing Person with respect
to any of such shares (the disclosures to be made pursuant to the foregoing clauses (A) through (E) are referred to as “Stockholder
Information”);
(ii)
As to each Proposing Person,
(A) the
material terms and conditions of any “derivative security” (as such term is defined in Rule 16a-1(c) under the Exchange Act)
that constitutes a “call equivalent position” (as such term is defined in Rule 16a-1(b) under the Exchange Act) or a “put
equivalent position” (as such term is defined in Rule 16a-1(h) under the Exchange Act) or other derivative or synthetic arrangement
in respect of any class or series of shares of the Corporation (“Synthetic Equity Position”) that is, directly
or indirectly, held or maintained by, held for the benefit of, or involving such Proposing Person, including, without limitation,
(1) any
option, warrant, convertible security, stock appreciation right, future or similar right with an exercise or conversion privilege or
a settlement payment or mechanism at a price related to any class or series of shares of the Corporation or with a value derived in whole
or in part from the value of any class or series of shares of the Corporation,
(2) any
derivative or synthetic arrangement having the characteristics of a long position or a short position in any class or series of shares
of the Corporation, including, without limitation, a stock loan transaction, a stock borrow transaction, or a share repurchase transaction
or
6
(3) any
contract, derivative, swap or other transaction or series of transactions designed to
(a) produce
economic benefits and risks that correspond substantially to the ownership of any class or
series of shares of the Corporation,
(b) mitigate
any loss relating to, reduce the economic risk (of ownership or otherwise) of, or manage
the risk of share price decrease in, any class or series of shares of the Corporation, or
(c) increase
or decrease the voting power in respect of any class or series of shares of the Corporation
held or maintained by, held for the benefit of, or involving such Proposing Person,
including,
without limitation, due to the fact that the value of such contract, derivative, swap or other transaction or series of transactions
is determined by reference to the price, value or volatility of any class or series of shares of the Corporation, whether or not such
instrument, contract or right shall be subject to settlement in the underlying class or series of shares of the Corporation, through
the delivery of cash or other property, or otherwise, and without regard to whether the holder thereof may have entered into transactions
that hedge or mitigate the economic effect of such instrument, contract or right, or any other direct or indirect opportunity to profit
or share in any profit derived from any increase or decrease in the price or value of any class or series of shares of the Corporation;
provided
that, for the purposes of the definition of “Synthetic Equity Position,” the term “derivative security” shall
also include any security or instrument that would not otherwise constitute a “derivative security” as a result of any feature
that would make any conversion, exercise or similar right or privilege of such security or instrument becoming determinable only at some
future date or upon the happening of a future occurrence, in which case the determination of the amount of securities into which such
security or instrument would be convertible or exercisable shall be made assuming that such security or instrument is immediately convertible
or exercisable at the time of such determination; and, provided, further, that any Proposing Person satisfying the requirements
of Rule 13d-1(b)(1) under the Exchange Act (other than a Proposing Person that so satisfies Rule 13d-1(b)(1) under the Exchange Act solely
by reason of Rule 13d-1(b)(1)(ii)(E)) shall not be required to disclose any Synthetic Equity Position that is, directly or indirectly,
held or maintained by, held for the benefit of, or involving such Proposing Person as a hedge with respect to a bona fide derivatives
trade or position of such Proposing Person arising in the ordinary course of such Proposing Person’s business as a derivatives
dealer,
(B) any
rights to dividends on the shares of any class or series of shares of the Corporation owned beneficially by such Proposing Person that
are separated or separable from the underlying shares of the Corporation,
(C) any
material pending or threatened legal proceeding in which such Proposing Person is a party or material participant involving the Corporation
or any of its officers or directors, or any affiliate of the Corporation,
7
(D) any
other material relationship between such Proposing Person, on the one hand, and the Corporation or any affiliate of the Corporation,
on the other hand,
(E) any
direct or indirect material interest in any material contract or agreement of such Proposing Person with the Corporation or any affiliate
of the Corporation (including, in any such case, any employment agreement, collective bargaining agreement or consulting agreement),
(F) any
proportionate interest in shares of the Corporation or a Synthetic Equity Position held, directly or indirectly, by a general or limited
partnership, limited liability company or similar entity in which any such Proposing Person (1) is a general partner or, directly or
indirectly, beneficially owns an interest in a general partner of such general or limited partnership or (2) is the manager, managing
member or, directly or indirectly, beneficially owns an interest in the manager or managing member of such limited liability company
or similar entity;
(G) a
representation that such Proposing Person intends or is part of a group which intends to deliver a proxy statement or form of proxy to
holders of at least the percentage of the Corporation’s outstanding capital stock required to approve or adopt the proposal or
otherwise solicit proxies from stockholders in support of such proposal and
(H) any
other information relating to such Proposing Person that would be required to be disclosed in a proxy statement or other filing required
to be made in connection with solicitations of proxies or consents by such Proposing Person in support of the business proposed to be
brought before the meeting pursuant to Section 14(a) of the Exchange Act (the disclosures to be made pursuant to the foregoing clauses
(A) through (G) are referred to as “Disclosable Interests”); provided, however, that Disclosable
Interests shall not include any such disclosures with respect to the ordinary course business activities of any broker, dealer, commercial
bank, trust company or other nominee who is a Proposing Person solely as a result of being the stockholder directed to prepare and submit
the notice required by these Bylaws on behalf of a beneficial owner; and
(iii) As
to each item of business that the stockholder proposes to bring before the annual meeting, (A) a brief description of the business desired
to be brought before the annual meeting, the reasons for conducting such business at the annual meeting and any material interest in
such business of each Proposing Person, (B) the text of the proposal or business (including the text of any resolutions proposed for
consideration and in the event that such business includes a proposal to amend the Bylaws, the language of the proposed amendment), (C)
a reasonably detailed description of all agreements, arrangements and understandings (x) between or among any of the Proposing Persons
or (y) between or among any Proposing Person and any other record or beneficial holder(s) or persons(s) who have a right to acquire beneficial
ownership at any time in the future of the shares of any class or series of the Corporation or any other person or entity (including
their names) in connection with the proposal of such business by such stockholder, and (D) any other information relating to such item
of business that would be required to be disclosed in a proxy statement or other filing required to be made in connection with solicitations
of proxies in support of the business proposed to be brought before the meeting pursuant to Section 14(a) of the Exchange Act; provided,
however, that the disclosures required by this paragraph (iii) shall not include any disclosures with respect to any broker, dealer,
commercial bank, trust company or other nominee who is a Proposing Person solely as a result of being the stockholder directed to prepare
and submit the notice required by these Bylaws on behalf of a beneficial owner.
(iv) An
acknowledgement that if the Proposing Person giving the notice (or such Proposing Person’s qualified representative) does not appear
at such meeting (including virtually in the case of a meeting held solely by means of remote communication) to present the proposed business
the Corporation need not present such proposed business for a vote at such meeting, notwithstanding that proxies in respect of such vote
may have been received by the Corporation;
8
(v) A
representation as to whether or not the Proposing Person intends (or is part of a group that intends) to (1) deliver a proxy statement
and form of proxy to holders of at least the percentage of the Corporation’s voting shares required under the DGCL, the Certificate
of Incorporation and these bylaws to carry the proposal (an affirmative statement of such intent being a “Solicitation Notice”)
or (2) otherwise engage in a solicitation (within the meaning of Rule 14a-1(l) under the Exchange Act) with respect to the proposal,
and if so, the name of each participant (as defined in Item 4 of Schedule 14A under the Exchange Act) in such solicitation; and
(vi) such
written consent of the Proposing Person to the public disclosure of information provided to the Corporation pursuant to this Section
2.13.
(d) For
purposes of this Section 2.13, the term “Proposing Person” shall mean (i) the stockholder providing
the notice of business proposed to be brought before an annual meeting, (ii) the beneficial owner or beneficial owners, if different,
on whose behalf the notice of the business proposed to be brought before the annual meeting is made, and (iii) any participant (as defined
in paragraphs (a)(ii)-(vi) of Instruction 3 to Item (4) of Schedule 14A) with such stockholder in such solicitation.
(e) The
Board of Directors may request that any Proposing Person furnish such additional information as may be reasonably required by the Board
of Directors. Such Proposing Person shall provide such additional information within ten (10) days after it has been requested by the
Board of Directors.
(f) A
Proposing Person shall update and supplement its notice to the Corporation of its intent to propose business at an annual meeting, if
necessary, so that the information provided or required to be provided in such notice pursuant to this Section 2.13 shall be true
and correct as of the record date for stockholders entitled to vote at the meeting and as of the date that is ten (10) business days
prior to the meeting or any adjournment or postponement thereof, and such update and supplement shall be delivered to, or mailed and
received by, the Secretary at the principal executive offices of the Corporation not later than five (5) business days after the record
date for stockholders entitled to vote at the meeting (in the case of the update and supplement required to be made as of such record
date), and not later than eight (8) business days prior to the date for the meeting or, if practicable, any adjournment or postponement
thereof (and, if not practicable, on the first practicable date prior to the date to which the meeting has been adjourned or postponed)
(in the case of the update and supplement required to be made as of ten (10) business days prior to the meeting or any adjournment or
postponement thereof). For the avoidance of doubt, the obligation to update and supplement as set forth in this paragraph or any other
Section of these Bylaws shall not limit the Corporation’s rights with respect to any deficiencies in any notice provided by a stockholder,
extend any applicable deadlines hereunder or enable or be deemed to permit a stockholder who has previously submitted notice hereunder
to amend or update any proposal or to submit any new proposal, including by changing or adding matters, business or resolutions proposed
to be brought before a meeting of the stockholders. If the Proposing Person has provided the Corporation with a Solicitation Notice,
such Proposing Person must have delivered a proxy statement and form of proxy to holders of at least the percentage of the Corporation’s
voting shares required under the DGCL, the Certificate of Incorporation and these bylaws to carry any such proposal and must have included
in such materials the Solicitation Notice. If no Solicitation Notice relating thereto has been timely provided pursuant to this Section
2.13, the Proposing Person must not have solicited a number of proxies sufficient to have required the delivery of such a Solicitation
Notice under this Section 2.13. Notwithstanding the foregoing provisions of this Section 2.13, unless otherwise required
by law, if the stockholder giving the notice required by this Section 2.13 (or such stockholder’s qualified representative)
does not appear at the annual or special meeting of stockholders of the Corporation to present the proposed item of business, such proposed
business shall not be transacted, notwithstanding that proxies in respect of such vote may have been received by the Corporation.
9
(g) Notwithstanding
anything in these Bylaws to the contrary, no business shall be conducted at an annual meeting that is not properly brought before the
meeting in accordance with this Section 2.13. The presiding officer of the meeting (or, in advance of any meeting of stockholders,
the Board of Directors or an authorized committee thereof) shall, if the facts warrant, determine that the business was not properly
brought before the meeting in accordance with this Section 2.13, and if he or she should so determine, he or she shall so declare
to the meeting and any such business not properly brought before the meeting shall not be transacted.
(h) This
Section 2.13 is expressly intended to apply to any business proposed to be brought before an annual meeting of stockholders other
than any proposal made in accordance with Rule 14a-8 under the Exchange Act and included in the Corporation’s proxy statement.
In addition to the requirements of this Section 2.13 with respect to any business proposed to be brought before an annual meeting,
each Proposing Person shall comply with all applicable requirements of the Exchange Act with respect to any such business. Nothing in
this Section 2.13 shall be deemed to affect the rights of stockholders to request inclusion of proposals in the Corporation’s
proxy statement pursuant to Rule 14a-8 under the Exchange Act.
(i) For
purposes of these Bylaws, “public disclosure” shall mean disclosure in a press release reported by a national
news service or in a document publicly filed by the Corporation with the Securities and Exchange Commission pursuant to Sections 13,
14 or 15(d) of the Exchange Act.
Section
2.14 Advance Notice Procedures for Nominations of Directors.
(a) Nominations
of any person for election to the Board of Directors at an annual meeting or at a special meeting (but only if the election of directors
is a matter specified in the notice of meeting given by or at the direction of the person calling such special meeting) may be made at
such meeting only (i) by or at the direction of the Board of Directors, including by any committee or persons authorized to do so by
the Board of Directors or these bylaws, or (ii) by a stockholder present in person who (A) was a record owner of shares of the Corporation
both at the time of giving the notice provided for in this Section 2.14 and at the time of the meeting, (B) is entitled to vote
at the meeting, and (C) has complied with this Section 2.14 as to such notice and nomination. For purposes of this Section
2.14, “present in person” shall mean that the stockholder nominating any person for election to the Board
of Directors at the meeting of the Corporation, or a qualified representative of such stockholder, appear at such meeting, either in
person or by means of remote communication. A “qualified representative” of such proposing stockholder shall
be a duly authorized officer, manager or partner of such stockholder or any other person authorized by a writing executed by such stockholder
or an electronic transmission delivered by such stockholder to act for such stockholder as proxy at the meeting of stockholders and such
person must produce such writing or electronic transmission, or a reliable reproduction of the writing or electronic transmission, at
the meeting of stockholders. The foregoing clause (ii) shall be the exclusive means for a stockholder to make any nomination of a person
or persons for election to the Board of Directors at an annual meeting or special meeting.
(b) (i)
Without qualification, for a stockholder to make any nomination of a person or persons for election to the Board of Directors at an annual
meeting, the stockholder must (1) provide Timely Notice (as defined in Section 2.13) thereof in writing and in proper form to
the Secretary of the Corporation,(2) provide the information, agreements and questionnaires with respect to such stockholder and its
candidate for nomination as required to be set forth by this Section 2.14 and (3) provide any updates or supplements to such notice
at the times and in the forms required by this Section 2.14.
10
(ii) Without
qualification, if the election of directors is a matter specified in the notice of meeting given by or at the direction of the person
calling a special meeting, then for a stockholder to make any nomination of a person or persons for election to the Board of Directors
at a special meeting, the stockholder must (i) provide timely notice thereof in writing and in proper form to the Secretary of the Corporation
at the principal executive offices of the Corporation, (ii) provide the information with respect to such stockholder and its candidate
for nomination as required by this Section 2.14 and (iii) provide any updates or supplements to such notice at the times and in
the forms required by this Section 2.14. To be timely, a stockholder’s notice for nominations to be made at a special meeting
must be delivered to, or mailed and received at, the principal executive offices of the Corporation not earlier than the one hundred
twentieth (120th) day prior to such special meeting and not later than the ninetieth (90th) day prior to such special meeting or, if
later, the tenth (10th) day following the day on which public disclosure (as defined in Section 2.13) of the date of such special
meeting was first made.
(iii) In
no event shall any adjournment or postponement of an annual meeting or special meeting or the announcement thereof commence a new time
period for the giving of a stockholder’s notice as described above.
(iv) In
no event may a Nominating Person provide Timely Notice with respect to a greater number of director candidates than are subject to election
by stockholders at the applicable meeting. If the Corporation shall, subsequent to such notice, increase the number of directors subject
to election at the meeting, such notice as to any additional nominees shall be due on the later of (i) the conclusion of the time period
for Timely Notice, (ii) the date set forth in Section 2.14(b)(ii) or (iii) the tenth day following the date of public disclosure
(as defined in Section 2.13) of such increase.
(c) To
be in proper form for purposes of this Section 2.14, a stockholder’s notice to the Secretary shall set forth:
(i) As
to each Nominating Person (as defined below), the Stockholder Information (as defined in Section 2.13(c)(i), except that for purposes
of this Section 2.14 the term “Nominating Person” shall be substituted for the term “Proposing Person”
in all places it appears in Section 2.13(c)(i));
(ii) As
to each Nominating Person, any Disclosable Interests (as defined in Section 2.13(c)(ii), except that for purposes of this Section
2.14 the term “Nominating Person” shall be substituted for the term “Proposing Person” in all places it appears
in Section 2.13(c)(ii) and the disclosure with respect to the business to be brought before the meeting in Section 2.13(c)(ii)
shall be made with respect to the election of directors at the meeting); and provided that, in lieu of including the information set
forth in Section 2.13(c)(ii)(F), the Nominating Person’s notice for purposes of this Section 2.14 shall include a
representation as to whether the Nominating Person intends or is part of a group which intends to deliver a proxy statement and solicit
the holders of shares representing at least sixty seven percent (67%) of the voting power of shares entitled to vote on the election
of directors in support of director nominees other than the Corporation’s nominees in accordance with Rule 14a-19 promulgated under
the Exchange Act; and
11
(iii) As
to each candidate whom a Nominating Person proposes to nominate for election as a director,
(A) all
information relating to such candidate for nomination that is required to be disclosed in a proxy statement or other filings required
to be made in connection with solicitations of proxies for election of directors in a contested election pursuant to Section 14(a) under
the Exchange Act (including such candidate’s written consent to being named in a proxy statement and accompanying proxy card relating
to the Corporation’s next meeting of stockholders at which directors are to be elected and to serving as a director for a full
term if elected), and
(B) a
description of any direct or indirect material interest in any material contract or agreement between or among any Nominating Person,
on the one hand, and each candidate for nomination or his or her respective associates or any other participants in such solicitation,
on the other hand, including, without limitation, all information that would be required to be disclosed pursuant to Item 404 under Regulation
S-K if such Nominating Person were the “registrant” for purposes of such rule and the candidate for nomination were a director
or executive officer of such registrant.
(C) a
completed written questionnaire (in the form provided by the Corporation within ten (10) days upon written request of any stockholder
of record therefor) with respect to the background, qualifications, stock ownership and independence of such proposed nominee and
(D) a
written representation and agreement (in the form provided by the Corporation within ten (10) days upon written request of any stockholder
of record therefor) that such candidate for nomination
(1) is
not and, if elected as a director during his or her term of office, will not become a party to
(a) any
agreement, arrangement or understanding with, and has not given and will not give any commitment
or assurance to, any person or entity as to how such proposed nominee, if elected as a director
of the Corporation, will act or vote on any issue or question (a “Voting Commitment”)
or
(b) any
Voting Commitment that could limit or interfere with such proposed nominee’s ability
to comply, if elected as a director of the Corporation, with such proposed nominee’s
fiduciary duties under applicable law,
(2) is
not, and will not become a party to, any agreement, arrangement or understanding with any person or entity other than the Corporation
with respect to any direct or indirect compensation or reimbursement for service as a director that has not been disclosed to the Corporation,
(3) if
elected as a director of the Corporation, will comply with all applicable corporate governance, conflict of interest, confidentiality,
stock ownership and trading and other policies and guidelines of the Corporation applicable to directors and in effect during such person’s
term in office as a director (and, if requested by any candidate for nomination, the Secretary of the Corporation shall provide to such
candidate for nomination all such policies and guidelines then in effect), and
(4) if
elected as a director of the Corporation, intends to serve the entire term until the next meeting at which such candidate would face
re-election.
12
(d) For
purposes of this Section 2.14, the term “Nominating Person” shall mean (i) the stockholder providing
the notice of the nomination proposed to be made at the meeting, (ii) the beneficial owner or beneficial owners, if different, on whose
behalf the notice of the nomination proposed to be made at the meeting is made, and (iii) any participant (as defined in paragraphs (a)(ii)-(vi)
of Instruction 3 to Item (4) of Schedule 14A) with such stockholder in such solicitation.
(e) The
Board of Directors may request that any Nominating Person furnish such additional information as may be reasonably required by the Board
of Directors. Such Nominating Person shall provide such additional information within ten (10) days after it has been requested by the
Board of Directors.
(f) The
Board of Directors may also require any proposed candidate for nomination as a director to furnish such other information as may reasonably
be requested by the Board of Directors in writing prior to the meeting of stockholders at which such candidate’s nomination is
to be acted upon. Without limiting the generality of the foregoing, the Board of Directors may request such other information in order
for the Board of Directors to determine the eligibility of such candidate for nomination to be an independent director of the Corporation
or to comply with the director qualification standards and additional selection criteria in accordance with the Corporation’s Corporate
Governance Guidelines. Such other information shall be delivered to, or mailed and received by, the Secretary at the principal executive
offices of the Corporation not later than five (5) business days after the request by the Board of Directors has been delivered to, or
mailed and received by, the Nominating Person.
(g) A
stockholder providing notice of any nomination proposed to be made at a meeting and any candidate for nomination as a director shall
further update and supplement such notice or the materials delivered pursuant to this Section 2.14, as applicable, if necessary,
so that the information provided or required to be provided in such notice or by such candidate, as applicable, pursuant to this Section
2.14 shall be true and correct as of the record date for stockholders entitled to vote at the meeting and as of the date that is
ten (10) business days prior to the meeting or any adjournment or postponement thereof, and such update and supplement shall be delivered
to, or mailed and received by, the Secretary at the principal executive offices of the Corporation not later than five (5) business days
after the record date for stockholders entitled to vote at the meeting (in the case of the update and supplement required to be made
as of such record date), and not later than eight (8) business days prior to the date for the meeting or, if practicable, any adjournment
or postponement thereof (and, if not practicable, on the first practicable date prior to the date to which the meeting has been adjourned
or postponed) (in the case of the update and supplement required to be made as of ten (10) business days prior to the meeting or any
adjournment or postponement thereof). For the avoidance of doubt, the obligation to update and supplement as set forth in this paragraph
or any other Section of these Bylaws shall not limit the Corporation’s rights with respect to any deficiencies in any notice provided
by a stockholder, extend any applicable deadlines hereunder or enable or be deemed to permit a stockholder who has previously submitted
notice hereunder to amend or update any nomination, including by changing or adding nominees, or to submit any new nomination, or submit
any new proposal, matters, business or resolutions proposed to be brought before a meeting of the stockholders.
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(h) In
addition to the requirements of this Section 2.14 with respect to any nomination proposed to be made at a meeting, each Nominating
Person shall comply with all applicable requirements of the Exchange Act with respect to any such nominations. Notwithstanding the foregoing
provisions of this Section 2.14, unless otherwise required by law, (i) no Nominating Person shall solicit proxies in support of
director nominees other than the Corporation’s nominees unless such Nominating Person has, or is part of a group that has, complied
with Rule 14a-19 promulgated under the Exchange Act in connection with the solicitation of such proxies, including the provision to the
Corporation of notices required thereunder, in accordance with the time frames required in this Section 2.14 or by Rule 14a-19
promulgated under the Exchange Act, as applicable and (ii) if (1) any Nominating Person provides notice in accordance with Rule 14a-19(b)
promulgated under the Exchange Act and (2) (x) such notice in accordance with Rule 14a-19(b) is not provided within the time period for
Timely Notice, (y) such Nominating Person subsequently fails to comply with the requirements of Rule 14a-19(a)(2) or Rule 14a-19(a)(3)
promulgated under the Exchange Act or (z) such Nominating Person fails to timely provide reasonable evidence sufficient to satisfy the
Corporation that such Nominating Person has met the requirements of Rule 14a-19(a)(3) promulgated under the Exchange Act in accordance
with the following sentence, then the nomination of such Nominating Person’s proposed nominees shall be disregarded, notwithstanding
that each such nominee is included as a nominee in the Corporation’s proxy statement, notice of meeting or other proxy materials
for any meeting of stockholders (or any supplement thereto) and notwithstanding that proxies or votes in respect of the election of such
proposed nominees may have been received by the Corporation (which proxies and votes shall be disregarded). If any Nominating Person
provides notice in accordance with Rule 14a-19(b) promulgated under the Exchange Act, such Nominating Person shall deliver to the Corporation,
no later than seven (7) business days prior to the applicable meeting, reasonable evidence that it has met the requirements of Rule 14a-19(a)(3)
promulgated under the Exchange Act.
(i) No
candidate nominated pursuant to Section 2.14(a)(ii) shall be eligible for nomination as a director of the Corporation unless such
candidate for nomination and the Nominating Person seeking to place such candidate’s name in nomination has complied with this
Section 2.14, as applicable. The presiding officer at the meeting shall, if the facts warrant, determine that a nomination was
not properly made in accordance with this Section 2.14, and if he or she should so determine, he or she shall so declare such
determination to the meeting, the defective nomination shall be disregarded and any ballots cast for the candidate in question (but in
the case of any form of ballot listing other qualified nominees, only the ballots cast for the nominee in question) shall be void and
of no force or effect.
(j) Notwithstanding
anything in these Bylaws to the contrary, no candidate for nomination shall be eligible to be seated as a director of the Corporation
unless nominated in accordance with this Section 2.14 and elected as a director.
Section
2.15 Delivery to the Corporation. Whenever this Article II requires one or more persons (including a record or beneficial
owner of Stock) to deliver a document or information to the Corporation or any officer, employee or agent thereof (including any notice,
request, questionnaire, revocation, representation or other document or agreement), such document or information shall be in writing
exclusively (and not in an electronic transmission) and shall be delivered exclusively by hand (including, without limitation, overnight
courier service) or by certified or registered mail, return receipt requested, and the Corporation shall not be required to accept delivery
of any document not in such written form or so delivered. For the avoidance of doubt, the Corporation expressly opts out of Section 116
of the DGCL with respect to the delivery of information and documents to the Corporation required by this Article II.
ARTICLE
III.
BOARD
OF DIRECTORS
Section
3.01 Powers. Except as otherwise provided by the Certificate of Incorporation or the DGCL, the business and affairs of the Corporation
shall be managed by or under the direction of the Board of Directors.
Section
3.02 Number; Tenure; Qualifications. Subject to the Certificate of Incorporation and the rights of holders of any series of preferred
Stock to elect Directors, the total number of Directors constituting the entire Board of Directors shall be seven (7), which number may
thereafter be fixed from time to time exclusively by resolution of the Board of Directors. No reduction of the authorized number of directors
shall have the effect of removing any director before that director’s term of office expires. The Directors shall be elected annually
to one-year terms, as provided in the Certificate of Incorporation. Each Director shall hold office until such time as provided in the
Certificate of Incorporation. Directors need not be Stockholders to be qualified for election or service as a Director.
14
Section
3.03 Election, Qualification and Term of Office of Directors. Except as provided in these Bylaws, and subject to the Certificate
of Incorporation, each Director, including a Director elected to fill a vacancy or newly created directorship, shall hold office until
the next annual meeting of stockholders and until such Director’s successor is elected and qualified or until such Director’s
earlier death, resignation, disqualification or removal. Directors need not be Stockholders. The Certificate of Incorporation or these
Bylaws may prescribe qualifications for Directors.
Section
3.04 Resignation and Vacancies.
(a) Any
Director may resign at any time upon notice given in writing or by electronic transmission to the Corporation. The resignation shall
take effect at the time specified therein or upon the happening of an event specified therein, and if no time or event is specified,
at the time of its receipt. When one or more Directors so resigns and the resignation is effective at a future date or upon the happening
of an event to occur on a future date, a majority of the Directors then in office, including those who have so resigned, shall have power
to fill such vacancy or vacancies, the vote thereon to take effect when such resignation or resignations shall become effective, and
each Director so chosen shall hold office as provided in Section 3.03.
(b) Unless
otherwise provided in the Certificate of Incorporation or these Bylaws, vacancies resulting from the death, resignation, disqualification
or removal of any Director, and newly created directorships resulting from any increase in the authorized number of Directors shall be
filled only by a majority of the Directors then in office, although less than a quorum, or by a sole remaining Director.
Section
3.05 Regular Meetings. Regular meetings of the Board of Directors may be held at such places, if any, within or without the State
of Delaware, and at such times as has been designated by the Board of Directors and publicized among all Directors, either orally or
in writing, by telephone, including a voice-messaging system or other system designed to record and communicate messages, facsimile,
telegraph or telex, or by electronic mail or other means of electronic transmission. No further notice shall be required for regular
meetings of the Board of Directors.
Section
3.06 Special Meetings. Special meetings of the Board of Directors may be called by the Chairperson, the Chief Executive Officer,
the President, the Secretary or a majority of the Directors then in office and shall be held at such time, date and place, if any, within
or without the State of Delaware as he or she or they shall fix. Notice to Directors of the date, place and time of any special meeting
of the Board of Directors shall be given to each Director by the Secretary or by the officer or one of the Directors calling the meeting.
Such notice may be given in person, by United States first-class mail, or by e-mail, telephone, telecopier, facsimile or other means
of electronic transmission. If the notice is delivered in person, by e-mail, telephone, telecopier, facsimile or other means of electronic
transmission, it shall be delivered or sent at least 24 hours before the time of holding of the meeting. If the notice is sent by mail,
it shall be deposited in the United States mail at least four days before the time of the holding of the meeting. The notice need not
specify the place of the meeting if the meeting is to be held at the Corporation’s principal executive office nor the purpose of
the meeting.
15
Section
3.07 Place of Meetings; Telephonic Meetings. The Board of Directors may hold meetings, both regular and special, either within
or outside the State of Delaware. Unless otherwise restricted by the Certificate of Incorporation or these Bylaws, Directors may participate
in any meetings of the Board of Directors or a committee thereof by means of conference telephone or other communications equipment by
means of which all persons participating in the meeting can hear each other, and participation in a meeting of the Board of Directors
pursuant to this Section 3.07 shall constitute presence in person at such meeting.
Section
3.08 Quorum; Vote Required for Action. At all meetings of the Board of Directors, unless otherwise provided by the Certificate
of Incorporation, a majority of the total number of Directors shall constitute a quorum for the transaction of business; provided
that, solely for the purposes of filling vacancies pursuant to Section 3.04, a meeting of the Board of Directors may be held
if a majority of the Directors then in office participate in such meeting. The affirmative vote of a majority of the Directors present
at any meeting of the Board of Directors at which a quorum is present shall be the act of the Board of Directors, except as may be otherwise
specifically required by applicable law, the Certificate of Incorporation or these Bylaws. If a quorum is not present at any meeting
of the Board of Directors, then the Directors present thereat may adjourn the meeting from time to time, without notice other than announcement
at the meeting, until a quorum is present.
Section
3.09 Organization. Meetings of the Board of Directors shall be presided over by the Chairperson, or in his or her absence by the
person whom the Chairperson shall designate, or in the absence of the foregoing persons by a chairperson chosen at the meeting by the
affirmative vote of a majority of the Directors present at the meeting. The Secretary shall act as secretary of the meeting, but in his
or her absence, the chairperson of the meeting may appoint any person to act as secretary of the meeting.
Section
3.10 Action by Unanimous Consent of Directors. Unless otherwise restricted by the Certificate of Incorporation or these Bylaws,
any action required or permitted to be taken at any meeting of the Board of Directors, or of any committee thereof, may be taken without
a meeting of the Board of Directors if all members of the Board of Directors or such committee, as the case may be, consent thereto in
writing or by electronic transmission. Thereafter, the writing or writings or electronic transmissions shall be filed with the minutes
of proceedings of the Board of Directors or such committee in accordance with applicable law. Such action by written consent or consent
by electronic transmission shall have the same force and effect as a unanimous vote of the Board of Directors.
Section
3.11 Compensation of Directors. Unless otherwise restricted by the Certificate of Incorporation or these Bylaws, the Board of
Directors shall have the authority to fix the compensation, including fees and reimbursements of expenses, of Directors for services
to the Corporation in any capacity. No such payment shall preclude any Director from serving the Corporation in any other capacity and
receiving compensation therefor. Any Director may decline any or all such compensation payable to such Director in his or her discretion.
Section
3.12 Chairperson. The Board of Directors may appoint from its members a chairperson (the “Chairperson”).
The Board of Directors may, in its sole discretion, from time to time appoint one or more vice chairpersons (each, a “Vice
Chairperson”), each of whom in such capacity shall report directly to the Chairperson.
16
ARTICLE
IV.
COMMITTEES
Section
4.01 Committees. The Board of Directors may designate one (1) or more committees, each committee to consist of one (1) or more
of the Directors. The Board of Directors may designate one or more Directors as alternate members of any committee, who may replace any
absent or disqualified member at any meeting of such committee. In the absence or disqualification of a member of any committee, the
member or members thereof present at any meeting and not disqualified from voting, whether or not he, she or they constitute a quorum,
may unanimously appoint another member of the Board of Directors to act at the meeting in place of any such absent or disqualified member.
Any such committee, to the extent permitted by applicable law and to the extent provided in a resolution of the Board of Directors, shall
have and may exercise all of the powers and authority of the Board of Directors in the management of the business and affairs of the
Corporation, and may authorize the seal of the Corporation (if one is adopted) to be affixed to all papers which may require it; but
no such committee shall have the power or authority to (i) approve or adopt, or recommend to the Stockholders, any action or matter expressly
required by the DGCL to be submitted to Stockholders for approval, or (ii) adopt, amend or repeal any bylaw of the Corporation. Except
as otherwise provided in the Certificate of Incorporation, these Bylaws, or the resolution of the Board of Directors designating the
committee, a committee may create one (1) or more subcommittees, each subcommittee to consist of one (1) or more members of the committee,
and delegate to a subcommittee any or all of the powers and authority of the committee. Except as otherwise provided in the Certificate
of Incorporation, these Bylaws, or the resolution of the Board of Directors designating the committee (or resolution of the committee
designating the subcommittee, if applicable), a majority of the Directors then serving on a committee or subcommittee, as applicable,
shall constitute a quorum for the transaction of business, and the vote of a majority of the members of the committee or subcommittee,
as applicable, present at a meeting at which a quorum is present shall be the act of the committee or subcommittee, as applicable. Meetings
of any committee of the Board of Directors may be held at any time or place, if any, within or without the State of Delaware whenever
called by the Chairperson or a majority of the members of such committee.
Section
4.02 Committee Minutes. Each committee of the Board of Directors shall keep regular minutes of its meetings and report the same
to the Board of Directors when required.
Section
4.03 Committee Rules. Unless the Board of Directors otherwise provides, each committee designated by the Board of Directors may
make, alter and repeal rules for the conduct of its business. In the absence of such rules, each such committee shall conduct its business
in the same manner as the Board of Directors conducts its business pursuant to Article III.
ARTICLE
V.
OFFICERS
Section
5.01 Officers. The officers of the Corporation shall include a Chief Executive Officer, a President and a Secretary. The Corporation
may also have, at the discretion of the Board of Directors, a Chairperson, a Vice Chairperson, a Chief Financial Officer, a Treasurer,
one (1) or more Vice Presidents, one (1) or more Assistant Vice Presidents, one (1) or more Assistant Treasurers, one (1) or more Assistant
Secretaries, and any such other officers as may be appointed in accordance with the provisions of these Bylaws. Each officer of the Corporation
shall hold office for such term as may be prescribed by the Board of Directors and until his or her successor is duly elected and qualified
or until his or her earlier death, resignation or removal. No officer need be a Stockholder or Director.
Section
5.02 Appointment of Officers. The Board of Directors shall appoint the officers of the Corporation, except such officers as may
be appointed in accordance with the provisions of Section 5.03.
Section
5.03 Subordinate Officers. The Board of Directors may appoint, or empower the Chief Executive Officer of the Corporation or, in
the absence of a Chief Executive Officer of the Corporation, the President of the Corporation, to appoint, such other officers and agents
as the business of the Corporation may require. Each of such officers and agents shall hold office for such period, have such authority,
and perform such duties as are provided in these Bylaws or as the Board of Directors may from time to time determine.
17
Section
5.04 Removal and Resignation of Officers. Subject to the rights, if any, of an officer under any contract of employment, any officer
may be removed, either with or without cause, by the Board of Directors or, except in the case of an officer chosen by the Board of Directors,
by any officer upon whom such power of removal may be conferred by the Board of Directors. Any officer may resign at any time by giving
notice in writing or by electronic transmission to the Corporation. Any resignation shall take effect at the date of the receipt of that
notice or at any later time specified in that notice. Unless otherwise specified in the notice of resignation, the acceptance of the
resignation shall not be necessary to make it effective. If a resignation is made effective at a later date and the Corporation accepts
the future effective date, the Board of Directors may fill the pending vacancy before the effective date if the Board of Directors provides
that the successor shall not take office until the effective date. Any resignation is without prejudice to the rights, if any, of the
Corporation under any contract to which the officer is a party.
Section
5.05 Vacancies in Offices. Any vacancy occurring in any office of the Corporation shall be filled by the Board of Directors or
as provided in Section 5.02.
Section
5.06 Representation of Shares of Other Entities. Unless otherwise directed by the Board of Directors, the Chairperson, the Chief
Executive Officer, or the President of this Corporation, or any other person authorized by the Board of Directors, the Chief Executive
Officer or the President, is authorized to vote, represent and exercise on behalf of this Corporation all rights incident to any and
all shares or voting securities of any other corporation or other person standing in the name of this Corporation. The authority granted
herein may be exercised either by such person directly or by any other person authorized to do so by proxy or power of attorney duly
executed by such person having the authority.
Section
5.07 Authority and Duties of Officers. All officers of the Corporation shall respectively have such authority and perform such
duties in the management of the business of the Corporation as may be provided herein or designated from time to time by the Board of
Directors and, to the extent not so provided, as generally pertain to their respective offices, subject to the control of the Board of
Directors.
Section
5.08 Compensation. The compensation of the officers of the Corporation for their services as such shall be fixed from time to
time by or at the direction of the Board of Directors. An officer of the Corporation shall not be prevented from receiving compensation
by reason of the fact that he or she is also a Director.
ARTICLE
VI.
RECORDS
Section
6.01 Records. A stock ledger consisting of one or more records in which the names of all of the Stockholders of record, the address
and number of shares registered in the name of each such Stockholder, and all issuances and transfers of Stock are recorded in accordance
with Section 224 of the DGCL shall be administered by or on behalf of the Corporation. Any records administered by or on behalf of the
Corporation in the regular course of its business, including its stock ledger, books of account, and minute books, may be kept on, or
by means of, or be in the form of, any information storage device, or method, or one or more electronic networks or databases (including
one or more distributed electronic networks or databases), provided that the records so kept can be converted into clearly legible paper
form within a reasonable time and, with respect to the stock ledger, that the records so kept (i) can be used to prepare the list of
Stockholders specified in Sections 219 and 220 of the DGCL, (ii) record the information specified in Sections 156, 159, 217(a) and 218
of the DGCL, and (iii) record transfers of Stock as governed by Article 8 of the Uniform Commercial Code as adopted in the State of Delaware.
18
ARTICLE
VII.
GENERAL
MATTERS
Section
7.01 Execution of Corporate Contracts and Instruments. The Board of Directors, except as otherwise provided in these Bylaws, may
authorize any officer or officers, or agent or agents, to enter into any contract or execute any instrument in the name of and on behalf
of the Corporation; such authority may be general or confined to specific instances.
Section
7.02 Stock Certificates.
(a) The
shares of Stock shall be represented by certificates, provided that the Board of Directors by resolution may provide that some or all
of the shares of any class or series of Stock shall be uncertificated. Certificates for the shares of Stock, if any, shall be in such
form as is consistent with the Certificate of Incorporation and applicable law. Every holder of Stock represented by a certificate shall
be entitled to have a certificate signed by, or in the name of the Corporation by, any two officers authorized to sign stock certificates
representing the number of shares registered in certificate form. The Chairperson or Vice Chairperson, Chief Executive Officer, the President,
Vice President, the Treasurer, any Assistant Treasurer, the Secretary or any Assistant Secretary of the Corporation shall be specifically
authorized to sign stock certificates. Any or all of the signatures on the certificate may be a facsimile. In case any officer, transfer
agent or registrar who has signed or whose facsimile signature has been placed upon a certificate has ceased to be such officer, transfer
agent or registrar before such certificate is issued, it may be issued by the Corporation with the same effect as if he or she were such
officer, transfer agent or registrar at the date of issue.
(b) The
Corporation may issue the whole or any part of its shares of Stock as partly paid and subject to call for the remainder of the consideration
to be paid therefor. Upon the face or back of each stock certificate issued to represent any such partly paid shares, or upon the books
and records of the Corporation in the case of uncertificated partly paid shares, the total amount of the consideration to be paid therefor
and the amount paid thereon shall be stated. Upon the declaration of any dividend on fully paid shares, the Corporation shall declare
a dividend upon partly paid shares of the same class, but only upon the basis of the percentage of the consideration actually paid thereon.
Section
7.03 Special Designation of Certificates. If the Corporation is authorized to issue more than one class of Stock or more than
one series of any class, then the powers, the designations, the preferences and the relative, participating, optional or other special
rights of each class of Stock or series thereof and the qualifications, limitations or restrictions of such preferences and/or rights
shall be set forth in full or summarized on the face or on the back of the certificate that the Corporation shall issue to represent
such class or series of Stock (or, in the case of uncertificated shares, set forth in a notice provided pursuant to Section 151 of the
DGCL); provided, however, that except as otherwise provided in Section 202 of the DGCL, in lieu of the foregoing requirements,
there may be set forth on the face of back of the certificate that the Corporation shall issue to represent such class or series of Stock
(or, in the case of any uncertificated shares, included in the aforementioned notice) a statement that the Corporation will furnish without
charge to each Stockholder who so requests the powers, the designations, the preferences and the relative, participating, optional or
other special rights of each class of Stock or series thereof and the qualifications, limitations or restrictions of such preferences
and/or rights.
Section
7.04 Lost Certificates. Except as provided in this Section 7.04, no new certificates for shares of Stock shall be issued
to replace a previously issued certificate unless the latter is surrendered to the Corporation and cancelled at the same time. The Corporation
may issue a new certificate of Stock or uncertificated shares in the place of any certificate theretofore issued by it, alleged to have
been lost, stolen or destroyed, and the Corporation may require the owner of the lost, stolen or destroyed certificate, or such owner’s
legal representative, to give the Corporation a bond sufficient to indemnify it against any claim that may be made against it on account
of the alleged loss, theft or destruction of any such certificate or the issuance of such new certificate or uncertificated shares.
19
Section
7.05 Shares Without Certificates. The Corporation may adopt a system of issuance, recordation and transfer of its shares of Stock
by electronic or other means not involving the issuance of certificates, provided the use of such system by the Corporation is permitted
in accordance with applicable law.
Section
7.06 Construction; Definitions. Unless the context requires otherwise, the general provisions, rules of construction and definitions
in the DGCL shall govern the construction of these Bylaws. Without limiting the generality of this provision, the singular number includes
the plural and the plural number includes the singular.
Section
7.07 Dividends. The Board of Directors, subject to any restrictions contained in either (i) the DGCL or (ii) the Certificate of
Incorporation, may declare and pay dividends upon the shares of its Stock. Dividends may be paid in cash, in property or in shares of
Stock. The Board of Directors may set apart out of any of the funds of the Corporation available for dividends a reserve or reserves
for any proper purpose and may abolish any such reserve. Such purposes shall include but not be limited to equalizing dividends, repairing
or maintaining any property of the Corporation, and meeting contingencies.
Section
7.08 Fiscal Year. The fiscal year of the Corporation shall be fixed by resolution of the Board of Directors and may be changed
by the Board of Directors.
Section
7.09 Seal. The Corporation may adopt a corporate seal, which shall be adopted and which may be altered by the Board of Directors.
The Corporation may use the corporate seal by causing it or a facsimile thereof to be impressed or affixed or in any other manner reproduced.
Section
7.10 Transfer of Stock. Shares of Stock shall be transferable in the manner prescribed by law and in these Bylaws. Shares of Stock
shall be transferred on the books of the Corporation only by the holder of record thereof or by such holder’s attorney duly authorized
in writing, upon surrender to the Corporation of the certificate or certificates representing such shares endorsed by the appropriate
person or persons (or by delivery of duly executed instructions with respect to uncertificated shares), with such evidence of the authenticity
of such endorsement or execution, transfer, authorization and other matters as the Corporation may reasonably require, and accompanied
by all necessary stock transfer stamps. No transfer of Stock shall be valid as against the Corporation for any purpose until it shall
have been entered in the stock records of the Corporation by an entry showing the names of the persons from and to whom it was transferred.
Section
7.11 Stock Transfer Agreements. The Corporation shall have power to enter into and perform any agreement with any number of Stockholders
of any one or more classes or series of Stock to restrict the transfer of shares of Stock of any one or more classes owned by such Stockholders
in any manner not prohibited by the DGCL.
Section
7.12 Registered Stockholders. The Corporation shall (i) be entitled to recognize the exclusive right of a person registered on
its books as the owner of shares of Stock to receive dividends and to vote as such owner; and (ii) not be bound to recognize any equitable
or other claim to or interest in such share or shares of Stock on the part of another person, whether or not it shall have express or
other notice thereof, except as otherwise provided by the laws of the State of Delaware.
20
Section
7.13 Waiver of Notice. Whenever notice is required to be given under any provision of the DGCL, the Certificate of Incorporation
or these Bylaws, a written waiver, signed by the person entitled to notice, or a waiver by electronic transmission by the person entitled
to notice, whether before or after the time of the event for which notice is to be given, shall be deemed equivalent to notice. Attendance
of a person at a meeting shall constitute a waiver of notice of such meeting, except when the person attends a meeting for the express
purpose of objecting at the beginning of the meeting, to the transaction of any business because the meeting is not lawfully called or
convened. Neither the business to be transacted at, nor the purpose of, any regular or special meeting of the Stockholders need be specified
in any written waiver of notice or any waiver by electronic transmission unless so required by the Certificate of Incorporation or these
Bylaws.
ARTICLE
VIII.
NOTICE
Section
8.01 Delivery of Notice; Notice by Electronic Transmission.
(a) Without
limiting the manner by which notice otherwise may be given effectively to Stockholders, any notice to Stockholders given by the Corporation
under any provisions of the DGCL, the Certificate of Incorporation, or these Bylaws may be given in writing directed to the Stockholder’s
mailing address (or by electronic transmission directed to the Stockholder’s electronic mail address, as applicable) as it appears
on the records of the Corporation and shall be given (1) if mailed, when the notice is deposited in the U.S. mail, postage prepaid, (2)
if delivered by courier service, the earlier of when the notice is received or left at such Stockholder’s address or (3) if given
by electronic mail, when directed to such Stockholder’s electronic mail address unless the Stockholder has notified the Corporation
in writing or by electronic transmission of an objection to receiving notice by electronic mail. A notice by electronic mail must include
a prominent legend that the communication is an important notice regarding the Corporation.
(b) Without
limiting the manner by which notice otherwise may be given effectively to Stockholders, any notice to Stockholders given by the Corporation
under any provision of the DGCL, the Certificate of Incorporation or these Bylaws shall be effective if given by a form of electronic
transmission consented to by the Stockholder to whom the notice is given. Any such consent shall be revocable by the Stockholder by written
notice or electronic transmission to the Corporation. Notwithstanding the provisions of this paragraph, the Corporation may give a notice
by electronic mail in accordance with Section 8.01(a) without obtaining the consent required by this Section 8.01(b).
(c) Any
notice given pursuant to Section 8.01(b) shall be deemed given: (i) if by facsimile telecommunication, when directed to a number
at which the Stockholder has consented to receive notice; (ii) if by a posting on an electronic network together with separate notice
to the Stockholder of such specific posting, upon the later of (A) such posting and (B) the giving of such separate notice; and (iii)
if by any other form of electronic transmission, when directed to the Stockholder. Notwithstanding the foregoing, a notice may not be
given by an electronic transmission from and after the time that (1) the Corporation is unable to deliver by such electronic transmission
two (2) consecutive notices given by the Corporation and (2) such inability becomes known to the Secretary or an Assistant Secretary
of the Corporation or to the transfer agent, or other person responsible for the giving of notice; provided, however, the inadvertent
failure to discover such inability shall not invalidate any meeting or other action. An affidavit of the Secretary or an Assistant Secretary
or of the transfer agent or other agent of the Corporation that the notice has been given shall, in the absence of fraud, be prima facie
evidence of the facts stated therein.
21
ARTICLE
IX.
INDEMNIFICATION
Section
9.01 Indemnification of Directors and Officers. The Corporation shall indemnify and hold harmless, to the fullest extent permitted
by the DGCL as it presently exists or may hereafter be amended, any Director or officer of the Corporation who was or is made or is threatened
to be made a party or is otherwise involved in any action, suit or proceeding, whether civil, criminal, administrative or investigative
(a “Proceeding”) by reason of the fact that he or she, or a person for whom he or she is the legal representative,
is or was a Director or officer of the Corporation or, while serving as a Director or officer of the Corporation, is or was serving at
the request of the Corporation as a director, officer, employee or agent of another corporation or of a partnership (a “covered
person”), joint venture, trust, enterprise or non-profit entity, including service with respect to employee benefit plans,
against all liability and loss suffered and expenses (including attorneys’ fees, judgments, fines ERISA excise taxes or penalties
and amounts paid in settlement) reasonably incurred by such person in connection with any such Proceeding. Notwithstanding the preceding
sentence, except as otherwise provided in Section 9.04, the Corporation shall be required to indemnify a person in connection
with a Proceeding initiated by such person only if the Proceeding was authorized in the specific case by the Board of Directors.
Section
9.02 Indemnification of Others. The Corporation shall have the power to indemnify and hold harmless, to the fullest extent permitted
by applicable law as it presently exists or may hereafter be amended, any employee or agent of the Corporation who was or is made or
is threatened to be made a party or is otherwise involved in any Proceeding by reason of the fact that he or she, or a person for whom
he or she is the legal representative, is or was an employee or agent of the Corporation or is or was serving at the request of the Corporation
as a director, officer, employee or agent of another corporation or of a partnership, joint venture, trust, enterprise or non-profit
entity, including service with respect to employee benefit plans, against all liability and loss suffered and expenses reasonably incurred
by such person in connection with any such Proceeding.
Section
9.03 Prepayment of Expenses. The Corporation shall to the fullest extent not prohibited by applicable law pay the expenses (including
attorneys’ fees) incurred by any covered person, and may pay the expenses incurred by any employee or agent of the Corporation,
in defending any Proceeding in advance of its final disposition; provided, however, that, to the extent required by law, such
payment of expenses in advance of the final disposition of the Proceeding shall be made only upon receipt of an undertaking by the person
to repay all amounts advanced if it should be ultimately determined that the person is not entitled to be indemnified under this Article
IX or otherwise.
Section
9.04 Determination; Claim. If a claim for indemnification (following the final disposition of such Proceeding) under this Article
IX is not paid in full within 60 days, or a claim for advancement of expenses under this Article IX is not paid in full within
30 days, after a written claim therefor has been received by the Corporation the claimant may thereafter (but not before) file suit to
recover the unpaid amount of such claim and, if successful in whole or in part, shall be entitled to be paid the expense of prosecuting
such claim to the fullest extent permitted by law. In any such action the Corporation shall have the burden of proving that the claimant
was not entitled to the requested indemnification or payment of expenses under applicable law.
Section
9.05 Non-Exclusivity of Rights. The rights conferred on any person by this Article IX shall not be exclusive of any other
rights which such person may have or hereafter acquire under any statute, provision of the Certificate of Incorporation, these Bylaws,
agreement, vote of Stockholders or disinterested Directors or otherwise.
22
Section
9.06 Insurance. The Corporation may purchase and maintain insurance on behalf of any person who is or was a Director, officer,
employee or agent of the Corporation, or is or was serving at the request of the Corporation as a director, officer, employee or agent
of another corporation, partnership, joint venture, trust enterprise or non-profit entity against any liability asserted against him
or her and incurred by him or her in any such capacity, or arising out of his or her status as such, whether or not the Corporation would
have the power to indemnify him or her against such liability under the provisions of the DGCL.
Section
9.07 Other Indemnification. The Corporation’s obligation, if any, to indemnify or advance expenses to any person who was
or is serving at its request as a director, officer, employee or agent of another corporation, partnership, joint venture, trust, enterprise
or non-profit entity shall be reduced by any amount such person may collect as indemnification or advancement of expenses from such other
corporation, partnership, joint venture, trust, enterprise or non-profit enterprise.
Section
9.08 Continuation of Indemnification. The rights to indemnification and to prepayment of expenses provided by, or granted pursuant
to, this Article IX shall continue notwithstanding that the person has ceased to be a Director or officer of the Corporation and
shall inure to the benefit of the estate, heirs, executors, administrators, legatees and distributees of such person.
Section
9.09 Amendment or Repeal; Interpretation.
(a) The
provisions of this Article IX shall constitute a contract between the Corporation, on the one hand, and, on the other hand, each
individual who serves or has served as a Director or officer of the Corporation (whether before or after the adoption of these Bylaws),
in consideration of such person’s performance of such services, and, pursuant to this Article IX, the Corporation intends
to be legally bound to each such current or former Director or officer of the Corporation. With respect to current and former Directors
and officers of the Corporation, the rights conferred under this Article IX are present contractual rights and such rights are
fully vested, and shall be deemed to have vested fully, immediately upon adoption of theses Bylaws. With respect to any Directors or
officers of the Corporation who commence service following adoption of these Bylaws, the rights conferred under this provision shall
be present contractual rights and such rights shall fully vest, and be deemed to have vested fully, immediately upon such Director or
officer commencing service as a Director or officer of the Corporation. Any repeal or modification of the foregoing provisions of this
Article IX shall not adversely affect any right or protection (i) hereunder of any person in respect of any act or omission occurring
prior to the time of such repeal or modification or (ii) under any agreement providing for indemnification or advancement of expenses
to an officer or Director of the Corporation in effect prior to the time of such repeal or modification.
(b) Any
reference to an officer of the Corporation in this Article IX shall be deemed to refer exclusively to the Chief Executive Officer,
President, and Secretary, or other officer of the Corporation appointed by (x) the Board of Directors pursuant to Article V or
(y) an officer to whom the Board of Directors has delegated the power to appoint officers pursuant to Article V, and any reference
to an officer of any other corporation, partnership, joint venture, trust, employee benefit plan or other enterprise shall be deemed
to refer exclusively to an officer appointed by the board of directors (or equivalent governing body) of such other entity pursuant to
the certificate of incorporation and bylaws (or equivalent organizational documents) of such other corporation, partnership, joint venture,
trust, employee benefit plan or other enterprise. The fact that any person who is or was an employee of the Corporation or an employee
of any other corporation, partnership, joint venture, trust, employee benefit plan or other enterprise has been given or has used the
title of “Vice President” or any other title that could be construed to suggest or imply that such person is or may be an
officer of the Corporation or of such other corporation, partnership, joint venture, trust, employee benefit plan or other enterprise
shall not result in such person being constituted as, or being deemed to be, an officer of the Corporation or of such other corporation,
partnership, joint venture, trust, employee benefit plan or other enterprise for purposes of this Article IX.
23
ARTICLE
X.
AMENDMENTS
The
Board of Directors is expressly empowered to adopt, amend or repeal these Bylaws. The Stockholders also shall have power to adopt, amend
or repeal these Bylaws; provided, however, that such action by Stockholders shall require, in addition to any other vote required by
the Certificate of Incorporation or applicable law, the affirmative vote of the holders of at least two-thirds of the voting power of
all the then outstanding shares of voting Stock of the Corporation with the power to vote generally in an election of Directors, voting
together as a single class.
ARTICLE
XI.
DEFINITIONS
As
used in these Bylaws, unless the context otherwise requires, the following terms shall have the following meanings:
An
“electronic transmission” means any form of communication, not directly involving the physical transmission of paper,
including the use of, or participation in, one or more electronic networks or databases (including one or more distributed electronic
networks or databases), that creates a record that may be retained, retrieved and reviewed by a recipient thereof, and that may be directly
reproduced in paper form by such a recipient through an automated process.
An
“electronic mail” means an electronic transmission directed to a unique electronic mail address (which electronic
mail shall be deemed to include any files attached thereto and any information hyperlinked to a website if such electronic mail includes
the contact information of an officer or agent of the Corporation who is available to assist with accessing such files and information).
An
“electronic mail address” means a destination, commonly expressed as a string of characters, consisting of a unique
user name or mailbox (commonly referred to as the “local part” of the address) and a reference to an internet domain (commonly
referred to as the “domain part” of the address), whether or not displayed, to which electronic mail can be sent or delivered.
The
term “person” means any individual, general partnership, limited partnership, limited liability company, corporation,
trust, business trust, joint stock company, joint venture, unincorporated association, cooperative or association or any other legal
entity or organization of whatever nature, and shall include any successor (by merger or otherwise) of such entity.
*
* *
24
Exhibit
C — Form of Certificate of Merger
CERTIFICATE
OF MERGER MERGING
IPGX
MERGER SUB, INC.
WITH
AND INTO
ELROY
AIR, INC.
[ ],
2026
Pursuant
to Section 251 of the General Corporation Law of the State of Delaware (the “DGCL”), IPGX Merger Sub, Inc., a Delaware
corporation, and Elroy Air, Inc., a Delaware corporation, hereby certify as follows:
1. The
names and jurisdictions of the constituent corporations are Elroy Air, Inc., a Delaware corporation, and IPGX Merger Sub, Inc., a Delaware
corporation.
2. A
Business Combination Agreement has been adopted, approved, executed, certified and acknowledged by each of the constituent corporations
in accordance with Section 251 of the DGCL (the “Business Combination Agreement”).
3. Elroy
Air, Inc. shall be the surviving corporation in the merger (the “Surviving Corporation”). The name of the Surviving
Corporation following the Effective Time (as defined below) shall be Elroy Air, Inc.
4. The
certificate of incorporation of the Surviving Corporation is amended and restated as of the Effective Time to read in its entirety as
set forth on Annex A to this certificate of merger.
5. The
Business Combination Agreement is on file at the principal place of business of the Surviving Corporation, located at 440 Eagle Ct.,
Byron, CA 94514.
6. A
copy of the Business Combination Agreement will be furnished by the Surviving Corporation on request, and without cost, to any stockholder
of the constituent corporations.
7. The
merger is to be effective at the time of filing of this certificate of merger with the Secretary of State of the State of Delaware (the
“Effective Time”).
[signature
page follows]
IN
WITNESS WHEREOF, each of the constituent corporations has caused this certificate of merger to be signed by an authorized officer as
of the date first above written.
IPGX MERGER SUB, INC.
By:
Name:
Title:
ELROY AIR, INC.
By:
Name:
Andrew Clare
Title:
Chief Executive Officer
Annex
A
AMENDED
AND RESTATED
CERTIFICATE OF INCORPORATION
OF
ELROY
AIR, INC.
ARTICLE
I
The
name of the corporation is Elroy Air, Inc. (the “Corporation”).
ARTICLE
II
The
address of the Corporation’s registered office in the State of Delaware is 251 Little Falls Drive, in the city of Wilmington, County
of New Castle 19808-1674. The name of the Corporation’s registered agent at such address is Corporation Service Company.
ARTICLE
III
The
purpose of the Corporation is to engage in any lawful act or activity for which corporations may be organized under the General Corporation
Law of the State of Delaware (the “DGCL”), as the same exists or as may hereafter be amended from time to time.
ARTICLE
IV
The
Corporation shall have the authority to issue a total of 1,000 shares of common stock, with a par value of $0.001 per share.
ARTICLE
V
Unless
provided otherwise in the bylaws of the Corporation, elections of directors need not be by written ballot.
ARTICLE
VI
In
furtherance and not in limitation of the powers conferred by statute, the board of directors of the Corporation is expressly authorized
to make, alter, amend or repeal the bylaws of the Corporation.
ARTICLE
VII
The
Corporation shall have the right, subject to any express provisions or restrictions contained in this Certificate of Incorporation or
the bylaws of the Corporation, from time to time, to amend, alter, or repeal any provision of this Certificate of Incorporation in any
manner now or hereafter provided by law, and all rights and powers of any kind conferred upon a director or stockholder of the Corporation
by this Certificate of Incorporation or any amendment thereof are conferred subject to such right.
ARTICLE
VIII
To
the fullest extent permitted by the DGCL, as the same exists or as may hereafter be amended from time to time, a director of the Corporation
shall not be personally liable to the Corporation or its stockholders for monetary damages for breach of fiduciary duty as a director.
If the DGCL is amended to authorize corporate action further eliminating or limiting the personal liability of directors, then the liability
of a director of the Corporation shall be eliminated or limited to the fullest extent permitted by the DGCL, as so amended.
The
Corporation shall indemnify, to the fullest extent permitted by applicable law, any director or officer of the Corporation who was or
is a party or is threatened to be made a party to any threatened, pending or completed action, suit or proceeding, whether civil, criminal,
administrative or investigative (a “Proceeding”) by reason of the fact that he or she is or was a director, officer,
employee or agent of the Corporation or is or was serving at the request of the Corporation as a director, officer, employee or agent
of another corporation, partnership, joint venture, trust or other enterprise, including service with respect to employee benefit plans,
against expenses (including attorneys’ fees), judgments, fines and amounts paid in settlement actually and reasonably incurred
by such person in connection with any such Proceeding. The Corporation shall be required to indemnify a person in connection with a Proceeding
initiated by such person only if the Proceeding was authorized by the board of directors of the Corporation (other than a Proceeding
initiated to enforce these indemnification rights following the final disposition of such Proceeding).
The
Corporation shall have the power to indemnify, to the extent permitted by the DGCL, as it presently exists or may hereafter be amended
from time to time, any employee or agent of the Corporation who was or is a party or is threatened to be made a party to any Proceeding
by reason of the fact that he or she is or was a director, officer, employee or agent of the Corporation or is or was serving at the
request of the Corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other
enterprise, including service with respect to employee benefit plans, against expenses (including attorneys’ fees), judgments,
fines and amounts paid in settlement actually and reasonably incurred by such person in connection with any such Proceeding.
Neither
any amendment nor repeal of this Article VIII, nor the adoption of any provision of this Certificate of Incorporation inconsistent with
this Article VIII, shall eliminate or reduce the effect of this Article VIII in respect of any matter occurring, or any cause of action,
suit or claim accruing or arising or that, but for this Article, would accrue or arise, prior to such amendment, repeal or adoption of
an inconsistent provision.
Exhibit
D — Form of A&R Registration Rights Agreement
Exhibit
E-1 — Form of Sponsor Lock-Up Agreement
Exhibit
E-2 — Form of Seller Lock-Up Agreement
Exhibit
F — Series A Preferred Stock Certificate of Designation
Exhibit
G — Form of FIRPTA
NOTICE
TO INTERNAL REVENUE SERVICE
PURSUANT TO TREASURY REGULATION SECTION 1.897-2(h)(2)
[
], 2026
BY
U.S. CERTIFIED MAIL
RETURN RECEIPT REQUESTED
Ogden
Service Center
P.O.
Box 409101
Ogden,
UT 84409
NOTICE
TO THE INTERNAL REVENUE SERVICE OF ELROY AIR, INC., A
DELAWARE CORPORATION (“TARGET”), REGARDING UNITED STATES
REAL PROPERTY HOLDING CORPORATION STATUS UNDER TREASURY
REGULATION SECTION 1.897-2(h)(2)
To
whom it may concern:
1.
This Notice is being filed by Target pursuant to Section 1.897-2(h)(2) of the Treasury Regulations promulgated under the Internal Revenue
Code of 1986, as amended (the “Code”).
2.
The undersigned, on behalf of Target, hereby declares that stock of Target is not a United States real property interest within the meaning
of Section 897 of the Code because Target is not and has not been a United States real property holding corporation, as that term is
defined in Section 897(c)(2) of the Code, during the applicable period specified in Section 897(c)(1)(A)(ii) of the Code.
3.
Target’s U.S. employer identification number: [ ].
4.
Target’s address: [ ].
5.
In connection with the acquisition of Target by COLUMBUS CIRCLE CAPITAL CORP II, a Cayman Islands exempted company (“Acquiror”),
the undersigned provided the attached statement to Acquiror declaring that stock in Target is not a United States real property interest.
The statement was voluntarily provided in response to a request from the transferee, Acquiror, under Treasury Regulation Section 1.1445-2(c)(3)(i).
6.
Acquiror’s U.S. employer identification number: [ ].
7.
Acquiror’s address: [ ].
8.
Under penalties of perjury, the undersigned declares that he has examined this certification and the attachment hereto and, to the best
of his knowledge and belief, they are true, correct and complete. The undersigned further declares that he is a responsible officer,
and that he has authority to sign this document on behalf of Target.
A
copy of the statement provided pursuant to Treasury Regulation Sections 1.897-2(h)(2) and 1.1445-2(c)(3)(i) is attached.
ELROY AIR, INC., a Delaware corporation
Dated: [ ], 2026
By:
Name:
Title:
2
STATEMENT
OF NON-U.S. REAL PROPERTY HOLDING CORPORATION STATUS PURSUANT TO TREASURY REGULATION SECTIONS 1.897-2(h) AND 1.1445-2(c)(3)
Pursuant
to the BUSINESS COMBINATION AGREEMENT (“Agreement”) among (i) COLUMBUS CIRCLE CAPITAL CORP II, a Cayman Islands
exempted company (“Acquiror”), (ii) ELROY AIR, INC., a Delaware corporation (“Target”),
and (iii) IPGX MERGER SUB, INC., a Delaware corporation and wholly owned subsidiary of Acquiror (“Merger Sub”),
at the Effective Time (as such term is used in the Agreement), Merger Sub shall merge with and into Target, the separate corporate existence
of Merger Sub shall cease, and Target shall continue as the surviving corporation and become a wholly owned subsidiary of Acquiror.
Section
1445 of the Internal Revenue Code of 1986, as amended (the “Code”), provides that a transferee of a U.S. real property
interest must withhold tax if the transferor is not a U.S. person. In order to confirm that Acquiror, as transferee, is not required
to withhold tax upon the receipt of Target stock, the undersigned, in his capacity as [CEO (or other corporate officer)] of Target, hereby
certifies as follows:
1.
As of the date hereof, the stock of Target to be received by Acquiror pursuant to the Agreement does not constitute a United States real
property interest as that term is defined in Section 897(c)(1) of the Code;
2.
The determination in Paragraph 1, above, is based on a determination by Target that Target is not and has not been a United States real
property holding corporation as that term is defined in Section 897(c)(2) of the Code during the five-year period ending on the date
hereof, as indicated below;
3.
Target’s U.S. employer identification number is [ ]; and
4.
Target’s office address is [ ].
This
certificate is made in accordance with the requirements of Treasury Regulation Sections 1.897-2(h) and 1.1445-2(c)(3).
Under
penalties of perjury, I declare that I am a responsible officer of Target and have examined this statement and, to the best of my knowledge
and belief, it is true, correct and complete, and I further declare that I have authority to sign this document on behalf of Target.
ELROY AIR, INC., a Delaware corporation
Dated: [ ], 2026
By:
Name:
Title:
2
EX-3.1 — FORM OF CERTIFICATE OF DESIGNATION RELATING TO THE 12.0% SERIES A CUMULATIVE CONVERTIBLE PREFERRED STOCK
EX-3.1
Filename: ea029643801ex3-1.htm · Sequence: 3
Exhibit 3.1
[ELROY
AIR, INC.]
CERTIFICATE
OF DESIGNATION OF
PREFERENCES,
RIGHTS AND LIMITATIONS
OF
12.0%
SERIES A CUMULATIVE CONVERTIBLE PREFERRED STOCK
PURSUANT
TO SECTION 151(g) OF THE
DELAWARE
GENERAL CORPORATION LAW
The
undersigned, [___], does hereby certify that:
1.
He is the Chief Executive Officer of [Elroy Air, Inc.], a Delaware corporation (the “Corporation”).
2.
The Corporation is authorized to issue [●] shares of preferred stock, none of which have been issued.
3.
The following resolutions were duly adopted by the board of directors of the Corporation (the “Board of Directors”):
WHEREAS,
the certificate of incorporation of the Corporation provides for a class of its authorized stock known as preferred stock, consisting
of [●] shares, $[0.0001] par value per share, issuable from time to time in one or more series;
WHEREAS,
the Board of Directors is authorized to fix the dividend rights, dividend rate, voting rights, conversion rights, rights and terms of
redemption and liquidation preferences of any wholly unissued series of preferred stock and the number of shares constituting any series
and the designation thereof, of any of them; and
WHEREAS,
it is the desire of the Board of Directors, pursuant to its authority as aforesaid, to fix the rights, preferences, restrictions and
other matters relating to a series of the preferred stock, which shall consist of up to [●] shares of the preferred stock which
the Corporation has the authority to issue, as follows:
NOW,
THEREFORE, BE IT RESOLVED, that the Board of Directors does hereby provide for the issuance of a series of preferred stock for cash or
exchange of other securities, rights or property and does hereby fix and determine the rights, preferences, restrictions and other matters
relating to such series of preferred stock as follows:
TERMS
OF 12.0% SERIES A CUMULATIVE CONVERTIBLE PREFERRED STOCK
Section
1. Definitions. For the purposes hereof, the following terms shall have the following meanings:
“Accrued
Dividend” shall have the meaning set forth in Section 3(a).
“Accrued
Value” means, as of any date, with respect to each share of Preferred Stock as of the determination date, the sum, subject
to appropriate adjustment in the event of any stock dividend, stock split, combination or other similar recapitalization with respect
to the Preferred Stock, of (i) the Stated Value per share of Preferred Stock, plus (ii) the aggregate amount of any accrued PIK Dividends
on such share of Preferred Stock as of such date, plus (iii) on each Semi-Annual Dividend Date and on a cumulative basis, an additional
amount equal to the dollar value of all Accrued Dividends that have accrued on such share pursuant to Section 3(b), but only to
the extent such Accrued Dividends have not been paid, whether or not declared, but that have not, as of such date, been added to the
Accrued Value.
“Affiliate”
means any Person that, directly or indirectly through one or more intermediaries, controls or is controlled by or is under common control
with a Person, as such terms are used in and construed under Rule 405 of the Securities Act.
“Alternate
Consideration” shall have the meaning set forth in Section 7(f). “Annual Rate” means with respect
to a PIK Dividend, 12.0% of the Accrued Value and with respect to a Cash Dividend, 10.0% of the Accrued Value. “Attribution
Parties” shall have the meaning set forth in Section 6(d).
“Available
Proceeds” shall have the meaning set forth in Section 5(c)(i).
“Beneficial
Ownership Limitation” shall have the meaning set forth in Section 6(d).
“Business
Combination” means the transactions contemplated by the Business Combination Agreement.
“Business
Combination Agreement” means that certain Business Combination Agreement, dated as of [●], 2026, by and among the Corporation
(or its predecessor), [[●] Merger Sub, Inc.] and [●], as it may be further amended, modified or supplemented from time to
time.
“Business
Day” means any day other than Saturday, Sunday or other day on which commercial banks in The City of New York are authorized
or required by law to remain closed; provided, however, for clarification, commercial banks shall not be
deemed to be authorized or required by law to remain closed due to “stay at home”, “shelter-in-place”, “non-essential
employee” or any other similar orders or restrictions or the closure of any physical branch locations at the direction of any governmental
authority so long as the electronic funds transfer systems (including for wire transfers) of commercial banks in The City of New York
generally are open for use by customers on such day.
“Buy-In”
shall have the meaning set forth in Section 6(c)(iv). “Cash Dividend” shall have the meaning set forth in Section
3(a). “Closing” means the closing of the Business Combination.
2
“Closing
Date” means the Trading Day on which the Business Combination is consummated.
“Commission”
means the United States Securities and Exchange Commission.
“Common
Stock” means the common stock, par value [$0.0001] per share, of the Corporation and stock of any other class of securities
into which such securities may hereafter be reclassified or changed.
“Common
Stock Equivalents” means any securities of the Corporation that would entitle the holder thereof to acquire at any time Common
Stock, including, without limitation, any debt, preferred stock, right, option, warrant or other instrument that is at any time convertible
into or exercisable or exchangeable for, or otherwise entitles the holder thereof to receive, Common Stock, and any securities of the
Corporation that when paired with one or more other securities of the Corporation or another entity entitles the holder thereof to receive,
Common Stock.
“Conversion
Date” shall have the meaning set forth in Section 6(a).
“Conversion
Price” shall have the meaning set forth in Section 6(b).
“Conversion
Shares” means, collectively, the shares of Common Stock issuable upon conversion of the shares of Preferred Stock in accordance
with the terms hereof.
“Convertible
Securities” means any stock or securities (other than Options) directly or indirectly convertible into or exercisable or exchangeable
for, or which otherwise entitles the holder thereof to acquire, any shares of Common Stock and any securities of the Corporation that
when paired with one or more other securities of the Corporation or another entity entitles the holder thereof to receive, Common Stock.
“Corporation
Notice” shall have the meaning set forth in Section 8(a).
“Deemed
Liquidation Event” means: (i) a merger or consolidation in which (a) the Corporation is a constituent party or (b) a subsidiary
of the Corporation is a constituent party and the Corporation issues shares of its capital stock pursuant to such merger or consolidation;
provided, that, a Deemed Liquidation Event shall not include any such merger or consolidation involving the Corporation or a subsidiary
in which the shares of capital stock of the Corporation outstanding immediately prior to such merger or consolidation continue to represent,
or are converted into or exchanged for shares of capital stock that represent, immediately following such merger or consolidation, at
least a majority, by voting power, of the capital stock of (1) the surviving or resulting corporation; or (2) if the surviving or resulting
corporation is a wholly owned subsidiary of another corporation immediately following such merger or consolidation, the parent corporation
of such surviving or resulting corporation; or (ii) (a) the sale, in a single transaction or series of related transactions, by the Corporation
or any subsidiary of the Corporation of all or substantially all the assets of the Corporation and its subsidiaries taken as a whole,
or (b) the sale or disposition (whether by merger, consolidation or otherwise, and whether in a single transaction or a series of related
transactions) of one (1) or more subsidiaries of the Corporation if substantially all of the assets of the Corporation and its subsidiaries
taken as a whole are held by such subsidiary or subsidiaries, except where such sale is to a wholly owned subsidiary of the Corporation.
3
“Delaware
Courts” shall have the meaning set forth in Section 9(d).
“Dilutive
Issuance” shall have the meaning set forth in Section 7(c). “Distribution” shall have the meaning
set forth in Section 7(e).
“Effective
Date” means the date that the Registration Statement filed by the Corporation pursuant to the Registration Rights Agreement
is first declared effective by the Commission.
“Exchange
Act” means the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder.
“Exempt
Issuance” means the issuance of (a) any securities of the Corporation to employees, officers or directors, consultants, contractors,
vendors or other agents of the Corporation pursuant to any stock or option plan duly adopted for such purpose, by a majority of the non-employee
members of the Board of Directors or a majority of the members of a committee of non-employee directors established for such purpose
for services rendered to the Corporation, (b) securities upon the exercise or exchange of or conversion of any securities issued pursuant
to the Purchase Agreements or the Business Combination Agreement and/or other securities exercisable or exchangeable for or convertible
into shares of Common Stock issued and outstanding on the Closing Date, provided that such securities have not been amended
since the Closing Date to increase the number of such securities or to decrease the exercise price, exchange price or conversion price
of such securities (other than in connection with stock splits or combinations and automatic adjustments to such terms pursuant to anti-dilution
or similar provisions of such securities which are not more favorable to the holder thereof than the anti-dilution and similar provisions
set forth herein) or to extend the term of such securities, (c) the Conversion Shares, (d) securities issued pursuant to any merger,
acquisition or strategic transaction or partnership approved by a majority of the directors of the Corporation, provided that
(i) such securities are issued as “restricted securities” (as defined in Rule 144) or are issued pursuant to an effective
registration statement pursuant to the Securities Act and (ii) any such issuance shall only be to a Person (or to the equityholders of
a Person) which is, itself or through its subsidiaries, an operating company or an owner of an asset in a business synergistic with the
business of the Corporation and shall provide to the Corporation additional benefits in addition to the investment of funds and (e) any
securities issued by the corporation pursuant to any legal settlement or similar arrangement agreed or entered into by the Corporation,
provided that, in the aggregate, not more than [●]1 shares of Common Stock are issued or deemed issued
or issuable upon conversion, settlement, exercise or exchange of any such securities that are Options or Convertible Securities, but
any such Exempt Issuance shall not include a transaction in which the Corporation is issuing securities (i) primarily for the purpose
of raising capital, including an at-the-market offering, or (ii) to an entity whose primary business is investing in securities.
1 To
be $1,000,000 / SPAC Public Share redemption price.
4
“Floor
Price” means the lesser of (i) $5.00 (as adjusted for any stock dividend, stock split, stock combination, reclassification
or similar transaction occurring after the date of the Purchase Agreement) and (ii) the Conversion Price then in effect.
“Fundamental
Transaction” shall have the meaning set forth in Section 7(f).
“Holder”
shall have the meaning set forth in Section 2(a).
“Inflection
Point” means Inflection Point Asset Management LLC and/or one or more of its Affiliates.
“Junior
Securities” shall have the meaning set forth in Section 5(a).
“New
Issuance Price” shall have the meaning set forth in Section 7(c).
“Notice
of Conversion” shall have the meaning set forth in Section 6(a).
“Options”
means any rights, warrants or options to subscribe for or purchase shares of Common Stock or Convertible Securities.
“Option
Value” means the value of an Option based on the Black-Scholes Option Pricing model obtained from the “OV” function
on Bloomberg determined as of (A) the Trading Day prior to the public announcement of the issuance of the applicable Option, if the issuance
of such Option is publicly announced or (B) the Trading Day immediately following the issuance of the applicable Option if the issuance
of such Option is not publicly announced, for pricing purposes and reflecting (i) a risk-free interest rate corresponding to the U.S.
Treasury rate for a period equal to the remaining term of the applicable Option as of the applicable date of determination, (ii) an expected
volatility equal to the greater of 100% and the 100 day volatility obtained from the HVT function on Bloomberg as of (A)
the Trading Day immediately following the public announcement of the applicable Option if the issuance of such Option is publicly announced
or (B) the Trading Day immediately following the issuance of the applicable Option if the issuance of such Option is not publicly announced,
(iii) the underlying price per share used in such calculation shall be the highest weighted average price of the Common Stock during
the period beginning on the Trading Day prior to the execution of definitive documentation relating to the issuance of the applicable
Option and ending on (A) the Trading Day immediately following the public announcement of such issuance, if the issuance of such Option
is publicly announced or (B) the Trading Day immediately following the issuance of the applicable Option if the issuance of such Option
is not publicly announced, (iv) a zero cost of borrow and (v) a 360 day annualization factor, provided, however,
in case any Option is issued in connection with the issue or sale of other securities of the Corporation, together comprising one integrated
transaction, in no event shall the Option Value exceed a fraction of the aggregate consideration received (excluding the minimum aggregate
amount of additional consideration (as set forth in the instruments relating thereto, without regard to any provision contained therein
for a subsequent adjustment of such consideration) payable to the Corporation upon the exercise of such Options, or in the case of Options
for Convertible Securities, the exercise of such Options for Convertible Securities and the conversion or exchange of such Convertible
Securities) equal to (1) the number of shares of Common Stock underlying such Option divided by (2) the total number of shares of Common
Stock issued or issuable in the integrated transaction (including the number of shares underlying such Option).
5
“Original
Issue Date” means the date of the first issuance of any shares of the Preferred Stock regardless of the number of transfers
of any particular shares of Preferred Stock and regardless of the number of certificates which may be issued to evidence such Preferred
Stock.
“Person”
means an individual or corporation, partnership, trust, incorporated or unincorporated association, joint venture, limited liability
company, joint stock company, government (or an agency or subdivision thereof) or other entity of any kind.
“PIK
Dividend” shall have the meaning set forth in Section 3(a).
“Preferred
Stock” shall have the meaning set forth in Section 2(a).
“Preferred
Stock Liquidation Amount” shall have the meaning set forth in Section 5(b)(ii).
“Preferred
Stock Register” shall have the meaning set forth in Section 2(b).
“Purchase
Agreements” means the several Securities Purchase Agreements,
between
the Corporation and certain original Holders, as amended, modified or supplemented from time to time in accordance with their respective
terms.
“Purchase
Rights” shall have the meaning set forth in Section 7(d).
“Redemption
Date” shall have the meaning set forth in Section 8(b)(i).
“Redemption
Notice” shall have the meaning set forth in Section 8(b)(ii).
“Redemption
Price” shall have the meaning set forth in Section 8(b)(i).
“Redemption
Request” shall have the meaning set forth in Section 8(b)(i).
“Registration
Rights Agreement” means the Registration Rights Agreement, dated as of the Closing Date, among the Corporation, the original
Holders and certain other securityholders of the Corporation.
“Registration
Statement” means a registration statement meeting the requirements set forth in the Registration Rights Agreement and covering
the resale of the Conversion Shares by each Holder as provided for in the Registration Rights Agreement, including the Initial Registration
Statement (as defined in the Registration Rights Agreement) and any additional Registration Statements which may be required thereunder.
6
“Required
Holders” shall have the meaning set forth in Section 4(c).
“Rule
144” means Rule 144 promulgated by the Commission pursuant to the Securities Act, as such Rule may be amended from time to
time, or any similar rule or regulation hereafter adopted by the Commission having substantially the same effect as such Rule.
“Rule
424” means Rule 424 promulgated by the Commission pursuant to the Securities Act, as such Rule may be amended or interpreted
from time to time, or any similar rule or regulation hereafter adopted by the Commission having substantially the same purpose and effect
as such Rule.
“Securities
Act” means the Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder.
“Semi-Annual
Dividend Date” shall mean June 1 and December 1 of each year.
“Share
Delivery Date” shall have the meaning set forth in Section 6(c)(i).
“Standard
Settlement Period” shall have the meaning set forth in Section 6(c)(i).
“Stated
Value” shall have the meaning set forth in Section 2(a).
“Successor
Entity” shall have the meaning set forth in Section 7(f)(iii).
“Trading
Day” means a day on which the principal Trading Market is open for business.
“Trading
Market” means any of the following markets or exchanges on which the Common Stock is listed or quoted for trading on the date
in question: the NYSE American, the Nasdaq Capital Market, the Nasdaq Global Market, the Nasdaq Global Select Market, the New York Stock
Exchange (or any successors to any of the foregoing).
“Transfer
Agent” means Continental Stock Transfer & Trust Company, the current transfer agent of the Corporation, and any successor
transfer agent of the Corporation.
7
“VWAP”
means, for any date, the price determined by the first of the following clauses that applies: (a) if the Common Stock is then listed
or quoted on a Trading Market, the arithmetic mean of the daily volume weighted average prices of the Common Stock for each of the 20
Trading Days preceding such date (or the nearest preceding date) on the Trading Market on which the Common Stock is then listed or quoted
as reported by Bloomberg L.P. (based on a Trading Day from 9:30 a.m. (New York City time) to 4:02 p.m. (New York City time)), with each
such Trading Day weighted equally regardless of the aggregate trading volume for such Trading Day, (b) if OTCQB or OTCQX is not a Trading
Market, the arithmetic mean of the daily volume weighted average prices of the Common Stock for each of the 20 Trading Days preceding
such date (or the nearest preceding date) on OTCQB, OTCQX or OTCID as applicable, calculated in the same manner as clause (a), (c) if
the Common Stock is not then listed or quoted for trading on OTCQB or OTCQX and if prices for the Common Stock are then reported in The
Pink Open Market (or a similar organization or agency succeeding to its functions of reporting prices), the average of the highest closing
bid price and the lowest closing ask price of the Common Stock for the 20 Trading Days preceding such date, or (d) in all other cases,
the fair market value of a share of Common Stock as determined by an independent appraiser selected in good faith by the Holders of a
majority in interest of the Preferred Stock then outstanding and reasonably acceptable to the Corporation, the fees and expenses of which
shall be paid by the Corporation. For the avoidance of doubt, the daily volume weighted average price for each individual Trading Day
shall be determined by Bloomberg L.P. in accordance with its standard methodology, and the VWAP for the applicable period shall be calculated
by summing such daily values and dividing by the number of Trading Days in the measurement period (i.e., 20 Trading Days), such that
each Trading Day’s price is given equal weight irrespective of trading volume.
Section
2. Designation, Amount and Par Value.
(a)
The series of preferred stock shall be designated as its “12.0% Series A Cumulative Convertible Preferred Stock” (the “Preferred
Stock”) and the number of shares so designated shall be up to [●] (which shall not be subject to increase without the
written consent of a majority of the then outstanding Preferred Stock (each, a “Holder” and collectively, the “Holders”)).
Each share of Preferred Stock shall have a par value of $[0.0001] per share and a stated value equal to $12.00 (the “Stated
Value”).
(b)
The Corporation shall register, or cause its Transfer Agent to register, shares of the Preferred Stock upon records to be maintained
by the Corporation or its Transfer Agent for that purpose (the “Preferred Stock Register”), in the name of the Holders
thereof from time to time. The Corporation may deem and treat the registered Holder of shares of Preferred Stock as the absolute owner
thereof for the purpose of any conversion thereof and for all other purposes. The Corporation shall register, or cause its Transfer Agent
to register, the transfer of any shares of Preferred Stock in the Preferred Stock Register, upon surrender of the certificates evidencing
such shares to be transferred, duly endorsed by the Holder thereof, to the Corporation at its address specified herein and after such
Holder shall have provided to the Corporation such documentation and legal opinions, if any, as may be reasonably requested by the Corporation
(including any documentation required by the Transfer Agent with respect to such transfer). Upon the registration of such transfer, a
new certificate (to the extent such shares are certificated) evidencing the shares of Preferred Stock so transferred shall be issued
to the transferee and a new certificate evidencing the remaining portion of the shares not so transferred, if any, shall be issued to
the transferring Holder, in each case, within three Business Days. The Board of Directors may provide by resolution or resolutions that
some or all of the Preferred Stock shall be uncertificated shares. The Corporation shall not be required to register, or cause its Transfer
Agent to register, or record any transfer of any shares of the Preferred Stock that would violate, conflict with, or fail to be in compliance
with federal or state securities laws.
8
Section
3. Dividends.
(a)
From and after the Closing, subject to the terms of this Section 3, cumulative dividends shall accrue on the Accrued Value of
each share of Preferred Stock at the Annual Rate. Dividends on each share of Preferred Stock shall be cumulative and shall accrue daily
from and after the Closing, but shall compound on a semi-annual basis on each Semi-Annual Dividend Date (each, an “Accrued Dividend”)
whether or not earned or declared, and whether or not there are earnings or profits, surplus, or other funds or assets of the Corporation
legally available for the payment of dividends. Each Accrued Dividend shall be paid, at the election of the Corporation, either (i) in
cash (a “Cash Dividend”), or (ii) in kind by increasing the Accrued Value of such share (a “PIK Dividend”).
(b)
The Corporation shall not declare, pay or set aside any dividends on shares of any other class or series of capital stock of the Corporation
ranking junior to the Preferred Stock (other than dividends on shares of Common Stock payable in shares of Common Stock) unless (in addition
to the obtaining of any consents required in this Certificate of Designation or the Corporation’s certificate of incorporation)
the Holders of the Preferred Stock then outstanding shall first receive, or simultaneously receive, a dividend on each outstanding share
of Preferred Stock in an amount at least equal to the sum of (i) the amount of the aggregate Accrued Dividends then accrued on such share
of Preferred Stock and not previously paid and (ii) (A) in the case of a dividend on Common Stock or any class or series that is convertible
into Common Stock, that dividend per share of Preferred Stock as would equal the product of (1) the dividend payable on each share of
such class or series determined, if applicable, as if all shares of such class or series had been converted into Common Stock and (2)
the number of shares of Common Stock issuable upon conversion of a share of Series A Cumulative Convertible Preferred Stock, in each
case calculated on the record date for determination of holders entitled to receive such dividend or (B) in the case of a dividend on
any class or series of capital stock of the Corporation ranking junior to the Preferred Stock that is not convertible into Common Stock,
at a rate per share of Preferred Stock determined by (1) dividing the amount of the dividend payable on each share of such class or series
of capital stock by the original issuance price of such class or series of capital stock (subject to appropriate adjustment in the event
of any stock dividend, stock split, combination or other similar recapitalization with respect to such class or series) and (2) multiplying
such fraction by an amount equal to the Accrued Value; provided that if the Corporation declares, pays or sets aside, on the same date,
a dividend on shares of more than one class or series of capital stock of the Corporation that is junior to the Preferred Stock, the
dividend payable to the Holders of Preferred Stock pursuant to this Section 3 shall be calculated based upon the dividend on the
class or series of capital stock that would result in the highest Preferred Stock dividend.
(c)
Subject to Section 5 and Section 7, the Holders shall be entitled to receive, and the Corporation shall pay, dividends
on shares of Preferred Stock (other than Accrued Dividends), on an as-converted basis, equal to and in the same form as dividends actually
paid on shares of the Common Stock when, as and if such dividends are paid on shares of the Common Stock.
9
(d)
Notwithstanding anything to the contrary herein, to the extent that the Holder’s right to participate in any dividend would result
in the Holder exceeding the Beneficial Ownership Limitation, then the Holder shall not be entitled to participate in such dividend to
such extent (or in the beneficial ownership of any shares of Common Stock as a result of such Distribution to such extent) and the portion
of such dividend shall be held in abeyance for the benefit of the Holder until such time, if ever, such grant, issuance or sale, as its
right thereto would not result in the Holder exceeding the Beneficial Ownership Limitation.
Section
4. Voting Rights.
(a)
The Holders shall be entitled to notice of any meeting of stockholders of the Corporation and, except as otherwise required by law or
as may be provided herein, shall vote together with the holders of Common Stock as a single class upon any matter submitted to the stockholders
for a vote.
(b)
On any matter presented to the stockholders of the Corporation for their action or consideration at any meeting of the stockholders of
the Corporation (or by written consent in lieu of a meeting), a Holder, together with its Attribution Parties, shall be entitled to the
number of votes equal to the number of whole shares of Common Stock into which the shares of Preferred Stock held by such Holder, together
with its Attribution Parties, are convertible on the record date for determining stockholders entitled to vote on such matter (as adjusted
from time to time pursuant to Section 7 hereof and subject to the Beneficial Ownership Limitation), but without regard as to whether
sufficient shares of Common Stock are available out of the Corporation’s authorized but unissued stock, for the purpose of effecting
the conversion of the Preferred Stock.
(c)
As long as at least 20% or more of the shares of Preferred Stock issued as of the Closing are outstanding, the Corporation shall not,
without the affirmative vote or action by written consent of the Holders of at least a majority of the issued and outstanding shares
of the Preferred Stock (the “Required Holders”), which majority must include Inflection Point if Inflection Point
then holds any shares of Preferred Stock:
(i)
liquidate, dissolve or wind-up the affairs of the Corporation;
(ii)
amend, alter or repeal the Corporation’s certificate of incorporation or bylaws, this Certificate of Designation or any similar
document of the Corporation in a manner that materially and adversely affects the powers, preferences or rights given to the Preferred
Stock;
(iii)
create any equity security, authorize the creation of any equity security, classify any equity security, reclassify any equity security,
or issue any other security convertible into or exercisable for any equity security, unless such security ranks junior to the Preferred
Stock with respect to its rights, preferences and privileges or increase the number of authorized shares of Preferred Stock;
(iv)
except as set forth in Section 3, purchase or redeem or pay any cash dividend on any capital stock of the Corporation ranking
junior to the Preferred Stock prior to payment of such cash dividend on the Preferred Stock or purchase or redeem any capital stock of
the Corporation ranking junior to the Preferred Stock, other than capital stock repurchased at cost from former employees and consultants
in connection with the cessation of their service or pursuant to the terms of any equity incentive plan of the Corporation;
10
(v)
enter into any transaction with an affiliate, other than the issuance of equity or awards to eligible participants under the Corporation’s
incentive plan, equity plan or equity-based compensation plan or with respect to employment, consulting or award agreements with respect
to executive officers of the Corporation, in each case regardless of whether such person (or such person’s affiliates) would be
considered an affiliate of the Corporation; or
(vi)
incur or guarantee any indebtedness other than equipment leases or trade payables incurred in the ordinary course of business; provided,
however, that the Preferred Stock shall not be considered indebtedness for purposes of this calculation.
(d)
Notwithstanding anything to the contrary herein, Section 6(d) may not be amended, modified or waived in any manner that materially
and adversely affects a Holder of Preferred Stock without such Holder’s consent.
Section
5. Ranking; Liquidation.
(a)
The Preferred Stock shall rank senior to all of the Common Stock and any other class or series of capital stock of the Corporation currently
existing or hereafter authorized, classified or reclassified by the Corporation (collectively, “Junior Securities”),
in each case, as to rights to receive dividends or to participate in distributions of assets or payments upon liquidation, dissolution
or winding up of the Corporation, whether voluntarily or involuntarily.
(b)
Preferential Payments to Holders of Preferred Stock; Distribution of Remaining Assets.
(i)
In the event of any voluntary or involuntary liquidation, dissolution or winding up of the Corporation, the Holders of shares of Preferred
Stock then outstanding shall be entitled to be paid out of the assets of the Corporation available for distribution to its stockholders,
and in the event of a Deemed Liquidation Event, the Holders of shares of Preferred Stock then outstanding shall be entitled to be paid
out of the consideration payable to stockholders in such Deemed Liquidation Event or out of the Available Proceeds (as defined below),
as applicable, before any payment shall be made to the holders of Common Stock or other Junior Securities by reason of their ownership
thereof, an amount per share equal to 100% of the Accrued Value on each share of Preferred Stock. If upon any such liquidation, dissolution
or winding up of the Corporation or Deemed Liquidation Event, the assets of the Corporation available for distribution to its stockholders
shall be insufficient to pay the Holders of shares of Preferred Stock the full amount to which they shall be entitled under this Section
5(b), the Holders of shares of Preferred Stock shall share ratably in any distribution of the assets available for distribution in
proportion to the respective amounts that would otherwise be payable in respect of the shares held by them upon such distribution if
all amounts payable on or with respect to such shares were paid in full.
11
(ii)
In the event of any voluntary or involuntary liquidation, dissolution or winding up of the Corporation, after the payment in full of
all amounts required to be paid to the holders of shares of Preferred Stock pursuant to Section 5(b)(i), the remaining assets
of the Corporation available for distribution to its stockholders or, in the case of a Deemed Liquidation Event, the consideration not
payable to the holders of shares of Preferred Stock pursuant to Section 5(b)(i) or the remaining Available Proceeds, as the case
may be, shall be distributed among the holders of the shares of Preferred Stock and Common Stock, pro rata based on the number of shares
held by each such holder, treating for this purpose all such securities as if they had been converted to Common Stock pursuant to the
terms of this Certificate of Designation immediately prior to such liquidation, dissolution or winding up of the Corporation. The aggregate
amount which a holder of a share of Preferred Stock is entitled to receive under Sections 5(b)(i) and 5(b)(ii) is hereinafter
referred to as the “Preferred Stock Liquidation Amount.”
(c)
Deemed Liquidation Events.
(i)
In the event of a Deemed Liquidation Event, if the Corporation does not effect a dissolution of the Corporation under the Delaware General
Corporation Law within ninety (90) days after such Deemed Liquidation Event, then (i) the Corporation shall send a written notice to
each Holder of Preferred Stock no later than the ninetieth (90th) day after the Deemed Liquidation Event advising such Holders
of their right (and the requirements to be met to secure such right) pursuant to the terms of the following clause to require the redemption
of such shares of Preferred Stock, and (ii) if the Required Holders so request in a written instrument delivered to the Corporation not
later than one hundred twenty (120) days after such Deemed Liquidation Event, the Corporation shall use the consideration received by
the Corporation for such Deemed Liquidation Event (net of any retained liabilities associated with the assets sold or technology licensed,
or any other expenses associated with the Deemed Liquidation Event or the dissolution of the Corporation, in each case as determined
in good faith by the Board of Directors of the Corporation), together with any other assets of the Corporation available for distribution
to its stockholders, all to the extent permitted by Delaware law governing distributions to stockholders (the “Available Proceeds”),
on the one hundred fiftieth (150th) day after such Deemed Liquidation Event, to redeem all outstanding shares of Preferred
Stock at a price per share equal to the Preferred Stock Liquidation Amount. Notwithstanding the foregoing, in the event of a redemption
pursuant to the preceding sentence, if the Available Proceeds are not sufficient to redeem all outstanding shares of Preferred Stock,
the Corporation shall redeem a pro rata portion of each Holder’s shares of Preferred Stock to the fullest extent of such Available
Proceeds, based on the respective amounts that would otherwise be payable in respect of the shares to be redeemed if the Available Proceeds
were sufficient to redeem all such shares, and shall redeem the remaining shares as soon as it may lawfully do so under Delaware law
governing distributions to stockholders. The provisions of Section 5(i) shall apply, with such necessary changes in the details
thereof as are necessitated by the context, to the redemption of the Preferred Stock pursuant to this Section 5(c)(i). Prior to
the distribution or redemption provided for in this Section 5(c)(i), the Corporation shall not expend or dissipate the consideration
received for such Deemed Liquidation Event, except to discharge expenses incurred in connection with such Deemed Liquidation Event.
12
(ii)
In any Deemed Liquidation Event, if Available Proceeds are in a form of property other than in cash, the value of such distribution shall
be deemed to be the fair market value of such property. The determination of fair market value of such property shall be made in good
faith by the Board of Directors of the Corporation, provided that to the extent such property consists of securities, the fair market
value of such securities shall be determined as follows:
(A). For
securities not subject to investment letters or other similar restrictions on free marketability
covered by Section 5(c)(ii)(B) below, the fair market value of such securities shall
be the VWAP of such securities on the date of receipt (substituting the references to “Common
Stock” in the definition of “VWAP” with such publicly traded security);
and
(B). The
method of valuation of securities subject to investment letters or other similar restrictions
on free marketability (other than restrictions arising solely by virtue of a stockholder’s
status as an affiliate or former affiliate) shall take into account an appropriate discount
(as determined in good faith by the Board of Directors of the Corporation) from the market
value as determined pursuant to Section 5(c)(ii)(A) above so as to reflect the approximate
fair market value thereof.
(iii)
If any portion of the consideration payable to the stockholders of the Corporation is payable only upon satisfaction of contingencies
(the “Additional Consideration”), (a) the portion of such consideration that is not Additional Consideration (such
portion, the “Initial Consideration”) shall be allocated in accordance with the foregoing Section 5(b) and
this Section 5(c) as if the Initial Consideration were the only consideration payable in connection with such Deemed Liquidation
Event; and (b) any Additional Consideration which becomes payable to the stockholders of the Corporation upon satisfaction of such contingencies
shall be allocated among the holders of capital stock of the Corporation in accordance with Sections 5(b) and Section 5(c)
after taking into account the previous payment of the Initial Consideration as part of the same transaction. For the purposes of this
Section 5(c)(iii), consideration placed into escrow or retained as a holdback to be available for satisfaction of indemnification
or similar obligations in connection with such Deemed Liquidation Event shall be deemed to be Additional Consideration.
13
Section
6. Conversion.
(a)
Conversions at Option of Holder. Each share of Preferred Stock shall be convertible, at any time and from time to time from and
after the Original Issue Date at the option of the Holder thereof, into that number of whole shares of Common Stock (subject to the limitations
set forth in Section 6(d)) determined by dividing the Accrued Value of such share of Preferred Stock by the Conversion Price.
Holders shall effect conversions by providing the Corporation with the form of conversion notice attached hereto as Annex A
(a “Notice of Conversion”), unless the Corporation directs Holders that the Notice of Conversion shall be delivered
to the Corporation’s transfer agent. Each Notice of Conversion shall specify the number of shares of Preferred Stock to be converted,
the number of shares of Preferred Stock owned prior to the conversion at issue, the number of shares of Preferred Stock owned subsequent
to the conversion at issue and the date on which such conversion is to be effected, which date may not be prior to the date the applicable
Holder delivers by e-mail attachment or by a nationally recognized overnight courier service such Notice of Conversion to the Corporation
(such date, the “Conversion Date”). If no Conversion Date is specified in a Notice of Conversion, the Conversion Date
shall be the date that such Notice of Conversion to the Corporation is deemed delivered hereunder. No ink-original Notice of Conversion
shall be required, nor shall any medallion guarantee (or other type of guarantee or notarization) of any Notice of Conversion form be
required. The calculations and entries set forth in the Notice of Conversion shall control in the absence of manifest or mathematical
error. To effect conversions of shares of Preferred Stock, a Holder shall not be required to surrender the certificate(s) representing
the shares of Preferred Stock to the Corporation unless all of the shares of Preferred Stock represented thereby are so converted, in
which case such Holder shall deliver the certificate representing such shares of Preferred Stock promptly following the Conversion Date
at issue. Shares of Preferred Stock converted into Common Stock or redeemed in accordance with the terms hereof shall be canceled and
shall not be reissued, and all rights (other than the right to receive the Conversion Shares) with respect to such shares will terminate.
The Corporation’s stock ledger and transfer book shall serve as the exclusive record of outstanding shares of Preferred Stock.
(b)
Conversion Price. The initial conversion price is $12.00, subject to adjustment herein (the “Conversion Price”).
(c)
Mechanics of Conversion
(i)
Delivery of Conversion Shares Upon Conversion. Not later than the number of Trading Days comprising the Standard Settlement Period
(as defined below) after each Conversion Date (the “Share Delivery Date”), the Corporation shall deliver, or cause
to be delivered, to the converting Holder (A) the number of Conversion Shares being acquired upon the conversion of the Preferred Stock,
which on or after the earlier of (i) the one year anniversary of the Original Issue Date or (ii) the Effective Date, shall be free of
restrictive legends and trading restrictions (other than those which may then be required by any Purchase Agreement or any other applicable
lock-up agreement or similar agreement) and (B) cash in an amount equal to any accrued and unpaid dividends, if any. On or after the
earlier of (i) the one year anniversary of the Original Issue Date or (ii) the Effective Date, the Corporation shall deliver the Conversion
Shares required to be delivered by the Corporation under this Section 6 electronically through the Depository Trust Company or
another established clearing corporation performing similar functions. As used herein, “Standard Settlement Period”
means the standard settlement period, expressed in a number of Trading Days, on the Corporation’s primary Trading Market with respect
to the Common Stock as in effect on the date of delivery of the Notice of Conversion. Notwithstanding the foregoing, with respect to
any Notice(s) of Conversion delivered at or prior to 12:00 p.m. (New York City time) on the Original Issue Date, the Corporation agrees
to deliver the Conversion Shares subject to such notice(s) by 4:00 p.m. (New York City time) on the Original Issue Date.
14
(ii)
Failure to Deliver Conversion Shares. If, in the case of any Notice of Conversion, such Conversion Shares are not delivered to
or as reasonably directed by the applicable Holder by the Share Delivery Date, the Holder shall be entitled to elect by written notice
to the Corporation at any time on or before its receipt of such Conversion Shares, to rescind such conversion, in which event the Corporation
shall promptly return to the Holder any original Preferred Stock certificate delivered to the Corporation and the Holder shall promptly
return to the Corporation the Conversion Shares issued to such Holder pursuant to the rescinded Notice of Conversion.
(iii)
Obligation Absolute; Partial Liquidated Damages. The Corporation’s obligation to issue and deliver the Conversion Shares
upon conversion of Preferred Stock in accordance with the terms hereof are absolute and unconditional, irrespective of any action or
inaction by a Holder to enforce the same, any waiver or consent with respect to any provision hereof, the recovery of any judgment against
any Person or any action to enforce the same, or any setoff, counterclaim, recoupment, limitation or termination, or any breach or alleged
breach by such Holder or any other Person of any obligation to the Corporation or any violation or alleged violation of law by such Holder
or any other person, and irrespective of any other circumstance which might otherwise limit such obligation of the Corporation to such
Holder in connection with the issuance of such Conversion Shares; provided, however, that such delivery shall
not operate as a waiver by the Corporation of any such action that the Corporation may have against such Holder. In the event a Holder
shall elect to convert any or all of the Accrued Value of its Preferred Stock, the Corporation may not refuse conversion based on any
claim that such Holder or anyone associated or affiliated with such Holder has been engaged in any violation of law, agreement or for
any other reason, unless an injunction from a court, on notice to Holder, restraining and/or enjoining conversion of all or part of the
Preferred Stock of such Holder shall have been sought and obtained, and the Corporation posts a surety bond for the benefit of such Holder
in the amount of 150% of the Accrued Value of Preferred Stock which is subject to the injunction, which bond shall remain in effect until
the completion of arbitration/litigation of the underlying dispute and the proceeds of which shall be payable to such Holder to the extent
it obtains judgment. In the absence of such injunction, the Corporation shall issue Conversion Shares and, if applicable, cash, upon
a properly noticed conversion. If the Corporation fails to deliver to a Holder such Conversion Shares pursuant to Section 6(c)(i)
by 10th Trading Day after the Share Delivery Date applicable to such conversion, the Corporation shall pay to such Holder,
in cash, as liquidated damages and not as a penalty, for each $5,000 of Accrued Value of Preferred Stock being converted, $25 per Trading
Day (increasing to $50 per Trading Day on the third Trading Day and increasing to $100 per Trading Day on the sixth Trading Day after
such damages begin to accrue) for each Trading Day after the 10th Trading Day after the Share Delivery Date until such Conversion
Shares are delivered or Holder rescinds such conversion. Nothing herein shall limit a Holder’s right to pursue actual damages for
the Corporation’s failure to deliver Conversion Shares within the period specified herein and such Holder shall have the right
to pursue all remedies available to it hereunder, at law or in equity, including, without limitation, a decree of specific performance
and/or injunctive relief. The exercise of any such rights shall not prohibit a Holder from seeking to enforce damages pursuant to any
other Section hereof or under applicable law.
15
(iv)
Compensation for Buy-In on Failure to Timely Deliver Conversion Shares Upon Conversion. In addition to any other rights available
to the Holder, if the Corporation fails for any reason unrelated to the actions of the Holder or its Affiliates to deliver to a Holder
the applicable Conversion Shares by the Share Delivery Date pursuant to Section 6(c)(i), and if after such Share Delivery Date
such Holder is required by its brokerage firm to purchase (in an open market transaction or otherwise), or the Holder’s brokerage
firm otherwise purchases, shares of Common Stock to deliver in satisfaction of a sale by such Holder of the Conversion Shares which such
Holder was entitled to receive upon the conversion relating to such Share Delivery Date (a “Buy-In”), then the Corporation
shall (A) pay in cash to such Holder (in addition to any other remedies available to or elected by such Holder) the amount, if any, by
which (x) such Holder’s total purchase price (including any brokerage commissions) for the Common Stock so purchased exceeds (y)
the product of (1) the aggregate number of shares of Common Stock that such Holder was entitled to receive from the conversion at issue
multiplied by (2) the actual sale price at which the sell order giving rise to such purchase obligation was executed (excluding any brokerage
commissions) and (B) at the option of such Holder, either reissue (if surrendered) the shares of Preferred Stock equal to the number
of shares of Preferred Stock submitted for conversion (in which case, such conversion shall be deemed rescinded) or deliver to such Holder
the number of shares of Common Stock that would have been issued if the Corporation had timely complied with its delivery requirements
under Section 6(c)(i). For example, if a Holder purchases shares of Common Stock having a total purchase price of $11,000 to cover
a Buy-In with respect to an attempted conversion of shares of Preferred Stock with respect to which the actual sale price of the Conversion
Shares (including any applicable brokerage commissions) giving rise to such purchase obligation was a total of $10,000, under clause
(A) of the immediately preceding sentence, the Corporation shall be required to pay such Holder $1,000. The Holder shall provide the
Corporation written notice indicating the amounts payable to such Holder in respect of the Buy-In and, upon the request of the Corporation,
evidence of the amount of such loss. If a Holder purchases shares of Common Stock having a total purchase price of $9,000 to cover a
Buy-In with respect to an attempted conversion of shares of Preferred Stock with respect to which the actual sale price of the Conversion
Shares (including any applicable brokerage commissions) giving rise to such purchase obligation was a total of $10,000, under clause
(A) of the preceding sentence, the Corporation shall not be required to pay Holder any amount. For the avoidance of doubt, in the event
of a Buy-In, the Holder shall use commercially reasonable efforts to purchase shares at the lowest available price, paying the lowest
reasonably available brokerage commission. The Holder shall provide the Corporation written notice indicating the amounts payable to
such Holder in respect of the Buy-In and evidence of the amount of such loss. Nothing herein shall limit a Holder’s right to pursue
any other remedies available to it hereunder, at law or in equity including, without limitation, a decree of specific performance and/or
injunctive relief with respect to the Corporation’s failure to timely deliver Conversion Shares upon conversion of the shares of
Preferred Stock as required pursuant to the terms hereof.
16
(v)
Reservation of Shares Issuable Upon Conversion. The Corporation covenants that it will at all times reserve and keep available
out of its authorized and unissued shares of Common Stock for the sole purpose of issuance upon conversion of the Preferred Stock as
herein provided, free from preemptive rights or any other actual contingent purchase rights of Persons other than the Holder (and the
other Holders of the Preferred Stock), not less than such aggregate number of shares of the Common Stock as shall (subject to the terms
and conditions set forth in the Purchase Agreement) be issuable (taking into account the adjustments and restrictions of Section 7)
upon the conversion of the then outstanding shares of Preferred Stock (assuming for such purpose a Conversion Price equal to the Floor
Price and any such conversions are made without regard to any limitations on conversion set forth herein). The Corporation covenants
that all shares of Common Stock that shall be so issuable shall, upon issue, be duly authorized, validly issued, fully paid and nonassessable
and, if a Registration Statement is then effective under the Securities Act, shall be registered for public resale in accordance with
such Registration Statement (subject to such Holder’s compliance with its obligations under the Registration Rights Agreement).
(vi)
Fractional Shares. No fractional shares or scrip representing fractional shares shall be issued upon the conversion of the Preferred
Stock. As to any fraction of a share which the Holder would otherwise be entitled to purchase upon such conversion, the Corporation shall
at its election, either pay a cash adjustment in respect of such final fraction in an amount equal to such fraction multiplied by the
Conversion Price or round up to the next whole share. Notwithstanding anything to the contrary contained herein, but consistent with
the provisions of this subsection with respect to fractional Conversion Shares, nothing shall prevent any Holder from converting fractional
shares of Preferred Stock.
(vii)
Transfer Taxes and Expenses. The issuance of Conversion Shares on conversion of this Preferred Stock shall be made without charge
to any Holder for any documentary stamp or similar taxes that may be payable in respect of the issue or delivery of such Conversion Shares,
provided that the Corporation shall not be required to pay any tax that may be payable in respect of any transfer involved
in the issuance and delivery of any such Conversion Shares upon conversion in a name other than that of the Holders of such shares of
Preferred Stock and the Corporation shall not be required to issue or deliver such Conversion Shares unless or until the Person or Persons
requesting the issuance thereof shall have paid to the Corporation the amount of such tax or shall have established to the satisfaction
of the Corporation that such tax has been paid.
17
(d)
Beneficial Ownership Limitation. A Holder may notify the Corporation in writing in the event it elects to be subject to the provisions
contained in this Section 6(d); however, no Holder shall be subject to this Section 6(d) unless he, she or it makes such
election. If the election is made, (i) the Corporation shall not effect any conversion of the Preferred Stock, and such Holder shall
not have the right to convert all or any portion of the Preferred Stock, to the extent that, after giving effect to the conversion set
forth on the applicable Notice of Conversion, such Holder (together with such Holder’s Affiliates, and any Persons acting as a
group together with such Holder or any of such Holder’s Affiliates (such Persons, “Attribution Parties”)) would
beneficially own in excess of 4.9%, 9.9%, 19.9% of the Corporation’s Common Stock (or such other amount as a Holder may specify)
(the “Beneficial Ownership Limitation”) and (ii) the Corporation shall not permit the Holder to vote, and such Holder
shall not have the right vote pursuant to Section 4(b) of this Certificate of Designation, all or any portion of the Preferred
Stock that such Holder is not permitted to convert pursuant to the preceding clause (i) (provided, however, that such Holder shall retain
the right to vote pursuant to Section 4(c) of this Certificate of Designation to the extent that retaining such right does not
cause such Holder to be deemed to beneficially own Conversion Shares within the meaning of Rule 13d-3 promulgated under the Exchange
Act). For purposes of the foregoing sentence, the number of shares of Common Stock beneficially owned by such Holder and its Affiliates
and Attribution Parties shall include the number of shares of Common Stock issuable upon conversion of the Preferred Stock with respect
to which such determination is being made, but shall exclude the number of shares of Common Stock which are issuable upon (i) conversion
of the remaining, unconverted Accrued Value of Preferred Stock beneficially owned by such Holder or any of its Affiliates or Attribution
Parties and (ii) exercise or conversion of the unexercised or unconverted portion of any other securities of the Corporation subject
to a limitation on conversion or exercise analogous to the limitation contained herein beneficially owned by such Holder or any of its
Affiliates or Attribution Parties. Except as set forth in the preceding sentence, for purposes of this Section 6(d), beneficial
ownership shall be calculated in accordance with Section 13(d) of the Exchange Act and the rules and regulations promulgated thereunder.
To the extent that the limitation contained in this Section 6(d) applies, the determination of whether the Preferred Stock is
convertible (in relation to other securities owned by such Holder together with any Affiliates and Attribution Parties) and of how many
shares of Preferred Stock are convertible shall be in the sole discretion of such Holder, and the submission of a Notice of Conversion
shall be deemed to be such Holder’s determination of whether the shares of Preferred Stock may be converted (in relation to other
securities owned by such Holder together with any Affiliates and Attribution Parties) and how many shares of the Preferred Stock are
convertible, in each case subject to the Beneficial Ownership Limitation. To ensure compliance with this restriction, each Holder will
be deemed to represent to the Corporation each time it delivers a Notice of Conversion that such Notice of Conversion has not violated
the restrictions set forth in this paragraph and the Corporation shall have no obligation to verify or confirm the accuracy of such determination.
In addition, a determination as to any group status as contemplated above shall be determined in accordance with Section 13(d) of the
Exchange Act and the rules and regulations promulgated thereunder. The Holder shall provide the Corporation with any information reasonably
requested by the Corporation in connection with this Beneficial Ownership Limitation and the provisions related thereto, in each case
with respect to the Corporation’s reporting obligations pursuant to the Securities Act, the Exchange Act, or other federal or state
securities regulations. For purposes of this Section 6(d), in determining the number of outstanding shares of Common Stock, a
Holder may rely on the number of outstanding shares of Common Stock as stated in the most recent of the following: (i) the Corporation’s
most recent periodic or annual report filed with the Commission, as the case may be, (ii) a more recent public announcement by the Corporation
or (iii) a more recent written notice by the Corporation or the Transfer Agent setting forth the number of shares of Common Stock outstanding.
Upon the written or oral request (which may be via email) of a Holder, the Corporation shall within two Trading Days confirm in writing
to such Holder the number of shares of Common Stock then outstanding. In any case, the number of outstanding shares of Common Stock shall
be determined after giving effect to the conversion or exercise of securities of the Corporation, including the Preferred Stock, by such
Holder or its Affiliates or Attribution Parties since the date as of which such number of outstanding shares of Common Stock was reported.
By written notice to the Corporation, a Holder may from time to time increase or decrease the Beneficial Ownership Limitation applicable
to such Holder, provided, however, that any such increase in the Beneficial Ownership Limitation will not be effective until the sixty-first
(61st) day after such notice is delivered to the Corporation. The provisions of this paragraph shall be construed and implemented
in a manner otherwise than in strict conformity with the terms of this Section 6(d) to correct this paragraph (or any portion
hereof) which may be defective or inconsistent with the intended Beneficial Ownership Limitation contained herein or to make changes
or supplements necessary or desirable to properly give effect to such limitation. The limitations contained in this paragraph shall apply
to a successor Holder of Preferred Stock.
18
Section
7. Certain Adjustments.
(a)
Stock Dividends and Stock Splits. If the Corporation, at any time while this Preferred Stock is outstanding: (i) pays a stock
dividend or otherwise makes a distribution or distributions payable in shares of Common Stock on shares of Common Stock or any other
Common Stock Equivalents (which, for avoidance of doubt, shall not include any shares of Common Stock issued by the Corporation upon
conversion of, or payment of a dividend on, this Preferred Stock or any cash distributions), (ii) subdivides outstanding shares of Common
Stock into a larger number of shares, (iii) combines (including by way of a reverse stock split) outstanding shares of Common Stock into
a smaller number of shares, or (iv) issues, in the event of a reclassification of shares of the Common Stock, any shares of capital stock
of the Corporation, then each of the Conversion Price and the Floor Price shall be multiplied by a fraction of which the numerator shall
be the number of shares of Common Stock (excluding any treasury shares of the Corporation) outstanding immediately before such event,
and of which the denominator shall be the number of shares of Common Stock outstanding immediately after such event. Any adjustment made
pursuant to this Section 7(a) shall become effective immediately after the record date for the determination of stockholders entitled
to receive such dividend or distribution and shall become effective immediately after the effective date in the case of a subdivision,
combination or re-classification.
(b)
VWAP Reset. If on the twenty-first trading day following the date that is six months after the Closing Date, the VWAP (the “Measurement
Price”) is less than the Conversion Price then in effect, then the Conversion Price then in effect shall be reduced to an amount
equal to the greater of (i) the Measurement Price and (ii) $5.00.
(c)
Adjustment of Conversion Price upon Issuance of Common Stock.2 If and whenever on or after the Closing Date until the
first date on which no shares of Preferred Stock are outstanding the Corporation issues or sells, or in accordance with this Section
7(c) is deemed to have issued or sold, any shares of Common Stock (including the issuance or sale of shares of Common Stock owned
or held by or for the account of the Corporation, but excluding shares of Common Stock issued or sold, or deemed to have
been issued or sold, by the Corporation in connection with any Exempt Issuance) for a consideration per share (the “New Issuance
Price”) less than the Conversion Price (each such issue, sale or deemed issuance or sale, a “Dilutive Issuance”),
then, immediately after such Dilutive Issuance, the Conversion Price then in effect shall be reduced to an amount equal to the New Issuance
Price. For all purposes of the foregoing (including, without limitation, determining the adjusted Conversion Price and the New Issuance
Price under this Section 7(c)), the following shall be applicable:
(i)
Options and Convertible Securities. The consideration per share received by the Corporation for Common Stock issued or deemed
to have been issued pursuant to Section 7(c)(ii), relating to Options and Convertible Securities, shall be determined by dividing:
(A). the
total amount, if any, received or receivable by the Corporation as consideration for the
issue of such Options or Convertible Securities, plus the minimum aggregate amount of additional
consideration (as set forth in the instruments relating thereto, without regard to any provision
contained therein for a subsequent adjustment of such consideration) payable to the Corporation
upon the exercise of such Options or the conversion or exchange of such Convertible Securities,
or in the case of Options for Convertible Securities, the exercise of such Options for Convertible
Securities and the conversion or exchange of such Convertible Securities, by
2 To
be discussed.
19
(B). the
maximum number of shares of Common Stock (as set forth in the instruments relating thereto,
without regard to any provision contained therein for a subsequent adjustment of such number)
deemed to be issued pursuant to Section 7(c)(ii) upon the issuance of such Options
or Convertible Securities.
(ii) Deemed
Issuance of Options and Convertible Securities.
(A). If
the Corporation at any time or from time to time shall issue any Options or Convertible Securities
or shall fix a record date for the determination of holders of any class of securities entitled
to receive any such Options or Convertible Securities, in each case excluding shares of Common
Stock issued or sold, or deemed to have been issued or sold, by the Corporation in connection
with any Exempt Issuance, then the maximum number of shares of Common Stock (as set forth
in the instrument relating thereto, assuming the satisfaction of any conditions to exercisability,
convertibility or exchangeability but without regard to any provision contained therein for
a subsequent adjustment of such number) issuable upon the exercise of such Options or, in
the case of Convertible Securities and Options therefor, the conversion or exchange of such
Convertible Securities, shall be deemed to be outstanding and to have been issued as of the
time of such issue or, in case such a record date shall have been fixed, as of the close
of business on such record date when determining the amount of the adjustment for such issuance
under this Section 7(c).
(B). If
the purchase or exercise price provided for in any Options, the additional consideration,
if any, payable upon the issue, conversion, exercise or exchange of any Convertible Securities,
or the rate at which any Convertible Securities are convertible into or exercisable or exchangeable
for Common Stock increases or decreases at any time (other than (i) proportional changes
in conversion or exercise prices, as applicable, in connection with an event referred to
in Section 7(a) above and (ii) automatic adjustments to such terms pursuant to anti-dilution
or similar provisions of such Option or Convertible Security which are not more favorable
to the holder thereof than the anti-dilution and similar provisions set forth herein), the
Conversion Price in effect at the time of such increase or decrease shall be adjusted to
the Conversion Price which would have been in effect at such time had such Options or Convertible
Securities provided for such increased or decreased purchase price, additional consideration
or increased or decreased conversion rate (as the case may be) at the time initially granted,
issued or sold. For purposes of this Section 7(c), if the terms of any Option or Convertible
Security that was outstanding as of the date of first issuance of a share of Preferred Stock
are increased or decreased in the manner described in the immediately preceding sentence,
then such Option or Convertible Security and the shares of Common Stock deemed issuable upon
exercise, conversion or exchange thereof shall be deemed to have been issued as of the date
of such increase or decrease. No adjustment pursuant to this Section 7(c)(ii) shall
be made if such adjustment would result in an increase of the Conversion Price then in effect.
20
(iii) Calculation
of Consideration Received.
(A). In
case one or more Option is issued in connection with the issue or sale of other securities
of the Corporation, together comprising one integrated transaction, (x) each such Option
will be deemed to have been issued for the Option Value of such Option and (y) the other
securities issued or sold in such integrated transaction shall be deemed to have been issued
or sold for the difference of (I) the aggregate consideration received by the Corporation
less any consideration paid or payable by the Corporation pursuant to the terms of such other
securities of the Corporation, less (II) the Option Value of each such Option.
(B). If
any shares of Common Stock, Options or Convertible Securities are issued or sold or deemed
to have been issued or sold for cash, the consideration other than cash received therefor
will be deemed to be the net amount received by the Corporation therefor. If any shares of
Common Stock, Options or Convertible Securities are issued or sold for a consideration other
than cash, the amount of such consideration received by the Corporation will be the fair
value of such consideration, except where such consideration consists of publicly traded
securities, in which case the amount of consideration received by the Corporation will be
the VWAP of such publicly traded securities on the date of receipt (substituting the references
to “Common Stock” in the definition of VWAP with such publicly traded security).
If any shares of Common Stock, Options or Convertible Securities are issued to the owners
of the non-surviving entity in connection with any merger in which the Corporation is the
surviving entity, the amount of consideration therefor will be deemed to be the fair value
of such portion of the net assets and business of the non-surviving entity as is attributable
to such shares of Common Stock, Options or Convertible Securities, as the case may be. The
fair value of any consideration other than cash or publicly traded securities will be determined
jointly by the Corporation and the Required Holders. If such parties are unable to reach
agreement within ten (10) days after the occurrence of an event requiring valuation (the
“Valuation Event”), the fair value of such consideration will be determined
within five (5) Business Days after the tenth (10th) day following the Valuation Event by
an independent, reputable appraiser jointly selected by the Corporation and the Required
Holders. The determination of such appraiser shall be final and binding upon all parties
absent manifest error and the fees and expenses of such appraiser shall be borne by the Corporation.
21
(iv)
Record Date. If the Corporation takes a record of the holders of shares of Common Stock for the purpose of entitling them (A)
to receive a dividend or other distribution payable in shares of Common Stock, Options or in Convertible Securities or (B) to subscribe
for or purchase shares of Common Stock, Options or Convertible Securities, then such record date will be deemed to be the date of the
issuance or sale of the shares of Common Stock deemed to have been issued or sold upon the declaration of such dividend or the making
of such other distribution or the date of the granting of such right of subscription or purchase (as the case may be).
(v)
Expiration or Termination of Options or Convertible Securities. Upon the expiration or termination of any unexercised Option or
unconverted or unexchanged Convertible Securities (or portion thereof) which resulted (either upon its original issuance or upon a revision
of its terms) in an adjustment to the Conversion Price pursuant to the terms of Section 7(c), the Conversion Price shall be readjusted
to such Conversion Price as would have obtained had such Option or Convertible Securities (or portion thereof) never been issued.
(d)
Subsequent Rights Offerings. In addition to any adjustments pursuant to Section 7(a) and Section 7(c) above, if
at any time the Corporation grants, issues or sells any Common Stock Equivalents or rights to purchase stock, warrants, securities or
other property pro rata to all or substantially all of the record holders of any class of shares of Common Stock (the “Purchase
Rights”), then the Holders will be entitled to acquire, upon the terms applicable to such Purchase Rights, the aggregate Purchase
Rights which the Holder could have acquired if the Holder had held the number of shares of Common Stock acquirable upon complete conversion
of such Holder’s Preferred Stock (without regard to any limitations on conversion hereof, including without limitation, the Beneficial
Ownership Limitation) immediately before the date on which a record is taken for the grant, issuance or sale of such Purchase Rights,
or, if no such record is taken, the date as of which the record holders of shares of Common Stock are to be determined for the grant,
issue or sale of such Purchase Rights (provided, however, that, to the extent that the Holder’s right
to participate in any such Purchase Right would result in the Holder exceeding the Beneficial Ownership Limitation, then the Holder shall
not be entitled to participate in such Purchase Right to such extent (or beneficial ownership of such shares of Common Stock as a result
of such Purchase Right to such extent) and such Purchase Right to such extent shall be held in abeyance for the Holder until such time,
if ever, as its right thereto would not result in the Holder exceeding the Beneficial Ownership Limitation). To the extent that the issue
price of such Purchase Rights would result in an adjustment of the Conversion Price pursuant to Section 7(c), such adjustment
shall not occur to the extent the Holders were granted the right to acquire such Purchase Rights on the applicable terms.
22
(e)
Pro Rata Distributions. In addition to the requirements of Section 3, during such time as this Preferred Stock is outstanding,
if the Corporation declares or makes any dividend or other distribution of its assets (or rights to acquire its assets) to holders of
shares of Common Stock, by way of return of capital or otherwise (including, without limitation, any distribution of cash, stock or other
securities, property or options by way of a dividend, spin off, reclassification, corporate rearrangement, scheme of arrangement or other
similar transaction) (a “Distribution”), in each such case, the Holders shall be entitled to participate in such Distribution
to the same extent that the Holders would have participated therein if the Holder had held the number of shares of Common Stock acquirable
upon complete conversion of this Preferred Stock (without regard to any limitations on conversion hereof, including without limitation,
the Beneficial Ownership Limitation) immediately before the date of which a record is taken for such Distribution, or, if no such record
is taken, the date as of which the record holders of shares of Common Stock are to be determined for the participation in such Distribution
(provided, however, to the extent that the Holder’s right to participate in any such Distribution would
result in the Holder exceeding the Beneficial Ownership Limitation, then the Holder shall not be entitled to participate in such Distribution
to such extent (or in the beneficial ownership of any shares of Common Stock as a result of such Distribution to such extent) and the
portion of such Distribution shall be held in abeyance for the benefit of the Holder until such time, if ever, as its right thereto would
not result in the Holder exceeding the Beneficial Ownership Limitation).
(f)
Fundamental Transaction.
(i)
If, at any time while this Preferred Stock is outstanding, (i) the Corporation, directly or indirectly, in one or more related transactions
effects any merger or consolidation of the Corporation with or into another Person, (ii) the Corporation (and all of its Subsidiaries,
taken as a whole), directly or indirectly, effects any sale, lease, license, assignment, transfer, conveyance or other disposition of
all or substantially all of its assets in one or a series of related transactions, (iii) any, direct or indirect, purchase offer, tender
offer or exchange offer (whether by the Corporation or another Person) is completed pursuant to which holders of Common Stock are permitted
to sell, tender or exchange their shares for other securities, cash or property and has been accepted by the holders of 50% or more of
the outstanding Common Stock or 50% or more of the voting power of the common equity of the Corporation, (iv) the Corporation, directly
or indirectly, in one or more related transactions effects any reclassification, reorganization or recapitalization of the Common Stock
or any compulsory share exchange pursuant to which the Common Stock is effectively converted into or exchanged for other securities,
cash or property (other than as a result of a stock split, combination or reclassification of shares of Common Stock covered by Section
7(a)), or (v) the Corporation, directly or indirectly, in one or more related transactions consummates a stock or share purchase
agreement or other business combination (including, without limitation, a reorganization, recapitalization, spin-off or scheme of arrangement)
with another Person whereby such other Person acquires 50% or more of the outstanding shares of Common Stock or 50% or more of the voting
power of the common equity of the Corporation, and such event(s) do not constitute a Deemed Liquidation Event (each a “Fundamental
Transaction”), then, upon any subsequent conversion of this Preferred Stock, the Holder shall have the right to receive, for
each Conversion Share that would have been issuable upon such conversion immediately prior to the occurrence of such Fundamental Transaction
(without regard to any limitation in Section 6(d) on the conversion of this Preferred Stock), the number of shares of capital
stock of the successor or acquiring corporation or of the Corporation, if it is the surviving corporation, and any additional consideration
(the “Alternate Consideration”) receivable as a result of such Fundamental Transaction by a holder of the number of
shares of Common Stock for which this Preferred Stock is convertible immediately prior to such Fundamental Transaction (without regard
to any limitation in Section 6(d) on the conversion of this Preferred Stock).
23
(ii)
For purposes of any such conversion, the determination of the Conversion Price shall be appropriately adjusted to apply to such Alternate
Consideration based on the amount of Alternate Consideration issuable in respect of one share of Common Stock in such Fundamental Transaction,
and the Corporation shall apportion the Conversion Price among the Alternate Consideration in a reasonable manner reflecting the relative
value of any different components of the Alternate Consideration. If holders of Common Stock are given any choice as to the securities,
cash or property to be received in a Fundamental Transaction, then the Holder shall be given the same choice as to the Alternate Consideration
it receives upon any conversion of this Preferred Stock following such Fundamental Transaction. To the extent necessary to effectuate
the foregoing provisions, any successor to the Corporation or surviving entity in such Fundamental Transaction shall file a new Certificate
of Designation with the same terms and conditions and issue to the Holders new preferred stock consistent with the foregoing provisions
and evidencing the Holders’ right to convert such preferred stock into Alternate Consideration.
(iii)
The Corporation shall cause any successor entity in a Fundamental Transaction in which the Corporation is not the survivor (the “Successor
Entity”) to assume in writing all of the obligations of the Corporation under this Certificate of Designation and the Registration
Rights Agreement in accordance with the provisions of this Section 7(f) pursuant to written agreements in form and substance reasonably
satisfactory to the Required Holders and approved by the Required Holders (without unreasonable delay) prior to such Fundamental Transaction
and shall, at the option of the Holder of this Preferred Stock, deliver to the Holder in exchange for this Preferred Stock a security
of the Successor Entity evidenced by a written instrument substantially similar in form and substance to this Preferred Stock which is
convertible for a corresponding number of shares of capital stock of such Successor Entity (or its parent entity) equivalent to the shares
of Common Stock acquirable and receivable upon conversion of this Preferred Stock (without regard to any limitations on the conversion
of this Preferred Stock) prior to such Fundamental Transaction, and with a conversion price which applies the Conversion Price hereunder
to such shares of capital stock (but taking into account the relative value of the shares of Common Stock pursuant to such Fundamental
Transaction and the value of such shares of capital stock, such number of shares of capital stock and such conversion price being for
the purpose of protecting the economic value of this Preferred Stock immediately prior to the consummation of such Fundamental Transaction),
and which is reasonably satisfactory in form and substance to the Required Holders.
24
(g)
Calculations. All calculations under this Section 7 shall be made to the nearest cent or the nearest 1/100th of a share,
as the case may be. For purposes of this Section 7, the number of shares of Common Stock deemed to be issued and outstanding as
of a given date shall be the sum of the number of shares of Common Stock (excluding any treasury shares of the Corporation) issued and
outstanding.
(h)
Notice to the Holders.
(i)
Adjustment to Conversion Price. Whenever the Conversion Price is adjusted pursuant to any provision of this Section 7,
the Corporation shall promptly deliver to each Holder by email a notice setting forth the Conversion Price after such adjustment and
setting forth a brief statement of the facts requiring such adjustment.
(ii)
Notice to Allow Conversion by Holder. If (A) the Corporation shall declare a dividend (or any other distribution in whatever form)
on the Common Stock, (B) the Corporation shall declare a redemption of the Common Stock, (C) the Corporation shall authorize the granting
to all holders of the Common Stock of rights or warrants to subscribe for or purchase any shares of capital stock of any class or of
any rights, (D) the approval of any stockholders of the Corporation shall be required in connection with any reclassification of the
Common Stock, any consolidation or merger to which the Corporation is a party, any sale or transfer of all or substantially all of the
assets of the Corporation (and all of its Subsidiaries, taken as a whole), or any compulsory share exchange whereby the Common Stock
is converted into other securities, cash or property or (E) the Corporation shall authorize the voluntary or involuntary dissolution,
liquidation or winding up of the affairs of the Corporation, then, in each case, the Corporation shall cause to be filed at each office
or agency maintained for the purpose of conversion of this Preferred Stock, and shall cause to be delivered by email to each Holder at
its email address as it shall appear upon the stock books of the Corporation, at least twenty (20) calendar days prior to the applicable
record or effective date hereinafter specified, a notice stating (x) the date on which a record is to be taken for the purpose of such
dividend, distribution, redemption, rights or warrants, or if a record is not to be taken, the date as of which the holders of the Common
Stock of record to be entitled to such dividend, distributions, redemption, rights or warrants are to be determined or (y) the date on
which such reclassification, consolidation, merger, sale, transfer or share exchange is expected to become effective or close, and the
date as of which it is expected that holders of the Common Stock of record shall be entitled to exchange their shares of the Common Stock
for securities, cash or other property deliverable upon such reclassification, consolidation, merger, sale, transfer or share exchange,
provided that the failure to deliver such notice or any defect therein or in the delivery thereof shall not affect the
validity of the corporate action required to be specified in such notice. To the extent that any notice provided hereunder constitutes,
or contains, material, non-public information regarding the Corporation or any of the Subsidiaries, the Corporation shall simultaneously
file such notice with the Commission pursuant to a Current Report on Form 8-K, unless determined by the Corporation that such filing
would be harmful to the Corporation at such time, in which case the Corporation shall file such 8-K as soon as is reasonably practicable
in its discretion. For the avoidance of doubt, and without limiting the conversion rights of any Holder, each Holder shall remain entitled
to convert the Accrued Value of this Preferred Stock (or any part hereof) during the twenty (20)-day period commencing on the date of
such notice through the effective date of the event triggering such notice except as may otherwise be expressly set forth herein.
25
Section
8. Redemption.
(a)
Redemption by the Corporation. Subject to the provisions of this Section 8 and unless prohibited by applicable law governing
distributions to stockholders, if, throughout the 15-day period following the Corporation Notice (as defined below), (x) the Registration
Statement is effective, (y) the Registration Statement covers the resale of all of the Common Stock issuable upon conversion of all of
the outstanding shares of Preferred Stock and (z) a current prospectus relating thereto is available, the Corporation may, in its sole
discretion, redeem all or a portion of the outstanding shares of Preferred Stock:
(i)
on or after the Closing but prior to the first anniversary of the Closing, at a redemption price per share equal to the greater of (i)
150% of the Accrued Value (which shall be payable in cash) and (ii) such amount per share as would have been payable had all shares of
Preferred Stock been converted into Common Stock pursuant to Section 6 immediately prior to such redemption based on the then
effective rate of conversion (which shall be payable, at the option of the Corporation, in cash or shares of Common Stock or a combination
thereof, with the value of such shares of Common Stock being the closing price of such shares of Common Stock on the Trading Market on
the applicable date of redemption);
(ii)
on or after the first anniversary of the Closing but prior to the second anniversary of the Closing, at a redemption price per share
equal to the greater of (i) 140% of the Accrued Value (which shall be payable in cash) and (ii) such amount per share as would have been
payable had all shares of Preferred Stock been converted into Common Stock pursuant to Section 6 immediately prior to such redemption
based on the then effective rate of conversion (which shall be payable, at the option of the Corporation, in cash or shares of Common
Stock or a combination thereof, with the value of such shares of Common Stock being the closing price of such shares of Common Stock
on the Trading Market on the applicable date of redemption);
(iii)
on or after the second anniversary of the Closing but prior to the third anniversary of the Closing, at a redemption price per share
equal to the greater of (i) 130% of the Accrued Value (which shall be payable in cash) and (ii) such amount per share as would have been
payable had all shares of Preferred Stock been converted into Common Stock pursuant to Section 6 immediately prior to such redemption
based on the then effective rate of conversion (which shall be payable, at the option of the Corporation, in cash or shares of Common
Stock or a combination thereof, with the value of such shares of Common Stock being the closing price of such shares of Common Stock
on the Trading Market on the applicable date of redemption);
26
(iv)
on or after the third anniversary of the Closing but prior to the fourth anniversary of the Closing, at a redemption price per share
equal to the greater of (i) 120% of the Accrued Value (which shall be payable in cash) and (ii) such amount per share as would have been
payable had all shares of Preferred Stock been converted into Common Stock pursuant to Section 6 immediately prior to such redemption
based on the then effective rate of conversion (which shall be payable, at the option of the Corporation, in cash or shares of Common
Stock or a combination thereof, with the value of such shares of Common Stock being the closing price of such shares of Common Stock
on the Trading Market on the applicable date of redemption);
(v)
on or after the fourth anniversary of the Closing but prior to the fifth anniversary of the Closing, at a redemption price per share
equal to the greater of (i) 110% of the Accrued Value (which shall be payable in cash) and (ii) such amount per share as would have been
payable had all shares of Preferred Stock been converted into Common Stock pursuant to Section 6 immediately prior to such redemption
based on the then effective rate of conversion (which shall be payable, at the option of the Corporation, in cash or shares of Common
Stock or a combination thereof, with the value of such shares of Common Stock being the closing price of such shares of Common Stock
on the Trading Market on the applicable date of redemption); and
(vi)
on or after the fifth anniversary of the Closing, at a redemption price per share equal to the greater of (i) 100% of the Accrued Value
(which shall be payable in cash) and (ii) such amount per share as would have been payable had all shares of Preferred Stock been converted
into Common Stock pursuant to Section 6 immediately prior to such redemption based on the then effective rate of conversion (which
shall be payable, at the option of the Corporation, in cash or shares of Common Stock or a combination thereof, with the value of such
shares of Common Stock being the closing price of such shares of Common Stock on the Trading Market on the applicable date of redemption).
If,
on the date of such redemption, applicable law governing distributions to stockholders prevents the Corporation from redeeming all shares
of Preferred Stock scheduled to be redeemed, the Corporation shall be entitled to ratably redeem the maximum number of shares that it
may redeem consistent with such law and any Preferred Stock not so redeemed shall remain outstanding. The Corporation shall provide written
notice (the “Corporation Notice”) by e-mail and first class mail postage prepaid, to each Holder of record (determined
at the close of business on the Business Day next preceding the day on which the Corporation Notice is given) of the Preferred Stock
to be redeemed, at the address last shown on the records of the Corporation for such Holder, notifying such Holder of the redemption
to be effected, specifying the number of shares to be redeemed from such Holder, specifying the date of such redemption, the redemption
price, the place at which payment may be obtained and calling upon such Holder to surrender to the Corporation, in the manner and at
the place designated, his, her or its certificate or certificates representing the shares to be redeemed; provided that the date
of redemption shall be not less than 15 days from the date of the Corporation Notice. Except as otherwise provided herein, on or after
the applicable date of redemption, each Holder to be redeemed shall surrender to the Corporation the certificate or certificates representing
such shares, in the manner and at the place designated in the Corporation Notice, and thereupon the price of redemption of such shares
shall be payable to the order of the person whose name appears on such certificate or certificates as the owner thereof and each surrendered
certificate shall be cancelled. In the event less than all the shares represented by any such certificate are redeemed, a new certificate
shall be issued representing the unredeemed shares. Notwithstanding anything herein to the contrary, each Holder shall remain entitled
to convert all or a portion of the Accrued Value of its Preferred Stock (or any part thereof) at any time and from time to time during
the 15-day period commencing on the date of the Corporation Notice through the applicable date of redemption. Any payment of the redemption
price in shares of Common Stock shall be subject to the Beneficial Ownership Limitation. To the extent that the Holder’s receipt
of any such shares of Common Stock would result in the Holder exceeding the Beneficial Ownership Limitation, then the Holder shall not
be entitled to receive such shares of Common Stock to such extent (or in the beneficial ownership of any shares of Common Stock as a
result of thereof to such extent) and the portion of such redemption shall be held in abeyance for the benefit of the Holder until such
time, if ever, as its right thereto would not result in the Holder exceeding the Beneficial Ownership Limitation.
27
(b)
Redemption by the Holders.
(i)
Unless prohibited by applicable law governing distribution to stockholders, shares of Preferred Stock shall be redeemed by the Corporation
at a purchase price equal to the Accrued Value (the “Redemption Price”), if at any time and from time to time after
the fifth (5th) anniversary of the Closing, a Holder delivers to the Corporation a written notice demanding redemption of
all of such Holder’s shares of Preferred Stock (the “Redemption Request”). The 20th day after the date of the
Redemption Request shall be referred to as the “Redemption Date.” Upon receipt of a Redemption Request, the Corporation
shall apply all of its assets to any such redemption, and to no other corporate purpose, until the Redemption Price has been paid in
full, except to the extent prohibited by Delaware law governing distributions to stockholders.
(ii)
Following receipt of a Redemption Request, the Corporation shall send written notice of the mandatory redemption (the “Redemption
Notice”) to the redeeming Holder of record of Preferred Stock not less than 15 days prior to the Redemption Date. The Redemption
Notice shall state:
(A). the
number of shares of Preferred Stock held by the Holder that the Corporation shall redeem
on the Redemption Date;
(B). the Redemption
Date and the Redemption Price;
(C). the
date upon which the Holder’s right to convert such shares terminates; and
(D). for
Holders of shares in certificated form, that the Holder is to surrender to the Corporation,
in the manner and at the place designated, his, her or its certificate or certificates representing
the shares of Preferred Stock to be redeemed.
(iii)
On the Redemption Date, the Corporation shall redeem the Preferred Stock owned by such Holder. If on the Redemption Date Delaware law
governing distributions to stockholders prevents the Corporation from redeeming all shares of Preferred Stock to be redeemed, the Corporation
shall ratably redeem the maximum number of shares that it may redeem consistent with such law, and shall redeem the remaining shares
as soon as it may lawfully do so under such law. In the event that any portion of the Redemption Price has not been paid within 5 Business
Days following the Redemption Date, interest on such unpaid portion of the Redemption Price shall accrue thereon until such amount is
paid in full at a rate equal to the lesser of (i) 24.0% per annum and (ii) the maximum rate permitted under applicable law.
(c)
Rights Subsequent to Redemption. Upon the redemption of shares of Preferred Stock pursuant to Section 8(a) or Section
8(b), all rights with respect to such shares of Preferred Stock shall immediately terminate, except with respect to the right of
the Holders to receive the applicable redemption price with respect to such shares of Preferred Stock in accordance with Section 8(a)
or Section 8(b), as applicable.
28
Section
9. Miscellaneous.
(a)
Notices. Any and all notices or other communications or deliveries to be provided by the Holders hereunder including, without
limitation, any Notice of Conversion, shall be in writing and delivered personally, by e-mail, or sent by nationally recognized overnight
courier service, addressed to the Corporation, at the address set forth above, or at the address or email address most recently provided
to Holders by the Corporation for purposes of notice hereunder Attention: [●], e-mail address [●], or such other e-mail address
or address as the Corporation may specify for such purposes by notice to the Holders delivered in accordance with this Section 9.
Any and all notices or other communications or deliveries to be provided by the Corporation hereunder shall be in writing and delivered
personally, by e-mail, or sent by a nationally recognized overnight courier service addressed to each Holder at the e-mail address or
address of such Holder appearing on the books of the Corporation, or if no such e-mail address or address appears on the books of the
Corporation, at the principal place of business of such Holder, as set forth in the Purchase Agreement. Any notice or other communication
or deliveries hereunder shall be deemed given and effective on the earliest of (i) the time of transmission, if such notice or communication
is delivered via e-mail at the e-mail address set forth in this Section prior to 5:30 p.m. (New York City time) on any date, (ii) the
next Trading Day after the time of transmission, if such notice or communication is delivered via e-mail at the e-mail address set forth
in this Section on a day that is not a Trading Day or later than 5:30 p.m. (New York City time) on any Trading Day, (iii) the second
Trading Day following the date of mailing, if sent by U.S. nationally recognized overnight courier service, or (iv) upon actual receipt
by the party to whom such notice is required to be given.
(b)
Absolute Obligation. Except as expressly provided herein, no provision of this Certificate of Designation shall alter or impair
the obligation of the Corporation, which is absolute and unconditional, to pay liquidated damages and accrued dividends, as applicable,
on the shares of Preferred Stock at the time, place, and rate, and in the coin or currency, herein prescribed.
(c)
Lost or Mutilated Preferred Stock Certificate. If a Holder’s Preferred Stock certificate shall be mutilated, lost, stolen
or destroyed, the Corporation shall issue or cause to be issued, in exchange and substitution for and upon cancellation of a mutilated
certificate, or in lieu of or in substitution for a lost, stolen or destroyed certificate, a new certificate for the shares of Preferred
Stock so mutilated, lost, stolen or destroyed, but only upon receipt of evidence of such loss, theft or destruction of such certificate,
and of the ownership hereof reasonably satisfactory to the Corporation (which shall not include the posting of any bond). The applicant
for a new certificate under such circumstances shall also pay any reasonable third-party costs (including customary indemnity) associated
with the issuance of such replacement certificate.
29
(d)
Governing Law. All questions concerning the construction, validity, enforcement and interpretation of this Certificate of Designation
shall be governed by and construed and enforced in accordance with the internal laws of the State of Delaware, without regard to the
principles of conflict of laws thereof. All legal proceedings concerning the interpretation, enforcement and defense of the transactions
contemplated by this Certificate of Designation (whether brought against a party hereto or its respective Affiliates, directors, officers,
shareholders, employees or agents) shall be commenced in the state and federal courts sitting in the City of Wilmington, Delaware, County
of New Castle (the “Delaware Courts”). The Corporation and each Holder hereby irrevocably submits to the exclusive
jurisdiction of the Delaware Courts for the adjudication of any dispute hereunder or in connection herewith or with any transaction contemplated
hereby or discussed herein, and hereby irrevocably waives, and agrees not to assert in any suit, action or proceeding, any claim that
it is not personally subject to the jurisdiction of such Delaware Courts, or such Delaware Courts are improper or inconvenient venue
for such proceeding. The Corporation and each Holder hereby irrevocably waives personal service of process and consents to process being
served in any such suit, action or proceeding by mailing a copy thereof via registered or certified mail or overnight delivery (with
evidence of delivery) to such party at the address in effect for notices to it under this Certificate of Designation and agrees that
such service shall constitute good and sufficient service of process and notice thereof. Nothing contained herein shall be deemed to
limit in any way any right to serve process in any other manner permitted by applicable law. The Corporation and each Holder hereby irrevocably
waives, to the fullest extent permitted by applicable law, any and all right to trial by jury in any legal proceeding arising out of
or relating to this Certificate of Designation or the transactions contemplated hereby. If the Corporation or any Holder shall commence
an action or proceeding to enforce any provisions of this Certificate of Designation, then the prevailing party in such action or proceeding
shall be reimbursed by the other party for its attorneys’ fees and other costs and expenses incurred in the investigation, preparation
and prosecution of such action or proceeding.
(e)
Amendment. Subject to Section 4(c), this Certificate of Designation (or any provision hereof) may be amended by obtaining
the affirmative vote at a meeting duly called for such purpose, or written consent without a meeting in accordance with the Delaware
General Corporation Law, of the Required Holders, voting separately as a single class, and with such other stockholder approval, if any,
as may then be required pursuant to the DGCL and the Corporation’s certificate of incorporation; provided, however, and notwithstanding
anything in this Certificate of Designation to the contrary, no provision of this Certificate of Designation shall be amended to the
extent any such amendment would (i) disproportionately, materially and adversely modify any rights of any Holder (as compared to the
rights of the other Holders), (ii) impose any additional financial obligations or liabilities on a Holder or (iii) amend the provisions
of Section 3, Section 6, Section 7, Section 8(b) or this Section 9(e), unless such amendment applies to all Holders in the same fashion,
in each case, unless any such Holder shall have previously consented in writing to such amendment or voted to approve such amendment
at a meeting. No consideration shall be offered or paid to any Holder to amend or consent to a waiver or modification of any provision
of this Certificate of Designation unless the same consideration is also offered to all of the Holders. For clarification purposes, this
provision constitutes a separate right granted to each Holder by the Corporation and negotiated separately by each Holder, and is intended
for the Corporation to treat the Holders as a group and shall not in any way be construed as the Holders acting in concert or as a group
with respect to the purchase, disposition or voting of securities or otherwise.
(f)
Waiver. Any waiver by the Corporation or a Holder of a breach of any provision of this Certificate of Designation shall not operate
as or be construed to be a waiver of any other breach of such provision or of any breach of any other provision of this Certificate of
Designation or a waiver by any other Holders. The failure of the Corporation or a Holder to insist upon strict adherence to any term
of this Certificate of Designation on one or more occasions shall not be considered a waiver or deprive that party (or any other Holder)
of the right thereafter to insist upon strict adherence to that term or any other term of this Certificate of Designation on any other
occasion. Any waiver by the Corporation or a Holder must be in writing.
(g)
Severability. If any provision of this Certificate of Designation is invalid, illegal or unenforceable, the balance of this Certificate
of Designation shall remain in effect, and if any provision is inapplicable to any Person or circumstance, it shall nevertheless remain
applicable to all other Persons and circumstances. If it shall be found that any interest or other amount deemed interest due hereunder
violates the applicable law governing usury, the applicable rate of interest due hereunder shall automatically be lowered to equal the
maximum rate of interest permitted under applicable law.
30
(h)
Next Business Day. Whenever any payment or other obligation hereunder shall be due on a day other than a Business Day, such payment
shall be made on the next succeeding Business Day.
(i)
Headings. The headings contained herein are for convenience only, do not constitute a part of this Certificate of Designation
and shall not be deemed to limit or affect any of the provisions hereof.
(j)
Status of Converted or Redeemed Preferred Stock. Shares of Preferred Stock may only be issued pursuant to the Purchase Agreement.
If any shares of Preferred Stock shall be converted, redeemed or reacquired by the Corporation, such shares shall resume the status of
authorized but unissued shares of preferred stock and shall no longer be designated as 12.0% Series A Cumulative Convertible Preferred
Stock.
(k)
Tax Withholding. The Corporation agrees that, provided that each Holder delivers to the Corporation a properly executed IRS Form
W-9 or other certification satisfactory to the Corporation certifying as to such Holder’s status (or the status of such Holder’s
beneficial owner(s)) as a United States person (within the meaning of Section 7701(a)(30) of the Code) and such Holder’s (or such
beneficial owners’) eligibility for complete exemption from backup withholding (“U.S. Person Certification”),
under current law the Corporation (including any paying agent of the Corporation) shall not be required to, and shall not, withhold on
any payments or deemed payments to any such Holder. In the event that any Holder fails to deliver to the Corporation such properly executed
U.S. Person Certification, the Corporation reasonably believes that a previously delivered U.S. Person Certification is no longer accurate
and/or valid, or there is a change in law that affects the withholding obligations of the Corporation, the Corporation and its paying
agent shall be entitled to withhold taxes on all payments made to the relevant Holder in the form of cash or otherwise treated, in the
Corporation’s reasonable discretion, as a dividend for U.S. federal tax purposes or to request that the relevant Holder promptly
pay the Corporation in cash any amounts required to satisfy any withholding tax obligations, in each case, to the extent the Corporation
or its paying agent determines in good faith it is required to deduct and withhold tax on payments to the relevant Holder under applicable
law; provided, that the Corporation shall use commercially reasonable efforts to notify the relevant Holder of any required withholding
tax reasonably in advance of the date of the relevant payment. In the event that the Corporation does not have sufficient cash with respect
to any Holder from withholding on cash payments otherwise payable to such Holder and cash paid to the Corporation by such Holder to the
Corporation pursuant to the immediately preceding sentence, the Corporation and its paying agent shall be entitled to withhold taxes
on deemed payments, including distributions of additional Preferred Stock in lieu of cash and constructive distributions on the Preferred
Stock to the extent required by law, and the Corporation and its paying agent shall be entitled to satisfy any required withholding tax
on non-cash payments (including deemed payments) through a sale of a portion of the Preferred Stock received as a dividend or from cash
dividends or sales proceeds subsequently paid or credited on the Preferred Stock.
(l)
Tax Treatment. Absent a change in law, Internal Revenue Service practice or a contrary determination (as defined in Section 1313(a)
of the Internal Revenue Code, as amended (the “Code”)), each holder of Preferred Stock and the Corporation shall not
treat the Preferred Stock (based on their terms as set forth in this Certificate of Designation) as “preferred stock” within
the meaning of Section 305 of the Code and Treasury Regulation Section 1.305-5 for United States federal income tax and withholding tax
purposes and shall not take any position inconsistent with such treatment.
*********************
31
IN
WITNESS WHEREOF, this Certificate of Designation is executed on behalf of the Corporation by its Chief Executive Officer this [●]th
day of [●], 2026.
[ELROY AIR, INC.]
By:
Name:
[●]
Title:
Chief Executive Officer
ANNEX
A
NOTICE
OF CONVERSION
(TO
BE EXECUTED BY THE REGISTERED HOLDER IN ORDER TO CONVERT SHARES
OF 12.0% SERIES A CUMULATIVE CONVERTIBLE PREFERRED STOCK)
The
undersigned hereby elects to convert the number of shares of 12.0% Series A Cumulative Convertible Preferred Stock, par value $0.0001
per share (the “Preferred Stock”), indicated below into shares of Common Stock, par value $0.0001 per share (the “Common
Stock”), of [Elroy Air, Inc.], a Delaware corporation (the “Corporation”), according to the conditions hereof,
as of the date written below. If shares of Common Stock are to be issued in the name of a Person other than the undersigned, the undersigned
will pay all transfer taxes payable with respect thereto and is delivering herewith such certificates and opinions as may be required
by the Corporation in accordance with the Purchase Agreement. No fee will be charged to the Holders for any conversion, except for any
such transfer taxes.
Conversion
calculations:
Date to Effect Conversion:_____________________________________________________________
Number of shares of Preferred Stock owned prior to Conversion: ________________________________
Number of shares of Preferred Stock to be Converted: ________________________________________
Accrued Value of shares of Preferred Stock to be Converted: ___________________________________
Number of shares of Common Stock to be Issued: ___________________________________________
Applicable Conversion Price: ___________________________________________________________
Number of shares of Preferred Stock subsequent to Conversion: ________________________________
Address for Delivery: _________________________________________________________________
or
DWAC
Instructions:
Broker
no:____________
Account
no: ____________
[HOLDER]
By:
Name:
Title:
Annex A
EX-4.1 — FORM OF WARRANT TO BE ISSUED TO EACH SERIES A PREFERRED STOCK INVESTOR
EX-4.1
Filename: ea029643801ex4-1.htm · Sequence: 4
Exhibit 4.1
[NEITHER THIS SECURITY NOR THE SECURITIES FOR
WHICH THIS SECURITY IS EXERCISABLE HAVE BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION OR THE SECURITIES COMMISSION OF ANY
STATE IN RELIANCE UPON AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”),
AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT
TO AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE
WITH APPLICABLE STATE SECURITIES LAWS. THIS SECURITY AND THE SECURITIES ISSUABLE UPON EXERCISE OF THIS SECURITY MAY BE PLEDGED IN CONNECTION
WITH A BONA FIDE MARGIN ACCOUNT OR OTHER LOAN SECURED BY SUCH SECURITIES.]1
[ELROY
AIR, INC.]
COMMON STOCK PURCHASE WARRANT
Warrant Shares: [_______]
Initial Exercise Date: [●], [●]
THIS COMMON STOCK PURCHASE WARRANT
(this “Warrant”) certifies that, for value received, [_____________] or its assigns (the “Holder”)
is entitled, upon the terms and subject to the limitations on exercise and the conditions hereinafter set forth, at any time on or after
the date hereof (the “Initial Exercise Date”) and on or prior to 5:00 p.m. (New York City time) on [●], [●]2
(the “Termination Date”) but not thereafter, to subscribe for and purchase from [Elroy Air, Inc.], a Delaware corporation
(the “Company”), up to [______] shares (as subject to adjustment hereunder, the “Warrant Shares”)
of Common Stock. The purchase price of one share of Common Stock under this Warrant shall be equal to the Exercise Price, as defined in
Section 2(b).
This Warrant is one of a series
of common stock purchase warrants with substantially the same terms as this Warrant (notwithstanding that certain of such warrants are
[not] subject to restriction on free marketability), with an initial exercise price of $12.00 per share, issued on the Initial Exercise
Date (such series of warrants, the “Related Warrants”).
Section 1. Definitions. Capitalized
terms used and not otherwise defined herein shall have the meanings set forth in Schedule A hereto.
Section 2. Exercise.
(a) Exercise of Warrant. Exercise of the purchase rights represented by this Warrant may be made, in
whole or in part, at any time or times on or after the Initial Exercise Date and on or before the Termination Date by delivery to the
Company (or such other office or agency that the Company may designate by notice in writing to the registered Holder at the address of
the Holder appearing on the books of the Company), as applicable, of a duly executed PDF copy submitted by e-mail (or e-mail attachment)
of the Notice of Exercise in the form annexed hereto (the “Notice of Exercise”). Not later than the number of Trading
Days comprising the Standard Settlement Period (as defined in Section 2(d)(i) herein) following the date of exercise as aforesaid,
the Holder shall deliver to the Company the aggregate Exercise Price for the shares specified in the applicable Notice of Exercise by
wire transfer or cashier’s check drawn on a United States bank unless the cashless exercise procedure specified in Section 2(c)
below is available and specified in the applicable Notice of Exercise. No ink-original Notice of Exercise shall be required, nor shall
any medallion guarantee (or other type of guarantee or notarization) of any Notice of Exercise be required. Notwithstanding anything herein
to the contrary, the Holder shall not be required to physically surrender this Warrant to the Company until the Holder has purchased all
of the Warrant Shares available hereunder and the Warrant has been exercised in full, in which case, the Holder shall surrender this Warrant
to the Company for cancellation within three (3) Trading Days of the date on which the final Notice of Exercise is delivered to the Company.
Partial exercises of this Warrant resulting in purchases of a portion of the total number of Warrant Shares available hereunder shall
have the effect of lowering the outstanding number of Warrant Shares purchasable hereunder in an amount equal to the applicable number
of Warrant Shares purchased. The Holder and the Company shall maintain records showing the number of Warrant Shares purchased and the
date of such purchases. The Company shall deliver any objection to any Notice of Exercise within one (1) Business Day of receipt of such
notice. The Holder and any assignee, by acceptance of this Warrant, acknowledge and agree that, by reason of the provisions of this
paragraph, following the purchase of a portion of the Warrant Shares hereunder, the number of Warrant Shares available for purchase hereunder
at any given time may be less than the amount stated on the face hereof.
1 NTD: To be included on Warrants issued for new money on the
Closing Date, but not on Warrants issued in exchange for Company Pre-Funded Convertible Note Investor Warrants unless required by applicable
securities law.
2 NTD: five years after Initial Exercise Date.
(b) Exercise Price. The exercise price per share of Common Stock under this Warrant shall be $12.00,
subject to adjustment hereunder (the “Exercise Price”).
(c) Cashless Exercise. If at any time after the six (6) month anniversary of the Closing Date, (x)
the Warrant Shares issuable upon exercise of this Warrant would be (i) “restricted securities” as defined in Rule 144 or (ii)
the Holder is an Affiliate of the Company and (y) there is no effective registration statement registering, or the prospectus contained
therein is not available for the resale of the Warrant Shares by the Holder, then this Warrant may also be exercised, in whole or in part,
at such time by means of a “cashless exercise” in which the Holder shall be entitled to receive a number of Warrant Shares
equal to the quotient obtained by dividing ((A-B) multiplied by (X)) by (A), where:
(A) =
as applicable: (i) the VWAP on the Trading Day immediately preceding the date of the applicable Notice of Exercise if such Notice of Exercise is (1) both executed and delivered pursuant to Section 2(a) hereof on a day that is not a Trading Day, (2) both executed and delivered pursuant to Section 2(a) hereof on a Trading Day prior to the opening of “regular trading hours” (as defined in Rule 600(b) of Regulation NMS promulgated under the federal securities laws) on such Trading Day or (3) executed during “regular trading hours” on a Trading Day and is delivered within two (2) hours thereafter (including until two (2) hours after the close of “regular trading hours” on a Trading Day), or (ii) the VWAP on the date of the applicable Notice of Exercise if the date of such Notice of Exercise is a Trading Day and such Notice of Exercise is both executed and delivered pursuant to Section 2(a) hereof after the close of “regular trading hours” on such Trading Day;
(B) =
the Exercise Price of this Warrant, as adjusted hereunder; and
(X) =
the number of Warrant Shares that would be issuable upon exercise of this Warrant in accordance with the terms of this Warrant if such exercise were by means of a cash exercise rather than a cashless exercise.
If
Warrant Shares are issued in such a cashless exercise, the parties acknowledge and agree that in accordance with Section 3(a)(9) of the
Securities Act, the Warrant Shares shall take on the characteristics of the Warrants being exercised, and the holding period of the Warrant
Shares being issued may be tacked on to the holding period of this Warrant. The Company agrees not to take any position contrary to this
Section 2(c).
Notwithstanding anything herein to the
contrary, on the Termination Date, this Warrant shall be automatically exercised via cashless exercise pursuant to this Section 2(c).
For the avoidance of doubt, any shares of Common Stock issued upon such automatic cashless exercise shall constitute an Exempt Issuance
for purposes of the anti-dilution provisions set forth in Section 3(c) hereof and any anti-dilution provisions contained in the other
Transaction Documents.
2
(d) Mechanics of Exercise.
(i) Delivery of Warrant Shares Upon Exercise. The Company shall cause the Warrant Shares purchased
hereunder to be transmitted by the Transfer Agent to the Holder by crediting the account of the Holder’s or its designee’s
balance account with The Depository Trust Company through its Deposit or Withdrawal at Custodian system if the Company is then a participant
in such system and there is an effective registration statement permitting the issuance of the Warrant Shares to or resale of the Warrant
Shares by the Holder, and otherwise by physical delivery of a certificate, (or reasonable evidence of issuance by book entry of ownership
of the Warrant Shares) registered in the Company’s share register in the name of the Holder or its designee, for the number of Warrant
Shares to which the Holder is entitled pursuant to such exercise to the address specified by the Holder in the Notice of Exercise by the
date that is the later of (i) the Standard Settlement Period after the delivery to the Company of the Notice of Exercise, and (ii) one
(1) Trading Day after delivery of the aggregate Exercise Price to the Company (such date, the “Warrant Share Delivery Date”);
provided, however, in any event, the Company shall not be obligated to deliver Warrant Shares until it has
received the aggregate Exercise Price therefor. Upon delivery of the Notice of Exercise, the Holder shall be deemed for all corporate
purposes to have become the holder of record of the Warrant Shares with respect to which this Warrant has been exercised, irrespective
of the date of delivery of the Warrant Shares, provided that payment of the aggregate Exercise Price (other than in the
case of a cashless exercise) is received no later than the number of Trading Days comprising the Standard Settlement Period following
delivery of the Notice of Exercise. The Company agrees to maintain a transfer agent that is a participant in the FAST program so long
as this Warrant remains outstanding and exercisable. As used herein, “Standard Settlement Period” means the standard
settlement period, expressed in a number of Trading Days, on the Company’s primary Trading Market with respect to the Common Stock
as in effect on the date of delivery of the Notice of Exercise.
(ii) Delivery of New Warrants Upon Exercise. If this Warrant shall have been exercised in part, the
Company shall, at the request of a Holder and upon surrender of this Warrant certificate, at the time of delivery of the Warrant Shares,
deliver to the Holder a new Warrant evidencing the rights of the Holder to purchase the unpurchased Warrant Shares called for by this
Warrant, which new Warrant shall in all other respects be identical with this Warrant.
(iii) Rescission Rights. If the Company fails to cause the Transfer Agent to transmit to the Holder the
Warrant Shares pursuant to Section 2(d)(i) by the Warrant Share Delivery Date (subject to receipt of the aggregate Exercise Price
for the applicable exercise (other than in the case of a cashless exercise)), then the Holder will have the right to rescind such exercise
prior to the delivery of the Warrant Shares.
(iv) No Fractional Shares or Scrip. No fractional shares or scrip representing fractional shares shall
be issued upon the exercise of this Warrant. As to any fraction of a share which the Holder would otherwise be entitled to purchase upon
such exercise, the Company shall, at its election, either pay a cash adjustment in respect of such final fraction in an amount equal to
such fraction multiplied by the Exercise Price or round up to the next whole share.
(v) Charges, Taxes and Expenses. Issuance of Warrant Shares shall be made without charge to the Holder
for any issue or transfer tax or other incidental expense in respect of the issuance of such Warrant Shares, all of which taxes and expenses
shall be paid by the Company, and such Warrant Shares shall be issued in the name of the Holder or in such name or names as may be directed
by the Holder; provided, however, that, in the event that Warrant Shares are to be issued in a name other
than the name of the Holder, this Warrant when surrendered for exercise shall be accompanied by the Assignment Form attached hereto duly
executed by the Holder and the Company may require, as a condition thereto, the payment of a sum sufficient to reimburse it for any transfer
tax incidental thereto. The Company shall pay all Transfer Agent fees required for same-day processing of any Notice of Exercise and all
fees to the Depository Trust Company (or another established clearing corporation performing similar functions) required for same-day
electronic delivery of the Warrant Shares pursuant to the terms of this Warrant.
(vi) Closing of Books. The Company will not close its stockholder books or records in any manner intended
to prevent the timely exercise of this Warrant, pursuant to the terms hereof.
3
(e) Holder’s Exercise Limitations. The Holder may notify the Company in writing in the event
it elects to be subject to the provisions contained in this Section 2(e); however, the Holder shall not be subject to this Section
2(e) unless he, she or it makes such election. If the election is made, the Company shall not effect any exercise of this Warrant,
and a Holder shall not have the right to exercise any portion of this Warrant, pursuant to Section 2 or otherwise, to the extent
that after giving effect to such issuance after exercise as set forth on the applicable Notice of Exercise, the Holder (together with
the Holder’s Affiliates, and any Persons acting as a group together with the Holder or any of the Holder’s Affiliates (such
Persons, “Attribution Parties”)) would beneficially own in excess of 4.9%, 9.9%, or 19.9% of the Common Stock (or such
other amount as the Holder may specify) (the “Beneficial Ownership Limitation”). For purposes of the foregoing sentence,
the number of shares of Common Stock beneficially owned by the Holder, its Affiliates and Attribution Parties shall include the number
of shares of Common Stock issuable upon exercise of this Warrant with respect to which such determination is being made, but shall exclude
the number of shares of Common Stock which would be issuable upon (i) exercise of the remaining, nonexercised portion of this Warrant
beneficially owned by the Holder or any of its Affiliates or Attribution Parties and (ii) exercise or conversion of the unexercised or
unconverted portion of any other securities of the Company (including, without limitation, any other Common Stock Equivalents) subject
to a limitation on conversion or exercise analogous to the limitation contained herein beneficially owned by the Holder or any of its
Affiliates or Attribution Parties. Except as set forth in the preceding sentence, for purposes of this Section 2(e), beneficial
ownership shall be calculated in accordance with Section 13(d) of the Exchange Act and the rules and regulations promulgated thereunder,
it being acknowledged by the Holder that the Company is not representing to the Holder that such calculation is in compliance with Section
13(d) of the Exchange Act and the Holder is solely responsible for any schedules required to be filed in accordance therewith. To the
extent that the limitation contained in this Section 2(e) applies, the determination of whether this Warrant is exercisable (in
relation to other securities owned by the Holder together with any Affiliates and Attribution Parties) and, of which portion of this Warrant
is exercisable up to the Beneficial Ownership Limitation shall be in the sole discretion of the Holder, and the submission of a Notice
of Exercise shall be deemed to be the Holder’s good faith determination of whether this Warrant is exercisable (in relation to other
securities owned by the Holder together with any Affiliates and Attribution Parties) and of which portion of this Warrant is exercisable,
in each case, subject to the Beneficial Ownership Limitation, and the Company shall have no obligation to verify or confirm the accuracy
of such determination and shall have no liability for exercises of this Warrant that are not in compliance with the Beneficial Ownership
Limitation. In addition, a determination as to any group status as contemplated above shall be determined in accordance with Section 13(d)
of the Exchange Act and the rules and regulations promulgated thereunder and the Company shall have no obligation to verify or confirm
the accuracy of such determination and shall have no liability for exercises of the Warrant that are not in compliance with the Beneficial
Ownership Limitation. For purposes of this Section 2(e), in determining the number of outstanding shares of Common Stock, a Holder
may rely on the number of outstanding shares of Common Stock as reflected in (A) the Company’s most recent periodic or annual report
filed with the Commission, as the case may be, (B) a more recent public announcement by the Company or (C) a more recent written notice
by the Company or the Transfer Agent setting forth the number of shares of Common Stock outstanding. Upon the written or oral request
of a Holder, the Company shall within two (2) Trading Days confirm in writing to the Holder the number of shares of Common Stock then
outstanding. In any case, the number of outstanding shares of Common Stock shall be determined after giving effect to the conversion or
exercise of securities of the Company, including this Warrant, by the Holder or its Affiliates or Attribution Parties since the date as
of which such number of outstanding shares of Common Stock was reported. By written notice to the Company, the Holder may from time to
time increase or decrease the Beneficial Ownership Limitation applicable to the Holder, provided, however, that any such increase in the
Beneficial Ownership Limitation will not be effective until the sixty-first (61st) day after such notice is delivered to the Company.
The provisions of this paragraph shall be construed and implemented in a manner otherwise than in strict conformity with the terms of
this Section 2(e) to correct this paragraph (or any portion hereof) which may be defective or inconsistent with the intended Beneficial
Ownership Limitation herein contained or to make changes or supplements necessary or desirable to properly give effect to such limitation.
The limitations contained in this paragraph shall apply to a successor holder of this Warrant.
4
Section 3. Certain
Adjustments.
(a) Stock Dividends and Splits. If the Company at any time while this Warrant is outstanding: (i) pays
a stock dividend or otherwise makes a distribution or distributions on shares of its Common Stock or any other equity or equity equivalent
securities payable in shares of Common Stock (which, for avoidance of doubt, shall not include any shares of Common Stock issued by the
Company upon exercise of this Warrant or any cash distributions), (ii) subdivides outstanding shares of Common Stock into a larger number
of shares, (iii) combines (including by way of a reverse stock split) outstanding shares of Common Stock into a smaller number of shares,
or (iv) issues by reclassification of shares of the Common Stock any shares of capital stock of the Company, then in each case the Exercise
Price shall be multiplied by a fraction of which the numerator shall be the number of shares of Common Stock (excluding treasury shares,
if any) outstanding immediately before such event and of which the denominator shall be the number of shares of Common Stock outstanding
immediately after such event, and the number of shares issuable upon exercise of this Warrant shall be proportionately adjusted such that
the aggregate Exercise Price of this Warrant shall remain unchanged. Any adjustment made pursuant to this Section 3(a) shall become
effective immediately after the record date for the determination of stockholders entitled to receive such dividend or distribution and
shall become effective immediately after the effective date in the case of a subdivision, combination or re-classification.
(b) VWAP Reset. If on the twenty-first trading day following the date that is six months after the
Closing Date, the VWAP (the “Measurement Price”) is less than the Exercise Price then in effect, then the Exercise
Price then in effect shall be reduced to an amount equal to the greater of (i) the Measurement Price and (ii) $5.00.
(c) Adjustment Upon Issuance of Common Stock. If and whenever on or after the Closing Date, the Company
issues or sells, or in accordance with this Section 3(c) is deemed to have issued or sold, any shares of Common Stock (including
the issuance or sale of shares of Common Stock owned or held by or for the account of the Company, but excluding shares
of Common Stock issued or sold, or deemed to have been issued or sold, by the Company in connection with any Exempt Issuance) for a consideration
per share (the “New Issuance Price”) less than the Exercise Price then in effect (and each such issue,
sale or deemed issuance or sale, a “Dilutive Issuance”), then immediately after such Dilutive Issuance, the Exercise
Price then in effect shall be reduced to an amount equal to the New Issuance Price.
For purposes of determining the adjusted
Exercise Price under this Section 3(c), the following shall be applicable:
(i) Options and Convertible Securities. The consideration per share received by the Company for Common
Stock deemed to have been issued pursuant to Section 3(c)(ii), relating to Options and Convertible Securities, shall be determined
by dividing:
(1) the total amount, if any, received or receivable by the Company as consideration for the issue of such
Options or Convertible Securities, plus the minimum aggregate amount of additional consideration (as set forth in the instruments relating
thereto, without regard to any provision contained therein for a subsequent adjustment of such consideration) payable to the Company upon
the exercise of such Options or the conversion or exchange of such Convertible Securities, or in the case of Options for Convertible Securities,
the exercise of such Options for Convertible Securities and the conversion or exchange of such Convertible Securities, by
(2) the maximum number of shares of Common Stock (as set forth in the instruments relating thereto, without
regard to any provision contained therein for a subsequent adjustment of such number) deemed to be issued pursuant to Section 3(c)(ii)
upon the issuance of such Options or Convertible Securities.
(ii) Deemed Issuance of Options and Convertible Securities.
(1) If the Company at any time or from time to time shall issue any Options or Convertible Securities or shall
fix a record date for the determination of holders of any class of securities entitled to receive any such Options or Convertible Securities,
then the maximum number of shares of Common Stock (as set forth in the instrument relating thereto, assuming the satisfaction of any conditions
to exercisability, convertibility or exchangeability but without regard to any provision contained therein for a subsequent adjustment
of such number) issuable upon the exercise of such Options or, in the case of Convertible Securities and Options therefor, the conversion
or exchange of such Convertible Securities, shall be deemed to be outstanding and to have been issued as of the time of such issue or,
in case such a record date shall have been fixed, as of the close of business on such record date.
5
(2) If the purchase price provided for in any Options, the additional consideration, if any, payable upon
the issue, conversion, exercise or exchange of any Convertible Securities, or the rate at which any Convertible Securities are convertible
into or exercisable or exchangeable for Common Stock increases or decreases at any time, (other than (x) proportional changes in conversion
or exercise prices, as applicable, in connection with an event referred to in Section 3(a) above and (y) automatic adjustments
to such terms pursuant to anti-dilution or similar provisions of such Option or Convertible Security which are not more favorable to the
holder thereof than the anti-dilution and similar provisions set forth herein), the Exercise Price in effect at the time of such increase
or decrease shall be adjusted to the Exercise Price, which would have been in effect at such time had such Options or Convertible Securities
provided for such increased or decreased purchase price, additional consideration or increased or decreased conversion rate, as the case
may be, at the time initially granted, issued or sold. For purposes of this Section 3(c)(ii)(2), if the terms of any Option or
Convertible Security that was outstanding as of the Initial Exercise Date are increased or decreased in the manner described in the immediately
preceding sentence, then such Option or Convertible Security and the shares of Common Stock deemed issuable upon exercise, conversion
or exchange thereof shall be deemed to have been issued as of the date of such increase or decrease. No adjustment pursuant to this Section
3(c)(ii)(2) shall be made if such adjustment would result in an increase of the Exercise Price then in effect.
(iii) Calculation of Consideration Received.
(1) In case one or more Option is issued in connection with the issue or sale of other securities of the Company,
together comprising one integrated transaction, (x) each such Option will be deemed to have been issued for the Option Value of such Option
and (y) the other securities issued or sold in such integrated transaction shall be deemed to have been issued or sold for the difference
of (I) the aggregate consideration received by the Company less any consideration paid or payable by the Company pursuant to the terms
of such other securities of the Company, less (II) the Option Value of each such Option; provided, that, no share of Common
Stock shall be deemed to have been issued for less than a fraction of the aggregate consideration received (excluding the minimum aggregate
amount of additional consideration (as set forth in the instruments relating thereto, without regard to any provision contained therein
for a subsequent adjustment of such consideration) payable to the Company upon the exercise of any such Options, or in the case of Options
for Convertible Securities, the exercise of such Options for Convertible Securities and the conversion or exchange of such Convertible
Securities) equal to (A) one divided by (B) the total number of shares of Common Stock issued or issuable in the integrated transaction
(including the number of shares underlying any Options and Convertible Securities).
(2) If any shares of Common Stock, Options or Convertible Securities are issued or sold for a consideration
other than cash, the amount of such consideration received by the Company will be the fair value of such consideration, except where such
consideration consists of publicly traded securities, in which case the amount of consideration received by the Company will be the VWAP
of such publicly traded securities on the date of receipt (substituting the references to “Common Stock” in the definition
of VWAP with such publicly traded security). If any shares of Common Stock, Options or Convertible Securities are issued to the owners
of the non-surviving entity in connection with any merger in which the Company is the surviving entity, the amount of consideration therefor
will be deemed to be the fair value of such portion of the net assets and business of the non-surviving entity as is attributable to such
shares of Common Stock, Options or Convertible Securities, as the case may be. The fair value of any consideration other than cash or
publicly traded securities will be determined jointly by the Company and the Required Holders. If such parties are unable to reach agreement
within ten (10) days after the occurrence of an event requiring valuation (the “Valuation Event”), the fair value of
such consideration will be determined within five (5) Business Days after the tenth (10th) day following the Valuation Event by an independent,
reputable appraiser jointly selected by the Company and the Required Holders. The determination of such appraiser shall be final and binding
upon all parties absent manifest error and the fees and expenses of such appraiser shall be borne by the Company.
(iv) Record Date. If the Company takes a record of the holders of shares of Common Stock for the purpose
of entitling them (A) to receive a dividend or other distribution payable in shares of Common Stock, Options or in Convertible Securities
or (B) to subscribe for or purchase shares of Common Stock, Options or Convertible Securities, then such record date will be deemed to
be the date of the issuance or sale of the shares of Common Stock deemed to have been issued or sold upon the declaration of such dividend
or the making of such other distribution or the date of the granting of such right of subscription or purchase, as the case may be.
6
(d) Subsequent Rights Offerings. In addition to any adjustments pursuant to Section 3(a) above,
if at any time after the Initial Exercise Date the Company grants, issues or sells any Common Stock Equivalents or rights to purchase
stock, warrants, securities or other property pro rata to all or substantially all of the record holders of any class of shares of Common
Stock (the “Purchase Rights”), then the Holder will be entitled to acquire, upon the terms applicable to such Purchase
Rights, the aggregate Purchase Rights which the Holder could have acquired if the Holder had held the number of shares of Common Stock
acquirable upon complete exercise of this Warrant (without regard to any limitations on exercise hereof, including without limitation,
any applicable Beneficial Ownership Limitation) immediately before the date on which a record is taken for the grant, issuance or sale
of such Purchase Rights, or, if no such record is taken, the date as of which the record holders of shares of Common Stock are to be determined
for the grant, issue or sale of such Purchase Rights (provided, however, that, to the extent that the Holder’s
right to participate in any such Purchase Right would result in the Holder exceeding any applicable Beneficial Ownership Limitation, then
the Holder shall not be entitled to participate in such Purchase Right to such extent (or beneficial ownership of such shares of Common
Stock as a result of such Purchase Right to such extent) and such Purchase Right to such extent shall be held in abeyance for the Holder
until such time, if ever, as its right thereto would not result in the Holder exceeding any applicable Beneficial Ownership Limitation).
To the extent that the issue price of such Purchase Rights would result in an adjustment of the Exercise Price pursuant to Section
3(c), such adjustment shall not occur to the extent the Holders were granted the right to acquire such Purchase Rights on the applicable
terms.
(e) Pro Rata Distributions. If the Company shall declare or make any dividend or other distribution
of its assets (or rights to acquire its assets) to holders of shares of Common Stock, by way of return of capital or otherwise (including,
without limitation, any distribution of cash, stock or other securities, property or options by way of a dividend, spin off, reclassification,
corporate rearrangement, scheme of arrangement or other similar transaction) (a “Distribution”), at any time after
the issuance of this Warrant, then, in each such case, the Holder shall be entitled to participate in such Distribution to the same extent
that the Holder would have participated therein if the Holder had held the number of shares of Common Stock acquirable upon complete exercise
of this Warrant (without regard to any limitations on exercise hereof, including without limitation, any applicable Beneficial Ownership
Limitation) immediately before the date of which a record is taken for such Distribution, or, if no such record is taken, the date as
of which the record holders of shares of Common Stock are to be determined for the participation in such Distribution (provided,
however, that, to the extent that the Holder’s right to participate in any such Distribution would result in the Holder
exceeding any applicable Beneficial Ownership Limitation, then the Holder shall not be entitled to participate in such Distribution to
such extent (or in the beneficial ownership of any shares of Common Stock as a result of such Distribution to such extent) and the portion
of such Distribution shall be held in abeyance for the benefit of the Holder until such time, if ever, as its right thereto would not
result in the Holder exceeding any applicable Beneficial Ownership Limitation).
(f) Fundamental Transaction.
(i) If, at any time while this Warrant is outstanding, (i) the Company, directly or indirectly, in one or
more related transactions effects any merger or consolidation of the Company with or into another Person (other than the Business Combination),
(ii) the Company (and all of its subsidiaries, taken as a whole), directly or indirectly, effects any sale, lease, license, assignment,
transfer, conveyance or other disposition of all or substantially all of its assets in one or a series of related transactions, (iii)
any, direct or indirect, purchase offer, tender offer or exchange offer (whether by the Company or another Person) is completed pursuant
to which holders of Common Stock are permitted to sell, tender or exchange their shares for other securities, cash or property and has
been accepted by the holders of 50% or more of the outstanding Common Stock, (iv) the Company, directly or indirectly, in one or more
related transactions effects any reclassification, reorganization or recapitalization of the Common Stock or any compulsory share exchange
pursuant to which the Common Stock is effectively converted into or exchanged for other securities, cash or property (other than as a
result of a stock split, combination or reclassification of shares of Common Stock covered by Section 3(a)), or (v) the Company,
directly or indirectly, in one or more related transactions consummates a stock or share purchase agreement or other business combination
(including, without limitation, a reorganization, recapitalization, spin-off, merger or scheme of arrangement) with another Person or
group of Persons whereby such other Person or group acquires 50% or more of the outstanding shares of Common Stock (not including any
shares of Common Stock held by the other Person or other Persons making or party to, or associated or affiliated with the other Persons
making or party to, such stock or share purchase agreement or other business combination) or 50% or more of the voting power of the common
equity of the Company, other than the Business Combination (each a “Fundamental Transaction”), then, upon any subsequent
exercise of this Warrant, the Holder shall have the right to receive, for each Warrant Share that would have been issuable upon such exercise
immediately prior to the occurrence of such Fundamental Transaction, at the option of the Holder (without regard to any limitation in
Section 2(e) on the exercise of this Warrant), the number of shares of Common Stock of the successor or acquiring corporation or
of the Company, if it is the surviving corporation, and any additional consideration (the “Alternate Consideration”)
receivable as a result of such Fundamental Transaction by a holder of the number of shares of Common Stock for which this Warrant is exercisable
immediately prior to such Fundamental Transaction (without regard to any limitation in Section 2(e) on the exercise of this Warrant).
7
(ii) For purposes of any such exercise, the determination of the Exercise Price shall be appropriately adjusted
to apply to such Alternate Consideration based on the amount of Alternate Consideration issuable in respect of one share of Common Stock
in such Fundamental Transaction, and the Company shall apportion the Exercise Price among the Alternate Consideration in a reasonable
manner reflecting the relative value of any different components of the Alternate Consideration. If holders of Common Stock are given
any choice as to the securities, cash or property to be received in a Fundamental Transaction, then the Holder shall be given the same
choice as to the Alternate Consideration it receives upon any exercise of this Warrant following such Fundamental Transaction. Notwithstanding
anything to the contrary, in the event of a Fundamental Transaction, the Company or any Successor Entity (as defined below) shall, at
the Holder’s option, exercisable at any time concurrently with, or within 30 days after, the consummation of the Fundamental Transaction
(or, if later, the date of the public announcement of the applicable Fundamental Transaction), purchase this Warrant from the Holder by
paying to the Holder an amount of cash equal to the Black Scholes Value of the remaining unexercised portion of this Warrant on the date
of the consummation of such Fundamental Transaction; provided, that if holders of Common Stock of the Company are not offered
or paid any consideration in such Fundamental Transaction, such holders of Common Stock will be deemed to have received common stock or
ordinary shares of the Successor Entity (which Successor Entity may be the Company following such Fundamental Transaction) in such Fundamental
Transaction. The payment of the Black Scholes Value will be made by wire transfer of immediately available funds (or such other consideration)
within the later of (i) five Business Days of the Holder’s election and (ii) the date of consummation of the Fundamental Transaction.
(iii) The Company shall cause any successor entity in a Fundamental Transaction in which the Company is not
the survivor (the “Successor Entity”) to assume in writing all of the obligations of the Company under this Warrant
and the other Transaction Documents in accordance with the provisions of this Section 3(f) pursuant to written agreements in form
and substance reasonably satisfactory to the Holder and approved by the Holder (without unreasonable delay) prior to such Fundamental
Transaction and shall, at the option of the Holder, deliver to the Holder in exchange for this Warrant a security of the Successor Entity
evidenced by a written instrument substantially similar in form and substance to this Warrant which is exercisable for a corresponding
number of shares of capital stock of such Successor Entity (or its parent entity) equivalent to the shares of Common Stock acquirable
and receivable upon exercise of this Warrant (without regard to any limitations on the exercise of this Warrant) prior to such Fundamental
Transaction, and with an exercise price which applies the Exercise Price hereunder to such shares of capital stock (but taking into account
the relative value of the shares of Common Stock pursuant to such Fundamental Transaction and the value of such shares of capital stock,
such number of shares of capital stock and such exercise price being for the purpose of protecting the economic value of this Warrant
immediately prior to the consummation of such Fundamental Transaction), and which is reasonably satisfactory in form and substance to
the Holder.
8
(g) Calculations. All calculations under this Section 3 shall be made to the nearest cent or
the nearest 1/100th of a share, as the case may be. For purposes of this Section 3, the number of shares of Common Stock deemed
to be issued and outstanding as of a given date shall be the sum of the number of shares of Common Stock (excluding treasury shares, if
any) issued and outstanding.
(h) Number of Warrant Shares. Simultaneously with any adjustment to the Exercise Price pursuant to
this Section 3, the number of Warrant Shares that may be purchased upon exercise of this Warrant shall be increased or decreased
proportionately so that after such adjustment the aggregate Exercise Price payable hereunder for the adjusted number of Warrant Shares
shall be the same as the aggregate Exercise Price in effect immediately prior to such adjustment (without regard to any limitations on
exercise contained herein).
(i) Notice to Holder.
(i) Adjustment to Exercise Price. Whenever the Exercise Price is adjusted pursuant to any provision
of this Section 3, the Company shall promptly deliver to the Holder by email a notice setting forth the Exercise Price after such
adjustment and any resulting adjustment to the number of Warrant Shares and setting forth a brief statement of the facts requiring such
adjustment.
(ii) Notice to Allow Exercise by Holder. If (A) the Company shall declare a dividend (or any other distribution
in whatever form) on the Common Stock, (B) the Company shall declare a redemption of the Common Stock, (C) the Company shall authorize
the granting to all holders of the Common Stock rights or warrants to subscribe for or purchase any shares of capital stock of any class
or of any rights, (D) the approval of any stockholders of the Company shall be required in connection with any reclassification of the
Common Stock, any consolidation or merger to which the Company (or any of its subsidiaries) is a party, any sale or transfer of all or
substantially all of its assets, or any compulsory share exchange whereby the Common Stock is converted into other securities, cash or
property, or (E) the Company shall authorize the voluntary or involuntary dissolution, liquidation or winding up of the affairs of the
Company, then, in each case, the Company shall cause to be delivered by facsimile or email to the Holder at its last facsimile number
or email address as it shall appear upon the Warrant Register of the Company, at least 20 calendar days prior to the applicable record
or effective date hereinafter specified, a notice stating (x) the date on which a record is to be taken for the purpose of such dividend,
distribution, redemption, rights or warrants, or if a record is not to be taken, the date as of which the holders of the Common Stock
of record to be entitled to such dividend, distributions, redemption, rights or warrants are to be determined or (y) the date on which
such reclassification, consolidation, merger, sale, transfer or share exchange is expected to become effective or close, and the date
as of which it is expected that holders of the Common Stock of record shall be entitled to exchange their shares of the Common Stock for
securities, cash or other property deliverable upon such reclassification, consolidation, merger, sale, transfer or share exchange; provided,
that, notwithstanding the foregoing, any notice delivery requirement hereunder shall also be deemed satisfied by filing or furnishing
such communication with the Commission via the EDGAR system; provided, further, that the failure to deliver such notice or any
defect therein or in the delivery thereof shall not affect the validity of the corporate action required to be specified in such notice.
To the extent that any notice provided to the Holder in accordance with the terms of this Warrant constitutes, or contains, material,
non-public information regarding the Company or any of the subsidiaries, the Company shall simultaneously file such notice with the Commission
pursuant to a Current Report on Form 8-K, unless determined by the Company that such filing would be harmful to the Company at such time,
in which case the Company shall file such 8-K as soon as is reasonably practicable in its discretion. The Holder shall remain entitled
to exercise this Warrant during the period commencing on the date of such notice to the effective date of the event triggering such notice
except as may otherwise be expressly set forth herein.
(j) Voluntary Adjustment By Company. Subject to the rules and regulations of the Trading Market, the
Company may at any time during the term of this Warrant, subject to the prior written consent of the Holder, reduce the then current Exercise
Price to any amount and for any period of time deemed appropriate by the board of directors of the Company.
9
Section 4. Transfer
of Warrant.
(a) Transferability. Subject to compliance with any applicable securities laws and the conditions set
forth in Section 4(d) hereof, this Warrant and all rights hereunder (including, without limitation, any registration rights) are
transferable, in whole or in part, upon surrender of this Warrant at the principal office of the Company or its designated agent, together
with a written assignment of this Warrant substantially in the form attached hereto duly executed by the Holder or its agent or attorney
and funds sufficient to pay any transfer taxes payable upon the making of such transfer. Upon such surrender and, if required, such payment,
the Company shall execute and deliver a new Warrant or Warrants in the name of the assignee or assignees, as applicable, and in the denomination
or denominations specified in such instrument of assignment, and shall issue to the assignor a new Warrant evidencing the portion of this
Warrant not so assigned, and this Warrant shall promptly be cancelled. Notwithstanding anything herein to the contrary, the Holder shall
not be required to physically surrender this Warrant to the Company unless the Holder has assigned this Warrant in full, in which case,
the Holder shall surrender this Warrant to the Company within three (3) Trading Days of the date on which the Holder delivers an assignment
form to the Company assigning this Warrant in full. The Warrant, if properly assigned in accordance herewith, may be exercised by a new
holder for the purchase of Warrant Shares without having a new Warrant issued.
(b) New Warrants. This Warrant may be divided or combined with other Warrants upon presentation hereof
at the aforesaid office of the Company, together with a written notice specifying the names and denominations in which new Warrants are
to be issued, signed by the Holder or its agent or attorney. Subject to compliance with Section 4(a), as to any transfer which
may be involved in such division or combination, the Company shall execute and deliver a new Warrant or Warrants in exchange for the Warrant
or Warrants to be divided or combined in accordance with such notice. All Warrants issued on transfers or exchanges shall be dated the
Initial Exercise Date and shall be identical with this Warrant except as to the number of Warrant Shares issuable pursuant thereto, and
if applicable, shall reflect any adjustment to the Exercise Price prior to the date of such transfer or exchange.
(c) Warrant Register. The Company shall register this Warrant, upon records to be maintained by the
Company for that purpose (the “Warrant Register”), in the name of the record Holder hereof from time to time. The Company
may deem and treat the registered Holder of this Warrant as the absolute owner hereof for the purpose of any exercise hereof or any distribution
to the Holder, and for all other purposes, absent actual notice to the contrary.
(d) Transfer Restrictions. This Warrant and the Warrant Shares may only be disposed of in compliance
with state and federal securities laws. In connection with any transfer of this Warrant or the Warrant Shares other than pursuant to an
effective registration statement or Rule 144, to the Company or to an Affiliate of the Holder or in connection with a pledge in connection
with a bona fide margin account with a registered broker-dealer or other loan with a financial institution that is an “accredited
investor” as defined in Rule 501(a) under the Securities Act or other loan secured by this Warrant or the Warrant Shares, the Company
may require the transferor to provide to the Company an opinion of counsel selected by the transferor and reasonably acceptable to the
Company, the form and substance of which opinion shall be reasonably satisfactory to the Company, to the effect that such transfer does
not require registration of this Warrant or the Warrant Shares under the Securities Act.
(e) Representation by the Holder. The Holder, by the acceptance hereof, represents and warrants that
it is acquiring this Warrant and, upon any exercise hereof, will acquire the Warrant Shares issuable upon such exercise, for its own account
and not with a view to or for distributing or reselling such Warrant Shares or any part thereof in violation of the Securities Act or
any applicable state securities law, except pursuant to sales registered or exempted under the Securities Act.
Section 5. Miscellaneous.
(a) No Rights as Stockholder Until Exercise. This Warrant does not entitle the Holder to any voting
rights, dividends or other rights as a stockholder of the Company prior to the exercise hereof as set forth in Section 2(d)(i),
except as expressly set forth in Section 3.
10
(b) Loss, Theft, Destruction or Mutilation of Warrant. The Company covenants that upon receipt by the
Company of evidence reasonably satisfactory to it of the loss, theft, destruction or mutilation of this Warrant or any stock certificate
relating to the Warrant Shares, and in case of loss, theft or destruction, of indemnity or security reasonably satisfactory to it (which,
in the case of the Warrant, shall not include the posting of any bond), and upon surrender and cancellation of such Warrant or stock certificate,
if mutilated, the Company will make and deliver a new Warrant or stock certificate of like tenor and dated as of such cancellation, in
lieu of such Warrant or stock certificate.
(c) Saturdays, Sundays, Holidays, etc. If the last or appointed day for the taking of any action or
the expiration of any right required or granted herein shall not be a Business Day, then, such action may be taken or such right may be
exercised on the next succeeding Business Day.
(d) Authorized Shares.
(i) The Company covenants that, during the period the Warrant is outstanding, it will reserve from its authorized
and unissued Common Stock a sufficient number of shares to provide for the issuance of the Warrant Shares upon the exercise of any purchase
rights under this Warrant (without regard to any limitation on exercise set forth herein and assuming an Exercise Price equal to the lower
of (i) $5.00 and (ii) the Exercise Price then in effect). The Company further covenants that its issuance of this Warrant shall constitute
full authority to its officers who are charged with the duty of issuing the necessary Warrant Shares upon the exercise of the purchase
rights under this Warrant. The Company will take all such reasonable action as may be necessary to assure that such Warrant Shares may
be issued as provided herein without violation of any applicable law or regulation, or of any requirements of the Trading Market upon
which the Common Stock may be listed. The Company covenants that all Warrant Shares which may be issued upon the exercise of the purchase
rights represented by this Warrant will, upon exercise of the purchase rights represented by this Warrant and payment for such Warrant
Shares in accordance herewith, be duly authorized, validly issued, fully paid and nonassessable and free from all taxes, liens and charges
created by the Company in respect of the issue thereof (other than taxes in respect of any transfer occurring contemporaneously with such
issue).
(ii) Except and to the extent as waived or consented to by the Holder, the Company shall not by any action,
including, without limitation, amending its Certificate of Incorporation (or any Certificate of Designation thereto) or through any reorganization,
transfer of assets, consolidation, merger, dissolution, issue or sale of securities or any other voluntary action, avoid or seek to avoid
the observance or performance of any of the terms of this Warrant, but will at all times in good faith assist in the carrying out of all
such terms and in the taking of all such actions as may be necessary or appropriate to protect the rights of Holder as set forth in this
Warrant against impairment. Without limiting the generality of the foregoing, the Company will (i) not increase the par value of any Warrant
Shares above the amount payable therefor upon such exercise immediately prior to such increase in par value, (ii) take all such action
as may be necessary or appropriate in order that the Company may validly and legally issue fully paid and nonassessable Warrant Shares
upon the exercise of this Warrant and (iii) use commercially reasonable efforts to obtain all such authorizations, exemptions or consents
from any public regulatory body having jurisdiction thereof, as may be, necessary to enable the Company to perform its obligations under
this Warrant.
(iii) Before taking any action which would result in an adjustment in the number of Warrant Shares for which
this Warrant is exercisable or in the Exercise Price, the Company shall obtain all such authorizations or exemptions thereof, or consents
thereto, as may be necessary from any public regulatory body or bodies having jurisdiction thereof.
11
(e) Jurisdiction. All questions concerning the construction, validity, enforcement and interpretation
of this Warrant shall be governed by and construed and enforced in accordance with the internal laws of the State of Delaware, without
regard to the principles of conflicts of law thereof. Each party agrees that all legal Proceedings concerning the interpretations, enforcement
and defense of the transactions contemplated by this Warrant (whether brought against a party hereto or its respective Affiliates, directors,
officers, shareholders, partners, members, employees or agents) shall be commenced exclusively in the state and federal courts sitting
in the State of Delaware. Each party hereby irrevocably submits to the exclusive jurisdiction of the state and federal courts sitting
in the State of Delaware for the adjudication of any dispute hereunder or in connection herewith or with any transaction contemplated
hereby or discussed herein (including with respect to the enforcement of this Warrant), and hereby irrevocably waives, and agrees not
to assert in any Action or Proceeding, any claim that it is not personally subject to the jurisdiction of any such court, that such Action
or Proceeding is improper or is an inconvenient venue for such Proceeding. Each party hereby irrevocably waives personal service of process
and consents to process being served in any such Action or Proceeding by mailing a copy thereof via registered or certified mail or overnight
delivery (with evidence of delivery) to such party at the address in effect for notices to it under this Warrant and agrees that such
service shall constitute good and sufficient service of process and notice thereof. Nothing contained herein shall be deemed to limit
in any way any right to serve process in any other manner permitted by law. If any party shall commence an Action or Proceeding to enforce
any provisions of this Warrant, then, the prevailing party in such Action or Proceeding shall be reimbursed by the non-prevailing party
for its reasonable attorneys’ fees and other costs and expenses incurred with the investigation, preparation and prosecution of
such Action or Proceeding.
(f) Restrictions. The Holder acknowledges that the Warrant Shares acquired upon the exercise of this
Warrant, if not registered, and the Holder does not utilize cashless exercise, will have restrictions upon resale imposed by state and
federal securities laws.
(g) Nonwaiver and Expenses. No course of dealing or any delay or failure to exercise any right hereunder
on the part of Holder shall operate as a waiver of such right or otherwise prejudice the Holder’s rights, powers or remedies. Without
limiting any other provision of this Warrant, if the Company willfully and knowingly fails to comply with any provision of this Warrant,
which results in any material damages to the Holder, the Company shall pay to the Holder such amounts as shall be sufficient to cover
any costs and expenses including, but not limited to, reasonable attorneys’ fees, including those of appellate proceedings, incurred
by the Holder in collecting any amounts due pursuant hereto or in otherwise enforcing any of its rights, powers or remedies hereunder.
(h) Notices. Any and all notices or other communications or deliveries required or permitted to be
provided hereunder shall be in writing and shall be deemed given and effective on the earliest of: (a) the time of transmission, if such
notice or communication is delivered via email at the e-mail address as set forth on the signature pages attached hereto, or to such other
address as the Company or the Holder may indicate by a notice delivered to the other from time to time, at or prior to 5:30 p.m. (New
York City time) on a Trading Day, (b) the next Trading Day after the time of transmission, if such notice or communication is delivered
via email attachment at the e-mail address as set forth on the signature pages attached hereto on a day that is not a Trading Day or later
than 5:30 p.m. (New York City time) on any Trading Day, (c) the second (2nd) Trading Day following the date of mailing, if sent by U.S.
nationally recognized overnight courier service or (d) upon actual receipt by the party to whom such notice is required to be given. The
address for such notices and communications shall be as set forth on the signature pages attached hereto, or to such other address as
the Company or the Holder may indicate by a notice delivered to the other from time to time.
(i) Limitation of Liability. No provision hereof, in the absence of any affirmative action by the Holder
to exercise this Warrant to purchase Warrant Shares, and no enumeration herein of the rights or privileges of the Holder, shall give rise
to any liability of the Holder for the purchase price of any Common Stock or as a stockholder of the Company, whether such liability is
asserted by the Company or by creditors of the Company.
(j) Remedies. The Holder, in addition to being entitled to exercise all rights granted by law, including
recovery of damages, will be entitled to specific performance of its rights under this Warrant. The Company agrees that monetary damages
would not be adequate compensation for any loss incurred by reason of a breach by it of the provisions of this Warrant and hereby agrees
to waive and not to assert the defense in any action for specific performance that a remedy at law would be adequate.
(k) Successors and Assigns. Subject to applicable securities laws, this Warrant and the rights and
obligations evidenced hereby shall inure to the benefit of and be binding upon the successors and permitted assigns of the Company and
the successors and permitted assigns of Holder. The provisions of this Warrant are intended to be for the benefit of any Holder from time
to time of this Warrant and shall be enforceable by the Holder or holder of Warrant Shares.
12
(l) Amendment. The Related Warrants, including this Warrant, may be amended with the written consent
of the Required Holders, provided, however, and notwithstanding anything in this Warrant or the Related Warrants to the contrary, no provision
of the Related Warrants, including this Warrant, shall be amended to the extent any such amendment would (i) disproportionately, materially
and adversely modify any rights of any holder of Related Warrants (as compared to the rights of the other holders of Related Warrants),
(ii) impose any additional financial obligations or liabilities on a holder of Related Warrants or (iii) amend the provisions of Section
2, Section 3, Section 4, or this Section 5(l), unless such amendment applies to all holders of Related Warrants in the
same fashion, in each case, unless any such holder of a Related Warrant shall have previously consented in writing to such amendment or
voted to approve such amendment at a meeting. No consideration shall be offered or paid to any holder of Related Warrants to amend or
consent to a waiver or modification of any provision of the Related Warrants unless the same consideration is also offered to all of the
holders of Related Warrants. For clarification purposes, this provision constitutes a separate right granted to each holder of Related
Warrants by the Company and negotiated separately by each holder of Related Warrants, and is intended for the Company to treat the holders
of Related Warrants as a group and shall not in any way be construed as the holders of Related Warrants acting in concert or as a group
with respect to the purchase, disposition or voting of securities or otherwise.
(m) Severability. Wherever possible, each provision of this Warrant shall be interpreted in such manner
as to be effective and valid under applicable law, but if any provision of this Warrant shall be prohibited by or invalid under applicable
law, such provision shall be ineffective to the extent of such prohibition or invalidity, without invalidating the remainder of such provisions
or the remaining provisions of this Warrant.
(n) Headings. The headings used in this Warrant are for the convenience of reference only and shall
not, for any purpose, be deemed a part of this Warrant.
********************
(Signature Page Follows)
13
IN WITNESS WHEREOF, the parties hereto have caused
this Common Stock Purchase Warrant to be duly executed by their respective authorized signatories as of the date first indicated above.
[Elroy Air, Inc.]
Address for Notice:
By:
Name:
Title:
Email:
With a copy to (which shall not constitute notice):
14
IN WITNESS WHEREOF, the undersigned have caused
this Common Stock Purchase Warrant to be duly executed by their respective authorized signatories as of the date first indicated above.
Name of Purchaser:
Signature of Authorized Signatory of Purchaser:
Name of Authorized Signatory:
Title of Authorized Signatory:
Email Address of Authorized Signatory:
Address for Notice to Purchaser:
Address for Delivery of Securities to Purchaser (if not same as address
for notice):
Warrant Shares:
EIN Number:
15
SCHEDULE A
“Action” means any action,
suit, inquiry, notice of violation, proceeding or investigation pending or, to the knowledge of the applicable party, threatened against
or affecting the applicable party or any of its properties before or by any court, arbitrator, governmental or administrative agency or
regulatory authority (federal, state, county, local or foreign).
“Affiliate” means any Person
that, directly or indirectly through one or more intermediaries, controls or is controlled by or is under common control with a Person,
as such terms are used in and construed under Rule 405 under the Securities Act.
“Black Scholes Value”
means the value of this Warrant based on the Black-Scholes Option Pricing Model obtained from the “OV” function on Bloomberg
determined as of the day of consummation of the applicable Fundamental Transaction for pricing purposes and reflecting (A) a risk-free
interest rate corresponding to the U.S. Treasury rate for a period equal to the time between the date of the public announcement of the
applicable contemplated Fundamental Transaction and the Termination Date, (B) an expected volatility equal to the greater
of 100% and the 100 day volatility obtained from the HVT function on Bloomberg (determined utilizing a 365 day annualization factor) as
of the Trading Day immediately following the public announcement of the applicable contemplated Fundamental Transaction, (C) the underlying
price per share used in such calculation shall be the greater of (i) the sum of the price per share being offered in cash,
if any, plus the value of any non-cash consideration, if any, being offered in such Fundamental Transaction and (ii) the highest VWAP
during the period beginning on the Trading Day immediately preceding the announcement of the applicable Fundamental Transaction (or the
consummation of the applicable Fundamental Transaction, if earlier) and ending on the Trading Day of the Holder’s request pursuant
to this Section 3(f), (D) a remaining option time equal to the time between the date of the public announcement of the applicable
Fundamental Transaction and the Termination Date and (E) a zero cost of borrow.
“Bloomberg”
means Bloomberg L.P.
“Business Combination”
means the transactions contemplated by the Business Combination Agreement.
“Business Combination
Agreement” means that certain Business Combination Agreement, dated as of [●], 2026, by and among the Company (or its predecessor),
Elroy Air, Inc. and IPGX Merger Sub, Inc. as it may be further amended, modified or supplemented from time to time.
“Business Day” means any day
other than Saturday, Sunday or other day on which commercial banks in The City of New York are authorized or required by law to remain
closed; provided, however, for clarification, commercial banks shall not be deemed to be authorized or required
by law to remain closed due to “stay at home,” “shelter-in-place,” “non-essential employee” or any
other similar orders or restrictions or the closure of any physical branch locations at the direction of any governmental authority so
long as the electronic funds transfer systems (including for wire transfers) of commercial banks in The City of New York are generally
open for use by customers on such day.
“Closing Date” means the Trading
Day on which the Business Combination is consummated.
“Common Stock” means the common
stock, par value [$0.0001] per share, of the Company and stock of any other class of securities into which such securities may hereafter
be reclassified or changed.
“Common Stock Equivalents”
means any securities of the Company which would entitle the holder thereof to acquire at any time Common Stock, including, without limitation,
any debt, preferred stock, right, option, warrant or other instrument that is at any time convertible into or exercisable or exchangeable
for, or otherwise entitles the holder thereof to receive, Common Stock, and any securities of the Company that when paired with one or
more other securities of the Company or another entity entitles the holder thereof to receive, Common Stock.
“Convertible Securities” means
any stock or securities (other than Options) directly or indirectly convertible into or exercisable or exchangeable for, or which otherwise
entitles the holder thereof to acquire, any shares of Common Stock and any securities of the Company that when paired with one or more
other securities of the Company or another entity entitles the holder thereof to receive, Common Stock.
16
“Exempt Issuance” means the
issuance of (a) any securities of the Company to employees, officers or directors, consultants, contractors, vendors or other agents of
the Company pursuant to any stock or option plan duly adopted for such purpose, by a majority of the non-employee members of the Board
of Directors or a majority of the members of a committee of non-employee directors established for such purpose for services rendered
to the Company, (b) securities upon the exercise or exchange of or conversion of any securities issued pursuant to the Purchase Agreement,
the Business Combination Agreement and/or other securities exercisable or exchangeable for or convertible into shares of Common Stock
issued and outstanding on the Closing Date, provided that such securities have not been amended since the Closing Date to increase the
number of such securities or to decrease the exercise price, exchange price or conversion price of such securities (other than in connection
with stock splits or combinations and automatic adjustments to such terms pursuant to anti-dilution or similar provisions of such securities
which are not more favorable to the holder thereof than the anti-dilution and similar provisions set forth herein) or to extend the term
of such securities, (c) the Underlying Shares, (d) securities issued pursuant to any merger, acquisition or strategic transaction or partnership
approved by a majority of the directors of the Company, provided that (i) such securities are issued as “restricted securities”
(as defined in Rule 144) or are issued pursuant to an effective registration statement pursuant to the Securities Act and (ii) any such
issuance shall only be to a Person (or to the equityholders of a Person) which is, itself or through its subsidiaries, an operating company
or an owner of an asset in a business synergistic with the business of the Company and shall provide to the Company additional benefits
in addition to the investment of funds and (e) any securities issued by the Company pursuant to any legal settlement or similar arrangement
agreed or entered into by the Company, provided that, in the aggregate, not more than [●]3
shares of Common Stock are issued or deemed issued or issuable upon conversion, settlement, exercise or exchange of any such securities
that are Options or Convertible Securities, but any such Exempt Issuance shall not include a transaction in which the Company is issuing
securities (i) primarily for the purpose of raising capital, including an at-the-market offering, or (ii) to an entity whose primary business
is investing in securities.
“Inflection Point” means Inflection
Point Asset Management LLC and/or one or more of its Affiliates.
“Options” means any rights,
warrants or options to subscribe for or purchase shares of Common Stock or Convertible Securities.
“Option Value” means the value
of an Option based on the Black-Scholes Option Pricing model obtained from the “OV” function on Bloomberg determined as of
(A) the Trading Day prior to the public announcement of the issuance of the applicable Option, if the issuance of such Option is publicly
announced or (B) the Trading Day immediately following the issuance of the applicable Option if the issuance of such Option is not publicly
announced, for pricing purposes and reflecting (i) a risk-free interest rate corresponding to the U.S. Treasury rate for a period equal
to the remaining term of the applicable Option as of the applicable date of determination, (ii) an expected volatility equal to the greater
of 100% and the 100 day volatility obtained from the HVT function on Bloomberg as of (A) the Trading Day immediately following the public
announcement of the applicable Option if the issuance of such Option is publicly announced or (B) the Trading Day immediately following
the issuance of the applicable Option if the issuance of such Option is not publicly announced, (iii) the underlying price per share used
in such calculation shall be the highest weighted average price of the Common Stock during the period beginning on the Trading Day prior
to the execution of definitive documentation relating to the issuance of the applicable Option and ending on (A) the Trading Day immediately
following the public announcement of such issuance, if the issuance of such Option is publicly announced or (B) the Trading Day immediately
following the issuance of the applicable Option if the issuance of such Option is not publicly announced, (iv) a zero cost of borrow and
(v) a 360 day annualization factor, provided, however, in case any Option is issued in connection with the issue or sale of other
securities of the Company, together comprising one integrated transaction, in no event shall the Option Value exceed a fraction of the
aggregate consideration received (excluding the minimum aggregate amount of additional consideration (as set forth in the instruments
relating thereto, without regard to any provision contained therein for a subsequent adjustment of such consideration) payable to the
Company upon the exercise of such Options, or in the case of Options for Convertible Securities, the exercise of such Options for Convertible
Securities and the conversion or exchange of such Convertible Securities) equal to (1) the number of shares of Common Stock underlying
such Option divided by (2) the total number of shares of Common Stock issued or issuable in the integrated transaction (including the
number of shares underlying such Option).
3 To be $1,000,000 / SPAC Public Share Redemption Price.
17
“Person” means an individual
or corporation, partnership, trust, incorporated or unincorporated association, joint venture, limited liability company, joint stock
company, government (or an agency or subdivision thereof) or other entity of any kind.
“Proceeding” means an action,
claim, suit, investigation or proceeding, whether commenced or threatened.
“Purchase Agreement” means
the Series A SPA (as defined in the Business Combination Agreement, by and among the Company, Target and the purchasers party thereto),
as amended, modified or supplemented from time to time in accordance with its terms.
“Registration Rights Agreement”
means the [Amended and Restated Registration Rights Agreement] among the Company, the initial Holder of this Warrant and the other parties
thereto.
“Required Holders” means the
holders of a majority in interest (based on remaining aggregate Warrant Shares) of the Related Warrants then outstanding, which majority
must include Inflection Point if Inflection Point then holds any Related Warrants.
“Trading Day” means a day on
which the principal Trading Market is open for trading.
“Trading Market” means any
of the following markets or exchanges on which the Common Stock is listed or quoted for trading on the date in question: the NYSE American,
the Nasdaq Capital Market, the Nasdaq Global Market, the Nasdaq Global Select Market or the New York Stock Exchange (or any successors
to any of the foregoing).
“Transaction Documents” means
this Warrant, the Purchase Agreement, the Certificate of Designation (as defined in the Purchase Agreement), the Related Warrants and
the Registration Rights Agreement, and all exhibits and schedules thereto.
“Transfer Agent” means Continental
Stock Transfer & Trust Company, the current transfer agent of the Company, and any successor transfer agent of the Company.
“Underlying Shares” means the
shares of Common Stock issuable upon conversion of the Series A Preferred Stock or exercise of this Warrant and the Related Warrants.
“VWAP” means, for any date,
the price determined by the first of the following clauses that applies: (a) if the Common Stock is then listed or quoted on a Trading
Market, the arithmetic mean of the daily volume weighted average prices of the Common Stock for each of the 20 Trading Days preceding
such date (or the nearest preceding date) on the Trading Market on which the Common Stock is then listed or quoted as reported by Bloomberg
(based on a Trading Day from 9:30 a.m. (New York City time) to 4:02 p.m. (New York City time)), with each such Trading Day weighted equally
regardless of the aggregate trading volume for such Trading Day, (b) if OTCQB or OTCQX is not a Trading Market, the arithmetic mean of
the daily volume weighted average prices of the Common Stock for each of the 20 Trading Days preceding such date (or the nearest preceding
date) on OTCQB, OTCQX or OTCID as applicable, calculated in the same manner as clause (a), (c) if the Common Stock is not then listed
or quoted for trading on OTCQB or OTCQX and if prices for the Common Stock are then reported in The Pink Open Market (or a similar organization
or agency succeeding to its functions of reporting prices), the average of the highest closing bid price and the lowest closing ask price
of the Common Stock for the 20 Trading Days preceding such date, or (d) in all other cases, the fair market value of a share of Common
Stock as determined by an independent appraiser selected in good faith by the Required Holders and reasonably acceptable to the Company,
the fees and expenses of which shall be paid by the Company. For the avoidance of doubt, the daily volume weighted average price for each
individual Trading Day shall be determined by Bloomberg in accordance with its standard methodology, and the VWAP for the applicable period
shall be calculated by summing such daily values and dividing by the number of Trading Days in the measurement period (i.e., 20 Trading
Days), such that each Trading Day’s price is given equal weight irrespective of trading volume.
18
EXHIBIT A
NOTICE OF EXERCISE
To:
Attn:
Email:
(1) The undersigned hereby elects
to purchase ________ Warrant Shares of the Company pursuant to the terms of the attached Warrant (only if exercised in full), and tenders
herewith payment of the exercise price in full, together with all applicable transfer taxes, if any.
(2) Payment shall take the form
of (check applicable box):
☐
in lawful money of the United States; or
☐
if permitted the cancellation of such number of Warrant Shares as is necessary, in accordance with the formula set forth in subsection
2(c), to exercise this Warrant with respect to the maximum number of Warrant Shares purchasable pursuant to the cashless exercise procedure
set forth in subsection 2(c).
(3) Please issue said Warrant
Shares in the name of the undersigned or in such other name as is specified below:
The Warrant Shares shall be delivered to the following
DWAC Account Number:
[(4) Accredited Investor.
The undersigned is an “accredited investor” as defined in Regulation D promulgated under the Securities Act of 1933, as amended.]
[SIGNATURE OF HOLDER]
Name
of Investing Entity:____________________________________________________________________________________
Signature of Authorized Signatory of Investing Entity: ______________________________________________________________
Name of Authorized Signatory:________________________________________________________________________________
Title of Authorized Signatory:___________________________________________________________________________________
Date:_______________________________________________________________________________________________________
19
EXHIBIT B
ASSIGNMENT FORM
(To assign the foregoing
Warrant, execute this form and supply required information. Do not use this form to purchase shares.)
FOR VALUE RECEIVED, the foregoing
Warrant and all rights evidenced thereby are hereby assigned to
Name:
(Please Print)
Address:
(Please Print)
Phone Number:
Email Address:
Dated: _______________ __, ______
Holder’s
Signature:
Holder’s
Address:
20
EX-10.1 — SPONSOR SUPPORT AGREEMENT, DATED AS OF JUNE 26, 2026, BY AND AMONG COLUMBUS CIRCLE 2 SPONSOR CORPORATION LLC, COLUMBUS CIRCLE CAPITAL CORP. II AND ELROY AIR, INC
EX-10.1
Filename: ea029643801ex10-1.htm · Sequence: 5
Exhibit
10.1
SPONSOR
SUPPORT AGREEMENT
This
Sponsor Support Agreement (this “Agreement”) is dated as of June 26, 2026, by and among Columbus Circle 2 Sponsor
Corporation LLC, a Delaware limited liability company (the “Sponsor”), Columbus Circle Capital Corp. II, a Cayman
Islands exempted company limited by shares (the “Purchaser”), and Elroy Air, Inc., a Delaware corporation (the “Company”).
Capitalized terms used but not defined herein shall have the respective meanings ascribed to such terms in the Business Combination Agreement
(as defined below).
WHEREAS,
as of the date hereof, the Sponsor is the holder of record and the “beneficial owner” (within the meaning of Rule 13d-3 under
the Exchange Act) of (i) 265,000 Purchaser Class A Ordinary Shares (the Purchaser Class A Ordinary Shares are included in units, each
unit consisting of one Purchaser Class A Ordinary Share and one-third of one warrant) and (ii) 7,666,667 Purchaser Class B Ordinary Shares
(collectively, the “Subject Securities”);
WHEREAS,
contemporaneously with the execution and delivery of this Agreement, the Purchaser, the Company and the other parties thereto have entered
into the Business Combination Agreement (as it may be amended, supplemented, restated or otherwise modified from time to time in accordance
with its terms, the “Business Combination Agreement”), dated as of the date hereof, pursuant to which, among other
transactions, the Purchaser and the Company intend to consummate a business combination; and
WHEREAS,
as an inducement to the Purchaser and the Company to enter into the Business Combination Agreement and to consummate the Transactions,
the parties hereto desire to agree to certain matters as set forth herein.
NOW,
THEREFORE, in consideration of the foregoing and the mutual agreements contained herein, and for other good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, the parties hereto, each intending to be legally bound hereby, hereby agree
as follows:
ARTICLE
I
SPONSOR SUPPORT AGREEMENT; COVENANTS
Section
1.1 Binding Effect of Business Combination Agreement. The Sponsor hereby acknowledges that it has read the Business Combination
Agreement and this Agreement and has had the opportunity to consult with its tax and legal advisors. The Sponsor shall be bound by, be
subject to and comply with Sections 6.06 (No Solicitation), 6.15 (Public Announcements) and 6.16 (Confidential Information)
of the Business Combination Agreement (and any relevant definitions contained in any such Sections) as if it were an original signatory
to the Business Combination Agreement with respect to such provisions.
Section
1.2 No Transfer. Unless otherwise deemed a Permitted Transfer (as defined below), during the period commencing on the date hereof
and ending on the earliest of (a) the Closing, (b) such date and time as the Business Combination Agreement shall be terminated in accordance
with Section 8.01 (Termination) thereof (the earlier of (a) and (b), the “Expiration Time”) and (c) the liquidation
of the Purchaser, the Sponsor shall not, without the prior written consent of the Company, (i) sell, offer to sell, contract or agree
to sell, hypothecate, pledge, grant any option to purchase or otherwise dispose of or agree to dispose of, directly or indirectly, file
(or participate in the filing of) a registration statement with the SEC (other than the Proxy Statement/Registration Statement) or establish
or increase a put equivalent position or liquidate or decrease a call equivalent position within the meaning of Section 16 of the Exchange
Act, with respect to any Subject Securities owned by the Sponsor, (ii) enter into any swap or other arrangement that transfers to another,
in whole or in part, any of the economic consequences of ownership of any Subject Securities owned by the Sponsor or (iii) take any action
in furtherance of any of the matters described in the foregoing clause (i) or (ii) (each, a “Transfer”). “Permitted
Transfer” means any Transfer of Subject Securities (i) to (A) any officer or director of the Purchaser, the Company or the
Sponsor, (B) any Affiliates or family members of the officers or directors of the Purchaser, the Company or the Sponsor, or (C) any direct
or indirect partners, members or equity holders of the Sponsor or any related investment funds or vehicles controlled or managed by such
Persons or their respective Affiliates (including, for the avoidance of doubt, where such Person is a partnership, to its general partner
or a successor partnership or fund, or any other funds managed by such partnership); (ii) to a nominee or custodian of a Person to whom
a Transfer would be permitted under clause (i); (iii) in connection with any legal, regulatory or other order, (iv) to a third party
in connection with any non-redemption, backstop arrangement, or other similar arrangement, (v) as otherwise mutually agreed upon among
each of the Sponsor, the Purchaser and the Company, or (vi) to the Purchaser or the Company; provided, however, that in the case of clauses
(i) through (v), as a precondition to such Transfer, such transferee must enter into a written agreement with the Company and the Purchaser
agreeing to assume all of the obligations under this Agreement with respect to such Subject Securities and to be bound by the transfer
restrictions set forth in this Agreement (to the extent applicable); provided, further, that, no Transfer permitted under this Section
1.2 shall relieve the Sponsor of its obligations under this Agreement.
Section
1.3 New Shares. In the event that (a) any Purchaser Ordinary Shares, Cayman Purchaser Warrants or other equity securities of the
Purchaser are issued to the Sponsor after the date of this Agreement pursuant to any stock dividend, stock split, recapitalization, reclassification,
combination or exchange of, on or affecting the Purchaser Ordinary Shares or the Cayman Purchaser Warrants owned by the Sponsor or otherwise,
(b) the Sponsor purchases or otherwise acquires beneficial ownership of any Purchaser Ordinary Shares, Cayman Purchaser Warrants or other
equity securities of the Purchaser after the date of this Agreement, or (c) the Sponsor acquires the right to vote or share in the voting
of any Purchaser Ordinary Shares, Cayman Purchaser Warrants or other equity securities of the Purchaser after the date of this Agreement
(such Purchaser Ordinary Shares, Cayman Purchaser Warrants or other equity securities of the Purchaser, collectively, the “New
Securities”), then such New Securities acquired or purchased by the Sponsor shall be subject to the terms of this Agreement
to the same extent as if they constituted the Subject Securities owned by the Sponsor as of the date hereof.
Section
1.4 Closing Date Deliverables. On the Closing Date, the Sponsor shall deliver to the Purchaser and the Company a duly executed
copy of the A&R Registration Rights Agreement and the Sponsor Lock-Up Agreement.
2
Section
1.5 Agreements. At any meeting of the Purchaser Shareholders, however called, or at any adjournment thereof, or in any other circumstance
in which the vote, consent or other approval of the Purchaser Shareholders is sought, the Sponsor agrees that it shall (i) appear at
each such meeting or otherwise cause all of its Subject Securities, which are entitled to vote, to be counted as present thereat for
purposes of calculating a quorum and (ii) vote (or cause to be voted), or execute and deliver a written consent (or cause a written consent
to be executed and delivered) covering, all of its Subject Securities, which are entitled to vote:
(i) in
favor of each Transaction Proposal;
(ii) against
any Alternative Transaction or any proposal relating to an Alternative Transaction (in each case, other than the Transaction Proposals);
(iii) against
any merger agreement or merger (other than the Business Combination Agreement and the Transactions), consolidation, combination, sale
of substantial assets, reorganization, recapitalization, dissolution, liquidation or winding up of or by the Purchaser;
(iv) against
any change in the business, management or board of directors of the Purchaser (other than in connection with the Transaction Proposals
or pursuant to the Business Combination Agreement or the Ancillary Documents); and
(v) against
any proposal, action or agreement that would (A) impede, interfere, frustrate, prevent or nullify any provision of this Agreement, the
Business Combination Agreement or the Transactions, (B) result in a breach in any respect of any covenant, representation, warranty or
any other obligation or agreement of the Purchaser under the Business Combination Agreement, (C) result in any of the conditions set
forth in Article VII (Closing Conditions) of the Business Combination Agreement not being fulfilled, (D) result in a breach of
any covenant, representation or warranty or other obligation or agreement of the Sponsor contained in this Agreement or (E) change in
any manner the dividend policy or capitalization of, including the voting rights of any class of capital stock of, the Purchaser.
The
Sponsor hereby agrees that it shall not commit or agree to take any action inconsistent with the foregoing.
(b) The
Sponsor shall comply with, and fully perform all of its obligations, covenants and agreements set forth in, the Insider Letter (as defined
below), including the obligations pursuant to Section 1 therein to not redeem any Purchaser Ordinary Shares in connection with the Transactions.
Section
1.6 No Challenges. The Sponsor agrees not to commence, join in, facilitate, assist or encourage, and agrees to take all actions
necessary to opt out of any class in any class action with respect to, any claim, derivative or otherwise, against Purchaser, the Company
or any of their respective successors or directors (a) challenging the validity of, or seeking to enjoin the operation of, any provision
of this Agreement or (b) alleging a breach of any fiduciary duty of any person in connection with the evaluation, negotiation or entry
into this Agreement, the Business Combination Agreement or the Transactions. Notwithstanding anything herein to the contrary, nothing
in this Agreement shall limit or restrict the ability of the Sponsor to enforce its rights under this Agreement or any other Ancillary
Document to which such Person is a party or seek any other remedies with respect to any breach of this Agreement or such other Ancillary
Document by any other party hereto or thereto, including by commencing any action in connection therewith.
3
Section
1.7 Further Assurances. The Sponsor shall take, or cause to be taken, all actions and do, or cause to be done, all things reasonably
necessary under applicable Laws to consummate the transactions contemplated hereby on the terms and subject to the conditions set forth
herein and the Transactions on the terms and subject to the conditions set forth in the Business Combination Agreement.
Section
1.8 No Inconsistent Agreement. The Sponsor hereby represents and covenants that it has not entered into, and shall not enter into,
any agreement that would restrict, limit or interfere with the performance of its obligations hereunder.
Section
1.9 Insider Letter. Neither the Sponsor nor the Purchaser shall amend, terminate or otherwise modify that certain letter agreement,
dated as of February 12, 2026, by and among the Purchaser, the Sponsor and certain of the Purchaser’s current and former officers
and directors (the “Insider Letter”) without the Company’s prior written consent.
Section
1.10 Waiver of Anti-Dilution Provision. The Sponsor hereby (but subject to the consummation of the Transactions) waives (for itself,
for its successors, heirs and assigns), to the fullest extent permitted by law and the amended and restated memorandum and articles of
association of the Purchaser (as may be amended from time to time, the “Articles”), any and all anti-dilution rights
with respect to the rate that the Purchaser Class B Ordinary Shares held by the Sponsor convert into Purchaser Class A Ordinary Shares
in connection with the transactions contemplated by the Business Combination Agreement. The waiver specified in this Section 1.10
shall be applicable only in connection with the Transactions and the transactions contemplated by this Agreement (and any Purchaser Class
A Ordinary Shares, shares of Common Stock or equity-linked securities issued in connection with the Transactions and the transactions
contemplated by this Agreement) and shall be void and of no force and effect if the Business Combination Agreement shall be terminated
for any reason.
ARTICLE
II
REPRESENTATIONS AND WARRANTIES
Section
2.1 Representations and Warranties of the Sponsor.
(a) Ownership.
The Sponsor represents and warrants as of the date hereof to the Purchaser and the Company that the Sponsor is the record and beneficial
owner (as defined in Rule 13d-3 of the Exchange Act) of, and has good title to, all of the Subject Securities, and there exist no Liens
or any other limitation or restriction (including any restriction on the right to vote, sell or otherwise dispose of such Subject Securities
(other than transfer restrictions under the Securities Act)) affecting any such Subject Securities, other than Liens pursuant to (i)
this Agreement, (ii) the Purchaser’s Organizational Documents, (iii) the Business Combination Agreement, (iv) the Insider Letter,
(v) the Sponsor’s Organizational Documents, (vi) agreements between the Sponsor and its members or partners or (vii) any applicable
securities Laws. The Subject Securities are the only equity securities in the Purchaser owned of record or beneficially by the Sponsor
on the date of this Agreement, and none of the Subject Securities will be subject to any proxy, voting trust or other agreement or arrangement
with respect to the voting of such Subject Securities, except as provided hereunder and under the Insider Letter. Other than the Cayman
Purchaser Warrants held by the Sponsor, the Sponsor does not hold or own any rights to acquire (directly or indirectly) any equity securities
of the Purchaser or any equity securities convertible into, or which can be exchanged for, equity securities of the Purchaser.
4
(b) Organization;
Due Authorization. The Sponsor is duly organized, validly existing and in good standing as a limited liability company under the
Laws of the jurisdiction in which it is incorporated, formed, organized or constituted, and the execution, delivery and performance of
this Agreement and the consummation of the transactions contemplated hereby are within the Sponsor’s powers and have been duly
authorized by all necessary limited liability company actions on the part of the Sponsor. This Agreement has been duly executed and delivered
by the Sponsor and, assuming due authorization, execution and delivery by the other parties to this Agreement, this Agreement constitutes
a legally valid and binding obligation of the Sponsor, enforceable against the Sponsor in accordance with the terms hereof (except as
enforceability may be limited by bankruptcy Laws, other similar Laws affecting creditors’ rights and general principles of equity
affecting the availability of specific performance and other equitable remedies).
(c) No
Conflicts. The execution and delivery of this Agreement by the Sponsor does not, and the performance by the Sponsor of its obligations
hereunder will not, (i) conflict with or result in a violation of the organizational documents of the Sponsor or (ii) require any consent
or approval that has not been given or other action that has not been taken by any Person (including under any Contract binding upon
the Sponsor or the Subject Securities held or to be held by the Sponsor), in each case, to the extent such consent, approval or other
action would prevent, enjoin or materially delay the performance by the Sponsor of its obligations under this Agreement.
(d) Litigation.
There are no Legal Proceedings pending against the Sponsor, or threatened in writing against the Sponsor or any of its Affiliates, before
(or, in the case of threatened Legal Proceedings, that would be before) any arbitrator or any Governmental Authority, which in any manner
challenges or seeks to prevent, enjoin or materially delay the performance by the Sponsor of its obligations under this Agreement.
(e) Brokerage
Fees. Except as described on Section 5.15 (Broker’s Fees) of the Purchaser Disclosure Letter, no broker, finder, investment
banker or other Person is entitled to any brokerage fee, finders’ fee or other commission in connection with the Transactions based
upon arrangements made by the Sponsor, for which the Purchaser or any of its Affiliates may become liable.
(f) Acknowledgment.
The Sponsor understands and acknowledges that each of the Purchaser and the Company is entering into the Business Combination Agreement
in reliance upon the Sponsor’s execution and delivery of this Agreement.
5
ARTICLE
III
MISCELLANEOUS
Section
3.1 Termination. This Agreement and all of its provisions shall terminate and be of no further force or effect upon the earliest
of (a) the Expiration Time, (b) the liquidation of the Purchaser and (c) the written agreement of the Sponsor, the Purchaser, and the
Company. Upon such termination of this Agreement, all obligations of the parties under this Agreement will terminate, without any liability
or other obligation on the part of any party hereto to any Person in respect hereof or the transactions contemplated hereby, and no party
hereto shall have any claim against another (and no person shall have any rights against such party), whether under contract, tort or
otherwise, with respect to the subject matter hereof; provided, however, that the termination of this Agreement shall not relieve any
party hereto from liability arising in respect of any breach of this Agreement prior to such termination. This ARTICLE III shall
survive the termination of this Agreement.
Section
3.2 Assignment. This Agreement and all of the provisions hereof will be binding upon and inure to the benefit of the parties hereto
and their respective heirs, successors and permitted assigns. Neither this Agreement nor any of the rights, interests or obligations
hereunder will be assigned (including by operation of law) without the prior written consent of the parties hereto.
Section
3.3 Specific Performance. The parties hereto agree that irreparable damage may occur in the event that any of the provisions of
this Agreement were not performed in accordance with their specific terms or were otherwise breached. It is accordingly agreed that the
parties hereto shall be entitled to seek an injunction or injunctions to prevent breaches of this Agreement and to enforce specifically
the terms and provisions of this Agreement in the chancery court or any other state or federal court within the State of Delaware, this
being in addition to any other remedy to which such party is entitled at law or in equity. In the event that any Action shall be brought
in equity to enforce the provisions of this Agreement, no party shall allege, and each party hereby waives the defense, that there is
an adequate remedy at law, and each party agrees to waive any requirement for the securing or posting of any bond in connection therewith.
Section
3.4 Amendment. This Agreement may not be amended, changed, supplemented, waived or otherwise modified or terminated, except upon
the execution and delivery of a written agreement executed by the Purchaser, the Company and the Sponsor.
Section
3.5 Miscellaneous. Sections 9.02 (Notices), 9.04 (Third Parties) 9.05 (Governing Law), 9.06 (Jurisdiction),
9.07 (Waiver of Jury Trial), 9.09 (Severability), 9.11 (Entire Agreement), 9.12 (Interpretation), 9.13 (Counterparts)
and 9.15 (Waiver of Claims Against Trust) of the Business Combination Agreement are each hereby incorporated into this Agreement
(including any relevant definitions contained in any such Sections), mutatis mutandis.
[THE
REMAINDER OF THIS PAGE IS INTENTIONALLY BLANK]
6
IN
WITNESS WHEREOF, the Sponsor, the Purchaser and the Company have each caused this Agreement to be duly executed as of the date first
written above.
SPONSOR:
Columbus
Circle 2 Sponsor Corporation LLC
By:
/s/
Joseph Pooler
Name:
Joseph
Pooler
Title:
Executive Vice President and
Chief Financial Officer
7
IN
WITNESS WHEREOF, the Sponsor, the Purchaser and the Company have each caused this Agreement to be duly executed as of the date first
written above.
PURCHASER:
COLUMBUS
CIRCLE CAPITAL CORP. II
By:
/s/ Gary
Quin
Name:
Gary
Quin
Title:
Chief
Executive Officer
8
IN
WITNESS WHEREOF, the Sponsor, the Purchaser and the Company have each caused this Agreement to be duly executed as of the date first
written above.
COMPANY:
ELROY
AIR, INC.
By:
/s/
Andrew Clare
Name:
Andrew Clare
Title:
Chief Executive Officer
9
EX-10.2 — STOCKHOLDER VOTING AND SUPPORT AGREEMENT, DATED AS OF JUNE 26, 2026
EX-10.2
Filename: ea029643801ex10-2.htm · Sequence: 6
Exhibit 10.2
VOTING AND SUPPORT AGREEMENT
This VOTING AND SUPPORT AGREEMENT (this
“Agreement”), is dated as of June , 2026, by and among Columbus Circle Capital Corp. II, a Cayman Islands
exempted company (which shall domesticate as a Delaware corporation prior to the Closing) (the “Purchaser”), the
Persons set forth on Schedule I hereto (the “Sellers”) and Elroy Air, Inc., a Delaware corporation (the
“Company”). Capitalized terms used but not defined herein shall have the respective meanings ascribed to such
terms in the Business Combination Agreement (as defined below).
WHEREAS, as of
the date hereof, the Sellers are the holders of such number and type of Company Securities as are indicated opposite each of their names
on Schedule I attached hereto (collectively, the “Subject Securities”);
WHEREAS, contemporaneously
with the execution and delivery of this Agreement, the Purchaser, the Company and the other parties thereto have entered into the Business
Combination Agreement (as it may be amended, supplemented, restated or otherwise modified from time to time in accordance with its terms,
the “Business Combination Agreement”), dated as of the date hereof, pursuant to which, among other transactions, the
Purchaser and the Company intend to consummate a business combination;
WHEREAS, the Sellers
represent the requisite minimum number of shares of Company Common Stock and Company Preferred Stock required to constitute Company Stockholder
Approval;
WHEREAS, the Company
proposes to amend the Company’s Certificate of Incorporation (as amended, the “Charter Amendment”) immediately
prior to the consummation of the Transactions, to revise the conversion prices applicable to each series of the Company’s preferred
stock (the “Company Preferred Stock”), and the approval of the Charter Amendment requires, among other things, the
affirmative vote of the holders of a majority of the outstanding shares of Company Common Stock held by stockholders who do not hold any
shares of Company Preferred Stock (the “Disinterested Common Stockholders”); and
WHEREAS, as an
inducement to the Purchaser and the Company to enter into the Business Combination Agreement, to consummate the Transactions, and to facilitate
the approval of the Charter Amendment, the parties hereto desire to agree to certain matters as set forth herein.
NOW, THEREFORE,
in consideration of the foregoing and the mutual agreements contained herein, and for other good and valuable consideration, the receipt
and sufficiency of which are hereby acknowledged, the parties hereto, each intending to be legally bound hereby, hereby agree as follows:
ARTICLE I
VOTING AND SUPPORT AGREEMENT;
COVENANTS
Section 1.1 Binding
Effect of Business Combination Agreement. Each of the Sellers hereby acknowledges that he, she or it has read the Business
Combination Agreement and this Agreement and has had the opportunity to consult with his, her or its tax and legal advisors. Each of
the Sellers shall be bound by and comply with Section 6.06 (No Solicitation), Section 6.15 (Public Announcements) and
Section 6.16 (Confidential Information) of the Business Combination Agreement (and any relevant definitions contained in any
such Sections) as if such Seller was an original signatory to the Business Combination Agreement with respect to such
provisions.
Section 1.2 No Transfer.
(a) Unless
otherwise deemed a Permitted Transfer (as defined below), during the period commencing on the date hereof and ending on the earliest of
(a) the Closing, (b) such date and time as the Business Combination Agreement shall be terminated in accordance with Section 8.01 (Termination)
thereof (the earlier of (a) and (b), the “Expiration Time”) and (c) the liquidation of the Company, the Sellers shall
not, without the prior written consent of the Purchaser and the Company, (i) sell, offer to sell, contract or agree to sell, hypothecate,
pledge, grant any option to purchase or otherwise dispose of or agree to dispose of, directly or indirectly, any Subject Securities, (ii)
enter into any swap or other arrangement that transfers to another, in whole or in part, any of the economic consequences of ownership
of any Subject Securities or (iii) take any action in furtherance of any of the matters described in the foregoing clause (i) or (ii)
(each, a “Transfer”).
(b) “Permitted
Transfer” means any Transfer of Subject Securities (i) to any Affiliates or family members of such Seller, (ii) to any investment
funds or vehicles controlled or managed by such Seller or its Affiliates, (iii) by gift to a trust, the beneficiary of which is a Person
to whom a Transfer would be permitted under clause (i), or to a charitable organization, (iv) in the case of an individual, by
virtue of laws of descent and distribution upon death of such individual, (v) in the case of an individual, pursuant to a qualified domestic
relations order, (vi) to a nominee or custodian of a Person to whom a Transfer would be permitted under clause (i), (vii) in the
case of an entity that is a trust, Transfers to a trustor or beneficiary of the trust or to the estate of a beneficiary of such trust,
(viii) to a third party in connection with any non-redemption, backstop arrangement or other similar arrangement, (ix) in connection
with any legal, regulatory or other order; or (x) as otherwise mutually agreed upon between such Seller, the Purchaser and the Company;
provided, however, that in the case of clauses (i) through (vii) and clause (x), as a precondition to such
Transfer, such transferee must enter into a written agreement with the Company and the Purchaser agreeing to assume all of the obligations
under this Agreement with respect to such Subject Securities and to be bound by the transfer restrictions set forth in this Agreement
(to the extent applicable); provided, further, that, no Transfer permitted under this Section 1.2 shall relieve
such Seller of its obligations under this Agreement.
Section 1.3 New
Shares. In the event that (a) any shares of Company Securities are issued to a Seller after the date of this Agreement pursuant to
any dividend, split, recapitalization, reclassification, combination or exchange of, on or affecting the Company Securities owned by such
Seller or otherwise, (b) a Seller purchases or otherwise acquires beneficial ownership of any Company Securities after the date of this
Agreement, or (c) a Seller acquires the right to vote or share in the voting of any Company Securities after the date of this Agreement
(such Company Securities, collectively, the “New Securities”), then such New Securities acquired or purchased by such
Seller shall be subject to the terms of this Agreement to the same extent as if they constituted the Subject Securities owned by such
Seller as of the date hereof.
2
Section 1.4 Closing Date Deliverables. On the Closing
Date, each of the Sellers shall deliver:
(a) a properly
completed and duly executed IRS Form W-9 from such Seller;
(b) a duly executed copy
of that certain A&R Registration Rights Agreement; and
(c) a duly executed copy of the Lock-Up Agreement.
Section 1.5 Seller
Agreements. At any meeting of the stockholders of the Company, however called, or at any adjournment thereof, or in any other circumstance
in which the vote, consent or other approval of the stockholders of the Company is sought, each of the Sellers shall (i) appear at each
such meeting or otherwise cause all of its Subject Securities, which are entitled to vote, to be counted as present thereat for purposes
of calculating a quorum and (ii) vote (or cause to be voted), or execute and deliver a written consent (or cause a written consent to
be executed and delivered) covering, all of his, her or its Subject Securities, which are entitled to vote:
(a) to
approve and adopt the Business Combination Agreement and the consummation of the Transactions;
(b) against
any Alternative Transaction or any proposal relating to an Alternative Transaction (in each case, other than the Transaction Proposals);
(c) against
any merger agreement or merger (other than the Business Combination Agreement and the Transactions), consolidation, combination, sale
of substantial assets, reorganization, recapitalization, dissolution, liquidation or winding up of or by the Company;
(d) against
any change in the business, management or board of directors of the Company (other than in connection with the Transaction Proposals or
pursuant to the Business Combination Agreement or the Ancillary Documents);
(e) against
any proposal, action or agreement that would (A) impede, interfere, frustrate, prevent or nullify any provision of this Agreement, the
Business Combination Agreement, the Charter Amendment or the Transactions, (B) result in a breach in any respect of any covenant, representation,
warranty or any other obligation or agreement of the Company under the Business Combination Agreement, (C) result in any of the conditions
set forth in Article VII (Closing Conditions) of the Business Combination Agreement not being fulfilled, (D) result in a breach of any
covenant, representation or warranty or other obligation or agreement of such Seller contained in this Agreement or (E) change in any
manner the dividend policy or capitalization of, including the voting rights of any class of capital stock of, the Company (other than
pursuant to the Charter Amendment); and
3
(f) to convert
all outstanding shares of Company Preferred Stock into Company Common Stock as of immediately prior to the Effective Time (and after
giving effect to the conversions and exercises described in Sections 2.01(a)-(b) of the Business Combination Agreement) in
accordance with the Company’s Organizational Documents (as amended by the Charter Amendment);
(g) to
approve and adopt the Charter Amendment, including the revised conversion prices applicable to each series of Company Preferred Stock
set forth therein;
(h) to
approve the Transactions as may be required to satisfy the approval requirements in Section 3.3 of the Company Certificate of Incorporation;
and
(i) to
the extent such Seller is a Disinterested Common Stockholder, to vote all shares of Company Common Stock held by such Seller in favor
of the Charter Amendment in satisfaction of the Disinterested Common Stockholder approval requirement.
Each Seller hereby
agrees that he, she or it shall not commit or agree to take any action inconsistent with the foregoing. Each Seller further agrees that,
with respect to any written consent to be delivered pursuant to the obligations of such Seller under this Section 1.5, such written
consent shall be delivered promptly following the time at which the Registration Statement has been declared effective under the Securities
Act (and, in any event, within three (3) Business Days thereof).
Section 1.6 No
Challenges. Each Seller agrees not to commence, join in, facilitate, assist or encourage, and agrees to take all actions necessary
to opt out of any class in any class action with respect to, any claim, derivative or otherwise, against Purchaser, the Company or any
of their respective successors or directors (a) challenging the validity of, or seeking to enjoin the operation of, any provision of this
Agreement or (b) alleging a breach of any fiduciary duty of any person in connection with the evaluation, negotiation or entry into this
Agreement, the Business Combination Agreement or the Transactions.
Section 1.7 Further
Assurances. Each Seller shall take, or cause to be taken, all actions and do, or cause to be done, all things reasonably necessary
under applicable Laws, or as reasonably requested by Purchaser or the Company, to effect the actions set forth herein and to consummate
the transactions contemplated hereby on the terms and subject to the conditions set forth herein and the Transactions on the terms and
subject to the conditions set forth in the Business Combination Agreement.
Section 1.8 No
Inconsistent Agreement. Each Seller hereby represents and covenants that such Seller has not entered into, and shall not enter into,
any agreement that would restrict, limit, or interfere with the performance of such Seller’s obligations hereunder. Each Seller
agrees to reasonably promptly notify the Purchaser in writing of any updates to Schedule I hereto after the date hereof and prior to Closing.
Section 1.9 Appraisal
Rights. Each Seller hereby waives and agrees not to exercise any rights of appraisal or rights to dissent from the Transactions that
he, she or it may have with respect to the Subject Securities under applicable Law.
4
Section 1.10 Consent
to Disclosure. Each Seller hereby consents to the publication and disclosure in the Proxy Statement/Registration Statement (and,
as and to the extent otherwise required by applicable securities Laws or the SEC or any other securities authorities, any documents
or communications provided by the Purchaser or the Company to any Governmental Authority and to Purchaser Shareholders) of such
Seller’s identity and beneficial ownership of the Subject Securities and the nature of such Seller’s commitments,
arrangements and understandings under and relating to this Agreement and, if deemed appropriate by the Purchaser and the Company, a
copy of this Agreement. Each Seller will promptly provide any information reasonably requested by Purchaser or the Company that is
reasonably necessary for any regulatory application or filing made or approval sought in connection with the Transactions (including
filings with the SEC).
ARTICLE II
REPRESENTATIONS
AND WARRANTIES
Section 2.1 Representations
and Warranties of the Seller. Each Seller, severally and not jointly, represents and warrants as of the date hereof to the Purchaser
and the Company, in each case, only with respect to his, her or itself, as follows:
(a) Organization;
Due Authorization. (i) If the Seller is a natural person, he or she has all the requisite power and authority and has taken all action
necessary in order to execute and deliver this Agreement, to perform his or her obligations hereunder and to consummate the transactions
contemplated hereby, and (ii) if the Seller is not a natural person, it is duly organized, validly existing and in good standing under
the Laws of the jurisdiction in which it is incorporated, formed, organized or constituted, and the execution, delivery and performance
of this Agreement and the consummation of the transactions contemplated hereby are within such Seller’s corporate, limited liability
company or similar organizational powers and have been duly authorized by all necessary corporate, limited liability company, or similar
organizational actions on the part of such Seller. This Agreement has been duly executed and delivered by such Seller and, assuming due
authorization, execution and delivery by the other parties hereto, this Agreement constitutes a legally valid and binding obligation of
such Seller, enforceable against such Seller in accordance with the terms hereof (except as enforceability may be limited by bankruptcy
Laws, other similar Laws affecting creditors’ rights and general principles of equity affecting the availability of specific performance
and other equitable remedies). If this Agreement is being executed in a representative or fiduciary capacity, the Person signing this
Agreement has full power and authority to enter into this Agreement on behalf of such Seller.
(b) Ownership.
Such Seller is the record and beneficial owner (as defined in Rule 13d-3 of the Exchange Act) of, and has good title to, all of its
Subject Securities, and there exist no Liens or any other limitation or restriction (including any restriction on the right to vote,
sell or otherwise dispose of such Subject Securities (other than transfer restrictions under the Securities Act)) affecting any such
Subject Securities, other than Liens pursuant to (i) this Agreement, (ii) the Company’s Organizational Documents, (iii) the
Business Combination Agreement, (iv) the Amended and Restated Voting Agreement, dated as of October 31, 2024, by and among the
Company, Seller and certain other Company stockholders (as may be amended from time to time) (the “Company Voting
Agreement”), (v) if the Seller is not a natural person, the Seller’s Organizational Documents or (vi) any applicable
securities Laws. Such Seller’s Subject Securities are the only equity securities of the Company owned of record or
beneficially by such Seller on the date of this Agreement, and none of such Subject Securities are subject to any proxy, voting
trust or other agreement or arrangement with respect to the voting of such Subject Securities, except as provided hereunder and
under the Company Voting Agreement. Other than the Subject Securities, such Seller does not hold or own any rights to acquire
(directly or indirectly) any equity securities of the Company or any equity securities convertible into, or which can be exchanged
for, equity securities of the Company.
5
(c) No
Conflicts. The execution and delivery of this Agreement by such Seller does not, and the performance by such Seller of its obligations
hereunder will not, (i) conflict with or result in a violation of the organizational documents of such Seller, or (ii) require any consent
or approval that has not been given or other action that has not been taken by any third party (including under any Contract binding upon
such Seller or such Seller’s Subject Securities), in each case, to the extent such consent, approval or other action would prevent,
enjoin or materially delay the performance by such Seller of its obligations under this Agreement.
(d) Adequate
Information. Such Seller has been furnished or given access to adequate information concerning the business and financial condition
of Purchaser and the Company to make an informed decision regarding this Agreement and the Transactions and has independently and without
reliance upon Purchaser or the Company and based on such information as such Seller has deemed appropriate, made its own analysis and
decision to enter into this Agreement. Such Seller acknowledges that Purchaser and the Company have not made and do not make any representation
or warranty, whether express or implied, of any kind or character except as expressly set forth in this Agreement. Such Seller acknowledges
that the agreements contained herein with respect to the Subject Securities held by such Seller are irrevocable and result in the waiver
of any right of such Seller to demand appraisal in connection with the Business Combination under Section 262 of the General Corporation
Law of the State of Delaware and any other Law.
(e) Litigation.
There are no Legal Proceedings pending against such Seller or, to the knowledge of such Seller, threatened in writing against such Seller,
before (or, in the case of threatened Legal Proceedings, that would be before) any arbitrator or any Governmental Authority, which in
any manner challenges or seeks to prevent, enjoin or materially delay the performance by such Seller of its obligations under this Agreement.
(f) Brokerage
Fees. No broker, finder, investment banker or other Person is entitled to any brokerage fee, finders’ fee or other commission
in connection with the Transactions based upon arrangements made by such Seller in his, her or its capacity as a stockholder of the Company,
for which the Company or any of its Affiliates may become liable.
(g) Acknowledgement.
Such Seller understands and acknowledges that each of the Purchaser and the Company is entering into the Business Combination Agreement
in reliance upon the Seller’s execution and delivery of this Agreement.
6
ARTICLE III
MISCELLANEOUS
Section 3.1 Termination.
This Agreement and all of its provisions shall terminate and be of no further force or effect upon the earliest of (a) the Expiration
Time, (b) the liquidation of the Company and (c) the written agreement of the Sellers, the Purchaser, and the Company. Upon such termination
of this Agreement, all obligations of the parties under this Agreement will terminate, without any liability or other obligation on the
part of any party hereto to any Person in respect hereof or the transactions contemplated hereby, and no party hereto shall have any claim
against another (and no person shall have any rights against such party), whether under contract, tort or otherwise, with respect to the
subject matter hereof; provided, however, that the termination of this Agreement shall not relieve any party hereto from liability arising
in respect of any breach of this Agreement prior to such termination. This ARTICLE III shall survive the termination
of this Agreement.
Section 3.2 Assignment.
This Agreement and all of the provisions hereof will be binding upon and inure to the benefit of the parties hereto and their respective
heirs, successors and permitted assigns. Neither this Agreement nor any of the rights, interests or obligations hereunder will be assigned
(including by operation of law) without the prior written consent of the parties hereto.
Section 3.3 Specific
Performance. The parties hereto agree that irreparable damage may occur in the event that any of the provisions of this Agreement
were not performed in accordance with their specific terms or were otherwise breached. It is accordingly agreed that the parties hereto
shall be entitled to seek an injunction or injunctions to prevent breaches of this Agreement and to enforce specifically the terms and
provisions of this Agreement in the chancery court or any other state or federal court within the State of Delaware, this being in addition
to any other remedy to which such party is entitled at law or in equity. In the event that any Action shall be brought in equity to enforce
the provisions of this Agreement, no party shall allege, and each party hereby waives the defense, that there is an adequate remedy at
law, and each party agrees to waive any requirement for the securing or posting of any bond in connection therewith.
Section 3.4 Amendment.
This Agreement may not be amended, changed, supplemented, waived or otherwise modified or terminated, except upon the execution and delivery
of a written agreement executed by the Purchaser, the Company and the Sellers.
Section 3.5 Miscellaneous.
Sections 9.02 (Notices), 9.05 (Governing Law), 9.06 (Jurisdiction), 9.07 (Waiver of Jury Trial), 9.09
(Severability), 9.11 (Entire Agreement), 9.12 (Interpretation), 9.13 (Counterparts) and 9.15 (Waiver
of Claims Against Trust) of the Business Combination Agreement are each hereby incorporated into this Agreement (including any
relevant definitions contained in any such Sections), mutatis mutandis.
[THE REMAINDER OF THIS PAGE IS
INTENTIONALLY BLANK]
7
IN WITNESS WHEREOF, each of the
parties has caused this Agreement to be duly executed on its behalf as of the day and year first above written.
PURCHASER:
COLUMBUS CIRCLE CAPITAL CORP. II
By:
Name:
Title:
COMPANY:
ELROY AIR, INC.
By:
Name:
Andrew Clare
Title:
Chief Executive Officer
Signature Page to Voting
and Support Agreement
SELLERS:
DIAMONDSTREAM PARTNERS FUND II, LLC
By:
Name:
Brian C. Flynn, Jr.
Title:
Co-Managing Member
DIAMONDSTREAM CO-INVESTMENT FUND 5, LLC
By:
Name:
Brian C. Flynn, Jr.
Title:
Co-Managing Member
Signature Page to Voting
and Support Agreement
SELLERS:
CATAPULT VENTURES OPPORTUNITIES I, L.P.
By:
Name:
Darren Liccardo
Title:
Managing Director
Signature Page to Voting and Support Agreement
SELLERS:
MARLINSPIKE DISRUPTIVE TECHNOLOGY FUND 1, LP
By:
Name:
Mislav Tolusic
Title:
Managing Partner
MARLINSPIKE ELROY AIR PRIVATE STOCK 1 LLC
By:
Name:
Mislav Tolusic
Title:
Managing Partner
Signature Page to Voting
and Support Agreement
SELLERS:
L&B CAPITAL SGR S.P.A. ON BEHALF OF SEAD.CLIFFS
By:
Name:
Massimiliano Dendi
Title:
Managing Partner
Signature Page to Voting
and Support Agreement
SELLERS:
SHIELD CAPITAL FUND I, L.P.
By:
Name:
Raj Shah
Title:
Managing Partner
Signature Page to Voting
and Support Agreement
SCHEDULE I
Sellers
NAME
Type of Company Securities
Number of Company
Securities
DiamondStream Co-Investment Fund 5, LLC
Series AA Preferred
2,371,528
DiamondStream Co-Investment Fund 5, LLC
Series AAA Preferred
2,063,698
DiamondStream Co-Investment Fund 5, LLC
Series A Prime Preferred
10,758,518
DiamondStream Co-Investment Fund 5, LLC
Series Seed Prime Preferred
21,308,497
Shield Capital Fund I, L.P.
Series A-1 Preferred
9,635
Shield Capital Fund I, L.P.
Series AA Preferred
237,152
Shield Capital Fund I, L.P.
Series AAA Preferred
2,751,597
Shield Capital Fund I, L.P.
Series A Prime Preferred
5,599,602
Shield Capital Fund I, L.P.
Series Seed Prime Preferred
14,592,999
Marlinspike Disruptive Technology Fund 1, LP
Series AAA Preferred
1,192,357
Marlinspike Disruptive Technology Fund 1, LP
Series A Prime Preferred
2,237,768
Marlinspike Disruptive Technology Fund 1, LP
Series Seed Prime Preferred
5,831,788
Marlinspike Elroy Air Private Stock 1 LLC
Series AA Preferred
1,192,911
Marlinspike Elroy Air Private Stock 1 LLC
Series A Prime Preferred
2,278,926
Marlinspike Elroy Air Private Stock 1 LLC
Series Seed Prime Preferred
5,641,299
Catapult Ventures Opportunities I, L.P.
Series Seed Preferred
478,011
Catapult Ventures Opportunities I, L.P.
Series A-1 Preferred
1,599,616
Catapult Ventures Opportunities I, L.P.
Series A Prime Preferred
1,506,188
Catapult Ventures Opportunities I, L.P.
Series Seed Prime Preferred
3,925,245
DiamondStream Partners Fund II, LLC
Series Seed Preferred
47,801
DiamondStream Partners Fund II, LLC
Series A-1 Preferred
499,879
DiamondStream Partners Fund II, LLC
Series AA-1 Preferred
77,481
DiamondStream Partners Fund II, LLC
Series AA-3 Preferred
44,466
DiamondStream Partners Fund II, LLC
Series AA Preferred
545,450
DiamondStream Partners Fund II, LLC
Series AAA Preferred
74,521
DiamondStream Partners Fund II, LLC
Series A Prime Preferred
1,624,524
DiamondStream Partners Fund II, LLC
Series Seed Prime Preferred
4,233,642
L&B Capital SGR S.p.A. on behalf of Sead.Cliffs
Series Seed-3 Preferred
53,112
L&B Capital SGR S.p.A. on behalf of Sead.Cliffs
Series Seed Preferred
123,087
L&B Capital SGR S.p.A. on behalf of Sead.Cliffs
Series AA-1 Preferred
28,175
L&B Capital SGR S.p.A. on behalf of Sead.Cliffs
Series AAA Preferred
447,133
L&B Capital SGR S.p.A. on behalf of Sead.Cliffs
Series AAA-1 Preferred
274,619
L&B Capital SGR S.p.A. on behalf of Sead.Cliffs
Series A Prime Preferred
1,466,359
L&B Capital SGR S.p.A. on behalf of Sead.Cliffs
Series Seed Prime Preferred
3,821,496
David Merrill and Amy Sheng as co-trustees of the Merrill Sheng Family Trust
Voting Common
2,550,000
Clint Cope
Voting Common
1,275,000
KYC, LLC
Voting Common
1,275,000
EX-10.3 — FORM OF SPONSOR LOCK-UP AGREEMENT
EX-10.3
Filename: ea029643801ex10-3.htm · Sequence: 7
Exhibit 10.3
LOCK-UP
AGREEMENT
THIS
LOCK-UP AGREEMENT (this “Agreement”), dated as of [●], 2026, is made and entered into by and among Elroy
Air, Inc., a Delaware corporation (the “Company”) (formerly known as Inflection Point Acquisition Corp. VII,
a Cayman Islands exempted company, prior to its domestication as a Delaware corporation), Columbus Circle 2 Sponsor Corporation LLC,
a Delaware limited liability company (the “Sponsor”), Cohen & Company Securities, LLC (“CCM”)
and Clear Street LLC (“Clear Street”) and, the Sponsor, CCM and Clear Street, together with any Person who
hereafter becomes a party to this Agreement pursuant to Section 2 or Section 7 of this Agreement, (the “Securityholders”
and each, a “Securityholder”). Capitalized terms used but not defined herein shall have the respective meanings
ascribed to such terms in the Business Combination Agreement (as defined herein).
WHEREAS,
the Company is party to that certain Business Combination Agreement, dated as of [●], 2026 (as the same may be amended, restated,
amended and restated, supplemented or otherwise modified from time to time, the “Business Combination Agreement”),
by and among the Company, IPGX Merger Sub, Inc., a Delaware corporation and a direct wholly-owned subsidiary of the Company, and Elroy
Air, Inc., a Delaware corporation (“Legacy Elroy Air”), pursuant to which the Company and Legacy Elroy Air
consummated a business combination (the “Business Combination”);
WHEREAS,
immediately prior to the Business Combination, the Company transferred by way of continuation to and domesticated as a Delaware corporation
in accordance with Section 388 of the Delaware General Corporation Law, as amended, and the Companies Act (As Revised) of the Cayman
Islands (the “Domestication”);
WHEREAS,
prior to the Domestication the Sponsor owned, in aggregate, (i) 265,000 Purchaser Class A Ordinary Shares (the Purchaser Class A
Ordinary Shares are included in units, each unit consisting of one Purchaser Class A Ordinary Share and one-third of one warrant) and
(ii) 7,666,667 Purchaser Class B Ordinary Shares;
WHEREAS,
(i) immediately prior to the Domestication, each then issued and outstanding Purchaser Class B Ordinary Share was converted on a
one-for-one basis into a Purchaser Class A Ordinary Share (the “Sponsor Share Conversion”) and (ii) in connection
with the Domestication, (x) each then issued and outstanding Purchaser Class A Ordinary Share was converted automatically, on a one-for-one
basis, into one (1) share of common stock of the Company, par value $0.0001 per share (the “Common Stock”);
(y) each then issued and outstanding Cayman Purchaser Warrant was converted automatically into one (1) Domesticated Purchaser Warrant,
pursuant to the Warrant Agreement; and (z) each then issued and outstanding Cayman Purchaser Unit was cancelled and thereafter entitled
the holder thereof to one (1) share of Common Stock and one-third (1/3) of one Domesticated Purchaser Warrant, following which (a) the
Sponsor owns (i) 7,931,667 shares of Common Stock (“Founder Shares”), including 7,666,667 shares issued upon
conversion of the Purchaser Class B Ordinary Shares and 265,000 shares issued upon the separation and conversion of the Cayman Purchaser
Units (the “Sponsor Unit Shares”) and (ii) 83,333 Domesticated Purchaser Warrants issued upon separation and
conversion of the Cayman Purchaser Units (the “Sponsor Warrants”) and (b) CCM and Clear Street collectively
own (i) 400,000 shares issued upon the separation and conversion of the Cayman Purchaser Units (the “Underwriter Unit Shares”
and together with the Sponsor Unit Shares, the “Unit Shares”) and (ii) 133,333 Purchaser Warrants issued upon
separation and conversion of the Cayman Purchaser Units (the “Underwriter Warrants,” together with the Sponsor
Warrants, the “Warrants,” and the Founder Shares, the Unit Shares, the Warrants and the shares of Common Stock
issuable upon exercise of the Warrants (the “Warrant Shares”) collectively, the “Lock-Up Securities”);
WHEREAS,
in connection with the Business Combination, the parties hereto wish to set forth herein certain understandings between such parties
with respect to restrictions on transfer of equity interests in the Company.
1
NOW,
THEREFORE, in consideration of the foregoing and the mutual agreements contained herein, and for other good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, the parties hereto, each intending to be legally bound hereby, hereby agree
as follows:
1.
Transfer Restrictions. Subject to the exceptions set forth herein, each Securityholder agrees not to, without the prior written
consent of the board of directors of the Company, (i) sell, offer to sell, contract or agree to sell, hypothecate, pledge, grant any
option to purchase or otherwise dispose of or agree to dispose of, directly or indirectly, any Lock-Up Securities, (ii) enter into any
swap or other arrangement that transfers to another, in whole or in part, any of the economic consequences of ownership of any Lock-Up
Security or (iii) take any action in furtherance of any of the matters described in the foregoing clause (i) or (ii) (the actions specified
in clauses (i)-(iii), collectively, “Transfer”) prior to the date that is (x) with respect to the Founder
Shares, the earlier of (A) six (6) months after the consummation of the Business Combination and (B) the date on which the Common Stock
has closed at or above $12.00 per share for twenty (20) trading days during any thirty (30)-trading day period commencing at least thirty
(30) days after the consummation of the Business Combination or (y) with respect to the Unit Shares, the Warrants, and the Warrant Shares,
30 days after the consummation of the Business Combination (such applicable period, the “Lock-Up Period”).
2. Permitted
Transfers. The restrictions set forth in Section 1 shall not apply to:
(i) Transfers
of any securities other than the Lock-Up Securities or any other equity security of the Company
issued or issuable with respect to the Lock-Up Securities by way of a stock dividend or stock
split or in connection with a combination of shares, recapitalization, merger, consolidation,
spin-off, reorganization or similar transaction.
(ii) Transfers
to the Company’s officers or directors, any Affiliate or family member of any of the
Company’s officers or directors, any members or partners of the Sponsor or their Affiliates,
any affiliates of the Sponsor, or any employees of such Affiliates;
(iii) In
the case of an individual, Transfers to any Affiliates or family members of the Securityholder;
(iv) Transfers
to any investment funds or vehicles controlled or managed by the Securityholder or any of
its Affiliates;
(v) Transfers
by gift to a trust, the beneficiary of which is a Person to whom a Transfer would be permitted
under Section 2(iii), or to a charitable organization;
(vi) in
the case of an individual, Transfers by virtue of laws of descent and distribution upon death
of such individual;
(vii) in the case
of an individual, Transfers pursuant to a qualified domestic relations order;
(viii) in
the case of an individual, Transfers to a partnership, limited liability company or other
entity of which the Securityholder and/or the Affiliates or family members of the Securityholder
are the legal and beneficial owner of all of the outstanding equity securities or similar
interests;
(ix) Transfers
to a nominee or custodian of a Person to whom a Transfer would be permitted under Section
2(iii);
(x) by
private sales or transfers made in connection with any forward purchase agreement or similar
arrangement at prices no greater than the price at which the Lock-Up Securities were originally
purchased;
(xi) Transfers
in connection with any legal, regulatory or other order;
(xii) in
the case of an entity that is a trust, Transfers to a trustor or beneficiary of the trust
or to the estate of a beneficiary of such trust;
(xiii) in
the case of an entity, Transfers as part of a distribution to members, partners, shareholders
or equityholders of the Securityholder;
(xiv) in
the case of an entity, Transfers by virtue of the laws of the state of the entity’s
organization and the entity’s organizational documents upon dissolution of the entity;
(xv) the
exercise of stock options to purchase shares of Common Stock or the vesting of stock awards
relating to shares of Common Stock and any related Transfer of shares of Common Stock in
connection therewith (x) deemed to occur upon the “cashless” or “net”
exercise of such options or (y) for the purpose of paying the exercise price of such options
or for paying taxes due as a result of the exercise of such options, the vesting of such
options or stock awards, or as a result of the vesting of such shares of Common Stock, it
being understood that all shares of Common Stock received upon such exercise, vesting or
transfer will remain subject to the restrictions of this Agreement during the Lock-Up Period;
2
(xvi) Transfers
to the Company pursuant to any contractual arrangement in effect upon the consummation of
the Business Combination that provides for the repurchase by the Company or forfeiture of
Common Stock or other securities convertible into, or exercisable, redeemable or exchangeable
for, Common Stock in connection with the termination of the Securityholder’s service
to the Company;
(xvii) the
entry, by the Securityholder, at any time after the consummation of the Business Combination,
of any trading plan providing for the sale of shares of Common Stock by the Securityholder,
which trading plan meets the requirements of Rule 10b5-1(c) under the Exchange Act; provided,
however, that such plan does not provide for, or permit, the sale of any shares of
Common Stock during the Lock-Up Period and no public announcement or filing is voluntarily
made or required regarding such plan during the Lock-Up Period;
(xviii) Transfers
in the event of the completion of a liquidation, merger, stock exchange, reorganization or
other similar transaction that results in all of the Company’s securityholders having
the right to exchange their shares of Common Stock for cash, securities or other property;
and
(xix) Transfers
to satisfy any U.S. federal, state, or local income tax obligations of a Securityholder (or
its direct or indirect owners) arising from a change in the U.S. Internal Revenue Code of
1986, as amended (the “Code”), or the U.S. Treasury Regulations
promulgated thereunder (the “Regulations”) after the date on which
the Business Combination Agreement was executed by the parties, and such change prevents
the Business Combination from qualifying as a “reorganization” pursuant to Section
368 of the Code (and the Business Combination does not qualify for similar tax-free treatment
pursuant to any successor or other provision of the Code or Regulations taking into account
such changes), in each case solely and to the extent necessary to cover any tax liability
as a direct result of the transaction.
Provided,
however, that in the case of clauses (ii) through (xiii), as a prerequisite to such Transfer, such permitted transferee(s) must enter
into joinder to this Agreement, substantially in the form of Exhibit A hereto, in order to become a “Securityholder”
for purposes of this Agreement. For purposes of this Section 2, “immediate family” shall mean a spouse, domestic partner,
child (including by adoption), father, mother, brother or sister of the Securityholder, and lineal descendant (including by adoption)
of the Securityholder or of any of the foregoing persons.
3.
Termination. This Agreement shall terminate upon the earlier of (i) the expiration of the Common Stock Lock-Up Period, (ii) the
closing of a merger, liquidation, stock exchange, reorganization or other similar transaction after the date hereof that results in all
of the public stockholders of the Company having the right to exchange their shares of Common Stock for cash, securities or other property
and (iii) the liquidation of the Company.
4.
Prohibited Transfers. In furtherance of the foregoing, the Company, and any duly appointed transfer agent for the registration
or transfer of the securities described therein, are hereby authorized to decline to make any transfer of securities if such transfer
would constitute a violation or breach of this Agreement.
5.
Amendment. This Agreement may be amended, supplemented or modified only by execution of a written instrument signed by the Company
and the Securityholders holding a majority of the aggregate number of shares of Common Stock then held by all Securityholders as to which
this Agreement has not been terminated, executed in the same manner as this Agreement and which makes reference to this Agreement.
6.
Entire Agreement. This Agreement and the documents or instruments referred to herein embody the entire agreement and understanding
of the parties hereto in respect of the subject matter contained herein. There are no restrictions, promises, representations, warranties,
covenants or undertakings, other than those expressly set forth or referred to herein or the documents or instruments referred to herein,
which collectively supersede all prior agreements and the understandings among the parties hereto with respect to the subject matter
contained herein. Section 8 of that certain letter agreement, dated as of February 10, 2026, by and among the Purchaser, the Sponsor
and the Purchaser’s former officers and directors is hereby amended and superseded by this Agreement and is no longer of any force
or effect.
3
7.
Binding Effect; Assignment. This Agreement and all of the provisions hereof shall be binding upon and inure to the benefit of
the parties hereto and their respective successors and permitted assigns. This Agreement shall not be assigned by operation of Law or
otherwise without the prior written consent of the parties hereto, and any assignment without such consent shall be null and void; provided
that no such assignment shall relieve the assigning party of its obligations hereunder.
8.
Governing Law. This Agreement, and all claims or causes of action based upon, arising out of, or related to this Agreement or
the transactions contemplated hereby, shall be governed by, and construed in accordance with, the Laws of the State of Delaware, without
giving effect to principles or rules of conflict of Laws to the extent such principles or rules would require or permit the application
of Laws of another jurisdiction.
9.
Jurisdiction. Any Legal Proceeding based upon, arising out of or related to this Agreement or the transactions contemplated hereby
must be brought in the Court of Chancery of the State of Delaware (or, to the extent such court does not have jurisdiction, in the United
States District Court for the District of Delaware and to the extent such court does not have subject matter jurisdiction, the Superior
Court of the State of Delaware), and each of the parties irrevocably (i) submits to the exclusive jurisdiction of each such court in
any such Legal Proceeding, (ii) waives any objection it may now or hereafter have to personal jurisdiction, venue or to convenience of
forum, (iii) agrees that all claims in respect of the Legal Proceeding shall be heard and determined only in any such court, and (iv)
agrees not to bring any Legal Proceeding arising out of or relating to this Agreement or the transactions contemplated hereby in any
other court. Nothing herein contained shall be deemed to affect the right of any party to serve process in any manner permitted by Law
or to commence Legal Proceedings or otherwise proceed against any other party in any other jurisdiction, in each case, to enforce judgments
obtained in any Legal Proceeding, suit or proceeding brought pursuant to this Section 9.
10.
WAIVER OF JURY TRIAL. EACH PARTY ACKNOWLEDGES AND AGREES THAT ANY CONTROVERSY WHICH MAY ARISE UNDER THIS AGREEMENT AND THE TRANSACTIONS
CONTEMPLATED HEREBY IS LIKELY TO INVOLVE COMPLICATED AND DIFFICULT ISSUES, AND THEREFORE EACH SUCH PARTY HEREBY IRREVOCABLY, UNCONDITIONALLY
AND VOLUNTARILY WAIVES ANY RIGHT SUCH PARTY MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY ACTION, SUIT OR PROCEEDING DIRECTLY OR INDIRECTLY
ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY OF THE TRANSACTIONS CONTEMPLATED HEREBY.
11.
Counterparts. This Agreement (and any joinder to this Agreement) may be executed and delivered (including by facsimile or other
electronic transmission) in one or more counterparts, and by the different parties hereto in separate counterparts, each of which when
executed shall be deemed to be an original but all of which taken together shall constitute one and the same agreement.
12.
Severability. In case any provision in this Agreement shall be held invalid, illegal or unenforceable in a jurisdiction, such
provision shall be modified or deleted, as to the jurisdiction involved, only to the extent necessary to render the same valid, legal
and enforceable, and the validity, legality and enforceability of the remaining provisions hereof shall not in any way be affected or
impaired thereby nor shall the validity, legality or enforceability of such provision be affected thereby in any other jurisdiction.
Upon such determination that any term or other provision is invalid, illegal or incapable of being enforced, the parties will substitute
for any invalid, illegal or unenforceable provision a suitable and equitable provision that carries out, so far as may be valid, legal
and enforceable, the intent and purpose of such invalid, illegal or unenforceable provision.
13.
Liability. The liability of any Securityholder hereunder is several (and not joint). Notwithstanding any other provision of this
Agreement, in no event will any Securityholder be liable for any other Securityholder’s breach of such other Securityholder’s
obligations under this Agreement.
[Remainder
of page intentionally left blank]
4
IN
WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date first above written.
ELROY AIR, INC.
By:
Name:
Title:
Chief Executive Officer
[Signature
Page to Lock-Up Agreement]
IN
WITNESS WHEREOF, the parties hereto have duly executed this Agreement as of the date first above written.
SECURITYHOLDER:
COLUMBUS CIRCLE 2 SPONSOR CORPORATION
LLC
By:
Name:
Dennis Crilly
Title:
Authorized Signatory
Name:
Gary Quin
Name:
Garrett Curran
Name:
Alberto Alsina Gonzalez
Name:
Dr. Adam Beck
Name:
Matthew Murphy
Name:
Joseph W. Pooler, Jr
Name:
Marc Spiegel
[Signature
Page to Lock-Up Agreement]
EXHIBIT
A
JOINDER
TO LOCK-UP AGREEMENT
[●],
20[●]
Reference
is made to the Lock-Up Agreement, dated as of [●], 2026, by and among Elroy Air, Inc. (the “Company”)
and the Securityholders (as defined therein) from time to time party thereto (as amended, supplemented or otherwise modified from time
to time, the “Lock-Up Agreement”). Capitalized terms used but not otherwise defined herein shall have the meanings
ascribed to such terms in the Lock-Up Agreement.
Each
of the Company and the undersigned holder of equity interests in the Company (the “New Securityholder”) agrees
that this Joinder to the Lock-Up Agreement (this “Joinder”) is being executed and delivered for good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged.
The
New Securityholder hereby agrees to and does become party to the Lock-Up Agreement as a Securityholder. This Joinder shall serve as a
counterpart signature page to the Lock-Up Agreement and by executing below, the New Securityholder is deemed to have executed the Lock-Up
Agreement with the same force and effect as if originally named a party thereto.
This
Joinder may be executed and delivered (including by facsimile or other electronic transmission) in one or more counterparts, and by the
different parties hereto in separate counterparts, each of which when executed shall be deemed to be an original but all of which taken
together shall constitute one and the same agreement.
[Remainder
of Page Intentionally Left Blank.]
IN
WITNESS WHEREOF, the undersigned have duly executed this Joinder as of the date first set forth above.
[●]
By:
Name:
Title:
NEW SECURITYHOLDER:
[●]
By:
Name:
Title:
[Signature
Page to Joinder to Lock-Up Agreement]
EX-10.4 — FORM OF ELROY AIR LOCK-UP AGREEMENT
EX-10.4
Filename: ea029643801ex10-4.htm · Sequence: 8
Exhibit 10.4
FORM
OF SELLER LOCK-UP AGREEMENT
THIS
LOCK-UP AGREEMENT (this “Agreement”), dated as of [●], is made and entered into by and among [Elroy
Air, Inc.]1, a Delaware corporation (the “Company”) (formerly known as Columbus Circle Capital Corp
II, a Cayman Islands exempted company, prior to its domestication as a Delaware corporation), and the Persons set forth on Schedule I
hereto (such Persons, together with any Person who hereafter becomes a party to this Agreement pursuant to Section 2 or Section
7 of this Agreement, the “Securityholders” and each, a “Securityholder”). Capitalized
terms used but not defined herein shall have the respective meanings ascribed to such terms in the Business Combination Agreement (as
defined herein).
WHEREAS,
the Company is party to that certain Business Combination Agreement, dated as of [ ● ], 2026 (as the same may be amended, restated,
amended and restated, supplemented or otherwise modified from time to time, the “Business Combination Agreement”),
by and among the Company, IPGX Merger Sub, Inc., a Delaware corporation and Elroy Air, Inc., a Delaware corporation (“Legacy
Elroy”), pursuant to which the Company and Legacy Elroy consummated a business combination (the “Business Combination”);
WHEREAS,
the Business Combination Agreement provides that each holder of equity securities of the Company who will receive, or would receive upon
exercise of the Exchanged Options, at least 1.0% of the Aggregate Consideration in the Business Combination is required to execute this
Agreement;
WHEREAS,
following the consummation of the Business Combination, each Securityholder owns equity interests in the Company; and
WHEREAS,
in connection with the Business Combination, the parties hereto wish to set forth herein certain understandings between such parties
with respect to restrictions on transfer of equity interests in the Company.
NOW,
THEREFORE, in consideration of the foregoing and the mutual agreements contained herein, and for other good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, the parties hereto, each intending to be legally bound hereby, hereby agree
as follows:
1.
Transfer Restrictions. Subject to the exceptions set forth herein, each Securityholder agrees not to, without the prior written
consent of the board of directors of the Company, (i) sell, offer to sell, contract or agree to sell, hypothecate, pledge, grant any
option to purchase or otherwise dispose of or agree to dispose of, directly or indirectly, (a) any shares of common stock, par value
$0.0001 per share, of the Company (“Common Stock”) held by it immediately after the consummation of the Business
Combination, (b) any shares of Common Stock issuable upon the exercise of options to purchase shares of Common Stock held by it immediately
after the consummation of the Business Combination, or (c) any securities convertible into, or exercisable, redeemable or exchangeable
for, Common Stock (including any securities of the Company that when paired with one or more other securities of the Company or another
entity entitles the holder thereof to receive, Common Stock) held by it immediately after the consummation of the Business Combination
(the shares of Common Stock and securities specified in clauses (a)-(c), collectively, the “Lock-up Shares”),
(ii) enter into any swap or other arrangement that transfers to another, in whole or in part, any of the economic consequences of ownership
of any Lock-up Shares or (iii) take any action in furtherance of any of the matters described in the foregoing clause (i) or (ii) (the
actions specified in clauses (i)-(iii), collectively, “Transfer”) prior to the date that is the earlier
of (x) six (6) months after the consummation of the Business Combination and (y) the date on which the Lock-up Shares have closed at
or above $12.00 per share for twenty (20) trading days during any thirty (30)-trading day period commencing at least thirty (30) days
after the consummation of the Business Combination (the “Lock-Up Period”).
1 NTD:
To be name of public company following deSPAC transaction.
1
2. Permitted
Transfers. The restrictions set forth in Section 1 shall not apply to:
(a) Transfers
of any securities other than (a) the Lock-Up Shares and (b) any other equity security of
the Company issued or issuable with respect to the Lock-Up Shares by way of a stock dividend
or stock split or in connection with a combination of shares, recapitalization, merger, consolidation,
spin-off, reorganization or similar transaction;
(b) In
the case of an individual, Transfers to any Affiliates or family members of the Securityholder;
(c) Transfers
to any investment funds or vehicles controlled or managed by the Securityholder or any of
its Affiliates;
(d) Transfers
by gift to a trust, the beneficiary of which is a Person to whom a Transfer would be permitted
under Section 2(i), or to a charitable organization;
(e) in
the case of an individual, Transfers by virtue of laws of descent and distribution upon death
of such individual;
(f) in
the case of an individual, Transfers pursuant to a qualified domestic relations order;
(g) in
the case of an individual, Transfers to a partnership, limited liability company or other
entity of which the Securityholder and/or the Affiliates or family members of the Securityholder
are the legal and beneficial owner of all of the outstanding equity securities or similar
interests;
(h) Transfers
to a nominee or custodian of a Person to whom a Transfer would be permitted under Section
2(i);
(i) Transfers
in connection with any legal, regulatory or other order;
(j) in
the case of an entity that is a trust, Transfers to a trustor or beneficiary of the trust
or to the estate of a beneficiary of such trust;
2
(k) in
the case of an entity, Transfers as part of a distribution to members, partners, shareholders
or equityholders of the Securityholder;
(l) in
the case of an entity, Transfers by virtue of the laws of the state of the entity’s
organization and the entity’s organizational documents upon dissolution of the entity;
(m) the
exercise of stock options or warrants to purchase shares of Common Stock or the vesting of
stock awards relating to shares of Common Stock and any related Transfer of shares of Common
Stock in connection therewith (x) deemed to occur upon the “cashless” or “net”
exercise of such options or warrants or (y) for the purpose of paying the exercise price
of such options or warrants or for paying taxes due as a result of the exercise of such options
or warrants, the vesting of such options or stock awards, or as a result of the vesting of
such shares of Common Stock, it being understood that all shares of Common Stock received
upon such exercise, vesting or transfer will remain subject to the restrictions of this Agreement
during the Lock-Up Period;
(n) Transfers
to the Company pursuant to any contractual arrangement in effect upon the consummation of
the Business Combination that provides for the repurchase by the Company or forfeiture of
Common Stock or other securities convertible into, or exercisable, redeemable or exchangeable
for, Common Stock in connection with the termination of the Securityholder’s service
to the Company;
(o) the
entry, by the Securityholder, at any time after the consummation of the Business Combination,
of any trading plan providing for the sale of shares of Common Stock by the Securityholder,
which trading plan meets the requirements of Rule 10b5-1(c) under the Exchange Act; provided,
however, that such plan does not provide for, or permit, the sale of any shares of
Common Stock during the Lock-Up Period and no public announcement or filing is voluntarily
made or required regarding such plan during the Lock-Up Period;
(p) Transfers
in the event of the completion of a liquidation, merger, stock exchange, reorganization or
other similar transaction that results in all of the Company’s securityholders having
the right to exchange their shares of Common Stock for cash, securities or other property;
and
(q) Transfers
to satisfy any U.S. federal, state, or local income tax obligations of a Securityholder (or
its direct or indirect owners) arising from such Securityholder’s ownership (including
prior to and after the Business Combination) of the Lock-Up Shares or any interests in Legacy
Elroy, in each case solely and to the extent necessary to cover any tax liability as a direct
result of such ownership of the Lock-Up Shares or any interests in Legacy Elroy.
provided,
however, that (A) in the case of clauses (a) through (k), as a prerequisite to such Transfer, such permitted transferee(s) must enter
into joinder to this Agreement, substantially in the form of Exhibit A hereto, in order to become a “Securityholder”
for purposes of this Agreement. For purposes of this Section 2, “immediate family” shall mean a spouse, domestic partner,
child (including by adoption), father, mother, brother or sister of the Securityholder, and lineal descendant (including by adoption)
of the Securityholder or of any of the foregoing persons.
3
3.
Termination. This Agreement shall terminate upon the earlier of (i) the expiration of the Lock-Up Period, (ii) the closing of
a merger, liquidation, stock exchange, reorganization or other similar transaction after the date hereof that results in all of the public
stockholders of the Company having the right to exchange their shares of Common Stock for cash securities or other property and (iii)
the liquidation of the Company.
4.
Prohibited Transfers. In furtherance of the foregoing, the Company, and any duly appointed transfer agent for the registration
or transfer of the securities described therein, are hereby authorized to decline to make any transfer of securities if such transfer
would constitute a violation or breach of this Agreement.
5.
Amendment. This Agreement may be amended, supplemented or modified only by execution of a written instrument signed by the Company
and the Securityholders holding a majority of the aggregate number of shares of Common Stock then held by all Securityholders as to which
this Agreement has not been terminated, executed in the same manner as this Agreement and which makes reference to this Agreement.
6.
Entire Agreement. This Agreement and the documents or instruments referred to herein embody the entire agreement and understanding
of the parties hereto in respect of the subject matter contained herein. There are no restrictions, promises, representations, warranties,
covenants or undertakings, other than those expressly set forth or referred to herein or the documents or instruments referred to herein,
which collectively supersede all prior agreements and the understandings among the parties hereto with respect to the subject matter
contained herein.
7.
Binding Effect; Assignment. This Agreement and all of the provisions hereof shall be binding upon and inure to the benefit of
the parties hereto and their respective successors and permitted assigns. This Agreement shall not be assigned by operation of Law or
otherwise without the prior written consent of the parties hereto, and any assignment without such consent shall be null and void; provided
that no such assignment shall relieve the assigning party of its obligations hereunder.
8.
Governing Law. This Agreement, and all claims or causes of action based upon, arising out of, or related to this Agreement or the
transactions contemplated hereby, shall be governed by, and construed in accordance with, the Laws of the State of Delaware, without
giving effect to principles or rules of conflict of Laws to the extent such principles or rules would require or permit the application
of Laws of another jurisdiction.
9.
Jurisdiction. Any Legal Proceeding based upon, arising out of or related to this Agreement or the transactions contemplated hereby
must be brought in the Court of Chancery of the State of Delaware (or, to the extent such court does not have jurisdiction, in the United
States District Court for the District of Delaware and to the extent such court does not have subject matter jurisdiction, the Superior
Court of the State of Delaware), and each of the parties irrevocably (i) submits to the exclusive jurisdiction of each such court in
any such Legal Proceeding, (ii) waives any objection it may now or hereafter have to personal jurisdiction, venue or to convenience of
forum, (iii) agrees that all claims in respect of the Legal Proceeding shall be heard and determined only in any such court, and (iv)
agrees not to bring any Legal Proceeding arising out of or relating to this Agreement or the transactions contemplated hereby in any
other court. Nothing herein contained shall be deemed to affect the right of any party to serve process in any manner permitted by Law
or to commence Legal Proceedings or otherwise proceed against any other party in any other jurisdiction, in each case, to enforce judgments
obtained in any Legal Proceeding, suit or proceeding brought pursuant to this Section 9.
4
10.
WAIVER OF JURY TRIAL. EACH PARTY ACKNOWLEDGES AND AGREES THAT ANY CONTROVERSY WHICH MAY ARISE UNDER THIS AGREEMENT AND THE TRANSACTIONS
CONTEMPLATED HEREBY IS LIKELY TO INVOLVE COMPLICATED AND DIFFICULT ISSUES, AND THEREFORE EACH SUCH PARTY HEREBY IRREVOCABLY, UNCONDITIONALLY
AND VOLUNTARILY WAIVES ANY RIGHT SUCH PARTY MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY ACTION, SUIT OR PROCEEDING DIRECTLY OR INDIRECTLY
ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY OF THE TRANSACTIONS CONTEMPLATED HEREBY.
11.
Counterparts. This Agreement (and any joinder to this Agreement) may be executed and delivered (including by facsimile or other
electronic transmission) in one or more counterparts, and by the different parties hereto in separate counterparts, each of which when
executed shall be deemed to be an original but all of which taken together shall constitute one and the same agreement.
12.
Severability. In case any provision in this Agreement shall be held invalid, illegal or unenforceable in a jurisdiction, such
provision shall be modified or deleted, as to the jurisdiction involved, only to the extent necessary to render the same valid, legal
and enforceable, and the validity, legality and enforceability of the remaining provisions hereof shall not in any way be affected or
impaired thereby nor shall the validity, legality or enforceability of such provision be affected thereby in any other jurisdiction.
Upon such determination that any term or other provision is invalid, illegal or incapable of being enforced, the parties will substitute
for any invalid, illegal or unenforceable provision a suitable and equitable provision that carries out, so far as may be valid, legal
and enforceable, the intent and purpose of such invalid, illegal or unenforceable provision.
13.
Liability. The liability of any Securityholder hereunder is several (and not joint). Notwithstanding any other provision of this
Agreement, in no event will any Securityholder be liable for any other Securityholder’s breach of such other Securityholder’s
obligations under this Agreement.
[Remainder
of page intentionally left blank]
5
IN
WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date first above written.
[ELROY AIR, INC.]2
By:
Name:
Title:
2 NTD:
To be name of public company following deSPAC transaction.
[Signature
Page to Lock-Up Agreement]
IN
WITNESS WHEREOF, the parties hereto have duly executed this Agreement as of the date first above written.
SECURITYHOLDERS:
[ ● ]
By:
Name:
Title:
[Signature
Page to Lock-Up Agreement]
SCHEDULE
I
SECURITYHOLDERS
[
● ]3
3 To
be updated at closing of the business combination to include each of the following holders
of equity securities in the Company who will receive, or would receive upon exercise of the
Exchanged Options, at least 1% of the Aggregate Consideration in the Business Combination:
(i) executive officers and directors of the combined company (excluding the directors designated
by SPAC who will sign a lock-up agreement in the form of the Sponsor Lock-Up Agreement and
subject to the parenthetical to clause (ii)) and (ii) all Legacy Elroy securityholders (excluding
the pre-funded PIPE investors with respect to the Series A Preferred Stock and Series A Preferred
Investor Warrants received in exchange for the pre-funded PIPE securities).
EXHIBIT
A
JOINDER
TO LOCKUP AGREEMENT
[
● ], 20 ___
Reference
is made to the Lockup Agreement, dated as of [ ● ], by and among [ ● ] (the “Company”) and the
Securityholders (as defined therein) from time to time party thereto (as amended, supplemented or otherwise modified from time to time,
the “Lockup Agreement”). Capitalized terms used but not otherwise defined herein shall have the meanings ascribed
to such terms in the Lockup Agreement.
Each
of the Company and the undersigned holder of equity interests in the Company (the “New Securityholder”) agrees
that this Joinder to the Lockup Agreement (this “Joinder”) is being executed and delivered for good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged.
The
New Securityholder hereby agrees to and does become party to the Lockup Agreement as a Securityholder. This Joinder shall serve as a
counterpart signature page to the Lockup Agreement and by executing below, the New Securityholder is deemed to have executed the Lockup
Agreement with the same force and effect as if originally named a party thereto.
This
Joinder may be executed and delivered (including by facsimile or other electronic transmission) in one or more counterparts, and by the
different parties hereto in separate counterparts, each of which when executed shall be deemed to be an original but all of which taken
together shall constitute one and the same agreement.
[Remainder
of Page Intentionally Left Blank.]
IN
WITNESS WHEREOF, the undersigned have duly executed this Joinder as of the date first set forth above.
[ ● ]
By:
Name:
Title:
NEW SECURITYHOLDER:
[ ● ]
By:
Name:
Title:
[Signature
Page to Joinder to Lock-Up Agreement]
EX-10.5 — FORM OF AMENDED AND RESTATED REGISTRATION RIGHTS AGREEMENT
EX-10.5
Filename: ea029643801ex10-5.htm · Sequence: 9
Exhibit 10.5
FORM
OF
AMENDED AND RESTATED
REGISTRATION
RIGHTS AGREEMENT
THIS
AMENDED AND RESTATED REGISTRATION RIGHTS AGREEMENT (this “Agreement”), dated as of [●], 2026, is made
and entered into by and among Elroy Air, Inc., a Delaware corporation (formerly known as Inflection Point Acquisition Corp. VII, a Cayman
Islands exempted company, prior to the Domestication (as defined herein)) (the “Company”), Columbus Circle
2 Sponsor Corporation LLC, a Delaware limited liability company (the “Sponsor”), the members of the Sponsor
identified on the signature pages hereto under “Other Sponsor Holders” (such members, together with the Sponsor, the “Sponsor
Holders”), each of the undersigned parties listed on the signature page hereto under “PIPE Holders” (the “PIPE
Holders”), each of the undersigned parties listed on the signature page hereto under “Elroy Holders” (the “Elroy
Holders”) and each of the undersigned parties listed on the signature page hereto under “Other Holders” (the
“Other Holders” and each such party, together with the Sponsor, the Sponsor Holders, the PIPE Holders, the
Elroy Holders and any Person who hereafter becomes a party to this Agreement pursuant to Section 5.2, a “Holder”
and collectively the “Holders”).
RECITALS
WHEREAS,
the Company and certain Sponsor Holders are party to that certain Registration Rights Agreement, dated as of February 10, 2026 (the “Original
RRA”);
WHEREAS,
the Company is party to that certain Business Combination Agreement, dated as of [●], 2026 (as the same may be amended, restated,
amended and restated, supplemented or otherwise modified from time to time, the “Business Combination Agreement”),
by and among the Company, [Merger Sub], a Delaware corporation (“Merger Sub”) and Elroy Air, Inc., a Delaware
corporation (“Legacy Elroy Air”);
WHEREAS,
prior to the date hereof and subject to the conditions of the Business Combination Agreement, the Company transferred by way of continuation
to and domesticated as a Delaware corporation in accordance with Section 388 of the Delaware General Corporation Law, as amended, and
the Companies Act (as revised) of the Cayman Islands (the “Domestication”);
WHEREAS,
prior to the Domestication, (a) the Sponsor owned, in aggregate, (i) 7,666,667 Class B ordinary shares of the Company, (ii) 265,000
Class A ordinary shares of the Company, and (iii) 83,333 Cayman private placement warrants of the Company, each exercisable for one Class
A ordinary share of the Company at an exercise price of $11.50 per share and (b) Cohen & Company Capital Markets, a division of Cohen
& Company Securities, LLC and Clear Street LLC collectively own (i) 400,000 Class A ordinary shares of the Company and (ii) 133,333
Cayman private placement warrants of the Company, each exercisable for one Class A ordinary share of the Company at an exercise price
of $11.50 per share;
WHEREAS,
(i) immediately prior to the Domestication, each then issued and outstanding Class B ordinary share of the Company was converted on a
one-for-one basis into a Class A ordinary share of the Company and (ii) in connection with the Domestication, (x) each then issued and
outstanding Class A ordinary share of the Company was converted automatically, on a one-for-one basis, into a share of common stock of
the Company, par value $0.0001 per share (the “Common Stock”); (y) each then issued and outstanding warrant
of the Company converted automatically into a warrant to acquire one (1) share of Common Stock (each, a “Domesticated Purchaser
Warrant”), pursuant to the Warrant Agreement; and (z) each then issued and outstanding unit of the Company was cancelled
and thereafter entitled the holder thereof to one (1) share of Common Stock and one-third (1/3) of one Domesticated Purchaser Warrant,
with any fractional shares of Common Stock to be issued in connection with such separation rounded down to the nearest whole share;
WHEREAS,
pursuant to the Business Combination Agreement, on the date hereof, Merger Sub merged with and into Legacy Elroy Air, with Legacy
Elroy Air continuing as the surviving corporation and as a direct, wholly owned subsidiary of the Company (the “Business
Combination”);
WHEREAS,
on the date hereof, in connection with the Closing of the Business Combination, the Company issued [●] shares of Common Stock
to the Elroy Holders;
WHEREAS,
pursuant to the Business Combination Agreement, on the date hereof, the holders of Legacy Elroy Air’s Pre-Funded Convertible Notes
received shares of 12% Series A Cumulative Convertible Preferred Stock, par value $0.0001 per share, of the Company (the “Series
A Preferred Stock”) in exchange for such Pre-Funded Convertible Notes;
WHEREAS,
pursuant to the Business Combination Agreement, on the date hereof, the holders of Legacy Elroy Air’s Company Pre-Funded Investor
Warrants received warrants to purchase Common Stock (the “Series A Investor Warrants”) in exchange for such
Legacy Elroy Air’s Company Pre-Funded Investor Warrants;
WHEREAS,
on the date hereof, the Company issued an additional [●] shares of Series A Preferred Stock and additional Series A Investor Warrants
to purchase an aggregate of [●] shares of Common Stock (subject to adjustment) to certain investors pursuant to that certain Securities
Purchase Agreement, dated as of [●], 2026, by and among the Company and such investors (the “Series A SPA”)
or other securities purchase agreements regarding the Series A Preferred Stock and Series A Investor Warrants;
WHEREAS,
pursuant to Section 5.5 of the Original RRA, the provisions, covenants and conditions set forth therein may be amended or modified upon
the written consent of the Company and the Holders (as defined in the Original RRA) (the “Original Holders”)
of at least a majority in interest of the Registrable Securities (as defined in the Original RRA) (the “Original Registrable
Securities”) at the time in question, and the Sponsor Holders party hereto are Original Holders of at least a majority
in interest of the Original Registrable Securities as of the date hereof; and
WHEREAS,
in connection with the consummation of the transactions described above, the Company and the Original Holders desire to amend and restate
the Original RRA in its entirety as set forth herein, and the Company and the Holders desire to enter into this Agreement, pursuant to
which the Company shall grant the Holders certain registration rights with respect to the Registrable Securities (as defined below) on
the terms and conditions set forth in this Agreement.
NOW,
THEREFORE, in consideration of the representations, covenants and agreements contained herein, and certain other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto, intending to be legally bound, hereby
agree as follows:
ARTICLE
I
DEFINITIONS
1.1
Definitions. The terms defined in this Article I shall, for all purposes of this Agreement, have the respective meanings
set forth below:
“Additional
Holder” shall have the meaning given in Section 5.11.
2
“Additional
Holder Common Stock” shall have the meaning given in Section 5.11.
“Adverse
Disclosure” shall mean any public disclosure of material non-public information, which disclosure, in the good faith judgment
of the Chief Executive Officer or Chief Financial Officer of the Company or the Board, in each case, after consultation with counsel
to the Company, (i) would be required to be made in any Registration Statement or Prospectus in order for the applicable Registration
Statement or Prospectus not to contain any untrue statement of a material fact or omit to state a material fact required to be stated
therein or necessary to make the statements contained therein (in the case of any prospectus and any preliminary prospectus, in the light
of the circumstances under which they were made) not misleading, (ii) would not be required to be made at such time if the Registration
Statement were not being filed, declared effective or used, as the case may be, and (iii) the Company has a bona fide business
purpose for not making such information public.
“Agreement”
shall have the meaning given in the Preamble hereto.
“Board”
shall mean the board of directors of the Company.
“Business
Combination Agreement” shall have the meaning given in the Recitals hereto.
“Business
Day” means a day other than a Saturday, Sunday or other day on which commercial banks in New York, New York are authorized
or required by Law to close.
“Closing”
shall have the meaning given in the Business Combination Agreement.
“Closing
Date” shall have the meaning given in the Business Combination Agreement.
“Commission”
shall mean the U.S. Securities and Exchange Commission.
“Common
Stock” shall have the meaning given in the Recitals hereto.
“Company”
shall have the meaning given in the Preamble hereto and includes the Company’s successors by recapitalization, merger, consolidation,
spin-off, reorganization or similar transaction.
“Competing
Registration Rights” shall have the meaning given in Section 5.7.
“Demanding
Holder” shall have the meaning given in Section 2.1.4.
“Exchange
Act” shall mean the U.S. Securities Exchange Act of 1934, as it may be amended from time to time.
“Elroy
Holders” shall have the meaning given in the Preamble hereto.
“Elroy
Holders Lock-Up Agreement” means the lock-up agreement, dated [●], entered into by the Company and the Elroy Holders.
“FINRA”
shall mean the Financial Industry Regulatory Authority, Inc.
“Floor
Price” shall mean $5.00.
“Form
S-1 Shelf” shall have the meaning given in Section 2.1.1.
“Form
S-3 Shelf” shall have the meaning given in Section 2.1.1.
3
“Governmental
Authority” means any federal, state, local, foreign or other governmental, quasi-governmental or administrative body, instrumentality,
department or agency or any court, tribunal, administrative hearing body, arbitration panel, commission, or other similar dispute-resolving
panel or body.
“Holder
Information” shall have the meaning given in Section 4.1.2.
“Holders”
shall have the meaning given in the Preamble hereto, for so long as such Person holds any Registrable Securities.
“Joinder”
shall have the meaning given in Section 5.11.
“Law”
shall mean any federal, state, local, municipal, foreign or other law, statute, legislation, principle of common law, ordinance, code,
edict, decree, proclamation, treaty, convention, rule, regulation, directive, requirement, writ, injunction, settlement, order or consent
that is or has been issued, enacted, adopted, passed, approved, promulgated, made, implemented or otherwise put into effect by or under
the authority of any Governmental Authority.
“Legacy
Elroy Air” shall have the meaning given in the Recitals hereto.
“Legal
Proceeding” means any notice of noncompliance or violation, or any claim, demand, charge, action, suit, litigation, audit,
settlement, complaint, stipulation, assessment or arbitration, or any request (including any request for information), inquiry, hearing,
proceeding or investigation, by or before any Governmental Authority.
“Lock-Up
Agreements” means the Elroy Holders Lock-Up Agreement and the Sponsor Holder Lock-Up Agreement, collectively.
“Lock-Up
Period” shall mean (a) with respect to the Sponsor Holders and their respective Permitted Transferees, the lock-up period
specified with respect to a party in the Sponsor Holder Lock-Up Agreement, (b) with respect to the Elroy Holders and their respective
Permitted Transferees, the lock-up period specified with respect to a party in the Elroy Holders Lock-Up Agreement and (c) with respect
to the Other Holders and their respective Permitted Transferees, [●].
“Maximum
Number of Securities” shall have the meaning given in Section 2.1.5.
“Minimum
Takedown Threshold” shall have the meaning given in Section 2.1.4.
“Misstatement”
shall mean an untrue statement of a material fact or an omission to state a material fact required to be stated in a Registration Statement
or Prospectus, or necessary to make the statements in a Registration Statement or Prospectus (in the case of a Prospectus, in the light
of the circumstances under which they were made) not misleading.
“Original
Registrable Securities” shall have the meaning given in the Recitals hereto.
“Original
RRA” shall have the meaning given in the Recitals hereto.
“Other
Coordinated Offering” shall have the meaning given in Section 2.4.1.
4
“Permitted
Transferees” means persons to whom a holder of Registrable Securities is permitted to transfer such Registrable Securities
prior to the expiration of the applicable Lock-Up Period pursuant to the applicable Lock-Up Agreement.
“Person”
means an individual, corporation, partnership (including a general partnership, limited partnership or limited liability partnership),
limited liability company, association, trust or other entity or organization, including a government, domestic or foreign, or political
subdivision thereof, or an agency or instrumentality thereof.
“Piggyback
Registration” shall have the meaning given in Section 2.2.1.
“PIPE
Transferees” means persons to whom a PIPE Holder of Registrable Securities (or its transferee) transfers its Registrable
Securities.
“Prospectus”
shall mean the prospectus included in any Registration Statement, as supplemented by any and all prospectus supplements and as amended
by any and all post-effective amendments and including all material incorporated by reference in such prospectus.
“Registrable
Security” shall mean (i) any outstanding shares of Common Stock held by a Holder immediately following the Closing, (ii)
any shares of Common Stock that may be acquired by Holders upon the exercise, conversion or redemption of any other security of the Company
or other right to acquire Common Stock held by or issuable to a Holder immediately following the Closing, (iii) any outstanding shares
of Common Stock or any other equity security of the Company held by a Holder following the date hereof to the extent that such securities
are “restricted securities” (as defined in Rule 144) or are otherwise held by an “affiliate” (as defined in Rule
144) of the Company and (iv) any other equity security of the Company issued or issuable with respect to any securities referenced in
clause (i), (ii) or (iii) above by way of a stock dividend or stock split or in connection with a combination of
shares, recapitalization, merger, consolidation, spin-off, reorganization or similar transaction; provided, however, that, as
to any particular Registrable Security, such securities shall cease to be Registrable Securities upon the earliest to occur of the following
events: (i) a Registration Statement with respect to the sale of such securities shall have become effective under the Securities Act
and such securities shall have been sold, transferred, disposed of or exchanged in accordance with such Registration Statement by the
applicable Holder to a Person that is not an “affiliate” (as defined in Rule 144) of the Company and new certificates for
such securities not bearing (or book-entry positions not subject to) a legend restricting further transfer shall have been delivered
by the Company and subsequent public distribution of such securities shall not require registration under the Securities Act; (ii) such
securities shall have been otherwise transferred, new certificates for such securities not bearing (or book-entry positions not subject
to) a legend restricting further transfer shall have been delivered by the Company and subsequent public distribution of such securities
shall not require registration under the Securities Act; (iii) such securities shall have ceased to be outstanding; (iv) such securities
may be sold by a Holder without registration pursuant to Rule 144 (but with no volume or other restrictions or limitations including
as to manner or timing of sale or current public information requirements applicable to such Holder); and (v) such securities have been
sold to, or through, a broker, dealer or underwriter in a public distribution or other public securities transaction.
“Registration”
shall mean a registration, including any related Shelf Takedown, effected by preparing and filing a Registration Statement, Prospectus
or similar document in compliance with the requirements of the Securities Act, and the applicable rules and regulations promulgated thereunder,
and such registration statement becoming effective.
5
“Registration
Expenses” shall mean the documented, out-of-pocket expenses of a Registration, including, without limitation, the following:
(A) all
registration, listing and filing fees (including fees with respect to filings required to
be made with FINRA) and any national securities exchange on which the Common Stock is then
listed;
(B) fees
and expenses of compliance with securities or blue sky laws (including reasonable fees and
disbursements of counsel for the Underwriters in connection with blue sky qualifications
of Registrable Securities);
(C) printing,
messenger, telephone and delivery expenses;
(D) reasonable
fees and disbursements of counsel for the Company;
(E) reasonable
fees and disbursements of all independent registered public accountants of the Company incurred
specifically in connection with such Registration; and
(F) reasonable
fees and expenses of one (1) legal counsel selected by the majority in interest of the Demanding
Holders in an Underwritten Offering or Other Coordinated Offering.
“Registration
Statement” shall mean any registration statement that covers Registrable Securities pursuant to the provisions of this
Agreement, including any Shelf, and, in each case, including the Prospectus included in such registration statement, amendments (including
post-effective amendments) and supplements to such registration statement and all exhibits to, and all material incorporated by reference
in, such registration statement.
“Requesting
Holders” shall have the meaning given in Section 2.1.5.
“Rule
144” shall mean Rule 144 promulgated under the Securities Act, as amended from time to time, or any similar successor rule
thereto that may be promulgated by the Commission.
“Securities
Act” shall mean the U.S. Securities Act of 1933, as amended from time to time.
“Series
A Investor Warrants” shall have the meaning given in the Recitals hereto.
“Series
A Preferred Stock” shall have the meaning given in the Recitals hereto.
“Shelf”
shall mean the Form S-1 Shelf, the Form S-3 Shelf, or any Subsequent Shelf Registration, as the case may be.
“Shelf
Registration” shall mean a registration of securities pursuant to a registration statement filed with the Commission in
accordance with and pursuant to Rule 415 promulgated under the Securities Act, as amended from time to time, or any similar successor
rule thereto that may be promulgated by the Commission.
“Shelf
Takedown” shall mean an Underwritten Shelf Takedown or any proposed transfer or sale using a Registration Statement, including
a Piggyback Registration.
“Sponsor”
shall have the meaning given in the Preamble hereto.
“Sponsor
Holders” shall have the meaning given in the Preamble hereto.
“Sponsor
Holders Lock-Up Agreement” means the lock-up agreement, dated [●], entered into by the Company and the Sponsor Holders.
6
“Sponsor
Majority Holders” shall mean the Sponsor Holders holding in the aggregate a majority of the Registrable Securities then
held by the Sponsor Holders.
“Subsequent
Shelf Registration” shall have the meaning given in Section 2.1.2.
“Transfer”
shall mean the (i) sale or assignment of, offer to sell, contract or agreement to sell, hypothecation, pledge, grant of any option to
purchase or otherwise dispose of or agreement to dispose of, directly or indirectly, or establishment or increase of a put equivalent
position or liquidation with respect to or decrease of a call equivalent position within the meaning of Section 16 of the Exchange Act
with respect to, any security, (ii) entry into any swap or other arrangement that transfers to another, in whole or in part, any of the
economic consequences of ownership of any security, whether any such transaction is to be settled by delivery of such securities, in
cash or otherwise, or (iii) public announcement of any intention to effect any transaction specified in clause (i) or (ii).
“Underwriter”
shall mean a securities dealer who purchases any Registrable Securities as principal in an Underwritten Offering and not as part of such
dealer’s market-making activities.
“Underwritten
Lock-Up Period” shall have the meaning given in Section 2.3.
“Underwritten
Registration” or “Underwritten Offering” shall mean a Registration in which securities of the
Company are sold to an Underwriter in a firm commitment underwriting for distribution to the public.
“Underwritten
Shelf Takedown” shall have the meaning given in Section 2.1.4.
“Warrant
Agreement” means the Warrant Agreement, dated as of February 10, 2026, between the Company and Continental Stock Transfer
& Trust Company.
“Withdrawal
Notice” shall have the meaning given in Section 2.1.6.
“Yearly
Limit” shall have the meaning given in Section 2.1.4.
ARTICLE
II
REGISTRATIONS AND OFFERINGS
2.1
Shelf Registration.
2.1.1
Filing. The Company shall, subject to Section 3.4, submit or file within 30 days of the Closing Date a Registration Statement
for a Shelf Registration on Form S-1 (the “Form S-1 Shelf”) or, if the Company is eligible to use a Registration
Statement on Form S-3, a Shelf Registration on Form S-3 (the “Form S-3 Shelf”), in each case, covering the
resale of all Registrable Securities (determined as of two (2) business days prior to such submission or filing and assuming that (i)
all shares of Series A Preferred Stock are converted into shares of Common Stock at a conversion price equal to the Floor Price and taking
into account payment-in-kind dividends for at least three years from the date of such submission or filing and (ii) all Series A Investor
Warrants are exercised in full at an exercise price equal to the Floor Price) on a delayed or continuous basis in each case, without
giving effect to any limitations on conversion or exercise, and shall use its commercially reasonable efforts to have such Shelf declared
effective as soon as reasonably practicable after the filing thereof, but no later than the earlier of (a) the 90th calendar day following
the filing date thereof if the Commission notifies the Company that it will “review” the Registration Statement and (b) the
tenth (10th) business day after the date the Company is notified (orally or in writing, whichever is earlier) by the Commission
that the Registration Statement will not be “reviewed” or will not be subject to further review. Such Shelf shall provide
for the resale of the Registrable Securities included therein pursuant to any method or combination of methods legally available to,
and requested by, any Holder named therein. Subject to Sections 2.1.3 and 3.4, the Company shall maintain a Shelf in accordance
with the terms hereof, and shall prepare and file with the Commission such amendments, including post-effective amendments, and supplements
as may be necessary to keep a Shelf continuously effective, available for use to permit the Holders named therein to sell their Registrable
Securities included therein and in compliance with the provisions of the Securities Act until such time as there are no longer any Registrable
Securities. In the event the Company files a Form S-1 Shelf, the Company shall use its commercially reasonable efforts to convert the
Form S-1 Shelf (and any Subsequent Shelf Registration) to a Form S-3 Shelf as soon as reasonably practicable after the Company is eligible
to use Form S-3.
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2.1.2
Subsequent Shelf Registration. If any Shelf ceases to be effective under the Securities Act for any reason at any time while Registrable
Securities are still outstanding, the Company shall, subject to Section 3.4, use its commercially reasonable efforts to, as promptly
as is reasonably practicable, cause such Shelf to again become effective under the Securities Act (including using its commercially reasonable
efforts to obtain the prompt withdrawal of any order suspending the effectiveness of such Shelf), and shall use its commercially reasonable
efforts to, as promptly as is reasonably practicable, amend such Shelf in a manner reasonably expected to result in the withdrawal of
any order suspending the effectiveness of such Shelf or file an additional registration statement as a Shelf Registration (a “Subsequent
Shelf Registration”) registering the resale of all Registrable Securities under such Shelf (determined as of two (2) business
days prior to such filing and assuming that (i) all shares of Series A Preferred Stock are converted into shares of Common Stock at a
conversion price equal to the Floor Price and taking into account payment-in-kind dividends for at least three years from the date of
such submission or filing and (ii) all Series A Investor Warrants are exercised in full at an exercise price equal to the Floor Price),
and pursuant to any method or combination of methods legally available to, and requested by, any Holder named therein. If a Subsequent
Shelf Registration is filed, the Company shall use its commercially reasonable efforts to (i) cause such Subsequent Shelf Registration
to become effective under the Securities Act as promptly as is reasonably practicable after the filing thereof (it being agreed that
the Subsequent Shelf Registration shall be an automatic shelf registration statement (as defined in Rule 405 promulgated under the Securities
Act) if the Company is a well-known seasoned issuer (as defined in Rule 405 promulgated under the Securities Act) at the most recent
applicable eligibility determination date) and (ii) keep such Subsequent Shelf Registration continuously effective, available for use
to permit the Holders named therein to sell their Registrable Securities included therein and in compliance with the provisions of the
Securities Act until such time as there are no longer any Registrable Securities. Any such Subsequent Shelf Registration shall be on
Form S-3 to the extent that the Company is eligible to use such form. Otherwise, such Subsequent Shelf Registration shall be on another
appropriate form.
2.1.3
New Registrable Securities. Subject to Section 3.4, in the event that any Holder holds Registrable Securities that are
not registered for resale on a delayed or continuous basis, the Company shall, upon the written request of such Holder, promptly use
its commercially reasonable efforts to cause the resale of such Registrable Securities to be covered by either, at the Company’s
option, any then-available Shelf (including by means of a post-effective amendment) or a Subsequent Shelf Registration and cause the
same to become effective as soon as practicable after such filing and such Shelf or Subsequent Shelf Registration shall be subject to
the terms hereof; provided, however, that the Company shall only be required to cause such Registrable Securities to be so covered
twice per calendar year for each of (i) the Sponsor Holders, collectively, (ii) the Elroy Holders, collectively, (iii) the PIPE Holders,
collectively, and (iv) the Other Holders, collectively.
2.1.4
Requests for Underwritten Shelf Takedowns. Subject to Section 3.4, at any time and from time to time when an effective
Shelf is on file with the Commission, any Holder (a “Demanding Holder”) may request to sell all or any portion
of its Registrable Securities in an Underwritten Offering or other coordinated offering that is registered pursuant to the Shelf (each,
an “Underwritten Shelf Takedown”); provided that the Company shall only be obligated to effect an Underwritten
Shelf Takedown if such offering shall include Registrable Securities proposed to be sold by the Demanding Holder, either individually
or together with other Demanding Holders, with a total offering price reasonably expected to exceed, in the aggregate, $25 million (the
“Minimum Takedown Threshold”). All requests for Underwritten Shelf Takedowns shall be made by giving written
notice to the Company, which shall specify the approximate number of Registrable Securities proposed to be sold in the Underwritten Shelf
Takedown. Subject to Section 2.4.4, the Company shall have the right to select the Underwriters for such offering (which shall
consist of one or more reputable nationally recognized investment banks), subject to the initial Demanding Holder’s prior approval
(which approval shall not be unreasonably withheld, conditioned or delayed). Subject to Section 2.4.6, each of (i) the Sponsor
Holders, collectively, (ii) the Elroy Holders, collectively, (iii) the PIPE Holders, and (iv) the Other Holders, collectively, may demand
Underwritten Shelf Takedowns pursuant to this Section 2.1.4 (x) not more than two (2) times in any 12-month period (the “Yearly
Limit”). Notwithstanding anything to the contrary in this Agreement, the Company may effect any Underwritten Offering pursuant
to any then-effective Registration Statement, including a Form S-3, that is then available for such offering.
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2.1.5
Reduction of Underwritten Offering. If the managing Underwriter or Underwriters in an Underwritten Shelf Takedown, in good faith,
advises the Company, the Demanding Holders and the Holders requesting piggy back rights pursuant to this Agreement with respect to such
Underwritten Shelf Takedown (the “Requesting Holders”) (if any) in writing that the dollar amount or number
of Registrable Securities that the Demanding Holders and the Requesting Holders (if any) desire to sell, taken together with all other
shares of Common Stock or other equity securities that the Company desires to sell and all other shares of Common Stock or other equity
securities, if any, that have been requested to be sold in such Underwritten Offering pursuant to separate written contractual piggy-back
registration rights held by any other stockholders who desire to sell, exceeds the maximum dollar amount or maximum number of equity
securities that can be sold in the Underwritten Offering without adversely affecting the proposed offering price, the timing, the distribution
method or the probability of success of such offering (such maximum dollar amount or maximum number of such securities, as applicable,
the “Maximum Number of Securities”), then the Company shall include in such Underwritten Offering, before including
any shares of Common Stock or other equity securities proposed to be sold by Company or by other holders of Common Stock or other equity
securities, the Registrable Securities of the Demanding Holders and the Requesting Holders (if any) (pro rata, as nearly as practicable,
based on the respective number of Registrable Securities that each Demanding Holder and Requesting Holder (if any) has requested be included
in such Underwritten Shelf Takedown and the aggregate number of Registrable Securities that the Demanding Holders and Requesting Holders
(if any) have requested be included in such Underwritten Shelf Takedown) that can be sold without exceeding the Maximum Number of Securities.
To facilitate the allocation of Registrable Securities in accordance with the above provisions, the Company or the Underwriters may round
the number of shares allocated to any Holder to the nearest 10 Registrable Securities.
2.1.6
Underwritten Shelf Takedown Withdrawal. Prior to the filing of the applicable “red herring” prospectus or prospectus
supplement used for marketing such Underwritten Shelf Takedown, a majority in interest of the Demanding Holders initiating an Underwritten
Shelf Takedown shall have the right to withdraw from such Underwritten Shelf Takedown for any or no reason whatsoever upon written notification
(a “Withdrawal Notice”) to the Company and the Underwriter or Underwriters (if any) of their intention to withdraw
from such Underwritten Shelf Takedown; provided that any other Demanding Holder(s) may elect to have the Company continue an Underwritten
Shelf Takedown if the Minimum Takedown Threshold would still be satisfied by the Registrable Securities proposed to be sold in the Underwritten
Shelf Takedown by the Demanding Holder(s). If withdrawn, a demand for an Underwritten Shelf Takedown shall constitute a demand for an
Underwritten Shelf Takedown by the withdrawing Demanding Holder for purposes of Section 2.1.4 and shall count toward the Yearly
Limit, unless either (i) the Demanding Holder(s) making the withdrawal has not previously withdrawn any Underwritten Shelf Takedown or
(ii) the Demanding Holder(s) making the withdrawal reimburses the Company for all Registration Expenses with respect to such Underwritten
Shelf Takedown (or, if there is more than one Demanding Holder, a pro rata portion of such Registration Expenses based on the
respective number of Registrable Securities that each Demanding Holder has requested be included in such Underwritten Shelf Takedown);
provided that, if any other Demanding Holder(s) elects to continue an Underwritten Shelf Takedown pursuant to the proviso in the
immediately preceding sentence, such Underwritten Shelf Takedown shall instead count as an Underwritten Shelf Takedown demanded by such
Demanding Holder(s) for purposes of Section 2.1.4 and shall count toward the Yearly Limit. Following the receipt of any Withdrawal
Notice, the Company shall promptly forward such Withdrawal Notice to any other Requesting Holders. Notwithstanding anything to the contrary
in this Agreement, the Company shall be responsible for the Registration Expenses incurred in connection with a Shelf Takedown prior
to its withdrawal under this Section 2.1.6, other than if a Demanding Holder elects to pay such Registration Expenses pursuant
to clause (ii) of the second sentence of this Section 2.1.6.
2.2
Piggyback Registration.
2.2.1
Piggyback Rights. If the Company or any Holder proposes to conduct a registered offering of, or if the Company proposes to file
a Registration Statement under the Securities Act with respect to the Registration of, equity securities, or securities or other obligations
exercisable or exchangeable for, or convertible into equity securities, for its own account or for the account of securityholders of
the Company (or by the Company and by the securityholders of the Company including, without limitation, an Underwritten Shelf Takedown
pursuant to Section 2.1), other than a Registration Statement (or any registered offering with respect thereto) (i) filed in connection
with any employee stock option or other benefit plan, (ii) for an exchange offer or offering of securities solely to the Company’s
existing stockholders, (iii) pursuant to a Registration Statement on Form S-4 (or similar form that relates to a transaction subject
to Rule 145 under the Securities Act or any successor rule thereto), (iv) for an offering of debt that is convertible into equity securities
of the Company, (v) for a dividend reinvestment plan, or (vi) a Block Trade or an Other Coordinated Offering (which shall be subject
to Section 2.4), then the Company shall give written notice of such proposed offering to all of the Holders of Registrable Securities
as soon as practicable but not less than ten days before the anticipated filing date of such Registration Statement or, in the case of
an Underwritten Offering pursuant to a Shelf Registration, the applicable “red herring” prospectus or prospectus supplement
used for marketing such offering, which notice shall (A) describe the amount and type of securities to be included in such offering,
the intended method(s) of distribution, and the name of the proposed managing Underwriter or Underwriters, if any, in such offering,
and (B) offer to all of the Holders of Registrable Securities the opportunity to include in such registered offering such number of Registrable
Securities as such Holders may request in writing within five (5) business days after receipt of such written notice (such Registration,
a “Piggyback Registration”). Subject to Section 2.2.2, the Company shall, in good faith, cause such
Registrable Securities to be included in such Piggyback Registration and, if applicable, shall use its commercially reasonable efforts
to cause the managing Underwriter or Underwriters of such Piggyback Registration to permit the Registrable Securities requested by the
Holders pursuant to this Section 2.2.1 to be included therein on the same terms and conditions as any similar securities of the
Company included in such registered offering and to permit the sale or other disposition of such Registrable Securities in accordance
with the intended method(s) of distribution thereof. The inclusion of any Holder’s Registrable Securities in a Piggyback Registration
shall be subject to such Holder’s agreement to enter into an underwriting agreement in customary form with the Underwriter(s) selected
for such Underwritten Offering by the Company.
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2.2.2
Reduction of Piggyback Registration. If the managing Underwriter or Underwriters in an Underwritten Offering that is to be a Piggyback
Registration, in good faith, advises the Company and the Holders of Registrable Securities participating in the Piggyback Registration
in writing that the dollar amount or number of shares of Common Stock or other equity securities that the Company or the Demanding Holders
desire to sell, taken together with (i) the shares of Common Stock or other equity securities, if any, as to which Registration or a
registered offering has been demanded pursuant to separate written contractual arrangements with Persons other than the Holders of Registrable
Securities hereunder, (ii) the Registrable Securities as to which Registration has been requested pursuant to this Section 2.2
and (iii) the shares of Common Stock or other equity securities, if any, as to which Registration or a registered offering has been requested
pursuant to separate written contractual piggy-back registration rights of Persons other than the Holders of Registrable Securities hereunder,
exceeds the Maximum Number of Securities, then:
(a)
if the Registration or registered offering is undertaken for the Company’s account, the Company shall include in any such Registration
or registered offering (A) first, the shares of Common Stock or other equity securities that the Company desires to sell, which can be
sold without exceeding the Maximum Number of Securities; (B) second, to the extent that the Maximum Number of Securities has not been
reached under the foregoing clause (A), the Registrable Securities of Holders exercising their rights to register their Registrable
Securities pursuant to Section 2.2.1, pro rata, as nearly as practicable, based on the respective number of Registrable
Securities that each Holder has requested be included in such Underwritten Offering and the aggregate number of Registrable Securities
that the Holders have requested to be included in such Underwritten Offering, which can be sold without exceeding the Maximum Number
of Securities; and (C) third, to the extent that the Maximum Number of Securities has not been reached under the foregoing clauses
(A) and (B), the shares of Common Stock or other equity securities, if any, as to which Registration or a registered offering
has been requested pursuant to separate written contractual piggy-back registration rights of Persons other than the Holders of Registrable
Securities hereunder, which can be sold without exceeding the Maximum Number of Securities;
(b)
if the Registration or registered offering is pursuant to a request by Persons other than the Holders of Registrable Securities, then
the Company shall include in any such Registration or registered offering (A) first, the shares of Common Stock or other equity securities,
if any, of such requesting Persons, other than the Holders of Registrable Securities, which can be sold without exceeding the Maximum
Number of Securities; (B) second, to the extent that the Maximum Number of Securities has not been reached under the foregoing clause
(A), the Registrable Securities of Holders exercising their rights to register their Registrable Securities pursuant to Section
2.2.1, pro rata, as nearly as practicable, based on the respective number of Registrable Securities that each Holder has requested
be included in such Underwritten Offering and the aggregate number of Registrable Securities that the Holders have requested to be included
in such Underwritten Offering, which can be sold without exceeding the Maximum Number of Securities; (C) third, to the extent that the
Maximum Number of Securities has not been reached under the foregoing clauses (A) and (B), the shares of Common Stock or
other equity securities that the Company desires to sell, which can be sold without exceeding the Maximum Number of Securities; and (D)
fourth, to the extent that the Maximum Number of Securities has not been reached under the foregoing clauses (A), (B) and
(C), the shares of Common Stock or other equity securities, if any, as to which Registration or a registered offering has been
requested pursuant to separate written contractual piggy-back registration rights of such Persons other than the Holders of Registrable
Securities hereunder, which can be sold without exceeding the Maximum Number of Securities; and
(c)
if the Registration or registered offering is pursuant to a request by Holder(s) of Registrable Securities pursuant to Section 2.1,
then the Company shall include in any such Registration or registered offering securities in the priority set forth in Section 2.1.5.
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2.2.3
Piggyback Registration Withdrawal. Any Holder of Registrable Securities (other than a Demanding Holder, whose right to withdraw
from an Underwritten Shelf Takedown, and related obligations, shall be governed by Section 2.1.6) shall have the right to withdraw
from a Piggyback Registration for any or no reason whatsoever upon written notification to the Company and the Underwriter or Underwriters
(if any) of his, her or its intention to withdraw from such Piggyback Registration prior to the effectiveness of the Registration Statement
filed with the Commission with respect to such Piggyback Registration or, in the case of a Piggyback Registration pursuant to a Shelf
Registration, the filing of the applicable “red herring” prospectus or prospectus supplement with respect to such Piggyback
Registration used for marketing such transaction. The Company (whether on its own good faith determination or as the result of a request
for withdrawal by Persons pursuant to separate written contractual obligations) may withdraw a Registration Statement filed with the
Commission in connection with a Piggyback Registration at any time prior to the effectiveness of such Registration Statement. Notwithstanding
anything to the contrary in this Agreement (other than Section 2.1.6), the Company shall be responsible for the Registration Expenses
incurred in connection with the Piggyback Registration prior to its withdrawal under this Section 2.2.3.
2.2.4
Unlimited Piggyback Registration Rights. For purposes of clarity, subject to Section 2.1.6, any Piggyback Registration
effected pursuant to Section 2.2 shall not be counted as a demand for an Underwritten Shelf Takedown under Section 2.1.4
and shall not count toward the Yearly Limit.
2.3
Market Stand-off. In connection with any Underwritten Offering of equity securities of the Company (other than a Block Trade or
Other Coordinated Offering), if requested by the managing Underwriter, each Holder that is an executive officer or director of the Company
or a Holder in excess of 5.0% of the then-outstanding Common Stock agrees that it shall not Transfer any shares of Common Stock or other
equity securities of the Company (other than those included in such offering pursuant to this Agreement), without the prior written consent
of the Company, during the 90-day period (or such shorter time agreed to by the managing Underwriters) beginning on the date of pricing
of such offering (the “Underwritten Lock-Up Period”), except (i) to Permitted Transferees, or, by a PIPE Holder,
to PIPE Transferees (ii) as expressly permitted by such lock-up agreement or (iii) in the event the Underwriters managing the offering
otherwise consent in writing. Each Holder agrees to execute a customary lock-up agreement in favor of the Underwriters to such effect
(in each case on substantially the same terms and conditions as all other Holders). The Company will not be obligated to undertake an
Underwritten Shelf Takedown during any Underwritten Lock-Up Period binding on the Holders, nor will the Company be obligated to include
in any Piggyback Registration any Registrable Securities that are then subject to a “lock-up” agreement.
2.4
Block Trades; Other Coordinated Offerings.
2.4.1
Notwithstanding any other provision of this Article II, but subject to Section 3.4, at any time and from time to time when
an effective Shelf is on file with the Commission, if a Demanding Holder wishes to engage in (a) an underwritten registered offering
not involving a “roadshow,” an offer commonly known as a “block trade” (a “Block Trade”)
or (b) an “at the market” or similar registered offering through a broker, sales agent or distribution agent, whether as
agent or principal, (an “Other Coordinated Offering”), in each case, either (x) with an anticipated aggregate
offering price reasonably expected to be at least $25 million or (y) with respect to all remaining Registrable Securities held by the
Demanding Holder, then such Demanding Holder only needs to notify the Company of the Block Trade or Other Coordinated Offering at least
five (5) Business Days prior to the day such offering is to commence and the Company shall as expeditiously as possible use its commercially
reasonable efforts to facilitate such Block Trade or Other Coordinated Offering; provided that the Demanding Holders representing
a majority of the Registrable Securities wishing to engage in the Block Trade or Other Coordinated Offering shall use commercially reasonable
efforts to work with the Company and any Underwriters, brokers, sales agents or placement agents prior to making such request in order
to facilitate preparation of the registration statement, prospectus and other offering documentation related to the Block Trade or Other
Coordinated Offering.
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2.4.2
Prior to the filing of the applicable “red herring” prospectus or prospectus supplement used in connection with a Block Trade
or Other Coordinated Offering, a majority-in-interest of the Demanding Holders initiating such Block Trade or Other Coordinated Offering
shall have the right to submit a Withdrawal Notice to the Company, the Underwriter or Underwriters (if any) and any brokers, sale agents
or placement agents (if any) of their intention to withdraw from such Block Trade or Other Coordinated Offering. Notwithstanding anything
to the contrary in this Agreement, the Company shall be responsible for the Registration Expenses incurred in connection with a Block
Trade or Other Coordinated Offering prior to its withdrawal under this Section 2.4.2.
2.4.3
Notwithstanding anything to the contrary in this Agreement, Section 2.2 shall not apply to a Block Trade or Other Coordinated
Offering initiated by a Demanding Holder pursuant to this Agreement.
2.4.4
The Demanding Holder in a Block Trade or Other Coordinated Offering shall have the right to select the Underwriters and any brokers,
sale agents or placement agents (if any) for such Block Trade or Other Coordinated Offering (in each case, which shall consist of one
or more reputable nationally recognized investment banks).
2.4.5
Subject to Section 2.4.6, each of (i) the Sponsor Holders, as a group, (ii) the Elroy Holders, as a group, (iii) the PIPE Holders,
as a group, and (iv) the Other Holders, as a group, may demand no more than two (2) Block Trades or Other Coordinated Offerings pursuant
to this Section 2.4 in any twelve (12) month period. For the avoidance of doubt, any Block Trade or Other Coordinated Offering
effected pursuant to this Section 2.4 shall not be counted as a demand for an Underwritten Shelf Takedown pursuant to Section
2.1.4.
2.4.6
Notwithstanding anything to the contrary in this Agreement, with respect to (i) the Sponsor Holders, as a group, (ii) the Elroy Holders,
as a group, or (iii) the Other Holders, as a group, in no event may the number of Block Trades or Other Coordinated Offerings demanded
pursuant to this Section 2.4 plus the number of Underwritten Shelf Takedowns demanded pursuant to Section 2.1.4 exceed
a total of three (3) demands for such group in any twelve (12) month period.
2.5
Legends. In connection with any sale or other disposition of the Registrable Securities by a Holder pursuant to Rule 144 promulgated
under the Securities Act (or any successor rule promulgated thereafter by the Commission) and upon compliance by the Holder with the
requirements of this Section 2.5, if requested by the Holder, the Company shall cause the transfer agent for the Registrable Securities
(the “Transfer Agent”) to remove any restrictive legends related to the book entry account holding such Registrable
Securities and make a new, unlegended entry for such book entry shares sold or disposed of without restrictive legends within one (1)
trading day of any such request therefor from the Holder; provided that the Company and the Transfer Agent have timely received from
the Holder customary representations and other documentation reasonably acceptable to the Company and the Transfer Agent in connection
therewith. Subject to receipt from the Holder by the Company and the Transfer Agent of customary representations and other documentation
reasonably acceptable to the Company and the Transfer Agent in connection therewith, the Holder may request that the Company remove any
legend from the book entry position evidencing its Registrable Securities and the Company will, if required by the Transfer Agent, use
its commercially reasonable efforts to cause an opinion of the Company’s counsel be provided, in a form reasonably acceptable to
the Transfer Agent, to the effect that the removal of such restrictive legends in such circumstances may be effected under the Securities
Act, following the earliest of such time as such Registrable Securities (i) are subject to or have been or are about to be sold pursuant
to an effective registration statement or (ii) have been or are about to be sold pursuant to Rule 144 promulgated under the Securities
Act (or any successor rule promulgated thereafter by the Commission). If restrictive legends are no longer required for such Registrable
Securities pursuant to the foregoing, the Company shall, in accordance with the provisions of this section and within one (1) trading
day of any request therefor from the Holder accompanied by such customary and reasonably acceptable representations and other documentation
referred to above establishing that restrictive legends are no longer required, deliver to the Transfer Agent irrevocable instructions
that the Transfer Agent shall make a new, unlegended entry for such book entry shares. The Company shall be responsible for the fees
of its Transfer Agent, its legal counsel and all DTC fees associated with such issuance.
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ARTICLE
III
COMPANY PROCEDURES
3.1
General Procedures. In connection with any Shelf and/or Shelf Takedown, the Company shall use its commercially reasonable efforts
to effect such Registration to permit the sale of such Registrable Securities in accordance with the intended plan of distribution thereof
(and including all manners of distribution in such Registration Statement as Holders may reasonably request in connection with the filing
of such Registration Statement and as permitted by law, including distribution of Registrable Securities to a Holder’s members,
securityholders or partners), and pursuant thereto the Company shall, as expeditiously as possible:
3.1.1
prepare and file with the Commission, as soon as reasonably practicable, a Registration Statement with respect to such Registrable Securities
and use its commercially reasonable efforts to cause such Registration Statement to become effective and remain effective until all Registrable
Securities have ceased to be Registrable Securities;
3.1.2
prepare and file with the Commission such amendments and post-effective amendments to the Registration Statement, and such supplements
to the Prospectus, as may be reasonably requested by any Holder that holds at least five percent (5%) of the Registrable Securities registered
on such Registration Statement or any Underwriter of Registrable Securities or as may be required by the rules, regulations or instructions
applicable to the registration form used by the Company or by the Securities Act or rules and regulations thereunder to keep the Registration
Statement effective until all Registrable Securities covered by such Registration Statement are sold in accordance with the intended
plan of distribution set forth in such Registration Statement or supplement to the Prospectus;
3.1.3
prior to filing a Registration Statement or Prospectus, or any amendment or supplement thereto, furnish without charge to the Underwriters,
if any, and the Holders of Registrable Securities included in such Registration, and such Holders’ legal counsel, copies of such
Registration Statement as proposed to be filed, each amendment and supplement to such Registration Statement (in each case including
all exhibits thereto and documents incorporated by reference therein), the Prospectus included in such Registration Statement (including
each preliminary Prospectus) and such other documents as the Underwriters and the Holders of Registrable Securities included in such
Registration or the legal counsel for any such Holders may request in order to facilitate the disposition of the Registrable Securities
owned by such Holders;
3.1.4
prior to any public offering of Registrable Securities, use its commercially reasonable efforts to (i) register or qualify the Registrable
Securities covered by the Registration Statement under such securities or “blue sky” laws of such jurisdictions in the United
States as the Holders of Registrable Securities included in such Registration Statement (in light of their intended plan of distribution)
may request (or provide evidence satisfactory to such Holders that the Registrable Securities are exempt from such registration or qualification)
and (ii) take such action necessary to cause such Registrable Securities covered by the Registration Statement to be registered with
or approved by such other governmental authorities as may be necessary by virtue of the business and operations of the Company and do
any and all other acts and things that may be necessary or advisable to enable the Holders of Registrable Securities included in such
Registration Statement to consummate the disposition of such Registrable Securities in such jurisdictions; provided, however,
that the Company shall not be required to qualify generally to do business in any jurisdiction where it would not otherwise be required
to qualify or take any action to which it would be subject to general service of process or taxation in any such jurisdiction where it
is not then otherwise so subject;
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3.1.5
cause all such Registrable Securities to be listed on each national securities exchange or automated quotation system on which similar
securities issued by the Company are then listed;
3.1.6
provide a transfer agent or warrant agent, as applicable, and registrar for all such Registrable Securities no later than the effective
date of such Registration Statement;
3.1.7
advise each seller of such Registrable Securities, promptly after it shall receive notice or obtain knowledge thereof, of the issuance
of any stop order by the Commission suspending the effectiveness of such Registration Statement or the initiation or threatening of any
proceeding for such purpose, and promptly use its commercially reasonable efforts to prevent the issuance of any stop order or to obtain
its withdrawal if such stop order should be issued;
3.1.8
prior to the filing of any Registration Statement or Prospectus or any amendment or supplement to such Registration Statement or Prospectus
(or such shorter period of time as (a) may be necessary in order to comply with the Securities Act, the Exchange Act and the rules and
regulations promulgated under the Securities Act or Exchange Act, as applicable or (b) advisable in order to reduce the number of days
that sales are suspended pursuant to Section 3.4), furnish a copy thereof to each seller of such Registrable Securities and its
counsel (excluding any exhibits thereto and any filing made under the Exchange Act that is to be incorporated by reference therein);
3.1.9
notify the Holders at any time when a Prospectus relating to such Registration Statement is required to be delivered under the Securities
Act, of the happening of any event as a result of which the Prospectus included in such Registration Statement, as then in effect, includes
a Misstatement, and then to correct such Misstatement as set forth in Section 3.4;
3.1.10
in the event of an Underwritten Offering, a Block Trade, an Other Coordinated Offering, or sale by a broker, placement agent or sales
agent that is registered pursuant to a Registration Statement, permit a representative of the Holders (such representative to be selected
by a majority of the participating Holders), the Underwriters or other financial institutions facilitating such Underwritten Offering,
Block Trade, Other Coordinated Offering or other sale pursuant to such Registration, if any, and any attorney, consultant or accountant
retained by such Holders collectively, Underwriters or other financial institutions to participate, at each such Person’s own expense,
in the preparation of the Registration Statement, and cause the Company’s officers, directors and employees to supply all information
reasonably requested by any such representative, Underwriter, financial institution, attorney, consultant or accountant in connection
with the Registration; provided, however, that such representative, Underwriters or financial institutions agree to confidentiality
arrangements, in form and substance reasonably satisfactory to the Company, prior to the release or disclosure of any such information;
14
3.1.11
obtain a “comfort” letter (including a bring-down letter dated as of the date the Registrable Securities are delivered for
sale pursuant to such Registration) from the Company’s independent registered public accountants in the event of an Underwritten
Offering, a Block Trade, an Other Coordinated Offering or a sale by a broker, placement agent or sales agent pursuant to a Registration
Statement (subject to such Underwriter or other financial institution facilitating such offering providing such certification or representation
as reasonably requested by the Company’s independent registered public accountants and the Company’s counsel), in customary
form and covering such matters of the type customarily covered by “comfort” letters as the managing Underwriter or other
similar type of sales agent or placement agent may reasonably request;
3.1.12
in the event of an Underwritten Offering, a Block Trade, an Other Coordinated Offering or sale by a broker, placement agent or sales
agent pursuant to a Registration Statement, on the date the Registrable Securities are delivered for sale pursuant to such Registration,
obtain an opinion and negative assurance letter, dated such date, of counsel representing the Company for the purposes of such Registration,
addressed to the participating Holders, the broker, placement agent or sales agent, if any, and the Underwriters, if any, covering such
legal matters with respect to the Registration in respect of which such opinion is being given as the participating Holders, broker,
placement agent, sales agent, or Underwriter may reasonably request and as are customarily included in such opinions and negative assurance
letters, provided, in each case, that such participating Holders provide such information to such counsel as is customarily required
for, or is reasonably requested by such counsel for purposes of, such opinion or negative assurance letter;
3.1.13
in the event of any Underwritten Offering, a Block Trade, an Other Coordinated Offering or sale by a broker, placement agent or sales
agent pursuant to a Registration Statement, enter into and perform its obligations under an underwriting agreement, purchase agreement,
sales agreement or placement agreement, in usual and customary form, with the managing Underwriter or broker, sales agent or placement
agent of such offering or sale;
3.1.14
make available to its security holders, as soon as reasonably practicable, an earnings statement covering the period of at least 12 months
beginning with the first day of the Company’s first full calendar quarter after the effective date of the Registration Statement
which satisfies the provisions of Section 11(a) of the Securities Act and Rule 158 thereunder (or any successor rule promulgated thereafter
by the Commission);
3.1.15
with respect to an Underwritten Offering pursuant to Section 2.1.4, use its commercially reasonable efforts to make available
senior executives of the Company to participate in customary “road show” presentations that may be reasonably requested by
the Underwriter in such Underwritten Offering; and
3.1.16
otherwise, in good faith, cooperate reasonably with, and take such customary actions as may reasonably be requested by the Holders participating
in such Registration, consistent with the terms of this Agreement, in connection with such Registration.
Notwithstanding
the foregoing, the Company shall not be required to provide any documents or information to an Underwriter or other sales agent or placement
agent if such Underwriter or other sales agent or placement agent has not then been named with respect to the applicable Underwritten
Offering or other offering involving a registration as an Underwriter or broker, sales agent or placement agent, as applicable.
15
3.2
Registration Expenses. The Registration Expenses of all Registrations shall be borne by the Company. It is acknowledged by the
Holders that the Holders shall bear all incremental selling expenses relating to the sale of Registrable Securities, such as Underwriters’
or agents’ commissions and discounts, brokerage fees, Underwriter marketing costs and, other than as set forth in the definition
of “Registration Expenses,” all reasonable fees and expenses of any legal counsel representing the Holders.
3.3
Requirements for Participation in Underwritten Offerings. The Holders of Registrable Securities shall provide such information
as may reasonably be requested by the Company, or the managing Underwriter or placement agent or sales agent, if any, in connection with
the preparation of any Registration Statement or Prospectus, including amendments and supplements thereto, in order to effect the registration
of any Registrable Securities under the Securities Act pursuant to Article II and in connection with the Company’s obligation
to comply with federal and applicable state securities Laws. Notwithstanding anything in this Agreement to the contrary, if any Holder
does not timely provide the Company with its requested Holder Information, the Company may exclude such Holder’s Registrable Securities
from the applicable Registration Statement or Prospectus if the Company determines, based on the advice of counsel, that such information
is necessary to effect the registration and such Holder continues thereafter to withhold such information. No Person may participate
in any Underwritten Offering or other coordinated offering for equity securities of the Company pursuant to a Registration initiated
by the Company hereunder unless such Person (i) agrees to sell such Person’s securities on the basis provided in any arrangements
approved by the Company and (ii) timely completes and executes all customary questionnaires, powers of attorney, indemnities, lock-up
agreements, underwriting or other agreements and other customary documents as may be reasonably required under the terms of such arrangements.
The exclusion of a Holder’s Registrable Securities as a result of this Section 3.3 shall not affect the registration of
the other Registrable Securities to be included in such Registration.
3.4
Suspension of Sales; Adverse Disclosure; Restrictions on Registration Rights.
3.4.1
Upon receipt of written notice from the Company that a Registration Statement or Prospectus contains a Misstatement, each of the Holders
shall forthwith discontinue disposition of Registrable Securities until he, she or it has received copies of a supplemented or amended
Prospectus correcting the Misstatement (it being understood that the Company hereby covenants to prepare and file such supplement or
amendment as soon as practicable after the time of such notice), or until he, she or it is advised in writing by the Company that the
use of the Prospectus may be resumed.
3.4.2
If the filing, initial effectiveness or continued use of a Registration Statement in respect of any Registration at any time would (i)
require the Company to make an Adverse Disclosure, (ii) require the inclusion in such Registration Statement of financial statements
that are unavailable to the Company for reasons beyond the Company’s control or (iii) in the good faith judgment of the majority
of the Board, be seriously detrimental to the Company, and the majority of the Board concludes as a result that it is essential to defer
such filing, initial effectiveness or continued use at such time, the Company may, upon giving prompt written notice of such action to
the Holders (which notice shall not specify the nature of the event giving rise to such delay or suspension), delay the filing or initial
effectiveness of, or suspend use of, such Registration Statement for the shortest period of time determined in good faith by the Company
to be necessary for such purpose. In the event the Company exercises its rights under this Section 3.4.2, the Holders agree to
suspend, immediately upon their receipt of the notice referred to above, their use of the Prospectus relating to any Registration in
connection with any sale or offer to sell Registrable Securities until such Holder receives written notice from the Company that such
sales or offers of Registrable Securities may be resumed, and in each case maintain the confidentiality of such notice and its contents.
16
3.4.3
Subject to Section 3.4.4, if (i) during the period starting with the date 60 days prior to the Company’s good faith estimate
of the date of the filing of, and ending on a date 120 days after the effective date of, a Company-initiated Registration, and provided
that the Company continues to actively employ, in good faith, all commercially reasonable efforts to maintain the effectiveness of the
applicable Shelf Registration, or (ii) if, pursuant to Section 2.1.4, Holders have requested an Underwritten Shelf Takedown and
the Company and such Holders are unable to obtain the commitment of underwriters to firmly underwrite such offering, then, in each case,
the Company may, upon giving prompt written notice of such action to the Holders, delay any other registered offering pursuant to Section
2.1.4.
3.4.4
The right to delay or suspend any filing, initial effectiveness or continued use of a Registration Statement pursuant to Section 3.4.2
or a registered offering pursuant to Section 3.4.3 shall be exercised by the Company, in the aggregate, for not more than 90 consecutive
calendar days or more than 120 total calendar days in each case, during any 12-month period.
3.5
Reporting Obligations. As long as any Holder shall own Registrable Securities, the Company, at all times while it shall be a reporting
company under the Exchange Act, covenants to use commercially reasonable efforts to file timely (or obtain extensions in respect thereof
and file within the applicable grace period) all reports required to be filed by the Company after the date hereof pursuant to Section
13(a) or 15(d) of the Exchange Act. The Company further covenants that it shall take such further action as any Holder may reasonably
request, to the extent required from time to time to enable such Holder to sell Registrable Securities held by such Holder without registration
under the Securities Act within the limitation of the exemptions provided by Rule 144.
ARTICLE
IV
INDEMNIFICATION AND CONTRIBUTION
4.1
Indemnification.
4.1.1
The Company agrees to indemnify, to the extent permitted by law, each Holder of Registrable Securities, its officers, directors, agents
and each Person who controls such Holder (within the meaning of the Securities Act) against all losses, claims, damages, liabilities
and reasonable and documented out-of-pocket expenses (including, without limitation, reasonable outside attorneys’ fees) resulting
from any untrue or alleged untrue statement of material fact contained in or incorporated by reference in any Registration Statement,
Prospectus or preliminary Prospectus or any amendment thereof or supplement thereto filed pursuant to this Agreement or any omission
or alleged omission of a material fact required to be stated therein or necessary to make the statements therein not misleading, except
insofar as the same are caused by or contained in any information or affidavit so furnished in writing to the Company by such Holder
expressly for use therein. The Company shall indemnify the Underwriters, their officers and directors and each Person who controls such
Underwriters (within the meaning of the Securities Act) to the same extent as provided in the foregoing with respect to the indemnification
of the Holder.
4.1.2
In connection with any Registration Statement filed pursuant to this Agreement in which a Holder of Registrable Securities is participating,
such Holder shall furnish (or cause to be furnished) to the Company in writing such information and affidavits as the Company reasonably
requests for use in connection with any such Registration Statement or Prospectus (the “Holder Information”)
and, to the extent permitted by law, shall indemnify the Company, its directors, officers and agents and each Person who controls the
Company (within the meaning of the Securities Act) against all losses, claims, damages, liabilities and reasonable and documented out-of-pocket
expenses (including, without limitation, reasonable outside attorneys’ fees) resulting from any untrue or alleged untrue statement
of material fact contained in or incorporated by reference in any Registration Statement, Prospectus or preliminary Prospectus or any
amendment thereof or supplement thereto or any omission or alleged omission of a material fact required to be stated therein or necessary
to make the statements therein not misleading, but only to the extent that such untrue statement is contained in (or not contained in,
in the case of an omission) any information or affidavit so furnished in writing by such Holder expressly for use therein; provided,
however, that the obligation to indemnify shall be several, not joint and several, among such Holders of Registrable Securities,
and the liability of each such Holder of Registrable Securities shall be in proportion to and limited to the net proceeds received by
such Holder from the sale of Registrable Securities pursuant to such Registration Statement. The Holders of Registrable Securities shall
indemnify the Underwriters, their officers, directors and each person or entity who controls such Underwriters (within the meaning of
the Securities Act) to the same extent as provided in the foregoing with respect to indemnification of the Company.
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4.1.3
Any Person entitled to indemnification herein shall (i) give prompt written notice to the indemnifying party of any claim with respect
to which it seeks indemnification (provided that the failure to give prompt notice shall not impair any Person’s right to
indemnification hereunder to the extent such failure has not materially prejudiced the indemnifying party) and (ii) unless in such indemnified
party’s reasonable judgment a conflict of interest between such indemnified and indemnifying parties may exist with respect to
such claim, permit such indemnifying party to assume the defense of such claim with counsel reasonably satisfactory to the indemnified
party. If such defense is assumed, the indemnifying party shall not be subject to any liability for any settlement made by the indemnified
party without its consent (but such consent shall not be unreasonably withheld). An indemnifying party who is not entitled to, or elects
not to, assume the defense of a claim shall not be obligated to pay the fees and expenses of more than one counsel (plus one local counsel
if necessary in the reasonable judgment of the indemnified party) for all parties indemnified by such indemnifying party with respect
to such claim, unless in the reasonable judgment of any indemnified party a conflict of interest may exist between such indemnified party
and any other of such indemnified parties with respect to such claim. No indemnifying party shall, without the consent of the indemnified
party, consent to the entry of any judgment or enter into any settlement which cannot be settled in all respects by the payment of money
(and such money is so paid by the indemnifying party pursuant to the terms of such settlement) or which settlement includes a statement
or admission of fault and culpability on the part of such indemnified party or which settlement does not include as an unconditional
term thereof the giving by the claimant or plaintiff to such indemnified party of a release from all liability in respect of such claim
or litigation.
4.1.4
The indemnification provided for under this Agreement shall remain in full force and effect regardless of any investigation made by or
on behalf of the indemnified party or any officer, director or controlling Person of such indemnified party and shall survive the transfer
of securities. The Company and each Holder of Registrable Securities participating in an offering also agrees to make such provisions
as are reasonably requested by any indemnified party for contribution to such party in the event the Company’s or such Holder’s
indemnification is unavailable for any reason.
4.1.5
If the indemnification provided under Section 4.1 from the indemnifying party is unavailable or insufficient to hold harmless
an indemnified party in respect of any losses, claims, damages, liabilities and out-of-pocket expenses referred to herein, then the indemnifying
party, in lieu of indemnifying the indemnified party, shall contribute to the amount paid or payable by the indemnified party as a result
of such losses, claims, damages, liabilities and out-of-pocket expenses in such proportion as is appropriate to reflect the relative
fault of the indemnifying party and the indemnified party, as well as any other relevant equitable considerations. The relative fault
of the indemnifying party and indemnified party shall be determined by reference to, among other things, whether any action in question,
including any untrue or alleged untrue statement of a material fact or omission or alleged omission to state a material fact, was made
by (or not made by, in the case of an omission), or relates to information supplied by (or not supplied by in the case of an omission),
such indemnifying party or indemnified party, and the indemnifying party’s and indemnified party’s relative intent, knowledge,
access to information and opportunity to correct or prevent such action; provided, however, that the liability of any Holder under
this Section 4.1.5 shall be limited to the amount of the net proceeds received by such Holder in such offering giving rise to
such liability. The amount paid or payable by a party as a result of the losses or other liabilities referred to above shall be deemed
to include, subject to the limitations set forth in Sections 4.1.1, 4.1.2 and 4.1.3, any legal or other fees, charges
or out-of-pocket expenses reasonably incurred by such party in connection with any investigation or proceeding. The parties hereto agree
that it would not be just and equitable if contribution pursuant to this Section 4.1.5 were determined by pro rata allocation
or by any other method of allocation, which does not take account of the equitable considerations referred to in this Section 4.1.5.
No Person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) shall be entitled to contribution
pursuant to this Section 4.1.5 from any Person who was not guilty of such fraudulent misrepresentation.
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4.2
Waiver of Medallion Guaranty. The Company agrees to use commercially reasonable efforts to enter into that certain indemnification
agreement, substantially in the form attached as Exhibit B to this Agreement, in favor of Continental Stock Transfer & Trust
Company (or any successor transfer agent or warrant agent of the Company) in connection with the waiver of any requirement to provide
a medallion guarantee in connection with any Transfer of any shares of Common Stock or other equity securities of the Company by any
Sponsor Holder, PIPE Holder, or any of their Permitted Transferees or PIPE Transferees; provided that, in each case, as a prerequisite
to the Company’s entry into such indemnification agreement, such Sponsor Holder, PIPE Holder, Permitted Transferee or PIPE Transferees
enters into an indemnification agreement in favor of the Company.
ARTICLE
V
MISCELLANEOUS
5.1
Notices. All notices, consents, waivers and other communications hereunder shall be in writing and shall be deemed to have been
duly given when delivered (i) in person, (ii) by facsimile or other electronic means (including email), with affirmative confirmation
of receipt, (iii) one (1) Business Day after being sent, if sent by reputable, nationally recognized overnight courier service or (iv)
three (3) Business Days after being mailed, if sent by registered or certified mail, pre-paid and return receipt requested, in each case
to the applicable party at the following addresses (or at such other address for a party as shall be specified by like notice). Any notice
or communication under this Agreement must be addressed, if to the Company, to: Elroy Air, Inc., [●], Attention: [●], Email:
[●], with a copy (which shall not constitute notice) to [●], [●], Attention: [●], Email: [●];and, if to
any Holder, at such Holder’s address or contact information as set forth in the Company’s books and records. Any party may
change its address for notice at any time and from time to time by written notice to the other parties hereto, and such change of address
shall become effective thirty (30) days after delivery of such notice as provided in this Section 5.1.
5.2
Assignment; No Third-Party Beneficiaries.
5.2.1
This Agreement and the rights, duties and obligations of the Company hereunder may not be assigned or delegated by the Company in whole
or in part.
5.2.2
This Agreement and the rights, duties and obligations of the Holders hereunder may not be assigned or delegated by the Holders in whole
or in part; provided, however, that, subject to Section 5.2.5, a Holder may assign the rights and obligations of such Holder
hereunder relating to particular Registrable Securities in connection with the transfer of such Registrable Securities to a Permitted
Transferee or PIPE Transferee of such Holder (it being understood that no such Transfer shall reduce any rights of the Holder with respect
to Registrable Securities still held by such Holder). A Permitted Transferee or PIPE Transferee receiving Registrable Securities from
a Sponsor Holder shall become a Sponsor Holder, a Permitted Transferee receiving Registrable Securities from an Elroy Holder shall become
an Elroy Holder, a PIPE Transferee receiving Registrable Securities from a PIPE Holder shall become a PIPE Holder, and a Permitted Transferee
receiving Registrable Securities from an Other Holder shall become an Other Holder.
19
5.2.3
This Agreement and the provisions hereof shall be binding upon and shall inure to the benefit of each of the parties and its successors
and the permitted assigns of the Holders, which shall include Permitted Transferees and PIPE Transferees.
5.2.4
This Agreement shall not confer any rights or benefits on any Persons that are not parties hereto, other than as expressly set forth
in this Agreement and Section 5.2.
5.2.5
No assignment by any party hereto of such party’s rights, duties and obligations hereunder shall be binding upon or obligate the
Company unless such assignment is permitted under 5.2.2 and unless and until the Company shall have received (i) written notice of such
assignment as provided in Section 5.1 and (ii) the written agreement of the assignee, in a form reasonably satisfactory to the
Company, to be bound by the terms and provisions of this Agreement (which may be accomplished by an addendum or certificate of joinder
to this Agreement). Any transfer or assignment made other than as provided in this Section 5.2 shall be null and void.
5.3
Counterparts. This Agreement may be executed and delivered (including by facsimile or other electronic transmission) in one or
more counterparts, and by the different parties hereto in separate counterparts, each of which when executed shall be deemed to be an
original but all of which taken together shall constitute one and the same agreement.
5.4
Governing Law. This Agreement, and all claims or causes of action based upon, arising out of, or related to this Agreement or
the transactions contemplated hereby, shall be governed by, and construed in accordance with, the Laws of the State of Delaware, without
giving effect to principles or rules of conflict of Laws to the extent such principles or rules would require or permit the application
of Laws of another jurisdiction.
5.5
Jurisdiction. Any Legal Proceeding based upon, arising out of or related to this Agreement or the transactions contemplated hereby
must be brought in the Court of Chancery of the State of Delaware (or, to the extent such court does not have jurisdiction, in the United
States District Court for the District of Delaware and to the extent such court does not have subject matter jurisdiction, the Superior
Court of the State of Delaware), and each of the parties irrevocably (i) submits to the exclusive jurisdiction of each such court in
any such Legal Proceeding, (ii) waives any objection it may now or hereafter have to personal jurisdiction, venue or to convenience of
forum, (iii) agrees that all claims in respect of the Legal Proceeding shall be heard and determined only in any such court, and (iv)
agrees not to bring any Legal Proceeding arising out of or relating to this Agreement or the transactions contemplated hereby in any
other court. Nothing herein contained shall be deemed to affect the right of any party to serve process in any manner permitted by Law
or to commence Legal Proceedings or otherwise proceed against any other party in any other jurisdiction, in each case, to enforce judgments
obtained in any Legal Proceeding, suit or proceeding brought pursuant to this Section 5.5.
5.6
Waiver of Jury Trial. EACH PARTY ACKNOWLEDGES AND AGREES THAT ANY CONTROVERSY WHICH MAY ARISE UNDER THIS AGREEMENT AND THE TRANSACTIONS
CONTEMPLATED HEREBY IS LIKELY TO INVOLVE COMPLICATED AND DIFFICULT ISSUES, AND THEREFORE EACH SUCH PARTY HEREBY IRREVOCABLY, UNCONDITIONALLY
AND VOLUNTARILY WAIVES ANY RIGHT SUCH PARTY MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY ACTION, SUIT OR PROCEEDING DIRECTLY OR INDIRECTLY
ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY OF THE TRANSACTIONS CONTEMPLATED HEREBY.
20
5.7
Amendments and Modifications. Upon the written consent of the Company and the Holders of at least a majority in interest of the
aggregate Registrable Securities at the time in question, compliance with any of the provisions, covenants and conditions set forth in
this Agreement may be waived, or any of such provisions, covenants or conditions may be amended or modified; provided, however,
that notwithstanding the foregoing, any amendment hereto or waiver hereof that adversely effects the Sponsor Holders shall also require
the written consent of the Sponsor Majority Holders so long as the Sponsor Holders and their respective affiliates hold, in the aggregate,
at least one percent (1%) of the outstanding shares of Common Stock of the Company; and provided, further, that any amendment
hereto or waiver hereof that adversely affects one Holder, solely in its capacity as a holder of the shares of capital stock of the Company,
in a manner that is materially different from the other Holders (in such capacity) shall require the consent of the Holder so affected.
No course of dealing between any Holder or the Company and any other party hereto or any failure or delay on the part of a Holder or
the Company in exercising any rights or remedies under this Agreement shall operate as a waiver of any rights or remedies of any Holder
or the Company. No single or partial exercise of any rights or remedies under this Agreement by a party shall operate as a waiver or
preclude the exercise of any other rights or remedies hereunder or thereunder by such party.
5.8
Other Registration Rights. Other than as provided in the Warrant Agreement, dated as of February 10, 2026, between the Company
and Continental Stock Transfer & Trust Company, the Company represents and warrants that no Person, other than a Holder of Registrable
Securities, has any right to require the Company to register any securities of the Company for sale or to include such securities of
the Company in any Registration Statement filed by the Company for the sale of securities for its own account or for the account of any
other Person. For so long as the Sponsor Holders and their respective affiliates hold, in the aggregate, at least five percent (5%) of
the outstanding shares of Common Stock of the Company, the Company hereby agrees and covenants that it will not grant rights to register
any Common Stock (or securities convertible into or exchangeable for Common Stock) pursuant to the Securities Act that are more favorable
or senior to those granted to the Holders hereunder (such rights “Competing Registration Rights”) without the
prior written consent of the Sponsor Majority Holders, not to be unreasonably withheld, delayed or conditioned. Further, the Company
represents and warrants that this Agreement supersedes any other registration rights agreement or agreement with similar terms and conditions,
and in the event of a conflict between any such agreement or agreements and this Agreement, the terms of this Agreement shall prevail.
5.9
Term. This Agreement shall terminate upon the earlier of (i) the tenth anniversary of the date of this Agreement and (ii) with
respect to any Holder, the date that such Holder no longer holds any Registrable Securities. The provisions of Article IV shall
survive any termination.
5.10
Holder Information. Each Holder agrees, if requested in writing, to represent to the Company the total number of Registrable Securities
held by such Holder in order for the Company to make determinations hereunder.
21
5.11
Additional Holders; Joinder. In addition to Persons who may become Holders pursuant to Section 5.2, subject to the prior
written consent of at least a majority in interest of the aggregate Registrable Securities at the time in question, the Company may make
any Person who acquires Common Stock or rights to acquire Common Stock after the date hereof a party to this Agreement (each such Person,
an “Additional Holder”) by obtaining an executed joinder to this Agreement from such Additional Holder in the
form of Exhibit A attached hereto (a “Joinder”). Such Joinder shall specify the rights and obligations
of the applicable Additional Holder under this Agreement. Upon the execution and delivery and subject to the terms of a Joinder by such
Additional Holder, the Common Stock of the Company then owned, or underlying any rights then owned, by such Additional Holder (the “Additional
Holder Common Stock”) shall be Registrable Securities to the extent provided herein and therein, and such Additional Holder
shall be a Holder under this Agreement with respect to such Additional Holder Common Stock.
5.12
Severability. In case any provision in this Agreement shall be held invalid, illegal or unenforceable in a jurisdiction, such
provision shall be modified or deleted, as to the jurisdiction involved, only to the extent necessary to render the same valid, legal
and enforceable, and the validity, legality and enforceability of the remaining provisions hereof shall not in any way be affected or
impaired thereby nor shall the validity, legality or enforceability of such provision be affected thereby in any other jurisdiction.
Upon such determination that any term or other provision is invalid, illegal or incapable of being enforced, the parties will substitute
for any invalid, illegal or unenforceable provision a suitable and equitable provision that carries out, so far as may be valid, legal
and enforceable, the intent and purpose of such invalid, illegal or unenforceable provision.
5.13
Entire Agreement; Restatement. This Agreement and the documents or instruments referred to herein, including any exhibits and
schedules attached hereto, which exhibits and schedules are incorporated herein by reference, embody the entire agreement and understanding
of the parties hereto in respect of the subject matter contained herein. There are no restrictions, promises, representations, warranties,
covenants or undertakings, other than those expressly set forth or referred to herein or the documents or instruments referred to herein,
which collectively supersede all prior agreements and the understandings among the parties with respect to the subject matter contained
herein. Upon the Closing, the Original RRA shall no longer be of any force or effect.
[Signature
Pages Follow]
22
IN
WITNESS WHEREOF, the undersigned have caused this Agreement to be executed as of the date first written above.
COMPANY:
ELROY AIR, INC.,
a Delaware corporation
By:
Name:
Title:
[Signature
Page to Amended and Restated Registration Rights Agreement]
ELROY HOLDERS:
[ ● ]
[ ● ]
[ ● ]
[Signature
Page to Amended and Restated Registration Rights Agreement]
SPONSOR:
COLUMBUS CIRCLE 2 SPONSOR
CORPORATION LLC, a Delaware limited liability company
By:
Name:
Title:
By:
Name:
Title:
OTHER SPONSOR HOLDERS:
[●]
By:
Name:
Title:
[●]
By:
Name:
Title:
[Signature
Page to Amended and Restated Registration Rights Agreement]
PIPE HOLDERS:
[ ● ]
[ ● ]
[ ● ]
[Signature
Page to Amended and Restated Registration Rights Agreement]
OTHER HOLDERS:
[ ● ]
[ ● ]
[ ● ]
[Signature
Page to Amended and Restated Registration Rights Agreement]
Exhibit
A
AMENDED
AND RESTATED
REGISTRATION RIGHTS AGREEMENT
JOINDER
The
undersigned is executing and delivering this joinder (this “Joinder”) pursuant to the Amended and Restated
Registration Rights Agreement, dated as of [ ], 2026 (as the same may hereafter be amended, the “Registration Rights Agreement”),
among Elroy Air, Inc., a Delaware corporation (the “Company”), and the other Persons named as parties therein.
Capitalized terms used but not otherwise defined herein shall have the meanings provided in the Registration Rights Agreement.
By
executing and delivering this Joinder to the Company, and upon acceptance hereof by the Company upon the execution of a counterpart hereof,
the undersigned hereby agrees to become a party to, to be bound by and to comply with the Registration Rights Agreement as a Holder of
Registrable Securities in the same manner as if the undersigned were an original signatory to the Registration Rights Agreement as [a
Sponsor Holder / an Elroy Holder / a PIPE Holder / an Other Holder], and the undersigned’s [shares of Common Stock] shall be included
as Registrable Securities under the Registration Rights Agreement to the extent provided therein; provided, however, that the
undersigned and its permitted assigns (if any) shall not have any rights as Holders, and the undersigned’s (and its transferees’)
[shares of Common Stock] shall not be included as Registrable Securities, for purposes of the Excluded Sections.
For
purposes of this Joinder, “Excluded Sections” shall mean [___].
Accordingly,
the undersigned has executed and delivered this Joinder as of the ________________day of _____________, 20 ______.
Signature of Stockholder
Print Name of Stockholder
Its:
Address:
Agreed
and Accepted as of ______________, 20____
[●]
By:
Name:
Its:
Exhibit
B
[●]
[●]
[●]
[
], 2026
Continental
Stock Transfer & Trust Company
1 State Street, 30th Floor
New
York, NY 10004
Re:
Indemnification in-lieu-of Medallion Signature Guarantee
To
whom it may concern:
This
letter is in regards to the transfer by [Columbus Circle 2 Sponsor Corporation LLC / Name of Sponsor Holder] to [ ], of [ ] shares of
Common Stock of Elroy Air, Inc. (formerly known as Inflection Point Acquisition Corp. VII) (the “Company”). Please
be advised that the Company authorizes Continental Stock Transfer & Trust Company to process the subject transfer, which includes
securities that have been duly endorsed by the registered holder but do not bear a customary medallion signature guarantee. The Company
agrees to indemnify Continental Stock Transfer & Trust Company against all losses, damages, costs, charges and expenses that it may
in any way sustain, incur, or become liable for by reason related to the above referenced transaction.
I,
[●], a duly authorized officer of the Company, have the authority to execute this indemnification on behalf of the Company.
Very truly yours,
[●]
By:
Name:
Title:
EX-10.6 — FORM OF SECURITIES PURCHASE AGREEMENT
EX-10.6
Filename: ea029643801ex10-6.htm · Sequence: 10
Exhibit 10.6
Execution Version
SECURITIES PURCHASE AGREEMENT
This Securities Purchase Agreement (this
“Agreement”) is dated as of June 26, 2026, by and among Columbus Circle Capital Corp. II, a Cayman Islands exempted
company (the “Company”), Elroy Air, Inc., a Delaware corporation (the “Target”), and the purchaser
identified on the signature pages hereto (including its successors and assigns, the “Purchaser”).
WHEREAS, the Company, the Target,
and IPGX Merger Sub, Inc., a Delaware corporation and a direct wholly owned subsidiary of the Company (“Merger Sub”),
entered into a Business Combination Agreement, dated as of June 26, 2026 (as it may be amended, modified, supplemented or otherwise modified
from time to time in accordance with its terms, the “Business Combination Agreement,” and the transactions contemplated
by the Business Combination Agreement, the “Business Combination”), pursuant to which, among other things, the Target
will merge with and into Merger Sub, with the Target surviving the merger as a wholly owned subsidiary of the Company;
WHEREAS, in connection with the
Business Combination, subject to the terms and conditions set forth in this Agreement and pursuant to Section 4(a)(2) of the Securities
Act (as defined below), the Company desires to issue and sell to the Purchaser, and the Purchaser desires to purchase from the Company,
securities of the Company as more fully described in this Agreement.
NOW, THEREFORE, IN CONSIDERATION
of the mutual covenants contained in this Agreement, and for other good and valuable consideration the receipt and adequacy of which are
hereby acknowledged, the Company, the Target and the Purchaser agree as follows:
ARTICLE
1
DEFINITIONS
1.1 Definitions. In addition
to the terms defined elsewhere in this Agreement: (a) capitalized terms that are not otherwise defined herein have the meanings given
to such terms in the Certificate of Designation (as defined herein), and (b) the following terms have the meanings set forth in this Section
1.1:
“Action” means any
action, suit, inquiry, notice of violation, proceeding or investigation pending or, to the knowledge of the applicable party, threatened
against or affecting the applicable party or any of its properties before or by any court, arbitrator, governmental or administrative
agency or regulatory authority (federal, state, county, local or foreign).
“Additional Information”
means the Target’s financial statements and the Target Disclosure Schedules to the Business Combination Agreement.
“Affiliate” means
any Person that, directly or indirectly through one or more intermediaries, controls or is controlled by or is under common control with
a Person, as such terms are used in and construed under Rule 405 under the Securities Act.
“Antitrust Law”
means the Sherman Act, as amended, the Clayton Act, as amended, the Federal Trade Commission Act, as amended, and all other Law governing
merger control matters or conduct having the purpose or effect of restraint of trade, monopolization, abuse of dominance, or substantial
lessening of competition.
“Board of Directors”
means the board of directors of the Company.
“Business Combination”
shall have the meaning ascribed to such term in the recitals.
“Business Combination Agreement”
shall have the meaning ascribed to such term in the recitals.
“Business Day” means
any day other than Saturday, Sunday or other day on which commercial banks in The City of New York are authorized or required by law to
remain closed; provided, however, for clarification, commercial banks shall not be deemed to be authorized
or required by law to remain closed due to “stay at home,” “shelter-in-place,” “non-essential employee”
or any other similar orders or restrictions or the closure of any physical branch locations at the direction of any governmental authority
so long as the electronic funds transfer systems (including for wire transfers) of commercial banks in The City of New York are generally
open for use by customers on such day.
“Certificate of Designation”
means the Certificate of Designation to be filed prior to the Closing by the Company with the Secretary of State of Delaware, in the form
of Exhibit A attached hereto.
“Class A Ordinary Shares”
means the Class A ordinary shares of the Company, par value $0.0001 per share.
“Closing” means the closing of the purchase
and sale of the Securities pursuant to Section 2.1.
“Closing Date” means
the Trading Day on which all of the Transaction Documents have been executed and delivered by the applicable parties thereto, and all
conditions precedent to (i) the Purchaser’s obligations to pay the Subscription Amount and (ii) the Company’s obligations
to deliver the Securities, in each case, have been satisfied or waived.
“Common Stock” means,
following the Domestication, the common stock of the Company, par value $0.0001 per share, and any other class of securities into which
such securities may hereafter be reclassified or changed.
“Company Material Adverse
Effect” means any change, event, or occurrence, that, individually or when aggregated with other changes, events, or occurrences
has had a materially adverse effect on the business, assets, financial condition or results of operations of the Company; provided, however,
that no change or effect related to any of the following, alone or in combination, shall be taken into account in determining whether
a Company Material Adverse Effect has occurred: (i) the announcement of this Agreement and consummation of the transactions contemplated
hereby; (ii) the taking of any action required by this Agreement or any Transaction Document; (iii) any natural disaster (including hurricanes,
storms, tornados, flooding, earthquakes, volcanic eruptions or similar occurrences), pandemic or change in climate, (iv) any acts of terrorism
or war, the outbreak or escalation of hostilities, geopolitical conditions, local, national or international political conditions; (v)
the Redemption; (vi) any failure of the Target to meet any projections or forecasts (provided that clause (vi) shall not prevent a determination
that any Event not otherwise excluded from this definition of Company Material Adverse Effect underlying such failure to meet projections
or forecasts has resulted in a Company Material Adverse Effect), (vii) any breach of any covenants, agreements or obligations of any investor
pursuant to a Pre-PIPE Securities Purchase Agreement or a Series A SPA, or any investor in any PIPE Investment, in each case who is not
Inflection Point Asset Management LLC or an Affiliate of Inflection Point Asset Management LLC, under this Agreement or other similar
agreements related to financing the Company or Target (including any breach of such Person’s obligations to fund any amounts thereunder
when required); (viii) changes or proposed changes in applicable Law, regulations or interpretations thereof or decisions by courts or
any Governmental Authority after the date of this Agreement; (ix) changes or proposed changes in GAAP (or any interpretation thereof)
after the date of this Agreement; or (x) any downturn in general economic conditions, including changes in the credit, debt, securities,
financial, capital or reinsurance markets (including changes in interest or exchange rates, prices of any security or market index or
commodity or any disruption of such markets), in each case, in the United States or anywhere else in the world.
“Company Party”
means the Company and its directors, officers, shareholders, members, partners, employees and agents (and any other Persons with a functionally
equivalent role of a Person holding such titles notwithstanding a lack of such title or any other title), each Person who controls the
Company (within the meaning of Section 15 of the Securities Act and Section 20 of the Exchange Act), and the directors, officers, shareholders,
agents, members, partners or employees (and any other Persons with a functionally equivalent role of a Person holding such titles notwithstanding
a lack of such title or any other title) of such controlling persons.
“Consent” means
any consent, approval, waiver, authorization or Permit of, or notice to or declaration or filing with any Governmental Authority or any
other Person.
“Domestication”
means the Company’s migration to and domestication as a Delaware corporation in accordance with Section 388 of the Delaware General
Corporation Law, as amended and the Cayman Islands Companies Act (As Revised) in connection with the closing of the Business Combination.
“Conversion Shares”
means the shares of Common Stock issued and issuable upon conversion of the shares of Preferred Stock purchased pursuant to this Agreement
in accordance with the terms of the Certificate of Designation.
“Disqualification Event”
shall have the meaning ascribed to such term in Section 3.1(i).
“Effective
Date” means the first date on which (a) the initial Registration Statement has been declared effective by the SEC
registering the resale of all of the Underlying Shares or (b) all of the Underlying Shares have been sold pursuant to Rule 144 or
may be sold pursuant to Rule 144 (but with no volume or other restrictions or limitations including as to manner or timing of sale
or current public information requirements).
2
“Exchange Act” means
the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder.
“GAAP” shall mean
generally accepted accounting principles in the United States of America.
“Governmental Authority”
means any federal, state, local, foreign government or other governmental, quasi-governmental, regulatory or administrative authority,
body, instrumentality, department, board, bureau or agency or any court, tribunal, administrative hearing body, arbitration panel, commission,
or other similar dispute-resolving panel or body (private or public).
“HSR Act” means
the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended.
“Indebtedness”
of any Person means, without duplication (A) all indebtedness for borrowed money, (B) all obligations issued, undertaken or assumed as
the deferred purchase price of property or services (including, without limitation, “capital leases” in accordance with GAAP)
(other than trade payables entered into in the ordinary course of business consistent with past practice), (C) all reimbursement or payment
obligations with respect to letters of credit, surety bonds and other similar instruments, (D) all obligations evidenced by notes, bonds,
debentures or similar instruments, including obligations so evidenced incurred in connection with the acquisition of property, assets
or businesses, (E) all indebtedness created or arising under any conditional sale or other title retention agreement, or incurred as
financing, in either case with respect to any property or assets acquired with the proceeds of such indebtedness (even though the rights
and remedies of the seller or bank under such agreement in the event of default are limited to repossession or sale of such property),
(F) all monetary obligations under any leasing or similar arrangement which, in connection with GAAP, consistently applied for the periods
covered thereby, is classified as a capital lease, (G) all indebtedness referred to in clauses (A) through (F) above secured by (or for
which the holder of such Indebtedness has an existing right, contingent or otherwise, to be secured by) any Lien upon or in any property
or assets (including accounts and contract rights) owned by any Person, even though the Person which owns such assets or property has
not assumed or become liable for the payment of such indebtedness, and (H) all Contingent Obligations in respect of indebtedness or obligations
of others of the kinds referred to in clauses (A) through (G) above.
“Law” means any
federal, state, local, municipal, foreign or other law, statute, legislation, principle of common law, ordinance, code, edict, decree,
proclamation, treaty, convention, rule, regulation, directive, requirement, writ, injunction, settlement, Order or Consent that is or
has been issued, enacted, adopted, passed, approved, promulgated, made, implemented or otherwise put into effect by or under the authority
of any Governmental Authority.
“Lien” means any
mortgage, pledge, security interest, attachment, right of first refusal, preemptive right, option, proxy, voting trust, encumbrance, lien
or charge of any kind (including any conditional sale or other title retention agreement or lease in the nature thereof), restriction
(whether on voting, sale, transfer, disposition or otherwise), any subordination arrangement in favor of another Person, or any filing
or agreement to file a financing statement as debtor under the Uniform Commercial Code or any similar Law.
“Losses” means losses,
liabilities, obligations, claims, damages, costs and expenses, including all judgments, amounts paid in settlements, court costs and reasonable
attorneys’ fees and costs of investigation.
“Order” means any
order, decree, ruling, judgment, injunction, writ, determination, binding decision, verdict, judicial award or other action that is or
has been made, entered, rendered, or otherwise put into effect by or under the authority of any Governmental Authority.
“Organizational Documents”
means, with respect to any Person that is an entity, its certificate of incorporation or formation, bylaws, operating agreement, memorandum
and articles of association or similar organizational documents, in each case, as amended.
“Pandemic
Measures” means any quarantine, “shelter in place,” “stay at home,” workforce reduction, social
distancing, shut down, closure, sequester, safety or other Law, directive, guidelines or recommendations promulgated by any industry
group or any Governmental Authority, including but not limited to the Centers for Disease Control and Prevention and the World
Health Organization, in each case, in connection with or in response to any epidemic, pandemic or disease outbreak.
3
“Permits” means
all federal, state, local or foreign or other third-party permits, grants, easements, consents, approvals, authorizations, exemptions,
licenses, franchises, concessions, ratifications, permissions, clearances, confirmations, endorsements, waivers, certifications, designations,
ratings, registrations, qualifications or orders of any Governmental Authority or any other Person.
“Person” means an
individual or corporation, partnership, trust, incorporated or unincorporated association, joint venture, limited liability company, joint
stock company, government (or an agency or subdivision thereof) or other entity of any kind.
“PIPE Investment”
shall have the meaning ascribed to such term in the Business Combination Agreement.
“Placement Agents”
means Barclays Capital Inc. (“Barclays”), Cantor Fitzgerald & Co and Cohen & Company Securities, LLC.
“Private Placement Units”
are to the units issued to Cohen & Company Securities, LLC, the Sponsor, and Clear Street LLC, in a private placement simultaneously
with the closing of the Company’s initial public offering, which consist of one Class A Ordinary Share and one-third of one private
placement warrant, with each whole private placement warrant exercisable to purchase one Class A Ordinary Share at $11.50 per share.
“Preferred Stock”
means the 12.0% Series A Cumulative Convertible Preferred Stock having the rights, preferences and privileges set forth in the Certificate
of Designation, in the form of Exhibit A hereto.
“Pre-PIPE Securities Purchase
Agreement” shall have the meaning ascribed to such term in the Business Combination Agreement.
“Proceeding” means
an action, claim, suit, investigation or proceeding, whether commenced or threatened.
“Purchaser Party”
means the Purchaser and the Purchaser’s directors, officers, shareholders, members, partners, employees and agents (and any other
Persons with a functionally equivalent role of a Person holding such titles notwithstanding a lack of such title or any other title),
each Person who controls the Purchaser (within the meaning of Section 15 of the Securities Act and Section 20 of the Exchange Act), and
the directors, officers, shareholders, agents, members, partners or employees (and any other Persons with a functionally equivalent role
of a Person holding such titles notwithstanding a lack of such title or any other title) of such controlling persons.
“Redemption” shall
have the meaning ascribed to such term in the Business Combination Agreement.
“Registration Rights Agreement”
means the Registration Rights Agreement among the Company, the Purchaser and the other parties thereto, in the form of Exhibit B
attached hereto.
“Registration Statement”
means a registration statement meeting the requirements set forth in the Registration Rights Agreement and covering the resale of the
Underlying Shares by the Purchaser as provided for in the Registration Rights Agreement.
“Required Minimum”
means, as of any date, the maximum aggregate number of shares of Common Stock then issued or potentially issuable in the future pursuant
to the Transaction Documents, including any Underlying Shares issuable upon exercise in full of all Warrants (assuming for this purpose,
an exercise price equal to the Floor Price) and conversion in full of all shares of Preferred Stock (assuming for this purpose, a conversion
price equal to the Floor Price and taking into account PIK Dividends for a period of at least three years following the Closing Date),
ignoring any conversion or exercise limits set forth therein.
“Rule 144” means
Rule 144 promulgated by the SEC pursuant to the Securities Act, as such rule may be amended or interpreted from time to time, or any similar
rule or regulation hereafter adopted by the SEC having substantially the same purpose and effect as such rule.
“Rule 424” means
Rule 424 promulgated by the SEC pursuant to the Securities Act, as such rule may be amended or interpreted from time to time, or any similar
rule or regulation hereafter adopted by the SEC having substantially the same purpose and effect as such rule.
4
“SEC” means the United States Securities
and Exchange Commission.
“SEC Reports” shall have the meaning
ascribed to such term in Section 3.1(m).
“Securities” means the shares of Preferred Stock, the Warrants and
the Underlying Shares.
“Securities Act” means the Securities
Act of 1933, as amended, and the rules and regulations promulgated thereunder.
“Series A SPAs”
means this Agreement together with the other securities purchase agreements, dated as of the date hereof for the Purchaser and the investors
named in such other agreements to purchase Preferred Stock and Warrants.
“Short Sales” shall
include, without limitation, all “short sales” as defined in Rule 200 of Regulation SHO under the Exchange Act and all types
of direct and indirect stock pledges (other than pledges in the ordinary course of business as part of prime brokerage arrangements),
forward sale contracts, options, puts, calls, swaps and similar arrangements (including on a total return basis), and sales and other
transactions through non-U.S. broker dealers or foreign regulated brokers.
“Sponsor” means Columbus Circle 2 Sponsor
Corporation LLC, a Delaware limited liability company.
“Stated Value” means $12.00 per share of Preferred Stock.
“Stock Exchange” means the NYSE American,
the Nasdaq Capital Market, the Nasdaq Global Market, the Nasdaq Global Select Market or the New York Stock Exchange (or any successors
to any of the foregoing).
“Subscription Amount”
shall mean the aggregate amount to be paid for the shares of Preferred Stock and the Warrants purchased hereunder pursuant to the terms
of this Agreement as set forth across from the Purchaser’s name on Schedule A hereto in U.S. dollars and in immediately available
funds.
“Subsidiary” means,
with respect to any Person, any corporation, partnership, association or other business entity of which (i) if a corporation, a majority
of the total voting power of shares of stock entitled (without regard to the occurrence of any contingency) to vote in the election of
directors, managers or trustees thereof is at the time owned or controlled, directly or indirectly, by that Person or one or more of the
other Subsidiaries of that Person or a combination thereof, or (ii) if a partnership, association or other business entity, a majority
of the partnership or other similar ownership interests thereof is at the time owned or controlled, directly or indirectly, by any Person
or one or more Subsidiaries of that Person or a combination thereof. For purposes hereof, a Person or Persons will be deemed to have a
majority ownership interest in a partnership, association or other business entity if such Person or Persons will be allocated a majority
of partnership, association or other business entity gains or losses or will be or control the managing director, managing member, general
partner or other managing Person of such partnership, association or other business entity. A Subsidiary of a Person will also include
any variable interest entity which is consolidated with such Person under applicable accounting rules.
“Target
Material Adverse Effect” means any event, state of facts, condition, change, development, circumstance, occurrence or
effect (collectively, “Events”), that (i) has had, or would reasonably be expected to have, individually or in
the aggregate, a material adverse effect on the business, assets, results of operations or financial condition of the Target, or
(ii) does or would reasonably be expected to, individually or in the aggregate, prevent, materially delay or materially impede the
ability of the Target to consummate the Transactions; provided, however, that in no event would any of the following, alone or in
combination, be deemed to constitute, or be taken into account in determining whether there has been or will be, a “Target
Material Adverse Effect”: (a) any change in applicable Laws (including regulations promulgated by the Federal Aviation
Administration, airworthiness certification requirements, or unmanned aircraft systems regulations or Laws or standards specifically
applicable to autonomous aerial vehicles or cargo drone operations) or GAAP or any interpretation thereof following the date of this
Agreement, (b) any change in interest rates or economic, political, business or financial market conditions generally, (c) the
taking of any action required by this Agreement, (d) any natural disaster (including hurricanes, storms, tornados, flooding,
earthquakes, volcanic eruptions or similar occurrences), pandemic (including Pandemic Measures) or change in climate, (e) any acts
of terrorism or war, the outbreak or escalation of hostilities, geopolitical conditions, local, national or international political
conditions, (f) any failure of the Target to meet any projections or forecasts (provided that clause (f) shall not prevent a
determination that any Event not otherwise excluded from this definition of Target Material Adverse Effect underlying such failure
to meet projections or forecasts has resulted in a Target Material Adverse Effect), (g) any Events generally applicable to the
industries or markets in which the Target and its Subsidiaries operate (including increases in the cost of products, supplies,
materials or other goods purchased from third party suppliers), (h) the announcement of the Business Combination Agreement, this
Agreement or any other Transaction Document and consummation of the transactions contemplated hereby and thereby, including any
termination of, reduction in or similar adverse impact (but in each case only to the extent attributable to such announcement or
consummation) on relationships, contractual or otherwise, with any landlords, customers, suppliers, distributors, partners or
employees of the Target, (i) the expiration, non-renewal, or termination of any commercial contract to which the Target is a party,
in each case occurring in the ordinary course of business or at the stated expiration date of such contract, (j) any matter set
forth on the Target Disclosure Letter, or (k) any action taken by, or at the request of, the Company; provided, further, that any
Event referred to in clauses (a), (b), (d), (e) or (g) above may be taken into account in determining if a Target Material Adverse
Effect has occurred to the extent it has a disproportionate and adverse effect on the business, assets, results of operations or
condition (financial or otherwise) of the Target, taken as a whole, relative to similarly situated companies in the industry in
which the Target conduct their respective operations, but only to the extent of the incremental disproportionate effect on the
Target, relative to similarly situated companies in the industry in which the Target conduct their respective operations.
5
“Target Party” means
the Target and each of its respective directors, officers, shareholders, members, partners, employees and agents (and any other Persons
with a functionally equivalent role of a Person holding such titles notwithstanding a lack of such title or any other title), each Person
who controls the Target (within the meaning of Section 15 of the Securities Act and Section 20 of the Exchange Act), and the directors,
officers, shareholders, agents, members, partners or employees (and any other Persons with a functionally equivalent role of a Person
holding such titles notwithstanding a lack of such title or any other title) of such controlling persons.
“Taxes” means all
direct or indirect federal, state, local, foreign and other net income, gross income, gross receipts, sales, use, value-added, ad valorem,
transfer, franchise, profits, license, lease, service, service use, withholding, payroll, employment, social security and related contributions
due in relation to the payment of compensation to employees, excise, severance, stamp, occupation, premium, property, windfall profits,
alternative minimum, estimated, customs, duties or other taxes, fees, assessments or charges in the nature of a tax, together with any
interest and any penalties, additions to tax or additional amounts with respect thereto imposed by a Governmental Authority.
“Trading Day” means
a day on which the principal Trading Market is open for trading.
“Trading Market”
means any of the following markets or exchanges on which the Common Stock is listed or quoted for trading on the date in question: the
NYSE American, the Nasdaq Capital Market, the Nasdaq Global Market, the Nasdaq Global Select Market or the New York Stock Exchange (or
any successors to any of the foregoing).
“Transaction Documents”
means this Agreement, the Certificate of Designation, the Warrants, the Registration Rights Agreement, and all exhibits and schedules
thereto.
“Transactions” means
each of the transactions contemplated by this Agreement and the other Transaction Documents.
“Transfer Agent”
means Continental Stock Transfer & Trust Company, the current transfer agent of the Company, and any successor transfer agent of the
Company.
“Underlying Shares”
means the Conversion Shares and the Warrant Shares.
“Warrants” means,
collectively, the Common Stock purchase warrants delivered to the Purchaser at the Closing in accordance with Section 2.2(a) hereof,
which Warrants shall be exercisable immediately and have a term of exercise equal to 5 years, in the form of Exhibit C attached
hereto.
“Warrant Shares”
means the shares of Common Stock issuable upon exercise of the Warrants.
6
ARTICLE 2
PURCHASE AND SALE
2.1 Closing.
On the Closing Date, upon the terms and subject to the conditions set forth herein, the Company agrees to sell, and the Purchaser agrees
to purchase, a number of shares of Preferred Stock with an aggregate Stated Value as set forth opposite the Purchaser’s name on
Schedule A hereto, and Warrants as determined pursuant to Section 2.2(a). The Company shall provide written notice (which may be
via email) to the Purchaser (the “Closing Notice”) that the Company reasonably expects the Closing to occur (and the
conditions thereto to be satisfied) on a date specified in the notice (the “Scheduled Closing Date”) not less than
two (2) Business Days after the date of the Closing Notice, which Closing Notice shall contain the Company’s wire instructions for
the Company’s operating account. The failure of the Closing to occur on the Scheduled Closing Date shall not terminate this Agreement
or otherwise relieve any party of any of its obligations hereunder. Provided that the Closing Notice is timely delivered in accordance
with the foregoing, the Purchaser shall deliver to the Company at the Closing, via wire transfer or a certified check, immediately available
funds equal to the Subscription Amount.
2.2 Deliveries.
(a) On
or prior to the Closing Date, the Company shall deliver or cause to be delivered to the Purchaser the following in form and substance
reasonably acceptable to the Placement Agents:
(i) a
certificate evidencing (or reasonable evidence of issuance by book entry, as applicable, of) a number of shares of Preferred Stock with
an aggregate Stated Value as set forth opposite the Purchaser’s name on Schedule A hereto, registered in the name of the
Purchaser and evidence of the filing and acceptance of the Certificate of Designation from the Secretary of State of Delaware;
(ii) a
Warrant registered in the name of the Purchaser to purchase up to a number of shares of Common Stock equal to 100% of the total number
of shares of Common Stock into which the Purchaser’s shares of Preferred Stock are convertible on the date of Closing, with an exercise
price equal to $12.00, subject to adjustment as set forth therein; and
(iii) the Registration Rights Agreement duly executed by the Company.
(b) On
or prior to the Closing Date, the Purchaser shall deliver or cause to be delivered to the Company, the following:
(i) the Registration Rights Agreement duly executed by the Purchaser;
(ii) the Purchaser’s counter-signature to the Warrant described in Section 2.2(a)(ii);
(iii) the Purchaser’s Subscription Amount;
(iv) solely
with respect to the securities described in Section 2.3(c)(iv)(y), the Lock-Up Agreement in the form attached hereto as Exhibit
D.
2.3 Closing Conditions.
(a) The
Closing shall be subject to the satisfaction, or valid waiver in writing by each of the parties hereto, of the conditions that, on the
Closing Date:
(i) all
conditions precedent to the closing of the Business Combination set forth in Article VII of the Business Combination Agreement shall have
been satisfied (as determined by the parties to the Business Combination Agreement) or waived in writing by the Person(s) with the authority
to make such waiver (other than those conditions which, by their nature, are to be satisfied at the closing of the Business Combination
pursuant to the Business Combination Agreement including to the extent that any such condition precedent is, or is dependent upon, the
consummation of the transactions contemplated hereby), and the closing of the Business Combination shall be scheduled to occur concurrently
with the Closing;
(ii) no
governmental authority shall have enacted, issued, promulgated, enforced or entered any judgment, order, law, rule or regulation which
is then in effect and has the effect of making the consummation of the transactions contemplated hereby (including, without limitation,
the Domestication) illegal or otherwise restraining or prohibiting consummation of the transactions contemplated hereby; and
7
(iii) all
notices and other filings required for the consummation of the transactions contemplated hereby under the HSR Act or any other Antitrust
Law shall have been made, and all applicable waiting periods thereunder (including all extensions thereof) shall have expired or been
terminated.
(b) The
obligation of the Company to consummate the Closing shall be subject to the satisfaction or valid waiver in writing by the Company of
the additional conditions that, on the Closing Date:
(i) except as
otherwise provided under Section 2.3(b)(ii), all representations and warranties of the Purchaser contained in this Agreement shall
be true and correct in all material respects (other than representations and warranties that are qualified as to materiality or material
adverse effect, which representations and warranties shall be true and correct in all respects) at and as of the Closing Date (except
to the extent that any such representation and warranty expressly speaks as of an earlier date, in which case such representation and
warranty shall be true and correct in all material respects (other than representations and warranties that are qualified as to materiality
or material adverse effect, which representations and warranties shall be true and correct in all respects) as of such earlier date),
and consummation of the Closing shall constitute a reaffirmation by the Purchaser of each of the representations, warranties and agreements
of the Purchaser contained in this Agreement as of the Closing Date, but without giving effect to consummation of the Business Combination,
or as of such earlier date, as applicable;
(ii) the
representations and warranties of the Purchaser contained in Section 3.2(q) of this Agreement shall be true and correct at all
times on or prior to the Closing Date, and consummation of the Closing shall constitute a reaffirmation by the Purchaser of such representations
and warranties;
(iii) the
Purchaser shall have performed, satisfied and complied in all material respects with all covenants, agreements and conditions required
by this Agreement to be performed, satisfied or complied with by it at or prior to the Closing; and
(iv) the
delivery by the Purchaser of the items set forth in Section 2.2(b) of this Agreement in form and substance reasonably acceptable
to the Placement Agents.
(c) The
obligation of the Purchaser to consummate the Closing shall be subject to the satisfaction or valid waiver in writing by the Purchaser
of the additional conditions that, on the Closing Date:
(i) all
representations and warranties of the Company contained in this Agreement shall be true and correct in all material respects (other than
representations and warranties that are qualified as to materiality, Company Material Adverse Effect, which representations and warranties
shall be true and correct in all respects) at and as of the Closing Date (except to the extent that any such representation or warranty
expressly speaks as of an earlier date, in which case such representation and warranty shall be true and correct in all material respects
(other than representations and warranties that are qualified as to materiality, Company Material Adverse Effect, which representations
and warranties shall be true and correct in all respects) as of such earlier date), and consummation of the Closing shall constitute a
reaffirmation by the Company of each of the representations, warranties and agreements of the Company contained in this Agreement as of
the Closing Date, but without giving effect to the consummation of the Business Combination, or as of such earlier date, as applicable;
(ii) the
Company shall have performed, satisfied and complied in all material respects with all covenants, agreements and conditions required by
this Agreement to be performed, satisfied or complied with by it at or prior to the Closing; and
(iii) the delivery by the Company of the items set forth in Section 2.2(a) of this Agreement; and
(iv) on
the Closing Date the Company shall (x) issue an aggregate of 750,000 shares of Common Stock to the Purchaser and (y) cause the Sponsor
to assign an aggregate of 501,649 shares of Common Stock issued or issuable to the Sponsor in respect of the Founder Shares, 448,351 shares
of Common Stock issued or issuable to the Sponsor in respect of Private Placement Units and 149,450 private placement warrants issued
or issuable to the Sponsor in respect of Private Placement Units, to the Purchaser
8
ARTICLE 3
REPRESENTATIONS
AND WARRANTIES
3.1 Representations
and Warranties of the Company. Except as set forth in any SEC Reports filed by the Company or other documents submitted or furnished
to the SEC by the Company on or prior to the date hereof, or on or prior to the Closing Date, as applicable, and provided that no representation
or warranty by the Company shall apply to any statement or information in the SEC Reports that relates to changes to historical accounting
policies of the Company in connection with any order, directive, guideline, comment or recommendation from the SEC or the Company’s
auditor or accountant that is applicable to the Company (collectively, the “Company SEC Guidance”), nor shall any correction,
amendment, revision or restatement of the Company’s financial statements due wholly or in part to the Company SEC Guidance or any
other accounting matters, nor any other effects that relate to or arise out of, or are in connection with or in response to, any of the
foregoing or any changes in accounting or disclosure related thereto, be deemed to be a breach of any representation or warranty by the
Company, the Company represents and warrants to the Purchaser, as of the date of this Agreement and as of the Closing Date (or, if such
representations and warranties are made with respect to a specified date, as of such date):
(a) The Company (i) is
validly existing and in good standing under the laws of the jurisdiction of incorporation, (ii) has the requisite power and
authority to own, lease and operate its properties, to carry on its business as it is now being conducted and to enter into and
perform its obligations under this Agreement and the other Transaction Documents, and (iii) is duly licensed or qualified to conduct
its business and, if applicable, is in good standing under the laws of each jurisdiction (other than its jurisdiction of
incorporation) in which the conduct of its business or the ownership of its properties or assets requires such license or
qualification, except, with respect to the foregoing clause (iii), where the failure to be in good standing would not
reasonably be expected to have a Company Material Adverse Effect.
(b) As
of the Closing Date, the Securities will be duly authorized and, when issued, paid for and delivered in accordance with the applicable
Transaction Documents, will be validly issued, fully paid and non-assessable, free and clear of all liens or other restrictions (other
than those arising under the Transaction Documents, the Organizational Documents of the Company or applicable securities laws), and will
not have been issued in violation of any preemptive or similar rights created under the Company’s Organizational Documents (as adopted
on the Closing Date) or the laws of its jurisdiction of incorporation.
(c) This
Agreement and the other Transaction Documents has been duly authorized, validly executed and delivered by the Company, and assuming the
due authorization, execution and delivery of the same by the Target and the Purchaser of this Agreement and the other Transaction Documents
to which they are a party and the due authorization, execution and delivery of the same by all other parties to any Transaction Document,
this Agreement and the other Transaction Documents shall constitute the valid and legally binding obligation of the Company, enforceable
against the Company in accordance with its terms, except to the extent that enforceability thereof may be limited by applicable bankruptcy,
insolvency, reorganization and moratorium laws and other laws of general application affecting the enforcement of creditors’ rights
generally or by any applicable statute of limitation or by any valid defense of set-off or counterclaim, and the fact that equitable remedies
or relief (including the remedy of specific performance) are subject to the discretion of the court from which such relief may be sought
(collectively, the “Enforceability Exceptions”).
(d) Assuming
the accuracy of the representations and warranties of the Purchaser set forth in Section 3.2 of this Agreement, the execution and
delivery of this Agreement and the other Transaction Documents, the issuance and sale of the Securities hereunder, the compliance by the
Company with all of the provisions hereof and thereof and the consummation of the transactions contemplated herein and therein will not
conflict with or result in a breach or violation of any of the terms or provisions of, or constitute a default under, or result in the
creation or imposition of any lien, charge or encumbrance upon any of the property or assets of the Company pursuant to the terms of (i)
any indenture, mortgage, deed of trust, loan agreement, lease, license or other agreement or instrument to which the Company is a party
or by which the Company is bound or to which any of the property or assets of the Company is subject, (ii) the Organizational Documents
of the Company, or (iii) any statute or any judgment, order, rule or regulation of any court or governmental agency or body, domestic
or foreign, having jurisdiction over the Company or any of its properties that, in the case of clauses (i) and (iii), would
reasonably be expected to have a Company Material Adverse Effect.
9
(e) Assuming
the accuracy of the representations and warranties of the Purchaser set forth in Section 3.2 of this Agreement, the Company
is not required to obtain any consent, waiver, authorization or order of, give any notice to, or make any filing or registration
with, any court or other federal, state, local or other governmental authority, self-regulatory organization or other person in
connection with the execution, delivery and performance of this Agreement or the other Transaction Documents (including, without
limitation, the issuance of the Securities), other than (i) filings required by applicable state securities laws, (ii) the filing of
the Registration Statement pursuant to the Registration Rights Agreement, (iii) filings required by the SEC, (iv) filings required
by the Stock Exchange, including with respect to obtaining shareholder approval, (v) filings and approvals required to consummate
the Business Combination as provided under the Business Combination Agreement, including those required in connection with the
Domestication,
(vi) the filing of notifications under
the HSR Act and other Antitrust Laws, if applicable, and (vii) those filings, the failure of which to obtain would not have a Company
Material Adverse Effect.
(f) Except for such matters as have not had
and would not have a Company Material Adverse Effect, there is no (i) Action, Proceeding or arbitration before a governmental
authority or arbitrator pending, or, to the knowledge of the Company, threatened in writing against the Company or (ii) judgment,
decree, injunction, ruling or order of any governmental authority or arbitrator outstanding against the Company.
(g) Assuming
the accuracy of the Purchaser’s representations and warranties set forth in Section 3.2 of this Agreement, no registration
under the Securities Act or any state securities (or Blue Sky) laws is required for the offer and sale of the Securities by the Company
to the Purchaser.
(h) Neither
the Company nor any person acting on its behalf has engaged in any form of general solicitation or general advertising (within the meaning
of Regulation D) in connection with any offer or sale of the Securities. The Securities are not being offered in a manner involving a
public offering under, or in a distribution in violation of, the Securities Act or any state securities laws. Neither the Company nor
any person acting on the Company’s behalf has, directly or indirectly, at any time within the past six (6) months, made any offer
or sale of any security or solicitation of any offer to buy any security under circumstances that would cause the offering of the Securities
pursuant to this Agreement to be integrated with prior offerings by the Company for purposes of the Securities Act or any applicable shareholder
approval provisions. Neither the Company nor any person acting on the Company’s behalf has offered or sold any securities, or has
taken any other action, which would reasonably be expected to subject the offer, issuance or sale of the Securities, as contemplated hereby,
to the registration provisions of the Securities Act.
(i) No
“bad actor” disqualifying event described in Rule 506(d)(1)(i)-(viii) of the Securities Act (a “Disqualification
Event”) is applicable to the Company, except for a Disqualification Event as to which Rule 506(d)(2)(ii–iv) or (d)(3)
is applicable.
(j) Except
as would not reasonably be expected to be material to the Company, the Company is in all material respects in compliance with applicable
provisions of the Sarbanes-Oxley Act of 2002, as amended, and the rules and regulations thereunder.
(k) As
of the Closing Date, the Common Stock will be eligible for clearing through The Depository Trust Company (“DTC”), through
its Deposit/Withdrawal At Custodian (DWAC) system, and the Company is eligible and participating in the Direct Registration System (DRS)
of DTC with respect to the Common Stock. The Company’s Transfer Agent is a participant in DTC’s Fast Automated Securities
Transfer Program.
(l) As
of their respective filing dates, or, if amended, as of the date of such amendment, which shall be deemed to supersede such original
filing, all reports required to be filed by the Company with the SEC (the “SEC Reports”) complied in all material
respects with the applicable requirements of the Securities Act and the Exchange Act, and the rules and regulations of the SEC
promulgated thereunder, and none of the SEC Reports, when filed, or, if amended, as of the date of such amendment, which shall be
deemed to supersede such original filing, contained any untrue statement of a material fact or omitted to state a material fact
required to be stated therein or necessary in order to make the statements therein, in the light of the circumstances under which
they were made, not misleading. As of the date hereof, there are no material outstanding or unresolved comments in comment letters
received by the Company from the staff of the Division of Corporation Finance of the SEC with respect to any of the SEC Reports. The
financial statements of the Company included in the SEC Reports comply in all material respects with applicable accounting
requirements and the rules and regulations of the SEC with respect thereto as in effect at the time of filing, or, if amended, as of
the date of such amendment, which shall be deemed to supersede such original filing, and fairly present in all material respects the
financial position of the Company as of and for the dates thereof and the results of operations and cash flows for the periods then
ended, subject, in the case of unaudited statements, to normal, year-end audit adjustments. Notwithstanding the foregoing, this
representation and warranty shall not apply to any statement or information in the SEC Reports that relates or arises from the
topics referenced in the Company SEC Guidance, and any restatement, revision or other modification to the SEC Reports (including any
financial statements contained therein) relating to or arising from the Company SEC Guidance shall not be deemed material
noncompliance for purposes of this Agreement or the other Transaction Documents.
10
(m) As
of the date hereof, the authorized share capital of the Company is $55,500 divided into 500,000,000 Class A Ordinary Shares, 50,000,000
Class B ordinary shares, par value $0.0001 per share (the “Class B Ordinary Shares” and, together with the Class A
Ordinary Shares, the “Ordinary Shares”) and 5,000,000 preference shares of a par value of $0.0001 (the “Preference
Shares”). As of the date hereof and immediately prior to the Domestication and prior to giving effect to the Closing and the
Business Combination: (i) 23,665,000 Class A Ordinary Shares, 7,666,667 Class B Ordinary Shares (the “Founder Shares”)
and no Preference Shares were issued and outstanding; (ii) 7,666,667 public warrants, each exercisable to purchase one Class A Ordinary
Share at $11.50 per share, and 221,667 private placement warrants, each exercisable to purchase one Class A Ordinary Share at $11.50 per
share (together, the “Outstanding Warrants”), were issued and outstanding; and (iii) no Ordinary Shares were subject
to issuance upon exercise of outstanding options. No Outstanding Warrants are convertible on or prior to the closing of the Business Combination.
All (A) issued and outstanding Ordinary Shares have been duly authorized and validly issued, are fully paid and non-assessable and are
not subject to preemptive rights and (B) Outstanding Warrants have been duly authorized and validly issued, are fully paid and are not
subject to preemptive rights. As of the date hereof, except as set forth above and pursuant to the Business Combination Agreement, there
are no outstanding options, warrants or other rights to subscribe for, purchase or acquire from the Company any Ordinary Shares or other
equity interests in the Company (collectively, “Equity Interests”) or securities convertible into or exchangeable or
exercisable for Equity Interests. Except as set forth in the Business Combination Agreement, as of the date hereof, the Company has no
subsidiaries and does not own, directly or indirectly, interests or investments (whether equity or debt) in any person, whether incorporated
or unincorporated. There are no shareholder agreements, voting trusts or other agreements or understandings to which the Company is a
party or by which it is bound relating to the voting of any Equity Interests, other than (A) as set forth in the SEC Reports and (B) as
contemplated by the Business Combination Agreement. Except as described in the SEC Reports, there are no securities or instruments issued
by or to which the Company is a party containing anti-dilution or similar provisions that will be triggered by the issuance of the Securities.
(n) The
issued and outstanding Class A Ordinary Shares are registered pursuant to Section 12(b) of the Exchange Act, and are listed for trading
on the Stock Exchange under the symbol “CMII.” Except as set forth in the SEC Reports or as contemplated by the Business Combination
Agreement: (i) there is no suit, Action, Proceeding or investigation pending or, to the knowledge of the Company, threatened against the
Company by the Stock Exchange or the SEC with respect to any intention by such entity to deregister the Class A Ordinary Shares or prohibit
or terminate the listing of the Class A Ordinary Shares on the Stock Exchange and (ii) the Company has taken no action that is designed
to terminate the registration of the Class A Ordinary Shares under the Exchange Act. Following the Domestication and upon consummation
of the Business Combination, the shares of Common Stock are expected to be registered under the Exchange Act and listed for trading on
the Stock Exchange.
(o) To
the knowledge of the Company, the Company is not, and immediately after receipt of payment for the Securities and consummation of the
Business Combination, will not be, an “investment company” within the meaning of the Investment Company Act of 1940, as amended.
(p) Neither
the Company nor, to the knowledge of the Company, any agent or other person acting on behalf of the Company has (i) directly or indirectly,
used any funds for unlawful contributions, gifts, entertainment or other unlawful expenses related to foreign or domestic political activity,
(ii) made any unlawful payment to foreign or domestic government officials or employees or to any foreign or domestic political parties
or campaigns from corporate funds, (iii) failed to disclose fully any contribution made by the Company (or made by any person acting on
its behalf of which the Company is aware) which is in violation of law or (iv) violated in any material respect any provision of the Foreign
Corrupt Practices Act of 1977, as amended.
(q) The
Company’s accounting firm is WithumSmith+Brown, PC. To the knowledge and belief of the Company, such accounting firm is a registered
public accounting firm as required by the Exchange Act.
11
(r) There
are no disagreements of any kind presently existing, or reasonably anticipated by the Company to arise, between the Company and the accountants
and lawyers formerly or presently employed by the Company and the Company is current with respect to any fees owed to its accountants
and lawyers which could affect the Company’s ability to perform any of its obligations under any of the Transaction Documents.
(s) The
Company acknowledges and agrees that the Purchaser is acting solely in the capacity of an arm’s length purchaser with respect to
the Transaction Documents and the transactions contemplated thereby. The Company further acknowledges that the Purchaser is not acting
as a financial advisor or fiduciary of the Company (or in any similar capacity) with respect to the Transaction Documents and the transactions
contemplated thereby and any advice given by the Purchaser or any of its representatives or agents in connection with the Transaction
Documents and the transactions contemplated thereby is merely incidental to the Purchaser’s purchase of the Securities. The Company
further represents to the Purchaser that the Company’s decision to enter into this Agreement and the other Transaction Documents
has been based solely on the independent evaluation of the transactions contemplated hereby by the Company and its representatives.
(t) The
Company has not, and to its knowledge no one acting on its behalf has, taken, directly or indirectly, any action designed to cause or
to result in the stabilization or manipulation of the price of any security of the Company to facilitate the sale or resale of any of
the Securities.
3.2 Representations
and Warranties of the Purchaser. The Purchaser hereby represents and warrants as of the date of this Agreement and as of the Closing
Date (or, if such representations and warranties are made with respect to a specified date, as of such date):
(a) The
Purchaser is either an individual or an entity duly incorporated or formed, validly existing and in good standing under the laws of its
jurisdiction of formation or incorporation with the requisite power and authority to enter into and perform its obligations under the
Transaction Documents.
(b) Each
Transaction Document to which it is a party has been duly authorized, executed and delivered by the Purchaser, and assuming the due authorization,
execution and delivery of the same by the Company, each Transaction Document to which the Purchaser is a party shall constitute the valid
and legally binding obligation of the Purchaser, enforceable against the Purchaser in accordance with its terms, subject to the Enforceability
Exceptions.
(c) The
execution, delivery and performance of the Transaction Documents, including the purchase of the Securities hereunder, the compliance by
the Purchaser with all of the provisions of the Transaction Documents and the consummation of the transactions contemplated herein will
not conflict with or result in a breach or violation of any of the terms or provisions of, or constitute a default under, or result in
the creation or imposition of any lien, charge or encumbrance upon any of the property or assets of the Purchaser pursuant to the terms
of (i) any indenture, mortgage, deed of trust, loan agreement, lease, license or other agreement or instrument to which the Purchaser
is a party or by which the Purchaser is bound or to which any of the property or assets of the Purchaser is subject; (ii) the Organizational
Documents of the Purchaser; or (iii) any statute or any judgment, order, rule or regulation of any court or governmental agency or body,
domestic or foreign, having jurisdiction over the Purchaser or any of its properties that in the case of clauses (i) and (iii), would
reasonably be expected to have a material adverse effect on the Purchaser’s ability to consummate the transactions contemplated
by the Transaction Documents, including the purchase of the Securities.
(d) The
execution, delivery and performance of the Transaction Documents do not require Purchaser to obtain any consent, waiver, authorization
or order of, give any notice to, or make any filing or registration with, any court or other federal, state, local or other governmental
authority, self-regulatory organization or other person, other than the filing of notifications under the HSR Act and other Antitrust
Laws, if applicable.
12
(e) At
the time the Purchaser was offered the Securities, it was, and as of the date hereof it is, and on each date on which it exercises
any Warrants or converts any shares of Preferred Stock, it will be: (i) a “qualified institutional buyer” (as defined in
Rule 144A under the Securities Act) or an institutional “accredited investor” (as described in Rule 501(a)(1), (2), (3)
(7), (8) or (12) and (13) under the Securities Act) satisfying the applicable requirements set forth on Annex A, (ii) is
acquiring the Securities only for its own account and not for the account of others, or if Purchaser is subscribing for the
Securities as a fiduciary or agent for one or more investor accounts, each owner of such account is a qualified institutional buyer,
and Purchaser has full investment discretion with respect to each such account, and the full power and authority to make the
acknowledgements, representations, warranties and agreements herein on behalf of each owner of each such account and (iii) is not
acquiring the Securities with a view to, or for offer or sale in connection with, any distribution thereof in violation of the
Securities Act (and shall provide the requested information on Annex A following the signature page hereto). Purchaser is not
an entity formed for the specific purpose of acquiring the Securities. Purchaser understands that this offering meets the exemptions
from filing under FINRA Rule 5123(b)(1)(C) or (J).
(f) Purchaser
(i) is an institutional account as defined in FINRA Rule 4512(c), (ii) is a sophisticated investor, experienced in investing in private
equity transactions and capable of evaluating investment risks independently, both in general and with regard to all transactions and
investment strategies involving a security or securities and (iii) has exercised independent judgment in evaluating its participation
in this offering. Accordingly, Purchaser understands that this offering meets (i) the exemptions from filing under FINRA Rule 5123(b)(1)(A)
and (ii) the institutional customer exemption under FINRA Rule 2111(b).
(g) The
Purchaser acknowledges and agrees that the Securities are being offered in a transaction not involving any public offering within the
meaning of the Securities Act and that the Securities have not been registered under the Securities Act or the securities laws of any
state in the United States or other jurisdiction and that the Company is not required to register the Securities except as set forth in
the Registration Rights Agreement. The Purchaser acknowledges and agrees that the Securities may not be offered, resold, transferred,
pledged or otherwise disposed of by the Purchaser absent an effective registration statement under the Securities Act, except (i) to the
Company or a subsidiary thereof, (ii) pursuant to an applicable exemption from the registration requirements of the Securities Act (including
without limitation a private resale pursuant to so called “Section 4(a)1½”), or (iii) an ordinary course pledge such
as a broker lien over account property generally, and, in each of clauses (i)-(iii), in accordance with any applicable securities laws
of the states and other jurisdictions of the United States, and that any certificates or account entries representing the Securities shall
contain a restrictive legend to such effect. The Purchaser acknowledges and agrees that the Securities will be subject to these securities
law transfer restrictions, and as a result of these transfer restrictions, the Purchaser may not be able to readily offer, resell, transfer,
pledge or otherwise dispose of the Securities and may be required to bear the financial risk of an investment in the Securities for an
indefinite period of time. The Purchaser acknowledges and agrees that the Securities will not be immediately eligible for offer, resale,
transfer, pledge or disposition pursuant to Rule 144 promulgated under the Securities Act until at least one year following the filing
of certain required information with the SEC after the Closing Date. The Purchaser acknowledges and agrees that it has been advised to
consult legal counsel prior to making any offer, resale, pledge or transfer of any of the Securities.
(h) The
Purchaser understands and agrees that it is purchasing the Securities directly from the Company. The Purchaser further acknowledges that
there have not been, and the Purchaser hereby agrees that it is not relying on, any representations, warranties, covenants or agreements
made to the Purchaser by the Company, the Target, the Sponsor, the Placement Agents, any of their respective Affiliates or any control
persons, officers, directors, employees, partners, agents or representatives, any other party to the Business Combination or any other
person or entity, expressly or by implication, other than those representations, warranties, covenants and agreements of the Company and
the Target set forth in this Agreement. The Purchaser agrees that none of (i) any other Purchaser (including the controlling persons,
members, officers, directors, partners, agents, or employees of any such other Purchaser), (ii) the Sponsor, its Affiliates (other than
the Company), or any of its or its’ Affiliates respective control persons, officers, directors or employees, (iii) the Placement
Agents, their Affiliates, or any of their or their Affiliates’ respective control persons, officers, directors or employees, or
(iii) any other party to the Business Combination Agreement, including any such party’s representatives, Affiliates or any of its
or their control persons, officers, directors or employees, that is not a party hereto, shall be liable to the Purchaser pursuant to this
Agreement for any action heretofore or hereafter taken or omitted to be taken by any of them in connection with the purchase of the Securities.
On behalf of the Purchaser and its affiliates, the Purchaser releases the Placement Agent or any of its respective Affiliates in respect
of any losses, claims, damages, obligations, penalties, judgments, awards, liabilities, costs, expenses or disbursements related to this
offering and this Agreement. Purchaser agrees not to commence any litigation or bring any claim against the Placement Agent or any of
its Affiliates in any court or any other forum which relates to, may arise out of, or is in connection with, this offering and this Agreement.
This undertaking is given freely and after obtaining independent legal advice.
13
(i) In
making its decision to purchase the Securities, the Purchaser has relied solely upon independent investigation made by the Purchaser and
the Company’s and the Target’s representations in Sections 3.1 and 3.3, respectively, of this Agreement. The
Purchaser acknowledges and agrees that the Purchaser has received such information as the Purchaser deems necessary in order to make an
investment decision with respect to the Securities, including with respect to the Company, the Target and the Business Combination, and
made its own assessment and is satisfied concerning the relevant financial, tax and other economic considerations relevant to the Purchaser’s
investment in the Securities. Without limiting the generality of the foregoing, the Purchaser acknowledges that it has reviewed the Company’s
filings with the SEC. The Purchaser represents and agrees that the Purchaser and the Purchaser’s professional advisor(s), if any,
have had the full opportunity to ask such questions, receive such answers and obtain such information as the Purchaser and the Purchaser’s
professional advisor(s), if any, have deemed necessary to make an investment decision with respect to the Securities. The Purchaser acknowledges
that certain information provided by the Company and the Target was based on projections, and such projections were prepared in good faith
and based on assumptions and estimates that are inherently uncertain and are subject to a wide variety of significant business, economic
and competitive risks and uncertainties that could cause actual results to differ materially from those contained in the projections.
The Purchaser further acknowledges that such information and projections were prepared without the participation of the Placement Agents
and that the Placement Agents do not assume responsibility for independent verification of, or the accuracy or completeness of, such information
or projections. The Purchaser further acknowledges that the information provided to the Purchaser was preliminary and subject to change,
including in the registration statement and the proxy statement and/or prospectus that the Company intends to file with the SEC in connection
with the Business Combination (which will include substantial additional information about the Company, the Target and the Business Combination
and will update and supersede the information previously provided to the Purchaser). The Purchaser acknowledges and agrees that none of
the Sponsor or any of its Affiliates or any of such Person’s or its Affiliate’s control persons, officers, directors, employees
or other representatives, legal counsel, financial advisors, accountants or agents, including the Placement Agents (collectively, “Representatives”)
has provided the Purchaser with any information, recommendation or advice with respect to the Securities nor is such information, recommendation
or advice necessary or desired. None of the Sponsor or any of its respective Affiliates or Representatives has made or makes any representation
as to the Company or the Target or the quality or value of the Securities. In addition, the Company, the Target, the Sponsor, the Placement
Agents and their respective Affiliates or Representatives may have acquired non-public information with respect to the Company or the
Target which the Purchaser agrees need not be provided to it. In connection with the issuance of the Securities to the Purchaser, none
of the Company, the Target, the Sponsor, the Placement Agents or any of their respective Affiliates or Representatives has acted as a
financial advisor or fiduciary to the Purchaser.
(j) The
Purchaser became aware of this offering of the Securities solely by means of direct contact between the Purchaser and the Company or its
Affiliates, by means of direct contact between the Purchaser and the Target or its Affiliates or by means of direct contact between the
Purchaser and a Placement Agent, and Securities were offered to the Purchaser solely by direct contact between the Purchaser and the Company
or its Affiliates or agents, including a Placement Agent. The Purchaser did not become aware of this offering of the Securities, nor were
the Securities offered to the Purchaser, by any other means. The Purchaser acknowledges that the Company represents and warrants that
the Securities (i) were not offered by any form of general solicitation or general advertising (within the meaning of Regulation D of
the Securities Act) and (ii) are not being offered in a manner involving a public offering under, or in a distribution in violation of,
the Securities Act, or any state securities laws.
(k) The
Purchaser acknowledges that it is aware that there are substantial risks incident to the purchase and ownership of the Securities, including
those set forth in the SEC Reports. The Purchaser has such knowledge and experience in financial and business matters as to be capable
of evaluating the merits and risks of an investment in the Securities, and the Purchaser has had an opportunity to seek, and has sought,
such accounting, legal, business and tax advice as the Purchaser has considered necessary to make an informed investment decision. The
Purchaser (i) is an institutional account as defined in FINRA Rule 4512(c), (ii) is a sophisticated investor, experienced in investing
in private equity transactions and capable of evaluating investment risks independently, both in general and with regard to all transactions
and investment strategies involving a security or securities, and (iii) has exercised independent judgment in evaluating its participation
in the purchase of the Securities. The Purchaser understands and acknowledges that the purchase and sale of the Securities hereunder meets
(i) the exemptions from filing under FINRA Rule 5123(b)(1)(A) and (ii) the institutional customer exemption under FINRA Rule 2111(b).
14
(l) The
Purchaser has adequately analyzed and fully considered the risks of an investment in the Securities and determined that the Securities
are a suitable investment for the Purchaser and that the Purchaser is able at this time and in the foreseeable future to bear the economic
risk of a total loss of the Purchaser’s investment in the Company. The Purchaser acknowledges specifically that a possibility of
total loss exists. The Purchaser acknowledges specifically that a possibility of total loss exists and will not look to the Placement
Agent for all or part of any such loss or losses the Purchaser may suffer.
(m) The
Purchaser understands and agrees that no federal or state agency has passed upon or endorsed the merits of the offering of the Securities
or made any findings or determination as to the fairness of this investment.
(n) The
Purchaser is not (i) a person or entity named on the List of Specially Designated Nationals and Blocked Persons (“SDN List”)
administered by the U.S. Treasury Department’s Office of Foreign Assets Control (“OFAC”) or in any Executive
Order issued by the President of the United States and administered by OFAC (“OFAC List”), or a person or entity prohibited
by any OFAC sanctions program, (ii) a Designated National as defined in the Cuban Assets Control Regulations, 31 C.F.R. Part 515, or (iii)
a non-U.S. shell bank or providing banking services indirectly to a non-U.S. shell bank. The Purchaser agrees to provide law enforcement
agencies, if requested thereby, such records as required by applicable law, provided that the Purchaser is permitted to do so under applicable
law. If the Purchaser is a financial institution subject to the Bank Secrecy Act (31 U.S.C. Section 5311 et seq.), as amended by the USA
PATRIOT Act of 2001, and its implementing regulations (collectively, the “BSA/PATRIOT Act”), the Purchaser maintains
policies and procedures reasonably designed to comply with applicable obligations under the BSA/PATRIOT Act. To the extent required, the
Purchaser maintains policies and procedures reasonably designed for the screening of its investors against the OFAC sanctions programs,
including the OFAC List. To the extent required, the Purchaser maintains policies and procedures reasonably designed to ensure that the
funds held by the Purchaser and used to purchase the Securities were legally derived.
(o) No
foreign person (as defined in 31 C.F.R. Part 800.224) in which the national or subnational governments of a single foreign state have
a substantial interest (as defined in 31 C.F.R. Part 800.244) will acquire a substantial interest in the Company as a result of the purchase
and sale of Securities hereunder such that a declaration to the Committee on Foreign Investment in the United States would be mandatory
under 31 C.F.R. Part 800.401, and no foreign person will have control (as defined in 31 C.F.R. Part 800.208) over the Company from and
after the Closing as a result of the purchase and sale of Securities hereunder.
(p) The
Purchaser will have sufficient funds to pay the Subscription Amount pursuant to Section 2.2(b)(iii) of this Agreement and any expenses
incurred by the Purchaser in connection with the transactions contemplated by or in connection with the Transaction Documents; (ii) has
the resources and capabilities (financial or otherwise) to perform its obligations under the Transaction Documents; and (iii) has not
incurred any obligation, commitment, restriction or liability of any kind, absolute or contingent, present or future, which would impair
or adversely affect its ability to perform its obligations under the Transaction Documents.
(q) The
Purchaser acknowledges that it is not relying upon, and has not relied upon, any statement, representation or warranty made by any person,
firm or corporation (including, without limitation, the Company, the Target, the Sponsor, the Placement Agents or any of their respective
Affiliates or any of their respective or their respective Affiliates’ control persons, officers, directors, employees, agents or
representatives), other than the representations and warranties of the Company and the Target contained in Sections 3.1 and 3.3,
respectively, of this Agreement, in making its investment or decision to invest in the Company. The Purchaser agrees that none of (i)
any other Purchaser or any other Person participating in any other private placement of shares of Common Stock (including the controlling
persons, officers, directors, partners, agents or employees of any such other Person), (ii) the Company, its Affiliates or any of its
or their respective Affiliates’ control persons, officers, directors, partners, agents, employees or representatives, (iii) the
Sponsor, its Affiliates or any of its or their respective Affiliates’ control persons, officers, directors, partners, agents, employees
or representatives nor (iv) the Placement Agents, their Affiliates or any of the Placement Agents’ or their Affiliates’ respective
Affiliates’ control persons, officers, directors, partners, agents, employees or representatives shall be liable to the Purchaser
or any other Purchaser pursuant to the Transaction Documents or any other agreement related to a private placement of Securities for any
action heretofore or hereafter taken or omitted to be taken by any of them in connection with the purchase of the Securities hereunder
or thereunder.
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(r) At
all times on or prior to the Closing Date, the Purchaser has no binding commitment to dispose of, or otherwise transfer (directly or indirectly),
any of the Securities.
(s) The
Purchaser hereby agrees that neither it, nor any person or entity acting on its behalf or pursuant to any understanding with the Purchaser,
shall, directly or indirectly, engage in any hedging activities or execute any Short Sales with respect to the securities of the Company
from the date hereof until the Closing or the earlier termination of this Agreement in accordance with its terms.
(t) Except
as expressly disclosed in a Schedule 13D or Schedule 13G (or amendments thereto) filed by the Purchaser with the SEC with respect to the
beneficial ownership of the Company’s outstanding securities prior to the date hereof, the Purchaser is not currently (and at all
times through Closing will refrain from being or becoming) a member of a “group” (within the meaning of Section 13(d)(3) or
Section 14(d)(2) of the Exchange Act, or any successor provision), including any group acting for the purpose of acquiring, holding or
disposing of equity securities of the Company (within the meaning of Rule 13d-5(b)(1) under the Exchange Act).
(u) The
Purchaser acknowledges that (i) the Company, the Target, the Sponsor, the Placement Agents and any of their respective Affiliates, control
persons, officers, directors, employees, agents or representatives currently may have, and later may come into possession of, information
regarding the Company and the Target that is not known to the Purchaser and that may be material to a decision to purchase the Securities,
(ii) the Purchaser has determined to purchase the Securities notwithstanding its lack of knowledge of such information, and (iii) none
of the Company, the Target, the Sponsor, the Placement Agents or any of their respective Affiliates, control persons, officers, directors,
employees, agents or representatives shall have liability to the Purchaser, and the Purchaser hereby, to the extent permitted by law,
waives and releases any claims it may have against the Company, the Target, the Sponsor, the Placement Agents and their respective Affiliates,
control persons, officers, directors, employees, agents or representatives, with respect to the nondisclosure of such information.
(v) The
Purchaser acknowledges its obligations under applicable securities laws with respect to the treatment of non-public information relating
to the Company.
(w) The
Purchaser is aware that Barclays is acting as capital markets adviser and placement agent to the Target in connection with an offering
of its securities in connection with the Business Combination. Purchaser understands and acknowledges that Barclays’ role as capital
markets advisor and placement agent to the Target in connection with the Business Combination may give rise to potential conflicts of
interest or the appearance thereof. The Purchaser is also aware that Cantor Fitzgerald & Co. and Cohen & Company Securities, LLC
are acting as financial advisors to the Company in connection with the Business Combination. Purchaser understands and acknowledges that
Cantor Fitzgerald & Co.’s and Cohen & Company Securities, LLC’s role as financial advisors to the Company in connection
with the Business Combination may give rise to potential conflicts of interest or the appearance thereof.
(x) The
Purchaser further acknowledges that the Purchaser has not relied upon the Placement Agents in connection with the Purchaser’s
due diligence review of the offering of the Securities and the Company. The Purchaser acknowledges and agrees that (i) it has been
informed that each Placement Agent is acting solely as placement agent in connection with the Transactions and is not acting as an
underwriter or in any other capacity in connection with the Transactions and is not and shall not be construed as a fiduciary for
the Purchaser in connection with the Transactions, (ii) each Placement Agent is acting solely as placement agent on a several basis
and not jointly with any other Placement Agent and no Placement Agent shall be responsible or liable for the actions, omissions or
obligations of any other Placement Agent, (iii) it has not relied on the Placement Agents in connection with its determination as to
the legality of its acquisition of the Securities or as to the other matters referenced herein, (iv) it has not relied on any
investigation that the Placement Agents, any of their respective Affiliates or any other person acting on their behalf has conducted
with respect to the Securities or the Company, the Target or the Sponsor, (v) the Placement Agents have not made and will not make
any representation or warranty, whether express or implied, of any kind or character and have not provided any advice, including
without limitation financial advice, or recommendation in connection with the Transactions, in each case, to the Purchaser, (vi) the
Placement Agents have not solicited any action from the Purchaser with respect to the offer and sale of the Securities, and (vii)
the Placement Agents will have no responsibility to the Purchaser with respect to (A) any representations, warranties or agreements
made by any person or entity under or in connection with the Transactions or any of the documents furnished pursuant thereto or in
connection therewith, or the execution, legality, validity or enforceability (with respect to any person) or any thereof, or (B) the
business, condition (financial and otherwise), management, operations, properties, prospects or projections of the Company, the
Target, the Sponsor or the Transactions.
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(y) The
Purchaser acknowledges that no disclosure or offering document has been prepared by the Placement Agents in connection with the offer
and sale of the Securities. The Purchaser acknowledges that none of the Placement Agents or any Affiliate of the Placement Agents has
provided the Purchaser with any information or advice with respect to the Securities nor is such information or advice necessary or desired.
None of Placement Agents or any Affiliate has made or makes any representation as to the Company or Target or the quality or value of
the Company, the Target or the Securities.
(z) The
Purchaser acknowledges that none of the Placement Agents, nor any of their respective Affiliates, nor any control persons, officers, directors,
employees, agents or representatives of any of the foregoing has made any independent investigation with respect to the Company, the Target,
the Sponsor or any of their subsidiaries or any of their respective businesses, or the Securities or the accuracy, completeness or adequacy
of any information supplied to the Purchaser, and do not intend to make any representation or warranty with respect to the Company, the
Target, the Sponsor, the Securities or the accuracy, completeness or adequacy of any information supplied to the Purchaser by the Company,
the Target, the Sponsor or their Affiliates or Representatives.
(aa) The Purchaser
either (i) is a “citizen of the United States” as defined in 49 U.S.C. § 40102(a)(15) or (ii) has disclosed in writing
to the Company and the Target, prior to the execution of this Agreement, that it is not a citizen of the United States within the meaning
of such definition.
(bb) The Company
has not entered into, and will not enter into, any Series A SPA or other agreement or any definitive transaction document, side letter,
undertaking letter or other similar agreement or instrument with any investor in the Preferred Stock of Warrants contemplated hereby with
terms and conditions that are more favorable than the terms and conditions provided to the Purchaser under this Agreement.
3.3 Representations
and Warranties of the Target. The Target represents and warrants to the Purchaser, as of the date of this Agreement and as of
the Closing Date (or, if such representations and warranties are made with respect to a specified date, as of such date):
(a) The
Target is duly organized and validly existing and in good standing under the laws of the jurisdiction in which it is formed. The Target
is duly qualified as a foreign entity to do business and is in good standing in every jurisdiction in which its ownership of property
or the nature of the business conducted by it makes such qualification necessary, except to the extent that the failure to be so qualified
or be in good standing would not reasonably be expected to have a Target Material Adverse Effect.
(b) The
Target has the requisite power and authority to enter into and perform its obligations under the Business Combination Agreement, this
Agreement and the other Transaction Documents. The execution and delivery of the Business Combination Agreement, this Agreement and the
other Transaction Documents by the Target, and the consummation by the Target of the transactions contemplated hereby and thereby, have
been duly authorized by the Target’s board of directors, and no further filing, consent or authorization is required by the Target
or its stockholders. The Business Combination Agreement and this Agreement have been, and the other Transaction Documents to which it
is a party will be prior to the Closing, duly executed and delivered by the Target, and each constitutes the legal, valid and binding
obligations of the Target, enforceable against the Target in accordance with its respective terms, except as limited by Enforceability
Exceptions.
(c) Assuming
the accuracy of the representations and warranties of the parties to this Agreement, the Target is not required to obtain any consent,
waiver, authorization or order of, give any notice to, or make any filing or registration with, any court or other federal, state, local
or other governmental authority, self-regulatory organization or other person in connection with the execution, delivery and performance
of this Agreement or the other Transaction Documents (including, without limitation, the issuance of the Securities), other than (i) filings
required by (x) applicable state securities laws and (y) the HSR Act or other applicable Antitrust Laws and (ii) those filings, the failure
of which to obtain would not have a Target Material Adverse Effect.
(d) The
information and materials previously provided by or on behalf of the Target to the Purchaser (if any) in connection with the offer
and sale of the Securities, have been prepared in a good faith effort by the Target to describe the Target’s present and
proposed business. The Target acknowledges and agrees that the Purchaser is not making and has not made any representations or
warranties with respect to the transactions contemplated hereby other than those specifically set forth in Section 3.2.
Notwithstanding the foregoing, the Target make no representation, warranty or covenant with respect to any information supplied by
or on behalf of the Company, the Purchaser or its or their respective Affiliates.
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3.4 Additional
Representations and Warranties of the Target. Subject to the qualifications, exceptions and disclosures related thereto in the
Business Combination Agreement, the Target hereby makes each of the representations and warranties of the Company (as defined in the Business
Combination Agreement) set forth in the fully-executed Business Combination Agreement as if such representations and warranties were initially
made to the Purchaser and set forth in this Agreement in their entirety, mutatis mutandis.
ARTICLE 4
OTHER AGREEMENTS OF THE PARTIES
4.1 Transfer Restrictions.
(a) The
Securities may only be disposed of in compliance with state and federal securities laws. In connection with any transfer of Securities
other than pursuant to an effective registration statement or Rule 144, to the Company or to an Affiliate of the Purchaser or in connection
with a pledge as contemplated in Section 4.1(b), the Company may require the transferor thereof to provide to the Company an opinion
of counsel selected by the transferor and reasonably acceptable to the Company, the form and substance of which opinion shall be reasonably
satisfactory to the Company, to the effect that such transfer does not require registration of such transferred Securities under the Securities
Act. As a condition of transfer, any such transferee shall agree in writing to be bound by the terms of this Agreement and, if permitted
pursuant to the terms thereof, the Registration Rights Agreement and shall have the rights and obligations of the Purchaser under this
Agreement and the Registration Rights Agreement, if a party thereto.
(b) The
Purchaser agrees to the imprinting, so long as is required by this Section 4.1, of a legend on any of the Securities in the following
form:
NEITHER THIS SECURITY NOR THE SECURITIES
INTO WHICH THIS SECURITY IS CONVERTIBLE HAS BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION OR THE SECURITIES COMMISSION OF
ANY STATE IN RELIANCE UPON AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”),
AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT
TO AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE
WITH APPLICABLE STATE SECURITIES LAWS. THIS SECURITY AND THE SECURITIES ISSUABLE UPON CONVERSION OF THIS SECURITY MAY BE PLEDGED IN CONNECTION
WITH A BONA FIDE MARGIN ACCOUNT WITH A REGISTERED BROKER-DEALER OR OTHER LOAN WITH A FINANCIAL INSTITUTION THAT IS AN “ACCREDITED
INVESTOR” AS DEFINED IN RULE 501(a) UNDER THE SECURITIES ACT OR OTHER LOAN SECURED BY SUCH SECURITIES.
The Company
acknowledges and agrees that the Purchaser may from time to time pledge pursuant to a bona fide margin agreement with a registered
broker-dealer or grant a security interest in some or all of the Securities to a financial institution that is an “accredited
investor” as defined in Rule 501(a) under the Securities Act and who agrees to be bound by the provisions of this Agreement
and, if required under the terms of such arrangement, the Purchaser may transfer pledged or secured Securities to the pledgees or
secured parties; provided, however, that, as a prerequisite to such pledge, the Purchaser shall (x) provide notice to the Company of
such pledge or transfer at least five (5) Business Days prior thereto and (y) cause to be delivered to the Company customary legal
opinions of legal counsel of the pledgee, secured party and pledgor as shall be reasonably requested by the Company in connection
therewith. Thereafter, at the Purchaser’s expense, the Company will execute and deliver such reasonable documentation as a
pledgee or secured party of Securities may reasonably request in connection with a pledge or transfer of the Securities, including,
if the Securities are subject to registration pursuant to the Registration Rights Agreement, the preparation and filing of any
required prospectus supplement under Rule 424(b) under the Securities Act or other applicable provision of the Securities Act to
appropriately amend the list of selling securityholders thereunder.
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(c) Certificates
(or reasonable evidence of issuance by book entry, as applicable) evidencing the Underlying Shares shall not contain any legend (including
the legend set forth in Section 4.1(b) hereof): (i) while a registration statement (including the Registration Statement) covering
the resale of such security is effective under the Securities Act, (ii) following any sale of such Underlying Shares pursuant to Rule
144 or (iii) as otherwise provided in the Certificate of Designation. The Company shall use commercially reasonable efforts to cause its
counsel to issue a legal opinion to the Transfer Agent or the Purchaser promptly after the Effective Date if required by the Transfer
Agent to effect the removal of the legend hereunder or if requested by the Purchaser, respectively, in each case, if the proposed sale
is to be made pursuant to an effective registration statement or subject to an exemption from registration under the federal securities
laws. If all or any shares of Preferred Stock are converted or any portion of a Warrant is exercised at a time when there is an effective
registration statement to cover the resale of the Underlying Shares, or if such Underlying Shares may be sold under Rule 144 and the Company
is then in compliance with the current public information required under Rule 144(c)(1) (or Rule 144(i)(2), if applicable), or if the
Underlying Shares may be sold under Rule 144 without the requirement for the Company to be in compliance with the current public information
required under required under Rule 144(c)(1) (or Rule 144(i)(2), if applicable) as to such Underlying Shares and without volume or manner-of-sale
restrictions or if such legend is not otherwise required under applicable requirements of the Securities Act (including judicial interpretations
and pronouncements issued by the staff of the SEC) or as provided in the Certificate of Designation or Warrants, then such Underlying
Shares shall be issued free of all legends. The Company agrees that following the Effective Date or at such time as such legend is no
longer required under this Section 4.1(c), it will, no later than the number of Trading Days comprising the Standard Settlement
Period (as defined below) following the delivery by a Purchaser to the Company or the Transfer Agent of a certificate (or reasonable evidence
of issuance by book entry, as applicable) representing Underlying Shares, as applicable, issued with a restrictive legend, deliver or
cause to be delivered to the Purchaser a certificate (or reasonable evidence of issuance by book entry, as applicable) representing such
shares that is free from all restrictive and other legends. The Company may not make any notation on its records or give instructions
to the Transfer Agent that enlarge the restrictions on transfer set forth in this Section 4.1. Certificates for Underlying Shares
subject to legend removal hereunder shall be transmitted by the Transfer Agent to the Purchaser by crediting the account of the Purchaser’s
prime broker with the Depository Trust Company System as directed by the Purchaser. As used herein, “Standard Settlement Period”
means the standard settlement period, expressed in a number of Trading Days, on the Company’s primary Trading Market with respect
to the Common Stock as in effect on the date of delivery of a certificate (or reasonable evidence of issuance by book entry, as applicable)
representing Underlying Shares, as applicable, issued with a restrictive legend.
(d) The
Purchaser agrees with the Company that the Purchaser will sell any Securities pursuant to either the registration requirements of the
Securities Act, including any applicable prospectus delivery requirements, or an exemption therefrom, and that if Securities are sold
pursuant to a Registration Statement, they will be sold in compliance with the plan of distribution set forth therein, and acknowledges
that the removal of the restrictive legend from certificates (or reasonable evidence of issuance by book entry, as applicable) representing
Securities as set forth in this Section 4.1 is predicated upon the Company’s reliance upon this understanding.
4.2 Acknowledgment
of Dilution. The Company acknowledges that the issuance of the Securities may result in dilution of the then-outstanding shares
of Common Stock, which dilution may be substantial under certain market conditions. The Company further acknowledges that its obligations
under the Transaction Documents, including, without limitation, its obligation to issue the Underlying Shares pursuant to the Transaction
Documents, are unconditional and absolute and not subject to any right of set off, counterclaim, delay or reduction, regardless of the
effect of any such dilution or any claim the Company may have against the Purchaser and regardless of the dilutive effect that such issuance
may have on the ownership of the other equity holders of the Company.
4.3 Furnishing
of Information; Public Information. From the Closing Date until the time that the Purchaser does not own any Securities, the Company
shall use commercially reasonable efforts to maintain the registration of the Common Stock under Section 12(b) or 12(g) of the Exchange
Act and to timely file all reports required to be filed by the Company after the date hereof pursuant to the Exchange Act even if the
Company is not then subject to the reporting requirements of the Exchange Act.
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4.4 Integration.
The Company shall not sell, offer for sale or solicit offers to buy or otherwise negotiate in respect of any security (as defined in Section
2 of the Securities Act) that would be integrated with the offer or sale of the Securities in a manner that would require the registration
under the Securities Act of the sale of the Securities or that would be integrated with the offer or sale of the Securities for purposes
of the rules and regulations of any Trading Market such that it would require stockholder approval prior to the closing of such other
transaction unless stockholder approval is obtained before the closing of such subsequent transaction.
4.5 Conversion
and Exercise Procedures. Each of the form of Notice of Exercise included in the Warrants and the form of Notice of Conversion
included in the Certificate of Designation set forth the totality of the procedures required of the Purchaser in order to exercise the
Warrants or convert its Preferred Stock. Without limiting the preceding sentences, no ink-original Notice of Exercise or Notice of Conversion
shall be required, nor shall any medallion guarantee (or other type of guarantee or notarization) of any Notice of Exercise or Notice
of Conversion form be required in order to exercise the Warrants or convert its Preferred Stock. No additional legal opinion, other information
or instructions shall be required of the Purchaser to exercise its Warrants or convert its Preferred Stock. The Company shall honor exercises
of the Purchaser’s Warrants and conversions of the Purchaser’s Preferred Stock and shall deliver Underlying Shares in accordance
with the terms, conditions and time periods set forth in the Transaction Documents.
4.6 Securities
Laws Disclosure; Publicity. Neither the Company nor the Target shall publicly disclose the name of the Purchaser, or include the
name of the Purchaser in any filing with the SEC or any regulatory agency or Trading Market, without the prior written consent of the
Purchaser (not to be unreasonably withheld, delayed or conditioned), except (a) as required by federal securities law or requested
by the staff of the SEC in connection with (i) any filings in connection with the Business Combination, (ii) any registration statement
contemplated by the Registration Rights Agreement and (iii) the filing of final Transaction Documents with the SEC and (b) to the extent
such disclosure is required by law or Trading Market regulations, in which case the Company shall provide the Purchaser with prior notice
of such disclosure permitted under this clause (b).
4.7 Stockholder
Rights Plan. No claim will be made or enforced by the Company or, with the consent of the Company, any other Person, that exclusively
as a result of the transactions contemplated by this Agreement the Purchaser is an “acquiring person” under any control share
acquisition, business combination, poison pill (including any distribution under a rights agreement) or similar anti-takeover plan or
arrangement in effect or hereafter adopted by the Company, or that the Purchaser could be deemed to trigger the provisions of any such
plan or arrangement, by virtue of receiving Securities under the Transaction Documents.
4.8 Non-Public
Information. The Company and the Target covenant and agree that neither they, nor any other Person acting on their behalf will
provide the Purchaser or its agents or counsel with any information that constitutes, or the Company and the Target reasonably believe
constitutes, material non-public information, unless prior thereto the Purchaser shall have consented to the receipt of such information
and agreed with the Company and the Target to keep such information confidential. To the extent that the Company, the Target or any of
their respective officers, director, agents, employees or Affiliates delivers any material, non-public information to the Purchaser without
the Purchaser’s consent, the Company and the Target hereby covenant and agree that the Purchaser shall not have any duty of trust
or confidentiality to the Company, the Target or any of their respective officers, directors, agents, employees or Affiliates, or a duty
to the Company, the Target or any of their respective officers, directors, agents, employees or Affiliates not to trade while aware of,
such material, non-public information, provided that the Purchaser shall remain subject to applicable law. To the extent that any notice
provided pursuant to any Transaction Document constitutes, or contains, material, non-public information regarding the Company or the
Target, the Company shall if reasonably practicable simultaneously file such notice with the SEC pursuant to a Current Report on Form
8-K. The Company and the Target understand and confirm that the Purchaser shall be relying on the foregoing covenants in effecting transactions
in securities of the Company.
4.9 Use
of Proceeds. The Company shall use the net proceeds from the sale of the Securities hereunder for general corporate and working
capital purposes, in the Company’s exclusive discretion.
4.10 Indemnification.
(a) Subject
to the provisions of this Section 4.10, the Company will indemnify and hold each Purchaser Party harmless from any and all
Losses that any such Purchaser Party may suffer or incur as a result of or relating to any breach of any of the representations,
warranties, covenants or agreements made by the Company in this Agreement or in the other Transaction Documents (unless such Loss is
primarily based upon a material breach of such Purchaser Party’s representations, warranties or covenants under the
Transaction Documents or any agreements or understandings such Purchaser Party may have with any such stockholder or any violations
by such Purchaser Party of state or federal securities laws or any conduct by such Purchaser Party which is finally judicially
determined to constitute fraud, gross negligence or willful misconduct).
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(b) Subject
to the provisions of this Section 4.10, the Target will indemnify and hold each Purchaser Party, harmless from any and all Losses
that any such Purchaser Party may suffer or incur as a result of or relating to any breach of any of the representations and warranties
of the Target found exclusively in Section 3.3, covenants or agreements made by the Target in this Agreement or in the other Transaction
Documents (unless such Loss is primarily based upon a material breach of such Purchaser Party’s representations, warranties or covenants
under the Transaction Documents or any agreements or understandings such Purchaser Party may have with any such stockholder or any violations
by such Purchaser Party of state or federal securities laws or any conduct by such Purchaser Party which is finally judicially determined
to constitute fraud, gross negligence or willful misconduct).
(c) Subject
to the provisions of this Section 4.10, the Purchaser will indemnify and hold (i) each Company Party and (ii) each Target Party,
harmless from any and all Losses that any such Company Party or Target Party (as applicable) may suffer or incur as a result of or relating
to any breach of any of the representations, warranties, covenants or agreements made by such Purchaser in this Agreement or in the other
Transaction Documents (unless such Loss is primarily based upon a material breach of such Company Party’s or Target Party’s
(as applicable) representations, warranties or covenants under the Transaction Documents or any agreements or understandings such Company
Party or Target Party may have with any such stockholder or any violations by such Company Party or Target Party (as applicable) of state
or federal securities laws or any conduct by such Company Party or Target Party (as applicable) which is finally judicially determined
to constitute fraud, gross negligence or willful misconduct).
(d) If
any Action or Proceeding shall be brought against any Person in respect of which indemnity may be sought pursuant to this Agreement, such
Person (the “Indemnified Party”) shall promptly notify the Person against whom such indemnity may be sought (the “Indemnifying
Party”) in writing, but the omission to notify such Indemnifying Party will not relieve the Indemnifying Party from any liability
that it may have to any Indemnified Party under this Section 4.10 unless, and only to the extent that, such omission results in
the forfeiture of substantive rights or defenses by the Indemnifying Party. The Indemnifying Party shall have the right to assume the
defense thereof with counsel of its own choosing reasonably acceptable to the Indemnified Party. Any Indemnified Party shall have the
right to employ separate counsel in any such Action or Proceeding and participate in the defense thereof, but the fees and expenses of
such counsel shall be at the expense of such Indemnified Party except to the extent that (i) the employment thereof has been specifically
authorized by the Indemnifying Party in writing, (ii) the Indemnifying Party has failed after a reasonable period of time to assume such
defense and to employ counsel or (iii) in such Action or Proceeding there is, in the reasonable opinion of counsel, a material conflict
on any material issue between the position of the Indemnifying Party and the position of such Indemnified Party, in which case the Indemnifying
Party shall be responsible for the reasonable fees and expenses of no more than one such separate counsel. The Indemnifying Party shall
not be liable for any settlement of any Proceeding effected without its written consent, but if settled with such consent or if there
be a final judgment for the plaintiff, the Indemnifying Party agrees to indemnify the Indemnified Party from and against any loss or liability
by reason of such settlement or judgment. No Indemnifying Party shall, without the prior written consent of the Indemnified Party, effect
any settlement of any pending or threatened Proceeding in respect of which any Indemnified Party is or could have been a party and indemnity
could have been sought hereunder by such Indemnified Party, unless such settlement includes an unconditional release of such Indemnified
Party from all liability on claims that are the subject matter of such Proceeding.
4.11 Reservation and Listing of Securities.
(a) Commencing
on the Closing Date, the Company shall maintain a reserve of the Required Minimum from its duly authorized shares of Common Stock for
issuance pursuant to the Transaction Documents in such amount as may then be required to fulfill its obligations in full under the Transaction
Documents.
(b) If,
on any date following the Closing Date, the number of authorized but unissued (and otherwise unreserved) shares of Common Stock is
less than 100% of (i) the Required Minimum on such date, minus (ii) the number of shares of Common Stock previously issued pursuant
to the Transaction Documents, then the Board of Directors shall use commercially reasonable efforts to amend the Company’s
certificate or articles of incorporation to increase the number of authorized but unissued shares of Common Stock to at least the
Required Minimum at such time (minus the number of shares of Common Stock previously issued pursuant to the Transaction Documents),
as soon as possible and in any event not later than the 75th day after such date, provided
that the Company will not be required at any time to authorize a number of shares of Common Stock greater than the maximum
remaining number of shares of Common Stock that could possibly be issued after such time pursuant to the Transaction Documents.
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(c) The
Company shall, as applicable: (i) promptly after the Closing Date and in connection with the registration with the SEC of the Underlying
Shares, in the manner required by the principal Trading Market, prepare and file with such Trading Market an additional shares listing
application covering a number of shares of Common Stock at least equal to the Required Minimum on the date of such application, (ii) take
all steps reasonably necessary to cause such shares of Common Stock to be approved for listing or quotation on such Trading Market as
soon as practicable thereafter and to provide to the Purchaser evidence of such listing or quotation and (iii) use commercially reasonable
efforts to maintain the listing or quotation of such Common Stock on any date at least equal to the Required Minimum on such date on such
Trading Market or another Trading Market. The Company agrees to maintain the eligibility of the Common Stock for electronic transfer through
the Depository Trust Company or another established clearing corporation, including, without limitation, by timely payment of fees to
the Depository Trust Company or such other established clearing corporation in connection with such electronic transfer.
4.12 Certain
Transactions and Confidentiality. The Company shall (a) by 9:30 a.m. (New York City time) issue a press release and/or file a
Current Report on Form 8-K (the “Disclosure Document”) disclosing the material terms of the transactions contemplated
hereby and all material non-public information (other than the Additional Information) concerning the Company disclosed to the Purchaser
by the Company, the Target or their respective agents, which shall have been previously reviewed by counsel for the Placement Agents,
and (b) in respect of any information that is issued in a press release, file a Current Report on Form 8-K including the form of this
Agreement as an exhibit thereto, which shall have been previously reviewed by counsel for the Placement Agents, within the time required
by the Exchange Act. Effective upon the issuance of such Disclosure Document, the Company acknowledges and represents to the Purchaser
that (i) if the Purchaser has not received the Additional Information, the Purchaser shall not be in possession of material non-public
information concerning the Company disclosed to the Purchaser by the Company or its agents, (ii) if the Purchaser has received the Additional
Information, the Purchaser shall not be in possession of material non-public information (other than the Additional Information) concerning
the Company disclosed to the Purchaser by the Company or its agents, and (iii) notwithstanding the foregoing, any and all confidentiality
or similar obligations under this Agreement, or an agreement entered into in connection with the transactions contemplated by the Transaction
Documents, whether written or oral, between the Company, the Target or any of their respective officers, directors, agents, employees
or Affiliates on the one hand, and the Purchaser or any of its respective officers, directors, agents, employees or investment advisers,
on the other hand, shall remain in full force and effect with respect to any material non-public information (including non-financial
information) received by the Purchaser from the Company, the Target or their respective agents that has not been disclosed in the Disclosure
Document; provided, that such confidentiality obligations shall terminate with respect to any information that has been
publicly disclosed in the Disclosure Document or any subsequent public filing by the Company. To the extent any disclosure is required
by law or regulations, the Company shall provide the Purchaser with prompt prior written notice of such requirement so that the Purchaser
may (a) seek appropriate relief to prevent or limit such disclosure should it wish to do so, (b) furnish only that portion of the information
which is legally required to be furnished or disclosed, and to the extent reasonably feasible, (c) consult with the Company on content
and timing prior to any such disclosure. Notwithstanding anything to the contrary contained herein, without the prior written consent
of the Purchaser, the Company shall not (and shall cause each of its affiliates and representatives not to) disclose the name of the Purchaser
or its investment adviser in any filing, announcement, release or otherwise, except as required by law in which case the Company shall
comply with the provisions of this Section 4.12. Notwithstanding the foregoing, if the Purchaser is a multi-managed investment
vehicle whereby separate portfolio managers manage separate portions of the Purchaser’s assets and the portfolio managers have no
direct knowledge of the investment decisions made by the portfolio managers managing other portions of the Purchaser’s assets, the
covenant set forth above shall only apply with respect to the portion of assets managed by the portfolio manager that made the investment
decision to purchase the Securities covered by this Agreement.
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4.13 Blue
Sky Filings. The Company shall take such action as the Company shall reasonably determine is necessary in order to obtain an exemption
for, or to qualify the Securities for, sale to the Purchaser at the Closing under applicable securities or “Blue Sky” laws
of the states of the United States.
ARTICLE
5
MISCELLANEOUS
5.1 Termination.
This Agreement shall terminate and be void and of no further force and effect, and all rights and obligations of the parties
hereunder shall terminate without any further liability on the part of any party in respect hereof, upon the earlier to occur of (a)
the mutual written agreement of the parties hereto to terminate this Agreement, or (b) the termination (for any reason) of the
Business Combination Agreement by any party to the same. Additionally, (i) the Company may terminate this Agreement with respect to
the Purchaser if any of the conditions set forth in Section 2.3(a) or 2.3(b) applicable to the Purchaser shall have
become incapable of fulfillment, and shall not have been waived by the Company; and (ii) the Purchaser may terminate this Agreement
if (X) any of the conditions set forth in Section 2.3(b) or 2.3(c) shall have become incapable of fulfillment, and
shall not have been waived by the Purchaser or (Y) the Closing shall not have occurred on or prior to the date on which the Target
is permitted to terminate the Business Combination Agreement pursuant to Section 8.01(d) of the Business Combination Agreement.
Notwithstanding the foregoing, nothing herein will relieve any party from liability for any intentional breach hereof prior to the
time of termination, and each party will be entitled to any remedies at law or in equity to recover losses, liabilities or damages
arising from such intentional breach; provided, that in the event that the Business Combination
Agreement is ever terminated by the Company and/or the Target for any reason, the Purchaser hereby agrees not to indirectly assert a
claim against the Target by funding the Company or any other party to assert any such claim.
5.2 Fees
and Expenses. Except as expressly set forth in the Transaction Documents, each party shall pay the fees and expenses of its advisers,
counsel, accountants and other experts, if any, and all other expenses incurred by such party incident to the negotiation, preparation,
execution, delivery and performance of this Agreement and the Transaction Documents. The Company shall pay all Transfer Agent fees (including,
without limitation, any fees required for same-day processing of any instruction letter delivered by the Company and any conversion notice
delivered by a Purchaser), stamp taxes and other Taxes and duties levied in connection with the delivery of any Securities to the Purchaser.
5.3 Entire
Agreement. The Transaction Documents, together with the exhibits and schedules thereto, contain the entire understanding of the
parties with respect to the subject matter hereof and thereof and supersede all prior agreements and understandings, oral or written,
with respect to such matters, which the parties acknowledge have been merged into such documents, exhibits and schedules.
5.4 Notices.
Any and all notices or other communications or deliveries required or permitted to be provided hereunder shall be in writing and shall
be deemed given and effective on the earliest of: (a) the time of transmission, if such notice or communication is delivered via email
at the e-mail address as set forth on the signature pages attached hereto at or prior to 5:30 p.m. (New York City time) on a Trading Day,
(b) the next Trading Day after the time of transmission, if such notice or communication is delivered via email attachment at the e-mail
address as set forth on the signature pages attached hereto on a day that is not a Trading Day or later than 5:30 p.m. (New York City
time) on any Trading Day, (c) the second (2nd) Trading Day following the date of mailing, if sent by U.S. nationally recognized overnight
courier service or (d) upon actual receipt by the party to whom such notice is required to be given. The address for such notices and
communications shall be as set forth on the signature pages attached hereto.
5.5 Amendments;
Waivers. No provision of this Agreement may be waived, modified, supplemented or amended except in a written instrument signed,
in the case of an amendment, by the Company, the Target and the Purchaser or, in the case of a waiver, by the Company, the Target or the
Purchaser, as the case may be, dependent on the party against whom enforcement of any such waived provision is sought. Sections 3.2(g),
3.2(k), 3.2(w), 3.2(x), 4.6, 5.8, 5.22, 5.23, 5.24 and the signature page hereto
may not be waived, modified, supplemented or amended except in a written instrument signed by the Corporation, the Purchaser and Placement
Agent. No waiver of any default with respect to any provision, condition or requirement of this Agreement shall be deemed to be a continuing
waiver in the future or a waiver of any subsequent default or a waiver of any other provision, condition or requirement hereof, nor shall
any delay or omission of any party to exercise any right hereunder in any manner impair the exercise of any such right.
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5.6 Headings.
The headings herein are for convenience only, do not constitute a part of this Agreement and shall not be deemed to limit or affect any
of the provisions hereof.
5.7 Successors
and Assigns. This Agreement shall be binding upon and inure to the benefit of the parties and their successors and permitted assigns.
Neither the Company nor the Target may assign this Agreement or any rights or obligations hereunder without the prior written consent
of the other and the Purchaser (other than by merger). The Purchaser may assign any or all of its rights under this Agreement to any Person
to whom the Purchaser assigns or transfers any Securities, provided that such transferee agrees in writing to be bound, with respect to
the transferred Securities, by the provisions of the Transaction Documents that apply to the “Purchaser.”
5.8 Third-Party
Beneficiaries. The Placement Agents shall be third-party beneficiaries of the representations and warranties set forth in Sections
3.1, 3.2, 3.3, 3.4 and 5.23 hereof. This Agreement is intended for the benefit of the parties hereto and
their respective successors and permitted assigns and is not for the benefit of, nor may any provision hereof be enforced by, any other
Person, except as otherwise set forth in Section 4.10 and this Section 5.8.
5.9 Governing
Law. All questions concerning the construction, validity, enforcement and interpretation of the Transaction Documents shall be
governed by and construed and enforced in accordance with the internal laws of the State of Delaware, without regard to the principles
of conflicts of law thereof. Each party agrees that all legal Proceedings concerning the interpretations, enforcement and defense of the
transactions contemplated by this Agreement and any other Transaction Documents (other than the Certificate of Designation) (whether brought
against a party hereto or its respective Affiliates, directors, officers, shareholders, partners, members, employees or agents) shall
be commenced exclusively in the state and federal courts sitting in the State of Delaware. Each party hereby irrevocably submits to the
exclusive jurisdiction of the state and federal courts sitting in the State of Delaware for the adjudication of any dispute hereunder
or in connection herewith or with any transaction contemplated hereby or discussed herein (including with respect to the enforcement of
any of the Transaction Documents, other than the Certificate of Designation), and hereby irrevocably waives, and agrees not to assert
in any Action or Proceeding, any claim that it is not personally subject to the jurisdiction of any such court, that such Action or Proceeding
is improper or is an inconvenient venue for such Proceeding. Each party hereby irrevocably waives personal service of process and consents
to process being served in any such Action or Proceeding by mailing a copy thereof via registered or certified mail or overnight delivery
(with evidence of delivery) to such party at the address in effect for notices to it under this Agreement and agrees that such service
shall constitute good and sufficient service of process and notice thereof. Nothing contained herein shall be deemed to limit in any way
any right to serve process in any other manner permitted by law. If any party shall commence an Action or Proceeding to enforce any provisions
of the Transaction Documents, then, in addition to the obligations of the parties under Section 4.10, the prevailing party in such
Action or Proceeding shall be reimbursed by the non-prevailing party for its reasonable attorneys’ fees and other costs and expenses
incurred with the investigation, preparation and prosecution of such Action or Proceeding.
5.10 Survival.
The representations and warranties contained in Section 3.1, Section 3.2 and Section 3.3 herein shall survive the
Closing and the delivery of the Securities.
5.11 Execution.
This Agreement may be executed in two or more counterparts, all of which when taken together shall be considered one and the same agreement
and shall become effective when counterparts have been signed by each party and delivered to each other party, it being understood that
the parties need not sign the same counterpart. In the event that any signature is delivered by e-mail delivery of a “.pdf”
format data file, such signature shall create a valid and binding obligation of the party executing (or on whose behalf such signature
is executed) with the same force and effect as if such “.pdf” signature page were an original thereof.
5.12 Severability.
If any term, provision, covenant or restriction of this Agreement is held by a court of competent jurisdiction to be invalid, illegal,
void or unenforceable, the remainder of the terms, provisions, covenants and restrictions set forth herein shall remain in full force
and effect and shall in no way be affected, impaired or invalidated, and the parties hereto shall use their commercially reasonable efforts
to find and employ an alternative means to achieve the same or substantially the same result as that contemplated by such term, provision,
covenant or restriction. It is hereby stipulated and declared to be the intention of the parties that they would have executed the remaining
terms, provisions, covenants and restrictions without including any of such that may be hereafter declared invalid, illegal, void or unenforceable.
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5.13 Rescission
and Withdrawal Right. Notwithstanding anything to the contrary contained in (and without limiting any similar provisions of) any
of the other Transaction Documents, whenever the Purchaser exercises a right, election, demand or option under a Transaction Document
and the Company does not timely perform its related obligations within the periods therein provided, then the Purchaser may rescind or
withdraw, in its sole discretion from time to time upon written notice to the Company, any relevant notice, demand or election in whole
or in part without prejudice to its future actions and rights; provided, however, that, in the case of (x)
a rescission of a conversion of the Purchaser’s Preferred Stock, the Purchaser shall be required to return any shares of Common
Stock subject to any such rescinded conversion or (y) a recission of an exercise of a Warrant, the Purchaser shall be required to return
any shares of Common Stock subject to any exercise notice concurrently with the return to the Purchaser of the aggregate exercise price
paid to the Company for such shares and the restoration of the Purchaser’s right to acquire such shares pursuant to the Purchaser’s
Warrant (including, issuance of a replacement warrant certificate evidencing such restored right).
5.14 Replacement
of Securities. If any certificate or instrument evidencing any Securities is mutilated, lost, stolen or destroyed, the Company
shall issue or cause to be issued in exchange and substitution for and upon cancellation thereof (in the case of mutilation), or in lieu
of and substitution therefor, a new certificate or instrument, but only upon receipt of evidence reasonably satisfactory to the Company
of such loss, theft or destruction. The applicant for a new certificate or instrument under such circumstances shall also pay any reasonable
third-party costs (including customary indemnity) associated with the issuance of such replacement Securities.
5.15 Remedies.
In addition to being entitled to exercise all rights provided herein or granted by law, including recovery of damages, the Purchaser and
the Company will be entitled to specific performance under the Transaction Documents. The parties agree that monetary damages may not
be adequate compensation for any loss incurred by reason of any breach of obligations contained in the Transaction Documents and hereby
agree to waive and not to assert in any Action for specific performance of any such obligation the defense that a remedy at law would
be adequate. For the avoidance of doubt, Section 4.10 shall be the exclusive remedy for any Losses resulting from a breach of any
of the representations and warranties contained in ARTICLE 3 of this Agreement, in each case exclusively to the extent such Losses arise
during the survival period of such representations and warranties pursuant to the terms of this Agreement.
5.16 Payment
Set Aside. To the extent that the Company makes a payment or payments to the Purchaser pursuant to any Transaction Document or
the Purchaser enforces or exercises its rights thereunder, and such payment or payments or the proceeds of such enforcement or exercise
or any part thereof are subsequently invalidated, declared to be fraudulent or preferential, set aside, recovered from, disgorged by or
are required to be refunded, repaid or otherwise restored to the Company, a trustee, receiver or any other Person under any law (including,
without limitation, any bankruptcy law, state or federal law, common law or equitable cause of action), then to the extent of any such
restoration the obligation or part thereof originally intended to be satisfied shall be revived and continued in full force and effect
as if such payment had not been made or such enforcement or setoff had not occurred.
5.17 Usury.
To the extent it may lawfully do so, the Company hereby agrees not to insist upon or plead or in any manner whatsoever claim, and will
resist any and all efforts to be compelled to take the benefit or advantage of, usury laws wherever enacted, now or at any time hereafter
in force, in connection with any Action or Proceeding that may be brought by the Purchaser in order to enforce any right or remedy under
any Transaction Document. Notwithstanding any provision to the contrary contained in any Transaction Document, it is expressly agreed
and provided that the total liability of the Company under the Transaction Documents for payments in the nature of interest shall not
exceed the maximum lawful rate authorized under applicable law (the “Maximum Rate”), and, without limiting the foregoing,
in no event shall any rate of interest or default interest, or both of them, when aggregated with any other sums in the nature of interest
that the Company may be obligated to pay under the Transaction Documents exceed such Maximum Rate. It is agreed that if the maximum contract
rate of interest allowed by law and applicable to the Transaction Documents is increased or decreased by statute or any official governmental
action subsequent to the date hereof, the new maximum contract rate of interest allowed by law will be the Maximum Rate applicable to
the Transaction Documents from the effective date thereof forward, unless such application is precluded by applicable law. If under any
circumstances whatsoever, interest in excess of the Maximum Rate is paid by the Company to the Purchaser with respect to Indebtedness
evidenced by the Transaction Documents, such excess shall be applied by the Purchaser to the unpaid principal balance of any such Indebtedness
or be refunded to the Company, the manner of handling such excess to be at the Purchaser’s election.
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5.18 Liquidated
Damages. The Company’s obligations to pay any partial liquidated damages or other amounts owing under the Transaction Documents
is a continuing obligation of the Company and shall not terminate until all unpaid partial liquidated damages and other amounts have been
paid notwithstanding the fact that the instrument or security pursuant to which such partial liquidated damages or other amounts are due
and payable shall have been canceled.
5.19 Saturdays,
Sundays, Holidays, etc. If the last or appointed day for the taking of any action or the expiration of any right required
or granted herein shall not be a Business Day, then such action may be taken or such right may be exercised on the next succeeding Business
Day.
5.20 Construction.
The parties agree that each of them and/or their respective counsel have reviewed and had an opportunity to revise the Transaction Documents
and, therefore, the normal rule of construction to the effect that any ambiguities are to be resolved against the drafting party shall
not be employed in the interpretation of the Transaction Documents or any amendments thereto. In addition, each and every reference to
share prices and shares of Common Stock in any Transaction Document shall be subject to adjustment for reverse and forward stock splits,
stock dividends, stock combinations and other similar transactions of the Common Stock that occur after the date of this Agreement. In
this Agreement, unless the context otherwise requires: (i) whenever required by the context, any pronoun used in this Agreement shall
include the corresponding masculine, feminine or neuter forms, and the singular form of nouns, pronouns and verbs shall include the plural
and vice versa; (ii) “including” (and with correlative meaning “include”) means including without limiting the
generality of any description preceding or succeeding such term and shall be deemed in each case to be followed by the words “without
limitation”; and (iii) the words “herein”, “hereto” and “hereby” and other words of similar
import in this Agreement shall be deemed in each case to refer to this Agreement as a whole and not to any particular portion of this
Agreement.
5.21 Trust
Account Waiver. The Purchaser hereby acknowledges that, as described in the Company’s prospectus relating to its initial
public offering (the “IPO”) dated February 10, 2026 available at www.sec.gov,
the Company has established a trust account (the “Trust Account”) containing the proceeds of the IPO and from certain
private placements occurring simultaneously with the IPO (including interest accrued from time to time thereon) for the benefit of the
Company, its public shareholders and certain other parties. For and in consideration of entering into this Agreement, and for other good
and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Purchaser on behalf of itself and each of
its affiliates and subsidiaries, and each of its and their employees, agents, representatives and any other person or entity acting on
its and their behalf hereby (a) agrees that it does not now and shall not at any time hereafter have any right, title, interest or claim
of any kind in or to any assets held in the Trust Account, and shall not make any claim against the Trust Account, arising out or as a
result of, in connection with or relating in any way to this Agreement, and regardless of whether such claim arises based on contract,
tort, equity or any other theory of legal liability (any and all such claims are collectively referred to hereafter as the “Released
Claims”), (b) irrevocably waives any Released Claims that it may have against the Trust Account now or in the future as a result
of, or arising out of, this Agreement, and (c) agrees that it will not seek recourse against the Trust Account as a result of, in connection
with or relating in any way to this Agreement; provided, however, that nothing in this Section 5.21 shall be deemed
to limit the Purchaser’s right to distributions from the Trust Account in accordance with the Company’s memorandum and articles
of association in respect of any redemptions by the Purchaser in respect of securities acquired by any means other than pursuant to this
Agreement.
26
5.22 Exculpation.
The Purchaser acknowledges and agrees that (i) neither the Placement Agents nor their Affiliates or any control persons, officers,
directors, employees, partners, agents or Representatives of the foregoing have any duties or obligations other than those
specifically set forth herein or in the Engagement Letter, (ii) neither the Placement Agents nor their Affiliates or any control
persons, officers, directors, employees, partners, agents or Representatives of the foregoing make any representation or warranty,
or have any responsibilities as to the validity, accuracy, value or genuineness of any information, certificates or documentation
delivered by or on behalf of the Company pursuant to this Agreement or the Transaction Documents or in connection with any of the
transactions, and (iii) no Placement Agent, its Affiliates or any control persons, officers, directors, employees, partners, agents
or Representatives of the foregoing shall have any liability to the Purchaser pursuant to, arising out of or relating to this
Agreement, the negotiation hereof or its subject matter, or the transactions contemplated hereby, including, without limitation,
with respect to any action heretofore or hereafter taken or omitted to be taken by any of them in connection with the purchase of
the Securities or with respect to any claim (whether in tort or otherwise) for breach of this Agreement or in respect of any written
or oral representations made or alleged to be made in connection herewith, as expressly provided herein, or for any actual or
alleged inaccuracies, misstatements, or omissions with respect to any information or materials of any kind furnished by the Company,
the Placement Agents or Target concerning the Target, the Company, the Placement Agents, any of their controlled Affiliates, this
Agreement or the transactions contemplated hereby.
5.23 No
Other Brokers. Each of the Company and the Purchaser represent and warrant to the other parties that, except for the Placement
Agents, no broker or finder is entitled to any brokerage or finder’s fee or commission to be paid by the Purchaser solely in connection
with the sale of the Securities to the Purchaser. Each of the Company and Purchaser agree to indemnify and save the other Parties hereto
harmless from any claim or demand for commission or other compensation by any broker, finder, financial consultant or similar agent other
than Placement Agents claiming to have been employed by or on behalf of such Party and to bear the cost of legal expenses incurred in
defending against any such claim.
5.24 NO
LIABILITY UPON GOOD FAITH TERMINATION. OTHER THAN WITH RESPECT TO ANY LIABILITIES ARISING PURSUANT TO SECTION 4.10 AND/OR SECTION
5.2 ABOVE, NONE OF THE COMPANY, TARGET, ANY OF THEIR AFFILIATES, OR ANY OTHER PARTY TO THE BUSINESS COMBINATION AGREEMENT, OR ANY
OF THEIR RESPECTIVE OFFICERS, DIRECTORS, EQUITYHOLDERS, MANAGERS, MEMBERS, ADVISORS OR LEGAL COUNSEL SHALL HAVE ANY LIABILITY (INCLUDING,
BUT NOT LIMITED TO, AS A RESULT OF POTENTIAL LOST PROFITS AND OPPORTUNITIES) TO THE PURCHASER AS A RESULT OF THE TERMINATION OF THIS AGREEMENT
AS A RESULT OF THE GOOD FAITH TERMINATION OF THE BUSINESS COMBINATION AGREEMENT BECAUSE OF A FAILURE OF A CLOSING CONDITION TO BE MET
(SOLELY TO THE EXTENT SUCH FAILURE IS OUTSIDE OF THE CONTROL OF THE TARGET OR THE COMPANY, BUT REGARDLESS OF WHETHER THE BUSINESS COMBINATION
AGREEMENT IS TERMINATED BY THE COMPANY OR TARGET).
5.25 WAIVER
OF JURY TRIAL. IN ANY ACTION, SUIT, OR PROCEEDING IN ANY JURISDICTION BROUGHT BY ANY PARTY AGAINST ANY OTHER PARTY, THE PARTIES EACH
KNOWINGLY AND INTENTIONALLY, TO THE GREATEST EXTENT PERMITTED BY APPLICABLE LAW, HEREBY ABSOLUTELY, UNCONDITIONALLY, IRREVOCABLY AND EXPRESSLY
WAIVES FOREVER TRIAL BY JURY.
(Signature Pages Follow)
27
IN WITNESS WHEREOF, the parties hereto have caused this Securities
Purchase Agreement to be duly executed by their respective authorized signatories as of the date first indicated above.
COLUMBUS CIRCLE CAPITAL CORP II
Address for Notice:
Columbus Circle, 24th Floor
New York, New York, 10019
By:
Name:
Gary Quin
Title:
Chief Executive Officer and Chairman of the Board
Email: **********
With a copy to (which shall not constitute notice):
[REMAINDER OF PAGE INTENTIONALLY
LEFT BLANK
SIGNATURE PAGE FOR TARGET FOLLOWS]
[COMPANY SIGNATURE PAGE TO PROJECT ENDURANCE SPA]
IN WITNESS WHEREOF, the parties hereto have caused this Securities
Purchase Agreement to be duly executed by their respective authorized signatories as of the date first indicated above.
ELROY AIR, INC.
Address for Notice:
By:
Name:
Andrew
Clare
Title:
Chief Executive Officer
Email:
With a copy to (which shall not constitute notice):
[REMAINDER OF PAGE INTENTIONALLY
LEFT BLANK
SIGNATURE PAGE FOR PURCHASER FOLLOWS]
[TARGET SIGNATURE PAGE TO PROJECT ENDURANCE SPA]
IN WITNESS WHEREOF, the undersigned have caused this Securities Purchase Agreement to be duly executed by their respective
authorized signatories as of the date first indicated above.
Name of Purchaser: Alyeska Master Fund, L.P.
Signature of Authorized Signatory of Purchaser:
Name of Authorized Signatory: Jason A. Bragg
Title of Authorized Signatory: CFO Of Alyeska Investment Group,
L.P.
Email Address of Authorized Signatory: **********
Address for Notice to Purchaser: 77 W. Wacker, Suite 700, Chicago,
IL 60601
Address for Delivery of Securities to Purchaser (if not same
as address for notice):
Subscription Amount: $100,000,000.00
Shares of Preferred Stock:
9,803,922
Warrant Shares: 9,803,922
EIN Number: 98-0564704
Additional Information Election ☒
No, do not provide the Additional Information
If you have elected “No”
above, please sign where indicated below to confirm that you agree to the following:
The Purchaser acknowledges and understands that (i) the Company,
the Target, the Placement Agents, and their respective affiliates possess material nonpublic information regarding the Target and the
Company, including the information set forth on the Target Disclosure Letter and the Target Financials not known to the Purchaser that
may impact the value of the Securities (the “Additional Information”), and that the Company, the Target and the Placement
Agents are not disclosing the Information to the Purchaser. The Purchaser understands, based on its experience, the disadvantage to which
the Purchaser is subject due to the disparity of information between the Company, the Target and the Placement Agents, on the one hand,
and the Purchaser, on the other hand. Notwithstanding such disparity, the Purchaser has deemed it appropriate to enter into this Agreement
and to purchase the Securities.
The Purchaser agrees
that none of the Company, the Target, the Placement Agents, or their respective its affiliates, principals, stockholders, partners, employees
and agents shall have any liability to the Purchaser, its affiliates, principals, stockholders, partners, employees, agents, grantors
or beneficiaries, whatsoever due to or in connection with the Company’s, the Target’s and/or the Placement Agents’ use
or non-disclosure of the Information or otherwise as a result of this Agreement or the Purchaser’s acquisition of the Securities,
and the Purchaser hereby irrevocably waives any claim that it might have based on the failure of the Company, the Target and/or the Placement
Agents to disclose the Information.
The Purchaser acknowledges that (i) the Company, the Target and the Placement Agents are relying on the Purchaser’s
representations, warranties, acknowledgments and agreements set forth above as a condition to proceeding with the transactions contemplated
by this Agreement; and (ii) without such representations, warranties and agreements, the Company, the Target and the Placement Agents
would not enter into this Agreement or engage in the transactions contemplated thereby.
Signature of Authorized
Signatory of Purchaser:
Name of Authorized Signatory: Jason A. Bragg
Title of Authorized Signatory: CFO of
Alyeska Investment Group, L.P.
[PURCHASER SIGNATURE PAGE TO PROJECT ENDURANCE SPA]
ANNEX A
ELIGIBILITY REPRESENTATIONS
OF PURCHASER
A. QUALIFIED INSTITUTIONAL BUYER STATUS
(Please check the applicable subparagraphs):
☒ We are a “qualified institutional buyer”
(as defined in Rule 144A under the Securities Act of 1933, as amended (the “Securities Act”) (a “QIB”)).
☐
We are subscribing for the Securities as a fiduciary or agent for one or more investor accounts, and each owner of such account is a
QIB.
*** OR ***
B. INSTITUTIONAL ACCREDITED INVESTOR STATUS (Please check the applicable subparagraphs):
☐ We are an institutional “accredited investor” (as described in Rule 501(a)(1), (2), (3) or (7) under the
Securities Act) and have marked and initialed the appropriate box on the following page indicating the provision under which we
qualify as an “accredited investor.”
*** AND ***
C. AFFILIATE STATUS
(Please check the applicable box) PURCHASER:
☐ is:
☒ is not:
an “affiliate” (as defined in Rule 144 under
the Securities Act) of the Issuer or acting on behalf of an affiliate of the Issuer.
This page should be completed
by Purchaser
and constitutes a part of the
Securities Purchase Agreement.
Rule 501(a) under the Securities Act,
in relevant part, states that an “accredited investor” shall mean any person who comes within any of the below listed categories,
or who the Issuer reasonably believes comes within any of the below listed categories, at the time of the sale of the securities to that
person. Purchaser has indicated, by marking and initialing the appropriate box below, the provision(s) below which apply to Purchaser
and under which Purchaser accordingly qualifies as an “accredited investor.”
☐
Any bank as defined in section 3(a)(2) of the Securities Act, or any savings and loan association or other institution as defined in
section 3(a)(5)(A) of the Securities Act whether acting in its individual or fiduciary capacity;
☐ Any broker or dealer registered
pursuant to section 15 of the Securities Exchange Act of 1934, as amended;
☐ Any insurance company as defined in section 2(a)(13) of the Securities Act;
☐ Any investment company registered under the Investment Company Act of 1940, as amended (the “Investment Company
Act”) or a business development company as defined in section 2(a)(48) of the Investment Company Act;
☐ Any Small Business Investment
Company licensed by the U.S. Small Business Administration under section 301(c) or (d) of the Small Business Investment Act of 1958,
as amended;
☐ Any
plan established and maintained by a state, its political subdivisions, or any agency or instrumentality of a state or its political
subdivisions, for the benefit of its employees, if such plan has total assets in excess of $5,000,000;
☐ Any
employee benefit plan within the meaning of the Employee Retirement Income Security Act of 1974, as amended (“ERISA”),
if (i) the investment decision is made by a plan fiduciary, as defined in section 3(21) of ERISA, which is either a bank, a savings and
loan association, an insurance company, or a registered investment adviser, (ii) the employee benefit plan has total assets in excess
of $5,000,000 or, (iii) such plan is a self-directed plan, with investment decisions made solely by persons that are “accredited
investors”;
☐ Any
private business development company as defined in section 202(a)(22) of the Investment Advisers Act of 1940, as amended;
☐ Any
(i) corporation, limited liability company or partnership, (ii) Massachusetts or similar business trust, or (iii) organization described
in section 501(c)(3) of the Internal Revenue Code of 1986, as amended, not formed for the specific purpose of acquiring the securities
offered, and with total assets in excess of $5,000,000; or
☐ Any trust, with total assets in excess of $5,000,000, not formed for the specific purpose of acquiring the securities
offered, whose subscription is directed by a sophisticated person as described in Section 230.506(b)(2)(ii) of Regulation D.
PURCHASER:
Print Name: Alyeska Master Fund, L.P.
By:
Name:
Jason A. Bragg
Title:
CFO of Alyeska Investment Group, L.P.
EXHIBIT A
CERTIFICATE OF DESIGNATION
[ELROY AIR, INC.]
CERTIFICATE OF DESIGNATION OF
PREFERENCES,
RIGHTS AND LIMITATIONS
OF
12.0% SERIES A CUMULATIVE CONVERTIBLE
PREFERRED STOCK
PURSUANT TO
SECTION 151(g) OF THE
DELAWARE GENERAL CORPORATION LAW
The
undersigned, [_____________], does hereby certify that:
1. He
is the Chief Executive Officer of [Elroy Air, Inc.], a Delaware corporation (the “Corporation”).
2. The Corporation is authorized to issue [●]
shares of preferred stock, none of which have been issued.
3. The
following resolutions were duly adopted by the board of directors of the Corporation (the “Board of Directors”):
WHEREAS, the certificate
of incorporation of the Corporation provides for a class of its authorized stock known as preferred stock, consisting of [●] shares,
$[0.0001] par value per share, issuable from time to time in one or more series;
WHEREAS, the Board
of Directors is authorized to fix the dividend rights, dividend rate, voting rights, conversion rights, rights and terms of redemption
and liquidation preferences of any wholly unissued series of preferred stock and the number of shares constituting any series and the
designation thereof, of any of them; and
WHEREAS, it is the
desire of the Board of Directors, pursuant to its authority as aforesaid, to fix the rights, preferences, restrictions and other matters
relating to a series of the preferred stock, which shall consist of up to [●] shares of the preferred stock which the Corporation
has the authority to issue, as follows:
NOW, THEREFORE, BE
IT RESOLVED, that the Board of Directors does hereby provide for the issuance of a series of preferred stock for cash or exchange of other
securities, rights or property and does hereby fix and determine the rights, preferences, restrictions and other matters relating to such
series of preferred stock as follows:
TERMS OF 12.0% SERIES A CUMULATIVE
CONVERTIBLE PREFERRED STOCK
Section 1. Definitions.
For the purposes hereof, the following terms shall have the following meanings:
“Accrued Dividend” shall have the meaning
set forth in Section 3(a).
“Accrued
Value” means, as of any date, with respect to each share of Preferred Stock as of the determination date, the sum, subject
to appropriate adjustment in the event of any stock dividend, stock split, combination or other similar recapitalization with
respect to the Preferred Stock, of (i) the Stated Value per share of Preferred Stock, plus (ii) the aggregate amount of any accrued
PIK Dividends on such share of Preferred Stock as of such date, plus (iii) on each Semi-Annual Dividend Date and on a cumulative
basis, an additional amount equal to the dollar value of all Accrued Dividends that have accrued on such share pursuant to Section
3(b), but only to the extent such Accrued Dividends have not been paid, whether or not declared, but that have not, as of such
date, been added to the Accrued Value.
2
“Affiliate”
means any Person that, directly or indirectly through one or more intermediaries, controls or is controlled by or is under common control
with a Person, as such terms are used in and construed under Rule 405 of the Securities Act.
“Alternate
Consideration” shall have the meaning set forth in Section 7(f).
“Annual Rate” means with
respect to a PIK Dividend, 12.0% of the Accrued Value and with respect to a Cash Dividend, 10.0% of the Accrued Value.
“Attribution Parties” shall have the meaning set forth in Section 6(d).
“Available Proceeds” shall have the meaning
set forth in Section 5(c)(i).
“Beneficial
Ownership Limitation” shall have the meaning set forth in Section 6(d).
“Business
Combination” means the transactions contemplated by the Business Combination Agreement.
“Business
Combination Agreement” means that certain Business Combination Agreement, dated as of [●], 2026, by and among the Corporation
(or its predecessor), [[●] Merger Sub, Inc.] and [●], as it may be further amended, modified or supplemented from time to
time.
“Business
Day” means any day other than Saturday, Sunday or other day on which commercial banks in The City of New York are authorized
or required by law to remain closed; provided, however, for clarification, commercial banks shall not be deemed
to be authorized or required by law to remain closed due to “stay at home”, “shelter-in-place”, “non-essential
employee” or any other similar orders or restrictions or the closure of any physical branch locations at the direction of any governmental
authority so long as the electronic funds transfer systems (including for wire transfers) of commercial banks in The City of New York
generally are open for use by customers on such day.
“Buy-In” shall have the meaning set forth
in Section 6(c)(iv).
“Cash Dividend” shall have the meaning set forth in Section 3(a). “Closing”
means the closing of the Business Combination.
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“Closing Date” means
the Trading Day on which the Business Combination is consummated.
“Commission” means the United
States Securities and Exchange Commission. “Common Stock” means the common stock, par value [$0.0001] per share, of
the Corporation and stock of any other class of securities into which such securities may hereafter be reclassified or changed.
“Common
Stock Equivalents” means any securities of the Corporation that would entitle the holder thereof to acquire at any time Common
Stock, including, without limitation, any debt, preferred stock, right, option, warrant or other instrument that is at any time convertible
into or exercisable or exchangeable for, or otherwise entitles the holder thereof to receive, Common Stock, and any securities of the
Corporation that when paired with one or more other securities of the Corporation or another entity entitles the holder thereof to receive,
Common Stock.
“Conversion Date” shall
have the meaning set forth in Section 6(a). “Conversion Price” shall have the meaning set forth in Section
6(b).
“Conversion
Shares” means, collectively, the shares of Common Stock issuable upon conversion of the shares of Preferred Stock in accordance
with the terms hereof.
“Convertible
Securities” means any stock or securities (other than Options) directly or indirectly convertible into or exercisable or exchangeable
for, or which otherwise entitles the holder thereof to acquire, any shares of Common Stock and any securities of the Corporation that
when paired with one or more other securities of the Corporation or another entity entitles the holder thereof to receive, Common Stock.
“Corporation Notice” shall have the meaning
set forth in Section 8(a).
“Deemed
Liquidation Event” means: (i) a merger or consolidation in which (a) the Corporation is a constituent party or (b) a
subsidiary of the Corporation is a constituent party and the Corporation issues shares of its capital stock pursuant to such merger
or consolidation; provided, that, a Deemed Liquidation Event shall not include any such merger or consolidation involving the
Corporation or a subsidiary in which the shares of capital stock of the Corporation outstanding immediately prior to such merger or
consolidation continue to represent, or are converted into or exchanged for shares of capital stock that represent, immediately
following such merger or consolidation, at least a majority, by voting power, of the capital stock of (1) the surviving or resulting
corporation; or (2) if the surviving or resulting corporation is a wholly owned subsidiary of another corporation immediately
following such merger or consolidation, the parent corporation of such surviving or resulting corporation; or (ii) (a) the sale, in
a single transaction or series of related transactions, by the Corporation or any subsidiary of the Corporation of all or
substantially all the assets of the Corporation and its subsidiaries taken as a whole, or (b) the sale or disposition (whether by
merger, consolidation or otherwise, and whether in a single transaction or a series of related transactions) of one (1) or more
subsidiaries of the Corporation if substantially all of the assets of the Corporation and its subsidiaries taken as a whole are held
by such subsidiary or subsidiaries, except where such sale is to a wholly owned subsidiary of the Corporation.
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“Delaware Courts” shall
have the meaning set forth in Section 9(d).
“Dilutive Issuance” shall have the meaning set forth in Section
7(c).
“Distribution” shall have the meaning set forth in Section 7(e).
“Effective
Date” means the date that the Registration Statement filed by the Corporation pursuant to the Registration Rights Agreement
is first declared effective by the Commission.
“Exchange
Act” means the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder.
“Exempt
Issuance” means the issuance of (a) any securities of the Corporation to employees, officers or directors, consultants, contractors,
vendors or other agents of the Corporation pursuant to any stock or option plan duly adopted for such purpose, by a majority of the non-employee
members of the Board of Directors or a majority of the members of a committee of non-employee directors established for such purpose for
services rendered to the Corporation, (b) securities upon the exercise or exchange of or conversion of any securities issued pursuant
to the Purchase Agreements or the Business Combination Agreement and/or other securities exercisable or exchangeable for or convertible
into shares of Common Stock issued and outstanding on the Closing Date, provided that such securities have not been amended
since the Closing Date to increase the number of such securities or to decrease the exercise price, exchange price or conversion price
of such securities (other than in connection with stock splits or combinations and automatic adjustments to such terms pursuant to anti-dilution
or similar provisions of such securities which are not more favorable to the holder thereof than the anti-dilution and similar provisions
set forth herein) or to extend the term of such securities, (c) the Conversion Shares, (d) securities issued pursuant to any merger, acquisition
or strategic transaction or partnership approved by a majority of the directors of the Corporation, provided that (i) such
securities are issued as “restricted securities” (as defined in Rule 144) or are issued pursuant to an effective registration
statement pursuant to the Securities Act and (ii) any such issuance shall only be to a Person (or to the equityholders of a Person) which
is, itself or through its subsidiaries, an operating company or an owner of an asset in a business synergistic with the business of the
Corporation and shall provide to the Corporation additional benefits in addition to the investment of funds and (e) any securities issued
by the corporation pursuant to any legal settlement or similar arrangement agreed or entered into by the Corporation, provided that,
in the aggregate, not more than [●]1 shares of Common Stock are issued or deemed issued or issuable upon conversion,
settlement, exercise or exchange of any such securities that are Options or Convertible Securities, but any such Exempt
Issuance shall not include a transaction in which the Corporation is issuing securities (i)
primarily for the purpose of raising capital, including an at-the-market offering, or (ii) to an entity whose primary business is investing
in securities.
1 To be $1,000,000 / SPAC Public Share redemption price.
5
“Floor
Price” means the lesser of (i) $5.00 (as adjusted for any stock dividend, stock split, stock combination, reclassification or
similar transaction occurring after the date of the Purchase Agreement) and (ii) the Conversion Price then in effect.
“Fundamental Transaction”
shall have the meaning set forth in Section 7(f).
“Holder” shall have the meaning set forth in Section 2(a).
“Inflection
Point” means Inflection Point Asset Management LLC and/or one or more of its Affiliates.
“Junior Securities” shall have the meaning
set forth in Section 5(a).
“New Issuance Price” shall have the meaning set forth in Section 7(c).
“Notice
of Conversion” shall have the meaning set forth in Section 6(a).
“Options” means any
rights, warrants or options to subscribe for or purchase shares of Common Stock or Convertible Securities.
“Option
Value” means the value of an Option based on the Black-Scholes Option Pricing model obtained from the “OV”
function on Bloomberg determined as of (A) the Trading Day prior to the public announcement of the issuance of the applicable
Option, if the issuance of such Option is publicly announced or (B) the Trading Day immediately following the issuance of the
applicable Option if the issuance of such Option is not publicly announced, for pricing purposes and reflecting (i) a risk-free
interest rate corresponding to the U.S. Treasury rate for a period equal to the remaining term of the applicable Option as of the
applicable date of determination, (ii) an expected volatility equal to the greater of 100% and the 100 day volatility
obtained from the HVT function on Bloomberg as of (A) the Trading Day immediately following the public announcement of the
applicable Option if the issuance of such Option is publicly announced or (B) the Trading Day immediately following the issuance of
the applicable Option if the issuance of such Option is not publicly announced, (iii) the underlying price per share used in such
calculation shall be the highest weighted average price of the Common Stock during the period beginning on the Trading Day prior to
the execution of definitive documentation relating to the issuance of the applicable Option and ending on (A) the Trading Day
immediately following the public announcement of such issuance, if the issuance of such Option is publicly announced or (B) the
Trading Day immediately following the issuance of the applicable Option if the issuance of such Option is not publicly announced,
(iv) a zero cost of borrow and (v) a 360 day annualization factor, provided, however, in case any Option
is issued in connection with the issue or sale of other securities of the Corporation, together comprising one integrated
transaction, in no event shall the Option Value exceed a fraction of the aggregate consideration received (excluding the minimum
aggregate amount of additional consideration (as set forth in the instruments relating thereto, without regard to any provision
contained therein for a subsequent adjustment of such consideration) payable to the Corporation upon the exercise of such Options,
or in the case of Options for Convertible Securities, the exercise of such Options for Convertible Securities and the conversion or
exchange of such Convertible Securities) equal to (1) the number of shares of Common Stock underlying such Option divided by (2) the
total number of shares of Common Stock issued or issuable in the integrated transaction (including the number of shares underlying
such Option).
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“Original
Issue Date” means the date of the first issuance of any shares of the Preferred Stock regardless of the number of transfers
of any particular shares of Preferred Stock and regardless of the number of certificates which may be issued to evidence such Preferred
Stock.
“Person”
means an individual or corporation, partnership, trust, incorporated or unincorporated association, joint venture, limited liability company,
joint stock company, government (or an agency or subdivision thereof) or other entity of any kind.
“PIK Dividend” shall
have the meaning set forth in Section 3(a). “Preferred Stock” shall have the meaning set forth in Section
2(a).
“Preferred
Stock Liquidation Amount” shall have the meaning set forth in Section 5(b)(ii).
“Preferred Stock Register” shall have the
meaning set forth in Section 2(b).
“Purchase Agreements” means
the several Securities Purchase Agreements, between the Corporation and certain original Holders, as amended, modified or supplemented
from time to time in accordance with their respective terms.
“Purchase Rights” shall have the meaning
set forth in Section 7(d).
“Redemption Date” shall have the meaning
set forth in Section 8(b)(i).
“Redemption Notice” shall have the meaning
set forth in Section 8(b)(ii).
“Redemption Price” shall have the meaning
set forth in Section 8(b)(i).
“Redemption Request” shall have the meaning
set forth in Section 8(b)(i).
“Registration Rights
Agreement” means the Registration Rights Agreement, dated as of the Closing Date, among the Corporation, the original
Holders and certain other securityholders of the Corporation.
“Registration
Statement” means a registration statement meeting the requirements set forth in the Registration Rights Agreement and
covering the resale of the Conversion Shares by each Holder as provided for in the Registration Rights Agreement, including the
Initial Registration Statement (as defined in the Registration Rights Agreement) and any additional Registration Statements which
may be required thereunder.
7
“Required Holders” shall have the meaning
set forth in Section 4(c).
“Rule 144”
means Rule 144 promulgated by the Commission pursuant to the Securities Act, as such Rule may be amended from time to time, or any similar
rule or regulation hereafter adopted by the Commission having substantially the same effect as such Rule.
“Rule 424”
means Rule 424 promulgated by the Commission pursuant to the Securities Act, as such Rule may be amended or interpreted from time to time,
or any similar rule or regulation hereafter adopted by the Commission having substantially the same purpose and effect as such Rule.
“Securities Act” means
the Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder.
“Semi-Annual Dividend Date” shall mean June
1 and December 1 of each year.
“Share Delivery Date” shall have the meaning set forth in Section 6(c)(i).
“Standard
Settlement Period” shall have the meaning set forth in Section 6(c)(i).
“Stated Value” shall have
the meaning set forth in Section 2(a).
“Successor Entity” shall have the meaning
set forth in Section 7(f)(iii).
“Trading Day” means
a day on which the principal Trading Market is open for business.
“Trading
Market” means any of the following markets or exchanges on which the Common Stock is listed or quoted for trading on the date
in question: the NYSE American, the Nasdaq Capital Market, the Nasdaq Global Market, the Nasdaq Global Select Market, the New York Stock
Exchange (or any successors to any of the foregoing).
“Transfer
Agent” means Continental Stock Transfer & Trust Company, the current transfer agent of the Corporation, and any successor
transfer agent of the Corporation.
“VWAP”
means, for any date, the price determined by the first of the following clauses that applies: (a) if the Common Stock is then listed
or quoted on a Trading Market, the arithmetic mean of the daily volume weighted average prices of the Common Stock for each of the
20 Trading Days preceding such date (or the nearest preceding date) on the Trading Market on which the Common Stock is then listed
or quoted as reported by Bloomberg L.P. (based on a Trading Day from 9:30 a.m. (New York City time) to 4:02 p.m. (New York City
time)), with each such Trading Day weighted equally regardless of the aggregate trading volume for such Trading Day, (b) if OTCQB or
OTCQX is not a Trading Market, the arithmetic mean of the daily volume weighted average prices of the Common Stock for each of the
20 Trading Days preceding such date (or the nearest preceding date) on OTCQB, OTCQX or OTCID as applicable, calculated in the same
manner as clause (a), (c) if the Common Stock is not then listed or quoted for trading on OTCQB or OTCQX and if prices for the
Common Stock are then reported in The Pink Open Market (or a similar organization or agency succeeding to its functions of reporting
prices), the average of the highest closing bid price and the lowest closing ask price of the Common Stock for the 20 Trading Days
preceding such date, or (d) in all other cases, the fair market value of a share of Common Stock as determined by an independent
appraiser selected in good faith by the Holders of a majority in interest of the Preferred Stock then outstanding and reasonably
acceptable to the Corporation, the fees and expenses of which shall be paid by the Corporation. For the avoidance of doubt, the
daily volume weighted average price for each individual Trading Day shall be determined by Bloomberg L.P. in accordance with its
standard methodology, and the VWAP for the applicable period shall be calculated by summing such daily values and dividing by the
number of Trading Days in the measurement period (i.e., 20 Trading Days), such that each Trading Day’s price is given equal
weight irrespective of trading volume.
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Section 2. Designation, Amount and Par Value.
(a) The
series of preferred stock shall be designated as its “12.0% Series A Cumulative Convertible Preferred Stock” (the “Preferred
Stock”) and the number of shares so designated shall be up to [●] (which shall not be subject to increase without the
written consent of a majority of the then outstanding Preferred Stock (each, a “Holder” and collectively, the “Holders”)).
Each share of Preferred Stock shall have a par value of $[0.0001] per share and a stated value equal to $12.00 (the “Stated
Value”).
(b) The
Corporation shall register, or cause its Transfer Agent to register, shares of the Preferred Stock upon records to be maintained by the
Corporation or its Transfer Agent for that purpose (the “Preferred Stock Register”), in the name of the Holders thereof
from time to time. The Corporation may deem and treat the registered Holder of shares of Preferred Stock as the absolute owner thereof
for the purpose of any conversion thereof and for all other purposes. The Corporation shall register, or cause its Transfer Agent to register,
the transfer of any shares of Preferred Stock in the Preferred Stock Register, upon surrender of the certificates evidencing such shares
to be transferred, duly endorsed by the Holder thereof, to the Corporation at its address specified herein and after such Holder shall
have provided to the Corporation such documentation and legal opinions, if any, as may be reasonably requested by the Corporation (including
any documentation required by the Transfer Agent with respect to such transfer). Upon the registration of such transfer, a new certificate
(to the extent such shares are certificated) evidencing the shares of Preferred Stock so transferred shall be issued to the transferee
and a new certificate evidencing the remaining portion of the shares not so transferred, if any, shall be issued to the transferring Holder,
in each case, within three Business Days. The Board of Directors may provide by resolution or resolutions that some or all of the Preferred
Stock shall be uncertificated shares. The Corporation shall not be required to register, or cause its Transfer Agent to register, or record
any transfer of any shares of the Preferred Stock that would violate, conflict with, or fail to be in compliance with federal or state
securities laws.
Section 3. Dividends.
(a) From
and after the Closing, subject to the terms of this Section 3, cumulative dividends shall accrue on the Accrued Value of each share
of Preferred Stock at the Annual Rate. Dividends on each share of Preferred Stock shall be cumulative and shall accrue daily from and
after the Closing, but shall compound on a semi-annual basis on each Semi-Annual Dividend Date (each, an “Accrued Dividend”)
whether or not earned or declared, and whether or not there are earnings or profits, surplus, or other funds or assets of the Corporation
legally available for the payment of dividends. Each Accrued Dividend shall be paid, at the election of the Corporation, either (i) in
cash (a “Cash Dividend”), or (ii) in kind by increasing the Accrued Value of such share (a “PIK Dividend”).
(b) The
Corporation shall not declare, pay or set aside any dividends on shares of any other class or series of capital stock of the Corporation
ranking junior to the Preferred Stock (other than dividends on shares of Common Stock payable in shares of Common Stock) unless (in addition
to the obtaining of any consents required in this Certificate of Designation or the Corporation’s certificate of incorporation)
the Holders of the Preferred Stock then outstanding shall first receive, or simultaneously receive, a dividend on each outstanding share
of Preferred Stock in an amount at least equal to the sum of (i) the amount of the aggregate Accrued Dividends then accrued on such share
of Preferred Stock and not previously paid and (ii) (A) in the case of a dividend on Common Stock or any class or series that is convertible
into Common Stock, that dividend per share of Preferred Stock as would equal the product of (1) the dividend payable on each share of
such class or series determined, if applicable, as if all shares of such class or series had been converted into Common Stock and (2)
the number of shares of Common Stock issuable upon conversion of a share of Series A Cumulative Convertible Preferred Stock, in each case
calculated on the record date for determination of holders entitled to receive such dividend or (B) in the case of a dividend on any class
or series of capital stock of the Corporation ranking junior to the Preferred Stock that is not convertible into Common Stock, at a rate
per share of Preferred Stock determined by (1) dividing the amount of the dividend payable on each share of such class or series of capital
stock by the original issuance price of such class or series of capital stock (subject to appropriate adjustment in the event of any stock
dividend, stock split, combination or other similar recapitalization with respect to such class or series) and (2) multiplying such fraction
by an amount equal to the Accrued Value; provided that if the Corporation declares, pays or sets aside, on the same date, a dividend on
shares of more than one class or series of capital stock of the Corporation that is junior to the Preferred Stock, the dividend payable
to the Holders of Preferred Stock pursuant to this Section 3 shall be calculated based upon the dividend on the class or series
of capital stock that would result in the highest Preferred Stock dividend.
(c) Subject
to Section 5 and Section 7, the Holders shall be entitled to receive, and the Corporation shall pay, dividends on shares
of Preferred Stock (other than Accrued Dividends), on an as-converted basis, equal to and in the same form as dividends actually paid
on shares of the Common Stock when, as and if such dividends are paid on shares of the Common Stock.
9
(d) Notwithstanding
anything to the contrary herein, to the extent that the Holder’s right to participate in any dividend would result in the Holder
exceeding the Beneficial Ownership Limitation, then the Holder shall not be entitled to participate in such dividend to such extent (or
in the beneficial ownership of any shares of Common Stock as a result of such Distribution to such extent) and the portion of such dividend
shall be held in abeyance for the benefit of the Holder until such time, if ever, such grant, issuance or sale, as its right thereto would
not result in the Holder exceeding the Beneficial Ownership Limitation.
Section 4. Voting Rights.
(a) The
Holders shall be entitled to notice of any meeting of stockholders of the Corporation and, except as otherwise required by law or as may
be provided herein, shall vote together with the holders of Common Stock as a single class upon any matter submitted to the stockholders
for a vote.
(b) On
any matter presented to the stockholders of the Corporation for their action or consideration at any meeting of the stockholders of the
Corporation (or by written consent in lieu of a meeting), a Holder, together with its Attribution Parties, shall be entitled to the number
of votes equal to the number of whole shares of Common Stock into which the shares of Preferred Stock held by such Holder, together with
its Attribution Parties, are convertible on the record date for determining stockholders entitled to vote on such matter (as adjusted
from time to time pursuant to Section 7 hereof and subject to the Beneficial Ownership Limitation), but without regard as to whether
sufficient shares of Common Stock are available out of the Corporation’s authorized but unissued stock, for the purpose of effecting
the conversion of the Preferred Stock.
(c) As
long as at least 20% or more of the shares of Preferred Stock issued as of the Closing are outstanding, the Corporation shall not, without
the affirmative vote or action by written consent of the Holders of at least a majority of the issued and outstanding shares of the Preferred
Stock (the “Required Holders”), which majority must include Inflection Point if Inflection Point then holds any shares
of Preferred Stock:
(i) liquidate, dissolve or wind-up the affairs of the Corporation;
(ii) amend,
alter or repeal the Corporation’s certificate of incorporation or bylaws, this Certificate of Designation or any similar document
of the Corporation in a manner that materially and adversely affects the powers, preferences or rights given to the Preferred Stock;
(iii) create
any equity security, authorize the creation of any equity security, classify any equity security, reclassify any equity security, or issue
any other security convertible into or exercisable for any equity security, unless such security ranks junior to the Preferred Stock with
respect to its rights, preferences and privileges or increase the number of authorized shares of Preferred Stock;
(iv) except
as set forth in Section 3, purchase or redeem or pay any cash dividend on any capital stock of the Corporation ranking junior
to the Preferred Stock prior to payment of such cash dividend on the Preferred Stock or purchase or redeem any capital stock of the
Corporation ranking junior to the Preferred Stock, other than capital stock repurchased at cost from former employees and
consultants in connection with the cessation of their service or pursuant to the terms of any equity incentive plan of the
Corporation;
10
(v) enter
into any transaction with an affiliate, other than the issuance of equity or awards to eligible participants under the Corporation’s
incentive plan, equity plan or equity-based compensation plan or with respect to employment, consulting or award agreements with respect
to executive officers of the Corporation, in each case regardless of whether such person (or such person’s affiliates) would be
considered an affiliate of the Corporation; or
(vi) incur
or guarantee any indebtedness other than equipment leases or trade payables incurred in the ordinary course of business; provided,
however, that the Preferred Stock shall not be considered indebtedness for purposes of this calculation.
(d) Notwithstanding
anything to the contrary herein, Section 6(d) may not be amended, modified or waived in any manner that materially and adversely
affects a Holder of Preferred Stock without such Holder’s consent.
Section 5. Ranking; Liquidation.
(a) The
Preferred Stock shall rank senior to all of the Common Stock and any other class or series of capital stock of the Corporation currently
existing or hereafter authorized, classified or reclassified by the Corporation (collectively, “Junior Securities”),
in each case, as to rights to receive dividends or to participate in distributions of assets or payments upon liquidation, dissolution
or winding up of the Corporation, whether voluntarily or involuntarily.
(b) Preferential
Payments to Holders of Preferred Stock; Distribution of Remaining Assets.
(i) In
the event of any voluntary or involuntary liquidation, dissolution or winding up of the Corporation, the Holders of shares of
Preferred Stock then outstanding shall be entitled to be paid out of the assets of the Corporation available for distribution to its
stockholders, and in the event of a Deemed Liquidation Event, the Holders of shares of Preferred Stock then outstanding shall be
entitled to be paid out of the consideration payable to stockholders in such Deemed Liquidation Event or out of the Available
Proceeds (as defined below), as applicable, before any payment shall be made to the holders of Common Stock or other Junior
Securities by reason of their ownership thereof, an amount per share equal to 100% of the Accrued Value on each share of Preferred
Stock. If upon any such liquidation, dissolution or winding up of the Corporation or Deemed Liquidation Event, the assets of the
Corporation available for distribution to its stockholders shall be insufficient to pay the Holders of shares of Preferred Stock the
full amount to which they shall be entitled under this Section 5(b), the Holders of shares of Preferred Stock shall share
ratably in any distribution of the assets available for distribution in proportion to the respective amounts that would otherwise be
payable in respect of the shares held by them upon such distribution if all amounts payable on or with respect to such shares were
paid in full.
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(ii) In
the event of any voluntary or involuntary liquidation, dissolution or winding up of the Corporation, after the payment in full of all
amounts required to be paid to the holders of shares of Preferred Stock pursuant to Section 5(b)(i), the remaining assets of the
Corporation available for distribution to its stockholders or, in the case of a Deemed Liquidation Event, the consideration not payable
to the holders of shares of Preferred Stock pursuant to Section 5(b)(i) or the remaining Available Proceeds, as the case may be,
shall be distributed among the holders of the shares of Preferred Stock and Common Stock, pro rata based on the number of shares held
by each such holder, treating for this purpose all such securities as if they had been converted to Common Stock pursuant to the terms
of this Certificate of Designation immediately prior to such liquidation, dissolution or winding up of the Corporation. The aggregate
amount which a holder of a share of Preferred Stock is entitled to receive under Sections 5(b)(i) and 5(b)(ii) is hereinafter
referred to as the “Preferred Stock Liquidation Amount.”
(c) Deemed Liquidation Events.
(i) In
the event of a Deemed Liquidation Event, if the Corporation does not effect a dissolution of the Corporation under the Delaware
General Corporation Law within ninety (90) days after such Deemed Liquidation Event, then (i) the Corporation shall send a written
notice to each Holder of Preferred Stock no later than the ninetieth (90th) day after the Deemed Liquidation Event
advising such Holders of their right (and the requirements to be met to secure such right) pursuant to the terms of the following
clause to require the redemption of such shares of Preferred Stock, and (ii) if the Required Holders so request in a written
instrument delivered to the Corporation not later than one hundred twenty (120) days after such Deemed Liquidation Event, the
Corporation shall use the consideration received by the Corporation for such Deemed Liquidation Event (net of any retained
liabilities associated with the assets sold or technology licensed, or any other expenses associated with the Deemed Liquidation
Event or the dissolution of the Corporation, in each case as determined in good faith by the Board of Directors of the Corporation),
together with any other assets of the Corporation available for distribution to its stockholders, all to the extent permitted by
Delaware law governing distributions to stockholders (the “Available Proceeds”), on the one hundred fiftieth
(150th) day after such Deemed Liquidation Event, to redeem all outstanding shares of Preferred Stock at a price per share
equal to the Preferred Stock Liquidation Amount. Notwithstanding the foregoing, in the event of a redemption pursuant to the
preceding sentence, if the Available Proceeds are not sufficient to redeem all outstanding shares of Preferred Stock, the
Corporation shall redeem a pro rata portion of each Holder’s shares of Preferred Stock to the fullest extent of such Available
Proceeds, based on the respective amounts that would otherwise be payable in respect of the shares to be redeemed if the Available
Proceeds were sufficient to redeem all such shares, and shall redeem the remaining shares as soon as it may lawfully do so under
Delaware law governing distributions to stockholders. The provisions of Section 5(i) shall apply, with such necessary changes
in the details thereof as are necessitated by the context, to the redemption of the Preferred Stock pursuant to this Section
5(c)(i). Prior to the distribution or redemption provided for in this Section 5(c)(i), the Corporation shall not expend
or dissipate the consideration received for such Deemed Liquidation Event, except to discharge expenses incurred in connection with
such Deemed Liquidation Event.
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(ii) In
any Deemed Liquidation Event, if Available Proceeds are in a form of property other than in cash, the value of such distribution shall
be deemed to be the fair market value of such property. The determination of fair market value of such property shall be made in good
faith by the Board of Directors of the Corporation, provided that to the extent such property consists of securities, the fair market
value of such securities shall be determined as follows:
(A). For securities not subject to investment letters or other similar restrictions on free marketability covered
by Section 5(c)(ii)(B) below, the fair market value of such securities shall be the VWAP of such securities on the date of receipt
(substituting the references to “Common Stock” in the definition of “VWAP” with such publicly traded security);
and
(B). The method of valuation of securities subject to investment letters or other similar restrictions on free
marketability (other than restrictions arising solely by virtue of a stockholder’s status as an affiliate or former affiliate) shall
take into account an appropriate discount (as determined in good faith by the Board of Directors of the Corporation) from the market value
as determined pursuant to Section 5(c)(ii)(A) above so as to reflect the approximate fair market value thereof.
(iii) If
any portion of the consideration payable to the stockholders of the Corporation is payable only upon satisfaction of contingencies (the
“Additional Consideration”), (a) the portion of such consideration that is not Additional Consideration (such portion,
the “Initial Consideration”) shall be allocated in accordance with the foregoing Section 5(b) and this Section
5(c) as if the Initial Consideration were the only consideration payable in connection with such Deemed Liquidation Event; and (b)
any Additional Consideration which becomes payable to the stockholders of the Corporation upon satisfaction of such contingencies shall
be allocated among the holders of capital stock of the Corporation in accordance with Sections 5(b) and Section 5(c) after
taking into account the previous payment of the Initial Consideration as part of the same transaction. For the purposes of this Section
5(c)(iii), consideration placed into escrow or retained as a holdback to be available for satisfaction of indemnification or similar
obligations in connection with such Deemed Liquidation Event shall be deemed to be Additional Consideration.
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Section 6. Conversion.
(a) Conversions
at Option of Holder. Each share of Preferred Stock shall be convertible, at any time and from time to time from and after the Original
Issue Date at the option of the Holder thereof, into that number of whole shares of Common Stock (subject to the limitations set forth
in Section 6(d)) determined by dividing the Accrued Value of such share of Preferred Stock by the Conversion Price. Holders shall
effect conversions by providing the Corporation with the form of conversion notice attached hereto as Annex A (a “Notice
of Conversion”), unless the Corporation directs Holders that the Notice of Conversion shall be delivered to the Corporation’s
transfer agent. Each Notice of Conversion shall specify the number of shares of Preferred Stock to be converted, the number of shares
of Preferred Stock owned prior to the conversion at issue, the number of shares of Preferred Stock owned subsequent to the conversion
at issue and the date on which such conversion is to be effected, which date may not be prior to the date the applicable Holder delivers
by e-mail attachment or by a nationally recognized overnight courier service such Notice of Conversion to the Corporation (such date,
the “Conversion Date”). If no Conversion Date is specified in a Notice of Conversion, the Conversion Date shall be
the date that such Notice of Conversion to the Corporation is deemed delivered hereunder. No ink-original Notice of Conversion shall be
required, nor shall any medallion guarantee (or other type of guarantee or notarization) of any Notice of Conversion form be required.
The calculations and entries set forth in the Notice of Conversion shall control in the absence of manifest or mathematical error. To
effect conversions of shares of Preferred Stock, a Holder shall not be required to surrender the certificate(s) representing the shares
of Preferred Stock to the Corporation unless all of the shares of Preferred Stock represented thereby are so converted, in which case
such Holder shall deliver the certificate representing such shares of Preferred Stock promptly following the Conversion Date at issue.
Shares of Preferred Stock converted into Common Stock or redeemed in accordance with the terms hereof shall be canceled and shall not
be reissued, and all rights (other than the right to receive the Conversion Shares) with respect to such shares will terminate. The Corporation’s
stock ledger and transfer book shall serve as the exclusive record of outstanding shares of Preferred Stock.
(b) Conversion
Price. The initial conversion price is $12.00, subject to adjustment herein (the “Conversion Price”).
(c) Mechanics of Conversion
(i) Delivery
of Conversion Shares Upon Conversion. Not later than the number of Trading Days comprising the Standard Settlement Period (as
defined below) after each Conversion Date (the “Share Delivery Date”), the Corporation shall deliver, or cause to
be delivered, to the converting Holder (A) the number of Conversion Shares being acquired upon the conversion of the Preferred
Stock, which on or after the earlier of (i) the one year anniversary of the Original Issue Date or (ii) the Effective Date, shall be
free of restrictive legends and trading restrictions (other than those which may then be required by any Purchase Agreement or any
other applicable lock-up agreement or similar agreement) and (B) cash in an amount equal to any accrued and unpaid dividends, if
any. On or after the earlier of (i) the one year anniversary of the Original Issue Date or (ii) the Effective Date, the Corporation
shall deliver the Conversion Shares required to be delivered by the Corporation under this Section 6 electronically through
the Depository Trust Company or another established clearing corporation performing similar functions. As used herein,
“Standard Settlement Period” means the standard settlement period, expressed in a number of Trading Days, on the
Corporation’s primary Trading Market with respect to the Common Stock as in effect on the date of delivery of the Notice of
Conversion. Notwithstanding the foregoing, with respect to any Notice(s) of Conversion delivered at or prior to 12:00 p.m. (New York
City time) on the Original Issue Date, the Corporation agrees to deliver the Conversion Shares subject to such notice(s) by 4:00
p.m. (New York City time) on the Original Issue Date.
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(ii) Failure
to Deliver Conversion Shares. If, in the case of any Notice of Conversion, such Conversion Shares are not delivered to or as reasonably
directed by the applicable Holder by the Share Delivery Date, the Holder shall be entitled to elect by written notice to the Corporation
at any time on or before its receipt of such Conversion Shares, to rescind such conversion, in which event the Corporation shall promptly
return to the Holder any original Preferred Stock certificate delivered to the Corporation and the Holder shall promptly return to the
Corporation the Conversion Shares issued to such Holder pursuant to the rescinded Notice of Conversion.
(iii) Obligation
Absolute; Partial Liquidated Damages. The Corporation’s obligation to issue and deliver the Conversion Shares upon
conversion of Preferred Stock in accordance with the terms hereof are absolute and unconditional, irrespective of any action or
inaction by a Holder to enforce the same, any waiver or consent with respect to any provision hereof, the recovery of any judgment
against any Person or any action to enforce the same, or any setoff, counterclaim, recoupment, limitation or termination, or any
breach or alleged breach by such Holder or any other Person of any obligation to the Corporation or any violation or alleged
violation of law by such Holder or any other person, and irrespective of any other circumstance which might otherwise limit such
obligation of the Corporation to such Holder in connection with the issuance of such Conversion Shares; provided, however,
that such delivery shall not operate as a waiver by the Corporation of any such action that the Corporation may have against such
Holder. In the event a Holder shall elect to convert any or all of the Accrued Value of its Preferred Stock, the Corporation may not
refuse conversion based on any claim that such Holder or anyone associated or affiliated with such Holder has been engaged in any
violation of law, agreement or for any other reason, unless an injunction from a court, on notice to Holder, restraining and/or
enjoining conversion of all or part of the Preferred Stock of such Holder shall have been sought and obtained, and the Corporation
posts a surety bond for the benefit of such Holder in the amount of 150% of the Accrued Value of Preferred Stock which is subject to
the injunction, which bond shall remain in effect until the completion of arbitration/litigation of the underlying dispute and the
proceeds of which shall be payable to such Holder to the extent it obtains judgment. In the absence of such injunction, the
Corporation shall issue Conversion Shares and, if applicable, cash, upon a properly noticed conversion. If the Corporation fails to
deliver to a Holder such Conversion Shares pursuant to Section 6(c)(i) by 10th Trading Day after the Share
Delivery Date applicable to such conversion, the Corporation shall pay to such Holder, in cash, as liquidated damages and not as a
penalty, for each $5,000 of Accrued Value of Preferred Stock being converted, $25 per Trading Day (increasing to $50 per Trading Day
on the third Trading Day and increasing to $100 per Trading Day on the sixth Trading Day after such damages begin to accrue) for
each Trading Day after the 10th Trading Day after the Share Delivery Date until such Conversion Shares are delivered or
Holder rescinds such conversion. Nothing herein shall limit a Holder’s right to pursue actual damages for the
Corporation’s failure to deliver Conversion Shares within the period specified herein and such Holder shall have the right to
pursue all remedies available to it hereunder, at law or in equity, including, without limitation, a decree of specific performance
and/or injunctive relief. The exercise of any such rights shall not prohibit a Holder from seeking to enforce damages pursuant to
any other Section hereof or under applicable law.
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(iv) Compensation
for Buy-In on Failure to Timely Deliver Conversion Shares Upon Conversion. In addition to any other rights available to the
Holder, if the Corporation fails for any reason unrelated to the actions of the Holder or its Affiliates to deliver to a Holder the
applicable Conversion Shares by the Share Delivery Date pursuant to Section 6(c)(i), and if after such Share Delivery Date
such Holder is required by its brokerage firm to purchase (in an open market transaction or otherwise), or the Holder’s
brokerage firm otherwise purchases, shares of Common Stock to deliver in satisfaction of a sale by such Holder of the Conversion
Shares which such Holder was entitled to receive upon the conversion relating to such Share Delivery Date (a
“Buy-In”), then the Corporation shall (A) pay in cash to such Holder (in addition to any other remedies available
to or elected by such Holder) the amount, if any, by which (x) such Holder’s total purchase price (including any brokerage
commissions) for the Common Stock so purchased exceeds (y) the product of (1) the aggregate number of shares of Common Stock that
such Holder was entitled to receive from the conversion at issue multiplied by (2) the actual sale price at which the sell order
giving rise to such purchase obligation was executed (excluding any brokerage commissions) and (B) at the option of such Holder,
either reissue (if surrendered) the shares of Preferred Stock equal to the number of shares of Preferred Stock submitted for
conversion (in which case, such conversion shall be deemed rescinded) or deliver to such Holder the number of shares of Common Stock
that would have been issued if the Corporation had timely complied with its delivery requirements under Section 6(c)(i). For
example, if a Holder purchases shares of Common Stock having a total purchase price of $11,000 to cover a Buy-In with respect to an
attempted conversion of shares of Preferred Stock with respect to which the actual sale price of the Conversion Shares (including
any applicable brokerage commissions) giving rise to such purchase obligation was a total of $10,000, under clause (A) of the
immediately preceding sentence, the Corporation shall be required to pay such Holder $1,000. The Holder shall provide the
Corporation written notice indicating the amounts payable to such Holder in respect of the Buy-In and, upon the request of the
Corporation, evidence of the amount of such loss. If a Holder purchases shares of Common Stock having a total purchase price of
$9,000 to cover a Buy-In with respect to an attempted conversion of shares of Preferred Stock with respect to which the actual sale
price of the Conversion Shares (including any applicable brokerage commissions) giving rise to such purchase obligation was a total
of $10,000, under clause (A) of the preceding sentence, the Corporation shall not be required to pay Holder any amount. For the
avoidance of doubt, in the event of a Buy-In, the Holder shall use commercially reasonable efforts to purchase shares at the lowest
available price, paying the lowest reasonably available brokerage commission. The Holder shall provide the Corporation written
notice indicating the amounts payable to such Holder in respect of the Buy-In and evidence of the amount of such loss. Nothing
herein shall limit a Holder’s right to pursue any other remedies available to it hereunder, at law or in equity including,
without limitation, a decree of specific performance and/or injunctive relief with respect to the Corporation’s failure to
timely deliver Conversion Shares upon conversion of the shares of Preferred Stock as required pursuant to the terms hereof.
(v) Reservation
of Shares Issuable Upon Conversion. The Corporation covenants that it will at all times reserve and keep available out of its authorized
and unissued shares of Common Stock for the sole purpose of issuance upon conversion of the Preferred Stock as herein provided, free from
preemptive rights or any other actual contingent purchase rights of Persons other than the Holder (and the other Holders of the Preferred
Stock), not less than such aggregate number of shares of the Common Stock as shall (subject to the terms and conditions set forth in the
Purchase Agreement) be issuable (taking into account the adjustments and restrictions of Section 7) upon the conversion of the
then outstanding shares of Preferred Stock (assuming for such purpose a Conversion Price equal to the Floor Price and any such conversions
are made without regard to any limitations on conversion set forth herein). The Corporation covenants that all shares of Common Stock
that shall be so issuable shall, upon issue, be duly authorized, validly issued, fully paid and nonassessable and, if a Registration Statement
is then effective under the Securities Act, shall be registered for public resale in accordance with such Registration Statement (subject
to such Holder’s compliance with its obligations under the Registration Rights Agreement).
(vi) Fractional
Shares. No fractional shares or scrip representing fractional shares shall be issued upon the conversion of the Preferred Stock. As
to any fraction of a share which the Holder would otherwise be entitled to purchase upon such conversion, the Corporation shall at its
election, either pay a cash adjustment in respect of such final fraction in an amount equal to such fraction multiplied by the Conversion
Price or round up to the next whole share. Notwithstanding anything to the contrary contained herein, but consistent with the provisions
of this subsection with respect to fractional Conversion Shares, nothing shall prevent any Holder from converting fractional shares of
Preferred Stock.
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(vii) Transfer
Taxes and Expenses. The issuance of Conversion Shares on conversion of this Preferred Stock shall be made without charge to any Holder
for any documentary stamp or similar taxes that may be payable in respect of the issue or delivery of such Conversion Shares, provided
that the Corporation shall not be required to pay any tax that may be payable in respect of any transfer involved in the issuance
and delivery of any such Conversion Shares upon conversion in a name other than that of the Holders of such shares of Preferred Stock
and the Corporation shall not be required to issue or deliver such Conversion Shares unless or until the Person or Persons requesting
the issuance thereof shall have paid to the Corporation the amount of such tax or shall have established to the satisfaction of the Corporation
that such tax has been paid.
(d) Beneficial
Ownership Limitation. A Holder may notify the Corporation in writing in the event it elects to be subject to the provisions
contained in this Section 6(d); however, no Holder shall be subject to this Section 6(d) unless he, she or it makes
such election. If the election is made, (i) the Corporation shall not effect any conversion of the Preferred Stock, and such Holder
shall not have the right to convert all or any portion of the Preferred Stock, to the extent that, after giving effect to the
conversion set forth on the applicable Notice of Conversion, such Holder (together with such Holder’s Affiliates, and any
Persons acting as a group together with such Holder or any of such Holder’s Affiliates (such Persons, “Attribution
Parties”)) would beneficially own in excess of 4.9%, 9.9%, 19.9% of the Corporation’s Common Stock (or such other
amount as a Holder may specify) (the “Beneficial Ownership Limitation”) and (ii) the Corporation shall not permit
the Holder to vote, and such Holder shall not have the right vote pursuant to Section 4(b) of this Certificate of
Designation, all or any portion of the Preferred Stock that such Holder is not permitted to convert pursuant to the preceding clause
(i) (provided, however, that such Holder shall retain the right to vote pursuant to Section 4(c) of this Certificate of
Designation to the extent that retaining such right does not cause such Holder to be deemed to beneficially own Conversion Shares
within the meaning of Rule 13d-3 promulgated under the Exchange Act). For purposes of the foregoing sentence, the number of shares
of Common Stock beneficially owned by such Holder and its Affiliates and Attribution Parties shall include the number of shares of
Common Stock issuable upon conversion of the Preferred Stock with respect to which such determination is being made, but shall
exclude the number of shares of Common Stock which are issuable upon (i) conversion of the remaining, unconverted Accrued Value of
Preferred Stock beneficially owned by such Holder or any of its Affiliates or Attribution Parties and (ii) exercise or conversion of
the unexercised or unconverted portion of any other securities of the Corporation subject to a limitation on conversion or exercise
analogous to the limitation contained herein beneficially owned by such Holder or any of its Affiliates or Attribution Parties.
Except as set forth in the preceding sentence, for purposes of this Section 6(d), beneficial ownership shall be calculated in
accordance with Section 13(d) of the Exchange Act and the rules and regulations promulgated thereunder. To the extent that the
limitation contained in this Section 6(d) applies, the determination of whether the Preferred Stock is convertible (in
relation to other securities owned by such Holder together with any Affiliates and Attribution Parties) and of how many shares of
Preferred Stock are convertible shall be in the sole discretion of such Holder, and the submission of a Notice of Conversion shall
be deemed to be such Holder’s determination of whether the shares of Preferred Stock may be converted (in relation to other
securities owned by such Holder together with any Affiliates and Attribution Parties) and how many shares of the Preferred Stock are
convertible, in each case subject to the Beneficial Ownership Limitation. To ensure compliance with this restriction, each Holder
will be deemed to represent to the Corporation each time it delivers a Notice of Conversion that such Notice of Conversion has not
violated the restrictions set forth in this paragraph and the Corporation shall have no obligation to verify or confirm the accuracy
of such determination. In addition, a determination as to any group status as contemplated above shall be determined in accordance
with Section 13(d) of the Exchange Act and the rules and regulations promulgated thereunder. The Holder shall provide the
Corporation with any information reasonably requested by the Corporation in connection with this Beneficial Ownership Limitation and
the provisions related thereto, in each case with respect to the Corporation’s reporting obligations pursuant to the
Securities Act, the Exchange Act, or other federal or state securities regulations. For purposes of this Section 6(d), in
determining the number of outstanding shares of Common Stock, a Holder may rely on the number of outstanding shares of Common Stock
as stated in the most recent of the following: (i) the Corporation’s most recent periodic or annual report filed with the
Commission, as the case may be, (ii) a more recent public announcement by the Corporation or (iii) a more recent written notice by
the Corporation or the Transfer Agent setting forth the number of shares of Common Stock outstanding. Upon the written or oral
request (which may be via email) of a Holder, the Corporation shall within two Trading Days confirm in writing to such Holder the
number of shares of Common Stock then outstanding. In any case, the number of outstanding shares of Common Stock shall be determined
after giving effect to the conversion or exercise of securities of the Corporation, including the Preferred Stock, by such Holder or
its Affiliates or Attribution Parties since the date as of which such number of outstanding shares of Common Stock was reported. By
written notice to the Corporation, a Holder may from time to time increase or decrease the Beneficial Ownership Limitation
applicable to such Holder, provided, however, that any such increase in the Beneficial Ownership Limitation will not be effective
until the sixty-first (61st) day after such notice is delivered to the Corporation. The provisions of this paragraph
shall be construed and implemented in a manner otherwise than in strict conformity with the terms of this Section 6(d) to
correct this paragraph (or any portion hereof) which may be defective or inconsistent with the intended Beneficial Ownership
Limitation contained herein or to make changes or supplements necessary or desirable to properly give effect to such limitation. The
limitations contained in this paragraph shall apply to a successor Holder of Preferred Stock.
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Section 7. Certain Adjustments.
(a) Stock
Dividends and Stock Splits. If the Corporation, at any time while this Preferred Stock is outstanding: (i) pays a stock dividend
or otherwise makes a distribution or distributions payable in shares of Common Stock on shares of Common Stock or any other Common
Stock Equivalents (which, for avoidance of doubt, shall not include any shares of Common Stock issued by the Corporation upon
conversion of, or payment of a dividend on, this Preferred Stock or any cash distributions), (ii) subdivides outstanding shares of
Common Stock into a larger number of shares, (iii) combines (including by way of a reverse stock split) outstanding shares of Common
Stock into a smaller number of shares, or (iv) issues, in the event of a reclassification of shares of the Common Stock, any shares
of capital stock of the Corporation, then each of the Conversion Price and the Floor Price shall be multiplied by a fraction of
which the numerator shall be the number of shares of Common Stock (excluding any treasury shares of the Corporation) outstanding
immediately before such event, and of which the denominator shall be the number of shares of Common Stock outstanding immediately
after such event. Any adjustment made pursuant to this Section 7(a) shall become effective immediately after the record date
for the determination of stockholders entitled to receive such dividend or distribution and shall become effective immediately after
the effective date in the case of a subdivision, combination or re-classification.
(b) VWAP
Reset. If on the twenty-first trading day following the date that is six months after the Closing Date, the VWAP (the “Measurement
Price”) is less than the Conversion Price then in effect, then the Conversion Price then in effect shall be reduced to an amount
equal to the greater of (i) the Measurement Price and (ii) $5.00.
(c) Adjustment
of Conversion Price upon Issuance of Common Stock.2 If and whenever on or after the Closing Date until the first date on
which no shares of Preferred Stock are outstanding the Corporation issues or sells, or in accordance with this Section 7(c) is
deemed to have issued or sold, any shares of Common Stock (including the issuance or sale of shares of Common Stock owned or held by or
for the account of the Corporation, but excluding shares of Common Stock issued or sold, or deemed to have been issued or
sold, by the Corporation in connection with any Exempt Issuance) for a consideration per share (the “New Issuance Price”)
less than the Conversion Price (each such issue, sale or deemed issuance or sale, a “Dilutive Issuance”), then, immediately
after such Dilutive Issuance, the Conversion Price then in effect shall be reduced to an amount equal to the New Issuance Price. For all
purposes of the foregoing (including, without limitation, determining the adjusted Conversion Price and the New Issuance Price under this
Section 7(c)), the following shall be applicable:
(i) Options
and Convertible Securities. The consideration per share received by the Corporation for Common Stock issued or deemed to have been
issued pursuant to Section 7(c)(ii), relating to Options and Convertible Securities, shall be determined by dividing:
(A). the total amount, if any, received or receivable by the Corporation as consideration for the issue of
such Options or Convertible Securities, plus the minimum aggregate amount of additional consideration (as set forth in the instruments
relating thereto, without regard to any provision contained therein for a subsequent adjustment of such consideration) payable to the
Corporation upon the exercise of such Options or the conversion or exchange of such Convertible Securities, or in the case of Options
for Convertible Securities, the exercise of such Options for Convertible Securities and the conversion or exchange of
such Convertible Securities, by
2 To be discussed.
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(B). the maximum number of shares of Common Stock (as set forth in the instruments relating thereto, without
regard to any provision contained therein for a subsequent adjustment of such number) deemed to be issued pursuant to Section 7(c)(ii)
upon the issuance of such Options or Convertible Securities.
(ii) Deemed Issuance of Options and Convertible Securities.
(A). If the Corporation at any time or from time to time shall issue any Options or Convertible Securities
or shall fix a record date for the determination of holders of any class of securities entitled to receive any such Options or Convertible
Securities, in each case excluding shares of Common Stock issued or sold, or deemed to have been issued or sold, by the Corporation in
connection with any Exempt Issuance, then the maximum number of shares of Common Stock (as set forth in the instrument relating thereto,
assuming the satisfaction of any conditions to exercisability, convertibility or exchangeability but without regard to any provision contained
therein for a subsequent adjustment of such number) issuable upon the exercise of such Options or, in the case of Convertible Securities
and Options therefor, the conversion or exchange of such Convertible Securities, shall be deemed to be outstanding and to have been issued
as of the time of such issue or, in case such a record date shall have been fixed, as of the close of business on such record date when
determining the amount of the adjustment for such issuance under this Section 7(c).
(B). If the purchase or exercise price provided for in any Options, the additional consideration, if any, payable
upon the issue, conversion, exercise or exchange of any Convertible Securities, or the rate at which any Convertible Securities are convertible
into or exercisable or exchangeable for Common Stock increases or decreases at any time (other than (i) proportional changes in conversion
or exercise prices, as applicable, in connection with an event referred to in Section 7(a) above and (ii) automatic adjustments
to such terms pursuant to anti-dilution or similar provisions of such Option or Convertible Security which are not more favorable to the
holder thereof than the anti-dilution and similar provisions set forth herein), the Conversion Price in effect at the time of such increase
or decrease shall be adjusted to the Conversion Price which would have been in effect at such time had such Options or Convertible Securities
provided for such increased or decreased purchase price, additional consideration or increased or decreased conversion rate (as the case
may be) at the time initially granted, issued or sold. For purposes of this Section 7(c), if the terms of any Option or Convertible
Security that was outstanding as of the date of first issuance of a share of Preferred Stock are increased
or decreased in the manner described in the immediately preceding sentence, then such Option or Convertible Security and the shares of
Common Stock deemed issuable upon exercise, conversion or exchange thereof shall be deemed to have been issued as of the date of such
increase or decrease. No adjustment pursuant to this Section 7(c)(ii) shall be made if such adjustment would result in an increase
of the Conversion Price then in effect.
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(iii) Calculation of Consideration Received.
(A). In case one or more Option is issued in connection with the issue or sale of other securities of the Corporation,
together comprising one integrated transaction, (x) each such Option will be deemed to have been issued for the Option Value of such Option
and (y) the other securities issued or sold in such integrated transaction shall be deemed to have been issued or sold for the difference
of (I) the aggregate consideration received by the Corporation less any consideration paid or payable by the Corporation pursuant to the
terms of such other securities of the Corporation, less (II) the Option Value of each such Option.
(B). If any shares of Common Stock, Options or Convertible Securities are issued or sold or deemed to have
been issued or sold for cash, the consideration other than cash received therefor will be deemed to be the net amount received by the
Corporation therefor. If any shares of Common Stock, Options or Convertible Securities are issued or sold for a consideration other than
cash, the amount of such consideration received by the Corporation will be the fair value of such consideration, except where such consideration
consists of publicly traded securities, in which case the amount of consideration received by the Corporation will be the VWAP of such
publicly traded securities on the date of receipt (substituting the references to “Common Stock” in the definition of VWAP
with such publicly traded security). If any shares of Common Stock, Options or Convertible Securities are issued to the owners of the
non-surviving entity in connection with any merger in which the Corporation is the surviving entity, the amount of consideration therefor
will be deemed to be the fair value of such portion of the net assets and business of the non-surviving entity as is attributable to such
shares of Common Stock, Options or Convertible Securities, as the case may be. The fair value of any consideration other than cash or
publicly traded securities will be determined jointly by the Corporation and the Required Holders. If such parties are unable to reach
agreement within ten (10) days after the occurrence of an event requiring valuation (the “Valuation Event”), the fair
value of such consideration will be determined within five (5) Business Days after the tenth (10th) day following the Valuation Event
by an independent, reputable appraiser jointly selected by the Corporation and the Required Holders. The determination of such appraiser
shall be final and binding upon all parties absent manifest error and the fees and expenses
of such appraiser shall be borne by the Corporation.
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(iv) Record
Date. If the Corporation takes a record of the holders of shares of Common Stock for the purpose of entitling them (A) to receive
a dividend or other distribution payable in shares of Common Stock, Options or in Convertible Securities or (B) to subscribe for or purchase
shares of Common Stock, Options or Convertible Securities, then such record date will be deemed to be the date of the issuance or sale
of the shares of Common Stock deemed to have been issued or sold upon the declaration of such dividend or the making of such other distribution
or the date of the granting of such right of subscription or purchase (as the case may be).
(v) Expiration
or Termination of Options or Convertible Securities. Upon the expiration or termination of any unexercised Option or unconverted or
unexchanged Convertible Securities (or portion thereof) which resulted (either upon its original issuance or upon a revision of its terms)
in an adjustment to the Conversion Price pursuant to the terms of Section 7(c), the Conversion Price shall be readjusted to such
Conversion Price as would have obtained had such Option or Convertible Securities (or portion thereof) never been issued.
(d) Subsequent
Rights Offerings. In addition to any adjustments pursuant to Section 7(a) and Section 7(c) above, if at any time the
Corporation grants, issues or sells any Common Stock Equivalents or rights to purchase stock, warrants, securities or other property pro
rata to all or substantially all of the record holders of any class of shares of Common Stock (the “Purchase Rights”),
then the Holders will be entitled to acquire, upon the terms applicable to such Purchase Rights, the aggregate Purchase Rights which the
Holder could have acquired if the Holder had held the number of shares of Common Stock acquirable upon complete conversion of such Holder’s
Preferred Stock (without regard to any limitations on conversion hereof, including without limitation, the Beneficial Ownership Limitation)
immediately before the date on which a record is taken for the grant, issuance or sale of such Purchase Rights, or, if no such record
is taken, the date as of which the record holders of shares of Common Stock are to be determined for the grant, issue or sale of such
Purchase Rights (provided, however, that, to the extent that the Holder’s right to participate in any
such Purchase Right would result in the Holder exceeding the Beneficial Ownership Limitation, then the Holder shall not be entitled to
participate in such Purchase Right to such extent (or beneficial ownership of such shares of Common Stock as a result of such Purchase
Right to such extent) and such Purchase Right to such extent shall be held in abeyance for the Holder until such time, if ever, as its
right thereto would not result in the Holder exceeding the Beneficial Ownership Limitation). To the extent that the issue price of such
Purchase Rights would result in an adjustment of the Conversion Price pursuant to Section 7(c), such adjustment shall not occur
to the extent the Holders were granted the right to acquire such Purchase Rights on the applicable terms.
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(e) Pro
Rata Distributions. In addition to the requirements of Section 3, during such time as this Preferred Stock is
outstanding, if the Corporation declares or makes any dividend or other distribution of its assets (or rights to acquire its assets)
to holders of shares of Common Stock, by way of return of capital or otherwise (including, without limitation, any distribution of
cash, stock or other securities, property or options by way of a dividend, spin off, reclassification, corporate rearrangement,
scheme of arrangement or other similar transaction) (a “Distribution”), in each such case, the Holders shall be
entitled to participate in such Distribution to the same extent that the Holders would have participated therein if the Holder had
held the number of shares of Common Stock acquirable upon complete conversion of this Preferred Stock (without regard to any
limitations on conversion hereof, including without limitation, the Beneficial Ownership Limitation) immediately before the date of
which a record is taken for such Distribution, or, if no such record is taken, the date as of which the record holders of shares of
Common Stock are to be determined for the participation in such Distribution (provided, however, to the
extent that the Holder’s right to participate in any such Distribution would result in the Holder exceeding the Beneficial
Ownership Limitation, then the Holder shall not be entitled to participate in such Distribution to such extent (or in the beneficial
ownership of any shares of Common Stock as a result of such Distribution to such extent) and the portion of such Distribution shall
be held in abeyance for the benefit of the Holder until such time, if ever, as its right thereto would not result in the Holder
exceeding the Beneficial Ownership Limitation).
(f) Fundamental Transaction.
(i) If,
at any time while this Preferred Stock is outstanding, (i) the Corporation, directly or indirectly, in one or more related
transactions effects any merger or consolidation of the Corporation with or into another Person, (ii) the Corporation (and all of
its Subsidiaries, taken as a whole), directly or indirectly, effects any sale, lease, license, assignment, transfer, conveyance or
other disposition of all or substantially all of its assets in one or a series of related transactions, (iii) any, direct or
indirect, purchase offer, tender offer or exchange offer (whether by the Corporation or another Person) is completed pursuant to
which holders of Common Stock are permitted to sell, tender or exchange their shares for other securities, cash or property and has
been accepted by the holders of 50% or more of the outstanding Common Stock or 50% or more of the voting power of the common equity
of the Corporation, (iv) the Corporation, directly or indirectly, in one or more related transactions effects any reclassification,
reorganization or recapitalization of the Common Stock or any compulsory share exchange pursuant to which the Common Stock is
effectively converted into or exchanged for other securities, cash or property (other than as a result of a stock split, combination
or reclassification of shares of Common Stock covered by Section 7(a)), or (v) the Corporation, directly or indirectly, in
one or more related transactions consummates a stock or share purchase agreement or other business combination (including, without
limitation, a reorganization, recapitalization, spin-off or scheme of arrangement) with another Person whereby such other Person
acquires 50% or more of the outstanding shares of Common Stock or 50% or more of the voting power of the common equity of the
Corporation, and such event(s) do not constitute a Deemed Liquidation Event (each a “Fundamental Transaction”),
then, upon any subsequent conversion of this Preferred Stock, the Holder shall have the right to receive, for each Conversion Share
that would have been issuable upon such conversion immediately prior to the occurrence of such Fundamental Transaction (without
regard to any limitation in Section 6(d) on the conversion of this Preferred Stock), the number of shares of capital stock of
the successor or acquiring corporation or of the Corporation, if it is the surviving corporation, and any additional consideration
(the “Alternate Consideration”) receivable as a result of such Fundamental Transaction by a holder of the number
of shares of Common Stock for which this Preferred Stock is convertible immediately prior to such Fundamental Transaction (without
regard to any limitation in Section 6(d) on the conversion of this Preferred Stock).
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(ii) For
purposes of any such conversion, the determination of the Conversion Price shall be appropriately adjusted to apply to such Alternate
Consideration based on the amount of Alternate Consideration issuable in respect of one share of Common Stock in such Fundamental Transaction,
and the Corporation shall apportion the Conversion Price among the Alternate Consideration in a reasonable manner reflecting the relative
value of any different components of the Alternate Consideration. If holders of Common Stock are given any choice as to the securities,
cash or property to be received in a Fundamental Transaction, then the Holder shall be given the same choice as to the Alternate Consideration
it receives upon any conversion of this Preferred Stock following such Fundamental Transaction. To the extent necessary to effectuate
the foregoing provisions, any successor to the Corporation or surviving entity in such Fundamental Transaction shall file a new Certificate
of Designation with the same terms and conditions and issue to the Holders new preferred stock consistent with the foregoing provisions
and evidencing the Holders’ right to convert such preferred stock into Alternate Consideration.
(iii) The
Corporation shall cause any successor entity in a Fundamental Transaction in which the Corporation is not the survivor (the
“Successor Entity”) to assume in writing all of the obligations of the Corporation under this Certificate of
Designation and the Registration Rights Agreement in accordance with the provisions of this Section 7(f) pursuant to written
agreements in form and substance reasonably satisfactory to the Required Holders and approved by the Required Holders (without
unreasonable delay) prior to such Fundamental Transaction and shall, at the option of the Holder of this Preferred Stock, deliver to
the Holder in exchange for this Preferred Stock a security of the Successor Entity evidenced by a written instrument substantially
similar in form and substance to this Preferred Stock which is convertible for a corresponding number of shares of capital stock of
such Successor Entity (or its parent entity) equivalent to the shares of Common Stock acquirable and receivable upon conversion of
this Preferred Stock (without regard to any limitations on the conversion of this Preferred Stock) prior to such Fundamental
Transaction, and with a conversion price which applies the Conversion Price hereunder to such shares of capital stock (but taking
into account the relative value of the shares of Common Stock pursuant to such Fundamental Transaction and the value of such shares
of capital stock, such number of shares of capital stock and such conversion price being for the purpose of protecting the economic
value of this Preferred Stock immediately prior to the consummation of such Fundamental Transaction), and which is reasonably
satisfactory in form and substance to the Required Holders.
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(g) Calculations.
All calculations under this Section 7 shall be made to the nearest cent or the nearest 1/100th of a share, as the case may be.
For purposes of this Section 7, the number of shares of Common Stock deemed to be issued and outstanding as of a given date shall
be the sum of the number of shares of Common Stock (excluding any treasury shares of the Corporation) issued and outstanding.
(h) Notice to the Holders.
(i) Adjustment
to Conversion Price. Whenever the Conversion Price is adjusted pursuant to any provision of this Section 7, the Corporation
shall promptly deliver to each Holder by email a notice setting forth the Conversion Price after such adjustment and setting forth a brief
statement of the facts requiring such adjustment.
(ii) Notice
to Allow Conversion by Holder. If (A) the Corporation shall declare a dividend (or any other distribution in whatever form) on
the Common Stock, (B) the Corporation shall declare a redemption of the Common Stock, (C) the Corporation shall authorize the
granting to all holders of the Common Stock of rights or warrants to subscribe for or purchase any shares of capital stock of any
class or of any rights, (D) the approval of any stockholders of the Corporation shall be required in connection with any
reclassification of the Common Stock, any consolidation or merger to which the Corporation is a party, any sale or transfer of all
or substantially all of the assets of the Corporation (and all of its Subsidiaries, taken as a whole), or any compulsory share
exchange whereby the Common Stock is converted into other securities, cash or property or (E) the Corporation shall authorize the
voluntary or involuntary dissolution, liquidation or winding up of the affairs of the Corporation, then, in each case, the
Corporation shall cause to be filed at each office or agency maintained for the purpose of conversion of this Preferred Stock, and
shall cause to be delivered by email to each Holder at its email address as it shall appear upon the stock books of the Corporation,
at least twenty (20) calendar days prior to the applicable record or effective date hereinafter specified, a notice stating (x) the
date on which a record is to be taken for the purpose of such dividend, distribution, redemption, rights or warrants, or if a record
is not to be taken, the date as of which the holders of the Common Stock of record to be entitled to such dividend, distributions,
redemption, rights or warrants are to be determined or (y) the date on which such reclassification, consolidation, merger, sale,
transfer or share exchange is expected to become effective or close, and the date as of which it is expected that holders of the
Common Stock of record shall be entitled to exchange their shares of the Common Stock for securities, cash or other property
deliverable upon such reclassification, consolidation, merger, sale, transfer or share exchange, provided that the
failure to deliver such notice or any defect therein or in the delivery thereof shall not affect the validity of the corporate
action required to be specified in such notice. To the extent that any notice provided hereunder constitutes, or contains, material,
non-public information regarding the Corporation or any of the Subsidiaries, the Corporation shall simultaneously file such notice
with the Commission pursuant to a Current Report on Form 8-K, unless determined by the Corporation that such filing would be harmful
to the Corporation at such time, in which case the Corporation shall file such 8-K as soon as is reasonably practicable in its
discretion. For the avoidance of doubt, and without limiting the conversion rights of any Holder, each Holder shall remain entitled
to convert the Accrued Value of this Preferred Stock (or any part hereof) during the twenty (20)-day period commencing on the date
of such notice through the effective date of the event triggering such notice except as may otherwise be expressly set forth
herein.
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Section 8. Redemption.
(a) Redemption
by the Corporation. Subject to the provisions of this Section 8 and unless prohibited by applicable law governing distributions
to stockholders, if, throughout the 15-day period following the Corporation Notice (as defined below), (x) the Registration Statement
is effective, (y) the Registration Statement covers the resale of all of the Common Stock issuable upon conversion of all of the outstanding
shares of Preferred Stock and (z) a current prospectus relating thereto is available, the Corporation may, in its sole discretion, redeem
all or a portion of the outstanding shares of Preferred Stock:
(i) on
or after the Closing but prior to the first anniversary of the Closing, at a redemption price per share equal to the greater of (i) 150%
of the Accrued Value (which shall be payable in cash) and (ii) such amount per share as would have been payable had all shares of Preferred
Stock been converted into Common Stock pursuant to Section 6 immediately prior to such redemption based on the then effective rate
of conversion (which shall be payable, at the option of the Corporation, in cash or shares of Common Stock or a combination thereof, with
the value of such shares of Common Stock being the closing price of such shares of Common Stock on the Trading Market on the applicable
date of redemption);
(ii) on
or after the first anniversary of the Closing but prior to the second anniversary of the Closing, at a redemption price per share
equal to the greater of (i) 140% of the Accrued Value (which shall be payable in cash) and (ii) such amount per share as would have
been payable had all shares of Preferred Stock been converted into Common Stock pursuant to Section 6 immediately prior to
such redemption based on the then effective rate of conversion (which shall be payable, at the option of the Corporation, in cash or
shares of Common Stock or a combination thereof, with the value of such shares of Common Stock being the closing price of such
shares of Common Stock on the Trading Market on the applicable date of redemption);
(iii) on
or after the second anniversary of the Closing but prior to the third anniversary of the Closing, at a redemption price per share
equal to the greater of (i) 130% of the Accrued Value (which shall be payable in cash) and (ii) such amount per share as would have
been payable had all shares of Preferred Stock been converted into Common Stock pursuant to Section 6 immediately prior to
such redemption based on the then effective rate of conversion (which shall be payable, at the option of the Corporation, in cash or
shares of Common Stock or a combination thereof, with the value of such shares of Common Stock being the closing price of such
shares of Common Stock on the Trading Market on the applicable date of redemption);
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(iv) on
or after the third anniversary of the Closing but prior to the fourth anniversary of the Closing, at a redemption price per share
equal to the greater of (i) 120% of the Accrued Value (which shall be payable in cash) and (ii) such amount per share as would have
been payable had all shares of Preferred Stock been converted into Common Stock pursuant to Section 6 immediately prior to
such redemption based on the then effective rate of conversion (which shall be payable, at the option of the Corporation, in cash or
shares of Common Stock or a combination thereof, with the value of such shares of Common Stock being the closing price of such
shares of Common Stock on the Trading Market on the applicable date of redemption);
(v) on
or after the fourth anniversary of the Closing but prior to the fifth anniversary of the Closing, at a redemption price per share
equal to the greater of (i) 110% of the Accrued Value (which shall be payable in cash) and (ii) such amount per share as would have
been payable had all shares of Preferred Stock been converted into Common Stock pursuant to Section 6 immediately prior to
such redemption based on the then effective rate of conversion (which shall be payable, at the option of the Corporation, in cash or
shares of Common Stock or a combination thereof, with the value of such shares of Common Stock being the closing price of such
shares of Common Stock on the Trading Market on the applicable date of redemption); and
(vi) on
or after the fifth anniversary of the Closing, at a redemption price per share equal to the greater of (i) 100% of the Accrued Value
(which shall be payable in cash) and (ii) such amount per share as would have been payable had all shares of Preferred Stock been
converted into Common Stock pursuant to Section 6 immediately prior to such redemption based on the then effective rate of
conversion (which shall be payable, at the option of the Corporation, in cash or shares of Common Stock or a combination thereof,
with the value of such shares of Common Stock being the closing price of such shares of Common Stock on the Trading Market on the
applicable date of redemption).
If, on the date of
such redemption, applicable law governing distributions to stockholders prevents the Corporation from redeeming all shares of
Preferred Stock scheduled to be redeemed, the Corporation shall be entitled to ratably redeem the maximum number of shares that it
may redeem consistent with such law and any Preferred Stock not so redeemed shall remain outstanding. The Corporation shall provide
written notice (the “Corporation Notice”) by e-mail and first class mail postage prepaid, to each Holder of
record (determined at the close of business on the Business Day next preceding the day on which the Corporation Notice is given) of
the Preferred Stock to be redeemed, at the address last shown on the records of the Corporation for such Holder, notifying such
Holder of the redemption to be effected, specifying the number of shares to be redeemed from such Holder, specifying the date of
such redemption, the redemption price, the place at which payment may be obtained and calling upon such Holder to surrender to the
Corporation, in the manner and at the place designated, his, her or its certificate or certificates representing the shares to be
redeemed; provided that the date of redemption shall be not less than 15 days from the date of the Corporation Notice. Except
as otherwise provided herein, on or after the applicable date of redemption, each Holder to be redeemed shall surrender to the
Corporation the certificate or certificates representing such shares, in the manner and at the place designated in the Corporation
Notice, and thereupon the price of redemption of such shares shall be payable to the order of the person whose name appears on such
certificate or certificates as the owner thereof and each surrendered certificate shall be cancelled. In the event less than all the
shares represented by any such certificate are redeemed, a new certificate shall be issued representing the unredeemed shares.
Notwithstanding anything herein to the contrary, each Holder shall remain entitled to convert all or a portion of the Accrued Value
of its Preferred Stock (or any part thereof) at any time and from time to time during the 15-day period commencing on the date of
the Corporation Notice through the applicable date of redemption. Any payment of the redemption price in shares of Common Stock
shall be subject to the Beneficial Ownership Limitation. To the extent that the Holder’s receipt of any such shares of Common
Stock would result in the Holder exceeding the Beneficial Ownership Limitation, then the Holder shall not be entitled to receive
such shares of Common Stock to such extent (or in the beneficial ownership of any shares of Common Stock as a result of thereof to
such extent) and the portion of such redemption shall be held in abeyance for the benefit of the Holder until such time, if ever, as
its right thereto would not result in the Holder exceeding the Beneficial Ownership Limitation.
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(b) Redemption by the Holders.
(i) Unless
prohibited by applicable law governing distribution to stockholders, shares of Preferred Stock shall be redeemed by the Corporation at
a purchase price equal to the Accrued Value (the “Redemption Price”), if at any time and from time to time after the
fifth (5th) anniversary of the Closing, a Holder delivers to the Corporation a written notice demanding redemption of all of
such Holder’s shares of Preferred Stock (the “Redemption Request”). The 20th day after the date of the Redemption
Request shall be referred to as the “Redemption Date.” Upon receipt of a Redemption Request, the Corporation shall
apply all of its assets to any such redemption, and to no other corporate purpose, until the Redemption Price has been paid in full, except
to the extent prohibited by Delaware law governing distributions to stockholders.
(ii) Following
receipt of a Redemption Request, the Corporation shall send written notice of the mandatory redemption (the “Redemption Notice”)
to the redeeming Holder of record of Preferred Stock not less than 15 days prior to the Redemption Date. The Redemption Notice shall state:
(A). the number of shares of Preferred Stock held by the Holder that the Corporation shall redeem on the Redemption Date;
(B). the Redemption Date and the Redemption Price;
(C). the date upon which the Holder’s right to convert such shares terminates; and
(D). for Holders of shares in certificated form, that the Holder is to surrender to the Corporation, in the manner and at the place designated,
his, her or its certificate or certificates representing the shares of Preferred Stock to be redeemed.
(iii) On
the Redemption Date, the Corporation shall redeem the Preferred Stock owned by such Holder. If on the Redemption Date Delaware law governing
distributions to stockholders prevents the Corporation from redeeming all shares of Preferred Stock to be redeemed, the Corporation shall
ratably redeem the maximum number of shares that it may redeem consistent with such law, and shall redeem the remaining shares as soon
as it may lawfully do so under such law. In the event that any portion of the Redemption Price has not been paid within 5 Business Days
following the Redemption Date, interest on such unpaid portion of the Redemption Price shall accrue thereon until such amount is paid
in full at a rate equal to the lesser of (i) 24.0% per annum and (ii) the maximum rate permitted under applicable law.
(c) Rights
Subsequent to Redemption. Upon the redemption of shares of Preferred Stock pursuant to Section 8(a) or Section 8(b),
all rights with respect to such shares of Preferred Stock shall immediately terminate, except with respect to the right of the Holders
to receive the applicable redemption price with respect to such shares of Preferred Stock in accordance with Section 8(a) or Section
8(b), as applicable.
Section 9. Miscellaneous.
(a) Notices.
Any and all notices or other communications or deliveries to be provided by the Holders hereunder including, without limitation, any
Notice of Conversion, shall be in writing and delivered personally, by e-mail, or sent by nationally recognized overnight courier
service, addressed to the Corporation, at the address set forth above, or at the address or email address most recently provided to
Holders by the Corporation for purposes of notice hereunder Attention: [●], e-mail address [●], or such other e-mail
address or address as the Corporation may specify for such purposes by notice to the Holders delivered in accordance with this Section
9. Any and all notices or other communications or deliveries to be provided by the Corporation hereunder shall be in writing and
delivered personally, by e-mail, or sent by a nationally recognized overnight courier service addressed to each Holder at the e-mail
address or address of such Holder appearing on the books of the Corporation, or if no such e-mail address or address appears on the
books of the Corporation, at the principal place of business of such Holder, as set forth in the Purchase Agreement. Any notice or
other communication or deliveries hereunder shall be deemed given and effective on the earliest of (i) the time of transmission, if
such notice or communication is delivered via e-mail at the e-mail address set forth in this Section prior to 5:30 p.m. (New York
City time) on any date, (ii) the next Trading Day after the time of transmission, if such notice or communication is delivered via
e-mail at the e-mail address set forth in this Section on a day that is not a Trading Day or later than 5:30 p.m. (New York City
time) on any Trading Day, (iii) the second Trading Day following the date of mailing, if sent by U.S. nationally recognized
overnight courier service, or (iv) upon actual receipt by the party to whom such notice is required to be given.
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(b) Absolute
Obligation. Except as expressly provided herein, no provision of this Certificate of Designation shall alter or impair the obligation
of the Corporation, which is absolute and unconditional, to pay liquidated damages and accrued dividends, as applicable, on the shares
of Preferred Stock at the time, place, and rate, and in the coin or currency, herein prescribed.
(c) Lost
or Mutilated Preferred Stock Certificate. If a Holder’s Preferred Stock certificate shall be mutilated, lost, stolen or destroyed,
the Corporation shall issue or cause to be issued, in exchange and substitution for and upon cancellation of a mutilated certificate,
or in lieu of or in substitution for a lost, stolen or destroyed certificate, a new certificate for the shares of Preferred Stock so mutilated,
lost, stolen or destroyed, but only upon receipt of evidence of such loss, theft or destruction of such certificate, and of the ownership
hereof reasonably satisfactory to the Corporation (which shall not include the posting of any bond). The applicant for a new certificate
under such circumstances shall also pay any reasonable third-party costs (including customary indemnity) associated with the issuance
of such replacement certificate.
(d) Governing
Law. All questions concerning the construction, validity, enforcement and interpretation of this Certificate of Designation
shall be governed by and construed and enforced in accordance with the internal laws of the State of Delaware, without regard to the
principles of conflict of laws thereof. All legal proceedings concerning the interpretation, enforcement and defense of the
transactions contemplated by this Certificate of Designation (whether brought against a party hereto or its respective Affiliates,
directors, officers, shareholders, employees or agents) shall be commenced in the state and federal courts sitting in the City of
Wilmington, Delaware, County of New Castle (the “Delaware Courts”). The Corporation and each Holder hereby
irrevocably submits to the exclusive jurisdiction of the Delaware Courts for the adjudication of any dispute hereunder or in
connection herewith or with any transaction contemplated hereby or discussed herein, and hereby irrevocably waives, and agrees not
to assert in any suit, action or proceeding, any claim that it is not personally subject to the jurisdiction of such Delaware
Courts, or such Delaware Courts are improper or inconvenient venue for such proceeding. The Corporation and each Holder hereby
irrevocably waives personal service of process and consents to process being served in any such suit, action or proceeding by
mailing a copy thereof via registered or certified mail or overnight delivery (with evidence of delivery) to such party at the
address in effect for notices to it under this Certificate of Designation and agrees that such service shall constitute good and
sufficient service of process and notice thereof. Nothing contained herein shall be deemed to limit in any way any right to serve
process in any other manner permitted by applicable law. The Corporation and each Holder hereby irrevocably waives, to the fullest
extent permitted by applicable law, any and all right to trial by jury in any legal proceeding arising out of or relating to this
Certificate of Designation or the transactions contemplated hereby. If the Corporation or any Holder shall commence an action or
proceeding to enforce any provisions of this Certificate of Designation, then the prevailing party in such action or proceeding
shall be reimbursed by the other party for its attorneys’ fees and other costs and expenses incurred in the investigation,
preparation and prosecution of such action or proceeding.
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(e) Amendment.
Subject to Section 4(c), this Certificate of Designation (or any provision hereof) may be amended by obtaining the
affirmative vote at a meeting duly called for such purpose, or written consent without a meeting in accordance with the Delaware
General Corporation Law, of the Required Holders, voting separately as a single class, and with such other stockholder approval, if
any, as may then be required pursuant to the DGCL and the Corporation’s certificate of incorporation; provided, however, and
notwithstanding anything in this Certificate of Designation to the contrary, no provision of this Certificate of Designation shall
be amended to the extent any such amendment would (i) disproportionately, materially and adversely modify any rights of any Holder
(as compared to the rights of the other Holders), (ii) impose any additional financial obligations or liabilities on a Holder or
(iii) amend the provisions of Section 3, Section 6, Section 7, Section 8(b) or this Section 9(e), unless such amendment applies to
all Holders in the same fashion, in each case, unless any such Holder shall have previously consented in writing to such amendment
or voted to approve such amendment at a meeting. No consideration shall be offered or paid to any Holder to amend or consent to a
waiver or modification of any provision of this Certificate of Designation unless the same consideration is also offered to all of
the Holders. For clarification purposes, this provision constitutes a separate right granted to each Holder by the Corporation and
negotiated separately by each Holder, and is intended for the Corporation to treat the Holders as a group and shall not in any way
be construed as the Holders acting in concert or as a group with respect to the purchase, disposition or voting of securities or
otherwise.
(f) Waiver.
Any waiver by the Corporation or a Holder of a breach of any provision of this Certificate of Designation shall not operate as or be construed
to be a waiver of any other breach of such provision or of any breach of any other provision of this Certificate of Designation or a waiver
by any other Holders. The failure of the Corporation or a Holder to insist upon strict adherence to any term of this Certificate of Designation
on one or more occasions shall not be considered a waiver or deprive that party (or any other Holder) of the right thereafter to insist
upon strict adherence to that term or any other term of this Certificate of Designation on any other occasion. Any waiver by the Corporation
or a Holder must be in writing.
(g) Severability.
If any provision of this Certificate of Designation is invalid, illegal or unenforceable, the balance of this Certificate of Designation
shall remain in effect, and if any provision is inapplicable to any Person or circumstance, it shall nevertheless remain applicable to
all other Persons and circumstances. If it shall be found that any interest or other amount deemed interest due hereunder violates the
applicable law governing usury, the applicable rate of interest due hereunder shall automatically be lowered to equal the maximum rate
of interest permitted under applicable law.
29
(h) Next
Business Day. Whenever any payment or other obligation hereunder shall be due on a day other than a Business Day, such payment shall
be made on the next succeeding Business Day.
(i) Headings.
The headings contained herein are for convenience only, do not constitute a part of this Certificate of Designation and shall not be deemed
to limit or affect any of the provisions hereof.
(j) Status
of Converted or Redeemed Preferred Stock. Shares of Preferred Stock may only be issued pursuant to the Purchase Agreement. If any
shares of Preferred Stock shall be converted, redeemed or reacquired by the Corporation, such shares shall resume the status of authorized
but unissued shares of preferred stock and shall no longer be designated as 12.0% Series A Cumulative Convertible Preferred Stock.
(k) Tax
Withholding. The Corporation agrees that, provided that each Holder delivers to the Corporation a properly executed IRS Form W-9
or other certification satisfactory to the Corporation certifying as to such Holder’s status (or the status of such
Holder’s beneficial owner(s)) as a United States person (within the meaning of Section 7701(a)(30) of the Code) and such
Holder’s (or such beneficial owners’) eligibility for complete exemption from backup withholding (“U.S. Person
Certification”), under current law the Corporation (including any paying agent of the Corporation) shall not be required
to, and shall not, withhold on any payments or deemed payments to any such Holder. In the event that any Holder fails to deliver to
the Corporation such properly executed U.S. Person Certification, the Corporation reasonably believes that a previously delivered
U.S. Person Certification is no longer accurate and/or valid, or there is a change in law that affects the withholding obligations
of the Corporation, the Corporation and its paying agent shall be entitled to withhold taxes on all payments made to the relevant
Holder in the form of cash or otherwise treated, in the Corporation’s reasonable discretion, as a dividend for U.S. federal
tax purposes or to request that the relevant Holder promptly pay the Corporation in cash any amounts required to satisfy any
withholding tax obligations, in each case, to the extent the Corporation or its paying agent determines in good faith it is required
to deduct and withhold tax on payments to the relevant Holder under applicable law; provided, that the Corporation shall use
commercially reasonable efforts to notify the relevant Holder of any required withholding tax reasonably in advance of the date of
the relevant payment. In the event that the Corporation does not have sufficient cash with respect to any Holder from withholding on
cash payments otherwise payable to such Holder and cash paid to the Corporation by such Holder to the Corporation pursuant to the
immediately preceding sentence, the Corporation and its paying agent shall be entitled to withhold taxes on deemed payments,
including distributions of additional Preferred Stock in lieu of cash and constructive distributions on the Preferred Stock to the
extent required by law, and the Corporation and its paying agent shall be entitled to satisfy any required withholding tax on
non-cash payments (including deemed payments) through a sale of a portion of the Preferred Stock received as a dividend or from cash
dividends or sales proceeds subsequently paid or credited on the Preferred Stock.
(l) Tax
Treatment. Absent a change in law, Internal Revenue Service practice or a contrary determination (as defined in Section 1313(a)
of the Internal Revenue Code, as amended (the “Code”)), each holder of Preferred Stock and the Corporation shall
not treat the Preferred Stock (based on their terms as set forth in this Certificate of Designation) as “preferred
stock” within the meaning of Section 305 of the Code and Treasury Regulation Section 1.305-5 for United States federal income
tax and withholding tax purposes and shall not take any position inconsistent with such treatment.
*********************
30
IN WITNESS WHEREOF, this Certificate of Designation is executed
on behalf of the Corporation by its Chief Executive Officer this [●]th day of [●], 2026.
[ELROY AIR, INC.]
By:
Name:
[●]
Title:
Chief Executive Officer
ANNEX A
NOTICE OF CONVERSION
(TO BE EXECUTED BY THE REGISTERED HOLDER
IN ORDER TO CONVERT SHARES OF 12.0% SERIES A CUMULATIVE CONVERTIBLE PREFERRED STOCK)
The undersigned hereby elects to convert
the number of shares of 12.0% Series A Cumulative Convertible Preferred Stock, par value $0.0001 per share (the “Preferred Stock”),
indicated below into shares of Common Stock, par value $0.0001 per share (the “Common Stock”), of [Elroy Air, Inc.],
a Delaware corporation (the “Corporation”), according to the conditions hereof, as of the date written below. If shares
of Common Stock are to be issued in the name of a Person other than the undersigned, the undersigned will pay all transfer taxes payable
with respect thereto and is delivering herewith such certificates and opinions as may be required by the Corporation in accordance with
the Purchase Agreement. No fee will be charged to the Holders for any conversion, except for any such transfer taxes.
Conversion calculations:
Date to Effect Conversion: _______________________________________________
Number of shares of Preferred Stock owned prior to Conversion: ___________________
Number of shares of Preferred Stock to be Converted: ___________________________
Accrued Value of shares of Preferred Stock to be Converted: ______________________
Number of shares of Common Stock to be Issued: ______________________________
Applicable Conversion Price:______________________________________________
Number of shares of Preferred Stock subsequent to Conversion:____________________
Address for Delivery:____________________________________________________
or
DWAC Instructions:
Broker no: ___________
Account no: _____________
[HOLDER]
By:
Name:
Title
:
Annex A
EXHIBIT B
FORM OF
AMENDED AND RESTATED
REGISTRATION
RIGHTS AGREEMENT
FORM OF
AMENDED AND RESTATED
REGISTRATION RIGHTS AGREEMENT
THIS AMENDED AND
RESTATED REGISTRATION RIGHTS AGREEMENT (this “Agreement”), dated as of [●], 2026, is made and
entered into by and among Elroy Air, Inc., a Delaware corporation (formerly known as Inflection Point Acquisition Corp. VII, a
Cayman Islands exempted company, prior to the Domestication (as defined herein)) (the “Company”), Columbus
Circle 2 Sponsor Corporation LLC, a Delaware limited liability company (the “Sponsor”), the members of the
Sponsor identified on the signature pages hereto under “Other Sponsor Holders” (such members, together with the Sponsor,
the “Sponsor Holders”), each of the undersigned parties listed on the signature page hereto under
“PIPE Holders” (the “PIPE Holders”), each of the undersigned parties listed on the signature
page hereto under “Elroy Holders” (the “Elroy Holders”) and each of the undersigned parties
listed on the signature page hereto under “Other Holders” (the “Other Holders” and each such
party, together with the Sponsor, the Sponsor Holders, the PIPE Holders, the Elroy Holders and any Person who hereafter becomes a
party to this Agreement pursuant to Section 5.2, a “Holder” and collectively the
“Holders”).
RECITALS
WHEREAS, the
Company and certain Sponsor Holders are party to that certain Registration Rights Agreement, dated as of February 10, 2026 (the “Original
RRA”);
WHEREAS, the
Company is party to that certain Business Combination Agreement, dated as of [●], 2026 (as the same may be amended, restated, amended
and restated, supplemented or otherwise modified from time to time, the “Business Combination Agreement”), by
and among the Company, [Merger Sub], a Delaware corporation (“Merger Sub”) and Elroy Air, Inc., a Delaware corporation
(“Legacy Elroy Air”);
WHEREAS, prior
to the date hereof and subject to the conditions of the Business Combination Agreement, the Company transferred by way of continuation
to and domesticated as a Delaware corporation in accordance with Section 388 of the Delaware General Corporation Law, as amended, and
the Companies Act (as revised) of the Cayman Islands (the “Domestication”);
WHEREAS, prior
to the Domestication, (a) the Sponsor owned, in aggregate, (i) 7,666,667 Class B ordinary shares of the Company, (ii) 265,000 Class A
ordinary shares of the Company, and (iii) 83,333 Cayman private placement warrants of the Company, each exercisable for one Class A ordinary
share of the Company at an exercise price of $11.50 per share and (b) Cohen & Company Capital Markets, a division of Cohen & Company
Securities, LLC and Clear Street LLC collectively own (i) 400,000 Class A ordinary shares of the Company and (ii) 133,333 Cayman private
placement warrants of the Company, each exercisable for one Class A ordinary share of the Company at an exercise price of $11.50 per share;
WHEREAS,
(i) immediately prior to the Domestication, each then issued and outstanding Class B ordinary share of the Company was converted on
a one-for-one basis into a Class A ordinary share of the Company and (ii) in connection with the Domestication, (x) each then issued
and outstanding Class A ordinary share of the Company was converted automatically, on a one-for-one basis, into a share of common
stock of the Company, par value $0.0001 per share (the “Common Stock”); (y) each then issued and
outstanding warrant of the Company converted automatically into a warrant to acquire one (1) share of Common Stock (each, a
“Domesticated Purchaser Warrant”), pursuant to the Warrant Agreement; and (z) each then issued and
outstanding unit of the Company was cancelled and thereafter entitled the holder thereof to one (1) share of Common Stock and
one-third (1/3) of one Domesticated Purchaser Warrant, with any fractional shares of Common Stock to be issued in connection with
such separation rounded down to the nearest whole share;
2
WHEREAS, pursuant
to the Business Combination Agreement, on the date hereof, Merger Sub merged with and into Legacy Elroy Air, with Legacy Elroy Air continuing
as the surviving corporation and as a direct, wholly owned subsidiary of the Company (the “Business Combination”);
WHEREAS, on
the date hereof, in connection with the Closing of the Business Combination, the Company issued [●] shares of Common Stock to the
Elroy Holders;
WHEREAS, pursuant
to the Business Combination Agreement, on the date hereof, the holders of Legacy Elroy Air’s Pre-Funded Convertible Notes received
shares of 12% Series A Cumulative Convertible Preferred Stock, par value $0.0001 per share, of the Company (the “Series A
Preferred Stock”) in exchange for such Pre-Funded Convertible Notes;
WHEREAS, pursuant
to the Business Combination Agreement, on the date hereof, the holders of Legacy Elroy Air’s Company Pre-Funded Investor Warrants
received warrants to purchase Common Stock (the “Series A Investor Warrants”) in exchange for such Legacy Elroy
Air’s Company Pre-Funded Investor Warrants;
WHEREAS, on
the date hereof, the Company issued an additional [●] shares of Series A Preferred Stock and additional Series A Investor Warrants
to purchase an aggregate of [●] shares of Common Stock (subject to adjustment) to certain investors pursuant to that certain Securities
Purchase Agreement, dated as of [●], 2026, by and among the Company and such investors (the “Series A SPA”)
or other securities purchase agreements regarding the Series A Preferred Stock and Series A Investor Warrants;
WHEREAS, pursuant
to Section 5.5 of the Original RRA, the provisions, covenants and conditions set forth therein may be amended or modified upon the written
consent of the Company and the Holders (as defined in the Original RRA) (the “Original Holders”) of at least
a majority in interest of the Registrable Securities (as defined in the Original RRA) (the “Original Registrable Securities”)
at the time in question, and the Sponsor Holders party hereto are Original Holders of at least a majority in interest of the Original
Registrable Securities as of the date hereof; and
WHEREAS, in
connection with the consummation of the transactions described above, the Company and the Original Holders desire to amend and restate
the Original RRA in its entirety as set forth herein, and the Company and the Holders desire to enter into this Agreement, pursuant to
which the Company shall grant the Holders certain registration rights with respect to the Registrable Securities (as defined below) on
the terms and conditions set forth in this Agreement.
NOW, THEREFORE,
in consideration of the representations, covenants and agreements contained herein, and certain other good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, the parties hereto, intending to be legally bound, hereby agree as follows:
3
ARTICLE I
DEFINITIONS
1.1 Definitions.
The terms defined in this Article I shall, for all purposes of this Agreement, have the respective meanings set forth below:
“Additional Holder” shall have
the meaning given in Section 5.11.
“
Additional Holder Common Stock”
shall have the meaning given in Section 5.11.
“Adverse
Disclosure” shall mean any public disclosure of material non-public information, which disclosure, in the good faith judgment
of the Chief Executive Officer or Chief Financial Officer of the Company or the Board, in each case, after consultation with counsel to
the Company, (i) would be required to be made in any Registration Statement or Prospectus in order for the applicable Registration Statement
or Prospectus not to contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or
necessary to make the statements contained therein (in the case of any prospectus and any preliminary prospectus, in the light of the
circumstances under which they were made) not misleading, (ii) would not be required to be made at such time if the Registration Statement
were not being filed, declared effective or used, as the case may be, and (iii) the Company has a bona fide business purpose for
not making such information public.
“Agreement”
shall have the meaning given in the Preamble hereto. “Board” shall mean the board of directors of the Company.
“Business Combination Agreement”
shall have the meaning given in the Recitals hereto.
“Business Day”
means a day other than a Saturday, Sunday or other day on which commercial banks in New York, New York are authorized or required by Law
to close.
“Closing” shall have the meaning
given in the Business Combination Agreement. “Closing Date” shall have the meaning given in the Business Combination
Agreement. “Commission” shall mean the U.S. Securities and Exchange Commission.
“Common Stock” shall have the meaning
given in the Recitals hereto.
“Company” shall
have the meaning given in the Preamble hereto and includes the Company’s successors by recapitalization, merger, consolidation,
spin-off, reorganization or similar transaction.
“Competing Registration Rights”
shall have the meaning given in Section 5.7.
“Demanding Holder” shall have the
meaning given in Section 2.1.4.
“Exchange Act”
shall mean the U.S. Securities Exchange Act of 1934, as it may be amended from time to time.
“Elroy Holders” shall have the
meaning given in the Preamble hereto.
“Elroy Holders Lock-Up Agreement”
means the lock-up agreement, dated [●], entered into by the Company and the Elroy Holders.
“FINRA” shall mean the Financial
Industry Regulatory Authority, Inc.
“Floor Price”
shall mean the lesser of (i) $5.00 and (ii) as applicable, the then-current conversion price for the Series A Preferred Stock or the then-current
exercise price.
“Form S-1 Shelf” shall have the
meaning given in Section 2.1.1.
4
“Form S-3 Shelf” shall have the
meaning given in Section 2.1.1.
“Governmental
Authority” means any federal, state, local, foreign or other governmental, quasi-governmental or administrative body, instrumentality,
department or agency or any court, tribunal, administrative hearing body, arbitration panel, commission, or other similar dispute-resolving
panel or body.
“Holder Information” shall have
the meaning given in Section 4.1.2.
“Holders” shall
have the meaning given in the Preamble hereto, for so long as such Person holds any Registrable Securities.
“Joinder” shall have the meaning
given in Section 5.11.
“Law”
shall mean any federal, state, local, municipal, foreign or other law, statute, legislation, principle of common law, ordinance, code,
edict, decree, proclamation, treaty, convention, rule, regulation, directive, requirement, writ, injunction, settlement, order or consent
that is or has been issued, enacted, adopted, passed, approved, promulgated, made, implemented or otherwise put into effect by or under
the authority of any Governmental Authority.
“Legacy Elroy Air” shall have the
meaning given in the Recitals hereto.
“Legal
Proceeding” means any notice of noncompliance or violation, or any claim, demand, charge, action, suit, litigation, audit,
settlement, complaint, stipulation, assessment or arbitration, or any request (including any request for information), inquiry, hearing,
proceeding or investigation, by or before any Governmental Authority.
“Lock-Up
Agreements” means the Elroy Holders Lock-Up Agreement and the Sponsor Holder Lock-Up Agreement, collectively.
“Lock-Up
Period” shall mean (a) with respect to the Sponsor Holders and their respective Permitted Transferees, the lock-up period
specified with respect to a party in the Sponsor Holder Lock-Up Agreement, (b) with respect to the Elroy Holders and their respective
Permitted Transferees, the lock-up period specified with respect to a party in the Elroy Holders Lock-Up Agreement and (c) with respect
to the Other Holders and their respective Permitted Transferees, [●].
“Maximum Number of Securities”
shall have the meaning given in Section 2.1.5.
“Minimum Takedown Threshold”
shall have the meaning given in Section 2.1.4.
“Misstatement”
shall mean an untrue statement of a material fact or an omission to state a material fact required to be stated in a Registration Statement
or Prospectus, or necessary to make the statements in a Registration Statement or Prospectus (in the case of a Prospectus, in the light
of the circumstances under which they were made) not misleading.
“Original Registrable Securities”
shall have the meaning given in the Recitals hereto. “Original RRA” shall have the meaning given in the Recitals
hereto.
“Other Coordinated Offering”
shall have the meaning given in Section 2.4.1.
5
“Permitted
Transferees” means persons to whom a holder of Registrable Securities is permitted to transfer such Registrable Securities
prior to the expiration of the applicable Lock-Up Period pursuant to the applicable Lock-Up Agreement.
“Person”
means an individual, corporation, partnership (including a general partnership, limited partnership or limited liability partnership),
limited liability company, association, trust or other entity or organization, including a government, domestic or foreign, or political
subdivision thereof, or an agency or instrumentality thereof.
“Piggyback Registration”
shall have the meaning given in Section 2.2.1.
“PIPE
Transferees” means persons to whom a PIPE Holder of Registrable Securities (or its transferee) transfers its Registrable
Securities.
“Prospectus”
shall mean the prospectus included in any Registration Statement, as supplemented by any and all prospectus supplements and as amended
by any and all post-effective amendments and including all material incorporated by reference in such prospectus.
“Registrable
Security” shall mean (i) any outstanding shares of Common Stock held by a Holder immediately following the Closing, (ii)
any shares of Common Stock that may be acquired by Holders upon the exercise, conversion or redemption of any other security of the Company
or other right to acquire Common Stock held by or issuable to a Holder immediately following the Closing, (iii) any outstanding shares
of Common Stock or any other equity security of the Company held by a Holder following the date hereof to the extent that such securities
are “restricted securities” (as defined in Rule 144) or are otherwise held by an “affiliate” (as defined in Rule
144) of the Company and (iv) any other equity security of the Company issued or issuable with respect to any securities referenced in
clause (i), (ii) or (iii) above by way of a stock dividend or stock split or in connection with a combination of
shares, recapitalization, merger, consolidation, spin-off, reorganization or similar transaction; provided, however, that, as to
any particular Registrable Security, such securities shall cease to be Registrable Securities upon the earliest to occur of the following
events: (i) a Registration Statement with respect to the sale of such securities shall have become effective under the Securities Act
and such securities shall have been sold, transferred, disposed of or exchanged in accordance with such Registration Statement by the
applicable Holder to a Person that is not an “affiliate” (as defined in Rule 144) of the Company and new certificates for
such securities not bearing (or book-entry positions not subject to) a legend restricting further transfer shall have been delivered by
the Company and subsequent public distribution of such securities shall not require registration under the Securities Act; (ii) such securities
shall have been otherwise transferred, new certificates for such securities not bearing (or book-entry positions not subject to) a legend
restricting further transfer shall have been delivered by the Company and subsequent public distribution of such securities shall not
require registration under the Securities Act; (iii) such securities shall have ceased to be outstanding; (iv) such securities may be
sold by a Holder without registration pursuant to Rule 144 (but with no volume or other restrictions or limitations including as to manner
or timing of sale or current public information requirements applicable to such Holder); and (v) such securities have been sold to, or
through, a broker, dealer or underwriter in a public distribution or other public securities transaction.
“Registration”
shall mean a registration, including any related Shelf Takedown, effected by preparing and filing a Registration Statement, Prospectus
or similar document in compliance with the requirements of the Securities Act, and the applicable rules and regulations promulgated thereunder,
and such registration statement becoming effective.
6
“Registration
Expenses” shall mean the documented, out-of-pocket expenses of a Registration, including, without limitation, the following:
(A) all
registration, listing and filing fees (including fees with respect to filings required to be made with FINRA) and any national securities
exchange on which the Common Stock is then listed;
(B) fees
and expenses of compliance with securities or blue sky laws (including reasonable fees and disbursements of counsel for the Underwriters
in connection with blue sky qualifications of Registrable Securities);
(C) printing, messenger, telephone and delivery expenses;
(D) reasonable fees and disbursements of counsel for the Company;
(E) reasonable
fees and disbursements of all independent registered public accountants of the Company incurred specifically in connection with such Registration;
and
(F) reasonable
fees and expenses of one (1) legal counsel selected by the majority in interest of the Demanding Holders in an Underwritten Offering or
Other Coordinated Offering.
“Registration
Statement” shall mean any registration statement that covers Registrable Securities pursuant to the provisions of this Agreement,
including any Shelf, and, in each case, including the Prospectus included in such registration statement, amendments (including post-effective
amendments) and supplements to such registration statement and all exhibits to, and all material incorporated by reference in, such registration
statement.
“Requesting Holders” shall have
the meaning given in Section 2.1.5.
“Rule 144” shall
mean Rule 144 promulgated under the Securities Act, as amended from time to time, or any similar successor rule thereto that may be promulgated
by the Commission.
“Securities Act” shall mean the
U.S. Securities Act of 1933, as amended from time to time. “Series A Investor Warrants” shall have the meaning
given in the Recitals hereto.
“Series A Preferred Stock” shall
have the meaning given in the Recitals hereto.
“Shelf” shall
mean the Form S-1 Shelf, the Form S-3 Shelf, or any Subsequent Shelf Registration, as the case may be.
“Shelf
Registration” shall mean a registration of securities pursuant to a registration statement filed with the Commission in
accordance with and pursuant to Rule 415 promulgated under the Securities Act, as amended from time to time, or any similar successor
rule thereto that may be promulgated by the Commission.
“Shelf Takedown”
shall mean an Underwritten Shelf Takedown or any proposed transfer or sale using a Registration Statement, including a Piggyback Registration.
7
“Sponsor”
shall have the meaning given in the Preamble hereto. “Sponsor Holders” shall have the meaning given in the Preamble
hereto.
“Sponsor Holders Lock-Up Agreement”
means the lock-up agreement, dated [●], entered into by the Company and the Sponsor Holders.
“Sponsor Majority Holders”
shall mean the Sponsor Holders holding in the aggregate a majority of the Registrable Securities then held by the Sponsor Holders.
“Subsequent Shelf Registration”
shall have the meaning given in Section 2.1.2.
“Transfer”
shall mean the (i) sale or assignment of, offer to sell, contract or agreement to sell, hypothecation, pledge, grant of any option to
purchase or otherwise dispose of or agreement to dispose of, directly or indirectly, or establishment or increase of a put equivalent
position or liquidation with respect to or decrease of a call equivalent position within the meaning of Section 16 of the Exchange Act
with respect to, any security, (ii) entry into any swap or other arrangement that transfers to another, in whole or in part, any of the
economic consequences of ownership of any security, whether any such transaction is to be settled by delivery of such securities, in cash
or otherwise, or (iii) public announcement of any intention to effect any transaction specified in clause (i) or (ii).
“Underwriter”
shall mean a securities dealer who purchases any Registrable Securities as principal in an Underwritten Offering and not as part of such
dealer’s market-making activities.
“Underwritten Lock-Up Period”
shall have the meaning given in Section 2.3.
“Underwritten
Registration” or “Underwritten Offering” shall mean a Registration in which securities of the
Company are sold to an Underwriter in a firm commitment underwriting for distribution to the public.
“Underwritten Shelf Takedown”
shall have the meaning given in Section 2.1.4.
“Warrant Agreement”
means the Warrant Agreement, dated as of February 10, 2026, between the Company and Continental Stock Transfer & Trust Company.
“Withdrawal Notice” shall have
the meaning given in Section 2.1.6.
“Yearly Limit” shall have the meaning
given in Section 2.1.4.
8
ARTICLE II
REGISTRATIONS AND OFFERINGS
2.1 Shelf Registration.
2.1.1 Filing.
The Company shall, subject to Section 3.4, submit or file within 30 days of the Closing Date a Registration Statement for a
Shelf Registration on Form S-1 (the “Form S-1 Shelf”) or, if the Company is eligible to use a Registration
Statement on Form S-3, a Shelf Registration on Form S-3 (the “Form S-3 Shelf”), in each case, covering the
resale of all Registrable Securities (determined as of two (2) business days prior to such submission or filing and assuming that
(i) all shares of Series A Preferred Stock are converted into shares of Common Stock at a conversion price equal to the Floor Price
and taking into account payment-in-kind dividends for at least three years from the date of such submission or filing and (ii) all
Series A Investor Warrants are exercised in full at an exercise price equal to the Floor Price) on a delayed or continuous basis in
each case, without giving effect to any limitations on conversion or exercise, and shall use its commercially reasonable efforts to
have such Shelf declared effective as soon as reasonably practicable after the filing thereof, but no later than the earlier of (a)
the 90th calendar day following the filing date thereof if the Commission notifies the Company that it will “review” the
Registration Statement and (b) the tenth (10th) business day after the date the Company is notified (orally or in
writing, whichever is earlier) by the Commission that the Registration Statement will not be “reviewed” or will not be
subject to further review. Such Shelf shall provide for the resale of the Registrable Securities included therein pursuant to any
method or combination of methods legally available to, and requested by, any Holder named therein. Subject to Sections 2.1.3
and 3.4, the Company shall maintain a Shelf in accordance with the terms hereof, and shall prepare and file with the
Commission such amendments, including post-effective amendments, and supplements as may be necessary to keep a Shelf continuously
effective, available for use to permit the Holders named therein to sell their Registrable Securities included therein and in
compliance with the provisions of the Securities Act until such time as there are no longer any Registrable Securities. In the event
the Company files a Form S-1 Shelf, the Company shall use its commercially reasonable efforts to convert the Form S-1 Shelf (and any
Subsequent Shelf Registration) to a Form S-3 Shelf as soon as reasonably practicable after the Company is eligible to use Form
S-3.
2.1.2 Subsequent
Shelf Registration. If any Shelf ceases to be effective under the Securities Act for any reason at any time while Registrable
Securities are still outstanding, the Company shall, subject to Section 3.4, use its commercially reasonable efforts to, as
promptly as is reasonably practicable, cause such Shelf to again become effective under the Securities Act (including using its
commercially reasonable efforts to obtain the prompt withdrawal of any order suspending the effectiveness of such Shelf), and shall
use its commercially reasonable efforts to, as promptly as is reasonably practicable, amend such Shelf in a manner reasonably
expected to result in the withdrawal of any order suspending the effectiveness of such Shelf or file an additional registration
statement as a Shelf Registration (a “Subsequent Shelf Registration”) registering the resale of all
Registrable Securities under such Shelf (determined as of two (2) business days prior to such filing and assuming that (i) all
shares of Series A Preferred Stock are converted into shares of Common Stock at a conversion price equal to the Floor Price and
taking into account payment-in-kind dividends for at least three years from the date of such submission or filing and (ii) all
Series A Investor Warrants are exercised in full at an exercise price equal to the Floor Price), and pursuant to any method or
combination of methods legally available to, and requested by, any Holder named therein. If a Subsequent Shelf Registration is
filed, the Company shall use its commercially reasonable efforts to (i) cause such Subsequent Shelf Registration to become effective
under the Securities Act as promptly as is reasonably practicable after the filing thereof (it being agreed that the Subsequent
Shelf Registration shall be an automatic shelf registration statement (as defined in Rule 405 promulgated under the Securities Act)
if the Company is a well-known seasoned issuer (as defined in Rule 405 promulgated under the Securities Act) at the most recent
applicable eligibility determination date) and (ii) keep such Subsequent Shelf Registration continuously effective, available for
use to permit the Holders named therein to sell their Registrable Securities included therein and in compliance with the provisions
of the Securities Act until such time as there are no longer any Registrable Securities. Any such Subsequent Shelf Registration
shall be on Form S-3 to the extent that the Company is eligible to use such form. Otherwise, such Subsequent Shelf Registration
shall be on another appropriate form.
2.1.3 New
Registrable Securities. Subject to Section 3.4, in the event that any Holder holds Registrable Securities that are not
registered for resale on a delayed or continuous basis, the Company shall, upon the written request of such Holder, promptly use its
commercially reasonable efforts to cause the resale of such Registrable Securities to be covered by either, at the Company’s
option, any then-available Shelf (including by means of a post-effective amendment) or a Subsequent Shelf Registration and cause the
same to become effective as soon as practicable after such filing and such Shelf or Subsequent Shelf Registration shall be subject
to the terms hereof; provided, however, that the Company shall only be required to cause such Registrable Securities to be so
covered twice per calendar year for each of (i) the Sponsor Holders, collectively, (ii) the Elroy Holders, collectively, (iii) the
PIPE Holders, collectively, and (iv) the Other Holders, collectively.
9
2.1.4 Requests
for Underwritten Shelf Takedowns. Subject to Section 3.4, at any time and from time to time when an effective Shelf is on
file with the Commission, any Holder (a “Demanding Holder”) may request to sell all or any portion of its
Registrable Securities in an Underwritten Offering or other coordinated offering that is registered pursuant to the Shelf (each, an
“Underwritten Shelf Takedown”); provided that the Company shall only be obligated to effect an
Underwritten Shelf Takedown if such offering shall include Registrable Securities proposed to be sold by the Demanding Holder,
either individually or together with other Demanding Holders, with a total offering price reasonably expected to exceed, in the
aggregate, $25 million (the “Minimum Takedown Threshold”). All requests for Underwritten Shelf Takedowns
shall be made by giving written notice to the Company, which shall specify the approximate number of Registrable Securities proposed
to be sold in the Underwritten Shelf Takedown. Subject to Section 2.4.4, the Company shall have the right to select the
Underwriters for such offering (which shall consist of one or more reputable nationally recognized investment banks), subject to the
initial Demanding Holder’s prior approval (which approval shall not be unreasonably withheld, conditioned or delayed). Subject
to Section 2.4.6, each of (i) the Sponsor Holders, collectively, (ii) the Elroy Holders, collectively, (iii) the PIPE
Holders, and (iv) the Other Holders, collectively, may demand Underwritten Shelf Takedowns pursuant to this Section 2.1.4 (x)
not more than two (2) times in any 12-month period (the “Yearly Limit”). Notwithstanding anything to the
contrary in this Agreement, the Company may effect any Underwritten Offering pursuant to any then-effective Registration Statement,
including a Form S-3, that is then available for such offering.
2.1.5 Reduction
of Underwritten Offering. If the managing Underwriter or Underwriters in an Underwritten Shelf Takedown, in good faith, advises the
Company, the Demanding Holders and the Holders requesting piggy back rights pursuant to this Agreement with respect to such Underwritten
Shelf Takedown (the “Requesting Holders”) (if any) in writing that the dollar amount or number of Registrable
Securities that the Demanding Holders and the Requesting Holders (if any) desire to sell, taken together with all other shares of Common
Stock or other equity securities that the Company desires to sell and all other shares of Common Stock or other equity securities, if
any, that have been requested to be sold in such Underwritten Offering pursuant to separate written contractual piggy-back registration
rights held by any other stockholders who desire to sell, exceeds the maximum dollar amount or maximum number of equity securities that
can be sold in the Underwritten Offering without adversely affecting the proposed offering price, the timing, the distribution method
or the probability of success of such offering (such maximum dollar amount or maximum number of such securities, as applicable, the “Maximum
Number of Securities”), then the Company shall include in such Underwritten Offering, before including any shares of Common
Stock or other equity securities proposed to be sold by Company or by other holders of Common Stock or other equity securities, the Registrable
Securities of the Demanding Holders and the Requesting Holders (if any) (pro rata, as nearly as practicable, based on the respective
number of Registrable Securities that each Demanding Holder and Requesting Holder (if any) has requested be included in such Underwritten
Shelf Takedown and the aggregate number of Registrable Securities that the Demanding Holders and Requesting Holders (if any) have requested
be included in such Underwritten Shelf Takedown) that can be sold without exceeding the Maximum Number of Securities. To facilitate the
allocation of Registrable Securities in accordance with the above provisions, the Company or the Underwriters may round the number of
shares allocated to any Holder to the nearest 10 Registrable Securities.
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2.1.6 Underwritten
Shelf Takedown Withdrawal. Prior to the filing of the applicable “red herring” prospectus or prospectus supplement used
for marketing such Underwritten Shelf Takedown, a majority in interest of the Demanding Holders initiating an Underwritten Shelf Takedown
shall have the right to withdraw from such Underwritten Shelf Takedown for any or no reason whatsoever upon written notification (a “Withdrawal
Notice”) to the Company and the Underwriter or Underwriters (if any) of their intention to withdraw from such Underwritten
Shelf Takedown; provided that any other Demanding Holder(s) may elect to have the Company continue an Underwritten Shelf Takedown
if the Minimum Takedown Threshold would still be satisfied by the Registrable Securities proposed to be sold in the Underwritten Shelf
Takedown by the Demanding Holder(s). If withdrawn, a demand for an Underwritten Shelf Takedown shall constitute a demand for an Underwritten
Shelf Takedown by the withdrawing Demanding Holder for purposes of Section 2.1.4 and shall count toward the Yearly Limit, unless
either (i) the Demanding Holder(s) making the withdrawal has not previously withdrawn any Underwritten Shelf Takedown or (ii) the Demanding
Holder(s) making the withdrawal reimburses the Company for all Registration Expenses with respect to such Underwritten Shelf Takedown
(or, if there is more than one Demanding Holder, a pro rata portion of such Registration Expenses based on the respective number
of Registrable Securities that each Demanding Holder has requested be included in such Underwritten Shelf Takedown); provided
that, if any other Demanding Holder(s) elects to continue an Underwritten Shelf Takedown pursuant to the proviso in the immediately preceding
sentence, such Underwritten Shelf Takedown shall instead count as an Underwritten Shelf Takedown demanded by such Demanding Holder(s)
for purposes of Section 2.1.4 and shall count toward the Yearly Limit. Following the receipt of any Withdrawal Notice, the Company
shall promptly forward such Withdrawal Notice to any other Requesting Holders. Notwithstanding anything to the contrary in this Agreement,
the Company shall be responsible for the Registration Expenses incurred in connection with a Shelf Takedown prior to its withdrawal under
this Section 2.1.6, other than if a Demanding Holder elects to pay such Registration Expenses pursuant to clause (ii) of
the second sentence of this Section 2.1.6.
2.2 Piggyback Registration.
2.2.1 Piggyback
Rights. If the Company or any Holder proposes to conduct a registered offering of, or if the Company proposes to file a
Registration Statement under the Securities Act with respect to the Registration of, equity securities, or securities or other
obligations exercisable or exchangeable for, or convertible into equity securities, for its own account or for the account of
securityholders of the Company (or by the Company and by the securityholders of the Company including, without limitation, an
Underwritten Shelf Takedown pursuant to Section 2.1), other than a Registration Statement (or any registered offering with
respect thereto) (i) filed in connection with any employee stock option or other benefit plan, (ii) for an exchange offer or
offering of securities solely to the Company’s existing stockholders, (iii) pursuant to a Registration Statement on Form S-4
(or similar form that relates to a transaction subject to Rule 145 under the Securities Act or any successor rule thereto), (iv) for
an offering of debt that is convertible into equity securities of the Company, (v) for a dividend reinvestment plan, or (vi) a Block
Trade or an Other Coordinated Offering (which shall be subject to Section 2.4), then the Company shall give written notice of
such proposed offering to all of the Holders of Registrable Securities as soon as practicable but not less than ten days before the
anticipated filing date of such Registration Statement or, in the case of an Underwritten Offering pursuant to a Shelf Registration,
the applicable “red herring” prospectus or prospectus supplement used for marketing such offering, which notice shall
(A) describe the amount and type of securities to be included in such offering, the intended method(s) of distribution, and the name
of the proposed managing Underwriter or Underwriters, if any, in such offering, and (B) offer to all of the Holders of Registrable
Securities the opportunity to include in such registered offering such number of Registrable Securities as such Holders may request
in writing within five (5) business days after receipt of such written notice (such Registration, a “Piggyback
Registration”). Subject to Section 2.2.2, the Company shall, in good faith, cause such Registrable Securities
to be included in such Piggyback Registration and, if applicable, shall use its commercially reasonable efforts to cause the
managing Underwriter or Underwriters of such Piggyback Registration to permit the Registrable Securities requested by the Holders
pursuant to this Section 2.2.1 to be included therein on the same terms and conditions as any similar securities of the
Company included in such registered offering and to permit the sale or other disposition of such Registrable Securities in
accordance with the intended method(s) of distribution thereof. The inclusion of any Holder’s Registrable Securities in a
Piggyback Registration shall be subject to such Holder’s agreement to enter into an underwriting agreement in customary form
with the Underwriter(s) selected for such Underwritten Offering by the Company.
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2.2.2 Reduction
of Piggyback Registration. If the managing Underwriter or Underwriters in an Underwritten Offering that is to be a Piggyback Registration,
in good faith, advises the Company and the Holders of Registrable Securities participating in the Piggyback Registration in writing that
the dollar amount or number of shares of Common Stock or other equity securities that the Company or the Demanding Holders desire to sell,
taken together with (i) the shares of Common Stock or other equity securities, if any, as to which Registration or a registered offering
has been demanded pursuant to separate written contractual arrangements with Persons other than the Holders of Registrable Securities
hereunder,
(ii) the Registrable Securities as to
which Registration has been requested pursuant to this Section 2.2 and
(iii) the shares of Common Stock or other
equity securities, if any, as to which Registration or a registered offering has been requested pursuant to separate written contractual
piggy-back registration rights of Persons other than the Holders of Registrable Securities hereunder, exceeds the Maximum Number of Securities,
then:
(a) if
the Registration or registered offering is undertaken for the Company’s account, the Company shall include in any such Registration
or registered offering (A) first, the shares of Common Stock or other equity securities that the Company desires to sell, which can be
sold without exceeding the Maximum Number of Securities; (B) second, to the extent that the Maximum Number of Securities has not been
reached under the foregoing clause (A), the Registrable Securities of Holders exercising their rights to register their Registrable
Securities pursuant to Section 2.2.1, pro rata, as nearly as practicable, based on the respective number of Registrable
Securities that each Holder has requested be included in such Underwritten Offering and the aggregate number of Registrable Securities
that the Holders have requested to be included in such Underwritten Offering, which can be sold without exceeding the Maximum Number of
Securities; and (C) third, to the extent that the Maximum Number of Securities has not been reached under the foregoing clauses (A)
and (B), the shares of Common Stock or other equity securities, if any, as to which Registration or a registered offering has been
requested pursuant to separate written contractual piggy-back registration rights of Persons other than the Holders of Registrable Securities
hereunder, which can be sold without exceeding the Maximum Number of Securities;
(b) if
the Registration or registered offering is pursuant to a request by Persons other than the Holders of Registrable Securities, then
the Company shall include in any such Registration or registered offering (A) first, the shares of Common Stock or other equity
securities, if any, of such requesting Persons, other than the Holders of Registrable Securities, which can be sold without
exceeding the Maximum Number of Securities; (B) second, to the extent that the Maximum Number of Securities has not been reached
under the foregoing clause (A), the Registrable Securities of Holders exercising their rights to register their Registrable
Securities pursuant to Section 2.2.1, pro rata, as nearly as practicable, based on the respective number of
Registrable Securities that each Holder has requested be included in such Underwritten Offering and the aggregate number of
Registrable Securities that the Holders have requested to be included in such Underwritten Offering, which can be sold without
exceeding the Maximum Number of Securities; (C) third, to the extent that the Maximum Number of Securities has not been reached
under the foregoing clauses (A) and (B), the shares of Common Stock or other equity securities that the Company
desires to sell, which can be sold without exceeding the Maximum Number of Securities; and (D) fourth, to the extent that the
Maximum Number of Securities has not been reached under the foregoing clauses (A), (B) and (C), the shares of
Common Stock or other equity securities, if any, as to which Registration or a registered offering has been requested pursuant to
separate written contractual piggy-back registration rights of such Persons other than the Holders of Registrable Securities
hereunder, which can be sold without exceeding the Maximum Number of Securities; and
(c) if
the Registration or registered offering is pursuant to a request by Holder(s) of Registrable Securities pursuant to Section 2.1,
then the Company shall include in any such Registration or registered offering securities in the priority set forth in Section 2.1.5.
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2.2.3 Piggyback
Registration Withdrawal. Any Holder of Registrable Securities (other than a Demanding Holder, whose right to withdraw from an Underwritten
Shelf Takedown, and related obligations, shall be governed by Section 2.1.6) shall have the right to withdraw from a Piggyback
Registration for any or no reason whatsoever upon written notification to the Company and the Underwriter or Underwriters (if any) of
his, her or its intention to withdraw from such Piggyback Registration prior to the effectiveness of the Registration Statement filed
with the Commission with respect to such Piggyback Registration or, in the case of a Piggyback Registration pursuant to a Shelf Registration,
the filing of the applicable “red herring” prospectus or prospectus supplement with respect to such Piggyback Registration
used for marketing such transaction. The Company (whether on its own good faith determination or as the result of a request for withdrawal
by Persons pursuant to separate written contractual obligations) may withdraw a Registration Statement filed with the Commission in connection
with a Piggyback Registration at any time prior to the effectiveness of such Registration Statement. Notwithstanding anything to the contrary
in this Agreement (other than Section 2.1.6), the Company shall be responsible for the Registration Expenses incurred in connection
with the Piggyback Registration prior to its withdrawal under this Section 2.2.3.
2.2.4 Unlimited
Piggyback Registration Rights. For purposes of clarity, subject to Section 2.1.6, any Piggyback Registration effected pursuant
to Section 2.2 shall not be counted as a demand for an Underwritten Shelf Takedown under Section 2.1.4 and shall not count
toward the Yearly Limit.
2.3 Market
Stand-off. In connection with any Underwritten Offering of equity securities of the Company (other than a Block Trade or Other Coordinated
Offering), if requested by the managing Underwriter, each Holder that is an executive officer or director of the Company or a Holder in
excess of 5.0% of the then-outstanding Common Stock agrees that it shall not Transfer any shares of Common Stock or other equity securities
of the Company (other than those included in such offering pursuant to this Agreement), without the prior written consent of the Company,
during the 90-day period (or such shorter time agreed to by the managing Underwriters) beginning on the date of pricing of such offering
(the “Underwritten Lock-Up Period”), except (i) to Permitted Transferees, or, by a PIPE Holder, to PIPE Transferees
(ii) as expressly permitted by such lock-up agreement or (iii) in the event the Underwriters managing the offering otherwise consent in
writing. Each Holder agrees to execute a customary lock-up agreement in favor of the Underwriters to such effect (in each case on substantially
the same terms and conditions as all other Holders). The Company will not be obligated to undertake an Underwritten Shelf Takedown during
any Underwritten Lock-Up Period binding on the Holders, nor will the Company be obligated to include in any Piggyback Registration any
Registrable Securities that are then subject to a “lock-up” agreement.
2.4 Block Trades; Other Coordinated Offerings.
2.4.1 Notwithstanding
any other provision of this Article II, but subject to Section 3.4, at any time and from time to time when an
effective Shelf is on file with the Commission, if a Demanding Holder wishes to engage in (a) an underwritten registered offering
not involving a “roadshow,” an offer commonly known as a “block trade” (a “Block
Trade”) or (b) an “at the market” or similar registered offering through a broker, sales agent or
distribution agent, whether as agent or principal, (an “Other Coordinated Offering”), in each case, either
(x) with an anticipated aggregate offering price reasonably expected to be at least $25 million or (y) with respect to all remaining
Registrable Securities held by the Demanding Holder, then such Demanding Holder only needs to notify the Company of the Block Trade
or Other Coordinated Offering at least five (5) Business Days prior to the day such offering is to commence and the Company shall as
expeditiously as possible use its commercially reasonable efforts to facilitate such Block Trade or Other Coordinated Offering; provided that
the Demanding Holders representing a majority of the Registrable Securities wishing to engage in the Block Trade or Other
Coordinated Offering shall use commercially reasonable efforts to work with the Company and any Underwriters, brokers, sales agents
or placement agents prior to making such request in order to facilitate preparation of the registration statement, prospectus and
other offering documentation related to the Block Trade or Other Coordinated Offering.
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2.4.2 Prior
to the filing of the applicable “red herring” prospectus or prospectus supplement used in connection with a Block Trade or
Other Coordinated Offering, a majority-in-interest of the Demanding Holders initiating such Block Trade or Other Coordinated Offering
shall have the right to submit a Withdrawal Notice to the Company, the Underwriter or Underwriters (if any) and any brokers, sale agents
or placement agents (if any) of their intention to withdraw from such Block Trade or Other Coordinated Offering. Notwithstanding anything
to the contrary in this Agreement, the Company shall be responsible for the Registration Expenses incurred in connection with a Block
Trade or Other Coordinated Offering prior to its withdrawal under this Section 2.4.2.
2.4.3 Notwithstanding
anything to the contrary in this Agreement, Section 2.2 shall not apply to a Block Trade or Other Coordinated Offering initiated
by a Demanding Holder pursuant to this Agreement.
2.4.4 The
Demanding Holder in a Block Trade or Other Coordinated Offering shall have the right to select the Underwriters and any brokers, sale
agents or placement agents (if any) for such Block Trade or Other Coordinated Offering (in each case, which shall consist of one or more
reputable nationally recognized investment banks).
2.4.5 Subject
to Section 2.4.6, each of (i) the Sponsor Holders, as a group, (ii) the Elroy Holders, as a group, (iii) the PIPE Holders, as a
group, and (iv) the Other Holders, as a group, may demand no more than two (2) Block Trades or Other Coordinated Offerings pursuant to
this Section 2.4 in any twelve (12) month period. For the avoidance of doubt, any Block Trade or Other Coordinated Offering effected
pursuant to this Section 2.4 shall not be counted as a demand for an Underwritten Shelf Takedown pursuant to Section 2.1.4.
2.4.6 Notwithstanding
anything to the contrary in this Agreement, with respect to (i) the Sponsor Holders, as a group, (ii) the Elroy Holders, as a group,
or (iii) the Other Holders, as a group, in no event may the number of Block Trades or Other Coordinated Offerings demanded pursuant
to this Section 2.4 plus the number of Underwritten Shelf Takedowns demanded pursuant to Section 2.1.4 exceed a total
of three (3) demands for such group in any twelve (12) month period.
2.5 Legends.
In connection with any sale or other disposition of the Registrable Securities by a Holder pursuant to Rule 144 promulgated under
the Securities Act (or any successor rule promulgated thereafter by the Commission) and upon compliance by the Holder with the
requirements of this Section 2.5, if requested by the Holder, the Company shall cause the transfer agent for the Registrable
Securities (the “Transfer Agent”) to remove any restrictive legends related to the book entry account
holding such Registrable Securities and make a new, unlegended entry for such book entry shares sold or disposed of without
restrictive legends within one (1) trading day of any such request therefor from the Holder; provided that the Company and the
Transfer Agent have timely received from the Holder customary representations and other documentation reasonably acceptable to the
Company and the Transfer Agent in connection therewith. Subject to receipt from the Holder by the Company and the Transfer Agent of
customary representations and other documentation reasonably acceptable to the Company and the Transfer Agent in connection
therewith, the Holder may request that the Company remove any legend from the book entry position evidencing its Registrable
Securities and the Company will, if required by the Transfer Agent, use its commercially reasonable efforts to cause an opinion of
the Company’s counsel be provided, in a form reasonably acceptable to the Transfer Agent, to the effect that the removal of
such restrictive legends in such circumstances may be effected under the Securities Act, following the earliest of such time as such
Registrable Securities (i) are subject to or have been or are about to be sold pursuant to an effective registration statement or
(ii) have been or are about to be sold pursuant to Rule 144 promulgated under the Securities Act (or any successor rule promulgated
thereafter by the Commission). If restrictive legends are no longer required for such Registrable Securities pursuant to the
foregoing, the Company shall, in accordance with the provisions of this section and within one (1) trading day of any request
therefor from the Holder accompanied by such customary and reasonably acceptable representations and other documentation referred to
above establishing that restrictive legends are no longer required, deliver to the Transfer Agent irrevocable instructions that the
Transfer Agent shall make a new, unlegended entry for such book entry shares. The Company shall be responsible for the fees of its
Transfer Agent, its legal counsel and all DTC fees associated with such issuance.
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ARTICLE III
COMPANY PROCEDURES
3.1 General
Procedures. In connection with any Shelf and/or Shelf Takedown, the Company shall use its commercially reasonable efforts to effect
such Registration to permit the sale of such Registrable Securities in accordance with the intended plan of distribution thereof (and
including all manners of distribution in such Registration Statement as Holders may reasonably request in connection with the filing of
such Registration Statement and as permitted by law, including distribution of Registrable Securities to a Holder’s members, securityholders
or partners), and pursuant thereto the Company shall, as expeditiously as possible:
3.1.1 prepare
and file with the Commission, as soon as reasonably practicable, a Registration Statement with respect to such Registrable Securities
and use its commercially reasonable efforts to cause such Registration Statement to become effective and remain effective until all Registrable
Securities have ceased to be Registrable Securities;
3.1.2 prepare
and file with the Commission such amendments and post-effective amendments to the Registration Statement, and such supplements to the
Prospectus, as may be reasonably requested by any Holder that holds at least five percent (5%) of the Registrable Securities registered
on such Registration Statement or any Underwriter of Registrable Securities or as may be required by the rules, regulations or instructions
applicable to the registration form used by the Company or by the Securities Act or rules and regulations thereunder to keep the Registration
Statement effective until all Registrable Securities covered by such Registration Statement are sold in accordance with the intended plan
of distribution set forth in such Registration Statement or supplement to the Prospectus;
3.1.3 prior
to filing a Registration Statement or Prospectus, or any amendment or supplement thereto, furnish without charge to the Underwriters,
if any, and the Holders of Registrable Securities included in such Registration, and such Holders’ legal counsel, copies of such
Registration Statement as proposed to be filed, each amendment and supplement to such Registration Statement (in each case including all
exhibits thereto and documents incorporated by reference therein), the Prospectus included in such Registration Statement (including each
preliminary Prospectus) and such other documents as the Underwriters and the Holders of Registrable Securities included in such Registration
or the legal counsel for any such Holders may request in order to facilitate the disposition of the Registrable Securities owned by such
Holders;
15
3.1.4 prior
to any public offering of Registrable Securities, use its commercially reasonable efforts to (i) register or qualify the Registrable Securities
covered by the Registration Statement under such securities or “blue sky” laws of such jurisdictions in the United States
as the Holders of Registrable Securities included in such Registration Statement (in light of their intended plan of distribution) may
request (or provide evidence satisfactory to such Holders that the Registrable Securities are exempt from such registration or qualification)
and (ii) take such action necessary to cause such Registrable Securities covered by the Registration Statement to be registered with or
approved by such other governmental authorities as may be necessary by virtue of the business and operations of the Company and do any
and all other acts and things that may be necessary or advisable to enable the Holders of Registrable Securities included in such Registration
Statement to consummate the disposition of such Registrable Securities in such jurisdictions; provided, however, that the Company
shall not be required to qualify generally to do business in any jurisdiction where it would not otherwise be required to qualify or take
any action to which it would be subject to general service of process or taxation in any such jurisdiction where it is not then otherwise
so subject;
3.1.5 cause
all such Registrable Securities to be listed on each national securities exchange or automated quotation system on which similar securities
issued by the Company are then listed;
3.1.6 provide
a transfer agent or warrant agent, as applicable, and registrar for all such Registrable Securities no later than the effective date of
such Registration Statement;
3.1.7 advise
each seller of such Registrable Securities, promptly after it shall receive notice or obtain knowledge thereof, of the issuance of any
stop order by the Commission suspending the effectiveness of such Registration Statement or the initiation or threatening of any proceeding
for such purpose, and promptly use its commercially reasonable efforts to prevent the issuance of any stop order or to obtain its withdrawal
if such stop order should be issued;
3.1.8 prior
to the filing of any Registration Statement or Prospectus or any amendment or supplement to such Registration Statement or Prospectus
(or such shorter period of time as (a) may be necessary in order to comply with the Securities Act, the Exchange Act and the rules and
regulations promulgated under the Securities Act or Exchange Act, as applicable or (b) advisable in order to reduce the number of days
that sales are suspended pursuant to Section 3.4), furnish a copy thereof to each seller of such Registrable Securities and its
counsel (excluding any exhibits thereto and any filing made under the Exchange Act that is to be incorporated by reference therein);
3.1.9 notify
the Holders at any time when a Prospectus relating to such Registration Statement is required to be delivered under the Securities Act,
of the happening of any event as a result of which the Prospectus included in such Registration Statement, as then in effect, includes
a Misstatement, and then to correct such Misstatement as set forth in Section 3.4;
3.1.10 in
the event of an Underwritten Offering, a Block Trade, an Other Coordinated Offering, or sale by a broker, placement agent or sales
agent that is registered pursuant to a Registration Statement, permit a representative of the Holders (such representative to be
selected by a majority of the participating Holders), the Underwriters or other financial institutions facilitating such
Underwritten Offering, Block Trade, Other Coordinated Offering or other sale pursuant to such Registration, if any, and any
attorney, consultant or accountant retained by such Holders collectively, Underwriters or other financial institutions to
participate, at each such Person’s own expense, in the preparation of the Registration Statement, and cause the
Company’s officers, directors and employees to supply all information reasonably requested by any such representative,
Underwriter, financial institution, attorney, consultant or accountant in connection with the Registration; provided,
however, that such representative, Underwriters or financial institutions agree to confidentiality arrangements, in form and
substance reasonably satisfactory to the Company, prior to the release or disclosure of any such information;
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3.1.11 obtain
a “comfort” letter (including a bring-down letter dated as of the date the Registrable Securities are delivered for sale pursuant
to such Registration) from the Company’s independent registered public accountants in the event of an Underwritten Offering, a Block
Trade, an Other Coordinated Offering or a sale by a broker, placement agent or sales agent pursuant to a Registration Statement (subject
to such Underwriter or other financial institution facilitating such offering providing such certification or representation as reasonably
requested by the Company’s independent registered public accountants and the Company’s counsel), in customary form and covering
such matters of the type customarily covered by “comfort” letters as the managing Underwriter or other similar type of sales
agent or placement agent may reasonably request;
3.1.12 in
the event of an Underwritten Offering, a Block Trade, an Other Coordinated Offering or sale by a broker, placement agent or sales agent
pursuant to a Registration Statement, on the date the Registrable Securities are delivered for sale pursuant to such Registration, obtain
an opinion and negative assurance letter, dated such date, of counsel representing the Company for the purposes of such Registration,
addressed to the participating Holders, the broker, placement agent or sales agent, if any, and the Underwriters, if any, covering such
legal matters with respect to the Registration in respect of which such opinion is being given as the participating Holders, broker, placement
agent, sales agent, or Underwriter may reasonably request and as are customarily included in such opinions and negative assurance letters,
provided, in each case, that such participating Holders provide such information to such counsel as is customarily required for, or is
reasonably requested by such counsel for purposes of, such opinion or negative assurance letter;
3.1.13 in
the event of any Underwritten Offering, a Block Trade, an Other Coordinated Offering or sale by a broker, placement agent or sales agent
pursuant to a Registration Statement, enter into and perform its obligations under an underwriting agreement, purchase agreement, sales
agreement or placement agreement, in usual and customary form, with the managing Underwriter or broker, sales agent or placement agent
of such offering or sale;
3.1.14 make
available to its security holders, as soon as reasonably practicable, an earnings statement covering the period of at least 12 months
beginning with the first day of the Company’s first full calendar quarter after the effective date of the Registration Statement
which satisfies the provisions of Section 11(a) of the Securities Act and Rule 158 thereunder (or any successor rule promulgated thereafter
by the Commission);
3.1.15 with
respect to an Underwritten Offering pursuant to Section 2.1.4, use its commercially reasonable efforts to make available senior
executives of the Company to participate in customary “road show” presentations that may be reasonably requested by the Underwriter
in such Underwritten Offering; and
3.1.16 otherwise,
in good faith, cooperate reasonably with, and take such customary actions as may reasonably be requested by the Holders participating
in such Registration, consistent with the terms of this Agreement, in connection with such Registration.
Notwithstanding the foregoing, the Company
shall not be required to provide any documents or information to an Underwriter or other sales agent or placement agent if such Underwriter
or other sales agent or placement agent has not then been named with respect to the applicable Underwritten Offering or other offering
involving a registration as an Underwriter or broker, sales agent or placement agent, as applicable.
17
3.2 Registration
Expenses. The Registration Expenses of all Registrations shall be borne by the Company. It is acknowledged by the Holders that the
Holders shall bear all incremental selling expenses relating to the sale of Registrable Securities, such as Underwriters’ or agents’
commissions and discounts, brokerage fees, Underwriter marketing costs and, other than as set forth in the definition of “Registration
Expenses,” all reasonable fees and expenses of any legal counsel representing the Holders.
3.3 Requirements
for Participation in Underwritten Offerings. The Holders of Registrable Securities shall provide such information as may reasonably
be requested by the Company, or the managing Underwriter or placement agent or sales agent, if any, in connection with the preparation
of any Registration Statement or Prospectus, including amendments and supplements thereto, in order to effect the registration of any
Registrable Securities under the Securities Act pursuant to Article II and in connection with the Company’s obligation to
comply with federal and applicable state securities Laws. Notwithstanding anything in this Agreement to the contrary, if any Holder does
not timely provide the Company with its requested Holder Information, the Company may exclude such Holder’s Registrable Securities
from the applicable Registration Statement or Prospectus if the Company determines, based on the advice of counsel, that such information
is necessary to effect the registration and such Holder continues thereafter to withhold such information. No Person may participate in
any Underwritten Offering or other coordinated offering for equity securities of the Company pursuant to a Registration initiated by the
Company hereunder unless such Person (i) agrees to sell such Person’s securities on the basis provided in any arrangements approved
by the Company and (ii) timely completes and executes all customary questionnaires, powers of attorney, indemnities, lock-up agreements,
underwriting or other agreements and other customary documents as may be reasonably required under the terms of such arrangements. The
exclusion of a Holder’s Registrable Securities as a result of this Section 3.3 shall not affect the registration of the other
Registrable Securities to be included in such Registration.
3.4 Suspension of Sales; Adverse Disclosure; Restrictions on Registration Rights.
3.4.1 Upon
receipt of written notice from the Company that a Registration Statement or Prospectus contains a Misstatement, each of the Holders shall
forthwith discontinue disposition of Registrable Securities until he, she or it has received copies of a supplemented or amended Prospectus
correcting the Misstatement (it being understood that the Company hereby covenants to prepare and file such supplement or amendment as
soon as practicable after the time of such notice), or until he, she or it is advised in writing by the Company that the use of the Prospectus
may be resumed.
3.4.2 If
the filing, initial effectiveness or continued use of a Registration Statement in respect of any Registration at any time would (i)
require the Company to make an Adverse Disclosure, (ii) require the inclusion in such Registration Statement of financial statements
that are unavailable to the Company for reasons beyond the Company’s control or (iii) in the good faith judgment of the
majority of the Board, be seriously detrimental to the Company, and the majority of the Board concludes as a result that it is
essential to defer such filing, initial effectiveness or continued use at such time, the Company may, upon giving prompt written
notice of such action to the Holders (which notice shall not specify the nature of the event giving rise to such delay or
suspension), delay the filing or initial effectiveness of, or suspend use of, such Registration Statement for the shortest period of
time determined in good faith by the Company to be necessary for such purpose. In the event the Company exercises its rights under
this Section 3.4.2, the Holders agree to suspend, immediately upon their receipt of the notice referred to above, their use
of the Prospectus relating to any Registration in connection with any sale or offer to sell Registrable Securities until such Holder
receives written notice from the Company that such sales or offers of Registrable Securities may be resumed, and in each case
maintain the confidentiality of such notice and its contents.
18
3.4.3 Subject
to Section 3.4.4, if (i) during the period starting with the date 60 days prior to the Company’s good faith estimate of
the date of the filing of, and ending on a date 120 days after the effective date of, a Company-initiated Registration, and provided
that the Company continues to actively employ, in good faith, all commercially reasonable efforts to maintain the effectiveness of
the applicable Shelf Registration, or (ii) if, pursuant to Section 2.1.4, Holders have requested an Underwritten Shelf
Takedown and the Company and such Holders are unable to obtain the commitment of underwriters to firmly underwrite such offering,
then, in each case, the Company may, upon giving prompt written notice of such action to the Holders, delay any other registered
offering pursuant to Section 2.1.4.
3.4.4 The
right to delay or suspend any filing, initial effectiveness or continued use of a Registration Statement pursuant to Section 3.4.2
or a registered offering pursuant to Section 3.4.3 shall be exercised by the Company, in the aggregate, for not more than 90 consecutive
calendar days or more than 120 total calendar days in each case, during any 12-month period.
3.5 Reporting
Obligations. As long as any Holder shall own Registrable Securities, the Company, at all times while it shall be a reporting company
under the Exchange Act, covenants to use commercially reasonable efforts to file timely (or obtain extensions in respect thereof and file
within the applicable grace period) all reports required to be filed by the Company after the date hereof pursuant to Section 13(a) or
15(d) of the Exchange Act. The Company further covenants that it shall take such further action as any Holder may reasonably request,
to the extent required from time to time to enable such Holder to sell Registrable Securities held by such Holder without registration
under the Securities Act within the limitation of the exemptions provided by Rule 144.
ARTICLE IV
INDEMNIFICATION AND CONTRIBUTION
4.1 Indemnification.
4.1.1 The
Company agrees to indemnify, to the extent permitted by law, each Holder of Registrable Securities, its officers, directors, agents and
each Person who controls such Holder (within the meaning of the Securities Act) against all losses, claims, damages, liabilities and reasonable
and documented out-of-pocket expenses (including, without limitation, reasonable outside attorneys’ fees) resulting from any untrue
or alleged untrue statement of material fact contained in or incorporated by reference in any Registration Statement, Prospectus or preliminary
Prospectus or any amendment thereof or supplement thereto filed pursuant to this Agreement or any omission or alleged omission of a material
fact required to be stated therein or necessary to make the statements therein not misleading, except insofar as the same are caused by
or contained in any information or affidavit so furnished in writing to the Company by such Holder expressly for use therein. The Company
shall indemnify the Underwriters, their officers and directors and each Person who controls such Underwriters (within the meaning of the
Securities Act) to the same extent as provided in the foregoing with respect to the indemnification of the Holder.
19
4.1.2 In
connection with any Registration Statement filed pursuant to this Agreement in which a Holder of Registrable Securities is
participating, such Holder shall furnish (or cause to be furnished) to the Company in writing such information and affidavits as the
Company reasonably requests for use in connection with any such Registration Statement or Prospectus (the “Holder
Information”) and, to the extent permitted by law, shall indemnify the Company, its directors, officers and agents and
each Person who controls the Company (within the meaning of the Securities Act) against all losses, claims, damages, liabilities and
reasonable and documented out-of-pocket expenses (including, without limitation, reasonable outside attorneys’ fees) resulting
from any untrue or alleged untrue statement of material fact contained in or incorporated by reference in any Registration
Statement, Prospectus or preliminary Prospectus or any amendment thereof or supplement thereto or any omission or alleged omission
of a material fact required to be stated therein or necessary to make the statements therein not misleading, but only to the extent
that such untrue statement is contained in (or not contained in, in the case of an omission) any information or affidavit so
furnished in writing by such Holder expressly for use therein; provided, however, that the obligation to indemnify shall be
several, not joint and several, among such Holders of Registrable Securities, and the liability of each such Holder of Registrable
Securities shall be in proportion to and limited to the net proceeds received by such Holder from the sale of Registrable Securities
pursuant to such Registration Statement. The Holders of Registrable Securities shall indemnify the Underwriters, their officers,
directors and each person or entity who controls such Underwriters (within the meaning of the Securities Act) to the same extent as
provided in the foregoing with respect to indemnification of the Company.
4.1.3 Any
Person entitled to indemnification herein shall (i) give prompt written notice to the indemnifying party of any claim with respect to
which it seeks indemnification (provided that the failure to give prompt notice shall not impair any Person’s right to indemnification
hereunder to the extent such failure has not materially prejudiced the indemnifying party) and (ii) unless in such indemnified party’s
reasonable judgment a conflict of interest between such indemnified and indemnifying parties may exist with respect to such claim, permit
such indemnifying party to assume the defense of such claim with counsel reasonably satisfactory to the indemnified party. If such defense
is assumed, the indemnifying party shall not be subject to any liability for any settlement made by the indemnified party without its
consent (but such consent shall not be unreasonably withheld). An indemnifying party who is not entitled to, or elects not to, assume
the defense of a claim shall not be obligated to pay the fees and expenses of more than one counsel (plus one local counsel if necessary
in the reasonable judgment of the indemnified party) for all parties indemnified by such indemnifying party with respect to such claim,
unless in the reasonable judgment of any indemnified party a conflict of interest may exist between such indemnified party and any other
of such indemnified parties with respect to such claim. No indemnifying party shall, without the consent of the indemnified party, consent
to the entry of any judgment or enter into any settlement which cannot be settled in all respects by the payment of money (and such money
is so paid by the indemnifying party pursuant to the terms of such settlement) or which settlement includes a statement or admission of
fault and culpability on the part of such indemnified party or which settlement does not include as an unconditional term thereof the
giving by the claimant or plaintiff to such indemnified party of a release from all liability in respect of such claim or litigation.
4.1.4 The
indemnification provided for under this Agreement shall remain in full force and effect regardless of any investigation made by or on
behalf of the indemnified party or any officer, director or controlling Person of such indemnified party and shall survive the transfer
of securities. The Company and each Holder of Registrable Securities participating in an offering also agrees to make such provisions
as are reasonably requested by any indemnified party for contribution to such party in the event the Company’s or such Holder’s
indemnification is unavailable for any reason.
20
4.1.5 If
the indemnification provided under Section 4.1 from the indemnifying party is unavailable or insufficient to hold harmless an
indemnified party in respect of any losses, claims, damages, liabilities and out-of-pocket expenses referred to herein, then the
indemnifying party, in lieu of indemnifying the indemnified party, shall contribute to the amount paid or payable by the indemnified
party as a result of such losses, claims, damages, liabilities and out-of-pocket expenses in such proportion as is appropriate to
reflect the relative fault of the indemnifying party and the indemnified party, as well as any other relevant equitable
considerations. The relative fault of the indemnifying party and indemnified party shall be determined by reference to, among other
things, whether any action in question, including any untrue or alleged untrue statement of a material fact or omission or alleged
omission to state a material fact, was made by (or not made by, in the case of an omission), or relates to information supplied by
(or not supplied by in the case of an omission), such indemnifying party or indemnified party, and the indemnifying party’s
and indemnified party’s relative intent, knowledge, access to information and opportunity to correct or prevent such action; provided,
however, that the liability of any Holder under this Section 4.1.5 shall be limited to the amount of the net proceeds
received by such Holder in such offering giving rise to such liability. The amount paid or payable by a party as a result of the
losses or other liabilities referred to above shall be deemed to include, subject to the limitations set forth in Sections
4.1.1, 4.1.2 and 4.1.3, any legal or other fees, charges or out-of-pocket expenses reasonably incurred by such
party in connection with any investigation or proceeding. The parties hereto agree that it would not be just and equitable if
contribution pursuant to this Section 4.1.5 were determined by pro rata allocation or by any other method of
allocation, which does not take account of the equitable considerations referred to in this Section 4.1.5. No Person guilty
of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) shall be entitled to contribution
pursuant to this Section 4.1.5 from any Person who was not guilty of such fraudulent misrepresentation.
4.2 Waiver
of Medallion Guaranty. The Company agrees to use commercially reasonable efforts to enter into that certain indemnification agreement,
substantially in the form attached as Exhibit B to this Agreement, in favor of Continental Stock Transfer & Trust Company (or
any successor transfer agent or warrant agent of the Company) in connection with the waiver of any requirement to provide a medallion
guarantee in connection with any Transfer of any shares of Common Stock or other equity securities of the Company by any Sponsor Holder,
PIPE Holder, or any of their Permitted Transferees or PIPE Transferees; provided that, in each case, as a prerequisite to the Company’s
entry into such indemnification agreement, such Sponsor Holder, PIPE Holder, Permitted Transferee or PIPE Transferees enters into an indemnification
agreement in favor of the Company.
ARTICLE V
MISCELLANEOUS
5.1 Notices.
All notices, consents, waivers and other communications hereunder shall be in writing and shall be deemed to have been duly given when
delivered (i) in person, (ii) by facsimile or other electronic means (including email), with affirmative confirmation of receipt, (iii)
one (1) Business Day after being sent, if sent by reputable, nationally recognized overnight courier service or (iv) three (3) Business
Days after being mailed, if sent by registered or certified mail, pre-paid and return receipt requested, in each case to the applicable
party at the following addresses (or at such other address for a party as shall be specified by like notice). Any notice or communication
under this Agreement must be addressed, if to the Company, to: Elroy Air, Inc., [●], Attention: [●], Email: [●], with
a copy (which shall not constitute notice) to [●], [●], Attention: [●], Email: [●];and, if to any Holder, at such
Holder’s address or contact information as set forth in the Company’s books and records. Any party may change its address
for notice at any time and from time to time by written notice to the other parties hereto, and such change of address shall become effective
thirty (30) days after delivery of such notice as provided in this Section 5.1.
5.2 Assignment; No Third-Party Beneficiaries.
5.2.1 This
Agreement and the rights, duties and obligations of the Company hereunder may not be assigned or delegated by the Company in whole or
in part.
5.2.2 This
Agreement and the rights, duties and obligations of the Holders hereunder may not be assigned or delegated by the Holders in whole or
in part; provided, however, that, subject to Section 5.2.5, a Holder may assign the rights and obligations of such Holder
hereunder relating to particular Registrable Securities in connection with the transfer of such Registrable Securities to a Permitted
Transferee or PIPE Transferee of such Holder (it being understood that no such Transfer shall reduce any rights of the Holder with respect
to Registrable Securities still held by such Holder). A Permitted Transferee or PIPE Transferee receiving Registrable Securities from
a Sponsor Holder shall become a Sponsor Holder, a Permitted Transferee receiving Registrable Securities from an Elroy Holder shall become
an Elroy Holder, a PIPE Transferee receiving Registrable Securities from a PIPE Holder shall become a PIPE Holder, and a Permitted Transferee
receiving Registrable Securities from an Other Holder shall become an Other Holder.
21
5.2.3 This
Agreement and the provisions hereof shall be binding upon and shall inure to the benefit of each of the parties and its successors and
the permitted assigns of the Holders, which shall include Permitted Transferees and PIPE Transferees.
5.2.4 This
Agreement shall not confer any rights or benefits on any Persons that are not parties hereto, other than as expressly set forth in this
Agreement and Section 5.2.
5.2.5 No
assignment by any party hereto of such party’s rights, duties and obligations hereunder shall be binding upon or obligate the Company
unless such assignment is permitted under 5.2.2 and unless and until the Company shall have received (i) written notice of such assignment
as provided in Section 5.1 and (ii) the written agreement of the assignee, in a form reasonably satisfactory to the Company, to
be bound by the terms and provisions of this Agreement (which may be accomplished by an addendum or certificate of joinder to this Agreement).
Any transfer or assignment made other than as provided in this Section 5.2 shall be null and void.
5.3 Counterparts.
This Agreement may be executed and delivered (including by facsimile or other electronic transmission) in one or more counterparts, and
by the different parties hereto in separate counterparts, each of which when executed shall be deemed to be an original but all of which
taken together shall constitute one and the same agreement.
5.4 Governing
Law. This Agreement, and all claims or causes of action based upon, arising out of, or related to this Agreement or the transactions
contemplated hereby, shall be governed by, and construed in accordance with, the Laws of the State of Delaware, without giving effect
to principles or rules of conflict of Laws to the extent such principles or rules would require or permit the application of Laws of
another jurisdiction.
5.5 Jurisdiction.
Any Legal Proceeding based upon, arising out of or related to this Agreement or the transactions contemplated hereby must be brought
in the Court of Chancery of the State of Delaware (or, to the extent such court does not have jurisdiction, in the United States District
Court for the District of Delaware and to the extent such court does not have subject matter jurisdiction, the Superior Court of the
State of Delaware), and each of the parties irrevocably (i) submits to the exclusive jurisdiction of each such court in any such Legal
Proceeding, (ii) waives any objection it may now or hereafter have to personal jurisdiction, venue or to convenience of forum, (iii)
agrees that all claims in respect of the Legal Proceeding shall be heard and determined only in any such court, and (iv) agrees not to
bring any Legal Proceeding arising out of or relating to this Agreement or the transactions contemplated hereby in any other court. Nothing
herein contained shall be deemed to affect the right of any party to serve process in any manner permitted by Law or to commence Legal
Proceedings or otherwise proceed against any other party in any other jurisdiction, in each case, to enforce judgments obtained in any
Legal Proceeding, suit or proceeding brought pursuant to this Section 5.5.
5.6 Waiver
of Jury Trial. EACH PARTY ACKNOWLEDGES AND AGREES THAT ANY CONTROVERSY WHICH MAY ARISE UNDER THIS AGREEMENT AND THE TRANSACTIONS
CONTEMPLATED HEREBY IS LIKELY TO INVOLVE COMPLICATED AND DIFFICULT ISSUES, AND THEREFORE EACH SUCH PARTY HEREBY IRREVOCABLY, UNCONDITIONALLY
AND VOLUNTARILY WAIVES ANY RIGHT SUCH PARTY MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY ACTION, SUIT OR PROCEEDING DIRECTLY OR INDIRECTLY
ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY OF THE TRANSACTIONS CONTEMPLATED HEREBY.
5.7 Amendments
and Modifications. Upon the written consent of the Company and the Holders of at least a majority in interest of the aggregate Registrable
Securities at the time in question, compliance with any of the provisions, covenants and conditions set forth in this Agreement may be
waived, or any of such provisions, covenants or conditions may be amended or modified; provided, however, that notwithstanding
the foregoing, any amendment hereto or waiver hereof that adversely effects the Sponsor Holders shall also require the written consent
of the Sponsor Majority Holders so long as the Sponsor Holders and their respective affiliates hold, in the aggregate, at least one percent
(1%) of the outstanding shares of Common Stock of the Company; and provided, further, that any amendment hereto or waiver
hereof that adversely affects one Holder, solely in its capacity as a holder of the shares of capital stock of the Company, in a manner
that is materially different from the other Holders (in such capacity) shall require the consent of the Holder so affected. No course
of dealing between any Holder or the Company and any other party hereto or any failure or delay on the part of a Holder or the Company
in exercising any rights or remedies under this Agreement shall operate as a waiver of any rights or remedies of any Holder or the Company.
No single or partial exercise of any rights or remedies under this Agreement by a party shall operate as a waiver or preclude the exercise
of any other rights or remedies hereunder or thereunder by such party.
22
5.8 Other
Registration Rights. Other than as provided in the Warrant Agreement, dated as of February 10, 2026, between the Company and Continental
Stock Transfer & Trust Company, the Company represents and warrants that no Person, other than a Holder of Registrable Securities,
has any right to require the Company to register any securities of the Company for sale or to include such securities of the Company
in any Registration Statement filed by the Company for the sale of securities for its own account or for the account of any other Person.
For so long as the Sponsor Holders and their respective affiliates hold, in the aggregate, at least five percent (5%) of the outstanding
shares of Common Stock of the Company, the Company hereby agrees and covenants that it will not grant rights to register any Common Stock
(or securities convertible into or exchangeable for Common Stock) pursuant to the Securities Act that are more favorable or senior to
those granted to the Holders hereunder (such rights “Competing Registration Rights”) without the prior written
consent of the Sponsor Majority Holders, not to be unreasonably withheld, delayed or conditioned. Further, the Company represents and
warrants that this Agreement supersedes any other registration rights agreement or agreement with similar terms and conditions, and in
the event of a conflict between any such agreement or agreements and this Agreement, the terms of this Agreement shall prevail.
5.9 Term.
This Agreement shall terminate upon the earlier of (i) the tenth anniversary of the date of this Agreement and (ii) with respect to any
Holder, the date that such Holder no longer holds any Registrable Securities. The provisions of Article IV shall survive any termination.
5.10 Holder
Information. Each Holder agrees, if requested in writing, to represent to the Company the total number of Registrable Securities
held by such Holder in order for the Company to make determinations hereunder.
5.11 Additional
Holders; Joinder. In addition to Persons who may become Holders pursuant to Section 5.2, subject to the prior written consent
of at least a majority in interest of the aggregate Registrable Securities at the time in question, the Company may make any Person who
acquires Common Stock or rights to acquire Common Stock after the date hereof a party to this Agreement (each such Person, an “Additional
Holder”) by obtaining an executed joinder to this Agreement from such Additional Holder in the form of Exhibit A
attached hereto (a “Joinder”). Such Joinder shall specify the rights and obligations of the applicable Additional
Holder under this Agreement. Upon the execution and delivery and subject to the terms of a Joinder by such Additional Holder, the Common
Stock of the Company then owned, or underlying any rights then owned, by such Additional Holder (the “Additional Holder Common
Stock”) shall be Registrable Securities to the extent provided herein and therein, and such Additional Holder shall be
a Holder under this Agreement with respect to such Additional Holder Common Stock.
5.12 Severability.
In case any provision in this Agreement shall be held invalid, illegal or unenforceable in a jurisdiction, such provision shall be modified
or deleted, as to the jurisdiction involved, only to the extent necessary to render the same valid, legal and enforceable, and the validity,
legality and enforceability of the remaining provisions hereof shall not in any way be affected or impaired thereby nor shall the validity,
legality or enforceability of such provision be affected thereby in any other jurisdiction. Upon such determination that any term or
other provision is invalid, illegal or incapable of being enforced, the parties will substitute for any invalid, illegal or unenforceable
provision a suitable and equitable provision that carries out, so far as may be valid, legal and enforceable, the intent and purpose
of such invalid, illegal or unenforceable provision.
5.13 Entire
Agreement; Restatement. This Agreement and the documents or instruments referred to herein, including any exhibits and schedules
attached hereto, which exhibits and schedules are incorporated herein by reference, embody the entire agreement and understanding of
the parties hereto in respect of the subject matter contained herein. There are no restrictions, promises, representations, warranties,
covenants or undertakings, other than those expressly set forth or referred to herein or the documents or instruments referred to herein,
which collectively supersede all prior agreements and the understandings among the parties with respect to the subject matter contained
herein. Upon the Closing, the Original RRA shall no longer be of any force or effect.
[Signature
Pages Follow]
23
IN
WITNESS WHEREOF, the undersigned have caused this Agreement to be executed as of the date first written above.
COMPANY:
ELROY
AIR, INC.,
a
Delaware corporation
By:
Name:
Title:
[Signature Page to Amended
and Restated Registration Rights Agreement]
ELROY
HOLDERS:
[●]
[●]
[●]
[Signature Page to Amended
and Restated Registration Rights Agreement]
SPONSOR:
COLUMBUS
CIRCLE 2 SPONSOR
CORPORATION
LLC, a Delaware limited liability company
By:
Name:
Title:
By:
Name:
Title:
OTHER
SPONSOR HOLDERS:
[●]
By:
Name:
Title:
[●]
By:
Name:
Title:
[Signature Page to Amended
and Restated Registration Rights Agreement]
PIPE
HOLDERS:
[●]
[●]
[●]
[Signature Page to Amended
and Restated Registration Rights Agreement]
OTHER
HOLDERS:
[●]
[●]
[●]
[Signature Page to Amended
and Restated Registration Rights Agreement]
Exhibit
A
AMENDED
AND RESTATED
REGISTRATION RIGHTS AGREEMENT
JOINDER
The
undersigned is executing and delivering this joinder (this “Joinder”) pursuant to the Amended and Restated
Registration Rights Agreement, dated as of [ ], 2026 (as the same may hereafter be amended, the “Registration Rights Agreement”),
among Elroy Air, Inc., a Delaware corporation (the “Company”), and the other Persons named as parties therein.
Capitalized terms used but not otherwise defined herein shall have the meanings provided in the Registration Rights Agreement.
By
executing and delivering this Joinder to the Company, and upon acceptance hereof by the Company upon the execution of a counterpart hereof,
the undersigned hereby agrees to become a party to, to be bound by and to comply with the Registration Rights Agreement as a Holder of
Registrable Securities in the same manner as if the undersigned were an original signatory to the Registration Rights Agreement as [a
Sponsor Holder / an Elroy Holder / a PIPE Holder / an Other Holder], and the undersigned’s [shares of Common Stock] shall be included
as Registrable Securities under the Registration Rights Agreement to the extent provided therein; provided, however, that the
undersigned and its permitted assigns (if any) shall not have any rights as Holders, and the undersigned’s (and its transferees’)
[shares of Common Stock] shall not be included as Registrable Securities, for purposes of the Excluded Sections.
For
purposes of this Joinder, “Excluded Sections” shall mean [______].
Accordingly,
the undersigned has executed and delivered this Joinder as of the ________day of,______ 20__.
Signature
of Stockholder
Name of Stockholder
Its:
Address:
Agreed
and Accepted as of
______,
20 __
[●]
By:
Name:
Its:
Exhibit
B
[●]
[●]
[●]
[ ],
2026
Continental
Stock Transfer & Trust Company
1 State Street, 30th Floor
New
York, NY 10004
Re:
Indemnification in-lieu-of Medallion Signature Guarantee To whom it may concern:
This
letter is in regards to the transfer by [Columbus Circle 2 Sponsor Corporation LLC / Name of Sponsor Holder] to [ ], of [ ] shares of
Common Stock of Elroy Air, Inc. (formerly known as Inflection Point Acquisition Corp. VII) (the “Company”). Please
be advised that the Company authorizes Continental Stock Transfer & Trust Company to process the subject transfer, which includes
securities that have been duly endorsed by the registered holder but do not bear a customary medallion signature guarantee. The Company
agrees to indemnify Continental Stock Transfer & Trust Company against all losses, damages, costs, charges and expenses that it may
in any way sustain, incur, or become liable for by reason related to the above referenced transaction.
I,
[●], a duly authorized officer of the Company, have the authority to execute this indemnification on behalf of the Company.
Very
truly yours,
[●]
By:
Name:
Title:
EXHIBIT
C
FORM
OF WARRANT
THIS
WARRANT AND THE SECURITIES ISSUABLE UPON EXERCISE OF THIS WARRANT HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED
(THE “ACT”), OR QUALIFIED UNDER ANY STATE OR FOREIGN SECURITIES LAWS AND MAY NOT BE OFFERED FOR SALE, SOLD, PLEDGED,
HYPOTHECATED, OR OTHERWISE TRANSFERRED OR ASSIGNED UNLESS (I) A REGISTRATION STATEMENT COVERING SUCH SECURITIES IS EFFECTIVE UNDER THE
ACT AND IS QUALIFIED UNDER APPLICABLE STATE AND FOREIGN LAW OR (II) THE TRANSACTION IS EXEMPT FROM THE REGISTRATION AND PROSPECTUS DELIVERY
REQUIREMENTS UNDER THE ACT AND THE QUALIFICATION REQUIREMENTS UNDER APPLICABLE STATE AND FOREIGN LAW AND, IF THE COMPANY REQUESTS, AN
OPINION SATISFACTORY TO THE CORPORATION TO SUCH EFFECT HAS BEEN RENDERED BY COUNSEL.
COMMON
STOCK PURCHASE WARRANT
Original
Issue Date: June [●], 2026
Initial Exercise Date: as set forth
in Section 2
Number
of Warrant Shares: [●]
FOR
VALUE RECEIVED, Elory Air, Inc., a Delaware corporation (the “Company”), hereby certifies that [NAME OF HOLDER],
a [JURISDICTION] [TYPE OF ENTITY], or its registered assigns (the “Holder”) is entitled to purchase from the
Company [●] duly authorized and validly issued shares (the “Warrant Shares”) of common stock, par value
$0.0001 per share, of the Company (the “Common Stock”) at a purchase price per share of $12.00 (subject to
adjustment as provided herein, the “Exercise Price”), all subject to the terms, conditions, and adjustments
set forth below in this Warrant. Certain capitalized terms used herein are defined in Section 1 hereof.
This
Warrant has been issued pursuant to the terms of the Securities Purchase Agreement, dated as of June [●], 2026 (the “Purchase
Agreement”), between the Company and the Holder.
This
Warrant is one of a series of warrants with substantially the same terms as this Warrant with an initial exercise price of $12.00 per
share issued pursuant to securities purchase agreements with substantially the same terms as the Purchase Agreement (such series of warrants,
the “Related Warrants”).
1. Definitions.
As used in this Warrant, the following terms have the respective meanings set forth below:
“Aggregate
Exercise Price” means an amount equal to the product of (a) the number of Warrant Shares in respect of which this Warrant
is then being exercised pursuant to Section 3 hereof, multiplied by (b) the Exercise Price in effect as of the Exercise
Date in accordance with the terms of this Warrant.
“Board”
means the board of directors of the Company.
“Business
Combination” means the transactions contemplated by the Business Combination Agreement.
“Business
Combination Agreement” means that certain business combination agreement, dated as of June [●], 2026, by and among
Columbus Circle Capital Corp. II, a Cayman Islands exempted company (prior to the closing of the Business Combination, “SPAC,”
and following the closing of the Business Combination “PubCo”), IPHX Merger Sub, Inc. and the Company.
“Business
Day” means a day other than a Saturday, Sunday or other day on which commercial banks in the City of New York are authorized
or required to close.
2
“Common
Stock” has the meaning set forth in the preamble.
“Common
Stock Equivalents” means any securities of the Company which would entitle the holder thereof to acquire at any time Common
Stock, including, without limitation, any debt, preferred stock, right, option, warrant or other instrument that is at any time convertible
into or exercisable or exchangeable for, or otherwise entitles the holder thereof to receive, Common Stock, and any securities of the
Company that when paired with one or more other securities of the Company or another entity entitles the holder thereof to receive, Common
Stock.
“Company”
has the meaning set forth in the preamble.
“Convertible
Securities” means any stock or securities (other than Options) directly or indirectly convertible into or exercisable or
exchangeable for, or which otherwise entitles the holder thereof to acquire, any shares of Common Stock and any securities of the Company
that when paired with one or more other securities of the Company or another entity entitles the holder thereof to receive, Common Stock.
“Certificate
of Incorporation” means the amended and restated certificate of incorporation of the Company, as such certificate may be
corrected, amended, or restated.
“Exempt
Issuance” means the issuance or deemed issuance of shares of Common Stock specified in clauses (i)-(iv) of the definition
of Additional Shares of Common Stock in the Company’s Certificate of Incorporation.
“Exercise
Date” means, for any given exercise of this Warrant, the date on which the conditions to such exercise as set forth in
Section 3 shall have been satisfied at or prior to 5:00 p.m., New York, New York time, on a Business Day, including, without limitation,
the receipt by the Company of the Exercise Agreement, the Warrant, and the Aggregate Exercise Price.
“Exercise
Agreement” has the meaning set forth in Section 3(a)(i).
“Exercise
Period” has the meaning set forth in Section 2. “Exercise Price” has the meaning set forth in
the preamble.
“Fair
Market Value” means, as of any particular date, the fair market value as determined by the Board in its good faith.
“Inflection
Point” means Inflection Point Asset Management LLC and/or one or more of its Affiliates.
“Options”
means any rights, warrants or options to subscribe for or purchase shares of Common Stock or Convertible Securities.
“Option
Value” means the value of an Option based on the Black-Scholes model reflecting (i) a risk-free interest rate corresponding
to the U.S. Treasury rate for a period equal to the remaining term of the applicable Option as of the applicable date of determination,
(ii) an expected volatility equal to 50%, (iii) the underlying price per share used in such calculation shall be equal to the highest
price per share at which the Company has sold (or has been deemed to have sold) shares of Common Stock, (iv) a zero cost of borrow and
(v) a 360 day annualization factor , provided, however, in case any Option is issued in connection with the
issue or sale of other securities of the Company, together comprising one integrated transaction, in no event shall the Option Value
exceed a fraction of the aggregate consideration received (excluding the minimum aggregate amount of additional consideration (as set
forth in the instruments relating thereto, without regard to any provision contained therein for a subsequent adjustment of such consideration)
payable to the Company upon the exercise of such Options, or in the case of Options for Convertible Securities, the exercise of such
Options for Convertible Securities and the conversion or exchange of such Convertible Securities) equal to (1) the number of shares of
Common Stock underlying such Option divided by (2) the total number of shares of Common Stock issued or issuable in the integrated transaction
(including the number of shares underlying such Option).
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“Required
Holders” means the holders of a majority in interest (based on remaining aggregate Warrant Shares) of the Related Warrants
then outstanding, which majority must include Inflection Point to the extent it then holds any Related Warrants.
“VWAP”
means, for any date and any security, the price determined by the first of the following clauses that applies: (a) if the security is
then listed or quoted on a Trading Market, the arithmetic mean of the daily volume weighted average prices of the security for each of
the 20 Trading Days preceding such date (or the nearest preceding date) on the Trading Market on which the security is then listed or
quoted as reported by Bloomberg (based on a Trading Day from 9:30 a.m. (New York City time) to 4:02 p.m. (New York City time)), with
each such Trading Day weighted equally regardless of the aggregate trading volume for such Trading Day, (b) if OTCQB or OTCQX is not
a Trading Market, the arithmetic mean of the daily volume weighted average prices of the security for each of the 20 Trading Days preceding
such date (or the nearest preceding date) on OTCQB, OTCQX or OTCID as applicable, calculated in the same manner as clause (a), (c) if
the security is not then listed or quoted for trading on OTCQB or OTCQX and if prices for the security are then reported in The Pink
Open Market (or a similar organization or agency succeeding to its functions of reporting prices), the average of the highest closing
bid price and the lowest closing ask price of the security for the 20 Trading Days preceding such date, or (d) in all other cases, the
fair market value of the security as determined by an independent appraiser selected in good faith by the Required Holders and reasonably
acceptable to the Company, the fees and expenses of which shall be paid by the Company. For the avoidance of doubt, the daily volume
weighted average price for each individual Trading Day shall be determined by Bloomberg in accordance with its standard methodology,
and the VWAP for the applicable period shall be calculated by summing such daily values and dividing by the number of Trading Days in
the measurement period (i.e., 20 Trading Days), such that each Trading Day’s price is given equal weight irrespective of trading
volume.
2. Term
of Warrant. If the Business Combination Agreement has been terminated in accordance with its terms, then, subject to the terms and
conditions hereof, at any time or from time to time after the date of such termination (the “Initial Exercise Date”)
and prior to 5:00 p.m., New York, New York time, on the fifth (5th) anniversary of the date of the termination of the Business Combination
Agreement or, if such day is not a Business Day, on the next preceding Business Day (the “Exercise Period”),
the Holder of this Warrant may exercise this Warrant for all or any part of the Warrant Shares purchasable hereunder (subject to adjustment
as provided herein).
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3.
Exercise of Warrant.
(a) Exercise
Procedure. This Warrant may be exercised from time to time on any Business Day during the Exercise Period, for all or any part
of the unexercised Warrant Shares, upon:
(i) surrender
of this Warrant to the Company at its then principal executive offices (or an indemnification undertaking with respect to this Warrant
in the case of its loss, theft, or destruction), together with an Exercise Agreement in the form attached hereto as Exhibit A
(each, an “Exercise Agreement”), duly completed (including specifying the number of Warrant Shares to be purchased)
and executed; and
(ii) payment
to the Company of the Aggregate Exercise Price in accordance with Section 3(b).
(b) Payment
of the Aggregate Exercise Price. Payment of the Aggregate Exercise Price shall be made, at the option of the Holder as expressed
in the Exercise Agreement, by the following methods:
(i) by
delivery to the Company of a certified or official bank check payable to the order of the Company or by wire transfer of immediately
available funds to an account designated in writing by the Company, in the amount of such Aggregate Exercise Price; or
(ii) by
instructing the Company to withhold a number of Warrant Shares then issuable upon exercise of this Warrant with an aggregate Fair Market
Value as of the Exercise Date equal to such Aggregate Exercise Price.
In
the event of any withholding of Warrant Shares pursuant to clause (ii) above where the number of shares of Common Stock whose value is
equal to the Aggregate Exercise Price is not a whole number, the number of shares of Common Stock withheld by or surrendered to the Company
shall be rounded down to the nearest whole shares of Common Stock.
(c) Record
Keeping of Exercise of Warrant. Upon receipt by the Company of the Exercise Agreement, surrender of this Warrant, and payment
of the Aggregate Exercise Price (in accordance with Section 3(a) hereof), the Company shall, as promptly as practicable, and in
any event within 5 Business Days thereafter, deliver (or cause to be delivered) a stock certificate for such Warrant Shares (or a book-entry
statement evidencing the Holder’s ownership of such Warrant Shares) and cash in lieu of any fraction of a share, as provided in
Section 3(d) hereof.
(d) Fractional
Share. The Company shall not be required to issue a fractional Warrant Share upon exercise of any Warrant. As to any fraction
of a Warrant Share that the Holder would otherwise be entitled to purchase upon such exercise, the Company shall pay to such Holder an
amount in cash (by delivery of a certified or official bank check or by wire transfer of immediately available funds) equal to the product
of (i) such fraction multiplied by (ii) the Fair Market Value of one Warrant Share on the Exercise Date.
(e) Delivery
of New Warrant. Unless the purchase rights represented by this Warrant shall have expired or shall have been fully exercised,
the Company shall, at the time of delivery of the certificate or certificates representing the Warrant Shares being issued in accordance
with Section 3(c) hereof, deliver to the Holder a new Warrant evidencing the rights of the Holder to purchase the unexpired and
unexercised Warrant Shares called for by this Warrant. Such new Warrant shall in all other respects be identical to this Warrant.
(f) Valid
Issuance of Warrant and Warrant Shares. With respect to the exercise of this Warrant, the Company hereby represents, covenants,
and agrees that:
(i) this
Warrant is, and any Warrant issued in substitution for or replacement of this Warrant shall be, upon issuance, duly authorized and validly
issued;
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(ii) all
Warrant Shares issuable upon the exercise of this Warrant pursuant to the terms hereof shall be, upon issuance, and the Company shall
take all such actions as may be necessary or reasonably appropriate in order that such Warrant Shares are, duly authorized, validly issued,
and non-assessable, free and clear of all taxes, liens, and charges, and issued without violation of any preemptive or similar rights
of any member of the Company;
(iii) The
Company shall take all such actions as may be reasonably necessary to ensure that all such Warrant Shares are issued without violation
by the Company of any applicable law or governmental regulation to the extent that such applicable law or governmental regulation would
prevent the issuance of such Warrant Shares or materially and adversely impact the Company; and
(iv) The
Company shall pay all taxes and other governmental charges that may be imposed with respect to, the issuance or delivery of Warrant Shares
upon exercise of this Warrant; provided, that the Company shall not be required to pay any tax or governmental charge that may be imposed
with respect to any applicable withholding or the issuance or delivery of the Warrant Shares to any Person other than the Holder, and
no such issuance or delivery shall be made unless and until the Person requesting such issuance has paid to the Company the amount of
any such tax, or has established to the satisfaction of the Company that such tax has been paid.
(g) Conditional
Exercise. If an exercise of any portion of this Warrant is to be made in connection with a public offering or a sale of the Company
(pursuant to a merger, sale of stock, or otherwise), such exercise may at the election of the Holder be conditioned upon the consummation
of such transaction, in which case such exercise shall not be deemed to be effective until immediately prior to the consummation of such
transaction.
(h) Reservation
of Shares. During the Exercise Period, the Company shall at all times reserve and keep available out of its authorized but unissued
shares of Common Stock or other securities constituting Warrant Shares, solely for the purpose of issuance upon the exercise of this
Warrant, the maximum number of Warrant Shares issuable upon the exercise of this Warrant, and the par value per Warrant Share shall at
all times be less than or equal to the applicable Exercise Price. The Company shall not increase the par value of any Warrant Shares
receivable upon the exercise of this Warrant above the Exercise Price then in effect, and shall take all such actions as may be necessary
or appropriate in order that the Company may validly and legally issue shares of Common Stock upon the exercise of this Warrant.
4.
Certain Adjustment to Exercise Price and Number of Warrant Shares.
(a) Stock
Dividends and Splits. If the Company at any time while this Warrant is outstanding: (i) pays a stock dividend or otherwise makes
a distribution or distributions on shares of its Common Stock or any other equity or equity equivalent securities payable in shares of
Common Stock (which, for avoidance of doubt, shall not include any shares of Common Stock issued by the Company upon exercise of this
Warrant or any cash distributions), (ii) subdivides outstanding shares of Common Stock into a larger number of shares, (iii) combines
(including by way of a reverse stock split) outstanding shares of Common Stock into a smaller number of shares, or (iv) issues by reclassification
of shares of the Common Stock any shares of capital stock of the Company, then in each case the Exercise Price shall be multiplied by
a fraction of which the numerator shall be the number of shares of Common Stock (excluding treasury shares, if any) outstanding immediately
before such event and of which the denominator shall be the number of shares of Common Stock outstanding immediately after such event,
and the number of shares issuable upon exercise of this Warrant shall be proportionately adjusted such that the Aggregate Exercise Price
of this Warrant shall remain unchanged. Any adjustment made pursuant to this Section 4(a) shall become effective immediately after
the record date for the determination of stockholders entitled to receive such dividend or distribution and shall become effective immediately
after the effective date in the case of a subdivision, combination or re-classification.
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(b) Adjustment
Upon Issuance of Common Stock. If, while this Warrant is outstanding and after the occurrence of a Termination Event, the Company
issues or sells, or in accordance with this Section 4(b) is deemed to have issued or sold, any shares of Common Stock (including
the issuance or sale of shares of Common Stock owned or held by or for the account of the Company, but excluding shares of Common Stock
deemed to have been issued or sold by the Company in connection with any Exempt Issuance) for a consideration per share (the “New
Issuance Price”) less than the Exercise Price then in effect (such price threshold, the “Applicable Price”,
and each such issue, sale or deemed issuance or sale, a “Dilutive Issuance”), in issuances and sales conducted
for the purpose of raising capital by the Company, then immediately after such Dilutive Issuance, the Exercise Price then in effect shall
be reduced to an amount equal to the New Issuance Price. For purposes of determining the adjusted Exercise Price under this Section
4(b), the following shall be applicable:
(i) Options
and Convertible Securities. The consideration per share received by the Company for Common Stock deemed to have been issued pursuant
to Section 4(b)(ii), relating to Options and Convertible Securities, shall be determined by dividing: (x) the total amount, if
any, received or receivable by the Company as consideration for the issue of such Options or Convertible Securities, plus the minimum
aggregate amount of additional consideration (as set forth in the instruments relating thereto, without regard to any provision contained
therein for a subsequent adjustment of such consideration) payable to the Company upon the exercise of such Options or the conversion
or exchange of such Convertible Securities, or in the case of Options for Convertible Securities, the exercise of such Options for Convertible
Securities and the conversion or exchange of such Convertible Securities, by (y) the maximum number of shares of Common Stock (as set
forth in the instruments relating thereto, without regard to any provision contained therein for a subsequent adjustment of such number)
deemed to be issued pursuant to Section 4(b)(ii) upon the issuance of such Options or Convertible Securities.
(ii) Deemed
Issuance of Options and Convertible Securities. If the Company at any time or from time to time shall issue any Options or Convertible
Securities or shall fix a record date for the determination of holders of any class of securities entitled to receive any such Options
or Convertible Securities, then the maximum number of shares of Common Stock (as set forth in the instrument relating thereto, assuming
the satisfaction of any conditions to exercisability, convertibility or exchangeability but without regard to any provision contained
therein for a subsequent adjustment of such number) issuable upon the exercise of such Options or, in the case of Convertible Securities
and Options therefor, the conversion or exchange of such Convertible Securities, shall be deemed to be outstanding and to have been issued
as of the time of such issue or, in case such a record date shall have been fixed, as of the close of business on such record date.
(iii) Change
in Option Price. If, after the Original Issue Date, the purchase price provided for in any Options, the additional consideration,
if any, payable upon the issue, conversion, exercise or exchange of any Convertible Securities, or the rate at which any Convertible
Securities are convertible into or exercisable or exchangeable for Common Stock increases or decreases at any time, (other than (x) proportional
changes in conversion or exercise prices, as applicable, in connection with an event referred to in Section 4(a) above and (y)
automatic adjustments to such terms pursuant to anti-dilution or similar provisions of such Option or Convertible Security which are
not more favorable to the holder thereof than the anti-dilution and similar provisions set forth herein), the Exercise Price in effect
at the time of such increase or decrease shall be adjusted to the Exercise Price, which would have been in effect at such time had such
Options or Convertible Securities provided for such increased or decreased purchase price, additional consideration or increased or decreased
conversion rate, as the case may be, at the time initially granted, issued or sold. For purposes of this Section 4(b)(iii), if
the terms of any Option or Convertible Security that was outstanding as of the Original Issue Date are increased or decreased in the
manner described in the immediately preceding sentence, then such Option or Convertible Security and the shares of Common Stock deemed
issuable upon exercise, conversion or exchange thereof shall be deemed to have been issued as of the date of such increase or decrease.
(iv) Calculation
of Consideration Received. In case one or more Options is issued in connection with the issue or sale of other securities of the
Company, together comprising one integrated transaction, (x) each such Option will be deemed to have been issued for the Option Value
of such Option and (y) the other securities issued or sold in such integrated transaction shall be deemed to have been issued or sold
for the difference of (I) the aggregate consideration received by the Company less any consideration paid or payable by the Company pursuant
to the terms of such other securities of the Company, less (II) the Option Value of such Option. If any shares of Common Stock, Options
or Convertible Securities are issued or sold or deemed to have been issued or sold for cash, the consideration other than cash received
therefor will be deemed to be the net amount received by the Company therefor. If any shares of Common Stock, Options or Convertible
Securities are issued or sold for a consideration other than cash, the amount of such consideration received by the Company will be the
fair value of such consideration, except where such consideration consists of publicly traded securities, in which case the amount of
consideration received by the Company will be the VWAP of such publicly traded securities on the date of receipt. If any shares of Common
Stock, Options or Convertible Securities are issued to the owners of the non-surviving entity in connection with any merger in which
the Company is the surviving entity, the amount of consideration therefor will be deemed to be the fair value of such portion of the
net assets and business of the non-surviving entity as is attributable to such shares of Common Stock, Options or Convertible Securities,
as the case may be. The fair value of any consideration other than cash or publicly traded securities will be determined jointly by the
Company and Required Holders. If such parties are unable to reach agreement within ten (10) days after the occurrence of an event requiring
valuation (the “Valuation Event”), the fair value of such consideration will be determined within five (5)
Business Days after the tenth (10th) day following the Valuation Event by an independent, reputable appraiser jointly selected by the
Company and the Required Holders. The determination of such appraiser shall be final and binding upon all parties absent manifest error
and the fees and expenses of such appraiser shall be borne by the Company.
(v) Record
Date. If the Company takes a record of the holders of shares of Common Stock for the purpose of entitling them (A) to receive a dividend
or other distribution payable in shares of Common Stock, Options or in Convertible Securities or (B) to subscribe for or purchase shares
of Common Stock, Options or Convertible Securities, then such record date will be deemed to be the date of the issuance or sale of the
shares of Common Stock deemed to have been issued or sold upon the declaration of such dividend or the making of such other distribution
or the date of the granting of such right of subscription or purchase, as the case may be.
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(c) Subsequent
Rights Offerings. In addition to any adjustments pursuant to Section 4(a) above, if at any time after the Original Issue Date
the Company grants, issues or sells any Common Stock Equivalents or rights to purchase stock, warrants, securities or other property
pro rata to the record holders of any class of shares of Common Stock (the “Purchase Rights”), then the Holder
will be entitled to acquire, upon the terms applicable to such Purchase Rights, the aggregate Purchase Rights which the Holder could
have acquired if the Holder had held the number of shares of Common Stock acquirable upon complete exercise of this Warrant immediately
before the date on which a record is taken for the grant, issuance or sale of such Purchase Rights, or, if no such record is taken, the
date as of which the record holders of shares of Common Stock are to be determined for the grant, issue or sale of such Purchase Rights.
To the extent that the issue price of such Purchase Rights would result in an adjustment of the Exercise Price pursuant to Section
4(b), such adjustment shall not occur to the extent the Holders were granted the right to acquire such Purchase Rights on the applicable
terms.
(d) Pro
Rata Distributions. In addition to any adjustments pursuant to Section 4(a) above, if at any time after the Original Issue
Date the Company shall declare or make any dividend or other distribution of its assets (or rights to acquire its assets) to holders
of shares of Common Stock, by way of return of capital or otherwise (including, without limitation, any distribution of cash, stock or
other securities, property or options by way of a dividend, spin off, reclassification, corporate rearrangement, scheme of arrangement
or other similar transaction) (a “Distribution”), at any time after the issuance of this Warrant, then, in
each such case, the Holder shall be entitled to participate in such Distribution to the same extent that the Holder would have participated
therein if the Holder had held the number of shares of Common Stock acquirable upon complete exercise of this Warrant immediately before
the date of which a record is taken for such Distribution, or, if no such record is taken, the date as of which the record holders of
shares of Common Stock are to be determined for the participation in such Distribution.
(e) Business
Combination. Upon the closing of the Business Combination, without any action on the part of the Holder, the Company or any other
party to the Business Combination Agreement, this Warrant shall convert into a warrant of PubCo, in substantially the form attached hereto
as Exhibit B, to purchase a number of shares of common stock of PubCo equal to the [Aggregate Exercise Price divided by twelve
(12)].
(f) Fundamental
Transaction. If the Business Combination Agreement has been terminated without the Business Combination having closed, and following
such termination the Company closes a Change of Control, then, at the effective time of the Change of Control, the Holder shall be entitled
to receive, in cash, the Option Value of this Warrant (the “CoC Price”). This Warrant shall terminate immediately
upon a Change of Control, subject to Holder’s receipt of the CoC Price. As used herein, a “Change of Control”
means: (i) a Deemed Liquidation Event (as defined in the Company’s Certificate of Incorporation as in effect on the initial issuance
date of this Warrant) or (ii) the closing of the Company’s first firm commitment underwritten initial public offering of its common
stock pursuant to a registration statement filed under the Act; provided, that the Business Combination shall not constitute a Change
of Control hereunder.
(g) Calculations.
All calculations under this Section 4 shall be made to the nearest cent or the nearest 1/100th of a share, as the case may be.
For purposes of this Section 4, the number of shares of Common Stock deemed to be issued and outstanding as of a given date shall
be the sum of the number of shares of Common Stock (excluding treasury shares, if any) issued and outstanding.
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(h) Number
of Warrant Shares. Simultaneously with any adjustment to the Exercise Price pursuant to this Section 4, the number of Warrant
Shares that may be purchased upon exercise of this Warrant shall be increased or decreased proportionately so that after such adjustment
the aggregate Exercise Price payable hereunder for the adjusted number of Warrant Shares shall be the same as the aggregate Exercise
Price in effect immediately prior to such adjustment (without regard to any limitations on exercise contained herein).
(i)
Notice to Holder.
(i) Adjustment
to Exercise Price. Whenever the Exercise Price is adjusted pursuant to any provision of this Section 4, the Company shall
promptly deliver to the Holder by facsimile or email a notice setting forth the Exercise Price after such adjustment and any resulting
adjustment to the number of Warrant Shares and setting forth a brief statement of the facts requiring such adjustment.
(ii) Notice
to Allow Exercise by Holder. If (A) the Company shall declare a dividend (or any other distribution in whatever form) on the Common
Stock, (B) the Company shall declare a special nonrecurring cash dividend on or a redemption of the Common Stock, (C) the Company shall
authorize the granting to all holders of the Common Stock rights or warrants to subscribe for or purchase any shares of capital stock
of any class or of any rights, (D) the approval of any stockholders of the Company shall be required in connection with any reclassification
of the Common Stock, any consolidation or merger to which the Company (or any of its subsidiaries) is a party, any sale or transfer of
all or substantially all of its assets, or any compulsory share exchange whereby the Common Stock is converted into other securities,
cash or property, or (E) the Company shall authorize the voluntary or involuntary dissolution, liquidation or winding up of the affairs
of the Company, then, in each case, the Company shall cause to be delivered by facsimile or email to the Holder at its last facsimile
number or email address as it shall appear upon the records of the Company, at least 20 calendar days prior to the applicable record
or effective date hereinafter specified, a notice stating (x) the date on which a record is to be taken for the purpose of such dividend,
distribution, redemption, rights or warrants, or if a record is not to be taken, the date as of which the holders of the Common Stock
of record to be entitled to such dividend, distributions, redemption, rights or warrants are to be determined or (y) the date on which
such reclassification, consolidation, merger, sale, transfer or share exchange is expected to become effective or close, and the date
as of which it is expected that holders of the Common Stock of record shall be entitled to exchange their shares of the Common Stock
for securities, cash or other property deliverable upon such reclassification, consolidation, merger, sale, transfer or share exchange;
provided, that, the failure to deliver such notice or any defect therein or in the delivery thereof shall not affect the validity of
the corporate action required to be specified in such notice. The Holder shall remain entitled to exercise this Warrant during the period
commencing on the date of such notice to the effective date of the event triggering such notice except as may otherwise be expressly
set forth herein.
5. Stockholder
Agreements. The Warrant Shares issuable upon exercise of this Warrant are and shall be subject to, and have the benefit of, that
certain Amended and Restated Right of First Refusal and Co-Sale Agreement dated as of October 31, 2024, that certain Amended and Restated
Investors’ Rights Agreement dated as of October 31, 2024 and that certain Amended and Restated Voting Agreement dated as of October
31, 2024 (and each as amended, and as may be further amended or restated from time to time, collectively, the “Stockholder
Agreements”) and the Holder shall be required, for so long as the Holder holds any Warrant Shares, to become and remain
a party to the Stockholder Agreements.
6. Transfer
of Warrant. The terms and conditions of this Warrant shall inure to the benefit of and be binding upon the respective successors
and assigns of the Company and the Holder. Notwithstanding the foregoing, the Holder may not assign, pledge, or otherwise transfer this
Warrant without the prior written consent of the Company; provided, however, that if Holder is a partnership, corporation,
trust, joint venture, unincorporated organization or other entity it may transfer its rights under this Warrant to an affiliate (including
any other entity wholly owned and/or controlled by the Holder’s ultimate beneficial owner or any of such person’s immediate
family members) or to its members, stockholders, partners and/or equityholders without the prior written consent of the Company. Subject
to the transfer conditions referred to in the legend endorsed hereon, this Warrant and all rights hereunder shall be transferable, in
whole or in part, by the Holder without charge to the Holder, upon surrender of this Warrant to the Company at its then principal executive
offices with a properly completed and duly executed Assignment in the form attached hereto as Exhibit C. Upon such compliance,
surrender, and delivery and, if required, such payment, the Company shall execute and deliver a new Warrant or Warrants in the name of
the assignee or assignees and in the denominations specified in such instrument of assignment, and shall issue to the assignor a new
Warrant evidencing the portion of this Warrant, if any, not so assigned and this Warrant shall promptly be cancelled.
7. Holder
Not Deemed a Stockholder; Limitations on Liability. Prior to the issuance to the Holder of the Warrant Shares to which the Holder
is then entitled to receive upon the due exercise of this Warrant, the Holder shall not be entitled to vote or receive dividends or be
deemed the holder of shares of the Company for any purpose, nor shall anything contained in this Warrant be construed to confer upon
the Holder, as such, any of the rights of a member of the Company or any right to vote, give, or withhold consent to any action (whether
any reorganization, issue of shares, reclassification of shares, consolidation, merger, conveyance, or otherwise), receive notice of
meetings, receive dividends or subscription rights, or otherwise. In addition, nothing contained in this Warrant shall be construed as
imposing any liabilities on the Holder to purchase any securities (upon exercise of this Warrant or otherwise) or as a stockholder of
the Company, whether such liabilities are asserted by the Company or by creditors of the Company. Notwithstanding this Section 7,
the Company shall provide the Holder with copies of the same notices and other information given to the members of the Company generally,
contemporaneously with the giving thereof to the members.
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8.
Replacement on Loss; Division and Combination.
(a) Replacement
of Warrant on Loss. Upon receipt of evidence reasonably satisfactory to the Company of the loss, theft, destruction, or mutilation
of this Warrant and upon delivery of an indemnity reasonably satisfactory to it (it being understood that a written indemnification agreement
or affidavit of loss of the Holder shall be a sufficient indemnity) and, in case of mutilation, upon surrender of such Warrant for cancellation
to the Company, the Company at its own expense shall execute and deliver to the Holder, in lieu hereof, a new Warrant of like tenor and
exercisable for an equivalent number of Warrant Shares as the Warrant so lost, stolen, mutilated, or destroyed; provided, that,
in the case of mutilation, no indemnity shall be required if this Warrant in identifiable form is surrendered to the Company for cancellation.
(b) Division
and Combination of Warrant. Subject to compliance with the applicable provisions of this Warrant, this Warrant may be divided
or, following any such division of this Warrant, subsequently combined with other Warrants, upon the surrender of this Warrant or Warrants
to the Company at its then principal executive offices, together with a written notice specifying the names and denominations in which
new Warrants are to be issued, signed by the respective Holders or their agents or attorneys. Subject to compliance with the applicable
provisions of this Warrant and the Company Agreement as to any transfer or assignment which may be involved in such division or combination,
the Company shall at its own expense execute and deliver a new Warrant or Warrants in exchange for the Warrant or Warrants so surrendered
in accordance with such notice. Such new Warrant or Warrants shall be of like tenor to the surrendered Warrant or Warrants and shall
be exercisable in the aggregate for an equivalent number of Warrant Shares as the Warrant or Warrants so surrendered in accordance with
such notice.
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9. No
Impairment. The Company shall not, by amendment of its Certificate of Incorporation or Stockholders’ Agreement, or through
any reorganization, transfer of assets, consolidation, merger, dissolution, issue or sale of securities, or any other voluntary action,
avoid or seek to avoid the observance or performance of any of the terms to be observed or performed by it hereunder.
10.
Compliance with the Securities Act.
(a) Agreement
to Comply with the Securities Act; Legend. The Holder, by acceptance of this Warrant, agrees to comply in all respects with the
provisions of this Section 10 and the restrictive legend requirements set forth on the face of this Warrant and further agrees
that such Holder shall not offer, sell, or otherwise dispose of this Warrant or any Warrant Shares to be issued upon exercise hereof
except under circumstances that will not result in a violation of the Securities Act of 1933, as amended (the “Securities Act”).
This Warrant and all Warrant Shares issued upon exercise of this Warrant (unless registered under the Securities Act) shall be stamped
or imprinted with a legend in substantially the following form:
“THIS
WARRANT AND THE SECURITIES ISSUABLE UPON EXERCISE OF THIS WARRANT HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED
(THE “ACT”), OR QUALIFIED UNDER ANY STATE OR FOREIGN SECURITIES LAWS AND MAY NOT BE OFFERED FOR SALE, SOLD, PLEDGED,
HYPOTHECATED, OR OTHERWISE TRANSFERRED OR ASSIGNED UNLESS (I) A REGISTRATION STATEMENT COVERING SUCH SHARES IS EFFECTIVE UNDER THE ACT
AND IS QUALIFIED UNDER APPLICABLE STATE AND FOREIGN LAW OR (II) THE TRANSACTION IS EXEMPT FROM THE REGISTRATION AND PROSPECTUS DELIVERY
REQUIREMENTS UNDER THE ACT AND THE QUALIFICATION REQUIREMENTS UNDER APPLICABLE STATE AND FOREIGN LAW AND, IF THE CORPORATION REQUESTS,
AN OPINION SATISFACTORY TO THE CORPORATION TO SUCH EFFECT HAS BEEN RENDERED BY COUNSEL.”
(b) Representations
of the Holder. In connection with the issuance of this Warrant, the Holder specifically represents, as of the date hereof, to the Company
by acceptance of this Warrant as follows:
(i) The
Holder is an institutional “accredited investor” (as described in Rule 501(a)(1), (2), (3) (7), (8) or (12) and (13) under
the Securities Act). The Holder is acquiring this Warrant and the Warrant Shares to be issued upon exercise hereof for investment for
its own account and not with a view towards, or for resale in connection with, the public sale or distribution of this Warrant or the
Warrant Shares, except pursuant to sales registered or exempted under the Securities Act.
(ii) The
Holder understands and acknowledges that this Warrant and the Warrant Shares to be issued upon exercise hereof are “restricted
securities” under the federal securities laws inasmuch as they are being acquired from the Company in a transaction not involving
a public offering and that, under such laws and applicable regulations, such securities may be resold without registration under the
Securities Act only in certain limited circumstances. In addition, the Holder represents that it is familiar with Rule 144 under the
Securities Act, as presently in effect, and understands the resale limitations imposed thereby and by the Securities Act.
(iii) The
Holder acknowledges that it can bear the economic and financial risk of its investment for an indefinite period, and has such knowledge
and experience in financial or business matters that it is capable of evaluating the merits and risks of the investment in the Warrant
and the Warrant Shares. The Holder has had an opportunity to ask questions and receive answers from the Company regarding the terms and
conditions of the offering of the Warrant and the business, properties, prospects, and financial condition of the Company.
11. Warrant
Register. The Company shall keep and properly maintain at its principal executive offices books for the registration of the Warrant
and any transfers thereof. The Company may deem and treat the Person in whose name the Warrant is registered on such register as the
Holder thereof for all purposes, and the Company shall not be affected by any notice to the contrary, except any assignment, division,
combination, or other transfer of the Warrant effected in accordance with the provisions of this Warrant.
11
12. Notices.
All notices, requests, consents, claims, demands, waivers, and other communications hereunder shall be in writing and shall be deemed
to have been given: (a) when delivered by hand (with written confirmation of receipt); (b) when received by the addressee if sent by
a nationally recognized overnight courier (receipt requested); (c) on the date sent by email of a PDF document (with evidence or confirmation
of transmission) if sent during normal business hours of the recipient, and on the next Business Day if sent after normal business hours
of the recipient; or (d) on the third day after the date mailed, by certified or registered mail, return receipt requested, postage prepaid.
Such communications must be sent to the respective parties at the addresses indicated below (or at such other address for a party as
shall be specified in a notice given in accordance with this Section 12). Actual notice is effective as notice in all instances.
If to the Company:.
Elroy Air, Inc
550 Eagle Ct, #440
Byron, CA 94514
Email: **********
Attention: Andrew Clare
with a copy (which will not constitute notice)
to:
DLA Piper LLP (US)
3203 Hanover St Suite 100
Palo Alto, CA 94304
Email: **********
Attention: Josh Seidenfeld, Esq.
If to the Holder:
[HOLDER ADDRESS]
Email: [EMAIL ADDRESS]
Attention: [TITLE OF OFFICER]
with a copy (which will not constitute notice
[HOLDER LAW FIRM]
to:
Email: [EMAIL ADDRESS]
Attention: [ATTORNEY NAME]
12
13. Cumulative
Remedies. Except to the extent expressly provided in Section 7 to the contrary, the rights and remedies provided in this Warrant
are cumulative and are not exclusive of, and are in addition to and not in substitution for, any other rights or remedies available at
law, in equity or otherwise. Without limiting any other provision of this Warrant or the Purchase Agreement, if the Company willfully
and knowingly fails to comply with any provision of this Warrant, which results in any material damages to the Holder, the Company shall
pay to the Holder such amounts as shall be sufficient to cover any costs and expenses including, but not limited to, reasonable attorneys’
fees, including those of appellate proceedings, incurred by the Holder in collecting any amounts due pursuant hereto or in otherwise
enforcing any of its rights, powers or remedies hereunder.
14. Equitable
Relief. Each of the Company and the Holder acknowledges that a breach or threatened breach by such party of any of its obligations
under this Warrant would give rise to irreparable harm to the other party hereto for which monetary damages would not be an adequate
remedy and hereby agrees that in the event of a breach or a threatened breach by such party of any such obligations, the other party
hereto shall, in addition to any and all other rights and remedies that may be available to it in respect of such breach, be entitled
to equitable relief, including a restraining order, an injunction, specific performance, and any other relief that may be available from
a court of competent jurisdiction.
15. Entire
Agreement. This Warrant, together with the Purchase Agreement, constitutes the sole and entire agreement of the parties to this Warrant
with respect to the subject matter contained herein, and supersedes all prior and contemporaneous understandings and agreements, both
written and oral, with respect to such subject matter. In the event of any inconsistency between the statements in the body of this Warrant
and the Purchase Agreement, the statements in the body of this Warrant shall control.
16. Successor
and Assigns. This Warrant and the rights evidenced hereby shall be binding upon and shall inure to the benefit of the parties hereto
and the successors of the Company and the successors and permitted assigns of the Holder. Such successors and/or permitted assigns of
the Holder shall be deemed to be a Holder for all purposes hereunder.
17. No
Third-Party Beneficiaries. This Warrant is for the sole benefit of the Company and the Holder and their respective successors and,
in the case of the Holder, permitted assigns and nothing herein, express or implied, is intended to or shall confer upon any other Person
any legal or equitable right, benefit, or remedy of any nature whatsoever, under or by reason of this Warrant.
18. Headings.
The headings in this Warrant are for reference only and shall not affect the interpretation of this Warrant.
19. Amendment
and Modification; Waiver. The Related Warrants, including this Warrant, may be amended with the written consent of the Required Holders,
provided, however, and notwithstanding anything in this Warrant or the Related Warrants to the contrary, no provision of the Related
Warrants, including this Warrant, shall be amended to the extent any such amendment would (i) disproportionately, materially and adversely
modify any rights of any holder of Related Warrants (as compared to the rights of the other holders of Related Warrants) or (ii) impose
any additional financial obligations or liabilities on a holder of Related Warrants, in each case, unless any such holder of a Related
Warrant shall have previously consented in writing to such amendment or voted to approve such amendment at a meeting. No consideration
shall be offered or paid to any holder of Related Warrants to amend or consent to a waiver or modification of any provision of the Related
Warrants unless the same consideration is also offered to all of the holders of Related Warrants. For clarification purposes, this provision
constitutes a separate right granted to each holder of Related Warrants by the Company and negotiated separately by each holder of Related
Warrants, and is intended for the Company to treat the holders of Related Warrants as a group and shall not in any way be construed as
the holders of Related Warrants acting in concert or as a group with respect to the purchase, disposition or voting of securities or
otherwise. No waiver by the Company or the Holder of any of the provisions hereof shall be effective unless explicitly set forth in writing
and signed by the party so waiving. No waiver by any party shall operate or be construed as a waiver in respect of any failure, breach,
or default not expressly identified by such written waiver, whether of a similar or different character, and whether occurring before
or after that waiver. No failure to exercise, or delay in exercising, any rights, remedy, power, or privilege arising from this Warrant
shall operate or be construed as a waiver thereof; nor shall any single or partial exercise of any right, remedy, power, or privilege
hereunder preclude any other or further exercise thereof or the exercise of any other right, remedy, power, or privilege.
13
20. Severability.
If any term or provision of this Warrant is invalid, illegal, or unenforceable in any jurisdiction, such invalidity, illegality, or unenforceability
shall not affect any other term or provision of this Warrant or invalidate or render unenforceable such term or provision in any other
jurisdiction.
21. Governing
Law. This Warrant, and all claims or causes of action based upon, arising out of, or related to this Warrant, shall be governed by,
and construed in accordance with, the Laws of the State of Delaware, without giving effect to principles or rules of conflict of Laws
to the extent such principles or rules would require or permit the application of Laws of another jurisdiction.
22. Submission
to Jurisdiction. Any proceeding or Legal Proceeding based upon, arising out of or related to this Warrant must be brought in the
Court of Chancery of the State of Delaware (or, to the extent such court does not have jurisdiction, in the United States District Court
for the District of Delaware and to the extent such court does not have subject matter jurisdiction, the Superior Court of the State
of Delaware), and each of the parties irrevocably (i) submits to the exclusive jurisdiction of each such court in any such proceeding
or Legal Proceeding, (ii) waives any objection it may now or hereafter have to personal jurisdiction, venue or to convenience of forum,
(iii) agrees that all claims in respect of the proceeding or Legal Proceeding shall be heard and determined only in any such court, and
(iv) agrees not to bring any proceeding or Legal Proceeding arising out of or relating to this Warrant or the transactions contemplated
hereby in any other court. Nothing herein contained shall be deemed to affect the right of any party to serve process in any manner permitted
by Law or to commence Legal Proceedings or otherwise proceed against any other party in any other jurisdiction, in each case, to enforce
judgments obtained in any Legal Proceeding, suit or proceeding brought pursuant to this Section 22.
23. WAIVER
OF JURY TRIAL. EACH PARTY ACKNOWLEDGES AND AGREES THAT ANY CONTROVERSY WHICH MAY ARISE UNDER THIS WARRANT IS LIKELY TO INVOLVE COMPLICATED
AND DIFFICULT ISSUES, AND THEREFORE EACH SUCH PARTY HEREBY IRREVOCABLY, UNCONDITIONALLY AND VOLUNTARILY WAIVES ANY RIGHT SUCH PARTY MAY
HAVE TO A TRIAL BY JURY IN RESPECT OF ANY ACTION, SUIT OR PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS WARRANT.
24. Counterparts.
This Warrant may be executed in counterparts, each of which shall be deemed an original, but all of which together shall be deemed to
be one and the same agreement. A signed copy of this Warrant delivered by facsimile, email, or other means of electronic transmission
shall be deemed to have the same legal effect as delivery of an original signed copy of this Warrant.
25. No
Strict Construction. This Warrant shall be construed without regard to any presumption or rule requiring construction or interpretation
against the party drafting an instrument or causing any instrument to be drafted.
[SIGNATURE
PAGE FOLLOWS]
14
IN
WITNESS WHEREOF, the Company has duly executed this Warrant on the Original Issue Date.
ELROY AIR, INC.
By:
Name:
Andrew
Clare
Title:
Chief
Executive Officer
[Signature
Page to Warrant for Common Stock – Elroy Air, Inc]
Accepted
and agreed,
[HOLDER
NAME]
By:
[NAME]
[TITLE]
[Signature
Page to Warrant for Common Stock – Elroy Air, Inc]
EXHIBIT
A
NOTICE
OF EXERCISE
To:
Attn:
Email:
(1)
The undersigned hereby elects to purchase______ Warrant Shares of the Company pursuant to the terms of the attached Warrant (only if
exercised in full), and tenders herewith payment of the exercise price in full, together with all applicable transfer taxes, if any.
(2)
Payment shall take the form of (check applicable box):
☐
in lawful money of the United States; or
☐
if permitted the cancellation of such number of Warrant Shares as is necessary, in accordance with the formula set forth in subsection
3(b), to exercise this Warrant with respect to the maximum number of Warrant Shares purchasable pursuant to the cashless exercise procedure
set forth in subsection 3(b).
(3) Please
issue said Warrant Shares in the name of the undersigned or in such other name as is specified below:
The
Warrant Shares shall be delivered to the following DWAC Account Number:
(4) Accredited
Investor. The undersigned is an institutional “accredited investor” (as described in Rule 501(a)(1), (2), (3) (7), (8)
or (12) and (13) under the Securities Act of 1933, as amended).
[SIGNATURE
OF HOLDER]
Name
of Investing
Entity:
Signature
of Authorized Signatory of Investing
Entity:
Name
of Authorized
Signatory::
Title
of Authorized
Signatory:
Date:
EXHIBIT
B
FORM
OF PUBCO WARRANT
EXHIBIT
C
ASSIGNMENT FORM
(To
assign the foregoing Warrant, execute this form and supply required information. Do not use this form to purchase shares.)
FOR VALUE RECEIVED, the foregoing Warrant and all rights evidenced thereby are hereby assigned to
Name:
Address:
Phone
Number:
Address:
Dated:______________
___, _______
Holder’s Signature:
Holder’s
Address:
EXHIBIT
D
FORM
OF LOCK-UP AGREEMENT
LOCK-UP
AGREEMENT
THIS
LOCK-UP AGREEMENT (this “Agreement”), dated as of [●], 2026, is made and entered into by and among Elroy
Air, Inc., a Delaware corporation (the “Company”) (formerly known as Inflection Point Acquisition Corp. VII,
a Cayman Islands exempted company, prior to its domestication as a Delaware corporation), Columbus Circle 2 Sponsor Corporation LLC,
a Delaware limited liability company (the “Sponsor”), Cohen & Company Securities, LLC (“CCM”)
and Clear Street LLC (“Clear Street”) and, the Sponsor, CCM and Clear Street, together with any Person who
hereafter becomes a party to this Agreement pursuant to Section 2 or Section 7 of this Agreement, (the “Securityholders”
and each, a “Securityholder”). Capitalized terms used but not defined herein shall have the respective meanings
ascribed to such terms in the Business Combination Agreement (as defined herein).
WHEREAS,
the Company is party to that certain Business Combination Agreement, dated as of [●], 2026 (as the same may be amended, restated,
amended and restated, supplemented or otherwise modified from time to time, the “Business Combination Agreement”),
by and among the Company, IPGX Merger Sub, Inc., a Delaware corporation and a direct wholly-owned subsidiary of the Company, and Elroy
Air, Inc., a Delaware corporation (“Legacy Elroy Air”), pursuant to which the Company and Legacy Elroy Air
consummated a business combination (the “Business Combination”);
WHEREAS,
immediately prior to the Business Combination, the Company transferred by way of continuation to and domesticated as a Delaware corporation
in accordance with Section 388 of the Delaware General Corporation Law, as amended, and the Companies Act (As Revised) of the Cayman
Islands (the “Domestication”);
WHEREAS,
prior to the Domestication the Sponsor owned, in aggregate, (i) 265,000 Purchaser Class A Ordinary Shares (the Purchaser Class A
Ordinary Shares are included in units, each unit consisting of one Purchaser Class A Ordinary Share and one-third of one warrant) and
(ii) 7,666,667 Purchaser Class B Ordinary Shares;
WHEREAS,
(i) immediately prior to the Domestication, each then issued and outstanding Purchaser Class B Ordinary Share was converted on a
one-for-one basis into a Purchaser Class A Ordinary Share (the “Sponsor Share Conversion”) and (ii) in connection
with the Domestication, (x) each then issued and outstanding Purchaser Class A Ordinary Share was converted automatically, on a one-for-one
basis, into one (1) share of common stock of the Company, par value $0.0001 per share (the “Common Stock”);
(y) each then issued and outstanding Cayman Purchaser Warrant was converted automatically into one (1) Domesticated Purchaser Warrant,
pursuant to the Warrant Agreement; and (z) each then issued and outstanding Cayman Purchaser Unit was cancelled and thereafter entitled
the holder thereof to one (1) share of Common Stock and one-third (1/3) of one Domesticated Purchaser Warrant, following which (a) the
Sponsor owns (i) 7,931,667 shares of Common Stock (“Founder Shares”), including 7,666,667 shares issued upon
conversion of the Purchaser Class B Ordinary Shares and 265,000 shares issued upon the separation and conversion of the Cayman Purchaser
Units (the “Sponsor Unit Shares”) and (ii) 83,333 Domesticated Purchaser Warrants issued upon separation and
conversion of the Cayman Purchaser Units (the “Sponsor Warrants”) and (b) CCM and Clear Street collectively
own (i) 400,000 shares issued upon the separation and conversion of the Cayman Purchaser Units (the “Underwriter Unit Shares”
and together with the Sponsor Unit Shares, the “Unit Shares”) and (ii) 133,333 Purchaser Warrants issued upon
separation and conversion of the Cayman Purchaser Units (the “Underwriter Warrants,” together with the Sponsor
Warrants, the “Warrants,” and the Founder Shares, the Unit Shares, the Warrants and the shares of Common Stock
issuable upon exercise of the Warrants (the “Warrant Shares”) collectively, the “Lock-Up Securities”);
WHEREAS,
in connection with the Business Combination, the parties hereto wish to set forth herein certain understandings between such parties
with respect to restrictions on transfer of equity interests in the Company.
2
NOW,
THEREFORE, in consideration of the foregoing and the mutual agreements contained herein, and for other good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, the parties hereto, each intending to be legally bound hereby, hereby agree
as follows:
1. Transfer
Restrictions. Subject to the exceptions set forth herein, each Securityholder agrees not to, without the prior written consent
of the board of directors of the Company, (i) sell, offer to sell, contract or agree to sell, hypothecate, pledge, grant any option
to purchase or otherwise dispose of or agree to dispose of, directly or indirectly, any Lock-Up Securities, (ii) enter into any swap
or other arrangement that transfers to another, in whole or in part, any of the economic consequences of ownership of any Lock-Up
Security or (iii) take any action in furtherance of any of the matters described in the foregoing clause (i) or (ii) (the actions
specified in clauses (i)-(iii), collectively, “Transfer”) prior to the date that is (x) with
respect to the Founder Shares, the earlier of (A) six (6) months after the consummation of the Business Combination and (B) the date
on which the Common Stock has closed at or above $12.00 per share for twenty (20) trading days during any thirty (30)-trading day
period commencing at least thirty (30) days after the consummation of the Business Combination or (y) with respect to the Unit
Shares, the Warrants, and the Warrant Shares, 30 days after the consummation of the Business Combination (such applicable period,
the “Lock-Up Period”).
2. Permitted
Transfers. The restrictions set forth in Section 1 shall not apply to:
(i) Transfers
of any securities other than the Lock-Up Securities or any other equity security of the Company
issued or issuable with respect to the Lock-Up Securities by way of a stock dividend or stock
split or in connection with a combination of shares, recapitalization, merger, consolidation,
spin-off, reorganization or similar transaction.
(ii) Transfers
to the Company’s officers or directors, any Affiliate or family member of any of the
Company’s officers or directors, any members or partners of the Sponsor or their Affiliates,
any affiliates of the Sponsor, or any employees of such Affiliates;
(iii) In
the case of an individual, Transfers to any Affiliates or family members of the Securityholder;
(iv) Transfers
to any investment funds or vehicles controlled or managed by the Securityholder or any of
its Affiliates;
(v) Transfers
by gift to a trust, the beneficiary of which is a Person to whom a Transfer would be permitted
under Section 2(iii), or to a charitable organization;
(vi) in
the case of an individual, Transfers by virtue of laws of descent and distribution upon death
of such individual;
(vii) in
the case of an individual, Transfers pursuant to a qualified domestic relations order;
(viii) in
the case of an individual, Transfers to a partnership, limited liability company or other
entity of which the Securityholder and/or the Affiliates or family members of the Securityholder
are the legal and beneficial owner of all of the outstanding equity securities or similar
interests;
(ix) Transfers
to a nominee or custodian of a Person to whom a Transfer would be permitted under Section
2(iii);
(x) by
private sales or transfers made in connection with any forward purchase agreement or similar
arrangement at prices no greater than the price at which the Lock-Up Securities were originally
purchased;
(xi) Transfers
in connection with any legal, regulatory or other order;
(xii) in
the case of an entity that is a trust, Transfers to a trustor or beneficiary of the trust
or to the estate of a beneficiary of such trust;
(xiii) in
the case of an entity, Transfers as part of a distribution to members, partners, shareholders
or equityholders of the Securityholder;
(xiv) in
the case of an entity, Transfers by virtue of the laws of the state of the entity’s
organization and the entity’s organizational documents upon dissolution of the entity;
(xv) the
exercise of stock options to purchase shares of Common Stock or the vesting of stock awards
relating to shares of Common Stock and any related Transfer of shares of Common Stock in
connection therewith (x) deemed to occur upon the “cashless” or “net”
exercise of such options or (y)
for the purpose of paying the exercise price of such options or for paying taxes due as a result of the exercise of such options,
the vesting of such options or stock awards, or as a result of the vesting of such shares of Common Stock, it being understood that
all shares of Common Stock received upon such exercise, vesting or transfer will remain subject to the restrictions of this
Agreement during the Lock-Up Period;
3
(xvi) Transfers
to the Company pursuant to any contractual arrangement in effect upon the consummation of
the Business Combination that provides for the repurchase by the Company or forfeiture of
Common Stock or other securities convertible into, or exercisable, redeemable or exchangeable
for, Common Stock in connection with the termination of the Securityholder’s service
to the Company;
(xvii) the
entry, by the Securityholder, at any time after the consummation of the Business Combination,
of any trading plan providing for the sale of shares of Common Stock by the Securityholder,
which trading plan meets the requirements of Rule 10b5-1(c) under the Exchange Act; provided,
however, that such plan does not provide for, or permit, the sale of any shares of
Common Stock during the Lock-Up Period and no public announcement or filing is voluntarily
made or required regarding such plan during the Lock-Up Period;
(xviii) Transfers
in the event of the completion of a liquidation, merger, stock exchange, reorganization or
other similar transaction that results in all of the Company’s securityholders having
the right to exchange their shares of Common Stock for cash, securities or other property;
and
(xix) Transfers
to satisfy any U.S. federal, state, or local income tax obligations of a Securityholder (or
its direct or indirect owners) arising from a change in the U.S. Internal Revenue Code of
1986, as amended (the “Code”), or the U.S. Treasury Regulations
promulgated thereunder (the “Regulations”) after the date on which
the Business Combination Agreement was executed by the parties, and such change prevents
the Business Combination from qualifying as a “reorganization” pursuant to Section
368 of the Code (and the Business Combination does not qualify for similar tax-free treatment
pursuant to any successor or other provision of the Code or Regulations taking into account
such changes), in each case solely and to the extent necessary to cover any tax liability
as a direct result of the transaction.
Provided,
however, that in the case of clauses (ii) through (xiii), as a prerequisite to such Transfer, such permitted transferee(s) must enter
into joinder to this Agreement, substantially in the form of Exhibit A hereto, in order to become a “Securityholder”
for purposes of this Agreement. For purposes of this Section 2, “immediate family” shall mean a spouse, domestic partner,
child (including by adoption), father, mother, brother or sister of the Securityholder, and lineal descendant (including by adoption)
of the Securityholder or of any of the foregoing persons.
3. Termination.
This Agreement shall terminate upon the earlier of (i) the expiration of the Common Stock Lock-Up Period, (ii) the closing of a merger,
liquidation, stock exchange, reorganization or other similar transaction after the date hereof that results in all of the public stockholders
of the Company having the right to exchange their shares of Common Stock for cash, securities or other property and (iii) the liquidation
of the Company.
4. Prohibited
Transfers. In furtherance of the foregoing, the Company, and any duly appointed transfer agent for the registration or transfer of
the securities described therein, are hereby authorized to decline to make any transfer of securities if such transfer would constitute
a violation or breach of this Agreement.
5. Amendment.
This Agreement may be amended, supplemented or modified only by execution of a written instrument signed by the Company and the Securityholders
holding a majority of the aggregate number of shares of Common Stock then held by all Securityholders as to which this Agreement has
not been terminated, executed in the same manner as this Agreement and which makes reference to this Agreement.
6. Entire
Agreement. This Agreement and the documents or instruments referred to herein embody the entire agreement and understanding of
the parties hereto in respect of the subject matter contained herein. There are no restrictions, promises, representations,
warranties, covenants or undertakings, other than those expressly set forth or referred to herein or the documents or instruments
referred to herein, which collectively supersede all prior agreements and the understandings among the parties hereto with respect
to the subject matter contained herein. Section 8 of that certain letter agreement, dated as of February 10, 2026, by and among the
Purchaser, the Sponsor and the Purchaser’s former officers and directors is hereby amended and superseded by this Agreement
and is no longer of any force or effect.
4
7. Binding
Effect; Assignment. This Agreement and all of the provisions hereof shall be binding upon and inure to the benefit of the parties
hereto and their respective successors and permitted assigns. This Agreement shall not be assigned by operation of Law or otherwise without
the prior written consent of the parties hereto, and any assignment without such consent shall be null and void; provided that
no such assignment shall relieve the assigning party of its obligations hereunder.
8. Governing
Law. This Agreement, and all claims or causes of action based upon, arising out of, or related to this Agreement or the transactions
contemplated hereby, shall be governed by, and construed in accordance with, the Laws of the State of Delaware, without giving effect
to principles or rules of conflict of Laws to the extent such principles or rules would require or permit the application of Laws of
another jurisdiction.
9. Jurisdiction.
Any Legal Proceeding based upon, arising out of or related to this Agreement or the transactions contemplated hereby must be brought
in the Court of Chancery of the State of Delaware (or, to the extent such court does not have jurisdiction, in the United States District
Court for the District of Delaware and to the extent such court does not have subject matter jurisdiction, the Superior Court of the
State of Delaware), and each of the parties irrevocably (i) submits to the exclusive jurisdiction of each such court in any such Legal
Proceeding, (ii) waives any objection it may now or hereafter have to personal jurisdiction, venue or to convenience of forum, (iii)
agrees that all claims in respect of the Legal Proceeding shall be heard and determined only in any such court, and (iv) agrees not to
bring any Legal Proceeding arising out of or relating to this Agreement or the transactions contemplated hereby in any other court. Nothing
herein contained shall be deemed to affect the right of any party to serve process in any manner permitted by Law or to commence Legal
Proceedings or otherwise proceed against any other party in any other jurisdiction, in each case, to enforce judgments obtained in any
Legal Proceeding, suit or proceeding brought pursuant to this Section 9.
10. WAIVER
OF JURY TRIAL. EACH PARTY ACKNOWLEDGES AND AGREES THAT ANY CONTROVERSY WHICH MAY ARISE UNDER THIS AGREEMENT AND THE TRANSACTIONS
CONTEMPLATED HEREBY IS LIKELY TO INVOLVE COMPLICATED AND DIFFICULT ISSUES, AND THEREFORE EACH SUCH PARTY HEREBY IRREVOCABLY, UNCONDITIONALLY
AND VOLUNTARILY WAIVES ANY RIGHT SUCH PARTY MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY ACTION, SUIT OR PROCEEDING DIRECTLY OR INDIRECTLY
ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY OF THE TRANSACTIONS CONTEMPLATED HEREBY.
11. Counterparts.
This Agreement (and any joinder to this Agreement) may be executed and delivered (including by facsimile or other electronic transmission)
in one or more counterparts, and by the different parties hereto in separate counterparts, each of which when executed shall be deemed
to be an original but all of which taken together shall constitute one and the same agreement.
12. Severability.
In case any provision in this Agreement shall be held invalid, illegal or unenforceable in a jurisdiction, such provision shall be modified
or deleted, as to the jurisdiction involved, only to the extent necessary to render the same valid, legal and enforceable, and the validity,
legality and enforceability of the remaining provisions hereof shall not in any way be affected or impaired thereby nor shall the validity,
legality or enforceability of such provision be affected thereby in any other jurisdiction. Upon such determination that any term or
other provision is invalid, illegal or incapable of being enforced, the parties will substitute for any invalid, illegal or unenforceable
provision a suitable and equitable provision that carries out, so far as may be valid, legal and enforceable, the intent and purpose
of such invalid, illegal or unenforceable provision.
13. Liability.
The liability of any Securityholder hereunder is several (and not joint). Notwithstanding any other provision of this Agreement, in no
event will any Securityholder be liable for any other Securityholder’s breach of such other Securityholder’s obligations
under this Agreement.
[Remainder
of page intentionally left blank]
5
IN
WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date first above written.
ELROY AIR, INC.
By:
Name:
Title:
Chief Executive Officer
[Signature
Page to Lock-Up Agreement]
IN
WITNESS WHEREOF, the parties hereto have duly executed this Agreement as of the date first above written.
SECURITYHOLDER:
COLUMBUS CIRCLE 2 SPONSOR CORPORATION LLC
By:
Name:
Dennis Crilly
Title:
Authorized Signatory
Name:
Gary Quin
Name:
Garrett Curran
Name:
Alberto Alsina Gonzalez
Name:
Dr. Adam Beck
Name:
Matthew Murphy
Name:
Joseph W. Pooler, Jr
Name:
Marc Spiegel
[Signature Page to Lock-Up
Agreement]
EXHIBIT
A
JOINDER
TO LOCK-UP AGREEMENT
[●],
20[●]
Reference
is made to the Lock-Up Agreement, dated as of [●], 2026, by and among Elroy Air, Inc. (the “Company”)
and the Securityholders (as defined therein) from time to time party thereto (as amended, supplemented or otherwise modified from time
to time, the “Lock-Up Agreement”). Capitalized terms used but not otherwise defined herein shall have the meanings
ascribed to such terms in the Lock-Up Agreement.
Each
of the Company and the undersigned holder of equity interests in the Company (the “New Securityholder”) agrees
that this Joinder to the Lock-Up Agreement (this “Joinder”) is being executed and delivered for good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged.
The
New Securityholder hereby agrees to and does become party to the Lock-Up Agreement as a Securityholder. This Joinder shall serve as a
counterpart signature page to the Lock-Up Agreement and by executing below, the New Securityholder is deemed to have executed the Lock-Up
Agreement with the same force and effect as if originally named a party thereto.
This
Joinder may be executed and delivered (including by facsimile or other electronic transmission) in one or more counterparts, and by the
different parties hereto in separate counterparts, each of which when executed shall be deemed to be an original but all of which taken
together shall constitute one and the same agreement.
[Remainder
of Page Intentionally Left Blank.]
IN
WITNESS WHEREOF, the undersigned have duly executed this Joinder as of the date first set forth above.
[●]
By:
Name:
Title:
NEW SECURITYHOLDER:
[●]
By:
Name:
Title:
[Signature
Page to Joinder to Lock-Up Agreement]
EX-99.1 — FORM OF PRE-FUNDED SPA (INSTITUTIONAL INVESTORS)
EX-99.1
Filename: ea029643801ex99-1.htm · Sequence: 11
Exhibit 99.1
SECURITIES PURCHASE AGREEMENT
This Securities Purchase Agreement
(this “Agreement”) is dated as of June 25, 2026 (the “Effective Date”), by and among Elroy Air,
Inc., a Delaware corporation (the “Company”), and the purchasers identified on the signature pages hereto (including
their respective successors and assigns, each a “Purchaser” and collectively, the “Purchasers”).
WHEREAS, subject to
the terms and conditions set forth in this Agreement and pursuant to Section 4(a)(2) of the Securities Act (as defined below), the Company
desires to issue and sell to the Purchasers, and the Purchasers desire to purchase from the Company, convertible promissory notes and
warrants as more fully described in this Agreement.
WHEREAS, concurrently
with the execution and delivery of this Agreement, the Company is entering into a securities purchase agreement of even date herewith
(the “Other SPA”) with certain other purchasers party thereto, pursuant to which the Company will issue and sell convertible
promissory notes and warrants on substantially the same terms and conditions as set forth herein, with such transactions being facilitated
through a placement agent and constituting part of the same financing contemplated by this Agreement.
NOW, THEREFORE, IN CONSIDERATION
of the mutual covenants contained in this Agreement, and for other good and valuable consideration the receipt and adequacy of which are
hereby acknowledged, the Company and the Purchasers, severally and not jointly, agree as follows:
Article
1
DEFINITIONS
1.1 Definitions.
In addition to the terms defined elsewhere in this Agreement, the following terms have the meanings set forth in this Section 1.1:
“Action”
means any action, suit, inquiry, notice of violation, proceeding or investigation pending or, to the knowledge of the applicable party,
threatened against or affecting the applicable party or any of its properties before or by any court, arbitrator, governmental or administrative
agency or regulatory authority (federal, state, county, local or foreign).
“Additional Information”
means the Company’s financial statements and the Company Disclosure Letter.
“Affiliate”
means any Person that, directly or indirectly through one or more intermediaries, controls or is controlled by or is under common control
with a Person, as such terms are used in and construed under Rule 405 under the Securities Act.
“Aviation Authority”
means the Federal Aviation Administration, the Department of Transportation, the National Transportation Safety Board, or any foreign
civil aviation authority or equivalent Governmental Authority having jurisdiction over the design, manufacture, certification, registration,
operation or export of aircraft, unmanned aircraft systems, or aviation products.
“BSA” means
the Bank Secrecy Act (31 U.S.C. Section 5311 et seq.), as amended by the USA PATRIOT Act of 2001 (the “PATRIOT Act”),
and its implementing regulations (collectively, the “BSA/PATRIOT Act”).
“Business Combination”
means, collectively, the transactions contemplated by the Business Combination Agreement.
“Business Combination
Agreement” means the Business Combination Agreement that the Company anticipates entering into with Columbus Circle Capital
Corp II, a special purpose acquisition company (the “SPAC”).
“Business Day”
means any day other than Saturday, Sunday or other day on which commercial banks in the City of New York are authorized or required by
law to remain closed; provided, however, that, commercial banks shall not be deemed to be authorized or required
by law to remain closed due to “stay at home,” “shelter-in-place,” “non-essential employee” or any
other similar orders or restrictions or the closure of any physical branch locations at the direction of any governmental authority so
long as the electronic funds transfer systems (including for wire transfers) of commercial banks in the City of New York generally are
open for use by customers on such day.
“Charter”
means the Amended and Restated Certificate of Incorporation of the Company, effective as of May 8, 2025, as the same may be amended, restated
or otherwise modified from time to time.
“Closing”
means the closing of the purchase and sale of the Securities pursuant to Section 2.1(a).
“Closing Date”
means the date on which Closing occurs.
“Commission”
means the United States Securities and Exchange Commission.
“Common Stock”
means the common stock, par value $0.0001 per share, of the Company.
“Consent”
means any consent, approval, waiver, authorization or Permit of, or notice to or declaration or filing with any Governmental Authority
or any other Person.
“Contracts”
means all legally binding contracts, agreements, binding arrangements, bonds, notes, indentures, mortgages, debt instruments, purchase
order, licenses (and all Company IP Licenses and other contracts, agreements or binding arrangements concerning Intellectual Property),
franchises, leases and other instruments or obligations of any kind, written or oral (including any amendments and other modifications
thereto).
“Conversion Shares”
means the shares of Common Stock issued and issuable upon conversion of the Notes in accordance with the terms thereof.
“Company Benefit
Plan” means any and all deferred compensation, executive compensation, incentive compensation, equity purchase or other equity-based
compensation plan, employment or consulting, severance or termination pay, holiday, vacation or other bonus plan or practice, hospitalization
or other medical, life or other insurance, supplemental unemployment benefits, profit sharing, pension, or retirement plan, program, agreement,
commitment or arrangement, and each other employee benefit plan, program, agreement or arrangement, including each “employee benefit
plan” as such term is defined under Section 3(3) of ERISA, maintained or contributed to or required to be contributed to by the
Company for the benefit of any employee or terminated employee of the Company.
“Company Common Stock”
means collectively, shares of (i) common stock of the Company, $0.0001 par value per share, and (ii) non-voting common stock of the Company,
$0.0001 par value per share.
“Company Convertible
Security” means each convertible promissory note, simple agreement for future equity or similar instrument or Contract issued
by the Company or entered into by the Company pursuant to which any Person has the right to convert or exchange such instrument or Contract
into equity securities of the Company (excluding the Notes, the Warrants and Company Options).
“Company Entities”
means the Company and its subsidiaries.
“Company IP”
means any and all Intellectual Property that is owned or purported to be owned (in whole or in part), licensed, used or held for use by
the Company.
“Company IP Licenses”
means any Intellectual Property licenses, sublicenses and other agreements or permissions that the Company is party to or is otherwise
authorized to use or practice any Intellectual Property under, excluding Off-the-Shelf Software and non-exclusive licenses of Intellectual
Property granted in agreements with suppliers, customers or end users in the ordinary course of business where the license is not the
primary purpose of the agreement.
2
“Company Material
Adverse Effect” means any event, state of facts, condition, change, development, circumstance, occurrence or effect (collectively,
“Events”), that (i) has had, or would reasonably be expected to have, individually or in the aggregate, a material
adverse effect on the business, assets, results of operations or financial condition of the Company Entities, taken as a whole, or (ii)
does or would reasonably be expected to, individually or in the aggregate, prevent, materially delay or materially impede the ability
of the Company Entities to consummate the transactions contemplated hereby or in any of the other Transaction Documents; provided, however,
that in no event would any of the following, alone or in combination, be deemed to constitute, or be taken into account in determining
whether there has been or will be, a “Company Material Adverse Effect”: (a) any change in applicable laws, statutes,
regulations, ordinances, rules, or Governmental Authority orders or requirements (including regulations promulgated by the Federal Aviation
Administration, airworthiness certification requirements, or unmanned aircraft systems regulations or laws, regulations, or standards
specifically applicable to autonomous aerial vehicles or cargo drone operations) or GAAP or any interpretation thereof following the date
of this Agreement, (b) any change in interest rates or economic, political, business or financial market conditions generally, (c) the
taking of any action required by this Agreement or any other Transaction Document, (d) any natural disaster (including hurricanes, storms,
tornados, flooding, earthquakes, volcanic eruptions or similar occurrences), pandemic or change in climate, (e) any acts of terrorism
or war, the outbreak or escalation of hostilities, geopolitical conditions, local, national or international political conditions, (f)
any failure of the Company Entities to meet any projections or forecasts (provided that clause (f) shall not prevent a determination that
any Event not otherwise excluded from this definition of Company Material Adverse Effect underlying such failure to meet projections or
forecasts has resulted in a Company Material Adverse Effect), (g) any Events generally applicable to the industries or markets in which
the Company Entities operate (including increases in the cost of products, supplies, materials or other goods purchased from third party
suppliers), (h) the announcement of this Agreement or any other Transaction Document and consummation of the transactions contemplated
hereby and thereby, including any termination of, reduction in or similar adverse impact (but in each case only to the extent attributable
to such announcement or consummation) on relationships, contractual or otherwise, with any landlords, customers, suppliers, distributors,
partners or employees of the Company Entities, (i) the expiration, non-renewal, or termination of commercial contracts to which any of
the Company Entities are a party, in each case occurring in the ordinary course of business or at the stated expiration date of such contract,
or (j) any action taken by, or at the request of, the Requisite Purchasers; provided, further, that any Event referred to in clauses (a),
(b), (d), (e) or (g) above may be taken into account in determining if a Company Material Adverse Effect has occurred to the extent it
has a disproportionate and adverse effect on the business, assets, results of operations or condition (financial or otherwise) of the
Company Entities, taken as a whole, relative to similarly situated companies in the industry in which the Company Entities conduct their
respective operations, but only to the extent of the incremental disproportionate effect on the Company Entities, taken as a whole, relative
to similarly situated companies in the industry in which the Company Entities conduct their respective operations.
“Company Options”
means all options to purchase shares of Company Common Stock that are outstanding as of immediately prior to the Effective Date.
“Company Party”
means the Company and its directors, officers, shareholders, members, partners, employees and agents (and any other Persons with a functionally
equivalent role of a Person holding such titles notwithstanding a lack of such title or any other title), each Person who controls the
Company (within the meaning of Section 15 of the Securities Act and Section 20 of the Exchange Act), and the directors, officers, shareholders,
agents, members, partners or employees (and any other Persons with a functionally equivalent role of a Person holding such titles notwithstanding
a lack of such title or any other title) of such controlling persons.
“Company Preferred
Stock” means, collectively, the (i) Series Seed Preferred Stock, (ii) Series Seed-1 Preferred Stock, (iii) Series Seed-2 Preferred
Stock, (iv) Series Seed-3 Preferred Stock, (v) Series A-1 Preferred Stock, (vi) Series A-2 Preferred Stock, (vii) Series AA Preferred
Stock of the Company, (viii) Series AA-1 Preferred Stock, (ix) Series AA-2 Preferred Stock, (x) Series AA-3 Preferred Stock, (xi) Series
AAA Preferred Stock of the Company, (xii) Series AAA-1 Preferred Stock, (xiii) Series A Prime Preferred Stock, (xiv) Series Seed Prime
Preferred Stock, (xv) Series A Prime Non-Voting Preferred Stock, and (xvi) Series Seed Prime Non-Voting Preferred Stock.
“Company Securities”
means, collectively, the Company Common Stock, the Company Preferred Stock, the Company Convertible Securities, the Company Options, the
Company Warrants and all other shares, warrants and other securities of the Company.
“Company Warrants”
means all warrants to purchase any shares or other equity interests of the Company other than the Warrants.
“Enforceability Exceptions”
means applicable bankruptcy, insolvency, reorganization and moratorium laws and other laws of general application affecting the enforcement
of creditors’ rights generally or by any applicable statute of limitation or by any valid defense of set-off or counterclaim, and
the fact that equitable remedies or relief (including the remedy of specific performance) are subject to the discretion of the court from
which such relief may be sought.
3
“Environmental Law”
means any Law in any way relating to (i) the protection of human health and safety (with respect to exposure to Hazardous Materials),
(ii) the environment, (iii) natural resources (including air, water vapor, surface water, groundwater, drinking water supply, surface
land, subsurface land, plant and animal life or any other natural resource), (iv) pollution, or (v) Hazardous Materials, including the
Comprehensive Environmental Response, Compensation and Liability Act, 42 USC §9601 et seq., the Resource Conservation and Recovery
Act, 42 USC §6901 et seq., the Toxic Substances Control Act, 15 USC §2601 et seq., the Federal Water Pollution Control Act,
33 USC §1251 et seq., the Clean Air Act, 42 USC §7401 et seq., the Federal Insecticide, Fungicide and Rodenticide Act, 7 USC
§136 et seq., the Occupational Safety and Health Act, 29 USC §651 et seq. (to the extent it relates to exposure to Hazardous
Materials), the Asbestos Hazard Emergency Response Act, 15 USC §2641 et seq., the Safe Drinking Water Act, 42 USC §300f et seq.,
the Oil Pollution Act of 1990, 33 USC §2701 et seq., and analogous state acts.
“Environmental Liabilities”
means, in respect of any Person, all Liabilities, obligations, responsibilities, Remedial Legal Proceedings, losses, damages, costs, and
expenses (including all reasonable fees, disbursements, and expenses of counsel, experts, and consultants and costs of investigation and
feasibility studies), fines, penalties, sanctions, and interest incurred as a result of any claim or demand by any other Person or in
response to any violation of Environmental Law, whether known or unknown, accrued or contingent, whether based in contract, tort, implied
or express warranty, strict liability, criminal or civil statute, to the extent based upon, related to, or arising under or pursuant to
any Environmental Law, Environmental Permit, Order, or Contract with any Governmental Authority or other Person, that relates to any environmental,
health or safety condition, violation of Environmental Law, or a Release or threatened Release of Hazardous Materials.
“ERISA Affiliate”
means each “person” (as defined in Section 3(9) of ERISA) which together with the Company would be deemed to be a “single
employer” within the meaning of Section 414(b), (c), (m) or (o) of the Code.
“Exchange Act”
means the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder.
“GAAP”
means generally accepted accounting principles in the U.S.
“Governmental Authority”
means any federal, state, municipal, local or other foreign or domestic governmental, quasi-governmental, or administrative body, instrumentality,
department, or agency, any court, tribunal, administrative hearing body, arbitration panel, commission, or other similar dispute-resolving
panel or body, or any government-owned entity.
“Government Official”
shall mean any individual working for or on behalf of a Governmental Authority. Examples include a foreign customs official; an inspector
from a tax, health, or environmental agency; an employee in the procurement department of a state-owned manufacturer; a journalist employed
by a state-owned media company; and a professor or researcher at a state-owned university.
“Hazardous Material”
means any waste, gas, liquid or other substance or material that is defined, listed, classified or designated as a “hazardous substance”,
“pollutant”, “contaminant”, “hazardous waste”, “regulated substance”, “hazardous
chemical”, “toxic chemical”, or “waste” (or by any similar term) under any Environmental Law, or any other
material regulated, or that could result in the imposition of Liability or responsibility, under any Environmental Law, including oil,
petroleum, petroleum products and by-products, petroleum breakdown products, asbestos, radioactive materials, polychlorinated biphenyls,
radon, mold, urea formaldehyde insulation and per- and polyfluoroalkyl substances.
“Indebtedness”
of any Person means, without duplication, (i) all indebtedness of such Person for borrowed money (including the outstanding principal
and accrued but unpaid interest), (ii) all obligations for the deferred purchase price of property or services (other than trade payables
incurred in the ordinary course of business), (iii) any other indebtedness of such Person that is evidenced by a note, bond, debenture,
credit agreement or similar instrument, (iv) all obligations of such Person under leases that should be classified as capital leases in
accordance with GAAP (other than real estate leases and any other leases that would be required to be capitalized only upon adoption of
ASC 842), (v) all obligations of such Person for the reimbursement of any obligor on any line or letter of credit, banker’s acceptance,
guarantee or similar credit transaction, in each case, that has been drawn or claimed against, (vi) all interest rate and currency swaps,
caps, collars and similar agreements or hedging devices under which payments are obligated to be made by such Person, whether periodically
or upon the happening of a contingency, (vii) all obligations secured by a Lien securing debt for borrowed money on any property of such
Person (other than Permitted Liens), (viii) any premiums, prepayment fees or other penalties, fees, costs or expenses associated with
payment of any Indebtedness of such Person and (ix) all obligation described in clauses (i) through (viii) above of any other Person which
is directly or indirectly guaranteed by such Person or which such Person has agreed (contingently or otherwise) to purchase or otherwise
acquire or in respect of which it has otherwise assured a creditor against loss.
4
“Inflection Point”
means Inflection Point Asset Management LLC and/or one or more of its Affiliates.
“Intellectual Property”
means any and all intellectual or proprietary property and all rights, title, and interest therein or thereto arising anywhere in the
world, including all United States, international and foreign: (i) patents and patent applications, patent improvements, disclosures and
inventions, (whether patentable or unpatentable and whether or not reduced to practice), including any continuations, divisions, continuations
in part, renewals, divisionals, extensions, substitutions, reexaminations, reissues or foreign counterparts of any of the foregoing; (ii)
all trade names, trade dress, trademarks, service marks, slogans, logos or internet domain name registrations, social media usernames,
handles, and any other similar identifiers of source of origin, including all goodwill associated therewith, together with all registrations
and applications relating thereto; (iii) copyrights (whether registered or unregistered), original works of authorship, copyrightable
works and subject matter, together with all registrations and applications relating thereto; (iv) all proprietary databases and data;
(v) all industrial designs and any registrations and applications therefor throughout the world; (vi) Trade Secrets, (vii) Software and
data, databases, compilations, and any other electronic data files, including any and all collections of data, whether machine readable
or otherwise; (viii) rights to sue or recover and retain damages and costs and attorneys’ fees for the past, present or future infringement,
dilution, misappropriation, or other violation of any of the foregoing anywhere in the world; (ix) any and all other intellectual or industrial
property rights protectable by applicable law in any jurisdiction; and (x) all issuances, renewals, registrations and applications of
or for any of the foregoing.
“IT Assets”
means the technology, devices, computers, hardware, Software (including firmware and middleware), systems, sites, servers, networks, workstations,
routers, hubs, circuits, switches, interfaces, websites, platforms, data communications lines, automated networks and control systems,
cloud computing arrangements, and all other information or operational technology, telecommunications, or data processing assets, facilities,
systems services, or equipment, and all data stored therein or processed thereby, which are material to the operations of the Company,
and all associated documentation, in each case, owned or leased by, licensed to, or used by the Company in the conduct of its business.
“Knowledge”
means, with respect to the Company, the actual knowledge, after reasonable inquiry, of the individuals set forth on Schedule 1.1 of the
Company Disclosure Letter.
“Law” means
any federal, state, local, municipal, foreign or other law, statute, legislation, principle of common law, ordinance, code, edict, decree,
proclamation, treaty, convention, rule, regulation, directive, requirement, writ, injunction, settlement, Order or Consent that is or
has been issued, enacted, adopted, passed, approved, promulgated, made, implemented or otherwise put into effect by or under the authority
of any Governmental Authority.
“Legal Proceeding”
means any notice of noncompliance or violation, or any claim, demand, charge, action, suit, litigation, audit, settlement, complaint,
stipulation, assessment or arbitration, or examination, or any request (including any request for information), inquiry, hearing, proceeding
or investigation, by or before any Governmental Authority.
“Liabilities”
means any and all liabilities, Indebtedness, Legal Proceedings or obligations of any nature (whether absolute, accrued, contingent or
otherwise, whether known or unknown, whether direct or indirect, whether matured or unmatured, whether due or to become due and whether
or not required to be recorded or reflected on a balance sheet under GAAP or other applicable accounting standards).
“Lien”
means any mortgage, deed of trust, pledge, security interest, attachment, right of first refusal, right of first offer, option, proxy,
voting trust, license, encumbrance, easement, covenant, lien or charge of any kind (including any conditional sale or other title retention
agreement or lease in the nature thereof), restriction (whether on voting, sale, transfer, disposition or otherwise), any subordination
arrangement in favor of another Person, or any filing or agreement to file a financing statement as debtor under the Uniform Commercial
Code or any similar Law.
5
“Losses”
means losses, liabilities, obligations, claims, damages, costs and expenses, including all judgment, amounts paid in settlements, court
costs and reasonable attorneys’ fees and costs of investigation.
“Merger”
means the merger of the Merger Sub with and into the Company, pursuant to the terms and conditions of the Business Combination Agreement.
“Merger Sub”
means IPGX Merger Sub, Inc., a Delaware corporation and a direct wholly-owned subsidiary of Columbus Circle Capital Corp II.
“Notes”
means the convertible promissory notes issued by the Company to the Purchasers at the Closing, substantially in the form of Exhibit
A hereto, bearing interest, convertible into shares of Common Stock and having the terms and conditions set forth therein and
the convertible promissory notes issued by the Company to other purchasers under the Other SPA at the Closing.
“OFAC”
means the U.S. Treasury Department’s Office of Foreign Assets Control.
“OFAC Lists”
means any sanctions lists administered by OFAC.
“Off-the-Shelf Software”
means “shrink wrap,” “click wrap,” and “off the shelf” software agreements and other agreements for
Software commercially available to the public on standard terms and conditions with an annual cost of less than $100,000 per year.
“Open Source Software”
means any code or software governed by any license meeting the Open Source Definition (as promulgated by the Open Source Initiative) or
the Free Software Definition (as promulgated by the Free Software Foundation), or any substantially similar license, including any license
approved by the Open Source Initiative or any Creative Commons License.
“Order”
means any order, decree, ruling, judgment, injunction, writ, determination, binding decision, verdict, judicial award or other action
that is or has been made, entered, rendered, or otherwise put into effect by or under the authority of any Governmental Authority.
“Organizational Documents”
means, with respect to any Person that is an entity, its certificate or articles of incorporation or formation, bylaws, operating agreement,
memorandum and articles of association or similar organizational documents, in each case, as amended.
“Owned Intellectual
Property” means any and all Intellectual Property which the Company owns (or purports to own), in whole or in part, and includes
the Company Software and all Company Registered IP.
“Permits”
means all federal, state, local or foreign or other third-party permits, grants, easements, consents, approvals, authorizations, exemptions,
licenses, franchises, concessions, ratifications, permissions, clearances, confirmations, endorsements, waivers, certifications, designations,
ratings, registrations, qualifications or orders of any Governmental Authority or any other Person.
“Permitted Liens”
means (a) Liens for Taxes or assessments and similar governmental charges or levies, which either are (i) not yet due and payable or (ii)
being contested in good faith and by appropriate proceedings, and adequate reserves have been established with respect thereto in accordance
with GAAP; (b) mechanics’, materialmen’s, carriers’, workers’, repairers’ and other similar liens arising
or incurred in the ordinary course of business relating to obligations as to which there is no default on the part of the Company or the
validity of which are being contested in good faith by appropriate proceedings and for which adequate reserves have been established in
accordance with GAAP; (c) zoning, entitlement, environmental or conservation restrictions and other land use and environmental regulations
imposed by Governmental Authorities which, to the Knowledge of the Company, are not violated in any material respects; (d) non-monetary
Liens of record, so long as such matters do not materially interfere with or detract from the Company’s ability to conduct its business
at such property; (e) all matters that would be disclosed on an accurate survey of the Company’s real property; (f) Liens incurred
or deposits made in the ordinary course of business in connection with social security; (g) Liens on goods in transit incurred pursuant
to documentary letters of credit, in each case arising in the ordinary course of business; (h) Liens arising under this Agreement or any
Transaction Document; or (i) non-exclusive licenses of Owned Intellectual Property granted to customers, vendors or service providers
in the ordinary course of business.
6
“Person”
means an individual or corporation, partnership, trust, incorporated or unincorporated association, joint venture, limited liability company,
joint stock company, government (or an agency or subdivision thereof) or other entity of any kind.
“Personal Information”
means any information that identifies, relates to, or is linked or reasonably linkable to an individual and includes any “personal
information,” “personal data” or similar term as defined by Data Protection Laws.
“Personal Property”
means any machinery, equipment, tools, vehicles, furniture, leasehold improvements, office equipment, plant, parts and other tangible
personal property.
“Placement Agent”
means Barclays Capital Inc.
“Proceeding”
means an action, claim, suit, investigation or proceeding, whether commenced or threatened.
“Purchaser Party”
means with respect to each Purchaser, such Purchaser and such Purchaser’s directors, officers, shareholders, members, partners,
employees and agents (and any other Persons with a functionally equivalent role of a Person holding such titles notwithstanding a lack
of such title or any other title), each Person who controls such Purchaser (within the meaning of Section 15 of the Securities Act and
Section 20 of the Exchange Act), and the directors, officers, shareholders, agents, members, partners or employees (and any other Persons
with a functionally equivalent role of a Person holding such titles notwithstanding a lack of such title or any other title) of such controlling
persons.
“Related Person”
means any officer, director, manager, employee, trustee or beneficiary of the Company or any of its Affiliates and any immediate family
member of any of the foregoing.
“Release”
means any release, spill, emission, leaking, pumping, injection, deposit, disposal, discharge, dispersal, migrating or leaching into the
indoor or outdoor environment, or into or out of any property.
“Remedial Legal Proceeding”
means all actions to (i) clean up, remove, treat, or in any other way address any Hazardous Material, (ii) prevent the Release of any
Hazardous Material so it does not endanger or threaten to endanger public health or welfare or the indoor or outdoor environment, (iii)
perform pre-remedial studies and investigations or post-remedial monitoring and care, or (iv) correct or otherwise respond to a condition
of noncompliance with Environmental Laws.
“Requisite Purchasers”
means Purchasers holding a majority of the principal amount outstanding under the Notes issued under this Agreement and the Other SPA,
which majority must include Inflection Point to the extent it then holds any Notes.
“Securities”
means the Notes, the Warrants and the Underlying Shares.
“Securities Act”
means the Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder.
“Security Breach”
means any data breach or security incident that (i) materially impacts the confidentiality, integrity or availability of (a) the Personal
Information that is Processed by the Company, or (b) the IT Assets that are material to the operations of the Company or the Processing
of Personal Information by the Company, or (ii) is otherwise required to be notified or reported to an individual regulator or other third
party under applicable Law or pursuant to an obligation under a Contract that is legally binding on the Company.
“Short Sales”
shall include, without limitation, all “short sales” as defined in Rule 200 of Regulation SHO under the Exchange Act and all
types of direct and indirect stock pledges (other than pledges in the ordinary course of business as part of prime brokerage arrangements),
forward sale contracts, options, puts, calls, swaps and similar arrangements (including on a total return basis), and sales and other
transactions through non-U.S. broker dealers or foreign regulated brokers.
“Software”
means any and all software, firmware and computer programs and applications, including any and all source code, descriptions, schematics,
specifications, flow charts, object code, middleware, utilities, computer programs, application programming interfaces, algorithms, plugins,
libraries, subroutines, tools, drivers, microcode, scripts, batch files, instruction sets and macros, models, methodologies and other
work product used in design, plan, organize and develop any of the foregoing, in each case of the foregoing whether in source code, executable
or object code form, documentation related thereto including user manuals, user documentation, and training materials, files, records
and other work product related to any of the foregoing and all software modules, tools and databases and collections of data.
7
“Subscription Amount”
shall mean, as to each Purchaser, the aggregate amount to be paid for the Note and Warrants purchased hereunder pursuant to the terms
of this Agreement as set forth across from such Purchaser’s name on Schedule A hereto in U.S. dollars and in immediately
available funds.
“Subsidiary”
means, with respect to any Person, any company, partnership, association or other business entity of which (i) if a company, a majority
of the total voting power of shares of stock entitled (without regard to the occurrence of any contingency) to vote in the election of
directors, managers or trustees thereof is at the time owned or controlled, directly or indirectly, by that Person or one or more of the
other Subsidiaries of that Person or a combination thereof, or (ii) if a partnership, association or other business entity, a majority
of the partnership or other similar ownership interests thereof is at the time owned or controlled, directly or indirectly, by any Person
or one or more Subsidiaries of that Person or a combination thereof. For purposes hereof, a Person or Persons will be deemed to have a
majority ownership interest in a partnership, association or other business entity if such Person or Persons will be allocated a majority
of partnership, association or other business entity gains or losses or will be or control the managing director, managing member, general
partner or other managing Person of such partnership, association or other business entity. A Subsidiary of a Person will also include
any variable interest entity which is consolidated with such Person under applicable accounting rules.
“Tax Return”
means any return, form, declaration, election, disclosure, report, claim for refund, information return or other documents (including
any related or supporting schedules, statements or information) filed or required to be filed in connection with the determination, assessment
or collection of any Taxes or the administration of any Laws or administrative requirements relating to any Taxes.
“Taxes”
means all direct or indirect federal, state, local, foreign and other net income, gross income, gross receipts, sales, use, value-added,
ad valorem, transfer, franchise, profits, license, lease, service, service use, withholding, payroll, employment, social security and
related contributions due in relation to the payment of compensation to employees, excise, severance, stamp, occupation, premium, property,
windfall profits, alternative minimum, estimated, customs, duties or other taxes, fees, assessments or charges in the nature of a tax,
together with any interest and any penalties, additions to tax or additional amounts with respect thereto imposed by a Governmental Authority.
“Transaction Documents”
means this Agreement, the Other SPA, the Notes, the Charter, the Warrants, and all exhibits and schedules thereto.
“Underlying Shares”
means the Conversion Shares and the Warrant Shares.
“U.S.”
means the United States of America.
“Warrant Shares”
means the shares of Common Stock issuable upon exercise of the Warrants.
“Warrants”
means, collectively, the Common Stock purchase warrants delivered to the Purchasers at the Closing in accordance with Section 2.2(a)(ii)
hereof, which Warrants shall be in the form of Exhibit B attached hereto and the Common Stock purchase warrants delivered
by the Company to other purchasers under the Other SPA at the Closing.
8
Article
2
PURCHASE AND SALE
2.1 Closing
and Subsequent Closings.
(a) On
the Closing Date, upon the terms and subject to the conditions set forth herein, the Company agrees to sell, and each Purchaser, severally
and not jointly, agrees to purchase, a Note in the original principal amount set forth opposite such Purchaser’s name on Schedule A
hereto, and a Warrant to purchase the number of shares of Common Stock set forth opposite such Purchaser’s name on Schedule A
hereto, for an amount equal to such Purchaser’s Subscription Amount as set forth opposite such Purchaser’s name on Schedule A
hereto. At the Closing, the Company shall deliver to the Purchaser the Notes and Warrants as determined pursuant to Section 2.1(a)
and the Company and the Purchasers, severally and not jointly, shall deliver the other items set forth in Section 2.2(b) deliverable
at the Closing. The Closing shall occur simultaneously with the execution of this Agreement (if payment of the Subscription Amount has
been received by the Company) by electronic exchange of documents and signatures or at a time and date to be agreed upon in writing by
the Company and the Requisite Purchasers.
(b) At
any time and from time to time after the Closing Date but on or prior to August 1, 2026, the Company may, without the consent of any Purchaser,
sell and issue additional Notes and Warrants to one or more additional purchasers or to existing Purchasers (each, a “Subsequent
Closing”) on the same terms and conditions as those set forth in this Agreement. Each additional purchaser participating in
a Subsequent Closing shall become a party to this Agreement as a “Purchaser” for all purposes by executing and delivering
a counterpart signature page to this Agreement (or a joinder agreement in form and substance reasonably acceptable to the Company), and
Schedule A shall be updated to reflect the Note principal amount, Subscription Amount and number of Warrant Shares applicable
to each such purchaser. Each Subsequent Closing shall be deemed a “Closing,” and the date on which each Subsequent Closing
occurs shall be deemed a “Closing Date,” for all purposes of this Agreement, and the Notes and Warrants issued at any Subsequent
Closing shall constitute “Securities” issued hereunder. The representations and warranties of the Company set forth in Article
3 and of each Purchaser set forth in Article 4 shall be made as of the date of each applicable Subsequent Closing, and the
deliveries set forth in Section 2.2 shall be made in connection with each Subsequent Closing. Notwithstanding anything to the contrary
herein, the aggregate Subscription Amounts for the Notes and Warrants sold and issued at all Subsequent Closings shall not exceed $13,375,000.
2.2 Deliveries.
On or prior to the Closing Date:
(a) The
Company shall have delivered or caused to be delivered to each Purchaser the following in form and substance reasonably acceptable to
the Placement Agent:
(i) A
certificate from its secretary or other executive officer, certifying as to, and attaching (A) copies of the Company’s Organizational
Documents as in effect as of the Closing Date and (B) the resolutions of the Company’s Board of Directors (the “Company
Board”) authorizing and approving the execution, delivery and performance of this Agreement and each of the other Transaction
Documents to which it is a party or by which it is bound, and the consummation of the transactions contemplated hereby and thereby.
(ii) the
Note, duly executed by the Company, in the original principal amount equal to the Subscription Amount set forth opposite such Purchaser’s
name on Schedule A hereto;
(iii) a
Warrant registered in the name of the Purchaser to purchase up to a number of shares of Common Stock set forth opposite such Purchaser’s
name on Schedule A hereto; and
(iv) wire
transfer instructions for the Company.
(b) Each
Purchaser, severally and not jointly, shall deliver or cause to be delivered to the Company the following:
(i) such
Purchaser’s counter-signature to the Note described in Section 2.2(a)(ii); and
(ii) such
Purchaser’s Subscription Amount.
9
Article
3
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
Except as set forth in the
disclosure letter dated as of the date of this Agreement delivered by the Company to the Purchasers (the “Company Disclosure
Letter”) prior to or in connection with the execution and delivery of this Agreement or as are disclosed in the Company Financials,
the Company hereby represents and warrants to the Purchasers, as of the date hereof and as of the Closing, as follows:
3.1 Existence;
Authorization; Valid Issuance; No Conflicts or Filings; No Disqualifying Events.
(a) The
Company (i) is validly existing and in good standing under the laws of the State of Delaware, (ii) has the requisite power and authority
to own, lease and operate its properties, to carry on its business as it is now being conducted and to enter into and perform its obligations
under this Agreement and the other Transaction Documents, and (iii) is duly licensed or qualified to conduct its business and, if applicable,
is in good standing under the laws of each jurisdiction (other than the State of Delaware) in which the conduct of its business or the
ownership of its properties or assets requires such license or qualification, except, with respect to the foregoing clause (iii),
where the failure to be in good standing would not reasonably be expected to have a Company Material Adverse Effect.
(b) Each
Transaction Document to which the Company is a party has been duly authorized, executed and delivered by the Company, and assuming the
due authorization, execution and delivery of the same by the Purchasers, each Transaction Document to which the Company is a party shall
constitute the valid and legally binding obligation of the Company, enforceable against the Company in accordance with its terms, except
as such enforceability may be limited by bankruptcy, insolvency, reorganization, moratorium and similar laws affecting creditors generally
and by the availability of equitable remedies.
(c) As
of the Closing Date, the Securities will be duly authorized and, when issued, paid for and delivered in accordance with the applicable
Transaction Documents, will constitute the valid and legally binding obligations of the Company, enforceable against the Company in accordance
with their respective terms, free and clear of all liens or other restrictions (other than those arising under the Transaction Documents,
the Organizational Documents of the Company or applicable securities laws), and will not have been issued in violation of any preemptive
or similar rights created under the Company’s Organizational Documents or the laws of its jurisdiction of the state of Delaware.
As of the applicable date, the shares of Preferred Stock and/or Common Stock issuable upon conversion of the Notes and exercise of the
Warrants will be duly authorized and, when issued, paid for and delivered in accordance with the applicable Transaction Documents, will
be validly issued, fully paid and non-assessable, free and clear of all liens or other restrictions (other than those arising under the
Transaction Documents, the Organizational Documents of the Company or applicable securities laws), and will not have been issued in violation
of any preemptive or similar rights created under the Company’s Organizational Documents or the laws of its jurisdiction of incorporation.
As of the applicable date, the shares of Common Stock issuable upon conversion of any shares of Preferred Stock issuable upon conversion
of the Notes will be duly authorized and, when issued, paid for and delivered in accordance with the applicable Transaction Documents,
will be validly issued, fully paid and non-assessable, free and clear of all liens or other restrictions (other than those arising under
the Transaction Documents, the Organizational Documents of the Company or applicable securities laws), and will not have been issued in
violation of any preemptive or similar rights created under the Company’s Organizational Documents or the laws of its jurisdiction
of incorporation.
(d) Assuming
the accuracy of the representations and warranties of the Purchasers set forth in Article 4 of this Agreement, the execution and
delivery of this Agreement and the other Transaction Documents, the issuance and sale of the Securities hereunder, the compliance by the
Company with all of the provisions hereof and thereof and the consummation of the transactions contemplated herein and therein will not
conflict with or result in a breach or violation of any of the terms or provisions of, or constitute a default under, or result in the
creation or imposition of any lien, charge or encumbrance upon any of the property or assets of the Company pursuant to the terms of (i)
any indenture, mortgage, deed of trust, loan agreement, lease, license or instrument to which the Company is a party or by which the Company
is bound or to which any of the property or assets of the Company is subject, (ii) the Organizational Documents of the Company, or (iii)
any statute or any judgment, order, rule or regulation of any court or governmental agency or body, domestic or foreign, having jurisdiction
over the Company or any of its properties that, in the case of clauses (i) and (iii), would reasonably be expected to have
a Company Material Adverse Effect.
(e) Assuming
the accuracy of the representations and warranties of the Purchasers set forth in Article 4 of this Agreement, the Company is not
required to obtain any consent, waiver, authorization or order of, give any notice to, or make any filing or registration with, any court
or other federal, state, local or other governmental authority, self-regulatory organization or other person in connection with the execution,
delivery and performance of this Agreement or the other Transaction Documents (including, without limitation, the issuance of the Securities),
other than (i) filings required by (x) applicable state securities laws and (y) federal antitrust laws and (ii) those filings, the failure
of which to obtain would not have a Company Material Adverse Effect.
10
(f) Except
for such matters as have not had and would not have a Company Material Adverse Effect, there is no (i) Action, Proceeding or arbitration
before a governmental authority or arbitrator pending, or, to the knowledge of the Company, threatened in writing against the Company
or (ii) judgment, decree, injunction, ruling or order of any governmental authority or arbitrator outstanding against the Company.
(g) Assuming
the accuracy of the Purchasers’ representations and warranties set forth in Article 4 of this Agreement, no registration
under the Securities Act or any state securities (or Blue Sky) laws is required for the offer and sale of the Securities by the Company
to the Purchasers.
(h) Neither
the Company nor any person acting on its behalf has engaged in any form of general solicitation or general advertising (within the meaning
of Regulation D) in connection with any offer or sale of the Securities. The Securities are not being offered in a manner involving a
public offering under, or in a distribution in violation of, the Securities Act or any state securities laws. Neither the Company nor
any person acting on the Company’s behalf has, directly or indirectly, at any time within the past six (6) months, made any offer
or sale of any security or solicitation of any offer to buy any security under circumstances that would cause the offering of the Securities
pursuant to this Agreement to be integrated with prior offerings by the Company for purposes of the Securities Act or any applicable shareholder
approval provisions. Neither the Company nor any person acting on the Company’s behalf has offered or sold any securities, or has
taken any other action, which would reasonably be expected to subject the offer, issuance or sale of the Securities, as contemplated hereby,
to the registration provisions of the Securities Act.
(i) No
“bad actor” disqualifying event described in Rule 506(d)(1)(i)-(viii) of the Securities Act (a “Disqualification
Event”) is applicable to the Company, except for a Disqualification Event as to which Rule 506(d)(2)(ii–iv) or (d)(3)
is applicable.
3.2 Capitalization.
(a) Set
forth on Section 4.03(a) of the Company Disclosure Letter is a true, correct and complete list of each record holder of Company
Securities and the number and type of Company Securities held by each such holder as of the date hereof.
(b) Prior
to giving effect to the Business Combination, all of the Company Securities are and will be owned free and clear of any Liens other than
those imposed under the Company’s Organizational Documents, applicable securities Laws, or as set forth on Section 4.03(b)(i) of
the Company Disclosure Letter. Other than the Company Securities set forth in Section 4.03(b)(ii) of the Company Disclosure Letter, the
Company does not have any other issued or outstanding common stock or any other securities. All of the issued and outstanding Company
Securities have been duly authorized and validly issued in accordance with all applicable Laws, including applicable securities Laws,
and the Company’s Organizational Documents, are fully paid and nonassessable and are not subject to, nor were they issued in violation
of, any preemptive rights, rights of first refusal or similar rights, except where such violation or failure would not reasonably be expected
to be, individually or in the aggregate, material to the Company. Except as set forth on Section 4.03(b)(iii) of the Company
Disclosure Letter or in the Company’s Organizational Documents, there are no preemptive rights or rights of first refusal or first
offer, nor are there any Contracts, commitments, arrangements or restrictions to which the Company or, to the Knowledge of the Company,
any of its security holders is a party or bound relating to any Company Securities, whether or not outstanding. Except as set forth on Section
4.03(b)(iv) of the Company Disclosure Letter or as provided for in this Agreement, there are no (1) outstanding or authorized
equity appreciation, phantom equity or similar rights with respect to the Company or (2) voting trusts, proxies, stockholder agreements
or any other agreements or understandings with respect to the voting of the Company Securities. Except as set forth in the Company’s
Organizational Documents, there are no outstanding contractual obligations of the Company to repurchase, redeem or otherwise acquire any
equity interests or securities of the Company, nor has the Company granted any registration rights to any Person with respect to its securities.
Except as disclosed in the Company Financials, the Company has not since its incorporation declared or paid any distribution in respect
of its equity interests and has not repurchased, redeemed or otherwise acquired any equity interests of the Company, and the Company Board
has not authorized any of the foregoing.
11
(c) Section
4.03(c)(i) of the Company Disclosure Letter sets forth, as of the date of this Agreement, the following information with respect
to each Company Option outstanding: (i) the name of the Company Option recipient; (ii) the number of shares of the Company subject
to such Company Option; (iii) the exercise or purchase price of such Company Option; (iv) the date on which such Company Option
was granted; (v) the vesting schedule of such Company Option; and (vi) the date on which such Company Option expires. Each Company
Option was validly granted or issued and properly approved by the Company Board (or appropriate committee thereof) and, in the case of
the Company Options, in accordance with the terms of the Company Incentive Plan or the applicable award agreement. Each Company Option
(i) was granted in compliance with all applicable Laws and all of the terms and conditions of the Company Incentive Plan or the applicable
award agreement, (ii) was not granted with an exercise price per share less than the fair market value (pursuant to Section 409A
or Section 422, as applicable, of the Code) of the underlying shares of Company Common Stock as of the date such Company Option was
granted, and (iii) has a grant date that is not earlier than the date on which the Company Board or compensation committee actually awarded
such Company Option. Section 4.03(c)(ii) of the Company Disclosure Letter sets forth the terms of any vesting acceleration rights
and any other vesting acceleration that will be applicable to any unvested Company Options. No Company Common Stock is subject to vesting
as of the date hereof. All Company Common Stock that is subject to issuance as aforesaid, upon issuance on the terms and conditions specified
in the instruments pursuant to which they are issuable, will be duly authorized, validly issued, fully paid and nonassessable. No Company
Options are “early exercisable” as of the date hereof. The Company has no outstanding commitments to grant Company Options.
(d) Section
4.03(d) of the Company Disclosure Letter sets forth, as of the date hereof, a true, correct and complete list of each holder of Company
Convertible Securities, including (i) the name of the holder, (ii) the date of issuance, (iii) the principal amount or
purchase price paid for such Company Convertible Security, and (iv) the applicable valuation cap, discount rate, or other material
economic terms. There are no side letters, amendments, waivers, or other agreements that modify the standard terms of any Company Convertible
Securities. The Company has no outstanding commitments to issue any additional Company Convertible Securities. The treatment of Company
Convertible Securities under Section 2.1(a) is permitted under applicable Laws, and the terms and conditions of
such Company Convertible Securities, or the consent of any holder thereof.
(e) Except
as provided for in this Agreement, as a result of the consummation of the Transaction, no units, warrants, options or other securities
of the Company are issuable and no rights in connection with any units, warrants, options or other securities of the Company accelerate
or otherwise become triggered (whether as to vesting, exercisability, convertibility or otherwise).
3.3 Subsidiaries.
The Company has not had and does not have any subsidiaries.
3.4 Financial
Statements.
(a) The
Company has provided to the Purchaser true, correct and complete copies of: (i) the unaudited consolidated financial statements of the
Company (including, in each case, any related notes thereto) as of and for the (x) year ended December 31, 2025 and (y) three month periods
ending March 31, 2026, each consisting of the consolidated balance sheets of the Company as of such dates and the related consolidated
income statements and statements of cash flows for the periods then ended (the “Draft Company Financials”) and (ii)
the unaudited consolidated financial statements of the Company (including, in each case, any related notes thereto) as of and for the
year ended December 31, 2024, consisting of the consolidated balance sheet of the Company as of such date and the related consolidated
income statement, changes in member equity and statement of cash flows for the fiscal year then ended, prepared in accordance with GAAP
and PCAOB (the “Unaudited Company Financials”, together with the Draft Company Financials, the “Company Financials”).
The Company Financials were derived in all material respects from the books and records of the Company, which books and records are, in
all material respects, true, correct and complete and have been maintained in all material respects in accordance with commercially reasonable
business practices. The Company Financials, when delivered, will have been prepared in all material respects, in accordance with GAAP
consistently applied throughout the periods covered thereby and present fairly in all material respects, the consolidated financial position,
results of operations, income (loss), changes in equity and cash flows of the Company as of the dates and for the periods indicated in
such Company Financials in conformity with GAAP (except in the case of the Draft Company Financials that cover a period of less than one
year for the absence of footnote disclosures and other presentation items required for GAAP and exclude year-end adjustments which will
not be material in amount) and were derived from and accurately reflect in all material respects, the books and records of the Company.
The Company has not ever been subject to the reporting requirements of Sections 13(a) and 15(d) of the Exchange Act.
12
(b) The
Company has established and maintains a system of internal controls. Such internal controls are designed to provide reasonable assurance
that (i) transactions are executed in all material respects in accordance with management’s authorization and (ii) transactions
are recorded as necessary to permit preparation of financial statements in conformity with GAAP and to maintain accountability for the
Company’s assets.
(c) The
Company has not identified and has not received written notice from an independent auditor of (x) any significant deficiency or material
weakness in the system of internal controls utilized by the Company (other than a significant deficiency or material weakness that has
been previously disclosed in writing to Purchaser and is set forth on Section 4.06(a) of the Company Disclosure Letter), (y) any material
fraud that involves the Company’s management or other employees who have a significant role in the preparation of financial statements
or the internal controls over financial reporting utilized by the Company or (z) any claim or allegation regarding any of the foregoing.
(d) There
are no outstanding loans or other extensions of credit made by the Company to any executive officer (as defined in Rule 3b-7 under the
Exchange Act) or director of the Company.
3.5 Undisclosed
Liabilities. There is no liability, debt or obligation (absolute, accrued, contingent or otherwise) of the Company of a type required
to be reflected or reserved for on a balance sheet prepared in accordance with GAAP, except for liabilities, debts and obligations: (a)
provided for in, or otherwise reflected or reserved for on the Company Financials or disclosed in the notes thereto; (b) incurred in the
ordinary course of the operation of business of the Company since the date of the most recent balance sheet included in the Company Financials;
(c) incurred in connection with the Business Combination; or (d) which would not, individually or in the aggregate, reasonably be expected
to have a Company Material Adverse Effect.
3.6 Absence
of Certain Changes. Except as set forth on Section 4.08 of the Company Disclosure Letter, and for activities conducted in connection
with this Agreement and the transactions contemplated hereby, since March 31, 2026 through the date of this Agreement, (a) the Company
has conducted its business in the ordinary course of business consistent with past practice, (b) there has not been any Company Material
Adverse Effect, and (c) the Company has not taken any action or committed or agreed to take any action that would be prohibited by Section
6.02(b) of the Business Combination Agreement (without giving effect to Section 6.02(b) of the Company Disclosure Letter) if such action
were taken on or prior to the Closing without the consent of the Purchaser.
3.7 Compliance
with Laws. Provided that this Section 3.7 shall not apply with respect to the matters covered by Section 3.23:
(a) The
Company has, during the period beginning five (5) years prior to and ending on the Closing Date, complied with, and is not currently in
violation of, any applicable Law with respect to the conduct of its business, or the ownership or operation of its business, except for
failures to comply or violations which, individually or in the aggregate, have not been and would not reasonably expected to be, material
to the Company. Except as disclosed on Section 4.09 of the Company Disclosure Letter, no written, or to the Knowledge of the Company,
oral notice of non-compliance with any applicable Law has been received that, individually or in the aggregate, would reasonably be expected
to be material to the Company. For the avoidance of doubt, compliance with aviation regulatory requirements (including requirements of
the Federal Aviation Administration, the Department of Transportation, and applicable airworthiness authorities) shall be assessed solely
with reference to the Company Aviation Authorizations listed on Section 4.26(a) of the Company Disclosure Letter, and no representation
is made hereunder with respect to aviation authorizations, exemptions, certificates or approvals not specifically listed therein.
(b) The
Company is in possession of all franchises, grants, authorizations, licenses, permits, consents, certificates, approvals and orders, or
other Consents from Governmental Authorities and/or third Persons (the “Approvals”) necessary to own, lease and operate
the properties it purports to own, operate or lease and to carry on its business as it is now being conducted and is in compliance with
all terms and conditions of such Approvals, in each case, except where the failure to have such Approvals or be in compliance therewith,
individually or in the aggregate, have not been and would not reasonably be expected to be, material to the Company. Notwithstanding the
foregoing, with respect to aviation-specific Approvals (including FAA certificates, exemptions, authorizations, and special permits issued
under 14 C.F.R. Parts 11, 21, 47, 61, 91, 107 or 137, or pursuant to 49 U.S.C. § 44807), the representation in this Section 3.7(b)
is made solely with respect to those Approvals specifically listed on Section 4.09(b) of the Company Disclosure Letter (the “Aviation
Authorizations Schedule”).
13
3.8 Government
Contracts.
(a) Section
4.10 of the Company Disclosure Letter sets forth a list of each Government Contract in existence as of the date hereof that involves aggregate
payments to the Company that are reasonably expected to be in excess of $500,000 (each, a “Material Current Government Contract”).
Each Material Current Government Contract was legally awarded to the Company. Except as would not reasonably be expected to be material
to the Company, and except for any Material Current Government Contract that is terminated or expires following the date hereof in accordance
with its terms, all Material Current Government Contracts are: (i) a legal, valid binding obligation of the Company; and (ii) in full
force and effect and enforceable against the Company, as applicable, in accordance with its terms, in each case subject to the Enforceability
Exceptions.
(b) To
the Company’s knowledge, for the period beginning three (3) years prior to and ending on the Closing Date, the Company has complied
in material respects with each Government Contract and applicable statutory and regulatory requirements (including the FAR and applicable
agency FAR supplements) with respect to each Government Contract.
(c) For
the period beginning three (3) years prior to and ending on the Closing Date, neither the U.S. Government nor any of the U.S. Government’s
prime contractors has notified the Company, either in writing or, to the Company’s Knowledge, orally that the Company has breached
a contract requirement, or violated any regulation, statute, certification, or representation with respect to each Government Contract.
(d) For
the period beginning three (3) years prior to and ending on the Closing Date, no show cause notices or cure notices have been issued against
the Company with respect to any Government Contract.
(e) Neither
the Company nor any “Principal” (as defined in FAR 52.209-5):
(i) is
presently debarred, suspended, proposed for debarment, or declared ineligible for the award of a government contract or subcontract;
(ii) has,
within the period beginning three (3) years prior to and ending on the Closing Date, been convicted of or had a civil judgment rendered
against them for commission of fraud or a criminal offense in connection with obtaining, attempting to obtain, or performing a public
(federal, state, or local) contract or subcontract, or violation of federal or state antitrust statutes relating to the submission of
offers, or commission of embezzlement, theft, forgery, bribery, falsification or destruction of records, making false statements, tax
evasion, or receiving stolen property; or
(iii) to
the Knowledge of the Company, is presently indicted for, or otherwise criminally or civilly charged with, or currently under investigation
by a governmental entity for, commission of any of the above-listed offenses.
(f) There
are no outstanding claims against the Company either by the U.S. Government or by any prime contractor or subcontractor arising under
a Government Contract.
(g) The
Company has no pending claims (including claims under the Contract Disputes Act of 1978) against the U.S. Government or against any prime
contractor arising under any Government Contract, except for routine demands for payment.
(h) For
the period beginning three (3) years prior to and ending on the Closing Date, the Company has not made a mandatory disclosure to a Governmental
Authority, an Inspector General of an agency, department or branch of the U.S. Government, or a Contracting Officer (as defined in FAR
2.101) in connection with the Company’s performance of any Government Contract under FAR Subpart 3.1003 or FAR 52.203-13, and, to
the Knowledge of the Company, no facts exist that would reasonably require such a disclosure.
14
(i) Section
4.10(i) of the Company Disclosure Letter sets forth a list of each pending Government Bid that are set aside for companies with Preferred
Bidder Status or otherwise requiring the Company to have Preferred Bidder Status as a condition of eligibility for award of a contract.
3.9 Company
Permits. The Company (and its employees who are legally required to be licensed by a Governmental Authority in order to perform
his or her duties with respect to his or her employment with the Company), holds all material Permits required to own, lease and operate
its assets and properties as presently owned, leased or operated (collectively, the “Company Permits”). The Company
has made available to the Purchaser true, correct and complete copies of all the Company Permits, all of which are listed on Section 4.11
of the Company Disclosure Letter. To the Knowledge of the Company, each Company Permit is in full force and effect and will upon its termination
or expiration will be timely renewed or reissued upon terms and conditions substantially similar to its existing terms and conditions
and there are no Legal Proceedings pending or, to the Knowledge of the Company, threatened, that seek the revocation, cancellation, limitation,
suspension, restriction, adverse modification or termination of any Company Permit. The Company has at all times operated in material
compliance with all Company Permits applicable to the Company. For the avoidance of doubt, aviation-specific permits, certificates and
authorizations are addressed exclusively in Section 3.24 (Aviation Regulatory Compliance) and the Aviation Authorizations Schedule,
and this Section 3.9 shall not be construed to require a representation with respect to any aviation-specific permit, certificate
or authorization not listed on such schedule.
3.10 Litigation.
Except as described on Section 4.12 of the Company Disclosure Letter, there is no (a) Legal Proceeding of any nature currently pending
or, to the Knowledge of the Company, threatened, against the Company or any of its properties or assets, or, to the Knowledge of the Company,
any of the directors or officers of the Company with regard to their actions as such, in which the reasonably expected damages are in
excess of $1,000,000 or which otherwise is reasonably expected to result in an Order for specific performance, an injunction or other
equitable relief; (b) to the Knowledge of the Company, there are no pending or threatened, audits, examinations or investigations by any
Governmental Authority against the Company that, individually or in the aggregate, would reasonably be expected to be material to the
Company; (c) pending or threatened in writing Legal Proceedings by the Company against any third party that, individually or in the aggregate,
would reasonably be expected to be material to the Company; (d) settlements or similar agreements that impose any material ongoing obligations
or restrictions on the Company that, individually or in the aggregate, would reasonably be expected to be material to the Company; and
(e) Orders imposed or, to the Knowledge of the Company, threatened to be imposed upon the Company or any of its properties or assets,
or, to the Company’s Knowledge, any of the directors or officers of the Company with regard to their actions as such that, individually
or in the aggregate, would reasonably be expected to be material to the Company.
3.11 Material
Contracts.
(a) Section
4.13(a) of the Company Disclosure Letter sets forth a true, correct and complete list of all Contracts described in clauses (i) through
(xx) below, to which, as of the date of this Agreement, the Company is a party or by which the Company, or any of its properties or assets
are bound or affected, excluding any Company Benefit Plan (each Contract required to be set forth on Section 4.13(a) of the Company Disclosure
Letter, a “Company Material Contract”). True, correct, complete copies of the Company Material Contracts, including
amendments thereto, have been delivered or made available to the Purchaser. The Company Material Contracts include:
(i) each
Contract that contains covenants that limit the ability of the Company (or purports to bind any Affiliate thereof) (A) to compete in any
line of business or with any Person or in any geographic area or to sell, or provide any service or product, including any non-competition
covenants, exclusivity restrictions, rights of first refusal or most-favored pricing clauses or (B) to purchase or acquire an interest
in any other Person;
(ii) each
joint venture Contract, profit-sharing agreement, partnership, limited liability company agreement with a third party or other similar
agreement or arrangement relating to the formation, creation, operation, management or control of any partnership or joint venture;
(iii) each
Contract that involves any exchange traded, over the counter or other swap, cap, floor, collar, futures contract, forward contract, option
or other derivative financial instrument or Contract, based on any commodity, security, instrument, asset, rate or index of any kind or
nature whatsoever, whether tangible or intangible, including currencies, interest rates, foreign currency and indices;
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(iv) each
Contract that is reasonably anticipated to involve the acquisition or disposition, directly or indirectly (by merger or otherwise), of
assets with an aggregate value in excess of $500,000 (other than in the ordinary course of business consistent with past practice) or
shares or other equity interests of the Company or another Person;
(v) each
Contract for the acquisition of any Person or any business division thereof or the disposition of any material assets of the Company (other
than in the ordinary course of business), in each case, whether by merger, purchase or sale of stock or assets or otherwise (other than
Contracts for the purchase or sale of inventory or supplies entered into in the ordinary course of business) occurring in the last three
(3) years and/or relating to pending or future acquisitions or dispositions, in each case, involving aggregate payments in excess of $500,000;
(vi) each
obligation to make payments in excess of $1,000,000, contingent or otherwise, arising out of the prior acquisition of the business, assets
or stock of other Persons;
(vii) each
lease, rental agreement, installment and conditional sale agreement, or other Contract that, in each case, (A) provides for the ownership
of, leasing of, title to, use of, or any leasehold or other interest in any real or personal property, and (B) involves aggregate annual
payments in excess of $100,000 for agreements related to real property and $1,000,000 for agreements related to personal property;
(viii) each
Contract that by its terms, individually or with all related Contracts, that is reasonably anticipated to call for aggregate payments
or receipts by the Company under such Contract or Contracts of at least $1,000,000 per year or $5,000,000 in the aggregate;
(ix) each
Contract with any Top Customer or Top Supplier (other than purchase orders, invoices, statements of work and non-disclosure or similar
agreements entered into in the ordinary course of business consistent with past practice that do not contain any material terms relating
to the Contract underlying the applicable Top Customer or Top Supplier relationship);
(x) each
collective bargaining (or similar) agreement or Contract between the Company on one hand, and any labor union or other body representing
employees of the Company on the other hand;
(xi) each
Contract that is reasonably anticipated to obligate the Company to provide continuing indemnification or a guarantee of obligations of
a third party after the date hereof in excess of $1,000,000;
(xii) each
Contract that obligates the Company to make any capital commitment or expenditure in excess of $1,000,000 (including pursuant to any joint
venture);
(xiii) each
Contract that relates to a material settlement entered into within three (3) years prior to the date of this Agreement or under which
the Company has outstanding obligations (other than customary confidentiality obligations) in excess of $1,000,000;
(xiv) any
Contract that provides another Person (other than any manager, director or officer of the Company) with a power of attorney to act on
behalf of the Company or to act on behalf of any manager, director or officer of the Company with respect to the Company;
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(xv) each
Contract (A) which contains any assignment or any covenant not to assert or enforce, any Intellectual Property material to the business
of the Company; (B) pursuant to which any Intellectual Property material to the business of the Company is or was developed by, with or
for the Company (other than invention assignment and confidentiality agreements with employees and contractors on standard forms made
available to Purchaser and without any material deviations or exceptions thereto (collectively, “Template Employee and Contractor
IP Assignment Agreements”)); or (C) pursuant to which the Company either (1) grants to a third Person (I) a license, immunity,
or other right in or to any Intellectual Property material to the business of the Company (other than where the non-exclusive license
of Intellectual Property is incidental and not the primary purpose of the Contract) or (II) an exclusive license, immunity, or other right
in or to any Owned Intellectual Property, or (2) is granted by a third Person a license, immunity, or other right in or to any Intellectual
Property or IT Assets material to the business of the Company, in the case of both (1) and (2) excluding (unless they otherwise qualify
as Company Material Contracts under a different subsection of this Section 3.11): (w) non-exclusive licenses of Owned Intellectual
Property granted to suppliers, customers or end users in the ordinary course of business; (x) licenses of Open Source Software; (y) Off-the-Shelf
Software; and (z) Template Employee and Contractor IP Assignment Agreements;
(xvi) each
Contract involving transactions with an Affiliate of the Company (other than employment agreements, employee confidentiality and invention
assignment agreements, equity or incentive equity documents and Organizational Documents);
(xvii) each
Contract that is a settlement, conciliation, or similar agreement with any Governmental Authority or pursuant to which the Company will
have material outstanding obligations after the date hereof, and excluding any such agreements that are releases entered into with former
employees or independent contractors in the ordinary course of business;
(xviii) each
Contract with a strategic aviation customer, operating partner, or logistics customer (including preorder agreements, memoranda of understanding,
purchase orders, and service agreements) involving committed or contingent consideration in excess of $1,000,000 or exclusive or preferential
rights to the Company’s products or services (collectively, “Aviation Customer Agreements”);
(xix) each
Contract with a manufacturer, assembler or supplier that is exclusive or involves annual expenditures in excess of $500,000 and relates
to the design, manufacture, assembly, testing or certification of the Company’s aircraft or unmanned aircraft systems, including
without limitation any exclusive manufacturing arrangement; and
(xx) each
Contract that contains a Change of Control provision (whether requiring consent, notice, or triggering termination, acceleration, or modification
rights) that would be triggered by, or is applicable to, the consummation of the Business Combination.
(b) Except
as disclosed in Section 4.13(b) of the Company Disclosure Letter, with respect to each Company Material Contract or for any Company Material
Contract that is terminated or expires following the date hereof in accordance with its terms: (i) such Company Material Contract is valid
and binding and enforceable in all respects against the Company and, to the Knowledge of the Company, each other party thereto, and is
in full force and effect (except, in each case, as such enforcement may be limited by the Enforceability Exceptions); (ii) except as would
not reasonably be expected to be material to the Company, the consummation of the transactions contemplated by this Agreement will not
affect the validity or enforceability of any Company Material Contract; (iii) the Company is not in breach of or default under, in any
material respect, and, to the Knowledge of the Company, no event has occurred that with the passage of time or giving of notice or both
would constitute a material breach of or default under by the Company, or permit termination or acceleration by the other party thereto,
under such Company Material Contract; (iv) to the Knowledge of the Company, no other party to such Company Material Contract is in breach
or default in any material respect, and, to the Knowledge of the Company no event has occurred that with the passage of time or giving
of notice or both would constitute such a material breach or default by such other party, or permit termination or acceleration by the
Company, under such Company Material Contract; (v) the Company has not received written or, to the Knowledge of the Company, oral notice
of an intention by any party to any such Company Material Contract that provides for a continuing obligation by any party thereto to terminate
such Company Material Contract or amend the terms thereof, other than modifications in the ordinary course of business that do not adversely
affect the Company in any material respect; and (vi) the Company has not waived any material rights under any such Company Material Contract.
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3.12 Intellectual
Property.
(a) Section
4.14(a)(i) of the Company Disclosure Letter sets forth a true, accurate, and complete list of: (y) all U.S. and foreign registered
or issued Intellectual Property and applications owned or filed by the Company (“Company Registered IP”), specifying
as to each item, as applicable: (A) the nature of the item, including the title, (B) the owner of the item, (C) the jurisdictions in which
the item is issued or registered or in which an application for issuance or registration has been filed and (D) the issuance, registration
or application numbers and dates; and (z) all material unregistered Trademarks included in Owned Intellectual Property. Each item of Company
Registered IP is subsisting, and to the Knowledge of the Company, valid (or applied for) and enforceable (assuming registration where
required for enforcement). The Company owns, free and clear of all Liens (other than Permitted Liens or any Liens set out on Section
4.14(a)(ii) of the Company Disclosure Letter) all right, title, and interest in and to all Owned Intellectual Property and to the
Knowledge of the Company, has valid and enforceable rights to use, sell, license, transfer or assign, as used, sold, licensed, transferred,
or assigned in its business, all other Intellectual Property and IT Assets currently used, sold, licensed, transferred, assigned, or held
for use by the Company and none of the foregoing will be adversely impacted by (nor will require any consent, notification, waiver, or
payment or grant of additional amounts or consideration as a result of) the execution, delivery, or performance of any of this Agreement
or the consummation of the Transactions. No item of Company Registered IP that consists of a pending Patent application fails to identify
all pertinent inventors, and for each Patent and Patent application in the Company Registered IP, the Company has obtained present assignments
of inventions from each inventor. Except as set forth on Section 4.14(a)(iii) of the Company Disclosure Letter, all Company Registered
IP and other Owned Intellectual Property are owned exclusively by the Company without obligation to pay royalties, licensing fees or other
fees, or otherwise account to any third party with respect to such Company Registered IP and other Owned Intellectual Property, and the
Company has recorded assignments of all Company Registered IP.
(b) To
the Knowledge of the Company, the Company has a valid and enforceable written license or other valid and enforceable right to use all
other Company IP, including Intellectual Property that is the subject of the inbound Company IP Licenses applicable to the Company. The
inbound Company IP Licenses include all of the licenses, sublicenses and other agreements or permissions currently used by Company or
otherwise material to operate the business of Company as presently conducted. The Company has performed all obligations imposed on it
in the Company IP Licenses, has made all payments required to date, and the Company is not, nor, to the Knowledge of the Company, is any
other party thereto, in breach or default thereunder, nor has any event occurred that with notice or lapse of time or both would constitute
a default thereunder. The continued use by the Company of the Intellectual Property that is the subject of any Company IP License in the
same manner that it is currently being used is not restricted by any applicable license of the Company. The Company is not party to any
Contract that requires the Company to assign to any Person any or all of its rights in any Intellectual Property developed by the Company
under such Contract.
(c) No
Legal Proceeding has been made in the last six (6) years or is pending or, to the Company’s Knowledge, threatened against the Company
that challenges the validity, enforceability, ownership, or right to use, sell, license or sublicense, or that otherwise relates to, any
Owned Intellectual Property, nor, to the Knowledge of the Company, is there any reasonable basis for any such Legal Proceeding. The Company
has not received any written or, to the Knowledge of the Company, oral notice or claim asserting that any infringement, misappropriation,
violation, dilution or unauthorized use of the Intellectual Property of any other Person is or may be occurring or has or may have occurred,
as a consequence of the business activities of the Company, nor to the Knowledge of the Company, is there a reasonable basis therefor.
There are no Orders to which the Company is a party or is otherwise bound that (i) restrict the rights of the Company to use, transfer,
license or enforce any Intellectual Property owned by the Company, (ii) restrict the conduct of the business of the Company in order to
accommodate a third Person’s Intellectual Property, or (iii) other than the outbound Company IP Licenses, grant any third Person
any right with respect to any Intellectual Property owned by the Company. The Company is not, nor is the Company’s ownership, use
or license of any Owned Intellectual Property, nor the Company’s operation of its business (including its products and services)
currently infringing, or has, in the past, infringed, misappropriated or violated any Intellectual Property of any other Person. To the
Company’s Knowledge, no third party is currently, or in the past six (6) years has infringed upon, misappropriated or otherwise
violated any Owned Intellectual Property.
(d) No
current or former officers, employees, independent contractors, or other third parties employed or engaged by the Company has any ownership
interest in any material Owned Intellectual Property and no Person has claimed or asserted in writing any ownership interest or other
rights in or to any Owned Intellectual Property. Except where failure to comply has not been and would not be, individually or in the
aggregate, material, there has been no violation of the Company’s policies or practices related to protection of Company IP or any
confidentiality or nondisclosure Contract relating to the Owned Intellectual Property. To the Company’s Knowledge, none of the employees
of the Company is obligated under any Contract, or subject to any Order, that would materially interfere with the use of such employee’s
reasonable efforts to promote the interests of the Company, or that would conflict with the business of the Company as presently conducted.
The Company has taken commercially reasonable efforts and security measures in order to maintain, preserve and protect all material Owned
Intellectual Property, including to protect the secrecy, confidentiality and value of the material Company IP. All Persons who have participated
in or contributed to the creation or development of any material Owned Intellectual Property have executed written agreements pursuant
to which all of such Person’s right, title and interest in and to any such Owned Intellectual Property has been irrevocably assigned
(by a present tense assignment) to the Company (or all such right, title, and interest vested in one or more of the Company by operation
of Law, including as “work made for hire”).
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(e) The
Company is in all material respects in compliance with all licenses governing any Open Source Software that is incorporated into, used,
intermingled, or bundled with any material Company Software. No Open Source Software is or has been included, incorporated or embedded
in, linked to, combined, made available or distributed with, or used in the development, maintenance, operation, delivery or provision
of any Company Software in a manner that requires the Company to: (i) disclose, contribute, distribute, license or otherwise make available
to any Person (including the open source community) any source code to such Company Software; (ii) license any such Company Software or
other material Owned Intellectual Property for making modifications or derivative works; (iii) disclose, contribute, distribute, license
or otherwise make available to any Person any such Company Software or other material Owned Intellectual Property for no or nominal charge;
or (iv) grant a license to, or refrain from asserting or enforcing any of, its Patents (“Copyleft Terms”). No Person
other than the Company possesses, or has an actual or contingent right to access or possess, a copy in any form of any source code for
any Company Software and all such source code is in the Company’s sole possession and has been maintained as strictly confidential.
(f) No
government funding, resources or assistance, nor any facilities of a university, college, other educational institution, or similar institution,
or research center or private or commercial third parties in their respective research and development activities were used by the Company
in the development of any Owned Intellectual Property. No Governmental Authority has any (i) ownership interest or exclusive license in
or to any Owned Intellectual Property, (ii) “unlimited rights” (as defined in 48 C.F.R. § 52.227-14 and in 48 C.F.R.
§ 252.227-7013(a)) in or to any of the Company Software, (iii) “Government
purpose rights” (as defined in 48 C.F.R. § 252.227-7013(a)), or (iv) “march in rights” (pursuant to 35 U.S.C.
§ 203) in or to any Patents constituting material Owned Intellectual Property. The Company is not a member of or party to, or has
participated in any patent pool, industry standards body, trade association or other organization pursuant to the rules of which the Company
is obligated to license or offer to license any existing or future Owned Intellectual Property to any Person.
(g) The
Company is and has been in compliance in all material respects with all applicable Laws, regulations, internal and external Company policies
and Contracts relating to data privacy, data protection and cybersecurity in all relevant jurisdictions. During the period beginning three
(3) years prior to and ending on the Closing Date, to the Knowledge of the Company, (i) no Person has obtained unauthorized access to
any Personal Information or Protected Information, IT Assets or Software in the possession of the Company or in their custody, control,
or otherwise held or processed on their behalf nor has there been any loss, damage, disclosure, use, breach of security, or other compromise
of the security, confidentiality or integrity of such IT Assets, Software, information, or data. Except as set forth in Section 4.14(g)
of the Disclosure Letter, the Company has not experienced any Security Breach. No material written or oral complaint, or notice of any
claims, or investigations, relating to an improper use or disclosure of, or a breach in the security of, any Personal Information or Protected
Information, or relating to any information security-related incident has been received by the Company nor has the Company notified in
writing, or been required by applicable Laws or Contract to notify in writing, any person or entity of any Personal Information or information
security-related incident.
(h) The
Company has implemented, and has used commercially reasonable efforts to require that its third-party vendors implement, adequate policies
and commercially reasonable security (a) regarding the collection, use, disclosure, retention, processing, transfer, confidentiality,
integrity and availability of Personal Information and Protected Information, and (b) regarding the integrity and availability of the
IT Assets the Company owns, operates or outsources. To the Knowledge of the Company, the Company’s IT Assets, do not contain any
“time bombs,” “Trojan horses,” “back doors,” “trap doors,” worms, viruses, spyware, keylogger
software or other vulnerability, faults or malicious code or damaging devices designed or reasonably expected to adversely impact the
functionality of or permit unauthorized access or to disable or otherwise harm any information technology or software applications.
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(i) The
consummation of any of the Business Combination will not result in (i) any material violation of any data privacy or cybersecurity laws;
or (ii) the material breach, material modification, cancellation, termination, suspension of, or acceleration of any payments with respect
to, or release of source code because of (a) any Contract providing for the license or other use of material Intellectual Property owned
by the Company, or (b) any Company IP License.
3.13 Taxes
and Returns. Except in each case as set forth on Section 4.15 of the Company Disclosure Letter:
(a) The
Company (i) has or will have timely filed, or caused to be timely filed, all income and other material Tax Returns required to be filed
by it (taking into account all valid extensions of time to file), and all such Tax Returns are true, accurate, correct and complete in
all material respects, and (ii) has timely paid, collected, withheld or remitted, or caused to be timely paid, collected, withheld or
remitted, all income and other material Taxes required to be paid, collected, withheld or remitted by it, whether or not such Taxes are
shown as due and payable on any Tax Return. The Company has complied in all material respects with all applicable Laws relating to Tax.
(b) There
is no Legal Proceeding currently pending or, to the Knowledge of the Company, threatened against the Company by a Governmental Authority
in a jurisdiction where the Company does not file any Tax Returns or a particular type of Tax Return or pays any Tax or a particular type
of Tax that it is or may be subject to such Tax or required to file such Tax Return in that jurisdiction.
(c) There
is no written notification of any claim, assessment, audit, examination, investigation or other Legal Proceeding that is pending, or to
the Knowledge of the Company, threatened against the Company in respect of any material amount of Taxes, and the Company has not been
notified in writing of any proposed Tax claim, deficiency or assessment against it in respect of a material amount of Taxes. The Company
is not currently contesting any material Tax liability before any Governmental Authority.
(d) There
are no Liens with respect to any Taxes upon the Company’s assets, other than Permitted Liens.
(e) The
Company has complied in all material respects with its obligations under applicable Law to (i) timely and properly collect or withhold
all Taxes required to be collected or withheld by it, and (ii) timely remit such Taxes to the appropriate Governmental Authorities.
(f) The
Company has not requested or consented to any waivers or extensions of any applicable statute of limitations for the collection or assessment
of any Taxes, which waiver or extension (or request thereof) is outstanding or pending, other than as the result of automatic extensions
of time to file Tax Returns requested in the ordinary course of business.
(g) The
Company will not be required to include any material item of income in, or exclude any material item of deduction from, taxable income
for any taxable period (or portion thereof) beginning after the Closing Date, as a result of: (i) an installment sale or open transaction
disposition that occurred prior to the Closing; (ii) any change in method of accounting made prior to the Closing, including by reason
of the application of Section 481 of the Code (or any analogous provision of state, local or foreign Law) or the use of an improper method
of accounting prior to the Closing; (iii) any prepaid amounts received or deferred revenue realized or received prior to the Closing outside
the ordinary course of business; (iv) any intercompany transaction described in Treasury Regulations under Section 1502 of the Code (or
any corresponding or similar provision of state, local or foreign Law) entered into prior to the Closing; or (v) any “closing agreement”
pursuant to Section 7121 of the Code or any other similar written agreement with a Governmental Authority relating to Taxes entered into
prior to the Closing.
(h) The
Company has not participated in or been a party to, or sold, distributed or otherwise promoted, any “reportable transaction,”
as defined in Treasury Regulations Section 1.6011-4 (or any similar or corresponding provision of state, local or foreign Law).
20
(i) The
Company has not been a member of an affiliated, combined, consolidated, unitary or other group for Tax purposes. The Company has no Liability
or potential Liability for the Taxes of another Person (i) pursuant to Treasury Regulations Section 1.1502-6 (or any similar or corresponding
provision of U.S. state or local Tax Law) or under any other applicable Tax Law, (ii) as a transferee or successor, or (iii) by Contract,
indemnity or otherwise (in each case, excluding customary commercial Contracts entered into in the ordinary course of business the primary
purpose of which is not the sharing of Taxes). The Company is not a party to or bound by any Tax indemnity agreement, Tax sharing agreement
or Tax allocation agreement or similar agreement, arrangement or practice (excluding customary commercial Contracts entered into in the
ordinary course of business the primary purpose of which is not the sharing of Taxes) with respect to Taxes.
(j) The
Company has not requested, nor is it the subject of or bound by any private letter ruling, technical advice memorandum, closing agreement
or similar ruling, memorandum or written agreement with any Governmental Authority with respect to any Taxes, nor is any such request
pending or outstanding.
(k) The
Company is, and has at all times since its inception been, classified as a C corporation for U.S. federal, state and local income tax
purposes.
(l) The
Company has never had a permanent establishment, office, branch, fixed place of business or other taxable presence in any country other
than the country of its organization.
(m) The
Company has not been a party to any transaction that was purported or intended to be treated as a distribution of stock qualifying, in
whole or in part, for tax-free treatment under Section 355 of the Code (or any corresponding or similar provision of U.S. state or local
Tax Law) for the period beginning three (3) years prior to and ending on the Closing Date.
(n) The
Company has not knowingly taken any action, nor is it aware of any fact or circumstance, that would reasonably be expected to prevent
the relevant portions of the Business Combination from qualifying for their respective Intended Tax Treatments.
3.14 Real
Property.
(a) Section
4.16(a) of the Company Disclosure Letter sets forth a true, correct, and complete listing of all real property owned by the Company (the
“Company Owned Properties”), including the street address and owner thereof. The Company has made available to the
Purchaser true, correct, and complete copies of the deeds and other instruments in its possession by which the Company acquired such Company
Owned Properties, together with any title insurance policies, the most recent title reports and surveys with respect to such Company Owned
Property to the extent such items are in its possession. The Company has good and indefeasible fee simple title to each such Company Owned
Property free and clear of all Liens (other than Permitted Liens). Other than the Company Owned Properties, the Company does not own any
real property. There are no parties in possession, as tenants, licensees or, to the Knowledge of the Company, otherwise, or parties having
any option, right of first offer or first negotiation or right of first refusal or other similar rights granted to third parties to purchase
or lease the Company Owned Properties or any portion thereof or interest therein. There is no condemnation or eminent domain proceedings
pending or, to the Knowledge of the Company, threatened with respect to any of the Company Owned Properties or any portion thereof.
21
(b) Section
4.16(b) of the Company Disclosure Letter contains a true, correct and complete list of the addresses for all premises currently leased
or subleased or otherwise used or occupied (but not owned) by the Company for the operation of the business of the Company (the “Company
Leased Real Properties”), and of all current leases, lease guarantees, agreements and documents related thereto, including all
amendments, terminations and modifications thereof, waivers thereto or guarantees thereof (collectively, the “Company Real Property
Leases”), including the parties to such Company Real Property Leases. The Company has provided to the Purchaser a true and complete
copy of each of the Company Real Property Leases. The Company has a good and valid leasehold or subleasehold interest in each relevant
parcel under the Company Real Property Leases, and each Company Real Property Lease is valid and binding and enforceable in all respects
against the Company and, to the Knowledge of the Company, against each other party thereto, and is in full force and effect (except, in
each case, as such enforcement may be limited by the Enforceability Exceptions). With respect to each Company Real Property Lease, (i)
the Company is not in breach of or default under any Company Real Property Lease, (ii) no event has occurred and no circumstance exists
which, if not remedied, and whether with or without notice or the passage of time or both, would result in such a breach or default by
the Company and, (iii) to the Knowledge of the Company, no other party to such Company Real Property Lease is in breach or default, in
any respect, and no event has occurred that with the passage of time or giving of notice or both would constitute such a breach or default
by such other party, or permit termination or acceleration by the Company, under such Company Real Property Lease. The Company has not
collaterally assigned or granted any security interest in any Company Real Property Lease or any interest therein, nor has the Company
leased, licensed or otherwise granted use or occupancy rights with respect to any Company Leased Real Property or any portion thereof
to any third party. No party to any Company Real Property Lease has exercised any termination rights with respect thereto. To the Knowledge
of the Company there is no condemnation or eminent domain proceedings pending or threatened with respect to any of the Company Leased
Real Properties or any portion thereof.
3.15 Personal
Property. Each item of Personal Property which is currently owned, used or leased by the Company with a book value or fair market
value of greater than $500,000 is set forth on Section 4.17 of the Company Disclosure Letter, along with, to the extent applicable, a
list of lease agreements, lease guarantees, security agreements and other agreements related thereto, including all amendments, terminations
and modifications thereof or waivers thereto (“Company Personal Property Leases”). Except as set forth in Section 4.17
of the Company Disclosure Letter, all such items of Personal Property are in operating condition (reasonable wear and tear excepted),
as are reasonably suitable for their intended use in the business of the Company. The Company has provided to the Purchaser a true and
complete copy of each of the Company Personal Property Leases. To the Knowledge of the Company, the Company Personal Property Leases are
valid, binding and enforceable in accordance with their terms and are in full force and effect. To the Knowledge of the Company, no event
has occurred which (whether with or without notice, lapse of time or both or the happening or occurrence of any other event) would constitute
a default on the part of the Company or any other party under any of the Company Personal Property Leases, and the Company has not received
notice of any such condition.
3.16 Title
to Assets. The Company has good and marketable title to, or a valid leasehold interest in or right to use, or in the case of Company
Owned Property good and indefeasible title to, its respective material tangible and intangible assets that are necessary to conduct the
business of the Company as presently conducted, free and clear of all Liens other than (a) Permitted Liens, (b) the rights of lessors
under material leasehold interests and (c) Liens set forth on Section 4.18(a) of the Company Disclosure Letter. Except as set forth on
Section 4.18(b) of the Company Disclosure Letter, the material assets (including Intellectual Property rights and contractual rights)
of the Company constitute all of the assets, rights and properties that are necessary, in all material respects, for the operation of
the businesses of the Company in all material respects as they are now conducted. The material tangible assets or personal property of
the Company have been maintained in all material respects in accordance with generally accepted industry practice, are in good working
order and condition, except for ordinary wear and tear and as would not, individually or in the aggregate, reasonably be expected to be
material to the Company.
3.17 Employee
Matters.
(a) The
Company is not and has never been a party to any collective bargaining agreement or other Contract covering any group of employees with
any labor organization or other representative of any of the employees of the Company, and to the Knowledge of the Company, there are
not, and within the period beginning three (3) years prior to and ending on the Closing Date, there have not been, any activities or proceedings
of any labor union to organize or represent such employees. During the period beginning three (3) years prior to and ending on the Closing
Date, there has not occurred or, to the Knowledge of the Company, been threatened any strike, slow-down, picketing, work-stoppage, or
other similar labor activity with respect to any such employees. Except as set forth on Section 4.19(a) of the Company Disclosure Letter,
no current officer or other key employee of the Company, as of the date of this Agreement, has provided the Company with written notice
of his or her intention to terminate his or her employment within the one (1) year period following the Closing.
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(b) Except
as set forth on Section 4.19(b) of the Company Disclosure Letter, the Company is, and, within the period beginning three (3) years prior
to and ending on the Closing Date, has been, in material compliance with all applicable Laws respecting employment and employment practices,
terms and conditions of employment, health and safety and wages and hours, and other Laws relating to discrimination, disability, labor
relations, hours of work, payment of wages and overtime wages, pay equity, immigration, workers compensation, working conditions, employee
scheduling, family and medical leave, and employee terminations, except for failures to comply which, individually or in the aggregate,
have not been and would not reasonably be expected to be, material to the Company. The Company has not received written or, to the Knowledge
of the Company, oral notice that there is any pending Legal Proceeding involving unfair labor practices against the Company. There are
no material Legal Proceedings pending or, to the Knowledge of the Company, threatened against the Company brought by or on behalf of any
applicant for employment, any current or former employee, any Person alleging to be a current or former employee, or any Governmental
Authority, relating to any such Law or regulation, or alleging breach of any express or implied contract of employment, wrongful termination
of employment, or alleging any other discriminatory, wrongful or tortious conduct in connection with the employment relationship.
(c) Except
as set forth on Section 4.19(c) of the Company Disclosure Letter, the Company employees are employed “at will”, and the Company
has no obligation or Liability (whether or not contingent) with respect to severance payments to any such employees under the terms of
any written or, to the Knowledge of the Company, oral agreement, or commitment or any applicable Law, custom, trade or practice.
(d) For
the period beginning three (3) years prior to and ending on the Closing Date, the Company has not received written (i) notice of any unfair
labor practice charge or material complaint pending or, to the Knowledge of the Company, threatened before the National Labor Relations
Board against them, (ii) notice of any material grievances or arbitrations arising out of any collective bargaining agreement to which
the Company is a party, or (iii) notice of the intent of any Governmental Authority responsible for the enforcement of labor, employment,
wages and hours of work, child labor, or immigration to conduct an investigation with respect to or relating to them or notice that such
investigation is in progress.
(e) To
the Knowledge of the Company, no present or former employee at level of vice president or above of the Company is in material violation
of (i) any restrictive covenant or nondisclosure obligation to the Company or (ii) any restrictive covenant or nondisclosure obligation
to a former employer of any such individual relating to (A) the right of any such individual to work for or provide services to the Company
or (B) the knowledge or use of trade secrets.
(f) For
the period beginning three (3) years prior to and ending on the Closing Date, the Company has not engaged in layoffs, furloughs or employment
terminations sufficient to trigger application of the Worker Adjustment and Retraining Notification Act or any similar state or local
law (collectively, the “WARN Act”). The Company has no outstanding liabilities or obligations arising under or relating
to the WARN Act.
(g) For
the period beginning three (3) years prior to and ending on the Closing Date, (i) no allegations of sexual harassment or sexual misconduct
have been made in writing, or, to the Knowledge of the Company, threatened to be made against or involving any current or former officer,
director or other employee at the level of Vice President or above by any current or former officer, employee or individual service provider
of the Company, in each case, in their capacities as officers, employees, or directors of the Company, and (ii) the Company has not entered
into any settlement agreements resolving, in whole or in part, allegations of sexual harassment or sexual misconduct by any current or
former officer, director or other employee at the level of Vice President or above.
3.18 Benefit
Plans.
(a) Set
forth on Section 4.20(a) of the Company Disclosure Letter is a true and complete list of each material Company Benefit Plan. With respect
to each Company Benefit Plan, all contributions that are due have been made or, to the extent not yet due, are properly accrued in accordance
with GAAP on the Company Financials, in all material respects. The Company is not required to provide employee benefits pursuant to a
collective bargaining agreement or other Contract covering any group of employees, labor organization or other representative of any of
the employees.
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(b) Each
Company Benefit Plan is and has been operated, administered, maintained, and funded at all times in compliance with its terms and all
applicable Laws in each case in all material respects, including ERISA and the Code. Each Company Benefit Plan which is intended to be
“qualified” within the meaning of Section 401(a) of the Code (i) has received a favorable determination letter from the IRS
to be so qualified (or is based on a prototype plan which has received a favorable opinion letter upon which the Company is entitled to
rely) or (ii) the Company has requested an initial favorable IRS determination of qualification and/or exemption within the period permitted
by applicable Law. To the Knowledge of the Company, no event has occurred or circumstance exists which could reasonably be expected to
adversely affect the qualified status of such Company Benefit Plans or the exempt status of such trusts.
(c) With
respect to each Company Benefit Plan required to be listed on Section 4.20(a) of the Company Disclosure Letter, the Company has provided
to Purchaser accurate and complete copies, if applicable, of: (i) all Company Benefit Plan documents, service agreements and related trust
agreements or annuity Contracts (including any amendments, modifications or supplements thereto); (ii) the most recent summary plan descriptions
and material modifications thereto; (iii) the most recent Form 5500s, if applicable, and annual report, including all schedules thereto;
(iv) the most recent annual and periodic accounting of plan assets; (v) the most recent nondiscrimination testing reports; (vi) the most
recent determination letter (or opinion letter) received from the IRS, if any; (vii) the most recent actuarial valuation; and (viii) all
material communications with any Governmental Authority for the period beginning three (3) years prior to and ending on the Closing Date.
(d) With
respect to each Company Benefit Plan: (i) no Legal Proceeding is pending, or to the Knowledge of the Company, threatened (other than routine
claims for benefits arising in the ordinary course of administration and administrative appeals of denied claims); and (ii) no prohibited
transaction, as defined in Section 406 of ERISA or Section 4975 of the Code, has occurred, excluding transactions effected pursuant to
a statutory or administration exemption.
(e) Neither
the Company nor any ERISA Affiliate currently maintains, or within the preceding six (6) years has maintained or contributed to, a Company
Benefit Plan which is a “defined benefit plan” (as defined in Section 414(j) of the Code), a “multiemployer plan”
(as defined in Section 3(37) of ERISA) or a “multiple employer plan” (as described in Section 413(c) of the Code) or is otherwise
subject to Title IV of ERISA or Section 412 of the Code, and the Company has not incurred any Liability, could not otherwise have any
Liability, contingent or otherwise, under Title IV of ERISA and no condition presently exists that is expected to cause such Liability
to be incurred. The Company does not and has not ever maintained, and is not and has never been required to contribute to or otherwise
participate in, (i) a multiple employer welfare arrangement or voluntary employees’ beneficiary association as defined in Section
501(c)(9) of the Code or (ii) a “funded welfare plan” within the meaning of Section 419 of the Code.
(f) Except
as set forth on Section 4.20(f) of the Company Disclosure Letter, the consummation of the Business Combination will not, either alone
or in combination with another event, (i) entitle any current or former employee, officer or other service provider of the Company to
any severance pay or increase in severance pay or any other compensation payable by the Company, (ii) accelerate the time of payment,
funding or vesting, or increase the amount of compensation due to any such employee, officer or other individual service provider by the
Company, (iii) directly or indirectly cause the Company to transfer or set aside any assets to fund any material benefits under any Company
Benefit Plan, (iv) otherwise give rise to any material liability under any Company Benefit Plan, or (v) limit or restrict the right to
merge, materially amend, terminate or transfer the assets of any Company Benefit Plan on or following the Closing. The consummation of
the transactions contemplated hereby will not, either alone or in combination with another event, result in any “excess parachute
payment” under Section 280G of the Code. No Company Benefit Plan provides for a Tax gross-up, make whole or similar payment, including
with respect to the Taxes imposed under Sections 409A or 4999 of the Code.
(g) Except
as set forth on Section 4.20(g) of the Company Disclosure Letter or to the extent required by Section 4980B of the Code or similar state
Law, the Company does not provide health or welfare benefits to any former or retired employee and are not obligated to provide such benefits
to any active employee following such employee’s retirement or other termination of employment or service.
(h) Each
Company Benefit Plan can be terminated at any time without resulting in any material Liability to the Company, the Purchaser, Merger Sub
or their respective Affiliates for any additional contributions, penalties, premiums, fees, fines, excise taxes or any other charges or
liabilities, other than Liabilities with respect to participant accrued benefits through the effective date of such termination in accordance
with the terms of such plan and ordinary administration costs typically incurred in a termination event.
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(i) Except
as would not, individually or in the aggregate, reasonably be expected to be material to the Company, each Company Benefit Plan that is
subject to Section 409A of the Code has been administered in compliance, and is in documentary compliance, in all respects with the applicable
provisions of Section 409A of the Code, the regulations thereunder and other official guidance issued thereunder.
3.19 Environmental
Matters. Except as set forth in Section 4.21 of the Company Disclosure Letter:
(a) The
Company and its properties and facilities are and have, during the time that the Company has owned, operated or leased such property or
facility, been in compliance in all material respects with all applicable Environmental Laws, including obtaining, maintaining in good
standing, timely renewing and complying with all Permits required for their business and operations under any Environmental Laws (“Environmental
Permits”).
(b) No
Legal Proceeding is pending or, to the Knowledge of the Company, threatened against the Company or its assets or properties alleging a
material violation of, or material liability under, any Environmental Law or Environmental Permit, including with respect to the revocation
or termination of any Environmental Permits.
(c) None
of the Company or any of its current or, to the Knowledge of the Company, former properties, facilities or operations, are the subject
of any outstanding material Order or Contract with any Governmental Authority or other Person in respect of any (i) Environmental Law,
(ii) Remedial Legal Proceeding, or (iii) Release or threatened Release of a Hazardous Material, in each case, that would be reasonably
expected to result in a material Environmental Liability. The Company has not assumed, contractually or by operation of Law, any material
Environmental Liabilities.
(d) The
Company has not generated, manufactured, stored, treated, transported, Released, disposed of, arranged for or permitted the disposal of,
any Hazardous Material, in a manner that has given or would reasonably be expected to give rise to any material Environmental Liability.
(e) The
Company has not received written notification of any investigation of the business, operations, or currently or formerly owned, operated,
or leased property of the Company that would be reasonably expected to lead to the imposition of any material Liens or material Environmental
Liabilities and no such investigations are pending or threatened in writing.
(f) No
Person has Released any Hazardous Material at, on, or under any facility currently or to the Knowledge of the Company, formerly owned
or operated by the Company or any third-party site, in each case in a manner that would be reasonably likely to give rise to a material
Environmental Liability of the Company.
(g) The
Company has provided to the Purchaser all material, final and non-privileged written environmental reports, audits, assessments, liability
analyses, memoranda and studies, including Phase I environmental site assessments, in the possession of, or conducted by, the Company
and concerning the environmental condition of any properties or operations of the Company, Environmental Liabilities or compliance with
Environmental Laws.
3.20 Transactions
with Related Persons. Except as set forth on Section 4.22 of the Company Disclosure Letter, and except for in the case of any
employee, officer or director, of any employment Contract or Company Benefit Plans made in the ordinary course of business consistent
with past practice or except as set forth in the Company Financials, the Company is not a party to any transaction or Contract with any
(a) present or former executive officer or director of the Company, (b) beneficial owner (within the meaning of Section 13(d) of the Exchange
Act) of 5% or more of the capital stock or equity interests of the Company or (c) any Affiliate, “associate” or any member
of the “immediate family” (as such terms are respectively defined in Rules 12b-2 and 16a-1 of the Exchange Act) of any of
the foregoing. Except as set forth in the Company Financials or as set forth on Section 4.22 of the Company Disclosure Letter: (x) to
the Knowledge of the Company, no Related Person or any Affiliate of a Related Person has, directly or indirectly, a material economic
interest in any Contract with the Company (other than such Contracts that relate to any such Person’s ownership of the Company Securities
or other equity interests of the Company as set forth on Section 4.03(a) of the Company Disclosure Letter or such Person’s employment
or consulting arrangements with the Company), and (y) the assets of the Company do not include any receivable or other obligation from
a Related Person, and the liabilities of the Company do not include any payable or other obligation or commitment to any Related Person.
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3.21 Insurance.
(a) Section
4.23(a) of the Company Disclosure Letter contains a list of, as of the date hereof, all material policies or binders of property, fire
and casualty, product liability, workers’ compensation, and other forms of insurance held by, or for the benefit of, the business
of the Company (by policy number, insurer, coverage period, coverage amount, annual premium and type of policy) (the “Insurance
Policies”). As of the date hereof, all premiums due and payable under all such insurance policies have been timely paid and
the Company is otherwise in material compliance with the terms of such insurance policies. Each such insurance policy (i) is legal, valid,
binding, enforceable and in full force and effect, subject, in each case to the Enforceability Exceptions and (ii) will continue to be
legal, valid, binding, enforceable, and in full force and effect immediately following the Closing. The Company has no self-insurance
or co-insurance programs. For the period beginning three (3) years prior to and ending on the Closing Date, the Company has not received
any written notice from, or on behalf of, any insurance carrier for the Insurance Policies of cancellation, termination, refusal to issue
an insurance policy or non-renewal of a policy.
(b) Section
4.23(b) of the Company Disclosure Letter identifies each individual insurance claim in excess of $1,000,000 made by the Company within
the period beginning three (3) years prior to and ending on the Closing Date on an Insurance Policy. During the period beginning three
(3) years prior to and ending on the Closing Date, the Company has not made any material claim against an Insurance Policy as to which
the insurer has finally denied coverage in its entirety.
3.22 Top
Customers and Suppliers.
(a) Section
4.24(a) of the Company Disclosure Letter lists as of the date of this Agreement, by aggregate dollar value of the Company business transaction
volume with such counterparty, as applicable, for each of (i) the twelve (12) months ended on December 31, 2025 and (ii) the twelve (12)
months ended on December 31, 2024, the three (3) largest customers of the Company (the “Top Customers”). To the Knowledge
of the Company, as of the date hereof, no such Top Customer has provided written notice to the Company (i) of its intention to cancel
or otherwise terminate, or materially reduce, its relationship with the Company, or (ii) that the Company is in material breach of the
terms of any Contract to which it is a party with such Top Customer.
(b) Section
4.24(b) of the Company Disclosure Letter lists as of the date of this Agreement, all suppliers or manufacturers of goods or services for
each of (i) the twelve (12) months ended on December 31, 2025 and (ii) the twelve (12) months ended on December 31, 2024, the suppliers
of the Company that the Company pays at least $1,000,000 per annum for each such period (the “Top Suppliers”). To the
Knowledge of the Company as of the date hereof, no such Top Supplier has provided notice to the Company (i) of its intention to cancel
or otherwise terminate, or materially reduce, its relationship with the Company, or (ii) that the Company is in material breach of the
terms of any Company Material Contract with any such Top Supplier.
(c) Except
as set forth on Section 4.24(c) of the Company Disclosure Letter, none of the Top Customers or Top Suppliers has, as of the date of this
Agreement, notified the Company in writing that it is in a material dispute with the Company or its businesses.
3.23 Certain
Business Practices.
(a) The
Company has not and, to the Knowledge of the Company, nor any of its officers or directors nor any other Persons acting on behalf of the
Company, has taken any action or refrained from taking any action that would cause the Company to be in violation of the Anti-Bribery
Laws. The Company has not and, to the Knowledge of the Company, nor has any other Person acting on behalf of the Company, taken any act
in furtherance of an offer, payment, promise to pay, authorization or ratification of the payment of any gift, money or anything of value
to a Government Official to obtain or retain business or to secure any improper advantage. To the Knowledge of the Company, none of its
officers, directors, or any of their respective Representatives acting on their behalf, for the period beginning five (5) years prior
to and ending on the Closing Date, has been subject to or conducted or initiated any internal investigation or made a voluntary, directed,
or involuntary disclosure to any Governmental Authority with respect to any alleged act or omission relating to any noncompliance with
any Anti-Bribery Laws. Neither the Company, nor any of its officers or directors, nor, to the Knowledge of the Company, any Representatives
acting on their behalf, has received any written notice, request, or citation from any Governmental Authority for any actual or potential
noncompliance with any Anti-Bribery Laws for the period beginning five (5) years prior to and ending on the Closing Date.
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(b) For
the period beginning five (5) years prior to and ending on the Closing Date, the operations of the Company are and have been conducted
at all times in material compliance with applicable International Trade Laws and Sanctions Laws, and no Legal Proceeding between the Company
and any Governmental Authority with respect to any of the foregoing is, to the Knowledge of the Company pending or threatened in writing.
(c) The
Company has not and, to the Knowledge of the Company, nor any of its directors or officers, or, to the Knowledge of the Company, any other
Representative acting on behalf of the Company is or has been for the period beginning five (5) years prior to and ending on the Closing
Date: (i) identified on any applicable sanctions-related list of designated or blocked persons (including without limitation the Specially
Designated Nationals and Blocked Persons List (“SDN List”) maintained by the U.S. Department of the Treasury’s
Office of Foreign Assets Control (“OFAC”)); (ii) located, organized, or resident in any country, region or territory
that is the subject of comprehensive territorial sanctions administered by the United States and any other jurisdiction in which the Company
operates (as of the date of this Agreement, Cuba, Iran, North Korea, and the Crimea, so-called Donetsk People’s Republic, and so-called
Luhansk People’s Republic regions of Ukraine) (each a “Sanctioned Jurisdiction”); or (iii) owned, directly or
indirectly, individually or in the aggregate, 50 percent or more or otherwise controlled by any of the foregoing.
(d) For
the period beginning five (5) years prior to and ending on the Closing Date, the Company has maintained in place and implemented risk-based
measures designed to promote compliance with Sanctions Laws.
(e) For
the period beginning five (5) years prior to and ending on the Closing Date, the Company has not directly or indirectly, been in violation
of Sanctions Laws used any funds, or loaned, contributed or otherwise made available such funds to any joint venture partner or other
Person in connection with any sales or operations in a Sanctioned Jurisdiction or for the purpose of financing the activities (i) of any
Person currently identified on any applicable sanctions-related list of designated or blocked persons maintained by OFAC, or (ii) in any
other manner that would constitute a violation of Sanctions Laws.
3.24 Aviation
Regulatory Compliance.
(a) Section
4.26(a) of the Company Disclosure Letter sets forth a true, correct, and complete list of all material aviation authorizations, certificates,
exemptions, permits, approvals, and pending applications issued by or filed with any Aviation Authority and held by or on behalf of the
Company, or otherwise required for the conduct of the Company’s business as presently conducted (collectively, the “Company
Aviation Authorizations”). The Company Aviation Authorizations include, to the extent applicable and held as of the date hereof:
type certificates and applications therefor, supplemental type certificates, production certificates, airworthiness certificates (including
special airworthiness certificates), experimental certificates, exemptions (including exemptions issued pursuant to 49 U.S.C. § 44807),
certificates of authorization, aircraft registration certificates, and any designations, delegations or approvals under the FAA’s
Organization Designation Authorization program or any successor program.
(b) To
the Knowledge of the Company, each Company Aviation Authorization is valid, in good standing and in full force and effect and is not liable
to revocation, suspension, cancellation or adverse modification for any currently existing reason. The Company has not received written,
or to the Knowledge of the Company, oral notice from any Aviation Authority of any pending or threatened revocation, suspension, limitation,
restriction or adverse modification of any Company Aviation Authorization.
(c) The
Company has filed FAA Form 8110-12 (Application for Type Certificate) with respect to the Chaparral C2 aircraft (the “Chaparral”),
which application was acknowledged by the FAA on December 5, 2022, and assigned Project Number TC20675LA-SC (the “Type Certification
Application”). As of the date hereof, no type certificate, supplemental type certificate, or production certificate has been
issued with respect to the Chaparral. The Company makes no representation as to the timing of issuance of a type certificate or any interim
milestone (including G-1 Issue Paper, accepted Project Specific Certification Plan, or established certification basis) except as may
be specifically set forth on Section 4.26(c) of the Company Disclosure Letter. As of the date hereof, the Company has submitted a draft
Project Specific Certification Plan (PSCP) to the FAA which is under negotiation but has not been formally accepted; the FAA has not issued
a G-1 Issue Paper, the certification basis has been proposed but not established, and no special conditions or equivalent level of safety
findings have been proposed by the FAA.
27
(d) The
Company is in material compliance with all conditions, limitations and requirements of each Company Aviation Authorization. The Company
is not a party to any consent order, compliance order, letter of correction, warning letter or similar enforcement correspondence with
any Aviation Authority that remains unresolved.
(e) No
Company Aviation Authorization requires any consent, approval, notification or other action by any Aviation Authority in connection with
the consummation of the Business Combination. The Parties acknowledge that, because the Company will survive the Merger as the certificate
holder and registrant, no transfer of any Company Aviation Authorization is required. To the extent that any Company Aviation Authorization
is subject to a change-of-control notification requirement, such requirement is identified on Section 4.26(e) of the Company Disclosure
Letter, and the Company shall provide any such notifications in accordance with applicable requirements.
(f) As
of the date hereof, the Company operates solely as an aircraft designer and manufacturer (OEM) and does not hold or require any air carrier
certificate under 14 C.F.R. Part 119, any operating certificate under 14 C.F.R. Parts 121, 125, 135, or 137, or any unmanned aircraft
system operator certificate, and does not conduct commercial air transportation operations. The Company does not hold economic authority
from the Department of Transportation under 49 U.S.C. §§ 41101-41113. The Company’s flight operations to date have been
conducted under public aircraft authority (49 U.S.C. §40102) pursuant to COA 2025-WSA-17733, with the University of Alaska Fairbanks
(ACUASI) serving as the public agency proponent. Such operations do not constitute commercial air transportation and do not require the
Company to hold a Part 119 or Part 135 operating certificate.
(g) The
Company maintains books and records with respect to its aviation design and manufacturing activities, including type design data, airworthiness
data, flight test data, and conformity records, in material compliance with applicable Aviation Authority requirements. The Company owns
or has the right to use all type design data and related technical data necessary for the prosecution of the Type Certification Application.
(h) The
Company is in material compliance with all applicable requirements of the Defense Federal Acquisition Regulation Supplement clause 252.204-7012
(Safeguarding Covered Defense Information and Cyber Incident Reporting) and National Institute of Standards and Technology Special Publication
800-171 with respect to any controlled unclassified information (“CUI”) in its possession, and has implemented and
maintains adequate information security controls reasonably designed to protect such CUI. Section 4.26(i) of the Company Disclosure Letter
identifies each Material Current Government Contract that imposes CUI safeguarding obligations on the Company.
(i) The
Company has provided to the Purchaser all material information and data pertaining to the Company Aviation Authorizations in its possession,
including copies of all certificates, exemptions, authorizations, applications, correspondence with Aviation Authorities regarding the
Type Certification Application, and any material enforcement or compliance correspondence.
(j) The
Purchaser acknowledges that type certification of the Chaparral is an ongoing regulatory process subject to FAA timelines and requirements
that are not within the sole control of the Company. No representation or warranty is made herein, and no closing condition shall be construed
to require, the issuance of a type certificate, production certificate, or any airworthiness certificate as a condition to the Closing,
and the absence of such issuance shall not constitute a Company Material Adverse Effect.
3.25 Investment
Company Act. The Company is not an “investment company” or a Person directly or indirectly “controlled”
by or acting on behalf of an “investment company”, or required to register as an “investment company”, in each
case within the meaning of the Investment Company Act of 1940, as amended.
3.26 Finders
and Brokers. Except as reflected on Section 4.28 of the Company Disclosure Letter, no broker, finder, investment banker or other
Person is entitled to, nor will be entitled to, either directly or indirectly, any brokerage fee, finders’ fee or other similar
commission, for which the Company would be liable in connection with the Business Combination based upon arrangements made by the Company
or any of their Affiliates.
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3.27 Independent
Investigation. The Company has conducted its own independent investigation, review and analysis of the business, results of operations,
prospects, condition (financial or otherwise) or assets of the Purchaser and Merger Sub, and acknowledge that they have been provided
adequate access to the personnel, properties, assets, premises, books and records, and other documents and data of the Purchaser and Merger
Sub for such purpose. The Company acknowledges and agrees that: (a) in making its decision to enter into this Agreement and to consummate
the transactions contemplated hereby, it has relied solely upon its own investigation and the express representations and warranties of
the Purchaser and Merger Sub set forth in Agreement (including the related portions of the Purchaser Disclosure Letter) and in any certificate
delivered to the Company pursuant hereto; and (b) none of the Purchaser, Merger Sub or any of their respective Representatives have made
any representation or warranty as to the Purchaser or Merger Sub or this Agreement, except as expressly set forth in this Agreement (including
the related portions of the Purchaser Disclosure Letter) or in any certificate delivered to the Company pursuant hereto.
3.28 Information
Supplied. None of the information supplied or to be supplied by, or on behalf of, the Company expressly for inclusion or incorporation
by reference in (i) any current report on Form 8-K, and any exhibits thereto or any other report, form, registration or other filing made
with any Governmental Authority or stock exchange with respect to the Business Combination or in the Proxy Statement/Registration Statement
or (ii) any of the Signing Press Release, the Signing Filing, the Closing Press Release, the Closing Filing and any other press releases
of prospectus filed under Rule 425 of the Securities Act in connection to the Business Combination contains any untrue statement of a
material fact or omit to state any material fact required to be stated therein or necessary in order to make the statements therein, in
light of the circumstances under which they are made, not misleading at (a) the time such information is filed with or furnished to the
SEC (provided, that if such information is revised by any subsequently filed amendment or supplement, this clause (a) shall solely refer
to the time of such subsequent revision); (b) the time the Proxy Statement/Registration Statement is declared effective by the SEC; (c)
the time the Proxy Statement/Registration Statement (or any amendment thereof or supplement thereto) is first mailed to the Purchaser
Shareholders; or (d) the time of the Purchaser Shareholders’ Meeting. Notwithstanding the foregoing, the Company makes no representation,
warranty or covenant with respect to any information supplied by or on behalf of the Purchaser, Merger Sub or their respective Affiliates.
3.29 No
Additional Representations or Warranties. Except as provided in this Article 3, neither the Company nor any of its Affiliates,
nor any of its directors, managers, officers, employees, equityholders, partners, members or representatives has made, or is making, any
representation or warranty whatsoever to Purchasers or their respective Affiliates or any other Person and no such party shall be liable
in respect of the accuracy or completeness of any information provided to the Purchasers or their respective Affiliates or any other Person.
Article
4
Representations and Warranties of the Purchasers.
Each Purchaser, severally
and not jointly, hereby represents and warrants as of the date of this Agreement and as of the Closing Date (or, if such representations
and warranties are made with respect to a specified date, as of such date):
(a) The
Purchaser is either an individual or an entity duly incorporated or formed, validly existing and in good standing under the laws of its
jurisdiction of formation or incorporation with the requisite power and authority to enter into and perform its obligations under the
Transaction Documents.
(b) Each
Transaction Document to which it is a party has been duly authorized, executed and delivered by the Purchaser, and assuming the due authorization,
execution and delivery of the same by the Company, each Transaction Document to which the Purchaser is a party shall constitute the valid
and legally binding obligation of the Purchaser, enforceable against the Purchaser in accordance with its terms, except as such enforceability
may be limited by bankruptcy, insolvency, reorganization, moratorium and similar laws affecting creditors generally and by the availability
of equitable remedies.
29
(c) The
execution, delivery and performance of the Transaction Documents, including the purchase of the Securities hereunder, the compliance by
the Purchaser with all of the provisions of the Transaction Documents and the consummation of the transactions contemplated herein and
therein will not conflict with or result in a breach or violation of any of the terms or provisions of, or constitute a default under,
or result in the creation or imposition of any lien, charge or encumbrance upon any of the property or assets of the Purchaser pursuant
to the terms of (i) any indenture, mortgage, deed of trust, loan agreement, lease, license or other agreement or instrument to which the
Purchaser is a party or by which the Purchaser is bound or to which any of the property or assets of the Purchaser is subject; (ii) the
Organizational Documents of the Purchaser; or (iii) any statute or any judgment, order, rule or regulation of any court or governmental
agency or body, domestic or foreign, having jurisdiction over the Purchaser or any of its properties that in the case of clauses (i) and
(iii), would reasonably be expected to have a material adverse effect on the Purchaser’s ability to consummate the transactions
contemplated by the Transaction Documents, including the purchase of the Securities.
(d) At
the time the Purchaser was offered the Securities, it was, and as of the date hereof it is, and on each date on which it exercises any
Warrants or converts any Note, it will be: (i) a “qualified institutional buyer” (as defined in Rule 144A under the Securities
Act) or an institutional “accredited investor” (as described in Rule 501(a)(1), (2), (3) (7), (8) or (12) and (13) under the
Securities Act) satisfying the applicable requirements set forth on Schedule B, (ii) is acquiring the Securities only for
its own account and not for the account of others, or if the Purchaser is subscribing for the Securities as a fiduciary or agent for one
or more investor accounts, each owner of such account is a qualified institutional buyer, and the Purchaser has full investment discretion
with respect to each such account, and the full power and authority to make the acknowledgements, representations, warranties and agreements
herein on behalf of each owner of each such account and (iii) is not acquiring the Securities with a view to, or for offer or sale in
connection with, any distribution thereof in violation of the Securities Act (and shall provide the requested information on Schedule
B following the signature page hereto). The Purchaser is not an entity formed for the specific purpose of acquiring the Securities.
The Purchaser understands that this offering meets the exemptions from filing under FINRA Rule 5123(b)(1)(C) or (J).
(e) The
Purchaser (i) is an institutional account as defined in FINRA Rule 4512(c), (ii) is a sophisticated investor, experienced in investing
in private equity transactions and capable of evaluating investment risks independently, both in general and with regard to all transactions
and investment strategies involving a security or securities and (iii) has exercised independent judgment in evaluating its participation
in this offering. Accordingly, the Purchaser understands that this offering meets (i) the exemptions from filing under FINRA Rule 5123(b)(1)(A)
and (ii) the institutional customer exemption under FINRA Rule 2111(b).
(f) The
Purchaser acknowledges and agrees that the Securities are being offered in a transaction not involving any public offering within the
meaning of the Securities Act and that the Securities have not been registered under the Securities Act or the securities laws of any
state in the U.S. or other jurisdiction and that the Company is not required to register the Securities. The Purchaser acknowledges and
agrees that the Securities may not be offered, resold, transferred, pledged or otherwise disposed of by the Purchaser absent an effective
registration statement under the Securities Act, except (i) to the Company or a subsidiary thereof, (ii) pursuant to an applicable exemption
from the registration requirements of the Securities Act (including without limitation a private resale pursuant to so-called “Section
4(a)1½”), or (iii) an ordinary course pledge such as a broker lien over account property generally, and, in each of clauses
(i)-(iii), in accordance with any applicable securities laws of the states and other jurisdictions of the U.S., and that any certificates
or account entries representing the Securities shall contain a restrictive legend to such effect. The Purchaser acknowledges and agrees
that the Securities will be subject to these securities law transfer restrictions, and as a result of these transfer restrictions, the
Purchaser may not be able to readily offer, resell, transfer, pledge or otherwise dispose of the Securities and may be required to bear
the financial risk of an investment in the Securities for an indefinite period of time. The Purchaser acknowledges and agrees that it
has been advised to consult legal counsel prior to making any offer, resale, pledge or transfer of any of the Securities.
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(g) The
Purchaser understands and agrees that it is purchasing the Securities directly from the Company. The Purchaser further acknowledges that
there have not been, and the Purchaser hereby agrees that it is not relying on, any representations, warranties, covenants or agreements
made to the Purchaser by the Company, the SPAC, the Placement Agent, any of their respective Affiliates or any control persons, officers,
directors, employees, partners, agents or representatives or any other person or entity, expressly or by implication, other than those
representations, warranties, covenants and agreements of the Company set forth in this Agreement. The Purchaser agrees that none of (i)
any other Purchaser (including the controlling persons, members, officers, directors, partners, agents, or employees of any such other
Purchaser), (ii) the Placement Agent, its respective Affiliates or any of its or its Affiliates’ respective control persons, officers,
directors or employees or (iii) the SPAC or any other party to the Business Combination Agreement, including any such Person’s representatives,
Affiliates or any of its or their control persons, officers, directors or employees, that is not a party hereto, shall be liable to the
Purchaser pursuant to this Agreement for any action heretofore or hereafter taken or omitted to be taken by any of them in connection
with the purchase of the Securities. On behalf of the Purchaser and its affiliates, the Purchaser releases the Placement Agent or any
of its respective Affiliates in respect of any losses, claims, damages, obligations, penalties, judgments, awards, liabilities, costs,
expenses or disbursements related to this offering and this Agreement. Purchaser agrees not to commence any litigation or bring any claim
against the Placement Agent or any of its Affiliates in any court or any other forum which relates to, may arise out of, or is in connection
with, this offering and this Agreement. This undertaking is given freely and after obtaining independent legal advice.
(h) In
making its decision to purchase the Securities, the Purchaser has relied solely upon the independent investigation made by the Purchaser
and the Company’s representations in Article 3 of this Agreement. The Purchaser acknowledges and agrees that the Purchaser
has received such information as the Purchaser deems necessary in order to make an investment decision with respect to the Securities,
including with respect to the Company and the Business Combination, and made its own assessment and is satisfied concerning the relevant
financial, tax and other economic considerations relevant to the Purchaser’s investment in the Securities. The Purchaser represents
and agrees that the Purchaser and the Purchaser’s professional advisor(s), if any, have had the full opportunity to ask such questions,
receive such answers and obtain such information as the Purchaser and the Purchaser’s professional advisor(s), if any, have deemed
necessary to make an investment decision with respect to the Securities. The Purchaser acknowledges that certain information provided
by the Company was based on projections, and such projections were prepared in good faith based on assumptions and estimates that are
inherently uncertain and are subject to a wide variety of significant business, economic and competitive risks and uncertainties that
could cause actual results to differ materially from those contained in the projections. The Purchaser further acknowledges that such
information and projections were prepared without the participation of the Placement Agent and that the Placement Agent does not assume
responsibility for independent verification of, or the accuracy or completeness of, such information or projections. The Purchaser further
acknowledges that the information provided to the Purchaser was preliminary and subject to change, including in the registration statement
and the proxy statement and/or prospectus that the Company or another party intends to file with the Commission in connection with the
Business Combination (which will include substantial additional information about the Company and the Business Combination and will update
and supersede the information previously provided to the Purchaser). The Purchaser acknowledges and agrees that none of the Placement
Agent or any of its respective Affiliates or any of the Person’s or its Affiliate’s control persons, officers, directors,
employees or other representatives, legal counsel, financial advisors, accountants or agents, including the Placement Agent (collectively,
“Representatives”) has provided the Purchaser with any information, recommendation or advice with respect to the Securities
nor is such information, recommendation or advice necessary or desired. None of the Placement Agent or any of its respective Affiliates
or Representatives has made or makes any representation as to the Company Entities or the quality or value of the Securities. In addition,
the Company, the SPAC, the Placement Agent and their respective Affiliates or Representatives may have acquired non-public information
with respect to the Company Entities or the SPAC which the Purchaser agrees need not be provided to it. In connection with the issuance
of the Securities to the Purchaser, none of the Placement Agent, its Affiliates or the Company Entities, the SPAC, or any of their respective
Affiliates or Representatives has acted as a financial advisor or fiduciary to the Purchaser.
(i) The
Purchaser became aware of this offering of the Securities solely by means of direct contact between the Purchaser and the Company or its
Affiliates or by means of contact from the Placement Agent, and Securities were offered to the Purchaser solely by direct contact between
the Purchaser and the Company or its Affiliates or agents, including the Placement Agent. The Purchaser did not become aware of this offering
of the Securities, nor were the Securities offered to the Purchaser, by any other means. The Purchaser acknowledges that the Company represents
and warrants that the Securities (i) were not offered by any form of general solicitation or general advertising (within the meaning of
Regulation D of the Securities Act) and (ii) are not being offered in a manner involving a public offering under, or in a distribution
in violation of, the Securities Act, or any state securities laws.
(j) The
Purchaser acknowledges that it is aware that there are substantial risks incident to the purchase and ownership of the Securities. The
Purchaser has such knowledge and experience in financial and business matters as to be capable of evaluating the merits and risks of an
investment in the Securities, and the Purchaser has had an opportunity to seek, and has sought, such accounting, legal, business and tax
advice as the Purchaser has considered necessary to make an informed investment decision. The Purchaser (i) is an institutional account
as defined in FINRA Rule 4512(c), (ii) is a sophisticated investor, experienced in investing in private equity transactions and capable
of evaluating investment risks independently, both in general and with regard to all transactions and investment strategies involving
a security or securities, and (iii) has exercised independent judgment in evaluating its participation in the purchase of the Securities.
The Purchaser understands and acknowledges that the purchase and sale of the Securities hereunder meets (x) the exemptions from filing
under FINRA Rule 5123(b)(1)(A) and (y) the institutional customer exemption under FINRA Rule 2111(b).
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(k) The
Purchaser has adequately analyzed and fully considered the risks of an investment in the Securities and determined that the Securities
are a suitable investment for the Purchaser and that the Purchaser is able at this time and in the foreseeable future to bear the economic
risk of a total loss of the Purchaser’s investment in the Company. The Purchaser acknowledges specifically that a possibility of
total loss exists and will not look to the Placement Agent for all or part of any such loss or losses the Purchaser may suffer.
(l) The
Purchaser understands and agrees that no federal or state agency has passed upon or endorsed the merits of the offering of the Securities
or made any findings or determination as to the fairness of this investment.
(m) The
Purchaser is not (i) a person or entity named, nor owned or controlled by an entity named on, on the List of Specially Designated Nationals
and Blocked Persons administered by OFAC or in any OFAC Lists, or a person or entity prohibited by any OFAC sanctions program, (ii) a
Designated National as defined in the Cuban Assets Control Regulations, 31 C.F.R. Part 515, (iii) a non-U.S. shell bank or providing banking
services indirectly to a non-U.S. shell bank, or (iv) located, organized, or ordinarily resident in a jurisdiction subject to comprehensive
sanctions administered by OFAC, including Cuba, Iran, North Korea, Syria, and the Crimea, Donetsk, and Luhansk regions of Ukraine. The
Purchaser agrees to provide law enforcement agencies, if requested thereby, such records as required by applicable law, provided that
the Purchaser is permitted to do so under applicable law. If the Purchaser is a financial institution subject to the BSA/PATRIOT Act,
the Purchaser maintains policies and procedures reasonably designed to comply with applicable obligations under the BSA/PATRIOT Act. To
the extent required, the Purchaser maintains policies and procedures reasonably designed for the screening of its investors against the
OFAC sanctions programs, including the OFAC List. To the extent required, the Purchaser maintains policies and procedures reasonably designed
to ensure that the funds held by the Purchaser and used to purchase the Securities were legally derived.
(n) No
foreign person (as defined in 31 C.F.R. Part 800.224) in which the national or subnational governments of a single foreign state have
a substantial interest (as defined in 31 C.F.R. Part 800.244) will acquire a substantial interest in the Company as a result of the purchase
and sale of Securities hereunder such that a declaration to the Committee on Foreign Investment in the United States would be mandatory
under 31 C.F.R. Part 800.401, and no foreign person will have control (as defined in 31 C.F.R. Part 800.208) over the Company from and
after the Closing as a result of the purchase and sale of Securities hereunder.
(o) The
Purchaser: (i) has sufficient immediately available cash or other funds available to pay the Subscription Amount pursuant to Section
2.2(b)(ii) and any expenses incurred by the Purchaser in connection with the transactions contemplated by or in connection with the
Transaction Documents; (ii) has the resources and capabilities (financial or otherwise) to perform its obligations under the Transaction
Documents; and (iii) has not incurred any obligation, commitment, restriction or liability of any kind, absolute or contingent, present
or future, which would impair or adversely affect its ability to perform its obligations under the Transaction Documents.
(p) The
Purchaser acknowledges that it is not relying upon, and has not relied upon, any statement, representation or warranty made by any person,
firm or Company (including, without limitation, the Company, the SPAC, the Placement Agents or any of their respective Affiliates or any
of their respective or their respective Affiliates’ control persons, officers, directors, employees, agents or representatives),
other than the representations and warranties of the Company contained in Article 3 of this Agreement, in making its investment
or decision to invest in the Company. The Purchaser agrees that none of (i) any other Person participating in any other private placement
of securities of the Company (including the controlling persons, officers, directors, partners, agents or employees of any such other
Person), (ii) the Company, its Affiliates or any of its or their respective Affiliates’ control persons, officers, directors, partners,
agents, employees or representatives, (iii) the SPAC, its Affiliates or any of its or their respective control persons, officers, directors,
partners, agents, employees or representatives nor (iv) the Placement Agents, their respective Affiliates or any of its or their respective
control persons, officers, directors, partners, agents, employees or representatives shall be liable to the Purchaser pursuant to the
Transaction Documents or any other agreement related to a private placement of Securities for any action heretofore or hereafter taken
or omitted to be taken by any of them in connection with the purchase of the Securities hereunder or thereunder.
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(q) At
all times on or prior to the Closing Date, the Purchaser has no binding commitment to dispose of, or otherwise transfer (directly or indirectly),
any of the Securities.
(r) The
Purchaser hereby agrees that neither it, nor any person or entity acting on its behalf or pursuant to any understanding with the Purchaser,
shall, directly or indirectly, engage in any hedging activities or execute any Short Sales with respect to the securities of the Company
from the date hereof until the Closing or the earlier termination of this Agreement in accordance with its terms.
(s) The
Purchaser acknowledges that (i) the Company Entities, the SPAC, and the Placement Agents, and any of their respective Affiliates, control
persons, officers, directors, employees, agents or representatives currently may have, and later may come into possession of, information
regarding the Company Entities and the SPAC that is not known to the Purchaser and that may be material to a decision to purchase the
Securities, (ii) the Purchaser has determined to purchase the Securities notwithstanding its lack of knowledge of such information, and
(iii) none of the Company Entities, the SPAC or the Placement Agents or any of their respective Affiliates, control persons, officers,
directors, employees, agents or representatives shall have liability to the Purchaser, and the Purchaser hereby to the extent permitted
by law waives and releases any claims it may have against the Company Entities, the SPAC, the Placement Agents and their respective Affiliates,
control persons, officers, directors, employees, agents or representatives, with respect to the nondisclosure of such information.
(t) The
Purchaser acknowledges its obligations under applicable securities laws with respect to the treatment of non-public information relating
to the Company.
(u) The
Purchaser acknowledges and is aware that the Placement Agent is acting as placement agent to the SPAC in connection with an offering of
its securities in connection with the Business Combination. Purchaser understands and acknowledges that Placement Agent’s role as
placement agent to the SPAC in connection with the Business Combination may give rise to potential conflicts of interest or the appearance
thereof.
(v) The
Purchaser further acknowledges that the Purchaser has not relied upon the Placement Agent in connection with the Purchaser’s due
diligence review of the offering of the Securities and the Company. The Purchaser acknowledges and agrees that (i) it has been informed
that the Placement Agent is acting solely as placement agent in connection with the transactions contemplated by the Transaction Documents
and is not acting as an underwriter or in any other capacity in connection with the transactions contemplated by the Transaction Documents
and is not and shall not be construed as a fiduciary for the Purchaser in connection with the transactions contemplated by the Transaction
Documents, (ii) it has not relied on the Placement Agent in connection with its determination as to the legality of its acquisition of
the Securities or as to the other matters referenced herein, (iii) it has not relied on any investigation that the Placement Agent, any
of its Affiliates or any other person acting on their behalf has conducted with respect to the Securities or the Company or the SPAC,
(iv) the Placement Agent has not made and will not make any representation or warranty, whether express or implied, of any kind or character
and have not provided any advice, including without limitation financial advice, or recommendation in connection with the transactions
contemplated by the Transaction Documents, in each case, to the Purchaser, (v) the Placement Agent has not solicited any action from the
Purchaser with respect to the offer and sale of the Securities, and (vi) the Placement Agent will have no responsibility to the Purchaser
with respect to (A) any representations, warranties or agreements made by any person or entity under or in connection with the transactions
contemplated by the Transaction Documents or any of the documents furnished pursuant thereto or in connection therewith, or the execution,
legality, validity or enforceability (with respect to any person) or any thereof, or (B) the business, condition (financial and otherwise),
management, operations, properties, prospects or projections of the Company, the SPAC or the transactions contemplated by the Transaction
Documents.
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(w) The
Purchaser acknowledges that no disclosure or offering document has been prepared by the Placement Agent in connection with the offer and
sale of the Securities. The Purchaser acknowledges that none of the Placement Agent or any Affiliate of the Placement Agent has provided
Purchaser with any information or advice with respect to the Securities nor is such information or advice necessary or desired. The Purchaser
further acknowledges that none of the Placement Agent or any of its directors, officers, employees, representatives or controlling persons
has made any independent investigation with respect to the Company, the SPAC, the Sponsor or any of their subsidiaries or any of their
respective business, the Securities or the completeness or accuracy of any information provided to the Purchaser, and do not intend to
make any representation or warranty with respect to the Company, the SPAC, the Sponsor, the Securities or the completeness or accuracy
of any information provided to the Purchaser by the Company, the SPAC, the Sponsor or any of their Affiliates or Representatives. None
of Placement Agent or any Affiliate has made or makes any representation as to the Company, the SPAC, or the Sponsor, the Securities or
the completeness or accuracy of any information provided to the Purchaser, or the quality or value of the Company, the SPAC, or the Securities.
(x) The
Purchaser either (i) is a “citizen of the United States” as defined in 49 U.S.C. § 40102(a)(15) or (ii) has disclosed
in writing to the Company, prior to the execution of this Agreement, that it is not a citizen of the United States within the meaning
of such definition.
(y) Each
Purchaser, severally and not jointly, represents and warrants that such Purchaser is acting independently with respect to its investment
in the Securities and is not acting as part of a “group” (within the meaning of Section 13(d)(3) of the Securities Exchange
Act of 1934, as amended, and the rules and regulations promulgated thereunder) with any other Purchaser or any other Person in connection
with the purchase of the Securities or any securities of the Company or the Public Company. Each Purchaser acknowledges and agrees that
(i) the purchase price and other terms of such Purchaser’s investment have been determined independently by such Purchaser, (ii)
such Purchaser has made its investment decision independently of every other Purchaser and independently of any information, materials,
statements or opinions as to the business, affairs, operations, assets, properties, liabilities, results of operations, condition (financial
or otherwise) or prospects of the Company or the SPAC that may have been made or given by any other Purchaser or its agents or representatives,
and (iii) nothing contained herein, and no action taken by any Purchaser pursuant hereto, shall be deemed to constitute the Purchasers
as a partnership, an association, a joint venture or any other kind of entity, or create a presumption that the Purchasers are in any
way acting in concert or as a group with respect to such obligations or the transactions contemplated herein. For the avoidance of doubt,
the foregoing shall not in any way be construed as the Purchasers acting in concert or as a group with respect to the purchase, disposition
or voting of securities or otherwise.
Article
5
OTHER AGREEMENTS OF THE PARTIES
5.1 Transfer
Restrictions.
(a) The
Securities may only be disposed of in compliance with state and federal securities laws. In connection with any transfer of Securities
other than pursuant to an effective registration statement or Rule 144, to the Company or to an Affiliate of a Purchaser or in connection
with a pledge as contemplated in Section 5.1(b), the Company may require the transferor thereof to provide to the Company an opinion
of counsel selected by the transferor and reasonably acceptable to the Company, the form and substance of which opinion shall be reasonably
satisfactory to the Company, to the effect that such transfer does not require registration of such transferred Securities under the Securities
Act. As a condition of transfer, any such transferee shall agree in writing to be bound by the terms of this Agreement and shall have
the rights and obligations of a Purchaser under this Agreement.
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(b) Each
Purchaser agrees to the imprinting, so long as is required by this Section 5.1, of a legend on any of the Securities in the following
form and any such other legend as may be required pursuant to the Charter:
NEITHER THIS SECURITY NOR THE SECURITIES
INTO WHICH THIS SECURITY IS CONVERTIBLE HAS BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION OR THE SECURITIES COMMISSION OF
ANY STATE IN RELIANCE UPON AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT, AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT
PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION
NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS. THIS SECURITY
AND THE SECURITIES ISSUABLE UPON CONVERSION OF THIS SECURITY MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT WITH A REGISTERED
BROKER-DEALER OR OTHER LOAN WITH A FINANCIAL INSTITUTION THAT IS AN “ACCREDITED INVESTOR” AS DEFINED IN RULE 501(a) UNDER
THE SECURITIES ACT OR OTHER LOAN SECURED BY SUCH SECURITIES.
(c) Each
Purchaser agrees with the Company that such Purchaser will sell any Securities pursuant to either the registration requirements of the
Securities Act, including any applicable prospectus delivery requirements, or an exemption therefrom, and that if Securities are sold
pursuant to a registration statement, they will be sold in compliance with the plan of distribution set forth therein, and acknowledges
that the removal of the restrictive legend from certificates (or reasonable evidence of issuance by book entry, as applicable) representing
Securities as set forth in this Section 5.1 is predicated upon the Company’s reliance upon this understanding.
5.2 Acknowledgment
of Dilution. The Company acknowledges that the issuance of the Securities and the Underlying Shares issuable upon conversion or
exercise thereof will result in dilution of the outstanding shares of the Company, which dilution may be substantial under certain market
conditions. The Company further acknowledges that its obligations under the Transaction Documents, including, without limitation, its
obligation to issue the Underlying Shares pursuant to the Transaction Documents, are unconditional and absolute and not subject to any
right of set off, counterclaim, delay or reduction, regardless of the effect of any such dilution or any claim the Company may have against
any Purchaser and regardless of the dilutive effect that such issuance may have on the ownership of the other stockholders of the Company.
5.3 Integration.
The Company shall not sell, offer for sale or solicit offers to buy or otherwise negotiate in respect of any security (as defined in Section
2 of the Securities Act) that would be integrated with the offer or sale of the Securities in a manner that would require the registration
under the Securities Act of the sale of the Securities.
5.4 Conversion
and Exercise Procedures. No ink-original notice of exercise or notice of conversion shall be required, nor shall any medallion
guarantee (or other type of guarantee or notarization) of any notice of exercise or conversion form be required in order to exercise the
Warrants or convert the Note, except as set forth in the Transaction Documents. No additional legal opinion, other information or instructions
shall be required of any Purchaser to exercise its Warrants or convert its Note. The Company shall honor exercises of the Warrants and
conversions of the Note and shall deliver Underlying Shares in accordance with the terms, conditions and time periods set forth in the
Transaction Documents.
5.5 Use
of Proceeds. The Company shall use the net proceeds from the sale of the Securities hereunder for general corporate and working
capital purposes, in the Company’s exclusive discretion.
5.6 Indemnification.
(a) Subject
to the provisions of this Section 5.6 and Section 6.10, the Company will indemnify and hold each Purchaser Party harmless
from any and all Losses that any Purchaser Party may suffer or incur as a result of or relating to any breach of any of the representations
and warranties of the Company found exclusively in Section 3.1 and the covenants or agreements made by the Company in this Agreement
or in the other Transaction Documents (unless such Loss is primarily based upon a material breach of a Purchaser Party’s representations,
warranties or covenants under the Transaction Documents or any agreements or understandings a Purchaser Party may have with any such third
party or any violations by a Purchaser Party of state or federal securities laws or any conduct by a Purchaser Party which is finally
judicially determined to constitute fraud, gross negligence or willful misconduct or any claims of breaches of fiduciary duties).
35
(b) Subject
to the provisions of this Section 5.6 and Section 6.10, each Purchaser will, severally and not jointly, indemnify and hold
each Company Party harmless from any and all Losses that any Company Party may suffer or incur as a result of or relating to any breach
of any of the representations, warranties, covenants or agreements made by the Purchaser in this Agreement or in the other Transaction
Documents (unless such Loss is primarily based upon a material breach of a Company Party’s representations, warranties or covenants
under the Transaction Documents or any agreements or understandings a Company Party may have with any such third party or any violations
by a Company Party of state or federal securities laws or any conduct by a Company Party which is finally judicially determined to constitute
fraud, gross negligence or willful misconduct or any claims of breaches of fiduciary duties).
(c) If
any Action or Proceeding shall be brought against any Person in respect of which indemnity may be sought pursuant to this Agreement, such
Person (the “Indemnified Party”) shall promptly notify the Person against whom such indemnity may be sought (the “Indemnifying
Party”) in writing, but the omission to notify such Indemnifying Party will not relieve the Indemnifying Party from any liability
that it may have to any Indemnified Party under this Section 5.6 unless, and only to the extent that, such omission results in
the forfeiture of substantive rights or defenses by the Indemnifying Party. The Indemnifying Party shall have the right to assume the
defense thereof with counsel of its own choosing reasonably acceptable to the Indemnified Party. Any Indemnified Party shall have the
right to employ separate counsel in any such Action or Proceeding and participate in the defense thereof, but the fees and expenses of
such counsel shall be at the expense of such Indemnified Party except to the extent that (i) the employment thereof has been specifically
authorized by the Indemnifying Party in writing, (ii) the Indemnifying Party has failed after a reasonable period of time to assume such
defense and to employ counsel or (iii) in such Action or Proceeding there is, in the reasonable opinion of counsel, a material conflict
on any material issue between the position of the Indemnifying Party and the position of such Indemnified Party, in which case the Indemnifying
Party shall be responsible for the reasonable fees and expenses of no more than one such separate counsel. The Indemnifying Party shall
not be liable for any settlement of any Proceeding effected without its written consent, but if settled with such consent or if there
be a final judgment for the plaintiff, the Indemnifying Party agrees to indemnify the Indemnified Party from and against any loss or liability
by reason of such settlement or judgment. No Indemnifying Party shall, without the prior written consent of the Indemnified Party, effect
any settlement of any pending or threatened Proceeding in respect of which any Indemnified Party is or could have been a party and indemnity
could have been sought hereunder by such Indemnified Party, unless such settlement includes an unconditional release of such Indemnified
Party from all liability on claims that are the subject matter of such Proceeding.
5.7 Blue
Sky Filings. The Company shall take such action as the Company shall reasonably determine is necessary in order to obtain an exemption
for, or to qualify the Securities for, sale to the Purchasers at the Closing under applicable securities or “Blue Sky” laws
of the states of the U.S.
5.8 Securities
Laws Disclosures; Publicity.
(a) The
Company shall use commercially reasonable efforts to cause the SPAC to (a) by 9:30 a.m. (New York City time) issue a press release and/or
file a Current Report on Form 8-K (the “Disclosure Document”) disclosing the material terms of the transactions contemplated
hereby and all material non-public information (other than the Additional Information) concerning the Company disclosed to the Purchasers
by the Company, the SPAC or their respective agents, which shall have been previously reviewed by counsel for the Placement Agent, and
(b) in respect of any information that is issued in a press release, file a Current Report on Form 8-K including the form of this Agreement
as an exhibit thereto, which shall have been previously reviewed by counsel for the Placement Agent, within the time required by the Exchange
Act. Effective upon the issuance of such Disclosure Document, the Company acknowledges and represents to each Purchaser that (i) if a
Purchaser has not received the Additional Information, such Purchaser shall not be in possession of material non-public information concerning
the Company disclosed to such Purchaser by the Company or its agents and (ii) if a Purchaser has received the Additional Information,
such Purchaser shall not be in possession of material non-public information (other than the Additional Information) concerning the Company
disclosed to such Purchaser by the Company or its agents.
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(b) To
the extent any disclosure concerning the parties and/or material terms of the transactions contemplated hereby is required by law or regulations,
the Company shall provide the Purchasers with prompt prior written notice of such requirement so that the Purchasers may (a) seek appropriate
relief to prevent or limit such disclosure should it wish to do so, (b) furnish only that portion of the information which is legally
required to be furnished or disclosed, and to the extent reasonably feasible, (c) consult with the Company on content and timing prior
to any such disclosure. Notwithstanding anything to the contrary contained herein, without the prior written consent of such Purchaser,
the Company shall not (and shall cause each of its affiliates and representatives not to) disclose the name of such Purchaser or its investment
adviser in any filing, announcement, release or otherwise, except as required by law in which case the Company shall comply with the provisions
of this Section 5.8. Notwithstanding the foregoing, if a Purchaser is a multi-managed investment vehicle whereby separate
portfolio managers manage separate portions of such Purchaser’s assets and the portfolio managers have no direct knowledge of the
investment decisions made by the portfolio managers managing other portions of such Purchaser’s assets, the covenant set forth above
shall only apply with respect to the portion of assets managed by the portfolio manager that made the investment decision to purchase
the Securities covered by this Agreement.
5.9 Foreign
Ownership Limitations. Each Purchaser, severally and not jointly, acknowledges that upon consummation of the Business Combination,
the Company will become a wholly-owned subsidiary of a publicly traded company (the “Public Company”), and that the
Public Company’s Certificate of Incorporation is expected to contain provisions limiting aggregate foreign ownership and voting
of its capital stock by persons who are not citizens of the United States as defined in 49 U.S.C. § 40102(a)(15). Such provisions
are designed to preserve the eligibility of the Company and its subsidiaries to register civil aircraft on the United States Aircraft
Registry maintained by the Federal Aviation Administration pursuant to 49 U.S.C. § 44102. Any shares of Common Stock issuable upon
conversion of the Note or exercise of the Warrant, and any shares of capital stock of the Public Company issuable in exchange therefor
in connection with the Business Combination, shall be subject to any such foreign ownership or voting limitations as set forth in the
Public Company’s Organizational Documents from time to time. Each Purchaser, severally and not jointly, consents to the application
of such provisions to the Securities and any shares received in exchange therefor, and agrees that the enforcement of such provisions
(including without limitation any suspension of voting rights, refusal to register a transfer, mandatory conversion to non-voting stock,
or mandatory divestiture) shall not give rise to any claim by such Purchaser against the Company, the Public Company, or any of their
respective Affiliates. The foregoing shall not limit or modify any Purchaser’s economic rights (including rights to dividends, distributions,
and conversion value) except to the extent that a mandatory divestiture is effected at fair market value.
5.10 Registration.
To the extent permissible under applicable securities laws, the Company shall use commercially reasonable efforts to cause SPAC to file
a registration statement on Form S-4 (“Form S-4”) in connection with the consummation of the Business Combination to register
the exchange of the Notes for the Pubco Preferred Stock (as defined in the Notes) and the Warrants for warrants to purchase common stock
of SPAC (the “PubCo Warrants”). To the extent that the exchange of the Notes for the Pubco Preferred Stock and the Warrants
for the PubCo Warrants cannot be registered pursuant to such Form S-4 under applicable securities laws, following the consummation of
the Business Combination, the Company will use commercially reasonable efforts to cause SPAC to (a) grant registration rights to the Purchaser
not less favorable than those provided in the Registration Rights Agreement of the SPAC dated February 10, 2026, or (b) file a resale
registration statement on Form S-1 or Form S-3 covering the shares of common stock of the SPAC issuable upon exercise or conversion, as
applicable, of the PubCo Warrants and the PubCo Preferred Stock within 30 days after the consummation of the Business Combination and
cause such resale registration statement to be declared effective no later than the earlier of (i) the 90th calendar day following the
filing date thereof if the Securities and Exchange Commission notifies the Company that it will “review” such registration
statement and (ii) the tenth (10th) business day after the date the Company is notified (orally or in writing, whichever is earlier) by
the Securities and Exchange Commission that such registration statement will not be “reviewed” or will not be subject to further
review.
5.11 Non-Public
Information. The Company covenants and agrees that neither it, nor any other Person acting on its behalf will provide the Purchaser
or its agents or counsel with any information that constitutes, or the Company reasonably believes constitutes, material non-public information,
unless prior thereto the Purchaser shall have consented to the receipt of such information and agreed with the Company to keep such information
confidential. To the extent that the Company or any of its officers, directors, agents, employees or Affiliates delivers any material,
non-public information to the Purchaser without the Purchaser’s consent, the Company hereby covenants and agrees that the Purchaser
shall not have any duty of trust or confidentiality to the Company or any of its officers, directors, agents, employees or Affiliates,
or a duty to the Company or any of its officers, directors, agents, employees or Affiliates not to trade while aware of, such material,
non-public information, provided that the Purchaser shall remain subject to applicable law. To the extent that any notice provided pursuant
to any Transaction Document following the consummation of the Business Combination constitutes, or contains, material, non-public information
regarding the Company, the Company shall, if reasonably practicable simultaneously file such notice with the SEC pursuant to a Current
Report on Form 8-K. The Company understands and confirms that the Purchaser shall be relying on the foregoing covenants in effecting transactions
in securities of the Company.
37
Article
6
MISCELLANEOUS
6.1 Termination.
This Agreement shall terminate and be void and of no further force and effect, and all rights and obligations of the parties hereunder
shall terminate without any further liability on the part of any party in respect hereof, upon the mutual written agreement of the parties
hereto to terminate this Agreement.
6.2 Fees
and Expenses. Each party shall pay the fees and expenses of its advisers, counsel, accountants and other experts, if any, and
all other expenses incurred by such party incident to the negotiation, preparation, execution, delivery and performance of this Agreement
and the other Transaction Documents. The Company shall pay all transfer agent fees (including, without limitation, any fees required for
same-day processing of any instruction letter delivered by the Company and any conversion notice delivered by a Purchaser), stamp taxes
and other taxes and duties levied in connection with the delivery of any Securities to the Purchaser.
6.3 Entire
Agreement. The Transaction Documents, together with the exhibits and schedules thereto, contain the entire understanding of the
parties with respect to the subject matter hereof and thereof and supersede all prior agreements and understandings, oral or written,
with respect to such matters, which the parties acknowledge have been merged into such documents, exhibits and schedules.
6.4 Notices.
Any and all notices or other communications or deliveries required or permitted to be provided hereunder shall be in writing and shall
be deemed given and effective on the earliest of: (a) the time of transmission, if such notice or communication is delivered via email
attachment at the e-mail address as set forth on the signature pages attached hereto at or prior to 5:30 p.m. (New York City time) on
a Business Day, (b) the next Business Day after the time of transmission, if such notice or communication is delivered via email attachment
at the e-mail address as set forth on the signature pages attached hereto on a day that is not a Business Day or later than 5:30 p.m.
(New York City time) on any Business Day, (c) the second (2nd) Business Day following the date of mailing, if sent by U.S.
nationally recognized overnight courier service or (d) upon actual receipt by the party to whom such notice is required to be given. The
address for such notices and communications shall be as set forth on the signature pages attached hereto.
6.5 Amendments;
Waivers. No provision of this Agreement may be waived, modified, supplemented or amended except in a written instrument signed,
in the case of an amendment, by the Company and the Requisite Purchasers or in the case of a waiver, by the Company or the Requisite Purchasers,
as the case may be, dependent on which party against whom enforcement of any such waived provision is sought. Upon the effectuation of
such waiver or amendment with the consent of the Requisite Purchasers in accordance with this Section 6.5, such amendment or waiver
shall be effective as to, and binding against, all Purchasers. Sections 4(g), 4(k), 4(w), 5.8, 6.8, 6.19, 6.20 and the signature page
hereto may not be waived, modified, supplemented or amended except in a written instrument signed by the Company, the Purchaser and Placement
Agent. No waiver of any default with respect to any provision, condition or requirement of this Agreement shall be deemed to be a continuing
waiver in the future or a waiver of any subsequent default or a waiver of any other provision, condition or requirement hereof, nor shall
any delay or omission of any party to exercise any right hereunder in any manner impair the exercise of any such right.
6.6 Headings.
The headings herein are for convenience only, do not constitute a part of this Agreement and shall not be deemed to limit or affect any
of the provisions hereof.
6.7 Successors
and Assigns. This Agreement shall be binding upon and inure to the benefit of the parties and their successors and permitted assigns.
The Company may not assign this Agreement or any rights or obligations hereunder without the prior written consent of the Purchaser (other
than by merger). The Purchaser may assign any or all of its rights under this Agreement to any Person to whom the Purchaser assigns or
transfers any Securities, provided that such transferee agrees in writing to be bound, with respect to the transferred Securities, by
the provisions of the Transaction Documents that apply to the “Purchaser.”
38
6.8 Third-Party
Beneficiaries. The Placement Agent shall be the third-party beneficiary of the representations and warranties of the Company in
Article 3 hereof, with respect to the representations and warranties of the Purchaser in Article 4 hereof and of the Company
and Purchaser in Section 6.19 hereof. This Agreement is intended for the benefit of the parties hereto and their respective successors
and permitted assigns and is not for the benefit of, nor may any provision hereof be enforced by, any other Person, except as otherwise
set forth in Section 5.6 and this Section 6.8.
6.9 Governing
Law. All questions concerning the construction, validity, enforcement and interpretation of the Transaction Documents shall be
governed by and construed and enforced in accordance with the internal laws of the State of Delaware, without regard to the principles
of conflicts of law thereof. Each party agrees that all legal Proceedings concerning the interpretations, enforcement and defense of the
transactions contemplated by this Agreement and any other Transaction Documents (whether brought against a party hereto or its respective
Affiliates, directors, officers, shareholders, partners, members, employees or agents) shall be commenced exclusively in the state and
federal courts sitting in the State of Delaware. Each party hereby irrevocably submits to the exclusive jurisdiction of the state and
federal courts sitting in the State of Delaware for the adjudication of any dispute hereunder or in connection herewith or with any transaction
contemplated hereby or discussed herein (including with respect to the enforcement of any of the Transaction Documents), and hereby irrevocably
waives, and agrees not to assert in any Action or Proceeding, any claim that it is not personally subject to the jurisdiction of any such
court, that such Action or Proceeding is improper or is an inconvenient venue for such Proceeding. Each party hereby irrevocably waives
personal service of process and consents to process being served in any such Action or Proceeding by mailing a copy thereof via registered
or certified mail or overnight delivery (with evidence of delivery) to such party at the address in effect for notices to it under this
Agreement and agrees that such service shall constitute good and sufficient service of process and notice thereof. Nothing contained herein
shall be deemed to limit in any way any right to serve process in any other manner permitted by law. If any party shall commence an Action
or Proceeding to enforce any provisions of the Transaction Documents, then, in addition to the obligations of the parties under Section
5.6, the prevailing party in such Action or Proceeding shall be reimbursed by the non-prevailing party for its reasonable attorneys’
fees and other costs and expenses incurred with the investigation, preparation and prosecution of such Action or Proceeding.
6.10 Survival.
The representations and warranties contained in Section 3.1 and Article 4 herein shall survive the Closing and the delivery
of the Securities for a period of two (2) years following the Closing. The representations and warranties contained in Sections 3.2
through 3.29 herein shall not survive the Closing and the delivery of the Securities.
6.11 Execution.
This Agreement may be executed in two or more counterparts, all of which when taken together shall be considered one and the same agreement
and shall become effective when counterparts have been signed by each party and delivered to each other party, it being understood that
the parties need not sign the same counterpart. In the event that any signature is delivered by e-mail delivery of a “.pdf”
format data file, such signature shall create a valid and binding obligation of the party executing (or on whose behalf such signature
is executed) with the same force and effect as if such “.pdf” signature page were an original thereof.
6.12 Severability.
If any term, provision, covenant or restriction of this Agreement is held by a court of competent jurisdiction to be invalid, illegal,
void or unenforceable, the remainder of the terms, provisions, covenants and restrictions set forth herein shall remain in full force
and effect and shall in no way be affected, impaired or invalidated, and the parties hereto shall use their commercially reasonable efforts
to find and employ an alternative means to achieve the same or substantially the same result as that contemplated by such term, provision,
covenant or restriction. It is hereby stipulated and declared to be the intention of the parties that they would have executed the remaining
terms, provisions, covenants and restrictions without including any of such that may be hereafter declared invalid, illegal, void or unenforceable.
6.13 Remedies.
In addition to being entitled to exercise all rights provided herein or granted by law, including recovery of damages, each of the Purchaser
and the Company will be entitled to specific performance under the Transaction Documents. The parties agree that monetary damages may
not be adequate compensation for any loss incurred by reason of any breach of obligations contained in the Transaction Documents and hereby
agree to waive and not to assert in any Action for specific performance of any such obligation the defense that a remedy at law would
be adequate. For the avoidance of doubt, Section 5.6 shall be the exclusive remedy for any Losses resulting from a breach of any
of the representations and warranties contained in Article 3 and Article 4 of this Agreement, in each case exclusively to
the extent such Losses arise during the survival period of such representations and warranties pursuant to the terms of this Agreement.
39
6.14 Payment
Set Aside. To the extent that the Company makes a payment or payments to any Purchaser pursuant to any Transaction Document or
a Purchaser enforces or exercises its rights thereunder, and such payment or payments or the proceeds of such enforcement or exercise
or any part thereof are subsequently invalidated, declared to be fraudulent or preferential, set aside, recovered from, disgorged by or
are required to be refunded, repaid or otherwise restored to the Company, a trustee, receiver or any other Person under any law (including,
without limitation, any bankruptcy law, state or federal law, common law or equitable cause of action), then to the extent of any such
restoration the obligation or part thereof originally intended to be satisfied shall be revived and continued in full force and effect
as if such payment had not been made or such enforcement or setoff had not occurred.
6.15 Usury.
To the extent it may lawfully do so, the Company hereby agrees not to insist upon or plead or in any manner whatsoever claim, and will
resist any and all efforts to be compelled to take the benefit or advantage of, usury laws wherever enacted, now or at any time hereafter
in force, in connection with any Action or Proceeding that may be brought by any Purchaser in order to enforce any right or remedy under
any Transaction Document. Notwithstanding any provision to the contrary contained in any Transaction Document, it is expressly agreed
and provided that the total liability of the Company under the Transaction Documents for payments in the nature of interest shall not
exceed the maximum lawful rate authorized under applicable law (the “Maximum Rate”), and, without limiting the foregoing,
in no event shall any rate of interest or default interest, or both of them, when aggregated with any other sums in the nature of interest
that the Company may be obligated to pay under the Transaction Documents exceed such Maximum Rate. It is agreed that if the maximum contract
rate of interest allowed by law and applicable to the Transaction Documents is increased or decreased by statute or any official governmental
action subsequent to the date hereof, the new maximum contract rate of interest allowed by law will be the Maximum Rate applicable to
the Transaction Documents from the effective date thereof forward, unless such application is precluded by applicable law. If under any
circumstances whatsoever, interest in excess of the Maximum Rate is paid by the Company to any Purchaser with respect to indebtedness
evidenced by the Transaction Documents, such excess shall be applied by the Purchaser to the unpaid principal balance of any such indebtedness
or be refunded to the Company, the manner of handling such excess to be at the Purchaser’s election.
6.16 Liquidated
Damages. The Company’s obligations to pay any partial liquidated damages or other amounts owing under the Transaction Documents
is a continuing obligation of the Company and shall not terminate until all unpaid partial liquidated damages and other amounts have been
paid notwithstanding the fact that the instrument or security pursuant to which such partial liquidated damages or other amounts are due
and payable shall have been canceled.
6.17 Saturdays,
Sundays, Holidays, etc. If the last or appointed day for the taking of any action or the expiration of any right required
or granted herein shall not be a Business Day, then such action may be taken or such right may be exercised on the next succeeding Business
Day.
6.18 Construction.
The parties agree that each of them and/or their respective counsel have reviewed and had an opportunity to revise the Transaction Documents
and, therefore, the normal rule of construction to the effect that any ambiguities are to be resolved against the drafting party shall
not be employed in the interpretation of the Transaction Documents or any amendments thereto. In addition, each and every reference to
share prices and Common Stock in any Transaction Document shall be subject to adjustment for reverse and forward stock splits, stock dividends,
stock combinations and other similar transactions of the Common Stock that occur after the date of this Agreement. In this Agreement,
unless the context otherwise requires: (i) whenever required by the context, any pronoun used in this Agreement shall include the corresponding
masculine, feminine or neuter forms, and the singular form of nouns, pronouns and verbs shall include the plural and vice versa; (ii)
“including” (and with correlative meaning “include”) means including without limiting the generality of any description
preceding or succeeding such term and shall be deemed in each case to be followed by the words “without limitation”; and (iii)
the words “herein”, “hereto” and “hereby” and other words of similar import in this Agreement shall
be deemed in each case to refer to this Agreement as a whole and not to any particular portion of this Agreement.
40
6.19 Exculpation.
Each Purchaser, severally and not jointly, acknowledges and agrees that (i) neither the Placement Agent nor its Affiliates or any control
persons, officers, directors, employees, partners, agents or Representatives of the foregoing have any duties or obligations other than
those specifically set forth herein or in the Engagement Letter, (ii) neither the Placement Agent nor its Affiliates or any control persons,
officers, directors, employees, partners, agents or Representatives of the foregoing make any representation or warranty, or have any
responsibilities as to the validity, accuracy, value or genuineness of any information, certificates or documentation delivered by or
on behalf of the Company pursuant to this Agreement or the Transaction Documents or in connection with any of the transactions, and (iii)
no Placement Agent, its Affiliates or any control persons, officers, directors, employees, partners, agents or Representatives of the
foregoing shall have any liability to the Purchaser, or to any person claiming through the Purchaser, pursuant to, arising out of or relating
to the Transaction Documents, the negotiation hereof or its subject matter, or the transactions contemplated hereby, including, without
limitation, with respect to any action heretofore or hereafter taken or omitted to be taken by any of them in connection with the purchase
of the Securities or with respect to any claim (whether in contract, tort, under federal or state securities laws or otherwise) for breach
of the Transaction Documents or in respect of any written or oral representations made or alleged to be made in connection herewith, as
expressly provided herein, or for any actual or alleged inaccuracies, misstatements, or omissions with respect to any information or materials
of any kind furnished by the Company, the Placement Agent or the SPAC concerning the Company, the SPAC, the Placement Agent, any of their
controlled Affiliates, the Transaction Documents or the transactions contemplated hereby. This undertaking is given freely and after obtaining
independent legal advice.
6.20 No
Other Brokers. The Company and each Purchaser, severally and not jointly, represent and warrant to the other parties that, except
for the Placement Agent, no broker or finder is entitled to any brokerage or finder’s fee or commission to be paid in connection
with the sale of the Securities to the Purchasers. Each of the Company and each Purchaser, severally and not jointly, agree to indemnify
and save the other Parties hereto harmless from any claim or demand for commission or other compensation by any broker, finder, financial
consultant or similar agent other than the Placement Agent claiming to have been employed by or on behalf of such Party and to bear the
cost of legal expenses incurred in defending against any such claim.
6.21 WAIVER
OF JURY TRIAL. IN ANY ACTION, SUIT, OR PROCEEDING IN ANY JURISDICTION BROUGHT BY ANY PARTY AGAINST ANY OTHER PARTY, THE PARTIES
EACH KNOWINGLY AND INTENTIONALLY, TO THE GREATEST EXTENT PERMITTED BY APPLICABLE LAW, HEREBY ABSOLUTELY, UNCONDITIONALLY, IRREVOCABLY
AND EXPRESSLY WAIVE FOREVER TRIAL BY JURY.
(Signature Pages Follow)
41
IN WITNESS WHEREOF,
the parties hereto have caused this Securities Purchase Agreement to be duly executed by their respective authorized signatories as of
the date first indicated above.
ELROY AIR, INC.
Address for Notice:
By:
Name:
Title:
Email:
With a copy to (which shall not constitute notice):
Attn:
Email:
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK—
SIGNATURE PAGE FOR PURCHASERS FOLLOWS]
[COMPANY SIGNATURE PAGE
TO ELROY AIR, INC. SPA]
IN WITNESS WHEREOF,
the undersigned have caused this Securities Purchase Agreement to be duly executed by their respective authorized signatories as of the
date first indicated above.
Name of Purchaser:
Signature of Authorized Signatory of Purchaser:
______________________________
Name of Authorized Signatory:
Title of Authorized Signatory:
Email Address of Authorized Signatory:
Address for Notice to Purchaser:
Address for Delivery of Securities to Purchaser
(if not same as address for notice):
Subscription Amount (Note Principal Amount): $
Conversion Price: $
Warrant Shares:
EIN Number:
Additional Information Election
☐ No, do not provide the Additional Information
If you have elected “No” above,
please sign where indicated below to confirm that you agree to the following:
The Purchaser acknowledges and understands that
(i) the Company, the SPAC, the Placement Agents, and their respective affiliates possess material nonpublic information regarding the
Company and the SPAC, including the information set forth on the Company Disclosure Letter and the Company Financials not known to the
Purchaser that may impact the value of the Securities (the “Additional Information”), and that the Company, the SPAC
and the Placement Agents are not disclosing the Information to the Purchaser. The Purchaser understands, based on its experience, the
disadvantage to which the Purchaser is subject due to the disparity of information between the Company, the SPAC and the Placement Agents,
on the one hand, and the Purchaser, on the other hand. Notwithstanding such disparity, the Purchaser has deemed it appropriate to enter
into this Agreement and to purchase the Securities.
The Purchaser agrees that none of the Company,
the SPAC, the Placement Agents, or their respective affiliates, principals, stockholders, partners, employees and agents shall have any
liability to the Purchaser, its affiliates, principals, stockholders, partners, employees, agents, grantors or beneficiaries, whatsoever
due to or in connection with the Company’s, the SPAC’s and/or the Placement Agents’ use or non-disclosure of the Information
or otherwise as a result of this Agreement or the Purchaser’s acquisition of the Securities, and the Purchaser hereby irrevocably
waives any claim that it might have based on the failure of the Company, the SPAC and/or the Placement Agents to disclose the Information.
The Purchaser acknowledges that (i) the Company,
the SPAC and the Placement Agents are relying on the Purchaser’s representations, warranties, acknowledgments and agreements set
forth above as a condition to proceeding with the transactions contemplated by this Agreement; and (ii) without such representations,
warranties and agreements, the Company, the SPAC and the Placement Agents would not enter into this Agreement or engage in the transactions
contemplated thereby.
Signature of Authorized Signatory of Purchaser:
______________________________
Name of Authorized Signatory:
Title of Authorized Signatory:
[PURCHASER SIGNATURE
PAGE TO ELROY AIR, INC. SPA]
Schedule A
Name of Purchaser
Subscription Amount
Note Principal Amount
Warrant Shares
(Common Stock)
SCHEDULE B
ELIGIBILITY REPRESENTATIONS OF PURCHASER
A. QUALIFIED INSTITUTIONAL BUYER STATUS
(Please check the applicable subparagraphs):
☐ We are a
“qualified institutional buyer” (as defined in Rule 144A under the Securities Act of 1933, as amended (the
“Securities Act”) (a “QIB”)).
☐ We are subscribing
for the Securities as a fiduciary or agent for one or more investor accounts, and each owner of such account is a QIB.
*** OR ***
B. INSTITUTIONAL ACCREDITED INVESTOR STATUS (Please check the applicable subparagraphs):
☐ We are an institutional
“accredited investor” (as described in Rule 501(a)(1), (2), (3) or (7) under the Securities Act) and have marked and initialed
the appropriate box on the following page indicating the provision under which we qualify as an “accredited investor.”
*** AND ***
C. AFFILIATE STATUS
(Please check the applicable box) PURCHASER:
☐ is:
☐ is not:
an “affiliate” (as defined
in Rule 144 under the Securities Act) of the Issuer or acting on behalf of an affiliate of the Issuer.
This page should be completed by Purchaser
and constitutes a part of the Securities Purchase Agreement.
Rule 501(a) under the Securities Act, in relevant
part, states that an “accredited investor” shall mean any person who comes within any of the below listed categories, or who
the Issuer reasonably believes comes within any of the below listed categories, at the time of the sale of the securities to that person.
Purchaser has indicated, by marking and initialing the appropriate box below, the provision(s) below which apply to Purchaser and under
which Purchaser accordingly qualifies as an “accredited investor.”
☐ Any bank as defined in section 3(a)(2)
of the Securities Act, or any savings and loan association or other institution as defined in section 3(a)(5)(A) of the Securities Act
whether acting in its individual or fiduciary capacity;
☐ Any broker or dealer registered
pursuant to section 15 of the Securities Exchange Act of 1934, as amended;
☐ Any insurance company as defined
in section 2(a)(13) of the Securities Act;
☐ Any investment company registered
under the Investment Company Act of 1940, as amended (the “Investment Company Act”) or a business development company
as defined in section 2(a)(48) of the Investment Company Act;
☐ Any Small Business Investment Company
licensed by the U.S. Small Business Administration under section 301(c) or (d) of the Small Business Investment Act of 1958, as amended;
☐ Any plan established and maintained
by a state, its political subdivisions, or any agency or instrumentality of a state or its political subdivisions, for the benefit of
its employees, if such plan has total assets in excess of $5,000,000;
☐ Any employee benefit plan within
the meaning of the Employee Retirement Income Security Act of 1974, as amended (“ERISA”), if (i) the investment decision
is made by a plan fiduciary, as defined in section 3(21) of ERISA, which is either a bank, a savings and loan association, an insurance
company, or a registered investment adviser, (ii) the employee benefit plan has total assets in excess of $5,000,000 or, (iii) such plan
is a self-directed plan, with investment decisions made solely by persons that are “accredited investors”;
☐ Any private business development
company as defined in section 202(a)(22) of the Investment Advisers Act of 1940, as amended;
☐ Any (i) corporation, limited liability
company or partnership, (ii) Massachusetts or similar business trust, or (iii) organization described in section 501(c)(3) of the Internal
Revenue Code of 1986, as amended, not formed for the specific purpose of acquiring the securities offered, and with total assets in excess
of $5,000,000; or
☐ Any trust, with total assets in
excess of $5,000,000, not formed for the specific purpose of acquiring the securities offered, whose subscription is directed by a sophisticated
person as described in Section 230.506(b)(2)(ii) of Regulation D.
PURCHASER:
Print Name:
By:
Name:
Title:
Exhibit A
FORM OF CONVERTIBLE NOTE
Exhibit B
FORM OF WARRANT
EX-99.2 — FORM OF PRE-FUNDED SPA (OTHER INVESTORS)
EX-99.2
Filename: ea029643801ex99-2.htm · Sequence: 12
Exhibit 99.2
SECURITIES PURCHASE AGREEMENT
This Securities Purchase Agreement
(this “Agreement”) is dated as of June 25, 2026 (the “Effective Date”), by and among Elroy Air,
Inc., a Delaware corporation (the “Company”), and the purchasers identified on the signature pages hereto (including
their respective successors and assigns, each a “Purchaser” and collectively, the “Purchasers”).
WHEREAS, subject to
the terms and conditions set forth in this Agreement and pursuant to Section 4(a)(2) of the Securities Act (as defined below), the Company
desires to issue and sell to the Purchasers, and the Purchasers desire to purchase from the Company, convertible promissory notes and
warrants as more fully described in this Agreement.
WHEREAS, concurrently
with the execution and delivery of this Agreement, the Company is entering into a securities purchase agreement of even date herewith
(the “Other SPA”) with certain other purchasers party thereto, pursuant to which the Company will issue and sell convertible
promissory notes and warrants on substantially the same terms and conditions as set forth herein, with such transactions being facilitated
through a placement agent and constituting part of the same financing contemplated by this Agreement.
NOW, THEREFORE, IN CONSIDERATION
of the mutual covenants contained in this Agreement, and for other good and valuable consideration the receipt and adequacy of which are
hereby acknowledged, the Company and the Purchasers, severally and not jointly, agree as follows:
Article
1
DEFINITIONS
1.1 Definitions.
In addition to the terms defined elsewhere in this Agreement, the following terms have the meanings set forth in this Section 1.1:
“Action”
means any action, suit, inquiry, notice of violation, proceeding or investigation pending or, to the knowledge of the applicable party,
threatened against or affecting the applicable party or any of its properties before or by any court, arbitrator, governmental or administrative
agency or regulatory authority (federal, state, county, local or foreign).
“Additional Information”
means the Company’s financial statements and the Company Disclosure Letter.
“Affiliate”
means any Person that, directly or indirectly through one or more intermediaries, controls or is controlled by or is under common control
with a Person, as such terms are used in and construed under Rule 405 under the Securities Act.
“Aviation Authority”
means the Federal Aviation Administration, the Department of Transportation, the National Transportation Safety Board, or any foreign
civil aviation authority or equivalent Governmental Authority having jurisdiction over the design, manufacture, certification, registration,
operation or export of aircraft, unmanned aircraft systems, or aviation products.
“BSA” means
the Bank Secrecy Act (31 U.S.C. Section 5311 et seq.), as amended by the USA PATRIOT Act of 2001 (the “PATRIOT Act”),
and its implementing regulations (collectively, the “BSA/PATRIOT Act”).
“Business Combination”
means, collectively, the transactions contemplated by the Business Combination Agreement.
“Business Combination
Agreement” means the Business Combination Agreement that the Company anticipates entering into with Columbus Circle Capital
Corp II, a special purpose acquisition company (the “SPAC”).
“Business Day”
means any day other than Saturday, Sunday or other day on which commercial banks in the City of New York are authorized or required by
law to remain closed; provided, however, that, commercial banks shall not be deemed to be authorized or required
by law to remain closed due to “stay at home,” “shelter-in-place,” “non-essential employee” or any
other similar orders or restrictions or the closure of any physical branch locations at the direction of any governmental authority so
long as the electronic funds transfer systems (including for wire transfers) of commercial banks in the City of New York generally are
open for use by customers on such day.
“Charter”
means the Amended and Restated Certificate of Incorporation of the Company, effective as of May 8, 2025, as the same may be amended, restated
or otherwise modified from time to time.
“Closing”
means the closing of the purchase and sale of the Securities pursuant to Section 2.1(a).
“Closing Date”
means the date on which Closing occurs.
“Commission”
means the United States Securities and Exchange Commission.
“Common Stock”
means the common stock, par value $0.0001 per share, of the Company.
“Consent”
means any consent, approval, waiver, authorization or Permit of, or notice to or declaration or filing with any Governmental Authority
or any other Person.
“Contracts”
means all legally binding contracts, agreements, binding arrangements, bonds, notes, indentures, mortgages, debt instruments, purchase
order, licenses (and all Company IP Licenses and other contracts, agreements or binding arrangements concerning Intellectual Property),
franchises, leases and other instruments or obligations of any kind, written or oral (including any amendments and other modifications
thereto).
“Conversion Shares”
means the shares of Common Stock issued and issuable upon conversion of the Notes in accordance with the terms thereof.
“Company Benefit
Plan” means any and all deferred compensation, executive compensation, incentive compensation, equity purchase or other equity-based
compensation plan, employment or consulting, severance or termination pay, holiday, vacation or other bonus plan or practice, hospitalization
or other medical, life or other insurance, supplemental unemployment benefits, profit sharing, pension, or retirement plan, program, agreement,
commitment or arrangement, and each other employee benefit plan, program, agreement or arrangement, including each “employee benefit
plan” as such term is defined under Section 3(3) of ERISA, maintained or contributed to or required to be contributed to by the
Company for the benefit of any employee or terminated employee of the Company.
“Company Common Stock”
means collectively, shares of (i) common stock of the Company, $0.0001 par value per share, and (ii) non-voting common stock of the Company,
$0.0001 par value per share.
“Company Convertible
Security” means each convertible promissory note, simple agreement for future equity or similar instrument or Contract issued
by the Company or entered into by the Company pursuant to which any Person has the right to convert or exchange such instrument or Contract
into equity securities of the Company (excluding the Notes, the Warrants and Company Options).
“Company Entities”
means the Company and its subsidiaries.
“Company IP”
means any and all Intellectual Property that is owned or purported to be owned (in whole or in part), licensed, used or held for use by
the Company.
“Company IP Licenses”
means any Intellectual Property licenses, sublicenses and other agreements or permissions that the Company is party to or is otherwise
authorized to use or practice any Intellectual Property under, excluding Off-the-Shelf Software and non-exclusive licenses of Intellectual
Property granted in agreements with suppliers, customers or end users in the ordinary course of business where the license is not the
primary purpose of the agreement.
2
“Company Material
Adverse Effect” means any event, state of facts, condition, change, development, circumstance, occurrence or effect (collectively,
“Events”), that (i) has had, or would reasonably be expected to have, individually or in the aggregate, a material
adverse effect on the business, assets, results of operations or financial condition of the Company Entities, taken as a whole, or (ii)
does or would reasonably be expected to, individually or in the aggregate, prevent, materially delay or materially impede the ability
of the Company Entities to consummate the transactions contemplated hereby or in any of the other Transaction Documents; provided, however,
that in no event would any of the following, alone or in combination, be deemed to constitute, or be taken into account in determining
whether there has been or will be, a “Company Material Adverse Effect”: (a) any change in applicable laws, statutes,
regulations, ordinances, rules, or Governmental Authority orders or requirements (including regulations promulgated by the Federal Aviation
Administration, airworthiness certification requirements, or unmanned aircraft systems regulations or laws, regulations, or standards
specifically applicable to autonomous aerial vehicles or cargo drone operations) or GAAP or any interpretation thereof following the date
of this Agreement, (b) any change in interest rates or economic, political, business or financial market conditions generally, (c) the
taking of any action required by this Agreement or any other Transaction Document, (d) any natural disaster (including hurricanes, storms,
tornados, flooding, earthquakes, volcanic eruptions or similar occurrences), pandemic or change in climate, (e) any acts of terrorism
or war, the outbreak or escalation of hostilities, geopolitical conditions, local, national or international political conditions, (f)
any failure of the Company Entities to meet any projections or forecasts (provided that clause (f) shall not prevent a determination that
any Event not otherwise excluded from this definition of Company Material Adverse Effect underlying such failure to meet projections or
forecasts has resulted in a Company Material Adverse Effect), (g) any Events generally applicable to the industries or markets in which
the Company Entities operate (including increases in the cost of products, supplies, materials or other goods purchased from third party
suppliers), (h) the announcement of this Agreement or any other Transaction Document and consummation of the transactions contemplated
hereby and thereby, including any termination of, reduction in or similar adverse impact (but in each case only to the extent attributable
to such announcement or consummation) on relationships, contractual or otherwise, with any landlords, customers, suppliers, distributors,
partners or employees of the Company Entities, (i) the expiration, non-renewal, or termination of commercial contracts to which any of
the Company Entities are a party, in each case occurring in the ordinary course of business or at the stated expiration date of such contract,
or (j) any action taken by, or at the request of, the Requisite Purchasers; provided, further, that any Event referred to in clauses (a),
(b), (d), (e) or (g) above may be taken into account in determining if a Company Material Adverse Effect has occurred to the extent it
has a disproportionate and adverse effect on the business, assets, results of operations or condition (financial or otherwise) of the
Company Entities, taken as a whole, relative to similarly situated companies in the industry in which the Company Entities conduct their
respective operations, but only to the extent of the incremental disproportionate effect on the Company Entities, taken as a whole, relative
to similarly situated companies in the industry in which the Company Entities conduct their respective operations.
“Company Options”
means all options to purchase shares of Company Common Stock that are outstanding as of immediately prior to the Effective Date.
“Company Party”
means the Company and its directors, officers, shareholders, members, partners, employees and agents (and any other Persons with a functionally
equivalent role of a Person holding such titles notwithstanding a lack of such title or any other title), each Person who controls the
Company (within the meaning of Section 15 of the Securities Act and Section 20 of the Exchange Act), and the directors, officers, shareholders,
agents, members, partners or employees (and any other Persons with a functionally equivalent role of a Person holding such titles notwithstanding
a lack of such title or any other title) of such controlling persons.
“Company Preferred
Stock” means, collectively, the (i) Series Seed Preferred Stock, (ii) Series Seed-1 Preferred Stock, (iii) Series Seed-2 Preferred
Stock, (iv) Series Seed-3 Preferred Stock, (v) Series A-1 Preferred Stock, (vi) Series A-2 Preferred Stock, (vii) Series AA Preferred
Stock of the Company, (viii) Series AA-1 Preferred Stock, (ix) Series AA-2 Preferred Stock, (x) Series AA-3 Preferred Stock, (xi) Series
AAA Preferred Stock of the Company, (xii) Series AAA-1 Preferred Stock, (xiii) Series A Prime Preferred Stock, (xiv) Series Seed Prime
Preferred Stock, (xv) Series A Prime Non-Voting Preferred Stock, and (xvi) Series Seed Prime Non-Voting Preferred Stock.
“Company Securities”
means, collectively, the Company Common Stock, the Company Preferred Stock, the Company Convertible Securities, the Company Options, the
Company Warrants and all other shares, warrants and other securities of the Company.
“Company Warrants”
means all warrants to purchase any shares or other equity interests of the Company other than the Warrants.
“Enforceability Exceptions”
means applicable bankruptcy, insolvency, reorganization and moratorium laws and other laws of general application affecting the enforcement
of creditors’ rights generally or by any applicable statute of limitation or by any valid defense of set-off or counterclaim, and
the fact that equitable remedies or relief (including the remedy of specific performance) are subject to the discretion of the court from
which such relief may be sought.
3
“Environmental Law”
means any Law in any way relating to (i) the protection of human health and safety (with respect to exposure to Hazardous Materials),
(ii) the environment, (iii) natural resources (including air, water vapor, surface water, groundwater, drinking water supply, surface
land, subsurface land, plant and animal life or any other natural resource), (iv) pollution, or (v) Hazardous Materials, including the
Comprehensive Environmental Response, Compensation and Liability Act, 42 USC §9601 et seq., the Resource Conservation and Recovery
Act, 42 USC §6901 et seq., the Toxic Substances Control Act, 15 USC §2601 et seq., the Federal Water Pollution Control Act,
33 USC §1251 et seq., the Clean Air Act, 42 USC §7401 et seq., the Federal Insecticide, Fungicide and Rodenticide Act, 7 USC
§136 et seq., the Occupational Safety and Health Act, 29 USC §651 et seq. (to the extent it relates to exposure to Hazardous
Materials), the Asbestos Hazard Emergency Response Act, 15 USC §2641 et seq., the Safe Drinking Water Act, 42 USC §300f et seq.,
the Oil Pollution Act of 1990, 33 USC §2701 et seq., and analogous state acts.
“Environmental Liabilities”
means, in respect of any Person, all Liabilities, obligations, responsibilities, Remedial Legal Proceedings, losses, damages, costs, and
expenses (including all reasonable fees, disbursements, and expenses of counsel, experts, and consultants and costs of investigation and
feasibility studies), fines, penalties, sanctions, and interest incurred as a result of any claim or demand by any other Person or in
response to any violation of Environmental Law, whether known or unknown, accrued or contingent, whether based in contract, tort, implied
or express warranty, strict liability, criminal or civil statute, to the extent based upon, related to, or arising under or pursuant to
any Environmental Law, Environmental Permit, Order, or Contract with any Governmental Authority or other Person, that relates to any environmental,
health or safety condition, violation of Environmental Law, or a Release or threatened Release of Hazardous Materials.
“ERISA Affiliate”
means each “person” (as defined in Section 3(9) of ERISA) which together with the Company would be deemed to be a “single
employer” within the meaning of Section 414(b), (c), (m) or (o) of the Code.
“Exchange Act”
means the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder.
“GAAP”
means generally accepted accounting principles in the U.S.
“Governmental Authority”
means any federal, state, municipal, local or other foreign or domestic governmental, quasi-governmental, or administrative body, instrumentality,
department, or agency, any court, tribunal, administrative hearing body, arbitration panel, commission, or other similar dispute-resolving
panel or body, or any government-owned entity.
“Government Official”
shall mean any individual working for or on behalf of a Governmental Authority. Examples include a foreign customs official; an inspector
from a tax, health, or environmental agency; an employee in the procurement department of a state-owned manufacturer; a journalist employed
by a state-owned media company; and a professor or researcher at a state-owned university.
“Hazardous Material”
means any waste, gas, liquid or other substance or material that is defined, listed, classified or designated as a “hazardous substance”,
“pollutant”, “contaminant”, “hazardous waste”, “regulated substance”, “hazardous
chemical”, “toxic chemical”, or “waste” (or by any similar term) under any Environmental Law, or any other
material regulated, or that could result in the imposition of Liability or responsibility, under any Environmental Law, including oil,
petroleum, petroleum products and by-products, petroleum breakdown products, asbestos, radioactive materials, polychlorinated biphenyls,
radon, mold, urea formaldehyde insulation and per- and polyfluoroalkyl substances.
“Indebtedness”
of any Person means, without duplication, (i) all indebtedness of such Person for borrowed money (including the outstanding principal
and accrued but unpaid interest), (ii) all obligations for the deferred purchase price of property or services (other than trade payables
incurred in the ordinary course of business), (iii) any other indebtedness of such Person that is evidenced by a note, bond, debenture,
credit agreement or similar instrument, (iv) all obligations of such Person under leases that should be classified as capital leases in
accordance with GAAP (other than real estate leases and any other leases that would be required to be capitalized only upon adoption of
ASC 842), (v) all obligations of such Person for the reimbursement of any obligor on any line or letter of credit, banker’s acceptance,
guarantee or similar credit transaction, in each case, that has been drawn or claimed against, (vi) all interest rate and currency swaps,
caps, collars and similar agreements or hedging devices under which payments are obligated to be made by such Person, whether periodically
or upon the happening of a contingency, (vii) all obligations secured by a Lien securing debt for borrowed money on any property of such
Person (other than Permitted Liens), (viii) any premiums, prepayment fees or other penalties, fees, costs or expenses associated with
payment of any Indebtedness of such Person and (ix) all obligation described in clauses (i) through (viii) above of any other Person which
is directly or indirectly guaranteed by such Person or which such Person has agreed (contingently or otherwise) to purchase or otherwise
acquire or in respect of which it has otherwise assured a creditor against loss.
4
“Inflection Point”
means Inflection Point Asset Management LLC and/or one or more of its Affiliates.
“Intellectual Property”
means any and all intellectual or proprietary property and all rights, title, and interest therein or thereto arising anywhere in the
world, including all United States, international and foreign: (i) patents and patent applications, patent improvements, disclosures and
inventions, (whether patentable or unpatentable and whether or not reduced to practice), including any continuations, divisions, continuations
in part, renewals, divisionals, extensions, substitutions, reexaminations, reissues or foreign counterparts of any of the foregoing; (ii)
all trade names, trade dress, trademarks, service marks, slogans, logos or internet domain name registrations, social media usernames,
handles, and any other similar identifiers of source of origin, including all goodwill associated therewith, together with all registrations
and applications relating thereto; (iii) copyrights (whether registered or unregistered), original works of authorship, copyrightable
works and subject matter, together with all registrations and applications relating thereto; (iv) all proprietary databases and data;
(v) all industrial designs and any registrations and applications therefor throughout the world; (vi) Trade Secrets, (vii) Software and
data, databases, compilations, and any other electronic data files, including any and all collections of data, whether machine readable
or otherwise; (viii) rights to sue or recover and retain damages and costs and attorneys’ fees for the past, present or future infringement,
dilution, misappropriation, or other violation of any of the foregoing anywhere in the world; (ix) any and all other intellectual or industrial
property rights protectable by applicable law in any jurisdiction; and (x) all issuances, renewals, registrations and applications of
or for any of the foregoing.
“IT Assets”
means the technology, devices, computers, hardware, Software (including firmware and middleware), systems, sites, servers, networks, workstations,
routers, hubs, circuits, switches, interfaces, websites, platforms, data communications lines, automated networks and control systems,
cloud computing arrangements, and all other information or operational technology, telecommunications, or data processing assets, facilities,
systems services, or equipment, and all data stored therein or processed thereby, which are material to the operations of the Company,
and all associated documentation, in each case, owned or leased by, licensed to, or used by the Company in the conduct of its business.
“Knowledge”
means, with respect to the Company, the actual knowledge, after reasonable inquiry, of the individuals set forth on Schedule 1.1 of the
Company Disclosure Letter.
“Law” means
any federal, state, local, municipal, foreign or other law, statute, legislation, principle of common law, ordinance, code, edict, decree,
proclamation, treaty, convention, rule, regulation, directive, requirement, writ, injunction, settlement, Order or Consent that is or
has been issued, enacted, adopted, passed, approved, promulgated, made, implemented or otherwise put into effect by or under the authority
of any Governmental Authority.
“Legal Proceeding”
means any notice of noncompliance or violation, or any claim, demand, charge, action, suit, litigation, audit, settlement, complaint,
stipulation, assessment or arbitration, or examination, or any request (including any request for information), inquiry, hearing, proceeding
or investigation, by or before any Governmental Authority.
“Liabilities”
means any and all liabilities, Indebtedness, Legal Proceedings or obligations of any nature (whether absolute, accrued, contingent or
otherwise, whether known or unknown, whether direct or indirect, whether matured or unmatured, whether due or to become due and whether
or not required to be recorded or reflected on a balance sheet under GAAP or other applicable accounting standards).
“Lien”
means any mortgage, deed of trust, pledge, security interest, attachment, right of first refusal, right of first offer, option, proxy,
voting trust, license, encumbrance, easement, covenant, lien or charge of any kind (including any conditional sale or other title retention
agreement or lease in the nature thereof), restriction (whether on voting, sale, transfer, disposition or otherwise), any subordination
arrangement in favor of another Person, or any filing or agreement to file a financing statement as debtor under the Uniform Commercial
Code or any similar Law.
5
“Losses”
means losses, liabilities, obligations, claims, damages, costs and expenses, including all judgment, amounts paid in settlements, court
costs and reasonable attorneys’ fees and costs of investigation.
“Merger”
means the merger of the Merger Sub with and into the Company, pursuant to the terms and conditions of the Business Combination Agreement.
“Merger Sub”
means IPGX Merger Sub, Inc., a Delaware corporation and a direct wholly-owned subsidiary of Columbus Circle Capital Corp II.
“Notes”
means the convertible promissory notes issued by the Company to the Purchasers at the Closing, substantially in the form of Exhibit
A hereto, bearing interest, convertible into shares of Common Stock and having the terms and conditions set forth therein and
the convertible promissory notes issued by the Company to other purchasers under the Other SPA at the Closing.
“OFAC”
means the U.S. Treasury Department’s Office of Foreign Assets Control.
“OFAC Lists”
means any sanctions lists administered by OFAC.
“Off-the-Shelf Software”
means “shrink wrap,” “click wrap,” and “off the shelf” software agreements and other agreements for
Software commercially available to the public on standard terms and conditions with an annual cost of less than $100,000 per year.
“Open Source Software”
means any code or software governed by any license meeting the Open Source Definition (as promulgated by the Open Source Initiative) or
the Free Software Definition (as promulgated by the Free Software Foundation), or any substantially similar license, including any license
approved by the Open Source Initiative or any Creative Commons License.
“Order”
means any order, decree, ruling, judgment, injunction, writ, determination, binding decision, verdict, judicial award or other action
that is or has been made, entered, rendered, or otherwise put into effect by or under the authority of any Governmental Authority.
“Organizational Documents”
means, with respect to any Person that is an entity, its certificate or articles of incorporation or formation, bylaws, operating agreement,
memorandum and articles of association or similar organizational documents, in each case, as amended.
“Owned Intellectual
Property” means any and all Intellectual Property which the Company owns (or purports to own), in whole or in part, and includes
the Company Software and all Company Registered IP.
“Permits”
means all federal, state, local or foreign or other third-party permits, grants, easements, consents, approvals, authorizations, exemptions,
licenses, franchises, concessions, ratifications, permissions, clearances, confirmations, endorsements, waivers, certifications, designations,
ratings, registrations, qualifications or orders of any Governmental Authority or any other Person.
“Permitted Liens”
means (a) Liens for Taxes or assessments and similar governmental charges or levies, which either are (i) not yet due and payable or (ii)
being contested in good faith and by appropriate proceedings, and adequate reserves have been established with respect thereto in accordance
with GAAP; (b) mechanics’, materialmen’s, carriers’, workers’, repairers’ and other similar liens arising
or incurred in the ordinary course of business relating to obligations as to which there is no default on the part of the Company or the
validity of which are being contested in good faith by appropriate proceedings and for which adequate reserves have been established in
accordance with GAAP; (c) zoning, entitlement, environmental or conservation restrictions and other land use and environmental regulations
imposed by Governmental Authorities which, to the Knowledge of the Company, are not violated in any material respects; (d) non-monetary
Liens of record, so long as such matters do not materially interfere with or detract from the Company’s ability to conduct its business
at such property; (e) all matters that would be disclosed on an accurate survey of the Company’s real property; (f) Liens incurred
or deposits made in the ordinary course of business in connection with social security; (g) Liens on goods in transit incurred pursuant
to documentary letters of credit, in each case arising in the ordinary course of business; (h) Liens arising under this Agreement or any
Transaction Document; or (i) non-exclusive licenses of Owned Intellectual Property granted to customers, vendors or service providers
in the ordinary course of business.
6
“Person”
means an individual or corporation, partnership, trust, incorporated or unincorporated association, joint venture, limited liability company,
joint stock company, government (or an agency or subdivision thereof) or other entity of any kind.
“Personal Information”
means any information that identifies, relates to, or is linked or reasonably linkable to an individual and includes any “personal
information,” “personal data” or similar term as defined by Data Protection Laws.
“Personal Property”
means any machinery, equipment, tools, vehicles, furniture, leasehold improvements, office equipment, plant, parts and other tangible
personal property.
“Proceeding”
means an action, claim, suit, investigation or proceeding, whether commenced or threatened.
“Purchaser Party”
means with respect to each Purchaser, such Purchaser and such Purchaser’s directors, officers, shareholders, members, partners,
employees and agents (and any other Persons with a functionally equivalent role of a Person holding such titles notwithstanding a lack
of such title or any other title), each Person who controls such Purchaser (within the meaning of Section 15 of the Securities Act and
Section 20 of the Exchange Act), and the directors, officers, shareholders, agents, members, partners or employees (and any other Persons
with a functionally equivalent role of a Person holding such titles notwithstanding a lack of such title or any other title) of such controlling
persons.
“Related Person”
means any officer, director, manager, employee, trustee or beneficiary of the Company or any of its Affiliates and any immediate family
member of any of the foregoing.
“Release”
means any release, spill, emission, leaking, pumping, injection, deposit, disposal, discharge, dispersal, migrating or leaching into the
indoor or outdoor environment, or into or out of any property.
“Remedial Legal Proceeding”
means all actions to (i) clean up, remove, treat, or in any other way address any Hazardous Material, (ii) prevent the Release of any
Hazardous Material so it does not endanger or threaten to endanger public health or welfare or the indoor or outdoor environment, (iii)
perform pre-remedial studies and investigations or post-remedial monitoring and care, or (iv) correct or otherwise respond to a condition
of noncompliance with Environmental Laws.
“Requisite Purchasers”
means Purchasers holding a majority of the principal amount outstanding under the Notes issued under this Agreement and the Other SPA,
which majority must include Inflection Point to the extent it then holds any Notes.
“Securities”
means the Notes, the Warrants and the Underlying Shares.
“Securities Act”
means the Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder.
“Security Breach”
means any data breach or security incident that (i) materially impacts the confidentiality, integrity or availability of (a) the Personal
Information that is Processed by the Company, or (b) the IT Assets that are material to the operations of the Company or the Processing
of Personal Information by the Company, or (ii) is otherwise required to be notified or reported to an individual regulator or other third
party under applicable Law or pursuant to an obligation under a Contract that is legally binding on the Company.
“Short Sales”
shall include, without limitation, all “short sales” as defined in Rule 200 of Regulation SHO under the Exchange Act and all
types of direct and indirect stock pledges (other than pledges in the ordinary course of business as part of prime brokerage arrangements),
forward sale contracts, options, puts, calls, swaps and similar arrangements (including on a total return basis), and sales and other
transactions through non-U.S. broker dealers or foreign regulated brokers.
7
“Software”
means any and all software, firmware and computer programs and applications, including any and all source code, descriptions, schematics,
specifications, flow charts, object code, middleware, utilities, computer programs, application programming interfaces, algorithms, plugins,
libraries, subroutines, tools, drivers, microcode, scripts, batch files, instruction sets and macros, models, methodologies and other
work product used in design, plan, organize and develop any of the foregoing, in each case of the foregoing whether in source code, executable
or object code form, documentation related thereto including user manuals, user documentation, and training materials, files, records
and other work product related to any of the foregoing and all software modules, tools and databases and collections of data.
“Subscription Amount”
shall mean, as to each Purchaser, the aggregate amount to be paid for the Note and Warrants purchased hereunder pursuant to the terms
of this Agreement as set forth across from such Purchaser’s name on Schedule A hereto in U.S. dollars and in immediately
available funds.
“Subsidiary”
means, with respect to any Person, any company, partnership, association or other business entity of which (i) if a company, a majority
of the total voting power of shares of stock entitled (without regard to the occurrence of any contingency) to vote in the election of
directors, managers or trustees thereof is at the time owned or controlled, directly or indirectly, by that Person or one or more of the
other Subsidiaries of that Person or a combination thereof, or (ii) if a partnership, association or other business entity, a majority
of the partnership or other similar ownership interests thereof is at the time owned or controlled, directly or indirectly, by any Person
or one or more Subsidiaries of that Person or a combination thereof. For purposes hereof, a Person or Persons will be deemed to have a
majority ownership interest in a partnership, association or other business entity if such Person or Persons will be allocated a majority
of partnership, association or other business entity gains or losses or will be or control the managing director, managing member, general
partner or other managing Person of such partnership, association or other business entity. A Subsidiary of a Person will also include
any variable interest entity which is consolidated with such Person under applicable accounting rules.
“Tax Return”
means any return, form, declaration, election, disclosure, report, claim for refund, information return or other documents (including
any related or supporting schedules, statements or information) filed or required to be filed in connection with the determination, assessment
or collection of any Taxes or the administration of any Laws or administrative requirements relating to any Taxes.
“Taxes”
means all direct or indirect federal, state, local, foreign and other net income, gross income, gross receipts, sales, use, value-added,
ad valorem, transfer, franchise, profits, license, lease, service, service use, withholding, payroll, employment, social security and
related contributions due in relation to the payment of compensation to employees, excise, severance, stamp, occupation, premium, property,
windfall profits, alternative minimum, estimated, customs, duties or other taxes, fees, assessments or charges in the nature of a tax,
together with any interest and any penalties, additions to tax or additional amounts with respect thereto imposed by a Governmental Authority.
“Transaction Documents”
means this Agreement, the Other SPA, the Notes, the Charter, the Warrants, and all exhibits and schedules thereto.
“Underlying Shares”
means the Conversion Shares and the Warrant Shares.
“U.S.”
means the United States of America.
“Warrant Shares”
means the shares of Common Stock issuable upon exercise of the Warrants.
“Warrants”
means, collectively, the Common Stock purchase warrants delivered to the Purchasers at the Closing in accordance with Section 2.2(a)(ii)
hereof, which Warrants shall be in the form of Exhibit B attached hereto and the Common Stock purchase warrants delivered
by the Company to other purchasers under the Other SPA at the Closing.
8
Article
2
PURCHASE AND SALE
2.1 Closing
and Subsequent Closings.
(a) On
the Closing Date, upon the terms and subject to the conditions set forth herein, the Company agrees to sell, and each Purchaser, severally
and not jointly, agrees to purchase, a Note in the original principal amount set forth opposite such Purchaser’s name on Schedule A
hereto, and a Warrant to purchase the number of shares of Common Stock set forth opposite such Purchaser’s name on Schedule A
hereto, for an amount equal to such Purchaser’s Subscription Amount as set forth opposite such Purchaser’s name on Schedule A
hereto. At the Closing, the Company shall deliver to the Purchaser the Notes and Warrants as determined pursuant to Section 2.1(a)
and the Company and the Purchasers, severally and not jointly, shall deliver the other items set forth in Section 2.2(b) deliverable
at the Closing. The Closing shall occur simultaneously with the execution of this Agreement (if payment of the Subscription Amount has
been received by the Company) by electronic exchange of documents and signatures or at a time and date to be agreed upon in writing by
the Company and the Requisite Purchasers.
(b) At
any time and from time to time after the Closing Date but on or prior to August 1, 2026, the Company may, without the consent of any Purchaser,
sell and issue additional Notes and Warrants to one or more additional purchasers or to existing Purchasers (each, a “Subsequent
Closing”) on the same terms and conditions as those set forth in this Agreement. Each additional purchaser participating in
a Subsequent Closing shall become a party to this Agreement as a “Purchaser” for all purposes by executing and delivering
a counterpart signature page to this Agreement (or a joinder agreement in form and substance reasonably acceptable to the Company), and
Schedule A shall be updated to reflect the Note principal amount, Subscription Amount and number of Warrant Shares applicable
to each such purchaser. Each Subsequent Closing shall be deemed a “Closing,” and the date on which each Subsequent Closing
occurs shall be deemed a “Closing Date,” for all purposes of this Agreement, and the Notes and Warrants issued at any Subsequent
Closing shall constitute “Securities” issued hereunder. The representations and warranties of the Company set forth in Article
3 and of each Purchaser set forth in Article 4 shall be made as of the date of each applicable Subsequent Closing, and the
deliveries set forth in Section 2.2 shall be made in connection with each Subsequent Closing. Notwithstanding anything to the contrary
herein, the aggregate Subscription Amounts for the Notes and Warrants sold and issued at all Subsequent Closings shall not exceed $13,375,000.
2.2 Deliveries.
On or prior to the Closing Date:
(a) The
Company shall have delivered or caused to be delivered to each Purchaser the following:
(i) A
certificate from its secretary or other executive officer, certifying as to, and attaching (A) copies of the Company’s Organizational
Documents as in effect as of the Closing Date and (B) the resolutions of the Company’s Board of Directors (the “Company
Board”) authorizing and approving the execution, delivery and performance of this Agreement and each of the other Transaction
Documents to which it is a party or by which it is bound, and the consummation of the transactions contemplated hereby and thereby.
(ii) the
Note, duly executed by the Company, in the original principal amount equal to the Subscription Amount set forth opposite such Purchaser’s
name on Schedule A hereto;
(iii) a
Warrant registered in the name of the Purchaser to purchase up to a number of shares of Common Stock set forth opposite such Purchaser’s
name on Schedule A hereto; and
(iv) wire
transfer instructions for the Company.
(b) Each
Purchaser, severally and not jointly, shall deliver or cause to be delivered to the Company the following:
(i) such
Purchaser’s counter-signature to the Note described in Section 2.2(a)(ii); and
(ii) such
Purchaser’s Subscription Amount.
9
Article
3
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
Except as set forth in the
disclosure letter dated as of the date of this Agreement delivered by the Company to the Purchasers (the “Company Disclosure
Letter”) prior to or in connection with the execution and delivery of this Agreement or as are disclosed in the Company Financials,
the Company hereby represents and warrants to the Purchasers, as of the date hereof and as of the Closing, as follows:
3.1 Existence;
Authorization; Valid Issuance; No Conflicts or Filings; No Disqualifying Events.
(a) The
Company (i) is validly existing and in good standing under the laws of the State of Delaware, (ii) has the requisite power and authority
to own, lease and operate its properties, to carry on its business as it is now being conducted and to enter into and perform its obligations
under this Agreement and the other Transaction Documents, and (iii) is duly licensed or qualified to conduct its business and, if applicable,
is in good standing under the laws of each jurisdiction (other than the State of Delaware) in which the conduct of its business or the
ownership of its properties or assets requires such license or qualification, except, with respect to the foregoing clause (iii),
where the failure to be in good standing would not reasonably be expected to have a Company Material Adverse Effect.
(b) Each
Transaction Document to which the Company is a party has been duly authorized, executed and delivered by the Company, and assuming the
due authorization, execution and delivery of the same by the Purchasers, each Transaction Document to which the Company is a party shall
constitute the valid and legally binding obligation of the Company, enforceable against the Company in accordance with its terms, except
as such enforceability may be limited by bankruptcy, insolvency, reorganization, moratorium and similar laws affecting creditors generally
and by the availability of equitable remedies.
(c) As
of the Closing Date, the Securities will be duly authorized and, when issued, paid for and delivered in accordance with the applicable
Transaction Documents, will constitute the valid and legally binding obligations of the Company, enforceable against the Company in accordance
with their respective terms, free and clear of all liens or other restrictions (other than those arising under the Transaction Documents,
the Organizational Documents of the Company or applicable securities laws), and will not have been issued in violation of any preemptive
or similar rights created under the Company’s Organizational Documents or the laws of its jurisdiction of the state of Delaware.
As of the applicable date, the shares of Preferred Stock and/or Common Stock issuable upon conversion of the Notes and exercise of the
Warrants will be duly authorized and, when issued, paid for and delivered in accordance with the applicable Transaction Documents, will
be validly issued, fully paid and non-assessable, free and clear of all liens or other restrictions (other than those arising under the
Transaction Documents, the Organizational Documents of the Company or applicable securities laws), and will not have been issued in violation
of any preemptive or similar rights created under the Company’s Organizational Documents or the laws of its jurisdiction of incorporation.
As of the applicable date, the shares of Common Stock issuable upon conversion of any shares of Preferred Stock issuable upon conversion
of the Notes will be duly authorized and, when issued, paid for and delivered in accordance with the applicable Transaction Documents,
will be validly issued, fully paid and non-assessable, free and clear of all liens or other restrictions (other than those arising under
the Transaction Documents, the Organizational Documents of the Company or applicable securities laws), and will not have been issued in
violation of any preemptive or similar rights created under the Company’s Organizational Documents or the laws of its jurisdiction
of incorporation.
(d) Assuming
the accuracy of the representations and warranties of the Purchasers set forth in Article 4 of this Agreement, the execution and
delivery of this Agreement and the other Transaction Documents, the issuance and sale of the Securities hereunder, the compliance by the
Company with all of the provisions hereof and thereof and the consummation of the transactions contemplated herein and therein will not
conflict with or result in a breach or violation of any of the terms or provisions of, or constitute a default under, or result in the
creation or imposition of any lien, charge or encumbrance upon any of the property or assets of the Company pursuant to the terms of (i)
any indenture, mortgage, deed of trust, loan agreement, lease, license or instrument to which the Company is a party or by which the Company
is bound or to which any of the property or assets of the Company is subject, (ii) the Organizational Documents of the Company, or (iii)
any statute or any judgment, order, rule or regulation of any court or governmental agency or body, domestic or foreign, having jurisdiction
over the Company or any of its properties that, in the case of clauses (i) and (iii), would reasonably be expected to have
a Company Material Adverse Effect.
10
(e) Assuming
the accuracy of the representations and warranties of the Purchasers set forth in Article 4 of this Agreement, the Company is not
required to obtain any consent, waiver, authorization or order of, give any notice to, or make any filing or registration with, any court
or other federal, state, local or other governmental authority, self-regulatory organization or other person in connection with the execution,
delivery and performance of this Agreement or the other Transaction Documents (including, without limitation, the issuance of the Securities),
other than (i) filings required by (x) applicable state securities laws and (y) federal antitrust laws and (ii) those filings, the failure
of which to obtain would not have a Company Material Adverse Effect.
(f) Except
for such matters as have not had and would not have a Company Material Adverse Effect, there is no (i) Action, Proceeding or arbitration
before a governmental authority or arbitrator pending, or, to the knowledge of the Company, threatened in writing against the Company
or (ii) judgment, decree, injunction, ruling or order of any governmental authority or arbitrator outstanding against the Company.
(g) Assuming
the accuracy of the Purchasers’ representations and warranties set forth in Article 4 of this Agreement, no registration
under the Securities Act or any state securities (or Blue Sky) laws is required for the offer and sale of the Securities by the Company
to the Purchasers.
(h) Neither
the Company nor any person acting on its behalf has engaged in any form of general solicitation or general advertising (within the meaning
of Regulation D) in connection with any offer or sale of the Securities. The Securities are not being offered in a manner involving a
public offering under, or in a distribution in violation of, the Securities Act or any state securities laws. Neither the Company nor
any person acting on the Company’s behalf has, directly or indirectly, at any time within the past six (6) months, made any offer
or sale of any security or solicitation of any offer to buy any security under circumstances that would cause the offering of the Securities
pursuant to this Agreement to be integrated with prior offerings by the Company for purposes of the Securities Act or any applicable shareholder
approval provisions. Neither the Company nor any person acting on the Company’s behalf has offered or sold any securities, or has
taken any other action, which would reasonably be expected to subject the offer, issuance or sale of the Securities, as contemplated hereby,
to the registration provisions of the Securities Act.
(i) No
“bad actor” disqualifying event described in Rule 506(d)(1)(i)-(viii) of the Securities Act (a “Disqualification
Event”) is applicable to the Company, except for a Disqualification Event as to which Rule 506(d)(2)(ii–iv) or (d)(3)
is applicable.
3.2 Capitalization.
(a) Set
forth on Section 4.03(a) of the Company Disclosure Letter is a true, correct and complete list of each record holder of Company
Securities and the number and type of Company Securities held by each such holder as of the date hereof.
(b) Prior
to giving effect to the Business Combination, all of the Company Securities are and will be owned free and clear of any Liens other than
those imposed under the Company’s Organizational Documents, applicable securities Laws, or as set forth on Section 4.03(b)(i) of
the Company Disclosure Letter. Other than the Company Securities set forth in Section 4.03(b)(ii) of the Company Disclosure Letter, the
Company does not have any other issued or outstanding common stock or any other securities. All of the issued and outstanding Company
Securities have been duly authorized and validly issued in accordance with all applicable Laws, including applicable securities Laws,
and the Company’s Organizational Documents, are fully paid and nonassessable and are not subject to, nor were they issued in violation
of, any preemptive rights, rights of first refusal or similar rights, except where such violation or failure would not reasonably be expected
to be, individually or in the aggregate, material to the Company. Except as set forth on Section 4.03(b)(iii) of the Company
Disclosure Letter or in the Company’s Organizational Documents, there are no preemptive rights or rights of first refusal or first
offer, nor are there any Contracts, commitments, arrangements or restrictions to which the Company or, to the Knowledge of the Company,
any of its security holders is a party or bound relating to any Company Securities, whether or not outstanding. Except as set forth on Section
4.03(b)(iv) of the Company Disclosure Letter or as provided for in this Agreement, there are no (1) outstanding or authorized
equity appreciation, phantom equity or similar rights with respect to the Company or (2) voting trusts, proxies, stockholder agreements
or any other agreements or understandings with respect to the voting of the Company Securities. Except as set forth in the Company’s
Organizational Documents, there are no outstanding contractual obligations of the Company to repurchase, redeem or otherwise acquire any
equity interests or securities of the Company, nor has the Company granted any registration rights to any Person with respect to its securities.
Except as disclosed in the Company Financials, the Company has not since its incorporation declared or paid any distribution in respect
of its equity interests and has not repurchased, redeemed or otherwise acquired any equity interests of the Company, and the Company Board
has not authorized any of the foregoing.
11
(c) Section
4.03(c)(i) of the Company Disclosure Letter sets forth, as of the date of this Agreement, the following information with respect
to each Company Option outstanding: (i) the name of the Company Option recipient; (ii) the number of shares of the Company subject
to such Company Option; (iii) the exercise or purchase price of such Company Option; (iv) the date on which such Company Option
was granted; (v) the vesting schedule of such Company Option; and (vi) the date on which such Company Option expires. Each Company
Option was validly granted or issued and properly approved by the Company Board (or appropriate committee thereof) and, in the case of
the Company Options, in accordance with the terms of the Company Incentive Plan or the applicable award agreement. Each Company Option
(i) was granted in compliance with all applicable Laws and all of the terms and conditions of the Company Incentive Plan or the applicable
award agreement, (ii) was not granted with an exercise price per share less than the fair market value (pursuant to Section 409A
or Section 422, as applicable, of the Code) of the underlying shares of Company Common Stock as of the date such Company Option was
granted, and (iii) has a grant date that is not earlier than the date on which the Company Board or compensation committee actually awarded
such Company Option. Section 4.03(c)(ii) of the Company Disclosure Letter sets forth the terms of any vesting acceleration rights
and any other vesting acceleration that will be applicable to any unvested Company Options. No Company Common Stock is subject to vesting
as of the date hereof. All Company Common Stock that is subject to issuance as aforesaid, upon issuance on the terms and conditions specified
in the instruments pursuant to which they are issuable, will be duly authorized, validly issued, fully paid and nonassessable. No Company
Options are “early exercisable” as of the date hereof. The Company has no outstanding commitments to grant Company Options.
(d) Section
4.03(d) of the Company Disclosure Letter sets forth, as of the date hereof, a true, correct and complete list of each holder of Company
Convertible Securities, including (i) the name of the holder, (ii) the date of issuance, (iii) the principal amount or
purchase price paid for such Company Convertible Security, and (iv) the applicable valuation cap, discount rate, or other material
economic terms. There are no side letters, amendments, waivers, or other agreements that modify the standard terms of any Company Convertible
Securities. The Company has no outstanding commitments to issue any additional Company Convertible Securities. The treatment of Company
Convertible Securities under Section 2.1(a) is permitted under applicable Laws, and the terms and conditions of
such Company Convertible Securities, or the consent of any holder thereof.
(e) Except
as provided for in this Agreement, as a result of the consummation of the Transaction, no units, warrants, options or other securities
of the Company are issuable and no rights in connection with any units, warrants, options or other securities of the Company accelerate
or otherwise become triggered (whether as to vesting, exercisability, convertibility or otherwise).
3.3 Subsidiaries.
The Company has not had and does not have any subsidiaries.
3.4 Financial
Statements.
(a) The
Company has provided to the Purchaser true, correct and complete copies of: (i) the unaudited consolidated financial statements of the
Company (including, in each case, any related notes thereto) as of and for the (x) year ended December 31, 2025 and (y) three month periods
ending March 31, 2026, each consisting of the consolidated balance sheets of the Company as of such dates and the related consolidated
income statements and statements of cash flows for the periods then ended (the “Draft Company Financials”) and (ii)
the unaudited consolidated financial statements of the Company (including, in each case, any related notes thereto) as of and for the
year ended December 31, 2024, consisting of the consolidated balance sheet of the Company as of such date and the related consolidated
income statement, changes in member equity and statement of cash flows for the fiscal year then ended, prepared in accordance with GAAP
and PCAOB (the “Unaudited Company Financials”, together with the Draft Company Financials, the “Company Financials”).
The Company Financials were derived in all material respects from the books and records of the Company, which books and records are, in
all material respects, true, correct and complete and have been maintained in all material respects in accordance with commercially reasonable
business practices. The Company Financials, when delivered, will have been prepared in all material respects, in accordance with GAAP
consistently applied throughout the periods covered thereby and present fairly in all material respects, the consolidated financial position,
results of operations, income (loss), changes in equity and cash flows of the Company as of the dates and for the periods indicated in
such Company Financials in conformity with GAAP (except in the case of the Draft Company Financials that cover a period of less than one
year for the absence of footnote disclosures and other presentation items required for GAAP and exclude year-end adjustments which will
not be material in amount) and were derived from and accurately reflect in all material respects, the books and records of the Company.
The Company has not ever been subject to the reporting requirements of Sections 13(a) and 15(d) of the Exchange Act.
12
(b) The
Company has established and maintains a system of internal controls. Such internal controls are designed to provide reasonable assurance
that (i) transactions are executed in all material respects in accordance with management’s authorization and (ii) transactions
are recorded as necessary to permit preparation of financial statements in conformity with GAAP and to maintain accountability for the
Company’s assets.
(c) The
Company has not identified and has not received written notice from an independent auditor of (x) any significant deficiency or material
weakness in the system of internal controls utilized by the Company (other than a significant deficiency or material weakness that has
been previously disclosed in writing to Purchaser and is set forth on Section 4.06(a) of the Company Disclosure Letter), (y) any material
fraud that involves the Company’s management or other employees who have a significant role in the preparation of financial statements
or the internal controls over financial reporting utilized by the Company or (z) any claim or allegation regarding any of the foregoing.
(d) There
are no outstanding loans or other extensions of credit made by the Company to any executive officer (as defined in Rule 3b-7 under the
Exchange Act) or director of the Company.
3.5 Undisclosed
Liabilities. There is no liability, debt or obligation (absolute, accrued, contingent or otherwise) of the Company of a type required
to be reflected or reserved for on a balance sheet prepared in accordance with GAAP, except for liabilities, debts and obligations: (a)
provided for in, or otherwise reflected or reserved for on the Company Financials or disclosed in the notes thereto; (b) incurred in the
ordinary course of the operation of business of the Company since the date of the most recent balance sheet included in the Company Financials;
(c) incurred in connection with the Business Combination; or (d) which would not, individually or in the aggregate, reasonably be expected
to have a Company Material Adverse Effect.
3.6 Absence
of Certain Changes. Except as set forth on Section 4.08 of the Company Disclosure Letter, and for activities conducted in connection
with this Agreement and the transactions contemplated hereby, since March 31, 2026 through the date of this Agreement, (a) the Company
has conducted its business in the ordinary course of business consistent with past practice, (b) there has not been any Company Material
Adverse Effect, and (c) the Company has not taken any action or committed or agreed to take any action that would be prohibited by Section
6.02(b) of the Business Combination Agreement (without giving effect to Section 6.02(b) of the Company Disclosure Letter) if such action
were taken on or prior to the Closing without the consent of the Purchaser.
3.7 Compliance
with Laws. Provided that this Section 3.7 shall not apply with respect to the matters covered by Section 3.23:
(a) The
Company has, during the period beginning five (5) years prior to and ending on the Closing Date, complied with, and is not currently in
violation of, any applicable Law with respect to the conduct of its business, or the ownership or operation of its business, except for
failures to comply or violations which, individually or in the aggregate, have not been and would not reasonably expected to be, material
to the Company. Except as disclosed on Section 4.09 of the Company Disclosure Letter, no written, or to the Knowledge of the Company,
oral notice of non-compliance with any applicable Law has been received that, individually or in the aggregate, would reasonably be expected
to be material to the Company. For the avoidance of doubt, compliance with aviation regulatory requirements (including requirements of
the Federal Aviation Administration, the Department of Transportation, and applicable airworthiness authorities) shall be assessed solely
with reference to the Company Aviation Authorizations listed on Section 4.26(a) of the Company Disclosure Letter, and no representation
is made hereunder with respect to aviation authorizations, exemptions, certificates or approvals not specifically listed therein.
(b) The
Company is in possession of all franchises, grants, authorizations, licenses, permits, consents, certificates, approvals and orders, or
other Consents from Governmental Authorities and/or third Persons (the “Approvals”) necessary to own, lease and operate
the properties it purports to own, operate or lease and to carry on its business as it is now being conducted and is in compliance with
all terms and conditions of such Approvals, in each case, except where the failure to have such Approvals or be in compliance therewith,
individually or in the aggregate, have not been and would not reasonably be expected to be, material to the Company. Notwithstanding the
foregoing, with respect to aviation-specific Approvals (including FAA certificates, exemptions, authorizations, and special permits issued
under 14 C.F.R. Parts 11, 21, 47, 61, 91, 107 or 137, or pursuant to 49 U.S.C. § 44807), the representation in this Section 3.7(b)
is made solely with respect to those Approvals specifically listed on Section 4.09(b) of the Company Disclosure Letter (the “Aviation
Authorizations Schedule”).
13
3.8 Government
Contracts.
(a) Section
4.10 of the Company Disclosure Letter sets forth a list of each Government Contract in existence as of the date hereof that involves aggregate
payments to the Company that are reasonably expected to be in excess of $500,000 (each, a “Material Current Government Contract”).
Each Material Current Government Contract was legally awarded to the Company. Except as would not reasonably be expected to be material
to the Company, and except for any Material Current Government Contract that is terminated or expires following the date hereof in accordance
with its terms, all Material Current Government Contracts are: (i) a legal, valid binding obligation of the Company; and (ii) in full
force and effect and enforceable against the Company, as applicable, in accordance with its terms, in each case subject to the Enforceability
Exceptions.
(b) To
the Company’s knowledge, for the period beginning three (3) years prior to and ending on the Closing Date, the Company has complied
in material respects with each Government Contract and applicable statutory and regulatory requirements (including the FAR and applicable
agency FAR supplements) with respect to each Government Contract.
(c) For
the period beginning three (3) years prior to and ending on the Closing Date, neither the U.S. Government nor any of the U.S. Government’s
prime contractors has notified the Company, either in writing or, to the Company’s Knowledge, orally that the Company has breached
a contract requirement, or violated any regulation, statute, certification, or representation with respect to each Government Contract.
(d) For
the period beginning three (3) years prior to and ending on the Closing Date, no show cause notices or cure notices have been issued against
the Company with respect to any Government Contract.
(e) Neither
the Company nor any “Principal” (as defined in FAR 52.209-5):
(i) is
presently debarred, suspended, proposed for debarment, or declared ineligible for the award of a government contract or subcontract;
(ii) has,
within the period beginning three (3) years prior to and ending on the Closing Date, been convicted of or had a civil judgment rendered
against them for commission of fraud or a criminal offense in connection with obtaining, attempting to obtain, or performing a public
(federal, state, or local) contract or subcontract, or violation of federal or state antitrust statutes relating to the submission of
offers, or commission of embezzlement, theft, forgery, bribery, falsification or destruction of records, making false statements, tax
evasion, or receiving stolen property; or
(iii) to
the Knowledge of the Company, is presently indicted for, or otherwise criminally or civilly charged with, or currently under investigation
by a governmental entity for, commission of any of the above-listed offenses.
(f) There
are no outstanding claims against the Company either by the U.S. Government or by any prime contractor or subcontractor arising under
a Government Contract.
(g) The
Company has no pending claims (including claims under the Contract Disputes Act of 1978) against the U.S. Government or against any prime
contractor arising under any Government Contract, except for routine demands for payment.
(h) For
the period beginning three (3) years prior to and ending on the Closing Date, the Company has not made a mandatory disclosure to a Governmental
Authority, an Inspector General of an agency, department or branch of the U.S. Government, or a Contracting Officer (as defined in FAR
2.101) in connection with the Company’s performance of any Government Contract under FAR Subpart 3.1003 or FAR 52.203-13, and, to
the Knowledge of the Company, no facts exist that would reasonably require such a disclosure.
(i) Section
4.10(i) of the Company Disclosure Letter sets forth a list of each pending Government Bid that are set aside for companies with Preferred
Bidder Status or otherwise requiring the Company to have Preferred Bidder Status as a condition of eligibility for award of a contract.
14
3.9 Company
Permits. The Company (and its employees who are legally required to be licensed by a Governmental Authority in order to perform
his or her duties with respect to his or her employment with the Company), holds all material Permits required to own, lease and operate
its assets and properties as presently owned, leased or operated (collectively, the “Company Permits”). The Company
has made available to the Purchaser true, correct and complete copies of all the Company Permits, all of which are listed on Section 4.11
of the Company Disclosure Letter. To the Knowledge of the Company, each Company Permit is in full force and effect and will upon its termination
or expiration will be timely renewed or reissued upon terms and conditions substantially similar to its existing terms and conditions
and there are no Legal Proceedings pending or, to the Knowledge of the Company, threatened, that seek the revocation, cancellation, limitation,
suspension, restriction, adverse modification or termination of any Company Permit. The Company has at all times operated in material
compliance with all Company Permits applicable to the Company. For the avoidance of doubt, aviation-specific permits, certificates and
authorizations are addressed exclusively in Section 3.24 (Aviation Regulatory Compliance) and the Aviation Authorizations Schedule,
and this Section 3.9 shall not be construed to require a representation with respect to any aviation-specific permit, certificate
or authorization not listed on such schedule.
3.10 Litigation.
Except as described on Section 4.12 of the Company Disclosure Letter, there is no (a) Legal Proceeding of any nature currently pending
or, to the Knowledge of the Company, threatened, against the Company or any of its properties or assets, or, to the Knowledge of the Company,
any of the directors or officers of the Company with regard to their actions as such, in which the reasonably expected damages are in
excess of $1,000,000 or which otherwise is reasonably expected to result in an Order for specific performance, an injunction or other
equitable relief; (b) to the Knowledge of the Company, there are no pending or threatened, audits, examinations or investigations by any
Governmental Authority against the Company that, individually or in the aggregate, would reasonably be expected to be material to the
Company; (c) pending or threatened in writing Legal Proceedings by the Company against any third party that, individually or in the aggregate,
would reasonably be expected to be material to the Company; (d) settlements or similar agreements that impose any material ongoing obligations
or restrictions on the Company that, individually or in the aggregate, would reasonably be expected to be material to the Company; and
(e) Orders imposed or, to the Knowledge of the Company, threatened to be imposed upon the Company or any of its properties or assets,
or, to the Company’s Knowledge, any of the directors or officers of the Company with regard to their actions as such that, individually
or in the aggregate, would reasonably be expected to be material to the Company.
3.11 Material
Contracts.
(a) Section
4.13(a) of the Company Disclosure Letter sets forth a true, correct and complete list of all Contracts described in clauses (i) through
(xx) below, to which, as of the date of this Agreement, the Company is a party or by which the Company, or any of its properties or assets
are bound or affected, excluding any Company Benefit Plan (each Contract required to be set forth on Section 4.13(a) of the Company Disclosure
Letter, a “Company Material Contract”). True, correct, complete copies of the Company Material Contracts, including
amendments thereto, have been delivered or made available to the Purchaser. The Company Material Contracts include:
(i) each
Contract that contains covenants that limit the ability of the Company (or purports to bind any Affiliate thereof) (A) to compete in any
line of business or with any Person or in any geographic area or to sell, or provide any service or product, including any non-competition
covenants, exclusivity restrictions, rights of first refusal or most-favored pricing clauses or (B) to purchase or acquire an interest
in any other Person;
(ii) each
joint venture Contract, profit-sharing agreement, partnership, limited liability company agreement with a third party or other similar
agreement or arrangement relating to the formation, creation, operation, management or control of any partnership or joint venture;
(iii) each
Contract that involves any exchange traded, over the counter or other swap, cap, floor, collar, futures contract, forward contract, option
or other derivative financial instrument or Contract, based on any commodity, security, instrument, asset, rate or index of any kind or
nature whatsoever, whether tangible or intangible, including currencies, interest rates, foreign currency and indices;
15
(iv) each
Contract that is reasonably anticipated to involve the acquisition or disposition, directly or indirectly (by merger or otherwise), of
assets with an aggregate value in excess of $500,000 (other than in the ordinary course of business consistent with past practice) or
shares or other equity interests of the Company or another Person;
(v) each
Contract for the acquisition of any Person or any business division thereof or the disposition of any material assets of the Company (other
than in the ordinary course of business), in each case, whether by merger, purchase or sale of stock or assets or otherwise (other than
Contracts for the purchase or sale of inventory or supplies entered into in the ordinary course of business) occurring in the last three
(3) years and/or relating to pending or future acquisitions or dispositions, in each case, involving aggregate payments in excess of $500,000;
(vi) each
obligation to make payments in excess of $1,000,000, contingent or otherwise, arising out of the prior acquisition of the business, assets
or stock of other Persons;
(vii) each
lease, rental agreement, installment and conditional sale agreement, or other Contract that, in each case, (A) provides for the ownership
of, leasing of, title to, use of, or any leasehold or other interest in any real or personal property, and (B) involves aggregate annual
payments in excess of $100,000 for agreements related to real property and $1,000,000 for agreements related to personal property;
(viii) each
Contract that by its terms, individually or with all related Contracts, that is reasonably anticipated to call for aggregate payments
or receipts by the Company under such Contract or Contracts of at least $1,000,000 per year or $5,000,000 in the aggregate;
(ix) each
Contract with any Top Customer or Top Supplier (other than purchase orders, invoices, statements of work and non-disclosure or similar
agreements entered into in the ordinary course of business consistent with past practice that do not contain any material terms relating
to the Contract underlying the applicable Top Customer or Top Supplier relationship);
(x) each
collective bargaining (or similar) agreement or Contract between the Company on one hand, and any labor union or other body representing
employees of the Company on the other hand;
(xi) each
Contract that is reasonably anticipated to obligate the Company to provide continuing indemnification or a guarantee of obligations of
a third party after the date hereof in excess of $1,000,000;
(xii) each
Contract that obligates the Company to make any capital commitment or expenditure in excess of $1,000,000 (including pursuant to any joint
venture);
(xiii) each
Contract that relates to a material settlement entered into within three (3) years prior to the date of this Agreement or under which
the Company has outstanding obligations (other than customary confidentiality obligations) in excess of $1,000,000;
(xiv) any
Contract that provides another Person (other than any manager, director or officer of the Company) with a power of attorney to act on
behalf of the Company or to act on behalf of any manager, director or officer of the Company with respect to the Company;
16
(xv) each
Contract (A) which contains any assignment or any covenant not to assert or enforce, any Intellectual Property material to the business
of the Company; (B) pursuant to which any Intellectual Property material to the business of the Company is or was developed by, with or
for the Company (other than invention assignment and confidentiality agreements with employees and contractors on standard forms made
available to Purchaser and without any material deviations or exceptions thereto (collectively, “Template Employee and Contractor
IP Assignment Agreements”)); or (C) pursuant to which the Company either (1) grants to a third Person (I) a license, immunity,
or other right in or to any Intellectual Property material to the business of the Company (other than where the non-exclusive license
of Intellectual Property is incidental and not the primary purpose of the Contract) or (II) an exclusive license, immunity, or other right
in or to any Owned Intellectual Property, or (2) is granted by a third Person a license, immunity, or other right in or to any Intellectual
Property or IT Assets material to the business of the Company, in the case of both (1) and (2) excluding (unless they otherwise qualify
as Company Material Contracts under a different subsection of this Section 3.11): (w) non-exclusive licenses of Owned Intellectual
Property granted to suppliers, customers or end users in the ordinary course of business; (x) licenses of Open Source Software; (y) Off-the-Shelf
Software; and (z) Template Employee and Contractor IP Assignment Agreements;
(xvi) each
Contract involving transactions with an Affiliate of the Company (other than employment agreements, employee confidentiality and invention
assignment agreements, equity or incentive equity documents and Organizational Documents);
(xvii) each
Contract that is a settlement, conciliation, or similar agreement with any Governmental Authority or pursuant to which the Company will
have material outstanding obligations after the date hereof, and excluding any such agreements that are releases entered into with former
employees or independent contractors in the ordinary course of business;
(xviii) each
Contract with a strategic aviation customer, operating partner, or logistics customer (including preorder agreements, memoranda of understanding,
purchase orders, and service agreements) involving committed or contingent consideration in excess of $1,000,000 or exclusive or preferential
rights to the Company’s products or services (collectively, “Aviation Customer Agreements”);
(xix) each
Contract with a manufacturer, assembler or supplier that is exclusive or involves annual expenditures in excess of $500,000 and relates
to the design, manufacture, assembly, testing or certification of the Company’s aircraft or unmanned aircraft systems, including
without limitation any exclusive manufacturing arrangement; and
(xx) each
Contract that contains a Change of Control provision (whether requiring consent, notice, or triggering termination, acceleration, or modification
rights) that would be triggered by, or is applicable to, the consummation of the Business Combination.
(b) Except
as disclosed in Section 4.13(b) of the Company Disclosure Letter, with respect to each Company Material Contract or for any Company Material
Contract that is terminated or expires following the date hereof in accordance with its terms: (i) such Company Material Contract is valid
and binding and enforceable in all respects against the Company and, to the Knowledge of the Company, each other party thereto, and is
in full force and effect (except, in each case, as such enforcement may be limited by the Enforceability Exceptions); (ii) except as would
not reasonably be expected to be material to the Company, the consummation of the transactions contemplated by this Agreement will not
affect the validity or enforceability of any Company Material Contract; (iii) the Company is not in breach of or default under, in any
material respect, and, to the Knowledge of the Company, no event has occurred that with the passage of time or giving of notice or both
would constitute a material breach of or default under by the Company, or permit termination or acceleration by the other party thereto,
under such Company Material Contract; (iv) to the Knowledge of the Company, no other party to such Company Material Contract is in breach
or default in any material respect, and, to the Knowledge of the Company no event has occurred that with the passage of time or giving
of notice or both would constitute such a material breach or default by such other party, or permit termination or acceleration by the
Company, under such Company Material Contract; (v) the Company has not received written or, to the Knowledge of the Company, oral notice
of an intention by any party to any such Company Material Contract that provides for a continuing obligation by any party thereto to terminate
such Company Material Contract or amend the terms thereof, other than modifications in the ordinary course of business that do not adversely
affect the Company in any material respect; and (vi) the Company has not waived any material rights under any such Company Material Contract.
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3.12 Intellectual
Property.
(a) Section
4.14(a)(i) of the Company Disclosure Letter sets forth a true, accurate, and complete list of: (y) all U.S. and foreign registered
or issued Intellectual Property and applications owned or filed by the Company (“Company Registered IP”), specifying
as to each item, as applicable: (A) the nature of the item, including the title, (B) the owner of the item, (C) the jurisdictions in which
the item is issued or registered or in which an application for issuance or registration has been filed and (D) the issuance, registration
or application numbers and dates; and (z) all material unregistered Trademarks included in Owned Intellectual Property. Each item of Company
Registered IP is subsisting, and to the Knowledge of the Company, valid (or applied for) and enforceable (assuming registration where
required for enforcement). The Company owns, free and clear of all Liens (other than Permitted Liens or any Liens set out on Section
4.14(a)(ii) of the Company Disclosure Letter) all right, title, and interest in and to all Owned Intellectual Property and to the
Knowledge of the Company, has valid and enforceable rights to use, sell, license, transfer or assign, as used, sold, licensed, transferred,
or assigned in its business, all other Intellectual Property and IT Assets currently used, sold, licensed, transferred, assigned, or held
for use by the Company and none of the foregoing will be adversely impacted by (nor will require any consent, notification, waiver, or
payment or grant of additional amounts or consideration as a result of) the execution, delivery, or performance of any of this Agreement
or the consummation of the Transactions. No item of Company Registered IP that consists of a pending Patent application fails to identify
all pertinent inventors, and for each Patent and Patent application in the Company Registered IP, the Company has obtained present assignments
of inventions from each inventor. Except as set forth on Section 4.14(a)(iii) of the Company Disclosure Letter, all Company Registered
IP and other Owned Intellectual Property are owned exclusively by the Company without obligation to pay royalties, licensing fees or other
fees, or otherwise account to any third party with respect to such Company Registered IP and other Owned Intellectual Property, and the
Company has recorded assignments of all Company Registered IP.
(b) To
the Knowledge of the Company, the Company has a valid and enforceable written license or other valid and enforceable right to use all
other Company IP, including Intellectual Property that is the subject of the inbound Company IP Licenses applicable to the Company. The
inbound Company IP Licenses include all of the licenses, sublicenses and other agreements or permissions currently used by Company or
otherwise material to operate the business of Company as presently conducted. The Company has performed all obligations imposed on it
in the Company IP Licenses, has made all payments required to date, and the Company is not, nor, to the Knowledge of the Company, is any
other party thereto, in breach or default thereunder, nor has any event occurred that with notice or lapse of time or both would constitute
a default thereunder. The continued use by the Company of the Intellectual Property that is the subject of any Company IP License in the
same manner that it is currently being used is not restricted by any applicable license of the Company. The Company is not party to any
Contract that requires the Company to assign to any Person any or all of its rights in any Intellectual Property developed by the Company
under such Contract.
(c) No
Legal Proceeding has been made in the last six (6) years or is pending or, to the Company’s Knowledge, threatened against the Company
that challenges the validity, enforceability, ownership, or right to use, sell, license or sublicense, or that otherwise relates to, any
Owned Intellectual Property, nor, to the Knowledge of the Company, is there any reasonable basis for any such Legal Proceeding. The Company
has not received any written or, to the Knowledge of the Company, oral notice or claim asserting that any infringement, misappropriation,
violation, dilution or unauthorized use of the Intellectual Property of any other Person is or may be occurring or has or may have occurred,
as a consequence of the business activities of the Company, nor to the Knowledge of the Company, is there a reasonable basis therefor.
There are no Orders to which the Company is a party or is otherwise bound that (i) restrict the rights of the Company to use, transfer,
license or enforce any Intellectual Property owned by the Company, (ii) restrict the conduct of the business of the Company in order to
accommodate a third Person’s Intellectual Property, or (iii) other than the outbound Company IP Licenses, grant any third Person
any right with respect to any Intellectual Property owned by the Company. The Company is not, nor is the Company’s ownership, use
or license of any Owned Intellectual Property, nor the Company’s operation of its business (including its products and services)
currently infringing, or has, in the past, infringed, misappropriated or violated any Intellectual Property of any other Person. To the
Company’s Knowledge, no third party is currently, or in the past six (6) years has infringed upon, misappropriated or otherwise
violated any Owned Intellectual Property.
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(d) No
current or former officers, employees, independent contractors, or other third parties employed or engaged by the Company has any ownership
interest in any material Owned Intellectual Property and no Person has claimed or asserted in writing any ownership interest or other
rights in or to any Owned Intellectual Property. Except where failure to comply has not been and would not be, individually or in the
aggregate, material, there has been no violation of the Company’s policies or practices related to protection of Company IP or any
confidentiality or nondisclosure Contract relating to the Owned Intellectual Property. To the Company’s Knowledge, none of the employees
of the Company is obligated under any Contract, or subject to any Order, that would materially interfere with the use of such employee’s
reasonable efforts to promote the interests of the Company, or that would conflict with the business of the Company as presently conducted.
The Company has taken commercially reasonable efforts and security measures in order to maintain, preserve and protect all material Owned
Intellectual Property, including to protect the secrecy, confidentiality and value of the material Company IP. All Persons who have participated
in or contributed to the creation or development of any material Owned Intellectual Property have executed written agreements pursuant
to which all of such Person’s right, title and interest in and to any such Owned Intellectual Property has been irrevocably assigned
(by a present tense assignment) to the Company (or all such right, title, and interest vested in one or more of the Company by operation
of Law, including as “work made for hire”).
(e) The
Company is in all material respects in compliance with all licenses governing any Open Source Software that is incorporated into, used,
intermingled, or bundled with any material Company Software. No Open Source Software is or has been included, incorporated or embedded
in, linked to, combined, made available or distributed with, or used in the development, maintenance, operation, delivery or provision
of any Company Software in a manner that requires the Company to: (i) disclose, contribute, distribute, license or otherwise make available
to any Person (including the open source community) any source code to such Company Software; (ii) license any such Company Software or
other material Owned Intellectual Property for making modifications or derivative works; (iii) disclose, contribute, distribute, license
or otherwise make available to any Person any such Company Software or other material Owned Intellectual Property for no or nominal charge;
or (iv) grant a license to, or refrain from asserting or enforcing any of, its Patents (“Copyleft Terms”). No Person
other than the Company possesses, or has an actual or contingent right to access or possess, a copy in any form of any source code for
any Company Software and all such source code is in the Company’s sole possession and has been maintained as strictly confidential.
(f) No
government funding, resources or assistance, nor any facilities of a university, college, other educational institution, or similar institution,
or research center or private or commercial third parties in their respective research and development activities were used by the Company
in the development of any Owned Intellectual Property. No Governmental Authority has any (i) ownership interest or exclusive license in
or to any Owned Intellectual Property, (ii) “unlimited rights” (as defined in 48 C.F.R. § 52.227-14 and in 48 C.F.R.
§ 252.227-7013(a)) in or to any of the Company Software, (iii) “Government
purpose rights” (as defined in 48 C.F.R. § 252.227-7013(a)), or (iv) “march in rights” (pursuant to 35 U.S.C.
§ 203) in or to any Patents constituting material Owned Intellectual Property. The Company is not a member of or party to, or has
participated in any patent pool, industry standards body, trade association or other organization pursuant to the rules of which the Company
is obligated to license or offer to license any existing or future Owned Intellectual Property to any Person.
(g) The
Company is and has been in compliance in all material respects with all applicable Laws, regulations, internal and external Company policies
and Contracts relating to data privacy, data protection and cybersecurity in all relevant jurisdictions. During the period beginning three
(3) years prior to and ending on the Closing Date, to the Knowledge of the Company, (i) no Person has obtained unauthorized access to
any Personal Information or Protected Information, IT Assets or Software in the possession of the Company or in their custody, control,
or otherwise held or processed on their behalf nor has there been any loss, damage, disclosure, use, breach of security, or other compromise
of the security, confidentiality or integrity of such IT Assets, Software, information, or data. Except as set forth in Section 4.14(g)
of the Disclosure Letter, the Company has not experienced any Security Breach. No material written or oral complaint, or notice of any
claims, or investigations, relating to an improper use or disclosure of, or a breach in the security of, any Personal Information or Protected
Information, or relating to any information security-related incident has been received by the Company nor has the Company notified in
writing, or been required by applicable Laws or Contract to notify in writing, any person or entity of any Personal Information or information
security-related incident.
(h) The
Company has implemented, and has used commercially reasonable efforts to require that its third-party vendors implement, adequate policies
and commercially reasonable security (a) regarding the collection, use, disclosure, retention, processing, transfer, confidentiality,
integrity and availability of Personal Information and Protected Information, and (b) regarding the integrity and availability of the
IT Assets the Company owns, operates or outsources. To the Knowledge of the Company, the Company’s IT Assets, do not contain any
“time bombs,” “Trojan horses,” “back doors,” “trap doors,” worms, viruses, spyware, keylogger
software or other vulnerability, faults or malicious code or damaging devices designed or reasonably expected to adversely impact the
functionality of or permit unauthorized access or to disable or otherwise harm any information technology or software applications.
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(i) The
consummation of any of the Business Combination will not result in (i) any material violation of any data privacy or cybersecurity laws;
or (ii) the material breach, material modification, cancellation, termination, suspension of, or acceleration of any payments with respect
to, or release of source code because of (a) any Contract providing for the license or other use of material Intellectual Property owned
by the Company, or (b) any Company IP License.
3.13 Taxes
and Returns. Except in each case as set forth on Section 4.15 of the Company Disclosure Letter:
(a) The
Company (i) has or will have timely filed, or caused to be timely filed, all income and other material Tax Returns required to be filed
by it (taking into account all valid extensions of time to file), and all such Tax Returns are true, accurate, correct and complete in
all material respects, and (ii) has timely paid, collected, withheld or remitted, or caused to be timely paid, collected, withheld or
remitted, all income and other material Taxes required to be paid, collected, withheld or remitted by it, whether or not such Taxes are
shown as due and payable on any Tax Return. The Company has complied in all material respects with all applicable Laws relating to Tax.
(b) There
is no Legal Proceeding currently pending or, to the Knowledge of the Company, threatened against the Company by a Governmental Authority
in a jurisdiction where the Company does not file any Tax Returns or a particular type of Tax Return or pays any Tax or a particular type
of Tax that it is or may be subject to such Tax or required to file such Tax Return in that jurisdiction.
(c) There
is no written notification of any claim, assessment, audit, examination, investigation or other Legal Proceeding that is pending, or to
the Knowledge of the Company, threatened against the Company in respect of any material amount of Taxes, and the Company has not been
notified in writing of any proposed Tax claim, deficiency or assessment against it in respect of a material amount of Taxes. The Company
is not currently contesting any material Tax liability before any Governmental Authority.
(d) There
are no Liens with respect to any Taxes upon the Company’s assets, other than Permitted Liens.
(e) The
Company has complied in all material respects with its obligations under applicable Law to (i) timely and properly collect or withhold
all Taxes required to be collected or withheld by it, and (ii) timely remit such Taxes to the appropriate Governmental Authorities.
(f) The
Company has not requested or consented to any waivers or extensions of any applicable statute of limitations for the collection or assessment
of any Taxes, which waiver or extension (or request thereof) is outstanding or pending, other than as the result of automatic extensions
of time to file Tax Returns requested in the ordinary course of business.
(g) The
Company will not be required to include any material item of income in, or exclude any material item of deduction from, taxable income
for any taxable period (or portion thereof) beginning after the Closing Date, as a result of: (i) an installment sale or open transaction
disposition that occurred prior to the Closing; (ii) any change in method of accounting made prior to the Closing, including by reason
of the application of Section 481 of the Code (or any analogous provision of state, local or foreign Law) or the use of an improper method
of accounting prior to the Closing; (iii) any prepaid amounts received or deferred revenue realized or received prior to the Closing outside
the ordinary course of business; (iv) any intercompany transaction described in Treasury Regulations under Section 1502 of the Code (or
any corresponding or similar provision of state, local or foreign Law) entered into prior to the Closing; or (v) any “closing agreement”
pursuant to Section 7121 of the Code or any other similar written agreement with a Governmental Authority relating to Taxes entered into
prior to the Closing.
(h) The
Company has not participated in or been a party to, or sold, distributed or otherwise promoted, any “reportable transaction,”
as defined in Treasury Regulations Section 1.6011-4 (or any similar or corresponding provision of state, local or foreign Law).
(i) The
Company has not been a member of an affiliated, combined, consolidated, unitary or other group for Tax purposes. The Company has no Liability
or potential Liability for the Taxes of another Person (i) pursuant to Treasury Regulations Section 1.1502-6 (or any similar or corresponding
provision of U.S. state or local Tax Law) or under any other applicable Tax Law, (ii) as a transferee or successor, or (iii) by Contract,
indemnity or otherwise (in each case, excluding customary commercial Contracts entered into in the ordinary course of business the primary
purpose of which is not the sharing of Taxes). The Company is not a party to or bound by any Tax indemnity agreement, Tax sharing agreement
or Tax allocation agreement or similar agreement, arrangement or practice (excluding customary commercial Contracts entered into in the
ordinary course of business the primary purpose of which is not the sharing of Taxes) with respect to Taxes.
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(j) The
Company has not requested, nor is it the subject of or bound by any private letter ruling, technical advice memorandum, closing agreement
or similar ruling, memorandum or written agreement with any Governmental Authority with respect to any Taxes, nor is any such request
pending or outstanding.
(k) The
Company is, and has at all times since its inception been, classified as a C corporation for U.S. federal, state and local income tax
purposes.
(l) The
Company has never had a permanent establishment, office, branch, fixed place of business or other taxable presence in any country other
than the country of its organization.
(m) The
Company has not been a party to any transaction that was purported or intended to be treated as a distribution of stock qualifying, in
whole or in part, for tax-free treatment under Section 355 of the Code (or any corresponding or similar provision of U.S. state or local
Tax Law) for the period beginning three (3) years prior to and ending on the Closing Date.
(n) The
Company has not knowingly taken any action, nor is it aware of any fact or circumstance, that would reasonably be expected to prevent
the relevant portions of the Business Combination from qualifying for their respective Intended Tax Treatments.
3.14 Real
Property.
(a) Section
4.16(a) of the Company Disclosure Letter sets forth a true, correct, and complete listing of all real property owned by the Company (the
“Company Owned Properties”), including the street address and owner thereof. The Company has made available to the
Purchaser true, correct, and complete copies of the deeds and other instruments in its possession by which the Company acquired such Company
Owned Properties, together with any title insurance policies, the most recent title reports and surveys with respect to such Company Owned
Property to the extent such items are in its possession. The Company has good and indefeasible fee simple title to each such Company Owned
Property free and clear of all Liens (other than Permitted Liens). Other than the Company Owned Properties, the Company does not own any
real property. There are no parties in possession, as tenants, licensees or, to the Knowledge of the Company, otherwise, or parties having
any option, right of first offer or first negotiation or right of first refusal or other similar rights granted to third parties to purchase
or lease the Company Owned Properties or any portion thereof or interest therein. There is no condemnation or eminent domain proceedings
pending or, to the Knowledge of the Company, threatened with respect to any of the Company Owned Properties or any portion thereof.
(b) Section
4.16(b) of the Company Disclosure Letter contains a true, correct and complete list of the addresses for all premises currently leased
or subleased or otherwise used or occupied (but not owned) by the Company for the operation of the business of the Company (the “Company
Leased Real Properties”), and of all current leases, lease guarantees, agreements and documents related thereto, including all
amendments, terminations and modifications thereof, waivers thereto or guarantees thereof (collectively, the “Company Real Property
Leases”), including the parties to such Company Real Property Leases. The Company has provided to the Purchaser a true and complete
copy of each of the Company Real Property Leases. The Company has a good and valid leasehold or subleasehold interest in each relevant
parcel under the Company Real Property Leases, and each Company Real Property Lease is valid and binding and enforceable in all respects
against the Company and, to the Knowledge of the Company, against each other party thereto, and is in full force and effect (except, in
each case, as such enforcement may be limited by the Enforceability Exceptions). With respect to each Company Real Property Lease, (i)
the Company is not in breach of or default under any Company Real Property Lease, (ii) no event has occurred and no circumstance exists
which, if not remedied, and whether with or without notice or the passage of time or both, would result in such a breach or default by
the Company and, (iii) to the Knowledge of the Company, no other party to such Company Real Property Lease is in breach or default, in
any respect, and no event has occurred that with the passage of time or giving of notice or both would constitute such a breach or default
by such other party, or permit termination or acceleration by the Company, under such Company Real Property Lease. The Company has not
collaterally assigned or granted any security interest in any Company Real Property Lease or any interest therein, nor has the Company
leased, licensed or otherwise granted use or occupancy rights with respect to any Company Leased Real Property or any portion thereof
to any third party. No party to any Company Real Property Lease has exercised any termination rights with respect thereto. To the Knowledge
of the Company there is no condemnation or eminent domain proceedings pending or threatened with respect to any of the Company Leased
Real Properties or any portion thereof.
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3.15 Personal
Property. Each item of Personal Property which is currently owned, used or leased by the Company with a book value or fair market
value of greater than $500,000 is set forth on Section 4.17 of the Company Disclosure Letter, along with, to the extent applicable, a
list of lease agreements, lease guarantees, security agreements and other agreements related thereto, including all amendments, terminations
and modifications thereof or waivers thereto (“Company Personal Property Leases”). Except as set forth in Section 4.17
of the Company Disclosure Letter, all such items of Personal Property are in operating condition (reasonable wear and tear excepted),
as are reasonably suitable for their intended use in the business of the Company. The Company has provided to the Purchaser a true and
complete copy of each of the Company Personal Property Leases. To the Knowledge of the Company, the Company Personal Property Leases are
valid, binding and enforceable in accordance with their terms and are in full force and effect. To the Knowledge of the Company, no event
has occurred which (whether with or without notice, lapse of time or both or the happening or occurrence of any other event) would constitute
a default on the part of the Company or any other party under any of the Company Personal Property Leases, and the Company has not received
notice of any such condition.
3.16 Title
to Assets. The Company has good and marketable title to, or a valid leasehold interest in or right to use, or in the case of Company
Owned Property good and indefeasible title to, its respective material tangible and intangible assets that are necessary to conduct the
business of the Company as presently conducted, free and clear of all Liens other than (a) Permitted Liens, (b) the rights of lessors
under material leasehold interests and (c) Liens set forth on Section 4.18(a) of the Company Disclosure Letter. Except as set forth on
Section 4.18(b) of the Company Disclosure Letter, the material assets (including Intellectual Property rights and contractual rights)
of the Company constitute all of the assets, rights and properties that are necessary, in all material respects, for the operation of
the businesses of the Company in all material respects as they are now conducted. The material tangible assets or personal property of
the Company have been maintained in all material respects in accordance with generally accepted industry practice, are in good working
order and condition, except for ordinary wear and tear and as would not, individually or in the aggregate, reasonably be expected to be
material to the Company.
3.17 Employee
Matters.
(a) The
Company is not and has never been a party to any collective bargaining agreement or other Contract covering any group of employees with
any labor organization or other representative of any of the employees of the Company, and to the Knowledge of the Company, there are
not, and within the period beginning three (3) years prior to and ending on the Closing Date, there have not been, any activities or proceedings
of any labor union to organize or represent such employees. During the period beginning three (3) years prior to and ending on the Closing
Date, there has not occurred or, to the Knowledge of the Company, been threatened any strike, slow-down, picketing, work-stoppage, or
other similar labor activity with respect to any such employees. Except as set forth on Section 4.19(a) of the Company Disclosure Letter,
no current officer or other key employee of the Company, as of the date of this Agreement, has provided the Company with written notice
of his or her intention to terminate his or her employment within the one (1) year period following the Closing.
(b) Except
as set forth on Section 4.19(b) of the Company Disclosure Letter, the Company is, and, within the period beginning three (3) years prior
to and ending on the Closing Date, has been, in material compliance with all applicable Laws respecting employment and employment practices,
terms and conditions of employment, health and safety and wages and hours, and other Laws relating to discrimination, disability, labor
relations, hours of work, payment of wages and overtime wages, pay equity, immigration, workers compensation, working conditions, employee
scheduling, family and medical leave, and employee terminations, except for failures to comply which, individually or in the aggregate,
have not been and would not reasonably be expected to be, material to the Company. The Company has not received written or, to the Knowledge
of the Company, oral notice that there is any pending Legal Proceeding involving unfair labor practices against the Company. There are
no material Legal Proceedings pending or, to the Knowledge of the Company, threatened against the Company brought by or on behalf of any
applicant for employment, any current or former employee, any Person alleging to be a current or former employee, or any Governmental
Authority, relating to any such Law or regulation, or alleging breach of any express or implied contract of employment, wrongful termination
of employment, or alleging any other discriminatory, wrongful or tortious conduct in connection with the employment relationship.
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(c) Except
as set forth on Section 4.19(c) of the Company Disclosure Letter, the Company employees are employed “at will”, and the Company
has no obligation or Liability (whether or not contingent) with respect to severance payments to any such employees under the terms of
any written or, to the Knowledge of the Company, oral agreement, or commitment or any applicable Law, custom, trade or practice.
(d) For
the period beginning three (3) years prior to and ending on the Closing Date, the Company has not received written (i) notice of any unfair
labor practice charge or material complaint pending or, to the Knowledge of the Company, threatened before the National Labor Relations
Board against them, (ii) notice of any material grievances or arbitrations arising out of any collective bargaining agreement to which
the Company is a party, or (iii) notice of the intent of any Governmental Authority responsible for the enforcement of labor, employment,
wages and hours of work, child labor, or immigration to conduct an investigation with respect to or relating to them or notice that such
investigation is in progress.
(e) To
the Knowledge of the Company, no present or former employee at level of vice president or above of the Company is in material violation
of (i) any restrictive covenant or nondisclosure obligation to the Company or (ii) any restrictive covenant or nondisclosure obligation
to a former employer of any such individual relating to (A) the right of any such individual to work for or provide services to the Company
or (B) the knowledge or use of trade secrets.
(f) For
the period beginning three (3) years prior to and ending on the Closing Date, the Company has not engaged in layoffs, furloughs or employment
terminations sufficient to trigger application of the Worker Adjustment and Retraining Notification Act or any similar state or local
law (collectively, the “WARN Act”). The Company has no outstanding liabilities or obligations arising under or relating
to the WARN Act.
(g) For
the period beginning three (3) years prior to and ending on the Closing Date, (i) no allegations of sexual harassment or sexual misconduct
have been made in writing, or, to the Knowledge of the Company, threatened to be made against or involving any current or former officer,
director or other employee at the level of Vice President or above by any current or former officer, employee or individual service provider
of the Company, in each case, in their capacities as officers, employees, or directors of the Company, and (ii) the Company has not entered
into any settlement agreements resolving, in whole or in part, allegations of sexual harassment or sexual misconduct by any current or
former officer, director or other employee at the level of Vice President or above.
3.18 Benefit
Plans.
(a) Set
forth on Section 4.20(a) of the Company Disclosure Letter is a true and complete list of each material Company Benefit Plan. With respect
to each Company Benefit Plan, all contributions that are due have been made or, to the extent not yet due, are properly accrued in accordance
with GAAP on the Company Financials, in all material respects. The Company is not required to provide employee benefits pursuant to a
collective bargaining agreement or other Contract covering any group of employees, labor organization or other representative of any of
the employees.
(b) Each
Company Benefit Plan is and has been operated, administered, maintained, and funded at all times in compliance with its terms and all
applicable Laws in each case in all material respects, including ERISA and the Code. Each Company Benefit Plan which is intended to be
“qualified” within the meaning of Section 401(a) of the Code (i) has received a favorable determination letter from the IRS
to be so qualified (or is based on a prototype plan which has received a favorable opinion letter upon which the Company is entitled to
rely) or (ii) the Company has requested an initial favorable IRS determination of qualification and/or exemption within the period permitted
by applicable Law. To the Knowledge of the Company, no event has occurred or circumstance exists which could reasonably be expected to
adversely affect the qualified status of such Company Benefit Plans or the exempt status of such trusts.
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(c) With
respect to each Company Benefit Plan required to be listed on Section 4.20(a) of the Company Disclosure Letter, the Company has provided
to Purchaser accurate and complete copies, if applicable, of: (i) all Company Benefit Plan documents, service agreements and related trust
agreements or annuity Contracts (including any amendments, modifications or supplements thereto); (ii) the most recent summary plan descriptions
and material modifications thereto; (iii) the most recent Form 5500s, if applicable, and annual report, including all schedules thereto;
(iv) the most recent annual and periodic accounting of plan assets; (v) the most recent nondiscrimination testing reports; (vi) the most
recent determination letter (or opinion letter) received from the IRS, if any; (vii) the most recent actuarial valuation; and (viii) all
material communications with any Governmental Authority for the period beginning three (3) years prior to and ending on the Closing Date.
(d) With
respect to each Company Benefit Plan: (i) no Legal Proceeding is pending, or to the Knowledge of the Company, threatened (other than routine
claims for benefits arising in the ordinary course of administration and administrative appeals of denied claims); and (ii) no prohibited
transaction, as defined in Section 406 of ERISA or Section 4975 of the Code, has occurred, excluding transactions effected pursuant to
a statutory or administration exemption.
(e) Neither
the Company nor any ERISA Affiliate currently maintains, or within the preceding six (6) years has maintained or contributed to, a Company
Benefit Plan which is a “defined benefit plan” (as defined in Section 414(j) of the Code), a “multiemployer plan”
(as defined in Section 3(37) of ERISA) or a “multiple employer plan” (as described in Section 413(c) of the Code) or is otherwise
subject to Title IV of ERISA or Section 412 of the Code, and the Company has not incurred any Liability, could not otherwise have any
Liability, contingent or otherwise, under Title IV of ERISA and no condition presently exists that is expected to cause such Liability
to be incurred. The Company does not and has not ever maintained, and is not and has never been required to contribute to or otherwise
participate in, (i) a multiple employer welfare arrangement or voluntary employees’ beneficiary association as defined in Section
501(c)(9) of the Code or (ii) a “funded welfare plan” within the meaning of Section 419 of the Code.
(f) Except
as set forth on Section 4.20(f) of the Company Disclosure Letter, the consummation of the Business Combination will not, either alone
or in combination with another event, (i) entitle any current or former employee, officer or other service provider of the Company to
any severance pay or increase in severance pay or any other compensation payable by the Company, (ii) accelerate the time of payment,
funding or vesting, or increase the amount of compensation due to any such employee, officer or other individual service provider by the
Company, (iii) directly or indirectly cause the Company to transfer or set aside any assets to fund any material benefits under any Company
Benefit Plan, (iv) otherwise give rise to any material liability under any Company Benefit Plan, or (v) limit or restrict the right to
merge, materially amend, terminate or transfer the assets of any Company Benefit Plan on or following the Closing. The consummation of
the transactions contemplated hereby will not, either alone or in combination with another event, result in any “excess parachute
payment” under Section 280G of the Code. No Company Benefit Plan provides for a Tax gross-up, make whole or similar payment, including
with respect to the Taxes imposed under Sections 409A or 4999 of the Code.
(g) Except
as set forth on Section 4.20(g) of the Company Disclosure Letter or to the extent required by Section 4980B of the Code or similar state
Law, the Company does not provide health or welfare benefits to any former or retired employee and are not obligated to provide such benefits
to any active employee following such employee’s retirement or other termination of employment or service.
(h) Each
Company Benefit Plan can be terminated at any time without resulting in any material Liability to the Company, the Purchaser, Merger Sub
or their respective Affiliates for any additional contributions, penalties, premiums, fees, fines, excise taxes or any other charges or
liabilities, other than Liabilities with respect to participant accrued benefits through the effective date of such termination in accordance
with the terms of such plan and ordinary administration costs typically incurred in a termination event.
(i) Except
as would not, individually or in the aggregate, reasonably be expected to be material to the Company, each Company Benefit Plan that is
subject to Section 409A of the Code has been administered in compliance, and is in documentary compliance, in all respects with the applicable
provisions of Section 409A of the Code, the regulations thereunder and other official guidance issued thereunder.
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3.19 Environmental
Matters. Except as set forth in Section 4.21 of the Company Disclosure Letter:
(a) The
Company and its properties and facilities are and have, during the time that the Company has owned, operated or leased such property or
facility, been in compliance in all material respects with all applicable Environmental Laws, including obtaining, maintaining in good
standing, timely renewing and complying with all Permits required for their business and operations under any Environmental Laws (“Environmental
Permits”).
(b) No
Legal Proceeding is pending or, to the Knowledge of the Company, threatened against the Company or its assets or properties alleging a
material violation of, or material liability under, any Environmental Law or Environmental Permit, including with respect to the revocation
or termination of any Environmental Permits.
(c) None
of the Company or any of its current or, to the Knowledge of the Company, former properties, facilities or operations, are the subject
of any outstanding material Order or Contract with any Governmental Authority or other Person in respect of any (i) Environmental Law,
(ii) Remedial Legal Proceeding, or (iii) Release or threatened Release of a Hazardous Material, in each case, that would be reasonably
expected to result in a material Environmental Liability. The Company has not assumed, contractually or by operation of Law, any material
Environmental Liabilities.
(d) The
Company has not generated, manufactured, stored, treated, transported, Released, disposed of, arranged for or permitted the disposal of,
any Hazardous Material, in a manner that has given or would reasonably be expected to give rise to any material Environmental Liability.
(e) The
Company has not received written notification of any investigation of the business, operations, or currently or formerly owned, operated,
or leased property of the Company that would be reasonably expected to lead to the imposition of any material Liens or material Environmental
Liabilities and no such investigations are pending or threatened in writing.
(f) No
Person has Released any Hazardous Material at, on, or under any facility currently or to the Knowledge of the Company, formerly owned
or operated by the Company or any third-party site, in each case in a manner that would be reasonably likely to give rise to a material
Environmental Liability of the Company.
(g) The
Company has provided to the Purchaser all material, final and non-privileged written environmental reports, audits, assessments, liability
analyses, memoranda and studies, including Phase I environmental site assessments, in the possession of, or conducted by, the Company
and concerning the environmental condition of any properties or operations of the Company, Environmental Liabilities or compliance with
Environmental Laws.
3.20 Transactions
with Related Persons. Except as set forth on Section 4.22 of the Company Disclosure Letter, and except for in the case of any
employee, officer or director, of any employment Contract or Company Benefit Plans made in the ordinary course of business consistent
with past practice or except as set forth in the Company Financials, the Company is not a party to any transaction or Contract with any
(a) present or former executive officer or director of the Company, (b) beneficial owner (within the meaning of Section 13(d) of the Exchange
Act) of 5% or more of the capital stock or equity interests of the Company or (c) any Affiliate, “associate” or any member
of the “immediate family” (as such terms are respectively defined in Rules 12b-2 and 16a-1 of the Exchange Act) of any of
the foregoing. Except as set forth in the Company Financials or as set forth on Section 4.22 of the Company Disclosure Letter: (x) to
the Knowledge of the Company, no Related Person or any Affiliate of a Related Person has, directly or indirectly, a material economic
interest in any Contract with the Company (other than such Contracts that relate to any such Person’s ownership of the Company Securities
or other equity interests of the Company as set forth on Section 4.03(a) of the Company Disclosure Letter or such Person’s employment
or consulting arrangements with the Company), and (y) the assets of the Company do not include any receivable or other obligation from
a Related Person, and the liabilities of the Company do not include any payable or other obligation or commitment to any Related Person.
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3.21 Insurance.
(a) Section
4.23(a) of the Company Disclosure Letter contains a list of, as of the date hereof, all material policies or binders of property, fire
and casualty, product liability, workers’ compensation, and other forms of insurance held by, or for the benefit of, the business
of the Company (by policy number, insurer, coverage period, coverage amount, annual premium and type of policy) (the “Insurance
Policies”). As of the date hereof, all premiums due and payable under all such insurance policies have been timely paid and
the Company is otherwise in material compliance with the terms of such insurance policies. Each such insurance policy (i) is legal, valid,
binding, enforceable and in full force and effect, subject, in each case to the Enforceability Exceptions and (ii) will continue to be
legal, valid, binding, enforceable, and in full force and effect immediately following the Closing. The Company has no self-insurance
or co-insurance programs. For the period beginning three (3) years prior to and ending on the Closing Date, the Company has not received
any written notice from, or on behalf of, any insurance carrier for the Insurance Policies of cancellation, termination, refusal to issue
an insurance policy or non-renewal of a policy.
(b) Section
4.23(b) of the Company Disclosure Letter identifies each individual insurance claim in excess of $1,000,000 made by the Company within
the period beginning three (3) years prior to and ending on the Closing Date on an Insurance Policy. During the period beginning three
(3) years prior to and ending on the Closing Date, the Company has not made any material claim against an Insurance Policy as to which
the insurer has finally denied coverage in its entirety.
3.22 Top
Customers and Suppliers.
(a) Section
4.24(a) of the Company Disclosure Letter lists as of the date of this Agreement, by aggregate dollar value of the Company business transaction
volume with such counterparty, as applicable, for each of (i) the twelve (12) months ended on December 31, 2025 and (ii) the twelve (12)
months ended on December 31, 2024, the three (3) largest customers of the Company (the “Top Customers”). To the Knowledge
of the Company, as of the date hereof, no such Top Customer has provided written notice to the Company (i) of its intention to cancel
or otherwise terminate, or materially reduce, its relationship with the Company, or (ii) that the Company is in material breach of the
terms of any Contract to which it is a party with such Top Customer.
(b) Section
4.24(b) of the Company Disclosure Letter lists as of the date of this Agreement, all suppliers or manufacturers of goods or services for
each of (i) the twelve (12) months ended on December 31, 2025 and (ii) the twelve (12) months ended on December 31, 2024, the suppliers
of the Company that the Company pays at least $1,000,000 per annum for each such period (the “Top Suppliers”). To the
Knowledge of the Company as of the date hereof, no such Top Supplier has provided notice to the Company (i) of its intention to cancel
or otherwise terminate, or materially reduce, its relationship with the Company, or (ii) that the Company is in material breach of the
terms of any Company Material Contract with any such Top Supplier.
(c) Except
as set forth on Section 4.24(c) of the Company Disclosure Letter, none of the Top Customers or Top Suppliers has, as of the date of this
Agreement, notified the Company in writing that it is in a material dispute with the Company or its businesses.
3.23 Certain
Business Practices.
(a) The
Company has not and, to the Knowledge of the Company, nor any of its officers or directors nor any other Persons acting on behalf of the
Company, has taken any action or refrained from taking any action that would cause the Company to be in violation of the Anti-Bribery
Laws. The Company has not and, to the Knowledge of the Company, nor has any other Person acting on behalf of the Company, taken any act
in furtherance of an offer, payment, promise to pay, authorization or ratification of the payment of any gift, money or anything of value
to a Government Official to obtain or retain business or to secure any improper advantage. To the Knowledge of the Company, none of its
officers, directors, or any of their respective Representatives acting on their behalf, for the period beginning five (5) years prior
to and ending on the Closing Date, has been subject to or conducted or initiated any internal investigation or made a voluntary, directed,
or involuntary disclosure to any Governmental Authority with respect to any alleged act or omission relating to any noncompliance with
any Anti-Bribery Laws. Neither the Company, nor any of its officers or directors, nor, to the Knowledge of the Company, any Representatives
acting on their behalf, has received any written notice, request, or citation from any Governmental Authority for any actual or potential
noncompliance with any Anti-Bribery Laws for the period beginning five (5) years prior to and ending on the Closing Date.
(b) For
the period beginning five (5) years prior to and ending on the Closing Date, the operations of the Company are and have been conducted
at all times in material compliance with applicable International Trade Laws and Sanctions Laws, and no Legal Proceeding between the Company
and any Governmental Authority with respect to any of the foregoing is, to the Knowledge of the Company pending or threatened in writing.
26
(c) The
Company has not and, to the Knowledge of the Company, nor any of its directors or officers, or, to the Knowledge of the Company, any other
Representative acting on behalf of the Company is or has been for the period beginning five (5) years prior to and ending on the Closing
Date: (i) identified on any applicable sanctions-related list of designated or blocked persons (including without limitation the Specially
Designated Nationals and Blocked Persons List (“SDN List”) maintained by the U.S. Department of the Treasury’s
Office of Foreign Assets Control (“OFAC”)); (ii) located, organized, or resident in any country, region or territory
that is the subject of comprehensive territorial sanctions administered by the United States and any other jurisdiction in which the Company
operates (as of the date of this Agreement, Cuba, Iran, North Korea, and the Crimea, so-called Donetsk People’s Republic, and so-called
Luhansk People’s Republic regions of Ukraine) (each a “Sanctioned Jurisdiction”); or (iii) owned, directly or
indirectly, individually or in the aggregate, 50 percent or more or otherwise controlled by any of the foregoing.
(d) For
the period beginning five (5) years prior to and ending on the Closing Date, the Company has maintained in place and implemented risk-based
measures designed to promote compliance with Sanctions Laws.
(e) For
the period beginning five (5) years prior to and ending on the Closing Date, the Company has not directly or indirectly, been in violation
of Sanctions Laws used any funds, or loaned, contributed or otherwise made available such funds to any joint venture partner or other
Person in connection with any sales or operations in a Sanctioned Jurisdiction or for the purpose of financing the activities (i) of any
Person currently identified on any applicable sanctions-related list of designated or blocked persons maintained by OFAC, or (ii) in any
other manner that would constitute a violation of Sanctions Laws.
3.24 Aviation
Regulatory Compliance.
(a) Section
4.26(a) of the Company Disclosure Letter sets forth a true, correct, and complete list of all material aviation authorizations, certificates,
exemptions, permits, approvals, and pending applications issued by or filed with any Aviation Authority and held by or on behalf of the
Company, or otherwise required for the conduct of the Company’s business as presently conducted (collectively, the “Company
Aviation Authorizations”). The Company Aviation Authorizations include, to the extent applicable and held as of the date hereof:
type certificates and applications therefor, supplemental type certificates, production certificates, airworthiness certificates (including
special airworthiness certificates), experimental certificates, exemptions (including exemptions issued pursuant to 49 U.S.C. § 44807),
certificates of authorization, aircraft registration certificates, and any designations, delegations or approvals under the FAA’s
Organization Designation Authorization program or any successor program.
(b) To
the Knowledge of the Company, each Company Aviation Authorization is valid, in good standing and in full force and effect and is not liable
to revocation, suspension, cancellation or adverse modification for any currently existing reason. The Company has not received written,
or to the Knowledge of the Company, oral notice from any Aviation Authority of any pending or threatened revocation, suspension, limitation,
restriction or adverse modification of any Company Aviation Authorization.
(c) The
Company has filed FAA Form 8110-12 (Application for Type Certificate) with respect to the Chaparral C2 aircraft (the “Chaparral”),
which application was acknowledged by the FAA on December 5, 2022, and assigned Project Number TC20675LA-SC (the “Type Certification
Application”). As of the date hereof, no type certificate, supplemental type certificate, or production certificate has been
issued with respect to the Chaparral. The Company makes no representation as to the timing of issuance of a type certificate or any interim
milestone (including G-1 Issue Paper, accepted Project Specific Certification Plan, or established certification basis) except as may
be specifically set forth on Section 4.26(c) of the Company Disclosure Letter. As of the date hereof, the Company has submitted a draft
Project Specific Certification Plan (PSCP) to the FAA which is under negotiation but has not been formally accepted; the FAA has not issued
a G-1 Issue Paper, the certification basis has been proposed but not established, and no special conditions or equivalent level of safety
findings have been proposed by the FAA.
(d) The
Company is in material compliance with all conditions, limitations and requirements of each Company Aviation Authorization. The Company
is not a party to any consent order, compliance order, letter of correction, warning letter or similar enforcement correspondence with
any Aviation Authority that remains unresolved.
(e) No
Company Aviation Authorization requires any consent, approval, notification or other action by any Aviation Authority in connection with
the consummation of the Business Combination. The Parties acknowledge that, because the Company will survive the Merger as the certificate
holder and registrant, no transfer of any Company Aviation Authorization is required. To the extent that any Company Aviation Authorization
is subject to a change-of-control notification requirement, such requirement is identified on Section 4.26(e) of the Company Disclosure
Letter, and the Company shall provide any such notifications in accordance with applicable requirements.
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(f) As
of the date hereof, the Company operates solely as an aircraft designer and manufacturer (OEM) and does not hold or require any air carrier
certificate under 14 C.F.R. Part 119, any operating certificate under 14 C.F.R. Parts 121, 125, 135, or 137, or any unmanned aircraft
system operator certificate, and does not conduct commercial air transportation operations. The Company does not hold economic authority
from the Department of Transportation under 49 U.S.C. §§ 41101-41113. The Company’s flight operations to date have been
conducted under public aircraft authority (49 U.S.C. §40102) pursuant to COA 2025-WSA-17733, with the University of Alaska Fairbanks
(ACUASI) serving as the public agency proponent. Such operations do not constitute commercial air transportation and do not require the
Company to hold a Part 119 or Part 135 operating certificate.
(g) The
Company maintains books and records with respect to its aviation design and manufacturing activities, including type design data, airworthiness
data, flight test data, and conformity records, in material compliance with applicable Aviation Authority requirements. The Company owns
or has the right to use all type design data and related technical data necessary for the prosecution of the Type Certification Application.
(h) The
Company is in material compliance with all applicable requirements of the Defense Federal Acquisition Regulation Supplement clause 252.204-7012
(Safeguarding Covered Defense Information and Cyber Incident Reporting) and National Institute of Standards and Technology Special Publication
800-171 with respect to any controlled unclassified information (“CUI”) in its possession, and has implemented and
maintains adequate information security controls reasonably designed to protect such CUI. Section 4.26(i) of the Company Disclosure Letter
identifies each Material Current Government Contract that imposes CUI safeguarding obligations on the Company.
(i) The
Company has provided to the Purchaser all material information and data pertaining to the Company Aviation Authorizations in its possession,
including copies of all certificates, exemptions, authorizations, applications, correspondence with Aviation Authorities regarding the
Type Certification Application, and any material enforcement or compliance correspondence.
(j) The
Purchaser acknowledges that type certification of the Chaparral is an ongoing regulatory process subject to FAA timelines and requirements
that are not within the sole control of the Company. No representation or warranty is made herein, and no closing condition shall be construed
to require, the issuance of a type certificate, production certificate, or any airworthiness certificate as a condition to the Closing,
and the absence of such issuance shall not constitute a Company Material Adverse Effect.
3.25 Investment
Company Act. The Company is not an “investment company” or a Person directly or indirectly “controlled”
by or acting on behalf of an “investment company”, or required to register as an “investment company”, in each
case within the meaning of the Investment Company Act of 1940, as amended.
3.26 Finders
and Brokers. Except as reflected on Section 4.28 of the Company Disclosure Letter, no broker, finder, investment banker or other
Person is entitled to, nor will be entitled to, either directly or indirectly, any brokerage fee, finders’ fee or other similar
commission, for which the Company would be liable in connection with the Business Combination based upon arrangements made by the Company
or any of their Affiliates.
3.27 Independent
Investigation. The Company has conducted its own independent investigation, review and analysis of the business, results of operations,
prospects, condition (financial or otherwise) or assets of the Purchaser and Merger Sub, and acknowledge that they have been provided
adequate access to the personnel, properties, assets, premises, books and records, and other documents and data of the Purchaser and Merger
Sub for such purpose. The Company acknowledges and agrees that: (a) in making its decision to enter into this Agreement and to consummate
the transactions contemplated hereby, it has relied solely upon its own investigation and the express representations and warranties of
the Purchaser and Merger Sub set forth in Agreement (including the related portions of the Purchaser Disclosure Letter) and in any certificate
delivered to the Company pursuant hereto; and (b) none of the Purchaser, Merger Sub or any of their respective Representatives have made
any representation or warranty as to the Purchaser or Merger Sub or this Agreement, except as expressly set forth in this Agreement (including
the related portions of the Purchaser Disclosure Letter) or in any certificate delivered to the Company pursuant hereto.
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3.28 Information
Supplied. None of the information supplied or to be supplied by, or on behalf of, the Company expressly for inclusion or incorporation
by reference in (i) any current report on Form 8-K, and any exhibits thereto or any other report, form, registration or other filing made
with any Governmental Authority or stock exchange with respect to the Business Combination or in the Proxy Statement/Registration Statement
or (ii) any of the Signing Press Release, the Signing Filing, the Closing Press Release, the Closing Filing and any other press releases
of prospectus filed under Rule 425 of the Securities Act in connection to the Business Combination contains any untrue statement of a
material fact or omit to state any material fact required to be stated therein or necessary in order to make the statements therein, in
light of the circumstances under which they are made, not misleading at (a) the time such information is filed with or furnished to the
SEC (provided, that if such information is revised by any subsequently filed amendment or supplement, this clause (a) shall solely refer
to the time of such subsequent revision); (b) the time the Proxy Statement/Registration Statement is declared effective by the SEC; (c)
the time the Proxy Statement/Registration Statement (or any amendment thereof or supplement thereto) is first mailed to the Purchaser
Shareholders; or (d) the time of the Purchaser Shareholders’ Meeting. Notwithstanding the foregoing, the Company makes no representation,
warranty or covenant with respect to any information supplied by or on behalf of the Purchaser, Merger Sub or their respective Affiliates.
3.29 No
Additional Representations or Warranties. Except as provided in this Article 3, neither the Company nor any of its Affiliates,
nor any of its directors, managers, officers, employees, equityholders, partners, members or representatives has made, or is making, any
representation or warranty whatsoever to Purchasers or their respective Affiliates or any other Person and no such party shall be liable
in respect of the accuracy or completeness of any information provided to the Purchasers or their respective Affiliates or any other Person.
Article
4
Representations and Warranties of the Purchasers.
Each Purchaser, severally
and not jointly, hereby represents and warrants as of the date of this Agreement and as of the Closing Date (or, if such representations
and warranties are made with respect to a specified date, as of such date):
(a) The
Purchaser is either an individual or an entity duly incorporated or formed, validly existing and in good standing under the laws of its
jurisdiction of formation or incorporation with the requisite power and authority to enter into and perform its obligations under the
Transaction Documents.
(b) Each
Transaction Document to which it is a party has been duly authorized, executed and delivered by the Purchaser, and assuming the due authorization,
execution and delivery of the same by the Company, each Transaction Document to which the Purchaser is a party shall constitute the valid
and legally binding obligation of the Purchaser, enforceable against the Purchaser in accordance with its terms, except as such enforceability
may be limited by bankruptcy, insolvency, reorganization, moratorium and similar laws affecting creditors generally and by the availability
of equitable remedies.
(c) The
execution, delivery and performance of the Transaction Documents, including the purchase of the Securities hereunder, the compliance by
the Purchaser with all of the provisions of the Transaction Documents and the consummation of the transactions contemplated herein and
therein will not conflict with or result in a breach or violation of any of the terms or provisions of, or constitute a default under,
or result in the creation or imposition of any lien, charge or encumbrance upon any of the property or assets of the Purchaser pursuant
to the terms of (i) any indenture, mortgage, deed of trust, loan agreement, lease, license or other agreement or instrument to which the
Purchaser is a party or by which the Purchaser is bound or to which any of the property or assets of the Purchaser is subject; (ii) the
Organizational Documents of the Purchaser; or (iii) any statute or any judgment, order, rule or regulation of any court or governmental
agency or body, domestic or foreign, having jurisdiction over the Purchaser or any of its properties that in the case of clauses (i) and
(iii), would reasonably be expected to have a material adverse effect on the Purchaser’s ability to consummate the transactions
contemplated by the Transaction Documents, including the purchase of the Securities.
29
(d) At
the time the Purchaser was offered the Securities, it was, and as of the date hereof it is, and on each date on which it exercises any
Warrants or converts any Note, it will be: (i) an “accredited investor” (within the meaning of Rule 501(a) under the Securities
Act) satisfying the applicable requirements set forth on Schedule B, (ii) is acquiring the Securities only for its own account
and not for the account of others, or if the Purchaser is subscribing for the Securities as a fiduciary or agent for one or more investor
accounts, each owner of such account is an “accredited investor” (within the meaning of Rule 501(a) under the Securities Act),
and the Purchaser has full investment discretion with respect to each such account, and the full power and authority to make the acknowledgements,
representations, warranties and agreements herein on behalf of each owner of each such account and (iii) is not acquiring the Securities
with a view to, or for offer or sale in connection with, any distribution thereof in violation of the Securities Act (and shall provide
the requested information on Schedule B following the signature page hereto).
(e) The
Purchaser acknowledges and agrees that the Securities are being offered in a transaction not involving any public offering within the
meaning of the Securities Act and that the Securities have not been registered under the Securities Act or the securities laws of any
state in the U.S. or other jurisdiction and that the Company is not required to register the Securities. The Purchaser acknowledges and
agrees that the Securities may not be offered, resold, transferred, pledged or otherwise disposed of by the Purchaser absent an effective
registration statement under the Securities Act, except (i) to the Company or a subsidiary thereof, (ii) pursuant to an applicable exemption
from the registration requirements of the Securities Act (including without limitation a private resale pursuant to so-called “Section
4(a)1½”), or (iii) an ordinary course pledge such as a broker lien over account property generally, and, in each of clauses
(i)-(iii), in accordance with any applicable securities laws of the states and other jurisdictions of the U.S., and that any certificates
or account entries representing the Securities shall contain a restrictive legend to such effect. The Purchaser acknowledges and agrees
that the Securities will be subject to these securities law transfer restrictions, and as a result of these transfer restrictions, the
Purchaser may not be able to readily offer, resell, transfer, pledge or otherwise dispose of the Securities and may be required to bear
the financial risk of an investment in the Securities for an indefinite period of time. The Purchaser acknowledges and agrees that it
has been advised to consult legal counsel prior to making any offer, resale, pledge or transfer of any of the Securities.
(f) The
Purchaser understands and agrees that it is purchasing the Securities directly from the Company. The Purchaser further acknowledges that
there have not been, and the Purchaser hereby agrees that it is not relying on, any representations, warranties, covenants or agreements
made to the Purchaser by the Company, the SPAC, any of their respective Affiliates or any control persons, officers, directors, employees,
partners, agents or representatives or any other person or entity, expressly or by implication, other than those representations, warranties,
covenants and agreements of the Company set forth in this Agreement. The Purchaser agrees that none of (i) any other Purchaser (including
the controlling persons, members, officers, directors, partners, agents, or employees of any such other Purchaser) or (ii) the SPAC or
any other party to the Business Combination Agreement, including any such Person’s representatives, Affiliates or any of its or
their control persons, officers, directors or employees, that is not a party hereto, shall be liable to the Purchaser pursuant to this
Agreement for any action heretofore or hereafter taken or omitted to be taken by any of them in connection with the purchase of the Securities.
(g) In
making its decision to purchase the Securities, the Purchaser has relied solely upon the independent investigation made by the Purchaser
and the Company’s representations in Article 3 of this Agreement. The Purchaser acknowledges and agrees that the Purchaser
has received such information as the Purchaser deems necessary in order to make an investment decision with respect to the Securities,
including with respect to the Company and the Business Combination, and made its own assessment and is satisfied concerning the relevant
financial, tax and other economic considerations relevant to the Purchaser’s investment in the Securities. The Purchaser represents
and agrees that the Purchaser and the Purchaser’s professional advisor(s), if any, have had the full opportunity to ask such questions,
receive such answers and obtain such information as the Purchaser and the Purchaser’s professional advisor(s), if any, have deemed
necessary to make an investment decision with respect to the Securities. The Purchaser acknowledges that certain information provided
by the Company was based on projections, and such projections were prepared in good faith based on assumptions and estimates that are
inherently uncertain and are subject to a wide variety of significant business, economic and competitive risks and uncertainties that
could cause actual results to differ materially from those contained in the projections. The Purchaser further acknowledges that the information
provided to the Purchaser was preliminary and subject to change, including in the registration statement and the proxy statement and/or
prospectus that the Company or another party intends to file with the Commission in connection with the Business Combination (which will
include substantial additional information about the Company and the Business Combination and will update and supersede the information
previously provided to the Purchaser). In addition, the Company, the SPAC and their respective Affiliates may have acquired non-public
information with respect to the Company Entities or the SPAC which the Purchaser agrees need not be provided to it. In connection with
the issuance of the Securities to the Purchaser, none of the Company Entities, the SPAC, or any of their respective Affiliates has acted
as a financial advisor or fiduciary to the Purchaser.
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(h) The
Purchaser became aware of this offering of the Securities solely by means of direct contact between the Purchaser and the Company or its
Affiliates, and Securities were offered to the Purchaser solely by direct contact between the Purchaser and the Company or its Affiliates
or agents. The Purchaser did not become aware of this offering of the Securities, nor were the Securities offered to the Purchaser, by
any other means. The Purchaser acknowledges that the Company represents and warrants that the Securities (i) were not offered by any form
of general solicitation or general advertising (within the meaning of Regulation D of the Securities Act) and (ii) are not being offered
in a manner involving a public offering under, or in a distribution in violation of, the Securities Act, or any state securities laws.
(i) The
Purchaser acknowledges that it is aware that there are substantial risks incident to the purchase and ownership of the Securities. The
Purchaser has such knowledge and experience in financial and business matters as to be capable of evaluating the merits and risks of an
investment in the Securities, and the Purchaser has had an opportunity to seek, and has sought, such accounting, legal, business and tax
advice as the Purchaser has considered necessary to make an informed investment decision. The Purchaser (i) is an institutional account
as defined in FINRA Rule 4512(c), (ii) is a sophisticated investor, experienced in investing in private equity transactions and capable
of evaluating investment risks independently, both in general and with regard to all transactions and investment strategies involving
a security or securities, and (iii) has exercised independent judgment in evaluating its participation in the purchase of the Securities.
The Purchaser understands and acknowledges that the purchase and sale of the Securities hereunder meets (x) the exemptions from filing
under FINRA Rule 5123(b)(1)(A) and (y) the institutional customer exemption under FINRA Rule 2111(b).
(j) The
Purchaser has adequately analyzed and fully considered the risks of an investment in the Securities and determined that the Securities
are a suitable investment for the Purchaser and that the Purchaser is able at this time and in the foreseeable future to bear the economic
risk of a total loss of the Purchaser’s investment in the Company. The Purchaser acknowledges specifically that a possibility of
total loss exists.
(k) The
Purchaser understands and agrees that no federal or state agency has passed upon or endorsed the merits of the offering of the Securities
or made any findings or determination as to the fairness of this investment.
(l) The
Purchaser is not (i) a person or entity named, nor owned or controlled by an entity named on, on the List of Specially Designated Nationals
and Blocked Persons administered by OFAC or in any OFAC Lists, or a person or entity prohibited by any OFAC sanctions program, (ii) a
Designated National as defined in the Cuban Assets Control Regulations, 31 C.F.R. Part 515, (iii) a non-U.S. shell bank or providing banking
services indirectly to a non-U.S. shell bank, or (iv) located, organized, or ordinarily resident in a jurisdiction subject to comprehensive
sanctions administered by OFAC, including Cuba, Iran, North Korea, Syria, and the Crimea, Donetsk, and Luhansk regions of Ukraine. The
Purchaser agrees to provide law enforcement agencies, if requested thereby, such records as required by applicable law, provided that
the Purchaser is permitted to do so under applicable law. If the Purchaser is a financial institution subject to the BSA/PATRIOT Act,
the Purchaser maintains policies and procedures reasonably designed to comply with applicable obligations under the BSA/PATRIOT Act. To
the extent required, the Purchaser maintains policies and procedures reasonably designed for the screening of its investors against the
OFAC sanctions programs, including the OFAC List. To the extent required, the Purchaser maintains policies and procedures reasonably designed
to ensure that the funds held by the Purchaser and used to purchase the Securities were legally derived.
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(m) No
foreign person (as defined in 31 C.F.R. Part 800.224) in which the national or subnational governments of a single foreign state have
a substantial interest (as defined in 31 C.F.R. Part 800.244) will acquire a substantial interest in the Company as a result of the purchase
and sale of Securities hereunder such that a declaration to the Committee on Foreign Investment in the United States would be mandatory
under 31 C.F.R. Part 800.401, and no foreign person will have control (as defined in 31 C.F.R. Part 800.208) over the Company from and
after the Closing as a result of the purchase and sale of Securities hereunder.
(n) The
Purchaser: (i) has sufficient immediately available cash or other funds available to pay the Subscription Amount pursuant to Section
2.2(b)(ii) and any expenses incurred by the Purchaser in connection with the transactions contemplated by or in connection with the
Transaction Documents; (ii) has the resources and capabilities (financial or otherwise) to perform its obligations under the Transaction
Documents; and (iii) has not incurred any obligation, commitment, restriction or liability of any kind, absolute or contingent, present
or future, which would impair or adversely affect its ability to perform its obligations under the Transaction Documents.
(o) The
Purchaser acknowledges that it is not relying upon, and has not relied upon, any statement, representation or warranty made by any person,
firm or Company (including, without limitation, the Company, the SPAC or any of their respective Affiliates or any of their respective
or their respective Affiliates’ control persons, officers, directors, employees, agents or representatives), other than the representations
and warranties of the Company contained in Article 3 of this Agreement, in making its investment or decision to invest in the Company.
The Purchaser agrees that none of (i) any other Person participating in any other private placement of securities of the Company (including
the controlling persons, officers, directors, partners, agents or employees of any such other Person) (ii) the Company, its Affiliates
or any of its or their respective Affiliates’ control persons, officers, directors, partners, agents, employees or representatives
nor (iii) the SPAC, its Affiliates or any of its or their respective control persons, officers, directors, partners, agents, employees
or representatives shall be liable to the Purchaser pursuant to the Transaction Documents or any other agreement related to a private
placement of Securities for any action heretofore or hereafter taken or omitted to be taken by any of them in connection with the purchase
of the Securities hereunder or thereunder.
(p) At
all times on or prior to the Closing Date, the Purchaser has no binding commitment to dispose of, or otherwise transfer (directly or indirectly),
any of the Securities.
(q) The
Purchaser hereby agrees that neither it, nor any person or entity acting on its behalf or pursuant to any understanding with the Purchaser,
shall, directly or indirectly, engage in any hedging activities or execute any Short Sales with respect to the securities of the Company
from the date hereof until the Closing or the earlier termination of this Agreement in accordance with its terms.
(r) The
Purchaser acknowledges that (i) the Company Entities, and the SPAC, and any of their respective Affiliates, control persons, officers,
directors, employees, agents or representatives currently may have, and later may come into possession of, information regarding the Company
Entities and the SPAC that is not known to the Purchaser and that may be material to a decision to purchase the Securities, (ii) the Purchaser
has determined to purchase the Securities notwithstanding its lack of knowledge of such information, and (iii) none of the Company Entities
or the SPAC or any of their respective Affiliates, control persons, officers, directors, employees, agents or representatives shall have
liability to the Purchaser, and the Purchaser hereby to the extent permitted by law waives and releases any claims it may have against
the Company Entities and the SPAC, and their respective Affiliates, control persons, officers, directors, employees, agents or representatives,
with respect to the nondisclosure of such information.
(s) The
Purchaser acknowledges its obligations under applicable securities laws with respect to the treatment of non-public information relating
to the Company.
(t) The
Purchaser either (i) is a “citizen of the United States” as defined in 49 U.S.C. § 40102(a)(15) or (ii) has disclosed
in writing to the Company, prior to the execution of this Agreement, that it is not a citizen of the United States within the meaning
of such definition.
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(u) The
Purchaser acknowledges that (i) Barclays Capital Inc. (“Barclays”) is not acting as placement agent, as underwriter
or in any other capacity in connection with the sale of the Securities pursuant to this Agreement; nor is Barclays making any recommendation
to the Purchaser in respect of the purchase of the Securities and (ii) Barclays shall not deem the Purchaser to be a “retail investor”
or “retail customer” of Barclays for purposes of either Securities and Exchange Commission Form CRS or Regulation Best Interest.
(v) Each
Purchaser, severally and not jointly, represents and warrants that such Purchaser is acting independently with respect to its investment
in the Securities and is not acting as part of a “group” (within the meaning of Section 13(d)(3) of the Securities Exchange
Act of 1934, as amended, and the rules and regulations promulgated thereunder) with any other Purchaser or any other Person in connection
with the purchase of the Securities or any securities of the Company or the Public Company. Each Purchaser acknowledges and agrees that
(i) the purchase price and other terms of such Purchaser’s investment have been determined independently by such Purchaser, (ii)
such Purchaser has made its investment decision independently of every other Purchaser and independently of any information, materials,
statements or opinions as to the business, affairs, operations, assets, properties, liabilities, results of operations, condition (financial
or otherwise) or prospects of the Company or the SPAC that may have been made or given by any other Purchaser or its agents or representatives,
and (iii) nothing contained herein, and no action taken by any Purchaser pursuant hereto, shall be deemed to constitute the Purchasers
as a partnership, an association, a joint venture or any other kind of entity, or create a presumption that the Purchasers are in any
way acting in concert or as a group with respect to such obligations or the transactions contemplated herein. For the avoidance of doubt,
the foregoing shall not in any way be construed as the Purchasers acting in concert or as a group with respect to the purchase, disposition
or voting of securities or otherwise.
Article
5
OTHER AGREEMENTS OF THE PARTIES
5.1 Transfer
Restrictions.
(a) The
Securities may only be disposed of in compliance with state and federal securities laws. In connection with any transfer of Securities
other than pursuant to an effective registration statement or Rule 144, to the Company or to an Affiliate of a Purchaser or in connection
with a pledge as contemplated in Section 5.1(b), the Company may require the transferor thereof to provide to the Company an opinion
of counsel selected by the transferor and reasonably acceptable to the Company, the form and substance of which opinion shall be reasonably
satisfactory to the Company, to the effect that such transfer does not require registration of such transferred Securities under the Securities
Act. As a condition of transfer, any such transferee shall agree in writing to be bound by the terms of this Agreement and shall have
the rights and obligations of a Purchaser under this Agreement.
(b) Each
Purchaser agrees to the imprinting, so long as is required by this Section 5.1, of a legend on any of the Securities in the following
form and any such other legend as may be required pursuant to the Charter:
NEITHER THIS SECURITY NOR THE SECURITIES
INTO WHICH THIS SECURITY IS CONVERTIBLE HAS BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION OR THE SECURITIES COMMISSION OF
ANY STATE IN RELIANCE UPON AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT, AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT
PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION
NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS. THIS SECURITY
AND THE SECURITIES ISSUABLE UPON CONVERSION OF THIS SECURITY MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT WITH A REGISTERED
BROKER-DEALER OR OTHER LOAN WITH A FINANCIAL INSTITUTION THAT IS AN “ACCREDITED INVESTOR” AS DEFINED IN RULE 501(a) UNDER
THE SECURITIES ACT OR OTHER LOAN SECURED BY SUCH SECURITIES.
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(c) Each
Purchaser agrees with the Company that such Purchaser will sell any Securities pursuant to either the registration requirements of the
Securities Act, including any applicable prospectus delivery requirements, or an exemption therefrom, and that if Securities are sold
pursuant to a registration statement, they will be sold in compliance with the plan of distribution set forth therein, and acknowledges
that the removal of the restrictive legend from certificates (or reasonable evidence of issuance by book entry, as applicable) representing
Securities as set forth in this Section 5.1 is predicated upon the Company’s reliance upon this understanding.
5.2 Acknowledgment
of Dilution. The Company acknowledges that the issuance of the Securities and the Underlying Shares issuable upon conversion or
exercise thereof will result in dilution of the outstanding shares of the Company, which dilution may be substantial under certain market
conditions. The Company further acknowledges that its obligations under the Transaction Documents, including, without limitation, its
obligation to issue the Underlying Shares pursuant to the Transaction Documents, are unconditional and absolute and not subject to any
right of set off, counterclaim, delay or reduction, regardless of the effect of any such dilution or any claim the Company may have against
any Purchaser and regardless of the dilutive effect that such issuance may have on the ownership of the other stockholders of the Company.
5.3 Integration.
The Company shall not sell, offer for sale or solicit offers to buy or otherwise negotiate in respect of any security (as defined in Section
2 of the Securities Act) that would be integrated with the offer or sale of the Securities in a manner that would require the registration
under the Securities Act of the sale of the Securities.
5.4 Conversion
and Exercise Procedures. No ink-original notice of exercise or notice of conversion shall be required, nor shall any medallion
guarantee (or other type of guarantee or notarization) of any notice of exercise or conversion form be required in order to exercise the
Warrants or convert the Note, except as set forth in the Transaction Documents. No additional legal opinion, other information or instructions
shall be required of any Purchaser to exercise its Warrants or convert its Note. The Company shall honor exercises of the Warrants and
conversions of the Note and shall deliver Underlying Shares in accordance with the terms, conditions and time periods set forth in the
Transaction Documents.
5.5 Use
of Proceeds. The Company shall use the net proceeds from the sale of the Securities hereunder for general corporate and working
capital purposes, in the Company’s exclusive discretion.
5.6 Indemnification.
(a) Subject
to the provisions of this Section 5.6 and Section 6.10, the Company will indemnify and hold each Purchaser Party harmless
from any and all Losses that any Purchaser Party may suffer or incur as a result of or relating to any breach of any of the representations
and warranties of the Company found exclusively in Section 3.1 and the covenants or agreements made by the Company in this Agreement
or in the other Transaction Documents (unless such Loss is primarily based upon a material breach of a Purchaser Party’s representations,
warranties or covenants under the Transaction Documents or any agreements or understandings a Purchaser Party may have with any such third
party or any violations by a Purchaser Party of state or federal securities laws or any conduct by a Purchaser Party which is finally
judicially determined to constitute fraud, gross negligence or willful misconduct or any claims of breaches of fiduciary duties).
(b) Subject
to the provisions of this Section 5.6 and Section 6.10, each Purchaser will, severally and not jointly, indemnify and hold
each Company Party harmless from any and all Losses that any Company Party may suffer or incur as a result of or relating to any breach
of any of the representations, warranties, covenants or agreements made by the Purchaser in this Agreement or in the other Transaction
Documents (unless such Loss is primarily based upon a material breach of a Company Party’s representations, warranties or covenants
under the Transaction Documents or any agreements or understandings a Company Party may have with any such third party or any violations
by a Company Party of state or federal securities laws or any conduct by a Company Party which is finally judicially determined to constitute
fraud, gross negligence or willful misconduct or any claims of breaches of fiduciary duties).
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(c) If
any Action or Proceeding shall be brought against any Person in respect of which indemnity may be sought pursuant to this Agreement, such
Person (the “Indemnified Party”) shall promptly notify the Person against whom such indemnity may be sought (the “Indemnifying
Party”) in writing, but the omission to notify such Indemnifying Party will not relieve the Indemnifying Party from any liability
that it may have to any Indemnified Party under this Section 5.6 unless, and only to the extent that, such omission results in
the forfeiture of substantive rights or defenses by the Indemnifying Party. The Indemnifying Party shall have the right to assume the
defense thereof with counsel of its own choosing reasonably acceptable to the Indemnified Party. Any Indemnified Party shall have the
right to employ separate counsel in any such Action or Proceeding and participate in the defense thereof, but the fees and expenses of
such counsel shall be at the expense of such Indemnified Party except to the extent that (i) the employment thereof has been specifically
authorized by the Indemnifying Party in writing, (ii) the Indemnifying Party has failed after a reasonable period of time to assume such
defense and to employ counsel or (iii) in such Action or Proceeding there is, in the reasonable opinion of counsel, a material conflict
on any material issue between the position of the Indemnifying Party and the position of such Indemnified Party, in which case the Indemnifying
Party shall be responsible for the reasonable fees and expenses of no more than one such separate counsel. The Indemnifying Party shall
not be liable for any settlement of any Proceeding effected without its written consent, but if settled with such consent or if there
be a final judgment for the plaintiff, the Indemnifying Party agrees to indemnify the Indemnified Party from and against any loss or liability
by reason of such settlement or judgment. No Indemnifying Party shall, without the prior written consent of the Indemnified Party, effect
any settlement of any pending or threatened Proceeding in respect of which any Indemnified Party is or could have been a party and indemnity
could have been sought hereunder by such Indemnified Party, unless such settlement includes an unconditional release of such Indemnified
Party from all liability on claims that are the subject matter of such Proceeding.
5.7 Blue
Sky Filings. The Company shall take such action as the Company shall reasonably determine is necessary in order to obtain an exemption
for, or to qualify the Securities for, sale to the Purchasers at the Closing under applicable securities or “Blue Sky” laws
of the states of the U.S.
5.8 Securities
Laws Disclosures; Publicity.
(a) The
Company shall use commercially reasonable efforts to cause the SPAC to (a) by 9:30 a.m. (New York City time) issue a press release and/or
file a Current Report on Form 8-K (the “Disclosure Document”) disclosing the material terms of the transactions contemplated
hereby and all material non-public information (other than the Additional Information) concerning the Company disclosed to the Purchasers
by the Company, the SPAC or their respective agents, and (b) in respect of any information that is issued in a press release, file a Current
Report on Form 8-K including the form of this Agreement as an exhibit thereto, within the time required by the Exchange Act. Effective
upon the issuance of such Disclosure Document, the Company acknowledges and represents to each Purchaser that (i) if a Purchaser has not
received the Additional Information, such Purchaser shall not be in possession of material non-public information concerning the Company
disclosed to such Purchaser by the Company or its agents and (ii) if a Purchaser has received the Additional Information, such Purchaser
shall not be in possession of material non-public information (other than the Additional Information) concerning the Company disclosed
to such Purchaser by the Company or its agents.
(b) To
the extent any disclosure concerning the parties and/or material terms of the transactions contemplated hereby is required by law or regulations,
the Company shall provide the Purchasers with prompt prior written notice of such requirement so that the Purchasers may (a) seek appropriate
relief to prevent or limit such disclosure should it wish to do so, (b) furnish only that portion of the information which is legally
required to be furnished or disclosed, and to the extent reasonably feasible, (c) consult with the Company on content and timing prior
to any such disclosure. Notwithstanding anything to the contrary contained herein, without the prior written consent of such Purchaser,
the Company shall not (and shall cause each of its affiliates and representatives not to) disclose the name of such Purchaser or its investment
adviser in any filing, announcement, release or otherwise, except as required by law in which case the Company shall comply with the provisions
of this Section 5.8. Notwithstanding the foregoing, if a Purchaser is a multi-managed investment vehicle whereby separate
portfolio managers manage separate portions of such Purchaser’s assets and the portfolio managers have no direct knowledge of the
investment decisions made by the portfolio managers managing other portions of such Purchaser’s assets, the covenant set forth above
shall only apply with respect to the portion of assets managed by the portfolio manager that made the investment decision to purchase
the Securities covered by this Agreement.
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5.9 Foreign
Ownership Limitations. Each Purchaser, severally and not jointly, acknowledges that upon consummation of the Business Combination,
the Company will become a wholly-owned subsidiary of a publicly traded company (the “Public Company”), and that the
Public Company’s Certificate of Incorporation is expected to contain provisions limiting aggregate foreign ownership and voting
of its capital stock by persons who are not citizens of the United States as defined in 49 U.S.C. § 40102(a)(15). Such provisions
are designed to preserve the eligibility of the Company and its subsidiaries to register civil aircraft on the United States Aircraft
Registry maintained by the Federal Aviation Administration pursuant to 49 U.S.C. § 44102. Any shares of Common Stock issuable upon
conversion of the Note or exercise of the Warrant, and any shares of capital stock of the Public Company issuable in exchange therefor
in connection with the Business Combination, shall be subject to any such foreign ownership or voting limitations as set forth in the
Public Company’s Organizational Documents from time to time. Each Purchaser, severally and not jointly, consents to the application
of such provisions to the Securities and any shares received in exchange therefor, and agrees that the enforcement of such provisions
(including without limitation any suspension of voting rights, refusal to register a transfer, mandatory conversion to non-voting stock,
or mandatory divestiture) shall not give rise to any claim by such Purchaser against the Company, the Public Company, or any of their
respective Affiliates. The foregoing shall not limit or modify any Purchaser’s economic rights (including rights to dividends, distributions,
and conversion value) except to the extent that a mandatory divestiture is effected at fair market value.
5.10 Registration.
To the extent permissible under applicable securities laws, the Company shall use commercially reasonable efforts to cause SPAC to file
a registration statement on Form S-4 (“Form S-4”) in connection with the consummation of the Business Combination to
register the exchange of the Notes for the Pubco Preferred Stock (as defined in the Notes) and the Warrants for warrants to purchase common
stock of SPAC (the “PubCo Warrants”). To the extent that the exchange of the Notes for the Pubco Preferred Stock and
the Warrants for the PubCo Warrants cannot be registered pursuant to such Form S-4 under applicable securities laws, following the consummation
of the Business Combination, the Company will use commercially reasonable efforts to cause SPAC to (a) grant registration rights to the
Purchaser not less favorable than those provided in the Registration Rights Agreement of the SPAC dated February 10, 2026, or (b) file
a resale registration statement on Form S-1 or Form S-3 covering the shares of common stock of the SPAC issuable upon exercise or conversion,
as applicable, of the PubCo Warrants and the PubCo Preferred Stock within 30 days after the consummation of the Business Combination and
cause such resale registration statement to be declared effective no later than the earlier of (i) the 90th calendar day following the
filing date thereof if the Securities and Exchange Commission notifies the Company that it will “review” such registration
statement and (ii) the tenth (10th) business day after the date the Company is notified (orally or in writing, whichever is earlier) by
the Securities and Exchange Commission that such registration statement will not be “reviewed” or will not be subject to further
review.
5.11 Non-Public
Information. The Company covenants and agrees that neither it, nor any other Person acting on its behalf will provide the Purchaser
or its agents or counsel with any information that constitutes, or the Company reasonably believes constitutes, material non-public information,
unless prior thereto the Purchaser shall have consented to the receipt of such information and agreed with the Company to keep such information
confidential. To the extent that the Company or any of its officers, directors, agents, employees or Affiliates delivers any material,
non-public information to the Purchaser without the Purchaser’s consent, the Company hereby covenants and agrees that the Purchaser
shall not have any duty of trust or confidentiality to the Company or any of its officers, directors, agents, employees or Affiliates,
or a duty to the Company or any of its officers, directors, agents, employees or Affiliates not to trade while aware of, such material,
non-public information, provided that the Purchaser shall remain subject to applicable law. To the extent that any notice provided pursuant
to any Transaction Document following the consummation of the Business Combination constitutes, or contains, material, non-public information
regarding the Company, the Company shall, if reasonably practicable simultaneously file such notice with the SEC pursuant to a Current
Report on Form 8-K. The Company understands and confirms that the Purchaser shall be relying on the foregoing covenants in effecting transactions
in securities of the Company.
Article
6
MISCELLANEOUS
6.1 Termination.
This Agreement shall terminate and be void and of no further force and effect, and all rights and obligations of the parties hereunder
shall terminate without any further liability on the part of any party in respect hereof, upon the mutual written agreement of the parties
hereto to terminate this Agreement.
6.2 Fees
and Expenses. Each party shall pay the fees and expenses of its advisers, counsel, accountants and other experts, if any, and
all other expenses incurred by such party incident to the negotiation, preparation, execution, delivery and performance of this Agreement
and the other Transaction Documents. The Company shall pay all transfer agent fees (including, without limitation, any fees required for
same-day processing of any instruction letter delivered by the Company and any conversion notice delivered by a Purchaser), stamp taxes
and other taxes and duties levied in connection with the delivery of any Securities to the Purchaser.
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6.3 Entire
Agreement. The Transaction Documents, together with the exhibits and schedules thereto, contain the entire understanding of the
parties with respect to the subject matter hereof and thereof and supersede all prior agreements and understandings, oral or written,
with respect to such matters, which the parties acknowledge have been merged into such documents, exhibits and schedules.
6.4 Notices.
Any and all notices or other communications or deliveries required or permitted to be provided hereunder shall be in writing and shall
be deemed given and effective on the earliest of: (a) the time of transmission, if such notice or communication is delivered via email
attachment at the e-mail address as set forth on the signature pages attached hereto at or prior to 5:30 p.m. (New York City time) on
a Business Day, (b) the next Business Day after the time of transmission, if such notice or communication is delivered via email attachment
at the e-mail address as set forth on the signature pages attached hereto on a day that is not a Business Day or later than 5:30 p.m.
(New York City time) on any Business Day, (c) the second (2nd) Business Day following the date of mailing, if sent by U.S.
nationally recognized overnight courier service or (d) upon actual receipt by the party to whom such notice is required to be given. The
address for such notices and communications shall be as set forth on the signature pages attached hereto.
6.5 Amendments;
Waivers. No provision of this Agreement may be waived, modified, supplemented or amended except in a written instrument signed,
in the case of an amendment, by the Company and the Requisite Purchasers or in the case of a waiver, by the Company or the Requisite Purchasers,
as the case may be, dependent on which party against whom enforcement of any such waived provision is sought. Upon the effectuation of
such waiver or amendment with the consent of the Requisite Purchasers in accordance with this Section 6.5, such amendment or waiver
shall be effective as to, and binding against, all Purchasers. Sections 4(g), 4(k), 4(w), 5.8, 6.8, 6.19, 6.20 and the signature page
hereto may not be waived, modified, supplemented or amended except in a written instrument signed by the Company and the Purchaser. No
waiver of any default with respect to any provision, condition or requirement of this Agreement shall be deemed to be a continuing waiver
in the future or a waiver of any subsequent default or a waiver of any other provision, condition or requirement hereof, nor shall any
delay or omission of any party to exercise any right hereunder in any manner impair the exercise of any such right.
6.6 Headings.
The headings herein are for convenience only, do not constitute a part of this Agreement and shall not be deemed to limit or affect any
of the provisions hereof.
6.7 Successors
and Assigns. This Agreement shall be binding upon and inure to the benefit of the parties and their successors and permitted assigns.
The Company may not assign this Agreement or any rights or obligations hereunder without the prior written consent of the Purchaser (other
than by merger). The Purchaser may assign any or all of its rights under this Agreement to any Person to whom the Purchaser assigns or
transfers any Securities, provided that such transferee agrees in writing to be bound, with respect to the transferred Securities, by
the provisions of the Transaction Documents that apply to the “Purchaser.”
6.8 Third-Party
Beneficiaries. This Agreement is intended for the benefit of the parties hereto and their respective successors and permitted
assigns and is not for the benefit of, nor may any provision hereof be enforced by, any other Person, except as otherwise set forth in
Section 5.6 and this Section 6.8.
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6.9 Governing
Law. All questions concerning the construction, validity, enforcement and interpretation of the Transaction Documents shall be
governed by and construed and enforced in accordance with the internal laws of the State of Delaware, without regard to the principles
of conflicts of law thereof. Each party agrees that all legal Proceedings concerning the interpretations, enforcement and defense of the
transactions contemplated by this Agreement and any other Transaction Documents (whether brought against a party hereto or its respective
Affiliates, directors, officers, shareholders, partners, members, employees or agents) shall be commenced exclusively in the state and
federal courts sitting in the State of Delaware. Each party hereby irrevocably submits to the exclusive jurisdiction of the state and
federal courts sitting in the State of Delaware for the adjudication of any dispute hereunder or in connection herewith or with any transaction
contemplated hereby or discussed herein (including with respect to the enforcement of any of the Transaction Documents), and hereby irrevocably
waives, and agrees not to assert in any Action or Proceeding, any claim that it is not personally subject to the jurisdiction of any such
court, that such Action or Proceeding is improper or is an inconvenient venue for such Proceeding. Each party hereby irrevocably waives
personal service of process and consents to process being served in any such Action or Proceeding by mailing a copy thereof via registered
or certified mail or overnight delivery (with evidence of delivery) to such party at the address in effect for notices to it under this
Agreement and agrees that such service shall constitute good and sufficient service of process and notice thereof. Nothing contained herein
shall be deemed to limit in any way any right to serve process in any other manner permitted by law. If any party shall commence an Action
or Proceeding to enforce any provisions of the Transaction Documents, then, in addition to the obligations of the parties under Section
5.6, the prevailing party in such Action or Proceeding shall be reimbursed by the non-prevailing party for its reasonable attorneys’
fees and other costs and expenses incurred with the investigation, preparation and prosecution of such Action or Proceeding.
6.10 Survival.
The representations and warranties contained in Section 3.1 and Article 4 herein shall survive the Closing and the delivery
of the Securities for a period of two (2) years following the Closing. The representations and warranties contained in Sections 3.2
through 3.29 herein shall not survive the Closing and the delivery of the Securities.
6.11 Execution.
This Agreement may be executed in two or more counterparts, all of which when taken together shall be considered one and the same agreement
and shall become effective when counterparts have been signed by each party and delivered to each other party, it being understood that
the parties need not sign the same counterpart. In the event that any signature is delivered by e-mail delivery of a “.pdf”
format data file, such signature shall create a valid and binding obligation of the party executing (or on whose behalf such signature
is executed) with the same force and effect as if such “.pdf” signature page were an original thereof.
6.12 Severability.
If any term, provision, covenant or restriction of this Agreement is held by a court of competent jurisdiction to be invalid, illegal,
void or unenforceable, the remainder of the terms, provisions, covenants and restrictions set forth herein shall remain in full force
and effect and shall in no way be affected, impaired or invalidated, and the parties hereto shall use their commercially reasonable efforts
to find and employ an alternative means to achieve the same or substantially the same result as that contemplated by such term, provision,
covenant or restriction. It is hereby stipulated and declared to be the intention of the parties that they would have executed the remaining
terms, provisions, covenants and restrictions without including any of such that may be hereafter declared invalid, illegal, void or unenforceable.
6.13 Remedies.
In addition to being entitled to exercise all rights provided herein or granted by law, including recovery of damages, each of the Purchaser
and the Company will be entitled to specific performance under the Transaction Documents. The parties agree that monetary damages may
not be adequate compensation for any loss incurred by reason of any breach of obligations contained in the Transaction Documents and hereby
agree to waive and not to assert in any Action for specific performance of any such obligation the defense that a remedy at law would
be adequate. For the avoidance of doubt, Section 5.6 shall be the exclusive remedy for any Losses resulting from a breach of any
of the representations and warranties contained in Article 3 and Article 4 of this Agreement, in each case exclusively to
the extent such Losses arise during the survival period of such representations and warranties pursuant to the terms of this Agreement.
6.14 Payment
Set Aside. To the extent that the Company makes a payment or payments to any Purchaser pursuant to any Transaction Document or
a Purchaser enforces or exercises its rights thereunder, and such payment or payments or the proceeds of such enforcement or exercise
or any part thereof are subsequently invalidated, declared to be fraudulent or preferential, set aside, recovered from, disgorged by or
are required to be refunded, repaid or otherwise restored to the Company, a trustee, receiver or any other Person under any law (including,
without limitation, any bankruptcy law, state or federal law, common law or equitable cause of action), then to the extent of any such
restoration the obligation or part thereof originally intended to be satisfied shall be revived and continued in full force and effect
as if such payment had not been made or such enforcement or setoff had not occurred.
38
6.15 Usury.
To the extent it may lawfully do so, the Company hereby agrees not to insist upon or plead or in any manner whatsoever claim, and will
resist any and all efforts to be compelled to take the benefit or advantage of, usury laws wherever enacted, now or at any time hereafter
in force, in connection with any Action or Proceeding that may be brought by any Purchaser in order to enforce any right or remedy under
any Transaction Document. Notwithstanding any provision to the contrary contained in any Transaction Document, it is expressly agreed
and provided that the total liability of the Company under the Transaction Documents for payments in the nature of interest shall not
exceed the maximum lawful rate authorized under applicable law (the “Maximum Rate”), and, without limiting the foregoing,
in no event shall any rate of interest or default interest, or both of them, when aggregated with any other sums in the nature of interest
that the Company may be obligated to pay under the Transaction Documents exceed such Maximum Rate. It is agreed that if the maximum contract
rate of interest allowed by law and applicable to the Transaction Documents is increased or decreased by statute or any official governmental
action subsequent to the date hereof, the new maximum contract rate of interest allowed by law will be the Maximum Rate applicable to
the Transaction Documents from the effective date thereof forward, unless such application is precluded by applicable law. If under any
circumstances whatsoever, interest in excess of the Maximum Rate is paid by the Company to any Purchaser with respect to indebtedness
evidenced by the Transaction Documents, such excess shall be applied by the Purchaser to the unpaid principal balance of any such indebtedness
or be refunded to the Company, the manner of handling such excess to be at the Purchaser’s election.
6.16 Liquidated
Damages. The Company’s obligations to pay any partial liquidated damages or other amounts owing under the Transaction Documents
is a continuing obligation of the Company and shall not terminate until all unpaid partial liquidated damages and other amounts have been
paid notwithstanding the fact that the instrument or security pursuant to which such partial liquidated damages or other amounts are due
and payable shall have been canceled.
6.17 Saturdays,
Sundays, Holidays, etc. If the last or appointed day for the taking of any action or the expiration of any right required
or granted herein shall not be a Business Day, then such action may be taken or such right may be exercised on the next succeeding Business
Day.
6.18 Construction.
The parties agree that each of them and/or their respective counsel have reviewed and had an opportunity to revise the Transaction Documents
and, therefore, the normal rule of construction to the effect that any ambiguities are to be resolved against the drafting party shall
not be employed in the interpretation of the Transaction Documents or any amendments thereto. In addition, each and every reference to
share prices and Common Stock in any Transaction Document shall be subject to adjustment for reverse and forward stock splits, stock dividends,
stock combinations and other similar transactions of the Common Stock that occur after the date of this Agreement. In this Agreement,
unless the context otherwise requires: (i) whenever required by the context, any pronoun used in this Agreement shall include the corresponding
masculine, feminine or neuter forms, and the singular form of nouns, pronouns and verbs shall include the plural and vice versa; (ii)
“including” (and with correlative meaning “include”) means including without limiting the generality of any description
preceding or succeeding such term and shall be deemed in each case to be followed by the words “without limitation”; and (iii)
the words “herein”, “hereto” and “hereby” and other words of similar import in this Agreement shall
be deemed in each case to refer to this Agreement as a whole and not to any particular portion of this Agreement.
6.19 WAIVER
OF JURY TRIAL. IN ANY ACTION, SUIT, OR PROCEEDING IN ANY JURISDICTION BROUGHT BY ANY PARTY AGAINST ANY OTHER PARTY, THE PARTIES
EACH KNOWINGLY AND INTENTIONALLY, TO THE GREATEST EXTENT PERMITTED BY APPLICABLE LAW, HEREBY ABSOLUTELY, UNCONDITIONALLY, IRREVOCABLY
AND EXPRESSLY WAIVE FOREVER TRIAL BY JURY.
(Signature Pages Follow)
39
IN WITNESS WHEREOF,
the parties hereto have caused this Securities Purchase Agreement to be duly executed by their respective authorized signatories as of
the date first indicated above.
ELROY AIR, INC.
Address for Notice:
By:
Name:
Title:
Email:
With a copy to (which shall not constitute notice):
Attn:
Email:
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK—
SIGNATURE PAGE FOR PURCHASERS FOLLOWS]
[COMPANY SIGNATURE PAGE
TO ELROY AIR, INC. SPA]
IN WITNESS WHEREOF, the undersigned have
caused this Securities Purchase Agreement to be duly executed by their respective authorized signatories as of the date first indicated
above.
Name of Purchaser:
Signature of Authorized Signatory of Purchaser:
______________________________
Name of Authorized Signatory:
Title of Authorized Signatory:
Email Address of Authorized Signatory:
Address for Notice to Purchaser:
Address for Delivery of Securities to Purchaser
(if not same as address for notice):
Subscription Amount (Note Principal Amount): $
Conversion Price: $
Warrant Shares:
EIN Number:
Additional Information Election
☐ No, do not provide the Additional Information
If you have elected “No” above,
please sign where indicated below to confirm that you agree to the following:
The Purchaser acknowledges and understands that
(i) the Company, the SPAC, and their respective affiliates possess material nonpublic information regarding the Company and the SPAC,
including the information set forth on the Company Disclosure Letter and the Company Financials not known to the Purchaser that may impact
the value of the Securities (the “Additional Information”), and that the Company and the SPAC are not disclosing the
Information to the Purchaser. The Purchaser understands, based on its experience, the disadvantage to which the Purchaser is subject due
to the disparity of information between the Company and the SPAC, on the one hand, and the Purchaser, on the other hand. Notwithstanding
such disparity, the Purchaser has deemed it appropriate to enter into this Agreement and to purchase the Securities.
The Purchaser agrees that none of the Company,
the SPAC, or their respective affiliates, principals, stockholders, partners, employees and agents shall have any liability to the Purchaser,
its affiliates, principals, stockholders, partners, employees, agents, grantors or beneficiaries, whatsoever due to or in connection with
the Company’s and/or the SPAC’s use or non-disclosure of the Information or otherwise as a result of this Agreement or the
Purchaser’s acquisition of the Securities, and the Purchaser hereby irrevocably waives any claim that it might have based on the
failure of the Company and/or the SPAC to disclose the Information.
The Purchaser acknowledges that (i) the Company
and the SPAC are relying on the Purchaser’s representations, warranties, acknowledgments and agreements set forth above as a condition
to proceeding with the transactions contemplated by this Agreement; and (ii) without such representations, warranties and agreements,
the Company and the SPAC would not enter into this Agreement or engage in the transactions contemplated thereby.
Signature of Authorized Signatory of Purchaser:
______________________________
Name of Authorized Signatory:
Title of Authorized Signatory:
[PURCHASER SIGNATURE
PAGE TO ELROY AIR, INC. SPA]
Schedule A
Name of Purchaser
Subscription Amount
Note Principal Amount
Warrant Shares
(Common Stock)
SCHEDULE B
ELIGIBILITY REPRESENTATIONS OF PURCHASER
A. QUALIFIED INSTITUTIONAL BUYER STATUS
(Please check the applicable subparagraphs):
☐
We are a “qualified institutional buyer” (as defined in Rule 144A under the Securities Act of 1933, as amended (the
“Securities Act”) (a “QIB”)).
☐
We are subscribing for the Securities as a fiduciary or agent for one or more investor accounts, and each owner of such account
is a QIB.
*** OR ***
B. INSTITUTIONAL ACCREDITED INVESTOR STATUS (Please check the applicable subparagraphs):
☐ We are an
institutional “accredited investor” (as described in Rule 501(a)(1), (2), (3) or (7) under the Securities Act) and have
marked and initialed the appropriate box on the following page indicating the provision under which we qualify as an
“accredited investor.”
*** AND ***
C. AFFILIATE STATUS
(Please check the applicable box) PURCHASER:
☐ is:
☐ is
not:
an “affiliate” (as defined
in Rule 144 under the Securities Act) of the Issuer or acting on behalf of an affiliate of the Issuer.
This page should be completed by Purchaser
and constitutes a part of the Securities Purchase Agreement.
[PURCHASER SIGNATURE
PAGE TO ELROY AIR, INC. SPA]
Rule 501(a) under the Securities Act, in relevant
part, states that an “accredited investor” shall mean any person who comes within any of the below listed categories, or who
the Issuer reasonably believes comes within any of the below listed categories, at the time of the sale of the securities to that person.
Purchaser has indicated, by marking and initialing the appropriate box below, the provision(s) below which apply to Purchaser and under
which Purchaser accordingly qualifies as an “accredited investor.”
☐
Any bank as defined in section 3(a)(2) of the Securities Act, or any savings and loan association or other institution as defined in
section 3(a)(5)(A) of the Securities Act whether acting in its individual or fiduciary capacity;
☐
Any broker or dealer registered pursuant to section 15 of the Securities Exchange Act of 1934, as amended;
☐
Any insurance company as defined in section 2(a)(13) of the Securities Act;
☐
Any investment company registered under the Investment Company Act of 1940, as amended (the “Investment Company Act”)
or a business development company as defined in section 2(a)(48) of the Investment Company Act;
☐
Any Small Business Investment Company licensed by the U.S. Small Business Administration under section 301(c) or (d) of the Small Business
Investment Act of 1958, as amended;
☐
Any plan established and maintained by a state, its political subdivisions, or any agency or instrumentality of a state or its political
subdivisions, for the benefit of its employees, if such plan has total assets in excess of $5,000,000;
☐
Any employee benefit plan within the meaning of the Employee Retirement Income Security Act of 1974, as amended (“ERISA”),
if (i) the investment decision is made by a plan fiduciary, as defined in section 3(21) of ERISA, which is either a bank, a savings and
loan association, an insurance company, or a registered investment adviser, (ii) the employee benefit plan has total assets in excess
of $5,000,000 or, (iii) such plan is a self-directed plan, with investment decisions made solely by persons that are “accredited
investors”;
☐
Any private business development company as defined in section 202(a)(22) of the Investment Advisers Act of 1940, as amended;
☐
Any (i) corporation, limited liability company or partnership, (ii) Massachusetts or similar business trust, or (iii) organization described
in section 501(c)(3) of the Internal Revenue Code of 1986, as amended, not formed for the specific purpose of acquiring the securities
offered, and with total assets in excess of $5,000,000; or
☐
Any trust, with total assets in excess of $5,000,000, not formed for the specific purpose of acquiring the securities offered, whose
subscription is directed by a sophisticated person as described in Section 230.506(b)(2)(ii) of Regulation D.
PURCHASER:
Print Name:
By:
Name:
Title:
Exhibit A
FORM OF CONVERTIBLE NOTE
Exhibit B
FORM OF WARRANT
EX-99.3 — FORM OF PRE-FUNDED CONVERTIBLE NOTE
EX-99.3
Filename: ea029643801ex99-3.htm · Sequence: 13
Exhibit 99.3
THIS
CONVERTIBLE PROMISSORY NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”),
OR ANY STATE SECURITIES LAW AND MAY NOT BE SOLD OR OTHERWISE TRANSFERRED BY ANY PERSON, INCLUDING A PLEDGEE, UNLESS (1) EITHER (A) A
REGISTRATION STATEMENT WITH RESPECT TO SUCH SECURITIES SHALL BE EFFECTIVE UNDER THE ACT OR (B) THE COMPANY SHALL HAVE RECEIVED AN OPINION
OF COUNSEL SATISFACTORY TO THE COMPANY THAT AN EXEMPTION FROM REGISTRATION UNDER SUCH ACT IS THEN AVAILABLE AND (2) THERE SHALL HAVE
BEEN COMPLIANCE WITH ALL APPLICABLE SECURITIES LAWS.
THIS
NOTE HAS BEEN ISSUED WITH ORIGINAL ISSUE DISCOUNT (“OID”). PURSUANT TO TREASURY REGULATION §1.1275-3(b)(1), ALVIN OSWANDY,
A REPRESENTATIVE OF THE COMPANY HEREOF WILL, BEGINNING TEN DAYS AFTER THE ISSUANCE DATE OF THIS NOTE, PROMPTLY MAKE AVAILABLE TO THE
HOLDER UPON REQUEST THE INFORMATION DESCRIBED IN TREASURY REGULATION §1.1275-3(b)(1)(i). THE COMPANY’S HEAD OF STRATEGIC FINANCE
MAY BE REACHED AT TELEPHONE NUMBER (480) 452-2823
ELROY
AIR, INC.
CONVERTIBLE
PROMISSORY NOTE
$[●]
Byron, CA
No. 2026-[●]
June [●], 2026
Elroy
Air, Inc., a Delaware corporation (the “Company”), for value received, hereby promises to pay to [●]
(the “Holder”), or the Holder’s successors or permitted assigns, the principal sum of $[●], together
with interest, in the manner provided herein. This Convertible Promissory Note (this “Note”) has been
issued pursuant to the terms of the Securities Purchase Agreement, dated as of [●], 2026 (the “Purchase Agreement”),
between the Company and the Holder. This Note is one of a series of notes (collectively, the “Notes”) issued
pursuant to securities purchase agreements with substantially the same terms as the Purchase Agreement. The terms of the Notes (including
this Note) are and will be identical except as to the name of the Holder thereof, the date of issuance thereof (where applicable), and
the original principal amount thereof. The Notes shall rank equally without preference or priority of any kind over one another, and
all payments of interest and principal with respect thereto shall be made ratably in proportion to the outstanding principal balance
represented by each Note. Capitalized terms not defined herein have the meanings ascribed to such terms in the Purchase Agreement.
1. Maturity
Date; Pre-Payment.
(a) Maturity
Date and Conversion. Unless earlier repaid or converted, all amounts outstanding and unpaid under this Note, including any then unpaid
and accrued interest, shall be due and payable upon demand by the Holder on, or at any time following, June [●], 20271
(the “Maturity Date”).
(b) Pre-Payment.
This Note may not be prepaid, without the written consent of the Required Holders, except in connection with repayment in accordance
with Section 5.
2. Interest.
The Company shall pay simple interest on the unpaid principal amount hereof, which shall accrue beginning on the issue date set forth
above at a rate equal to twelve percent (12%) per annum (the “Interest Rate”), computed on the basis of the
actual number of days elapsed and a year of 365 days from the date of this Note, until the principal amount and all interest accrued
thereon are paid or converted, as provided herein. Except in accordance with Section 1(b) or upon conversion in accordance with
Section 3, interest shall not be due and payable until the Maturity Date or an earlier Event of Default, Business Combination,
Qualified Financing or Change of Control. If a Qualified Financing is consummated prior to repayment of this Note, then all interest
on this Note shall be deemed to have stopped accruing as of the date set forth in the definitive agreement for the Qualified Financing,
which date shall be determined by the Company, which may be no more than ten (10) days prior to the closing of the Qualified Financing.
1 NTD:
To be one year after the issuance date.
3. Conversion
in Connection with Business Combination
(a) Upon
the closing of the business combination transaction (the “Business Combination”) contemplated by that certain
business combination agreement, dated as of June [●], 2026, by and among Columbus Circle Capital Corp II (prior to the closing
of the Business Combination, “SPAC,” and following the closing of the Business Combination “PubCo”),
IPHX Merger Sub, Inc. and the Company (the “Business Combination Agreement”), without any action on the part
of the Holder, the Company or any other party to the Business Combination Agreement, the unpaid principal amount of this Note, together
with any interest accrued but unpaid thereon as of the day prior to such Business Combination (such aggregate amount of principal and
interest, the “BC Conversion Amount”), shall automatically convert into a number of fully paid and nonassessable
shares of 12.0% Series A Cumulative Convertible Preferred Stock of PubCo (the “PubCo Preferred Stock”) having
the rights, preferences and privileges set forth in the Certificate of Designation of Preferences, Rights and Limitations of 12.0% Series
A Cumulative Convertible Preferred Stock, in substantially the form of Exhibit A hereto (the “Certificate of Designation”)
equal to the quotient of the BC Conversion Amount divided by the BC Conversion Price (as defined below). For purposes of this Note, “BC
Conversion Price” shall mean $12.00. The Holder shall be entitled to customary registration rights with respect to the
PubCo Preferred Stock and any underlying shares of common stock issuable upon conversion thereof pursuant to the Amended and Restated
Registration Rights Agreement (as defined in the Business Combination Agreement).
(b) If
this Note is to be automatically converted pursuant to Section 3(a), written notice shall be delivered to the Holder notifying
the Holder of the conversion to be effected, specifying the applicable BC Conversion Price, the principal amount of the Note to be converted,
together with all accrued and unpaid interest, and the date on which such conversion is expected to occur. The Holder hereby agrees to
execute and deliver to the Company all transaction documents entered into by all other holders of Notes and such other agreements reasonably
requested by the Company and PubCo, including (without limitation) the Amended and Restated Registration Rights Agreement. The Holder
also agrees to deliver the original of this Note if issued in physical form (or a notice to the effect that the original Note has been
lost, stolen or destroyed and an agreement acceptable to the Company and PubCo whereby the Holder agrees to indemnify the Company and
PubCo for any loss incurred by it in connection with this Note) at the closing of the Business Combination for cancellation; provided,
however, that upon closing of such Business Combination, this Note shall be deemed converted and of no further force and effect,
whether or not it is delivered for cancellation as set forth in this sentence. The Company shall, as soon as practicable thereafter,
cause PubCo to issue and deliver to the Holder a certificate or certificates (or a notice of issuance of uncertificated shares, if applicable)
for the number of PubCo Preferred Shares to which the Holder shall be entitled upon such conversion. Any conversion of this Note pursuant
to Section 3(a) shall be deemed to have been made immediately prior to, or concurrent with, the closing of the Business Combination
(it being understood that the closing of the Business Combination will be deemed to be concurrent for purposes hereof to allow for PubCo
to issue the PubCo Preferred Stock upon conversion of this Note), and on and after such date, the Person entitled to receive the shares
issuable upon such conversion shall be treated for all purposes as the record holder of such shares. As used herein, “Person”
shall mean any individual, sole proprietorship, partnership, limited liability company, joint venture, company, trust, unincorporated
organization, association, corporation, institution, public benefit corporation, firm, joint stock company, estate, entity, or government
agency.
(c) No
Fractional Shares. No fractional shares will be issued upon conversion of this Note pursuant to this Section 3. In lieu of
any fractional share to which the Holder would otherwise be entitled, PubCo will round up to the nearest whole share.
2
4. Conversion
in Connection with a Qualified Financing.
(a) If
the Business Combination Agreement has been terminated without the Business Combination having closed (the “Termination
Event”), then upon the closing of a Qualified Financing prior to repayment or conversion of this Note, at the option
of the Holder, the unpaid principal amount of this Note, together with any interest accrued but unpaid thereon, shall convert into
fully paid and nonassessable shares of the capital stock of the Company issued and sold at the closing of such Qualified Financing
(“Qualified Financing Stock”), at the applicable Conversion Price. As used herein, “QF Conversion
Price” shall mean a price per share equal to the lowest price paid in cash by the purchasers of the Qualified
Financing Stock sold in the Qualified Financing. As used herein, a “Qualified Financing” shall mean a
transaction or series of transactions with the principal purpose of raising capital pursuant to which the Company issues and sells
shares of its capital stock for aggregate gross proceeds of (x) at least $25,000,000 (excluding all principal and accrued interest
underlying the Notes), or (y) such lesser amount as is consented to by the Holder. The Holder shall be entitled to customary
registration rights with respect to the Qualified Financing Stock and any underlying shares of common stock issuable upon conversion
thereof.
(b) If
the Holder will have the option to convert this Note pursuant to Section 4(a), written notice shall be delivered to the Holder
notifying the Holder of the conversion to be effected, specifying the QF Conversion Price, the principal amount of the Note to be converted,
together with all accrued and unpaid interest, and the date on which such conversion is expected to occur. The issuance of the Qualified
Financing Stock pursuant to the terms hereof shall be upon and subject to the same terms and conditions (other than the applicable Conversion
Price) applicable to the shares of the Qualified Financing Stock sold to all other purchasers in such Qualified Financing (provided that
the Holder acknowledges and agrees that the Qualified Financing Stock issued to the Holder pursuant to the terms hereof may have a per
share liquidation preference, price-based anti-dilution protection, and dividend rights based on the QF Conversion Price) and the Holder
hereby agrees to execute and deliver to the Company all transaction documents entered into by all other investors and purchasers participating
in the Qualified Financing and such other agreements reasonably requested by the Company, including (without limitation) a purchase agreement
and an investors’ rights agreement and/or registration rights agreement, with customary representations and warranties, registration
rights and transfer restrictions. The Holder also agrees to deliver the original of this Note if issued in physical form (or a notice
to the effect that the original Note has been lost, stolen or destroyed and an agreement acceptable to the Company whereby the Holder
agrees to indemnify the Company for any loss incurred by it in connection with this Note) at the closing of the Qualified Financing for
cancellation; provided, however, that upon closing of such Qualified Financing, this Note shall be deemed converted and
of no further force and effect, whether or not it is delivered for cancellation as set forth in this sentence. The Company shall, as
soon as practicable thereafter, issue and deliver to the Holder a certificate or certificates (or a notice of issuance of uncertificated
shares, if applicable) for the number of shares to which the Holder shall be entitled upon such conversion. Any conversion of this Note
pursuant to Section 4(a) shall be deemed to have been made immediately prior to, or concurrent with, the closing of the Qualified
Financing, and on and after such date, the Person entitled to receive the shares issuable upon such conversion shall be treated for all
purposes as the record holder of such shares.
(c) No
Fractional Shares. No fractional shares will be issued upon conversion of this Note. In lieu of any fractional share to which the
Holder would otherwise be entitled, the Company will pay to the Holder in cash any amount that would otherwise be converted into such
fractional share.
3
5. Change
of Control. If the Termination Event has occurred, unless this Note has previously been repaid or converted, at the option of the
Holder, (i) immediately prior to the closing of a Change of Control, the unpaid principal amount of this Note, together with any interest
accrued but unpaid thereon, shall convert into fully paid and nonassessable shares of common stock of the Company at a price per share
equal to the CoC Price (the “CoC Conversion”); provided, however, that as an alternative to the actual conversion
into the Company’s common stock pursuant to such CoC Conversion, the Company may deem the unpaid principal amount of this Note,
together with any interest accrued but unpaid thereon, to have converted into the Company’s common stock at a price per share equal
to the CoC Price, and the Holder shall be entitled to receive the same consideration payable to the holders of the Company’s common
stock, on a pro rata and pari passu basis, in connection with such Change of Control, as if the Holder was an actual holder of such shares
of common stock or (ii) upon the closing of a Change of Control, the Holder shall be entitled to receive its Cash-Out Amount. As a condition
precedent to receive any shares of the Company’s common stock or consideration payable upon such shares of common stock deemed
to have been converted pursuant to this Section 5, if requested by the Company, the Holder shall execute and deliver a release
in favor of the Company and its affiliates covering the Holder’s status as a lender to and/or stockholder in the Company, in a
form materially similar to the general release provided by the holders of the Company’s equity securities in connection with such
Change of Control, and the Holder hereby agrees to execute and deliver to the Company such other agreements reasonably requested by the
Company and the Required Purchasers. As used herein, a “Change of Control” means: (i) a Deemed Liquidation
Event (as defined in the Company’s Certificate of Incorporation as in effect on the initial issuance date of this Note) or (ii)
the closing of the Company’s first firm commitment underwritten initial public offering of its common stock pursuant to a registration
statement filed under the Act; provided, that a Qualified Financing or the Business Combination shall not constitute a Change of Control
hereunder. As used herein, “Cash-Out Amount” means an amount equal to (i) two (2) times the then outstanding
principal amount under this Note, plus (ii) all then accrued but unpaid interest under this Note. As used herein, “CoC Price”
means an amount obtained by dividing (x) $620,000,000 by (y) as of immediately prior to the conversion of this Note, the sum of (i) the
outstanding shares of the Company’s common stock and (ii) the shares of the Company’s common stock directly or indirectly
issuable upon conversion or exchange of all outstanding securities directly or indirectly convertible into or exchangeable for the Company’s
common stock (including the Company’s preferred stock) and the exercise of all outstanding options and warrants, but specifically
excluding (a) the Notes and the securities directly or indirectly issuable upon conversion or exchange of the Notes, (b) other
outstanding convertible promissory notes, SAFEs, or other convertible indebtedness, and the securities directly or indirectly issuable
upon conversion or exchange thereof, and (c) shares of the Company’s common stock reserved and not issued or subject of outstanding
awards under any equity incentive or similar plan of the Company. The Holder shall be entitled to customary registration rights with
respect to the any securities of an issuer that is subject to reporting pursuant to Section 13 or Section 15(d) of the Securities Exchange
Act of 1934, as amended, that are issued as consideration to the Holder in the CoC Conversion.
6. Covenants.
(a) The
Company shall designate all payments due under this Note as senior unsecured Indebtedness, and the Notes shall rank pari passu with each
other and (b) shall be at least pari passu in right of payment with all other Indebtedness of the Company and its Subsidiaries.
(b) To
the extent that it may lawfully do so, the Company (A) agrees that it will not at any time insist upon, plead, or in any manner whatsoever
claim or take the benefit or advantage of, any stay, extension or usury law (wherever or whenever enacted or in force) that may affect
the covenants or the performance of this Note; and (B) expressly waives all benefits or advantages of any such law and agrees that it
will not, by resort to any such law, hinder, delay or impede the execution of any power granted to the Holder by this Note, but will
suffer and permit the execution of every such power as though no such law has been enacted.
(c) While
any Notes are outstanding, the Company shall not, either directly or indirectly by amendment, merger, consolidation, recapitalization,
reclassification, or otherwise, do any of the following without (in addition to any other vote required by law or the Company’s
Organizational Documents) the written consent or affirmative vote of the Required Holders:
(i) until
the occurrence of a Termination Event, liquidate, dissolve or wind-up the business and affairs
of the Company, effect any merger or consolidation (other than the Merger contemplated by
the Business Combination Agreement) or any other Deemed Liquidation Event, or consent to
any of the foregoing;
4
(ii) amend,
alter or repeal any provision of the Company’s Organizational Documents in a manner
that adversely affects the powers, preferences or rights of the Notes;
(iii) purchase
or redeem (or permit any subsidiary to purchase or redeem) or, pay or declare any dividend
or make any distribution on, any capital stock of the Company other than pursuant to the
terms of any equity incentive plan of the Company and other than securities repurchased at
cost from former employees and consultants of the Company in connection with the cessation
of their service;
(iv) until
the occurrence of a Termination Event, enter into, or enter into a material variation of,
any agreement or transaction with any Related Person; provided however that that no approval
shall be required for issuance of Company Options, restricted stock units or other similar
equity-linked awards to employees or other eligible persons under the Company Equity Incentive
Plan or any future incentive plan, equity plan or equity-based compensation plan or other
similar arrangements established by the Company, regardless of whether they are otherwise
a Related Person;
(v) create,
or authorize the creation of or issue, or authorize the issuance of any Indebtedness, or
permit any subsidiary to take any such action with respect to any Indebtedness, other than
equipment leases or trade payables incurred in the ordinary course, provided that, from and
after the occurrence of a Termination Event, the restriction in this Section 7(c)(v)
shall not apply to Indebtedness that both (A) ranks junior to the Notes and (B) does not
require or permit redemption, defeasement, repurchase, repayment or other payment prior to
the repayment of the Notes; or
(vi) redeem,
defease, repurchase, repay or make any payments in respect of, by the payment of cash or
cash equivalents (in whole or in part, whether by way of open market purchases, tender offers,
private transactions or otherwise), all or any portion of any Indebtedness (other than the
Notes) whether by way of payment in respect of principal of (or premium, if any) or interest
on, such Indebtedness, if at the time such payment with respect to such Indebtedness is due
or is otherwise made or, after giving effect to such payment, (i) an event constituting an
Event of Default has occurred and is continuing or (ii) an event that with the passage of
time and without being cured would constitute an Event of Default has occurred and is continuing.
7. Rights
Upon Event of Default.
(a) Upon
the occurrence and during the continuance of an Event of Default, all amounts outstanding and unpaid under this Note, including any then
unpaid and accrued interest, shall become due and payable without any notice, declaration, or other act on the part of the Holder, and
the Holder may exercise any or all of its rights, powers, or remedies under applicable law. If any amount payable hereunder is not paid
when due (without regard to any applicable grace periods), whether at stated maturity, by acceleration, or otherwise, such overdue amount
shall bear interest at a rate equal to the Interest Rate plus 2.00% from the date of such non-payment until such amount is paid in full.
(b) As
used herein, an “Event of Default” shall mean the occurrence of any one of the following events, which, in
the case of clause (A) below, is not promptly cured by the Company following thirty (30) days written notice thereof, unless the Holder
has waived such Event of Default by delivery of written notice of such waiver to the Company: (A) a breach of any representation, warranty,
covenant or agreement of the Company contained in the Purchase Agreement or this Note; (B) failure to pay any amount of principal or
interest due hereunder when due (including by conversion in connection with a Business Combination, Qualified Financing or Change of
Control) and such failure continues for five (5) days after written notice thereof; (C) entry of a decree or order by a court having
jurisdiction adjudging the Company bankrupt or insolvent, or approving a petition seeking reorganization, arrangement, adjustment or
composition of or in respect of the Company, under federal bankruptcy law, as now or hereafter constituted, or any other applicable federal
or state bankruptcy, insolvency or other similar law, and the continuance of any such decree or order unstayed and in effect for a period
of sixty (60) days; (D) the commencement by the Company of a voluntary case under federal bankruptcy law, as now or hereafter constituted,
or any other applicable federal or state bankruptcy, insolvency, or other similar law, or the consent by the Company to the institution
of bankruptcy or insolvency proceedings against it, or the filing by the Company of a petition or answer or consent seeking reorganization
or relief under federal bankruptcy law or any other applicable federal or state law, or the consent by the Company to the filing of such
petition or to the appointment of a receiver, liquidator, assignee, trustee, sequestrator or similar official of the Company or of any
substantial part of the property of the Company, or the making by the Company of an assignment for the benefit of creditors, or the admission
by the Company in writing of its inability to pay its debts generally as they become due, or the discontinuance of the business, dissolution,
winding up, liquidation or cessation of the existence by or of the Company, or the taking of corporate action by the Company in furtherance
of any such action; (E) the adoption by the Company’s Board or stockholders of any a resolution for the liquidation, dissolution
or winding up of the Company; or (F) the Borrower fails to pay when due any of its Indebtedness (as defined in the Purchase Agreement,
other than Indebtedness arising under this Note), or any interest or premium thereon, when due and such failure continues after the applicable
grace period, if any, specified in the agreement or instrument relating to such Indebtedness.
5
8. General.
(a) Successors
and Assigns. This Note, and the obligations and rights of the Company hereunder, shall be binding upon and inure to the benefit of
the Company, the Holder, and their respective heirs, successors and assigns.
(b) Recourse.
Recourse under this Note shall be to the general unsecured assets of the Company only, and in no event to the officers or directors of
the Company.
(c) Amendment;
Waiver; Notice. The Notes, including this Note, may be amended with the written consent of the Required Holders, provided, however,
and notwithstanding anything in the Notes to the contrary, no provision of the Notes, including this Note, shall be amended to the extent
any such amendment would (i) disproportionately, materially and adversely modify any rights of any Note holder (as compared to the rights
of the other holders of Notes) or (ii) impose any additional financial obligations or liabilities on a Note holder, in each case, unless
any such holder of a Note shall have previously consented in writing to such amendment or voted to approve such amendment at a meeting.
No consideration shall be offered or paid to any holder of a Note to amend or consent to a waiver or modification of any provision of
the Notes unless the same consideration is also offered to all of the holders of the Notes. For clarification purposes, this provision
constitutes a separate right granted to each holder of Notes by the Company and negotiated separately by each holder of Notes, and is
intended for the Company to treat the holders of Notes as a group and shall not in any way be construed as the holders of Notes acting
in concert or as a group with respect to the purchase, disposition or voting of securities or otherwise. No waiver by the Company or
the Holder of any of the provisions hereof shall be effective unless explicitly set forth in writing and signed by the party so waiving.
No waiver by any party shall operate or be construed as a waiver in respect of any failure, breach, or default not expressly identified
by such written waiver, whether of a similar or different character, and whether occurring before or after that waiver. No failure to
exercise, or delay in exercising, any rights, remedy, power, or privilege arising from this Note shall operate or be construed as a waiver
thereof; nor shall any single or partial exercise of any right, remedy, power, or privilege hereunder preclude any other or further exercise
thereof or the exercise of any other right, remedy, power, or privilege.
(d) Notice.
All notices, requests, consents, claims, demands, waivers, and other communications hereunder shall be in writing and shall be deemed
to have been given: (a) when delivered by hand (with written confirmation of receipt); (b) when received by the addressee if sent by
a nationally recognized overnight courier (receipt requested); (c) on the date sent by email of a PDF document (with evidence or confirmation
of transmission) if sent during normal business hours of the recipient, and on the next Business Day if sent after normal business hours
of the recipient; or (d) on the third day after the date mailed, by certified or registered mail, return receipt requested, postage prepaid.
Such communications must be sent to the respective parties at the addresses indicated below (or at such other address for a party as
shall be specified in a notice given in accordance with this Section 12). Actual notice is effective as notice in all instances.
If to the Company:
Elroy Air, Inc.
550 Eagle Ct, #440
Byron, CA 94514
Email: andrew@elroyair.com
Attention: Andrew Clare
with a copy (which will not constitute notice) to:
DLA Piper LLP (US)
3203 Hanover St Suite 100
Palo Alto,
CA 94304
Email: josh.seidenfeld@us.dlapiper.com
Attention: Josh Seidenfeld, Esq.
If to the Holder:
[HOLDER ADDRESS]
Email: [EMAIL ADDRESS]
Attention: [TITLE OF OFFICER]
with a copy (which will not constitute notice to:
[HOLDER LAW FIRM]
Email: [EMAIL ADDRESS]
Attention: [ATTORNEY NAME]
6
(e) MFN
Amendment. If the Company issues any Subsequent Convertible Securities prior to the repayment or conversion of this Note, the Company
will provide the Holder with written notice of the issuance of such Subsequent Convertible Securities, together with a copy of all primary
transaction documents relating to such Subsequent Convertible Securities, within ten days following the first issuance of the Subsequent
Convertible Securities (the “MFN Notice”). In the event the Holder determines that the terms of the Subsequent
Convertible Securities are preferable to the terms of this Note, the Holder will notify the Company in writing within ten days of the
delivery of the MFN Notice to the Holder by the Company (the “MFN Election”). Within ten days after receipt
of the MFN Election from the Holder, the Company and the Holder agree to amend and/or restate this Note to include any such more favorable
terms. As used herein, “Subsequent Convertible Securities” means convertible securities that the Company may
issue after the issuance of this Note with the principal purpose of raising capital, including but not limited to, simple agreements
for future equity, other convertible debt instruments, and other convertible securities; provided, that “Subsequent Convertible
Securities” excludes (i) the other Notes and (ii) Exempt Issuances.
(f) Transfer.
The terms and conditions of this Note shall inure to the benefit of and be binding upon the respective successors and assigns of the
Company and the Holder. Notwithstanding the foregoing, the Holder may not assign, pledge, or otherwise transfer this Note without the
prior written consent of the Company; provided, however, that if Holder is a partnership, corporation, trust, joint venture,
unincorporated organization or other entity it may transfer its rights under this Agreement to an affiliate (including any other entity
wholly owned and/or controlled by the Holder’s ultimate beneficial owner or any of such person’s immediate family members)
or to its members, stockholders, partners and/or equityholders without the prior written consent of the Company. Subject to the transfer
conditions referred to in the legend endorsed hereon, this Note and all rights hereunder shall be transferable, in whole or in part,
by the Holder without charge to the Holder, upon surrender of this Note to the Company at its then principal executive offices for registration
of transfer, duly endorsed, or accompanied by a duly executed written instrument of transfer in form satisfactory to the Company. Thereupon,
a new note for the same principal amount and interest will be issued to, and registered in the name of, the transferee. Interest and
principal are payable only to the registered Holder of this Note.
(g) Rights
Reserved. No provisions of this Note and, except for the rights of an unsecured creditor, no right or option granted or conferred
herein shall in any way limit, affect or abridge the exercise by the Company of any of its corporate rights or powers, including without
limitation, its corporate right and power to issue securities, recapitalize, amend its certificate of incorporation or bylaws, reorganize,
consolidate or merge with or into another entity, or transfer or encumber all or any part of its property or assets.
(h) Reservation
of Shares. The Company shall cause to be authorized a sufficient amount of capital stock to effect the conversion of this Note, and
all Notes, as provided herein.
(i) No
Rights as Noteholder Following Conversion. Upon the conversion or repayment of this Note, this Note shall no longer be deemed to
be outstanding and all rights with respect to this Note shall immediately cease and terminate except only the right of the Holder to
receive, as applicable, (i) the shares of capital stock to which he, she or it is entitled as a result of the conversion occurring on
such date, (ii) the entire unpaid principal amount of this Note, together with interest as provided for herein, or (iii) the payment
upon a Change of Control set forth in Section 5.
(j) Governing
Law. This Note and all actions arising out of or in connection with this Note shall be governed by and construed in accordance with
the laws of the State of Delaware, without regard to its internal rules governing the conflict of laws.
7
(k) Dispute
Resolution; Waiver of Jury Trial. The parties (a) hereby irrevocably and unconditionally submit to the jurisdiction of the state
courts of Delaware and to the jurisdiction of the United States District Court for the District of Delaware for the purpose of any suit,
action or other proceeding arising out of or based upon this Note, (b) agree not to commence any suit, action or other proceeding arising
out of or based upon this Note except in the state courts of Delaware or the United States District Court for the District of Delaware
and (c) hereby waive, and agree not to assert, by way of motion, as a defense, or otherwise, in any such suit, action or proceeding,
any claim that it is not subject personally to the jurisdiction of the above-named courts, that its property is exempt or immune from
attachment or execution, that the suit, action or proceeding is brought in an inconvenient forum, that the venue of the suit, action
or proceeding is improper or that this Note or the subject matter hereof may not be enforced in or by such court. EACH PARTY HEREBY WAIVES
ITS RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF THIS NOTE OR THE SUBJECT MATTER HEREOF. THE SCOPE
OF THIS WAIVER IS INTENDED TO BE ALL-ENCOMPASSING OF ANY AND ALL DISPUTES THAT MAY BE FILED IN ANY COURT AND THAT RELATE TO THE SUBJECT
MATTER OF THIS TRANSACTION, INCLUDING, WITHOUT LIMITATION, CONTRACT CLAIMS, TORT CLAIMS (INCLUDING NEGLIGENCE), BREACH OF DUTY CLAIMS,
AND ALL OTHER COMMON LAW AND STATUTORY CLAIMS. THIS SECTION HAS BEEN FULLY DISCUSSED BY EACH OF THE PARTIES HERETO AND THESE PROVISIONS
WILL NOT BE SUBJECT TO ANY EXCEPTIONS. EACH PARTY HERETO HEREBY FURTHER WARRANTS AND REPRESENTS THAT SUCH PARTY HAS REVIEWED THIS WAIVER
WITH ITS LEGAL COUNSEL, AND THAT SUCH PARTY KNOWINGLY AND VOLUNTARILY WAIVES ITS JURY TRIAL RIGHTS FOLLOWING CONSULTATION WITH LEGAL
COUNSEL.
(l) Severability.
If one or more provisions of this Note are held to be unenforceable under applicable law, such provision(s) shall be excluded from
this Note and the balance of the Note shall be interpreted as if such provision(s) were so excluded and shall be enforceable in
accordance with its terms.
(m) Counterparts.
This Note may be executed in two or more counterparts, each of which shall be deemed an original, but all of which together shall constitute
one and the same instrument. Counterparts may be delivered via facsimile, electronic mail (including pdf) or other transmission method
complying with the U.S. federal ESIGN Act of 2000 (e.g., www.docusign.com), and any counterpart so delivered shall be deemed to
have been duly and validly delivered and be valid and effective for all purposes.
9. Definitions.
As used in this Note, the following terms have the respective meanings set forth below:
“Board”
means the board of directors of the Company.
“Business
Day” means a day other than a Saturday, Sunday or other day on which commercial banks in the City of New York are authorized
or required to close.
“Certificate
of Incorporation” means the amended and restated certificate of incorporation of the Company, as such certificate may be
corrected, amended, or restated.
“Exempt
Issuance” means the issuance or deemed issuance of shares of Common Stock specified in clauses (i)-(iv) of the definition
of Additional Shares of Common Stock in the Company’s Certificate of Incorporation.
“Inflection
Point” means Inflection Point Asset Management LLC and/or one or more of its Affiliates.
“Required
Holders” means the holders of a majority in interest (based on aggregate principal plus accrued and unpaid interest) of
the Notes then outstanding, which majority must include Inflection Point if Inflection Point then holds any Notes.
(Remainder
of Page Intentionally Left Blank; Signature Pages Follow)
8
IN
WITNESS WHEREOF, this Note has been executed and delivered as a sealed instrument on the date first above written by the duly authorized
representatives of the parties.
COMPANY:
ELROY AIR, INC.
By:
Name:
Andrew Clare
Title:
Chief Executive Officer
9
Accepted
and Acknowledged:
HOLDER:
Entity
Name: ____________________________
By:
___________________________________
Name:
_________________________________
Title:
__________________________________
10
EXHIBIT
A
FORM
OF CERTIFICATE OF DESIGNATON
11
EX-99.4 — FORM OF ELROY AIR PRE-FUNDED CONVERTIBLE NOTE INVESTOR WARRANT (INSTITUTIONAL INVESTORS)
EX-99.4
Filename: ea029643801ex99-4.htm · Sequence: 14
Exhibit 99.4
THIS WARRANT AND THE SECURITIES ISSUABLE UPON
EXERCISE OF THIS WARRANT HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”), OR QUALIFIED
UNDER ANY STATE OR FOREIGN SECURITIES LAWS AND MAY NOT BE OFFERED FOR SALE, SOLD, PLEDGED, HYPOTHECATED, OR OTHERWISE TRANSFERRED OR ASSIGNED
UNLESS (I) A REGISTRATION STATEMENT COVERING SUCH SECURITIES IS EFFECTIVE UNDER THE ACT AND IS QUALIFIED UNDER APPLICABLE STATE AND FOREIGN
LAW OR (II) THE TRANSACTION IS EXEMPT FROM THE REGISTRATION AND PROSPECTUS DELIVERY REQUIREMENTS UNDER THE ACT AND THE QUALIFICATION REQUIREMENTS
UNDER APPLICABLE STATE AND FOREIGN LAW AND, IF THE COMPANY REQUESTS, AN OPINION SATISFACTORY TO THE CORPORATION TO SUCH EFFECT HAS BEEN
RENDERED BY COUNSEL.
COMMON STOCK PURCHASE WARRANT
Original Issue Date: June [●], 2026 Initial
Exercise Date: as set forth in Section 2
Number of Warrant Shares: [●]
FOR VALUE RECEIVED, Elory
Air, Inc., a Delaware corporation (the “Company”), hereby certifies that [NAME OF HOLDER], a [JURISDICTION]
[TYPE OF ENTITY], or its registered assigns (the “Holder”) is entitled to purchase from the Company [●]
duly authorized and validly issued shares (the “Warrant Shares”) of common stock, par value $0.0001 per share,
of the Company (the “Common Stock”) at a purchase price per share of $12.00 (subject to adjustment as provided
herein, the “Exercise Price”), all subject to the terms, conditions, and adjustments set forth below in this
Warrant. Certain capitalized terms used herein are defined in Section 1 hereof.
This Warrant has been issued
pursuant to the terms of the Securities Purchase Agreement, dated as of June [●], 2026 (the “Purchase Agreement”),
between the Company and the Holder.
This Warrant is one of a series
of warrants with substantially the same terms as this Warrant with an initial exercise price of $12.00 per share issued pursuant to securities
purchase agreements with substantially the same terms as the Purchase Agreement (such series of warrants, the “Related Warrants”).
1. Definitions.
As used in this Warrant, the following terms have the respective meanings set forth below:
“Aggregate Exercise
Price” means an amount equal to the product of (a) the number of Warrant Shares in respect of which this Warrant is then
being exercised pursuant to Section 3 hereof, multiplied by (b) the Exercise Price in effect as of the Exercise Date in
accordance with the terms of this Warrant.
“Board”
means the board of directors of the Company.
“Business Combination”
means the transactions contemplated by the Business Combination Agreement.
“Business Combination
Agreement” means that certain business combination agreement, dated as of June [●], 2026, by and among Columbus Circle
Capital Corp. II, a Cayman Islands exempted company (prior to the closing of the Business Combination, “SPAC,”
and following the closing of the Business Combination “PubCo”), IPHX Merger Sub, Inc. and the Company.
“Business Day”
means a day other than a Saturday, Sunday or other day on which commercial banks in the City of New York are authorized or required to
close.
“Common Stock”
has the meaning set forth in the preamble.
“Common Stock Equivalents”
means any securities of the Company which would entitle the holder thereof to acquire at any time Common Stock, including, without limitation,
any debt, preferred stock, right, option, warrant or other instrument that is at any time convertible into or exercisable or exchangeable
for, or otherwise entitles the holder thereof to receive, Common Stock, and any securities of the Company that when paired with one or
more other securities of the Company or another entity entitles the holder thereof to receive, Common Stock.
“Company”
has the meaning set forth in the preamble.
“Convertible Securities”
means any stock or securities (other than Options) directly or indirectly convertible into or exercisable or exchangeable for, or which
otherwise entitles the holder thereof to acquire, any shares of Common Stock and any securities of the Company that when paired with one
or more other securities of the Company or another entity entitles the holder thereof to receive, Common Stock.
“Certificate of
Incorporation” means the amended and restated certificate of incorporation of the Company, as such certificate may be corrected,
amended, or restated.
“Exempt Issuance”
means the issuance or deemed issuance of shares of Common Stock specified in clauses (i)-(iv) of the definition of Additional Shares of
Common Stock in the Company’s Certificate of Incorporation.
“Exercise Date”
means, for any given exercise of this Warrant, the date on which the conditions to such exercise as set forth in Section 3 shall
have been satisfied at or prior to 5:00 p.m., New York, New York time, on a Business Day, including, without limitation, the receipt by
the Company of the Exercise Agreement, the Warrant, and the Aggregate Exercise Price.
“Exercise Agreement”
has the meaning set forth in Section 3(a)(i).
“Exercise Period”
has the meaning set forth in Section 2.
“Exercise Price”
has the meaning set forth in the preamble.
“Fair Market Value”
means, as of any particular date, the fair market value as determined by the Board in its good faith.
“Inflection Point”
means Inflection Point Asset Management LLC and/or one or more of its Affiliates.
“Options”
means any rights, warrants or options to subscribe for or purchase shares of Common Stock or Convertible Securities.
2
“Option Value”
means the value of an Option based on the Black-Scholes model reflecting (i) a risk-free interest rate corresponding to the U.S. Treasury
rate for a period equal to the remaining term of the applicable Option as of the applicable date of determination, (ii) an expected volatility
equal to 50%, (iii) the underlying price per share used in such calculation shall be equal to the highest price per share at which the
Company has sold (or has been deemed to have sold) shares of Common Stock, (iv) a zero cost of borrow and (v) a 360 day annualization
factor , provided, however, in case any Option is issued in connection with the issue or sale of other securities
of the Company, together comprising one integrated transaction, in no event shall the Option Value exceed a fraction of the aggregate
consideration received (excluding the minimum aggregate amount of additional consideration (as set forth in the instruments relating thereto,
without regard to any provision contained therein for a subsequent adjustment of such consideration) payable to the Company upon the exercise
of such Options, or in the case of Options for Convertible Securities, the exercise of such Options for Convertible Securities and the
conversion or exchange of such Convertible Securities) equal to (1) the number of shares of Common Stock underlying such Option divided
by (2) the total number of shares of Common Stock issued or issuable in the integrated transaction (including the number of shares underlying
such Option).
“Required Holders”
means the holders of a majority in interest (based on remaining aggregate Warrant Shares) of the Related Warrants then outstanding, which
majority must include Inflection Point to the extent it then holds any Related Warrants.
“VWAP”
means, for any date and any security, the price determined by the first of the following clauses that applies: (a) if the security is
then listed or quoted on a Trading Market, the arithmetic mean of the daily volume weighted average prices of the security for each of
the 20 Trading Days preceding such date (or the nearest preceding date) on the Trading Market on which the security is then listed or
quoted as reported by Bloomberg (based on a Trading Day from 9:30 a.m. (New York City time) to 4:02 p.m. (New York City time)), with each
such Trading Day weighted equally regardless of the aggregate trading volume for such Trading Day, (b) if OTCQB or OTCQX is not a Trading
Market, the arithmetic mean of the daily volume weighted average prices of the security for each of the 20 Trading Days preceding such
date (or the nearest preceding date) on OTCQB, OTCQX or OTCID as applicable, calculated in the same manner as clause (a), (c) if the security
is not then listed or quoted for trading on OTCQB or OTCQX and if prices for the security are then reported in The Pink Open Market (or
a similar organization or agency succeeding to its functions of reporting prices), the average of the highest closing bid price and the
lowest closing ask price of the security for the 20 Trading Days preceding such date, or (d) in all other cases, the fair market value
of the security as determined by an independent appraiser selected in good faith by the Required Holders and reasonably acceptable to
the Company, the fees and expenses of which shall be paid by the Company. For the avoidance of doubt, the daily volume weighted average
price for each individual Trading Day shall be determined by Bloomberg in accordance with its standard methodology, and the VWAP for the
applicable period shall be calculated by summing such daily values and dividing by the number of Trading Days in the measurement period
(i.e., 20 Trading Days), such that each Trading Day’s price is given equal weight irrespective of trading volume.
2. Term
of Warrant. If the Business Combination Agreement has been terminated in accordance with its terms, then, subject to
the terms and conditions hereof, at any time or from time to time after the date of such termination (the “Initial Exercise
Date”) and prior to 5:00 p.m., New York, New York time, on the fifth (5th) anniversary of the date of the termination of
the Business Combination Agreement or, if such day is not a Business Day, on the next preceding Business Day (the “Exercise
Period”), the Holder of this Warrant may exercise this Warrant for all or any part of the Warrant Shares purchasable hereunder
(subject to adjustment as provided herein).
3. Exercise
of Warrant.
(a) Exercise
Procedure. This Warrant may be exercised from time to time on any Business Day during the Exercise Period, for all or any part
of the unexercised Warrant Shares, upon:
(i) surrender
of this Warrant to the Company at its then principal executive offices (or an indemnification undertaking with respect to this Warrant
in the case of its loss, theft, or destruction), together with an Exercise Agreement in the form attached hereto as Exhibit A (each,
an “Exercise Agreement”), duly completed (including specifying the number of Warrant Shares to be purchased)
and executed; and
(ii) payment
to the Company of the Aggregate Exercise Price in accordance with Section 3(b).
3
(b) Payment
of the Aggregate Exercise Price. Payment of the Aggregate Exercise Price shall be made, at the option of the Holder as expressed
in the Exercise Agreement, by the following methods:
(i) by
delivery to the Company of a certified or official bank check payable to the order of the Company or by wire transfer of immediately available
funds to an account designated in writing by the Company, in the amount of such Aggregate Exercise Price; or
(ii) by
instructing the Company to withhold a number of Warrant Shares then issuable upon exercise of this Warrant with an aggregate Fair Market
Value as of the Exercise Date equal to such Aggregate Exercise Price.
In the event of any withholding
of Warrant Shares pursuant to clause (ii) above where the number of shares of Common Stock whose value is equal to the Aggregate Exercise
Price is not a whole number, the number of shares of Common Stock withheld by or surrendered to the Company shall be rounded down to the
nearest whole shares of Common Stock.
(c) Record
Keeping of Exercise of Warrant. Upon receipt by the Company of the Exercise Agreement, surrender of this Warrant, and payment
of the Aggregate Exercise Price (in accordance with Section 3(a) hereof), the Company shall, as promptly as practicable, and in
any event within 5 Business Days thereafter, deliver (or cause to be delivered) a stock certificate for such Warrant Shares (or a book-entry
statement evidencing the Holder’s ownership of such Warrant Shares) and cash in lieu of any fraction of a share, as provided in
Section 3(d) hereof.
(d) Fractional
Share. The Company shall not be required to issue a fractional Warrant Share upon exercise of any Warrant. As to any fraction
of a Warrant Share that the Holder would otherwise be entitled to purchase upon such exercise, the Company shall pay to such Holder an
amount in cash (by delivery of a certified or official bank check or by wire transfer of immediately available funds) equal to the product
of (i) such fraction multiplied by (ii) the Fair Market Value of one Warrant Share on the Exercise Date.
(e) Delivery
of New Warrant. Unless the purchase rights represented by this Warrant shall have expired or shall have been fully exercised,
the Company shall, at the time of delivery of the certificate or certificates representing the Warrant Shares being issued in accordance
with Section 3(c) hereof, deliver to the Holder a new Warrant evidencing the rights of the Holder to purchase the unexpired and
unexercised Warrant Shares called for by this Warrant. Such new Warrant shall in all other respects be identical to this Warrant.
(f) Valid
Issuance of Warrant and Warrant Shares. With respect to the exercise of this Warrant, the Company hereby represents, covenants,
and agrees that:
(i) this
Warrant is, and any Warrant issued in substitution for or replacement of this Warrant shall be, upon issuance, duly authorized and validly
issued;
4
(ii) all
Warrant Shares issuable upon the exercise of this Warrant pursuant to the terms hereof shall be, upon issuance, and the Company shall
take all such actions as may be necessary or reasonably appropriate in order that such Warrant Shares are, duly authorized, validly issued,
and non-assessable, free and clear of all taxes, liens, and charges, and issued without violation of any preemptive or similar rights
of any member of the Company;
(iii) The
Company shall take all such actions as may be reasonably necessary to ensure that all such Warrant Shares are issued without violation
by the Company of any applicable law or governmental regulation to the extent that such applicable law or governmental regulation would
prevent the issuance of such Warrant Shares or materially and adversely impact the Company; and
(iv) The
Company shall pay all taxes and other governmental charges that may be imposed with respect to, the issuance or delivery of Warrant Shares
upon exercise of this Warrant; provided, that the Company shall not be required to pay any tax or governmental charge that may be imposed
with respect to any applicable withholding or the issuance or delivery of the Warrant Shares to any Person other than the Holder, and
no such issuance or delivery shall be made unless and until the Person requesting such issuance has paid to the Company the amount of
any such tax, or has established to the satisfaction of the Company that such tax has been paid.
(g) Conditional
Exercise. If an exercise of any portion of this Warrant is to be made in connection with a public offering or a sale of the Company
(pursuant to a merger, sale of stock, or otherwise), such exercise may at the election of the Holder be conditioned upon the consummation
of such transaction, in which case such exercise shall not be deemed to be effective until immediately prior to the consummation of such
transaction.
(h) Reservation
of Shares. During the Exercise Period, the Company shall at all times reserve and keep available out of its authorized but unissued
shares of Common Stock or other securities constituting Warrant Shares, solely for the purpose of issuance upon the exercise of this Warrant,
the maximum number of Warrant Shares issuable upon the exercise of this Warrant, and the par value per Warrant Share shall at all times
be less than or equal to the applicable Exercise Price. The Company shall not increase the par value of any Warrant Shares receivable
upon the exercise of this Warrant above the Exercise Price then in effect, and shall take all such actions as may be necessary or appropriate
in order that the Company may validly and legally issue shares of Common Stock upon the exercise of this Warrant.
4. Certain
Adjustment to Exercise Price and Number of Warrant Shares.
(a) Stock
Dividends and Splits. If the Company at any time while this Warrant is outstanding: (i) pays a stock dividend or otherwise makes
a distribution or distributions on shares of its Common Stock or any other equity or equity equivalent securities payable in shares of
Common Stock (which, for avoidance of doubt, shall not include any shares of Common Stock issued by the Company upon exercise of this
Warrant or any cash distributions), (ii) subdivides outstanding shares of Common Stock into a larger number of shares, (iii) combines
(including by way of a reverse stock split) outstanding shares of Common Stock into a smaller number of shares, or (iv) issues by reclassification
of shares of the Common Stock any shares of capital stock of the Company, then in each case the Exercise Price shall be multiplied by
a fraction of which the numerator shall be the number of shares of Common Stock (excluding treasury shares, if any) outstanding immediately
before such event and of which the denominator shall be the number of shares of Common Stock outstanding immediately after such event,
and the number of shares issuable upon exercise of this Warrant shall be proportionately adjusted such that the Aggregate Exercise Price
of this Warrant shall remain unchanged. Any adjustment made pursuant to this Section 4(a) shall become effective immediately after
the record date for the determination of stockholders entitled to receive such dividend or distribution and shall become effective immediately
after the effective date in the case of a subdivision, combination or re-classification.
5
(b) Adjustment
Upon Issuance of Common Stock. If, while this Warrant is outstanding and after the occurrence of a Termination Event, the Company
issues or sells, or in accordance with this Section 4(b) is deemed to have issued or sold, any shares of Common Stock (including
the issuance or sale of shares of Common Stock owned or held by or for the account of the Company, but excluding shares of Common Stock
deemed to have been issued or sold by the Company in connection with any Exempt Issuance) for a consideration per share (the “New
Issuance Price”) less than the Exercise Price then in effect (such price threshold, the “Applicable Price”,
and each such issue, sale or deemed issuance or sale, a “Dilutive Issuance”), in issuances and sales conducted
for the purpose of raising capital by the Company, then immediately after such Dilutive Issuance, the Exercise Price then in effect shall
be reduced to an amount equal to the New Issuance Price. For purposes of determining the adjusted Exercise Price under this Section
4(b), the following shall be applicable:
(i) Options
and Convertible Securities. The consideration per share received by the Company for Common Stock deemed to have been issued pursuant
to Section 4(b)(ii), relating to Options and Convertible Securities, shall be determined by dividing: (x) the total amount,
if any, received or receivable by the Company as consideration for the issue of such Options or Convertible Securities, plus the minimum
aggregate amount of additional consideration (as set forth in the instruments relating thereto, without regard to any provision contained
therein for a subsequent adjustment of such consideration) payable to the Company upon the exercise of such Options or the conversion
or exchange of such Convertible Securities, or in the case of Options for Convertible Securities, the exercise of such Options for Convertible
Securities and the conversion or exchange of such Convertible Securities, by (y) the maximum number of shares of Common Stock (as set
forth in the instruments relating thereto, without regard to any provision contained therein for a subsequent adjustment of such number)
deemed to be issued pursuant to Section 4(b)(ii) upon the issuance of such Options or Convertible Securities.
(ii) Deemed
Issuance of Options and Convertible Securities. If the Company at any time or from time to time shall issue any Options or Convertible
Securities or shall fix a record date for the determination of holders of any class of securities entitled to receive any such Options
or Convertible Securities, then the maximum number of shares of Common Stock (as set forth in the instrument relating thereto, assuming
the satisfaction of any conditions to exercisability, convertibility or exchangeability but without regard to any provision contained
therein for a subsequent adjustment of such number) issuable upon the exercise of such Options or, in the case of Convertible Securities
and Options therefor, the conversion or exchange of such Convertible Securities, shall be deemed to be outstanding and to have been issued
as of the time of such issue or, in case such a record date shall have been fixed, as of the close of business on such record date.
6
(iii) Change
in Option Price. If, after the Original Issue Date, the purchase price provided for in any Options, the additional consideration,
if any, payable upon the issue, conversion, exercise or exchange of any Convertible Securities, or the rate at which any Convertible Securities
are convertible into or exercisable or exchangeable for Common Stock increases or decreases at any time, (other than (x) proportional
changes in conversion or exercise prices, as applicable, in connection with an event referred to in Section 4(a) above
and (y) automatic adjustments to such terms pursuant to anti-dilution or similar provisions of such Option or Convertible Security which
are not more favorable to the holder thereof than the anti-dilution and similar provisions set forth herein), the Exercise Price in effect
at the time of such increase or decrease shall be adjusted to the Exercise Price, which would have been in effect at such time had such
Options or Convertible Securities provided for such increased or decreased purchase price, additional consideration or increased or decreased
conversion rate, as the case may be, at the time initially granted, issued or sold. For purposes of this Section 4(b)(iii),
if the terms of any Option or Convertible Security that was outstanding as of the Original Issue Date are increased or decreased in the
manner described in the immediately preceding sentence, then such Option or Convertible Security and the shares of Common Stock deemed
issuable upon exercise, conversion or exchange thereof shall be deemed to have been issued as of the date of such increase or decrease.
(iv) Calculation
of Consideration Received. In case one or more Options is issued in connection with the issue or sale of other securities of the Company,
together comprising one integrated transaction, (x) each such Option will be deemed to have been issued for the Option Value of such Option
and (y) the other securities issued or sold in such integrated transaction shall be deemed to have been issued or sold for the difference
of (I) the aggregate consideration received by the Company less any consideration paid or payable by the Company pursuant to the terms
of such other securities of the Company, less (II) the Option Value of such Option. If any shares of Common Stock, Options or Convertible
Securities are issued or sold or deemed to have been issued or sold for cash, the consideration other than cash received therefor will
be deemed to be the net amount received by the Company therefor. If any shares of Common Stock, Options or Convertible Securities are
issued or sold for a consideration other than cash, the amount of such consideration received by the Company will be the fair value of
such consideration, except where such consideration consists of publicly traded securities, in which case the amount of consideration
received by the Company will be the VWAP of such publicly traded securities on the date of receipt. If any shares of Common Stock, Options
or Convertible Securities are issued to the owners of the non-surviving entity in connection with any merger in which the Company is the
surviving entity, the amount of consideration therefor will be deemed to be the fair value of such portion of the net assets and business
of the non-surviving entity as is attributable to such shares of Common Stock, Options or Convertible Securities, as the case may be.
The fair value of any consideration other than cash or publicly traded securities will be determined jointly by the Company and Required
Holders. If such parties are unable to reach agreement within ten (10) days after the occurrence of an event requiring valuation (the
“Valuation Event”), the fair value of such consideration will be determined within five (5) Business Days after
the tenth (10th) day following the Valuation Event by an independent, reputable appraiser jointly selected by the Company and the Required
Holders. The determination of such appraiser shall be final and binding upon all parties absent manifest error and the fees and expenses
of such appraiser shall be borne by the Company.
(v) Record
Date. If the Company takes a record of the holders of shares of Common Stock for the purpose of entitling them (A) to receive a dividend
or other distribution payable in shares of Common Stock, Options or in Convertible Securities or (B) to subscribe for or purchase shares
of Common Stock, Options or Convertible Securities, then such record date will be deemed to be the date of the issuance or sale of the
shares of Common Stock deemed to have been issued or sold upon the declaration of such dividend or the making of such other distribution
or the date of the granting of such right of subscription or purchase, as the case may be.
7
(c) Subsequent
Rights Offerings. In addition to any adjustments pursuant to Section 4(a) above, if at any time after the Original Issue Date
the Company grants, issues or sells any Common Stock Equivalents or rights to purchase stock, warrants, securities or other property pro
rata to the record holders of any class of shares of Common Stock (the “Purchase Rights”), then the Holder will
be entitled to acquire, upon the terms applicable to such Purchase Rights, the aggregate Purchase Rights which the Holder could have acquired
if the Holder had held the number of shares of Common Stock acquirable upon complete exercise of this Warrant immediately before the date
on which a record is taken for the grant, issuance or sale of such Purchase Rights, or, if no such record is taken, the date as of which
the record holders of shares of Common Stock are to be determined for the grant, issue or sale of such Purchase Rights. To the extent
that the issue price of such Purchase Rights would result in an adjustment of the Exercise Price pursuant to Section 4(b), such
adjustment shall not occur to the extent the Holders were granted the right to acquire such Purchase Rights on the applicable terms.
(d) Pro
Rata Distributions. In addition to any adjustments pursuant to Section 4(a) above, if at any time after the Original Issue
Date the Company shall declare or make any dividend or other distribution of its assets (or rights to acquire its assets) to holders of
shares of Common Stock, by way of return of capital or otherwise (including, without limitation, any distribution of cash, stock or other
securities, property or options by way of a dividend, spin off, reclassification, corporate rearrangement, scheme of arrangement or other
similar transaction) (a “Distribution”), at any time after the issuance of this Warrant, then, in each such
case, the Holder shall be entitled to participate in such Distribution to the same extent that the Holder would have participated therein
if the Holder had held the number of shares of Common Stock acquirable upon complete exercise of this Warrant immediately before the date
of which a record is taken for such Distribution, or, if no such record is taken, the date as of which the record holders of shares of
Common Stock are to be determined for the participation in such Distribution.
(e) Business
Combination. Upon the closing of the Business Combination, without any action on the part of the Holder, the Company or any other
party to the Business Combination Agreement, this Warrant shall convert into a warrant of PubCo, in substantially the form attached hereto
as Exhibit B, to purchase a number of shares of common stock of PubCo equal to the [Aggregate Exercise Price divided by twelve
(12)].
(f) Fundamental
Transaction. If the Business Combination Agreement has been terminated without the Business Combination having closed, and following
such termination the Company closes a Change of Control, then, at the effective time of the Change of Control, the Holder shall be entitled
to receive, in cash, the Option Value of this Warrant (the “CoC Price”). This Warrant shall terminate immediately
upon a Change of Control, subject to Holder’s receipt of the CoC Price. As used herein, a “Change of Control”
means: (i) a Deemed Liquidation Event (as defined in the Company’s Certificate of Incorporation as in effect on the initial issuance
date of this Warrant) or (ii) the closing of the Company’s first firm commitment underwritten initial public offering of its common
stock pursuant to a registration statement filed under the Act; provided, that the Business Combination shall not constitute a Change
of Control hereunder.
(g) Calculations.
All calculations under this Section 4 shall be made to the nearest cent or the nearest 1/100th of a share, as the case may be.
For purposes of this Section 4, the number of shares of Common Stock deemed to be issued and outstanding as of a given date shall
be the sum of the number of shares of Common Stock (excluding treasury shares, if any) issued and outstanding.
(h) Number
of Warrant Shares. Simultaneously with any adjustment to the Exercise Price pursuant to this Section 4, the number of Warrant
Shares that may be purchased upon exercise of this Warrant shall be increased or decreased proportionately so that after such adjustment
the aggregate Exercise Price payable hereunder for the adjusted number of Warrant Shares shall be the same as the aggregate Exercise Price
in effect immediately prior to such adjustment (without regard to any limitations on exercise contained herein).
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(i) Notice
to Holder.
(i) Adjustment
to Exercise Price. Whenever the Exercise Price is adjusted pursuant to any provision of this Section 4, the Company shall promptly
deliver to the Holder by facsimile or email a notice setting forth the Exercise Price after such adjustment and any resulting adjustment
to the number of Warrant Shares and setting forth a brief statement of the facts requiring such adjustment.
(ii) Notice
to Allow Exercise by Holder. If (A) the Company shall declare a dividend (or any other distribution in whatever form) on the Common
Stock, (B) the Company shall declare a special nonrecurring cash dividend on or a redemption of the Common Stock, (C) the Company shall
authorize the granting to all holders of the Common Stock rights or warrants to subscribe for or purchase any shares of capital stock
of any class or of any rights, (D) the approval of any stockholders of the Company shall be required in connection with any reclassification
of the Common Stock, any consolidation or merger to which the Company (or any of its subsidiaries) is a party, any sale or transfer of
all or substantially all of its assets, or any compulsory share exchange whereby the Common Stock is converted into other securities,
cash or property, or (E) the Company shall authorize the voluntary or involuntary dissolution, liquidation or winding up of the affairs
of the Company, then, in each case, the Company shall cause to be delivered by facsimile or email to the Holder at its last facsimile
number or email address as it shall appear upon the records of the Company, at least 20 calendar days prior to the applicable record or
effective date hereinafter specified, a notice stating (x) the date on which a record is to be taken for the purpose of such dividend,
distribution, redemption, rights or warrants, or if a record is not to be taken, the date as of which the holders of the Common Stock
of record to be entitled to such dividend, distributions, redemption, rights or warrants are to be determined or (y) the date on which
such reclassification, consolidation, merger, sale, transfer or share exchange is expected to become effective or close, and the date
as of which it is expected that holders of the Common Stock of record shall be entitled to exchange their shares of the Common Stock for
securities, cash or other property deliverable upon such reclassification, consolidation, merger, sale, transfer or share exchange; provided,
that, the failure to deliver such notice or any defect therein or in the delivery thereof shall not affect the validity of the corporate
action required to be specified in such notice. The Holder shall remain entitled to exercise this Warrant during the period commencing
on the date of such notice to the effective date of the event triggering such notice except as may otherwise be expressly set forth herein.
5. Stockholder
Agreements. The Warrant Shares issuable upon exercise of this Warrant are and shall be subject to, and have the benefit of,
that certain Amended and Restated Right of First Refusal and Co-Sale Agreement dated as of October 31, 2024, that certain Amended and
Restated Investors’ Rights Agreement dated as of October 31, 2024 and that certain Amended and Restated Voting Agreement dated
as of October 31, 2024 (and each as amended, and as may be further amended or restated from time to time, collectively, the “Stockholder
Agreements”) and the Holder shall be required, for so long as the Holder holds any Warrant Shares, to become and remain
a party to the Stockholder Agreements.
9
6. Transfer
of Warrant. The terms and conditions of this Warrant shall inure to the benefit of and be binding upon the respective
successors and assigns of the Company and the Holder. Notwithstanding the foregoing, the Holder may not assign, pledge, or otherwise
transfer this Warrant without the prior written consent of the Company; provided, however, that if Holder is a partnership,
corporation, trust, joint venture, unincorporated organization or other entity it may transfer its rights under this Warrant to an affiliate
(including any other entity wholly owned and/or controlled by the Holder’s ultimate beneficial owner or any of such person’s
immediate family members) or to its members, stockholders, partners and/or equityholders without the prior written consent of the Company.
Subject to the transfer conditions referred to in the legend endorsed hereon, this Warrant and all rights hereunder shall be transferable,
in whole or in part, by the Holder without charge to the Holder, upon surrender of this Warrant to the Company at its then principal
executive offices with a properly completed and duly executed Assignment in the form attached hereto as Exhibit C. Upon such compliance,
surrender, and delivery and, if required, such payment, the Company shall execute and deliver a new Warrant or Warrants in the name of
the assignee or assignees and in the denominations specified in such instrument of assignment, and shall issue to the assignor a new
Warrant evidencing the portion of this Warrant, if any, not so assigned and this Warrant shall promptly be cancelled.
7. Holder
Not Deemed a Stockholder; Limitations on Liability. Prior to the issuance to the Holder of the Warrant Shares to which
the Holder is then entitled to receive upon the due exercise of this Warrant, the Holder shall not be entitled to vote or receive dividends
or be deemed the holder of shares of the Company for any purpose, nor shall anything contained in this Warrant be construed to confer
upon the Holder, as such, any of the rights of a member of the Company or any right to vote, give, or withhold consent to any action
(whether any reorganization, issue of shares, reclassification of shares, consolidation, merger, conveyance, or otherwise), receive notice
of meetings, receive dividends or subscription rights, or otherwise. In addition, nothing contained in this Warrant shall be construed
as imposing any liabilities on the Holder to purchase any securities (upon exercise of this Warrant or otherwise) or as a stockholder
of the Company, whether such liabilities are asserted by the Company or by creditors of the Company. Notwithstanding this Section
7, the Company shall provide the Holder with copies of the same notices and other information given to the members of the Company
generally, contemporaneously with the giving thereof to the members.
8. Replacement
on Loss; Division and Combination.
(a) Replacement
of Warrant on Loss. Upon receipt of evidence reasonably satisfactory to the Company of the loss, theft, destruction, or mutilation
of this Warrant and upon delivery of an indemnity reasonably satisfactory to it (it being understood that a written indemnification agreement
or affidavit of loss of the Holder shall be a sufficient indemnity) and, in case of mutilation, upon surrender of such Warrant for cancellation
to the Company, the Company at its own expense shall execute and deliver to the Holder, in lieu hereof, a new Warrant of like tenor and
exercisable for an equivalent number of Warrant Shares as the Warrant so lost, stolen, mutilated, or destroyed; provided, that,
in the case of mutilation, no indemnity shall be required if this Warrant in identifiable form is surrendered to the Company for cancellation.
(b) Division
and Combination of Warrant. Subject to compliance with the applicable provisions of this Warrant, this Warrant may be divided
or, following any such division of this Warrant, subsequently combined with other Warrants, upon the surrender of this Warrant or Warrants
to the Company at its then principal executive offices, together with a written notice specifying the names and denominations in which
new Warrants are to be issued, signed by the respective Holders or their agents or attorneys. Subject to compliance with the applicable
provisions of this Warrant and the Company Agreement as to any transfer or assignment which may be involved in such division or combination,
the Company shall at its own expense execute and deliver a new Warrant or Warrants in exchange for the Warrant or Warrants so surrendered
in accordance with such notice. Such new Warrant or Warrants shall be of like tenor to the surrendered Warrant or Warrants and shall be
exercisable in the aggregate for an equivalent number of Warrant Shares as the Warrant or Warrants so surrendered in accordance with such
notice.
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9. No
Impairment. The Company shall not, by amendment of its Certificate of Incorporation or Stockholders’ Agreement, or through
any reorganization, transfer of assets, consolidation, merger, dissolution, issue or sale of securities, or any other voluntary action,
avoid or seek to avoid the observance or performance of any of the terms to be observed or performed by it hereunder.
10. Compliance
with the Securities Act.
(a) Agreement
to Comply with the Securities Act; Legend. The Holder, by acceptance of this Warrant, agrees to comply in all respects with the
provisions of this Section 10 and the restrictive legend requirements set forth on the face of this Warrant and further agrees
that such Holder shall not offer, sell, or otherwise dispose of this Warrant or any Warrant Shares to be issued upon exercise hereof except
under circumstances that will not result in a violation of the Securities Act of 1933, as amended (the “Securities Act”).
This Warrant and all Warrant Shares issued upon exercise of this Warrant (unless registered under the Securities Act) shall be stamped
or imprinted with a legend in substantially the following form:
“THIS WARRANT AND THE SECURITIES
ISSUABLE UPON EXERCISE OF THIS WARRANT HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”),
OR QUALIFIED UNDER ANY STATE OR FOREIGN SECURITIES LAWS AND MAY NOT BE OFFERED FOR SALE, SOLD, PLEDGED, HYPOTHECATED, OR OTHERWISE TRANSFERRED
OR ASSIGNED UNLESS (I) A REGISTRATION STATEMENT COVERING SUCH SHARES IS EFFECTIVE UNDER THE ACT AND IS QUALIFIED UNDER APPLICABLE STATE
AND FOREIGN LAW OR (II) THE TRANSACTION IS EXEMPT FROM THE REGISTRATION AND PROSPECTUS DELIVERY REQUIREMENTS UNDER THE ACT AND THE QUALIFICATION
REQUIREMENTS UNDER APPLICABLE STATE AND FOREIGN LAW AND, IF THE CORPORATION REQUESTS, AN OPINION SATISFACTORY TO THE CORPORATION TO SUCH
EFFECT HAS BEEN RENDERED BY COUNSEL.”
(b) Representations
of the Holder. In connection with the issuance of this Warrant, the Holder specifically represents, as of the date hereof, to the Company
by acceptance of this Warrant as follows:
(i) The
Holder is an institutional “accredited investor” (as described in Rule 501(a)(1), (2), (3) (7), (8) or (12) and (13) under
the Securities Act). The Holder is acquiring this Warrant and the Warrant Shares to be issued upon exercise hereof for investment for
its own account and not with a view towards, or for resale in connection with, the public sale or distribution of this Warrant or the
Warrant Shares, except pursuant to sales registered or exempted under the Securities Act.
(ii) The
Holder understands and acknowledges that this Warrant and the Warrant Shares to be issued upon exercise hereof are “restricted securities”
under the federal securities laws inasmuch as they are being acquired from the Company in a transaction not involving a public offering
and that, under such laws and applicable regulations, such securities may be resold without registration under the Securities Act only
in certain limited circumstances. In addition, the Holder represents that it is familiar with Rule 144 under the Securities Act, as presently
in effect, and understands the resale limitations imposed thereby and by the Securities Act.
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(iii) The
Holder acknowledges that it can bear the economic and financial risk of its investment for an indefinite period, and has such knowledge
and experience in financial or business matters that it is capable of evaluating the merits and risks of the investment in the Warrant
and the Warrant Shares. The Holder has had an opportunity to ask questions and receive answers from the Company regarding the terms and
conditions of the offering of the Warrant and the business, properties, prospects, and financial condition of the Company.
11. Warrant
Register. The Company shall keep and properly maintain at its principal executive offices books for the registration
of the Warrant and any transfers thereof. The Company may deem and treat the Person in whose name the Warrant is registered on such register
as the Holder thereof for all purposes, and the Company shall not be affected by any notice to the contrary, except any assignment, division,
combination, or other transfer of the Warrant effected in accordance with the provisions of this Warrant.
12. Notices.
All notices, requests, consents, claims, demands, waivers, and other communications hereunder shall be in writing and shall be deemed
to have been given: (a) when delivered by hand (with written confirmation of receipt); (b) when received by the addressee if sent by
a nationally recognized overnight courier (receipt requested); (c) on the date sent by email of a PDF document (with evidence or confirmation
of transmission) if sent during normal business hours of the recipient, and on the next Business Day if sent after normal business hours
of the recipient; or (d) on the third day after the date mailed, by certified or registered mail, return receipt requested, postage prepaid.
Such communications must be sent to the respective parties at the addresses indicated below (or at such other address for a party as
shall be specified in a notice given in accordance with this Section 12). Actual notice is effective as notice in all instances.
If to the Company:
Elroy Air, Inc.
550 Eagle Ct, #440
Byron, CA 94514
Email: andrew@elroyair.com
Attention: Andrew Clare
with a copy (which will not constitute notice) to:
DLA Piper LLP (US)
3203 Hanover St Suite 100
Palo Alto, CA 94304
Email: josh.seidenfeld@us.dlapiper.com
Attention: Josh Seidenfeld, Esq.
If to the Holder:
[HOLDER ADDRESS]
Email: [EMAIL ADDRESS]
Attention: [TITLE OF OFFICER]
with a copy (which will not constitute notice to:
[HOLDER LAW FIRM]
Email: [EMAIL ADDRESS]
Attention: [ATTORNEY NAME]
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13. Cumulative
Remedies. Except to the extent expressly provided in Section 7 to the contrary, the rights and remedies provided
in this Warrant are cumulative and are not exclusive of, and are in addition to and not in substitution for, any other rights or remedies
available at law, in equity or otherwise. Without limiting any other provision of this Warrant or the Purchase Agreement, if the Company
willfully and knowingly fails to comply with any provision of this Warrant, which results in any material damages to the Holder, the
Company shall pay to the Holder such amounts as shall be sufficient to cover any costs and expenses including, but not limited to, reasonable
attorneys’ fees, including those of appellate proceedings, incurred by the Holder in collecting any amounts due pursuant hereto
or in otherwise enforcing any of its rights, powers or remedies hereunder.
14. Equitable
Relief. Each of the Company and the Holder acknowledges that a breach or threatened breach by such party of any of
its obligations under this Warrant would give rise to irreparable harm to the other party hereto for which monetary damages would not
be an adequate remedy and hereby agrees that in the event of a breach or a threatened breach by such party of any such obligations, the
other party hereto shall, in addition to any and all other rights and remedies that may be available to it in respect of such breach,
be entitled to equitable relief, including a restraining order, an injunction, specific performance, and any other relief that may be
available from a court of competent jurisdiction.
15. Entire
Agreement. This Warrant, together with the Purchase Agreement, constitutes the sole and entire agreement of the parties
to this Warrant with respect to the subject matter contained herein, and supersedes all prior and contemporaneous understandings and
agreements, both written and oral, with respect to such subject matter. In the event of any inconsistency between the statements in the
body of this Warrant and the Purchase Agreement, the statements in the body of this Warrant shall control.
16. Successor
and Assigns. This Warrant and the rights evidenced hereby shall be binding upon and shall inure to the benefit of the
parties hereto and the successors of the Company and the successors and permitted assigns of the Holder. Such successors and/or permitted
assigns of the Holder shall be deemed to be a Holder for all purposes hereunder.
17. No
Third-Party Beneficiaries. This Warrant is for the sole benefit of the Company and the Holder and their respective
successors and, in the case of the Holder, permitted assigns and nothing herein, express or implied, is intended to or shall confer upon
any other Person any legal or equitable right, benefit, or remedy of any nature whatsoever, under or by reason of this Warrant.
18. Headings.
The headings in this Warrant are for reference only and shall not affect the interpretation of this Warrant.
19. Amendment
and Modification; Waiver. The Related Warrants, including this Warrant, may be amended with the written consent of
the Required Holders, provided, however, and notwithstanding anything in this Warrant or the Related Warrants to the contrary, no provision
of the Related Warrants, including this Warrant, shall be amended to the extent any such amendment would (i) disproportionately, materially
and adversely modify any rights of any holder of Related Warrants (as compared to the rights of the other holders of Related Warrants)
or (ii) impose any additional financial obligations or liabilities on a holder of Related Warrants, in each case, unless any such holder
of a Related Warrant shall have previously consented in writing to such amendment or voted to approve such amendment at a meeting. No
consideration shall be offered or paid to any holder of Related Warrants to amend or consent to a waiver or modification of any provision
of the Related Warrants unless the same consideration is also offered to all of the holders of Related Warrants. For clarification purposes,
this provision constitutes a separate right granted to each holder of Related Warrants by the Company and negotiated separately by each
holder of Related Warrants, and is intended for the Company to treat the holders of Related Warrants as a group and shall not in any
way be construed as the holders of Related Warrants acting in concert or as a group with respect to the purchase, disposition or voting
of securities or otherwise. No waiver by the Company or the Holder of any of the provisions hereof shall be effective unless explicitly
set forth in writing and signed by the party so waiving. No waiver by any party shall operate or be construed as a waiver in respect
of any failure, breach, or default not expressly identified by such written waiver, whether of a similar or different character, and
whether occurring before or after that waiver. No failure to exercise, or delay in exercising, any rights, remedy, power, or privilege
arising from this Warrant shall operate or be construed as a waiver thereof; nor shall any single or partial exercise of any right, remedy,
power, or privilege hereunder preclude any other or further exercise thereof or the exercise of any other right, remedy, power, or privilege.
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20. Severability.
If any term or provision of this Warrant is invalid, illegal, or unenforceable in any jurisdiction, such invalidity, illegality, or unenforceability
shall not affect any other term or provision of this Warrant or invalidate or render unenforceable such term or provision in any other
jurisdiction.
21. Governing
Law. This Warrant, and all claims or causes of action based upon, arising out of, or related to this Warrant, shall
be governed by, and construed in accordance with, the Laws of the State of Delaware, without giving effect to principles or rules of
conflict of Laws to the extent such principles or rules would require or permit the application of Laws of another jurisdiction.
22. Submission
to Jurisdiction. Any proceeding or Legal Proceeding based upon, arising out of or related to this Warrant must be brought
in the Court of Chancery of the State of Delaware (or, to the extent such court does not have jurisdiction, in the United States District
Court for the District of Delaware and to the extent such court does not have subject matter jurisdiction, the Superior Court of the
State of Delaware), and each of the parties irrevocably (i) submits to the exclusive jurisdiction of each such court in any such proceeding
or Legal Proceeding, (ii) waives any objection it may now or hereafter have to personal jurisdiction, venue or to convenience of forum,
(iii) agrees that all claims in respect of the proceeding or Legal Proceeding shall be heard and determined only in any such court, and
(iv) agrees not to bring any proceeding or Legal Proceeding arising out of or relating to this Warrant or the transactions contemplated
hereby in any other court. Nothing herein contained shall be deemed to affect the right of any party to serve process in any manner permitted
by Law or to commence Legal Proceedings or otherwise proceed against any other party in any other jurisdiction, in each case, to enforce
judgments obtained in any Legal Proceeding, suit or proceeding brought pursuant to this Section 22.
23. WAIVER
OF JURY TRIAL. EACH PARTY ACKNOWLEDGES AND AGREES THAT ANY CONTROVERSY WHICH MAY ARISE UNDER THIS WARRANT IS
LIKELY TO INVOLVE COMPLICATED AND DIFFICULT ISSUES, AND THEREFORE EACH SUCH PARTY HEREBY IRREVOCABLY, UNCONDITIONALLY AND VOLUNTARILY
WAIVES ANY RIGHT SUCH PARTY MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY ACTION, SUIT OR PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT
OF OR RELATING TO THIS WARRANT.
24. Counterparts.
This Warrant may be executed in counterparts, each of which shall be deemed an original, but all of which together shall be deemed to
be one and the same agreement. A signed copy of this Warrant delivered by facsimile, email, or other means of electronic transmission
shall be deemed to have the same legal effect as delivery of an original signed copy of this Warrant.
25. No
Strict Construction. This Warrant shall be construed without regard to any presumption or rule requiring construction or interpretation
against the party drafting an instrument or causing any instrument to be drafted.
[signature page follows]
14
IN WITNESS WHEREOF, the Company has duly executed
this Warrant on the Original Issue Date.
ELROY AIR, INC.
By:
Name:
Andrew Clare
Title:
Chief Executive Officer
[Signature Page to Warrant for Common Stock – Elroy Air, Inc]
Accepted and agreed,
[HOLDER NAME]
By:
[NAME]
[TITLE]
[Signature Page to Warrant for Common Stock
– Elroy Air, Inc]
EXHIBIT A
NOTICE OF EXERCISE
To:
Attn:
Email:
(1) The undersigned hereby elects to purchase ________ Warrant Shares
of the Company pursuant to the terms of the attached Warrant (only if exercised in full), and tenders herewith payment of the exercise
price in full, together with all applicable transfer taxes, if any.
(2) Payment shall take the form of (check applicable box):
☐ in lawful money of the United States; or
☐ if permitted the cancellation of such number of Warrant Shares
as is necessary, in accordance with the formula set forth in subsection 3(b), to exercise this Warrant with respect to the maximum number
of Warrant Shares purchasable pursuant to the cashless exercise procedure set forth in subsection 3(b).
(3) Please issue said Warrant Shares in the name of the undersigned
or in such other name as is specified below:
The Warrant Shares shall be delivered to the following DWAC Account
Number:
(4) Accredited Investor. The undersigned is an institutional
“accredited investor” (as described in Rule 501(a)(1), (2), (3) (7), (8) or (12) and (13) under the Securities Act of 1933,
as amended).
[SIGNATURE OF HOLDER]
Name of Investing Entity:__________________________________________________________________
Signature of Authorized Signatory of Investing Entity:____________________________________________
Name of Authorized Signatory:______________________________________________________________
Title of Authorized Signatory:_______________________________________________________________
Date:
__________________________________________________________________________________
EXHIBIT B
FORM OF PUBCO WARRANT
EXHIBIT C
ASSIGNMENT FORM
(To assign the foregoing Warrant, execute this form and supply required
information. Do not use this form to purchase shares.)
FOR VALUE RECEIVED, the foregoing Warrant and all rights evidenced
thereby are hereby assigned to
Name:
Address:
Phone Number:
Email Address:
Dated: _______________ __, ______
Holder’s Signature:
Holder’s Address:
EX-99.5 — FORM OF ELROY AIR PRE-FUNDED CONVERTIBLE NOTE INVESTOR WARRANT (OTHER INVESTORS)
EX-99.5
Filename: ea029643801ex99-5.htm · Sequence: 15
Exhibit
99.5
THIS
WARRANT AND THE SECURITIES ISSUABLE UPON EXERCISE OF THIS WARRANT HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED
(THE “ACT”), OR QUALIFIED UNDER ANY STATE OR FOREIGN SECURITIES LAWS AND MAY NOT BE OFFERED FOR SALE, SOLD, PLEDGED,
HYPOTHECATED, OR OTHERWISE TRANSFERRED OR ASSIGNED UNLESS (I) A REGISTRATION STATEMENT COVERING SUCH SECURITIES IS EFFECTIVE UNDER THE
ACT AND IS QUALIFIED UNDER APPLICABLE STATE AND FOREIGN LAW OR (II) THE TRANSACTION IS EXEMPT FROM THE REGISTRATION AND PROSPECTUS DELIVERY
REQUIREMENTS UNDER THE ACT AND THE QUALIFICATION REQUIREMENTS UNDER APPLICABLE STATE AND FOREIGN LAW AND, IF THE COMPANY REQUESTS, AN
OPINION SATISFACTORY TO THE CORPORATION TO SUCH EFFECT HAS BEEN RENDERED BY COUNSEL.
COMMON
STOCK PURCHASE WARRANT
Original
Issue Date: June [●], 2026
Initial
Exercise Date: as set forth in Section 2
Number
of Warrant Shares: [●]
FOR
VALUE RECEIVED, Elory Air, Inc., a Delaware corporation (the “Company”), hereby certifies that [NAME OF HOLDER],
a [JURISDICTION] [TYPE OF ENTITY], or its registered assigns (the “Holder”) is entitled to purchase from the
Company [●] duly authorized and validly issued shares (the “Warrant Shares”) of common stock, par value
$0.0001 per share, of the Company (the “Common Stock”) at a purchase price per share of $12.00 (subject to
adjustment as provided herein, the “Exercise Price”), all subject to the terms, conditions, and adjustments
set forth below in this Warrant. Certain capitalized terms used herein are defined in Section 1 hereof.
This
Warrant has been issued pursuant to the terms of the Securities Purchase Agreement, dated as of June [●], 2026 (the “Purchase
Agreement”), between the Company and the Holder.
This
Warrant is one of a series of warrants with substantially the same terms as this Warrant with an initial exercise price of $12.00 per
share issued pursuant to securities purchase agreements with substantially the same terms as the Purchase Agreement (such series of warrants,
the “Related Warrants”).
1. Definitions.
As used in this Warrant, the following terms have the respective meanings set forth below:
“Aggregate
Exercise Price” means an amount equal to the product of (a) the number of Warrant Shares in respect of which this Warrant
is then being exercised pursuant to Section 3 hereof, multiplied by (b) the Exercise Price in effect as of the Exercise
Date in accordance with the terms of this Warrant.
“Board”
means the board of directors of the Company.
“Business
Combination” means the transactions contemplated by the Business Combination Agreement.
“Business
Combination Agreement” means that certain business combination agreement, dated as of June [●], 2026, by and among
Columbus Circle Capital Corp. II, a Cayman Islands exempted company (prior to the closing of the Business Combination, “SPAC,”
and following the closing of the Business Combination “PubCo”), IPHX Merger Sub, Inc. and the Company.
“Business
Day” means a day other than a Saturday, Sunday or other day on which commercial banks in the City of New York are authorized
or required to close.
“Common
Stock” has the meaning set forth in the preamble.
“Common
Stock Equivalents” means any securities of the Company which would entitle the holder thereof to acquire at any time Common
Stock, including, without limitation, any debt, preferred stock, right, option, warrant or other instrument that is at any time convertible
into or exercisable or exchangeable for, or otherwise entitles the holder thereof to receive, Common Stock, and any securities of the
Company that when paired with one or more other securities of the Company or another entity entitles the holder thereof to receive, Common
Stock.
“Company”
has the meaning set forth in the preamble.
“Convertible
Securities” means any stock or securities (other than Options) directly or indirectly convertible into or exercisable or
exchangeable for, or which otherwise entitles the holder thereof to acquire, any shares of Common Stock and any securities of the Company
that when paired with one or more other securities of the Company or another entity entitles the holder thereof to receive, Common Stock.
“Certificate
of Incorporation” means the amended and restated certificate of incorporation of the Company, as such certificate may be
corrected, amended, or restated.
“Exempt
Issuance” means the issuance or deemed issuance of shares of Common Stock specified in clauses (i)-(iv) of the definition
of Additional Shares of Common Stock in the Company’s Certificate of Incorporation.
“Exercise
Date” means, for any given exercise of this Warrant, the date on which the conditions to such exercise as set forth in
Section 3 shall have been satisfied at or prior to 5:00 p.m., New York, New York time, on a Business Day, including, without limitation,
the receipt by the Company of the Exercise Agreement, the Warrant, and the Aggregate Exercise Price.
“Exercise
Agreement” has the meaning set forth in Section 3(a)(i).
“Exercise
Period” has the meaning set forth in Section 2.
“Exercise
Price” has the meaning set forth in the preamble.
“Fair
Market Value” means, as of any particular date, the fair market value as determined by the Board in its good faith.
“Inflection
Point” means Inflection Point Asset Management LLC and/or one or more of its Affiliates.
“Options”
means any rights, warrants or options to subscribe for or purchase shares of Common Stock or Convertible Securities.
2
“Option
Value” means the value of an Option based on the Black-Scholes model reflecting (i) a risk-free interest rate corresponding
to the U.S. Treasury rate for a period equal to the remaining term of the applicable Option as of the applicable date of determination,
(ii) an expected volatility equal to 50%, (iii) the underlying price per share used in such calculation shall be equal to the highest
price per share at which the Company has sold (or has been deemed to have sold) shares of Common Stock, (iv) a zero cost of borrow and
(v) a 360 day annualization factor , provided, however, in case any Option is issued in connection with the
issue or sale of other securities of the Company, together comprising one integrated transaction, in no event shall the Option Value
exceed a fraction of the aggregate consideration received (excluding the minimum aggregate amount of additional consideration (as set
forth in the instruments relating thereto, without regard to any provision contained therein for a subsequent adjustment of such consideration)
payable to the Company upon the exercise of such Options, or in the case of Options for Convertible Securities, the exercise of such
Options for Convertible Securities and the conversion or exchange of such Convertible Securities) equal to (1) the number of shares of
Common Stock underlying such Option divided by (2) the total number of shares of Common Stock issued or issuable in the integrated transaction
(including the number of shares underlying such Option).
“Required
Holders” means the holders of a majority in interest (based on remaining aggregate Warrant Shares) of the Related Warrants
then outstanding, which majority must include Inflection Point to the extent it then holds any Related Warrants.
“VWAP”
means, for any date and any security, the price determined by the first of the following clauses that applies: (a) if the security is
then listed or quoted on a Trading Market, the arithmetic mean of the daily volume weighted average prices of the security for each of
the 20 Trading Days preceding such date (or the nearest preceding date) on the Trading Market on which the security is then listed or
quoted as reported by Bloomberg (based on a Trading Day from 9:30 a.m. (New York City time) to 4:02 p.m. (New York City time)), with
each such Trading Day weighted equally regardless of the aggregate trading volume for such Trading Day, (b) if OTCQB or OTCQX is not
a Trading Market, the arithmetic mean of the daily volume weighted average prices of the security for each of the 20 Trading Days preceding
such date (or the nearest preceding date) on OTCQB, OTCQX or OTCID as applicable, calculated in the same manner as clause (a), (c) if
the security is not then listed or quoted for trading on OTCQB or OTCQX and if prices for the security are then reported in The Pink
Open Market (or a similar organization or agency succeeding to its functions of reporting prices), the average of the highest closing
bid price and the lowest closing ask price of the security for the 20 Trading Days preceding such date, or (d) in all other cases, the
fair market value of the security as determined by an independent appraiser selected in good faith by the Required Holders and reasonably
acceptable to the Company, the fees and expenses of which shall be paid by the Company. For the avoidance of doubt, the daily volume
weighted average price for each individual Trading Day shall be determined by Bloomberg in accordance with its standard methodology,
and the VWAP for the applicable period shall be calculated by summing such daily values and dividing by the number of Trading Days in
the measurement period (i.e., 20 Trading Days), such that each Trading Day’s price is given equal weight irrespective of trading
volume.
2. Term
of Warrant. If the Business Combination Agreement
has been terminated in accordance with its terms, then, subject to the terms and conditions hereof, at any time or from time to time
after the date of such termination (the “Initial Exercise Date”) and prior to 5:00 p.m., New York, New York
time, on the fifth (5th) anniversary of the date of the termination of the Business Combination Agreement or, if such day is not a Business
Day, on the next preceding Business Day (the “Exercise Period”), the Holder of this Warrant may exercise this
Warrant for all or any part of the Warrant Shares purchasable hereunder (subject to adjustment as provided herein).
3
3. Exercise
of Warrant.
(a) Exercise
Procedure. This Warrant may be exercised from time to time on any Business Day during the Exercise Period, for all or any part
of the unexercised Warrant Shares, upon:
(i) surrender
of this Warrant to the Company at its then principal executive offices (or an indemnification undertaking with respect to this Warrant
in the case of its loss, theft, or destruction), together with an Exercise Agreement in the form attached hereto as Exhibit A
(each, an “Exercise Agreement”), duly completed (including specifying the number of Warrant Shares to be purchased)
and executed; and
(ii) payment
to the Company of the Aggregate Exercise Price in accordance with Section 3(b).
(b) Payment
of the Aggregate Exercise Price. Payment of the Aggregate Exercise Price shall be made, at the option of the Holder as expressed
in the Exercise Agreement, by the following methods:
(i) by
delivery to the Company of a certified or official bank check payable to the order of the Company or by wire transfer of immediately
available funds to an account designated in writing by the Company, in the amount of such Aggregate Exercise Price; or
(ii) by
instructing the Company to withhold a number of Warrant Shares then issuable upon exercise of this Warrant with an aggregate Fair Market
Value as of the Exercise Date equal to such Aggregate Exercise Price.
In
the event of any withholding of Warrant Shares pursuant to clause (ii) above where the number of shares of Common Stock whose value is
equal to the Aggregate Exercise Price is not a whole number, the number of shares of Common Stock withheld by or surrendered to the Company
shall be rounded down to the nearest whole shares of Common Stock.
(c) Record
Keeping of Exercise of Warrant. Upon receipt by the Company of the Exercise Agreement, surrender of this Warrant, and payment
of the Aggregate Exercise Price (in accordance with Section 3(a) hereof), the Company shall, as promptly as practicable, and in
any event within 5 Business Days thereafter, deliver (or cause to be delivered) a stock certificate for such Warrant Shares (or a book-entry
statement evidencing the Holder’s ownership of such Warrant Shares) and cash in lieu of any fraction of a share, as provided in
Section 3(d) hereof.
(d) Fractional
Share. The Company shall not be required to issue a fractional Warrant Share upon exercise of any Warrant. As to any fraction
of a Warrant Share that the Holder would otherwise be entitled to purchase upon such exercise, the Company shall pay to such Holder an
amount in cash (by delivery of a certified or official bank check or by wire transfer of immediately available funds) equal to the product
of (i) such fraction multiplied by (ii) the Fair Market Value of one Warrant Share on the Exercise Date.
(e) Delivery
of New Warrant. Unless the purchase rights represented by this Warrant shall have expired or shall have been fully exercised,
the Company shall, at the time of delivery of the certificate or certificates representing the Warrant Shares being issued in accordance
with Section 3(c) hereof, deliver to the Holder a new Warrant evidencing the rights of the Holder to purchase the unexpired and
unexercised Warrant Shares called for by this Warrant. Such new Warrant shall in all other respects be identical to this Warrant.
4
(f) Valid
Issuance of Warrant and Warrant Shares. With respect to the exercise of this Warrant, the Company hereby represents, covenants,
and agrees that:
(i) this
Warrant is, and any Warrant issued in substitution for or replacement of this Warrant shall be, upon issuance, duly authorized and validly
issued;
(ii) all
Warrant Shares issuable upon the exercise of this Warrant pursuant to the terms hereof shall be, upon issuance, and the Company shall
take all such actions as may be necessary or reasonably appropriate in order that such Warrant Shares are, duly authorized, validly issued,
and non-assessable, free and clear of all taxes, liens, and charges, and issued without violation of any preemptive or similar rights
of any member of the Company;
(iii) The
Company shall take all such actions as may be reasonably necessary to ensure that all such Warrant Shares are issued without violation
by the Company of any applicable law or governmental regulation to the extent that such applicable law or governmental regulation would
prevent the issuance of such Warrant Shares or materially and adversely impact the Company; and
(iv) The
Company shall pay all taxes and other governmental charges that may be imposed with respect to, the issuance or delivery of Warrant Shares
upon exercise of this Warrant; provided, that the Company shall not be required to pay any tax or governmental charge that may be imposed
with respect to any applicable withholding or the issuance or delivery of the Warrant Shares to any Person other than the Holder, and
no such issuance or delivery shall be made unless and until the Person requesting such issuance has paid to the Company the amount of
any such tax, or has established to the satisfaction of the Company that such tax has been paid.
(g) Conditional
Exercise. If an exercise of any portion of this Warrant is to be made in connection with a public offering or a sale of the Company
(pursuant to a merger, sale of stock, or otherwise), such exercise may at the election of the Holder be conditioned upon the consummation
of such transaction, in which case such exercise shall not be deemed to be effective until immediately prior to the consummation of such
transaction.
(h) Reservation
of Shares. During the Exercise Period, the Company shall at all times reserve and keep available out of its authorized but unissued
shares of Common Stock or other securities constituting Warrant Shares, solely for the purpose of issuance upon the exercise of this
Warrant, the maximum number of Warrant Shares issuable upon the exercise of this Warrant, and the par value per Warrant Share shall at
all times be less than or equal to the applicable Exercise Price. The Company shall not increase the par value of any Warrant Shares
receivable upon the exercise of this Warrant above the Exercise Price then in effect, and shall take all such actions as may be necessary
or appropriate in order that the Company may validly and legally issue shares of Common Stock upon the exercise of this Warrant.
4. Certain
Adjustment to Exercise Price and Number of Warrant Shares.
(a) Stock
Dividends and Splits. If the Company at any time while this Warrant is outstanding: (i) pays a stock dividend or otherwise makes
a distribution or distributions on shares of its Common Stock or any other equity or equity equivalent securities payable in shares of
Common Stock (which, for avoidance of doubt, shall not include any shares of Common Stock issued by the Company upon exercise of this
Warrant or any cash distributions), (ii) subdivides outstanding shares of Common Stock into a larger number of shares, (iii) combines
(including by way of a reverse stock split) outstanding shares of Common Stock into a smaller number of shares, or (iv) issues by reclassification
of shares of the Common Stock any shares of capital stock of the Company, then in each case the Exercise Price shall be multiplied by
a fraction of which the numerator shall be the number of shares of Common Stock (excluding treasury shares, if any) outstanding immediately
before such event and of which the denominator shall be the number of shares of Common Stock outstanding immediately after such event,
and the number of shares issuable upon exercise of this Warrant shall be proportionately adjusted such that the Aggregate Exercise Price
of this Warrant shall remain unchanged. Any adjustment made pursuant to this Section 4(a) shall become effective immediately after
the record date for the determination of stockholders entitled to receive such dividend or distribution and shall become effective immediately
after the effective date in the case of a subdivision, combination or re-classification.
5
(b) Adjustment
Upon Issuance of Common Stock. If, while this Warrant is outstanding and after the occurrence of a Termination Event, the Company
issues or sells, or in accordance with this Section 4(b) is deemed to have issued or sold, any shares of Common Stock (including
the issuance or sale of shares of Common Stock owned or held by or for the account of the Company, but excluding shares of Common Stock
deemed to have been issued or sold by the Company in connection with any Exempt Issuance) for a consideration per share (the “New
Issuance Price”) less than the Exercise Price then in effect (such price threshold, the “Applicable Price”,
and each such issue, sale or deemed issuance or sale, a “Dilutive Issuance”), in issuances and sales conducted
for the purpose of raising capital by the Company, then immediately after such Dilutive Issuance, the Exercise Price then in effect shall
be reduced to an amount equal to the New Issuance Price. For purposes of determining the adjusted Exercise Price under this Section
4(b), the following shall be applicable:
(i) Options
and Convertible Securities. The consideration per share received by the Company for Common Stock deemed to have been issued pursuant
to Section 4(b)(ii), relating to Options and Convertible Securities, shall be determined by dividing: (x) the total amount,
if any, received or receivable by the Company as consideration for the issue of such Options or Convertible Securities, plus the minimum
aggregate amount of additional consideration (as set forth in the instruments relating thereto, without regard to any provision contained
therein for a subsequent adjustment of such consideration) payable to the Company upon the exercise of such Options or the conversion
or exchange of such Convertible Securities, or in the case of Options for Convertible Securities, the exercise of such Options for Convertible
Securities and the conversion or exchange of such Convertible Securities, by (y) the maximum number of shares of Common Stock (as set
forth in the instruments relating thereto, without regard to any provision contained therein for a subsequent adjustment of such number)
deemed to be issued pursuant to Section 4(b)(ii) upon the issuance of such Options or Convertible Securities.
(ii) Deemed
Issuance of Options and Convertible Securities. If the Company at any time or from time to time shall issue any Options or Convertible
Securities or shall fix a record date for the determination of holders of any class of securities entitled to receive any such Options
or Convertible Securities, then the maximum number of shares of Common Stock (as set forth in the instrument relating thereto, assuming
the satisfaction of any conditions to exercisability, convertibility or exchangeability but without regard to any provision contained
therein for a subsequent adjustment of such number) issuable upon the exercise of such Options or, in the case of Convertible Securities
and Options therefor, the conversion or exchange of such Convertible Securities, shall be deemed to be outstanding and to have been issued
as of the time of such issue or, in case such a record date shall have been fixed, as of the close of business on such record date.
(iii) Change
in Option Price. If, after the Original Issue Date, the purchase price provided for in any Options, the additional consideration,
if any, payable upon the issue, conversion, exercise or exchange of any Convertible Securities, or the rate at which any Convertible
Securities are convertible into or exercisable or exchangeable for Common Stock increases or decreases at any time, (other than (x) proportional
changes in conversion or exercise prices, as applicable, in connection with an event referred to in Section 4(a) above
and (y) automatic adjustments to such terms pursuant to anti-dilution or similar provisions of such Option or Convertible Security which
are not more favorable to the holder thereof than the anti-dilution and similar provisions set forth herein), the Exercise Price in effect
at the time of such increase or decrease shall be adjusted to the Exercise Price, which would have been in effect at such time had such
Options or Convertible Securities provided for such increased or decreased purchase price, additional consideration or increased or decreased
conversion rate, as the case may be, at the time initially granted, issued or sold. For purposes of this Section 4(b)(iii),
if the terms of any Option or Convertible Security that was outstanding as of the Original Issue Date are increased or decreased in the
manner described in the immediately preceding sentence, then such Option or Convertible Security and the shares of Common Stock deemed
issuable upon exercise, conversion or exchange thereof shall be deemed to have been issued as of the date of such increase or decrease.
6
(iv) Calculation
of Consideration Received. In case one or more Options is issued in connection with the issue or sale of other securities of the
Company, together comprising one integrated transaction, (x) each such Option will be deemed to have been issued for the Option Value
of such Option and (y) the other securities issued or sold in such integrated transaction shall be deemed to have been issued or sold
for the difference of (I) the aggregate consideration received by the Company less any consideration paid or payable by the Company pursuant
to the terms of such other securities of the Company, less (II) the Option Value of such Option. If any shares of Common Stock, Options
or Convertible Securities are issued or sold or deemed to have been issued or sold for cash, the consideration other than cash received
therefor will be deemed to be the net amount received by the Company therefor. If any shares of Common Stock, Options or Convertible
Securities are issued or sold for a consideration other than cash, the amount of such consideration received by the Company will be the
fair value of such consideration, except where such consideration consists of publicly traded securities, in which case the amount of
consideration received by the Company will be the VWAP of such publicly traded securities on the date of receipt. If any shares of Common
Stock, Options or Convertible Securities are issued to the owners of the non-surviving entity in connection with any merger in which
the Company is the surviving entity, the amount of consideration therefor will be deemed to be the fair value of such portion of the
net assets and business of the non-surviving entity as is attributable to such shares of Common Stock, Options or Convertible Securities,
as the case may be. The fair value of any consideration other than cash or publicly traded securities will be determined jointly by the
Company and Required Holders. If such parties are unable to reach agreement within ten (10) days after the occurrence of an event requiring
valuation (the “Valuation Event”), the fair value of such consideration will be determined within five (5)
Business Days after the tenth (10th) day following the Valuation Event by an independent, reputable appraiser jointly selected by the
Company and the Required Holders. The determination of such appraiser shall be final and binding upon all parties absent manifest error
and the fees and expenses of such appraiser shall be borne by the Company.
(v) Record
Date. If the Company takes a record of the holders of shares of Common Stock for the purpose of entitling them (A) to receive a dividend
or other distribution payable in shares of Common Stock, Options or in Convertible Securities or (B) to subscribe for or purchase shares
of Common Stock, Options or Convertible Securities, then such record date will be deemed to be the date of the issuance or sale of the
shares of Common Stock deemed to have been issued or sold upon the declaration of such dividend or the making of such other distribution
or the date of the granting of such right of subscription or purchase, as the case may be.
(c) Subsequent
Rights Offerings. In addition to any adjustments pursuant to Section 4(a) above, if at any time after the Original Issue Date
the Company grants, issues or sells any Common Stock Equivalents or rights to purchase stock, warrants, securities or other property
pro rata to the record holders of any class of shares of Common Stock (the “Purchase Rights”), then the Holder
will be entitled to acquire, upon the terms applicable to such Purchase Rights, the aggregate Purchase Rights which the Holder could
have acquired if the Holder had held the number of shares of Common Stock acquirable upon complete exercise of this Warrant immediately
before the date on which a record is taken for the grant, issuance or sale of such Purchase Rights, or, if no such record is taken, the
date as of which the record holders of shares of Common Stock are to be determined for the grant, issue or sale of such Purchase Rights.
To the extent that the issue price of such Purchase Rights would result in an adjustment of the Exercise Price pursuant to Section
4(b), such adjustment shall not occur to the extent the Holders were granted the right to acquire such Purchase Rights on the applicable
terms.
(d) Pro
Rata Distributions. In addition to any adjustments pursuant to Section 4(a) above, if at any time after the Original Issue
Date the Company shall declare or make any dividend or other distribution of its assets (or rights to acquire its assets) to holders
of shares of Common Stock, by way of return of capital or otherwise (including, without limitation, any distribution of cash, stock or
other securities, property or options by way of a dividend, spin off, reclassification, corporate rearrangement, scheme of arrangement
or other similar transaction) (a “Distribution”), at any time after the issuance of this Warrant, then, in
each such case, the Holder shall be entitled to participate in such Distribution to the same extent that the Holder would have participated
therein if the Holder had held the number of shares of Common Stock acquirable upon complete exercise of this Warrant immediately before
the date of which a record is taken for such Distribution, or, if no such record is taken, the date as of which the record holders of
shares of Common Stock are to be determined for the participation in such Distribution.
7
(e) Business
Combination. Upon the closing of the Business Combination, without any action on the part of the Holder, the Company or any other
party to the Business Combination Agreement, this Warrant shall convert into a warrant of PubCo, in substantially the form attached hereto
as Exhibit B, to purchase a number of shares of common stock of PubCo equal to the [Aggregate Exercise Price divided by twelve
(12)].
(f) Fundamental
Transaction. If the Business Combination Agreement has been terminated without the Business Combination having closed, and following
such termination the Company closes a Change of Control, then, at the effective time of the Change of Control, the Holder shall be entitled
to receive, in cash, the Option Value of this Warrant (the “CoC Price”). This Warrant shall terminate immediately
upon a Change of Control, subject to Holder’s receipt of the CoC Price. As used herein, a “Change of Control”
means: (i) a Deemed Liquidation Event (as defined in the Company’s Certificate of Incorporation as in effect on the initial issuance
date of this Warrant) or (ii) the closing of the Company’s first firm commitment underwritten initial public offering of its common
stock pursuant to a registration statement filed under the Act; provided, that the Business Combination shall not constitute a Change
of Control hereunder.
(g) Calculations.
All calculations under this Section 4 shall be made to the nearest cent or the nearest 1/100th of a share, as the case may be.
For purposes of this Section 4, the number of shares of Common Stock deemed to be issued and outstanding as of a given date shall
be the sum of the number of shares of Common Stock (excluding treasury shares, if any) issued and outstanding.
(h) Number
of Warrant Shares. Simultaneously with any adjustment to the Exercise Price pursuant to this Section 4, the number of Warrant
Shares that may be purchased upon exercise of this Warrant shall be increased or decreased proportionately so that after such adjustment
the aggregate Exercise Price payable hereunder for the adjusted number of Warrant Shares shall be the same as the aggregate Exercise
Price in effect immediately prior to such adjustment (without regard to any limitations on exercise contained herein).
(i) Notice
to Holder.
(i) Adjustment
to Exercise Price. Whenever the Exercise Price is adjusted pursuant to any provision of this Section 4, the Company shall
promptly deliver to the Holder by facsimile or email a notice setting forth the Exercise Price after such adjustment and any resulting
adjustment to the number of Warrant Shares and setting forth a brief statement of the facts requiring such adjustment.
(ii) Notice
to Allow Exercise by Holder. If (A) the Company shall declare a dividend (or any other distribution in whatever form) on the Common
Stock, (B) the Company shall declare a special nonrecurring cash dividend on or a redemption of the Common Stock, (C) the Company shall
authorize the granting to all holders of the Common Stock rights or warrants to subscribe for or purchase any shares of capital stock
of any class or of any rights, (D) the approval of any stockholders of the Company shall be required in connection with any reclassification
of the Common Stock, any consolidation or merger to which the Company (or any of its subsidiaries) is a party, any sale or transfer of
all or substantially all of its assets, or any compulsory share exchange whereby the Common Stock is converted into other securities,
cash or property, or (E) the Company shall authorize the voluntary or involuntary dissolution, liquidation or winding up of the affairs
of the Company, then, in each case, the Company shall cause to be delivered by facsimile or email to the Holder at its last facsimile
number or email address as it shall appear upon the records of the Company, at least 20 calendar days prior to the applicable record
or effective date hereinafter specified, a notice stating (x) the date on which a record is to be taken for the purpose of such dividend,
distribution, redemption, rights or warrants, or if a record is not to be taken, the date as of which the holders of the Common Stock
of record to be entitled to such dividend, distributions, redemption, rights or warrants are to be determined or (y) the date on which
such reclassification, consolidation, merger, sale, transfer or share exchange is expected to become effective or close, and the date
as of which it is expected that holders of the Common Stock of record shall be entitled to exchange their shares of the Common Stock
for securities, cash or other property deliverable upon such reclassification, consolidation, merger, sale, transfer or share exchange;
provided, that, the failure to deliver such notice or any defect therein or in the delivery thereof shall not affect the validity of
the corporate action required to be specified in such notice. The Holder shall remain entitled to exercise this Warrant during the period
commencing on the date of such notice to the effective date of the event triggering such notice except as may otherwise be expressly
set forth herein.
8
5. Stockholder
Agreements. The Warrant Shares issuable upon exercise
of this Warrant are and shall be subject to, and have the benefit of, that certain Amended and Restated Right of First Refusal and Co-Sale
Agreement dated as of October 31, 2024, that certain Amended and Restated Investors’ Rights Agreement dated as of October 31, 2024
and that certain Amended and Restated Voting Agreement dated as of October 31, 2024 (and each as amended, and as may be further amended
or restated from time to time, collectively, the “Stockholder Agreements”) and the Holder shall be required,
for so long as the Holder holds any Warrant Shares, to become and remain a party to the Stockholder Agreements.
6. Transfer
of Warrant. The terms and conditions of this
Warrant shall inure to the benefit of and be binding upon the respective successors and assigns of the Company and the Holder. Notwithstanding
the foregoing, the Holder may not assign, pledge, or otherwise transfer this Warrant without the prior written consent of the Company;
provided, however, that if Holder is a partnership, corporation, trust, joint venture, unincorporated organization or other
entity it may transfer its rights under this Warrant to an affiliate (including any other entity wholly owned and/or controlled by the
Holder’s ultimate beneficial owner or any of such person’s immediate family members) or to its members, stockholders, partners
and/or equityholders without the prior written consent of the Company. Subject to the transfer conditions referred to in the legend endorsed
hereon, this Warrant and all rights hereunder shall be transferable, in whole or in part, by the Holder without charge to the Holder,
upon surrender of this Warrant to the Company at its then principal executive offices with a properly completed and duly executed Assignment
in the form attached hereto as Exhibit C. Upon such compliance, surrender, and delivery and, if required, such payment, the Company
shall execute and deliver a new Warrant or Warrants in the name of the assignee or assignees and in the denominations specified in such
instrument of assignment, and shall issue to the assignor a new Warrant evidencing the portion of this Warrant, if any, not so assigned
and this Warrant shall promptly be cancelled.
7. Holder
Not Deemed a Stockholder; Limitations on Liability.
Prior to the issuance to the Holder of the Warrant Shares to which the Holder is then entitled to receive upon the due exercise of this
Warrant, the Holder shall not be entitled to vote or receive dividends or be deemed the holder of shares of the Company for any purpose,
nor shall anything contained in this Warrant be construed to confer upon the Holder, as such, any of the rights of a member of the Company
or any right to vote, give, or withhold consent to any action (whether any reorganization, issue of shares, reclassification of shares,
consolidation, merger, conveyance, or otherwise), receive notice of meetings, receive dividends or subscription rights, or otherwise.
In addition, nothing contained in this Warrant shall be construed as imposing any liabilities on the Holder to purchase any securities
(upon exercise of this Warrant or otherwise) or as a stockholder of the Company, whether such liabilities are asserted by the Company
or by creditors of the Company. Notwithstanding this Section 7, the Company shall provide the Holder with copies of the same notices
and other information given to the members of the Company generally, contemporaneously with the giving thereof to the members.
8. Replacement
on Loss; Division and Combination.
(a) Replacement
of Warrant on Loss. Upon receipt of evidence reasonably satisfactory to the Company of the loss, theft, destruction, or mutilation
of this Warrant and upon delivery of an indemnity reasonably satisfactory to it (it being understood that a written indemnification agreement
or affidavit of loss of the Holder shall be a sufficient indemnity) and, in case of mutilation, upon surrender of such Warrant for cancellation
to the Company, the Company at its own expense shall execute and deliver to the Holder, in lieu hereof, a new Warrant of like tenor and
exercisable for an equivalent number of Warrant Shares as the Warrant so lost, stolen, mutilated, or destroyed; provided, that,
in the case of mutilation, no indemnity shall be required if this Warrant in identifiable form is surrendered to the Company for cancellation.
(b) Division
and Combination of Warrant. Subject to compliance with the applicable provisions of this Warrant, this Warrant may be divided
or, following any such division of this Warrant, subsequently combined with other Warrants, upon the surrender of this Warrant or Warrants
to the Company at its then principal executive offices, together with a written notice specifying the names and denominations in which
new Warrants are to be issued, signed by the respective Holders or their agents or attorneys. Subject to compliance with the applicable
provisions of this Warrant and the Company Agreement as to any transfer or assignment which may be involved in such division or combination,
the Company shall at its own expense execute and deliver a new Warrant or Warrants in exchange for the Warrant or Warrants so surrendered
in accordance with such notice. Such new Warrant or Warrants shall be of like tenor to the surrendered Warrant or Warrants and shall
be exercisable in the aggregate for an equivalent number of Warrant Shares as the Warrant or Warrants so surrendered in accordance with
such notice.
9
9. No
Impairment. The Company shall not, by amendment of its Certificate of Incorporation or Stockholders’ Agreement, or through
any reorganization, transfer of assets, consolidation, merger, dissolution, issue or sale of securities, or any other voluntary action,
avoid or seek to avoid the observance or performance of any of the terms to be observed or performed by it hereunder.
10. Compliance
with the Securities Act.
(a) Agreement
to Comply with the Securities Act; Legend. The Holder, by acceptance of this Warrant, agrees to comply in all respects with the
provisions of this Section 10 and the restrictive legend requirements set forth on the face of this Warrant and further agrees
that such Holder shall not offer, sell, or otherwise dispose of this Warrant or any Warrant Shares to be issued upon exercise hereof
except under circumstances that will not result in a violation of the Securities Act of 1933, as amended (the “Securities Act”).
This Warrant and all Warrant Shares issued upon exercise of this Warrant (unless registered under the Securities Act) shall be stamped
or imprinted with a legend in substantially the following form:
“THIS
WARRANT AND THE SECURITIES ISSUABLE UPON EXERCISE OF THIS WARRANT HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED
(THE “ACT”), OR QUALIFIED UNDER ANY STATE OR FOREIGN SECURITIES LAWS AND MAY NOT BE OFFERED FOR SALE, SOLD, PLEDGED,
HYPOTHECATED, OR OTHERWISE TRANSFERRED OR ASSIGNED UNLESS (I) A REGISTRATION STATEMENT COVERING SUCH SHARES IS EFFECTIVE UNDER THE ACT
AND IS QUALIFIED UNDER APPLICABLE STATE AND FOREIGN LAW OR (II) THE TRANSACTION IS EXEMPT FROM THE REGISTRATION AND PROSPECTUS DELIVERY
REQUIREMENTS UNDER THE ACT AND THE QUALIFICATION REQUIREMENTS UNDER APPLICABLE STATE AND FOREIGN LAW AND, IF THE CORPORATION REQUESTS,
AN OPINION SATISFACTORY TO THE CORPORATION TO SUCH EFFECT HAS BEEN RENDERED BY COUNSEL.”
(b) Representations
of the Holder. In connection with the issuance of this Warrant, the Holder specifically represents, as of the date hereof, to the Company
by acceptance of this Warrant as follows:
(i) The
Holder is an “accredited investor” as defined in Rule 501(a) of Regulation D promulgated under the Securities Act. The Holder
is acquiring this Warrant and the Warrant Shares to be issued upon exercise hereof for investment for its own account and not with a
view towards, or for resale in connection with, the public sale or distribution of this Warrant or the Warrant Shares, except pursuant
to sales registered or exempted under the Securities Act.
(ii) The
Holder understands and acknowledges that this Warrant and the Warrant Shares to be issued upon exercise hereof are “restricted
securities” under the federal securities laws inasmuch as they are being acquired from the Company in a transaction not involving
a public offering and that, under such laws and applicable regulations, such securities may be resold without registration under the
Securities Act only in certain limited circumstances. In addition, the Holder represents that it is familiar with Rule 144 under the
Securities Act, as presently in effect, and understands the resale limitations imposed thereby and by the Securities Act.
(iii) The
Holder acknowledges that it can bear the economic and financial risk of its investment for an indefinite period, and has such knowledge
and experience in financial or business matters that it is capable of evaluating the merits and risks of the investment in the Warrant
and the Warrant Shares. The Holder has had an opportunity to ask questions and receive answers from the Company regarding the terms and
conditions of the offering of the Warrant and the business, properties, prospects, and financial condition of the Company.
11. Warrant
Register. The Company shall keep and properly
maintain at its principal executive offices books for the registration of the Warrant and any transfers thereof. The Company may deem
and treat the Person in whose name the Warrant is registered on such register as the Holder thereof for all purposes, and the Company
shall not be affected by any notice to the contrary, except any assignment, division, combination, or other transfer of the Warrant effected
in accordance with the provisions of this Warrant.
10
12. Notices.
All notices, requests, consents, claims, demands, waivers, and other communications hereunder shall be in writing and shall be deemed
to have been given: (a) when delivered by hand (with written confirmation of receipt); (b) when received by the addressee if sent by
a nationally recognized overnight courier (receipt requested); (c) on the date sent by email of a PDF document (with evidence or confirmation
of transmission) if sent during normal business hours of the recipient, and on the next Business Day if sent after normal business hours
of the recipient; or (d) on the third day after the date mailed, by certified or registered mail, return receipt requested, postage prepaid.
Such communications must be sent to the respective parties at the addresses indicated below (or at such other address for a party as
shall be specified in a notice given in accordance with this Section 12). Actual notice is effective as notice in all instances.
If
to the Company:
Elroy Air, Inc.
550
Eagle Ct, #440
Byron, CA 94514
Email: andrew@elroyair.com
Attention: Andrew Clare
with a copy (which will not constitute notice) to:
DLA Piper LLP (US)
3203
Hanover St Suite 100
Palo Alto, CA 94304
Email: josh.seidenfeld@us.dlapiper.com
Attention: Josh Seidenfeld, Esq.
If to the Holder:
[HOLDER ADDRESS]
Email: [EMAIL ADDRESS]
Attention: [TITLE OF OFFICER]
with a
copy which will not constitute notice to:
[HOLDER LAW FIRM]
Email: [EMAIL ADDRESS]
Attention:
[ATTORNEY NAME]
13. Cumulative
Remedies. Except to the extent expressly
provided in Section 7 to the contrary, the rights and remedies provided in this Warrant are cumulative and are not exclusive of,
and are in addition to and not in substitution for, any other rights or remedies available at law, in equity or otherwise. Without limiting
any other provision of this Warrant or the Purchase Agreement, if the Company willfully and knowingly fails to comply with any provision
of this Warrant, which results in any material damages to the Holder, the Company shall pay to the Holder such amounts as shall be sufficient
to cover any costs and expenses including, but not limited to, reasonable attorneys’ fees, including those of appellate proceedings,
incurred by the Holder in collecting any amounts due pursuant hereto or in otherwise enforcing any of its rights, powers or remedies
hereunder.
14. Equitable
Relief. Each of the Company and the Holder
acknowledges that a breach or threatened breach by such party of any of its obligations under this Warrant would give rise to irreparable
harm to the other party hereto for which monetary damages would not be an adequate remedy and hereby agrees that in the event of a breach
or a threatened breach by such party of any such obligations, the other party hereto shall, in addition to any and all other rights and
remedies that may be available to it in respect of such breach, be entitled to equitable relief, including a restraining order, an injunction,
specific performance, and any other relief that may be available from a court of competent jurisdiction.
15. Entire
Agreement. This Warrant, together with the
Purchase Agreement, constitutes the sole and entire agreement of the parties to this Warrant with respect to the subject matter contained
herein, and supersedes all prior and contemporaneous understandings and agreements, both written and oral, with respect to such subject
matter. In the event of any inconsistency between the statements in the body of this Warrant and the Purchase Agreement, the statements
in the body of this Warrant shall control.
16. Successor
and Assigns. This Warrant and the rights
evidenced hereby shall be binding upon and shall inure to the benefit of the parties hereto and the successors of the Company and the
successors and permitted assigns of the Holder. Such successors and/or permitted assigns of the Holder shall be deemed to be a Holder
for all purposes hereunder.
17. No
Third-Party Beneficiaries. This Warrant is
for the sole benefit of the Company and the Holder and their respective successors and, in the case of the Holder, permitted assigns
and nothing herein, express or implied, is intended to or shall confer upon any other Person any legal or equitable right, benefit, or
remedy of any nature whatsoever, under or by reason of this Warrant.
18. Headings.
The headings in this Warrant are for reference only and shall not affect the interpretation of this Warrant.
11
19. Amendment
and Modification; Waiver. The Related Warrants,
including this Warrant, may be amended with the written consent of the Required Holders, provided, however, and notwithstanding anything
in this Warrant or the Related Warrants to the contrary, no provision of the Related Warrants, including this Warrant, shall be amended
to the extent any such amendment would (i) disproportionately, materially and adversely modify any rights of any holder of Related Warrants
(as compared to the rights of the other holders of Related Warrants) or (ii) impose any additional financial obligations or liabilities
on a holder of Related Warrants, in each case, unless any such holder of a Related Warrant shall have previously consented in writing
to such amendment or voted to approve such amendment at a meeting. No consideration shall be offered or paid to any holder of Related
Warrants to amend or consent to a waiver or modification of any provision of the Related Warrants unless the same consideration is also
offered to all of the holders of Related Warrants. For clarification purposes, this provision constitutes a separate right granted to
each holder of Related Warrants by the Company and negotiated separately by each holder of Related Warrants, and is intended for the
Company to treat the holders of Related Warrants as a group and shall not in any way be construed as the holders of Related Warrants
acting in concert or as a group with respect to the purchase, disposition or voting of securities or otherwise. No waiver by the Company
or the Holder of any of the provisions hereof shall be effective unless explicitly set forth in writing and signed by the party so waiving.
No waiver by any party shall operate or be construed as a waiver in respect of any failure, breach, or default not expressly identified
by such written waiver, whether of a similar or different character, and whether occurring before or after that waiver. No failure to
exercise, or delay in exercising, any rights, remedy, power, or privilege arising from this Warrant shall operate or be construed as
a waiver thereof; nor shall any single or partial exercise of any right, remedy, power, or privilege hereunder preclude any other or
further exercise thereof or the exercise of any other right, remedy, power, or privilege.
20. Severability.
If any term or provision of this Warrant is invalid, illegal, or unenforceable in any jurisdiction, such invalidity, illegality, or unenforceability
shall not affect any other term or provision of this Warrant or invalidate or render unenforceable such term or provision in any other
jurisdiction.
21. Governing
Law. This Warrant, and all claims or causes
of action based upon, arising out of, or related to this Warrant, shall be governed by, and construed in accordance with, the Laws of
the State of Delaware, without giving effect to principles or rules of conflict of Laws to the extent such principles or rules would
require or permit the application of Laws of another jurisdiction.
22. Submission
to Jurisdiction. Any proceeding or Legal
Proceeding based upon, arising out of or related to this Warrant must be brought in the Court of Chancery of the State of Delaware (or,
to the extent such court does not have jurisdiction, in the United States District Court for the District of Delaware and to the extent
such court does not have subject matter jurisdiction, the Superior Court of the State of Delaware), and each of the parties irrevocably
(i) submits to the exclusive jurisdiction of each such court in any such proceeding or Legal Proceeding, (ii) waives any objection it
may now or hereafter have to personal jurisdiction, venue or to convenience of forum, (iii) agrees that all claims in respect of the
proceeding or Legal Proceeding shall be heard and determined only in any such court, and (iv) agrees not to bring any proceeding or Legal
Proceeding arising out of or relating to this Warrant or the transactions contemplated hereby in any other court. Nothing herein contained
shall be deemed to affect the right of any party to serve process in any manner permitted by Law or to commence Legal Proceedings or
otherwise proceed against any other party in any other jurisdiction, in each case, to enforce judgments obtained in any Legal Proceeding,
suit or proceeding brought pursuant to this Section 22.
23. WAIVER
OF JURY TRIAL. EACH PARTY ACKNOWLEDGES
AND AGREES THAT ANY CONTROVERSY WHICH MAY ARISE UNDER THIS WARRANT IS LIKELY TO INVOLVE COMPLICATED AND DIFFICULT ISSUES, AND THEREFORE
EACH SUCH PARTY HEREBY IRREVOCABLY, UNCONDITIONALLY AND VOLUNTARILY WAIVES ANY RIGHT SUCH PARTY MAY HAVE TO A TRIAL BY JURY IN RESPECT
OF ANY ACTION, SUIT OR PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS WARRANT.
24. Counterparts.
This Warrant may be executed in counterparts, each of which shall be deemed an original, but all of which together shall be deemed to
be one and the same agreement. A signed copy of this Warrant delivered by facsimile, email, or other means of electronic transmission
shall be deemed to have the same legal effect as delivery of an original signed copy of this Warrant.
25. No
Strict Construction. This Warrant shall be construed without regard to any presumption or rule requiring construction or interpretation
against the party drafting an instrument or causing any instrument to be drafted.
[signature
page follows]
12
IN
WITNESS WHEREOF, the Company has duly executed this Warrant on the Original Issue Date.
ELROY AIR, INC.
By:
Name:
Andrew Clare
Title:
Chief Executive Officer
[Signature Page to Warrant for Common Stock
– Elroy Air, Inc]
Accepted and agreed,
[HOLDER NAME]
By:
[NAME]
[TITLE]
[Signature Page to Warrant for Common Stock
– Elroy Air, Inc]
EXHIBIT
A
NOTICE
OF EXERCISE
To:
Attn:
Email:
(1)
The undersigned hereby elects to purchase ________ Warrant Shares of the Company pursuant to the terms of the attached Warrant (only
if exercised in full), and tenders herewith payment of the exercise price in full, together with all applicable transfer taxes, if any.
(2)
Payment shall take the form of (check applicable box):
☐ in
lawful money of the United States; or
☐ if
permitted the cancellation of such number of Warrant Shares as is necessary, in accordance with the formula set forth in subsection 3(b),
to exercise this Warrant with respect to the maximum number of Warrant Shares purchasable pursuant to the cashless exercise procedure
set forth in subsection 3(b).
(3)
Please issue said Warrant Shares in the name of the undersigned or in such other name as is specified below:
The
Warrant Shares shall be delivered to the following DWAC Account Number:
(4) Accredited
Investor. The undersigned is an “accredited investor” as defined in Regulation D promulgated under the Securities Act
of 1933, as amended.
[SIGNATURE
OF HOLDER]
Name of Investing Entity:___________________________________________________________________
Signature of Authorized
Signatory of Investing Entity:___________________________________________________________________
Name of Authorized Signatory:________________________________________________________________
Title of Authorized Signatory:________________________________________________________________
Date:____________________________________________________________________
EXHIBIT
B
FORM
OF PUBCO WARRANT
EXHIBIT
C
ASSIGNMENT
FORM
(To
assign the foregoing Warrant, execute this form and supply required information. Do not use this form to purchase shares.)
FOR
VALUE RECEIVED, the foregoing Warrant and all rights evidenced thereby are hereby assigned to
Name:
Address:
Phone Number:
Email Address:
Dated: _______________ __,
______
Holder’s Signature:
Holder’s Address:
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Local phone number for entity.
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Boolean flag that is true when the Form 8-K filing is intended to satisfy the filing obligation of the registrant as pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act.
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Boolean flag that is true when the Form 8-K filing is intended to satisfy the filing obligation of the registrant as pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act.
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Title of a 12(b) registered security.
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Name of the Exchange on which a security is registered.
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-Name Exchange Act
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Boolean flag that is true when the Form 8-K filing is intended to satisfy the filing obligation of the registrant as soliciting material pursuant to Rule 14a-12 under the Exchange Act.
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Trading symbol of an instrument as listed on an exchange.
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Boolean flag that is true when the Form 8-K filing is intended to satisfy the filing obligation of the registrant as written communications pursuant to Rule 425 under the Securities Act.
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