Form 8-K

8-K — DATA I/O CORP

Accession: 0001193125-26-428897

Filed: 2026-10-22

Period: 2026-10-18

CIK: 0000351998

SIC: 3825 (INSTRUMENTS FOR MEAS & TESTING OF ELECTRICITY & ELEC SIGNALS)

Item: Entry into a Material Definitive Agreement

Item: Completion of Acquisition or Disposition of Assets

Item: Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant

Item: Unregistered Sales of Equity Securities

Item: Amendments to Articles of Incorporation or Bylaws; Change in Fiscal Year

Item: Regulation FD Disclosure

Item: Other Events

Item: Financial Statements and Exhibits

Documents

8-K — d176225d8k.htm (Primary)

EX-2.1 (d176225dex21.htm)

EX-3.1 (d176225dex31.htm)

EX-10.1 (d176225dex101.htm)

EX-10.2 (d176225dex102.htm)

EX-10.3 (d176225dex103.htm)

EX-10.4 (d176225dex104.htm)

EX-99.1 (d176225dex991.htm)

GRAPHIC (g176225dsp213.jpg)

XML — IDEA: XBRL DOCUMENT (R1.htm)

8-K

8-K (Primary)

Filename: d176225d8k.htm · Sequence: 1

8-K

2026-10-18 --12-11 0000351998 false 0000351998 2026-10-18 2026-10-18

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

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): October 18, 2026

Data I/O Corporation

(Exact name of registrant as specified in its charter)

Washington

0-10394

91-0864123

(State or other jurisdiction of incorporation)

(Commission File Number)

(IRS Employer Identification No.)

6645 185th Ave. N.E., Suite 100, Redmond, WA 98052

(Address of principal executive offices, including zip code)

(425) 881-6444

(Registrant’s telephone number, including area code)

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))

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 ☐

Items reported in this filing:

Item 1.01 Entry into a Material Definitive Agreement.

Item 2.01 Completion of Acquisition or Disposition of Assets.

Item 2.03 Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant.

Item 3.02 Unregistered Sales of Equity Securities.

Item 5.03 Amendments to Articles of Incorporation or Bylaws; Change in Fiscal Year.

Item 7.01 Regulation FD Disclosure.

Item 8.01 Other Events.

Item 9.01 Financial Statements and Exhibits.

Item 1.01 Entry into a Material Definitive Agreement.

The information set forth in Item 8.01 below relating to the Stock Purchase Agreement of the Acquisition and the Securities Purchase Agreement, Notes and Registration Rights Agreement of the Private Placement (as these capitalized terms are defined below) is incorporated by reference into this Item 1.01 of this Current Report on Form 8-K.

Item 2.01 Completion of Acquisition or Disposition of Assets.

The information set forth in Item 8.01 below relating to the completion of the Acquisition is incorporated by reference into this Item 2.01 of this Current Report on Form 8-K.

Item 2.03 Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant.

The information set forth in Item 8.01 below relating to the Securities Purchase Agreement, Notes and Registration Rights Agreement of the Private Placement is incorporated by reference into this Item 2.03 of this Current Report on Form 8-K.

Item 3.02 Unregistered Sales of Equity Securities.

The information set forth in Item 8.01 below relating to the issuance of securities pursuant to the Stock Purchase Agreement and securities in the Securities Purchase Agreement is incorporated by reference into this Item 3.02 of this Current Report on Form 8-K.

The securities were issued and sold in reliance upon an exemption from the registration requirements of the Securities Act of 1933, as amended (the “Securities Act”), pursuant to the exemption for transactions by an issuer not involving any public offering under Section 4(a)(2) of the Securities Act and/or Regulation D under the Securities Act (“Regulation D”), and in reliance on similar exemptions under applicable state laws. The Preferred Stock and/or Common Stock (as these capitalized terms are defined below), as applicable, issuable upon conversion of the Notes are expected to be exempt from the registration requirements of the Securities Act, pursuant to Section 3(a)(9) of the Securities Act, and in reliance on any similar exemptions under applicable state laws.

Each of the Purchasers (as defined below) represented that it is an accredited investor within the meaning of Rule 501(a) of Regulation D or a qualified institutional buyer as that term is defined in Rule 144A(a) under the Securities Act and acquired the securities for investment purposes only and not with a view for any future distribution or sale in violation of applicable securities laws. The securities were offered without any general solicitation by the Company (as defined below) or its representatives.

Item 5.03 Amendments to Articles of Incorporation or Bylaws; Change in Fiscal Year.

On October 19, 2026, the Company filed the Certificate of Designation (as defined below) with the Secretary of State of Washington thereby creating the Preferred Stock. The information set forth in Item 8.01 below relating to the Preferred Stock and Certificate of Designation is incorporated by reference into this Item 5.03 of this Current Report on Form 8-K.

Item 7.01 Regulation FD Disclosure.

On October 21, 2026, the Company issued a press release entitled “Data I/O Completes Transformational Acquisition of V-TEK, Anticipated to Double Revenue”, attached hereto as Exhibit 99.1.

The information contained in the press release attached hereto is being furnished and shall not be deemed filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liability of that section, and shall not be incorporated by reference into any registration statement or other document filed under the Securities Act or the Exchange Act, except as shall be expressly set forth by specific reference in such filing.

Item 8.01 Other Events.

The Acquisition

On October 18, 2026, Data I/O Corporation (the “Company”) entered into a Stock Purchase Agreement (the “Stock Purchase Agreement”) with V-Tek Holdings, LLC (the “Seller”), William S. Karol, the William S. Karol Family Trust and Janice Hodson, pursuant to which the Company agreed to acquire all of the issued and outstanding shares of common stock of V-Tek, Inc. and A&J Programming, Inc. (the “Acquisition”). The Acquisition was completed on October 20, 2026.

Terms of the Stock Purchase Agreement

Pursuant to the Stock Purchase Agreement, the aggregate purchase price for the Acquisition was $23.0 million, consisting of $20.0 million in cash and $3.0 million in shares of the Company’s common stock, no par value, valued at $2.68 per share, subject to customary adjustments for working capital, cash, indebtedness and transaction expenses.

The Stock Purchase Agreement provides for $1.3 million of the purchase price to be deposited into escrow to secure certain indemnification obligations of the Seller and contains customary representations, warranties, covenants and indemnification provisions. Pursuant to the Stock Purchase Agreement, the Company agreed to file a registration statement covering the resale of the securities within 30 calendar days following the date of the Stock Purchase Agreement and to use reasonable best efforts to cause such registration statement to become effective within 75 calendar days following such date.

The foregoing description of the Stock Purchase Agreement does not purport to be complete and is qualified in its entirety by reference to the full text of the Stock Purchase Agreement, which is filed as Exhibit 2.1 hereto and incorporated herein by reference.

The Private Placement

In connection with the Acquisition, on October 19, 2026, the Company entered into a Securities Purchase Agreement (the “Securities Purchase Agreement”) with the purchasers identified therein (the “Purchasers”) pursuant to which the Company agreed to issue and sell approximately $13.25 million of securities consisting of: (i) 746,266 shares of the Company’s common stock, no par value per share (the “Common Stock”), and (ii) convertible debentures of the Company totaling an aggregate amount of approximately $11.25 million (the “Notes”) convertible into either Common Stock or shares of the Company’s Series C Convertible Preferred Stock (the “Preferred Stock”), with the Notes convertible into Preferred Stock referred to herein as the “Preferred Notes” (such offering, the “Private Placement”). The Private Placement closed on October 20, 2026.

In connection with the Private Placement, the Company entered into a Placement Agency Agreement with Ladenburg Thalmann & Co. Inc. (the “Placement Agent”) pursuant to which the Company agreed to pay the Placement Agent (i) a cash fee equal to 7.0% of the gross proceeds received by the Company in the Offering; (ii) a management fee equal to 1.0% of the gross proceeds received by the Company in the Offering; and (iii) reimbursement of the Placement Agent’s expenses in an amount up to $75,000.

Terms of the Securities Purchase Agreement

Pursuant to the Securities Purchase Agreement, the purchase price for the Common Stock was $2.68 per share. The gross proceeds from the Private Placement were approximately $13.25 million, before deducting placement-agent fees and other offering expenses. The Company intends to use the net proceeds to fund a portion of the Acquisition, for working capital and general corporate purposes. The Securities Purchase Agreement restricts the use of proceeds for certain purposes, including the redemption of the Company’s equity securities, repayment of indebtedness (other than trade payables in the ordinary course), and settlement of outstanding litigation.

Under the Securities Purchase Agreement, the Company agreed, among other things, to: (1) reserve sufficient authorized and unissued shares of Common Stock for issuance pursuant to the Private Placement and upon conversion of the Notes and Preferred Stock; (2) apply to list the applicable shares on the Company’s principal trading market and use commercially reasonable efforts to maintain the listing of its Common Stock; (3) subject to specified exceptions, refrain from issuing or agreeing to issue Common Stock or common-stock equivalents, or file certain registration statements, until 30 days following the “Effective Date” (as defined in the Securities Purchase Agreement); and (4) subject to certain exceptions, refrain from entering into variable-rate financing transactions until six months following the Effective Date.

The Securities Purchase Agreement also contains customary representations, warranties, covenants, indemnification obligations and closing conditions.

The foregoing description of the Securities Purchase Agreement does not purport to be complete and is qualified in its entirety by reference to the full text of the form of Securities Purchase Agreement, which is filed as Exhibit 10.1 to this Current Report on Form 8-K and incorporated herein by reference.

Terms of the Notes

The five-year Notes mature on October 20, 2031, unless earlier converted, and bears interest at a rate of 5.0% per annum, payable semiannually on November 1 and May 1, beginning on the first such date after the original issue date of the Notes, on each conversion date (as to that principal amount then being converted), and on the maturity date. On each anniversary of the original issue date, the interest rate then in effect shall increase by one percentage point effective on such anniversary. The interest is paid in cash. The Purchasers may convert their respective Notes into shares of either Common Stock or Preferred Stock at the conversion price. The conversion price for Common Stock is $2.68 per share of Common Stock. The conversion price for Preferred Stock is $1,000 per share of Preferred Stock. If the Company fails to hold a Shareholder Meeting by the Shareholder Meeting Deadline (as such terms are defined in the Notes), the Company shall pay interest to the Holder on the aggregate unconverted and then outstanding principal amount at the rate of 8% per annum, subject to adjustment provisions of the Notes. Upon an event of default, the default interest rate increases to 18% per annum. If shareholders approve a proposal to be submitted at a special meeting of shareholders, the Notes will automatically convert into either Common Stock or Preferred Stock, as applicable. The shareholder proposal seeks approval of the potential issuance of 20% or more of the Company’s issued and outstanding common stock at prices that may be less than the Nasdaq Minimum Price (as defined by NASDAQ) to the holders of the Notes and of any change of control that may be deemed to occur in connection with such issuance.

The foregoing description of the Notes does not purport to be complete and is qualified in its entirety by reference to the full text of the form of Convertible Debenture for Common Stock, a copy of which is filed herewith as Exhibit 10.2, and the form of Convertible Debenture for Preferred Stock, a copy of which is filed herewith as Exhibit 10.3, both of which are incorporated herein by reference.

Terms of the Series C Convertible Preferred Stock

The Preferred Stock is non-voting, except as required by law. The Stated Value is $1,000 per share. Each share of Preferred Stock is convertible into that number of shares of Common Stock (subject to the limitations set forth in the Certificate of Designation of Preferences, Rights and Limitations of Series C Convertible Preferred Stock (“Certificate of Designation”) relating to limitations on beneficial ownership and the Investor Issuance Cap) determined by dividing the Stated Value of such share of Preferred Stock by the Conversion Price. The initial conversion price is $2.68 per share of common stock and is subject to appropriate adjustment in the event of any stock dividend, stock split, combination or other similar recapitalization with respect to the Common Stock. If the principal amount of the Preferred Note was converted into Preferred Stock, the Stated Value of the Preferred Stock would be convertible into approximately 1.49 million shares of common stock (subject to the limitations set forth in the Certificate of Designation relating to limitations on beneficial ownership and the Investor Issuance Cap).

A copy of the Certificate of Designation is filed herewith as Exhibit 3.1 and incorporated herein by reference.

Terms of the Registration Rights Agreement

The Company entered into a Registration Rights Agreement (“Registration Rights Agreement”) and has agreed to file a registration statement with the Securities and Exchange Commission (“SEC”) within 30 days of entering into the Registration Rights Agreement registering the resale of the shares of common stock to be issued in the Private Placement as well as the common stock issuable upon conversion of the Preferred Stock. The Registration Rights Agreement contains customary indemnification provisions and other customary obligations.

The foregoing description of the Registration Rights Agreement does not purport to be complete and is qualified in its entirety by the full text of the form of Registration Rights Agreement, a copy of which is filed herewith as Exhibit 10.4 and incorporated herein by reference.

Item 9.01 Financial Statements and Exhibits.

(a)

Financial Statements of Business Acquired

To the extent required, the Company intends to file financial statements of the business acquired for the periods specified in Rule 3-05(b) of Regulation S-X within the time period permitted by applicable SEC rules.

(b)

Pro Forma Financial Information

To the extent required, the Company intends to file the pro forma financial information required pursuant to Article 11 of Regulation S-X within the time period permitted by applicable SEC rules.

(d)

Exhibits

Exhibit No.

Description

2.1*

Stock Purchase Agreement dated October 18, 2026

3.1

Certificate of Designation of Preferences, Rights and Limitations of Series C Convertible Preferred Stock

10.1*

Form of Securities Purchase Agreement

10.2

Form of Convertible Debenture for Common Stock

10.3

Form of Convertible Debenture for Preferred Stock

10.4

Form of Registration Rights Agreement

99.1

Press Release: “Data I/O Completes Transformational Acquisition of V-TEK, Anticipated to Double Revenue”

104

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

* Certain appendices and exhibits have been omitted or redacted pursuant to Items 601(a)(5), 601(a)(6), and/or 601(b)(10)(iv) of Regulation S-K. The Company agrees to furnish to the SEC a copy of any omitted appendix or exhibit upon request.

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.

Data I/O Corporation

October 22, 2026

By: /s/ Charles DiBona

Charles DiBona

Chief Financial Officer

EX-2.1

Filename: d176225dex21.htm · Sequence: 2

EX-2.1

Exhibit 2.1

STOCK PURCHASE AGREEMENT

Between

V-TEK HOLDINGS, LLC,

WILLIAM S. KAROL,

WILLIAM S. KAROL FAMILY TRUST,

JANICE HODSON,

And

DATA I/O CORPORATION

dated as of

October 18,

2026

TABLE OF CONTENTS

ARTICLE I DEFINITIONS

ARTICLE II PURCHASE AND SALE

Section 2.01 Purchase and Sale

Section 2.02 Purchase Price

Section 2.03 Transactions to be Effected at the Closing

Section 2.04 Purchase Price Adjustment

Section 2.05 Closing

Section 2.06 Withholding Tax

ARTICLE III REPRESENTATIONS AND WARRANTIES OF SELLER

Section 3.01 Organization and Authority of Seller

Section 3.02 Organization, Authority and Qualification of the Company

Section 3.03 Capitalization

Section 3.04 No Subsidiaries

Section 3.05 No Conflicts; Consents

Section 3.06 Financial Statements

Section 3.07 Undisclosed Liabilities

Section 3.08 Absence of Certain Changes, Events and Conditions

Section 3.09 Material Contracts

Section 3.10 Title to Assets; Real Property

Section 3.11 Condition and Sufficiency of Assets

Section 3.12 Intellectual Property

Section 3.13 Inventory

Section 3.14 Accounts Receivable

Section 3.15 Customers and Suppliers

Section 3.16 Insurance

Section 3.17 Legal Proceedings; Governmental Orders

Section 3.18 Compliance With Laws; Permits

Section 3.19 Environmental Matters

Section 3.20 Employee Benefit Matters

Section 3.21 Employment Matters

Section 3.22 Taxes

Section 3.23 Books and Records

Section 3.24 Related Party Transactions

Section 3.25 Brokers

Section 3.26 Accredited Investor

ARTICLE IV REPRESENTATIONS AND WARRANTIES OF BUYER

Section 4.01 Organization and Authority of Buyer

Section 4.02 No Conflicts; Consents

Section 4.03 Investment Purpose

Section 4.04 Brokers

Section 4.06 Legal Proceedings

Section 4.06 Consideration Shares

ARTICLE V COVENANTS

Section 5.01 Conduct of Business Prior to the Closing

Section 5.02 Access to Information

Section 5.03 No Solicitation of Other Bids

Section 5.04 Notice of Certain Events

Section 5.05 Resignations

Section 5.06 Confidentiality

Section 5.07 Non-Competition; Non-Solicitation

Section 5.08 Governmental Approvals and Consents

Section 5.09 R&W Insurance Policy

Section 5.10 Books and Records

Section 5.11 Closing Conditions

Section 5.12 Public Announcements

Section 5.13 Further Assurances

ARTICLE VI TAX MATTERS

Section 6.01 Tax Covenants

Section 6.02 Termination of Existing Tax Sharing Agreements

Section 6.03 Reserved

Section 6.03 Straddle Period

Section 6.04 Contests

Section 6.05 Cooperation and Exchange of Information

Section 6.10 Overlap

ARTICLE VII CONDITIONS TO CLOSING

Section 7.01 Conditions to Obligations of All Parties

Section 7.02 Conditions to Obligations of Buyer

Section 7.03 Conditions to Obligations of Seller

ARTICLE VIII INDEMNIFICATION

Section 8.01 Survival

Section 8.02 Indemnification By Seller

Section 8.03 Indemnification By Buyer

Section 8.04 Certain Limitations

Section 8.05 Indemnification Procedures

Section 8.06 Payments; Indemnification Escrow Fund; R&W Insurance Policy

Section 8.07 Tax Treatment of Indemnification Payments

Section 8.08 Effect of Investigation

Section 8.09 Exclusive Remedies

ARTICLE IX TERMINATION

Section 9.01 Termination

Section 9.02 Effect of Termination

ARTICLE X MISCELLANEOUS

Section 10.01 Expenses

Section 10.02 Notices

Section 10.03 Interpretation

Section 10.04 Headings

Section 10.05 Severability

Section 10.06 Entire Agreement

Section 10.07 Successors and Assigns

Section 10.08 No Third-Party Beneficiaries

Section 10.09 Amendment and Modification; Waiver

Section 10.10 Governing Law; Submission to Jurisdiction; Waiver of Jury Trial

Section 10.11 Specific Performance

Section 10.12 Counterparts

STOCK PURCHASE AGREEMENT

This Stock Purchase Agreement (this “Agreement”), dated as of October 18, 2026, is entered into between V-Tek Holdings, LLC, a Delaware limited liability company (the “Seller”), William S. Karol (“Karol”), William S. Karol Family Trust (the “Karol Trust”), and

Janice Hodson (“Hodson” and together with Karol and the Karol Trust, the “Members”) and Data I/O Corporation (“Buyer”).

RECITALS

WHEREAS, Seller

owns all of the issued and outstanding shares of stock in V-Tek, Inc., a Delaware corporation (“V-Tek”);

WHEREAS, Seller owns all of the issued and outstanding shares of stock in A&J Programming, Inc., a Delaware corporation

(“A&J”); and

WHEREAS, Seller wishes to sell to Buyer, and Buyer wishes to purchase from Seller, all of the stock in

V-Tek and A&J, subject to the terms and conditions set forth herein;

NOW, THEREFORE, in

consideration of the mutual covenants and agreements hereinafter set forth and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:

ARTICLE I

DEFINITIONS

The following terms have the meanings specified or referred to in this Article I:

“A&J 2024 APA” means that certain Asset Purchase Agreement dated as of April 26, 2024 by and among A&J,

A&J Assembly, Inc. and the other parties named therein.

“A&J Stock” means all of the issued and outstanding

shares of stock of A&J.

“Acquisition Proposal” has the meaning set forth in Section 5.03(a).

“Accounting Principles” means: (a) the specified accounting policies, methodologies, and procedures set forth on

Exhibit A; (b) to the extent not inconsistent with clause (a), and only to the extent consistent with GAAP, the same accounting methods, practices, principles, policies and procedures as applied in the preparation of the Year End Financial

Statements; and (c), if not otherwise addressed by clauses (a) or (b), GAAP. In the event of conflict: clause (a) shall take precedence over clauses (b) and (c) and clause (b) shall take precedence over clause (c).

“Accredited Investor” means an “accredited investor” as defined in Rule 501(a) promulgated under the U.S.

Securities Act.

“Action” means any claim, action, cause of action, demand, lawsuit, arbitration, inquiry, audit,

notice of violation, proceeding, litigation, citation, summons, subpoena or investigation of any nature, civil, criminal, administrative, regulatory or otherwise, whether at law or in equity.

“Adjustment Deficit” has the meaning set forth in

Section 2.04(d)(i).

“Adjustment Surplus” has the meaning set forth in Section 2.04(d)(ii).

“Affiliate” of a Person means any other Person that directly or indirectly, through one or more intermediaries, controls,

is controlled by, or is under common control with, such Person. The term “control” (including the terms “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.

“Affordable Care Act” means, collectively, the Patient Protection and Affordable Care Act, as amended by the Health Care

and Education Reconciliation Act of 2010.

“Agreement” has the meaning set forth in the preamble.

“Ancillary Documents” means all agreements, documents, instruments or certificates delivered or required to be delivered by

any party pursuant to this Agreement, including the Escrow Agreement and the R&W Insurance Policy.

“Balance Sheet”

has the meaning set forth in Section 3.06.

“Balance Sheet Date” has the meaning set forth in Section 3.06.

“Benefit Plan” has the meaning set forth in Section 3.20.

“Business Day” means any day except Saturday, Sunday or any other day on which commercial banks located in Seattle, WA or

in the State of Minnesota are authorized or required by Law to be closed for business.

“Buyer” has the meaning set

forth in the preamble.

“Buyer Closing Statement” has the meaning set forth in Section 2.04(b)(i).

“Buyer Common Stock” means the common stock, no par value, of Buyer.

“Buyer Financial Statements” has the meaning set forth in Section 4.08.

“Buyer Indemnitees” has the meaning set forth in Section 8.02.

“Buyer’s Accountants” means Grant Thornton LLP.

“Cap” has the meaning set forth in Section 8.04(a).

“Cash” means cash and cash equivalents, as determined in accordance with GAAP, plus/minus (i) checks, wires or other

amounts due to/from the Companies in process and (ii) Restricted Cash. For the avoidance of doubt, Cash may be a negative amount.

“CERCLA” means the Comprehensive Environmental Response, Compensation,

and Liability Act of 1980, as amended by the Superfund Amendments and Reauthorization Act of 1986, 42 U.S.C. §§ 9601 et seq.

“Closing” has the meaning set forth in Section 2.05.

“Closing Cash” means all Cash of the Companies as of 12:01 am Central Time on the Closing Date.

“Closing Date” has the meaning set forth in Section 2.05.

“Closing Date Payment” has the meaning set forth in Section 2.04(a)(i).

“Closing Indebtedness” means all Indebtedness of the Companies outstanding as of 12:01 am Central Time on the Closing Date.

“Closing Indebtedness Certificate” means a certificate executed by the Seller certifying an itemized list of all

outstanding Indebtedness as of 12:01 am Central Time on the Closing Date and the Person to whom such outstanding Indebtedness is owed and an aggregate total of such outstanding Indebtedness.

“Closing Transaction Expenses” means the unpaid Transaction Expenses as of 12:01 am Central Time on the Closing Date.

“Closing Transaction Expenses Certificate” means a certificate executed by the Seller, certifying the amount of Transaction

Expenses remaining unpaid as of 12:01 am Central Time on the Closing Date (including an itemized list of each such unpaid Transaction Expense with a description of the nature of such expense and the Person to whom such expense is owed).

“Closing Working Capital” means: (a) the Current Working Capital Assets of the Company, less (b) the Current

Working Capital Liabilities of the Company, determined as of 12:01 am Central Time on the Closing Date.

“Closing Working Capital

Statement” has the meaning set forth in Section 2.04(b)(i).

“Code” means the Internal Revenue Code of

1986, as amended.

“Company” means each of V-Tek and A&J.

“Company Data” means data, databases, data compilations and related information owned or purported to be owned by the

Company or in which the Company claims proprietary rights, including data generated by or for the Company in connection with any Company Product, but excluding Personal Information and Customer Technology.

“Companies” means V-Tek and A&J.

“Company Intellectual Property” means all Intellectual Property that is owned or purported to be owned by the Company.

“Company IP Agreements” means, all licenses, sublicenses, consent to use

agreements, settlements, coexistence agreements, covenants not to sue, waivers, releases, permissions, domain name registration agreements, terms of service, source code escrow agreements, development agreements, support and maintenance agreements,

hosting agreements, data processing agreements and other Contracts, whether written or oral, relating to Intellectual Property, Software, firmware, Protected Data, Company Products, Company Data or Company IT Systems to which the Company is a party,

beneficiary or otherwise bound.

“Company IP Registrations” means all Company Intellectual Property that is subject to

any issuance, registration or application by or with any Governmental Authority or authorized private registrar in any jurisdiction, including issued patents, registered trademarks, domain names and copyrights, and pending applications for any of

the foregoing.

“Company IT Systems” means all Software, computer hardware, servers, networks, platforms, peripherals,

and similar or related items of automated, computerized, or other information technology (IT) networks and systems (including telecommunications networks and systems for voice, data and video) owned, leased, licensed, or used (including through

cloud-based or other third-party service providers) by the Company.

“Company Products” means all products, systems,

equipment, components, hardware, firmware, Software, devices and services that the Company currently or formerly has designed, developed, manufactured, programmed, assembled, tested, sold, leased, licensed, distributed, provided, supported,

maintained or otherwise made available, including any Software or firmware used to operate, configure, program, test, maintain or support any of the foregoing.

“Consideration Share Price” means $2.68 per share of Buyer Common Stock.

“Consideration Shares Amount” means $3,000,000.

“Consideration Shares” means the number of shares of Buyer Common Stock equal to the Consideration Shares Amount divided by

the Consideration Share Price.

“Contracts” means all contracts, leases, deeds, mortgages, licenses, instruments,

notes, commitments, undertakings, indentures, joint ventures and all other agreements, commitments and legally binding arrangements, whether written or oral.

“Copyrights” has the meaning set forth in the definition of Intellectual Property.

“Current Working Capital Assets” means accounts receivable, inventory and prepaid expenses, but excluding

(a) Google-specific inventories with part number 5125-0011, (b) the portion of any prepaid expense of which Buyer will not receive the benefit following the Closing, (c) Restricted Cash, (d) amounts receivable by the Company from

Seller or any of Seller’s Affiliates, (e) assets or contra liabilities relating to Indebtedness such as debt issuance costs, (f) deferred tax assets, and (g) income Tax assets, each as determined in accordance with the

Accounting Principles.

“Current Working Capital Liabilities” means accounts payable, accrued

Taxes, accrued expenses, unearned revenue and other current liabilities but excluding (a) deferred Tax liabilities, (b) Transaction Expenses, (c) the current portion of any Indebtedness of the Company, (d) payables to any of the

Company’s Affiliates, directors, employees, officers or stockholders and any of their respective Affiliates, (e) unearned revenue balance that has already been paid to the Company, all determined in accordance with the Accounting

Principles.

“Data Protection Laws” means, to the extent applicable to the Company, Laws that relate to (a) data

privacy; (b) data protection; (c) information security; (d) data breach notification; (e) unfair or deceptive data practices; (f) trespass, computer crime and other Laws governing unauthorized access to or use of electronic

data; (g) call or electronic monitoring, interception or recording, or any outbound calling and text messaging, telemarketing and email marketing; (h) online behavioral advertising or tracking technologies; (i) state biometric privacy

laws; (j) medical information privacy and confidentiality laws; and (k) data broker laws.

“Direct Claim” has

the meaning set forth in Section 8.05(c).

“Disclosure Schedules” means the Disclosure Schedules delivered by

Seller and Buyer concurrently with the execution and delivery of this Agreement.

“Disputed Amounts” has the meaning

set forth in Section 2.04(c)(iii).

“Dollars” or “$” means the lawful currency of the United

States.

“Drop Dead Date” has the meaning set forth in Section 9.01(b).

“Encumbrance” means any charge, claim, community property interest, pledge, condition, equitable interest, lien (statutory

or other), option, security interest, mortgage, easement, encroachment, right of way, right of first refusal, or restriction of any kind, including any restriction on use, voting, transfer, receipt of income or exercise of any other attribute of

ownership.

“Environmental Attributes” means any emissions and renewable energy credits, energy conservation credits,

benefits, offsets and allowances, emission reduction credits or words of similar import or regulatory effect (including emissions reduction credits or allowances under all applicable emission trading, compliance or budget programs, or any other

federal, state or regional emission, renewable energy or energy conservation trading or budget program) that have been held, allocated to or acquired for the development, construction, ownership, lease, operation, use or maintenance of the Company

as of: (i) the date of this Agreement; and (ii) future years for which allocations have been established and are in effect as of the date of this Agreement.

“Environmental Claim” means any Action, Governmental Order, lien, fine, penalty, or, as to each, any settlement or judgment

arising therefrom, by or from any Person alleging liability of whatever kind or nature (including liability or responsibility for the costs of enforcement proceedings, investigations, cleanup, governmental response, removal or remediation, natural

resources damages, property damages, personal injuries, medical monitoring, penalties, contribution, indemnification and injunctive relief) arising out of, based on or resulting from: (a) the presence of, Release of, or exposure to, any

Hazardous Materials; or (b) any actual or alleged non-compliance with any Environmental Law or term or condition of any Environmental Permit.

“Environmental Law” means any applicable Law, and any Governmental Order

or binding agreement with any Governmental Authority: (a) relating to pollution (or the cleanup thereof) or the protection of natural resources, endangered or threatened species, human health or safety, or the environment (including ambient or

indoor air, soil, surface water or groundwater, or subsurface strata); or (b) concerning the presence of, exposure to, or the management, manufacture, use, containment, storage, recycling, reclamation, reuse, treatment, generation, discharge,

transportation, processing, production, disposal or remediation of any Hazardous Materials. The term “Environmental Law” includes, without limitation, the following (including their implementing regulations and any state analogs): the

Comprehensive Environmental Response, Compensation, and Liability Act of 1980, as amended by the Superfund Amendments and Reauthorization Act of 1986, 42 U.S.C. §§ 9601 et seq.; the Solid Waste Disposal Act, as amended by the Resource

Conservation and Recovery Act of 1976, as amended by the Hazardous and Solid Waste Amendments of 1984, 42 U.S.C. §§ 6901 et seq.; the Federal Water Pollution Control Act of 1972, as amended by the Clean Water Act of 1977, 33 U.S.C.

§§ 1251 et seq.; the Toxic Substances Control Act of 1976, as amended, 15 U.S.C. §§ 2601 et seq.; the Emergency Planning and Community Right-to-Know

Act of 1986, 42 U.S.C. §§ 11001 et seq.; the Clean Air Act of 1966, as amended by the Clean Air Act Amendments of 1990, 42 U.S.C. §§ 7401 et seq.; the Federal Insecticide, Fungicide and Rodenticide Act of 1910, as amended, 7

U.S.C. §§ 136 et seq.; the Oil Pollution Act of 1990, as amended, 33 U.S.C. §§ 2701 et seq.; and the Occupational Safety and Health Act of 1970, as amended, 29 U.S.C. §§ 651 et seq.

“Environmental Notice” means any written directive, notice of violation or infraction, or notice respecting any

Environmental Claim relating to actual or alleged non-compliance with any Environmental Law or any term or condition of any Environmental Permit.

“Environmental Permit” means any Permit, letter, clearance, consent, waiver, closure, exemption, decision or other action

required under or issued, granted, given, authorized by or made pursuant to Environmental Law.

“Environmental

Professional” means an individual licensed by a Governmental Authority to act on behalf of such Governmental Authority to oversee environmental site investigation and remediation.

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

“ERISA Affiliate” means all employers, trades, or businesses (whether or not incorporated) that would be treated

together with the Company or any of its Affiliates as a “single employer” within the meaning of Section 414 of the Code.

“Escrow Agent” means Wilmington Trust, N.A.

“Escrow Agreement” means that certain escrow agreement entered into by

and among Seller, Buyer and Escrow Agent as of the Closing.

“Estimated Closing Working Capital” has the meaning set

forth in Section 2.04(a)(ii).

“Estimated Closing Working Capital Statement” has the meaning set forth in

Section 2.04(a)(ii).

“Exchange Act” means the Securities Exchange Act of 1934, as amended.

“Financial Statements” has the meaning set forth in Section 3.06.

“GAAP” means United States generally accepted accounting principles in effect from time to time.

“Government Contracts” has the meaning set forth in Section 3.09(a)(viii).

“Governmental Authority” means any federal, state, local or foreign government or political subdivision thereof, or any

agency or instrumentality of such government or political subdivision, or any self-regulated organization or other non-governmental regulatory authority or quasi-governmental authority, including Environmental

Professionals (to the extent that the rules, regulations or orders of such organization or authority have the force of Law), or any arbitrator, court or tribunal of competent jurisdiction.

“Governmental Order” means any order, writ, judgment, injunction, decree, stipulation, determination or award entered by or

with any Governmental Authority.

“Hazardous Materials” means: (a) any material, substance, chemical, waste,

product, derivative, compound, mixture, solid, liquid, mineral or gas, in each case, whether naturally occurring or manmade, that is hazardous, acutely hazardous, toxic, or words of similar import or regulatory effect under Environmental Laws; and

(b) any petroleum or petroleum-derived products, radon, radioactive materials or wastes, asbestos in any form, lead or lead-containing materials, urea formaldehyde foam insulation, and polychlorinated biphenyls and per- and poly-fluoroalkyl substances (PFAS) and other emerging contaminants.

“Indebtedness” means, without duplication and with respect to the Company, all (a) indebtedness for borrowed money;

(b) obligations for the deferred or unpaid purchase price of property, assets, business, securities or services including earn-outs, seller notes, holdbacks, post-closing true-up obligations, and other

similar payments payable with respect to the acquisition of any business, assets or securities (other than Current Working Capital Liabilities taken into account in the calculation of Closing Working Capital), (c) long or short-term obligations

evidenced by notes, bonds, debentures or other similar instruments; (d) obligations under any interest rate, currency swap or other hedging agreement or arrangement; (e) lease obligations required to be capitalized under GAAP;

(f) reimbursement obligations under any letter of credit, banker’s acceptance, performance bonds, surety bonds or similar credit transactions; (g) guarantees made by the Company on behalf of any third party in respect of obligations

of the kind referred to in the foregoing clauses, (h) 53% of the unearned revenue balance that has already been paid to the Company, (i) warranty accruals, (j) accrued personal time off in excess of 140 hours for any individual,

(k) accrued bonuses and commissions, (l) 50% of any outstanding retention agreement payments, (m) any declared or unpaid dividends, distributions, or other amounts owed to the Seller or any of its Affiliates, (n) unpaid severance

obligations including the employer’s portion of any employment Taxes associated with such payment, (o) unpaid income Taxes, (p) liabilities secured by a Encumbrance upon any property or assets owned by the Company, (a) through

(p); and (q) any unpaid interest, prepayment penalties, premiums, costs and fees that would arise or become due as a result of the prepayment of any of the obligations referred to in the foregoing clauses (a) through (p).

“Indemnified Party” has the meaning set forth in Section 8.05.

“Indemnifying Party” has the meaning set forth in Section 8.05.

“Indemnity Escrow Amount” means $50,000.

“Independent Accountant” has the meaning set forth in Section 2.04(c)(iii).

“Insurance Policies” has the meaning set forth in Section 3.16.

“Intellectual Property” means any and all rights in, arising out of, or associated with any of the following in any

jurisdiction throughout the world: (a) issued patents and patent applications (whether provisional or non-provisional), including divisionals, continuations, continuations-in-part, substitutions, reissues, reexaminations, extensions, or restorations of any of the foregoing, and other Governmental Authority-issued indicia of invention ownership (including

certificates of invention, petty patents, and patent utility models) (“Patents”); (b) trademarks, service marks, brands, certification marks, logos, trade dress, trade names, and other similar indicia of source or origin, together

with the goodwill connected with the use of and symbolized by, and all registrations, applications for registration, and renewals of, any of the foregoing (“Trademarks”); (c) copyrights and works of authorship, whether or not

copyrightable, and all registrations, applications for registration, and renewals of any of the foregoing (“Copyrights”); (d) internet domain names, uniform resource locators, social media account or user names, handles, and other

identifiers, and all associated websites and web pages, social media profiles and pages, and all content and data thereon or relating thereto; (e) mask works, and all registrations, applications for registration, and renewals thereof;

(f) industrial designs, and all Patents, registrations, applications for registration, and renewals thereof; (g) trade secrets, know-how, inventions (whether or not patentable), discoveries,

improvements, technology, business and technical information, databases, data compilations and collections, tools, methods, processes, techniques, and other confidential and proprietary information and all rights therein (“Trade

Secrets”); (h) computer programs, operating systems, applications, firmware, and other code, including all source code, object code, application programming interfaces, data files, databases, protocols, specifications, and other

documentation thereof (“Software”); (i) rights of publicity; and (j) all other intellectual or industrial property and proprietary rights.

“Interim Balance Sheet” has the meaning set forth in Section 3.06.

“Interim Balance Sheet Date” has the meaning set forth in

Section 3.06.

“Interim Financial Statements” has the meaning set forth in Section 3.06.

“Knowledge of Seller” or “Seller’s Knowledge” or any

other similar knowledge qualification, means the actual knowledge of Mitch Jacobs and Hodson, or the constructive knowledge as would have been obtained by such individual after reasonable inquiry, including, as applicable based on the subject matter

of the inquiry, the direct reports of Mitch Jacobs.

“Law” means any statute, law, ordinance, regulation, rule, code,

order, constitution, treaty, common law, judgment, decree, other requirement or rule of law of any Governmental Authority.

“Liabilities” has the meaning set forth in Section 3.07.

“Licensed Intellectual Property” means all Intellectual Property in which the Company holds any rights or interests granted

by other Persons, including Seller or any of its Affiliates.

“Losses” means losses, damages, Liabilities,

deficiencies, Actions, judgments, interest, awards, penalties, fines, costs or expenses of whatever kind, including reasonable attorneys’ fees and the cost of enforcing any right to indemnification hereunder and the cost of pursuing any

insurance providers; provided, however, that “Losses” shall not include punitive damages, except to the extent actually awarded to a Governmental Authority or other third party.

“Material Adverse Effect” means any event, occurrence, fact, condition or change that is, or could reasonably be expected

to become, individually or in the aggregate, materially adverse to (a) the business, results of operations, condition (financial or otherwise) or assets of the Company, or (b) the ability of Seller to consummate the transactions

contemplated hereby on a timely basis; provided, however, that “Material Adverse Effect” shall not include any event, occurrence, fact, condition or change, directly or indirectly, arising out of or attributable to:

(i) general economic or political conditions; (ii) conditions generally affecting the industries in which the Company operates; (iii) any changes in financial or securities markets in general; (iv) acts of war (whether or not

declared), armed hostilities or terrorism, or the escalation or worsening thereof; (v) any action required or permitted by this Agreement or any action taken (or omitted to be taken) with the written consent of or at the written request of

Buyer; (vi) any changes in applicable Laws or accounting rules, including GAAP; (vii) the public announcement, pendency or completion of the transactions contemplated by this Agreement; (viii) any natural or man-made disasters or acts of God; (ix) any epidemics, pandemics, or disease outbreaks or any worsening thereof; or (x) any failure by the Company to meet any internal or published projections, forecasts

or revenue or earnings predictions (provided that the underlying causes of such failures (subject to the other provisions of this definition) shall not be excluded); provided further, however, that any event, occurrence, fact, condition or

change referred to in clauses (i) through (iv) immediately above shall be taken into account in determining whether a Material Adverse Effect has occurred or could reasonably be expected to occur to the extent that such event, occurrence, fact,

condition or change has a disproportionate effect on the Company compared to other participants in the industries in which the Company conducts its businesses.

“Malicious Code” means any virus, Trojan horse, worm, time bomb, back

door, drop dead device, malware, ransomware, spyware, disabling code or other Software routine or hardware component designed or intended to permit unauthorized access, disable, erase, damage, disrupt, impair or otherwise materially and adversely

affect the operation of any Software, firmware, Company Product, Company IT System or data; provided that Malicious Code does not include license keys, activation mechanisms or similar functionality disclosed in the applicable documentation and used

in the ordinary course of business to enforce license or subscription terms.

“Material Contracts” has the meaning set

forth in Section 3.09(a).

“Material Customers” has the meaning set forth in Section 3.15(a).

“Material Suppliers” has the meaning set forth in Section 3.15(b).

“Multiemployer Plan” has the meaning set forth in Section 3.20(c)/Section 3.20(d).

“NASDAQ” means the NASDAQ Capital Market stock exchange.

“Non-U.S. Benefit Plan” has the meaning set forth in Section 3.20.

“Organizational Documents” means (a) in the case of a Person that is a corporation, its articles or certificate of

incorporation and its by-laws, regulations or similar governing instruments required by the laws of its jurisdiction of formation or organization; (b) in the case of a Person that is a partnership, its

articles or certificate of partnership, formation or association, and its partnership agreement (in each case, limited, limited liability, general or otherwise); (c) in the case of a Person that is a limited liability company, its articles or

certificate of formation or organization, and its limited liability company agreement or operating agreement; and (d) in the case of a Person that is none of a corporation, partnership (limited, limited liability, general or otherwise), limited

liability company or natural person, its governing instruments as required or contemplated by the laws of its jurisdiction of organization.

“Open Source Software” means any Software or other material that is distributed, licensed or made available under any open

source, copyleft, community source, freeware or similar license or distribution model, including any license approved by the Open Source Initiative or any Creative Commons license, and including the GNU General Public License, GNU Lesser General

Public License, GNU Affero General Public License, Mozilla Public License, Eclipse Public License, Common Development and Distribution License, Apache License, BSD License and MIT License.

“Patents” has the meaning set forth in the definition of Intellectual Property.

“Permits” means all permits, licenses, franchises, approvals, authorizations, registrations, certificates, variances and

similar rights obtained, or required to be obtained, from Governmental Authorities.

“Permitted Encumbrances” has the

meaning set forth in Section 3.10(a).

“Person” means an individual, corporation, partnership, joint venture,

limited liability company, Governmental Authority, unincorporated organization, trust, association or other entity.

“Personal

Information” means any data that identifies, relates to, describes, is reasonably capable of being associated with, or could reasonably be linked, directly or indirectly, with a particular individual, household or device.

“Platform Agreements” has the meaning set forth in Section 3.12(h).

“Post-Closing Adjustment” has the meaning set forth in Section 2.04(b)(ii).

“Post-Closing Tax Period” means any taxable period beginning after the Closing Date and, with respect to any taxable period

beginning before and ending after the Closing Date, the portion of such taxable period beginning after the Closing Date.

“Pre-Closing Tax Period” means any taxable period ending on or before the Closing Date and, with respect to any taxable period beginning before and ending after the Closing Date, the portion of such taxable

period ending on and including the Closing Date.

“Pre-Closing Taxes” has the

meaning set forth in Section 6.03.

“Privacy and Security Requirements” means, to the extent applicable to the

Company, (i) any Data Protection Laws, (ii) industry standards to which the Company has publicly committed, including, if applicable, the Payment Card Industry Data Security Standard issued by the PCI Security Standards Council, as it may

be amended from time to time, and rules of self-regulatory organizations, including the Digital Advertising Alliance, (iii) applicable provisions of Contracts between the Company and any Person that are applicable to the Processing of Protected

Data, and (iv) publicly available Privacy Policies of the Company.

“Privacy Policies” means all published,

posted, and written internal policies, notices, statements and other commitments relating to the Company’s Processing of Protected Data.

“Process” or “Processing” means any operation performed on Protected Data, including the creation,

collection, use (including for the purposes of sending telephone calls, text messages and emails), storage, maintenance, processing, recording, distribution, transfer, transmission, receipt, import, export, protection, safeguarding, access, disposal

or disclosure or other activity regarding Protected Data (whether electronically or in any other form or medium).

“Protected

Data” means any and all business information and data, including Company confidential information, proprietary information, or Personal Information, that is Processed by or on behalf of the Company and all data for which the Company is

required by Law, Contract or Privacy Policies to safeguard and/or keep confidential or private, including all such data collected or Processed on behalf of customers of the Company, or transmitted to the Company by customers of the Company or

Persons that interact with the Company.

“Purchase Price” has the meaning set forth in Section 2.02.

“Qualified Retirement Plan” has the meaning set forth in

Section 3.20(c).

“R&W Insurance Policy” means the buyer-side representation and warranty insurance policy no.

BC-BS-2026-100247-1481 to be issued by BlueChip Underwriting Services LLC to Buyer on terms and conditions set forth on Exhibit B.

“Real Property” means the real property owned by, or leased or subleased to, the Company, together with all buildings,

structures and facilities located thereon.

“Registrable Securities” has the meaning set forth in Section 5.19.

“Release” means any actual or threatened release, spilling, leaking, pumping, pouring, emitting, emptying,

discharging, injecting, escaping, leaching, dumping, abandonment, disposing or allowing to escape or migrate into or through the environment (including, without limitation, ambient or indoor air, surface water, groundwater, land surface or

subsurface strata or within any building, structure, facility or fixture).

“Representative” means, with respect to any

Person, any and all directors, managers, members, officers, employees, consultants, financial advisors, counsel, accountants and other agents of such Person.

“Resolution Period” has the meaning set forth in Section 2.04(c)(ii).

“Restricted Business” means (i) high-value packaging services, supplies and equipment for the “tape and

reel” and semiconductor industries, and (i) programming integrated circuits with customer owned code within the foregoing described industries.

“Restricted Cash” means cash or cash equivalents that are not freely usable and accessible by the Company because it is

subject to restrictions or limitations on use or access by Law or Contract, including cash held in escrow or as a security or other deposit held for or on behalf of a third party.

“Restricted Period” has the meaning set forth in Section 5.07(a).

“Review Period” has the meaning set forth in Section 2.04(c)(i).

“Rule 144” has the meaning set forth in Section 5.19.

“SEC” means the U.S. Securities and Exchange Commission.

“SEC Reports” means (a) the Buyer’s most recently filed Annual Report on

Form 10-K and (b) all Quarterly Reports on Form 10-Q or Current Reports on Form 8-K filed or furnished (as

applicable) by the Buyer following the end of the most recent fiscal year for which an Annual Report on Form 10-K has been filed and prior to the execution of this Agreement, together in each case with

any documents incorporated by reference therein or exhibits thereto.

“Seller Indemnitees” has the meaning set forth in

Section 8.03.

“Seller’s Accountants” means CliftonLarsonAllenLLP.

“Security Incident” means (a) any unauthorized access to, acquisition of, use of, disclosure of, modification of or

compromise of Protected Data; (b) any unauthorized access to, use of or compromise of any Company IT System; (c) any unauthorized loss, destruction, corruption or unavailability of Protected Data that is material to the Company or requires

the Company to give notice under applicable Law or Contract, or (d) any material unauthorized interruption, modification or corruption of any Company IT System, or any material phishing, ransomware, denial-of-service or similar cyber incident affecting the Company.

“Software”

has the meaning set forth in the definition of Intellectual Property.

“Special Indemnity Escrow Amount” means

$1,250,000.

“Statement of Objections” has the meaning set forth in Section 2.04(c)(ii).

“Stock” means the V-Tek Stock and the A&J Stock.

“Straddle Period” has the meaning set forth in Section 6.04.

“Target Working Capital” means $5,567,000.

“Taxes” means all foreign, federal, national, provincial, state, city or municipal taxes, levies, duties, assessments,

reassessments and other charges in the nature of a tax, including income tax, profits tax, capital gains tax, gross receipts tax, corporation tax, mining tax, royalties, sales and use tax, wage tax, payroll tax, workers’ compensation levy,

capital tax, stamp duty, franchise tax, real and personal property tax, land transfer tax, transfer tax, customs or excise duty, excise tax, turnover or value added tax on goods sold or services rendered, goods and services tax, withholding tax,

social security, government pension plan and employment insurance charges or retirement contributions, unclaimed property taxes, escheat taxes or other taxes of any kind whatsoever (including withholding on amounts paid to or by any Person), whether

or not disputed, and including any obligation to indemnify or otherwise assume the tax Liability of any other Person, together with any interest, additions or penalties with respect thereto and any interest in respect of such additions or penalties.

“Tax Claim” has the meaning set forth in Section 6.05.

“Tax Return” means any filing, return, declaration, report, claim for refund, information return or statement or other

document relating to Taxes, including any schedule, or attachment, supplement, appendix or exhibit thereto, and including any amendment thereof.

“Territory” means each of Minnesota and California.

“Third-Party Claim” has the meaning set forth in Section 8.05(a).

“Trade Secrets” has the meaning set forth in the definition of Intellectual Property.

“Trademarks” has the meaning set forth in the definition of Intellectual Property.

“Transaction Expenses” means all fees and expenses incurred or accrued by

or on behalf of the Company before or on or, with respect to the stock appreciation rights of Seller being paid through the Company’s payroll, after on the Closing Date in connection with (i) the preparation, negotiation and execution of

this Agreement and the Ancillary Documents, and (ii) the performance and consummation of the transactions contemplated hereby and thereby including, but not limited to (a) the fees and disbursements of, or other similar amounts charged by,

counsel retained by the Company; (b) the fees and expenses of, or other similar amounts charged by, any accountants, agents, financial advisors, consultants and experts retained by the Company; (c) any investment banking, brokerage or

finder’s fees and related expenses; (d) the costs, fees and expenses of Seller; (e) any retention, transaction, phantom equity, change of control payments, bonuses (other than ordinary course

year-end bonuses) or other similar arrangements which become payable to any Person solely as a result of the occurrence of the Closing, plus in each case the employer’s share of Taxes payable with

respect to all such amounts, and any reimbursements or “gross up” amounts payable or made, in connection with any of the foregoing, calculated as if such amounts were paid on the Closing Date, and (f) to the extent obtained, the

costs, fees and expenses of obtaining any extension (or “tail”) of the directors’ and officers’ liability insurance coverage of the Company’s existing and/or former directors’ and officers’ insurance

policies and the Company’s existing and/or former fiduciary liability insurance policies.

“Transfer Taxes” has

the meaning set forth in Section 6.01(a).

“Undisputed Amounts” has the meaning set forth in

Section 2.04(c)(iii).

“Union” has the meaning set forth in Section 3.21(b).

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

“V-Tek Stock” means all of the issued and outstanding shares of stock of V-Tek.

“WARN Act” means the federal Worker Adjustment and Retraining Notification

Act of 1988, and similar state, local and foreign laws related to plant closings, relocations, mass layoffs and employment losses.

“Year End Financial Statements” has the meaning set forth in Section 3.06.

ARTICLE II

PURCHASE AND

SALE

Section 2.01 Purchase and Sale. Subject to the terms and conditions set forth herein, at

the Closing, Seller shall sell to Buyer, and Buyer shall purchase from Seller, the Stock, free and clear of all Encumbrances, for the consideration specified in Section 2.02.

Section 2.02 Purchase Price. The aggregate purchase price for the Stock shall be $23,000,000.00, payable and

subject to adjustment as otherwise described in this Agreement, including, for clarity, pursuant to Section 2.04 (the “Purchase Price”).

Section 2.03 Transactions to be Effected at the Closing.

(a) At the Closing, Buyer shall:

(i) deliver to Seller:

(A) the Closing Date Payment in cash;

(B) share certificate(s) or Direct Registration System Advice(s) representing the Consideration Shares

registered in accordance with the instructions provided to Buyer by Seller at least 48 hours prior to the Closing; and

delivered by Buyer at or prior to the Closing pursuant to Section 7.03 of this Agreement.

(ii) pay, on

behalf of the Company or Seller, the following amounts:

(A) Indebtedness of the Company to be paid at

Closing, by wire transfer of immediately available funds to the accounts and in the amounts specified on the Closing Indebtedness Certificate;

(B) any Transaction Expenses unpaid at Closing, by wire transfer of immediately available funds to the accounts

and in the amounts specified on the Closing Transaction Expenses Certificate; and

the Special Indemnity Escrow Amount to be held and disbursed in accordance with the Escrow Agreement.

(D) to the Escrow Agent, the Indemnity Escrow Amount to be held and disbursed in accordance with the Escrow

Agreement.

(b) At the Closing, Seller shall deliver to Buyer:

(i) an assignment evidencing the Stock to Buyer, duly executed by Seller (the “Assignment”);

and

(ii) the Ancillary Documents, duly executed by Seller, and all other agreements, documents, instruments

or certificates required to be delivered by Seller at or prior to the Closing pursuant to Section 7.02 of this Agreement.

Section 2.04 Purchase Price Adjustment.

(a) Closing Adjustment.

(i) At the Closing, the Purchase Price shall be adjusted in

the following manner:

(A) either (1) an increase by the amount, if any, by which the Estimated

Closing Working Capital (as determined in accordance with Section 2.04(a)(ii)) is greater than the Target Working Capital, or (2) a decrease by the amount, if any, by which the Estimated Closing Working Capital (as determined in accordance

with Section 2.04(a)(ii)) is less than the Target Working Capital;

(B) a decrease by the outstanding

Indebtedness of the Company as of 12:01 am Central Time on the Closing Date (which shall in no event be an amount less than the amounts paid by Buyer pursuant to Section 2.03(a)(ii)(A));

Closing Date (which shall in no event be an amount less than the amounts paid by Buyer pursuant to Section 2.03(a)(ii)(B));

(D) an increase by the amount of Cash of the Company as of 12:01 am Central Time on the Closing Date (as

determined in accordance with Section 2.04(a)(ii)); and

(E) a decrease by the amount of the

Consideration Shares Amount.

The net amount after giving effect to the adjustments listed above shall be the

“Closing Date Payment.”

(ii) At least three (3) Business Days before the Closing,

Seller shall prepare and deliver to Buyer a statement setting forth its good faith estimate, as of 11:59 pm Central Time on the day immediately prior to the Closing Date, of (A) Closing Working Capital (“Estimated Closing Working

Capital”), which statement shall contain an estimated balance sheet of the Company as of such day and time (“Estimated Closing Working Capital Statement”), and a certificate of the Seller certifying that the Estimated

Closing Working Capital Statement was prepared in accordance with the Accounting Principles; (B) Cash (“Estimated Closing Cash”), (C) the Closing Transaction Expenses (“Estimated Closing Transaction

Expenses”), and (D) the Closing Indebtedness (“Estimated Closing Indebtedness”), in each case, in reasonable detail with appropriate backup calculations and supporting documentation. A sample calculation of Working

Capital is attached as Exhibit C (the “Working Capital Methodology”).

(b) Post-Closing

Adjustment.

(i) Within ninety (90) days after the Closing Date,

Buyer shall prepare and deliver to Seller a statement setting forth its calculation of: (A) Closing Working Capital; (B) Closing Cash; (C) Closing Indebtedness; and (D) Closing Transaction Expenses (the “Buyer

Closing Statement”), calculated and determined in the same manner as is set forth in Section 2.04(a)(ii).

(ii) The final post-closing adjustment shall be an amount equal to Closing Working Capital, Closing Cash,

Closing Indebtedness and Closing Transaction Expenses (as finally determined in the aggregate on a “net-net” basis in accordance with Section 2.04(c)), minus the Estimated Closing

Working Capital, Estimated Closing Cash, Estimated Closing Indebtedness and Closing Transaction Expenses (as delivered by Seller in accordance with Section 2.04(a)(ii) and determined in the aggregate on a

“net-net” basis) (the “Post-Closing Adjustment”).

(i) Examination. After receipt of the Buyer Closing Statement, Seller shall have thirty (30) days (the

“Review Period”) to review the Closing Working Capital, Closing Cash, Closing Indebtedness and Closing Transaction Expenses. During the Review Period, Seller and Seller’s Accountants shall have full access to the books and

records of the Company, the personnel of, and work papers prepared by, Buyer and/or Buyer’s Accountants to the extent that they relate to the Buyer Closing Statement and to such historical financial information (to the extent in Buyer’s

possession) relating to the Buyer Closing Statement as Seller may reasonably request for the purpose of reviewing the Buyer Closing Statement and to prepare a Statement of Objections (defined below), provided, that such access shall be in a

manner that does not reasonably interfere with the normal business operations of Buyer or the Company.

(ii)

Objection. On or prior to the last day of the Review Period, Seller may object to the Buyer Closing Statement by delivering to Buyer a written statement setting forth Seller’s objections in reasonable detail, indicating each

disputed item or amount and the basis for Seller’s disagreement therewith (the “Statement of Objections”). If Seller fail to deliver the Statement of Objections before the expiration of the Review Period, the Buyer Closing

Statement and the Post-Closing Adjustment, as the case may be, reflected in the Buyer Closing Statement shall be deemed to have been accepted by Seller. If Seller delivers the Statement of Objections before the expiration of the Review Period, Buyer

and Seller shall negotiate in good faith to resolve such objections within thirty (30) days after the delivery of the Statement of Objections (the “Resolution Period”), and, if the same are so resolved within the Resolution

Period, the Post-Closing Adjustment and the Buyer Closing Statement with such changes as may have been previously agreed in writing by Buyer and Seller, shall be final and binding.

(iii) Resolution of Disputes. If Seller and Buyer fail to

reach an agreement with respect to all of the matters set forth in the Statement of Objections before expiration of the Resolution Period, then any amounts remaining in dispute (“Disputed Amounts” and any amounts not so disputed,

the “Undisputed Amounts”), Buyer and Seller shall appoint by mutual agreement the office of an impartial nationally recognized firm of independent certified public accountants other than Seller’s Accountants or Buyer’s

Accountants (the “Independent Accountant”) who, acting as experts and not arbitrators, shall resolve the Disputed Amounts only and make any adjustments to the Post-Closing Adjustment, as the case may be, and the Buyer Closing

Statement. The parties hereto agree that all adjustments shall be made without regard to materiality. The Independent Accountant shall only decide the specific items under dispute by the parties and their decision for each Disputed Amount must be

within the range of values assigned to each such item in the Buyer Closing Statement and the Statement of Objections, respectively.

(iv) Fees of the Independent Accountant. The fees and expenses of the Independent Accountant shall be paid by

Seller, on the one hand, and by Buyer, on the other hand, based upon the percentage that the amount actually contested but not awarded to Seller or Buyer, respectively, bears to the aggregate amount actually contested by Seller and Buyer.

(v) Determination by Independent Accountant. The Independent Accountant shall make a determination as soon as

practicable within thirty (30) days (or such other time as the parties hereto shall agree in writing) after their engagement, and their resolution of the Disputed Amounts and their adjustments to the Buyer Closing Statement and/or the

Post-Closing Adjustment shall be conclusive and binding upon the parties hereto.

(d) Payments of

Post-Closing Adjustment.

(i) If the Post-Closing Adjustment is a negative number (the absolute value of

such amount, the “Adjustment Deficit”), Seller shall, within five (5) Business Days after the final determination of the Post-Closing Adjustment, pay to Buyer by wire transfer of immediately available funds an amount equal to

the Adjustment Deficit.

(ii) If the Post-Closing Adjustment is a positive number (the “Adjustment

Surplus”), Buyer shall, within five (5) Business Days after the final determination of the Post-Closing Adjustment, pay to Seller by wire transfer of immediately available funds an amount equal to the Adjustment Surplus.

(iii) For the avoidance of doubt, each applicable item of revenue, expense, credit or debit in the Closing

Statement shall be accounted for without duplication among Working Capital, Indebtedness, Transaction Expenses and Cash, and each such item of revenue expense shall be accounted for only once in respect of all of the foregoing components of the

Closing Statement.

(e) Adjustments for Tax Purposes. Any payments made pursuant

to Section 2.04 shall be treated as an adjustment to the Purchase Price by the parties for all applicable Tax purposes, unless otherwise required by applicable Law.

Section 2.05 Closing. Subject to the terms and conditions of this Agreement, the purchase and sale of

the Stock contemplated hereby shall take place at a closing (the “Closing”) to be held at 9:00 a.m. PT, no later than two (2) Business Days after the last of the conditions to Closing set forth in ARTICLE VII have been

satisfied or waived (other than conditions which, by their nature, are to be satisfied on the Closing Date), remotely by electronic exchange of documents and signatures, or at such other time or on such other date or at such other place as Seller

and Buyer may mutually agree upon in writing (the day on which the Closing takes place being the “Closing Date”).

Section 2.06 Withholding Tax. Buyer and the Company shall be entitled to deduct and withhold or cause

to be deducted and withheld, from any portion of the Purchase Price and any other amounts payable hereunder all Taxes that Buyer and the Company are required to be deducted and withheld under any provision of applicable Tax Law; provided, however,

that Buyer and the Company shall use commercially reasonable efforts to provide Seller at least five (5) Business Days’ notice of its intent to withhold under this Section 2.06 (except with respect to any withholding on amounts that

are compensation) and shall work in good faith with Seller to mitigate any such withholding. To the extent amounts are so deducted and withheld, all such amounts shall be treated as for all purposes as having been paid to Seller hereunder.

ARTICLE III

REPRESENTATIONS AND WARRANTIES OF SELLER AND MEMBERS

Except as set forth in the correspondingly numbered Section of the Disclosure Schedules, each of the Seller and the Members, jointly and

severally, represent and warrant to Buyer that the statements contained in this Article III are true and correct as of the date hereof.

Section 3.01 Organization and Authority of Seller. Seller is a limited liability company organized, validly

existing and in good standing under the Laws of the state of Delaware. Seller has full power and authority to enter into this Agreement and the Ancillary Documents to which Seller is or will be a party, to carry out its obligations hereunder and to

consummate the transactions contemplated hereby. The execution and delivery by Seller of this Agreement and any Ancillary Document to which Seller is or will be a party, the performance by Seller of its obligations hereunder, and the consummation by

Seller of the transactions contemplated hereby have been duly authorized by all requisite company action on the part of Seller. This Agreement has been duly executed and delivered by Seller, and (assuming due authorization, execution and delivery by

Buyer) this Agreement constitutes a legal, valid and binding obligation of Seller, enforceable against Seller in accordance with its terms. When each Ancillary Document to which Seller is or will be a party have been duly executed and delivered by

Seller (assuming due authorization, execution and delivery by each other party thereto), each Ancillary Document will constitute a legal and binding obligation of Seller enforceable against it in accordance with its terms.

Section 3.02 Organization, Authority and Qualification of

the Company. Each of V-Tek and A&J is a corporation duly organized, validly existing and in good standing under the Laws of the state of Delaware and has full power and authority to own, operate or

lease the properties and assets now owned, operated or leased by it and to carry on its business as it has been and is currently conducted. Section 3.02 of the Disclosure Schedules sets forth each jurisdiction in which V-Tek and A&J are licensed or qualified to do business, and each of V-Tek and A&J is duly licensed or qualified to do business and is in good standing in each

jurisdiction in which the properties owned or leased by it or the operation of its business as currently conducted makes such licensing or qualification necessary. All actions taken by either V-Tek or A&J

in connection with this Agreement and the Ancillary Documents to which it will be a party will be duly authorized on or prior to the Closing.

Section 3.03 Capitalization.

(a) The authorized capital stock of V-Tek consists of 5,000 shares of

common stock, par value $0.001 per share, of which 100 shares are issued and outstanding and constitute the V-Tek Stock. The authorized capital stock of A&J consists of 5,000 shares of common stock, par

value $0.0001 per share, of which 1,000 shares are issued and outstanding and constitute the A&J Stock. All of the Stock have been duly authorized, validly issued, fully paid and non-assessable, and are

owned of record and beneficially by Seller, free and clear of all Encumbrances. Upon consummation of the transactions contemplated by this Agreement, Buyer shall own all of the Stock, free and clear of all Encumbrances.

(b) All of the Stock was issued in compliance with applicable Laws. None of the Stock was issued in violation of

any agreement, arrangement or commitment to which Seller or the Company is a party or is subject to or in violation of any preemptive or similar rights of any Person.

authorized options, warrants, convertible securities or other rights, agreements, arrangements or commitments of any character relating to the capital stock of the Company or obligating Seller or the Company to issue or sell any shares of capital

stock of, or any other interest in, the Company. The Company does not have outstanding or authorized any stock appreciation, phantom stock, profit participation or similar rights. There are no voting trusts, stockholder agreements, proxies or other

agreements or understandings in effect with respect to the voting or transfer of any of the Stock.

Section 3.04 No Subsidiaries. Except as set forth on Section 3.04 of the Disclosure Schedules, the

Company does not own, or have any capital stock or other equity, ownership or profit sharing interests in any other Person, or the right or obligation to acquire any capital stock or other equity, ownership or profit sharing interests in any other

Person.

Section 3.05 No Conflicts; Consents. The execution,

delivery and performance by Seller of this Agreement and the Ancillary Documents to which it is or will be a party, and the consummation of the transactions contemplated hereby and thereby, do not and will not: (a) conflict with or result in a

violation or breach of, or default under, any provision of the Organizational Documents of Seller or the Company; (b) conflict with or result in a violation or breach of any provision of any Law or Governmental Order applicable to Seller or the

Company; (c) except as set forth in Section 3.05 of the Disclosure Schedules, require the consent, notice or other action by any Person under, conflict with, result in a violation or breach of, constitute a default or an event that, with

or without notice or lapse of time or both, would constitute a default under, result in the acceleration of or create in any party the right to accelerate, terminate, modify or cancel any Contract to which Seller or the Company is a party or by

which Seller or the Company is bound or to which any of their respective properties and assets are subject (including any Material Contract) or any Permit affecting the properties, assets or business of the Company; or (d) result in the

creation or imposition of any Encumbrance other than Permitted Encumbrances on any properties or assets of the Company. No consent, approval, Permit, Governmental Order, declaration or filing with, or notice to, any Governmental Authority is

required by or with respect to Seller or the Company in connection with the execution and delivery of this Agreement and the Ancillary Documents to which Seller is or will be a party and the consummation of the transactions contemplated hereby and

thereby.

Section 3.06 Financial Statements. Complete copies of the Company’s unaudited financial

statements consisting of the balance sheet of the Company as of December 31, 2025 and 2024 and the related statements of income and retained earnings, members’ equity and cash flow for the years then ended (the “Year End

Financial Statements”), and unaudited financial statements consisting of the balance sheet of the Company as at June 30, 2026 and the related statements of income and retained earnings, members’ equity and cash flow for the six-month period then ended (the “Interim Financial Statements” and together with the Year End Financial Statements, the “Financial Statements”) are included in

Section 3.06 of the Disclosure Schedules. The Financial Statements have been prepared in accordance with GAAP applied on a consistent basis throughout the period involved, subject, in the case of the Interim Financial Statements, to normal and

recurring year-end adjustments (the effect of which, whether individually or in the aggregate, would not be material to the Company) and the absence of notes (that, if presented, would not differ materially

from those presented in the Year End Financial Statements). The Financial Statements are based on the books and records of the Company, and fairly present, in all material respects, the financial condition of the Company as of the respective dates

they were prepared and the results of the operations of the Company for the periods indicated. The balance sheet of the Company as of December 31, 2025, is referred to herein as the “Balance Sheet” and the date thereof as the

“Balance Sheet Date” and the balance sheet of the Company as of June 30, 2026 is referred to herein as the “Interim Balance Sheet” and the date thereof as the “Interim Balance Sheet

Date”. The Company maintains a standard system of accounting established and administered in accordance with GAAP.

Section 3.07 Undisclosed Liabilities. The Company has no liabilities, obligations or commitments of any

nature whatsoever, asserted or unasserted, known or unknown, absolute or contingent, accrued or unaccrued, matured or unmatured or otherwise (“Liabilities”), except (a) those which are adequately reflected or reserved against

in the Interim Balance Sheet as of the Interim Balance Sheet Date, and (b) those which have been incurred in the ordinary course of business consistent with past practice since the Interim Balance Sheet Date and which are not, individually or

in the aggregate, material in amount to the Company (none of which is a liability for breach of Contract, violation of Law or Action).

Section 3.08 Absence of Certain Changes, Events and

Conditions. Since the January 1, 2026, the business of the Company has been conducted in the ordinary course of business consistent with past practice, and except as set forth on Section 3.08 of the Disclosure Schedules there has not

been, with respect to the Company, any:

(a) event, occurrence or development that has had, or could

reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect;

(b) amendment

of Organizational Documents of the Company;

capital stock in the Company;

(d) issuance, sale or other disposition of any of its capital stock, or grant

of any options, warrants or other rights to purchase or obtain (including upon conversion, exchange or exercise) any of its capital stock;

(e) declaration or payment of any dividends or distributions on or in respect of any of its capital stock or

redemption, purchase or acquisition of its capital stock;

(f) material change in any method of accounting

or accounting practice of the Company, except as required by GAAP or as disclosed in the notes to the Financial Statements;

(g) material change in the Company’s cash management practices and its policies, practices and procedures

with respect to collection of accounts receivable, establishment of reserves for uncollectible accounts, accrual of accounts receivable, inventory control, prepayment of expenses, payment of trade accounts payable, accrual of other expenses,

deferral of revenue and acceptance of customer deposits;

(h) entry into any Contract, except for purchase

orders in the ordinary course of business consistent with past practice, that would constitute a Material Contract;

(i) incurrence, assumption or guarantee of any indebtedness for borrowed money except unsecured current

obligations and Liabilities incurred in the ordinary course of business consistent with past practice;

(j)

transfer, assignment, sale or other disposition of any of the assets shown or reflected in the Balance Sheet or cancellation of any debts or entitlements;

(k) sale, assignment, transfer or other disposition of any Company Intellectual Property or material Company IP

Agreement, or grant of any license, sublicense or other right under any Company Intellectual Property, other than non-exclusive licenses of Company Products and related Company Intellectual Property granted to

customers in the ordinary course of business consistent with past practice;

(l) abandonment or lapse of or failure to maintain in full

force and effect any Company IP Registration, material Company Intellectual Property or material Licensed Intellectual Property, or failure to take or maintain reasonable measures to protect the confidentiality, security or value of any material

Trade Secrets, source code, customer-owned source code or other customer confidential information in the Company’s possession, firmware, programming files or other confidential information included in or relating to the Company Intellectual

Property;

(m) material damage, destruction or loss (whether or not covered by insurance) to its property;

(n) capital investment in, or loan to, any other Person;

(o) acceleration, termination, material modification to or cancellation of any material Contract (including, but

not limited to, any Material Contract) to which the Company is a party or by which it is bound;

(p) material

capital expenditures;

(q) imposition of any Encumbrance (other than a Permitted Encumbrance) upon any of the

Company properties, capital stock or assets, tangible or intangible;

(r) (i) grant of any bonuses,

whether monetary or otherwise, or increase in any wages, salary, severance, pension or other compensation or benefits in respect of its current or former employees, officers, directors, independent contractors or consultants, other than as provided

for in any written agreements or required by applicable Law, (ii) change in the terms of employment for any employee or any termination of any employees for which the aggregate costs and expenses exceed $100,000.00, or (iii) action to

accelerate the vesting or payment of any compensation or benefit for any current or former employee, officer, director, independent contractor or consultant;

(s) hiring or promoting of any person as or to (as the case may be) an officer or hiring or promoting any

employee below officer except to fill a vacancy in the ordinary course of business;

(t) adoption,

modification or termination of any: (i) employment, severance, retention or other agreement with any current or former employee, officer, director, independent contractor or consultant, (ii) Benefit Plan or (iii) collective bargaining

or other agreement with a Union, in each case whether written or oral;

(u) loan to (or forgiveness of any

loan to), or entry into any other transaction with, any of its members or current or former director, officers and employees;

(v) entry into a new line of business or abandonment or discontinuance of existing lines of business;

(w) adoption of any plan of merger, consolidation,

reorganization, liquidation or dissolution or filing of a petition in bankruptcy under any provisions of federal or state bankruptcy Law or consent to the filing of any bankruptcy petition against it under any similar Law;

(x) purchase, lease or other acquisition of the right to own, use or lease any property or assets for an amount

in excess of $100,000.00, individually (in the case of a lease, per annum) or $250,000.00 in the aggregate (in the case of a lease, for the entire term of the lease, not including any option term), except for purchases of inventory or supplies in

the ordinary course of business consistent with past practice;

(y) acquisition by merger or consolidation

with, or by purchase of a substantial portion of the assets or stock of, or by any other manner, any business or any Person or any division thereof;

(z) action by the Company to make, revoke, change or rescind any Tax election, adopt or change any accounting

method, extend or waive any limitation period with respect to any claim or assessment for Taxes, surrender a right to claim a refund of Taxes with respect to the income, operations or property of the Company, enter into any closing agreement,

settlement or compromise of any claim or assessment, initiate a voluntary disclosure or similar procedure, in each case in respect of Taxes, amend any Tax Return or take any position on any Tax Return, take any action, omit to take any action or

enter into any other transaction that would have the effect of increasing the Tax liability or reducing any Tax asset of Buyer in respect of any Post-Closing Tax Period; or

(aa) Contract to do any of the foregoing, or any action or omission that would result in any of the foregoing.

Section 3.09 Material Contracts.

(a) Section 3.09(a) of the Disclosure Schedules lists each of the following Contracts of the Company (such

Contracts, together with all Contracts concerning the occupancy, management or operation of any Real Property (including without limitation, brokerage contracts) listed or otherwise disclosed in Section 3.10(b) of the Disclosure Schedules and

all Company IP Agreements set forth in Section 3.12(b) of the Disclosure Schedules, being “Material Contracts”):

(i) each Contract of the Company, involving aggregate consideration in excess of $100,000.00 and which, in each

case, (A) contain current or outstanding obligations, and (B) cannot be cancelled by the Company without penalty or without more than ninety (90) days’ notice;

(ii) all Contracts (A) that require the Company to purchase its total requirements of any product or

service from a third party, that contain “take or pay” or minimum purchase obligations, or that contain exclusivity, most favored customer or most favored pricing restrictions, or grant any Person a right of first refusal, first offer or

first negotiation with respect to any material Company Product, material Company Intellectual Property or other material asset, and (B) which contain current or outstanding rights or obligations;

(iii) all Contracts (A) that provide for the

indemnification by the Company of any Person or the assumption of any Tax, environmental, Intellectual Property, privacy, cybersecurity, product warranty or other Liability of any Person, and (B) which contain current or outstanding

obligations;

(iv) all Contracts that relate to the acquisition or disposition of any business, a material

amount of stock or assets of any other Person or any real property (whether by merger, sale of stock, sale of assets or otherwise) within the past nine (9) years;

(v) all Contracts with any Material Customer, reseller, broker, distributor, dealer, manufacturer’s

representative, franchise, OEM, private label, agency, sales promotion, market research, marketing consulting and advertising Contracts to which the Company is a party, and which contain current or outstanding obligations; provided, that all

Material Customer Contracts disclosed in Section 3.09(a) of the Disclosure Schedules are as of October 9, 2026;

(vi) all Contracts relating to the sale, license, lease, distribution, support, maintenance, warranty or

servicing of any Company Product, Software or firmware (A) that (I) involve aggregate consideration in excess of $100,000.00, (II) contain material non-standard terms, (III) include source code

escrow or delivery, or (IV) grant any Person ownership of or exclusive rights in any material Company Intellectual Property, and (B) which contain current or outstanding rights or obligations;

(vii) all employment agreements and Contracts with individual independent contractors or consultants to which the

Company is a party and which are not cancellable without material penalty or without more than ninety (90) days’ notice;

(viii) except for Contracts relating to trade payables, all Contracts relating to Indebtedness (including, without

limitation, guarantees) of the Company;

(ix) all Contracts with any Governmental Authority to which the

Company is a party (“Government Contracts”);

(x) all Contracts that limit or purport to

limit the ability of the Company to compete in any line of business or with any Person or in any geographic area or during any period of time;

(xi) any Contracts to which the Company is a party that provide for any joint venture, partnership or similar

arrangement by the Company;

(xii) all Contracts between or among the Company on the one

hand and Seller or any Affiliate of Seller (other than the Company) on the other hand;

(xiii) all collective

bargaining agreements or Contracts with any Union to which the Company is a party;

(xiv) all Contracts with

any Critical Supplier (as defined in Section 3.15(c)) as of October 9, 2026;

(xv) all Contracts

pursuant to which the Company is required to deliver or disclose source code, firmware source code, product designs, manufacturing files, technical documentation or manufacturing know-how to any Person, or

pursuant to which any Person has the right to obtain any of the foregoing upon the occurrence of any event; and

(xvi) any other Contract that is material to the Company and not previously disclosed pursuant to this

Section 3.09.

(b) Each Material Contract is in full force and effect and is a valid and binding

agreement enforceable against the Company and, to Seller’s Knowledge, the other party or parties thereto, in accordance with its terms. None of the Company or, to Seller’s Knowledge, any other party thereto is in material breach of or

material default under (or is alleged to be in breach of or default under), has repudiated or disputed any material obligation under, or has provided or received any notice of breach of, default under, intention to terminate, non-renewal or material reduction in business under, any Material Contract. No event or circumstance has occurred that, with notice or lapse of time or both, would constitute an event of default under any Material

Contract or result in a termination thereof or would cause or permit the acceleration or other changes of any right or obligation or the loss of any benefit thereunder. Complete and correct copies of each Material Contract, including all statements

of work, purchase orders, schedules, exhibits, data processing addenda, service level agreements, modifications, amendments and supplements thereto and waivers thereunder, have been made available to Buyer.

Section 3.10 Title to Assets; Real Property.

(a) The Company has good and valid (and, in the case of owned Real Property, good and marketable fee simple)

title to, or a valid leasehold interest in, all Real Property and personal property and other assets reflected in the Year End Financial Statements or acquired after the Balance Sheet Date, other than properties and assets sold or otherwise disposed

of in the ordinary course of business consistent with past practice since the Balance Sheet Date. All such properties and assets (including leasehold interests) are free and clear of Encumbrances except for the following (collectively referred to as

“Permitted Encumbrances”):

(i) those items set forth in Section 3.10(a) of the

Disclosure Schedules;

(ii) liens for Taxes not yet due and payable;

(iii) mechanics, carriers’, workmen’s, repairmen’s or other like liens arising or incurred in

the ordinary course of business consistent with past practice or amounts that are not delinquent and which are not, individually or in the aggregate, material to the business of the Company;

(iv) easements, rights of way, zoning ordinances and other similar encumbrances affecting Real Property which

are not, individually or in the aggregate, material to the business of the Company; or

(v) other than with

respect to owned Real Property, liens arising under original purchase price conditional sales contracts and equipment leases with third parties entered into in the ordinary course of business consistent with past practice which are not, individually

or in the aggregate, material to the business of the Company.

(b) Section 3.10(b) of the Disclosure

Schedules lists (i) the street address of each parcel of Real Property; (ii) if such property is leased or subleased by the Company, the landlord under the lease, the rental amount currently being paid, and the expiration of the term of

such lease or sublease for each leased or subleased property; and (iii) the current use of such property. With respect to owned Real Property, Seller has delivered or made available to Buyer true, complete and correct copies of the deeds and

other instruments (as recorded) by which the Company acquired such Real Property, and copies of all title insurance policies, opinions, abstracts and surveys in the possession of Seller or the Company and relating to the Real Property. With respect

to leased Real Property, Seller has delivered or made available to Buyer true, complete and correct copies of any leases affecting the Real Property. The Company is not a sublessor or grantor under any sublease or other instrument granting to any

other Person any right to the possession, lease, occupancy or enjoyment of any leased Real Property. The use and operation of the Real Property in the conduct of the Company’s business do not violate in any material respect any Law, covenant,

condition, restriction, easement, license, permit or agreement. To the Seller’s Knowledge, no material improvements constituting a part of the Real Property encroach on real property owned or leased by a Person other than the Company. There

are no Actions pending nor, to the Seller’s Knowledge, threatened against or affecting the Real Property or any portion thereof or interest therein in the nature or in lieu of condemnation or eminent domain proceedings.

Section 3.11 Condition and Sufficiency of Assets. Except as set forth in Section 3.11 of the

Disclosure Schedules, the buildings, plants, structures, furniture, fixtures, machinery, equipment, vehicles and other items of tangible personal property of the Company are structurally sound, are in good operating condition and repair and are

adequate for the uses to which they are being put, and none of such buildings, plants, structures, furniture, fixtures, machinery, equipment, vehicles and other items of tangible personal property is in need of maintenance or repairs except for

ordinary, routine maintenance and repairs that are not material in nature or cost. The buildings, plants, structures, furniture, fixtures, machinery, equipment, vehicles and other items of tangible personal property currently owned or leased by the

Company, together with all other properties and assets of the Company, are sufficient for the continued conduct of the Company’s business after the Closing in substantially the same manner as conducted prior to the Closing and constitute all

of the rights, property and assets necessary to conduct the business of the Company as currently conducted.

Section 3.12 Intellectual Property.

(a) Section 3.12(a) of the Disclosure Schedules contains a correct, current and complete list of:

(i) all Company IP Registrations, specifying as to each, as applicable, the title, mark or design, the record owner and inventor(s), if any, the jurisdiction by or in which it has been issued, registered or filed, the patent, registration or

application serial number, the issue, registration or filing date and the current status; (ii) all unregistered Trademarks included in the Company Intellectual Property; (iii) all proprietary Software and firmware owned or purported to be

owned by the Company, including Software and firmware embedded in, distributed with, or used to operate, configure, program, test, maintain or support any Company Product, identifying for each material item the source code repository or other

location of its source code; (iv) all Company Products; and (v) all Trade Secrets and other material unregistered Company Intellectual Property.

(b) Section 3.12(b) of the Disclosure Schedules contains a correct, current and complete list of all Company

IP Agreements, specifying for each the date, title and parties thereto, and separately identifying the Company IP Agreements: (i) under which the Company is a licensor or otherwise grants to any Person any right or interest relating to any

Company Intellectual Property, Software, firmware, Company Product or Company Data; (ii) under which the Company is a licensee or otherwise is granted any right or interest relating to the Intellectual Property, Software, firmware, products or

services of any Person; (iii) that relate to development, creation, ownership, assignment, hosting, maintenance, support, escrow, disclosure or distribution of any Company Intellectual Property, Company Product, Company Data or Company IT

System; and (iv) that contain any material restriction on the Company’s use, enforcement, licensing, transfer or disclosure of any Company Intellectual Property, Company Product or Company Data. Section 3.12(b) of the Disclosure

Schedules need not list (A) commercially available off-the-shelf Software licenses that are generally available on standard terms, involve aggregate annual fees of

less than $25,000.00 and do not impose material restrictions on the Company’s business, (B) non-exclusive customer licenses granted in the ordinary course of business on the Company’s standard

forms made available to Buyer, or (C) non-disclosure agreements entered into in the ordinary course of business; provided that clauses (B) and (C) do not exclude any agreement that provides for

source code access or escrow, assigns or exclusively licenses material Company Intellectual Property, or contains material non-standard Intellectual Property ownership, data processing or security terms.

Seller has provided Buyer with true and complete copies (or in the case of any oral agreements, a complete and correct written description) of all Company IP Agreements, including all modifications, amendments and supplements thereto and waivers

thereunder. Each Company IP Agreement is valid and binding on the Company in accordance with its terms and is in full force and effect. Neither the Company nor any other party thereto is, or is alleged to be, in breach of or default under, or has

provided or received any notice of breach of, default under or intention to terminate (including by non-renewal), any Company IP Agreement.

Disclosure Schedules, the Company is the sole and exclusive legal and beneficial, and with respect to the Company IP Registrations owned or purported to be owned by the Company, record, owner of all right, title and interest in and to the Company

Intellectual Property owned or purported to be owned by the Company, free and clear of Encumbrances other than Permitted Encumbrances, and has the valid and enforceable right to use all Licensed Intellectual Property, Open Source Software and other

Intellectual Property, Software, firmware, Protected Data, Company IT Systems and Company Products used or held for use in or necessary for the conduct of the Company’s business as currently conducted and as proposed to be conducted. Except as

set forth in Section 3.12(c) of the Disclosure Schedules, neither Seller nor any Member nor any of their respective Affiliates (other than the Companies) owns or retains any right, title or interest in or to any Intellectual Property, Software,

firmware, Company Data or Company Product that is material to the conduct of either Company’s business as currently conducted. Neither the execution, delivery or performance of this Agreement nor the consummation of the transactions

contemplated hereby will result in the loss or impairment of, require the consent of any Person in respect of, or give rise to any additional payment or other obligation with respect to, the Company’s right to own or license (as applicable),

use, distribute, support, maintain or otherwise exploit any Company Intellectual Property, Licensed Intellectual Property, Open Source Software, Protected Data, Company IT System or Company Product.

(d) Except as set forth in Section 3.12(d) of the Disclosure Schedules, the Company has entered into

binding, valid and enforceable written Contracts with each current and former employee, independent contractor and other Person who is or was involved in, or has contributed to, the invention, creation, development, modification or reduction to

practice of any Company Intellectual Property owned or purported to be owned by the Company, whereby such Person (i) acknowledges the Company’s exclusive ownership of all Intellectual Property invented, created, developed or modified by

such Person within the scope of such Person’s employment or engagement with the Company; (ii) grants to the Company a present, irrevocable assignment of any ownership interest such Person may have in or to such Intellectual Property, to the

extent such Intellectual Property does not constitute a “work made for hire” under applicable Law; (iii) irrevocably waives any right or interest, including any moral rights, regarding any such Intellectual Property, to the extent

permitted by applicable Law; and (iv) is bound by commercially reasonable confidentiality and use restrictions protecting the Company Intellectual Property. Seller has provided Buyer with true and complete copies of all such Contracts. No

Person has asserted or has any basis to assert any ownership interest in or right to payment with respect to any Company Intellectual Property other than compensation payable to employees, contractors or consultants in the ordinary course of

business and license fees payable under Company IP Agreements listed in Section 3.12(b) of the Disclosure Schedules. All assignments and other instruments necessary to establish, record and perfect the Company’s ownership interest in the

Company IP Registrations have been validly executed, delivered and filed with the relevant Governmental Authorities and authorized registrars.

(e) Except as set forth in Section 3.12(e) of the

Disclosure Schedules, all of the Company Intellectual Property and Licensed Intellectual Property are valid and enforceable, and all Company IP Registrations are subsisting and in full force and effect. The Company has taken all reasonable and

necessary steps to maintain and enforce the Company Intellectual Property and Licensed Intellectual Property and to preserve the confidentiality, security and value of all Trade Secrets, source code, Customer Technology (to the extent in the

possession or control of the Company) and other confidential information included in or relating to the Company Intellectual Property, including by requiring Persons having access thereto to execute binding written

non-disclosure, confidentiality or similar agreements. All required filings and fees related to the Company IP Registrations have been timely submitted with and paid to the relevant Governmental Authorities

and authorized registrars. Seller has provided Buyer with true and complete copies of all file histories, office actions, correspondence, assignments and other material documentation relating to the Company IP Registrations.

(f) The conduct of the Company’s business as currently and formerly conducted, including the design,

development, manufacture, programming, assembly, testing, import, export, use, sale, offer for sale, license, distribution, provision, support, maintenance and other exploitation of the Company Products, Company Intellectual Property and Licensed

Intellectual Property in connection therewith, and the products, processes and services of the Company have not infringed, misappropriated or otherwise violated, and will not infringe, misappropriate or otherwise violate, the Intellectual Property,

privacy, publicity, confidentiality, contract or other rights of any Person. No Person has infringed, misappropriated or otherwise violated any Company Intellectual Property or Licensed Intellectual Property.

(g) There are no Actions (including any opposition, cancellation, revocation, review, or other proceeding),

whether settled, pending or, to the Seller’s Knowledge, threatened (including in the form of offers or demands to obtain a license, requests for indemnification, cease and desist letters or similar communications): (i) alleging any

infringement, misappropriation or other violation by the Company of the Intellectual Property of any Person; (ii) challenging the validity, enforceability, registrability, patentability or ownership of any Company Intellectual Property or

Licensed Intellectual Property or the Company’s right, title or interest in or to any Company Intellectual Property or Licensed Intellectual Property; (iii) by the Company or by the owner of any Licensed Intellectual Property alleging any

infringement, misappropriation or other violation by any Person of the Company Intellectual Property or such Licensed Intellectual Property; or (iv) alleging a material defect or failure to meet specifications in any Company Product, Software

or firmware, unauthorized use or disclosure of source code or Customer Technology, or a material breach of any Company IP Agreement. Neither any Seller nor the Company is aware of any facts or circumstances that could reasonably be expected to give

rise to any such Action. The Company is not subject to any outstanding or prospective Governmental Order (including any motion or petition therefor) that does or could reasonably be expected to restrict or impair the ownership, use, validity,

enforceability, registrability, licensing, distribution, support or maintenance of any Company Intellectual Property, Licensed Intellectual Property, Software, firmware, Company Product or Company Data.

(h) The Company has possession or control of complete and

current copies of the source code, object code, firmware images, build scripts, libraries, toolchains, development files, test files, installation and build instructions, documentation and other materials reasonably necessary to build, compile,

install, test, operate, support, maintain and modify all proprietary Software and firmware included in the Company Intellectual Property. Except as set forth in Section 3.12(h) of the Disclosure Schedules, the Company has not disclosed,

delivered, licensed, made available or deposited in escrow any source code for any proprietary Software or firmware included in the Company Intellectual Property to or for the benefit of any Person other than employees, contractors and service

providers bound by written confidentiality and use restrictions in the ordinary course of business. No Company Product, proprietary Software or firmware contains any Malicious Code. The proprietary Software and firmware included in Company Products

currently sold or supported by either Company perform in all material respects in accordance with the applicable specifications and documentation provided to customers, and neither Company has received any unresolved written notice or complaint

alleging a material defect, failure or nonconformity in such Software or firmware.

(i) Section 3.12(i)

of the Disclosure Schedules contains a correct, current and complete list of all Open Source Software that is incorporated in, linked with, distributed with, used to operate, or otherwise included in any Company Product or proprietary Software or

firmware used in the Company’s business, identifying the applicable license and the Company Product, Software or firmware in which such Open Source Software is used. The Company is in compliance with all licenses applicable to Open Source

Software used by the Company. The Company has not used, incorporated, linked, distributed, modified or made available any Open Source Software in a manner that requires or conditions the use, distribution, licensing or availability of any Company

Intellectual Property, Company Product or proprietary Software or firmware on (i) disclosure, delivery, licensing or distribution of source code; (ii) licensing for the purpose of making derivative works; (iii) licensing at no charge

or on a royalty-free basis; (iv) permitting reverse engineering, reverse assembly or disassembly; (v) granting any patent license, non-assertion covenant or other rights under any Company

Intellectual Property; or (vi) imposing any other material limitation, restriction or condition on the right of the Company or Buyer to use, enforce, license, distribute, support, maintain or otherwise exploit any Company Intellectual Property,

Company Product or proprietary Software or firmware.

(j) The Company has complied with all Contracts and written

policies applicable to customer-owned source code, firmware, binary images, programming files, test vectors, product specifications, technical data and other confidential or proprietary information delivered or otherwise made available to the

Company by customers or other third parties (collectively, “Customer Technology”). The Company has used Customer Technology only as authorized by the applicable customer or third party and has not disclosed, transferred, reverse

engineered, copied, retained or otherwise used any Customer Technology except as permitted under the applicable Contract or written authorization. The Company has maintained commercially reasonable physical, technical and administrative safeguards

designed to protect Customer Technology against unauthorized access, use, disclosure, loss and modification, and has not received any written notice or complaint alleging unauthorized access to, use of or disclosure of Customer Technology.

(k) Section 3.12(k) of the Disclosure Schedules contains a correct, current, and complete list of all social

media accounts used in the Company’s business. The Company has complied with all terms of use, terms of service, and other Contracts and all associated policies and guidelines relating to its use of any social media platforms, sites, or

services (collectively, “Platform Agreements”). There are no Actions, whether settled, pending, or, to the Seller’s Knowledge, threatened, alleging any (i) breach or other violation of any Platform Agreement by the

Company; or (ii) defamation, violation of publicity rights of any Person, or any other violation by the Company in connection with its use of social media.

(l) All Company IT Systems are in good working condition and are sufficient for the operation of the

Company’s business as currently conducted. The Company has implemented and maintained commercially reasonable safeguards to ensure the confidentiality, integrity, security and availability of the Company IT Systems, Company Data, Personal

Information and Customer Technology. There has been no malfunction, failure, continued substandard performance, denial-of-service, ransomware event, cyberattack,

Security Incident or other impairment of the Company IT Systems that has resulted in, or is reasonably likely to result in disruption or damage to the business of the Company, unauthorized access to or disclosure of Company Data, Personal

Information or Customer Technology, or an obligation to notify any Person or Governmental Authority.

(m) Except as set forth in Schedule 3.12(m), the Company, and to the Seller’s Knowledge, all third parties

Processing Protected Data on the Company’s behalf, are and at all times have been, in compliance with all applicable Privacy and Security Requirements. The Company has adopted and published Privacy Policies that accurately describe the privacy

practices of the Company, to any website, mobile application or other electronic platform, and the Company complies and has complied with those Privacy Policies, none of which have been inaccurate, misleading or deceptive (including by omission).

The Company does not engage in, and has never engaged in, any sale or selling, lease or leasing, or rent or renting of Personal Information, and does not permit any third parties with access to Protected Data to engage in any such sale or selling,

lease or leasing, or rent or renting.

(n) The Company has not had a Security Incident, nor has it

received any written or, to the Seller’s Knowledge verbal, notices, inquiries, audits, requests to audit, or complaints from any Person (including any Governmental Authority) regarding any Security Incident or any non-compliance of the Company with the applicable Privacy and Security Requirements. To the Seller’s Knowledge, no reasonably suspected Security Incident based on credible information remains under

investigation or otherwise unresolved.

(o) The Company has taken commercially reasonable steps to protect

and secure Protected Data from Security Incidents and to ensure that third parties who have access to Protected Data or Company IT Systems maintain reasonable safeguards for the applicable Protected Data and Company IT Systems. To the Seller’s

Knowledge, no third parties with access to Protected Data or Company IT Systems have failed to comply with any such obligations.

(p) The Company has not used any data sets, information, or data provided by or obtained or collected from any

third party in developing, building, instructing, or training any artificial intelligence or machine learning algorithm, program, product, or technology, including those simulating human intelligent thought processes, (collectively, “AI

Programs”) in violation of Law or the Privacy and Security Requirements or any contractual obligation.

(q) The Company implements, maintains and complies, and at all times during the past five (5) years has

implemented, maintained and complied with commercially reasonable organizational security, physical, technical and administrative safeguards which comply with all applicable Privacy and Security Requirements and are designed to ensure that Protected

Data is protected against Security Incidents. The Company maintains commercially reasonable written privacy and security policies, and maintains commercially reasonable disaster recovery and business continuity procedures for material Company IT

Systems and Protected Data.

Section 3.13 Inventory. All inventory of the Company, whether or not

reflected in the Interim Balance Sheet, consists of a quality and quantity usable and salable in the ordinary course of business consistent with past practice, except for obsolete, damaged, defective or slow-moving items that have been written off

or written down to fair market value or for which adequate reserves have been established in accordance with GAAP. All such inventory is owned by the Company free and clear of all Encumbrances (except for Permitted Encumbrances), and no inventory is

held on a consignment basis. The quantities of each item of inventory (whether raw materials, work-in-process or finished goods) are not excessive, but are reasonable in

the present circumstances of the Company.

Section 3.14 Accounts Receivable. Section 3.14 of

the Disclosure Schedules, the accounts receivable reflected on the Interim Balance Sheet and the accounts receivable arising after the Interim Balance Sheet Date (a) have arisen from bona fide transactions entered into by the Company involving

the sale of goods or the rendering of services in the ordinary course of business consistent with past practice; (b) constitute only valid, undisputed claims of the Company not subject to claims of

set-off or other defenses or counterclaims other than normal cash discounts accrued in the ordinary course of business consistent with past practice; and (c) subject to a reserve for bad debts shown on

the Interim Balance Sheet or, with respect to accounts receivable arising after the Interim Balance Sheet Date, on the accounting records of the Company, are collectible in full within ninety (90) days after billing. The reserve for bad debts

shown on the Interim Balance Sheet or, with respect to accounts receivable arising after the Interim Balance Sheet Date, on the accounting records of the Company have been determined in accordance with GAAP, consistently applied.

Section 3.15 Customers and Suppliers.

(a) Section 3.15(a) of the Disclosure Schedules sets forth (i) each customer who has paid aggregate

consideration to the Company for goods or services rendered in an amount greater than or equal to $250,000 for each of the two most recent fiscal years (collectively, the “Material Customers”); and (ii) the amount of

consideration paid by each Material Customer during such periods. Except as set forth in Section 3.15(a) of the Disclosure Schedules, since the Interim Balance Sheet Date, the Company has not received any notice, and has no reason to believe,

that any of its Material Customers has ceased, or intends to cease after the Closing, to use its goods or services or to otherwise terminate or materially reduce its relationship with the Company.

(b) Section 3.15(b) of the Disclosure Schedules sets forth (i) each supplier to whom the Company has

paid consideration for goods or services rendered in an amount greater than or equal to $250,000 for each of the two most recent fiscal years (collectively, the “Material Suppliers”); and (ii) the amount of purchases from

each Material Supplier during such periods. Except as set forth in Section 3.15(b) of the Disclosure Schedules, since the Interim Balance Sheet Date, the Company has not received any notice, and has no reason to believe, that any of its

Material Suppliers has ceased, or intends to cease, to supply goods or services to the Company or to otherwise terminate or materially reduce its relationship with the Company.

(including any contract manufacturer, component vendor, equipment vendor or hosting provider) that (i) is a sole-source or single-source provider of any goods or services to the Company or (ii) is otherwise material to the design,

manufacture, programming, testing, servicing, support or operation of any Company Product or to the Company’s business (each, a “Critical Supplier”), and describes the products or services supplied. Except as set forth in

Section 3.15(c) of the Disclosure Schedules, (i) no Critical Supplier has notified the Company in writing or, to Seller’s Knowledge, orally, that it intends to cease, materially reduce or materially delay such supply or service, or

materially increase its pricing; (ii) to Seller’s Knowledge, there is no material quality issue, end-of-life notice, allocation, shortage or other

circumstance reasonably likely to materially and adversely affect such supply or service; and (iii) the Company is not involved in any unresolved material dispute with a Critical Supplier that would reasonably be expected to materially and

adversely affect such supply or service.

Section 3.16 Insurance. Section 3.16 of the

Disclosure Schedules sets forth a true and complete list of all current policies or binders of fire, liability, product liability, umbrella liability, real and personal property, workers’ compensation, vehicular, directors’ and

officers’ liability, fiduciary liability and other casualty and property insurance maintained by Seller or its Affiliates (including the Company) and relating to the assets, business, operations, employees, officers and directors of the

Company (collectively, the “Insurance Policies”) and true and complete copies of the Insurance Policies have been made available to Buyer. The Insurance Policies are in full force and effect and shall remain in full force and

effect following the consummation of the transactions contemplated by this Agreement. Neither the Seller nor any of its Affiliates (including the Company) have received any written notice of cancellation of, premium increase with respect to, or

alteration of coverage under, any of the Insurance Policies. All premiums due on the Insurance Policies have either been paid or, if due and payable prior to Closing, will be paid prior to Closing in accordance with the payment terms of each

Insurance Policy. The Insurance Policies do not provide for any retrospective premium adjustment or other experience-based liability on the part of the Company. All the Insurance Policies (a) are valid and binding in accordance with their

terms; (b) are provided by carriers who are financially solvent; and (c) have not been subject to any lapse in coverage. Except as set forth on Section 3.16 of the Disclosure Schedules, there are no claims related to the business of

the Company pending under any Insurance Policies as to which coverage has been questioned, denied or disputed or in respect of which there is an outstanding reservation of rights. Neither Seller or any of its Affiliates (including the Company) is in

default under, or has otherwise failed to comply with, in any material respect, any provision contained in any Insurance Policy. The Insurance Policies are of the type and in the amounts customarily carried by Persons conducting a business similar

to the Company and are sufficient for compliance with all applicable Laws and Contracts to which the Company is a party or by which it is bound.

Section 3.17 Legal Proceedings; Governmental Orders.

(a) Except as set forth in Section 3.17(a) of the Disclosure Schedules, there are no Actions pending or, to

Seller’s Knowledge, threatened (a) against or by the Company or affecting any of its properties or assets (or by or against any Seller or any Affiliate thereof and relating to the Company); or (b) against or by the Company, Seller or

any Affiliate of any Seller that challenges or seeks to prevent, enjoin or otherwise delay the transactions contemplated by this Agreement. No event has occurred or circumstances exist that may give rise to, or serve as a basis for, any such Action.

(b) Except as set forth in Section 3.17(b) of the Disclosure Schedules, there are no outstanding

Governmental Orders and no unsatisfied judgments, penalties or awards against or affecting the Company or any of its properties or assets. The Company is in compliance with the terms of each Governmental Order set forth in Section 3.17(b) of

the Disclosure Schedules. To the Knowledge of the Seller no event has occurred or circumstances exist that may reasonably be expected to constitute or result in (with or without notice or lapse of time) a violation of any such Governmental Order.

Section 3.18 Compliance With Laws; Permits.

(a) Except as set forth in Section 3.18(a) of the Disclosure Schedules, the Company has during the past six

(6) years complied, and is now complying, with all Laws applicable to it or its business, properties or assets.

(b) All Permits required for the Company to conduct its

business have been obtained by it and are valid and in full force and effect. All fees and charges with respect to such Permits as of the date hereof have been paid in full. Section 3.18(b) of the Disclosure Schedules lists all current Permits

issued to the Company, including the names of the Permits and their respective dates of issuance and expiration. The Company has during the past six (6) years complied, and is now complying, with the terms of all Permits listed on

Section 3.18(b) of the Disclosure Schedules. No event has occurred that, with or without notice or lapse of time or both, would reasonably be expected to result in the revocation, suspension, lapse or limitation of any Permit set forth in

Section 3.18(b) of the Disclosure Schedules.

Section 3.19 Environmental Matters.

(a) The Company is currently, and has been in compliance in all material respects with all Environmental Laws,

and has not, and the Seller has not, received from any Person any: (i) Environmental Notice or Environmental Claim; or (ii) written or, to the Seller’s Knowledge, verbal request for information pursuant to Environmental Law, which,

in each case, either remains pending or unresolved, or is the source of ongoing obligations or requirements as of the Closing Date.

(b) The Company has obtained and is in compliance in all material respects with all Environmental Permits (each

of which is disclosed in Section 3.19(b) of the Disclosure Schedules) necessary for the ownership, lease, operation or use of the business or assets of the Company and all such Environmental Permits are in full force and effect and shall be

maintained in full force and effect by Seller through the Closing Date in accordance with Environmental Law, and neither Seller nor the Company is aware of any condition, event or circumstance that might prevent or impede, after the Closing Date,

the ownership, lease, operation or use of the business or assets of the Company as currently carried out. With respect to any such Environmental Permits, Seller has undertaken, or will undertake prior to the Closing Date, all measures reasonably

necessary to facilitate transferability of the same, and neither the Company nor the Seller is aware of any condition, event or circumstance that might prevent or impede the transferability of the same, nor have they received any Environmental

Notice or written communication regarding any material adverse change in the status or terms and conditions of the same.

proposed for listing on, the National Priorities List (or CERCLIS) under CERCLA, or any similar state list.

(d) There has been no Release of Hazardous Materials in contravention of Environmental Law with respect to the

business or assets of the Company or any real property currently or formerly owned, operated or leased by the Company, and neither the Company nor Seller has received an Environmental Notice that any real property currently or formerly owned,

operated or leased in connection with the business of the Company (including soils, groundwater, surface water, buildings and other structure located on any such real property) has been contaminated with any Hazardous Material which could reasonably

be expected to result in an Environmental Claim against, or a violation of Environmental Law or term of any Environmental Permit by, Seller or the Company.

(e) Section 3.19(e) of the Disclosure Schedules contains a

complete and accurate list of all active or abandoned aboveground or underground storage tanks owned or operated by the Company.

(f) Section 3.19(f) of the Disclosure Schedules contains a complete and accurate list of all off-site Hazardous Materials treatment, storage, or disposal facilities or locations used by the Company or Seller, and none of these facilities or locations has been placed or proposed for placement on the National

Priorities List (or CERCLIS) under CERCLA, or any similar state list, and neither Seller nor the Company has received any Environmental Notice regarding potential liabilities with respect to such off-site

Hazardous Materials treatment, storage, or disposal facilities or locations used by the Company or Seller.

(g) Neither Seller nor the Company has retained or assumed, by contract or operation of Law, any liabilities or

obligations of third parties under Environmental Law.

(h) Seller has provided or otherwise made available to

Buyer and listed in Section 3.19(h) of the Disclosure Schedules: (i) any and all material environmental reports, audits and other similar documents with respect to the business or assets of the Company or any currently owned, operated or

leased real property which are in the possession or control of the Seller or Company related to compliance with Environmental Laws, Environmental Claims or an Environmental Notice or the Release of Hazardous Materials; and (ii) any and all

material documents concerning planned or anticipated capital expenditures required to reduce, offset, limit or otherwise control pollution and/or emissions, manage waste or otherwise ensure compliance with current or future Environmental Laws

(including, without limitation, costs of remediation, pollution control equipment and operational changes).

(i) Neither the Seller nor the Company is aware of or reasonably anticipates, as of the Closing Date, any

condition, event or circumstance concerning the Release or regulation of Hazardous Materials that might, after the Closing Date, prevent, impede or materially increase the costs associated with the ownership, lease, operation, performance or use of

the business or assets of the Company as currently carried out.

(j) Seller owns and controls all

Environmental Attributes (a complete and accurate list of which is set forth in Section 3.19(j) of the Disclosure Schedules) and has not entered into any contract or pledge to transfer, lease, license, guarantee, sell, mortgage, pledge or

otherwise dispose of or encumber any Environmental Attributes as of the date hereof. Neither Seller nor the Company is aware of any condition, event or circumstance that might prevent, impede or materially increase the costs associated with the

transfer (if required) to Buyer of any Environmental Attributes after the Closing Date.

Section 3.20 Employee Benefit Matters.

(a) Section 3.20(a) of the Disclosure Schedules contains a true and complete list of each benefit, pension,

retirement, supplemental retirement, compensation, employment, consulting, profit-sharing, deferred compensation, incentive, bonus, performance award, phantom equity, stock, stock-based, change in control, retention, severance, salary continuation,

accrued leave, sick leave, vacation, paid time off, health, medical, welfare, dental, disability, life insurance, accidental death and dismemberment, fringe benefit, and other similar agreement, plan, contract, policy, program, practice, or

arrangement (and any amendments thereto), in each case whether or not reduced to writing and whether funded or unfunded, including each “employee benefit plan” within the meaning of Section 3(3) of ERISA, whether or not tax-qualified and whether or not subject to ERISA, which is or has been established, maintained, sponsored, contributed to, or required to be contributed to by the Company for the benefit of any current or former

employee, officer, director, retiree, independent contractor or consultant of the Company or any spouse or dependent of such individual, or under which the Company or any ERISA Affiliate has or may have any Liability, or with respect to which Buyer

or any of its Affiliates would reasonably be expected to have any Liability, contingent or otherwise (each, a “Benefit Plan”). The Company has separately identified in Section 3.20(a) of the Disclosure Schedules (i) each

Benefit Plan that contains a change in control provision and (ii) each Benefit Plan that is maintained, sponsored, contributed to, or required to be contributed to by the Company primarily for the benefit of employees outside of the United

States (each, a “Non-U.S. Benefit Plan”).

(b) For

each Benefit Plan, Seller has made available to Buyer at least ten (10) business days prior to the signing of the Agreement accurate, current and complete copies of each of the following, as applicable: (i) where the Benefit Plan has been

reduced to writing, the plan document and all amendments; (ii) where the Benefit Plan has not been reduced to writing, a written summary of all material plan terms; (iii) any trust agreements or other funding arrangements, custodial

agreements, insurance policies and contracts, administration and service provider agreements, investment management agreements, investment advisory agreements, and side letters; (iv) any summary plan descriptions, summaries of material

modifications, summaries of benefits and coverage, employee handbooks and any other written communications (or a description of any oral communications); (v) in the case of any Benefit Plan that is intended to be qualified under Section 401(a)

of the Code, a copy of the most recent determination, opinion or advisory letter from the Internal Revenue Service (or a copy of any pending application for a determination letter and any related correspondence from the Internal Revenue Service);

(vi) in the case of any Benefit Plan for which a Form 5500 must be filed, a copy of the three (3) most recently filed Forms 5500 (with schedules and financial statements attached), and a copy of the three most recently distributed summary

annual reports; (vii) actuarial valuations and reports for the three (3) most recently completed plan years; (viii) the most recent nondiscrimination and top-heavy tests performed under the

Code; (ix) copies of material notices, letters or other correspondence from the Internal Revenue Service, Department of Labor, Department of Health and Human Services, Pension Benefit Guaranty Corporation or other Governmental Authority

relating to the Benefit Plan; (x) copies of current and prior Internal Revenue Service or Department of Labor audits or inquiries; (xi) Fidelity bond and fiduciary liability insurance policies; and (xii) any filings under any amnesty,

voluntary compliance, self-correction, or similar program sponsored by any Governmental Authority, including the Employee Plans Compliance Resolution System, Voluntary Fiduciary Correction Program, or Delinquent Filer Voluntary Correction Program.

Disclosure Schedules, each Benefit Plan (other than any multiemployer plan within the meaning of Section 3(37) of ERISA (each a “Multiemployer Plan”)) has been established, administered and maintained in accordance with its

terms and in compliance in all material respects with all applicable Laws (including ERISA, the Code, the Affordable Care Act, and any applicable local Laws). Each Benefit Plan that is intended to be qualified within the meaning of

Section 401(a) of the Code (a “Qualified Retirement Plan”) is so qualified and has received a favorable and current determination letter from the Internal Revenue Service, or with respect to a prototype plan, can rely on an

opinion letter from the Internal Revenue Service to the prototype plan sponsor, to the effect that such Qualified Retirement Plan and the related trust are exempt from federal income taxes under Sections 401(a) and 501(a), respectively, of the Code,

and nothing has occurred that could adversely affect the qualified status of any Qualified Retirement Plan. Nothing has occurred with respect to any Benefit Plan that has subjected or could subject the Company or any ERISA Affiliate or, with respect

to any period on or after the Closing Date, Buyer or any of its Affiliates, to a civil action or penalty under Section 502 of ERISA or to tax or penalty under Sections 4975 or 4980 of the Code. No Benefit Plan has assets that include securities

issued by the Company. Except as set forth in Section 3.20(c) of the Disclosure Schedules, all benefits, contributions and premiums relating to each Benefit Plan have been timely paid in accordance with the terms of such Benefit Plan and all

applicable Laws and accounting principles, and all benefits accrued under any unfunded Benefit Plan have been paid, accrued or otherwise adequately reserved to the extent required by, and in accordance with, GAAP. All

Non-U.S. Benefit Plans that are intended to be funded and/or book-reserved are funded and/or book-reserved, as appropriate, based upon reasonable actuarial assumptions.

(d) Neither the Company nor any ERISA Affiliate has now or at any time within the previous six (6) years

contributed to, sponsored, or maintained any (i) “multiemployer plan” within the meaning of Section 3(37) of ERISA (each a “Multiemployer Plan”), (ii) “single-employer plan” within the meaning of

Section 4001(a)(15) of ERISA, or (iii) “multiple employer plan” within the meaning of Section 413(c) of the Code. None of the Benefit Plans are subject to the minimum funding standards of Section 302 of ERISA or Sections

412 or 418(B) of the Code, and none of the assets of the Company or any ERISA Affiliate is, or may reasonably be expected to become, the subject of any lien arising under Section 303 of ERISA or Sections 430 or 436 of the Code.

(e) Neither the Company nor any ERISA Affiliate has (i) incurred or reasonably expects to incur, either

directly or indirectly, any Liability under Title I or Title IV of ERISA or related provisions of the Code or applicable local Law relating to any Benefit Plan and nothing has occurred that could constitute grounds under Title IV of ERISA to

terminate, or appoint a trustee to administer, any Benefit Plan; (ii) except for payments of premiums to the PBGC which have been timely paid in full, not incurred any liability to the PBGC in connection with any Benefit Plan covering any

active, retired, or former employees or directors of the Company or any ERISA Affiliate, including, without limitation, any liability under Sections 4069 or 4212(c) of ERISA or any penalty imposed under Section 4071 of ERISA, or ceased

operations at any facility or withdrawn from any such Benefit Plan in a manner that could subject it to liability under Sections 4062, 4063, or 4064 of ERISA; (iii) failed to comply with ERISA Sections 601 to 608 and Code Section 4980B; or

(iv) incurred any withdrawal liability (including any contingent or secondary withdrawal liability) within the meaning of ERISA Sections 4201 or 4204 to any Multiemployer Plan, and nothing has occurred that presents a risk of the occurrence of

any withdrawal from or the partition, termination, reorganization, or insolvency of any such Multiemployer Plan that could result in any liability of the Company or any ERISA Affiliate to any such Multiemployer Plan. No complete or partial

termination of any Benefit Plan has occurred or is expected to occur.

(f) Neither the Company nor any ERISA Affiliate has any

commitment, intention, or understanding to create, modify, or terminate any Benefit Plan. Each Benefit Plan can be amended, terminated, or otherwise discontinued after the Closing in accordance with its terms, without material liabilities to the

Company or any of its Affiliates other than ordinary administrative expenses typically incurred in a termination event.

(g) Except as set forth in Section 3.20(g) of the Disclosure Schedules and other than as required under

Sections 601 to 608 of ERISA or other applicable Law, no Benefit Plan provides post-termination or retiree medical benefits to any individual for any reason, and neither the Company nor any of its ERISA Affiliates has any Liability to provide

post-termination or retiree medical benefits to any individual or ever represented, promised or contracted to any individual that such individual would be provided with post-termination or retiree medical benefits.

(h) Except as set forth in Section 3.20(h) of the Disclosure Schedules, there is no pending or, to

Seller’s Knowledge, threatened Action relating to a Benefit Plan (other than routine claims for benefits), and no Benefit Plan has within the three (3) years prior to the date hereof been the subject of an examination or audit by a

Governmental Authority or the subject of an application or filing under or is a participant in, an amnesty, voluntary compliance, self-correction or similar program sponsored by any Governmental Authority (including the Employee Plans Compliance

Resolution System, the Voluntary Fiduciary Correction Program, or the Delinquent Filers Voluntary Correction Program).

(i) Nothing has occurred that could result in a material increase in the benefits under or the expense of

maintaining any Benefit Plan from the level of benefits or expense incurred for the most recently completed fiscal year. There has been no amendment to, announcement by Seller, the Company or any of their Affiliates relating to, or change in

employee participation or coverage under, any Benefit Plan or collective bargaining agreement that would increase the annual expense of maintaining such plan above the level of the expense incurred for the most recently completed fiscal year with

respect to any director, officer, employee, independent contractor or consultant, as applicable. None of the Seller, the Company, nor any of their Affiliates has any commitment or obligation or has made any representations to any director, officer,

employee, independent contractor or consultant, whether or not legally binding, to adopt, amend, modify or terminate any Benefit Plan or any collective bargaining agreement, in connection with the consummation of the transactions contemplated by

this Agreement.

(j) Each Benefit Plan that is subject to

Section 409A of the Code has been administered in compliance with its terms and the operational and documentary requirements of Section 409A of the Code and all applicable regulatory guidance (including notices, rulings and proposed and

final regulations) thereunder. The Company does not have any obligation to gross up, indemnify or otherwise reimburse any individual for any excise taxes, interest or penalties incurred pursuant to Section 409A of the Code.

(k) Except as set forth in Section 3.20(k) of the Disclosure Schedules, neither the execution of this

Agreement nor any of the transactions contemplated by this Agreement will (either alone or upon the occurrence of any additional or subsequent events): (i) entitle any current or former director, officer, employee, independent contractor or

consultant of the Company to severance pay, any increase in severance pay, or any other payment; (ii) accelerate the time of payment, funding or vesting, or increase the amount of compensation (including stock or stock-based compensation) due

to any such individual; (iii) limit or restrict the right of the Company to merge, amend, or terminate any Benefit Plan; (iv) increase the amount payable under or result in any other material obligation pursuant to any Benefit Plan;

(v) result in “excess parachute payments” within the meaning of Section 280G(b) of the Code; (vi) require a “gross-up” or other payment to any “disqualified

individual” within the meaning of Section 280G(c) of the Code; or (vii) result in payments under any Benefit Plans that would not be deductible under Section 162(m) of the Code. Seller has provided to Buyer true and complete

copies of any Section 280G calculations prepared (whether or not final) with respect to any disqualified individual in connection with the transactions.

Section 3.21 Employment Matters.

(a) Section 3.21(a) of the Disclosure Schedules contains a list of all persons who are employees,

independent contractors or consultants of the Company as of the date hereof, including any employee who is on a leave of absence of any nature, and sets forth for each individual the following: (i) name; (ii) title or position (including

whether full-time or part-time); (iii) hire or retention date; (iv) current annual base compensation rate or contract fee; (v) commission, bonus or other incentive-based compensation; and (vi) a description of the fringe benefits

provided to each individual as of the date hereof. Except as set forth in Section 3.21(a) of the Disclosure Schedules, as of the date hereof, all compensation, including wages, commissions, bonuses, fees and other compensation, payable to all

employees, independent contractors or consultants of the Company for services performed on or prior to the date hereof have been paid in full (or accrued in full on the audited balance sheet contained in the Closing Working Capital Statement) and

there are no outstanding agreements, understandings or commitments of the Company with respect to any compensation, commissions, bonuses or fees.

(b) Except as set forth in Section 3.21(b) of the

Disclosure Schedules, the Company is not, and has not been a party to, bound by, or negotiating any collective bargaining agreement or other Contract with a union, works council or labor organization (collectively, “Union”), and

there is not, and has not been any Union representing or purporting to represent any employee of the Company, and, no Union or group of employees is seeking or has sought to organize employees for the purpose of collective bargaining. Except as set

forth in Section 3.21(b) of the Disclosure Schedules, there has never been, nor, to the Seller’s Knowledge, has there been any threat of, any strike, slowdown, work stoppage, lockout, concerted refusal to work overtime or other similar

labor disruption or dispute affecting the Company or any of its employees. The Company has no duty to bargain with any Union.

the past five (5) years, in compliance in all material respects with the terms of the Contracts listed on Section 3.21(b) of the Disclosure Schedules and all applicable federal, state and local Laws pertaining to employment and employment

practices to the extent they relate to employees, volunteers, interns, consultants and independent contractors of the Company, including but not limited to all Laws relating to labor relations, unfair labor practices, equal employment opportunities,

fair employment practices, employment discrimination, harassment, retaliation, reasonable accommodation, disability rights or benefits, immigration, wages, hours, minimum wage and overtime compensation, employee classification, pay equity, child

labor, hiring, background checks, drug testing, salary history inquiries, promotion and termination of employees, working conditions, meal and break periods, privacy (including biometric privacy), health and safety, workers’ compensation,

leaves of absence, paid sick leave, paid and unpaid family and medical leave, whistleblowing, and unemployment insurance laws. All individuals characterized and treated by the Company as independent contractors or consultants are properly treated as

independent contractors under all applicable Laws. All employees of the Company classified as exempt under the Fair Labor Standards Act and state and local wage and hour laws are properly classified as exempt. Except as set forth in

Section 3.21(c) of the Disclosure Schedules, there are no Actions against the Company pending, or to the Seller’s Knowledge, threatened to be brought or filed, by or with any Governmental Authority or arbitral forum in connection with the

employment of any current or former applicant, employee, consultant, volunteer, intern or independent contractor of the Company, including, without limitation, any charge, investigation, audit, or claim relating to labor relations, unfair labor

practices, equal employment opportunities, fair employment practices, employment discrimination, harassment, retaliation, reasonable accommodation, disability rights or benefits, immigration, wages, hours, minimum wage or overtime compensation,

employee classification, pay equity, child labor, hiring, background checks, drug testing, salary history inquiries, promotion and termination of employees, working conditions, meal and break periods, privacy (including biometric privacy), health

and safety, workers’ compensation, leaves of absence, paid sick, family and medical, or other leave, whistleblowing, and unemployment insurance, or any other employment-related matter arising under applicable Laws.

(d) The Company has complied with the WARN Act, and any

applicable state mini-WARN Act, and it has no plans to undertake any action in the future that would trigger the WARN Act.

(e) Regarding each Government Contract, the Company is and has been in material compliance with

Section 503 of the Rehabilitation Act of 1973 (“Section 503”), the Vietnam Era Veterans’ Readjustment Assistance Act of 1974 (“VEVRAA”), and Executive Order 13706 (Establishing Paid Sick Leave for

Federal Contractors) (“E.O. 13706”), each including all implementing regulations. The Company maintains and complies with affirmative action plans in compliance with Section 503 and VEVRAA, including all implementing

regulations and amendments. The Company is not, and has not been the subject of any audit, investigation or enforcement action by any Governmental Authority in connection with any Government Contract or related compliance with Section 503,

VEVRAA or E.O. 13706. The Company has not been debarred, suspended or otherwise made ineligible from doing business with the United States government or any government contractor. The Company is in compliance with and has complied with all

immigration laws, including any applicable mandatory E-Verify obligations.

Section 3.22 Taxes.

(a) All Tax Returns required to be filed on or before the Closing Date by the Company have been, or will

be, timely filed. Such Tax Returns are, or will be, true, complete and correct in all respects and were, or will be, prepared in compliance with applicable Law. All Taxes due and owing by the Company (whether or not shown on any Tax Return) have

been, or will be, timely paid.

(b) The Company has withheld and timely paid to the appropriate

Governmental Authority each Tax required to have been withheld and paid in connection with amounts paid or owing to any employee, independent contractor, creditor, customer, shareholder or other party, and complied with all information reporting

(including Internal Revenue Service Forms W-2 and 1099 and applicable state and local forms) and backup withholding provisions of applicable Law, including maintenance of required records with respect thereto.

value added, goods and services and similar Taxes required to be collected (or for which the Company is customarily responsible under applicable Law to collect) and timely remitted in full all such Taxes collected to the appropriate Governmental

Authority in accordance with applicable Laws (or to the extent not required to be collected and remitted, has been furnished properly completed exemption certificates and has maintained all such records and supporting documents in the manner

required by applicable Law).

(d) No claim has been made by any taxing authority in

any jurisdiction where the Company does not file Tax Returns that it is, or may be, subject to Tax by that jurisdiction. The Company does not have a permanent establishment or taxable nexus in any non-U.S.

jurisdiction.

(e) The Company (i) has not waived any statute of limitations in respect of Taxes

or agreed to any extension of time with respect to any Tax assessment or deficiency, which waiver or extension has continuing effect; and (ii) is not currently the beneficiary of any extension of time within which to file any Tax Return.

(f) The amount of the Company’s Liability for unpaid Taxes for all periods ending on or before

Interim Balance Sheet Date does not, in the aggregate, exceed the amount of accruals for Taxes (excluding reserves for deferred Taxes) reflected on the Financial Statements. The amount of the Company’s Liability for unpaid Taxes for all

periods following the end of the recent period covered by the Financial Statements shall not, in the aggregate, exceed the amount of accruals for Taxes (excluding reserves for deferred Taxes) as adjusted for the passage of time in accordance with

the past custom and practice of the Company (and which accruals shall not exceed comparable amounts incurred in similar periods in prior years).

(g) The Company is, and has been since formation, properly classified as a “C corporation” for

federal and applicable state and local income tax purposes.

(h) Section 3.22(h) of the

Disclosure Schedules sets forth:

(i) the taxable years of the Company as to which the applicable

statutes of limitations on the assessment and collection of Taxes have not expired;

(ii) those years for

which examinations by the taxing authorities have been completed; and

(iii) those taxable years for

which examinations by taxing authorities are presently being conducted.

(i) No deficiency for any

Taxes has been proposed, asserted or assessed against the Company, that has not been resolved and paid in full, and the Company has not received any request for information related to Tax matters that has not been resolved. None of the Tax Returns

filed by the Company, or Taxes payable by the Company, have been the subject of an audit, action, suit, proceeding, claim, examination, deficiency or assessment by any Governmental Authority, and no such audit, action, suit, proceeding, claim,

examination, deficiency or assessment is currently pending or threatened.

(j) Seller has delivered to

Buyer copies of all federal, state, local and foreign income, franchise and similar Tax Returns, examination reports, and statements of deficiencies assessed against, or agreed to by, the Company for all Tax periods ending after December 31,

2021.

(k) There are no Encumbrances for Taxes (other than for

current Taxes not yet due and payable) upon the assets of the Company.

(l) No private letter

rulings, technical advice memoranda or similar agreement or rulings have been requested, entered into or issued by any taxing authority with respect to the Company.

(m) The Company (i) has never been a member of an affiliated group or filed or been included in a combined,

consolidated or unitary income Tax Return, (ii) has no liability for Taxes of any other Person as a result of being or ceasing to be a member of any affiliated group (including any liability under Treasury Regulation Section 1.1502-6 or any comparable provision of other applicable Law), or (iii) has no liability for Taxes of any other Person arising under contract (other than any customary commercial agreement entered

into in the ordinary courses of business the primary purpose of which is not related to Tax), by operation of law, or by reason of being a successor or transferee. The Company is not a party to or bound by any contract, agreement, or other

arrangement regarding the sharing or allocation of either liability for Taxes or payment of Taxes (other than any customary commercial agreement entered into in the ordinary courses of business the primary purpose of which is not related to Tax).

(n) The Company will not be required to include any item of income in, or exclude any item or

deduction from, taxable income for any taxable period or portion thereof ending after the Closing Date as a result of:

(i) any change in a method of accounting under Section 481 of the Code (or any comparable provision

of state, local or foreign Tax Laws), or use of an improper method of accounting, for a taxable period ending on or prior to the Closing Date;

(ii) an installment sale or open transaction occurring on or prior to the Closing Date;

(iii) an intercompany transaction or any excess loss account described in Treasury Regulations under

Section 1502 of the Code (or any corresponding or similar provision of state, local or foreign Tax law) entered into or created on or prior to the Closing Date;

(iv) the cash method of accounting or long-term contract method of accounting utilized prior to the

Closing Date;

(v) a prepaid, advance payment or deposit amount received or deferred revenue accrued on or

before the Closing Date; or

(vi) any “closing agreement” under Section 7121 of the Code,

or similar provision of state, local or foreign Law.

(o) Seller is not a “foreign person” as that

term is used in Treasury Regulations Section 1.1445-2. The Company is not, nor has it been, a United States real property holding corporation (as defined in Section 897(c)(2) of the Code) during the

applicable period in Section 897(c)(1)(a) of the Code.

(p) All related party transactions

between the Company and any of its Affiliates have been made on an arm’s-length basis and all transfer pricing documentation has been kept and filed in compliance with the relevant and applicable Tax law

in all material respects.

(q) The Company has not been a “distributing corporation” or a

“controlled corporation” in connection with a distribution described in Section 355 of the Code.

(r) The Company is not, and has not been, a party to, or a promoter of, a “reportable

transaction” within the meaning of Section 6707A(c)(1) of the Code and Treasury Regulations Section 1.6011-4(b).

(s) There is currently no limitation on the utilization of net operating losses, capital losses, built-in losses, tax credits or similar items of the Company under Sections 269, 382, 383, 384 or 1502 of the Code and the Treasury Regulations thereunder (and comparable provisions of state, local or foreign Law),

nor is there currently any limitations on the utilization of net interest expense deductions, or similar items, of the Company under Section 163 of the Code.

(t) Section 3.22(t) of the Disclosure Schedules sets forth all foreign jurisdictions in which the

Company is subject to Tax, is engaged in business or has a permanent establishment. The Company has not entered into a gain recognition agreement pursuant to Treasury Regulations Section 1.367(a)-8. The

Company has not transferred an intangible the transfer of which would be subject to the rules of Section 367(d) of the Code.

(u) No property owned by the Company is (i) required to be treated as being owned by another person

pursuant to the so-called “safe harbor lease” provisions of former Section 168(f)(8) of the Internal Revenue Code of 1954, as amended, (ii) subject to Section 168(g)(1)(A) of the

Code, or (iii) subject to a disqualified leaseback or long-term agreement as defined in Section 467 of the Code.

Section 3.23 Books and Records. The minute books of the Company have been provided to the Buyer

and are complete and correct and have been maintained in accordance with sound business practices. The minute books of the Company contain accurate and complete records of all meetings, and actions taken by written consent of the stockholders, the

board of directors and any committees of the board of directors of the Company, and no meeting, or action taken by written consent, of any such stockholders, board of directors or committee has been held for which minutes have not been prepared and

are not contained in such minute books. At the Closing, all of those books and records will be in the possession of the Company.

Section 3.24 Related Party Transactions. Except as

set forth on Section 3.24 of the Disclosure Schedules, there are no Contracts or other arrangements involving the Company in which Seller, its Affiliates, or any of its or their respective directors, officers, or employees or any immediate

family members thereof is a party, has financial interest, or otherwise owns or leases any material asset, property, or right which is used by the Company.

Section 3.25 Brokers. Except for Sperry Mitchell & Company, no broker, finder or

investment banker is entitled to any brokerage, finder’s or other fee or commission in connection with the transactions contemplated by this Agreement or based upon arrangements made by or on behalf of Seller.

Section 3.26 Accredited Investor. Seller represents and warrants that it is an Accredited Investor and

acknowledges the applicable resale restrictions on the Consideration Shares as set forth on Section 5.14.

ARTICLE IV

REPRESENTATIONS AND WARRANTIES OF BUYER

Except as set forth in the correspondingly numbered Section of the Disclosure Schedules, Buyer represents and warrants to Seller that the

statements contained in this Article IV are true and correct as of the date hereof.

Section 4.01 Organization and Authority of Buyer. Buyer is a corporation duly organized, validly

existing and in good standing under the Laws of the state of Washington. Buyer has full corporate power and authority to enter into this Agreement and the Ancillary Documents to which Buyer is or will be a party, to carry out its obligations

hereunder and thereunder and to consummate the transactions contemplated hereby and thereby. The execution and delivery by Buyer of this Agreement and, the performance by Buyer of its obligations hereunder and thereunder and the consummation by

Buyer of the transactions contemplated hereby and thereby have been duly authorized by all requisite corporate action on the part of Buyer. This Agreement has been duly executed and delivered by Buyer, and (assuming due authorization, execution and

delivery by Seller) this Agreement constitutes a legal, valid and binding obligation of Buyer enforceable against Buyer in accordance with its terms. When each Ancillary Document to which Buyer is or will be a party has been duly executed and

delivered by Buyer (assuming due authorization, execution and delivery by each other party thereto), such Ancillary Document will constitute a legal and binding obligation of Buyer enforceable against it in accordance with its terms.

Section 4.02 No Conflicts; Consents. The execution, delivery and performance by Buyer of this

Agreement and the Ancillary Documents to which it is or will be a party, and the consummation of the transactions contemplated hereby and thereby, do not and will not: (a) conflict with or result in a violation or breach of, or default under,

any provision of the Organizational Documents of Buyer; (b) conflict with or result in a violation or breach of any provision of any Law or Governmental Order applicable to Buyer; or (c) except as set forth in Section 4.02 of the

Disclosure Schedules, require the consent, notice or other action by any Person under any Contract to which Buyer is a party. No consent, approval, Permit, Governmental Order, declaration or filing with, or notice to, any Governmental Authority is

required by or with respect to Buyer in connection with the execution and delivery of this Agreement and the Ancillary Documents to which Buyer is or will be a party and the consummation of the transactions contemplated hereby and thereby, except

for such consents, approvals, Permits, Governmental Orders, declarations, filings or notices which, in the aggregate, would not have a material adverse effect on the ability of Buyer to consummate the transactions contemplated hereby on a timely

basis.

Section 4.03 Investment Purpose. Buyer is

acquiring the Stock solely for its own account for investment purposes and not with a view to, or for offer or sale in connection with, any distribution thereof. Buyer acknowledges that the Stock is not registered under the U.S. Securities Act, or

any state securities laws, and that the Stock may not be transferred or sold except pursuant to the registration provisions of the U.S. Securities Act or pursuant to an applicable exemption therefrom and subject to state securities laws and

regulations, as applicable.

Section 4.04 Brokers. Except for The Benchmark Company, no

broker, finder or investment banker is entitled to any brokerage, finder’s or other fee or commission in connection with the transactions contemplated by this Agreement or any Ancillary Document based upon arrangements made by or on behalf of

Buyer.

Section 4.05 Legal Proceedings. There are no Actions pending or, to Buyer’s

knowledge, threatened against or by Buyer or any Affiliate of Buyer that challenge or seek to prevent, enjoin or otherwise delay the transactions contemplated by this Agreement. No event has occurred or circumstances exist that may give rise or

serve as a basis for any such Action.

Section 4.06 Consideration Shares. The Consideration Shares

issued to Seller hereunder have been duly and validly authorized and, upon issuance pursuant to the terms of this Agreement, will be duly and validly issued, fully paid and non-assessable and will be issued

free and clear of any liens or other restrictions (other than restrictions on transfer under applicable state and federal securities laws), and the holder of the Consideration Shares shall be entitled to all rights accorded to a holder of Buyer

Common Stock. The issuance and delivery of the Consideration Shares does not (a) obligate the Buyer to offer to issue, or issue, shares of Buyer Common Stock or other securities to any Person (other than the Seller) pursuant to any preemptive

rights, rights of first refusal, rights of participation or similar rights, except such rights as have been or will be waived, or (b) result in any adjustment (automatic, at the election of any Person or otherwise) of the exercise, conversion,

exchange or reset price under, or any other anti-dilution adjustment pursuant to, any outstanding securities of the Buyer. Subject to the accuracy of the representations and warranties made by the Seller

in Section 3.26, the offer and sale of the Consideration Shares to Seller is, and will be, (i) exempt from the registration and prospectus delivery requirements of the U.S. Securities Act and (ii) exempt from

(or otherwise not subject to) the registration and qualification requirements of applicable securities laws of the states of the United States.

Section 4.07 SEC Reports. The Buyer has filed or

furnished, as applicable, all forms, statements, certifications, reports and documents required to be filed or furnished by it with the SEC Section 13, 14(a) and 15(d) of the Exchange Act for the one (1) year preceding the date of this

Agreement. As of the time it was filed with, or furnished to, the SEC (or, if amended or superseded by a filing prior to the date of this Agreement, then on the date of such filing), each of the filed SEC Reports complied in all material respects

with the applicable requirements of the Exchange Act, and, as of the time they were filed or furnished, none of the filed SEC Reports 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 light of the circumstances under which they were made, not misleading. There are no material outstanding or unresolved comments from the SEC staff with respect to the SEC Reports. To the

Buyer’s knowledge, none of the SEC Reports are the subject of an ongoing SEC review. The interactive data in eXtensible Business Reporting Language included in the SEC Reports fairly presents the information called for in all material respects

and has been prepared in accordance with the SEC’s rules and guidelines applicable thereto. The Buyer is not, and has never been, an issuer subject to Rule 144(i) under the U.S. Securities Act.

Section 4.08 Buyer Financial Statements. The consolidated financial statements of the

Buyer included in the SEC Reports (collectively, the “Buyer Financial Statements”) 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 to the extent corrected by a subsequent restatement) and fairly present in all material respects the consolidated financial position of the Buyer and its subsidiaries as of the dates indicated, and the results of its

operations and cash flows for the periods therein specified, and have been prepared in accordance with GAAP applied on a consistent basis throughout the periods therein specified (except as otherwise noted therein, and except that any unaudited

financial statements may not contain certain footnotes and are subject to normal and recurring year-end adjustments). Except as set forth in the Buyer Financial Statements filed prior to the date of this

Agreement, the Buyer has not incurred any material liabilities, contingent or otherwise, except (i) those incurred in the ordinary course of business, consistent with past practices since the date of such financial statements or

(ii) liabilities not required under GAAP to be reflected in the Buyer Financial Statements.

Section 4.09 NASDAQ. The issued and outstanding shares of Buyer Common Stock are registered

pursuant to Section 12(b) of the Exchange Act and are listed for trading on NASDAQ. Buyer is in compliance in all material respects with all listing requirements of NASDAQ applicable to Buyer. As of the date of this Agreement, there is no suit,

action, proceeding or investigation pending or, to the knowledge of Buyer, threatened against Buyer by NASDAQ or the SEC, respectively, to prohibit or terminate the listing of the Buyer Common Stock on NASDAQ or to deregister the Buyer Common Stock

under the Exchange Act. Buyer has taken no action as of the date of this Agreement that is designed to terminate the registration of the Buyer Common Stock under the Exchange Act.

Section 4.10 Sarbanes-Oxley Act. Buyer is, and since January 1, 2025 has been, in compliance

in all material respects with all applicable requirements of the Sarbanes-Oxley Act of 2002 and applicable rules and regulations promulgated by the SEC thereunder.

Section 4.11 Investment Company Act. Buyer is

not, and immediately after the transactions contemplated by this Agreement will not be, an “investment company” within the meaning of the U.S. Investment Company Act of 1940, as amended.

Section 4.12 No Integration. The Company has not, directly or indirectly, sold, offered for

sale, solicited offers to buy or otherwise negotiated in respect of, any security (as defined in the U.S. Securities Act) which, to its knowledge, is or will be (i) integrated with the offer and sale of the Consideration Shares pursuant to this

Agreement for purposes of the U.S. Securities Act or (ii) aggregated with prior offerings by Buyer for the purposes of the rules and regulations of NASDAQ. Assuming the accuracy of the representations and warranties of the Seller set forth in

Section 3.26, neither Buyer, any of its Affiliates, its subsidiaries nor any Person acting on their behalf has, directly or indirectly, at any time within the past six (6) months, made any offers or sales of any Buyer security or solicited

any offers to buy any Buyer security, under circumstances that would adversely affect reliance by Buyer on Section 4(a)(2) and/or Rule 506 of Regulation D promulgated thereunder for the exemption from registration for the issuance of the

Consideration Shares.

ARTICLE V

COVENANTS

Section 5.01 Conduct of Business Prior to the Closing. From the date hereof until the

Closing, except as otherwise provided in this Agreement or consented to in writing by Buyer (which consent shall not be unreasonably withheld, conditioned or delayed), Seller shall, and shall cause the Company to, (x) conduct the business of

the Company in the ordinary course of business consistent with past practice; and (y) use reasonable best efforts to maintain and preserve intact the current organization, business and franchise of the Company and to preserve the rights,

franchises, goodwill and relationships of its employees, customers, lenders, suppliers, regulators and others having business relationships with the Company. Without limiting the foregoing, from the date hereof until the Closing Date, Seller shall

cause the Company to:

(a) preserve and maintain all of its Permits;

(b) pay its debts, Taxes and other obligations when due;

they were on the date of this Agreement, subject to reasonable wear and tear;

(d) continue in full

force and effect without modification all Insurance Policies, except as required by applicable Law;

(e) defend and protect its properties and assets from infringement or usurpation;

(f) perform all of its obligations under all Contracts relating to or affecting its properties, assets or

business;

(g) maintain its books and records in accordance with

past practice;

(h) comply in all material respects with all applicable Laws; and

(i) not take or permit any action that would cause any of the changes, events or conditions described in

Section 3.08 to occur.

Section 5.02 Access to Information. From the date hereof until the

Closing, Seller shall, and shall cause the Company to, (a) afford Buyer and its Representatives full and free access to and the right to inspect all of the Real Property, properties, assets, premises, books and records, Contracts and other

documents and data related to the Company; (b) furnish Buyer and its Representatives with such financial, operating and other data and information related to the Company as Buyer or any of its Representatives may reasonably request; and

(c) instruct the Representatives of Seller and the Company to cooperate with Buyer in its investigation of the Company. Without limiting the foregoing, Seller shall permit Buyer and its Representatives to conduct environmental due diligence of

the Company and the Real Property, including the collecting and analysis of samples of indoor or outdoor air, potentially hazardous building materials, surface water, groundwater or surface or subsurface land on, at, in, under or from the Company

and the Real Property. Any investigation pursuant to this Section 5.02 shall be conducted in such manner as not to interfere unreasonably with the conduct of the business of Seller or the Company. No investigation by Buyer or other information

received by Buyer shall operate as a waiver or otherwise affect any representation, warranty or agreement given or made by Seller in this Agreement.

Section 5.03 No Solicitation of Other Bids.

(a) Seller shall not, and shall not authorize or permit any of its Affiliates (including the Company) or

any of its or their Representatives to, directly or indirectly, (i) encourage, solicit, initiate, facilitate or continue inquiries regarding an Acquisition Proposal; (ii) enter into discussions or negotiations with, or provide any

information to, any Person concerning a possible Acquisition Proposal; or (iii) enter into any agreements or other instruments (whether or not binding) regarding an Acquisition Proposal. Seller shall immediately cease and cause to be

terminated, and shall cause its Affiliates (including the Company) and all of its and their Representatives to immediately cease and cause to be terminated, all existing discussions or negotiations with any Persons conducted heretofore with respect

to, or that could lead to, an Acquisition Proposal. For purposes hereof, “Acquisition Proposal” shall mean any inquiry, proposal or offer from any Person (other than Buyer or any of its Affiliates) concerning (x) a merger,

consolidation, liquidation, recapitalization, share exchange or other business combination transaction involving the Company; (y) the issuance or acquisition of shares of capital stock or other equity securities of the Company; or (z) the

sale, lease, exchange or other disposition of any significant portion of the Company’s properties or assets.

(b) In addition to the other obligations under this Section 5.03, Seller shall promptly (and in any

event within three Business Days after receipt thereof by Seller or its Representatives) advise Buyer orally and in writing of any Acquisition Proposal, any request for information with respect to any Acquisition Proposal, or any inquiry with

respect to or which could reasonably be expected to result in an Acquisition Proposal, the material terms and conditions of such request, Acquisition Proposal or inquiry, and the identity of the Person making the same.

noncompliance with this Section 5.03 shall include having such provision specifically enforced by any court having equity jurisdiction, it being acknowledged and agreed that any such breach or threatened breach shall cause irreparable injury to

Buyer and that money damages would not provide an adequate remedy to Buyer.

Section 5.04 Notice of Certain

Events.

(a) From the date hereof until the Closing, Seller shall promptly notify Buyer in writing

of:

(i) any fact, circumstance, event or action the existence, occurrence or taking of which

(A) has had, or could reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect, (B) has resulted in, or could reasonably be expected to result in, any representation or warranty made by Seller or the

Members hereunder not being true and correct or (C) has resulted in, or could reasonably be expected to result in, the failure of any of the conditions set forth in Section 7.02 to be satisfied;

(ii) any notice or other communication from any Person alleging that the consent of such Person is or may be

required in connection with the transactions contemplated by this Agreement;

(iii) any notice or

other communication from any Governmental Authority in connection with the transactions contemplated by this Agreement; and

(iv) any Actions commenced or, to Seller’s Knowledge, threatened against, relating to or involving

or otherwise affecting Seller or the Company that, if pending on the date of this Agreement, would have been required to have been disclosed pursuant to Section 3.17 or that relates to the consummation of the transactions contemplated by this

Agreement.

(b) Buyer’s receipt of information pursuant to this Section 5.04 shall not

operate as a waiver or otherwise affect any representation, warranty or agreement given or made by Seller in this Agreement (including Section 8.02 and Section 9.01) and shall not be deemed to amend or supplement the Disclosure Schedules.

Section 5.05 Resignations. Seller shall deliver to Buyer written resignations, effective as

of the Closing Date, of the officers and directors of the Company set forth on Section 5.05 of the Disclosure Schedules/requested by Buyer at least five Business Days prior to the Closing.

Section 5.06 Confidentiality. From and after

the Closing, Seller shall, and shall cause its Affiliates to, hold, and shall use its reasonable best efforts to cause its or their respective Representatives to hold, in confidence any and all information, whether written or oral, concerning the

Company, except to the extent that Seller can show that such information (a) is generally available to and known by the public through no fault of Seller, any of its Affiliates or their respective Representatives; (b) is lawfully acquired

by Seller, any of its Affiliates or their respective Representatives from and after the Closing from sources which are not prohibited from disclosing such information by a legal, contractual or fiduciary obligation; or (c) is disclosed with the

prior written consent of the Buyer. If Seller or any of its Affiliates or their respective Representatives are compelled to disclose any information by judicial or administrative process or by other requirements of Law, Seller shall promptly notify

Buyer in writing and shall disclose only that portion of such information which Seller is advised by its counsel in writing is legally required to be disclosed, provided that Seller shall use reasonable best efforts to obtain an appropriate

protective order or other reasonable assurance that confidential treatment will be accorded such information.

Section 5.07 Non-Competition; Non-Solicitation.

(a) For a period of three (3) years commencing on the Closing Date (the “Restricted

Period”), Seller and the Members shall not, and shall not permit any of their Affiliates to, directly or indirectly, (i) engage in or assist others in engaging in the Restricted Business in the Territory; (ii) have an interest in

any Person that engages directly or indirectly in the Restricted Business in the Territory in any capacity, including as a partner, shareholder, member, employee, principal, agent, trustee or consultant; or (iii) intentionally interfere in any

material respect with the business relationships formed prior to the date of this Agreement between the Company and customers or suppliers of the Company. Notwithstanding the foregoing, Seller and the Members may own, directly or indirectly, solely

as an investment, securities of any Person traded on any national securities exchange if Seller or the Members are not a controlling Person of, or a member of a group which controls, such Person and does not, directly or indirectly, own 5% or more

of any class of securities of such Person.

(b) During the Restricted Period, Seller and the Members

shall not, and shall not permit any of its Affiliates to, directly or indirectly, hire or solicit any employee of the Company or encourage any such employee to leave such employment or hire any such employee who has left such employment, except

pursuant to a general advertisement or solicitation which is not directed specifically to any such employees; provided, that nothing in this Section 5.07(b) shall prevent Seller or the Members or any of their Affiliates from hiring

(i) any employee whose employment has been terminated by the Company or Buyer or (ii) after 180 days from the date of termination of employment, any employee whose employment has been terminated by the employee.

Affiliates to, directly or indirectly, solicit or entice, or attempt to solicit or entice, any clients or customers of the Company for purposes of diverting their business or services from the Company.

(d) Seller and the Members acknowledge that a breach or

threatened breach of this Section 5.07 would give rise to irreparable harm to Buyer, 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 Seller or the Members of

any such obligations, Buyer 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 temporary restraining order, an injunction, specific

performance and any other relief that may be available from a court of competent jurisdiction (without any requirement to post bond).

(e) Seller and the Members acknowledge that the restrictions contained in this Section 5.07 are

reasonable and necessary to protect the legitimate interests of Buyer and constitute a material inducement to Buyer to enter into this Agreement and consummate the transactions contemplated by this Agreement. In the event that any covenant contained

in this Section 5.07 should ever be adjudicated to exceed the time, geographic, product or service, or other limitations permitted by applicable Law in any jurisdiction, then any court is expressly empowered to reform such covenant, and such

covenant shall be deemed reformed, in such jurisdiction to the maximum time, geographic, product or service, or other limitations permitted by applicable Law. The covenants contained in this Section 5.07 and each provision hereof are severable

and distinct covenants and provisions. The invalidity or unenforceability of any such covenant or provision as written shall not invalidate or render unenforceable the remaining covenants or provisions hereof, and any such invalidity or

unenforceability in any jurisdiction shall not invalidate or render unenforceable such covenant or provision in any other jurisdiction.

Section 5.08 Governmental Approvals and Consents.

(a) Each party hereto shall, as promptly as reasonably practicable, (i) make, or cause or be made,

all filings and submissions required under any Law applicable to such party or any of its Affiliates; and (ii) use reasonable best efforts to obtain, or cause to be obtained, all consents, authorizations, orders and approvals from all

Governmental Authorities that may be or become necessary for its execution and delivery of this Agreement and the performance of its obligations pursuant to this Agreement and the Ancillary Documents. Each party shall cooperate fully with the other

party and its Affiliates in promptly seeking to obtain all such consents, authorizations, orders and approvals. The parties hereto shall not willfully take any action that will have the effect of delaying, impairing or impeding the receipt of any

required consents, authorizations, orders and approvals.

(b) Seller and Buyer shall use reasonable

best efforts to give all notices to, and obtain all consents from, all third parties that are described in Section 3.05 and Section 4.02 of the Disclosure Schedules.

(a) and (b) above, each of the parties hereto shall use all reasonable best efforts to:

(i) respond to any inquiries by any Governmental

Authority regarding antitrust or other matters with respect to the transactions contemplated by this Agreement or any Ancillary Document;

(ii) avoid the imposition of any order or the taking of any action that would restrain, alter or enjoin the

transactions contemplated by this Agreement or any Ancillary Document; and

(iii) in the event any

Governmental Order adversely affecting the ability of the parties to consummate the transactions contemplated by this Agreement or any Ancillary Document has been issued, to have such Governmental Order vacated or lifted.

(d) If any consent, approval or authorization necessary to preserve any right or benefit under any

Contract to which the Company is a party is not obtained prior to the Closing, Seller shall, subsequent to the Closing, cooperate with Buyer and the Company in attempting to obtain such consent, approval or authorization as promptly thereafter as

practicable. If such consent, approval or authorization cannot be obtained, Seller shall use its reasonable best efforts to provide the Company with the rights and benefits of the affected Contract for the term thereof, and, if Seller provides such

rights and benefits, the Company shall assume all obligations and burdens thereunder.

(e) All

analyses, appearances, meetings, discussions, presentations, memoranda, briefs, filings, arguments, and proposals made by or on behalf of either party before any Governmental Authority or the staff or regulators of any Governmental Authority, in

connection with the transactions contemplated hereunder (but, for the avoidance of doubt, not including any interactions between Seller or the Company with Governmental Authorities in the ordinary course of business, any disclosure which is not

permitted by Law or any disclosure containing confidential information) shall be disclosed to the other party hereunder in advance of any filing, submission or attendance, it being the intent that the parties will consult and cooperate with one

another, and consider in good faith the views of one another, in connection with any such analyses, appearances, meetings, discussions, presentations, memoranda, briefs, filings, arguments, and proposals. Each party shall give notice to the other

party with respect to any meeting, discussion, appearance or contact with any Governmental Authority or the staff or regulators of any Governmental Authority, with such notice being sufficient to provide the other party with the opportunity to

attend and participate in such meeting, discussion, appearance or contact.

(f) Notwithstanding the

foregoing, nothing in this Section 5.08 shall require, or be construed to require, Buyer or any of its Affiliates to agree to (i) sell, hold, divest, discontinue or limit, before or after the Closing Date, any assets, businesses or

interests of Buyer, the Company or any of their respective Affiliates; (ii) any conditions relating to, or changes or restrictions in, the operations of any such assets, businesses or interests which, in either case, could reasonably be

expected to result in a Material Adverse Effect or materially and adversely impact the economic or business benefits to Buyer of the transactions contemplated by this Agreement; or (iii) any material modification or waiver of the terms and

conditions of this Agreement.

Section 5.09 R&W Insurance Policy. Prior

to the Closing, Buyer shall use reasonable best efforts to obtain and bind the R&W Insurance Policy on the terms and conditions set forth on Exhibit B, which terms shall include customary subrogation language reasonably acceptable to Seller.

Seller and the Company shall cooperate with Buyer’s efforts and provide assistance as reasonably requested by Buyer to obtain and bind the R&W Insurance Policy. Prior to the Closing, Seller and Buyer shall each pay or cause to be paid, 50%

all costs and expenses related to the R&W Insurance Policy, including the total premium, underwriting costs, brokerage commissions, and other fees and expenses of such policy, which amounts shall be characterized as a Transaction Expense.

Section 5.10 Books and Records.

(a) In order to facilitate the resolution of any claims made against or incurred by Seller prior to the

Closing, or for any other reasonable purpose, for a period of four years after the Closing, Buyer shall:

(i) retain the books and records (including personnel files) of the Company relating to periods prior to

the Closing in a manner reasonably consistent with the prior practices of the Company; and

(ii) upon

reasonable notice, afford the Representatives of Seller reasonable access (including the right to make, at Seller’s expense, photocopies), during normal business hours, to such books and records;

provided, however, that any books and records related to Tax matters shall be retained pursuant to the periods set

forth in ARTICLE VI.

(b) In order to facilitate the resolution of any claims made by or against or

incurred by Buyer or the Company after the Closing, or for any other reasonable purpose, for a period of four years following the Closing, Seller shall:

(i) retain the books and records (including personnel files) of Seller which relate to the Company and

its operations for periods prior to the Closing; and

(ii) upon reasonable notice, afford the

Representatives of Buyer or the Company reasonable access (including the right to make, at Buyer’s expense, photocopies), during normal business hours, to such books and records;

provided, however, that any books and records related to Tax matters shall be retained pursuant to the periods set

forth in ARTICLE VI.

provide the other party with access to any books or records (including personnel files) pursuant to this Section 5.10 where such access would violate any Law.

Section 5.11 Closing Conditions From the date hereof until the Closing, each party hereto shall,

and Seller shall cause the Company to, use reasonable best efforts to take such actions as are necessary to expeditiously satisfy the closing conditions set forth in ARTICLE VII hereof.

Section 5.12 Public Announcements. Unless otherwise required by applicable Law or stock exchange

requirements (based upon the reasonable advice of counsel), no party to this Agreement shall make any public announcements in respect of this Agreement or the transactions contemplated hereby or otherwise communicate with any news media without the

prior written consent of the other party (which consent shall not be unreasonably withheld, conditioned or delayed), and the parties shall cooperate as to the timing and contents of any such announcement.

Section 5.13 Further Assurances. Following the Closing, each of the parties hereto shall, and

shall cause their respective Affiliates to, execute and deliver such additional documents, instruments, conveyances and assurances and take such further actions as may be reasonably required to carry out the provisions hereof and give effect to the

transactions contemplated by this Agreement.

Section 5.14 Share Legends. The certificate(s) or DRS

advice(s) representing the Consideration Shares will bear the following legend:

“THE SHARES REPRESENTED HEREBY HAVE NOT BEEN

REGISTERED UNDER THE SECURITIES ACT OF 1933, AND HAVE BEEN ACQUIRED FOR INVESTMENT AND NOT WITH A VIEW TO, OR IN CONNECTION WITH, THE SALE OR DISTRIBUTION THEREOF. NO SUCH TRANSFER MAY BE EFFECTED WITHOUT AN EFFECTIVE REGISTRATION STATEMENT RELATED

THERETO OR AN OPINION OF COUNSEL IN A FORM SATISFACTORY TO THE COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED UNDER THE SECURITIES ACT OF 1933.”

Section 5.15 NASDAQ Listing. Buyer shall use reasonable best efforts to maintain the listing and

trading of Buyer Common Stock on NASDAQ or another national securities exchange designated as such by the SEC and, in accordance therewith, will use reasonable best efforts to comply in all material respects with Buyer’s reporting, filing and

other obligations under the rules and regulations of the SEC and the applicable national securities exchange.

Section 5.16 Integration. Buyer shall not, and shall use its reasonable best efforts to ensure that no

Affiliate of Buyer shall, sell, offer for sale or solicit offers to buy or otherwise negotiate in respect of any security (as defined in Section 2 of the U.S. Securities Act) that will be integrated with the offer or sale of the Consideration

Shares in a manner that would require the registration under the U.S. Securities Act of the issuance of the Consideration Shares to Seller, or that will be integrated with the offer or sale of the Consideration Shares for purposes of the rules and

regulations of NASDAQ or any other applicable national securities exchange 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.

Section 5.17 Removal of Legends.

(a) In connection with any sale, assignment, transfer or other disposition of the Consideration Shares

pursuant to Rule 144 or pursuant to any other exemption under the U.S. Securities Act such that the purchaser acquires freely tradable shares and upon compliance by Seller with the requirements of this Agreement, if requested by Seller by

notice to Buyer, Buyer shall request its transfer agent to remove any restrictive legends related to the book entry account holding such shares and make a new, unlegended entry for such book entry shares sold or disposed of without restrictive

legends within one (1) Business Day of following any such request therefor from Seller, provided that Buyer has timely received from Seller customary representations and other documentation reasonably acceptable to Buyer in connection

therewith. Buyer shall be responsible for the fees of its transfer agent and its legal counsel associated with such legend removal.

(b) Subject to receipt from Seller by Buyer and the transfer agent of customary representations and other

documentation reasonably acceptable to Buyer and the transfer agent in connection therewith, upon the earliest of such time as the Consideration Shares (i) have been registered under the U.S. Securities Act pursuant to an effective registration

statement, (ii) have been sold pursuant to Rule 144, or (iii) are eligible for resale under Rule 144(b)(1) without the requirement for Buyer to be in compliance with the current public information requirements under Rule 144(c)(1) (or any

successor provision), Buyer shall, in accordance with the provisions of this Section 5.17(b) and within two (2) Business Days in cases of the foregoing clause (iii), and within one (1) Business Day in the case of the foregoing clauses

(i) and (ii), in each case, following any request therefor from Seller accompanied by such customary and reasonably acceptable documentation referred to above, (A) deliver to the transfer agent irrevocable instructions that the transfer

agent shall make a new, unlegended entry for such book entry shares, and (B) cause its counsel to deliver to the transfer agent one or more opinions to the effect that the removal of such legends in such circumstances may be effected under the

U.S. Securities Act if required by the transfer agent to effect the removal of the legend in accordance with the provisions of this Agreement.

Section 5.18 Registration Rights. As soon as practicable (and in any event within thirty

(30) calendar days of the date of this Agreement), Buyer shall file a registration statement on Form S-3 (or other appropriate form of the Company is not then eligible to use Form S-3) providing for the resale by the Seller or its Affiliates of the Buyer Common Stock issued or issuable to the Seller as Consideration Shares under this Agreement (the “Registrable

Securities”). Buyer shall use its reasonable best efforts to (i) cause such registration statement to become effective as soon as practicable (and in any event within seventy-five (75) calendar days after the date of this

Agreement), and (ii) keep such registration statement continuously effective pursuant to Rule 415 at all times until the earlier to occur of (i) the date on which the Seller and its Affiliates shall have resold all Registrable Securities,

or (ii) the date on which such Registrable Securities may be resold by the Seller and/or its Affiliates without registration and without regard to any volume or

manner-of-sale limitations by reason of Rule 144 under the U.S. Securities Act (“Rule 144”), without the requirement for Buyer to be in compliance

with the current public information requirement under Rule 144. In the event that the number of shares available under the initial registration statement at any time is insufficient to cover the Registrable Securities, Buyer shall, to the extent

necessary and permissible, amend the initial registration statement or file a new registration statement so as to cover all of such Registrable Securities as soon as practicable, but in any event not less than ten (10) Business Days after the

necessity therefor arises. Buyer shall use its reasonable best efforts to cause such new registration statement to become effective as soon as practicable. Seller shall have at least three (3) Business Days to review and comment upon each such

registration statement prior to the anticipated filing date and any amendment or supplement thereto, and each such registration statement shall contain a plan of distribution reasonably acceptable to Seller. Seller shall furnish all information

reasonably requested by Buyer and as shall be reasonably required in connection with any registration referred to in this Section 5.19.

Section 5.19 PPP Matter Insurance. In the event the

Company receives from a Company insurance carrier any reimbursement of the Company’s legal costs in connection with the PPP Matter and such reimbursement amount relates to periods prior to the Closing Date (with any such amount related to

periods covering both before and on or after the Closing Date to be prorated) (“Pre-Closing Reimbursement Amounts”), Buyer shall cause the Company to pay over to Seller such Pre-Closing Reimbursement Amounts within five (5) Business Days of receipt thereof net of any out-of-pocket expenses reasonably

incurred in the collection thereof.

Section 5.20 Excess Parachute Payments. If any “excess

parachute payments” within the meaning of Section 280G(b) of the Code are identified, Seller and the Company shall undertake a cleansing vote prior to close.

ARTICLE VI

TAX MATTERS

Section 6.01 Tax Covenants.

(a) Without the prior written consent of Buyer, Seller shall not (and, prior to the Closing, Seller shall

cause the Company, its Affiliates and their respective Representatives not to), to the extent it may affect, or relate to, the Company, make, revoke, change or rescind any Tax election, adopt or change any accounting method, extend or waive any

limitation period with respect to any claim or assessment for Taxes, prepare any Tax Return in a manner which is inconsistent with past practices of the Company, surrender of a right to claim a refund of Taxes with respect to the income, operations

or property of the Company, enter into any closing agreement, settlement or compromise of any claim or assessment, initiate a voluntary disclosure or similar procedure, in each case in respect of Taxes, amend any Tax Return or take any position on

any Tax Return, take any action, omit to take any action or enter into any other transaction that would have the effect of increasing the Tax liability or reducing any Tax asset of Buyer or the Company in respect of any Post-Closing Tax Period.

(b) All transfer, documentary, sales, use, stamp,

registration, value added and other such Taxes and fees (including any penalties and interest) incurred in connection with this Agreement and the Ancillary Documents (including any real property transfer Tax and any other similar Tax) shall be borne

and paid by fifty percent (50%) by Buyer and fifty percent (50%) by Seller when due. Seller or Buyer shall, based upon applicable reporting requirements, timely file any Tax Return or other document with respect to such Taxes or fees (and the non-filing party shall cooperate with respect thereto as necessary including, without limitation, by paying such party’s share of such Taxes to the filing party no later than three (3) Business Days prior

to the filing deadline of the applicable Tax Return or other document with respect to such Taxes or fees).

(c)

Buyer shall prepare, or cause to be prepared, all Tax Returns required to be filed by the Company after the Closing Date with respect to a Pre-Closing Tax Period. Any such Tax Return shall be

prepared in a manner consistent with past practice (unless otherwise required by Law) and without a change of any election or any accounting method and shall be submitted by Buyer to Seller (together with schedules, statements and, to the extent

requested by Seller, supporting documentation) at least 30 days prior to the due date (including extensions) of such Tax Return. If Seller objects to any item on any such Tax Return, it shall, within ten days after delivery of such Tax Return,

notify Buyer in writing that it so objects, specifying with particularity any such item and stating the specific factual or legal basis for any such objection. If a notice of objection shall be duly delivered, Buyer and Seller shall negotiate in

good faith and use their reasonable best efforts to resolve such items. If Buyer and Seller are unable to reach such agreement within ten days after receipt by Buyer of such notice, the disputed items shall be resolved by the Independent Accountant

and any determination by the Independent Accountant shall be final. The Independent Accountant shall resolve any disputed items within twenty days of having the item referred to it pursuant to such procedures as it may require. If the Independent

Accountant is unable to resolve any disputed items before the due date for such Tax Return, the Tax Return shall be filed as prepared by Buyer and then amended to reflect the Independent Accountant’s resolution. The costs, fees and expenses of

the Independent Accountant shall be borne equally by Buyer and Seller. The preparation and filing of any Tax Return of the Company that does not relate to a Pre-Closing Tax Period shall be exclusively within

the control of Buyer. To the extent that Buyer pays any Taxes pursuant to this Section 6.01(c) of or with respect to the Company (including, without limitation, any Taxes of the Seller with respect to the Company) attributable or allocable to

any Pre-Closing Tax Period (including, without limitation, the Taxes attributable to the portion of any Straddle Period ending at the end of the Closing Date) except to the extent such Taxes were taken into

account as a current liability in determining Closing Working Capital, Seller shall promptly remit to Buyer such amounts upon written demand from Buyer.

Section 6.02 Termination of Existing Tax Sharing Agreements. Seller shall terminate or cause to be

terminated any and all existing Tax sharing agreements (whether written or not) binding upon the Company as of the Closing Date. After Closing, none of the Company, Seller nor any of Seller’s Affiliates and their respective Representatives

shall have any further rights or liabilities thereunder.

Section 6.03 Reserved.

Section 6.04 Straddle Period. In the case of Taxes that are payable with respect to a taxable period

that begins before and ends after the Closing Date (each such period, a “Straddle Period”), the portion of any such Taxes that are treated as Pre-Closing Taxes for purposes of this Agreement

shall be:

(a) in the case of Taxes (i) based upon, or related to, income, receipts, profits, wages,

capital or net worth, (ii) imposed in connection with the sale, transfer or assignment of property, or (iii) required to be withheld, deemed equal to the amount which would be payable if the taxable year ended with the Closing Date; and

(b) in the case of other Taxes, deemed to be the amount of such Taxes for the entire period multiplied by a

fraction the numerator of which is the number of days in the period ending on the Closing Date and the denominator of which is the number of days in the entire period.

Section 6.05 Contests. Buyer agrees to give written notice to Seller of the receipt of any written

notice by the Company, Buyer or any of Buyer’s Affiliates from a taxing authority which involves the assertion of any claim, or the commencement of any Action, in respect of Taxes for which an indemnity may be sought by Buyer pursuant to

ARTICLE VIII (a “Tax Claim”); provided, that failure to comply with this provision shall not affect Buyer’s right to seek or obtain such indemnification in accordance therewith. Buyer shall control the contest or

resolution of any Tax Claim; provided, however, that Buyer shall obtain the prior written consent of Seller (which consent shall not be unreasonably withheld, conditioned or delayed) before entering into any settlement of a Tax Claim or

ceasing to defend such Tax Claim; and, provided further, that Seller shall be entitled to participate in the defense of such Tax Claim and to employ counsel of its choice for such purpose, the fees and expenses of which separate counsel shall

be borne solely by Seller.

Section 6.06 Cooperation and Exchange of Information. Seller and Buyer

shall provide each other with such cooperation and information as either of them reasonably may request of the other in filing any Tax Return pursuant to this ARTICLE VI or in connection with any audit or other proceeding in respect of Taxes of the

Company. Such cooperation and information shall include providing copies of relevant Tax Returns or portions thereof, together with accompanying schedules, related work papers and documents relating to rulings or other determinations by tax

authorities. Each of Seller and Buyer shall retain all Tax Returns, schedules and work papers, records and other documents in its possession relating to Tax matters of the Company for any taxable period beginning before the Closing Date until the

expiration of the statute of limitations of the taxable periods to which such Tax Returns and other documents relate, without regard to extensions except to the extent notified by the other party in writing of such extensions for the respective Tax

periods. Prior to transferring, destroying or discarding any Tax Returns, schedules and work papers, records and other documents in its possession relating to Tax matters of the Company for any taxable period beginning before the Closing Date,

Seller or Buyer (as the case may be) shall provide the other party with reasonable written notice and offer the other party the opportunity to take custody of such materials.

Section 6.07 No Deemed Asset Acquisition. No election shall

be made in connection with the transactions contemplated by this Agreement under Section 338 or any similar provision of federal, state or local income Tax law.

Section 6.08 Allocation. The parties agree to allocate seventy-five percent (75%) of the Purchase Price to the

stock of V-Tek and twenty-five percent (25%) to the stock of A&J for U.S. federal income tax purposes.

Section 6.09 Overlap. To the extent that any obligation or responsibility pursuant to ARTICLE VIII may

overlap with an obligation or responsibility pursuant to this ARTICLE VI, the provisions of ARTICLE VIII shall govern.

ARTICLE VII

CONDITIONS TO CLOSING

Section 7.01 Conditions to Obligations of All Parties. The obligations of each party to consummate the

transactions contemplated by this Agreement shall be subject to the fulfillment, at or prior to the Closing, of each of the following conditions:

(a) No Governmental Authority shall have enacted, issued, promulgated, enforced or entered any Governmental

Order which is in effect and has the effect of making the transactions contemplated by this Agreement illegal, otherwise restraining or prohibiting consummation of such transactions or causing any of the transactions contemplated hereunder to be

rescinded following completion thereof.

(b) Seller shall have received all consents, authorizations, orders

and approvals from the Governmental Authorities referred to in Section 3.05 of the Disclosure Schedules and Buyer shall have received all consents, authorizations, orders and approvals from the Governmental Authorities referred to in

Section 4.02 of the Disclosure Schedules, in each case, in form and substance reasonably satisfactory to Buyer and Seller, and no such consent, authorization, order and approval shall have been revoked.

Section 7.02 Conditions to Obligations of Buyer. The obligations of Buyer to consummate the

transactions contemplated by this Agreement shall be subject to the fulfillment or Buyer’s waiver, at or prior to the Closing, of each of the following conditions:

(a) Other than the representations and warranties of Seller and the Members contained in Section 3.01,

Section 3.02, Section 3.03, Section 3.04, Section 3.05 and Section 3.25, the representations and warranties of Seller and the Members contained in this Agreement and the Ancillary Documents shall be true and correct in all

respects (without giving effect to any limitation indicated by the words “Material Adverse Effect,” “in all material respects,” “in any material respect,” “material,” or “materially”) on

and as of the date hereof and on and as of the Closing Date with the same effect as though made at and as of such date (except those representations and warranties that address matters only as of a specified date, the accuracy of which shall be

determined as of that specified date in all respects), except where the failure of such representations and warranties to be true and correct would not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect. The

representations and warranties of Seller and the Members contained in Section 3.01, Section 3.02, Section 3.03, Section 3.04, Section 3.05(a) and Section 3.25 shall be true and correct in all respects (except for de

minimis inaccuracies) on and as of the date hereof and on and as of the Closing Date with the same effect as though made at and as of such date (except those representations and warranties that address matters only as of a specified date, the

accuracy of which shall be determined as of that specified date in all respects).

(b) Seller shall have duly performed and complied in all

material respects with all agreements and covenants required by this Agreement and each of the Ancillary Documents to be performed or complied with by it prior to or on the Closing Date; provided, that, with respect to agreements and

covenants that are qualified by materiality, Seller shall have performed such agreements and covenants, as so qualified, in all respects.

(d) All approvals, consents and waivers that are listed on Section 3.05 of the Disclosure Schedules

shall have been received, and executed counterparts thereof shall have been delivered to Buyer at or prior to the Closing.

(e) From the date of this Agreement, there shall not have occurred any Material Adverse Effect, nor shall any

event or events have occurred that, individually or in the aggregate, with or without the lapse of time, could reasonably be expected to result in a Material Adverse Effect.

(f) The Ancillary Documents shall have been executed and delivered by the parties thereto and true and complete

copies thereof shall have been delivered to Buyer.

(g) Buyer shall have received resignations of the

directors and officers of the Company pursuant to Section 5.05.

(h) Buyer shall have obtained and

bound the R&W Insurance Policy on the terms and conditions reasonably satisfactory to Buyer and Seller.

(i)

At least three Business Days before Closing, Seller shall have delivered to Buyer the Closing Indebtedness Certificate and the Closing Transaction Expenses Certificate.

(j) Seller shall have delivered to Buyer the Estimated Closing Working Capital Statement contemplated in

Section 2.04(a)(ii).

(k) Seller shall have delivered to Buyer a good standing

certificate (or its equivalent) for the Company from the secretary of state or similar Governmental Authority of the jurisdiction under the Laws in which the Company is organized.

(l) Seller shall have delivered to Buyer a properly completed and duly executed IRS From W-9, Request for Taxpayer Identification Number and Certification, dated as of the Closing Date.

(m) Seller shall have delivered, or caused to be delivered, to Buyer stock certificates evidencing the Stock,

free and clear of Encumbrances, duly endorsed in blank or accompanied by stock powers or other instruments of transfer duly executed in blank and with all required stock transfer tax stamps affixed.

(n) Buyer shall have received a certificate, dated the Closing Date and signed by a duly authorized officer of

Seller, that each of the conditions set forth in Section 7.02(a) and Section 7.02(b) have been satisfied.

(o)

Buyer shall have received a certificate of the Secretary or an Assistant Secretary (or equivalent designee) of Seller certifying that attached thereto are true and complete copies of all resolutions adopted by the board of directors of

Seller authorizing the execution, delivery and performance of this Agreement and the Ancillary Documents to which it is a party and the consummation of the transactions contemplated hereby and thereby, and that all such resolutions are in full force

and effect and are all the resolutions adopted in connection with the transactions contemplated hereby and thereby.

(p)

Buyer shall have received a certificate of the Secretary or an Assistant Secretary (or equivalent designee) of Seller certifying the names and signatures of the officers of the Seller authorized to sign this Agreement, the Ancillary

Documents and the other documents to be delivered hereunder and thereunder.

(q) Seller shall have delivered

to Buyer such other documents or instruments as Buyer reasonably requests and are reasonably necessary to consummate the transactions contemplated by this Agreement.

(r) Buyer shall have submitted a Listing of Additional Shares notification form to NASDAQ regarding the

transactions under this Agreement and the issuance and listing of the Consideration Shares.

(s) Seller

shall have delivered to Buyer evidence of termination of the contracts set forth in Schedule 7.02(s).

Section 7.03 Conditions to Obligations of Seller. The obligations of Seller to consummate the

transactions contemplated by this Agreement shall be subject to the fulfillment or Seller’s waiver, at or prior to the Closing, of each of the following conditions:

(a) Other than the representations and warranties of Buyer

contained in Section 4.01 and Section 4.04, the representations and warranties of Buyer contained in this Agreement and the Ancillary Documents shall be true and correct in all respects (without giving effect to any limitation indicated by

the words “material adverse effect,” “in all material respects,” “in any material respect,” “material,” or “materially”) on and as of the date hereof and on and as of the Closing Date with

the same effect as though made at and as of such date (except those representations and warranties that address matters only as of a specified date, the accuracy of which shall be determined as of that specified date in all respects), except where

the failure of such representations and warranties to be so true and correct would not reasonably be expected to have, individually or in the aggregate, a material adverse effect on Buyer’s ability to consummate the transactions contemplated

by this Agreement. The representations and warranties of Buyer contained in Section 4.01 and Section 4.04 shall be true and correct in all respects on and as of the date hereof and on and as of the Closing Date with the same effect as

though made at and as of such date (except those representations and warranties that address matters only as of a specified date, the accuracy of which shall be determined as of that specified date in all respects).

(b) Buyer shall have duly performed and complied in all material respects with all agreements and covenants

required by this Agreement and each of the Ancillary Documents to be performed or complied with by it prior to or on the Closing Date.

have been received, and executed counterparts thereof shall have been delivered to Seller at or prior to the Closing.

(d)

The Ancillary Documents shall have been executed and delivered by the parties thereto and complete copies thereof shall have been delivered to Seller.

(e) Buyer shall have delivered to Seller cash in an amount equal to the Closing Date Payment by wire transfer of

immediately available funds, to an account or accounts designated at least two Business Days prior to the Closing Date by Seller in a written notice to Buyer.

(f) Buyer shall have delivered to third parties by wire transfer of immediately available fund that amount of

money due and owing from Seller to such third parties as Transaction Expenses as set forth on the Closing Transaction Expenses Certificate.

(g) Buyer shall have delivered to holders of outstanding Indebtedness, if any, by wire transfer of immediately

available funds that amount of money due and owing from the Company to such holder of outstanding Indebtedness as set forth on the Closing Indebtedness Certificate.

(h) Buyer shall have obtained and bound the R&W Insurance Policy on the terms and conditions reasonably

satisfactory to Buyer and Seller.

(i) Seller shall have received a certificate, dated the Closing Date and

signed by a duly authorized officer of Buyer, that each of the conditions set forth in Section 7.03(a) and Section 7.03(b) have been satisfied.

(j) Seller shall have received a certificate of the Secretary

or an Assistant Secretary (or equivalent officer) of Buyer certifying that attached thereto are true and complete copies of all resolutions adopted by the board of directors of Buyer authorizing the execution, delivery and performance of this

Agreement and the Ancillary Documents to which it is a party and the consummation of the transactions contemplated hereby and thereby, and that all such resolutions are in full force and effect and are all the resolutions adopted in connection with

the transactions contemplated hereby and thereby.

(k) Seller shall have received a certificate of the

Secretary or an Assistant Secretary (or equivalent officer) of Buyer certifying the names and signatures of the officers of Buyer authorized to sign this Agreement, the Ancillary Documents and the other documents to be delivered hereunder and

thereunder.

(l) Buyer shall have delivered to Seller such other documents or instruments as Seller

reasonably request and are reasonably necessary to consummate the transactions contemplated by this Agreement.

ARTICLE VIII

INDEMNIFICATION

Section 8.01 Survival. Subject to the limitations and other provisions of this Agreement, the

representations and warranties contained herein shall survive the Closing and shall remain in full force and effect until the date that is eighteen (18) months from the Closing Date; provided, that the representations and warranties in

Section 3.01, Section 3.02, Section 3.03, Section 3.04, Section 3.05, Section 3.25, Section 4.01, Section 4.02 and Section 4.04 shall survive for six years; and provided further, that the

representations and warranties in Section 3.22 shall survive until 60 days following the expiration of the applicable statute of limitations. All covenants and agreements of the parties contained herein that by their nature survive the Closing

shall survive the Closing for the period explicitly specified therein, or, if no period is specified, indefinitely. Notwithstanding the foregoing, any claims asserted in good faith with reasonable specificity (to the extent known at such time) and

in writing by notice from the non-breaching party to the breaching party prior to the expiration date of the applicable survival period shall not thereafter be barred by the expiration of the relevant

representation or warranty and such claims shall survive until finally resolved.

Section 8.02 Indemnification By Seller and the Members. Subject to the other terms and conditions of

this ARTICLE VIII, from and after Closing, Seller and the Members shall indemnify and defend each of Buyer and its Affiliates (including the Company) and their respective Representatives (collectively, the “Buyer Indemnitees”)

against, and shall hold each of them harmless from and against, and shall pay and reimburse each of them for, any and all Losses incurred or sustained by, or imposed upon, the Buyer Indemnitees based upon, arising out of, with respect to or by

reason of:

(a) any inaccuracy in or breach of any of the representations or warranties of Seller or the

Members contained in this Agreement or in any certificate or instrument delivered by or on behalf of Seller pursuant to this Agreement, as of the date such representation or warranty was made or as if such representation or warranty was made on and

as of the Closing Date (except for representations and warranties that expressly relate to a specified date, the inaccuracy in or breach of which will be determined with reference to such specified date);

(b) any breach or

non-fulfillment of any covenant, agreement or obligation to be performed by Seller pursuant to this Agreement;

deducted from the Purchase Price in the determination of the Closing Date Payment pursuant to Section 2.04(a)(i);

(d) Item 2 set forth on Section 3.07 of the Disclosure Schedules;

(e) the Civil Investigative Demand No. 26-02 issued by the United

States Department of Justice, District of Delaware, regarding V-Tek’s forgiven PPP loans (the “PPP Matter”); or

(f) any unpaid sales or use Tax liabilities of A&J solely in connection with A&J’s acquisition of

taxable tangible personal property pursuant to the A&J 2024 APA.

Section 8.03 Indemnification By

Buyer. Subject to the other terms and conditions of this ARTICLE VIII, from and after Closing, Buyer shall indemnify and defend each Seller and their Affiliates and their respective Representatives (collectively, the “Seller

Indemnitees”) against, and shall hold each of them harmless from and against, and shall pay and reimburse each of them for, any and all Losses incurred or sustained by, or imposed upon, the Seller Indemnitees based upon, arising out of,

with respect to or by reason of:

(a) any inaccuracy in or breach of any of the representations or

warranties of Buyer contained in this Agreement or in any certificate or instrument delivered by or on behalf of Buyer pursuant to this Agreement, as of the date such representation or warranty was made or as if such representation or warranty was

made on and as of the Closing Date (except for representations and warranties that expressly relate to a specified date, the inaccuracy in or breach of which will be determined with reference to such specified date); or

(b) any breach or non-fulfillment of any covenant, agreement or

obligation to be performed by Buyer pursuant to this Agreement.

Section 8.04 Certain Limitations.

The indemnification provided for in Section 8.02 and Section 8.03 shall be subject to the following limitations:

(a) Seller and the Members shall not be liable for any Losses pursuant to Section 8.02(a) until the

aggregate amount of such Losses exceed $50,000 (the “Basket”). Thereafter, the aggregate amount of all Losses for which Seller or the Members shall be liable pursuant to Section 8.02(a), other than in respect of Seller

Fundamental Representations (which Seller Fundamental Representations shall be limited in the manner set forth in Section 8.06(c)), shall not exceed $50,000 (the “Cap”) provided, however, that nothing herein shall limit or

impair Buyer’s right to recover covered Losses under the R&W Insurance Policy.

(b) The aggregate amount of all Losses for which Buyer shall

be liable pursuant to Section 8.03(a) shall not exceed $2,300,000.

the limitations set forth in Section 8.04(a) and Section 8.04(b) shall not (i) apply to Losses based upon, arising out of, with respect to or by reason of any inaccuracy in or breach of any representation or warranty in

Section 3.01, Section 3.02, Section 3.03, Section 3.04, Section 3.05, Section 3.22, and Section 3.25, (collectively, the “Seller Fundamental Representations”), or Section 4.01,

Section 4.02 and Section 4.04 (collectively, the “Buyer Fundamental Representations”); or (ii) affect or otherwise limit any claim made or available under the R&W Insurance Policy.

(d) For purposes of this ARTICLE VIII, (including for purposes of determining the existence of any inaccuracy

in, or breach of, any representation or warranty and for calculating the amount of any Loss with respect thereto), any inaccuracy in or breach of any representation or warranty shall be determined without regard to any materiality, Material Adverse

Effect, in all material respects or other similar qualification contained in or otherwise applicable to such representation or warranty.

Section 8.05 Indemnification Procedures. The party making a claim under this ARTICLE VIII is referred

to as the “Indemnified Party”, and the party against whom such claims are asserted under this ARTICLE VIII is referred to as the “Indemnifying Party”.

(a) Third-Party Claims. If any Indemnified Party receives notice of the assertion or commencement of any Action

made or brought by any Person who is not a party to this Agreement or an Affiliate of a party to this Agreement or a Representative of the foregoing (a “Third-Party Claim”) against such Indemnified Party with respect to which the

Indemnifying Party is obligated to provide indemnification under this Agreement, the Indemnified Party shall give the Indemnifying Party reasonably prompt written notice thereof, but in any event not later than thirty (30) calendar days after

receipt of such notice of such Third-Party Claim. The failure to give such prompt written notice shall not, however, relieve the Indemnifying Party of its indemnification obligations, except and only to the extent that the Indemnifying Party

forfeits rights or defenses by reason of such failure. Such notice by the Indemnified Party shall describe the Third-Party Claim in reasonable detail, shall include copies of all material written evidence thereof and shall indicate the estimated

amount, if reasonably practicable, of the Loss that has been or may be sustained by the Indemnified Party. The Indemnifying Party shall have the right to participate in, or by giving written notice to the Indemnified Party, to assume the defense of

any Third-Party Claim at the Indemnifying Party’s expense and by the Indemnifying Party’s own counsel, and the Indemnified Party shall cooperate in good faith in such defense; provided, that if the Indemnifying Party is Seller,

such Indemnifying Party shall not have the right to defend or direct the defense of any such Third-Party Claim if (w) the Third-Party Claim is asserted directly by or on behalf of a Person that is a supplier or customer of the Company,

(x) the Third-Party Claim seeks an injunction or other equitable relief against the Indemnified Party, (y) the assumption of defense of the Third-Party Claim by the Indemnifying Party is reasonably likely to cause a Buyer Indemnitee to

lose coverage under the R&W Insurance Policy, or (z) a Buyer Indemnitee or the insurer is required to assume the defense of such Third-Party Claim pursuant to the R&W Insurance Policy. In the event that the Indemnifying Party assumes

the defense of any Third-Party Claim, subject to Section 8.05(b), it shall have the right to take such action as it deems necessary to avoid, dispute, defend, appeal or make counterclaims pertaining to any such Third-Party Claim in the name and

on behalf of the Indemnified Party. The Indemnified Party shall have the right to participate in the defense of any Third-Party Claim with counsel selected by it subject to the Indemnifying Party’s right to control the defense thereof. The

fees and disbursements of such counsel shall be at the expense of the Indemnified Party, provided, that if in the reasonable opinion of counsel to the Indemnified Party, (A) there are legal defenses available to an Indemnified Party that

are different from or additional to those available to the Indemnifying Party; or (B) there exists a conflict of interest between the Indemnifying Party and the Indemnified Party that cannot be waived, the Indemnifying Party shall be liable for

the reasonable documented out of pocket fees and expenses of counsel to the Indemnified Party in each jurisdiction for which the Indemnified Party determines counsel is required. If the Indemnifying Party elects not to compromise or defend such

Third-Party Claim, fails to promptly notify the Indemnified Party in writing of its election to defend as provided in this Agreement, or fails to diligently prosecute the defense of such Third-Party Claim, the Indemnified Party may, subject to

Section 8.05(b), pay, compromise, defend such Third-Party Claim and seek indemnification for any and all Losses based upon, arising from or relating to such Third-Party Claim. Seller and Buyer shall cooperate with each other in all reasonable

respects in connection with the defense of any Third-Party Claim, including making available (subject to the provisions of Section 5.06) records relating to such Third-Party Claim and furnishing, without expense (other than reimbursement of

reasonable documented out-of-pocket expenses) to the defending party, management employees of the non-defending party as may be

reasonably necessary for the preparation of the defense of such Third-Party Claim.

(b) Settlement of Third-Party Claims. Notwithstanding any

other provision of this Agreement, the Indemnifying Party shall not enter into settlement of any Third-Party Claim without the prior written consent of the Indemnified Party, except as provided in this Section 8.05(b). If a firm offer is made

to settle a Third-Party Claim without leading to Liability or the creation of a financial or other obligation on the part of the Indemnified Party and provides, in customary form, for the unconditional release of each Indemnified Party from all

Liabilities and obligations in connection with such Third-Party Claim and the Indemnifying Party desires to accept and agree to such offer, the Indemnifying Party shall give written notice to that effect to the Indemnified Party. If the Indemnified

Party fails to consent to such firm offer within ten (10) days after its receipt of such notice, the Indemnified Party may continue to contest or defend such Third-Party Claim and in such event, the maximum liability of the Indemnifying Party

as to such Third-Party Claim shall not exceed the amount of such settlement offer. If the Indemnified Party fails to consent to such firm offer and also fails to assume defense of such Third-Party Claim, the Indemnifying Party may settle the

Third-Party Claim upon the terms set forth in such firm offer to settle such Third-Party Claim. If the Indemnified Party has assumed the defense pursuant to Section 8.05(a), it shall not agree to any settlement without the prior written consent

of the Indemnifying Party (which consent shall not be unreasonably withheld, conditioned or delayed).

account of a Loss which does not result from a Third-Party Claim (a “Direct Claim”) shall be asserted by the Indemnified Party giving the Indemnifying Party reasonably prompt written notice thereof, but in any event not later than

thirty (30) days after the Indemnified Party becomes aware of such Direct Claim. The failure to give such prompt written notice shall not, however, relieve the Indemnifying Party of its indemnification obligations, except and only to the extent

that the Indemnifying Party forfeits rights or defenses by reason of such failure. Such notice by the Indemnified Party shall describe the Direct Claim in reasonable detail, shall include copies of all material written evidence thereof and shall

indicate the estimated amount, if reasonably practicable, of the Loss that has been or may be sustained by the Indemnified Party. The Indemnifying Party shall have thirty (30) days after its receipt of such notice to respond in writing to such

Direct Claim. The Indemnified Party shall allow the Indemnifying Party and its professional advisors to investigate the matter or circumstance alleged to give rise to the Direct Claim, and whether and to what extent any amount is payable in respect

of the Direct Claim and the Indemnified Party shall assist the Indemnifying Party’s investigation by giving such information and assistance (including access to the Company’s premises and personnel and the right to examine and copy any

accounts, documents or records) as the Indemnifying Party or any of its professional advisors may reasonably request, subject to Section 5.06 and applicable Law; provided, that, any such access shall be subject to reasonable prior

notice, shall take place during normal business hours, and shall be conducted in a manner that does not unreasonably interfere with the business of the Company. If the Indemnifying Party does not so respond within such

30-day period, the Indemnifying Party shall be deemed to have rejected such claim, in which case the Indemnified Party shall be free to pursue such remedies as may be available to the Indemnified Party on the

terms and subject to the provisions of this Agreement.

(d) Tax Claims. Notwithstanding any other provision

of this Agreement, the control of any claim, assertion, event or proceeding in respect of Taxes of the Company shall be governed exclusively by ARTICLE VI hereof.

(e) Special Indemnity Matters. Notwithstanding anything to the contrary in this Section 8.05, Seller shall

be permitted to control the defense of the Action to which the Special Indemnity Escrow Amount relates until such time as such Action has been fully resolved; provided, that (i) Buyer shall be permitted to participate in such defense with

counsel of its choosing (and at Buyer’s expense), (ii) Seller shall keep Buyer promptly informed of any material development in respect of the Action until fully resolved, and (iii) seller shall not settle such Action in any manner which

would impose any penalty or limitation on Buyer or the Companies without Buyer’s written consent, which consent may not be unreasonably withheld, conditioned or delayed.

Section 8.06 Payments; R&W Insurance Policy.

(a) Subject to the limitations of this Article VIII, once a Loss is agreed to by the Indemnifying Party or

finally adjudicated to be payable pursuant to this ARTICLE VIII that results in a payment obligation by the Indemnifying Party, the Indemnifying Party shall satisfy its obligations within fifteen (15) Business Days of such final, non-appealable adjudication by wire transfer of immediately available funds.

(b)

Subject to the limitations of this Article VIII, any Losses payable to a Buyer Indemnitee pursuant to Section 8.02(a) (other than for breaches of Seller Fundamental Representations) shall be satisfied solely (i) first, from

the Indemnity Escrow, and (ii) second, by recovery under the R&W Insurance Policy.

the limitations of this Article VIII, any Losses payable to a Buyer Indemnitee pursuant to Section 8.02(a) for breaches of Seller Fundamental Representations, shall be satisfied (i) first, from the Indemnity Escrow, (ii) second, by

recovery under the R&W Insurance Policy, and (iii) third, solely to the extent that Losses pursuant to breaches of Seller Fundamental Representations cause the total Losses to exceed the stated policy amount of the R&W Insurance Policy,

then such excess Losses (and only such excess Losses) shall be payable by Seller.

(d) Any Losses payable to

a Buyer Indemnitee pursuant to Section 8.02(b), Section 8.02(c) or Section 8.02(d) shall be paid by Seller.

(e) Any Losses payable to a Buyer Indemnitee pursuant to Section 8.02(e) shall be satisfied solely

(i) first, from the Special Indemnity Escrow, and (ii) second, shall be paid by Seller.

(f) Any

Losses payable to a Buyer Indemnitee pursuant to Section 8.02(f) shall be satisfied solely (i) first, by using commercially reasonable efforts to obtain payment through recourse to A&J’s indemnification rights pursuant to

Section 5.3 of the A&J 2024 APA, including, if necessary, the undertaking of legal action against the “Seller” and “Owners” thereunder, and (ii) second, shall be paid by Seller.

(g) Notwithstanding anything to the contrary, the liability of Karol, the Karol Trust and Hodson shall be

several and not joint on the basis of their respective percentage interest ownership of Seller; provided, that (i) the liability of Karol and the Karol Trust shall be joint and several on such basis, and (ii) Seller shall be jointly and

severally liable with all Members.

(h) For clarity and the avoidance of doubt, any limitations on the

indemnification obligations of Seller and the Members set forth in this ARTICLE VIII in respect of the R&W Insurance Policy shall be absolute and no other circumstance or event, including the ability or inability of the carrier underwriting the

R&W Insurance Policy to make payment in respect of claims made thereunder, shall modify or negate any such limitation herein.

Section 8.07 Tax Treatment of Indemnification Payments. All

indemnification payments made under this Agreement shall be treated by the parties as an adjustment to the Purchase Price for all applicable Tax purposes, except to the extent otherwise required under Section 453 of the Code and unless

otherwise required by applicable Law.

Section 8.08 Effect of Investigation. The representations,

warranties and covenants of the Indemnifying Party, and the Indemnified Party’s right to indemnification with respect thereto, shall not be affected or deemed waived by reason of any investigation made by or on behalf of the Indemnified Party

(including by any of its Representatives) or by reason of the fact that the Indemnified Party or any of its Representatives knew or should have known that any such representation or warranty is, was or might be inaccurate or by reason of the

Indemnified Party’s waiver of any condition set forth in Section 7.02 or Section 7.03, as the case may be.

Section 8.09 Exclusive Remedies. Subject to and except for Section 2.04, Section 5.07,

Section 6.01, and Section 10.11, the parties acknowledge and agree that from and after Closing their sole and exclusive remedy with respect to any and all claims (other than claims arising from fraud on the part of a party hereto in

connection with the transactions contemplated by this Agreement) for any breach of any representation, warranty, covenant, agreement or obligation set forth herein or otherwise relating to the subject matter of this Agreement, shall be pursuant to

the indemnification provisions set forth in this ARTICLE VIII. In furtherance of the foregoing, except with respect to Section 2.04, Section 5.07, Section 6.01 and Section 10.11, each party hereby waives, from and after Closing,

to the fullest extent permitted under Law, any and all rights, claims and causes of action for any breach of any representation, warranty, covenant, agreement or obligation set forth herein or otherwise relating to the subject matter of this

Agreement it may have against the other parties hereto and their Affiliates and each of their respective Representatives arising under or based upon any Law, except pursuant to the indemnification provisions set forth in this ARTICLE VIII. Nothing

in this Section 8.09 shall limit any Person’s right to seek and obtain any equitable relief to which any Person shall be entitled pursuant to this Agreement or to seek any remedy on account of any party’s fraud. Notwithstanding

anything to the contrary contained herein, no limitations (including any survival limitations and other limitations set forth in this Article VIII), qualifications or procedures in this Agreement shall be deemed to limit or modify the ability of

Buyer to make claims under or recover under the R&W Insurance Policy; it being understood that any matter for which there is coverage available under the R&W Insurance Policy shall be subject to the terms, conditions and limitations, if any,

set forth in the R&W Insurance Policy.

ARTICLE IX

TERMINATION

Section 9.01 Termination. This Agreement may be terminated at any time prior to the Closing:

(a) by the mutual written consent of Seller and Buyer;

(b) by either Seller or Buyer, upon written notice to the other party, if the transactions contemplated by this

Agreement have not been consummated on or before October 21, 2026 (the “Drop Dead Date”); provided, however, that the right to terminate this Agreement pursuant to this Section 9.01(b) shall not be available to

any party whose material breach of any representation, warranty, covenant, or agreement set forth in this Agreement has been a contributing cause of, or was a contributing factor that resulted in, the failure of the transactions contemplated by this

Agreement to be consummated on or before the Drop Dead Date;

in material breach of any provision of this Agreement and there has been a breach, inaccuracy in or failure to perform any representation, warranty, covenant or agreement made by Seller pursuant to this Agreement that would give rise to the failure

of any of the conditions specified in ARTICLE VII and such breach, inaccuracy or failure has not been cured by Seller within ten days of Seller’s receipt of written notice of such breach from Buyer;

(d) by Seller by written notice to Buyer if Seller is not then in material breach of any provision of this

Agreement and there has been a breach, inaccuracy in or failure to perform any representation, warranty, covenant or agreement made by Buyer pursuant to this Agreement that would give rise to the failure of any of the conditions specified in ARTICLE

VII and such breach, inaccuracy or failure has not been cured by Buyer within ten days of Buyer’s receipt of written notice of such breach from Seller; or

(e) by Buyer or Seller if (i) there shall be any Law that makes consummation of the transactions

contemplated by this Agreement illegal or otherwise prohibited; or (ii) any Governmental Authority shall have issued a Governmental Order restraining or enjoining the transactions contemplated by this Agreement, and such Governmental Order

shall have become final and non-appealable.

Section 9.02 Effect of Termination. In the event of the termination of this Agreement in accordance

with this Article, this Agreement shall forthwith become void and there shall be no liability on the part of any party hereto except:

(a) that the obligations set forth in this ARTICLE IX and ARTICLE X hereof shall survive termination; and

(b) that nothing herein shall relieve any party hereto from liability for any willful breach of any provision

hereof.

ARTICLE X

MISCELLANEOUS

Section 10.01 Expenses. Except as otherwise expressly provided herein, all costs and expenses,

including, without limitation, fees and disbursements of counsel, financial advisors and accountants, incurred in connection with this Agreement and the transactions contemplated hereby shall be paid by the party incurring such costs and expenses,

whether or not the Closing shall have occurred.

Section 10.02 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); or (c) on the date sent by e-mail of a PDF document (with 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. Such communications must be sent to the respective parties at the following addresses (or at such other address for a party as shall be specified in a notice given in accordance

with this Section 10.02):

If to Seller:

c/o Koda Enterprises Group, LLC

Attention:

William S. Karol and Janice Hodson

E-mail: wkarol@koda.com and

jhodson@koda.com

with a copy to:

Blank Rome LLP

125 High Street

3rd Floor

Boston, MA 02110

Attention: Mark Manning

E-mail: mark.manning@blankrome.com

If to Buyer:

6645 185th Ave. N.E.

Suite 100

Redmond, WA 98052

Attention: Charles DiBona, Chief Financial

Officer

E-mail: dibonac@dataio.com

with a copy to:

Dorsey & Whitney LLP

701 Fifth Avenue,

Suite 6100 | Seattle, WA 98104-7043

Attention: Kimberley Anderson

E-mail: anderson.kimberley@dorsey.com

Section 10.03 Interpretation. For purposes of this Agreement, unless otherwise

expressly provided, (a) the words “include,” “includes” and “including” shall be deemed to be followed by the words “without limitation”; (b) the word “or” is not exclusive;

(c) the words “herein,” “hereof,” “hereby,” “hereto” and “hereunder” refer to this Agreement as a whole; and (d) references herein: (i) to Articles, Sections, Disclosure

Schedules and Exhibits mean the Articles and Sections of, and Disclosure Schedules and Exhibits attached to, this Agreement; (ii) to an agreement, instrument or other document means such agreement, instrument or other document as amended,

supplemented and modified from time to time to the extent permitted by the provisions thereof and (iii) to a statute means such statute as amended from time to time and includes any successor legislation thereto and any regulations promulgated

thereunder. This Agreement 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. The Disclosure Schedules and Exhibits

referred to herein shall be construed with, and as an integral part of, this Agreement to the same extent as if they were set forth verbatim herein.

Section 10.04 Headings. The headings in this

Agreement are for reference only and shall not affect the interpretation of this Agreement.

Section 10.05 Severability. If any term or provision of this Agreement is invalid, illegal or

unenforceable in any jurisdiction, such invalidity, illegality or unenforceability shall not affect any other term or provision of this Agreement or invalidate or render unenforceable such term or provision in any other jurisdiction. Except as

provided in Section 5.07(e), upon such determination that any term or other provision is invalid, illegal or unenforceable, the parties hereto shall negotiate in good faith to modify this Agreement so as to effect the original intent of the

parties as closely as possible in a mutually acceptable manner in order that the transactions contemplated hereby be consummated as originally contemplated to the greatest extent possible.

Section 10.06 Entire Agreement. This Agreement and the Ancillary Documents constitute the sole and

entire agreement of the parties to this Agreement with respect to the subject matter contained herein and therein, and supersede 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 Agreement and those in the Ancillary Documents, the Exhibits and Disclosure Schedules (other than an exception expressly set forth as such in the Disclosure Schedules), the

statements in the body of this Agreement will control.

Section 10.07 Successors and Assigns. This

Agreement shall be binding upon and shall inure to the benefit of the parties hereto and their respective successors and permitted assigns. Neither party may assign its rights or obligations hereunder without the prior written consent of the other

party, which consent shall not be unreasonably withheld, conditioned or delayed; provided, however, that prior to the Closing Date, Buyer may, without the prior written consent of Seller, assign all or any portion of its rights under this

Agreement to one or more of its direct or indirect wholly-owned subsidiaries. No assignment shall relieve the assigning party of any of its obligations hereunder.

Section 10.08 No Third-Party Beneficiaries. Except as provided in Section 6.03 and ARTICLE VIII,

this Agreement is for the sole benefit of the parties hereto and their respective successors and 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 Agreement.

Section 10.09 Amendment and

Modification; Waiver. This Agreement may only be amended, modified or supplemented by an agreement in writing signed by each party hereto. No waiver by any party 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 right, remedy, power or privilege arising from this Agreement 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.

Section 10.10 Governing Law; Submission to Jurisdiction; Waiver of Jury

Trial.

(a) This Agreement shall be governed by and construed in accordance with the internal laws of the

State of Delaware without giving effect to any choice or conflict of law provision or rule (whether of the State of Delaware or any other jurisdiction).

(b) ANY LEGAL SUIT, ACTION OR PROCEEDING ARISING OUT OF OR BASED UPON THIS AGREEMENT, THE ANCILLARY DOCUMENTS OR

THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY MAY BE INSTITUTED IN THE FEDERAL COURTS OF THE UNITED STATES OF AMERICA OR THE COURTS OF THE STATE OF DELAWARE, AND EACH PARTY IRREVOCABLY SUBMITS TO THE EXCLUSIVE JURISDICTION OF SUCH COURTS IN ANY

SUCH SUIT, ACTION OR PROCEEDING. SERVICE OF PROCESS, SUMMONS, NOTICE OR OTHER DOCUMENT BY MAIL TO SUCH PARTY’S ADDRESS SET FORTH HEREIN SHALL BE EFFECTIVE SERVICE OF PROCESS FOR ANY SUIT, ACTION OR OTHER PROCEEDING BROUGHT IN ANY SUCH COURT.

THE PARTIES IRREVOCABLY AND UNCONDITIONALLY WAIVE ANY OBJECTION TO THE LAYING OF VENUE OF ANY SUIT, ACTION OR ANY PROCEEDING IN SUCH COURTS AND IRREVOCABLY WAIVE AND AGREE NOT TO PLEAD OR CLAIM IN ANY SUCH COURT THAT ANY SUCH SUIT, ACTION OR

PROCEEDING BROUGHT IN ANY SUCH COURT HAS BEEN BROUGHT IN AN INCONVENIENT FORUM.

AND AGREES THAT ANY CONTROVERSY WHICH MAY ARISE UNDER THIS AGREEMENT OR THE ANCILLARY DOCUMENTS IS LIKELY TO INVOLVE COMPLICATED AND DIFFICULT ISSUES AND, THEREFORE, EACH SUCH PARTY IRREVOCABLY AND UNCONDITIONALLY WAIVES ANY RIGHT IT MAY HAVE TO A

TRIAL BY JURY IN RESPECT OF ANY LEGAL ACTION ARISING OUT OF OR RELATING TO THIS AGREEMENT, THE ANCILLARY DOCUMENTS OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY. EACH PARTY TO THIS AGREEMENT CERTIFIES AND ACKNOWLEDGES THAT (A) NO

REPRESENTATIVE OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT SEEK TO ENFORCE THE FOREGOING WAIVER IN THE EVENT OF A LEGAL ACTION, (B) SUCH PARTY HAS CONSIDERED THE IMPLICATIONS OF THIS WAIVER,

(C) SUCH PARTY MAKES THIS WAIVER VOLUNTARILY, AND (D) SUCH PARTY HAS BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION 10.10(c).

Section 10.11 Specific Performance. The parties agree

that irreparable damage would occur if any provision of this Agreement were not performed in accordance with the terms hereof and that the parties shall be entitled to specific performance of the terms hereof, in addition to any other remedy to

which they are entitled at law or in equity.

Section 10.12 Counterparts. This Agreement 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 Agreement delivered by e-mail or other

means of electronic transmission shall be deemed to have the same legal effect as delivery of an original signed copy of this Agreement.

[SIGNATURE PAGE FOLLOWS]

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed as of the

date first written above by their duly authorized officers or mangers, as applicable.

V-TEK HOLDINGS, LLC

By:

/s/ William S. Karol

Name:

William S. Karol

Title:

President

By:

/s/ William S. Karol

Name:

William S. Karol

WILLIAM S. KAROL FAMILY TRUST

By:

/s/ Frank A. Segall

Name:

Frank A. Segall

Title:

Trustee

By:

/s/ Janice Hodson

Name:

Janice Hodson

[Signature Page to Stock Purchase Agreement]

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed as of the

date first written above by their duly authorized officers or mangers, as applicable.

DATA I/O CORPORATION

By:

/s/ Charles DiBona

Name:

Charles DiBona

Title:

CFO

[Signature Page to Stock Purchase Agreement]

EXHIBIT A

SPECIFIED ACCOUNTING PRINCIPLES

[Exhibit A has

been omitted pursuant to Item 601(a)(5) of Regulation S-K. The omitted schedules and exhibits are not material and the Company believes would not contain information material to investors. The registrant

agrees to furnish supplementally to the Securities and Exchange Commission a copy of any omitted schedule or exhibit upon request.]

EXHIBIT B

R&W INSURANCE POLICY

[Exhibit B has been

omitted pursuant to Item 601(a)(5) of Regulation S-K. The omitted schedules and exhibits are not material and the Company believes would not contain information material to investors. The registrant agrees to

furnish supplementally to the Securities and Exchange Commission a copy of any omitted schedule or exhibit upon request.]

EXHIBIT C

WORKING CAPITAL METHODOLOGY

[Exhibit C has been

furnish supplementally to the Securities and Exchange Commission a copy of any omitted schedule or exhibit upon request.]

EX-3.1

Filename: d176225dex31.htm · Sequence: 3

EX-3.1

Exhibit 3.1

DATA I/O CORPORATION

CERTIFICATE OF DESIGNATION OF PREFERENCES,

RIGHTS AND LIMITATIONS

SERIES C CONVERTIBLE

PREFERRED STOCK

PURSUANT TO SECTION 23B.06.020 OF THE

WASHINGTON BUSINESS CORPORTION ACT

The undersigned, William Wentworth and Charles DiBona, do hereby certify that:

1. They are the President and Secretary, respectively, of Data I/O Corporation, a Washington corporation (the

“Corporation”).

2. The Corporation is authorized to issue 5,000,000 shares of preferred stock, of

which (i) 200,000 shares have been designated as Series A Junior Participating Preferred Stock, and no shares of Series A Junior Participating Preferred Stock have been issued and are outstanding, and (ii) 8,000 shares have been designated as Series

B Convertible Preferred Stock, of which 6,841.33 shares of Series B Convertible Preferred Stock are issued and outstanding;

3. The following resolutions were duly adopted by the board of directors of the Corporation (the “Board of

Directors”) on October 18, 2026, without shareholder approval pursuant to the Revised Code of Washington Section 23B.06.020:

WHEREAS, the articles of incorporation of the Corporation provides for a class of its authorized stock known as preferred

stock, consisting of 5,000,000 shares 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, except as otherwise set forth in the Purchase Agreement, 5,000 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 PREFERRED STOCK

Section 1. Definitions. For the purposes hereof, the following terms shall

have the following meanings:

“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(d).

“Beneficial Ownership Limitation” shall have the meaning set forth in Section 6(d).

“Business Day” means any day except any Saturday, any Sunday, any day which is a

federal legal holiday in the United States or any day on which banking institutions in the State of New York are authorized or required by law or other governmental action to close.

“Closing” means the closing of the purchase and sale of the Securities pursuant to

Section 2.1 of the Purchase Agreement.

“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) each Holder’s obligations to pay the Subscription Amount and (ii) the Corporation’s

obligations to deliver the Securities have been satisfied or waived.

“Commission”

means the United States Securities and Exchange Commission.

“Common Stock” means the

Corporation’s common stock 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 or the Subsidiaries

which would entitle the holder thereof to acquire at any time Common Stock, including, without limitation, any debt, preferred stock, rights, options, warrants 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.

“Conversion

Amount” means the sum of the Stated Value at issue.

“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 Debenture” means that certain 5.0% Convertible Debenture due 2031 between such

Holder and the Corporation which is convertible into the Preferred Stock.

“Exchange

Act” means the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder.

“Fundamental Transaction” shall have the meaning set forth in Section 7(d).

“GAAP” means United States generally accepted accounting principles.

“Holder” shall have the meaning given such term in Section 2.

“Issuable Maximum” shall have the meaning set forth in Section 6(e).

“Junior Securities” means the Common Stock and the Common Stock Equivalents of the

Corporation, other than those securities which are explicitly senior or pari passu with the Preferred Stock in dividend right or liquidation preference.

“Liquidation” shall have the meaning set forth in Section 5.

“New York Courts” shall have the meaning set forth in Section 8(d).

“Notice of Conversion” shall have the meaning set forth in Section 6(a).

“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.

The “Original Issue Price” shall mean, with respect to the Series C Convertible Preferred

Stock, $1,000 per share, subject to appropriate adjustment in the event of any stock dividend, stock split, combination or other similar recapitalization with respect to the applicable 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.

“Preferred Stock” shall have the meaning set forth in Section 2.

“Purchase Agreement” means the Securities

Purchase Agreement, dated on or about October 19, 2026, among the Corporation and the original Holders, as amended, modified or supplemented from time to time in accordance with its terms.

“Purchase Agreement Closing” means the date of closing of the purchase and sale of the

securities pursuant to Purchase Agreement.

“Securities” means the Convertible

Debenture, Preferred Stock, and the Underlying Shares.

“Securities Act” means the

Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder.

“Share

Delivery Date” shall have the meaning set forth in Section 6(c).

“Stated

Value” shall have the meaning set forth in Section 2, as the same may be increased pursuant to Section 3.

“Shareholder Approval” means such approval as may be required by the applicable rules and

regulations of the Nasdaq Stock Market (or any successor entity) from the shareholders of the Corporation with respect to the transactions contemplated by the Transaction Documents, including the issuance of all of the Underlying Shares in excess of

19.99% of the issued and outstanding Common Stock on the Closing Date.

“Subscription

Amount” shall mean, as to each Holder, the aggregate amount to be paid for the Preferred Stock purchased pursuant to the Purchase Agreement as specified below such Holder’s name on the signature page of the Purchase Agreement and

next to the heading “Subscription Amount,” in United States dollars and in immediately available funds.

“Successor Entity” shall have the meaning set forth in Section 7(d).

“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).

“Transaction Documents” means this Certificate of Designation, the Purchase Agreement, the

Convertible Debentures, all exhibits and schedules thereto and hereto and any other documents or agreements executed in connection with the transactions contemplated pursuant to the Purchase Agreement.

“Transfer Agent” means Computershare

Investor Services, the current transfer agent of the Corporation with a mailing address of P.O. Box 43006, Providence, RI 02940-3006, and any successor transfer agent of the Corporation.

“Underlying Shares” means the shares of Common Stock issued and issuable upon conversion of

the Preferred Stock.

Section 2. Designation, Amount and Par Value. The

series of preferred stock shall be designated as its Series C Convertible Preferred Stock (the “Preferred Stock”) and the number of shares so designated shall be 5,000 (which shall not be subject to increase without the written

consent of the holders of a majority of the then outstanding shares of the Preferred Stock (each, a “Holder” and collectively, the “Holders”)). Each share of Preferred Stock shall have a stated value equal to

$1,000, subject to increase set forth in Section 3 below (the “Stated Value”).

Section 3. Dividends. 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 (other than dividends on shares of Common Stock payable in shares of Common Stock) unless (in addition to the obtaining of any consents required elsewhere in the

Articles 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 (i) in the case of a dividend

on Common Stock, the product of (A) the dividend declared, paid or set aside on such Common Stock and (B) the number of shares of Common Stock issuable upon conversion of a share of such Preferred Stock; (ii) in the case of a dividend

on a class or series of capital stock that is convertible into Common Stock, the product of (A) the dividend declared, paid or set aside per share of such class or series of capital stock and (B) the number of shares of Common Stock

issuable upon conversion of a share of such Preferred Stock, divided by the number of shares of Common Stock issuable upon conversion of a share of such class or series of capital stock; or (iii) in the case of a dividend on any class or series

that is not convertible into Common Stock, the product of (A) the amount of the dividend payable on each share of such class or series of capital stock divided 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 (B) the applicable Original Issue Price (as defined below); 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, 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 for the applicable series of Preferred Stock.

Section 4. Voting Rights. Except as otherwise provided herein or as otherwise

required by law, the Preferred Stock shall have no voting rights. However, as long as any shares of Preferred Stock are outstanding, the Corporation shall not, without the affirmative vote of the Holders of a majority of the then outstanding shares

of the Preferred Stock, (a) alter or change adversely the powers, preferences or rights given to the Preferred Stock or alter or amend this Certificate of Designation, (b) amend its articles of incorporation or other charter documents in

any manner that adversely affects any rights of the Holders, (c) increase the number of authorized shares of Preferred Stock, or (d) enter into any agreement with respect to any of the foregoing.

Section 5. Liquidation. Upon

any liquidation, dissolution or winding-up of the Corporation, whether voluntary or involuntary (a “Liquidation”), the Holders shall be entitled to receive out of the assets, whether capital

or surplus, of the Corporation the same amount that a holder of Common Stock would receive if the Preferred Stock were fully converted (disregarding for such purposes any conversion limitations hereunder) to Common Stock which amounts shall be paid

pari passu with all holders of Common Stock. The Corporation shall mail written notice of any such Liquidation, not less than 45 days prior to the payment date stated therein, to each Holder.

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 shares of Common Stock (subject to the limitations set forth in Section 6(d) and Section 6(e)) determined by

dividing the Stated 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”). 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 email 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.

b) Conversion Price. The conversion price for the Preferred Stock shall equal $2.68,

subject to adjustment herein (the “Conversion Price”).

c) Mechanics of

Conversion

i. Delivery of Conversion Shares Upon

Conversion. Not later than the earlier of (i) two (2) Trading Days and (ii) 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, and (B) a bank check in the amount of

accrued and unpaid dividends, if any. If the resale of the Conversion Shares is subject to an effective registration statement under the U.S. Securities Act or if the Conversion Shares have been deemed to have been held for a period of no less than

one year, the Corporation shall use its best efforts to 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.

ii.

Failure to Deliver Conversion Shares. If, in the case of any Notice of Conversion, such Conversion Shares are not delivered to or as 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 Absolutes. 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 Stated Value of its Preferred Stock, the Corporation may not refuse conversion based on any claim that such Holder or any one 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 Stated 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. 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.

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 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 (including 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 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 request of the Corporation, 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 the 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. 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.

vi. Fractional Shares. No fractional shares or scrip representing fractional shares of

Common Stock 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. The Corporation shall pay all Transfer Agent fees required for same-day processing of any Notice of Conversion and all fees to the Depository Trust Company (or another established clearing

corporation performing similar functions) required for same-day electronic delivery of the Conversion Shares.

d) Beneficial Ownership Limitation.

The Corporation shall not effect any conversion of the Preferred Stock, and a Holder shall not have the right to convert 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 the Beneficial Ownership Limitation (as defined below). 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 Stated 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 (including, without limitation, the Preferred Stock) 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. 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 one Trading Day

confirm orally and 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. The “Beneficial Ownership

Limitation” shall be 9.99% of the number of shares of the Common Stock outstanding immediately after giving effect to the issuance of shares of Common Stock issuable upon conversion of Preferred Stock held by the applicable Holder. 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.

e) Issuance Limitations.

Notwithstanding anything herein to the contrary, if the Corporation has not obtained Shareholder Approval, then the Corporation may not issue, upon conversion of the Preferred Stock, a number of shares of Common Stock which, when aggregated with any

shares of Common Stock issued on or after the date of the Purchase Agreement Closing and prior to such Conversion Date (i) in connection with the conversion of any Convertible Debentures issued pursuant to the Purchase Agreement, and

(ii) in connection with any conversion of Preferred Stock issued or issuable pursuant to the conversion of any Convertible Debenture, would exceed 209,907 shares of Common Stock (subject to adjustment for forward and reverse stock splits,

recapitalizations and the like) (such number of shares, the “Issuable Maximum”). Each Holder shall be entitled to a portion of the Issuable Maximum equal to the quotient obtained by dividing (x) the original Stated Value of such

Holder’s Preferred Stock by (y) the aggregate original principal amount of all Convertible Debentures issued pursuant to the Purchase Agreement on the date of the Purchase Agreement Closing. In addition, each Holder may allocate its pro-rata portion of the Issuable Maximum among Preferred Stock held by it in its sole discretion. Such portion shall be adjusted upward ratably in the event a Holder no longer holds any Preferred Stock and the

amount of shares issued to such Holder pursuant to such Holder’s Preferred Stock was less than such Holder’s pro-rata share of the Issuable Maximum.

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), (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 the

Conversion 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) Subsequent Rights Offerings. In

addition to any adjustments pursuant to Section 7(a) 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 the record holders

of any class of shares of Common Stock (the “Purchase Rights”), then the Holder of 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 exercise 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, 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).

c) Pro Rata Distributions. 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”), at any time after the issuance

of this Preferred Stock, 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 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).

d) Fundamental Transaction. 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, (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, 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 more than 50% of the outstanding shares of Common Stock (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) and Section 6(e) on

the conversion of this Preferred Stock), the number of shares of Common 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) and Section 6(e) on the conversion of this Preferred Stock). 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. 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 other Transaction Documents in accordance with the provisions of this Section 7(d) 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 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 Holder. Upon the occurrence of any such Fundamental Transaction, the Successor Entity shall succeed to, and be substituted for (so that from and after the date of such Fundamental Transaction, the provisions of this

Certificate of Designation and the other Transaction Documents referring to the “Corporation” shall refer instead to the Successor Entity), and may exercise every right and power of the Corporation and shall assume all of the obligations

of the Corporation under this Certificate of Designation and the other Transaction Documents with the same effect as if such Successor Entity had been named as the Corporation herein.

e) 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.

f) 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 special nonrecurring cash dividend on or 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 last 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. The Holder shall remain entitled to convert the Conversion Amount of this Preferred Stock (or any part hereof) during the 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.

Section 8. 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 a nationally recognized overnight courier service,

addressed to the Corporation, at 6645 185th Ave. N.E., Suite 100, Redmond, WA 98052, Attention: Charles DiBona, email address: legal@dataio.com, 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 8. 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 8 prior to 5:30 p.m. (Seattle 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. (Seattle 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, 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 execute and deliver, 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).

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 Washington without regard to the principles of conflict of laws thereof. All legal proceedings

concerning the interpretation, enforcement and defense of the transactions contemplated by any of the Transaction Documents (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 New York, Borough of Manhattan (the “New York Courts”). The Corporation and each Holder hereby irrevocably submits to the exclusive jurisdiction of the New

York Courts 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 suit, action or proceeding, any claim that it is not personally subject to the jurisdiction of such New York Courts, or such New York 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 hereto 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) 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.

f) 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.

g) 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.

h) 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.

i) Status of Converted or Redeemed Preferred Stock. Shares of Preferred Stock may only be

issued pursuant to the Purchase Agreement and the Convertible Debenture. 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 Series C Convertible Preferred Stock.

*********************

RESOLVED, FURTHER, that the Chairman, the president or any vice-president, and the secretary

or any assistant secretary, of the Corporation be and they hereby are authorized and directed to prepare and file this Certificate of Designation of Preferences, Rights and Limitations in accordance with the foregoing resolution and the provisions

of Washington law.

IN WITNESS WHEREOF, the undersigned have executed this Certificate this 19th day of October 2026.

/s/ William Wentworth

/s/ Charles DiBona

Name: William Wentworth

Title: President and Chief Executive Officer

Name: Charles DiBona

Title: Secretary, Vice President and Chief Financial Officer

ANNEX A

NOTICE OF CONVERSION

(TO BE

EXECUTED BY THE REGISTERED HOLDER IN ORDER TO CONVERT SHARES OF PREFERRED STOCK)

The undersigned hereby elects to convert the number of

shares of Series C Convertible Preferred Stock indicated below into shares of common stock (the “Common Stock”), of Data I/O Corporation, a Washington 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: ________________________

Stated 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: ______________________

DWAC Instructions:

Broker no: _________

Account no:

___________

HOLDER

By:

Name:

Title:

EX-10.1

Filename: d176225dex101.htm · Sequence: 4

EX-10.1

Exhibit 10.1

SECURITIES PURCHASE AGREEMENT

This Securities Purchase Agreement (this “Agreement”) is dated as of October 19, 2026, between Data

I/O Corporation, a Washington corporation (the “Company”), and each purchaser identified on the signature pages hereto (each, including its successors and assigns, a “Purchaser” and collectively, the

“Purchasers”).

WHEREAS, subject to the terms and conditions set forth in this Agreement and pursuant

to an exemption from the registration requirements of Section 5 of the Securities Act of 1933, as amended (the “Securities Act”) contained in Section 4(a)(2) thereof and/or Regulation D promulgated thereunder, the

Company desires to issue and sell to each Purchaser, and each Purchaser, severally and not jointly, 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 and each Purchaser agree as follows:

ARTICLE I.

DEFINITIONS

1.1 Definitions. In addition to the terms defined elsewhere in this Agreement, for all purposes of this Agreement, the

following terms have the meanings set forth in this Section 1.1:

“Acquiring

Person” shall have the meaning ascribed to such term in Section 4.5.

“Acquisition

Agreement” means the Stock Purchase Agreement dated as of October 19, 2026, is entered into between V-Tek Holdings, LLC, a Delaware limited liability company, William S. Karol, William S. Karol

Family Trust, and Janice Hodson and the Company.

“Action” shall have the meaning

ascribed to such term in Section 3.1(j).

“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.

“Board of Directors” means the board of directors of the Company.

“Business Day” means any day other than Saturday, Sunday, any date which is a federal legal

holiday in the United States or other day on which commercial banks in The City of New York are authorized or required by law or government action 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 are open for use by customers on such day.

“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 Purchasers’ obligations to pay the Subscription Amount and (ii) the Company’s obligations to deliver the

Securities, in each case, have been satisfied or waived, but in no event later than the first (1st) Trading Day following the date hereof (or the second (2nd) Trading Day following the date hereof

if this Agreement is signed on a day that is not a Trading Day or after 4:00pm (New York City time) and before midnight (New York City time) on a Trading Day.

“Commission” means the United States Securities and Exchange Commission.

“Common Stock” means the Common Stock of

the Company, no par value per share, and any other class of securities into which such securities may hereafter be reclassified or changed.

“Common Stock Equivalents” means any securities of the Company or the Subsidiaries 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.

“Company Securities

Counsel” means Dorsey & Whitney LLP with offices at 701 5th Avenue, Suite 6100, Seattle, WA 98104.

“Convertible Debenture” means the 5% convertible promissory note delivered to each

Purchaser at the Closing in accordance with Section 2.2(a) hereof, which Convertible Debentures shall be immediately convertible (subject to the limitations contained therein) on the date of issuance into shares of Common Stock or Preferred

Stock, in the form of Exhibit C attached hereto.

“Disclosure

Schedules” means the Disclosure Schedules of the Company delivered concurrently herewith, which such Disclosure Schedules shall be deemed a part hereof.

“Disclosure Time” means, (i) if this Agreement is signed on a day that is not a

Trading Day or after 9:00 a.m. (New York City time) and before midnight (New York City time) on any Trading Day, 9:01 a.m. (New York City time) on the Trading Day immediately following the date hereof, unless otherwise instructed as to an earlier

time by the Placement Agent, and (ii) if this Agreement is signed between midnight (New York City time) and 9:00 a.m. (New York City time) on any Trading Day, no later than 9:01 a.m. (New York City time) on the date hereof, unless otherwise

instructed as to an earlier time by the Placement Agent.

“Effective Date” means the

earliest of the date that (i) the initial Registration Statement registering for resale all Shares has been declared effective by the Commission, (ii) all of the Shares have been sold pursuant to Rule 144 or may be sold pursuant to Rule

144 without the requirement for the Company to be in compliance with the current public information required under Rule 144 and without volume or manner-of-sale

restrictions, (iii) following the one year anniversary of the Closing Date provided that a holder of Shares is not an Affiliate of the Company, or (iv) all of the Shares may be sold pursuant to an exemption from registration under

Section 4(a)(1) of the Securities Act without volume or manner-of-sale restrictions and Company Counsel has delivered to such holders a standing written unqualified

opinion that resales may then be made by such holders of the Shares pursuant to such exemption which opinion shall be in form and substance reasonably acceptable to such holders.

Escrow Agent” means Wilmington Trust, N.A, with a mailing address of 50 South 6th Street, Suite 1290, Minneapolis, MN 55402.

“Escrow Agreement” means the escrow agreement entered into prior to the date hereof, by and

among the Company, the Escrow Agent and the Placement Agent pursuant to which the Purchasers shall deposit Subscription Amounts with the Escrow Agent to be applied to the transactions contemplated hereunder.

“Evaluation Date” shall have the meaning ascribed to such term in Section 3.1(s).

“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) shares of Common Stock, options, restricted stock units, or other equity awards to employees, consultants, contractors, advisors, officers or directors of the Company pursuant to any stock or option plan or incentive plan or employee stock

purchase plan duly adopted for such purpose, (b) securities (including options, rights or warrants) exercisable or exchangeable for or convertible into shares of Common Stock issued and outstanding on the date of this Agreement, provided that

such securities have not been voluntarily amended since the date of this Agreement 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) or to extend the term of such securities, (c) shares of Common Stock or securities exercisable or exchangeable for, or convertible into, shares of Common Stock sold to employees, directors, consultants, or any of

their affiliated entities in the ordinary course of business or pursuant to agreements or in connection with commitments in place as of the date hereof, and (d) securities issued pursuant to acquisitions or strategic transactions approved by a

majority of the disinterested directors of the Company, provided in the case of each of clauses (c) and (d) that such securities are issued as “restricted securities” (as defined in Rule 144) and carry no registration rights that

require or permit the filing of any registration statement in connection therewith during the prohibition period in Section 4.12(a) herein, and provided that any such issuance shall only be to a Person (or to the equity holders of a Person)

which is, itself or through its subsidiaries, an operating company or an owner of an asset and shall provide to the Company additional benefits in addition to the investment of funds, but shall not include a transaction in which the Company is

issuing securities primarily for the purpose of raising capital or to an entity whose primary business is investing in securities.

“FCPA” means the Foreign Corrupt Practices Act of 1977, as amended, and the rules and

regulations thereunder.

“GAAP” shall have the meaning ascribed to such term in

Section 3.1(h).

“Indebtedness” shall have the meaning ascribed to such term in

Section 3.1(bb).

“Intellectual Property Rights” shall have the meaning ascribed

to such term in Section 3.1(p).

“Liens” means a lien, charge pledge, security

interest, encumbrance, right of first refusal, preemptive right or other restriction.

“Lock-Up Agreement” means the Lock-Up Agreement, dated as of the Closing Date, by and among the Company and the directors and executive officers listed on Schedule

A, in the form of Exhibit A attached hereto.

“Material Adverse Effect”

shall have the meaning ascribed to such term in Section 3.1(b).

“Material

Permits” shall have the meaning ascribed to such term in Section 3.1(n).

“Per

Share Purchase Price” equals $2.68, 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.

“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.

“Placement Agent” means Ladenburg Thalmann & Co. Inc.

“Preferred Stock” means the Company’s Series C Preferred Stock, in the form of

Exhibit E attached hereto.

“Proceeding” means an action, claim, suit,

investigation or proceeding (including, without limitation, an informal investigation or partial proceeding, such as a deposition), whether commenced or threatened in writing.

“Purchase Price” means the purchase price for the Shares and/or Convertible Debenture.

“Purchaser Party” shall have the meaning

ascribed to such term in Section 4.8.

“Registration Rights Agreement” means the

Registration Rights Agreement, dated on or about the date hereof, among the Company and the Purchasers, in the form of Exhibit C attached hereto.

“Registration Statement” means a registration statement meeting the requirements set forth in the

Registration Rights Agreement and covering the resale by the Purchasers of the Securities.

“Required Approvals” shall have the meaning ascribed to such term in Section 3.1(e).

“Rule 144” means Rule 144 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.

“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.

“SEC Reports” shall have the meaning ascribed to such term in Section 3.1(h).

“Securities” means the Shares and Convertible Debentures.

“Securities Act” means the Securities Act of 1933, as amended, and the rules and

regulations promulgated thereunder.

“Shares” means the shares of Common Stock or

Preferred Stock issued or issuable to each Purchaser pursuant to this Agreement.

“Short

Sales” means all “short sales” as defined in Rule 200 of Regulation SHO under the Exchange Act (but shall not be deemed to include locating and/or borrowing shares of Common Stock).

“Subscription Amount” means, as to each Purchaser, the aggregate amount to be paid for

Shares or Convertible Debentures purchased hereunder as specified below such Purchaser’s name on the signature page of this Agreement and next to the heading “Subscription Amount,” in United States dollars and in immediately

available funds.

“Subsidiary” means any significant subsidiary of the Company within

the meaning of Rule 1-02(w) under Regulation S-X and shall, where applicable, also include any direct or indirect significant subsidiary of the Company formed or

acquired after the date hereof.

“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, the New York Stock Exchange, OTCQB or

OTCQX (or any successors to any of the foregoing).

“Transaction Documents” means this

Agreement, the Registration Rights Agreement, the Lock-Up Agreement, and all exhibits and schedules thereto and hereto and any other documents or agreements executed in connection with the transactions

contemplated hereunder.

“Transfer Agent” means Computershare Investor Services, and

any successor transfer agent of the Company.

“Underlying Securities” means the

Preferred Stock and Common Stock issuable upon conversion of the Convertible Debentures and the Common Stock issuable upon conversion of the Preferred Stock.

ARTICLE II.

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 Purchasers, severally and not jointly, agree to purchase, up to an aggregate of approximately $13,249,996.44 of Securities. Each Purchaser shall deliver to the Escrow Agent via wire transfer or a certified check in

immediately available funds, equal to such Purchaser’s Subscription Amount as set forth on the signature page hereto executed by such Purchaser, and the Company shall deliver to each Purchaser its respective Shares or Convertible

Debentures, as determined pursuant to Section 2.2(a), and the Company and each Purchaser shall deliver the other items set forth in Section 2.2 deliverable at the Closing. Upon satisfaction of the covenants and conditions set forth in

Sections 2.2 and 2.3, the Closing shall occur at the offices of the Placement Agent or such other location as the parties shall mutually agree. Notwithstanding anything herein to the contrary, if at any time on or after the time of execution of

this Agreement by the Company and an applicable Purchaser, through, and including the time immediately prior to the Closing (the “Pre-Settlement Period”), such Purchaser sells to any Person

all, or any portion, of the Securities to be issued hereunder to such Purchaser at the Closing (collectively, the “Pre-Settlement Securities”), such Purchaser shall, automatically hereunder

(without any additional required actions by such Purchaser or the Company), be deemed to be unconditionally bound to purchase, such Pre-Settlement Securities at the Closing, and the Company shall be deemed

unconditionally bound to sell such Pre-Settlement Securities to such Person at the Closing; provided, that the Company shall not be required to deliver any

Pre-Settlement Securities to such Purchaser prior to the Company’s receipt of the purchase price of such Pre-Settlement Securities hereunder; and provided further

that the Company hereby acknowledges and agrees that the forgoing shall not constitute a representation or covenant by such Purchaser as to whether or not during the Pre-Settlement Period such Purchaser shall

sell any Securities to any Person and that any such decision to sell any Securities by such Purchaser shall solely be made at the time such Purchaser elects to effect any such sale, if any.

2.2 Deliveries.

(a) On or prior to the Closing Date, the Company shall deliver or cause to be delivered to each Purchaser the

following:

(i) this Agreement duly executed by the Company;

(ii) legal opinion of Company Securities Counsel, in a form reasonably acceptable to the Placement Agent and

Purchasers;

(iii) a copy of the irrevocable instructions to the Transfer Agent instructing the Transfer

Agent to deliver, on an expedited basis, in book entry form (unless otherwise requested by the Purchasers) a number of Securities equal to such Purchaser’s Subscription Amount divided by the Per Share Purchase Price in the case of the purchase

of Common Stock, registered in the name of such Purchaser;

(iv) a Convertible Debenture representing the

principal amount of Convertible Debentures equal to the Subscription Amount, in case of the purchase of Convertible Debentures, registered in the name of such Purchaser;

(v) the Company’s wire instructions, on Company letterhead and executed by the Chief Executive Officer

or Chief Financial Officer;

(vi) an Officer’s Certificate, in form and substance reasonably

satisfactory to the Placement Agent;

(vii) a Secretary’s Certificate, in form and

substance reasonably satisfactory to the Placement Agent;

(viii) the Registration Rights Agreement duly

executed by the Company; and

(ix) the Lock-Up Agreements.

(b) On or prior to the Closing Date, each Purchaser shall deliver or cause to be delivered to the Escrow

Agent, the following:

(i) this Agreement duly executed by such Purchaser;

(ii) to the Escrow Agent, such Purchaser’s Subscription Amount via any means permitted

under Section 2.1 by wire transfer to the account specified in the Escrow Agreement; and

(iii) the Registration Rights Agreement duly executed by the Purchaser.

2.3 Closing Conditions.

(a) The obligations of the Company hereunder in connection with the Closing are subject to the following

conditions being met:

(i) the accuracy in all material respects (or, to the extent representations

or warranties are qualified by materiality or Material Adverse Effect, in all respects) on the Closing Date of the representations and warranties of the Purchasers contained herein (unless such representation or warranty is as of a specific date

therein in which case they shall be accurate in all material respects (or, to the extent representations or warranties are qualified by materiality or Material Adverse Effect, in all respects) as of such date);

(ii) all obligations, covenants and agreements of each Purchaser required to be performed at or prior to the

Closing Date shall have been performed; and

(iii) the delivery by each Purchaser of the items set forth

in Section 2.2(b) of this Agreement.

(b) The respective obligations of the Purchasers hereunder in

connection with the Closing are subject to the following conditions being met:

(i) the accuracy in

all material respects (or, to the extent representations or warranties are qualified by materiality or Material Adverse Effect, in all respects) when made and on the Closing Date of the representations and warranties of the Company contained herein

(unless such representation or warranty is as of a specific date therein in which case they shall be accurate in all material respects (or, to the extent representations or warranties are qualified by materiality or Material Adverse Effect, in all

respects) as of such date);

(ii) all obligations, covenants and agreements of the Company required to be

performed at or prior to the Closing Date shall have been performed;

(iii) the delivery by the Company

of the items set forth in Section 2.2(a) of this Agreement;

(iv) there shall have been no Material

Adverse Effect with respect to the Company since the date hereof; and

(v) from the date hereof to the Closing Date, trading

in the Common Stock shall not have been suspended by the Commission or the Company’s principal Trading Market, and, at any time prior to the Closing Date, trading in securities generally as reported by Bloomberg L.P. shall not have been

suspended or limited, or minimum prices shall not have been established on securities whose trades are reported by such service, or any Trading Market, nor shall a banking moratorium have been declared either by the United States or New York State

authorities nor shall there have occurred any material outbreak or escalation of hostilities or other national or international calamity of such magnitude in its effect on, or any material adverse change in, any financial market which, in each case,

in the reasonable judgment of such Purchaser, makes it impracticable or inadvisable to purchase the Securities at the Closing.

ARTICLE

III.

REPRESENTATIONS AND WARRANTIES

3.1 Representations and Warranties of the Company. Except as set forth in the SEC Reports, which qualify these

representations and warranties in their entirety, or in the Disclosure Schedules, which Disclosure Schedules shall be deemed a part hereof and shall qualify any representation or otherwise made herein to the extent of the disclosure contained in the

corresponding section of the Disclosure Schedules, the Company hereby makes the following representations and warranties to each Purchaser:

(a) Subsidiaries. All of the direct and indirect Subsidiaries of the Company are set forth in the SEC

Reports or have otherwise been disclosed to Purchasers by the Company. The Company owns, directly or indirectly, all of its capital stock or other equity interests of each Subsidiary free and clear of any Liens, and all of the issued and outstanding

shares of capital stock of each Subsidiary are validly issued and are fully paid, non-assessable and free of preemptive and similar rights to subscribe for or purchase securities.

(b) Organization and Qualification. The Company and each of the Subsidiaries is an entity duly

incorporated or otherwise organized, validly existing and in good standing under the laws of the jurisdiction of its incorporation or organization, with the requisite power and authority to own and use its properties and assets and to carry on its

business as currently conducted. Neither the Company nor any Subsidiary is in violation nor default of any of the provisions of its respective certificate or articles of incorporation, bylaws or other organizational or charter documents. Each of the

Company and the Subsidiaries is duly qualified to conduct business and is in good standing as a foreign corporation or other entity in each jurisdiction in which the nature of the business conducted or property owned by it makes such qualification

necessary, except where the failure to be so qualified or in good standing, as the case may be, could not have or reasonably be expected to result in: (i) a material adverse effect on the legality, validity or enforceability of any Transaction

Document, (ii) a material adverse effect on the results of operations, assets, business, prospects or condition (financial or otherwise) of the Company and the Subsidiaries, taken as a whole, or (iii) a material adverse effect on the

Company’s ability to perform in any material respect on a timely basis its obligations under any Transaction Document (any of (i), (ii) or (iii), a “Material Adverse Effect”) and no Proceeding has been instituted in any such

jurisdiction revoking, limiting or curtailing or seeking to revoke, limit or curtail such power and authority or qualification.

into and to consummate the transactions contemplated by this Agreement and each of the other Transaction Documents and otherwise to carry out its obligations hereunder and thereunder. The execution and delivery of this Agreement and each of the

other Transaction Documents by the Company and the consummation by it of the transactions contemplated hereby and thereby have been duly authorized by all necessary corporate action on the part of the Company and no further action is required by the

Company, the Board of Directors or the Company’s stockholders in connection herewith or therewith other than in connection with the Required Approvals. This Agreement and each other Transaction Document to which it is a party has been (or upon

delivery will have been) duly executed by the Company and, when delivered in accordance with the terms hereof and thereof, will constitute the valid and binding obligation of the Company enforceable against the Company in accordance with its terms,

except (i) as limited by general equitable principles and applicable bankruptcy, insolvency, reorganization, moratorium and other laws of general application affecting enforcement of creditors’ rights generally, (ii) as limited by

general equitable principles and laws relating to the availability of specific performance, injunctive relief or other equitable remedies and (iii) insofar as indemnification and contribution provisions may be limited by applicable law.

(d) No Conflicts. The execution, delivery and

performance by the Company of this Agreement and the other Transaction Documents to which it is a party, the issuance and sale of the Securities and the consummation by it of the transactions contemplated hereby and thereby do not and will not

(i) conflict with or violate any provision of the Company’s or any Subsidiary’s certificate or articles of incorporation or bylaws or other organizational or charter documents, or (ii) conflict with, or constitute a default (or

an event that with notice or lapse of time or both would become a default) under, result in the creation of any Lien upon any of the properties or assets of the Company or any Subsidiary, or give to others any rights of termination, amendment,

anti-dilution or similar adjustments, acceleration or cancellation (with or without notice, lapse of time or both) of, any agreement, credit facility, debt or other instrument (evidencing a Company or Subsidiary debt or otherwise) or other

understanding to which the Company or any Subsidiary is a party or by which any property or asset of the Company or any Subsidiary is bound or affected, or (iii) subject to the Required Approvals, conflict with or result in a violation of any

law, rule, regulation, order, judgment, injunction, decree or other restriction of any court or governmental authority to which the Company or a Subsidiary is subject (including federal and state securities laws and regulations), or by which any

property or asset of the Company or a Subsidiary is bound or affected; except in the case of each of clauses (ii) and (iii), such as would not have or reasonably be expected to result in a Material Adverse Effect.

(e) Filings, Consents and Approvals. 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 (including state blue sky law), local or other governmental authority or other Person in connection with the execution,

delivery and performance by the Company of the Transaction Documents, other than: (i) the filings required pursuant to Section 4.4 of this Agreement, (ii) the filing with the Commission pursuant to the Registration Rights Agreement,

(iii) notices and/or application(s) to and approvals by each applicable Trading Market for the listing of the Shares and the Common Stock underlying the Convertible Debentures and Preferred Stock for trading thereon in the time and manner

required thereby, (iv) filings required by the Financial Industry Regulatory Authority, and (v) the filing of Form D with the Commission and such filings as are required to be made under applicable state securities laws (collectively, the

“Required Approvals”).

(f) Issuance of the Securities; Qualification; Registration;

Securities Act Compliance and No Stop Orders. The Shares are duly authorized and, when issued and paid for in accordance with the applicable Transaction Documents, will be duly and validly issued, fully paid and

non-assessable, free and clear of all Liens imposed by the Company, except for restrictions set forth in the Transaction Documents. The Securities are not and will not be subject to the preemptive rights of

any holders of any security of the Company or similar contractual rights granted by the Company. The Preferred Stock and the Common Stock issuable upon conversion of the Preferred Stock, when issued in accordance with the terms of the Transaction

Documents, will be validly issued, fully paid and nonassessable, free and clear of all Liens imposed by the Company other than restrictions on transfer provided for in the Transaction Documents. The Company has reserved from its duly authorized

capital stock the maximum number of Common Shares issuable pursuant to this Agreement, the Convertible Debenture and the Preferred Stock.

(g) Capitalization. The Company has an authorized capitalization as set forth in the SEC Reports.

Except as disclosed in the SEC Reports, the Company has not issued any capital stock since its most recently filed periodic report under the Exchange Act, other than pursuant to its prior at the market sales agreement, the exercise of employee stock

options under the Company’s stock option plans, the issuance of shares of Common Stock to employees pursuant to the Company’s employee stock purchase plans or upon the vesting and settlement of restricted stock units under the

Company’s equity incentive plans and pursuant to the conversion and/or exercise of Common Stock Equivalents outstanding as of the date of the most recently filed periodic report under the Exchange Act. No Person has any right of first refusal,

preemptive right, right of participation, or any similar right to participate in the transactions contemplated by the Transaction Documents. Except as set forth in the SEC Reports or as a result of the purchase and sale of the Securities, there are

no outstanding options, warrants, scrip rights to subscribe to, calls or commitments of any character whatsoever relating to, or securities, rights or obligations convertible into or exercisable or exchangeable for, or giving any Person any right to

subscribe for or acquire, any shares of Common Stock or the capital stock of any Subsidiary, or contracts, commitments, understandings or arrangements by which the Company or any Subsidiary is or may become bound to issue additional shares of Common

Stock or Common Stock Equivalents or capital stock of any Subsidiary. The issuance and sale of the Securities will not obligate the Company or any Subsidiary to issue shares of Common Stock or other securities to any Person (other than the

Purchasers). Except as set forth in the SEC Reports, there are no outstanding securities of the Company or any Subsidiary with any provision that adjusts the exercise, conversion, exchange or reset price of such security or instrument upon an

issuance of securities by the Company or any Subsidiary. There are no outstanding securities or instruments of the Company or any Subsidiary that contain any redemption or similar provisions, and there are no contracts, commitments, understandings

or arrangements by which the Company or any Subsidiary is or may become bound to redeem a security of the Company or such Subsidiary. Except as set forth in SEC Reports, the Company does not have any stock appreciation rights or “phantom

stock” plans or agreements or any similar plan or agreement. All of the outstanding shares of capital stock of the Company are duly authorized, validly issued, fully paid and nonassessable, have been issued in compliance with all federal and

state securities laws, and none of such outstanding shares was issued in violation of any preemptive rights or similar rights to subscribe for or purchase securities that have not been waived. No further approval or authorization of any stockholder,

the Board of Directors or others is required for the issuance and sale of the Securities. Except as disclosed in the SEC Reports, there are no stockholders agreements, voting agreements or other similar agreements with respect to the Company’s

capital stock to which the Company is a party or, to the knowledge of the Company, between or among any of the Company’s stockholders.

(h) SEC Reports; Financial Statements. Except for the

annual report on Form 10-K for the year ended December 31, 2025 which was filed on April 16, 2026, the Company has filed all reports, schedules, forms, statements and other documents required to be

filed by the Company under the Securities Act and the Exchange Act, including pursuant to Section 13(a) or 15(d) thereof, for the one year preceding the date hereof (or such shorter period as the Company was required by law or regulation to

file such material) (the foregoing materials, including the exhibits thereto and documents incorporated by reference therein, being collectively referred to herein as the “SEC Reports”) on a timely basis or has had a valid

extension of such time of filing and has filed any such SEC Reports prior to the expiration of any such extension. As of their respective dates, the SEC Reports complied in all material respects with the requirements of the Securities Act and the

Exchange Act, as applicable, and none of the SEC Reports, when filed, 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. The Company has never been an issuer subject to Rule 144(i) under the Securities Act. The financial statements of the Company, together with the related notes, included in the

SEC Reports comply in all material respects with applicable accounting requirements and the rules and regulations of the Commission with respect thereto as in effect at the time of filing. Such financial statements have been prepared in accordance

with United States generally accepted accounting principles applied on a consistent basis during the periods involved (“GAAP”), except as may be otherwise specified in such financial statements or the notes thereto and except that

unaudited financial statements may not contain all footnotes required by GAAP, and fairly present in all material respects the financial position of the Company and its consolidated Subsidiaries 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, immaterial, year-end audit adjustments.

(i) Material Changes; Undisclosed Events, Liabilities or Developments. Since the date of the

latest audited financial statements included within the SEC Reports, except as set forth in the SEC Reports, (i) there has been no event, occurrence or development that has had or that could reasonably be expected to result in a Material

Adverse Effect, (ii) the Company has not incurred any liabilities (contingent or otherwise) other than (A) trade payables and accrued expenses incurred in the ordinary course of business consistent with past practice and

(B) liabilities not required to be reflected in the Company’s financial statements pursuant to GAAP or disclosed in filings made with the Commission, (iii) the Company has not altered its method of accounting in any material respect,

(iv) the Company has not declared or made any dividend or distribution of cash or other property to its stockholders or purchased, redeemed or made any agreements to purchase or redeem any shares of its capital stock and (v) the Company

has not issued any equity securities to any executive officer, director or Affiliate, except pursuant to existing Company stock option or omnibus incentive plans. The Company does not have pending before the Commission any request for confidential

treatment of information. Except for the issuance of the Securities contemplated by this Agreement, no event, liability, fact, circumstance, occurrence or development has occurred or exists or is reasonably expected to occur or exist with respect to

the Company or its Subsidiaries or their respective businesses, prospects, properties, operations, assets or financial condition that would be required to be disclosed by the Company under applicable securities laws at the time this representation

is made or deemed made that has not been publicly disclosed at least one Trading Day prior to the date that this representation is made.

(j) Litigation. Except as set forth in the SEC

Reports, there is no action, suit, inquiry, notice of violation, Proceeding or investigation pending or, to the knowledge of the Company, threatened in writing against or affecting the Company, any Subsidiary or any of their respective properties

before or by any court, arbitrator, governmental or administrative agency or regulatory authority (federal, state, county, local or foreign) (collectively, an “Action”) which, if there were an unfavorable decision, would result in

a Material Adverse Effect. None of the Actions in the SEC Reports, challenges the legality, validity or enforceability of any of the Transaction Documents or the Securities. During the last three (3) years prior to the date of this Agreement,

neither the Company nor any Subsidiary, nor any director or executive officer thereof, is or has been the subject of any Action involving a claim of violation of or liability under federal or state securities laws or a claim of breach of fiduciary

duty, which would result in a Material Adverse Effect. There has not been, and to the knowledge of the Company, there is not pending or contemplated, any investigation by the Commission involving the Company or any current or former director or

executive officer of the Company. The Commission has not issued any stop order or other order suspending the effectiveness of any registration statement filed by the Company or any Subsidiary under the Exchange Act or the Securities Act.

(k) Labor Relations. No labor dispute exists or, to the knowledge of the Company, is imminent with

respect to any of the employees of the Company, which would reasonably be expected to result in a Material Adverse Effect. None of the Company’s or its Subsidiaries’ employees is a member of a union that relates to such employee’s

relationship with the Company or such Subsidiary, and neither the Company nor any of its Subsidiaries is a party to a collective bargaining agreement, and the Company and its Subsidiaries believe that their relationships with their employees are

good. To the knowledge of the Company, no executive officer of the Company or any Subsidiary is, or is now expected to be, in violation of any material term of any employment contract, confidentiality, disclosure or proprietary information agreement

or non-competition agreement, or any other contract or agreement or any restrictive covenant in favor of any third-party, and the continued employment of each such executive officer does not subject the

Company or any of its Subsidiaries to any liability with respect to any of the foregoing matters. The Company and its Subsidiaries are in compliance with all applicable U.S. federal, state, local and foreign laws and regulations relating to

employment and employment practices, terms and conditions of employment and wages and hours, except where the failure to be in compliance would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.

(l) Compliance. Neither the Company nor any Subsidiary: (i) is in default under or in

violation of (and no event has occurred that has not been waived that, with notice or lapse of time or both, would result in a default by the Company or any Subsidiary under), nor has the Company or any Subsidiary received notice of a claim that it

is in default under or that it is in violation of, any indenture, loan or credit agreement or any other agreement or instrument to which it is a party or by which it or any of its properties is bound (whether or not such default or violation has

been waived), (ii) is in violation of any judgment, decree, or order of any court, arbitrator or other governmental authority or (iii) is or, in the last three (3) years, has been in violation of any statute, rule, ordinance or regulation

of any governmental authority, including without limitation all foreign, federal, state and local laws relating to taxes, environmental protection, occupational health and safety, product quality and safety and employment and labor matters, except

in each case as would not have or reasonably be expected to result in a Material Adverse Effect.

(m)

Environmental Laws. The Company and its Subsidiaries (i) are in compliance with all federal, state, local and foreign laws relating to pollution or protection of human health or the environment (including ambient air, surface water,

groundwater, land surface or subsurface strata), including laws relating to emissions, discharges, releases or threatened releases of chemicals, pollutants, contaminants, or toxic or hazardous substances or wastes (collectively, “Hazardous

Materials”) into the environment, or otherwise relating to the manufacture, processing, distribution, use, treatment, storage, disposal, transport or handling of Hazardous Materials, as well as all authorizations, codes, decrees, demands,

or demand letters, injunctions, judgments, licenses, notices or notice letters, orders, permits, plans or regulations, issued, entered, promulgated or approved thereunder (“Environmental Laws”); (ii) have received all permits

licenses or other approvals required of them under applicable Environmental Laws to conduct their respective businesses; and (iii) are in compliance with all terms and conditions of any such permit, license or approval where in each clause (i),

(ii) and (iii), the failure to so comply would be reasonably expected to have, individually or in the aggregate, a Material Adverse Effect.

(n) Regulatory Permits. The Company and the

Subsidiaries possess all certificates, authorizations and permits issued by the appropriate federal, state, local or foreign regulatory authorities necessary to conduct their respective businesses as described in the SEC Reports, except where the

failure to possess such permits would not reasonably be expected to result in a Material Adverse Effect (“Material Permits”), and neither the Company nor any Subsidiary has received any notice of proceedings relating to the

revocation or modification of any Material Permit.

(o) Title to Assets. The Company and the

Subsidiaries have good and marketable title in fee simple to all real property owned by them and good and marketable title in all personal property owned by them that is material to the business of the Company and the Subsidiaries, in each case free

and clear of all Liens, except for (i) Liens as do not materially affect the value of such property and do not materially interfere with the use made and proposed to be made of such property by the Company and the Subsidiaries, (ii) Liens

for the payment of federal, state or other taxes, for which appropriate reserves have been made therefor in accordance with GAAP and the payment of which is neither delinquent nor subject to penalties and (iii) such as would not, individually

or in the aggregate, result in a Material Adverse Effect. Any real property and facilities currently held under lease by the Company and the Subsidiaries are held by them under valid, subsisting and enforceable leases with which the Company and the

Subsidiaries are in compliance in all material respects.

(p) Intellectual Property. The

Company and each of its Subsidiaries owns or has adequate rights to use all trademarks, trade names, domain names, patents, patent rights, mask works, copyrights, technology, know-how (including trade secrets

and other unpatented or unpatentable proprietary or confidential information, systems or procedures), service marks, trade dress rights and other intellectual property and registrations and applications for registration for any of the foregoing that

are, in each case, material to the Company (collectively, “Intellectual Property”) and has such other rights, licenses, approvals and governmental authorizations, in each case, sufficient to conduct its business as now conducted

and as now proposed to be conducted in all material respects without any known violation or conflict with any third party Intellectual Property, and, to the Company’s and its Subsidiaries’ knowledge, there are no rights of third parties

to any such Intellectual Property owned by the Company and its Subsidiaries and none of the foregoing Intellectual Property rights owned or, licensed by the Company or any of its Subsidiaries is invalid or unenforceable, (ii) the Company has no

knowledge of any infringement by it or any of its Subsidiaries of Intellectual Property rights of others, and there is no pending or, to the Company’s knowledge, threatened action, suit, proceeding or claim by others that the Company and its

Subsidiaries infringe or otherwise violate any Intellectual Property rights of others, where such infringement or violation would have a Material Adverse Effect, (iii) the Company is not aware of any material infringement, misappropriation or

violation by others of, or conflict by others with rights of the Company or any of its Subsidiaries with respect to, any Intellectual Property, (iv) there is no suit, proceeding or claim being made against the Company or any of its Subsidiaries

or, to the knowledge of the Company and its Subsidiaries, any employee of the Company or any of its Subsidiaries, regarding Intellectual Property, challenging the Company’s and its Subsidiaries’ rights in or to any such Intellectual

Property or alleging other infringement that would have a Material Adverse Effect and the Company is unaware of any facts which could form a reasonable basis for any such action, suit, proceeding or claim, (v) to the Company’s knowledge,

there is no third-party U.S. patent or published U.S. patent application that contains claims for which an “interference proceeding” (as defined in 35 U.S.C. § 135) has been commenced against any material patent or patent

application described in the SEC Reports as being owned by or licensed to the Company and (vi) the Company and its Subsidiaries have not received any notice of infringement with respect to any patent or any notice challenging the validity,

scope or enforceability of any Intellectual Property owned by or licensed to the Company or any of its Subsidiaries, in each case the loss of which patent or Intellectual Property (or loss of rights thereto) would have a Material Adverse Effect. The

Company and its Subsidiaries have taken all reasonable steps necessary to secure their interests in such Intellectual Property from their employees and contractors (including, but not limited to, assignments of such Intellectual Property from such

employees and contractors) and to protect the confidentiality of all of their confidential information and trade secrets and that of third parties in their possession to the extent contractually required to do so.

(q) Insurance. The Company and the Subsidiaries are

insured by insurers of recognized financial responsibility against such losses and risks and in such amounts as are prudent and customary in the businesses in which the Company and the Subsidiaries are engaged, including, but not limited to,

directors and officers insurance coverage in amount deemed prudent by the Company. Neither the Company nor any Subsidiary has any reason to believe that it will not be able to renew its existing insurance coverage as and when such coverage expires

or to obtain similar coverage from similar insurers as may be necessary to continue its business at a cost that would not result in a Material Adverse Effect.

(r) Transactions with Affiliates and Employees. Except as set forth in the SEC Reports, none of

the officers or directors of the Company or any Subsidiary and, to the knowledge of the Company, none of the employees of the Company or any Subsidiary is presently a party to any transaction with the Company or any Subsidiary (other than for

services as employees, officers and directors), including any contract, agreement or other arrangement providing for the furnishing of services to or by, providing for rental of real or personal property to or from, providing for the borrowing of

money from or lending of money to or otherwise requiring payments to or from any officer, director or such employee or, to the knowledge of the Company, any entity in which any officer, director, or any such employee has a substantial interest or is

an officer, director, trustee, stockholder, member or partner, in each case in excess of $120,000 other than for (i) payment of salary or consulting fees for services rendered, (ii) reimbursement for expenses incurred on behalf of the

Company and (iii) other employee benefits, including stock option agreements under any stock option plan of the Company.

(s) Sarbanes-Oxley; Internal Accounting Controls. To the Company’s knowledge, the Company and the

Subsidiaries are in compliance in all material respects with any and all applicable requirements of the Sarbanes-Oxley Act of 2002, as amended, that are effective as of the date hereof, and any and all applicable rules and regulations promulgated by

the Commission thereunder that are effective as of the date hereof and as of the Closing Date. The Company maintains a system of internal accounting controls designed to provide reasonable assurance that: (i) transactions are executed in

accordance with management’s general or specific authorizations, (ii) transactions are recorded as necessary to permit preparation of financial statements in conformity with GAAP and to maintain asset accountability, (iii) access to

assets is permitted only in accordance with management’s general or specific authorization, and (iv) the recorded accountability for assets is compared with the existing assets at reasonable intervals and appropriate action is taken with

respect to any differences. The Company has established disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the Company and

designed such disclosure controls and procedures to ensure that material information required to be disclosed by the Company in the reports it files or submits under the Exchange Act is recorded, processed, summarized and reported, within the time

periods specified in the Commission’s rules and forms. Except as set forth in the SEC Reports, the Company’s certifying officers have evaluated the effectiveness of the disclosure controls and procedures of the Company as of the end of

the period covered by the most recently filed periodic report under the Exchange Act (such date, the “Evaluation Date”). The Company presented in its most recently filed periodic report under the Exchange Act the conclusions of

the certifying officers about the effectiveness of the disclosure controls and procedures based on their evaluations as of the Evaluation Date. Since the Evaluation Date, there have been no changes in the internal control over financial reporting

(as such term is defined in the Exchange Act) of the Company that have materially affected, or are reasonably likely to materially affect, the internal control over financial reporting of the Company.

(t) Certain Fees. Except for the fees and expenses of the Placement Agent and any other fee arrangement

triggered by this Offering, no brokerage or finder’s fees or commissions are or will be payable by the Company or any Subsidiary to any broker, financial advisor or consultant, finder, placement agent, investment banker, bank or other Person

with respect to the transactions contemplated by the Transaction Documents. The Purchasers shall have no obligation with respect to any fees or with respect to any claims made by or on behalf of other Persons for fees of a type contemplated in this

Section that may be due in connection with the transactions contemplated by the Transaction Documents.

(u) Private Placement. Assuming the accuracy of the

Purchasers’ representations and warranties set forth in Section 3.2, no registration under the Securities Act is required for the offer and sale of the Securities by the Company to the Purchasers as contemplated hereby. The issuance and

sale of the Securities hereunder does not contravene the rules and regulations of the Trading Market, subject to submission of the Nasdaq Listing of Additional Shares Notification Form and any required shareholder approval requirements contained in

the Transaction Documents.

(v) Investment Company. The Company is not and immediately after

receipt of payment for the Securities, will not be, an “investment company” within the meaning of the Investment Company Act of 1940, as amended. The Company shall conduct its business in a manner so that it will not become an

“investment company” subject to registration under the Investment Company Act of 1940, as amended.

(w) Registration Rights. Except as set forth in the SEC Reports or the Acquisition Agreement, no Person

has any right to cause the Company or any Subsidiary to effect the registration under the Securities Act of any securities of the Company or any Subsidiary that has not been satisfied or waived prior to the date hereof.

(x) Listing and Maintenance Requirements. The Common Stock is registered pursuant to

Section 12(b) or 12(g) of the Exchange Act, and the Company has taken no action designed to, or which to its knowledge is likely to have the effect of, terminating the registration of the Common Stock under the Exchange Act nor has the Company

received any notification that the Commission is contemplating terminating such registration. Except as disclosed in the SEC Reports, the Company has not, in the 12 months preceding the date hereof, received notice from any Trading Market on which

the Common Stock is or has been listed or quoted to the effect that the Company is not in compliance with the listing or maintenance requirements of such Trading Market. Except as set forth in the SEC Reports, the Company is in compliance with all

such listing and maintenance requirements. The Common Stock is currently eligible for electronic transfer through the Depository Trust Company or another established clearing corporation and the Company is current in payment of the fees to the

Depository Trust Company (or such other established clearing corporation) in connection with such electronic transfer.

(y) Application of Takeover Protections. The Company and the Board of Directors have taken all

necessary action, if any, in order to render inapplicable any control share acquisition, business combination, poison pill (including any distribution under a rights agreement) or other similar anti-takeover provision under the Company’s

certificate of incorporation (or similar charter documents) or the laws of its state of incorporation that is or could become applicable to the Purchasers as a result of the Purchasers and the Company fulfilling their obligations or exercising their

rights under the Transaction Documents, including without limitation as a result of the Company’s issuance of the Securities and the Purchasers’ ownership of the Securities.

(z) Disclosure. Except with respect to the material terms and conditions of the transactions

contemplated by the Transaction Documents and the representations made in Section 3.1(i), the Company confirms that neither it nor any other Person acting on its behalf has provided any of the Purchasers or their agents or counsel with any

information that it believes constitutes or might constitute material, non-public information. The Company understands and confirms that the Purchasers will rely on the foregoing representation in effecting

transactions in securities of the Company. All of the disclosure furnished by or on behalf of the Company to the Purchasers regarding the Company and its Subsidiaries, their respective businesses and the transactions contemplated hereby, including

the Disclosure Schedules to this Agreement, when taken together as a whole, is true and correct and does not contain any untrue statement of a material fact or omit to state any material fact necessary in order to make the statements made therein,

in the light of the circumstances under which they were made, not misleading. The Company acknowledges and agrees that no Purchaser makes or has made any representations or warranties with respect to the transactions contemplated hereby other than

those specifically set forth in Section 3.2 hereof.

(aa) No Integrated Offering. Assuming the

accuracy of the Purchasers’ representations and warranties set forth in Section 3.2, neither the Company, nor any of its controlled Affiliates, nor any Person acting on its or their behalf has, directly or indirectly, made any offers or

sales of any security or solicited any offers to buy any security, under circumstances that would cause this offering of the Securities to be integrated with prior offerings by the Company for purposes of (i) the Securities Act which would

require the registration of any such securities under the Securities Act, or (ii) any applicable shareholder approval provisions of any Trading Market on which any of the securities of the Company are listed or designated except with respect to

the Common Stock which may be issued in the connection with the Acquisition Agreement.

(bb)

Indebtedness. The SEC Reports set forth as of the date hereof all outstanding secured and unsecured Indebtedness of the Company or any Subsidiary, or for which the Company or any Subsidiary has commitments. For the purposes of this Agreement,

“Indebtedness” means (x) any liabilities for borrowed money or amounts owed in excess of $100,000 (other than trade accounts payable or accrued payroll liabilities incurred in the ordinary course of business), (y) all

guaranties, endorsements and other contingent obligations in respect of indebtedness of others, whether or not the same are or should be reflected in the Company’s consolidated balance sheet (or the notes thereto), except guaranties by

endorsement of negotiable instruments for deposit or collection or similar transactions in the ordinary course of business; and (z) the present value of any lease payments in excess of $100,000 due under leases required to be capitalized in

accordance with GAAP. Neither the Company nor any Subsidiary is in default with respect to any Indebtedness, which defaults, individually or in the aggregate, would have a Material Adverse Effect.

(cc) Tax Status. Except for matters that would not, individually or in the aggregate, have or

reasonably be expected to result in a Material Adverse Effect, the Company and its Subsidiaries each (i) has made or filed all material United States federal, state and local income and all foreign income and franchise tax returns, reports and

declarations required by any jurisdiction to which it is subject, (ii) has paid all material taxes and other governmental assessments and charges that are material in amount, shown or determined to be due on such returns, reports and

declarations and (iii) has set aside on its books provision reasonably adequate for the payment of all material taxes for periods subsequent to the periods to which such returns, reports or declarations apply. There are no unpaid taxes in any

material amount claimed to be due by the taxing authority of any jurisdiction, and the officers of the Company or of any Subsidiary know of no basis for any such claim.

(dd) No General Solicitation. Neither the Company nor any Person acting on behalf of the Company has

offered or sold any of the Securities by any form of general solicitation or general advertising. The Company has offered the Securities for sale only to each Purchaser as an “accredited investor” within the meaning of Rule 501 under the

Securities Act.

(ee) Foreign Corrupt Practices. Neither the Company nor any Subsidiary, nor to the

knowledge of the Company or any Subsidiary, any agent or other person acting on behalf of the Company or any Subsidiary, 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 any Subsidiary (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 FCPA.

(ff) Accountants. The Company’s accounting firm is Grant Thornton LLP. To the knowledge and

belief of the Company, such accounting firm (i) is a registered public accounting firm as required by the Exchange Act and (ii) shall express its opinion with respect to the financial statements to be included in the Company’s Annual

Report for the fiscal year ending December 31, 2026.

(gg) No Disagreements with Accountants and

Lawyers. 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.

(hh) Acknowledgment Regarding

Purchasers’ Purchase of Securities. The Company acknowledges and agrees that, to its knowledge, each of the Purchasers 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, to its knowledge, no Purchaser is 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 any Purchaser or any of their respective representatives or agents in connection with the Transaction Documents and the transactions contemplated thereby is merely

incidental to the Purchasers’ purchase of the Securities. The Company further represents to each 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.

(ii) Acknowledgment Regarding Purchaser’s Trading Activity. Anything in this Agreement or

elsewhere herein to the contrary notwithstanding (except for Sections 3.2(g) and 4.14 hereof), it is understood and acknowledged by the Company that: (i) none of the Purchasers has been asked by the Company to agree, nor has any Purchaser

agreed, to desist from purchasing or selling, long and/or short, securities of the Company, or “derivative” securities based on securities issued by the Company or to hold the Securities for any specified term, (ii) past or future

open market or other transactions by any Purchaser, specifically including, without limitation, Short Sales or “derivative” transactions, before or after the closing of this or future private placement transactions, may negatively impact

the market price of the Company’s publicly-traded securities, (iii) any Purchaser, and counter-parties in “derivative” transactions to which any such Purchaser is a party, directly or indirectly, presently may have a

“short” position in the Common Stock and (iv) each Purchaser shall not be deemed to have any affiliation with or control over any arm’s length counter-party in any “derivative” transaction. The Company further

understands and acknowledges that (y) one or more Purchasers may engage in hedging activities at various times during the period that the Securities are outstanding and (z) such hedging activities (if any) could reduce the value of the

existing stockholders’ equity interests in the Company at and after the time that the hedging activities are being conducted. The Company acknowledges that such aforementioned hedging activities do not constitute a breach of any of the

Transaction Documents.

(jj) Regulation M Compliance. The Company has not, and to its

knowledge no one acting on its behalf has, (i) 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, (ii) sold, bid for, purchased, or paid any compensation for soliciting purchases of, any of the Securities, or (iii) paid or agreed to pay to any Person any compensation for soliciting another to purchase any other

securities of the Company, other than, in the case of clauses (ii) and (iii), compensation paid to the Company’s placement agent in connection with the placement of the Securities.

(kk) Stock Option Plans. Each stock option granted by the Company under the Company’s stock

option plan was granted (i) in accordance with the terms of the Company’s stock option plan and (ii) with an exercise price at least equal to the fair market value of the Common Stock on the date such stock option would be considered

granted under GAAP and applicable law. No stock option granted under the Company’s stock option plan has been backdated. The Company has not knowingly granted, and there is no and has been no Company policy or practice to knowingly grant,

stock options prior to, or otherwise knowingly coordinate the grant of stock options with, the release or other public announcement of material information regarding the Company or its Subsidiaries or their financial results or prospects.

(ll) Office of Foreign Assets Control. Neither the Company nor any Subsidiary nor, to the

Company’s knowledge, any director, officer, agent, employee or affiliate of the Company or any Subsidiary is currently subject to any U.S. sanctions administered by the Office of Foreign Assets Control of the U.S. Treasury Department

(“OFAC”).

(mm) U.S. Real Property Holding Corporation. The Company is not and

has never been a U.S. real property holding corporation within the meaning of Section 897 of the Internal Revenue Code of 1986, as amended, and the Company shall so certify upon Purchaser’s request.

(nn) Bank Holding Company Act. Neither the Company

nor any of its Subsidiaries is subject to the Bank Holding Company Act of 1956, as amended (the “BHCA”) and to regulation by the Board of Governors of the Federal Reserve System (the “Federal Reserve”). Neither

the Company nor any of its Subsidiaries owns or controls, directly or indirectly, five percent (5%) or more of the outstanding shares of any class of voting securities or twenty-five percent or more of the total equity of a bank or any entity that

is subject to the BHCA and to regulation by the Federal Reserve. Neither the Company nor any of its Subsidiaries exercises a controlling influence over the management or policies of a bank or any entity that is subject to the BHCA and to regulation

by the Federal Reserve.

(oo) Money Laundering. The operations of the Company and its Subsidiaries

are and have been conducted at all times in compliance in all material respects with applicable financial record-keeping and reporting requirements of the Currency and Foreign Transactions Reporting Act of 1970, as amended, applicable money

laundering statutes and applicable rules and regulations thereunder (collectively, the “Money Laundering Laws”), and no Action or Proceeding by or before any court or governmental agency, authority or body or any arbitrator

involving the Company or any Subsidiary with respect to the Money Laundering Laws is pending or, to the knowledge of the Company or any Subsidiary, threatened.

(pp) No Disqualification Event. With respect to the Securities to be offered and sold hereunder in

reliance on Rule 506 under the Securities Act, none of the Company, any of its predecessors, any director, executive officer, other officer of the Company participating in the offering hereunder, any beneficial owner of 20% or more of the

Company’s outstanding voting equity securities, calculated on the basis of voting power, nor any promoter (as that term is defined in Rule 405 under the Securities Act) connected with the Company in any capacity at the time of sale (each, an

“Issuer Covered Person”) is subject to any of the “Bad Actor” disqualifications described in Rule 506(d)(1)(i) to (viii) under the Securities Act (a “Disqualification Event”), except for a

Disqualification Event covered by Rule 506(d)(2) or (d)(3). The Company has exercised reasonable care to determine whether any Issuer Covered Person is subject to a Disqualification Event. The Company has complied, to the extent applicable, with its

disclosure obligations under Rule 506(e), and has furnished to the Purchasers and the Placement Agent a copy of any disclosures provided thereunder.

(qq) Notice of Disqualification Event. The Company will notify the Purchasers and the Placement Agent

in writing, prior to the Closing Date of (i) any Disqualification Event relating to any Issuer Covered Person and (ii) any event that would, with the passage of time, reasonably be expected to become a Disqualification Event relating to

any Issuer Covered Person, in each case, of which it is aware.

(rr) Other Covered Persons. Other

than the Placement Agent, the Company is not aware of any Person (other than any Issuer Covered Person) that has been or will be paid (directly or indirectly) remuneration for solicitation of the Purchasers in connection with the sale of any

Securities.

3.2 Representations and Warranties of the Purchasers. Each Purchaser, for itself and for no other

Purchaser, hereby represents and warrants as of the date hereof and as of the Closing Date to the Company as follows (unless as of a specific date therein, in which case they shall be accurate as of such date):

(a) Organization; Authority. Such Purchaser is either an individual or an entity duly incorporated or

formed, validly existing and in good standing under the laws of the jurisdiction of its incorporation or formation with full right, corporate, partnership, limited liability company or similar power and authority to enter into and to consummate the

transactions contemplated by the Transaction Documents and otherwise to carry out its obligations hereunder and thereunder. The execution and delivery of the Transaction Documents and performance by such Purchaser of the transactions contemplated by

the Transaction Documents have been duly authorized by all necessary corporate, partnership, limited liability company or similar action, as applicable, on the part of such Purchaser. Each Transaction Document to which it is a party has been duly

executed by such Purchaser, and when delivered by such Purchaser in accordance with the terms hereof, will constitute the valid and legally binding obligation of such Purchaser, enforceable against it in accordance with its terms, except (i) as

limited by general equitable principles and applicable bankruptcy, insolvency, reorganization, moratorium and other laws of general application affecting enforcement of creditors’ rights generally, (ii) as limited by laws relating to the

availability of specific performance, injunctive relief or other equitable remedies and (iii) insofar as indemnification and contribution provisions may be limited by applicable law.

(b) No Conflicts. The execution, delivery and

performance by the Purchaser of this Agreement, the other Transaction Documents to which it is a party, and the consummation by the Purchaser of the transactions contemplated hereby and thereby will not (i) result in a violation of the

organizational documents of the Purchaser, (ii) conflict with, or constitute a default (or an event which with notice or lapse of time or both would become a default) under, or give to others any rights of termination, amendment, acceleration

or cancellation of, any agreement, indenture or instrument to which the Purchaser is a party, or (iii) result in a violation by such Purchaser of any law, rule, regulation, order, judgment or decree (including federal and state securities laws)

applicable to such Purchaser, except in the case of clauses (ii) and (iii) above, for such conflicts, defaults, rights or violations which would not, individually or in the aggregate, reasonably be expected to have a material adverse effect on

the ability of the Purchaser to perform its obligations under the Transaction Documents to which it is a party.

account, for investment purposes only, and has no direct or indirect arrangement or understandings with any other persons to distribute or regarding the distribution of such Securities (this representation and warranty not limiting such

Purchaser’s right to sell the Securities pursuant to the Registration Statement or otherwise in compliance with applicable federal and state securities laws).

(d) Experience of Such Purchaser. Such Purchaser, either alone or together with its representatives,

has such knowledge, sophistication and experience in business and financial matters so as to be capable of evaluating the merits and risks of the prospective investment in the Securities, and has so evaluated the merits and risks of its decision to

purchase Securities pursuant to the Transaction Documents. The Purchaser understands that nothing in this Agreement or any other materials presented by or on behalf of the Company to the Purchaser in connection with the purchase of the Securities

constitutes legal, tax or investment advice. The Purchaser has consulted such legal, tax and investment advisors as it, in its sole discretion, has deemed necessary or appropriate in connection with its purchase of the Securities. The Purchaser

understands that the Placement Agent has acted solely as the agent of the Company in this placement of the Securities and the Purchaser has not relied on the business or legal advice of the Placement Agent or any of their agents, counsel or

Affiliates in making its investment decision hereunder, and confirms that none of such Persons has made any representations or warranties to the Purchaser in connection with the transactions contemplated by the Transaction Documents. Such Purchaser

is able to bear the economic risk of an investment in the Securities and, at the present time, is able to afford a complete loss of such investment.

(e) Access to Information. Such Purchaser acknowledges that it has had the opportunity to review the

Transaction Documents (including all exhibits and schedules thereto) and the SEC Reports and has been afforded (i) the opportunity to ask such questions as it has deemed necessary of, and to receive answers from, representatives of the Company

concerning the terms and conditions of the offering of the Securities and the merits and risks of investing in the Securities; (ii) access to information about the Company and its financial condition, results of operations, business,

properties, management and prospects sufficient to enable it to evaluate its investment; and (iii) the opportunity to obtain such additional information that the Company possesses or can acquire without unreasonable effort or expense that is

necessary to make an informed investment decision with respect to the investment. Such Purchaser acknowledges and agrees that neither the Placement Agent nor any Affiliate of the Placement Agent has provided such Purchaser with any information or

advice with respect to the Securities nor is such information or advice necessary or desired. Neither the Placement Agent nor any Affiliate has made or makes any representation as to the Company or the quality of the Securities and the Placement

Agent and any Affiliate may have acquired non-public information with respect to the Company which such Purchaser agrees need not be provided to it. In connection with the issuance of the Securities to

such Purchaser, neither the Placement Agent nor any of its Affiliates has acted as a financial advisor or fiduciary to such Purchaser.

(f) Certain Transactions and Confidentiality. Other

than consummating the transactions contemplated hereunder, such Purchaser has not, nor has any Person acting on behalf of or pursuant to any understanding with such Purchaser, directly or indirectly executed any purchases or sales, including Short

Sales, of the securities of the Company during the period commencing as of the time that such Purchaser first received a term sheet (written or oral) from the Company or any other Person representing the Company setting forth the material terms

of the transactions contemplated hereunder and ending immediately prior to the execution hereof. Notwithstanding the foregoing, in the case of a Purchaser that 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 representation 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. Other than to other Persons party to this Agreement or to such

Purchaser’s representatives, including, without limitation, its officers, directors, partners, legal and other advisors, employees, agents and Affiliates, such Purchaser has maintained the confidentiality of all disclosures made to it in

connection with this transaction (including the existence and terms of this transaction). Notwithstanding the foregoing, for the avoidance of doubt, nothing contained herein shall constitute a representation or warranty, or preclude any actions,

with respect to locating or borrowing shares in order to effect Short Sales or similar transactions in the future.

(g) No Voting Agreements. The Purchaser is not a party to any agreement or arrangement, whether written

or oral, between the Purchaser and any other Purchaser and any of the Company’s stockholders as of the date hereof, regulating the management of the Company, the stockholders’ rights in the Company, the transfer of shares in the Company,

including any voting agreements, stockholder agreements or any other similar agreement, even if its title is different or has any other relations or agreements with any of the Company’s stockholders, directors or officers.

(h) Brokers. No agent, broker, investment banker, person or firm acting in a similar capacity on behalf

of or under the authority of the Purchaser is or will be entitled to any broker’s or finder’s fee or any other commission or similar fee, directly or indirectly, for which the Company or any of its Affiliates after the Closing could have

any liabilities in connection with this Agreement, any of the transactions contemplated by this Agreement, or on account of any action taken by the Purchaser in connection with the transactions contemplated by this Agreement.

(i) Independent Advice. Each Purchaser understands that nothing in this Agreement or any other

materials presented by or on behalf of the Company to the Purchaser in connection with the purchase of the Securities constitutes legal, tax or investment advice.

(j) Purchaser Status. At the time such Purchaser was offered the Securities, it was, and as of the date

hereof it is, it will be either (i) an “accredited investor” as defined in Rule 501(a)(1), (a)(2), (a)(3), (a)(7), (a)(8), (a)(9), (a)(12) or (a)(13) under the Securities Act, or (ii) a “qualified institutional

buyer” as defined in Rule 144A(a) under the Securities Act.

(k) General Solicitation. Such

Purchaser is not purchasing the Securities as a result of any advertisement, article, notice or other communication regarding the Securities published in any newspaper, magazine or similar media or broadcast over television or radio or presented at

any seminar or, to the knowledge of such Purchaser, any other general solicitation or general advertisement

(l) Experience of the Purchaser. Such Purchaser, either alone or together with its representatives, has

such knowledge, sophistication and experience in business and financial matters so as to be capable of evaluating the merits and risks of the prospective investment in the Securities, and has so evaluated the merits and risks of such investment.

Such Purchaser is able to bear the economic risk of an investment in the Securities and, at the present time, is able to afford a complete loss of such investment.

The Company acknowledges and agrees that the representations contained in this Section 3.2 shall not modify, amend or affect such

Purchaser’s right to rely on the Company’s representations and warranties contained in this Agreement or any representations and warranties contained in any other Transaction Document, or any other document or instrument executed and/or

delivered in connection with this Agreement or the consummation of the transactions contemplated hereby. Notwithstanding the foregoing, for the avoidance of doubt, nothing contained herein shall constitute a representation or warranty, or preclude

any actions, with respect to locating or borrowing shares in order to effect Short Sales or similar transactions in the future.

ARTICLE IV.

OTHER AGREEMENTS OF THE PARTIES

4.1 Removal Legends.

(a) The Shares may only be disposed of in compliance with state and federal securities

laws. In connection with any transfer of Shares 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 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 Shares 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 the

Registration Rights Agreement and shall have the rights and obligations of a Purchaser under this Agreement and the Registration Rights Agreement.

(b) The Purchasers agree to the imprinting, so long as is required by this

Section 4.1, of a legend on any of the Shares in the following form:

[NEITHER] THIS SECURITY [NOR

THE SECURITIES INTO WHICH THIS SECURITY IS CONVERTIBLE] HAS [NOT] 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 a 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 Shares to a financial institution that is an “accredited investor” as defined in Rule 501(a) under the Securities Act and, if required

under the terms of such arrangement, such Purchaser may transfer pledged or secured Shares to the pledgees or secured parties. Such a pledge or transfer would not be subject to approval of the Company and no legal opinion of legal counsel of the

pledgee, secured party or pledgor shall be required in connection therewith. Further, no notice shall be required of such pledge. At the appropriate Purchaser’s expense, the Company will execute and deliver such reasonable documentation as a

pledgee or secured party of Shares may reasonably request in connection with a pledge or transfer of the Shares including, if the Shares are subject to registration pursuant to the Registration Rights Agreement, the preparation and filing of any

required prospectus supplement under Rule 424(b)(3) under the Securities Act or other applicable provision of the Securities Act to appropriately amend the list of Selling Stockholders (as defined in the Registration Rights Agreement) thereunder.

evidencing the Shares shall not contain any legend (including the legend set forth in Section 4.1(b) hereof): (i) while a registration statement covering the resale of such security is effective under the Securities Act, (ii) following any

sale of such Shares pursuant to Rule 144, (iii) if requested by a Purchaser, if such Shares are eligible for sale under Rule 144 or (iv) if such legend is not required under applicable requirements of the Securities Act (including judicial

interpretations and pronouncements issued by the staff of the Commission). The Company shall cause its counsel to issue a legal opinion to the Transfer Agent or the Purchaser promptly if required by the Transfer Agent to effect the removal of the

legend hereunder, or if requested by a Purchaser, respectively, subject to the receipt of documentation and representations customary for the issuance of such opinion. The Company agrees that following such time as such legend is no longer required

under this Section 4.1(d), the Company will, no later than the earlier of (i) two (2) Trading Days and (ii) 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 representing Shares, issued with a restrictive legend (such date, the “Legend Removal Date”), deliver or cause to be delivered to such Purchaser a certificate (or a book-entry

statement 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. Certificates for Securities 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 such 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 representing Shares issued with a restrictive legend.

(d) In addition to such Purchaser’s other available remedies, the Company shall pay

to a Purchaser, in cash, either (i) as partial liquidated damages and not as a penalty, for each $1,000 of (based on the VWAP of the Common Stock on the date such Securities are submitted to the Transfer Agent) delivered for removal of the

restrictive legend and subject to Section 4.1(c), $10 per Trading Day (increasing to $20 per Trading Day five (5) Trading Days after such damages have begun to accrue) for each Trading Day after the Legend Removal Date until such Shares

are delivered without a legend and (ii) if the Company fails to (a) issue and deliver (or cause to be delivered) to a Purchaser by the Legend Removal Date a certificate representing the Securities so delivered to the Company by such

Purchaser that is free from all restrictive and other legends or (b) if after the Legend Removal Date such Purchaser purchases (in an open market transaction or otherwise) shares of Common Stock to deliver in satisfaction of a sale by such

Purchaser of all or any portion of the number of shares of Common Stock, or a sale of a number of shares of Common Stock equal to all or any portion of the number of shares of Common Stock, that such Purchaser anticipated receiving from the Company

without any restrictive legend, then an amount equal to the excess of such Purchaser’s total purchase price (including brokerage commissions and other reasonable and documented

out-of-pocket expenses, if any) for the Common Stock so purchased (including brokerage commissions and other reasonable and documented out-of-pocket expenses, if any) (the “Buy-In Price”) over the product of (A) such number of Shares that the Company was required to deliver to such

Purchaser by the Legend Removal Date multiplied by (B) the lowest closing sale price of the Common Stock on any Trading Day during the period commencing on the date of the delivery by such Purchaser to the Company of the applicable Shares and

ending on the date of such delivery and payment under this Section 4.1(d).

4.2 Furnishing of Information; Public

Information. Until the earlier of the date the Purchaser owns no Shares or one year after the Closing Date, the Company covenants to use commercially reasonable efforts maintain the registration of the Common Stock under Section 12(b) or

12(g) of the Exchange Act and to timely file (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 the Exchange Act even if the Company

is not then subject to the reporting requirements of the Exchange Act.

4.3 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 for purposes of the rules and

regulations of any Trading Market such that it would require shareholder approval prior to the closing of such other transaction unless shareholder approval is obtained before the closing of such subsequent transaction or pursuant to the terms of

the Convertible Debenture.

4.4 Securities Laws Disclosure; Publicity. The Company shall

(a) by the Disclosure Time, issue a press release disclosing the material terms of the transactions contemplated hereby, and (b) file a Current Report on Form 8-K, including the Transaction Documents

as exhibits thereto, with the Commission within the time required by the Exchange Act. From and after the issuance of such press release, the Company represents to the Purchasers that it shall have publicly disclosed all material, non-public information delivered to any of the Purchasers by the Company or any of its Subsidiaries, or any of their authorized officers, directors, employees or agents in connection with the transactions

contemplated by the Transaction Documents. In addition, effective upon the issuance of such press release, the Company acknowledges and agrees that any and all confidentiality or similar obligations under any agreement, whether written or oral,

between the Company, any of its Subsidiaries or any of their respective officers, directors, agents, employees or Affiliates on the one hand, and any of the Purchasers or any of their Affiliates on the other hand, shall terminate. The Company and

each Purchaser shall consult with each other in issuing any other press releases with respect to the transactions contemplated hereby, and neither the Company nor any Purchaser shall issue any such press release nor otherwise make any such public

statement without the prior consent of the Company, with respect to any press release of any Purchaser, or without the prior consent of each Purchaser, with respect to any press release of the Company, which consent shall not unreasonably be

withheld or delayed, except if such disclosure is required by law, in which case the disclosing party shall promptly provide the other party with prior notice of such public statement or communication. Notwithstanding the foregoing, the Company

shall not publicly disclose the name of any Purchaser, or include the name of any Purchaser in any filing with the Commission or any regulatory agency or Trading Market, without the prior written consent of such Purchaser (not to be unreasonably

withheld), except (a) as required by federal securities law in connection with (i) any registration statement contemplated by this Agreement and (ii) the filing of final Transaction Documents with the Commission and (b) to the

extent such disclosure is required by law or Trading Market regulations, in which case the Company shall provide the Purchasers with prior notice of such disclosure permitted under this clause (b).

4.5 Shareholder Rights Plan. No claim will be made or enforced by the Company or, with the consent of the Company, any

other Person, that any 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 any Purchaser could be deemed to trigger the provisions of any such plan or arrangement, by virtue of receiving Securities under the Transaction Documents or under any other agreement between the

Company and the Purchasers.

4.6 Non-Public Information. Except with

respect to the material terms and conditions of the transactions contemplated by the Transaction Documents, which shall be disclosed pursuant to Section 4.4, and except for representations made under Section 3.1(i), the Company covenants

and agrees that neither it, nor any other Person acting on its behalf will provide any Purchaser or its agents or counsel with any information that constitutes, or the Company reasonably believes constitutes, material

non-public information, unless prior thereto such Purchaser shall have consented to the receipt of such information and agreed with the Company to keep such information confidential. The Company understands

and confirms that each Purchaser shall be relying on the foregoing covenant in effecting transactions in securities of the Company. To the extent that the Company delivers any material, non-public information

to a Purchaser without such Purchaser’s consent, the Company hereby covenants and agrees that such Purchaser shall not have any duty of confidentiality to the Company, any of its Subsidiaries, or any of their respective officers, directors,

agents, employees or Affiliates, or a duty to the Company, any of its Subsidiaries or any of their respective officers, directors, agents, employees or Affiliates not to trade on the basis 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 any Subsidiaries, the Company shall simultaneously with the delivery of such notice file such material non-public information

with the Commission pursuant to a Current Report on Form 8-K. The Company understands and confirms that each Purchaser shall be relying on the foregoing covenant in effecting transactions in securities of the

Company.

4.7 Use of Proceeds. The Company shall use the net proceeds for additional working capital, general

corporate purposes and in connection with the cash payments due under the Acquisition Agreement and shall not use such proceeds for (a) the redemption of any Common Stock or Common Stock Equivalents, (b) for the satisfaction of any portion

of the Company’s debt (other than payment of trades payable in the ordinary course of the Company’s business and prior practices), (c) for the settlement of any outstanding litigation or (d) in violation of FCPA or OFAC regulations.

4.8 Indemnification of Purchasers. Subject to the provisions of this

Section 4.8, the Company will indemnify and hold each Purchaser 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 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 (each, a “Purchaser

Party”) harmless from any and all losses, liabilities, obligations, claims, contingencies, damages, costs and expenses, including all judgments, amounts paid in settlements, court costs and reasonable attorneys’ fees and costs of

investigation that any such Purchaser Party may suffer or incur as a result of or relating to (a) any breach of any of the representations, warranties, covenants or agreements made by the Company in this Agreement or in the other Transaction

Documents or (b) any action instituted against the Purchaser Parties in any capacity, or any of them or their respective Affiliates, by any stockholder of the Company who is not an Affiliate of such Purchaser Party, with respect to any of the

transactions contemplated by the Transaction Documents (unless such action is solely 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). If any action shall be brought against any Purchaser Party in respect of which indemnity may be sought pursuant to this Agreement, such Purchaser Party shall promptly notify the Company in writing, and the

Company shall have the right to assume the defense thereof with counsel of its own choosing reasonably acceptable to the Purchaser Party. Any Purchaser Party shall have the right to employ separate counsel in any such action and participate in the

defense thereof, but the fees and expenses of such counsel shall be at the expense of such Purchaser Party except to the extent that (i) the employment thereof has been specifically authorized by the Company in writing, (ii) the Company

has failed after a reasonable period of time to assume such defense and to employ counsel or (iii) in such action there is, in the reasonable opinion of counsel, a material conflict on any material issue between the position of the Company and

the position of such Purchaser Party, in which case the Company shall be responsible for the reasonable fees and expenses of no more than one such separate counsel. The Company will not be liable to any Purchaser Party under this Agreement

(y) for any settlement by a Purchaser Party effected without the Company’s prior written consent, which shall not be unreasonably withheld or delayed; or (z) to the extent, but only to the extent that a loss, claim, damage or

liability is attributable to any Purchaser Party’s breach of any of the representations, warranties, covenants or agreements made by such Purchaser Party in this Agreement or in the other Transaction Documents or the fraud, gross negligence or

willful misconduct of such Purchaser Party as determined by a final, non-appealable judgment of a court of competent jurisdiction. The indemnification required by this Section 4.8 shall be made by

periodic payments of the amount thereof during the course of the investigation or defense, as and when bills are received or are incurred; provided, however, that if it is subsequently determined by a final,

non-appealable judgment of a court of competent jurisdiction that a Purchaser Party was not entitled to receive such periodic payments, such Purchaser Party shall, within five Business Days of such judgment,

return such payments to the Company. The indemnity agreements contained herein shall be in addition to any cause of action or similar right of any Purchaser Party against the Company or others and any liabilities the Company may be subject to

pursuant to law.

4.9 Reservation of Common Stock. As of the date hereof, the Company has reserved and the Company

shall continue to reserve and keep available at all times, free of preemptive rights, a sufficient number of shares of Common Stock for the purpose of enabling the Company to issue the Shares pursuant to this Agreement.

4.10 Listing of Common Stock. The Company hereby agrees to use commercially reasonable best efforts to maintain the

listing or quotation of the Common Stock on the Trading Market on which it is currently listed, and concurrently with the Closing, the Company shall apply to list or quote all of the Shares on such Trading Market and promptly secure the listing of

all of the Shares on such Trading Market to the extent required by the rules of such Trading Market. The Company further agrees, if the Company applies to have the Common Stock traded on any other Trading Market, it will then include in such

application all of the Shares and will take such other action as is necessary to cause all of the Shares to be listed or quoted on such other Trading Market as promptly as possible. The Company will then take all action reasonably necessary to

continue the listing and trading of its Common Stock on a Trading Market and will comply in all respects with the Company’s reporting, filing and other obligations under the bylaws or rules of the Trading Market. For so long as the Company

maintains a listing or quotation of the Common Stock on a Trading Market, the Company agrees to use commercially reasonable efforts 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.

4.11 [Reserved]

4.12 Subsequent Equity Sales.

(a) From the date hereof until thirty (30) days following the Effective Date, neither the Company nor any

Subsidiary shall (i) issue, enter into any agreement to issue or announce the issuance or proposed issuance of any Common Stock or Common Stock Equivalents or (ii) file any registration statement or any amendment or supplement thereto, in

each case other than as contemplated pursuant to the Registration Rights Agreement, the Acquisition Agreement or, filing a registration statement on Form S-8 in connection with any employee compensation plan.

(b) From the date hereof until six (6) months after the Effective Date, neither the Company nor any

Subsidiary shall effect or enter into an agreement to effect any issuance by the Company or any of its Subsidiaries of shares of Common Stock or Common Stock Equivalents (or a combination of units thereof) involving a Variable Rate Transaction.

“Variable Rate Transaction” means a transaction in which the Company (i) issues or sells any debt or equity securities that are convertible into, exchangeable or exercisable for, or include the right to receive additional shares of

Common Stock either (A) at a conversion price, exercise price or exchange rate or other price that is based upon and/or varies with the trading prices of or quotations for the Common Stock at any time after the initial issuance of such debt or

equity securities, or (B) with a conversion, exercise or exchange price that is subject to being reset at some future date after the initial issuance of such debt or equity security or upon the occurrence of specified or contingent events

directly or indirectly related to the business of the Company or the market for shares of Common Stock, or (ii) enters into, or effects a transaction under, any agreement, including, but not limited to, an equity line of credit or at-the-market offering facility, whereby the Company may issue securities at a future determined price. Any Purchaser shall be entitled to obtain injunctive relief against the

Company to preclude any such issuance, which remedy shall be in addition to any right to collect damages.

Issuance and (ii) thirty (30) days after the Effective Date, the Company will be permitted to enter into a sales agreement, at-the-market sales agreement or similar

agreement (an “ATM”) only with the Placement Agent (and file any prospectus supplement with the Commission in connection with such ATM).

4.13 Equal Treatment of Purchasers. No consideration (including any modification of any Transaction Document)

shall be offered or paid to any Person to amend or consent to a waiver or modification of any provision of the Transaction Documents unless the same consideration is also offered to all of the parties to the Transaction Documents. For clarification

purposes, this provision constitutes a separate right granted to each Purchaser by the Company and negotiated separately by each Purchaser, and is intended for the Company to treat the Purchasers as a class and 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.

4.14 Certain Transactions and Confidentiality. Each Purchaser,

severally and not jointly with the other Purchasers, covenants that neither it, nor any Affiliate acting on its behalf or pursuant to any understanding with it will execute any purchases or sales, including Short Sales, of any of the Company’s

securities during the period commencing with the execution of this Agreement and ending at such time that the transactions contemplated by this Agreement are first publicly announced pursuant to the initial press release as described in

Section 4.4. Each Purchaser, severally and not jointly with the other Purchasers, covenants that until such time as the transactions contemplated by this Agreement are publicly disclosed by the Company pursuant to the initial press release as

described in Section 4.4, such Purchaser will maintain the confidentiality of the existence and terms of this transaction and the information included in the Disclosure Schedules. Notwithstanding the foregoing and notwithstanding anything

contained in this Agreement to the contrary, the Company expressly acknowledges and agrees that (i) no Purchaser makes any representation, warranty or covenant hereby that it will not engage in effecting transactions in any securities of the

Company after the time that the transactions contemplated by this Agreement are first publicly announced pursuant to the initial press release as described in Section 4.4, (ii) no Purchaser shall be restricted or prohibited from effecting any

transactions in any securities of the Company in accordance with applicable securities laws from and after the time that the transactions contemplated by this Agreement are first publicly announced pursuant to the initial press release as described

in Section 4.4 and (iii) no Purchaser shall have any duty of confidentiality or duty not to trade in the securities of the Company to the Company or its Subsidiaries after the issuance of the initial press release as described in

Section 4.4. Notwithstanding the foregoing, in the case of a Purchaser that 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.

4.15 Lock-Up Agreements. The Company shall not amend, modify, waive or terminate any provision of any of the Lock-Up Agreements without the prior written consent of the

Placement Agent, except to extend the term of the lock-up period, and shall enforce the provisions of each Lock-Up Agreement in accordance with its terms. If any party

to a Lock-Up Agreement breaches any provision of a Lock-Up Agreement, the Company shall promptly use its commercially reasonable best efforts to seek specific

performance of the terms of such Lock-Up Agreement.

ARTICLE V.

MISCELLANEOUS

5.1 Termination. This Agreement may be terminated by any Purchaser, as to such Purchaser’s obligations

hereunder only and without any effect whatsoever on the obligations between the Company and the other Purchasers, by written notice to the other parties, if the Closing has not been consummated on or before the fifth (5th) Trading Day following the date hereof; provided, however, that no such termination will affect the right of any party to sue for any breach by any other party (or parties).

5.2 Fees and Expenses. Except as expressly set forth in the Transaction Documents to the contrary, 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. 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 exercise notice delivered by a Purchaser), stamp

taxes and other taxes and duties levied in connection with the delivery of any Securities to the Purchasers.

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 facsimile at the facsimile number or email attachment at the email 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 facsimile at the facsimile

number or email attachment at the email 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. To the extent that any notice provided pursuant to any Transaction Document constitutes, or contains material, non-public information regarding the Company or any of the Subsidiaries, the Company shall simultaneously with the delivery of such notice file such material non-public

information with the Commission pursuant to a Current Report on Form 8-K.

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 and Purchasers which purchased at least 50.1% in interest of the Securities based on the initial Subscription Amounts

hereunder (or, prior to the Closing Date, the Company and each Purchaser) or, in the case of a waiver, by the party against whom enforcement of any such waived provision is sought, provided that if any amendment, modification or waiver

disproportionately and adversely impacts a Purchaser (or group of Purchasers), the consent of such disproportionately impacted Purchaser (or group of Purchasers) shall also be required. 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. Any proposed amendment or waiver that disproportionately, materially and adversely affects the rights and obligations of any Purchaser relative to the

comparable rights and obligations of the other Purchasers shall require the prior written consent of such adversely affected Purchaser. Any amendment effected in accordance with this Section 5.5 shall be binding upon each Purchaser and holder

of Securities and the Company.

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. The Company may not assign this Agreement or any rights or obligations hereunder without the prior written consent

of each Purchaser (other than by merger). Any Purchaser may assign any or all of its rights under this Agreement to any Person to whom such 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 “Purchasers.”

5.8 No Third-Party Beneficiaries. The Placement Agent shall be the third-party beneficiary of the representations and

warranties of the Company in Section 3.1 and the representations and warranties of the Purchasers in Section 3.2. 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 4.8 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 New York, 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 City of New York. Each party hereby irrevocably submits to the exclusive jurisdiction of the state and federal courts sitting in

the City of New York, Borough of Manhattan 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 Company under

Section 4.8, 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 herein shall survive the Closing and the delivery of the Securities for the applicable statute of limitations.

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 facsimile transmission or by e-mail delivery of a “.pdf” format data file, by other electronic signing created on an

electronic platform (such as DocuSign) or by digital signing (such as Adobe Sign), 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 facsimile or “.pdf” or other electronic or digital 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.

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 any 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 such 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, unless such rescission or withdrawal would materially prejudice the Company.

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, each of the Purchasers 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.

5.16 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.

5.17 Independent Nature of Purchasers’ Obligations and Rights.

The obligations of each Purchaser under any Transaction Document are several and not joint with the obligations of any other Purchaser, and no Purchaser shall be responsible in any way for the performance or

non-performance of the obligations of any other Purchaser under any Transaction Document. Nothing contained herein or in any other Transaction Document, and no action taken by any Purchaser pursuant hereto or

thereto, 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 by the Transaction Documents. Each Purchaser shall be entitled to independently protect and enforce its rights including, without limitation, the rights arising out of this Agreement or out of the other

Transaction Documents, and it shall not be necessary for any other Purchaser to be joined as an additional party in any Proceeding for such purpose. Each Purchaser has been represented by its own separate legal counsel in its review and negotiation

of the Transaction Documents. For reasons of administrative convenience only, each Purchaser and its respective counsel have chosen to communicate with the Company through the legal counsel to the Placement Agent. The legal counsel of the Placement

Agent does not represent any of the Purchasers and only represents the Placement Agent. The Company has elected to provide all Purchasers with the same terms and Transaction Documents for the convenience of the Company and not because it was

required or requested to do so by any of the Purchasers. It is expressly understood and agreed that each provision contained in this Agreement and in each other Transaction Document is between the Company and a Purchaser, solely, and not between the

Company and the Purchasers collectively and not between and among the Purchasers.

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.

5.21 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 WAIVES FOREVER TRIAL BY JURY.

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.

DATA I/O CORPORATION

Address for Notice:

By:

Email:

Name:

Fax: 425-867-6898

Title:

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

Dorsey & Whitney LLP

701 Fifth Avenue, Suite 6100

Seattle, WA, 98104

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK

SIGNATURE PAGE FOR PURCHASER FOLLOWS]

[PURCHASER SIGNATURE PAGES TO DAIO SECURITIES PURCHASE AGREEMENT]

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: $_________________

Shares of Common Stock: _________________

Shares of Preferred Stock:_________________

Convertible Debentures convertible into Common Stock (principal amount): $________________

Convertible Debentures convertible into Preferred Stock (principal amount): $_______________

Existing Convertible Debenture Beneficial Ownership Blocker [check one]: 4.99% [ ] or 9.99% [ ]

EIN Number: _________________

Schedule A

Lock-up Parties

●

William Wentworth

●

Charles DiBona

●

Sally Washlow

●

Edward Smith

●

Garrett Larson

●

Steven Waszak

Exhibit A

Form of Lock-Up Agreement

[Exhibit A has been omitted pursuant to Item 601(a)(5) of Regulation S-K. The omitted schedules and

exhibits are not material and the Company believes would not contain information material to investors. The registrant agrees to furnish supplementally to the Securities and Exchange Commission a copy of any omitted schedule or exhibit upon

request.]

Exhibit B

Form of Registration Rights Agreement

See attached.

EX-10.2

Filename: d176225dex102.htm · Sequence: 5

EX-10.2

Exhibit 10.2

NEITHER THIS SECURITY NOR THE SECURITIES INTO WHICH THIS SECURITY IS CONVERTIBLE 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 CONVERSION OF THIS SECURITY MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT OR OTHER LOAN SECURED BY SUCH SECURITIES.

Original Issue Date: October 20, 2026

Original Conversion

Price (subject to adjustment herein): $2.68

$_______________

5% CONVERTIBLE DEBENTURE DUE OCTOBER 20, 2031

THIS 5% CONVERTIBLE DEBENTURE is one of a series of duly authorized and validly issued 5.0% Convertible Debentures of Data I/O

Corporation, a Washington corporation (the “Company”), having its principal place of business at 6645 185th Ave NE, Suite 100, Redmond, Washington, 98052, designated as its 5.0% Convertible Debenture due October __, 2031 (this

debenture, the “Debenture” and, collectively with the other debentures of such series, the “Debentures”).

FOR VALUE RECEIVED, the Company promises to pay to _____________ or its registered assigns (the “Holder”),

or shall have paid pursuant to the terms hereunder, the principal sum of $_______________ on October 20, 2031 (the “Maturity Date”) or such earlier date as this Debenture is required or permitted to be repaid as provided

hereunder, and to pay interest to the Holder on the aggregate unconverted and then outstanding principal amount of this Debenture in accordance with the provisions hereof. This Debenture is subject to the following additional provisions:

Section 1. Definitions. For the purposes hereof, in addition to the terms

defined elsewhere in this Debenture, (a) capitalized terms not otherwise defined herein shall have the meanings set forth in the Purchase Agreement and (b) the following terms shall have the following meanings:

“Acquisition Agreement” means the Stock Purchase Agreement dated as of October 18,

2026, is entered into between V-Tek Holdings, LLC, a Delaware limited liability company, William S. Karol, William S. Karol Family Trust, and Janice Hodson and the Company.

“Bankruptcy Event” means any of the

following events: (a) the Company or any Significant Subsidiary (as such term is defined in Rule 1-02(w) of Regulation S-X) thereof commences a case or other

proceeding under any bankruptcy, reorganization, arrangement, adjustment of debt, relief of debtors, dissolution, insolvency or liquidation or similar law of any jurisdiction relating to the Company or any Significant Subsidiary thereof,

(b) there is commenced against the Company or any Significant Subsidiary thereof any such case or proceeding that is not dismissed within 60 days after commencement, (c) the Company or any Significant Subsidiary thereof is adjudicated

insolvent or bankrupt or any order of relief or other order approving any such case or proceeding is entered, (d) the Company or any Significant Subsidiary thereof suffers any appointment of any custodian or the like for it or any substantial

part of its property that is not discharged or stayed within 60 calendar days after such appointment, (e) the Company or any Significant Subsidiary thereof makes a general assignment for the benefit of creditors, (f) the Company or any

Significant Subsidiary thereof calls a meeting of its creditors with a view to arranging a composition, adjustment or restructuring of its debts, (g) the Company or any Significant Subsidiary thereof admits in writing that it is generally

unable to pay its debts as they become due, (h) the Company or any Significant Subsidiary thereof, by any act or failure to act, expressly indicates its consent to, approval of or acquiescence in any of the foregoing or takes any corporate or

other action for the purpose of effecting any of the foregoing.

“Base Conversion

Price” shall have the meaning set forth in Section 5(b).

“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 are open for use by customers on such day.

“Change of Control Transaction” means the occurrence after the date hereof of any of

(a) an acquisition after the date hereof by an individual or legal entity or “group” (as described in Rule 13d-5(b)(1) promulgated under the Exchange Act) of effective control (whether through

legal or beneficial ownership of capital stock of the Company, by contract or otherwise) of in excess of 33% of the voting securities of the Company (other than by means of conversion or exercise of the Debentures and the Securities issued together

with the Debentures), (b) the Company merges into or consolidates with any other Person, or any Person merges into or consolidates with the Company and, after giving effect to such transaction, the shareholders of the Company immediately prior to

such transaction own less than 66% of the aggregate voting power of the Company or the successor entity of such transaction, (c) the Company (and all of its Subsidiaries, taken as a whole) sells or transfers all or substantially all of its

assets to another Person and the shareholders of the Company immediately prior to such transaction own less than 66% of the aggregate voting power of the acquiring entity immediately after the transaction, (d) a replacement at one time or

within a three year period of more than one-half of the members of the Board of Directors which is not approved by a majority of those individuals who are members of the Board of Directors on the Original

Issue Date (or by those individuals who are serving as members of the Board of Directors on any date whose nomination to the Board of Directors was approved by a majority of the members of the Board of Directors who are members on the date hereof),

or (e) the execution by the Company of an agreement to which the Company is a party or by which it is bound, providing for any of the events set forth in clauses (a) through (d) above.

“Conversion” shall have the meaning

ascribed to such term in Section 4.

“Conversion Date” shall have the meaning set

forth in Section 4(a).

“Conversion Price” shall have the meaning set forth in

Section 4(b).

“Conversion Schedule” means the Conversion Schedule in the form of

Schedule 1 attached hereto.

“Conversion Shares” means, collectively, the shares

of Common Stock issuable upon conversion of this Debenture in accordance with the terms hereof.

“Debenture Register” shall have the meaning set forth in Section 2(c).

“Equity Conditions” means, during the period in question, (a) the Company shall have

duly honored all conversions and redemptions scheduled to occur or occurring by virtue of one or more Notices of Conversion of the Holder, if any, (b) the Company shall have paid all liquidated damages and other amounts owing to the Holder in

respect of the Registration Rights Agreement, (c) the Common Stock is trading on a Trading Market and all of the shares of Common Stock issuable pursuant to the Transaction Documents are listed or quoted for trading on such Trading Market (and

the Company believes, in good faith, that trading of the Common Stock on a Trading Market will continue uninterrupted for the foreseeable future), (d) there is a sufficient number of authorized but unissued and otherwise unreserved shares of

Preferred Stock and Common Stock for the issuance of all of the shares then issuable pursuant to the Transaction Documents, (e) there is no existing Event of Default and no existing event which, with the passage of time or the giving of notice,

would constitute an Event of Default, (f) there has been no public announcement of a pending or proposed Fundamental Transaction or Change of Control Transaction that has not been consummated, and (g) the applicable Holder is not in

possession of any information provided by the Company, any of its Subsidiaries, or any of their officers, directors, employees, agents or Affiliates, that constitutes, or may constitute, material non-public

information.

“Event of Default” shall have the meaning

set forth in Section 8(a).

“Fundamental Transaction” shall have the meaning set

forth in Section 5(e).

“Interest Payment Date” shall have the meaning set forth

in Section 2(a).

“Issuable Maximum” shall have the meaning set forth in

Section 4(e).

“Late Fees” shall have the meaning set forth in Section 2(c).

“Mandatory Default Amount” means the sum of (a) the outstanding principal amount

of this Debenture, plus all accrued and unpaid interest hereon, and (b) all other amounts, costs, and expenses due in respect of this Debenture. Notwithstanding anything herein to the contrary, in the event that an Event of Default is

reasonably within the control of the Company and prevents the Holder from being able to convert this Debenture (other than failure to obtain Shareholder Approval), then the Holder shall receive the greater of (1) the sum of clauses (a) and

(b) above and (2) the outstanding principal amount of this Debenture, plus all accrued and unpaid interest hereon, divided by the Conversion Price on the date the Mandatory Default Amount is Demanded by the Holder, multiplied by the VWAP on the

date the Mandatory Default Amount is demanded by the Holder.

“New York Courts” shall

have the meaning set forth in Section 9(d).

“Notice of Conversion” shall have the

meaning set forth in Section 4(a).

“Optional Redemption” shall have the meaning

set forth in Section 6(a).

“Optional Redemption Amount” means the sum of (a) 130%

of the then outstanding principal amount of the Debenture, (b) accrued but unpaid interest and (c) all other amounts due in respect of the Debenture.

“Optional Redemption Date” shall have the meaning set forth in Section 6(a).

“Optional Redemption Notice” shall have the meaning set forth in Section 6(a).

“Optional Redemption Notice Date” shall have the meaning set forth in Section 6(a).

“Optional Redemption Period” shall have the meaning set forth in Section 6(a).

“Original Issue Date” means the date of the first issuance of the Debentures,

regardless of any transfers of any Debenture and regardless of the number of instruments which may be issued to evidence such Debentures.

“Permitted Indebtedness” means

(a) the indebtedness evidenced by the Debentures, (b) the Indebtedness existing on the Original Issue Date, (c) lease obligations and purchase money indebtedness incurred in connection with the acquisition of capital assets and lease

obligations with respect to newly acquired or leased assets, (d) indebtedness consisting of term notes in an amount not more than $15 million, (e) bank facility secured by inventory and receivables in an amount not to exceed 80% of

receivables or 40% of inventory, (f) indebtedness incurred under the Loan and Securities Agreement expected to be entered into between Western Alliance Bank and the Company, and (g) indebtedness incurred or assumed in connection with an

issuance or issuances contemplated by clause (d) under the definition of Exempt Issuance (as defined in the Purchase Agreement).

“Permitted Lien” means the individual and collective reference to the following:

(a) Liens for taxes, assessments and other governmental charges or levies not yet due or Liens for taxes, assessments and other governmental charges or levies being contested in good faith and by appropriate proceedings for which adequate

reserves (in the good faith judgment of the management of the Company) have been established in accordance with GAAP, (b) Liens imposed by law which were incurred in the ordinary course of the Company’s business, such as carriers’,

warehousemen’s and mechanics’ Liens, statutory landlords’ Liens, and other similar Liens arising in the ordinary course of the Company’s business, and which (x) do not individually or in the aggregate materially detract

from the value of such property or assets or materially impair the use thereof in the operation of the business of the Company and its consolidated Subsidiaries or (y) are being contested in good faith by appropriate proceedings, which

proceedings have the effect of preventing for the foreseeable future the forfeiture or sale of the property or asset subject to such Lien, (c) Liens incurred in connection with Permitted Indebtedness under clauses (a), (b), (d)/(e) or

(f) thereunder, and (d) Liens incurred in connection with Permitted Indebtedness under clause (c) thereunder, provided that such Liens are not secured by assets of the Company or its Subsidiaries other than the assets so acquired or

leased.

“Preferred Stock” means the Company’s Series C Preferred Stock.

“Purchase Agreement” means the Securities Purchase Agreement, dated as of October 19,

2026 among the Company and the original Holders, as amended, modified or supplemented from time to time in accordance with its terms.

“Registration Rights Agreement” means the Registration Rights Agreement, dated as of the

date of the Purchase Agreement, among the Company and the original Holders, in the form of Exhibit B attached to the Purchase Agreement.

“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 each Holder as provided for in the Registration Rights Agreement.

“Securities Act” means the Securities Act of 1933, as amended, and the rules and

regulations promulgated thereunder.

“Share Delivery Date” shall have the

meaning set forth in Section 4(c)(ii).

“Successor Entity” shall have the meaning

set forth in Section 5(e).

“Trading Day” means a day on which the principal

Trading Market is open for trading.

“Trading Market” means any of the following

successors to any of the foregoing).

“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 daily volume weighted average price of the Common Stock for 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)), (b) if OTCQB or OTCQX is not a Trading Market, the volume

weighted average price of the Common Stock for such date (or the nearest preceding date) on OTCQB or OTCQX as applicable, (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 on The Pink Open Market (or a similar organization or agency succeeding to its functions of reporting prices), the most recent bid price per share of the Common Stock so reported, 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 Purchasers of a majority in interest of the Securities then outstanding and reasonably acceptable to the Company, the fees and expenses of which shall

be paid by the Company.

Section 2. Interest.

a) Payment of Interest in Cash. The Company shall pay interest to the Holder on the

aggregate unconverted and then outstanding principal amount of this Debenture at the rate of 5.0% per annum, payable semiannually on November 1 and May 1, beginning on the first such date after the Original Issue Date, on each Conversion

Date (as to that principal amount then being converted), on each Optional Redemption Date (as to that principal amount then being redeemed) and on the Maturity Date (each such date, an “Interest Payment Date”) (if any Interest

Payment Date is not a Business Day, then the applicable payment shall be due on the next succeeding Business Day), in cash. On each anniversary of the Original Issue Date, the interest rate then in effect shall increase by 1% effective on such

anniversary.

b) Interest Calculations. Interest

shall be calculated on the basis of a 360-day year, consisting of twelve 30 calendar day periods, and shall accrue daily commencing on the Original Issue Date until payment in full of the outstanding

principal, together with all accrued and unpaid interest, and other amounts which may become due hereunder, has been made. Interest shall cease to accrue with respect to any principal amount converted, provided that, the Company actually delivers

the Conversion Shares within the time period required by Section 4(c)(ii) herein. Interest hereunder will be paid to the Person in whose name this Debenture is registered on the records of the Company regarding registration and transfers of

this Debenture (the “Debenture Register”).

c) Late Fee. All

overdue accrued and unpaid interest to be paid hereunder shall entail a late fee at an interest rate equal to the lesser of 18% per annum or the maximum rate permitted by applicable law (the “Late Fees”) which shall accrue daily

from the date such interest is due hereunder through and including the date of actual payment in full.

d) Prepayment. Except as otherwise set forth in this Debenture, the Company may prepay

any portion of the principal amount of this Debenture without the prior written consent of the Holder.

e) Interest Rate for Shareholder Meeting Deadline Failure. If the Company fails to hold a

Shareholder Meeting by the Shareholder Meeting Deadline, the Company shall pay interest to the Holder on the aggregate unconverted and then outstanding principal amount of this Debenture at the rate of 8.0% per annum, which shall be subject to

adjustment as set forth in this Section 2.

Section 3. Registration of

Transfers and Exchanges.

a) Different Denominations. This Debenture is

exchangeable for an equal aggregate principal amount of Debentures of different authorized denominations, as requested by the Holder surrendering the same. No service charge will be payable for such registration of transfer or exchange.

b) Investment Representations. This Debenture has been issued subject to certain

investment representations of the original Holder set forth in the Purchase Agreement and may be transferred or exchanged only in compliance with the Purchase Agreement and applicable federal and state securities laws and regulations.

c) Reliance on Debenture Register. Prior to due presentment for transfer to the Company

of this Debenture, the Company and any agent of the Company may treat the Person in whose name this Debenture is duly registered on the Debenture Register as the owner hereof for the purpose of receiving payment as herein provided and for all other

purposes, whether or not this Debenture is overdue, and neither the Company nor any such agent shall be affected by notice to the contrary.

Section 4. Conversion.

a) Voluntary Conversion. At any time after the Original Issue Date until this Debenture

is no longer outstanding, this Debenture shall be convertible, in whole or in part, into shares of Common Stock at the option of the Holder, at any time and from time to time (subject to the conversion limitations set forth in Section 4(d) and

Section 4(e) hereof). The Holder shall effect conversions by delivering to the Company a Notice of Conversion, the form of which is attached hereto as Annex A (each, a “Notice of Conversion”), specifying therein the

principal amount of this Debenture to be converted and the date on which such conversion shall be effected (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 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. To effect conversions hereunder, the Holder shall not be required to physically surrender this Debenture to the Company unless the entire principal amount of this Debenture, plus all accrued and

unpaid interest thereon, has been so converted in which case the Holder shall surrender this Debenture as promptly as is reasonably practicable after such conversion without delaying the Company’s obligation to deliver the shares on the Share

Delivery Date. Conversions hereunder shall have the effect of lowering the outstanding principal amount of this Debenture in an amount equal to the applicable conversion. The Holder and the Company shall maintain records showing the principal

amount(s) converted and the date of such conversion(s). The Company may deliver an objection to any Notice of Conversion within one (1) Business Day of delivery of such Notice of Conversion. In the event of any dispute or discrepancy, the

records of the Holder shall be controlling and determinative in the absence of manifest error. The Holder, and any assignee by acceptance of this Debenture, acknowledge and agree that, by reason of the provisions of this paragraph, following

conversion of a portion of this Debenture, the unpaid and unconverted principal amount of this Debenture may be less than the amount stated on the face hereof.

b) Conversion Price. The conversion price in effect on any Conversion Date shall be equal

to $2.68, subject to adjustment herein (the “Conversion Price”).

c) Mechanics of Conversion.

i. Conversion Shares Issuable Upon Conversion of Principal Amount. The number of

Conversion Shares issuable upon a conversion hereunder shall be determined by the quotient obtained by dividing (x) the outstanding principal amount of this Debenture to be converted by (y) the Conversion Price.

ii. Delivery of Conversion Shares

Upon Conversion. Not later than the earlier of (i) two (2) Trading Days and (ii) the number of Trading Days comprising the Standard Settlement Period (as defined below) after each Conversion Date (the “Share Delivery

Date”), the Company shall deliver, or cause to be delivered, to the Holder (A) the Conversion Shares which, on or after the earlier of (i) the six month 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 the Purchase Agreement) representing the number of Conversion Shares being acquired upon the conversion of this Debenture and (B) a

bank check in the amount of accrued and unpaid interest (if the Company has elected or is required to pay accrued interest in cash). 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 Conversion.

iii. Failure to Deliver Conversion Shares. If, in the case of any Notice of

Conversion, such Conversion Shares are not delivered to or as directed by the applicable Holder by the Share Delivery Date, the Holder shall be entitled to elect by written notice to the Company at any time on or before its receipt of such

Conversion Shares, to rescind such Conversion, in which event the Company shall promptly return to the Holder any original Debenture delivered to the Company and the Holder shall promptly return to the Company the Conversion Shares issued to such

Holder pursuant to the rescinded Conversion Notice.

iv. Obligation Absolute.

The Company’s obligations to issue and deliver the Conversion Shares upon conversion of this Debenture in accordance with the terms hereof are absolute and unconditional, irrespective of any action or inaction by the 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 the Holder or any other Person of any obligation to the Company or any violation or alleged violation of law by the Holder or any other Person, and irrespective of any other circumstance which might otherwise limit such obligation of the Company

to the Holder in connection with the issuance of such Conversion Shares; provided, however, that such delivery shall not operate as a waiver by the Company of any such action the Company may have against the Holder. In the event the

Holder of this Debenture shall elect to convert any or all of the outstanding principal amount hereof, the Company may not refuse conversion based on any claim that the Holder or anyone associated or affiliated with the 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 this Debenture shall have been sought and obtained, and the Company posts a

surety bond for the benefit of the Holder in the amount of 150% of the outstanding principal amount of this Debenture, 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 the Holder to the extent it obtains judgment. In the absence of such injunction, the Company shall issue Conversion Shares or, if applicable, cash, upon a properly noticed conversion.

v. Reservation of Shares Issuable

Upon Conversion. The Company 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 this Debenture and payment of interest on

this Debenture, each 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 Debentures), 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 5) upon the conversion of the then outstanding principal amount of this

Debenture and payment of interest hereunder. The Company covenants that all shares of Common Stock that shall be so issuable shall, upon issue, be duly authorized, validly issued, fully paid and nonassessable.

vi. Fractional Shares. For Common Stock: No fractional shares or scrip

representing fractional shares shall be issued upon the conversion of this Debenture.

vii. Transfer Taxes and Expenses. The issuance of Conversion Shares on conversion

of this Debenture shall be made without charge to the Holder hereof 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 Company 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 Holder of this Debenture so converted and the Company 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 Company the amount of such tax or shall have established to the satisfaction of the Company that such tax has

been paid. The Company shall pay all Transfer Agent fees required for same-day processing of any Notice of Conversion.

d) Holder’s Conversion

Limitations. The Company shall not effect any conversion of this Debenture, and a Holder shall not have the right to convert any portion of this Debenture, to the extent that after giving effect to the conversion set forth on the applicable

Notice of Conversion, the Holder (together with the Holder’s Affiliates, and any other 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 the Beneficial Ownership Limitation (as defined below). For purposes of the foregoing sentence, the number of shares of Common Stock beneficially owned by the Holder and its Affiliates and Attribution Parties shall

include the number of shares of Common Stock issuable upon conversion of this Debenture 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) conversion

of the remaining, unconverted principal amount of this Debenture 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 subject to a limitation on conversion or exercise analogous to the limitation contained herein (including, without limitation, any other Debentures) 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 4(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 4(d) applies, the determination of whether this Debenture is convertible (in relation to other securities owned by the Holder together with any Affiliates and Attribution Parties) and of

which principal amount of this Debenture is convertible shall be in the sole discretion of the Holder, and the submission of a Notice of Conversion shall be deemed to be the Holder’s determination of whether this Debenture may be converted (in

relation to other securities owned by the Holder together with any Affiliates or Attribution Parties) and which principal amount of this Debenture is convertible, 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. 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. For purposes of this Section 4(d), in determining the number of outstanding shares of Common Stock, the 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 Company’s 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 one Trading Day confirm orally and 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 Debenture, by the Holder or its Affiliates since the date

as of which such number of outstanding shares of Common Stock was reported. The “Beneficial Ownership Limitation” shall be 9.99% of the number of shares of the Common Stock outstanding immediately after giving effect to the issuance of

shares of Common Stock issuable upon conversion of this Debenture. The Holder, upon notice to the Company, may increase or decrease the Beneficial Ownership Limitation provisions of this Section 4(d), provided that the Beneficial Ownership

Limitation in no event exceeds 9.99% of the number of shares of the Common Stock outstanding immediately after giving effect to the issuance of shares of Common Stock upon conversion of this Debenture held by the Holder and the Beneficial Ownership

Limitation provisions of this Section 4(d) shall continue to apply. The Beneficial Ownership Limitation provisions of this paragraph shall be construed and implemented in a manner otherwise than in strict conformity with the terms of this

Section 4(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 this Debenture.

e) Issuance Limitations

. Notwithstanding anything herein to the contrary, if the Company has not obtained Shareholder Approval, then the Company may not issue, upon conversion of this Debenture or the Debentures, a number of shares of Common Stock which, when

converted into Common Stock and when aggregated with any shares of Common Stock issued on or after the Original Issue Date and prior to such Conversion Date (including such shares of Common Stock issuable upon conversion of Preferred Stock) would

exceed 209,907 shares of Common Stock (subject to adjustment for forward and reverse stock splits, recapitalizations and the like) (such number of shares, the “Issuable Maximum”). Each Holder shall be entitled to a portion of the

Issuable Maximum equal to the quotient obtained by dividing (x) the original principal amount of the Holder’s Debenture by (y) the aggregate original principal amount of all Debentures issued on the Original Issue Date to all

Holders. In addition, each Holder may allocate its pro-rata portion of the Issuable Maximum among Debentures held by it in its sole discretion. Such portion shall be adjusted upward ratably in the event a

Holder no longer holds any Debentures and the amount of shares issued to the Holder pursuant to the Holder’s Debentures was less than the Holder’s pro-rata share of the Issuable Maximum.

f) U.S. Securities Laws. This Debenture and the Conversion Shares issuable upon

conversion have not been registered under the Securities Act, or the securities laws of any state of the United States at the time of issuance and therefore this Debenture is and the Conversion Shares issuable upon conversion of this Debenture will

be a “restricted security” within the meaning of Rule 144(a)(3) under the Securities Act unless and until registered under the Securities Act.

Section 5. Shareholder Approval.

a) The Company shall provide each shareholder entitled to vote at a special meeting of

shareholders of the Company (the “Shareholder Meeting”), which shall be promptly called and held no later than 120 days from the Original Issuance Date (the “Shareholder Meeting Deadline”), a proxy statement

meeting the requirements of Section 14 of the Securities Exchange Act of 1934, as amended, and the related rules and regulations promulgated thereunder (the “Proxy Statement”) soliciting each such shareholder’s

affirmative vote at the Shareholder Meeting for approval of resolutions approving the Company’s issuance of the Common Stock and Preferred Stock issuable upon conversion of the Debentures (the “Shareholder Approval”) in

accordance with applicable law, the rules and regulations of the Nasdaq Stock Market, the Company’s articles of incorporation and bylaws the Washington Business Corporation Act, and the Company shall use its commercially reasonable best

efforts to solicit its shareholders’ approval of such resolutions and to cause the board of directors of the Company to recommend to the shareholders that they approve such resolutions.

b) If, despite the Company’s best efforts, Shareholder Approval is not obtained on or

prior to the Shareholder Meeting Deadline, the Company shall again seek Shareholder Approval at its next annual meeting of shareholders. If, despite the Company’s best efforts, Shareholder Approval is not obtained at the next annual meeting of

shareholders, the Company shall not thereafter have any obligation to continue to try to obtain such approval.

Section 6. Redemption.

a) Optional Redemption at Election of Company. Subject to the provisions of this

Section 6(a), at any time after the 36-month anniversary of the Effective Date, the Company may deliver a notice to the Holder (an “Optional Redemption Notice” and the date such notice is

deemed delivered hereunder, the “Optional Redemption Notice Date”) of its irrevocable election to redeem some or all of the then outstanding principal amount of this Debenture for cash in an amount equal to the Optional Redemption Amount

on the 20th Trading Day following the Optional Redemption Notice Date (such date, the “Optional Redemption Date”, such 20 Trading Day period, the “Optional Redemption

Period” and such redemption, the “Optional Redemption”). The Optional Redemption Amount is payable in full on the Optional Redemption Date. The Company may only effect an Optional Redemption if each of the Equity Conditions shall

have been met (unless waived in writing by the Holder) on each Trading Day during the period commencing on the Optional Redemption Notice Date through to the Optional Redemption Date and through and including the date payment of the Optional

Redemption Amount is actually made in full. If any of the Equity Conditions shall cease to be satisfied at any time during the Optional Redemption Period, then the Holder may elect to nullify the Optional Redemption Notice by notice to the Company

within 3 Trading Days after the first day on which any such Equity Condition has not been met (provided that if, by a provision of the Transaction Documents, the Company is obligated to notify the Holder of the

non-existence of an Equity Condition, such notice period shall be extended to the third Trading Day after proper notice from the Company) in which case the Optional Redemption Notice shall be null and void, ab

initio. The Company covenants and agrees that it will honor all Notices of Conversion tendered from the time of delivery of the Optional Redemption Notice through the date all amounts owing thereon are due and paid in full. The Company’s

determination to pay an Optional Redemption in cash shall be applied ratably to all of the holders of the then outstanding Debentures based on their (or their predecessor’s) initial purchases of Debentures pursuant to the Purchase Agreement.

b) Redemption Procedure. The payment of cash or issuance of Common Stock, as

applicable, pursuant to an Optional Redemption shall be payable on the Optional Redemption Date. If any portion of the payment pursuant to an Optional Redemption shall not be paid by the Company by the applicable due date, interest shall accrue

thereon at an interest rate equal to the lesser of 18% per annum or the maximum rate permitted by applicable law until such amount is paid in full. Notwithstanding anything herein contained to the contrary, if any portion of the Optional Redemption

Amount remains unpaid after such date, the Holder may elect, by written notice to the Company given at any time thereafter, to invalidate such Optional Redemption, ab initio, and, with respect to the Company’s failure to

honor the Optional Redemption, the Company shall have no further right to exercise such Optional Redemption. Notwithstanding anything to the contrary in this Section 6, the Company’s determination to redeem in cash or its elections under

Section 6(b) shall be applied ratably among the Holders of Debentures. The Holder may elect to convert the outstanding principal amount of the Debenture pursuant to Section 4 prior to actual payment in cash for any redemption under this

Section 6 by the delivery of a Notice of Conversion to the Company.

c) Automatic Conversion.

Notwithstanding anything herein to the contrary, upon receipt of Shareholder Approval (as defined in the Purchase Agreement), all of the outstanding principal amount of this Debenture plus accrued but unpaid interest shall automatically convert into

Common Stock with no further action required by the Holder at the then existing Conversion Price.

Section 7. Negative Covenants. As long as any portion of this Debenture remains

outstanding, unless the holders of at least a majority in principal amount of the then outstanding Debentures shall have otherwise given prior written consent, the Company shall not, and shall not permit any of the Subsidiaries to, directly or

indirectly:

a) other than Permitted Indebtedness, enter into, create, incur, assume,

guarantee or suffer to exist any indebtedness for borrowed money of any kind, including, but not limited to, a guarantee, on or with respect to any of its property or assets now owned or hereafter acquired or any interest therein or any income or

profits therefrom;

b) other than Permitted Liens, enter into, create, incur, assume or

suffer to exist any Liens of any kind, on or with respect to any of its property or assets now owned or hereafter acquired or any interest therein or any income or profits therefrom;

c) amend its charter documents, including, without limitation, its certificate of incorporation

and bylaws, other than to create the Preferred Stock, in any manner that materially and adversely affects any rights of the Holder;

d) repay, repurchase or offer to repay, repurchase or otherwise acquire more than a de

minimis number of shares of its Common Stock or Common Stock Equivalents other than as to (i) the Conversion Shares as permitted or required under the Transaction Documents and (ii) repurchases of Common Stock or Common Stock

Equivalents of departing officers and directors of the Company, provided that such repurchases shall not exceed an aggregate of $100,000 for all officers and directors during the term of this Debenture;

e) repay, repurchase or offer to repay, repurchase or otherwise acquire any Indebtedness, other

than the Debentures if on a pro-rata basis, other than regularly scheduled principal and interest payments as such terms are in effect as of the Original Issue Date or issued as Permitted Indebtedness,

provided that such payments shall not be permitted if, at such time, or after giving effect to such payment, any Event of Default exist or occur;

f) pay cash dividends or distributions on any equity securities of the Company;

g) enter into any transaction with any

Affiliate of the Company which would be required to be disclosed in any public filing with the Commission, unless such transaction is made on an arm’s-length basis and expressly approved by a majority of

the disinterested directors of the Company (even if less than a quorum otherwise required for board approval); or

h) enter into any agreement with respect to any of the foregoing.

Section 8. Events of Default.

a) “Event of Default” means, wherever used herein, any of the following

events (whatever the reason for such event and whether such event shall be voluntary or involuntary or effected by operation of law or pursuant to any judgment, decree or order of any court, or any order, rule or regulation of any administrative or

governmental body):

i. any default in the payment of (A) the principal amount

of any Debenture or (B) interest and other amounts owing to a Holder on any Debenture, as and when the same shall become due and payable (whether on a Conversion Date or the Maturity Date or by acceleration or otherwise) which default, solely

in the case of an interest payment or other default under clause (B) above, is not cured within 3 Trading Days;

ii. the Company shall fail to observe or perform any other covenant or agreement

contained in the Debentures (other than a breach by the Company of its obligations to deliver shares of Common Stock to the Holder upon conversion, which breach is addressed in clause (x) below) or in any Transaction Document, which failure is

not cured, if possible to cure, within the earlier to occur of (A) 5 Trading Days after notice of such failure sent by the Holder or by any other Holder to the Company and (B) 10 Trading Days after the Company has become or should have become aware

of such failure;

iii. a default or event of default (subject to any grace or cure

period provided in the applicable agreement, document or instrument) shall occur under (A) any of the Transaction Documents or (B) any other material agreement, lease, document or instrument to which the Company or any Subsidiary is

obligated (and not covered by clause (vi) below);

iv. any representation or

warranty made in this Debenture, any other Transaction Documents, any written statement pursuant hereto or thereto or any other report, financial statement or certificate made or delivered to the Holder or any other Holder shall be untrue or

incorrect in any material respect as of the date when made or deemed made;

v. the Company or any Significant

Subsidiary (as such term is defined in Rule 1-02(w) of Regulation S-X) shall be subject to a Bankruptcy Event;

vi. the Company or any Subsidiary shall default on any of its obligations under any

mortgage, credit agreement or other facility, indenture agreement, factoring agreement or other instrument under which there may be issued, or by which there may be secured or evidenced, any indebtedness for borrowed money or money due under any

long term leasing or factoring arrangement that (a) involves an obligation greater than $150,000, whether such indebtedness now exists or shall hereafter be created, and (b) results in such indebtedness becoming or being declared due and

payable prior to the date on which it would otherwise become due and payable;

vii.

the Common Stock shall not be eligible for listing or quotation for trading on a Trading Market and shall not be eligible to resume listing or quotation for trading thereon within five Trading Days;

viii. the Company (and all of its Subsidiaries, taken as a whole) shall be a party to

any Change of Control Transaction or Fundamental Transaction or shall agree to sell or dispose of all or in excess of 33% of its assets in one transaction or a series of related transactions (whether or not such sale would constitute a Change of

Control Transaction);

ix. the Initial Registration Statement (as defined in the

Registration Rights Agreement) shall not have been declared effective by the Commission on or prior to the 120th calendar day after the Closing Date or the Company does not meet the current public

information requirements under Rule 144 in respect of the Registrable Securities (as defined in the Registration Rights Agreement);

x. the Company shall fail for any reason to deliver Conversion Shares to a Holder prior

to the fifth Trading Day after a Conversion Date pursuant to Section 4(c) or the Company shall provide at any time notice to the Holder, including by way of public announcement, of the Company’s intention to not honor requests for

conversions of any Debentures in accordance with the terms hereof;

xi. any Person

shall breach any agreement delivered to the initial Holders pursuant to Section 2.2 of the Purchase Agreement;

xii. the electronic transfer by the Company of shares of Common Stock through the

Depository Trust Company or another established clearing corporation is no longer available or is subject to a “chill”;

xiii. any monetary judgment, writ or

similar final process shall be entered or filed against the Company, any subsidiary or any of their respective property or other assets for more than $50,000, and such judgment, writ or similar final process shall remain unvacated, unbonded or

unstayed for a period of 45 calendar days; or

xiv. a false or inaccurate

certification (including a false or inaccurate deemed certification) by the Company that the Equity Conditions are satisfied or that there has been no Equity Conditions Failure or as to whether any Event of Default has occurred.

b) Remedies Upon Event of Default. If any Event of Default occurs, the outstanding

principal amount of this Debenture, plus accrued but unpaid interest, and other amounts owing in respect thereof through the date of acceleration, shall become, at the Holder’s election, immediately due and payable in cash at the Mandatory

Default Amount. Commencing 5 days after the occurrence of any Event of Default that results in the eventual acceleration of this Debenture, the interest rate on this Debenture shall accrue at an interest rate equal to the lesser of 18% per annum or

the maximum rate permitted under applicable law. Upon the payment in full of the Mandatory Default Amount, the Holder shall promptly surrender this Debenture to or as directed by the Company. In connection with such acceleration described herein,

the Holder need not provide, and the Company hereby waives, any presentment, demand, protest or other notice of any kind, and the Holder may immediately and without expiration of any grace period enforce any and all of its rights and remedies

hereunder and all other remedies available to it under applicable law. Such acceleration may be rescinded and annulled by Holder at any time prior to payment hereunder and the Holder shall have all rights as a holder of the Debenture until such

time, if any, as the Holder receives full payment pursuant to this Section 8(b). No such rescission or annulment shall affect any subsequent Event of Default or impair any right consequent thereon.

Section 9. Miscellaneous.

a) Notices. Any and all notices or other communications or deliveries to be provided by

the Holder hereunder, including, without limitation, any Notice of Conversion, shall be in writing and delivered personally, by email attachment, or sent by a nationally recognized overnight courier service, addressed to the Company, at 6645 185th

Ave. N.E., Suite 100, Redmond, WA 98052, Attention: Charles DiBona, email address: legal@dataio.com, or such other email address or physical address as the Company may specify for such purposes by notice to the Holder delivered in accordance with

this Section 9(a). Any and all notices or other communications or deliveries to be provided by the Company hereunder shall be in writing and delivered personally, by email attachment, or sent by a nationally recognized overnight courier

service addressed to each Holder at the email address or address of the Holder appearing on the books of the Company, or if no such email attachment or address appears on the books of the Company, 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 date of transmission, if such notice or communication is delivered via email

attachment to the email address set forth on the signature pages attached hereto prior to 5:30 p.m. (New York City time) on any date, (ii) the next Trading Day after the date of transmission, if such notice or communication is delivered via

email attachment to the email address 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, (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 Debenture shall alter or impair the obligation of the Company, which is absolute and unconditional, to pay the principal of, and accrued interest, as applicable, on this Debenture at the time, place,

and rate, and in the coin or currency, herein prescribed. This Debenture is a direct debt obligation of the Company. This Debenture ranks pari passu with all other Debentures now or hereafter issued under the terms set forth herein.

c) Lost or Mutilated Debenture. If this Debenture shall be mutilated, lost, stolen or

destroyed, the Company shall execute and deliver, in exchange and substitution for and upon cancellation of a mutilated Debenture, or in lieu of or in substitution for a lost, stolen or destroyed Debenture, a new Debenture for the principal amount

of this Debenture so mutilated, lost, stolen or destroyed, but only upon receipt of evidence of such loss, theft or destruction of such Debenture, and of the ownership hereof, reasonably satisfactory to the Company.

d) Governing Law. All questions concerning the construction, validity, enforcement and

interpretation of this Debenture shall be governed by and construed and enforced in accordance with the internal laws of the State of New York, without regard to the principles of conflict of laws thereof. Each party agrees that all legal

proceedings concerning the interpretation, enforcement and defense of the transactions contemplated by any of the Transaction Documents (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 New York, Borough of Manhattan (the “New York Courts”). Each party hereto hereby irrevocably submits to the exclusive jurisdiction of

the New York Courts 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

Each party 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 Debenture 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. Each party hereto 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 Debenture or the transactions contemplated hereby. If any party shall commence an action or proceeding to enforce any provisions of this Debenture, 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.

a) Waiver or Amendment. This Debenture

may be amended or any provision hereof waived only with the written consent of the Company and Holders of at least 50% plus $1.00 of the aggregate Face Amount of all outstanding Debentures. Any waiver by the Company or the Holder of a breach of any

provision of this Debenture 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 Debenture. The failure of the Company or the Holder to insist upon strict adherence

to any term of this Debenture on one or more occasions shall not be considered a waiver or deprive that party of the right thereafter to insist upon strict adherence to that term or any other term of this Debenture on any other occasion. Any waiver

or amendment by the Company or the Holder must be in writing.

b) Severability. If any

provision of this Debenture is invalid, illegal or unenforceable, the balance of this Debenture 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. The Company covenants (to the extent that it may lawfully do so) that it shall 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 or other law which would prohibit or forgive the Company from paying all or any portion of the principal of or interest on this Debenture as contemplated herein, wherever enacted, now or at any time hereafter in force, or

which may affect the covenants or the performance of this Debenture, and the Company (to the extent it may lawfully do so) hereby expressly waives all benefits or advantage of any such law, and covenants that it will not, by resort to any such law,

hinder, delay or impede the execution of any power herein granted to the Holder, but will suffer and permit the execution of every such as though no such law has been enacted.

c) Remedies, Characterizations, Other Obligations, Breaches and Injunctive

Relief. The remedies provided in this Debenture shall be cumulative and in addition to all other remedies available under this Debenture and any of the other Transaction Documents at law or in equity (including a decree of

specific performance and/or other injunctive relief), and nothing herein shall limit the Holder’s right to pursue actual and consequential damages for any failure by the Company to comply with the terms of this Debenture. The Company

covenants to the Holder that there shall be no characterization concerning this instrument other than as expressly provided herein. Amounts set forth or provided for herein with respect to payments, conversion and the like (and the computation

thereof) shall be the amounts to be received by the Holder and shall not, except as expressly provided herein, be subject to any other obligation of the Company (or the performance thereof). The Company acknowledges that a breach by it of its

obligations hereunder will cause irreparable harm to the Holder and that the remedy at law for any such breach may be inadequate. The Company therefore agrees that, in the event of any such breach or threatened breach, the Holder shall be entitled,

in addition to all other available remedies, to an injunction restraining any such breach or any such threatened breach, without the necessity of showing economic loss and without any bond or other security being required. The Company shall provide

all information and documentation to the Holder that is requested by the Holder to enable the Holder to confirm the Company’s compliance with the terms and conditions of this Debenture.

d) 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.

e) Headings. The headings contained herein are for convenience only, do not constitute a part of

this Debenture and shall not be deemed to limit or affect any of the provisions hereof.

Section 10. Disclosure. Upon receipt or delivery by the Company of any notice in accordance with the

terms of this Debenture, unless the Company has in good faith determined that the matters relating to such notice do not constitute material, nonpublic information relating to the Company or its Subsidiaries, the Company shall within two

(2) Business Days after such receipt or delivery publicly disclose such material, nonpublic information on a Current Report on Form 8-K or otherwise. In the event that the Company believes that a notice

contains material, non-public information relating to the Company or its Subsidiaries, the Company so shall indicate to the Holder contemporaneously with delivery of such notice, and in the absence of any such

indication, the Holder shall be allowed to presume that all matters relating to such notice do not constitute material, nonpublic information relating to the Company or its Subsidiaries.

*********************

(Signature Page Follows)

IN WITNESS WHEREOF, the Company has caused this Debenture to be duly

executed by a duly authorized officer as of the date first above indicated.

DATA I/O CORPORATION

By:

Name: William Wentworth

Title: President and Chief Executive Officer

[Signature Page to Convertible Debenture – Common]

ANNEX A

NOTICE OF CONVERSION

The undersigned hereby elects to convert principal under the 5% Convertible Debenture due October 20, 2031 of Data I/O

Corporation, a Washington corporation (the “Company”), into shares of Common Stock (the “Common Stock”) of the Company 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 reasonably requested by the Company in

accordance therewith. No fee will be charged to the holder for any conversion, except for such transfer taxes, if any.

the delivery of this Notice of Conversion the undersigned represents and warrants to the Company that its ownership of the Common Stock does not exceed the amounts specified under Section 4 of this Debenture, as determined in accordance with

Section 13(d) of the Exchange Act.

The undersigned agrees to comply with the prospectus delivery requirements under

the applicable securities laws in connection with any transfer of the aforesaid shares of Common Stock.

Conversion calculations:

Date to Effect Conversion:

Principal Amount of Debenture to be Converted:

Number of shares of Stock to be issued:

Signature:

Name:

Address for Delivery of Stock Certificates:

Schedule 1

CONVERSION SCHEDULE

The

5.0% Convertible Debentures due on October 20, 2031 in the aggregate principal amount of $____________ are issued by Data I/O Corporation, a Washington corporation. This Conversion Schedule reflects conversions made under Section 4 of the

above referenced Debenture.

Dated:

Date of Conversion

(or for first entry, Original Issue Date)

Amount of

Conversion

Aggregate

Principal

Amount

Remaining

Subsequent to

Conversion

(or original

Principal

Amount)

Company Attest

EX-10.3

Filename: d176225dex103.htm · Sequence: 6

EX-10.3

Exhibit 10.3

NEITHER THIS SECURITY NOR THE SECURITIES INTO WHICH THIS SECURITY IS CONVERTIBLE HAVE BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE

THIS SECURITY AND THE SECURITIES ISSUABLE UPON CONVERSION OF THIS SECURITY MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT OR OTHER LOAN SECURED BY SUCH SECURITIES.

Original Issue Date: October 20, 2026

Original Conversion

Price (subject to adjustment herein): $2.68

$_______________

5% CONVERTIBLE DEBENTURE DUE OCTOBER 20, 2031

THIS 5% CONVERTIBLE DEBENTURE is one of a series of duly authorized and validly issued 5.0% Convertible Debentures of Data I/O

(this debenture, the “Debenture” and, collectively with the other debentures of such series, the “Debentures”).

FOR VALUE RECEIVED, the Company promises to pay to _____________ or its registered assigns (the “Holder”),

or shall have paid pursuant to the terms hereunder, the principal sum of $_______________ on October ___, 2031 (the “Maturity Date”) or such earlier date as this Debenture is required or permitted to be repaid as provided

Section 1. Definitions. For the purposes hereof, in addition to the terms

“Acquisition Agreement” means the Stock Purchase Agreement dated as of October 18,

2026, is entered into between V-Tek Holdings, LLC, a Delaware limited liability company, William S. Karol, William S. Karol Family Trust, and Janice Hodson and the Company.

“Bankruptcy Event” means any of the

following events: (a) the Company or any Significant Subsidiary (as such term is defined in Rule 1-02(w) of Regulation S-X) thereof commences a case or other

other action for the purpose of effecting any of the foregoing.

“Base Conversion

Price” shall have the meaning set forth in Section 5(b).

“Business Day”

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 are open for use by customers on such day.

“Change of Control Transaction” means the occurrence after the date hereof of any of

(a) an acquisition after the date hereof by an individual or legal entity or “group” (as described in Rule 13d-5(b)(1) promulgated under the Exchange Act) of effective control (whether through

or (e) the execution by the Company of an agreement to which the Company is a party or by which it is bound, providing for any of the events set forth in clauses (a) through (d) above.

“Conversion” shall have the meaning

ascribed to such term in Section 4.

“Conversion Date” shall have the meaning set

forth in Section 4(a).

“Conversion Price” shall have the meaning set forth in

Section 4(b).

“Conversion Schedule” means the Conversion Schedule in the form of

Schedule 1 attached hereto.

“Conversion Shares” means, collectively, the shares

of Preferred Stock issuable upon conversion of this Debenture in accordance with the terms hereof.

“Debenture Register” shall have the meaning set forth in Section 2(c).

“Equity Conditions” means, during the period in question, (a) the Company shall have

information.

“Event of Default” shall have the meaning

set forth in Section 8(a).

“Fundamental Transaction” shall have the meaning set

forth in Section 5(e).

“Interest Payment Date” shall have the meaning set forth

in Section 2(a).

“Issuable Maximum” shall have the meaning set forth in

Section 4(e).

“Late Fees” shall have the meaning set forth in Section 2(c).

“Mandatory Default Amount” means the sum of (a) the outstanding principal amount

reasonably within the control of the Company and prevents the Holder from being able to convert this Debenture or the Preferred Stock (other than failure to obtain Shareholder Approval), then the Holder shall receive the greater of (1) the sum

of clauses (a) and (b) above and (2) the outstanding principal amount of this Debenture, plus all accrued and unpaid interest hereon, divided by the Conversion Price of the Preferred Stock on the date the Mandatory Default Amount is

Demanded by the Holder, multiplied by the VWAP on the date the Mandatory Default Amount is demanded by the Holder.

“New York Courts” shall have the meaning set forth in Section 9(d).

“Notice of Conversion” shall have the meaning set forth in Section 4(a).

“Optional Redemption” shall have the meaning set forth in Section 6(a).

“Optional Redemption Amount” means the sum of (a) 130% of the then outstanding principal

amount of the Debenture, (b) accrued but unpaid interest and (c) all other amounts due in respect of the Debenture.